1
PRESENTATION FOR ISLAMIC WEALTH AND ASSET MANAGEMENT(IFE 750)
PREPARED BY
PREPARED FOR
AGENDAbull INTRODUCTION - DEFINITIONbull INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull INTRODUCTION- ISLAMIC VIEWSbull CHARACTERISTIC OF REAL ESTATEbull PRICE DETERMINATIONbull REAL ESTATE CYCLESbull CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN
KUALA LUMPUR (1970 -2000)bull RISK ELEMENTSbull LAW RELATING TO REAL ESTATESbull PROCESS OF ACQUIRING PROPERTYbull I-REIT REITbull CASE STUDY WOULD YOU LIVE HEREbull CONCLUSION
2
INTRODUCTION - DEFINITION
OXFORD STUDENTrsquoS DICTIONARY SECOND EDITION 2007 DEFINES THEFOLLOWING TERMS ndash
bull ldquoPROPERTYrdquo AS LAND AND BUILDING
bull ldquoLANDrdquo AS SOLID PART ON THE SURFACE OF THE EARTH AND
bull ldquoREAL ESTATErdquo AS PROPERTY IN FORM OF LAND AND BUILDING
bull REAL ESTATE IS A LEGAL TERM WHICH COVER THE LAND AND ANYPERMANENT FIXTURES AFFIXED ON IT SUCH AS BUILDING MACHINERY ORPLANT IT ALSO CALL ldquoREALTYrdquo
bull PEOPLE HAVE VARIOUS REASONS FOR ACQUIRING OR OWNING PROPERTYSUCH AS PLACE TO LIVE INVESTMENTS BUSINESSES SPECULATION ORGENERATING INCOME SUCH AS REITS RENTAL OR EVEN TIME SHARINGCONCEPT (MOSTLY FOR VACATION BUSINESS PURPOSES)
bull BEING ONE OF INVESTMENT INSTRUMENT INVESTMENT IN REAL ESTATEWOULD REQUIRE CAPITAL MANAGEMENT AND EXPOSE TO RISKS
3
INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull SECTION 2 OF THE REAL PROPERTY GAIN TAX ACT 1976 (ACT 169) -
ldquoREAL PROPERTYrdquo MEANS ANY LAND SITUATED IN MALAYSIA AND ANY INTEREST OPTION OR OTHER RIGHT IN OR OVER SUCH LAND
bull SECTION 5 OF THE NATIONAL LAND CODE 1965 (ACT 56) ndash
ldquoldquoLANDrdquo INCLUDES-
(A) THAT SURFACE OF THE EARTH AND ALL SUBSTANCES FORMING THAT SURFACE
(B) THE EARTH BELOW THE SURFACE AND ALL SUBSTANCES THEREIN
(C) ALL VEGETATION AND OTHER NATURAL PRODUCTS WHETHER OR NOT REQUIRING THE PERIODICAL APPLICATION OF LABOUR TO THEIR PRODUCTION AND WHETHER ON OR BELOW THE SURFACE
(D) ALL THINGS ATTACHED TO THE EARTH OR PERMANENTLY FASTENED TO ANYTHING ATTACHED TO THE EARTH WHETHER ON OR BELOW THE SURFACE AND
(E) LAND COVERED BY WATERrdquo 4
INTRODUCTION- ISLAMIC VIEWS
bull PROPERTY IS RELATED TO THE PILLARS FOR MAQASID SHARIAHWHICH IS LIVES (NAFS) AND THEIR WEALTH (MAL)
bull UTHMAN IBN AFFAN REPORTED THE PROPHET PEACE ANDBLESSINGS BE UPON HIM SAID ndash
ldquoTHERE IS NO RIGHT FOR THE SON OF ADAM EXCEPT IN THESETHINGS A HOUSE IN WHICH HE LIVES A GARMENT TO COVERHIS NAKEDNESS A PIECE OF BREAD AND WATERrdquo
SOURCE SUNAN AT-TIRMIDHI 2341
5
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
AGENDAbull INTRODUCTION - DEFINITIONbull INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull INTRODUCTION- ISLAMIC VIEWSbull CHARACTERISTIC OF REAL ESTATEbull PRICE DETERMINATIONbull REAL ESTATE CYCLESbull CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN
KUALA LUMPUR (1970 -2000)bull RISK ELEMENTSbull LAW RELATING TO REAL ESTATESbull PROCESS OF ACQUIRING PROPERTYbull I-REIT REITbull CASE STUDY WOULD YOU LIVE HEREbull CONCLUSION
2
INTRODUCTION - DEFINITION
OXFORD STUDENTrsquoS DICTIONARY SECOND EDITION 2007 DEFINES THEFOLLOWING TERMS ndash
bull ldquoPROPERTYrdquo AS LAND AND BUILDING
bull ldquoLANDrdquo AS SOLID PART ON THE SURFACE OF THE EARTH AND
bull ldquoREAL ESTATErdquo AS PROPERTY IN FORM OF LAND AND BUILDING
bull REAL ESTATE IS A LEGAL TERM WHICH COVER THE LAND AND ANYPERMANENT FIXTURES AFFIXED ON IT SUCH AS BUILDING MACHINERY ORPLANT IT ALSO CALL ldquoREALTYrdquo
bull PEOPLE HAVE VARIOUS REASONS FOR ACQUIRING OR OWNING PROPERTYSUCH AS PLACE TO LIVE INVESTMENTS BUSINESSES SPECULATION ORGENERATING INCOME SUCH AS REITS RENTAL OR EVEN TIME SHARINGCONCEPT (MOSTLY FOR VACATION BUSINESS PURPOSES)
bull BEING ONE OF INVESTMENT INSTRUMENT INVESTMENT IN REAL ESTATEWOULD REQUIRE CAPITAL MANAGEMENT AND EXPOSE TO RISKS
3
INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull SECTION 2 OF THE REAL PROPERTY GAIN TAX ACT 1976 (ACT 169) -
ldquoREAL PROPERTYrdquo MEANS ANY LAND SITUATED IN MALAYSIA AND ANY INTEREST OPTION OR OTHER RIGHT IN OR OVER SUCH LAND
bull SECTION 5 OF THE NATIONAL LAND CODE 1965 (ACT 56) ndash
ldquoldquoLANDrdquo INCLUDES-
(A) THAT SURFACE OF THE EARTH AND ALL SUBSTANCES FORMING THAT SURFACE
