COVER STORY 2

Recently on Friday, 25th October 2013, Budget 2014 was tabled by the Prime Minister, Dato’ Sri Najib Tun Razak to the Parliament. The budget tabulated includes new ruling and taxes that affects the property market starting 1 January 2014.

In line with the government initiative to curb speculation, stabilise and make the property market more affordable to local property buyers, the government has revised the rate of Real Property Gains Tax (RPGT) imposed on both the local and foreign property buyers alike. RPGT is applied on the capital gains when the buyers wish to dispose a property. The revised RPGT rates are as Table 1.

Although there is a significant increase in the rates of RPGT for both locals and foreign buyers, for the first 3 years both are taxed at 30%. While locals are required to pay a lower RPGT of 10% to 15% in the fourth and fifth year respectively, foreign buyers are still taxed at 30%.

On the downside, this could dampen the foreign investors interest in a short

by Aisyah Mahzan & Veena Loh

BUDGET 2014 PROPERTY TAX CHANGES

to medium term of investments in Malaysian properties and likewise for the speculators and non-genuine buyers. Speculative investors are an important group of buyers for Malaysian property developers as they help to speed up sales for new launches. When the RPGT takes effect, we may see more investors choosing to hold on to their money.

The move could indirectly soften prices in the high-end properties and make developers look more into catering towards the affordable market segment where the demand is strong. The government also revised the current minimum property price that can be bought by foreigners from RM500,000 to RM1,000,000. However, individual state government may still have the final say on this new ruling.

This is still considered reasonable compared with Singapore which imposed Seller Stamp Duty (SSD) if the property is sold within the first four years after property acquisition based on the selling price or market value whichever is higher as tabulated below:-

For example:A property worth SGD1 million (RM2.5 million) was bought in 2013 with a capital appreciation of 5% after one year would still be a viable proposition for a property owner in Malaysia rather than in Singapore.

After 1 year, if the property appreciates by 5% and the owner wishes to dispose of it, the computed taxes in Singapore and Malaysia are the following:

(continued next page)

On a good note, since the RPGT is not an upfront tax, it would not have a significant effect on owner-occupiers and long-term investors. The increment will help to subdue speculation and stabilise the property prices in Malaysia. Indirectly, it is a good move by the government in preventing a possible property bubble from arising.

“The increment of RPGT will

help to subdue speculation and

stabilise the property prices

in Malaysia.

Local/Residence Foreigner/Non-residence

Table 1: Real Property Gain Tax Comparison Table

Source: MPI Research

Before Budget 2014 After Budget 2014

Year 1 15% Year 1 30%Year 2 15% Year 2 30%

Year 3 10% Year 3 30%

Year 4 10% Year 4 20%Year 5 10% Year 5 15%

Year 6 & above Exempted Year 6 & above Exempted

Before Budget 2014 After Budget 2014

Year 1 15% Year 1 30%

Year 2 15% Year 2 30%

Year 3 10% Year 3 30%Year 4 10% Year 4 30%

Year 5 10% Year 5 30%

Year 6 & above Exempted Year 6 & above 5%

Seller Stamp Duty (SSD)

Year 1 16%

Year 2 12%

Year 3 8%

Year 4 4%

Year 5 & above Exempted

Table 2: Seller Stamp Duty (SSD) rate in Singapore

Source: MPI Research

COVER STORY 3

(from previous page)

This means that it is still viable to dispose the property in Malaysia and still reap some profit whereas it is a loss-making proposition to do so in Singapore.The government has also abolished the Developer Interest Bearing Scheme (DIBS) to restrain the developers from including the interest payment during construction in the house price. All institutions are also forbidden to give any end financing for DIBS projects.

During the Budget 2014, the government introduced a new taxation rate which will replace the current sales tax and service tax with Goods and Service Tax (GST). The GST rate will be at 6% effective 1 April 2015. On a good note, GST will not be imposed on the sale, purchase and rental of residential properties.

We could conclude that the latest budget tabled by the Prime Minister are deemed necessary to ensure stability in the property market and give sufficient

leverage for the market to rebalance itself to prevent property bubbles from happening in the near future. Despite the doubling of RPGT, Malaysia is still comparatively attractive to foreign investors as the rates are lower compared with Hong Kong and Singapore. While we may see a slowdown in foreign property buyers buying local properties, the revised RPGT is less likely to leave a long term or deep negative impact as Malaysian property remain relatively competitive and of high quality in the region.

