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Friday, December 21, 2007

UOA sets out to remake Kampung Kerinchi

A computer generated image of the Bangsar South integrated-city development depicting: 1 The Village property gallery, 2 The Horizon commercial centre, 3 The Vertical commercial centre, 4 The Sphere commercial centre and 5 The Park residences

UOA Holdings Sdn Bhd hopes to turn the old Kampung Kerinchi area into one of the Klang Valley’s most sought after addresses with its latest integrated-city development, Bangsar South. The property developer is a subsidiary of Australia Stock Exchange-listed UOA Ltd, which is also the controlling shareholder of UOA Real Estate Investment Trust (UOA REIT).

Its marketing and sales general manager Teh Heng Chong said the project is still in the planning stages but the developer hopes to emulate IGB Corp Bhd’s Mid Valley City located nearby.

“Although somewhat smaller in size, Bangsar South, a 60-acre leasehold mixed development would also be an integrated city, comprising a residential, commercial and retail component, which would be developed over a period of seven to eight years,” he said.

Teh said due to a strong demand in the market for commercial properties such as Grade A office buildings, the group may first launch 14 out of 37 blocks of 10- and 11-storey boutique office towers known as The Horizon, which it is targeting to sell enbloc. “Boutique offices give you naming rights when you purchase the whole building and offer exclusivity that is not available in conventional shop offices,” he said.

He added that piling works have already started on the “show towers” of The Horizon, which is expected to be completed in 2009. “We believe in giving value to our buyers by showing them
the actual units rather than just looking through a brochure,” he said. UOA is a strong advocate of the build-then-sell (BTS) concept, with three of its residential projects off Jalan Klang Lama — Happy Garden, Villa Yarl, and Halimahton, developed based on that concept.

Future commercial launches in Bangsar South include The Vertical, where plans are for 10 blocks of 20-storey office towers and a retail mall called The Sphere. About 50% or 30 acres of the development is expected to be allocated for its residential component known as The Park, which is planned for 2,100 units of high-end condominiums in eight blocks. Another component called The Village will house the development’s property gallery, show units, as well as three stories of F&B outlets.

Bangsar South is targeted for launch by the first quarter of next year and the developer is confident it would be well received based on the its track record and the strategic location.

“UOA has good branding and a strong portfolio in terms of commercial properties, which includes office buildings in the KLCC, Bangsar and Damansara area,” Teh said.

The group is in the midst of upgrading the roads and relocating the squatters in the Kerinchi area. “We are also negotiating with some big names to operate the F&B outlets in The Village,” Teh offered.

The developer recently soft-launched its Menara UOA Bangsar, a Grade A office development located off Jalan Maarof. The project consists of a 23-storey tower and a 39-storey tower with a net lettable area of 634,000 sq ft. However, UOA is only opening up the latter tower for sale while keeping the other for future purposes, with a possibility of it being injected into UOA REIT.

Up for sale are 411 units of single level and duplex business suites, with builtups ranging from 900 sq ft to more than 10,000 sq ft. Each unit has individual toilets and pantries. The average selling price is about RM792 psf for a gross development value (GDV) of RM502 million. A complete show unit of a duplex business suite will be available for viewing at the The Village show gallery in the future Bangsar South.

Teh said there is a lack of office space in Bangsar, and the business suites offered in the development would cater to that increasing demand for such properties.

“Menara UOA Bangsar is located adjoining the Bangsar LRT station, which offers good transportation options as KL Sentral is just minutes away,” he said.

The developer has also dedicated the ninth floor as the facilities floor, which acts as the common area for the office occupants in both towers to relax in.

“There is also a gymnasium available, he said, adding that the lowest three levels of the development would be leased out to potential F&B outlets.

The group launched the development simultaneously in Singapore and KL, receiving a good response, from Singaporeans. “About 40% of the units have been sold before the official launch scheduled for early next year and 10% of the buyers are from Singapore.”

“We are one of the first to market a Malaysian commercial development in Singapore since 1997 and we want to prove people wrong that Singaporeans are skeptical about commercial products on offer in Malaysia,” he added.