(B) THE EARTH BELOW THE SURFACE AND ALL SUBSTANCES THEREIN
(C) ALL VEGETATION AND OTHER NATURAL PRODUCTS WHETHER OR NOT REQUIRING THE PERIODICAL APPLICATION OF LABOUR TO THEIR PRODUCTION AND WHETHER ON OR BELOW THE SURFACE
(D) ALL THINGS ATTACHED TO THE EARTH OR PERMANENTLY FASTENED TO ANYTHING ATTACHED TO THE EARTH WHETHER ON OR BELOW THE SURFACE AND
(E) LAND COVERED BY WATERrdquo 4
INTRODUCTION- ISLAMIC VIEWS
bull PROPERTY IS RELATED TO THE PILLARS FOR MAQASID SHARIAHWHICH IS LIVES (NAFS) AND THEIR WEALTH (MAL)
bull UTHMAN IBN AFFAN REPORTED THE PROPHET PEACE ANDBLESSINGS BE UPON HIM SAID ndash
ldquoTHERE IS NO RIGHT FOR THE SON OF ADAM EXCEPT IN THESETHINGS A HOUSE IN WHICH HE LIVES A GARMENT TO COVERHIS NAKEDNESS A PIECE OF BREAD AND WATERrdquo
SOURCE SUNAN AT-TIRMIDHI 2341
5
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INTRODUCTION - DEFINITION
OXFORD STUDENTrsquoS DICTIONARY SECOND EDITION 2007 DEFINES THEFOLLOWING TERMS ndash
bull ldquoPROPERTYrdquo AS LAND AND BUILDING
bull ldquoLANDrdquo AS SOLID PART ON THE SURFACE OF THE EARTH AND
bull ldquoREAL ESTATErdquo AS PROPERTY IN FORM OF LAND AND BUILDING
bull REAL ESTATE IS A LEGAL TERM WHICH COVER THE LAND AND ANYPERMANENT FIXTURES AFFIXED ON IT SUCH AS BUILDING MACHINERY ORPLANT IT ALSO CALL ldquoREALTYrdquo
bull PEOPLE HAVE VARIOUS REASONS FOR ACQUIRING OR OWNING PROPERTYSUCH AS PLACE TO LIVE INVESTMENTS BUSINESSES SPECULATION ORGENERATING INCOME SUCH AS REITS RENTAL OR EVEN TIME SHARINGCONCEPT (MOSTLY FOR VACATION BUSINESS PURPOSES)
bull BEING ONE OF INVESTMENT INSTRUMENT INVESTMENT IN REAL ESTATEWOULD REQUIRE CAPITAL MANAGEMENT AND EXPOSE TO RISKS
3
INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull SECTION 2 OF THE REAL PROPERTY GAIN TAX ACT 1976 (ACT 169) -
ldquoREAL PROPERTYrdquo MEANS ANY LAND SITUATED IN MALAYSIA AND ANY INTEREST OPTION OR OTHER RIGHT IN OR OVER SUCH LAND
bull SECTION 5 OF THE NATIONAL LAND CODE 1965 (ACT 56) ndash
ldquoldquoLANDrdquo INCLUDES-
(A) THAT SURFACE OF THE EARTH AND ALL SUBSTANCES FORMING THAT SURFACE
(B) THE EARTH BELOW THE SURFACE AND ALL SUBSTANCES THEREIN
(C) ALL VEGETATION AND OTHER NATURAL PRODUCTS WHETHER OR NOT REQUIRING THE PERIODICAL APPLICATION OF LABOUR TO THEIR PRODUCTION AND WHETHER ON OR BELOW THE SURFACE
(D) ALL THINGS ATTACHED TO THE EARTH OR PERMANENTLY FASTENED TO ANYTHING ATTACHED TO THE EARTH WHETHER ON OR BELOW THE SURFACE AND
(E) LAND COVERED BY WATERrdquo 4
INTRODUCTION- ISLAMIC VIEWS
bull PROPERTY IS RELATED TO THE PILLARS FOR MAQASID SHARIAHWHICH IS LIVES (NAFS) AND THEIR WEALTH (MAL)
bull UTHMAN IBN AFFAN REPORTED THE PROPHET PEACE ANDBLESSINGS BE UPON HIM SAID ndash
ldquoTHERE IS NO RIGHT FOR THE SON OF ADAM EXCEPT IN THESETHINGS A HOUSE IN WHICH HE LIVES A GARMENT TO COVERHIS NAKEDNESS A PIECE OF BREAD AND WATERrdquo
SOURCE SUNAN AT-TIRMIDHI 2341
5
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INTRODUCTION- DEFINITION UNDER MALAYSIAN LAWSbull SECTION 2 OF THE REAL PROPERTY GAIN TAX ACT 1976 (ACT 169) -
ldquoREAL PROPERTYrdquo MEANS ANY LAND SITUATED IN MALAYSIA AND ANY INTEREST OPTION OR OTHER RIGHT IN OR OVER SUCH LAND
bull SECTION 5 OF THE NATIONAL LAND CODE 1965 (ACT 56) ndash
ldquoldquoLANDrdquo INCLUDES-
(A) THAT SURFACE OF THE EARTH AND ALL SUBSTANCES FORMING THAT SURFACE
(B) THE EARTH BELOW THE SURFACE AND ALL SUBSTANCES THEREIN
(C) ALL VEGETATION AND OTHER NATURAL PRODUCTS WHETHER OR NOT REQUIRING THE PERIODICAL APPLICATION OF LABOUR TO THEIR PRODUCTION AND WHETHER ON OR BELOW THE SURFACE
(D) ALL THINGS ATTACHED TO THE EARTH OR PERMANENTLY FASTENED TO ANYTHING ATTACHED TO THE EARTH WHETHER ON OR BELOW THE SURFACE AND
(E) LAND COVERED BY WATERrdquo 4
INTRODUCTION- ISLAMIC VIEWS
bull PROPERTY IS RELATED TO THE PILLARS FOR MAQASID SHARIAHWHICH IS LIVES (NAFS) AND THEIR WEALTH (MAL)
bull UTHMAN IBN AFFAN REPORTED THE PROPHET PEACE ANDBLESSINGS BE UPON HIM SAID ndash
ldquoTHERE IS NO RIGHT FOR THE SON OF ADAM EXCEPT IN THESETHINGS A HOUSE IN WHICH HE LIVES A GARMENT TO COVERHIS NAKEDNESS A PIECE OF BREAD AND WATERrdquo
SOURCE SUNAN AT-TIRMIDHI 2341
5
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INTRODUCTION- ISLAMIC VIEWS
bull PROPERTY IS RELATED TO THE PILLARS FOR MAQASID SHARIAHWHICH IS LIVES (NAFS) AND THEIR WEALTH (MAL)
