Ho Wah Genting Group Introduces Shared Ownership Model
Newsfile Corp.
Updated
Kuala Lumpur, Malaysia--(Newsfile Corp. - January 31, 2018) - Ho Wah Genting Group Limited (OTCQB: HWGG) (the "Company" or "HWGG"), via its subsidiary, the property arm of the Company, Ho Wah Genting Property Sdn Bhd ("HWGP") has come up with a concept that ease the consumer issue on purchasing properties in Malaysia. From a first time buyer to property investors, who are now facing affordability issue in the properties in Malaysia, can be delighted to know that they can now own a high end property in a prime area in the heart of Kuala Lumpur city and a resort situated in a destination state in Malaysia.
The concept? Sharing economy, whereby owners are to share their unit. This concept will be applied to its two maiden hotel development projects in the Malaysia - Goldmen Suites near Bukit Bintang, Kuala Lumpur and HWG Resort in Port Dickson, Negeri Sembilan. When the investment concept was introduced on Nov 11, 2017 some 200 registrations of interest were received that day.
Gavin Lim (CEO of the Company - on the left) and Mavis Mok (director of the Company)
Located at the junction of Jalan Kampung Pandan and Jalan Imbi (a prime are in the heart of Kuala Lumpur and a well-known destination for locals and foreigners), Goldmen Suites is a proposed 60-storey hotel project with 600 rooms, each with a built-up size of 500 square feet ("sqft"). The project, is estimated to has a Gross Development Value ("GDV") of RM900 million (approximately US$225 million), is a joint-venture project with Lembaran Beruntung Sdn Bhd, which is the landowner. Earthworks are expected to start in March this year.
HWG Resort is a seafront development in Port Dickson with an estimated GDV of RM900 million (approximately US$225 million). There are three components in this project - a cruise entertainment hub, hotel town and water chalet. The water chalet component offers a total of 182 units with four different layouts ranging from 974 sqft to 2,312 sqft. The project is being developed by Earth Synergy Sdn Bhd where it will collaborate with HWGP. The piling works will begin soon.
"The common thing these two projects have is their investment model. We all know commercial property investment in prime areas has always been limited to a small group of investors due to the high cost involved. We want to fill the gap and give the opportunity to more people to invest in luxury properties by making it more affordable while reducing the investment risk," said Gavin Lim, the executive director of Ho Wah Genting Property. Under this shared model, he explains, every unit in these two projects is allowed a maximum of 12 owners, with Ho Wah Genting Property being one of them so it can play the administrator role.
"At Goldmen Suites, instead of coming up with RM1 million for a unit, you will just need to fork out RM125,000 to become one of the 12 owners of a 500 sqft hotel suite to enjoy benefits such as a 30 nights-in-a-year entitlement either for your own use or to be rented out for returns," Gavin said.
To avoid concurrent bookings by the unit owners during peak season, flexibility is given to the owners to utilise all their 30 nights' entitlement at one time. "The building is divided into three zones according to entry prices. If you are at the lowest entry-point zone, you can book any of the rooms in that zone when you want to use more than one night's entitlement on the same night [for your guests]. For those under the entry price zone 2, they can book rooms at zone 1 and 2; while for those in price zone 3, they can book rooms in all three zones or the entire hotel. The higher-priced zones on the higher floors accord you better views and more rooms available for the owners' use," Gavin said.
Besides paying RM125,000 as a one-off payment or a maximum of 24 months' instalments to the developer, every investor will also need to pay RM700 in monthly maintenance fee. "RM700 is the cost to maintain the entire building - the common areas, the facilities, your unit room services, as well as to use our platforms to rent or trade your investment worldwide," Gavin said.
Use of blockchain and possibly bitcoin
According to Gavin, the record of ownership and benefit entitlement will be done using blockchain technology. "blockchain is probably one of the most transparent and wide-reaching systems. When an investor wishes to exit the investment plan, they can target worldwide buyers via our blockchain platform. Of course, besides the smart contract, investors will also need to sign the conventional contract to legally change the ownership title," Gavin explained.
He added that the company is also exploring the possibility of allowing bitcoin to be used for the transactions. "When we use the blockchain system, people will wonder if we are accepting bitcoin. As a developer, we prefer hard cash because developing requires cash flow. But we are exploring the possibility of accepting bitcoin because our market is worldwide - Japan, the US, Singapore and other countries that are very familiar with blockchain and bitcoin. We need to cater to market demand," Gavin noted.
When an investor decides to exit, there will be a stipulation in the sale and purchase contract stating that every owner has equal right. "People will be worried; for example, what if one of the 12 investors wants to exit but others want to stay - would it cause any conflict? In the contract, when they buy into a shared ownership, they are buying into undivided share in a property. It means each and every owner has the equal right to make a decision. You don't have to go through all the shareholders for the consent of exit. Only the admin of the unit title, which is Ho Wah Genting Property, is involved in processing the exit," Gavin explained.
He said one of the aims of this investment model is to encourage people to invest and do business, hence the lower entry point with no guaranteed returns. "I believe leaseback and guaranteed returns are just different forms of discounts, not really a return. We do not offer them. In fact, we encourage investors to lease their nights with all the short-stay platforms available in the market," said Gavin, who expects a 20% to 30% take-up rate locally for both projects by the first half of 2018 as it mainly focuses on foreign buyers from Singapore, China, Japan and the US.
About Ho Wah Genting Group Limited
Ho Wah Genting Group Limited is an investment holding company engaged in promoting entertainment membership, junket operating services, online entertainment gaming, investing and marketing of real estate.
This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects", "estimates" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic and other reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
