UEM Sunrise's Aussie units get better offer?

                                              

UEM Sunrise Bhd is said to have received offers worth more than A$120 million for 252 units of serviced apartment at its Aurora Melbourne Central mixed development.

 

By Sharen Kaur - Published in NST Property on September 26, 2019

DID Singapore-listed Ascendas Hospitality Trust (A-HTrust) make a mistake backing out from a deal to purchase serviced apartment units in Australia from UEM Sunrise Bhd?
Last week, UEM Sunrise told Bursa Malaysia that its wholly-owned unit, UEMS (La Trobe Street) Pty Ltd, and A-HTrust had aborted a deal for 252 units of serviced apartment within its Aurora Melbourne Central mixed development in Melbourne.
UEM Sunrise said the agreement between UEMS and The Trust Company (Re Services) Ltd (TCL), a trustee for Ascendas, had been terminated on a mutual basis following disagreements over the specifications of certain aspects of the apartments earmarked for sale.
A-HTrust sealed a purchase agreement with UEMS in December 2015 to buy the apartment units for A$120 million (RM370.80 million then). The sale of the units located on Level 10 to 32 of Aurora Melbourne Central also included 10 car parks and part of the ground floor retail area measuring a gross floor area of 14,924 square metres.
The disposal was expected to be completed by Sept 30 this year and UEM Sunrise would have earned A$26.95 million.
If A-HTrust had acquired the apartments, it would have been a brand new asset at an attractive yield. The apartments were estimated to contribute net property income (NPI) of A$9.1 million in its first year of operation, translating to an estimated NPI yield of 7.6 per cent, A-HTrust said in a statement after announcing the deal to acquire the apartments in 2015.
According to sources with knowledge on the matter, A-HTrust could have aborted the deal as it was merging with Ascott Residence Trust (Ascott REIT).
A-HTrust consists of Ascendas Hospitality Real Estate Investment Trust (A-HTrust REIT) and Ascendas Hospitality Business Trust (A-HTrust BT). Singapore’s CapitaLand acquired A-HTrust from Temasek’s subsidiary, Ascendas-Singbridge. The deal was completed in July this year.
CapitaLand will combine Ascott REIT and A-HTrust to form the largest hospitality trust in Asia Pacific and the eighth biggest globally, with a total asset value of S$7.6 billion.
Once the merger deal is completed, it will create a new enlarged entity, Ascott REIT-BT.
A-HTrust, which has 14 hotels in the Asia-Pacific region that include Pullman and Mercure hotels at Albert Park, an inner subarb of Melbourne, will delist following the merger.
Sources said A-HTrust may not have the mandate to buy the apartment units after the takeover by CapitaLand.
“They may not also have the cash flow with the merger taking place. It could be that CapitaLand have also asked A-HTrust to re-analyse the deal.
“But it is good that the deal had been aborted as UEM Sunrise has received higher offers for the 252 apartment units. The offers are higher than the A$120 million deal that UEM Sunrise had secured with A-HTrust,” said a source.
The source said technically, the value of the apartments today is higher than the bulk rate price that was offered to A-HTrust.

Has UEM Sunrise Bhd found a buyer for its Mayfair project in Australia?

 

In terms of per sq ft price, A-HTrust was paying slightly cheaper than market price for the apartments as they were buying in bulk, added the source.
“In hindsight, A-HTrust should have just (put) on-sale the entire serviced apartment at a higher price instead of walking away. So, UEM Sunrise did a fantastic choice to agree and abort the deal as they can get a higher offer during this recovery stage,” said the source.
According to the source, UEM Sunrise has found a buyer and is close to signing the deal for more than A$120 million.
“They are doing their due diligence now, and if everything goes well, they are expected to sign (deal) soon,” said the source.
Serviced apartments make up more than a quarter of the total 941 apartment units in the A$800 million tower located at 224 La Trobe Street.
Aurora Melbourne Central, the tallest building in Melbourne’s Central Business District (CBD), will have direct access to Melbourne Central Railway Station as well as Melbourne Central Shopping Centre across the road. The new CBD North station of Melbourne Metro will be located next to the project site.
The development is also located within close proximity to renowned attractions, such as Queen Victoria Market, State Library of Victoria, Royal Exhibition Building and the Melbourne Museum.

BUYER FOR MAYFAIR?

UEM Sunrise has received several offers from investors for its Zaha Hadid-designed Mayfair apartment project on St Kilda Road.
According to sources, the offers for Mayfair, which is strategically located with superb connectivity and expansive viewlines, exceed A$100 million.
UEM Sunrise is selling the Mayfair apartment project amid a major slump in off-the-plan apartment sales in Melbourne.
The company purchased the 22-level B-grade building in 2015 for A$58 million to develop its third property project in Australia.
Mayfair was launched in 2017 and UEM Sunrise had sold about 40 per cent of the 152-units off-the-plan.
“With UEM Sunrise flushed with cash in Australia, they are poised to expand landbank there or plan for corporate takeovers,” said the source.
UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib has said the company remains committed to its business expansion plans in Australia.
According to Anwar, UEM Sunrise is actively looking for new developments and joint-venture opportunities in the country, with Melbourne and Sydney being the two key target cities.
The group’s maiden venture in Melbourne, Aurora Melbourne Central, was launched in 2014.
Its second project in Melbourne, Conservatory, comprising 446 apartments in a 42-storey tower, was launched in 2015.

UEM Sunrise to buy Eco World?

(File pix) A view of a UEM Sunrise development in Puteri Harbour, Johor. UEM Sunrise’s landbank is mostly located in Johor. Courtesy Photo

By Sharen Kaur - Published in NST Business on September 20, 2019

IS UEM Sunrise Bhd taking over Eco World Development Group Bhd? Rumours are rife that UEM Sunrise and Eco World are merging.

This would make the new entity one of the largest property developers by landbank in Malaysia.

Sources said UEM Sunrise may buy over Eco World in a share swap deal that could see the latter’s substantial shareholder, Tan Sri Liew Kee Sin, ending up with a 15 to 20 per cent stake in the former.

