KUALA LUMPUR: Mass Rapid Transit Corp Sdn Bhd (MRT Corp) says the MRT second line has been approved by the federal government.
Its chief excutive officer, Datuk Wira Azhar Abdul Hamid, said the company was now waiting for the official announcement to enable it to begin work on the MRT Line 2, which would probably link Sungai Buloh with Putrajaya.
“The second line has been discussed by the government. So now the government is considering when the project can start,” he told reporters after a visit by Deputy Finance Minister Datuk Ahmad Maslan to the Kajang MRT construction site near here yesterday.
“This is a good sign, because now we have continuity in the provision of transportation services to the public and its contribution to the economy,” he said.
Azhar said construction of the underground section of the MRT Line 1, scheduled for completion in July 2017, was now 50% completed.
“Basic construction work for the overall project is expected to be ready in the middle of 2015, and will be followed by upgrading works on the operations system,” he explained.
He also expressed satisfaction with the project’s progress, saying putting safety measures in place would continue to be a priority, especially when they affected the public and workers.
The market is anticipating Cabinet approval and appointment of the so-called project delivery partner for the MRT Line 2 to be made by end of the first quarter.
CIMB Research in a recent note said the tender process suggested that the winners of the MRT Line 1 packages were likely to be emerged as the frontrunners for the MRT Line 2. – Bernama
Mixed Mixed Mixed outlook from Maybank property conference
Maybank hosted a property conference last week (10 Feb 2014) and invited experts from different fields of the domestic property sector to give their views. The conference was well-attended by over 120 investors.
The speakers included: 1) Mr Christopher Boyd (executive chairman), Mr Allan Soo (managing director [MD]) and Mr Nabeel Hussain (associate director) from CBRE Malaysia, 2) Mr Shaun Di Gregorio (CEO) from iProperty Group, 3) Ms Tracy Pan (head of mortgages) from Maybank’s consumer finance, 4) Mr Elvin Fernandaz (MD) from Khong & Jaafar S/B and 5) Tan Sri Eddy Chen (MD) from MKH Bhd.
The speakers, comprising a banker, developer, researcher, surveyor and property consultants, gave a comprehensive update on the property sector from different angles. The key takeaways are as follows.
Declining interest in Iskandar Malaysia
According to iProperty’s consumer sentiment survey, there is a slight dip in Singaporean buying interest in Iskandar Malaysia properties post-Budget 2014. We are not surprised by this as the new property cooling measures (higher RPGT and floor price for foreign ownership imposed by the federal government, and higher levy by the Johor state government) are to control excessive property speculative activities.
We remain cautious on the increasingly crowded developments at Iskandar Malaysia, especially in the mixed use and high-rise residential project spaces. Without synchronised planning and control by the authorities, the Iskandar property market could be deluged by massive supply of high-rise mixed development projects, inducing price volatility.
Consumer sentiment remains weak; affordable housing still in trend
Survey on consumer sentiment by iProperty shows that overall sentiment has been generally weak post-Budget 2014 and this is likely to lead to a slowdown in demand over the next six months as many potential buyers are still adopting a wait-and-see approach. Similar to the findings of our survey in July 2013, location and pricing remain as key considerations and most respondents of iProperty’s survey are looking for properties priced below MYR500,000/unit. This reinforces our view that affordable housing (especially landed properties) would continue to see strong demand.
Banks remain supportive; new financing packages introduced
Banks are still very supportive of the mortgage market with various new financing packages being introduced e.g. bridging loan for individuals and renovation financing. Most of the mortgages are still based on ‘true value’ (i.e. SPA price) and not ‘net pricing’ (net of discounts/rebates/incentives) of the properties and this will encourage developers to continue to offer attractive marketing incentives to property buyers.
Rising pressure on margins
The seemingly lack of clarity over the implementation of the new property cooling measures under Budget 2014 (transparent selling price and higher floor price for foreigner buyers) continue to create uncertainty in the property space. Also, the industry is facing serious labour shortage and stubbornly high land costs on top of the stricter property measures and increasing competition from the foreign developers.
Source: Maybank Kim Eng Research
KUALA LUMPUR (Feb 17): Property investment consultant Datuk Seri Gavin Tee expects to see more interest from foreigners in Malaysia’s property sector, despite the Budget 2014 cooling measures.
