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Friday, November 30, 2007

Foreign buyers boost office property

Rising interest in the commercial market has many experts wondering what the next benchmark price for prime office space will be

The recent record-setting RM1,120 psf offer for Glomac Al Batha Sdn Bhd’s Glomac Tower in the KLCC vicinity has set the local property market abuzz, with many in the real estate fraternity caught in a guessing game on the next benchmark price for prime office space.

Glomac Tower

The Icon Jalan Tun Razak

Then, close on the heels of that offer came Mah Sing Group Bhd’s enbloc sales of two Grade A office developments -- the East Wing of The Icon Jalan Tun Razak and The Icon Mont’Kiara to Prompt Symphony Sdn Bhd. The sales, announced three days ago, have valued the East Wing of The Icon at RM237 million and The Icon Mont'Kiara at RM285.4 million.

It is worth noting that Kuwait Finance House Bhd (KFH) featured in the Glomac and Mah Sing
transactions. KFH teamed up with real estate investor Prestige Scale Sdn Bhd to pay RM577 million for Glomac Tower. As for the deals with Mah Sing, KFH formed Prompt Symphony,
a special purpose vehicle with Autron Corp Ltd.

On a per sq foot basis, the East Wing of The Icon Jalan Tun Razak has been priced at a discount to Glomac Tower, but this is to be expected given the different locations of the projects. There is no doubt that the KLCC address commands a significant premium.

It should be noted that Mah Sing’s sale of its two commercial developments to Prompt Symphony does not include parking bays. For the East Wing of The Icon Jalan Tun Razak, Mah Sing has signed a put and call agreement to sell 301 parking bays at RM18.15 million to Prompt Symphony. For The Icon Mont'Kiara, the developer has also inked a similarly worded agreement with Prompt Symphony, valuing the 637 parking bays at RM19.9 million.

The recent enbloc office space deals serve to highlight the increasing interest from foreigners, particularly from the Middle East, in real estate. On the pricing, several consultants contacted said, at RM899 psf, the East Wing of The Icon Jalan Tun Razak is a “good” deal. The 17-storey tower has a nett lettable area (NLA) of 263,435 sq ft.

In comparison, Mah Sing had in July this year, sold the West Wing of The Icon Jalan Tun Razak to Koperasi Permodalan Felda for RM174.4 million or RM715 psf, or, as pointed out by Knight Frank Malaysia executive director Sarkunan Subramaniam, the East Wing sale marks a 20% increase in values.

“Rentals for the office space when completed in two to three years time would have to be able have to fetch a minimum of RM6 psf with the nett yield at 6% for the property to be worth
the purchase,” Sarkunan told Propertyplus.

Can The Icon Jalan Tun Razak command such rentals upon completion? "I believe it is possible. Rents in KL’s Golden Triangle are moving upwards. Current average rentals are at RM6 psf and yields for prime offices are at 6.25%,” Sarkunan said.

He reasoned that Prompt Symphony foresees a compression of yields, which are a reflection of rentals over capital value. Lower yields, Sarkunan continued, are not necessarily a bad sign, but possibly due to good capital appreciation.

The Icon Mont’Kiara
The market has valued Mah Sing’s 27 levels of offices and a retail podium with a combined NLA of 380,510 sq ft at a cool RM285.4 million or RM750 psf. Zerin Properties chief executive officer
Previn Singhe (pix) sees this as a possible benchmark price for the area.

The Icon Mont'Kiara

Zerin Properties chief executive officer - Previn Singhe (pix)

“The closest transaction to this would be One Mont’Kiara’s, which was launched in 2006 for RM550 to RM650 psf. The new prices show the area’s maturity and that Mont’Kiara has become a preferred location for investors,” Previn said, adding that, if values were based on quality alone, Mont’Kiara properties could fetch higher prices than certain KLCC projects.

One Mont'Kiara
Other commercial offerings in the area would be Sunrise Bhd's Solaris@ Dutamas. This mixed-use commercial development first launched its office suites in October 2005, at RM370 psf and the latest launch in April this year was RM460 psf.

YY Property Solutions chief executive officer YY Lau also called the price “attractive”. It shows that Mont’Kiara has graduated from just being a residential enclave to a truly sought after commercial centre, she added.

DTZ Debenham Tie Leung executive director Brian Koh (pix) said that enbloc purchases of commercial buildings usually include the parking bays, hence the West Wing of The Icon Jalan Tun Razak and The Icon Mont'Kiara prices would be higher if they were sold with car parks.

DTZ Debenham Tie Leung executive director Brian Koh (pix)

“If the car parks were included, The Icon Jalan Tun Razak would be priced at RM969 psf, which is pricey for that location. And the fact that the earlier block had been sold, it would mean that the property is stratafied," Koh said.

Koh adds that the high prices paid by foreign investors shows that they either have a bullish view of the market or that they are willing to accept low yields because they are in it for the long haul.

Office Market
Consultants concur that the recent commercial purchases reflect the confidence in the local property market. Previn said foreign investors have shown that they believe the Malaysian real estate industry to be on the upside. “They see that the upside has just begun and that is why they are buying.”

Lau adds that factoring in the rising construction costs, property prices are unlikely to go down. “There will be a lot more supply of office space coming in from not only KL, but less central areas such as Damansara Heights and Petaling Jaya. Although the immediate market for offices in the Klang Valley remains healthy, there could be a possibility of oversupply in the next three to five years if all the proposed projects are approved,” Lau noted.

However, Previn felt that the demand for offices, especially in the KL city centre would be strong as the tightening of rents show that there isn’t enough office space to go around.

By theSun (by Allison Lee)

From secondary jungle to thriving township

What was once considered secondary jungle 10 years ago is now a thriving selfintegrated township with a good mix of residential and commercial properties.

Property developer Glomac Bhd saw the potential of the 500-acre piece of land in the heart of Sungai Buloh and transformed it into the now 1,100-acre Bandar Saujana Utama, which is celebrating its 10th anniversary this Sunday.

Its group managing director Datuk FD Iskandar (pix) said the developer took a risk to come up with a township in the area, which was considered relatively far from Kuala Lumpur and nearby townships such as Shah Alam and Petaling Jaya.

“At that time, we had to go for cheaper land as we could not compete with the bigger boys who could afford expensive land nearer to the KL city centre,” he told PropertyPlus. The calculated risk seems to have paid off as the township now enjoys take-up rates of up to 90% for its properties. About RM750 million-worth of properties here have been sold so far.

The Bandar Saujana Utama project began in 1997, via a joint venture, and over the years accumulated more land thus expanding the township to its size of more than 1,000 acres today.

“We started off by selling 1- and 2-storey terraced houses priced at RM90,000 and RM108,000 respectively, but sales were difficult to come by due to the recession in 1998,” he said. A decade later, prices for these units have doubled to about RM200,000 each.

Fortunately for the development, the government announced the first Home Ownership Campaign (HOC) a few months after the houses were launched, and purchasers of affordable homes (priced below RM250,000) were given incentives such as stamp duty waivers and developers absorbing the S&P fees. “We anticipated sales to be slow and targeted only two
phases a year, instead we managed to clear three phases during the HOC period,” FD Iskandar revealed.

Bandar Saujana Utama is accessible via the Guthrie Corridor Highway, North Klang Valley Expressway (NKVE), an upgraded trunk road to the MRR2, and the proposed New North Klang Valley Expressway (NNKVE). It has a total gross development value (GDV) of RM1.3 billion, with 5,500 properties already handed over.

