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Tuesday, October 30, 2007

SP Setia to lease 3.92ha JB land to Tesco

KUALA LUMPUR: SP Setia Bhd has entered into a conditional lease agreement with Tesco Stores (Malaysia) Sdn Bhd to lease a 3.92ha parcel of land in Johor Bahru to the hypermarket for a fixed term of 30 years.

In a statement yesterday, SP Setia said the land, located in the Bukit Indah Johor Township, was part of a 12ha master land belonging to its subsidiary Bukit Indah Johor Sdn Bhd. It would construct a building with a gross built-up area of 233.578.8 sq ft for Tesco to operate its business.

“The land is a part of a larger parcel of commercial land owned by Bukit Indah Johor within the 10 year-old mixed residential township. Given the prime location of the said land within Bandar Nusajaya, the lease is in line with the group’s strategy to further diversify its earnings base to include investment properties with attractive rental yields in strategic locations,” it said.

It added that the lease was expected to provide stable recurring income to complement its profits from property development.

The presence of Tesco would greatly improve the quality of the township’s overall amenities, while increased vibrancy and traffic flow into the township would increase the value of its 195.5ha undeveloped landbank there, it said.

“The lease is also anticipated to improve the attractiveness of Setia Eco Gardens, the proposed 383.6ha township, which is located only a mere 5km from the said land,” it added.


Residential property investment: Is there more upside?


PETALING JAYA: The party has just begun. This seems to be the common sentiment shared by some respected members of the property industry at The Edge Investment Forum on Real Estate 2007 last Saturday when asked if there was any more upside to residential property investment in Malaysia.

The panel discussion on whether Malaysian real estate is underpriced, comprising Datuk Richard Fong, executive vice chairman of Glomac Bhd and current Fiabci Malaysia president; Lai Voon Hon, president and CEO of Ireka Development Management and Previndran Singhe, CEO of Zerin Properties all agreed that the Malaysian property market has at least another five good years. They also concurred that the exemption of the Real Property Gains Tax (RPGT) has also helped boost the market.

Moderated by Kumar Tharmalingam, the panel discussed three issues, namely: property prices in the region and whether there was any more upside for Malaysia; how long the party will last; and their three hot property locations.

Glomac’s Fong kicked off the discussion by comparing prices of luxury highrises with Singapore’s market, saying that our prices were “dirt-cheap” as it costs eight to 10 times more for luxury homes in Singapore. He added that Malaysian properties offered world-class standards as many developers used foreign architects to design their projects.

“The foreigners are buying because it is so cheap. There is no downside. We can only go up,” he said. Fong picked KLCC, Bangsar/Damansara Heights and the Hartamas/Mont’Kiara area as his hotspots.

From left: Previndran, Fong, Kumar and Lai. Photo by Kenny Yap

Meanwhile, Ireka’s Lai said several factors are driving Malaysia’s current property market. Among them are the capital values we offer, rental yields and capital gain. He quoted some examples of Ireka’s projects in the Mont’Kiara vicinity stating that they enjoyed between 18% to 23% return of equity per annum.

Lai felt there was still room for yield compression and that foreigners are confident investing in Malaysia. “Development costs are going up and don’t expect them to go any cheaper. Our prices are at rock bottom already,” he said.

His hot three locations were KLCC, Mont’Kiara and the Jalan U Thant/Embassy Row area in KL. Lai also pointed out three other locations to watch, namely Langkawi, Sabah and the east coast.

The crowd during break time at The Edge Investment Forum on Real Estate 2007. Photo by Kenny Yap

Zerin Properties’ Previndran concurred with Lai on Sabah. “One of the latest properties called Kudat Riviera was launched in the UK only and is sold out,” shared Previndran. He said Malaysia was attracting a lot of foreign interest because of our political stability and real estate transparency.

“The only reason Singapore is hotter right now is because our transactions take longer to process,” said Previndran, adding that KL could be the next property play after Singapore.

Previndran picked KLCC, Mont’Kiara and Ampang Hilir as his Klang Valley hotspots. His other hot locations include Penang and the Iskandar Development Region (IDR).

The other speakers at the forum were Allan Soo, managing director of Regroup Associates; Ang Kok Heng, chief investment officer of Phillip Capital Management Sdn Bhd; Ho Chin Soon, director of Ho Chin Soon Research Sdn Bhd; Datuk Michael Yam, managing director of Sunrise Bhd and Datuk Alan Tong, chairman of Bukit Kiara Properties Sdn Bhd.

Close to 500 people thronged the forum held at The Eastin Hotel in Petaling Jaya to listen to the speakers. The inaugural event was organised by The Edge.