By theSun (by Yap Yew Jin)

Tips on buying off-plan property

Thinking about buying an overseas property that’s not built yet? Arm yourself against a range of possible problems.

Buying off-plan is one of the biggest trends to have come out of the foreign property market in the past 15 years. The idea is simple enough: a developer sells a property that is not yet built, in stages, to a buyer who doesn’t want to pay the whole price up front. This gives the builder money to finance the project and allows buyers to purchase the property over a period of time,
generally around two or three years.

It seems like a good deal and often such buys are sound, providing you go in with your eyes open. While there are respectable companies offering good products, there are also those who will fudge the truth to get a sale, change the terms of an agreement and, occasionally, disappear
with your money. So how do you guard against making common mistakes when buying off-plan?

Get good legal advice
Hire an independent lawyer, not one that your developer or agent recommends, and get them to check that the building licences and permissions have been approved for that particular development in that particular spot. You also need to know if the developer actually owns the land to protect against issues of title in the future.

A recent high-profile scandal befell some buyers on the Costa del Sol in Spain, where many owners discovered their properties were built illegally and would therefore possibly have to be demolished. In this case, due diligence didn’t help because the scam was perpetrated by the local planning authority, which was taking bribes in return for licences to build. Even the lawyers were fooled.

Usually you can root out such issues if you do your research and refuse to take anything at face value. If a project catches your eye, don’t rush to buy before you’ve had the property and company thoroughly investigated.

The new International Developer Information Pack from law firm Live Overseas does background checks on developers that should help unearth any legal issues relating to their projects. They cost from £625 (RM4,226) depending on the level of services sought.

Get what you pay for
Check the contract of any off-plan development thoroughly to make sure you are getting what you were promised when viewing.

Property expert Alise Crossick of Ready2Invest claims it isn’t unusual for developers to alter plans during the building process, which can mean anything from failing to complete facilities to altering the layout of properties because the builder has realised he can squeeze a few more on to the site.

You need to check everything is in the contract from the on-site spa and bar, down to the square footage of the useable living space you’re buying.

Don’t be fooled into signing for the total space, which can include the thickness of the walls, communal stairwells and halls.

“Developers can change things, if they’re not contractually guaranteed,” says Crossick.

“If it’s promised, make sure it’s also in the contract, otherwise you can’t expect it to appear in reality.”

Be careful about the temptations of ‘flipping’
Off-plan purchasers are often told they can easily sell on their property before it’s finished, taking advantage of capital gains and bailing out before the mortgage kicks in.

However, a changing market can mean you’re left with a property you can’t shift and a mortgage you’re not able to pay.

Many areas of Europe now have a glut of identikit new-builds that aren’t selling. Also, local agents often get better commissions from developers for pushing off-plan products rather than re-sales and buyers might not be shown your property.

Plus, remember that they’re being given the same financial incentives and promises that you were when encouraged to buy off-plan.

Indeed, the problem has become so acute that “distress sales”, in which prospective “flippers” offer to sell at a lower price to get rid of their property, is now a common term in the industry.

“I think flipping is dangerous,” says Stephen Marcon, international mortgage advisor with Connect Overseas, who rarely sees off-plan contracts successfully sold on. “You need to have a contingency plan in case you can’t sell. Also, some contracts don’t allow flipping, so check the small print.”

Beware of ‘guarantees’
One of the most popular off-plan sales techniques is the rental guarantee. This gives owners a percentage of the property purchase price, usually between 4% and 6% per annum, for a set number of years.

In many cases, properties may be in a good location and will rent well. However, rental guarantees are often used to entice buyers to purchase somewhere no one is ever likely to want to rent. So how do you get those returns?

“Sometimes you’ve overpaid for your property by as much as 20% and the developer is effectively giving you your own money back,” says Crossick. “You should always make sure you’re paying a genuine market price by comparing the property with other similar ones in the area.”