Khazanah Nasional Bhd, which has a 66.06 per cent indirect interest in UEM Sunrise, may thus see its stake diluted.

“This is one of several proposals by bankers. It makes sense because you will consolidate two major players and create a property champion with a large landbank and brand power,” said a source with knowledge of the matter.

As a combined entity, it will have total landbank of 7,284ha with a potential gross development value (GDV) of RM190 billion.

Sime Darby Property Bhd is the largest landowner in Malaysia with more than 8,093ha.

Bursa Malaysia data showed that there had been several transactions by major shareholders of Eco World since early this year.

“The way Eco World shares were transacted looked like a prelude to a takeover. Eco World shares are actively being juggled around, an indication that something is about to happen,” said the source.

The source also said Khazanah has received several proposals to buy its stake in UEM Sunrise but nothing has materialised.

“The fund has been looking for someone with entrepreneurial and professional skills to lead UEM Sunrise and bring it back to its glory days as one of the top luxury brands in Malaysia. UEM

Sunrise is currently cashing out and reducing its headcount.

Liew is one of Malaysia’s prominent property captains. He has led two of the nation’s premier development companies over the last 28 years, and was instrumental in securing the coveted Battersea Power Station regeneration project in the United Kingdom in 2012.

TA Securities senior vice-president of research Kaladher Govindan said subject to pricing the research house is mildly “negative” on any merger talk.

He said during this challenging environment, developers should focus on clearing unsold inventory to free up capital and redeploy it to existing projects.

“We note that Eco World’s plate is full now with no urgency to replenish its landbank in Malaysia,” he told the New Straits Times.

Kaladher believes that UEM Sunrise is too huge for Eco World to swallow.

“We believe it is better for Eco World to replenish its GDV via the traditional land acquisition method instead of merging with UEM Sunrise to avoid overstretching the developer’s balance sheet.”

Eco World has a remaining landbank of 1,961ha with a potential GDV of RM75.3 billion, while UEM Sunrise has 5,295ha with a potential GDV of RM113.92 billion.

Eco World has 20 projects in the Klang Valley, Iskandar Malaysia and Penang, ranging from affordable to luxury schemes.

UEM Sunrise’s landbank is mostly located in Johor. The company focuses on macro township development as well as highrise residential, retail and integrated developments.

Both companies also have presence overseas.

Eco World has developments in the United Kingdom through its associate, Eco World International Bhd, while UEM Sunrise has projects in Australia.

Khazanah sells its stake in Indonesian toll road

Khazanah Nasional Bhd is selling its 55 per cent stake in one of the longest toll roads in Indonesia to Canada Pension Plan Investment Board (CPPIB) and its partner PT Baskhara Utama Sedaya (BUS).

It has 55 per cent stake in PT Lintas Marga Sedaya (LMS), held via PLUS Expressways International Bhd. PLUS Expressways is a subsidiary of the UEM Group and is ultimately wholly-owned by Khazanah.

LMS is the concession holder and operator of the 117km long Cikopo-Palimanan toll road in West Java. The road project was awarded to UEM Group in 2006 but construction started only in 2013 as it involved land acquisition. The project was completed in 2015.

The completion of this exercise will mark PLUS Expressways' exit from the neighbouring country.

In a statement, CPPIB said it would take a 45 per cent stake in LMS, while BUS' stake in LMS will increase to 55 per cent.

Feng Shui way to peace and serenity

A typical Japanese garden. -Pix source: pixabay

By NST Property - September 19, 2019 

QI in Feng Shui means “breath” or “air” and is often translated as “energy flow” or “life force”.

According to Feng Shui experts, in order to maintain physical and emotional health, qi must flow freely. For positive well-being, the flow of qi must be balanced and not blocked.

Using the Feng Shui concept in garden landscape designs can help create a peaceful and serene place as qi will flow freely.

Feng Shui works with nature and enhances all the Earth’s elements — wood, water, metal, fire, and earth. The goal of a Feng Shui garden is to achieve balance of these elements in overall landscape design for a natural tranquil place that is inviting, relaxing and energising to all.

The five elements of Feng Shui are represented in a garden by various plants and objects.

• Wood: planting boxes, bench

• Water: fountain, pond, birdbath

• Metal: wind chimes, arbor, planters

• Fire: garden lights, lanterns

• Earth: soil, rocks, peebles, clay pots

For qi to flow freely, create a fountain, pond or a symbolic river with stones and rocks. -Pix source: pixabay

CREATING A SERENE GARDEN


To create a serene garden, there must be proper use of the earth’s elements, colour arrangement and coordination, as well as the placement of plants. They play an important role in the balance and harmony of the garden you want to create.

Feng Shui gardens should have the three Feng Shui key of mountains, greenery and water features.

Raised flowerbeds and rocks can symbolically represent mountains, while plants, shrubbery, or trees provide the required greenery. Creating pathways and curvy areas with raised flowerbeds and rocks in various levels helps promote the qi energy to flow through your garden.

A fountain or pond is the water feature. You can also create a symbolic river of stones and rocks to represent water.

With qi flowing freely, your garden will be in tune with nature. It will also provide the beneficial effects of positive chi energy.

The goal of a Feng Shui garden is to achieve balance with the Earth's elements. -Pix source: pixabay

CHOOSING AUSPICIOUS COLOURS


Few things affect the overall look and feel of a garden. Just like your home, colours play an equally important role in a Feng Shui garden.

Homeowners need to take into account the textures and the plants when deciding on their colours in the garden.

The colours in the garden should bring you pleasure when you look at them, as they reflect back to you positive healing energy.

Different colours have different energy levels and may affect your feeling and moods differently.

In Feng Shui, the yin colours are healing and relaxing, and they include blue, black, purple and white.

Wind chime is one of the metal elements to enhance the energy levels in your garden.-Pix source: pixabay

Purple is the most popular flower colour used in many gardens, thanks to its calming effect. In Feng Shui, purple denotes nobility, abundance and dignity.

