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malpaso

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The developer is CGP - Country Garden Pacificview Sdn Bhd

CGP is a 66-34% joint-venture between China’s Country Garden Holdings Ltd and Esplanade Danga 88 Sdn Bhd, whose main shareholder is XXXXXXX.
Johor state company Kumpulan Prasarana Rakyat Johor (KPRJ) is also a partner in the project.

Nope, not so accurate. It was reported in the Edge magazine this week that KPRJ only hold convertible share options in the project's joint company CGPV (CG-Pacific view), while "he who shall not be named" holds 99.9% share of Esplanade Dange 88 S/B, and also has more convertible share options in CGPV.

http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=308232&Itemid=43
 
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James Porn

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Tough times ahead for Iskandar and Malaysia properties
SEPTEMBER 26, 2014 2 COMMENTS
Disclaimer:
1. The following blog post is not likely to be reposted or republished in any online media or property portals – particularly those advertising Iskandar and Malaysia properties, or organizing property shows for these properties. Expect to read this in PropertySoul.com only.
2. Without any new project to launch, any commission from buyers or any advertising dollar from developers, this blog is not compelled or incentivised to write about infrastructure development across the Causeway, property investment opportunities in Malaysia, or choices for homeowners in Iskandar.
3. If you are marketing an Iskandar or Malaysia project, have just bought a new property or have decided to buy one over there, the following content may be disturbing to you. You might want to skip this post now and wait to read the next one.


How bad are the numbers?
I picked up a copy of The Star while traveling in Malaysia two weeks ago The article on the front page titled ‘Malaysia’s property sector cooling off‘ caught my attention. It quotes the findings of the first half 2014 Property Industry Survey conducted by the Real Estate and Housing Developers’ Association Malaysia.
- Close to 90 percent of respondents experienced a slowdown in property sales due to cooling measures announced in Budget 2014.
- While 84 percent of developers were able to get bridging financing for their projects, 53 percent of their buyers faced challenges getting financing to buy the properties.
- Properties priced below RM1 million were left unsold because of buyers’ difficulty to get financing and a glut of unreleased bumiputra lots.
- 31 percent of properties priced between RM500,001 and RM1 million, mainly in Selangor and Johor, were left unsold after completion in the past three years.
- 34 percent of properties priced between RM250,000 and RM500,000, mainly in Perak and Pahang, were left unsold.
- 10,189 units were launched in the first half of this year but only 49 percent were taken up.
- Over 80 percent of respondents held a ‘neutral’ to ‘pessimistic’ outlook for the property market in the first half of 2015.


How does it fare compared with Singapore?
In Singapore, according to the latest figures from URA, as of end of 2nd quarter 2014, the vacancy rate of completed projects is 7 percent for private residential units and 12 percent for Executive Condominiums. For projects under construction, 15 percent of private residential units launched were still unsold while 34 percent of total number of units were unsold as of August 2014.
Across the Causeway, the outlook of the property market looks even gloomier.
It is the first time in recent history of the Malaysia property sector that less than 50 percent of units launched can be sold in a half-year period. For units completed in the past three years, over 30 percent are still left on the shelves.


What seems to be the problems?
There are four reasons behind the cooling property sector in Malaysia:
1. Oversupply in the market
According to Malaysia’s Valuation and Property Services Department, land prices and launch price of residential properties have doubled from 2011 to 2013. With so many projects launched during this period, there will be a huge supply of completed residential units flooding the property market in the next two to four years.
danga-bay2From 2011, developers jumping on the bandwagon loaded Johor, Selangor and Penang with countless upscale residential projects. Even overseas developers, including China developers, rushed to the country to diversify their investment. There were frantic moves such as building a man-made island without proper planning. And there is no authority to keep overbuilding in check.
Any industry can prosper with healthy organic growth. On the contrary, heavy dosage of growth hormones that promotes unnatural growth can result in many negative side-effects that ends up with premature mortality.


2. Disconnect between price and budget
There is huge injection of investment funds and impressive development plans in Iskandar. They contribute positively to the long-term economic growth in the area.
However, it takes time to reap what you sow. Earning power of the common people takes time to catch up. The 70 percent loan-to-value ratio is now beyond the capability of many home buyers. In fact, there appears to be a widening gap between the escalating property prices and the affordability of the home buyers.


