South East Asia Property

South Korea’s finance minister apologized Wednesday for the failure of the government’s real estate policy.In a press conference, Minister of Finance and Economy Kwon O-kyu unveiled another set of measures to cool down the real estate market.

“I would like to take this opportunity to apologize to the public and the people who do not own houses for the recent surge in housing prices,” Kwon told the nationally televised news conference also joined by economy-related ministers. Kwon is in charge of the country’s economic policy as deputy prime minister.

Under the new package, the government would toughen rules on home-backed lending and build more homes. “The government will focus policy capabilities on supplying quality homes at cheap prices, in large quantity and at a speedy pace,” Kwon said.

He expressed confidence the new measures would cool down the hot real estate market, saying: “It is highly risky to buy a new home at present using borrowed money.”

The government has been under fire for the failure of curbing skyrocketing house prices, which caused concerns about the possible bursting of a real estate bubble. On Tuesday, Construction Minister Chu Byung-jik and two presidential officials in charge offered to resign.
Source: UPL

Vietnam’s real estate market is picking up steam as the country moves towards admission into the World Trade Organisation (WTO), according to industry insiders.

The number of real estate transactions in the third quarter of the year increased 20% over the first six months of the year, and 25% over the same period last year. The trend indicates that the domestic real estate market is recovering from its long slump.

The prospect of a WTO safety net has inspired new waves of foreign investment in Vietnam, reviving the dormant property market.

“The news of Vietnam’s upcoming WTO membership has spread both at home and abroad,” said Tran Trong Hieu, director of the International Urban Development and Investment Co. “This has helped wipe out many foreign investors’ doubts about the country’s legal system.”

“Those of us involved in investment brokerage began to feel a higher comfort level from foreign
investors after Vietnam’s likely WTO accession was announced,” said Vu Quang Hien, director of the Property Management and Consulting Joint Stock Co (Citiplus).

As real estate investment requires large volumes of capital, investors want the government to ensure the security of their investments and protect their interests, Hien explained.

“When Vietnam joins the WTO, the country will have to abide by international rules that make investment safer,” he said.

Do Thi Loan, general secretary of the Ho Chi Minh City Real Estate Association, said that her association alone had received more than 20 delegations this year from such countries and territories as South Korea, the US, Australia, China, Singapore, Hong Kong and Taiwan.

Most were highly interested in real estate in Vietnam, particularly in major cities, said Loan, and many memoranda of understanding have been signed to develop office buildings, luxury apartments, shopping centres and housing for low-income earners.

Many foreign-invested real estate development projects that have been stalled for some years during the recent slump in the market have recovered on the new foreign investor confidence.

Nguyen Duc Kiet, deputy general director of Hong Kong´s Larkhall Group, said the group received an investment license from the Vietnamese Ministry of Planning and Investment (MPI) in 1997, and planned to set up a joint venture with a Vietnamese partner to build an office building in HCM City.
Following the 1997 Asian financial crisis, the project stalled and did not resume until 2005, Kiet said, at which time Larkhall became the sole investor.

“Investment in the project has grown from US$62 million in 1997 to US$125 million at present,” he said. “The scheduled completion date is now in 2008.” Truong Ngoc Dieu, administrative director of the Happy Square project of Taiwan’s Fei Yeul Group, said the group was licensed by the MPI to set up a joint venture with a Vietnamese company in 1995 to build a $468 million complex which would have included an office building, a hotel and a shopping centre, but the project was postponed.

Development resumed in mid-2006 solely under the Fei Yeul Group without the participation of domestic partners.

Many new projects were also being developed, including the Gold Sai Gon Plaza, a joint venture with a Taiwanese company, and Sai Gon Sport City, fully funded by Singapore’s Keppel Lang. The Phu My Hung joint venture also planned a $16 million project to build an additional million square metres of apartments by 2010.

Real estate market experts believed that demand for office and apartment space would mushroom following WTO accession.

“We have received many investors from Tokyo, Singapore and Malaysia who have come to us expressing their desire to invest in Ho Chi Minh City property,” said MarcTownsend, CB Richard Ellis (CBRE) managing director.

