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Thursday, July 31, 2008

Crescendo sees more profit from industrial properties

PETALING JAYA: Johor-based property developer Crescendo Corporation Bhd expects industrial properties to be its main profit generator for the current financial year ending Jan 31, 2009.

Crescendo managing director Gooi Seong Lim said the industrial property arm could contribute at least 60% of its profits in FY09 and much of the appeal of its industrial properties lay in its location in Nusajaya, which is part of the multi-billion ringgit regional development, Iskandar Malaysia.

Industrial properties contributed nearly 50% to the group’s profits in FY08.

“The Nusajaya area is located only 10 minutes from Tuas Singapore through the second link; so the take-up rate is quite good due to relocation from higher costs area in Singapore to Malaysia, which is cheaper,” Gooi said after the company’s AGM here yesterday.

Crescendo is now in the midst of building the second phase, which consists of about 40 units, of the Nusa Cemerlang Industrial Park in Nusajaya. The second phase is targeted for completion next March.

“The factories are in the early stages of building and enquiries have been encouraging. The whole (Nusa Cemerlang Industrial Park) project consists of 382 (factory) units.

“There are still a few phases to go. Package 2 is going to be officially launched in August this year and is already having some sales,” Gooi added. The first two phases have a gross development value (GDV) of about RM200 million.

He said profit projections for FY09 was looking bright for the group, as it had locked in unbilled sales, mainly from industrial properties, of some RM113 million as at June 30. “We still have 200 completed residential units on sale now with a GDV of RM40 million,” Gooi added.

For the three months to April 30 this year, Crescendo posted a net profit of RM7.3 million on a RM45.7 million revenue, which is an improvement of 82% and 105% respectively, from a year earlier.

Gooi added that the group was not looking at acquiring more land as it already had about 3,200 acres (1,295 hectares) in strategic locations in Johor, of which 1,900 acres are in Iskandar Malaysia.

By The EDGE Malaysia

Bank Rakyat-Casa Impian home renovation scheme


FLEXIBLE REPAYMENT PLAN: Kamaruzaman (second from right) being briefed by Norlinda (right) and Casa Impian executive director Khairul Anwar Rahmat (second from left). With them is Bank Rakyat general manager corporate services/bank secretary Datuk Rosely Samsuri.

Bank Kerjasama Rakyat Malaysia Bhd, the country's largest cooperative bank, expects to disburse RM1 million a month for the financing of home renovation under its new product, Personal Financing i-Aslah Purchase Plus.

The bank has formed a tie-up with interior designer Casa Impian Sdn Bhd, where customers will engage the decorator's expertise in their home designs.

Customers may apply for a minimum of RM50,000 to a maximum of RM150,000 loan for the purpose, with a repayment period of up to 15 years.

"The common problem faced by first time house buyers is the difficulty to fund renovation works after spending a 'bomb' to buy the property," Casa Impian managing director Datin Norlinda Abd Taib said in Kuala Lumpur yesterday.

Despite bearish consumer sentiment, she is optimistic of an encouraging response from customers due to the bank's flexible repayment plan.

Meanwhile, Bank Rakyat managing director Datuk Kamaruzaman Che Mat said the bank expects to maintain its 2.2 per cent non-performing loans (NPLs) this year.

"To ensure a manageable NPL rate, we tie up with other banks for salary deductions from borrowers' accounts and we encourage repeat borrowers with good track records to continue banking with us," he said.

It was earlier reported that Bank Rakyat is on track to hit RM1 billion profit for this year after pre-tax earnings from January to June soared to more than RM500 million.

In the first six months, the bank gave out 23 per cent more loans than the same period in 2007, where consumer loans, mainly personal and hire purchase financing, make up 95 per cent of total loans. The balance five per cent are corporate loans.

Commenting on Bank Rakyat's plan to buy a stake in an overseas bank, Kamaruzaman said the bank has yet to initiate talks with any party but is looking at opportunities.

