CapitaMalls buys Queensbay Mall

CapitaMalls Asia Ltd is buying Queensbay Mall in Penang for about RM658 million.

The acquisition will be made through CapitaMalls Asia's subsidiaries and an asset-backed securitisation structure.



CapitaMalls Asia will buy about 90.7 per cent of the mall's retail strata area and all its car park spaces, the company said in a statement yesterday.

Queensbay Mall is Penang's largest mall located at Bayan Lepas along the southeastern shorefront of Penang island and about 20 minutes' drive from Penang International Airport.

It is a family-lifestyle mall located at the heart of a 29.57ha prime waterfront integrated development which comprises a hotel, a wide range of residential homes and planned office towers.

It is easily accessible from the north of the island via the Jelutong Expressway and from the south via the Bayan Lepas Expressway.

This will be CapitaMalls Asia's second mall in Penang and fourth in Malaysia.

The other three malls - Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor - are owned through CapitaMalls Asia's stake in CapitaMalls Malaysia Trust.

"Gurney Plaza, which we already own through CapitaMalls Malaysia Trust, and Queensbay Mall are the two best malls in Penang.

"The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia's market leadership in the state.

"This acquisition signals our ongoing commitment to invest in Malaysia's retail sector for the long-term, following our listing of CapitaMalls Malaysia Trust in July this year," CapitaMalls Asia chief executive officer Lim Beng Chee said in the statement.

Australian property market holds 'tremendous opportunity' for investors

An expert has highlighted the 'tremendous opportunity' that exists for those looking to buy property in Australia. Writing in an article for The Australian, Terry Ryder, founder of hotspotting.com.au, claims that some analysts have been far too pessimistic in their outlook for the Australian real estate market. He argues that there will be many specific property hotspots around the country where investors can still stand to make good gains. "I see next year as a time of tremendous opportunity for developers and investors who have the sense to look past the inexpert generalisations and see the potential emerging in specific hotspots around Australia," he writes. For example, Mr Ryder says that markets in Adelaide and key regional centres of South Australia will receive impetus from infrastructure developments and resources projects next year. Similarly, "gargantuan" construction projects in Western Australia will pour wealth into the state capital Perth and regional centres such as Karratha, Port Hedland, Broome, Geraldton, Bunbury and Albany, he advises. It follows recent figures from the Real Estate Buyers Association of Australia which showed that foreign investors are becoming increasingly active in buying up real estate in the country.

Demand for green buildings on the rise

The Securities Commision premises is a good example of a green building.

WITH leading multinational corporations at the forefront to lease green office space, the demand for green buildings in Malaysia will continue to rise as environmental awareness grows and more companies embrace the practice of corporate social responsibility.

Another driver is the growing body of evidence demonstrating that green buildings make financial sense.

CB Richard Ellis (Malaysia) vice-president research, Nabeel Hussain says there is growing recognition that key participants in the countrys real estate sector have a responsibility to adopt sustainable building practices and related technologies in order to play a pro-active role in climate change mitigation.

Malaysia has introduced its own green rating system, the Green Building Index (GBI) in 2009. The Government is supporting the drive towards green buildings and technology and its Budget 2010 was the first one ever to give priority to the procurement of goods and services that are environmentally friendly, he adds.

Nabeel reveals that studies by CB Eichard Ellis on mature markets such as the United States and Australia have found that developing green buildings can help landlords achieve higher values, fetch higher rents and enjoy higher occupancy rates than comparable non-green buildings.

In an ongoing study of national office portfolio in the United States managed by CB Richard Ellis, the company concludes that sustainable buildings are expected to generate stronger investment returns than traditionally-managed properties.

The study found that owners of sustainably-managed buildings anticipate 4% higher return on investment than owners of traditionally-managed buildings, as well as 5% increase in building value.

Roughly 79% of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5% increase in building occupancy and 1% increase in rental income, Nabeel says.

This is the second phase of a multi-year study initiated in 2009 by CB Richard Ellis and the University of San Diegos Burnham-Moores Center for Real Estate.

The largest and longest-running study of its kind, the ongoing analysis benchmarks and measures green building benefits and economic results as a framework of investment criteria for retrofit activity.

