APR24_HighRes

PP18617/05/2016(034488)
MCI (P) 046/07/2017
PP18617/10/2014(034059)
MICA (P) 125/07/2015

EDITOR’S NOTE
TROPHY ASSETS
IS THE NEW GAME
In recent years, very niche products in the market are attracting the
interest of a select group of investors – High Net Worth Individuals
(HNWIs) from Asia. It hasn’t gone unnoticed – more branded residences
are being built all over Asia. And as in all things branded, price is not the
main consideration. Thus, selling these prized assets even when the market
is screaming ‘oversupply’ and ‘overhang’ is not an issue as demonstrated
by some of the projects we present here as examples. We have interviewed
developers, architects and consultants on this growing trend.
Across from Abu Simbel temple, Egypt
The other niche product attracting a fair amount of attention is heritage
shophouses - this is particularly so in Singapore where there is an acute
shortage of supply; as a result, shophouses in Singapore have attained the
status of a trophy acquisition. We delve deeper into the situation and include
Melaka, Penang and Kuala Lumpur too due to the many shophouses there
sharing the same characteristics as those in Singapore.
For those interested in Japan, we have two consultants, one of whom has
authored 4 books on investing in property in Japan, China, Hong Kong and
globally, all of which come with many case studies. They will give a better idea
of the investing environment in the next Olympic destination.
From the Land of the Rising Sun, we go west to the Land of the Midnight
Sun – Sweden. When it comes to property, Sweden is famed for its IKEA
furniture and furnishings. But the iconic brand is much more than that – it
embraces sustainability and community, and increasingly technology as its
core guiding principles when growing roots across its global destinations. We
dig dipper into some little-known facts about this popular brand.
The closure of Boracay Island for 6 months as of 26th April might get some
investors jittery about investing in the Philippines. Whatever the speculated
reasons for the closure are, one thing is clear – it doesn’t spell the end of
tourism for the Philippines or Boracay. With over 7,000 islands, there is no
shortage of beaches meaning visitors thinking about retiring there should
carry on with their plans as the Philippines has one of the most relaxed
residency programmes in the world. Check out our story in this issue.
JAN YONG
Editor-in-Chief
editor@asianpropertyreview.com

May - June 2018
5 NEWS SNIPPETS
6 Drastic changes for Thai tenancy laws
14
COVER STORY
8 Branded residences on the ascent in Asia –
Not a new thing, but they are coveted by HNWIs all
over Asia now.
14 Joanne Kua, CEO of KSK Group Berhad and
Managing Director of KSK Land Sdn Bhd
talks about 8 Conlay and Kempinski, their
maiden project.
20 Chris Graham (Founder and MD of Graham
Associates), who is regarded as one of the world’s
foremost specialists on branded residences reveals
an insider’s view.
26 Bill Barnett, Managing Director at C9 Hotelworks
talks about the branded residences scenario
in Asia.
28 SB Architects gives their view on how they go
about designing branded residences.
28
HERITAGE SHOPHOUSES
34 Heritage shophouses are trophy assets in
Singapore as interest grows among HNWIs, family
offices and funds in owning them.
40 Simon Monteiro, who specialises in heritage
buildings, gives an account of his experience
from the time interest in heritage shophouses in
Singapore started gaining ground.
44 In Malaysia, the interest is not as obsessive but
is still considered high in UNESCO-designated
areas like Melaka and George Town. KL See,
director of Metro Homes gives his view on the
investability of shophouses in Malaysia.
34

64
INVESTMENT
50 Christopher Dillon narrates how he bought his
first apartment in Tokyo.
52 The new Malaysian Act extends the limitation
period for negligence suits to either 6 years
from the date when the cause of action accrues, or
within three years from the date on which the
claimant knew about the material facts (if that
period expires after the 6-year period).
56 Buy a property and retire in the Philippines?
Why not, says Nick Stuart, Founder & MD of
exclusivehotproperties.com
84
24
76
WORLDVIEW
64 IKEA’s expansion plans in Asia
70 Understanding Japan’s counter-intuitive real
estate market
72 Writer and entrepreneur Christopher Dillon
explains about the impact of earthquakes and
infrastructure on the Japanese property market.
DESIGN
76 A ‘home-made oasis’ in KL – Tiny Garden
transports you to a magical world amid the rows
of drab terrace houses in a Kuala Lumpur suburb.
80 From a small design firm in Nottinghamshire, UK,
71 years ago, Benoy’s footprint now spans the
entire globe including an increasing number in Asia.
Asian Property Review interviews Qin Pang,
Director and Head of Benoy’s Shanghai Studio.
INNOVATION
84 Singou’s ‘Butler 1’ robot is the first of many
Mandarin-speaking robots that will be deployed
worldwide to cater to international property
buyers from China.

www.asianpropertyreview.com
May - June 2018
EDITORIAL
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Contributors
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May - June 2018
5
YONG TAI, KOF HLDGS TO JOINTLY DEVELOP
U-THANT CONDO
Tourism and cultural property developer
Yong Tai Berhad will jointly develop
a high-end low-density condominium
Impression U-Thant together with KOF
Holdings Sdn Bhd and RISDA Berhad.
Impression U-Thant, which later will be officially
known as “Residensi Mutiara U-Thant”, will be
Yong Tai’s maiden high-end development bearing its
signature Impression trademark amid the lush greenery.
With an estimated gross development value (GDV)
of about RM200 mil, the 1.2-acre freehold project
comprises a 10-storey condominium.
There are six different types of layout occupying builtups
of between 782 sq ft and 1,632 sq ft. Prices for
the 108 units start from RM1.3 mil.
Yong Tai’s Chief Executive Officer Datuk Wira
Boo Kuang Loon said there is a growing trend of
higher-end buyers who appreciate living within a
low-density green enclave while at the same time
seeking the exclusivity.
Impression U-Thant features innovative architectural
designs, dual-key features and amenities and is
expected to be completed by 2021.
The development is strategically located along Jalan
U-Thant overlooking the Royal Selangor Golf Club
and is near the Embassy Row. It is well connected to
major city roads such as Jalan Tun Razak.
The recent Groundbreaking Ceremony at the site
was officiated by Her Royal Highness Sultanah of
Pahang, Duli Yang Maha Mulia Sultanah Hajjah
Kalsom who was accompanied by Yang Amat Mulia
Tengku Fahad Mua’adzam Shah Ibni Sultan Haji
Ahmad Shah as the Chairman of KOF Holdings
Sdn Bhd. Also present at the event were the
Chairman of Yong Tai Berhad Dato’ Indera Syed
Norulzaman Syed Kamarulzaman; Deputy Director
General of RISDA Abdullah Bin Zainal and the
Director of City Planning Department DBKL
Sulaiman bin Mohamad representing The Mayor of
Kuala Lumpur.

6 ASIAN PROPERTY REVIEW NEWS
NEW THAI LAWS
FAVOUR TENANTS
From 1st May, there will be sweeping changes
affecting tenancy laws in Thailand. The main
changes which fall under the ambit of the
Consumer Protection Act are as follows:
1. 30 DAYS’ NOTICE TO QUIT ANYTIME
Tenants can give 30 days’ notice to move out
anytime as long as their reason is reasonable.
Tenants are not obligated to find another
tenant to take over. Acceptable reasons include
job transfer or moving abroad. However, it is
not clear what the yardstick is for determining
what is ‘reasonable’. This poses potentially
a big problem for landlords who would face
uncertainties in their rental income flow. This is
however mitigated by the fact that this new law
applies only to landlords leasing out 5 or more
residential units which is considered a ‘residential
lease business’. But if caught flouting the rules,
landlords face jail time which is unduly harsh for
what is essentially a civil offence.
2. NON-COMPLIANT LEASES NULL
AND VOID
All existing leases which do not comply with
the new law will be considered null and void;
and their terms replaced by the new law. This
retrospective piece of legislation again is a
dramatic annulment of all non-compliant leases.
It is however unclear whether the entire existing
contract is null or void or only those terms which
do not comply with the new law. If the latter,
then theoretically, existing contracts do not need
to be replaced because the new terms would
automatically replace the non-compliant terms.
3. 2 + 1 ILLEGAL
The typical 2 months security deposit plus 1
month advance rental is now illegal. Landlords
can only ask for one month’s security deposit
and one month’s advance rental. Landlords will
have difficulty recouping their losses if the tenant
leaves behind unpaid bills or damages amounting
to more than one month’s rental.
This amount cannot be used to top up any unpaid
rent or damages. This begs the question as to why
a security deposit is required at all if the landlord
can’t utilise it.
Landlords in Thailand tend to pass on the repairs
and maintenance even of a routine nature to
the tenant. This is now considered illegal along
with marking up the charges for utilities such
as electricity, water, telephone, internet, etc.
Landlords must now charge at cost otherwise it is
considered profiteering and hence illegal.
4. 7 DAYS’ REFUND OF DEPOSIT
Security deposits must be returned within 7 days
instead of the current 30 days. This allows very
little time for landlords to assess the damages to
the unit when tenants leave.
5. 30-DAY WAIT
In the event of non-payment of rental, the
landlord cannot change the locks or remove the
tenant’s belongings. This is considered a criminal
act of trespass and the landlord can be prosecuted.
Instead, the landlord must give 30 days’ notice of
the breach, and if not rectified, then only can the
landlord terminate the lease. This is in line with
international practice.

May - June 2018
7
SWHENGTEE PROPERTY
EXPO IS BACK
The long-anticipated Swhengtee Property Expo
KL 2018 (Swhengtee EXPO) is back! To be held
at Mid Valley Mall from 23 -24th June, the expo
as always promises exciting new developments on
top of lots of activities.
With a solid track record of more than 20,000 visitors
during the 3-day EXPO 2016 and 16,000 visitors during
the 2-day EXPO 2017, the group has proven itself to be a
successful organizer of big scale events. Exhibitors obtained
thousands of quality sales leads and even concluded a
number of sales on the spot during the last two expos.
Investors come from all over Malaysia including Penang,
Johor Bahru, Sabah, Sarawak as well as from overseas
including China, Hong Kong, Taiwan, Japan, Singapore, etc.
Through Dato Sri Gavin Tee’s overseas network and
connections with the Malaysia-China Chamber of
Commerce (MCCC) and Malaysia- Xiamen Chamber
of Commerce (MXCC), hundreds of visitors from China
will also be coming to visit the 2018 Swhengtee EXPO
in groups.
Based on the Visitors Demographics Survey in 2017,
Swhengtee EXPO attracted more than 3,000 visitors
from outstation and about 1,000 visitors from overseas.
Additionally, based on research conducted by REM and
Asian Property Review magazines, developers, professionals
and readers affirmed that Mid Valley Kuala Lumpur is the
most coveted venue to conduct property exhibitions.
The said magazines have also interviewed property experts,
Feng Shui Masters and readers, all of whom concluded that
the Malaysian property market would perform better in the
second half of 2018.
A FINE FINALE
Malaysia’s first of its kind Chinese
Reality TV Show “Anyone Can
Be A Property Millionaire” held
its Finale shooting at Connexion
Conference & Event Centre, Kuala Lumpur, which
attracted over 200 guests on 22nd April.
Produced by Swhengtee Group at a cost of RM3
million, the show took 5 years of planning, 2 years
of preparation and 45 days of filming.
During the finale, the 8 Property Millionaire Stars
shared their property investment knowledge gained
from the guidance of Dato’ Sri Gavin Tee and the
other experts in the Reality TV Show.

8 ASIAN PROPERTY REVIEW COVER STORY
BRANDED
RESIDENCES
ASIA’S ULTIMATE TROPHY PROPERTIES
The rising number of HNWIs is fuelling demand for globally recognised branded
residences with all its accompanying prestige and bespoke services.
There are now 2,000 billionaires in the world,
growing at 13% per annum, according to Forbes.
Many of them have homes all over the world and
typically stay in different countries in a year. Their
choice of homes – global branded residences. This is why
the number of such residences has increased tenfold over
the past decade.
These are homes in prime locations that offer bespoke
luxury services and prestige associated with an established
brand. Branded residences started about 100 years ago
in New York but only became a trend in the mid-1980s
beginning with Four Seasons followed by Ritz-Carlton.
When it became a success, other hotel brands came in such
as Starwood, Fairmont, Kempinski, Aman, St. Regis, Hyatt
Regency, Six Senses, Banyan Tree, W Hotels, Viceroy and
Mandarin Oriental.
However, it is in Southeast Asia and the Far East that
resort branded residences have reached a matured phase and
become the ultimate in luxurious accommodation.
In Southeast Asia, Thailand leads the way with Amanpuri
Phuket in 1988 followed by The Four Seasons Chiang Mai
in 1995. Thailand still leads today with the biggest number
of such residences in the entire SEA region.
According to Bill Barnett, Managing Director at C9
Hotelworks, large luxury hotel brands like Ritz-Carlton
and Four Seasons are seeing a high proportion of their
hotel pipeline being generated in mixed use or project with
branded residences; they tend to favour gateway cities and
key well-known leisure destinations with strong airlift.
topped US$16 bil and is still growing at an unprecedented
rate. Across the region, C9 Hotelworks estimates there are
about 94 mainstream hotel residence projects with more
than 21,000 units on line, with 78 properties expected to
complete between 2018 and 2020, representing an 83%
increase over the inventory in 2015.
“Asia is also the testing ground for pioneering iterations of the
concept with regards to scale, business models and levels of
servicing/supporting amenities,” according to Bruce Wright,
Senior Vice President and Principal of SB Architects.
BRANDED RESIDENCE DEVELOPMENTS BY REGION
Asia, Indian Ocean
& South Pacific
16%
54%
US & Canada
BRAND AFFILIANT VS. INDEPENDENT
Number of Projects
Europe
11%
Latin America
& Caribbean
10%
9%
Middle East & Africa
Branded
Independent
“Japan has been active in top end projects like the Four
Seasons Kyoto or Park Hyatt Hanazono near Niseko.
Overall, the urban push is strong, interestingly two key
Asian resort brands, Aman and Six Senses, have city
branded residences coming up in New York City.”
According to research by Barnett’s C9 Hotelworks, the
hotel branded residences market in Southeast Asia has now
60
40
20
0
Thailand
Indonesia
Vietnam
Malaysia
Philippines
Singapore
Cambodia

May - June 2018
9
Room angle, Anantara Phuket Layan
Joanne Kua Bill Barnett Bruce Wright
Dato’ Sri Gavin Tee
WHY BRANDED?
Branded residences tick all the right boxes – for the buyers,
there is assurance of quality in construction, design and
service; secure environment, bragging rights, “Lock up and
leave” capability and the potential for investment returns
from a rental pool (notably in a resort context).
Says Joanne Kua, CEO of KSK Group Berhad and
Managing Director of KSK Land Sdn Bhd: “Ultimately,
when people buy a branded residence, they are looking
at buying more than just a property, they want unique
experiences that are often anchored on four key attributes –
o
o
o
o
Opulent design by a renowned designer
Luxury services and facilities offered by a 5-star hotel
brand
Unique architecture by a celebrated architect
Brands associated with a level of quality and trust
these brands can deliver”
“Expatriates or HNWIs prefer branded residences,
particularly famous international brands because these
brands inspire confidence
and provide the kind of
bespoke services that they
are used to. The brand carries
the guarantee of quality and
services as well as safety
and security,” affirms Dato’
Sri Gavin Tee, President of
Swhengtee Group.
Adds Wright of SB
Architects: “Usually the
access to ownership comes
at a higher cost, but the
return is a deep emotional
connection to the brand
philosophy, culture and often
the related hotel amenities.”
Other reasons include hassle-free ownership, owner
benefits, e.g. residents’ discount card, access to the operator’s
properties in other locations and like-minded neighbours.
Indeed, some leading designers such as Luciano Mazza at
HKS and John Hitchcox at YOO are talking about creating
“modern day communities” of like-minded people – a sort of
exclusive residents club.
From the standpoint of the developer, having a brand
associated with its property enhances sales by as much as
30%. The resale value is higher or maintained while at the
same time, it can fetch higher rentals.
Furthermore, these residences yield a typical premium of
between 20% - 40% with some fetching as much as 50%
- 100% more, for example, the branded residences at The
Ritz-Carlton Dorado Beach in Puerto Rico sold at up to
250% above the average per sq foot price of non-branded
units in the same development. The Armani Penthouses
in Dubai were selling at more than 50% higher than
when they were launched five years previously, according
Hotel Branded Residences: Market Participants
1 Banyan Tree Hyatt Place One & Only Shangri-La
Accor Bulgari Hyatt Regency Onyx Sheraton
Address Canyon Ranch Independent Paramount Six Senses
Aloft Chedi Intercontinental Park Hyatt Starwood
Alila Conrad JW Marriott Plaza St. Regis
Aman Dusit Thani Kempinski Radisson Blu Sukhothai
Amari Edition Kimpton Taj
Anantara Fairmont Le Meridien Regent Thompson
Andaz Four Seasons Louvre Renaissance Trump
Angsana Gansevoort Mandarin Oriental Ritz-Carlton Versace
Armani Golden Tulip Millennium Rock Resorts Viceroy
Atlantis Grand Hyatt Mondrian Rosewood Vida
Baccarat Hard Rock Montage SLS W
Baglioni Hyatt Movenpick Setai Waldorf-Astoria
Westin