"We still want to grow organically, (so) any talks for such a plan may only take place next year," he said, adding that the bank will use its own funds for this purpose.

Up to June this year, its total deposits stood at RM28.1 billion, assets at RM40 billion and shareholders' fund at RM4.37 billion.

By New Straits Times (by Zurinna Raja Adam)

Wednesday, July 30, 2008

i-City to offer world class data centres

KUALA LUMPUR: I-Bhd's i-City project in Shah Alam will be the first commercial development in Malaysia to boast of three world class data centres following a strategic alliance forged with Kompakar Inc Bhd, an integrated solutions provider, yesterday.

At the agreement signing, Kompakar chief executive officer Dr Ahmad Fikri Hussein said Kompakar had decided to become one of the anchor tenants in Selangor’s first digital city.

“We are investing and will be providing world class data centre service expertise in the design, set up, management and operation of the data centre equipment and facilities.”

I-Bhd deputy chief executive officer Lim Boon Siong said I-Bhd planned to invest close to RM50mil in the data centres based on the company's business plan and projected demand.


Deputy CEO Lim Boon Siong speaking at the signing ceremony between i-Bhd and Kompakar on Tuesday. - Starpic by Ong Soon Hin

The data centres comprise a 3,500 sq ft hosting facility catering to local small and medium enterprises and two 70,000 sq ft world-class Tier 4 purpose-built ready data centre catering to global information and communications technology companies.

Al Raji Bank (Malaysia) agreed Monday to purchase 36 units of i-City Cybercentre 1 office suites for RM95mil.

The purchase accounted for 80% of the units completed in the first phase of i-City, a RM2bil township on 72 acres in Section 7, Shah Alam.

On the balance units that I-Bhd said it would hold for local information and communications technology companies, director Eu Hong Chew said long-term investment had always been part of the company's commitment to nurture the information technology industry.

In terms of investor response, Lim said besides the Middle East, i-City had received tremendous response from Australia and South Korea, although talks were still at the preliminary stage.

By The Star

I-Berhad aims to sell i-City office towers by year-end

PROPERTY developer I-Berhad is confident of selling off two office towers at its RM2 billion i-City intelligent township in Shah Alam by the end of this year, following its first en bloc sale on Wednesday.

Al Rajhi Bank (Malaysia) Bhd is buying 36 units of the i-City Cybercentre 1 office suites, one of the many components of i-City, for RM95 million.

"This is the first en bloc sale for i-City. We are in discussions with interested parties from Asia-Pacific and the Middle East and with serious buyers from South Korea and Australia.

"We are optimistic of closing one or two new deals by December," I-Berhad deputy chief officer Lim Boon Siong told Business Times after the signing of a mutual cooperation agreement with Kompakar Group in Kuala Lumpur yesterday.

The signing was witnessed by Minister of Housing and Local Government Datuk Seri Ong Ka Chuan.

Lim said Al Rajhi has indicated that it would invest in other properties within i-City, but did not elaborate.

The 30.28ha i-City, which started in mid-2007, will feature 12 office towers, a 1 million-sq ft shopping mall, office suites, three data centres, a five-star and a boutique hotel, and two blocks of 24-storey residences.

The integrated development, which is envisaged to be Selangor's knowledge hub and in the league of the Dubai Internet City in the United Arab Emirates, will offer 7.5 million sq ft of built-up when completed in 2012.

For the hotels, Lim said the company was still talking to international hotel chains with strong roots in Malaysia to operate the properties.

They include Starwood, Hilton, Marriott and Accor.

"We are at the design and discussion stage now. We hope to finalise the details by year end and launch the hotels in the first half of 2009," Lim said, adding that it was also in talks with an international hospital group that wants to operate at i-City.

Lim also said the data centres are one of the key selling points for i-City.

"Ours is the first township in this region to have world-class Tier 4 ready data centres connected to the whole 30.28ha real estate via giga-speed fibre-optics network. This is one piece of the puzzle that will enhance i-City's value," Lim said.

