Sunway buys PJ land for RM286mil

Conglomerate Sunway Bhd is boosting its land bank close to its flagship development Sunway township by buying 17 acres worth RM286mil.

The parcel, which is situated next to Western Digital in the Sungei Way Free Trade Zone, works out to about RM386 per square foot.

It is believed to have belonged to a politician who used to be active in the 1980s in Selangor and his partner.

With the acquisition, the company plans to roll out a mixed project that entails service apartments and retail shops, with a total gross development value of RM1.8bil.

Sunway said the purchase from a private company, Kelana Resort Sdn Bhd, was in line with its target to buy land ready for immediate launch. It expects the first launch of the project to be in the financial year ending Dec 31, 2016, with a development period of five years.

Sunway said the residential units would be designed to capture the view of the 18-hole golf course of Kelab Golf Negara Subang and a 15-acre water retention pond.

It planned to improve the pond’s landscape by working with local authorities.

“In addition, the land is located about 600m from the Setia Jaya KTM and Bus Rapid Transit Sunway Line stations which provide residents access to public transportation networks to Kuala Lumpur City Centre, Subang Jaya, Sunway Resort City, Shah Alam and Klang,” it said.

The Lebuhraya Damansara-Puchong is on the northern boundary of the land.

Much of the 17 acres is leasehold while 0.2 acre is freehold.

The land was purchased through an open tender. It took into consideration the development potential of the land, which met its required internal rate of return.

“Given Sunway’s knowledge of the market value of the surrounding properties and the potential development value of similar land within the vicinity, i.e. Kelana Jaya, no valuation was carried out on the land,” it added.

It will buy the land through bank borrowings and/or internally generated funds and expected the acquisition to be completed by the second half of the year.

Sunway’s net gearing stood at 0.3 times as at end-December 2014.

“Properties in Petaling Jaya are welcomed due to scarcity of land and continuous population growth. Petaling Jaya, being one of the most developed areas in terms of population and economy, has long been an area of focus by Sunway.

“Sunway is confident that the project will receive positive response when it is launched,” the company said.

It had conducted a feasibility study before bidding for the land while it also studied surrounding projects to assess the viability of the project.

Other nearby integrated projects include WCT Holdings Bhd’s RM1.8bil Paradigm commercial development and Mah Sing Group Bhd’s RM3.2bil Icon City.

Paradigm at Kelana Jaya consists of a shopping mall, corporate offices, serviced residences and hotel suites.

Meanwhile, Icon City, located at SS8, Petaling Jaya, comprises serviced apartments, retail shops, mall, offices and hotel on a 20 acres.

Sunway closed 1 sen lower to RM3.40 with a market cap of RM5.94bil.

2014 Q4 Residential Property - Stock vs Construction

Statistic for selective state: Existing Stock vs Under Construction

Notably Increase of Supply for Service Apartment in a few states:

KL        96%

Selangor  83%

Johor    384%

Penang    85%

Melaka   601%

Notably Increase of Supply for Condo in Johor at 48% & Negeri Sembilan at 50%.

Statistic for all State.

去年房市总值扬13.5% 增幅胜6%经济增长率

2014年房地产市场报告

（加影14日讯）大马去年的房地产市场总值扬升13.5%，增幅更胜我国经济去年6%的增长率。

2014年房地产市场报告指出，2014年大马经济增长6%，促使我国房地产市场成交量去年增长0.8%，市场总值则上扬13.5%。

末季消费者情绪指数低

报告指建筑领域在2014年的增长率达11.6%（2013年为10.9%），符合在所有次领域建筑活动增加的趋势。该领域获批准贷款的增长率为0.3%（2013年为负10.5%）；已发放的贷款增长率则是12.7%（2013年为14.8%）。

报告指出，2014年第四季的消费者情绪指数（CSI）为83点，属于四季中最低点，2013年相关指数为104.3点。这是因为消费者就工作及财务有疑虑，导致在家庭财务上仍持谨慎情绪。

另外，马币贬值及油价大跌，促使大马经济研究院（MIER）在2014年第四季的商情指数（BCI）滑至86.4点。

“大马经济研究院的趋势影响了商业房地产次领域的信心，其交易量只微升3.6%，交易额则下跌10.5%。”

报告说，稳定的出口导向型行业，特别是电子与电器产品（E&E）业促使制造领域在2014年表现较好，增长率6.2%（2013年相关比率为3.5%）。

农业领域2014年的增长率稍长2.6%（2013年为2.1%），原因是首三季的棕油生产量增加。

首10月游客增9.6%

农业产业的市场活动增加2%，但市场价值下跌4.2%。

在休闲次领域方面，根据2014年万事达卡全球旅游城市排名，吉隆坡在仍位居在全球最多人到访的十大城市名单内。

报告指虽然我国面对航空事故，但2014年首10月来马的游客达2290万人次，同比增加9.6%。

去年房产表现微增

根据2014年房地产市场报告，我国产业市场去年的整体表现稍微增强，共达成38万4060宗交易，呈交总额为1629亿7000万令吉，分别同比增长0.8%及7.0%。

