THE opening of several new Shangri-La Hotels and Resorts properties around the globe in 2012, will be leveraged on by its sister property in Penang to draw more visitors to the island state.

Shangri-La’s Rasa Sayang Resort and Spa general manager Elaine Yue said the expansion of the group’s properties, especially in South Asian countries like India and Sri Lanka will be used to brand the Penang property as a preferred site for weddings.

Among the new properties slated for opening this year include Shangri-La hotels in cities like Mumbai in India, Doha in Qatar, Toronto in Canada, while several other new properties have been announced for opening in China like Qufu, Changzhou, Haikou, Haikou, Sanya and Shanghai.

A new Traders Hotel Puteri Harbour at Iskandar in Johor is also expected to open in the fourth quarter of this year (2012).

“We plan to piggy-back on the openings of these new properties,” she told Business Times in an interview.

Yue was recently appointed Shangri-La’s Rasa Sayang Resort and Spa Penang’s first female general manager, after she spent three years in a similar position in Chiang Mai, Thailand.

Prior to that, Yue was the general manager of Traders Hotel in Penang in 2006.

The 304-room Rasa Sayang resort located in the Batu Ferrringi tourism belt on Penang island, is Malaysia’s first five-star resort which opened its doors in 1973.

On what lies ahead for the sector this year, Yue said: “We see a lot of growth in Southeast Asia – notably in Malaysia and Singapore – and expect companies to hold more meetings and conventions closer to home.

This will enable us to tap into the corporate market since the global economy may not see many firms holding corporate retreats and such further away from their bases”.

Yue said two new markets which Shangri-la’s Rasa Sayang Resort and Spa will target would be weddings, especially for guests from India.

“The Chinese market is another one we are eyeing for travellers who will be keen to explore destinations which offer value-for-money,” she added.

Hong Kong-based Shangri-La Hotels and Resorts currently owns and/or manages 72 hotels under the Shangri-La, Kerry and Traders brands, with a room inventory of over 30,000.

In Penang, the group also has its presence at the Shangri-La’s Golden Sands Resort and Traders Hotel.

SOURCE: Business Times

The steep increases seen in the last two years expected to sputter to a halt on weak global sentiment

THE overall weak global sentiment is expected to cast a pall over the property sector, which is expected to undergo some downward correction next year, agents, property consultants and developers say, with the steep increases seen in the last two years sputtering to a halt. Virtually all segments of the property market will be affected.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang says the slowdown, though gradual, will be seen in the pricing and take-up rate of all housing segments, particularly more so in the high-end category.

“Whether it is Penang or the Klang Valley, we don’t have that many multinational companies coming in to occupy some of our high-end properties. Rentals with yields of between 6% and 8% are no longer achievable,” he says.

This slower rate of growth is expected to be more apparent after the new ruling by Bank Negara kicks in. Effective Jan 1, new lending guidelines require banks to use net income to calculate the debt service ratio for loan approvals.

The new guidelines cover all consumer loan products including housing loans, personal loans, car loans, credit-card receivables and loans for the purchase of securities.

While this latest round has the objective of reducing overall household debt, it will affect the property sector, a branch manager of a local bank says.

Previous lending guidelines capped monthly mortgage repayment at 1/3 of net pay instead of gross pay. This new ruling, and the requirement to have a 30% downpayment on the third and subsequent property, introduced in 2010, will result in the banking sector being more stringent when it comes to mortgage loan approvals. The re-imposition of the real estate property tax, at 5% flat within five years of purchase, was another measure to curb speculation.

These measures, together with the global concerns over the United States and the eurozone, will affect sentiment. However, there will be opportunities in the affordable housing segment, which is part of the Government’s Economic Transformation Programme.

Says Ireka Corp Bhd executive director Lai Voon Hon: “We see strong growth potential in these ‘under-served’ sectors such as mid-market residential and commercial as well as ‘green’ developments located close to infrastructure nodes. Market movement in recent months had observed major developers acquiring parcels of land outside the Klang Valley such as in Kajang, Semenyih and Nilai which are destined to be the next “hot spots”.

“With 65% of the Malaysian population falling under 35 years old, we trust that the demand will pick up as consumer confidence recovers. Close to 10 million people are expected to work, live, learn and play in the Greater KL metropolis by 2020.

