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Saturday, May 31, 2008

SP Setia uses ECO approach

Top property developer SP Setia Bhd set up a Corporate Responsibility Think Tank late last year to map out a long-term strategy towards fulfilling its corporate social responsibilities.

For years, everyone in the public-listed group, from the directors to the most junior employees, have been involved in community work, preserving the environment and nurturing a caring community.

The best part is that staff members enjoy their voluntary work, with many even performing at the company’s annual dinner and other functions.

Datuk Voon Tin Yow (right) and executive director Khor Chap Jen.

Chief operating officer Datuk Voon Tin Yow said the group believes the time is ripe to take its social activism to the next level. “Our aspirations as a responsible corporate citizen can be summed up in a single statement: Building Sustainable Communities for All.”

Voon said the group’s activities and approach were reflected in the acronym “ECO” where “E” stands for environment, “C” for community and “O” for organisation.

Environment: Its focus is on the 3Rs – reduce, reuse and recycle – and it pledges to never develop projects on environmentally sensitive land.

It recently held a 13-week long Setia Indah Recycling Campaign initiated by Setia Indah Residence Club, Southern Waste Management (SWM) and the Johor Baru City Council. Some 1,200 residents turned up every week with old newspapers, magazines, plastic bottles and aluminium cans to exchange for cash.

Voon said 34 tonnes of material were collected during the campaign and SWM paid out RM9,348 to the residents.

“We take into consideration how our developments could impact the environment. For example, at Setia Eco-Park we try not to cut too much of the terrain but keep as much to the original contours as possible. We also try not to disturb the eco-system and change the drainage system too much,” he added.

Other efforts include designing offices that are energy-efficient such as the new Setia Corporate Tower and the Setia Eco Gardens sales office.

It also observes Earth Day 2008 at Setia Eco Gardens with a carnival, nature excursions and exhibition. It has also introduced energy-efficient homes and preserved the biodiversity and created living environments in projects such as Setia Eco-Park in Shah Alam and Setia Eco Gardens in Johor Baru

Community: SP Setia prides itself in being a developer of communities where people can live in harmony and interact closely with one another. With plenty of amenities, residents can “live, learn, work, play” in the same township.

In the case of its 4,000-acre Setia Alam in Selangor, the company has set aside some 200 acres for a commercial centre and amenities for the residents. In the adjacent Setia Eco-Park, it is building some 3,000 high-end homes and even built a link to the North Klang Valley Expressway.

“We also take into consideration the travel patterns of the residents and plan our development in such a way that residents do not generate too many trips. All our projects have amenities such as parks, schools, a sports academy and shopping malls. We also invest heavily to provide top-notch infrastructure for all our projects,” Voon said.

Its biggest contribution to society is via SP Setia Foundation, a charity trust established in January 2000 to provide financial assistance to needy individuals and charitable bodies.

A core activity of the foundation is the Setia Adoption Programme that has adopted 2,300 students of all races from 119 primary schools.

The programme provides school bags, stationery, school uniforms, books, school fees, canteen meals, and tuition fees worth RM700 to RM800 per pupil annually up to Year 6. A series of holistic activities like home visits, holiday camps, UPSR motivation camps, dialogues with parents and excellence awards night are organised under the programme.

Voon said the foundation had raised RM35.5mil since 2000, with group managing director and chief executive officer Tan Sri Liew Kee Sin personally donating RM300,000 a year. The group alone donates RM1.5mil a year to charity.

The foundation has spent over RM11.6mil in the Setia Adoption Programme from 2000 to 2007. In 2003, the programme was extended to secondary education where straight A scorers in the UPSR examination would each receive RM1,000 a year. At present the group has adopted 168 such pupils.

Organisation: Hewitt Associates, Asian Strategy of Leadership Institute and Malaysian Employers Federation have voted SP Setia the Top 10 Best Employer in Malaysia for 2003 and 2005.

Voon said its many staff benefits include interest-free study loans, free lunch boxes for all employees on normal working days (annual cost is RM60,000), three paternity leave days and 60 maternity leave days, staff discount on the purchase of a residential unit for every two years of service, merit-based performance appraisal system which rewards high productivity, outpatient medical treatment and check-up reimbursement for employees and their family members, including parents, spouses and children, and over 100 types of in-house and external training.

“We also have an Employees Prolonged Illness Scheme whereby the company will continue to give full monthly basic salary for the first two months of medical leave; half pay for the second two months and no pay for the third two months’ leave,” Voon added.

By The Star (by S.C.Cheah)

Inspiring reality through creativity and innovation

One of the kitchens exhibited, showing considerbale floor to ceiling storage space, large island countertops for food preparation and dining

Someone once defined creativity as the act of turning new and innovative ideas into reality.

In order to be creative, we need to be inspired, and one of the sources of inspiration for us in the property development industry is the Salone Internazionale del Mobile in Milan.

The Milan International Furniture Fair is an annual affair that attracts furniture designers from all over the world who use the fair as a venue to showcase their latest creations.

Visitors, who also come from all over the world, are thus given a glimpse of what they can expect for the home of the future.

A team of us from SDB visited the I Saloni 2008 last month.

The fair was held at Fiera Milano, also known as the Milan Fairgrounds, in Rho, just outside the city centre.

Fiera Milano is an indoor exhibition area with eight huge pavilions covering approximately 345,000 sq m.

There is a central boulevard equipped with walkalators and flanked by exhibition halls on either side.

The roof of the Fiera Milano resembles a sail, made from glass and steel, making it a sight to behold.

This year’s furniture fair featured 2,450 exhibitors. It was so well organised that in spite of the large turnout of 348,000 visitors, it did not feel overly congested.

The exhibition was divided into 20 exhibition sections – too vast to completely cover in just six days.

We, therefore, concentrated on the furniture, kitchen and bathroom exhibits, focussing on the high-end designer pieces in line with our local developments.

Each exhibitor had at least one or two attention-grabbing pieces that were notable in their design and innovation.

We observed that storage and the covering up of clutter was a big theme at the fair.

Flou, a well known company that designs bedroom furniture showed off cabinets that looked like large upright trunks.

Several variations of this were on display – one opened to reveal a vanity table with storage areas for personal belongings; while another opened up into a wardrobe; and yet a third concealed a writing table and bookshelf.

Renowned furniture house, Minotti, had very cleverly designed large seats with flexible back rests that could be detached from the chairs and re-attached in several different ways, making the chair a versatile addition to any household.

The furniture on display was generally stylish and well thought out. For example, there was a table made from an exceptionally thin and sleek piece of wood which, upon closer examination, revealed that it was, in fact, secured by bolts on the underside of the table.

The kitchens that we saw featured open plans with island counter tops.

Kitchen cabinets were mostly large, reaching from floor to ceiling and providing a generous amount of room for kitchen and pantry storage – the kind of set up that is ideal for keeping all kitchen wares out of sight, thus endowing the kitchen with a spacious feel.

In many displays, the kitchen was no longer tucked away, but was integrated into the living and dining areas.

Island counter tops, for example, were used as areas for food preparation as well as for dining and entertaining.

What was also interesting were the many different types of cabinet mechanisms – some cabinet doors would slide to the side when open, while others would slide sideways and back, allowing the door to be completely hidden from view when ajar.

There were also high-tech electronic kitchens on display – doors, for example, could be opened at the mere touch of a button; and in some cases, there was the total luxury of having a flat screen TV, a CD player and a radio incorporated into the kitchen set up – all very practical when you consider the kitchen as part of your living space.

A lot of thought had also been put into bathroom storage. Like kitchens, bathrooms have become an “extension” of the bedroom space.

A large proportion of the display featured space-saving ideas in bathroom accessories such as small side tables that open to expose storage space.

The bathroom cabinets were generally very sleek-looking - some had large sliding panels that provided storage options for all manner of bathroom necessities including towels and toilet paper – a de-cluttering process that again gives a more spacious feel to the bathroom.

The roof at the entrance of the Milan Fairgrounds

In addition to the fair, we managed to visit several furniture stores around Milan.

There, too, we found some engaging pieces. One kitchen cabinet manufacturer, Bulthaup, had cabinets, ovens and microwave ovens that were cantilevered from the walls.

Overall, the trip was an interesting one – we saw a good mix of interesting and appealing designs which were, above all, practical.

Our impression of Italian designers – in both the industrial design and fashion arenas – is that they have a natural flair for crafting first-class artistic creations.

The dimensions of their products, the quality of materials used and the designs were superior in many ways.

It is interesting to note that this design capital of the world attracts not only manufacturers and exhibitors to its fair grounds; it also draws a wide variety of young designers who flock to the fair for the SaloneSatellite, as well as various fringe events like the Zona Tortona held in the south western part of the city, where young designers participate in exhibiting their design ideas and projects.

By The Star (by Teh Lip Kim)

New Parkson store in Kuantan

KUANTAN: Parkson Corp Sdn Bhd is expecting sales turnover of RM40mil in the first year of operations for its latest Parkson outlet at East Coast Mall here.

General manager (marketing and merchandising) Raymond Teo said RM15mil had been invested in the outlet.

Raymond Teo at the store’s launch

“This is the third outlet in Kuantan and the 33rd in the country. I am also glad to note it is our third store launch within the first four months this year,” he said here recently.

Teo said Parkson would be opening two more outlets this year - one in Kuala Terengganu by mid-July and another in Kota Baru by year-end.

He said with the new stores, the company would see its retail space expand by 30% and be represented in every state except Perlis.

“This is a special year for us as it marks our 21st anniversary. We are still growing with the nation and remain committed to being the best department store for all Malaysians,” he said.

Teo said as the anchor tenant at East Coast Mall, Parkson occupied 105,640 sq ft over three floors.