Earlier, Kompakar chief executive officer Dr Ahmad Fikri Hussein told reporters that the company and I-Berhad will invest RM100 million to build and equip the data centres, which consists of a 3,500 sq ft hosting facility for the local small and medium enterprises, and two 70,000-sq ft Tier 4 ready data centres.

The hosting facility and the first data centre are already operating, while the second data centre will be ready by 2011.

By New Straits Times (by Sharen Kaur)

Talam expects to complete stalled projects by year-end

Property developer Talam Corp Bhd expects three of its stalled projects, namely Ukay Perdana, Bandar Bukit Beruntung and a part of Taman Puncak Jalil - worth a combined RM400 million - to be completed by the end of the year.

The high-rise units at Taman Puncak Jalil will be completed next year.

Talam executive director Chua Kim Lan said this would mean that 7,500 units of the 13,000 stalled units would be completed.



She added that 10 per cent of its total stalled units are unsold.

Meanwhile, the company is putting its 92ha development in Gombak on hold, despite obtaining the necessary approval, due to the high prices of construction materials and dampening consumer sentiment.

"At this point of time, it is useless to start any project considering that contractors are giving quotations on a weekly basis because of the increasing price of construction materials," she said.

In March 2007, Mutual Prosperous Sdn Bhd entered into a joint venture with IJM Properties Sdn Bhd to use Cekap Tropikal Sdn Bhd as the 50:50 joint venture company to takeover the development of the area known as Sierra Selayang.

The land, which is owned by three of Talam's subsidiaries, has an estimated gross development value of RM1 billion.

Talam director Loy Boon Chen said work on the project will start once the prices have stabilised.

Loy is an IJM Corp Bhd nominee to the board of Talam.

Chua said the increasing price of steel and cement has not affected the completion of its stalled projects as most of them are past the structural phase where steel bars and cement are used the most.

She said Talam has seen an increase of less than 10 per cent in costs, when the industry average is around 20 per cent.

Chua also said the company is looking at developing industrial lots at the remaining 1,200ha undeveloped land in Bandar Bukit Beruntung and a 64ha in Puchong.

She added that Talam will no longer focus on developing medium-cost housing.

Talam expects to be back in the black this year with the implementation of its regularisation plan, which was approved by the Securities Commission in April this year.

The company will table the plan to the shareholders at an extraordinary general meeting to be held by the end of August.

By New Straits Times (by Presenna Nambiar)

Talam plans to deliver 7,000 homes

PETALING JAYA: Talam Corp Bhd intends to deliver 7,000 homes to buyers this year, says executive director Chua Kim Lan.

“So far, we have delivered 700 units and more are expected in the next few months,” she told StarBiz in a telephone interview yesterday.

Next year, it will deliver another 6,000 homes, bringing the total gross development value (GDV) of the 13,000 units to almost RM1bil.

As the main structure works of the properties are already completed, the developer is marginally affected by the rise in steel prices.

“The impact to total construction cost is less than 10%,” Chua said, adding that this, however, would eat into its margins.

The company’s Serenia Gardens project, which is a joint venture with IJM Corp Bhd, was launched earlier this year while the launch of Sierra Selayang, also with IJM, has been put on hold until next year.

The two projects have a combined GDV of RM1.5bil.

Serenia Gardens, which is on a 90-acre leasehold land in Ulu Kelang, involves the development of 225 terraced houses in the first phase and 104 units in the second.

Sierra Selayang, on the other hand, comprises semi-detached houses and bungalows.

Talam was considering to convert some of its residential land bank in Puchong and Bukit Beruntung to industrial status given that the Selangor government was keen on removing backyard factories. Chua said: “There may be launches of industrial properties early next year.”

By The Star - StarBiz

Mah Sing Q2 net profit surges

Mah Sing Group Bhd has reported an 82 per cent increase in net profit to RM37.3 million for its second quarter ended June 30, 2008, compared with RM20.4 million in the previous corresponding period.