报告指住宅次领域主导产业市场，贡献达64.4%。依序为农业次领域（18.8%）、商业（9.3%）、发展地皮（5.5%）及工业（2.1%）。

价值方面，住宅产业占50.4%。其他为商业（19.5%）、发展地皮（13.3%）、工业（8.9%）及农业（7.8%）。

报告说，比起2013年，所有次领域在2014年的交易量移动幅度不大，住宅、商业及农业方面的次领域增长率分别为0.4%、3.6%及2.0%。工业及发展地皮次领域的增长率则分别下跌3.8%及1.9%。

2014年住宅、工业及发展土地次领域的交易总值增长率呈双位数，分别为13.9%、17.7%及13.5%。商业及农业次领域交易价值成长率则分别下跌10.5%及4.3%。

冷却措施奏效
房价涨幅放缓

政府自2010年落实的打房措施奏效，尽管房屋价格在去年依然有增长，但房价涨幅已开始放缓。

蔡智勇指出，政府重新征收产业盈利税，并且控制贷款对估值比率（LTV），同时也提高外国人购买产业的底价至100万令吉及废除发展商承担利息计划（DIBS）。

“政府所采取的这些‘冷却’措施已奏效，大马房屋价格指数开始出现下跌。”

需平衡多方面

在2014年第四季度，房价指数为213.1%，全年增长7%，比起2013年第四季度的9.6%增长和2012年第四季度12.2%的增长，已出现放缓。

询及大马房地产发展商公会对政府的打房措施喊苦一事，蔡智勇指出，尽管了解到发展商希望尽量售出其单位，但政府也需要在多方面取得平衡，包括确保家庭债务受控制、减少投机及控制屋价。

“现在已有很多人买不起房子，所以政府才要落实打房措施，因为房地产市场过热会引发许多问题。”

谈及对于今年房地产市场的展望，蔡智勇说，我国今年的经济增长预计介于4.5%至5%，加上我国的低失业率及吸引外资的能力，相信今年的房地产市场依然正面发展。

“虽然消费税的落实导致消费者更加谨慎开支，但预计市场大约需要半年便可适应。”

另一方面，蔡智勇指出，从《2014年房地产市场报告》中可了解，我国人民对可负担房屋的需求很高，2014年20万至50万令吉的住宅产业交易额达10万2082项，同比2013年的7万4153项交易增加超过2万7000项交易量。

雪柔霹交投大户

2014年房地产市场报告指出，去年住宅产业次领域的市场稳固，新产业表现一般，已建成房屋卖不出的情况也逐渐改善。

报告指住宅产业去年共有24万7251宗交易，交易价值达820亿6000万令吉，其交易数量及价值分别同比增长0.4及13.9%。

雪州、柔佛和霹雳是去年住宅产业交投的3个大户，全国24万7251宗交易当中，雪柔霹三州各占24.6%、15.8%及11%。不过，雪州与霹雳所占比率双双出现下滑迹象，分别比2013年下降了5.2及3%。

柔佛及槟城的住宅产业则维持正面增长势头，分别增长15.9及4%。

去年房地产交易方面，20万令吉以下房屋及20万至50万令吉之间房屋的市场分额差不多，分别占43.1%及41.3%。

50万至100万令吉房屋及100万令吉以上房屋的市场分额也有上升，分别为23.2%（2013年为20.1%）及16.2%（2013年为20.6%）。排屋数量占市场份额41.4%，公寓在占12.6%。

销售表现率5年最好

报告指发展商去年对房地产市场保持乐观，共推介6万8351个新单位。相关销售表现率为44.7%，属于5年来最好表现。

雪州、吉隆坡及柔佛推介最多新房屋。

针对已建成但卖不出的房屋，2014年相关数量降低至1万1816个单位，价值为40亿4000万令吉，分别同比降低12.8%及15.9%。不过，正在建设及未出售的房屋数量则增加了6%。

在商用产业方面，2014年总交易量为3万5528宗，同比增长3.6%，但成交总值同比跌了10.5%（318亿4000万令吉）。

Catalysts for market growth

Sobering drive on the Sri Damansara-Sg Buloh-Kota Damansara loop

SIX months ago, developers and certain property consultants were of the view that just before the implementation of the Goods and Services Tax (GST), there would be “a rush to buy”. In about ten days’ time, the GST will be upon us. No signs of the buying, though.

Instead, there is a sporadic “rush to sell”. What we have today is a “flat and stagnant” residential market, property consultants say.

Property consultants polled say activities will return in October/November or maybe next year.

PA International Property Consultants (KL) Sdn Bhd head of agency Wendy Tong says “the real impact of the GST, coupled with other forces, will be seen early next year”, with less activity in both the primary and secondary markets this year.

