News. Property PA INTERNATIONAL PROPERTY CONSULTANTS (KL) SDN BHD MONTH: FEBRUARY 2017 ISSUE: 02/2017

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1 MONTH: FEBRUARY 2017 ISSUE: 02/2017 Property News PA International Property Consultants is a registered real estate firm committed to providing a comprehensive range of property solutions to meet the needs of investors, occupiers and developers. PA INTERNATIONAL PROPERTY CONSULTANTS (KL) SDN BHD Phone: Fax: Website: research@pa.com.my The Research Division provides core real estate information to clients and internal departments in order to ensure accurate real estate decision-making. Our research team has completed market studies and research work for various ongoing development schemes within Klang Valley, providing comprehensive economic analysis, property market information, forecasts and consulting advice based on reliable sources. We constantly strive to present the most up-to-date market knowledge in order to ensure clients are wellarmed with sufficient data to make the right property decisions.

2 GENERAL ECONOMIC & PROPERTY MARKET 1. Tighter rules for foreign buyers (New Straits Times, 6 February 2017 ) The Penang government has introduced measures to control the purchase of properties by foreigners in state which included the following: - Allow foreigners to purchase only landed properties costing not less than RM2 mil on the island and not less than RM1 mil on the main land. - Foreigners were not allowed to purchase stratified properties costing less than RM1 mil on the island and RM500,000 on the mainland. - Foreigners had been subjected to an approval fee of 3% on top of the purchase price of the property bought by them since April PR1MA scheme to boost home ownership (The Star, 14 February 2017) Perbadanan PR1MA Malaysia has launched Special PR1MA End Financing (SPEF) scheme to improve loan eligibility for prospective buyers and also increase home ownership among the bottom 40% and middle 40% of Malaysian households. Under the SPEF scheme, home buyers are required to start repayment of the borrowed principal amount beginning from the sixth year. For the first five years, the home buyers are only required to pay loan interests via instalments. Alternatively, interested buyers also can opt for the Employees Provident Fund (EPF) Account 2 withdrawal option, by allowing the usage of future contributions in Account 2 to complement the monthly house loan instalments. 3. GDP expands quicker in Q4 (The Star, 17 February 2017) The Malaysian economy grew 4.5% in the 4Q of 2016, supported by the strong showing in the manufacturing and service sectors, while steady private spending helped to mitigate a decline in government spending. In overall, the economy expanded 4.2% in As measured by the annual change in the Consumer Price Index (CPI), Malaysia s inflation in the 4Q of 2016 rose by 1.7% compared to 1.3% in the 3Q, and was mainly driven by upward adjustment to domestic fuel prices during the quarter. 4. CPI up 3.2% in January (The Star, 23 February 2017) Malaysia s consumer price index (CPI) rose 3.2% to in January 2017 from in the corresponding period last year, with a 1.1% increase in a monthly basis. The rise mainly driven by the higher prices in transport, food and non-alcoholic beverages and recreation services and culture. The CPI is an index which measures the variation in prices paid by consumers for retail goods. 1

