october 2oo8

pp9309/12/2008(020070)

towards sustainable development

Construction Industry Master Plan (CIMP) 20062015:

The Way Forward for the Construction Industry

The Construction Industry Development Board (CIDB) Malaysia organized a briefing on the Construction Industry Master Plan (CIMP) to REHDA members on 16 October 2008. CIMP is a 10-year plan to motivate, drive and change the mindset of the industry to be more resilient and robust in facing the era of globalization and to chart the future direction of the industry towards becoming a world-class, innovative and knowledgeable global solution provider.
Way Forward for the Construction Industry
There are many challenges facing the industry today including enhancing quality and productivity besides high labour and material prices, inefficient and ineffective methods and practices, inability to attract and develop local workforce, inability to provide total integrated solutions and difficulty in securing timely and adequate funding. The establishment of CIMP, highlighting the need for a paradigm shift for the industry is indeed timely to address these challenges. CIMP is developed to transform the industry to: be more efficient and productive in delivering high quality products and services; adopt a more consolidated and collaborative approach; move towards being more committed to environmentally sustainable development; move from being labor intensive to a knowledge-based and innovative industry to continuously seek improvement; and be a wealth generator/quality lifestyles for domestic consumption.

Structure of The CIMP

The Master Plan has 7 Strategic Thrusts (ST) and 8 Critical Success Factors (CSF). The CSF are identified as important elements to navigate the industry in areas that require focus to bring the Malaysian Construction industry to be among the best by 2015. In order to achieve the overall strategic direction, the 7 Strategic Thrusts developed are:

Strategic Thrust 1 Strategic Thrust 2 Strategic Thrust 3

Integrate the construction industry value chain to enhance productivity and efficiency Strengthen the construction industry image Strive for the highest standard of quality, occupational safety and health and environmental practices Develop human resources capabilities and capacities in the construction industry Innovate through research and development and adopt new construction methods Leverage on information and communications technology in the construction industry Benefit from globalization including the export of construction products and services
continued on page 6

Strategic Thrust 4 Strategic Thrust 5 Strategic Thrust 6 Strategic Thrust 7

2 | division / announcement editorial

Access to Affordable Financing

contents
cover story
> Construction Industry Master Plan (CIMP) 2006 2015: The Way Forward for the Construction Industry 1, 6 & 7

The Key to Industrys Survival

editorial
> Access to Affordable Financing The Key to Industrys Survival 2

with all indicators pointing to a slowdown, the lackluster market reported

in NAPICs Second Quarter 2008 Property Market Status Report was no surprise to the industry. In fact the situation may have worsened since, with more potential buyers holding back, adopting a wait and see attitude, at least until market uncertainties clear off. Unfortunately, it looks like it will be quite awhile before market confidence can be restored. Meanwhile, it is crucial that private investment and interest in the property market, particularly the housing sector, be further promoted. Towards this end, the need for easier access to a more affordable financing for the housing sector, both for bridging and end financing cannot be over emphasized. It is proven in previous downturns that the housing and property industry is the industry that will help generate domestic growth. As such REHDA has urged Bank Negara Malaysia to increase lending activities to the broad property sector by all financial institutions with regards to bridging finance, project finance and housing loans irrespective of categories of houses. A dedicated financing quota for the housing sector should be set aside to facilitate this measure and restrictive drawdown requirements should be relaxed. The Association has voiced out this proposal at various forum and discussion as it feels that such a move will not only impact the industry positively but will also provide the much-needed lever to generate domestic growth to support the Malaysian economy and stir interest towards property purchase. In the mean time, the slowing economy is also the best time to take stock of the industrys progress, as well as examine its strengths and weaknesses. The Construction Industry Master Plan (CIMP) has identified seven strategic thrusts to move the industry forward. But the Master Plan itself, a 10-year (2006 2015) planning blueprint for the industry, as it is, is already 2 years behind in its implementation. It may also take some time before the master plan is fully translated into action and programs, by which time half of the 10-year tenure would already be over. Whilst as a document the CIMP is comprehensive, its relevance to the industry and its stakeholders will be the key factor to its success. The real challenge for the CIMP will be in ensuring that the timely and effective implementation of such recommendations are relevant to the needs of the industry, and will not be overtaken by events as a result of delayed execution. For now, it is access to financing that is critical to help the industry survive the current economic slowdown.n