In a couple of months, Perdana ParkCity Sdn Bhd will be launching the Westside III condominium at about RM720 per sq ft (psf) in Desa ParkCity. It will be priced lower than Central Park, another condominium project in that location. Central Park is currently 85% sold and averages more than RM800 psf. Of course, the specifications will be different.

Says Tong: “Sales in Desa ParkCity are no longer as brisk as before. There are only so many units you can buy in that location. With prices at RM1.5mil, most will opt for landed property.”

Across the highway, over in Sri Damansara, the Land & General group is selling Damansara Foresta phase one, comprising about 1,000 units priced at about RM800 psf. There will be four phases and a total of 2,700 units upon completion. These two projects are being compared because they are separated by a highway. In the last ten years or so, Desa ParkCity has been a catalyst for the larger Menjalara and Kepong area. It has put a name to what used to be a rather nondescript area.

Incidentally, Central Park by Perdana ParkCity, which is 85% sold, is now being promoted at a 20% downpayment with the rest upon completion in 2017. A sign of the times.

Raine & Horne’s associate director James Tan sums up the overall residential market: “The GST is causing a lot of uncertainty.”

While a necessity because Malaysia cannot continue to have only about one million taxpayers in a country of 30 million, there are concerns about the rise in food prices, education, transportation and medical expenses, says Tan.

“If they cannot take care of these daily necessities, they will not think of buying a big-ticket item like a property,” he says.

Added to this are the wages/salary levels. The Statistics Department, in its Salaries and Wages Survey Report 2013 released in August 2014, reported that the mean and median monthly salaries/wages for individuals for 2013 was RM2,052 and RM1,500, respectively. The median salary of non-citizens, meanwhile, was less than RM980. This information was obtained from 9.3 million participants.

The median income refers to the income that is in the middle if you figuratively wrote down all the income in order from the least to the greatest. In essence, not more than half the population has a greater or lesser income than the median income. The average is simply adding all these incomes together and dividing it by the number of incomes.

Those with tertiary education had a mean monthly salary of RM3,407 (2012: RM3,214) and a median salary of RM2,940 (2012: RM2,700).

In a report by Khazanah Research Institute in November 2014, the Malaysian median household income was at RM3,626 in 2012. These numbers are consistent with the Employees Provident Fund (EPF) data, which shows that 62% of active EPF members earn less than RM2,000 a month, while 96% earn less than RM6,000. With salaries not growing as fast, GST and inflation will reduce the ringgit’s buying power.

“Your fixed cost - which goes towards paying for food, transport and utilities - will increase, while your salary remains near-stagnant. With the drop in the ringgit, the affordability level of the people will drop even further. The rich will not feel it, but the majority (as the EPF figures show) will,” says Tan.

At the end of the day, a household will be able to buy less with the income it earns. This, says Tan, will affect the returns on commercial property.

Tan says although the GST will contribute to Government revenue, it must be spent in the right way. Otherwise, it will be like filling a pail with holes in it, he says.

This, however, does not mean the property market will not be profitable. On the contrary, PA International’s Tong says she has a handful of clients waiting for owners who will be financially challenged when it comes to servicing their housing loans.

Says Tong: “The location and type of properties are important factors. Interest in Mont’Kiara properties, particularly the older ones, has picked up in the last two years because they are priced lower on a per sq ft basis.

“They buy in strategic locations and are interested in shophouses.

“When the market is good, people make money. When it is bleak, some may make more money,” she says.

Kwasa Land and the MRT, a catalyst

Just as Desa ParkCity is a catalyst to the Kepong/Menjalara area, a new catalyst is in the making in Sg Buloh. As one drives along Jalan Kuala Selangor-Kepong towards Sg Buloh, Tan & Tan Developments Bhd is offering 41 units of landed villas - or triple-storey terraces - in a seven-acre plot known as Park Manor, next to Sierramas East. Prices begin from about RM4mil. Sizes range from 5,500 sq ft to 7,000 sq ft and all of them come with lifts. Irrespective of size, maintenance is set at RM950 a month.

Sierramas is about 20 years old today. While not as central as Bangsar or Damansara Heights in Kuala Lumpur, it does have a following. As development continues on to the fringes, different classes of property have popped up, catering to different tastes, budgets and strata of society, and none is more obvious than in this Desa ParkCity-Sri Damansara-Sg Buloh loop.

There are currently two catalyts along Jalan Sg Buloh-Subang highway – the mass rapid transit (MRT) and the Kwasa Land development. This will benefit SqWhere by SDB Properties Sdn Bhd and D’sara Sentral by the Mah Sing group. Both offer similar components, namely, serviced apartments, retail shops, and small office-virtual office (SoVo) units. Both are connected by the same link bridge to the Kg Baru Sungai Buloh MRT station.

SqWhere SoVos were sold exactly about a year ago at an average price of about RM750 psf. Its 328 units of serviced apartments are scheduled to be launched by the middle of this year at an average price of about RM800 psf. The entire project is expected to be completed in 2018, one year after the MRT is operational.

