Posts Tagged Malaysia property
Unstable Year For Real Estate Investment Trusts
Posted by Chas W. Leeper, SRA in Uncategorized on February 4th, 2012
Headwinds from the depressing global economic and financial fronts, specifically in the United States and the eurozone, will bring challenges to the performance of the local real estate investment trusts (M-REITs) this year.
Stewart Labrooy, chairman of Malaysian REIT Managers Association said that the M-REIT sector will face slower growth and competition for tenants as an oversupply situation appear in the office market leading to lower rental yields.
“It is going to be a volatile year ahead with the eurozone uncertainty coupled with low growth in the European and US markets. These markets are very important to growth in Asia and the impact would be felt in all export-led countries. Capital market activity will remain muted worldwide in 2012,” Labrooy told StarBiz.
In Kuala Lumpur, property prices are anticipated to remain flat for 2012 with some weak points in the high-end residential and office markets
In the office sector, the seven million sq ft of new office space programmed for completion this year would eventually result in softening in rental and occupancy.
Inspite the gloomy outlook, Labrooy said the Malaysian capital markets were to remain healthy this year with a considerable number of transactions particularly the listing of Felda’s assets in the first half of 2012.
“We are fully aware of the issues involved as some of the M-REITs have been through the 2008 global financial crisis and are taking a pro-active stand to retain their tenants through this period and manage their gearing leverage conservatively.
“Most M-REITs have strong tenant covenants and long leases to counter cyclical financial events. They also practise very conservative valuations so we don’t see any downward pressure on them in 2012 and beyond.
Consequently, the average gearing of most M-REITs are in the range of 20% to 40%, precluding any event of a default on their loan covenants,” he said.
Labrooy said a silver lining from the ambiguity and instablity of the global markets was that investors and fund managers had begun diverting to dividend stocks with strong asset backing and renewed their interest in M-REITs as defensive stocks in unstable times.
“I believe that we will continue to see a strong subscription in the M-REIT sector this year bearing in mind that the sector performed fairly well to outperform the KLCI in 2011,” he added.
He said the local Malaysia property market are still facing liquidity problem as the size of M-REITs was still small by international standards with only five having market capitalisation of over RM1bil. This influenced weak involvement among retail investors.
Although the combined market capitalisation of M-REITs has increased to over RM15bil, its market capitalisation is still much behind that of Singapore which has US$27bil in market capitalisation.
Labrooy, who is also the chief executive officer of Axis REIT Managers Bhd, said the latest listing of Sunway, CapitaMalls Malaysia Trust and Pavilion REITs had develop the liquidity of the local market.
Labrooy further stated there was lack of listing of foreign assets as REITs on the local bourse, further adding that those who are interested to go for listing had decided to do so in Singapore by reason of the latter much higher liquidity and better tax structure. The local regulatory and tax framework must get better to compare with Singapore, and a similar tax code would help in getting greater retail participation.
On whether there was a possibility for other types of REITs to enter into the market, Labrooy said: “Malaysia probably has one of the most diversified REIT offerings in Asia. We are currently offering hospitals, plantations, office, retail, education, hospitality, industrial and diversified REITs.
“In addition three are syariah-compliant to cater to the Islamic investors.
“The sectors that will see growth are in industrial, medium cost housing, healthcare, education and tourism. These growth areas are in the Iskandar Malaysia in Johor, Greater Kuala Lumpur and Penang.”
Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin agreed that the prospects for the REIT market has not been fully explored in terms of consciousness between potential investors.
He said M-REITs were viewed as a much safer investment as compared with other REITs in the region. This was primarily due to the domestic-centric focus of their property investments, lower refinancing danger and comparatively lower foreign shareholding.
“Malaysia is in a strong position for greater growth and has the potential to lead the REITs market in Asia given its good track record and stable market conditions in Malaysia.
“Generally, potential investors are not well informed about REITs. We believe the level of awareness can be increased nationwide as knowledge plays an important role,” he said.
Lodin pointed out.
On the types of M-REITs, he said: “It would be good if the market could diversify to different types of REITs. Malaysia has a lot of property related assets with the potential of being “REITed”. The only factor at play right now is time. Once the conditions are favourable, industry specialists should develop these assets into REITs.”
Rules and Agreements To Consider When Renting Out A Room in a House
Posted by Chas W. Leeper, SRA in Uncategorized on January 23rd, 2012
Things To Think About When Sharing Your Home
So if you are here because you are thinking about renting out a room in your Singapore property home, I have some helpful advice for you on things you have to consider when sharing your home. I learned alot about being a landlord, room-mate and friend last year when I rented out 2 rooms in my home to friends of my son.
It was quite an interesting year, to say the least! Since I have been used to having other people in my home for quite sometime, this was no new experience, but renting out rooms to them was. One thing I can say is that during this span of time I certainly learned alot about the younger generation -their music, likes and dislikes plus a few other things I can’t even start to tell you about!
But to get to the nuts and bolts of this story, there are various things that I would have definitely done differently just to avoid confusion:
First off, I would have force myself to draft a rental agreement with all the standard rental terms like real renters do. With that in mind I will give you some tips on renting out a room or sharing your home (from someone who has been there and done that!)
1) Like I said, make sure you draft up a regular rental agreement. Put it in writing, with all the terms laid out, just like anyone else would. Even if it’s your best friend, just do it !! Just to avoid misunderstanding , put it in a categorical and clear words what you what you expect of them as a renter and what they expect from you as a landlord and room-mate.
2) Have specific rules about storage- do you offer storage or does the renter also need to find a storage facility in addition to renting a room from you?
3) Make a rule regarding food! I can’t stress this enough! If anything,allow the renter to have a small refrigerator in their room and add a little expense on top for the electricity to run the fridge. (believe me this will solve a lot of headaches)
4) Make house rules just like you do in any family in HK property- about doing dishes, taking out the trash, so on and so forth. This needs to be emphasized - otherwise YOU may end up doing all of the above. ( and if need be, add an additional rental charge and employ a maid - that will solves alot of problems!)
5) Have definite written rules about noise and what’s OK and what’s not OK. ( I can’t begin to tell you how crazy I went listening to my walls being boom- boomed)
6) Have definite written rules concerning visitors, and overnighters. (It’s so annoying waking up in the middle of the night to find someone in your Malaysia property home on the way to the bathroom at 3am in the morning -and you’ve never seen them before in your life)
Looking back last year with my young room-mates, I actually have to say that I learned quite a bit about other people and making compromises. There are times I missed my privacy terribly, but I was also often glad for the company, and there were also times that I thought that I had bitten off more than I could chew….
So is renting out a room or sharing your home for everyone? Certainly not- but sometimes it makes sense to do so- maybe you are in a home and there is a need to save some money, maybe you are lonely and you would love to have some companionship, maybe you just don’t like living by yourself or just want to help someone else get back on their feet and also help yourself at the the same time. Renting out a room can solve all of of the above-mentioned problems, but don’t forget to remember:
Get it on all in writing!!!