Kedah real-estate: Attractions and challenges

By SHAREN KAUR - April 20, 2018 @ 2:01pm

BUILDING more houses in Kedah will add to the state’s housing problem, especially if they are going to be priced at RM400,000 and above.

The overall property market in Kedah has not been performing well. Like other states, it has suffered a downturn, said Fahariah Abdul Wahab, research director at Henry Butcher Malaysia Solutions Sdn Bhd.

“Property developers are not putting too many of the million-ringgit homes into the market as the absorption rate is very low and slow. Kedah offers value for money in terms of residential properties for owner occupation. Generally, the market is geared towards more affordable homes. High-end properties do sell as well but the market is small compared to other cities,” she told NST Property.

Kedah experienced the first overhang status in history with 4,363 units of unsold stocks recorded last year, with most of them (3,401 units) located in the Kuala Muda District (covering Sungai Petani, Tikam Batu, Padang Tembusu, Sungai Lalang, Bedong,Bukit Selambau,Sidam, Gurun, Semeling, Merbok, Kota Kuala Muda and Tanjung Dawai).

Majority of the unsold units were landed houses priced between RM300,000 and RM400,000.

“In the last three years, the residential property market has seen lower numbers of transactions, and total values of residential transactions have also decreased. The residential market is very price-sensitive as well as highly competitive. In fact the market is seeing more developments offering incentives like rebates, free fees and free gifts in order to increase sales,” said Fahariah.

Based on National Property Information Centre (Napic) reports, in 2015 there were 30,711 units of properties transacted valued at RM5.6 billion, of which residential transactions accounted for 58 per cent of total volume of transactions. In terms of total value, residential transactions accounted for 54 per cent of total value of transactions for the whole state.

Napic numbers in 2016 showed that total property transactions by volume went down to 29,550 units (-3.8 per cent transaction). The total value of transactions was RM5.3billion, or a -4 per cent over the previous year.

NST Infographic

“Looking at the Napic data, it can be seen that the residential transactions is by far the most active sector of the property market compared with commercial and industrial. Most popular are the single-storey semi-detached houses, which generally register the highest volume of transactions, followed by single-storey terrace houses, two-storey terrace houses and then two-storey semi-detached houses.

This trend was prevalent in 2015 and 2016,” said Fahariah.

Surprisingly, although Kedah borders Thailand, there are hardly any Thai nationalities who buy in the state.

She said there is no compelling reason for Thai nationals to own a property in Kedah unless they are living or working in the state, or are married to Malaysians from Kedah.

SOUGHT-AFTER AREAS

Fahariah said for property development in Kedah, the most active area for residential and townships would still be Sungai Petani, which has the most numbers of new launches and projects under construction.

Other popular areas for development in Kedah are Kuala Ketil (located between Sungai Petani and Kulim), Jitra (fourth-largest town in Kedah) and Kulim (home to Kulim Hi-Tech Park).

There are a number of developers in Kedah and one of the biggest is BDB Land, developer of Bandar Darul Aman in Jitra, DarulamanPerdana in Sungai Petani and Darulaman Utama in Kuala Ketil.

Other developers include EUPE (which is developing Cinta Sayang Resort, Astana Parkhomes, Puncak Surya and SriIora), OIB (TamanPermaipura, SP Saujana, Taman Peruda), Chinhin (Taman Belimbing, Taman Desa Murni), OSK Properties (Bandar Puteri Jaya, Roseville, Fairfield Villas Yarra Park), and Plenitude Heights (Bintang Maya). Fahariah said the residential products in Kedah are comparable in terms of design, facade, facilities and finishes but price-wise, they are much lower than in key locations like Penang Island, Kuala Lumpur and Johor Baru.

“Majority of residential purchasers in Kedah are locals. There are some property buyers from Penang as well as those who are from Kedah but currently employed out of state,” she said.

Fahariah said the residential market in Kedah is competitive now for many developers, with too many of them chasing after the same pie.

She advised new developers wanting to enter the market to study the supply-demand situation in the state.

“The property market is quite small in Kedah. I believe the reason why developers are interested in the state is probably because of the lower entry cost compared to more developed states,” she added.

NST Infographic

EARLIEST DEVELOPER IN KEDAH

Paramount Property (Utara) Sdn Bhd is one of the earliest developers in Sungai Petani. It launched its flagship project, Taman Patani Jaya, way back in the early 1980s.

The company has completed the 70ha project with a total of 1600 units (with gross development value exceeding RM200 million).

After establishing a reputation for quality and reliability in the northern region, Paramount increased its landbank in the area, acquiring 202ha inNovember 1994. This led to the launch of Bandar Laguna Merbok—aluxury riverside residential township — in 1996.