Mah Sing is also planning to launch Phase 2 of D’Sara Sentral soon, with prices at about RM700 psf. There will be about 1,000 units of SoVo and serviced apartments there.

The comparison between SqWhere/D’Sara Sentral and Tan & Tan’s Park Manor underscores the vastly different classes of property in this location. The objective of this comparison also brings into focus the prices in Sg Buloh and Desa ParkCity/Sri Damansara. At the end of the day, it is the absolute price that matters, and this brings us to the sizes of the units. The smaller the unit, the more affordable it is.

Security will be Desa ParkCity’s main selling point, while the MRT will do the same for SqWhere/D’Sara Sentral.

The other catalyst will be the Kwasa Land project by the EPF and Malaysian Resources Corp Bhd. The roads leading to and away from SqWhere/D’Sara Sentral and Park Manor are rather congested at present. However, perhaps in time to come, the infrastructure will improve.

Along this stretch of the Jalan Sg Buloh-Subang highway, nurseries are licensed to occupy land on a temporary occupation licence, which means in time to come, the land will revert to their respective Government departments or agencies, says Tong. Therefore, the potential for growth is there.

Dataran Sunway and the Curve

Following the MRT line - which tracks the road system - the next township is Kota Damansara.

PA International head of research Evelyn S L Khoo says Kota Damansara, between 4km and 6km from Kwasa Land, is another densely populated area, with a population of more than 500,000. The catalyst was Dataran Sunway in its early development.

Today, there are many high-rise condominiums and apartments there. It is not as dense as Mont’Kiara, but is getting there. But the crowd it draws is different. And although there are high-rise units, they are of a different level and ambience. It is the tenant’s market here, and more so with the completion of the MRT line, says Khoo.

“It took a bit of time to pick up, but it did. As a result of the MRT, prices grew exponentially. Some of the units there were launched at about RM200 psf, with the absolute price being less than RM300,000. Today, prices have risen above RM600,000. However, owners may be reluctant to sell because at RM600,000, what can they buy?”

As a result of the MRT station opposite Sunway Nexis, the interest has been great, says Khoo. While families may not want to live amid all that traffic in that location, it offers a lot of convenience. And the 1 Utama shopping centre and The Curve in Mutiara Damansara are not too far away.

The Curve has been a huge draw and the progress in this part of Petaling Jaya has been driven by these catalysts, says Khoo. But as much as these amenities are an attraction, increasingly, growth and congestion is becoming an issue. This explains why many are looking forward to the MRT when it becomes operational.

The roads heading towards and leaving Sri Damansara are congested at present. The same goes for Sg Buloh.

Another new development – Empire City by the Mammoth Empire group along Lebuhraya Damansara-Puchong – will be ready soon. Located on 25 acres, there will be a huge number of high-rise residential units, a retail mall, offices, hotels and offices there. It will add to the congestion.

Growth has to be balanced with better infrastructure, of which the MRT is one. Likewise, the GST has to be balanced with realistic growth in income. Otherwise, affordability will always be an issue, even in the high-growth Sri Damansara-Sg Buloh-Kota Damansara loop.

Melbourne’s urban renewal projects

AUSTRALIA has long been a favourite destination for Malaysians, be it for education, vacation, business or migration. Melbourne, in particular, has emerged as the preferred city for not just Malaysians but also Asians in general.

Last year, Melbourne was named the world’s most liveable city for the fourth year in a row by the Economist Intelligence Unit. Victoria’s capital city has a population of 4.3 million and for the year ended June 30, 2013, it saw the largest population growth of 95,500 in Australia.

A large part of the population growth was driven by international migration. Melbourne is expected to overtake Sydney as Australia’s largest city by 2050.

“We are the fastest growing city state in Australia. In 2013, we had 110,000 new arrivals to the state, or roughly 2,000 new arrivals each week. They will need housing, they are going to be taking public transport or driving. So, we have to be able to accommodate that need and ensure Melbourne remains a liveable city,” says Tim Dillon, commissioner for the state government of Victoria.

With this in mind, the Victorian government developed Plan Melbourne to guide the city’s housing, commercial and industrial developments through to 2050 and integrate long-term land use, infrastructure and transport planning to meet the population, housing and employment needs of the future.

The government has already allocated up to A$24 billion (RM68.4 billion) for new transport infrastructure projects and announced three urban renewal projects — the 20ha E-Gate, the 3.3ha Federation Square East and, the largest urban renewal project in Australia, the 240ha Fisherman’s Bend. To accomplish the objectives set out in Plan Melbourne will require significant investment from the government. However, government and domestic investments will not be enough to realise the plan.

“We need to put in place infrastructure to cater for the growing population and also house them, so we need developments. Frankly speaking, we don’t have enough capital just in Australia to do all that. We need outside capital and I think savvy Malaysian and international property developers are seeing this and spotting the opportunities,” says Dillon.

He notes that as Southeast Asia and Malaysia grow economically, companies and individuals’ wealth has also increased.