10 ASIAN PROPERTY REVIEW COVER STORY
Chris Graham
Glen Chan
Arianna Leopard
to a report by Chris Graham, Founder and MD of
Graham Associates.
Interestingly, it is not just hotel brands which are the
players, luxury brands from the fashion and jewellery
industry such as Bulgari, Versace, Moschino and Armani
and those from the automotive sector such as Porsche and
Mercedes Benz have also licensed their names to developers.
Royalty fees typically range between 3-5%, according to
HVS and Savills.
According to data from Savills, 65% of branded residences
around the world are located in urban locations and 35%
are in beach/resort locations. Many experts believe that this
urban-dominant trend will continue. “Prime urban branded
developments have greater appeal because they are perceived
as less risky,” observes an insider.
However, Wright from SB Architects believes that despite
the urban-centric focus, there is a growing number
of thriving ultra-luxury branded resort real estate in
destinations like the Maldives, Caribbean or Turks & Caicos.
THE DESIGN FACTOR
Apart from location which is the most important factor
for branded residences, architects and interior designers
are also a critical part of the mix. “Branded residences need
to have a high-degree of personalization and the accent is
on interiors that tag the buyer’s lifestyle and wrap around
emotion and feelings. We seamlessly merge architecture,
interior design, and lifestyle in a way that speaks to the
aspirations of the buyer, explains Arianna Leopard, Director
of SB Architects.
Wright concurs: “Consumers are more design conscious than
ever before; they want to work in creative spaces and holiday
in unique hotels. They want that bespoke design aesthetic to
continue through their personal lives into their homes.”
Yoo’s founder John Hitchcox says: “This can really be
attributed to the growth of the design savvy consumer, the
ever increasing importance of brand trust in our society and
ultimately, developers recognising the importance of the
home as a high involvement purchase.”
Yoo is a leading designer in this sector with a portfolio
of over 80 projects around the world and a stable of top
designers including Philippe Starck, Jade Jagger and
Kelly Hoppen.
The ultimate design differentiation is of course to
engage “starchitects” for example WATG’s St. Regis
Hotel & Residences in Singapore and the residences
by Norman Foster and Frank Gehry at Battersea Power
Station in London.
BRANDED RESIDENCES - DRIVERS OF PREMIUM
Factors comanding price premium above unbranded residential product
Medium premium
• Prime global city / destination
• Ultra - prime area & very good access
• Star architect / renowned building
• Famous designers & excellent fit out
• Excellent views / higher floors
HIGH PREMIUM: 25% +
• Exceptional five - star hotel services
• Luxury spa & wellness
• Extensive luxury leisure facilities
• High end restaurants & bars
• Unique experience / facilities
• ‘Above and beyond’ service
• Conciege for tailored experiences
• Other residents are ‘people like us’
• Facilities exclusively for residents’ use
• Association with the brand’s values
• Hightly desired destination
• Prime location with good access
• High quality building & fit out
• Recognised architect / designers
• Good views
MEDIUM PREMIUM: 15% - 25%
• High quality hotel services
• Spa facilities
• Health and leisure facilities
• Good quality restaurants and bars
• Desirable experiences
• Concierge, security & management
• Residents-only area
• Recognition and priority for residents
• Discounts for residents
• Cachet & confidence from the brand
• Desirable destination
• Good location and access
• Well-designed
• Attractive fit out
• Lesser views / lower floors
Location and
product context
MODEST PREMIUM: UP TO 15%
• Quality services and facilities
• Or high quality hotel services but
where the wider managed destination
brand experience is already delivering
notable premium
Associated brand
experience
• Some extra benefits
• Similiar experience as hotel guests
• Security & management
• Reassurance of a brand
Additional benefits
for residents

May - June 2018
11
STRUCTURE OF A TYPICAL BRANDED RESIDENCES PROJECT
Marketing Licence Agreement
Operator permits Developer to use the Residential Trademarks in
connection with the sale and marketing of Residential Units
Technical Services Agreement
Operator to the render technical services in connection with the
planning, building, furnishing, equipping and decorating of the
hotel and the residential component
Operator
Trademark Licence Agreement
Operator grants to HotelCo the right to
use the Trademarks in the operation
and management of hotels
Hotels Management Agreement
For management of Hotel and provision of
services to Residential Component
*
1. appoint as agent of his unit
2. appoint as agent for common area
3. grant proxy for owners’ meetings
HotelCo
(Associated
With
Developer)
*
Lease Units
Buyers joining the
Rental program
Developer
Sell Units
Buyers
Appoint
HotelCo as
agent for
common area
Buyers NOT joining
the program
*
Owners’ Association
appoint
Consultancy Agreement + Residential Services & Facilities Agreement
© 2014 Baker & McKenzie
Property Management
Company & Resort
Management Company
Clearly, the quest to differentiate is a constant race to imbue
the residences with the best and most unique qualities – this
has shifted to more experiential lifestyle.
Says Graham: “Whilst buyers’ priorities remain consistent
in terms of location, design and access to world-class
amenities, very much in line with trends in the hospitality
sector, it is increasingly more about the intangible ‘added
value’ lifestyle benefits associated with a brand. Increasingly,
the shift is towards creating an emotional connection with
residents through experiences. ”
An example is a residence with access to a private marina a
few steps away. Pan Pacific Serviced Suites Puteri Harbour
together with Puteri Cove Residences and Quayside, are
the only luxury waterfront project with both private-marina
(300 berths) and sea views in Iskandar. Developed by Pearl
Discovery, a joint venture by Singapore-based real estate
developers Pacific Star and DB2, the 205-suite Pan Pacific
Serviced Suites Puteri Harbour is scheduled to open in the
third quarter of 2018. The marina facility will be managed
by Singapore’s award-winning Marina and Lifestyle
operator, One 15 Marina.
WHAT’S NEXT?
The supply of branded residences is currently limited
around the world. However, given that more and more of
such residences are being built, it runs the risk of oversupply.
That has already happened in Thailand and Vietnam, where
branded residences are now becoming so engrained and
numerous in the market that they risk being the norm
rather than the exception, cautions Graham. Barnett agrees
saying that there will be more and greater diversity in real
estate grade from luxury to entry level. “Even budget chain
YOTEL is talking branded residences.”
This then is the challenge for the branded residences
segment today – to push that differentiation factor even
further as competition begins to heat up.
Unless otherwise stated, all charts and tables are courtesy of Chris Graham.
In fact, says Glen Chan, President and CEO of Pacific
Star Development: “The private marina in Iskandar will
be modelled after the one in Sentosa Cove which is also
managed by One 15 Marina.”
Pan Pacific Serviced Suites Puteri Harbour

12 ASIAN PROPERTY REVIEW COVER STORY
8 Conlay by Kempinski under construction.
THE BRANDED FACTOR
IN KL’S GLOBALISATION
As an emerging market, Malaysia has seen a steady uptick in branded residences
taking root particularly in its capital city, Kuala Lumpur. Dato’ Sri Gavin Tee,
President of Swhengtee Group shares his prediction of this niche market segment.
“When a city becomes globalised, it will attract
more multinational companies (MNCs) and
international travellers who are used to the
high quality of certain brands and will naturally
gravitate towards such branded establishments
including international 5-star hotels and residences.
That’s why branded residences command a higher
premium than residences that do not have a
prestigious brand attached to it.
Expatriates or HNWIs prefer branded residences,
particularly famous international brands because
these brands inspire confidence and provide the kind
of bespoke services that they are used to. The brand
carries the guarantee of quality and services as well as
safety and security.
Not surprisingly, international branded residences
have the potential to command half the market.
A branded property can enhance its value by 30%,
for example, a property without brand may sell at
The unique thing about Malaysia’s
branded residences is that prices are
at a much lower level for the same
bespoke services compared to other
countries. So, there is a lot of room
for price appreciation.
RM2,00 psf, but if it is branded with a famous
international hotel chain, it can fetch RM3,000 psf.
Further, when a popular or famous brand enters
a market, it can even make the place popular, for
example, when Air Asia flies to a little known
destination, it can make the place popular and
when more people visit the destination, the value of
properties there will rise in tandem (provided other
favourable conditions exist as well).

May - June 2018
13
BRANDED RESIDENTIAL EFFECT
Kuala Lumpur was supposed to have globalised
since 2007 when a lot of Middle Eastern, Korean
and other foreign investors beat a path to its doors.
However when the Global Financial Crisis hit in
2009, it slowed down the globalisation process to a
large extent.
It took some 10 years before KL got back into
international investors’ radar. The influx of China’s
investments especially in infrastructure such as
railways, ports and finance, as well as the siting
of key regional headquarters in Malaysia such
as China Communications Construction Co
Ltd (CCCC) , Ali Baba’s Digital Free Trade
Zone (DFTZ) kickstarted the second wave of
investments into Malaysia.
This was followed by a number of other foreign
companies setting up their regional headquarters in
Kuala Lumpur and its surrounding areas. Several
critical transportation infrastructure such as the
MRT1 and the LRT extension were also completed.
Seeing a gap in supply, a number of branded
residences were set up and were completed in
2017/2018 such as Four Seasons and W Hotel.
Around the same time, a few others were launched
such as 8 Conlay by Kempinski and Ascott Star
KLCC Residences.
With the rising number of such residences, we can
expect 2018 – 2020 to see a lot of activities in this
segment – either some will be completed, new ones
launched or being constructed.
It’s only now that we can expect to see a significant
price appreciation. In the last few years, high end
properties were hovering around the RM1.5K –
RM2K price level. We can now see price levels
jumping to RM2.5K – RM3.5K level, for example,
Four Seasons. This is the beginning of what I would
term as the ‘branded residential effect’.
PRICING ADVANTAGE
The unique thing about Malaysia’s branded
residences is that prices are at a much lower
level for the same bespoke services compared to
other countries. So, there is a lot of room for
price appreciation.
Previously, I have forecasted that prices of high end
residence could reach RM5K psf, but due to many
unforeseen circumstances such as the Malaysia
Airlines (MAS) disasters and the 1MDB issue,
the progress has been slow. However, I believe the
price level will still hit RM5K by 2020 for branded
residences not only in the city centre but in resort
areas like Penang and Kota Kinabalu.
Currently, a major concern in Malaysia is the delay
in the setup of more international corporations and
the arrival of expatriates in Malaysia. However, I
predict properties completed within the next 3 years
should enjoy the fruits of right timing – being first
in the market; thus having the advantage of quick
occupancy with high rental yield and a possible fast
price appreciation.
For example, 8 Conlay by Kempinski in KL will
enjoy good returns because by the time
it’s completed by 2020, more foreign
investments would have poured into the
city centre.
The competition is also not intense
as there aren’t too many of such super
branded residentials setting up in
Malaysia. The ones that immediately
come to mind are Four Seasons, St
Regis and Ritz-Carlton.
I believe the price
level will still hit
RM5K by 2020
for branded
residences not
only in the
city centre
but in resort
areas like
Penang
and Kota
Kinabalu.

14 ASIAN PROPERTY REVIEW COVER STORY
1
BRANDED
IN THE TRUEST SENSE
Asian Property Review chats with Joanne Kua, CEO of KSK Group Berhad
and Managing Director of KSK Land Sdn Bhd on branded residences and
their 8 Conlay debut project.

May - June 2018
15
1
What was the inspiration behind 8 Conlay
development?
8 Conlay is KSK Land’s debut project, and we
want to construct something new and exciting,
an iconic development that becomes a distinct
part of KL city centre. The birth of 8 Conlay
was based on one revolutionary mission – that
is to bring together A-list brand partners to
curate one-of-its kind living spaces through
three main elements – liveable architecture,
world-class designs and bespoke personalised
services. We want to bring luxury living in
Malaysia to the next level.
Unlike other developers that bring in designers,
landscape and service partners at the end
stages, we brought in our partners right at the
beginning and work together to map out every
detail and offering of 8 Conlay. We have never
looked back since then, and today 8 Conlay
has become this massive project - an integrated
development offering lush living experience
with the highest level of service.
With an estimated GDV of RM5.4 bil, it
sits on a 4-acre piece of land at Jalan Conlay,
comprising two branded residence towers
called YOO8 serviced by Kempinski, a five-star
Kempinski Hotel and serviced residences, and a
lifestyle retail quarters.
Just some quick facts about our brand partners
– some of them are making their debut
appearance in Malaysia through 8 Conlay:
• Liveable architecture – We brought in
Ar Hud Bakar from RSP Architects,
a visionary Malaysian architect. Hud’s
designs emphasise liveable architecture
that focuses on local content and the
human aspects of buildings.
• We have entrusted the landscape design
elements to award-winning Bangkokbased
design studio, Terrains+ Open
Space (TROP). We are transforming
the common amenity floors of YOO8
serviced by Kempinski on Level 26
(Water Lounge) and Level 44 (Green
Refuge) into retreats that encapsulate
2
Every city needs a gem development
that will put the city on the world’s
map, and branded residences have
the capability to give Kuala Lumpur a
different character that will put it on par
with other top cities in the world.
the idea of a futuristic vertical park that
blends architecture and nature, something
Malaysians have yet to experience.
• Interior designs – For designs, we have
YOO, an international design studio
working with high-profile designers
including Philippe Starck, Marcel
Wanders, Jade Jagger and Kelly Hoppen.
YOO started designing branded residences
since 1999. For Tower A of YOO8
serviced by Kempinski, we partner with
Steve Leung & YOO, to transform the
branded residences experience through
design of living spaces.
• Personalised luxury services – Kempinski
Hotels is Europe’s oldest luxury hotelier
with a 121-year rich heritage. We believe
Kempinski will be able to redefine
hospitality for our guests and residents at
8 Conlay with impeccable, personalised
services. We are so proud to host the first
and only Kempinski Hotel in Malaysia at
8 Conlay.
What is the stage of development currently?
What is the take-up rate so far? When is the
estimated completion date?
Tower A of YOO8 serviced by Kempinski
was launched at the start of 2016, and we
have sold 80% of the units to-date. In terms
of construction progress, the foundation and
basements works were completed mid last year,
and we have proceeded with the superstructure
construction works. We are currently on track
for completion in 2020. We are planning to roll
out Tower B of YOO8 serviced by Kempinski
mid this year, and will definitely share details
once ready.

16 ASIAN PROPERTY REVIEW COVER STORY
3
What is it about branded residences that
makes them in demand among High Net
Worth Individuals (HNWIs)? Share with us
what are the unique features that made YOO8
serviced by Kempinski stand out?
Globally, branded residences are perceived to be
at a level above high-end luxury properties and
increasingly popular among wealthy investors
as they offer both five-star luxuries and capital
protection/hedging tool. According to Knight
Frank, branded residences command 31%
higher capital yield compared to non-branded
luxury property segment.
Ultimately, when people buy a branded
residence, they are looking at buying more than
just a property, they want unique experiences
that are often anchored on four key attributes –
• Opulent design by a renowned designer
• Luxury services and facilities offered by a
5-star hotel brand
• Unique architecture by a celebrated
architect
• Brands associated with a level of quality
and trust these brands can deliver
When you curate branded residences, you need
to have a very good location, good design and
a consistent level of bespoke, luxury service. 8
Conlay is situated at a prime location within KL
city’s Golden Triangle. It is within five minutes’
walking distance of Pavilion KL and Jalan
Bukit Bintang’s shopping district, Conlay MRT
station, High Speed Rail, and is 20 minutes’
walking distance to Petronas Twin Towers.
Although branded developments are not
new in Malaysia, it is still at an infancy
stage. In fact, many of the KL branded
residence developments are branded solely
by a hotel partner.
For now, we see opportunities in
prime locations in Malaysia.
4
The supply of branded
residences is limited around the
world. People who buy them
don’t generally want to sell
because these are limited and
priceless possessions they are
proud to own.
If I were to pin point the single most important
value proposition of 8 Conlay, it would be the
values and trust associated with our brand
partners. We have Ar Hud Bakar, an awardwinning
architect; Europe’s oldest luxury
hotelier, Kempinski for bespoke, personalised
luxury service; and YOO for the highest
standard designs.
In Tower A of our branded residences, YOO8
serviced by Kempinski, the interior design is
by Steve Leung & YOO. Steve Leung is a
world-renowned design guru who has won over
130 awards worldwide, and he was awarded
the Andrew Martin International Designer of
the Year Award in 2015 (which is equivalent
to the Academy Awards in design). His works
reflect a sophisticated and unique character of
minimalism, with skillful adoption of Asian
culture and arts. In addition, we also have the
renowned Pok Kobkongsanti, TROP’s lead
design director, to manage the landscape which
plays a vital role in enhancing city living quality.
Simply put, each of our brand partners brings
to 8 Conlay unique qualities that ultimately
become a tangible benefit for our buyers and
investors. We want our residents to proudly say
they are buying a gem in KL and it’s worth it!
What is the ratio of local and foreign buyers?
Where do the foreigners come from?
Currently, our buyers’ profile are about 80%
foreign and 20% local. We have buyers from
Tier 1 cities in China, Hong Kong, Singapore,
Taiwan, Indonesia, Middle East and more.

