EP 2 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL SAM FONG | THE EDGE SAM

The Edge Property Sdn Bhd (1091814-P) There was Level 3, Menara KLK, a change in No 1 Jalan PJU 7/6, Mutiara government Damansara, 47810 Petaling Jaya, , for the ˎ rst time in the EdgeProp.my history of Malaysia. Managing Director/Editor-in-chief Au Foong Yee

EDITORIAL Executive Editor Sharon Kam Editor Lam Jian Wyn Deputy Chief Copy Editor James Chong Copy Editor Vanessa Gnanasurian Senior Writers Rachel Chew, Tan Ai Leng Writers Natalie Khoo, Shawn Ng Art Director Sharon Khoh Senior Designer Jun Kit Designer Rajita Sivan

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ADVERTISING & MARKETING Associate Account Director, and those on the stretch as it Advertising & Marketing t would probably be an Heidee Ahmad (019) 388 1880 understatement to say the year 2018 So sad, Ampang served the middle-income group who had Senior Account Manager been taken with its potent mix of nostalgia Ian Leong (012) 359 1668 has been an extraordinary year for Park Shopping and value-for-money off erings. Nearby of- Azoera Azami (016) 398 6904 Account Manager Malaysia. It goes down in history as Mall is gone… fi ce workers also frequented the place for Redzuan Abdul Marif (016) 845 9692 the year that saw the ˎ rst change in 1 lunch and for shopping that was easy on ’s oldest mall, Ampang the pocket. Marketing Support & Ad Trafˎ c government in 60 years following Madeline Tan (03) 7721 8218 Park Shopping Mall, which would have Th e mall has made way for the con- email: [email protected] IPakatan Harapan’s victory in the 14th turned 50 in 2023, shuttered its doors on struction of the Ampang MRT (mass rap- Jan 1. id transit) station which is expected to BUSINESS DEVELOPMENT General Election on May 9. Manager Nimalen Parimalam Since then, it has been a roller coaster Th e mall held its own against the newer, be ready by 2022, and an underground Account Manager Stannly Tan glitzier malls nearby such as Suria KLCC, walkway that will link it to the nearby ride for all, as the new administration, the Shopping Mall, Ampang LRT station. PRODUCT DEVELOPMENT & CUSTOMER ADVISORY public, the private sector, and the people Senior Manager Elizabeth Lay try to come to terms with the reality of Associate Omar Nawawi how things have been working and how For enquiries and listings email: [email protected] things are going to work from now on.

Tel: (03) 7721 8174 / 8173 There has been a slew of announcements EdgeProp.my EdgeProp.my pullout is published and statements made regarding new by The Edge Property Sdn Bhd. It is available with The Edge Financial policies and decisions, as many were Daily every Friday. The pullout is also distributed at more than eager to make their stamp in running the

200 ofˎ ces, shopping complexes, country for the ˎ rst time. YEN YEING LOW | condos, medical centres and F&B outlets in the Klang Valley. You can The news headlines since then have also download it for free at www.EdgeProp.my also been dominated by the charges made against the former government and former Prime Minister Datuk Seri Najib Th e Edge Malaysia Razak. Publisher and Group CEO Overall, the country’s economy is not Ho Kay Tat expected to pick up anytime soon. The EDITORIAL Editor-in-chief Azam Aris rakyat has been told that the country is CORPORATE deep in debt, so the days ahead will be Chief Operating Ofˎ cer Lim Shiew Yuin challenging. ADVERTISING & MARKETING Chief Commercial Ofˎ cer Taking a cue from the overall economy, Sharon Teh (012) 313 9056 the real estate sector has remained General Manager Kingston Low (012) 278 5540 subdued while the government and the Senior Sales Managers Fong Lai Kuan (012) 386 2831 people continue to focus on affordable Gregory Thu (012) 376 0614 housing and housing affordability. Creative Marketing Chris Wong (016) 687 6577 Let’s take a look back at some of the Head of Marketing Support & Ad Trafˎ c biggest property industry news that came Lorraine Chan (03) 7721 8001 out of the year 2018. Ampang Park Shopping Mall shuttered its doors on Jan 1. FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 3 YEAR-END SPECIAL

determined to fulfi l the promises made Calling all Stop! DBKL’s during the General Election. By June, the Better late property dubious ministry was preparing to submit a Cabinet than never — managers, let’s land deals paper on the proposal to place all aff ordable KL City Plan housing agencies under a single entity get registered About a week after the General Election, known as the National Aff ordable Housing 2020 gazetted With the amendment to the Valuers, Ap- on May 16, MP Lim Lip Eng lodged Council, for more effi cient and eff ective On Oct 30, the Kuala Lumpur City Plan praisers, Estate Agents and Property Man- a report with the Malaysian Anti-Corrup- management and execution. (KLCP) 2020 was gazetted with little fanfare agers Act 1981 that was passed on Oct 17, tion Commission (MACC) to investigate A few months later in October, the and caught many by surprise. Th e public 2017 and gazetted on Jan 2, 2018, property 64 parcels of land totalling 424.29 acres ministry revealed the names of the agencies can view the plan displayed at the Kuala managers are required to register them- that are worth RM4.28 billion. Th e land that will be consolidated under the council: Lumpur City Hall (DBKL) headquarters on selves with the Board of Valuers, Apprais- parcels had been sold by Kuala Lumpur People’s Housing Scheme Jalan Raja. Attached to the gazetted plan is ers, Estate Agents and Property Managers City Hall (DBKL) under the purview of the (PR1MA), UDA Holdings Bhd, Syarikat an addendum on the developments that (BOVAEP). former Federal Territories Minister, Datuk Perumahan Negara Sdn Bhd (SPNB), were contrary to the plan. Previously known as the Board of Val- Seri Tengku Adnan Tengku Mansor from Housing Programme for the Hardcore Federal Territories Minister Khalid uers, Appraisers, Estate Agents Malaysia, 2013 to 2018. Poor (PPRT) and Malaysia Civil Servants Abdul Samad said infringements in the BOVAEP will now regulate property man- Almost half of the land parcels had al- Housing Programme (PPAM). current plan and new additions would agers in Malaysia. Prior to the amendment legedly been sold for the development of be taken into consideration in the future of Act 242, the act allowed only registered Federal Territories Affordable Housing draft KLCP 2040 which would kick off next valuers to conduct property management. (RUMAWIP) projects while the rest were Lower house year and is targeted to be gazetted by 2020. BOVAEP will provide training courses for higher-end residential and commercial To recap, the drafting of KLCP 2020 to registered property managers to en- products priced at market value, claimed prices? SST in, began in 1998 and was fi nalised in 2012. sure that they have suffi cient knowledge Lim. All of the parcels were sold without GST out However, it was not gazetted despite fre- of related laws and regulations as well as open tender and most of them transacted quent calls to do so. Many KL folks believe standard practices. at below the market price at that time and Th e new government abolished the Goods that the failure to gazette the KLCP has without having gone through a valuation and Services Tax (GST) on June 1 as prom- resulted in haphazard developments in report, he alleged. ised in its election manifesto and then KL. In a news report last year, DBKL said On top of that, some of the developers declared a tax holiday until the introduc- it was pointless to gazette it as it was due who had bought the land parcels have al- tion of the Sales and Service Tax (SST) to expire by 2020. It said it would instead legedly failed to pay development charg- on Sept 1. focus on the Kuala Lumpur Structure Plan es and the premium on the conversion of Under the GST regime, there was a fi xed 2050, but that was under the previous ad-

EdgeProp.my land use, yet their projects were able to tax rate of 6% across every stage of the ministration. commence, Lim told reporters. supply chain. With the SST, the Service A month later, the MACC seized docu- Tax was 6% while the Sales Tax was 5% ments connected to the sale of the 64 plots and 10% depending on the type of goods. No comment — from DBKL’s premises and 48 plots have The single-stage tax is imposed only at