White is also said to have a soothing effect. A white garden spells style, although to some it runs the idea of death. White flowers basically evoke associations with peace and purity.

There may be no real black flower ­ the closest is dark burgundy, deep maroon and glossiest black/purple foliage. These colours work as a harmonious element.

Yang colours, such as orange, red and yellow, represent the elements of wood and fire. These colours provide motivation, enthusiasm and positive energy.

Red is not necessarily aggressive if you mix it with fresh green foliage. It can work as a complementary colour.


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Sunway eyes Kelantan for next township

Sunway Group founder and chairman transformed a tin-mining site into Sunway City Kuala Lumpur in less than 15 years.

By Sharen Kaur - Published in NST Property on September 19, 2019 

Sunway Group is planning its fourth sustainable township in Malaysia, and it will most likely be in Kelantan.

Founder and chairman Tan Sri Jeffrey Cheah said the group has been offered to develop a township in Kota Baru, the state capital and royal seat of Kelantan.

“There is the possibility of building a fourth sustainable township in Malaysia. I think I can make a difference in Kota Baru. If not, I wouldn’t go. It won’t happen overnight. It takes a bit of time.

“We will have the first medical centre there in Kota Baru. With our brand, knowledge and tie-ups with the top university, people will come. I am confident that our people are excited (about the
prospects),” he said in an interview on CNBC’s Managing Asia programme hosted by Christine Tan.

However, Cheah said the plan for the land will take ‘a bit of time’ as the ‘infrastructure there is poor’.

Kota Baru is home to many mosques, museums, old royal palaces (still occupied by the sultan and sultanah) with unique architecture, and former royal buildings in the centre of town.

The city is served by Keretapi Tanah Melayu’s intercity trains at the Wakaf Baru Terminal Station in Tumpat, and Sultan Ismail Petra Airport (also known as Kota Baru Airport), named after Ismail Petra, the 28th Sultan of Kelantan, who ruled from 1979 to 2010.

Sunway founder and chairman Tan Sri Jeffrey Cheah with host Christine Tan at CNBC’s Managing Asia programme recently.

FROM SMALL TOWN BOY TO BILLIONAIRE


Cheah, 74, was born in Pusing, a small town outside of Ipoh in Perak.

He had his primary and secondary education in Batu Gajah before leaving to pursue his tertiary education at the Footscray Institute of Technology (now Victoria University) in Melbourne, Australia.

Cheah, whose father was a lorry driver, started his career as an accountant at a motor assembly plant in Malaysia and was motivated to do his own business.

By chance he came across an opportunity to buy a tin-mining company, owned by a British in the 1970s. The company was mining more than 350ha of land in Bandar Sunway, Selangor.

When Cheah found out that the British company wanted to exit the business, he decided to buy the site. However, no banks would lend him money at first, as they did not believe he could transform the area.

That did not stop Cheah. The sixth in a family of 10 managed to get hold of RM100,000 and paid the British firm for the tin-mining site.

By 1974, Cheah founded the Sunway Group of companies to develop Sunway Integrated Resort City (now Sunway City Kuala Lumpur) on the 350ha land.

Cheah told CNBC there were a lot of challenges in the early days and people who did not take him seriously.

“It was negativity all along, right from the start. I got a lot of criticisms, a lot of negative comments from friends and bankers. I had no brand, no name. I was just... Jeffrey Cheah.

“I had to drive bankers down into the mine hole and give some artist’s impressions of what I wanted to do. They said I was just an accountant and not an engineer. I said that is where leadership comes in. You don’t need to be an engineer or a rocket scientist to go up the moon. You provide the
facility and you lead people, good people with knowledge, with experience, with skill to help you.

Sunway Medical Centre in Bandar Sunway. - File pic

“I wasn’t 100 per cent confident I could pull it off but I knew I had to work my guts out to do it, and it’s worth it! I went through two very bad times... the first in 1986 when there was a very bad recession in Malaysia, and in 1997 which everybody knows was the financial crisis. It was a very, very good lesson for me. I made a lot of mistakes but I didn’t cheat people. It was all business decisions. I learnt my lesson that when there’s sunshine, there’s also storm,” he said.

Cheah said business is about trust and confidence in each other.

“When you shake hands, you honour. There must be integrity and we can’t compromise this. Today, it (the tin-mining site) has become a showpiece,” he said.

The multi-billion ringgit Sunway City Kuala Lumpur fully encapsulates the “livability” concept with the presence of seven key components — retail, hotel, offices, residences, education, healthcare and leisure.

The humble businessman said he owed his success to the value system.

“The value system sometimes is in-born. Skills can be learnt, but values we have will continue to cultivate. I always believe that one must be humble, because if you think you are good, there are lots of people who are better than you. So, why, why, why the need to be cocky? We don’t need to be cocky. Just relate to people as they are, and be kind and humane. I told my children that. I teach them about humility.

“I have seen a lot of young people who are just starting to be successful, and they become carried away. If you are cocky, even if you are walking into a deep hole, they’d say it’s OK.... go, go go. You know what I mean? That is not what we want.

“Be humble, people will help you. That’s the life-lesson learnt. If I didn’t have that kind of behaviour, I would have gone bankrupt because the stakeholders would not help me. When you are down, you need people to bring you up, and they must believe in you and that you are worth helping,” added Cheah


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Sunway Group plans for 4 more sustainable projects

Sunway City Ipoh boasts beautiful limestone hills, forest and hot springs. -Pic source: Sunway Group

By Sharen Kaur - Published in NST Property on September 19, 2019

Tan Sri Jeffrey Cheah, the founder and chairman of Sunway Group, hopes to develop three or four more sustainable townships under his leadership.

The group’s flagship project is Sunway City Kuala Lumpur, which is also the country’s first sustainable township development. Sunway is currently developing Sunway City Ipoh in Perak and Sunway Iskandar in Johor.

While Kota Baru is the next plan for Sunway, Cheah has hinted to CNBC’s Managing Asia programme host Christine Tan at the possibility of tapping Sabah and Sarawak, but he did not elaborate on his plan.

