Semenyih in Selangor, which has in the past been seen as a sleepy hollow, has been attracting the attention of major property players.
Semenyih is accessible from established residential and business hubs of the Klang Valley via the Kajang Silk Highway and the Kesas Highway. Increasingly, Semenyih property has become a target for people working in KL city but looking for affordable yet quality landed property in the suburbs.
Semenyih’s attraction as a property hub appeared to have gone up several notches when the new kid on the block – Eco World Development Group Bhd – launched its maiden township development, EcoMajestic (seen in model form, above), there last month.
To be spread over 440ha (1,089 acres), EcoMajestic is probably the largest gated and guarded township development in Semenyih. The massive project will have a gross development value (GDV) of RM11.14 bil.
Its initial phase offers 612 units of terrace houses with sizes of 20x70 ft, 22x70 ft, 22x75 ft and 24x75 ft, equivalent to built-up areas of 2,019 to 2,634 sq ft. Prices start at RM586,000 -- lower than in established parts of the Klang Valley.
Monday, June 16, 2014
China-Malaysia developers plan 5,000-acre man-made island off Johor
The property slowdown in China and Hong Kong is not a deterrent for China’s property developer Country Garden Holdings Co Ltd.
The company, together with Johor’s economic development arm, Kumpulan Prasarana Rakyat Johor (KPRJ), have planned for a development over 5,000 acres (2,023.43ha) of reclaimed land in a project spanning more than 30 years.
The project, which will include a man-made island, will be near the second link in Johor and a study on the matter was done more than a year ago.
In an interview with StarBiz, Country Garden’s regional president for Malaysia project Kayson Yuen said the China-based company had studied the mega project, known as “Forest City”, for more than a year before it decided to invest in it.
“We decided in the investment because the land cost was reasonable. I cannot remember the exact price but we have committed towards the project,” he said.
Yuen also stressed that the slowdown in China did not have any impact on their overseas ventures.
“This is because we are able to collect a bigger deposit for our projects in China and this helps with cash flow,” said Yuen.
In March this year, StarBiz reported that the Hong-Kong listed company was joining hands with KPRJ to build a massive man-made island near Pendas, Johor, for luxury homes.
“This will be a massive mixed development and the investment and commitment shows our confidence in the Malaysia market,” he said, adding that it had hired local contractors for the reclamation works and engaged an Australian consultant who had reclamation experience at Sentosa Island, Singapore.
The man-made island that had started works, however, raised eyebrows due to environmental concerns, among others.
Country Garden intended to announce the project in March but held it back due to the incident of the missing flight MH370.
Yuen conceded that the aviation mishap, which involved many passengers from mainland China, had affected sentiments of home buyers from that country but he was quick to acknowledge that the political rapport between China and Malaysia was strong and would help bring back relations to normalcy in time.
“It is only a matter of time before the confidence level of Chinese buyers recovers. We are still very confident with Malaysia’s fundamentals,” he said, adding that the company had studied this new market for a long time before penetrating into the country.
Malaysia is Country Garden’s maiden overseas venture. But it is no stranger, having made headlines with its massive project in Danga Bay, Johor, that is estimated to have a gross development value of RM18bil.
In August 2013, Country Garden attracted attention when it announced the sale of 6,000 out of its 9,000 units of condominiums on its development in Danga Bay. It attracted attention because a project of such a scale had not been seen in Malaysia.
It prompted allegations that the high take-up rate was due to huge discounts offered by Country Garden. There were reports that it even offered “buy-one-free-one” for its buyers from China.
Yuen rubbished speculation that the company employed a “buy-one-free-one” approach to lure buyers.
“People who made those claims do not have knowledge of the property market. There is no logic in it,” he said.
Apart from Johor, Country Garden also has projects in Selangor. In the Klang Valley, it plans to launch the project in Serendah with its 55:45 joint-venture partner Malaysia Land Properties Sdn Bhd (Mayland) this year.
The 67.58ha project has a gross development value (GDV) of RM1.5bil.
Its other project in Selangor is known as Diamond City in Semenyih. The RM2bil project, which was launched officially over the weekend, received overwhelming response with some 60% of the offered units sold.
Country Garden Properties (M) Sdn Bhd managing director Chai Keng Wai, who also represents Mayland, said he was confident that the remaining units would be fully taken up in “a few weeks’ time.”
He said people had booked most of the units since the soft launch of the project last year.
Prices for its link houses, bungalows and mansions range from RM378 psf to RM430 psf while built-up sizes start from 2,300 sq ft to 8,600 sq ft.
The first phase of Diamond City sits on a 40ha tract and counts a clubhouse, a Spanish-style commercial street and an infinity pool as some of its facilities. Its selling points include its Spanish-inspired design as well as ready-built show village and amenities.
Country Garden is one of the top 10 developers in China and has more than 20 years of experience in township development.
The company, together with Johor’s economic development arm, Kumpulan Prasarana Rakyat Johor (KPRJ), have planned for a development over 5,000 acres (2,023.43ha) of reclaimed land in a project spanning more than 30 years.
The project, which will include a man-made island, will be near the second link in Johor and a study on the matter was done more than a year ago.
In an interview with StarBiz, Country Garden’s regional president for Malaysia project Kayson Yuen said the China-based company had studied the mega project, known as “Forest City”, for more than a year before it decided to invest in it.
“We decided in the investment because the land cost was reasonable. I cannot remember the exact price but we have committed towards the project,” he said.
Yuen also stressed that the slowdown in China did not have any impact on their overseas ventures.
“This is because we are able to collect a bigger deposit for our projects in China and this helps with cash flow,” said Yuen.
In March this year, StarBiz reported that the Hong-Kong listed company was joining hands with KPRJ to build a massive man-made island near Pendas, Johor, for luxury homes.
“This will be a massive mixed development and the investment and commitment shows our confidence in the Malaysia market,” he said, adding that it had hired local contractors for the reclamation works and engaged an Australian consultant who had reclamation experience at Sentosa Island, Singapore.