In spite of the hike in real property gains tax (RPGT) and the higher minimum purchase price for foreigners, more foreign interest is expected, especially in the Greater Kuala Lumpur, Penang and Iskandar regions, he told an investment seminar.
“China, Macau, Hong Kong and Taiwan have even tougher tightening measures compared to Malaysia’s cooling measures which are relatively mild,” Tee said during the forecast talk yesterday.
He added property prices in some growth areas “have the potential to hit record highs”. “So, there are still lots of buying opportunities out there provided you know where to look,” said Tee.
He also said that there will be more choices for those purchasing property for
their own use, as prices are expected to correct slightly in residential and commercial areas.
Besides that, he expects the property market to be lifted up towards the end
of March, driven by investors and developers re-entering the market.
He said that large-scale projects by the government will be driving Malaysia’s growth in the next couple of years, adding that he is most optimistic of developments in Greater Kuala Lumpur and Melaka.
(The Edge Malaysia)
Gamuda Bhd (Gamuda) remains confident of clinching the project delivery partner (PDP) role for the KVMRT 2 project despite speculation that the Gemas-Johor Baru double track rail construction award has been further delayed to 2015 from late-2014.
Maybank Investment Bank Bhd (Maybank Research) noted that smooth progress of the KVMRT 1 construction and strong property sales would continue to underpin Gamuda’s earnings growth. The risk of the invocation of S114 could induce short-term negative sentiment on the stock although the impact on the water asset sales is not certain yet.
“We take the view that the issue will be resolved amicably,” it stated.
The government’s final go-ahead for the KVMRT 2 and appointment of its PDP is expected to be announced in the first quarter 2014 (1Q14). Gamuda-MMC is confident of clinching the PDP role, riding on their track record in managing the KVMRT 1 construction.
Post formal approval, land acquisitions, public feedbacks, tendering and job awards could take another year plus before the physical construction starts in 2016.
“Gamuda’s construction division would focus on the KVMRT project only in 2014 as the government’s award of the Gemas-Johor Baru double track rail works looks likely to be postponed to 2015. Meanwhile, the government is in the midst of finalising the Langat 2 water treatment plant project award, but Gamuda thinks it is not the frontrunner for the works,” the research house highlighted.
Maybank Research also explained that the company’s property sales remain robust driven by Horizon Hills at Iskandar Malaysia as foreigners buy ahead of the proposed implementation of the RM1m floor price on May 1, 2014.
Gamuda has achieved RM575 million property sales for its Malaysian projects in 1QFY7/14. It could potentially beat its FY14 property sales target of RM1.9 billion. Elsewhere, Gamuda is targeting to finalise three land bank acquisitions in 2014 in the Klang Valley, Iskandar Malaysia and Kota Kinabalu (KK). It has budgeted RM1.5 billion for the acquisitions.
The KK and Iskandar project would be undertaken via joint ventures (JVs) and hence they would be less in capital start-ups for Gamuda. These potential land banks could lift Gamuda’s total domestic property GDV by RM8 billion to RM21.7 billion.
Gamuda has also bidded for Kwasa’s Rubber Research Institute land development; it is shortlisted as a Tier 1 developer. These would fortify its property division long term earnings visibility and growth.
The acquisition of an additional 40 per cent stake in the Kesas Highway concession is expected to be completed by end-Mar 2014. This could positively provide a 2.4 per cent or 6.8 per cent lift to the financial year 2014 (FY14) to FY15 earnings forecasts for Gamuda.
As for the potential takeover of KTM Bhd by Gamuda-MMC that was reported in the news recently, Gamuda did consider it in early-2013 but the idea was dropped due to feasibility issues.
Meanwhile, plans to monetise its infrastructure assets via a separate listing or a business trust could be postponed as management thinks that the current market condition is less conducive.
Mass Rapid Transit Corp Sdn Bhd (MRT Corp)is looking at a daily passenger load of about 400,000 for the 51-kilometre Line 1 of the rail transport system from Sungai Buloh to Kajang.
Its acting chief executive officer, Haris Fadzilah Hassan, said the company has purchased 58 sets of trains from Siemens AG, with the first expected to be delivered in September this year for a trial run.
