Online shopping uptrend in Malaysia

KUALA LUMPUR: Online shopping in Malaysia is poised for significant growth, given its rising popularity and relatively new adoption rate among local customers.

According to PwC in its Total Retail Survey 2016 report, South-East Asian consumers are relatively new to the online marketplace, with nearly three-fifths of respondents in Malaysia reported buying online only within the last three years.

“Based on patterns we’ve seen in other countries, there is a good amount of room for growth,” said PwC senior executive director Scott Constance.

According to the report, higher proportions of Thailand and Singapore consumers are new to online buying as compared to the average of our global survey.

“More than 80% of China respondents have been buying online for more than three years,” it said.

The report, which surveyed 500 consumers per country, revealed that about half of Malaysian respondents buy online at least monthly and only 7% have never shopped online. The survey also said South-East Asia shoppers lead the world in mobile and social adoption.

“Nearly three quarters of Malaysian respondents use social media to access promotional offerings while shopping. Consumers in South-East Asia demonstrate a strong desire to use social media in forming associations with their preferred brands.”

In terms of online buying frequency, PwC said although a sizable percentage of consumers in South-East Asia report buying on a daily, weekly, or monthly basis, the percentage was still smaller compared to its overall global survey.

It said that 60% of all consumers its global survey reported buying online on a monthly basis or more frequently.

“Consumers in Singapore match this proportion, followed closely by Thailand at 58% and Malaysia at 48%.”

The report also said that South-East Asia consumers are among the world’s fastest and strongest adopters of mobile and social media usage in support of their online and in-store purchasing activities.

“Whatever the mobile or social media purchase usage, whether it is using a mobile phone to check product reviews or prices, or accessing coupons, or making purchases outright, it’s likely that consumers in South-East Asia are doing it more frequently than just about anyone else in the world.

“Two-thirds of consumers surveyed in Malaysia and Singapore, and nearly three-quarters of consumers surveyed in Thailand report using their phones directly to make purchases. Rates of mobile phone purchasing usage in all three South-East Asia countries surveyed exceed the global average of 54%,” said PwC.

- EUGENE MAHALINGAM -

The Transformation of South Western Kuala Lumpur

The South Western Kuala Lumpur area covers Bangsar, leading on to Bangsar South or formerly known as Kampung Kerinchi, including the Abdullah Hukum area, all the way up to the Bukit Kerinchi Hills.

Currently, these areas are individually undergoing massive transformation and redevelopment efforts by the established names in the property industry.

This locale is interesting as it holds a picturesque backdrop of contouring hills that merge with surrounding land masses, adding to the lure that many property purchasers are attracted to.

Bangsar South by UOA Development Bhd is today one of the more favoured townships within South Western Kuala Lumpur. This locale, initially named Kampung Kerinchi, has come a long way from its humble beginnings.

The 60-acre fully integrated residential and commercial enclave is centrally located and enjoys excellent Internet connection aside from being a transportation hub. The growing neighbourhood holds a variety of boutique malls, hotels and recreational facilities as well as an award-winning six-acre central park.

Since the revitalisation of Kampung Kerinchi, developers such as Suez Capital Sdn Bhd and EUPE Corporation Bhd have all taken part in the blossoming of the now vibrant location.

The releases by both these established property figures in the industry are currently being constructed along the Federal Highway and are dubbed KL Gateway and Novum respectively.

As one would venture deeper into Kampung Kerinchi, the hills of Bukit Kerinchi are clearly visible. Here, IJM Land Bhd has set a vision to carve through the forest, creating a forest community that would result in Kuala Lumpur’s one and only urban forest city.

This development by IJM Land is dubbed Pantai Sentral Park. The expanse is placed next to a 200-acre forest, designed to seamlessly blend into the forest providing its future residents as well as working community to get as close as possible to nature.

As of now, the developer has launched two phases within Pantai Sentral Park and these include Inwood Residences and Secoya Residences. This impressive mixed development by IJM Land is expected to be completed within the next 10 to 15 years.

As one would look down from the peak of Bukit Kerinchi, Mid Valley City can be seen. This shopping city is a thriving retail haven that calls the South Western Klang Valley region home. However, the attention grabber in the property industry with regards to this location is KL Eco City by SP Setia Bhd Group.

This cutting-edge development beholds a city of tomorrow exuding architectural boldness. The prestigious development will sit on a 25-acre prime plinth of land situated next to Mid Valley City. KL Eco City is the first integrated green luxury development that will be anchored by prime commercial offices, high-end retail outlets, world-class serviced apartments as well as luxury residential towers.