The man-made island that had started works, however, raised eyebrows due to environmental concerns, among others.
Country Garden intended to announce the project in March but held it back due to the incident of the missing flight MH370.
Yuen conceded that the aviation mishap, which involved many passengers from mainland China, had affected sentiments of home buyers from that country but he was quick to acknowledge that the political rapport between China and Malaysia was strong and would help bring back relations to normalcy in time.
“It is only a matter of time before the confidence level of Chinese buyers recovers. We are still very confident with Malaysia’s fundamentals,” he said, adding that the company had studied this new market for a long time before penetrating into the country.
Malaysia is Country Garden’s maiden overseas venture. But it is no stranger, having made headlines with its massive project in Danga Bay, Johor, that is estimated to have a gross development value of RM18bil.
In August 2013, Country Garden attracted attention when it announced the sale of 6,000 out of its 9,000 units of condominiums on its development in Danga Bay. It attracted attention because a project of such a scale had not been seen in Malaysia.
It prompted allegations that the high take-up rate was due to huge discounts offered by Country Garden. There were reports that it even offered “buy-one-free-one” for its buyers from China.
Yuen rubbished speculation that the company employed a “buy-one-free-one” approach to lure buyers.
“People who made those claims do not have knowledge of the property market. There is no logic in it,” he said.
Apart from Johor, Country Garden also has projects in Selangor. In the Klang Valley, it plans to launch the project in Serendah with its 55:45 joint-venture partner Malaysia Land Properties Sdn Bhd (Mayland) this year.
The 67.58ha project has a gross development value (GDV) of RM1.5bil.
Its other project in Selangor is known as Diamond City in Semenyih. The RM2bil project, which was launched officially over the weekend, received overwhelming response with some 60% of the offered units sold.
Country Garden Properties (M) Sdn Bhd managing director Chai Keng Wai, who also represents Mayland, said he was confident that the remaining units would be fully taken up in “a few weeks’ time.”
He said people had booked most of the units since the soft launch of the project last year.
Prices for its link houses, bungalows and mansions range from RM378 psf to RM430 psf while built-up sizes start from 2,300 sq ft to 8,600 sq ft.
The first phase of Diamond City sits on a 40ha tract and counts a clubhouse, a Spanish-style commercial street and an infinity pool as some of its facilities. Its selling points include its Spanish-inspired design as well as ready-built show village and amenities.
Country Garden is one of the top 10 developers in China and has more than 20 years of experience in township development.
Saturday, June 14, 2014
Property Auction: Amazing Price went for a Shop Apartment
Guess how much is the final price? The reserve price for this leasehold, bumi reserve, 2nd floor, 1062 sq.ft. unit of a 4 storey shop apartment at Taman Keramat Permai, Ulu Kelang, Kuala Lumpur is RM120,000. The bidders went wild and the price went up and up and up .....
Friday, June 13, 2014
Township, among the biggest of its kind, launched in Semenyih
Eco World Development Group Bhd recently launched its first township in the Klang Valley called the EcoMajestic in Semenyih, Selangor.
Spread over 1,089 acres, it is set to be one of the largest, fully gated and guarded townships in Malaysia with a gross development value (GDV) of RM11.14bil.
Phase 1 offers 612 units of terraced homes of varying sizes, with prices starting from RM586,000.
Subsequent launches will offer semi-detached units as well as bungalows for sale.
Designed around a colonial theme, EcoMajestic’s master plan includes 150 acres dedicated for development as a commercial hub that will make it the centre of business and economic activity for the Kajang, Bangi and Semenyih vicinity.
Some 100 acres has also been set aside to be developed as green zones and recreational areas, in line with the company’s vision of eco-living.
Eco World president and chief executive officer Datuk Chang Khim Wah said the company received strong support from buyers, who lined up two days prior to the official launch to get numbers for the unit selection.
“We get many young couples looking for a home, as well as older buyers who are purchasing property for their children so that they can live nearby,” said Chang.
“The area has good accessibility as it connects to the existing Jalan Semenyih,” he said, adding that a new interchange to the LEKAS highway will be completed in time for the handover of units.
Chang also said that Semenyih was a growing catchment area as a large number of the population are settling there.
“It is a mature township that is close to major towns such as Bangi and Semenyih,” he said.
“The launch comes following the success of our first two projects, the EcoBotanic in Nusajaya, Johor and EcoSky located off Jalan Ipoh in Kuala Lumpur, which has given us the confidence that there is a strong demand for our properties,” Chang said, adding that they achieved a combined total sales of RM1.13bil as of March 31, 2014.
Apart from EcoMajestic, the group simultaneously launched two other new development projects, the Eco Spring and Eco Summer in Tebrau, Johor.
The 613 acre mixed development has a combined GDV of RM5.87bil.
The group also previewed their first Business Park, located in the same vicinity, called Eco Business Park I which aims to take the concept of green full-serviced business parks to another level.
The developer recently announced its sales target of RM5 billion for financial years 2014 and 2015 at RM2 bil and RM3 bil respectively.
“We still have many more projects to be launched and look forward to bringing more innovative products to delight our customers and followers in the near future,” he added.
Upcoming projects include EcoSanctuary in the Klang Valley, the newly revamped EcoTropics, Eco Business Park II and III in Iskandar Malaysia, as well as EcoMeadows on mainland Penang over the next few years.
Spread over 1,089 acres, it is set to be one of the largest, fully gated and guarded townships in Malaysia with a gross development value (GDV) of RM11.14bil.
Phase 1 offers 612 units of terraced homes of varying sizes, with prices starting from RM586,000.
Subsequent launches will offer semi-detached units as well as bungalows for sale.
Designed around a colonial theme, EcoMajestic’s master plan includes 150 acres dedicated for development as a commercial hub that will make it the centre of business and economic activity for the Kajang, Bangi and Semenyih vicinity.
Some 100 acres has also been set aside to be developed as green zones and recreational areas, in line with the company’s vision of eco-living.
