Nightmare for new house owner

29th December 2012

KUALA LUMPUR- After scrimping and saving for the past 20 years, an IT customer service executive thought that he could finally have a home he could call his own, only to see his dream turn into a nightmare.

Jonathan Rasiah, 46, led a frugal life for 20 years and managed to purchase a double-storey house in Bandar Kinrara for RM530,000 and was looking forward to moving in in August.

But as the year draws to an end, Jonathan is no closer to moving into his dream house because of the irresponsible acts of the former owner.

Jonathan purchased the house in Bandar Kinrara 4 in February after being introduced to the owner, C.K. Chong, by a real estate agent.

It was an exciting moment for him and his wife, Serene Jeevam.

The first hint of trouble came the following month when his house was splashed with red paint in the middle of the night.

Jonathan contacted Chong and asked for an explanation.

"Chong told me that he owed several loan sharks money but assured me that he would settle the problem and it would not happen again.

"I also lodged a police report over the incident."

"Debt collectors and loan sharks have splashed paint on my new house no fewer than four times, despite the fact that I do not owe them a single sen," he said yesterday.

"They have locked the front gate of my new house on several occasions and even told the contractor I hired that the house was not 'safe'.

"My plans of moving into the house in August was a pipe dream."

To make matters worse, the previous home owner has disconnected his phone line and is no longer reachable.

The loan sharks have turned their full attention on Jonathan and demanded full settlement of the loan.

In desperation, Jonathan sought the assistance of MCA Public Services and Complaints Department head Datuk Seri Michael Chong, who urged the former homeowner to come forward and clear the air.

"I am willing to assist the home owner in clearing his debts with the loan sharks, but he should come forward as Jonathan is the real victim here. He purchased the house in good faith," Chong said.

- New Straits Times

Increase in assessment rate due to change in land status: Shah Alam mayor

December 20, 2012

http://www.themalaysianinsider.com/malaysia/article/increase-in-assessment-rate-due-to-change-in-land-status-shah-alam-mayor/

Klang Valley’s property glut a draw for investors

December 06, 2012

KUALA LUMPUR, Dec 6 — A glut of commercial real estate in the Klang Valley is creating a tenant’s market that could lure investors on the hunt for strategic opportunities and higher yields in once-overlooked Asian cities, property analysts have said.

Singapore’s Business Times (BT) reported today that 89 million square feet (sqf) of investment-grade commercial space is already available and an estimated six million sqf more will come into the market by year end, which added to a projected 13 million sqf of net lettable area (NLA) due to be completed in the next two years will see a property glut in the Klang Valley, a fifth more than what is needed.

File photo of the Petronas Twin Towers (centre) and the Kuala Lumpur Tower in Kuala Lumpur. More commercial space is becoming available in the Klang Valley. — Reuters pic

While prime property rental in Malaysia’s capital city have remained steady at about RM7.36 per square foot (psf) for four successive quarters, a price war appears inevitable in the near future as more commercial space becomes available, which will likely limit the asking price as supply of net lettable space exceeds demand and landlords fight to retain tenants, the business daily reported.

“The slower take-up rate in new buildings has not yet translated to a decline in rents, but rents may come down in the future, as landlords strive to fill up space,” the paper quoted CBRE, a leading global commercial real estate services firm, as saying.

In a “good year”, two million to three million sqf of commercial space in the city, or including the greater Kuala Lumpur area 4.5 million to 5.5 million sqf, is absorbed annually, the paper said.

However, Kuala Lumpur is seen as an budding real estate player, offering a stable market with good opportunities for opportunistic returns, and was ranked fifth city out of 22 with the best prospects in investment and development in the Asia-Pacific according to the Emerging Trends In Real Estate Asia Pacific 2013 report by the US-based Urban Land Institute and PricewaterhouseCoopers (ULI-PwC), up 17th from last year. 

The Malaysian city gained favour for being “relatively stable but with good potential for opportunistic returns,” the report said.

The ULI-PwC report added: “The long-term prospects for the commercial property market are deemed by many to be strong, due to the success of the government’s Economic Transformation Programme in drawing foreign investment.”

CH Williams Talhar & Wong’s managing director Foo Gee Jen told BT that property developers are now savvier and are offering buildings with high technology features and green building certificates to draw investors.

“Also, integrated developments that offer a live-work-learn-play environment, with facilities all within walking distance, have become increasingly popular,” he told the paper.

“With high rents, high capital values, low yields and an abundance of local capital, many international investors are struggling to see attractive investment opportunities in Asia-Pacific’s prime real estate markets [like Singapore and Hong Kong],” Richard Price, CBRE Global Investors’ Asia Pacific chief executive, was reported by the Wall Street Journal (WSJ) to have said in a statement accompanying the report, which was published yesterday.