In a statement today, the company attributed the improvement in net profit on revenue of RM195.4 million to contribution from both residential and commercial projects.

Among the projects are the Grade A office of The Icon Jalan Tun Razak and residential projects included Hijauan Residence, Aman Perdana, Kemuning Residence and Perdana Residence as well as Sierra Perdana and Austin Perdana.

Mah Sing said having practised financial prudence and steadily charting strong growth, the group is in a good position for acquisitions with a cash pile of RM145.76 million and low gearing of 0.14 times as at June 30, 2008.

The group will be looking into Sabah and Sarawak and any potential growth locations overseas, apart from its established three hotspots in Peninsular Malaysia for more land acquisitions, it said.

Mah Sing has 14 projects in prime locations, of which nine in the Klang Valley, four in Iskandar Malaysia, Johor Baru, and one in Penang.

“We can hunt for good land for our expansion, but we are not in a hurry as we have sufficient locked-in sales to last us for another two years,” said group managing director and chief executive officer Datuk Seri Leong Hoy Kum.

“Our undeveloped land bank of 574 acres worth RM2.9 billion will be developed over the next five to seven years,” he said.

By Bernama

Luxury property portal launched

iPROPERTY.com Group launched a new property portal, iLuxuryasia.com (www.iluxuryasia.com) specifically for Asian luxury properties.

The new portal provides useful information and tips on buying and financing properties in selected countries, aside from showcasing the best new developments, resale and rental properties.

By Bernama

Europlus plans RM3b bond sale to fund road project

KUMPULAN Europlus Bhd plans to issue bonds worth about RM3 billion early next year to finance the West Coast Expressway (WCE) project.

Its president and chief executive Tan Sri Chan Ah Chye said the company is working with a local rating agency to raise the money quickly.



Ratings for the debt paper are expected to be finalised within a few weeks and the bonds will be put on sale six months thereafter.

The fund-raising exercise has been delayed because of changes made to the alignment of the road and costing, among other factors.

The 216km expressway will cost about RM4.6 billion. It will stretch from Banting in Selangor to Taiping in Perak.

Chan said that construction cost alone is about RM3.6 billion.

Europlus' 64.2 per cent-owned subsidiary, Konsortium LPB Sdn Bhd (KLPB), was awarded the expressway concession on May 25 last year.

Under the concession agreement, KLPB will build the expressway and can collect toll for 33 years before handing the road back to the government.

The consortium's other shareholders are Kumpulan Darul Ehsan Bhd (20 per cent) and Perak Corp Bhd (20 per cent).

Chan expects the expressway project to begin works next year and to take three years to complete.

Currently, Europlus has two major contracts in hand, including the West Coast Expressway and the Canal City, which has been delayed after the Barisan Nasional lost Selangor in the general election.

Chan said the group will soon meet the new state government to finalise new terms and conditions for the project to continue.

Europlus and construction firm IJM Corp Bhd are joint-venture partners in the project.

On its outlook for the year ending January 31 2009, Chan said he expects Europlus to make a profit now that associate company Talam Corp Bhd's proposed regularisation plan has been approved by the authorities.

In the financial year ended Jan-uary 31 2008, Europlus posted net loss of RM4.5 million on turnover of RM41.1 million.

By New Straits Times (by Rupinder Singh)

Builders: Give 6 months lead time before raising prices

Master Builders Association Malaysia (MBAM) has voiced its unhappiness over the proposed increase in cement prices by Lafarge Malayan Cement Sdn Bhd, saying it will hurt the construction industry badly.

The price increase will take effect on August 1.

MBAM president Ng Kee Leen said that cement manufacturers should consider providing the industry with at least six months lead time to allow contractors to allocate provisions to mitigate their cost.

"This announcement has trapped contractors in a cycle of continuous price increase," he said in a statement released in Kuala Lumpur yesterday.

