First must thank SC for its swift & efficient questioning of NETX'S PURCHASE OF SUNGAI WANG SHOPLOTS
Query Letter Contents By SC (Seccurity Commission)
We refer to your Company’s announcement dated 3 September 2021 in respect of the aforesaid matter.
In this connection, kindly furnish Bursa Securities with the following additional information for public release:-
Net book values of the 2 retail units owned by SWP (“SWP Properties”) and 4 retail units owned by SWH (“SWH Properties”) (collectively referred to as Properties) based on their respective latest audited accounts.
The postal address or identification (lot, title number, relevant mukim, district and state) of the SWP Properties and SWH Properties.
The age and approximate sizes of the Properties.
The terms of tenure of the Properties, if leasehold, the expiry dates of the lease.
The existing and proposed use of the Properties. If currently let out or is proposed to be let out, the details of the rentals and the rental income or expected rental income per month or per annum.
The encumbrances of the SWP Properties and SWH Properties, if any.
The method of valuations carried out by W M Malik & Kamaruzzaman Sdn Bhd on the SWP Properties and SWH Properties respectively.
The sources of funds by NETX Holdings Berhad (“Netx”) for payment of the debt/liabilities to be assumed by Netx arising from the Proposed Acquisitions.
The prospects of the Properties.
Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.
Yours faithfully
LISTING
REGULATION
Cc : Market Surveillance Dept., Securities Commission (via fax)
From above we see the excellent hands on management of SC giving one day's time for Netx to reply
Well done Management Team in SC!
And this is Netx's Reply to SC below
NETX HOLDINGS BERHAD
- PROPOSED ACQUISITIONS OF ENTIRE EQUITY INTEREST IN SUNGAI WANG PLAZA SDN BHD AND
SUNGAI WANG HOLDINGS SDN BHD
(Unless otherwise defined in this announcement, all terms used herein shall have the same meaning as
those defined in the announcement dated 3 September 2021.)
Reference is made to the Company’s announcement made on 3 September 2021.
The Board of Directors of NetX Holdings Berhad (“NetX” or “the Company”) wishes to further announce
on the following
:
1. The net book values (“NBV’) of the 2 retail units owned by SWP (“SWP Properties”) and 4 retail units
owned by SWH (“SWH Properties”) (collectively referred to as “Properties”) based on their respective
latest audited accounts as at 31 December 2020 are as follows :
NBV as at
31 December 2020
SWP Properties RM7,940,000
Market Value by Valuer
as at 30 July 2021
RM2,900,000
NBV as at
31 December 2020
SWH Properties RM54,450,000
Market Value by Valuer
as at 30 July 2021
RM29,900,000
2. The details of the Properties are as follows :
i) Details of SWP Properties
Property 1 Property 2
Postal addressLG001-D, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
T-136, Sungei Wang Plaza, Jalan Sultan
Ismail, 55100 Kuala Lumpur
Master title of
the Property
Geran 11043/M1/B1/6, Lot 1197
Section 67, Bandar Kuala Lumpur,
Wilayah Persekutuan Kuala Lumpur
Geran 11043/M1/5/640, Lot 1197
Section 67, Bandar Kuala Lumpur,
Wilayah Persekutuan Kuala Lumpur
Tenure of the
Property
Freehold Freehold
Size in sq. ft 2,346.53 sq. ft 570.49 sq. ft
ii) Details of SWH Properties
Property 1 Property 2
Postal addressLG001-2, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
LG001-1, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
Master title of
the Property
Geran 11043/M1/1/26, Lot 1197
Section 67, Bandar Kuala Lumpur,
Wilayah Persekutuan Kuala Lumpur
Geran 11043/M1/1/27, Lot 1197
Section 67, Bandar Kuala Lumpur,
Wilayah Persekutuan Kuala Lumpur
Tenure of the
Property
Freehold Freehold
Size in sq. ft 1,173.27 sq. ft 1,054.86 sq. ft
Page
Property 3 Property 4
Postal address
LG001, Sungei Wang Plaza, Jalan Sultan Ismail, 55100 Kuala Lumpur
LG001(A) & (B), Sungei Wang Plaza, Jalan Sultan Ismail, 55100 Kuala Lumpur
Master title of the Property
Geran 11043/M1/1/28, Lot 1197 Section 67, Bandar Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur
Geran 11043/M1/1/29, Lot 1197 Section 67, Bandar Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur
Tenure of the Property
Freehold
Freehold
Size in sq. ft
656.60 sq. ft
279.86 sq. ft
3. Save and except for Lot LG001-2 and LG001-1 under the SWH Properties which is currently rented out at monthly rental of RM31,000 and RM24,000, respectively, all other Properties are currently vacant. The Company intended to let out all the Properties as soon as possible and the total expected rental income is estimated at RM158,000 per month after the on-going Covid-19 pandemic situation has been improved.
4. All the Properties do not have restrictions in interest and are charged to Ambank Islamic Berhad for Islamic Banking Overdraft facilities.