He said he had also been offered to develop sustainable townships outside of Malaysia.

“Like in China, they offered me. They came to us. I didn’t go to them. I was surprised when they (the Zhuhai government) called for lunch. The Zhuhai government ... wanted to build a township. They said that they quietly observed with the Chinese Ambassador what we have done and are doing.
So, when they had lunch with me, they said, ‘What you built, a lot of people can do, but I like your management and style of leadership. You make it work’. That was why they wanted us to go there.”

Cheah said Sunway City Kuala Lumpur had succeeded in managing and operating an entire ecosystem, using the build-own-and-operate model.

Sunway founder and chairman Tan Sri Jeffrey Cheah sharing his plans for Sunway Group with CNBC’s Managing Asia programme host Christine Tan. - Pic source: CNBC

“We use this model quite frequently. It’s not easy to train people to give their best, to manage the centre like Sunway Lagoon. I had no experience. So, the whole thing is to get the right people who have the passion to give back, to give their best to me. When I interviewed people who wanted to work in a theme park, I said, ‘Do you have a passion to make families happy, to see fun and give
smiles? But it’s hard work, because at theme parks, you have to go under the sun. These are the things that you must tell yourself that you have to go through, and you will enjoy it. You need the passion to make people happy. You are selling fun’.”

He said all the components that have been put in place to build, own and operate from scratch, they
are profitable and growing organically.

“When people talk about sustainable development, they always think that it is just climate change. It is more than that. You have to look at the 17 SDGs (Sustainable Development Goals) developed by the United Nations. We are talking about real good values for the future generation, for humanity,
like no poverty, quality education, quality healthcare and well-being. All these are part and parcel of sustainable development.

“This (Sunway City Kuala Lumpur) is a good integrated township. It is a green township now. We start with being a good example and hopefully, other people will follow,” he said.

JOURNEY IN IPOH AND JOHOR


Cheah said when he got a hold of tin-mining land in Ipoh, it was surrounded by jungle. But there were also hills and hot springs.

“The hot springs coming out from the ground was over 300 litres a day, at more than 70 degrees centigrade. I remember when I was a child and a teenager, I used to come here to boil eggs in the little pool, and so did the late Sultan. He came here very often when he was a young man. With all this nature and beauty, I could add on to make it more exciting.”

Cheah said if compared to the Sunway City Kuala Lumpur township, it was much easier to work on the Sunway City Ipoh land because it had all the natural ingredients.

“There was almost everything in Sunway City Ipoh. But in Sunway City Kuala Lumpur, which
Lee Kuan Yew (former Singapore prime minister) once called a wasteland, there was nothing. The area was washed out twice, and mined for sand, stone and tin. But after developing Sunway City Kuala Lumpur, I felt that there were lots of opportunities to do the same, and make it even better. We came to Ipoh... where there was also an ex-mining site. But when I saw the site with the beautiful limestone hills, the forest and the gem of the place, the hot springs, I fell in love with it.

An aerial view of Sunway City Kuala Lumpur today. -Pic source: Sunway Group

“Although it was a sleepy hollow, I knew it would take a bit of time to bring vibrancy and get the foot falls. It was a challenge and I spent a lot of time in Ipoh. We have done it. Of course, it’s not completed. There are a lot more components to come in yet,” he said.

Cheah said as far as Sunway Iskandar is concerned, he was offered 728ha of land to be developed in joint venture with Malaysian sovereign wealth fund Khazanah Nasional Bhd.

“Khazanah, who owned the land, approached me and asked whether I would be interested to do a joint venture with them. Of course I asked that if you want to have a township development, I would
have to drive the project. (They said) ‘Oh, you have the power to do so’. That was how we started Iskandar.”

Cheah hopes Sunway Group’s three existing townships will be his legacy as a sustainable developer.

He also hopes other people will emulate to bring their eco-system into wastelands.

Cheah reiterated his motto — “I aspire to inspire before I expire”.

“Now, before I expire in that form, I hope to be able to do a lot of good for mankind. Climate change is a real thing that is happening. If we don’t address that, all of us will have a problem in the future. Hopefully, when people want to practise (sustainability), they will come and see what Sunway has done and do the same... to help bring better prospects, better future, better health, better well-being, (eradicate) poverty and all these things. That’s my hope, as my legacy.”


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Marriott bullish on Malaysia's prospects

The Westin Langkawi is one of the properties in Malaysia under the Marriott International portfolio.

By Sharen Kaur - Published in NST Property on September 19, 2019

Marriott International Inc, which signed a landmark agreement with YTL Corp Bhd’s YTL Hotels to bring the AC Hotels by Marriott brand to Malaysia last week, is looking for more opportunities to expand and is bullish on prospects here.

Its president and managing director for Asia Pacific, Craig Smith told NST Property that the group has 30 properties in the pipeline that will open over the next three years, either in resort markets or iconic cities.

“They include signed hotel deals that are happening and other hotels we are negotiating with. Some are new hotels while others will involve conversions of existing properties. We have 30 hotels operating in Malaysia today under 14 brands. Everyone is worried we are going through a recession. But we have a pipeline that is robust and we continue to be bullish.

“Malaysia has sufficient supply of electricity and fairly high skilled English-speaking labour. Transportation is adequate and there are well-connected roads. Malaysia is growing in terms of tourism numbers and more Chinese are also visiting the country,” said Smith.

Malaysia had recorded RM41.7 billion (US$13.7 billion) in tourist receipts in the first half of this year, an increase of 6.8 per cent from the corresponding period last year.

The number of foreigners visiting the country rose 4.9 per cent to 13.4 million in the first six months of this year, up from 12.7 million in the corresponding period last year.

Asia Pacific continues to dominate Malaysia’s foreign arrivals at 70 per cent with arrivals from Singapore topping the list with 5.4 million tourists, followed by Indonesia (1.9 million), China (1.6 million), Thailand (990,565), Brunei (627,112), India (354,486), South Korea (323,952), the Philippines (210,974), Vietnam (200,314) and Japan (196,561).