3 5. Developers holding back on land banking (The Star, 25 February 2017) The slowdown in the property market will see plenty of developers holding back plans to purchase new land bank this year, as commented by few consultants at the 2017 Property Market Outlook seminar organized by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS). Comments by Kenanga Investment Bank Bhd: Developers are cautions about overloading their books with land as sales may remain lackluster while they concentrate on cash flow and keeping their balance sheets light. However, SP Setia Bhd and Eco World Development Group Bhd are likely to continue heavy land banking. PEP president: The current growth level in residential prices is healthy and sustainable. The secondary market has weakened, adding however that many owners are still unwilling to sell below their entry cost. As for primary market pricing, developers are trying to maintain their asking prices due to higher replacement costs, by offering incentives and smaller built-ups to increase affordability. Finance Ministry: First timers should consider to purchase from secondary or the auction market as only 46.5% of the residential units under the primary market were priced below RM300,000, whilst close to 70% of the units in the secondary market were in that range during the first nine months of Kenanga Investment Bank Bhd: Overall residential transactions are expected to be similar to pre-2007 levels. The residential market is seeing a bottoming effect. The Malaysian residential absorption rate is at a 14-year low, while the major states are seeing 9-10 years low. The population analysis indicated that the incremental population base demand, namely those turning 30 years old or first home buyers, has gone back to pre-2007 levels and transactions are likely to start leveling off. Rental yields within the Klang Valley have been declining for both landed and high rise residential properties. SIGNIFICANT TRANSACTIONS AND PARTNERSHIPS 6. Mammoth Empire sells Empire Shopping Gallery to PHB, has option to buy it back in 5 years (The Edge Property, 1 February 2017) Property developer and asset manager Mammoth Empire Holdings Sdn Bhd (MEH) has signed the agreement last week to sell Empire Shopping Gallery in Subang Jaya, Selangor, to Pelaburan Hartanah Bhd (PHB) for RM570 mil cash. It is learnt that MEH has been granted a call option to buy back the shopping mall on the fifth anniversary of the sale. It also has the right of first refusal to buy the mall should PHB decide to dispose of it within the five years. The Empire Shopping Gallery has a gross built-up area of 600,000 sq ft and net lettable area of 350,000 sq ft spread over 5 levels. A total of 216 tenants occupy 98% of the shopping centre. The mall was reported to have a net rental yield of 6.5% to 7%. 7. IOI, MJR to build condos at Resort City (New Straits Times, 1 February 2017) IOI Properties Group Bhd s unit, Pine Properties Sdn Bhd, and MJR Investment Pte Ltd will jointly develop a 676-unit condominium project on a 3.88ha plot at IOI Resort City, Putrajaya. The company had entered into a shareholders agreement with MJR Investment to dispose of its 45% stake in PINE MJR Development Sdn Bhd to MJR Investment. IOI Resort City is an integrated development crafted by IOI Properties which comprises Puteri Palma Condo, Green Building Index-Certified IOI City Towers, Putrajaya Marriott and Le Meridien Putrajaya hotels, IOI City Mall, the biggest mall in southern Klang Valley, and Palm Garden Golf Club, home to an 18-hole championship golf course. 2

4 8. Prestariang buys 8-storey Cyberjaya property for RM25 mil (New Straits Times, 2 February 2017) The building is part of the ongoing mixed development project known as Star Corporate, Star Cyberjaya, which is currently developed by Joyful Star Sdn Bhd, a subsidiary of the Emkay Group. To-date, the building is 55% into completion and is expected to secure the certificate of compliance and completion by the 1Q of This building will house EduCloud operations, an integrated education platform which entails campus management, teaching and learning, entertaining, digital payment as well as online services and applications, following a tri-patriate memorandum of understanding with Alibaba Cloud and Singapore s Conversant Solutions Pte Ltd to build EduCloud. Pretariang Bhd which is a computer services company will play the roles of platform owner, app developer and serviced provider as well as training and certification delivery, among others. 9. Gadang to buy land for RM56 mil cash (The Star, 7 February 2017) Gadang Holdings Bhd s indirect unit, Gadang Construction Sdn Bhd, has entered into a sale and purchase agreement (SPA) with Nuvista Development Sdn Bhd to buy a 2.66-acre leasehold commercial land in Damansara Perdana in Petaling Jaya for RM55.7 mil cash. 10. PLB to sell land in Kulim for RM9.6 mil (New Straits Times, 8 February 2017) PLB Engineering is disposing of 5,963ha freehold agriculture land in Kulim, Kedah, to Tiong Nam Logistics Solutions Sdn Bhd for RM9.6 mil in cash. 11. Titijaya Land plans to buy Sri Komakmur for RM70.91 mil (The Star, 28 February 2017) Titijaya Land Bhd has proposed to acquire 3,000,000 ordinary shares equivalent to RM3 mil, representing the entire issued capital of Sri Komakmur Development Sdn Bhd for a purchase consideration of RM70.91 mil from Tan Chuan Cheong and Tee Tiong Lee. The proposed acquisition would enable Titijaya to gain access to acres of prime land which is located near Bank Negara building, Royal Malaysia Custom, Bukit Padang Hospital and Sabah Golf & Country Club. DEVELOPMENT LAND 12. Three-year RM1.2 bil Qi City project begins in Bandar Meru (New Straits Times, 2 February 2017) Green Venture Capital (GVC) has started work on the Qi City development in Bandar Meru Raya, near Ipoh. The RM1.2 bil project, spread across 10.52ha, is a mixed residential and commercial development comprising an 840-bed teaching hospital, 3 condominium blocks with 768 units, a lifestyle mall, a convention centre to cater for up to 1,500 people, and 460 units of hotel suites, and the Quest International University Perak campus, a subsidiary of Wawasan Qi Properties. The project is slated for completion by China Energy Hua Ren Industrial Co Ltd has been appointed as the turnkey contractor for the mixed development project. 3

