PROPERTY: Where to BUY?

I have been telling everyone that my forte is ultimately and geographically within Klang Valley. Ask me anywhere outside - let it be Ipoh, Kampar, Penang etc... I am perhaps as clueless as you are. But within Klang Valley... I reckon I can give some rather good recommendations on WHERE TO BUY if you are looking for a property. =)

A personal favourite is always Bangsar area. In my opinion, whether you are buying to stay or to invest, you really cant go wrong with Bangsar. Being in between Kuala Lumpur and Petaling Jaya gives Bangsar a great advantage in terms of location; and ideally, the surroundings, the people... it is a vibrant place, and a vibrant crowd. I would reckon that properties within Bangsar area... should ultimately hit RM700-900 psf for bungalow lands, and within the next 3-5 years, reach a support level of RM1,500-1,700 psf for a new high end condominium. =)

One Menerung, an upscale condominium development behind BSC.

Another favourited location is the Old Klang Road area. Recent launches such as Saville Residence are fetching prices of RM450-500 psf - with units going for at least RM550,000 now - which to me feels like a very good entry level price for a 1,250 sf unit. In my opinion, the prices should shoot up to at least RM800-900 psf within the next 3-5 years, making this a choice investment for investors. =)

A dark horse location to invest in remains at Mont Kiara. As far as the expat market is concerned, I think that is rather slow though - so dont put too high hopes on the expat market for your rental yields in the area. I would put my money in Mont Kiara in the smaller units; units sized between 500-800 sf remains attractive to investors as the entry costs are still within reach, and the rental yields remain good for the smaller units. Units are going from RM900-1,000 psf for these smaller sized units - so I would think, if you can find units going at below RM800psf for the smaller units with good facilities, it is indeed a no-brainer to snap it up. Once the Bangsar area hits RM1,500psf, I think Mont Kiara properties should comfortably hover around RM1,200-1,300psf.

Cyberjaya, a future investment stronghold.

Other dark horse locations include Cyberjaya, as well as places around Damansara Perdana/Mutiara Damansara area. Prices in Cyberjaya would move, but it will take quite awhile before you really experience a massive capital appreciation. Damansara Perdana/Mutiara Damansara remains a choiced location due to its easy accessibility to LDP and the vibrant community living within the area.

The 2020 Countdown Clock Urban Design Competition.

My architect has been shortlisted for this competition... =)

They do have an awesome design - one that will change the face of Dataran Merdeka.

Go on.... and vote!!! =P

7 Top Engineering Wonders of The World.

I did civil engineering, and I am involved in construction and property development currently. Anyways, I have always been interested in various engineering feats and wonders of the world; I decided to listed to list down my 7 favourites. =)

The AKASHI KAIKYO Bridge, Japan.

The Akashi Kaikyo Suspension Bridge is the longest suspension bridge in the world and is a spectacular visual delight. It apparently took 2 million workers 10 years to construct the bridge, 181,000 tons of steel and 1.4 million cubic meters of concrete. The four-mile bridge links the island of Awaji and the mainland city of Kobe.

The bridge has three spans. The central span is 1,991 m (6,532 ft), and the two other sections are each 960 m (3,150 ft). The bridge is 3,911 m (12,831 ft) long overall. The central span was originally only 1,990 m (6,529 ft), but the Kobe earthquake on January 17, 1995, moved the two towers sufficiently (only the towers had been erected at the time) so that it had to be increased by 1 m (3.3 ft).

The PALM ISLANDS, Dubai.

The Palm Islands are artificial archipelago in Dubai, United Arab Emirates on which major commercial and residential infrastructure will be constructed. They are being constructed by Nakheel Properties, a property developer in the United Arab Emirates, who hired Belgian and Dutch dredging and marine contractor Jan De Nul and Van Oord, some of the world's specialists in land reclamation. The islands are the Palm Jumeirah, the Palm Jebel Ali and the Palm Deira.

The creation of the Palm Jumeirah began in June 2001. Shortly after, the Palm Jebel Ali was announced and reclamation work began. The Palm Deira, which is planned to have a surface area of 46.35 square kilometres, was announced for development in October 2004. Construction was originally planned to take 10–15 years, but that was before the impact of the global credit crunch hit Dubai.

