Tuesday, June 29, 2010

Ho Hup actively looking for new CEO

Tuesday June 29, 2010

Firm needs leader to help it move out of PN17 status


KUALA LUMPUR: Ho Hup Construction Co Bhd is actively looking for a new chief executive officer that “can sail through with the company to derive back its business”, said chairman Tan Sri Kamaruzzaman Shariff.

“We are a PN17 company and it is not easy to get a competent CEO to sail with us.

“The new CEO needs to understand our business and the financial situation we are facing now and work with us to be out of PN17,” he said after the company’s AGM and EGM yesterday.

Kamaruzzaman said Ho Hup was implementing a regularisation plan now to help it move out of PN17 status but did not elaborate further.

However, he said the company was looking at the best ways to utilise its assets and seeking other opportunities as its financial condition was considered “handicap”.

On the litigation case between Ho Hup and Malton Bhd regarding a joint-development agreement entered into between its subsidiary Bukit Jalil Development Sdn Bhd and Malton’s Pioneer Haven Sdn Bhd, Kamaruzzaman declined to say much.

“It is a court case now and it is subjudice for us to comment anything on that matter,” he said. The deal involved 60 acres of freehold land that Bukit Jalil Development still held.

At the AGM, all the resolutions were passed except for the payment of the previous directors’ fees.

Meanwhile, at the EGM, the proposed disposal by Bukit Jalil Development of a land to Action Master Sdn Bhd for RM7.6mil cash was rejected based on the poll conducted by the shareholders.

CapitaMalls REIT listing expected to raise RM864mil

leecheng@thestar.com.my | Jun 29, 2010

PETALING JAYA: CapitaMalls Asia Ltd, one of Asia’s largest listed shopping mall developers, owners and managers by property value and geographic reach, has launched the prospectus and retail portion of what will be the largest shopping mall REIT (real estate investment trust) in Malaysia to date.

CapitaMalls Asia is part of Southeast Asia’s largest property developer Singapore’s CapitaLand Ltd.

The listing of CapitaMalls Malaysia Trust (CMMT) REIT on the Main Market of Bursa Malaysia on July 16 is expected to have a market capitalisation of RM1.4bil if an over-allotment option of up to 15% of the offering of 786 million units is exercised. If this portion is not exercised, it may raise RM864mil.

Its initial portfolio of three shopping malls – Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor – has a total net lettable area of 1.88 million sq ft and has been valued at RM2.13 bil.

The CMMT IPO will have a total of 1.35 billion units in issue, of which 719 million units were offered to institutional investors at between RM1 and RM1.10 each in late June and 67.5 million units for individual investors at an indicative price of RM1.08 yesterday, with a forecast distribution yield of 6.9% for 2011. The final price will be determined on July 8.

CapitaMalls Asia CEO Lim Beng Chee told a press conference that occupancy and rental yields had increased for all three malls in its stable despite a weak economy in the last two years.

“We see acquisition opportunities in Malaysia’s shopping mall sector, with its fragmented ownership structure.

“CapitaMalls Asia will give CMMT a right of first refusal over any retail properties that we may acquire in future, including the extension that is being carried out at Penang’s Gurney Plaza. If acquired, Gurney Plaza extension will increase CMMT’s asset size by about 11%,” he said.

CIMB Investment Bank Bhd, JPMorgan Chase & Co and Maybank Investment Bank Bhd are jointly managing the IPO sale.

“As part of our long-term commitment, CapitaMalls Asia also plans to set up a Malaysia retail property fund to acquire and develop retail properties in Malaysia. CMMT will similarly have a right of first refusal over this pipeline of retail properties,” Lim said.

CIMB Investment Bank Bhd, JPMorgan Chase & Co and Maybank Investment Bank Bhd are jointly managing the sale. -ends-

Individual investors will get a refund if the final price for institutional investors is lower than the retail price.

CMMT’s sponsor, CapitaMalls Asia Ltd, will retain a stake of 41.74% in CMMT.

If an over-allotment option of up to 117 million units is exercised, CapitaMalls Asia’s stake in CMMT will be 33%.

The IPO follows the RM1.5bil raised by Sunway Real Estate Investment Trust in its initial sale last week and underscores rising investor appetite for equities in Malaysia amid an economic rebound.

Sunway wins RM129m job from PML Dairies

Jun 29, 2010

PETALING JAYA: Sunway Holdings Bhd wholly-owned unit Sunway Construction Sdn Bhd has won a RM129mil contract from PML Dairies Sdn Bhd to build a dairy product factory in Klang, Selangor.

“The proposed project is targeted to be fully completed on July 11, 2011. It is expected to contribute positively to group earnings for the financial year ending Dec 31, 2010 onwards,’’ it said.

PETALING JAYA: UMW Holdings Bhd told the exchange yesterday that it viewed the RM19.23mil losses incurred by its oil and gas operations in the first quarter as a “temporary setback’’.

It said the group had a number of greenfield projects that it expected to “show positive results upon commencement in the second half of this year’’.

“We are in the final stages of negotiations with potential clients for the leasing of our jack-up drilling rigs, NAGA 2 and NAGA 3,’’ it said.

“Our new Indian OCTG plant in Hyderabad, India, is expected to commence production and sales of seamless tubular green pipes in the second half of this year,’’ it added.

The group categorically denied a report that implied that the division was sitting on huge losses which had not been accounted for and which needed provisions in the next few years.

It viewed the report as “baseless allegation and irreponsible’’.

Palace contractors who don’t pay workers to be excluded from future projects

zulrahman@thestar.com.my | Jun 29, 2010

KUALA LUMPUR: Contractors who did not pay their workers involved in the new Istana Negara project will be blacklisted, Works Minister Datuk Shaziman Abu Mansor said.

Shaziman, who expressed his sympathy for the foreign workers of the new palace at Jalan Duta who claimed that they had not been paid their wages, said he had asked Construction Industry Development Board Malaysia (CIDB) to investigate the complaints.

“If it’s true the contractors had not paid their workers, we will ensure that they will be blacklisted from participating in future projects,” he said in winding up the debate on points relating to his ministry, on the 10th Malaysia Plan at the Dewan Rakyat yesterday.

The Star had front-paged that over 100 migrant workers hired by 130 sub-contractors working at the project site had not received their salaries for three months.

Shaziman also said amendments would be made to the CIDB Act to punish contractors involved in completed projects which had later caused deaths or injuries to its occupants.

“Such contractors should be detained and remanded to send out the message that those involved in the construction industry should be fully responsible in their work,” he added.

The minister said that due to the high number of building contractors in the country, the ministry had asked the Economic Planning Unit to tighthen enforcement on applications of contractors seeking government contracts.

The ministry would ask contractors to undergo pre-qualification tests for projects that need high technical specifications, he added.

House Hunting in ... Malaysia

International Real Estate
Published: June 29, 2010


3,500,000 RINGGIT ($1.08 MILLION)

This sixth-floor apartment, built in 2008, is in a high-rise complex in the center of Kuala Lumpur, the capital of Malaysia. It was redesigned a year ago with Japanese and Bauhaus accents, and is being sold furnished.

The condo has its own private elevator entrance. The living room windows run nearly from floor to ceiling; the room is furnished with low-slung couches and tables, and built-in shelves line the walls. A balcony is accessible from both the living-dining area and the master bedroom.

Lacquered cabinetry, built on site for the unit, has a white piano finish. The kitchen has white surfaces as well, offsetting the stainless steel Teka appliances from Spain. The dining table is square and made of white Corian; it seats eight.

The master bedroom has both a study and a large dressing room; its bathroom has twin basin sinks and a Jacuzzi. The second and third bedrooms, each with its own bath, have hardwood floors and built-in wardrobes. Both rooms overlook the building’s pool. The unit also has a maid’s room with its own bath. In addition, a study currently used as a media room could be a fourth bedroom.

The lighting system, designed for energy efficiency, has seven or eight wall switches controlling 10 to 12 lights in each room. Each light has 12 watts of power. The overall energy cost savings are about 66 percent, said Shirley-Ann Joseph, a private wealth adviser for Zerin Properties, the Kuala Lumpur company that has the listing.

The complex, with 138 total units, has a fitness center, an outdoor grilling area and a small store in addition to the pool. The city center, known locally as K.L.C.C., is an area of embassies, hotels and shops. The Kuala Lumpur City Centre Park is a short walk away, and beyond that are the Petronas Twin Towers, an imposing part of the skyline. The Royal Selangor Golf Club, established in 1893, is also within a few blocks.


Since they reached their peak in 2007, prices for the high-end apartments that populate K.L.C.C. have fallen 20 to 30 percent, said James Goh of Savills Rahim & Co., a property consulting company in Kuala Lumpur.

“A lot of our foreign investors who bought investment properties suffered a great deal with what happened in the U.S.,” said Ms. Joseph of Zerin Properties. “There were some fire sales, and people just stopped buying. They developed this cautious wait-and-see attitude.”