Township amenities
To create added value and benefits for the residents of Bandar Saujana Utama, the developer has provided numerous amenities and facilities in the township. These include a residential clubhouse with facilities such as a swimming pool, gymnasium and tennis courts, the Elmina Equestrian Centre, which offers horse riding classes, and schools such as SK Saujana Utama and SMK Saujana Utama. The upcoming Universiti Teknologi Mara is located five minutes drive away.

Central Mart, the latest addition to the township’s commercial hub known as SU Central, is expected to bring added business and vibrancy to the self-integrated township. It is a RM12 million joint venture project between the developer and Trendcell Sdn Bhd.

“Ever since it opened in June, Central Mart has definitely exceeded expectations and would no doubt be a major centre for business and social activities to almost 30,000 residents in Bandar Saujana Utama and the surrounding areas,” FD Iskandar said.

The township's Central Mart is expected to bring more businesses to the area

He added that being the first modern supermarket in the vicinity, the mart would complement the other conveniences already available in the commercial centre, including SU Mall, Saujana Square and Saujana Square 2.

The 50,000 sq ft modern building comprises a wet and dry market, offering a wide variety of fresh vegetable, fruits and seafood at reasonable prices. The mart also houses a food court and an Ace Hardware store. It was officiated by Agriculture and Agro-based Industry Minister Tan Sri Muhyiddin Yassin on Tuesday.

Bandar Saujana started off as a small project but has since grown to a township with a huge market catchment of more than 20,000. This would in turn attract and give confidence to supermarket chains and operators like Central Mart to set up their business here,” he said.

He added that, as the township progresses, the developer would be able to upgrade its products.

“Besides terraced houses, Bandar Saujana Utama also offers super links at RM320,000, semidees from RM380,000 and bungalows from RM500,000 onwards,” he said.

On Sungai Buloh, he stated the area has great potential for future development due to improved accessibility. It is about a 35 to 45-minute drive to KL. “With improvements to public transportation and roads, I foresee traveling time to be reduced to only 30 minutes in the future,” he said adding that travelling time from Subang Jaya to Kelana Jaya also takes about the same time.

“Although our properties are priced slightly higher than others in the vicinity, buyers do not mind paying a 10% premium because we are a reputable developer and offer enhanced value to the properties they purchase,” he offered.

Anniversary carnival
In conjunction with the township's 10th anniversary, Glomac is organising the “Karnival Saujana Utama 2007”, at the township’s show village this Sunday. Among the activities planned include, face painting, lucky draws and a live performance from local comedian Saiful Apek. The developer is hoping to raise funds through the sale of coupons, with proceeds going to schools in the township and other charity organisations.

During the event, the group will be launching its latest phase of 2-storey terraced houses, consisting 120 units in phase 5B and 115 units in phase 3. Prices range from RM177,900 to RM205,8000.

Besides Bandar Saujana Utama, the developer has two other ongoing township developments, the 450-acre Sri Saujana in Johor and the 350-acre Saujana Rawang, located in the Northern Growth Corridor, 10 minutes from the Rawang interchange. The projects have GDVs of RM600 million and RM550 million respectively.

The group has 14 projects throughout Malaysia with a total GDV of RM3.3 billion. It also has warehouses in Australia and Thailand, and is undergoing due diligence for a university township development in India.

By theSun (by Yap Yew Jin)

Malaysia's very own property dot com

When Asim Qureshi came to Malaysia for a holiday with his wife in 2003, little did he know that they would be moving to Malaysia and setting up a business here a few years later.

The Oxford graduate and British-born Qureshi, who is now marketing manager and co-head of said, “My decision to move to Malaysia was not only business. When I came to Malaysia on a holiday with my wife, we decided casually that we would want to live here some day.

Qureshi: The opportunity was staring me in the face

We were interested to buy a few properties but struggled to find what we wanted. "I realised that the Internet is an ideal medium to both buy and sell property - - it's instant, easy-to-list, and buyers and tenants can create narrow searches rather than waste time looking at long lists of properties. It will soon become the most popular method to find property in Malaysia — this view is supported by analysing trends in most developed countries. I felt Malaysia didn’t have the type of quality property website that I had seen in the UK, so the opportunity was staring me in the face.”

Qureshi resigned as vice-president of investment banking giant Credit Suisse in London to set up AIQ Global — a property management and development company, with his French wife. “Everyone at that time thought I was insane. But I’d say it has, so far, proven to be amongst the
best decisions in my life”, he added. They have since managed to purchase a few properties in Malaysia.

Kashif Chowdhree, an old friend of Qureshi, loved the idea of the website and assembled the team within days. Chowdhree, chief technology officer and cohead of my, is a highly experienced web developer whose previous work experience includes designing web
infrastructures for some of Wall Street's top companies including JP Morgan.

Chowdhree: Loved the idea of the website

Chowdhree said, “Our development team is working flat out at improving the website and the results will be obvious as each month goes by. Our website is already revolutionary in many ways — in terms of website design, the site’s components change their size according to the size of the screen, the way photos are displayed (you are taken through a slide show if you click on any of the property photos) and the way the search engine at the top scrolls away if it is not
needed. It’s the small touches throughout the site that make it a revolution in design. In terms of functionality, the site has everything from blogs to forums, articles to news and it’s free – it’s the combination for a property website that is revolutionary”.

He added that they wrote the property-related articles in the site including guides on selling, buying, renting and renovating property. Qureshi was unwilling to disclose what they would like to achieve in the future but added that they’re a very young and aggressive team.

“I believe Malaysia is going through a major upward property correction — a property boom. I think the strong increase in values we've seen in ultra-prime areas such as KLCC and Damansara Heights will spread to other parts of KL, and then spread throughout the country. Typically, in any property boom, the prime areas in the major cities go up first, the rest of
the country follows. The stock market is near an all time high, foreign investment is soaring, GDP growth remains robust — all the signs are there. These price increases will probably bring in further foreign investment, as well as create further interest from the domestic market, which will further increase prices and it becomes a cycle. All of this would of course be fantastic for — the more interest in Malaysian real estate the better”, said Qureshi, commenting on the current property market situation in Malaysia.

“Our primary targets are real estate agents, property developers and real estate buyers. We’re also soon to open up to a whole new target base soon, but if I told you about that, I’d have to kill you!”

By theSun (by Rosalynn Poh)

Penang's very own Canary Wharf

PENANG: The Light, visible from the mainland and the Penang Bridge, is set to brighten Penang’s eastern coastline as a new major landmark.

Launched last Friday by Penang Chief Minister Tan Sri Dr Koh Tsu Koon, The Light is an ambitious RM4 billion project undertaken by IJM Corp Bhd’s subsidiary Jelutong Development Sdn Bhd.

When completed in 2012, The Light will significantly alter the island's coastline view off Gelugor, said IJM CEO and managing director Datuk Krishnan Tan.

To be built on three phases over 152 acres of reclaimed land, The Light will feature 1,186 units of high-end waterfront condominiums, office towers, four hotels, a family mall, an IT mall, a fashion mall, dining and entertainment facilities, and a sea front park.

The residential units will spread over 42 acres while the commercial and retail units over 103 acres, with the remaining seven acres for the sea front park.

The Light is a spectacular project and a crown in IJM’s portfolio that will bring pride to the people of Penang. It will be one of the island’s biggest waterfront developments, on par with international waterfront developments such as Canary Wharf in London, Melbourne’s Docklands
and Queens Quay of Toronto,” said Tan.

He said, among the unique features of The Light are a floating stage for arts and cultural performances, a floating restaurant and a marina for water taxis.

“As part of our commitment to the environment, we have set aside two kilometres of the coastline for greenery and will integrate plants into our project design."

