Property Hunter Magazine October Issue 2014

/// Hot Topic Venturing into Commercial Properties P roperty development remains one of the main drivers of Malaysia’s economy and Malaysians will continue to invest in residential and commercial properties as a way to enhance their investment portfolios. With the rising demand for housing stemming from population increase and urban migration, property developers have been more inclined to produce residential properties which fulfills the intrinsic need to have a roof over our heads. The commercial property market is mainly incomedriven and although it is outnumbered by residential properties, it is a significant and growing sector. The term commercial property refers to buildings or land intended to generate a profit, either from capital gain or rental income. These includes office buildings, industrial property, medical centers, hotels, malls, retail stores, warehouses, and garages. There are several factors that make investing in commercial property a sound investment. Tenant management is one of the biggest distinguishing factors between a residential and commercial property. For residential property, furnishings and renovations are pretty much standard if you want to rent out your unit in a competitive market. Commercial property tenants on the other hand prefer their units bare as they usually want to renovate them to their specifications. This in itself makes the entire letting process much easier and hassle free as no personal preference has to be considered. Residential property owners often complain about runaway tenants leaving in their wake outstanding rent, unpaid utility bills and in more extreme cases, damaged property. Commercial property tenants generally pose less problems in this area and they are more likely to adhere to the terms of their tenancy agreement. And if your commercial unit is located in a competitive area, you can be assured of continued interest in the unit and spare you the hassle of finding a replacement 26 www.PropertyHunter.com.my /// HOT TOPIC Property Hunter Expo Commercial Edition October 3 – 6, 2014 Ground Floor, Suria Sabah Shopping Mall. tenant should your existing one decide to terminate the tenancy agreement. The risk factor As is any equation, there are the pros and cons and property investors have to weigh in the risk factors of choosing a commercial property over a residential property. Factors such as location, property type or design, and economic conditions are primary considerations. Commercial properties fluctuate in tandem with the country’s economy - an economic downturn means less purchasing power, leading to lower demand for retail spaces and ultimately lower property value and rental rates. Undeniably, the risk is highe r but so are the returns. For local property developers, the risk factor can be mitigated by being business savvy and able to read the market well enough to capture the interest of new and seasoned property buyers. Innovative design concepts, a variety of built-in amenities and very competitive prices would be crucial to stand out in the crowd of new and upcoming commercial property developers. Golden Hill Industrial Park PacifiCity In trying to find that first step on the commercial development ladder, the trick is timing. So, is the timing right for more commercial property development in Sabah? From the many new projects that are taking shape not only in Kota Kinabalu city but also in thriving towns such as Beaufort and Kota Marudu, that seems to be very much the case. Beaufort square Commercial Mall and SOVO by Bina Puri Properties Sdn Bhd located along the same route. Closer to the city are Pacificity Mall by Pacific Sanctuary Holdings Sdn Bhd and Golden Hill Industrial Park by Bumiwang Properties. Commercial property expo Property investors in Sabah will have a chance to view quality commercial properties in the up-coming Property Hunter Expo Commercial Edition scheduled from October 3 – 6, 2014 at Ground Floor, Suria Sabah Shopping Mall. This is the first time Property Hunter magazine is organising an expo showcasing exclusively commercial properties to focus on this fast developing sector of the local property market. Developers from Sabah and Peninsula Malaysia will M-Square Township 8 Avenue MITC Ayer Keroh Melaka be introducing a diverse range of Commercial & Industrial properties to suit both new and established businesses. from Kota Marudu and Kimanis which points to fresh optimism in the development of new business markets outside of Kota Kinabalu. Developments from Sabah Grand Merdeka Development Sdn Bhd will be showcasing its first suburban mall, Grand Merdeka Mall, and Grand Merdeka Home Warehouse located along the Tuaran Bypass. Another featured mall is the 13-storey 8 Avenue Properties to be featured at the expo include 10 from Sabah and four from Peninsular Malaysia. Out of the 10 properties in Sabah, three are from Beaufort, and one each The three Beaufort commercial properties making their debut at the expo are Bandar Mingo by VC Bumijaya Sdn Bhd, Lumat Centre 2 by Pemborong Hasil Emas Sdn Bhd and Beaufort Square by Kimis Development Sdn Bhd. M-Square Township by GPS Development Sdn Bhd and Kimanis Commercial by New Kimanis Town Sdn Bhd rounds up the Sabah exhibitor list. Developers from Peninsular Malaysia Well-known property developer Glomac Berhad will be featuring its shop-office properties in Peninsular Malaysia namely Glomac Centro Shop Offices in Petaling Jaya and Glomac Cyberjaya 2 Shop Offices in Cyberjaya. And from property hotspot Johor is Phase 13 Shop Lot by Tanah Sutera Development Sdn Bhd recently held an which exclusive showcase in Kota Kinabalu. Lumat Centre 2 Resorts are also categorised under commercial property and the sole representative of this category is the very plush Sang Sarang by RK Group. Kimanis Town www.PropertyHunter.com.my 27

Property Hunter Magazine October Issue 2014 | Page 26