Today, she added, there is increased activity in the range of 500,000 to 1 million ringgits ($155,000 to $310,000, at $0.31 to the ringgit), but buyers are still cautious. Over the last year, prices have picked up by about 10 percent, said Tan Lay Kuen, a general manager for the real estate firm Knight Frank Malaysia.

In general, prices per square foot for residential property in the city center currently fall between 1,000 and 1,5000 ringgit, said Kok Long See, a director of the Malaysian realty firm Metro Homes. This apartment costs just over 1,000 ringgit per square foot.

Prices go up in newer luxury buildings, and also in those neighboring the Petronas Towers.

“Being an iconic landmark, Petronas Twin Tower is one of the main factors affecting the price of properties within close proximity to it,” said Bernard Khuan, principal of Bernard Realty in Kuala Lumpur.

That proximity is so important, Mr. Goh said, that apartments with views of the towers or the park at their base can command “a 10 to 15 percent premium over other units in the same project without these views.”

As in many other countries, properties in Malaysia are sold on either a freehold or a leasehold basis. Freehold property owners have possession of the land on which their home sits, and hence pay slightly higher prices, Ms. Joseph said.


As a growing international hub for commerce, Kuala Lumpur attracts a wide range of foreign buyers, including Britons, South Koreans, Indians and Japanese, Mr. Khuan said. But the majority of foreign buyers, Mr. Goh said, come from Singapore, along with expatriates from Australia and Europe who are based in Hong Kong but want a cheaper luxury apartment in the region.


As foreign investment increases, it is becoming significantly easier for foreigners to buy houses in Malaysia.

“Most regulations restricting foreign ownership of Malaysian property have been dismantled in recent years,” Mr. Goh said, “as the government adopts a progressively global outlook.”

Government approval is still required for a purchase, he added; the process can take as long as five months, but is largely a formality.

Foreign buyers may be interested in a government program called Malaysia My Second Home, which awards a 10-year visa as well as privileges like a duty-free car purchase. The minimum property purchase price to take part in the program is 500,000 ringgit, and the cost of the program, Mr. See said, is about 18,000 ringgit for a family of four.

Purchases are subject to a stamp duty calculated on a graduated scale. Buyers pay 1,000 ringgit for the first 100,000 ringgit, 8,000 for the next 400,000 ringgit, and 3 percent of the remaining balance if the price exceeds 500,000 ringgit.

Transfers of property in Malaysia also require lawyers, and legal fees typically average about 1 percent of purchase price, Ms. Joseph said, though they can rise as prices increase. Other costs include a registration fee of 100 ringgit, a title search fee of 60 ringgit and adjudication and stamping fees (per document) of 10 ringgit, Ms. Tan said.

Dubai at 55, Abu Dhabi at 50: Where’s the most expensive city to live?

June 29, 2010

Mercer’s worldwide Cost of Living survey is out.

Wondering where the least expensive city to live in is? That would be Karachi, according to the latest Mercer study.

The HR consulting firm has released its latest Cost of Living study, reports Zawya.com, and the good news according to them is that, thanks to falling accommodation costs, Abu Dhabi and Dubai remain “relatively affordable cities in which to live.”

If by “relatively affordable,” you mean “relatively expensive,” of course. Dubai ranked as the 55th most expensive city for expatriates, tying with Los Angeles. But Abu Dhabi expats are worse off – the UAE’s capital city is the 50th most expensive city in which to live. It ties with Frankfurt, but is the most expensive city in the Middle East.

Other cities across the GCC were ranked as follows: Manama, Bahrain (139), Riyadh, KSA (144), Doha, Qatar (146), Kuwait City, Kuwait (152), Muscat, Oman (176), and Jeddah, KSA (181).

The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. All cities are compared against New York as the base city for the index. Currency movements are measured against the US dollar. The cost of housing – often the biggest expense for expats – plays an important part in determining where cities are ranked.

For the first time, the ranking of the world’s top 10 most expensive cities includes three African urban centres: Luanda (1) in Angola, Ndjamena (3) in Chad and Libreville (7) in Gabon. The top ten also includes three Asian cities; Tokyo (2), Osaka (6) and Hong Kong (jointly ranked 8). Moscow (4), Geneva (5) and Zurich (joint 8) are the most expensive European cities, followed by Copenhagen (10).

Saturday, June 26, 2010

Mah Sing has capacity to borrow more

Jun 26, 2010

KUALA LUMPUR: Mah Sing Group Bhd’s low gearing ratio of 0.05 times as at March 31 has provided the group with the capacity to gear up further, said group managing director and group chief executive Tan Sri Leong Hoy Kum.

At a briefing yesterday, he said that should the company gear up to 0.5 times, there would be about RM400mil available for landbank acquisition.

However, he added that the group was not in a hurry to raise its borrowings as it was in cash flow positive position.

Leong said the group had so far acquired three parcels of land with a gross development value (GDV) of RM712mil and was still on the lookout for more land.

“We are constantly scouting for more landbank. We’re looking at land aggressively everyday,” he said.

As at March 31, Mah Sing has cash and cash equivalents of RM166.9mil.

For the year ended Dec 31, 2009, the group had cash and cash equivalents of RM356.6mil.

Executive director for corporate and investment Steven Ng Poh Seng said the company spent some of its cash in the first quarter to purchase three parcels of land, resulting in the lower cash hoard.

However, he said Mah Sing’s cash and cash equivalents had improved to RM233mil in May.

Leong said should the group decide to raise its gearing up to a 0.5 times, it would be a non issue as it was still “very comfortable”.

Meanwhile, he said the group was confident of achieving its RM1bil sales target for this year as it had achieved sales of RM601mil in the first quarter.

For the three months ended March 31, Mah Sing posted a net profit of RM27.8mil on revenue of RM238.8mil, driven by its residential and commercial projects.

Leong said Mah Sing had a strong earnings sustainability from the combined RM6.3bil in remaining gross development value (GDV) and unbilled sales. Its unbilled sales stood at of RM1.1bil.

“Mah Sing is cautiously optimistic that 2010 will be a good year for the Malaysian property market and backed by a good employment market, strong liquidity and still-conducive interest rate levels,” he said.

The group is also interested to participate in government tenders for land in Sungai Besi and Sungai Buloh to be developed by the private sector.On overseas expansion, Leong said Mah Sing was looking to venture into Vietnam, Singapore, Indonesia and Australia.

Leong said the group had signed a letter of intent on a joint venture basis with 51% stake to develop a mixed development project in Wujin District, Changzhou, China.

He expects overseas projects to contribue 30% to group revenue in the next five years.

Sinkhole fuels public fears

Jun 26, 2010

GEORGE TOWN: A 20m stretch of Kelawai Lane, adjacent to the multi-storey underground carpark of a super-condominium project, has been partly cordoned off after it sank by about a metre, raising fears among residents at nearby high-rise buildings.

According to residents at the seven-storey Desa Mas apartment nearby, cracks started appearing on the road at about 11.30am.

The developer of the super-condominium said remedial work was immediately carried out.

A resident, who identified herself only as Irene, 50, said residents received a letter on May 6 from Hunza Properties Bhd, the developer of the super-condominium, informing them that precautionary measures had been taken to ensure the safety of their building structure.

On the road sinkage, Hunza Properties executive chairman Datuk Khor Teng Tong said:

“All the engineers and consultants were at the site the moment we learnt about the problem. Remedial work with the filling of sand is being carried out to stabilise the ground.”

Upon completion, the Gurney Paragon’s East and West Towers super-condominium will see two 43-storey buildings consisting of 240 units of service apartments.

It will also have a commercial podium and two basement carparks.

State Local Government and Traffic Management Committee chairman Chow Kon Yeow, who inspected the site, said no stop-work order would be issued because problem needed immediate attention.

“The Penang municipal council will be stationing their men at the site to monitor the situation.

“The council and the developer’s engineers will also be checking the buildings around the construction site to ensure they are safe,” he said.

Chow said the road sinkage occurred after sheet piles gave way and caused underground movement of the earth.

“We are expecting a report from the developer tomorrow (today),” he said.

Monday, June 21, 2010

Make tenants sign agreement, landlords told

newsdesk@thestar.com.my | Jun 21, 2010

KOTA KINABALU: Landlords can ask their tenants to sign a power supply agreement with Sabah Electricity Sdn Bhd (SESB) to avoid being saddled with unpaid utility bills.

Its corporate communications manager Chendramata Sinteh said tenants could sign a direct agreement with SESB even though the electricity meter is registered under the name of the landlord.

“With tenants signing a power supply agreement with SESB, we can pursue and take action against the tenants directly if they fail to pay the bills.

“Under the agreement, the tenants must settle the power bills before they leave the rented house or premises,” she said when commenting on the problems faced by landlords in Peninsular Malaysia where tenants leave them with unpaid bills.

The issue was highlighted by MCA Public Services and Complaints Bureau head Datuk Michael Chong last week when he disclosed that they had received 29 complaints from landlords about tenants leaving them with bills amounting to RM216,348.