“Companies are starting to outgrow the domestic economy and market. In order to maintain their growth, they are looking for opportunities abroad. Most will likely see Australia and Melbourne as safe investment environments — we have had 22 years of continuous economic growth. I think that is attractive to growing companies looking to expand abroad,” says Dillon.

Malaysian developers already have a presence in Melbourne. These include S P Setia Bhd’s Fulton Lane and Parque Melbourne, UEM Sunrise Bhd’s upcoming Aurora Melbourne Central and Magna Prima Bhd’s The Istana.

“We have seen a huge amount of interest from Malaysian developers over the past two years. I have been stunned by the amount of investment going into Melbourne from developers from Malaysia, Singapore and China,” Dillon remarks.

A new benchmark

The largest of the three urban renewal projects, Fisherman’s Bend is located to the south-west of Melbourne’s central business district (CBD). Fisherman’s Bend is expected to be home to at least 80,000 residents and create at least 40,000 jobs. It aspires to set a new benchmark for an inner-city, family-friendly living environment that supports a diverse and connected community.

“The vision is to have a very compact offering in Fisherman’s Bend comprising residential, offices and retail. It’s going to be a place where people can work, live and enjoy life,” says Dillon.

According to him, the Victorian government recently announced a rail link between the city and the airport, and the city link will be stationed in Fisherman’s Bend.

“The rail links are being connected. We will have schools and parkland as well. The idea is that people should be able to work close to where they live, so they wouldn’t be spending so much time commuting, which is a major inhibitor on productivity. Long commuting time makes it hard to have work-life balance. So, being able to get all your services and needs close to where you work makes life more pleasant,” says Dillon.

The area is currently an industrial precinct with some houses. The plan is to move the industrial precinct further out of the city centre and redevelop Fisherman’s Bend into an urban centre given its close proximity to the CBD (about a distance of 4km).

“Fisherman’s Bend is prime land and it makes sense for us to redevelop the area. A decade or two ago, it was harder to move the industrial precinct further out of the city because we didn’t have the connectivity then. We have invested in a lot of infrastructure over the years, so now the industrial precinct can be supported.

“We should be using land close to the city for homes and value-added businesses such as services, financial and fund management, which is the largest business in Australia. We just surpassed A$2 trillion funds under management, the fourth largest in the world,” says Dillon.

Many fund managers are based in Melbourne and Dillon says it is supported by a stream of high-calibre financial and accounting business graduates from Melbourne’s universities.

The draft vision for Fisherman’s Bend Urban Renewal Area dated November 2013 said the project is expected to deliver almost A$2 billion of private investment and create 13,500 construction jobs.

The Strategic Framework Plan (SFP) for the area by the Metropolitan Planning Authority adopts four key elements: a street network, sustainable transport, open spaces and a series of places — centres of vibrant mixed-use activity.

A new underground station in Montague, which is part of the Melbourne Rail Link project, will be a major catalyst for commercial and residential developments in the area. New tram and bus routes are also being planned and will be integrated with Montague Station and the central city.

The projected 40,000 jobs will need new space for office, retail, tourism, education, health and cultural activities. A variety of housing such as high-rise, high-density residences, in the in accessible locations, three to four-level apartments and townhouses will be needed to accommodate the anticipated 80,000 residents.

The main retail spine will be in Plummer Street Civic Boulevard while the Montague Station district will be the principal commercial and retail centre. Secondary centres are in Buckhurst Street (Montague) and Lorimer Urban Village.

Fisherman’s Bend will initially be built around three places — The Civic Boulevard, Lorimer Urban Village and Montague Urban Village.

The Civic Boulevard precinct, which sits in the Sandridge and Wirraway areas, will support the primary transport route for Fisherman’s Bend. It is slated for mixed-use developments with ground floor retail and high-density residences above as well as higher order community facilities.

The SFP also asked for the building plates to be flexible — adaptable for office, retail and/or entertainment uses to be clustered around future transport hubs — to allow the boulevard to evolve into a fully activated high street that can serve as an extension of Collins Street.

Lorimer is envisioned as a modern commercial and residential hub, which will be enhanced by Lorimer Parkway, a central linear green link. Lorimer’s village centre will be situated in the heart of the parkway and complemented by a range of new urban housing models. As Lorimer is directly adjacent to the CBD, Docklands and Southbank, it is expected to see development early in the renewal project.

Lastly, Montague will be a high-density commercial and employment hub located around the new Montague Station and will have substantial housing. The southern section will have a more traditional urban structure, with Buckhurst Street set to become the neighbourhood high street and heart of Montague. The most significant housing growth is expected to be in Buckhurst Street and the north side of Thistlethwaite Street as the lot sizes there are more appropriate for high-rise developments.

“The government has in place a plan and guideline for Fisherman’s Bend but it doesn’t own the land. So, it’s up to the developers to come in and determine the opportunities, purchase the land and build the development. The government has a vision, we don’t want 50 schools or 50 hotels. We have to make sure there is a balance in the offerings,” says Dillon.