The 200haBandar Laguna Merbok development is Kedah’s first gated-and-guarded township.

The whole township is said to have about 4,300 residential units (comprising double-storey and two-and-a-half-storey terraced units, double-storey semi-detached units and bungalows) and around 210 commercial properties worth almost RM1 billion.

The final phase of Bandar Laguna Merbok was Casa Villa featuring zero lot bungalows.

Situated on spacious lots of 40ft x 90ft or 40ft x 100ft, they were priced from RM719,900.

Today, the units are selling from RM900,000.

In December 2006, Paramount added 210ha land in Sungai Petani and by 2012 it launched the town’s only gated-and-guarded hilltop development, Bukit Banyan, consisting of bungalows, link villas, semi-detached homes, terraces and townhouses.

It has launched several phases — Eugenia 3A (from RM559,900), Emilia (from RM479,900), Amaryn (from RM369,900) and Citra Elite (from RM200,000)—and they will be handed over to buyers starting early next year.

Paramount Property has also launched Banyan Square, comprising two-storey shop offices priced from RM459,934 and they will be completed in the next two years.

CATALYTIC PROJECTS

Kedah’s major economic generators are in services, manufacturing and agriculture sectors.

The state has announced a number of projects in an effort to uplift its economy and create new jobs.

Among them are the Kedah Science and Technology Park (KSTP), anda769ha park in Bukit Kayu Hitam Industrial Area which is focusing on green technology, component research and development and manufacturing, ICT, advanced materials, agro science and bio technology.

KSTP will have multiple components to attract investors and businesses, such as commercial areas, higher learning and training centres, educational institutions and open spaces. The whole development is expected to create 23,244 jobs for the locals.

Another development is the 505ha Kedah Rubber City (KRC) located close to the Malaysia-Thai border in Padang Terap which is expected to spur demand. The KRC will focus on rubber manufacturing, specialised latex, precision engineered and green rubber products, creating 14,471 jobs and business opportunities.

Job creation would give opportunity to first-time buyers the ability to purchase a house or for existing owners to upgrade.

“Looking at the economy of Kedah, it has among the lowest household income but this needs to be compared with lower cost of living, more affordable homes andless-densed environment,” said Fahariah.

She is of the view that the state has to bring in more foreign investments which can generate higher income.

“In those sectors (services, manufacturing and agriculture), one needs to investigate whether they are generating high income for the people, or are they mid- and low- levels jobs,” she said.

There is a proposal to establish a land bridge between the Port of Songkla in southern Thailand and Penang Port, and this is expected to further boost job creation and property development potential.

Another project is an economic zone within the Bukit Kayu Hitam vicinity to cater to expected growth in economic activities in the border areas.

More economic activities in Bukit Kayu Hitam are expected to benefit Atlan Holdings Bhd as its The ZON duty-free outlet sits on 312ha land which has been earmarked for a major development.

MUSHROOMING COMMERCIAL UNITS

Kedah has lower household income compared with more affluent Penang, Klang Valley and Johor. Thus, malls, offices and hotels have to take the demographics, economics and business opportunities into account before building any new developments, said Fahariah.

She said the pace of commercial developments like malls, offices and hotels should not follow the same trend in other more affluent cities in Malaysia which are now faced with glut and oversupply.

Property development must be in line with market demand and should not be developer driven, which could be the case in most cities in Malaysia, she said.

“Even where it is developer-driven, responsible developers would have conducted in-depth research before embarking on any developments.”

Fahariah said there are more four- and five-star hotels in Langkawi due to tourist (both local and foreign) factor.

In Alor Star, there are only three four-star hotels, namely TH Hotel Alor Setar, Grand Alora Alor Setar and Holiday Villa Alor Setar.

This is despite the city being the state capital of Kedah.

For shopping centres, incoming supply is four new malls with total retail space of 9,077 sq m.

As per Napic data, as in the third quarter of last year, there were about 58 malls in Kedah with total retail space of 580,678 sq m.

In terms of Grade A office buildings, there is none so far in Kedah because the state has not attracted major international businesses and companies to set up presence there, said Fahariah.

“When there is a substantial number of corporations seeking Grade A offices and willing to pay the higher rentals, then there will be a market for these types of premises,” she added.

Serenity Sky Villas: Ideas for luxury homes

The light and spacious Serenity Sky Villa showroom reflects the light and spacious interiors.

By SHAREN KAUR - April 12, 2018 @ 2:18pm

WHAT makes a £1 million-£2 million (RM5.5 million-RM10 million) home in Vietnam?

Let’s take a look at a luxury apartment project in Ho Chi Minh City where the units come with their own private garden and swimming pool.

Serenity Sky Villas comprises 45 residential units featuring European contemporary architecture and design.