According to the study, tenants in sustainably-managed buildings report increased productivity, satisfaction and health. Roughly 10% of tenant respondents have seen

increased productivity, 94% of tenant managers register higher employee satisfaction in green space and 83% of tenants believe their green space provides a healthier working environment.

The study defined a green building as those with Leadership in Energy and Environmental Design (LEED) certification at any level or those that bear the EPA Energy Star label. All Energy Star buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.

CB Richard Ellis was recently ranked 30 among Newsweeks greenest companies in America, and occupied top spot in the financial services sector. The US Environmental Protection Agency has named CB Richard Ellis an Energy Star Partner of the Year for the past three years, including recent recognition for Sustained Excellence.

Nabeel says the US Green Building Council has awarded CB Richard Ellis its Leadership Award for Organisational Excellence and the industry group, CoreNet, recognised CB Richard Ellis with a special commendation for Sustainable Leadership and Design Development.

In Asia, CB Richard Ellis recently won a Merit Award for Interior Projects in an Existing Building at Hong Kong Green Building Councils 2010 Green Building Awards, in relation to its office relocation in Hong Kong.

CB Richard Ellis new office premises in Hong Kong, Shanghai and Mumbai have been designed and constructed in accordance with LEED best practices.

No woes from 5/95 home loans foreseen

PETALING JAYA: As the timeframe for repayment of homes purchased under the 5/95 home loan scheme draws near, all eyes will be on the ability of buyers to repay their loans amid forecasts of a slowing economy next year.

A banking industry source estimated that 20% to 30% had started repayment and the bulk of repayment would come onstream next year. However, he said, most of these buyers were from the high-income segment and had traditionally been able to service multiple loans.

He said the scheme, currently for first and second homes, was for selected locations and was undertaken by a few top developers.

The scheme, he said, was extended during the recession two years ago and was likely to be stopped end of this month, as the contract between the banks and developers would be over and the property market picked up.


Datuk Michael Yam ... ‘We don’t foresee banks running into high levels of non-performing loans.’

The 5/95 home loan scheme allows buyers to make only a 5% downpayment and sign the sale and purchase agreement.

Loans were secured by selected banks and the service of the loan only commence when the property is ready to be handed over to the purchaser.

The first property developer to introduce and implement the innovative 5/95 scheme was SP Setia in January 2009 in a cautious property market outlook.

The special home loan package was a great success and boosted the company's second quarter revenue ended April 30.

Soon after, other established property developers such as Glomac Bhd, Mah Sing Group Bhd, Malton Bhd and Sunrise Bhd followed suit with their 5/95 home loan scheme, with minor variances and with varying degrees of success.

Since the 5/95 home loan scheme was implemented, the economic environment has changed. So how are the homebuyers of this scheme faring?

Real Estate and Housing Developers Association (Rehda) president Datuk Michael Yam said the special loan scheme was only adopted by selected and established property developers.

The scheme was introduced mainly to affluent homebuyers, so Rehda does not foresee any repayment problems from these homebuyers presently or in the future, Yam told StarBiz.

Moreover, he said, sales made from this special loan scheme would likely represent only about 5% of the total sales made by these developers from various property projects in 2009.

While growth in the developed world was expected to slow down next year, the local property market's outlook was bullish, said Yam.

Local banks are flushed with funds and we don't foresee banks running into high levels of non-performing loans or default rate by homebuyers next year, he added.

On the 70% loan financing cap for those wanting to buy a third residential property, Yam said it was mainly Bank Negara's way of saying we are monitoring the situation.

A banking industry source said the special loan package in 2009 was structured in collaboration with several foreign and local banks as well as selected property developers.

Interestingly, we find that homebuyers who had purchased several residential properties then under the 5/95 home loan scheme were less likely to be the ones who defaulted on their payments, he said, adding that overall the late payments, or default rate, by these homebuyers were currently insignificant.

OSK Research head Chris Eng said that going forward, the local property market was seen to remain bullish despite an expected global economic contraction.

Eng concurred with Yam that local banks did not have liquidity problems.

We expect the local property market to remain resilient at least for 2011, Eng said.

