CONFIDENTIAL AP/FEB 2022/RES611

UNIVERSITI TEKNOLOGI
MARA FINAL ASSESSMENT

COURSE : STATUTORY VALUATION

COURSE CODE : RES611
EXAMINATION : 8 FEBRUARY 2022
TIME : 3 HOURS (2.15P.M TO 5.15PM)

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of two (2) parts: PART A (2 Questions)

PART B (2 Questions)

2. Answer ALL questions in English. Answer PART A and PART B in a separate Answer Booklet.
Start each answer on a new page.

3. Answer should be handwritten. Please save submission in a PDF form. Your file must be saved
according to the following file name format:

Student Full Name_Student ID_Group

e.g.: Nazim bin Alias_2021921811_AP2255X

4. Please submit the written final test in the Google Classroom tray create by your respective lecturer.
Alternatively, please re-confirm with your lecturer the mode of submission preferred. Any late
submission will be penalized. The time given for submission is from
5.16 PM to 5.45 PM. Any late submission will be penalized.

5. Plagiarism is strictly prohibited. Students will be held responsible for any plagiarism case with the
UiTM Academic Regulation [Amended 2021].

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 7 printed pages

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 CONFIDENTI 2 AP/FEB

PART A

QUESTION 1

Majlis Bandaraya Iskandar Puteri has requested your company to value Star Cineplex located on level 5
of a shopping complex in Iskandar Puteri, Johor Bahru for rating purposes. The tone of list and the
valuation list for Majlis Bandaraya Iskandar Puteri is 1st January 2022.

The information of the cinema are as follows:

Operation of Cineplex 6 years

Total area of Cineplex 4,000 sq ft.
Tenure Freehold
Rental rate RM 12per sq ft to RM 15 per sq ft per month
Number of seats 200 per cineplex
Total number of Cineplex Halls 2
Rental of kiosk:
Cinesnax RM 2,000 per month
Cinecafe RM 2,500 per month

An analysis of the last three years trading accounts revealed the following:

Showtime Ticket Price (RM) No. of Shows Average

Occupancy Rate
11.15 am 12 365 45%
12.15 pm 12 365 50%
3.15 pm 12 365 47%
6.15 pm 12 365 52%
7.15 pm 12 365 50%
9.15 pm 12 365 75%
Saturday Midnight 15 52 90%
Sunday Matinee 15 52 85%

The entertainment tax on ticket sale is 20%. At every show, the gross receipt from trailer
advertisements is RM450. Operating expenditures for Star Cineplex are as follows:

1. Salary, EPF, Socso RM 8,200 per month

2. Electricity RM 750 per month
3. Water RM 400 per month
4. Local films rental RM 8,000 per month
5. Foreign films rental RM 10,000 per month
6. Operation license RM 750 per month
7. Advertisement RM 1,500 per month
8. Business insurance RM 2,500 per month
9. Projector maintenance RM 2,000 per month
10. Management RM 3,000 per month
11. Interest on working capital @10% RM 400,000

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Property outgoings per annum are as follows:

1. Repairs RM 5,000
2. Fire insurance RM 2,100
3. Quit rent RM 7,000
4. Assessment rates RM 20,000
5. Management RM 8,000

Rate of assessment imposed by Majlis Bandaraya Iskandar Puteri are as follows:

Type Rate of Assessment

Residential 0.13%
Commercial 0.20%
Industry 0.30%
Kampung (Rezab Melayu) 0.10%
Agricultural 0.10%

According to the Malaysian Valuation Standards Sixth Edition, 2019 provided by the Board of Valuers,
Appraiser, Estate Agent and Property Managers, Malaysia, determine the value of the subject property for
rating purposes and the payable amount for assessment by using an appropriate method of valuation and
assumptions.

(25 marks)

QUESTION 2

CIMB Bank Berhad Kajang Branch seeks your advice on the reserve price of the property Lot
No. 1799, Mukim of Sepang, District of Sepang, Selangor for foreclosure purposes. The
subject property is a piece of land with an area of approximately 5.6 hectares. The location is
suitable for the property development.

The price of land is RM28 per sq ft. Upon investigation the land has the potential for mixed
development scheme. The development period for this project takes 3 years to complete. The
details of the Gross Development Value (GDV) as follows:

Selling Price
Type No. of units (RM/unit)
1. Single storey terrace house 200 250,000
2. Double storey terrace house 160 400,000
3. Double storey semi-detached house 80 550,000
4. Double storey shophouse 24 850,000

The proposed development is allocated 30% of each type to Bumiputera at a discount rate of 7%.

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The Total Development Cost (TDC) for the proposed development project are as follows:

1. Preliminary cost is RM980,000.

2. Site Preparation RM78,000 per hectare
3. Survey and subdivision fees RM 950 per unit
4. Infrastructure RM4,000 per unit
5. Building cost:
 Single storey terrace house RM78,000 per unit
 Double storey terrace house RM105,000 per unit
 Double storey semi-detached house RM130,000 per unit
 Double storey shophouse RM120,000 per unit
6. Contribution to authorities RM480,000
7. Professional fees 9% of infrastructure and building cost
8. Management RM25,000 per month
9. Sales and advertisement 2% of Gross Development Value
10. Finance cost 9% of all costs (2 - 6) for half development period
11. Contingencies 5% on building cost
12. Developer's profit 20% of Gross Development Value

Based on the above information and by using a suitable method of valuation, estimate the reserve price
of the subject property for foreclosure purposes according to the Malaysia Valuation Standards Sixth
Edition, 2019, provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers,
Malaysia. You may make assumptions if necessary.

