By THE STAR
ASK any savvy Malaysian property investor and there is a high probability that he or she has property Down Under or in New Zealand.
This does not come as a surprise to Global Link Properties chief administrative officer (overseas properties) Norman Sia, who is a strong believer of the properties’ investment potential.
“Malaysians are very interested in investing overseas, especially in developed countries which are politically stable and have transparent policies. They do it to preserve their wealth and to diversify their investments.
“Australia and New Zealand properties are more affordable compared with Singapore, Britain and Hong Kong,” Sia said.
In addition, property prices in Australia historically doubled every 10 years due to increasing costs such as land, labour and building materials, Sia pointed out.
He said Global Link Properties had introduced not less than 500 projects to Malaysian buyers comprising three types of properties – pure residential properties, student accommodation near learning institutions and condominium hotels, which are condos by usage but leased to hotels.
“Student accommodation and condo hotel cater to investors who buy for investment return so the properties sell faster.
“The least popular, in a sense, are residential properties, as prospective buyers find it hard to make a decision so it takes longer to sell the properties,” he said.
According to Sia, investments in hotel units provide the highest returns – a minimum of 6% net per annum – especially since Global Link focuses mainly on 4 to 5-star hotels.
“This is sustainable as such returns are achievable on a 30% occupancy rate. Student accommodation also offers good returns at 4.5% net annually,” he said.
About 80% of Global Link’s clientele are people who run their own businesses as well as professionals who buy properties mainly for investment.
The balance are high net worth buyers who are not so concerned about returns but are looking for unique assets to add to their lists of properties.
“We had 200 to 300 investors last year and expect a 10% to 15% growth every year. We now have close to 200 investors this year. Sales have been boosted by a new project in Queenstown, New Zealand,” Sia said.
The Kawarau Falls Station project in Queenstown consists of 1,000 hotel apartments with a gross development value of NZ$1bil.
The project, launched in the beginning of the year, is 90% sold. It will start construction next month and is expected to be completed in 2011. Prices range from NZ$360,000 to NZ$1.5mil per unit.
Sia said about 60% of Global Link’s sales were from Australian properties and 40% from New Zealand.
He said the company had put more emphasis on properties in New Zealand in the past two years as the products there were more unique. The Lord of the Rings movies have also made the country more attractive to property investors.
“We will be looking back at Australia in the next one year as property prices there have come down and stabilised. It will be a good time to pick up properties there,” he said.
The company will launch some new Australian and New Zealand projects here: two beachfront apartment projects in Gold Coast, Australia – one in two weeks and another in a month’s time – and three projects in Melbourne – two apartment projects and students’ accommodation.
He does not believe Malaysians buying properties overseas will have any effect on the local market at all.
“Those who invest overseas have their basket full of local properties already. Moreover, overseas investors are only a small group,” he said.
Sia himself has property investments overseas. About 85% of his property portfolio is in hotel units in Australia, New Zealand, Singapore, Hong Kong and Malaysia.
“It is important to look at income-producing properties. Brick and mortar is still the best investment where our wealth can grow with rental income thrown in as well,” he added.