There are 45 flats spread across 18 levels, with all except two one-bedroom flats having a small swimming pool on the balcony.

The key design concept by the developer is to create a tropical skyscraper with villas in the sky.

A recent article in MailOnline indicates that the £2 million price tag is for the penthouse, while £1 million is for a four-bedroom unit.

A one-bedroom apartment cost around £260,000.

Whether you will pay £260,000 or £1 million for the unit depends on your affordability level but there is no reason why you can’t upgrade your existing property, taking inspiration from Serenity Sky Villas.†

MailOnline Property’s Myra Butterworth was given a private tour of a showroom for the luxury block of flats, which has a small swimming pool on each balcony.

Hire one of the top interior designers in town or get an architect to help make your place a retreat!

Luxury is seen in the living room that is designed with double-height ceilings to create a

spacious living area. Each unit is outfitted with marble and features a glass staircase and full glass walls, offering stunning aerial views of the whole city.

The designer kitchen includes a wine fridge, dark surfaces and a double sink area.

All bathrooms have luxury sanitary wares and fittings, and are decorated with marble textures and elegant white combined with warm wooden tones to bring out a luxurious and sophisticated look.

The kitchen is made entirely of wood and marble, and displays branded cookers, hood, built-in oven and microwave.

The spacious double bedroom has an en suite bathroom and large walk-in wardrobe.

Thoughtful architectural features, such as deep loggias are provided in all units.

MailOnline Property’s Myra Butterworth, who was given a private tour of a duplex showroom, said the luxury homes are interior designed throughout, with walk-in wardrobes, designer lighting and private lifts.

Each of the luxury apartments includes a swimming pool on the balcony overlooking the city.

According to Butterworth, the real star of the show at the block of flats is actually outside, with all but two of the 45 apartments having a balcony with a pool in it.

The apartments come with floor to ceiling glass windows, open-plan living areas, and electronic systems that control everything from lightings to curtain blinds.

Comfy, cosy sofas to sink into 

By SHAREN KAUR - April 20, 2018 @ 12:07pm

SITTING back and relaxing is one of life’s simple pleasures. For this, you need comfy and cosy sofas you can sink into.

King Living, famous for designing and manufacturing furniture since 1977, has an extensive collection of sofas for lounging and entertaining, modular sofas designed for flexibility or luxurious recliners for complete head-to-toe comfort.

They are available in premium fabrics and European leathers, and feature the brand’s galvanised steel frames that provide a strong foundation for each sofa.

The brand’s selling point is the quality of the products which come with a 25-year warranty on all its steel-framed furniture.

King Living’s couches also have patented technologies, such as the Postureflex Seating System, which is similar to that found in luxury cars like Ferrari, Porsche and Rolls-Royce; the TouchGlide Technology allows users to slide their fingers over buttons to move the seat into their preferred position; and Gesture Control, a function that memorises favourite positions so you don’t have to keep adjusting the seat every time you sit on it.

(File pix) Delta III

1. DELTA III

Perfect for all interiors from compact apartments to large flowing living spaces, the Delta III can be reconfigured into many different settings — nice and close for relaxing, expanded for entertaining or even a luxurious bed for two. The Delta III’s seat depth is also easily customisable with its adjustable backs. It also has storage options, providing added practicality without compromising comfort or design.

You can also keep everything at hand with optional Smart pockets on arms, offering clever storage for smaller items including TV remotes, magazines and iPads. Other accessories include an LED Reading Lamp, Swivel Table and Charge Table.

2. KING CLOUD III

The ultimate recliner lounge, King Cloud III features a headrest and recliner mechanism and an adjustable back, giving you full body comfort.

The clever and flexible modular design allows you to change the setting for your home theatre room or as reclining lounge in your living room.

The luxurious recliner features the integrated TouchGlide control technology that enables users to simply swipe their hand across the discretely located buttons to enjoy their personal comfort preference for a seamless lounging experience.

(File pix) King Cloud III

3. JASPER

Jasper graces the living room with its luxurious contemporary style and unique design features. It was designed to create infinite configurations and is perfect for open plan living and growing families. The arrangement of platforms, cushions and shelves can be easily moved around and rearranged to suit any occasion.

The sofa offers the option for unique timber shelves (available in congo, smoked oak and American walnut) that create a sophisticated lounge with storage for books, beverages or decorative displays.

But the biggest impression is left by Jasper’s luxurious comfort. The legs are adjustable allowing you to manually raise or lower your seat height taking pressure off your feet every time you sit down and relax.

(File pix) Jasper

(File pix) Strata

4. STRATA

Strata sofa’s and couches have an inviting contemporary style and unique design features. This award-winning leather sofa offers an experience like never before with its expansive seating and ability to transform into a bed. It is also the perfect sofa for hosting guests with its sturdy frame enabling a comfortable seat for eight to 10 people.

