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New developments to share

Valdez

Alfrescian
Loyal
Iskandar beckons, but investors beware

[SINGAPORE] Iskandar Malaysia may hold out promise to Singapore firms seeking a reprieve from high costs, or to property investors hunting down a lucrative residential project, but the process of making an investment there appears tricky.

Property consultants here say that they have had difficulties advising clients interested in staking investments in the southern-Johor development zone because of conflicting information coming from lawyers and business consultants there on how to go about doing this.

For example, some property consultants have come up against the apparent lack of land zoning and plot ratio controls in Iskandar, which could mean that residential projects marketed as having sea views may not deliver on that front.

Interest in Iskandar has been rising, and is expected to continue growing as the Singapore government encourages firms to relocate some of their operations overseas. Finance Minister Tharman Shanmugaratnam, in his Budget speech last week, had announced that help would be given to those who choose to relocate some operations offshore, including to the immediate region.

Tricia Teo, deputy managing director of property consultancy SLP International, said SLP set out to clarify the legalities underpinning the purchase of commercial and industrial properties in Iskandar before marketing Iskandar properties to interested investors here.

"But we realised that the Malaysian lawyers were telling us different things . . . and what the lawyers say and what the business consultants say also sometimes differed," she said.

For example, SLP tried to find out whether investors needed to set up a Malaysia-incorporated firm to buy commercial and industrial developments in Iskandar. One consultant told them there was no need for this, and that investors could make purchases in their own names.

But lawyers told them otherwise - that purchases need to be made under "Sendirian Berhad".

After checking with many more sources, Ms Teo said SLP found out that investors can, apparently, buy properties under their personal name, "no issue".

SLP also came up against problems regarding the loan tenure for freehold commercial and industrial properties.

Ms Teo said: "A banker, the head of the branch, told me you can only take a loan for up to eight years, which doesn't make any sense, because it is freehold property, and if our client is financially strong, loaning up to eight years makes no sense. Even for Singapore property, under the Singapore loan structure, you can get a 20-year loan for a 30-year leasehold property.

"So I asked him: 'Are you sure it is eight years?' He said, very firmly: 'Yes, it is eight years.' But we found out from other bankers that actually, this was not true."

These challenges are making it hard for consultants to provide advisory services to small and medium enterprises (SMEs) and other investors keen on Iskandar, and those who decide to go it alone need to be even more careful.

"SMEs may have to pay a tuition fee, a very high tuition fee," said Ms Teo. "I guess their business environment and structure is still not that transparent. We can't really advise SMEs accordingly . . . so at SLP, we try to get the right consultants in Malaysia to work with them."

She added that SLP would still give advice on say, location, the price and the product; on matters such as the setting up of a company and the legal framework, it engages help from the Malaysian side.

Colliers International managing director Dennis Yeo said of the process that investors and SMEs have to undergo to buy commercial and industrial properties in Iskandar: "Going through the nitty-gritty administrative stuff is tedious and it's not easy. It's not an open book there.

"The situation is this: It is tougher now at this point than is expected because if you're not a big user or investor and if you deal directly with Iskandar's main parent investment group, you don't have the bargaining power because you're not a big company."

But even large investors have had a somewhat rough ride; some developers are said to have tripped up while trying to develop projects in Iskandar.

One big Singapore developer is said to have encountered problems with regard to the bumiputra equity ratio, said a lawyer who declined to be named.

In Malaysia, businesses are required to be 30 per cent owned by bumiputras - mainly ethnic Malays - although steps have been taken to relax this rule.

The Singapore developer had thought that the requirement did not apply for its investment in Iskandar - this exemption has been one of the widely reported benefits of investing in the region - but found out later that the rule did apply.

The lawyer said, however, that the Iskandar authorities have been very helpful with the case, and have advised the developer to put in an appeal to them.

A director at a property consultancy who declined to be named said he had tried - unsuccessfully - to get confirmation that investors are exempted from the regulations on bumiputra employment within Medini, one of Iskandar's flagship developments. (Medini's promotion brochures were said to have touted this.)

The director said: "I was with a different company back then, and we were hired by a sovereign wealth fund to help with the master planning for a project in Medini. So we were writing them (the Iskandar authorities) notes, asking them to confirm that within Medini, there would be no employment quota, but they just refused to confirm it in writing.

"I was working on this for around three months and by the time I finished with that project, the issue was still not resolved, although it could have been done later, directly with the fund."

There is also the matter of plot ratio controls - or an apparent lack of such controls - which could have an impact on residential property investments, he added.

He said that applications to develop 25-storey buildings are being given the go-ahead, but so are applications for 40-storey ones in the same area.

"So how can you assure me that my neighbour is not going to build a block that would just tower over me?" he asked.

He realised that there was little land zoning while marketing an integrated residential development in what has been promoted as a low-density neighbourhood, but came to find out that there were plans for two 30-storey blocks comprising 600 apartments in the area.