announcement
> Updates on Steel Bar Prices 2

special report
> Property Market Status Report Q2 2008 4

rehda institute
> Training on Professional Selling Techniques and After Sales Services 8

branch news
> Subang Jaya Zone Members Get-Together > Hari Raya Open House 2008 > Press Conference on Bumiputera Quota > Dialogue Session with Pahang MB 9 9 9 9

rehda diary
> October 2008 10

editorial committee
chairman
Dato Michael KC Yam

members
Datuk Eddy Chen, Ms Ng Kuai Heng Cik Rusnani Abd Rahman, Pn Aslinda Mohd Noor Ms Lai Jia Weng, Cik Noorliza Abd Latiff

rehda bulletin is published by

Real Estate & Housing Developers Association Malaysia No. 50G-3, 50H-3, 50I-3, Kelana Mall Jalan SS6/14, Kelana Jaya, 47301 Petaling Jaya, Selangor Tel: 03-7803 2978 Fax: 03-7803 5285 03-7805 1206 E-mail: secretariat@rehda.com Website: www.rehda.com

registered address
No. 2c, Jalan SS5D/6, Kelana Jaya 47301 Petaling Jaya, Selangor

Updates on Steel Bar Prices

the Malaysian Iron & Steel Industry Federation (MISIF) has advised that steel
bar prices per metric ton to distributors are as follows: November 2008 (between rm2,850 to rm3,000) These prices however depend on sizes and are on cash terms for delivery within Peninsular Malaysia only.n

producer
Trix Sdn Bhd (267962-p) 77c, Jalan ss22/23, Damansara Jaya 47400 Petaling Jaya, Selangor Darul Ehsan Tel: 03-7729 5066 Fax: 03-7729 5077

printer
Pencetak Weng Fatt Sdn Bhd (19847-w) Lot 6, Lorong Kilang A, Off Jalan Kilang 46050 Petaling Jaya, Selangor Darul Ehsan Tel: 03-7783 9231 Fax: 03-7783 9250

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4 | special report

Property Market Status Report Q2 2008

the article below is a summary of the Property Market Status Report
Q2 2008 as released by the National Property Information Centre (NAPIC). The article will cover updates on the residential, commercial, retail, industrial and leisure markets.

Unsold Under Construction

Residential Property
The residential sub-sector recorded 51,781 units of unsold houses after nine months of launch. At the end of Q2 2008, the number of unsold under construction residential units dropped by 3.5% from 53,636 units to 51,781 units quarter-on-quarter. Terraced units formed 47.1% of the market share with the bulk of this units located in Johor (24.6%) followed by Kedah (18.3%) and Perak (16.0%). Condominiums and apartments formed 22.8% of such unsold units. In the low-cost housing sub-sector, there were 3,755 units in the market which constituted 7.3% of total units. A total of 2,711 units had remained in the market for more than 24 months after launch. Kedah and Perak were the main contributors of low-cost unsold units at 1,170 units and 448 units respectively. Meanwhile, Selangor had the highest number of unsold low-cost flats with a total of 956 units unsold.

Overview
Property Launches Residential
The market recorded a decline in number of units launched in Q2 2008 with only 4,540 units offered for sale compared to Q1 2008s 4,902 and Q4 2007s 8,754 units. Sales performance indicated a slight increase at 26.5% against 19.3% and 21.0% in Q1 2008 and Q4 2007 respectively.
new launches, q4 2007 to q2 2008
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 q4 2007 n unit launched q1 2008 n unit sold q2 2008 l sales performance (%) 30.0 25.0 20.0 15.0 10.0 5.0 0.0 sales performance (%)

Shops
Q2 2008 saw the number of unsold under construction for shops increased slightly by 1.3% from 5,171 units in Q1 2008 to 5,239 units. Terengganu managed to sell off 83.8% of the unsold units recorded in the previous quarter, whilst Selangor and Pahang each noted reductions of 34.2% from 701 units to 461 units and 20.7% from 439 units to 318 units respectively. On the other hand, Kedah and Melaka recorded substantial increases of 76.8% and 71.7% respectively. Shops priced RM250,000 and below per unit formed the bulk of the unsold units at 40.3% .

