• "This is a unique and meaningful award based totally on merit and judged independently by peers, unlike many other commercially-driven awards.”  Teo
  • "... ‘recognition’ is a powerful incentive to motivate property developers to produce development projects up to world-class standards." — Ng

This year marks the 20th anniversary of The Edge Malaysia property awards. It was in 2003 that The Edge Malaysia first launched a search for Malaysia’s best property developers to help property buyers make better investment decisions.

For this, we decided on a unique and transparent methodology of scrutinising developers based on their quantitative and qualitative attributes. What the developers claimed in their glossy marketing collateral and building plans did not excite us.

The message to the industry stakeholders has not changed through the years. The Edge Malaysia Top Property Developers Awards (TPDA) recognises the country’s most outstanding developers, based not only on their performance and financial strength but also on how well the market perceives them.

Much has happened in the last two decades. Intermediate 2-storey terraced houses in Kuala Lumpur’s Taman Tun Dr Ismail were changing hands for just under half a million ringgit then. One-storey linked homes in Bangsar’s Lucky Garden were going for less than RM400,000. In Selangor’s Subang Jaya, 1-storey terraced houses were sold for just slightly above RM200,000 while in Shah Alam, 2-storey terraced homes were transacted at less than RM300,000.

Fast forward to the present. These houses would easily cost about three times more now. At today’s pricing, half a million ringgit can only get one a link home with a much smaller built-up and located well away from the prized locations of Taman Tun Dr Ismail, Bangsar, Subang Jaya or Shah Alam.

Without a doubt, the property market has evolved greatly.  To remain relevant in our objective to benchmark developers for the guidance of investors, The Edge Malaysia’s property awards, too, have evolved. From an initial equal 50:50 weightage for quantitative and qualitative attributes, it is now 35:65, with a greater emphasis on qualitative attributes. 

The shift was in response to investors’ increasing expectations on the quality and sustainability of the homes they buy.

TPDA is now the anchor award of The Edge Malaysia Property Excellence Awards (TEPEA). With TEPEA, we have expanded our scrutiny of development projects (only those completed and handed over qualify to be judged) that are deserving of investors’ attention. We also honour outstanding real estate personalities.

To sum it up, TEPEA serves as an in-depth benchmarking of Malaysian property developers’ expertise, financial strength, creativity and tenacity in a holistic manner.

Although TPDA debuted in 2003, the inaugural awards ceremony was only held in 2004. That year, the ceremony was held over lunch at an open-air venue in Kuala Lumpur. It was in the sweltering heat that the then housing and local government minister Tan Sri Ong Ka Ting presented the awards to Malaysia’s Top 10 developers.

While the quantitative scoring for TPDA was and continues to be pulled from audited data, a panel of industry veterans and experts together with The Edge Malaysia are tasked with providing the qualitative ranking.

For credibility, members of the judging panel with interest, direct or indirect, in any of the entries abstain from scoring.

The inaugural TPDA judging panel comprised five members, including a representative of The Edge Malaysia. I am pleased to report that after two decades, three members of the original line-up are still on the panel.

They are Tan Sri Teo Chiang Kok, Datuk Jeffrey Ng and yours truly. Datuk Alan Tong and the late Mr Kumar Tharmalingam voluntarily retired from the panel.

Teo is a patron and past president of the Real Estate and Housing Developers’ Association (Rehda) of Malaysia. Also a past president of Fiabci (International Real Estate Federation) Malaysia, he has more than four decades of experience in the property development industry, having developed some 30,000 homes and over 20 million sq ft of commercial properties.

“It is amazing that this coveted award has been growing in recognition and in anticipation for 20 glorious years. It is indeed a singular honour and privilege for me to have the opportunity to participate in this journey. This is a unique and meaningful award based totally on merit and judged independently by peers, unlike many other commercially-driven awards,” Teo says.

Ng is a patron and past president of Rehda Malaysia and also past chairman of the Malaysian REIT Managers Association. He has more than 35 years’ experience in finance, corporate planning and executive management in the property and hotel industries in Malaysia and Australia.