Strata’s seating options can be personalised to suit your specific comfort levels with adjustable legs. Optional adjustable legs allow you to raise or lower your seat height taking pressure off your feet every time you relax.

(File pix) Strata

Abandoned projects: Doing due diligence

By CHRISTOPHER CHAN - April 20, 2018 @ 1:12pm

HOW to avoid the risk of abandoned projects — conducting due diligence for purchasers?

To many purchasers, an investment in a property is a once-in-a-lifetime event. For a start, it involves a huge sum of money.

It is only natural that one of the issues that will come to mind would be the possibility of the project becoming abandoned.

File pix : Christopher Chan

It is not uncommon to hear real stories of abandoned projects and some people being caught in this unfortunate situation.

WHY DO PROJECTS GET ABANDONED?

There are a multitude of reasons to why a project becomes abandoned such as;

• Inexperienced developers;

• Poor marketing and sales strategies;

• Financial problems;

• Challenging economic conditions;

• Disputes between shareholders;

• Mismanagement of the company and business affairs; and

• Lack of enforcement and monitoring by the authorities.

It was reported not too long ago that the government had registered 253 abandoned private housing projects in Peninsular Malaysia since 2009 involving 64,290 residential units.

From the total of uncompleted houses, 43,537 units had been sold.

It is interesting to note that Selangor has the highest number of abandoned projects.

EXISTING LAWS

For developments that are subject to the Housing Development (Control & Licensing) Act (HDA) 1966 (Act 118), there were vast amendments made which came into effect on June 1 2015. Act 118 governs the licensing and control of housing developers in Peninsular Malaysia and protection of the purchasers. It is important to note that the amendments to the Act are not retrospective. Some of these amendments; 1) Amendment to section 6 on ‘Conditions or restrictions for the grant of a licence’. The developer’s deposit has now been increased to three per cent of the estimated cost of construction as certified by an architect in charge of the housing development in cash or in such other form as the minister may determine, if the application is made by the company/a person/body of persons’.

This means that only developers with a strong financial backing are able to be granted a licence for development.

Under Regulation 11A of the Housing Development (Housing Development Account) Regulations 1991 on ‘Controller may use the money in the Housing Development Account’, the Controller† of† Housing (appointed under section 4 of the said Act) may use the monies in the Housing Development Account of the development to ensure the completion of the development. The controller may also use the monies in the Housing Development Account to comply with an award made by the Tribunal for Homebuyer Claims.

2) Under the amendment to section 8A of the said Act on “Statutory termination of sale and purchase agreements (SPAs)”, the purchaser now has the right to terminate the SPA.

The purchaser can terminate the SPA if:

a) The licensed housing developer refuses to carry out or delays or suspends or ceases work for a continuous period of six months or more after the execution of the SPA;

b) The purchaser has obtained the written consent from the end-financier; and

c) The controller of housing has certified that the licensed housing developer has refused to carry out or delayed or suspended or ceased work for a continuous period of six months or more after the execution of the SPA.

Under section 8A(3), in the event of a termination, the developer shall within 30 days of such termination refund or cause to be refunded to such purchaser all monies received by the licensed housing developer from the purchaser free of interest.

3) Under section 18A of the said Act on “Offences relating to abandonment of housing development by a licensed housing developer”, the word “abandon” has been defined as ‘refuses to carry out or delays or suspends or ceases work continuously for a period of six months or more or beyond the stipulated period of completion as agreed under the SPA.

The punishment for this offence is a fine which shall not be less than RM250,000 but not exceed RM500,000 or imprisonment for a term not exceeding three years or both.

4) On the amendments to the Housing Development (Control and Licensing) Regulations 1989 (which came into effect on July 1 2015), one of the important amendments is with respect to the delivery of vacant possession of the property. The developer shall give the purchaser the Certificate of Completion and Compliance (CCC) and the separate strata title relating to the said parcel.

FOR DEVELOPMENTS NOT UNDER THE HDA

For developments not under the HDA such as commercial and industrial properties, purchasers are unfortunately not accorded the protection of the law

like the HDA. The purchaser is therefore advised to conduct due diligence as follows:

1) To check with the relevant authorities such as the Urban Wellbeing, Housing and Local Governmen Ministry to see if there have been any complaints lodged against the developer;

2) Is the developer experienced in this type of development or they are a novice venturing into this business from another business? Is the developer familiar with the local environment? The maxim of “location, location, location” may not necessarily hold true here as I have witnessed quite a few projects through the years where they had failed or were abandoned despite being located in very strategic areas.

3) To check the past developments undertaken by the developer. It is best to go and see these yourself. Check on the quality of workmanship and speak to past purchasers. Are the past purchasers happy with the developer? Are the past projects successful? Has there been an appreciation in the value of the properties since?

