https://www.straitstimes.com/busine...s-burnt-in-iskandar-buy-and-leaseback-scheme?
Some claim fingers burnt in Iskandar buy-and-leaseback scheme
Some claim fingers burnt in Iskandar buy-and-leaseback scheme
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kum gong sinikies Islankar investers
- Thread starter rambo22
- Start date
RM value drop, sinkie lose, even if its making money in jiu hu..
Full article:
A group of 116 people - mostly Singaporeans - who bought serviced apartments in a waterfront development at Johor's Puteri Harbour are claiming that they have had their fingers burnt in a buy-and-leaseback scheme.
They are accusing a company linked to the developer of giving "unreasonably and inconceivably negligible" rental returns after the first two years of guaranteed returns in a 10-year contract.
This began in March 2015 and they got at least five per cent a year. But when the guarantee period expired in February 2017, the returns plunged.
Mr Victor Ng, who had paid almost RM1 million (S$327,450) for a 1,178 sq ft apartment, said the rental returns fell to 0.57 per cent a year and losses were carried forward to be deducted from future profits.
"When I entered this deal, I wanted it to be safe. With the Somerset brand, at least the odds are not against me," the 47-year-old, who runs private investment consulting firm Saash Capital, told The Sunday Times.
The 204-unit development, sited in the massive Iskandar township and just 10 minutes from the first Legoland theme park in Asia, is called Somerset Puteri Harbour as it is managed and operated by The Ascott, which uses the brand name Somerset.
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Like Mr Ng, several others were also drawn by the Somerset name and the fact that The Ascott is a unit of the giant property development company CapitaLand.
Last month, the group engaged a law firm in Malaysia to send a letter of demand to Clear Dynamic, the company with which they had entered the leaseback agreement.
Clear Dynamic is a wholly-owned subsidiary of Nusajaya Consolidated, which is the developer of Somerset Puteri Harbour and a joint venture between United Malayan Land and UEM Land.
The group wants Clear Dynamic to review its management agreement with The Ascott and, if necessary, "replace Ascott as the management body".
The buyers claimed their decision to enter the leaseback agreement was based on the developer's assurances that The Ascott could promote and market the property and deliver reasonable rental returns.
Clear Dynamic strongly denied the allegations, saying the leaseback agreement was entered on a "willing buyer and willing seller basis".
It also said it is bound by the terms of the management agreement and may not be able to terminate it unilaterally as "there is no default on Ascott's part".
When contacted, The Ascottsaid that under its contract with Clear Dynamic, it will manage and operate Somerset Puteri Harbour for the first 10 years, starting in March 2015.
Meanwhile, Clear Dynamic said it has "strictly complied with all the terms and conditions of the Leaseback Agreement and all owners have received the rate of rental in accordance with the agreed terms".
It added: "The guaranteed rental period is for the first two years, with the remaining eight years being non-guaranteed and dependent on market factors."
But the group crying foul said they expect a consistent minimum net return of 2.8 per cent per annum of their investments. "If they can't produce that, we might as well put our money as fixed deposits with the banks," said polytechnic lecturer Lim Poh Ghee, 58.
Mr Ng said the net rent, paid every two months, of a typical two-bedroom unit shrank from RM7,500 to RM2,000 right after the guaranteed period. "I then received a negative rent of RM1,800. This amount would be deducted from future profits," he added.
Mr Lim said a woman in their WhatsApp chat group said her bank has been calling her to ask for the mortgage payments of the flat.
Another man said he had borrowed money from his parents to invest in the unit."For me, I had used money meant for my children to buy the property."
A group of 116 people - mostly Singaporeans - who bought serviced apartments in a waterfront development at Johor's Puteri Harbour are claiming that they have had their fingers burnt in a buy-and-leaseback scheme.
They are accusing a company linked to the developer of giving "unreasonably and inconceivably negligible" rental returns after the first two years of guaranteed returns in a 10-year contract.
This began in March 2015 and they got at least five per cent a year. But when the guarantee period expired in February 2017, the returns plunged.
Mr Victor Ng, who had paid almost RM1 million (S$327,450) for a 1,178 sq ft apartment, said the rental returns fell to 0.57 per cent a year and losses were carried forward to be deducted from future profits.
"When I entered this deal, I wanted it to be safe. With the Somerset brand, at least the odds are not against me," the 47-year-old, who runs private investment consulting firm Saash Capital, told The Sunday Times.
The 204-unit development, sited in the massive Iskandar township and just 10 minutes from the first Legoland theme park in Asia, is called Somerset Puteri Harbour as it is managed and operated by The Ascott, which uses the brand name Somerset.
ADVERTISING
Like Mr Ng, several others were also drawn by the Somerset name and the fact that The Ascott is a unit of the giant property development company CapitaLand.
Last month, the group engaged a law firm in Malaysia to send a letter of demand to Clear Dynamic, the company with which they had entered the leaseback agreement.
Clear Dynamic is a wholly-owned subsidiary of Nusajaya Consolidated, which is the developer of Somerset Puteri Harbour and a joint venture between United Malayan Land and UEM Land.
The group wants Clear Dynamic to review its management agreement with The Ascott and, if necessary, "replace Ascott as the management body".
The buyers claimed their decision to enter the leaseback agreement was based on the developer's assurances that The Ascott could promote and market the property and deliver reasonable rental returns.
Clear Dynamic strongly denied the allegations, saying the leaseback agreement was entered on a "willing buyer and willing seller basis".
It also said it is bound by the terms of the management agreement and may not be able to terminate it unilaterally as "there is no default on Ascott's part".
When contacted, The Ascottsaid that under its contract with Clear Dynamic, it will manage and operate Somerset Puteri Harbour for the first 10 years, starting in March 2015.
Meanwhile, Clear Dynamic said it has "strictly complied with all the terms and conditions of the Leaseback Agreement and all owners have received the rate of rental in accordance with the agreed terms".
It added: "The guaranteed rental period is for the first two years, with the remaining eight years being non-guaranteed and dependent on market factors."
But the group crying foul said they expect a consistent minimum net return of 2.8 per cent per annum of their investments. "If they can't produce that, we might as well put our money as fixed deposits with the banks," said polytechnic lecturer Lim Poh Ghee, 58.
Mr Ng said the net rent, paid every two months, of a typical two-bedroom unit shrank from RM7,500 to RM2,000 right after the guaranteed period. "I then received a negative rent of RM1,800. This amount would be deducted from future profits," he added.
Mr Lim said a woman in their WhatsApp chat group said her bank has been calling her to ask for the mortgage payments of the flat.
Another man said he had borrowed money from his parents to invest in the unit."For me, I had used money meant for my children to buy the property."
Mudlanders can't be trusted
Yeah I waiting too. But give credit where credit is due. He is pretty spot on concerning these m&ds.Where's our resident Jiu Hu Property Sexpert with Firecracker brains Mdm Butterfly...Lol
In before her rants!
Mahathir can violate the signed water contract agreement,what more is this this derisory private property agreement...
Can ready to be screwed again by Bolehland.
Can ready to be screwed again by Bolehland.
KNN some lao cb here not only burn finger but burn the cb after investing in jb KNN
Waiting for more to jump Bedok resrvoir and Sinkie race getting extinct.
PAP and its associated brand are getting toxic.
PAP still overselling itself by pulling wool over rakyat's eye.
PAP still overselling itself by pulling wool over rakyat's eye.
It's supposed to be a "private investment consulting firm". Let's hope his clients are "happy and prosperous".
KNN becas the thread title very sensitive KNNWhere's the forum's resident firecracker Jiu Hu property investor aunty? No sound no picture? Lol