It will be up to the developer to approach the owner of the parcels they are interested in and negotiate a deal. While Dillon acknowledges that it can be a challenge to find the right parcels as there is a mix of large and small parcels, he says the landowners have been generally receptive.

“What we are doing is unlocking the value of the land for the landowners. We can build more upmarket developments, which will extract more value from the land. I think overall they are happy. Obviously, some will need to think about their businesses and strategies moving forward and determine where they need to be. So far, the government’s approach has been welcomed.”

The renewal project is already generating interest. Dillon recalls meeting a Chinese developer during a trip to China recently who told him that his company had just acquired a large parcel in Fisherman’s Bend for development.

Dillon advises interested parties to do market research on the land prices, get advice from accountants and lawyers, and have discussions with the government early.

“It’s up to the developer to decide what to build but it is subject to the guidelines. On our end, we have agencies such as Invest Assist to help facilitate and manage investment projects. Our office in Kuala Lumpur can help developers get the required information and connect with the relevant agencies. We also have a strong team of architects and local consultants who can help with feasibility studies, if needed,” says Dillon.

Federation Square East and E-Gate

The other two urban renewal projects are smaller in scale and less complicated than Fisherman’s Bend as they are both government-owned land.

E-Gate sits on the edge of the CBD, about 4km from the city centre. It is adjacent to the communities of Docklands and West Melbourne, bounded by Footscray Road, Dudley Street, the North Melbourne Rail Corridor and Moonee Ponds Creek.

Currently an underutilised rail yards site, E-Gate will be a mixed-use, inner-city precinct comprising retail, residential, commercial and community uses. It will capitalise on its close proximity to the North Melbourne Railway Station, CityLink, tram and bus lines, and the Capital City Trail. There will be a new bridge connecting the site with North Melbourne Station, and West Melbourne will provide primary access to the Metropolitan rail network.

E-Gate is expected to bring in A$3 billion to A$4 billion worth of investment to the state and generate more than 5,000 jobs in construction over a period of 20 to 25 years. Expression of interest to develop the site was released on Oct 27, 2014, and will end on Feb 19, 2015.

“The other project — Federation Square East — is very centrally located, close to Flinders Station. It’s a beautiful location and very close to our sports precinct. There is major opportunity there for hotels, retail and tourism offerings,” says Dillon.

The mixed-use project will revitalise the north bank of Yarra River and better connect the CBD with the city’s cultural, sports and entertainment precincts. It is bounded by Federation Square/Russell Street to the west, Flinders Street to the north, Batman Avenue to the east and Birrarung Marr to the south.

Out of the 3.3ha, about 2.3ha is above rail lines and 1ha is mainly used for parking. Expression of interest was opened on Sept 15, 2014, and closed on Dec 11.

“One of the Victorian government’s priorities is to make Melbourne Asia’s most connected and capable city. One of the things that define our city is our multicultural community. There is more than 150 different languages spoken daily in Melbourne. The future is strongly leaning towards Asia, that’s where the growth is happening and where the future multinational companies will come from,” says Dillon.

“The key role of our office in Kuala Lumpur is to engage companies looking to expand abroad. We want them to consider Melbourne as an option for future growth and investments. And we will have a full range of correct and detailed information about Melbourne to help them make that decision,” he concludes.

Affordable housing should be priority of state agencies, GLCs

State economic agencies and government-linked companies should cater to affordable housing for the masses and not embark on “profit-making” ventures.

National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong (pic) said these agencies were set up by the federal and state governments to ensure the well-being of the people, including providing housing for the majority of population.

“They are guardians of the land alienated to them and they must understand their objective. It is not to embark on making money,” he told The Star Online when asked to comment on the recent protest against the construction of the Datum Jelatek luxury condominium in Keramat, Kuala Lumpur.

The condominiums are being built on the former site of four blocks of Perbadanan Kemajuan Negri Selangor (PKNS) flats that were demolished in late 2010.

Chang said economic agencies should not be competing with private developers, whose main aim was to seek profit.

“Private developers are there for the profit and are not charitable organisations. House prices have gone up drastically in the past three to four years. The majority of people aren’t able to afford them,” he said.

The protesters, led by Datum Jelatek action committee chairman Salleh Samad, claimed that the project would not benefit Malays, as the RM700,000 per unit price was beyond their reach.

PKNS, however, said that a total of 1,097 potential bumiputra buyers registered their interest in the 674 Datum Jelatek condominium units.

Housing affordability, which is based on the ratio of average terraced house price to average household income, has worsened over the past five years, according to Rahim & Co, Chartered Surveyors Sdn Bhd.

In its survey of the Malaysian property market 2014/2015, the ratio increased from 3.4 in 2009 to 3.6 in 2012 and 2014.

HBA had previously called for government intervention to prevent a “homeless generation” of young adult Malaysians from emerging.