Quoting Price further, WSJ reported that the trend could in the coming year push money into once-overlooked Southeast Asian cities like Kuala Lumpur and Bangkok, as well as second-tier cities in China.

“The real-estate market is always an indication of people’s confidence in the economy [and the survey shows that] people are very positive about the Southeast Asian market,” said Choo Eng Beng, a partner and property specialist at PwC, told the influential business paper.

http://www.themalaysianinsider.com/malaysia/article/klang-valleys-property-glut-a-draw-for-investors/

Houseowners left in the lurch

Anisah Shukry

 | November 1, 2012

PETALING JAYA: Swayed by ads of a housing development project jointly run by DBKL, Khoo Ah Loi purchased a condominium unit in 1995 – only to learn years later that it was sold without his knowledge.

Despite this, Khoo must continue servicing the remainder of his loan (RM382,840, with interest) to the bank, having lost a decade-long legal battle against the developers.

Now without the home and on the verge of bankruptcy, Khoo sought help from the Housing and Local Government Ministry, Bank Negara, and the courts.

But none assisted him and Khoo is forced to continue the battle alone.

Meanwhile, fellow homeowner Foo Chee San faced a similar fate after purchasing a unit at the same condominium — and he has already been declared bankrupt.

According to the National Consumers Complaint Council (NCCC), Khoo and Foo are among many homeowners in Malaysia cheated of their property and unable to find a resolution to their woes even decades later.

“Housing cases increase day by day, and it runs to the thousands,” said K Ravin, the deputy director of NCCC.

“They are rarely, if ever, solved, and this is because housing laws are very weak, general and vague.

“On top of that, there is no synchronising between the housing ministry, banks and developers, and this leaves buyers in the lurch when they face problems,” he added.

Government not taking responsibility

Ravin said that while the government is keen on creating more affordable homes for the people, there is little to no monitoring done over its implementation.

Nor is there any proper redress system to protect house buyers should they find themselves stuck with houses that are unliveable and mounting debts from the bank.

Ravin’s comments come at a time when Housing and Local Government Minister Chor Chee Hung announced hat Malaysians earning less than RM2,500 may soon purchase the government-initiated People’s Housing Project units for only RM35,000 each.

Revisions to the first home ownership scheme in the Budget 2013 have also waived the requirement for three months of savings in the installments, making it even easier for first-time owners to cope with property costs.

But Md Wahab Md Ali, another homeowner who faced problems similar to Khoo, likened the ministry, Bank Negara and the judiciary to “tombstones” when it came to solving housing woes.

“I met Michael Chong (MCA Services and Complaints Department Head) regarding my problems, but he just told me they had too many complaint files to look through,” he said.

“I sent a letter to the National Housing Department, and they merely informed that they would take ‘tindakan sewajarnya’ (suitable action).

“But they have done nothing; the ministry is just lip service and ‘tindakan sewajarnya’ is their favourite phrase,” he said in disgust.

Life savings are robbed

Md Wahab had purchased a condominium unit in 1995, but the developers went bankrupt and the units — one of which he was still paying for — were left abandoned and rotting; littered with gaping holes; and filled with broken or vandalised facilities.

When the bank attempted to auction the units at less than half its original price, there were no takers and Md Wahab as well as fellow buyer Lee found themselves in a financial conundrum.

“Our life savings are robbed just like that, I am now blacklisted under CITOS, and soon the bank will come after me,” said Md Wahab. “Meanwhile, the original developer gets off scott free.”

He expected the ministry to take a more serious stand to protect buyers from errant developers, especially if the former expected the same people to give them support in the next general election.

“What is the ministry for? If you give license to these companies to develop homes, then control them as well. Go after them,” said Md Wahab.

Meanwhile, Ravin warned potential housebuyers to research the property and the developers first before committing to a purchase.

“All these people who came to complain here today purchased their homes legally and followed all the right procedures,” he pointed out.

“Yet they still face all these financial and legal problems, and there doesn’t seem to be an end to it,” he added.

http://www.freemalaysiatoday.com/category/nation/2012/11/01/houseowners-left-in-the-lurch/

Cut new home buyers some slack, minister urges banks

By Lee Wei Lian

October 19, 2012

The Minister told banks to be less strict in implementing BNM's  lending rules.

KUALA LUMPUR, Oct 19 ― Banks should be more lenient with first-time homeowners to help cope with rising property costs, said Datuk Chor Chee Heung today following a dip in loan approvals since Bank Negara Malaysia’s responsible lending guidelines.

The housing and local government minister also said that recent changes to make it easier for low-income households to qualify for their first mortgage will not pose a danger to the financial system.