Retail shopping centres have also attracted the attention of many investors, said Richard Leech, director of CBRE’s Hanoi office. Many new retail centres such as Hon Ngoc Viet in Nha Trang, the Opera in Hanoi and Hum Ho-Sai Gon in Ho Chi Minh City were under construction, he noted.

Market experts said that land suitable for the construction of large projects has become rare, creating opportunities for some domestic investors to sell or lease land use rights initially obtained for now-failed projects. Sensing the demand, the Asian Commercial Bank’s real estate company last week opened a property transaction floor in Ho Chi Minh City.

Source: Asia Property Report

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A poll taken by Sama Dubai (a Dubai real estate developer) at the MIPIM Asia expo in Hong Kong had the following interesting Asian property stats:

  • The predicted potential growth prospects in India were the highest at 38 per cent due to a residential housing shortage of 60 million units & development of 4.3 million square metres of commercial property in the next 24 months. The hotspots cities identified were Chandigarh, Chennai and Kolkata.
  • At second place was the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia & UAE) with an anticipated growth rate of 34 per cent
  • Coming at the third place was China with an expected real estate growth rate of 28 per cent (and a forecasted economic growth of 9.9 per cent by the World Bank)
  • Other strong growth prospects were in Hong Kong, Singapore, Korea, Malaysia and Taiwan

Asian countries currently attracting the highest foreign direct investment:

China – 35 per cent
India – 33 per cent
Japan – 12 per cent
GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia & UAE) – 12 per cent
Australia – 6 per cent
Korea – 2 per cent

Top three key factors for international real estate investment decision making:

  1. Market conditions
  2. Micro and macro economic factors and
  3. Rental prospects

The commercial property price growth in Dubai from 2004 to 2006 was 200 per cent.

Read the full article here

Pakistan has given a Dubai property firm the go-ahead for a $43bn (£22.8bn) project to develop two island resorts.

Emaar Properties, one of the United Arab Emirates’ biggest property firms, will have an 85% share in the 13-year project to develop Bundal and Buddo.

Emaar plans to develop the site near Karachi into a model city with homes, apartments, offices and theme parks.

“It will be just like another Dubai,” Ashfaque Hasan Khan, an adviser to the prime minister said.

“We want to build it because it will create new jobs, bring in investment, create new housing and a new city,” he added.

Pakistan’s Port Qasim Authority will hold the remaining 15% stake in the enterprise in the form of land, the government said.

So far the plans have been approved in principle. Legal documents are expected to be completed within three months.

Emaar – the UAE’s biggest property firm by market value – plans to build thousands of homes, schools, shopping malls and hospitals stretching from Morocco to India.

Source: BBC

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SINGAPORE (Kyodo) CapitaLand Ltd., Southeast Asia’s largest listed property developer, is poised to sharply expand its business in Japan as the economy has effectively overcome deflation, a symbol of its decade-long slump.The Singapore-based real estate giant plans to up the number of shopping malls it operates in Japan to 15 or 20 from four in two years, said Pua Seck Guan, the chief executive officer of CapitaLand Retail Ltd., the retail property business unit of CapitaLand.

In value terms, the size of these commercial investments would quadruple to 147.0 billion yen from 39.1 billion yen.

“Japan’s economy has bounced back, which gives investors confidence,” Pua said. “We believe the long-term potential of Japan is there.”

Pua cited increased consumption propelled by Japan’s sustained economic recovery, which looks certain in November to become the longest continuous expansion since World War II.

“Since Japan is one of the largest investment markets in the world, we cannot ignore it,” he said in an interview, adding that CapitaLand operates in 80 major cities in 20 countries. “Besides, it gives us sufficient return.”

CapitaLand said it has acquired 13 rental apartment properties in Japan this year, bringing to 18 the total number it holds in the nation.