Tribunal to ensure implementation of Strata Management Act

A tribunal to manage the Strata Management Act 2013 (Act 757) needs to be formed to ensure the Act is run smoothly.

Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan said this tribunal needs to be formed especially in Selangor, where 50% of the people lived in high-rise units.

"I have informed Mentri Besar Mohamed Azmin Ali that his state assembly needs to pass a resolution for the appointment of chairman, deputy chairman and tribunal officials who will be hand-picked by my ministry as stated in the Act," Abdul Rahman said after meeting Azmin here today.

The ministry has also agreed with Selangor's requests on appointing those who are living in the state to represent the tribunal.

"As long as the candidate is eligible and fulfils the criteria, then there should be no problem," Abdul Rahman said.

The Strata Management Act 2013 will come into force on Jan 1.

Meanwhile, Mohamed Azmin said Putrajaya and the state government need to cooperate to ensure the smooth sailing of the act.

"We welcome government initiatives to standardise the act. As a modern state, Selangor has a lot of high-rise buildings and we need the assistance of the federal government to ensure this act is implemented smoothly," Azmin said.

He added that this act will safeguard the interests of buyers, tenants and owners of the buildings.

The Strata Management Act will replace the Building and Joint Property (Management and Maintenance) 2007 (Act 663) and Strata Ownership Act 1985 (Act 318).

Enforcement of Strata Management Act to be announced soon

The enforcement of the Strata Management Act 2013 (Act 757), which replaces the Building and Common Property (Maintenance and Management) Act 2007, is to be announced soon.

This was decided at the 69th meeting of the National Council for Local Government chaired by Deputy Prime Minister Tan Sri Muhyiddin Yassin here today.

Urban Well-being, Housing and Local Government Minister Datuk Abdul Rahman Dahlan and Deputy Minister Datuk Halimah Sadique also attended the meeting.

According to a ministry statement, the enforcement of Act 757 would have a positive impact and significance for millions of residents living in strata-title buildings who make up 30% of the country's population.

"To ensure their comfort and well-being, the management of the building must attain the high standard set, including through Act 757," said the statement, which was issued after the meeting.

With the enforcement of Act 757, a Strata Management Tribunal would be set up to help resolve problems or disputes among residents and interested parties simply, quickly and cheaply.

The statement said setting up the tribunal needed the approval of the state legislative assembly for the appointment of the chairman, deputy chairman, members and staff.

The meeting also agreed that the enforcement of the Strata Management (Maintenance and Management) Regulations would be done at the same time as the enforcement of Act 757.

The meeting today also unanimously agreed on applying the Malaysian Private Entities Reporting Standards (MPERS) as a foundation for the financial preparations of the Strata Building Management authorities in peninsular Malaysia and the Federal Territory of Labuan.

The meeting also agreed on the Island and Marine Park Physical Development Planning Guidelines, which are a review of the Island Physical Development Planning Guidelines published by the Town and Country Planning Department in 1996.

The guidelines, among others, assist the state governments, local authorities and developers manage, control and develop island areas in the aspects of placement and density as well as permitted and prohibited activities. 

‘Challenging year’ for housing industry

REHDA’S Datuk Ng Seing Liong does not think the property sector is coming to a halt any time soon.

“The population doesn’t permit a total slowdown. There is still a huge demand for affordable housing. Statistically, we still need another one million to 1.5 million houses so we have not reached that stage on affordable housing yet,” he says.

But he admits that 2015 is going to be a “challenging year” for the housing industry.

“The economic signs are all there because of the depreciation of the Malaysian ringgit, and low oil prices have affected the economy. That is why we are focused on affordable housing. This is where the people’s needs are.”

The introduction of the Goods and Services Tax (GST) in April too, he believes, will put a dent in the housing industry.

Residential property is exempt from GST but Rehda is asking for affordable housing (RM500,000 and below) to be zero-rated instead so that developers would be able to claim the input tax from suppliers for that segment instead of being asked to absorb it.

The GST will also see basic construction material like cement, bricks and sand being taxed the standard 6% GST rate. Currently, these are not taxed under the existing Sales and Services Tax (SST)

Ng is quick to point out that while some other materials in the industry have a 5% and 10% SST on them, these in fact are “not major building and construction components”.

Steel, bricks, and sand make up 44% of the construction cost and with these being charged GST, the cost is inevitably going to increase, he says.

“We anticipate that the GST will result in a 2.6% increase in house prices,” says Ng, who is chairman of the GST Task Force for Rehda (Real Estate and Housing Developers Association Malaysia).

“We are asking the government to zero rate on major components like cement, sand and bricks. The poor and rich use the same thing.”

On the Customs Department director of GST Datuk Subromaniam Tholasy pointing out that steel prices and raw material prices are coming down in tandem with oil prices, which should result in lower costs for developers, Ng says: “I won’t argue with that. But what will happen if the price of oil hits US$80 or US$100 (a barrel)?”

Recently, the price of Brent crude oil fell drastically below US$50, which is a six-year low. Last June, it was US$110 a barrel. And the price of steel too has been falling.

