Bank Negara to unveil DIBS curbs?

The Bank Negara may soon impose curbs on the Developer Interest-Bearing Scheme (DIBS), an easy financing package offered by developers in joint-promotion activities with banks.

Once this happens, future primary sales would be negatively affected, said Hong Leong Investment Bank (HLIB), adding that the curbs could be rolled out ‘later this week.’

“While the exact measures are yet to be revealed, we believe the curbs would impact this easy financing scheme,” noted HLIB.

Under the scheme, buyers pay less initial payment for their property purchases as developers absorb the initial interest until the units are delivered. Most of those that avail this scheme have intentions to flip the property upon possession to make extra cash even with less capital. This scenario fuels speculation.

According to a property consultant, “Typically, under the scheme, buyers only foot between five percent and 10 percent of the house price upon signing the sale and purchase (S&P) agreement and only begin payment when the project is completed.”

“There are caveats to this scheme, as buyers commit to a financial obligation upon the signing of the S&P and the interest cost has actually been already passed on to buyers via the higher selling prices.”

Property consultants also argue that the DIBS puts prices at a higher artificial trajectory. The recent slew of sales in the primary market has been attributed to the attractive DIBS scheme, leaving the secondary property market in a laggard movement.

Moreover, putting limits to the scheme also supports the government’s aim to stop the persistently growing household debt.

“In the recent past, Bank Negara has been compiling information on the scheme and studying its impact on the sector,” a source said.

Mah Sing to preview ‘Creative Tower'

Mah Sing Group will hold the preview of its mixed-use project ‘Icon Residenz – the Creative Tower’ at Icon City Sales Gallery, SS8, Petaling Jaya this weekend.

Located near Kelana Jaya in PJ, the project comprises 333 apartments within a 39-storey tower. They include dual key units (717 sq ft), two bedders (675 sq ft) and three-bedroom units (965 sq ft), with prices ranging from RM588,000 (unfurnished), or RM850 psf.

The Creative Tower follows the 2012 launch of the first Icon Residenz tower. However, the former is different from the latter because buyers can select the fixtures or fittings they want.

“It is a completely customisable serviced residence, offering owners a free hand in crafting a home from the white-planned canvas provided for them here while at the same time enjoying all the privileges of a serviced apartment in a prime location,” said Mah Sing COO Andy Chua.

Moreover, buyers of two-bedroom units are entitled to a single car park, while the dual key units and three-bedders come with two parking bays each.

The dual key units have two separate entrances but are connected inside through a door. This set-up allows multi-generational living such as families living with grandparents, or the extra space can be rented out or used as an office.

Amenities include a gym, sun decks, roof gardens, barbecue deck, a concierge service, children’s playground, leisure and wading pools, as well as a multi-purpose outdoor function terrace.

During the preview, Mah Sing will also offer early bird privileges such as Developers Interest Bearing Scheme (DIBS) and zero legal fees on the Sales & Purchase Agreement and other necessary documents.

A slew of projects for Kota Belud, Sabah

Apart from ensuring the successful completion of mammoth projects, the government will also bring tremendous development in Kota Belud in Sabah and improve the living standards of its residents.

“Kota Belud has a bright future. It is ready for robust development for the state government has a clear vision of its development agenda,” according to Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan.

Projects in the pipeline for the constituency include a public housing project, the Kota Belud-Pitas Agropolitan Project, the Usukan Bay Oil & Gas Support Industry Centre, as well as a portion of the 2,300km Pan Borneo highway, which will connect Sabah and Sarawak.

In particular, the Usukan O&G support industry centre, which is being implemented by the Petronas Asian Supply Base and Sabah Foundation, is expected to generate over 1,000 jobs.

“The project will help raise the income, skills and capabilities of locals, particularly young people who want to involve themselves in oil and gas industry and related sectors,” noted Abdul Rahman who is also the MP for Kota Belud.

Moreover, his ministry will identify suitable sites for 500 affordable houses in Sabah, including those in Kota Belud.

“The ministry will accelerate the construction of affordable homes for the people and we are committed to ensure the successful completion of national housing projects in the state,” he added.

Prolintas to build 2 new highways

Projek Lintasan Kota Sdn Bhd (Prolintas) plans to invest RM8 billion in two new highways in Peninsular Malaysia, according to industry players and analysts covering the construction sector.

Works for the Sungai Besi-Ulu Klang Elevated Expressway (SUKE) and the Damansara-Shah Alam Elevated Expressway (DASH) are expected to commence within the next 12 months as Prolintas has already obtained the concessions, reportedBusiness Times.

Two of the seven highway projects to be developed under the 10th Malaysia Plan, DASH and SUKE will spread 20.1 km and 31.8 km, respectively.

