Investment Opportunity In Taragon Kelana by pengxiang


									Investment Opportunity
   Taragon Kelana
Table Of contents
Item Subject                                                    Page
1.1    Objectives Of This Report                                1
1.2    Executive Summary                                        1
1.2a   Malaysian Economy                                        1
1.2b   Malaysian Property Market                                3
1.2c   Area Overview: PJ, Selangor                              4
1.2d   Investing In Taragon Kelana                              5
1.2e   Investment Risks                                         5
2.0    PROJECT SUMMARY AND RISK ASSESSMENT                      6
3.1    Transactions                                             8
3.2    Survey Of Competitive Schemes Under Constructions        9
3.3    Occupancy Levels                                         9
3.4    Rental Market                                            9
4.0    INVESTMENT OPPORTUNITY                                   10
4.1    Developer: Blackstone Seven Sdn Bhd                      10
4.2    Area Overview: Kuala Lumpur City                         10
4.3    Location Map                                             10
4.4    Satellite Photograph                                     11
4.5    Taragon Kelana                                           12
4.6    Shop/Office and Retail                                   12
4.7    Office Suites                                            12
4.8    Building Specifications                                  13
4.9    Parking                                                  13
4.10   Security                                                 13
4.11   Accessibility                                            13
4.12   Taragon Kelana Site Photographs                          14
5.0    FINANCIAL SUMMARY                                        15
5.1    Price Comparables                                        14
5.2    Estimated Gross Rental Yield                             15
5.3    Committed Management Costs by Developer                  15
5.3a   Taragon Kelana Management Fee                            15
5.4    Estimated Net Rental Yield                               16
5.5    Payment Schedule                                         16
6.0    END FINANCIERS                                           16
7.1    Stamp Duty                                               18
7.2    Other fees                                               18
7.3    Mortgage Application Fees                                18
8.0    LEGAL                                                    18
8.1    Buying / Land Ownership                                  18
8.2    Sales & Purchase Agreement                               19
9.0    APPENDIX 1                                               19

       Blackstone Seven Sdn Bhd brings you a premier real estate investment opportunity in
       Petaling Jaya and this information is compiled to assist you with your investment decision by
       providing you with the relevant information on the general property market for commercial
       development in and around Klang Valley as well as its possible investment returns.

1.1    Objectives of this report

1.1a   To give a general overview of Malaysia and its economy;

1.1b   To provide a general feel of the property market in Klang Valley including its recent
       performance, current demand and supply, sales, occupancy and forecasts of future trends;

1.1c   To give an insight on the development and the key details involved such as land tenure,
       rental outlook and pricing and.

       This report is prepared with the supported information obtained from third party sources or
       media reports. We cannot assume liability for the correctness and completeness of this
       information. As far as the developer is concerned, the information contained in this report
       was correct at the time it was written while some details may, however, change over time
       and the developer will endeavor, to the best of its abilities, to notify of any such changes as
       they occur. This report is dated 18 January 2010.

1.2    Executive Summary

1.2a   Malaysian Economy

       After the considerable slowdown in the beginning of the 2009, the global economy has
       started to show signs of recovery, purportedly due to the effectiveness of stimulus packages
       implemented across the globe. Initial signs of recovery began in May indicated first by the
       rise in global stock markets. The Dow Jones, FTSE 100, DAX, Nikkei 225 and Hang Seng index
       have been gradually increasing since July 2009 but have yet to surpass their respective highs.
       The United States of America’s economy grew by 3.5% in the 3rd quarter of 2009. This
       represents the first expansion within the past year. Other major economies that saw
       expansions within the 3rd quarter include that of the People’s Republic of China, Japan,
       Korea and Singapore.
                                                                         M a la y s ia - G D P 3 Q2 0 0 3 t o 3 Q2 0 0 9

        10.0 0%

         8.0 0%

         6.0 0%

         4.0 0%

         2.0 0%

         0.0 0%
                  3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 0 5 3Q 0 5 4Q 0 5 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 0 8 3Q 0 8 4Q 0 8 1Q 09 2Q 09 3Q 09

        -2.0 0%

        -4.0 0%

        -6.0 0%

        -8.0 0%
The Euro Area, the United Kingdom and the Hong Kong SAR on the other hand saw
contractions of 4.1%, 5.2% and 2.4% respectively.
(Source: Bank Negara Malaysia, Property Market Reports)

The Malaysian economy contracted by –1.2% in 3Q2009. This was a smaller contraction than
the –3.9% contraction in the second quarter of the year. Bank Negara Malaysia attributes
this mainly to positive growth in domestic demand and stabilization of external demand.
With exception of the agriculture economic sector, other economic sectors have all recorded
improved performance.

