More construction at the RM5 billion Merdeka 118 complex next year?

 By NST Property/Kathy B. - August 30, 2023 

The RM5 billion Merdeka 118 complex in Kuala Lumpur.

Site progress as of April this year. Image credit: wwww.merdeka118.com

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Kuala Lumpur: More construction activities will take place at the RM5 billion Merdeka 118 complex on Jalan Hang Jebat in Kuala Lumpur next year.

  PNB Merdeka Ventures Sdn Bhd will begin construction on three new residential towers, the tallest of which will reach 65 storeys, according to the company's chief executive officer, Tengku Datuk Ab Aziz Tengku Mahmud.

  What is worrying is whether this would result in even more traffic congestion in the densely populated area, said an industry insider.

  The Merdeka 118 complex is located between Jalan Maharajalela and Jalan Hang Jebat, with convenient access to Jalan Syed Putra, Jalan Hang Tuah, Jalan Pudu, Jalan Tun Tan Cheng Lock, Jalan Loke Yew, and Jalan Tun Razak.

  According to the insider, such a massive structure necessitates careful planning.

  "I am confident that the project would have considered all aspects of the development before beginning construction on the three residential towers next year in order to avoid causing unnecessary stress to road users.

"I also believe that this iconic project will have a significant impact on the properties surrounding it, particularly residential real estate. The proximity to such a prominent name will be used as a sales gimmick," he told NST Property.

PNB Merdeka Ventures, a subsidiary of Permodalan Nasional Bhd (PNB), will build the 65-storey Merdeka Residences East Tower and the 63-storey Merdeka Residences West Tower, according to Aziz.

  The company will also build the Oakwood Premier Kuala Lumpur serviced residences in 2024, he said.

  Oakwood Premier is a premium residential services market leader noted for its comfort and ease.

  PNB Merdeka Ventures signed a management agreement with Oakwood Premier in November 2021.

  Oakwood Premier Kuala Lumpur will be the brand's second property in the city, following Oakwood Hotel & Residence Kuala Lumpur on Jalan Ampang.

  The structure will be built next to the Merdeka 118 tower. There will be 348 residences with one, two, and three bedrooms.

  According to Aziz, the three residential towers will be completed in 2027.

  He was speaking to reporters during a media tour of the Merdeka 118 tower earlier this week.

  At 678.9 metres, the Merdeka 118 tower is the world's second-highest structure.

  According to Aziz, the skyscraper is over 70 per cent occupied.

 The Merdeka 118 tower has a net lettable area of about 1.7 million square feet and over 8,000 parking spaces. 

  It is currently 97.2 per complete.

  The tower features premium Grade A office spaces from Levels 8 to 96, as well as Park Hyatt Kuala Lumpur from Levels 97 to 112. 

  PNB, which will occupy 17 floors of the tower, will move in by the end of this year. It is relocating to the skyscraper from its current location in Menara PNB, Jalan Tun Razak, which has been its home since 1985.

  Malayan Banking Bhd (Maybank) and other tenants will relocate within the next 12 months, according to Aziz. 

  The anchor tenant, Maybank, would occupy 33 storeys, he said.

  Levels 115 and 166 will house the observation deck (The View at 118), Level 117 will house the conference centre, and Level 118 will house the multipurpose event area.

  The Merdeka 118 skyscraper, which was designed by the Australian firm Fender Katsalidis, was formally recognised as the second-tallest structure in the world and the tallest in Southeast Asia at the Council on Tall Buildings and Urban Habitat (CTBUH) Conference 2022 in Chicago, the United States.

  The Burj Khalifa in Dubai, which is 828 metres tall, holds the title of the world's tallest structure.

  The construction of Merdeka 118 began in 2016 on a site overlooking Stadium Merdeka, a historically significant facility built for Malaysia's declaration of independence in 1957.

  Other components of the Merdeka 118 development include Stadium Merdeka, Stadium Negara, 118 Mall, Little M (a PNB childcare centre), Masjid Merdeka, Merdeka Boulevard at 118 (a four-acre public linear park), and the Merdeka Textile Museum. 

The worst may be over for Forest City, thanks to 'special zone' status

 By NST Propety/ Kathy B. - August 29, 2023 

KUALA LUMPUR: The financial problem at China's largest property developer, Country Garden Holdings, has generated concerns about the company's international projects, but the impact of the debt crisis should be limited to the "fear factor" and negative perceptions, according to industry insiders.

