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Monday, September 12, 2011

Penang catches attention of Klang Valley developers

KUALA LUMPUR: Analysts think a trend may start where Klang Valley property developers look to buy a stake in real estate companies in Penang to take advantage of the state's booming sector.

CIMB Investment Bank Bhd research head Terence Wong said this is likely to happen over time.

"This could be continuing but not in a short time. It could happen once in a year," he said.

Investing in the property market in Penang is still a solid option.

"This is because property prices in Penang are firm and almost on par with what is being offered in the Klang Valley currently," he said.

On August 29, conglomerate Sime Darby Bhd said it was buying 30 per cent of Eastern & Oriental Bhd (E&O) for RM766 million to expand its portfolio in property development and hospitality, beyond Greater Kuala Lumpur.

Having a stake in E&O will immediately give Sime Darby access to present and future property projects in Penang.

Analysts have also said that it is cheaper to gain control of a listed company with landbank in Penang than buy large chunks of land in the island.

Three Klang-Valley based developers have already ventured into Penang and launched several properties.

IJM Land Bhd has launched it RM422 million The Light Collection I & II while SP Setia Bhd has introduced its RM60 million Brooks Residences, RM230 million Reflections condominium and semi-detached schemes for its Setia Pearl Island project.

Mah Sing has launched its the first phase of its Legenda@Southbay, for RM71 million.

By Business Times

IJM Land leads property stocks lower

IJM Land Bhd fell to a one-year low, leading Malaysian property developers lower after the industry was cut to “market weight” from “overweight at UOB- Kay Hian Holdings Ltd, which said the property valuation cycle has peaked.

IJM Land slid 2.1 percent to RM2.29 at midday, set for its lowest close since Sept. 13, 2010.

UOA Development Bhd lost 1.3 percent to RM1.49 and Mah Sing Group Bhd dropped 0.9 percent to RM2.20.

SP Setia dropped 3.1 percent to RM3.50.

By Bloomberg