With the increase, CapitaLand has committed 75 percent of 30 billion yen worth of investment in the rental apartment field, a target it set when launching its rental apartment business in Japan in May 2005 with Bahrain-based Arcapita Bank, with an eye to drawing oil money from the Middle East.

CapitaLand said it will further raise its target portfolio size to 42 billion yen within a year, with the number of properties rising accordingly, as it sees greater profits from rent when land prices in Japan show signs of bottoming out in not only big cities but some regional areas.

According to Japanese government data, residential and commercial land prices in Tokyo rose last year for the first time in 15 years, a sign the country’s asset deflation may finally have come to an end. In July, the Cabinet Office dropped the word “deflation” from its monthly economic report for the first time in five years.

To facilitate CapitaLand’s business expansion in Japan — both through acquiring existing assets and developing new ones — Pua said the company is exploring local partnership opportunities, especially with retailers.

For the rental apartment business, CapitaLand already has a Japanese partner, Samty Co., an Osaka-based real estate company, making it easier for CapitaLand to boost business in the field, especially in the Kansai region.

In China, CapitaLand has partnerships with Beijing Hualian Group Investment Holding Co., the country’s sixth-largest retailer, and Shenzhen International Trust & Investment Co. to build malls anchored by Wal-Mart Stores Inc. of the U.S. in provincial cities across China.

“We want that we can secure certain relationships or tieups in Japan like what we’ve been dealing with in China, so we can increase the speed of expanding our portfolio size” in Japan, said Pua, who doubles as CEO of CapitaMall Trust Management Ltd., which manages Singapore’s largest real estate investment trust by asset size.

Source: Japan Times Online

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An unwelcome combination of political uncertainty, soaring oil prices and high interest rates is forcing developers of top-end Bangkok housing estates to cut prices and reassess business strategies.

Industry insiders forecast that developers of luxury housing will likely cut prices by 5 to 10% in the second half. The price cuts would affect units valued at Bt7million and up.

The shrinking demand for housing has led to oversupply, with many developers have been forced to freeze projects. Commercial banks have also become more cautious in offering mortgage loans.

Visanu Thepcharoen, chief executive of luxury developer Nusasiri Co Ltd, said the company had frozen new housing projects and shifted its focus to ensuring current projects were ready for buyers to move into as soon as possible.

He said that 340-rai project on Rama II Road has been frozen, adding that Nusasiri had seven luxury housing projects in Bangkok with average prices of more than Bt10 million per unit.

He said that political and economic uncertainty has been shrinking demand, particularly for units prices Bt10 million and up. Nusasiri’s monthly sales of luxury housing units has dropped from about Bt500 million to about Bt200 million.

He added the company had frozen spending on public relations and marketing and would focus on promotional events within a six-kilometre radius of each housing project.

The company has adjusted its strategy from pre-sale activities before building the houses to making fully finished houses at existing projects and then selling them to customers, he said. Visanu added the company still has unsold housing units at some locations, including 10 units in its Udomsuk project, about five units in its Bang Na project and about 30 units in its Sathorn-Pinklao project.

Visanu said the company will also shift its focus to developing its new hotels and serviced apartments in Pattaya and Phuket, which are expected to generate higher and more immediate returns.

Land & Houses Plc, (LH) the country’s largest residential developer, has cut its 2006 revenue growth target to zero from 10%

“LH expected consumers to continue tightening their belts for the rest of the year,” said Adisorn Thananan-narapool, senior executive vice-president. “First-half sales were lower than a year ago.”
Fourteen analysts polled by Reuters Estimates forecast a 2.5% dip in the company’s 2006 sales to 22.2 billion baht, but an 8% rise to 23.9 billion baht next year.

In the first quarter, LH reported a larger-than-expected 33% fall in net profit.

Mr Adisorn said that LH would proceed with eight or nine new projects this year, mostly detached homes, worth a total of Bt10 billion and funded with cash.

Source: Asia Property Report

Pattaya Originally uploaded by yangon.