According to Krishnan, the prices for the residential and commercial units have yet to be fixed but it could be in the range of RM350 to RM650 psf.

IJM was given the right to reclaim and develop 338 acres in the area by the state government in exchange for constructing the Jelutong Expressway. The Light is part of the 338 acres. Land reclamation and construction works are expected to start next year.

By theSun (by Tim Leonard)

Felda makes RM110m foray into Saudi Arabia

The Federal Land Development Authority (Felda) is allocating RM110 million for its first overseas investment in Saudi Arabia, focusing on real estate developments, hotels and restaurants in the kingdom, particularly in the holy city of Mecca.

Its chairman Tan Sri Mohd Yusof Noor said 20 per cent of the allocation has been spent on opening a restaurant, while 75 per cent is for the running of a hotel in Mecca.

"We will start operating our first restaurant by next month and a 54-room hotel by January next year," he told reporters after receiving an investment licence from Saudi Arabia General Investment Authority's (Sagia) country director for Asean, Meshari S. Al-Khaled, in Kuala Lumpur yesterday.

Sagia's investment licence, which is hard for foreign companies to get, is needed for foreign companies to invest in and own real estate in Saudi Arabia.

"The investment licence would allow us to start our restaurant and expand our services in Saudi Arabia in future. We are also looking to invest in similar sectors in other parts of Saudi Arabia," he added.

While many Malaysian companies have obtained investment licences from Sagia in the past, Felda is the first that allows 100 per cent foreign-ownership. The licence was awarded to Felda subsidiary Felda Global Ventures Middle East Sdn Bhd.

With the licence, Felda Global Ventures Middle East will form its new Saudi Arabian subsidiary, which will be known as FGV Arabia Ltd, to be jointly owned by Felda Global Ventures Middle East (90 per cent) and Felda D'Saji Sdn Bhd (10 per cent).

Mohd Yusof said FGV Arabia will engage in real estate developments, own or provide management services for hotels, hotel complexes and restaurants.

"We consider Saudi Arabia as a prime, promising and strategic location for executing Felda's investment strategies in the Middle East," he said.

Meanwhile, Al-Khaled said Malaysia is currently the fourth largest investor in Saudi Arabia, after the US, Europe and Japan.

Established on July 1 1956, Felda was set up to help the government carry out rural land development schemes and to uplift the economic status and living standards of the rural community.

To date, Felda has developed about 480 new areas, totalling 853,313 hectares which have become plantation and settlement areas.

By New Straits Times (by Kamarul Yunus)

Al-Rajhi to help woo Mideast investors to east coast

The first foreign Islamic bank in Kelantan wants to be the catalyst in pulling in more Middle Eastern investments to help spur the East Coast Economic Region (ECER).

At the launching of its 19th branch in the country at Wisma Aminah Zain in Kota Baru, Kelantan, on Wednesday, Al-Rajhi Bank Malaysia (ARBM) officials were confident that its Syariah-compliant products, services and facilities would facilitate the flow of capital from the Middle East.

At the launching of the bank by Tengku Mahkota of Kelantan Tengku Muhammad Faris Petra, ARBM chief executive officer Ahmed Rehman said the bank's products adhere to the strictest of Syariah principles as practised in Saudi Arabia.

"This provides confidence to clients when dealing with Al-Rajhi Bank," he said.

"Our arrival in Kelantan follows the launching of the ECER. Al-Rajhi hopes to play a prominent role in attracting investors from the Middle East, as well as strengthening Malaysia as a regional Islamic hub," he said.

Ahmed said the bank has 14 other branches in the Klang Valley, and one each in Johor Baru, Malacca, Penang and Kuching. ARBM plans to have a network of 50 branches by 2010.

By New Straits Times (by Syed Umar Ariff)

TH Prop CEO to join Saudi firm

THE head of Tabung Haji's property arm, Syed Mohamed Ibrahim, is leaving TH Properties Sdn Bhd (THP) to work on a RM24 billion city project in Madinah, Saudi Arabia.

Syed Mohamed, the chief executive officer of THP, tendered his resignation earlier this week, a source told Business Times.

"He felt that it was an opportunity that could not be passed. It is a rare opportunity," the source said.

Syed Mohamed is set to become the chief operating officer of Seera City Real Estate Development Co, a firm leading the 15-year project, known as the "Knowledge Economic City".

The city is one of six new cities that will be built by Saudi Arabia, the world's biggest oil exporter.

It will be an education and technology hub near Islam's second holiest shrine in Madinah.

Syed Mohamed's departure highlights the attraction of Malaysian expertise to foreign markets.

Malaysia's MMC Corp Bhd and Saudi's Binladin Group are developing another city, called the Jizan Economic City, a US$30 billion (RM101 billion) 30-year project.

Saudi Arabia is tapping its massive oil wealth to build infrastructure and create jobs.

Seera is owned by investors like food company Savola Group and property developer Taibah. The Knowledge Economic City will cover an area of 4.8 million sq m housing information technology companies and research institutions.

It is unclear who will replace Syed Ibrahim, although Tabung Haji is likely to consider internal and external candidates to lead THP.

THP is currently developing Bandar Enstek, a RM9.2 billion township in Negri Sembilan.

The township has attracted investments in excess of RM500 million from both the government and private sectors that have established institutions of higher learning and research there.

It is expected to be completed by 2025.

By New Straits Times (by Shahriman Johari)

Thursday, November 29, 2007

Merge Housing to focus on Mont’Kiara and Puchong

KUALA LUMPUR: Merge Housing Bhd will be focusing on two residential projects in its current financial year, ending on May 31, 2008. One of the projects is located in Mont’Kiara and the other in Puchong.

An artist's impression of one of the Puncak Kiara bungalows

Puncak Kiara
, the 9.5-acre freehold luxury bungalow development in Mont’Kiara is a joint venture with a private landowner. Merge Housing will be handing over 16 bungalows to the landowner by January.

This leaves the developer with a remaining 23 bungalow lots with average land areas of about 8,000 sq ft each.

The company has several options to dispose of them. “We can either look out for a bulk purchaser or build bungalows and sell them individually. Such homes can easily go for between
RM5 million and RM7 million each,” said managing director Lee Kuang Chong (pix) to reporters after its annual general meeting yesterday.

The developer also plans to launch 308 condominium units at its Puchong development called 983 Puchong. It has a gross development value of RM90 million and the developer is in the midst of submitting the building plans to the relevant authorities.

Lee also expressed the group’s interest in moving into the leasing business to generate rental income in the next one to two years. “For instance at our 1st Jelutong development, we have secured Tesco as the anchor tenant. We are now trying to approach food and beverage operators, banks as well as departmental stores,” said Lee.

Located in Bukit Jelutong, Shah Alam, the 1st Jelutong commercial centre comprises three retail podium levels and a plaza level with 2- and 3-storey shop offices. It has an estimated sales revenue of RM200 million.

For its 2007 financial year ended May 31, the group recorded a profit after tax of RM2.2 million, reversing a loss of RM14.5 million recorded in the preceding year.

By theSun (by Loo Pik Kwan)

Analysts positive on E&O, E&O Prop merger

KUALA LUMPUR: Analysts have responded positively to Eastern & Oriental Bhd’s proposed merger with its 63% owned subsidiary E&O Property Development Bhd, believing such an exercise to be of strategic sense and expecting it to be a success based on the E&O brand and the group’s track record.

Following the announcement on Tuesday, E&O Property’s share price rose 11 sen to close at RM2.56, with 1.39 million shares done, while E&O’s share price rose one sen to close at RM2.41, with 372,900 shares done. E&O Property and E&O were traded at their intra-day high of RM2.70 and RM2.45, respectively.