“Hopefully banks will help genuine first home buyers and not speculators,” he said at the opening of the Malaysia Property Expo here. “Hope you can consider rather than say, ‘we are bound by Bank Negara’.”

The home loan approval rate has dipped nearly seven percentage points in the first half of the year, falling to 46.8 per cent from 50.1 per cent during the same period last year, after Bank Negara introduced stricter lending rules that went into effect in January.

The new guidelines include calculating loans eligibility based on net rather than gross income and aimed to increase prudent lending and avert the risk of property asset bubbles.

Research house HwangDBS Vickers estimated that for a 30-year loan on a RM500,0000 property, the lower margin of financing would set a borrower back by an additional RM360 per month, or nine per cent of average household income, on top of the two to three times higher down payment.

Chor said later in a press conference that, following the prudent lending guidelines, some banks had gone overboard and were refusing to lend.

“I urge banks to be more considerate,” he said. “You can be prudent, yes, but do more intelligence work. If a purchaser can [comfortably] repay, give them a loan.”

He also said that the revisions to the first home ownership scheme contained in the 2013 Budget that waived the requirement for three months of savings in instalments, would not pose a major fiscal risk.

“This is a risk the government took to encourage ownership among the rakyat,” he said. “It won’t pose a danger to the government.”

Observers had previously said that loosening the lending requirements in the first home ownership scheme could lead to a surge in unqualified home buyers and threaten the integrity of the financial system.

Chor said that the government was “struggling very hard” to ensure all Malaysians would be able to afford to either buy or rent a house.

He also said that the government was considering absorbing some of the cost of infrastructure and utilities in new developments under the PR1MA affordable housing programme, which could bring down costs to purchasers by as much as 10-15 per cent.

“If government can defray some of the costs of the utilities and infrastructure, the end result will be the final prices of houses will be cheaper,” he said.

http://www.themalaysianinsider.com/malaysia/article/cut-new-home-buyers-some-slack-minister-urges-banks/

"lllogical" & "unacceptable": Property managers slam Chor's proposed bill

Published on 11th Oct 2012

PETALING JAYA - The government's reason for the proposed amendment to the Strata Management Bill 2012 is "illogical" and "unacceptable", property managers claimed yesterday.

Malaysian Institute of Professional Property Managers (MIPPM) president Ishak Ismail said there was no issue of monopoly, which Housing and Local Government Minister Datuk Seri Chor Chee Heung had said was the main reason for the amendment.

This is because property management is a profession and not a business, and should therefore be regulated as all other professions are, he said.

"The minister has the responsibility to consider the interest of the public at large – house buyers and owners – and ensure property managers are regulated and under the purview of the Board of Valuers, Appraisers and Estate Agents.

"There is no issue of monopoly as those who are qualified property managers can register and start a practice as suggested in a proposed amendment to the Valuers, Appraisers and Estate Agents Act 1981 (VAEA)," he said.

The proposed amendment, which was announced on Sept 26, seeks to remove the term "registered property manager" and replace it with a newly defined "property manager" so that non-registered property managers can manage stratified buildings.

Board of Valuers, Appraisers and Estate Agents board member Siders Sittampalam said regulating the industry would not result in additional costs for the owners as registered property managers had to adhere to a fee scale under the VAEA.

"Sometimes, illegal property managers charge even higher fees than we do because they're not regulated or held accountable," he said.

Sittampalam, however, reiterated that owners who wish to manage their properties can continue doing so.

"This act only applies to owners who outsource property management to a third party, this should require a registered property manager," he said.

Meanwhile, Building Management Association of Malaysia (BMAM) secretary-general Prof S. Venkateswaran said BMAM was happy to hear Chor's intention to ensure there would be no monopoly of the building management industry.

"However, we still call for the term 'property manager' to be removed and replaced with 'building manager' so as to be consistent with the aims and objectives of BMAM," he told theSun yesterday.

He added that the mooted regulatory body for building managers should fall within the jurisdiction of the Housing and Local Government Ministry.

-thesundaily

10 steps toward affordable housing

From the "Question Time" Column of the Star newspaper
by: P. Gunasegaram
27th Sept 2012

It’s a complex problem which requires delicate yet decisive handling.

FOR too long, Malaysia has not had a pragmatic policy to deal with the issue of housing for the masses, which includes affordable housing for those who are relatively better off and low-cost housing for the poor.

The problem is a big one and particularly difficult.

Up to now, no satisfactory solution has been found. Low-cost houses are defined as those costing below RM42,000 while affordable housing costs between RM85,000 and RM300,000.

A good housing policy enables most people to have access to decent housing, which should be taken to mean housing with basic facilities in surroundings which are adequate and safe for human habitation and interaction.