5. The method of valuations carried out by W M Malik & Kamaruzaman Sdn Bhd (“the Valuer”) on the SWP Properties and SWH Properties is on the basis of “Market Value”. In assessing the Market Value of the respective properties, the Valuer have adopted the Income Approach using the Investment Method and the Comparison Approach.
6. The debt/liabilities assumed by NetX arising from the Proposed Acquisitions shall befunded from the proceeds raised from the Company’s Right Issue with Warrants exercise which was completed on 3 November 2020 and the recurring rental income expected to be received by NetX once all the Properties have been rented out.
7. The Covid-19 pandemic and the economic slowdown have affected most sectors of the economy including the property market. Despite the slight upturn of market activity since the economic activities resumed in early May 2020 and the economic stimulus packages introduced by the government, the property market is expected to remain soft for the remainder of 2021.
The property market performance in Kuala Lumpur softened in 2020 indicated by the contraction in market activity. The performance of the retail segment weakened as the average occupancy rate decreased to 82.0% as compared to 83.4% recorded in 2019.Generally, rentals of retail space were stable with mixed movements. Upward rental movements were recorded at Suria KLCC, Kompleks Wilayah and NU Sentral @ KL Sentral due to rental renewals. Suria KLCC sustained its prominence, fetching the highest range from RM42.55 to as high as RM223.00 per sq. ft at concourse level, charting marginal increase of 2.5% to 5.0%. (Source : Extracts from JPPH’s Property Market Report 2020)
The retail property market will face challenges until the pandemic subsides and will impact negatively on rental rates and occupancy. However, the properties owned by SWP and SWH are strategically located in the prime space within Sungei Wang Plaza can expect faster recovery when the pandemic ends.
Calvin comments:
There are 7 types of Property Deals
1) Over Inflated Value
2) Above Market Value during Sellers' Market (Boom times)
3) Market Book Value by Valuers
4) Fair or Discounted Value in Buyers' Market (Bad times)
5) Force Sale Value
6) Fire Sale Value
1) OVER INFLATED VALUE
This is what happened during Super Hot time of speculative boom when Properties are Inflated at Ballooned Prices to get "CASH BACK VALUE" above loan margin
See some examples
FREEHOLD Below Market 40% Get CASH BACK RM300k, Johor Bahru
Below Market 400k !!!
Get CASH BACK up to 290k !!!!
World Class Resort Home || FREEHOLD
~ 4 Bedroom 5 Bathroom
~ Built up area 2700 sq.ft
~ Available 2 Storey & Single Storey
~ Free All Legal Fees
~ Free All Stamp Duty
~ Free MOT
~ Free Aircon
~ Free Kitchen Cabinet with Hob & Hoob
~ Free Water Heater
~ Free Down Light with Staircase Glass
[ Singaporean Allow to Purchase ]
Strategies Location only 9km/10min to 2nd Link Check Point
Surrounded by
~ Sunway Iskandar
- Big Box Shopping Mall
- International School
~ Eco Botanic City
~ Gleneagles Hospital
~ University / College
- Newcastle University
- Reading University
- Raffles American School
- Marlborough College
Welcome to make appointment for viewing unit
+6010-xxxxxxx Mr.White
THIS UNIT FROM MELAKA SELLS NEW CONDO AT BELOW RM300K & GIVE YOU RM60K CASH BACK
THESE ARE HIGHLY INFLATED PRICES JUST LIKE THOSE SUB PRIME LOANS GIVING IN USA BEFORE THE 2007/8 US HOUSING BUBBLE BURST DUE TO "LIAR LOANS")
I AM AFRAID THIS WAS DONE RAMPANTLY DURING BOOM TIMES WHEN CAUTION IS THROWN TO THE WIND
NINJA LOANS WERE
No income
No Job
No Asset as collateral
2) ABOVE MARKET VALUE
This is what is happening now in Singapore as we type
A few HDB flats are now Sold Above Valuation (Buyers need to pay CASH Above Bank Loans)
See
Million-dollar HDB flats in S’pore: Where are these units located?
Since 2012, over 420 resale flats have been sold for at least $1 million. Just where are these units located and why were they able to command such high prices?
From just two transactions in 2012 to 87 sold in the first five months of 2021, the appetite in Singapore for million-dollar Housing Board flats has grown over the years.
Some HDB resale flats continue to command a premium - even amid the Covid-19 pandemic. A five-room unit in Block 1B at The Pinnacle @ Duxton - which changed hands for $1.258 million in September 2020 - is one of the most expensive units sold here. This April, a five-room Design, Build and Sell Scheme flat at Natura Loft in Bishan Street 24 was sold for $1.25 million - also one of the most expensive on record.
In March 2020, this five-room unit on the 42nd floor of The Pinnacle @ Duxton changed hands for $1.232 million. ST PHOTO: Khalid Baba
While The Pinnacle @ Duxton is arguably the “poster boy” for these million-dollar transactions, such units are not exclusively located in the central area.