units

Property Overhang Residential

Residential units overhang increased to 24,151 units in Q2 2008, compared to the previous quarter at 23,752 units. Seven states were reported to experience increase in the number of overhang residential units with Johor recording the highest percentage of 13.0% from 3,824 units in the last quarter to 4,322 units. Sarawak recorded an 11.3% increase to 738 units while Pahang experienced an increase of 8.9% from 644 units to 701 units. Terrace units formed the majority of overhang units at 42.0% (10,132 units) followed by condominium and apartments at 26.7% (6,440 units).

Industrial
The overall sales performance for the industrial property under construction deteriorated as indicated by higher unsold units throughout the country. Sales of industrial units have been on a downtrend since Q4 2007. Compared to Q1 2008, the number of unsold units leapt by 59.9% from 456 units to 729 units. Across the country, terraced factories dominated the unsold units, forming 74.3% of unsold industrial under construction.
total number of unsold under construction properties by sectors
60,000 50,000 40,000 30,000 20,000 units 10,000 0 q4 2007 n residential units l residential value q1 2008 n shop units n shops value q2 2008 n industrial units industrial value 5 60 50 40 30 20 10 0 -10 -20 -30 -40 -50 -60

Shops
The review quarter saw shop overhang increasing by 0.6% from 4,971 units to 4,999 units. Johor continued to have the highest number of shop overhang in the country at 2,273 units, or 45.5% of the national total. Meanwhile, by property type, 2 to 2 12 storey shops remained high in the overhang category, accounting for 32.3% of the total share.

% change

Industrial
In Q2 2008, the industrial overhang saw a marginal decrease from the previous quarter at 677 units. Terraced industrial units form the bulk of the overhang comprising 69.7% or 472 units of the national total, followed by semi-detached units at 24.4% (165 units).
total number and value of property overhang by sectors
30,000 25,000 20,000 15,000 10,000 units 5,000 0 q4 2007 n residential units l residential value q1 2008 n shop units n shops value q2 2008 n industrial units industrial value 5 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 o

Commercial Buildings
Purpose-Built Offices
The purpose-built office sub-sector showed an improvement as indicated by the 2.8% reduction in vacant office space in Q2 2008 from 2.151 million s.m. in Q1 2008. The average vacancy rate decreased slightly from 19.9% to 19.8%.

value (rm mil)

Shopping Complexes
Demand for shopping complex sub-sector improved slightly with vacant retail space decreasing by 0.5% from 1.724 million s.m in the previous quarter to 1.682 million. Across the country, Johor experienced the highest vacancy rate of 36.7% followed by Pulau Pinang and Melaka at 32.9% and 23.5% respectively.

rehda institute / event | 5

6 | cover story

,continued from page 1

For each strategic thrust, specific recommendations have been developed to address key issues identified as summarized below: strategic thrusts ST1: Integrate the construction industry value chain to enhance productivity and efficiency ST2: Strengthen the construction industry image recommendations 1.1 1.2 2.1 2.2 2.3 ST3: Strive for the highest standard of quality, occupational safety and health and environmental practices 3.1 3.2 3.3 4.1 4.2 5.1 5.2 6.1 6.2 7.1 7.2 7.3 7.4 Enabling Recommendations 1.0 2.0 3.0 Consolidate the industry. Standardize and integrate administrative practices and procedures. Enhance the professionalism of the construction industry. Enhance the procure-to-pay (P2P) strategy. Raise the sophistication level of the construction community. Foster a quality and environment-friendly culture Enhance occupational safety and health Adopt Malaysian Standard (MS) in the manufacture or import of building and construction materials. Enhance and enforce the use of skilled labor (building capability). Nurture the desire to work in the construction industry amongst the local workforce (building capacity). Continuously innovate construction processes and techniques. Stimulate R&D activities through resource-pooling initiative amongst key players and provision of R&D infrastructure. Encourage knowledge sharing for continuous improvement Develop local construction software industry. Ensure industry sustainability in the liberalized environment. Market the construction industry in a focused, global manner. Ensure the financial services sectors development is in line with industrys needs. Develop complementary industries. Review and amend the tax, legal and regulatory framework. Redefine the structure and role of CIDB. Reinforce Bumiputera entrepreneurs capabilities and equitable share in the construction value chain.