There are several dimensions to this. If people are to be able to afford nice homes, they need adequate income.

That means proper housing cannot be divorced from the question of increasing incomes for all and must go hand in hand with that.

At the same time, if everything is left to the free market and to the whims of property developers, then there is going to be little development in this area which carries low margins.

The less affluent, who constitute most of the population, will be marginalised and those who have much more than others will accumulate property far in excess of their needs.

There needs to be control and regulations which are scrupulously enforced.

The Government now seems to be serious about doing something. And if it is, then it has to make several hard decisions.

There are already in place a number of housing programmes and these will no doubt be given a boost in the Budget to be unveiled tomorrow.

Here are our 10 steps towards low-cost and affordable housing and some of them are quite onerous. Others are probably already in contemplation and implementation stage but these steps must be the minimum that need to be taken to ameliorate and eventually solve the problem once and for all.

1. Set up a housing authority for this specific purpose. The 1Malaysia People Housing Programme or PR1MA has been set up for part of this purpose. But as it is currently constituted, its role is limited. You need one overall authority which will handle all forms of housing for the masses – that essentially means both low-cost and affordable housing under one roof. Without that, efforts are going to be piecemeal and not integrated.

2. Get the best brains to helm this authority. This is a tough problem and a very important one as it affects the well-being of most people in the country. It requires people of exceptional ability with impeccable integrity who will handle a wide-ranging array of powers to get to the root cause and get things moving. Someone with wide experience in the property sector and who now wants to move to public service would be an ideal choice.

3. The authority must be professionally and independently run. While a set of policies should be given, it must be completely above politics. The aim should be to provide affordable housing and nothing else.

4. It must run the projects by itself. Handing it over to developers just introduces another layer of profits and raises costs. That does not mean that there should be no subcontracting. Developers who have low-cost and affordable housing as part of their development should put their stock through the overall housing authority so that verification can be made of the buyers’ status.

5. Land must be acquired on a systematic basis. Both the federal and state government should allocate land for this purpose. Further, every large development should require an appropriate mix of low-cost, affordable and luxury development.

6. The authority must place rigid strictures on resale of property. Such sales must be made only back to the authority and if sale is within, say, five years, purchasers should not be able to reap a huge gain. That will mean a tightly controlled market for properties in this sector so that prices are kept as low as possible.

7. It must have an impeccable system of vetting applicants. Those who do not deserve it must not be allowed to get on board the scheme. Each applicant’s financial background must be thoroughly investigated before it is approved. Computerise as much as possible and link it with the various authorities. Even bank accounts should not be sacrosanct.

8. Reduce discretionary power. Criteria should be clearly set and once a person meets the criteria, he should be automatically eligible. If there are more applicants than units for a particular project, then selection should be made by public balloting.

9. Forget racial quotas which inevitably leads to politicisation. If some races are poorer than others, it will be automatically reflected when the criteria for eligibility are evaluated. That will avoid further division among Malaysians.

10. Do proper market research. The last thing we need is to have a surfeit of low-cost and affordable housing with insufficient takers. Needs and affordability have to be carefully studied and analysed to ensure the final product meets with market demand.

One of the greatest success stories anywhere for the provision of affordable, decent housing for its populace must be land-starved Singapore. Basically, it involved the evolution of a two-tier pricing system, one with strict controls for government-sponsored projects and another free-market priced system for the private sector.

While there is lot that can be learned from Singapore’s Housing Development Board and its system of HDB flats, one must be careful to learn from its mistakes as well.

Unrestricted access of foreigners to its property markets has resulted in a yawning chasm between private and government projects, leading Singaporeans to charge that they have been dispossessed in their own land.

That’s one of most major complaints of Singaporeans in what has been otherwise one of the greatest success stories of economic development, raising incomes and improvement of the quality of life in the world.

It’s a danger sometimes to keep the best for only those who can afford it. It is going to be quite a challenge to mix up low-cost and affordable housing within proximity of exclusive areas so that the population does not get alienated from each other.

There is, however, one truth that we cannot run away from. There is limited supply of land and it does not increase. But the population does and inevitably land prices are always going to rise.

If we don’t solve this problem of allocating an increasingly scarce resource fairly, there is going to be a major problem. At the end of the day, increasing incomes and reducing the gap between the rich and the poor is what will do most for affordable housing.

> P. Gunasegaram is an independent consultant and writer.

Property market cools amid debate over affordable housing

By Lee Wei Lian
September 04, 2012

KUALA LUMPUR, Sept 4 — The property market is showing signs of cooling even as developers and homebuyers take sides over the critical issue of housing affordability and the government mulls further steps to make it easier for Malaysians to own a home ahead of a crucial general election.