Market overview


The Edge Investment Forum on Real Estate 2007 opened with Allan Soo of Regroup Associates Sdn Bhd giving an overview of the local and regional residential property markets.

Soo presented a macro view of the region, making a comparative study of pricing and rental of properties in various markets like Singapore, Shanghai, Bangkok and Hong Kong.

He said Malaysian properties continued to enjoy good yields compared with places like Singapore where yields were at 2.55%, and Shanghai, where values were up but rentals were falling.

“The boom in Malaysia only started about five or six years ago, driven by rent and sale. However, investors are less concerned about yields at the moment and I feel it is a capital-led market rather than a yield market,” he said.

Soo observed that price trends in the country have grown fast in the past few years and jumped tremendously this year, citing transactions of high-end condominiums in the Kuala Lumpur city centre where prices have breached the RM2,000 psf mark. He also named Kenny Hills, Bangsar and Damansara Heights as other areas to look out for in the Klang Valley.

Outside the Klang Valley, Soo picked Langkawi as an increasing favourite among foreigners buying holiday homes.

“Although there appears to be some looming problems with the subprime crisis, Malaysia is still relatively very cheap. I think the market will still be good for the next two years or so,” said Soo, adding that it should do better with the Iskandar Development Region and strong foreign direct investments due to the exemption of the Real Property Gains Tax.

Property hot spots


“The new real estate mantra should be location, timing and branding,” Ho Chin Soon told The Edge Investment Forum on Real Estate 2007.

In terms of location, Ho said the Klang Valley remains the centre of gravity and buyers should concentrate on the first and second-tier growth areas. The first tier is a 15km radius from the centre while the second tier is the next 25km.

“One of the things to look out for when buying property is whether it is easily accessible to highways,” said Ho. For him, Petaling Jaya remained a favourite area for landed properties while the golden triangle and Mont’Kiara are hot spots for highrises.

In his paper titled “Property hot spots: IDR; NCER or Klang Valley? Where in the Klang Valley?” Ho said the IDR is being used as a test bed by the government.

“They have begun to liberalise policies and we will have to wait and see how this takes effect,” he said.

On the NCER, Ho added, Penang is attracting a lot of attention from the Malaysia My Second Home programme and projects like the second bridge and monorail will only augur well for the northern state.

Ho said 2005/2006 was a good time to invest in property but felt the market would remain good for another two to three years. “I am not saying it (the downturn) will happen in 2010 but if the (property) cycle repeats itself, than it will be about another three years… (before it turns),” he explained.

“Currently, I think the market is still stable and it is still a good time to buy,” Ho said, adding these words of caution: “Make sure you buy from a branded developer!”

Aeon purchases land from SP Setia

By New Straits Times

AEON Co (M) Bhd has signed a sale and purchase agreement with SP Setia Bhd's subsidiary Bukit Indah (Johor) Sdn Bhd to acquire a 15.2ha land in Pulai, Johor for RM106.97 million. Aeon, which operates Jusco stores in Malaysia, plans to build a shopping centre on the purchased land. The land is located within the Bukit Indah Johor township.

Zecon plans RM2b development in Sarawak

By New Straits Times

SECOND-board listed Zecon Bhd plans to develop over RM2 billion worth of residential and township development on an 800ha land not far from Kuching in Sarawak.

The company's subsidiary, Zecon Land Sdn Bhd, has received a provisional approval from Sarawak state planning authority for the development of the land at Semenanjung Demak, about 6km from Kuching.

The company will build more than 4,000 low- to medium-cost terrace houses and related infrastructure for Syarikat Perumahan Negara Bhd (SPNB) on a 200ha of the land, which is expected to cost about RM613.9 million.

The development on the remaining 600ha of land will include a township, comprising commercial, office and residential properties, with a gross development value of about RM1.6 billion.

Zecon group managing director and chief executive officer Datuk Zainal Abidin Ahmad said the projects will unlock the value of the group's land and accelerate revenue contribution from its construction division.

"With a development of this size and the group's commitment to deliver good quality properties, we are looking into tying up with other established property developers in Peninsular Malaysia to jointly develop the 600ha land," Zainal Abidin said in a statement released in Kuala Lumpur yesterday.

Zecon is optimistic that the SPNB project, which is set to start by year-end, would contribute positively to the group's construction division in the next financial year.

SPNB is undertaking the sale and marketing initiatives for the affordable housing project, while Zecon will be the contractor to complete the project in three years.

Zainal Abidin said site clearance and earthworks have already commenced.

Zecon and its group of companies are a leading integrated construction and infrastructure group. The group's principal activities include foundation engineering, civil engineering, building works, construction of highway and water infrastructure, property development, and toll concession.

