Malaysia Property News | Property Market In Malaysia

Dream homes remain a dream

2012-02-09T10:34:00.000+08:00

Stalled: In the past years, these only visible sign of development were the concrete beams for Casa Gemilang in Sg Pusu, Gombak.

For the property buyers of Alam Perdana Court in Ijok and Casa Gemilang in Gombak, their dream home is still far from reality.

They have laboured through many years to resolve the issues surrounding the projects.

The buyers were caught by surprise that the land in both development was marked for agricultural purpose instead of residential, and this status has left them in limbo until today.

The Casa Gemilang project consists of Desa Gemilang double-storey terrace houses and Casa Gemilang service apartments and townhouses launched in 2003.

Phase 1 of Desa Gemilang ran into trouble over the environmental impact as it was sited next to a slope and encroaching into a forest reserve.

A stop-work order was issued by Selayang Municipal Council in 2006.

Casa Gemilang buyers committee chairman Jaafar Ismail said the developer faced many issues, hence the project dragged on for many years as the company failed to comply with safety standards.

“Unfortunately, according to the Housing Development Act 1966, townhouse comes under commercial development, therefore it does not fall under the purview of the Housing and Local Government Ministry (KPKT) before 2007.

“However, our main question is how did the developer manage to develop a project on agricultural land,” he asked.

Jaafar said 40% of disbursement had been paid out by the bank, which came up to about RM6mil, but there is no construction at the site for Casa Gemilang.

“The project was marked as abandoned by KPKT on Jan 9, 2009 and the ministry had been unable to help us.

“ We want to know what happened to our money totalling RM6mil paid via disbursement, because the project does not seem like it will ever take off based on what we have seen so far,” he said.

“We staged a protest in front of the developer’s office on Jan 18, 2011 as patience was running thin.

“At the time, the developer agreed to return the deposit and payments made for those whose sale and purchase agreement was still valid.

“But the developer tried to get buyers to sign the Deed of Rescission and Revocation that was never referred to the bank and was biased so we advised the buyers not to sign anything,” he added.

For Dr Roslina Ab Wahid, chairman of the Alam Perdana Court bungalow lot purchasers group, her woes began in 2002 when she purchased a lot and the developer failed to pay the premium to develop the land.

The project consisted of bungalows, single-storey and double-storey houses spread over 400ha of land, affecting some 400 buyers. Although part of the development had been completed, the project was abandoned.

“I had purchased a bungalow package worth almost RM100,000 only to find out that it does not belong to me.

“The land was confiscated by the state government in November last year. Now the state government is trying to revive the project and make it livable as it is full of defects.

“The state government said the houses will be delivered in March while the plight of the lot purchasers woudl be looked into after the infrastructure on site is fixed,” said Roslina.

At a recent meeting with the buyers, Selangor Mentri Besar Tan Sri Khalid Ibrahim said the state had paid RM147mil to acquire the land for the stalled Taman Alam Perdana development from developer Ladang Bukit Cherakah Nominees Sdn Bhd (LCBN), so that construction of the houses could resume.

An additional RM40mil was allocated to complete the infrastructure for the project last year.

The Association for Abandoned Building Owners Malaysia (Victims) chairman Dr Mohamed Rafick Khan Abdul Rahman said the root of this problem was the weakness of the Housing Development Act as well as the lack of regulation and enforcement by the authorities.

He said it was a common practice by developers back then to develop land without conversion, leaving that process till later when construction work was ongoing.

“Since land is a state matter, the state government can impose a deposit payment on developers as a condition if they want to develop any land. The state can determine the value of the land before development commences; should the developer fail, the money can be used for the project.

“In the case of Alam Perdana Court, the state government could have taken legal steps jointly with the buyers or resolved the issue of the bungalow lots immediately by getting the buyers to pay the premium and issue the title,” he said.

By The Star

100% loans but few homebuyers

2012-02-09T10:32:00.000+08:00

KOTA KINABALU: Sabahans have yet to tap into the Government’s My First Home scheme that enables young Malaysians to own a home.

The response to the scheme has been lukewarm despite potential buyers being offered 100% loans, Deputy Housing and Local Government Minister Datuk Lajim Ukin said.

He said at the Federal level, the scheme was coordinated by the Finance Ministry through an appointed agency while at state level, it was handled by the state government.

“I am sure the state government has taken proactive steps to get the scheme rolling in Sabah and also impart information about it to the younger generation through various departments and agencies in the state,” he said after attending a ground-breaking ceremony for a mosque in Kampung Melabau, Beaufort, yesterday.

Lajim said under the 2012 Budget, the Federal Government had increased the eligibility of buyers earning from RM3,000 to RM6,000 and also increased the value of houses from RM200,000 to RM400,000.

He said the new eligibility under the scheme had been effective since Jan 1.

He said the scheme was to help the younger generation entering the job market to buy an affordable house.

By The Star

Developer: We have been victimised by state policy

2012-02-09T10:31:00.000+08:00

The developer of Casa Gemilang in Sungai Pusu, Gombak said they have been victimised by the policy of state government, resulting in the project being delayed.

Gemilang Excel Holdings Sdn Bhd administrative manager Azman Rosdi said the company was stuck between a rock and a hard place.

He said the state government had approved the development but it was also one that contributed to the delay factor, thus causing the chain of events.

In July 2006, the developer was slapped with a stop-work order following a landslide in Kampung Pasir.

The order was issued to all development near hillsides, which affected Desa Gemilang and Casa Gemilang.

“We held a series of meeting with the state because we had to meet our deadline by 2008 for the project, but the state upheld its policy. We told them that we buyers are bound by an agreement to about 200 but in the end we had to comply with the order.

“In 2009, we made an appeal and the stop-work order was revoked. We resumed work on the site but the banks did not want to pay the progress claims because of the economic crisis and they said the project was not viable.

“We could not resume construction without any payment, so we had issued a notice to terminate the sale and purchase agreement (S&P) to some of the property buyers.

“The 40% of disbursement money had already been used for site clearing, earthworks and piling. We are still here trying to find a solution to this,” he added.

Azman said the buyers were offered a refund for the project but they had to terminate the earlier S&P.

“We contacted the buyers to sign the Deed of Rescission, which some signed, and the money will be reimbursed within 24 months. We have not received any offer from the state government or agencies pertaining to the project; they told us to just fix the problem,” he said.

Azman also clarified the issue of building on agricultural land, stating that they had filed an application simultaneously to change the land status to residential and bordering under the Land Code Section 124A for Gombak district to the Selangor Land Office in October 2005.

He said if people conducted a search on the status now, the land would still be classified as agricultural because the change would be applicable only when individual titles were given out.

“We have paid the premium for the land and the state government then had approved the change of land usage on Nov 29, 2004. Everything has been done according to the law.

“As for the encroachment into the buffer zone, that was for us to carry out slope-stabilising work and the developer’s land and the reserve were bordering each other.

“We had written to the Forestry Department for permission but no response was ever given even after nine months of waiting, so we went ahead with the works as it was the monsoon season,” he said.

At present, Azman said the company was looking for interested parties who wanted to buy over the project but it had to be done accordingly.

By The Star

Pavilion REIT posts RM12.4m Q4 net profit

2012-02-09T10:30:00.000+08:00

KUALA LUMPUR: Pavilion Real Estate Investment Trust (REIT) posted a net profit of RM12.4mil for the fourth quarter ended Dec 31, 2011 on revenue of RM22.5mil.

Pavilion REIT was listed on Bursa Malaysia on Dec 7, 2011.

In the notes accompanying its results, Pavilion REIT said gross revenue for the period totalled RM22.5mil and net property income was RM16.3mil.

Management fees and borrowing costs incurred during the period were RM1.2mil and RM2.3mil respectively resulting in income before taxation of RM12.4mil.

Its distributable income for the period under review amounted to RM13.1mil, or 0.44 sen per unit, consisting of realised income of RM12.4mil and non-cash adjustments of depreciation, amortisation of borrowings transaction cost of RM100,000 and surplus cash arising from 50% of manager's management fee payable in units of RM600,000.

By The Star

Plan for RM13b Danga Bay waterfront project

2012-02-08T11:23:00.000+08:00

JOHOR BARU: Businessman Datuk Lim Kang Hoo, who recently made a privatisation bid for developer Tebrau Teguh Bhd, is planning a more than RM13 billion project at Danga Bay here.

The soon-to-be-launched project is billed as the most exclusive and unique waterfront development in Iskandar Malaysia southern economic corridor over the next five years.

It will spread over 120 hectares at the estuaries of three rivers at the Danga Bay.

The Danga Bay waterfront development is an important component in one of the flagship developments in Iskandar Malaysia.

The site of the mega development is at two small peninsulas opposite the Danga Bay. The peninsulas are almost parallel to Sungai Sku-dai, Sungai Danga and Sungai Melayu.

Five commercial epicentres have been planned for the riverine development combining the best of the east and west cultural heritage which is set to become the jewel in the economic region.

The total project cost for the five epicentres, named The Venice, The Gateway, The Rivera, The Bund and The Fisherman Wharf, are estimated at RM13.4 billion.

The 120ha project is part of the 800ha earmarked for the Danga Bay waterfront development.

The development will be handled by Iskandar Waterfront Holdings Sdn Bhd (IWH).

Lim, who is IWH chief executive officer, said the projects are conceived to inject life into the integrated waterfront development, aiming to attract both tourists and investors.

"We welcome investors to take part in the development, either through joint venture with us, or on their own but based on our masterplan.

"Our products will be totally different from what you would find in Singapore, as our purpose is not to compete with them, but to complement them by offering something which are truly unique so as to attract their interest," Lim told the Business Times at his office here recently.

From what the names suggest, one does not need to travel far to Venice and Shanghai Bund to see the tourist destinations as both will be as near as the doorstep in future.

The Venice is one of the most interesting features in the waterfront developments as it will simulate the real topography and architectural design of the Italian city, which are canals running across rows of Venetian-style buildings.

Among the features in The Venice, which will be turned into a sleepless city, are a riverside promenade, a lifestyle street mall with a waterfront alfresco and entertainment outlets, a lifestyle street mall, hotels, apartments, among others.

The Venice will incorporate several watergates to control water level and quality.

Meanwhile, The Bund will showcase a lifestyle cultural village with water alfresco and entertainment outlets, apartments, hotels, among others.

The Fisherman Wharf is the most expensive project, costing RM3.9 billion and is aimed at complementing the existing tourism products available at the Johor Straits, which are kelongs (offshore fish cages).

Phase one of the project will see the development of apartments and sky villa while phase two will have a maritime museum, a riverfront boardwalk and wharf, and a fish auction plaza, together with hotels and thematic retail shops.

The development will simulate the setting of the fishermen wharfs in Cape Town, Norway and San Francisco, but in a modern architectural setting to reflect the localised culture.

Both The Gateway and the Rivera will have apartments, retail shoplots and hotels at the waterfront.

By Business Times

Seri Chenang Resort draws strong response

2012-02-08T11:19:00.000+08:00

SERI Chenang Resort & Spa Langkawi will be the newest addition to the Island of Legends when it opens this Labour Day and if forward bookings are anything to go by, this luxury boutique hotel has proven to be quite popular.

It has managed to secure full occupancy for the months of May, June and July 2012.

This 13-room hotel will be operated by brother and sister team Mohammad Shukor and Norlin Zainal Abidin.

The resort is being developed by SCRL Properties Sdn Bhd on the land belonging to the duo's father Datuk Zainal Abidin.

In 2009, Norlin then aged 35 and her brother 28 took on the challenge to develop and manage the hotel, instead of leaving the land undeveloped.

Norlin, who has only a shopping complex management experience, had then decided to be a hotelier.

Located on a 0.53ha of land on Kuala Chenang River next to the popular Chenang Beach, the investment into the hotel and land is to the tune of RM5 million.

Seri Chenang will comprise of six villas, each designed like traditional Malay houses from different states including Negeri Sembilan, Terengganu, Kedah, Pahang, Malacca and Selangor.

The smallest villa, a one-bedroom unit, measures about 113 sq m for a studio villa and the largest, a five bedroom unit, measures 393 sq m.

"It's set in a traditional style but equipped with modern amenities," she said.

The resort is for anyone who appreciates tradition in today's modern luxury living.

It will be marketed in Europe, Australia, Japan and Korea.

The resort's focus will be on personalised service from pre-arrival to post-departure.

"The general manager will greet each guest at the airport," she said.

Despite an encouraging response in the first three months of operations, Norlin prefers to be cautious about performance in the first year of operations.

"In the first year, we expect to achieve over 50 per cent occupancy and average room rate of RM1,700. In the second year, we are looking at an average occupancy of 70 per cent and an ARR of RM1,900," she said.

The hotel is expected to run at a gross operating profit (GOP) of 50 per cent. The GOP is the cost of doing business or gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

Accordingly, Norlin expects return on investment could take between five and seven years.

In keeping with the Seri Chenang theme, the resort will have a spa, Kayangan Spa, which provides traditional treatments.

While the hotel does not have a beach front, it is a mere five minutes away and there is free shuttle service to and from the beach.

By Business Times

Johor Premium Outlets attract more brands into Johor Baru

2012-02-08T10:16:00.000+08:00

New concept: Shoppers walking past some stores at the Johor Premium Outlets.

JOHOR BARU: The opening of the Johor Premium Outlets (JPO) late last year has created much interest among many Malaysian shoppers who are still new to the shopping concept.

Southern region representative of the Malaysian Association for Shopping and High Rise Complex Management Jenny Chan said since it was a new shopping format, it would take time for shoppers to adapt and adopt.

She said the luxury premium brand outlet format might not be new for Malaysians who had visited similar outlets overseas, but not for those who had never patronised such outlets before. “JPO is targeting at a specific group of shoppers hunting for reasonably priced quality and branded items,'' Chan said in an interview with StarBiz.

JPO is the only such outlet in South-East Asia, while 58 other outlets are in the United States, one in Puerto Rico, one in Mexico, eight in Japan and two in South Korea.

Among the brands avaialable at JPO are Armani, Burberry, Canali, Coach, Ermenegildo Zegna, Guess, Michael Kors, Ralph Lauren and Salvatore Ferragamo.

The outlet is a 50:50 joint venture between Genting Bhd's subsidiary Genting Plantations Bhd and Premium Outlets, the retail outlet division of Simon Property Group Inc.

Under the second phase of its development, Genting plans to spend RM100mil to increase the number of stores from the present 70 to 130.

The company is also expected to invest up to RM1bil to develop the area, including constructing a 2,000-room hotel together with a water-theme park and a meeting, incentive, conference and exhibition centre.

Chan said unlike in the Klang Valley and Singapore where customers were spoilt for choices when it came to branded fashion items available from shopping complexes, it was not the case in Johor Baru.

She said for many years, Johoreans living in the city would either travel to Kuala Lumpur or cross over to Singapore if they were looking for branded fashion items.

She said the opening of JPO saw many brands making their debut in the Johor Baru retail sector and offered to Johoreans a wider range of brands.

Chan added the format would work well with tourists and Malaysians from other states as well Singaporeans coming to shop at the outlet as it offered attractive bargains and discounts.

She said shoppers would be pampered with original discounted goods with good quality and she hoped that consumers would support genuine luxury products instead of imitation goods.

Asked whether the location of JPO was too remote, Chan said it was typical for Premium Outlets worldwide to operate away from the city centre.

“However, you must remember that this format is destination-bound'; therefore, shoppers will drive there for a different shopping experience,'' she said, adding: “It's better than travelling all the way to Premium Outlets in the United States, Japan or South Korea.”

Chan said Johor's close proximity with Singapore would allow the outlet to tap tourists including those from Australasia, China, India, Europe and Middle East visiting the republic.

Similarly Chan said JPO's presence would not affect other shopping mall business as its product range was totally different from normal shopping malls.

She added that shopping mall tenant mix was based on the target audience needs, especially within 5km radius or up to 10km radius.

By The Star

E&O expects to launch wellness-based township in Iskandar early next year

2012-02-07T23:13:00.002+08:00

Eastern & Oriental Bhd deputy managing director Eric Chan

PETALING JAYA: Despite the unending controversies that have beleaguered Eastern & Oriental Bhd (E&O) since last year, the niche property developer is forging ahead with its next flagship development in Iskandar Malaysia.

The Penang-based company is looking southwards to Johor's new growth region to build a wellness-themed township called Medini Integrated Wellness Capital.

Deputy managing director Eric Chan told StarBiz that the project, which is still in its early stages, could be launched as early as next year.

The Wellness Capital, with a gross development value of RM3bil, will occupy 210 acres in Medini, one of the clusters in Iskandar. The land was bought for RM350mil in mid-2011.

Chan said this would be E&O's maiden foray into Johor, and the first of its kind wellness-based township in the region.

“We believe the market is moving in this direction,” he said of the rationale for the focus on wellness, adding that the idea was first mooted by Khazanah Nasional Bhd.

According to Chan, this was not an entirely new concept as there have been similar developments in Canada and other countries.

The project will be undertaken by Nuri Merdu Sdn Bhd, which is a 50:50 joint-venture (JV) between Galaxy Prestige Sdn Bhd, a wholly-owned subsidiary of E&O, and Pulau Indah Ventures Sdn Bhd.

Pulau Indah Ventures is a 50:50 JV between Teluk Rubiah Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional, and Aneto Investments Pte Ltd, an indirect wholly-owned subsidiary of Temasek Holdings (Pte) Ltd.

E&O is responsible for the overall project management as well as sales and marketing.

As its partners are the sovereign wealth funds of both Malaysia and Singapore, a working model of the project was presented to the respective countries' Prime Ministers during their leaders retreat in Putrajaya in January.

The Wellness Capital will comprise two main portions the Medini Estate, which is the overall development, and the Medini Sanctuary, its 12.5 acre core. The township is fringed by a natural mangrove forest.

Chan said an operator would be brought in to run the Sanctuary by the end of the year.

“It is too early to throw out their names. We have not identified anyone yet but a few names have come forward. We will do the rounds to visit their facilities after Chinese New Year.

“Of course, Khanazah and Temasek can use their network to help us get the best team on board,” he said.

He added that the residential side would comprise 96 bungalows, 68 semi-detached homes, 445 terrace houses, 1,415 condominium units and one block of serviced apartments. Some 18 acres have been earmarked for commercial property.

However, this was a work-in-progress and the final numbers were subject to change, he pointed out.

In keeping with the wellness theme, Chan said the township might allocate 20 acres for food planting and fish farming.

On its target customers, Chan explained that they would be locals and foreigners above 40 years of age and from the middle-income group.

“Why 40 and above? Because they have typically acquired some capital by that age and can understand the need to spend money to prolong one's quality and active years,” he said.

He stressed that the development would not cater specifically for the “super-rich” and would be affordable to regular wage-earners.

In terms of returns, Chan said the development was expected to generate a 20% to 25% profit margin in two or three years, similar to E&O's previous projects, and begin contributing to earnings two years after its launch.

By The Star

Asian retail property expected to remain bullish

2012-02-07T23:09:00.002+08:00

Firm demand: Pacific Star expects the long-term Asian consumption story to be ‘as strong as ever.’

PETALING JAYA: The Asian retail property sector is expected to remain bullish this year with eager international retailers seeking expansion in Asia, lured by the region's growing wealth and tourism potential.

In the biannual Asian Property Outlook and Strategy report, real estate investment house Pacific Star noted that Asian governments had been focusing on developing domestic demand from a structural perspective, which should bode well for the retail sector.

“The long-term Asian consumption story remains as strong as ever. While we have seen the short-term outlook affected by the uncertainties in the global economy, the growth potential for the region remains.

“This is evident in the comments made by global fashion groups with regards to their expansion plans and the growth in earnings from the region,” said Pacific Star research and strategic planning vice president Lam Chern Woon in a statement recently.

He expects this trend to continue and with it, the demand for innovative retail properties to meet the appetite of the growing Asian consumer.

Pacific Star continues to rate the retail property markets in Singapore, Hong Kong, Kuala Lumpur as Tier 1, given healthy labour market conditions, strong tourism throughput and interest from international retailers.

Markets classified as Tier 1 merit serious investment consideration over the coming six to 12 months, while Tier 2 markets are generally attractive although the risks could be considerably higher due to macroeconomic or supply issues.

“While economic uncertainties will exert downward pressure on prime rents in the near term, the correction is expected to be limited, given the favourable supply outlook and buoyant domestic spending in these markets.

“Retail spending has also held up in Asia due to tight labour market conditions and a buoyant tourism sector,” he said.

He said consumers in this part of the world continue to be more optimistic than their counterparts in the United States and Europe as a result of healthy employment.

While the office sector is expected to be impacted by hiring headwinds due to the fallout from the European debt crisis, the group still rates the Singapore office market as Tier 1 for its attractiveness.

“Pre-commitments have been healthy and the city state remains highly favoured as a global and regional business hub due to its political stability and pro-business environment.

“The cyclical nature of the Singapore office market suggests that it could also recover quickly when global conditions turn around,” he said.

On the Malaysian perspective, the group said the office leasing market in Kuala Lumpur was relatively stable with net absorption improving in the second half of 2011, with relatively healthy economy growth this year expected to support office demand.

However, it said rentals would likely remain soft in the near term with supply outpacing demand, and capital values were expected to remain stable as owners were not under pressure to lower their price expectations.

“Over the medium term, we are cautiously optimistic that governmental initiatives to attract multinational corporations to set up their regional headquarters in Kuala Lumpur will help absorb the new supply and support the office market,” he said.

Meanwhile on the residential front, the group expects policy tightening to tail off where in most Asian residential markets, the effects of earlier property cooling measures have begun to adversely impact sales.

“This has translated into lower home prices in Hong Kong and some Chinese cities.

“Mortgage rates across Asia have also started to creep up over the past few months with a detrimental impact on housing affordability,” he said.

By The Star

Emkay sees Belum resort as future profit driver

2012-02-07T23:07:00.000+08:00

GRIK (PERAK): Emkay Group, controlled by property magnate Tan Sri Mustapha Kamal Abu Bakar, expects its Belum Rainforest Resort (BRR) in Pulau Banding to be a profit churner for the group in the future.

The BRR project, which is currently being developed, is expected to be fully completed within the next 10 to 15 years.

"This place would be the next profit centre for us in the future," said Mustapha Kamal, who is the group chairman.

The overall development of BRR involves four phases on over 600ha in Malaysia's 130 million-year-old Belum-Temengor rainforest and will boast a gross development value (GDV) of RM639 million.

Emkay has so far completed the first phase in June 2009, while the second phase is under progress and expected to be completed in March next year.

Mustapha Kamal, who founded Emkay Group, said the group has invested about RM100 million for the two phases.

The first phase of the BRR project was built specifically to attract foreign visitors, while the second phase is aimed at attracting more local visitors, he told a news conference last Wednesday.

The Emkay group has allocated some RM29 million for the development of the second phase.

Under the second phase of development, the resort will have a total of 113 rooms, including six kampung-style houses, and new facilities like spa rooms and swimming pool to cater to the growing number of visitors.

By Business Times

Builders look forward to busy year

2012-02-07T23:05:00.000+08:00

The domestic construction sector is expected to perform better this year with large infrastructure projects and housing construction activities expected to underpin growth.

Industry observers said builders would welcome the Year of the Dragon with open arms knowing that the sector is likely to perk up after the impending elections at the end of the first quarter of this year.

In the last budget announcement, the government has made known of its intention to boost the construction sector's growth by seven per cent to drive the national economy this year.

It is an ambitious target, especially when the Malaysian construction industry is set to grow by a bullish RM92 billion this year from RM85 billion last year.

Growth declined for the most part of 2011, expanding by only three per cent in the third quarter of as most large scale projects mooted by the government were deferred.

"This (the slowdown in 2011) is attributable to the slower-than-expected rollout of projects. New domestic contracts in the first nine months of 2011 only amounted to RM49.4 billion, which is only 58 per cent of 2010's full year total of RM85.2 billion and 2007 to 2010 average of RM84.7 billion," said Malaysian Rating Corp Bhd (MARC) vice president of ratings Rajan Paramesran.

This, he said, was unlike 2010 which was boosted by the announcement on the Economic Transformation Programme (ETP) and led the construction sector to rebound to 5.6 per cent.

However, the industry is expected to see a fourth quarter boost in construction activities as seen in previous years to elevate the full-year industry growth to around four per cent in 2011.

Hence, economists believe that timely awards and implementation of projects as per the 10th Malaysia Plan (10MP) and the ETP from now will contribute positively to the growth in 2012 as the projects require gestation period in order to generate impact to the economy.

According to Rajan, various packages for the construction of the Greater KL Mass Rail Transit (MRT) line project that have already been tendered out will contribute to the construction sector's performance.

Tender for the largest package, the tunnel works, worth RM8 billion will close by this month and the award is expected to be finalised by middle of this year.

In addition, government funded rural infrastructure development projects, the KLIA 2 project, the Kuala Lumpur International Financial District, and development of he government's Sungai Buloh rubber land, and the Sungai Besi Kuala Lumpur Air Base will provide momentum to the sector, he added.

RAM Holdings Bhd group chief economist Yeah Kim Leng said although the Malaysian economy is expected to moderate this year because of the ongoing eurozone debt crisis, the construction industry is expected to remain well supported by continuing infrastructure-related and property development projects.

"Key pillars will continue to be construction projects earmarked under the five development corridors and the 12 National Key Economic Areas (NKEA), especially the various transportation infrastructure and property-related mega projects planned under the Greater Kuala Lumpur NKEA," he said.

Yeah said the commencement of the mega MRT project and extension of light-rail transit (LRT) systems together with major investments in the oil and gas sector by Petronas, the national petroleum company, in Peninsular Malaysia, Sabah and Sarawak, are expected to boost construction order books.

Entry point projects such as the River of Life project and other iconic projects planned under the Greater Kuala Lumpur NKEA as well as large infrastructure and utilities projects such as the Gemas-Johor Baru electrified double-tracking project are expected to sustain the country's construction activities.

"Start-ups of affordable housing projects under the aegis of the government, continuing medium and high-end housing construction as well as commercial property development projects in the nation's capital as well as in other major cities are anticipated to lend support to the moderately strong pace of construction industry growth anticipated this year," he added.

Apart from the Gemas-Johor Baru double tracking rail project, other new projects that will kick off this year include several highway projects to be implemented under the Second Rolling Plan (RP2).

Among the projects are the Lebuhraya Pantai Timur Jabor-Kuala Terengganu, Lebuhraya Pantai Barat Banting-Taiping, Lebuhraya Segamat-Tangkak and Lebuhraya Central Spine as well as the construction of Kota Marudu-Ranau road.

The RP2 is the government initiative under the 10th Malaysian Plan (10MP) to boost investment with an allocation of RM98.4 billion for 2012 and 2013.

According to Yeah, a further RM978 million would be allocated to accelerate the development in five regional corridors this year.

Among the projects to be implemented are the construction of Johor Baru-Nusa Jaya coastal highway in Iskandar, Johor, heritage tourism development in Taiping in the Northern Corridor, agropolitan scheme in Besut in the East Coast Economic Region, palm oil industrial cluster project in Lahad Datu in Sabah Development Corridor, and Samalaju water supply in the Sarawak Corridor of Renewable Energy.

In the 10MP, the government allocated RM20 billion under the public-private partnerships (PPP) Facilitation Fund that provides a tipping point to assist the private sector develop projects with strategic value.

Of this total, RM18 billion is for high-impact projects, while the remaining RM2 billion is for projects involving bumiputera entrepreneurs.

This year, the government will allocate RM2.5 billion under the fund and an estimated RM300 million is for bumiputera entrepreneurs.

Rajan noted that the private sector will likely play a significant role in construction growth in 2012.

"Furthermore, the government has been emphasising private participation to drive the economic transformation agenda," he added.

A total of 52 projects worth RM62.7 billion have been identified under the new PPP initiative.

The PPP concept would include leases, joint ventures and sale of government land for development, and the normal build-operate-transfer mode.

Project bankability, he said, depends largely on the PPP terms as the private sector has to finance the construction or development and take on the project risks.

Among these PPP projects are seven tolled highways worth RM19 billion, comprising the West Coast Expressway, Guthrie Damansara Expressway, Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway.

Also included are two coal electricity generating plants (RM7 billion) and 1,335 hectares of development in Sungai Buloh (RM10 billion).

However, while the government is banking on the momentum of private investment to enhance the economy in 2012, Rajan said, foreign direct investment (FDI) inflows may be susceptible to the challenging global economic conditions.