The home loan approval rate has dipped nearly seven percentage points in the first half of the year to 46.8 per cent from 50.1 per cent during the same period last year.

The trend is indicative of the residential market cooling following tightening measures by Bank Negara, Malaysia Property Inc, a government agency in charge of marketing Malaysian property abroad, said today.

Despite official statistics pointing to flattish growth in property prices since last year, many Malaysians are feeling fed-up over what they feel are continued unreasonable surges in house prices driven by market greed and warn of social consequences and even a potential backlash at the polls.

While property prices have not been used as an election issue in the past, they became a lightning rod of discontent across the Causeway where the opposition used it to garner popular support in last year’s Singapore general election.

It was also the number one issue identified by the prime minister’s Budget 2013 online feedback gathering platform, which ran from July 16-29, receiving almost 3,000 separate forms of feedback on the topic.

There are indications that the government is poised to take more fiscal measures to tackle affordability following previous tightening measures, such as a slight increase in real property gains tax, a cap on the loan-to-value ratio and efforts to curb household debt such as basing loans on net income rather than gross income.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said in a property forum late last month that the public perception was that the government had not done enough to control property speculation and that he would be recommending that fiscal policies affecting property be reviewed in Budget 2013 that will be presented on the 28th of this month.

The issue of affordability was also the main topic at several property conferences and forums organised in the past month at which developers acknowledged the public concern but warned that any move to increase affordability by dampening property market sentiment could have adverse effects on economic growth and potentially disrupt future supply.

House price growth nationally does not appear high but in key urban markets, such as Kuala Lumpur and Penang, prices have spiked dramatically giving rise to much discontent, especially among the younger generation, who say they have been priced out of the market as incomes have not kept pace.

Many industry observers say the problem lies with excessive speculation as word of attractive profits by buying and selling houses, or “flipping” spreads, entices speculative investors looking for high returns to pile into the market, crowding out prospective homeowners and genuine investors.

One developer based in Kajang acknowledged in a property forum last month that high returns in some of his projects — which roughly doubled in value over the space of the last two to three years — were causing a lot of speculative interest among investors.

Rehda president Datuk Seri Michael Yam said in a press conference today that while putting the brakes on speculation was alright, developers were wary of measures being taken too far.

“Nipping the bud of excessive speculation is ok but if tightening is too tough, it will have ramifications,” he said.

Yam also said that he was against any hike in the RPGT — which many potential homeowners say should be increased to cut down speculation — as it would make things more uncertain for investors and further the government’s flip-flop image.

Developers, meanwhile, say that affordability can be increased by releasing more government land for medium-cost homes; implementing an auto-release mechanism for unsold Bumiputera quota units, which currently represent a high holding cost; making utilities pay for their own infrastructure; and introducing steeper discounts on stamp duty for first-time homeowners.

While medium-cost properties have continued to rise in cost, figures provided by MPI show that the high-end of the market has seen prices actually fall following the imposition of the cap in loan-to-value ratios and increase in RPGT from five to 10 per cent.

For homes costing above RM500,000, they had depreciated by 3.16 per cent in 2011 as compared to 2004.

http://www.themalaysianinsider.com/malaysia/article/property-market-cools-amid-debate-over-affordable-housing/

KLIFD set to reshape Malaysia’s financial landscape

Published on 27th July 2012 in the freemalaysiatoday news portal:

By Saraswathi Muniappan

KUALA LUMPUR: The Kuala Lumpur International Financial District (KLIFD) is set to reshape Malaysia’s financial landscape in the region,as well as on the global front, with state-of-the-art infrastructure and technology.

The KLIFD, was one of the early Entry Point Projects (EPPs) under Malaysia’s Economic Transformation Programme (ETP), a national roadmap to more than double Malaysia’s per capita income to RM48,000 in 2020, while propelling the nation to a high-income economy.

The project will house a physical clustering of the right mix of key international institutions and support services, while estimated to grow to three times its current size by 2020.

Prime Minister Datuk Seri Najib Tun Razak is scheduled to launch the KLIFD on Monday.

The RM26 billion project also looks to deliver on the aspirations for Greater KL to drive rapid growth in parallel with upgrading the city’s liveability ranking to the top 20 in the world.

There would be strong emphasis on quality of life, appealing to the talent needed to support Greater KL.

“We plan KLIFD to be a space like no other, and this is our forte as urban planners. Buildings can always be good, but we want to emphasise that this project will resolve itself in the public realm,” Jorge Silvetti, Principal ,Machado and Silvetti Associates, the Master Planner for KLIFD said.

Machado Silvetti and Associates and its Malaysian partner, Akitek Jururancang (Malaysia) Sdn Bhd, are the master planners for KLIFD.