4) Check with the Companies Commission of Malaysia and Bursa Malaysia for public-listed companies to see the financial standing of the developer. You obviously would want a developer with a strong financial background to see through the completion of the project.

5) Go through the terms and conditions of the sale and purchase agreement to see if they are fair and reasonable to you as the purchaser. If in doubt, please consult your lawyer.

6) One of the important things, if not the most important, is to check on the developer’s character. Is the developer concerned with their brand? How did they carry out the repair work during the defect liability period? Do they abide by the laws and regulations imposed by the authorities? Do they say what they promised to do, such as, have they completed past projects within the agreed timeline?

UEM Sunrise to hand over keys from Q3

By SHAREN KAUR
Published in NST Property on April 19, 2018

UEM Sunrise Bhd, which is eyeing more land in Australia, will hand over the keys for Aurora Melbourne Central and Conservatory units to purchasers from the third quarter of this year.

(File pix) Aurora Melbourne Central, Conservatory and Mayfair have a combined estimated value of RM5 billion. UEM Sunrise Photo

The luxury property developer will hand over apartment units for the first phase of Conservatory in Melbourne to purchasers beginning end of September, said UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib.

Conservatory is UEM Sunrise’s second real estate development in Melbourne. The first is Aurora Melbourne Central and keys for the mixed-use project will be handed over to buyers from the third quarter of this year, said Anwar.

The topping-out ceremony of Conservatory was held recently and officiated by UEM Sunrise chairman Tan Sri Zamzamzairani Mohd Isa. Also present were Cox Architecture principal Philip Rowe, UEM Sunrise Australia head of operations Ong Chee Wei, UEM Group director Lim Tau Kien, and PDS Group managing director Andrew Fortey.

Construction for the A$300 million (RM904.70 million) luxury residential development, located at Mackenzie Street, started in 2013. Conservatory offers 446 units of one-, two- and three-bedroom residences with four levels of residential facilities.

“Conservatory represents a new era of population growth and will service Melbournians with luxury accommodation options, boasting views over the Carlton Gardens and lavish amenities such as a rooftop jacuzzi, private cinema and golf simulator,” said Anwar in a statement last week.

Anwar said the project is an integral part of Melbourne’s history. Before construction began, UEM Sunrise had engaged a consultant for an archaeological excavation of the site.

“They uncovered over 250,000 artifacts from the early gold rush in the 1800s when the site was the Mistletoe Hotel.”

A total 477 pieces of artifacts — such as gold accessories, everyday items and luxurious glassware — that were excavated at the project’s site will be displayed in purpose-built glass cases in the foyer of the building, of which the public can view from the Bell Place Laneway.

Site works for Mayfair, UEM Sunrise’s third project in Melbourne, will commence this year. Aurora Melbourne Central, Conservatory and Mayfair combined, have an estimated value of RM5 billion.

The sites for these developments were acquired beginning in 2014 for a collective sum of A$122 million.

World's tallest building back on track

(File pix) ‘Kingdom Tower’ is set to break records. JEC Photo

By SHAREN KAUR - April 20, 2018 @ 12:47pm

THE completion date for the world’s tallest structure, which will comprise 170 levels, is set for next year—almost eight years after the record-breaking project’s launch.

According to Times of Oman, Jeddah Tower in Saudi Arabia, which will more than double Malaysia’s 451.9-metre Petronas Twin Towers, had experienced delays, but construction is now progressing.

When completed, the skyscraper will rise at least 1,000 metres, overtaking the 828-metre Burj Khalifa in Dubai, which is currently the world’s tallest building.

The 88-storey Petronas Twin Towers are currently the tallest structures in Malaysia and the world’s tallest twin towers.

The towers were the world’s tallest buildings until 2004.

Malaysia’s soon-to-be tallest building is The Exchange 106, which is being built within the Tun Razak Exchange development in Kuala Lumpur. It will have 106 floors and eight basement levels, and stand at 492.3 metres.

The Exchange 106, slated for completion next year, will also be the tallest building in Southeast Asia and among the top 15 tallest buildings in the world.

However, in 2020, the Exchange106 is expected to end up as the second tallest structure in Malaysia as 644-metre Merdeka PNB 118, which has 118 floors, will be fully constructed.

Merdeka PNB 118, a project by Permodalan Nasional Bhd, is a mix-used development which will offer residential, hotel and office space.

The 118-storey tower, which is listed as one of 28 incredible skyscrapers of the future, will be the sixth tallest structure in theworld. Taking the lead will be Jeddah Towers, followed by Burj Khalifa, Suzhou Zhongnan Centre, China (729 metres), Dubai One (711 metres) and Wuhan CTF Centre,

China (648 metres).