Yeah, meanwhile, said that given the one to two years gestation period for FDI projects, the strong pickup in inflows recorded over 2010 and 2011 will translate into start-up of construction activities this year, especially for greenfield projects involving construction of industrial buildings and facilities.

"For 2012, locally owned corporations such as UDA Holdings Bhd and Gamuda-MMC consortium are more likely to be the ones undertaking the major projects," he added.

By Business Times

SPNB will no longer revive abandoned housing projects

2012-02-06T15:27:00.002+08:00

KUALA LUMPUR: Syarikat Perumahan Negara Bhd (SPNB), an agency set up to revive abandoned housing projects, will no longer rehabilitate such projects due to a policy change.

Under the latest policy, abandoned projects would be fully managed by the Housing and Local Government Ministry through the Commissioner of Buildings, Managing Director Datuk Dr Kamarul Rashdan Salleh said.

"I understand that the ministry will work with private developers to revive abandoned houses," he told BERNAMA in an exclusive interview.

Kamarul, however, expressed his concern over the escalating costs to restore private developers' housing projects comprising low or medium-low-cost houses because of the requirement to maintain the original house price.

For medium-cost houses, there would be no issue to attract private developers as the price can be set to a competitive level, thus substantial profit can be made, he said.

"Efforts to revive low-cost and medium-low-cost houses do not guarantee lucrative profits. Furthermore, developers will have to put up with spiralling costs.

"If the developers are willing to the risks, I welcome their initiative to do so, but if it is too risky for some developers, then the government has to come up with a workable mechanism to develop abandoned housing projects," he said.

For now, however, Kamarul said the SPNB would start reviving Taman Tangkak Emas and Taman Jasa Amir abandoned projects in Johor next month. The projects have been lying idle since 2005.

Kamarul said while abandoned housing projects exist everywhere in the country, they are significantly prevalent in Selangor, Negeri Sembilan and Johor, where development is taking place at a feverish pace.

Last year, SPNB revived a total of 1,004 units of abandoned houses at Taman Bukit Riah in Pengkalan Hulu, Taman Jalan Intan Pertama in Gerik, Taman Desa Bakti in Machang, Taman Desa Guru in Kuching, Taman Desarina in Kuala Lumpur and Taman Mawar in Kulai.

The SPNB was established on Aug 21, 1997 to provide quality affordable houses for every family in the country.

By Bernama

Need for master planner of affordable housing

2012-02-04T15:18:00.000+08:00

The current challenging economic times is a good time for reflection and we should not waste the opportunity to take stock of where we are heading as a people and a nation.

Going by the adage that life begins at 50, Malaysia is still a fairly young nation and adopting more inclusive policies that mobilise the country's rich human and natural resources will be able to cushion the country from any adverse external shocks.

Reading about Bhutan and how its much-beloved king places great value on the wellbeing and happiness of his people by inventing the Gross National Happiness index is very inspiring indeed.

The fact that the people's happiness is listed as the top priority speaks volume of how much they are appreciated as individuals. Other inspiring aspects that we can take a leaf from include the emphasis on preserving the natural environment and promoting simple and non-intrusive way of living. Despite a deliberate policy to limit the number of tourists allowed to visit Bhutan, an increasing number of tourists are finding their way to Bhutan for its natural beauty and simple way of life.

Their simple way of lifestyle means one can get by with less and there is less pressure to chase material wealth.

In its place is the emphasis on personal virtues and wholesome values of integrity, honesty, generosity and empathy for other people.

I believe the promoting of such values will set the foundation for wholesome community and nation building for our country.

The Bhutan story must have prompted many of us to start reflecting on our journey of life, and how we have fared in terms of the happiness index.

Come to think of it, since the world economy is on the verge of a double-dip scenario and there will be very low or no growth in most nations, some tweaking in national policies and priorities may be what Malaysia needs to see our country and the people through the challenging times.

It may be a good idea for us to draw up a Malaysian Happiness Index to measure how our people are faring against the rest of the world.

In the fast changing world we live in today, the elements that contribute to our happiness are constantly changing but there are some evergreen or “true blue” ones that will remain come what may.

The list may include whether the people have a roof over their head; the cost of living and how much does it take for a family to get by on a daily basis; freedom of expression and to pursue one's interest; and ability for the people to keep safe and thrive in their society.

Recent events around the world have shown that social disparity is still a huge problem in both the developed and developing countries, and can become a source of social discord and public unrest.

In the face of the high cost of living and inflated property prices, one of the immediate tasks of the Government is to pay more attention to social or public housing, and ensure that people have a roof over their heads.

Providing the less-endowed populace with some basic necessities such as a home of their own is tantamount to offering them hope for a better tomorrow.

Even China is counting on its massive effort to build low-priced social housing for the low-income group to provide enough demand to sustain its real-estate market from collapsing. It has set a target to build 36 million subsidised housing by 2015.

In Malaysia's case, the need for concerted efforts to build adequate public infrastructure and housing cannot be over-emphasised as the ongoing efforts are still quite fragmented.

Instead of involving so many agencies in the execution process, having a dedicated agency as the master planner to oversee the overall planning and execution of the projects will ensure a higher rate of success to benefit more people.

Providing enough public housing and other social amenities should be accorded one of the top priorities along with the other economic-based initiatives under the government's Economic Transformation Programme.

The sharp increase in prices of goods and services, including that of property, meant people have less disposable income and spending power.

These projects will be able to wipe out the many squatters and slumps, and rejuvenate our cities. Focusing on public housing can also provide a cushion for the property market from stagnating during troubling economic times.

Deputy news editor Angie Ng hopes improving the Malaysian Happiness Index will be the basis for all nation building policies and initiatives going forward.

By The Star (by Angie Ng)

DBKL will buy up defaulters’ units

2012-02-04T15:16:00.000+08:00

KUALA Lumpur City Hall will set up a redemption reserve account to buy up public housing units of loan defaulters after the sixth month.

The loans are arranged through the special housing scheme financed by the Employees Provident Fund (EPF).

This scheme will be managed by Syarikat Perumahan Wilayah Persekutuan established under the Federal Territories Foundation.

Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin said 20% from the sale of all public housing units would be channelled into the account and not be used for other purposes.

“Profit rate charged by EPF is 5.5%. DBKL guarantees on buying back the units from the defaulters to sell it back to the 27,000 other eligible applicants in the waiting list.

“The value of each unit is double the cost so I hope the current tenants would take the opportunity to buy these units.

“I would also like to remind the buyers to be responsible and service their loans or risk having their units taken away,” he said.

Nong Chik said all the current tenants who had been paying rental on time were automatically eligible for this scheme.

“It is a good scheme for the lower-income group with no down payment required and 100% loan with a repayment period up to 25 years.

“I encourage every one to take it up because it might just be the only asset for many.

“The units bought can be rented to local residents or sold after seven years of settling the loan,” he said.

Starting from March, DBKL would be having roadshows to explain to potential buyers on the scheme. So far, there are 44,146 public housing units for sale of which 4,919 have been sold. Another 12,675 have agreed to accept the offer.

Each unit costs between RM21,500 and RM35,000.

Monthly instalments would be between RM200 and RM300 a month.

By The Star

Jeram Bintang puts Faber Tower up for sale

2012-02-04T15:15:00.000+08:00

KUALA LUMPUR: Faber Tower, which was built by Faber Group Bhd in 1986, is up for sale for RM80 million to RM90 million, people familiar with the matter said.

Jeram Bintang Sdn Bhd, which owns 90 per cent of the commercial complex, has appointed CH Williams Talhar & Wong as the exclusive
marketing agent. The rest of the complex is held by individual owners.

Sources close to Jeram said the company is looking to cash out its share in the complex, which it acquired from Faber in 2004, to focus on other ventures.

Faber had entered into a conditional sale and purchase agreement with Jeram, a special purpose vehicle set up by a consortium of banks, to dispose of properties, including hotels and a mall owned by the group as part of its debtrestructuring exercise in May 2004.

The complex comprises two 18- to 20-storey office blocks, a podium and three-level carpark and Jeram is selling 610,000 sq ft of floor area.

Jeram is selling 22 strata office units or 81.4 per cent of Tower 1, and the whole of Tower 2.

Also for sale are 62 strata retail units or 73.6 per cent of the podium, and the carpark.

Property experts said Jeram is selling the properties below market price.

As at December 31 2002, the net book value of the complex sprawled over 2.63 acres was RM105.12 million.

“It is obvious that any investor would be looking at the land area as the buildings are aging and would require a lot of capex (capital expenditure) to be uplifted,” said a property expert who
declined to be named.

He said commercial land surrounding the complex is currently selling for between RM400 per sq ft and RM500 per sq ft.

It is understood WTW has been approached by investors from Malaysia and Singapore.

By Business Times

More than 90 projects worth billions to be farmed out by April

2012-02-04T15:12:00.000+08:00

After some dithering, the construction of the My Rapid Transit (MRT) project is moving into higher gear. The two major contracts awarded by MRT Co last week that totalled some RMl.6bil is proof that things are moving.

What's to come is more telling. By April, MRT Co, the overseer and project owner of the country's largest ever infrastructure project, would have awarded a total of around 90 or so projects. The figure of these contracts run into billions and would clearly be a major boost to the construction and related sectors.

The multiplier effect on the economy will soon be felt.

“We have been waiting for this, as these projects have already been earmarked by the Government before. The industry and the country need these projects to spur economic growth, in light of the gloomy global scene. The multiplier effects are well spelt out,” says Master Builders Association Malaysia (MBAM) president Kwan Foh-Kwai.

While research houses have yet to make an outright bullish call on the construction and related sectors, there are hints that a re-rating is in the offing. Among the larger contracts that are being dished out are for elevated civil works that entail the building of viaduct guideways and other associated works. There are eight of these packages, each averaging RM500mil, according to MRT Co.

However, the two that have already been awarded recently to IJM Corp Bhd and Ahmad Zaki Resources Bhd were for RM974mil and RM764mil respectively, indicating that the RM500mil figure could be on the low side.

There are also contracts for stations and depots. And the single biggest one will be for tunnelling works for the 9.5km underground portion of the Sungai Buloh-Kajang MRT line.

The bill for this is estimated at 40% of the total project cost, which is estimated at RM30bil. The first line stretches 51km.

“The positive news from MRT Co reinforces our positive view on the construction sector as we expect a lot of sizeable projects to be awarded this year,” wrote MIDF Research in a recent note.

OSK Research said that if it did turn positive on the Malaysia market, construction would be one of the sectors it would be bullish about.

Its research head Chris Eng says: “If global markets hold up, the improved risk-taking sentiment will provide a boost to construction stocks, given that the MRT awards will happen this year.”

But are the contracts being farmed out too hurriedly? And what assurance is there that the right parties are winning the awards? These are valid concerns, considering that Malaysia has a questionable track record when it comes to the building of large infrastructure projects in terms of contractors' ability to deliver the goods in time and within budget. In the past, a massive amount of money had been spent by the Government in bailing out the two light rapid transit (LRT) operators and the monorail project.

Federation of Malaysian Consumers Associations secretary-general Muhammad Sha'ani Abdullah says:“Caution should be taken to ensure that the best and deserving companies are awarded the deals. We don't want situations where companies chosen later fail to carry out the projects within budget and time. And these companies then end up getting bailed out by the Government, as had happened in other infrastructure projects in this country.”

But MRT Co CEO Datuk Azhar Abdul Hamid explains that the plan to get these contracts awarded by April is to ensure that the MRT (since renamed Klang Valley MY Rapid Transit or KVMRT) isn't delayed.

“We are already about six months behind schedule and also want to make sure we can deliver the project ahead of the expected completion time in July 2017. There is nothing wrong to speed things up as we do not rely on one company to do the work and that's why we are spreading it out. The most important thing is coordination and supervision,” he says.

Rigorous selection process

Azhar explains that a rigorous process is involved in deciding which companies are awarded with the contracts. In fact, the selection process dates back to even before Azhar, the former head of Sime Darby's plantation division, was made chief executive of MRT Co last August.

Syarikat Prasarana Negara Bhd (Prasarana) which was first tasked with managing the KVMRT project, had earlier called for parties to express their interest in participating in the works for the KVMRT. That was back in 2010 and by September 2011, Prasarana had decided on the “pre-qualification” list for all the different packages involved in building the KVMRT.

According to Azhar, the bids which are then submitted by the pre-qualified contractors are first evaluated by a working committee chaired by both MRT Co and the Project Delivery Partner (PDP) to gauge applicants' technical and financial capabilities. One unique feature of the KVMRT project is the presence of the PDP. In late 2010, a Gamuda-MMC consortium, who had first pitched a plan of the MRT to the Government in the early part of that year, had been appointed as PDP consultants for the MRT project.

The PDP bear certain management risks in this project and are therefore key stakeholders in the KVMRT. Hence it has a say in the decision-making process of contract awards.

From there, the applications go on to a one-stop technical committee chaired by Azhar.

“Finally, we will present the outcome of these evaluations to the one-stop procurement committee to be chaired by three different persons depending on the contract value.”

The chairpersons include Finance Ministry secretary-general for contracts up to RM50mil; the Second Finance Minister (up to RM300mil) and the Prime Minister for contracts worth more than RM300mil.

Checks and balance

Additionally, the KVMRT project has two very notable checks and balances in place to minimise the Government having to provide additional funding in the event contractors can't deliver. First is the role of the PDP. Explains Azhar: “Under the PDP environment there's a step-in clause where if the contractors fail to undertake and continue doing the jobs, the PDP is obliged to come in and get the job done.”

Azhar adds that in cases where there are cost overruns, it is only to be expected that the PDP will also be penalised for that. “In the case of variation orders, we will only look at very exceptional cases,” Azhar says.

Aside from the PDP, there's also the role of the independent consulting engineer or ICE. It has been reported that Prasarana had already issued a letter of intent to engineering firm HSS Integrated Sdn Bhd in a JV with SNC Lavalin (of Canada) to take on the role of ICE. HSSI was previously involved in the design, construction and supervision of the KL International Airport, the Light Rail Transit System 2, the North-South Expressway, Maju Expressway and the Express Rail Link.

Azhar says the role of the ICE is crucial as it will monitor the progress of the project and its input is needed before contractors are paid. It is also tasked with safety aspects of the project.

Still on the issue of the PDP, recall that the appointment of Gamuda-MMC as the PDP for the KVMRT project had caused some controversy, considering that they are also bidding for the tunnelling portion, which is single biggest contract in building the MRT.

Azhar explains that it is Gamuda and MMC who has first come up with the MRT proposal to the Government and they have from the start indicated their keenness to be involved in the tunnelling portion of the project.

“To ensure proper due diligence and that the Government is getting the right pricing for the tunnelling portion, that's the basis of having the Swiss Challenge method for picking the tunnelling contractor,” Azhar says.

To date, five groups of companies, including the Gamuda-MMC JV, have been shortlisted for the tunnelling job. If Gamuda-MMC wins the tunnelling job, it would step out of the PDP role relating to that part of the project. Under the Swiss Challenge system, MMC-Gamuda will have the first right of refusal to do the job at the lowest bid plus a small 2.5% to 7.5% margin. Curiously, this has not stopped other parties from making a bid.

“Take note that the other bidders for the tunneling job are made up of two Chinese, one South Korean and one Japanese company. Aren't they also able to have advantages of economies of scale and possibly government funding on their part?” Azhar notes.

Crucial issue of funding

As the KVMRT goes into high speed, many are still questioning if the country can really afford a project as ambitious as this. It is estimated that the first line of the KVMRT would cost around RM30bil. But he says: “The Government will finance the entire line 1 (Sungai Buloh-Kajang) via bond issuances. That will be done very soon. In the mean time, if we need money, we can used short-term financing from financial institutions which can then be converted into bonds later on. We expect good response for the bonds as there is a lot of liquidity in the market as well as investors are looking at Asia now as the situation the West is not quite healthy.”

Azhar says that it will be Dana Infra that will be raising the bonds.

It has been reported that a special unit of the Finance Ministry called Dana Infra Nasional Bhd (Dana Infra) has been set up to issue bonds to raise the financing for the MRT building cost. Checks with Government sources reveal that Dana Infra is headed by Fazlur Rahman Ebrahim, who is the current managing director of Prokhas Sdn Bhd, itself a unit of MoF that was set up in 2006 to manage the residual assets of Danaharta.

Fazlur has yet to respond to queries from StarBizWeek on the planned bond issuance. Sources, however, have indicated that these bonds would be fully government-backed.

The Government has stated in the past that the rationale for the KVMRT being government-funded is on the basis of the multiplier effects it would have on economic growth in the country and the competitive advantage that the Klang Valley would have once the MRT was up and running

It had also been reported that while the MRT was not going to be profitable, there would be a strong focus to reduce its cost and this was where a “rail plus property” plan had been cited before, where some level of real estate development would be emarked on to recoup some of the losses from the MRT. Another non-fair revenues would be sought such as from advertising.

StarBizWeek had previously quoted economist Dr Yeah Kim Leng of RAM Holdings, who opined that assuming RM30bil is raised by the Government via bonds to the fund the MRT, it will raise the Government debt-to-GDP ratio by 3.9 percentage points to 57% based on the 2010 gross domestic product (GDP) figure.

He said when compared with the debt situation of many advanced economies where the debt levels are either close to or above 100% of GDP, the Government does have the borrowing capacity. He had also said that the bond issuance of RM30bil would raise the fiscal deficit by an estimated 0.2% of GDP which “may necessitate either a cut-back in spending on other areas or raising revenue through means such as asset sales or tax increases, in order to achieve the fiscal deficit target of less than 3% of GDP by 2015,” he reportedly said.

On a positive note, Yeah had added that the MRT project would “boost the economy by adding jobs and crowding-in investment which would have the desired effect of enlarging the GDP, thereby contributing to either stabilising or lowering the debt-to-GDP ratio”.

Those following the KVMRT saga would also be aware of the problems Azhar and his team faced when securing the allignment in some parts of the city centre. There were quarters who opposed the development of the KVMRT. Azhar is confident that the problems would eventually be ironed out. His message has been consistent: that MRT Co isn't interested in taking land in places like Chinatown, except for the station. “We just need the time for them to vacate the area with compensation for six months for us to do the tunnelling works underground.”

But Azhar goes on to say:”Some people just refuse to understand.”

The KVMRT though, is going ahead and Azhar is winning the battle with the majority of land owners having inked agreements to facilitate the MRT allignment. “A lot of efforts are being made on our part to do this correctly. We will get there,” he ethuses and is hopeful that the July 2017 target for the first line of the KVMRT would be achieved.

By The Star

MBAM bullish on construction sector

2012-02-04T15:11:00.000+08:00

DESPITE the global economic uncertainty, the Master Builders Association Malaysia (MBAM) is bullish about the growth of the local construction industry in 2012.

The Malaysian construction industry is expected to grow to RM92bil this year from RM85bil last year,” says MBAM president Kwan Foh Kwai.

“However, with the uncertainty of the global economy and the expectation that the property sector may be less robust, MBAM is cautiously optimistic that the construction industry outlook for 2012 will be relatively stable, backed by the continued implementation of projects under the 10th Malaysia Plan (10MP) and the Entry Point Projects (EPP) under the Economic Transformation Programme (ETP),” he adds.

Kwan says the timely awards and implementation of projects under the 10MP and ETP will contribute positively to the growth in 2012, as the projects requires a gestation period to generate impact to the economy.

“A continued conducive environment for doing business in the country, clear guidelines and timelines for approval processes and a level playing field will definitely help spur growth and investment in Malaysia.

“This planned and progressive awarding of projects will reduce any abrupt increase in demand for building materials and manpower, which may jeopardise the targeted growth due to temporary shortages in supply. This will also prevent unnecessary price increases which will add burden to contractors,” he says.

Analysts, meanwhile, are pretty upbeat about the outlook for the construction sector, in light of the call for tenders of the Klang Valley My Rapid Transit (MRT) jobs by MRT Co.

Last month, it was reported that MRT Co is expected to call for tenders of MRT jobs that comprise 18 elevated civil, station and depot work packages under Phase 1 worth RM15bil. Phase 1 involves 20 km between Maluri and Kajang.

Meanwhile, tenders for Phase 2 of the MRT project will be called in the second half of 2012, which the market values at RM15bil.

“The positive news from MRT Co reinforces our view on the construction sector as we expect a lot of sizeable projects to be awarded this year, especially in the second half of 2012,” says MIDF Research in a report.

An analyst from a local bank-backed brokerage says the new MRT jobs will bode well for the construction industry this year.

“It will create some excitement for the industry and spur spin-off jobs, which will benefit the local construction sector,” he says.

Kwan notes that the Government has targeted a 7% growth for the construction industry this year.

“The kind of growth we hope as envisioned in the 10MP (which covers the period from 2011 to 2015) is to have an annual growth of at least 3.7% per year as compared with 6% per annum gross domestic product growth for the country.”

Kwan believes that the Government’s public-private partnership business model will play an integral role in the development of the local construction industry.

“There is also a need to bring in foreign direct investments (FDIs) which will definitely play an important part to promote construction growth in 2012.

“MBAM opines that boosting investors’ confidence and sentiment with measures aimed at enhancing economic efficiency through market liberalisation and lowering business costs will help add to the country’s FDI growth momentum in 2012,” he adds.

Kwan says the MBAM has urged the Government to speed up the award of new projects, especially those with that would have a high impact to the economy in 2012.

“For projects involving FDI and domestic investors, the timely issue of construction permits will further improve confidence of investors.

“Timely awards and implementation of projects as per the 10MP and ETP from now will contribute positively to construction growth in 2012, as the projects require a gestation period in order to generate impact to the economy.”

Other issues the MBAM feels could present challenges to the local construction industry, says Kwan, include the stability of building material prices, policy and law related matters, aside from high import duties for construction heavy machinery.

The MBAM has suggested the Government reduce the import duty and sales tax for heavy machinery on a systematic basis within two years, until it is reduced to 5% to 10% for import duty and 5% for sales tax, from the 20% and 10% currently. “With the use of new and bigger capacity machinery, productivity will increase and less foreign workers will be employed.”

Kwan says having sufficient and skilled workforce for the sector is also vital. The MBAM has appealed to the Government to lift the temporary suspension for workers’ quota application, saying that the construction industry is currently facing a shortage of manpower.

“The MBAM has written to the Government to allow construction workers above the age of 45 who have been trained as skilled workers to be legalised so as to remain working in Malaysia. This will save both labour cost and reduce the number of new unskilled foreign workers to be brought in.”

Kwan says there is currently a critical need to replenish the pool of skilled construction manpower.

“It is estimated that 35.1% of local construction personnel would reach the age of 50 and above, in seven years from now. Therefore, MBAM is taking steps by collaborating with Open University Malaysia to develop and design industrial based programmes for working adults. The courses developed will incorporate knowledge and entrepreneurship skills which would be industry oriented.”

Kwan says MBAM is also collaborating with the KLIA Professional and Management College and conduct the MBAM Site Safety and Health Supervisors (SSS) training course, which is accredited by the Department of Safety and Health and help address the shortage of SSS in the construction industry.

“The SSS courses are currently conducted in Kuala Lumpur and will be extended to other areas such as Penang, Sabah and Sarawak as per request from the construction industry.”

By The Star

Construction sector to gain more

2012-02-04T15:09:00.000+08:00

The kickoff of the country's largest infrastructure project the Klang Valley My Rapid Transit (KVMRT) could spark re-ratings across several sectors starting with the construction sector which is the direct beneficiary.

A flurry of construction jobs which would swell up the order books of companies by leaps and bounds, is expected to be announced over the next six months as the multi-billion MRT development, which is six months behind schedule, strives to play catch up.

To kick-start, MRT Co has appointed IJM Corp Bhd (IJM) and Ahmad Zaki Resources Bhd (AZRB) for the construction of viaduct guideways and other associated works.

MRT Co is the project and asset owner of the MRT.

The two separate multi-million contracts at RM974mil and RM764mil for IJM and AZRB respectively are part of eight complete packages in the elevated civil works portion one of the largest portions of the MRT project.

There are a total of 90 work packages for the entire first MRT line, providing ample jobs for virtually everyone in the consruction industry and including those in building materials and property.

MRT Co chief executive officer Datuk Azhar Abdul Hamid says six more of the eight major packages are expected to be awarded within the next six months.

Of the eight, five will be from the open tender category while three contractors will come from the bumiputra category.

“It should be a fast process as we already have a pre-qualified list,” he says.

While the margins of contractors cannot be predicted, analysts have said that technically, margins for MRT works should be higher than the 5% earned by contractors who worked on the light rail transit or LRT system given the higher complexities and financial risks of the former.

Among those on the pre-qualified list for the elevated civil works portion, analysts have singled out a few companies which are likely beneficiaries based on several factors.

One of this is Naim Engineering Sdn Bhd, a wholly-owned unit of Sarawak's largest property developer and construction firm Naim Holdings Bhd.

Reports point out that Naim's construction and engineering arm has a track record of completing more than RM2.7bil worth of projects either on time or earlier and within budget.

This should augur well for the company since the ability to stick to a strict timeline and within stipulated costs is vital in a mega project like the MRT.

Naim has experience in projects involving road, bridges and buildings for both the Government and private sector.

It is also a pre-qualified candidate in all of the elevated works portion of the project including civil, stations and depot jobs as well as being represented both in the open and bumiputra tender categories.

Besides Naim, AmResearch construction analyst Mak Hoy Ken says for the remaining six elevated civil work packages, he likes IJM, Sunway Holdings Bhd and Malaysian Resources Corp Bhd as possible contenders, for their solid track records in delivering major construction and property projects.

HwangDBS Vickers Research chooses IJM, Sunway, Muhibbah Engineering (M) Bhd and TRC Synergy Bhd as possible recipients, all of which have been pre-qualified for all elevated works including civil, depots and stations.

Azhar says that he does not rule out the possibility of IJM and AZRB being awarded with contracts again despite being the chosen ones in the first round.

“There is a possibility, yes,” he tells StarBizWeek.

On the tunnelling portion - which is the single largest portion of the MRT project valued at about RM8bil, HwangDBS says it is optimistic that the MMC Corp Bhd-Gamuda Bhd joint venture would win the bid despite stiff competition including from foreign parties.

The result of this should be known by April.

“Conventional wisdom suggests it is best to keep this MRT project domestic with a stronger multiplier effect on the economy, especially with possibly slower gross domestic product growth in 2012,” the research house says.

Gamuda is jointly appointed with MMC as the project delivery partner for the entire MRT project.

Additionally, the joint-venture is the only pure local party with bumiputra interest, and therefore would be accorded a 7.5% tender pricing advantage; it also has an edge over its competitors in terms of having better understanding of Malaysia's soil conditions and experience in completing the SMART Tunnel.

As for the initial spillover to other parts of the economy, AmResearch's Mak says the imminent roll-out of MRT jobs is expected to first prod renewed focus on building material players.

“Our initial checks indicate that the Sungai Buloh-Kajang line alone may require 500,000 tonnes of steel, with the maiden orders likely to kick-in by the end of the first half of this year.

“This should benefit Ann Joo Resources Bhd and Lion Industries Corp Bhd, both in steel and Lafarge Malayan Cement,” he says.

The Sungai Buloh-Kajang line is the first line out of three under the entire MRT plan.

According to MRT Co, line two, the circle line (MRT 2) and line three (MRT 3) should be completed by 2020 and are expected to cover the regions of Kuala Lumpur and the north-west corridor of Greater Klang Valley which includes linking Sungai Buloh, Kepong and Selayang with the eastern half of the city centre (including Kampung Baru and the Kuala Lumpur International Financial District).

With such a strong pipeline of multi-million projects just waiting to flow into the order books of the local boys, there remains the huge cloud of political risk with the impending general election. Needless to say, disruptions in political conditions could derail or delay the take-off of any national infrastructure project.

Profit-wise, the earnings impact of the jobs on companies' balance sheets are not expected to be meaningful until at least in two years' time when the project should be in full swing.

Even then, JF Apex Securities Bhd deputy managing director Lim Teck Seng warns that profits gained by companies involved may not be within expectations.

“Swelling order books and actually making money from that are two separate things.

“Most of the jobs will be awarded to companies which offer the lowest price, so if related costs arising from inflationary pressure go up beyond their expectations, the companies may even end up making losses,” he says.

Vincent Khoo, head of research UOB Kay Hian (M) Holdings Sdn Bhd points out that in terms of stock prices, a lot of the good MRT news have already been priced in especially when it comes to the big boys of the sector.

“Hence, valuations may be a little lofty taking into account external uncertainties, upside could be limited but downside significant, if there are delays in dishing out of contracts,” he says.

