What is it about the sea that attracts both developers and homebuyers? Along the Penang coastal road from Gurney Drive to Batu Ferringhi, condominiums, apartments and landed housing compete for buyers and tenants.

Landed units and villas sit snugly on hill slopes fronting narrow roads on one side while multi-storey high-rise projects front the sea or the beach with names like Skyhomes By the Beach, The Cove, Moonlight Bay and Springtide Residences.

Registered and chartered valuer C.A. Lim & Co proprietor Lim Chien Aun says in a telephone interview: “Everbody builds on the beach. We hardly talk about the inlands anymore. The exclusiveness (of being at the beachfront) is gone. We are like Hawaii many years ago.”

Most of the multi-storey beach and seafront high-rise developments are located in the Gurney and Tanjung Bungah area.

Valuers and property consultants contacted via the telephone say all of them have been sold.

While some of these developments have been built more than 10 years ago, there are also some new ones like Springtide and Skyhomes By the Beach.

Old or new, many of them are hardly-occupied.

They serve as holiday or weekend homes for well-to-do Malaysians. Many of them belong to foreigners who use them to escape from the cold winter in their countries.

What differentiates these developments from Selangor Dredging Bhd’s By The Sea is concept and size.

Many of Penang’s super condominiums have built-ups ranging from 2,000 sq ft to 10,000 sq ft. These were built years ago when there was a cap on density, but not size.

As a result, developers went overboard, with some units having two kitchens and two entrances, valuers say. The idea then was to enable buyers to sub-divide these units themselves.

Says Lim: “The ideal size of 1,500 sq ft were very few or were in older and medium-cost apartments and these were spread out here and there.”

Besides the scarcity of luxurious 1,200sq ft to 1,500sq ft units, lifestyle homes were a trend introduced by E&O’s Seri Tanjung Pinang several years ago.

Fin Chong, the former president of Master Builder Penang says: “The lifestyle concept came too early to Penang. Most of the buyers for E&O’s project came from their own database outside Penang.”

With an average price of RM1,200 per sq ft, valuers and consultants say the price may be prohibitive for local Penangites. Prices of By The Sea range from RM1.2mil to RM3.3mil.

Says Chong: “Penang has its share of millionaires. They fall into two categories. The retired ones can afford their RM5mil landed properties because they do not want to pay the monthly charges. Then there is the working millionaire who can buy their RM5mil properties and are willing to pay heftily every month to support a lifestyle.”

SDB’s By The Sea will the second beachfront suites in Batu Ferringhi, which is 5km away from Tanjung Bungah.

The first beachfront residential in Batu Ferringhi is Mahligai Baiduri, which has less than 50 units, says Henry Butcher Penang Shawn Ong.

“Those who want to live closer to town and all the amenities it has to offer will opt for Tanjung Bungah as Ferringhi comes across more as a holiday home where most of the hotels are located.

“Although the zoning is the same when it comes to resort properties, they are both commercial titles, Ferringhi will command a better value than Tanjung Bungah,” says Ong.

Besides SDB’s By The Sea, the other Kuala Lumpur-based developers which have made inroads on the island includes the YTL group. It will be building a niche development next to the famed E&O Hotel in the city. IJM group will have a mixed integrated project on reclaimed land near the bridge that connects the island to the peninsula.

While both of these projects front the sea, they will not have a beach. They will instead be known as sea-front properties.

IJM’s most recent launch The Light Collection 3 averages RM850 per sq ft while Seri Tanjung Quayside is priced between RM880 and RM1,100 per sq ft. Both of these are on reclaimed land.

SOURCE: The Star

AN assemblyman has asked the state government to review its existing requirements for developers to build low-cost or low medium-cost houses, to compel them to build more of such units.

Jason Ong Khan Lee (PKR-Kebun Bunga) said the current requirement was that developers build 30% of low or low-medium cost houses when they undertake projects to construct over 150 units in the medium to high-cost range.

“The 150 units should be reset to 100,” he said.

Ong added that developers also had another option to not build the houses by paying a premium of between RM30,000 and RM40,000 for each unit.

“The amount should also be reviewed, and the location of the projects taken into consideration as the cost per square feet differs. A new formula is needed,” he said.

He also suggested that a public housing fund be established where premiums collected could be channelled to help those who could not afford to own a house.

“It can either provide subsidy, loan with low interest rate or even interest-free to the needy,” he said.

He added that RM27.51mil was set aside in the state’s 2012 budget for 11 public low-cost housing projects.

“It would be good if the state also set an allocation for the purpose of the fund and provide poorer people the opportunity to own a house,” he said.

Source: The Star

There seems to be a lack of awareness among foreign investors about the property market in Malaysia, laments Kumar Tharmalingam, chief executive officer of Malaysia Property Incorporated (MPI).

And to remedy such a situation, a Malaysian delegation of distinguished property developers and non-profit government entities will participate in MIPIM Asia 2011 led by MPI, a Malaysian Government initiative set up to facilitate and promote investment for Malaysian real estate.