Ng says: “TPDA is indeed a progressive and meaningful initiative by The Edge Malaysia to recognise management excellence in the property development business, from the homebuyers’ viewpoint.

“As we all know, ‘recognition’ is a powerful incentive to motivate property developers to produce development projects up to world-class standards. TPDA has provided this important sustainable recognition platform for all property developers to excel in our property industry in the long run. In summary, TPDA offers a boost to corporate branding.

“Recalling our first TPDA judges’ meeting two decades ago, our deliberations were robust and lengthy. This was to ensure that the qualitative and quantitative criteria were aligned and consistent in terms of eligibility, applicability and qualification. All members of the panel of judges were diligent and transparent, wanting to get things right and to ensure the methodology of rankings and its computations were properly formulated. Never thought the work of a judge required such hard work. 

“Thereafter, our judge organiser, Foong Yee, made life very smooth and easy for us once the formats were standardised and formulations were in place.

“Kudos to Foong Yee for her fine efforts and it has been an enjoyable journey to be a judge of TPDA today.”

Tong remains synonymous with the successful development of Kuala Lumpur’s Mont’Kiara enclave. Dubbed Malaysia’s “Condo King”, he remains the first and only Malaysian to have been elected world president of Fiabci International, an organisation of real estate associations and professionals with chapters in more than 50 countries.

Tong says, “I would like to take this occasion to congratulate the winners, on a platform where they have been evaluated not just on their financial performance, but more prevalently, on their qualitative attributes. In the current environment where costs continue to escalate, I hope these winners will take the lead in the industry and explore new frontiers in providing innovative developments. 

“In order to meet the growing demands of a highly discerning market, value creation for property buyers remains one of the primary consideration factors. 

“It is also my hope that developers who did not make the list, both public listed and non-public listed, will aspire to emulate the successes of these winners. To the management and team at The Edge Malaysia, I would like to convey my congratulations for their efforts in making this award a benchmark for the property industry.”

This year, we missed the late Kumar (as he was fondly known in the industry) at the awards judging. It was at the TEPEA Awards gala dinner last year that he told me his wish to retire from the panel due to health reasons. He passed away in March this year.

Kumar was a distinguished registered real estate valuer and property consultant who had been active in the industry for more than three decades. He was a past president of the Malaysian Chapter of Fiabci. From 2010 to 2013, he was CEO of Malaysia Property Incorporated (MPI), a government initiative set up to attract real estate investments to Malaysia. Kumar also sat on numerous advisory and corporate boards.

To Kumar, a dear friend, thank you for your valued contribution to the industry. 

Agile. Creative. Tenacious.

Just when we thought we had seen it all — from economic and financial crises to stock market meltdowns, an alarming property overhang to shrinking affordability, inflation and fear of recession — the industry was thrown a curveball in the form of the Covid-19 pandemic.

Business came to a rude halt during the unprecedented lockdowns. Show galleries were forced to shutter. Support and back-end operations came to a standstill.

Although normalcy has returned somewhat, the impact from the pandemic is far from over. Uncertainty continues to linger, from affordability issues to high labour and construction material costs. Positive cash flow, needless to say, is key to players staying afloat.

For some developers, the problem is exacerbated by a sizeable amount of unsold stock. It is getting increasingly tough to find takers for units that are completed yet have remained unsold for some time.

Some developers resort to giving attractive discounts to clear their inventory. This, however, is at the risk of upsetting earlier buyers who would have paid more for their units in the same project. 

The volume and value of Malaysia’s housing overhang units has eased slightly by 7.5% to 34,092 units in the first six months of this year from 2H2021. These are worth RM21.73 billion, down 4.6% from 2H2021. The overhang is still high and consequently, new housing launches have softened.

It can never be work-as-usual again for developers, post-Covid. Only those who are agile, creative and tenacious can hope to outshine the rest of the pack.