If buying for investment is your main aim, then be careful about guaranteed returns as the promised tenants might not exist. “Many guaranteed rents camouflage a poor rental market,” says Stuart Law of investment firm Assetz. “They hook you into thinking the property’s cheap and that there’s a demand, so you feel comfortable about buying.” Do your own research into the local market and check that there’s a market for rental property first.

Stuart Law also points out that developers can renege on guarantees once buyers commit to the purchase. But, if the contract is long-term, say 10 years, and is with a branded hotel or resort chain, then you should be reasonably secure. Finally, remember the oldest rule of all – that location is vital.

By Independent

Property hotspots to watch for 'second tier' locales with lower prices soon to be focus of developers

Putrajaya, Cyberjaya, Klang and Meru are set to be the next hot spots for development. According to property researcher and cartographer Ho Chin Soon, these areas located in the second tier of the Klang Valley's Locational Centre of Gravity (LCG) will see the next wave of development . Based on his theory, these locales are situated within a 25km radius from the LCG spot of Petaling Jaya.

“These areas are deemed ‘secondary’ for the time being with properties priced slightly lower than those found in the ‘prime’ locations found in the first tier (15km) of the LCG. However, the prices are expected to pick up in the next 15 to 20 years,” he told PropertyPlus. The first tier encompasses areas such as Kuala Lumpur City Centre (KLCC), Cheras, Puchong, Shah Alam and Sungai Buloh.

He said although there are risks when purchasing properties further away from the LCG, they are still manageable when buying properties located within the second tier. “However, I wouldn’t recommend buying properties further than those located in the second tier,” added the co-founder and managing director of Ho Chin Soon Research Sdn Bhd.

According to Ho, Petaling Jaya was selected as the LCG for the Klang Valley, not because of the value of properties there but due to how developed the area is in terms of infrastructure and accessibility. “PJ is centrally located in the Klang Valley and the area has seen rapid development taking place there,” he said, adding that locations in the LCG’s first tier are almost fully developed, thus pushing future developments into the second tier and beyond.

He said, that as the Klang Valley progresses, forest reserves and plantation lands are making
way for property development. “Puchong and Sungai Buloh used to be huge forest reserves but have since been cleared to construct homes. Subang Jaya was formerly oil palm plantation land, and similar types of land located in the peripherary of the LCG are expected to become property developments as well,” he said.

However, he believes that due to the mountains and limestone hills located north of Batu Caves and Taman Melawati, further development towards that part of the Klang Valley would be impossible. “Hence, it is simple logic that most, if not all, future developments would be heading to the south (Cyberjaya and Putrajaya) and west (Klang and Meru) side of the Klang Valley,” he said.

Ho (pix) said some of the developments located in the second tier of the LCG are being integrated into the first tier thanks to good accessibility. “Setia Eco Park in Shah Alam, which is located just outside the first tier, could easily be regarded as part of it due to its accessibility on the NKVE and the strong brand name of the developer,” he said.

Another development he considers to have good potential for growth is IJM’s Canal City, which currently lacks proper infrastructure and access. “Two highways are being constructed to link the development – one is the North South Central Link, which goes down to KLIA and the other goes across the Klang River, connecting it to Putra Heights,” he said.

He adds that both Putrajaya and Cyberjaya are also on the rise with more residential and commercial developments being planned. “SP Setia has also purchased a huge piece of land in the latter for a residential project, which is expected to spur more developments there,” he added.

In western part of the Klang Valley, he said constant development is happening, particularly in the Mutiara Damansara, Kota Damansara and Sungai Buloh areas. “In fact, it was reported [in The Edge Malaysia] that at least 10 developers were fighting over a 3,000-acre piece of land in Sungai Buloh, owned by the Rubber Research Institute (RRI), which signifies the potential of the area,” he said.

On the other hand, Ho said the Rawang area would not be as conducive to development as other locations in the second tier of the Klang Valley LCG due to the Bukit Lagung Reserve to its north. “It is a difficult physical barrier to overcome but there is potential with some of the Selayang (first tier) developments spilling over to Rawang,” he explained.