Table 3: Real Property Gain Tax Comparison Table

Singapore Malaysia

Price in 2013 SGD 1.0million RM2.5 million

Price in 2014 SGD 1.05million RM2.65 million

Capital appreciation SGD 50,000 RM125,000

SSD/RPGT @ 1st year SSD@16% RPGT@30%

Payable SSD/RPGT SGD 168,000 (RM 420,000) RM37,500

Capital Gains minus taxes accruing to owner of property Net Loss of SGD 118,000 Net Gains for RM 87,500

Source: MPI Research

FOREIGN INVESTOR PERSPECTIVE 4

Asian REITs have been a wonderful success story. Since the launch of the first J-REIT in September 2001 market capitalization has grown to US$233 billion as at 30th September, based on the TR/GPR/APREA Composite REIT Index.

The largest Asia Pacific REIT markets continue to be Australia (37%), Japan (31%), Singapore (16%) and Hong Kong (8%) which together account for 92% of Asia Pacific REIT market capitalization.

Figure 1 shows how dramatically the Asia Pacific REIT market rebounded from the GFC impact and is much larger than it was going in to the GFC. The reason for this is a combination of a number of new IPOs coming onto the market and growth of existing REITs, particularly in Japan and Singapore.

We can expect the Asia (ex-Australia) REIT market to continue to grow strongly, which will help to sustain institutional investment in Asian real estate. This is for a number of reasons. One, the level of securitization of investment grade real estate in Asia is very low.Compared to countries like the US and Australia,

a relatively small proportion of investment grade real estate in Asia is held in REIT-type vehicles. While Japan is the biggest market in the Asian REIT market scene, domestically REITs are still a very small component of the Japanese real estate universe. If the level of securitization of Asian investable real estate was at US levels, the market capitalization of the sector would be over US$500 billion. As a consequence, Japanese REITs will become a significant component of the regional capital markets and provide plenty of opportunity for global investors.

Another reason why we can expect this market to continue to grow is that a lot of investment grade real estate in Asia continues to be held in private hands and on company balance sheets, which will not necessarily be sustainable longer term.

Another reason why can expect the Asian REIT markets to grow is that, over time, we can expect REIT-type structures to emerge in the other two major economies, China and India. Neither country currently has a REIT regime which has led to assets being listed in Singapore and Hong Kong.

The impact that the advent of REITs in these countries will have is borne out by some recent research APREA commissioned on the size and liquidity of the Asia Pacific real estate markets.

The Asia Pacific real estate markets currently account for over US$7 trillion in investable real estate, being 27% of the global real estate market. This Asia Pacific real estate market share is expected to increase significantly to 39% in 2021 and to 49% in 2031, with the Asia Pacific real estate market size projected to increase from US$7 trillion to US$45 trillion by 2031. This increase in the Asia Pacific real estate market

by Peter Mitchell

THE CONTINUING GROWTH OF REITS IN ASIA - WHERE TO FROM HERE

share will be driven by the significant role of the developing Asia Pacific real estate markets, which are expected to see an increase in global real estate market share from 10% to 39% by 2031.

According to this research, the Asia Pacific region will have five of the top 12 global real estate markets in 2021, compared to only three of the top 12 global real estate markets in 2011. This reflects significant real estate market growth over this period from China (first in terms of market growth, based on US$ growth), India (second), Indonesia (7th ), South Korea (8th ) and Japan (10th ). This sees five of the top 10 major real estate growth markets over 2011-2021 being in the Asia-Pacific region and over 50% of the global real estate market growth coming from the Asia Pacific region over this period.

The Securities and Exchange Board of India introduced a proposal for a REIT law in December 2007 but for a long time after that nothing much happened. However, APREA has been engaging

(continued next page)

“The Asia Pacific real estate

markets currently account for 27% of the global real

estate market.

Figure 1: Market Caps of Asia Pacific REIT Market (2009 - 2013)

1,9001,8001,7001,6001,5001,4001,3001,2001,1001,000

900800

Jan’09 Jan’10 Jan’11 Jan’12 Jan’13

Source: APREA

CountryNumber of

REITsMarket Cap.