The 28.3-hectare (70 acre) project will also spearhead a greener Greater KL with green spaces, sustainable buildings, limited motor vehicle usage, large tranquil parks coupled with rooftop gardens and a solid waste management eco-system.

“The allocation of 30 per cent of the site for greenery might not be very different, but the way we are deploying it, the idea of creating the topography that not only hides cars, makes it more beautiful and pedestrian.

“It also allows for a water management programme that is going to be unique for a project of this scale,” said Silvetti.

Unlike ordinary projects, KLIFD’s core focus is sustainability with guidelines embedded from the master planning stage.

KLIFD’s green areas, for example, are highly functional, not just for beauty, but also encourages the creation of community, by making public spaces viable, and is vital for its water management system.

With the right ingredients for a world-class city, KLIFD is no doubt expected to attract top global companies to create a catalytic pool of world-class players.

Announced late 2010, work on the project by 1Malaysia Development Bhd (IMDB) has been on the fast track, endorsing the importance of the development in transforming the country into a financial hub.

Work on the project literally started on the day the plan was announced, but the journey was not easy given its magnitude. It sparked off not only tremendous interest among financial, construction and investment circles but also criticism.

1MDB Chief Executive Officer, Datuk Shahrol Halmi has been very clear from the beginning that the organisation would let its actions speak louder than words.

“We want the development to be on an orderly basis and ensure that there are marketing benefits,” he said.

Preliminary work started on July 1, 2012, with the first phase of the project expected to be operational in 2016.

Relocation, which started in early 2011, is now at the tail end. There were hurdles, but 1MDB fared considerably well, after reaching out to the United Nations High Commission for Refugees (UNHCR), Kuala Lumpur City Hall (DBKL) and political parties to help ease the process, and managed to solve disagreements amicably.

1MDB has successfully relocated most occupants and businesses from the site and the rest are expected to move out soon to make way for construction works.

Shahrol also said: “KLIFD is all about building the nucleus for talent and innovation, which is also in line with the government’s aim under the ETP.

“What KLIFD will create is the clustering effect to promote innovation, as that is what happens when institutions are grouped together, side by side.”

KLIFD also aims to further reinforce Malaysia’s position as a leader in global Islamic finance. It is a key component in Greater KL, which is identified as a National Key Economic Area (NKEA), to move Malaysia’s capital city up the value chain in the global economy.

The government, acknowledging the importance of the project, announced incentives for KLIFD in the 2012 Budget, including a 100 per cent income tax exemption for a period of 10 years, and stamp duty exemption on loan and service agreements for KLIFD status companies.

The rigorous process, interest and government support only goes to show that KLIFD is set to make a mark for itself in the global financial field.

-Bernama

http://www.freemalaysiatoday.com/category/business/2012/07/27/klifd-set-to-reshape-malaysias-financial-landscape/

Developers, distributors worry about cement price hike

This news was published in the MalaysianInsider News Portal:

July 26, 2012

http://www.themalaysianinsider.com/malaysia/article/developers-distributors-worry-about-cement-price-hike/

The VALUE is in HERITAGE

Published on 20th March 2012

Hot property in Penang

The cost of buying a pre-World War II shophouse in George Town, Penang, has reached RM2,000 per square foot equivalent to the price of the poshest Kuala Lumpur City Centre (KLCC) condominium units.

An entrepreneur, who declined to be identified, has just paid RM4mil for a 2,000sq ft shophouse along Lebuh Pantai (Beach Street) in order to continue an existing business located on the premises which she had been renting.

In the middle of 2011, Gooi paid about RM2 Mil
for his double-storey shop-house in
Lebuh Kimberley.

Before 2008 – the year, George Town was jointly listed with Malacca as Unesco World Heritage Sites - pre-war shophouses in Penang were generally going for about RM200,000-RM800,000 depending on size and location. Previously, an unrestored shophouse of 10ft by 36ft at Lorong Chulia only cost RM150,000 in 2009 but the asking price has since jumped to over RM300,000 of late.

Now, even the asking price of even the smallest shophouse that spans only 11ft by 30ft at Lorong Toh Aka is already RM600,000. Nearby, at Lorong Carnarvon, one unit of 17ft by 100ft has been sold for RM1.2mil while Lebuh Amernian shophouses can fetch RM3mil each.

Heritage value

Contrary to popular notion that foreigners and investors from Kuala Lumpur are pushing up prices of Penang heritage property, recent transactions show that Penang investors are the ones who are buying in a substantial way. This is particularly true among those who have lived abroad and recognise the heritage value.

According to informed sources, one businessman from Bukit Mertajam recently snapped up RM20mil worth of pre-war property including shophouses in one day.