Chendramata, however, said such cases were not rampant in Sabah and explained that the numbers were negligible.

However, she said it was important for landlords to take precautionary measures by making the tenants sign a supply agreement with SESB.

Alternatively, they could make regular checks with SESB to ensure that their tenants were paying their bills, she added.

Though SESB claims that there are not many such cases in Sabah, many landlords have experienced the problem and ended up paying unpaid bills left by their tenants.

“I had to pay nearly RM2,000 in bills that were unpaid for eight months. SESB told me it was my responsibility,” said one landlord who declined to be named.

He said what was more annoying was that no steps were taken by SESB to cut the power supply despite the tenant defaulting on the payments.

Thursday, June 17, 2010

Academician turned property millionaire

By Sherry Koh | June 17, 2010

Despite his unassuming and jokester demeanour, Yee, 53, is someone who stays strongly focused on his goals. He has compiled a long list of academic qualifications through the years and has also paid many “tuition fees” (errors in property investment) since he started investing in his late 30s.

His never-give-up attitude has led him towards the much-desired path of financial freedom. To him, there is no such thing as failure, just learning. He has started businesses and failed. But he never saw those experiences as a failure despite what some might have branded him. He continued acquiring non-academic knowledge and finally found his riches via property investment.

Today, he lives in his dream house with a panoramic view of Kuala Lumpur’s city centre. The dream home closely resembles a sketch of a house on a hill that he drew in year 2000 and stuck onto the door of his wardrobe.

His tenacity might remind people of Yoda’s (Jedi Master from the Star Wars universe created by George Lucas) worldwide-known gems of advice - Do or do not. There is no try. StarProperty.my visited Dr Peter Yee at his office in Selayang, played the 'Success' board game he created and chatted about his interesting journey towards financial freedom.

Tell us about your journey towards financial freedom.
I spent too much time studying. That was my mistake. I went to five different universities, including the ones in Japan and the USA. I bought my first bungalow in my late 30s. Before that, it was just “break-even” every day. Basic education is important. But if I were to get a degree and immediately focus on making money, the results would’ve been different. A lot of my new friends and neighbours are not highly educated, but they make a lot of money because they focus their time on making money. That’s why my third book’s topic has changed. It will be about making money.

You should never give up in life, regardless of your age. There’s no such thing as failure. I have started businesses and closed them down. People might say that I am a failure, but I don’t think so. Instead, I change. This is because some businesses were not be suitable for me.

You were a teacher and remisier before. Did those experiences have a major impact on your life?
In year 2002, I was a school teacher and was posted to Kuala Terengganu. I was bonded for seven years as I took the Government’s scholarship. I wanted to leave to do business but I couldn’t because I did not have the RM100,000 to return to the Government. At that time, I had a house in Kuala Lumpur. It was sometimes rented out, and sometimes my family and I stayed for a while. An important learning is to invest in properties near you, maybe within 30 minutes, especially for residential properties. It is easier for tenant management and property maintenance.

My second scholarship was to Japan to study computer algorithm. It was a four-year contract. I served two years and paid back half the sum, RM15,000. I came back (Kuala Lumpur) to do management training for a college. It wasn’t easy because I was sent outstation all over Malaysia. One week in Penang, one week in Kuantan and so on. I did not like that kind of life. So I resigned and started my own training company that is similar like now, but smaller. Universities don’t teach living skills, how to make money or how to live a better life.

I needed sales. Everyday my staff asks, “Boss, what to do.” [laughs]. Nine months after starting the business, I became very depressed because there were no sales. So I shut down the business and became a remisier. I sold off the only house I have and paid a deposit of RM50,000, after negotiating with the company.

From all these, I learnt that in order to move forward, one needs to change to go on a different career path and also learn to sacrifice.

As a remisier, the income was good. In one month, one could make between RM30,000 to RM50,000, and sometimes more. In a year, there are maybe one or two good months. The other months, "sleeping" time. When it was busy, I talked until my cheek hurt. When it was quiet, there’s maybe one call per day. When the market was busy, I had four phones. That’s too busy! After five years, I decided that the job was not suitable and I attending a course called ‘Money and You’.

Actually, I attended many self-development courses to find out what was wrong with me. I found out that there was nothing wrong with me. There’s something wrong with my formal education! So I had to complement my formal education with not-so-formal education. In that seminar (Money and You), they said, “Do you like what you do?” If you don’t like, then you are like a prostitute. You only like the money, but you don’t like the job." Then I thought, “Eh! I feel like a prostitute.” [laughs]. So I resigned and managed to pull out some capital from the deposit . That is the beginning of my property investment career.

At that time, my wife was also looking for a location for a business. And that’s why I came to Selayang. We found a place with a 3+2 agreement, meaning 3 years of fixed rent, while 2 years float. After three years, there was some money coming in. So, I approached the landlord and he increased my rental from RM1,200 to RM2,200. When I asked him to reduce the rent, he shouted at me, “If you don’t like, many other people want to rent!”

It was very hard for me to accept that the world is so merciless. It won’t work to pay him endlessly. So we did something for ourselves. So we really thank that man, Mr Chan. Because of him, we have many shops now. Otherwise, we would still be renting.

What’s the board game about? Why did you create it?
I created the board game about 10 years ago. At that time, I like to play board game. You know, Robert Kiyosaki’s cash flow game? I enjoyed that game very much but I feel that his game missed something out. His game focuses mainly on financial intelligence. In life, finance is one of the important parts. But what about the other parts? Personal, health, relationship with family. So in my board game, we have financial intelligence but we added other aspects. Emotion, relationship, career, society, health and knowledge. It’s about how you balance these six aspects. For example, if you spend more time to make money from your job, then you will spend less time with your family. So how do you balance?

But then, when you talk about balance, if you don’t have passive income, how are you going to balance? So, that’s why I wrote this book (You Can Become Rich In Property). If you have passive income, then it frees you. This means more free time to balance other things.

The second book (The Certain Way To Life’s Riches) is about laws of attraction, about how to make things happen. People usually only look at the results. They don’t look at the steps. So I give them the steps.

How long did it take for you to build your dream home?
During a meeting with my friends, everyone set their goal. We wrote it down and presented to one another. This is my picture [shows a sketch that’s included in his book]. I wanted a house on a hill. That’s the beginning.

I bought three bungalows on separate occasions, but they were not suitable. Later on, I sold one condo to buy a piece of land and I sold one shop to build the house. And this is the view I see [showing another picture in his book]. Compared to the sketch, it’s quite similar, but the duration took about six years.

So I believe that anybody can create their own things as long as they really want it and really focus on it. The result is that my dream house is actually free.

How long have you stayed in your dream home?
About five years. It is just five minutes from this shop. So, if there’s anything that you want, write it down. And then list the steps on how to make it happen. I put my sketch in front of my bed and looked at my drawing in the morning, during transient periods and before I sleep. It has to do with mindset. Whatever I did , it was all to realise my dream house.

What kind of challenges did you face in that six years, while achieving your goal?
There were challenges! For example, there was one house was attracted to me. Initially, the owner wanted to sell it for RM400,000, but I did not have the money. But I still wanted the house. I was renting then. I said to myself, “I want!. But no money, how to buy?”. Six months later, the seller asked, “You want the house or not?”. I answered I want! So the seller said, “Why? What happened? Is it the price?”. I told the seller that it was the price and she said, “OK. I’ll come to your house. We talk.”

After negotiating, the seller agreed to RM365,000. So I bought the house. I just had enough for the 10% down payment. I was a remisier then. I wanted to speed up the process. So I speculated in the market and I lost half of the money! I was supposed to sign the S&P (Sales & Purchase Agreement) within two weeks. It took a few months for me! [laughs].

The seller waited for you?

What are the other examples of laws of attraction that worked in your favour?
There was one from the auction market. I went all the way to Shah Alam to bid for it and I got it. Initially, the seller asked for RM330,000. But I did not have enough money, so I ignored it. Then the seller called me back and reduced to RM300,000 three months later. Six months later, the seller called me again and reduced further to RM264,000.

It’s things like that. It attracts, as long as your mind persists on having something, whatever it may be.

What is your property portfolio like?
Mixed. Some from auction and some from sub-sale (existing buildings).

From your property investments, what are some of the key learning?
It is better to stay on landed property as the rental is not as good. So you rent to yourself.

After I resigned as a remisier, I went to a property exhibition. Within a day, I bought two properties with cash (from my remisier deposit). My learning is to never buy property like that. You must do some research.

There’s another one where the sales person told me that the property will be completed with CF (Certificate of Fitness) within a week. It took one year and the price went down.

It was RM143,000 during launch and the current market value is about RM130,000.