Kenanga Research said some advantages of the consolidation included the streamlining of operations and E&O group would have a higher earnings capacity leading to greater market influence under one listed company and in turn significantly expedite the group’s expansion locally and overseas, especially in the climate of the property market boom in Southeast Asia.

“Given both E&O Property’s and E&O’s track records, we believe that these benefits provide a robust base for sustainable value creation which will see fruition in the long term. Based on the E&O brand and the group’s track record, we are confident that the merger will prove to be a success,” it said.

On the flip side, it said there would be uncertainties in the near term relating to the companies’ share price, the foregone flexibility to raise equity funding from the market at E&O Property level and the loss of a pure property investment alternative.

Credit Suisse said the E&O group would be able to consolidate its financial operational expertise and resources to take advantage of growth opportunities and the consolidation was also expected to reduce conflict of interest and related party transactions between the two companies.

“We believe that the cash option is not attractive as the offer of RM2.50 per share is only at a 2% premium to the share price. Nevertheless, the cash option provides downside protection.

“We would advise investors to accept the share swap option instead as, if we assume a PE of 15 times for the merged entity, E&O Property should trade at RM3.15 per share, a 31% premium to its current share price,” Credit Suisse said.

Deutsche Bank said the restructuring exercise made strategic sense, creating benefits for shareholders and the company.

“First, it aligns all shareholders’ interests at E&O, removes potential share overhang at E&O Property, consolidates both companies to be on a stronger financial footing and removes holding company discounts at E&O.

“We believe E&O Prop shareholders should opt for shares instead of cash given that the cash offer is priced at a 50% discount to RNAV,” it said.

On the full share swap option, every 1,000 E&O Property shares will be exchangeable for 1,100 E&O shares. The 1:1.1 ratio is based on the five-day volume weighted average price of RM2.3808 for E&O and RM2.5222 for E&O Property up to Nov 26.

Under the fixed combination of cash and shares option, for every 1,000 units of E&O Prop shares held, 650 E&O Property shares are exchangeable for 715 E&O shares and the remaining 350 E&O Property shares will be exchanged for RM875 cash.

For the maximised cash option, minority shareholders may get RM2,500 for every 1,000 shares held in E&O Property. Each E&O Prop share is valued at RM2.50, based on the prevailing five-day market prices of between RM2.45 and RM2.61 up to Nov 26.

E&O has ready funding of about RM213 million in the event all minority shareholders of E&O Property opted for the fixed combination option. Hence, it said the cash option was subject to the balance of funding available for the full share swap and after fixed combination options had been determined.

“In any event, the minimum amount for cash redemption will be RM875 for every 1,000 units of E&O Property share. Any balance not redeemed in cash shall be settled by way of share swap in a ratio of one E&O Property share to 1.1 E&O shares,” it said.

Meanwhile, E&O Property Development Bhd and the Lion group announced that they have kicked started their joint development of three blocks of 28-storey luxurious service apartments on the 1.67ha land at the former St Mary’s school site here.


Sime Darby targets 10% growth

KUALA LUMPUR: Sime Darby Bhd, formerly Synergy Drive Bhd, is confident of achieving a conservative 10% top and bottom line growth annually from 2008, said its president and group chief executive officer Datuk Seri Ahmad Zubir Murshid.

He said Sime Darby would be able to realise between RM400 million and RM500 million annually over the next three years from the synergies of merging Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd groups of companies.

Speaking to reporters after the launch of the company and the unveiling of its new corporate logo here yesterday, Zubir said Sime Darby was retained as the brand for the merged group as it was recognised globally and had equity value.

He said the enlarged entity would dispel the notion that it focused mainly on plantations and property, and demonstrate its leading positions in the other sectors it was involved in, namely energy and utilities, motor distributorship and heavy equipment.

Zubir said the much-debated Bakun dam project was a viable venture and would generate recurring income from 2013.

On financing the Bakun dam, he said it had various options and details would be revealed when negotiations with the government were concluded. On whether the dam project would drain its finances given the long gestation period, he said the group’s multiple core businesses would help sustain its operations as a whole.

“With the revenue and cash reserve we have, that will help mitigate some of the concerns. On top of that, we believe strongly that the integration of the plantations would generate more cash by improving our yields,” he said.

Asked of its cash reserve, he said: “We have always been conservative in terms of cash reserves, so I can only tell you that it is quite healthy.”

“We have been a very low gearing company; that is because when we invest, we look at criteria in investment. We have been very prudent investors.”

On its plans, he said Sime Darby would be investing in some of the projects in the Northern Corridor Economic Region (NCER) in line with its core business activities.

On whether it would form an alliance with Proton Holdings Bhd, Zubir said: “We are looking at the premium end in the motor business sector. This year alone we have done a lot of restructuring in our motor division (and) I believe we have turned around our motor division. So I don’t think we will take on anymore task at the moment.”

Asked to comment on analysts’ view that Sime Darby, not being a pure plantation player, would lower its valuation, Zubir said it was a conglomerate of multiple businesses where plantation accounted for 47% of total revenue.

“There is a potential of more than 50% that is non-plantation, and if the core value is considered, these products and businesses are strong in each of the sector. There are many conglomerates with multiple portfolios,” he said.

On its impending listing tomorrow, Zubir said the company would be able to make a strong comeback with investors’ support and positive market sentiment on Sime Darby.

“I look forward to the re-listing of the group. We have been off the radar screen for some time and definitely we are excited. We want to see where we are and see the confidence of the investors.”

To a question if Sime Darby would be spinning off some of its divisions, he said it was currently integrating the businesses with the next review in the year 2010, and that it depended on whether the divisions met their targets.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, who described the entity as a new Malaysian icon, launched the company and its logo.

“We are witnessing today the birth of a new corporate giant. The merged entity will not be starting from ground zero, but will emerge fully formed, strong and fighting on all fronts,” he said.


WCT Land 3Q profit up 40% to RM15.6million

KUALA LUMPUR: WCT Land Bhd, which could be taken private by its parent WCT Engineering Bhd, posted a 40% rise in net profit to RM15.59 million in its third quarter ended Sept 30, 2007, from RM11.17 million a year earlier last year due to higher progress billings from its Bandar Bukit Tinggi II and III projects.

WCT Land said yesterday revenue rose 66.84% to RM79.31 million from RM47.54 million a year earlier while earnings per share was 1.35 sen higher at 4.82 sen. It did not declare any dividend.

Net profit for the nine month period rose 42.36% to RM45.22 million from RM31.76 million, while revenue stood at RM209.38 million, or 17.68%, from RM177.92 million a year earlier.

“The group is confident of a better financial performance for the remaining period of the current financial year,” it said.

Analysts have said that the company, whose securities have been suspended pending a corporate announcement involving itself and WCT Engineering, could be taken private.


Higher plantation, property contributions boost Keck Seng 3Q profits

KUALA LUMPUR: Keck Seng (Malaysia) Bhd’s net profits for the third quarter ended Sept 30, 2007 nearly doubled to RM21.32 million from a year ago, on higher income from its property development and plantation business.

This brought net profits for the first nine months of the year to RM58.05 million, up 72% from the same period last year. The jump was partly due to higher dividend income and gains from quoted shares sold under a mandatory takeover offer in the second quarter, the company said in a filing to Bursa Malaysia yesterday. Earnings per share rose to 24.24 sen from 14.11 sen before.

Revenue for the nine months rose 34.5% to RM798.48 million from RM593.81 million before as the company recognised more income from property sales and its refined oil fetching higher prices.