May - June 2018
17
5
What is the percentage of price premium of
your branded residence over a comparable
non-branded residence? Why would buyers
pay the premium?
As mentioned earlier, Knight Frank reported
that branded residences commanded an average
uplift of 31% compared to non-branded
property segment. In addition, according to
a market update report by Horwath HTL
published in January 2018, a property with
hotel affiliation could translate to a 25–35%
uplift in pricing.
8 Conlay was launched at RM2,700 psf in 2016
and reached RM3,200 psf in 2017.
6
Our premium price can be fetched due to:
• Quality of the brands delivered;
• Central prime location;
• Luxury service and trust that brands like
Kempinski will maintain the property and
ensure the uplift of capital appreciation;
• Good design – Good designers help design
and optimise spaces that are easier to live in
or to rent out.
What is the built-up range for the units and
their price psf?
The branded residence units of Tower A of
YOO8 serviced by Kempinski range from 700
to 1,308 sq feet. They are priced at RM3,200
Despite soft market sentiments and the
oversupply issues facing the Malaysian
property market, we remain upbeat about
the long-term prospect of the Kuala
Lumpur property market.
Bedroom - Type B layout, Tower A by Steve Leung & Yoo

18 ASIAN PROPERTY REVIEW COVER STORY
7
If I were to pin point the single
most important value proposition
of 8 Conlay, it would be the values
and trust associated with our
brand partners.
psf or an average price of only RM2.3 mil
per unit. All units are fully-furnished with
furniture selected by Steve Leung & YOO and
offer views of the Royal Selangor Golf Club
and KLCC, in addition to receiving the same
Kempinski service.
Why choose Kempinski?
8 Conlay was created with the idea of providing
service excellence in liveable, design-led
architecture. We wanted people to know that
living at 8 Conlay is more than having a shelter
over their heads. It is an experience which
allows each resident to create their own story.
For this, 8 Conlay needed a brand partner who
could provide the top-notch services that would
reflect hospitality at its best and simultaneously
allow residents to form incredible memories.
We know Kempinski Hotels will be able to
meet our guests’ and residents’ expectations as
every aspect of Kempinski’s 121 years of luxury
bespoke services is geared towards serving guests
who expect excellence and value individuality.
Each Kempinski hotel is unique
to its location and local cultures;
providing a sense of place but
maintaining the same consistent
bespoke service standard
throughout its hotels.
Dining room - Type E layout, Tower A by Steve Leung & Yoo

May - June 2018
19
8
9
Kempinski does not adopt a one-size-fitsall
approach. They try to incorporate what is
distinct about the location where the hotel
will be built. That’s why each Kempinski hotel
is unique to its location and local cultures;
providing a sense of place but maintaining
the same consistent bespoke service standard
throughout its hotels. This uniqueness sets
Kempinski apart from other luxury hoteliers.
We hope that more Malaysians will find
meaning in luxury living as a reflection of their
passion to achieve excellence.
What is your view on the competition from
other branded residences in KL?
The supply of branded residences is limited
around the world. People who buy them don’t
generally want to sell them because these are
limited and priceless possessions they are proud
to own. We believe 8 Conlay offers buyers
and investors a good investment opportunity
as it will command better capital yield for the
longer term. Besides, prices of luxury properties
in Malaysia are considered among the cheapest
in Asia. We are also the only branded residence
in Kuala Lumpur to bring a luxury five-star
hotel brand and a world class branded designer,
Steve Leung & YOO into the mix, rather than
just a hotel brand.
What is the market outlook for such branded
residences in Malaysia, particularly in KL?
Despite soft market sentiments and the
oversupply issues facing the Malaysian
property market, we remain upbeat about
the long-term prospect of the Kuala Lumpur
property market. Furthermore, there is
not much land left in the KLCC area and
therefore supply is finite and limited.
Firstly, Kuala Lumpur is still a key investment
destination for businesses and investors.
Secondly, the property market will enjoy the
spillover effects of major mega infrastructure
projects such as the High Speed Rail and
MRT project, because once these projects are
completed, they will change the city, just like any
other major city in the world. By then, Kuala
10
8 Conlay was launched at
RM2,700 psf in 2016 and reached
RM3,200 psf in 2017.
Lumpur will transform into a more vibrant and
liveable city, and property prices are set to rise.
So, the immediate need is to rebuild buyers’
confidence. We cannot overlook the fact
that today’s discerning buyers have high
expectations and are very selective. In addition
to pricing, their buying decisions are affected
by factors like services, quality, location and
capital appreciation.
Buyers will continue to invest if they see the
right property – developments offering the
right concept, location (within the Kuala
Lumpur city centre) and long-term rental yield
potential. For example, they prefer branded
residences due to its characteristics of better
capital yield, quality hotel servicing and
consistent maintenance of the property.
As Kuala Lumpur transforms into a worldclass
city, there is definitely greater demand
for branded residences. Every city needs a
gem development that will put the city on the
world’s map, and branded residences have the
capability to give Kuala Lumpur a different
character that will put it on par with other top
cities in the world.
What other projects are in the pipeline in
Malaysia for KSK Land?
For the rest of 2018, we will remain
focused on developing 8 Conlay, nurturing it
to completion.
11
Any plans to expand overseas?
If opportunity presents itself, KSK Land is
open. However, for now, we see opportunities in
prime locations in Malaysia.

20 ASIAN PROPERTY REVIEW COVER STORY
BRANDED
RESIDENCES
THE INSIDER’S VIEW
Asian Property Review talks to Chris Graham (Founder and MD of
Graham Associates), who is regarded as one of the world’s foremost
specialists on branded residences.
1
2
Does the shift of consumer preference for
more independence through branded serviced
apartment spell the beginning of the demise
for the pure stand-alone hotel set-up?
There will always be strong demand for
stand-alone hotels. Whilst branded residences
and serviced apartments certainly add to the
range of accommodation choices available
to travellers, in reality these still represent a
relatively small percentage of the market. In
many cases – notably prime urban locations –
the lack of availability and the high cost of land
are key factors that can inhibit the opportunities
to include a branded residential component
alongside a hotel. Many travellers seeking
greater independence are of course turning to
AirBnB – although currently most branded
operators do not permit their homeowners to
use this platform to rent out their residences,
which must instead be put into the operator’s
managed rental programme.
Apart from concierge and butler services,
celebrity or Michelin chef restaurants, inhouse
cinemas, branded spas, golf simulator,
wine storage, award-winning designers and
even starchitects, what other distinctive
services or characteristics mark the branded
service residence?
100 Las Olas
There is a long list of facilities and services that
developers are incorporating in their branded
residences (including those listed above). In
addition, there is the convenience of owning a

May - June 2018
21
Photography by Jan Yong
I have seen cases where
high-end developments use
celebrities such as footballers
to promote ‘the exclusiveness’
of their offer, yet in reality
many HNWIs do not wish
to have these types of high
profile individuals as their
neighbours, so this can in fact
sometimes have a negative
impact.
3
“lock up and go” home, that will be kept secure
and professionally maintained – and possibly
earn valuable income - when the owner is not
in residence.
Above all, rather than simply providing more
5*+ facilities, the focus is more about creating
a personal and emotional engagement with
customers. Some leading branded residences
designers such as Luciano Mazza at HKS and
John Hitchcox at YOO talk about creating
“modern day communities” of like-minded
people – a sort of exclusive residents club.
Whilst buyers’ priorities remain consistent in
terms of location, design and access to worldclass
amenities, very much in line with trends
in the hospitality sector, it is increasingly more
about the intangible ‘added value’ lifestyle
benefits associated with a brand. Increasingly,
the shift is towards creating an emotional
connection with residents through experiences.
What are the most common challenges
faced by developers when building a branded
residence?
There are innumerable challenges that a
developer faces and every project brings its
own unique set. I would say generally that
securing the best locations and ensuring
that branded residences are designed for the
local marketplace rank quite high. On this
second point, most branded operators have
rigid guidelines about FF&E, room sizes
and facilities so in some cases these may, for
Chris Graham
example, require that units will be too large –
and therefore expensive - for the local market,
when priced on a per sq m basis. Many
developers today will appoint an operator once
the design concept for the residences is already
well developed, so marrying up the design to
the brand guidelines in such circumstances can
be an issue. Another challenge is financial –
notably achieving sufficient off-plan pre-sales,
since construction is often only triggered once a
specified number of units has been sold.

22 ASIAN PROPERTY REVIEW COVER STORY
Increasingly, the shift is towards
creating an emotional connection
with residents through experiences.
4
5
In terms of the buyers, are they filtered to
create an exclusive community of persons
of a certain standing, yet free of scandals or
drama – for some developments that you are
aware of?
When there is a committed buyer with
money on the table sitting in front of a sales
negotiator, it is very difficult for him or her to
find reasons not to make a deal! However, I
certainly know of situations where potential
buyers have been politely turned away. In
upper-upscale developments especially, most
developers and their sales teams recognise
the importance of maintaining an exclusive
residential community and are well aware of
the negative sentiment that one ‘less-thandesirable’
resident can attract.
Similarly, I have seen cases where high-end
developments use celebrities such as footballers
to promote ‘the exclusiveness’ of their offer, yet
in reality many HNWIs do not wish to have
these types of high profile individuals as their
neighbours, so this can in fact sometimes have a
negative impact.
How much higher can we raise the bar for
luxury or is it a meaningless word now, being
overused and made up of standard offerings?
Interbrand’s Rebecca Robins was spot on
when she observed that the definition of
luxury has become so diluted that it is
becoming meaningless. This is particularly
true in real estate, as almost every residential
development that launches is promoted as
“luxury”. Design, technology and innovation
all continue to expand the boundaries and
6
7
opportunities for developers, notably around
sustainability and Smart Homes, which are
fast becoming standard.
Should branded residences adapt to
their local environment by incorporating
local elements such as local design and
architecture, and materials - without diluting
the world class standard of the branded hotel
operator?
There is no right or wrong way, as every
situation is different. It depends on several
things, for example the location, the intended
target audience, and the brand. Some brands
such as W have a very distinctive design
style, which is either suited to a particular
location and lifestyle or it isn’t. Generally,
architects are pretty sympathetic to the local
environment and prefer to use locally-sourced
materials. I recently heard about an extreme
example in which a developer moved an
entire village across to his new resort site for
total authenticity.
What are the common challenges faced by
luxury hotel brands when dealing with local
developers as their partners?
Ensuring that the developer designs and builds
the property to satisfy its brand standards, and
then subsequently maintaining the property
to the highest standards. It is important
to remember that a local developer may be
seeking an earlier exit from the project than
the international brand operator, so the
operator needs to ensure that its interests
– and those of the residence owners – are
adequately protected over the longer term.

May - June 2018
23
8
Upper Deck Sala View, Anantara Phuket Layan
“80% of CEOs believe their brand differs from
the competition, but only 20% of customers
agree with that.” - Ricco de Blank, CEO of
SHKP Hotels (owns two Ritz-Carltons, a St.
Regis and a W Hotel)
The above seems like a big disconnect in
perception. How should the hotel CEOs
rethink their brand differentiation?
Yes, this quote neatly emphasises a key point
I highlighted in my report. There is such a
proliferation of brands competing at various
levels of the market and to different audience
segments, all trying to differentiate themselves
by carving out a unique identity and positioning
in the marketplace. Yet reading through
many brand positioning statements is pretty
confusing, even to industry professionals - and
if we cannot understand what a particular hotel
8
Anantara Phuket Layan

24 ASIAN PROPERTY REVIEW COVER STORY
Ocean Drive Residences
I recently heard about an extreme
example in which a developer moved
an entire village across to his new resort
site for total authenticity.
brand represents, then how can consumers
and potential purchasers be expected to
do so? Piers Schmidt at Luxury Branding
Consultancy undertook a study on this last
year in which he found that a significant
proportion of hotel brand slogans actually
employ very similar sound bites, which he
describes as “buzzword bingo at its best!”
Branded residences that present a clearly
defined and offer an attractive lifestyle which
genuinely resonate with buying audiences, will
succeed to a much greater degree than those
that do not stand out for anything distinctive.
9
This is where good marketing can really make a
difference, by effectively packaging, presenting
and communicating the offer to differentiate
the development, so that it truly stands out
from its competitors.
With so many branded residences in the
market, do you think it will reach a saturation
point where the customer can no longer see
the differentiation?
In the Southeast Asian market, notably
Thailand and Vietnam, branded residences are
now becoming so engrained and prolific in the
market that they risk being the norm rather
than the exception. Branded residences achieve
a generous price premium over comparable
non-branded homes because of the exclusivity
and kudos that the association with the brand
offers to owners; as such, in a market that is
becoming ‘saturated’ with high-end branded
residences, exclusivity can really only be defined
by the desirability of the location and the
perceived status of the brand itself.

May - June 2018
25
10
11
Any examples where the arrangement between
the owner/developer and the brand operator is
terminated. Usually, what are the reasons for
the termination?
Normally this is caused by a failure by the
developer or operator to perform its obligations,
a breach of contract, or any risk of causing
damage to the brand. For example, if the
common areas of the branded residences are not
maintained to the required standards, e.g. due to
insufficient funding, this usually gives the brand
operator the right to terminate the association.
Of course, this has significant repercussions for
the residents and the value of their properties.
Why is there a worldwide shift from branded
resort residences towards branded urban
mixed-use developments?
Branded residences had been established in
North America for many years before the
global industry woke up to the benefits that
they offer – not least as developers realised
that they could benefit from a substantial price
premium and (generally) faster sales absorption
rate by partnering with a respected brand. This
has been driven largely by increasing demand
among HNWI consumers seeking high-end
residences with the convenience of hotel
services in their own homes, together with
the confidence that the association with an
established luxury brand delivers. Previously,
with the high cost of purchasing prime central
urban land combined with strong demand
for luxury homes sustaining prices, urban
developers did not see the need (along with the
added costs) to bring on a brand; however, as
markets soften, competition increases and the
bar is raised, the branded option presents a very
compelling route for more quickly achieving
differentiation, status and sales.
GRAHAM:
TRENDS IN THE NEXT
10 YEARS
From my research and discussions with eminent
market professionals around the globe, I predict
the following trends during the next decade:
t
t
t
t
t
t
t
t
t
Continuing expansion in the sector in terms
of the number and range (i.e. sectors) of
market participants.
Broader quality of branded units for sale (i.e.
lower star rated hotel operators).
Less focus on ‘tangible’ elements, more on
emotional connections.
Wellbeing and positive ‘healing’
environments will become mainstream.
The emergence of residential lifestyle brands
for specific demographic segments (e.g.
retirement).
The expansion of branded residences into
exciting new destinations across the globe,
including South America and Africa.
More branded residences across Europe,
both urban and resort.
Premiums being squeezed in developed
markets with more competition.
More standalone branded residences, mostly
in an urban environment.
Editor’s Note: A free copy of the second edition of Chris
Graham’s report “Branded Residences: An Overview”
can be downloaded at www.gagms.com

26 ASIAN PROPERTY REVIEW COVER STORY
RISING NUMBER
AND DIVERSITY OF
BRANDED
RESIDENCES
IN ASIA
Even budget chain YOTEL is
talking branded residences.
Anantara Phuket Layan

May - June 2018
27
Asian Property Review talks to leading Asian hotel expert, Bill Barnett,
Managing Director at C9 Hotelworks on the branded residences
scenario in Asia.
Which emerging Asian countries/cities/areas are
sought after by developers of branded residences
and the brands themselves?
Large luxury hotel brands like Ritz-Carlton and Four
Seasons are seeing a high proportion of their hotel
pipeline being generated in mixed use or project with
branded residences; they tend to favour gateway cities
and key well-known leisure destinations with strong
airlift. Japan has been active in top end projects like
the Four Seasons Kyoto or Park Hyatt Hanazono
near Niseko. Overall, the urban push is strongly,
interestingly two key Asian resort brands, Aman and
Six Senses, both have city branded residences coming
up in New York City.
Supply and demand track the
overall real estate market and there
remains strong sustained growth
in the region, with the notable
exception of Vietnam which may
see an oversupply.
How important is the investment angle to the Asian
HNWI buyers of branded residences? What is the
typical target rental return and capital appreciation?
It all depends, it’s entirely a different universe
for HNWI buyers. HNWIs often view trophy
assets defined by location, brand and quality of
development. It may be a second home or investment
versus traditional yield-focused buyers.
“Currently across
Southeast Asia, there
is an estimated 94
mainstream hotel
residence projects
with more than 21,000
units on line, with 78
properties expected to
complete between 2018
and 2020, representing
an 83% increase over
current inventory.”
It seems like SEA is Bill Barnett
experiencing a boom.
Do you think there will be an oversupply in the
coming years given this exponential growth?
Supply and demand track the overall real estate
market and there remains strong sustained growth
in the region, but there are some exceptions.
Vietnam with between 20,000 to 30,000 condo
projects comes to mind as potentially being
oversupplied.
What is the outlook for branded residences in Asia
in the next 3 years?
More and greater diversity in real estate grade from
luxury to entry level. Even budget chain YOTEL is
talking branded residences.
How is the situation in China given the increasing
number of HNWIs there and their propensity to
buy branded goods including residences?
China is likely to still experience growth given the
government restriction on exporting capital; domestic
investment into property is likely to remain active.

