Raising RPGT will push up house prices

PETALING JAYA: Raising the real property gains tax (RPGT) and stamp duty could risk pushing house prices higher, according to HwangDBS Vickers Research.

 

This is because sellers would try to pass on incremental costs to buyers and delay disposal, leading to even tighter supply.

 

“We understand the Government needs to be seen to be actively reining in property speculation, but we do not advocate raising real RPGT, which had a relatively short-lived impact in the past and could push house prices higher as sellers may pass on the incremental costs to buyers.

 

“It could also spur sellers to postpone disposal and developers to hold back launches in view of weaker sentiment, leading to even tighter supply in the market,” said the research house in a report yesterday.

 

Currently, RPGT is charged at 15% for disposal within two years and 10% for disposal within three to five years (compared with 5% to 30% prior to Budget 2010).

 

HwangDBS Vickers also noted that while raising stamp duty may have a bigger impact, sellers would also try to pass on the incremental costs to buyers.

 

“Any hike would not only affect new projects but also those under construction, especially strata-titled and projects under the master title which have yet to be transferred.”

 

Aside from the once-in-a-lifetime exemption from RPGT for individuals, the research house suggested for specifically first and second home-buyers to be spared from any tightening measures, to be in line with the Government’s aim to promote home ownership.

 

“Reducing the loan-to-value cap for a second property would affect genuine upgraders, who may find it challenging to pay a higher down-payment while waiting to sell their existing properties.

 

“This could reduce supply in both the secondary and primary markets, as developers may also delay launches due to poorer take-up.”

 

HwangDBS Vickers added that the Government should encourage the development of more international-class condominiums, such as those in KLCC and Bukit Bintang, to attract more foreigners.

 

“While other countries in the region are restricting foreigners from buying properties, Malaysia should conversely open up, as foreigners currently made up less than 5% of transaction volume (albeit rising marginally based on the Malaysia My Second Home applications).

 

“Property can be a new engine of growth for Malaysia in view of Iskandar Malaysia’s potential to leverage on Singapore and Greater Kuala Lumpur’s significance within the Economic Transformation Programme (which is targeting to attract 100 multi-national companies to set up operational headquarters in KL).”

 

HwangDBS Vickers also said that the potential introduction of the goods and services tax by 2015 could lead to lower personal and corporate tax rates.

 

“This should improve Malaysia’s competitiveness in attracting foreign direct investments and talent, along with stemming Malaysia’s brain drain and rising investments overseas by local corporates.”

 

Star, October 2013

 

Best Western to manage hotel and serviced apartments in i-City

SHAH ALAM: I-Bhd has partnered with Best Western International, the world’s biggest hotel chain, to develop the first hotel in the 29ha i-City project, scheduled to open in September 2014.

The three-star hotel, Best Western@i-City, has a gross development value of RM50mil, and represents the first of two hotels planned for the international park.

 

At the signing ceremony between the two parties, I-Bhd deputy chairman Datuk Eu Hong Chew said the hotel would probably have one of the shortest gestation periods due to the attractions based in the park.

 

Meanwhile, Best Western will also manage its first Best Western Service Suite in the country by providing hospitality and building management services for a period of 5+5 years.

 

“It is a standard arrangement with all our hotel owners. After that period, it is an automatic renewal unless there is an issue,” said Best Western vice president of international operations for Asia and the Middle East Glenn de Souza.

 

He added that the hotel would be an addition to its international portfolio and would be promoted overseas. “i-City is pretty self-contained, it’s like a one-stop shop. We would work with the tourism organisation to promote i-City.

 

It would attract a lot of foreigners because it provides everything for families and businesses,” he said.

 

Best Western Service Suite@i-City will comprise 826 units of serviced residences.

 

It will be the first hotel-branded residential development in Shah Alam and is expected to be completed in 2016. Eu added that the project would be launched by the end of this year. I-Bhd expects the hotel to enhance the number of visitors to the theme park attractions, as visitors now have the option of staying within i-City.

