property developer


No sign of property bubble, says CBRE-WTW managing director

KUALA LUMPUR: The so-called impending property bubble is unlikely to happen this year, as there are no signs to indicate such a trend at the moment, CBRE-WTW managing director Foo Gee Jen said.

Property bubbles usually arise with an increase in demand, driving developers to build more, and are said to “burst” as demand deteriorates, which will then lead to a sudden drop in prices.

“We will not have a ‘bubble situation’ as we strongly believe that the fundamentals are still there,” Foo told reporters at the 2018 Asia Pacific Real Estate Market Outlook briefing today.

“Overall in the market, we have not seen any panic selling happening in Malaysia. Oversupply issues are also prevalent only in certain sub-locations such as in Cyberjaya, where there are concerns on many empty units there,” he added.

In fact, Foo said, the landed property segment is still registering a positive take-up rate between 65% and 70%, suggesting that there is still demand for this category of houses.

Furthermore, property developers have become more cautious in launching their products, and that would definitely cushion the impact of oversupply in the market.

Moreover, Foo said, Bank Negara Malaysia has introduced enough measures to monitor the real estate sector, curb speculation and control price overheating amid the overhang in certain property segments.

The measures include Real Property Gains Tax, foreign ownership restrictions and the recently proposed freezing of development approvals of luxury condominiums, offices and shopping complexes.

“Bubble is always about whether market price is overheating. The cooling impact by Bank Negara has in fact cushioned that. Besides, for the last three years, pricing has moderated about 5%-8%, which we believe is in line with the salary increment of 5%-6% during the period,” he noted.

Overall, Foo said the property market is expected to remain flat in 2018, with low single-digit growth in terms of prices with higher pressure on high-end products, small office home offices (SOHO) as well as small office versatile offices (SOVO).
He said the outlook continues to be challenging, adding that uncertainties would still linger on this year.

“The challenging part is always how to fill up the units that have been in the market and going to be completed, as in the last five years there has been a lot of launches. And this is the time that perhaps the vacancy rate of some of the SOHO/SOVO and high end residential is going to be very challenging,” he added.

Nevertheless, Foo said from the last quarter of 2017, the volume of transactions of residential property segment has improved, attributed to the fact that developers have restrategised their products at more affordable price levels. This year, more strategic adjustments on products, pricing and sale strategies may be observed.

Meanwhile, Foo said, mismatch in location has dampened public reception towards affordable housing schemes.

“Ten years ago we had an oversupply of low-cost houses. Not because there is no demand, but because of mismatch of location. So this is the situation that we are facing.

“Therefore I urge PR1MA and the rest of the agencies to carry out proper feasibility studies before they launch their products,” he added, noting that some of the affordable houses are located in areas that are far away from infrastructure.

Asked whether other developers will follow Prosma Bhd’s plan to buy over some of PR1MA’s unsold units to be injected into its rent-to-own scheme, Foo said it is unlikely as such schemes would tie down their capital.

Analysts neutral on Ta Ann’s move to acquire stake in Sarawak Plantation

KUCHING: Ta Ann Holdings Bhd’s (Ta Ann) proposal to acquire a 30.4 per cent stake in Sarawak Plantation Bhd (Sarawak Plantation) garnered neutral views from analysts. In its report, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) explained that it is overall neutral on the proposed acquisition as their estimated incremental associate profit […]

Titijaya has ongoing, future projects of RM12.3b GDV

KUALA LUMPUR, Jan 13 — Titijaya Land Bhd, a leading Malaysian property developer, has currently ongoing and future projects of about RM2.3 billion and RM10 billion in gross development value (GDV) respectively. Deputy Group Managing Director,…

Stocks In Focus (11-1-2018)

KUALA LUMPUR (Jan 10): Based on corporate announcements and news flow today, companies in focus on Thursday (Jan 11) may include: AirAsia, LPI Capital, AYER,…

Sultan of Johor invests US$100m in Sri Lanka for pharma manufacturing

PETALING JAYA, Jan 10 — The Sultan of Johor, Sultan Ibrahim Iskandar has teamed up with property developer Datuk Patrick Lim Soo Kit to make investment of US$100 million (RM401.08 million) industrial zone for pharmaceutical manufacturers in Sri…

Analysts expect minimal impact on MREITs from potential OPR hike

KUCHING: Malaysian Real Estate Investment Trusts (MREITs) will not likely be affected by a potential overnight policy rate (OPR) hike, analysts project. The research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) in-house economist expected one OPR hike of 25 basis points (bps) in 2018 and also believed there is possibility of a second 25bps […]

LBS Bina sets higher sales of RM1.8 billion for 2018

PETALING JAYA: LBS Bina Group Bhd has raised the bar for its sales target for 2018 to RM1.8 billion despite failing to meet its RM1.5 billion target last year.

The property developer only managed to rake in RM1.4 billion in sales for 2017.

LBS managing director Tan Sri Lim Hock San told reporters at a media briefing held earlier today that the group will be focusing on affordable and medium cost housing, which also includes landed properties. It has a total of eight projects lined up this year with a total gross development value (GDV) of RM2.19 billion.

On top of its existing undeveloped land bank of 3,806 acres, LBS is also eyeing land designated for township development for future acquisitions.

On another note, LBS has also obtained the green light for its 60%-owned Zhuhai International Circuit, an integrated race track development project in China, after delays in approval. Work for the project is expected to begin in 2019.

At the noon break, its shares gained 5 sen or 2.1% to RM2.42 on some 636,900 shares done.

MB World to develop RM1.46b waterfront in Johor

KUALA LUMPUR (Jan 2): MB World Group Bhd (MBW) has secured the rights to develop an integrated waterfront in Johor that has an expected gross…

Yet another gloomy year for property market

KUALA LUMPUR: The local property market continued to face a tough time in 2017 with growing number of property oversupply, resulting from higher-than-affordable house prices flooding the market. Affordable housing remained the key issue hogging the market, whereby most first-time house buyers seemingly could not afford to buy residential properties priced above RM250,000. Bank Negara […]

Unchanged stamp duty rate for luxury properties positive for sector

KUCHING: The Ministry of Finance’s decision to leave the stamp duty rate unchanged for luxury properties has been viewed as ‘positive to the sector’. The MOF announced yesterday that the rate of stamp duty on property transders worth more than RM1 million will be maintained at the current three per cent. The research arm of […]