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Before inspection

Since the case is to be done by the valuation officer of the corporate case, Mr. Chee Kok Thim and his team of valuation executive, Pn. Noor Hassida Darus and Alhafiz Farouk, and me, the valuation process starts by contacting relevant people that is important for this case.

Some of the people contacted are people from the DBKL and even people from MCDF itself.

Contacting people are important to gain relevant information and to confirm some information that is already been obtain. Contacting the persons also is needed to understand our client and the most important thing is to plan for the inspection and referencing later.

1.1.1

Identifications and confirmation of information

During the stage of before inspection, this is the most important step. Firstly, the valuation executive must identify and confirm every document, attachments and detail given to them is genuine.

During this step, title search is done, by writing down all the information of the title in the title search form, and the title will be searched by the clerk that is responsible for obtaining it, Mr. Hashim

These are the details extracted from the title search:

District State Surveyed Land area Tenure Category Of land use

: : : : :

Kuala Lumpur Wilayah Persekutuan Kuala Lumpur 4,164 sq metres Freehold Building

1.1.2

Identifying the location

Before going out for an inspection, another important thing to do is to identify the location of the subject property. Using map book, survey sheet and even through the net, identifying the subject property’s location is a must where many things can be extracted there such as locality, access way and many more.

For this case, the property is located at LOT NOS. 2521, 2522, and 2523, section 41, Town and District of Kuala Lumpur and state of Wilayah Persekutuan KL. The property is located at the junction of Jalan Raja Abdullah and totally opposite the Sheraton Imperial Hotel. The subject property is also served by the Kuala Lumpur Light Rail Transit (LRT) systems, i.e. the STAR LRT and the Kelana Jaya line LRT. The STAR LRT system provides convenient travel to the city centre from Bukit Jalil, Ampang and Sentul Timur. The nearest station is the Sultan Ismail station which is located across Wisma Sime Darby due west of the

property. The monorail system also available in the vicinity, which is the Bukit Tunku Station which is in front of the property itself.

By identifying the locality of the subject property, we could plan out our journey there. In this case, the subject property located just a few blocks from the office, so the team decided to just walk.

1.1.3

Collecting relevant information For valuation process, in determining the value, there are a few method to be use to value the property, whether it is comparison, zoning, cost, accounts, residual or investment method, each and every method use must have their basis and reason to choose why that particular method is used. For this case, the team decided to use the residual and the cost method. Due to the fact that the property is in that kind of nature, the methods used are suitable.

1.1.4

Preparing the inspection checklist For inspection and referencing, valuers must prepare proper equipment for them to carry out the task and complete it without frail. As mentioned earlier, one of the form inside the file is the inspection checklist form. The form must be filled with relevant equipment before we went out for inspection.

The normal equipment would be, the measuring device, here in Rahim & Co. we uses the mechanical measuring device, which uses the laser to measure the distance. Second important equipment is the camera. The camera is use to capture images of the subject property, surrounding and every important picture that is necessary for the work. Those two equipments are the most important in any inspection including this one. We also carry together the building plan to aid us in the inspection and referencing process. We then later fill in the pre-inspection checklist form and we are set to inspect.

1.2

During inspection The crucial moment of a valuation process is the second stage – the inspection and referencing. This is the step where the valuer gain excess to the property and inspect it thoroughly. Not just sight seeing, in this step also, the valuer needs to identify all the finishes, the detail of the property, and most important thing is to measure the dimension of the building – to make sure it is according to the plan. For this case, before we went into the building which has been abandon project like a few years back, we inspect the exterior part of the property first. We look at it from a distant before entering the building. Upon entering building, we able to distinguish and locate the parts from the inspection of the exterior part we’ve done before. When we are in the property, we found the leveled, cemented and probably the foundation been laid area which is going to be use to be build with the 40-storey

office tower. Upon entering also, we found that the property, though have ceased construction able to maintain the current state of building – which shows a good workmanship of the previous developer. Upon entering the building, we noticed that the property is well built. The retail complex which is a 6-storey building is the only structure available, since the apartment and the office building is still being constructed, yet the base only available. The retail office includes basement parking and levels of retail area are inspected. We could see clearly the brickwork and the concrete work. The walls and the pillars are well stood and prove of good workmanship. A few pictures have been taken and it can be viewed in the appendices. Normally, if inspecting house for example, we must identify the finishes available in the house. This case however, since it is partially completed, the finishes are just cement rendered floors, the ceiling is just cured and the walls are also the same except the brick wall. The vertical access, which is the stairs are also made out of the same material – reinforced concrete. Then, after we have done inspecting the property, if the valuation method used is the comparison – which is normally for landed houses or even the strata, we need to find the comparable property, took their picture and identify prominent things seeable from outside. This property however, we don’t need to do so since the method of valuation used is cost and residual. We then took another picture of the property and the surrounding of it and later on headed down to the office to start with our 3rd valuation process, the after inspection.

1.3

After inspection The two previous steps when have been down, we as valuers must proceed with the 3rd stage, which is the after inspection stage. Here, we gather all the information that we’ve collected, compile everything of it, and present it is a form of a valuation report. The information like comparables, data like the cost data and the residual data, pictures and other materials are compile and presented including the calculations of the value. Engineering

1.3.1

Compiling all the data The data that is gathered in the previous stages are compiled and the valuation working will be done. The title that was gathered by Mr. Hisham are taken and compile. Pictures taken on the site are transferred to the computer, enhanced and edited with a few touchups. The building plans that was presented by the client are compiled each and every one of them together. During this time also, the plans which is the location plan, and the site plan will be drawn by the firm’s staff, Mr. Jamal. Using the site and location plan we obtained earlier, we then fill in the “Preparation of Plan” form and attach the plans that we obtain and he’ll draw back the plans for the valuation report.

