Singaporean investors have increasingly become the target group for local property developers, appearing at the top of the list of potential purchasers, especially of high-end, high-rise properties.
"Some of the Malaysian developers even launched their products in Singapore first before launching them here," says E & O Property Development Bhd's marketing and sales director K C Chong.
E & O Prop itself has taken it a step further by setting up a sales and marketing office in Singapore in mid-October.
"We have a lot of buyers from Singapore, be they Singapore citizens or people working or residing there. Also, because of its strategic location, we regard Singapore as our gateway to the international market for our Penang properties at present and our properties in Kuala Lumpur later," says Chong.
For now, much of the focus is on E & O Prop's Seri Tanjung Pinang development, but next year, projects in Kuala Lumpur will share the limelight.
Future property launches
Among the future launches in KL are serviced apartments on the estimated 4.13-acre site of the former St Mary's School on Jalan P Ramlee, in the heart of the Golden Triangle. The launch is slated for 3Q2008. E & O Prop entered into a 50:50 venture with the Lion Group in May last year to develop the site.
The plan is to build 600-odd units, with an estimated gross development value (GDV) of RM600 million, mainly for international travellers looking to work and live in the city.
On an adjoining 1.1-acre parcel, E & O Prop will develop a hotel, which it will manage, and offices. "It will be luxury in the truest from," Chong says of the two developments, which will have a combined GDV of about RM1 billion.
Declining to reveal the pricing, Chong quips: "Condominium prices in KLCC have already breached RM2,000 psf… but compared to Singapore, where prices are like S$5,000 psf, there seems to be a lot of room for prices to catch up here."
Considering that there are now more players in the high-end market, as more developers pander to the rising demand among foreign purchasers for such products, Chong believes that at the end of the day, one must be able to deliver quality products to discerning buyers.
"There is investor appetite for the Malaysian market because of its cheaper prices, but the delivery system must be spot-on. Foreigners, including Singaporeans, have been disappointed in the past by a few bad apples but if we can deliver, our properties can do well," he offers.
Nevertheless, he adds, foreign purchasers are still cautious, circumspect in what they want. "So, it is important to have a good track record in delivering good products, Malaysian properties would be a good market for Singaporeans. They are just across the Causeway, so why not buy Malaysian first?"
The Malaysian market will also continue to attract Singapore investors because the two countries have much in common. "The culture, the language, they are hardly foreign to us and there are so many Singaporeans with relatives in Malaysia," says Chong.
E & O Prop's other future projects in KL include a joint-venture development of serviced apartments, a condominium and offices in the carpark area of Wisma Damansara on Jalan Semantan. E & O Prop has tied up with Selangor Properties Bhd on the over six-acre project, which is expected to start next year or the next.
When asked about the developer's recently acquired land on Jalan Yap Kwan Seng, Chong says: "Hopefully, if we can get things going, we will have condominiums there in the next couple of years."
Ongoing projects in KL include Dua Residency, which is next to the Singapore High Commission. This, says Chong, has also attracted a large number of Singaporeans.
"On average, about 15% of our buyers are Singaporeans but recently, the figure has been creeping up. This is why setting up our office there is a good opportunity for us to interact with our Singapore customers," he adds. In the past, the ratio of local purchasers to foreign ones was 85:15 for E & O Prop. Now, it is almost 70:30, with almost half the foreign buyers coming from Singapore.
In fact, for its Waterfront Suites (serviced apartments) in Seri Tanjung Pinang, Singaporeans accounted for about 20% of buyers. Some 160 units, with built-ups of 853 to 2,568 sq ft and prices ranging from RM455,000 to RM1.239 million, were up for sale.
The higher foreign interest, says Chong, could be because the Malaysian market has now become more acceptable. "Given the high prices we can now charge, we can offer better products, because until you hit a certain price level, you cannot offer high-end products," he explains.
Malaysian properties are also more marketable because of the relaxation of foreign investment guidelines, the exemption of the Real Property Gains Tax and the Malaysia My Second Home (MM2H) programme.
"These measures have acted to our advantage. The MM2H is gaining momentum, certainly in Penang, although KL is the larger hunting ground. We can see the impact of these measures because at every launch, we see a good amount of foreign interest," says Chong.
High-rises or stratified properties such as condos are more popular to foreign buyers simply because they are more manageable.
In Penang, however, it is slightly different because many look at its properties as holiday homes or second homes. They also see Penang as a place to spend their retirement years. To this group of foreign purchasers, the landed properties in Penang are more attractive. The majority of them are still investors but the number of owners who buy to stay are increasing, especially those who like life on the island, for example the expats. "I think the MM2H has done its bit in that respect because there has been a lot of interest in the programme from purchasers. We also have younger people, those in their 30s to 40s, not just retirees, asking about it now. They seem to be surveying the region for second homes. Penang is attractive because of its heritage and its old-world charm," says Chong. - By The Edge
No comments