Overall, the short- , medium- and long-haul markets registered positive growth at 4.7, 7.2 and 1.8 per cent respectively, compared with the first half of last year.

Taking into account these numbers, the Tourism, Arts and Culture Ministry is confident of

Malaysia hitting its target of 28.1 million tourist arrivals this year as against 25.8 million last year.

As next year is Visit Malaysia 2020, the target is 30 million arrivals and tourist receipts worth RM100 billion.

EXPANDING THE AC HOTELS BY MARRIOT BRAND IN MALAYSIA


AC Hotels by Marriott is a lifestyle brand complemented by a European soul and Spanish roots. There are more than 125 design-led hotels in 15 countries and territories in Europe as well as in North and Latin America.

Smith said Marriott International aims to build the brand in Asia Pacific, including in Malaysia.

“AC Hotels by Marriott is a sexy brand designed in Europe by Europeans. We have just signed with YTL Hotels which will invest in their existing three hotels to make sure they carry the standards of the AC brand. Our role is to plug in our system and operate,” said Smith.

The three hotels that will undergo strategic conversion and fly the AC Hotels by Marriott brand flag on Dec 1 this year are Vistana Kuala Lumpur Titiwangsa, Vistana Penang Bukit Jambul and Vistana Kuantan City Centre.

They will be known as AC Hotel by Marriott Kuala Lumpur, AC Hotel by Marriott Penang and AC Hotel by Marriott Kuantan on Dec 1 this year.

From left: Marriott International Asia Pacific president and managing director Craig Smith, YTL Hotels executive director Datuk Mark Yeoh and Marriott International chief operating officer Raj Menon at the signing of the franchise agreements.

The conversion to AC Hotels marks the first foray for Marriott International in the Asia-Pacific region.

YTL Hotels executive director Datuk Mark Yeoh said it is looking to aggressively expand the AC Hotels by Marriott brand in Malaysia.

“We have a lot of land under YTL Land which we can use to build new hotels or we could convert our existing hotels. We like the AC Hotels by Marriott brand. The branded hotel is popular among millennials due to its modern and sleek design, notably in Europe and the United States.

Our aim is to establish a hotel under the AC brand in every state, including Sabah and Sarawak, as it caters to different segments of the market,” he said.

Yeoh said the group would leverage its core business of construction to build AC Hotels cost-effectively and efficiently with Marriott International as its partner.

YTL Hotels operates 12 Marriott International hotels in Asia and Europe, such as The Ritz-Carlton, JW Marriott and Autograph Collection, in its portfolio of 36 hospitality assets.

GROWTH IN ASIA PACIFIC

Meanwhile, Smith said Marriott International is close to achieving its target of opening 1,000 hotels in Asia Pacific by the end of next year.

He said the hotel group has opened 800 hotels to date.

“We have 200 more to go and about half will open in China, about one third in India and the rest in countries like South Korea and Japan. China and India are the biggest growth markets for us in Asia Pacific,” said Smith.

He said the operating hotels in Asia Pacific have an average occupancy of 60-70 per cent.

“There is a saying that it is better to be lucky than good. We are in the lucky part of the world. Every economists you talk to say that the biggest market in the world is still Asia Pacific.

“At the group level, we are growing the fastest in Asia Pacific. The MICE (meetings, incentives, conferences and exhibitions) market is still at an infant stage and we predict the business will grow the fastest in Asia Pacific than anywhere else,” said Smith.

Marriott International, based in Maryland in the United States, encompasses a portfolio of more than
7,000 properties in 30 leading hotel brands and in 132 countries and territories.

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Public schemes offer affordable properties

A PR1MA unit in Kulim, Kedah, that is selling from RM145,000. - Pic source: PR1MA

By NST Property - September 19, 2019 

Residential properties in Malaysia has experienced significant price appreciation in the past 20 years with prices in several states like Kuala Lumpur, Johor and Penang expanding at higher rates than other locations.

Despite the current slowdown in the property market and many developers offering up to 30 per cent discounts on real estate purchase, prices are still high for many people, and some buyers are still not able to secure the right margin of financing.

Under any circumstances, the need for housing as a basic necessity persists.

If you a first-time house buyer, a middle-income earner and are interested to buy, you may want to look at public housing schemes.

Property prices at public housing projects are relatively more affordable, about half or one-thirds that of units built by private developers.

There are many government initiatives out there that could help you get the right type of property that meets your requirement.

Data from the PropertyGuru Consumer Sentiment Survey H2 2018 showed that overall, Malaysians were satisfied with government initiatives like 1Malaysia Housing Programme (PR1MA) to bring affordable houses to the people.

However, the take-up for such affordable housing programmes was low.

The survey showed that only 19 per cent of respondents had applied for PR1MA houses.

The government aims to build one million units of affordable houses in 10 years, but would this meet the needs of the people?

Owning a home has become more challenging for many Malaysians.

Statistics from National Property Information Centre (Napic) show there is a supply overhang for houses priced below RM300,000.

Overhang is defined as unsold properties that have been launched for more than nine months. This include properties that have been completed, are under construction and those launched but not constructed.

Based on a survey by the Real Estate and Housing Developers’ Association Malaysia on 1,747 visitors at the Home Ownership Campaign, only 20 per cent of them were interested in properties priced below RM300,000.

Developers have been blamed for building low-cost houses in places that have poor connectivity, which have resulted in lack of interest from the public in the properties.

But are government agencies themselves doing enough to attract buyers to these low-cost houses? Have they also done a study to find out why their housing schemes are not been favoured by
many Malaysians?

Here are the affordable housing schemes available in Malaysia.

PR1MA

The prices of PR1MA properties range from RM100,000 to RM400,000 and they are ideal for young adults who have just graduated or started working.

To be eligible for PR1MA, one has to be a Malaysian citizen of more than 21 years old, with an average monthly household income of between RM2,500 and RM15,000.

He or she should own no more than one property.

The properties are allocated through an open balloting process.

The only setback when you buy a PR1MA house is a 10-year moratorium imposed on the property. During this period, you can’t sell or transfer your property to another party without prior approval from PR1MA.

