He admires Bruce Lee and Michael Jackson for their focus, dedication and professionalism. He is a marketing-man turned property-man. Trained in America, he now plies his trade in Malaysia. He used to support property developers market their products, but, with the Swhengtee Real Estate Investors Club, he and his co-investors are now very much into property dealings themselves and are looking for good properties to buy.
The Club is the first of its kind in Malaysia. What motivated Gavin Tee to form the Swhengtee Real Estate Investors Club is his passion for sharing the knowledge he has gained in the property market. But like everything else, for long term sustainability, the Club must turn a profit. Its business modus operandi is “Buying Property in Bulk”. The Club networks like-minded property investors, organizes them into a formidable buying group and leverages their considerable pooled resources into a force that usually help them transact property deals on terms that are more attractive than any one individual can achieve.
Thus, the Club recently managed to acquire a residential property in Bukit Ceylon in Kuala Lumpur and an office tower block, called the VSQ that is due to be completed in 2012, located in Petaling Jaya, Selangor.
Gavin feels that 2010 to 2020 will be a golden era for property in Malaysia. Property prices in Malaysia for the past two years have lent credence to this positive outlook of his. But like any retail business, property is all about location, location, location. Besides Kuala Lumpur, Gavin likes properties in Klang, Muar, Ipoh, Kuantan,Cyberjaya, Iskandar Johor, Melaka, Pulau Pinang and Kota Kinabalu. The Club’s property acquisitions in the Klang Valley indicate where the prime investment locations are. “Prospective investments must balance risks against benefits, and a good Return On Investment (ROI) for a property is at least 10% per year,” says Gavin.
Another area that Gavin also likes is tourismrelated properties. “It can be specific hotels and resorts, or property developments catering to foreign investors like many in Melaka. Melaka combines attractive property investments with enlightened public policies that are especially alluring to Singaporeans, and Melaka is only one to two hours drive from Singapore,” he adds. He also recommends Pulau Pinang and Kota Kinabalu in Sabah.
“The massive Mass Rapid Transport project, which is part of the Economic Transformation Program of the government in the Klang Valley will also be a major boost to the property sector in Kuala Lumpur,” says Gavin. He sees the stretch from Taman Maluri in Cheras to Kuala Lumpur Sentral to be especially beneficial to existing property owners. “Properties in the Bukit Bintang area and the stretch from Cheras to the town of Kajang will also reap the rewards from the MRT development,” he adds.
The MRT project for Gavin reflects the globalization and urbanization trend that is occurring all over the world. As countries climb the economic ladder, urbanization accelerates and the major metropolises around the world
require massive and rapid investments in transportation infrastructure to cater to the influx of workers. “Kuala Lumpur will become similar to New York City or London, where efficient and comfortable public transportation makes urban living a unique experience and makes a city exude its own cultural ambience,” says Gavin.
When asked to comment on the recent budget 2012 announced by the Prime Minister, Gavin has this to say, “It had some goodies for the property sector. One good piece of news is on the Real Property Gains Tax. Instead of
increasing this tax to 30%, the government adopted a 5% to 15% tax schedule for the disposal of properties to dampen speculation. This new formula will not adversely affect the property market too much.”
On the recent announcement by the Prime Minister that the government will play a major role in construction of affordable residential properties on government land, Gavin believes it will make housing affordable for the Rakyat, especially to first-time buyers and to those living in the urban areas, where housing can be very expensive. “Land costs which are at 20%-25% of total costs is the single biggest item for prices of properties,” says Gavin. “With lower land costs, developers can provide higher quality building materials and better-designed housing,” he adds.
Gavin also supports the increasing move by Malaysian organizations and companies recently to acquire foreign properties or develop foreign projects. “The Employee Provident Fund and companies like SP Setia, Mah Sing and UEM have taken advantage of depressed property prices and favorable exchange rates in London, for example,” he says.
Gavin also likes property investments in the United States, the country where he had obtained his university degree. “But risks, like in any foreign forays, will be especially pertinent, and further research and careful evaluation will have to be done,” says Gavin. And he thinks the United States-based investors will have advantages over foreigners because of their proximity to their investments and being indigenous to the market. “The property market is attractive over there because it is very depressed and has more room to depreciate further, and the current US Dollar exchange rate is advantageous,” he adds.