To be held at the Hong Kong Convention & Exhibition Centre from Nov 15-17, MIPIM Asia 2011 is an international exhibition showcasing the projects and accomplishments of high-end property developers in Asia. Created in 2006 by Reed MIDEM — an organiser of international B2B events in the property and entertainment industries — MIPIM Asia is a top real estate event in the Asia-Pacific region.

Says Kumar, “Among the local developers for this exhibition are Sunway, IJM and the Selangor state investment arm PKNS. Non-profit government entities promoting investments in the country such as investKL, investPenang , 1MDB, Pemandu and Green Building Index representatives will also be joining us.

“Three main areas that we would like to promote in MIPIM Asia 2011 are Penang, the Greater Kuala Lumpur region and Johor, in particular, the Iskandar development region.

“Residential properties to be promoted, will have a starting price of RM1 million.”

Says MIPIM Asia senior project director William Young, “We had held MIPIM exhibition in Cannes, France, in March this year with a total of 18,590 participants from over 91 countries.”

“We believe that property market in Malaysia has great potential among (international) property investors. One of the main reasons is the good track record that this industry has achieved, especially in transparency, legal structure and the country’s stability, in terms of land value.”

Adds Kumar,“ It is not just Malaysian properties that we are promoting at this exhibition, but we want to bring foreign property investors to our country.”

He cites that presently, foreign property investment in the construction sector merely accounts for two percent.

“If we are able to attract foreign investors, they will not just have the capital to kick-start major projects in the country but also transfer their skills and technology to the local property scene. This in turn, will reduce the time and costs taken to complete a project,” points out Kumar.

The Malaysian delegation will have a trade pavilion designed by local architectural firm Hijjaz Kasturi Associates. Designed in the form of a “ribbon”, the pavilion represents Malaysia’s shared values and the high quality of development in diverse property choices.

SOURCE: The Star

A MULTI-STOREY car park and a hotel block will soon be built within the Penang International Airport ground, said state Public Works, Utilities and Transportation Committee chairman Lim Hock Seng.

“The car park, which will have 1,218 lots, and the hotel will be tendered to interested concessionaires via open tender.

“Both structures will not exceed 30m as per the Civil Aviation Department’s (DCA) Obstruction Clearance Limitation,” he told reporters after inspecting the work progress at the airport in Bayan Lepas yesterday.

Lim said airport users could now enjoy smoother pick-up and drop-off of passengers with the opening of the arrival and departure curb side and ramps on Friday, adding that lanes had been built according to vehicle types.

“The opening of the new drop-off and pick-up points has visibly eased traffic flow but the absence of signs has caused motorists to park haphazardly outside the terminal building.

“Signs and road-line works will be carried out at night when there are fewer cars to ensure the public abide by the system and not take advantage of the situation by simply parking anywhere they like,” he said.

The arrival and departure ramps had been closed to visitors since April this year due to the upgrading and repair works.

Throughout that period, passengers and visitors had to endure numerous inconveniences even though nearly RM1.6 million had been spent on temporary diversion measures following complaints.

Airport senior manager Mohd Ariff Jaafar, who was also present, expressed confidence that they would be able to meet the completion date of June 2012.

Earlier, Lim and Batu Maung assemblyman Abdul Malik Abul Kassim also visited the completed RM6.1mil road rehabilitation project along the coastal road on the Lim Chong Eu Expressway and Jalan Sultan Azlan Shah in Penang.

They thanked motorists for their understanding and patience during the four-month road closure and diversion.

Abdul Malik said road users, including him, would get to enjoy a smoother and a safer driving experience along these roads.

Source: The Star

Abdul Rahim Rahman expects Budget 2012 to boost the property and construction sectors.

THE RM232.8bil budget tabled by Prime Minister Datuk Seri Najib Tun Razak on Oct 7 was formulated with the theme National Transformation Policy: Welfare for the rakyat; well-being of the nation”.

It aims to implement development plans such as projects and programmes under the Second Rolling Plan (RP2), National Key Economic Areas (NKEA), National Key Result Areas (NKRA) and Strategic Reform Initiatives (SRIs) focusing on the well-being of the general population and aiming at stimulating the domestic economy.

The Government is targeting GDP growth of between 5.5% and 6.0% for 2012. However, our external environment has become increasingly challenging with the economic slowdown in the United States, Europe and Japan, inflationary pressures due to rising commodity prices, and the European debt crisis.

The International Monetary Fund revised its projected world economic growth to 4% and world trade to 5.8%. The Malaysian Institute of Economic Research (Mier) has revised the country’s gross domestic product (GDP) growth to 4.6% this year compared with an earlier forecast of 5.2% due to slowing exports and weaker domestic demand stemming from a volatile global outlook.

Next year’s GDP has also been revised to 5% from 5.5%. In view of these challenges, it is critical that the Government implement measures to stimulate the domestic economy, both public and private investments.

The momentum for the construction industry is expected to accelerate with various projects to be implemented under Budget 2012. While contribution of the construction industry to GDP has always been small, it is projected to grow by 7% in 2012, the highest growth compared with all other sectors.

Its multiplier effect has always been large, involving 146 sub-sectors. Therefore, we expect the special stimulus package worth RM6bil for the construction industry to have positive effects on the economy. The construction projects announced by the Government will benefit not only big players but also the entire value chain including small players.