The company expects its plantations segment to perform better in the fourth quarter. It also expects to maintain contributions from its property development, property investment and hotel segment in the current quarter ending December 31.

“Barring any unforeseen circumstances, the performance for 2007 should be better than the preceding year,” it added.

It did not recommend any dividend yesterday.


YTL Corp wins RM1billion property bid in Singapore

KUALA LUMPUR: YTL Corporation Bhd has won a S$435 million (RM1.02 billion) bid for the en bloc purchase of 50 high-end residential units of the Westwood apartments located on Singapore’s Orchard Boulevard.

The purchase, which is YTL Corp’s third land acquisition in Singapore in the last two years, is the largest residential collective sale transaction since the implementation of the new en-bloc legislation on Oct 4, it said in a statement yesterday.

YTL group managing director Tan Sri Francis Yeoh Sock Ping said: “This acquisition... is well in line with our wider strategy, focusing on upscale real estate in well-established markets, which enables us to employ our branding to enhance the value of these properties.”

The company said it would not assume any liabilities arising from the acquisition, as the purchase price would be funded from internally generated funds and bank borrowings.

“The effect on gearing will depend on the mix of internally generated funds and bank borrowings utilised to fund the acquisition, which has yet to be finalised at the current date,” it said, adding that the acquisition was expected to be completed in the next quarter.

“Besides geographical diversification and an increase in the group’s existing property development landbank portfolio in Singapore, the acquisition would enable the group to enhance its earnings potential from the high sale and rental rates expected from the renewed interest in the property sector in Singapore,” said YTL Corp.

The company said it would be able to leverage on the local market knowledge, expertise and resources available as it was currently involved in the Lakefront and Sandy Island residential development projects in Sentosa Cove, Singapore.

Meanwhile, Savills (Singapore) Pte Ltd managing director Michael Ng said recent sales of well-designed branded properties among high net-worth individuals reflected the positive sentiments of the property market in Singapore.

Citing Ritz-Carlton Residence as an example, Ng said they were sold for as high as S$5,000 per sq ft, a reflection that Singapore was primed for growth in the indulgent property sector.


Mah Sing secures another RM560m en bloc sales

KUALA LUMPUR: Mah Sing Group Bhd has secured a RM560.6 million double coup with en bloc sales of The Icon Jalan Tun Razak (East Wing) and The Icon Mont’ Kiara to a joint venture (JV) between Kuwait Finance House KSC (KFH) and Autron Corporation Ltd.

These are the second and third en-bloc sale within four months for Mah Sing group as it had earlier sealed a RM174.4 million deal with Koperasi Permodalan Felda for the sale of The Icon Jalan Tun Razak (West Wing) in July.

“With these deals in hand, the group’s commercial en-bloc sales are valued at RM734.9 million,” Mah Sing said in a statement yesterday.

The company said the group’s unbilled sales as at Sept 30, 2007 were RM517 million and together with the latest two en-bloc sales, it now had unbilled sales of over RM1 billion.

The latest sales were conducted by its wholly owned subsidiaries Star Residence Sdn Bhd and Maxim Heights Sdn Bhd to the JV company, Prompt Symphony Sdn Bhd, a special purpose vehicle formed by KFH and an Autron unit.

Pursuant to their JV agreement, KFH and Autron will subscribe up to 80% and 20% of Prompt Symphony, respectively.

KFH is listed on the Kuwait Stock Exchange, while Autron is listed on the stock exchanges of Singapore and Australia.

Mah Sing’s group managing director Datuk Seri Leong Hoy Kum said all three en-bloc commercial sales were concluded about one year from the group acquiring the land from the vendors and were in line with the group’s model of having a quick turnaround in order to achieve a high return on equity.

The group acquired the land for The Icon Jalan Tun Razak in October 2006 and The Icon Mont’ Kiara in February 2007.

Leong said the en-bloc sale was an endorsement of the company and a stamp of approval for the group’s achievements in property development.

“In view of our branding and track record of on-time delivery, investors also have confidence in the future potential and prospects that we offer in developing high value, high quality projects in strategic growth areas,” he said.

Leong said with interest in the commercial-retail segment stronger than ever, the group was well positioned to capitalise on the country’s strong commercial-retail prospects towards enhancing its earnings stream.

The company’s next two commercial developments, namely Southgate Commercial Centre in Kuala Lumpur and Southbay City in Penang, would be launched next year, with a total gross development value (GDV) of RM1.17 billion.

Leong said the group might also look at en bloc sales of these two development projects.


Better offer by E&O under latest revamp plan

Under a proposal to merge with listed property arm E&O Property Development Bhd, it offers options to cater to various minority shareholders' needs

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) seems to have crafted a more attractive deal in its second attempt to restructure the group's property business.

Under its proposal to merge with 63%-owned listed property arm E&O Property Development Bhd (E&O Prop), it is offering options to cater to various minority shareholders' needs.

Datuk Terry Tham Ka Hon (left) and E&O executive director Eric Chan at the briefing

“We do learn from our previous experience, for example, issues like what are the things that minority shareholders want,” said E&O managing director Datuk Terry Tham Ka Hon.

“We failed the previous time maybe because it was a buyout,” he told StarBiz on Tuesday after announcing the proposed merger.

E&O Tuesday proposed a merger with E&O Prop via share swap at the ratio of 1,000 E&O Prop shares for 1,100 E&O shares.

E&O Prop's minority shareholders can also elect to receive a combination of cash and shares for their E&O Prop holding, on the basis of 715 E&O shares and RM875 cash for every 1,000 E&O Prop shares.

The total cash payment, assuming full acceptance via this method, is estimated at RM213.3mil.

Full cash settlement would be offered to E&O Prop minority shareholders from the “excess cash” available after the first two options, and the final amount “will be determined by the board as it may in its absolute discretion think expedient and in the best interest of the company”.

Under Section 176 of the Companies Act, this exercise will go through if 50% of its shareholders, and 75% in value of shareholding of those present during the voting, accept the proposals.

Tham, who holds 11.2% direct and 27.7% indirect stakes in E&O, said he believed it was a fair deal for the minority shareholders, as the three options offered would cater to different individual shareholders' needs.

And the proposed merger would be good for the group's long-term prospects in property development.

In May 2005, E&O made a voluntary general offer (VGO) to buy out all E&O Prop shares and warrants it did not own at 65 sen per share and 10 sen per warrant.

The deal fell through when E&O Prop minority shareholders voted against it at the EGM.

Since then, share prices of both E&O and E&O Prop have climbed substantially. So have their earnings.

Surging from below RM1 in May 2005, E&O hit a high of RM3.18 in May this year before it lost its footing amid the prevailing weak sentiment. The stock finished at RM2.41 yesterday, up one sen.

E&O Prop, formerly Kamunting Bhd, soared to a 10-year high of RM4.20 in June this year. The counter rose 11 sen, or 4.5%, to close at RM2.56 yesterday.

Tham stressed that the proposal “was a merger, not so much a privatisation exercise”.

“This is not a similar deal (compared with the proposed VGO in 2005).

“The (current) proposal gives E&O Prop minority shareholders the opportunity to continue owning shares in a listed entity, which is the parent company E&O,” he said.

An artist’s impression of Marina & Retail at Sri Tanjung Pinang in Penang to be developed by E&O Prop. The company contributes over 90% to parent E&O’s revenue

“Those who think that E&O Prop shares have higher value should swap their shares (for E&O shares) to see the share price appreciate further.

“Whereas the cash offer is for minority shareholders who want an immediate exit,” Tham said.