FEDERAL TERRITORIES AFFORDABLE HOUSING PROJECT (RUMAWIP)

Rumawip offers stratified studio, as well as one-, two- and three-bedroom houses.

These units come in different sizes and prices (below market price) and are targeted at low- to middle-income workers.

The cheapest apartment that you can find under Rumawip is RM63,000, while the most expensive one costs RM300,000 (three-bedroom units).

To be eligible for Rumawip, the buyer must be a Malaysian citizen, at least 18 years of age, and living in Kuala Lumpur. The buyer’s gross monthly household income must not exceed RM10,000 (for single applicants) and RM15,000 (married applicants).

The constraint is Rumawip homeowners are not allowed to rent out their property. It has to be for their own use.

MYHOME (PRIVATE AFFORDABLE OWNERSHIP HOUSING SCHEME)

MyHome is run by the Urban Wellbeing, Housing and Local Government Ministry, as well as the National Housing Department.

The properties under MyHome are priced between RM80,000 and RM300,000 (price is before the RM30,000 subsidy offered to applicants).

Under MyHome scheme, successful applicants don’t have to fork out the 10 per cent downpayment to own the property as the government will take care of that.

To be eligible for MyHome, applicants must be Malaysian citizens of at least 18 years of age with average monthly household income of between RM3,000 and RM6,000.

Only one application is allowed per family, which means more families will have a chance to buy a house under this scheme.

The constraint for this scheme is that resale is forbidden within 10 years.

RUMAH SELANGORKU

If you are renting in Selangor or plan to reside there, Rumah Selangorku should interest you.

Rumah Selangorku is a low-cost housing scheme catered to low- and medium-income families living in Selangor. The objective is to provide affordable homes for the middle-income group in the vicinity of the state.

There are seven types of houses under this scheme, each with different built-ups and priced between RM42,000 and RM250,000 each.

Applicants are selected based on a merit system and will not be able to appeal if their application is rejected. Applicants cancelled a successful application will get blacklisted for two years.

Eligibility conditions include having an average monthly household income of between
RM3,000 and RM10,000 and not owning any property in Selangor.

Resale for Rumah Selangorku houses is forbidden within five years and owners are not allowed to rent out their properties.

MY FIRST HOME SCHEME

My First Home Scheme is targeting at young adults who have just started work and are interested to buy their first house.

The good part about this scheme is that successful applicants are entitled to access loan financing of up to 110 per cent of the property price, and they can make instalments via monthly salary deduction.

To be eligible for this scheme, buyers should be below 40 years old, have an average monthly household income of between RM3,000 and RM6,000, and don’t own more than one property.

Only one application is allowed per family.

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'Prime office rents under pressure'

By Sharen Kaur - Published in NST Property, September 12, 2019

Prime office rents in Kuala Lumpur City (KL City) are poised to remain under pressure with landlords competing to attract new occupiers and retain existing tenants.

According to Knight Frank’s Asia-Pacific (Apac) Prime Office Rental Index for the second quater of 2019 (Q2 2019), there was a marginal decline of 0.2 per cent for office rents in KL City in
the second quarter from the previous quarter.

The drop was attributed to factors such as oversupply and difficulty to secure new tenant.

Office stocks in Greater Kuala Lumpur total 126 million sq ft. It is the second largest in the Asean region after Hong Kong, which has 127 million sq ft. Neighbouring Bangkok has 97 million sq ft of office space, Singapore 80 million sq ft, Manila 73 million sq ft and Jakarta 67 million sq ft.

Between this year and 2022, KL City and its suburbs will have 13 million sq ft of office space due to Tun Razak Exchange and PNB118, among others.

Knight Frank Malaysia executive director of corporate services Teh Young Khean said with the high
impending office supply driven by new constructions, prime grade office rents in KL City continue to be under pressure.

Teh said based on the report, prime net headline rent in the city centre stood at RM5.80 psf per month and is forecast to remain under pressure in the next 12 months.

Knight Frank has maintained its growth expectations with rents likely to end the year flat, as compared to 7.7 per cent rise in 2018.

Overall, office market rents in the 20 Apac cities tracked by the index recovered slightly in Q2 2019, rising 0.9 per cent quarter-on-quarter. On a yearly basis, office rents in Apac cities were up 3.4 per cent year-on-year, despite the generally soft economic climate.

According to the report, the overall positive quarterly growth in Q2 2019 was driven mainly by Tokyo, which recorded the highest quarter-on-quarter rise at 6.9 per cent in 2Q2019 due to limited supply of prime office space.

Singapore, meanwhile, saw its prime office rental grow 0.9 per cent quarter-on-quarter on healthy net absorption, led by growth in the co-working sector. On a year-on-year basis, the rent grew by 10.3 per cent.

Knight Frank head of research for Asia-Pacific Nicholas Holt expects the rest of the year to remain
challenging for Asia-Pacific office markets as there is no end in sight over the trade tensions between the world’s two biggest economies.

There is also the looming prospect of a hard Brexit and the ongoing concerns in Hong Kong, he said.


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IJM Land: Riana Dutamas Phase 2 registration in 3 months

An artist’s impression of Phase 1 of a joint-venture development between IJM Land Bhd and FCW Holdings Bhd.

By Sharen Kaur - Published in NST Property, September 12, 2019 

PHASE 2 of Riana Dutamas mixed integrated development in Segambut, Kuala Lumpur, will open for registration within the next three months.

It will offer 921 serviced apartment units priced from RM400,000.

Riana Dutamas sits on a 6.5ha tract and will have six blocks of serviced residences, office spaces and retail outlets.

The overall gross development value (GDV) of Riana Dutamas, developed by 368 Segambut Sdn Bhd, is about RM1.5 billion.

368 Segambut is a joint venture between IJM Land Bhd and FCW Holdings Bhd, controlled by low-profile businessman Tan Sri Robert Tan Hua Choon.

The first phase of Riana Dutamas, known as Savio, has achieved a take-up of over 90 per cent, according to IJM Land managing director Edward Chong.