LOW YEN YEING LOW | been cleared by the MACC as at July. Th e production level. Tax revisions remaining 16 plots have issues with either It seems to have been implemented their land titles or payments. hastily without a complete list of chargeable items which took many business operators Th e government made a few property-re- and consumers by surprise. But what was lated announcements during the tabling No money-lah clear was that property (including land) is of Budget 2019 on Nov 2. Th ese include not chargeable under SST. Also exempted raising stamp duties for property transfers — MRT3 and from tax are certain building materials worth more than RM1 million from 3% HSR scrapped such as cement, sand and iron and con- to 4%, and revisions to the Real Property struction services. Gains Tax (RPGT). Almost immediately after it In light of this, Finance Minister Lim From January 2019, there will be an came into power, the new Guan Eng has urged developers to lower RPGT of 10% (increased from 5% current- Pakatan Harapan govern- the prices of the homes they build going ly) for companies and foreigners; and 5% ment announced that it was forward. In tabling Budget 2019 in Parlia- (0% currently) on locals, on property sales reviewing all the mega pro- ment on Nov 2, Lim revealed that the Real conducted from the sixth year onwards. jects in the country. A deci- Estate and Housing Developers’ Associa- However, RPGT is exempted for low sion was made, to defer two rail transport tion has agreed to cut house prices by up cost, middle cost and aff ordable housing projects — the Kuala Lumpur-Singapore to 10% on new projects. scheme units priced RM200,000 and below. High-Speed Rail (HSR), as well as the third Klang Valley Mass Rapid Transit (MRT3) Zuraida is the ˎ rst female housing minister line. in Malaysia’s history. The reason for slamming the brakes on these two mega projects, the new gov- Believe it or not? ernment said, was that the costs involved Own a home by paying Hip, hip hurray! were just too high. Th e HSR would have cost RM110 billion while the MRT3 would have only 20% of the price Change in cost between RM40 billion and RM45 billion. government However, Prime Minister Tun Dr On Nov 2, Prime Minister Tun Dr Mahathir and the Mahathir said the government may Mohamad launched FundMyHome.com, an reconsider the projects in future, when innovative home-buying platform developed first woman to be the country’s fi nancial situation improves. by EdgeProp Sdn Bhd. Currently limited to fi rst- appointed housing Another mega project, the East Coast time homebuyers only, FundMyHome provides minister Rail Line (ECRL), is still being studied. an alternative towards home-ownership. Th e RM81 billion project spanning 688 Th is is how it works – homebuyers will need Th e May 9 elections marked a change in km linking Port Klang and Kota Bharu to pay 20% of the property price to own the government, after which a new cabinet was was launched last year and was slated for home, choosing from a wide array of high-rise formed. Ampang MP Zuraida Kamaruddin completion in 2024. and landed homes of diff erent prices (capped made history as the first woman to be Th e project has been put on hold by at RM500,000) and locations showcased on appointed Malaysia’s Housing and Local the present administration since July 3 to FundMyHome.com. MOHD NAZAM | THE EDGE MOHD IZWAN Government Minister. She is also chief of negotiate better terms with the China pro- Th e balance 80% of the property price is Parti Keadilan Rakyat’s women’s wing. ject contractor — China Communications contributed by participating institutions. Af- Zuraida has been an MP since the 2008 Construction Co Ltd (CCCC). ter fi ve years, homeowners can choose to sell, General Election, winning the seat of buy or refi nance the home, sharing the returns Ampang from Barisan Nasional, the ruling from any changes in the value of the home with coalition then. She was re-elected in 2013 Just one will the institutions. and in 2018. In the initial stage of the scheme, nine par- In an exclusive interview with Edge do — National ticipating developers are off ering about 1,000 Prop.my after she was sworn in on May 21, Affordable homes priced below RM500,000. Following the she spoke of being committed to upholding Housing Council launch, criticism and concerns were raised FundMyHome was launched by the promises made in the Pakatan Harapan regarding the scheme, but only time will tell. Tun Dr. Mahathir Mohamad on Nov 2. manifesto, including the formation of a The wheels began turning as soon as National Aff ordable Housing Council. the new minister clocked in, as she was EP 4 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL

The RRACINGACING Astaka SKYttowardsowards tthehe

BY SHAWN NG Said to be one of the tallest residential towers in Southeast Asia, it compris- 018 saw the completion es a 70-storey and a 65-storey tower of several in of 278.8m and 255.6m respectively. the country. According , on the other hand, was to The Center developed by Nusmetro Group and — the global tall building consists of a 49-storey tower and a database of the Council 27-storey tower that houses 480 ser- on Tall Buildings and viced apartment units. Th e 49-storey Urban Habitat (CTBUH) Tower 1 is 186m tall and is said to be — notable skyscrapers the tallest building on Island. that were completed Looking ahead, the skyline of major during the year include cities in Malaysia is expected to grow 2Four Seasons Place Kuala even more on the vertical axis, as the Lumpur, Southpoint country ushers in more skyscrapers. ASTAKA PADU SDN BHD Tower in , W Hotel In Kuala Lumpur alone, at least fi ve Kuala Lumpur and Tropicana The are slated for completion over the next Residences, Elite Pavilion, Equatorial four years, namely Merdeka PNB118, Plaza (all in KL), The Astaka in Exchange 106, 8 Conlay Kempinski and Arte S in Penang. Hotel & Residences Kuala Lumpur, SO Unsurprisingly, most are located in Sofi tel Hotel and Residences Tower Five notable skyscrapers KL’s Golden Triangle and are all mixed in Oxley Tower and M101 Skywheel. or integrated developments with retail, Th e most anticipated one is proba- hotel, offi ces and serviced residences bly Merdeka PNB118 and the Exchange with the exception of the Arte S and the 106, which are expected to be com- Astaka condominium project. pleted in 2020 and 2019, respectively. completed in 2018 Four Seasons Place Kuala Lumpur Upon their completion, the 492m- is the tallest of the recently completed tall Exchange 106 and the 630m-tall skyscrapers, at a height of 343m. Th is Merdeka PNB118 will surpass the NO. BUILDING NAME LOCATION HEIGHT (M) FLOORS USE 65-storey mixed development made 452m-tall Petronas Twin Towers, 1 Four Seasons Place Kuala Kuala Lumpur 343 65 Residential, retail & up of a retail podium, hotel and ser- which has remained the tallest sky- Lumpur hotel viced residences was completed by scraper in the country for over 20 Venus Assets Sdn Bhd in October 2018. years and the tallest twin towers in the 2 The Astaka Tower A Johor Bahru 279 70 Residential It was also exciting to see the com- world. When ready, Merdeka PNB118 2 The Astaka Tower B Johor Bahru 256 65 Residential pletion of Th e Astaka in Johor and Arte will become the tallest building in the 3 Southpoint Tower Kuala Lumpur 244 56 Residential & offi ce S in Penang. Th e Astaka is a residen- country, followed by Exchange 106 tial twin-tower project at the RM5.3 and Petronas Twin Towers. 4 W Hotel Kuala Lumpur and Kuala Lumpur 235 55 Residential & hotel billion One Bukit Senyum develop- Let’s get to know some of these Tropicana The Residences ment which is being undertaken by imposing architectural giants in our 5 Equatorial Plaza Kuala Lumpur 229.7 50 Offi ce & hotel

Singapore-listed Astaka Holdings. midst. SOURCE: CENTER, RESPECTIVE DEVELOPERS AND SAVILLS MALAYSIA FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 5 YEAR-END SPECIAL

Th e Astaka Four Seasons Place Southpoint The Astaka is a twin-tower luxury Currently the second tallest building in Southpoint Tower is the fi nal phase of the Five tallest residential project in the RM5.3 billion Malaysia next to Petronas Twin Towers iconic Mid Valley City development in One Bukit Senyum development within which stands adjacent to it, Four Seasons Kuala Lumpur by IGB Corporation Bhd. Johor Bahru. Place Kuala Lumpur is a 65-storey Anchoring the southern tip of Mid With a gross development value (GDV) 343m-tall mixed development. Valley City with a gross fl oor area of 2.26 of RM1.4 billion, the twin-tower pro- Developed by Venus Assets Sdn Bhd, million sq ft, the 56-storey mixed devel- upcoming ject — made up of the 70-storey Tower the building comprises a 6-storey luxury opment features a double-volume lobby, A (278.8m) and the 65-storey Tower B retail podium, a 209-key Four Seasons Grade-A offi ces, serviced residences, a (256m) — off ers 438 luxury residences. Hotel, 27 units of hotel serviced residenc- grand ballroom and 1,600 car park bays. According to Astaka Padu Sdn Bhd, es and 242 units of Four Seasons private Th e 244m-tall offi ce tower features a skyscrapers a subsidiary of developer Astaka residences. connecting walkway linking pedestrians Holdings, Th e Astaka was completed in According to the developer, the build- to the Abdullah Hukum LRT (light rail (as at end-2018) June 2018 and is currently 70% sold. ing was completed in October 2018 and transit) station and covered pedestrian the private residences have enjoyed a bridges to The Gardens Mall and Mid take-up rate of more than 70% to date. Valley Megamall. in KL

LOW YEN YEING | EdgeProp.my

Four W Hotel Merdeka Seasons Kuala Lumpur PNB118 & Tropicana Place KL The Residences PNB MERDEKA VENTURES SDN BHD