MRT Co, is expected to make public the list of all the works for the Sungai Buloh-Kajang MRT line very soon with most of the big packages being awarded this year and the smaller ones in the early part of next year.

For now, OSK Research Sdn Bhd is maintaining a “neutral” call on the construction sector.

“We do not discount a potential re-rating on the sector in the near future, pending more concrete signals,” it says.

By The Star

Freehold project located next to Bukit Lanjan Forest Reserve

2012-02-03T10:04:00.000+08:00

New phases: Low (right) and Ferdaus with the scaled models of Damansara Foresta.

With the scarcity of land in Selangor and especially in the greater Petaling Jaya, condominium dwellers don’t have the luxury of being surrounded by a green lung or natural environment. But now they will, with the ongoing freehold residential development of Damansara Foresta, being developed by Land & General Bhd in Bandar Sri Damansara.

Positioned as freehold “residential homes within nature”, this project is located next to the Bukit Lanjan Forest Reserve.

The overall project site consists of 17ha whereby only 8.5ha will be developed for residential development, leaving the remaining half as green lung especially for residents.

“The land area will be filled with no less than 3,000 trees to filter out city noises and airborne pollutants and supply natural fresh air,” said the company’s managing director Low Gay Teck.

The prime development will have good access to all parts of the Klang Valley via the Damansara-Puchong Highway (LDP), MRR2, New Klang Valley Expressway (NKVE) and Sprint Highway.

Phase 1 of the project consists of four blocks ranging from 227 to 327 units for each block. The unit size ranges from 1,400 to 1,600 sq ft to a luxurious penthouse of above 3,000 sq ft.

The selling price for Phase 1 ranges from RM500 to RM600 psf with a maintenance fee of 25 sen psf.

“We have sold 99% of Block 1 and 95% of Block 2. Our theme is to provide living in harmony with nature.

“We are now constructing Phase 1 which consists of four blocks of condos on a 6.9ha site. Registration is now open for the third block and the official launch will be held this month,” he added.

Within the vicinity, the residents of Damansara Foresta will also enjoy a natural park as well as other facilities including a jungle trek, hammock garden, tree house, camping site, lookout points and yoga zone.

There will be a three-tier security system comprising the main entrance guardhouse, a guard at the lobby area and access card security in the elevator as well as two parking bays for each unit.

“For Phase 1, residents can enjoy a big swimming pool, roof-top garden on each block, hanging bridges and pergolas.

“As a developer, we strive to provide functionality, accessibility and practicality. Therefore, every level of the condo will be accessible from the parking ramp for added convenience.”

The units come with a spacious living room.

“We spend a lot of time designing the units so residents can enjoy a luxurious space for living in an efficient manner. It gives them a sense of spaciousness,” said Low.

The company’s executive director Ferdaus Mahmood said the entire property was 180 metres above sea level.

“We’re selling lifestyle. Each unit comes with kitchen cabinets and air-conditioning points too,” said Ferdaus.

For all the four phases, a total of 2,700 units will be built. Phase 1 has 928 units.

By The Star

Hua Yang to focus on Malaysian market for now

2012-02-03T10:02:00.000+08:00

KUALA LUMPUR: Property developer Hua Yang Bhd, will explore the overseas market when the company achieves its targeted RM800 million revenue in the next few years, says chief executive officer Ho Wen Yan.

"We hope to grow our revenue to RM800 million by 2018. By then, we will be at a comfortable size and can start looking for opportunities overseas or other high-end segments," he said.

For the nine-month period ended December 31 2011, Hua Yang's revenue was RM222.13 million.

Ho said the company could bring its affordable housing model and technical expertise to emerging markets like Vietnam, Cambodia and Indonesia.

"Currently, venturing overseas is not in our plan, not within the next three years. The Malaysian market is still very strong, especially for our segment, the affordable housing.

"After three years, we will take a look. I hope these countries are ready for foreign investors then. We are now exploring opportunities," he said.

On the domestic front, Hua Yang plans to launch its next township "Pulai Hijauan" in Johor in April or May.

"Everything is ready now for the official launch of the township," Ho said.

Pulai Hijauan, with an estimated gross development value (GDV) of RM380 million, is about a kilometre from the company's existing township, Taman Pulai Indah, in Skudai.

Ho said the total GDV for the company's ongoing projects and yet-to-be-developed ones was RM2.4 billion. Of this, the GDV for ongoing projects is about RM983 million.

By Bernama

Sime Darby Property honoured for sustainable development efforts

2012-02-03T10:01:00.000+08:00

KUALA LUMPUR: Sime Darby Property Bhd has won two awards for outstanding achievements in the property development sector in Malaysia and Southeast Asia.

It bagged the BCI Asia Awards 2011, the second consecutive year that it has won the honour. The award covers Malaysia, Hong Kong, Indonesia, the Philippines, Singapore, Thailand and Vietnam.

Sime Darby Property managing director Datuk Wahab Maskan said it was an honour to be one of the top 10 developers in Asia and to be acknowledged for its sustainable efforts in Malaysia.

"These awards reflect the appreciation of society and customers for our efforts to provide sustainable development for our stakeholders. We will continue to work even harder to be the preferred developer in the region," he said.

Sime Darby Property was also recently conferred the Prime Minister's Hibiscus Award 2012 for Notable Achievement in the Environmental Excellence Category.

It won the award for its Bukit Jelutong township, following a two-stage assessment process that included a site visit and detailed submissions on 14 areas covering a range of environmental issues.

By Business Times

Legoland Malaysia names sales director

2012-02-03T10:00:00.000+08:00

Legoland Malaysia, the first Legoland theme park to open in the Asia-Pacific and the sixth in the world, has appointed Thila Munusamy as the Director of Sales and Marketing to strengthen its senior management team.

In a statement today, it said that Thila will oversee the theme park's overall marketing, public relations, social media, sales and regional promotion activities.

Joining Sunway Lagoon as a marketing manager in 2005, she contributed to the successful turnaround of the company. She was also responsible for many successful marketing initiatives that propelled Sunway lagoon into an award-winning theme park.

"Given her wealth of experience in the hospitality and tourism sector, we are confident that Thila will play a key role in making LEGOLAND Malaysia a household name and a preferred destination for our target visitors," said its general manager, Siegfried Boerst.

By Bernama

UMLand to start mixed project in downtown Johor Baru

2012-02-02T10:29:00.000+08:00

PASIR GUDANG: United Malayan Land Bhd (UMLand) plans to start its multi-million ringgit mixed development project in Jalan Wong Ah Fook in downtown Johor Baru this year.

Group chief Pee Tong Lim said the project was now in the planning stage which included the gross development value (GDV), land utilisation and other related development details.

“We are looking at building a hotel block, a serviced apartment tower and a retail podium on the site,'' he said at the opening of the company's sales gallery and corporate office Galleria Seri Alam here by UMLand chairman Tun Musa Hitam.

Also present at the events were the company's executive director Datuk Ng Eng Tee, UMLand's subsidiary Seri Alam Properties Sdn Bhd general manager Frankie Tan Kiat How and Iskandar Regional Development Authority chief executive officer Ismail Ibrahim.

Pee said he hoped the project would start concurrently with the RM1.8bil Johor Baru City Centre transformation plan which is expected to start either in the second or the third-quarter of the year.

The land is situated opposite Kompleks Tun Abdul Razak and just a short distance from JB City Square shopping mall.

Under the transformation plan, Sungai Segget which has been covered and turned into a pedestrian walkway would be opened up and beautified similar to the famous Cheonggyecheon river in downtown Seoul.

Separately, Pee said the company's joint venture project with UEM Land Bhd, the master developer of Nusajaya at Puteri Harbour, would start early next month.

By The Star

Hua Yang plans overseas expansion

2012-02-02T10:27:00.000+08:00

Property developer, Hua Yang Bhd, will explore the overseas market when the company achieves its targeted RM800 million revenue in the next few years, says chief executive officer Ho Wen Yan.

“We hope to grow our revenue to RM800 million by 2018. By then, we will be at a comfortable size and can start looking for opportunities overseas or other high-end segments,” he told Bernama in an interview.

For the nine-month period ended Dec 31, 2011, Hua Yang’s revenue was RM222.13 million.

Ho said the company could bring its affordable housing model and technical expertise to emerging markets like Vietnam, Cambodia and Indonesia.

"Currently, venturing overseas is not in our plan, not within the next three years. The Malaysian market is still very strong, especially for our segment, the affordable housing.

"After three years, we will take a look. At that time, I hope these countries are ready for foreign investors. We are now exploring opportunities,” he said.

Ho said there are ample opportunities in Indonesia and Vietnam and developed countries like Singapore and Australia.

However, his company would have to offer different products for Singapore and Australia, being developed nations.
On the domestic front, Hua Yang plans to launch its next township "Pulai Hijauan" in Johor in April or May.

"Everything is ready now for the official launch of the township," he said.

Pulai Hijauan, with an estimated gross development value (GDV) of RM380 million, is about one kilometre away from the company’s existing township, Taman Pulai Indah, in Skudai.

Ho said the total GDV for the company’s ongoing projects and yet-to-be-developed ones was RM2.4 billion. Of that, the GDV for ongoing projects stands at about RM983 million.

“The rest are undeveloped and some are in the planning stage. These properties will be developed in the next few years. More phases will be developed in our townships, Taman Pulai Indah and Bandar Universiti Seri Iskandar in Perak,” he said.

Ho said the company aims to launch RM800 million worth of properties in Johor, Perak and the Klang Valley next year.

By Bernama

JCorp in RM40m hotel upgrade

2012-02-02T10:22:00.000+08:00

JOHOR Corp, Johor state's investment company, will spend up to RM40 million to upgrade all its hotel assets in line with increasing tourist arrivals in the state, spurred by the opening of several attractions in Iskandar Malaysia, including the Johor Premium Outlets.

Government investment arm Khazanah Nasional Bhd is developing an indoor theme park in Puteri Harbour for RM350 million, which is slated to open by end-2012.

In Nusajaya, Legoland Malaysia, which is being built at a cost of around RM750 million, is set to open in early 2013.

JCorp Hotels & Resorts Sdn Bhd deputy chief executive officer Muhamad Mazlan Ali said the upgrading work will commence in early 2012 starting with The Puteri Pacific Johor Baru.

"The hotel, which opened in 1990, is quite tired now and needs some uplifting. Our competitors have refurbished their properties. To stay afloat, we have to upgrade our properties.

"We will review upwards our pricing strategy once the refurbishment exercise is completed in about a year or two," Muhamad Mazlan told Business Times.

Currently, the average room rate in the Johor market is about RM180.

JCorp Hotels, the hospitality arm of Johor Corp, owns and manages five properties in Johor. Apart from The Puteri Pacific Johor Baru and the Persada Johor International Convention Centre, it owns Sibu Island Resort, Selesa Johor Baru and Selesa Pasir Gudang.

The company also has a property in Negri Sembilan, called Selesa Port Dickson. The six properties are worth as much as RM600 million.

Muhamad Mazlan acknowledged that Johor needed more hotels.

There are over 4,000 rooms available in the two- to five-star categories currently and this is expected to double by 2014, but still may not be sufficient to meet demand, he said.

"We expect room demand to increase with the expected influx of tourists and attractions. We are optimistic that the attractions in Johor will bring more people to the state.

"With more universities and colleges opening at EduCity, we can expect a large number of international students too," he said.

EduCity is a fully integrated knowledge-based hub comprising world-class universities, industry-centric R&D clusters, international schools and colleges, as well as conference and exhibition amenities.

By Business Times

Enhancing Langkawi's appeal

2012-02-02T10:20:00.000+08:00

The proposed rejuvenation of Langkawi, via a five-year tourism blueprint, is set to see the potential entry of fresh investments that will make the resort island more appealing to higher-end tourists.

The Langkawi Tourism Blueprint envisages RM5 billion worth of investment in tourism projects and aims to increase tourism arrivals from the current 2.4 million to three million by 2015. That would more than double its contribution to the country's economy from RM800 million to RM1.9 billion, as well as create 4,200 new jobs.

The government's financial commitment to the blueprint includes RM420 million to build infrastructure, acquire some land and promote the island so that tourists no longer give it a miss in favour of destinations like Bali, Phuket and the Maldives.

"The blueprint serves as an impetus and provides a focused approach on specific areas of development such as product development, key infrastructure and supporting enablers.

"This in turn provides existing and new investors a clear vision and direction set forth for Langkawi," says Northern Corridor Implementation Authority (NCIA) chief executive Datuk Redza Razif.

The role played by the NCIA in helping uplift Langkawi's position is to play a lead role in the development of the blueprint, along with the delivery of its current initiatives on the island.

The authority is tasked to lead three out of 14 initiatives which have been outlined in the blueprint. They include plans for luxury stays and a vibrant north-west for the island, ensuring better connectivity and seeing to the setting up of a tourism academy by working closely with the Ministry of Higher Education and the Performance and Delivery Unit (Pemandu) in the Prime Minister's Department.

Khazanah Nasional Bhd had announced in December that it will be ploughing capital investments of some RM1 billion in Teluk Datai via Teluk Datai Resorts Sdn Bhd, its investee company.

This move is expected to be achieved via the implementation of a Teluk Datai master development plan which in turn will see reinvestments in the existing hotels at Teluk Datai, along with investments in select pieces of earmarked land which total around 604ha.

Projects include the enhancement of The Datai Langkawi, upgrading The Golf Club, Datai Bay, and optimising land for beachfront development.

Khazanah, via Teluk Datai Resorts, has also entered into a heads of agreement with Shangri-La Hotels (M) Bhd to jointly develop a five-star resort.

The proposed resort has been reported to be managed by Shangri-la International Hotel Management Ltd under the Shangri-La brand and will serve as Shangri-La debut on Langkawi.

Tradewinds Corp Bhd is said to be bringing more rejuvenation to Langkawi, via development of the Telaga Harbour Park at Pantai Kok and building new residential and commercial properties.

The company, which reportedly now owns the three-star Mutiara Burau Bay Resort, is believed to have plans to tear down the existing resort and rebuild it into a higher end accommodation offering.

The existing resort, which is currently in need of a major facelift, is dotted with sea-fronting chalets and appears to be "tired" and does nothing currently in terms of infrastructure and amenities for its guests.

Just up the road is the Oriental Village, which was opened by the Langkawi Development Authority (LADA) in 2003 and is poorly managed.

Originally envisioned to be a cluster of factory outlets stories, it is today nothing but a mix of crafts shops and buskers and serves as the occasional backdrop for television and movie producers.

Its close proximity to the island's top attraction - Panorama Langkawi cable car services - does not help the image of the cable car operator which offers rides to the peak of the 700 metro Matchingchang mountain range.

Although Panorama Langkawi Sdn Bhd, a profit making subsidiary of Syarikat Prasarana Negara Sdn Bhd, has over the past year done wonders to improve its image for its services, visitors are not accorded a positive first impression, owing to the conditions of the Oriental Village, which is in drastic need of a revamp.

While details of a supposed revamp of LADA are not publicly known, Langkawi locals and tourism players are now placing their hopes on the authority's newly-appointed chief executive officer Tan Sri Khalid Ramli, who previously served as chairman of the Malaysian Communications and Multimedia Commission.

A delivery management office (DMO), for which LADA will serve as lead agency, is set to be established in overseeing the blueprint.

"With a targeted approach taken by the blueprint, timely implementation, sound business plans and on-ground support by all sectors, we are confident that Langkawi will emerge as a premier island destination," noted Redza.

He added that the Langkawi Tourism Blueprint defines specific initiatives and complements the Northern Corridor Economic Region's overall blueprint which is to see the economic fortunes of the four northern states of Perak, Penang, Kedah and Perlis improve.

On the proposed development of Teluk Datai, Redza said that the opportunity for NCIA in this effort will be to assist in scaling up local entrepreneurs to provide complementing services in the vicinity of the new resort.

"This would include the development of souvenirs, availability of well-trained private tour guides and the provision of authentic dining experiences which reflect among others, local culture," he added.

On whether it was too ambitious a plan to expect the blueprint to yield its targeted results at the end of 2015 when the document was only launched at the end of 2011, Redza said: "During the development of the blueprint, some groundwork and key issues were identified and as a result, quick-win initiatives were targeted and already rolled in late 2011 and part of this year".

By Business Times

Sentoria plans 2nd theme park

2012-02-01T22:39:00.000+08:00

More visibility: Sentoria joint MD Datuk Jimmy Chan (left) and Gan at the launch of the company’s prospectus. Gan says a listing on the stock market would make it easier for the company to attract potential investors and business partners.

KUALA LUMPUR: Property developer, and leisure and hospitality company Sentoria Group Bhd, which aims to raise RM51.6mil from its initial public offering (IPO), intends to invest the bulk of the proceeds on a second theme park in its Bukit Gambang Resort City (BGRC) in Kuantan, Pahang.

Sentoria joint managing director Datuk Gan Kim Leong said that the company had allocated a capital expenditure (capex) of RM48mil for a Safari Park, which would boost the number of visitors to BGRC.

“The park will open in stages from the end of this year,” he said at the launch of the company's prospectus yesterday.

Sentoria public and investor relations head Nasiruddin Nasrun said he was optimistic the Safari Park, spanning 35.7ha in Gambang's secondary jungle, would follow the success of the company's first theme park, known as Bukit Gambang Water Park, which had already attracted more than one million visitors since BGRC's opening in July 2009. Sentoria is the developer and operator of BGRC.

According to Gan, the hospitality business contributed about 30% to Sentoria's total earnings, with the balance 70% coming from its property development division.

Nasiruddin said the company expected to grow the contribution from the hospitality business to 50% by the time BGRC was completely developed in 2018.

“But we do expect to reach 50% much earlier, perhaps in the next couple of years,” he said.

Gan said a listing on the stock market would enable the company to create more visibility and make it easier to attract potential investors and business partners.

He also said it was timely to float the company despite the current global economic uncertainties. “We cannot foresee if the global economy will be good or bad, so any time is the best time,” Gan said.

Nasiruddin added that Sentoria was no stranger to an “economic downturn”.

“We embarked on BGRC during the global financial crisis in 2007 and 2008. So, we are no stranger to economic downturns,” he said.

Apart from the capex, the balance IPO proceeds will be used to repay bank borrowings and defray listing expenses.

En route to a listing on the Main Market of Bursa Malaysia by the first quarter of this year, Sentoria's IPO entails a public issue of 60 million new shares and an offer for sale of 40 million promoters' shares.

Of the 60 million public shares, 20 million are allocated for public balloting and 10 million for eligible directors, employees and business associates of the group at a price of 85 sen each. About 30 million shares will be allocated for private placement at 87 sen apiece.

The 40 million promoters' shares allocated for bumiputra investors are priced at 87 sen each.

AmInvesment Bank Bhd is the principal adviser, managing underwriter and joint placement agent for the IPO, while Kenanga Investment Bank Bhd is the joint placement agent.

By The Star

Sentora to invest RM48mil to develop safari park

2012-02-01T22:32:00.000+08:00

KUALA LUMPUR: Sentoria Group Bhd, en route for listing on Bursa Malaysia Securities Bhd in the first quarter of this year, plans to invest RM48 million from internally-generated funds to develop a safari park.

Joint managing director, Datuk Gan Kim Leong, said the 35.28-hectare Bukit Gambang Safari Park in Bukit Gambang Resort City (BGRC) would commence operations by year-end.

"We are optimistic the safari park will follow the success of our first theme park," he said at the launch of the group's initial public offering (IPO) prospectus here today.

Gan said the company's first park, Bukit Gambang Water Park, has received over a million visitors since BGRC's opening in July 2009. "The addition of the second theme park would stake our place as an up-and-coming leisure and hospitality destination for visitors in Malaysia and the region," he said.

Sentoria is the developer and operator of BGRC in Kuantan, Pahang one of the largest integrated resort cities in Malaysia with 218.8ha.

The group has also carved out a niche in developing affordable housing primarily in Kuantan, Pahang.

Among its ongoing projects are Arabian Bay Resort, safari park and Taman Indera Sempurna 2.

Gan said the IPO would raise RM51.6 million in proceeds, of which RM27.7 million would be used for working capital.

He said RM11.2 million would be used to repay bank borrowings, RM9 million for purchase of property, plant and equipment and RM3.7 million to defray listing expenses.

The IPO entails a public issue of 60 million new ordinary shares and an offer for sale of 40 million promoters' shares at 87 sen apiece.

By Bernama

Cooling measures may turn investors away from S'pore residential property into stocks

2012-02-01T22:31:00.000+08:00

SINGAPORE: Singapore's property cooling measures could deter investors from residential property and into stocks, according to investment experts.

The latest measures imposed an additional 10% stamp duty on foreigners buying private homes, a move that could affect demand and investment strategies, said DBS Group Research.

“Owner-occupier buyers are likely to hold back in anticipation of a dip in prices,” said the research house, which expected home prices to retrace by 5% this year - a muted impact due to the low interest rate environment.

Potential buyers already appear to be adopting a wait-and-see attitude, suggesting they may place their cash into stocks instead.

Lorraine Tan, director of Asia equity research at Standard and Poor's, told The Straits Times: “The property curbs limit the speculative element in investing in properties. When you don't have that and there is expectation that prices could come down, it's going to affect buying. As equities are more liquid, the money will get channelled into equities.”

Colin Tan, head of research and consultancy at Chesterton Suntec International, agrees: “Most people who have held back buying properties could invest in the stock market. There are lots of funds swirling around from one asset class into another.”

Not all concur. Teoh Kok Lin, managing director of Singular Asset Management, which manages funds in Kuala Lumpur and Singapore, said the stamp duty affected foreign buyers most but “these purchasers are likely, if they choose, to channel their cash to property markets in other countries.”

Just what effect the cooling measures might have on the share market was also a hot topic among most investors at a recent roadshow by CIMB Singapore, held in Asia and the United States.

“That was the question investors asked. My view is that there are other factors that drive stock market liquidity,” said CIMB Singapore research head Kenneth Ng.

He pointed out that retail participation in the stock market tapered off in 2010 and last year.

That coincided with the opening years of the two casinos and very strong transaction volumes in the property sector.

A resolution to the financial turmoil in the eurozone this year could spur more interest in shares, he noted. “That might be a good reason for market interest to come back and stock market volumes to rise.”

Tan of Standard and Poor's said confidence needed to improve significantly before shares would go up.

That appears to have happened already somewhat. The benchmark Straits Times Index has gained 10.2% this year to 2,916.26 points.

“The risk appetite has definitely come back a bit. But the eurozone debt issue is still a dampener.

“And global growth as well as Asia's is slowing. Those are two big issues that will continue to drive interest in equities,” said Tan.

Many potential property investors may be moving into shares while they wait and see how the cooling measures play out on prices.

There has been much talk since the Dec 8 stamp duty came into effect that prices would fall, but Tan of Chesterton Suntec is not convinced.

“There's too much liquidity in the market and borrowing costs are low. I don't think property prices are coming down soon, not even in a slow growth environment,” he said.

The Watertown project in Punggol has achieved strong sales since its preview on Jan 18.

OSK-DMG Research attributes the robust showing to the penchant among Singapore property buyers for mixed developments. But the research house expects primary transaction volume to fall by 20% year-on-year this year.

By The Straits Times

Govt offers housing and community centre for needy families

2012-02-01T22:28:00.000+08:00

PEKAN: Prime Minister Datuk Seri Najib Razak officially launched two integrated housing and community centres for the poor in Kampung Padang Rumbia and Kampung Pulau Serai recently that will benefit 162 families.

The housing project, part of a nationwide effort to eradicate poverty, involved the full support of the private sector.

Under this project, families were given furnished homes and provided with income-generating ventures such as agriculture and aquaculture activities and livestock rearing.

The housing area was also completed with facilities such as food processing centres, ICT lab and handicraft production centres.

Najib said no Government allocation had been given for the project and it was funded by the private sector.

“It simply reflects the close cooperation between the Federal and state governments with the private sector,” he added.

Najib also said since becoming the Prime Minister nearly three years ago, he had always been open to all manner of new ideas resulting in the implementation of various Government policies.

A benchmark for any Govern-ment’s authority was in the contestation of ideas, he added.

“The free housing project for needy people is an example born from these exchange of ideas,” he said.

On the housing and community centres, Najib said each house, measuring 92.9 sq m, was fully furnished with a free gas cylinder for cooking.

Fifty families received their house keys from Najib during the function.

Later, at the Kampung Pulau Serai integrated housing project, the Pekan MP officially opened the Kedai Rakyat 1Malaysia which he described as the largest mall concept in Malaysia.

Among the facilities available were a landscape industry centre, fiber boat production centre, handicraft centre and an ICT resource centre.

Najib also gave away house keys to 112 families.

The first integrated housing and community centre project was launched in July, 2010, involving 60 families in Bukit Kenau, Pulau Manis here.

By The Star

Tebrau Teguh picked to develop Johor land

2012-02-01T22:25:00.000+08:00

161HA MIXED DEVELOPMENT: Project to be within oil and gas industry hub in Kota Tinggi

PROPERTY developer Tebrau Teguh Bhd, which will see the involvement of construction tycoon Datuk Lim Kang Hoo of Ekovest Bhd in the company, has been chosen by the Johor government to develop 161 hectares of land in the southern state.

The land, located in Pengerang, Kota Tinggi, within the oil and gas industry hub, is to be a comprehensive mixed development that complements Petroliam Nasional Bhd’s US$20 billion (RM60.8 billion) refinery and petrochemicals integrated development.

Tebrau Teguh obtained its letter of appointment from the state government on January 30, it told the stock exchange late yesterday.

The land is owned by the state.

Meanwhile, Lim and Tebrau Teguh’s biggest shareholder, Kumpulan Prasarana Rakyat Johor (KPRJ), are launching a takeover of the property developer.

Tebrau Teguh said, in a separate stock exchange filing yesterday, that KPRJ plans to sell a 33.15 per cent stake in Tebrau Teguh to Iskandar Waterfront Holdings Sdn Bhd (IWH) for 76 sen a share, or RM168.7 million in total.

The move will result in IWH having to make a mandatory general offer for the rest of Tebrau Teguh’s shares at the same price.

KPRJ, which is the Johor state’s investment arm, currently owns a direct 41.15 per cent stakein Tebrau Teguh.

According to Tebrau Teguh, IWH is owned by KPRJ and Credence Resources Sdn Bhd. It did not state their exact shareholding in IWH, saying only that IWH’s directors are Lim, Lim Hoe, Lim Keng Cheng, Lim Chen Herng, Datuk Shahir Nasir, Datuk Ayub Mion and Johar Salim Yahaya.

Interestingly, Lim also owns 70 per cent of Danga Bay Sdn Bhd (DBSB) – the master developer of the Danga Bay waterfront project in Johor – via Credence Resources. KPRJ owns the other 30 per cent of DBSB.

Recent news reports have speculated that DBSB may be injected into Tebrau Teguh as Lim seeks to consolidate his investments. Tebrau, however, when queried by the stock exchange, said yesterday it was “not in any form of discussion with any parties” to buy DBSB.

Lim, a prominent businessman in Johor, is also the co-founder and chairman of Ekovest.

IWH’s offer price of 76 sen a share for Tebrau Teguh is just one sen higher than its last trading price. The stock, which was suspended on Monday this week pending the announcements that were made yesterday, will resume trade tomorrow.

IWH and KPRJ are to enter into definitive agreements on the Tebrau Teguh purchase on April 29, at the latest.

The mandatory offer will be conditional upon IWH and parties acting in concert with it holding more than 50 per cent of the voting shares in Tebrau Teguh.

By Business Times

Hua Yang plans affordable housing projects

2012-01-31T10:32:00.000+08:00

Hua Yang Bhd plans to launch affordable housing projects with a total gross development value (GDV) of about RM500 million in the Klang Valley in its 2014 financial year.

Chief executive officer Ho Wen Yan said: "We are in the midst of securing land bank for these mixed development projects. The first launch will be in the next financial year."

He told Bernama today that the affordable housing projects would be in Selayang, Seri Kembangan and Desa Pandan.

"The company is constantly looking to replenish its landbank with specific areas in the Klang Valley being considered are Selayang, Seri Kembangan and Desa Pandan," he said.

Ho said the projects would take between three and five years to complete.

He also said that the company planned a gated development with a GDV of RM70 million in Perak in its financial year ending March 31, 2013.

According to Ho, the company was currently in the process of purchasing a piece of land, which was strategically located in Perak for the gated development. The project will comprise affordable terrace houses measuring 22x70 feet with price tags below RM400,000.