bull UTHMAN IBN AFFAN REPORTED THE PROPHET PEACE ANDBLESSINGS BE UPON HIM SAID ndash
ldquoTHERE IS NO RIGHT FOR THE SON OF ADAM EXCEPT IN THESETHINGS A HOUSE IN WHICH HE LIVES A GARMENT TO COVERHIS NAKEDNESS A PIECE OF BREAD AND WATERrdquo
SOURCE SUNAN AT-TIRMIDHI 2341
5
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
ECONOMIC
CHARACTERISTIC OF REAL ESTATE
CHARACTERISTIC OF REAL ESTATE
PHYSICAL LEGAL OTHERS
1 IMMOBILITY2 SIZE3 HETEROGENEOUS4 DURABILITY OR
PERPERTUALITY5 LONG
DEVELOPMENT OR COMPLETION TIME
6 PROPERTY MANAGEMENT
1 INTEREST AND RIGHTS
2 DECENTRALISED MARKET
3 HEDGE AGAINST INFLATION
4 LARGE TRANSACTION COSTS OR INVISIBLE
5 SUPPLY LAG6 CYCLICAL VALUES
1 VARYING LEGISLATIONS AND LAW
2 COMPLICATED TRANSACTION PROCEDURES
3 STATUTORIAL CHARGES
LACK OF PUBLICINFORMATION ONTHE PRICE
INFORMATIONONLY AVAILABLEAT THE AUTHORITYAND HARDLYACCESSIBLE BYPUBLIC
BROUCHER PRICEMAY BE DIFFERENTFROM REAL PRICE
6
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PHYSICAL CHARACTERISTIC
IMMOBILITY SIZE HETEROGENEOUS DURABILITY OR PERPERTUALITY
LONG DEVELOPMENT
OR COMPLETION
TIME
PROPERTY MANAGEMENT
IMMOVEABLE
NO PHYSICAL MARKET PLACE
SPATIAL FIXTY
COULD BE VERY HUGE
SURFACE OF THE EARTH
INDIVIDUALLYUNIQUE
VARIOUS FACTOR AFFECT THE PRICE
LONG LASTING FOR YEARSCENTURIES
INDESTRUCTABLE
SUITABLE FOR HABITAT
LAND AQUISATION
DEVELOPMENT
CERTIFICATE OF FITNESS FOR OCCUPANCY
24 ndash 36 MONTHS
VARIOUS MATTERS RELATED TO PROPERTY TAXES LEGAL FEES MAINTENANCE
NEED PROPERTY MANAGERS
CHARACTERISTIC OF REAL ESTATE
7
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CHARACTERISTIC OF REAL ESTATE
ECONOMIC CHARACTERISTIC
INTEREST AND RIGHTS
DECENTRALISED MARKET
HEDGE AGAINST INFLATION
LARGE TRANSACTION
COSTS OR INVISIBLE
SUPPLY LAG CYCLICAL VALUES
OWNERSHIP PROVED IN TITLE DEEDS
REGISTERED AND BENEFICIAL INTEREST
CREATE INCOME AND SAVE MONEY
TRANSACTIONTHROUGH PROPERTY AGENT
NO CENTRALISED MARKET
ONLY HAVE EXPOSEG MAPEX
BETTER THAN STOCKS AND SHARES
DIFFERENTPROPERTY TYPES HAVE DIFFERENT HEDGE CHARACTERISTIC
INVOLVES LARGE COST IEFEES FOR LAWYERS AGENT LAND OFFICE RENOVATION
AQUIRING PROPERTY THORUGH BONDS SUKUK SHARES RIETS
TOO EXPENSIVE - OCCUPANCY
LONG TIME FOR ACQUIRINGPROCESS SUCH AS APPROVAL FROM AUTHORITY FINANCING DESIGNING
DISEQUILIBRIUM IN THE SHORT RUN
RELATIVELY LESS LIQUID
AFFECTED BY -
(a) GLOBAL AND LOCAL ECONOMY
(b) GOV POLICIES
OPEN TO SPECULATION
8
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CHARACTERISTIC OF REAL ESTATE
LEGAL CHARACTERISTIC
VARYING LEGISLATIONS AND LAW
COMPLICATED TRANSACTION PROCEDURES
STATUTORIAL CHARGES
SUBJECT TO VARIOUSLEGISLATION SUCH AS ndash
NATIONAL LAND CODE 1965REAL PROPERTY GAINS TAX ACT 1976CONTRACT ACT 1950
AFFECT VARIOUS ASPECT OF REAL PROPERTY SUCH AS ndash
VALUE USAGE RESTRICTION ETC
INVOLVES SO MANY PROCESS THAT REQUIRE A STRICT LEGAL COMPLIANCE FOR AQUIRING PROPERTY SUCH ndash
DISCHARGE OF CHARGEREGISTRATION OF OWNERSHIPCONSENT FROM STATE AUTHORITY
SUBJECT TO VARIOUS STATUTORIAL CHARGES SUCH ASndash
QUIT RENT ASSESSMENT BUILDING MANAGEMENT FEES
9
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
MALAYSIAN PROPERTY EXPOSITION (MAPEX)
10
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull THE SUPPLY AND DEMAND OF PROPERTY IS INELASTIC IN NATURE
bull MOTIVES TO OWN PROPERTY
(I) OCCUPANCY
(II) INVESTMENT ndash LONG TERM
(III) SPECULATION ndash SHORT TERM
(IV) DEVELOPMENT
bull DETERMINATION PRICE MECHANISM ndash VENDORDEVELOPER ANDPURCHASER
PRICE DETERMINATION
INELASTIC IN SUPPLY INELASTIC IN DEMAND
PHYSICAL NATURE OF THE LAND ITSELF THE PLANNING LAWS AND SECURITY OF TENURE
NECESSARY FUNDS TO FINANCE THE PURCHASEPOTENTIAL INCOME DERIVE FROM THE PROPERTY
11
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
FACTORS INFLUENCING PRICE OF PROPERTY ndash
I THE STATE OF THE GENERAL ECONOMY
II CHANGES IN THE STRUCTURE OF THE ECONOMY AND THE ORGANIZATION OF BUSINESSES
III THE PRODUCTIVITY OF THE PROPERTY IE PRICE PER SQUARE FEET
IV GOVERNMENT INTERVENTION
V CHANGE IN THE TRANSPORT FACILITIES AND OTHER FACILITIES
VI ALTERATIONS IN THE SIZE AND STRUCTURE OF THE POPULATION
ldquoSPACE MARKETrdquo AND ldquoASSET MARKETrdquo IN TERM OF PURPOSE
PRICE DETERMINATION
SPACE MARKET ASSET MARKET