On the rationale for the proposal, he said the companies were “mirror images” of each other, with E&O reflecting E&O Prop's performance. E&O Prop is the major income earner for E&O, contributing over 90% of its revenue.

The corporate exercise would increase E&O share liquidity and more importantly, align shareholders' interest in a single listed entity, Tham added.

When the first proposal was mooted over two years ago, the Minority Shareholder Watchdog Group (MSWG) urged shareholders not to accept the raw deal. It said then the offer price of 65 sen was unfair to minority shareholders.

MSWG, however, has a different view on the latest proposal.

Chief executive officer Abdul Wahab Jaafar Sidek told StarBiz that the new deal looked positive and more favourable compared with the VGO.

»The deal appears fair for minority shareholders« ABDUL WAHAB JAAFAR SIDEK

“The deal appears fair for minority shareholders, especially in the current rather weak market condition,” he added.

Analysts concurred that the proposal showed better consideration for minority shareholders' interest compared with the previous VGO. They generally opined that the restructuring was a sensible move.

Deutsche Bank said the merger would transform E&O into a direct player in the property development and hospitality business, from merely being an investment holding company now. E&O's share price would also command better valuation.

Credit Suisse, which initiated coverage on E&O Prop two days ago, said in its research note the proposed merger would remove the conflict of interest and related party transactions between the two companies.

It said the cash offer was not attractive as the offer price of RM2.50 per share was only 2% premium to the share price. However, the cash option would provide support to the share price at that level.

By The Star (by

Worldwide expects to sell all units in latest phase

SHAH ALAM: Worldwide Holdings Bhd aims to sell all 38 units offered under the latest phase of its Subang Bestari project within six months of its January launch.

To be completed by April 2008, this phase comprises 20 double-storey semi-detached houses and 18 double-storey detached units with a total gross development value (GDV) of RM32mil.

The 500-acre leasehold Subang Bestari is Worldwide's mixed development flagship project at Seksyen U5, Shah Alam. Group managing director Datuk Ibrahim Md Yusof said Subang Bestari was strategically located and would appeal to potential buyers.

“Subang Bistari is located in one of the most developed areas in the Klang Valley. With the opening of the Kota Damansara interchange and the link to Damansara-Puchong Highway via Mutiara Damansara, access is easy,” he told a press briefing yesterday.

“Subang Bestari is also close to the Subang airport. The decision to house the Malaysia International Aerospace Centre (MIAC) there and the possibility of it becoming a low-cost carrier terminal some day would benefit the residents,” he said.

He also said houses in Subang Bestari were generally cheaper compared with similar homes in the surrounding areas.

According to Worldwide head of marketing Abd Razak Ishak, the new houses would be priced from RM800,000 to RM1.2mil and targeted at buyers from the surrounding areas who wanted to upgrade.

Construction of the project's next phase, comprising 51 bungalows with a GDV of RM60mil, will begin by end-2008.

Asked about Perbadanan Kemajuan Negeri Selangor's move to privatise Worldwide, Ibrahim said the exercise was “ongoing” and declined further comment.

By The Star (by

Sime moves into premium high-end properties

KUALA LUMPUR: Sime Darby Bhd has earmarked 29.14ha near Bukit Kiara to be developed into an exclusive high-end premium residential property next year.

Dubbed “Hyde Park of Kuala Lumpur”, the yet unnamed project will comprise condominiums, bungalows and villas surrounded by greenery – a forest reserve and a 36-hole golf course. A bungalow unit there would cost a staggering RM20mil or more.

President and group chief executive Datuk Ahmad Zubir Murshid told StarBiz that the four-phase project, which would take about eight years to complete, would signify Sime Darby's bold move into the very high-end residential property market.

“We still have not decided on the total gross development value of this project but it is safe to say that we will try to attain a high level to feature a truly five-star project under Sime Darby’s property division,” he said.

Zubir said Synergy Drive was also seeking approval from authorities to locate its new corporate headquarters in the area, which will blend nicely with the group’s sustainable development tagline.

The Sime Darby group has a good reputation as a township developer in the Klang Valley.

Townships completed by the group include Sime UEP Subang Jaya, Putra Heights, Ara Damansara, Bukit Jelutong, Bukit Subang and Denai Alam.

Zubir said: “The merger has provided us with potential land-bank of 37,000 acres fit for property projects.”

Given its size, he said Sime Darby had the opportunity to seriously embark on community township developments compared with just “product” developments previously.

Under property, he said: “We have outlined various strategies with teams looking at high-end exclusive property projects, townships as well as brands for the overseas market.”

On another note, Zubir said Sime Darby did not intend to fully develop its land-bank within the next 10 to 15 years.

“Not all (the land-bank) will be converted into property projects. Some will remain as oil palm plantations, given the current bullish crude palm oil prices,” he added.

Zubir said Sime Darby was adopting the US-based Wal-Mart's marketing strategy to restrategise, consolidate as well as offer better concept, products, design and branding in its property business.

“Part of Wal-Mart’s expansion and increasing drive for profits was via its famous strategy of consolidation,” he added.

According to Zubir, post-listing Sime Darby's profits in the next two to three years would be driven by its plantation and property businesses.

By The Star (by

Lion, E&O Property team up for apartment project

E&O Property Development Bhd and the Lion Group will jointly develop three blocks of 28-storey service apartments in Jalan Tengah/Jalan P. Ramlee, Kuala Lumpur.

The development order was received by the two parties in May this year. The project is to be completed by mid-2008.

Total net area for the development is estimated at 940,000 sq ft, with about 660 units of sizeable service apartments.

The area will also have a retail and food and beverage component spanning 35,000 sq ft.

"This partnership truly provides an excellent opportunity for us to combine our expertise and resources, especially in development in prime urban centres, which continuously attracts buyers and investors due to its attractive capital appreciation and rental yields," E&O Property managing director Datuk Terry Tham Ka Hon said in a statement yesterday.

Lion Group's property division executive director Lionel Cheng said the group is confident of the potential of the site given its strategic location.

The project will be undertaken by a joint-venture company, Mergexcel Property Development Sdn Bhd.

E&O Property owns a 50 per cent stake in Mergexcel through its subsidiary, while Lion Group's subsidiary owns the rest.

In May last year, Mergexcel bought 1.65ha freehold land from The Synod of Diocese of West Malaysia.

The Synod was the original owner of the St Mary's school and the land on which it sits. St Mary's school will be relocated to Selayang.

By New Straits Times

E&O Property minorities advised to accept parent firm's share offer

Minority shareholders of E&O Property Development Bhd (EOPD) should accept a share offer by parent company Eastern & Oriental Bhd (E&O) as the cash offer is too low, analysts said.

Construction and property group E&O, which holds 63 per cent of EOPD, has offered to take EOPD private under a share swap.

It offered to exchange new E&O shares for the shares that make up 37 per cent of EOPD. This is on a basis of 1.1 new E&O share for every EOPD share.

In addition, minorities of EOPD can elect to get part cash. There is also a cash offer of RM2.50 a share, analysts said, citing company management.

The offer price of RM2.50 is below most analysts' expectations. Based on data compiled by Bloomberg, Credit Suisse and UOB Kay Hian value EOPD at RM4.50 and RM7.80 respectively.

At RM2.50, it also represents a mere two per cent premium to its price when suspended on Tuesday.

"We believe that the cash option is not attractive. Nevertheless, the cash option provides downside protection (in the current volatile market environment). We would advise investors to accept the share swap option instead," Credit Suisse said in its report.

The deal is due to be completed in the second quarter of next year, followed by the delisting of EOPD.