Pattaya is the jewel in the eastern development crown, but it’s by no means the only diamond in the rough. Developments in locales such as Jomtien, Sahathip, Pratumnak Hill and Mabrachan Lake are providing good investment opportunities…

… And with a new international airport opening just 40 minutes away, one could say that the sky is the limit for the sheer size and scale of future Pattaya property developments, and the international agents that wheel and deal them.

Spotlighted in countless local and international publications, the potential for property investment on the eastern seaboard is attracting an increasing amount of attention. With the bursting of Thailand’s property bubble in 1997, the market was pretty cool for several years thereafter, but the past half-decade has seen some tremendous growth potential.

“International agents are very interested in this area,” said Roland Steiner of Siam Royal View Projects. “The problem is that most projects are too small for an international agent to get involved with. They have a long lead time for sales and typically, good projects are sold out before those agents have had a chance to respond.” Mr. Steiner went on to say that this trend was telling: the internet remains the primary tool for overseas agents to research potential investments, but even the bang of instant knowledge at their fingertips doesn’t seem to let them in on the game fast enough to scoop the locals.

Henri Young from Raimon Land agrees that international agents are starting to take a greater interest in the area. “Overseas agents are only just starting to pick up on this market,” he says. “Previously, they channelled their efforts towards Phuket, but the positive press, scale of projects and potential for growth has lured them into the market. This should help educate and attract more international prospects.”

That being said, with the economy emerging from a long slumber, developments in the region will most definitely start to grow in size, as will the time and money spent by foreign agents in ensuring that they’re able to stake their claim. David Gray of East Coast Real Estate echoes the sentiment.

“The area is starting to attract a lot of attention, especially from big agents like CBRE, Jones Lang LaSalle and others,” he explained. “Many of them are doing business in this area but don’t yet have offices here, which will change over the next little while.”

Walking around the town, it’s easy to see that there’s a large contingent of companies ready to dive into the lucrative, expanding market. Sales agents and property companies are nearly as easy to spot as 7-11’s. It’s clearly a market rife with companies waiting for the coming influx of cash.

It was to be expected after all, for every success story in Thailand, be it movies or fashion or restaurants, there are five others that crowd onto the bandwagon, often without meeting the minimum requirements that others spend so much time attaining.

“When we started here ten years ago, there were three main property companies, ours included,” says Gray. “But now, there are over 120 of them, all jockeying for slimmer and slimmer pieces of the pie.”

Engaging in casual, chew-the-fat type of conversation with people involved in the area’s industry leads one to believe that of this large number of property offices, few are capable of navigating the treacherous waters of the property market. Probably about 90 percent of the companies in the area are seen as “cowboy” entities, there to get as much as they can, as quickly as they can. In this regard, the ingress of international “big boys” setting up shops in town will probably be looked upon as a blessing.

In response to this question, Gray says: “In order to compete with these guys, you need professional service that offers the right properties, the right contracts, the right prices and the right commissions. I think that within the next few years, many of these smaller, less professional operations will be gone. It will give the industry the professional edge that it needs to maintain in order to thrive.”

Indeed, ten years ago when Gray set up East Coast Properties, the market for lavish, expensive condos simply didn’t exist. Pattaya was a boom town, but the property influx that was to define it for the new century was years away.

“A new breed of developers has appeared with the emergence of the high-end Pattaya market,” said Steiner. “High end constitutes properties that cost 10 million Baht or more. This market segment did not exist 5 years ago.”

One of the clearest examples of the new trend in high-end living is La Royale Beach, a new project being managed by Wise Power Group. The 34-story tower on the Jomtien side of town boasts its own private beach, jogging track, underground parking and a host of other tweaks and amenities that make it a first class property. And the view is excellent.

“I’ve worked with many five and six star hotels and top-tier condos in Hong Kong, and I have a lot of experience with what works, what doesn’t work and what tenants expect,” says Wise Power Group Chairman Eric Lai. “I made a very conscious effort to take what I’ve learned and apply it to La Royale to make sure that we develop nothing less than a first-class environment.”

Gray, whose East Coast Real Estate is the sole vendor for La Royale Beach, says that it’s his single biggest project right now. “We’ve sold over 75 percent of the units there, which represents over 1 billion baht for that project alone.”