(US$ bn)

Australia 29 85.4

China 3 5.4

Hong Kong 6 17.5

India 1 0.5

Indonesia 2 1.4

Japan 40 71.4

Malaysia 14 7.3

New Zealand 4 3.2

Singapore 21 38.0

Taiwan 6 2.8

Total 126 232.9

Table 4: Asia Pacific REIT markets

Source: APREA

FOREIGN INVESTOR PERSPECTIVE 5

(from previous page)

closely with SEBI over the last couple of years and we have submitted a series of proposals. This has led to the introduction of a draft REIT regulation in October 2013 and we are hopeful that legislation will be passed before next year’s election.

China currently has an estimated US$1.864 billion of investable real estate, constituting 7% of the global market. In the past there have been a number of uncoordinated private projects aimed at developing a model REIT law. The measures that the government has adopted in recent years to cool the property market have had the effect of taking REITs off the table for the time being. However, this is showing signs of changing.

As part of the government’s efforts to encourage private sector participation in affordable housing it has been announced that an affordable housing REIT is being developed. In addition, it continues to be argued that REITs should

be distinguished from the activities that have led to heat in the residential market and in fact can be contrasted. REITs seem to be coming back onto the agenda and it is only a matter of time before we see a REIT market in China.

However, a challenge confronting all emerging markets is the need for credible and robust supporting regulatory infrastructure. Whenever a REIT law is introduced in India and/or China, it is likely to be some time before the market gains acceptance beyond local investors.

“A challenge confronting all

emerging markets is the need for credibel and

robust supporting regulatory

infrastructure

Issues that need to be addressed include title assurance/security, availability of information and credibility of valuations. Having said that, most emerging markets in Asia have made significant strides in improving levels of transparency and corporate governance in recent years.

Of the other markets in Asia that don’t yet have REIT markets, the Philippines enacted a law in 2009 but unfortunately it is not in operation owing to supporting regulations not having been promulgated. This has been unfortunate given the strong interest on the part of international investors in Philippines real estate and the IPOs that were in the pipeline. It is possible that we may need to wait for a change in administration before REITs finally come into being in the Philippines.

HIGHLIGHT 6

East for the fastest elevator on Earth. The business community in Malaysia has built a certain level of trust and goodwill with both the Middle East and China.

Not to be outdone, Malaysia is expected to build another tower taller than the Petronas Twin Towers, called Menara Warisan. The construction and potential occupation of the building by PNB is set to start soon, resulting in a 118-storey skyscraper, equipped with offices, shopping facilities and apartments. With new skyscrapers like this, it is in all likelihood that there would be considerations to some of these World’s Fastest Elevators.

Going GreenUsing green technology, the Hyundai elevators are designed to have high energy efficiency through low consumption of resources and the use of recycled resources, thereby consuming 5% less power than most. It does not have condenser, reactor, recharging circuits, resistance for brakes and capacitors, which are harmful to environment. Hyundai chose a model which has an energy recycling inverter

that reduces 60% of energy loss during operations.

Mobile HRTSHyundai elevator launched the world’s first technology ‘Mobile HRTS’ which interlocks remote control systems with smartphones this year. HRTS (Hyundai Real Time Service) has a remote control system which allows customers to check the status of their elevators online (24/7).

Safety checks and breakdowns can be fixed in real time. Customers can easily monitor the status of elevators, performance reports, customer service requests, and monthly maintenance fee statements on their smartphones.

As long as countries race to the top in building the tallest skyscrapers, there will be demand for fast elevators. Continuous advancement in the technological progress with increased emphasis on green technology and connectivity with consumers will be the key marketing features of future elevators.

by Brian Lee & Veena Loh

Asian Skyscrapers and the World’s Fastest Elevators

Fastest on EarthTopping the previous Guinness World Record’s fastest elevator 2011 by Otis, Hyundai Elevator’s ultra high speed elevator (64.8km/hour) has been introduced as ‘The Fastest Elevator on Earth’ in the special report ‘Fastest on Earth’ edited by an affiliated organization ‘the IEEE SPECTRUM radio’. Fast elevators will be demanded by countries racing to build skyscrapers to keep up with the boom in Asia.

There are now many new skyscrapers under construction worldwide. The earliest to complete will be the Shanghai Tower in 2014. It will be the second highest skyscraper in the world, just behind Dubai’s Burj Khalifa with a Mitsubishi elevator installed that runs at 64km/hour, second to none other than Hyundai.

