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The Gates

September 18th, 2011 No comments

Located in the industrial hub of Batu Maung, The Gates offers 20 units of light industrial factories. These semi-d and detached structures are cleverly designed with seamless space and multiple functions.

Integrated within a prime booming town of developments and industrial business, The Gates is already securing its place for the bright future to come.

With the 2nd Penang Bridge just minutes away and other major developments thriving in the surrounding areas, this is not an opportunity to miss – be part of this growth.

Property Project : The Gates
Location : Batu Maung, Penang
Property Type : Industrial factory
Total Units : 20
Tenure : Freehold
Contact No: 016-416 8282
Developer : New Bob Realty

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Categories: Batu Maung, Property News Tags:

The Manor

September 18th, 2011 2 comments

At the Manor, it’s all about indulgence first. Designed with the modern family in mind, this masterpiece is another addition of manors along prestigious Codrington Avenue – one of Penang’s most prominent and affluent estates.

This architectural marvel combines style and function, along with intelligent features of today’s contemporary lifestyle. Nestled in the edge of historic Georgetown, The Manor is the perfect contrast of modern sophistication and classic elegance.

Why The Manor?
Stylish contemporary tropical house.
- Located at the heart of Pulau Tikus area along Codrington Avenue, just off Burmah Road!
- Only project left in the area, opportunity to own a brand new bungalow become the address of the astute city dweller!
- Supremely spacious bungalows!
- Double volume living area!
- Large glass panel to enhance Natural lighting & ventilation!
- Environmental friendly Green Landscaping for cooling effect and Solar Panel for Energy Saving!
- Security System installed with Alarm system & Video Communication System, also SMATV System for rooms and living area!
- Ultra modern streamlined kitchen!
- High Quality Imported Materials to match the lifestyle of The Manor!
- Multi-directional view of aesthetic designed landscaping.

Price: 
The Manor 1: RM 4.8mil.
The Manor 2: RM 5.3mil.
The Manor 3: RM4.6mil.

Property Project : The Manor

Location : Codrington Avenue, Georgetown, Penang
Property Type : 3-Storey Bungalow
Tenure : Freehold
Total Units : 3
Developer : New Bob Realty
Contact No: 016-416 8282
Indicative Price: 
RM 4,600,000 onwards

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Categories: Georgetown, Property News Tags:

Rising household debt

September 17th, 2011 1 comment

DEBT can be a double-edged sword. It’s useful for taking advantage of opportunities quickly and it can smoothen things out when people are in a pinch.

Do that too often and eventually the borrowed money will end up being more a liability than a benefit. There is no difference between how the effects of too much debt can affect countries or individuals. Debt is like a rubber band. Stretched too far and it will snap, and that is just what’s happening in Europe and recently with the United States when the government reached the ends of its debt elasticity.

For people and households, there too is a prudent limit as to just how much loans one can stomach on their incomes and given that Malaysia has one of the highest debt levels in the region, the rubber band is indeed looking pretty taut.

Over the last one to two years, the increase in Malaysia’s household debt has been largely fuelled by the availability of cheap mortgage rates arising from the cut-throat competition in the housing loan market.

Cheap money has enticed people to borrow and the rate of which households are taking on debt to buy houses, cars or finance renovations or holidays has indeed grown.

Since the 2008 global financial crisis, Malaysia’s household debt service ratio, which measures the ratio of debt payments to disposable personal income, has jumped about 10 percentage points to 49% in 2009 before easing slightly to 47.8% last year.

Malaysia’s household debt in total rose 12.5% to RM581.3bil last year while debt-to-gross domestic product (GDP) ratio, which measures a country’s federal debt in relation to its GDP or the size of its economy, stood at 76% last year, unchanged from the year earlier.

In a broader sense, a growing population where more Malaysians are entering the workforce each year, steady economic growth and rising income levels coupled with a low-interest rate regime have helped provide the impetus for more borrowing by consumers.

Based on data provided by RAM Holdings Bhd, housing loans now account for about half of the total loans in the household sector; they grew by 12.8% in the first seven months of this year, slightly lower than the 13.2% increase recorded last year.

The second largest segment where households have borrowed money for is the passenger car segment and that makes up 24.4% of total household loans. This recorded an increase of 5.8% in the first seven months, but was slightly slower than the 7.7% recorded last year.

Although the smallest segment of total household borrowings, loans for the purchase of shares and for personal use jumped the most and for the first seven months of this year, that segment rose by 18.4% and 16.5% respectively.