The BAILONG ELEVATOR, ZHANGJIAJIE, CHINA.

The Bailong Elevator has set three Guinness world Records i.e. World’s tallest full-exposure outdoor elevator, world’s tallest double-deck sightseeing elevator and world’s fastest passenger traffic elevator with biggest carrying capacity but due to the potential harm caused to the surrounding landscape, its future remains uncertain.

This elevator was one of the facilities that has really angered many scientists and tourism specialists who cited it as being one of the most unnecessary tourism facilities in history. The 326 metre elevator runs for two-thirds of its height down the outside of a cliff and the lower third through the rock, ending in a damp cavern. A long tunnel leads out to the fresh air. Check out the video below.

*wooots* breathtaking.... =P

The VENICE TIDE BARRIER PROJECT.

Venice is a city in northern Italy known both for tourism and for industry, and is the capital of the region Veneto, with a population of about 272,000 (census estimate 1 January 2004). Together with Padua, the city is included in the Padua-Venice Metropolitan Area (population 1,600,000).

The Venice Tide Barrier Project will be the largest flood prevention project in the world. The project has been debated in one form or another for over 40 years as a way to protect this historical city-on-the-water for future generations. With Venice slowly sinking, and the water around it slowly rising, and floods always a fear, Italians have known for a long time that something needs to be done. Finally, the Prime Minister of Italy approved the second phase of the plan, including 80 hinged barriers, each approximately 6,500 square feet.

The THREE GORGES DAM.

The Three Gorges Dam is a hydroelectric dam that spans the Yangtze River by the town of Sandouping, located in the Yiling District of Yichang, in Hubei province, China. It is the world's largest electricity-generating plant of any kind, and second in production, only exceeded by Itaipu Dam, Brazil and Paraguay's electricity-generating plant.

The Chinese state regards the project as a historic engineering, social and economic success, with the design of state-of-the-art large turbines, and a move toward limiting greenhouse gas emissions. However, the dam flooded archaeological and cultural sites and displaced some 1.3 million people, and is causing significant ecological changes, including an increased risk of landslides. The dam has been a controversial topic both in China and abroad.

The MILLAU VIADUCT.

The Millau Viaduct, or le Viaduc de Millau is a cable-stayed road-bridge that spans the valley of the river Tarn near Millau in southern France. Designed by the French structural engineer Michel Virlogeux and British architect Norman Foster, it is the tallest bridge in the world, with one mast's summit at 343.0 metres (1,125 ft). The viaduct is part of the A75-A71 autoroute axis from Paris to Montpellier. Construction cost was approximately €400 million. It was formally dedicated on 14 December 2004, inaugurated the day after and opened to traffic two days later. The bridge received the 2006 IABSE Outstanding Structure Award.

The Millau Viaduct consists of an eight-span steel roadway supported by seven concrete pylons. The roadway weighs 36,000 tonnes (40,000 short tons) and is 2,460 m (8,070 ft) long, measuring 32 m (105 ft) wide by 4.2 m (14 ft) deep, making it the world's longest cable-stayed deck. The six central spans each measure 342 m (1,122 ft) with the two outer spans measuring 204 m (669 ft). The roadway has a slope of 3% descending from south to north, and curves in a plane section with a 20 km (12 mi) radius to give drivers better visibility.

The CHANNEL TUNNEL, connecting UK and France. =)

The Channel Tunnel, (also informally known as the Chunnel) is a 50.5-kilometre (31.4 mi) undersea rail tunnel linking Folkestone, Kent near Dover in the United Kingdom with Coquelles, Pas-de-Calais near Calais in northern France beneath the English Channel at the Strait of Dover. At its lowest point, it is 75 metres (250 ft) deep. At 37.9 kilometres (23.5 mi), the Channel Tunnel possesses the longest undersea portion of any tunnel in the world, although the Seikan Tunnel in Japan is both longer overall at 53.85 kilometres (33.46 mi), and deeper at 240 metres (790 ft) below sea level.