ST4: Develop human resources capabilities and capacities in the construction industry ST5: Innovate through research and development and adopt new construction methods ST6: Leverage on ICT in the construction industry ST7: Benefit from globalization including the export of construction products and services

In order to enable the industry to gauge the success of its strategic thrusts and, consequently, the success of the overall master plan, the following key performance indicators have been set: critical success factors Productivity key performance indicators target 2015*

Strategic Thrust No. 1: Integrate the construction industry value chain to enhance productivity and efficiency Value added per worker. Average time from Inception to Manage Facilities. To improve by 20% To improve by 20%

Professionalism

Strategic Thrust No. 2: Strengthen the construction industry image Number of abandoned/uncompleted/late projects as a % of total projects awarded. Ringgit share (of projects) per contractor. QLASSIC score and Credit & Performance Ratings. Less than 1% of total projects awarded To improve by 50% 80% with Above Average Score

Quality Environment-friendly

Strategic Thrust No. 3: Strive for the highest standard of quality, occupational safety and health and environmental practices Number of accidents (per million manhour) and fatality rate. Number of construction companies with ISO 9001, ISO 14001, OSH MS, OHSAS 18001 certification. Close to zero At least 90% of total companies

continued on page 7

cover story | 7

,continued from page 6

critical success factors Human resources key performance indicators target 2015* Strategic Thrust No.4: Develop human resources capabilities and capacities in the construction industry Labor productivity growth rate (%). % of construction workers accredited over the total number registered with CIDB. % of construction supervisors accredited over the total registered with CIDB. Knowledge Innovation To improve by 20% Above 95% Above 95%

Strategic Thrust No.5: Innovate through research and development and adopt new construction methods Construction R&D as a % of construction GDP or volume. % of IBS/precast used in construction projects. Number of patents registered in the construction industry. Number of commercialized value-realized R&D output. To improve by 100% Above 80% To improve by 50% To improve by 50%

Knowledge Innovation

Strategic Thrust No. 6: Leverage on information and communications technology in the construction industry Total IT spending as a % of GDP. Number of and revenue generated by IT companies supporting the construction industry. To improve by 50% To improve by 50%

Industry sustainability

Strategic Thrust No. 7: Benefit from globalization including the export of construction products and services Construction sector contribution to GDP. Ratio of value of contracts awarded to Malaysian contractors to overseas contractors. Ratio of local construction sector value to overseas construction sector value. Number and value of overseas projects secured. To improve by 50% (est. 5%) 80:20 30:70 To improve by 100%

* Improvement will be computed from the base year, 2006.

Overall, the CIMP 2006 2015 aims to achieve the following long-term benefits:

Long Term Benefits

Committed to environmentally sustainable development

Employs highly skilled workers Delivers high quality products and services

Progressive and dynamic industry

Efficient and Productive Industry

Uses modern techniques and technology Cohesive

Environmental Friendly Industry

CIMP

Consolidated Industry

Delivers integrated services through strategic partnership Customer and service-focused

Innovative Industry
Benefits from structured application of R&D initiatives Continuously seek to improve the delivery of its products and services to meet the demand of sophisticated and highly knowledgeable customers

Implementation Schedule
Phase I (20062008) Strengthen domestic capabilities in all areas
Source: Construction Industry Development Board (CIDB)

Phase II (20092012) Further strengthen existing capabilities in all areas to compete effectively with global peers

Phase III (20132015) Increase presence and enhance status in the global construction arena

