From OSK Investment Bank Bhd (equity capital markets) director, Gan Kim Khoon; there were over RM354bil in fixed deposits and savings of individuals in the country waiting for REIT companies to tap. REITS companies looking at various opportunities for Property In Malaysia.

On REITs-Investors Outreach Programme, they telling about hope to channel some of these funds into REITs, which are high yielding and low risk in nature. The REIT companies from Kuala Lumpur that took part in the event included Axis REIT Managers Bhd, AmFirst ARA REIT Managers and AmanahRaya-JMF Asset Management.

Outside Kuala Lumpur, REITs have little exposure from large companies, and participation by individual investors is also small. There were not many players and the challenge was how to attract more REIT players and property investors into the Property Investment Market.

Property Investment in REITs presently offered the best yield, ranging from 8.5% to 12% yearly, based on current earnings. In such a challenging climate, there are not that many stocks that can give you such yields. It is better than putting funds in fixed deposits.

As example, reported by Axis REIT Managers chief executive officer Stewart Labrooy;  the company regularly implemented asset-enhancement exercises to increase the value of its assets.

Axis REIT injected about RM3.5mil to upgrade one of our office buildings in last year, Wisma Kemajuan, in Petaling Jaya. The valuation for the property increased to RM52mil, compared with the original valuation of RM29mil in 2005.  The upgrading, was increase the value of the property.

Axis REIT  spent another RM8mil on two of its commercial properties which were originally valued at RM106mil. After upgrading, the valuation increased to over RM140mil.  Through such asset-enhancement exercises, Axis REIT create more value-added space, which in turn attracts more tenants, and increases our income from rentals.

There are Property Investment Opportunities in REIT company. More and more developer prefer affordable homes making for home buyer during recession. Developers in Penang are targeting home buyers on a lower budget. New property investor can start a buying investment property with this lower budget property.

Due to the overwhelming success of the program, SP Setia Home Loan package have extended it for another three months. As per SP Setia management, SP Setia Home Loan package will not extend the package when it ends. The program started Jan 19 and ends July 19.

The home loan package allows a buyer to pay only an initial 5% of the house price. All legal fees and stamp duties on the sales and purchase agreement are borne by the company (property developer). SP Setia would not extend the package when it ended on July 19.

SP Setia will stop launching new products for a couple of months to focus on building more quality homes. The 5/95 program was initiated by SP Setia but had now been adopted by other property developers into property investment market.

SP Setia would continue to brand, build and execute marketing strategies that were cost efficient and proven effective to moving forward for company development. Currently, its total undeveloped land bank stood at 1,600ha.  On its performance, SP Setia had managed to ramp up sales despite the tough market conditions. Such as Setia Sky Residences project.

The sales figures of SP Setia projects are good but the net profit this year should be lower than last year, impacted by (high) raw material costs, great promotion given to the homebuyer.

Not only property investment in Malaysia showing a good number. On the SP Setia projects in Vietnam hit sales about RM50mil. Nowadays, SP Setia was still at the getting-to-know stage in China. It’s still beginning state for SP Setia in China property market.

Again proven that property investment sector still has upside. Real estate investors should look at the positive side and believe at your beginning mindset, buying investment property is a long term investment.

Parade of Homes is launch by a single property developer – Sime Darby Property. Parade of Homes is an event that brings together a showcase of homes from 9 noteworthy townships. Sime Darby Property have lined up various activities, contests and talks from guest speakers, ranging from investment tips to interior design to make it an even more fun occasion.

Maybank had contribute for Parade of Homes project. Maybank is the mortgage loan owner for Parade of Homes projects. Now, Maybank offer home buyer mortgage loan package and visit your to Dataran Maybank to get all the information you need about Maybank home financing and also enjoy the offers for buyers at the Property Showcase:

• Interest rates up to BLR-2.30%
• Margin of Finance up to 90%
• Enjoy cost savings!
• Free stamp duty
• Free Sale & purchase Agreement legal fees
• No interest during construction
• Fast approval
• Early bird rebate from Sime Darby Property up to RM5000
• Stand a chance to win prizes worth more than RM600,000 (purchased the Parade of homes unit within 20th June to 29th June)

(Term & condition apply, visit the counter for more information)

Let’s turn your dream home into reality at any of these excellent locations:
Ara Damansara, Bandar Bukit Raja, Bukit Jelutong, Denai Alam, Melawati, Nilai Impian, Planters Haven, Putra Heights, Subang Jaya and USJ Heights.

Dont forget to mark your calendar and meet up there! Enjoy exclusive Parade of Homes packages and latest home launches while you’re at the various township venues. Combination of good package bank mortgage loan from Maybank (MaxiHome) and “Parade of Homes” by Sime Darby property is an option for you to start buying investment property.