28 ASIAN PROPERTY REVIEW COVER STORY
DESIGNING
A BRANDED
RESIDENCE
Asian Property Review talks to Arianna Leopard
(Director) and Bruce Wright (Senior Vice President
and Principal) from SB Architects on what it entails to
design branded residences.
Ocean Drive Residences
1. How important is design for branded
residences? How different would you
approach a branded residence compared
with say, a typical serviced apartment
or condominium?
All brand owners set guidelines
and design specification to
architects and developers so that
they accurately reflect the brands
down to the smallest details.
We approach the design of
branded residential differently
than traditional serviced
apartment. The unit sizes are
generally larger than nonbranded
equivalents,
reflecting the trophy
positioning.
Branded
residential
needs to have a
high-degree of
personalization
and the accent
is on interiors
that tag the
buyer’s lifestyle and wrap around emotion and
feelings. We seamlessly merge architecture,
interior design, and lifestyle in a way that
speaks to the aspirations of the buyer. Branded
Residential uniquely differs from unbranded
real estate in that the buyer of a branded
property becomes a stakeholder in the brand.
Usually the access to ownership comes at a
higher cost, but the return is a deep emotional
connection to the brand philosophy, culture
and often the related hotel amenities.
2. What are examples of the branded residences
that you have designed? What are each of
their unique characteristics?
We have worked on several Ritz-Carlton
properties over the years including Dorado
Beach, A Ritz-Carlton Reserve, Ritz-
Carlton, Rancho Mirage and The Cove, Ritz-
Carlton Reserve Residences. We are working
on two St. Regis properties, which will both
include a residential component. For St.
Regis Bahia Beach, we designed the Ocean
Drive Residences and a series of custom
estate homes.
Arianna Leopard

May - June 2018
29
b
DORADO BEACH, A RITZ-
CARLTON RESERVE RESIDENCES,
PUERTO RICO
b
These luxurious waterfront residences follow
the contours of the beach to provide the most
complete and private beachfront experience
imaginable. The three and four-story
structures feature two and three-bedroom
units with a rooftop pool and covered living
space. Some buildings include a fourthlevel
penthouse with terraces on three
sides to provide outdoor living space to all
three bedroom suites. Expansive terraces or
balconies for each unit connect to the indoor
living spaces with retractable doors.
OCEAN DRIVE RESIDENCES AT
BAHIA BEACH
Bahia Beach offers the tranquility and purity
of a private island amid an unspoiled, lush
tropical haven with spectacular beachfront
views. These three- and four-bedroom
residences are serviced by The St Regis and
feature spacious interiors, ample terraces, etc.
b
Ocean Drive Residences
LIHU COLD SPRINGS GOLF
ESTATES, HAINAN ISLAND, CHINA
This expansive resort development is sited
along the shores of NanLiHu Lake, a
stunning jewel on Hainan Island near the
city of Haikou. Encompassing 122 ha, the
master plan utilizes the site’s hilly topography
to weave the golf fairways through existing
valleys. Residences, lodging and public
spaces are sited to capitalize on views of
the golf course and lake. Residences range
from single-family villas, to townhomes, to
apartments in five and six-storey buildings.

The Lodges at Calistoga Ranch
were formed around the trees,
with many lodge terraces built
with ancient trees growing up
through the terraces.
construction methods, which generally also
makes financial sense. Combining destination
specific material choices, and working so
closely with these branded design details we
can create properties that both embrace local
qualities and exemplify the aesthetics of the
brand owners.
ONE St Petersburg
3. How much of the local materials or culture
do you appropriate for the design despite the
typical standardization of such designs? Do
the design owners e.g. hotel or luxury brands
allow any deviation from their standard
cookie cutter design?
Our process begins with a deep respect
for the site, the history of the land and the
culture of its people. We are fully aware that
to create authentic destinations, we must
preserve the elements that have drawn us
there in the first place.
We always like to work with topography
and use materials indigenous to the location.
Developers in Asia can be somewhat
pragmatic about introducing new materials,
but we try to tie the design back to the history
of the site, utilizing sustainable design and
4. What sustainable features or construction
methods/materials do you employ in your
designs?
We partner with a broad spectrum of
consultants and certifying organizations to
ensure that we deliver projects that are both
ecologically and socially sustainable. Our
experience working with organizations such
as the USGBC and Audubon International
give us the tools to create unique projects that
live in harmony with their surroundings.
In the initial design phase, we think about
a myriad of elements that will inform our
approach that includes everything from
sunlight aspect placement that allows for
maximum solar orientation for photovoltaic
panels, to passive heating, and cooling
systems. Local availability, recycled content,
and sustainable production drive the selection
of each material, appliance, and detail.

May - June 2018
31
GLOBAL FOOTPRINT
Based in San Francisco, Miami and Shenzhen,
China, SB architects has a global footprint with
projects in China, North America, Lebanon,
Montenegro, Egypt, Puerto Rico and Mexico to
name a few. A recent project that the firm is proud of
is the Miami Design District, which transformed the
once gritty Miami neighbourhood into a glamorous
international luxury shopping destination with two
department stores, rooftop gardens, a boutique hotel
and luxury condominiums. In China, they have just
completed the design work for Luneng Wen’an
winery and resort.
Bruce Wright
For example the Calistoga Ranch in Sonoma,
the site was on a 52-acre California live oak
parcel, and the resort had to be designed
to not despoil or do damage to the ancient
trees present on the site. So, the Lodges at
Calistoga Ranch were formed around the
trees, with many lodge terraces built with
ancient trees growing up through the terraces.
5. What are the branded residences in the
pipeline that you are working on?
100 Las Olas
Most of our resort projects included branded
residential into the program such as St.
Regis Los Cabos at Quivira in Mexico and
Mandarin Oriental in Boca Raton.

32 ASIAN PROPERTY REVIEW INVESTMENT
SHOPHOUSES
IN A CLASS OF ITS OWN

May - June 2018
33

34 ASIAN PROPERTY REVIEW INVESTMENT
SINGAPORE
SHOPHOUSES
SOUGHT-AFTER TROPHY ASSETS
The allure of the Singapore shophouse goes beyond its architectural
history and aesthetics or even its limited supply; ultimately,
it’s about owning a part of Singapore’s history.
Text & Photography by Jan Yong
A
treasure trove of historical assets are
changing hands at record prices in
Singapore. On 31st March 2018, the
headline in Singapore’s Straits Times
read: “8M buys shophouses, building for $82.5m.”
That averages about SGD10 mil for each shophouse.
In land-scarce Singapore, landed properties are
priced at a massive premium and this naturally
applies to all shophouses particularly conservation or
heritage shophouses.
Conservation shophouses are heritage buildings
that were given conservation status by the Urban
Redevelopment Authority of Singapore (URA),
says Simon Monteiro, Associate Director at Savills
Singapore specialising in heritage buildings. “There
are about 8,900 estimated buildings in primary and
secondary areas that are gazetted. This means their
façade needs to be maintained. For those located
in the primary core areas such as Boat Quay, Amoy
Street, Telok Ayer Street and Boon Tat Street,
you can’t do much to them whereas you could still
increase a few levels to 4-5 storeys for those in the
secondary areas.”
Due to their very limited number, the heritage
shophouses command an even bigger premium and
are sought after by real estate funds, family offices,
foreign companies specialising in design, finance,
investment and business consultancy as well as Ultra
High Net Worth Individuals (UHNWIs) – from
Singapore and abroad.
Simon Monteiro
Examples of funds include 8M Real Estate, Silk
Road Partners, Clifton Real Estate & Arc Assets.
Heritage shophouses in Singapore are equivalent
to rare vintage collectibles – they are collected due
to their intrinsic historical and cultural as well
as artistic value. There is also the advantage of
staggering capital appreciation due to their limited
quantity. “The high net worth buyers don’t buy them
for rental returns because the return is dismal, falling
from 7 – 8% back in the 1980s to about 2 -3 % these
days,” Monteiro reveals.
The inverse relationship of skyrocketing capital
appreciation to falling rental yield can be explained
by the fact that there are comparatively many more

A number of heritage shophouses have been
converted into boutique hotels. This one in
Kampong Glam sports a very captivating facade.
buyers than tenants for these heritage shophouses.
The high net worth buyers have the holding power
and can keep the shophouses without even renting
them out. Meanwhile, tenants are not as many due
to the high rentals commanded by these soughtafter
units. It takes a very profitable business to
survive these rents.
During a survey in the tourist areas of Kampong
Glam, Haji Lane and Arab Street where there is a
proliferation of these heritage shophouses, Asian
Property Review saw a handful of upper floor units
being advertised for rental while there were none
observed for sale.
Prices have been rising steadily in the last 10 to 15
years. In 2005, a 99-year leasehold in Duxton Hill
area will cost about $380 psf. “Today, these streets
are sought after and command prices above $2,000
psf based on the estimated built-up area of 3,500 sq
ft to 5,000 sq ft,” says Monteiro.
“I remember selling 3 assets in Duxton Hill in 2005
- 28 Duxton Hill and 20/21 Duxton Hill - for $6.1
mil for all 3; today you have to pay about 7 to 8
times as much,” Monteiro continues.
“Prices of freehold units are even higher, going from
$600 psf in 2005 to an estimated $3,500 psf in
today’s market.”
Due to their very limited number, the
heritage shophouses command an even
bigger premium and are sought after by
real estate funds, family offices, foreign
companies specialising in design,
finance, investment and business
consultancy as well as Ultra High Net
Worth Individuals (UHNWIs) – from
Singapore and abroad.
- Monteiro
FOREIGN FACTOR
Despite the sky high prices, buyers are literally lining
up to buy them. Among them are foreigners.
“In general, the price increase over the last 20 years
was due to the economy, scarcity, heritage, the unique
Singapore theme and an increasingly affluent society.
A notable factor is also the influx of UHNWIs from
abroad looking at shophouses as a unique alternative
asset to condominiums and common office spaces in
normal office buildings,” Monteiro notes.
The fact that the government promotes locations
such as Chinatown, Little India and Kampong Glam
also helps to bring in the crowds which increases the
value of the shophouses there.

36 ASIAN PROPERTY REVIEW INVESTMENT
Most owners don’t want to sell
even if a very attractive offer comes
along. This is because they want to
keep the shophouses as an asset for
future generations.
– Han
Vanz Han Liang Siew
Richard Tan Kah Peng
The only restriction for foreigners is that the
shophouses must be designated commercial
properties located in fully commercial zones.
Foreigners can have 100% ownership and the tenure
can be freehold or leasehold of variable years. The
most popular tenure especially among Indonesians
and Malaysians is for the 999-year lease which is
effectively a freehold title.
“In my opinion, we have about 3,000 to 3,500 units
that a foreigner can safely buy without the need for
paying Additional Buyer Stamp Duty (ABSD) or
the need to get approval from the Land Dealings
Unit, a department that controls land ownership on
land which is zoned landed residential,” the heritage
assets specialist continues.
“The rest are either fully residential or mix
residential /commercial, the sale of which are
restricted to Singaporeans and companies with
Singaporean directors only.”
“As with antiques, beauty and passion lie in the eyes
of the beholder. There is no right time to buy as
it’s more of an emotional buy; the buyer values the
architectural history and aesthetics and wants to own
a piece of Singapore history and maybe be part of our
diverse culture,” Monteiro adds.
DEMAND OUTSTRIPS SUPPLY
For shophouses that have not been gazetted as
conservation or heritage, demand similarly outstrips
supply but in this case, the rental yield is an
important consideration, says Richard Tan Kah Peng
from PropNex (Richard Tan & Associates). “Most
buyers are looking at good yield. Their greatest fear is
that they can’t rent out.”
“To determine yield, it’s crucial to look at the lease
tenure – the balance remaining on the lease if it’s
not 999 years or freehold. For example, even if the
yield is high but if the balance lease is only 20 years,
then it’s not worth buying because you will have to
renew the lease at the expiry and this is subject to the
government or private owner’s approval,” Tan explains.
On the other hand, even if the yield is a low 2%, it
is almost certain that after 50 years, the yield will
rise. In other words, if the tenure is longer, you will
definitely break even eventually, he concludes.
In terms of yield, the rate differs on every floor. A
popular location is Lorong Haji which can fetch
SGD8-10 psf for the ground floor and less for the
upper floor.
Chinese-style shophouses at Short Street.
A savvy investor will also look at the tenant profile.
If it’s a new tenant, they might not survive the rental

May - June 2018
37
Around Haji Lane and Arab Street, a lot of the corner shophouses showcase
murals on their exterior walls.Tourists love taking their photos there.
while a famous or popular tenant will command a
better rental rate.
Without a doubt, the most popular and expensive
shophouses are those located in the CBD area in
Districts 1 and 2, as well as Districts 9 and 10. The
latter comprises a lot of mixed developments, prime
shopping areas like Orchard and River Valley road,
Holland Road where a lot of middle to upper class
residents and expatriates are staying.
“Tourist areas such as District 7 comprising
Kampung Glam, Arab Street, Little India and
Chinatown are also popular as the footfall is high,”
says Vanz Han Liang Siew of Propnex (Vanz Han
& Associates).
“Transaction volume has fallen but the price has
gone up. This is because there is more demand than
supply. Transactions peaked in 2012 – 2013 with
about 200 – 300 transactions a year but since the
last 2 years, it has hovered around 200 transactions
In recent years, buyers from China,
Indonesia, Hong Kong, Malaysia
and Europe, and even a handful from
Vietnam, Thailand and Mynamar have
snapped them up – some even buying a
few in a row.
– Tan
per year. Most owners don’t want to sell even if a
very attractive offer comes along. This is because they
want to keep the shophouses as an asset for future
generations,” Han observes.
“Between 2014 – 2016, the transaction volume fell
to about 100 transactions a year but in 2017, there
were 148 transactions with visibly more Malaysian
participation. In the first quarter of 2018, the
increased volume continues and we foresee the total
number of transactions for the whole of 2018 might
surpass that of 2017,” predicts Tan.

38 ASIAN PROPERTY REVIEW INVESTMENT
… even if the yield is high but if
the balance lease is only 20 years,
then it’s not worth buying because
you will have to renew the lease
at the expiry and this is subject to
the government or private owner’s
approval.
– Tan
higher while for 2 or 3-storey, the lower per sq foot
price of the upper floors will reduce the overall price
of the entire shophouse,” adds Han.
In some cases however, the ground floor and the
upper floor units might have separate titles and
owners, hence the buyer might only be able to buy
one floor – obviously the ground floor is more in
demand and can command a higher price due to its
higher footfall.
There are also shophouses where the ground floor
is designated commercial but the upper floor is
designated residential. If the entire shophouse is held
under one title deed, then foreigners aren’t allowed to
buy these at all.
The 5-foot walkway along Kandahar Street, Kampung Glam
Also, the Singapore economy is picking up so a lot
of sellers are holding up for a higher price. At the
same time, there are a lot of en bloc sales going on
with new launches expected to scale higher prices.
“We expect to see new launches hitting new levels
of high,” Han anticipates.
There is no doubt shophouses are facing boom time
prices – for example, a 999-year old ground floor
unit in Bugis Cube is selling for SGD10,000 psf
while in Alexandria, a ground floor unit was sold
at SGD9,000 psf even though it is only a 99-year
leasehold of a new development.
“For Kampong Glam (conservation shophouses),
you have to see whether it is a one-storey, double
or 3-storey shophouse. If purely only one storey
ground floor, the per square foot price will be
BUYING BINGE
In recent years, buyers from China, Indonesia, Hong
Kong, Malaysia and Europe, and even a handful
from Vietnam, Thailand and Myanmar have snapped
them up – with some even buying a few in a row.
Asians far outnumber the Europeans, especially
those from China and Indonesia although last year
saw quite a number of UHNWIs from Malaysia on
a buying spree, Tan reveals.
For foreigners with that kind of deep pockets, it’s
the most natural alternative asset after residential
properties. Singapore is considered a safe haven by
HNWIs and these shophouses have great potential
for long-term capital appreciation which fit their
strategy of wealth building and leaving a legacy for
their next generation. There is also the advantage of
political stability and a strong currency.
Another plus point is the flexibility of usage as
compared to the pure office space or retail space

May - June 2018
39
TIPS FOR FOREIGN
BUYERS
Tan and Han from PropNex recommend the following:
Dr Julian Davison
in office buildings or mall respectively. If the
shophouse has 3 or 4 storeys, you can have a
gym or consultancies on the upper floors while
the lower floor can be used for spas or F & B
businesses such as restaurants, bakeries or bars.
F&b businesses are the most sought after tenants
due to their perceived viability and the fact that
F&B is one business that still requires a physical
presence while retail is gradually moving to the
online space through e-commerce.
On top of that, most of the conservation shophouses
are located in prime city centre areas such as
Chinatown, Little India, etc. The capital appreciation
that can be expected is staggering. How high it can
go is anybody’s guess – as long as the government
does not restrict sales to foreigners and as long
as no further shophouses are given conservation
status, the 8,900 shophouses will continue to rise
in value notwithstanding the ups and downs of the
Singaporean property market.
Clearly, the market gyrations have little effect on
the conservation shophouse value due to its limited
number and historical value – every shophouse has
a different history and that adds further value to
the individual shophouse. This can be attested by
Dr Julian Davison who has studied shophouses in
Singapore and has written a book about it called
simply ‘Singapore Shophouse’. It’s a compelling read
particularly for those thinking about investing in one.
1. Some shophouses have commercial title for the
ground floor while the upper floors have residential
strata titles. In such cases, the foreigner can only
buy the ground floor. If however, the entire unit is
held under one title including the residential upper
floor, then the foreigner can’t buy any portion of the
unit at all.
2. It’s better to use a company to buy and to register
the company as a GST-registered company to
purchase those units with GST. They can then claim
back the 7% GST if their company is GST-registered.
3. Use an investment holding company to buy 100% of
the shares of the company owning the commercial
properties e.g. shophouse. This will save you the
3% stamp duty for purchase of the shophouse.
Instead, you pay only 0.2% of the transfer tax. Your
company is also exempted from the 15% additional
buyers’ tax. Foreigners can own 100% shares of a
Singapore-incorporated company. The corporate
tax is 17% maximum while for individuals, it can be
over 20%. Note: this is only applicable to purchasing
commercial properties under company name.
4. Property tax for commercial property is subject to a
ceiling of 10% unlike residential which can go up to
16% for both individuals and companies.
5. Tenure – sometimes it’s better to buy a leasehold in
a high traffic area despite a relatively short balance
on the lease rather than a freehold in a quiet area.
This is because commercial property is all about
location and rental. The leasehold may command
higher rentals than the freehold due to its prime
location. If the rental is higher, then the capital
value will also go up.
6. Proximity to the MRT station helps; it is a bonus
point when buying property.