Ng pointed out that it will be yet another increase in just two months, after the government lifted the ceiling price of cement on June 5.

Cement prices rose 22 per cent from the RM10.90 under government price control to RM13.20 immediately after liberalisation.

Lafarge's proposed increase will add another RM1 per 50kg to RM14.25, or 30 per cent.

"As it is, contractors are facing difficulties in controlling the cost of projects and committing to timely delivery. The cement price increase will add more pressure to cash-flow problems," Ng said.

"MBAM would like to caution that many small- and medium-sized contractors from Classes D, E and F may be forced to stop work, delay work, or even abandon projects as a result of the steep price increase of essential building materials, especially steel bars and cement.

"The government should take cognisance of this and act quickly."

Ng said that although the cement liberalisation was announced last month, difficulties remained over its import because of logistics.

He added that the scenario was the same for steel bars, of which prices had risen to an all-time high of RM4,100 a tonne.

The liberalisation process of steel bars has not been well implemented, Ng said.

"It has been difficult to import steel bars into the country and there are still cases of Customs Department officers demanding approved permits and/or imposing import duty on certain steel bars."

MBAM will also ask that all items under HS Code 7214, all steel bars for construction use under Code 7214 and all steel bars for construction use under Codes MS 146 and BS 4449 be fully liberalised.

"If the situation continues to worsen, the government should step in and implement 15 per cent export tax on steel bars and billets, cement and clinkers, and ban exports of steel bars and clinkers to ensure building material manufacturers meet the needs of the local construction industry first.

"The 10 per cent import tax on cement should be waived as well because contractors and developers are already facing great pricing pressure, and any form of import tax relief will be appreciated," Ng said.

By New Straits Times

Cement price set to rise further


The average selling price of local cement is now on par with cement prices in the Asia-Pacific which range from RM273 to RM277 per tonne.

On Monday, Lafarge Malayan Cement Bhd, which controls about 40% of the local cement market, said it would raise the prices of its cement products by RM20 per tonne from Aug 1.

Industry analysts said the latest price increase would translate into a new average selling price of about RM277 per tonne for cement in Malaysia.

They expect further hikes in cement price this year, given strong indications that other local players like YTL Cement Bhd, Tasek Cement Bhd and Cement Industries of Malaysia Bhd would soon emulate Lafarge's move to offset the recent 26% rise in electricity tariff and 63% jump in diesel price.

An analyst with a foreign brokerage told StarBiz the local cement industry was an oligopoly dominated by four large players.

“I expect cement price to continue to increase based on the high price of coal – the major source of energy for cement operators.

“Cement constitutes about 50% of raw material costs or about 20% of total construction cost. I believe every 10% increase in cement price will increase property development cost by 2%,” the analyst said.

CIMB Research said in its report yesterday that the price hike by Lafarge was not surprising, as cement companies would have to raise their selling prices following higher operational costs.

Despite the anticipated slowdown in construction, the research unit said it did not expect the price increase to dent demand in the short term.

However, CIMB Research is cautious on the long-term outlook, given delays in construction projects and a slowdown in the property sector.

It also expects a lower risk of imports due to the revised selling price that is on par with regional prices.

This will give local suppliers an edge over imports in terms of storage, quality and shelf life of the products.

Aseambankers said Lafarge's revised selling price of about RM275 per tonne in August was comparable to the price of efficient cement producers in Thailand at an estimated RM273 per tonne.

It said the quantum of Lafarge's price hike was sufficient to offset its higher cost but “the main concern is on the price of coal”.

Coal spot price based on Australia's Newcastle Index has averaged US$180 per tonne currently compared with US$70 per tonne last year.

Lafarge is set to review its cement prices by year-end. “They will possibly be higher if prices of raw materials and fuel continue to escalate,” said the research unit.

By The Star - StarBiz

Export ban on steel bars, cement?

KUALA LUMPUR: Is a temporary ban on export of steel bars and cement on the cards?