On the default rates of homebuyers of the 5/95 home loan scheme, he said: It's a bit too early to tell as some of these homebuyers are likely to have either just started making repayments on their home loans or are about to.

A spokesperson from SP Setia said that while the 5/95 home loan scheme introduced by the property developer was a great success, it was only for three months (from Jan 19 to April 19, 2009).

We made good sales (from the promotion of the special home loan package) which helped to boost our company's second-quarter revenue in 2009, she said.

On the default rates of homebuyers under the special package, she said that so far it (default rate) was insignificant for homebuyers that had bought SP Setia homes completed in 2009.

For homebuyers under the special scheme introduced in 2009, who are going to get the keys to their homes next year, we do not expect a high default rate on their home loan repayments, she said.

Asia to lead the world in office construction

Asia will lead the world in constructing new office space, according to a recently released report by CB Richard Ellis. As firms shift away from Europe and North America, Asia will be the only region in the world to develop “significant” new office space in 2010 and 2011 before slowing in 2012.

The Asia region – which includes Hong Kong, mainland China, and Singapore – will contribute two thirds of world office completions by 2012, far more than Western Europe, North America, and the Pacific, which includes Australia and Japan.

“Asian office development has by now fully resumed after slowing down briefly in the wake of the global economic downturn,” said the report. “Other regions, in contrast, are experiencing either slightly below normal completions, such as the Pacific, or relatively scant completions, such as Western Europe and North America.”

The report said that Asia will account for about 65 per cent of the 26.4 million sq m completed in leading global office markets between 2010 and 2012. Europe will account for roughly 23.6 per cent while North America will account for 7.9 per cent and the Pacific 3.6 per cent.

Singapore’s new regulatory body ramps up

The new statutory board launched to regulate Singapore’s real estate industry has already received 150 complaints National Development Minister, Mah Bow Tan, has revealed. However, he is not surprised by the number, according to ChannelNewsAsia.

“Since this is the first time we are regulating in a formal way, I would expect a lot of pent-up demand for such an avenue for them to vent their complaints … I would expect this to taper off over time.”

The Council for Estate Agencies (CEA), received an average of six complaints a day, including misleading information on advertisements and allegations of fraud and money lending, with nine complaints lodged by housing agents against their peers.

The most common complaints – accounting for about half of all complaints – were over unprofessional or poor service. Investigations can take between one and three months.

However, the CEA’s priority is to complete its register of estate agents and salespersons. As of Oct 22, the council had already received 32,800 names. Amongst those seeking registration, those with criminal records or undischarged bankrupts would be excluded and barred from working as real estate agents. However, many firms have said that they would challenge any rejections.

Dennis Wee Group director Chris Koh noted that some applicants had committed offences such as drink driving which were not reflective of the agents’ current work, while HSR chief executive Patrick Liew noted that such applicants “deserve a second chance in life”.

According to CEA, the appeals would be reviewed on a case-by-case basis.

Singapore and Shanghai top investment picks

Singapore and Shanghai have been ranked as the top real estate investment destinations in Asia, whilst Osaka and Manila were deemed the least appealing by an industry survey conducted by the global non-profit Urban Land Institute and PricewaterhouseCoopers.

Singapore’s strong economic growth and brisk activity in the financial and high-tech industries brought the city-state to the fore in first place, whilst Shanghai, Mumbai and Hong Kong were the next favourites.

Falling one place due to sharp increases in property prices, damping some investor interest, Shanghai dropped to second in this year’s survey. Hong Kong’s fourth place was unlikely to have been affected by the cooling measures introduced by the government after the survey was completed say survey executives. “Residential doesn’t drive the market,” Stephen Blank, senior fellow at the Urban Land Institute, told Reuters.

Although Asian governments are likely to introduce further cooling measures, the strength of their individual economies is likely to be the fundamental driver for investment decisions, especially in the commercial real estate sector.

Based on the survey that looked at 20 Asian cities, investors are least keen on investing in Bangkok, Auckland, Osaka and Manila due to factors, such as office space oversupply and stagnant commercial rents.

The survey is based on the responses of more than 280 property professionals, including investors, developers, property company executives and brokers.