Even derelict property such as the defunct Nam Wah Hotel & Bar, located at a prime location on Lebuh Chulia, was sold for RM7mil last year. The property comprises double-shophouse units with a land area of 14,000sq ft.

Such shophouse properties are often turned into “heritage” hotels, charging an average of RM300-RM400 per room per night.

According to local entrepreneur Seah Kok Heng, 42, he spent RM3mil in 2008 to acquire three derelict, triple-storey shophouses located at Rope Walk or Jalan Pintal Tali. Then, he spent another RM10mil to restore and transform the adjoining units into the Chinese-themed 1881 Chong Tian Hotel where certain suites sell for over RM2,000 a night.

Certain suites of the Chinese-themed 1881
Chong Tian Hotel cost over RM2,000 a
night.

Probably, the best-known heritage projects are by Penang-born businessman Christopher Ong who has lived in Australia as well as in Sri Lanka, where he once operated an award-winning hotel.

Together with business partners, he now owns and operates Muntri Mews, a nine-room hotel which was formerly a stable on Lebuh Muntri. This street has some of the finest Straits Eclectic shophouse facades in George Town.

Ong who is in his late 40s, is currently working on similar projects on Lorong Stewart and Lebuh Noordin, among other sites in George Town. He also used to own a double-storey, detached house built in the Colonial era located at Jalan Clove Hall. It was recently sold for close to RM8mil to Penang-born Jim Lim Teik Wah. Having lived in the UK for 40 years, Lim has returned to re-settle in George Town together with his English wife, Jo.

Another row of nine shophouses at Jalan Ariffin, just off Jalan Transfer, has been bought a local lawyer for an undisclosed sum. The units are being restored for another hotel project by the owner.

The Penaga Hotel project - which occupies Jalan Transfer, Jalan Hutton, and Lebuh Clarke – is another well-known development owned by veteran architect Hijjas Kasturi and his wife Angela, who reportedly spent RM50mil on it.

Obviously, such properties have also been bought by investors from Kuala Lumpur and from overseas.

Bought for RM2mil in 2008, Campbell House at Jalan Campbell is a 10-room hotel owned by Malaysian-born Nadya Wray and her Italian husband, Roberto Dreon. Nardya`s mother's great, grand uncle was Tunku Abdul Rahman, Malaysia’s first Prime Minister.

No. 23 Love Lane is another multi-million ringgit restoration project owned and funded by the art-loving wife of a former Malay Cabinet Minister from KL, who declined to be named.

Depending on the built-up area, restoring pre-war
shop-houses can cost at least RM200,000 for a
double-storey unit and considerably more for a
triple-storey house.

Nibong Tebal

While such buyers are tight-lipped, especially over the total costs of their acquisitions, lumber yard entrepreneur Gooi Kok Wah, 43, has no qualms about revealing the reasons for acquiring such properties.

The Nibong Tebal-based businessman has been eyeing and buying such shophouses since 2008 after the Unesco World Heritage Site listing. Apparently, that declaration fuelled the interest of astute locals as well as “outsiders” including Swiss, French, Australian and Singaporean investors.

“Current prices for such properties in prime areas like Beach Street can command RM2,000 per square foot, and RM1,000 per square foot and above, for touristy areas like Chulia Street, Love Lane, Muntri Street, Stewart Lane and certain heritage core zone sections. 

And even in lesser known segments like Prangin Lane, the asking price is at least RM400 per square foot,” explains Gooi, a former accountant.

To date, Gooi has bought six pre-war shophouse properties. His latest RM2mil purchase was for a two-

storey shophouse at Lebuh Kimberley that spans 20ft by 200ft with a built-up space of 6,000sq ft.

Heritage zone

He points out that George Town World Heritage Incorporated – an organisation under the State government – listed only 3,800 units of pre-war shophouses in the heritage core and buffer zones on the island.

The core zone covers an irregular-shaped site of 109 hectares on the north-east section of the island city. It is bounded by the sea on side and cocooned by the heritage buffer zone on the other side. The buffer zone covers 150 hectares.

The core zone is roughly hemmed by Pengkalan Weld, Jalan Tun Syed Sheh Barakbah, Lebuh Light, Lebuh Farquhar, Lorong Love, Lebuh Carnarvon, Lorong Carnarvon, Lebuh Melayu and Gat Lebuh Melayu.

And the buffer zone extends to part of the sea in front of Weld Quay and bounded by Jalan Prangin and Jalan Transfer. (Refer to http://www.penang-traveltips.com/george-town-unesco-world-heritage-site.htm)

“Such heritage property are in a classic demand and supply situation. The supply side is limited and cannot be increased in tandem with the increase in demand," says Gooi.