  Country Garden said in a statement this week that its five Malaysian property projects are operating normally and with outstanding sales performance, despite fears that the company is in debt.

  According to the company, it has significant net assets and land reserves. 

  Simultaneously, it said that various debt management methods are being evaluated in order to actively resolve the issue of periodic liquidity and ensure the company's long-term future development.

  Country Garden faced total liabilities of US$194 billion at the end of 2022, with worries about the outlook of Forest City and its other Malaysian projects.

  Earlier in August, Country Garden missed two coupon payments totaling US$22.5 million.

  "To date, the overall operation of the region is safe and stable. Our company's projects in Malaysia are operating normally, and the sales performance is strong," the developer's Malaysia and Singapore unit said in a statement.  

  Country Garden's projects in Johor include the massive US$100 billion Forest City, Country Garden Danga Bay, and Central Park. 

  In the Klang Valley, the company also has projects in Lake City @ KL North, and Diamond City.

  Tan Wee Tiam, head of research at KGV International Property Consultants, said that the initial batches of these projects are mostly completed.

  Forest City is Country Garden's most ambitious overseas project, with a goal of housing 700,000 people on four reclaimed islands by 2035.  

  Malls, office towers, and industrial parks would complement the opulent condominiums and landed residences.

  Country Garden Pacificview, Forest City's master developer, is 60 per cent owned by Country Garden. Esplanade Danga 88, a private Malaysian corporation owned by a Johor government agency and the state's Sultan Ibrahim Iskandar, owns the remaining 40 per cent.

  The four islands facing Singapore's Tuas district would have totaled 2,000ha under the original Forest City masterplan.

  So far, 1,400ha have been recovered, with half of this developed on one artificial island, accounting for around 15 per cent of the total.

  According to reports, 30 condominium blocks have been completed, along with some landed homes.

  Many of the residential blocks appeared to have few residents nearly seven years after the project's inception. 

  "This could be due to the fact that the majority, or close to 70 per cent, of the 26,000 units handed over to buyers were from China. Many of them were unable to come to Malaysia and inhabit their property due to the pandemic.

  "We believe the worst is behind us. With the special financial zoning and incentives offered to encourage foreign investors and property buyers, we see light at the end of the tunnel for Forest City," said a Johor-based specialised property consultant.

  He said that property brokers are working hard right now to help the owners rent out some of the units in Forest City.

  According to him, Forest City is currently occupied by a mix of locals working in Johor Bahru and Singapore, as well as foreigners from China, Singapore, Japan, South Korea, Europe, and the United States. 

  He said the Shattuck-St Mary's Forest City International School, which is located within Forest City but runs independently of the project, reportedly has about 200 students enrolled.  

  "We believe that by the end of next year, it could exceed 350 students," he said.

  Last week, Prime Minister Datuk Seri Anwar Ibrahim announced that the government has designated Forest City as a "special financial zone" to help the economy of southern Johor.

  Multiple entry visas, fast-track entrance for individuals working in Singapore, and a 15 per cent flat income tax rate for knowledge workers are among the incentives offered for the Forest City special zone.

Johor should create two special financial zones, one in Medini City, to boost growth

 By NST Property/ Sharen Kaur - August 28, 2023

sharen@nst.com.my

KUALA LUMPUR: Johor, Malaysia's third-largest state and Singapore's closest neighbour, should create two special financial zones to encourage investment and economic growth, said Samuel Tan, executive director of KGV International Property Consultants Sdn Bhd.

  Tan said a second special financial zone in Medini City can be established to provide a variety of services in addition to those offered in the Forest City special financial zone.

  He said that establishing a second special economic zone in Medini City is a noble idea.

  "Medini City has suffered from a lack of employment opportunities. A special economic zone in Medini City with many incentives will draw more people to the area. The vacant apartments will soon be quickly filled.

  "New investments will find their way to Medini City. This would revitalise the city and rebalance growth in the Johor Bharu city centre, Medini City, and Forest City," he told NST Property.

  Tan was responding to Prime Minister Datuk Seri Anwar Ibrahim's recent announcement that the federal government will establish a special financial zone in Iskandar Puteri's Forest City real development area.  

  Anwar offered certain incentives, such as permitting multiple entry visas, expedited entrance for individuals working in Singapore, and a 15 per cent flat income tax rate for knowledge workers.

  He said that government incentives for companies operating in the special financial zone will cut the cost of doing business there and encourage growth in healthcare, education, and tourism.

