"Property industry recovering slowly"

PETALING JAYA (Jan 30, 2014): Despite the shock to the property industry following the Budget 2014 announcement in October last year, things are slowly recovering and demand for housing remains steady, said Perfect Eagle Development Sdn Bhd CEO Puan Sri Alice Su (pix).

“Malaysian property prices are still significantly below that of Singapore and Hong Kong. In the Klang Valley especially, with a population of 7.2 million, there will still be demand for housing hence the demand is still constant,” she told SunBiz in an interview.

Su said the industry has been good for the past few years due to easy access to loans and low interest rates. The house price index has accelerated in the last six years due to high liquidity while property price hikes in places like Singapore and Hong Kong have made houses in Malaysia cheap in comparison.

“Towards the tail-end of 2013 (though), there was a lot of pressure on the government to tackle the fiscal deficit, (especially with) the outlook downgrade by Fitch Ratings, and the government has taken many steps to address the fiscal issues,” Su said.

Budget 2014 contained a revision of the real property gains tax (RPGT), an increase in minimum property value for foreign buyers to RM1 million and a ban on loans for Developer Interest Bearing Scheme (DIBS) property projects.

Prior to that, there were other measures taken by Bank Negara Malaysia (BNM), such as loan to value cap of 70% for the purchase of the third property onwards and a reduction in loan duration from 45 years to 35 years for mortgage loans and from 25 years to 10 years for personal loans.

“Though there was a momentary shock to the industry after the Budget 2014 announcement, things are slowly getting back to normal.

“However, with the large number of property developments by various developers, we believe that we have to carve a niche for ourselves. This is why Perfect Eagle Development has taken steps to brand itself as a developer that is progressive and community centric that focuses on sustainable living.

“We believe that with current city dwellers’ hectic lifestyle, there is a need for a balance that we intend to provide,” said Su.

Established in 2002, Perfect Eagle Development has completed RM300 million worth of properties to date within its first two projects – Amber Avenue at Dataran Pandan Prima in Kuala Lumpur and Aquila @ Alam Sutera at Ijok, Selangor.

“This year, we intend to launch the remaining blocks of the O2 Residence and at the same time firm up the commercial development at the next phase of O2 City @ Puchong South,” Su said.

O2 City is a RM400 million mixed development in Puchong, Selangor. Spread over 64 acres, the project comprises serviced residences, boutique offices, retail units and a hotel. It will be developed in eight phases over eight to 10 years.

The development is currently in the first phase, namely, O2 Residence, comprising 508 units in six blocks over 13.5 acres.

Future phases include a commercial retail mall with 800,000 sq ft of net lettable area, a 260-room five-star hotel, a Grade A corporate office tower with 38 to 40 floors and four to five towers of serviced residences.

“The next five years will be a crucial period for Perfect Eagle Development as during this time we are moving into unchartered territory of trying to provide a development concept that is progressive yet sustainable,” said Su.

She said the key feature of O2 City’s future phases is to create a community-sized commercial space that is sustainable yet business-friendly.

Su added that while it is focusing on developing O2 City, it is also on the lookout for potential land in the Klang Valley.

"Property industry recovering slowly"