Parkson would constantly innovate, adapt and change to stay ahead and further strengthen its position in the Malaysian retail scene, he said.

“We are proud to be the first commercial and travel square in the east coast to contribute to the Government’s initiative for the East Coast Economic Region.

“In line with our corporate social responsibility programme, we have adopted six parks nationwide. They including Taman Kejiranan in Jalan Teluk Sisek, Kuantan,” he added.

By The Star (by Simon Khoo)

Gamuda leads falls

SHARES of property developers with key investments in Vietnam fell yesterday, led by Gamuda Bhd, on fears that the weakening macro-economic outlook for that country would affect property sales.

"We are turning more cautious on Gamuda's property venture in Vietnam," Citigroup said in a report on Thursday, telling investors to sell the shares.

House buyers in Vietnam face higher borrowing cost after its central bank raised the key interest rate to 12 per cent this month.

The Vietnamese dong, bond and stock markets are all under pressure, with investors starting to cash out, worried by the outlook for the country's currency and its trade and current account deficits.

Some analysts, including from Wall Street bank Morgan Stanley, are afraid that Vietnam may be heading for a currency crisis because its central bank has kept the dong too strong as inflation soars.

"If anything, the focus of the potential impact will be on Malaysian firms with substantial exposure in Vietnam," Affin Investment Bank said in a report yesterday.

Earnings of these companies may be eroded, and they may have to provide for diminution in investments, it added.

Shares of Gamuda were the worst-hit on Bursa Malaysia yesterday among the Malaysian builders who have ventured into Vietnam.

Gamuda tumbled 18 per cent in its steepest decline in a decade to close at RM2.45, although it is Berjaya Land Bhd, which has bigger-scale projects and higher share of earnings pinned on Vietnam, which could be the one most affected by a weaker property demand there.

Berjaya Land shares dropped 3.8 per cent to RM5.10, while SP Setia Bhd, which also ventured into Vietnam recently, was down 5.7 per cent to RM3.96.

"Gamuda fell the most because it has the biggest foreign shareholding. Most of the selling in Gamuda yesterday was done by the foreign funds," said Phillip Capital Management Sdn Bhd chief investment officer Ang Kok Heng.

Ang believes that some investors may have overreacted.

"Investors were too bullish when Gamuda first went into Vietnam, and now they are overly bearish," he said.

Other builders with relatively smaller exposure to Vietnam also fell. WCT Engineering Bhd declined 6.3 per cent to RM3.26, while Ireka Corp Bhd was 3.7 per cent lower at RM1.05.

By New Straits Times (by Chong Pooi Koon)

Gamuda likely in for choppy times

PETALING JAYA: Construction and engineering group Gamuda Bhd may be in for some choppy times, given the company's exposure to the property sector in Vietnam, which is facing soaring inflation, a plunging stock market and a depreciating currency.

The group, through Gamuda Land Sdn Bhd, is launching the 808-acre Yen So Park, with a gross development value (GDV) of US$1bil, this year.

Its share price has dropped to the lowest in two months on concerns the company might face higher borrowing costs if property sales were delayed due to a tougher environment.

Similarly, the share price of two other developers exposed to Vietnam's property sector, Berjaya Land Bhd and SP Setia Bhd, have also come under selling pressure. Gamuda shares tumbled 53 sen to RM2.45, SP Setia fell 24 sen to RM3.96 while Berjaya Land lost 20 sen to RM5.10.

According to Vietnam's General Statistics Office, consumer prices jumped 25.2% in May from a year ago as food costs jumped 42.4% on a 67.8% rise in the price of grains, including rice.

The price of housing and construction materials rose 22.9% during the period.

Citigroup said in a report yesterday that it had turned more cautious about Gamuda's property venture in Vietnam due to the country's sharply deteriorating macro picture.

It has a target price of RM2.57 per share after excluding the contribution from Gamuda's Vietnam property sales over the next two years. It cut its earnings estimates for the company by 27.3% to RM432mil for 2009 and 36.4% to RM537mil for 2010.

Analyst Choong Wai Kee expects more headwinds ahead for the company's Vietnam projects, which will account for 58% and 82% of its property revenue in the next two financial years. Overall, property is expected to account for 39% and 45% of group revenue over the period.

“The delays in property sales in Vietnam could also mean that Gamuda would have to rely entirely on borrowings to fund its initial infrastructure outlay,” he said, adding that the earnings and target price had yet to factor in any potential delays in the double-tracking project.

Earlier this year, Gamuda and MMC Corp Bhd were jointly awarded the RM14.5bil electrified double-tracking rail project linking Ipoh to Padang Besar.

Choong said the company might have to review its generous dividend policy due to the delay in the sale of its stake in 40%-owned associate company Syarikat Pengeluar Air Selangor Sdn Bhd. The company is a privatised water supplier with a capacity of two billion litres a day.

Meanwhile, Aseambankers Malaysia Bhd analyst Wong Chew Hann told StarBiz that investors have over-reacted to Gamuda's overseas exposure.

“It's now well below the revised net asset value, even after taking out the overseas property earnings,” she noted, adding that foreign shareholdings had yet to be sold.

Wong said the fair value for the company, considering only the infrastructure assets and local property projects, should be RM3.

By The Star - StarBiz - (by Fintan Ng)

UEM World profit rises to RM60mil

PETALING JAYA: UEM World Bhd’s net profit rose 23.9% to RM60.75mil for the first quarter ended March 31 from RM49.02mil a year earlier, boosted by better performance at most of its divisions.

Announcing the results yesterday, the group said revenue rose 7% to RM1.47bil from RM1.38bil while pre-tax profit improved 44.6% to RM143mil from RM98.8mil before. Earnings per share rose to 4.38 sen from 3.53 sen.

Managing director and chief executive officer Datuk Ahmad Pardas Senin said in a statement the group had shown resilience so far this year despite the tough market conditions.

“The group’s overall operating performance remains positive but we remain mindful of the current macro-economic challenges,” he said.

Ahmad Pardas said material prices were going up and that it was crucial to closely monitor the group's costs and ensure the delivery of key projects.

“It is imperative that we achieve this in order to stay on course in meeting our targets,” he said.

UEM World said the engineering and other services segment saw revenue rising 7% to RM341.9mil from RM318.8mil.

Its construction segment saw a 24% decline in revenue to RM433.7mil from RM573.5mil in the previous corresponding quarter. However, it managed to contain the costs, resulting in a 17% improvement in net profit of RM11.4mil compared with RM9.7mil a year ago.

The group's healthcare operations reported a three-fold rise in net profit to RM18.9mil against RM6.3mil a year ago, underpinned by a 21% increase in revenue to RM309.7mil from RM256.1mil.

By The Star

Friday, May 30, 2008

Magna Prima targets fivefold jump in revenue

PROPERTY developer Magna Prima Bhd is targeting revenue to increase fivefold to RM1.6 billion in four years, contributed mainly by Magna City Kuala Lumpur, its five-in-one integrated lifestyle development.

The RM1.1 billion Magna City, on a 4.12ha freehold site along Jalan Kuching, will be developed in phases over four years, starting from the third quarter.

It will include shop-lots, signature offices, two blocks of serviced apartments comprising 800 units, a boutique hotel and a three-level retail mall.

"With a total current gross development value (GDV) of RM2.6 billion and estimated future revenue of RM1.6 billion, the group is confident of sustaining its earnings visibility for at least the next four years," chief executive officer Lim Ching Choy said after Magna Prima's annual general meeting (AGM) yesterday.

INTEGRATED DEVELOPMENT: Lim talks about Magna City at the AGM

The RM2.6 billion GDV will come from its 34.4ha in the Klang Valley, currently under development.

In the fiscal year ended December 31 2007, Magna posted a higher net profit of RM26.6 million compared with RM93,000 in 2006, largely due to sales from its six-star Avare condominium at the Kuala Lumpur City Centre and the Dataran Otomobil township in Shah Alam, Selangor.

Revenue jumped 326 per cent to RM344.44 million.

"We are taking this occasion (AGM) to unveil Magna City. We have opened it for registration and expect sales to be encouraging as it is the first five-in-one concept project in the northern corridor to meet the integrated needs of consumers," Lim said.

He added that the RM100 million boutique hotel will offer 250 rooms, while the RM445 million lifestyle non-conventional retail mall will be retained to strengthen its recurring income stream.

The serviced apartments are targeted at local as well as overseas buyers from Hong Kong, Singapore, Indonesia, India, South Korea and Australia, and those who have previously purchased Magna Prima properties.

The one-, two- and three-bedroom apartments will have built-ups of 600, 900 and 1,350 sq ft respectively, while the penthouses will offer 3,300 sq ft space.

The units will be priced from RM230,000, or RM350 per sq ft, to RM1.25 million each.

Magna Prima is also looking for land within the Kuala Lumpur city boundary to launch additional integrated developments. It is negotiating with a landowner and expects to conclude a deal for a piece of land in two months, Lim said.

"Our business model is to go for urban pocket-size developments where the GDV is of significant value.

"The group will focus on strengthening its position as a niche integrated lifestyle developer and leverage on the demand for exclusive products in prime locations to ensure sustainable growth in sales and earnings."

On the rising cost of raw materials, Lim said that Magna Prima has ventured upstream into the ready-mix concrete business to ensure regular supply of materials for its projects. It is also sourcing globally to reduce building costs.

Yesterday, shareholders approved the proposed final dividend of seven sen per share for 2007.

By New Straits Times (by Sharen Kaur)

For more information, please visit the official website:

Lifestyle project to drive Magna’s revenue

KUALA LUMPUR: Magna Prima Bhd is confident of clear earnings visibility at least over the next four years, thanks mainly to its newest project, Magna City.

