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Monday, December 10, 2007

Nadicorp to expand property ops

KUALA LUMPUR: Nadicorp Holdings Sdn Bhd, owner of the country’s largest express bus operator, wants to expand its fledgling property business as part of the group’s overall growth strategy.

The holding company is known for its involvement in the transportation sector, as parent to Main-board listed Konsortium Transnational Bhd (KTB).

Nadicorp executive chairman Datuk Mohd Nadzmi Mohd Salleh told The Edge Financial Daily that the company wanted to carve out a niche for itself in the property segment.

Property is a growth segment we are looking at,” he said, adding that the holding company was in the final leg of completing its first property development project, which started three years ago and scheduled for completion by year-end.

The 16.6-hectare mixed-development project is located in Pasir Pekan, Kelantan, and will comprise residential and commercial buildings, Nadzmi said. These will comprise semi-detached and terrace houses, bungalows and shop houses.

He added that the gross development value of the project is RM40 million, with 80% of it already sold.

On Nadicorp’s plans in the property arena, Nadzmi said the company was keen on developing its existing landbank in the Klang Valley. “We are looking at potentially developing medium-cost, landed residential property projects.”

The company’s landbank size in the Klang Valley is currently 16.19 hectares. It has a total landbank of 499ha as well as 3,320ha of plantation land.

However, Nadzmi said Nadicorp did not plan to acquire more landbank in the near future as it did not plan to go into property on a large scale as of now. “Transportation will remain the bread and butter of the company,” he said.

Currently, Nadicorp’s transportation arm contributes 78% to overall group revenues. Other key contributors are its plantation business (12%), manufacturing (textile and apparel; automotive engineering which includes tyre retreading and coach building) at 8% and other support services (2%).

He added that KTB was also bidding for airport and bus link projects in Indonesia, with discussions at a preliminary stage.

“For the next two to three years, we will focus on the Malaysian and Indonesian markets and strengthen the revenue base,” he said, referring to Nadicorp’s future plans for KTB.

He added that the company had set an internal management target of some 10% revenue growth for KTB for the coming year.

As at end-September, Nadicorp’s group revenues totalled RM252.2 million of which RM188.5 million was from Nadicorp’s transportation business, Nadzmi said.

By New Straits Times (by )

UMLand unveils Arista, Vanda in Johor's Seri Austin

Members of the public get a chance to check out the latest home offerings and test drive cars

UMLand Bhd has been pampering homebuyers by giving them an opportunity to check out its latest offerings and, at the same time, test drive cars of their choice from established names such as Proton, Toyota, Citroen and Honda.

That was made possible at its Seri Austin Automobile Show recently, where members of the public got a chance to view UMLand's latest Arista Tropical Homes and Vanda Cluster Homes in Johor Baru's Tebrau locality. Both are from its Seri Austin development.

To deliver innovative and competitively priced quality homes, the main board listed company's double-storey Arista Tropical Homes feature tropical fa ades with traditional architectural design. With a land area of 20ft by 70ft, the Arista comes in built-ups from 1,822sq ft and five bedrooms, priced from RM218,640.

UMLand's Vanda Cluster homes, on the other hand, are spacious semi-dees with five bedrooms in plot sizes of 32ft by 70ft. The big built-up of 2,255sq ft will be complemented by one utility room and a private yard. These units are tagged from RM228,000.

The Arista and Vanda homes are being developed by UMLand subsidiary Dynasty View Sdn Bhd.

These homes, accessible via the Tebrau Highway, are just 20 minutes away from Johor Baru city centre. The site will also be accessible soon from the North-South Highway via the Bandar Dato' Onn interchange.

By New Straits Times (by Zuhaila Sedek)

BLand going big in Vietnam

BERJAYA Land Bhd (BLand), a unit of Berjaya Corp Bhd (BCorp), is on its way to become the largest property player in Vietnam, beginning with four projects in Hanoi and Ho Chi Minh City with estimated gross development value (GDV) of some RM34 billion.

It has so far bought about 916 hectares (ha) in Vietnam. The biggest is an 874ha site about 19km from Ho Chi Minh City that will become an international university township, senior BLand executives said.

“Our GDV (estimates) are very conservative. I told my staff not to put the figure too high,” BCorp chairman Tan Sri Vincent Tan said last Thursday to a group of Malaysian fund managers, analysts and journalists, who visited the project sites in the two cities.

“We want to be the biggest (property) investor in Vietnam. The country is starting from a very low base. Its economy is to grow more than 12 per cent this year. Potentially, it can grow six per cent to seven per cent annually in the next 10 years and at least five per cent a year in 20 years,” Tan said.