  Tan saw this statement as a "booster," as many people will see the Forest City project favourably.

The authorities should stop authorising any proposal for a housing project if the developer or management has a poor track record, a real estate specialist suggests, said Sr. Samuel Tan, executive director of KGV International Property Consultants (M) Sdn Bhd.

  Forest City is a US$100 billion property development in the Johor Straits that consists of four artificial islands on reclaimed land totaling 30 square kilometres.

  By 2035, it hopes to house 700,000 people. It will comprise office skyscrapers, residential structures, shopping malls, hotels, and schools.

  The project is a collaboration between the China-based Country Garden Group and Esplanade Danga 88 Sdn Bhd, a private firm supported by the Johor government and the Sultan of Johor.

  Country Garden in China has been engaged in financial troubles in recent weeks, which does not bode well for their projects in Malaysia, particularly Forest City.

  Tan believed that the status and incentives would attract a large number of investments to Forest City.

  He said that the Forest City special financial zone can provide services such as family offices, back offices, and others.

  Meanwhile, Tan told NST Property that having two special financial zones will bring economic growth and job opportunities to the Johor Bahru district's west and centre.

  "The infrastructure is already in place, and it is simple to implement. The Iskandar bus rapid transit (BRT) system is already being designed to connect the Johor Bahru-Singapore rapid transit system (RTS) to various parts of the city.

 "The next issue is connecting Forest City to Singapore. Will there be direct connectivity from the islands via smart access cards? If this can be accomplished, it will become a reality sooner than predicted.   

  "This will breathe new life into the project, providing relief to existing buyers and confidence to prospective buyers.

  "The question is whether we should stop in Forest City. I believe there is a possibility of having a twin special financial zone or more in Johor Bahru," he said.

Mines Wonderland night market to host 'Malaysia Madani concert' on Aug 30

 

SERI KEMBANGAN: Mines Resort City, commonly known as The Mines, is expanding its leisure and tourism activities in order to attract city people.

  The Mines is undergoing a major transformation owing to population growth, environmental changes, rapid urbanisation, and changing demographics, according to Tan Sri Lee Kim Yew, the founder and adviser of Country Heights Holdings Bhd.

This year, a slew of activities, including the 'Malaysia Madani event,' have been planned to lure more visitors to The Mines, which is around a 25-minute drive from Kuala Lumpur's city centre.

 The event will take place tonight next to The Mines Shopping Mall in conjunction with Malaysia's 66th Merdeka Day celebrations.

Lee hoped that every Malaysian will celebrate Merdeka Day in a major way this year to encourage togetherness.

"We hope that in the month of Merdeka, the poor will be helped and the rich will give assistance. Let us all remember our founding father, Tunku Abdul Rahman Putra Al-Haj, who always advocated for a united Malaysia where Malaysians of all races and religions can live in harmony," Lee said.

Image courtesy of Country Heights Holdings Bhd

  Among the attractions of the Malaysia Madani event, which begins at 8.30 p.m., are a martial arts performance and a competition for the best-dressed traditional Merdeka Day outfit.

  According to the manager of the Mines Wonderland night market, Naveen Sachdev, more than 200 kiosks will sell food, drinks, clothes, household products, toys, and souvenirs, among other items. 

  Buskers will amuse guests all night, with fireworks at the stroke of midnight.

  "This will be a special day for everyone in the spirit of celebrating the national day. We are lining up more activities for the rest of the year," Naveen said.

  From the world's largest open-cast tin mine, Hong Fatt Mines, The Mines (1,300 acres) is now home to the Palace of the Golden Horses, The Mines Resort & Golf Club, The Mines Beach Resort & Spa, The Mines Shopping Fair, Malaysia International Exhibition & Convention Centre, The Mines Shopping Centre, The Mines Waterfront Business Park, and Uptown Mines Wonderland.

Loke: High development potential for railway land in six states

 By NST Property/Sharen Kaur - August 25, 2023 

Transport Minister Anthony Loke

sharen@nst.com.my

KUALA LUMPUR: The government, through Railway Assets Corporation (RAC) has provided 10 railway land locations in six states with significant potential for development for various projects, according to Transport Minister Anthony Loke.

  Loke said that the parcels of land totaling 369.45 acres (149.51 hectares) are spread over Penang, Johor, Selangor, Kuala Lumpur, Perlis, and Kelantan.

  Five of these land parcels have train access and might be developed using the Transit-Oriented Development (TOD) concept, he said.