Executive director and chief executive officer Lim Ching Choy said the company was targeting revenue of about RM1.6bil over the four-year period.

“The projected revenue will be largely driven by Magna City, our latest 5-in-1 integrated lifestyle project in Jalan Kuching,” he said after the company AGM yesterday.

The integrated development project will comprise shop lots, signature offices, serviced apartments, a hotel and a retail mall.

Construction on the 10.23-acre freehold site will be undertaken in four phases, with the first phase to start in July. The final phase is targeted for completion by the third quarter of 2011.

Magna Prima currently has a gross development value (GDV) of RM2.13bil.

On coping with challenges, Lim said Magna Prima had a policy of mitigating the effects of rising raw material prices by opting for bulk purchasing and hedging the purchase of building materials where possible.

“We have also ventured upstream into the ready-mixed concrete business to ensure a regular supply of materials to our projects besides also sourcing globally for materials to reduce building costs,” he said.

For the first quarter ended March 31, Magna Prima posted a net profit of RM5mil on sales of RM48.3mil from a net profit of RM1mil on revenue of RM25.4mil for the same quarter in 2007.

Among the company's newly launched projects is the U1 Shah Alam, a 3-in-1 integrated lifestyle development venture with GDV of RM135mil.

By The Star

Property scene in Vietnam still good

PETALING JAYA: The Vietnamese economy is going through a tough period with high inflation, a poorly performing stock market and a depreciating currency but Malaysian investors there are not unduly worried at the moment.

“A cooling off in the economy, which has recorded an average gross domestic product growth of 8% in the past three years, is a good breather for the country.

“The current snags will not tailspin into anything worrisome and Vietnam is on track for sustainable growth,” Berjaya Land Bhd chief executive officer Datuk Francis Ng told StarBiz yesterday.

He said Vietnam was attracting a huge inflow of foreign direct investments (FDIs), which totalled US$25bil last year. Most of the FDIs were in infrastructure development, manufacturing and property development sectors.

Such comments are comforting to investors who have over the past few months become anxious over the state of Vietnam's economy.

Fitch Ratings has cut the country’s credit rating, and its currency is taking a beating. Its stock market has been closed for the past few days due to a computer glitch.

But the main cause for concern is rising inflation, which in May topped 25%, and the measures taken to cool it.

TA Securities property sector analyst Kamarul Zaman Hassan told StarBiz that Malaysian property players had not been too concerned about the currency and inflation crisis now facing that country.

”The market is still there for property in Vietnam,” he said, adding that many investors saw the current turmoil as a short-term correction.

“Vietnam has seen a lot of inflows of funds in the past three years, so a correction was expected,” Kamarul said. “But in the long term, the players expect growth to continue as it has in the past three years.”

Ken Peng, a Citigroup analyst who covers Vietnam, said in a report dated Tuesday that the weakening of the dong was a result of severe foreign currency shortage.

“The central bank (SBV) is curbing foreign currency supply to preserve foreign reserves for refined petroleum imports and other contingencies,” he said.

The potential for further currency depreciation was worsening Vietnam’s balance of payments position, Peng said.

A host of Malaysian companies have made a steady beeline for Vietnam, one of South-East Asia's fastest growing economies. From rubber glove makers to can manufacturers, Malaysian companies have been increasing their exposure to Vietnam.

But the group that has made the biggest splash has been the construction and property players, which view Vietnam as a huge earnings kicker to their Malaysian-centric operations.

Berjaya Land has six projects in Vietnam – two in Hanoi and four in Ho Chi Minh City. The projects, with an estimated gross development value (GDV) of RM40bil, will span from 2009 to 2020.

Its maiden residential project, The Thach Banh New City project in Hanoi, with GDV of US$500mil, will be launched in the middle of next month.

“The take-up of recently launched residential projects in Ho Chi Minh City is still very strong. We are in Vietnam for the long term and are confident of the long-term growth of the economy,” Ng said.

A WCT Land Bhd spokesman said the Vietnamese government was very pro-active in assisting overseas companies develop designated areas in the country's cities.

“Fundamentally, the property market should still hold out quite well, given the huge population of 85 million, of whom more than half are less than 30 years old,” he said.

WCT Land, which has been granted an investment certificate to undertake a mixed commercial development in Ho Chi Minh City, will be launching next year the Platinum Plaza, which has a projected GDV of RM1bil. The project comprises a shopping mall, a hotel, two office towers and serviced apartments.

WCT Land is also in the process of getting its next investment certificate for the RM2bil Gateway Point on 8.4ha near the commercial business centre of Binh Thanh District in Ho Chi Minh City.

SP Setia Bhd is also on track to launch its maiden residential project, EcoLakes in My Phuoc in Binh Duong province, at the end of next month.

Last June, SP Setia teamed up with government-linked conglomerate Becamex IDC Corp to develop the RM2.5bil township.

Gamuda Land Sdn Bhd, too, will launch its Yen So Park integrated development on 500 acres south of Hanoi this year. The RM8bil project will comprise high-rise office towers, four- and five-star international hotels, a convention centre, shop offices and residential components.

By The Star - StarBiz - (by Angie Ng and Loong Tse Min)

Mah Sing Q1 net profit rises 25% to RM22.3mil

PETALING JAYA: Mah Sing Group Bhd reported 25% jump in net profit to RM22.31mil for the first quarter ended March 31 compared with RM17.9mil in the previous corresponding period.

In a statement, the company attributed the higher net profit on revenue of RM140.7mil to contribution from nine projects in first quarter compared with seven projects in the previous corresponding quarter.

Group managing director and group chief executive Datuk Seri Leong Hoy Kum said growth markets this year were medium- to high-end residential and commercial projects in good locations.

He said the company expected another good year underpinned by its unbilled sales of about RM1bil as at March 31, which was twice its revenue last year.

The company also had a remaining gross development value of RM2.98bil, which would ensure earnings visibility for seven years, Leong added.

By The Star

Gamuda, BLand down on Vietnam worries

KUALA LUMPUR: Property stocks Gamuda and Berjaya Land fell in the morning session Friday, dragged down by worries about their Vietnam ventures on the country’s worsening macro outlook and surge in inflation.

However, gains by blue chips including DiGi, BAT and Genting lifted the KL Composite Index.

At 12.30pm, the KLCI was up 5.99 points to 1,267.81. The FBM Emas added 17.18 points to 8,475.15 and the FBM Second Board gained 7.51 points to 5,795.44. The property sector index fell 5.45 points to 790.84.

Turnover was 371.88 million shares valued at RM950mil. There were 204 gainers, 291 losers while 254 counters were unchanged.

Asian markets were mixed, with Japan’s Nikkei 225 up 1.24% to 14,299.53, Singapore’s Straits Times Index added 0.55% to 3,178.08 while Hong Kong’s Hang Seng Index gained 0.56% to 24,520.69 but Shanghai’s A Share Index fell 0.27% to 3,559.12.

Vietnam’s stock market was the world’s biggest decliner when it fell 55% to 414 after a government report showed inflation had jumped the most since 1992. The stock exchange has yet to resume trading after a technical glitch over the past three days.

Light crude oil eased to US$126.27 (RM409.12) per barrel while crude palm oil fell RM61 to RM3,504 per tonne in line. The ringgit was quoted at RM3.24 to the US dollar.

At Bursa Malaysia, Berjaya Land-LB fell 55 sen to RM5 with 9,000 units done. IOI Properties lost 50 sen to RM9.90. Gamuda was the most active with 53.73 million shares done, down 38 sen to RM2.60 while Berjaya Land lost 30 sen to RM5.

Other decliners were Shell, falling 30 sen to RM10.90, MPI and Nestle 25 sen each to RM8 and RM29.50 while Proton gave up 20 sen to RM3.40 and Tradewinds 19 sen to RM4.96. Actively traded MRCB lost seven sen to RM1.35.

United Plantations fell 30 sen to RM13.80 but KL Kepong rose 40 sen to RM17.60 and Kulim gained 25 sen to RM9.10 and Kulim-WB 15 sen to RM6.45.

DiGi, BAT and PPB advanced 50 sen each to RM25.50, RM44 and RM11.50 respectively as they are viewed as defensive counters.

Genting rose 20 sen to RM6.50 and Resorts two sen to RM3.24, despite Genting’s first quarter net profit fell 33% to RM439.4mil.

By The Star (by Joseph Chin)

Gamuda tumbles 13pc

GAMUDA Bhd led shares of Malaysian property developers lower in Kuala Lumpur trading on concern their sales in Vietnam will be eroded by higher borrowing costs.

Gamuda, Malaysia's second-biggest builder by stock market value, tumbled 13 per cent to RM2.60 at 12.30 pm. Berjaya Land Bhd lost 5.7 per cent, while SP Setia Bhd, whose only overseas projects are in Vietnam, dropped 4.3 per cent.

Malaysian developers have increased investments in Vietnam, where the economy grew at the fastest pace in a decade last year. Gamuda's projects include the Yen So Park in Hanoi, a development of offices, luxury apartments and a convention center that the company values at US$1 billion.

"There may be de-ratings coming in on these property projects," said Jason Lee, who helps oversee the equivalent of US$2.1 billion as general manager of equities at Amanah Raya-JMF Asset Management in Kuala Lumpur. "Nobody really knows the impact. These property companies have some fairly big exposure."

Vietnam's central bank raised its key interest rate to 12 per cent on May 17 and the country is heading for a "currency crisis" because the bank has kept the dong too strong as inflation soars, Morgan Stanley said on May 28.