New builds increasing in Australia

Investors looking to buy property in Australia will be encouraged by news that an increasing number of new builds are set to be built in the country. However, the forecast for the real estate sector remains gloomy, with higher interest rates having an adverse effect on the market, the Housing Industry Association (HIA) has claimed. Indeed, expectations of increased rates have really had a negative impact on the market "as a result, the likelihood of a sharp correction in new home building in 2011 is increasing," HIA senior economist Andrew Harvey said. The comments follow an announcement from the Australian Bureau of Statistics (ABS) which revealed that construction approvals increased 9.3 per cent in seasonally adjusted terms in October after falling for the previous six months. According to the ABS figures, approvals increased in New South Wales by 14 per cent, in Victoria by 4.6 per cent, in South Australia by 6.1 per cent and in Western Australia by 2.3 per cent. Meanwhile, on average prices across the country rose by 0.3 per cent in October with Canberra reporting the biggest increase of 1.8 per cent.

Bukit Bintang’s covered walk among stars

PETALING JAYA: The Government's proposal to revive plans for the Bukit Bintang area to be developed along the lines of Singapore's famous shopping haven Orchard Road to boost tourism and increase shopping expenditure, has received positive response from retail associations and real estate consultants.

Under the Economic Transformation Programme (ETP), a 6km-long covered walkway would be built in the Bukit Bintang area. The walkway is part of the RM204bil public-private investment master plan under the ETP's Greater Kuala Lumpur development.

For comparison, Orchard Road is a 2.2km one-way street flanked by distinctive shopping malls on both sides of the road.

Malaysian Retailer-Chains Association (MRCA) secretary general Valerie Choo said in principle, the Orchard Road concept would be good for Bukit Bintang.

MRCA is happy that more emphasis has been placed on reviving Bukit Bintang. Malaysia is now able to sell Bukit Bintang as a tourism product while tourists and locals will be able to walk seamlessly and comfortably from one mall to another, she told StarBiz in an e-mail.

However, she said more needed to be done such as shopping mall enhancement and refurbishment.

This is what Singapore Tourism Board did in 2009, pumping in S$40mil to rejuvenate Orchard Road together with other stakeholders i.e. shopping malls and building owners, she said.

Choo suggested planting more trees to create lush greenery and shade to complete a multi-sensory experience for tourists and locals alike.

But the most vital thing is how the traffic condition can be improved in that area, she said, adding that road closures were now carried out without stakeholders being informed beforehand.


H.C. Chan

Malaysian Association for Shopping and Highrise Complex Management (PPK) president H. C. Chan said Bukit Bintang had the pedigree and history in shopping since its first shopping mall Sungei Wang Plaza opened over three decades ago and this gave the area tremendous potential to be a world-class shopping destination.

Creation of a comprehensive pedestrian network would be a major step towards integrating all the mall and hotel facilities and linking them to public transportation, befitting and expected of a world-class shopping destination, he told StarBiz via e-mail.

Besides customer-friendly physical integration, he said there was a need for a long-term holistic approach of branding and marketing Bukit Bintang as a single shopping haven entity, similar to Orchard Road or Regent Street of London.

PPK urges all mall owners and managers in Bukit Bintang and interested stakeholders like the City Hall to adopt a common platform and work closely together for the common good of the country's tourism and their respective properties, he said.


Tan Hai Hsin

Henry Butcher Retail managing director Tan Hai Hsin said reviving the concept of Orchard Road in Bukit Bintang area was viable and long outstanding. It should have been done many years ago! he told StarBizin an e-mail reply.

However, Tan said many things still needed to be done to make Bukit Bintang area a world-class shopping district, including:

Covered connection

All major shopping centres should be linked via a series of tunnels and/or bridges that provide cover and protection from the rain and the sun. Berjaya Times Square is now disconnected from Sungei Wang Plaza. There is no covered bridge or tunnel joining both buildings. Also, Plaza Low Yat is disconnected from Sungei Wang Plaza/Bukit Bintang Plaza. Sungei Wang Plaza/Bukit Bintang Plaza is linked to Lot 10 via a bridge. Lot 10 is disjointed from Fahrenheit 88, which is not directly linked to Starhill Gallery or Pavilion.

