KUALA LUMPUR – Malaysia Shopping Malls Association (PPK) committee member for research YL Lum foresees that the calculation of share unit weightage in strata-titled properties will be the next ‘time bomb’ in property management.
The calculations become even more complicated if the property comprises multiple elements, such as in the case of an integrated development that consists of a shopping mall, retail units, residences, serviced apartments and offices.
Share unit weightage determines the amount of service charges and maintenance fees that unit owners need to pay per month.
“Different elements have different functions and values. A share unit should be benchmarked according to sales value. Other methods such as by size by type by location would be unfair, Because sales value itself determines,” said Lum in his session titled “Strata tribunal – landmark cases & stakeholders’ feedback”.
He further elaborates that many years ago, sales value was the basis to determine Share unit weightage, but over the years the industry started to apply a standard factor to be applied on the weightage and by considering the type of premises, and some facilities availability.
He added that property managers will also face the same problem in share unit weightage calculation for properties of the same type.
“For instance, should the share unit weightage for anchor tenants be the same as smaller individual tenants? Or should penthouse units have the same share unit weightage as normal units?” he added.
He was speaking at the “Property Management Time Bomb Seminar 2018” which was jointly organised by Fiabci Malaysia and PPK.
In his presentation, he shared case studies of disputes between joint management bodies or management corporations and developers on various issues such as inter-floor leakage, common facilities and carpark ownership.
Lum opined that public has a perception that carpark leasing or management is a lucrative business based on the simple calculation of parking rates.
“However, most people don’t know the development and maintenance cost of the carpark could be quite costly and not as lucrative as they perceive,” he said.
According to Lum, the cost to build a parking bay is around RM20,000 to RM30,000, and a shopping mall needs around 5,000 bays.
“Imagine the building cost that need to bear by the developer before the mall starts operation,” he said.
He estimated that for a newly-opened carpark, the rental yield may be as low as 1% to 2%, or even lower.