Three-lane, dual carriageway DASH will start at the Puncak Perdana U10 Shah Alam intersection, serving as link for Alam Suria, Puncak Perdana, Kampung Melayu Subang, Denai Alam, the Rubber Research Institute of Malaysia, Jalan Sungai Buloh, Damansara Perdana, Kota Damansara, Mutiara Damansara, and end at the Penchala interchange.

SUKE, on the other hand, will start in Sri Petaling and exit at Ulu kelang, while passing through Sungai Besi, Cheras-Kajang, Alam Damai, Taman Putra, Taman Bukit Permai, Taman Dagang Permai, Taman Permai Jaya, Ampang, Taman Kosas and Taman Hillview.

In addition, the three-lane elevated expressway will connect key highways in the eastern Klang Valley, including the Kuala-Lumpur-Seremban Highway, Akleh, Besraya, the Duta-Ulu Kelang Expressway, Kesas, the Cheras-Kajang Highway and MRR2.

Meanwhile, Prolintas is said to be working on the best financial model for the projects that addresses two key issues, the cost of construction materials and the cost of compensation for businesses that need to relocate prior to the start of actual construction works.

KL Monorail extension to reach Bandar Sunway

The RM3 billion KL Monorail extension project will boost the order books of construction firms lucky enough to be selected for the mega project, according to CIMB Research. It will also further increase the positive effect of the Mass Rail Transit (MRT) and the KL-Singapore high-speed rail (HSR) to Malaysia’s construction industry.

As such, CIMB Research deems the construction sector to be ‘overweight’ “as government execution on larger-scale projects will be more rapid in the coming months.”

Moreover, the proposed project, which may involve extending the alignment to Bandar Sunway, has piqued the interest of many firms.

According to sources, Malaysian Resources Corp Bhd (MRCB) already filed its proposal for the KL Monorail extension project, while other firms such as IJM Corp are also planning to submit their own proposals.

Despite different proposals, Scomi Engineering will be the one to provide rail cars and systems.

“This news is not surprising as we are aware that proposals and tenders for the KL Monorail extension will progress in the second half. However, stretching the KL Monorail extension to Bandar Sunway is a positive surprise,” noted CIMB Research, adding that the news bodes well for the entire construction sector.

Bina Puri to roll out RM2.5bil worth of projects

By Farah Wahida:

Bina Puri Holdings plans to unveil several property projects with a combined gross development value (GDV) of RM2.5 billion in the next five years, mainly in Sabah and the Klang Valley.

According to Executive Director Matthew Tee, these upcoming projects are expected to boost the group’s unbuilt orderbook of RM1.68 billion as of 30 May 2013.

Future projects include the RM1.29 billion RIVO City in Brickfields. With construction works set to commence next year, the mixed-use project is a result of Bina Puri’s partnership with Syarikat Prasarana Negara.

“We are finalising the method to finance the development because the concept of this project is quite unique as Prasarana does not allow us to charge the land,” noted Tee.

In this project, Prasarana owns the land, while Bina Puri develops and markets the property, explained Bina Puri Executive Director We Her Ching.

“Selling price for the commercial portion will be between RM700 and RM900 psf. We are also planning to build a new access to the area from the Federal Highway as a selling point for the project,” he added.

Meanwhile, Bina Puri’s upcoming projects in Kota Kinabalu, Sabah include the RM84.6 million One Jesselton and the RM61 million Jesselton View.

So far, the company’s best-selling project is the half-complete Puri Tower in Puchong, where the units earmarked for non-bumi buyers have been sold out.

Johor home sales to remain resilient despite tax hike

By Farah Wahida:

Despite the state government’s plan to impose a higher tax on foreign property owners, properties in Johor, particularly those in Iskandar Malaysia, will continue to appeal to foreigners, according to Pulau Indah Ventures General Manager Roslina Arbak.

She cited the robust demand for the company’s newly-launched project called Afiniti Residences @ Medini Iskandar, where not even a single foreign buyer had backed out.

The 21-storey project comprises 147 luxury strata residences. Unit sizes range from 715 sq ft to 1,064 sq ft, while prices start from RM850 psf to RM1,000 psf, depending on the location.

Touted to become Medini’s first high-rise project, Afiniti Residences will feature service apartments, a wellness centre, a corporate training centre and a wellness-themed retail offering. With a gross development value of RM500 million, the development is nestled on a 2.02ha site and is being developed by Pulau Indah Ventures — a 50:50 joint-venture between Temasek Holdings and Khazanah Nasional.

As of 31 May 2013, the project has received 1,570 applications, of which 60 percent are Malaysians, 32 percent are Singaporeans, while the rest are from the UK, Indonesia and South Korea.

“Due to the overwhelming response for the project, we will hold a balloting process on Saturday,” noted Roslina.

Meanwhile, Christopher Boyd, Executive Chairman of CB Richard Ellis (CBRE Malaysia) is optimistic that foreigners will continue to buy properties in Iskandar, despite the tax hike. CBRE is the project’s marketing agent.