The trains cost RM 1.37 billion, which was part of the RM23 billion cost of the whole MRT Line 1 project, he said.
“Each train unit is capable of transporting about 300 passengers. Each trip will have four sets of trains with the total capacity of 1,200 passengers and at 3.5-minute intervals, operating from 6am to midnight,” he told reporters after a
walkabout session in Jalan Bukit Bintang, Kuala Lumpur today.
Haris said the company hoped that the project, when completed in July 2017, would help ease traffic congestion in the city centre.
“MRT Corp will also be working with other public transportation providers and relevant stakeholders to integrate the systems, to solve problems from the first to the last mile,” he said.
On the underground work at Bukit Bintang, he said, it was part of the 9.5-km stretch of underground work from Jalan Semantan to Maluri costing RM8.28 billion.
“There will be seven stations underground and Bukit Bintang is one of them,” he said.
Meanwhile, on the traffic management plan, MRT Corp’s Director of Strategic Communications and Public Relations, Amir Mahmood Razak, who led the walkabout, said various measures were implemented to ensure smooth traffic flow.
He said a stretch of 150 metres from the junction of Jalan Sultan Ismail involving two lanes had been realigned towards the right side of the road facing the row of shop lots between McDonald’s and KFC Restaurant.
“It is now reverted to its original alignment after being diverted to the left side of the road since Oct 16, 2012,” Amir said.
Amir said any added traffic congestion could also be due to other reasons as multiple projects were on-going in the area and motorists were also constantly parking illegally.– Bernama
PETALING JAYA: The ongoing construction for the Sungai Buloh-Kajang Line within the Klang Valley Mass Rapid Transit (MRT) network marked an important milestone today after the first of nine Tunnel Boring Machines (TBM) made the MRT project’s first breakthrough at the underground KL Sentral Station worksite.
The machine involved is an Earth Pressure Balance TBM named Semantan 1, which was launched earlier at the Semantan North Portal on June 13.
The breakthrough follows an excavation of about 1.4km, boring a 6m diameter tunnel for trains that will head north towards Sungai Buloh.
The machine will now undergo maintenance works at the KL Sentral Station worksite before being relaunched for tunnelling through to the Pasar Seni worksite next year.
A total of nine TBMs will be used to bore the tunnel for the 9.5km underground alignment of the Sungai Buloh-Kajang MRT Line with seven underground stations.
They consist of four Earth Pressure Balance TBMs, which will be used for the Kenny Hills geological formation and five Variable Density TBMs for the Kuala Lumpur Limestone geological formation. The underground works contractor is MMC Gamuda KVMRT (T) Sdn Bhd.
Currently, seven TBMs are operational for the MRT Project at various stages of tunnelling. They are monitored by personnel who are stationed directly above where the TBMs excavate.
The first TBM was launched by Prime Minister Datuk Seri Najib Tun Razak at the Cochrane Launch Shaft on May 30, indicating the start of excavation works.
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Before they decide to buy a property – whether it is a house, condominium, apartment or shop – Malaysians tend to consider many factors that may be considered to be ‘non-scientific’ or even ‘superstitious’.
Within the Malaysian property context, factors like the property’s feng shui – its location at a ‘T’ junction, its location below the road level, and the unit number (address) of the property – are important enough for property buyers not to ignore.
These “non-scientific” factors are very real and you ignore them at your own peril when you want to sell the property later. You either will not be able to sell it or you will be forced to sell the property at a much-reduced price.
Let us go on a journey to find out how social taboos affect property prices particularly in Malaysia.
The Chinese Taboo on Number 4: To many Chinese, the number ‘4’ is tabooed. It sounds like death in Mandarin and in many other Chinese dialects. Be careful to avoid buying a property with the number 4 as part of its address, especially when the property is located in an area where a majority of the residents are Chinese. When the time comes for you to sell your property, you may encounter difficulties finding a buyer or if a buyer is found, he may want to discount the price on account of the tabooed No. 4.
The International Taboo on No. 13: If you were to enter some office buildings in Kuala Lumpur, you will likely find ‘Level 13’ or the ‘13thFloor’ missing in the lift buttons and on the Tenants Directory.
