No more ‘Christmas shopping’ for govt ministries, says Guan Eng
The government has implemented a “zero-based budget” system to avoid a “Christmas shopping” scenario where ministries rush to finish up allocations before the year ends, said the Finance Ministry. Finance minister Lim Guan Eng said zero-based budgeting would maximise savings and returns. Zero-based budgeting is a method of budgeting in which all expenses must be justified for each new period. It starts from a “zero base” and every expense is analysed based on whether it is needed and how much it costs. Lim said the current expenditure comprises salaries, rents, utility bills, contra items and maintenance expenses (among others). This was unlike before where the expenditure was prepared in an incremental manner. (The Star Online)
Riyadh to invest RM1.9bil in local property market
Property developer Riyadh Group Indonesia is setting foot into the Malaysian property scene with an investment of US$450mil (RM1.88bil), to be spent over a 10-year period. The investment has been earmarked for two projects – the revamping of a mall in Shah Alam and several developments over 10.35 ha of land in Serenia City, Sepang. The group will be embarking on the two projects via a joint venture (JV) with two local firms – Mainstay Holdings Sdn Bhd and Pembinaan Tetap Teguh Sdn Bhd (PTT). The first project will see the revamping of Space U8 Mall in Bukit Jelutong, with the project expected to be completed in six months. The mall will also be renamed to “Maha Karya Town Square”. The second project, with a GDV of RM1.7bil, is an enhancement of the planned Horizon Village Outlet development in Sepang. The project includes a premium outlet village, two hotels, high-end serviced apartments, and a Riyadh International Islamic Hospital. (The Star Online)
DBKL detects unit rental fraud syndicate
The Kuala Lumpur City Hall (DBKL) has detected the existence of a housing rent fraud syndicate involving Public Housing (PA) and the People’s Housing Project (PPR). This involved the false signatures of the DBKL JPKKB directors and senior officers on the rental offer letters of the housing unit in Kuala Lumpur. The complainants only detected the scams after failing to obtain the keys after the rental offer letters were received. The scam was active in the Lembah Pantai area, where the conmen would pass themselves off as agents renting out PA and PPR units. DBKL said it does not appoint any individual or mediator (agent) for application and registration services as well as any matters pertaining to the rental and purchase of DBKL PA and PPR. (NST Online)
Limit powers of FT minister and KL mayor in land matters, says Khalid
Federal Territories Minister Khalid Abdul Samad wants certain powers vested in him and the mayor of Kuala Lumpur to be removed to prevent corruption in land matters. Khalid said while the planning of development projects in the city has generally been satisfactory, the implementation of such projects has led to corruption and misuse of power. He cited cases of developers obtaining green spaces in prime areas to undertake commercial development by “giving kick-backs”, which were done through direct negotiations. Another source of corruption is when setting plot ratios, in which a developer buys at a certain plot ratio price, then talks to the minister or mayor to change it to a higher plot ratio, he said. (The Edge Markets)
Positive sentiment for retail property sector
The retail property sector is still looking resilient despite the current market glut, in line with the performance of retail-based REITs. Property consultancy firm Rahim & Co reported that the local retail sector is looking positive. AmInvestment Bank concurred, noting that the outlook for retail properties, mainly shopping malls, will remain resilient in the short to medium term, especially for REITs like Pavilion REIT and Sunway REIT whereby both have a high occupancy rate in their shopping malls. “Consumers are still optimistic but remain cautious and selective in spending plans.” Separately, it said the demand for industrial properties will be driven by the logistics and warehousing segments, which are largely supported by the emergence of e-commerce. Meanwhile the outlook for the office sector will be negative in the medium term due to oversupply, with the greatest impact in KL city. (The Star Online)