Citigroup Inc cut its target price for Gamuda 14 per cent to RM2.57, turning more cautious on the company's venture in Vietnam, analyst Choong Wai Kee said in a report today. He maintained his "sell" rating on the stock. Gamuda is based in Petaling Jaya, outside the Malaysian capital.

Ho Chi Minh Projects

SP Setia, Malaysia's biggest property developer, said on April 16 it plans to invest US$100 million in Vietnamese projects that may generate as much as 30 per cent of the company's profit and sales in three years.

Puchong, Malaysia-based SP Setia last year began developing the 558.4-acre (226-hectare) EcoLakes project in My Phuoc, 40 kilometers (25 miles) north of Ho Chi Minh City. The company also plans to develop 79 acres of land in Ho Chi Minh City.

SP Setia fell 18 sen to RM4.02, headed for the largest drop since April 3. Berjaya Land declined 30 sen to RM5, set for the biggest fall since March 10.

Berjaya Land said on February 14 it plans a debt sale that may raise RM875 million (US$270 million) to help expansion in Vietnam. The company said in December that the projects may generate sales of RM31.1 billion.

By Bloomberg

UEM Builders posts RM29m Q1 net profit

UEM Builders Bhd reported RM29.2 million net profit on RM595.8 million revenue in the first quarter ended March 31 2008, compared with RM17 million net profit and RM714.6 million revenue in the same period last year.

The firm said the lower revenue was mainly due to completion of major domestic construction projects in 2007 such as the Rawang-Ipoh electrified double track project and PLUS third lane widening project (Seremban-Ayer Keroh), while other new projects are in the start-up phase and have yet to generate revenue.

"We are happy with the results and will strive to achieve our targets despite a challenging business environment where significant cost escalation in material prices has become the norm," managing director Datuk Ridza Abdoh Salleh said in a statement.

He said the company is implementing various measures to counter the impact of price volatility in construction materials and fuel, including the inclusion of negotiated price escalation clauses in the construction contracts.

"Moving forward, the group is positive that the Penang second bridge project will be implemented as planned," he said, adding that progress of works on the project has been significant and the company has incurred more than RM200 million to-date.

By New Straits Times

Thursday, May 29, 2008

Condos for the Japanese

Teluk Air Tawar condo (artist's impression)

RAINE & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh is confident the time is ripe to market Penang properties more aggressively to the Japanese market.

His latest project is to sell three tower blocks at the Teluk Air Tawar condominium development in Butterworth to Japanese who are keen to have a vacation or second home close to three golf courses.

Located north of the Butterworth ferry terminal, the project site takes only 15 minutes to reach by car via the newly-built Seberang Perai Coastal Road.

Comprising 72 three-bedroom units in each of the three blocks, the project was revived this year and is undertaken by Welcome Properties Sdn Bhd.

Standard units have a built-up space of 1,328sq ft and come in two layout designs. They are all designed as corner units. The en bloc sale is estimated at RM30 million per block.

Geh, whose firm is in Penang, cites the scenic coastal location with a panoramic view of Penang island as an important selling point. The development site faces Tanjung Bungah and Tanjung Tokong on the island.

Location map of Teluk Air Twar condo project, dotted line in the map indicates the Seberang Perai coastal highway.

But the main attraction for targeted Japanese buyers is the proximity of the Teluk Air Tawar condo development to three golf and country clubs, namely, Cinta Sayang, Permaipura and Havard Jerai. They are all located to the north-east in Kedah. Cinta Sayang is only 20 minutes away by car.

And with the vibrant growth of commercial centres and retail outlets in Butterworth, residents will have no lack of shopping facilities such as the Tesco, Makro and Carrrefour hypermarkets.

As for food and beverage outlets, the highly popular Auto City commercial centre at Juru is a choc-a-block full of bars and restaurants offering all types of cuisines including Japanese and Korean as well as Western food.

With liberal conditions under the Malaysia My Second Home scheme, the Teluk Air Tawar development may soon become another Japanese enclave with spin-off services to cater to this expatriate community.

By The Star

Marketing property professionally

MALAYSIAN property developers seem poised to undertake megaprojects with world-class facilities but the country lacks marketing specialists able to sell effectively to international investors.

But property consultant Michael Geh, senior partner at Raine & Horne International Zaki + Partners Sdn Bhd, has a vision to help improve the marketing skills of not only his fellow real estate practitioners and agents but developers and their marketing staff.

Newly elected as the FIABCI vice president for network and marketing for 2008 to 2010, Geh will make a case at the federation's meeting this month in Amsterdam for internationally-recognised professional real estate courses to be introduced in Malaysia.

Based in Paris, FIABCI is the French acronym for The International Real Estate Federation. Some 100 national real estate associations representing 1.5 million professionals are affiliated to the federation.

“During my two-year term, I'm committed to do something to enhance the level of real estate marketing skills in Malaysia,” said Geh.

Geh pointing to the condo development site in Teluk Air Tawar

“As FIABCI's elected representative in the Asia-Pacific region for network and marketing, there are certainly a few things which I can contribute.

“In the Malaysian property sector, there are currently two crucial things lacking, international marketing skills and transnational marketing skills for both agents and developers. At best, such skills are at a very low level.

“Even if there are courses available, only bosses get to attend international seminars or meetings to learn about trans-national marketing skills. What about the marketing managers and other executives?”

Geh plans to get the approval of FIABCI headquarters in Paris to allow courses from their FIABCI University (www.fiabciuniversity. org) to be conducted here.

Said Geh: “I look forward to getting FIABCI University, which is like London's Open University, to conduct courses in Malaysia. This is to enable FIABCI members in this region to benefit from such a development.

“Another possibility is to have the Certified International Property Specialists (CIPS) course by the United States National Association of Realtors to be introduced here,” he said, adding that he qualified as a CIPS member in Bangkok two years ago.

There are only three people in Malaysia who have CIPS qualification.


Geh envisaged that with readily available opportunities to improve themselves, real estate agents will be motivated to act more professionally especially if they are duly rewarded.

He cited the Malaysia My Second Home scheme as a prime example of how better international marketing skills can promote the programme more effectively.

Professional agents will encourage foreigners who target South-east Asia as a possible base to relocate or buy a vacation home here.

Said Geh: “We also need world class real estate practitioners to handle world class projects.

“Developers in general have a limited understanding of international sales and their attitude towards their sales agents is equally limited. They don't really take it seriously.

“When it comes to international sales, developers deem it adequate to allocate 1% to 2% sales commission.

“In Singapore, Hong Kong and Europe, developers use estate agents as part of their marketing plans during the pre-launch and even the developmental stage. Obviously, the developers also have their own inhouse marketing team as the backbone to take care of details.

“Major international sales are conducted by highly-skilled estate agents with important networking connections. There are such factors as international co-brokering and referrals.

“Our real estate business is limited to a person to person basis. Currently, the fees are at a lowly 1% to 2% of the transacted price. We are simply not competitive enough to sell internationally except, perhaps, to Indonesia. International referrals are not forthcoming.”

In this situation, Geh pointed out that property websites flourish and developers are putting their money in such websites. But as skill levels increase, transactions will go back to a person-to-person basis and there will be a higher degree of networking success.

In mature markets, for example, in the U.S. and Europe, everything is done on a cobrokering basis. In the Philippines, the fee is 5% of the transacted price.

“For international transactions to be facilitated, we need to have 3% to 5% sales commission for international co-brokering and referrals.”

But Geh stressed that skills can't be gained “overnight”.

“We need to have professional training and expertise to be taught here. But some say that by promoting such courses, I'm just creating more competitors for myself. But I don't see it that way. By having such courses here, we can all benefit.

“Real estate transactions should be a high value, high trust and high fee form of business. These three elements must be there to promote greater professionalism.”

By The Star

IGB expanding Mid Valley development

KUALA LUMPUR: IGB Corp Bhd is expanding its Mid Valley City development, which would see the group launching two 42-storey blocks of condominiums.

Group managing director Robert Tan said the two blocks would have a gross development value of RM750mil. The units are due for launch by the third quarter.

Robert Tan

The condominiums, which would cost about RM650 per sq ft, would be the last component in Mid Valley City, he told reporters after the company AGM yesterday.

Tan also said IGB was looking to build a hotel each in Bangkok and Australia as it sought to expand its hotel business overseas.

The proposed RM200mil hotel in Bangkok would be undertaken by a joint venture between IGB and a foreign party. Under the joint venture, IGB’s 49% stake would cost RM100mil. The hotel would be managed by IGB’s hotel management arm, Cititel Hotel Management Sdn Bhd.

Construction cost was estimated at A$80mil to A$150mil, Tan said.

On its Micasa hotel property in Kuala Lumpur, Tan said IGB was keen to dispose of a 50% stake and was in talks with an interested party.

By The Star

IGB to start building St Giles hotels next year

IGB Corp Bhd hopes to begin construction of its St Giles hotels in Bangkok, Thailand and Sydney, Australia next year, which it will then manage.

"In Bangkok, we are trying to finalise the deal. We are looking for a strategic partner. We have identified and are in negotiations with a few parties," managing director Robert Tan Chung Meng said.

Tan said the hotel ownership will be on a 51-49 per cent basis, in which the Thai partner will hold the majority stake.

"It will be a 650-room four-star hotel. Our portion of the cost of construction will be RM100 million. We hope to finalise something within the next six months," he told reporters after the company's annual general meeting yesterday.

In Australia, IGB is negotiating to build either a A$80 million (RM248 million) 250-room hotel or a A$150 million (RM466 million) 450-room hotel.

These two new hotels will add to its Cititel and Cititel Express brands, MiCasa All Suite Hotel in Yangon, Myanmar; and New World Hotel in Ho Chi Minh City, Vietnam. IGB also owns and operates the Boulevard Mid Valley and The Gardens Hotel in Mid Valley.