The services sector remained the main contributor with a total of RM76,352 million
representing and annualized growth of 3.4%. The manufacturing and construction
sector contributed RM36,700 million and RM4,285 million respectively to the GDP of
the third quarter whereas the real estates and business services sector contributed a
total of RM7,038 million. This represents an annualized growth of –8.6%, 7.9% and
4.9% respectively. The Malaysian Institute of Economic Research has further
predicted that the overall contraction for the year 3.3% for the year 2009.

Key Asian economies continued to rebound as at 3Q2009. The KLCI as at November 2009
surged to 1,259 points and ended with a market capitalization of RM986.28 billion with an
average turnover of RM1,301.66 million daily. As at 4Q2009 the Consumer Sentiments Index
by the Malaysian Institute of Economic Research settled to the 109.6 point threshold mainly
due to better finance conditions and a better outlook for the job and financial market.
Likewise, their Business Conditions Index as at 4Q2009 saw a rise to 118.8-point threshold.
The threshold has been above 100-points from 1Q2001 to 2Q2008 (with the exception of
4Q2004) after which it dipped below the threshold.

By January 2010, oil prices surged past US$73 per barrel. Unemployment however continued
to rise. The United States of America saw an unemployment rate at 10.00%, the Euro Area at
10.00%, France at 10.00% and the United Kingdom at 7.8%. In the Asian region India
registered the highest unemployment rate at 7.32% whereas Japan registered 5.20%, China
at 4.30%, South Korea at 3.50%, and Thailand at 1.07%, Hong Kong SAR at 4.9% and
Singapore at 3.20%. As at the third quarter of the year, there were 348,897 active job
seekers within the Malaysian market. The number of retrenched workers continued to slide
with only 2,879 workers retrenched during the period (2nd Quarter: 7,470). Additionally, the
number of job vacancies within the market increased to 474,781.

The greenback gained strength as well in the third quarter of 2009. The Malaysian Ringgit
appreciated by 1.4% against the U.S. Dollar in the first quarter, however with the depressing
credit events in the Middle East and increased debt concerns in the Euro area, the greenback
gained more strength between November 1 to December 29, 2009 and the Malaysian
Ringgit depreciated marginally against it by 0.9%. As at January 2010, the Malaysian Ringgit
was being sold at RM3.4570 against the U.S. Dollar. Inflation on the other hand moderated
further in November 2009, registering at –0.1%. Up to November 2009, exports have totaled
to RM498,622 million and total imports were worth RM392,365 million.

       In boosting investment portfolios within the country, the government has implemented
       several measures to attract and retain foreign investment. The deregulation of rules under
       the Foreign Investment Committee (FIC), liberalization of 27 service sectors to foreign
       investors, relaxation of rules under the Malaysia My Second Home Programme (MM2H) and
       the removal of the 30% bumiputra equity in newly listed companies have made investment
       conditions less restrictive. These moves are set to have a positive impact on the economy.

       Under Budget 2010 presented in October 2009, the government has proposed several
       measures to further stimulate the economy. Some notable measures introduced include:-

          Enhancing domestic investment and encouraging local companies abroad to remit their
          profits and reinvest in the country.
          Facilitate registration of businesses and expedite issuance of Development Orders.
          Simplify the granting of Permanent Resident Status
          The stock market will be further liberalized to enhance its efficiency as well as attract
          domestic and foreign investments. Measures here include allowing 100% foreign equity
          participation in corporate finance and financial planning companies.
          Imposition of a 5% tax on gains arising from disposal of properties effective January 1,
          2010. However, this was subsequently amended to exempt owners that have held their
          properties for more than five (5) years.
          Reduction of individual income tax from 28% to 27%, and maximum corporate finance
          from 27% to 26%. Employment income for workers that reside and work in Iskandar
          Malaysia will be imposed a tax rate of 15% only. Personal relief for all will be increased
          to RM9,000/-.
          Allocation of RM200 million under the Ministry of Housing and Local Government to
          revive abandoned housing projects.
          Establishment of the 1Malaysia Retirement Scheme to be administered by EPF.
          (Source: Colliers, Jordan Lee and Jaafar Sdn Bhd)

1.2b   General Property Market Overview

       The property market experienced a relatively small decline through 2009. There were still a
       number of launches of commercial schemes within the market. According to Bank Negara
       Malaysia, the construction sector registered a 7.9% growth in 3Q2009 as compared to a
       2.8% growth in 2Q2009. It is mainly attributed to implementation of projects under the
       stimulus package as well as on-going construction of purpose built office space. The civil
       engineering segment provided further support reflecting additional progress in the
       implementation of infrastructure projects.