Eco World president and chief executive officer Datuk Chang Khim Wah said the company received strong support from buyers, who lined up two days prior to the official launch to get numbers for the unit selection.
“We get many young couples looking for a home, as well as older buyers who are purchasing property for their children so that they can live nearby,” said Chang.
“The area has good accessibility as it connects to the existing Jalan Semenyih,” he said, adding that a new interchange to the LEKAS highway will be completed in time for the handover of units.
Chang also said that Semenyih was a growing catchment area as a large number of the population are settling there.
“It is a mature township that is close to major towns such as Bangi and Semenyih,” he said.
“The launch comes following the success of our first two projects, the EcoBotanic in Nusajaya, Johor and EcoSky located off Jalan Ipoh in Kuala Lumpur, which has given us the confidence that there is a strong demand for our properties,” Chang said, adding that they achieved a combined total sales of RM1.13bil as of March 31, 2014.
Apart from EcoMajestic, the group simultaneously launched two other new development projects, the Eco Spring and Eco Summer in Tebrau, Johor.
The 613 acre mixed development has a combined GDV of RM5.87bil.
The group also previewed their first Business Park, located in the same vicinity, called Eco Business Park I which aims to take the concept of green full-serviced business parks to another level.
The developer recently announced its sales target of RM5 billion for financial years 2014 and 2015 at RM2 bil and RM3 bil respectively.
“We still have many more projects to be launched and look forward to bringing more innovative products to delight our customers and followers in the near future,” he added.
Upcoming projects include EcoSanctuary in the Klang Valley, the newly revamped EcoTropics, Eco Business Park II and III in Iskandar Malaysia, as well as EcoMeadows on mainland Penang over the next few years.
Wednesday, June 11, 2014
Property sector not all bad, but ...
Property prices and transactions, which have surged since 2009, have led to fears of an inflationary asset bubble. This has prompted the introduction of cooling measures, via the withdrawal of developer interest bearing schemes (DIBS), the real property gains tax (RPGT) hike and the setting of minimum property prices for foreign buyers.
Since the implementation of such measures, growth in residential property prices has increased by a slower 8.1% in the fourth quarter of 2013 (4Q13) against a 12% jump in early 2013, as prospective buyers adopted a wait and see approach. Our preliminary checks with property agents reveal that property prices so far in 2014 have declined by 5% to 10%.
Housing transactions were also seen lower over the past quarters subsequent to the cooling measures. This was exacerbated by more stringent loan approvals, which saw a loan rejection rate of 49% as at February this year from above 50% for the best part of 2013.
Although housing transactions were slower in 2013, the overall housing supply (comprising the incoming and planned supply) has been on a record high last year at 1.3 million units translating into a 6.5% year-on-year (y-o-y) growth as at December 2013.
Supply growth was seen higher, mostly concentrated within urban locations such as those in Johor, Kuala Lumpur, Selangor and Penang, which accounted for 57% of the total housing supply in Malaysia. Johor recorded the highest y-o-y growth at 12.2%, while Terengganu was the lowest at -2.6%.
Based on the average annual income per capita of RM32,144 and the average house price of RM292,661 (according to the National Property Information Centre), the affordability ratio is still below that of the 1990s, which is around 50% of monthly income against 28% in 2013. However, we believe the average affordability ratio is not reflective of the overall property market in Malaysia as the surge in property prices is centred on certain hot spots. For instance, the affordability ratio is one of the lowest in Kuala Lumpur and Penang, at 40% of gross monthly household income.
While most housing is centred on the main locations, we reckon demand still exceeds supply as demand is well supported by strong demographics, in which about 36% of the population are in the 20 to 40 years old age bracket, representing the group that is most likely to buy/upgrade a house in the near future. There will be another 40% of the population in the age bracket of 0 to 19 years to support the long-term demand.
Besides, urbanisation also plays a role in the housing demand due to higher economic opportunities which will continue to attract migration of the rural population. The urbanisation rate is expected to increase by 2.49% per year going forward from 2010 to 2015.
Against the above backdrop, we prefer the residential players which target the middle income groups such as Tambun Indah Land Bhd, Matrix Concepts Holdings Bhd, Hua Yang Bhd and IJM Land Bhd. This is consistent with our view that demographics are still favourable as we see more demand coming from the young and growing population. We reckon these companies have bigger potential in terms of earnings given their relatively lower earnings base and their reputable branding in their respective locations.
In conclusion, we expect the growth momentum (transactions and prices) to remain muted as investors adopt a wait-and-see approach given the overall unexciting macro fundamentals as well as the mismatch of demand/supply and affordability issue. This is exacerbated by the government capping the sector via price restrictive measures. Hence, we see the consolidation to continue in the near term and prefer selected developers only in the residential segment which targets the middle income groups — Tambun Indah, Matrix Concepts, Hua Yang and IJM Land. Tactically and fundamentally, we are rating the overall sector a “neutral”.
Monday, June 9, 2014
Eco World offers diverse range of products for buyers
With a landbank of 1,793.97ha and total gross development value (GDV) of RM43.52bil, Eco World Development Group Bhd offers a wide range of residential, commercial and industrial products with thoughtful architecture and sustainability elements.
Its current projects are mainly located in the Klang Valley, Iskandar region, and Penang.
In the central, its on-going projects are EcoSky along Jalan Ipoh, EcoMajestic at Semenyih and Saujana Glenmarie in the Glenmarie neighbourhood.
EcoSky, its maiden project in the Klang Valley, is an integrated residential and commercial development on a 3.88ha parcel situated off Jalan Ipoh.
Located 8km away from the city centre, the strategic location enables purchasers to choose between a great view of the Petronas Twin Towers on one side and the famed limestone Batu Caves on the other. The site is served by two KTM stations, namely Taman Wahyu and Batu Caves, with easy access to major highways.
Besides a wide range of facilities to cater to residents’ lifestyle requirements such as recreational facilities, shops, offices and food and beverage outlets, EcoSky will be certified by the Singapore Building and Construction Authority’s Green Mark and US’s Leadership in Energy and Environmental Design on top of certification by Malaysia’s Green Building Index.