“Burgeoning young and middle-class population also means the demand for mid-market properties will remain steadfast,” Lai said, adding that the mid-market will receive strong support in terms of demand, and this will be Ireka’s primary focus in 2012.

Other developers to move into affordable housing include the Sime Darby group and Mah Sing group. Sime Darby recently launched affordable housing in Bandar Ainsdale in Seremban. Mah Sing Group Bhd, too, is moving away from high-end housing to go into the affordable housing segment.

Mah Sing group managing director and group CEO Tan Sri Leong Hoy Kum says: “The high-end sector, both landed and high-rise, will be more challenging with the RM4mil and above units taking longer to sell.”

Ireka’s Lai says the company will be developing a 28-acre freehold land in Bandar Nilai Utama, Negri Sembilan into a trendy mid-market neighbourhood, consisting of landed houses and apartments. Another five acres of prime land in Kajang will be developed into a mixed development. consisting of two mid-market apartment blocks and a retail precinct.

Ireka will also embark on a modern industrial park development on its 21-acre freehold land in the established Sungai Chua industrial area near Kajang.

Aside from these three mid-market developments, in the pipeline is the launch of its boutique hotel and serviced residences project in Jalan Kia Peng, within the Kuala Lumpur City Centre (KLCC). This 30:70 joint development project between Ireka and Aseana Properties Ltd is slated for launch in the second half of next year.

On the overall market, Lai says launches and sales take-up rate will be generally slower. However, Malaysia’s property sector (will be) resilient, he says.

Property consultant DTZ Debenham Tie Leung’s executive director Brian Koh says “properties will have to be sensibly priced” with smaller units (if they are condominiums), selling better than larger ones. DTZ will be launching Naza TTDI Sdn Bhd’s Platinum Park around the KLCC area next year.

Over in the office segment, the current glut is expected to persist into next year which will put pressure on rentals.

The overall view of property professionals is that the office market in Kuala Lumpur will remain soft next year unless the global economy recovers sufficiently to spur business expansion to take up the current supply in the city. With the eurozone the way it is, that seems unlikely.

Y. Y. Lau of YY Property Solutions expects Grade A office buildings in KL (existing and new) to face intense competition to secure tenants next year.

“Demand for prime Grade A office buildings held up well last year. But we are expecting an estimated five million sq ft of office space to come onstream in the Kuala Lumpur Commercial Business District and city fringes by end-2012, with KLCC and the Golden Triangle area providing over 90% of the new supply in the first half of next year. “In the second half, the bulk of the supply will be coming from the fringes of Kuala Lumpur.

“We opine that KL Sentral, Bangsar South and Mid Valley City will play a catch-up game in attracting eminent companies seeking MSC status and green building features, as well as conveniences in terms of availability of public transportation, ample eateries and amenities, and upgrading of corporate image. Good building quality and property management services provided are expected to attract companies to set up its businesses here,” Lau says.

SOURCE: The Star

BEGINNING tomorrow, new guidelines from Bank Negara Malaysia to curb rising household debt are going to kick in. The guidelines cover all consumer loan products including housing, personal and car loans, credit card receivables as well as loans for the purchase of securities.

Instead of loan approvals being based on gross pay, they will be based on net pay, after income tax, social security deductions and the Employees’ Provident Fund contributions. These are the three main items. The objective of this ruling is to reduce the household debt which has been on the rise.

In all likelihood, property sales will be affected but what is interesting is, how this ruling will affect an increasingly younger generation of buyers who are entering the market for the first time.

In the last 24 months, developers have seen a new group of buyers. They are young and aggressive, upbeat and have a huge appetite for risk. Many of them are in their 20s or early 30s. Many buy with joint names and they are not related to each other. They buy studio units and two-bedroom condominiums, with a built-up of between 600sq ft and 800sq ft with a price tag of averaging RM500,000. When the mortgage payment kicks in, that RM450,000 loan (based on a 10:90 scheme) will equate to a monthly repayment of about RM2,500.

A developer says this scenario is due to a combination of factors. The steep rise in property prices the last two years, coupled with the gains, have spurred this young group of buyers to take on the responsibility of shouldering this long-term commitment.