Do you still have that property?
Yes. It is still rented out. Another lesson is to never take free advice [laughs]. I had a friend who stayed in an apartment who told me that the area has an investment future. So I bought two units. I bought it at RM80,000 in year 2000 and another unit at RM85,000. The market value now is about RM75,000. But in life, you should never give up also [laughs]. Even if you made a wrong decision already, you can still make it right. So I averaged it by buying three more units at RM53,000, RM47,000 and RM56,000. The average investment is less than RM75,000. So, never give up on life. Think positive.

Do you still have these five units?
Yes, still keeping all.

Any other examples?
There is one unit that I bought from a company. It took six months to negotiate. There were three directors. Two will agree, then the other disagrees. Two will sign the cheque, and the other one is overseas. My learning? Buying property needs patience, especially when you want to get below market price. I also learnt to not buy properties that are too far away. When a property is near you, it is easy for you to go and see. Now, it is easier still because I live on a hill. So I just need to see if the rented units have lights on at night [laughs].

I also bought a land with 20 other people. I am a minor shareholder. The market value at that time is RM20 million. Now the price has gone up. RM20 million has become RM40 million. My learning is that capital gain is mostly from the land. Building gives you the cash flow. Building is a deteriorated cost. It needs repair.

What happened to the land?
A developer is planning to build a 5-storey strata title shops. That is the best deal. The land appreciates, then you build your own and make money all the way.

What’s your passive income?
Sometimes more, sometimes less. I am also not sure of the exact figure. But it is more than enough to cover my expenses. I am financially free, because my properties' passive income is enough to support my expenditure. My personal expenditure is very low.

What types of courses or seminars do you conduct?
We have a few property courses conducted at this centre. I even give a one-year free coaching. This is because of the mission I set, hence I do not mind as long as they purchase properties. My seminars are available for a few hundred Ringgit only. It is cheaper, but they have to come here (Selayang). After my class, when the participants are not sure if they should purchase a property or not, they can make an appointment with me. I will give my opinion so that they will make less mistakes.

I will also give relevant CDs, advise on recommended readings and all details necessary for them to get started. There are three courses. One is How to Make Money from Residential Property with Little/ No-Money-Down. This one is suitable for those who are new to property investment, for those with no property yet and little savings. They will learn about money management, what is financial freedom, what is No-Money-Down, how to manage tenant and eventually buy their own home.

Second one is How to Make Money from Commercial Property?. This course is for those with some savings between RM100,000 and RM200,000. It is not advisable for beginners to attend. If they attend, they will learn the best techniques, but when they go back, they will get stressed out because they cannot go forward. From each commercial property deal, one can make RM50,000 to RM100,000. But one would need some capital.

I make the learning easy and I share a checklist which I use as well.

What if there is only one participant? Do you still conduct the workshop?
No. At least 10 people.

What’s the third workshop?
It is How to Make Money from Auction Property?. You can make a lot of money from auction properties, if you know how to. But there is a lot of risk as well. If you are interested in commercial auction, then it is better for you to attend the commercial class first.

What’s your next goal?
You really want to know? [laughs]. We want to create a balanced life city called Inova city. A city where people work and play. I have 30 years to do it. So I will continue working until then. It is based on the concept of a balanced life. For example, a mother who works close to her child’s day care centre.

Any advice for people who wants to start investing, apart from coming to your workshops?
Read up, especially those from local authors, and subsequently read those from the international scene. And then, attend all the suitable seminars.

Do you have any specific go-to strategies?
It depends. For No-Money-Down, use as little of your own money and look for properties below market price. Stretch the loan, rent out the place and make sure that rental is more than the instalment. After that, go for your second one. Make sure that the instalments do not eat into your salary. After second one, go for your third one. Maybe purchase one property every three to six months.

What is the best and worst advice you have received?
The worst advice I received was free advice. [laughs]

Unless it is from someone who knows better!
Yes. Correct. The best advice I received was also free advice from a professional. We knew each other from the property field. He gave me one good advice, which is to buy property in a rich man’s area, not in a poor man’s area. I took that advice and made a lot of money.

But not everyone can afford those areas.
[laughs] So, begin with a poor man’s area for cash flow. Whether the market iis up or down, you can still get tenants. When people buy bungalows, it is like buying dreams. Like my dream home, I didn’t care how much. I just wanted it. Many rich people got richer dreams, so they are willing to pay the price.

For information on Dr Peter Yee’s one-day workshops, visit www.balancelifesuccess.com, e-mail info@balancelifesuccess.com or call 017-2491077.

Lebanese struggle to find homes as market prices soar

By AFP | Jun 17, 2010

As property markets around the world struggle to recover in the wake of the economic crisis, Lebanon's real estate sector is at an all-time high, leaving many people desperate for affordable housing.

Amid a rare political detente in the normally turbulent Mediterranean country, property sales jumped 41 percent in the first quarter of 2010 compared with the same period last year, to a record 3.2 trillion Lebanese pounds (2.1 billion dollars, 1.7 billion euros), according to the Directorate of Real Estate.

Mortgage rates are currently between four and six percent.Much of the demand stems from abroad as the liberal Middle Eastern country is a popular attraction for clients from the oil- and cash-rich Gulf nations seeking holiday homes, as well as from Lebanese expatriates.

Lebanon lays claim to a large diaspora, estimated to be at least twice its resident population of four million, and remittances from expats -- a hefty six to seven billion dollars annually -- are a lifeline for the country's economy.

"There's a clear rise in both local population and emigration," said Marwan Hamadeh of the Beirut-based Sogetim realtors.

"Those who leave are generally qualified people. Their salaries here were 3,000 dollars and abroad they're making at least double that," Hamadeh told AFP."And they are still Lebanese -- they want to maintain their roots here so they in part are setting market prices."

But as the financial success of a growing expatriate community fuels rising demand, many resident Lebanese are left struggling to find homes."I myself want to own property, but I do not," said Rami Babik, a financial analyst based in the capital.

"I've been looking for a while now and it's just too expensive even outside Beirut," he told AFP. "I tried to find something in or just outside the capital, but prices are hilarious.

"Prices in the "golden triangle" of the capital -- Ras Beirut, Ashrafieh and the central district -- now start at 3,000 dollars a square metre for a first-floor apartment and can run as high as 15,000 dollars.

A hard-to-come-by 150-square-metre apartment in that area may sell for well above one million dollars as demand far outstrips supply.

"There are small flats for sale across Beirut," Hamadeh said. "The difference is that they now sell for double the average price per metre or more."

Outside the business and university hubs, in the traditional Gemmayzeh quarters, a small flat sells for close to half a million dollars as investors fight for space in an overpopulated city of a mere 18 square kilometres (seven square miles).And while the government has no plans to control property prices, experts including central bank governor Riad Salameh continuously argue that the rising valuation is no bubble.

"The growth of Lebanon's real estate is natural and normal and will not collapse," Salameh said in a recent conference.

Hamadeh agrees: "There won't be a collapse, first because no one is borrowing money to build, so they do not have to compromise their prices and there is no risk of bankruptcy.

"Sales have more than doubled in the past four years," he added in reference to the end of a devastating 2006 war between Hezbollah and its arch-foe Israel, which destroyed much of the country's major infrastructure.

But despite Beirut's comeback, many are still hesitant to invest in a country they fear could descend into anarchy and war at any given moment.

"We would never move back to Lebanon to live there permanently," said Hiba Sahyouni, who lives with her husband in Vancouver in Canada. "There are too many factors against moving back or owning property."

Wednesday, June 16, 2010

IJM Prop, Angkasa scrap building plan

Business Times Wednesday, June 16, 2010, 11.35 PM

IJM Land Bhd said its unit IJM Properties Sdn Bhd and Angkasa Gagah Sdn Bhd, a unit of IGB Corp Bhd, have scrapped a plan to build residential property in Setapak, Selangor.

Both parties signed a deal for the project in October 2006.

IJM did not say why they aborted it but said that it needed regulatory approval for the project.

Outrage over assessment rates

By Story and photo by OH ING YEEN
ingyeen@thestar.com.my | Jun 16, 2010

VILLAGERS of Kampung Baru Batu 11 Cheras were shocked when they received letters from the Kajang Municipal Council (MPKj) stating that the new assessment rates are almost four times higher than the current one.

Wong Kim Fong’s current assessment tax is RM92.40, but the new rate is RM418, a staggering four-fold increase.

“I would not mind if they had raised it a little, but not more than four times. Both my wife and I are retirees and my two sons are the breadwinners of the family,” the 73-year-old said.

He was among the 70% of villagers who received the notices about two weeks ago from MPKj informing them about the new rates that would be enforced next month.

MCA publicity chief Datuk Yap Pian Hon said he had received complaints from the residents.

He said the increase in assessment tax for the new village contradicted the recent announcement by State Local Government Committee chairman Ronnie Liu.

“It was recently reported that Liu had said that the state government is doing well and would not be increasing the assessment taxes this year,” Yap said.

He pointed out that while the council allowed villagers to file in objections by June 13, it was not logical as it was a Sunday.

“Who will be at the council to receive the objections on a Sunday? Hence, the villagers actually have till June 11.