This is only the latest of what will surely become a trend in first class properties catering to those willing to dig deep to buy that kind of lifestyle but will sales levels eventually come back down to less lofty heights?

In Steiner’s opinion, things look like they’ll stay peachy into the near future. “The condo market anywhere is very cyclical due to oversupply situations, which makes it more competitive and risky,” he said. “Smaller houses in the 2 to 6 million baht range are being stamped out 100 to 300 units at a time, so oversupply is definitely possible in that market. But many high-end projects are quite small 5 to 30 units  which are bought and then built, so it’s hard to have an oversupply in this situation.”

But Pattaya isn’t a self-supporting economy, sequestered from the rest of Thailand; the two are linked. Keep in mind that over 80 percent of housing units in this area are bought by Thai buyers, who are a product of the economy. Growth here is a direct mirror of economic growth in general, and we all know how quickly that can change.

Driving down the first beach road in Jomtien it’s strange to think that in several years, the entire area will be likely be spiked with high-rise condos offering views that would make Donald Trump pine for a spot on the waiting list.

“I think that Jomtien will be the next “hotspot” for the region, if they do it right,” answered Gray when asked where developments will start springing up next. â”If they go in with the right planning and infrastructure, you’ll see big developments there for years to come. It’s got 7 km of beach and miles upon miles of land that’s just empty. There is huge potential.” Grey went on to suggest other prime areas around town include Pratumnak hill, which is mostly smaller, residential developments, and Mabrachan Lake, as it has easy access to motorways amid a tranquil setting. He explained that these two areas simply don’t have room to support massive, sky-scraping towers of steel and glass – and that may be a good thing.

In spite of everyone’s love for luxury, there’s still only so much a person can use. Gray, despite representing many of these large pieces of property, sees a time when buyers will tire of them and look to invest in smaller, cosier places to live. “I think that’s what we’ll start to see more of eventually, because many of these huge spaces are just too big,” he said. “You don’t need an extra 20sqm of space for a sofa.”

This is a fair assumption to make. Although several massive projects have already been planned for Jomtien, one can imagine that land prices out this way are still reasonable enough to warrant smaller, more personal spaces that still provide a return on investment. An example of this on Pattaya beach is the View Talay Condominium project, a 26-story condo offering mainly studio and one bedroom units that many think will be quite successful. Steiner seems to agree, echoing Gray’s comments when he says that the market in Pattaya is being driven by a growing Thai middle class, taking up most of the properties in the 2 to 6 million baht range, and they’re growing fast.

Mr. Young and Raimon Land has bet big that the Wong-amat beachfront will be a desirable location that will draw investors to North Pattaya for their Northpoint development. “Wong-amat offers a more peaceful alternative to Central Pattaya and Jomtien with a distinguished heritage, relative proximity to Bangkok and superior beachfront,” he said. He also adds that the Raimon Land research shows that demand will stay high for some time to come.

“Our pre-sales interest in Northpoint indicates that several qualified buyers are scouting the market,” he said. “Also, geographically speaking, there are still some good sites in and around Pattaya and while niche and price driven locations will continue to emerge, the main draw card will still be the city itself.”

The biggest change that the region has ever seen will arrive shortly, with the opening of the Suvarnabhumi International Airport. Depending on whom you believe, the airport will either open this June, this July or this December, but no matter which month it is, it will undoubtedly have a tremendous effect on the area, transforming it nearly overnight. Mr. Young recently toured the facility and came away impressed. “Our tour revealed a tremendous facility with a credible ‘wow’ factor. We’re looking forward to its opening.”

But it’s not just Pattaya that will profit from the new airport. The surrounding areas will get an injection of cash and opportunity as well. Steiner says that with the new airport, buyers will be ready to venture down not just as far as Rayong, but Maptaput and Laemchabang ports.