Southpoint Tower Merdeka PNB118 Expected to be completed in December 2020, Merdeka PNB118 is poised to be the tallest build- ing in the country and in Southeast Asia at 630m. Being developed by PNB Merdeka Ventures Sdn Bhd, which is a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), Merdeka PNB118 is a 118-storey tower consisting of 83 floors of Grade A offi ce spaces, 16 fl oors of a luxury hotel, three fl oors for an observation deck (including ZGB CORPORATION BHD a restaurant) and 16 floors of sky lobbies and amenities, according to the developer’s website. It also aspires to be a model for workplace safety and sustainability. Th e tower is part of the Warisan W Hotel Kuala Equatorial Plaza Merdeka development comprising the tower, a re- tail mall and three blocks of serviced apartments Lumpur and Equatorial Plaza is another exhilarating within the vicinity of Stadium Merdeka in KL. Tropicana Th e skyscraper that has risen up from the Residences site of the former Hotel Equatorial Kuala Lumpur at Jalan Sultan Ismail. Exchange 106 Located on a 1.28-acre freehold site on Consisting of 23 levels of offi ce space , W Hotel Kuala Lumpur and 21 hotel levels, the 50-storey Grade A Th e Exchange 106 is the crown jewel of the RM40 and Tropicana Th e Residences is just a building stands 229.7m from the ground. billion (TRX) development stone’s throw away from the Petronas Th e offi ce component was completed in in KL. Twin Towers. September this year while the hotel is at Standing 492m-tall on 3.42 acres of land, the According to its developer Tropicana the tail end of the construction as at end 106-storey building has a total NLA of 2.6 million Corporation Bhd, the 55-storey building is December 2018. sq ft, which will be made up of offi ce spaces, retail a 235m-tall mixed development consist- With a net lettable area (NLA) of about podium and sky bars. ing of 150 hotel suites and 353 serviced 460,000 sq ft, the offi ce component has According to its developer Mulia Property De- residences. Th e hotel opened its doors recorded an occupancy rate of some 45% velopment Sdn Bhd, the building is expected to in August this year. to date with the entry of the world’s larg- be completed by the second quarter of 2019. It The building was designed by est co-working space provider WeWork, Equatorial will be directly connected to the SMART Tunnel, renowned architecture fi rm Skidmore, fast moving consumer goods (FMCG) Plaza the Maju Expressway, the TRX MRT (mass rapid Owings & Merrill LLP which also designed companies and international banks, ac- transit) station and pedestrian links to adjacent the current tallest building in the world cording to Savills Malaysia, the leasing offi ces, park and retail centres. – the in Dubai. consultant for the building. CONTINUES NEXT PAGE EP 6 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL

Five tallest upcoming skyscrapers (continued)

Five tallest upcoming skyscrapers in KL (as at end-2018) 8 Conlay NO. BUILDING NAME HEIGHT FLOORS USE ESTIMATED (M) COMPLETION 1 Merdeka PNB118 630 118 Offi ce & hotel 2020 2 The Exchange 106 492 106 Offi ce & retail 2Q2019 3 SO Sofi tel Hotel and Residences 341 78 Residential & hotel 2023 Tower in Oxley Towers 4 M101 Skywheel 319 78 Residential, 2022 retail & hotel 5 8 Conlay Kempinski Hotel 309 68 Residential & hotel 2021 & Residences Kuala Lumpur

SOURCE: THE SKYSCRAPER CENTRE, RESPECTIVE DEVELOPERS AND WEBSITES

Oxley Exchange Towers 106

KSK LAND SDN BHD OXLEY HOLDINGS (M) SDN BHD MULIA PROPERTY DEVELOPMENT SDN BHD

8 Conlay Kempinski SO Sofi tel Hotel and M101 Skywheel Hotel & Residences Residences Tower in While it may not be the tallest building Kuala Lumpur Oxley Towers on the list, the 78-storey M101 Skywheel will have something else to stun everyone Sitting at No. 8, Jalan Conlay, the 8 Conlay Another skyscraper that is set to change when the 319m-tall building is complet- integrated development will introduce the KL skyline in the next few years is the ed in 2022. another sky-high landmark in the city, 78-storey SO Sofi tel Hotel and Residences Upon completion, the iconic project the Kempinski Hotel & Residences Kuala Tower at Jalan Ampang. by M101 Holdings Sdn Bhd will see the Lumpur, by 2021. Slated to be ready by 2023, the world’s highest ferris wheel — Sky Ferris Comprising 260 hotel rooms and 300 341m-tall, mixed-use tower is part of the Wheel — on the 52nd level, off ering a serviced suites, the 309m-tall, 68-storey Oxley Towers development by Singapore- vantage point 220m above the ground. building is Tower C of the RM5.4 billion listed developer Oxley Holdings Ltd. On top of that, the RM2.2 billion pro- tri-tower 8 Conlay development located Sitting on a 3.11-acre freehold site, the ject will also feature the world’s highest on a 3.95-acre site, said developer KSK project has an estimated GDV of RM3.5 shopping experience with a SkyMall from Land Sdn Bhd. billion and consists of three soaring the 50th to the 52nd level off ering over 8 Conlay also features lifestyle retail towers, namely the SO Sofi tel Hotel and 200,000 sq ft of retail and the fi rst Planet quarters and two towers of branded residen- Residences; the 49-storey Jumeirah Hotel Hollywood Suites in Asia. ces dubbed YOO8 serviced by Kempinski and Residences Tower (233.6m); and the which are expected to be completed in 29-storey Signature Offi ce Tower and retail 2020. podium (155.5m). According to Oxley Holdings (M) Sdn Bhd, a subsidiary of Oxley Holdings, the project has incorporated the concept of Malaysian “weaving” arts into its design M101 HOLDINGS SDN BHD to create sustainable, high performance M101 and efficient buildings with the use of Skywheel state-of-the-art technology in construc- tion and operations.

EP 8 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL Challenging 2018, hopeful 2019

Malaysians started 2018 BY EDGEPROP.MY has been contributing signifi cantly to Describe 2018 in one word: domestic consumption and income. MESMERISING full of apprehension. he consensus seemed Th e focus of demand drivers could pos- Our attention was to be disappointment sibly be more reliant on the growth in Describe what 2019 would be like in with the subdued per- the manufacturing and service sectors. one word: riveted during the formance of the local 3. Keeping space reinvention in check — As METAMORPHOSIS 14th General Election, property market in sales, occupancy rates and rental yields 2018 and that the cur- are squeezed by the stagnant market, after which we were rent challenges will developers and owners are becoming rewarded with a new continue to plague more creative in the search for rental Previndran Singhe government. It was the sector, while new income. For instance, residences are ones appear — oversupply, affordability, off ering short-term rentals; serviced Zerin Properties CEO like hitting the refresh Tend-financing and overall economic slow- apartment developments are off ering button for the country, down, among others. Many believe the retail spaces for lease; and offi ce owners challenging environment will prevail for are creating co-working spaces that off er and the patriotic spirit some time, considering the lack of growth 5-star hospitality services. Problems of of Malaysians soared catalysts in the near term. public safety, public liability and confl ict Nevertheless, some industry experts are of usage with diff erent property users to an all-time high. optimistic about the future, banking on the will arise and the challenge will be to But the euphoria wisdom of the new leadership in Malaysia change existing laws and regulations to which is focused on bringing down property cover such activities. did not liven up the prices and to facilitate the development of sluggish economy and more aff ordable housing, while aiming to Market catalysts create a more transparent business envi- Challenges will also be catalysts. the equally lethargic ronment which will in turn improve con- 1. Fall in house prices will boost demand, property sector. sumer and investor sentiments. leading to new housing starts. Th e gov- EdgeProp.my delves into their thoughts ernment expressed its intention to re- on the country’s property market in the duce compliance costs in the upcoming Top three challenges for the property In view of the change in days to come. National Housing Policy 2.0. Such costs market in 2019 government and in the could be borne by utility companies and 1. Sentiments in the market fueled by not passed on to buyers. If state land is dampened economy, which is caused spirit of a new Malaysia, alienated for aff ordable housing and by falling oil price, low oil palm prices EdgeProp.my asked 19 Foo Gee Jen outmoded utilities are removed, there and global uncertainties. will be a signifi cant diff erence in future 2. Th reat of rising unemployment as com- real estate consultants CBRE|WTW managing house prices. panies downsize, while artifi cial intelli- and three real estate- director 2. Declining consumer expenditure will gence replaces jobs in the IT and support encourage innovation in retailing to service sectors thus impacting purchas- related organisation encourage consumer spending. For ex- ing power and market confi dence. leaders about their ample, there will be more direct selling 3. Lack of clarity in government policies. from suppliers to consumers through Th is will lead to further confusion and thoughts on 2018, e-commerce. Also, if the manufacturing lack of understanding in the market. and to list the major and service sectors become the engines challenges they foresee of economic growth (instead of mega Market catalysts infrastructure projects), a new up-cy- 1. Th e exemption of stamp duty is expected for the property sector cle in the industrial property sector will to act as a big catalyst in the property in 2019. commence. market. 3. Market innovation and adaptation 2. More crowdfunding platforms are ex- will introduce new ways of providing pected to bring more investors into the goods and services and reduce prices. market. Unfortunately, existing investors and 3. Th e trade war is poised to make Malaysia stakeholders are liable to lose some a hub for trade and logistics not just for returns in the short-term due to high- the Southeast Asia region but also for Top three challenges for the property er commitment cost in the early stage. Northern America. market in 2019 Nonetheless, there are potential re- 1. Housing aff ordability continues to be turns in the long-term due to improved Advice for investors a concern. The challenge is to bring productivity and resource effi ciency. Th e current market provides an oppor- down prices by 40% to 50% for housing tune time for one to buy property as ask- to be truly aff ordable for the majority Advice for investors ing prices have dropped, especially for of the M40 and B40 population. We will Be open to change and innovation. Accept medium to long term investors. Industrial need to correct the supply and demand the immediate costs of restructuring busi- sector is my main pick, but there are also mismatch in the market, bring down ness practices. In the longer term, as pric- opportunities in Grade A strata offices house cost, improve fi nancial capacity es fall to more aff ordable and sustainable in the suburbs where there is demand of Malaysians and enhance execution at levels, sales will boom. but little supply. For residential property, federal level — all of which are structural New rules and regulations are needed transit-oriented developments (TODs) in nature and would need time and in the new market place. Instead of op- or those located close to public transport eff ort to delineate. posing the entry of new players and ways are recommended. I do like second-tier 2. Potential decline in domestic expendi- of doing business, existing players should developers which are selling at a discount ture — Putting mega infrastructure pro- suggest new provisions that will address to premium developers. Notwithstanding, jects on hold will substantially reduce the interests of customers/buyers as well premium developers are offering good cash circulation in the economy which as new market segments. deals now. FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 9 YEAR-END SPECIAL