PURCHASE REAL ESTATE FORFUNCTIONAL USE OF THE PROPERTYIE TO LIVE OR WORK IT DOES NOTGENERATE INCOME
PURCHASE REAL ESTATE FORINVESTMENT AND ECONOMICALPROFIT TO GENERATE INCOME SUCHAS RENTAL
12
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
TYPES OF REAL ESTATE MARKET
1 ECONOMIC FACTORS2 GEOGRAPHICAL3 POPULATION4 PHYSICAL ASPECT5 TECHNOLOGICAL OR
BUILDING METHOD6 FASHIONS AND TRENDS7 OCCUPANCY STATUS8 DEVELOPMENT APPROVAL9 TENURE AND TITLE10 CONDITIONS OR
RESTRICTIONS11 PARTIES INVOLVED
PRICE DETERMINATION
OPEN MARKET(SUPPLY AND DEMAND)
CONTROLLED MARKET(SUBJECT TO INFLUENCE amp
DEMAND AND SUPPLY)
1 GOVERNMENT POLICIES2 NEW ECONOMIC PLAN
QUOTA ON ETHNIC GROUP PURCHASERS
3 PR1MA
13
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATIONOPEN MARKET
ECONOMICFACTORS
REGIONAL SUBJECT TO FISCAL AND MONETORY POLICIES SUCH ASSUPPLY OF MONEY AND INTEREST RATE EMPLOYMENT RATEINTERNATIONAL EXCHANGE RATE WOULD AFFECT PRICE OF MATERIALAND RAW RESOURCES
GEOGRAPHICAL LOCATION PEOPLE PREFER TO LIVE NEAR WORK PLACE UNIVERSITIESSHOPPING COMPLEXES MOSQUETOPOGRAPHY HILLTOP FLATLANDSLOPE AREACLIMATE NOT VERY SIGNIFICANT IN MALAYSIA FLOOD PRONE AREACOMMUNICATIONS GOOD RECEPTION AREASSERVICES ADD ON SERVICES GYM SECURITY POOLEXTRA CAR PARKAND PUBLIC AMENITIES
POPULATION INCREASE OF POPULATION AFFECT PROPERTY PRICE 1MAINTAIN ndash AMPLE UNDEVELOP LAND2INCREASE ndash ESTABLISHED PUBLIC AMENITIES
PHYSICAL ASPECT DESIGN MATERIAL QUALITY SPACE FACILITIES TECHNOLOGYCONSTRUCTION
TECHNOLOGICALORBUILDINGMETHOD
NEW TECHNOLOGY INVOLVES EXPERTIES FROM OVERSEAS THUSINCREASE COST EG GREEN BUILDING INDUSTRY BUILDING SYSYTEM(IBS) AND BUILDING INFORMATION MANGEMENT (BIM) TECHNOLOGY
14
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PR1MA
PERBADANAN PR1MA MALAYSIA WASESTABLISHED UNDER THE PR1MA ACT2012 TO PLAN DEVELOP CONSTRUCTAND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTSFOR MIDDLE-INCOME HOUSEHOLDS INKEY URBAN CENTRES
PR1MA HOMES COME IN VARIOUSTYPES AND SIZES WITHIN ANINTEGRATED COMMUNITY SENSIBLYDESIGNED TO SUIT DIFFERENTHOUSEHOLD NEEDS PRICED BETWEENRM100000 TO RM400000 YOU CANNOW OWN A HOME THAT IS WELLWITHIN YOUR REACH EARMARKEDFOR DEVELOPMENT IN KEY STRATEGICURBAN AREAS NATIONWIDE PR1MA ISOPEN TO ALL MALAYSIANS WITH AMONTHLY HOUSEHOLD INCOMEBETWEEN RM2500 TO RM10000
15
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INDUSTRIAL BUILDING SYSTEM (IBS)
16
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
EVOLUTION OF CONSTRUCTION DRAWING
(Bently Systems 2014 Bryde et al 2013)
2D Drawing
2D CAD 3D Visualisation BIM
bull Paperbull Scale rule bull technical pen bull pencils bull compasses
bull Auto CADbull Catiabull ProENGINEERbull CMS intelliCADbull Turbo CADbull Vectorworks
bull Sketch-upbull Solid Workbull Revit
Architecturebull Fusion 360
bull Revit Architecturebull ArchiCADbull Revit Structurebull Navisworkbull Cost-Xbull Tekla BIM sight
17
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATION
OPEN MARKET
FASHIONS ANDTRENDS
HIGH QUALITY MATERIAL AND WORKMANSHIP DEMAND FOR
HIGHER PRICE REAL ESTATE ALSO APPLIES THE PRINCIPLE
WHEN DEMAND SURPASSES SUPPLY PRICE OF THE PROPERTY
WOULD INCREASE
OCCUPANCY STATUS
OCCUPANCY AFFECT BUSINESS AND COMMERCIAL DEVELOPMENT
SELLERSrsquo MARKET MARKET IS IN UP TREND AND PROPERTY PRICE IS HIGH
SELLER CHOOSE THE PURCHASER OR TENANT
BUYERSrsquo MARKET MARKET IS IN DOWN TREND AND PROPERTY PRICE IS
DROP SELLER SEEK PURCHASER OR TENANT
DEVELOPMENT APPROVAL
DEVELOPMENT APPROVAL FROM AUTHORITY WOULD STIMULATE LOCAL ECONOMY DEVELOPER WILL DEVELOP ADJACENT AREA
TENURE FREEHOLD LAND HIGHER PRICELEASE HOLD LAND LESSER PRICE (30 60 AND 99 YEARS)
TITLE CONDITIONS RESTRICTIONS
LEGALLY BINDING CONDITIONS ATTACHED BY AUTHORITY TO THE PROPERTY EG AGRICULTURAL LAND MALAYS RESERVE
PARTIES INVOLVE
VALUER OR PROPERTY CONSULTANT PROVIDING PROFESSIONAL OPINION OF THE MARKET VALUE OF THE PROPERTYREAL ESTATE AGENTS SOURCE INFORMATION OF PRICE AND DONEGOTIATION BETWEEN VENDOR AND PURCHASER
18
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CONTROLLED MARKET
GOVERNMENT POLICIES
IN THE CURRENT LEGISLATION EVERY NEW RESIDENTIAL DEVELOPMENTREQUIRES A MINIMUM OF 30 PER CENT OF LOW OR LOW MEDIUM COSTLANDED OR FLATTED RESIDENTIALS WITH A MAXIMUM PRICE OFRM42OOOOO THE GOVERNMENT HAS ASSUMED THE ROLE OF PRICEDETERMINER BARRING THE INFLUENCE OF SUPPLY AND DEMAND IN THEOPEN MARKET