And, indeed, these are the traits displayed by the winners of TEPEA. A shout-out to Malaysia’s newly crowned Top 10 developers. Their win is made even more significant as they have managed to chalk up impressive sales while maintaining their quality, be it in product or service, in very challenging conditions.

Equally impressive are the winners of The Edge Malaysia-PEPS Value Creation Excellence Award, The Edge Malaysia Affordable Urban Housing Excellence Award as well as The Edge Malaysia-PAM Green Excellence Property Award.

It is no mean feat to create significant value appreciation in a condominium project that was completed and handed over to buyers smack in the middle of the Covid-19 outbreak! This was achieved against a backdrop of a huge property overhang and economic uncertainty.

Kudos also go to developers who have proven that affordably priced homes in urban areas are not only liveable but also do not have to look “affordable” in design and construction.

Developers who walk the talk in the adoption of green and sustainability features in their projects must be applauded. Consumers must also be on guard against any attempt by developers to greenwash.

It takes more than two to tango

While developers continue to fine-tune their business model, it is imperative that the government does its part in ensuring the industry is healthy and vibrant.

We cannot ignore the fact that this sector feeds the families of those employed in about 160 related sub-industries. That is a lot of mouths to feed.

Civil servants at the federal and state levels must treat the property and construction stakeholders as partners. Transparency in processing and approval is crucial. Speed and consistency, needless to say, have to be a given. Towards this end, regular stakeholder engagements will go a long way.

Any unnecessary red tape and delay in approvals escalates the cost of doing business. No prizes for guessing who will end up shouldering the extra cost — property buyers.

As property launches are sensitive to timing, any delay could result in a slow take-up or, worse, contribute further to the overhang.

To be fair, the property development fraternity needs to pull up its socks. 

Industry players must reinvent themselves to meet future challenges. The cookie cutter way of building and selling homes as in the past can only bring about the industry’s demise.

Incessant calls for a lifeline from the government will not get the industry very far — have we not been hearing the same old industry wish lists year after year?

The industry needs a different business model — to think out of the box, from design, concept and construction to the end-financing of property.

Household debts across the globe have expanded. Locally, the rise in housing prices has far outpaced that of incomes for many years now. Unless there is help from family, how can the younger generation afford to buy a home?

Developers have responded to the affordability issue by building smaller units on land further and farther away from the more expensive urban hubs.

Some quarters want prices to be reduced in an unrealistic manner. Such a move is a double-edged sword; it means that wealth accumulated from real estate investment would also diminish. Are we fine with that?

The solution could lie in innovative financing models. 

Multi-generational mortgage loans had been introduced to make borrowers more bankable but some quarters had frowned upon the extended loan period required.

Meanwhile, the rent-to-own concept has offered some light to homebuyers but this is not necessarily cheap for borrowers. 

Clearly, there is no one-size-fits-all financing option. More solutions must be explored to improve home affordability.

In his column Tong’s Portfolio (The Edge Malaysia, Issue 1445, Oct 31, 2022), Tan Sri Tong Kooi Ong expounded on perpetual mortgages for landed homes, whose prices are increasingly out of the reach of most. Simply put, in a perpetual mortgage, there would be no principal repayment at all until the home is sold or when the owner decides to pay off the loan. This means homeowners need only pay the monthly interest payment on the loan amount, which would roughly be what one would expect to pay as rent. Scan the QR code to read more in “Homeownership could be made more affordable if we opened our minds”. 

All said, the government, financial institutions and developers must put their heads together in search of answers. All parties must step out of their comfort zone.

Without a doubt, it takes more than two to tango in the property and construction sector and for Malaysia as a whole to continue to flourish in the days ahead.

 

Au Foong Yee ([email protected]) is editor emeritus at The Edge Malaysia. She was the first editor of City & Country.

SHARE
RELATED POSTS
  1. S P Setia takes No 1 spot at The Edge Malaysia Top Property Developers Awards 2022
  2. The Team
  3. Sunway Bhd: Bigger, stronger and wiser