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Friday, December 14, 2007

Sime Darby targets RM1b GDV worth of projects annually

SUBANG JAYA: Sime Darby Property, the property unit of re-listed Sime Darby Bhd, targets RM1 billion in gross development value annually and plans to develop 3,642 hectares or some 25% of its 14,973ha landbank over the immediate to medium-term, a senior executive said.

The division’s executive vice president of property development and strategic investments Datuk Tunku Putra Badlishah said yesterday that the unit aimed to be the country’s largest property company and hoped to make a larger contribution to the group’s total earnings from the 5.9% in its financial year ended June 30, 2007.

In terms of landbank, he said the company, being the largest property company, would optimise the land with plans to use 3,642ha over the next five years.

Speaking to reporters after the launch of its Royale Palms Villas high-end residential development project here, Tunku Badlishah said the total GDV for all its projects currently under planning was RM18 billion.

The Royale Palms Villas, located on the 727ha Putra Heights mixed development site, comprised 36 units of premium and guarded community villas with a built-up area of between 4,170 sq ft and 4,900 sq ft, and a GDV of RM55 million, he said.

The residential project is the first to be launched since the re-listing of Sime Darby Bhd.

He said the company targeted a 50% take-up rate of the properties within six months, with most purchasers expected to be customers of its previous projects.

“The collection of Royale Palms villas is our first roll-out of luxury homes as part of our new focus on the higher-end segment of the property market to meet the demands of the increasingly affluent and lifestyle seeking homebuyers,” he said.

Tunku Badlishah said the focus on the development of high-end properties was also part of Sime Darby Property’s strategy going forward following the consolidation of Sime UEP Properties Bhd, Sime Darby Property, Guthrie Properties Development Holdings Bhd and Negara Properties (Malaysia) Bhd.


Sandakan’s RM40m boutique hotel to open on Dec 23

KUALA LUMPUR: Sandakan’s first boutique hotel, the RM40-million @ease waterfront hotel — located within the RM450 million Sandakan Harbour Square — will be opened on Dec 23.

The hotel, which overlooks the Sandakan Harbour, has 138 deluxe rooms and suites, business centre and banquet facilities and it is targeting corporate clients, businessmen and tourists.

It would be the first hotel within the Sandakan Harbour Square and fourth hotel under the three-star category in Sandakan. The project was undertaken by Sara Timur Sdn Bhd’s subsidiary Sara Timur Properties Sdn Bhd.

Sara Timura Sarawak-based engineering and construction company — was the main contractor for the first two of four phases of the 12-acre Sandakan Harbour Square. The hotel will be managed by the Value Hospitality group.

Sara-Timur Properties joint managing director Rosita Hamden said yesterday there was good potential for tourism in Sabah.

Sandakan has many attractions to offer including the Sepilok Orang Utan Rehabilitation Centre, the Kinabatangan river and eco-tourism,” she said at a press briefing here yesterday.

She said first daily flights from Kota Kinabalu to Sandakan are usually packed with tourists and businessmen, adding there was a shortage of 6,000 hotel rooms in Kota Kinabalu.

“We are expecting 60% occupancy for the first year which is according to the standard average industry occupancy,” said Value Hospitality’s area general manager John Augustin.

Sara-Timur Sdn Bhd’s regional director (Sabah region) Anthony Tiong said the company was looking for more opportunities and would first focus within Malaysia. Sandakan Harbour Square is Sabah’s first integrated urban renewal development project that was launched in January 2003 and targeted to complete in 2010.


The Store buys Alor Star Mall for RM130m

KUALA LUMPUR: The Store Corporation Bhd is proposing to acquire Jurus Kota Sdn Bhd, which owns the Alor Star Mall in Kedah, from YS Tang Holdings Sdn Bhd for RM130 million in cash.

Under the agreement announced yesterday, The Store would also assume the liabilities of RM43.91 million which Jurus Kota owed to YS Tang as at Dec 31, 2006.

The Alor Star Mall is a two-storey commercial complex with mezzanine floor and basement car park.

The mall has a net lettable area of about 296,532sq ft with 386 car park bays. The mall started operations in 2004 with the major tenant being Pacific Hypermarket and Departmental Store Sdn Bhd, a subsidiary of The Store.

The Store said the acquisition would be financed from its own funds and/or bank borrowings.