Given where household debt as a percentage of GDP is and the earning power of families, concerns are mounting that the country’s growing household borrowing activities could possibly make the local financial sector and economy more vulnerable to external economic risks, especially now with the ongoing debt crisis in the eurozone and the lacklustre growth trend in the United States.

Although borrowing in the main segments of housing and passenger cars has slowed down marginally so far this year compared to last year, the absolute amount of borrowing is still rising.

“It will definitely be prudent to slow down consumer and retail lending to keep overall household debt at a prudent level at this stage,” says Dr Yeah Kim Leng, group chief economist at RAM.

Given that 84% of current household debt emanates from the banking system and that lending to households remain strong, growing at 12.8% in the first seven months of this year, it would be prudent to slow down lending, he says

The remaining RM92bil or 16% of total household debt not owing to the banking system can be attributed to loans from employers, money lenders and cooperatives.

The bulk of cooperatives lending to members are accounted for by civil servants and, given the job security in the public sector, the credit risk for cooperatives would remain manageable, says Yeah.

Besides various prudent measures to manage bank borrowing, such as tightening of the lending criteria and capping of banks’ exposure to specific household loan types, demand-side initiatives such as consumer education on proper household budgeting and prudent financial planning also needs to be stepped up.

Bank Negara last year lowered the amount people could borrow for the purchase of their third or subsequent house, capping the margin of financing to 70% from 90% previously in a move analysts believe would also curb speculation in the property market.

Yeah believes the situation remains “manageable” for now as Malaysia enjoys full employment status with an unemployment rate of 3.2% last year compared with 3.5% in 2009.

“As long as this (full employment status) is maintained and people are able to service their loans, it should be alright, provided that they have borrowed within their means,” he says.

A banking analyst with ECM Libra Research points out that the balance sheets of local banks are “still very strong,” helped by their conservative nature, and that loan default rates are low. As at July, the net impaired loan ratio stood at 2%.

The highest mortgage non-performing loan ratio has ever been was at 8.6%, or about RM14bil, in 2006. Since 2007, the figure has been declining steadily, giving confidence to the fact that household debt appears to be contained.

Another banking analyst points out that although household debt level in Malaysia is high, locals have a relatively high savings rate, at about 35% of GDP.

Still, RAM’s Yeah cautions against any further increase in household debt levels and the debt servicing ratio, as this will increase the financial risk and vulnerability not only for consumers but also for the lenders and, ultimately, the overall economy.

“It is, therefore, prudent to pare down the debt level now and make the economy and society more resilient to future domestic and external shocks,” he says.

CIMB Research head of economics Lee Heng Guie concurs, saying that excessive household indebtedness not only raises concerns over its sustainability but also poses a risk to the overall financial system.

“High levels of household debt may also constrain the effectiveness of monetary policy as it increases the sensitivity of the behaviour of households to changes in interest rates,” Lee points out.

Prime Minister Datuk Seri Najib Tun Razak said while banks’ portfolio for lending to the household sector had increased, it was important that the household sector did not become excessively leveraged.

“We have seen the consequences of such developments in other parts of the world. In this regard, financial institutions should exercise prudence and employ responsible lending practices to ensure a sustainable household sector, which will in turn, support sustainable growth, given the major role of consumption in the economy,” Najib said at the recent opening of Bank Negara’s Sasana Kijang building.

“We want to have more financially savvy consumers who are not only able to make the right decisions with respect to their finances, but also are not vulnerable to scams and driven to the informal sector,” he said.

SOURCE: The Star

Categories: Property News Tags:

A new horizon beckons for E&O

September 17th, 2011 No comments

Eastern & Oriental Bhd (E&O) is embarking on a new chapter with the entry of Sime Darby Bhd as the single largest shareholder of the company. What will happen next and how will the momentum that has led to the growth of E&O be following a big change in ownership? E&O deputy managing director Eric Chan Kok Leong replies to StarBizWeek’s ANGIE NG on the growth direction for the company following Sime Darby’s acquisition of a 30% stake in E&O.

With Sime Darby’s recent purchase of a 30% stake in E&O, what will be the game plan for the company going forward?

E&O has successfully built a strong portfolio and visible premier niche brand in the property development, hospitality and lifestyle segment in Malaysia. Having established ourselves locally, we intend to push the boundary further by making E&O an aspirational brand that is recognised locally, regionally and eventually internationally.