Ho said the company would continue to focus on affordable houses, a segment which Hua Yang had been getting tremendous response since it started its property business in 1978.

"We've been selling between 30 per cent and 50 per cent of our properties during our launches,” he said.

Hua Yang is in the midst of developing five projects with a total GDV of about RM983 million of which 85 per cent of the properties worth RM835 million have been sold.

Two of the five projects, namely Symphony Heights and One South with GDV of RM205.7 million and RM515.3 million respectively, are in Selangor.

Another project, Senawang Link which carries a GDV of RM17.8 million, is located in Negeri Sembilan. Its other two ongoing projects, Bandar Universiti Seri Iskandar with a GDV of RM56.3 million is in Perak while Taman Pulai Indah which has a GDV of RM187.8 million is in Johor.

By Bernama

Sentora to invest RM48mil to develop safari park

2012-01-31T10:30:00.000+08:00

China investors propose industrial park

2012-01-31T10:29:00.000+08:00

Officials from China has proposed to the Malaysian Government to establish a dedicated industrial park for investors from the world's second largest economy.

Deputy Finance Minister Datuk Donald Lim Siang Chai said China was Malaysia's largest trading partner last year, with total trade exceeding US$90 billion.

"Total trade surged by 20 per cent from 2010," he said when launching the prospectus of China Stationery Limited.

China's Ambassador to Malaysia Chai Xi said Chinese investors would come to Malaysia in a big way to participate in the government's economic transformation pogramme.

"Therefore, the setting up of an industrial park in Malaysia solely for Chinese investors will further enhance economic collaborations between the two friendly nations," he said.

Chai Xi said China-Malaysia bilateral trade was in Malaysia's favour.

"Our government is encouraging entrepreneurs to go abroad to invest," he said at the launch in Kuala Lumpur.

China Stationery Limited is the 10th Chinese company listed on Bursa Malaysia.

Lim said as China was Malaysia's major trading partner, there was an agreement for Malaysian and Chinese traders to settle their accounts in ringgit and renminbi.

By Bernama

EPF to channel RM1.5bil to fund FT special housing scheme

2012-01-31T10:28:00.000+08:00

KUALA LUMPUR: The Employees Provident Fund (EPF) will channel RM1.5bil to the Federal Territories Foundation as part of a special funding scheme to help eligible buyers purchase public housing units in the city.

Federal Territories and Urban Well-being Minister Datuk Raja Nong Chik Raja Zainal Abidin said the loan would be guaranteed against the housing unit itself.

He stressed that people should not be worried that EPF would be the “loser” should tenants default on monthly payments as the property was worth double or triple the price.

“We are not worried about not being able to pay EPF. If someone doesn’t pay up after six months, DBKL will buy it back. For DBKL to recover its costs, it has the right to sell off the unit to those on the waiting list.

“What’s important is that they (the buyers) can afford to pay. If they can’t, they should continue renting,” he said after meeting taxi drivers here yesterday.

The scheme, which starts on March 1, comes under the National Economic Action Council’s (NEAC) People Housing Programme (PPR-MTEN) as well as DBKL public housing.

Raja Nong Chik said the fund would be handled by the Federal Territories Foundation, which would offer the scheme to eligible buyers in stages.

“The first stage involves 10,000 buyers. They will have to pay back between RM150 and RM300 a month if they get the loan. Interest will be charged but at a much lower rate than banks,” he said, adding that the loan must be repaid within 25 years.

Prime Minister Datuk Seri Najib Tun Razak announced the scheme’s inception after launching the 2012 Federal Territories’ Day last week.

Regarding the issue of taxi drivers lobbying for the abolishment of the coupon system, Raja Nong Chik said he would raise their concerns with the Transport Ministry and the Land Public Transport Commission (SPAD).

By The Star

Aye to new housing loans

2012-01-31T10:26:00.000+08:00

KUALA LUMPUR: The proposed new housing loan scheme for those in the low and middle income group here can keep the city “thriving, vibrant and youthful,” said the Real Estate and Housing Developers Association (Rehda).

Its president Datuk Seri Michael Yam said Prime Minister Datuk Seri Najib Tun Razak and the Federal Territories and Urban Well-being Ministry should be complimented for proposing the scheme.

However, he stressed that the scheme’s terms and conditions would have to be well drafted if the proposal was to be a success.

Factors such as geographic boundaries and income limits would also have to be properly defined, Yam said.

“Another thing that should be considered is risk management.

“This scheme will be very attractive to people who are otherwise unable to obtain bank loans due to the lack of steady income or personal reasons. We have to be able to properly deal with these high credit risks.”

Najib had announced on Saturday a special funding scheme to help low and middle income families own homes in the city.

The scheme, which comes into effect on March 1, will cover units built under the National Economic Action Council’s People Housing Programme as well as City Hall’s public housing programme.

“In Kuala Lumpur, many young people are now moving to other places because of high costs of living, and transportation issues. This scheme can attract people from elsewhere to live and work in the capital, and retain those already living here,” said Yam.

Many young Malaysians have expressed positive views about the proposed scheme.

“It can improve living standards for those in the city,” said university student Asyraf Syahir, 20.

“I hope the scheme’s terms will be favourable because houses in Kuala Lumpur are expensive. I would like to own a house here some- day,” said IT specialist Christine Leong, 24.

Marketing executive Lee Kim Kong, 25, said although the initiative was good, more holistic solutions were needed to address rising house prices.

By The Star

Tebrau Teguh to develop land in Johor

2012-01-31T10:25:00.000+08:00

Tebrau Teguh Bhd has been appointed the developer for 167.13 hectares of land in Mukim Pantai Timur, Johor, which will complement Petronas' US$20 billion refinery and petrochemicals integrated development (Rapid).

The company said the land would be developed into a comprehensive mixed development which would complement the Rapid project.

The company is currently negotiating the technical, financial and legal aspects of the appointment with the Johor State Government's
Economic Planning Unit, it said in a filing to Bursa Malaysia.

The project is expected to contribute positively to the company's future earnings and net tangible assets.

By Bernama

Another bumper year for mall deals in Malaysia?

2012-01-30T10:46:00.000+08:00

If there's is a transaction involving a mall in 2012, expect the deal to be done at a handsome price.

After a record number of deals valued at RM5 billion involving shopping complexes in 2011, this retail asset will continue to
be on the radar of funds and real estate investment trusts (REITs) in 2012.

Allan Soo, managing director of CB Richard Ellis Malaysia, said that since there are not many quality malls to go around, buyers will look at alternative methods of growing their asset portfolio.

“Funds or companies may develop a shopping complex on their own or enter into a joint venture. They could also buy assets that are close to completion,” Soo told Business Times.

If in 2011 we witnessed virtually all major mall deals taking place in Peninsular Malaysia, Soo expects 2012 to see deals also being done for mall assets in Sabah and Sarawak.

And if a mall is available for purchase, Soo said: “It continues to be a seller’s market this year.”

Meanwhile, vice president of Royal Institution of Surveyors Malaysia (Property Management, Estate Agency and Valuation Division) Adzman Shah Mohd Ariffin agrees that 2012 is
a seller’s market.

High prices are also a result of higher land value and costlier construction costs, he added. “Prices are already higher naturally due to higher land values and cost of construction.
Given lower passing rental levels, especially for malls opened in the past two to three years, the yields are likely to be low.

“Even the recent deals in Klang Valley showed yields of about 5.5 per cent to 6.5 per cent only, which is already much lower than most investors’ target of 7 per cent,” Adzman said.

However, he said that malls are dynamic and capable of generating better income if operated well with strong corporate governance and good retail mix. This makes it a good resilient investment in weathering global economic uncertainties.

According to Adzman, it could cost more to build a mall from scratch. As such, it would make better sense to purchase existing malls which are in good condition, location, population
catchment and potential for enhancement and repositioning.

"Purchasers must look beyond the yield at the time of purchase and be prepared to work on the assets for capital appreciation and bettering the income stream in the long term," he said.

Adzman, meanwhile, reckons that purchasers will be from private funds to focus on assets to "warehouse" rather than REITs, which would look for yield-accretive assets.

"Warehouse" is when an asset is held for a period of time in order to nurture it until it produces a better income stream.

After about a dozen deals in 2011, could there be another record set this year?

It is expected to be vibrant but not a repeat of 2011, but deals this year may very well thump last year's in terms of value.

Already, there have been indication that KrisAssets Holdings Bhd, which owns the Mid Valley Mega Mall and The Gardens, will spin off the asset into a REIT. These assets alone are valued at RM3 billion.

We have also yet to hear the outcome of the Bandar Raya Development Bhd (BRDB)'s plan to call for a tender for the sale of the Bangsar Shopping Centre and CapSquare Retail Centre in Kuala Lumpur, and Permas Jusco Mall in Johor. These three malls may be valued at another RM800 million.

By Business Times

BSG Property to replicate Precinct 10's success in Malacca

2012-01-30T10:43:00.000+08:00

GEORGE TOWN: Boon Siew Group's property arm BSG Property, is looking at replicating its new commercial property development project Precinct 10 in Penang down south at its Melaka Straits City project.

BSG Property's business development manager Koay Wei Loong said the proposed street mall comprising food and beverage offerings in Malacca is likely to be ready by the end of 2013 and the company has earmarked some RM40 million.

"The positive response we have received from tenants of Precinct 10 and customers since we opened in Penang has been encouraging and we see no reason why the same model cannot be successful in Malacca," he told Business Times.

Precinct 10 is located at Tanjung Tokong on Penang island and consists of 2-storey shop offices and F and B outlets.

Since its soft opening last month, the project has seen the entry of Burger King, Chez Weng, Winter Warmers, Old Town White Coffee, Sushi Zento and HSBC Bank as tenants.

"We are looking at potentially bringing in one more financial institution, an Italian food-dominated wine house, and a Chinese restaurant chain here," added Koay.

"With the surface parking offered to customers at Precinct 10, our plan is to enable the medium to upscale eateries transform this location into a Penang version of Bangsar in Kuala Lumpur."

Precinct 10 sits on a 1.7ha area and boasts a net lettable area of 47,000 sq ft.

BSG Property invested RM16 million in the project.

By Business Times

New condo project in Bukit Dumbar open for registration

2012-01-30T10:42:00.000+08:00

A condominium with a panoramic view is the latest property offering in Bukit Dumbar in Penang.

The exclusive project — Quattro 360 by Marvellous Land Sdn Bhd — features a total of 38 units with only two units per floor.

Each unit has a built-up space of 1,900sq ft, and comes with four bedrooms, two of which are master bedrooms.

The condo units also come with private lifts and lobbies as well as a double security system.

Marvellous Land director Yeow Jing Hooi said the project was expected to be open for sales by mid-June.

“So far, the response has been good as we have received about 1,000 enquiries already,” said Yeow, adding that the project was now open for registration.

For enquiries, call 04-6605555 or visit its sales office at 8, Jalan Mas, Penang (behind Caltexin Green Lane).

By The Star

Retail space challenge

2012-01-28T21:53:00.000+08:00

Growth of retail sector depends on balance in demand and supply of retail space

IT might be the year of the dragon – a Chinese astrological symbol that is said to be synonymous with power and good fortune – but for property developers of new shopping malls in the country, the ongoing uncertainty in the global economy and oversupply of retail space might just douse their burning business plans.

Tan: ‘When export-oriented manufacturing sector slows down due to low external demand, it will affect local employment market and retail spending.’

According to Henry Butcher Retail managing director Tan Hai Hsin, about 10 new shopping malls are expected to be opened this year in the Klang Valley alone.

“The total retail space for Klang Valley in 2011 was more than 52 million sq ft. For this year, it is expected to increase by at least 3.5 million sq ft, he tells StarBizWeek.

“This sub-sector is growing, based on the number of new shopping centres that will be completed. However, it will be a challenge to fill up all the retail shops upon opening. It will take them at least a year to do so.”

Tan says the growth of this sub-sector is highly dependent on consumers’ spending power this year.

Elvin: ‘Lenders and regulators should continuously insist on detailed market and feasibility studies and updates of those studies from time to time.’

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez points out that this sub-sector was relatively strong in 2011 and will likely continue to be strong based on continued robust consumer spending and support from tourism spending.

“Despite the global turmoil, consumer spending has not slowed down. Oversupply for the retail sector is usually less of a concern because owners or developers usually do a lot of pre-development research and planning before bringing a shopping centre into the market.

“However, it is still important for more information flow through the media to ensure that the numbers hitting the market are known by all – investors, developers, regulators and the general public and this critical flow of information in itself helps to balance supply and demand.”

Elvin says that there are “shadows of looming oversupply” in the next two to five years as more of the bigger property projects, many of them under the Economic Transformation Programme (ETP), get under way.

“Lenders and regulators should continuously insist on detailed market and feasibility studies and updates of those studies from time to time and not dispense with them for reasons of cost.

“They must also be perused by the user of the reports and not done just as a matter to satisfy compliance,” he says.

Elvin adds that in the retail industry, a shopping centre maintains its attractiveness by sustained astute mall management over a long period of time.

“Location is important but it is not everything. Mall management is more important. Positioning the mall, (having) the right tenant mix and the myriad of small details count in drawing shoppers in.”

Tan reckons that the success of a shopping mall is not location-specific but, project-specific.

“For example, Suria KLCC, Mid Valley Megamall, Pavilion KL, Plaza Sungei Wang, Berjaya Times Square, One Utama, Sunway Pyramid and a few more will remain as popular shopping centres in Klang Valley.

“At the same time, shopping centres that have been suffering from low shopping traffic will continue to face challenges in attracting crowds,” he says.

Tan says that there is still a clear disparity between success and failure.

“Popular shopping centres throughout the country continue to attract shoppers and quality tenants despite intense retail competition and weak economy. On the other hand, poorly occupied shopping centres continue to suffer.

“Last year, some shopping centres were giving long rent-free period to their retailers,” he says.

According to Tan, average rental growth for Klang Valley shopping-centre market should be not more than 5% this year.

“Average occupancy rate for Klang Valley shopping centres should remain at around 85%,” he says.

Elvin says the continued economic growth will underlie the growth of the retail sector.

“Will the global economy sink further? The European sovereign debt crisis continues and there is sluggish economic growth in the US despite a prolonged period of pump-priming.

“Will China and India slow down, although inflation in both countries is abating, which will allow them to stimulate further their economies.

Elvin notes that with Malaysia being an open economy and dependent on exports, he says that “it would not look good for us” if the global economy does not recover.

“The economy will have knock-on effects on the property market and may affect consumer spending.

“The authorities are also trying to slow or bring down household debt and this may crimp to an extent consumer spending. On the positive side, the rollout of the ETP projects may add buoyancy to consumer spending and this may also be an election year, which usually results in increased activity and spending.”

Tan concurs that the unresolved eurozone debt crisis, the potential US double dip recession and the recent decline in China export market will affect the Malaysian economy in 2012.

“When export-oriented manufacturing sector slows down due to low external demand, it will affect local employment market. Some Malaysians may be out of jobs this year, many will not get salary increments and graduates will not be able to find jobs. All these will affect retail spending.

“In addition, the uncertain world economy will indirectly lead to Malaysian consumers being cautious in their spending because they are worrying about their future job prospects. They will wait for a sale before they buy. They will look out for value-for-money promotions.”

Tan notes however that the 1.2 million government servants that were given salary increment and bonus recently will boost consumer spending.

“RM100 cash for the purchase of school books and related items has been given out to each student from standard one to form five in Malaysia. A one-off RM500 has also been given out in phases to families with income of less than RM3,000 per month.

“These will boost retail spending to a certain extent this year.”

According to the Valuation and Property Services Department’s Property Market Report for the first half of 2011, the retail market recorded substantially increased take-up space of 258,462 sq meters during the period.

All states except Kelantan recorded positive take-up, with Kuala Lumpur leading the take-up with 54,653 sq meters.

“As at end-June 2011, the country has nearly 2.05 million sq meters of space available for occupation,” the report said.

On the construction front, there were 15 completions in the first half of 2011 with 191,078 sq meters of new retail space entering the market, bringing up the country’s total existing space to 10.78 million sq meters.

The report also said rentals in shopping complexes in most states were generally stable in the first half of 2011.

It said rentals of retail space of shopping complexes in Kuala Lumpur were largely stable with isolated movements recorded in few buildings.

“Suria KLCC obtained premium rentals at RM592 to RM753 per sq meter for its lower ground floor units while retail units in KL Pavilion breached more than RM1,000 per sq meter.

“Bukit Bintang Plaza recorded a double digit increase of 11.5% for its ground floor units but those in the lower ground and second floor recorded slight decreases of 3.6% and 3.0% respectively.”

In Selangor, it was disclosed that rentals of retail space in shopping complexes were also stable with increases recorded in selected buildings.

“The Curve saw the rental of its ground and first floor units increased by 12.4% to 36.6% due to rental review, with rentals ranging from RM79.11 per sq meter to RM114.74 per sq meter.

“Rental in AEON Taman Equine recorded gains of 4.5% to 11.8% while AEON Bukit Tinggi in Klang saw higher gains of 7.6% to 40.0% in the review period. However, there were slight declines of 2.8% to 3.6% in the latter for its second floor units,” said the report.

By The Star

Al-Hadharah REIT net profit soars 273pc

2012-01-28T21:52:00.000+08:00

KUALA LUMPUR: Al-Hadharah Boustead REIT (Al-Hadharah REIT) turned in a historically strong performance for the final quarter of its year ended December 31 2011.

It posted a net profit of RM239 million compared with RM32 million in the corresponding quarter last year.

The significant jump was mainly due to fair value gains and an increase in rental income, Al-Hadharah said in a statement yesterday.

This boosts Al-Hadharah's full-year net profit to RM306 million compared with RM82 million last year, up a whopping 273 per cent.

Group revenue rose 33 per cent to RM100 million from RM75 million in 2010.

The realised operating profit for the year was RM93 million, a substantial jump of 37 per cent from RM68 million last year.

The remaining profit was derived from fair value gains, the company said.

"We are pleased to maintain our position as a leader in the REIT sector with an exceptional performance for financial year 2011," Al-Hadharah chairman Tan Sri Lodin Wok Kamaruddin said in the statement.

"Despite the uncertain global economic climate, by building on our established track record and exploring further opportunities in the market, we were able to continue to deliver greater value to our unitholders with improved earnings," he added.

Lodin said in line with its accounting policy, the company had undertaken a revaluation of its assets, recording a fair value gain of RM213 million.

This contributed to its total profit for the year and resulted in an increase in the closing net book value of its investment properties to RM1.3 billion, he added.

Al-Hadharah REIT's unit price closed at RM1.54 per unit (2010: RM1.44 per unit) on December 31 last year.

Its net asset value for the 12-month period rose to RM1.81 per unit (2010: RM1.42 per unit).

At the close of the financial year, the fund's market capitalisation grew to RM965.4 million, up substantially a significant jump compared with RM802.1 million in the previous year.

To reflect the strong performance, Al-Hadharah has announced a final dividend of eight sen, bringing the total dividend for the year to 12 sen. This represents a strong yield of eight per cent based on the closing unit price of the year.

"Moving forward, we look forward to further cultivating our portfolio of assets and enhancing our earnings potential.

"Given our unique position as Malaysia's only plantation-based REIT coupled with the steady demand for commodities, we are confident that we are poised for greater growth in the year ahead," Lodin said.

By Business Times

Berjaya Land mulling hotel divestment?

2012-01-28T21:50:00.000+08:00

OVERSEAS ASSETS: Properties earmarked for sale are in Sri Lanka, Seychelles, Singapore and Vietnam, which could fetch US$170m, says source

TYCOON Tan Sri Vincent Tan Chee Yioun’s Berjaya Land Bhd (BLand) is looking to divest a majority of its existing hotel properties abroad, sources say.

The hotel assets in Sri Lanka, Seychelles, Singapore and Vietnam, if sold, could fetch some US$170 million (RM517 million) in value, a source told Business Times.

It is believed that an agent may have been appointed as potential purchasers have been approached for the sale of a couple of the company’s hotel assets.

Berjaya, when contacted to confirm if some of its hotels abroad were up for sale and if it had hired an agent to execute the sale, said: “We are not aware of any sale of our properties at this juncture and there are no further comments on this issue”.

The asking price for Berjaya Hotels Singapore is around S$40 million (RM97 million) and the Intercontinental Hanoi Westlake in Vietnam was offered for an estimated US$80 million (RM243 million).

Other resorts identified for sale include two hotels in Seychelles (Berjaya Praslin Resort andBerjaya Beau Vallon Bay Resort and Casino) and one in Sri Lanka (Berjaya Hotel Colombo).

While it is unclear if the Sheraton Hanoi Hotel will be sold, a source said that the group is not looking to sell Berjaya Eden Park London in the UK.

BLand, in its annual report for the period ended April 30 2011, said performance of its overseas properties was mixed, registering gross revenue of RM64.2 million, representing a 4.7
per cent drop from RM67.4 million recorded in the previous year.

Room occupancy, however, had improved to 67 per cent from 64 per cent but the average room rate dropped by 9.8 per cent from a year ago.

In Seychelles, Berjaya Beau Vallon Bay Resort and Casino and Berjaya Praslin Resort posted marginally lower gross revenue due to stiff competition from a newly-opened resort on the island and lower arrivals, the annual report added.

“The InterContinental Hanoi recorded an occupancy of 61 per cent from 53 per cent in the previous year, but the overall market recovery in Vietnam was slow and competition from new hotels in the city was intense,” it added.

Berjaya, meanwhile, will continue to own the Long Beach Resort in Phu Quoc, Vietnam, and will be building a new hotel including a 280-room hotel in Bien Hoa City Square in Ho Chi Minh City.

By Business Times

Chaotic traffic situation at RM10mil temporary bus terminal

2012-01-28T21:47:00.000+08:00

Aerial view: The temporary bus terminal is located near the Sultan Abdul Halim ferry terminal in Butterworth. The green patch on the left was previously occupied by the former bus terminal and has been earmarked for the Penang Sentral project.

The Federal Government should consider calling a fresh tender for the RM2.7bil Penang Sentral transportation hub project, a consumer group said.

Penang Consumer Protection Association president K. Koris said this should be done as it has been more than four years since the project’s groundbreaking ceremony which was performed by former Prime Minister Tun Abdullah Ahmad Badawi in 2007.

He said if the appointed contractor was incapable of handling the mega project, then the Government should re-tender it in an open tender.

He said the Government had announced that the project, which would be similar to KL Sentral, would serve as an integrated traffic dispersal system for the northern region.

“Sadly, work on the project has yet to start except for the construction of a RM10mil temporary bus terminal and hawker centre nearby back in 2008,” Koris said in an interview.

He claimed that the situation at the temporary terminal was often chaotic and that the narrow one-way stretch on Jalan Pantai leading to the terminal was choked with traffic daily.

“The contractor should have constructed a proper lane with roofing to enable cars to drop off and pick up commuters at the temporary site.

“Now, motorists have to jostle with express buses and local stage buses as well as with petrol tankers, that frequent the nearby petrol plants, to drop off commuters,” Koris said.

Bagan Barisan Nasional co-ordinator David Chua said the project was vital to give Seberang Prai a major boost in terms of economic development.

“Rapid Penang has also committed to increase its fleet of buses in Seberang Prai by December but, with limited space at the temporary terminal, it may not be possible for fear of worsening the traffic congestion there,” he said.

Chua also said the project contractor must give due attention to the safety of commuters, including the disabled, by providing necessary amenities for them at the bus terminal.

Penange Public Works, Utilities and Transport Committee chairman Lim Hock Seng said the contractor had yet to submit the project’s planning permission application to the Seberang Prai Municipal Council.

“It has been over a year since the state helped the Transport Ministry acquire a parcel of state land to be merged with other parcels of land belonging to the Penang Port Commission, Malaysian Highway Authority and Rail Authority Commission to make way for the project.

“We will help ensure that the council expedite the project’s planning permission and building plans once we receive the necessary applications,” Lim said.

Last November, Northern Corridor Implementation Authority chief executive officer Datuk Redza Rafiq had said that the project, which has a gross development value of RM3.1bil, would be built in three phases and scheduled for completion by 2020.

He said the transportation hub would be able to accommodate up to 180,000 passengers a day.

The project, developed by Malaysian Resources Corporation Berhad (MRCB) in partnership with Pelaburan Hartanah Bumiputera Berhad over 12.8ha, is part of the Northern Corridor Economic Region initiative. Both companies formed a joint venture company called Penang Sentral Sdn Bhd which will undertake the development of the transport and commercial hub.

MRCB Selborn Corporation Sdn Bhd, a subsidiary of MRCB, has been appointed to manage the development, design, construction, completion and maintenance of Penang Sentral.

By The Star

Saujana Rawang offers an out-of-the-city abode

2012-01-27T11:00:00.000+08:00

Well spread out: The Botania units comprise Phase 11 of Saujana Rawang township, and will be located nearby the plots allocated for linked shoplots.

For aspiring homeowners who wish to avoid the saturated city market, the Saujana Rawang Township, developed by Glomac, may offer a viable alternative.

The project will be developed under Phase 11 of the township, with intermediate units measuring 22’ x 70’.

Assistant general manager Gary Goh said there would be a total of 160 units built under this phase, although it would be broken up into further sub-phases.

Pleased: Goh (left) and Ezwan at the launch of Phase 11B of the Botania units at the new Saujana Rawang township.

“Right now, we are already fully booked for Phase 11A, which comprises the first 30 units of Botania homes. Phase 11B which was recently launched will have another 27 homes,” said Goh.

He added that the sub-phases 11C and 11D, which comprised 52 units each, could possibly be launched together.

“It will be 160 units in total, and we are expecting this phase to be completed two years from now, by the end of 2013,” Goh said.

The two-storey units are built in modern contemporary style, with four bedrooms, a utility room and three bathrooms.

“The intermediate units are priced at RM419,882, while corner units will of course cost more. This makes Botania an ideal solution for people looking to buy property with a budget of RM500,000.

“They will be able to afford landed property even though it is some distance away from the city,” said sales and marketing manager Ezwan Zainal.

Ezwan noted that there were eight more development phases left for Saujana Rawang as the township had more commercial and residential areas to develop, including medium-to-high priced apartments as well as two lakes which allowed for recreational activities.

“We are also building another access road into the township as the current one can get too congested at times. So the new road we are building will allow residents and visitors to enter Saujana Rawang without traffic problems,” said Ezwan.

It was estimated by Ezwan and Goh that the future development phases would take another five years for completion.

“Our first buyers were primarily bumiputras but we are also seeing many Chinese buyers now showing interest in this township as well,” Ezwan noted.

He explained that recent developments in the area, such as the opening of an Aeon Jusco shopping centre in Rawang had contributed to the influx of buyers into Saujana Rawang, and that the township’s own phased development would further increase the already encouraging take-up rate.

By The Star

All set for a lasting impact

2012-01-27T10:29:00.000+08:00

The Belleview Group is undertaking the development of RM1.724bil worth of property this year for Penang island and Kedah.

Its managing director Datuk Sonny Ho said some RM360mil worth of property projects including All Seasons Park’s final phase, Moulmein Rise and W Residence were planned for the island.

“The remaining RM1.364bil worth of property included the third and fourth phases of the Kulim-Techno City (KTC) project, Amansuri Residences, Aman Central and Star Centro in Kedah.

“Kicking off the launch for Penang island in April is the RM200mil Moulmein Rise project in Pulau Tikus, Penang, a 27-storey iconic structure comprising 84 life-style suites and a two-level podium of retail shoplots, with views of the sea-fronting Gurney Drive,” he said.

Designed architecturally to be a modern building, it would include a host of desirable amenities with five-star features and state-of-art security system, he added.

In May, Belleview will launch the RM100mil Autumn Tower comprising 220 condominium units for the All Seasons Park project in Bandar Baru Air Itam (popularly known as Farlim), Penang.

The built-up area for the units ranges between 850sq ft and 1,323sq ft. The project also features a full range of modern recreational facilities.

Ho said the sales of the Summer, Spring and Winter Towers had been a roaring success, with only a handful of units available.

“The third project launching on the island in June is the RM60mil W Residence on Jalan Utama.

“W Residence comprises eight freehold bungalows with a gated community that provides a safe and secure environment, monitored by closed circuit television cameras and protected by a two-tiered security electronic card system,” he said.

For Kedah, Belleview kicked off with the launch of the RM180mil Amansuri Residences in Alor Setar on Tuesday.

The Amansuri Residences, Ho said, comprised 277 condominiums with built-up areas of 1,248sq ft onwards.