Describe 2018 in one word: Describe 2018 in one word: HOPE Th ere is hope for all of us, due to SUBDUED Because the market was very the change in government. slow in 2018 and everyone was being very Chen King Hoawԝ Tang Chee Meng cautious. Describe what 2019 would be like in Landserve Sdn Bhd Henry Butcher Malaysia one word: Describe what 2019 would be like in managing director chief operating offi cer CHANGE Next year is expected to bring one word: many changes — we are going to see prop- CHALLENGING Th e year is expected to erty crowdfunding, regulations for cryp- be challenging because we expect a lot of tocurrency and no more corruption on a global headwinds to aff ect our economy. large scale. And by the second half of the We think the market will continue to be year, things are expected to be more pos- challenging unless the government takes itive after everything has fallen into place. steps to stimulate the economy.

Eddy Wong Adzman Shahԝ Nawawi Tie Leung Property Mohd Arifˎ n Consultants Sdn Bhd ExaStrata Solutions Sdn Bhd managing director CEO and chief real estate Top three challenges for the property Top three challenges for the property consultant market in 2019 market in 2019 Th e top three challenges that the Malaysian 1. Looming oversupply in the offi ce and property market is expected to face in 2019 retail sectors in the Klang Valley will put are property glut, tight lending policies by more pressure on occupancy rates and fi nancial institutions and poor market sen- rentals. timent as investors stay on the sidelines. 2. Sluggish sales take-up in the residen- Property overhang is at its record high tial sector, caused by weaker consumer and the increases in Real Property Gains sentiment exacerbated by global uncer- Tax (RPGT) and stamp duty for transfer of tainties and slower economic growth. property valued at over RM1 million, which Meanwhile, potential buyers continue were announced in the recent Budget 2019 to face diffi culty in securing maximum is not going to help the situation, particu- loan margins. larly in the mid- and high-end segments. Th e increased stamp duty rate for Against this backdrop, we can only expect properties priced above RM1 million Top three challenges for the property fi nancial institutions to be cautious. and the imposition of the RPGT on prop- market in 2019 erties sold after fi ve years will dampen 1. Th e oversupply situation in the offi ce, Top three challenges for the property Market catalysts the higher-priced residential proper- retail and residential market sectors — market in 2019 High-impact public infrastructure pro- ty segment. Despite developers’ pivot Of particular concern is the residential With the new government and Malaysia jects such as the mass rapid transit (MRT), to aff ordable homes, the high rate of overhang. As at 2Q 2018, there is an Baru spirit in place, I expect three light rail transit (LRT) and highway devel- withdrawals are a problem, as poten- overhang of 29,227 units, defi ned as challenges for the property market in opments would be the catalysts in 2019. tial buyers face diffi culties in securing units that are unsold nine months af- 2019, namely the oversupply of aff ordable Many developments have been planned, the required loan margin and coming ter completion. If you add unsold units housing on top of existing supply of built and completed near the stations, up with the loan diff erential sum. under construction, and unsold units regular priced housing; diffi culty for the so the completion of these rail projects 3. As banks adopt a more cautious stance, that have not started construction, the young and fi rst-time buyers to obtain end- would boost demand for these proper- property developers, especially the total number of unsold units is some fi nancing due to prior high commitments; ties. Meanwhile, new highways will open smaller ones without a strong track 126,118; about 41% of total launched and the absorption of oversupply of up new areas, generating new opportu- record, will fi nd it more challenging to units! office space affecting the investment nities. We also hope that other high-im- obtain bridging/fi nancing facilities for 2. Part of the reason for the huge number market — this baggage from 2018 will pact projects which attract foreign direct their projects. of unsold properties is the low aff orda- have an impact on 2019, and even investments (FDI) will take off in 2019 as bility or purchasing power of the gener- into 2020. we need foreign investors to come back. Market catalysts al population especially in the B40 and There do not appear to be any major M40 segments. Raising the household Market catalysts Advice for investors catalysts for the market in 2019. income level should be the govern- Investment in major infrastructural pro- Property buyers or investors need to be Uncertainties on the global stage such as ment’s objective as it will be the key to jects and promotion of tourism will draw very clear with their investment objective. the China-America trade war, if resolved, resolving the home ownership issue. foreign spending and better business op- Set your budget and defi nitive criteria for may raise prospects of better economic 3. Slowdown in the economy due to global portunities. choosing the property and consult estate performance and improved investor and headwinds — Th e China-US trade war, agents. While there are many options in the consumer sentiments. Th is may, in turn, rising interest rates, and the weak ring- Advice for investors market today, investors may get confused provide a boost to the property market. Th e git. If one has the opportunity, it would be without proper guidance. For those look- stamp duty exemptions announced under good to consolidate the portfolio and only ing for property for own use, there will be Budget 2019 for first time purchasers Market catalysts keep properties that are giving reasonable ample opportunities in the market. It is a are expected to provide a boost to the Market sentiment will improve when returns. good time to consider upgrading. For those residential property market especially the new government is ready to increase who are investing purely for capital and/or in the fi rst half of 2019. Th e allocation of spending on infrastructure projects. No Describe 2018 in one word: rental returns, our advice is to be cautious. RM1.5 billion to build aff ordable homes, doubt the global market outlook will af- ARDUOUS Because it has been rather and the further RM1 billion via Bank fect the Malaysian market, but domestic challenging economically, socially and Describe 2018 in one word: Negara to help first-time home buyers consumption contributes a substantial politically. SUBDUED Th ere have been uncertainties with monthly household incomes of less portion of the country’s GDP. We should throughout 2018, particularly after GE14 than RM2,300 to finance purchase of be less concerned about the budget deficit Describe what 2019 would be like in and that is understandable as it is the fi rst homes costing less than RM150,000 at a and do more to stimulate the economy one word: time in 60 years that we saw a change of lower interest rate of 3.5% should help in light of the fragile global economic ASSIDUOUS Because it will continue to government. Despite the euphoria of Ma- boost demand and building activities in outlook. be challenging and will require a careful laysians over the change, investors are ex- the aff ordable homes segment. approach. tremely cautious. How is the Malaysian Advice for investors economy going to perform? What will our Advice for investors Th e current market slowdown is a good foreign policies be under the new govern- 1. Buy for long-term investment and not opportunity to shop around and buy prop- ment? Greater clarity is what investors need. for speculation. erty, especially if it is for own stay. Devel- In the interim, many stay on the sidelines. 2. Carry out your homework before in- opers are now off ering discounts and in- vesting. centives to move sales. This is the best Describe what 2019 would be like in 3. Check with professionals and obtain time to pick up bargains as property is one word: proper advice before deciding. a long term investment and the market CAUTIOUS We expect the market to re- 4. Invest in established locations or growth will eventually recover. Look for proper- main subdued in the first half of 2019. areas. ties that are well connected, and located Property developers selling mid- to high- 5. Buy from established developers with in a neighbourhood with good access to end properties will have a lot of work to a good track record. amenities. do to lure buyers. CONTINUES NEXT PAGE EP 10 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL

FROM PREVIOUS PAGE can look for purchases that fit one’s Describe 2018 in one word: Describe 2018 in one word: budget and objective. Property pric- CAUTIOUS James Wong CHALLENGING Th e property market in es may adjust further for an equilib- 2018 although challenging, has remained rium between supply and demand. Describe what 2019 would be like in VPC Alliance (Malaysia) relatively stable with no drastic drop in However this process will take some one word: Sdn Bhd managing director values. time, basing property purchase on CAUTIOUS OPTIMISM at least the medium term horizon Describe what 2019 would be like in (> 3 years) will allow buyers to ride one word: out any downward price movement. SUBDUED Th e property market in 2019 Lim Lian Hong in the absence of any major catalysts, will Describe 2018 in one word: remain subdued. SLUGGISH Th e market has been slug- Raine & Horne International gish in terms of both transactions and Zaki + Partners Sdn Bhd prices as buyers stay on the sidelines due to uncertainties on the political and eco- executive director Ng Weng Yew nomic front. Metro REC Sdn Bhd Describe what 2019 would be like in (formerly known as One one word: OPPORTUNITY For buyers looking Sunterra) managing director for good deals, as prices may adjust Top three challenges for the property downward by 10% or more at selected market in 2019 locations. 1. Coping with the building of aff ordable housing — In the 2019 Budget, it was announced that 200,000 units of aff orda- ble housing will be built by 2020 and Dr Jason Teoh that fi ve government aff ordable hous- ing agencies including PRIMA, will be Poh Huat under the jurisdiction of the Ministry of Housing and Local Government (KPKT). Henry Butcher Malaysia Top three challenges for the property Th e challenge is in the implementation (Penang) director market in 2019 towards more eff ective construction and 1. New Malaysia has brought about new marketing of aff ordable housing and to hope and high expectations. But the have more research done to ascertain civil service is still operating in the old the supply and demand, to determine mode and may cause a delay in the de- consumer preferences and aff ordability Top three challenges for the property cision-making process be it at federal levels to ensure a higher take-up rate market in 2019 or state level, which will hamper the for aff ordable housing. 1. Purchasers still face diffi culties in obtain- property market. 2. New taxes — Stamp duty and RPGT ing loans for property purchases — Th e 2. Th e 5% RPGT to be charged on property increases may aff ect property players’ current and proposed government-in- transactions after fi ve years irrespective decision to buy or sell in 2019 and may itiated fi nancing measures/incentives of when it was bought will deter people result in lower volume of property trans- are limited and mainly targeted at the from selling their properties. Tradition- actions in 2019 and further contribute B40 group, but the M40 — being the ally, RPGT was to curb speculation and to the property overhang. biggest social group — is the hardest was charged for transactions below fi ve 3. Oversupply of offi ces — According to hit, as such fi nancing measures elude years. NAPIC’s data, the total supply of pri- them. 3. Property prices that are beyond the vate purpose-built offi ces in KL alone in 2. Oversupply of similar products in reach of the average wage earner. 2Q2018 was 8,360,961 sq m (89,997,384 selected locations — Being spoilt for Top three challenges for the property sq ft) while the incoming supply was choice may inevitably lead to down- market in 2019 Market catalysts 1,149,235 sq m (12,370,365 sq ft). KL ward pressure in property prices and 1. Concerns over the global econo- Need to stimulate the economy. Create has one of the highest offi ce stocks in rentals. my including fallout from the Chi- more jobs and raise income levels. Southeast Asia. 3. Economic factors — On the local front, na-America trade war as well as an With a further slowdown of the protracted property affordability is- overall global economic slowdown. Advice for investors Malaysian economy expected in 2019 sue beset by weak stock market and Malaysia, being an open economy, is Every deal will have its pros and cons. So and competition for new tenants coming price falls in major commodities (such equally vulnerable. Making Malaysia a one is advised to look at yields, returns from co-working spaces, there will be as crude palm oil) whilst on the glob- choice investment destination based and cost of maintenance of the property more pressure for building owners to al front, economic volatility from the on innovation and technology has to that they are interested to buy. reduce offi ce rents. US-China trade war will aff ect our fi - take precedence as a contributing nancial and economic sectors. platform for growth. Describe 2018 in one word: Market catalysts 2. Th e current weak sentiment requires QUIET Th e number of transactions has 1. Integrated road and rail links — Th e Market catalysts urgent and in-depth thought lead- dropped due to quiet business activity in new integrated road and rail links 1. Government-initiated financial meas- ership in fi nding practical solutions both evaluation and real estate. Besides such as the Shah Alam Elevated Ex- ures/incentives for affordable homes/ towards revitalising the property mar- the high loan rejection rates, asking prices pressway, -Ulu Kelang unsold completed supply such as ket. Aff ordable housing dominates the are high while buyers off er lower prices, Elevated Expressway with MRT 1 & stamp duty exemption for first time headlines. resulting in a big gap. 2 and LRT3 will improve connectivi- home buyers, developer’s discount, 3. Sustainable solutions for Malaysian cit- ty between KL City Centre and other crowdfunding platforms such as Fund- ies due to rapid urbanisation. Adapting Describe what 2019 would be like in parts of the Klang Valley. Th e major MyHome. real estate projects and infrastructure one word: MRT and LRT stations provide oppor- 2. New government with perceived to build aff ordable and liveable urban CHALLENGING Next year is expect- tunities for TODs such as those in KL ‘Malaysia Baru’ virtues — Transparency spaces is now imperative. ed to be challenging, because primarily, Sentral, Damansara Town Centre and and sound governance can enhance our national debt is still high. Secondly, Cheras. FDIs and thus attract foreign property Market catalysts the cost of doing business has infl ated as 2. New logistics hubs — With the big in- investors to consider local real estate. Infrastructure is essential to securing the weak currency has made import of crease in FDIs in 2018, high demand 3. Global real estate pulse — Property mar- Malaysia’s future competitiveness construction materials more expensive. for modern warehousing from online kets in developed and major emerging and liveability. Adequate and well- On the political front, I believe there will shopping companies and the de- countries (Malaysia included) are closely functioning infrastructure connects be changes in policies while there may mand for new cold rooms, are oppor- related due to fl owing of funds across people to jobs, goods and services, be some instability in certain states like tunities to build new logistics hubs. borders and asset allocations by major provides access to international markets, . Generally, there is a short supply of global institutions. Improvements in facilitates the flow of information and modern warehousing and new hubs major global real estate markets may ideas, thereby promoting economic which will attract such industries. catalyse similar improvements in the growth. 3. Retirement villages — By 2020, the local property market. number of Malaysians aged 60 and Advice for investors above is expected to reach 3.5 million Advice for investors Th e current climate has untapped poten- and 6.3 million in 2040, amounting to In view of the property overhang and tial. Given the rapid rate of urbanisation about 20% of the population. Hence, affordability predicament, the current and a young demographic population, there is pent-up demand for retire- property climate favours buyers/in- there are numerous niche opportunities ment villages to cater for able-bodied vestors (buyers’ market) where one in the market worth exploring. seniors who want to enjoy communal FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 11 YEAR-END SPECIAL