It looks like the Government may impose some kind of restrictions to help the construction industry overcome the rising prices of these and other raw materials.

Housing and Local Government Minister Datuk Seri Ong Ka Chuan said he had received lots of requests from developers and contractors that there should be restrictions to control the outflow of essential items.

Ong said his ministry was talking with the Finance Ministry on the matter and was mindful of the fact that priority should be given to meet local demand.

However, for the moment, he felt it would be better to allow the free market system to determine the supply and demand of steel bars and cement, while the Government closely monitors escalating prices and their supplies.

“But if the situation persists, I think the Government has to intervene. We have to make it our priority to the local industries rather than overseas market even if it (the raw material) fetches a better price,” he said.

Ong said this at a press conference after witnessing the signing of a mutual co-operation agreement between I-Bhd and Kompakar Group for the development of a Tier 4 Ready Data Centre in the RM2bil i-City integrated commercial-cum-residential development in Shah Alam.

Meanwhile, the Master Builders Association Malaysia (MBAM) has warned that many medium and small contractors from Class D, E and F may be forced to stop, delay or even abandon projects as a result of the steep price hike of essential building materials.

“The Government should act quickly. If the situation continues to worsen, it should step in and ban export of steel bars and clinkers to ensure building materials manufacturers would supply the needs of the local construction industry first,” said MBAM president Ng Kee Leen.

He said the 10% import tax for cement should be waived as well because contractors and developers were facing great pricing pressure and any form of import tax relief would be appreciated.

Although cement liberalisation was announced on June 5, Ng said the import of cement was still not in place due to logistics.

With liberalisation, cement price had continued to rise from RM10.90 during the government price control period to RM13.20 (22% up) immediately after liberalisation and now another increase by RM1, or 30%, per 50kg bag to RM14.25.

In the case of steel bars, he said, although it was liberalised on May 12, the liberalisation process was not well implemented.

“It was difficult to import steel bars and there are still cases of Customs Department officers demanding for approved permits and/or impose import duty on certain steel bars.

“MBAM hopes the Government would simplify (matters) by making clear the process to import steel bars for local construction use,” he added.

MBAM also requested cement and steel bar manufacturers to provide at least six months' lead time for any announcement on price increase to enable contractors to allocate provisions to mitigate their cost.

Ng said the Lafarge Malayan Cement Bhd's announcement on price increase for cement effective Aug 1 would hurt the construction industry.

Meanwhile, ready-mixed concrete operators in Selangor and Kuala Lumpur yesterday announced revised prices for ready-mixed concrete of various grades by 5.2% to 6.2% effective Aug 1.

By The Star

Tuesday, July 29, 2008

GCorp plans niche residential project in KL

KUALA LUMPUR: General Corp Bhd (GCorp) plans to acquire a small piece of land in the Klang Valley this year for a proposed niche residential property project, says executive director Datuk Marco Low.

The company wanted to focus on small and luxury residential projects because they were in demand, he said, but declined to provide more details on the proposed land acquisition.

“However, for the broader property market, investors are more cautious due to the current economic conditions,” Low said after the company AGM yesterday. Executive director Michael Cheong said the strategy to focus on higher-end properties was necessary to contain capital expenditure, especially due to soaring building material prices.

He said the Malaysia My Second Home programme had boosted demand for high-end properties, especially from foreign buyers. GCorp is developing Panorama, a 223-unit freehold luxury condominium project at Persiaran Hampshire, close to the Kuala Lumpur City Centre.

Low said Panorama was scheduled for completion by end-2010 and the total gross development value (GDV) was about RM300mil. About 90% of the units had been sold since it was launched in April, he added.

He said GCorp was building 25 bungalows at Taman Esplanad, Bukit Jalil, with a GDV of RM40mil and, so far, 50% of the units had been sold. The company had also been busy in Singapore with two projects, Low added. Its subsidiary, Low Keng Huat (S) Ltd, is involved in the S$346mil Hard Rock Hotel at the integrated resort at Sentosa and a S$146mil job to renovate the Meritus Mandarin Hotel along Orchard Road.