“Equipped with an advanced three-tiered security system, the project has extensive water features, landscaped greenery and a grand guest drop-off atrium,” he said.

Belleview will then launch the RM34mil third and fourth phases of the KTC project at the Kulim Hi-Tech Park in the second half of this year.

Ho said both phases comprised 1 1/2 storey and double storey terraced houses, single-storey and 1 1/2 storey semi-detached houses, and single storey bungalows.

“The KTC project is about 20 minutes away from the Penang Bridge, and is a self-contained township with schools, hospitals, a hypermarket, a recreational park, a golf course and multi-national factories nearby,” he said.

In June, Belleview will launch the RM150mil Star Centro in Alor Setar, a multi-functional commercial centre with 32 units of three-level shop offices and a leading hypermarket as the anchor tenant.

The project is located at the intersection of Jalan Tambang and Jalan Gangsa near the edge of the city on the west side which is accessible from all directions.

Ho said the project would offer a vibrant retail mix of restaurants, lifestyle cafes, banks, telecommunication centres, pharmacy, and personal care outlets.

Belleview Group recently started the construction of the RM1bil Aman Central, the largest shopping mall in Kedah.

The project, located along the busy Lebuhraya Darulaman, will have six floors of retail outlets, providing food and beverage services, entertainment, fitness centre, and bowling alley. All the projects, he added, had received overwhelming response and enquiries.

Meanwhile, Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat said the sentiments in the property market would remain cautiously optimistic.

“However, there are still a strong propensity to buy in preferred locations and an interest in well conceptualised schemes with good quality finishes and security.

“Presently, foreigners comprise less than 8% of the property buyers in Penang. The foreign segment is expected to grow in tandem with Penang’s popularity as a second home paradise,” he said.

By The Star

RM650mil Hunza projects

2012-01-26T10:18:00.000+08:00

Facelift: The group has spent RM10mil to restore the heritage structure and a further RM3.5mil to transform St.Joseph’s Novitiate building in Gurney Paragon, now known as St. Jo’s, into a new dining and entertainment hub in Penang.

GEORGE TOWN: Hunza Properties Bhd is launching about RM650mil of residential properties in Kepala Batas in Seberang Prai and Tanjung Bungah on Penang island this year.

Group executive chairman Datuk Khor Teng Tong told StarBiz that residential properties worth about RM300mil in gross development value (GDV), comprising double-storey semi-detached, terraced, and low-medium cost houses, had been planned for Kepala Batas.

“We have already started work on the houses and will launch the properties for sale in the second half of 2012,” Khor said. “After the launch, the group will still have about 350 acres of undeveloped land-bank in Kepala Batas, which will be used for residential development.”

In Tanjung Bungah, Khor said the group would launch Alila 2, a 265-unit condominium project, in the second half of this year. It would have a GDV of about RM350mil.

“The condominium units will have built-up areas ranging from 1,700 to 3,000 sq ft,” he said.

On the group's proposed mixed-development project with an approximate GDV of RM6bil to RM7bil on a 16.2ha site in Bayan Baru, Khor said the group had engaged two internationally renowned architect consultants to advise on the master plan.

He said the group had just acquired a 2ha land to develop 1,000 low-cost homes for the households currently occupying the over 16.2ha site. “We have initiated steps to obtain approval from the local authorities to develop the low-cost homes.”

Khor also said the group was targeting to complete the Gurney Paragon shopping mall in November 2012.

“So far we have committed to lease out about 45% of the over 700,000 sq ft of nettable area of the shopping mall,” he said.

On the preservation of St. Joseph's Novitiate building in Gurney Paragon, now known as St. Jo's, Khor said the group had spent RM10mil to restore the heritage structure and a further RM3.5mil to transform it into a new dining and entertainment hub in Penang.

“Hunza will work hard to continue to bring in established names that have yet to set up a presence in Penang to open their businesses in Gurney Paragon,” he said.

Khor said the multi-purpose hall of St. Jo's would be used for hosting events such as meetings, conventions, and weddings.

St. Jo's was completed and formally opened in 1918 by the De La Salle Brothers, who pioneered education in Malaysia and around the world.

By The Star

SP Setia climbs to 6-month high

2012-01-26T10:16:00.000+08:00

With a higher buyout offer in place and an assurance that its chief Tan Sri Liew Kee Sin will continue to helm the company, SP Setia Bhd's stock climbed to an almost six-month high yesterday.

State investor Permodalan Nasional Bhd (PNB) roped in Liew as a joint bidder and improved on its last September solo bid of RM3.90 a share for the property developer last Friday.

The joint bidders are now offering RM3.95 for each SP Setia share and 96 sen for each warrant, instead of 91 sen before.

The stock rose by 1.5 per cent to close at RM3.94 yesterday, off an intra-day high of RM3.97.

Analysts from RHB Research Institute and MIDF Research said the offer was "fair" and advised minority shareholders to accept it.

Both raised their target price for SP Setia to RM3.95 to match the offer price.

"The revised offer will be a win-win situation for both parties as PNB could leverage on Liew's expertise in the running of SP Setia while SP Setia will have the backing of a strong shareholder," MIDF said in a note to clients yesterday.

HwangDBS Vickers Research, meanwhile, raised its target price to RM4.50 from RM3.90 and said investors were better off holding on to the shares given that there will be management continuity for three years.

Under the new deal, Liew will keep his 8.56 per cent stake in SP Setia and remain as its group president and chief executive officer for three years, during which he will have sole responsibility for the mana-gement and general conduct of the business.

No changes will be made to the board, and PNB will keep its two board seats.

"We welcome this news as it removes uncertainty over the future of SP Setia, particularly with regard to Liew's involvement," Hong Leong Investment Bank Bhd (HLIB) .

With PNB's backing, analysts believe SP Setia stands an even better chance when bidding for government land parcels.

MIDF Research said the offer is fair given the current uncertainty in the world economy and the normalising growth rate of the property sector.

"From last week's briefing, Liew indicated that SP Setia is soon signing the Bangsar land deal, which is estimated to yield a gross development value of RM10 billion.

"However, in the near term, outlook for the overall property sector will still be rather challenging, and we thus advise investors to accept the offer," RHB Research said.

The deal is expected to be completed by end-March.

By Business Times

SP Setia at 6-month high

2012-01-26T10:14:00.000+08:00

PETALING JAYA: SP Setia Bhd rose six sen, or 1.5%, to close at RM3.94, its highest level in almost six months and one sen short of the revised offer price jointly proposed by its president and chief executive officer Tan Sri Liew Kee Sin and Permodalan Nasional Bhd (PNB).

Meanwhile, analysts have hailed the revised takeover offer as a “win-win” deal for all parties as it would enable Liew to stay at the helm of the property developer with full control over the next three years.

“This is close to our best-case scenario where there is incentive for top management to stay on and take SP Setia to greater heights. It is a win-win situation for all parties and a share price catalyst,” CIMB Research analyst Terence Wong said in a note to clients.

Liew’s commitment to stay on in SP Setia has been viewed positively by analysts.

SP Setia had on Friday notified Bursa Malaysia about the revised offer, which raised the offer price by five sen each for the shares and warrants to RM3.95 and 96 sen, respectively.

Liew, PNB and SP Setia would also enter into a management agreement for Liew to remain in his current position for three years following the close of the revised offer.

Among others, Liew would continue to oversee and manage the operations of SP Setia within the ordinary course of its business and enter into contracts or arrangements for and on behalf of the company.

As a joint offeror, Liew is not allowed to sell his 8.6% direct shareholding of 158.2 million shares, or 8.6% stake, in SP Setia, but he would be given a put option to sell the shares to PNB in tranches over three years at an exercise price of RM3.95.

Under the terms of the put option, Liew can choose to sell his stake to PNB at RM3.95 or in the open market at the then prevailing market price, which thus acts as an incentive for him to continue to grow the value of the company.

However, Liew's wife, who has a 2.3% stake in SP Setia, will be accepting the revised offer.

PNB and its related parties currently hold 38.6% of SP Setia while Liew has a direct and indirect stake of 10.9%, which adds up to a combined 49.5% interest.

“We view positively Tan Sri's (Liew) commitment to stay on and retain his direct stake without getting any premium even though he will only be allowed to exercise the put option gradually over three years.

“This signals his commitment and confidence that he can take SP Setia to the next level and add value to the company and share price,” CIMB Research said.

Kenanga Research said in a report that the slightly higher offer price is a show of good faith to minority shareholders, adding that SP Setia would have more bargaining chips to bid for government land with the backing of a shareholder like PNB.

As PNB intends to retain the company's listing status, RHB Research Institute noted that post-takeover, the joint offerrors might have to pare down their stakes via a placement exercise to maintain the stock's mandatory 25% free float.

Kenanga Research said investors with a 12-month view should accept the revised offer as there might be cheaper entry points when the stock succumbed to an expected downtrend in the property sector. However, it said longer-term shareholders might want to stay invested as liquidity could tighten up in the future, preventing substantial accumulation.

By The Star

Developers advised to look into location, cost and design to make sale

2012-01-25T08:36:00.000+08:00

JOHOR BARU: Property developers in Johor must be prepared to face tougher times this year and next if the eurozone debt crisis prolongs and the United States continues to experience economic slowdown.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Simon Heng expected 2012 property outlook to be not as good as 2011.

"Hopefully, our members are ready to brace the hard times and should carefully plan their launches to avoid a property overhang," he told StarBiz.

Heng said the sign was already there with developers chalking lower sales in the Malaysia Property Expo (Mapex) held in November last year.

Developers who took part in the four-day event raked in about RM256mil in sales over a month-period lower from RM384mil in Mapex in May 2011 and RM331mil in November 2010.

Heng pointed out that the 30-day period starting from the first day of Mapex was the benchmark used by Rehda to determine the value of sales by participating developers.

He said the last five to six years were considered good for most Johor property developers as they were able to keep the number of unsold properties to a minimal.

Heng said local developers had learnt their lesson well from the 1997-1998 Asian financial crisis as they were caught unaware resulting in many abandoned projects and unsold properties.

He advised developers not to be overly ambitious and more realistic when launching a project this year and their focus should be more on products that could sell in view of the unfavourable property market.

"Go for affordable residential properties as demand for them is good especially in the Johor Baru district as there are many potential first time house owners out there," said Heng.

He said first time house buyers normally went for houses priced within their budget and with no-frills designs as what was important was to have a roof over their heads.

Heng said areas like Gelang Patah, Kempas, Kulaijaya, Mount Austin, Nusajaya, Senai and Tebrau would be the property hot spots and many projects were expected to be launched this year and 2013.

"For instance, land in Tebrau has been sold for RM4 per sq ft on average the last few years but now the asking price is RM20 per sq ft or even higher," he said.

Heng said the completion of the New Coastal Highway, Eastern Dispersal Link Expressway and Southern Link this year would improve accessibility and connectivity within Iskandar Malaysia.

Leisure Farm Corp Sdn Bhd senior project manager Siew Fook Wah said that he always believed there would be a silver lining despite uncertainties in the property market.

He said the ruling introduced by Singapore last December to foreigners buying private residential properties in the republic was likely to benefit property developers in Iskandar Malaysia.

Foreigners have to pay an additional 10% stamp duty when buying a private home there; effectively raising the purchase price by 10%.

The move is seen to cool the private residential prices in the island state which are on the uptrend despite a slowing economy.

Siew said Johor's close proximity with the republic was an added advantage and prices of private properties here were lower than those in Singapore and to some extend in places like Kuala Lumpur and Penang.

"Iskandar Malaysia will continue to drive the growth of the property market in Johor in many years to come with demand for high-end properties likely to remain good," he said.

Siew said that with Iskandar Malaysia progressing well since its inception on Nov 4, 2006, these buyers (foreigners and Singaporeans) were most probably looking at Johor Baru.

A subsidiary of Mulpha International Bhd, Leisure Farm is developing the RM2.1bil Leisure Farm Resort on 714.27ha in Gelang Patah. The residential and gated resort development project offers 11 architectural design themes.

The villas are built on lots of 3,000 to 18,000 sq ft and priced from RM2mil and above. The scheme is now home to international communities from 35 countries.

SP Setia Bhd executive vice-president (property division) Datuk Chang Khim Wah said the company was still upbeat on the Johor property market as demand for properties had gone up steadily in the last few years.

"Take up rate for our properties in South Johor has been good over the years as we don't only cater for locals but also Singaporeans," he said.

Chang concurred with Siew that Iskandar Malaysia was one of the strong factors that would help to mitigate the slow growth in the Johor's property market this year and next if there was one.

He said Singapore would play a significant role in the development of Iskandar Malaysia as when people talked about Iskandar Malaysia, they would look at the bigger picture and include Singapore as well.

He said compared with other economic-growth corridors in the country, Iskandar Malaysia had the competitive edge due to its close proximity with Singapore.

"Investors, especially foreigners, will be attracted to invest in Iskandar Malaysia as they have the best of both worlds Johor and Singapore," said Chang.

By The Star

SP Setia jumps on improved PNB offer

2012-01-25T08:30:00.000+08:00

SP Setia Bhd, Malaysia's biggest listed property developer by sales, advanced to its highest level in almost six months after Permodalan Nasional Bhd raised its buyout offer.

The stock gained 1.6 per cent to RM3.94 ringgit at 11:35 a.m. local time in Kuala Lumpur trading, bound for its highest close since Aug. 2.

Three brokerages raised their price estimates today, including HwangDBS Vickers Research Sdn. which forecast in a report that SP Setia could rise to as much as RM4.50.

Permodalan Nasional, the country's largest state asset manager better known as PNB, boosted its offer by 5 sen per share to RM3.95 for the remaining stock it doesn't already own and brought in SP Setia's Chief Executive Officer Liew Kee Sin as a bidding partner, according to an exchange filing on Jan. 20. Liew will stay on to run the developer as part of a deal struck almost four months after PNB's initial bid.

“This proposal is a win-win solution for PNB, the management and shareholders," Loong Kok Wen, an analyst at RHB Capital Bhd., wrote in a report today. The revised offer is "fair," she said, advising investors to accept.

The new bid values SP Setia at RM7.3 billion (US$2.4 billion). Liew, who currently owns 10.9 per cent of SP Setia, will keep his post for three years after the buyout is completed, according to the statement.

Investors are "better off holding on given management continuity for three years," HwangDBS Vickers said in its report. "Strong execution track record and solid balance sheet should help SP Setia weather challenging outlook."

Hong Leong Investment Bank Bhd. and RHB Capital Bhd. increased their share estimates to match the new offer price, according to separate reports today.

The developer reported net income of RM82.5 million for its fiscal fourth quarter ended October, 9.7 per cent growth from a year earlier. That brought its full-year profit to RM328 million, its highest annual income since 1994, according to data compiled by Bloomberg.

The benchmark FTSE Bursa Malaysia KLCI Index fell 0.1 per cent today. The stock market resumed trading after a two-day break for the Lunar New Year holidays.

By Bernama

CapitaMalls Malaysia REIT chalks up higher profit

2012-01-25T08:28:00.000+08:00

KUALA LUMPUR: CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM) posted a higher pre-tax profit of RM179.814 million for the financial year ended December 31 2011 compared with RM109.396 million previously.

In a statement, the company said the better performance was attributable to revenue growth at the mall level and savings in financing costs.

CMRM's acquisitions last year of Gurney Plaza Extension and East Coast Mall contributed to earnings, it said.

The manager of CapitaMalls Malaysia Trust's (CMMT) said revenue rose to RM230.887 million from RM94.636 million in the same period a year earlier.

It said CMMT achieved a distribution per unit (DPU) of 7.87 sen during the year, 8.4 per cent higher than the annualised DPU of 7.26 sen previously.

CMMT recorded net property income (NPI) of RM162.4 million, 1.6 per cent higher than the forecast NPI of RM159.8 million.

The total distributable income was RM118.3 million, eight per cent higher than the forecast distributable income of RM109.5 million for the year, CMRM said.

By Bernama

L&G set to shine again

2012-01-23T22:59:00.000+08:00

Low with a model of Damansara Foresta.

Last week, Land & General Bhd (L&G) soft-launched its condominium project, Damansara Foresta, in Bandar Sri Damansara, Petaling Jaya. That launch was significant in many ways.

L&G is an old brand that became a casualty of the 1997/98 Asian financial crisis. Bandar Sri Damansara is its old turf, having made a name for itself when it built the township with some 14,000 households decades ago.

The company fell victim to the crisis because it had a cashflow problem and became insolvent. It also had massive debts. It was also involved in a variety of businesses and owned properties in different parts of the world that it was not able to fully concentrate on.

Like other companies that fell during that period, L&G’s fall from grace revealed its many weaknesses, which had earlier went unnoticed.

The whole unfortunate affair culminated with the resignation of its captain, Tan Sri Wan Azmi Wan Hamzah, in 2002 from the debt-laden property group.

In 2007, Hong Kong-based property tycoon Tan Sri David Chiu became a substantial shareholder of L&G with an 8.35% stake through Mayland Parkview Sdn Bhd. That stake has grown to 16.94% today. His entry sparked speculation of a possible asset injection or takeover exercise. It pushed the stock up from 20 sen to over 80 sen in six months.

But there was no asset injection. Instead, the new management under managing director Low Gay Teck spent the last several years quietly cleaning house and strengthening the foundations of the company.

When L&G, under Low, launched commercial project 8trium in Bandar Sri Damansara, buyers were sceptical about the company. Does it has the financial muscle to pull it off? Today, that project is more than 95% sold and in about three months, it will be completed.

When it launched its Damansara Foresta condominium project (with gross development value of RM700mil), this skepticism was not evident anymore.

Low is a property man. He was with Mayland with Chiu for many years and has helped build up Mayland’s name in the Plaza Damas area in Sri Hartamas. But while Mayland concentrates on studio units of about 500 sq ft, L&G prefers the 1,400 to 1,600 sq ft range as can be seen in the recent launch.

While property development will remain its core business, contributing about 70% to the group’s revenue, L&G also inherited the education business in the form of private school Sri Bistari.

The last several years has seen student enrolment double to about 1,100. Low has never been in the education business but he seems willing to take what the company has inherited and to make the most of it. Today, revenue from its education business amounted to about RM5.7mil (19% of total revenue of RM28.7mil) for the six-month period ended Sept 30, 2011, according to filings with Bursa Malaysia.

Total contribution from the property division amounted to RM17mil (66% of total revenue) and looking ahead, property will be the company’s main business for the next decade or so.

L&G also has a bit of oil palm plantation (about 1,010ha) which it inherited from the previous management in the Lembah Beringin area, its previous township development during its heyday. There are plans to fully make use of that piece of land with new plantings.

The company has other sources of revenue of about RM7mil but at press time, it is uncertain whether this RM7mil is a contribution from the plantation business.

The recent launch of Damansara Foresta is interesting because that project is only one part of that 40 over acres in Sri Damansara. The entire gross development value of the 40-odd acres will be about RM2bil. As mentioned earlier, L&G made its name in Bandar Sri Damansara and it looks like it will continue to rebuild its name and branding in that location.

With that land size, the project will take several years to complete and the profit margins should be good as it owns the land, having bought it decades ago. Its recent launch was priced between RM500 and RM600 per sq ft.

L&G also has two other pieces of land, including about 25 acres in the Bandar Sri Damansara clubhouse area, but it will have to solve the membership issue of that clubhouse first.

Last year, it bought about 200 acres in Seremban and has to date submitted its development plans to the local authorities there. The Seremban land will be used for a mixed residential project with terraced, semi-detached and cluster homes priced at about RM300,000 for the terraced houses.

Although it plans to have predominantly landed housing for the Seremban land, L&G will very probably focus on condominium projects for its overall property business in order to slowly get back on its feet. It also has a joint-venture development with the Mayland group at Jalan Ampang known as Elements@Ampang with a GDV of RM700mil.

The company’s total borrowings amounted to RM68.58mil, while its cash and cash equivalents totalled about RM140mil as at Sept 30, 2011. It took a bridging loan of about RM90mil for Damansara Foresta, which is about 50% sold to date.

As mentioned earlier, when the new management came in in 2007, speculation drove L&G’s share price up to about 80 sen a share. Today, it is between 30 and 40 sen. Its shareholding seems rather fragmented, with Wan Azmi having a 2.13% stake.

Now that Low and his team have cleaned up the company, things are moving again.

By The Star

Legoland Malaysia expects a million visitors in first year

2012-01-23T22:54:00.000+08:00

JOHOR BARU: Legoland Malaysia is projecting its nearly-completed theme park to attract a million visitors during its first year of operation.

Its general manager Siegfried Boerst said the theme park will be officially opened in the second quarter of this year.

"We are looking at more than one million visitors for the first 12 months of operation, and we hope it increases all the time," he told reporters after the unveiling of Legoland Malaysia's dragon mascot made entirely of Lego bricks called "Ollie The Dragon" at Thistle Hotel here on Friday.

The model took 50-man hours to build from approximately 10,000 Lego bricks.

Boerst said construction of the RM700 million theme park is progressing well despite the rainy season affecting Johor, adding he is confident it will be completed on time.

Legoland Malaysia, he said, is planning public relations activities in Malaysia and several other East Asian countries including Singapore and Indonesia leading up to the theme park's official opening, adding it is also developing Johor as a tourist destination.

On the annual pass ticket sales, he said Legoland Malaysia is happy with the response, with its counters selling more than 300 passes daily, with Malaysians making up 80 per cent of the buyers, although the operator is hoping to attract more Singaporean buyers.

"We have registered several thousand annual pass sales, and we intend to keep it open for a few more weeks," he said.

The annual passes, sold at a discounted price of RM195 (adult) and RM150 (children), are valid right into the end of 2013.

Tickets are available online through the AirAsia RedTix and Legoland Malaysia websites.

Legoland Malaysia, the world's sixth Legoland and Asia's first, is located in Iskandar Malaysia and will feature more than 40 interactive rides, shows and attractions when it opens.

Other Legoland theme parks across the world are in Denmark, the UK, Germany and Florida and California in the US.

By Bernama

Sara-Timur expands

2012-01-21T09:49:00.000+08:00

New borders: Artist’s impression of Mersing Laguna – a multi-billion ringgit integrated resort development on three reclaimed islands – in Johor.

KUCHING-based construction and property development company Sara-Timur Sdn Bhd is building its presence in Peninsular Malaysia with a number of projects in the pipeline.

The company has an order book of RM2bil worth of construction projects and RM1.8bil of development projects.

Sara-Timur has two development projects in the peninsular KB Sentral at Bandar Baru Tunjong in Kota Bahru, Kelantan; and Mersing Laguna in Johor. It is also undertaking construction projects at KL Sentral and Utama Lodge Condo in OUG, Kuala Lumpur; and Teliti Data Centre in Nilai, Negeri Sembilan.

Sara-Timur managing director John Loi says with the company's successful venture to Peninsular Malaysia, it has established a platform to grow into a better known industry player.

“There are more opportunities here in Peninsular Malaysia for us and we intend to build up the company's presence here,” he tells StarBizWeek.

KB Sentral project in Kota Bahru which is to kick off around the middle of this year for completion in five years, will have a gross development value of RM1.2bil.

The project is a joint-venture urban development between Perbadanan Menteri Besar Kelantan, Tunjong Development Corporation Sdn Bhd and Sara-Timur Urban Development Sdn Bhd.

The 42 acres of new lifestyle project in Kota Bahru is part of the 2,000 acres of new urban redevelopment project of Bandar Baru Tunjong by the Kelantan state government.

Located about 6km from the Kota Bharu town, the new business hub is to meet the growing needs of the local populace.

Loi says the development is based on the Intelligent City concept of cosmopolitan community living where occupants will get to enjoy high-speed broadband connectivity.

Meanwhile, Mersing Laguna is a multi-billion ringgit integrated resort development on three reclaimed islands totalling over 2,000 acres set in the South China Sea off the town of Mersing in Johor.

The islands are designed as an oasis dotted by premier residential, commercial and tourism-related developments encased in an eco-friendly environment.

The developer of Mersing Laguna, Radiant Starfish Development Bhd, has awarded one of the construction packages, parcel 12 to Radiant Sara-Timur International Sdn Bhd.

Loi says the award is based on a turnkey design and build contract valued at RM360mil for the construction of an integrated resort development comprising a 5-star 216-room hotel, 70 service apartments, and 73 villas.

Radiant Sara-Timur has also been awarded another turnkey design and build package for an estimated sum of RM370mil by the same developer that involves the redevelopment of the existing Mersing township. Also known as the “Mersing Urban Renewal Development Project”, Loi says the company will apply its experience in the urban renewal project of the Sandakan Harbor Front project to help revitalise Mersing.

“The urban renewal program that includes the building of new business class hotels, recreational parks, cultural centres, medical centres, and commercial and business areas, will cater to the growing population by meeting their aspirations and needs. There will also be provision for the recovery of the foreshore around Mersing, allowing for the development of landscaped boulevards and recreational amenities for the local population,” he explains.

Sara-Timur also has two projects in Kota Kinabalu Jade Residence and the Jesselton Point Hotel comprising 140 rooms, 118 hotel suites and 25 business suites.

Projects it has completed to-date include the Sandakan Harbour Square, Sutera Harbour Hotel and Resort, Sarawak State Stadium, and Taman Tiong Ung Siew in Sibu.

Loi: ‘Sara-Timur has the resources to deliver sustainable solutions in both single-use and mixed-use developments and urban redevelopments.’

Loi says Sara-Timur will increase its hotel assets from one in Sandakan currently to other assets in Mersing, Kota Bahru and Kota Kinabalu.

Despite the challenging external front, he says the outlook for the local construction and property sectors looks quite stable.

“In the past three years, the company's turnover has doubled to RM350mil for the financial year (FY) ending May 31. We are confident the performance will get better going forward.”

Loi says the company hopes its revenue from property development will increase to 50% in the next three years from less than 15% in financial year 2011.

Sara-Timur has recently set up its corporate headquarters at Solaris Dutamas in Kuala Lumpur, and is looking to increase its paid-up capital to RM18mil from RM10mil now.

He says the company's forte lies in urban renewal projects to give a new lease of life to old dilapidated townships around the country.

“Sara-Timur has the resources to deliver sustainable solutions in both single-use and mixed-use developments and urban redevelopments. Its capabilities include building and civil engineering contracts comprising project management, turnkey design and construction, and project partnering.

“We choose to support new development and urban redevelopment because of the incredible impact they make on the lives of the families and the communities.

“New developments also provide attractive investment opportunities. They form the main elements of a new strategy by our local governments to see to the implementation of both new development and urban redevelopment plans through the attraction of private capital,” Loi points out.

To finance the company's expansion, Loi does not discount the possibility of Sara-Timur making an initial public offering on the Main Market of Bursa Malaysia.

“We are looking at the option and hopefully our listing plans will materialise by this year,” he says.

By The Star

SP Setia must take possession of Pisa first

2012-01-21T09:46:00.000+08:00

The timing of property developer SP Setia Bhd's new launches for its 2012 fiscal year in Penang appears to hinge on whether the company is given vacant possession of the Penang International Sports Arena (Pisa) by the first quarter of this year to build the RM300 million Subterranean Penang International Convention and Exhibition (sPICE) Centre.

Business Times has learnt that the property giant's application for planning approval to proceed with its upmarket Setia V Residences project along Gurney Drive cannot be deliberated as yet by the Penang Island Municipal Council, until the time SP Setia takes over Pisa officially.

Three other projects in the pipeline for its fiscal year ending October 31 2012 are located in the Relau and Sungai Ara areas.

The company on January 3 took over as operator of the building and it has already ploughed in RM1 million to spruce it up, sources say.

"The problem now lies in the fact that SP Setia is unable to avail itself yet of the increased density privilege it was accorded as part of the sPICE deal," one source said.

SP Setia was granted the right to build an additional 1,500 residential units over and above the density limit of its existing and future projects in Penang over a 30-year period when it inked an agreement with the Penang authorities last year to build the convention centre.

The project includes 2.8ha public park and an upgraded and refurbished Pisa.

The move for SP Setia to be granted additional density was viewed positively by analysts who noted that it would enhance the gross development value of some of the company's proposed high-rise projects.

Based on the existing density limit, it is learnt, Setia V Residences can only build about 50 units on the 0.8ha site, which has a dual frontage of the sea-fronting Gurney Drive and Jalan Kelawai in Pulau Tikus.

Analysts had also hailed the fact that with the additional density, SP Setia would now have a competitive edge over other developers in bidding for land in Penang, since it would be in a position to pay higher land costs, given the company's ability to build beyond the "normal" allowed density.

SP Setia officials could not be reached for comment.