Pedestrian mall

Jalan Bukit Bintang or Jalan Sultan Ismail should be turned into a pedestrian mall during the weekends. This was attempted many years ago but with great resistance from the hotel, office and retail operators in the area who complained their customers would not be able to access their premises when the road is closed.

Public facilities

Public facilities such as a tourist information centre, public toilets and street furniture are important components of a world-class shopping district. The tourist information booth in front of McDonald's is too small, unfriendly and stocks too few brochures. According to recent media reports, the public toilets (in front of McDonald's and Lot 10) are not well-maintained.

Promotion

A tourist brochure or shopping directory just for the Bukit Bintang shopping district is a must. In Singapore, there are a few publishers on Orchard Road's retail attractions and other facilities.

Board expects buoyant building sector as 10MP projects roll out

The Construction Industry Development Board (CIDB) expects the construction sector to be buoyant next year as projects under the 10th Malaysia Plan (10MP) start to roll out from January.

But the government will be cautious in awarding contracts to mitigate the risk of being exposed to a second wave of global economic crises, said CIDB chief executive officer Datuk Hamzah Hasan.

Hamzah said the European debt crises and the slow US economic recovery was worrying and many countries are taking steps to reduce their expenditure in order to improve their budget deficit.

"Malaysia is taking similar steps in view of the expected crises. The impact will be felt in 2011 as what was experienced in 2009," he said.

He, however, said the impact will not be as great as last year due to continuation of projects from the Ninth Malaysia Plan (9MP), new jobs under the 10MP and more public-private partnership (PPP) projects coming up.

Under the 10MP, an amount of RM230 billion has been allocated for development, whereby 60 per cent, or RM138 billion, is for infrastructure.

Hamzah is bullish the industry will replicate this year's expected growth of 3.7 per cent in 2011. To achieve the target, it would need RM80.3 billion new projects next year, up from RM77.4 billion in this year.

He said projects like Matrade Centre, Warisan Merdeka, mass rapid transit and the Malaysian Rubber Board's land development in Sungai Buloh, worth RM70 billion, will contribute to growth next year.

This year, the government has announced projects to the tune of RM72 billion such as the LRT extension, the New LCCT terminal, power plants and luxury housing projects in Iskandar Malaysia.

"These are high-impact projects which will improve the business environment and private investment," he said.

In 2009, when the global economy hit the height of recession, Malaysia's construction sector was able to grow by 5.8 per cent because of completed jobs worth RM309 billion within four years of the 9MP.

"We expect by 2015, the sector will contribute 5 per cent to the country's gross domestic product, from the current 3 per cent," he said.

MRT project poised to boost Aman Putri profile

PPC GLOMAC Sdn Bhd's newest development in the 6.76ha of Aman Putri prime freehold land in Sungai Buloh, Selangor is located within what renowned property researcher Ho Chin Soon has designated as "first-tier locations".

These are property hot spots that lie within a 15km radius from the centre of gravity in Petaling Jaya New Town and include Kuala Lumpur, Cheras, Puchong, Sungai Buloh, Shah Alam, Subang Jaya and Ampang.



"The first-tier locations will remain the focus and it's difficult to imagine a downside for (such) properties which, in general, have no bubble whatsoever," Ho, master mapmaker and principal of Ho Chin Soon Research Sdn Bhd, had said last year at an investment forum on real estate.

Aman Putri is going to be one of the main beneficiaries of the upcoming mass rapid transit (MRT) system.

With two main lines starting from and connecting to Sungai Buloh, Aman Putri will be wellconnected to the whole of Klang Valley.

But before that, it is already conveniently accessible via the New Klang Valley Expressway, LDP, and the Guthrie Corridor, all of which provide residents easy access to Kuala Lumpur city centre and Petaling Jaya.

It is also surrounded by mature and well-developed neighbouring estates like Valencia, Sierramas, Bandar Baru Sungai Buloh and Bukit Rahman Putra.

Nestled at the edge of tropical palms at the heart of Sungai Buloh, it is said that Aman Putri is "the only freehold landed property" still available in the vicinity.

