The party is still on

From left: Fong, Kumar, Chan, Christopher Hahn of Rahim & Co, Ang, Jagan, FD Iskandar, SP Setia Bhd COO Datuk Voon Tin Yow, Ho, UOB Malaysia CEO Chan Kok Seong, Previndran, The Edge editor-in-chief Ho Kay Tat and The Edge executive editor Au Foong Yee.

Real estate investors in Malaysia may be a bit more cautious now, what with the US subprime crisis and the slowdown in the world economy, but the party is still on, according to speakers at The Edge Investment Forum on Real Estate 2008, held at the Eastin Hotel in Petaling Jaya on May 10.

More than 500 people attended the forum, which was into its second year, to listen to the views of experts in the industry.

Entitled "What's hot; what's not", the forum opened with Previndran Singhe, CEO of Zerin Properties, giving his predictions for the Malaysian property market, and whether it was time to exit it.

According to him, Malaysia's property market has another three years of positive growth, albeit slower. Good quality products in good locations will still see rapid growth, he says, adding that where pricing is concerned, Malaysia is far from overpriced.

The forum also addressed the issue of whether to invest in commercial properties or residential properties. This paper was presented by the regional president of Fiabci (International Real Estate Federation) Asia-Pacific, Kumar Tharmalingam. He says both investments have their strengths and weaknesses and that on paper, commercial real estate is a better option although landed property is a better investment for the next generation.

Kumar also suggests that those who cannot afford to invest on their own should consider partnerships or private equity.

Ho Chin Soon, director of Ho Chin Soon Research, who spoke on the topic of who is buying land and where, and whether the hot spots are still hot, says there is no doubt the Klang Valley remains the main growth region in Malaysia. (At the inaugural forum held in October last year, he had said the Klang Valley will remain the country's top growth area for many years to come.)
Ho cites the constant activity in the Golden Triangle and how parcels of land keep changing hands there. According to him, the Arabs are not the only foreigners who are buying, but the Koreans and Singaporeans have also joined the fray.

Robert Ang, managing director of Savills Rahim & Co, whose paper was on buying real estate overseas and its rewards and pitfalls, says investors need to pay close attention to foreign exchange rates and follow conventional wisdom when it comes to observing property cycles. Local knowledge of the country where one is buying is also important, especially changes in official policy, as this would affect one's investments, he adds.

The forum also featured a panel discussion on the real estate success story of the Kuala Lumpur City Centre (KLCC). Three developers with projects in KLCC represented by their chiefs, gave an overall analysis of the market in the KLCC. The panellists were Datuk FD Iskandar Mohd Mansor, group managing director of Glomac Bhd; Datuk Jagan Sabapathy, CEO of Bandar Raya Developments Bhd; and Datuk Chan Sau Lai, executive chairman of Beneton Properties Group. The discussion was moderated by Datuk Richard Fong, Glomac's group executive vice-president and president of Fiabci Malaysian chapter.

FD Iskandar says Malaysia finally has a focal point in the KLCC, but he feels that the country is not being "sold properly" to attract foreign investment. He suggests that the government place emphasis on making the KLCC an Islamic financial hub, and allow the promotion of the Malaysia My Second Home programme to come under the Prime Minister's Department instead of the Tourism Ministry.

Agreeing with FD Iskandar that KLCC has indeed put Malaysia on the world map, Jagan says what's happening with prices in the area is real and not hype. He adds that land is being bought up very quickly there and prices have nowhere to go but up.

Chan, whose company is behind Stonor Park, the first high-end condominium in the KLCC, says this is the place to be today. He adds that as land prices escalate, developers will have no choice but to shrink the size of properties on offer.

Fong concludes that the KLCC is still hot and that those looking to invest there should do so now.
The Edge Investment Forum on Real Estate 2008 was organised by The Edge and presented by United Overseas Bank. The forum was supported by S P Setia Bhd, ranked No 1 in The Edge Top Property Developers Awards for three consecutive years since 2005.

By The EDGE Malaysia - (Article from The EDGE Investment Forum On Real Estate 2008)
* Article posted on 19th May 08 *