40 ASIAN PROPERTY REVIEW INVESTMENT
THE SINGAPORE SHOPHOUSE
WINDOW TO THE
PAST & FUTURE
Simon Monteiro, Associate Director at Savills Singapore specialises in
heritage buildings especially shophouses and boutique hotels. He was a witness
to the great Singapore Shophouse Investing phenomenon from the
beginning and hopes to be part of its future as well. Here, he narrates his
experience as a witness as well as a participant of the ongoing story.
Photography by Jan Yong
“When I was 12 years old, I used to follow
my grandmother to work. She worked at The
Mission to Seamen which was housed in a
shophouse at 219 River Valley Road which also
contains a small chapel. Shophouses have intrigued
me since then. (In 2001, a week after the 911 attack
on the World Trade Centre, they decided to sell the
shophouse which has a total area of 4,500 sq ft for
SGD950K to a couple.)
When I started my career back in 1994, my first sale
was a beautiful 5,500-sq-ft residential shophouse
at 55 Spottisowoode Park Road, which I sold for
SGD1.6 mil to a doctor.
Between 1997- 2001, I was attached with Goldhill
Group of Companies. It was a lucky break. They
were the pioneers in Conservation Shophouses.
The late Mr William Goei, whom I worked for,
is the ‘Father of Investing in Shophouses’, in my
opinion. Between 1988 and 2007, he purchased,
restored and refurbished many shophouses in the
Duxton and Tanjong Pagar area. He later sold
them for a profit.
ORIGIN OF THE SINGAPORE
SHOPHOUSE
In 1819 with the founding of Singapore by Sir
Stamford Raffles, what was once a small fishing
village, grew to become an entreport. Various culture
and ethnic groups came and this brought about a
mix of different people working to create Singapore
into a trading hub.
Raffles saw the need to segregate the various ethnic
groups into separate areas. So today thanks to
him, we have Little India, Chinatown, Kampong
Glam, and Arab Street. People from parts of China,
the Middle East, Java, and India started arriving
and brought with them the different styles of
architecture that would later be infused into today’s
Singapore shophouses.
The government started looking into conservation
in the 1970s but it was not until the late 1980s that
they decided to take action to create a conservation
plan for Singapore. The first Sale of Site by the
government was in Duxton, Duxton Hill, Tanjong
Pagar and Neil Road area.

May - June 2018
41
Simon
Monteiro
This was in 1988 and it started the movement of
the Singapore Shophouse. These shophouses were
later refurbished. They were cheap, maybe $200psf
and were later sold at $400psf in 2005 and now it’s
$2,200psf on average for a 99-yr Leasehold.
The floor plate is typically 2/3/4-storey with a land
size of 1,000 sq ft to 1,500 sq ft. So the built-up of a
typical 2-storey shophouse is 2,000 sq ft to 3,000sqft
which may come with an additional attic which is
anywhere from 200 sq ft to 500 sq ft depending on
the configuration.
So a 2 1/5 Storey will command in today’s market
the price of $7m to $8m for a 99-year leasehold
These 8,900 shophouses are
a window to our past and
they can be used to tell the
Singapore story.
to about between
$9.5m and $11m for
a Freehold/999-Yr
shophouse.
A 3-storey shophouse
with attic would easily go for
$14m - $15m and for a 999-
year freehold unit around $17.5m to
$19m with corner unit having a premium because
it brings better natural lighting and better frontage
for visual advantage.
There is also the 4-storey shophouse with prices
ranging from $17m-$18m for a 99-year leasehold
and more than $20m for a 999-year freehold.
URA has gazetted about 8,900 units with
Conservation status, located within a mix of Primary
Areas and Secondary Areas. Primary areas comprise
mainly the core CBD areas like Amoy Street, Telok
Ayer Street and Boon Tat Street.

42 ASIAN PROPERTY REVIEW INVESTMENT
coffeeshop style of operations in Tanjong Pagar,
Duxton and Tras Street.
The URA then started regulating pub licenses and
outlawed massage parlours in this area. This created
a better tenant mix of upmarket businesses such as
consultancies, hedge funds, family offices and fund
investment houses which started coming in from
2010. Today, in addition to those, you have a great
mix of entertainment outlets and co-working spaces.
The F & B units that were on the ground floor were
also paying better rentals and this gave investors
the motivation to spend on the refurbishments.
One of my clients who is a Hong Kong permanent
resident, started buying up some shoplots there and
refurbishing them with million-dollar uplifts to
the interiors, and the layout. These units became so
pleasing that they attracted better quality tenants
like upmarket restaurants and boutique firms. This
brought in a more affluent crowd.
GENTRIFICATION AND RENTALS
The rental returns are now very low - below 3%
rental to cost of acquisition compared to the 6% to
7% rental yield in 2005. The rental have not gone up
as much as the capital appreciation.
HOSPITALITY-INCLINED
I also sold The Duxton Hotel to a client who
refurbished it into a boutique hotel taking the asset
to the next level of Ultra High Net Places (UHNP),
a word which I coined for heritage assets that have
been refurbished to such an extent that they attract
the most affluent people in our society.
This is due to the high demand for shophouses and
also gentrification. The URA was also looking at
regulating the use of these conservation shophouses.
I believe the start of real gentrification was at the
Duxton / Duxton Hill area which is home to a
beautiful part of Tanjong Pagar where you can view
some very nice architecture of the past. The cobbled
stone walkway up Duxton Hill gives you a sense of
walking on sacred ground. In the 1890s, the street
on Duxton Hill was the Millionaires Row where the
rich peranakans used to live.
Compare this to 2005 when I used to lease
shophouses to many pubs, massage parlours and

May - June 2018
43
The F & B units that were on the
ground floor were also paying better
rentals and this gave investors
the motivation to spend on the
refurbishments.
Along Neil Road, at No: 136/138, Goethe Institute
leased from me years ago. This is one of the finest
works of Swan & Mclaren Architects who in the
late 1920s designed one of the most eye-catching
heritage assets which is still flourishing today with its
architectural ingenuity.
Today, many of the new owners of the Singapore
Shophouses are from real estate funds and UHNWIs
looking at owning great assets that have a bespoke
heritage of the past. Many investors also like to own
hospitality assets with a heritage past.
I sold Naumi Liora recently to 8M Real Estate
while Hotel 1929 was sold to Mr Cheong Koon
Hooi who is also the owner of The Warehouse Hotel.
When I acquired Wanderlust for Mr Loh Lik Peng,
his vision of hospitality gentrification from an old
school to a hip and well known hotel speaks volume
of what one can do to a heritage asset.
I am looking into doing the same in Singapore’s
other heritage streets where we can bring together
buyers who are into heritage, talented architects and
F & B and hospitality entrepreneurs to transform the
streets into a gentrified area attracting tourists and
locals alike.
Working alongside me is Dr Julian Davison who
has written a coffee table book entitled ‘Singapore
Shophouse’, a compelling narrative inclusive of
wonderful photography of the history of the
Singapore shophouse. Dr Davison is an authority on
this heritage asset. Together, we are confident that
the next 10 – 15 years will see more shophouse areas
being gentrified amid growing tourist numbers.
Added to this mix are
the millennials who
started the co-working
and co-living concepts.
We will all come together
for ‘Co-Minding’ sessions
– basically a word I coined
to mean like-minded people
coming together to change the way
the world works.
Closely related to this is Dr Davison’s work
which endeavours to give a story to each of
the heritage shophouse. We are creating a
unique formula to better make use of our built
heritage to showcase our past glories and pains
as our society progresses further. These 8,900
shophouses are a window to our past and they
can be used to tell the Singapore story. ”
9 NEIL ROAD
Between 1987 and 1988, 32 dilapidated
shophouses of a hybrid Hokkien-
Teochew style were restored by the Urban
Redevelopment Authority. This was the first
ever project undertaken by the government
to demonstrate to the private sector that it
was technically possible and commercially
viable to restore Singapore’s heritage
buildings to their former glory. The first unit
to be restored was 9 Neil Road. It was then
converted into a teahouse which hosted
Queen Elizabeth II on her State visit in 1989.
– Source: URA.
Dr Julian Davison

44 ASIAN PROPERTY REVIEW INVESTMENT
BUYING HERITAGE
SHOPHOUSES
IN MALAYSIA
Asian Property Review chats with KL See, director of Metro Homes
Sdn Bhd who is also the deputy president of the Malaysian Institute
of Professional Estate Agents and Consultants (MIPEAC) on the
investability of shophouses in Malaysia.
1 Define heritage shophouses in Malaysia.
A heritage shophouse or building is defined under the
National Heritage Act 2005 (ACT 645) as a building
or groups of separate or connected buildings which,
because of their architecture, their homogeneity
or their place in the landscape, are of outstanding
universal value from the point of view of history, art
or science.
It is always the right time to buy
heritage shophouses in Malaysia due
to their limited supply.
2 Given that conservation or heritage shophouses
are a limited asset class, do you think its price
will hold steady and even increase over the years
despite negative factors such as oversupply of new
shophouses or sluggish economic conditions?
Yes, the price will hold steady and a marginal increase
over the years is expected because of its limited
availability. But overall, such shophouses are still
subject to town planning laws, etc. For example,
rules such as traffic flow, parking requirements will
affect the entire area which may contain heritage
shophouses. But these external factors will not have a
major impact on heritage shophouses.
3 Is it the right time now to buy heritage shophouses
in Malaysia? If yes, which are the preferred areas?
Yes, it is always the right time to buy heritage
shophouses in Malaysia due to their limited supply.
Most of the time, the unit is sold even before it
reaches the market as there is always a group of
investor ready to buy it.
Penang, Melaka and Kuala Lumpur are popular
locations but Ipoh is now the new destination for
tourists – be they locals or foreigners.

May - June 2018
45
Jonker street in Malacca is filled with
restored heritage shophouses which
makes it very popular with tourists.
4 Who are mainly the buyers and why do they prefer
heritage shophouses?
The buyers are mainly locals who are already
operating a business in a heritage shophouse or are
planning to do so. Foreigners who buy are those who
appreciate the value of heritage shophouses although
in some cases, they might be put off by the cost of
conservation or renovation.
5 Apart from those doing businesses in heritage
shophouses, why are heritage shophouses not
popular as an investment asset with locals?
Locals don’t see the long term potential value of the
shophouse as they are usually in a bad condition due
to age, say for example, a 100-year-old shophouse.
It is usually 2 storeys only – and furthermore, most
of these are located in the city centre which lacks
parking space and are usually adjacent to narrow
roads. New township shophouses on the other hand
have ample parking spaces.
6 For foreigners, what are the limitations, if any?
The only limitation is the same which applies to all
foreigners e.g. in KL, it has to be RM1 mil or above.
Like any
commercial
property, it is
easy to get a
loan – the only
challenge is the
valuation.
See Kok Loong
7 What is the price range (psf ) for heritage
shophouses in the most sought-after locations and
what was the appreciation like since 2009?
For KL, the price per sq foot varies tremendously for
example, along Jalan Tuanku Abdul Rahman alone,
the price can range from RM800 psf to RM8,000 psf
between 2009 - 2017! (See table).
As for Penang, we have many transactions of pre-war
shophouses e.g. 80 transactions for Georgetown alone
from 2009 – 2017. As an example, as per the table, in
Kawasan Jalan Penang, a shop which sold for RM215
psf in 2009 was transacted at RM1,669 psf in 2017.
That’s six times plus increase in appreciation.

46 ASIAN PROPERTY REVIEW INVESTMENT
TRANSACTION PRICES OF SHOPHOUSES IN JALAN TUANKU ABDUL RAHMAN 2009 - 2017
Transaction Date Area Address City Category Condition Land Area (Sq Ft) Price Per Sq Ft. (Rm)
3-Oct-17 Jalan Tuanku Abd Rahman No.44, Jalan Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,537.01 3,211.21
4-Jan-17 Jalan Tuanku Abd Rahman No.153, Jalan Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,098.96 8,099.25
28-Aug-15 Jalan Tuanku Abd Rahman 497, Jln Tuanku Abd.rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,884.87 1,782.62
24-Aug-15 Jalan Tuanku Abd Rahman 217, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,292.71 6,106.31
10-Oct-14 Jalan Tuanku Abd Rahman 520, Jalan Tuanku Abdul Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,095.93 858.81
20-May-14 Jalan Tuanku Abd Rahman 47, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,472.91 4,043.82
3-Jun-13 Jalan Tuanku Abd Rahman No. 346, Jalan Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,002.09 499.48
27-Aug-12 Jalan Tuanku Abd Rahman 3, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,995.93 3,206.53
30-Nov-11 Jalan Tuanku Abd Rahman 319, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,999.93 1,000.03
28-Jul-11 Jalan Tuanku Abd Rahman 120,120a-d, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,752.94 2,738.25
28-Jul-11 Jalan Tuanku Abd Rahman 120,120a-d, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,752.94 2,738.25
28-Jul-11 Jalan Tuanku Abd Rahman 120,120a-d, Jln Tuanku Abd Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,752.94 2,738.25
23-Dec-09 Jalan Tuanku Abd Rahman 442,jln Tuanku Abdul Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,997.93 825.85
11-Nov-09 Jalan Tuanku Abd Rahman No. 502,jalan Tar Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,883.68 849.40
11-Nov-09 Jalan Tuanku Abd Rahman No. 504,jalan Tar / Jln Ipoh Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,878.46 851.76
12-Oct-09 Jalan Tuanku Abd Rahman 358,jalan Tuanku Abdul Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 2,002.09 549.43
6-Mar-09 Jalan Tuanku Abd Rahman 501,jln Tuanku Abdul Rahman Kuala Lumpur, Bandar Kuala Lumpur Perdagangan Pre War 1,838.94 1,141.96
Transaction Date Area Address Location Category Condition Land Area (Sq Ft) Price Per Sq Ft. (Rm)
13-Oct-17 Kawasan Jalan Penang 41, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 39, Jln Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 33, Jln Phee Choon Timur Laut, George Town Perdagangan Pre War 1,044.10 1,669.97
13-Oct-17 Kawasan Jalan Penang 35, Jln Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 37, Jln Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 43, Jln Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 47, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 979.51 1,669.97
13-Oct-17 Kawasan Jalan Penang 49, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 882.64 1,669.97
13-Oct-17 Kawasan Jalan Penang 53, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 656.60 1,669.97
13-Oct-17 Kawasan Jalan Penang 45, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 1,669.97
13-Oct-17 Kawasan Jalan Penang 55, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 1,108.68 1,669.97
29-Jul-15 Kawasan Jalan Penang 212, Jln Transfer Timur Laut, George Town Perdagangan Pre War 2,143.92 704.32
10-Mar-15 Kawasan Jalan Penang 18, Lebuh Dickens Timur Laut, George Town Perdagangan Pre War 1,421.95 1,406.52
14-Apr-14 Kawasan Jalan Penang 133, Jln Hutton Timur Laut, George Town Perdagangan Pre War 3,288.89 851.35
13-Mar-14 Kawasan Jalan Penang 107, Hutton Lane Timur Laut, George Town Perdagangan Pre War 723.98 897.81
20-Feb-13 Kawasan Jalan Penang 326, Jalan Penang Timur Laut, George Town Perdagangan Pre War 850.35 215.36
20-Feb-13 Kawasan Jalan Penang 322, Jalan Penang Timur Laut, George Town Perdagangan Pre War 904.17 215.4
20-Feb-13 Kawasan Jalan Penang 324, Penang Road Timur Laut, George Town Perdagangan Pre War 882.64 215.53
20-Feb-13 Kawasan Jalan Penang 318, Penang Road Timur Laut, George Town Perdagangan Pre War 957.99 215.45
20-Feb-13 Kawasan Jalan Penang 320, Penang Road Timur Laut, George Town Perdagangan Pre War 925.70 217.84
18-May-09 Kawasan Jalan Penang 55, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 1,108.68 215.43
18-May-09 Kawasan Jalan Penang 53, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 656.60 215.43
18-May-09 Kawasan Jalan Penang 51, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 764.24 215.43
18-May-09 Kawasan Jalan Penang 47, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 979.51 215.43
18-May-09 Kawasan Jalan Penang 45, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 41, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 49, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 882.64 215.43
18-May-09 Kawasan Jalan Penang 43, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 39, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 37, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 35, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 990.28 215.43
18-May-09 Kawasan Jalan Penang 33, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 1,044.10 215.43
18-May-09 Kawasan Jalan Penang 31, Jalan Phee Choon Timur Laut, George Town Perdagangan Pre War 14,025.36 215.43
Source: JPPH

