Real estate scene set to sizzle

By THE EDGE

The exemption of real property gains tax (RPGT) and other incentives with regards to foreign investment in Malaysia's real estate seems to be the impetus that is driving the market in recent months. In the KL city centre, agents have noted a high transaction volume and keen interest shown by investors, especially in the high-end condominium market.

Previndran Singhe of Zerin Properties says Malaysia has many plus points for foreigners looking to invest in property here. "Our ownership laws are clear and we are very transparent in our real estate dealings," says the CEO of the real estate agency that has affiliated offices in Singapore, New Delhi and Sydney.

Ireka Corp's Lai Voon Hon could not agree more. "Our transparent legal system in real estate, coupled with attractive financing and a solid mortgage system as compared to some other countries in the region, are just some of the factors that are attracting foreign buyers," he says.

Both Previndran and Lai feel that the real estate scene in Malaysia has gained a lot of attention in recent months and the market is heating up. Why shouldn't it, now that there is more room for potential capital appreciation with the exemption of RPGT, says Lai.

"We are also one of the few countries that enjoy high rental yields between 8% and 12% in areas like Mont'Kiara and some parts of Damansara," adds Lai.

The country's status as an "emerging market" also makes it an attractive place to invest in as many foresee that demand for real estate will grow with the country as it continues to develop.

So is Malaysia a "hot" country where real estate is concerned?

"We're still not that hot as Singapore where prices for luxury condos in Orchard Road have hit S$5,000 (about RM11,500) psf. However, we still have many good things to offer," states Datuk Richard Fong, executive vice chairman of Glomac Bhd. Fong says the cost of living in Malaysia is still relatively low, and many people also speak English.

"We may not have the number of expatriates that Singapore has, but that should not deter more foreigners from looking our way as our pricing is only 10% of the most expensive condo across the causeway!" adds Fong, who is also president of the International Real Estate Federation (Fiabci) Malaysian Chapter.

Hence, should the market even bat an eyelid at recent transactions in the vicinity of the Petronas Twin Towers changing hands at RM1,800 psf with some prime units going as high as RM2,000 psf? Is Malaysia's real estate underpriced?

Fong, Lai and Previndran will discuss the issue further at The Edge Investment Forum on Real Estate 2007. The topic will be moderated by Kumar Tharmalingam, secretary general of Fiabci Asia Pacific.

"The forum is something not to be missed, especially with three speakers who have vast experience in three different sectors of Malaysia's real estate," says Tharmalingam, adding that these are valuable speakers who do not easily make available their time.

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The forum will be held on Oct 27 at the Eastin Hotel, Petaling Jaya. It will start at 9am sharp. Registration starts at 8.30am. THE EDGE INVESTMENT FORUM ON REAL ESTATE 2007