and lifestyle living in their retirement before. Buyers and investors should eval- clarity in the policies of the new govern- Describe what 2019 would be like in years. Retirement villages will act as uate the market or increase their asset ment unfolds. one word: a catalyst for community hospitals, portfolio at this opportune time. In the CHALLENGING shops and recreation facilities. Klang Valley, while the KL central busi- Advice for investors ness district (CBD) continues to thrive, the Economic reforms by the new govern- Advice for investors focus on KL fringe locations is rising and ment is expected to improve the country’s For fi rst time buyers and buyers of aff orda- decentralised locations such as Petaling growth trajectory. In the residential seg- Lim Boon Ping ble housing, there are certain incentives Jaya are seeing growing interest. ment, potential buyers and investors are and interest rebates in Budget 2019 that encouraged to take advantage of exemp- Malaysian Institute of Estate they can take advantage of. In a buyers’ Describe 2018 in one word: tions and initiatives, such as the stamp Agents (MIEA) president elect market, there are multiple choices from UNEXPECTED duty waiver and developers’ rebates and various developers and consumers can discounts. However, buyers and inves- take advantage of the high price discounts, Describe what 2019 would be like in tors need to understand the particular especially from completed developments. one word: sub-property market in specifi c locations HOPEFUL before making their decisions, and should Describe 2018 in one word: purchase properties from credible devel- CHALLENGING opers. Describe what 2019 would be like in Sarkunan Describe 2018 in one word: one word: HOLDING-ON CONSOLIDATION Subramaniam Describe what 2019 would be like in Knight Frank Malaysia one word: CLEARING YY Lau managing director JLL Property Services Top three challenges for the property (Malaysia) Sdn Bhd country Stanley Toh market in 2019 1. How to keep the property market vibrant head and managing director Laurelcap Group of while managing price hikes. It’s always Companies executive a tug of war between the two. When the market gets vibrant, property prices in- director crease, leading to aff ordability issues. On the other hand, too many cooling measures may aff ect many other in- dustries related to real estate. 2. How to ease the lending process, but still ensure that only those who can af- ford to, obtain bank loans. While many complain about the stringency of the Top three challenges for the property current lending policy, the bank has to market in 2019 ensure that the people who borrow are 1. In the residential segment, providing truly qualifi ed. aff ordable homes will remain the key 3. Th e reach of aff ordable housing to those challenge in 2019. Th ere is a mismatch who need them. Although there are Top three challenges for the property in supply and demand in terms of avail- many so-called aff ordable housing pro- market in 2019 able housing products (overhang/un- jects in the market, are they really ‘af- 1. Ensure resolution and clarity in com- sold units) and aff ordability level. Many fordable’? munication of 1MDB-related issues fi rst-time homebuyers have been priced Top three challenges for the property at national and international levels to out as home price growth outpaced in- market in 2019 Market catalysts correct negative perceptions of the past. come growth. 1. New government’s austerity drive which Technological innovation and 2. Checks and balances, preventive meas- 2. The implementation of the financial saw huge infrastructure projects such crowdfunding will change the way ures such as upholding transparency to schemes, assistance and programmes as the High Speed Rail (HSR) cancelled properties are transacted or owned. be clearly communicated to the public that aim to help the M40 (middle or put on hold will stunt economic For instance, developers have started to restore investors’ confi dence. 40%) and B40 (bottom 40%) groups in growth. to sell their properties through online 3. Changes in policies will result in a cau- their loan applications, deposits and 2. Budget 2019 unveiled new fi scal policies shopping portals like Lazada and through tious stance by the industry, buyers and repayment schemes under the second which will impact the property market, the FundMyHome scheme. Developers investors, including changes in RPGT, National Housing Policy 2.0 (NHP 2.0) such as the revised RPGT rate. are trying to incorporate Real Estate stamp duty, and Common Reporting is expected to be a challenge. 3. Stamp duty increase from 3% to 4% for Investment Trusts, or issue bonds Standard. Meanwhile, global devel- 3. On the commercial front, the current transfer of properties that are RM1 mil- through Special Purpose Vehicles into opments (China-America trade war) oversupplied market in the offi ce sec- lion and higher home ownership in Malaysia. All these and competition from other emerging tor will continue into 2019 and beyond, will bring a paradigm shift to the property markets, such as Vietnam, may cause as more new supply are completed. Th ese last two will aff ect the sub-sale mar- landscape. Malaysia to lose market share. Th e tenant-led market will put further ket for 2019. Most sellers holding property pressure on both rental and occupancy for a long time (>5 years) will be reluctant Advice for investors Market catalysts levels as there is no immediate cata- to offl oad their properties due to the in- It doesn’t matter when you bought your Approved foreign investment has in- lyst to boost demand in the short term. crease of RPGT from 0% to 5% for citizens property, it matters when you sell. As long creased signifi cantly as of June 2018. Im- However, with renewed business con- and permanent residents. as you hold your property long enough, it’s proving or keeping up with this momen- fi dence and as more clarity in the pol- almost an assurance that you will make a tum will bring better FDI in 2019. Malaysia icies of the new government unfolds, Market catalysts profi t out of it. leaped nine places to the 15th spot in the we expect higher levels of local and Th e property market will be driven largely World Bank’s Doing Business 2019 Report. foreign investments moving forward, a by the aff ordable residential segment and Describe 2018 in one word: Th e government has announced plans to positive for the economy in the mid- to not the high-end market. UNCERTAINTY further remove obstacles in doing busi- long-term. ness, especially for foreign investors. Do- Advice for investors Describe what 2019 would be like in mestic investors will benefi t from similar Market catalysts I advise bargain hunting, especially with one word: empowerments. The Domestic Invest- 1. Th e exemptions and initiatives tabled unsold developer’s units. Due to the 5% RECOVERY The property market has ment Strategic Fund, for example, can in Budget 2019, in particular the waiv- rise in RPGT, many sellers will likely actually started to shrink since 2012. We aid and improve local companies and in- er of stamp duty are expected to kick- be reluctant to sell off their property. If believe the market has hit rock bottom in crease domestic investments. start the housing market moving into they do, it will be added on to the selling 2018, in light of the weakened market senti- Crowdfunding proposed under Budget 2019 and beyond. First-time home price, rendering the property unattrac- ment and uncertainties from the change in 2019 and the availability of more aff orda- buyers will benefi t from the waiver on tive to many purchasers. Thus, buyers government and its new policies. In 2019, ble housing are important catalysts to the instruments of transfer and the loan will instead purchase properties from people will have a better and clearer direc- residential market. agreement via reducing home fi nanc- developers which are giving discounts, tion as to how the new government is going ing costs. Subsequently, overhang in helping to soak up the overhang of un- to run the country, including the policies Advice for investors residential properties that fall under sold stock. aff ecting the property sector. Business con- Th e property market now has many op- the exempted price category are ex- fi dence will improve as a result of greater portunities. Prices and capital values in pected to be reduced. Describe 2018 in one word: transparency and better governance. various sectors are more attractive than 2. Confi dence returns to Malaysia as more CHANGE CONTINUES NEXT PAGE EP 12 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL

