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Zerin sees stable 2012 for real estate market

KUALA LUMPUR: With about two months to go till 2012, Zerin Properties Sdn Bhd CEO Previndran Singhe is expecting real estate transactions to slow down before picking up again in the middle of next year.

Previndran said the market in 2012 will be stable. “I am of the opinion that 2012 will be a stable year. Prices will remain stable, with asking prices, not values, becoming more reasonable as owners check their values to real pricing,” he said.

Despite the uncertain global economy which could edge towards a slowdown, Previndran believes the Malaysian property market will not weaken but will soften in early 2012 and improve thereafter.

“At present, overall purchasing sentiment is down due to the eurozone financial crisis and double-dip fears,” Previndran told The Edge Financial Daily.

“I think we are more Asia-focused. If and when China goes into reverse gear, then I think we need to be worried. Otherwise, we should have a stable year next year.”

Nevertheless, there are opportunities even in a down market. “Recession economies offer opportunities to invest in properties with high appreciation potential; many fortunes have been made this way,” said Francis Quah, head of mergers and acquisitions at Zerin Properties.

“Astute investors know how to make the best of these opportunities, it’s my job to structure the deal so it’s a win-win for everyone,” he said.

Quah: Recession economies offer opportunities to invest in properties with high appreciation potential; many fortunes have been made this way.
Previndran: I am of the opinion that 2012 will be a stable year. Prices will remain stable, with asking prices, not values, becoming more reasonable as owners check their values to real pricing.

Quah recently won the RFP Magazine’s Real Estate Transaction Award, Southeast Asia, for the sale of 1 Mont’Kiara mall and office development for RM333 million in 2010.

The retail mall comes with a net lettable area of 250,000 sq ft and about 185,000 sq ft of office space.

The development was acquired by ARA Asia Dragon Fund, an affiliate of Hong Kong’s Cheung Kong Group, from Aseana Properties Ltd.

This is not the first time that Quah has received an RFP award. In 2009, he received the Hong Kong-based magazine’s Asia-Pacific Real Estate Transaction Award for concluding the sale of the Intercontinental Hanoi Westlake development in Vietnam for US$75 million (RM2.34 billion) at the peak of the subprime crisis.

On property development trends, Quah sees a move towards integrated developments.

“Developments like 1 Mont’Kiara which incorporate all aspects of modern life, offices, malls and entertainment, are both profitable and in demand,” he said.

“Once you get residents living in a particular place, they tend to avoid the hassle of driving out somewhere else if they have everything nearby. These kinds of developments thrive once there is a critical mass of residents in the catchment area.”

In the coming months, Previndran suggested that individual investors continue to look out for landed homes.

Asking prices for high-rise homes in KLCC and Mont’Kiara are becoming more realistic “so keep a good eye on assets there”.  Assets priced below RM1 million seem to be in demand, he said.

He also highlighted some hotspots to keep tabs on including Bangsar, Taman Tun Dr Ismail, Damansara Heights, Medan Damansara and Taman Seputeh. In these areas, landed property and well-priced condominiums are property types to keep an eye on.

For those looking at KLCC and Mont’Kiara, Previndran cautioned to look at only well-priced condos in well-managed developments.

Old Klang Road and Jalan Ipoh are also on Previndran’s radar, along with Puchong, Seri Kembangan, Kajang, Bandar Sri Damansara, Kota Damansara, Petaling Jaya and Cheras outside the capital in Selangor.

These areas are stable and have good demand thanks to the combination of landed, condo and commercial developments, he said.

Klang is another area investors should look into, he said. Although properties in the town are mainly landed residential and commercial units, they are in good demand.


This article appeared on the Property page, The Edge Financial Daily, October 28, 2011.

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