8 | rehda institute

Training on Professional Selling Techniques and After Sales Services

rehda Institute organized a 2-day Training
on Professional Selling Techniques and After Sales Service on 15 and 16 October 2008, which saw Mr Benjamin Davidson of The BP Davidson Consulting Group, sharing with developers winning attitude and selling tools and techniques. Mr Benjamin Davidson started the training by first introducing participants to the market environment through effective market segmentation and identifying emotional and factual criteria of consumers behavior and the importance of creating the building blocks of first impressions. With a better understanding of what consumers requirements are, the consultant then detailed the processes from first capturing attention and introduction to the execution of sale. Called the C.A.P.T.U.R.E. process of selling, participants were enlightened on how to tackle difficult customers, asking the right questions, sales presentation and execution of sale. In the section of developing selling tools, understanding and learning of the new skills. namely the Q-Bank, M-Grid, the Concerns From the feedback, participants found the Bank and the Competitive Positioning, the consultant and training session to be very consultant helped the participants to useful and insightful, with plenty of out-ofdevelop a set of questions aimed at probing the-box concepts. n the requirements of a buyer. These are selling tools that can help sales personnel identifying emotional and factual questions of a buyers requirements, matching these requirements with the product features as well as addressing and turning concerns and objections of buyers into a sale. During the 2-day training, Mr Benjamin Davidson shared many relevant examples and experiences from varied industries, which made the session lively. There were also individual and group exercises Benjamin Davidson, the consultant, sharing experience and knowledge on and role-plays to enhance
winning selling attitude and techniques.

branch news | 9 Selangor Branch

Subang Jaya Zone Members Get-Together

the Subang Jaya Zone Committee organized a zone members informal lunch get-together
on 15 October 2008 at Sheraton Subang Hotel & Towers, Subang Jaya. The objective of the lunch get-together was for the members whose projects are situated in Subang Jaya, Puchong and Serdang to share experiences and views, getting to know each other better, and also generally to discuss matters on developments in the Subang Jaya area.n

Hari Raya Open House 2008

mr Vincent Khoo, Chairman of Klang/Shah Alam Zone
Committee, led the delegation of several committee members to attend the Hari Raya Open House co-organized by the Majlis Perbandaran Klang and Pejabat Daerah Tanah Klang on 10 October 2008 at the Dewan Serbaguna, Pejabat Daerah/Tanah Klang.n
(Left to Right): REHDA Selangor delegation with Tn Bakhtiar bin Hussin, Pegawai Daerah/Tanah, Klang and Tuan Mislan bin Tugiu, Yang Dipertua Majlis Perbandaran Klang.

Kedah/Perlis Branch

Press Conference on Bumiputera Quota

rehda Kedah/Perlis Branch held a press conference on 6 October 2008 at Sentosa
REHDA Kedah/Perlis Branch Committee addressing the media representative.

Regency Hotel, Alor Star to voice the Branchs stand on the recent amendments to the Kedah State Government policies and regulations with regard to: The compulsory allocation of 50% Malay lots for all housing development projects in the Kedah state, including those on freehold; The abolishment of release mechanism for unsold Malay Lots; and The re-zoning of development land in Alor Star. Earlier, the Branch also called for a meeting with its members to air their views and comments on the press statement prior to its release. The branch strongly objected to the new policies, which came into effect on 1 September 2008 and felt that such policy is repressive and ultra vires The National Land Code and Federal Constitution. The press conference received wide coverage from major print and electronic media.n

Members at the meeting.

Pahang Branch

Dialogue Session with Pahang MB

the Pahang Branch Committee held a dialogue session with Yang Amat Berhormat Dato Sri Haji Adnan Bin Haji Yaakob, Menteri Besar Pahang on 26 September 2008. Among the issues discussed were: Substitution of low cost housing quota with low medium cost quota for private developers; Release mechanism of unsold Bumiputera units; Reduction of premium for land conversion; and Rising costs of doing business.

(Seated from left) YB Dato Ng Leong Hai, Mr Chin Yoke Kan, YAB Dato Haji Abdul Kadir bin Awang Bakar (Pengarah Tanah dan Galian Negeri Pahang), YAB Dato Sri Haji Adnan Bin Haji Yaakob, YB Dato Muhammad Safian bin Ismail (Setiausaha Kerajaan Pahang), Mr Jonathan Kok Keng Fai and Mr Cheoh Chee Guan. (Standing From Left) Mr David Choi Beng Kuan, Mr Wong Kok Loon, Mr Simon Sim Chee Keong, Dr. Ir. Samsudin bin Ishak, Mr Darren Pang Kwee Sin, Ms Chong Yen Nie, Mr Ong Thian Yew and Mr Chua Say Chai.

