Penang to become economic hub of the region

Sunday, 26 December 2010 20:03

THE FEDERAL government announced Penang is to become a regional economic hub through various projects and stimulus funds. Prime Minister Datuk Seri Najib Abdul Razak said the plans are in line with the government's aim of developing the Northern Corridor Economic Region.

"Ten major infrastructure projects have been identified, including expansions of the airport, Penang Port and Penang Bridge; construction of a second bridge; and the creation of a Multimedia Super Corridor in Penang," he said at the groundbreaking of Penang Airport's passenger terminal expansion. "These initiatives will not only facilitate economic activity, but also support our national objective to increase tourism revenue from RM53 billion in 2009 to RM168 billion by 2020." Read here and here.

Elaborating further, he said, “I believe Penang has unique advantages for it to become a hub for the Northern Corridor Economic Region (NCER) and Growth Triangle comprising Indonesia, Malaysia and Thailand." Read here.

In related news, Transport Minister Datuk Seri Kong Cho Ha said that cargo traffic for the Penang Airport has risen for the first eleven months of 2010, an increase of 12% over the same period the previous year. He added, "About 3,717,625 passengers used the terminal this year between January and Novermber placing the airport in fourth rank after the Kuala Lumpur International Airport, Kota Kinabalu and Kuching airports." Read here.

CapitaMalls buys Queensbay Mall

CapitaMalls Asia Limited announced that it will purchase Queensbay Mall, the largest mall in Penang, for RM658.3mil, or RM730 per square feet of net lettable land. This purchase makes Queensbay Mall CapitaMall's second mall in Penang, and fourth in Malaysia. Read here. "The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia’s market leadership in the state," said CEO Lim Beng Chee. "This acquisition signals our ongoing commitment to invest in Malaysia’s retail sector for the long-term, following our listing of CapitaMalls Malaysia Trust in July this year.” Read here.

Other news

• Four die in fire: A pre-dawn fire destroyed a two-storey shophouse in Jalan Perak, killing four members of a family. "The fire spread quickly as there were a lot of flammable items in the house, but we manage to put out the fire within 15 minutes," said Penang Fire and Rescue Department deputy director Mohd Razam Taja Rahim. Read here and here. Some say that the tragic incident should highlight the importance of a volunteer firefighting brigade, citing the efficiency of a volunteer unit based in Paya Terubong. Read here.
• Waving goodbye to bad memories: To the thousands who drive by every day, enjoying the tranquil sight and the wind in their face, Pangsapuri Masjid Terapung is just another apartment complex by the sea. Read here.
• Penang: 25 buildings, forest possible heritage sites: The National Heritage Department has identified 25 buildings and a forest in Penang for possible listing as national heritage sites, pending consent from private owners and the state government. Read here.
• A lost era of music and harmony: Some 5,000 people recently converged under a starry Batu Ferringhi night sky for the Penang Island Jazz Festival, to find themselves being indulged with some of the most charming and idyllic live music to be heard on these shores for a while now. Read here.
• Educate public on 3Rs, say plastic manufacturers: Educating the public on the importance of the 3Rs (recycle, reuse and reduce) should take top priority instead of implementing the "No free plastic bags" initiative, said the Malaysian Plastics Manufacturers Association (MPMA). Read here.
• PMR: SMK Bukit Jambul is top in Penang: Sekolah Menengah Kebangsaan Bukit Jambul has emerged as the top school in Penang for the Penilaian Menengah Rendah (PMR) examination performance this year. Read here.

Credits to: http://www.igeorgetownpenang.com/

Lifestyle Living Property Fair

The Star Property Fair 2009, organised by The Star in collaboration with Henry Butcher Malaysia and supported by the Expat Group, will feature the creme de la creme of properties ad will take place at the G Hotel on Sept 11th to 13th.

Venue : G Hotel & Gurney Plaza

Date : 11th - 13th Sept. 2009

Time : 10am - 10pm

We, Carey Real Estate (Pg) will be there at G Hotel...

We will keep you post updated on what's happening...

See you there!

Developers in Penang are targeting buyers on a lower budget

Extract from The Star

GEORGE TOWN: Double-storey terrace houses and properties priced around RM200,000 are making a comeback in Seberang Prai.

Henry Butcher Malaysia (Seberang Prai) senior manager Fook Tone Huat said in early 2003 and 2004, 2½- to three-storey houses were popular as purchasers sought bigger space for their families.

“The built-up areas of such properties start from 2,200 sq ft and when first launched, they were priced from RM280,000. Today, these properties are priced between RM350,000 and RM380,000.

“Last year, when the global economic crisis set in, developers started developing double-storey houses, as buyers now have a lower budget,” he told StarBiz.

With a built-up area of 1,500 sq ft, the double-storey properties were priced from over RM200,000, depending on location, Fook said.