He also sees Koh Chang benefiting from the new air link and is hoping to take advantage of the island’s proximity to the airport with Siam Royal View’s development there (as well as the one in Pattaya). “It’s conceivable that you could be in downtown Pattaya faster than you could be in downtown Bangkok. Just compare the lifestyles,” he says with the authority of someone who’s maybe had a bit too much of big cities.

Gray agrees that things will change drastically once the planes start landing. “You have industrial ports, deep sea zones, tourism and schools. I think a lot of companies will relocate from Bangkok to here. With the planned high-speed rail link it’ll make the whole commute a pretty painless experience.”

“It will be faster to get to Koh Chang from the new airport than it will be to get to Patong beach from Phuket airport. You can also get flights to Trat from Bangkok 3 times a day, and they’ve just announced a Samui-Trat flight, with Phuket to follow,” explained Steiner. “The effects of the airport will be explosive.”

But when people see big potential, they tend to have big ideas, and developments don’t come much bigger than the 91 storey Majestic Tower, a new skyscraper that will have its official launch sometime next month. There is surprisingly little information to find online, but queries to the listed developer (Siam Best Enterprises) end with an email that says: “According to our architects this will be the tallest residential building in the world and we spent considerable time engaging world renowned experts in the field of property construction.

It has been in the planning for almost a year and we anticipate the official launch will be within the next six weeks.” Undoubtedly, the building will change the Jomtien landscape (and probably Koh Chang’s too you might be able to see the behemoth from the faraway island), setting the bar pretty high for others to follow.

Thankfully, the effects of the ’97 crash have been studied and lessons have been learned. “It’s important for potential investors to remember that the crash of ’97 was not actually a real estate crash, but a currency speculation crash,” said Steiner.”There was exorbitant over lending by banks at the time, but if you try to get a loan now, you will feel the mechanisms that prevent serious overheating.”

Gray, who came to Thailand shortly before the market fell, agrees with this statement. “The banks used to give money to anyone he’s your brother or he’s your friend, have some money. But they’re much more careful now and it’s much more stable.”

Nevertheless, skittish nerves about all the activity on the eastern seaboard are hidden not too far under the surface. There are a few projects around that trigger raised eyebrows when their names cross the table. For obvious reasons, people don’t want to go into too much detail, but the best advice that anyone can take is to research where a project’s financing is coming from and how it’s structured. There have been projects in the past where the money has flowed in, the construction has started and then  poof. A half-finished building and a few unscrupulous individuals who flee the country with suitcases full of cash. Being forewarned is being forearmed. Having a real estate lawyer familiar with Thai law go over things probably wouldn’t hurt.

But, with prices rising an average of 30 to 40 percent each year for the past several years one of the highest rates in South East Asia  the future is definitely looking bright for property investments. Many people are taking advantage of the market by investing in short term properties – getting in and out with a small but easy return. “One guy I know bought a property for 9 million baht, and sold it for 12.5 a few months later,” said Gray. “That’s not too bad.â”

Source: Property Report Asia

Like many Southeast Asian nations, Malaysia has two primary property markets that are attractive to overseas buyers: the area around the capital’s central business district and the resort properties on the coast.

But unlike some of its neighbors, Malaysia makes it fairly easy to buy property. Thailand, the Philippines, Indonesia and even Singapore all prevent foreigners from owning land, restricting them to buying apartments or to using leasehold arrangements.

“In Malaysia, you’ve got a government that is really trying to improve the environment for people looking to invest in the country,” said Darien Bradshaw, regional director of business development for Colliers International real estate brokerage.

That was not always the case. In the 1990s, the country feared that foreign buyers were driving prices beyond the reach of locals and, in reaction, it set up a Foreign Investment Committee and enacted restrictions. Now, however, the country even has a program aimed at overseas buyers, “Malaysia: My Second Home.

Malaysia’s real estate market is considered transparent in comparison with other Southeast Asian countries. And owners can avoid a 30 percent capital gains tax by holding their property for at least five years, after which they pay 5 percent on any gains.