“Malaysia has one of the most liberal foreign property ownerships in the region and foreign buyers will continue looking to buy properties here,” he added.

Angry Birds theme park to open in Johor

By Farah Wahida:

Johor Corporation (JCorp) has unveiled the masterplan of its RM1.5 billion redevelopment project of the Tun Abdul Razak Complex (KOMTAR), including the project’s new logo and the design of its mall, which is expected to open in May 2014.

To be renamed JBCC, the project comprises a mall, a hotel and two office towers.

“When fully completed, the whole JBCC development will include the Komtar JBCC shopping mall, offering 405,000 sq ft of unrivalled retail experience, two high-rise towers – a renovated Menara Komtar and new Menara Johor Land, and a new four-star hotel to serve both local residents as well as visitors from Singapore and beyond,” said JCorp President and Chief Executive Dato’ Kamaruzzaman bin Abu Kassim.

“Komtar JBCC aims to reclaim its status as iconic landmark in the heart of Johor Bahru and emerge once again as the city’s premier shopping, lifestyle, dining and entertainment destination,” he added.

More importantly, Komtar JBCC will also get South East Asia’s first Angry Birds Activity Park, under an agreement signed with Finnish firm Rovio Entertainment Ltd.

The 26,000 sq ft indoor theme park will include an activity area, party room, retail shop and restaurant.

“The Angry Birds characters were born in Finland but are known worldwide by people of all ages. This is a perfect fit for our mall which will cater to a wide audience of local and international visitors, including many families,” said Haji Yusaini, Executive Director of JCorp’s subsidiary Damansara Asset Sdn Bhd.

Johor tax hike draws mixed views

By Farah Wahida:

The Johor government’s plan to levy higher tax on foreigners drew mixed reactions as details of the said proposal are still under discussion, reported The Star.

According to Chief Minister Mohamed Khaled Nordin, approximately 130,000 foreigners owning properties in Johor will need to pay higher tax rates. Although the rates are still being discussed, they are expected to be introduced by end-2013, following a state-wide property re-evaluation exercise.

Although there was a negative reaction in Bursa Malaysia, with UEM Land — a proxy to Iskandar’s property market — down nine sen to RM3.41, some experts believe that the higher tax would have little impact. This is because positive market sentiments and foreign property buyers only account for a small percentage of the market.

Foreign property ownership in the state stands at five percent, noted Koo Moo Hing, branch chairman of Real Estate and Housing Developers Association (REHDA Johor).

“We hope to get more details on the proposal and better still if the state government could get feedback or views from developers,” he added.

Samuel Tan Wee Cheng, Executive Director at KGV International Property Consultants, also believes that the proposal will not significantly affect Johor’s property market, as property prices in the state are still cheaper compared to nearby Singapore.

However, the move could create uncertainty and may lead to foreigners adopting a “wait-and-see” approach, said Siva Shanker, President of Malaysian Institute of Estate Agents (MIEA) President.

“If I’m looking to invest in property in Johor, I’d hold off my purchase until I’m sure what it’s all about. If the whole thing is going to take say, six months to be finalised, then investors are going to wait and see for six months.”

Lim Boon Ping, COO of Johor Baru-based Tiram Realty, added: “If it’s a drastic increase, it may dampen the market for a while. But it’s likely to be for high-end properties and I don’t think it would be a major adjustment. Also, sentiment in Johor is strong and probably won't have an impact.” 

Tourism ministry to focus on Sabah, Sarawak

By Farah Wahida:

Malaysia will promote Sarawak and Sabah as the country’s premier tourism spot, in line with the federal government’s goal of transforming the Bornean states into a global and regional tourism hub.

“I want to promote Sabah and Sarawak as I believe the two states can play a major role in Malaysia’s tourism industry,” said Tourism and Culture Minister Mohd Nazri Aziz, noting that both state have various tourist attractions.

For instance, Sabah has the world-famous Pulau Sipadan and the iconic Mount Kinabalu, apart from other key attractions such as colourful cultures and multi-ethnic communities.

“Many tourists from China and the West enjoy the unique and natural beauty that Sabah offers. I hope to concentrate on promoting both Sabah and Sarawak, as the two states are big and it’s unfair to treat them as mere states in Malaysia,” he noted.

Nazri would also bring to cabinet’s attention the request for more direct international flights to the two states.

“I understand that for Sabah, 96 percent of people come via air so it is important to have more direct links to the state,” he noted.

Moreover, Nazri also consulted the different players in Sabah’s tourism industry such as hoteliers, tour operators and officials from the state tourism board. He also urged them to improve their products and services, like offering a wider range of tourism packages such as home-stay programmes.

“I believe Sabah is on the right track in developing its tourism potential”, but there is still room for improvement, he added.