NEWECONOMICPLAN QUOTAON ETHNICGROUPPURCHASERS
1970rsquoS - NEW ECONOMIC PLAN (NEP) IS TO ERADICATE POVERTY ANDENSURING A MORE BALANCED DISTRIBUTION OF WEALTH IN THE SOCIETYTHUS THE QUOTA ON BUMIPUTRA PURCHASERS HAS BEEN IMPOSED TOENSURE THAT BUMIPUTRA BUYERS ENJOY THE PRIVILEGE OF CHOOSINGCERTAIN RESERVED BURMIPUTRA UNITS AND ENTITLED TO 5 PER CENT -10 PER CENT DISCOUNTS ON THE NORMAL SELLING PRICE
PR1MA PERBADANAN PR1MA MALAYSIA WAS ESTABLISHED UNDER THE PR1MAACT 2012 TO PLAN DEVELOP CONSTRUCT AND MAINTAIN HIGH-QUALITYHOUSING WITH LIFESTYLE CONCEPTS FOR MIDDLE-INCOME HOUSEHOLDSIN KEY URBAN CENTRES
PRICE DETERMINATION
19
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATION
METHOD OF VALUATION
EXPLANATORY STATEMENT
COMPARISON PROPERTIES COMPARED ARE SIMILAR AND IN THE SAME AREA INCOMPARING SOME FACTORS TO BE TAKEN INTO ACCOUNTPOSITION SURROUNDING AREA LOT LOCATION
INVESTMENT PROPERTIES THAT HAVE INCOME PRODUCING INVESTMENT OR FORCALCULATION BY INVESTOR SEEKS FOR NET INCOME THE CAPITAL IS INFORM OF RENTALEG RENTAL PROPERTY SHOPLOTS
COST PROPERTIES WITH SPECIAL USAGE AND YET ARE NOT USED FOR PROFITMAKING FOR EXAMPLE PROPERTY OWNED BY PUBLIC AUTHORITIES SUCHAS SCHOOLS FIRE STATIONS GOVERNMENT QUARTERS AND OTHERPROPERTIES WHICH ARE UNIQUE AND NOT COMPARABLE IN THE MARKETIT APPLY DEPRECIATED REPLACEMENT COST (DCF) METHOD ANESTIMATE MUST BE MADE OF THE COST OF REPLACING THE SITE ANDBUILDING AND THEN MAKING ANY NECESSARY ALLOWANCE FORDEPRECIATION THE SITE MUST BE VALUED BY REFERENCE TO THECONCEPT OF OPPORTUNITY COST 20
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATIONMETHOD OF VALUATION
EXPLANATORY STATEMENT
PROFIT(ACCOUNT)
COMPARABLE PROPERTY IS UNAVAILABLE EG RESTAURANTS HOTELS ORTHEATRES
THE VALUATION MAY HAVE TO BE MADE PURELY BY REFERENCE TO THEPROFITS WHICH A TENANT OF THE BUSINESS ACUMEN COULD MAKEFROM OCCUPATION OF THE PROPERTY THIS INVOLVE AN EXAMINATIONOF THE ACCOUNTS TO DETERMINE TYPICAL FIGURES FROM THE GROSSRECEIPTS WOULD BE DEDUCTED PURCHASES ALL OTHER OPERATINGCOSTS AND OVERHEAD COSTS INCLUDING AN ALLOWANCE FOR INTERESTON TENANTS CAPITAL BUT EXCLUDING ANY PAYMENTS ON THE PROPERTY
RESIDUAL VALUING DEVELOPMENT SITES AND PROPERTIES SUITABLE FORREDEVELOPMENT BY ESTIMATING THE PROJECT COST AND THE VALUECREATED INCLUDING NON IMPROVED PROPERTY
21
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATIONCOMPARISON METHOD OF VALUATION
22
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATION
THE INVESTMENT METHOD OF VALUATION
23
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATIONCOST VALUE METHOD OF VALUATION
24
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATIONTHE PROFIT METHOD OF VALUATION
25
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRICE DETERMINATION
THE RESIDUAL METHOD OF VALUATION
26
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
REAL ESTATE CYCLES
THE PRICE STILL HIGH ALTHOUGH
THE SELL OF REAL ESTATE IS
SLOWING
DURING THE FINANCIAL CRASH IT WILL AFFECT THE REAL ESTATE PRICE BUT IT NOT UP TO THE
CRASH HIGH VACANCY OF PROPERTY AND MANY
FORECLOSURE PROCEEDING
POPULATION GROWTH INDUSTRIAL DEVELOPMENT
GOVT SERVICES
REQUIRE FOR PROPERTY SUPPLY NEED TIME FOR
CONSTRUCTION PRICE ARE HIGH
PHASE WHERE PROPERTY
OUTNUMBERED RESIDENT AT PEAK REAL ESTATE PRICE AT SLOWER PHASE
GOVT INTERVENTION
GOVT INTERVENTION
GOVT INTERVENSTION IS TO ENSURE THE COUNTRY STABILITY OF REAL ESTATE MARKETEGSTAMP DUTY EXEMPTION TAX RELIEFLOW INTEREST RATE
27
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
SAMPLE OF TAX RELIEF
28
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INFLUENCE
(SYSTEMATIC RISK)
INTERNATIONAL
WORLD ECONOMY IN CRISES IT WILL AFFECT THE FOREIGNEXCHANGE THE PRICE OF RAW MATERIAL WILL GO UP THECONSUMER PRICE INDEX IS INCREASING WHICH INDICATEINFLATION THE PURCHASING POWER OF CONSUMERS ISLOW
REGIONAL
(I) LOCAL ESTABLISHMENT ndash MATURITY OF THE REAL ESTATEMARKET IT IS WHERE SUPPLY IS BALANCE WITH DEMANDTHUS THE PRICE IS STABLE AND LESS FLUCTUATE
(II) POLITICAL STABILITY ndash IT WILL AFFECT THE COUNTRYECONOMY AS A WHOLE AND ENSURE THE ACTIVE ANDPROSPEROUS ECONOMY OF THE COUNTRY
REAL ESTATE CYCLES
29