5 13. Sunway Property eyes RM1bil sales this year (The Star, 15 February 2017) Sunway Property has acquired 8.45 acres of land along Jalan Peel, Cheras which is located opposite the Sunway Velocity Mall, and will develop Sunway Velocity TWO on it. With an estimated GDV of RM2 bil, more than 70% of Sunway Velocity TWO will comprise residential units, complementing Sunway Velocity Mall which consists of 75% commercial units. It will be developed over a 10-year period. The developer proposed to build linkways between Sunway Velocity and Sunway Velocity TWO within the two integrated developments. Sunway Velocity Mall was launched on Dec 8 and is currently 97% occupied. 14. RM750 mil mixed development on MCOBA land (New Straits Times, 22 February 2017) Sunrise Innovation Sdn Bhd, a wholly-owned subsidiary of UEM Sunrise Bhd will turn a 1.07ha site that currently houses the Malay College Old Boys Association (MCOBA) building in Jalan Syed Putra into a mixed development comprising 2 blocks of serviced apartments. Targeting mostly owner occupiers, especially families and upgraders from the surrounding areas, the unit sizes will range between 1,000 sq ft and 1,500 sq ft. In return, MCOBA will get a new building and a banquet hall with a capacity for 1,200 people. RESIDENTIAL PROPERTY IN KLANG VALLEY 15. Aset Kayamas Hamilton project sold out in less than four hours (The Edge, 1 February 2017) Project name Hamilton Developer Aset Kayamas Sdn Bhd Location Wangsa Maju Type of property Condominium (435 units) Tenure Leasehold Gross development value (GDV) RM250 million Launch date Preview on 28 January 2017 Built-up area 1,000 sq ft to 2,200 sq ft Selling price From RM498,000 onwards 4

6 16. O&C Resources set to launch its first property project (The Edge, 1 February 2017) Project name Developer Location Type of property Tenure Isola KLCC O&C Resources Sdn Bhd (Renamed after the emerging of OCR Land Holdings Bhd and Takaso Resources Bhd) Jalan Yap Kwan Seng Condominium (4 blocks with 140 units and a lift block) Freehold Gross development value (GDV) RM206 million Land area 14,000 sq ft net Launch date Scheduled to be launched by 1Q 2017 Built-up area Selling price 635 sq ft 1,625 sq ft Indicative at RM1,100 to RM1,600 psf Features Facilities and amenities Each unit will have at least one parking bay The units will be partially furnished Mechanical car parking system will be implemented Business centre Party suite Sky pavilion deck An outdoor screening area WiFi-enabled chill-out area Yoga deck Indoor gym 11m sky swimming pool 17. Chap Goh Meh revelry with buyers (The Star, 14 February 2017) Project name Developer Location Type of property Tenure Land area OLO Residence (final tower of D sara Sentral) Mah Sing Group Bhd Sungai Buloh Serviced residence (25-storey with 197 units) Leasehold Launch date Scheduled in 2Q ha (D sara Sentral is an integrated development comprising 4 blocks of serviced residence, 1 block of smart office versatile office (SoVo) and lifestyle retail shops). Completion date Expected to complete in 4Q 2018 Built-up area Selling price Features 782 sq ft 1,388 sq ft (7 layouts) From RM603,000 8 units per floor. Living room with double volume which will have high ceilings and high window panels. 50 units with dual key feature (856 sq ft)there will be a covered walkway linking to Kampung Selamat MRT station, which is located diagonally across from the development. The link bridge is expected to be completed in July