  "These RAC land needs to be developed with value added so that the corporation can enjoy maximum returns, which can then be used for the development of the national railway sector.

  "'I welcome the big developers to pay attention to this opportunity because it is our new approach to making the transport sector a catalyst for the country's economic development," Loke said at the opening ceremony of the RAC Property Showcase 2023 yesterday.

  Meanwhile, the Segambut 2 Railway Station, near United Point Residence, would be a driver for growth in the area, transforming Segambut into a high-density district, according to a joint statement made by RAC and IDP Industrial Growth Sdn Bhd.

  The RAC and IDP also believe that the station's development, which is scheduled to be completed in November 2025, will reduce traffic congestion and boost property ownership among individuals who want to live or work near the city centre.

  The new railway station project is being developed by IDP, while the land for the project is provided by RAC, a government corporation.

  The two have signed a development agreement for the construction of the station.

  RAC was represented by its chief executive officer, Azhar Ahmad, while IDP Industrial was represented by its director, Kong Pak Lim.

  The signing ceremony was witnessed by Loke, Youth and Sports Minister and Segambut MP Hannah Yeoh, and Deputy Transport Minister Datuk Hasbi Habibollah.

  According to RAC and IDP, a total of 330,600 people live within a four-kilometre (km) radius of United Point Residence.

  They said the railway station's construction will provide travellers with a welcoming and comfortable environment.

  This is due to the fact that 400 passengers are planned to be able to utilise the railway station at the same time, as opposed to the existing Segambut Railway Station, which is a stop with relatively limited facilities.

  Meanwhile, Loke said that with the signing of the agreement, the government will receive a "return in kind" in the form of a new railway station building worth RM34.1 million, as well as RM3.5 million as a "one-off" to cover maintenance and other related expenditures.

  "After more than five years of work, the construction of this train station has been finalised. We hope that it will be able to increase the number of passengers in addition to reducing traffic congestion in Segambut," he said.

Malaysia Healthcare Travel Council, Domitys, Komune Living & Wellness, ReU Living, Sunway Sanctuary to develop Malaysia's retirement living segment

 By NSTProperty/Sharen Kaur - August 24, 2023 

The Malaysia Healthcare Travel Council is working with Domitys Bangsar, Komune Living & Wellness, ReU Living, and Sunway Sanctuary to promote Malaysia as a destination for active retirement living. 

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KUALA LUMPUR: The Malaysia Healthcare Travel Council (MHTC) is collaborating with four integrated wellness residences in Kuala Lumpur to promote Malaysia as a destination for active retirement living. 

  Retirement living is a niche segment of the healthcare industry. The four wellness residences in Malaysia involved in this area are Domitys Bangsar, Komune Living & Wellness, ReU Living, and Sunway Sanctuary. 

  MHTC is exploring tailored active senior care and wellness solutions to establish Malaysia as a premier destination for active retirement living. 

  It has established a pilot programme called "Rejuvenate with Malaysia Healthcare" to address the difficulties posed by the "silver tsunami" and an ageing society in a proactive manner.   

  According to Farizal Jaafar, acting chief executive officer of MHTC, the initiative is a new segment that the council is establishing for the healthcare travel business, boosting the industry's contribution as a vital export service to the country.

  "Rejuvenate with Malaysia Healthcare is a testament to our commitment to providing world-class healthcare services and promoting Malaysia as a preferred choice for active retirement living and holistic wellness. 

  "The end goal is to build a sustainable future for the healthcare system. By partnering with such exceptional integrated wellness residences, we are confident that we will help enable and create awareness of the programme, designed to allow seniors to age actively surrounded by various experiential facilities and personal care," he said.

  The one-year programme will see MHTC collaborate with four wellness residences that have been carefully selected for their excellence in providing personalised value-based care, cutting-edge technology for preventive and curative treatments, and a wide range of activities to promote overall well-being.

  Domitys is a brand collaboration between The Ascott Limited and Singapore's CapitaLand Investment Group.

  Komune Living & Wellness is Southeast Asia's largest co-living and wellness hotel. It contains a separate wellness centre that provides senior care and traditional Chinese medicine. 

  ReU Living is a joint venture between Tan & Tan Developments Berhad and Meaningful Life Sdn Bhd. 

  Tan & Tan Developments Berhad and Meaningfull Life Sdn Bhd collaborated to create ReU Living. It provides rehabilitation, rejuvenation, renewal, restoration, leisure, and retirement services. 