The projects, three in Ho Chi Minh City and one in the capital Hanoi, will be developed over 12 years. They include a new Vietnam financial centre and a new city centre in Hanoi.

BLand chief executive officer Datuk Francis Ng said the projects are to capitalise on Vietnam’s fast-growing economy, which is now the focus of multinational companies.

Real estate agent CB Richard Ellis managing director Marc Townsend said the Vietnamese property market had rapidly grown since 2003 and that the lack of supply had pushed land and building prices and rental rates to record highs.

BLand’s new university township will be developed jointly with Ho Chi Minh City’s Northwest Metropolitan Area Authority.

“The GDV is expected at US$7.5 billion (RM25 billion) over 12 years,” Ng said, adding that BLand should start generating income from the project in 2010.

It will have universities, colleges, schools, houses, offices, shopping mall, hotels, hospitals and an information technology centre.

The first phase is targeted for launch in mid-2009. The overall project is part of a bigger Ho Chi Minh City’s North-West administrative district being developed on a 3,200ha site.

The company, Ng said, should get the investment licence that will let it start construction works in two months. Initial phases will include the development of two private universities on some 300ha.

“About 20 per cent to 30 per cent of the total area has been allocated for international private universities. We have started talking to University of Westminster and University of Birmingham of the UK,” he added.

BLand has started construction on a residential and commercial project called Thach Ban New City on 31.33ha in Hanoi, with expected GDV of US$500 million (RM1.67 billion) in five years.

The first phase of a total nine phases planned during the five years comprises 148 units of condominiums.

The company has an 80 per cent stake in the project, with a Vietnamese partner holding the rest.

The Vietnam financial centre in District 10 in Ho Chi Minh City, meanwhile, will have a GDV of US$1.2 billion (RM4 billion) over six years from 2008.

Development on 8.2ha will include two blocks of serviced apartments and hotel, and three blocks of office towers.

“We are confident of getting the investment licence for the project by the end of this month,” Ng said, adding that the project should cost BLand some US$700 million (RM2.33 billion) to develop.

By New Straits Times

Much upside for REITS

StarBiz talks to Axis REIT Managers Bhd executive deputy chairman Datuk Carl Gunnar Myhre, chief operating officer and executive director Stewart LaBrooy and director Stephen Tew on their opinions about Axis Real Estate Investment Trust (REIT) and the REIT industry in Malaysia.

Dazzling Township Sdn Bhd, a redevelopment of Lot 13 Jalan 225, Petaling Jaya

STARBIZ: How is Axis REIT performing?

LaBrooy: Well, Axis REIT is under the industrial REIT category, which traditionally offers investors lower risk, compared with other types of REITs. As for Axis REIT itself, we have been consistent in providing investors with double-digit dividend, which is better than what most REITs offer. I believe we gave nearly 13 sen dividend in our last financial year. That aside, Axis REIT is the trust that the Employees Provident Fund has invested in.

What about the REIT industry in Malaysia?

LaBrooy: There is still a lot of upside to the REIT industry in Malaysia as the properties are still relatively cheaper, compared with those in developed nations.

Myhre: Malaysian REITs have grown from one REIT with a market cap of RM300mil in 2005 to at least 11 REITs currently with a combined market cap of about RM5bil in little less than two years. We believe Malaysian REITs are now moving from the adoption phase to the growth phase and we can expect a flurry of acquisitions in the years ahead. Also, in the first quarter of 2007 the Malaysian economy witnessed RM26bil inflow of foreign funds and most of it was invested in the equity and property market, especially property stock and REITs.

Tew: Regionally we are still very cheap. We are a stable country with good infrastructure and a sizeable middle-income group and a gross domestic product growth of 5% to 6% in the past 10 years. It all contributes to the growth of the REIT industry.

Why are most of your properties acquired in Petaling Jaya and Shah Alam?

Tew: We bought a lot of properties from Cycle & Carriage along the Federal Highway last year, which is all undergoing re-modelling. A lot of people are moving from Kuala Lumpur to Petaling Jaya (PJ) and Shah Alam to live and work. It's relatively cheaper. The reason we invested in PJ and Shah Alam is because in some areas in Shah Alam there is good chance that industrial properties might become a little more commercial. We might end up converting an industrial and commercial land into an office blocks base. Tear down a factory and put up six to seven-storey blocks of offices and rent it out. When you do that, your yield will almost double. At the end of the day, what we buy are things with future value. I think this is what investment is all about.

How do you compare Axis REIT's performance with other REITs?