“By stating the final date for objection is June 13, they are denying villagers the chance to submit on time,” he said.

He added that according to the Local Government Act 1976, MPKj must refer to the state government for the new assessment rate to be endorsed and gazetted before requiring the residents to pay the taxes.

“As stated in Section 143 (3) of the Local Government Act 1976, the council cannot require residents to pay according to the new rates before the state government endorses it,” Yap said.

Hong Kong to probe why record flat sale fell though

By AFP | Jun 16, 2010

Hong Kong officials said Wednesday they will look into the controversial sale of a luxury flat that fell through months after its developer said it had snatched world-record price.

Property giant Henderson Land Development revealed on Tuesday that sales of as many as 20 out of the 24 units at "39 Conduit Road", its residential project in the Mid-Levels district, had been cancelled.

The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October was sold for 56.6 million US dollars.

Critics demanded a probe into the collapse and asked why the cancellations only came to light eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble.

A government spokesman said Wednesday it would look into the matter "to consider the next step". "Clear market information and transparent sales arrangements and transaction records are important to flat buyers," it said. "The government is determined to create a fairer and a more transparent environment for flat purchasers."

Tycoon Lee Shau-kee, chairman of Henderson, told reporters he was not bothered by the scrapped deals, which amounted to 734 million Hong Kong dollars (94 million US).

"I may be able to sell them for more," the South China Morning Post quoted him as saying. Lee also stressed that he could not cut the prices of the flats.

Henderson has also been condemned for being unscrupulous and misleading by selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers. The supposed 68th floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports.

But it was so numbered because "68" sounds like "continuing fortune" in Chinese and is considered lucky. "The government should do much more to rein in the developers and stop them from deploying questionable tactics to boost sales," said Albert Ho, chairman of Democratic Party.

Investors ignore signs and pile into property

June 16, 2010

AUSTRALIANS are diving into negatively geared property even as the Reserve Bank signals that another interest rate rise could be only weeks away.

Figures from the Bureau of Statistics show that while lending to buy homes in which to live fell a seasonally adjusted 10 per cent in the first four months of the year, lending to property investors rose 11 per cent. In the past year lending to investors rose 30 per cent nationwide, and 20 per cent in NSW.

''These investors aren't concerned about interest rates,'' said a BIS Shrapnel analyst, Angie Zigomanis. ''They can see prices rising and real estate looks a safer bet than the stockmarket.''

Investment guru warns Australia facing housing bubble

By AFP | Jun 16, 2010

US investment guru Jeremy Grantham has warned Australia is facing a "time bomb" housing bubble that will be set off by rising interest rates, a report said on Wednesday. Grantham, who correctly predicted the financial crisis a year before it hit, said Australian house prices needed to fall 42 percent to reach the long-term trend.

"You cannot possibly miss it," he told The Australian newspaper. "The price of housing typically trades about 3.5 times of family income and in a bubble it goes to six or 7.5 times."Australia is having one now.

You are at near 7.5 times family income... which suggests you are twice the size you should be."He said Australian prices, which have been rising for more than a decade, needed to slide 42 percent to return to the long-term trend.

Grantham, co-founder of global investment company GMO who has made a career out of identifying speculative bubbles, said British house prices were also over-inflated, The Australian said.

Australia's central bank has raised interest rates six times since October -- off five-decade lows -- to head off inflation, increasing pressure on home-owners.

Grantham said if Australian housing did not return to the normal multiple of family income, "it will be the first time in history". "Sooner or later, the rates will go up and the game is over," he warned.

Tuesday, June 15, 2010

Tan denies allegation on Pudu Jail land

PETALING JAYA (June 15, 2010):

Tycoon Tan Sri Vincent Tan Chee Yioun today denied Opposition Leader Datuk Seri Anwar Ibrahim’s allegation made in the Dewan Rakyat yesterday that the Pudu Jail land had been handed over to a company linked to the Berjaya Corp boss.

"I wish to state categorically that Datuk Seri Anwar’s statement made in Parliament and reported in the papers alleging that the Pudu Jail land owned by UDA has been handed over to a company linked to me is entirely false, misleading and malicious,

"I have absolutely nothing to do with this company and I challenge Datuk Seri Anwar to provide proof failing which he should apologise publicly to me," said Tan in a statement.

He said Anwar, during the debate on the 10th Malaysia Plan, had further alleged that contracts worth billions of ringgit were given to him and two other named tycoons.

Tan said: "I wish to state that neither my private company nor Berjaya Corporation has received billion-ringgit contracts paid for by the Treasury.

"Our group’s bid for concessions, when successful, has invested hundreds of millions to develop such concessions, e.g. 3G with U-Mobile, Bukit Tagar Sanitary Landfill and Lido Boulevard Reclamation Project.

"Our group has no construction company and therefore has no billion-dollar construction contracts from the government. Datuk Seri Anwar should back up his allegations with proof."

Yesterday, the Parti Keadilan Rakyat de facto leader said the air force base development contract in Sungai Besi was given to a consortium involving 1MDB and Malton.

He had also said Malton was linked to Datuk Desmond Lim.

Expressing scepticism over the programmes under the plan, he said despite the government’s announcement of adopting open tenders in awarding contracts, it was still giving projects worth billions to certain individuals and companies.

He named YTL Corporation managing director Tan Sri Francis Yeoh, Tan, corporate figure Tan Sri Syed Mokhtar Al-Bukhary and those in their class as the ones awarded such big projects.

Prime Minister Datuk Seri Najib Abdul Razak, when approached after a function yesterday, said he will respond to Anwar’s allegations in the Dewan Rakyat.

Meanwhile, in an e-mail reply to theSun, Malton Bhd managing director Joseph Chong said: "Malton has not been awarded any contracts under the 10th Malaysia Plan."

He also denied the company and its subsidiaries have any involvement in the consortium with 1Malaysia Development Bhd on the Sungai Besi air force base development contract.

Updated: 10:01PM Tue, 15 Jun 2010

Greater KL and the myth of development

Delimma; Jun 15, 10; 3:01pm

The commentary by OSK Research on their concerns that the development of a financial district and redevelopment of Kg Baru, Sg Besi Airforce base and Sungai Buloh would result in a commercial glut to KL has brought about some critical issues that ought to be viewed seriously by the government. The reputable local economic research house's comments and glaring views on the government's plan to create a greater KL; comes at a crucial time where the 10MP will be debated, elaborated and decided upon by Parliament this coming two weeks.

The 10th MP unveiled last week by the prime minister sets a very audacious tone in re-engineering Malaysia's growth from a middle income economy to a high income and performance country. That the services and industrial sectors are seen as key drivers towards achieving this goal is not surprising, given that both sectors contributed a massive 90% towards the national economic figures and growth – from banking, tourism and hospitality to healthcare, manufacturing, trade and oil and gas.

Many have come to expect that the Najib administration would lend its focus towards enhancing and advancing development in these areas. The potential for growth is enormous, and with it the promise to create a better Malaysia for all citizens.

Key to the government's drive in transforming the nation into a high income country lies in the 12 key elements of the New Key Economic Areas or NKEA as announced by the PM in his speech. Apart from the expected industries that will be boosted, Najib has touched some very sensitive issues when proclaiming a greater Kuala Lumpur as the 12th element of the NKEA.

The news came at a time when KL is facing some serious challenges to cope with the enormity of growth and fast paced culture that has turned this once slow moving city in the 50s and 60s into a robust metropolitan of the 21st century.

One of the concerns raised by OSK Research is the government's announcement to redevelop four key landbases of KL within the next five years – a financial district, the 400 acres of the Sg Besi airport, Kg Baru and the massive 3,300 acres planned for urban development in Sg Buloh. According to media reports, OSK Research expressed concern that redevelopment of these massive landbanks would result in further dire for the property market in KL, which if their figure is correct, is already facing a 17% glut in occupation and tenancy.

It takes no rocket scientist to figure out that OSK's figures might be too conservative, given the fact that most buildings in KL are at least 30-40% empty due to the recent economic downturn and high supply as opposed to demand. With new buildings being built and refurbished, I wonder why such figures were not announced earlier. Is the property development sector trying to 'hide' their true state of affairs? Even if the figure is correct, why in world would property developers such as Tong Kooi Ong, Krishnan Tan and even the Naza family still building and developing office space and property in KL?

Could there have been an oversight on their part before embarking on huge projects totalling billions of ringgit? I believe oversight is not an issue here given their expertise and years of experience. Yet they are still building and building – for reasons only known to them at that time. But with the figures out now, I believe it will further dampen the property market. But don't expect property prices to fall as yet.

Property prices in KL will drop if these mega-projects are embarked upon, that's what OSK fears. Whilst it is a good thing for buyers and prospective tenants alike, there are several points that we need to look into first before we can celebrate an early Hari Raya or Christmas this year.

