Tuesday, April 8, 2008
Hong Kong-listed hotel and property group Far East Consortium International Ltd may set up a real estate investment trust (REIT) comprising several Malaysian assets worth some RM800 million, sources say.
The trust vehicle may be listed either on Bursa Malaysia or the Singapore Stock Exchange.
If this plan takes off, it would be Far East's second planned REIT as it is also spinning off seven hotels for a listing in Hong Kong and raising HK$4 billion (RM1.64 billion) from this exercise.
One source told Business Times that the properties would include Far East's hotels here and possibly even one property owned by Malaysia Land Properties Sdn Bhd (Mayland).
Far East and Mayland have a common shareholder in Tan Sri David Chiu Tat-cheong. Chiu is the deputy chairman of Far East.
Far East may sell Malaysian properties such as the four-star Dorsett Regency in Bukit Bintang, Kuala Lumpur, the five-star Sheraton Subang and the Grand Dorsett Labuan Hotel (previously known as Sheraton Labuan).
The recently-completed Maytower Hotel Serviced Apartments and soon-to-be-ready RM100 million hotel in Johor Baru will also be part of the trust.
"All the hotels would add up to a value of about RM500 million," the source said.
Apart from Far East's own properties, Mayland may pump in the Hartamas Shopping Centre into the REIT, adding another RM300 million to the size of the property trust.
Business Times was unable to contact representatives from the companies.
Meanwhile, it is believed that Far East prefers to list the REIT in Singapore as the REIT market there is more mature and Singapore offers better perks for the listing.
Compared with Singapore, the Malaysian market is said to offer less incentives for the listing of REITs.
For example, the withholding tax for foreign investment is 10 per cent. In Malaysia, the tax is 20 per cent.
"They (Far East) are still considering where to list," the source said, adding that its decision could be swayed by rulings which could make it more favourable to list in Malaysia.
By New Straits Times (by Vasantha Ganesan)
Historic makeover - Sentul West and East show how a once decaying area can be given an invigorating new lease of life
The d6 commercial units contain garden office suites
Unconventional layouts such as this, which provide for walkways opening to the sky, have led to brisk sales
Kuala Lumpur’s skyline is becoming quite heavily dotted with cranes of the mechanical kind. Though nothing like the world cities of Dubai or Shanghai, it is obvious that the country’s capital and financial centre is punching above its weight and fast becoming a happening place.
Powered by an economic boom, KL is a city furiously on the move, growing with iconic skyscrapers designed by some of the world’s best architects that are transforming numerous sites within and around the city centre.
In the KL Golden Triangle, the 88-storey Petronas Twin Towers in the Kuala Lumpur City Centre project has helped put KL on the world map and taken some development pressure off the city’s original downtown precinct. And in the city fringe location of Sentul, the Sentul West and Sentul East urban renewal projects promise to enhance quality of life, improve environmental sustainability and augment value for those who opt to invest in them.
Seeing is believing
Without a doubt, the capital has been reinvigorated by the physical transformation of Sentul, which until early this millennium was plagued by derelict buildings, traffic congestion and the absence of leisure and recreational amenities for the community.
Though rich in history – its origins go back as far as the late 1800s, when it was a bustling commercial area centred around the main railway station – neglect and increasing criminal activities caused the area to decay.
Visitors to Sentul today P8 u PROPERTY NEW STRAITS TIMES SATURDAY, APRIL 5, 2008 would find this hard to believe. Several international celebrities, including world-famous shoe couturier Datuk Jimmy Choo, members of the country’s royalty and the expatriate community began making the place their home when The Maple at Sentul West condominium was offered for sale in July 2003.
Since then, the project has appreciated some 62 per cent from its initial launch price of RM260psf and can generate annual returns of 13.5 per cent!
Sentul’s pearly lustre
Credit for Sentul’s transformation must be given to public-listed YTL Land & Development Bhd (YTLLD), a subsidiary of YTL Corp Bhd, which recognised the area’s potential in the early days.