       In the third quarter of the year the number of new sales and advertising permits increased
       to 244. The number of renewals on the other hand saw a drop of 14% (q-o-q) with 391
       permits given out. The number of housing approvals on the other hand saw a rather steep
       drop to 20,413 or about 25% (q-o-q). However, in the third quarter of the year, the value of
       loans approved for construction amounted to RM4,323 million, an increase of about 15% as

       compared to the preceding quarter. The number of outstanding loans to the construction
       sector increased in tandem to RM35,151 million

       Up to November 2009, a total of 819 new advertising and sales permits were issued, 87,697
       housing approvals were granted and RM35,446 million were outstanding loans to the
       construction sector.

       On the developers’ front, to boost sales several measures introduced to attract buyers which

             5/95 installment plan – A promotional plan between banks and developers where
             purchasers only need to pay 5% for down payment and the balance is payable only upon
             completion of the development. However, it was noted that the purchasers have to
             obtain their end financing facilities as part of the plan and subject to terms and
             conditions. The 5/95 package has also been tied together with other various promotion
             Move in, pay later – A promotional plan, where the buyer only makes a 10% down
             payment and the balance is payable 24 months after vacant possession.
             Fee Subsidies – Developers pay on behalf of their purchasers for various fees such as
             legal fees and stamp duties.
             Balloon payment scheme – For an initial sum, the buyer can move into a completed
             development. The interest would be based on 50% of the loan amount to be serviced
             over the first 5 years. The balance 50% would have to be paid in full upon the end of the
             tenure or transferred over to the borrowers’ children.

       In accordance with stimulating the property and investment sector, the government has
       further liberalized rules pertaining to the Malaysia My Second Home (MM2H) programme.
       Amongst the key regulations relaxed include extending the Social Visit Pass to a maximum of
       10 years, where the applicant’s spouse now have the option of applying under the Spouse
       Program or MM2H, the age of dependent children has been increased to 21 years, an ID
       card will be issued for applicants with a permanent address and agents are no longer
       required for applications under this programme.
       (Source: Colliers, Jordan Lee and Jaafar Sdn Bhd)

1.2c   Area Overview: Petaling Jaya, Selangor

       Petaling Jaya (commonly called "PJ" by locals) is a Malaysian city originally developed as a
       satellite township for Kuala Lumpur , comprising mostly residential and some industrial
       estates. It is located in the Petaling district of Selangor with an area of approximately 97.2
       km². On 20 June 2006, Petaling Jaya was granted city status. Since then, Petaling Jaya has
       been commonly known as the most developed non-capital city in Malaysia.

       Petaling Jaya is home to more than one million inhabitants and of which 67% are working
       population. This does not take into account the total population of the Kuala Lumpur-
       Petaling Jaya conurbation which would have resulted in a total population of 1.5 million. The
       high concentration of young growing demographic has spurred sustained commercial
       activities over the last thirty years creating demand for good quality commercial space. It is

       flanked by another two very large townships of Shah Alam and Subang Jaya which are also
       on a strong growth path for commercial activities with combined population exceeding 1

1.2d   Investing In Taragon Kelana

       Taragon Kelana is located along Lebuhraya Damansara-Puchong (LDP), a modern intra urban
       highway which connects townships like Kepong, Bandar Sri Damansara, Bandar Utama, and
       Taman Tun Dr. Ismail up in the north to Petaling Jaya, Sunway, Subang Jaya, Puchong and
       Shah Alam down at the south. From LDP, it is only 10 and 20 minutes away from Petaling
       Jaya New Town and Kuala Lumpur city centre respectively. This prime business location
       makes it a natural traffic magnet due to its prominent visibility drawing close to half a million
       vehicles driving through every day.