Under the agreement signed in August last year between Penang island Municipal Council and SP Setia's subsidiary, Eco Meridian, the proposed sPICE Centre will feature a basement car park and a green park on the roof top. The project, which is expected to be completed by 2014, includes a 2.8ha public park, refurbishing, repairing and upgrading Pisa and the Aquatic Centre as well as construction of a new hotel, retail outlets and a car park.

By Business Times

PNB, Liew raise offer for SP Setia to RM3.95 a share

2012-01-21T09:44:00.000+08:00

KUALA LUMPUR: Permodalan Nasional Bhd (PNB)’s takeover bid for property developer SP Setia Bhd’s shares has takena new turn, and closure.

The country’s largest fund manager has revised upwards its offer price to RM3.95 for every SP Setia share, up from RM3.90 previously.

Equally interesting, SP Setia founder Tan Sri Liew Kee Sin will now be joining the governmentlinked asset manager in making the revised offer.

In a statement yesterday, SP Setia said PNB and Liew will also now pay 96 sen per SP Setia warrant they do not already own, instead of the earlier 91 sen offered by PNB alone.

“The joint offer enables a closure to be arrived at finally on uncertainties over takeover matters.

More importantly, it will provide a fresh launching pad for SP Setia to continue pursuing its quest to create greater value to
all stakeholders,”Liew said in the statement.

As a joint offeror, SP Setia said Liew will not be accepting
the revised offer. Instead, he will hold on to his direct eight per cent stake amounting to 158.2 million shares.

It also noted that PNB had given Liew an option to sell his stake progessively in tranches after three years at RM3.95 a share.

Liew said he is “highly appreciative” of PNB’s put option offer as it will enable him to focus on doing his best to grow the underlying value of the company.

“After many months’ work, I am happy that we have managed to come up with what I believe is a win-win solution for everyone, especially our customers, employees and all shareholders of SP
Setia,” he added.

SP Setia said a management agreement would also be signed between the company, PNB and Liew for the latter to remain as group president and chief executive officer for three years, after the close of the revised offer.

By Business Times

PNB and Liew in Joint offer for SP Setia

2012-01-21T09:40:00.000+08:00

KUALA LUMPUR: Tan Sri Liew Kee Sin and the country's largest asset manager, Permodalan Nasional Bhd (PNB), are making a joint revised offer for SP Setia Bhd in a bid to safeguard the interests of all shareholders and maintain management continuity in the company.

This new turn of events followed the move by PNB to raise its stake in property developer SP Setia via a conditional offer made last September to gain control of the company.

The new offer price has been revised to RM3.95 per share from RM3.90 while the offer for the warrants has been revised to 96 sen per warrant from 91 sen.

According to sources, the joint offer was arrived at following meetings between Liew, who is president and chief executive officer of SP Setia, and PNB president-cum-group chief executive Tan Sri Hamad Kama Piah Che Othman.

SP Setia board of directors said in an announcement to the stock exchange that they received the notice of revised offer from Maybank Investment Bank Bhd issued on behalf of PNB and Liew. The company had earlier asked for the trading of its shares to be suspended, with the last traded price at RM3.88.

As part of the offer, Liew, PNB and SP Setia would enter into a management agreement for Liew to remain at the helm for a period of three years following the close of the revised offer.

He would continue to oversee and manage the operations of SP Setia within the ordinary course of the company's business, appoint and remunerate managers and employees as well as enter into contracts or arrangements for and on behalf of the company.

Liew told StarBizWeek that the key point of the joint offer was the strong marriage that would arise, with SP Setia able to lean on the support of cash-rich PNB for expansion and growth while PNB would have invested in a trusted brand with a regional presence.

“It's a win-win situation and there'll be no change in management,” Liew said, adding that PNB had remained supportive of the company's ventures abroad, including SP Setia's failed bid for the Battersea power station in Great Britain, even during the period of the first offer.

He said the previous offer caused a bit of confusion as the company's management was in the dark as to PNB's intentions. “But the management agreement shows that PNB recognises that without a strong team, SP Setia's future will not be so bright,” Liew pointed out.

He said the revised offer was also to “appease ruffled feathers out there” while his role as a party acting in concert was to overcome the Securities Commission's objections as well as the rules on takeovers and mergers.

Liew, who has an 8% direct stake in the company, would not accept the revised offer but would be given a put option in the three years following the close of the takeover offer. This would give him the right to sell his stake to PNB in tranches at the same price of RM3.95 per share.

He said the revised offer and the conditions attached to it, including retaining the current management team, showed PNB's genuine interest and sincerity as an investor.

Hamad had taken the step of reassuring the company and stakeholders in a joint statement with Liew last October that the latter would continue to lead SP Setia and manage its day-to-day operations.

“On our part, we'll now have to prove ourselves worthy as they've been supportive of all the key thrusts of the company, be it in eco-homes, township development, luxury condominiums, high-rise residentials and integrated commercial projects,” Liew said.

By The Star

KrisAssets plans REIT exercise

2012-01-21T09:39:00.000+08:00

PETALING JAYA: KrisAssets Holdings Bhd is likely to inject its two retail assets in Mid Valley City the Mid Valley Megamall and The Gardens shopping mall into a retail real estate and investment trust (REIT) this year.

An industry source said the company had already engaged a merchant bank to look into the REIT exercise.

“The two assets have an estimated total asset value of close to RM4bil which makes KrisAssets a strong candidate to sponsor a REIT to unlock the value of its assets for its shareholders,” an analyst with a local brokerage told StarBizWeek.

The Mid Valley Megamall, which opened in 1999, has a net lettable area of 1.7 million sq ft on 5 floors that are occupied by about 400 stores. It also has a convention centre and two hotels Cititel and Boulevard. Its retail space is 100% occupied and commands average rental rates of RM10.50 to RM10.60 per sq ft.

The Gardens at Mid Valley City, which opened in September 2007, is the second phase of Mid Valley City. The Gardens contains a high-end shopping mall with branded labels. Its 830,000 sq ft of retail space is about 97% occupied with average rental rates of RM9.40.

The analyst said KrisAssets would be able to take advantage of the low prevailing tax structure accorded to REITs.

The REIT would be exempted from corporate tax if it distributes at least 90% of its total annual income to unit holders.

He said retail REITs had proven to be popular among the investing public but good retail assets had become a scarce commodity now.

Financing for such REITs was still available and the onus was on the sponsor companies to plan for more holistic retail projects that could cater to the changing needs of city folks, he added.

Another bank-backed analyst said the strong market response to the recent listing of Pavilion REIT, which has been oversubscribed by about 28 times, as well as the yield compression on select well-managed REITs including CapitaMall Trust, could have triggered KrisAssets' plan to expedite its REIT plan.

“Furthermore, in an environment where bank interest rates are expected to remain flat at best, we expect sustained buying interests on the REITs. This means that the company's parent, IGB Corp, which owns 75% of KrisAssets, would be able to extract generous valuations for its assets by divesting them to the REIT,” he added.

He said the REIT would be able to raise enough funds for IGB to undertake a mixed development project in London. IGB is said to be bidding for the project in west London, believed to be its first development project there.

In a recent report, RHB Research said it was positive on retail REITs although on average, they offered slightly lower yields compared with other sub-segment REITs.

“A strategic combination of asset acquisitions, asset-enhancement initiatives and creative events to drive shopper footfalls is crucial to deliver sustainable distribution per unit (DPU) growth.

“Retail REITs offer the highest earnings per unit (EPU) and DPU growth within our coverage. The office segment continues to experience massive oversupply, while industrial production is generally more sensitive to GDP growth.

“Apart from buying for the REIT's yield, investors should also ride on the rising valuations of scarced quality retail properties,” the report noted.

DTZ Research noted that retail REITs were subject to macro-economic risk and any downturn in the economy would have an impact on their performance.

“Notwithstanding the cautious consumer spending, the outlook for the retail sector remains positive with sales growth forecast to move upwards to 6.5% in 2012 from 6.0% for 2011,” it added.

By The Star

Scanwolf unit undertakes property project in bidor

2012-01-21T09:37:00.000+08:00

KUALA LUMPUR: Scanwolf Corp Bhd's subsidiary, Scanwolf Development Sdn Bhd, signed a joint-venture agreement with SQ Land Sdn Bhd yesterday to undertake the proposed development of 128 plots of mixed development land into five units of shop houses and 123 units of terrace houses in Bidor, Perak.

Scanwolf told Bursa Malaysia yesterday the joint venture allowed the company to venture into the property development business with minimum capital investment.

By Bernama

China’s housing slowdown to cut big hole in GDP growth

2012-01-21T09:36:00.000+08:00

China’S cooling property market could shave more than 2 percentage points off 2012 growth, forcing Beijing to decide just how badly it wants to keep the economy expanding at more than 8% a year.

Even if the world’s second-biggest economy avoids a housing crash, slower property investment is almost certain to constrain growth. That assumption was built into economists’ predictions that the economy will slow in 2012, but data released this week suggests housing may take an even bigger chunk out of growth.

China’s investment in real estate development rose 28% to 6.17 trillion yuan (US$977.67bil) in 2011 a full US$200bil more than the United States put into residential real estate at the peak of its housing bubble in 2005.

Unlike the United States, China does not have an oversupply of housing. In fact, the government has pledged to build 7 million units of public housing in 2012 after an estimated 10 million in 2011.

But in order for property investment to add to GDP growth, it has to keep getting even larger each year, and with real estate prices falling and developers scrounging for credit, China will be hard pressed to outdo 2011’s strong showing.

“If they build the same amount (in 2012) that they did last year, which is still a phenomenal rate of construction, then it would take GDP down to 6.6%,” said Patrick Chovanec, an economist who teaches at Tsinghua University’s School of Economics and Management in Beijing.

That would be a dramatic slowdown from 2011’s 9.2% growth, and it doesn’t even include potential indirect impacts that typically come with a housing slowdown, such as falling demand for building materials or a rise in banks’ bad debts.

Worthy projections

China’s latest economic plan targets GDP growth of 7%, but economists widely consider 8% as the minimum needed to generate sufficient job growth and support social stability top priorities for the Communist Party.

The Chinese phrase “bao ba”, or protect 8, is a commonly used line, illustrating Beijing’s unwritten imperative to keep annual growth above that threshold.

“It’s something that’s almost ingrained within the (Communist) party,” said Alistair Thornton, an economist with IHS Global Insight in Beijing.

Thornton thinks 2012 growth will dip to the 7.5% to 8% range, largely because of the housing slowdown. But he said it could easily drift down to 7% if China chooses not to prop up the property market.

UBS economist Tao Wang predicted property investment growth would halve in 2012, less dire than Chovanec’s prediction for a flat reading. That leaves GDP right around the 8% mark.

“We continue to hold the view that property investment will slow sharply but will not collapse in 2012,” she said.

Data released on Wednesday showed Chinese house prices have fallen for three consecutive months as of December, and property developers are bracing for a brutal 2012. A Reuters poll released on Jan 10 found economists expected property prices to fall 10% to 20% this year.

Chinese officials have spent the past 18 months cracking down on property speculation to try to keep the market from overheating, and it appears to be in no hurry to change course now. A housing bubble and bust would inflict far more economic damage than a policy-induced slowdown.

In Beijing, which enjoyed one of the country’s biggest price gains in 2010 but is now feeling the pinch of the government’s tightening measures, property developers were still hoping that policymakers will loosen their grip.

“It totally depends on whether the government will relax policies or not,” said a young sales agent surnamed Cui, when asked about the likely direction of property prices.

It would take something more severe than weak property sales to alter the policy course.

Beijing seems willing to accept that some developers will go out of business, but rising unemployment or a steep drop in growth would probably prompt Beijing to lift some of the real estate purchase restrictions put in place since 2010.

“While the central government does not generally sympathise with developers, rapidly decelerating real estate investment growth is a major concern,” analysts at Macquarie wrote in a Jan 17 note to clients.

Holding the line

There is little doubt that China has the policy tools available to keep growth above 8%, but it is not clear that policymakers are willing to live with the consequences. Real estate investment accounted for 13% of China’s GDP in 2011, according to government data released on Tuesday, bigger than the 10% estimate that some economists had assumed. That means a slowdown will weigh more heavily on growth, and the remaining 87% of the economy will have to pull even harder to take up the slack.

Net exports subtracted from GDP growth in 2011 and will probably do so again this year, so that leaves consumption and government spending as the two main economic drivers.

China could offer incentives to spur demand for big-ticket items such as cars or appliances, which it did with good success during the 2009 downturn.

But that strategy must be used sparingly. Incentive schemes tend to pull forward demand, essentially borrowing sales from later periods.

“You just can’t force people to spend more money,” Global Insight’s Thornton said.

As for government spending, China went on stimulus binge to combat the global recession in 2009, but local government debt soared to US$1.7 trillion and problem loans are growing. China’s audit office said in December it had identified US$84bil worth of irregularities with local government debt.

“They could pump a lot of money into this economy and keep the investment boom going,” Tsinghua’s Chovanec said. “All of those things have a cost and the cost might be pretty steep.”

By Reuters

Malaysia housing market to pick up steam in first half

2012-01-20T09:21:00.000+08:00

The local housing market is expected to gather steam in the first half of this year, after cautious consumers shunned buying at the end of last year due to global economic uncertainties.

Datuk Seri Michael K.C. Yam, president of the Real Estate and Housing Developers' Association Malaysia (Rehda), said people are more confident on the Malaysian economy now despite uncertainties in developed countries.

Yam said the Economic Transformation Programme, the Government Transformation Programme and projects like the mass rapid transit and River of Life have garnered confidence in the market.

"They will have spin offs, creating jobs and business opportunities," Yam said yesterday, at the Rehda property market update for the first half of the year.

A Rehda survey found that 79 per cent of the 148 developers who responded were optimistic of the first six months of this year compared with 81 per cent in the second half of 2011.

Some 63 per cent said they will launch new projects in the first six months of this year, against 58 per cent in the preceding six months.

Seventy-four per cent of the respondents said they will increase their selling prices by five per cent to 20 per cent this year.

"This is due to the high costs of building materials and labour, which continues to be major challenges for the industry. Land cost is also increasing and we have no choice but to pass it on to customers as our margins are eroding," Yam said.

The survey showed that 38 per cent of respondents are facing challenges with building materials, particularly the pricing of bricks, cement and steel bars, and it is having an impact on their cash flow.

Meanwhile, the first Malaysia Property Exposition (Mapex) for 2012, organised by Rehda, will be held from March 2 to 4 at the Mid Valley Exhibition Centre here.

Rehda immediate past president Datuk Ng Seing Liong said Mapex is expected to generate property sales of up to RM100 million, slightly more than last year. Some 60 developers, including a small portion of foreign players, will showcase over 200 housing developments.

By Business Times

Rehda: Property prices will continue uptrend in H1

2012-01-20T09:19:00.000+08:00

KUALA LUMPUR: A majority of developers expect property prices to continue climbing in the first half of the year in tandem with rising costs.

In a recent survey of members by the Real Estate and Housing Developers' Association Malaysia (Rehda), about 74% of respondents surveyed generally felt that prices would be on an upward trend, largely influenced by an increase in the cost of development.

Rehda president Datuk Seri Michael Yam said about 36% of the respondents said property prices might increase 10% to 20%, 31% expected prices to increase less than 10%, and 7% expected prices to increase more than 20%.

“The main reason cited was the escalation in land, building materials and labour costs. For example, steel bar price had climbed to RM2,589 per tonne in 2011 from RM2,285 in 2010, while cement had gone up to RM16.33 per bag in 2011 from RM15.64 in 2010,” he told a briefing yesterday on the Rehda Property Industry Survey for the second half of last year.

Two other main factors were the larger deposits required in obtaining housing development licences and the higher market demand.

The deposit for a housing development licence is now 3% of the estimated project cost instead of RM200,000 previously. The survey covered 148 companies or 15% of Rehda's 979 members, and they were selected from all the states in Peninsular Malaysia.

Yam said 63% of the respondents indicated that they planned to launch projects in the first half of this year. In comparison, 45% had launches in the second half of 2011.

“The top property types to be launched in the first half of this year are two-storey terrace houses, apartments and condominiums as well as service apartments,” he added.

The survey also reported that better sales were expected in the first half of this year compared with the preceding six months. About 67% of the respondents with planned launches in the period under review anticipated to sell 41% of their properties and above. Yam pointed out that this was despite the drop in confidence largely influenced by external factors. “Some of the external factors are the eurozone sovereign debt crisis, fragile US economy and volatility in commodity prices.

“Nevertheless, the Malaysian market is still buoyed by its relatively strong economy, low non-performing loans for the property sector and the Government Transformation Programme and the Economic Transformation Programme (GTP/ETP),” he said.

On challenges for the industry, Yam said the unsold designated bumiputera lots had been the main reason for unsold units recorded in the last four surveys, which were conducted every six months.

“The way forward in solving this is to have a policy for automatic release of designated bumiputera lots. This will enable such ideal units to be put in the open market instead of them remaining unproductive.”

“Additionally, more than half of the respondents believed that the real property gains tax would have an impact on the overall property market.

“Other than that, 48% of respondents reported that they faced financing issues but mainly in the end-financing for buyers due to buyers' creditworthiness as well as due to banks being more stringent in their lending policies,” he said.

Rehda Federal Territory branch chairman NK Tong said the 45% of respondents that reported launches in second half of 2011 represented a slight drop from the 58% in the first half of 2011.

“The average size per project launch has also declined to 145 units from 160 units for the period under review,” he said.

“Sales were encouraging for the period as more than half of respondents who had launches sold more than 40% of their launched units,” he said, adding that the majority of the units launched were landed properties, but Kuala Lumpur and Penang were more focused on strata-title properties.

Rehda announced that the first Malaysia Property Exposition for 2012 would be held from March 2 to 4 and would feature some foreign developers.

By The Star

New township offers synergy of family, work, business and leisure

2012-01-20T09:17:00.000+08:00

Brand new: The Zest Serviced Apartment @ Kinrara 9 is completed ahead of schedule.

The Trinity Group team shifted into high gear as 2011 drew to a close — and delivered a full schedule ahead for the much-awaited launch of The Zest Serviced Apartment @ Kinrara 9. Dreamed up to be the next prime address in Bandar Kinrara 9 offering an integrated location for family, work, business, leisure, and entertainment — The Zest @ Kinrara 9 became an anticipated reality at the official Key Handover Ceremony recently.

The company is right ahead of target with the completion of an integrated development that consisted of 20 units of shop offices, 24 units of retail outlets and 720 units of serviced apartments in the Bandar Kinrara 9 township development — with infusions of modern and contemporary architectural design.

“The launch of The Zest @ Kinrara 9 marks our foray as a serious contender and comprehensive player offering a gamut of services in the real estate industry,” said Trinity Group managing director Datuk Neoh Soo Keat.

Moving in: Lok Jean Hui (left) is among the 720 homeowners receiving his key from Neoh (right) while Chor looks on.

Trinity Group’s long-standing commitment towards “building communities and enriching lives” is strongly reflected in its developer journey as it grew from strength to strength with each project. Its credo echoes the Malaysian government’s dedication towards ensuring quality and affordable housing to meet the needs of Malaysia’s growing population by matching demand and supply as well as providing efficient public utilities and services as well as a clean and livable environment.

Neoh added that Trinity Group wishes to redefine property development by bringing landmark projects that incorporate the best design, quality, technology and timely delivery. “As a forward thinking and customer-driven developer, we will ensure that all our new products offerings will set new benchmarks in terms of quality and value creation for our customers while remaining true to our aim of pursuing business activities in an ecologically-friendly manner.”

Housing and Local Government Minister Datuk Seri Chor Chee Heung was the guest-of-honour at the key handover ceremony. He said it was imperative for the Government and private sector to work together in order to create a competitive and sustainable housing industry.

“The partnership will benefit the homeowners as well as housing developers. I am pleased to see Trinity Group taking a leader role in raising the industry bar for private developers and employing the six thrusts in the National Housing Policy (NHP) as its guiding principle to achieving conducive and liveable environments and shared community infrastructure and foundation,” he added.

Being a resident or business owner in one of the units at The Zest Point means all-year access to amenities.

Trinity Group does not take community enhancement lightly; its service-focused vision spanning beyond property development is attested by its series of community projects such as a RM7mil access ramp, a RM3mil access road for The Z, and Malaysia’s first air-conditioned bus stop.

The ramp, linking the opposite side of the road and The Zest @ Kinrara 9 with the Bukit Jalil Expressway to lessen traffic congestion and commuting time, was launched by Chor.

Community development, to Trinity Group, is an on-going pursue. “We do not — and will not stop here. In the near future, we will undertake more development and community projects that are aimed to improve and enrich people’s lives”, said Neoh.

By The Star

L&G seeks more landbank

2012-01-19T09:06:00.000+08:00

Low showing off the model of Damansara Foresta, a high-rise condominium project in Bandar Sri Damansara.

KUALA LUMPUR: Land & General Bhd (L&G) is looking to expand its landbank in prime locations, said managing director Low Gay Teck.

“We are looking to acquire more land in prime locations in the Klang Valley, Johor and Selangor. We are also trying to venture north to Penang as the property prices at these places are good,” he said at a briefing on its high-rise condominium project, Damansara Foresta in Bandar Sri Damansara.

However, he did not reveal the size of its current landbank. He noted that sourcing for ideal land was not an easy task and was a challenge for the company.

Low said it was currently busy developing Damansara Foresta and Elements@Ampang (a luxury condominium project in Ampang). Both projects have a gross development value (GDV) of RM700mil each.

“We are also planning for a mixed residential development on 220 acres of land in Seremban.

“Based on our initial estimate, the project has a GDV of about RM550mil,” he said, adding that L&G had kick-started all relevant pre-development for the Seremban project, but actual work might only commence at the end of this year.

Low said the question of a property bubble was “relative”.

“It happened because of all the hype from certain projects when the prices have gone too high. We're not selling very speculative property projects,” he said.

Commenting on its project, Damansara Foresta, Low said it was a freehold residential property located next to the Bukit Lanjan forest reserve.

“The overall project site consists of 42 acres, whereby only 21 acres will be developed for residential developments, leaving the remaining as natural forest,” he said.

Low said L&G would be taking registration for the third block of its Damansara Foresta project in February.

“We have sold part of the phase 1.

“We are now opening registration for Block C. Block A is 99% sold while Block B is 95% sold.”

Phase 1 consists of four blocks ranging from 227 to 237 units for each block.

Each unit ranges from 1,400 sq ft to 1,600 sq ft to a luxurious penthouse of above 3,000 sq ft.

The selling price for phase 1 ranges from RM500 to RM600 per sq ft with a maintenance fee of 25 sen per sq ft.

Low said the property was designed with lots of natural activities such as jungle trekking, resting pavilions, hammock garden, camping sites and others to make use of the forest area incorporated in the development.

“We have put up all the necessary precautions, including slope protection measures at Damansara Foresta,” he said when asked as the property was located on a highland, some 180 metres above sea level.

Damansara Foresta is expected to be completed by end-2015.

By The Star

Naza TTDI bullish on KL property

2012-01-19T09:02:00.000+08:00

The company will launch Platinum Park residences, residential component in Taman Tun Dr Ismail and one residential component in KL Metropolis.

KUALA LUMPUR: Naza TTDI Sdn Bhd, which is optimistic about the property market in Kuala Lumpur, will continue to launch new projects and residential components in its existing projects.

The property development arm of the Naza Group is also launching three high-end residential projects.

Deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the company is still optimistic about the property market in Kuala Lumpur.

"So far, I think we are still going aggressive into 2012, we still continue launching our remaining phases in our current township projects and also our ongoing projects," he told a news conference after the awards ceremony for "Bertam Master Plan & Creative Ideas Competition" last night.

SM Faliq said the company will launch Platinum Park residences, residential component in Taman Tun Dr Ismail and one residential component in KL Metropolis.

The combined gross development value for these projects is about RM1.5 billion.

Earlier, Naza TTDI and Persatuan Arkitek Malaysia (PAM) awarded six participants of the jointly-organised competition.

The competition required participants to submit creative ideas and designs for the masterplan of Naza TTDI's upcoming 333.6ha township in Bertam, Penang.

SM Faliq said the Bertam project is the company's first township development outside the Klang Valley.

"The success of our Bertam township development will serve as a platform for us to foray into development in other parts of the country," he said.

SM Faliq said the competition, which is its third such collaboration with PAM, aims to provide a platform for the architectural fraternity to showcase their expertise.

He added that Naza TTDI is committed to supporting and giving due recognition to local architect firms for their creative and innovative designs.

Naza TTDI had previously collaborated with PAM for respective masterplan competitions for the former's land in Puchong and Shah Alam in 2010.

Among the judging criteria for the competition include innovativeness, environmental-friendly features, the ability to achieve the Green Building Index rating, economical and resource efficiency, world-class qualities and consideration of traffic circulation while conforming to local planning standards and guidelines.

Also present at the awards ceremony were PAM president Ar Saifuddin Ahmad and chief executive officer Ar Paul Lai Chu.

By Business Times

Naza TTDI expanding to Penang

2012-01-19T08:57:00.000+08:00

KUALA LUMPUR: Naza TTDI Sdn Bhd will commence works on its first out-of-Klang Valley project in Bertam, Penang next year.

While the mixed development is still in its design stage, it will be Naza TTDI's long-term project geared towards the middle to high-end market.

Faliq: ‘This year is our trophy year.’

Deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the gross development value had not been determined but gave a rough estimate of houses priced from RM600,000.

The 834-acre Bertam township will be mainly residential with commercial and education developments.

“Penang island is not getting any cheaper so people who want to stay there would have to look for alternatives,” Faliq said after the Bertam Master Plan & Creative Ideas Competition awards ceremony.

He said that Naza TTDI had plans to go south to the Iskandar Malaysia region as well as beyond the country.

While the property arm of Naza has been developing projects single-handedly, it is open collaborations and partnerships.

“There are local and foreign parties that have approached us but nothing is solid yet, we are still in talks,” Faliq said.

“This year is our trophy year. We are still aggressive and optimistic about the property market,” he added, “We are looking to launch three high-end projects this year.”

Faliq was referring to the Platinum Park, KL Metropolis and Taman Tun Dr Ismail residential projects in Kuala Lumpur. The combined GDV for these projects is RM1.5bil.

Naza TTDI has a total of 1,200 acres of landbank now, 800 acres of which are under planning.

The Bertam Master Plan competition was jointly-organised by Persatuan Arkitek Malaysia and Naza TTDI, where participants submitted ideas and designs for the master plan of the township.

Winners of the competition were architects Lim Siew Bok, David Teh Teik Lim and Almaz Salma Abdul Rahim who received RM100,000, RM75,000 and RM50,000 respectively.

By The Star

IOI targets project at Singaporeans

2012-01-19T08:56:00.000+08:00

KULAIJAYA: IOI Corp Bhd does not see any effect from the additional 10% stamp duty ruling imposed by the Singapore government on foreigners buying private property on its new project there.

IOI Properties Bhd senior general manager Simon Heng said the company was targeting Singaporean buyers instead of foreigners for its Clementi condominium project.

He said its strategic location within the mature housing estate of Clementi and close proximity with the National University Hospital and Clementi MRT station were the project's strong selling points.

“There are many Singaporeans living in the HDB flats who wanted to upgrade to living in private condominiums,” Heng told StarBiz after signing an agreement service with Telekom Malaysia Bhd to provide UniFi high-speed broadband network connectivity to house buyers of Parcels 3A and 4A of Bandar Putra here and Parcel 3A of Taman Kempas Utama in Johor Baru.

Singapore had in December introduced a new ruling where foreigners have to pay an additional 10% stamp duty when buying a private home in the republic, effectively raising the purchase price by 10%.

The move is seen to cool the private residential prices on the island state which are on the upward trend and there are complaints from Singaporeans that rich foreigners have push up demand and prices of private residential properties.

“We have yet to come out with the development details and land utilisation of 0.97ha site of the Clementi project,” said Heng adding transaction for high-end condominium in Clementi area could fetch S$1,000 per sq ft.

By The Star

Rising confidence in property mart: Napic

2012-01-18T12:24:00.002+08:00

KUALA LUMPUR: Higher housing starts and building plan approvals last year signify confidence of developers and investors in the development activity, said National Property Information Centre (Napic) director Dr Zailan Mohd Isa.

Some 400,000 transactions valued more than RM100 million were undertaken during the first three quarters of last year.

Zailan said the second quarter of 2011 was the most active period during the period with more than 115,000 transactions recorded.