The tunnel carries high-speed Eurostar passenger trains, Eurotunnel Shuttle roll-on/roll-off vehicle transport—the largest in the world—and international rail freight trains. The tunnel connects end-to-end with the LGV Nord and High Speed 1 high-speed railway lines. In 1996 the American Society of Civil Engineers identified the tunnel as one of the Seven Wonders of the Modern World.

Out of the 7 - I have only experienced the Channel Tunnel. =) That was back in 2002 lorr... ahahaha...

Rental Yields - To Fall.

Recently, many people have asked me about yields and rental yields. I mean, I have been telling everyone out there about the dangers of property investments in recent volatile times, and it is highly critical and essential what you invest in, and what you decide to buy. =)

In my opinion, I believe that rents in Kuala Lumpur is likely to fall a bit. By looking at the prospective projects coming up, looks like there are quite a number of high end homes to be completed in the coming months, right up til end of next year - and that is a rather healthy supply of high end condominiums coming along. Further to that - from what I have been hearing, the expat remuneration packages in Kuala Lumpur have somewhat turned to be less lucrative as compared to before. In fact, not many companies pay the luxury RM25-30k/month rental for a high end KLCC property nowadays.

Mont Kiara is still amongst the preferred locations for investments.

If we were to look at our neighbours Singapore - I have read that luxury home rents have dropped by two percent in six months... in fact, in some cases, rents had to be reduced by almost 10% to attract tenants. Similar to KL, the pressure on rents is also seen in a lot of multinational corporations - who have tried to apply local terms for expats. This means the expats must now pay for rent from their salaries instead of enjoying a separate housing allowance.

However, properties in Singapore generally have low yields, but exorbitant capital appreciation figures - a vast difference as compared to Kuala Lumpur.

SO... back to Kuala Lumpur.

Where would be an ideal property to invest in and still get good yields? For the higher rents, Mont Kiara is still perhaps the best areas to invest in, especially with all the international schools and so on in the area - but in smaller sized units though, cos rents are rather fixed. Go for the 700-900 sf units - that somewhat is the most ideal investments. The larger units... say 1,500 sf and above, would face resistance in getting similar rental rates. Units with nice facilities... i.e. infinity swimming pool, gym etc... those are ideal properties to get.

Marc Residences, KLCC.

KLCC vicinity would still be an ideal location too due to its close distance to KLCC and the prime financial centre of the city. But same thing goes... invest in smaller sized units for the best yields. =)

CBHB - 2nd Quarter FY2011 =)

The following has been extracted and sourced from Bursa Malaysia. =)

For the 2nd quarter under review, Crest Builder Holdings Berhad's revenue increased by 21% to RM122 million from RM100.7 million in the corresponding 2nd quarter of the preceding year. The profit after tax increased by 6% to RM3.4million from RM3.2 million the in corresponding second quarter of the preceding year.

The increase in revenue and profit after tax were mainly due to the higher contribution from property development activities undertaken during the current quarter. =P

Eric Yong : Being Media Shy?

Some people asked me recently what do I do - in which I replied; Property and Construction lorrr... and then some even asked me, how come I am not media shy, or not camera shy... and probably a lot of other random questions. Errr.... Okay, I am actually quite camera shy too LOL; but every now and then I do enjoy being in the media a bit. It is all about the branding and the good of the company, and ideally, it is about talking the markets up etc etc bla bla bla.



So, someone asked me how often have I appeared in the papers; I would say.. not many times. I used to appear considerably quite often - but none so far in 2011; perhaps thats why some say I am media shy.

The first time I appeared in the papers was way back in 2007. In a little interview with The Star's Bizweek - I mentioned about the company's business direction, the company's sector-by-sector performances, the order book and so on. Then, I also talked about the property division and its various upcoming projects.

And then fair enough, they interviewed me again when we secured the Verticas Residensi project; a massive prestigious project in the heart of Bukit Ceylon, developed by premium developers WingTai Asia of Singapore.

Awhile later, I also appeared in the Chinese papers; an interesting interview once again on the updates of the company's performances, and the outlooks of the company. It was a 2 part article - with a big mention on Tierra Crest - our new commercial office development in Kelana Jaya. Comparing the descriptions that I mentioned before and today - there have been some major upgrades and improvements to the design; and ultimately, even the Gross Development Value had increased quite a bit.