Seven out of the top ten tallest buildings are being constructed in China and one in Saudi Arabia. Hyundai Malaysia strategically located in Malaysia mobilise its marketing team (using Malaysian mandarin speaking staff) to capture the new markets in Asia. Malaysia also has good relations and network in the Middle

“Customers can easily monitor the status of elevators,

performance reports, customer service requests,

and monthly maintenance fees on

their smartphone.

Brian Lee is the Chief Executive Officer of Hyundai Elevator Malaysia Sdn Bhd. Kindly contact Hyundai Elevator ‘s hunting line at +603-6733 1919 for more details.

Taipei 101Taipei, TaiwanElevator : OtisSpeed: 60km/h

Yokohama Landmark TowerJapanElevator : MitsubishiSpeed: 60km/h

Burj KhalifaDubai, UAEElevator : OtisSpeed: 36km/h

Shanghai World Financial CenterShanghai, ChinaElevator : ToshibaSpeed: 36km/h

Rank Building LocationHeight

(metres)Expected completion

1 Kingdom Tower Jeddah, Saudi Arabia 1,000 2019

2 Ping An Finance Center Shenzen, China 660 2016

3 Wuhan Greenland Center Wuhan, China 636 2017

4 Shanghai Tower Shanghai, China 632 2014

5 Goldin Finance 117 Tianjin, China 597 2016

6 Lotte World Tower Seoul, South Korea 555 2015

7 One World Trade Center New York City 541 2014

8 The CTF Guangzhou Cuangzhou, China 530 2017

9 Tianjin Chow Tai Fook Binhai Center Tianjin, China 530 2016

10 Zhongguo Zun Beijing, China 528 2018

Table 5: Top 10 tallest buildings under construction worldwide

Source: Council on Tall Buildings and Urban Habitats

INVESTOR PREFERENCES 7

USA is bogged down in shut down and debt ceiling deliberation. According to IMF Managing Director, Christine Lagarde shared with Wall Street Journal, “Europe is like a beautiful ship that has been pampered for the soft seas, but not completely finished for rough waters, If you don’t have a completely finished ship and you start sailing in rough waters, it’s as if you had a wreck.”

ECONOMIC FINANCIAL INVESTMENT Values [EFI Values] Savvy and sharp investors are making a strong case on their strategic investments globally. At IQI Group holding, we have coined the term EFI i.e. Economic, Financial and Investment Values for our esteemed clients who can comprehend our point while making investments in Malaysian real estate. It conveys the economic health levels meaning macro perspective of the country and stability of the government to the clients who are taking position in Kuala Lumpur properties.

Financial is current state of your cash flow and lastly Investment is always a long term idea when clients are making real estate investments. Savvy clients have believed in this concept and are quite happy to make investments in Malaysian properties not only for themselves but also for their future generations. According to Kashif Ansari – CEO IQI Group, returns on real estate capital appreciation in the last 2 years in Kuala Lumpur ranges from 5% to 10% while rental yield stands at 4% to 5% on an average. The market is stable and healthy for savvy investors.

BUBBLE vs. BULL RUN INVESTMENT There is a clear difference between Bubble and Bull Run. In a bubble investment, all investors jump into the asset class such as real estate, without

HOW KL PROPERTIES DIFFER FROM DUBAI

understanding the fundamentals. In a bull investment, investors take strategic analysis, understand the economic fundamentals and make investments accordingly in real estate.

Foreign investors take cue from local investors in the Bull market. At present, local investors are still making investments in various projects in Malaysia, making an appealing case for global investors to take position in the real estate as well. Why would Malaysian property move and appreciate in a structured manner? There are few solid reasons to ponder upon:

1. Government backed - It will never fail, a few big names are KUALA LUMPUR, ISKANDAR and CYBERJAYA

2. Big investors - Chinese, Singaporean, Japanese, Indian, Korean & Indonesian

3. Cash Saving - Most investments are made through sustainable savings

4. Sovereign Wealth Funds - China’s CIC , Singapore’s GIC

5. Oil Hub - The Oil and Gas market is emerging in this region. This is a hotspot for the energy market in the Iskandar Flagship D&E

6. Healthcare, education and recreational facilities are on the upsurge in the region

7. Entertainment projects which are getting hot with some big players moving in the region e.g. Legoland Malaysia

FINAL WORD FOR LONG TERM SMART INVESTORSThe Malays ian government is aggressively promoting KUALA LUMPUR, PENANG, ISKANDAR, CYBERJAYA and other upcoming property hotspots to attract local and foreign investors alike. The government is working closely with some high valued developers to make Malaysia the new gateway for Asian investors. Malaysia is poised to become the hotbed of Asia Pacific REAL ESTATE market in the next 5 to 10 years. This area is ready to become the hub of investors’ networking in Asia. Malaysia is a Five Star country positioning for Seven Star League.

