The loss of my Property Mentor

 It was in March 1993 that I quit my Corporate job

to become a Real Estate Agent.

That decision was not an easy one because

from a well-paid job with a secured salary

to a future without any predictable income,

I was venturing into unknown territory ....

So many " What if " entered my mind.

What if I cannot close any sale ?

What if I cannot close any tenancy ?

What if I cannot collect my commission ?

What if I don't have any income for 3 months

.... would I be able to survive ?

BUT that was 28 years ago !!

Today I have survived the trials and tribulations

plus the ups and downs of the property industry.

I have not only emerged stronger but I have also

managed to thrive successfully.

Of course it would not be possible for me to

last so long in Real Estate Agency .... if I don't have

a mentor.

One of the mentors whom I have always looked up to

and who have guided me tremendously is the ever

humble Dato Chew of the KIP Group.

Thus I was truly sad and devastated when I received 

the news yesterday ....that Dato Chew has passed away.

Only last week he called me to work on another project.

I asked him how is he coping with his cancer treatment.

and he said he is okay ....

Life is short indeed.

I did not expect this to happen so fast

... that my property mentor would leave me.

I first met Dato Chew in my first year into real estate.

He was then with the MEDA Group, and they bought

a commercial land in Selayang from me for about 

Ringgit Malaysia RM7.2M.

If i can recall correctly, it was about 6 months 

into my venture into Real Estate Agency, and it was

my first land transaction.

They successfully developed that land into the

SUMMIT SQUARE mall, and made them many

millions in profit.

Then they purchased another plot of land thru me

for about Ringgit Malaysia RM57 million .

This time it was a 24 acres site in Seri Kembangan,

which they developed into the SOUTH CITY PLAZA.

From then on, their business flourished until

the original shareholders decided to part ways.

So Dato Chew teamed up with Dato Eric Ong

to form the KIP Group, which develop malls for 

the middle-income sector and targetting the suburban

Malay population.

And thus I was assigned to source Commercial

land sites for them throughout the country.

I was able to bring in 3 sites for them :

Kipmall Senawang    ---   RM20 Million

Kipmall Melaka        ---    RM18 Million

Kipmart Sg Petani     ---   RM10 Million

Having developed enough malls and profitability 

to fulfill the requirements of the Securities Commission,

they subsequently decide to go for a public listing on

the Kuala Lumpur Stock Exchange ( Bursa Malaysia )

Thus on 6th February 2017, their Real Estate Investment Trust

known as KIP REIT was born .

I was proud to have helped and contributed to their

public listing exercise.

AND more than that, I am very grateful to the KIP Group,

for having given me so many opportunities to do deals,

and to further my real estate agency career.

THANK YOU Dato Chew

for being my Mentor

for being my Friend

for being a true Gentleman.

Rest in Peace SIR

you shall always be remembered ....

Kulim Hi-Tech Park is on a roll

For the past few months, Kulim Hi-Tech Park

is constantly in the news.

Firstly was when the Malaysian Government

announced the sale of the state-owned Silterra,

which is a pure-play global semiconductor foundry.

SilTerra is a 200mm semiconductor wafer foundry, 

offering CMOS fabrication for integrated circuits (ICs)

in High Voltage applications, Advanced Logic, and

Mixed Signal & Radio Frequency 

It has also moved into more advanced technology 

areas such as Bio-photonics,  Silicon Photonics

MEMS on CMOS, Galium Nitride(GaN), BC​D and 

Discrete Power  or more popularly known as

“More-than-Moore” technologies.  

Then it was announced in the press that AT&S 

(Austria Technologie & Systemtechnik Aktiengesellschaft), 

the Austria-headquartered global manufacturing leader 

of high-end printed circuit boards (PCB) 

and integrated circuit (IC) substrates, 

has chosen Kulim Hi-Tech Park as its first 

production plant in Southeast Asia with an

investment of RM8.5 Billion.

The plant will be on 56 acres of land in Phase 4

of the high tech science park, and will create 

5,000 jobs. Commercial operations will start 

in 2024.