       Taragon Kelana is within the established and burstling commercial suburb of Kelana Jaya in
       PJ and is adjacent to the popular Giant hypermarket. Frontage is level with LDP but lower
       than Jalan SS6/6 at the back of the land, thus has advantage of double frontages. The
       immediate surrounding area is flanked by mature commercial development and on-going
       businesses with several blocks of 4 to 6 storey shop offices. Many of the prominent national
       brands like KFC, Public Bank etc are occupying some of the shops. Situated parallel across
       Jalan SS6/6 is a major campus of University of Tun Abdul Razak (UNITAR) which houses
       several thousand students. The present road side parking on Jalan SS6/6 will be removed
       under MBPJ‘s approval, allowing better traffic flow.

       Taragon Kelana features an office and retail block resembling a modern architectural outlook
       with a pleasing landscape and a water feature piazza. The development will consist of a total
       of 7 blocks of 5 1/2 storey shopoffice, 1 block of 7 ½ storey shopoffice, five (5) retail lots on
       the ground floor of a 16 storey office block. The standard office suites in the office block
       range from 1,054-1,388 sq ft with an average price of RM435 psf. Prices range from
       RM460,000 – RM643,000 per unit

1.2e   Investment Risks

       Risk Comments
         Slowdown in economic A slowdown in GDP growth from continued global uncertainties
         growth                    may result in slower take-up and upgrading of grade A office
                                   space in Petaling Jaya.
         Oversupply of office An easing of government restrictions of commercial office space
         space                     may result in over supply in the future.
         Rental pressure           Due to weak demand and new supply of space entering the
       The risk factors could however be mitigated by the government's recent liberalization on
       economic policies targeting the services and financial sectors. With the relaxation in policies,
       it is expected to promote foreign direct investment, with more foreign interests in the
       commercial property sector and the improved take-up of commercial and office spaces in
       Klang Valley. Furthermore, the hikes in rental rates in most office buildings in Kuala Lumpur
       has pushed many corporations, companies and businesses to relocate their offices and

      backroom operation to PJ significantly over the last few years. A good example was the
      purchase of Dijaya building in PJ last year by TA Enterprise Bhd to move its backroom
      operation to lower rent location while preserving the rental rates in its building Menara TA
      in KL city.


      Risk Profile                                                          Low 1
      Recent Capital Growth                                                 High 2
      Anticipated Rental Yield                                              Medium
      Ownership Title                                                       Freehold
      Financing                                                             Up to 80% (subject to terms)
      Rental Yield                                                          Approximately8.4% gross 3
      Price Range                                                           RM460,000 - RM643,000
      Transaction costs*                                                    Low

      *(Transaction costs relate to all additional costs involved in acquiring the property, i.e.
      stamp duty,
        Legal fees etc as percentage of the sale consideration)
          0 - 5% Low
          5 - 10% Medium
          Over 10% High

      The above is only for your guidance and easy reference only. The Developer advises that
      you read the full report before making any decision to invest. It also strongly recommends
      that you seek independent financial, legal and tax advice to your satisfaction before
      making any investment decision.

      1   Based on CLSA Market Report for Grade A CBD office space within Kuala Lumpur
      2   Based on Knight Frank Research on per square meter rental prices for the area.
      3   Based on Knight Frank Research on per square meter rental prices for the area.


      The office sector has not started to show signs of cooling down in spite of speculations
      towards lower rental values and capital values. Rental values within the Klang Valley have
      generally remained stable and developers are still in the midst of proposing and launching
      new office developments. The occupancy rates of purpose built office space as at 3Q2009
      still remain healthy. In suburban Selangor closer to the Kuala Lumpur city centre, the
      occupancy rates of purpose built office space registered more than 90% with the exception
      of Ampang (85.1%), Petaling Jaya (70%) and Seri Kembangan (68.0%).

      It is expected that the commercial property market within suburban Selangor will continue
      to remain steady in the first half of 2010 as there is an affinity for businesses and
      establishments particularly those that do not need a ‘Kuala Lumpur’ address to relocate to
      the suburban portions of Kuala Lumpur. This is because rental rates are relatively cheaper

    outside the city centre. Additionally, it is also due to traffic and congestions concerns that
    are present in Kuala Lumpur.