Brokers and buyers alike say Malaysian banks are eager to issue mortgages to overseas citizens. Mortgages are generally issued up front. “In terms of financing ability, compared to other countries, the banks are very liberal,” Bradshaw noted. “People can secure up to 90 percent finance.”

Although recent increases have pushed interest rates to 6.75 percent from about 6 percent at the start of the year, Kuala Lumpur has seen a boom in the kind of high-end condominium development that expatriate buyers and renters demand. Construction standards have improved, as have living conditions in the city. A light rail system opened in 1998, and a thriving business hub is developing around Kuala Lumpur’s city center and the KLCC Park at the foot of the Petronas Twin Towers.

The buzzing local economy, fueled by the global boom in oil and commodities, has drawn an increasingly discriminating breed of renter who works for one of the multinational natural resources companies.

According to a recent study from ING Real Estate, Malaysia will be the Asian country with the biggest increase in its work force from 2003 through 2013, with the number of workers expected to rise to 13 million, a 27.9 percent increase in the 10-year period. With strong demand for apartments at the market’s top end, developers are in various stages of construction on a series of projects around KLCC Park. The catalyst was The Binjai, a condominium development by KLCC Holdings, the property development arm of the oil company Petronas and the developer of the Twin Towers.

The Binjai, which was started in 2003 and is expected to be ready by the end of the year, will have 171 apartments divided between two towers. They are expected to set records. The company has not issued a final price list, but it says apartments will sell for more than 1,000 ringgit, or almost $260, per square foot. The smallest units, starting at 2,300 square feet, or 214 square meters, are likely to sell for more than 2.5 million ringgit. There also are 14 penthouses of as much as 10,000 square feet.

“The Binjai has created a new market essentially, with the view of the park and the view of the towers,” said Rohan Padmanathan, who works in the investment department of Jones Lang Wootton brokerage house.

Upscale condos in the city’s central area had been selling at 450 to 500 ringgit per square foot, but the developer expects the average sale price of The Binjai to be double. “One thousand ringgit per square foot started at Binjai,” Padmanathan said. “At the time, that was unheard of. Now it’s becoming quite common.” The Troika, a three-tower project designed by the company of the British architect Norman Foster and developed by Bandar Raya Developments, has similar pricing, with apartments also topping the 1,000 ringgit per square foot mark. Its sales have been split roughly evenly between people who intend to live there and those buying apartments as investments.

Nearby, and also with views of the Twin Towers, KL Landmark is developing K Residence, a 50-floor luxury residential complex. The two- and three-bedroom apartments, most of them around 2,500 square feet, are due for completion in the first quarter of 2008. The asking prices are 816 to 942 ringgit per square foot. The developers tout touches like a contemporary design partly by Christian Liaigre, who created the interiors for Valentino Couture in Paris and private residences for Calvin Klein, Karl Lagerfeld and Kenzo, among other projects.

Some of the new construction is not so costly. The 100 serviced apartments being built at the 32-floor Binjai Residency are selling for just half what those at The Binjai are expected to fetch. (The projects have similar names but are not associated.)

David Neubronner, residential department director for Savills real estate in Singapore, said his office sees 50 to 100 buyers a year in Malaysia, most from Singapore but also from Hong Kong, Europe and Australia. Only the Singaporeans have been interested in Malaysian property in places like Penang or Johor Bahru, he said. “Generally, Malaysian resort properties have not been very well received,” he said. That may be changing, however, as resort construction standards are improving and new projects are springing up along the coast.

Over all, Malaysia is still an emerging market, so despite all the positives, buying property is not without risk. For example, brokers warn of annoyances like developers’ trying to avoid receiving the final payment on properties so they can hold on to the titles. ING rates the Malaysian property market as a medium risk, the only developing nation in Asia not rated a high risk.

Source: International Herald Tribune

Related links: Kuala Lumpur City Centre Official Website

Among the new property markets emerging in south-east Asia, the palm-fringed white beaches, lush inland tropical forests, majestic peaks and paradise islands of Malaysia are opening up perhaps a little faster than others.