  Sunway Sanctuary provides senior living as well as easy access to healthcare through Sunway Medical Centre. 

  Farizal said that with advances in technology and science, today's seniors are enjoying longer and more active lives than ever before. 

  He said based on studies from the World Health Organization (WHO), the global population of people aged 60 and older is expected to total up to two billion by 2050.

  According to a recent report published by WHO, one in six people in the world will be aged 60 years or older by 2030.

  At this time, the share of the population aged 60 years and over will increase from one billion in 2020 to 1.4 billion. 

  The number of people aged 80 years or older is expected to triple between 2020 and 2050 to reach 426 million, according to WHO. 

  "Malaysia's healthcare industry is adapting and aims to deliver more value-added and unique offerings to fill the gaps in healthcare services," Farizal said.

  He said that to create a holistic lifestyle, many senior communities are embracing differentiated and customised health and wellness programmes. 

  According to him, research has shown that community bonding and social engagement are two of the key factors in sustaining health and longevity, and this philosophy is one of the key drivers for the development of the four integrated wellness residence facilities. 

PropertyGuru expects up to S$170mil revenue in 2023

 By Sharen Kaur - August 25, 2023 

 PropertyGuru reported revenue of S$37 million in the second quarter of 2023 (Q2 2023), a 12 per cent increase year-on-year. 

KUALA LUMPUR: PropertyGuru Group Ltd expects its revenue to range between S$160 million and S$170 million in the  fiscal year 2023.

Its adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) will be in the S$11 million to S$15 million range.

 "Although due to the ongoing situation in Vietnam, we now believe revenues will be at the bottom end of the range. 

"We still anticipate that conditions in Vietnam will begin to improve in the latter stages of the year," said its chief executive officer and managing director Hari V. Krishnan.

He said the government of Vietnam's intervention in the property market, residual political uncertainty in Malaysia, tightened residential policies in Singapore, a lack of clarity in global fiscal policy as a result of rising interest rates, greater inflationary pressures, and global supply chain issues are all short-term factors that may continue to impact its operations and warrant a cautious outlook in 2023. 

Longer term, the company remains confident in its growth trajectory, prospects for improving profitability and the underlying opportunity that exists in our key markets, he said in a statement.

PropertyGuru reported revenue of S$37 million in the second quarter of 2023 (Q2 2023), a 12 per cent increase year-on-year. 

However, it had a financial loss of S$6 million in Q2 2023, compared to a net profit of S$4 million in Q2 2022.

Adjusted Ebitda was positive in the quarter under review, at S$5 million, compared to S$0.3 million in Q2 2022, as the company benefited from both solid operating leverage and expense control. 

Krishnan said the company produced a good quarter of double-digit revenue growth and a double-digit adjusted Ebitda margin, despite the Southeast Asian economy grappling with inflation and rising interest rates.

"This was the result of focused investments and execution despite ongoing macro challenges in Vietnam, where last year's government interventions in the property market continue to impact consumer sentiment and transaction volumes.

"Our focus on leveraging generative AI (artificial intelligence) has bolstered our market-leading products while driving improvements in code quality and engineering productivity," he said.

PropertyGuru chief financial officer Joe Dische said in the second quarter, the company's overall business performed well even as it managed through a slower than expected recovery in Vietnam. 

Excluding Vietnam, revenues grew by a solid 22 per cent, he said.

"We have seen some recent positive signs from Vietnam, as the government has begun lowering interest rates and is working to improve the accessibility of credit for both consumers and developers," he said.

Dische said despite the current macro-economic conditions in Southeast Asia, the firm remains focused on delivering sustained, profitable growth as it leverages its market-leading solutions

HBA : "Vacancy tax will hurt house owners, developers"

 By NST Property/ Sharen Kaur - August 12, 2023 

Pixabay/Photo

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KUALA LUMPUR: Vacancy tax, or a levy on unsold and vacant properties, will harm home owners and property developers rather than alleviate the housing surplus issue, said Datuk Chang Kim Loong, secretary-general of the National House Buyers Association (HBA).

  He said the HBA believed that imposing a vacancy tax on vacant and unsold properties, aimed at developers, was not a good move.

  He said the vacant properties in Malaysia varied greatly from those in Canada, Australia, Singapore, or Hong Kong.

 Chang was responding to the Khazanah Research Institute's (KRI) suggestion to levy a vacancy tax on vacant and unsold residential and commercial properties after a certain period of time.