It knew that historic landmarks can add value, provide aesthetic interest and enhance marketability of the properties surrounding them. And it knew these landmarks could become more precious as the world becomes more developed.
These were among its reasons for undertaking the redevelopment of a 294-acre site in the former railway town, and why Sentul’s history has managed to find a place in the future.
An example is the former locomotive superintendent’s office, which is now the Sentul West and Sentul East Sales Gallery – the one-stop centre showcasing the two very different lifestyles that define the area today.
Lifestyle amenities at Sentul West
Sentul West’s character is depicted by the 35-acre Sentul Park, a former golf course that was transformed into the country’s first and only private gated green lung in July 2006.
Also giving the precinct its unique identity are the KL Performing Arts Centre (KLPac) and the Sentul Park Koi Centre, two attractions that have gained international recognition.
KLPac, which was created to “bring the arts to the community”, won the Special Award for National Contribution in the 2007 Malaysia Property Awards competition organised by the local chapter of the International Real Estate Federation (or Fiabci), while the Sentul Park Koi Centre, which opened in February 2006, is the only one of its kind outside Japan dedicated to the art of Koi breeding.
Last year, 16 of the 22 Koi it produced went on to win prizes at the 2007 All Japan Combined Nishikigoi Show.
(The masterplan of Sentul West and Sentul East was also recognised by Fiabci last year as being the best in the country.)
Exuding exuberance in Sentul East
In contrast to Sentul West, Sentul East has become known as a lively and energetic hub for the younger professional urban set.
Residential accommodation here comes in the form of The Tamarind and The Saffron condominiums, which struck such a chord with buyers that their units have so far appreciated between 27 and 45 per cent.
The 498-unit Tamarind was launched in May 2002, while the 467-unit Saffron was unveiled just over four years later in July 2006.
YTLLD’s commercial offering, the d7 and d6 retail shops and boutique offices, too have experienced enthusiastic response.
When the first, d7, was launched in September last year, it took just an hour for 100 units to be sold while 90 per cent of the d6 units were sold when they were put on the market in January this year, despite being 20 per cent pricier.
This goes to show the sway Sentul East’s trendy, carefree-lifestyle theme and cosmopolitan urban environment have over its target audience, comprising those in creative fields as well as professionals such as architects, designers and lawyers.
Of course, credit to the sales performance should also be given to the unconventional way the units were designed, with the d7 containing Small Office Home Office (SoHo) suites and the d7 with Sky Offices.
Making things happen
Since YTLLD stepped foot into Sentul, it has done things only a few other developers – or local councils, for that matter – have managed.
It bought into a run-down and fast decaying area, but in a matter of just six years, returned to the city a highly liveable and invigorating address that is being energised by KL’s beautiful people.
Should other parts of the country be in need of a role model as they embark on reinvigoration or transformation exercises, this is where they should look.
By New Straits Times (by Lim Lay Ying)
Lim Lay Ying is managing director of Research Inc (Asia) a company specialising in market research and consultancy for all facets of real estate development.
The enclave's 77 units will enjoy panoramic lake views
It certainly does pay to be rich and influential in the Klang Valley.
While prospective buyers eagerly await the latest news on Sunway City Bhd’s (SunCity) much anticipated Sunway South Quay development, word has it that the developer is already offering the privileged few the opportunity to register their interest in its yet-tobe- launched first phase.
According to sources, invitations to its BayRocks residential enclave were sent out to a platinum list two months ahead of the expected launch date in May.
With starting prices said to be in the region of RM4.5 million, it’s little wonder that SunCity is addressing the elite crowd.
The exclusive enclave, housing 77 luxury bungalow villas, makes up part of a RM3.7 billion high-end integrated community the developer describes as its “cream of the crop”.
The 178-acre Sunway South Quay within Bandar Sunway in Selangor is designed to be a vibrant waterfront precinct comprising a mix of designer residences, upmarket business and serviced suites as well as commercial components.
They will take shape around a 28-acre lake, with the BayRocks residences fronting it.
Although SunCity has yet to make details of the phase public, it is understood that it will comprise bungalows of 6,500sq ft to 7,000sq sitting on land of between 7,164sq ft and 11,346sq ft.