In our various joint ventures and partnerships, E&O seeks to align itself with leaders and giants within respective industries, whether it is in terms of award-winning architects for our developments, in launching new products with CIMB-Mapletree, or the most recent marketing collaboration with Japan’s largest zaibatsu, Mitsui Fudosan.

That ideology extends to the development of a wellness township in Medini Iskandar via a joint-venture (JV) with Pulau Indah Ventures Sdn Bhd. Pulau Indah Ventures is a 50:50 JV between Teluk Rubiah Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd, and Aneto Investments Pte Ltd, an indirect wholly-owned subsidiary of Temasek Holdings Pte Ltd.

Sime Darby’s entry into E&O, is therefore consistent with this strategy, given that we now have as our new cornerstone shareholder, Malaysia’s oldest and largest conglomerate. Sime Darby is recognised worldwide for their financial strength, considerable landbank and extensive network.

With such a prominent investor on board, the horizons for E&O expands at an accelerated pace which otherwise would not have taken place had the status quo remained.

What are some of the immediate and medium term plans Datuk Terry Tham has for himself and for the company?

Does he intend to stay beyond the third year, and what are his longer term plans as a property developer?

Datuk Terry Tham’s position has only changed in that he has reduced his personal shareholding in the company. Datuk Terry has helmed the company from the outset and remains fully hands-on in E&O’s operations as its managing director, continuing to set its vision as well as monitoring and guiding ongoing projects across the group’s three core business divisions, which are property development, property investment and, hospitality and lifestyle.

Now with Sime Darby as E&O’s new cornerstone investor, his long-held aspirations to grow E&O into an internationally recognised brand, has given him greater impetus and motivation.

E&O has built up a strong brand name as a niche developer in the Klang Valley and Penang. How can it progress further from here?

In early 2000, after a deliberate survey of the property market, it was decided to position E&O in the premium niche market segment, as opposed to township development where others had already established themselves. This strategy has augured well for E&O, evidenced by the healthy take-up rates of our properties and our ability to benchmark prices at each prevailing time of launch.

The E&O brand is now synonymous with premier developments, and we have been complimented that E&O adds the distinct ‘style’ ingredient into ‘lifestyle’. Again, we came to secure this reputation by no accident – it was a conscious strategy that we worked hard towards.

Today, the E&O Group is supported by an eight-pronged lifestyle portfolio, which includes our namesake heritage Eastern & Oriental Hotel (listed as one of the must-visit destinations in the New York Times bestseller 1,000 Places To Visit Before Your Die by Patricia Schultz), the newly refurbished Lone Pine Hotel (picked by travel portal TripAdvisor as one of “the top 10 boutique hotels in the world” in its category), the retail mall, marina operations, performing arts centre and convention centre at Straits Quay, serviced residences that bear the hallmark of E&O hospitality, merchandising as well as food and beverage via the Delicious Group.

These are pillars that truly differentiate E&O as a unique brand and substantiate our claim as a truly holistic premier lifestyle developer.

What are some of the synergistic benefits that the two companies can leverage on, and what should be their areas of focus – in terms of product types, market presence and business forte?

There are numerous possibilities for us to work together. For instance, we could enhance our market presence in locations where each party has no presence, tapping on marketing channels, service providers, market intelligence in products or even JVs to develop land in new locations. There is also the opportunity to deepen and broaden the technical capabilities of both parties in innovation and product design and to create new property products and sale opportunities.

We could also expand internationally, either together or through strategic alliances with other global property companies to increase their brand value and presence. We can also develop new growth engines from existing and new markets.

Beyond property development, we could also explore the possibility of leveraging on each other’s hospitality capabilities. These are just some areas for possible collaboration.

We will have a better picture when the two parties eventually sit down to carve out specific projects for collaboration.

How will the Sime Darby-E&O deal impact or benefit the respective companies in terms of its staff strength and its project plans – will there be any changes in the pipeline?

Let me share with you E&O’s Key Performance Indicators (KPIs) that map out our direction going forward:

    • Achieve regional and international exposure of the E&O brand;
    • Secure strategic alliances and collaboration with well renowned international institutions;
    • Develop new growth engines;
    • Deliver significant bottom line growth and sustainable profits; and
    • Attract, retain and motivate talent across the group.

As you can see, our KPIs touch on the intangibles to the tangibles in value creation for E&O, from continued efforts in brand building to employee engagement, while never losing focus on the bottom line and balance sheet.