LaBrooy: We are a very specialised type of REIT and we have a niche in industrial properties.

How do you compete with other REITs with strong financial backing or other stocks that investors are attracted to?

LaBrooy: This is not a beauty contest, seriously. REITs don't run like equity, it's purely how much you get from investment and it is a long-term lock-in.

It's basically your defensive stock in portfolio and a proxy for liquid assets. The equity market can be very volatile whereas REITs are generally more stable. At the same time, in REITs we also look for capital appreciation.

By The Star

Prima Prai plans to launch high-end units

The projects are in Malaysia and Australia

Prima Prai Group Bhd plans to launch several high-end developments both in Malaysia and Australia next year.

The three high-end developments in the country will be The Runnymede, with more bungalows and a new condominium project in its ongoing The Sanctuary, both on Penang island; and a bungalow project in Mont' Kiara, Kuala Lumpur.

It also has a new development three hours from Perth in Western Australia called the Margaret River Resort.

Managing director Datuk Mohd Ramzan Ibrahim told StarBiz that the Margaret River Resort would be the single largest project in Margaret River, a region famous for its wineries, scenic beauty, lakes and caves.

An artist's impression of The Sanctuary, a gated and guarded, high-end residential development Batu Uban, in Penang.

He said there would be 161 chalets in a low-density gated community. The property, to come on-stream in early 2009, is on a 25-acre freehold piece of land next to a 75-acre lake.

Ramzan said 45% of the units would be sold, leaving the rest for investment purposes.

“Purchasers can lease their units back to us and they can use their units for a specified numbers of days. It could be two weeks to a month. We also plan to engage an international hotel chain to manage the property,” he said.

”If you want peace and quiet, clean air and very good food, this is the perfect place for relaxation. The Margaret River wine region is famous for its wineries,” he said.

Meanwhile, Prima Prai’s flagship development The Runnymede in Georgetown, might be launched in the third quarter of 2008.

The freehold 5.5-acre development on the site of the historical Runnymede at Jalan Sultan Ahmad Shah (formerly Northam Road) is billed as the most exclusive in the state.

To reflect its heritage, the two high-rise blocks to be called Runnymede Residences will have colonial architectural designs. There will also be a full suite hotel.

Ramzan said the Runnymede name had been retained to reflect its rich history.

He said the current block would be renovated and turned into a heritage building and the ground floor would be used for wedding receptions.

The group has built and sold a 350,000 sq ft office building on an adjacent parcel of land.

As for the project in Mont' Kiara, Kuala Lumpur, Razman said it would have a gross development value (GDV) of about RM40mil. It will be on a freehold 2-acre land overlooking the KLCC. It will have only 13 exclusive bungalows priced from RM3.2mil.

It would mirror the kind of quality features and concept at the group's high-end residential project, The Sanctuary in Batu Uban on Penang island.

“The pricing of this project will be higher (than The Sanctuary) by at least 40% as the land cost is high. We are a bit cautious of coming to Kuala Lumpur,” said Ramzan.

The group would also be launching Phase 1B comprising the second batch of 30 bungalows in The Sanctuary in Batu Uban, Penang Island early next year.

The 30 bungalows are as good as sold as Kuwait Finance House (Malaysia) Bhd signed a Mudharabah agreement on Nov 29 to provide RM74.4mil capital to Corner Side Realty Sdn Bhd (a unit of the Prima Prai Group) to underwrite the sale of the 30 bungalows.

Meanwhile, the group also has two other projects in the pipeline.

They are an 80-acre medium-cost housing development next to the Highway Auto City in Juru, Penang with RM300mil GDV to be launched next year and a proposed 420-acre development close to Club Med Cherating in Pahang.

By The Star (by S.C. CHEAH)

Axis REIT plans to inject more properties

Company on an aggressive acquisition trail

AXIS REIT Managers Bhd, which manages AXIS Real Estate Investment Trust (Axis REIT), plans to inject a slew of properties from private equity and third-party transaction into the REIT in the next 12 months.

As of Dec 4, Axis REIT's total asset value under management was RM560.8mil based on 14 properties in its books.

There is also a good possibility that two more properties would be injected into the trust by this month or early next year, collectively worth RM65.48mil, bringing the portfolio to RM626.31mil in total.

Axis REIT Managers chief operating officer and executive director Stewart LaBrooy said the time was right to add more properties into the REIT, especially from private equity.

Stewart LaBrooy

Axis REIT is on an aggressive acquisition trail to grow its property trust to RM1bil by end-2008.