Meanwhile, the newly launched EcoMajestic, also its first township in the Klang Valley, is located in the Southern Corridor of Semenyih.
With a land size of 434.23ha, this RM11.14bil-project is set to be the largest strata titled fully gated and guarded township in Malaysia.
Designed with a colonial straits flair, EcoMajestic’s master plan includes 60.7ha dedicated for development as a commercial hub that will make it the business and economic hub that serves Semenyih, Kajang, and Bangi.
Currently, the property player offers affordable landed terrace homes, semi-detached and cluster as well as bungalow land for home buyers at EcoMajestic.
In the Iskandar region, it had launched EcoSpring and EcoSummer while it also introduced Eco Business Park I at a preview.
EcoSpring and EcoSummer are located in the well-established Tebrau corridor and will offer a good mix of affordable and luxury landed homes.
Its first project in the southern state is the 131.52ha-EcoBotanic in Nusajaya, which features a butterfly-shaped lake and 7.2ha central park and houses that are inspired by the colonial era architecture.
In Penang, it plans to unveil the 5.26ha residential and integrated EcoTerraces at Paya Terubong this August. The RM340mil project comprises one block of 41-storey condominium, 47 units of three-storey terrace houses and 12 units of semi-detached houses.
Its current projects are mainly located in the Klang Valley, Iskandar region, and Penang.
In the central, its on-going projects are EcoSky along Jalan Ipoh, EcoMajestic at Semenyih and Saujana Glenmarie in the Glenmarie neighbourhood.
EcoSky, its maiden project in the Klang Valley, is an integrated residential and commercial development on a 3.88ha parcel situated off Jalan Ipoh.
Located 8km away from the city centre, the strategic location enables purchasers to choose between a great view of the Petronas Twin Towers on one side and the famed limestone Batu Caves on the other. The site is served by two KTM stations, namely Taman Wahyu and Batu Caves, with easy access to major highways.
Besides a wide range of facilities to cater to residents’ lifestyle requirements such as recreational facilities, shops, offices and food and beverage outlets, EcoSky will be certified by the Singapore Building and Construction Authority’s Green Mark and US’s Leadership in Energy and Environmental Design on top of certification by Malaysia’s Green Building Index.
Meanwhile, the newly launched EcoMajestic, also its first township in the Klang Valley, is located in the Southern Corridor of Semenyih.
With a land size of 434.23ha, this RM11.14bil-project is set to be the largest strata titled fully gated and guarded township in Malaysia.
Designed with a colonial straits flair, EcoMajestic’s master plan includes 60.7ha dedicated for development as a commercial hub that will make it the business and economic hub that serves Semenyih, Kajang, and Bangi.
Currently, the property player offers affordable landed terrace homes, semi-detached and cluster as well as bungalow land for home buyers at EcoMajestic.
In the Iskandar region, it had launched EcoSpring and EcoSummer while it also introduced Eco Business Park I at a preview.
EcoSpring and EcoSummer are located in the well-established Tebrau corridor and will offer a good mix of affordable and luxury landed homes.
Its first project in the southern state is the 131.52ha-EcoBotanic in Nusajaya, which features a butterfly-shaped lake and 7.2ha central park and houses that are inspired by the colonial era architecture.
In Penang, it plans to unveil the 5.26ha residential and integrated EcoTerraces at Paya Terubong this August. The RM340mil project comprises one block of 41-storey condominium, 47 units of three-storey terrace houses and 12 units of semi-detached houses.
Sunday, June 8, 2014
Eco World launches well received
The text message blasts went out on the evening of May 23. Before the night was through, more than 80 registrants had set up camp at Eco World Development Group Bhd’s sales gallery in Semenyih, Selangor. They were joined by a few hundred more the next day to get their queue numbers to buy a house in its flagship township, the 1,089-acre EcoMajestic in Semenyih.
A similar scene unfolded at its sales gallery in Johor Baru, where Phase 1 of two other townships — the 613.8-acre EcoSpring and EcoSummer in the Tebrau corridor — was up for grabs. The three developments were simultaneously launched on May 25, along with a preview of Eco Business Park I in Iskandar Malaysia, Johor. According to Eco World, more than 2,000 people turned up at its Semenyih and Johor Baru galleries to book their units.
EcoMajestic saw a take-up of 95% while EcoSpring and EcoSummer had a combined take-up of 85% by the end of the launch day. The first phase of EcoMajestic comprises 612 terraced houses, priced at RM586,000 onwards. EcoSpring offers clusters and semidees, costing RM1.1 million onwards, and EcoSummer consists of terraced houses, with the starting price at RM650,000.
“We were quite overwhelmed by the response … the launch of EcoMajestic, EcoSpring and EcoSummer were really well received, and we are extremely thankful to all the interested purchasers who came in full force to support us,” says Datuk Chang Khim Wah, president and CEO of Eco World.
The take-up rate was strong, considering the challenging property market, which has been affected by the government’s cooling measures, such as the abolition of the developer interest-bearing scheme and the more stringent housing loan regulations, as well as the fact that Eco World is a new player in the market. According to the National Property Information Centre’s (Napic) Property Market Report 2013, transaction volume dropped to 381,130 from 427,520 in 2012.
Chang believes that the experience and good reputation of the management and the team were strong contributing factors to the success of the launches. He, the key management team and the directors, including Tan Sri Liew Kee Sin, Tan Sri Abdul Rashid Abdul Manaf and Datuk Leong Kok Wah, were from S P Setia Bhd.
Chang also attributes the success to the master plans and concepts of the townships, which he says resonated with their purchasers.
“For example, EcoMajestic, which offers the largest strata-titled project in the Klang Valley, appeals to both the younger and older generation of buyers. In general, our buyers come from all walks of life; young families looking for their first home and a very strong upgrader’s market wanting a better lifestyle off ering,” he says.
