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Monday, January 21, 2008

Allstones in regional expansion mode

Allstones Group, which holds a major stake in Bluestone Group Malaysia, will team up with foreign real estate funds to venture into property development in fast growing cities in the region, including Kuala Lumpur.

Allstones chairman K. H. Sim said a group of local and foreign investors were keen to undertake projects in Malaysia, Thailand, Singapore and Vietnam.

K.H. Sim posing with a model of the Taragon Puteri KL

“We are working with some property funds in Thailand and Vietnam and are looking at a few possible deals,” he told StarBiz in an interview.

Allstones was set up in late 2002 to specialise in real estate development and investment in the South-East Asian region. Its stakeholders comprise both international and local investors.

He said foreign property funds were more adventurous to venture into more risky projects, including new developments.

Malaysia still does not have any robust property funds that are willing to invest in uncompleted projects.

“The various real estate investment trusts only invest in completed properties, as they are not ready to take any construction risk of uncompleted projects.

“If we have our own funds that are willing to get involved in new projects, AllStones will be more than willing to work with them to minimise the volatile currency risk when we venture into foreign territories,” Sim added.

In Kuala Lumpur, the company is in negotiations to acquire some parcels of land in the vicinity of the Kuala Lumpur City Centre (KLCC).

“There are still very good opportunities for developing quality residential projects in Kuala Lumpur, especially with the growing foreign interest in Malaysian real estate.

“The exemption of real property gains tax (RPGT) has raised the competitiveness of the local property market, and an increasing number of foreigners are keen to invest here.

“Compared with other cities in the region such as Singapore, Bangkok, Jakarta and Hanoi, property prices in Kuala Lumpur are still one of the lowest with good potential for price upsides,” he said.

According to Sim, although land prices in the vicinity of KLCC and in the inner city have appreciated substantially, they are still considered cheap to the foreign players.

“There are still quality pieces of land available and we are confident of making some good purchase if the pricing is right.”

Sim said the outlook for commercial properties, especially shop houses, retail complexes and office buildings, in the city's Golden Triangle was also positive.

There was also scope for the purchase of old office buildings for refurbishment to be leased out for rental income, he added.

Sim also sees good opportunities in Penang, especially with its status as a choice destination for participants of the Malaysia My Second Home programme (MM2H).

“Penang is attracting many MM2H participants and we foresee demand for real estate there growing rapidly.

“We are looking for suitable land of one to five acres for high-rise condominium development there,” he said.

Sim said AllStones was committed to bringing value to its customers through strict risk management practices and innovative ideas and by recognising the opportunities available in the local and regional markets.

By The Star (by Angie Ng)

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