Axis REIT, which focuses on having a stable of properties for industrial use, showrooms and warehouses, was listed on the main board of Bursa Malaysia on August 2005.

Five properties – all from private equity – worth a total of RM300mil, was injected into Axis REIT in the listing.

Since then, another nine properties all from third-party transactions have been placed into the trust bringing the total number of properties in the REIT to 14 as of November.

Most of the properties in the REIT are located in Petaling Jaya and Shah Alam, except for one in Senai, Johor and another in Sungai Petani, Kedah.

LaBrooy said in third-party transactions, properties needed to be identified as suitable first before they were injected into the REIT.

“We then acquire them if they are available for sale provided they meet our requirements in terms of potential yield, capital gains and asset enhancement opportunities,” he told StarBiz.

LaBrooy said the situation now was quite different.

“We have the option to buy properties from third-party, private equity or both,” he said, adding that there were seven properties from private equity, which could be regarded as the second portfolio of properties from private equity to be considered for injection into Axis REIT.

“That's provided these properties meet the stringent requirements set by Axis REIT Managers, Securities Commission and the various regulatory boards,” he said.

He also said the seven properties or feedstock were specifically purchased earlier and carefully nurtured via asset enhancement activities to be later injected into the REIT when they were ready.

The seven properties alone – believed to be worth over RM200mil – if injected into Axis REIT, would raise the trust to at least RM826mil by end-2008.

That is assuming no third-party transacted properties are injected into the REIT as well for the whole of next year.

On the difference between acquisitions of properties from private equity versus third-party transactions, LaBrooy said it was likely that properties purchased under private equity by Axis REIT were generally acquired under more favourable conditions – in terms of price or yield.

Axis REIT Managers executive deputy chairman Datuk Carl Gunnar Myhre said: “I have higher aspirations to grow the REIT and I have my own targets for 2008.”

Datuk Carl Gunnar Myhre

Myhre said it was important that Axis REIT had a substantial number of assets under its portfolio as fast as possible to grow the REIT size to be noticed internationally, especially by institutional investors.

“As a REIT in Malaysia we are fairly known by local investors and most analysts but to attract institutional investors from abroad we need to grow much faster and bigger to take advantage of the growing industry, especially in the region,” he said.

Myhre said some of the REITs in the developed countries such as the United States and parts of Europe, Australia and even Singapore ran into billions.

“Besides the quality of properties injected into the trust to provide the required yield, size is also important, especially in fund raising,” he said.

Axis REIT director Stephen Tew agrees with Myhre on the importance of growing the REIT quickly.

He said the REIT industry in Malaysia was growing strong and there were many foreign investors, especially from the Middle East, who were snapping up a lot of the premium properties, especially in the Klang Valley and the Iskandar Development Region in Johor.

Stephen Tew

“In terms of valuation Malaysian properties are still very reasonable, compared with other countries in the region,” said Tew.

He said Axis REIT wanted to raise funds to go on a faster acquisition trail to mop up properties that are identified by Axis REIT Managers as suitable for potential injection into the trust.

“While we might have been perceived to be quiet these few months in terms of acquisition, but in reality, we have been fairly aggressive in our acquisitions over the past two years,” he said.

Tew said one of the constraints faced by many REIT managers in expanding the trust was due to inadequate funds.

Axis REIT has plans to place out 50 million new Axis REIT units under private placement – its first security issue since listing and hopes to raise about RM87mil from the exercise.

Axis REIT chief financial officer Lim Yoon Peng said since the private placement has been given the nod by unit holders, the REIT's gearing is expected to be pared down to about 28%.

It will also have additional funds to acquire more real estate. “Otherwise, our gearing would be about 44%, even after the injection of the two properties which is pending approval,” said Lim

By The Star (by Danny Yap)

Property financing takes new turn in Malaysia

Financing of property developments has taken on a new form recently in Malaysia with the wholesale selling of a development to a financial institution which then helps to market the property.

With Kuwait Finance House (M) Bhd (KFHMB)'s innovative Islamic way of funding a project called Mudharabah, it has revolutionised real estate development financing by applying the Islamic principle of sharing risks as well as profits.

To be offered such a facility is a stamp of trust of the project's success with KFHMB being associated with projects such as The Pavilion and The Avare in Kuala Lumpur.

Mudharabah is a common structure in Islamic financing where a partnership is formed with a party providing capital and the other party managing the project.

Datuk Mohd Ramzan Ibrahim (left) exchanging documents with Datuk K. Salman Younis (right) after both parties signed a Mudharabah financing facility in Kuala Lumpur recenty.