May - June 2018
47
8 How is the rental yield?
Rental yield is not high - usually around 2-3% and
this is also one reason why locals are not so interested
because the cost of fund is higher as compared to
Singapore and Hong Kong which is below 2%.
After the repeal of the Rent Control Act 1966 in
1997, although owners of pre-war shophouses could
increase their rentals, by then many local tenants
prefer townships outside of KL city centre.
As for Penang and Melaka, the story is a bit different
because some core city centre areas of Georgetown
and Melaka were designated as UNESCO heritage
sites. This attracted a lot of tourists - continuous
government promotion of local tourism and social
media also contributed to the interest in shophouses
there. As a result, there were a lot of transactions in
those areas in the last 10 years.
A row of restored shophouses in Penang.
9 Are newly built shophouses a competition in terms
of price and rental yield?
Newly built shophouses are targeted at a different
market now - the yield is higher and it usually has
more floors such as 4-5 storeys as compared to the
2-storey heritage shophouses.
For KL, the price per sq foot varies
tremendously for example, along Jalan
Tuanku Abdul Rahman alone, the price
can range from RM800 psf to RM8,000
psf between 2009 - 2017!
10 Why are boutique hotels and eateries such popular
businesses in heritage shophouses?
These businesses have a lifestyle element where
customers have the time to appreciate and live in
to understand more about the heritage building.
It is unlike selling groceries where the shopper is
more concerned about the price and then move on.
Retailing is also not popular due to the popularity of
e-commerce – it’s not able to survive the high cost of
heritage buildings.
11 Is it easy to get a loan to purchase heritage
shophouses? Can foreigners obtain such a loan?
Yes, like any commercial property, it is easy to get a
loan – the only challenge is the valuation. The bank’s
panel of valuers would be adding the restoration
cost into the loan amount, etc. As every building
condition is different, each case is approved on a case
by case basis.
Can foreigners get a loan? Yes but at a lower margin.
In any case, I believe most foreigners come in with a
bigger capital and big operation plans like running a
designer hotel.
12 What is your advice for foreign investors interested
in buying a heritage shophouse in Malaysia? Are
there any downsides or risks?
Foreign investors must come in with a plan and must
be familiar with the town planning rules as well as get
all the required approvals and permits.
The downside is that if the area is not popular, then
it is harder to resell. So, it is better for the foreigners
to group together or on their own buy and develop
not just one unit but the entire row of heritage
shophouses; or restore the entire street, if need be.
Only then can it have an impact and attract tourists
and locals alike with its eateries and fine dining
restaurants, etc.

50 ASIAN PROPERTY REVIEW INVESTMENT
“HOW I
BOUGHT MY
FIRST FLAT
IN TOKYO”
Canadian property author cum entrepreneur
Christopher Dillon narrates how he bought his first
apartment in Tokyo.
Christopher Dillon
CONCRETE ACTION
Back in May 2010, it was time to use what I had learned
when researching on my book on how to navigate through
the Complexities of Japanese Real Estate. I decided to buy
an apartment in Tokyo. With Erik Oskamp, an agent I had
met while researching my book, I spent the afternoon of
September 30, 2010, looking at apartments in Nakano-ku,
in Tokyo’s western suburbs, and in Itabashi-ku, Adachiku
and Katsushika-ku in the north.
The apartments were 16–42 sqms in size and 22–36 years
old. Some buildings had hundreds of units, while others had
fewer than 40, and the group included buildings made of
steel-reinforced concrete as well as steel frame construction.
All were priced at less than ¥6 million and served by a train
or subway line, although one apartment was a 20-minute
walk from the nearest station. In Japan, prospective buyers
cannot view the inside of tenanted apartments. But we were
able to walk around the neighbourhoods, some of which
were quasi-industrial. Overflowing mailboxes indicated
buildings with high vacancy rates, while rust stains and
peeling paint suggested maintenance problems.
I short-listed three apartments and, on October 1, made an
offer for one in Itabashi-ku. The offer, which was 5% less
than the asking price, was rejected, and I subsequently met
the original ¥4.2 million asking price. When that offer was
accepted, I started doing the paperwork, which included a
notarized declaration that I was not a resident of Japan.
I also signed two powers of attorney, one authorizing Erik’s
company to purchase the apartment on my behalf and
a second enabling a judicial scrivener, Kawanabe-san, to
register the property in my name. Erik also began the due
diligence process to ensure that there were no problems with
the building, title or tenant.
SIMPLE PROCEDURE
Located in Tokyo’s Itabashi-ku, this apartment was built in
1974 from steel-reinforced concrete. This was followed by
two video chat sessions on Skype. One was with Kawanabesan,
who needed to verify my identity and confirm that I was
buying the property. The second was with Wakabayashi-san,
a licensed real estate agent employed by Erik’s company, who
read me the explanation of important matters.
The recitation took 70 minutes and degenerated into
comedy when the agent told me that the tenant, a retired
civil servant, “had a problem with his waist.” I asked for
clarification, wondering if he was confined to a wheelchair
or if there was a trash-related problem. After consulting
a dictionary and much discussion among the office staff,
Wakabayashi-san told me that the tenant had a severe
case of hemorrhoids, which was the reason he had retired.
The sale closed on November 15, 2010, and the tenant has
remained in the apartment.
Built in 1974 from steel-reinforced concrete, the unit is 21
sqms in size, plus a six-square-meter balcony. The apartment

May - June 2018
51
is adjacent to the Shuto Expressway and is a 10-minute
walk to the Mita subway line, from where it is 30 minutes to
central Tokyo.
I paid cash for the apartment, which I still own. With all
taxes and fees, the total purchase price was ¥4.6 million. In
2016, the apartment generated revenue of ¥424,701, after
deducting management fees, maintenance charges, repairs
and taxes.
As a non-resident Canadian living in Hong Kong, rental
income from the apartment does not create a tax liability in
Canada or in Hong Kong.
SOME BASICS
If you buy a property with a sitting tenant, you assume the
vendor’s obligation to repay the tenant’s security deposit.
The buyer deducts the tenant’s security deposit from the
purchase price.
Many real estate agents provide property management
services. These range from basic plans to full-service
packages that guarantee the landlord will receive the rent,
even if the tenant doesn’t pay.
The Foreign Exchange and Foreign Trade Act (Act No. 228
of 1949) requires non-residents to file a ‘‘Report Concerning
Acquisition of Real Property in Japan or Rights Related
Thereto,’’ with the Bank of Japan if they buy real estate for
investment purposes. The report must be filed within 20 days
PURCHASE
Purchase price ¥4,200,000
Agent’s fee 195,300
Judicial scrivener’s fee 118,400
Stamp tax 10,000
Acquisition tax 63,500
Total ¥4,587,200
2016 REVENUE
Rent ¥639,000
Management fee (34,506)
Maintenance fee (142,560)
Repairs (4,172)
Fixed assets tax (23,900)
Income tax (9,125)
Total ¥424,737
of the purchase and is not required if the property is used
as a residence for the buyer, his relatives or employees; to
house a business or non-profit business; or if the property
is purchased from another non-resident.
Editor’s Note: This excerpt (with minor edits) can be found in
the author’s second edition of Landed Japan.
Overflowing
mailboxes indicated
buildings with
high vacancy
rates, while rust
stains and peeling
paint suggested
maintenance
problems.
Located in Tokyo’s Itabashi-ku, this apartment was built in 1974 from steel-reinforced concrete.

52 ASIAN PROPERTY REVIEW INVESTMENT
LAW NOW ALLOWS
EXTENDED
PERIOD TO
SUE FOR
NEGLIGENCE
The new Malaysian Act extends the limitation period for negligence suits
to either 6 years from the date when the cause of action accrues,
or within three years from the date on which the claimant knew about
the material facts (if that period expires after the 6-year period).
Most people are aware that in court
cases, there is a time limit or time
bar for the aggrieved party (termed
“plaintiff ”) to sue the other party
(“defendant”). In civil cases, the time limit can
be different depending on the subject matter and
who the defendant is. In the case of construction
work, the law in Malaysia currently provides for
the following:
• For actions in simple contract: 6 years from
the date of the breach of contract.
• For actions in tort such as negligence: 6
years from the date when the cause of action
accrues (e.g. when physical damage occurs).
• For latent or hidden damage: 6 years from the
date on which the damage occurred.
It should be noted that, in cases of fraudulent
concealment (i.e. deliberate concealment of
defects), the limitation period does not begin to
run until the fraud is discovered or could have been
discovered with reasonable diligence, according to a
blog on Malaysian laws.
However, the time bar has now been extended in
favour of the claimant following the passing of the
Limitation (Amendment) Act 2018 (the “Act”). It
will become enforceable once it is gazetted within
the next few months.
The Act will extend the maximum period for
eligibility to claim to 15 years. According to Datuk
Prof. Sundra Rajoo, Director of AIAC, (Asian
International Arbitration Centre, formerly known as
the KLRCA), the Act will also extend the limitation
period for negligence suits not involving personal
injuries to either 6 years from the date when the
cause of action accrues, or within three years from
the date on which the claimant knew about the
material facts (if that period expires after the initial
6-year period).
The new section applies to all applicable limitation
periods and not just exclusively construction cases
although the latter forms the bulk of cases where
this new limitation period applies as it involves hard
to discover latent building defects. This also explains
why the maximum length of time the plaintiff can

May - June 2018
53
bring a suit is 15 years – as other items such as
cars or electrical items normally do not have such
a long working life.
Most notably, it will cover latent damages in
construction cases, allowing the buyer a right of
action for damages for negligence from the date of
discovery of the damage (as opposed to the date
when the cause of action arises).
“In other words, the right of action starts from
the date when the buyer discovers the damage
and not from the date of purchase or from the
date of possession,” the AIAC Director says in
his explanatory note to ‘A Bill to Amend the
Limitation Act 1953’.
LATENT DAMAGES TARGETED
Clause 2 of Section 6A of the Bill is intended
to cover latent damages in construction cases.
Under the new section 6A, a buyer can claim
damages within three years from the date when
he/she discovered the damage, regardless of the
fact that on the date of purchase, the damage was
not discoverable through general inspection or
the buyer did not know or could not have been
reasonably expected to know the damages.
“Thus, this Bill will make the parties involved in
a project such as Builder, Architect, Engineer,
Contractor, Subcontractor etc. (“the involved
parties”) liable for damages accrued even after
completion of the project.”
Datuk Prof. Sundra adds that the Bill will have
significant effect on the provision for certificate
of completion and compliance (CCC) under the
Street, Drainage and Building Act 1974.
The CCC provision ensures that a project is
complete and complies with all the requirements
under the existing law. But, since the Bill proposes
the starting time of limitation to be from the date
of discovery of the damage, the involved parties
may be liable even if they have complied with the
provision for CCC.
Datuk Prof. Sundra Rajoo
Any of the involved parties in the
construction process may be liable for
damages at any time after completion
even if the project is CCC-compliant,
provided the action is within a period
of three years from the discovery of
the damages, subject to the overall
maximum of 15 years.
However, he notes that the Act prohibits institution
of any proceeding after 15 years from the date on
which the cause of action first accrued (Section
6(3)). Thus, the buyer has a maximum period of 15
years from the date of occurrence of cause of action
to bring an action for damages.
Given the longer timeframe, the legal expert
anticipates an increase in claims by buyers, perhaps
even an increase in frivolous claims with buyers
taking advantage of the long period of time for any
latent damages to appear.
The big deal is that in future, any of the involved
parties may be liable for the damages at any time
after completion even if the project is CCCcompliant,
provided the action is within a period
of three years from the discovery of the damages,
subject to the overall maximum of 15 years.

54 ASIAN PROPERTY REVIEW INVESTMENT
For construction companies and others responsible
for the “building process”, casting doubt on a
buyer’s allegations of becoming aware of the
damage very late will be a key defence, Datuk
Professor Sundra notes.
UNDULY LONG?
The table of comparison below shows that the new
Malaysian Act is actually in line with the laws of
England and Wales; and Singapore.
For the avoidance of doubt, the sole reason why
there are different terms in the table as regards
the moment triggering the limitation period (e.g.
“discovery of breach;” “knowledge of defect,” etc.)
is that these are the expressions used in the specific
laws of the countries in question.
Cracked ceiling/wall which only appeared years after vacant possession was given.
COMPARISON OF LIMITATION PERIODS
JURISDICTION STANDARD LIMITATION PERIOD MAXIMUM ALLOWED PERIOD
Austria
Brazil
California (USA)
Florida (USA)
Germany
Queensland
(Australia)
Russia
Singapore
UAE
UK (England
and Wales)
3 years from discovery of breach.
180 days from knowledge of defect.
10 years from substantial
completion of the improvement.
4 years from knowledge of defect.
3 years from discovery of breach.
6 years from the date on which the
cause of action arose.
3 years from discovery of breach.
6 years from the date the damage
occurred or 3 years from the date
on which the claimant had the
requisite knowledge and the right
to bring such an action.
10 years from the date of delivery.
6 years from the date the damage
occurred or 3 years from the date
on which the claimant had the
requisite knowledge and the right
to bring such an action.
30 years from the date of
cause of action.
5 years from handover.
N/A
10 years from actual
possession by the owner.
N/A
30 years from the date of
cause of action.
10 years from the day the
breach happened.
15 years from the
negligent act or omission.
N/A
15 years from the
negligent act or omission.
Source: AIAC

May - June 2018
55
ILLUSTRATIONS
a. C bought a house from
D in 2000. In 2010, C
discovered a crack which
damaged the walls
badly. A building report
made by a consultant
revealed that the cracks
had appeared in 2002,
two years after C moved
into the house. C has
three years from 2010
to file an action in court
against D for damages.
b. C bought a house from
D in 2000. In 2006, C
discovered a crack which
damaged the walls badly.
A building report made
by a consultant revealed
that the cracks had
appeared in 2002, two
years after C moved into
the house. C has three
years from 2006 to file an
action in court against D
for damages.
c. C bought a house from
D in 2000. In 2005, C
discovered a crack which
damaged the walls badly.
A building report made
by a consultant revealed
that the cracks had
appeared in 2002, two
years after C moved into
the house. C has three
years from 2005 to file an
action in court against D
for damages.
Source: Bill to Amend the Limitation Act 1953
15-YEAR TIME BAR
Notwithstanding the extra 3 years, no
action shall be brought after the expiration
of 15 years from the date on which the
cause of action accrued.
C bought a house from D in
2000. In 2017, C discovered
a crack which damaged
the walls badly. A building
report made by a consultant
revealed that the cracks
had appeared in 2001, one
year after C moved into the
house. C cannot commence
an action because he has
already exceeded the 15-year
limitation period.
Source: Bill to Amend the Limitation Act 1953

56 ASIAN PROPERTY REVIEW INVESTMENT
Photography by Jan Yong
FANCY RETIRING
IN THE PHILIPPINES?
The Philippines is one of the easiest countries in the world to obtain residency
on top of its foreigner-friendly property laws.
For those who are thinking of retiring in
Southeast Asia, apart from Malaysia which
has a very friendly retirement programme,
the next country you should consider is
the Philippines. Apart from its beautiful islands
and beaches – it has about 7,600 islands – the
Philippines has the advantage of friendly people,
good weather and an affordable lifestyle.
However, the affordability may not last long as
the country has been experiencing a property
boom since the last 3 years and according to Nick
Stuart, Founder and Managing Director of https://
exclusivehotproperties.com, the boom is causing “prices
to go up very fast”.
Headquartered in Manila, Stuart’s firm specialises
in investment properties, lifestyle properties and
citizenship or residency services.
Of note is the Philippines’ Special Resident
Retirement Visa (SRRV) which allows foreigners
to gain permanent residence easily without
marriage to a citizen of the Philippines.
The SRRV is overseen by the Philippine
Retirement Authority (PRA), which comes up
with the guidelines.