“Furthermore, supply can and will be reduced, due to accidents like fire and vehicle mishaps. There are also cases of misguided re-development with insensitive modification or illegal alteration destroying the heritage value of such houses as well as due to neglect and natural deterioration.

“However, demand is always increasing due to business opportunities with the increasing number of tourist arrivals as a result of more low-cost flights from other countries. Also, the rising interest of heritage buffs from outside Penang who desire to own such a property will further fuel demand.”

City residence

Born in Nibong Tebal, Gooi has lived and worked in London, Glasgow and Jakarta as well as Kuala Lumpur, Klang and George Town before deciding to re-settle in his hometown.

With his latest shophouse, the entrepreneur intends to restore the Kimberley Street property for his city residence.

As to the costs involved in restoring such shophouses, Gooi says there is no limit to "heritage building restoration" expenditure.

"It depends on how fine the quality you desire," said the father of three, "However, for ordinary or minimal cost restoration work, it would cost about RM300,000 for a shophouse unit of 1,400sq ft space."

Isn't it wiser to invest the total costs of buying and restoring a shophouse, in a newly-developed, landed property or condominium unit?

"No," advises Gooi, "I would say, heritage houses can command a much higher rate of return compared to other types of property."

Seah (left) says he spent RM10Mil restoring & refurbishing his 1881 Chong Tian Hotel.  Lim & Jo (right photo), bought
their colonial house on Jalan Clove Hall for close to RM8Mil.

High Court Case

One factor that contributed to the current high prices for pre-war shophouses in George Town can be traced to an incident at the High Court in Penang on Sept 29 in 2010.

On that day, a property auction by CIMB Bank attracted an unusually large crowd of over 70 people. The highlight of the sale was for an unrestored shophouse of 20ft by 125ft located on Armenian Street.

There were only five actual bidders including Gooi. The reserved price was RM450,000 and furious bidding pushed the price up to an astonishing RM1.1mil, setting a new benchmark in Penang. The eventual buyer was a veteran real estate consultant. And that property is now reputed to be worth at least RM2.6mil, as it is, without any restoration.

Observes Gooi, "Penang heritage houses and their stratgeic location means a unique combination. The value of pre-war shophouses still haven't been fully realised.

"One thing for sure, prices will continue to go up," predicts Gooi, who is still be on the prowl for such "heritage" property.

Think City

There have been efforts by the local authorities and Federal Government-backed bodies like Think City to help enhance the heritage value of these old buildings.

These organisations aim to engage stakeholders to improve the environment by maintaining the right architectural features as well as improve cleanliness and the drainage system, encourage more greenery, build pedestrian walkways and offer tourism attractions.

Anwar: "In those days, we were one
of the few houses with a toilet
inside."

No fun living in a shophouse

While new buyers of Penang's pre-war shophouses wax lyrical over the romantic notion of restoring and staying in a "heritage" home, those who grew up in such houses, don't fancy living in one again.

Tune Hotels strategic developments director Anwar Jumabhoy from the well-known Indian Muslim Jumabhoy family in Penang, recalls less than romantic memories of living in an old shophouse.

"Yes, I do remember living in Jalan Greenhall, Penang, just off Lebuh Light," says Anwar, who is in his 50s. He is bemused that new buyers were willing to pay so much money to restore such shophouses and even want to live in them.

"In those days, we were one of the few houses with a toilet inside and I used to watch in amazement at the 'night soil' trucks that used to come in the morning, and kids - without toilets - had to do their 'business' in the street.

"My parents' office was downstairs and we lived upstairs and learnt how to be well-behaved kids - you had to, as the floor was wooden, so too much running around meant a lot of noise for those in the office."

To the jetsetting corporate executive, a terraced house in those days meant, no windows except for the master bedroom. And the courtyard or air well was where the toilets and kitchen were located - at the back of the house. For a young child, going to the toilet at night was a scary experience especially through dimly-lit and long corridors.

"Now, would I consider living there again," reply Anwar, "not really, wooden floors, rickety stairs and a very, 'nice' attic. With options available today for modern comfort, the nostalgic experience might be nice for a couple of days, no more. For a more permanent home or hotel accommodation, I would much rather have a room with lots of windows and a view."

Lebuh Kimberley

A Chinese owner of a new double-storey, linked-house in the upscale neighbourhood of Seri Tanjung Pinang, who declines to be named, says she doesn't ever want to go back living in an old shophouse. 

She grew up on Lebuh Kimberley.

"Why would I ever want to live in such a home again? There's not much privacy especially when you have a big family," says the mother of a teenage girl.

While there are those who don’t have fond memories of living in rickety, old shophouses, a new generation of owners can’t wait to occupy their expensively restored heritage properties.

http://www.starproperty.my/PropertyGuide/Finance/19912/0/0