3. Concerns of foreign buyers
Of course the high-end residential projects built by foreign developers are not relying on take-ups by the locals. But foreign buyers are deterred by the property cooling measures of Budget 2014, including 1) doubling of the price threshold to RM1 million; and 2) higher Real Property Gains Tax of 30 percent for properties bought by foreigners sold within five years of purchase and 5 percent hereafter.
danga-bayFor Singapore investors, they also find themselves at the mercy of the volatile relationship between the two countries on disputes over different issues like tolls, border or water.
The weaker Malaysian currency is a double-edged sword. The current exchange rate makes it look very attractive to own a property in Malaysia. But no one can guarantee that the ringgit won’t continue to weaken and will work against you when you want to exit the market one day.


4. Where is the resale market?
According to Malaysia’s Ministry of Finance, in the first half of 2013, only 1.5 percent of property transactions was above RM1 million in the Johor state. Those bought before 2014 with prices lower than RM1 million will have to wait for their properties to rise above that magic value of RM1 million until they can sell to foreign buyers.
Unlike Singapore, Iskandar is a testbed but not a tested market. Until recently, we have seen active buying but not active selling.
If one day properties with prices over RM1 million drop below the magic number of RM1 million, with all foreigners ineligible to buy, even if the locals are interested to take over, how many of them can afford the high quantum of these properties?


So stop asking me what I think of Malaysia or Iskandar properties. When everybody is talking about a hot market, it’s not the time to buy. It’s time to sell.
And don’t ask me again which project there is a good investment. Properties in any country is a good investment. The key is the time and the price you enter the market. That is exactly the homework property investors need to do before they buy anything in any market.
 

cow138

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Long term trend in Johor still OK.
Things might be slow currently but I think if you have a longer term investment horizon and not buying into to flip and get out then it might still be possible.
that's provided so long as the govt don't screw it up.
 

enjoylife77

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Concerns over oversupply of residential units in Iskandar Malaysia


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By Wong Siew Ying
POSTED: 29 Sep 2014 22:58
UPDATED: 29 Sep 2014 23:04


Malaysia's Real Estate and Housing Developers' Association's president FD Iskandar said developers may be introducing more residential units there than the market in Johor can handle.

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File photo shows visitors looking around a luxury home in Johor. (AFP/Roslan Rahman)

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SINGAPORE: Malaysia's Real Estate and Housing Developers' Association has flagged concerns about the property market in Iskandar Malaysia, particularly in the Nusa Jaya and Danga Bay areas.

Speaking at the KPMG Global Real Estate and Construction Conference in Singapore on Monday (Sep 29), the association's president Mr FD Iskandar said developers may be introducing more residential units there than the market in Johor can handle.

Iskandar Malaysia - a special economic zone three times the size of Singapore - has been a property investment hot spot for Singaporeans in the last few years.

Developers with projects there include Singapore's CapitaLand and China's Country Garden. Country Garden is developing a 9,000-residential unit project at Danga Bay, adding to the large supply of homes there and at Nusa Jaya.

Mr Iskandar said: "My concern is in two to three years' time, once those 30,000 units are completed, and if 50 to 60 per cent of the buyers are actually not from Iskandar or around the Iskandar region - for Malaysians and Singaporeans, it is very near, but (not for) people outside Malaysia and Singapore - then you will see those that are empty. Once they want to start to rent, so many units (will be) available, then it will put pressure on rental yield."

Despite the concern, Mr Iskandar believes that landed homes will continue to do well. He also noted that there has been a lot of interest among Singapore investors on industrial properties in Iskandar.

- CNA/dl
 

FHBH12

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Weak Malaysian ringgit affecting property prices
Sep 29, 2014

Apart from slashing the purchasing power of all locals, the weaker Malaysian ringgit is driving up the cost of properties in the country, according to a report from The Daily Express.

This is because Malaysian property players still rely on imported construction materials such as high-quality tiles, door knobs, cement clinker and steel bars.

At present, a single Malaysian ringgit is equivalent to 39 Singaporean cents. This means RM100 is equal to less than S$40 and it has not recovered from its 50 percent depreciation since the administration of former Prime Minister Tun Dr Mahathir.