More than 10 years ago, during the stock market bull run of the 1990s, the market was on an uptrend for a good number of years before the Asian Financial Crisis hit the region. At that time, many young people, including college students, began dabbling in the stock market. Just as that period prompted young people to learn about stocks, the last two years have introduced them to another investment instrument. The difference between the two is the outlay, and the duration of that commitment with stocks needing a smaller capital and more liquid.

Developers say there are essentially two groups of young people who have entered the market in the last two years. The first group are those who, seeing the gains made by earlier purchasers, enter the market with the objective of making a quick gain. Another group ventures into the market before prices go up further and they plan to hold the property for the longer term.

A major factor that encourages this group of aggressive young buyers is the availability of easy credit. The introduction of the 10:90 schemes induces them to make the decision. Many of them hope they will be able to flip that property on completion and make that 25% to 30% gain.

For this group who are buying to flip, they may find the gains not worth the while for the simple reason that the premise of making a 25% to 30% gain is based on a rising market. Prices are today stabilising and there is a glut of high-rise condominiums.

Lawyers and property professionals say investors are unlikely to make that 20% gain going forward. Furthermore, the 5% real property gain tax will also shave off gains. In the event they are unable to off load their units fast enough, they will have to rent them out, but they may encounter another problem – a glut of condominiums and few tenants.

SOURCE: The Star

The Wave, an upcoming serviced residence development located in Penang Times Square, Georgetown. Extraordinary and surprising facade design, elegant sun protection stripes corrugate around the glazed body, rhythmatically arranged around each floor to give the impression that waves are going over the building.

The residential component comprises 312 suites covering 27 floors while the remaining 11 storeys of podium are made up of car parks, facilities floor and a four-storey commercial component for retailing purposes.

Property Project : The Wave @ Penang Times Square
Location : Penang Times Square, Georgetown, Penang
Property Type : Serviced Residence
Built-up Area: 1,205 – 2,540 sq.ft.
Total Units : 312
Land Tenure: Freehold
Developer : Ivory Properties

DNP Land Sdn Bhd will spend RM10mil on a chic and trendy-looking community clubhouse within its upcoming Jesselton Hills mixed development project in Alma, Bukit Mertajam.

Its northern region general manager K.C. Tan said property owners in the residential scheme would not be charged any membership fee to use the facilities.

“We will only collect a small amount in annual subscription fees from house buyers who wish to use the clubhouse facilities.

“We will also waive their subscription fees for the first two years upon purchasing their unit,” he said during a recent sneak preview of the clubhouse at the DNP Land’s Impiana sales gallery on Jalan Rozhan in Bukit Mertajam.

Believed to Penang’s first stand-alone clubhouse within a housing scheme that is tailored to the needs of its residents, the eco-friendly clubhouse, which overlooks a man-made lake, would be managed by DNP Land itself.

Tan said construction work on the 4 1/2-storey clubhouse, located on a 0.8ha plot of land in the project site, would be completed in two years.

Among its main facilities are a 25m-long swimming pool that is half an Olympic-size pool, a badminton hall with three separate courts, two squash courts and a restaurant that could accommodate 300 people.

Tan said there would also be a multipurpose hall, function hall, gymnasium, Jacuzzi, cafetaria, rooftop terrace-cum-barbeque pit, a skybar, convenience store, clinic, hair salon, library, children’s play area, outdoor fitness station, jogging trails and lake garden.

“We have also allocated rooms to conduct tuition lessons so that residents need not travel far to send their children for such classes,” he said.

Architect Chan Mun Inn from Design Collective Architecture Network Sdn Bhd said the clubhouse was designed to have ample natural light from the sun as well as minimal usage of air-conditioning.

He said the clubhouse layout, which included a basement car park, would be submitted to the Green Building Index under Malaysian Institute of Architects to be certified as a green building.

Chan said that his company, which earlier renovated and turned a double storey link house into DNP Land’s Impiana sales gallery, had won the Malaysian Interior Designers’ Institute’s best design award for the building under the Exhibit and Gallery category in October.

Jesselton Hills, sprawled over a 48ha plot of land, would have 900 housing and commercial units comprising bungalows, semi-detached houses and super-linked housing units.

SOURCE: The Star