Suzhou Zhongnan Centre is positioned to be the tallest building in China and the third tallest in the world when it is completed in 2020. It will have over 137 storeys with 470,000 square metres of mixed-use facilities such as Grade A offices, deluxe apartments, a six-star hotel, an observation deck, and a podium with premium retail, entertainment, hotel, conference facilities, multi-functional ballrooms and a six-level basement.

Wuhan CTF Centre, at 121 floors, will comprise office space and a hotel, and form part of the Wuhan Chow Tai Fook Financial Centre.

JEDDAH TOWER

Jeddah Economic Co (JEC) chief executive Mounib Hammoud was quoted assaying that Jeddah Tower will hopefully open for business by 2020.

Once dubbed “Kingdom Tower”, Jeddah Tower will be one of the world’s most expensive development, boasting a Four Seasons hotel, Four Seasons furnished apartments, first-class office space and retail.

It will also feature the world’s highest observatory deck at Level 157 (at 644 metres) which will double as an “air park”.

The residential components will offer two- to six-bedroom suites to fit the needs of the ultra-high net worth individuals who appreciate a life of high standards.

Jeddah tower will be the centrepiece and first construction phase of the US$20 billion (RM77.5 billion) Jeddah Economic City development by JEC near the Red Sea.

The development will have residential and commercial units, an international hotel, business offices, educational centres, a diplomatic area, commercial centres, entertainment and tourist facilities, and water sports activities.

JEC was formed in 2009 to develop the city.

Principal JEC financiers include Kingdom Holding Co, Abrar Holding Co and construction giant Saudi Binladin Group, who is the project’s main contractor.

According to an article in MailOnline last year, the costs to build Jeddah Tower was originally estimated at around £900 million (RM4.9 billion). But delays and an oil price crash have skyrocketed the total cost to £1.5 billion (US$2 billion).

Saudi Binladin was among the kingdom’s construction firms that suffered heavy financial losses aftera collapse in oil revenues in 2014.

The company, which has developed other prominent buildings in Saudi Arabia, was founded more than 80 years ago by the father of deceased Al-Qaeda leader Osama Laden.

Plans were first announced for Jeddah Tower in August 2011, where it would take 36 months to build after construction started.

By November 2014, a four-storey foundation was in place and the building was expected to be completed this year. But that was before Saudi Arabia felt the full force of a drop in oil revenues.

In November 2015, Kingdom Holding said JEC had reached a financing deal with Saudi Arabia’s Alinma Investment to finish the Jeddah Tower, which then had 26 floors completed.

In the Times of Oman report, the daily said the construction of the tower has reached 63rd floor and the superstructure — the concrete shell and the cladding — is to be completed next year.

(File pix) Infographics from Adrian Smith + Gordon Gill Architecture, CTBUH

Know your real estate practitioner

There are about 1,964 estate agents and 24,590 negotiators in Malaysia currently.

By CHRISTOPHER CHAN - April 5, 2018 @ 1:25pm

ALL around the world, real estate practitioners play a pivotal role in marketing properties, getting qualified prospects, negotiations and guiding one through property transactions.

If you have sold/bought or let out/rented a property, chances are that you would most probably have made contact with an estate agent/negotiator. If you have not done so, you most probably will in the future. Hence it is of great importance that you know them well.

The profession of estate agency in Malaysia is governed by the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242), Valuers, Appraisers and Estate Agents Rules 1986, Malaysian Estate Agency Standards, guidelines, circulars and directives issued by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP).

The Act provides for the setting up of BOVAEP which regulates the estate agency profession.

A registered estate agent as defined in the Act is a person whose name has been entered under Part IV of the Register and to whom an authority to practise has been issued by the board under Section 16 of the said Act.

“Estate Agency Practice” is defined in the Act as “acting or holding oneself out to the public or to any individual or firm as ready to act, for a commission, fee, reward or other consideration, as an agent in respect of the sale or other disposal of land and buildings and of any interest therein or the purchase or other acquisition of land and buildings and of any interest therein or in respect of the leasing or letting of land and buildings and of any interest therein including the act of making known of the availability of land, building or any interest therein for such sale or other disposal, purchase or other acquisition, leasing or letting”.

The Act in fact came into force on February 6 1981. At the time it governed only the professions of Valuers and Appraisers and the Act governing them was known as the Valuers and Appraisers Act 1981.

In 1984, in response to a critical need to regulate the estate agency profession as a result of unprofessional practices by unregulated people carrying out estate agency activities, the Act was amended to incorporate the profession of estate agency and hence it was known as the Valuers, Appraisers and Estate Agents Act 1981 which came into force on 7 September 1984.