Shan Saeed is Chief Economist at IQI Group, a leading prop-erty and investment company in Malaysia, Singapore, Hong Kong, UK, US and Dubai. Shan blogs at www.economistshan.blogspot.com and can be reached at saeedshan@gmail.com OR shan.saeed@iqi-group.com

Macro Outlook - Malaysia 2013 / 2014I was invited to attend the CNBC summit in Kuala Lumpur with Prime Minister, Dato’ Seri Najib Tun Razak [Guest of Honour] on September 19, 2013 when the Ringgit was trading 3.33 against the USD. I told the anchor, as an Economist, that I did not believe the rating agencies which downgraded Malaysia’s outlook since they [Rating agencies] were behind the curve in the last 10 years. I believe Malaysia is a very stable and safe country with world class infra-structure.

I was surprised to read that one reputed bank had predicted the crash of Kuala Lumpur’s property industry by comparing it to Dubai. At the outset, I must clarify that there is no comparison between Dubai and Kuala Lumpur. Both cities have different landscapes and infrastructure dynamics.

Kuala Lumpur has a clear competitive advantage over Dubai in many areas. Kuala Lumpur’s property landscape is very well managed and balanced. A majority of the property in Kuala Lumpur are owned by the locals. In Dubai, majority of the property are owned by the expatriates. The difference is clear.

Malaysia is on the growth trajectory with political and economic stability. The fundamentals are strong, saving rates are high, banks have strong balance sheets and GDP is rising in a structured manner. The GDP will be hovering around 4.5% to 4.8% till 1Q2014.

The outlook for the economy is fairly stable and upsurge can be expected in the economy despite heavy headwinds in the global financial markets. According to World Bank, Malaysia’s projected GDP for 2013 would be 5%. Some economies might be facing rough waters as the sea looks turbulent.

by Shan Saeed

Shan SaeedChief Economist, IQI Group

NEWSFLASH 8

EduCity Iskandar Malaysia is a fully integrated education hub located in Nusajaya. The project comprises universities and institutions of higher education, Academia industry action and R&D centres, student accommodations as well as recreational and sports facilities.

As to date, the Educity project has attracted some RM700 mil in investments with the setting up of several international universities. This project covers an area of 121ha and 70% of it has been developed with three university campuses and two shared facilities.

Educity has successfully drawn attention of many international investors which includes Newcastle University Medicine Malaysia, Malborough College Malaysia, University of Southampton, University of Reading Malaysia, Management Development Institue of Singapore (MDIS) and Netherlands Maritime Institute of Technology (NMIT).

According to Deputy Prime Minister Tan Sri Muhyiddin Yassin, Malaysia is currently ranked the 11th largest exporter of educational services, which provides a place to study for more than 90,000 students from over 100 nations. Malaysia aim about 200,000 students will enter into the country by 2020 for educational purposes.

“The approval for the alignment of MRT Line 2 is expected to be out by end of the year, subject to government approval”, said MRT Corp Chief executive officer, Datuk Azhar Abdul Hamid.

The line 2 was initially planned to be from Kuala Lumpur to Port Klang, but has now planned to be from Sungai Buloh to Selayang to Pandan. A study on finalization of alignment for MRT Line 2 has been carried out by the Land Public Transport Commission (SPAD) and the study was submitted to the government.

MRT Line 1 is aligned from downtown Sungai Buloh to the Kajang town which covers a span of 51km. Line 1 comprises of 31 stations in which 7 stations located at the designated underground railway system for a distance of 9.5km. As of September 2013, the underground section has already reached 35% completion since its commencement end of May 2013. The overall progress of the Klang Valley MRT is currently at 24%.