  According to KRI, the tax payable is computed as a percentage of the gross selling price.

  Its research director, Suraya Ismail, reportedly said such a tax would discourage speculative activity by persons who hold units with the primary goal of "making quick profits."

  According to the National Property Information Centre (NAPIC), the value of overhang properties in the residential sector as of 2022 is over RM18.41 billion, with 27,746 overhang units.

Datuk Chang Kim Loong, secretary-general of the National House Buyers Association

  Chang said imposing a vacancy tax on developers for unsold completed properties would not help alleviate the challenges associated with them.

  The overhang issue, said Chang, was a problem caused mostly by unmet housing demand in association with fluctuating economic performance, housing preferences, market sentiment, housing affordability, loan accessibility, demographics, and lifestyle changes.

  "It can only be addressed by a collaborative measure that involves all industry stakeholders. If the government aims to resolve the overhang problem holistically, a detailed study of the overhang situation is necessary," he said.

  Chang said HBA is generally unsympathetic towards developers regarding the problem with overhang properties, as "they are continuously building what the rakyat cannot afford to buy".  

  He said independent market and feasibility studies should be done before any project is launched to minimise the risk of unsold units.

 "However, imposing a vacancy tax on them on unoccupied and unsold completed properties would not in any way help to resolve the problem. It will only result in new houses being more expensive as developers will pass on the cost of any additional taxes onto future buyers.  

  "Do not forget that property developers are profit-oriented, and whatever taxes are imposed on them are factored into the sales price. Hence, the rapid escalating house prices," Chang said.

  "And if the purpose of the vacancy tax is to penalise developers for having unsold completed units, why would the government offer substantial tax breaks for such unsold completed apartments as part of the Home Ownership Campaign?".

  Chang said that in the context of home owners being levied the proposed vacancy tax, he called such a move "something that is "misguided". 

  "Already, house owners are mandatorily required to pay quit rent to the land offices, assessment rates to the local councils, income taxes on their earnings to the Inland Revenue Board, and other financial costs.

  "The people will only ridicule the government for coming up with more burdensome taxes," he added.

Greater supply pipelines for prime office space in Asia Pacific will spark short-term rebound

 By NST Property/Sharen Kaur - August 14, 2023 

Photo/Sharen Kaur

sharen@nst.com.my

KUALA LUMPUR: The higher prime office space supply pipeline in Asia Pacific, along with a weaker-than-expected economic rebound in the Chinese Mainland, has adjusted expectations for the region's office market to stage a short-term recovery. 

  While occupiers remain cautious about space requirements, they are also constantly evolving responses to hybrid working and higher aspirations for their real estate portfolio, ranging from sustainability ambitions to a more transformational role in operational aspects, according to Christine Li, head of research at Knight Frank Asia-Pacific.

  "These dynamics will continue to fuel strong underlying demand for prime-quality assets, which belies the overall declining rental trajectory, and generate new and different occupier trends across the region's occupational markets over the current cycle," Li said.

According to Knight Frank's Asia-Pacific Prime Office Rental Index, rental growth in Southeast Asia's emerging markets is showing signs of moderation as an elevated supply pipeline erodes pricing power. 

  With new supply easing, vacancy levels in the Pacific markets are expected to tighten gradually in the second half of 2023.

  However, rents in Ho Chi Minh City remain on an upward trend, as new supply in 2023, while substantial, is the first injection in over two years. 

  Kuala Lumpur's market was also strong, with rents remaining stable during the quarter, supported by gross domestic product (GDP) growth in the first quarter, which beat expectations as the country continued to bounce back from the pandemic slump, said Teh Young Khean, executive director of office strategy and solutions at Knight Frank Malaysia.

  Meanwhile, Singapore's market continued to remain robust despite corporate relocations and a flight-to-quality trend.

  Despite elevated vacancies, rents across Oceania rose or remained unchanged, supported by robust demand for prime spaces. 

  Incentives remained above pre-pandemic levels, but across the continent's major markets, corporate tenants, focusing on the quality of their office footprint, are widening the rental gap between higher-rated assets and lower-quality ones. 

  Melbourne was the only market to experience a sequential quarterly fall in gross effective rents. With a lower exposure to TMT and Financial Services tenants, Australia's resource-driven markets—Brisbane and Perth—are enjoying a resurgence since the end of the last commodity boom. 