Aside from its stunning appearance, KL Eco City will also become a transportation hub as it is holds connectivity to the Abdullah Hukum station.

The Eco City station is a KTM Komuter proposed train station currently under construction.

The station primarily functions and is named after KL Eco City. The existing Abdullah Hukum LRT station is located beside the Eco City station and unified connectivity will be implemented in the near future despite the stations being named differently.

As one would move closer toward LRT Bangsar, within walking distance is where a revitalising development is being constructed a stone’s throw away from the popular Bangsar Village Mall.

Developed by Hap Seng Land Development (Bangsar) Sdn Bhd, Nadi Bangsar is a luxury freehold serviced apartment located off Jalan Maarof, near to the upscale area of Bangsar.

This serviced apartment is targeted for completion at the end of this year and comprises over 400 units of apartments in a single 38-storey block. Unit sizes offered range between 441 sq ft to larger 1,130 sq ft units.

 - Viknesh Ashley -

Going Green Makes Sense?

Should property developers jump onto the green building bandwagon? -REENA KAUR BHATT-

Most people think of green buildings as just a building that does not really have as bad of an impact on the environment as another ‘average’ building. Not many building owners and developers are fully aware of the benefits of investing in a green building as they fail to see beyond the additional spending costs at the initial stages.

Dr Herman Teo, GM of Green Building Index explains why developers can’t go wrong by going green.

Green is the new black

In 2009, the organisation developed and introduced the Green Building Index (GBI) – Malaysia’s first comprehensive rating system for evaluating the environmental design and performance of buildings, towns and factories.

The GBI rating tool provides an opportunity for developers and building owners to design and construct green, sustainable buildings that can provide energy savings, water savings, a healthier indoor environment, better connectivity to public transportation, the adoption of recycling and greenery for their projects and help reduce construction impact on the environment. Since its introduction in 2009, GBI has certified over 150 million square feet of green spaces in Malaysia.

Why going Green pays

While it may cost developers a bit more to get started when they go green and while green materials and products can be more costly, they really have to consider the type of savings that they will be able to reap in the long-run. Even though green buildings may typically cost up to 3-6% more, most developers will recoup their initial investment within seven years through energy savings.

If a building was designed to be green since the design stage, there may not even be any additional cost. When constructing a green building, focus is placed on increasing the efficiency of resource use, namely energy, water and materials. The GBI certification is based on 6 main criteria namely Energy Efficiency, Indoor Environment Quality, Sustainable Site Planning & Management, Materials & Resources, Water Efficiency and Innovation.

For instance, energy efficiency means that energy consumption in a building is improved by optimising the north-south orientation, harvesting natural lighting, commissioning and regular maintenance. Malaysians spend copious amounts of money on electricity bills, especially with the recent El Nino; many are cranking up their air-conditioning throughout the day.

The most appealing factor of a green building is that it require much lesser energy to cool. The tenants of a green residential building will benefit from lower electricity and water bills as well as lower maintenance charges because green buildings require significantly less maintenance.

Similarly, commercial buildings will benefit from lower operating and maintenance costs through the implementation of proper construction management, storm water management and reducing the strain on existing infrastructure capacity. This means that there will be savings in water and electricity usage as well. GBI recently certified a coffee plant, which implemented new energy saving features to its existing factory building. Post certification, the factory now saves an astounding RM80,000 in maintenance bills each month!

Towards a brighter and greener future

By building green we will also be reducing the building’s impact on human health and environment during the building’s lifecycle; through better siting, design, construction, operation, maintenance and removal.

One of the goals of green buildings is to reduce its environmental footprint. The United Nations Environment Programme (UNEP) estimates that buildings contribute to as much as a third of total global greenhouse gas emissions, mainly due to the use of fossil fuels for energy generation. The diagram below proves how green buildings contributes in terms of reduced carbon emissions:

Besides that, a green building achieves better indoor environmental quality through passive design strategies, improving acoustic, visual and thermal comfort. The cooler, brighter and healthier environment will bring forth an increase in the wellbeing of its occupants and improve staff’s productivity in commercial buildings.

Dr Herman revealed that a building with good design, positioning and which have a lot of windows actually help its occupants (staff) to work and think better and their mental memory can improve by 10% to 25%; this will increase the productivity of the building’s occupants.

Added benefits

The added perk of green building include incentives for developers once they obtain GBI certification for their projects.

Any qualifying expenditure to obtain GBI certification for a building used for his business qualifies for tax exemption on the statutory income which is equivalent to 100% of that expenditure. It should be noted that the GBI rating system is strictly regulated by an independent committee, the GBI Accreditation Panel (GBIAP). Consisting of senior building professionals; this body reviews and awards the GBI rating to qualified projects.