Firstly, there is this notion of 'tight-lipped' among property developers in KL. Most of them remain quiet and deny any glut (what has OSK done?); and always paint a positive outlook on the market. That the PM's announcement has caused severe repercussions for them is one main reason for their sudden revelation. But aren't these developments in a way unconnected to the city centre?

Except for Kg Baru and the financial district, the other two developments seem to be developed further away from the Golden Triangle. What have other research houses and property developers have to say to this? Only OSK has concerns and not the rest, perhaps, but time will tell.

There is more to this argument than just property value and traffic jams. Najib has announced that these mega projects would be developed within five years to boost the economy, create jobs, lessen the pressure on KL and provide alternatives for businesses. But anybody who has done property development knows that to develop some of these landbanks will take a few years, let alone building an entire area bigger than the Golden Triangle. In my opinion, it is impossible.

Najib made the announcement in the belief that it will spur investors from within and abroad to favour KL as compared to other growing cities in the region – Jakarta, Hanoi, even Banda Aceh. He is hoping money, especially from Middle East allies will flow into Malaysia to spur the development projects. That some money will come is not a doubt and we are confident Najib is savvy enough to have already secured some foreign funds before making the announcement.

But these monies do not come in free; there is always a price tag to it. No honest and clever investor would invest in something that does not give returns to them. Investors would expect return within five years from their investment. But could the projects be 100% completed within five years?

Let's take an example, Say if the government wishes to develop the old Sg Besi airport. The land is situated at a very strategic point that would ease traffic congestion in KL as well as create a new business centre akin to Petaling Jaya, there's no doubt about it. Let's say the government has secured a few billion ringgit in foreign funding to spur the project. Do you think the investors would want to build the entire 400 acres in one go?

A good business mindset would be to build the area in stages, with let's say 10-20% maximum at a time. Why? Simple demand and supply issues – built some of it, test the market, get the sales in and then only develop some more.

Property development cannot happen in one go unless it is a government project like Putrajaya (which also took 10 years to be where we are now and it's still what, 60% completed?). Sane property developers would develop projects of such magnitude and size in stages to ensure maximum returns - or in commercial words - amplifying their return of investment (ROI).

Thus it would be impossible for the government to achieve this enormous task within the 10MP. Now, where is the wealth creation factor here for Malaysians in general and KL-rians in particular? This has to be revealed and properly explained.

Secondly, God knows DBKL, the Land Office and even the government is trying to work as fast as possible in approving development projects but it would take at least 1-2 years to get the necessary approvals and commissioning even before the project could kick-start; and another 2-3 years for development and completion, safety tests, certificates etc etc. That's five years for you, and at the end of the 10MP, we have developed only a maximum of 20% of the land area concerned.

Let's say the same applies to all the other land, including Kg Baru. We have to keep in mind the next general election would come before the end of the five years of the 10MP. So, what will the government have to show to voters during the polls in terms of development and wealth creation? How is it possible for the government to create a high income society within five years from these projects alone?

A greater KL? It would take at least five years for people to start purchasing, renting or even moving to these areas. How can it ease traffic congestion in the meantime, or even provide an alternative to businesses in the next five years?

Thirdly, for Kg Baru folks, I am inclined to advise that their aspirations are more fantasy than reality, and I shudder to think if any development can actually happen within the 10MP when prevailing critical issues as to land titles and status, the local plan as well as the yet-to-be-formed development authority has yet to be resolved. If it takes 1-2 years for these issues to be amicably settled, then development will only start after the 10MP (maybe during the 11MP).

And that would only comprise 20% of the area. So how can Kg Baru become a catalyst for higher income growth in KL at present? Even Malay GLCs such as PNB and Tabung Haji would be careful in its investment for Kg Baru, less they want to show poor returns to the public yearly who have invested their life in these institutions.

Fourthly, the government is yet to explain the real definition of greater KL to the public. Since KL is a prison of sorts in terms of land, to a layman like me, greater KL would mean to expand its borders...is this the case here? Will the land in Sg Buloh be declared part of the Federal Territories? It would create a bigger issue taken the fact that at present, the governing body for the land is under opposition administration and the state government has already expressed its disappointment at being 'left out' of the 10MP. Will this throw a spanner in Najib's plans to develop the Sg Buloh landbank?

Again some explanation would curtail my foolish fears. For the people of KL, a greater KL would have to mean better standards of living, better housing for the poor, more economic opportunities for small businesses and better urban management especially in public transportation. The government has yet to announce its plans to resolve the sale of low cost government housing to the poor in KL. It comes to mind that the government had decided to sell about 42,000 units (if I'm not mistaken) and the offer to purchase has been overwhelming.

But I am saddened by the fact that at present only about 20% of the units could be sold as most of the prospective purchasers could not obtain loans – how can they when they are mostly low income self-earners without payslips and even worst, some have prevailing problems in even meeting the meagre RM128 a month rental charged by the government on their units.

Isn't there a better solution, perhaps the government offering the units on a hire-purchase scheme at the same monthly rate of RM128 instead of asking them to go out and get loans which is almost impossible in their state?

In terms of economic opportunities the government should come out with plans and strategies to aid small businesses and hawkers residing in KL. Most of them aren't able to obtain loans from banks due to the small nature of their business and as such agencies such as Mara and Tekun have to step on the plate to be counted upon. The recent mishap on the handling of an East- Malaysian Bumi girl's small loan application by Mara as reported smacks of the current predicament facing would be small business holders – if even institutions supposed to aid them like Mara can come out with preposterous reasoning and conditions not to give out loans instead of sound financial advice and aid to ensure that the business can actually grow and the application approved; how can the government actually realise its aims to help them?


The government need to clarify this matter – loan approvals aside, all applicants should be assisted to ensure that their business can grow and how their rejected applications can be turned into approved ones. Mara is not a bank governed by stringent fiscal rules, instead it is a bastion for bumi small businesses to prosper and climb the equity ladder. The sooner this pristine institution realises this and cleans up its house to come out with better service, the sooner with small businesses prosper in KL, and Mara no longer a laughing stock of the bumi community for seemingly failing when it matters most.

More highways do not necessarily translate to less traffic, on the contrary, more highways bring more traffic into the city. This was the mistake done by previous administrations and Najib plans to develop an underground transport system akin to that in New York, London and Tokyo as a means to eradicate this myopia. Good intentions, but will it work? Can KL be dug up without some building falling due to the soft grounds in which this city was built upon? Here's a lesson in history to the administrators and planners.

What these foreign governments did was to develop a transport network from one that already existed to cater for their population's safety during the world wars. The tunnels were already dug so that people can travel around town in safety from bombs and guns; and rather than being abandoned they are put to good use as part of the urban development process.

For a city like KL, the government plans to dig underneath existing buildings to build the new underground transport system (whatever it might be called later). Is this move a wise or even safe one to make, given the existing conditions of the soil in KL? What have the environmentalists got to say to this, will this be a good move to curb the ever increasing screams of frustrated road users due to the hiking number of road vehicles? This is a no-win situation in my view.

Whilst the government intends to mitigate jams and transport problems by building the underground rail or whatever, its policies of encouraging vehicle purchase negates every single bit of advantage the alternative system provides. Will this change in the 10MP? It would adversely affect Proton, Perodua (which is partly owned by PNB now after it haphazardly bought into the dimming and volatile automotive industry business through its acquisition of some UMW Toyota shares) and other car makers. Are we prepared for this?

All of the above points to a rocky road ahead for Malaysia in the 10MP. To pave the path to success is not easy, to walk it is even harder. The government has a lot of strategising to do, a whole lot more of explanation to give to the people and ultimately, a short period of five years (or less given the next election is less than three years away) to prove its worth.

Luck is not even a factor here. Facts and figures speak for themselves, and currently, it doesn't point to an easy ride, does it?

Monday, June 14, 2010

Show proof or shut up, Zahrain tells Anwar

By Hemananthani Sivanandam and Husna Yusop

KUALA LUMPUR (June 14, 2010): Independent MP Datuk Seri Zahrain Mohamed Hashim (Bayan Baru) today challenged Opposition leader Datuk Seri Anwar Ibrahim to show evidence that he left Parti Keadilan Rakyat (PKR) after receiving a RM2 million incentive, or "shut up".

Speaking at a press conference, Zahrain said he was "sick and tired" of the Permatan Pauh MP's allegations.

"I don’t want him to twist and turn things anymore, like what he did with the Sept 16 takeover news. My question is what is he waiting for?"

Earlier in the Dewan, Zahrain interrupted Anwar's speech on the 10th Malaysia Plan and accused him of lying and demanded proof from Anwar to back his allegation that certain independent MPs were paid to defect.

To this, Anwar stood his ground and said he will reveal the evidence "when the time is right".

Anwar had earlier told the House he will expose middlemen involved in delivering millions of ringgit to those who hopped-over at the right time.

"Congratulations. New car, nice house. Everybody in Penang know about it," he jibed.

At the PKR congress in Kota Baru two weeks ago, Anwar had alleged that former PKR MPs who turned independent had received RM2 million from the federal government to resign from the party.