The 37-storey tower with a GDV of RM565 million has 1,018 serviced apartment units.

The units, ranging between 653 and 1,177 sq ft with one to three bedrooms, are priced from RM380,000.

Chong said Savio is currently 70 per cent built and targeted for completion in 2021.

IJM Land and FCW hosted a topping-up ceremony last week at the rooftop of the development to mark the completion of the structural frame of Savio Multi Generational Suites.

He said the company is thrilled to hit this milestone with the development of Savio which started in January 2018.

“In keeping our commitment to quality and time frame, we have successfully and safely completed the Savio’s structural works up to the final floor within 19 months. The great progress is attributed to the close collaboration between the IJM Land and FCW teams as well as our great partner in Setiakon Builders, who have worked tirelessly to get us to this point,” said Chong, after the topping-up ceremony.

He said the take-up for Savio has been positive — thanks to its affordable price, location, great connectivity and value propositions.

“We are encouraged by the strong take-up for Savio and this serves as a testament to the value and potential of the project. Looking at the take-up rate to date, we expect Riana Dutamas would be able to raise the bar for residential properties in Segambut.”

Chong expects the remaining units to be sold within the next few months.

Accessibility to Savio is facilitated by numerous major routes and established highways nearby, including the Sprint Expressway, PLUS Expressway, New Klang Valley Expressway, Duta-Ulu Klang Expressway, Jalan Segambut and Jalan Kuching.

Savio is designed to suit house buyers of every generation, from entry-level to mature buyers, individuals to multi generations, as well as novice to seasoned investors.

368 Segambut director Datuk Anderson Thor Poh Seng said the company had carefully considered the design for Savio by including feng shui elements and optimising space.

“Riana Dutamas is an icon of our collaboration, allowing the group with our partner IJM Land to drive the development of Segambut and add value to the Segambut landscape by providing affordable, practical and comfortable homes with their own facilities. We are sure it will add to the area’s vibrancy and diversity, creating a more holistic lifestyle for residences of multi-generations,” he said.


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Making the right property purchase

Experts say it will take at least five years to enjoy significant capital gains from a property investment. PROPERTYGURU.COM PIC

By NST Property - September 12, 2019 

HOUSES are big-ticket items and buyers want a good deal when purchasing one.

Location, pricing and condition are three key factors in determining if a home is a good purchase.

If you are buying a unit in the secondary market and the price is too good to be true, especially if it is located in a prime area, something may not be right — unless the owner is selling it because he/she is
migrating, or he/she desperatelyneeds funds for children’s education.

Anyone who has bought a house at below market price should know that there could be hidden problems and challenges that could crop up and aren’t easily identifiable, even with the best of home inspections.

You need a keen eye to know if the property is worth the buy. Even if you are buying first hand from developers, your purchase may not always be the right choice.

“Developers are good marketeers. Their job is to build and sell. If a property is not really worth it as the location is too far from Kuala Lumpur city centre, they would entice you with discounts and freebies and you may still end up buying. Do your research. Don’t let developers or the agents whom they hire to speak at a sales launch decide for you,” said a few market experts.

There are few ways to evaluate investment returns when purchasing an income property.

Here are a few at-a-glance tips from market experts.

1. FOLLOW THE 1% RULE

As a general rule of thumb, consider the one per cent (1%) rule as an investment strategy. The 1% rule states that the property should be able to be rented out for at least 1% of its purchase price to yield positive cash flow. The due diligence would be analysing the fair market rental rates in the area.

If you can buy an investment property for RM1 million and rent it out for more than RM9,000 per month, then it is a good deal. Looking at the price as a factor of 100 times, the monthly rent is a quick and easy baseline to getting a great price on a property investment.

2. CHECK THE CAP RATE

Checking the cap rate (the price/earnings ratio) versus the neighbourhood is a good thing, in addition to price per square foot. Price drop is a signal of good buying opportunity. Price drop occurs when the market is not so good, but sometimes it could be because there are unhealthy issues in the neighbourhood. It is strongly advisable to do your own checks.

Follow the one per cent rule when buying a property. PROPERTYGURU.COM PIC

3. CONDITION AND PRESENTATION

If you are buying in the secondary market, the condition of the property, coupled with how it has been presented, will usually dictate if the unit can be purchased at a discount or is well worth the price you have marketed it for. If you are selling and the property is not marketed properly (for instance, with no online photos to show), it is likely to have zero-curb appeal.

An article entitled “How Do You Tell If A Property Is A Good Deal Or Not?” by PropertyGuru Malaysia states a few tips you can use to determine if a property is worth the buy.

They include comparing the property against recently sold and unsold properties, following the 1% rule as well as noting the future prospects of a neighbourhood.

When it comes to buying property in Malaysia and snagging a great deal, it isn’t just about getting the lowest price possible. There are also other considerations, such as appreciation potential, said PropertyGuru.

“Experts claim that it will take at least five years to enjoy significant capital gains from a property
investment. Perhaps, even a shorter amount of time for established regions.”

Tips from PropertyGuru:

1. COMPARE AGAINST RECENTLY SOLD PROPERTIES

Comparing a potential purchase to recently sold properties is one way to gauge whether the selling price is reasonable. The properties should be comparable in terms of their size, condition, and location.

Your real estate agent should have a list of recently transacted properties at his/her disposal, or visit some online property portals which could provide the information.

If the property you are looking at is below market price, you may want to do a bit of research and find out why. Is the house in basic condition, old, empty for too long, termite-infested, and has plenty of defects?

2. COMPARE AGAINST REMAINING UNSOLD PROPERTIES

If you believe a property you are interested in is overpriced, looked at other houses within the area.

PropertyGuru suggests you take a look at other comparable properties that are still on the market.

“A high number of vacant properties in the vicinity might be an indication that the neighbourhood is unsavoury or has low demand. Armed with this knowledge, you’ll have a clearer picture of whether the property investment will be worthy or not,” it said.

3. FUTURE PROSPECTS

Nobody wants a property that loses its value over a short time span. Get details from property agents and valuers, and do a bit of your own research. Properties in some areas do depreciate in price for various reasons.