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)1970 ndash 1980bull END OF 1970 REAL PROPERTY PRICES RECOVERED FROM THE PRICE
WHICH FELL BY 30 PER CENT TO 50PER CENT DUE TO THE 13TH MAY1969 ETHNIC RIOTS (INSTABILITY OF POLITICS)
bull 1971 TO 1973 GOOD YEARS FOR THE PROPERTY MARKET DEMANDFOR RESIDENTIAL PROPERTIES INCREASED THE GOVERNMENTSINCENTIVES IN TERMS OF HOUSING LOANS TO CIVIL SERVANTS
bull DEVELOPERS WERE HAVING A GOOD TIME AND PRICES ROSE BY 10 PERCENT TO 15 PER CENT YEARLY
bull SPECULATION WAS ALSO RIFE AND INFLOW OF MONEY FROMOVERSEAS TO THIS SECTOR WAS EVIDENT
bull GOVERNMENT INTRODUCED THE LAND SPECULATION ACT TAXEDGAINS TO RESTRICT FOREIGN OWNERSHIP THIS ACT WAS LATERCHANGED TO THE REAL PROPERTY GAINS TAX ACT 1976
30
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull 1976 THE WORLD RECESSION AND THE CYCLE DECLINED UNTIL ITREACHED THE BOTTOM
bull 1978 THE MARKET WAS BEARISH AND PRICES RISING SLIGHTLY
bull 1979 SAW SOME PICK- UP IN PRICES AND THIS TREND IMPROVEDUNTIL 1980
1980 ndash 1990bull 1980 AND 1981 AN UPWARD PROPERTY PRICE MOVEMENT IN THE
SECTORS OF OFFICE RETAIL AS WELL AS RESIDENTIAL
bull 1983 PRICES WERE ACTUALLY LEVEL AND THIS CAN BE SEEN FROMOVERSUPPLIES OF OFFICE SPACE RETAIL SPACE AND HOUSING STOCK
bull 1984 ACTIVITIES IN REAL ESTATE SLOWED DOWN DUE TO OVERSUPPLY FOLLOWED BY A FEELING OF NO CONFIDENCE HIGH INTERESTRATE SLUGGISH WORLD COMMODITY MARKETS AND RECESSION ANDTIGHT LIQUIDITY SITUATION
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
31
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull 1984 TO 1987 THE SHARE MARKET COLLAPSED DUE TO SCANDALS OFCRIMINAL BREACH OF TRUST FEW BANKS WOUND UP
bull 1986 THE GOVERNMENT MADE AN EFFORT TO ENCOURAGE FOREIGNINVESTMENT IN MALAYSIA OTHER EFFORTS WERE ALSO MADE WHICHWERE TO PROMOTE MALAYSIA AS A TOURISM AND INDUSTRIALCENTER BANKS WERE ASKED TO LOWER BASE LENDING RATE ANDAMENDMENT TO LAWS RELATED TO REAL ESTATE
bull 1989 MARKED THE BEGINNING OF ANOTHER BOOM IN THEPROPERTY MARKET WHICH CONTINUED INTO 1990 AND 1991
1990 ndash 2000bull LAST QUARTER OF 1992 SLOWING DOWN IN DEMAND IN THE
PROPERTY MARKET OVERALL THE VOLUME OF TRANSACTIONSINCREASED BUT AT A REDUCED RATE THIS SCENARIO CONTINUEDUNTIL 1993 THE PROPERTY MARKET SECTOR EXPERIENCED A STRONGDEMAND UNTIL 1996
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
32
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull 1997 - 1998 WAS A MIXED YEAR THE SLOW ECONOMY GROWTHOF THE PAST FEW YEARS WITH UNCERTAINTIES AND PRICES ANDRENTALS FELL DRASTICALLY AND THE MARKET CONFIDENCEWEAKENED
bull 1999 THE ECONOMY WAS RECOVERING DUE TO THEGOVERNMENTS COMPREHENSIVE MEASURES AND SHOWED AMORE OPTIMISTIC PROPERTY MARKET
CASE STUDY ON MARKET CYCLE OF MAJOR REAL ESTATE IN KUALA LUMPUR
(1970 -2000)
33
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PRESENT CYCLE
34
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
RISK ELEMENTS
ECONOMIC INVESTMENT
RISKS
BUILDINGS LEGAL GOVERNMENT POLICY
INTERNATIONAL
REGIONAL
CYCLE ANDSUPPLY DEMAND
GOVERNMENTPOLICY
VALUEDEPRECIATION
EXPECTEDNORMAL WEAR ampTEAR
UNEXPECTEDNATURES ACTS
LACK OFMAINTENANCELOWCONSTRUCTIONQUALITY
LANDACQUISITION
EGDEVELOPMENTOF KLIA ANDPUTRAJAYA
NEW ZONINGCAUSING THEVALUE TO DROP(IT COULD ALSOINCREASE THEVALUE)
NEW STRUCTUREPLAN
THEDEVELOPMENTBLUE PRINTPREPARED BY THELOCALAUTHORITYNORMALLY FOR APERIOD OF 15 TO20 YEARS 35
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
RISK ELEMENTS HIGHLAND TOWERSTHE HIGHLAND TOWERS CONSIST OF THREE12-STOREY BLOCKS BUILT IN PHASESBETWEEN 1974 AND 1982 AT THE WESTERNBASE OF A STEEPLY SLOPED HILL WHICH WASLATER TERRACED EXTENSIVELY IN THE EARLY1980S THE HIGHLAND TOWERS COLLAPSE ON11 DECEMBER 1993 IN THE COLLAPSE OFBLOCK ONE OF THE APARTMENTS CAUSEDTHE DEATHS OF 48 PEOPLE AND LED TO THECOMPLETE EVACUATION OF THE REMAININGTWO BLOCKS DUE TO SAFETY CONCERNS
BUKIT ANTARABANGSASLOPE FAILURE WHICH OCCURRED ON 6 DECEMBER2008 AT BUKIT ANTARABANGSA HAS CAUSEDMORTALITIES AND LOSS OF PROPERTIES AS MORETHAN 20 HOUSES WERE FLATTENED IT WAS HEAVILYDOWNPOURED FOR A FEW HOURS THAT INCREASEDTHE SOIL SATURATION AND PLASTICITY PROPERTIESANALYSIS OF PHYSICAL SOILS PROPERTIES SHOWSTHAT SOIL TEXTURE WAS DOMINATED BY SANDY SOILWITH RELATIVELY HIGH PERCENTAGE OF SAND