Housing starts, a key economic indicator, refer to the number of residential building construction projects begun during a particular period.

Speaking at the 5th Malaysian Property Summit 2012, Zailan said residential property sub-sector expanded significantly by 23.2 per cent after recording a 8.8 per cent growth for similar period in 2010.

At a media briefing, summit chairman and real estate agency CH Williams Talhar and Wong (WTW) managing director Foo Gee Jen does not expect prices to soften within KL although the external uncertainties may have led property buyers to be more cautious.

Choy Yue Kwong, who is president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPs) said past crises have shown that although property prices may drop in cities like Kuala Lumpur and Petaling Jaya for a short period, prices also pick up as fast.

Zailan expects the vacant space in the retail and office sectors to be absorbed as more space taken up from the market as private investment spurred by the Economic Transformation Programme takes place.

He described the outlook for the 2012 property market as bright with strong demand as developers and investors capitalise on the government's incentives.

Demand for development land will also increase from the spillover effect of projects such as highways such as Ampang-Cheras-Pandan Elevated Highway, Guthrie-Daman-sara Expressway, Damansara-Petaling Jaya Highway, Pantai Barat-Banting-Taiping Highway, Sungai Dua-Juru Highway and Paroi-Senawang Highway.

By Business Times

TM eyes 20 HSBB deals with developers

2012-01-18T12:22:00.001+08:00

KUALA LUMPUR: Telekom Malaysia Bhd (TM) aims to sign service agreements with 20 property developers this year to deploy and provide its high-speed broadband service (HSBB) at their respective projects.

Its executive vice-president (SME), Azizi A. Hadi, said last year, TM inked agreements with 11 property developers, mainly for projects in the Klang Valley.

"This year, we plan to expand our services in Penang, Sabah, Sarawak, Johor and obviously the Klang Valley region," he said after signing the agreement with BHL Group of Companies here yesterday.

This move, Azizi said, will increase HSBB coverage to some 95 areas nationwide from the current 78.

"To date, the premium HSBB is offered to 1.19 million premises and we expect to increase the figures to 1.3 million by year-end ," he said.

Azizi said TM will launch Unifi in Ipoh and continue to expand it in key areas nationwide.

The agreement with BHL was for the deployment and provision of HSBB network infrastructure and services to the latter's three projects.

The projects are USJ One Park in Subang Jaya, KL Palace Court in Jalan Klang Lama and a development in Cheras.

By Bernama

UDA seeks investors for proposed complex

2012-01-18T12:20:00.001+08:00

JOHOR BARU: UDA Holdings Bhd is looking for investors to undertake a joint-venture project to develop the Angsana II commercial complex.

Chairman Datuk Nur Jazlan Mohamed said the complex, adjacent to its existing Plaza Angsana shopping complex in Jalan Tampoi, would cost between RM200mil and RM250mil.

“We are open to any proposal from interested parties regardless of whether they are local or foreign investors,'' he said yesterday.

Nur Jazlan: ‘We need to start changing our mindset.’

The proposed Angsana II commercial project would be the first shopping complex in Johor Baru to incorporate a street-mall concept, Nur Jazlan told reporters after attending the corporate social responsibility programme at the home for the handicapped in Taman Sinar Harapan Tampoi, in conjunction with the company's 40th anniversary.

He said the company would not limit itself to working only with a domestic partner or investor in the project and was more than willing to work with a foreign investor.

Nur Jazlan said that certain parties including politicians should not politicise the decision made by the company to cooperate with foreign partners in its property development projects.

He said as a government-linked company (GLC), UDA's duty was to ensure that it was able to bring benefits to all Malaysians and not to a certain race only.

“We need to start changing our mindset. The country will not be able to move forward if we continue to use race-centric issues in business activities,'' added Nur Jazlan.

The company hoped to start Angsana II project this year if it was able to find a right partner for the project and “did not want to miss the boat again,” he said.

Nur Jazlan was referring to the directive made by the Finance Ministry (MoF) to UDA to review its decision on a proposed joint-venture project with China's GLC Everbright International Construction Engineering Corp.

He said a steering committee had already started reviewing the proposal made by the MoF to develop the former Pudu Jail site, better known as the Bukit Bintang City Centre.

“The committee will see whether the MoF's proposal is viable compared with the model proposed by Everbright and it (the study) will probably take months,'' said Nur Jazlan.

On an unrelated matter, he said UDA would spent RM15mil this year to renovate its 15-year-old Plaza Angsana shopping complex, including upgrading its faade and food court.

By The Star

IOI advances on Singapore land buy

2012-01-18T12:18:00.000+08:00

IOI Corporation Bhd rose one sen or 0.19 per cent to RM5.34 as at 11.20am today as market players are bullish on its property business.

IOI announced yesterday its 99.8 per cent-owned indirect subsidiary Multi Wealth (Singapore) Ltd has won a bid for a parcel of land in the island republic for S$408 million (RM995.5 million).

Measuring about 24,417.6 sq metres (2.4ha), the land, in Jalan Lempeng, Clementi Avenue 6, is intended for condominium development.

HwangDBS Vickers Research said it was neutral on the deal as the aggregate impact over five years would be less than 10 per cent of IOI's forecast pre-tax profits (approximately RM2.8 to RM3.4 billion per annum).

"We believe the estimated S$709 million (approximately RM1,730 million) total investment cost is better spent on its higher-margin plantation operations," it said in a research note today.
The research house maintains a "hold" rating on IOI.

By Bernama

IOI Corp wins bid for S’pore condo land

2012-01-18T12:16:00.005+08:00

KUALA LUMPUR: IOI Corp Bhd has won a bid for a parcel of land in Singapore for S$408mil (RM995.5mil) that would enable the company to be involved in mass property market in the island-state.

IOI Corp said its 99.8% indirect subsidiary Multi Wealth (S) Ltd had been notified by the Housing and Development Board of Singapore of its acceptance of Multi Wealth’s bid for the land measuring about 24,417.6 sq m at Jalan Lempeng.

“The land, which is a rare condominium site, is located in the mature housing estate of Clementi and will have a good potential to tap into a large catchment of upgraders from the existing residents living in the area,” it told Bursa Malaysia.

This win confirmed StarBiz report yesterday that IOI Corp would be a potential winner as it was the highest bidder.

CIMB Research said the win was a slight surprise as it did not expect the group to venture into another Singapore property venture so soon after its recent purchase of the South Beach project.

“The Clementi condo project is strategically located and should attract pent-up demand from residents around the area.”

But CIMB Research is cautious on the Singapore property market, given the recent hike in stamp duties.

By The Star

China's property market slows down

2012-01-18T12:16:00.001+08:00

SHANGHAI: China's property market slowed last year, official figures showed yesterday, as the government sought to bring down runaway housing prices amid fears of a speculative bubble.

The country introduced a range of measures aimed at curbing the real estate market last year, such as bans on buying second homes in some cities, hiking minimum down-payments and introducing property taxes.

Overall property investment rose an annual 27.9 per cent to 6.17 trillion yuan (RM3 trillion) in 2011, slowing from growth of 33.2 per cent in 2010, the National Bureau of Statistics said.

Meanwhile, housing sales - excluding government subsidised homes - rose 12.1 per cent to 5.91 trillion yuan last year, marking a slowdown from 18.9 per cent growth in 2010.

"Our major progress is that speculative-based investment in the property market has been curbed," statistics bureau chief Ma Jiantang told a news conference in Beijing.

Analysts have warned the correction in the property market is threatening to drag on economic growth this year, despite government resolve to keep control measures firmly in place.

Alistair Thornton of IHS Global Insight in Beijing said the rapid slowdown in property investment in the final month of last year indicated the overall economy was undergoing an "aggressive" slowdown.

"In this light, the property market correction is providing the greatest downside momentum," he said.

At the same time, China has pledged to invest more than $700 billion in low-cost housing to help those priced out of the market, with plans to build or renovate 36 million homes over the next five years.

Property developers are hoping Beijing will ease control measures this year, though analysts are divided on the timing of such a move.

In Shanghai, among China's most vibrant property markets, city mayor Han Zheng has dashed hopes of an immediate relaxation.

"This year, the strength of the property market control measures will not be reduced and the policy will not change," he told a news conference on Monday.

Home prices in most major Chinese cities dropped in November last year from the previous month with 49 of the 70 Chinese cities tracked by the government reporting falls.

By AFP

Australian REITs seen outperforming

2012-01-18T12:15:00.003+08:00

SYDNEY: Australian property trusts are likely to deliver a total return of 12 to 15 per cent this year, outperforming local equities and other Asia-Pacific property markets, analysts said.

Australian REITs have proved resilient last year, slipping seven per cent against a decline of 14.5 per cent in the broader S&P/ASX 200 index.

In comparison, Singapore's FT ST Real Estate Investment Trusts Index dropped 16 per cent, while Hong Kong's property sub-index has declined 24 per cent.

Simon Garing, analyst at Bank of America Merrill Lynch, said Singapore property stocks faced a slowdown after the government rolled out measures to cool the residential market.

"We expect Asian REITs will continue to underperform for the first half of the calender year," he said.

"Australian REITs have been sort of a safe haven," he added.

Morgan Stanley is also expecting Australian REITs to perform better than the broad market as investors look for defensive plays and focus more on income rather than capital gains.

By Reuters

SP Setia eyes move into Vietnam city centres

2012-01-17T12:05:00.000+08:00

SP Setia Bhd, Malaysia’s second-biggest publicly traded developer, hopes to take advantage of lower prices in Vietnam’s property market by starting a development in downtown Ho Chi Minh City or Hanoi.

Setia’s first two projects in Vietnam are housing developments in Binh Duong province, adjacent to Ho Chi Minh City, the country’s business center. The developer is now looking for a “high-rise building with some branding” to boost its corporate image in Vietnam.

Vietnam’s property prices are falling amid a glut of high-end residential apartment developments, the U.K.-listed Vietnam Property Fund Ltd said last month. Asking prices have dropped over the past “six, seven weeks,” said Alex Loh, Setia’s chief resident representative in Vietnam.

“We are looking for opportunistic deals,” Loh said in an interview yesterday in his Ho Chi Minh City office, declining to give details on any potential projects or prices. “We have been trying for the last few weeks and months. We are looking at coming back closer to the city now.”

Vietnam marked SP Setia’s first move outside its home base and the company has now also expanded into Australia. Chief Executive Officer Liew Kee Sin said in 2008 that the Kuala Lumpur-based company planned to spend “a lot of effort and time” in developing its projects in Vietnam.

Sales in the country have been slow, hurt by commercial bank lending rates of “about 18 or 19 percent,” Loh said, as the Vietnamese central bank pushed up its policy rates to slow Asia’s fastest inflation.

“They’re not very happy with it,” Loh said about his company’s view on Vietnam five years after committing to its first project in the country. “The pace here is just not there. But head office understands it, so they’re still going along with a slower pace-type of sales over here.”

SP Setia expects to identify a downtown project in Vietnam by the second quarter, and be at the “negotiations stage” by that time, he said.

By Bloomberg

Work on KB Sentral project to take off in June

2012-01-17T12:04:00.000+08:00

KOTA BARU: Construction and engineering firm Sara-Timur Sdn Bhd plans to invest up to RM600 million to develop an integrated commercial property project called Kota Baru Sentral@Tunjong in Kelantan.

Chairman emeritus professor Datuk Dr M. Zawawi Ismail said the project, which will feature shopping malls, luxury apartments and condominiums, a convention centre and office blocks, will be developed over three phases on a 16.5ha land in Tunjong.

"We expect to begin construction by June or July as land acquisition procedures and other preliminary engineering works are already completed," he told reporters here.

The project, Zawawi said, will be jointly developed with the Kelantan Menteri Besar Incorporated and Tunjong Development Corporation.

He said the first phase of the project involving a shopping centre called "village mall" is expected to be ready for occupation in two anda half years.

"We expect the entire project to be fully ready in five to seven years from now," Zawawi said.

He said Kelantan traditional architecture and contemporary Islamic designs will be infused into buildings in the project.

By Business Times

Iskandar set to reach tipping point

2012-01-17T12:02:00.000+08:00

PETALING JAYA: Iskandar Malaysia is set to reach its tipping point in the next 24 months after the completion of key catalyst developments and infrastructure improvements, according to HwangDBS Vickers Research.

The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.

It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.

“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.

Since 2006, Iskandar has received RM77.8bil worth of committed investments.

The region had also recently seen property launches setting new price benchmarks, the research house said.

“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”

It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).

For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.

Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).

HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.

By The Star

UDA to spend RM15m on Plaza Angsana

2012-01-17T12:00:00.000+08:00

UDA Holdings Bhd will spend RM15 million to give Plaza Angsana, a popular shopping complex here, a facelift.

Chairman Datuk Nur Jazlan Mohamed said the project would be undertaken in two stages with the first involving external renovation works costing RM8 million.

Another RM7 million would be spent in the second phase, focusing on replacing the lights and floors as well upgrading the food court, he said.

"Tender for the first phase will open in two or three weeks and we expect the uprading work at Plaza Angsana to take a year to complete," he told reporters when attending the company's community programme at Taman Sinar Harapan here today.

Nur Jazlan said other shopping malls of the same age as Plaza Angsana had undergone upgrading works and UDA Holdings had to do the same so that Plaza Angsana could remain competitive.

The company was also looking for investors for the Angsana 2 project which would be developed at the parking lot next to Plaza Angsana, he said.

The project was expected to cost between RM200 million and RM250 million, he said.

By Bernama

TM eyes HSBB service pacts with 20 property developers

2012-01-17T11:59:00.000+08:00

From Left to Right: JPK & Associates Sdn Bhd Director Lai Kok Phooi, BHL Group of Companies Executive Chairman Datuk Lim Boo Kian, TM Executive Vice President Azizi A Hadi, TM MSC State General Manager R.Manivannan.

KUALA LUMPUR: Telekom Malaysia Bhd (TM) aims to sign service agreements with 20 property developers this year to deploy and provide its high-speed broadband service (HSBB) at their respective projects.

Its executive vice president (SME), Azizi A. Hadi, said last year, TM inked agreements with 11 property developers, mainly for projects in the Klang Valley.

"This year, we plan to expand our services in Penang, Sabah, Sarawak, Johor and obviously the Klang Valley region," he told reporters after signing the agreement with BHL Group of Companies here today.

This move, Azizi said, would increase HSBB coverage to some 95 areas nationwide from the current 78. "To-date, the premium HSBB is offered to 1.19 million premises and we expect to increase to 1.3 million premises by year-end.

"Currently, our take-up rate is around 20 per cent.

"As our service offering expands, I am sure the rate also will increase in tandem with the growing Unifi subscribers," he said.

Azizi said TM would launch its high-speed broadband services, Unifi, in Ipoh and later continue to expand in key areas nationwide.

The agreement with BHL was for the deployment and provision of HSBB network infrastructure and services to the latter's three projects.

The projects are USJ One Park in Subang Jaya, KL Palace Court in Jalan Klang Lama and another in Cheras, which account for a total gross development value of RM680 million.

By Bernama

Gurney Paragon set to welcome RM35m F&B investments

2012-01-17T11:57:00.000+08:00

GEORGE TOWN: Penang is set to welcome investments totalling RM35 million this year from food and beverage operators into phase one of the Gurney Paragon development on Gurney Drive.

The project's developer, Hunza Properties Bhd (HPB), has already seen the entry of nine tenants into Phase 1B of its multi-billion ringgit waterfront development with capital investments in excess of RM10 million.

"We are working hard to continue bringing in established names which have yet to set up a presence in Penang to open their businesses in Gurney Paragon," HPB executive chairman Datuk Khor Teng Tong told Business Times yesterday.

Phase 1B of the project comprises some 100,000 sq ft of lettable space, and its developers are touting the entire Gurney Paragon project as the only one in the country for now which integrates a restored heritage building amidst modern residential, retail and commercial spaces.

The company last night officially opened its "St Jo's@Gurney Paragon" building, which is the restored heritage building built in 1918.

The building is flanked by two towers which house 220 high-end dwellings, along with eateries on its first three levels.

St Jo's, which was formerly known as St Joseph's Novitiate, was initially started by the De La Salle Brothers to train young Catholic men to enter the religious order.

The colonial building, which was restored by HPB for RM10 million, was also once the site for Uplands School now known as the International School of Penang.

The restoration works include retaining the building's teakwood floors, roof trusses, window frames, stairways and clay tiles.

Khor said the current tenants surrounding St Jo's are Goku Roku Ramen, Pacific Coffee Co, T.G.I.Friday's, Brussels Beer Cafe, The Coffee Bean and Tea Leaf, and Meet Fresh.

The tenants who will open soon for business, he added, are Italiannies (serving Italian cuisine), Wong Kok Char Chan Teng (Hong Kong's foods and treats eatery), Share Tea (Taiwanese bubble tea beverage) and Petite Millie (casual French cuisine).

Khor said HPB is expecting at least 30 per cent of its new tenants to be first-time investors in Penang where a lifestyle mall - the Gurney Paragon Mall - is due to be completed by the end of this year.

By Business Times (by Marina Emmanuel)

Volatile year for real estate investment trusts

2012-01-16T22:30:00.000+08:00

The recent listing of the Pavilion REIT has improved the liquidity of the domestic market

PETALING JAYA: Headwinds from the gloomy global economic and financial fronts, particularly in the United States and the eurozone, will pose challenges to the performance of the local real estate investment trusts (M-REITs) this year.

According to Malaysian REIT Managers Association chairman Stewart Labrooy, the M-REIT sector will face slower growth and competition for tenants as an oversupply situation emerges in the office market leading to lower rental yields.

“It is going to be a volatile year ahead with the eurozone uncertainty coupled with low growth in the European and US markets. These markets are very important to growth in Asia and the impact would be felt in all export-led countries. Capital market activity will remain muted worldwide in 2012,” Labrooy told StarBiz.

In Kuala Lumpur, property prices are expected to remain flat for 2012 with some weaknesses in the high-end residential and office markets.

In the office sector, the seven million sq ft of new office space scheduled for completion this year would result in softening in rental and occupancy.

Despite the gloomy outlook, Labrooy said the Malaysian capital markets were expected to remain healthy this year with a significant number of deals notably the listing of Felda's assets in the first half of 2012.

“We are fully aware of the issues involved as some of the M-REITs have been through the 2008 global financial crisis and are taking a pro-active stand to retain their tenants through this period and manage their gearing leverage conservatively.

“Most M-REITs have strong tenant covenants and long leases to counter cyclical financial events. They also practise very conservative valuations so we don't see any downward pressure on them in 2012 and beyond.

In addition, the average gearing of most M-REITs are in the range of 20% to 40%, precluding any event of a default on their loan covenants,” he said.

Labrooy said a silver lining from the uncertainty and volatility of the global markets was that investors and fund managers had started shifting to dividend stocks with strong asset backing and renewed their interest in M-REITs as defensive stocks in uncertain times.

“I believe that we will continue to see a strong subscription in the M-REIT sector this year bearing in mind that the sector performed fairly well to outperform the KLCI in 2011,” he added.

He said the local market still faced liquidity problem as the size of M-REITs was still small by international standards with only five having market capitalisation of over RM1bil. This has contributed to the weak participation among retail investors.

Although the combined market capitalisation of M-REITs has climbed to over RM15bil, its market capitalisation is still way behind that of Singapore which has US$27bil in market capitalisation.

Labrooy, who is also the chief executive officer of Axis REIT Managers Bhd, said the recent listing of Sunway, CapitaMalls Malaysia Trust and Pavilion REITs had improved the liquidity of the domestic market.

Labrooy also said there was an absence of listing of foreign assets as REITs on the local bourse, adding that those who wanted to go for listing had opted to do so in Singapore due to its much higher liquidity and better tax structure. The local regulatory and tax framework must be improved to be on par with Singapore, and a comparable tax code would assist in getting greater retail participation.

On whether there was a scope for other types of REITs to come into the market, Labrooy said: “Malaysia probably has one of the most diversified REIT offerings in Asia. We are currently offering hospitals, plantations, office, retail, education, hospitality, industrial and diversified REITs.

“In addition three are syariah-compliant to cater to the Islamic investors.

“The sectors that will see growth are in industrial, medium cost housing, healthcare, education and tourism. These growth areas are in the Iskandar Malaysia in Johor, Greater Kuala Lumpur and Penang.”

Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin concurred that the prospects for the REIT market has not been fully tapped in terms of awareness among potential investors.

He said M-REITs were viewed as a safer investment compared with other REITs in the region. This was due to the domestic-centric focus of their property investments, lower refinancing risks and relatively lower foreign shareholding.

“Malaysia is in a strong position for greater growth and has the potential to lead the REITs market in Asia given its good track record and stable market conditions in Malaysia.

“Generally, potential investors are not well informed about REITs. We believe the level of awareness can be increased nationwide as knowledge plays an important role,” he said.

Lodin pointed out.

On the types of M-REITs, he said: “It would be good if the market could diversify to different types of REITs. Malaysia has a lot of property related assets with the potential of being “REITed”. The only factor at play right now is time. Once the conditions are favourable, industry specialists should develop these assets into REITs.”

By The Star

Genting beats the odds

2012-01-16T22:25:00.000+08:00

An artist’s impression of the Resorts World Miami, Florida. The Greater Miami Chamber of Commerce’s move to endorse casino resorts in South Florida shows the importance of having more income generation streams to boost the sluggish economy in the US.

An analyst says it is well-positioned to build its RM11bil casino and hotel complex in Florida

The odds have turned to Genting Malaysia Bhd's favour to build a US$3.8bil (RM11.4bil) casino and hotel complex in Florida after a state Senate committee voted to allow the proposal to be debated by the state's lawmakers, analysts said.

The bill would deliberate on the issue of liberalising non-native American casinos. While the outcome would only be known in a few months, analysts say the move indicated that people supported the idea of legalised gambling to generate revenue for the economy.

The decision was positive for Genting as Florida may have as many as three Las Vegas-style casinos, with dealers and table games in addition to slot machines.

Currently in Florida, state laws only allowed casino gambling to resorts operated by native American tribes and slot machines at horse and dog race tracks.

“Genting would be well-positioned to secure the casino licence as it was the first to detail out its plans last year before any development has taken place,” said Alliance gaming analyst Cheah King Yoong.

“It's still early days and we still don't know the outcome. However, it's definitely good news for Genting. It has quite an ambitious plan in Miami,” said a gaming analyst from Kenanga Research.

Competition is hot too, as analysts say MGM Resorts International, Las Vegas Sands and Wynn Resorts Ltd are also interested in setting up casinos there.

Genting has submitted a master plan which showcased hotels, convention and entertainment centres, restaurants, retail and commercial facilities and residential towers on a waterfront site.

It is widely known that the measure is currently opposed by Walt Disney Co, the world's biggest theme-park company, whose flagship Walt Disney World is near Orlando, just over 300km away.

Another gaming analyst added that Genting may have won the battle, but it could be losing the war.

“The bill has not been finalised. What if they allowed a lot more casinos to set up shop? So although Genting gets the licence, it might still start off at a disadvantage,” said the gaming analyst.

“Furthermore, with Phase 2 of Genting New York venture coming up and estimated at a cost of more than US$4bil (RM12bil), should Genting be awarded the casino in Miami, how is it going to fund it?” asked the analyst.

Last week, it was announced that Genting had entered into a non-binding letter of intent with the New York State Urban Development Corp to consider developing an integrated complex next to its existing facility, Resorts World New York (RWNY) in Queens.

The new extension includes a convention and exhibition centre, up to 3,000 hotel rooms and an expansion of RWNY's casino. A binding MoU is expected to be inked by Nov 30.

“The timing of the developments will be important. Funding for both the developments in New York and Miami concurrently would mean spending close to US$8bil (RM24bil). I am sure Genting will work its way around that.

“However, investors are used with Genting being in net cash position. If debt levels were to rise to above 50%, then that would be something to ponder on,” said the gaming analyst.

Meanwhile, Cheah said the Greater Miami Chamber of Commerce's move to endorse casino resorts in South Florida was a huge plus point in helping to broaden the state's gambling laws.

“The endorsement by the largest business group in South Florida shows that the major business leaders understand the importance of having more income generation streams to boost the sluggish economy in the US. As such, odds are turning favourable to Genting 's Miami venture,” said Cheah.

Cheah believes that the market has not priced in the potential of Genting benefiting from the liberalisation of the gaming sector in Miami and the emergence of Genting as a global gaming giant.

The gaming analyst said that it was still early to talk about earnings potential should Genting be awarded the casino licence as this would be the first time a full-fledged casino was being constructed.

However, HwangDBS analyst Yee Mei Hui said that Resorts World New York was expected to contribute 16% to Genting Malaysia's 2012 earnings. She is estimating Genting to make RM1.75bil in net profit in 2012.

For the nine months to Sept 30, 2011, its net profit was up 17.95% to RM1.08bil while revenue was up 63.26% to RM6.16bil.

Genting gets some 90% of its revenues from its mainstay travel and leisure business in the Genting Highland Resorts.

By The Star

Sentoria to increase accommodation capacity in Bukit Gambang Resort

2012-01-16T22:21:00.000+08:00

KUALA LUMPUR: Sentoria Group Bhd is set to increase its accommodation capacity in Bukit Gambang Resort City (BGRC) by the third quarter of 2012.

Sitting on a 547-acre land, BGRC is one of the largest integrated resort cities in Malaysia featuring multiple attractions in a single location, including the popular Bukit Gambang Water Park and Active Academy, as well as meetings, incentives, conventions and exhibitions facilities and accommodation.

In a statement today, Sentoria said at present, BGRC had 998 accommodation rooms in its Caribbean Bay Resort.

"The group is currently developing Arabian Bay Resort which would increase its room capacity to 1,864 rooms in total.

"Arabian Bay Resort has an estimated gross development value (GDV) of RM92 million and is targeted for completion by September 2012," Head of Public and Investor Relations Nasiruddin Nasrun said.

He said barely two years after opening its doors to the public in mid-2009, Bukit Gambang Water Park saw an increasing number of visitors, currently recording more than one million visitors over the past two years.

Sentoria is slated for listing on Bursa Malaysia in the first quarter of 2012.

By Bernama

Johor Corp to upgrade hotels for RM40m

2012-01-16T22:19:00.001+08:00

JOHOR state investment company Johor Corp will spend up to RM40 million to upgrade all its hotel assets to cater to the expected increase in tourist arrivals, which is driven by the opening of several attractions in Iskandar Malaysia.

By end of this year, the RM350 million indoor theme park in Puteri Harbour, which is developed by government investment arm Khazanah Nasional Bhd, will open its doors.

In Nusajaya, Legoland Malaysia, which is being built at a cost of around RM750 million, is expected to open in September.

For the first nine months of last year, tourist arrivals through the state's entry points rose five per cent to 12.5 million.

JCorp Hotels & Resorts Sdn Bhd deputy chief executive officer, Muhamad Mazlan Ali, said the hotels' upgrading work would start with the Puteri Pacific Johor Baru.

"The hotel, which opened in 1990, needs some refurbishments. To stay afloat, we have to upgrade our properties," Muhamad Mazlan told Business Times.

He said once the refurbishment exercise was completed in about a year or two, the company would review its pricing strategy upwards.

Currently, the average room rate in the Johor market is about RM180 a night.

JCorp Hotels, the hospitality arm of Johor Corp, owns and manages five properties in Johor.

Besides the Puteri Pacific Johor Baru and the Persada Johor International Convention Centre, it also owns Sibu Island Resort, Selesa Johor Baru and Selesa Pasir Gudang.

The company also has a property in Negri Sembilan called Selesa Port Dickson.

The six properties are worth as much as RM600 million.

Muhamad Mazlan acknowledged that Johor needed more hotels.

There are more than 4,000 rooms available in the two to five-star categories and this is expected to double by 2014.

However, they might not be sufficient to meet demand, he said.

"We expect room demand to increase with the expected influx of tourists and attractions.

"We are optimistic that the attractions in Johor will bring more people to the state.

"With more universities and colleges opening at EduCity, we can expect a large number of international students, too," he said.

EduCity is a fully integrated knowledge-based hub comprising world-class universities, industry-centric research and development clusters, international schools and colleges, as well as conference and exhibition amenities.

By Business Times

Pink flamingos flock to i-City

2012-01-16T22:15:00.001+08:00

Taking off: Flamingos in flight in i-City.

BEAUTIFUL red and pink flying flamingos have “flocked” to i-City in Shah Alam, lighting up the nightscape with their beautiful glow.

Using state-of-the-art technology, the synchronisation of lights and movement simulates a flock of flamingos flying around i-City as part of its latest LED attractions this Chinese New Year to welcome visitors with good luck.