A win-win situation

A GBI certified building not only saves money and the environment in the long run but also enhances a developer’s reputation as well, as it showcases a form of corporate social responsibility. More importantly, as researched by the World Green Building Council, green building practises will increase building values by 7.5%. A discerning property buyer will realise that green buildings actually enjoy higher capital appreciation as compared to normal buildings.

“There is no downside to building green – If there is, why did some countries make it a requirement for all its buildings to have green building certification?” says Dr Herman.

Conclusion

Building owners should really look at a green building as more of an investment than anything else - an investment that not only saves money in the long-run but also helps the environment as well.

- Dr. Herman Teo-

GM of Green Building Index

Strata Management Bodies — how do they work?

AS a city grows, the development of high-rises becomes inevitable. So one can only expect more strata developments to be built in Malaysia in the future and strata living will become increasingly common. It is therefore imperative to understand the existence and function of the management bodies that ensure a comfortable and secure strata living environment.

Beyond the initial management period by the developer upon vacant possession, there are three bodies that a strata owner needs to know: the Joint Management Body (JMB), the Management Corp (MC) and the Subsidiary Management Corp (Sub-MC).

The members of the MC and Sub-MC are made up of solely strata owners while the JMB involves the joint participation of the developer and owners.

Both the JMB and MC have the same function — that is to manage the common properties of a strata development. The JMB is formed within one (1) year from when vacant possession is delivered to the strata owners pending the issuance of strata titles, while the MC is formed upon the issuance of strata titles. In other words, if a strata title is delivered together with the keys to the strata unit, the formation of the JMB is not applicable. If the JMB has been formed and strata titles are then issued thereafter, the JMB will cease to operate when the first AGM of the MC is convened.

The first AGM

According to the Strata Management Act 2013 (SMA 2013), the first AGM of the JMB must be convened no later than 12 months from the delivery of vacant possession. In cases where vacant possession was delivered before the SMA 2013 came into force, the first AGM must be convened within 12 months from the date the SMA 2013 was enforced. Take note that the date of commencement of the SMA 2013 in all states is on May 31, 2016 except for Penang which is on July 11, 2016. Sabah and Sarawak have no strata regime to date, unlike Peninsular Malaysia and Labuan.

On the other hand, the first AGM of the MC will be convened within one month when at least one-quarter of the aggregate share units are transferred from the original landowner to the unit owners.

The strata owners shall become proprietors once their interest in the parcels have been duly registered in their respective strata titles. Strata owners must be aware that they are eligible to vote and to become a member of the MC committee only when they have settled all dues and payable sums to the management body at least seven days before the first AGM.

The function of the management bodies is unquestionably to manage the development especially its maintenance, and to preserve the condition of its common property. Management bodies collect “Service Charges” and “Contributions to Sinking Fund”. They can also make additional by-laws. These are not exactly laws but more like house rules that apply to every parcel owner. They can also list defaulters on the general notice board.

The Sub-MC

Given the rise of mixed-use developments and their unique structure, where they share common infrastructure, the SMA 2013 introduced the Sub-MC to ease the management dilemmas that affect such developments. One common dilemma is whether the funds collected from the residential parcel should be used on the maintenance of the common property at the commercial parcel or vice versa.

The Sub-MC can also be formed for a wholly residential project when there is a need to have a separate management. An example would be penthouse unit owners who are entitled to an exclusive garden and infinity pool at the roof top, which are not accessible by other normal strata owners in the same development. Hence, a Sub-MC can be formed to maintain these exclusive facilities. The SMA 2013 allows a Sub-MC to manage the designated Limited Common Property in the development. A Limited Common Property refers to the common property designated for the exclusive benefit of certain strata owners but not all. The Sub-MC shall manage and maintain the Limited Common Property by separately collecting the “Contribution to Sinking Fund” and “Charges” from the entitled owners.

It is within the power of the MC to form a Sub-MC. However, it is not an easy task as it requires 2/3 of the aggregate share units of parcels of all the strata owners to agree with the proposition. Besides, there is also an issue of cost in engaging professionals in the submission as well as the legal compliances.

As you can see, the management bodies decide a series of matters, from managing funds to the recovery of damaged property. It works for the benefit, comfort and enjoyment of each strata owner. Hence, it is always wise to involve yourself in meetings called by the management bodies to have your say on matters that reflect your well-being in the development. Nonetheless, your presence will also act as a form of check and balance on the management body. Just like a public listed company, your unit would fetch better value if its management is well-run.

-Chris Tan-

 Managing Partner of Chur Associates