Date: Monday 4 May – Friday 8 May, 2009
Venue: Main Lobby Tower A & B,
Dataran Maybank,
No. 1 Jalan Maarof,
59000 Kuala Lumpur
Time: 9.00am – 6.00pm

Contactable
Call the Customer Care hotline at 1-300-88 6688, any time, any day.
You can visit Maybank branches for mortgage loan package or Sime Darby Convention Centre.

New projest – Setia Sky Residences condominium in Kuala Lumpur that will be launched next month,April y2009. Setia Sky Residences is located along Jalan Tun Razak on a 2.43ha site and will comprise four 39-storey tower blocks, with each block containing 211 condos.

In April, only first two towers will be launched. Setia Sky Residences condominium lauch at an average selling price of RM680 per sq ft. Both towers are expected to be completed in 2012.

Setia Sky Residences condominium Setia is the first high-rise project in the Kuala Lumpur city centre by SP Setia. Setia Sky Residences condominium has a gross development value of RM800mil, Setia Sky Residences condominium estimate has positive response.

Actually, SP Setia Bhd posted a net profit of RM31.2mil for first quarter ended Jan 31, down RM17mil from a year earlier due to slow property sales.The property group also posted lower revenue at RM259.9mil, against RM303.7mil in the previous corresponding period.

The ongoing global financial turmoil and its adverse effects on the domestic economy, it is evident that 2009 will be an extremely challenging y2009.While the group is still relatively well placed due to its strong financial postion with RM572mil cash and a net gearing of only 0.19 as at Jan 31.SP Setia would focus on cash conservation and cash generation to ride out the economic slowdown.

SP Setia Bhd planned to undertake a development in Singapore in the future via a joint venture with a reputable Singapore-based company. SP Setia Singapore office is SP Setia’s second abroad after the one in Ho Chin Minh City, Vietnam. SP Setia also plans to open offices in Beijing and Dubai.

SP Setia Singapore office aimed at enhancing the company’s service to Singaporean home buyers while attracting new ones. SP Setia had attracted 800 buyers from Singapore who had bought RM300mil worth of properties from the group, mainly for its projects in Johor Baru.

SP Setia had to date recorded about RM500mil sales for its 5/95 home loan package launched in January. SP Setia confident that it will attract not only well-heeled Malaysians but also wealthy foreigners who want to call Kuala Lumpur their home. Malaysia had launched as progremme “MM2H” (Malaysia My Second Home).

Sime Darby Property’s first Parade of Homes campaign was launched in June 2008 and generated sales of RM246mil in nine days. The second campaign in November 2008 generated over RM146mil in sales.
Sime Darby’s freehold properties range from affordable homes to high-end residences in townships in Subang Jaya, Bukit Jelutong, USJ Heights, Bandar Bukit Raja, Ara Damansara, Denai Alam, Melawati, Nilai Impian, Planters’ Haven and Putra Heights.

The main factors contributing to the strong property sales were the Parade of Homes’ exclusive benefits, which included an interest rate of base lending rate minus 2.3%, special down payment scheme, and no interest charged during the construction period. Sime Darby Property’s offered an attractive package for home buyers during Parade of Homes campaign.

In addition to the very attractive financial packages offered, Sime Darby Property’s also very pleased to note that they customers are buying because of the good track record, quality products, reputation as a reliable developer, and most importantly the trust and confidence in the Sime Darby property brand name.

The Parade of Homes campaign is being held in conjunction with MAPEX 2009 and continues until June 15, covering both residential and commercial properties in Sime Darby’s 10 townships.Sime Darby Property is also organising a property showcase from April 3-12 at the Sime Darby Convention Centre.

The purpose of Sime Darby Property to offers an attractive financial plan for home buyers during Parade of Homes campaign is make easier for home buyers to owning a dream home. Incentives include a Special Down Payment scheme, with initial payments as low as RM3,000.00 and the differential sum payable in installments of up to 12 months, together with free stamp duty and legal fees.

Other than, there are Early Bird Rebates up to RM10,000, and home buyers have the added assurance of the Sime Darby Property Guaranteed Buy Back.

Below present two scenarios of monthly loan repayments with the free stamp duties, free legal fees and early bird rebates schedule applied whenever you purchase a Sime Darby Property home throughout the Parade of Homes campaign:

Scenario 1 :
You bought a house in Bandar Bukit Raja with a minimum payment paid on 6 March 2009 and signed the Sales & Purchase Agreement on 20 March 2009. Our panel end-financier HSBC offers a loan of 12 equal months installment.

Scenario 2 :
You bought a house at Denai Alam with a minimum payment paid on 6 April 2009 and signed the Sales & Purchase Agreement on 5 May 2009. The loan offers 10 equal months installment.