The RM40bil MRT project is expected to stimulate property development along the MRT line with some developers trying to take this advantage by building affordable homes in the suburbs near the MRT line. It was announced recently that Mah Sing has entered into a share sale agreement to acquire the entire stake in Semai Meranti Sdn Bhd, which is the beneficial owner of a piece of freehold development land (with development order) in Rawang, measuring 225.7 acres, at a total purchase consideration of RM92mil.

The land will be developed into a self-contained township named M Residence@Rawang, offering entry level homes priced from RM390,000. SP Setia has also recently announced its second land deal in the Semenyih-Kajang corridor buyinga 269.3ha site for RM381.26mil in Ulu Langat to be developed into a township with an estimated gross development value (GDV) of RM4bil.

The land is adjacent to its current development, the Beranang Land with an estimated RM3.5bil GDV. The site is about 13km south of Kajang town and homebuyers are expected to benefit from the proposed MRT station in Kajang. SP Setia plans to build affordable homes to cater to first time home buyers.

The Federal Government’s proposal to liberalise 17 services sub-sectors in phases next year has also received positive reactions from investors. This liberalisation will benefit private hospital services, medical and dental specialist services, engineering, accounting and taxation, and legal services. Looking at the real estate side, we expect more new township developers will include private hospitals and other medical services as part of their development components in their effort to create self-contained townships.

The implementation of main projects under RP2 such as Gemas-Johor Bahru double track rail project, Lebuhraya Pantai Timur Jabor-Kuala Terengganu, Lebuhraya Pantai Barat Banting-Taiping, Lebuhraya Segamat-Tangkak and Lebuhraya Central Spine as well as the construction of Kota Marudu-Ranau road will create greater accessibility to less developed areas in Malaysia, which will then spur development in these areas.

The RM978mil allocated to implement projects such as Johor Bahru-Nusa Jaya coastal highway in Iskandar, Johor, heritage tourism development in Taiping in the Northern Corridor, agropolitan scheme in Besut in the East Coast Economic Region, palm oil industrial cluster project in Lahad Datu in Sabah Development Corridor and Samalaju water supply in the Sarawak Corridor of Renewable Energy is expected to accelerate development in the five regional corridors and this will help the Government to achieve its development objective of creating more balanced regional development in the country.

Incentives offered to KLIFD-status companies not only emphasise the Government’s effort to turn Kuala Lumpur into a global financial centre but also attract more investors to participate in the development of the project.

The project is aimed at enabling Malaysia to capitalise on its international Islamic financial products and and this is further strengthened with measures proposed in the budget to stimulate the sukuk market and provide the seed money for shariah-compliant exchange traded funds (ETFs).

The incentives are a 100% income tax exemption for a period of 10 years and stamp duty exemption on loan and service agreements for KLIFD-status companies, an industrial building allowance and accelerated capital allowance for KLIFD Marquee Status Companies; and income tax exemption of 70% for a period of five years for property developers in KLIFD. It is hoped that with these incentives, KLIFD will be able to compete with other financial centres in Asia.

The real property gains tax (RPGT) is also proposed to be revised as one of the measures to cool the property market. In Budget 2012, it was proposed that the RPGT on properties held and disposed of within two years be raised from 5% to 10%, 5% tax to be maintained for properties disposed after three to five years and no tax for properties disposed after the fifth year.

From a macro-economy perspective, a higher RPGT will reduce speculative buying, which will then stabilise property prices and this will avoid “property bubbles” from bursting. This step is necessary as property prices, especially in prime areas such as in Klang Valley, Penang and Johor have increased over the last two years between 30% and 50%, depending on location and type of property. This measure is considered “mild” compared with more stringent measures imposed by other countries such as Singapore, which imposes a lower loan-to-value ratio (60%) for borrowers with more than one outstanding loan and higher seller’s stamp duty.

As one of the NKEAs, the tourism industry will also receive a shot in the arm. For example, RM420mil will be allocated to launch the Langkawi Five Year Tourism Development Master Plan. Among the initiatives to be undertaken are the restructuring of the Langkawi Development Authority, setting up a park rangers unit, upgrading museums, beaches and small businesses as well as providing a more efficient transportation system.

In my view, to create a more supportive environment for the tourism industry, it is of high importance for the Government to also re-look at current restrictions on buying and investing in properties in Langkawi. The island has great potential; however, more needs to be done to attract hotel operators as well as investment in tourist-related activities as the current regulations are considered as “unfriendly” to foreign buyers or investors.

In an effort to attract high-spending tourists and to encourage investment in hotels at par with international standard, the Government also proposed that 4- star and 5-star hotel operators in Peninsular Malaysia be given pioneer status with income tax exemption of 70% or investment tax allowance of 60% for 5 years.

This incentive is expected to encourage more hotel development, which many hesitate to venture into because the payback period is normally as long as 10 to 15 years.

Overall, I would conclude that Budget 2012 is very comprehensive and the Government has focused on every aspect that will stimulate the country’s economy considering the many external challenges that we are facing now.

SOURCE: The Star