Asked about the status of plans to sell the 242-suite MiCasa All Suite Hotel in Kuala Lumpur, Tan said that it has held talks for the sale of a 50 per cent stake in the hotel.

Although he declined to reveal how much the 50 per cent stake may be worth, it is believed that the entire property could go for as much as RM230 million.

Meanwhile, IGB said that it will launch the final phase of the Mid Valley City project by the third quarter of 2008.

"The final phase consists of two 42-storey residential blocks with different configurations. The gross development value for the project is estimated to be RM750 million," he said.

IGB plans to sell the property from RM650 per sq ft onwards.

In the current year ending December 31 2008, IGB expects its asset management and hotel business to be the main profit contributor.

By New Straits Times (by Vasantha Ganesan)

Wednesday, May 28, 2008

Sunrise to set KLCC land price record

PRIME SITE: Wisma Angkasa Raya is a stone’s throw from the Petronas Twin Towers.

SUNRISE Bhd has proposed to buy a piece of prime land in the heart of Kuala Lumpur, a deal that will set a new record for land prices in the Kuala Lumpur City Centre (KLCC) area.

The freehold 69,171 sq ft land houses the 29-year old Wisma Angkasa Raya, and is a stone's throw from the Petronas Twin Towers.

Sunrise plans to buy the land for about RM179 million, or RM2,588 per sq ft (psf), higher than what YTL Corp Bhd paid for 0.4ha in Jalan Stonor earlier this year.

"The price is undoubtedly a new record for Kuala Lumpur," Aseambankers analyst Ong Chee Ting wrote in a report yesterday, adding that it is a fair price.

The deal reflects the bullishness of Malaysian developers as the capital grapples with a shortage of office space.

The land "has potential to be redeveloped into an upmarket commercial development", Sunrise said in a statement to Bursa Malaysia on Monday.

The main risk to the project is that Kuala Lumpur may have too much office space by 2010.

Nevertheless, that risk is offset by the fact that the site is a good location, Ong noted in his report.

Under the deal, Sunrise is buying all of Tanah Tuah Development Sdn Bhd for RM27 million cash from Reliance Pillar Sdn Bhd and Lembaran Segimaju Sdn Bhd.

Tanah Tuah has an interest in the land as it signed a deal on January 14 this year to buy the property for RM152 million.

However, that deal is not completed yet. Sunrise did not identify the original landowner.

In addition, Sunrise will settle a RM30.4 million loan given to Tanah Tuah by Reliance Pillar and Lembaran Segimaju.

Ong calculates that if Sunrise's new property can be sold at RM1,300 psf, there is still a hefty 30 per cent margin to be made.

"This translates into potential gross development value and development profit of RM900 million and RM208 million respectively," he said.

Reliance Pillar and Lembaran Segimaju bought into Tanah Tuah this month for about RM40 million.

By New Straits Times (by Presenna Nambiar)

KrisAssets eyes foreign properties

KRISASSETS Holdings Bhd, the owner and operator of Mid Valley Megamall in Kuala Lumpur, may inject foreign retail and commercial assets into the company.

Depending on the location and value of the assets, KrisAssets may buy the properties on its own or with a partner.

"We are always looking for opportunities to acquire. We are in negotiations with foreign parties in China, India and Vietnam. They came to us and asked us to do a joint venture," group managing director Robert Tan Chung Meng said.

TAN: We are in negotiations with parties in China, India and Vietnam

"We are able to explore opportunities in the US because of the subprime issues. Otherwise, the US was not in our radar. We are looking at completed retail and commercial properties there," he said.

Speaking to reporters after the company's annual general meeting yesterday, Tan said the company was also in negotiations with parties from Europe and the UK.

Tan is also looking at property development opportunities in these countries for IGB Corp Bhd. IGB owns 74.9 per cent of KrisAssets.

Tan added that the recently opened high-end retail component The Gardens Mall, with a net book value of RM442.37 million, will be injected into KrisAssets when it achieves profitability. The Gardens in now owned by IGB.

"The Gardens is showing a 10 to 15 per cent improvement month-on-month. This is still not to our mark, but when we are in the high-end business it will take time to grow the business ... but it will come," Tan said.

Tan who described The Gardens' occupancy as "not bad" at 90 to 95 per cent, however, said that the mall needed higher visitation and higher spending. "There is a shortfall in our targets," he said.

A bigger budget has been set aside this year to help improve The Gardens' performance and results are expected within the next two to three years.

The existing components within Mid Valley City and the addition of five-star The Gardens Hotel and two office blocks with an anticipated 30,000 to 40,000 occupants will lend support towards the performance of the mall.

According to Tan, KrisAssets takes the form of a real estate investment trust. As such, it will look at injecting The Gardens within two to three years when it achieves earnings before interest, taxes, depreciation and amortisation.

On plans to inject commercial properties, Tan said: "There are a few possibilities. We may keep KrisAssets purely as retail or we could add offices as well."

Another company may be set up to spin off the commercial properties, which could happen in 2009 or 2010.

Meanwhile, based on the current status of the Malaysian economy, Tan expects the commodity market to have a positive impact on the performance of Mid Valley Megamall.

The RM1.75 billion mall receives between 30 million and 35 million visitors annually. The company hopes to outdo the internal target set for itself.

In the financial year ended December 31 2007, KrisAssets posted a net profit of RM122.74 million on the back of RM207.09 million in revenue.

By New Straits Times (by Vasantha Ganesan)

Sunrise to redevelop Wisma Angkasa Raya

PETALING JAYA: Sunrise Bhd is believed to be acquiring Wisma Angkasa Raya, located opposite the Petronas Twin Towers in Kuala Lumpur City Centre (KLCC), for redevelopment into an upmarket commercial project.

In a filing with Bursa Malaysia on Monday, the property developer said it had entered into an agreement with Reliance Pillar Sdn Bhd and Lembaran Segimaju Sdn Bhd to acquire Tanah Tuah Development Sdn Bhd for RM57.4mil.

Sunrise will pay RM27mil in cash and make a RM30.4mil shareholders' advance to Tanah Tuah. It has paid a deposit of RM5mil.

According to the announcement, Tanah Tuah has registrable interest in a piece of freehold land within the KLCC.

“Tanah Tuah represents a good investment as the property that is being acquired by Tanah Tuah has potential to be redeveloped into an upmarket commercial development, which will further strengthen the group's presence in a prime location,” Sunrise said in the statement.

Tanah Tuah had in January agreed to buy the 1.6-acre land from the original owner for RM152mil but the agreement has yet to be concluded.

Sunrise said it had taken the necessary legal measures to safeguard its interest in the event the company's agreement with the vendors was completed before the completion of the accord between Tanah Tuah and the original owner.

Wisma Angkasa Raya, which is around 29 years old, is Kuala Lumpur’s first high-rise office building. The unencumbered property is a 24-storey commercial building comprising a 20-storey office tower and a four-storey podium with two basement carparks.

It has a total net lettable area of 167,728 sq ft and an occupancy rate of 96.4%.

Aseambankers research analyst Ong Chee Ting said that assuming Tanah Tuah had taken a 100% debt funding for the purchase, Sunrise’s RM27mil cash payment to the vendors would have raised its acquisition cost to RM179mil, or RM2,588 per sq ft.

“Even at RM2,588 per sq ft, it is considered a fair price. Assuming that KL City Hall grants Sunrise a 10 times plot ratio for redevelopment, similar to the upcoming Menara YNH in Jalan Sultan Ismail, the price per plot ratio works out to RM259 per sq ft.

“Adding RM500 per sq ft per plot ratio for the construction of an upmarket development and factoring in an efficiency ratio of 80%, the total construction cost comes to about RM1,000 per sq ft per net saleable area,” Ong said.

Given that KL City Hall has raised the plot ratio for commercial development to nine to 10 times now compared with Wisma Angkasa Raya's three times, Ong said the redevelopment could yield a gross development value of at least RM900mil.

“If Sunrise’s new property can be sold above RM1,300 per sq ft, there's still a 30% margin to be made. This translates to a development profit of RM208mil,” he said.

Ong said the risk for the redevelopment plan was a possible oversupply of new office space in Kuala Lumpur by 2010, although this risk is “mitigated by the property’s prime location''.

By The Star (by Angie Ng)

Top HK developer ousts chairman

HONG KONG: Top Hong Kong developer Sun Hung Kai Properties ousted its chairman, Walter Kwok, yesterday in a family feud that has rocked one of the city’s best regarded blue-chip corporations.

Kwok’s departure after nearly two decades at the helm of the US$42 billion property company caps weeks of sensational media coverage, with Kwok accusing his brothers and fellow directors of having him diagnosed as bipolar, and reports of an extra-marital affair.

The saga offered a rare behind-the-scenes glimpse into the occasional power struggles among Hong Kong’s corporate glitterati. Sun Hung Kai was named in a Euromoney poll as Hong Kong’s best-managed firm in 2007.

Kwok, 57, who took leave of absence on Feb 18, has accused his brothers Thomas and Raymond of trying to have him dismissed illegally, but a Hong Kong court on Monday rejected his bid to block a vote by the board.

The brothers’ mother, 79-year-old Kwong Siu-hing, was named as chairwoman, Sun Hung Kai said yesterday. Walter would be a non-executive director, a symbolic role with no real power.

Walter Kwok said in a statement that he felt “much regret" at the decision, which he said was based on “superficial reasons, totally ignoring my hard work and contribution to the company during the past 18 years.”

Kwok however said he would “continue to closely monitor the operations of the company to safeguard the best interests of shareholders,” in his role as a non-executive director.