Effective January this year, the Act was amended to facilitate the registration of property managers who will now also come under the Act. Hence, the Act is now known as “Valuers, Appraisers, Estate Agents and Property Managers Act 1981”.

To be eligible to be registered as an estate agent, one would be required to pass the board’s Written Estate Agents Examination Part 1 and 2 (or other equivalent course of study recognised by the board) and the Test of Professional Competence (TPC). It is a stringent process and it can take a good number of years before one is able to be registered as an estate agent.

A person who has passed the board’s Written Examination Part 1 and 2 (or other equivalent course of study recognised by the board) may then proceed to register as a probationary estate agent (PEA). A PEA registration number is denoted by PEA followed by a few digits. There are about 704 PEAs currently.

An estate agent’s registration number is denoted by an “E” followed by a few digits. Currently, there are about 1,964 estate agents in the country.

Once a person becomes a registered estate agent, he/she is then able to establish his/her own real estate agency practice by forming a body corporate, a partnership or a sole proprietorship.

The fee for engaging a registered estate agency firm:

a) Sale or Purchase

The maximum fee (as provided for under the Seventh Schedule of the Rules) is three per cent for the sale or purchase of land and buildings. The same maximum fee applies to the other services rendered by the estate agency firm, such as joint venture, sale of company, property swap. For chattels including plant and machinery, a fee of 10 per cent is chargeable on the proceeds.

The above is subject to a minimum fee of RM 1,000 per property.

For sale and marketing of projects, the fees are to be agreed between the estate agency firm and the client. This means that it is not subject to the abovementioned maximum cap and hence the fee could be higher than three per cent (subject to agreement from the client).

The above scale of fees will not apply to the sale of foreign properties in Malaysia or sale of Malaysian properties in foreign countries. It is therefore not subject to the maximum cap of three per cent and could be higher (subject to agreement from the client).

b) Lettings

A maximum fee chargeable is 1.25 months gross rental for tenancy of up to three years.

The above is subject to a minimum fee of one month rental.

For rent reviews, a fee of 50 per cent of the abovementioned rate is chargeable.

c) Additional Claims

In addition to the fees stated in (a) and (b), claims may be made for the following (subject to concurrence of the client):

i) The costs of printing, plans, copies of documents, lithography, travelling (only where the distance between the estate agent’s office and the property is more than 40km) and other expenses actually incurred.

(ii) The cost of media advertisements, signboards, brochures and other promotional material.

THE NEGOTIATOR

Prior to the recent amendments to the Act (which came into force in January this year), there was no mention of the word “negotiator” in Act 242. Since then, there is a new insertion under Section 22C where it states “a negotiator may assist the registered estate agent in the estate agency practice” and “negotiator means a person who is employed by a registered estate agent to assist him in the estate agency practice”. By this it means that a negotiator cannot work independently and must be always under the supervision of a registered estate agent. There are about 24,590 negotiators currently.

It is mandatory for anyone who wishes to become a negotiator to undertake the two-day Negotiator Certification Course (NCC), an intensive training course. This is a pre-requisite to formal registration as a negotiator with BOVAEP where one will be given a tag together with a REN Number (REN followed by a few digits digits). REN is an acronym for Real Estate Negotiator. Negotiators must wear the tag during the course of their business and the REN number must be stated in all forms of promotional and marketing materials.

Some of the important recent amendments to the Act:

1) There is a new insertion under section 22B of the Act on “Estate agency practice” wherein it states “In respect of any tenancy administration including the rental collection, payment of outgoings, arrangement for minor repairs and handing over and taking over the possession of a property of any land and buildings and of any interest therein”. This means that estate agents can now do tenancy administration for their clients. However the professional fee for tenancy administration has yet to be fixed by BOVAEP at this point in time.

2) A non-citizen and non-permanent resident of Malaysia can now register as an estate agent/probationary estate agent with the removal of section 22D subsection 5 of the Act on “Qualifications for registration of estate agents and probationary estate agents” (subject to them fulfilling the requirements for registration with BOVAEP).

The benefits of engaging a registered estate agency firm:

1) All registered estate agency firms are covered under the mandatory Professional Indemnity Insurance policy and Fidelity Guarantee Insurance policy.

2) Able to deduct the professional fees paid to the estate agency firm as incidental costs on the acquisition and disposal of the property as provided for under the Real Property Gains Tax Act 1976.

3) An aggrieved party has recourse to BOVAEP in the event of a dispute or complaint where the aggrieved party can seek assistance from BOVAEP. The Board has committees in place for this purpose, i.e. Complaints Management Committee and Complaints Investigation Committee.

Ultra-wealthy prefer to invest in stocks, properties

(From left) Knight Frank head of research for Asia Pacific Nicholas Holt, Knight Frank Malaysia executive director James Buckley and Knight Frank Malaysia associate director international project marketing Dominic Heaton-Watson.