    The supply of 5 to above 6½-storey shop units and purpose built office space from year
    ending 2008 to 3Q2009 is provided below:-

    Table 3.1:
                    Supply of selected commercial properties in the District of Petaling as at 3Q2009
                                                                                 No. of units
    Type                                                                                                    2008-
                                                           2008            2Q2009         3Q2009
                                                                                                        (No. of units)
    5 to 5½-storey shop                                 307              364             364            57
    6 to 6½-storey shop                                 37               37              37             0
    Above 6½-storey shop                                0                0               24             24

                                                  Purpose built office
(                                                                                Total space
S                                                                              (square metres)
    Location                                                                                       Occupancy rate
r                                                       2008             2Q2009         3Q2009      as at 3Q2009
c                                                                                                        (%)
e   Petaling Jaya                                    802,301        885,517           941,294      70.0
    Subang Jaya                                      122,961        124,202           124,202      94.0
P   Sunway City                                      23,854         23,854            23,854       95.0
r   Shah Alam                                        389,096        388,405           388,405      92.2
p   Bandar Utama                                     22,931         22,931            22,931       100.0
e   Kelana Jaya                                      179,735        180,275           180,275      90.6

(Source: Property Market Report 3Q2009)

      The table below shows the incoming and new planned supply for selected commercial
      properties within the District of Petaling as at 3Q2009:-

      Table 3.2:

        Incoming and planned supply of selected commercial properties in the District of
        Petaling, 3Q2009
                                                                            Incoming            New Planned Supply
                                  Type                                    (No. of units)          (No. of units)
        5 to 5½-storey shop                                    232                         0
        6 to 6½-storey shop                                    188                         0
        Above 6½-storey shop                                   118                         23
                                                         Purpose Built Office space
                                Location                                   Incoming             New Planned Supply
                                                                       (square metres)            (square metres)
        Petaling Jaya                                          89,903                      0
        Subang Jaya                                            87,740                      0
        Sunway City                                            0                           0
        Shah Alam                                              8,515                       0
        Bandar Utama                                           0                           0
        Kelana Jaya                                            0                           0

      (Source: Property Stock Report 3Q200)

3.1   Transactions

      In the State of Selangor a total of 3,185 commercial properties were transacted as at 1H2009
      with a total value of RM2,008.78 million. This represents a decrease of about 4% and 12%
      respectively, half year on half year basis. By locality, the District of Petaling registered a total
      of 1,342 transactions worth RM1,054.90 million. This represents a decrease of about 6% and
      19% respectively, half year on half year basis.

      The table below illustrates the breakdown of the total volume and value of transactions for
      selected commercial properties within the District of Petaling as at 1H2009:-

        Transaction Volume and Value of Residential Properties in the District of Petaling, State of Selangor
                                                                  Volume                              Value
                                                                                                  (RM million)
                                                         2H2008            1H2009            2H2008          1H2009
        5 to 5½-storey shop                           2                13                 2.80             12.08
        6 to 6½-storey shop                           0                8                  0.00             5.37
        Shop unit / retail lot                        226              231                99.38            109.94
        Office lot                                    371              427                143.82           163.93
        Other commercial properties                   822              663                1,064.31         763.58
        Total                                         1,421            1,342              1,310.31         1,054.90

      (Source: Colliers Jordan Lee and Jaafar Sdn Bhd)

3.2   Survey Of Competitive Schemes Under Constructions As Well As Competed And Occupied –
      Stratified Shop/Offices

            Name of Project                   Location              Office       Price / Asking price
                                                                    (Floor)            (RM) psf
       Glomac Damansara              SS20, Jalan Damansara          Upper                510
       PJX                           Taman Jaya                     Upper                615
       VSQ                           Jalan Utara                    Upper             473 - 550
       PJ5 SOHO                      Kelana Jaya                    Upper                550
       Oasis The Capital Block E     PJU01, Ara Damansara           Upper                450
       PJ8                           Jalan Barat                    Upper                550

3.3   Occupancy Levels

      During the first half of 2009, office occupancy levels faced slight downward pressure as the
      global financial crisis took hold and corporate spending began to decrease on a global scale.
      Companies decided to postpone expansion plans, however, occupancy rates were not
      impacted as hard as expected, with overall KL occupancy rates sitting at 83% compared to
      the 2H 2008 rate of 85%. It is important to note that KL City prime office occupancy rates
      were recording an average occupancy of 97%, unchanged from 2H 2008. This high
      occupancy level is due in part to the limited new supply of prime office space as well as the
      fact that tenancies are locked in.

      Buildings that have been taken up for owner occupation include Lot C, KLCC (to be occupied
      by Petronas) and HSBC Annexe (part of the expansion of the existing HSBC headquarters).