"And I thought, isn't this supposed to be a landed zone? Then I checked and realised that there was actually no zoning. There was nothing in black and white which said the development was in a landed zone. I suddenly felt so cheated."
 

shctaw

Alfrescian (Inf)
Asset
Be careful. You may end up with a BUMI Land.

Just play what you know.

Hi Valdez,

I consulted two different lawyers on housing rules in Malaysia and they gave me conflicting views. I went to see my personal banker and he gave me a 3rd view. Wah lau!

Because of that, I forgo buying land and commercial properties as no one seem to be able to tell me the answer!!!
 

RedsYNWA

Alfrescian
Loyal
Hi Valdez,

I consulted two different lawyers on housing rules in Malaysia and they gave me conflicting views. I went to see my personal banker and he gave me a 3rd view. Wah lau!

Because of that, I forgo buying land and commercial properties as no one seem to be able to tell me the answer!!!

Thanks Investor5. After forgoing commercial, may I know what are some of the residential projects you are looking at?
 

potter

Alfrescian
Loyal
Be careful. You may end up with a BUMI Land.

Just play what you know.

Tat's true bro, no bao makan one, better not only think twice, but a few times.
Mentioned "just HOOT" 1 yr back..but now dun anyhow HOOT titter.gif
 

IskandarRocks

Alfrescian
Loyal
Hi Valdez,

I consulted two different lawyers on housing rules in Malaysia and they gave me conflicting views. I went to see my personal banker and he gave me a 3rd view. Wah lau!

Because of that, I forgo buying land and commercial properties as no one seem to be able to tell me the answer!!!

Hi Investor5, in the first sentence you mention you had conflicting views on 'housing rules in Malaysia'. To me, this sounds related to residential property. In your second sentence you mention you forgo 'land and commercial property' because of that.

Firstly, could you please clarify if you problem was generally with all properties, or residential, or commercial, or land?

Second, could you please elaborate on the nature/source of these conflicting views. I am in the learning process and I am sure there are many in the forum. I am sure we all can learn if you can share this experience in a bit more detail. And I am sure many of the educated ones would be able to offer you advise so that moving forward, you may just be able to grab an opportunity, rather than give up on them.
 
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shctaw

Alfrescian (Inf)
Asset
Buying commercial property may not be that hard.

Follow common sense.
Buy from big developer.
Reveal to them you are foreigner.

I doubt developer will sell to you if you cannot buy.
 

OracleMasia

Alfrescian
Loyal
Buying commercial property may not be that hard.

Follow common sense.
Buy from big developer.
Reveal to them you are foreigner.

I doubt developer will sell to you if you cannot buy.
I agree buying is not difficult. But it is difficult to buy viable commerical property i.e one that had rental demands. especially it is a new one. A number of factors to consider.

Btw, commerical property is not proctected by Housing act.
 

dare2

Alfrescian
Loyal
Hi Investor5, in the first sentence you mention you had conflicting views on 'housing rules in Malaysia'. To me, this sounds related to residential property. In your second sentence you mention you forgo 'land and commercial property' because of that.

Firstly, could you please clarify if you problem was generally with all properties, or residential, or commercial, or land?

Second, could you please elaborate on the nature/source of these conflicting views. I am in the learning process and I am sure there are many in the forum. I am sure we all can learn if you can share this experience in a bit more detail. And I am sure many of the educated ones would be able to offer you advise so that moving forward, you may just be able to grab an opportunity, rather than give up on them.

I also would like to understand details of the conflicting views on rules/policies, people tend to generalize and sometimes it is all due to misunderstanding and ignorance or based on hearsay.....i also do not understand what the reason some people are doing in these kind of forum or take interest in property market in JB when they are totally negative and do not intend to buy anything....or have any means to buy....its an open forum - true, but if I am not keen on properties here, why do I want to waste time TCSS......like nothing better to do.
 

Nusajaya

Alfrescian
Loyal
I also would like to understand details of the conflicting views on rules/policies, people tend to generalize and sometimes it is all due to misunderstanding and ignorance or based on hearsay.....i also do not understand what the reason some people are doing in these kind of forum or take interest in property market in JB when they are totally negative and do not intend to buy anything....or have any means to buy....its an open forum - true, but if I am not keen on properties here, why do I want to waste time TCSS......like nothing better to do.

I noticed investor5 had been making very general and negative comments everywhere. Not sure of his intention. He has proven to be evasive. Yes, it is an open forum in which everyone is entitle to their view/opinion.

Just want to warn the new ones who are here trying to get some information or learn from others, to have a discerning mind and watch out for such characters lurking around our forum. Seek counsel from those whom already done it but not from those who can't even answer basic question on what have they invested in.....

May God bless everyone a successful foray into Iskandar.