By SHAREN KAUR - April 12, 2018 @ 1:47pm

Despite the increasing popularity of cryptocurrencies such as Bitcoin, the ultra-wealthy around the world still prefer parking their money in stocks and properties, according to Knight Frank head of research for Asia Pacific Nicholas Holt.

The biggest draw for new investments by the wealthy last year was equities.

As stock markets around the globe soared, the appetite for shares was greatest in Asia. Beating the global average by 21 per cent, 83 per cent of Asian respondents said their clients increased their exposure to equities last year.

According to the latest Wealth Report 2018 by Knight Frank, 43 per cent of Malaysian clients planned to invest in properties overseas. Malaysia topped the list in terms of those looking to invest abroad, followed by Hong Kong (40 per cent), China (37 per cent) and Singapore (30 per cent). 

Holt said the level of investors in Malaysia investing abroad had been relatively stable over the years, adding that a similar trend could be expected over the next few years.

“It should be stable, going forward. With the current property glut and wait-and-see approach adopted by investors, it is certainly a driver to continue investing abroad.”

Knight Frank Malaysia executive director James Buckley said Malaysian investors were increasingly looking to invest in mature markets like the United Kingdom, Australia and Singapore.

The three countries were above the global average of 34 per cent when considering overseas purchases, according to the report.

The report said the other two top overseas destinations for Malaysian investors this year were the United States and New Zealand.

Besides looking at traditional property sectors such as residential, office, retail and hotels, Malaysian investors are also diversifying into purpose-built student accommodation.

Student accommodation over the last five years had been the star performer for UK property, he said.

“Increasing student numbers and a structural undersupply have driven rental growth and occupancy. Education is less correlated to the health of the general economy, which investors are also attracted to,” he said at the launch of the Wealth Report.

Knight Frank Malaysia associate director international project marketing Dominic Heaton-Watson said for the London market, Malaysians were targeting city fringe locations that had connectivity and linked to rail, as well as high-yield assets in east London.

“Malaysians are investing in London for a few reasons. They are looking at prime site assets that offer high yields and capital appreciation. They are also looking at investment portfolio diversification,” he said.

Heaton-Watson said despite the ongoing Brexit negotiations, London still ranked No. 2 in the future economic performance category.

“This is due in part to the impressive growth of the creative and tech sectors, as well as large-scale infrastructure investment, such as Crossrail.”

Other investment tools

According to Knight Frank’s The Wealth Report Attitudes Survey 2018, 28 per cent of Asians list wine, jewellery, watches or classic cars as part of their investment portfolio, below the global average of 37 per cent.

Cryptocurrencies are included in the survey for the first time as an asset class within the investment portfolio. Malaysians respondents were most optimistic about increasing the amount of cryptocurrencies held in their portfolios, with 21 per cent of respondents saying they planned to increase its weight.

“While dominating the headlines over the last 12 months, awareness of what impact Blockchain could have on wealth portfolios remains fairly low in the Asia Pacific. In terms of real estate, the potential of making transactions simpler and more straightforward via Blockchain technology, while a future possibility is not currently being seriously considered by most surveyed,” said Holt.

Surprisingly, gold had lost some of its glitter as an investment for most of Asia: only China and Malaysia saw significant reallocation into the precious metal with 46 and 33 per cent of respondents saying their clients increased allocations last year, above the global average of 25 per cent.

Knight Frank Malaysia managing director Sarkunan Subramaniam said wealthy investors in Malaysia notably increased their exposure to bonds and gold last year as they were seen as safe-asset classes in light of this year being an election year.

“Post-election, we expect investors to accept more risks as the political landscape brings a new policy and economic cycle. Investors may also increasingly look at various real-estate opportunities across residential and commercial properties both at home and overseas,” he said in a statement.

The Wealth Report by Knight Frank, an annual snapshot of the issues influencing wealthy individuals’ investment and lifestyle decisions, was based on the response of 541 of the world’s leading private bankers and wealth advisers, representing roughly 50,000 clients with a combined wealth of around US$3 trillion (RM11.62 trillion).

According to Wealth X data for The Wealth Report, the number of ultra-wealthy individuals with net assets of US$50 million and above -rose by 10 per cent last year, equivalent to 11,630 individuals, taking the global population to 129,730.

Asia has overtaken Europe in absolute numbers of ultra-wealthy individuals. As at end of last year, Asia boasted 35,880 ultra-wealthy individuals, compared with 35,180 in Europe.

For the Asian market, Malaysia ranks sixth in terms of country level wealth distribution of ultra-wealthy. Malaysia is forecast to contribute 65 per cent of the growth of Asia’s new ultra-wealthy individuals by 2022.