Ho: Klang (above) lies in the path of future development

He added that growth in the Kajang, Sungai Long and Bangi areas would also be slow, as most of the areas there have already been developed. “Island & Peninsular Bhd recently launched its Alam Sari in Bangi. Although just located outside the second tier, it has already garnered huge interest from people looking to upgrade,” he said.

On which area would remain prime in the years to come, Ho stated the area around KLCC would still be valued the highest, and together with Damansara Heights and Mont Kiara, remain the top areas for property investment in the Klang Valley. “Catching up is the KL Sentral area with Chua Ma Yu buying land there for more than RM1,000 psf, which is still relatively cheap compared to the KLCC area with prices of RM1,500 psf,” he added.

By theSun (by Yap Yew Jin)

Bina Goodyear fine-tuning plans

BINA Goodyear Bhd (Bina Goodyear) hopes to launch its RM65 million residential development in Bandar Sri Damansara, comprising 46 units of semidees, within the next six months.

“We are fine tuning the plans now, submitting the amendments for approval.
We will start work within the next one to two months,” said Lawrence Lau (pix), senior general manager of Bina Goodyear.

The project, on 8.6 acres of freehold land, had been delayed due to changes in plans, said Lau. Initial plans for the land were to develop medium to high-end apartments, which were then changed to “lower density condominiums” before its current plans to build landed homes. These
changes were made due to “changes in the property market”, Lau told PropertyPlus.

The semidees would have built-ups between 4,000 sq ft and 4,200 sq ft with an average price of RM1.4 million each. There would possibly be three or four units of bungalows within the development, which would take two years to complete.

Bina Goodyear also expects to launch its first joint-venture (JV) development within the next six to nine months. The 30:70 JV with Mutiara Goodyear Development Bhd (Mutiara Goodyear) is a residential project on 80 acres located in Melawati, Ampang, close to Selangor Dredging Bhd’s 20trees.

“The expected gross development value (GDV) is RM464 million. There will be 142 units of bungalows sized between 6,000 sq ft and 6,600 sq ft,” said Lau, adding that about 60 acres of the land is freehold while the rest is leasehold. Mutiara Goodyear would be managing the project, said Lau.

Bina Goodyear previously completed and handed over its maiden project, a commercial development, in 2004. Located in Taman Pusat Kepong, the development comprises 4-storey shophouses and 4- storey shopoffices.

“Property development (for Bina Goodyear) is pretty small now, but we will try to improve via a landbank and JVs,” said Lau. Although its core business is in construction, Lau said it could expect a higher percentage of income from property development in time to come.

According to Lau, the company is sourcing for land outside of Kuala Lumpur, but has not secured any deals at the moment.

By theSun (by Yeong Ee-Wah)

Looking to the ASEAN region

The forthcoming Malaysian Annual Real Estate Convention (MAREC ’08) will for the first time, have a regional theme: Regionalising The Malaysian Market - The Reality of Getting There The event is expected to generate business opportunities for practitioners within the ASEAN region.

To be held at the Sime Darby Convention Centre from Jan 11- 13, the event will have the support of a large number of corporate bodies which have registered their executives as participants.

Learn how to carve out a successful career in real estate at MAREC '08

One of the most exciting features of MAREC ’08 is the all-new parallel sessions within the convention aimed at certified real estate negotiators (CREN), negotiators and support staff of real estate agencies. In previous years, the Malaysian Institute of Estate Agents (MIEA), designed and structured the convention mainly for real estate agents. Negotiators and other agency staff had to rely on other MIEA programmes to gain knowledge and information.

Realising that attention to negotiator and support staff issues was lacking, MIEA decided to create a new session within the convention to cater to the needs of this group. Several speakers have been lined up to conduct these sessions. The speakers are senior members of the real estate fraternity and have been picked for their special skills and unique reputation in the market.

One of the topics to be covered in a parallel session is How To Be A Top Negotiator.

To guide and motivate participants, MIEA has managed to engage the services of one of its most illustrious members. Property consultant Stephen Tew has been involved in the real estate business for over 25 years.