3.4   Rental Market

      Grade A prime office buildings in the KL Golden Triangle and the KLCC locality are still
      fetching average rental values of between RM7 psf and RM9 psf due to the high occupancy
      levels. The average rental for the KL City area is around RM6 psf foot while the decentralized
      KL area is now getting an average rental of RM4.50 psf
      Selected Prime Office in PJ Asking Rentals

                      Building Name                                 Asking Gross Rental
                                                                     (RM psf/month)
       PJ8                                                              4.30 – 4.80
       Amcorp Business Suites                                           3.80 – 4.30
       Menara LYL                                                          3.80
       Jaya One                                                         2.85 – 3.15
       Jaya 33                                                          2.00 – 2.40
       Kelana Business Centre ( excl services)                             2.80

      Office rental values in Petaling Jaya and Kuala Lumpur as a whole are still one of the lowest
      in the Asian region, a factor that is likely going to attract foreign companies seeking space for
      business expansion in Asia.


      Taragon Kelana
      Petaling Jaya, Malaysia
      Development Overview of Taragon Kelana

4.1   Developer: Blackstone Seven Sdn Bhd

      The developer for Taragon Kelana, Blackstone Seven Sdn Bhd is a 100% subsidiary of
      Allstones Group Asia (AGA). AGA is in the business of property development, investment and
      real estate services in South East Asia. It is also probably the biggest developer of distressed
      projects in Malaysia in terms of project values. Its profound understanding of the local
      property market fundamentals and trends help assure superior risk-adjusted returns to its

      For a list of some of the group’s completed projects please visit our website at

4.2   Area Overview: Kuala Lumpur City

      Taragon Kelana is located in Petaling Jaya at the western periphery of KL City and is only 30
      minutes away from the city centre. The distinctive landmark is highly accessible via major
      highways such as the Federal Highway, MRR2, NKVE, and LDP including the various networks
      of roads serving the two major cities. This prime business location makes it a natural traffic
      magnet due to its prominent visibility that draws the attention of approximately half a
      million cars driving through every day along LDP.

4.3   Location Map

4.4   Satellite Photograph
                             Taragon Kelana

4.5   Taragon Kelana

      Anticipated Completion Date: 3rd Quarter 2011
      Tenure         : Freehold
      Type           : Prime Grade

                                                                        Taragon Kelana features an
                                                                        office and retail block
                                                                        resembling        a     modern
                                                                        architectural outlook with a
                                                                        pleasing landscape and a
                                                                        water feature piazza. The
                                                                        development will consist of
                                                                        a total of 7 blocks of 5 1/2
                                                                        storey shopoffices, 1 block
                                                                        of 7 ½ storey shopoffice,
                                                                        five (5) retail lots annexed to
                                                                        a 16 storey office tower.

      The eight (8) blocks of 5 ½ storey to 7 ½ storey shopoffices are each installed with individual
      passenger lifts having frontages of 24 ft to 30 ft wide and a depth ranging from 40 ft to 62 ft.
      The built-up areas are from 8,096 sq ft to 11,207 sq ft. All ground floor lots enjoy dual
      frontages, onto the main internal access road Jalan SS6/6 and open onto the landscaped
      piazza with water feature.

      The five (5) retail lots are located on the ground floor with sizes ranging from 702 sq ft to
      1,647 sq ft.
      The office suites in the office block are located from Level 7 to Level 13 while Level 13a
      houses the Penthouse unit. Each floor comprises (ten) 10 separate office suites with the
      ideal sizes from 1,054 sq ft to 1,388 sq ft.

4.6   ShopOffices and Retail
      The eight (8) blocks of
      shopoffices are FULLY SOLD
      while there are only limited
      units left available for the
      retail lots. Please contact our
      office for more information.

4.7   Office Suites
      The office block, named
      Menara Taragon has 10
      different types of offices
      suites on each level. The
      prices       range      from
      RM460,000 to RM643,000 per unit depending on the type, size and the floor they are
      situated on with an average price of RM 435 psf.

      The Penthouse on Level 13a has an area of 7,061 sq ft.

4.8    Building Specifications

       A complete set of unit specifications can be found in Appendix 1.

4.9    Parking

       There are 323 parking bays and 156 motorbike parking for customers and tenants. They can
       be rented out on a
       seasonal basis. Tenants
       can rent the parking bays
       directly    from      the

4.10   Security

       Access to the office floors
       in Menara Taragon will be
       controlled by electronic
       card access system and
       protected with active
       security systems that also
       include CCTVs and panic
       buttons. Security guards
       patrol the premises on a
       24 hours basis.