Apart from Zahrain, four others are Wee Chee Keong (Wangsa Maju), Zulkifli Noordin (Kulim Bandar Baru), Tan Tee Beng (Nibong Tebal) and Mohsin Fadzli Samsuri (Bagan Serai). Zulkifli however was sacked for disciplinary issues.

"Parliament is the best place to reveal everything if he has evidence. He is playing childish politics. If he has no proof, shut up and don’t talk," said Zahrain.

In his debate, Anwar also alleged that the Pudu Jail land, originally owned by government-linked UDA, has been handed over to a company linked to (Berjaya Corp boss) Tan Sri Vincent Tan.

He said the list of government properties which will be given to certain quarters in the name of privatisation and to encourage private investment will "become longer every month".

He said contracts worth billions of ringgit are given to the same people -- "Tan Sri Francis Yeoh, Tan Sri Vincent Tan, Tan Sri Syed Mokhtar and those in their class".

As a form of returns, he said several management appointments are given to the Malays as a sign that the government was defending their rights.

He said despite the transparency and open tender announced in the New Economic Model (NEM), the government’s corporatisation effort has benefited only a few companies.

He called for an independent commission to be set up to investigate the individuals, including former ministers and VIPs, who were involved in these projects and had deprived the deserving, especially the bumiputras, from their rights.

"And the latest, Sungai Besi (airforce camp base), spontaneously, it was given to a consortium involving 1Malaysia Development Bhd and Malton Bhd," he said.

He said Malton Bhd is a company linked to Datuk Desmond Lim.

Anwar said under the 10MP, the government has listed 52 high-impact projects worth RM62.7 billion and most of them were privatisation projects including the garbage handling concession which would be taken over from the local authorities, seven new toll concessions and two new electricity generating plants.

He said the government would also develop a 3,000 acre piece of government land in Sungai Buloh and government property in the Golden Triangle of Jalan Ampang, Jalan Stonor and Jalan Lidcol.

"For the development in Sentul, YTL has announced gross development value of RM7billion involving 7,000 residential and commercial units.

"Of this, only 800 units were allocated as affordable houses although there are many low-income families in Sentul," he said.

He said another privatisation project was given to Web Power Sdn Bhd which has obtained a 30-year contract to rent 31 helicopters to the police force for RM400million a year.

"In 30 years, the cost would reach RM12 billion," he said, adding the Pakatan-led states would continue to protest the BN government procedure of awarding tender process. -- theSun

Sunday, June 13, 2010

Tenants give landlords 'electric shock'

Sunday June 13, 2010

PETALING JAYA: It is a case of “electric shocks” of a different kind for houseowners.

They are residential landlords left to foot large amounts of power bills, amounting to tens of thousands of ringgit in some cases, not settled by tenants who have moved out.

The landlords are helpless as they are held responsible by Tenaga Nasional Bhd (TNB), and cannot re-connect supply for new tenants or sell their homes without paying the bills.

Many are blaming TNB for their predicament, saying the bills would not have surged to such high figures if the utility company had been strict and cut off supply to errant consumers at the early stages.

The largest unpaid power bill reported to the MCA Public Services and Complaints Department was RM47,483.93!

“And this case concerned a residential property. We have not even touched commercial premises yet,” said department head Datuk Michael Chong.

He said his officers had received 29 reports of such cases since 2008, with unpaid bills amounting to RM216,348.48.

“This is just the tip of the iceberg. Many cases could have gone unreported. I am just as curious to know why TNB allowed the power bills to reach such extravagant sums,” he told The Star.

Several online forums confirmed that the problem was widespread, with many residential property owners expressing frustration with their tenants’ unpaid electricity bills.

“It can be years that tenants did not pay, and it’s unusual that TNB did not cut off the power supply even though the outstanding amount hit four figures. Many (owners) just pay up and forget the whole issue,” commented a consumer who lives in USJ.

Businessman Stanley Sien, 50, said he had to deal with “a recalcitrant” tenant who did not pay rent for a house in Puchong for almost a year and accumulated utility bills totalling RM6,640.34. The power bill alone came up to RM5,774.38.

“What’s worse, the tenant was a TNB employee. When I asked a TNB customer service officer why they had allowed the outstanding amount to balloon, she said the employee could have reconnected the supply on his own.

“She said there was nothing TNB could do to help me,’’ he added, showing the bill that he finally had to settle with TNB.

“There was no progress despite me waiting for many months. I spent RM16,000 repairing the damaged house to rent it out again. I had to pay up in order to get TNB to reconnect the supply,’’ he added.

Lawyer C.V. Devan advised landlords to pursue legal action against defaulting tenants.

“Just sue them. The landlord will most definitely have a strong case because there is a tenancy agreement that the case can fall back on. For cases amounting to less than RM5,000, there is the Small Claims Court where one does not need to hire a lawyer,’’ he added.

Saturday, June 12, 2010

Mortgage or loan term insurance

Saturday June 12, 2010

IN times of old, when we buy a property, it was meant for stay, as the term owner-occupied. Slowly, this was extended, when people bought properties for investment purposes. Realising this venture as a business, financial institutions, which usually finance these investments, started assessing the risks associated with it. Hence the birth of the loan or mortgage related insurance coverage.

Today, in Malaysian there are two main types of housing loan related insurance coverage, called MRTA (mortgage reducing term assurance) and MLTA (mortgage level term assurance). The former was the first to be offered, but both protect the loan borrower against death or total permanent disability (TPD). Basically, in the event of loss of life or TPD (or in some instances also covering critical illness, depending on the terms) the policy will cover the remaining payment obligation due under the housing loan to the bank.

The main differentiation factor lies in the offerings and coverage categories, whereby MRTA acts like a life insurance, the premium is lost in the end, but for MLTA it acts as a term policy, whereby there is cash-back in the event of no claim. Furthermore, the MRTA is a reducing balance coverage, that pays back in accordance with a reducing balance schedule, and at the end of the tenor the payable sum is zero. This is not the same for MLTA whereby the coverage is fixed from start, meaning the person gets cash-back mounting to the sum insured.

While it is easy to see, which options stands out the better, we need to further analyse two more factors. Firstly, it involves the fact that the premium for the MLTA is much higher. This can go to 10 times higher in totality compared to a MRTA premium. Which brings us to the second factor, which is the purpose. The purpose of the home mortgage insurance, if we can remember, is to cover us against TPD and death, whereby our family is not burdened with the financing. If we seek to find a reasonable cost approach and in the MRTA instance, to be financed by the bank via lump sum payment capitalised into the loan, then the choice is obvious.

Let us take an example in order to show the details. Thirty-year old Vaniza Carlos is buying a RM125,000 property, and is taking up a 30-year term 80% loan financing package. She is faced with the option of choosing a loan insurance package, and her friendly insurance agent Cryced sets out the terms as per Table 1.

Which will be your pick?

Just for analysis purposes, in order to equate the total cost of the MLTA to current value (to bring it to MRTA equivalent), using the NPV approach at 10% discount rate (method of derivation which was featured in my previous article), the NPV value works out to about RM9,950, which is effectively only about 3 times higher than the cost for MLTA. Year 2020 is 10 years into the loan agreement, where the outstanding loan sum would have reduced to about 75% of original sum.

Nevertheless, under the bancassurance umbrella, there are many types of term life policies which are not directly linked to the property but offers similar risk coverage. Bancassurance is defined as insurance business being provided by banks of financial institutions. This term was coined after banks started merging with insurance companies, and in combination started offering products with dual, loan and risk coverage facilities, among others. But do be careful, as MRTA and MLTA usually covers main critical illnesses (albeit limited from the full list of known 36 critical illnesses), whereas term life policies differs.

It is interesting to note that banks are now insuring this “business venture” or property investment, and if this can be extended to say a business of setting up a restaurant with an initial cost of RM100,000, with the same terms being applied. Food for thought, isn’t it?

Raymond Roy Tiruchelvam … “I forget what I was taught, I only remember what I learnt” is a business planner with SABIC group of companies

Friday, June 11, 2010

Construction, Property And Utilities Stocks To Benefit From 10MP Announcement

June 11, 2010 13:22 PM

KUALA LUMPUR, June 11 (Bernama) -- The equity market is expected to react positively to the unveiling of the 10th Malaysia Plan (10MP) (2011-2015).

Construction, property and utilities-related stocks are expected to reap the immediate benefits from the announcement of 52 high impact projects worth RM63 billion under the 10MP yesterday, says research houses.

The projects include seven toll highways, two coal power plants and the development of 1335 hectares (3,300 acres) of land in Sungai Buloh.

Also announced was the development of the Sungai Besi airport land in Kuala Lumpur and the KL International Financial District as well as the LNG regasification plant in Melaka.

OSK Research said construction and property would naturally feel the greatest impact from these projects, with the potential beneficiaries being Sarawakian construction players.

Agreeing with this, MIDF Research said it had identified Naim Holdings and Hock Seng Lee as shorter term benefeciaries of the budget.