36
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
LAW RELATING TO REAL ESTATES
bull THE MALAY STATES LAND LAW WAS BASED ON ADATlsquo ALL LAND WASVESTED IN THE RULER WHO IN RETURN FOR A TENTH OF THEPRODUCE OF THE LAND AND CERTAIN FORCED LABOUR SERVICESGRANTED A RIGHT TO HIS SUBJECTS TO OCCUPY AND CULTIVATE THELAND
bull UNDER BRITISH AND THE RESIDENCY SYSTEM OF GOVERNMENTPENANG AND MELAKA (THE STRAITS SETTLEMENTS) AT FIRSTADOPTED ENGLISH LAND LAW
bull IN 1850 THE FEDERATED MALAY STATES NAMELY PAHANG PERAKNEGERI SEMBILAN AND SELANGOR ADOPTED VARIOUSREGISTRATION OF TITLES ENACTMENT WHICH WERE BASED ONTORRENT SYSTEM WHICH ESSENTIAL CONCEPT OF REGISTRATIONWAS NECESSARY TO PRODUCE A TITLE
bull IN 1928 IT BECAME THE ESTABLISED LAND CODE REGISTRATION WASEVERYTHING UNDER THIS SYSTEM 37
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
NATIONAL LAND CODE 1965 (NLC)
TOWN AND COUNTRY PLANNING ACT 1976
LOCAL GOVERNMENT ACT 1976
1ST JANUARY 1965
THE PRINCIPAL LAND LAW INPENINSULAR MALAYSIAALL THE STATES INPENINSULAR MALAYSIAHAVE THEIR OWNRESPECTIVE STATE LANDRULES
OBJECTIVE TO ENSUREUNIFORMITY OF LAW ANDPOLICY WITH RESPECT TOLAND MATTERS
DOES NOT APPLY TO SABAHamp SARAWAK
PLANNING FOR LAND USE INIT FORMULATES THE POLICYAND GENERAL PROPOSALSOF THE LOCAL PLANNINGAUTHORITY FOR THEDEVELOPMENT AND USE OFLAND IN THE AREA
ASSESSMENT TAX ISCOLLECTED BY THE LOCALAUTHORITIES FOR THEPROVISION OF SERVICES TOTHE RESIDENTSASSESSMENT TAX ISUSUALLY COLLECTED TWICEA YEAR WITH A PENALTY FEEFOR LATE PAYMENTS
LAW RELATING TO REAL ESTATES
38
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
REAL PROPERTY GAINS TAX (RPGT)
STAMP DUTY ACT 1949 STRATA TITLE ACT 1985
INTRODUCED IN 1975 ASTAX ON CAPITAL GAINSFROM THE DISPOSAL OFPROPERTIES BOTH THEDISPOSER AND THEACQUIRER OF AN ASSETMUST GIVE NOTICE TOINLAND REVENUEDEPARTMENT (IRD) WITHINTHIRTY DAYS FOLLOWINGTHE CONCLUSION OF ANAGREEMENT FOR THEDISPOSAL OF THE ASSET
THE ASSESSMENT ANDCOLLECTION OF STAMPDUTIES IS SANCTIONED BYSTATUTORY LAW AND ISDESCRIBED AS THE STAMPACT 1949 STAMP DUTY ISLEVIED ON TRANSACTIONINVOLVING LAND MATTERSIN FORM OF AD VALOREM
1ST JUNE 1985
LAW IN RELATION TOSTRATA TITLES
HOUSING DEVELOPMENT (CONTROL AND LICENSING)
ACT 1966
TO PROVIDE FOR THECONTROL AND LICENSINGOF THE BUSINESS OFHOUSING DEVELOPMENT INPENINSULAR MALAYSIA THEPROTECTION OF THEINTEREST OF PURCHASER
LAW RELATING TO REAL ESTATES
39
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
PROCESS OF ACQUIRING PROPERTYDEVELOPER VENDOR
1 DO SEARCH ON THE DEVELOPER TRACKRECORD
2 SIGN SALE AND PURCHASE amp PAY 10DEPOSITbull LINK HOUSE ndash 24 MONTHS
COMPLETIONbull APARTMENT ndash 36 MONTHS
COMPLETION3 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM DEVELOPERIF NOT GETTING FINANCING IN TIME
4 REGISTER FINANCING SECURITY DOCAND TRANSFER OF PROPERTY AT LANDOFFICE
5 DISBURSEMENT OF FINANCING FROMBANK TO DEVELOPER
6 DO INSPECTION AFTER HAND OVER OFVACANT POSSESSION
7 DEFECT LIABILITY PERIOD ndash 12 MONTHS8 IF DELAY FOR COMPLETION ndash FILE
COMPLAINT AT HOUSING TRIBUNAL
1 DO LAND SEARCH AT LAND OFFICE2 SIGN SALE AND PURCHASE AGREEMENT
amp PAY 10 DEPOSIT3 REGISTER PRIVATE CAVEAT4 GET FINANCING REQUEST FOR
EXTENSION OF TIME FROM VENDOR IFNOT GETTING FINANCING IN TIME
5 WITHDRAW THE PRIVATE CAVEAT6 REGISTER FINANCING SECURITY DOC
AND TRANSFER OF PROPERTY AT LANDOFFICE
7 SETTLE THE BALANCE OF THEPURCHASE PRICE
40
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
I-REIT REIT
41
bull ISLAMIC REAL ESTATE INVESTMENT TRUSTS OR I-REITS ARE COLLECTIVEINVESTMENT VEHICLES (TYPICALLY IN THE FORM OF TRUST FUNDS)WHICH POOL MONEY FROM INVESTORS AND USE THIS POOLED CAPITALTO BUY MANAGE AND SELL REAL ESTATE I-REITS PROVIDE A NEWINVESTMENT OPPORTUNITY FOR THOSE WHO WISH TO INVEST IN REALESTATE THROUGH SHARIAH-COMPL IANT CAPITAL MARKETINSTRUMENTS
bull THE OBJECTIVE IS TO OBTAIN REASONABLE INVESTMENT RETURNSGENERATED FROM THE RENTAL INCOME ANY CAPITAL APPRECIATIONWHICH COMES FROM HOLDING THE REAL ESTATE OVER THE
bull UNIT HOLDERS WILL RECEIVE THEIR RETURNS IN THE FOM OF ORDISTRIBUTION AND CAPITAL GAINS FOR THE HOLDING PERIOD
bull THE REAL ETATE THAT I-REITS INVEST IN INCLUDES RESIDENTIAL ORCOMMERCIAL BUILDINGS RETAIL OR INDUSTRIAL LOTS OR OTHER REALASETS SUCH AS SHARES IN PUBLIC-LISTED PROPERFY COMPANIES ANDLISTED OR UNLISTED ISLAMIC SECURITIES OF PROPERTY COMPANIES