Flamingos signify wisdom and their presence at i-City is hoped to bring wisdom and prosperity in the new lunar year.

By The Star

Axis-REIT posts lower Q4 pre-tax profit

2012-01-16T22:13:00.003+08:00

The pre-tax profit of Axis Real Estate Investment Trust (Axis-REIT) decreased to RM31.98 million in the fourth quarter ended Dec 31, 2011 from RM40.99 million in the same quarter last year.

In a filing to Bursa Malaysia today, Axis-REIT said revenue rose to RM29.81 million from RM26.6 million previously.

In view of the current satisfactory performance, the management is optimistic that the company will be able to maintain its current performance for the coming quarter and the rest of the financial year ended Dec 31, 2012.

By Bernama

Oversupply of Klang Valley office space

2012-01-14T10:24:00.000+08:00

KLANG Valley's office space may be heading towards a state of oversupply. The total existing supply of office space is 94.4 million sq ft; 73.07 million sq ft of this were occupied in 3Q 2011. This leaves 21.33 million sq ft or 22.6% of the total space, within the various office buildings, vacant.

While a 5% to 10% vacancy is normal for most buildings, the aggregate 22.6% across the office market is high. Apart from this, there are 18.59 million sq ft of incoming space (under various stages of construction) and a further 18.74 million sq ft of planned supply.

This is space that has been approved for development, but for which construction has not commenced as yet, as tallied by the National Property Information Centre or NAPIC.

There is also the possibility that the 18.74 million sq ft could balloon substantially if all the office space being contemplated now and in the near future, especially the Economic Transformation Plan (ETP) are taken into account.

Demand-supply dynamics

In the years to come, the challenge for developers of office space is to make extraordinary efforts to adjust supply to conditions in the market when their projects are due to come on-stream and to do as much of pre-letting as possible.

For owners of existing buildings, hang onto to your tenants! For regulators and lenders, watch this with greater interest.

Much hope hinges on the roll out of the ETP and how it will create new office space demand, and of the order required, to balance demand and supply.

Nevertheless, the office market cannot be looked at, solely, through the lens of total numbers. The market exists in various sub-markets, depending on location and product type.

Each segment has its own demand-supply dynamics. Rents drive the market and post-Global Financial Crisis (GFC), rental levels have dropped to about RM7 to RM8 per sq ft per month for average prime space.

At this level, the office market for average prime space for office buildings sold en bloc can sustain at RM700 to RM900 per sq ft based on its historical yield expectation of about 7% to 7.5%, but this figure is not carved in stone.

For the market to slip below this level, it will take a severe economic downturn. In short, office values are bouncing along around the bottom. Post-Asian Financial Crisis, values did dip below the replacement cost (as it was then), for a number of years.

In terms of office space, the Klang Valley, with an existing supply of more than 90 million sq ft, dominates, compared to Penang's 9.43 million sq ft and Johor Baru's 7.7 million sq ft.

Klang Valley's retail segment, comprising modern shopping centres, is relatively stronger than the office market segment because consumer spending has continued unabated.

But there are shadows of looming oversupply even in this segment. If inflation accelerates, or household spending is crimped, will there be consumer support?

But a well-managed retail centre by its inherent higher sophistication (than an office building), has better strength to tide over temporary downturns. Once a shopping centre has clientele loyalty, usually through a prolonged period of astute mall management, it is extremely difficult for new comers to dislodge it.

Real estate investment trusts or REITs have a heightened presence after the listing of Sunway REIT and CMMT are anchored with retail properties. The latest addition, the Pavilion REIT is also essentially a retail REIT.

REITs are generally defensive investments and are ideal for lowering volatility in a portfolio of stock and bond investments.

Role of a REIT

They are also particularly attractive during difficult economic periods such as, since 2008. They are more convenient proxies for physical property. For that reason, special tax benefits are showered on them.

But, as was seen during the last GFC, to perform true to form they should also display all their other attributes, i.e. a high degree of transparency, low borrowings, professional property management and the comfort that comes from a high degree of regulatory oversight.

REITs have also to display their ability as a sector, and as individual REITs, to ameliorate its greatest weakness i.e. its dependency on short term financing due to the requirement for it to distribute almost all its earnings, yearly.

During the days of easy money before the GFC, cheap financing was not a major issue, but it now is.

As a quid pro quo for favourable tax incentives, REITs are obliged to promote retail investors, apart from institutional investors, to participate in the REIT.

This will meet the regulators objective of deepening and broadening the capital market, and set the foundation for sophisticated products in the future such as the establishment of a property derivatives market.

Retail investors would also have tenancies that come with considerable visibility. REIT managers should provide information as this is the key driver of REIT proposition and not hide behind the guise of protectionism against competition.

The residential sector of the market, viewed from the perspective of the country as a whole, is fundamentally sound.

Losing balance

In the Klang Valley, where residential properties are generally 4 to 5 times annual household income, certain hotspots have elevated this ratio in recent years. Household income in the Klang Valley is about RM6,000 a month.

While house prices have increased, household income has not. Set against property prices, rental yield has dropped over the years, slipping below the critical 3% benchmark.

This is a cause for concern as yield should range between 3% and 6% (all risks net return) depending on house type and whether landed or strata.

Over the past six months, with the onset of greater volatility in global markets stemming mainly from the European sovereign debt crisis, sentiment has filtered down to the residential market in Kuala Lumpur.

Coupled with tightening measures by Bank Negara for loans, the market has slowed and demand has become subdued. It is hoped that this has taken some heat out of the speculative end of the market.

Keeping a look out

Going forward, into 2012, the issues that bear watching for the property market in Malaysia, are the continuing European debt crisis and the sluggish US economy and its effects on the global economy and the possible slowing of the Asian behemoths, China and India (which have regional implications).

There is also the possible General Elections in Malaysia (and its ramifications), the possible introduction of the Goods and Services Tax (affecting in particular house prices, developers and service apartments) and the possible unprecedented legislative introduction of a new, single mode of housing delivery by way of the “build then sell” system (humungous down-the-line implications).

There is a possibility of further tweaking of rules for housing loans (to possibly also contain household debt) and other possible monetary and fiscal measures (may be negative or uplifting for the property market) that may be put in place should the global economy weaken further.

Elvin Fernandez is the MD of property consultancy firm Khong & Jaafar Sdn Bhd.

By The Star

Big hypermarket operators keen on MetroCity

2012-01-14T10:21:00.000+08:00

Ambitious project: Chong pointing to a map of the MetroCity project, the largest single integrated township development in Kuching City North. The two-phase development on 74ha has a gross development value of RM970mil.

KUCHING: Chong Kia Hoi Realty Group is negotiating with three international brand hypermarket chain operators to operate Sarawak's biggest hypermarket in MetroCity, its flagship integrated new township development in Matang.

CKH Realty Group chairman and managing director Chong Kia Hoi said the three chain operators were the industry's “big names”, having several stores in Peninsular Malaysia, and that they were keen to expand their retail network to Sarawak. He declined to name the operators.

“Hopefully, we can seal the deal in two to three months,” Chong told StarBizWeek.

Tesco, Carrefour and Giant are the major foreign hypermarket and supermarket retail chain operators in Malaysia. Giant has spread its wings to Sarawak, opening two hypermarkets in Kuching, and one each in Sibu and Miri over the past six months.

Chong said an established local supermarket group had also expressed its interest in the proposed hypermarket.

He said the hypermarket would have a built-up area of between 120,000 and 150,000 sq ft, and 800 parking lots.

MetroCity is CKH Realty's most ambitious project and the largest single integrated township development in Kuching City North, where the Sarawak administrative centre is located.

The two-phase development has a gross development value of RM970mil and spans 74ha.

Phase I will be a commercial precinct comprising 314 units of three/four shophouses priced between RM850,000 and RM2.5mil, a commercial hall that will house the hypermarket, two three-storey showrooms, a private medical centre and a 120-room hotel.

It will also feature a fast-food restaurant, a trade service entertainment cineplex centre, a private food court and an integrated bus transit terminal and taxi station.

Phase II will be a residential development with more than 1,000 houses of various types.

Chong said more than 80% of the shophouses had been sold since their launch about three months ago.

“The entire development is expected to take eight to 10 years, and it will be financed with internal funding,” he said.

By The Star

Institutional funds invest in properties overseas to diversify portfolio

2012-01-14T10:19:00.000+08:00

The properties in Gold Coast, Australia seem to be more attractive compared with those in Sydney and Melbourne.

INSTITUTIONAL funds including Employees Provident Fund (EPF), Retirement Fund Inc (KWAP), Lembaga Tabung Haji (LTH) and Permodalan Nasional Bhd (PNB) are on the lookout for viable properties overseas to diversify their portfolio and to take advantage of the strong ringgit.

CB Richard Ellis executive director Paul Khong says overseas markets such as the UK's commercial property market offers long-term lease tenure which ensures a fairly stable rental income.

“As such, commercial properties with blue-chip tenants at high rental yields will be ideal for these funds,” he says.

Khong says the offshore diversification will ensure a more balanced portfolio for the funds. He says most of the purchases will be yield driven with different expectations in different countries.

“With the strong ringgit against the pound sterling and the deteriorating condition of the UK property market, more trophy properties are now available for sale. It is a good time to shop around for bargains selectively both big and small properties.

“The funds can expect to look at net returns of 5% to 6% currently for good quality assets in the UK,” he says.

Meanwhile, the strong Australian currency has driven up property prices Down Under.

Khong says Australia is getting pricey due to the exchange rate.

“Sydney and Melbourne are at the higher end of the curve in the residential market cycle but other areas in Brisbane and Gold Coast seem to be more attractive as their markets are at the lower end of the scale (where selective properties are coming in at close to 10% yield for a quick sale),” he adds.

Savills Rahim & Co head of overseas business development Chris Hahn says the markets in the UK and Australia are transparent with fierce competition for institutional-grade investment properties.

“Most investment properties in the UK and Australia are marketed worldwide by exclusive agents and in parallel with this institutional investors also pay for their own advice from agents or fund managers. Sellers of property can be assured that the global market is covered and fair prices are achieved,” Hahn says.

On the need for more public disclosure of the investment activities of the funds, Khong says: “Public funds should have a good level of transparency to ward off any unwanted concerns on any irregularity.”

Khong says the Securities Commission has done a good job in monitoring the actions of the public companies and having an independent authority to monitor transactions involving large amounts of public funds is good as it will encourage good corporate governance.

Hahn concurs, adding that making reports on the funds' performance public allows the people to monitor how these offshore investments are performing.

The EPF, which has allocated £1bil to invest in properties in the UK and other European markets has, to date, invested about half of that in a number of commercial buildings in London.

KWAP which has allocated 4% of its entire fund of RM3.2bil for property investments, has completed its acquisition of the 14-storey ASX building in Sydney, Australia, for A$185mil last December.

In 2010, KWAP bought 737 Bourke Street office building in Melbourne for A$113mil.

Besides Australia, KWAP is also eyeing some properties in London.

According to a Bloomberg report, PNB is in talks with German real estate fund KanAm Grund KAG over the sale of four London office buildings valued at about £1bil.

The German real estate fund is said to be in discussions with other bidders and “a deal could be done in a couple more weeks,” says Michael Birnbaum, a spokesman for the Frankfurt-based KanAm.

The buildings are the European Bank of Reconstruction and Development's head office next to Liverpool Street train station, the UK headquarters of Thomson Reuters in Canary Wharf, Deutsche Bank AG's UK headquarters on London Wall and an office building at 90 High Holborn.

The London assets are part of KanAm's suspended 3.97 billion-euro (US$5.1bil) Grundinvest fund.

Last December, PNB paid £350mil for the Milton & Shire House building in London and the fund says it is looking to add more British assets to its portfolio.

In 2010, PNB bought an upmarket office block in Brisbane, Australia, called Santos Place for more than A$290mil.

LTH plans to invest in syariah-compliant buildings in Australia.

By The Star

When informed decisions go awry

2012-01-14T10:16:00.001+08:00

Making investments with money you don't have and with information you should not be privy to is both morally and legally wrong

LAST year, a young entrepreneur turned property investor lost his business outfit. Although his monthly income fluctuated somewhat month-to-month, he was able to get loans from the banks to finance his purchases, which he had incrementally amassed to about 10 over the years.

He was able to have a selection of properties because of the nature of his work which allowed him to source and research the sector and related industries. He was also a quick and adept student of the market and its trends, because like many Malaysians, he was interested in bricks and mortar as an investment instrument. It is uncertain how he will pay for all of them today.

Because of Malaysians' great love for properties, there is the tendency to buy multiple units, each in succession when the previous purchase is not yet fully paid for. While there is nothing wrong with this strategy some of us are more comfortable with properties than with other forms of investment instruments these “assets” can become a financial millstone. Quite a number of Malaysians bought multiple units at one go, sometimes in the same project because they have faith in the developer. Or they buy into the same segment, for example, condominiums.

If one has the means to hold on to these investments over the long term, there may not be an issue. The danger of multiple property purchases and ownership comes during a down cycle.

A couple of years ago when the property prices were steadily moving up, Malaysians' enchantment with the property market resulted in various courses being offered by property experts.

Nearly, if not all of them, were millionaires because of earlier property investments and they were offering courses to teach how one can become rich, like themselves.

However, the scenario then and the scenario today has changed drastically. It may not be possible to use the same strategy they had used. Like any investment, and at any one point in time, there are risks involved. But over and above taking a risk, there is something known as moral hazard. When risks become too high, the action taken by an investor may be hazardous and the probability of failure becomes very high. An action becomes morally hazardous when an investor makes a decision to do something assuming that he has a safety net.

Lately, there was a case where a spouse had bought two luxury condominiums with money that did not belong to him. Because properties at the time enjoyed high returns, he bought multiple units in Malaysia and Singapore. When the case came to light, he stressed that his wife, a public figure, is not involved.

A couple may not be a single entity from the legal standpoint. However, the reality is that the action of one will have a bearing on the other.

This was clearly seen early this week when the chairman of the Swiss National Bank, equivalent to our Bank Negara, resigned. Less than a week ago, he had denied any wrongdoing in a currency scandal that involved his wife.

The Financial Times reported that Philipp Hildebrand's wife had in September 2011 bought US$500,000 before the Swiss National Bank, headed by her husband, imposed a ceiling on the appreciating Swiss francs to halt its rise. Because Swiss francs was appreciating so quickly, the greenback became “cheap” by comparison. The move by the central bank sent the Swiss francs down sharply. She sold the dollars one month later. She bought the US dollar cheap and sold high.

Hildebrand had earlier rejected calls to resign. When he did, he said: “I came to the conclusion that it's not possible for me to deliver a definite proof that my wife requested the currency transation without my knowledge.”

His wife said she failed her husband because she had not considered the perception of a “conflict of interest.”

After his resignation, he asked rhetorically: “Can you live a dollar lifestyle, or a partly dollar lifestyle, like ours, and still be a central bank governor?”

That is an interesting question. It is a question of self examination that comes to each of us, at one point or another, sometimes many times over.

Assistant news editor Thean Lee Cheng ponders: Should the action of a spouse have far reaching consequences on the “innocent” half? Should one profit from one's vocation because of some privileged information?

By The Star

The beauty of having choices

2012-01-14T10:16:00.000+08:00

Cranes fill the sky at a high-rise commercial project in KL. The build-then-sell concept is mooted with good intention. However, a more holistic assessment of the concept needs to be undertaken before it is made mandatory. —AFP

RECENTLY, a friend of mine purchased a house from the secondary market after months of careful deliberation. As he shared the joy of his new property purchase, it was heartening to note that many of his friends were also hunting for properties in both the primary and secondary property markets for investment purpose and/or for their children.

We often see two scenarios when it comes to the purchase of a home. Some favour purchasing a property directly from the developer and others, from the secondary market. Both groups, however, have a common agreement that neither option is right nor wrong since personal preference largely influences the acquisition of a property.

In Malaysia, both primary and secondary property markets offer plenty of choices in terms of property types and range of prices.

Properties from the secondary market are often viewed as ready to be occupied and most purchasers of such properties are generally satisfied with their acquisition based on the principle of “what you see is what you get”.

In fact, secondary properties are very popular in our country. According to statistics published by National Property Information Centre (NAPIC), the total residential property transactions in 2010 was 181,024 units, with 151,862 units transacted in the secondary market, and 29,162 units from the primary market. In short, 84% of the units transacted were completed properties from the secondary market.

On the other hand, newly-built properties bought directly from developers offer a different spectrum altogether. Purchasers of such properties generally look for specific locations or specific project features such as newly-developed areas near to commercial lots or recreational facilities, or projects with innovative elements etc. When buying a property directly from a developer, the purchaser expects to get a good deal compared to secondary market which has factored in price appreciation.

Some may perceive primary property market as containing higher risk as they purchase a property off the plan without seeing the real product. They will only realise their hope when the house is completed and handed over to them. As such, purchasers are advised to always consider the reputation and track records of property developers before making their commitment.

Being able to choose a property from the primary and secondary markets clearly facilitates a healthy environment where house buyers can enjoy the best of both worlds.

It was not surprising that the property development industry was jolted with many questions raised on the build-then-sell (BTS) concept when the Government announced last year that the same would be made mandatory by 2015. An immediate question came to mind ... “Are we ready for just one concept when we currently enjoy a choice?”

At present, almost all newly-built properties would fall under the sell-then-build (STB) concept. Purchasers would pay a 10% deposit or 20% initial payment of the purchase price with the remaining 90% or 80%, as the case may be, mostly financed by mortgage loans provided by banks. Servicing interest or instalment would begin immediately after the banks start to disburse the monies to the developers.

BTS on the other hand is a concept that allows house purchasers to pay the initial 10% deposit and not pay a single cent thereafter until the project is completed and the certificate of fitness is issued. In most cases, the construction period may last up to 3 years.

There are two sides of the coin on when to purchase a BTS concept property. Purchasing early provides the buyer a greater selection of units to choose from and more time to shop for good mortgages. Purchasing near the completion stage, on the other hand, provides the buyer the opportunity to have a physical view of the property (design and quality) and its surroundings (infrastructure, marketability etc). However, if the decision is made too late, the buyer may miss the opportunity to purchase a house from developer, and later has to pay higher price for a unit from the secondary market.

So how does BTS fit in today's picture?

Notwithstanding the difference in the duration to occupy the property (i.e. most “second hand” properties are fit for occupation immediately while newly-built properties have to wait for the certificate of fitness), properties in the secondary market are already adopting the BTS concept. Effectively, the purchaser can occupy the property once the remaining 90% payment is secured by the seller.

No doubt, the Government's move on BTS concept is mooted with good intention to protect consumers from suffering losses as a result of abandoned projects. However, a more holistic assessment of the concept needs to be undertaken before it is made mandatory. For instance, understanding and addressing the causes of abandoned projects whether they are due to economic downturn, inflation, fraud or management know-how, etc, are highly necessary.

As it is, there have been efforts to mitigate this problem in the form of stricter regulatory measures such as imposing hefty fines of between RM250,000 and RM500,000 and harsh jail term not exceeding three years for offences relating to housing abandonment by developers. The banks are required to assess the developers before offering bridging or mortgage loans and greater awareness campaigns highlighted by the media.

With a better understanding of BTS and its existence in today's environment as well as the need to holistically assess the concept before it is made mandatory, we need to ask ourselves again “Do we allow the free market to dictate how the industry should be shaped, such as by having both BTS and STB or just adopting the BTS concept solely?”

Something for everyone to ponder at the beginning of the year.

Datuk Alan Tong is the group chairman of Bukit Kiara Properties, he was the FIABCI world president in 2005-2006 and was recently named Property Man of The Year 2010 by FIABCI Malaysia.

By The Star

AEON to open at least five more malls by 2015

2012-01-14T10:13:00.000+08:00

KUALA LUMPUR: AEON Co (M) Bhd, the Malaysian operator of the Japan-based Jusco retail supermarket, hypermarket and shopping malls, expects to open another five to eight shopping complexes by 2015.

AEON Asean vice-president and chief executive officer Nagahisa Oyama said currently the company owned and operated 28 shopping malls, with the latest opening in Rawang in December last year.

He said a shopping mall would usually cost some RM200mil, depending on location and arrangement with the developer.

“Sometimes we have to buy the land and build, sometimes the developer will construct it and we just have to run the business.

“These new shopping malls are at the planning stage. Therefore we do not have specific locations for the complexes yet,” he said after a welcoming ceremony for new Aeon staff yesterday.

By The Star

UOA REIT posts higher pre-tax profit

2012-01-14T10:11:00.000+08:00

KUALA LUMPUR: UOA Real Estate Investment Trust (UOA REIT) posted a higher pre-tax profit of RM41.87 million for the financial year ended December 31 2011 compared with RM25.08 million in the same period last year.

In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.

By Business Times

Mitrajaya unit accepts Putrajaya deal

2012-01-14T10:10:00.000+08:00

KUALA LUMPUR: Mitrajaya Holdings Bhd announced that its wholly-owned subsidiary, Pembinaan Mitrajaya Sdn Bhd, has accepted a Letter of Award from Putrajaya Holdings Sdn Bhd.

The award is for the proposed construction and completion of residential and commercial units in Putrajaya for RM20.52 million, Mitrajaya told Bursa Malaysia.

By Business Times

Development in Shah Alam offers all the convenience

2012-01-13T21:42:00.001+08:00

Well-designed: Noorazhar showing the model of the D’Kayangan units.

HYPERLINK Marbella homes in D’Kayangan, Shah Alam offers buyers the comfort of living in a low-density residential area.

The project will be developed under phase six of the D’Kayangan township and each unit is 28’ x 80’.

Kumpulan Lebar Daun executive director Noorazhar Mohamed Nurdin said only 102 homes would be built for this phase.

Noorazhar said each unit comes with a built-up area of 3,085sq ft.

He said the development is expected to be completed by August 2013.

“The hyperlink Marbella type A homes are spacious and built without borders,” he said, adding that the type B homes would have a built-up area of 3,368sq ft.

Noorazhar said the strategic location of the project itself was an unique selling point.

It is located at the former site of the Batu Tiga race course, he said, and was easily accessible via the NKVE, Elite Highway, GCE, Kesas, LKSA and KL-Klang Federal Highway.

“It is a gated and guarded community with perimeter wall fencing and a 24-hour security under a conducive environment.

“There are hypermarkets, education centres, shopping malls, sports facilities as well as golf courses near the site,” he said.

Noorazhar added that the development also comes with a scenic lake within walking distance.

He said the homes priced between RM958,888 and RM2.2mil were ideal for investment.

“We are confident that the homes will attract good response from investors and those who seek to upgrade their lifestyle,” he said.

A 3% discount is offered for the hyperlink homes to early birds for limited units only, buyers could enjoy savings of up to RM70,000.

Besides the Marbella, D’Kayangan Residence Semi-D type Alena (40’x 80’/50’ x 90’) and Semi-D Villa type Casa Ariana (60’ x 80’) are also available for sale.

A commercial project consisting of shop office and service apartment are among the other developments expected to be launched at D’ Kayangan this year.

The D’Kayangan township with a land area of 66ha comprises superlink and semi-detached homes, bungalow lots, a recreational and commercial centre.

By The Star

Lee Yan Lian's family’s land in Klang Valley up for sale

2012-01-13T21:39:00.002+08:00

PETALING JAYA: Five parcels of freehold land in the Klang Valley owned by the late Tan Sri Lee Yan Lian's family have been put up for sale by tender.

A well-known philantrophist and community leader, Lee was a successful housing developer in the 1960s until his demise in 1983.

He is renowned for developing SEA Park in Petaling Jaya and Taman Tun Dr Ismail (TTDI), which was a joint venture with the Urban Development Authority.

Lee's SEA Housing Corp Sdn Bhd owned the 286ha of rubber estate land which was developed into the highly successful TTDI, an affluent township in Kuala Lumpur.

A property developer, who requested anonymity, said that the Lee family still owned a number of land in the Klang Valley and the five pieces advertised for sale were among the more prime parcels.

“These are among the last sizeable freehold land in the Klang Valley and will be suitable for redevelopment into mixed development projects,” he added.

In the latest sale tender, a 7,239-sq-ft land in the prime location of Jalan Bukit Bintang, Kuala Lumpur has a reserve price of RM50mil. The land is currently occupied by The Malaysia Hotel.

The second piece measuring 276,832 sq ft in 4 miles Old Klang Road (near the Pearl International Hotel) has a reserve price of RM90mil.

The other three parcels are located in Petaling Jaya.

A 265,245-sq-ft plot in Jalan SS23/15 in Taman SEA has a reserve price of RM150mil, and another piece of 82,715 sq ft in Jalan SS2/64, which is currently used as a car park, is going for RM100mil.

A vacant 84,315-sq-ft land made up of seven plots with old bungalows on two plots in Taman Tan Sri Lee Yan Lian in Section 16 has a reserve price of RM25mil.

The tender package can be purchased from Colliers International Property Consultants Sdn Bhd, the property agent appointed for the tender exercise.

A tenderer may purchase the individual property or all five properties. The last date for purchase of the tender package is Jan 16 and the closing date of the tender is at 1pm Jan 30.

By The Star

UOA REIT FY11 pre-tax profit rises to RM41.9m

2012-01-13T21:38:00.002+08:00

UOA Real Estate Investment Trust (UOA REIT) posted a higher pre-tax profit of RM41.87 million for the financial year ended Dec 31, 2011 compared with RM25.08 million in the same period last year.

In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.

Going forward, the company said it would continue its efforts to further improve the occupancy rates of its property assets and anticipates the high
occupancy rates to sustain barring unforeseen circumstances.

"The manager will continue to adopt an active operating and capital management strategy to enhance the yields and returns of the existing
properties.

"The manager will also continue to seek opportunities to further acquire real estate that meets the objectives of the Trust," it added.

By Bernama

1MDB may sell sukuk to part-finance KLIFD project

2012-01-12T10:15:00.000+08:00

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB), a state-owned development company, may sell Islamic bonds to partly fund the construction of an US$8 billion (RM25.2 billion) financial district in Kuala Lumpur.

"We have a RM2 billion bridging loan coming due in 2013 and are looking at all options," chief executive officer Shahrol Halmi said in an interview in Kuala Lumpur yesterday.

"We may sell medium-term syariah-compliant notes if conditions are conducive."

1MDB is jointly developing the so-called Kuala Lumpur International Financial District (KLIFD) with Abu Dhabi's Mubadala Development Corp, said Shahrol.

The initial phase is due to start in the first half of this year at an estimated cost of RM2 billion and 1MDB may also look into setting up an Islamic real-estate fund for financing, he said.

The company, formerly known as Terengganu Investment Authority Bhd, last sold RM5 billion of 30-year syariah-compliant bonds in May 2009.

The debt, which was guaranteed by the Malaysian government, is rated A3 by Moody's Investors Service.

By Bloomberg

UEM Land set to launch RM5.5b property projects

2012-01-11T23:08:00.000+08:00

NEW TARGET: Firm expects sales to increase 50 per cent to RM3 billion this year

UEM Land Holdings Bhd is set to launch property projects worth about RM5.5 billion across Malaysia this year.

As such, it anticipates sales to increase to RM3 billion, about 50 per cent more than last year's sales target.

Its managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the locations for the company's new projects would include Johor, Mont Kiara in Kuala Lumpur, and Bangi and Kajang in Selangor.

"We expect the demand structure for our properties to take a new dimension. We expect a dramatic increase in take-up (of our properties).

"So, we are targeting sales of properties worth RM3 billion this year. Last year's target was at RM2 billion," he told reporters after the signing of a joint-venture agreement with Medini Security services Sdn Bhd, a wholly-owned subsidiary of Iskandar Investment Bhd, here yesterday.

In fact, Wan Abdullah said, the company has managed to achieve last year's sales target of more than RM2 billion. He, however, declined to disclose the exact sales figures.

"At any one time when we launch a project, 85 per cent of the units offered are always taken up. And in the past two years, our sales team had managed to achieve our target.

"So the board decided to raise the target bar for 2012 ," he said.

Under the agreement sealed yesterday, UEM Land and Medini Security have agreed to form a full-fledged security services company to provide enhanced security for Nusajaya, one of the five nodes of Iskandar Malaysia.

Asked on UEM Land's properties in Nusajaya, Wan Abdullah said since 2006, the company has managed to sell some 3,500 units of properties there, noting that sales only picked up over the last few years.

"Sales were slow in the beginning, but over the last few years, they have been increasing dramatically," he said.

By Business Times