Then awhile later in middle of 2008, I was somewhat misquoted a bit on The Edge Financial Daily. I had mentioned that we might consider setting up other entities to enhance our earnings further, such as forming a Real Estate Investment Trust. This is something that I believe will enhance earnings for the Group - however there is nothing on paper yet. Even up til now, I still believe in that - but that is really the long term goal.

When it came to March 2009, I appeared on a full page for the first time ever. The Edge did a very comprehensive feature on Crest Builder in their weekly The Edge - with the main highlight being our acquisition of the 4.26 acre land in Damansara Perdana, the current property projects as well as an outlook onto the Group's Construction Division for 2009... Oh best part, and it had a mention of this BLOG too!



And then we went for the Bursa Malaysia Kuala Lumpur Rat Race, organized by The Edge Malaysia. I didnt run, but I formed the team and I went all out to support my boys.

2009 was also the same year that I was shortlisted under the Prestige Top 40 Under 40. It was indeed an awesome recognition of my contributions, despite my age - and I really appreciated it. And then I also appeared and featured on Property Buyer magazine, with a good interview and writeup. Amongst my favourite question/reply was this... "What is it like working with family?"



I just answered - Its like 18-hour long family days. I always say that I work 8 days a week and dinners are like half a board meeting because my two sisters work with the family plus my parents are both directors too!

And then The Edge's Financial Daily featured me on a cover story. I told Mr Chong Jin Hun that we are now on an expansion basis - of which apart from our expertise as a building specialist, we also want to eye other areas in the industry - areas with lesser projects and competition.



And then about a year ago, there was another article on me and the company, on the deferment of our Kiara Crest luxury condominium project in Mont Kiara. We were planning to develop a 38-storey luxury tower housing 178 condominiums with floor space of between 2,000 sq ft and 2,600 sq ft on a 2.93-acre freehold land. With only six units per floor on 32 levels, the average unit will have between two and four bedrooms. Each unit will have a minimum of three car parks... but the plans would probably be delayed a bit as there is no rush for this project.

So all in, I reckon I have been considerably quite media shy, just a handful of articles and interviews in the last few years. I am still rather active on Twitter as well, ready to answer and advice any questions on the construction and property industry, as well as questions on the government, politics, policies and perhaps, just ask me anything. I would answer based on what I know.

Anyways, I think I would still be rather 'media-shy' til end of the year at least, but look on the bright side... just look out for my blog here, and we shall see more exciting things brewing for the company. =)

Twins, Damansara Heights.

Yes, the Twins Damansara has been completed and handed over for awhile now. =)

In fact, right now the owners are being scheduled to shift in pretty soon.

Just wait for this space!!! =P

The Dubai Property Market.

Some people are asking me what are the prospects of the real estate market in the Middle East. I had not put much thought into that; I wanted to do a bit of research of my own, read some market reports and so on before I make my comments. Lets take... Dubai for instance.

Some years back, Dubai had experienced some massive development and economic growths. It was until a few years ago, that the world markets somehow collapsed, and Dubai - suffered quite badly - especially their own property market. Dubai was seen as the gateway between Europe and Asia; and they did very well to attract some of the largest firms to set up regional offices and so on there. The construction in Dubai had boomed tremendously...

Today, 2 years after that little decline, and based on what I read - I believe that the Dubai real estate market is recovering, but not all sectors though. In the residential sector, it looks like the sale prices as well as rental rates continue to go down and decline further. As the expats are still leaving the country and an oversupply situation, developers would be struggling to sell/rent out the completed units.

Another sector that will see some major declines is the commercial property markets, in particular, the office markets. There are over 6 million sq ft of new office space to be completed in 2011 itself, in addition to the current 60 million sq ft in existence already. Many of the office projects which had stalled previously, had to continue and most are expected to be completed and handed over and introduced to the office markets in the next 2 years. I would still think that office developments in Dubai will still be a no-no; perhaps, what Dubai should do is what DBKL did last time - a freeze on all office spaces in order to curb this decline and oversupply situation. =)

On the other hand, the hotel and serviced apartment markets - i.e. the hospitality sector continues to perform very well. Their hotel occupancy rates have rise to above 80%, and the ADR rates have improved tremendously too. Tourist arrivals continue to improve as a weakened US dollar means it is cheaper and more affordable to go holiday in Dubai.