FROM PREVIOUS PAGE property IF you can aff ord it as the prop- Describe 2018 in one word: erty market has softened, relative to the OBSERVE boom years. However, one must conduct Choy Yue Kwong Michael Kong thorough research before buying a prop- Describe what 2019 would be like in erty. Check the current market value, work one word: Rahim & Co International Association of Valuers, out the fi nancing commitments, inspect EFFORT Sdn Bhd director Property Managers, Estate the property carefully and explore the exit options. It is crucial to understand the dy- Agents and Property namics of the locality. Consultants in the Private Michael Loo Describe 2018 in one word: Sector Malaysia MODERATE Malaysia’s economy ex- PA International Property (PEPS) president panded 4.9% in the fi rst half of 2018 com- Consultants (Penang) Sdn pared to 5.7% the previous year and is ex- pected to moderate further in 2019. Th e Bhd executive director property market recorded a marginal de- cline in the fi rst half of 2018 in line with a challenging economic and fi nancial sit- uation. According to the Valuation and Property Services Department, a total of 149,889 transactions worth RM67.74 bil- lion were recorded in 1H2018, showing a decrease of 2.4% and 0.1% respective- Top three challenges for the property ly from the same period last year. Many market in 2019 major developers experienced a fall in 1. Th ere is still an insatiable demand for share prices, with some up to 30%. Many aff ordable housing at the right location, potential causes exist, such as the over- as the majority of wage earners can only hang situation, aff ordability issues, loan aff ord houses within the RM300,000 rejections and median wage. to RM500,000 price range. The real Top three challenges for the property challenge is for enough land to be market in 2019 Describe what 2019 would be like in Top three challenges for the property made available as the underlying factors 1. Controlling house prices — REHDA one word: market in 2019 for the sustainability of affordable members will reduce house prices by CAUTIOUS Going into 2019, the ap- 1. Slow market absorption in residential housing are cheap or free land, low 10% which is one way to liven up the proach would be cautious due to the chal- property due to mismatch between construction cost, and very importantly, property market. Sales and Service Tax lenging national debt situation. Th e over- household income and property price. government-driven initiatives. (SST) exemptions could help reduce hang situation would take time to resolve Th e price correction process will balance Th e newly formed National Aff ordable house prices by reducing the cost of while the general economy is expected to supply and demand in the market. Housing Council has targeted to developing houses. However, there are moderate. 2. Cautious sentiment will continue, due complete 1 million aff ordable homes other costs and fees to be paid, such as to the macro-economic environment within 10 years. To put into perspective land, fi nancing, compliance and profes- that will make 2019 another challenging the formidable challenge ahead: PRIMA sional fees. Th e government should look year. Th e property market is experienc- as at early 2018 only completed 17,000 at reducing the statutory contribution CY Kok ing a period of consolidation and price/ units against a target of 500,000 units and compliance costs paid by develop- rental correction in terms of rentals and in fi ve years and Singapore’s Housing ers and ensure a clear, transparent and Oregeon Property sales. and Development Board took 55 years rapid approval process.Th is would also Consultancy director 3. Retail to remain challenging in 2019 due to complete one million homes! minimise mistakes, faults and delays. For to additional supply, where there will 2. Developers are facing strong headwinds instance, a direct release mechanism be consolidation in the industry and having to cope with a slow market, sig- can be eff ected for unsold bumiputra changes in the landscape with greater nifi cant unsold stock and unsupportive units within a certain time frame. competition with online shopping. government policies. Th e unsold stock 2. Financing — Stamp duty exemption is is partly due to overbuilding without good news for Malaysians looking to Market catalysts proper market studies and partly due to own a house. Unfortunately, the tight- FDI into Malaysia increased to RM3.95 bumiputera quotas especially in states ening of lending by banks is deterring billion in the third quarter of 2018, where the quotas are high and the re- fi rst time house buyers. We shouldn’t compared with a record low of RM2.84 lease mechanism is very slow. Th e latter blame the banks because most first billion in the previous quarter and RM11.74 poses a formidable challenge as it in- time house buyers do not qualify for billion in the same period a year earlier. volves a change in decades-long policy. the loan or pass the credit assessment. E-commerce is a new market segment 3. Th e slowdown in the retail market will Some parties are experimenting with for the industrial property segment in impact stratifi ed malls where retail lots crowdfunding the purchase of houses. Malaysia. Th e demand of service-oriented have been sold to many individual pur- Th is has to be carried out carefully to industries such as third-party logistics chasers. With the growth of online shop- avoid aggravating the debt situation. (3PL) and e-commerce warehousing ping, we will see a drastic drop in busi- 3. Aff ordable housing — One of the new Top three challenges for the property is rising. An emerging industrial ness for businesses in stratifi ed malls. government’s pledges is to build 1 mil- market in 2019 development trend is the integrated Th e challenge is not only to buy back lion aff ordable homes within two terms. 1. More controls and restrictions to be industrial park and offi ce. from the individual owners to reconfi g- Demand is high but homes must be in implemented as the new government ure or redevelop the mall, but to put in the right location, with easily accessible will need to rebuild the structure within Advice for investors further investment at a time when the amenities, facilities and public transport. a very short period of time. It’s a buyers’ market now — good time for retail market is slow. A proper defi nition of “aff ordable” is 2. New system or policies may negatively bargain hunting. Some property owners needed. Housing developers are capable impact existing investors, who made who face liquidity problems may be pre- Market catalysts of off ering aff ordable homes, but they decisions based on the old system. pared to let their property go at more re- Th e year 2019 is too soon for the property are hesitant as it is a segment with low- 3. Th e desperate need to fi nd a solution to alistic prices in exchange for cash at hand. market to forge ahead. From 2009 to 2013, er profi t margins. However, this should the oversupply of high-end and high- Developers are also providing various at- residential property prices generally dou- not be a deterrent if the government rise residential units as prices are get- tractive packages. bled. Prices ran ahead of fundamentals, off ers incentives for them to develop ting out of control and the people who which will take some time to catch up. aff ordable homes. need a house are not able to own one. Describe 2018 in one word: Due to oversupply, it is unlikely that the CORRECTION The year 2018 was a retail and offi ce market will do any better. Market catalysts Market catalysts market correction year to rebuild market Th e only catalyst is perhaps the feel- Th e new government will be one of the Th e control of supply — Th e increase in fundamentals. good factor arising out of the cessation of main catalysts for the property market in supply of aff ordable houses will let the a potential trade war between US and Chi- 2019. If the current government could do people who really need a house to own a Describe what 2019 would be like in na, oil price stabilisation and a sustained what the previous government failed to house. By decreasing the supply of high- one word: share market rally. accomplish, it will help strengthen the er-end high-rise residential units we CONSOLIDATION By reinforcing new But realistically, since there is still market. Eliminating leakages, implement- might bring prices under control market confi dence, opportunities abound strong demand for aff ordable houses, the ing bold policies and fair practices to lev- during this consolidation year. focus should be to build more such homes el the playing fi eld will bode well for the Advice for investors in the urban and near urban areas. market in the long run. As the market gets more complicated, buy- ers and investors should study or survey Advice for property buyers or investors Advice for investors before making decisions. Get advice from in the current property climate This is a good time to buy your dream the professionals to understand the risks. Anytime is a good time to invest in prop- FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 13 YEAR-END SPECIAL

erty if the location and price is right. Cur- ty sales and reduce the number of un- 38,500 unsold residential units and 25% rently the property market is bearish, most sold properties in the aff ordable and mass unoccupied offi ce space, and make them people are not interested in investing. Th is Jerome Hong housing segments. disappear. Although this will happen in gives potential property investors plenty time, what is really needed is a restora- of time to go property hunting, compare PA International Property Advice for investors tion of confi dence in the capital markets. prices and negotiate close to their target- Consultants Sdn Bhd Property buyers, especially first-time Th e fi rst signs have already arrived and ed price. homebuyers should look for properties we are seeing renewed foreign interest managing director within their means so as to secure the in Malaysian investment property. Th is is Describe 2018 in one word: bank loans. Investors should take the wait- extremely encouraging but in reality we ‘FLAT-TASTIC!!’ and-see approach, research and seek con- know that rebuilding confi dence is going sultation before making any major invest- to take time and a lot of hard work. Describe what 2019 would be like in ments. one word: Pick the right product and locations such Describe what 2019 would be like in UNEXCITING as KLCC and KL Sentral where property one word: products are still able to generate stable BETTER rental yields and have potential for capital appreciation. Datuk Soam Heng Choon Describe 2018 in one word: Anthony Chua FLAT KGV International Property Real Estate & Housing Describe what 2019 would be like in Consultants executive Developers’ Association one word: Top three challenges for the property CONSOLIDATION/CORRECTION director Malaysia (REHDA) president market in 2019 1. Review of on-going and planned mega projects that were approved by the pre- vious government as part of cost-cutting Datuk Christopher measures, such as: i. LRT3 — construction of five sta- Boyd tions with low projected passenger ridership along the route has been Savills Malaysia executive shelved. Aff ected stations are Lien chairman Hoe, Temasya, SIRIM, Bukit Raja and Bandar Botanic. ii. HSR — Deferment of the KL- Singapore HSR project for about two years to May 31, 2020. Meant to serve as an economic catalyst for areas along its routes, its Top three challenges for the property Top three challenges for the property deferment has led to the review market in 2019 market in 2019 of upcoming mega projects such 1. Uncertainties surrounding policies and While developers are cautiously optimis- as Malaysia Vision Valley (MVV), regulations aff ecting the property in- tic about improvement in consumer sen- Bandar Universiti Pagoh and Bandar dustry. timent, there are still many challenges Malaysia. Investor confi dence has 2. Housing aff ordability issues. faced by industry players. Among them been dampened. 3. Soft sentiment. are: iii. MRT3 — Th e postponement of the 1. Rising cost of doing business includ- MRT3 or Circle Line will aff ect devel- Th e property market is directionless at the ing input compliance cost. As land is opers who have bought land banks moment. Property players are awaiting a state matter, state governments have and planned projects along its route. Top three challenges for the property clear policies and regulatory framework been increasing their land premium, Th ese aff ected projects are now be- market in 2019 from the new administration. Th is is ex- development charges, and other relat- ing reviewed, in terms of plot ratio/ 1. Confi dence — Malaysia has much to pected and we should allow reasonable ed contributions over the years. Th ese, development concept, product mix, be proud of and so much to look for- space for the new administration to operate. along with high land and construction timing of launch and others. ward to. Developers and those selling costs will impact the housing industry. iv. East Coast Rail Link (ECRL) — Re- in the secondary market are fi nding the Market catalysts 2. Access to mortgage fi nancing and the negotiation of the ECRL project is banks joyless and over-cautious when Likely catalysts include fiscal policies ability of buyers to obtain the right mar- on-going. it comes to mortgage applications. Th e to invigorate transactions in the market gin of loan remain the main hurdle for 2. Property-related taxes under Budget market would improve if bankers ease and a stable political environment for developers in securing sales. 2019 — The stamp duty increase for their collective feet off the brakes. businesses to thrive. Th is will hopefully 3. Unsold stocks remain high nationwide. property transfers worth more than RM1 2. Over-supply — Developers need more generate wealth that will eventually fl ow Th is could be due to mismatch of price million will increase the acquisition cost and better market information. Why into property investments. The market and product to location. Another rea- for properties and may dampen inves- do NAPIC, Bank Negara Malaysia and is unbalanced with a glut of expensive son is high bumiputera quota stock tors’ interest. Th e revision of RPGT rates Khazanah all operate their own property unsold properties, while the lower seg- due to non-release of quota in many will increase the exit cost for property market research units, when DBKL, for ment craves reasonably-priced properties. states. We would therefore advocate a ownership. It will encourage owners and example, does not? uniform quota of 30% nationwide with investors to hold on to their properties 3. Overhaul — We need a fresh look at the Advice for investors an automatic release mechanism for for a longer period whole property development and de- To be cautious. While there are opportuni- unsold bumiputra quota units. 3. Disparity between transaction prices livery process. It is overly cumbersome. ties in the market, cheap does not always and asking prices/newly launched pric- Conditions on title and conversion fees equal good returns! Proper research is still Market catalysts es — New launch prices being higher serve no purpose. Orderly development the key to a good deal. Th e main catalyst for the property market than the transaction prices of similar should be controlled by the planning in 2019 would be better economic perfor- properties in the same locality is now authority through zoning, setbacks, Describe 2018 in one word: mance and better consumer sentiments. normal. Coupled with the challenging plot ratios and building codes. ANXIOUS Access to fi nancing can be a big contrib- property market, many owners are un- uting factor as well. able to realise their asking prices. Market catalysts Describe what 2019 would be like in In view of the current gloom in the market, one word: Advice for investors Market catalysts news of some really solid foreign invest- REBALANCE Property prices are at their most com- Measures announced in Budget 2019, ments in Malaysian commercial property petitive level now. Buyers and inves- such as the RM1.5 billion allocation to would confound the naysayers and restore tors alike should take advantage of this various aff ordable housing programmes, some faith in the future. to get the best bargain given the high Bank Negara Malaysia’s RM1 billion fund, stock level. stamp duty exemptions and waivers and Advice for investors the RM25 million allocation to Cagamas Look for bargains in the secondary market Describe 2018 in one word: Bhd for mortgage guarantee of fi rst time because they won’t be there forever. CHALLENGING homebuyers with household income of RM5,000 as well as property crowdfund- Describe 2018 in one word: Describe what 2019 would be like in ing platforms that will provide an alter- ‘BLEAH’ Th e euphoria that followed word: native source of financing for property election results contained a belief that HOPEFUL purchase, are expected to boost proper- some kind of fairy dust would settle on the EP 14 FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY YEAR-END SPECIAL Glamp ESCAPES TIARASA it up!