“I find it odd that only few would openly blame Dr Mahathir for the drastic increase in property prices as he made Soros the black sheep for the falling ringgit woes,” said retiree Bryant Wong. Other culprits behind the weak ringgit are currency traders.

Previously, one Malaysian ringgit was equal to a single Singapore dollar or Brunei dollar. But despite the country’s huge land area and vast resources, the currencies of these two tiny nations have become stronger.

This means it is more affordable for their citizens to buy properties in Malaysia. On the other hand, Malaysians were paying double the amount for overseas real estate before the 1998 financial crisis, he noted.

Furthermore, the upcoming goods and services tax (GST) is expected to increase the cost of building materials once it gets introduced in April 2015, so investors have until 31 March 2015 to buy commercial and industrial properties without incurring the said levy.

Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]

http://www.propertyguru.com.my/prop...k-malaysian-ringgit-affecting-property-prices
 

cow138

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Over supply is primarily a problem with the China developers.
I think it was a mistake for the state govt to approve the China developers plan.
It certainly doesn't do the local property scene any good.
The supply is just too high.
I'm not complaining about the pricing as I think they price it quite reasonably just that the number of units that they have in mind is really crazy.
Now people are coming to terms with the reality.
They'll be a swing towards good quality landed homes.
I think those with unique features will do well like leisure farm, Senibong cove and emerald Bay etc.
 

snowbird

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Mr Iskandar said: "My concern is in two to three years' time, once those 30,000 units are completed, and if 50 to 60 per cent of the buyers are actually not from Iskandar or around the Iskandar region - for Malaysians and Singaporeans, it is very near, but (not for) people outside Malaysia and Singapore - then you will see those that are empty. Once they want to start to rent, so many units (will be) available, then it will put pressure on rental yield."


This is exactly many people's worry now.
Those who had bought recently and who were led to think that they can service their loan with the rental yield, are going to have nightmare.
And those without means to service the loan will be forced to sell by their bankers.
For the commercial projects, this may even happen sooner as there are just far too many unoccupied shop units, for long period, all over JB!
 

RedsYNWA

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Mr Iskandar said: "My concern is in two to three years' time, once those 30,000 units are completed, and if 50 to 60 per cent of the buyers are actually not from Iskandar or around the Iskandar region - for Malaysians and Singaporeans, it is very near, but (not for) people outside Malaysia and Singapore - then you will see those that are empty. Once they want to start to rent, so many units (will be) available, then it will put pressure on rental yield."


This is exactly many people's worry now.
Those who had bought recently and who were led to think that they can service their loan with the rental yield, are going to have nightmare.
And those without means to service the loan will be forced to sell by their bankers.
For the commercial projects, this may even happen sooner as there are just far too many unoccupied shop units, for long period, all over JB!

I think the residential market is at bigger risk, compared to the commercial & industrial projects. The pockets of commercial & industrial buyers tend to be v v deep, unlike residential. The shops or factories are unoccupied because these cash rich buyers simply refuse to rent lower than their asking prices. They rather keep them empty.

For residential projects, the pockets tend to be much shallower.
 

snowbird

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I think the residential market is at bigger risk, compared to the commercial & industrial projects. The pockets of commercial & industrial buyers tend to be v v deep, unlike residential. The shops or factories are unoccupied because these cash rich buyers simply refuse to rent lower than their asking prices. They rather keep them empty.

For residential projects, the pockets tend to be much shallower.

There are hundreds of commercial units, the older ones together with the newly completed ones, some unoccupied for more than 2 years now.
And looking at the current situation, its unlikely they'll be occupied any time soon, so those pockets will be getting shallower and shallower by the days.
 

enjoylife77

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How are the commercial units doing at Holiday Plaza, Pelangi Plaza and Leisure Mall? Didn't visit them for quite a while.
 

cow138

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Depressing.
Nobody in there. Businesses not investing money to refurbish the shopping centres.
Not too sure where the demand is coming from.
 

Funniman

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Depressing.
Nobody in there. Businesses not investing money to refurbish the shopping centres.
Not too sure where the demand is coming from.