The country is benefiting from the effects of an ambitious new scheme, called Malaysia My Second Home, which launched in 2002 with generous government backing and the aim to drive up numbers of long-term foreign visitors and private property prospectors.

The scheme has steadily been pulling in applicants territories including Australia, Japan, Hong Kong, the UK, France, Canada and South America, all lured by a package of incentives designed to speed the process of setting up home, or a second home, in the former British colony.

Mohmed Razip Hasan, director of Tourism Malaysia for the UK and Ireland, explains: “We want our friends from countries overseas to come and live in Malaysia. We offer so many attractions in terms of our standard of living, our forests and beaches, weather and political stability. Our education system and rule of law are both British, and we have excellent, modern medical facilities.”

In the 12 months to August 2005, around 5,700 foreign nationals registered for the Malaysia My Second Home programme internationally, including 550 from Britain.

The qualifying criteria for the scheme, which is backed by the Malaysian Ministry of Tourism and the Immigration Department of Malaysia, are continually being revised. However, the main improvements made to welcome foreign nationals include the extension of visitor visas from five to 10 years, with the promise of relatively automatic renewal; increased flexibility over financial security (applicants must place a fixed deposit, fully refundable upon departure, of either M$100,000 (£15,000) if single or M$150,000 if a couple, with a Malaysian financial institute or they must prove they have a monthly income of at least M$7,000); and, in response to demand, the relaxation of the requirement for a full medical report (instead an applicant can just secure medical insurance once their application has been approved). The whole application process also now takes just one month to complete.

From there, househunters can explore the bustling capital Kuala Lumpur, areas near world-famous nature parks such as Taman Negara and the tropical forests and waterfalls of Pahang on the east coast, the fabulous beach communities of Penang and the numerous award-winning island resorts of Langkawi.

In all, they will find inexpensive property, available mostly on a long leasehold basis, with prices ranging from M$150,000 (less expensive homes are reserved for ethnic Malays) to about M$500,000. Foreigners can buy up to two residences and they are even eligible for a 60 per cent loan from selected financial institutions, subject to qualifications.

The Malay housing stock ranges from new luxury condos and mini-developments on the edge of golf courses to bungalows, semi-detached houses, terraced houses and traditional wooden beach-front kampung-style chalets found along the coastal areas of Langkawi, Penang and Malacca. Some of the most attractive residences are in tourism zones – on beaches, in jungles and near the country’s national parks.

“People can buy a decent home for around M$250,000, while they can get a semi-detached house or bungalow for nearer M$400,000,” says Hasan. “Pensioners tend to prefer the islands or beach areas, but some professionals like to stay in the more upmarket areas of Kuala Lumpur.”

Langkawi, the legendary archipelago consisting of clusters of sun-drenched islands in the north west corner of Malaysia, is the most popular resort location in the country. Properties there range from M$100,000 for a single-storey sea bungalow up to M$500,000 for a luxury chalet. Other top destinations include Kuala Lumpur, Penang, Malacca and Kota Kinabalu and Kuching, the two state capitals in Malaysian Borneo. Two-thirds of Malaysia is surrounded by water, so sea-view or seafront properties are plentiful.

Simon Naylor, a 46-year-old British telecoms worker, bought a detached four- bedroom house with a pool in KL three years ago after living in Asia for 16 years. “We had been renting places elsewhere, in Hong Kong and Singapore, and thought it was about time to invest in a property,” he explains. “The Malaysian government is making it easy. The Second Home scheme was one of the reasons we bought here, combined with the decent price of houses, the excellent infrastructure, the weather and the friendliness. You pay half the price here for the same property in Singapore or Spain, and Malaysia’s economy is developing so property is a good investment.”

For expat buyers who eventually want to move on, there are no restrictions on property sales and they can keep every penny, or Malaysian ringgitt, they make on the transaction with no sneaky taxation imposed before they exit the country. Hasan says, given current market conditions, gains can easily be realised within five years.

There is only one thing that foreigners can’t do under the Malaysia My Second Home scheme: get a local job. But then maybe that’s not such a bad thing.

Source: FT