He is a walking success story on how real estate can be a successful career if approached in the right manner. Tew started his career much like everyone else in the business, as a negotiator. Having worked hard and built up an impressive clientele, he decided to forge ahead with some partners and formed a real estate firm called The Golden Triangle. He again proved his calibre and helped built The Golden Triangle into one of the leading agencies of the day.

Several years ago, Tew decided to take on the challenge of forming his own sole proprietor-ship and ventured to form Hectares & Stratas. As principal, he has steered the company into a highly successful entity.

Tew will share with participants his secrets of carving out a successful career in real estate. He will talk about changing your mindset to achieve success and the need for discipline to make it.

“Although being a real estate negotiator is different from the average sales job, all negotiators should bear in mind that it is still a sales related job. To tap its potential and reap its rewards, negotiators have to approach the job with specific long-term goals,” says Tew.

Steven Tew

More than 250 participants have registered for MAREC ‘08 and the MIEA expects a full house. Discounted rates of RM538 for members and RM638 for non-members are still available until Dec 31.

For negotiators intending to take advantage of the parallel sessions, MIEA is offering a special rate. For a discounted price of RM438, CRENs and negotiators will be able to participate in the entire convention and will also be eligible to attend the parallel sessions.

For information, contact the Malaysian Institute of Estate Agents Secretariat at 03-77277477 or convention chairman Siva Shanker at 019-3372852.

Posted by The Star

RB Land set to ride on group synergies

SUBANG JAYA: RB Land Holdings Bhd is set to capitalise on group synergies after it is merged with IJM Properties Sdn Bhd under a new property division to be known as IJM Land Bhd.

“RB Land has a lot of township building expertise while IJM has experience in building condominiums,'' said RB Land managing director Datuk Soam Heng Choon.

When the merger is completed in March, the now separate divisions of RB Land and IJM Properties will be able to tap into each other's expertise as well as share staff for various projects.

The two divisions had projects in different parts of Malaysia, which complemented each other, Soam said.

For example, he said, RB Land currently did not have any projects in Penang but IJM Properties did.

“Currently, each one (division) is managing its own projects but in terms of processes and systems, it's all set by both companies' holding company, IJM Corp Bhd.

“So, now you cannot see the distinct difference, you can see all of us wearing the IJM (shirt) already,” Soam told StarBiz.

However, the group's overseas property projects will not come under IJM Land.

“IJM is already in India but the Indian property projects will not be parked under IJM Land.

“If we have overseas ventures in the future, we still have to decide where to park it,” Soam said, adding that at present RB Land was scouting for overseas projects.

”We don't have anything specific, but we have people exploring in China,” he said.

For the time being, RB Land will retain its name and logo until the entire corporate exercise is completed.

“So this name cannot change until this whole exercise is approved by the Securities Commission. We will go to our shareholders and get approval, then we will change the name to IJM Land,” he said.

One of RB Land's latest projects, the Saffron, is the final phase of freehold development in the Garden City Homes, in the heart of the Seremban 2 township.

The first launch of 244 units of 24ft x 80ft super-link homes at Garden City Homes was a sell-out. Other launches include 345 units of 50ft x 80ft semi-detached single and double-storey homes in 2005, which also achieved 100% sales.

Saffron is designed within a gated community with only 72 semi-detached units comprising 10 single-storey and 62 double-storey units.

Saffron was soft launched in November with selling prices ranging from RM310,800 for a single-storey unit and RM402,800 for double-storey units.

Another ongoing development is Bayu Sri Bintang Mastercraft Series, limited to 30 freehold luxury residences next to Kuala Lumpur's Desa Parkcity.

The four bungalows with built-up areas of 5,900 sq ft are priced from RM2.24mil to RM2.6mil while 26 semi-detached units, with built-up areas of 4,700 sq ft, are priced from RM1.47mil to RM2.12mil.