With gorgeous gardens and the "longest linear parks" in Malaysia, Aman Putri's greens are designed by award-winning landscape architect, Malik Lip and Associates, while the houses are designed by another award-winner, NRY Architects.

Monetary Authority of Singapore: Property prices will continue to grow

Real estate in Singapore is generally though of as being overpriced – but the country’s central bank has said that prices are set to keep rising in 2011.

Low borrowing costs and excess global liquidity may continue to push prices higher in Singapore despite the government’s attempts to cool the market, the Monetary Authority of Singapore said in its latest Financial Stability Review. There is a risk that banks may ease lending standards and make more loans to compensate for decreasing interest margins, the Monetary Authority said. The central bank also said that buyers may take on excessive leverage with expectations of a longer period of lower interest rates.

Cooling measures implemented by the Singapore government in August included increasing down payments for second mortgages and imposing a stamp duty on property held for less than three years. So far the measures have had little effect.

According to figures from the Urban Redevelopment Authority, private residential property prices grew 5.3 per cent quarter-on-quarter in Q2 2010 in 2.9 per cent in the third quarter. Singapore’s government predicts growth of 15 per cent this year and 4 to 60 per cent in 2011.

“There is a possibility that transaction activity and prices could pick up again given the current global conditions of flush liquidity and low interest rates. The government will continue to be vigilant in monitoring developments in the property market, and if necessary, adopt additional measures to promote a sustainable property market,” the central bank said.

The government has also made more land available for development in an attempt to cool the market. 17 residential development sites with room for about 8,100 apartments are set to be sold in the first half of 2011 and another 13 sites with room for about 6,200 units are being considered for release.

“As the property market is sentiment sensitive, a pick-up in activity could lead to rapidly escalating prices. If economic recovery disappoints on the downside amidst continued uncertainties in the global economy and market confidence is dented, prices could fall. On the other hand, if the economic recovery continues apace, there could be widespread implications on buyers who overextended themselves when interest rates eventually rise,” the Monetary Authority of Singapore concluded in its report.

Hong Kong sales plunge as buyers adopt wait-and-see attitude

Property sales in Hong Kong dropped to their lowest levels in nearly a year in the last week of November due to cooling measures, the South China Morning Post has reported.

A Ricacorp survey on secondary market sales in major estates recorded only 173 property transactions between November 22 and 28, down 57 per cent from the 399 sales in the previous week and the lowest amount since February.

“The market temperature has dropped to freezing point,” David Chan Tai-wai, a director at real estate agency Ricacorp Properties, said.

Many property industry experts said they expected a wait-and-see attitude amongst buyers at least until the Lunar New Year, which will cause prices to fall between 5 and 10 per cent in the short term. But low interest rates and lack of new supply would probably buoy the market once buyers understood the measures, experts said.

“The government’s ‘spicy; measures – such as the special stamp duty to curb speculation – have not only driven speculators out of the market, but seriously dampened end-user sentiment as well,” Chan said.

No sales were recorded in six of the 50 housing estates that Ricacorp monitors in the week of November 22-28, and average selling prices fell 0.3 per cent from the week before. Sales also fell in the primary market with just 14 homes being bought last weekend as opposed to the 42 sold the weekend before, according to Samsung Securities.

The Hong Kong government announced on November 20 that it would apply an additional stamp duty of 5 to 15 per cent on residential units resold within two years. The Hong Kong Monetary Authority also lowere the maximum loan-to-valuation ratios on properties worth HK$8 million (US$1.03 million) or more.

Craig Shute, a senior managing director at property consultancy CB Richard Ellis, said that the low sales numbers were partly due to landlords waiting on the sidelines instead of rushing to sell at a large discount. “The low interest-rate environment ensures that the holding cost of a piece of property will be much lower than the special stamp duty, making landlords less willing to dispose of their assets at a deep discount and thereby making the market less liquid,” Shute said. Most potential buyers were also waiting on the sidelines in hope that new measures might cause prices to fall, Shute aded.

Nicholas Brooke, chairman of Professional Property Services Group, said he expected the market to remain cool until after the Lunar New Year when values would rise again with continued excess liquidity and low rates. “[It's] not a bad time to try to buy over the next few months in that there should be the opportunity to bargain and not be told that the price is non-negotiable,” Brooke said.