bull THE WORKINGS OF I-REITS ARE I IKE ANY OTHER TRUST FUND
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull THE FIRST ASIAN COUNTRY TO DEVELOP I-REIT IS MALAYSIA MALAYSIADEVELOPS I-REIT AS A VALUABLE INDIRECT REAL ESTATE INVESTMENTVEHICLE IN 1989 ASIAN COUNTRIES LIKE JAPAN SINGAPORE AND KOREAONLY NOW ARE BEGINNING TO ESTABLISH REIT MARKETS AFTER THECONSEQUENCE OF 1997 ASIAN FINANCIAL CRISIS THE NUMBERS OFLISTED PROPERTY COMPANIES HAVE DOUBLED IN NUMBERS ON THEPROPERTY SECTOR OF THE KUALA LUMPUR STOCK EXCHANGE (KLSE)NOWADAYS
bull ARAB MALAYSIA FIRST PROPERTY WAS INTRODUCED IN SEPTEMBER 1989IT IS MALAYSIAS PRIMARY REAL ESTATE INVESTMENT TRUST WITHFURTHER REAL ESTATE INVESTMENT TRUSTS AND FOLLOWS BYAMANAHHARTA TANAH PNB IN DECEMBER 1990 NO FURTHER REALESTATE INVESTMENT TRUSTS WERE LISTED UNTIL AMANAH HARTA TANAHPNB2 IN 1997
42
I-REIT REIT
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
43
I-REIT REIT
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
44
I-REIT REIT
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CASE STUDY WOULD YOU LIVE HERE
45
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CASE STUDY WOULD YOU LIVE HERE
46
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CASE STUDY WOULD YOU LIVE HERE
47
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
SELLING POINTS
COMPRISES 2 BLOCKS OF 26-STOREY TOWER VRESIDENCE IS A LOWDENSITY RESIDENTIAL DEVELOPMENT WITH A TOTAL OF MERELY 268CONDOMINIUM UNITS SPRAWLING MORE THAN 4 ACRES LAND ANDADJACENT TO A 3 ACRES LAKE PARK STRATEGICALLY LOCATED AT THEINTERNATIONALLY REKNOWNED CYBERJAYA CITY THE INTELLIGENT CITYAND THE HEART OF MULTIMEDIA SUPER CORRIDOR OF MALAYSIA IT ISEASILY ACCESSIBLE TO THE MAJOR HIGHWAYS AND BYWAYS LIKE SKVELDP MAJU EXPRESSWAY ELITE HIGHWAY AND KL-SEREMBAN HIGHWAY ITIS ALSO SITED MERELY 2 KM AWAY FROM LIMKOKWING UNIVERSITYCOLLEGE OF CREATIVITY AND 5KM AWAY FROM MMU 25KM FROM KLIAAND 30KM FROM KL CITY WITH ONLY 6 UNITS PER FLOOR IN EACHTOWER THE CONDOMINIUM UNITS ARE COME WITH THE CHOICES OFBALCONY OR LANAI AND 3 TO 5 BEDROOMS DESIGN RANGING FROM1373 SQFT IN BUILT-UP AREA AS WELL AS THE SKY GARDEN IN THEALTERNATE FLOOR WHATS MORE IT ALSO COMES WITH SPECTACULARAND FACINATING SKYLINE VIEWS OF PUTRAJAYA AND CYBERJAYA
CASE STUDY WOULD YOU LIVE HERE
48
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
bull PROJECT VRESIDENCE
bull DEVELOPER MACVILLA SDN BHD
bull STATUS OF LAND LEASEHOLD 99 YEARS
bull ENCUMBRANCES MALAYAN BANKING BERHAD
bull PRICE RM600000 TO RM18MILLION
bull 7 DISCOUNT FOR BUMIPUTRA
bull 268 UNITS OF CONDOMINIUM 2 BLOCKS OF 26 STOREY TOWER
bull CONSIDERATION BEFORE PURCHASING
1THE BUILDING IS BUILT ON SLOPE AREA
2268 UNITS ndash IS CONSIDERED AS HIGH DENSITY AND POPULATION
3CLOSE TO ELECTRICITY GRID TRANSMISSION TOWER
4ACCESS TO MAIN ROAD ndash RELATIVELY NARROW AND ONE EXIT ONLY
5NEAR TO MOSQUE
6COMMUNITY FACILITIES
7SURROUNDING AREA AND TYPES OF LAND EG TIN MINING LAND RECLAIM AREA
8COMMUNICATION COVERAGE
9EXPOSURE TO SUN LIGHT
CASE STUDY WOULD YOU LIVE HERE
49
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
CONCLUSION
bull PRICE OF REAL ESTATE VARIES ACCORDING TO THELOCALITY TYPES SURROUNDING AREA COMMUNITYGOVT POLICY AND OTHER FACTORS (RM4200000 ndashUSD 1 BIL AND INFINITY)
bull THOUGH THE PRICE OF PROPERTY TEND TO RESPONSETO ECONOMIC DOWNTURN BUT EVENTUALLY IT WILLREBOUND
bull REAL ESTATE SERVES VARIOUS FUNCTION ANDPURPOSE ndash
1 PLACE OF STAY
2 INVESTMENT
3 SECURITY FOR FINANCING
4 IBADAH SUCH AS WAQF WASIYYAH INFAQ
5 PERSONAL SAFETY AND SECURITY
bull REAL ESTATE EXPOSED TO VARIOUS RISK THUS IT ISIMPORTANT TO TAKE TRANSFER OF RISK MEASURE IETAKAFUL
bull PERSONAL ADVISE BUY PROPERTY FIRSThellip50
WORLDrsquoS LARGEST AND MOSTEXPENSIVE FAMILY HOMECOMPLETED
THE ANTILLA IS IN FACT A $1 BILLIONFAMILY HOME BUILT FOR INDIArsquoSRICHEST MAN (AND FORBESrsquoFOURTH RICHEST MAN) MUKESHAMBANI HIS WIFE AND THREECHILDREN THE TOWER WOULD INFACT HOLD 60-STORIES THE AMBANIFAMILY HAS EMPLOYED A STAFF OF600 TO TEND TO THE HOME
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
INVESTMENT IN REAL ESTATE IS NOTNEWhellipAND IT MAY LEAD TO SOMETHINGELSE
51
52
52