Cheers
N
 
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RedsYNWA

Alfrescian
Loyal
It's easy to spot such people with negative views. I feel that they can be grouped as follows:-

1) Locals who think SG are frying JB properties, & driving the prices up beyond their means. Truth is most purchasers are Malaysian PRs working in SG.

2) SG property agents who are now rather free due to the SG cooling measures, & worried that the Iskandar projects will drive interest away from those SG projects that they are marketing.

3) Singapoeans who hope (naively) that spreading negative talks on this forum will enable them to get JB properties on the cheap.

4) Singaporeans/locals who are jealous of the capital gains over the last 2 years, and hence try to comfort themselves by disparaging investments in JB.
 

shctaw

Alfrescian (Inf)
Asset
May be a good thing. If everyone sing the same tune we can group a choir.

Investors have different view due to different life experience, different mentors along the way and different investment career.

Market will not react base on one bias opinion. If the location is good (when I say location, I am not talking about view. Just location alone.) it will move according to its merits. Nothing can stop the price from jumping higher.

I may not like Zone B, but that does not meant the price will not go up. My reference is more about developers jumping ahead to sell, giving current owners very little chance to cash out.

I noticed investor5 had been making very general and negative comments everywhere. Not sure of his intention. He has proven to be evasive. Yes, it is an open forum in which everyone is entitle to their view/opinion.

Just want to warn the new ones who are here trying to get some information or learn from others, to have a discerning mind and watch out for such characters lurking around our forum. Seek counsel from those whom already done it but not from those who can't even answer basic question on what have they invested in.....

May God bless everyone a successful foray into Iskandar.

Cheers
N
 

arsenal

Alfrescian
Loyal
You hit the nail on the head.. Many proud folks also disparage investment in Malaysia because they can't understand why they miss the early boat..and they keep repeating their negative perception even they hardly step into Johor for the last 10 years..


It's easy to spot such people with negative views. I feel that they can be grouped as follows:-

1) Locals who think SG are frying JB properties, & driving the prices up beyond their means. Truth is most purchasers are Malaysian PRs working in SG.

2) SG property agents who are now rather free due to the SG cooling measures, & worried that the Iskandar projects will drive interest away from those SG projects that they are marketing.

3) Singapoeans who hope (naively) that spreading negative talks on this forum will enable them to get JB properties on the cheap.

4) Singaporeans/locals who are jealous of the capital gains over the last 2 years, and hence try to comfort themselves by disparaging investments in JB.
 

toyohon

Alfrescian
Loyal
May be a good thing. If everyone sing the same tune we can group a choir.

Investors have different view due to different life experience, different mentors along the way and different investment career.

Market will not react base on one bias opinion. If the location is good (when I say location, I am not talking about view. Just location alone.) it will move according to its merits. Nothing can stop the price from jumping higher.

I may not like Zone B, but that does not meant the price will not go up. My reference is more about developers jumping ahead to sell, giving current owners very little chance to cash out.

Agreed! Lest we end up the wrong side of the Gold 90.5 tagline - "only hear the good stuff"...
 

RedsYNWA

Alfrescian
Loyal
Agreed! Lest we end up the wrong side of the Gold 90.5 tagline - "only hear the good stuff"...

Negative views is perfectly fine. I myself feel that condos are overpriced and doomed to fall due to over-supply. And worksmanship of some developers can certainly be improved. What I dont really like to read are sweeping views without basis & which can be spotted a mile away.

Property investment in JB is no different from other cities with hinterland. Ultimately, its all about the location & quality, just like in Bangkok, London, Melbourne, New York etc.
 

kawan2sgmy

Alfrescian
Loyal
MALAYSIA PROPERTY SHOW 2013
Malaysia Property Show (MPS) is back for its 4th installment in March. Held at Orchard Hotel, it showcases the hottest and latest properties from top real estate developers in the country.


EVENT DETAILS
30 March - 31 March 2013
10:00 - 19:00
Orchard Hotel,
442 Orchard Road, 238879 Singapore
Free Admission
 

shctaw

Alfrescian (Inf)
Asset
At current price level we can still find bargain.

My point is to choose wisely. And not to reject condos as an investment as a blanket policy.

Negative views is perfectly fine. I myself feel that condos are overpriced and doomed to fall due to over-supply. And worksmanship of some developers can certainly be improved. What I dont really like to read are sweeping views without basis & which can be spotted a mile away.

Property investment in JB is no different from other cities with hinterland. Ultimately, its all about the location & quality, just like in Bangkok, London, Melbourne, New York etc.
 

shctaw

Alfrescian (Inf)
Asset
So did not miss JB. They are waiting at the sideline while riding the bull run somewhere else.

From what I know. The smart money is still not in Inskandar.

It will happen when you see REIT appear on Iskandar hotel or retail space.


You hit the nail on the head.. Many proud folks also disparage investment in Malaysia because they can't understand why they miss the early boat..and they keep repeating their negative perception even they hardly step into Johor for the last 10 years..
 
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