Datuk Azhar also commented that the MRT project is important as it will benefit the public and ensure the capital city is free from traffic congestion.

by YK Heng

by YK Heng

EDUCITY DRAWS IN RM 700 MILLION OF INVESTMENT

MRT LINE 2 PROJECT APPROVAL EXPECTED BY YEAR-END

LEGAL ADVICE 9

Finding good tenants is never easy for a landlord. A seasoned one would probably have encountered problems like default/late payment in rent, disruptive behaviours and/or breaches of the tenancy. As such, it would be prudent for the landlord to consider some important issues when looking for or renting out the premise.

Firstly, the landlord should check on the prospective tenant. Whilst it may not be feasible to know everything, a shrewd landlord would ask for information on employment and income history of the tenant or conduct a bankruptcy search on him. If he does not have a good track record, it may be wise to insist on guarantors for the payment of rent.

Secondly, the parties should get the tenancy agreement to be put in writing, even though there is nothing to stop them from doing it orally. It is strongly

by Steven Nyu Chin Eu

MANAGING TENANT

advised that the landlord should engage with a practicing lawyer to obtain advice on the tenancy agreement so that all important terms and conditions are spelled out clearly and agreed unequivocally.

Thirdly, the landlord should establish a system to handle the exchanges of monies, especially deposits. Inspection and documentation regarding the condition of the rented premise prior to the moving in of the tenant is good practice to avoid any disputes if and when the tenant moves out upon termination of the tenancy agreement.

There is also the need to ‘check’ on the rented premise on a regular basis. Bear in mind it may not be appropriate to frequently enter and run checks unless there is good reason to do so (for example: to do the necessary repairs). On top of this, the landlord may want to monitor the progress of the payment of the main outgoings such as electricity bill and water bill, which can be done by requesting the relevant utilities’ companies to send the bills to the landlord.

Fifthly, the landlord should purchase and maintain relevant insurance policies to safeguard the rented premise. Proper insurance policies may protect the landlord from lawsuits by tenants due to injuries and/or from losses to the rented premise caused by everything from fire and storms to burglary and vandalism.Sixth, if the tenant remains in occupation of the rented premise upon termination of the tenancy agreement, the landlord is entitled to claim from the tenant double rent although it is important to bear in mind that the double rent is not a contractual rent but simply a form of damages for the tenant’s failure to quit the rented premise upon termination.

Finally, the landlord can only do so much and even if all steps are taken, conflicts may still arise. As above, cases where the tenants default in the payment of rent or breach the tenancy agreement are not uncommon. In such situations, it would be good if both parties could resolve disputes peacefully because they are often quite insignificant and usually due to miscommunication. Obviously, the parties may also consider mediation by a neutral third party, such as property agent to sort things out, if necessary.

(continued next page)

Steven Nyu Chin EuFounder & Managing Partner

Messrs Steven Nyu & Partners, Advocates & Solicitors“Landlord should

engage with a practicing lawyer

to obtain advice on the

tenancy agreement.

Fourthly, the landlord should maintain the rented premise properly and make necessary repairs when requested. Otherwise, good tenants may feel alienated and worse, the tenant may withhold rent or possibly sue for injuries caused by defective conditions and/or move out. Further, the landlord should as far as possible ensure that the rented premise is secured. Minor details like having proper lightings around the rented premise are not expensive and easy to maintain.

Renting out premise

1. Check on prOspective tenant.

2. execute tenancy agreement.

3. establish a system to handle the

EXCHANGES OF MONIES.

4. always ensure premises in good

condition.

5. purchase and maintain relevant

insurance policies.

6. resolve dispute in proper manner.

LEGAL ADVICE 10

The second remedy is an action for distress in that the landlord may commence civil action to seize the tenant’s goods and sell them to pay for the outstanding rent. It involves the landlord entering the rented premise to seize goods to the value of the outstanding rent to compel the tenant to pay up and the distress is lifted once the tenant has paid the outstanding rent. If, however, the tenant still does not pay, the landlord may then sell the goods and reimburse himself for the outstanding rent from the proceeds but any balance will have to be returned to the tenant.

The third remedy is by exercising the power of forfeiture (which must be expressly reserved) but this is applicable to a lease duly registered with the relevant Land Office/Registry.

Nevertheless, even if there is no express agreement to pay rent, the landlord may still take action for compensation for the use and/or occupation of the rented premise, which is based on an implied

promise by the tenant to compensate the landlord for the loss of use of the rented premise.