And recently a Chinese solar energy firm 

Risen Energy Co Ltd will invest RM42.2 billion 

over 15 years in a new production facility in 

Kulim Hi-Tech Park  to manufacture high-efficiency 

photovoltaic modules.

Risen Energy Co., Ltd. was founded in 1986 

and is a listed Chinese public company .

It is an integrated manufacturer from wafers 

to modules, a manufacturer of off-grid systems, 

and also a developer and an EPC of PV projects.

The plant is expected to be completed by the year-end 

and begin commercial activities by the first quarter of 2022

( Some of the world's largest PV producers such as 

JinkoSolar, Longi Solar, Hanwha Q Cell and First Solar,

are also located in Malaysia )

So where is this Kulim Hi-Tech Park ?

KHTP is a high technology science park in 

Kulim Kedah, the northern part of Malaysia, 

and is situated 36km away from Penang.

This park was opened in 1996, and is the home to 

some of the world's biggest names in manufacturing

with 34 industrial tenants and 46 supporting tenants,

with a total workforce of over 28,000.

The advantages of Kulim Hi-Teck Park are

Centrally located within the NCER Economic Growth Region,

26 km from North-Butterworth Container, Penang Port,

43 km from Penang’s Bayan Lepas International Airport 

and directly linked to the North-South Highway 

and East-West Expressway

What is significant about this industrial park

is their Leasehold industrial land for 60 years 

( with an option to renew for another 39 years )

at a lease rate of RM45 p.s.f.

Based on the foregoing, more investments 

will come into this park soon ....

Can Estate Agents do M & A deals ?

M & A .... what's that ?

Most real estate agents would not know

what is the meaning of M & A !!

Well, it means Mergers & Acquisitions ...

In practice, it simply means when a Big Firm

ACQUIRES or buys over a smaller firm.

And this smaller firm or the Target Company

can either be their Competitor or perhaps in

a related business or a supporting business 

that can add value to the supply chain.

Sometimes, when 2 different companies are of

almost  equal strength ( in terms of market share,

market capitalization, sales revenue, profitability )

then it makes sense for them to join/combine

their strength ... so as to become BIGGER !!

And this is the concept of MERGER.

Before I went into the Property biz,

I wanted to be a Merchant Banker

( now known as Investment Banker )

.... but that was over 25 years ago ....

For i was fascinated by the corporate deals

done in Wall Street ... those hugh mega deals

via Mergers & Acquisitions that were done

using junk bonds and financial derivatives

But the problem was that my degree is in

property ... and to work in merchant banking,

you need degrees related to corporate law,

finance, accounting or 

Back then, this country also does not have

the likes of global consulting firms like Bain,

Mckinsey, and Boston Consulting Group

So my hope of going into the world of high'

finance remained a far-fetched dream ....

I have bought many books related to Wall Street

and the Corporate Raiders of America.

But sadly, all of them remained un-opened

and un-read .... and many are still in their

original plastic wrappers !!

Any regrets ?

25 years have since passed ... 

I have about 100 of these books.

So when will I ever have the time 

to read them all .... ???

Can Real Estate Agents work WITHOUT internet connection ?

 

Actually the title of this post should be

--  can real estate agents work without FAST

internet connection ?

For over 15 years, i have been using the most basic

internet broadband package called Streamyx

by Telekom Malaysia.

Streamyx was introduced in the early days of

the Internet era in my country. The speed is very slow,

so slow that to upload a 10 minutes video it would take

almost an hour to complete !!

You can say that the Streamyx broadband service

belongs to the dinosaur era ....

I am a property agent ... a real estate agent.

So it is important for me to have access to very fast

internet connection for the purpose of surfing news

related to Property & Real Estate, downloading data, 

uploading videos, Zooming , listening to webinars,

live streaming as well for my Social Media Marketing 

and Online Branding too.

But luck was not on my side when i applied to upgrade

my Broadband Subscription Package to a higher and

faster speed.

Either there is a physical obstacle blocking the cabling,

( in my case its the branches of the tall trees along

the path of the cable alignment ) or there is NO more 

vacant ports at the junction box ( meaning i need to

wait until an existing user terminates the subscription ) !!