Malaysian Resources Corporation Bhd (MRCB) is also expected to participate in the various rail projects.

"As for property, while noting that land value could be unlocked with the development of Sungai Buloh, Sungai Besi airport and Kampung Baru, we are concerned that existing commercial property values could be capped if the launch of these new developments is not properly planned," OSK said.

The utilities sector will benefit from plans for a LNG plant and new coal power plants coupled while planned subsidy reductions should help assuage concerns of a looming power crunch.

Another research house, Kenanga Research meanwhile, said contractors with a strong balance sheet would be able to bid more competitively with deferred payment contracts, lower construction cost through buying materials using cash and lower interest rates.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) yesterday, stayed in positive territory throughout the day and finished 1.23 points higher at 1,291.31.

The market though, did not react much to the unveiling of the five-year plan as it fell within market expectation.

"The unveiling of the 10MP did not come with surprises as rumours have preceded the event while plans as well as the broad themes were unveiled earlier.

"Rather, more details were unveiled, such as the estimated cost of a number of public-private partnerships (PPP) projects and confirmation of certain land development rumours," OSK said.


Bolton expects strong profit growth this year

Friday June 11, 2010

PETALING JAYA: The property market looks pretty strong this year partly because access to financing is still “relatively good”, said Bolton Bhd executive chairman Datuk Azman Yahya.

He said the company planned to launch three big projects this year.

The company aims for RM500mil sales in the financial year ended March 31, 2011. Bolton recorded revenue of RM257.5mil for FY10.

“We have seen unprecedented demand for our properties; even the projects we haven’t launched,” Azman told StarBiz after the launch of Bolton Studio yesterday.

Bolton has said it planned to launch a mix residential, retail and commercial projects worth about RM1bil this year.

“Profit growth will be reasonably strong compared with last year as things are looking pretty rosy for the time being,” Azman said.

For FY10, Bolton charted a 51% hike in net profit to RM27.7mil compared with RM18.3mil in FY09

On its newly-launched sales gallery Bolton Studio, Azman said the company hoped to provide its customers additional convenience by having a property showcase under one roof.

“We plan to replicate this sales gallery concept at our township development of Taman Tasik Prima Puchong. Even as we speak, the finishing touches are being put to Bolton Studio Taman Tasik Prima which is expected to be opened by the end of the month,” he said.

He said due to the gallery’s easy accessibility from Kuala Lumpur, Subang Jaya and Shah Alam via well-connected highways, it had since its April opening attracted many curious passer-bys which had resulted in positive sales enquiries.

With a built-up area of about 8,000 sq ft, the gallery features scale models of Bolton’s latest high-end developments of sixceylon, 51 Gurney and Arata.

Each scale model is equipped with a touch screen terminal whereby users can browse and experience a 3-dimension walk-through and find out more information about the respective developments.

Bolton Studio also showcases a live show unit of sixceylon, a 33-storey condominium in Bukit Ceylon featuring 215 units.

The 696 sq ft fully-furnished show unit provides customers with a functional idea on ways to optimise small-sized units to their full potential.

10MP injecting cash for KL 'ghost towns'

Fri, 11 Jun 2010 16:30

By Syed Jaymal Zahiid

KUALA LUMPUR: The DAP's chief economist Tony Pua said the plan to develop the Kuala Lumpur financial district as well as other grand construction projects within the area as outlined in the 10th Malaysia Plan (10MP) is a waste of taxpayers' money.

Pua, the Petaling Jaya Utara MP, said this in support of a report by OSK Research which was published in an online news portal that said such investment was likely to create a commercial property glut.

The report said that the redevelopment of Kampung Baru could destabilise the property market around the KLCC area which is already suffering from a high vacancy rate of 17%.

“The temptation to rush into developments without any regard to the supply-demand dynamics can be very hard to resist in economic boom times.

"It will destabilise the entire market and can be calamitous to all market players in the long run,” said the report.

It stated further that the area would suffer from an overabundance of empty office spaces amid an influx of existing but yet-to-come spaces in the coming few years.

"It is very possible that the area would suffer from a property glut... this is typical of the economic framework where the 10MP is relying on the construction factor to push the economy," Pua told FMT.

The "construction factor", meaning injecting money into the economy through infrastructure developments, cannot generate income on its own, said Pua.

"It must coincide with other initiatives or you will end up creating more office spaces but having no one picking them up," he added.

Crony economics ala Mahathir

The redevelopment of Kampung Baru (right), the KL Financial District and the Sungai Besi Airport were unveiled under the 10MP by Prime Minister Najib Tun Razak in Parliament yesterday.

Pua said the projects reflected Barisan Nasional's bankrupt economic ideas where economic stimulation heavily depended on pump-priming activities.

"This is like what happened under the administration of (then premier) Dr Mahathir Mohamad. It is a simple way of fishing out projects to crony companies."

The first-term MP said much of the promised transparency under Najib's New Economic Model was invalidated by the lack of government assurance that all mega-projects in the plan will be sourced via an open tender process.

Pua argued that the cash should be invested in improving the deplorable education system and industries that ensures healthy competition and economic progress.

As much as RM230 billion will be injected into privatisation-driven activities under the new five-year plan, Najib's first as prime minister.

The sixth premier is facing a stiff test to revive the ailing economy amid opposition to his mass liberalisation efforts by internal and external political foes.

Damansara Jaya residents still fuming over Atria plans

karrwei@thestar.com.my | Jun 11, 2010

DAMANSARA Jaya residents are unhappy that the planning approval for the proposed development at the Atria Shopping Centre site was renewed without their knowledge.

According to Damansara Jaya Residents and Owners Association (DJROA) president Datuk Yew Cheng Hoe, they only found out about the renewal when tenants of the shopping centre were given notices to vacate the lots.

“We’ve been asking for the Traffic Impact Assessment (TIA) and Social Impact Assessment (SIA) from the developer since last year but we only received it this May,” Yew said.

Talks of redeveloping the iconic neighbourhood mall in Damansara Jaya, Petaling Jaya, first surfaced during the last general election in March 2008 and residents protested against the development, citing potential traffic congestion with such a high-density project.

The initial plan submitted to the Petaling Jaya City Council (MBPJ) was for a 33-storey building on top of four levels of shopping podium and 3½ levels of basement parking, which was eventually scaled down to 22 storeys.

When the planning approval expired after a year, the developers applied for a renewal of the permit.

It was during a meeting with the developers in April 2009 that residents asked for the TIA and SIA.

“One of the conditions under the renewal of the planning approval was that no further decisions can be made unless they submit the TIA and SIA to us so that we can scrutinise it,” DJROA vice-president Ronald Ng said.

Ng said the developer had already submitted the TIA and SIA to MBPJ in September but residents never received a copy until May this year.

According to Billy Wong, an aide to Petaling Jaya Utara MP Tony Pua, the planning approval was renewed in July 2009 during the MBPJ One-Stop Centre meeting.

“However, one of the conditions of the approval was that no further decisions on the project could be made pending the submission of TIA and SIA to DJROA for their perusal and comments.

“This was not complied with when MBPJ approved the amended plans in March 2010,” he said.

He also said when the MBPJ renewed the amended plans in March for two 18-storey blocks from the original 33 storeys, a fresh application should have been submitted and a new noticeboard put up to inform residents.

Wong added that the developer had submitted their building plans for approval at the OSC meeting last month but was rejected because certain conditions were not complied with.

“We are also not pleased with the reports given to us. It’s vague and does not provide any additional details compared with the initial reports. There are no suggestions on how to improve the existing infrastructure and road system,” said Ng.

He said the traffic assessment should be done by a consultant appointed by the MBPJ and approved by the residents instead of by the developer.

“It was stated in the traffic report that traffic has gone down by 20% since an earlier report done two years ago and we find that hard to believe. We were not even aware of that report,” he said.

Ng said parking was a problem in the commercial area and having a high-rise building would worsen the situation.

Yew said they were also concerned that the development plans included the taking over of two pieces of state-owned land that were now used as a carpark and food court.

“If the land is still owned by the state, then why should the developer be allowed to include them in its development plans?” Yew asked.

He said residents did not like the idea of using the land to build a structure that would serve as the front entrance to the mall.

Wong was in agreement: “What we want to know is how the first planning approval was granted in February 2008 when the issue of the two pieces of government land have not been resolved.

“The proposal contains a privatisation element regarding the two pieces of land.”

Yew added that the association and its members were disappointed with the council because it had failed to keep residents updated on the progress of the development.

He also said no proper objection hearing was held that involved the residents and no proper signboards have been put up by the developer to inform the public about the project.

Pua hoped that the issue could be resolved amicably and all parties involved could have a proper discussion regarding the development.

“We hope that the developer will respect the residents and hear their views,” said Pua.

When contacted, MBPJ public relations officer Zainun Zakaria said the issue would be brought back to the one-stop centre committee meeting this month.

When contacted, the developer declined to comment on the matter.