“Such properties on the mainland generally appreciate by about 10% annually. We are also seeing a new range of affordably priced high-rise properties with theme park facilities being planned for the mainland, that are normally found only on the island. These condominiums are priced between RM170,000 and RM190,000,” he said.

Fook said developers should look into introducing the 5:95 easy payment plan, which allowed buyers to pay just 5% for the property and the remaining 95% upon completion of the project.

This easy payment scheme, although popular on Penang island, had yet to be widely implemented for projects in Seberang Prai, he said.

The Seberang Prai property market in the second quarter showed no improvement over the preceding quarter and was expected to remain sluggish into the third and fourth quarters, he said, adding that sales were anticipated to pick up early next year.

Fook added that for the past two years, the development of new property projects had shifted from Raja Uda and Bagan Lallang in north Seberang Prai and Bukit Mertajam in central Seberang Prai to Bukit Tambun and Simpang Ampat in south Seberang Prai.

One Asia Property Consultants (Penang) Sdn Bhd managing director Najihah Md Noor said the soft property climate offered buyers a wide range of choices.

“It is the buyer’s market. They can pick from the new launches which normally offer freebies for the properties such as kitchen cabinets and air-conditioners.

“Buyers can also get value for their money from auctioned properties which are sold below market value,” she said.

The banks’ offer of ultra low financing loans last month had also brought some improvement in the market, she said.

Developers launching new double-storey terrace and higher-end condominium projects on the mainland include Asas Dunia, Tambun Indah, DNP Land Sdn Bhd and new player Landmark Strategy Sdn Bhd.

After a hiatus about six months, Asas Dunia is now launching some 1,177 landed properties in central Seberang Prai.

Asas Dunia managing director Datuk Jerry Chan said about 50% of the new launches were terraced properties priced between RM130,000 and RM250,000.

“The other 50% are semi-detached houses and bungalows, priced at RM280,000 to RM350,000 for the former and RM350,000 to RM450,000 for the latter,” he said.

Chan said the group was resuming its property launches because sales had picked up in May and June.

“We are also confident that there is commitment to complete the second bridge on schedule by 2012, after seeing substantial progress made on construction work,” he said.

DNP Land general manager K.C. Tan said the company would, in the fourth quarter, launch 338 properties, comprising 200 double-storey terrace houses and 138 semi-detached houses and bungalows, for the BM Utama project in Bukit Minyak and Taman Sri Impian in Bukit Mertajam.

The double-storey terrace houses are priced from RM250,000 while the semi-detached units and bungalows start from RM400,000.

“We will develop a five- and four-acre park respectively for the BM Utama and Taman Seri Impian schemes, which will be properly landscaped and equipped with the appropriate amenities.

“We will also construct a 90,000 sq ft commercial centre in Bukit Minyak, located between the two projects,” he said.

Meanwhile, Tambun Indah and Mutiara Goodyear Bhd are offering 600 terraced, semi-detached and bungalow units at its Pearl Garden scheme with an estimated gross sales value of over RM200mil in Simpang Ampat, south Seberang Prai.

Landmark Strategy Sdn Bhd is developing the 952-unit Pinang Laguna Theme Park Condominium with a gross sales value of RM160mil on seven acres in Seberang Jaya.

The units are priced between RM170,000 and RM220,000 for built-up areas of 950 to 1,100 sq ft.

Business development manager Michael Cheng said the project would be equipped with theme park facilities. “There will also be a clubhouse with spa, gymnasium, sauna and outdoor jacuzzi,” he said.

Gross Rental Yields - Malaysia Compared to Continent

Malaysia: Gross rental yields (%).

The gross annual rental income, expressed as a percentage of property purchase price. This is what a landlord can expect as return on his investment before taxes, maintenance fees and other costs.

The properties are 120-sq. m. apartments located in premier city centres. (See our list of premier cities)

The gross rental returns (or rental yields) figures published by the Global Property Guide are based on the Global Property Guides own proprietary in-house research.

Only resale apartments and houses are researched. Yields for newly-built properties are not included.

Buyers should expect the rental yields of new properties to be lower than the gross rental yields published by the Global Property Guide.

Properties will be in excellent condition, with good facilities, and have been refurbished or redecorated within the last five years.

When was this data collected? Click on individual countries to see the data collection date.

Source: Global Property Guide Research

Malaysia releases a quarterly house price index. Data are available from the Bank Negara Malaysia (BNM). The Real Estate and Housing Developers Association (REHDA) is the best source of papers, press clippings and stories about the housing market. The National Property Information Center (NAPIC) publishes Property Market Status Report which focuses on property sales.

BNM has useful monetary, financial and economics data.

More REITs seen with easing of guidelines

Extracted from the Star – StarBiz, Monday 6^th July 2009.

