TANGCO PTE LTD
BUSINESS EXECUTIVE
SUMMARY
Bekay Court Project
By,
Benny Tang
5/31/2014
EXECUTIVE SUMMARY
1. Bekay Court is a gated community located in Ampang Hilir, an upmarket area along busy
Ampang Road 2km away from Petronas Twin Towers and Kuala Lumpur City Centre
(KLCC). Because of on-going high-rise developments in this area and surrounding areas
and lands in this area are getting scarce. Despite of this lands in this area are always in
demand coupled with increase in building raw materials and labors over time, its
expected growth is 10% annually. Since Bekay Court is up for sale, acquiring it is an
advantage because of its strategic location, convenient, easy accessibility, amenities and
the land is freehold status. An opportunity not to be missed.
2. Bekay Court was built on a land, built-up size of 65,047 sq. ft. approximately 1.5 acres, a
low-rise walk-up 3-storey apartments with a total of 27 units, well established in the
Ampang Hilir neighborhood. Another advantage is escape to a low density quiet
environment to unwind and avoid the hustle and bustle of city life. It consists of 9 units
of 1-Bedroom, 10 units of 2-Bedrooms and 8 units of 3-Bedrooms and all units are 100%
fully furnished. Facilities are provided including a swimming pool, tennis court, gym and
24-hour security. Each unit is allocated with 2 car parks. Nearby Bekay Court are 2
international schools (Fairview International School and Sayfol International School)
located within 10 minutes walking distance. For shopping and leisure, Great Eastern
Mall, AmpWalk and Hock Choon Supermarket, plus, Gleneagles Medical Centre are
within walking distance. In addition, Bekay Court is surrounded by embassies; Embassy
of Russia, Embassy of China and Cultural Attache of Yemen. Another advantage is easy
access to the city, major roads, expressways and a Monorail station. One of the features
I like about Bekay Court is the green landscaping garden where one can relax near the
poolside have barbecue with family or take a swear out at the tennis court or indoor
gym for stretch out exercise. These facilities are exclusively for tenants and their
families.
3. Based on recent financial reports, the Malaysian economic outlook in 2014 looks
promising, IMF’s forecast of 4.9% GDP growth, Malaysian Institute of Economic
Research (MIER) predicts growth of 5.5%, while Bank Negara Malaysia (BNM) expects
5.1% GDP growth. Currently land price in Ampang Hilir area are selling from $200-$350
per square foot (sq ft) depending on location. Gross rental yields have fallen somewhat
over the past year. Yet the decline has been gentle, almost invisible. The 1100 sq. ft.
condominium category remains the best-paying investment, with gross returns of 7%,
but last year, researchers found that rental yields averaged over 8% for this size. Gross
rental yields on condominiums generally range from 5% to 7%.
Some significant events may trigger rental growth, they are:
4.
5.
6.
7.
A. The launch of Visit Malaysia Year is expected to boost
the tourism industry, expected increase in foreign
tourist arrivals and spending.
B. The Tun Razak Echange (TRX) is expected to attract
250 multinational companies including global
financial institutions and creating over 500,000 new
jobs including 40,000 for knowledge workers in
financial services. More than $1 billion in FDI is
expected to flow into the country under Phase 1 of
the project.
I was introduced and acquainted with the owner 6 years ago and it was by chance after
sold one of owner’s properties, at that time I was a part-time real estate negotiator.
Apparently, owner has many properties in the country and overseas. I understand the
reasons why owner wanted to dispose-off Bekay Court is due to tiredness, age catching
up and children shown no interest to continue and taking over the business. Besides,
owner also likes to travel overseas so letting go is a wise choice.
Currently there is 9 staff in Bekay Court. 1 Admin, 1 maintenance guy, 1 gardener, 3
maids and 3 security guards (3 shifts 24x7). Admin is responsible for administrative work
in the office, attending to tenants’ primary and supervise other staff. Maintenance guy
will be troubleshooting electrical, mechanical and general issues. Gardener will upkeep
plants and surrounding grass are in good condition at all times. The maids will do
housekeeping for tenants, weekly cleaning and laundry. There are 3 shifts and 3 security
guards are on an 8 hourly rotating rooster and are based at the entrance to checkout
and monitor in/out of tenants and visitors. Suggest to keep all staff unless otherwise
anyone leaves will be replaced.
I was inspired by world renowned Mr. Robert Kiyosaki, an amazing guy, for his
entrepreneurship, business education, investing, comprehensive financial literacy
concepts and success stories. In fact when I was a young man I used to toy the idea of
owning properties and earned “rental income” aka “passive income” before retiring
unfortunately there was no financial support to fund my idea and besides it’s only a
thought. However, now it’s a different matter people changed after attended
investment seminars and learned the know-how tactics and strategies of property
investment, I believe after gaining experiencing for the last 10 years I am ready to go to
the next level into bigger project. It is proven property investment is still the best and I
am sticking to my strength.
Organizational Structure
Organisational Structure
Benny Tang
CEO
Sales & Marketing
Outsourced Sales Agents
Adminstrator
Finance Clerk
Outsourced Contractor
Maids
Security Guards
Gardener
Maintenance
8. Our main objective is to purchase, maintain and keep Bekay Court for 5 years and wait
for the land to appreciate as there is no desire to change the current status quo.
Expected minimum land capital gain is 30% in 3 – 5 years’ time. On the other hand, with
proper responsible management and marketing Bekay Court will bring additional
average gross rental income of $340,000 annually. Targeted tenants are foreign
diplomats and expatriates. By 5 years’ time the land value should worth minimum
$19.5m a gross profit of $4.5m add gross rental income of $1.7m, total works out to
$6.5m or 40% of $15,388,000 required funding. Because of the new Real Property Gains
Tax (RPGT) rate effective this year. There is still a 5% tax after 5 years of ownership
period; this amount can be subsidized by our rental income, main strategy is to hold on
Bekay Court for 5 years. Regarding payback to investors, there are 3 options, one option
is to mortgage the land to pay back funding or another option is to dispose of Bekay
Court at $20m and above or final option is to JV with a reputable developer to redevelop Bekay Court in return for properties equivalent to $20m and liquidate all these
properties. Will decide what deem fit and best. Suggest continuing with the profit
earned to invest more properties in Klang Valley.
9. Equity Offered – Owner 51%, Investors 49%.