Sun Hung Kai shares climbed 0.9 per cent on yesterday, adding to Monday’s 1.8 per cent rise, as the power struggle looked to be heading for a resolution, but the stock is still down more than 10 per cent this month, wiping over US$4 billion off its market value.

Citigroup’s Tony Tsang slapped a sell recommendation on Sun Hung Kai in a May 18 report, citing “potential instability” of the firm’s management as a factor that might lead to delays of key property projects later in the year.

The Kwok brothers were ranked Hong Kong’s second wealthiest by Forbes magazine in January, with a combined fortune of US$24 billion, behind Asia’s richest self-made billionaire Li Ka-shing.


Over the past four decades, Sun Hung Kai has built some of the city’s most exclusive high-rises, including luxury hilltop apartment blocks and harbour-front skyscrapers.

Its International Commerce Centre, on the Kowloon peninsula, will become the world’s third tallest tower when completed, Raymond Kwok said last year.

Walter Kwok filed a suit against his brothers this month to stop them firing him, arguing that any attempt to remove him would constitute a breach of agreement.

The tycoon added that he believed his brothers had proposed his dismissal because of health concerns, linked to a diagnosis of bipolar disorder that he was contesting.

Local media, however, have reported that the rift may have resulted from Walter’s close friendship with a purported mistress who exerted an untoward influence on Kwok’s running of the firm — one of the city’s largest land owners and employers.

“In the past few days, some people have spread dishonest opinions to mislead shareholders over my mental state and of hindering the running of the company,” he said in a statement yesterday.

“These rumours have destroyed my own legitimate right to govern Sun Hung Kai.” On Friday, the high court rejected Walter’s application for an injunction, saying it was not a decision for the court, and on Monday again rejected an attempt by his lawyer to re-apply.

Kwok expressed “utter disappointment” with the decision.

Family disputes are rarely so acrimoniously aired in public in Hong Kong’s tight-knit corporate community.

Another exception is a marathon dispute over the multi-billion dollar estate of Nina Wang, formerly Asia’s richest woman and one of the city’s most colourful tycoons, which has not yet been resolved.

By Reuters

Tuesday, May 27, 2008

Ken Holdings plans projects worth RM650m

PROPERTY developer Ken Holdings Bhd plans to develop half of its 56ha land in Shah Alam, Selangor, and Bangsar in Kuala Lumpur, with a projected total gross development value of RM650 million.

"This is sustainable to the group over the next four to five years," managing director Tan Boon Kang said after the group's annual general meeting in Kuala Lumpur yesterday.

TAN: All house prices will ultimately go up due to escalating prices in raw materials.. we will have to eventually pass these down to purchasers

The group is developing a low-cost apartment and shop lots on the Shah Alam land, while a high-end serviced apartment is being developed in Bangsar.

Another 26ha of land area is located in Perak, Penang and Genting Highlands, Pahang.

Ken Holdings, which has about RM22 million cash in hand and zero gearing, is continuously looking to acquire more land especially in Klang Valley and other cities in the country.

"We are always on the lookout for more land, but there is nothing solid right now as we are still focusing on our existing land bank," Tan said.

Commenting on whether the high price of raw materias will effect the group's performance in future, Tan said: "All house prices will ultimately go up due to escalating prices in raw materials. We will have to eventually pass these down to purchasers."

Ken Holdings posted a RM8.4 million net profit for its financial year ended December 31 2007 against RM3.9 million previously. Revenue was reported at RM60.2 million.

Tan said he expects Ken Holdings to maintain its performance this year attributed from existing projects.

By New Straits Times

EPF sees RM16m return from Putrajaya building

GOOD INVESTMENT: Samsudin (centre) and Johari (right) view 26 Boulevard. With them is Chief Executive Officer Putrajaya Holdings Sdn Bhd Azlan Abdul Karim (left)

The Employees Provident Fund (EPF) expects a minimum annual return of RM16 million from the purchase of its latest commercial building in Putrajaya for RM258 million.

EPF signed a sales and purchase agreement with Putrajaya Holdings Sdn Bhd yesterday to buy the 26 Boulevard building in Precinct 3, Putrajaya.

"We expect the income from this building to produce an annual net yield of more than six per cent based on the purchase price," said EPF deputy chief executive officer for investment Johari Abdul Muid at the signing ceremony yesterday in Putrajaya.

EPF expects its income from its real estate investments to grow by 77 per cent to RM150 million this year, said EPF chairman Tan Sri Samsudin Osman during a press conference.

It made an income of RM85 million last year from real estate, 37 per cent higher than RM62 million in 2006.

EPF invested RM1.78 billion in real estate in 2007 or just 0.6 per cent of its total investments. Its portfolio includes properties such as the SOGO shopping mall, Wisma KFC and a building in KL Sentral.

Samsudin said EPF did not have immediate plans to invest in foreign real estate as it wanted to focus on the local market. However, EPF has plans to invest in foreign Islamic bonds. It is now studying its options.

As for 26 Boulevard, more than 90 per cent of the office and retail space in the building has been taken up.

"The occupants include government departments and also those from the private sector," he said.

The tenants include a department from the Ministry of Health, People's Volunteer Corp, Civil Defence Department, NZ Retails Sdn Bhd and a private clinic.

The 26 Boulevard is a low-density 13-storey building with a 0.812ha foot print and 47,890 sq m of gross floor area.

By New Straits Times (by Jeeva Arulampalam)

SATS investing RM70m in Aero Mall

SENAI: Senai Airport Terminal Services Sdn Bhd (SATS) is investing RM70mil in the Aero Mall project, Malaysia’s first stand-alone and external airport mall.

Of the mall’s total space of 9,290.304 sq m 100,000 sq ft), 3716.121 sq m (40,000 sq ft) is retail space and the balance the concourse.

SATS general manager finance and retail development Chan Kwai Yew said the company wanted to position and market Aero Mall as the area’s new lifestyle hub.

Chan Kwai Yew showing an artist’s impression of Aero Mall

“Shopping, dining and entertaining at airports is getting popular now as airports are no longer just for air travellers,” he told StarBiz recently.

The groundbreaking ceremony will be held today.

The project is scheduled to complete in 18 months.

Chan said the best example of such a concept was Terminal Three at Singapore’s Changi Airport which had successfully attracted non-air travellers and residents from nearby areas to shop and dine there.

He said Aero Mall’s target markets were the business community, employees in the nearby industrial estates and the population in the Senai-Kulai area.

Chan said the mall would be connected to the present airport terminal building and constructed on the existing open air parking area. A new basement parking area would also be built.

He said the new mall, an extension of the airport’s present retail segment, would offer air and non-air passengers more choices to shop and dine, adding that the airport received overwhelming response when it introduced mid-level lifestyle products.

Chan said between 4,000 and 5,000 air passengers currently used Senai airport, which provided an active market for the existing 25 retailers.

He said among the new mall’s outlets were Secret Recipe, Kyros Kebab, Chocz, SASA Hong Kong International, MPH Bookstore, KFC, Laksa Shack, Starbucks, Nationwide and FedEx.

Concurrently SATS would also be launching the Senai Free Zone (80.937ha) and Senai Aviation Park (40.468ha), he said, adding that both would create some 20,000 job opportunities.

The Free Zone will house a mixture of SME operations, warehouses and logistics for parts and components that could be exported via air cargo at Senai Airport.

The Aviation Park focuses on maintenance and repair operations for the maintenance of smaller aircraft engines and avionic products like radios and meters.

By The Star - StarBiz - (by Zazali Musa)

Tunas Manja project ready next year

KUANTAN: Tunas Manja Group’s RM110mil flagship project, AmberHill in Taman Melawati, Kuala Lumpur, is scheduled to be completed by June next year.

Located on a 3.8ha site, the gated community project offers 20 bungalows and 30 semi-detached houses set in elevated ground and lush green surroundings.

According to managing director Y.K. Chin, AmberHill comprised luxurious homes of innovative designs and layout with quality finishing.

He said each home was smart equipped with remote controls and monitoring with built-in home alarm systems and Internet connection.

“The bungalow offers a land area of 6,500 to 14,000 sq ft and has seven or eight spacious bedrooms, a private outdoor pool and has three levels.

“The semi-detached home has seven spacious bedrooms, a built-in jacuzzi and also comprises three levels,” Chin said in an interview recently.

The semi-detached units are priced from RM1.6mil to RM1.9mil while the bungalows are priced from RM3mil to RM3.2mil.

Chin noted that since AmberHill was located on elevated ground, the company had taken extra efforts to ensure the project was a safe and solid one.

“To ensure sound slope protection, micro-piling was adopted to preserve the environment from harsh construction work.

“Although micro-piling is relatively costly, it is money well spent as we prefer to invest in the safety of the houses we build,” he added.

Tunas Manja started in the early 1980s as a supermarket operator that later branched out to food processing and wholesale retailing.

In 1992, Chin, who has a background in civil engineering, entered the property development scene with a mixed development project called Taman Tunas Manja in Kuantan.

Since then, it has completed a mixture of residential, commercial and industrial properties, all in Kuantan and its surrounding area with a total sales value of close to RM175mil.

The group’s property development arm, Tunas Capital Sdn Bhd, has several ongoing projects, including the RM91mil D’Embassy in Kuantan, comprising one condominium block and one serviced apartment block.

Chin said the group was always looking for opportunities to expand its property development activities in the Klang Valley but limiting its ventures with smaller projects as they would be easier to plan and manage.

By The Star (by Roslina Mohamad)

RM650m order book for Ken Holdings

PETALING JAYA: Ken Holdings Bhd has projects in hand with a gross development value (GDV) of RM650mil, which would keep it busy for the next five years.

Managing director Tan Boon Kang said the group was also looking for land in the Klang Valley, Penang, Perak and Terengganu to add to its land bank.