May - June 2018
57
MINIMUM CASH INVESTMENT
The minimum investment to obtain an SRRV
depends on your age and circumstances. The
PRA lists three cases, each case having a different
minimum investment.
Case 1: Applicant is under 50 years old
Minimum investment: $50,000
Case 2: Applicant is at least 50 years old, but has no
qualifying pension.
Minimum investment: $20,000
Case 3: Applicant is at least 50 years of age and has
a pension of at least $800 per month (single) or
$1000 per month couple.
Minimum investment: $10,000
QUALIFYING INVESTMENTS
• Purchase of condominium unit (60:40 ratio);
• Long term Lease of a house and lot,
condominium or townhouse;
• Construction of a residential unit on a leased
parcel of land;
• Purchase of Proprietary Membership/Golf
shares in golf clubs;
• Deposit into a PRA-approved bank
facilities such as a workout room, a restaurant and a
bar. Basically it amounts to living in a country club.
“If you want to live in a city without living in a
country club type atmosphere, there may also be
PRA-approved condo units. Again, talk to a PRA
officer for details or ask us.”
Suppose you want to avail of the SRRV without
committing yourself to living in a PRA approved
community. What if you want to play at the golf
clubs and tennis courts of such a community without
actually living there? Many of the communities
allow you to buy a “use of facilities” share. What this
means is that for a certain amount of money, you
buy a share in the community which allows you to
use all the facilities without having to live there. A
typical share at a decent community with golf, tennis
and swimming might cost in the neighbourhood of
USD10,000, says Stuart.
“There is one problem however. That USD10,000
investment may not be enough money to qualify
you for the SRRV. As described earlier, depending
Stuart cautions however that one can’t just purchase
any condominium, or construct on any leased land -
it must be a PRA-approved investment.
“You pick out a residential community/facility
approved by the PRA and you buy a share or
lease a condo, which allows you to live and play
in this community. Different communities have
different arrangements. But in all cases, the bottom
line is this: You have to fork out some good
money, usually at least USD50K – USD100K, or
sometimes even more.”
Nick Stuart
What are these communities like? Typically they are
very upscale gated and guarded communities on the
outskirts of a major city. They usually contain a golf
course, tennis courts, a swimming pool and other

58 ASIAN PROPERTY REVIEW INVESTMENT
on your circumstances, the minimum investment is
10, 20 or 50 thousand US dollars. If you are in case
3 as described above, your minimum investment
requirement is only $10,000 and the “use of facility”
share may be perfect for you. However, even if your
minimum investment is (for example) USD20,000
dollars, there is no reason you can’t invest $10,000
in your golf share, and another $10,000 in some
other PRA-approved investment.”
BANK DEPOSIT
The PRA gives you another option, for those that
don’t want to live in a PRA community or buy a
PRA-approved country club share. Simply open
up a special PRA bank account in a PRA partner
bank and deposit the appropriate amount of money.
“The banks we recommend would be Citibank or
HSBC,” says Stuart.
He adds, “Suppose your minimum investment is
USD20,000, because you are over 50 but have no
qualifying pension fund, simply open up the PRAapproved
bank account, deposit USD20,000 into
this account and the SRRV is yours! Later, if you
decide you want to buy into golf shares or live in
a PRA-approved residential community, you can
transfer your bank account investment into your
new PRA-approved investment.”
Suppose your minimum
investment is USD20,000,
because you are over 50 but
have no qualifying pension
fund, simply open up the PRAapproved
bank account, deposit
USD20,000 into this account
and the SRRV is yours!
PROS AND CONS OF SRRV
What is the downside of a SRRV visa? “Actually, if
you leave money out of the discussion, there is no
downside. The SRRV visa is a wonderful thing. It is
extremely easy and quick to obtain and there is no
reason to feel pressured into a marriage!”
“The problem with the SRRV is that you have to put
money aside and that money is basically untouchable
so long as you want to keep your SRRV.
“If you buy into a golf share, or you live in a condo
in a residential PRA- approved community, you
can argue that your money is being used towards
a good purpose. However, if you use the bank
account method then that money is just sitting there,
basically in escrow and you can’t touch that money
so long as you want to keep your SRRV.
“What happens if you really need that money? Can
you get it? Yes, but perhaps not immediately. You
have to go to a PRA office and file an application for
release of the funds.
Photography by Jan Yong
“Once the release is approved, you lose your SRRV.
So basically, in the case of a bank account, if you
want to live in the Philippines for the rest of your
life, it’s the equivalent of buying an SRRV for
USD10K or USD20K. I guess the bank account
does make some interest, but I don’t think this
amounts to very much.

May - June 2018
59
Traffic on a road in Makati city in Metro Manila, Philippines. Makati -
business center and one of the 17 cities that make up Metro Manila.
“In the case of a golf share or residence in a condo,
if you want your money back, you have to do
two things. Firstly, you have to find a buyer for
your share, and secondly, you also have to file an
application for release of your investment once a
buyer is found. Of course, as in the case of the bank
account, you will lose your SRRV.”
LAST RESORT – MARRIAGE!
There is one other way to get your money back
without losing permanent residence. Suppose you
come to the Philippines as a single man and invest,
for example, USD20,000 in a PRA bank account.
BUYING PROPERTY IN
THE PHILIPPINES
Stuart recommends Metro Manila especially Makati City and
its neighbour Bonifacio Global City which together produce
49% of the GDP for the whole of the Philippines.
All contracts and legal documents are written in English
while the tenure is freehold.
The property sector in Manila is well regulated allowing the
buyer to have peace of mind that their investment is secure.
In the Philippines, there is no need for a lawyer unlike
most other jurisdictions. Property transactions require only
licenced brokers who may or may not be lawyers, but who
function like lawyers.
Suppose, later you fall in love and decide to marry
a Filipina. Having an SRRV visa does not prevent
you from also applying for a spousal permanent
residence visa. Once you get the Spousal permanent

60 ASIAN PROPERTY REVIEW INVESTMENT
“Once at the office, you will start the application
procedure. Of course make sure you have all
needed documentation such as passports, bank
account information, proof of pension, police
clearance, etc. Don’t err on the side of not bringing
enough. Bring everything with you that could
possibly be of use in the application procedure. As
part the application procedure, you will also have
to take a medical examination.
“If your choice is simply to get an SRRV via bank
deposit, they can help you to do that immediately,
and the SRRV can be in your hands in a relatively
short period of time. If your choice is to find a golf
share or residence, they can probably help you with
that as well.
BENEFITS OF SRRV
Once you are an SRRV holder, it opens the door to
vast opportunities and benefits.
These include (but are not limited to the following):
1. Option to Retire Permanently
• You may live, work and study in the
Philippines
residence visa, you could withdraw your money
from the PRA bank account. You would lose your
SRRV visa, but it would not matter because you
would still be entitled to permanent residence via
your Spousal visa.
PROCEDURE FOR OBTAINING
THE SRRV
“You can do-it-yourself or you can seek advice from
consultants like us. Of course, the latter is preferable
to ensure things go smoothly.”
“Having said that, the PRA officers are extremely
well trained and helpful, and will hold your hand
throughout the whole process. I have even heard
they will pick you up from the airport or your hotel
and bring you to the office.
2. Multiple Entry Privileges
• You may travel outside the Philippines
and re-enter at anytime
3. Exemptions from:
• Income tax over your pension and
annuities;
• Exit and re-entry permits of the Bureau
of Immigration;
• Annual registration requirement of the
Bureau of Immigration;
• Customs Duties and Taxes with regard
to the importation of household goods
and personal effects up to US$7,000.00;
• Travel tax, if your stay in the Philippines
is less than one year from the last entry
date; and
• I-Card

WORLD VIEW
Our EXPERTS give their opinions on selected global hotspots

MALAYSIA
JAPAN

64 ASIAN PROPERTY REVIEW WORLDVIEW
SWEDISH
VISION IN ASIA
At the end of March, IKEA announced the development of Toppen Shopping Centre,
comprising 1.1 mil sq ft shopping centre seamlessly integrated with IKEA Tebrau in Johor.
Asian Property Review had a chat with Christian Rojkjaer, Managing Director of IKEA
Southeast Asia on its expansion plans and its sustainability and technology aspirations.
1
Where else in Southeast Asia is IKEA SEA
expanding next after Penang and the Philippines?
We are investigating the market potential in Vietnam
and have applied to our franchisor for the rights, so our
ambition is strong but we have no firm plans at this time.
MyTown Shopping Mall at Jalan Cochrane, Kuala Lumpur
Photography by Jan Yong
2
We are working on extending
e-commerce to all of Malaysia and
intend to launch a web shop later
this year.
IKEA takes seriously ‘people and planet’ issues -
please share what are some of these issues?
• We make sustainability a natural part of our
everyday business – taking responsibility for the
impact we have on the environment and all the
people touched by our business (including coworkers
and suppliers.)
• We introduce the IKEA code of ethics, called
IWAY, to all suppliers and work with them to
ensure respect for human rights and fair working
conditions for the many people who work for us
through contracted companies.
• Our sustainability principles are also embedded in
the way we design our buildings, the materials we
choose for construction and the features we include
to help us conserve water, generate renewable
energy, manage waste and more.

May - June 2018
65
Toppen aerial view (artist impression)
• Some examples:
• At our IKEA stores, we recycle an average of
70% of all the waste we produce and we help
customers recycle, too.
• We have installed rain water harvesting
systems at all our shopping centres and most
IKEA stores.
• We track energy consumption and outfitted
all our IKEA stores and our shopping centres
with LED lights, which consume 80% less
energy than traditional incandescent bulbs.
• We now have more than 16,000 solar panels
on rooftops of our IKEA stores and our
shopping centres in the region, generating
more than 5.5 million megawatt hours of
renewable energy during 2017 alone.
• At our Toppen Shopping Centre, Johor, we will
be introducing kitchen macerators (decompose
food with solvent) underneath the sinks at all
our Food & Beverage outlets to minimise the
amount of food waste going to landfill.
• We also take social responsibility by developing
long-term partnerships with non-profit groups in
the communities where we operate and, during
2017, donated a total of SGD1.6 million to good
causes. All our co-workers are entitled to a day of
paid leave to donate their time to a charitable cause.
(L-R) Christian Rojkjaer, Managing Director of IKEA Southeast Asia
and Christian Olofsson, Shopping Centre & Mixed Use Director, IKEA
Southeast Asia at the Toppen Shopping Centre Media Event
We invest in real estate including shop
houses, apartments, hotels, a school
and more to maximise the value of the
land we develop and to create walkable
communities where people can live,
work, shop and play.

66 ASIAN PROPERTY REVIEW WORLDVIEW
3
4
In terms of IKEA’s sustainability aspirations, would
doing away with plastic products be one of its
eventual goals?
This has been something we have been working
together with our partners, tenants, and even
manufacturers of our IKEA products. This includes
minimizing waste in our value chain and turning it into
a resource by using it to make new products.
What are the projects in the pipeline in Malaysia
(after Penang)?
Our vision is to create a better everyday life for the
many people and, as retailers, we want to make it is as
easy as possible for many Malaysians to access our great
range of functional, affordable home furnishings. So, we
are working on extending e-commerce to all of Malaysia
and intend to launch a web shop later this year.
Our sustainability principles are also
embedded in the way we design our
buildings, the materials we choose
for construction and the features we
include to help us conserve water,
generate renewable energy, manage
waste, etc.
5
6
Please share examples of other ‘residential, office and
other types of real estate’ that Ikea will go into?
• In Penang, we partner with Aspen Group to realise
the vision for Aspen Vision City – a development
that will, in addition to our IKEA store and
shopping centre, include shop houses, apartments,
hotels, a school and more. We invest in such types
of real estate to maximise the value of the land we
develop and to create walkable communities where
people can live, work, shop and play
• Meanwhile, the team at Mega Bangna in Bangkok
also opened its doors to other developers as they
aim to realise the vision of Megacity – a modern
community anchored by our retail destination.
The development will add hotels, office towers,
residential and other types of real estate to the area
surrounding our mall.
Would you say Aspen Vision City and Megacity
residential housing component would be in the
affordable range in line with Ikea’s vision of ‘creating
a better everyday life for the many people’?
IKEA Southeast Asia is first and foremost a retailer.
It is our primary goal to create better everyday life for
the many people through both IKEA’s wide-range of
well-designed, functional home furnishing products;
and anchored-by-IKEA shopping centres that work
both as a retail destination and a meeting space for the
Aspen Vision City_IKEA

May - June 2018
67
Aspen Vision City Master Plan
7
community. As for Aspen Vision City and Megacity,
we are currently working with experienced partners and
professional developers to bring it to life in the best and
most integrated way possible. At the end of the day, we
are building this for the community to live and work in.
How would these mixed developments be able to
differentiate from other similar mixed developments
in those areas – what are your USPs?
Our shopping centres and IKEA stores will become
the centre piece of a modern community. It will be
an integrated development where people can live and
work within easy reach of places to shop, meet, play
and socialize.
At our IKEA stores, we recycle an
average of 70% of all the waste we
produce and we help customers
recycle, too.

68 ASIAN PROPERTY REVIEW WORLDVIEW
8
9
Would the hotels in both mixed developments
be managed by an in-house team or established
hotel operators?
We will be engaging established hotel operators as well
as residential developers.
Why does every mall attached to IKEA have a
different name e.g. IPC, Toppen, MyTown?
We pride ourselves by positioning our malls as being
“local with a Scandinavian touch”; we believe that all
our shopping centres are uniquely appealing to the
local community without foregoing our roots hence the
differentiation. We have deliberately implemented a
‘House of Brands’ brand architecture for our shopping
centres, as we want our strong, robust brands to
resonate with the local community and catchment area.
This is in line with our brand story building centres -
‘Made with Swedish charm and a local touch’.
This ‘house of brands’ strategy allows each and every
brand to be unique in its own right, with flexibility
to adapt to the needs of the surrounding local
community. While we might have different brands, we
share common visions and values for each shopping
10
centre, chief of which is our vision of ‘creating a better
everyday life for the many people.’
The other key thread that unites our different shopping
centres is the strong focus on the customer experience
and journey at every touch point, enabling us to deliver,
with IKEA, a fun and inspiring full day out for the
whole community.
What are the new tech that’s going to be integrated
into the retail shopping experience e.g. AR (Ikea’s
Place app), AI, free home design service, pop-up
garden at home, human-first interfaces, smart veg
growing, etc?
When it comes to technology, we always look at how
we can incorporate tech and create a fun and unique
shopping experience. One of our most recent creations
is for one of our shopping centres – IPC Shopping
We have installed rain water
harvesting systems at all our shopping
centres and most IKEA stores.
Toppen (artist impression)

May - June 2018
69
Toppen Aerial View
11
Centre. We created a shopping centre app that goes
beyond the usual store guide. We worked with Spotify,
one of the biggest music streaming apps, to create a
food and mood matching tool within the IPC app that
allows users to find their perfect restaurant based on
their mood.
Could you briefly describe some of the new
tech adopted in IKEA’s retail destinations around
the world?
Urbanisation and digitalisation is pushing us to meet
the needs of a new generation of shoppers. The IKEA
PLACE app launched in the US, is an important
milestone in IKEA digital transformation strategy.
The app lets people confidently experience, experiment
and share how good design transforms any space,
such as a home, office, school or studio. We recently
launched e-commerce in Singapore and within less
than 4 months, it contributed 5% of total sales. We
are bringing this to both Malaysia and Thailand next.
As for the rest of the tech, we are slowly but surely
adapting it in our everyday business. Embracing the
digital world is one of the many things we look at to
ensure we are constantly meeting the demands of the
ever-changing world.
Christian Rojkjaer, and Christian Olofsson showcasing the progress of
Toppen Shopping Centre which is situated next to IKEA Tebrau
We now have more than 16,000 solar
panels on rooftops of our IKEA stores
and our shopping centres in the region,
generating more than 5.5 million
megawatt hours of renewable energy
during 2017 alone.

70 ASIAN PROPERTY REVIEW WORLDVIEW
UNDERSTANDING
JAPAN’S COUNTER-
INTUITIVE REAL
ESTATE MARKET
The Japanese market is the ideal cash flow market due to its
steady and high yield rental income.
Priti Donnelly is the
sales and marketing
manager at Nippon
Tradings International, a
proxy and buyers’ agency
representing foreign
investors with purchasing,
selling and managing
real estate in Japan. She
can be contacted at
info@nippontradings.
com or +1 519 546 9473
/ +81 3 4520 9262 www.
nippontradings.com
You may think real estate investing
is solely about property growth
as you would find in Australia,
U.K. US, Singapore and similar
markets. The Japanese property market
is not ripe with prospects for increased
property value. So, why then is the market
saturated with foreign investors?
CREATING OPPORTUNITIES
BEYOND CAPITAL GROWTH
The Japanese property market suffered
at least 25 years of declining/flat-lining
prices. Although capital growth made a
quiet entrance from 2012 to 2016, it was
too soon for investors to comfortably
speculate growth. Instead, investors found
a new opportunity. Because of the decline,
properties became quite affordable while
rental rates remained stable. The result,
steady and higher yields across Japan-- the
ideal cash flow market from high yield
rental income.
To put it in perspective, for as little as
USD30,000 at 7.5% yield net pre-tax,
investors can earn monthly rental income
of approximately USD170/month. As
an added benefit, in a prime location you
might also gain property value, but that
is not the focus of property investing in
Japan. This market is about common sense
investing without the speculative nature.
OVERCOMING THE
LANGUAGE BARRIER
This is not your typical internationally
friendly business market. On one hand, you
will experience the most reliable and honest
professionals in Japan, while on the other,
foreigner-shy professionals who likely
cannot speak English.
Furthermore, to invest in Japanese
properties, you will need a local address,
phone number and a local bank account,
impossible without communication and
Osaka skyline
Photography by Jan Yong

May - June 2018
71
Photography by Jan Yong
A typical house in Osaka
cooperation. To get around this barrier,
savvy foreign investors use a trusted
local Japanese/English speaking proxy or
representative to act on their behalf for
both communication and access to the
required information.
UNDERSTANDING OLD
STRUCTURES
Some novice investors shy away from
the Japanese property market believing
with a huff and a puff, structures could be
blown down. It is true that structures built
before 1981, including smaller steel-frame
buildings, and even wooden frame houses,
were not built to last and require major
renovations and repairs over time. However,
a major change to the Building Standards
Act for earthquake resistant construction
methods for buildings (reinforced concrete
blocks) occurred in 1981.
This became the turning point that
investors often looked to when purchasing
property. That being said, there is still a
niche market for older properties because
of the higher yield. In truth, regardless of
age, with due diligence, if the property has
proof of regular maintenance, renovations,
repairs to the interior and exterior, as well
… if the property has proof of regular
maintenance, renovations, repairs to the
interior and exterior, as well as sufficient funds
for ongoing repairs, and is tenanted, an older
higher yielding property could prove to be a
diamond in the rough.
as sufficient funds for ongoing repairs,
and is tenanted, an older higher yielding
property could prove to be a diamond in
the rough.
ACCEPTING FOREIGN REAL
ESTATE
Today, the best real estate opportunities
do not have to be in your own back yard.
JPMorgan Chase says Japanese real estate
and infrastructure are becoming more
attractive particularly with no more than
50% of leveraged funds. Above that, real
estate doesn’t become the driver, but the
leverage becomes the driver of your return.
Japan provides opportunities for stable,
monthly cash flow from rental income with
yields from 5% to 11% net pre-tax. Add to
that, currency exchange and the yen’s role
as a safe-haven currency and it’s easy to see
why this is a booming market for foreign
investors, contrary to the standard real
estate investment approach.