Low-cost homes for PJ squatters

By The Star

ALL primary occupants squatting on government land at Kampung Micheal Chen, Kampung Desa MB and Kampung Seri Setia will be offered houses at a low-cost project near Jalan SS 9A/14, Petaling Jaya.

Kampung Tunku state assemblyman Datuk Dr Wong Sai Hou, who announced this recently, said members of the squatters’ extended families were also eligible to apply for the low-cost units.

Dr Wong: Preliminary work on the project has already begun.
Wong said the happy arrangement was reached after much negotiation and discussion between the residents and the Petaling Jaya City Council (MBPJ) over a five-year period.

“Credit must also go to PJ Utara MP Datin Paduka Chew Mei Fun, who had worked tirelessly with me to ensure that the occupants of government land at Kampung Michael Chen, especially, are given a fair and equitable deal,” he said.

According to Wong, the authorities have instructed the developer Taipan Focus Sdn Bhd to proceed with the signing of the sales and purchase agreements by next week, with the aim of completing the low-cost project by mid-2010.

“We believe that this date is achievable because all approvals and permits to start work have been given as at Oct 20, and preliminary work on the project has already begun,” he said.

All occupants of Kampung Micheal Chen, Kampung Desa MB and Kampung Seri Setia, who have been duly verified and registered by the MBPJ as squatters, are advised to call Wong at 03-7875 9493 or the developer’s office (03-3371 6010) if they do not receive any offer to execute the sales and purchase agreement by Nov 7.

Zecon gets nod for RM614mil project

By The Star

KUCHING: Zecon Bhd has obtained approval from the Sarawak authorities for a RM613.9mil property development project in Semenanjung Demak near here.

Group managing director Datuk Zainal Abidin Ahmad said the company was the turnkey contractor for 4,166 terrace houses in the proposed Petra Indah project for Syarikat Perumahan Negara Bhd (SPNB).

“Earthworks have started and the project is expected to be completed in three years,” he told StarBiz.

Petra Indah will have low and medium-cost houses on 202ha about 6km from the city centre. Zecon had earlier sold the plot, which was part of 808ha it owned, to SPNB.

Zainal said Zecon was in talks with several big-time developers in the peninsula to jointly develop the remaining 606ha into an eco-park township. He said the company expected to conclude negotiations in two months.

“The proposed eco-park township will feature medium to high-end bungalows and houses with low density. The proposed greenery development, planned for a 15-year period, will have an estimated gross development value of RM1.6bil,” he added.

Zainal said a bridge would be built across the Santubong River to link the township.

On Zecon’s Vista Tunku development in Petra Jaya here, he said the proposed 61 shophouses could be completed next year.

Zainal said the company had tendered for two other water-related jobs, the proposed Triang dam and a water pipeline project in Negri Sembilan, where it was awarded a RM77mil water works project last week. The contract involves the construction of the Petaseh intake pumping station, an access road and associated mechanical and engineering works.

The project is expected to start in two weeks for completion in 32 months. Three months earlier, Zecon won a RM125mil contract from the Negri Sembilan Water Works Department to build the proposed Triang transfer tunnel.

Zecon, a leading integrated engineering and construction company, had recently completed the RM750mil permanent campus for Universiti Malaysia Sarawak in Samarahan near here.

Fiabci awards galore

By The Star

About 1,300 guests at the 15th International Real Estate Federation (Fiabci) Malaysia Property Award held last Saturday observed a minute of silence for the passing of Genting Group founder Tan Sri Lim Goh Tong.

The late Lim was awarded the “Property Man of the Year” by FIABCI in 2002.

The Malaysia Property Award, dubbed the “Oscars” of the property industry, was organised by the Fiabci Malaysia chapter. The event was graced by the Sultan of Selangor, Sultan Sharafuddin Idris Shah.

YTL Land & Development Bhd bagged two awards at the International Real Estate Federation (Fiabci) Malaysia Property Award 2007, while SP Setia Bhd group managing director and chief executive officer Tan Sri Liew Kee Sin was named Property Man of the Year 2007.

YTL Land's Sentul West & Sentul East Master Plans won the best master plan development award and its Kuala Lumpur Performing Arts Centre picked up the special award for national contribution.

Other winners included Stonor Park (best residential development for high-rise), Pinggiran Bayou Village (best residential development for low-rise), Genting Highlands Resort (best resort development), KB Mall (best retail development), Sultan Abdul Aziz Royal Gallery (best specialised project) and Persada Johor International Convention Centre (best specialised project).

In his speech, Liew said the past decade had been a challenging but rewarding journey for him at SP Setia.

“My vision was simple - to be the best in all we do. I demanded the best service and product quality from my team and I am deeply gratified that our commitment in these areas has propelled us to the forefront of the industry.”

He added that the group would continue to “improve and evolve'' to become a global player.