Despite the strong take-up rates, dropouts are expected mainly due to funding problems. Napic notes in the report that housing loan approvals dropped 22.5% in 2013, compared with an expansion of 47.4% the previous year.
Chang says it is not possible to forecast the dropout rate as this depends on the credit-worthiness of the purchasers and the willingness of the banks to lend.
“From our previous experience with EcoSky in Jalan Ipoh, [Kuala Lumpur,] we saw a dropout rate of less than 10%. We are looking at different products for this launch as EcoMajestic, EcoSpring and EcoSummer are landed homes and a part of a township development. We are not overly concerned about this as we have recorded a strong registration interest, and we have a waiting list.”
There is also the issue of the impending Goods and Services Tax. Even though the GST is not imposed on residential products, the cost of construction, including the materials, is not exempted. Some property consultants and developers have warned that the GST will add to the construction cost, which in turn will raise property prices.
How will this impact the costs and prices of Eco World’s products? Chang says, “It takes a lot of planning before our products are launched, and we take into account all market factors that will have an impact on costs, but we hope to offer our customers the best value proposition there is when buying an Eco World product.”
The developer has set a sales target of RM2 billion for FY2014 and RM3 billion for FY2015. As at March 31, Eco World’s first two projects — EcoBotanic in Iskandar and EcoSky in the Klang Valley — had achieved combined sales of RM1.13 billion.
A similar scene unfolded at its sales gallery in Johor Baru, where Phase 1 of two other townships — the 613.8-acre EcoSpring and EcoSummer in the Tebrau corridor — was up for grabs. The three developments were simultaneously launched on May 25, along with a preview of Eco Business Park I in Iskandar Malaysia, Johor. According to Eco World, more than 2,000 people turned up at its Semenyih and Johor Baru galleries to book their units.
EcoMajestic saw a take-up of 95% while EcoSpring and EcoSummer had a combined take-up of 85% by the end of the launch day. The first phase of EcoMajestic comprises 612 terraced houses, priced at RM586,000 onwards. EcoSpring offers clusters and semidees, costing RM1.1 million onwards, and EcoSummer consists of terraced houses, with the starting price at RM650,000.
“We were quite overwhelmed by the response … the launch of EcoMajestic, EcoSpring and EcoSummer were really well received, and we are extremely thankful to all the interested purchasers who came in full force to support us,” says Datuk Chang Khim Wah, president and CEO of Eco World.
The take-up rate was strong, considering the challenging property market, which has been affected by the government’s cooling measures, such as the abolition of the developer interest-bearing scheme and the more stringent housing loan regulations, as well as the fact that Eco World is a new player in the market. According to the National Property Information Centre’s (Napic) Property Market Report 2013, transaction volume dropped to 381,130 from 427,520 in 2012.
Chang believes that the experience and good reputation of the management and the team were strong contributing factors to the success of the launches. He, the key management team and the directors, including Tan Sri Liew Kee Sin, Tan Sri Abdul Rashid Abdul Manaf and Datuk Leong Kok Wah, were from S P Setia Bhd.
Chang also attributes the success to the master plans and concepts of the townships, which he says resonated with their purchasers.
“For example, EcoMajestic, which offers the largest strata-titled project in the Klang Valley, appeals to both the younger and older generation of buyers. In general, our buyers come from all walks of life; young families looking for their first home and a very strong upgrader’s market wanting a better lifestyle off ering,” he says.
Despite the strong take-up rates, dropouts are expected mainly due to funding problems. Napic notes in the report that housing loan approvals dropped 22.5% in 2013, compared with an expansion of 47.4% the previous year.
Chang says it is not possible to forecast the dropout rate as this depends on the credit-worthiness of the purchasers and the willingness of the banks to lend.
“From our previous experience with EcoSky in Jalan Ipoh, [Kuala Lumpur,] we saw a dropout rate of less than 10%. We are looking at different products for this launch as EcoMajestic, EcoSpring and EcoSummer are landed homes and a part of a township development. We are not overly concerned about this as we have recorded a strong registration interest, and we have a waiting list.”
There is also the issue of the impending Goods and Services Tax. Even though the GST is not imposed on residential products, the cost of construction, including the materials, is not exempted. Some property consultants and developers have warned that the GST will add to the construction cost, which in turn will raise property prices.
How will this impact the costs and prices of Eco World’s products? Chang says, “It takes a lot of planning before our products are launched, and we take into account all market factors that will have an impact on costs, but we hope to offer our customers the best value proposition there is when buying an Eco World product.”
The developer has set a sales target of RM2 billion for FY2014 and RM3 billion for FY2015. As at March 31, Eco World’s first two projects — EcoBotanic in Iskandar and EcoSky in the Klang Valley — had achieved combined sales of RM1.13 billion.
All systems go with Mah Sing
Buoyed by strong sales for its property projects, Mah Sing Group Bhd will be proceeding with its project launches worth RM4bil this year.
Unlike some developers who are moving into lower gear in terms of project launches following a more challenging market environment in the first half of this year, group managing director and chief executive Tan Sri Leong Hoy Kum says Mah Sing has gone on with its project launches and previews as planned.
These include Savanna Executive Suites and Dsara Sentral, both launched in March, and the preview of Lakeville Residence and Avens Residences garden link homes in Southville@KL South in May. There are also the ongoing launches of new phases of link homes, M Residence 1 & 2 in Rawang.
Of Mah Sing’s product portfolio, 26% worth RM8.3bil comprises landed residential property, 21% (RM6.3bil) are serviced apartments and small office home office (Soho) units, and 19% (RM5.8bil) are condominiums and apartments.
Leong believes the fundamentals of the local property market remains solid, driven by a relatively young working population, continued urbanisation, a stable employment market, attractive mortgage rates, and a cultural preference for owning and investing in properties.
“These factors should sustain demand for the right properties in major hotspots where demand will outpace supply over the short and medium terms,” he says.