“The Store Group will be able to increase its revenue base through recurring rental income from the Alor Star Mall, which will complement The Store Group’s existing retailing income,” the company said.

It would also be able to enjoy rental savings, which would otherwise be incurred by the Pacific outlet, which occupied 72% of the total lettable area of the Alor Star Mall. It expected the acquisition to be completed by the end of first quarter of 2008.

YS Tang had also provided a warranty that the net tangible assets (NTA) of Jurus Kota as at Dec 31, 2007 would be at least RM133.28 million as in the audited NTA as at Dec 31, 2006.

Jurus Kota posted RM1.79 million in net profit on the back of RM8.54 million in revenue for the audited financial year ended Dec 31, 2006. In FY05, net profit was RM2.85 million and revenue at RM6.62 million.

According to The Store, the rental revenue per annum from the mall was about RM10.5 million per annum, based on existing rental rates. About 86.9% of the building was occupied.

The Store’s bank borrowings are expected to increase from RM199.36 million to RM329.36 million after the proposed acquisition, which would see its gearing ratio increase from 0.76 times to 1.25 times.


Dubai Ventures buys into Guocoland

KUALA LUMPUR: Dubai Ventures Ltd bought into Guocoland (Malaysia) Bhd, acquiring 74 million shares in the property-based company on Wednesday.

A filing to Bursa Malaysia showed the acquisition of the shares by the Dubai investment group represented a 10.56% stake.

Guocoland, which is controlled by Tan Sri Quek Leng Chan, saw its share price closing at RM3.14 on Wednesday.

The company posted net profit of RM3.36 million on the back of RM36.35 million in revenue for the quarter ended Sept 30, 2007.


E&O JV in Penang luxury seafront villas project

PENANG: E&O Property Development Bhd’s joint-venture luxury bungalows project on Penang island, where the units are priced between RM2.75 million and RM7.5 million, will be launched on Saturday.

The Villas By-The-Sea project villas would be built on 15 acres of freehold land in Seri Tanjung Pinang, with total of 750 metres of frontage facing the Straits of Malacca. They are scheduled to be completed by mid-2009.

The JV partners include Bahrain’s Al Salam Bank and CIMB-Mapletree Real Estate Fund 1 Sdn Bhd.

E&O Property director of marketing and sales KC Chong said with the rising affluence in Asia, the concept of luxury had evolved significantly and shifted from tangibles like ownership of properties, to intangibles like time, personal space and relaxation.

“These have become very valuable to many, thus resort-styled homes and developments that are set in lush natural surroundings and blessed with the sun, sand and sea are becoming highly sought after. But what makes our Villa By-The-Sea truly unique is their prime location just minutes away from Gurney Drive,” he said.

CIMB-Mapletree chief executive officer Raja Noorma Othman said the project represented the real estate fund’s maiden foray into the upscale residential market in Penang.

“We are confident that this joint venture will strengthen our position in the international luxury property market and pave the way for further developments in the high-growth market,” she said.

CIMB-Mapletree is a private real estate fund managed by CIMB-Mapletree Management Sdn Bhd, a joint venture between CIMB Real Estate Sdn Bhd and Mapletree Capital Management Ltd.

The villas come in three designs, namely Martinique which is located by the sea, Abrezz and Skye with land area ranging from 4,999 sq ft to 12,860 sq ft each.


SP Setia net profit up 9.2% to RM260m

KUALA LUMPUR: SP Setia, which posted a net profit of RM260 million for the financial year ended Oct 31, 2007, on the back of RM1.15 billion in revenue, targets group sales to hit RM1.8 billion in FY08.

Net profit rose 9.16% from RM238.2 million a year ago. Earnings per share was 38.72 sen. It also proposed a final dividend of 15 sen per share less tax, which brings the total dividend for the year to 25 sen per share.

In the fourth quarter, revenue rose 14.4% on-year to RM317.16 million, while net profit increased 41.7% on-year to RM99.79 million.

Group managing director and chief executive officer Tan Sri Liew Kee Sin said yesterday its profits and revenue were primarily driven by established projects. They were Setia Alam and Setia Eco Park in Shah Alam, Duta Tropika in Sri Hartamas, Setiahills in Ampang, Bukit Indah, Setia Indah and Setia Tropika in Johor Bahru and Setia Pearl in Penang.