"We believe the proposal is positive for E&O as the share exchange is attractively priced, should reduce the holding company discount (and) improve liquidity," added DBS Vickers in its research notes.

EOPD shares rose as much as 10 per cent, or 25 sen, to RM2.70 before closing at RM2.56 yesterday. The stock has gained 28 per cent so far this year. E&O shares closed one sen higher at RM2.41 yesterday.

By New Straits Times (by Goh Thean Eu)

RM165million project to boost Merge earnings

Property developer Merge Housing Bhd expects future earnings to come from its projects in Mont' Kiara and Jalan Puchong, which have a total gross development value (GDV) of RM165 million.

LEE: Company intends to sign more deals to increase the worth of its developments

It is building bungalows in a gated community in Mont' Kiara.

Managing director Lee Kuang Chong said Merge Housing will hand over 16 bungalows to the landowner, comprising two families, by January.

In total, there are 39 lots spread across 3.85ha with a minimum GDV of RM75 million.

"For 2008, we are targeting to sell the remaining 23 plots of land. We are having initial talks with interested parties who want to make a bulk purchase, and we are targeting RM5 million to RM7 million per unit if we build the bungalows," Lee told reporters after the company's annual general meeting yesterday.

As for the development along Jalan Puchong, Merge Housing will build a 308-unit condominium with a GDV of RM90 million.

"We are in the midst of submitting the building approval to DBKL (Kuala Lumpur municipal), and target to launch by end-2008," he said.

Merge Housing also has two commercial plots of 20,000 sq ft and 19,000 sq ft respectively along Jalan Puchong.

"We've had people approach us to build an exhibition centre, furniture showrooms and mini-markets. We don't want to divide the parcel into shoplots," he said.

Aside from these two projects, it also has existing projects in Puchong, Subang 2 and Bukit Jelutong, Shah Alam.

The 20.25ha Puchong project is in the planning stages and the type of development has yet to be determined.

"In Subang 2 we have a balance of 81ha, and we are in the midst of getting a university college to set up there," Lee said, declining to provide a name.

He said that since the population has matured in Subang 2, Merge Housing is in talks to attract hypermarkets to set up there.

"Our strategy is to hold the land until the value can be fully realised," he said.

Lee added that Tesco hypermarket will be venturing into its Bukit Jelutong commercial development as an anchor tenant.

He also disclosed that Merge Housing will move away from being a sole developer and branch into realty.

"We are looking at signing more deals to increase the worth of our developments for the next one to two years," he said.

By New Straits Times (by Jeeva Arulampalam)

Wednesday, November 28, 2007

2nd Asian BioManufacturing Conference 2007

The conference will address scientific / technical matters such as expression systems, upstream and downstream processing, bio-product characterisation, formulation, fill & finishing of biologics and other key drivers, ancillary and supporting issues which are important for the biomanufacturing industry.

Venue: Sheraton Imperial Hotel, Kuala Lumpur
Date: 3 - 4 December 2007
Tel: +606-799 6661
Fax: +606-799 7615

Please visit the website for more information

PC FAIR 2007 - Malaysia Largest ICT Fair

Malaysia Largest ICT Fair is back with even more irresistible gadgets !

The place to find your most-wanted tech products and great deals in town.

Call PIKOM at 03-7955 2922 or email for updates.

See you there!
Admission: FREE
Time: 11am - 9pm
Date: 30 Nov - 2 Dec 2007
> Penang International Sports Arena (PISA), Penang Island
>Sabah Trade Centre, Kota Kinabalu
>Terminal One, Seremban
>Berjaya Megamall, Kuantan

Date: 7 - 9 Dec 2007
> KL Convention Centre @KLCC
> Mahkota Parade, Melaka
> Central Square, Sungai Petani

Date: 14 -16 Dec 2007
> Persada Johor International Convention Centre, Johor Bahru
> Kemaman Centre Point, Kemaman
> Dewan 2020, Kangar
> Dewan Suarah Bintulu, Sarawak
*New Dates*

Please check the website before any changes, thank you

Central Malaysian Properties embarks on RM 2.7 billion project in IDR

It will rehabilitate Lido Beach and give JB a facelift

JOHOR BARU: Central Malaysian Properties Sdn Bhd (CMP) will develop Lido Boulevard, a RM 2.7 billion integrated waterfront city, in the Iskandar Development Region (IDR).

Managing Director Datuk Chan Tien Ghee said work on the project, located on a 49.37ha beach front site, would start in March and was expected to be completed by 2016.

The project, to be developed in phases, will stretch 2.4km along Lido Beach - from the now defunct Lot 1 shopping mall to the Harbour Master office.

"Lido Boulevard will completely rehabilitate Lido Beach and give Johor Baru a facelift," Chan said at the launch of the project by Johor Menteri Besar Datuk Abdul Ghani Othman yesterday.

The flagship project by CMP, a company linked to Tan Sri Vincent Tan Chee Yioun, is a joint venture between CMP, the State Secretary and landowner Kumpulan Prasarana Rakyat Johor.

Touted as the "Garden City of the South", the project will include landscaped gardens, water fountains and park-like facilities.

Chan said the project would be financed via shareholders' funds and internal funding and the company would start sales early next year.

The development will consist of four main components - luxury condominiums, waterfront office suites, a hotel and a shopping mall.

There will be eight blocks of high-end condominiums of between 18 and 26 floors each, offering 914 units on a 1,052ha site.

Another eight blocks of waterfront office suites of between six and eight floors each, a 296-room hotel-cum-service residences and a three-storey waterfront retail complex are also in the plan.

Incorporated within the mall will be an international-sized ice skating rink and 32-lane bowling alley.

"One of the main attractions will be the 4,645.15 sq m Indoor Snow Park with activities like ice sliders, tobogganing and many more," Chan said.

He said RM150mil would be spent to upgrade Jalan Abu Bakar, fronting the seafront project, including widening the existing roads with flyovers and pedestrian bridges.

He said CMP would start a RM1mil trust fund, which would be administered by an independent board of trustees that would address social and environmental issues arising from the development.

By The Star (by Zazali Musa)

Another developer to be taken private?

PETALING JAYA: Trading in WCT Engineering Bhd and WCT Land Bhd shares was suspended yesterday pending an announcement, which WCT Engineering said would involve a major transaction with its 66%-owned listed property arm WCT Land.

According to analysts, WCT Engineering could be looking to privatise WCT Land or sell a stake to a group of Middle Eastern investors.

If this is a privatisation exercise, WCT Land would be the third listed property firm to be taken private this year, after Petaling Garden Bhd, which was de-listed on June 26 and Island & Peninsular Bhd, which was de-listed on July 13. Both were taken private by Government investment arm Permodalan Nasional Bhd.

Another property company, Sime UEP Properties Bhd, a listed subsidiary of Sime Darby Bhd, was injected into Synergy Drive Bhd, which is due to list on Friday.

WCT Land shares were last traded at RM2.01 and WCT Engineering shares at RM7.95.

By The Star

Mah Sing sells two properties for RM560 million

KUALA LUMPUR: Mah Sing Group Bhd has sold its two new commercial properties in Kuala Lumpur for RM560.6mil to Prompt Symphony Sdn Bhd, a 80:20 special purpose vehicle set up by Kuwait Finance House and Autron Corp Ltd to acquire the properties.

The sale of The Icon Jalan Tun Razak (East Wing) and The Icon Mont' Kiara, via wholly owned subsidiaries Star Residence Sdn Bhd and Maxim Heights Sdn Bhd, was for about RM237mil and RM285.4mil respectively, a company statement said yesterday.