Ng predicts that the government would be able to make RM10bil from the GST for this year.

“I predict it will be as high as RM20bil next year because people will get more used to it. Singapore, for example, has only a population of six million and already they are collecting S$11.1bil (RM29.8bil). So it’s actually going to be big here.”

He says the GST has often been referred to as a “fairer” and “more equitable” tax.

“But some of the measures are highly prejudicial and unfair.”

If the GST is implemented in its “current form”, he says, it will cause financial hardship, add to the cost of development and increase house prices.

The industry sent a memorandum to the government a few months ago to express these concerns and Ng is still hoping that there will be changes before April.

He points out that there is actually a huge income potential the government can derive from tourists.

“There are 30 million tourists coming to the country each year. If each tourist pays RM1 in GST, that is already RM30mil. And if they pay RM100 in GST per person, how much is that from 30 million tourists? The 6% GST is not cast in stone. Why not charge 10% to 12% for the tourism sector like for the hotels?”

Wishy-washy on housing GST

Many are asking the question but so few know the answer,” quips Malaysian Institute of Estate Agents (MIEA) president Siva Shanker (pic) when asked about the impact of the GST on the housing sector.

He says he speaks for his entire fraternity of estate agents when he says they are “not 100% clear” how the GST is going to work.

“Over the last six months, I’ve attended four or five talks on the GST. Some were by accountants and one was from the (Finance) ministry but at the end of these one-and-a-half hour sessions, I was no closer to understanding what it all meant than when I first started.

“I haven’t yet met a person who can tell me with authority how it works. Everybody is wishy-washy. When I ask the accountants, they explain it but my opinion is that they are acting on theory.

“So how does it all affect the property market? We don’t know!”

Siva says that when other countries imposed the GST, there was a spike in property transactions and value in the quarter preceding the GST.

“Then the market found its own level again.”

Because he had no other data to go by, Siva says, he had previously thought this too would be the case for Malaysia – that from January to March there would be a spike in transactions in property and value as people rush to buy before the GST, much like how they would queue overnight to buy petrol before the price of petrol goes up.

“But I want to revise my own projection. I see there is so much doom and gloom for 2015 that I am convinced there won’t be a spike because the perception of gloom and doom has overridden the greed to acquire before the GST.

“How the market behaved in 2014 is pretty much the same as how it is going to behave in 2015, which means it is going to be a flat-ish market with no upward growth and no downward slide.”

Siva reveals that in 2011 and 2012, the market dropped by 4% and 5% while in 2012 to 2013, it went down by a whopping 10.9%. In 2014 it was a flat market but the figures of the second half of 2014 are not in yet.

In 2011 and 2012, he says, although the number of transactions went down, prices went up. And it was the same for 2012 and 2013.

“Transactions slowed three years in a row but prices were still going up.

“My opinion is that in 2015, the upward climb of prices has been arrested and the downward slide of transactions has slowed down. I feel the market will reach its equili­brium soon.”

For estate agents, the GST is no big deal because they have already been paying a 6% government service tax previously on their fee, he says.

“Now it is replaced with the Goods and Services Tax (GST) which is also at 6%. So for the average estate agent, life goes on without a little bump.”

For buyers, residential property is exempt from GST but commercial property is charged the standard 6%.

“It (the 6% for commercial property) doesn’t look like it’s going to go away. So people just have to bite the bullet and learn to pay for it.”

But Siva has questions about the sale of commercial property.

“If I sell you a shoplot for RM1mil, you have to pay 6% GST, which comes up to RM60,000. I am not sure who is the collection centre. I think it will be the lawyer who will collect that RM60,000 from you and remit it to the Customs Department.”

As for the estate agent, he would bill the owner of the property he just sold for a 2% commission on the sale price, which in the case of the RM1mil shoplot would come up to RM20,000, as well as 6% of that commission, which works out to RM1,200 for the GST.

“The agent collects the RM1,200 on behalf of the owner and sends it to the Customs Department.”

Siva also wonders what will happen to a residential property owned by a company if that company is sold.

“A lot of people own property but park it under a company for tax purposes or estate planning and other purposes.

“There is no GST on residential property but if I have a house worth RM6mil but say my company Siva Shanker Sdn Bhd owns it and I sell off my company for RM6mil.

“We think it’s no big deal. But the question is, does the sale of the company attract a 6% GST even though it is a residential house? I don’t know the answer to this question.”

Siva feels that with the bad things that have happened to Malaysia last year, like the MH370 and MH17 tragedies, and also the Indonesia AirAsia Flight QZ8501 crash, and the current economic uncertainties with petrol prices dropping and the ringgit depreciating, the implementation of the GST should be held back.

“We are taking too many hits at the same time. It would be a clever political move to consider suspending the GST for a while and implementing it next year or the year after.”

For now, he suggests that the Government cuts down its expenditure and rein in the wastages and excesses which are highlighted every year in the Auditor-General’s report.