Higher floor price may hurt second-home programme

The government's move to raise the minimum property purchase price for foreigners may hurt its campaign to promote Malaysia as a second home.

The Economic Planning Unit released a statement yesterday, saying that the ruling, first announced in June 2009, is effective January 1 2010.

In June, the Prime Minister Datuk Seri Najib Razak said the minimum threshold for acquisition of residential units by foreign interest at RM250,000 and above, would be increased to RM500,000 and above come January 1 2010.

It was part of a wider deregulation of FIC guidelines.
Malaysia My Second Home programme or MM2H is an international residency programme promoted by the Ministry of Tourism to allow foreigners to live in the country on a long-stay visa of up to 10 years.

"It won't be so much of a problem for Kuala Lumpur, where properties easily cost half a million ringgit, but states like Terengganu and Ipoh ... where can you find properties in that range?" International Real Estate Federation (FIABCI) Malaysia president Datuk Richard Fong told Business Times yesterday.

A survey done by FIABCI found that half of foreign purchases were for properties between the price of RM250,000 and RM500,000.

"So you are really wiping out half of the market by increasing the threshold limit," Fong said.

Some 2.5 per cent of total property investments are by foreigners.

However, real estate firm Zerin Properties chief executive officer Previndran Singhe told Business Times that it would not affect the property market, as foreigners are already buying properties of RM500,000 and above.

Real Estate and Housing Developers Association (REHDA), meanwhile, concurred with FIABCI's view.

"The ruling will not affect the property agents, who mainly look at Kuala Lumpur, but I have to look at it on a national level and it will affect outlaying areas such as Terengganu and Malacca," REHDA president Datuk Ng Seiong Liong told Business Times.

While applying the rule to Kuala Lumpur would be fine, a blanket policy for the whole country would hurt foreign property investments, he said.

By Business Times

MK Land plans RM150m rights issue

PROPERTY developer MK Land Holdings Bhd plans to raise some RM150 million from a rights issue of equity-linked instruments.

Hong Leong Investment Bank Bhd told Bursa Malaysia that the proceeds will be used to partly repay bank borrowings and for working capital.

A detailed announcement is expected to be made once the terms of the rights issue have been finalised.

By Business Times

AmanahRaya REIT eyes 2 properties

AmanahRaya REIT has proposed to acquire two properties valued at a total of RM227 million from Amanah Raya Bhd, as trustee for Kumpulan Wang Bersama.

The properties concerned are the six-storey Selayang Mall at Gombak for RM128 million and a 13-storey stratified office building which forms part of the Dana 1 Commercial Centre known as Dana 13 for RM99 million.

In conjunction with this, AmanahRaya REIT proposed to undertake a proposed placement of such number of new units to raise proceeds of RM119 million at an issue price to be determined later.

It also proposed to undertake an increase in the existing approved fund size of 431,553,191 units, by such number of placement units to be issued under the proposed placement.
"The proceeds arising from the proposed placement of RM119 million will be utilised to part-fund the proposed acquisitions and defray the estimated expenses relating to the proposals," AmanahRaya REIT said in a statement today.

According to the company, the proposed acquisitions are in line with its investment objective, which is to provide the unitholders with stable distribution income by acquiring yield accretive assets and good quality properties with strong recurring rental income.

"The acquisition will increase AmanahRaya REIT's total asset value from RM752.53 million to about RM1,007.49 million," it said.

It added that the acquisitions are expected to be implemented and completed between the first and second quarter of 2010.

By Bernama