Some areas that are undergoing urbanisation and redevelopment, the properties there could see a rise in value over subsequent years

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5 most-searched residential areas in Penang

An aerial view of Penang at night.

By Sharen Kaur - Published in NST Property, September 12, 2019 

THERE are several locations in Penang that are appealing to house buyers, and the top five most-searched residential areas are Butterworth, Tanjong Tokong, Jelutong, Bayan Lepas and George Town.

iProperty.com.my recently shared Penang’s most popular projects and most popular property types among buyers.

It has also rounded up the property search trend in Penang for anyone looking for the next residential project deals.

The search data is captured by iProperty.com.my’s big data solution, iPropertyiQ.com, and these areas are presented in the form of percentage and in ascending order.

BUTTERWORTH

 (Search percentage: 5.3%)


Butterworth is the main and the largest town in Seberang Prai in mainland Penang. It is also the largest town by population within the Seberang Prai municipality.

Seberang Prai is linked to Penang Island via the Penang bridge or ferry rides from the Butterworth Ferry Terminal.

There are many attractions in Butterworth and investors are looking to maximise their property potential on Airbnb.

The top residential projects in Butterworth are Taman Bagan, Taman Merbau Indah and Widuri Apartment.

The median price of a property in Butterworth is RM330,000.

Taman Bagan is a huge township area with light industrial, commercial shoplots/retail and residential. It is located not too far away from Sunway Carnival Mall and Bagan Specialist Centre and a few kilometres from the Ferry Terminal.

Taman Merbau Indah is home to two-storey terrace and semi-detached homes, and three-storey bungalows.

The township is located just 2km from the North-South Expressway and about 15km to the Penang Bridge. The downside is there are not many amenities in Taman Merbau Indah and the nearest hospital is located about 10km away.


TANJONG TOKONG

 (Search percentage: 5.4%)


Tanjong Tokong is about 3km from the George Town city centre and it is also swarmed with Airbnb room offerings. Just like George Town, the 5.4 per cent search result could be due to investors looking to leverage Airbnb services.

Property prices in Tanjong Tokong range from RM130,000 to RM15 million and built-up sizes range from 500 to 19,660 sq ft.

Top residential projects are Puncak Erskine, Quayside, Tanjong Pinang.

Puncak Erskine is a high density freehold apartment with 1,075 units spread over two 19-storey blocks. The units come in standard average size of 700 sq ft. The set back about this property is that it lacks facilities and some units face the Mount Erskine Chinese Cemetery.

Quayside, on the other hand, is a seaside haven for Penangites. Within the grounds of this affordable luxury condominiums is a 1.82ha resident-exclusive waterpark and clubhouse, embraced by 2.8ha of tropical greens.

Tanjong Pinang is adjacent to the seaside neighbourhood of Tanjung Tokong. The area is popular with exclusive high-end properties, which boast panoramic views of the coastline and sea.

According to listings on iProperty.com, a three-storey terrace/link house is in the market for
between RM1.8 million and RM4 million.


JELUTONG

(Search percentage: 5.4%)


Jelutong shares the same search percentage as Tanjong Tokong. Property prices start from RM160,000 to over RM10 million for the more luxury houses. The built-ups range from 400 sq ft (affordable apartment) to 7,900 sq ft (larger houses).

Jelutong is one of the areas in Penang that have been targeted for the development of the People’s Housing Project (PPR). Last year, the state Housing, Local Government and Urban and Rural Development Committee announced that 1,000 PPR houses would be built in Jelutong to help low-income families own homes. Since Jelutong is located in the suburb of George Town, this could drive up interest among property hunters seeking potential homes in the area.

Top residential projects in Jelutong are Desa Pinang 2, Rumah Pangsa MPPP and Island Glades.

According to brickz.my, 18 transactions were recorded from July 2018 to May 2019 in Island Glades. They included deals for terraced houses (intermediate and end-lot) which exchanged hands for between RM800,000 and RM1.9 million, and semi-detached units, which sold for RM1.6 million.

There were 32 transactions in Desa Pinang 2 from April 2018 to March 2019, mostly for flats in Lebuh Sungai Pinang which sold from RM60,000 to RM240,000.

BAYAN LEPAS

(Search percentage: 7.5%)


Bayan Lepas is home to the Bayan Lepas Free Trade Zone (FTZ), Penang International Airport and Queensbay Mall. The FTZ has helped create job opportunities and attracted numerous projects over the years, increasing demand for housing.

Many hotels and mixed development projects, such as condominiums and serviced apartments, have come up in Bayan Lepas. Properties are priced from RM105,000 to RM8.8 million with
built-ups from 400 to 22,330 sq ft.

Top residential projects in Bayan Lepas are Idaman Lavender 4, The Clovers and Mutiara Perdana.

Brickz.com show 31 transactions in Idaman Lavender 4 from February 2018 to January 2019. They were mostly freehold apartments with three bedrooms (750 sq ft) that sold from RM300,000 to RM370,000.

The Clovers, also known as Arasia Perdana, is a freehold residential. Brickz.com reveals that
between March 2018 and December 2018, there were 21 transactions for units with built-up of 1,598 sq ft. A brickz.com chart shows that prices are heading downwards. A transaction on Dec 10 2018 shows that a 1,598-sq-ft condominium sold for RM590,000. Two months prior to that the same size unit sold for RM830,000.

GEORGE TOWN

(Search percentage: 8.1%)


George Town is the most-searched area by buyers. Based on iProperty.com.my, prices in this area range from RM135,000 to RM46 million with built-ups from 400 to 10,000 sq ft.

One of the main contributing factors that make it popular could be because investors are looking to leverage Airbnb services around the George Town area.

The area may also attract investors from China, Hong Kong, and Singapore, who are looking for long-term investments and second homes despite the hefty price tags of the properties. They are most likely attracted to them as they have sea views.

Top residential projects in George Town are Sri Saujana — Macallum, Sandilands and Gat Lebuh Macallum.


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