Some think the situation will recover in the third quarter, others say it will take a year. But many property developers are not dropping their prices. It is in the secondary property market that buyers may be forced to sell, preferring to convert their assets to cash. We will bound to have that as many units will be completing this year.

Those who bought earlier are also expected to convert their assets to cash. Property agents and valuers have mixed views how much prices have dropped but the range is between 5% and 20%, depending on the project.

Normal profit in property project generally is 5% to 30%. Property Developers are now not making super profits.  Even if property developers drop property prices, it will settle at a fair level. Most of the property prices are close to construction price and land cost.

We will see a slow down in the property market in terms of sales volume. That is a result of people’s confidence. But the present scenario will not be as bad as the last 1997/98 Asian financial crisis.

“As the economic crisis deepens, questions about the state of some locations have risen. Eager buyers     snapped up about 40% of IJM Land Bhd’s newly launched Summer Place condominium units on the island over the weekend”.

The sales translated to about RM70mil of the RM174mil project off the Jelutong Expressway. The 22-storey Summer Place comprises 531 units with built-up areas measuring between 1,012 and 1,464 sq ft, priced from RM273,000 to RM460,000. The project was about 40% completed.

Construction work started in the third quarter last year and is scheduled for completion in 2011.The economies crisis cause the sales volume in property market was slow now.  IJM Land Bhd are providing free legal fees on the sale and purchase agreement, free legal fees on loan and zero interest till completion of construction.

The selling point is that it is near the harbour, the Penang Bridge, located along the new promenade off Jelutong Expressway, and is near to town area. Furthermore, the pricing from RM273,000 is very affordable.

No matter what the economic cycle is, there are always buyers out there. Property investors will buying investment property while the property market is dip in property prices. Property prices and rental yield increase when the property market is recover.

MIER expects the domestic economy to return to normalcy only in two to five years. Malaysia is not spared from the global financial crisis as well as property market meltdown. Since late last year, the domestic property market has started to show signs of weakening.

Kuala Lumpur City Centre’s (KLCC) high-end condominium is heading towards a 15%-20% price depreciation in two to three months. Property buyers are looking for more realistic pricing, reflecting the current conditions. In a worst-case scenario, he is projecting up to 30% drop in prices over that period.

Average price stands at RM1,500 per sq ft in KLCC presently. In other suburbs such as Bangsar, Damansara Heights and Cheras, predicts a 10%-15% decline. The rental of office space in KL should not be affected at least until the end of the year but expects prices to come down after that.

Downgrade the office to save money to overcome downturn market, reduce from RM8 to RM6 per sq ft. The KLCC landlord reduce by 10% to 15% (to prevent the tenant moving out). But at this time, the rental rates are maintained.

There will be additional 8 million sq ft of office floor in KL by 2011 or 2012. Currently, the rental rates at KLCC and the KL vicinity are between RM6 and RM8 per sq ft and between RM4 and RM6 per sq ft respectively.

Retail space is mostly occupied and rental rates have been maintained. However, the segment may witness a downtrend should the unemployment rate rise.

The commercial sector is least affected now, but in the long-term, affordable housing will be the least affected by the crisis, as people still need a house to stay in.

Property developers not to be unduly concerned about the external factors such as interest rates and global economy but instead concentrate on their branding. No matter what the economic cycle is, there are always buyers out there. Property developer- SP Setia Bhd’s launch a home loans package promotion recently getting a good result to sold property.

Economy of the United State is the backbone of world economic stability.As such, consumer confidence of the property market will only be restored once the US stabilises. The US is in recession but once it stabilises, property market will rebound directly.

Meanwhile, Real Estate and Housing Developers’ Association Malaysia concurs that the current world economic crisis will certainly affect the property market. Expects the property sector to trend downwards by 5% to 10% in y2009. There will be definitely a drop in terms of demand and prices, but the situation is still under control. From International Real Estate Federation Asia Pacific, the prospects of the property market is not so bright but compared to other countries, it is holding steady in terms of pricing.

Frankly, it’s a good time to buy a property when property market in downturn. Property is always a good investment. Buying investment property might bring capital growth and rental return. Hope that the next stimulus package will bring some goodies to this sector to spur sales and generate economic growth.

According to Penang-based Raine & Horne International Zaki + Partners’ Michael Geh, property prices on the secondary market are down. Rising unemployment due mainly to the closure or downsizing of manufacturing operations hit by the global credit meltdown are expected to drive property prices down by 10% or so this year.

Even thought Bank Malaysia to cut loan repayments and banks continue slash interest rate recently, the demand for property in Penang are still in decreasing trend. The property prices dip is likely to occur in addresses with speculative elements and he identifies these as Bayan Lepas, Bukit Gambier and Sungai Dua (southwest district),Gurney Drive and Batu Feringghi (north east district).