The abovementioned data are then compiled together as appendices for the valuation report. Next thing to be done is the valuation report.

1.3.2

Valuation working To value a property, certain valuation work are needed and using certain valuation method. For this case, the property will be value using the Cost and Residual method, both method are unique to value a special property. Since the property is going to be valued using the cost and residual method, the costing price which is obtained from the client’s Quantity Surveyor; JUBM Sdn. Bhd. are to be taken for the valuation working later. The residual data however are obtained from various way, it is gathered through comparison and later on the normal residual method, which requires to calculate the Gross Development Value; GDV, and the Gross Development Cost; GDC are going to be done. The following is the valuation working for this report. 1.3.2.1 Valuation of land only Comparable are attached in the appendix

VALUATION OF LAND ONLY 7.00 acres or 304,973.58 sf RM1,140.00 Say = = RM347,669,880 RM347,700,000

Component Apartment Office Block Retail centre Total

Cost For Completed Work in 2007 RM19,232,000 RM2,876,000 RM73,579,000 RM95,687,000

Inflation Factor 10% 10% 10%

Estimated Completed Work in 2011 RM 21,155,200 RM 3,163,600 RM 80,936,900 RM105,255,700

Depreciation 5% 0% 5%

Value For Completed Works 20,097,440 3,163,600 76,890,055 RM100,151,095

Opinion of Market Value Land Site Improvement Market Value Say RM347,700,000 RM100,151,095 RM447,851,095 RM450,000,000 RM 63,967,488 per acre RM 1,468 psf

1.3.2.2 Residual method

1.3.3

The Valuation Report

When the calculations have been done, the data have been compiled and arranged accordingly, the next step is to arrange all abovementioned data and be presented in the valuation report. The valuation report is then typed according to the MVS needs. There are 15 points in these are the points available in the report: 1.0 Term of reference Here, we explain on what are we doing and for whom we are doing the valuation work. Here also a brief description of the property Definition Here, we explain what Market Value under the Malaysian Valuation Standard is Basis of valuation Here, we explain on how the valuation is going to be, which is ‘as is’ basis. Date of inspection and referencing According to the MVS, the date of inspection is taken as the date of valuation, which is on the 8th July 2011 Situation Here, we explain on where the property is situated. Surrounding Like above, this explains the things surrounding the property. Particulars of title Particulars of the title will be explained here. Description More in depth explanation of the property explained here. Occupation The occupancy status of the property Services The availability of the services at the property, which is the water, electricity, telephone line and even public transportations. Planning provision Explains on the planning permission given by the Local Authority Method of valuation In this point, we explain what method is being used to value this property. Evidence of value Evidences of value refer to the proof of the valuation working. Valuation

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Valuation is the interpretation of value done by the valuer for the price of that particular property Certification Certification is the signage of the signing officer, he or she are approved by the board to give such value of the property

Once the all these particulars have been issued inside the valuation report, the signing office for this case, Mr. Chee will then check if there is any error in the draft report. If there is anything to be amends, he’ll tick the particulars in red inked pen and the draft is corrected again. Once the report is accepted by the signing officer, he’ll later sign the report and pass it to the other staff and she’ll bind the document, stamp it with the seal and later to be send to the client. One thing not to forget is the valuation fee. The fee is duly payable depends on the instruction letter. For example the financing purpose from CIMB bank. Sometimes, the letter ask us the valuer to collect the valuation fee from the borrower, at other time, the fee is paid by the bank and the fee will be included as part of the installment by the bank. The fee is determined by the scale of fee set by the Board of Valuers, Appraisers and Estate Agent (BOVEA), however it is subject to other items for example the disbursement, discounts and many more. For Rahim & Co. the minimum fee for valuation work is RM600. At times also, if the valuation fee is quite high, the valuer request the client to pay for the deposit, one reason for it is to secure the payment. The calculation of fee for this case is available in the appendix.

Below is the calculation of fee, which is already in the saved file of ”fee calculation”. All we need to do is just key in the amount and the fee is the processed.

FEES PROPOSAL BASED ON GAZETTED FEE SCALE AS AT 5 JULY 2010 Particulars of Property to be Valued : Estimated Value of Property : Discount Disbursement Full Fee Discounted Fee RM450,000,000.00 72% RM200.00 RM282,383.30 RM84,011.36 [Make change here] [Make change here]

For Capital Valuation
On the first RM100,000 On the residual up to RM2,000,000 On the residual up to RM7,000,000 On the residual up to RM15,000,000 On the residual up to RM50,000,000 On the residual up to RM200,000,000 On the residual up to RM500,000,000 On the residual above RM500,000,000 RM100,000.00 RM1,900,000.00 RM5,000,000.00 RM8,000,000.00 RM35,000,000.00 RM150,000,000.00 RM250,000,000.00 RM0.00 DISCOUNT

(Our Minimum Fee: RM400) X X X X X X X X : 0.250% 0.200% 0.167% 0.125% 0.100% 0.067% 0.050% 0.040% 72% = = = = = = = = = RM250.00 RM3,800.00 RM8,333.30 RM10,000.00 RM35,000.00 RM100,000.00 RM125,000.00 RM0.00 RM282,383.30 RM203,315.98 RM79,067.32 RM79,067.32 RM4,744.04 RM200.00 RM84,011.36

RM282,383.30

Less:

Add:

GOVT TAX DISBURSEMENTS

: :

6% Total :

=