In the case of real estate projects, this enables a developer to concentrate on developing a property leaving the lender with the marketing.

Take the recent signing of a Mudharabah agreement between Corner Side Realty Sdn Bhd (CSRSB), a member of the Prima Prai Group and KFHMB as an example.

Under the Mudharabah financing facility KFHMB will provide a capital of RM74.7mil to CSRSB to underwrite the sale of 30 bungalows in Phase 1B of the RM500mil, The Sanctuary, a freehold development in Batu Uban, Penang.

When the bungalows are eventually sold to the end-purchasers, the profits from the sale would be distributed to KFHMB and CSRSB, based on a profit sharing ratio.

Mudharabah ensures that the project is guaranteed completion as the developer has locked in his sales.

It also gives purchasers confidence as they know that the project will be completed and this in turn attracts more potential buyers and boost property values.

Besides having the financial muscle, KFHMB through its parent company Kuwait Finance House has a vast international network of potential customers.

Its financing structure is not only in real estate but also in various Islamic banking services including lease financing, trade finance, direct investments and portfolio investing.

Being the first to offer such a facility in Penang, it also reflects the commitment of KFHMB in increasing its investments in Penang and in developing its presence in the state.

KFHMB managing director Datuk K. Salman Younis, who described Mudharabah as a “very fair form of banking”, sees good potential in doing business in Penang, given that the government plans to spend RM23.8bil on the northern region under the Ninth Malaysia Plan.

This allocation among others would go into major infrastructure projects such as the Penang Outer Ring Road, Penang monorail system and Second Penang Bridge.

“Penang also stands to benefit from the influx of tourist arrivals which will invigorate activities in the hospitality sector.

“All these factors will act as catalysts for the economy in Penang and revive the property and construction sectors,” Salman said, adding that KFHMB would work with Prima Prai Group for future strategic alliances and co-operation.

Prima Prai Group managing director Datuk Mohd Ramzan Ibrahim said it was the group's first Mudharabah facility.

Phase 1 of The Sanctuary comprising 21 detached and 11 semi-detached houses worth RM68mil has been completed and occupied.

Phase 1B with 35 (including the 30 in the Mudharabah deal), three-storey detached houses will be launched early next year.

By The Star (

Lagenda stands apart

Developer promotes goodwill

What was once considered a rocky site on a hill a few years ago has now been transformed into a unique gated and guarded enclave comprising five-storey townhouses, semi-detached houses and bungalows.

Property developer Regal Form Sdn Bhd, a unit of Mutiara Goodyear Bhd, officially completed and handed over Taman Lagenda Mas 2B to buyers on March 1, 2007.

Mutiara Goodyear senior marketing manager Irene Koh who was at the BBQ Night celebration on Saturday to officially mark the occasion told StarBiz that the celebration was also to promote goodwill among neighbours.

“Its all part of our corporate social responsibility (CSR) policy,” she said.

Irene Koh

Taman Lagenda Mas 2B - spread over 6.96 hectares at the 8½ mile in Cheras - is a freehold developmnt comprising of 202 residences.

Koh noted that a good CSR programme could be seen as an aid to word of mouth marketing, particularly within the competitive property market.

“In a crowded property marketplace this is how we strive for a unique selling proposition which can separate us from the competition in the minds of consumers”, Koh said.

She added that a CSR programme could play a role in building customer loyalty based on distinctive ethical values, which was Mutiara Goodyear's way of fostering their customers' goodwill.

Some 700 hundred guests attended the simple but memorable neighbourhood gathering.

Taman Lagenda Mas 2B is built on elevated ground, with a majestic backdrop that drapes tranquillit y over the whole vicinity.

Taman Lagenda Mas 2B is built on elevated ground, with a majestic backdrop that drapes tranquillity over the whole vicinity.

The feng shui-conscious would also be glad to know that the mountain formation directly facing the development is said to be highly favourable, said Koh.

“Our CSR programme also helps to improve the perception of our company among our staff, particularly when staff can become involved through such events and possibly through some fundraising activities or community volunteering events in the pipeline,” she added.

Before the feast, the press were taken along on a tour where extensive landscaping, featuring manicured shrubs and lawns, complimented the natural ambience of the enclave.

The project's underground cabling and a covered drainage system is designed aesthetically. Coupled with a children's playground was a Zen garden (comprising a reflexology path, taichi and qigong space), a jogging path and a small orchard.

Parent company Mutiara Goodyear Development Bhd will also be launching two other gated communities this year, one in Melawati and another in Cheras.

By The Star (by Alvin Tay)