Presenting The Edge/Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 4Q2008, Geh notes that buying interest rate practically dried up during the period under review while construction of existing projects slowed down. The number of completed apartments has also dipped.
As expected, Penang commercial real estate is also feeling the pinch. Example property prices in Penang, Queensbay Mall’s ground floor units sized from 350 sq ft to 600 sq ft were sold for between RM2,450 psf and RM2,700 psf in 2007. Last year, however, a unit changed hands for just RM2,200 psf.

Sampling for the Penang Housing Property Monitor reveals that property prices in most areas surveyed stayed unchanged from the previous quarter, due to very few or no transactions.

On a more positive note is points to a 4.2% rise to 3.46 million in tourist arrivals last year from 2007. Greater tourism activity, will spur the demand for tourism-related property projects. If the tourist enjoy their trip, environment, local food and others attractive points, their might think about MM2H (Malaysia My Second Home) or look for buying investment property in Malaysia. Property prices in Malaysia consider reasonable for foreign property investors.

Property market to rebound in 2 years, but the property prices in Penang was dip ~10%. If you are property investor, it’s right time for you to look for property with lowered property prices and strategies location, plus better mortgage loans rate offer right now. Buying investment property with low prices and selling property in high property prices when market rebound.

Executive chairman Datuk Abdul Rahim Rahman said people were getting more prudent with their spending, adopting a wait-and-see attitude that has resulted in the property market getting softer.

The price of luxury condominiums in Kuala Lumpur City Centre (KLCC) for example are down 15% to 20 %”. Apart from that, the ongoing buildings development activities outside the central business district may push down the rental rate for offices when they are ready by 2010 – 2011 as a result of oversupply of office space. Malaysia property market getting influence during the current economic uncertainty.
Property consultanty firm Rahim & Co Chartered Surveyors expected the Malaysian economy to recover in 12 to 16 months but the Malaysia property market would take another two years to rebound after the economy recovered. This all will depend on the Government’s strategy and initiatives to strengthen the economy. It’s not as bad as in year 1997 when the property market needed 4-5 years to recover. Property consultanty firm Rahim & Co Chartered Surveyors believe that property market would be stable again within two years after economic recovery.

Savills Rahim & Co Real Estate Agents’ managing director Robert Ang said buyers were now asking for a yield guarantee from property developers before buying a property. Last year, the yields were 4% to 5%. As the market weakens, home buyers want guarantee from property developers to give them higher yields at 6% to 7%”.

Due to weak demand in property market right now, some of the company’s clients were advised to defer their new launches, especially the higher-end projects, to the third quarter.

Nevertheless, the property sector remains relatively well supported at the moment. Banks are still providing mortgage loans to home buyers and property developers. Apart from that, home sellers are getting more flexible on pricing their properties.

However, the demand is not as strong as before. Rahim & Co will be organising a seminar called “Looking Beyond: Challenges & Opportunities In The Malaysian Property Market” on March 3 at Hotel Istana Kuala Lumpur. The seminar will feature talks on the property market situation in the country by local and international speakers. If you are from property investment sector, you should attend the seminar and acknowledge about current property market and property market expectation in next few year.

Construction cost is now at a moderate rate and with careful selection of property investment, MGPA still can make benefit. MGPA will invest RM2bil (including acquisition and construction costs) in The Intermark.

The amount involves the complete refurbishment of 62-storey landmark grade A office building Vista Tower (formerly known as Empire Tower), a new international grade A office building Integra Tower, retail centre Intermark Mall (formerly known as City Square) and Malaysia’s first Doubletree by Hilton Hotel.

MGPA – through it’s Asia Fund 2 – acquired the Empire Tower, City Square, the Crown Princess Hotel and Plaza Ampang in 2007 for about RM760mil.
The reason MGPA  to refurbish and build the grade A office buildings was because such buildings were limited in the city.Besides that, the location of the development – at the junction of Jalan Tun Razak and Jalan Ampang – is very strategic, just 500 metres from the Petronas Twin Towers and also about a two-minute walk to the Ampang Park LRT..

MGPA company is comfortable with the investment in Malaysia and will be here for a long time. Chief executive officer of MGPA Asia Developments;Michael Wilkinson is looking for more investment opportunities in Malaysia and will announce that when the time comes.

Malaysia was fortunate to be still resilient in the current climate and, with a strong market, the country was still attractive to real estate investors.

The refurbishment of Vista Tower is expected to be completed by end of this year and Integra Tower by end-2012 while Intermark Mall and the Doubletree hotel by Hilton Hotel  are scheduled to have their soft openings by the first quarter of 2010.

MGPA is the company’s first investment in Malaysian real estate market, this investment might build confident for real estate investors. MGPA is confident that the office space in Vista Tower will be fully taken up once it is completed by end of this year.