“The group targets RM1.8 billion in sales for FY08. That will be a 50% jump in sales, and we are very confident we can do it. We feel the economy is right (for the growth).

“We are evolving from a landed property developer to a fully integrated international developer,” said Liew, adding that the integrated projects would give it better value, income and margins.

Liew said the group’s total sales totalled RM1.2 billion, up 33.3% from RM900 million in FY06. On the RM1.8 billion sales target, he said it would come from 20 active projects next year including four new ones, among which is the Duta Enclaves bungalow project in Kenny Hills and EcoLakes in Vietnam. Its maiden luxury condominium project, Setia Sky Residences in KL, is scheduled for launch next year.

Asked if SP Setia planned to expand to other countries after Vietnam, Liew said SP Setia had received invitations from India and China, but added that it wanted to focus on Vietnam.

“We want to prove to the Vietnamese authorities that we are serious developer,” he said, adding it planned to acquire more landbanks there.

Its 500-acre joint venture with state-owned conglomerate Becamex IDC Corp in Ho Chi Minh City would begin in March 2008.

In Malaysia, SP Setia would team up with Sabah’s state authorities to undertake an integrated project with commercial buildings, hotel and apartments in Kota Kinabalu.

“We think Sabah has a lot of potential,” said Liew. He added SP Setia was negotiating for a high-value piece of land in Kota Kinabalu. Details would be announced soon, he added.


High-end projects to lift SP Setia revenue next year

PETALING JAYA: Analysts expect SP Setia Bhd’s first property launch in Vietnam and a slew of new high-end projects at home to lift the developer’s revenue to a record next year.

In a report yesterday, TA Securities said following management guidance, it had raised SP Setia’s revenue estimates to RM1.77bil from RM1.3bil for the year ending Oct 31, 2008 (FY08).

“Consequently, we have revised upward our net earnings projection by 17% for FY08 and 31% for FY09 to reflect its Vietnam contribution,” the research house said.

The joint venture with Becamex IDC Corp to develop EcoLakes in Vietnam had an estimated GDV of RM2.1bil and was scheduled to be launched in March, it said.

Locally, the company has unbilled sales of RM1.44bil, the highest ever. Its total sales of RM1.153bil for FY07 came within analysts’ expectations.

On Wednesday, group managing director Tan Sri Liew Kin Sin said the company would launch 10 projects next year to bring its total projects to 20, with a total gross development value (GDV) of RM30bil.

SJ Securities concurred that the Vietnam venture was the long-term catalyst for the group’s earnings.

It said SP Setia had unveiled a five-year plan to double its profit by 2012 from next year by focusing on the expansion in its three residential brands: Setia, Eco and Duta. It would also launch its first high-end condominium project in Kuala Lumpur - Setia Sky Residences in Jalan Tun Razak and ultra luxury homes under Duta Grande brand.

The plan also involved undertaking commercial projects with shop offices within townships and integrated commercial development, SJ Securities said.

SJ Securities is maintaining an “overweight” call on the counter.

TA Securities has a “sell” call on the stock with a target price of RM7.70, which would offer a return of 9.1%.

The counter closed at RM7.40 yesterday, down 30 sen, on volume of 8.39 million shares.

By The Star (by

Gamuda starts work on Vietnam park project

KUALA LUMPUR: Gamuda Bhd has commenced construction works for the Yen So Park integrated development project, located 6km south of Hanoi.

A ground-breaking ceremony was held on Tuesday at the project site, the company said in a statement yesterday.

Among those who attended the event were Vietnam’s Deputy Minister of Construction Cao Lai Quang, Hanoi People’s Committee vice chairman Nguyen Van Khoi, Malaysian Ambassador to Vietnam Lim Kim Eng and Gamuda group managing director Datuk Lin Yun Ling.

Gamuda will build a world-class public park, a modern sewerage treatment plant, as well as a modern commercial centre comprising office towers, five-star international hotels, a convention centre, shop offices and residential components.

“The Yen So project is not just about the construction of the largest sewerage treatment plant in Vietnam but also includes the construction of an international park with a beautiful waterfront with lakes.

“The lakes and park cover 280ha, making it Asia’s largest urban park facility,” Lin said in the statement.

Lin said Gamuda was transforming south Hanoi into a modern city with a beautiful environment, which would provide much needed recreational space for the city’s inhabitants.

By The Star