7 18. SP Setia to launch Trio next month (The Star, 27 February 2017) Project name Developer Location Type of property Trio By Setia SP Setia Bhd Bukit Tinggi, Klang Gross development value (GDV) RM571 million Land area Serviced apartment (3 towers with 914 units) Commercial spaces (42 units) A retail podium 2.22 hectares Launch date Targeted in March 2017 Completion date Expected in 4Q 2021 Built-up area Selling price Facilities & Amenities 656 sq ft 915 sq ft 1,216 sq ft RM412,000 RM737,000 A wading pool Viewing deck Yoga deck Gymnasium Playground Multipurpose hall 19. Putrajaya Condo project launched (The Star, 28 February 2017) Project name Developer Location Type of property Flora Rosa Putrajaya Homes Sdn Bhd Precinct 11, Putrajaya Launch date February 2017 Condominium (4 towers with 676 units) Completion date Scheduled to complete in August 2020 Built-up area Selling price Facilities & Amenities Type A: 1,399 sq ft Type B: 1,184 sq ft Type C: 829 sq ft Type D: 1,227 sq ft Type E: 2,250 sq ft From RM426,800 Infinity swimming pool and a learner pool Jogging and cycling tracks A gymnasium Surau All amid 11.29m acres of landscaped splendour Putrajaya Homes is offering a special PjHomes 10:90 scheme whereby purchasers only need to pay a 10% deposit to secure the property, with payment for the remaining 90% only commencing upon the issuance of the Certificate of Completion and Compliance (CCC). Purchasers also get to enjoy the PjHomes Advantage, which includes no legal fees for the sales and purchase agreement and no stamp duty on the memorandum of transfer. End-financiers participating in the PjHomes 10:90 scheme include Maybank, CIMB, Bank Rakyat and HSBC. 6

8 COMMERCIAL PROPERTY IN KLANG VALLEY 20. Genting Highlands to house country s second Premium Outlet (The Star, 13 February 2017) Genting Highlands Premium Outlets is a 50:50 joint venture between Genting Plantations Berhad and Premium Outlets, the outlet division of Simon Property Group. It will be the second outlet in Malaysia. Johor Premium Outlets, opened by Genting Simon Sdn Bhd in 2011, was the first premium outlet in Malaysia and South-East Asia. This first hilltop Premium Outlet Centre in South-East Asia will have 150 designer and brand-name stores offering impressive savings of 25% to 65% daily. PROPERTY IN SABAH & SARAWAK 21. Titijaya, CREC in tie-up for RM575 mil Kota Kinabalu project (New Straits Times, 27 February 2017) Titijaya Land Berhad has a joint venture with China Railway Engineering Corp (CREC) Development (M) Sdn Bhd on a mixed-use commercial hub in Sabah. The Shore is a 25-storey project that has a gross development value (GDV) of RM575 million and set to be the tallest building in Kota Kinabalu city centre upon completion. The project will take between 3 to 4 years to complete and construction is expected to start this year. The Shore will occupy 0.73ha from the total area of 30.5ha which belong to Sri Komakmur Development Sdn Bhd that Titijaya acquired their share capital earlier. The Shore is expected to take three to four years to be completed and construction to start sometime this year. At the same time, a serviced residence management agreement was also signed between Titijaya Land and The Ascott Ltd to allow the latter to manage the serviced residence components of The Shore for a period of 15 years. INFRASTRUCTURE AND FACILITIES 22. Matrix in hospital tie-up with Taiwan s Changhua (New Straits Times, 27 February 2017) Matrix Concepts Holdings Bhd, which is the master developer of Bandar Sri Sendayan, Negeri Sembilan, will partner Taiwan s Changhua Christian Hospital group to build a RM200 million 400-bed hospital in the 2,118ha township. The 400-bed hospital is to cater for the current population of more than 30,000 residents with a future target of more than 120,000 by The hospital is part of a long term development of Bandar Sri Sendayan, which is fast rising playing host to residential, commercial, industrial, an international school and the Royal Malaysian Air Force new training and academia centre. Changhua Christian Hospital, established in 1896 in central Taiwan, offers more than 3,200 beds and the full range of specialty departments with specialists in medicine, nursing, medical technology and management. 7