By Angie Ng

Malaysia will now be able to look forward to more property funds organization and real estate investment trusts (REITs) implementing into the market for the next few months following the liberalization of Foreign Investment Committee (FIC) guidelines for foreign property investors and the aborting of the bumiputra equity condition in public-listed companies.

According to Axis REIT Managers Bhs Chief executive officer-cum-executive director Steward LaBrooy, the removal of the 30% bumiputra condition on listed companies, which hopefully soon be applied in REIT management companies, this would then encourage more industry investors to be involve.

LaBrooy added that the bumiputra equity condition was a holdup to existing REIT managers in forming alliances with strong overseas operators through sales of equity without the major reduction of shareholders’ interest. By this removal of 30% bumiputra condition, it will attract more players through the new alliances that will increase the capital inflows as a result.

He said the deregulation of the FIC would provide the catalyst or renewed interest in the foreign investment in Malaysia’s real estate. Prior to this, any foreign buyer of Malaysian real estate had to go through complicated structures to own and list their Malaysian assets. Moreover, with Malaysia REITs market becoming more well established and the Securities Commission introduction form a business-friendly guidelines for both conventional and Islamic REITs foreign investors will have good reasons to re-enter the market. The move will promote many other private funds to re-consider the market.

“The lifting of the bumiputra equity rule in stocks as well as allowing 100% foreign ownership in fund managers seeking to operate in Malaysia its positive moves that would place Malaysia in a favorable position to attract foreign investors,” Labrooy added. Later he added that as it was now much easier for foreign real estate ownership by wither individuals or property funds, investment trade properties should be able to perform well.

“A lot of new ventures are the commercial or residential, should be able to take off as there will be a need for more quality and REIT-able property projects going forward. At the end of the day, these investors will need an exit plan and REIT will be a good option for them,” he said.

To provide a boost to the market, he said there was a need to promote greater retail interest in REIT investment. Prior to this, there will be road shows held in various states starting with Penang over the weekend to raise a necessity awareness of REIT investment among the local investment community. In addition to investing in REITs, the investors will be given a chance to broaden up their interest in a wide portfolio of property, while REITs provide regular dividend payout that draws a withholding tax of 10% for individual unit holders. Annual yields paid out by the various REITs in the country so far are between 8% and 13%.

Labrooy said as the global financial crisis had yet to bottom out and foreign players would not be coming in immediately, the more liberalized environment was a good groundwork to attract them when the economy turned for the better.

Overseas property companies and funds that are looking for good value investment in the region may be lured to invest in Malaysia for capital appreciation. CapitaLand, which is eyeing a bigger stake in Malaysia’s real estate market, is one of the potential big players. CapitaLand’s REIT, with an initial asset size of RM2bil, was targeted to be the country’s first foreign-sponsored REIT on Burse. The company had intended to inject its three shopping malls in Malaysia – Gurney Plaza in Penang, the Mines Shopping Fair in Seri Kembangan, Selangor, and Sungei Wang Plaza in Kuala Lumpur - into the REIT.

Through its US$30.5mil real estate private equity fund, Mezzo Capital, CapitaLand has invested in a number of high-end residential projects in the country. CapitaLand also owns a 30% stake in the 50-storey Menara Citibank in Kuala Lumpur’s Golden Triangle.

Property transactions no longer need FIC approval

by Bernama: 30th June, 2009

KUALA LUMPUR, Tue: ALL property transactions, including those between foreigners and non-Bumiputeras, will no longer require Foreign Investment Committee (FIC) approval, Prime Minister Datuk Seri Najib Tun Razak announced today. The FIC approval will only be required for property transactions which involve a dilution of Bumiputera or government interest for properties valued at RM20 million and above, he said at the Invest Malaysia 2009 conference here.

For example, a dilution of Bumiputera interest refers specifically to the instance where a property currently majority held by Bumiputeras and as a result of a transaction ceases to be owned by a majority Bumiputera entity.

Transactions no longer requiring the FIC approval fall into two categories, with the first relating to any transactions involving sale by non-Bumiputera or foreign majority interest.

Secondly, any transactions involving purchase by Bumiputera-controlled entity and this will include a Bumiputera-owned company acquiring property from another Bumiputera-owned company.

This deregulation is expected to facilitate greater property transactions and investments, including acquisitions of commercial properties by foreign interest.

"The government believes that the easing of the regulation will significantly enhance Malaysia's value proposition as a place to do business and invest," said Najib, who is also the Finance Minister.

He said with the comprehensive easing of FIC guidelines at the firm level, the Economic Planning Unit will refocus its efforts towards coordinating and monitoring distributional policies at a macro level.

In this respect, the government remained committed towards enhancing economic participation by Bumiputeras, he added. - BERNAMA