On the retail sector - shopping malls have enjoyed some good performances. Like I mentioned above, as there's an increase in tourist arrivals, the shopping malls would also enjoy the upside of performances. As per the statistics, there will be no new shopping mall - or rather, no major ones to be introduced into the market, not at least for the next 3 years. The market would then cool down a bit from its potential oversupply situation - which would mean the retail markets would do very well in the next 2 years.

In general, I would think that Dubai's overall property market should bottom out by early or mid-2012, and the turnaround should come up soon. Government policies continue to remain a strong factor in the property markets - and I believe the Dubai government would introduce new measures in order to 'cool down' the market further for it to pick up later. =)

Picture Source

The Pekeliling Flats Redevelopment.

Yesterday, Mah Sing Group Bhd announced that they had secured a project to develop part of the former Pekeliling flats area into serviced residences and retail units with an estimated gross development value (GDV) of RM900mil. To be known as M Sentral, the project will comprise serviced residences and retail units along Jalan Tun Razak-Jalan Pahang and forms part of a privatised urban regeneration project in Kuala Lumpur.

The Jalan Pekeliling flats.

As per their JV agreement, they will get the sole rights to develop the land for RM106.6 million, of which 60% of it to be paid in cash, and the remaining is 40% in the JV company for the land owner. If you look at the size of the plot of 4.08 acres - RM106.6 million translates to RM600psf - which is considerably a damn good deal. Furthermore, based on that, 60% cash - is about RM 64 million - and that means Mah Sing pays RM360 psf upfront only to develop the land.

In comparison, land plots further inside - say Sentul and Jalan Ipoh are going at RM450++ psf and much more - so this deal, right on Jalan Tun Razak at RM600 psf is an awesome deal. Taking into consideration of the land cost vs GDV - thats less than 12%, making it the perfect deal. Lets say the construction costs, authority fees, financing costs and consultant fees as well as marketing costs come up to about 60-65% of the GDV, they would still make a very handsome 23-25% profit margin on GDV (about RM 225 million)... and that, does not include the potential upside that is expected for the development. I believe that the prices in the area would appreciate say, at least 15-20% in the next 4-5 years - and that would translate into additional profits for Mah Sing.

Now I am curious and excited to see what Mah Sing does to the land. Serviced residences and retail units sounds too vague. I wonder if they will bring in their successful ICON series into this - those SOHO/SOVO units have been receiving tremendous response, and I reckon that they might just bring that in here. =)

The Klang Valley Commercial Office Market.

The KL City Centre.

As I have mentioned before, due to greater competition and the possibility of an office space oversupply, the Klang Valley commercial office markets remain rather soft so far. From what I see, the occupancy rates seems to be dropping, and rental rates are also gradually stabilizing downwards.

As per sources, the current cumulative supply of purpose built office spaces in the KL city centre area accounts at about 40+ million sq ft, with the most recent addition being Menara Bank Islam along Jalan Perak. Other new buildings completed recently includes the Hampshire Place office, with several others completing by end of this year - of which those includes Menara Carigali (as pictured above), now known as Menara Petronas 3 and Dijaya Plaza at Jalan Tun Razak. Those expecting completion early next year would be the Menara Binjai along Jalan Ampang as well as the Glomac Tower along Jalan P Ramlee. The cumulative supply of office spaces outside of KL city centre (i.e. Damansara, PJ area etc) accounts at about 15 million sq ft.

Menara Bank Islam, Jalan Perak

While there has been new buildings completed, there are also plenty of plans and proposals to upgrade and refurbish old ones. Tradewinds Corp has announced plans to demolish the Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa - and for it to be redeveloped as Tradewinds Centre - a multi-billion mixed commercial development, comprising office spaces, retail, serviced apartments as well as a medical centre. Kompleks MAS is undergoing its own tender exercise for its own redevelopment, and a couple of other buildings around KL City Centre doing the same too.