Johor developers face future challenges

JOHOR BARU: Demand for residential properties is still good in Johor but developers will face challenges in the coming years due to labour shortage and a hike in building material prices.


Simon Heng .... ‘The take-up rate for new houses in Johor is still good despite the increase in prices.’

Real Estate and Housing Developers Association (Rehda) Johor branch chairman Simon Heng said developers did not have much choice but to pass the additional cost to house buyers.

He said building materials costs had increased by 10% to 15% in the past two months, translating into higher selling prices for new houses, especially in Johor Baru.

The take-up rate for new houses in Johor is still good despite the increase in prices and hopefully the trend continues next year,'' Heng told StarBiz on Wednesday.

He said banks were still offering attractive home loans, including full-loan facility for first-time buyers with a monthly household income of less than RM3,000 as announced recently in Budget 2011.

He said developers should look at coming out with innovative packages, including gated-and-guarded precincts and high-speed broadband facilities, to attract buyers.

Heng said the construction industry was also facing labour shortage and had to depend on foreigners as locals were not interested to take up the job.

He said many Indonesians that had been working in the construction sector in Malaysia for more than five years had left home as the construction sector in the republic was booming.

He said despite having workers from Bangladesh, Pakistan and Vietnam, contractors still preferred Indonesians as they were more hardworking and easy to communicate with.

Oversupply fears set to slow Bangkok’s property market

Oversupply fears will slow the Thai property market for a couple of months before positive sentiment will resume next year, according to local developers.
Mayta Chanchamcharat, Director and Chief Business Officer of Pruksa Real Estate said concerns about a possible property bubble in Bangkok and the Bank of Thailand’s announcement capping condominium mortgages at 90 per cent of value from January 1 have quietened the market due to a retreat of speculators and investors.
He said: “Due to the market concerns of some areas being flooded by oversupply and the property bubble, the market now doesn’t seem to absorb the existing supply of residential units as fast as before”.
As reported in the Bangkok Post newspaper, the take-up rate of newly launched condominiums dropped to 45-50 per cent this year from 70-90 per cent in previous years.
However, Mayta believed that the central bank’s measure should not have a negative impact on the property market. The curb would also be beneficial for the industry as a whole as it will allow the market to adjust in terms of demand and supply.
On the other hand, Pruksa’s Executive Vice President Wirote Kappiyajanya was confident that improving economic factors would soon bring back positive sentiment. He said: “Many developers may be delaying their project launches for the moment to keep an eye on whether the situation will become as many have feared. But the impact will only linger for three to six months before giant developers resume their project expansion again.”
Visit Malaisirirat, Managing Director of Magnolia Quality Development Corporation, also saw positive signs in the market as he believed that demand in the mid-to-upper-end segment would continue to grow next year.
The company plans to launch five residential projects next year including two condominium developments in Bangkok and a hotel in Khao Yai.
It expects to generate THB900 million (US$29.96 million) in sales by the end of this year.

RM700m boost for Iskandar Malaysia

The government has agreed to allocate an additional RM700 million for rolling plans for Iskandar Malaysia over the next two years.

Johor Menteri Besar Datuk Abdul Ghani Othman said the amount is an addition to the RM339 million set aside to the southern Johor growth region during the recent tabling of Budget 2011.



"Yesterday, Prime Minister Datuk Najib Razak agreed to add funds for rolling plans with another RM700 million for Iskandar Malaysia programmes," Ghani said in his speech at the launch of the Kota Iskandar Tourism Programme and Sinar Jauhar gallery in Nusajaya yesterday.

He did not elaborate on the rolling plans. Sources said the funds may be for various infrastruture projects and new investments which have not been announced by the government.

Najib is co-chairman of the Iskandar Regional Development Authority.

On a related matter, Ghani said , Nusajaya is set attract more tourists with the new guided tours for the Sultan Ismail Building which houses the state assembly in Kota Iskandar.

"In 2009, the building attracted 8,000 tourists, and between January 2010 and now, the tourist arrivals have risen by 30 per cent.