Among them is a 177 sq m executive maisonette in Block 851 Hougang Central that was sold for $1 million in January 2018. Till date, it remains the only unit in a non-mature estate to hit the $1 million mark.
The remaining units are spread across 11 mature estates.
Calvin Comments:
UNIMAGINABLE THESE ARE GOVT ALLOCATED FLATS (NOW OVER S$1 MILLIONS OR RM3.15 MILLION RINGGIT)
SPORE IS LAND SCARCE: TOO MANY BUYERS AND TOO FEW GOOD BUYS
3) SELLING AT MARKET VALUE (JUST FOLLOW VALUATION BY PROFESSIONAL VALUERS)
Usually Banks will base their loans on these Valuation Reports
4) FAIR OR DISCOUNTED VALUE (BUYERS MARKET)
COVID 19 HAS FORCED THE HANDS OF SELLERS TO ASK A LOWER FAIRER PRICES
THOSE WHO CAN HOLD AND TIDE OVER THESE TOUGH TIMES WILL EMERGE OK
5) FORCE SALE VALUE (BANK FORECLOSED PROPERTIES SOLD AT HIGH COURT ACTION)
Usually Distressed Companies or Inviduals over specuated and unable to service loans
Banks will foreclose and start LELONG
10% Discount usually to market
If no buyer then at each subsequent auction price will drop by another 10% until sold
In good times usually down 10% to 15% will be snapped
Less desirable properties can go up to 50% discount before buyers turn up (Like now in Johor High Court for High end Condos)
Some even sold at 60% or more
And this is where NETX comes in to buy these Sungai Wang Shoplots (At Force Sale Value but out of court settlement)
See the prices
NBV as at
31 December 2020
SWP Properties RM7,940,000
Market Value by Valuer
as at 30 July 2021
RM2,900,000
NBV as at
31 December 2020
SWH Properties RM54,450,000
Market Value by Valuer
as at 30 July 2021
RM29,900,000
RM7,940,000 properties were sold at Rm2,900,000
A Steep Discount of 64%
RM54,450,000 properties were sold at Rm29,900,000
A Steep Discount of 46%
SO BOTH ARE GOOD BARGAINS
Now see their locations
Postal addressLG001-2, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
LG001-1, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
Postal addressLG001-2, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
LG001-1, Sungei Wang Plaza, Jalan
Sultan Ismail, 55100 Kuala Lumpur
LG stands for LOWER GROUND OR LEVEL GROUND (THIS MOST PRIME AREAS WHERE THE CROWDS ARE WITH THE HIGHEST HUMAN TRAFFIC & FOOTFALLS
So these are Exceptional Units
And they are FREEHOLD
Read further
However, the properties owned by SWP and SWH are strategically located in the prime space within Sungei Wang Plaza can expect faster recovery when the pandemic ends.
NETX MANAGEMENT'S FORESIGHT IS TO ANTICIPATE THE ENDING OF COVID 19 ONE DAY AND THE MARKET UPTURN
MALAYSIA WITH ITS MULTI RACIAL MULTI-CULTURAL RACES DO ATRRACT FOREIGN TOURISTS TO ITS CAPITAL KUALA LUMPUR AND IN PARTICULAR BUKIT BINTANG THE GOLDEN TRIANGLE FOR TOURISTS & LOCALS ALIKE
LOCALS?
YES!
See
Save and except for Lot LG001-2 and LG001-1 under the SWH Properties which is currently rented out at monthly rental of RM31,000 and RM24,000, respectively, all other Properties are currently vacant. The Company intended to let out all the Properties as soon as possible and the total expected rental income is estimated at RM158,000 per month after the on-going Covid-19 pandemic situation has been improved.
TWO UNITS ARE WITH TENANCY OF RM31,000 & RM24,000 PER MONTH
This will help cover Bank interest. Plus no further need for cash call see
the Proposed Acquisitions shall befunded from the proceeds raised from the Company’s Right Issue with Warrants exercise which was completed on 3 November 2020 and the recurring rental income expected to be received by NetX once all the Properties have been rented out.
The total rental if all units are tenanted out should get a yield of 5% before deducting bank interest
So Netx is buying into a Prime Assets in Strategic Location At Huge Discount Price to Market Value Plus it has current income cum future capital appreciation prospects
Best regards
Calvin Tan
Please buy or sell after doing your own due diligence orconsult your Remisier/Fund Manager
SWP Properties RM7,940,000 RM2,900,000
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More articles on THE INVESTMENT APPROACH OF CALVIN TAN
Simple question common sense questions, Netx should have given all these important..info or answer even b4 SC queries mah!
This reflect poorly of netx management & lack of respect to investor mah!
Conclusion : The answer given by netx have shown lack of focus & strategic approach of their management, buying into properties which are majority vacants without properly looking into its relevancy to their core business & without looking at their ability whether they can rent out or not loh!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
calvintaneng
One more thing
Sungai Wang Plaza was refurbished with added value in year 2019 just before Covid 19 struck
https://www.youtube.com/watch?v=MYHaR6LIAXU
2021-09-09 21:23