In place of ‘13’, you will often find ‘12A’. It looks like the number ‘13’ is tabooed in some places. As with No. 4, avoid buying a property with number 13 as part of its address. The taboo against number ‘13’ is not as strong as the taboo against No. 4.
All the same, when it comes to the time to sell your property, you may encounter difficulties finding a buyer or if a buyer is found, he may want to discount the price because of the tabooed number 13.
Property facing a “T” junction: All the three major communities in Malaysia – the Malays, Chinese and Indians – have a dislike for properties facing a ‘T’ junction.
They each have their own reasons for having an aversion to such properties. The Chinese believe that especially during the time of the hungry ghost festival when the gates of hell are open and spirits enter the earthly realm, houses facing ‘T’ junctions are at greater risk of being ‘invaded’ by these “hungry ghosts”.
Property below road level: All the three major communities in Malaysia – the Malays, Chinese and Indians – have a dislike for properties located below the road level. The Chinese believe that with your house located below road level, all the bad luck of residents in the entire neighbourhood that flow onto the road will eventually flow into your house. To the Chinese, this is unacceptable and they will at all costs avoid buying a property located below road level.
Property Sloping Downwards: The Chinese do not like to have a house built on land with a steep slope with the access road sloping down towards the frontage road. The Malay and Indian communities also dislike such houses.
While the Malay and Indian communities have their respective reasons for this aversion, the Chinese believe that the residents’ wealth, prosperity and luck will flow down the sloping road away to his neighbours below them.
Haunted Properties: When you are looking to buy a property, the above taboos are easy to identify because they have physical features that you can look out for. When it comes to making sure that the property is not haunted, it is much harder. How do you know if a house is haunted? You will have to extensively investigate the background and history of that property in question.
The seller will not tell you. The real estate agent will not tell you. What then should you do? My advice is: “If you are in doubt about whether that property is haunted, just give it a pass and move on to other similar properties”.
However, if you like that property very much and will not easily give it up, there are some steps to follow to get the information you want:
- Check how frequently the tenants move in and out of this property.
- Was the property vacant or unoccupied when the real estate agent introduced it to you?
- If it was vacant, find out how long the last tenant stayed before they moved out.
- Visit the property at night and observe from the outside if you can hear ‘funny noises’.
If, after all these investigations, you still have doubts, move on and give it a miss. However, if you are a fervent believer in the power of your God to help you get rid of the ”evil spirits” there, then by all means go ahead and negotiate for a ”give-away” price as you may be the only buyer the seller has.
Properties near high-tension towers: Properties that are built on land beside high-tension electric power lines are also shunned by all the communities in Malaysia including Malays, Chinese, Indians, Eurasians and the indigenous people of Sabah and Sarawak. They shun such properties for health reasons and not due to cultural taboos.
Studies by scientists have shown that high-tension electric power lines emit radioactive rays like gamma rays. It has also been shown by some scientists that prolonged exposure to radioactive rays like gamma rays, for example on those who live near high-tension electric power lines, can increase the risk of cancer.
When you buy a property from the secondary market, do be careful to make sure the property you are looking at is at least 500 meters from high-tension electric power lines in order to be absolutely sure that you are safe from exposure to gamma ray radiation.
If you are buying a property ‘off-plan’ from a developer, visit the development site and as best as you can, try to ascertain the location of the nearest high-tension electric power lines. If you are unable to find anything and you are still uneasy, engage the services of an electrical engineer to investigate. The electrical engineer knows how and from where to get the information. It is worth the professional fees you pay the electrical engineer.
If the electrical engineer reports that there is a possibility that high-tension electric power lines may be built near the property you intend to purchase – however remote that possibility may be – give it a miss and move on to other development projects. Your family’s health and safety should be above all other considerations.
Dr Ernest Y. Y. Cheong, 68 is a veteran chartered surveyor, registered valuer, auctioneer and arbitrator. He is the principal of Ernest Cheong PTL Chartered Surveyors and holds a Doctorate in Business Administration (DBA) as well as an MBA from Reading University, England. If you have any query about property and property related issues, e-mail Dr Cheong at firstname.lastname@example.org or visit www.ecptl.com. He also blogs at www.propertygandhi.blogspot.com.