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In 2010 the Malaysian property market enjoyed capital growth figures of between 15% and 30%. The Directors believe that there remains much potential for investing in residential, commercial and development property in Malaysia. The Board is not alone in believing that the Malaysian government's Economic Transformation Programme may assist in creating new prospects and opportunities in the Malaysian real estate market.
The Board is aware of the media coverage over the past year of the potential for a real estate bubble in various jurisdictions in Asia, including Malaysia. Notwithstanding such concerns over potential overheating and responsive measures such as the imposition in early November 2010 of a maximum loan-to-value ratio of 70% for third home mortgages in Malaysia by the Malaysian Central Bank, Bank Negara, the Board believes that there remains significant growth potential in the real estate sector in Malaysia. This is in part due to the limited supply of land in certain prime areas in Malaysia, such as downtown Kuala Lumpur, and the recent relaxation of certain of the restrictions on foreigners purchasing real estate in Malaysia, following which there been an increase in direct foreign investment in real estate from in particular China, the United States and Japan.
The Company will focus on the commercial and resorts property sectors in Malaysia. In particular, the Company intends to seek to collaborate with Malaysia's Ministry of Tourism in promoting the "Malaysia My Second Home Programme (MM2H)", by seeking to promote and sell the properties the Company develops to foreigners seeking to participate in the MM2H programme.