4.11   Accessibility

       The project is strategically located in the midst of an established commercial centre of SS6,
       Kelana Jaya and is surrounded by matured housing estates on the western part of Petaling
       Jaya. Fronting onto the LDP, accessibility to and fro from Taragon Kelana to Damansara,
       Kuala Lumpur, Shah Alam, Puchong, Cyberjaya, Putrajaya is convenient via the various
       networks of highways interchanged to LDP. It is also easily accessible via NKVE a major traffic
       connection to the entire Klang Valley from the Kelana/Glomac Business Centre.

4.12   Taragon Kelana Site Photographs

        View opposite Taragon Kelana.                                                              13
4.12a   Site Photographs

Giant hypermarket is adjacent to Taragon

                                           Existing view of the site.

4.12b Site Plan


5.1    Price Comparables

       The PJ commercial property market has seen increased activity through 2008 and 2009.

       Table 5.1a Showing Average Purchase Price of Office Suites over 2008 and 2009

            Building Name                   Location                       Average Price psf
        PJ8                      Jalan Barat                                     550
        PJX                      Taman Jaya                                      445
        VSQ                      Jalan Utara, Section 14                         501
        Glomac Damansara         SS20, Jalan Damansara                           510
        PJ5 SOHO                 Kelana Jaya                                     450

        Development Average                                                       491

          TARAGON KELANA                                                          407

5.2    Estimated Gross Rental Yield

       Given rental prices per square foot achieved during 2009 it is assumed that units in Taragon
       Kelana will achieve a gross rental yield of approximately 8.4%.

       This is based upon the prevailing market rental and sales transaction of similar properties in
       the vicinity.

            Unit Price (RM)            Unit Size           Est. Rent psf p/mth          Yield (%)

               460,000                   1,076                    3.00                    8.4

5.3    Committed Management Costs by Developer

5.3a   Taragon Kelana Management Fee

       The Developer has committed that management costs will be approximately RM 0.25 psf for
       at least 2 years. As required under The Common Property (Maintenance and Management)
       Act 2007, pending the issuance of the strata title by the Department of Land and Mines, a
       Joint Management Body has to be established through a voting process within one (1) year
       from the date of handing-over the keys. In this way, owners will have the opportunity to be
       involved in the day-to-day management of the common area or to retain the developer of its
       agent for the purpose. In which case, the commitment of the developer on the maintenance
       will remain throughout the 2 years.

5.4    Estimated Net Rental Yield

       The estimated net yield is calculated at 7.66% after deducting the service charges, and
       sinking fund .

                    Estimated Net Rental Yield                                   RM

       Unit Price                                                            460,000.00
       Est. Monthly Rental at RM3.00 psf                                      3,228.00
       Est. Monthly Maintenance fee at RM0.25 psf                              263.50
       Est. Monthly Sinking Fund Costs at RM0.03 psf                           31.60
       Est. Monthly Net Rental Income                                         2,932.90

                           Est. Net Yield                                      7.66%

5.5    Payment Schedule
       For a complete breakdown of payments due to the developer and estimated payment dates
       you may refer to Schedule Sixth of the standard Sale & Purchase Agreement by the
       developer’s lawyers, Messrs SN Fam & Co.


       Eligible purchasers can apply financing up to 80% of the purchase price subject to individual
       credit evaluation. Maybank, CIMB, Ambank and Public Bank are the main end financers for
       Taragon Kelana. The financial institution offering the mortgage loan product reserves the
       right to determine the eligibility for the loan and may revise terms through the course of the
       application without notice.


       Total buying costs in Malaysia are low when compared to purchasing property in other
       countries. We have estimated below the likely costs incurred when purchasing a unit to the
       value of RM500,000 (USD141,865), the threshold value before any foreigner can buy any
       commercial properties in Malaysia.

7.0a   Sale and Purchase Agreement

       The developer will absorb the costs incurred with drawing up the Sale and Purchase
       Agreement. However there are several additional fees you will be liable to pay in order to
       complete the purchase process.

7.0b   State Authority Consent

       All foreign purchasers of commercial property are required to complete a State Authority
       Consent form. This is expected to take approximately 4 weeks for approval from date of
       submission The fee from the lawyers to complete these forms is estimated at approximately
       RM900 (USD255).

7.1    Stamp Duty

       This is payable upon issuance of strata title (normally two-three years after completion). The
       second purchaser/transferor will pay the stamp duty in the event the property is
       transferred/sold before the issuance of the strata title.