(25 marks)

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 CONFIDENTI 5 AP/FEB

PART B

QUESTION 1

Lot 2212 located in the Mukim of Bagan Serai, District of Krian, State of Perak is a piece of agricultural
land planted with mixed fruit trees. The age of the fruit trees is between 10 to 12 years.

The subject lot has been gazetted under Section 4 of the Land Acquisition Act 1960 (Amended) vide
Gazette Notification No. 999 dated 2 nd November 2020 for “Projek Satelit Ternakan Rusa”. This is
followed by another gazette under Section 8 of the same Act, Gazette Notification No. 916 dated 12th
October 2021.

The details of the subject property are as follows:

1. Land area : 49.5 acres

2. Tenure : Freehold
3. Location : Road frontage lot
4. Express condition : Tanah ini hendaklah digunakan untuk tanaman
buah-buahan sahaja
5. Area affected : 49.0 acres
6. Topography : Flat and same level as the existing road.
7. Improvement : A single storey detached house (permanent structure)
: Completed in June 2015
: Main floor area – 250 square metres
Ancillary floor area – 100 square metres

Currently the building is occupied by the landowner and his family.

The landowner has appointed your firm to represent him on the claims for compensation the acquisition.

Upon further investigation on the subject property and the sales transaction of similar properties in the
surrounding area, you have gathered the following information:

Lot Area Date of Consideration Notes

No. (acre) Transaction
2134 47.50 5/11/2020 RM3,325,000 Road frontage lot with
freehold tenure. Land
planted with fruit
trees, aged between 9
to 11
years.
2124 49.25 1/11/2020 RM3,152,000 Road frontage lot with
freehold tenure. Land
planted with mixed
fruit trees, aged
between 10 to
12 years.

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2123 50.0 28/10/2020 RM2,800,000 Road frontage lot with

freehold tenure. Land
planted with mixed
fruit trees, aged
between 10 to 12
years.
Malay Reservation
Land
2125 48.75 30/9/2018 RM2,681,250 Freehold tenure with
road frontage. Land
planted with mixed
fruit trees, aged
between 10 to 13
years.

The current construction cost of similar buildings is in the range of RM1,700 to RM1,800 per square
metre.

As a result of the acquisition, the owner has to build a new building on the remaining land area which is
still remained as a road frontage lot.

Based on the information provided, advice the client on the amount of claims for compensation allowed
under the Land Acquisition Act 1960 (amended) and according to the Malaysia Valuation Standards
Sixth Edition, 2019, provided by the Board of Valuers, Appraisers, Estate Agents and Property
Managers, Malaysia All calculations must be reasonably supported

(25 marks)

QUESTION 2

a) Ramlee purchased a bungalow for consideration of RM850,000. The price was paid in full on 25th
August 2017. The bungalow was transferred to him on 25 th November 2021. Other costs incurred
by Ramlee were for stamp duty and the cost of the extension to the bungalow is at RM100,000

In December 2021, Ramlee received RM60,000 from a developer as compensation for damages to
his bungalow caused by earthworks carried out on the adjacent land. In addition he also received
RM30,000 from the insurance company for the damage incurred.

In January 2022 Ramlee migrated to New Zealand and sold his bungalow for RM1,500,000.00.
The sale and purchase agreement was signed on the 2 nd November 2021. However Ramlee only
received the payment on 30th January 2022. In connection with the sale Ramlee incurred the
following expenditure:

Valuation fee - RM 5,000 Legal

fees for defending the title - RM 7,000 Estate
agent fee - RM45,000

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 CONFIDENTI 7 AP/FEB

i) Determine the disposal price and acquisition price of the transaction.

(10 marks)

ii) Compute the real property gains tax, if any, payable by Ramlee.
(5 marks)

All valuation must be complied with the Malaysia Valuation Standards Sixth Edition, 2019,
provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers, Malaysia.

b) Wisma Dato’ Karim was acquired on 12 th September 2018 for RM5,000,000 divided into 5 self-
contained dwelling places. Dato’ Karim used one of the dwelling place as his residence.

On 22nd January 2022, the whole building was sold for RM7,500,000. Dato’ Karim elects for
private residence exemption under Section 8, Schedule 3 of RPGT Act 1976.

In selling the properties, Dato’ Karim incurred the following expenditure:

Renovation (Private Resisdence) - RM150,000

Legal fees - RM 20,000
Estate agent fee - RM225,000

Compute the Real Property Gains Tax, if any, payable by Dato’ Karim.

All valuation must be complied with the Malaysia Valuation Standards Sixth Edition, 2019,
provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers, Malaysia.
(10 marks)

END OF QUESTION PAPER

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