DISCLAIMER AND COPYWRITE

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1 DISCLAIMER AND COPYWRITE To the best of our knowledge, all information included here falls under the fair use or public domain guidelines of copyright laws. We strive for accuracy but cannot be held responsible for any errors in information featured in the slides or incorrect attributions. REI Group of Companies uses reasonable efforts to include accurate and up to date information however REI Group of Companies makes no warranties or representations as to its accuracy. REI Group of Companies assumes no liability or responsibility for any errors or omissions in the content. The quotes, articles, news and views are not necessarily representative of the views of REI Group of Companies and its directors and Management. This Presentation has been shared for personal use and knowledge ONLY. Any inappropriate use will be prosecuted according to the law and any total or partial use of this presentation for public viewing or publishing must be pre-authorized in writing by REI Group of Companies.

2 Greater KL and Smart Cities Conference Affordable and financeable housing projects as part of Smart City Platform Connecting the dots between economic - demographic trends and housing projects affordability REI Group of Companies Presentation by Dr. Daniele Gambero

3 The six pillars of Smart City The Golden Ratio Balance Smart City: the logic of the six dimensions Global / Malaysian economic performance Malaysian demographic indicators Malaysian Wealth distribution Affordable must be also financeable

4 The equilibrium of the Golden Ratio Balance P E O P L E L I V I N G

5 GLOBAL & MALAYSIAN ECONOMY - FACT FILE USA EU UK JAPAN AUSTRALIA MALAYSIA GDP Growth 2.52% 0.12% 0.65% 0.65% 0.65% 4.70% Gov. Debt as % of GDP % 90.60% 91.10% 226.1% 20.7% 53.10% Gov. Deficit as % of GDP -4.10% -3.7% -7.40% -9.6% -3.00% -4.50% Balance of Current Acc in USD Billion % 16.6 Inflation 1.5% 1.5% 2.7% 0.2% 2.4% 3.2% Unemployment 7.3% 10.8% 7.7% 4.1% 5.7% 3%

6 REGIONAL & MALAYSIAN ECONOMY - FACT FILE VIETNAM INDONESIA THAILAND MALAYSIA AUSTRALIA SINGAPORE GDP Growth 5.54% 5.72% 0.60% 4.70% 0.65% 5.50% Gov. Debt as % of GDP 37.30% 23.6% 44.30% 53.10% 20.7% 97.90% Gov. Deficit as % of GDP -6.90% -1.77% -4.10% -4.50% -3.00% 1.3% Balance of Current Acc in USD Billion % 3.4 Inflation 4.65% 7.75% 1.22% 3.2% 2.4% 2.25% Unemployment 2.22% 6.25% 0.62% 3% 5.7% 1.8% Population (Million) Global competitivnes index (WEF ) Stage of development (WEF ) Stage 1 Factor Driven Stage 2 Efficiency Driven Stage 2 Efficiency Driven Stage 2 to 3 Efficiency to Innovation Stage 3 Innovation Driven Stage 3 Innovation Driven

7 MALAYSIAN DEMOGRAPHIC - FACT FILE MALAYSIAN POPULATION PROJECTION BY AGE GROUP YEAR 0-14 ('000) % 30 YRS CHANGE ('000) % 30 YRS CHANGE 65 + ('000) % , % 19, % 1, % , % 20, % 1, % , % 22, % 2, % 30 YRS CHANGE , % - 3.7% 23, % % 2, % % , % 24, % 3, % , % 25, % 3, % , % 26, % 4, %

8 MALAYSIAN DEMOGRAPHIC - FACT FILE ESTIMATE GROWTH M +1.6 M +6 M +2.6 M

9 MALAYSIAN MIGRATION FLOWS - FACT FILE 22,000, Malaysian Migration Flow Rural to Urban Areas 21,000, ,000, ,000, ,000, ,000, ,000, ,000, MALAYSIAN FLOW Source: World Bank Statistics 2012: 72.5% of the Malaysian population lives in urban areas 2012: 21,000,000 Malaysians live in urban areas 3.5% growth every year

10 MALAYSIAN DEMOGRAPHIC - FACT FILE URBAN GROWTH Klang Valley 1992 Klang Valley 2012

11 MALAYSIAN DEMOGRAPHIC - FACT FILE URBAN GROWTH Klang Valley 1992 Klang Valley 2012

12 MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH: Malaysian average per capita income 2013 (PPP) Source IMF/WB USD17,046 per year = RM4,400 (per month) Malaysian Wealth Distribution Lowest 20% Highest 20% Share 5% of Malaysian wealth Share 40% of Malaysian wealth = Median 60% share 55% 18,000,000

13 MALAYSIAN WEALTH DISTRIBUTION - FACT FILE

14 MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH: PER CAPITA INCOME STATISTICS State GDP per Capita at current prices State by 2012 % on state Malaysia const prices Population Population 2012 RM RM RM RM in 2012 % RM Billion Kuala Lumpur 57,040 62,075 68,072 73,931 1,768, % 114,106 Sarawak 31,286 34,136 39,324 40,414 2,601, % 71,874 Pulau Pinang 30,098 33,601 35,188 37,006 1,664, % 52,530 Selangor 28,468 31,457 33,727 36,135 5,826, % 176,239 Malacca 25,397 28,328 31,093 33, , % 21,953 Negeri Sembilan 25,595 28,586 31,295 32,511 1,040, % 27,717