In KL, you would find those successful malls are tenanted out and managed by the Mall's management. This is to control the tenancy mix, eateries, anchor tenants, the maintenance of common areas and the overall marketing of the mall.
Individually own retail outlets mostly fail as there's no control who open what business and no cooperation on upgrading works. There's no focus on marketing efforts and how to woo in the crowd. I know there's a case where an individual owner rented his outlet to a person who stated that they are into woodcraft business. 3 weeks later, they brought in those huge black coffins and displayed in the shops. It is a con job but the moral of the story is there's no control.
 

cow138

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That's very true.
I kinda think that such developers are the pump and dump type and not interested in the long term viability of their projects.
I avoid such developers.
I suspect that the R & F Princess cove is something like that too
 

RedsYNWA

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In KL, you would find those successful malls are tenanted out and managed by the Mall's management. This is to control the tenancy mix, eateries, anchor tenants, the maintenance of common areas and the overall marketing of the mall.
Individually own retail outlets mostly fail as there's no control who open what business and no cooperation on upgrading works. There's no focus on marketing efforts and how to woo in the crowd. I know there's a case where an individual owner rented his outlet to a person who stated that they are into woodcraft business. 3 weeks later, they brought in those huge black coffins and displayed in the shops. It is a con job but the moral of the story is there's no control.

Actually there are successful examples of strata-titled lots, but they tend to be ground level shops near office areas. Examples in SG include: International Plaza, the Arcade etc.. Successful examples can also be seen in HK & Taipei ground level shops. But these tend to be quite limited in supply, and rarely for sale.
 

snowbird

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How are the commercial units doing at Holiday Plaza, Pelangi Plaza and Leisure Mall? Didn't visit them for quite a while.

Well, for the mentioned malls, its quite deserted on most days, worse, with so many unoccupied units inside makes them even more depressed looking.
Just wondering, how those surviving shops managed to pay their rent with that kind of business they are having?
For Leisure Mall, the cinemas were already closed and even the anchor tenant like Giant supermarket is not particularly doing very good business.
Over at Danga Mall, another large mall in JB central, nearly half the shop units there were shuttered.
 

RedsYNWA

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Well, for the mentioned malls, its quite deserted on most days, worse, with so many unoccupied units inside makes them even more depressed looking.
Just wondering, how those surviving shops managed to pay their rent with that kind of business they are having?
For Leisure Mall, the cinemas were already closed and even the anchor tenant like Giant supermarket is not particularly doing very good business.
Over at Danga Mall, another large mall in JB central, nearly half the shop units there were shuttered.

Of the mentioned malls, Holiday Plaza seems to be doing the best. They have a variety of things, like hair salons, massages, fake branded, H/P accessories & DVD shops, Parkson Departmental & Mcdonald's/KFC.
 

snowbird

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Of the mentioned malls, Holiday Plaza seems to be doing the best. They have a variety of things, like hair salons, massages, fake branded, H/P accessories & DVD shops, Parkson Departmental & Mcdonald's/KFC.

Yeah, the massage shops are doing fine there.
Right now, the current situation for some large shopping malls in JB central -

Pacific Mall - still born (maybe going to be redeveloped)
JB Waterfront City - dead long ago
Danga Mall - half dead
Pelangi Plaza - half dead
Leisure Mall - half dead
Holiday Plaza - struggling very hard
Sentosa SC - still half dead after massive makeover
Merlin Tower SC - almost dead
Kota Raya Plaza - lots of people, few shoppers
And more out of town.

With no obvious improvement in immediate term and still, hundreds more shops are coming onto the market very soon.
What are the developers thinking??
 

FHBH12

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Yeah, the massage shops are doing fine there.
Right now, the current situation for some large shopping malls in JB central -

Pacific Mall - still born (maybe going to be redeveloped)
JB Waterfront City - dead long ago
Danga Mall - half dead
Pelangi Plaza - half dead
Leisure Mall - half dead
Holiday Plaza - struggling very hard
Sentosa SC - still half dead after massive makeover
Merlin Tower SC - almost dead
Kota Raya Plaza - lots of people, few shoppers
And more out of town.

With no obvious improvement in immediate term and still, hundreds more shops are coming onto the market very soon.
What are the developers thinking??

I recall many shoplots at new launches priced at $1-2 mil RM were snapped up last year and this year. Commercial properties will be challenging in JB next year as online shopping and higher toll reduce the appeal of bargain shopping in JB.
 
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