Mah Sing’s confidence stems from the strong sales it has garnered, having turned in RM770mil in sales as at March 31 this year. It is confident of clocking up a 20% increase in sales to the tune of RM3.6bil in 2014.
Leong says mid-range mass market products like Savanna Executive Suites in Southville City@Bangi, link homes in M Residence 1 & 2 in Rawang, and apartments in DSara Sentral, Sungai Buloh have resulted in strong sales momentum for Mah Sing.
The Southville City township recorded bookings of RM530mil compared with the full-year sales target of RM700mil. As for the D’sara Sentral project in Sungai Buloh, bookings have reached RM250mil compared with the full-year sales target of RM300mil.
Leong attributes Mah Sing’s strong performance to the right product planning and good land banking strategies over the past few years.
“We have planned for the right products over the past two years by acquiring land bank for mainly mass market products. The right products at locations with supply shortage still see strong demand from buyers who buy for their own occupation, while investors are in for the medium to long term,” he explains.
Next month, Mah Sing will open for booking 197 units of 3-storey link houses (priced from RM860,000) with a gross development value (GDV) of RM200mil. There are already 1,000 bookings for the project.
After the Government’s market cooling measures came into force in January this year, Leong says Mah Sing has shifted its focus to the affordable residential property segment that still enjoys robust demand.
Versatile player
“The focus this year is to ensure affordability of our products. This property segment has been underserved for many years now and there is strong pent-up demand. To cater to this market segment, some 81% of our residential launches this year will be priced below RM700,000 compared to only 41% in 2013,” Leong says.
He points out that the implementation of the 6% goods and services tax from April 1, 2015 will cause commercial property prices to go up by 6%, while residential property prices will need to rise by 3%-5% for developers to cover the higher input costs.
He believes this will encourage potential property purchasers to buy ahead in the second half of this year to avoid having to pay more for their property.
Mah Sing has 47 projects spread across the country in the Klang Valley, Johor, Penang and Sabah.
Location-wise, the group’s focus is still in the Klang Valley which is expected to contribute 60% to group sales this year, followed by Johor Baru projects at 23%, Penang projects 10% and Kota Kinabalu projects 7%.
But it has no intention of spreading to other smaller markets such as Perak, Pahang or Negeri Sembilan, although Leong says Mah Sing may explore Seremban when the high speed rail project takes off. It also has no plans to expand overseas.
He says Mah Sing is on the lookout for good land although he laments that despite the tougher market backdrop, the price of land has not come down.
“We are not in a hurry to buy land but we are constantly looking for new land. We will lock in if the price is right and payment terms are attractive. We will focus on the four hotspots where we have a presence, namely the Klang Valley and Greater KL, Iskandar Malaysia, Penang and Sabah.”
Leong says Mah Sing has the capacity to lock in further new land before hitting the company’s target of maintaining a net gearing ratio of 0.5.
Mah Sing’s balance sheet remains strong with a strong cash pile of some RM614.2mil and a low net gearing of 0.25 times as at March 31.
“Having the right land will give us the flexibility to plan ahead of the property market cycle,” he says.
Mah Sing still has 2,786 acres with a total remaining GDV of RM26.08bil that will sustain the group for seven to eight years.
It also has unbilled sales of RM4.64bil. Of the total remaining GDV and unbilled sales of RM30.72bil, commercial property makes up 28% or RM8.585bil and industrial property makes up 6% (RM1.718bil).
Leong says Mah Sing is also looking at injecting its industrial and commercial assets into a real estate investment trust (Reit) in the next three to five years.
“We have the right profile of properties should we decide to venture into a Reit. However, this is a medium to long-term plan for us.”
Meanwhile, Leong is confident the 43 million options under Mah Sing’s 10-year employee share option scheme will be converted upon the expiry date in July given the low weighted average price of RM1.44 per option. The exercise price of the options ranges from RM1.24 to RM2.03.
“The exercise of one option will involve the issuance of one new share. So if all 43 million options are exercised before the expiry date of July 10, that will involve an issuance of 43 million new shares in Mah Sing,” Leong says.
The low price-to-earnings ratio of around 9 to 10 times presents a good entry opportunity for investors, he adds.
Leong says the conversion of the options will raise Mah Sing’s market capitalisation by some RM97mil, giving a boost to Mah Sing’s share liquidity.
Unlike some developers who are moving into lower gear in terms of project launches following a more challenging market environment in the first half of this year, group managing director and chief executive Tan Sri Leong Hoy Kum says Mah Sing has gone on with its project launches and previews as planned.
These include Savanna Executive Suites and Dsara Sentral, both launched in March, and the preview of Lakeville Residence and Avens Residences garden link homes in Southville@KL South in May. There are also the ongoing launches of new phases of link homes, M Residence 1 & 2 in Rawang.
Of Mah Sing’s product portfolio, 26% worth RM8.3bil comprises landed residential property, 21% (RM6.3bil) are serviced apartments and small office home office (Soho) units, and 19% (RM5.8bil) are condominiums and apartments.
Leong believes the fundamentals of the local property market remains solid, driven by a relatively young working population, continued urbanisation, a stable employment market, attractive mortgage rates, and a cultural preference for owning and investing in properties.
“These factors should sustain demand for the right properties in major hotspots where demand will outpace supply over the short and medium terms,” he says.
Mah Sing’s confidence stems from the strong sales it has garnered, having turned in RM770mil in sales as at March 31 this year. It is confident of clocking up a 20% increase in sales to the tune of RM3.6bil in 2014.
Leong says mid-range mass market products like Savanna Executive Suites in Southville City@Bangi, link homes in M Residence 1 & 2 in Rawang, and apartments in DSara Sentral, Sungai Buloh have resulted in strong sales momentum for Mah Sing.
The Southville City township recorded bookings of RM530mil compared with the full-year sales target of RM700mil. As for the D’sara Sentral project in Sungai Buloh, bookings have reached RM250mil compared with the full-year sales target of RM300mil.
Leong attributes Mah Sing’s strong performance to the right product planning and good land banking strategies over the past few years.