15 MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH: PER CAPITA INCOME STATISTICS State GDP per Capita at current prices State by 2012 % on state Malaysia const prices Population Population 2012 RM RM RM RM in 2012 % RM Billion Pahang Kuala Lumpur 20,548 57,040 23,008 62,075 26,066 68,072 26,197 73,931 1,560,600 1,768, % 5.90% 114,106 30,750 Johor Sarawak 18,878 31,286 21,329 34,136 23,593 39,324 24,574 40,414 3,537,360 2,601, % 8.68% 68,791 71,874 Terengganu Pulau Pinang 19,102 30,098 20,581 33,601 22,220 35,188 22,733 37,006 1,144,440 1,664, % 5.56% 19,627 52,530 Perak Selangor 15,809 28,468 17,341 31,457 19,362 33,727 20,569 36,135 2,496,960 5,826, % 19.44% 39, ,239 Sabah 15,515 17,118 19,038 19,010 3,537, % 44,434 Malacca 25,397 28,328 31,093 33, , % 21,953 Perlis 15,186 16,175 16,992 18, , % 3,535 Negeri Sembilan 25,595 28,586 31,295 32,511 1,040, % 27,717 Kedah 12,481 13,744 15,388 15,814 2,080, % 25,307 Kelantan 8,421 9,322 10,366 10,617 1,664, % 13,461

16 MALAYSIAN WEALTH DISTRIBUTION - FACT FILE DEFINITION OF AFFORDABILITY PARAMETERS 2012 PER CAPITA INCOME STATISTICS State State by state (est) Population in 2012 GDP 2012 per Capita at current prices 35% of monthly income = Loan Affordable House value (30 yrs BLR %) Yearly Monthly repayment Per capita Per household RM RM RM RM RM Kuala Lumpur 1,718,680 73,931 6,161 2, , ,000 Sarawak 2,501,000 40,414 3,368 1, , ,000 Pulau Pinang 1,654,640 37,006 3,084 1, , ,000 Selangor 5,626,240 36,135 3,011 1, , ,000 Malacca 832,320 33,550 2, , ,000 Negeri Sembilan 1,040,400 32,511 2, , ,000 Pahang 1,560,600 26,197 2, , ,500 Johor 3,337,360 24,574 2, , ,000 Terengganu 1,144,440 22,733 1, , ,500 Perak 2,396,960 20,569 1, , ,500 Sabah 3,437,360 19,010 1, , ,500 Perlis 208,080 18,119 1, , ,000 Kedah 2,080,800 15,814 1, , ,500 Kelantan 1,654,640 10, , ,000

17 MALAYSIAN HOUSEHOLD DEBT - FACT FILE 80.7% of the Malaysian Household debt is financed by the Banking System

18 MALAYSIAN HOUSEHOLD DEBT - FACT FILE Household NPL ratios, as per BN and MBB reports, have been falling dramatically over the past few years from 7.5% in 2006 to just 1.4% mid % of the Malaysian Household debt is financed by the Banking System

19 HOUSING EXISTING STOCK AND FUTURE SUPPLY SUSTAINABLE MARKET EXISTING STOCK AND ESTIMATE HOUSE SUPPLY AND DEMAND BY 2020 STATE SUPPLY OF LANDED TILL 2020 SUPPLY OF LOW COST TILL 2020 SUPPLY OF HIGH RISE TILL 2020 TOTAL HOUSES SUPPLY BY POPULATION BY 2020 ESTIMATE UNDER SUPPLY OF HOUSES BY 2020 KUALA LUMPUR 113, , , ,774 1,870, ,559 SELANGOR 833, , ,154 1,666,893 6,279, ,336 JOHOR 652, ,616 87,968 1,001,411 4,499, ,400 PENANG 204, ,780 63, ,411 1,633,703 61,157 MALACCA 138,607 50,244 18, , ,506 97,005 NEGERI SEMBILAN 265,638 90,725 47, ,824 1,276,244 21,591 PAHANG 230,251 69,856 17, ,969 1,674, ,251 PERAK 383,460 95,873 12, ,242 2,494, ,170 PERLIS 19,804 9,294 1,602 30, ,400 30,150 KELANTAN 67,511 12,722 4,189 84,422 1,533, ,782 TERENGGANU 91,254 43,173 1, ,453 1,045, ,168 KEDAH 247, ,217 3, ,100 1,947, ,057 SABAH 98,335 62,930 41, ,883 3,443, ,738 SARAWAK 189,640 51,915 14, ,448 2,543, ,304 GRAND TOTAL FOR MALAYSIA 3,536,100 1,725, ,416 6,171,360 31,399,685 3,476,669

20 MALAYSIAN AFFORDABLE HOUSING CHALLENGE CONCLUSIONS 1) Roundtable with all the stakeholders to define a new law platform. Lessons learnt and case studies from other regional countries (Singapore, Hong Kong ) 2) Cooperatives as special building vehicle for lower affordability homes (RM80,000 to RM200,000). Lessons learnt and case studies from other countries around the world (i.e. Sweden, Norway, Italy..) 3) Revision of current guide-lines in terms of low-cost quota and rules (i.e. stop selling, start renting ) 4) Revision of current Bank Negara financing guide lines for First time home buyers 5) Implementation of new construction materials and technologies by developers. 6)..TBA

21 Thank you Facebook Daniele Gambero For questions please to:

22 DISCLAIMER AND COPYWRITE To the best of our knowledge, all information included here falls under the fair use or public domain guidelines of copyright laws. We strive for accuracy but cannot be held responsible for any errors in information featured in the slides or incorrect attributions. REI Group of Companies uses reasonable efforts to include accurate and up to date information however REI Group of Companies makes no warranties or representations as to its accuracy. REI Group of Companies assumes no liability or responsibility for any errors or omissions in the content. The quotes, articles, news and views are not necessarily representative of the views of REI Group of Companies and its directors and Management. This Presentation has been shared for personal use and knowledge ONLY. Any inappropriate use will be prosecuted according to the law and any total or partial use of this presentation for public viewing or publishing must be pre-authorized in writing by REI Group of Companies.