  Perth recorded the highest year-on-year rental growth in Asia-Pacific, as it benefited from elevated bulk commodity prices and the strongest employment growth over the past three years. 

DBKL forbids adding more bedrooms in commercial-titled apartments in KL

 By NST Property/Sharen Kaur - August 15, 2023 

Pixabay/Photo

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KUALA LUMPUR; The Council of Buildings (COB) of Kuala Lumpur City Hall (DBKL) has issued a circular prohibiting room partitions (adding bedrooms) in commercial-titled apartments with strata status under its jurisdiction in Kuala Lumpur.

The circular, which became effective on August 1, 2023, was addressed to the chairman of all Joint Management Bodies (JMB), Management Corporations (MC), and Sub Management Corporations (Sub-MC) in the Federal Territory of Kuala Lumpur. 

Kuala Lumpur Mayor Datuk Kamarulzaman Mat Salleh noted in the circular that all service apartments and SOHOs with strata titles in the city are prohibited from building walls to create more bedrooms.

He provided numerous reasons for the ban, the first being that converting living rooms and dining rooms into new bedrooms increases the number of rooms in an apartment or SOHO unit. 

This, he said, would be in violation of the original Development Order (DO) approved by the relevant authorities, including DBKL.

According to Kamarulzaman, the rule is also in place because adding more rooms would mean that the current living areas would not receive enough natural light, and the number of occupants for a unit would increase.

He said that adding more bedrooms would make it appear that they were being rented out for extra cash.

According to the circular, this prohibition is meant to avoid the existence of residential units intended for commercial use, such as hostels, as well as a rise in traffic and density, which would cause problems for the adjacent people.

The circular was issued on July 21, 2023, and it was made available for download on the DBKL's official website.

Developers have a neutral outlook for the economy and real estate market in the coming year: NK Tong

 By NST Property/Sharen Kaur - August 17, 2023 

Datuk NK Tong, president of REHDA Malaysia at the REHDA Property Industry Survey for 1H 2023 and Market Outlook for 2H 2023 and 1H 2024 media briefing here today. Photo/Sharen Kaur

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KELANA JAYA: Property developers are mainly neutral about the real estate market outlook for the next 12 months, particularly for the second half of 2023 (2H 2023), according to Datuk NK Tong, president of REHDA Malaysia.

  According to him, poll respondents have a moderate opinion of the business, economic, and property industry outlook for the coming months, with greater optimism for the first half of 2024 (1H 2024).

  "The increase in the number of launches and sales is a positive sign towards a property market that is slowly returning to normalcy," he said in his presentation on the REHDA Property Industry Survey for 1H 2023 and Market Outlook for 2H 2023 and 1H 2024 here today. 

  "However, true recovery is still out of reach as developers are still struggling with challenges that have yet to be properly addressed, such as material price hikes, cross-subsidisation, and high compliance and utility costs," he added.

  According to the survey, nearly 3/4 of the respondents reported an average 15 per cent increase in their overall cost of doing business in 1H 2023, as opposed to 13 per cent in the previous half. 

  And 84 per cent of respondents also reported being impacted by the current economic scenario and have opted to take cost-cutting measures in terms of operations (freezing recruitment, offering fewer benefits and perks, as well as reducing salaries) and production/delivery (rescheduling the launch of planned projects, reducing the scale of launches, and delaying projects due to poor demand).

  With regards to future launches and outlook for 2H 2023 and 1H 2024, about half of respondents (or 53 per cent) planned to launch their projects in the second half of 2023, with 3/4 of them anticipating their sales performance to be 50 per cent or below. 

  Most of these planned launches are priced between RM150,001 and RM300,000, particularly in Kedah, Perlis, Melaka, Pahang, Penang, and Perak.

 The survey saw the participation of 148 member developers, in which both new launches and sales performances recorded a hike compared to 2H 2022 results. 

  Meanwhile, the majority of new launches in the first half of 2023, or 62 per cent, were priced at RM700,000 and below.

  About 14,392 residential units were launched between January and June 2023, representing a 50 per cent increase compared to the previous period under review (9,426 units; 28 per cent). 

  Most of the units were apartments or condominiums (7,183 units), followed distantly by two- to three-storey terraces and serviced residences (3,729 units and 1,223 units, respectively).

  Residential sales performance increased in 1H 2023, totaling 11,273 units (1H 2022: 5,087 units), out of which 35 per cent were new launches.   

