A GROUP of about 100 people from Hong Kong exit a tour bus parked at the base of Phileo Damansara in Petaling Jaya, making their way up excitedly to Sheng Tai International Sdn Bhd, a diversified real estate, investment management, and hospitality firm. They are in Malaysia for four days and will be viewing a few developments, namely Novo in Jalan Ampang and The Sail and Regalia Beach Front, both in Melaka.
Sheng Tai will also be organizing a durian party for the tourists. A couple of long tables have been set up in Sheng Tai’s sales office and across the road under a cab stand. A few rows of durians still in their thorny shells were on the tables, lined with white table cloths, red plastic chairs neatly tucked under the tables. In the sales office, a Sheng Tai staff briefs guests about Novo. In another part of the sales gallery, Julia Chow has a tablet in front of her. Chow, in her early 30s, is seriously considering buying a unit as a holiday home.
I like the food in Malaysia. The weather is good. Malaysia is a very welcoming place; the people are warm, and language is not an issue. I have been to Malaysia three times over the past two years, and I have enjoyed myself a lot,” Chow says. The current property market glut has resulted in some developers offering their properties via a property tourism platform, with many tourists from Hong Kong looking to countries like Malaysia as a potential holiday home or a place to retire. These trips are so interesting for us Hong Kong people,” says Chow, who adds that she is really keen to have a unit but is yet to make a final decision.
It is so affordable. And space. she tails off.
I am particular about space. In Hong Kong, the apartments are generally tiny,” she says. Chow says the average size is between 400 sq ft and 500 sq ft for five Hong Kong people. We buy here (in Malaysia) as a second home and let the company manage it for us. There is guaranteed rental and excellent returns on investments. Sheng Tai International (Hong Kong) Ltd general manager Chak Wan Chuen, or fondly known as Mon Jie (sister Mon), says around 400 people travel to Malaysia from Hong Kong every month.
People from Hong Kong believe Malaysia is a good place to invest. Our focus is on returns and not so much on the location or how large the unit is. What’s more important to them is the level of returns. We offer between 6% and 8% for serviced suites, versus just 3% in Hong Kong.
Chak says about a third of investors who come on these trips end up buying something.
“They are usually between 40 and 70 years old. Some are retirees. We call it property tourism, bringing them from Singapore, South Korea, Japan, Seattle (US), and Australia. We have our own channel. We have an office in Shanghai and Hong Kong, and we plan to expand to other countries.” Chak says Sheng Tai International offers guaranteed returns of 7% to 8% in Malaysia, with the threshold for foreigners to buy is RM1mil.
Although this may vary, for instance, in Melaka, it’s RM500,000.
PPC International managing director Datuk Siders Sittampalam says he is “not seeing a tremendous number of buyers coming into Malaysia, but we are one of the cheapest in the region,” he tells StarBizWeek.
The current glut in Malaysia makes it more appealing,” Siders adds.
He points out that Malaysia has a young population; there will be tremendous potential for housing going forward. Eventually, all these people will need homes. That means more demand for housing and commercial property. Furthermore, with the various housing policies in place, there’s potential for demand to catch up with supply eventually. Developers, too, are more cautious with the type of properties they are building. So, Malaysia is quite appealing to foreign investors. Considering our exchange rate, property prices may not be considered to be too expensive for foreigners.