It can be seen, therefore, that being a landlord is not as easy as it sounds. It involves lots of work and the readiness to attend to, and solve problems. These days, even landlords needs to rent ‘a whole package’ rather than just a premise as people are now looking for a lifestyle that suits them and not just a place to stay or work. Nonetheless, if managed properly, being a landlord can very much be rewarding.

(from previous page)

Notwithstanding, there have been cases where the landlord changes the keys and locks of the rented premise or evicts the tenant by breaking into the rented premise without the knowledge or consent of the tenant (which may be inappropriate or even legal to do so). In such cases, rather than taking the matter into his own hands, the landlord is advised to consider seeking legal options and taking the necessary legal remedies, which are available to him.

The first is an action for rent whereby the landlord may sue the tenant on the covenant to pay rent under the tenancy agreement or the lease agreement. (In passing, a tenancy agreement and a lease agreement are essentially similar and the main difference between the two is that the period for a tenancy agreement is up to 3 years only whereas a lease agreement is used in the event whereby the period exceeds 3 years.)

Steven Nyu is the founder and managing partner of Messrs Steven Nyu & Partners, Advocates & Solicitors, a legal firm where its area of practise is on real estate, general litigation and corporate advisory.

For more information, kindly contact Steven Nyu at +6016-951 1984, or nyu.steven@yahoo.com

GRAPHICALLY SPEAKING 11

Source: NAPIC & MPI Research

OVERHANG IN RESIDENTIAL UNITS FOR ALL STATES SHOWS DECLINING TREND

Total Number and Value of Overhang in Residential Units in Selected State (4Q 2009 - 2Q 2013P)

Kuala Lumpur Selangor Johor Penang

4Q 2009 1,623 3,770 5,415 592

4Q 2010 2,400 3,180 5,599 311

4Q 2011 2,871 2,368 5,165 332

4Q 2012 2,102 2,709 3,552 142

2Q 2013 P 2,022 2,479 3,573 163

Source: NAPIC & MPI Research

Kuala Lumpur

Note: P = Preliminary Data

Number of Overhang residential units LHS Legend:

Value of the Overhang residential unit (RM million) RHS

Johor

Penang

Selangor3,500

3,000

2,500

2,000

1,500

500

0

2,500

2,000

1,500

500

0

Units Value(RM million)

4Q 20104Q 2009 4Q 2011 4Q 2012 2Q 2013P

1,600

1,400

1,200

1,000

800

600

400

200

0

4,000

3,500

3,000

2,500

2,000

1,500

500

04Q 20104Q 2009 4Q 2011 4Q 2012 2Q 2013P

Value(RM million) Units

6,000

5,000

4,000

3,000

2,000

1,000

0

1,200

1,000

800

600

400

200

0

UnitsValue

(RM million)

4Q 20104Q 2009 4Q 2011 4Q 2012 2Q 2013P

UnitsValue

(RM million) 700

600

500

400

300

200

100

0

250

200

150

100

50

04Q 20104Q 2009 4Q 2011 4Q 2012 2Q 2013P

Malaysia Property Incorporated (MPI) receives foreign investor queries on an ongoing basis. For any parties interested to pursue these investment requirements, please contact the MPI team at research@malaysiapropertyinc.com

CROSS-BORDER QUERIES 12

Request Client Requirement Location

3Q 2013Landbank Japan 40,000 sq meter of land for chemical

factory developmentIndustrial Park in Selangor,

Penang, Kedah

Factory Space China 50,000 sq feet of factory space for lubricant oil production

ECER in Kuantan, Johor, Perak

Source: MPI Research

LOOKING FORINVESTMENT

ABOUT USMalaysia Property Incorporated is a Government initiative set up under the Economic Planning Unit to drive investments in real estate into Malaysia. As the first port-of-call for real estate investment queries, Malaysia Property Inc. connects interested parties through an extensive network of government agencies, private sector companies, real estate firms, business councils and real estate-related associations. MPI has two core objectives; to create international awareness and to establish connections between foreign interests and Malaysian real estate industry players, ultimately contributing to real estate investments into the country.

For further information and up-to-date tracking of Malaysian real estate data, visit:www.malaysiapropertyinc.com

For further enquiry, write to:info@malaysiapropertyinc.com

Disclamer: This report contains information that is publicly-available and has been relied on by Malaysia Property Incorporated on the basis that it is accurate and complete. MPI is not liable if the case proves to be otherwise. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and the same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed.

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