Buyers will have six designs to choose from.
Future residents at BayRocks will not only enjoy a panoramic view of the lake, but also benefit from the green theme planned for the community, which will be enveloped by extensive landscaping.
SunCity said Sunway South Quay is “the next level in the company’s vision to provide authentic resort living within the city”.
“It will be an incomparable benchmark in high-end lifestyle in a location that continues to grow in prominence among both local and international investors.”
The location is served by highways such as the Federal Highway, New Pantai Expressway, the Damansara-Puchong Highway and the Shah Alam Expressway.
In addition to BayRocks, another residential component that has been put on the starting block is a RM200 million condominium, which has already been sold en-bloc to Korean investors.
By New Straits Times (by Chris Prasad)
For detail information, please visit the website: www.sunwaycity.com
Owners and developers looking to be part of a community that is working towards putting the region’s real estate on the global investment radar could consider membership in the Asian Public Real Estate Association (Aprea).
This private NGO is shaping up to represent Asia Pacific’s publicly traded real estate sector, and has 125 members to date. Among them, listed property companies, property trusts, investment banks, property securities fund managers, real estate consultants, corporate advisers, service providers, investment researchers and even teaching institutions.
Formed in June 2005, Aprea’s founding members include ARA Trust Management, Ascendas-MGM Funds Management, Westfield Group, Macquarie Bank and Hongkong Land.
According to Aprea, its aim is to “unite the currently fragmented Asia Pacific publicly listed real estate sector” and encourage greater investment by delivering a clear message from the industry to investors and the media.
It is also keen on ensuring appropriate representation in global indices, improving the operating environment for members via tax efficiency and enhanced regulatory frameworks and unifying the industry through an integrated platform.
These ambitions seem to dovetail with the effort by many Malaysian entities to market their properties abroad, and with the government’s objective of branding the country an International Property Destination.
Views that Asia is a riskier investment prospect compared to Europe or the United States are also being addressed by Aprea.
The body said this will come by encouraging members to adopt international best practice standards and the development of a robust reporting and corporate governance structure
With the removal of impediments and negative impressions, Aprea said capital inflows will be faster and more efficient.
Following its setting up of offices in Hong Kong/Macau and Japan, it recently opened its Singapore chapter.
Aprea chief executive officer Peter Mitchell said the island republic’s listed real estate market is one of the world’s fastest growing and the new chapter is the result of its increasing attractiveness to the global investment community.
Singapore has the second largest Real Estate Investment Trust (REIT) market in the region with a capitalisation of US$21.6 billion (US$1=RM3.20) – US$24.4 billion less than first-place Japan.
In third place is Hong Kong with US$8.5 billion, followed by Taiwan (US$1.7 billion) and Malaysia (US$1.6 billion).
Despite the United States’ subprime mortgage crisis and global credit crunch, Mitchell said “2008 will present a period of good opportunities for companies that are well capitalised and don’t rely on credit”.
Describing the REIT markets in Japan, Hong Kong and Singapore as mature, he said the general slowdown in the global economy could see a return to fundamentals.
“We have seen the end of financial engineering,” he said, adding that large institutional investors such as US pension funds are now allocating sizeable budgets to Asian real estate.
Last year, the California Public Employees’ Retirement Scheme (CalPERS) and California State Teachers’ Retirement Scheme (CalSTERS) increased their exposure to Asian real estate by six to eight per cent, with CalPERS investing US$1 billion.
Australian funds, too, such as National Australia Bank’s structured property finance business, nabCapital, plans to make more inroads into the region following demands by its clients for the company to “take a more active role in sourcing opportunities in Asian real estate”.
Hong Kong’s and Singapore’s REITs, Mitchell said, are beginning to mature as an asset class and “unlike the US economy, Asian economies are expected to rise” which would further drive their REITs.
To accelerate the pace, he said Aprea is seeking to introduce “international best practice standards (as well as) sponsor and publish research and analyses”.
By New Straits Times (by Zoe Phoon)