26 December 2012

Things to take note when Purchasing Commercial Units in Malaysia

Last few days ago, I went down to Malacca for personal matters. I seldom go to Malacca, only for vacation purpose. So I also quite surprised that I made a decision to purchase a retail shop lot in Malacca, known as historical site and tourist attraction. If you do not come and pay a visit to Malacca when you at Malaysia, you may miss a chance to know about Malaysia's history. 

Ok, so what I want to talk in this post is that, to purchase a commercial unit in Malaysia, you have to take note of several things here:

  1. Do more homework. So you have to do more thorough homework before you purchase a commercial properties. I was merely too emotional when selecting a shop lot in a commercial building. I know it is located in a prime location, but this prime location is at a small state in Malaysia. Now I have to really pray god to hope this project could run well. You have to do some homework via asking experts and visit the actual site yourself before you can make a good decision. 
    • Gross ROI - Normally I would use [(Gross Annual Rental Income - Yearly Loan Payment) / Total Invested Amount]
    • Net ROI - Normally I would use [(Net Annual Rental Income after deducted other maintenance charges and other charges - Yearly Loan Payment) / Total Investment Capital]
    • Period to Recover/ Collect Back the Investment Capital
    • Supply and Demand - Whether there is any more supplies here to be absorbed by the customers. 
    • Reputation of Developer - A good developer could save your time in managing your tenants. 
    • Location - A good location means that it can bring a lot of customers as well as "purchasing power" here.  
  2. Down payments: For locals, you have to make a 30% down payment to purchase a commercial units, be it under individual/Joint/Corporate name. For foreigners, you have to fork out 40% (For Singaporean) or 50% (For the rest foreigners) to make the down payment. 
  3. Bank Loan Facilities: tbc
  4. Legal Fees: tbc
  5. Stamp Duty Fees: tbc
  6. Title Transfer Fees: tbc
  7. Quit Assessment / Other Fees: tbc
  8.  tbc

3 comments:

  1. Hi Jack,

    With the recent fast pace development in Malacca , and also the announcement of Melaka Gateway, how did you perceive your investment in Imperio Mall 2 years ago ?

    ReplyDelete
    Replies
    1. Actually I was thinking of purchasing HDB in resale market at that point of time, but I ended up giving it up and purchased a retail lot in Malacca. I believe it is coincidence to purchase a retail lot there as I never thought Malacca is in my top watch list.

      Nonetheless, with more tourists coming to Malacca, I believe it could be a spotlight in Southern Malaysia, JB CBD in someway is lagging behind Melaka CBD (Melaka Raya) in my own opinion.

      With Hatten Square rebranding as Fashion mall as compared to IT Digitamall 2 years back, I believe that Malacca could be a shopping heaven to tourists there. (Cross Fingers).

      Last 2 years ago I bought the Hatten City Imperio Mall 2nd floor around RM2,200 psf, so if you say it can double up in 5-10 years time, it really depends on the overall market as well as how good the management in managing the mall for you. It is indeed risky and you could have to have enough holding power before the mall could attract crowd few years down the road.

      Let's pray hard to have a better Malacca in future. :)

      Delete
    2. Hi Jack,

      Thanks. I have purchased a 2nd floor unit at Imperio Mall 2 years ago with similar psf as well. Judging from all the recent development in Melaka Raya , project completion ( e.g. The Shore ) , the upcoming Element Mall, Parkson Festival Mall, more and more established brands ( e.g. Tangs , H&M, etc ) coming to Malacca, I do share the same belief that our investment 2 years ago will be a worthwhile investment ... let cross the finger ....

      Delete

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