By The Star (by Loong Tse Min)

Boulevard group invests RM500mil in projects

KUCHING: The Boulevard Group of Companies, an invesment arm of diversified Miri-based Shin Yang Sdn Bhd, will invest more than RM500mil in two international-class hotel-apartment projects here and in Bintulu, and shopping malls in Bintulu and Miri.

Chief executive officer Yew Hoon said construction work for the proposed Imperial Hotel Apartment project at Jalan Datuk Tawi Sili here would start next year.

The project, which is expected to be completed in 2009, will comprise two towers housing 300 hotel rooms and 400 units of service apartments respectively.

The hotel and apartment towers form part of an integrated development, the other component of which is the newly-completed RM100mil Boulevard Shopping Mall.

The shopping mall, reputed to be Sarawak’s largest lifestyle mall, will have its soft opening tomorrow.

Yew said the mall had over 520,000 sq ft of retail space to cater for more than 230 speciality stores, over 20 specialty eatery outlets and a hypermarket and department store.

The entertainment centre comprises a 32-lane bowling alley, six cineplexes, a children playground and other facilities. There is also a lifestyle spa-yoga-gym-aerobics centre.

Yew said earthworks for the proposed 500-room Imperial Hotel Apartment and Boulevard Shopping Mall project in Bintulu had started.

“The project is expected to be completed in 2010,” he told StarBiz.

In Miri, he said, construction work for the proposed Imperial Plaza project would start next year. The proposed plaza - a one-stop lifestyle mall - will be operational in 2009.

Yew said the Boulevard group now owned and managed the 260-room four-star Imperial Hotel, Imperial Mall and Boulevard hypermarket and departmental store in Miri.

He said the Miri Boulevard Shopping Mall had won several state and federal awards, including Best Supporting Shopping Outlet (shopping complex) in 2001/2002 by Tourism Malaysia, and third placing in the Best Well-maintained Shopping Complex in Malaysia by Housing and Local Government Ministry in 2003.

Yew said timber-based Shin Yang was also involved in oil palm plantations, shipbuilding, property development and quarry operations.

By The Star (by Jack Wong)

Competition hots up in Vietnam

Malaysia property developers need to strategise landbank

The lack of quality housing and growing wealth in Vietnam's major cities, such as Ho Chi Minh City and Hanoi, have beckoned Malaysian property developers to stamp their mark there.

Firms such as Gamuda Bhd, SP Setia Bhd and Berjaya Land Bhd (BLand) have made inroads into Vietnam as part of geographical expansion and diversification in earnings base.

In January, Gamuda teamed up with Hanoi People's Committee to undertake the Yen So Park integrated development on 500 acres south of Hanoi.

The Vietnamese government recently gave Gamuda the green light to start work on the mammoth project – comprising a park, sewage treatment plant and a commercial centre – which the company estimated would have a gross development value (GDV) of about RM8bil upon completion in 10 years.

SP Setia's maiden project in Vietnam, EcoLakes at MyPhuoc in Binh Duong Province, near Ho Chi Minh City, signifies the company's strategy in diversifying its earnings base while capitalising on its award-winning “Eco” brand of green-themed developments.

More recently, BLand partnered Hanoi Electronics Corp to develop 405ha in Hanoi.

Both parties plan to set up a joint-venture company to develop the land into a mixed residential, commercial and industrial township with a GDV of US$2.5bil.

Following a recent visit to Vietnam, Kenanga Investment Research believes the property boon in Vietnam is underpinned by the lack of suburban homes.

“Demand is mainly driven by the 'three generations under one roof' factor, coupled with growing wealth from foreign direct investments (FDIs),” it said in a note yesterday.

The report said it was not surprising for BLand and SP Setia to obtain their investment certificates quickly, given that their township projects were located in suburban areas.

An analyst from the research outfit said it was difficult for homebuyers to buy properties outside the cities.

“People have to go through a ballot system to buy a property because there are not enough homes. The Vietnamese government plans to move people to the suburbs to make space for commercial development in the city,” she told StarBiz.

Vietnam's proximity to Malaysia, its political stability, coupled with its entry into the World Trade Organisation, she said, made it conducive for local property players to venture into that country.

