City&Country: Aprea aims to enhance local property industry

Knowledge is power, goes the familiar adage, and the Asia Pacific Real Estate Association (Aprea) is keen to demonstrate this with its researched-based approach to enhancing Malaysia’s property industry.

Aprea’s methods of persuasion will largely be data-driven, with recommendations for best practices underpinned by research, says Aprea Malaysia board member Stewart LaBrooy. This is in addition to offering courses in real estate investment and related disciplines that address the association’s push for upskilling in the property sector.

“We’re more of a persuasive group than a pressure group. Influence is always better than pressure,” explains LaBrooy, who is also CEO of Axis REIT Managers Bhd.

What is Aprea?
While people in the industry are generally familiar with Rehda (Real Estate and Housing Developers’ Association Malaysia) and Fiabci (International Real Estate Federation), Aprea is less known as it did not have a local chapter until recently. The non-profit industry association unveiled its Malaysian chapter on Oct 4 in Kuala Lumpur in a launch-cum-membership drive.

Aprea  works to encourage greater investment in the real estate sector in Asia-Pacific through the provision of better information to investors, improving the general operating environment and encouraging best practices. The organisation also has chapters in Japan, Hong Kong, Singapore, South Korea, Australia, India and the Philippines.

Currently, Aprea has over 165 members across its eight chapters regionally, comprising real estate companies, listed real estate trusts, unlisted property funds, institutional investors, investment managers, investment banks, investment advisers, property securities fund managers, real estate consultants, corporate advisers, stockbrokers and universities.

According to Aprea CEO Peter Mitchell, membership is for corporates. “All members in Malaysia [both Malaysian companies and multinationals] are automatically members of the chapter and all individuals with member companies can participate in chapter activities.”

The Malaysian chapter’s 19 members include Axis Real Estate Investment Trust, Sunway Real Estate Investment Trust, Standard Chartered Bank Malaysia Bhd, Maybank Investment Bank Bhd, CB Richard Ellis (Malaysia) Sdn Bhd, Malaysia Property Inc (MPI), Sime Darby Property Bhd, KPMG, AmanahRaya Real Estate Investment Trust, Ireka Development Management Sdn Bhd, Urusharta Cemerlang Sdn Bhd, MGPA and Lend Lease.

The chapter’s board chairman is Kumar Tharmalingam, CEO of MPI, and the board members comprise LaBrooy; CB Richard Ellis (Malaysia)  executive chairman Christopher Boyd; Maybank Investment Bank managing director, head of equity and capital markets Rajiv Vijendran; Standard Chartered Bank Malaysia director and head of financial institutions Tejinder Singh; and Sunway REIT Management CEO Datuk Jeffrey Ng.

Although the representation of the groups do not seem to largely reflect real estate developers, Kumar says enquiries from several parties, including developers, are coming in.

While Aprea only recently decided to make its presence official by opening the Malaysian chapter, Mitchell points out it had been involved in the local real estate scene for a few years via its dealings with Securities Commission Malaysia (SC) on real estate investment trust (REIT) regulation.

In addition, Aprea has organised conferences and helped to set up meetings and business opportunities for its Malaysian members to participate in inbound and outbound investments, and provide access to the association’s network through two annual global investor conferences and other avenues.

One of the more recent offerings include the Certificate of Real Estate Investment Finance (Creif) course. “Across the region there is a need for practical training and upskilling of real estate professionals but few options are available. This is so in Malaysia as much as anywhere else. Aprea’s suite of training programmes is now being delivered in Malaysia and will be expanded in 2012.”

“Moving forward, it plans to expand the range of Aprea Institute courses – all of which carry substantial discounts for members. The range of conferences and similar activities will increase, as will the range and scope of cross-border linkages,” Mitchell says.

Pushing for transparency
Some of Aprea’s success stories include its successful push for more tax transparency and  tax incentives for REITs in the island republic in 2005, according to Singapore chapter chairman Lim Swe Guan.

Meanwhile, Mitchell says the group is currently working on a report analysing tax structure of REITs to formulate a best-practice model, which it hopes will be taken into consideration by regulators such as the SC.

Aprea’s members also stand to leverage on the association’s extensive network, says Kumar. “You can meet with funds, including non-Aprea members. We recently organised a meeting with Daewoo and some Korean banks…  so, the network is pretty large. Aprea is able to get appointments [with these companies and banks] because of its size.”

Through this network, members can also pick the brains of other members before venturing into other countries, LaBrooy says. “You learn all of the pitfalls [of getting involved in another country] without having to go through them yourself,” he adds.

One of the causes that the group is championing now include a more effective and timely dissemination of information on Malaysia, says Kumar. “There is not a lot of awareness of what Malaysia has to offer — many foreign investors are surprised to find out that we have good infrastructure,” he says.

He adds creating more awareness of the country’s strengths is crucial to court more foreign investments for the country. On the dissemination of information, Kumar argues that there needs to be more timely release of transaction data on the property market. Currently, the National Property Information Centre (Napic) releases its information on a quarterly basis,instead of a monthly or even nearly-weekly basis like Singapore’s Urban Redevelopment Authority, he adds.

Kumar believes what prevents the timely release of data by Napic is its process of verifying property-related data. “[Napic’s data] is too slow, too late. We have suggested that they give interim data. The variation would be just 5% to 10%, the market can adjust [the data],” he says. “They have all the transaction data as all the paperwork has to be submitted to them. All we are asking them to do is to get the data out on time.”

Investment opportunities
Mitchell adds that the chapter is working on setting up more cross-border investment opportunities. In addition, the chapter is pushing for the broader adoption of Aprea’s Best Practices Handbook, which offers guidelines on financial reporting, valuation, portfolio performance reporting, corporate governance, sustainability and market disclosure.

Aprea is playing a key role in working with the Malaysian REIT Managers Association through its finance and regulatory committees. “We are assisting them in reviewing the Malaysian REIT guidelines and tax structures and make the necessary applications to the Securities Commission and Ministry of Finance to shape the Malaysian REIT industry as a world class industry,” says Mitchell.

Adopting Aprea’s best practices and tapping into its global network of potential investors are congruent with Malaysia’s aspiration of becoming a high-income economy, he adds.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 880, Oct 17-23, 2011