Tan Boon Kang

“We are looking for good land bank in these areas but have no plans to venture overseas at the moment due to global economic uncertainties,” he said after the company AGM yesterday.

The projects in the pipeline include an exclusive serviced apartment with a GDV of RM120mil in Bukit Bandaraya, Bangsar, extended low-cost apartments and shoplots with GDV of RM30mil as well as a mixed development project with a GDV of RM400mil, both in Shah Alam.

“Our Ken Bangsar project, which is expected to contribute favourably to revenue and profit, will be completed early next year,” Tan said.

Last year, the company had acquired two pieces of land in Taman Tun Dr Ismail, Kuala Lumpur, for a commercial development, which would partly be used to house its corporate office.

“We will use about 10% of the office space for our own use, while the rest would be rented out,” Tan said, adding that the development would provide long-term sustainable income and revenue in view of the growing demand for commercial space in that area.

The company also has undeveloped land in Perak and Penang.

“We have about 50 acres (in Perak) near the Lata Kinjang waterfall that is surrounded by Government-owned land,” Tan said, adding that the company was waiting to see how the new Perak government developed the land.

He also said the company planned to develop 13 “very high-end bungalows'' on 2.9 acres in Batu Ferringhi in Penang with a proposed GDV of RM60mil.

On the company’s outlook, Tan said any future projects undertaken by would be affected by rising building materials cost.

“But we would not badly affected as we do not have financing costs,'' he said, adding that the company currently had cash in hand of RM22mil.

By The Star

Monday, May 26, 2008

Generous Symphony Heights by Hua Yang

Chan Ai Cheng with a model of Symphony Heights.

HUA YANG Bhd may be a medium-sized property development company but it is generous when it comes to pampering its purchasers.

This is evident with its latest project, the Symphony Heights serviced apartment in Selayang.

It is offering six practical layouts, quality finishes and condominium facilities such as free-form swimming pool, poolside cafeteria, gymnasium and multi-purpose hall from only RM135,200.

S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng said the project had attracted more than 600 registrants, and close to 50 units had been booked just through soft selling and word of mouth.

“We expect good take-up in view of the attractive price and fantastic location after marketing begins shortly,” she said, adding that the preview launch would be July 6 to 8.

S.K. Brothers is the exclusive agent for Symphony Heights that is located off the Batu Caves roundabout, at the Middle Ring Road 2 (MRR2) and Jalan Ipoh interchange.

The leasehold project, with a gross development value of about RM160mil, comprises 946 units of serviced apartment in three blocks of 29, 30, and 33 storeys.

Phase 1 layout will include units of 863 sq ft (two bedrooms), 879 sq ft, 950 sq ft (three bedrooms) and 1,246 sq ft (3+1 bedrooms).

Chan said Symphony Heights was easily accessible to the Kuala Lumpur city centre and other parts of the Klang Valley via Jalan Ipoh and MRR2 connecting to the Damansara-Puchong Highway, Karak Highway, New Klang Valley Expressway, Elevated Highway, North-South Expressway, and Kuala Lumpur-Shah Alam Expressway.

“It is within an established neighbourhood with plenty of amenities such as hypermarkets, shopping centres, hospitals, schools, banks and entertainment and good outlets,” she said.

The project is next to the SRJK (C) Kheow Bin Batu Caves and is behind Hua Yang's earlier project, Medan Selayang (six and eight-storey shop offices) that was completed in 2005 and is almost sold out.

“It's the best value-for-money property at Selayang's finest location,” said Chan, adding that residents of Symphony Heights could also enjoy panoramic views of the Kuala Lumpur city skyline and the Selayang/Templer Hills.

Hua Yang chief operating officer Ho Wen Yan said there would be a 10% “early bird” discount, no legal fee charged for the sale and purchase agreement and RM500 down payment during the promotional period for the first launch of 544 units.

“Symphony Heights is located in a fast-growing area with direct access to the MRR2. We have designed it to cater to end-users,” said Ho, adding that the Phase 1 units had a north-south orientation, modern contemporary design and are rectangular in shape, allowing maximum use of space.

The price of a 1,246-sq-ft unit is about RM216,000 (before 10% rebate).

S.K. Brothers chief executive officer Charlie Chan said people should buy a unit at Symphony Heights, as it is not even 10% of the price of some high-end condominiums in the city centre. “And yet, this project is so accessible to the city,” he said.

Hua Yang, listed on the main board of Bursa Malaysia, was incorporated on Dec 28,

Its other ongoing projects include Taman Pulai Indah in Johor as well as Bandar Universiti Sri Iskandar and Metro Pengkalan in Perak.

Most of its previous projects are in Perak involving terrace houses, shops and light industrial factories. Its Ipoh projects include those at Taman Mewah in Tambun; Taman Tasek Mewah, Taman Pinji Wani, Taman Pinji Seni, Anjung Bercham Megah and Anjung Bercham Elit in Bercham; and some projects in Batu Gajah.

In Selangor, Hua Yang's completed projects include Taman Serdang Raya in Serdang, S.B. Jaya Industrial Park, Taman Setapak Jaya in Kuala Lumpur, and Jalan Connaught Bridge in Klang.

By The Star (by S.C.Cheah)

Need for holistic master plan

A row of houses in Bukit Jelutong township.

DEVELOPERS with projects in the northern corridor of the Klang Valley should take advantage of their sizeable land bank by adopting a holistic master plan approach in their development plans.

As a number of big property and plantation groups such as Sime Darby Property Bhd, Kuala Lumpur Kepong Bhd (KLK), Asia Pacific Land Bhd (AP Land) and GuocoLand Bhd own large tracts of land in the corridor, it makes sense to have the projects planned well from the very beginning to ensure they grow into vibrant growth centres.

Sime Darby Property has more than 8,000 acres of former plantation land in the corridor converted for property development.

The land bank, located along the 25km Guthrie Corridor Expressway (GCE), has been demarcated for the various property development precincts – Bukit Jelutong, Denai Alam, Lagong Mas, Medan Elmina and Sungai Kapar.

KLK has a land bank of 2,828ha, of which 92.9ha has been developed into Desa Coalfields mixed residential and commercial development of more than 2,600 units.

Undertaken by KLK's property unit KL-Kepong Property Development Sdn Bhd, Desa Coalfields, located about 2km to the GCE, comprises 2,600 units of mixed residential and commercial properties worth a gross development value (GDV) of RM450mil. Since its launch in 2002, 1,400 property units with GDV of RM330mil have been completed and sold.

Unlocking value

KLK chief executive officer Datuk Seri Lee Oi Hian said to leverage on the company's large land bank in the corridor, plans were underway for KLK Property to emerge as a bigger player.

Datuk Seri Lee Oi Hian

“We are planning a 405ha integrated township opposite our existing project, Desa Coalfields in Sungai Buloh, and will launch it once the approvals are in place. We will maintain our tagline, KLK - Value Homes concept, which assures quality finishes and good value-for-money for our homes.

“This is a step towards unlocking the value of about 2,828ha of plantation land in the vicinity which is envisaged to be developed step by step. This strategy of organic growth will contribute profits as well as enhance the value of our surrounding land bank,” Lee told StarBiz.

The new development will comprise more than 6,000 residential and commercial units worth a total GDV of RM2.5bil.

KLK Property general manager Lim Peng Hong said low-density projects, with emphasis on ample provision of green tracts and open areas to promote good communal integration and facilities, would do well.

“In our next 405ha development, we plan to continue with the same strategy to offer spaciousness, good layout options, better finishes and, most importantly, affordable pricing to cater to the demand of a wider spectrum of the target market,” Lim said.

Meanwhile, AP Land's Bandar Tasik Puteri is an integrated township development spanning over 2,670 acres in Rawang. Since the project kicked off in 1998, 1,000 acres have been developed.

AP Land joint managing director Low Su Ming said Bandar Tasik Puteri was fast emerging as the urban regional centre of the North Klang Valley.

In the past decade, the company has launched close to 10,000 property units with cumulative sales of RM1bil achieved to-date. The township now has a population of 45,000.

According to Bandar Tasik Puteri's blueprint masterplan, 75% of the development will comprise the residential component, 15% commercial and the balance 10% for green lung, infrastructure and facilities.

Holistic planning

Low said instead of focusing merely on price competitiveness to drive sales, developers should adopt a longer term and more holistic vision of value adding to their townships.

“With the rising cost of construction, affordable houses priced from RM145,000 to RM180,000 will prove more difficult to hold in the medium and longer term.”

Besides offering attractive packages for house buyers, Low said, convenience, facilities and accessibility were primary considerations for even the most affordable group of buyers.

“We are planning a combination of good supporting facilities such as schools, colleges, medical services, shopping convenience, communication services, road linkages and transport.

“To enhance the quality of life for the residents, we are also beefing up the security and community events to promote healthy community living here,” she added.

Meanwhile, the third nine holes at Tasik Puteri Golf & Country Club (TPGCC) have just been opened while the clubhouse extension and upgrade would be ready by the third quarter of this year.

Low said the 27-hole championship course would boost the attractiveness of TPGCC as a popular destination for golfing and club facilities.

Lifestyle projects

In Rawang, GuocoLand's Emerald Rawang on 1,029 acres is also making waves and changing the property landscape in the northern corridor.

The gated community development comprises terrace houses, semi-detached units, bungalows, town houses, shop offices and apartments with a GDV of RM1.5bil. The project is scheduled for completion in 2012.

Besides quality housing, trendy commercial projects will also make their debut in the corridor.

Mainstay Development Sdn Bhd is planning a new retail development called space u8 in Bukit Jelutong that will be completed in early 2010.

