COMPANY PROFILE

Company Name: xxxx SDN BHD

Company registration number: xxxx

Date of Incorporation: December 2014

Nature of business: Property marketing and consulting

Date of commencing business: N/A

Authorised capital: RM 100,000.00
Paid-up capital: RM 100,000.00

Business address: xxxxx KUALA LUMPUR

Company’s directors: xxxx

Contact person: xxxxx

Designation: COMMUNICATION COORDINATOR

Contact No.: xxxx

Email: xxxxx

Website: xxxx

Tech Start-up Description:

  1. PROPERTY MARKETPLACE WITHOUT MIDDLEMAN/BROKER
  2. REAL ESTATE PROFESSIONALS “AUTO” MATCHING

PROJECT PROPOSAL

Project Title: DIRECT PROPERTY CONNECTION

What is the problem statement?

In the real estate sector, the buying and selling of properties are highly dependent on brokers/agents. This is makes every sales/lease very dependent. The inherent problem is there are more properties needed attention than the number of brokers/agents joining the industry. This resulted in brokers/agents providing inaccurate data, outdated information and sometimes misleading marketing strategies. Most brokers/agents are not adding value to the sales/lease but yet charging a commission ranging from 3% to 10% for each successful sale or lease, however all details are fed by owners. In view of this, owners are better off selling or leasing their own properties while passing 3% to 10% savings to their buyers/tenants.

What is the technology solution?

  • Customised Responsive Website
  • Android Mobile App (Native)

What is the methodologies of the proposed solution?

Any property owners can join for free. As members, they can access to our web and mobile application platforms to list their properties for sale/lease. They have full control over their tenants or buyers.

Consumers, buyers and tenants can join for free. As members, they can view a list of comprehensive properties for sale or lease directly from owners. They have full access to up-to-date and genuine information, rather than misleading marketing info.

Real estate professionals and investors can join for free. As members, they can connect with a wide range of real estate professionals, funding agencies, and meet joint venture partners. This platform allows real estate professionals connect with potential investors to raise funding without paying for referral fee/introducer commission.

Here are some of the key benefits:

  • Tenants/buyers could enjoy saving up to 10% of the property/rental pricing
  • Real estate professional could get connected with other professionals/investors without wasting time building relationship or asking for referral

Is there a “hungry” market need?

As this is the first in Malaysia, and probably the first in this region, it will serve as an avenue for property owners to sell/lease their properties to potential buyers/tenants. According to The Edge 14.3.2016, the latest survey by the Real Estate Housing Developers Association (REHDA) revealed that the numbers of respondents that reported unsold property units averages at 60% in 2015. That means, out of 10 units, 6 remained unsold or remained vacant. Hence, this survey indicates that there are many owners out there wanted to sell or lease their properties.

What is the market size of the targeted market?

The below data indicates the property transacted price and units in Malaysia.

Bilangan dan Nilai Pindah Milik Harta Tanah dan Perubahan Tahunan 2000 – 2015
Volume and Value of Property Transaction and Annual Changes 2000 – 2015
Tahun / Year Jumlah Pindah Milik / Volume of Transaction (‘000) Perubahan Jumlah Pindah Milik /
Change in Volume of Transaction ( % ) yr-on-yr
Nilai / Value (RM Billion) Perubahan Nilai / Change in Value
( % ) yr-on-yr
2000 240.06 6.3 41.31 20.0
2001 242.63 1.1 38.63 -6.5
2002 231.39 -4.6 38.64 0.0
2003 243.38 5.2 43.43 12.4
2004 293.21 20.5 59.96 38.1
2005 276.51 -5.7 56.78 -5.3
2006 283.90 2.7 61.60 8.5
2007 309.46 9.0 77.14 25.2
2008 340.24 9.9 88.34 14.5
2009 337.86 -0.6 81.00 -8.3
2010 376.59 11.4 107.44 32.6
2011 430.40 14.3 137.83 28.3
2012 427.52 -0.7 142.84 3.6
2013 381.12 -10.9 147.87 3.5
2014 384.06 0.8 162.97 10.2
2015 362.11 -5.7 149.90 -8.0

According to Bank Negara data on property transacted in Malaysia, it indicates an average 11.6% per annum growth over the last 15 years. Last year alone, close to RM150 billion property transacted. And if middlemen were charging a commission of 3% per transaction, RM4.5 billion can be saved by consumers. This is a huge saving!

What is the addressable market size?

This tech start-up offers as an alternative to buying, selling, or leasing with a broker/agent. This scenario is like the transport industry, some customers prefer riding taxi and some prefer “uber”. Uber is cheaper because the tech connects drivers and consumers directly.

This tech start-up would be a pioneer in Malaysia property market and being a pioneer in the highly competitive tech industry is crucial, which can be seen in the case of iProperty (retains lion market share because it is the pioneer)

Assuming we captured 10% of the market share, which translate to a market size of RM15 billion in 2017 onwards. In conclusion, 10% market share would offer our seller and buyers a whopping RM450 million in savings.

What about industry competitor and price competitiveness?

As of August 2016, there is no direct competitors in Malaysia. Price competitiveness will be low as this web we are launching will be its very first in the nation. Competition could arise (maybe) in a few years’ time.

What is our exit strategy plans?

There are two options we are seriously considering as exit plan on the 3rd or 5th year. First would be private offerings and secondly, it would be IPO. Based on our estimated gross profit, the entire company is worth;

3rd year: RM714,000 (gross profit) x 5 = RM3,570,000

4th year: RM1,434,000 (gross profit) x 5 = RM7,170,000

 5th year: RM2,034,000 (gross profit) x 5 = RM10,170,000