       Value of Property Percentage                                           Amount of Purchase Price Due
       First RM100,000 of purchase price                                              1%
       In excess of RM100,00 but not exceeding RM500,000                              2%
       Any amount excess of RM500,000                                                 3%

7.2    Other Fees

                           Description                                            Amount in RM

        Stamping fee (per document)                                                      10
        Adjudication fee                                                                 10
        Search fee                                                                       60
        Registration fee                                                                 100

                               Total                                                     180

       There are several other minor fees payable and are listed below with the estimated prices.
       Some of the above costs are estimates and are liable to change from time to time.

7.3    Mortgage Application Fees

       Purchasers who plan to finance their property purchase will incur legal fees and stamp duty
       when applying for mortgage finance. A description of these fees is detailed below.

7.3a   Loan Lawyers Fees

       Lawyers are required to draw the legal documentation once the financial institution has
       approved your mortgage. The Bar Council guidelines clearly state that there should be no
       discounts on fees, and they follow the rates as follows:

       The link to the official document of the Solicitor’s Remuneration Order 2005 is:,com_docman/task,doc_download/gid,545/Itemid,1/mode,view

       The solicitors Messrs SN Fam & Co will be drawing up the SPA documents for Taragon
       Kelana. They have also agreed to draw up and submit the legal documentation relating to
       your mortgage. Their details are available upon request. This service will be an additional
       cost to the purchaser.

7.3b   Stamp Duty

       Stamp Duty amounts to 0.5% of the mortgaged amount and there are also minor additional
       fees for deed of assignment, Power of Attorney, stamp fee, GST( if implemented) etc which
       are to be borne by the purchaser. The amount charged is dependent on the amount of the


                    Purchase Price say                                RM 501,110

                         Mortgage                                     RM 350,777

                Amount of Stamp Duty Fee                               RM 1,754

7.3c   Registering end financier on strata title

       Upon issuing the strata title the lawyers are required to submit documents registering the
       end financier interest on the property. This fee is approximately RM100- RM200.

8.0    LEGAL

8.1    Buying / Land Ownership

       Due to recent FIC guideline changes, FIC approval is no longer needed for property valued at
       RM20 million or below. The Foreign Investment Committee will only process transactions
       involving the dilution of bumiputera interests and/or government interests in property
       valued at RM20M and above. None of the units being offered by the developer exceed this

8.2    Sale & Purchase Agreement (SPA)

       Purchaser of Taragon Kelana project will be required to pay a sum equivalent to RM2,000 as
       earnest deposit (non-refundable) upon booking of any office suite and to complete the
       standard booking form.

       Within fourteen (14) days, the Purchaser is to execute the SPA document prepared by the
       developer’s lawyers, Messrs SN Fam & Co.

       There is, however, no restriction on the buyer in terms of which lawyer they wish to
       represent them. Should any buyer wishes to have a lawyer represent them to handle this
       process and inspect the document; they can contact the local Malaysian Bar Council for
       assistance at Any appointment of independent lawyer by
       the purchaser to act on his behalf will be at his own cost.

       The fee for the SPA is borne by the developer; except that the purchaser will have to bear
       the preparation and application cost, printing and delivery charges, for the State Authority
       Consent Form.

      All other costs relating to the purchasing of the property and mortgage application will be
      borne by the purchaser. A copy of the SPA is available for any prospective buyers to review
      upon payment of the earnest deposit.

9.0   APPENDIX 1:-

      Building Specifications


The information included in this document and other documents is provided by Blackstone Seven
Sdn Bhd for your information only. Such information is intended as a guide and for information
purposes only and does not constitute an offer or an acceptance to invest. It is recommended that
you seek independent tax, legal and financial advice to your satisfaction before making any
investment decision. Blackstone Seven Sdn Bhd does not and cannot guarantee the accuracy of this
information. You should not rely on such information as your sole means of making a decision.
Warning: Property values and rental yields can fall as well as rise.


      Sales Office
      2A-1,Jalan SS6/6,
      Kelana Jaya,
      47500 Petaling Jaya.
      Tel/fax : 603-7805 7162
      email :
      website :

      Corporate Office
      B-13A-9, Block B, Level 13A,
      Unit 9, Megan Avenue II,
      12 Jalan Yap Kwan Seng,
      50450 Kuala Lumpur
      Tel : 603-2711 9798
      Fax : 603-2161 9798
      email :
      website :

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