Kenanga said the Vietnamese government was encouraging more FDIs by relaxing some regulations, such as allowing foreigners to hold up to 51% equity stakes in joint-venture companies compared with 49% previously.

The analyst, however, added that competition could heat up, given that developers from Singapore, Taiwan and South Korea had had a substantial head start in Vietnam's property market.

Malaysian developers may not have to go through the teething problems encountered by developers from the other countries, but their success will depend on how they strategise their landbank,” she said.

She added that strong partnerships would be key in determining the success of projects undertaken in Vietnam.

Another analyst said further exacerbation to the US subprime woes could potentially lead to a credit crunch that could impact on Vietnam's property market.

“Developers should be quite cautious over the long term,” he said, adding that Vietnam's property boom could result in an influx of developments.

By The Star (News analysis by Suraj Raj)

Cagamas in partnership with HK corporation

Joint development of mortgage guarantee businesses

Cagamas Bhd
has partnered Hong Kong Mortgage Corp (HKMC) in developing mortgage guarantee businesses in Malaysia and other countries.

It entered into an agreement yesterday with its Hong Kong counterpart to form a joint venture company in Malaysia, which will be equally owned by the two parties.

STRATEGIC PARTNERSHIP: Pang (left) and Ooi signing the joint-venture agreement in Hong Kong yesterday

chairman Datuk Ooi Sang Kuang and HKMC executive director Peter Pang signed the agreement on behalf of their respective corporations in Hong Kong yesterday.

At the outset, the joint venture will pioneer a mortgage guarantee programme (MGP) for both conventional and syariah-compliant mortgage loans originated by financial institutions in Malaysia.

The plan is for the MGP to start operation in early 2008.

The strategic partnership will leverage on the synergy between Cagamas' knowledge of the Malaysian and Islamic markets and HKMC's expertise and track record in pioneering mortgage insurance business in Hong Kong.

In a statement issued in Hong Kong yesterday, Cagamas said by providing mortgage guarantee cover to loan originators on a portfolio basis, the MGP will offer an effective tool for banks and other financial institutions in Malaysia to better manage the credit risk exposure from their mortgage lending business.

This mortgage guarantee arrangement will also help to develop the secondary mortgage market and promote home ownership in Malaysia.

With the successful launch of the MGP in Malaysia, the joint-venture company will look for opportunities to develop mortgage guarantee businesses in other markets in Asia and the Islamic housing finance markets.

"The longer vision is that our partnership will stretch to more joint developments of other mortgage business possibilities for us in Malaysia and the Asean region," Ooi said.

"We recognise great opportunities for mortgage guarantee businesses regionally beyond Malaysia, particularly in the Islamic housing finance markets," Cagamas president and chief executive officer Steven Choy said.

Cagamas plans to capitalise on its forte in structuring Islamic financial solutions to develop mortgage guarantee products for these markets, in line to promote Malaysia as an international Islamic financial centre.

HKMC chief executive officer James H. Lau Jr said with its partnership with Cagamas, it will embark on broadening its business horizon beyond Hong Kong.

"As we diversify overseas, we will be gaining new experience that will help the corporation better serve the banking sector and home-buyers in Hong Kong," he added.

The HKMC, which is wholly owned by the Hong Kong Government through the Exchange Fund, pioneered the Hong Kong-based mortgage insurance programme.

By New Straits Times

Putrajaya Perdana on stronger footing

New investors may help builder secure more job orders, a research report says

Builder Putrajaya Perdana Bhd's new shareholders from the Middle East and Singapore are likely to help it clinch as much as RM3.34 billion job orders in Johor and the Middle East.

Aseambankers Malaysia Equity Research in a report on Wednesday said Swan Symphony Sdn Bhd, which comprised a consortium of influential Middle Eastern investors, will bring new growth to the company with strong likelihood of penetration into the Middle Eastern construction market and job orders from Johor's Iskandar Development Region (Iskandar).