You can read more about my predicament in this video

https://youtu.be/vJLkwEED-_0 

Of course, there are other options ... mainly those

Mobile Broadband. Plus also other service providers

and telcos like Maxis, DIGI, Celcom, etc

But as the coverage for such mobile connection is

quite un-reliable, subscribing to a Fixed-Line connection

is still the best.

Imagine if you are online doing something which is

very important and critical BUT suddenly the line

connection goes off ... OR when you are doing an

online payment but suddenly the line gets cut off ?

Thus i had to other choice but to wait and wait and wait

.... for my turn to be able to enjoy my upgraded Unifi 

for my home ....

And finally after over 15 years

the never-ending wait is over .... my agony ended !!

Now i can ramp up my Real Estate Agency work .

Wisma Selangor Dredging sold ?

 

This is from an old newspaper clipping in year 2017.

Many have asked why would Tan Sri Koo 

spend such a hugh sum of RM480M to buy 

Wisma Selangor Dredging ?

Today's post is to share with you how to analyse 

deal-making from the perspective of the Big Boys.

Tan Sri Koo is more well-known in China

( for his healthcare & food products )

and is considered one of the pioneers from

Malaysia who managed to penetrate the

China market.

Locally, he is known for his O2 project in south

Puchong via his Perfect Eagle Group 

As an astute businessman, it does not make

sense for him to spend such a hugh sum just

for investment purpose like a REIT for a small

Triple Net Yield ... thus the Investment Theory 

is out.

Next --  the buildings are 30 years old.

If you have passed your Building Technology

subject in your Real Estate Negotiator & 

Probationary Estate Agent classes, you may

have been told that a building has 2 Types of

lifespan i.e Economic and Physical

The Economic lifespan is about 30 years,

while the Physical lifespan is about 60 years

For example the building elements with the 

shortest life span are the interior finishes which

last only the span of the lease, typically 5-10 years. 

The roof and the mechanical systems are next 

which typically last about 20 years. The windows, 

wall cladding, paving surfaces and electrical 

systems will typically last about 30 years. 

The building structure and the floor slabs will 

last as long as the are protected from the weather. 

The foundations, for all intents and purposes 

will last forever.

As Wisma Selangor Dredging is now 30 years,

it is more likely Tan Sri Koo plans to demolish it,

and redevelop .... after all, the Plot Ratio there

is now about 1:14 compared to 30 years ago .

( at the time of writing, the plot ratio allowed

by DBKL is only 10 )

How about the Financial analysis ? Sale price is RM480m. Valuation is RM372.1m Thus the shortfall is RM107.9M Assuming bank loan is 90% for Class A building. Thus the Differential Sum is RM37.21m ( 10% ) This means Tan Sri has to pay his own funds of RM107.9m + RM37.21m = RM145.11m Plus closing costs of say about RM5m, that will be a total of about RM150m. Only those with VERY DEEP pockets can play this game .....

The Expat Condominium Rental Market

25 years ago when I was new to Real Estate Agency,

I was doing a lot of condominium rental cases for 

expatriates , particularly expats from Japan who

were transferred to work in Kuala Lumpur.

Most of them were in the Oil & Gas Industry,

with the senior expats based in Kuala Lumpur

while the engineering staff are based offshore

in Sabah and Sarawak for oil & gas exploration works.

Some of these Japanese expats are also in the

construction industry, doing projects like the KLCC,

road construction, dam construction and building of

hugh factories.

As an estate agent that specialized in the rental market,

I was able to secure a lot of rental tenancy deals for them.

My area of focus was the condominiums located in the

Embassy Row of Jalan Ampang/ U Thant/Ampang Hilir

and Lingkungan U Thant.

Rentals rates for a fully-furnished 3-bedroom unit are

in the range of RM6,000 - RM7,000.

I also cover the Mont Kiara location, whereby the

rental rates are cheaper ranging from RM3,000 - RM4,000

which suit the budget of the junior engineers.

Back then, there were only about 10 different condo projects

in the vicinity of Ampang, with about 6 in Mont Kiara 

plus several more in Bangsar and Damansara Heights.

The economy was booming then. Thus overall it has been a

very profitable ride for me in servicing the Nippon-san .