BY NATALIE KHOO

Everybody loves vacations and if you are planning to go local, why not try glamping in our Tiarasa tropical rainforest for Escapes Th e brainchild of Malaysian an unusual holiday director, producer and experience? 1actress Puan Sri Tiara Jacquelina GLAMZ @ GENTING The word Eu Eff endi, this is one of the most luxurious glamping sites you can glamping is the come across in Malaysia. Choose combination of from over 20 safari-style tented glamorous and villas and fi ve dreamy treetop villas — with attached bathrooms, hot camping, which is showers, deep soaking bathtubs, essentially staying air-conditioning, and free WiFi. in a hotel-like If you need a bigger space, three bespoke villas await you — The environment amidst Maui Treehouse, The Lion Sands nature within a tent Tent and Th e Marrakech Tent. Sprawled across seven acres or at least canvassed of pristine rainforest with natural walls. streams in Janda Baik, you will not EdgeProp.my has be bored with the many activities you can participate in as part of your found ˎ ve glamping glamping experience including na- sites, many of which ture walks, bird-watching, enjoy- are located around ing a movie under the stars at the Moonlight Cinema and stargazing. the verdant forest You can also be part of the lighting and hills of Pahang ceremony of tiki torches and the Th ere are several room types can fi t 350 people and 120 people such as the Janda bonfi re at sunset. Glamz @ including the dome room, VIP respectively. Complimentary breakfast baskets room with private Jacuzzi and the Some of the activities you can Baik area, thanks can be delivered directly to your Genting bell tents. Some of the facilities take part in include jungle hiking to its cool and lush room or you can have your after- Many of us would provided for all the rooms include or your own BBQ party at a min- natural environment noon tea at a picnic by the Enderong be familiar with attached shower and toilet, a pri- imal charge. River, packed in evocative tiffi n car- 2Genting Highlands and the many vate entrance, room light, person- as well as accessibility riers and served on camping plates, hotels up there. But you can also al storage basket, hammock and WHERE: Glamz, 1, Jalan Meranti, via highways from with teh tarik in camping mugs, for choose to go glamping there fl oor bean bags. 69000 Genting Highlands, Pahang an authentic camping experience. these days. The rooms are not sound- WEBSITE: glamz.com.my Kuala Lumpur, which One would often associate proof, allowing you to fully im- RATES FROM: RM250 per night for is a mere 45-minute WHERE: Tiarasa Escapes, Lorong camping with being in a hot merse in the outdoor experience. room stay, RM3,150 for Glamz drive away. Enderong, Janda Baik, 28750 Bentong and humid jungle but not here One could also host events such Dome event space and RM2,300 CONTACT: (012) 8877777 — Glamz @ Genting off ers a cool as weddings, celebrations or cor- for Greenhouse event space WEBSITE: tiarasaescapes.com crisp atmosphere at the foothills porate team building at the Glamz TENT RATES FROM: RM990 per night of the highlands. Dome and Greenhouse which FRIDAY DECEMBER 28, 2018 • THEEDGE FINANCIAL DAILY EP 15 YEAR-END SPECIAL

Tanjung Inn

Located in Cherating, Pahang, this INN TANJUNG resort has been operating for more than 25 years. Formerly known as 3Villa De Fedella, there are a total of 34 chalets and 21 tents available for rent. Th e tents are more fond- ly known as Tanjung Tents with their tagline — “Where you can spend a small fortune to live like a homeless person”. Nevertheless, the tents sit on a 12 by 12 inch platform with two single mattress- es, mosquito nets, fan, plug points, reading lights and a small faucet. Th e tents are decked with a patio overlooking a pond while the bathrooms are communal and located on either side of the pond. Some of the activities you can enjoy in the vicinity (outside the resort) include fi refl y-watching tours, visits to the turtle sanctuary and kiteboarding.

WHERE: Tanjung Inn, Jalan Cherating Lama, Kampung Cherating Lama, 26080 Pahang WEBSITE: tanjunginn.com CONTACT: (011) 3989 9402 RATES FROM: RM70 for tents (excluding breakfast)

The Sticks THE STICKS Have you heard of the word tendok? Well, at Th e Sticks located at Kuala SERAI CARAVAN Kubu Baru, Selangor you will be able 4to experience what it feels like living in a cross be- tween a tent and a wooden hut or pondok as they call it in Bahasa Malaysia. Th is gives your stay a truly rustic feel. Th e accommodation options include the Read- ing Rock Tendok, the Beach Tendok, the First Ten- dok, Bamboo House, Riverside Tendok, Serengeti Tent, Th e Nest and Opera House to accommodate a varied number of people (from two to six). A variety of activities one could enjoy include jungle trekking, paragliding (depending on the weather), white water rafting, Sticks botanical walk or even just enjoying the good ol’ board games. Some of the activities require a fee and a minimum num- ber of people before the activity can be carried out. Half-board meals are also included with the off ers 10 suites and 34 units of Safari accommodation package while full board meals Caravan Tents. Some of the cool activities you can be arranged with additional charge. For those Serai can take part in are: going on a local who cannot spend a night in the accommodation, Spanning some 10 Bentong ground tour which has to day trip arrangements are also available during acres of lush green- be pre-arranged beforehand, river weekends and public holidays. 5ery, Caravan Serai’s mission is to and nature walks, DIY handmade give you a true nature staycation. soap, crochet workshops and even WHERE: The Sticks, Lot 213, Jalan KKB – There is a mix of private suites and karaoke! Guests can also opt to dine Fraser’s Hill, 44000 Kuala Kubu Baru, Selangor glamping tents available. The De- at the Keratong Riverside Restaurant WEBSITE: thesticks.my luxe Safari Tent is fully equipped at Caravan Serai where simple farm RATES FROM: RM206 per night per person with a queen size bed or twin-shar- fresh steamboat and barbecue meals ing single beds, basic furniture, can be prepared for you. air-conditioner or standing fan and an attached bathroom which will WHERE: Caravan Serai, Lot 3159 be much welcomed by first-time & Lot 3160, 12 3/4 Mile Jalan Tras,

THE STICKS campers. 28700 Bentong, Pahang Th e project in Bentong, Pahang CONTACT: (03) 7972 3655 has a 150m hill as its backyard and is WEBSITE: caravanserai.com.my surrounded by the Keratong River. It RATES FROM: RM190 ++ per night CARAVAN SERAI CARAVAN