As for staff strength across the E&O Group, our numbers already surpass 1,000 and are increasing in response to new projects such as Medini Iskandar, the expansion of Delicious outlets (which will make its debut in Singapore Scotts Square this November), which go toward bringing new opportunities and careers to the employment market.

SOURCE: The Star

Categories: Property News Tags:

Glut dampens market value and rental of condos

September 17th, 2011 No comments

SINCE the high-end condominium market took a beating following the global financial crisis in 2008, their values have been left pretty much battered even today. Investors who got into the market around the peak must still be quite disheartened by the market’s lethargy.

The big supply coming onstream has also been a dampener on property values and the rental market of these residences.

There are now many condominiums in need of tenants and the net rental yields are in the range of 3% to 5%, depending on the location.

But despite this, the speculative fervour in the upper-medium to high-end landed residential sector has not abated. There are signs that it is spilling onto the latest craze – small sized, and more affordable, commercial cum residential accommodation known as SoHo’s, and service apartments.

It is time to exercise caution on property matters to ensure the market’s sustainability and avoid unnecessary losses.

The fact that even analysts are concerned and have downgraded the property sector pretty much indicates the party is coming to an end and it is time to be cautious.

UOB Kay Hian Research has downgraded its grading for the property sector to “market weight” from “overweight” citing that the property valuation cycle has peaked.

A global double-dip recession, coupled with the European debt problems, would certainly have spillover effects on the domestic economy, including the property sector. If the world economy is hit by a recession, the property market will not be spared either.

The recent market volatility and sell-off has affected investor confidence and the market is taking a breather now.

Although the market seems to be holding out quite well for now, there is no telling how it will react if sentiment is badly eroded by the gloomy external outlook.

As such, developers should also be cautious and build more affordable property units priced below RM350,000 that still has strong demand.

As shown by the havoc caused by the oversized property bubble and sub-prime loan crisis in the United States which literally brought down the world economy to its knees, we have witnessed how significant a role property has on the health of the economy and financial system of countries. The world would have been spared the agony of the global financial crisis and the continuing state of volatility and uncertainty had the United States been vigilant on its crumbling market fundamentals that inflicted such gargantuan damages felt till this day.

For the sake of a sustainable property market in the long term, it is important to have policy measures that will ensure the market is closely tied to market fundamentals, and to curb any artificial inflation in property value.

The more that is known of the fundamentals, the better and this calls for greater transparency.

To ensure financial and social stability, it pays for the Government, through its policy measures, to keep the property market closely tied to fundamentals.

The hot property market and sharp rise in property prices in residential markets in the Klang Valley and Penang continue to be of concern among property buyers and the authorities.

Bank Negara is said to be considering further tightening measures to cool the market and rein in speculative buying and further price hikes.

Some of the possible measures that are at the disposal to tighten the market include hikes in bank interest rates to fight inflation, and the further tweaking of the loan to value ratio (LVR) to dampen the excessive property demand.

The central bank is also said to be keeping a close watch on the mortgage loan market to see whether a capping of the LVR (at 70% of the property price) on second mortgages is necessary.

The critical sectors are the upper medium to high-end landed residential sector and non-owner occupied houses. Purchasers who have multiple properties and who already have a mortgage loan will be subject to the new loan limit if it is implemented.

To address speculative activity in the property market, there is also a likelihood that the Government may reinstate the real property gains tax (RPGT) to a higher quantum from the current 5% for all property sold within the first five years of purchase.

The Government has tweaked the RPGT on various occasions depending on market conditions.

From April 2007 until it was reintroduced in January last year, all gains from property transactions have been exempted from the tax.

Under Budget 2010, the RPGT was brought back in January, albeit at 5% for all property sold within the first five years of purchase.

If the Government decides to reintroduce the RPGT in its entirety, property speculators will get the brunt of the “axe” as gains from property sales within the first five years of purchase will be subjected to a tax of 5% to 30%.

The maximum 30% is for disposal within the first two years; 20% within the third year; 15% within the fourth year and 5% within the fifth year. Profits earned from disposal in the sixth year and beyond will not be taxed.

As for bank borrowings, directives may also be given to banks to lend based on net income and not on gross income as the practice now.

With the world’s antenna tuned in to unfolding news on the US and eurozone’s debt crises, such prudent measures will help to ensure the market’s sustainability.

Deputy news editor Angie Ng believes going back to basic fundamentals and prudence is the way to go in times like this.

SOURCE: The Star

Categories: Property News Tags:

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