9 LEISURE & HOSPITALITY 23. Hilton boost for i-city development (The Star, 25 February 2017) The DoubleTree by Hilton i-city hotel will take up 23 levels of a 42-storey tower in I Bhd s i-city development in Shah Alam, while the remaining floors will comprise 200 units of home suites. The 300-room 4-star hotel will have a gross development value of RM250 mil and is slated to be opened in Construction began in 2016 and pilling works are in progress. The hotel will feature the first 360-degree LED digital canvas in its grand ballroom, supported by stateof-the-art light and sound systems that surround its circumference to provide guests an unparalleled experience. The hotel will have an 11,000 sq ft of function space spread over 2 floors, 6 versatile meeting rooms and suites starting from 450 sq ft. The 200 units offered for sale will range from 480 sq ft to 880 sq ft. Price starts from RM480,000 per unit with a GDV of RM124 mil. All the units will come fully-furnished (similar to the hotel) and be an intelligent home, featuring Internet of Things (IoT) technology. The other international hotel in I-City is the 3-star Best Western, which was opened in The Best Western has an average occupancy rate of around 80%. OTHERS 24. Mah Sing s Icon City gets Cyber-centre status (The Star, 21 February 2017) Mah Sing Group Bhd has obtained Multimedia Super Corridor (MSC) Malaysia Cyber-centre status for its Icon City in Petaling Jaya. Cyber-centres function to create an ecosystem that fosters a competitive environment to attract, nurture and retain information technology-enabled industries. The Cyber-centre status allows companies within Icon City to enjoy competitive financial incentives, namely the pioneer status which is a 100% tax exemption for up to 10 years or an investment tax allowance for up to 5 years and duty-free importation of multimedia equipment. The status will also give companies the freedom to source capital globally for MSC Malaysia infrastructure, freedom of ownership by exempting companies from local ownership requirements, the right to borrow funds globally, the right to employ local and foreign workers, and no Internet censorship. With an estimated gross development value of RM3.2 bil, Icon City, the 20-acre integrated development, is located at the intersection of Federal Highway and Damansara-Puchong Highway. 8

10 25. BBCC developer signs deal for Zepp concert hall (The Star, 11 February 2017) BB Development Sdn Bhd, the developer of the Bukit Bintang City Centre (BBCC) project, has signed an agreement to lease with Zepp Hall Network Inc (Zepp Hall), for the latter to operate a Zepp branded concert hall at BBCC. Zepp Hall is a subsidiary of Sony Music Entertainment (Japan) Inc (Sony Music Japan) and its core business is concert venue operations. Besides bringing a refreshing and unrivalled experience for concert goers, Zepp Hall will introduce their first-of-its-kind VIP boxes in their venue in BBCC. The Zepp concert hall will span over 70,000 sq ft, making it the anchor operator in the Entertainment Hub which will also house a multi-hall Cineplex, the Malaysian Grand Bazaar and a Banquet Hall at BBCC and is slated to open by The entertainment hub is directly connected to a 1.4 million sq ft lifestyle retail mall. BBCC sits on 19.4 acres of land and will have a total gross built-up area of 6.7 million sq ft, and will comprise six blocks of serviced apartments, a retail and entertainment block, a 4-star hotel with branded residences, a strata office and an 80-storey three-in-one signature tower housing a 5-star hotel, luxury residences and corporate offices. -END- 9

Construction commenced and ground breaking ceremony held for Mitsui Shopping Park LaLaport Kuala Lumpur (tentative name) Key Points of the Project

Press Release June 20, 2017 Mitsui Fudosan Co., Ltd. Construction commenced and ground breaking ceremony held for Mitsui Shopping Park LaLaport Kuala Lumpur (tentative name) The first, and the flagship