Of the current RM1.2 billion job orders to be billed over the next two years, Aseambankers analyst Chu Wei Fen estimates that Putrajaya Perdana will reap a gross construction margin of between five per cent and 10 per cent.

Swan Symphony is 51 per cent owned by Abu Dhabi-Kuwait-Malaysia (ADKM) Investment Corp and 49 per cent owned by Autron Investment Co Ltd.

On August 29 2007, Putrajaya Perdana entered into a memorandum of understanding with Abu Dhabi-based Aldar Properties to undertake construction works in the 890ha Node 1 of Iskandar.

The three consortiums, led by Mudabala Development Co, Kuwait Finance House and Mellenium Development International Co, agreed to invest RM4 billion for land and infrastructure in clusters 1, 2 and 3 in Node 1.

While Aseambankers is not rating Putrajaya Perdana, it fairly valued the stock at RM4.95 based on 13 times of its 2009 forecast earnings.

Chu said Putrajaya Perdana's positive attributes are its clean balance sheet and it being a niche builder of three energy-efficient buildings.

Having just built the Energy Research Centre in Bangi, Selangor, it is now undertaking the construction of the Energy Commission's low-energy usage building.

Putrajaya Perdana is also undertaking sizeable projects like the RM343 million Kuala Lumpur Pavilion serviced apartments, the RM276 million One Menerung Condominiums in Bangsar, Kuala Lumpur, and the RM248 million Universiti Teknikal Malaysia in Malacca.

By New Straits Times

Qatar property firm signs US$700m loan

LONDON: Qatar's Barwa Real Estate Co has signed a US$700 million (US$1 = RM3.35), one-year revolving Islamic loan, which was reduced from US$800 million after the deal was undersubscribed in syndication, banking sources said.

A banker said lenders' appetite for the deal was hit because of the increased cost of funding prompted by the credit crunch.

Support for the deal was also hit partly because as a non-sovereign, regional property company, the borrower has a limited number of relationship banks to call upon, the banker added.

Initial mandated lead arrangers are BNP Paribas, Gulf International Bank, JPMorgan, Standard Chartered Bank, The First Investor and Unicorn Investment Bank.

Proceeds will be used to finance the expansion of Barwa and its ongoing projects. The murabahah facility, which includes a one-year extension option, pays a profit rate of 90 basis points (bps). The extension fee is 10 bps. Lenders were invited to join at one of three levels.

Mandated lead arrangers were offered a participation fee of 30 bps for a commitment of US$75 million, co-arrangers 22.5 bps for US$50 million and lead managers 15 bps for US$25 million.

In August, Barwa signed a US$600 million, one-year murabahah financing via lead bank Gulf International Bank. That deal, which was increased from US$500 million after raising US$725 million in the market, included a two-year extension option.

Islam bans lending on interest, and in a murabahah deal a lender purchases a commodity and sells it to customer at a higher price, locking in profit.

Government-owned Qatari Diar Real Estate & Investment Co owns 45 per cent of Barwa.

By Reuters

SPV to develop Johor waterfront project

KUALA LUMPUR: The master developer of Nusajaya in Johor, UEM Land Sdn Bhd, signed an agreement with Dubai World’s unit, Limitless Holdings Pte Ltd, on Wednesday to form a special purpose vehicle (SPV) to undertake the development of the Residential North Precinct in Puteri Harbour, Nusajaya.

The subscription and shareholders agreement and development agreement will see the SPV, Haute Property Sdn Bhd, undertake the 111 acres of development with an initial investment of RM241.8 million.

Under the SSA, Limitless will hold the majority share of 60% of Haute Property and UEM Land will hold the remaining stake.

Residential North Precint is positioned to be an exclusive high-end residential enclave located at the northernmost section of Puteri Harbour. It will feature a mix of distinctive landed canal front homes with individual berthing, and highend condominiums that will be the first premier waterfront real estate enclave for Nusajaya and in the country.

UEM Land’s managing director Wan Abdullah Wan Ibrahim said the venture will help Nusajaya achieve its objective of becoming a world-class integrated urban development.

By Bernama