 

 

“The rooms would be comfortable and trendy. Rather than compete with the other facilities within i-City, we would complement and support them,” de Souza said.

 

The hotel is part of the third building block in the development of i-City as a tourism destination, said Eu. “The three tourism components are i-City’s theme park attractions, a 1.5-million-square-feet super regional shopping mall and hotels,” he said.

 

To-date, the company has invested RM70mil in various rides and attractions.

 

Eu added that I-Bhd planned to invest an additional RM30mil in the theme park in the next few years.

I-Bhd is working with Thailand’s Central Retail group to develop the RM580mil CentralPlaza@i-City, which has been slated for completion in 2016.

 

Best Western has more than 4,100 hotels in more than 100 countries worldwide. In Malaysia, it currently operates in KL Sentral, Kota Kinabalu, Sandakan, Pulau Pangkor and Port Dickson. It plans to have 15 hotels in the country by end-2015.

 

Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim, who officiated the signing ceremony, said there were still opportunities for international-class hotels within the capital city. “I hope this project would be an eye opener for other international hotel operators,” he said.

Star, 17 Oct 2013

Property projects with GDV of RM2.5bil proposed for Section 13 PJ

Land values have risen more than 100% from 2010

Three property projects with an estimated gross development value (GDV) totalling more than RM2.5bil are being proposed for Section 13, a neighbourhood that is better known as a light industrial zone until recently.

Sources told StarBiz that two projects had received conditional approvals from the local authority while another was under consideration.

They said the projects that had received conditional approval pending their land-conversion applications from industrial to commercial titles were projects by Fraser & Neave Holdings Bhd (F&N) and a Sime Darby Bhd-IOI Corp Bhd joint venture.

The conversion process may take from six months to a year. Should these two projects be approved, they would bring the total number of on-going and approved projects to more than 10 in the 105ha leasehold neighbourhood.

According to a source, F&N’s two parcels of land totalling 5.14ha on the former Premier Milk and F&N Dairies plants on the corner of Jalan Universiti and Jalan Kemajuan, “could bring about one of the most significant and notable changes in land use in that area because of its location, combined land area and its varying components.”

The RM1.5bil F&N project, a joint venture with Singapore-based FCL Centrepoint Pte Ltd, would comprise 900 service apartments in three 32-storey blocks, 425 small office home office units, a 16-storey 250-room hotel, two office blocks of 19 and 23 storeys and a four-storey shopping mall podium.

The Sime Darby-IOI joint venture, located on a 2.2ha parcel along Jalan Kemajuan, would comprise a nine-storey podium with shop-offices at the bottom and two blocks of service apartments on top of the podium totalling 758 units with a GDV of RM557mil.

The third project, with an estimated GDV of RM600mil, would be developed by property-and-education firm Paramount Corp Bhd. This project would be located on a 2.1ha where KDU College is located along Jalan Universiti.

This project would comprise a four-storey podium together with a 29-storey office block and three blocks of serviced apartments of 10, 14 and 31 storeys on top of the podium totalling 454 service apartments and 64 small office home office units.

Real estate valuers have noted that land values in Section 13 have risen from about RM200 per sq ft in 2010 to more than RM400 per sq ft today.

A valuer said because of the potential for land-conversion in the neighbourhood (spurred by a 10-year special area plan mooted by the Petaling Jaya City Council), it would not be possible to compare land values there with another industrial zone.

He said the last transaction in Section 13 was for the DKSH land beside KDU College, which was sold for RM480 per sq ft to PJ Development Holdings Bhd.

A property consultant said the portion of Section 13 facing Jalan Universiti commanded a higher value although this might be debatable since there might be plans to have access to the Sprint Highway via Jalan Harapan-Jalan Semangat. Currently, access to the Sprint is via Section 17 and SS2.

The star, October 16, 2013