10 | diary

October 2008
date events date events

7 8 9

Meeting with The Star. Attended by Ms Ng Kuai Heng and Ms Karen Seow. Malaysia Property Incorporated 16th meeting of the Board of Directors and Brainstorming session. Attended by Datuk Eddy Chen Lok Loi. SPAN Mesyuarat untuk Membincangkan Draf Kaedah-Kaedah Industri Perkhidmatan Air (Pemasangan Meter Individu di Bangunan Kediaman Bertingkat) 2008 & Penyenggaraan Tangki Simpanan Air di Bangunan Bertingkat). Attended by Mr Loo Siew Yuen, Mr Jimmy Soon Lip Sin, Mr Tai Choon Seng and Ms Yee Chew Ping. Informal Exco Meeting at Sheraton Subang Hotel & Towers, Subang Jaya. REHDA Perak Branch Briefing on Land Conversion and Valuation. Attended by Ms Ong Hui Tse, Pn Aslinda Mohd Noor and Ms Yee Chew Ping.

22

JPBD Expert Talk on Spatial Plans in Practice: Lessons & Challenges. Attended by Pn Aslinda Mohd Noor, Ms Yee Chew Ping and Pn Marini Abd Wahab. Presentation by FOX Communications Sdn Bhd. Attended by Datuk Ng Seing Liong, JP, Datuk Eddy Chen, Dato Fateh Iskandar, Ms Ng Kuai Heng, Pn Rusnani Abdul Rahman and Pn Aslinda Mohd Noor.

23 29

TNB Majlis Mesra Aidil Fitri. Attended by Mr Ricque Liew Yin Chew. Interview by ISIS Malaysia with Datuk Ng Seing Liong, JP. Welcome Dinner by PPK Malaysia in Conjunction with the Council of Asian Shopping Centres (CASC) Conference 2008 at One World Hotel. Attended by Datuk Ng Seing Liong, JP. Meeting with Minconsult. Attended by Mr Ng Lip Chong, Mr Ricque Liew Yin Chew, Mr Tiah Oon Ling, Ir Teo Ching Wee, Mr Ng Lip Khong, Mr Peter Cheah, Mr S. Sivanyanam, Tn Hj. Wan Mohd Dzulkifli, Mr Raymond Chan Chee Keong, Mr David Choi Beng Kuan, Ms Ng Hay Lian, Pn Aslinda Mohd Noor, Ms Yee Chew Ping and Pn Marini Abd Wahab. Infrastructure, Utilities & Environment Committee Meeting. CCM Meeting at REHDA Secretariat.

15

16

CIMP Briefing on Construction Industry Masterplan 20062015. Attended by Pn Aslinda Mohd Noor, Ms Yee Chew Ping, Ms Lai Jia Weng, Pn Noorliza Abd Latiff, Pn Marini Abd Wahab and En Mohd Saiddin Mokhtar. The Cement & Concrete Association of Malaysia Appreciation Dinner 2008. Attended by Datuk and Datin Ng Seing Liong, JP. Mesyuarat Jawatankuasa Teknikal Penyediaan Kaedah Bekalan Air yang Baru dan Peraturan Baru Fi dan Caj Bil. 2/2008. Attended by Ir Teo Ching Wee, Mr Tai Choon Seng, Pn Rusnani Abdul Rahman, Ms Yee Chew Ping and Pn Marini Abd Wahab. 1st NAPREC Conference at Institut Penilaian Negara (INSPEN). Attended by Pn Aslinda Mohd Noor and Pn Marini Abd Wahab.

17 20

30

CIDB Forum on Liberalization of Construction & Related Construction Services. Attended by Pn Marini Abd Wahab. Jabatan Perumahan Negara Perbincangan Mengenai Kaedah Memulihkan Projek-Projek Perumahan yang Terbengkalai di KPKT. Attended by Tn Hj Muztaza Mohamad and Pn Aslinda Mohd Noor. Universiti Malaya Perkembangan bagi Projek Malaysia Building Integrated Photovoltaic (MBIPV) Technology Application. Attended by Mr Ng Lip Khong. MCPF Mesyuarat Administration, Operation and Finance (AOF). Attended by Datuk Eddy Chen Lok Loi.

21

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