72 ASIAN PROPERTY REVIEW WORLDVIEW
OF
EARTHQUAKES,
TRAINS AND AIRPORTS
Asian Property Review chats with award-winning writer and
entrepreneur Christopher Dillon on earthquakes and infrastructure in
Japan – 2 key issues that investors are keen to know more about
before investing.
1
Japan’s construction technology, which
includes advanced earthquake-resistant
designs, is among the most developed in the
world. How effective are the buildings against
earthquakes, say, above Richter Scale 6?
Earthquakes in Japan are measured using the shindo
scale, which rates them as 0, 1, 2, 3, 4, 5 lower,
5 upper, 6 lower, 6 upper and 7, where 0 is only
perceptible by seismometers. In a 7, it is impossible
to remain standing, buildings collapse, cracks appear
in the earth’s surface and landslides occur.
Japan’s building standards are designed to achieve
two goals. In a moderate earthquake, up to about
5 on the Japanese scale, the building should
suffer little or no structural damage and still be
safe for occupancy. In a stronger earthquake, the
building should not collapse and there should be
Seismic retrofitting is not
mandatory in Japan.
no casualties as a result of structural failure. This is
important because 80% of the fatalities in the 1995
Great Hanshin Earthquake (GHE) were due to
collapsing buildings.
The GHE demonstrated the importance of revisions
to national building standards that took effect on
June 1, 1981. Of 923 buildings surveyed in central
Kobe after the GHE, 35% of those built before
1971 collapsed or were seriously damaged, 40%
had moderate or minor damage and 25% had slight
or no damage. For buildings constructed between
1972 and 1981, the statistics were 12%, 31% and
57%, respectively. But only 8% built after 1982 were
seriously damaged, with 17% incurring moderate
damage and 75% sustaining slight or no damage.
2
Is it a good idea to buy non-earthquake
resistant buildings? They may be cheap but
in the long run, are they worth it – perhaps
because over time, the capital value depreciates as
the likelihood of their being demolished grows.
Non-earthquake resistant buildings are not a
bargain, because they are significantly more
expensive to insure than earthquake-resistant ones.

May - June 2018
73
All of Japan is at risk of earthquakes.
Premiums in high-risk areas are about
three times those in low-risk zones.
Rents are lower in areas identified on hazard maps
as having a high earthquake risk. Homes in highrisk
districts that were erected before the seismic
standards were tightened in 1981 rent at a discount,
compared with those built after 1981.
Seismic retrofitting is not mandatory in Japan.
In 2013, about 9 million of Japan’s 52 million
dwellings did not meet modern earthquake
resistance standards.
3Since Japan is in the Pacific Ring of Fire and
is prone to earthquakes and tsunamis, are
there any cities that are completely free from
such natural disasters?
All of Japan is at risk of earthquakes. The Japan
Earthquake Reinsurance Co. divides the country
into three categories when calculating insurance
premiums. The high risk group includes Chiba,
Tokyo and Kanagawa. The low risk group includes
Iwate, Fukuoka and Nagasaki.
Premiums in high-risk
areas are about three times
those in low-risk zones.
4How effective are
the earthquake
warning systems
when it comes to
preventing fatalities?
By giving people time
to take shelter and
automatically stopping
trains and production
lines, Japan’s earthquake warning system has
saved many lives and prevented millions of
dollars in damage.
Aftermath of an earthquake in Japan.

74 ASIAN PROPERTY REVIEW WORLDVIEW
The high-speed Linear Chuo
Shinkansen, which uses
superconducting magnetic levitation
technology, is expected to begin
service between Tokyo’s Shinagawa
Station and Nagoya Station
in 2027.
While the system is imperfect, even a few seconds of
advance warning can make an enormous difference.
5What are some futuristic building
technologies and intelligent building
solutions that Japan has created?
Japan’s base-isolation and vibration-damping
technologies allow people to live comfortably in
high-rise buildings despite the threat of earthquakes.
Japan’s electronic toilets are also in a class of
their own.
6Please share what are the new road and rail
network links that will be completed before
the Olympics in 2020? How will this affect the
housing market particularly those that are located
near the lines?
A new station on the Yamanote Line, which circles
downtown Tokyo, is expected to open by 2020.
The currently unnamed station will be between
Shinagawa and Tamachi stations.
A new subway station between Kamiyacho and
Kasumigaseki on Tokyo’s Hibiya Line is scheduled
to open by 2020. The station is tentatively known as
Toranomon New Station.
The Tokyo Outer Ring Road and the Metropolitan
Inter-City Expressway are expected to be 90%
complete by 2020, with new sections under
construction in Tama, Chiba, Kanagawa and Saitama.
Over the long term, these developments will be
positive for nearby homeowners. Noise and traffic
disruptions will pose short-term challenges, however.
The N700A Series bullet train for Tokaido Shinkansen at Nagoya station.
7Will there also be new airports coming up?
The biggest aviation stories are improved rail
links at Tokyo’s Haneda airport and a new, second
runway at Fukuoka airport. The government
is also planning on expanding the number of
landing slots at both Haneda and Narita to cater
to growing tourist numbers.
8What are other new infrastructure projects
coming up that might impact the housing
market?
The high-speed Linear Chuo Shinkansen,
which uses superconducting magnetic levitation
technology, is expected to begin service between
Tokyo’s Shinagawa Station and Nagoya Station
in 2027. The service will be extended to Osaka
by 2045, and will allow you to live in Nagoya and
commute to Tokyo.
Ed’s Note: Christopher Dillon has authored 4 books:
Landed Hong Kong (2008), Landed Japan (2010),
Landed China (2013) and Landed Global—which
includes case studies and data from more than 110
countries and territories—in 2014.
(www.landedbook.com)

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76 ASIAN PROPERTY REVIEW DESIGN
A ‘HOME-MADE
OASIS’ IN KL
Tiny Garden transports you to a magical world amid rows of
drab terrace houses in a Kuala Lumpur suburb.
Text & Photography by Benjamin K. Yong
Lots of relaxing spots. The main gate is just behind

May - June 2018
77
The outdoor dining area
Reading corner
From the outside, the house looks nondescript like
any other terrace house in this residential area
located about 2 kms from the National Zoo in
Selangor, Malaysia. But once you enter through
the side gate, you are immediately transported to a different
world – a world where you can immerse yourself with quiet
times by the koi pond or even play with the tiny dogs that
occasionally come to stay.
Coffee bar which also serves up breakfast
This is Tiny Garden, a marvel in terrace house design –
especially since the designers are not professional designers
but a family who operates a homestay. As Carmen the
daughter says, “Our family likes to Do-It-Yourself. Every
single decoration is done by our own hands.”

78 ASIAN PROPERTY REVIEW DESIGN
Pond with koi fish

May - June 2018
79
Eclectic decor with stuff from all over the world
Single room
The main lounge which overlooks the dining area outside
There is a relaxing reading corner, outdoor dining area,
koi pond, and lush garden complemented by eclectic
décor in every corner. You can’t help but get pleasantly
distracted by all the decorations. At the same time, you
feel the calm and serenity of the place. This place makes
you feel at home and you can practically stay all day long
in this pleasant environment.
Outdoor is where the action is – food is served there and
most social interactions take place there despite a very
warm and cozy indoor area. The details show how much
care and effort have been taken to make this house as cozy
and welcoming as possible.
Indeed, it is a beautiful oasis amid the hustle and bustle of
Kuala Lumpur.

80 ASIAN PROPERTY REVIEW DESIGN
BENOY
TRAVELS
THE WORLD
From a small design firm in
Nottinghamshire, UK, 71 years ago, Benoy’s
footprint now spans the entire globe
including an increasing number in Asia.
Asian Property Review interviews
Qin Pang, Director and Head of Benoy’s
Shanghai Studio.
Qin Pang
1
2
Benoy started in Nottinghamshire, UK some
71 years ago. It has now evolved into a global
design specialist undertaking many inspiring
and iconic projects. Please list out some
recently completed iconic projects in Asia.
Terminal 4, Changi Airport, Singapore (2017),
Suzhou Center, China (2017), Parc Central,
Guangzhou, China (2016) and Starfield Hanam,
Hanam, Gyeonggi, South Korea (2016).
What is Benoy’s design philosophy and how
does that translate into your works?
At Benoy, we balance creative vision with
commercial viability; we work with clients to
create iconic destinations that enrich people’s
lives, strengthen communities, enhance nature,
and deliver lasting economic value. This is
3
translated into our work in many ways, however
our aim is also to deliver world-class solutions
for the built environment.
Does Benoy have onboard or have joint
ventures with starchitects especially in projects
involving branded residences or mixed
developments e.g. Prada, etc?
Benoy collaborates with a number of design
firms, especially on larger projects which are
overseen by a consortium. In Singapore, for
example, we are working within the consortium
led by Moshe Safdie (famed for his Habitat
67, in Montreal, Quebec) to deliver the high
profile Jewel Changi Airport project. Benoy is
the Interior Design and Retail and Aviation
Facilities Planner on the development.

May - June 2018
81
Suzhou Center - Credit Suzhou Hengtai Holding Group Co
4
Benoy has a strong reputation in
regeneration projects with the firm’s
portfolio including HARBOUR CITY’s
Gala Avenue Westside in Shanghai, the
David Jones Flagship Building in Sydney
and TSUM Department Store in Kiev.
With the upcoming Nanjing cold storage
warehouse project, how will Benoy’s previous
experience help with this project?
Knowledge sharing is always vital for any
project. We are fortunate to be able to draw on
the experience and expertise of many of our
colleagues as we approach the Nanjing MCC
World project. However, all projects are unique,
it’s not about copying and pasting design
solutions from other projects, but using that
information to inform how we approach new
design challenges.
We work with clients to create iconic
destinations that enrich people’s lives,
strengthen communities, enhance
nature, and deliver lasting economic
value.

82 ASIAN PROPERTY REVIEW DESIGN
Parc Central, Guangzhou - Credit Benoy

May - June 2018
83
5
6
What are the design challenges when it comes
to regeneration projects?
Balancing the heritage aspects of the
development with the new build components
is always a challenge. We want to ensure we are
respectful and sensitive to the history of the site
whilst also celebrating a new, exciting prospect for
the future.
How much green or sustainable practices are
incorporated into Benoy’s works?
A key feature of the Benoy offer is sustainability.
We work closely with our clients and providers
of expert knowledge to deliver more sustainable
design solutions, relevant to the unique context
of each project. Responsible design practice
and sustainability is promoted by building on
experience, encouraging education, the recruitment
of new and complementary skills and, where
necessary, collaboration with external experts.
We are proud to have a portfolio which includes
numerous sustainable design credentials including
the first LEED Platinum Retail Development in
Greater China, Hysan Place.
Terminal 4, Changi Airport - Credit Benoy

84 ASIAN PROPERTY REVIEW INNOVATION
A CHINESE
‘BUTLER’
FOR CHINESE BUYERS
Singou’s ‘Butler 1’ robot is the first
of many Mandarin-speaking robots
that will be deployed worldwide by
Juwai.com to cater to international
property buyers from China.
No Mandarin speakers in your company,
yet you want to serve the increasing
number of Chinese property buyers? No
worries, a robot is coming near you which
can answer all the queries the Chinese buyer usually
asks about international properties - all in Mandarin.
The Butler 1 robot is developed by an awardwinning
Macau startup, Singou Technology Ltd.
Singou, under the auspices of Macau University of
Science and Technology is an Artificial Intelligence
(AI) and service robot pioneer which has won
an award in November 2017 at the Shanghai
International Service Robot Show.
The benefits are immense – marketers worldwide
can make do without Mandarin-speaking staff and
can scale up their operations quickly. Priced at a
mere USD2,000 each, the 1.4 meters (4’ 7”) tall
robot is very approachable and can even move and

May - June 2018
85
Carrie Law and Dr Hon at the signing ceremony in Macau recently.
approach people just like another human being, says
Dr Hon Chi Tin, Chief Executive Officer of Singou
Technology. “A robot is superior to a fixed device,
smart speaker, or smart furniture,” says Dr Hon
who is also a Guest Associate Professor of Macau
University of Science.
Recently, pursuant to an agreement, Singou has
made available its robots to Juwai.com on a trial
basis where they will be trained in dealing with
Chinese customers using Juwai’s 5-year experience
in dealing with Chinese buyers of overseas property.
Juwai.com is a leading Chinese international real
estate website.
Says Dr Hon: “Juwai.com has a large data set that
can be abstracted into artificial intelligence with the
strong experience of Singou technology and then
put to use in serving customers in smarter ways.”
At the moment, the robots are
only monolingual, speaking only
Mandarin, and are only assigned
the task of giving information to
consumers.
TRAINING THE ROBOT
Juwai will also begin distributing the Butler 1 to the
property industry and to homeowners. However, at
this stage, the company is not yet taking orders for
the robots as they are still under training. “We are
still training the AI behind the robots and at this
point are not yet taking orders,” says Carrie Law,
CEO of Juwai.com.

86 ASIAN PROPERTY REVIEW INNOVATION
During the training period, early robots will be
deployed at international property industry events
in China and in showrooms and offices in five other
countries: Malaysia, Singapore, the USA, Australia,
and Canada or the UK.
She adds that in the initial stage while training the
robots over the next few months, they expect to
deploy one robot per country. “You might say this
first handful of robots is the beachhead or initial
foothold for a much larger invasion.”
At the moment, the robots are only monolingual,
speaking only Mandarin, and are only assigned
the task of giving information to consumers.
According to Law, this is because ‘consumers don’t
want to complete sales with robots. They want the
reassurance and value of working with an agent.”
On how it would impact the website, Law explains:
“On the front end, that part of the website which is
visible to users, probably there will be no change. But
on the backend, the robot’s AI engine will need to
interact with the same systems behind the website.
That way, it can properly provide market and listing
info to the Chinese consumer while at the same time
giving the consumer’s details and needs to the agent
or developer.”
The two companies will spend the next several
months training the Singou AI engine using the
data and insights that Juwai.com has gathered
during its five years of serving Chinese international
property buyers.
The same artificial intelligence is also part of the
brain that will operate the Butler 1 when it is
deployed in the offices of international property
marketers. During the training period, early robots
will be deployed at international property industry
events in China and in showrooms and offices in
five other countries: Malaysia, Singapore, the USA,
Australia, and Canada or the UK. This experience
will provide further data and input to train the
artificial intelligence engine.
MARCH OF THE AI
Singou Technology has deployed earlier models
of robots to provide security and access control at
the premises of large facilities, such as convention
centers, universities, and transit centers.
China installed 90,000 industrial robots between
2010 and 2015, according to Machine Design
magazine. That is one-third of the world’s total and
more than the U.S, Europe, and the rest of Asia
combined, which together installed 80,000. The
International Federation of Robotics estimates that
China will install 160,000 robots next year. Most
will be deployed in factories, but service robots like
Butler 1 are being built in ever greater quantities.
Says Law of the partnership with Singou: “Singou’s
AI chatbot engine will enable Juwai.com to improve
and scale the service we provide to consumers. We
will use the AI and chatbot to crunch data, handle
basic requests, and speed processing.
“The robot is essentially a carrier that lets our AI
consumer service engine be present in real estate
sales offices anywhere in the world. The robot has the
same AI brain and intelligence as our chatbot.”
Law adds: “It’s natural that we turned to a company
from Greater China for this partnership. China plans
to be the global leader in AI and robotics by 2030
and is investing heavily in the field. China’s core
AI industries should be worth, the State Council
believes, US$50 billion by 2025. China already
deploys more robots per year than Europe, the US,
and the rest of Asia combined.”

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