“We have planned for the right products over the past two years by acquiring land bank for mainly mass market products. The right products at locations with supply shortage still see strong demand from buyers who buy for their own occupation, while investors are in for the medium to long term,” he explains.
Next month, Mah Sing will open for booking 197 units of 3-storey link houses (priced from RM860,000) with a gross development value (GDV) of RM200mil. There are already 1,000 bookings for the project.
After the Government’s market cooling measures came into force in January this year, Leong says Mah Sing has shifted its focus to the affordable residential property segment that still enjoys robust demand.
Versatile player
“The focus this year is to ensure affordability of our products. This property segment has been underserved for many years now and there is strong pent-up demand. To cater to this market segment, some 81% of our residential launches this year will be priced below RM700,000 compared to only 41% in 2013,” Leong says.
He points out that the implementation of the 6% goods and services tax from April 1, 2015 will cause commercial property prices to go up by 6%, while residential property prices will need to rise by 3%-5% for developers to cover the higher input costs.
He believes this will encourage potential property purchasers to buy ahead in the second half of this year to avoid having to pay more for their property.
Mah Sing has 47 projects spread across the country in the Klang Valley, Johor, Penang and Sabah.
Location-wise, the group’s focus is still in the Klang Valley which is expected to contribute 60% to group sales this year, followed by Johor Baru projects at 23%, Penang projects 10% and Kota Kinabalu projects 7%.
But it has no intention of spreading to other smaller markets such as Perak, Pahang or Negeri Sembilan, although Leong says Mah Sing may explore Seremban when the high speed rail project takes off. It also has no plans to expand overseas.
He says Mah Sing is on the lookout for good land although he laments that despite the tougher market backdrop, the price of land has not come down.
“We are not in a hurry to buy land but we are constantly looking for new land. We will lock in if the price is right and payment terms are attractive. We will focus on the four hotspots where we have a presence, namely the Klang Valley and Greater KL, Iskandar Malaysia, Penang and Sabah.”
Leong says Mah Sing has the capacity to lock in further new land before hitting the company’s target of maintaining a net gearing ratio of 0.5.
Mah Sing’s balance sheet remains strong with a strong cash pile of some RM614.2mil and a low net gearing of 0.25 times as at March 31.
“Having the right land will give us the flexibility to plan ahead of the property market cycle,” he says.
Mah Sing still has 2,786 acres with a total remaining GDV of RM26.08bil that will sustain the group for seven to eight years.
It also has unbilled sales of RM4.64bil. Of the total remaining GDV and unbilled sales of RM30.72bil, commercial property makes up 28% or RM8.585bil and industrial property makes up 6% (RM1.718bil).
Leong says Mah Sing is also looking at injecting its industrial and commercial assets into a real estate investment trust (Reit) in the next three to five years.
“We have the right profile of properties should we decide to venture into a Reit. However, this is a medium to long-term plan for us.”
Meanwhile, Leong is confident the 43 million options under Mah Sing’s 10-year employee share option scheme will be converted upon the expiry date in July given the low weighted average price of RM1.44 per option. The exercise price of the options ranges from RM1.24 to RM2.03.
“The exercise of one option will involve the issuance of one new share. So if all 43 million options are exercised before the expiry date of July 10, that will involve an issuance of 43 million new shares in Mah Sing,” Leong says.
The low price-to-earnings ratio of around 9 to 10 times presents a good entry opportunity for investors, he adds.
Leong says the conversion of the options will raise Mah Sing’s market capitalisation by some RM97mil, giving a boost to Mah Sing’s share liquidity.
House buyers still being hoodwinked?
For many years, the National House Buyers Association (HBA) has been sounding alarm bells that prices of houses are getting more and more unaffordable for the average rakyat, especially the lower and middle income segment.
Based on current starting salaries of about RM3,000 per month and with prices of new launches of apartments in the Klang Valley being priced in excess of RM500,000, it is almost impossible for our younger generation and single parents to own their own homes.
Unless strong measures are taken by the Government to address the issue of steep rise in house prices, Malaysia risk facing a “homeless generation” that can cause various social issues with far reaching complication.
HBA had previously expressed its gratitude and thanks when the Prime Minister introduced stronger measures in Budget 2014 to address rising house prices such as increasing the Real Property Gains Tax and higher threshold for foreigners to buy properties and banning of the Developer Interest Bearing Scheme (DIBS).
Among the rules introduced in Budget 2014 was increased transparency in property sales price, where property developers will have to display detailed sales price including all benefits and incentives offered to buyers such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.
This was supplemented by a ruling by Bank Negara that the margin of financing given by banks should be based on the net selling price, which is the sales and purchase agreement (SPA) price less any benefits, incentives and rebates given by the developer.
It has been seven months since Budget 2014 was announced and recently HBA volunteers went to various property fairs of various reputable developers to survey whether how well some of the measures announced in the budget have been implemented.
Freebies
(a) DIBS – Save for just one small developer, all projects surveyed had no DIBS, which shows that its ban had been successfully implemented.
(b) Free legal fees for SPA – All projects surveyed offered the fees if the SPA signed with their panel lawyers.
(c) Free legal fees for loan agreements – Only about half of projects surveyed offered these fees provided it was taken with their selected financiers and financiers’ lawyers.
(d) Free stamp duties for memorandum of transfer (MOT) – Only about 20% of projects surveyed offered the free MOT.
Rebates
All the projects surveyed offered rebates ranging from 5% to 10% of the SPA price, meaning that the purchaser only needed to pay about 5% down payment instead of the customary 10%. There were numerous projects which offered 10% rebate, meaning that the purchaser just needed to apply for 90% financing from the panel banks. Coupled with freebies such as free legal fees for SPA and loan agreement, the purchaser effectively did not need to fork out any cash up-front to purchase the house.