Chairman Raja Azmi Raja Razali said there was a need for a good lifestyle destination in Bukit Jelutong as residents now had to travel quite a distance for a “friendly” retail environment.

“As residents' demographics change, the type of residential properties and commercial developments will grow to accommodate them. space u8 aims to meet the growing demand for a lifestyle destination in Shah Alam,” he said.

With net lettable area of 574,647.52 sq ft, the project based on the shop unit, mall office (sumo) retail concept will have a covered courtyard of about 70,000 sq ft as its main attraction.

By The Star

SunCity shines on innovative projects

SUNWAY City Bhd (SunCity) has established a strong brand since it started developing Bandar Sunway in Petaling Jaya in the early 1990s.

Today, the group, listed on Bursa Malaysia main board, has spread its wings overseas as well as other parts of the Klang Valley, each time bringing with it a reputation of building quality and innovative homes.

One may recall how popular The Ritz two-storey link houses in Bandar Sunway were when they were launched in 1990. Priced at RM153,888, The Ritz boasts a large master bedroom of almost 400 sq ft, so big that part of it occupies the top of the car porch! The master bedroom has a large attached bathroom with a long bath.

It also introduced a unique “super link” for its Bandar Sunway Semenyih in 2002. Although not an actual super link house in the true sense of the word as the built-up area is only about 1,600 sq ft, it has an extra-wide frontage but only a length of 51ft.

The group was also one of the first to provide a swimming pool for apartments as in the case of its RM95,000 apartments in Bandar Sunway in 1990.

Ho Hon Sang (left) and Michael Lee with a model of the Villa Manja semi-detached homes.

SunCity takes great pride in its show houses and is among the best in the market. This is evident in its show houses at Sunway Kayangan, D'Villa Bungalows @ Kota Damansara and the more recent ones at Villa Manja at Sunway SPK Damansara.

Over the years, the group has won numerous prestigious awards, including the Superbrands Malaysia Award 2005-2006, The Edge Malaysia Top Property Developers Awards 2003-2007, and Euromoney Real Estate Award 2006 Top 3 Property Developers in Malaysia. It also secured the MS ISO 9001: 2000 Quality Management System certification and was ranked sixth in the Hewitt-Fortune-RBL Top Companies For Leaders 2007 - Asia Pacific.

The group is also known for setting new benchmarks not only in quality, stylish designs but also in pricing. It is one of the few developers that ventured into the very high-end market like its 77 units of Bayrocks garden waterfront villas at the RM3.7bil Sunway South Quay (formerly Sunway Science City) whose prices start from RM4.53mil to RM6.2mil!

The Sunway South Quay, one of the two big former ex-mining lakes in Bandar Sunway (the first lake had been transformed into the Sunway Lagoon Resort more than 15 years ago), is set to be a long-term money-spinner for SunCity.

SunCity has several high-end projects in the exclusive Mont'Kiara/Sri Hartamas neighbourhood in Kuala Lumpur. They are the Kiara Hills, Casa Kiara 1, 2 and 3, Palazzio Sunway and the Sunway Vivaldi, launched in April.

The Sunway Vivaldi at Mont'Kiara comprises of 228 freehold condominium units priced from RM2.6mil to RM6.3mil. The units boast spacious floor layout of up to 4,000 sq ft. Features include a private lift lobby, cascading and meandering water features, Olympic-length swimming pool and a multi-level central eco-park.

Perhaps the most iconic of all is its Palazzio Sunway luxury condominiums in Sri Hartamas where the 160 units in two 20-storey blocks were initially priced from RM850 per sq ft.

The group's latest project is the RM400mil Villa Manja @ Sunway SPK Damansara that is being developed by Sunway SPK Homes Sdn Bhd, a joint venture between Sunway City Bhd and Syarikat Permodalan Kebangsaan Bhd (SPK).

This gated community with security guard house offers only 196 freehold semi-detached homes with a “bungalow-like” design, wide and open spaces, and a green park. Access to this 33-acre residential enclave is via a single entry and exit point, providing further exclusivity and security for residents.

Prices of the Twin Villas start from RM1.97mil each with built-up areas from 3,948 sq ft (45ft x 90ft). There are six bedrooms with five attached bathrooms. The porch can park four cars.

SunCity chief operating officer Ho Hon Sang said about 80% of the 100 units launched last August had been sold.

“We're now opening for sale the balance of the 96 units. This is a single-product development with a low density of only six units per acre. There are no T-junctions and all the houses are placed in a north-south direction,” he said.

The homes come with many extras, including nine units of energy efficient and eco-friendly air-conditioners, security alarm, automatic gate, motion detector light, solar water heater, water booster pump, whirlpool system bathtub for master bedroom, shower screens to all bathrooms (except maid's bath), glass balustrade at staircase and balcony, anti-subterranean termite treatment, and five-year warranty for external painting.

SunCity senior manager (marketing and sales) Michael Lee said all four show houses had been sold. Two of them that are furnished have been sold for RM3.1mil and RM2.7mil.

By The Star (by S.C.Cheah)

Builders, buyers head north to a new corridor

An aerial view of Bandar Tasik Puteri in Rawang.

KLANG Valley's northern corridor, which is still relatively untapped compared with the rapidly developing central and southern corridors, is ripe for more exciting changes and progress, going forward.

The availability of vast land bank and improved infrastructure connectivity have attracted quite a number of developers, including Sime Darby Property Bhd (formerly Guthrie Property Development Holding Bhd), Asia Pacific Land Bhd, KL-Kepong Property Holdings Sdn Bhd (KLK Property) and GuocoLand (M) Bhd (formerly Hong Leong Properties Bhd).

More innovative residential and commercial products that are in the pipeline, including gated residences and lifestyle retail projects, will further spruce up the corridor's landscape.

According to Ho Chin Soon Research Sdn Bhd director Ho Chin Soon, the research company's Locational Centre of Gravity showed there was good growth potential for the various locations in the northern corridor including Selayang, Rawang, Sungei Buloh, Kuang, Guthrie Corridor and Shah Alam North.

“There are large tracts of freehold plantation land in the northern corridor. Besides the Sime Darby group, we have private landowners like Kuala Lumpur Kepong (KLK) group that have sufficient land for development for many, many years to come,” he said.

Ho said since the Klang Valley's growth – including a 5% annual population growth – was continuing unabated, “it would not be wrong to say that the northern corridor would progress more or less in line with Klang Valley's growth.”

“Land prices have not escalated much but we can possibly say there's a 5% per annum increase in values over the last few years.

“Land nearer to the urban areas is priced RM20 to RM25 per sq ft while those in the outskirts is between RM10 and RM15 per sq ft,” Ho said.

Developers are eager to see the implementation of proposed highways, including the Assam-Jawa Latar Expressway linking Rawang to Kuala Selangor and Port Klang and the West Coast Highway that will further enhance the potential of the northern corridor.

New highways

The completion of the 25km Guthrie Corridor Expressway (GCE) that stretches from Bukit Jelutong to Kuang, near Rawang, in 2004 had contributed to the opening up of the northern and western parts of the Klang Valley.

According to Asia Pacific Land Bhd (AP Land) joint managing director Low Su Ming, there has been notable development in the northern corridor in the past decade although the pace was relatively slower compared with the southern and central corridors.

»With escalating prices in other parts of the Klang Valley, demand has begun radiating to the north« LOW SU MING

“With escalating property prices in other parts of the Klang Valley, demand has begun radiating to the north, including Sungai Buloh and Rawang.

“However, there is still a big gap in the prices of properties located here from those in the more developed and sought after areas in the Klang Valley,” Low said.

KL-Kepong Property Development Sdn Bhd (KLK Property) general manager Lim Peng Hong said the GCE and the North-South Expressway had contributed substantially to the success of the various townships in the northern corridor.

This include Sime Darby's Bukit Jelutong, KLK's Desa Coalfields in Sungei Buloh, AP Land's Bandar Tasik Puteri and GuocoLand's Emerald Rawang in Rawang.

The setting up of educational institutions such as Universiti Selangor, Universiti Teknologi Mara II and the new Sungai Buloh Diagnostic Hospital has also attracted property players and investors to the area.

Lower entry cost

“Property projects located within the boundaries of the northern corridor will do well as the scarcity of development land in the Klang Valley and Kuala Lumpur has created the need to build further from the city,” Lim said.

He said escalating costs of construction and scarcity of land, especially in mature areas within the Klang Valley, had contributed to marked increase in property prices of projects with modern living concepts, good facilities and environment.

“The prices of residential properties in the more exclusive addresses in the Klang Valley had made it almost impossible for the average wage earners to acquire them, and they are looking at projects in locations further away from the city.

“With properly planned infrastructure and amenities, projects in the northern corridor will prove to be the next best alternative for many average wage earners,” Lim said.

Although there is still a lot of land available – be it government or privately held, location and accessibility are major considerations that affect the marketability of the projects.

APL's Low said that as land in the central and southern corridors of the Klang Valley was scarce, the price of land in those areas was currently at record highs.

“The lower entry cost of land in the northern corridor is a definite plus. There is certainly potential in the longer term.

“We hope the Government would hasten the approved infrastructure works, which are badly needed in this corridor. When this happens, the growth in this corridor will catch up with the other parts of the Klang Valley.”

She said although places like Rawang and Sungai Buloh had grown substantially, the public transportation system was still lagging and further improvements to the infrastructure network would certainly provide a new growth catalyst for the northern corridor.

“Infrastructure projects, such as the Government’s planned upgrading of certain trunk roads leading into Rawang town and electrified railways under the Ninth Malaysia Plan, will certainly open up more development opportunities and better growth prospects in this corridor,” Low said.

By The Star (by Angie Ng and Leong Hung Yee)