The group has also signed a “put and call agreement” to sell not less than 301 parking bays in The Icon Jalan Tun Razak for RM18.15mil and 637 bays in The Icon Mont' Kiara for RM19.9mil.

“This is the first direct en bloc purchase by Kuwait Finance House in Malaysia,” the statement said.

Group managing director Datuk Seri Leong Hoy Kum said the sale was an endorsement of Mah Sing and a stamp of approval for the group's achievements in property development.

Datuk Seri Leong Hoy Kum (left) and Autron CEO Eric Lim Kheng

“In view of our branding and track record for on-time delivery, investors also have confidence in the potential and prospects that we offer in developing high value, high quality projects in strategic growth areas.

“These are the second and third sales within four months, boosting the group's commercial en bloc sales to RM734.9mil,” he said.

In July, Mah Sing sold The Icon Jalan Tun Razak (West Wing) to Koperasi Permodalan Felda for RM174.4mil.

The group's remaining gross development value (GDV) of RM3.04bil and unbilled sales of RM1.08bil represented a total GDV of RM4.12bil that will ensure earnings visibility for seven years.

Leong said Mah Sing would seek further opportunities to sell en bloc its two other commercial projects – Southgate Commercial Centre in Kuala Lumpur and Southbay City @ Southbay, Batu Maung, in Penang.

The two projects, with GDV of RM256mil and RM911mil respectively, will be launched in the first half next year.

An analyst at SJ Securities said the latest sale would bring in substantial “quick cash” to Mah Sing as Prompt Symphony would be paying 80% of the purchase price upon the signing of the sale and purchase agreement, compared with the usual payment of 10%.

He said the cash would provide working capital to the group for its expansion overseas, noting that the group was looking at Ho Chi Minh City and Hanoi in Vietnam.

In addition, the deal with Kuwait Finance House would open up other opportunities from the cash-rich group in the future, the analyst said.

CIMB Investment Bank analyst Terence Wong said the property sale would have substantial impact on the group's earnings, given the premium price.

Meanwhile, Mah Sing posted a 28.1% increase in net profit to RM61.8mil for the nine months ended Sept 30.

By The Star (by Shannen Wong)

Foreigners eye local buildings

There is strong take up in commercial property

The en bloc sale of Mah Sing Group Bhd’s two commercial buildings in Kuala Lumpur for RM560.6mil to Prompt Symphony Sdn Bhd, a special purpose vehicle set up by Kuwait Finance House and a unit of Singapore-based Autron Corp Ltd, shows strong foreign institutional investor interest in Malaysian commercial property.

The Icon Jalan Tun Razak (East Wing), a 17-storey Grade A office block with net lettable area of 263,435 sq ft, was sold for RM237mil, or RM969 per sq ft, while The Icon Mont’ Kiara with 27 levels of offices and a retail podium totalling 380,510 sq ft, was priced at RM285.4mil, or RM802 per sq ft.

Kuwait Finance House is listed on the Kuwait Stock Exchange (KSE) with assets totalling 6.314 billion dinar as of Dec 31, 2006. Autron is listed on the stock exchanges of Singapore and Australia.

Before this, there had been several major transactions in the country involving foreign investors. Landmark office transactions included Macquarie Global’s purchase of Empire Tower, Crown Princess Hotel and City Square Shopping Centre in Kuala Lumpur for RM680mil, Injaz Mena Investment’s purchase of Menara ING at RM495 per sq ft and Injaz AsiaEquity’s purchase of Kenanga International at RM555 per sq ft.

Kuwait Finance House (M) Bhd (KFH) is also believed to be actively scouting for real estate investment opportunities in Malaysia. In early November, the group said it would team up with Prestige Scale Sdn Bhd to fund the RM577mil en bloc purchase of Glomac Tower in Kuala Lumpur.

The 40-storey Class A office block will be developed by Glomac Al Batha Sdn Bhd, a 51:49 joint venture between Glomac Bhd and Al Batha Group from the United Arab Emirates.

According to Zerin Properties chief executive officer Previn Singhe, foreign property funds, private equity funds and pension funds considered themselves “under exposed” to South-East Asian real estate and were looking to expand their investment exposure.

“Malaysia, with its transparent land and real estate laws, good value proposition and upside potential, stands out as a strong candidate to attract foreign funds. Many foreign investors are attracted to the country as a highly lucrative option for its well-priced property, strong economy for sustainable growth and good yields over the medium- to long-term,” Previn said.

Interest is also picking up for good retail developments, hotels and high-end residential projects, especially luxury condominiums.

International investment in the property sector is expected to grow at unprecedented levels following the Government’s liberalisation of foreign investment committee guidelines for foreign purchasers and the joint public-private sector initiatives to market Malaysia’s real estate globally.

By The Star (by Angie Ng)

E&O to merge with property arm

E&O Property minority shareholders have three options

Eastern & Oriental Bhd (E&O) has proposed to merge with its 63%-owned subsidiary E&O Property Development Bhd (E&O Prop) in a share-swap deal valued at RM609mil.

“The streamlining of E&O and E&O Prop into a single listed entity, as opposed to current two-tier listing, will provide a strengthened base for sustainable value creation and long-term growth for the entire group,'' the company said in a statement to Bursa Malaysia yesterday.

Under the scheme of arrangement submitted by AmInvestment Bank Bhd yesterday, E&O will offer E&O Prop's minority shareholders 1,100 E&O shares for every 1,000 shares held in E&O Prop.

The new E&O shares will be issued for about RM2.27 each, involving the issuance of 268.2 million new shares.

Trading in the shares in both E&O and its unit was suspended yesterday at RM2.40 and RM2.45 respectively.

The latest proposal by E&O is the Penang-based investment holding and hotel operator's second attempt in less than three years to delist its property development arm.

In May 2005, E&O made a voluntary general offer for E&O Prop, but the plan to de-list the company was rejected by minority shareholders later that year.

Other than the share-swap proposal, E&O Prop's minority shareholders are also given two other options that involve cash payments for their holdings.

“The company will make available/source for a cash pool of approximately RM213mil,'' and for the purpose “a notional amount of RM2,500 per 1,000 E&O Prop shares will be used,” E&O said.

E&O Prop's minority shareholders can also elect to receive a combination of cash and shares for their E&O Prop holding, on the basis of 715 E&O shares and RM875 cash for every 1,000 E&O Prop shares.

The total cash payment, assuming full acceptance via this method, would amount to RM213.34mil.

Full cash settlement would be offered to E&O Prop minority shareholder from the “excess cash” available after the two options, and the final amount “will be determined by the board as it may in its absolute discretion think expedient and in the best interest of the company”.

The E&O board, however, was of the view that the share-exchange offer was in the best interest of E&O Prop shareholders as it would allow the enlarged group to have a cash reserve of “over RM200mil” which it could use to expand its real estate business.

E&O Prop has appointed OSK Investment Bank as independent adviser for its minority shareholders for the proposed share swap.

Meanwhile, E&O and its property arm said in separate announcements yesterday that they had recorded improved performance for their second quarter ended Sept 30.

E&O's net profit for the three months swelled 49% to RM14.72mil against RM9.9mil a year earlier, while revenue rose to RM168.5mil from RM121.5mil.

Its net profit for the six months was RM30mil versus RM20mil previously. E&O Prop's net profit climbed 19% for the second quarter to RM24.5mil against RM20.6mil a year earlier.

The half-year net earnings shot to up RM60mil, or 9.14 sen per share, compared with RM40.9mil, or seven sen per share, in the previous corresponding period.

By The Star (By Izwan Idris)