I mentioned about a stable rental rate for offices at the current moment. Based on the general figures compiled, I think it is safe to say the average rental rate in the KL City Centre area now is about RM5+ per sq ft, with those outside of KL City Centre fetching about 50 cents lower. There are the super Grade A offices which gets much higher - between about RM7-RM11.50 per sq ft - Menara Maxis still garners about RM10+ per sq ft per month, while the Twin Towers are still the ones hitting the highest rates.

If you were to look at all the various indicators, I would think that the Klang Valley commercial office markets will remain very competitive - which means this will be quite challenging for the developers. However, competition makes it good for the tenants - they would have more choices to choose from as well as better rates/packages/offers. With the Government's ETP programme in full swing to attract large MNCs as well as the commencement of our mega MRT project - I would think that long term wise the market still remain very good.

Furthermore, there will be a new trend of new and modern buildings - all of which are good to improve the standards of commercial office buildings in Malaysia. I believe many developers out there are starting to 'go green' with new certifications and statuses. Recently, the Intermark obtains its MSC Cybercentre status, while its new Integra Tower (above) had obtained the Platinum LEED certification. Menara Binjai (pictured below) will be the first purpose-built office tower in the country to obtain a dual-green certification - the BCA Green Mark as well as GBI Malaysia.

As I would say... as the going gets tough, the tough gets going. =)

Something Exciting Cooking...

In the Financial Daily yesterday.

Buying a Pre-Owned Property - The Checklist.

Some of the things and items that a buyer need to look at before buying a property - say... an existing property, an old house, or a pre-owned property - includes many many items. Let me try to put in as much as I can here and hope not to miss out anything ya. =)

The name of the agent.

When you're going for the property inspection - do take note of... importantly, the property lot number, the name of the agency and its corresponding person, the name of the seller (if possible) and any other basic information that you can get... check if its freehold or leasehold etc. =)

Pre-owned properties tend to be renovated already - so it is best to observe for yourself on the general arrangements and layout of the property. Do take note of the number of bedrooms and bathrooms (important!), and then the condition of the interior walls and floors, the exterior walls and floors and roof, observe the ceiling for leakages, lighting points, the condition of the doors and door frames, the layout of the house etc.

Some of the items that I would usually check is the works that are required to be done up - for example, do check if the property has a water heating system, Astro TV or UniFi etc... those without would mean the property needs some extensive hacking and renovation to the walls and floors for it to comply with that. Air conditioning systems are also important. =)

If the property comes furnished, do check out the conditions of the beds, sofas, the white goods (such as the microwave oven, ovens, stove, television and so on...), the shower systems, the conditions of the built-in wardrobe/walk-in wardrobe (if any), the bathtubs (tend to crack or leak) and any other fittings there are in the property.

For an investor, it would be ideal to also check out the property's surroundings - after all, a property would be able to fetch a premium if it is close to a shopping centre or public amenities. Check out how far it is to walk to the LRT station, check if the new MRT will run nearby, any bus stops nearby, clinics and schools, gyms, kindergartens, parks and so on...

Avenue Crest, Shah Alam.

Yes, we are going to launch a new property very very soon. It is called Avenue Crest. After some changes to the unit sizes, upgrading of finishes, and of course, we've got a surprise at the upper floors.... Avenue Crest will relaunch very soon!!! =)

Go register and check it out!

Affordable Homes - remains the key for 2012.

A real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic are answered differently by schools of economic thought, as detailed below. The financial crisis of 2007–2010 was related to the bursting of real estate bubbles around the world.

The 'Skim Rumah Pertamaku' that was introduced for 1st time home buyers to obtain 100% margin financing for their first homes below RM220,000 - seems to be the big thing to come by end of 2011 and for 2012. The Government is stressing on one thing - Affordable Homes. To add on to this, the Government is also allowing those earning less than RM6k per month to obtain 90% loan margins with 10% guaranteed deposits for apartments between RM220k-RM300k.

SO... back to the original question... is there going to be a property bubble in Malaysia happening soon? In my personal opinion, yes and no. Obviously no for the cheaper range properties, those RM200k will be very safe to invest in; those at RM500k still a fair bet, and the million dollar properties... invest at your own risk. =)