Findings
The conclusion is that developers are cutting down on their so-called freebies. Previously almost all projects surveyed offered free legal fees for SPA and loan agreement. As for the rebates, our survey suggested that the practice had actually intensified compared to previous years. In the past, many developers used DIBS where buyers paid 10% and nothing nothing until the property is completed. However, this has now turned into “pay nothing and get your property.”
Bank sales staff were also present during sales launches. The banks offered 90% margin of financing based on the SPA price and not the net selling price which is SPA price less all the freebies and rebates.
Conclusion
HBA supports transparency in the selling price and that the margin of financing be based on the net selling price as there is no “free lunch” in this world. Whenever the developer says free legal fees, stamp duty etc, the developer will factor the cost of such freebies and rebates back into the selling price of the property.
Although, it would appear that it makes it easier for people to buy properties without the need to fork out huge cash up-front, such freebies and rebates artificially pushes up the house price even further and has spill over effects, pushing up prices of existing properties and its surrounding locations further, making it more difficult for the future generation to buy properties.
The biggest challenge faced by prospective house buyers is coming up with the 10% down payment and other expenses which can cost in excess of RM70,000 and above for a RM500,000 property. Our younger generation who are struggling to make a living will not have enough savings and even for those fresh into the workforce, the funds in their EPF Account 2 is also not sufficient.
However, jacking up house prices and then offering a 10% rebate is not the solution. In the long run, it will only exacerbate the situation. Once a property price has risen to an artificially high level, it is difficult to bring it down again without negative consequences to the owners and economy at large.
Using the example of a ‘big’ developer who was offering 10% rebates and freebies such as free legal fees on SPA and loan agreement, the said property were all launched in excess of RM700,000 when the true value after rebates and freebies is closer to just RM600,000. Would it not be better to launch the said property at RM600,000 and asking buyers to pay the required 10% down payment instead of artificially hiking up to RM700,000 and then hoodwinking house buyers by giving rebates and freebies?
If the developer launches the project at RM700,000, then the next launch must even be priced higher, probably closer to RM800,000 and soon, even link homes as far as Semenyih will be priced in excess of RM1mil. Then surely, a “homeless generation” will emerge in Malaysia.
In the long run, it is better if the developer prices the property lower without the cost of the freebies and rebates and house buyers can then plan and budget their purchase accordingly and need not have to pay so much in monthly loan instalments.
Prospective house buyers must save up for their future purchase the moment they start working and forgo certain luxuries such as electronic gadgets and non-national cars.
The goals of affordable housing cannot be achieved overnight and requires the cooperation and understanding of all stakeholders.
Friday, June 6, 2014
Pantai Sentral Park in Bukit Kerinchi has GDV of RM2.5bil
IJM Land Bhd has unveiled its latest property offering, Pantai Sentral Park, a mixed development project that will sit on 23.5ha of prime land in Bukit Kerinchi. It will have a gross development value (GDV) of RM2.5bil.
Chief executive officer and managing director Datuk Soam Heng Choon said that phase 1, comprising a 211-unit residential condominium known as Inwood Residences, would be launched by the month-end.
He said prices had yet to be fixed, but the cost per sq ft was expected to be around RM700, with built-ups ranging from 1,140 to 1,974 sq ft for its two-to-four plus one bedroom units.
“Earthworks have already started and we are aiming for Inwood Residences to be completed in around 3½ years. The construction of a dedicated ramp from the New Pantai Expressway will also be done in tandem with Inwood,” he said at a media briefing yesterday, adding that the ramp would cost RM50mil.
He said the next residential phase launch would be around four to five months later, elaborating that the entire township would eventually consist of seven residential and six commercial phases.
Along with its joint-venture partner Amona Development Sdn Bhd, IJM Land expects to complete the project, which would be able to accommodate around 15,000 residents, within 10 to 15 years.
Touting it as Kuala Lumpur’s one and only urban forest city, Soam noted that one of Pantai Sentral Park’s highlights included a linear forest walk that would allow residents direct access to the 81ha forest.
“It has been designed to maintain the natural landscape of the area, so development activity does not change the geological landfall and water course,” he said.
Soam said IJM Land had already received around 15,000 registrations of interest for the project.
He said 432 affordable housing apartment units would also be launched at Pantai Sentral Park in future, adding that they were expected to be priced at around RM250,000 to RM300,000.
IJM Land will be launching RM3bil worth of projects this year.
The IJM Land Prime Property Investment Showcase will take place from today until Sunday from 10am to 10pm at Symphony Lake Suite, KLCC Park.
Chief executive officer and managing director Datuk Soam Heng Choon said that phase 1, comprising a 211-unit residential condominium known as Inwood Residences, would be launched by the month-end.
He said prices had yet to be fixed, but the cost per sq ft was expected to be around RM700, with built-ups ranging from 1,140 to 1,974 sq ft for its two-to-four plus one bedroom units.
“Earthworks have already started and we are aiming for Inwood Residences to be completed in around 3½ years. The construction of a dedicated ramp from the New Pantai Expressway will also be done in tandem with Inwood,” he said at a media briefing yesterday, adding that the ramp would cost RM50mil.
He said the next residential phase launch would be around four to five months later, elaborating that the entire township would eventually consist of seven residential and six commercial phases.
Along with its joint-venture partner Amona Development Sdn Bhd, IJM Land expects to complete the project, which would be able to accommodate around 15,000 residents, within 10 to 15 years.
Touting it as Kuala Lumpur’s one and only urban forest city, Soam noted that one of Pantai Sentral Park’s highlights included a linear forest walk that would allow residents direct access to the 81ha forest.
“It has been designed to maintain the natural landscape of the area, so development activity does not change the geological landfall and water course,” he said.
Soam said IJM Land had already received around 15,000 registrations of interest for the project.
He said 432 affordable housing apartment units would also be launched at Pantai Sentral Park in future, adding that they were expected to be priced at around RM250,000 to RM300,000.
IJM Land will be launching RM3bil worth of projects this year.
The IJM Land Prime Property Investment Showcase will take place from today until Sunday from 10am to 10pm at Symphony Lake Suite, KLCC Park.
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