Apartments and condominiums performed the best sales-wise at 3,749 units, with serviced residences at a close second (3,688 units), followed by two- to three storey terraces (2,040 units).

Vacancy tax will have a negative impact on the overall real estate market: HBA

 By NST Property/Sharen Kaur - August 17, 2023 

National House Buyers Association secretary-general, Datuk Chang Kim Loong.

sharen@nst.com.my

KUALA LUMPUR: Bankers and investment research experts predict that the probable adoption of a vacancy tax will have a detrimental influence on the overall property market, according to feedback gathered by the National House Buyers Association (HBA).

  "The country currently needs more foreign investments, and a vacancy tax will be counterproductive. In fact, a vacancy tax is expected to exacerbate the problem of housing affordability and availability in the country," its secretary-general, Datuk Chang Kim Loong, told NST Property.

  Chang reiterated that the HBA is not sympathetic to Malaysian property developers for the problem of overhanging properties, which they created by continuing to build properties that people could not afford to buy. 

  He said that levying a vacancy tax on developers, as proposed by the Khazanah Research Institute (KRI), on these unsold and empty completed properties will not solve the problem.

  A vacancy tax, according to Chang, would merely raise the cost of new homes since developers would pass on the cost of any higher taxes to future launches.

  He said that developers that have an excess of inventory must evaluate it in relation to their financial sheet, holding costs, opportunity costs, and future expectations. 

  KRI had urged the government to study the plan to levy a vacancy tax on unoccupied and unsold residential and commercial units, claiming that it would "help prevent an oversupply of products, such as high-priced high-rise units, which contribute to a property glut."

  According to the National Property Information Centre (NAPIC), the value of overhang properties in the residential sector was RM18.41 billion as of 2022, with 27,746 overhang units.

  KRI also noted that vacancy taxes are levied in various major cities throughout the world, including Vancouver, Canada, and Melbourne, Australia.

  According to Chang, Malaysia's vacancy tax differed substantially from those in Canada and Australia.

  He said that while Australia and Canada do levy a vacancy tax, the rationale and target group for such a tax differ from what is proposed in Malaysia.

  The vacancy tax is enforced on end-owners of such properties who keep completed residences vacant for more than six months in Vancouver and Melbourne. The proceeds from such a vacancy tax will subsequently be used to fund new affordable housing initiatives.

  Chang said that the purpose of imposing a vacancy tax in Vancouver or other such cities is to return empty or underutilised properties to useful economic production, such as long-term rental residences for individuals who live and work in the city.  

  This is because land or property is a precious resource, and by leaving such a resource unutilised, another individual has been denied the use of such a scarce resource, he explained.

  "Hence, the intention of imposing a vacancy tax is to discourage the wastage of scarce resources. It was also attributed to the fact that blocks of properties were previously purchased by foreigners, especially Chinese nationals, and left idle and unkempt," Chang said.

  Chang said that the unoccupied tax was imposed to ensure that residential properties are occupied and have life within them.  

  However, he said that the objective of a vacancy tax in Malaysia is not to target owners of such abandoned houses but rather property developers who have been unsuccessful in selling such properties. 

  Meanwhile, public response indicates that the vacancy tax will be ineffective and underappreciated.

  "It's not going to work here. To avoid paying taxes, the developer can make a bogus transaction with a third-party entity. A prospective buyer may be sought from these companies," said a lawyer.

  According to a veteran police superintendent, the tax is deplorable. 

  "Those property owners who are unable to rent out their properties must already pay bank installments. Owners would suffer considerably more if we paid this vacancy tax," he said. 

  According to a retired banker, such a regulation will have direct or indirect ramifications for current laws and their enforcement in the current state. 

  "It is unquestionably a bad idea. What if the unit is purchased but there is no desire to rent it?"

  A surveyor and property manager said that, in each case, wisdom is essential.  

  "Recently, there have been too many self-proclaimed economist gurus who do not understand Malaysian problems. The solutions must be Malaysian-made, not simply copied and pasted from a western solution," he said.

  According to a top analyst, this vacancy tax is no different than the quit rents that the authorities are having trouble collecting from owners whose units are left vacant. 

  "I've seen some statements posted in front of a specific unit that haven't paid quit rent in 15 years. Is the government going to be sympathetic to owners who are unable to find tenants for their units?" 

  "Regrettably, it's a myopic view. We cannot just blindly 'import' what is done in highly advanced countries with different economic standards and property market demands."

  Another person inquired about how the tax would be applied to vacant kampung properties.