“Our development projects in Singapore are contributing the bulk of our profit this and next year,” he said.

By The Star

Developer General Corp on track to maintain growth

PROPERTY developer General Corp Bhd expects to maintain the growth it enjoyed last year, bolstered by its developments in Singapore.

The company has two contracts in Singapore worth a combined S$492 million (RM1.17 billion).

The group registered net profit of RM41.3 million for the financial year ended January 31 2008, a nine per cent jump from the RM37.8 million it made the year before.

General Corp's developments in Singapore contributed 46 per cent to revenue last year.

The group recorded RM337.6 million in revenue last year.

The group's executive director Datuk Marco Low Peng Kiat said the company will not be aggressive in executing its growth plans this year, preferring to focus on completing its existing projects.


LOW: We are looking for more of pockets of land for niche development

He said the stance is in light of the current political and economic uncertainties in the country.

This does not stop the company from growing its land bank though, as it looks to grow its number of properties in the Klang Valley area.

"We are not looking for big acquisitions, more of pockets of land for niche development," Low said.

On the impact of rising raw material prices like steel and cement, he said the group has recorded a 10 per cent increase in cost due to the phenomenon.

Low said he expects a softening in demand for the property market this year especially with the uncertainty in the political scenario.

"We are fortunate that we are involved in niche developments rather than large scale developments like townships," executive director Michael Cheong Chee Leng said.

He said larger scale projects would be the ones most hit by the price increases.

By New Straits Times (by Presenna Nambiar)

Mutiara Goodyear and Kajang Heights team up

PETALING JAYA: Mutiara Goodyear Development Bhd is teaming up with Kajang Heights Development Sdn Bhd to undertake a property project with a gross development value of RM430mil.

Under the agreement signed yesterday, Mutiara unit Regal Form Sdn Bhd would build mixed commercial and residential properties on Kajang Heights’ 27.6ha site in Kajang, of which 21.5ha would be for houses and the remaining 6.1ha for shoplots.

Mutiara chief executive offer Kee Cheng Teik said in a statement the joint venture would allow both parties to combine their resources and expertise to add value to the proposed development. The completion date for project was five years.

Under the agreement, Kajang Heights would be entitled to RM50mil or 22% of the GDV, whichever was higher, from the project with initial payment of RM6mil. Its entitlement could also be satisfied via unsold units in the project based on the launch price.

By The Star

Mutiara's RM430m project in Kajang

PROPERTY developer Mutiara Good-year Development Bhd will be developing mixed commercial and residential properties in Kajang with a gross development value (GDV) of RM430 million.

Mutiara, through its wholly-owned unit, entered into a joint-venture agreement with Kajang Heights Development Sdn Bhd yesterday to develop the latter's 27.77ha (68.58 acres) land, it told Bursa Malaysia yesterday.

"Under the agreement, Kajang Heights Development is entitled to RM50 million, or 22 per cent, of GDV from the project with an initial payment of RM6 million," it said.

By New Straits Times

IJM calls off Sabah condo, hotel plan

IJM Corp Bhd's property unit will not develop its earlier planned condominium and boutique hotel in Kota Kinabalu, Sabah.

"IJM Properties Sdn Bhd and Suria Capital Holdings have mutually agreed not to proceed with the joint venture for the development of a 16-storey condominium and 11-storey boutique hotel," it told Bursa Malaysia yesterday.

The developments were to be housed under Zone 1 within the port area at Jalan Tanjung Lipat, Kota Kinabalu, which is being developed into a tourism-related mixed development known as the Jesselton Waterfront Project.

By New Straits Times

Phase 2 of Mines park secures sales before launch

COUNTRY Heights Holdings Bhd's second phase of Mines Waterfront Business Park has already secured sales and received enquiries from potential buyers locally and abroad, even before its launch.

Project developer, Mines Waterfront Business Park Sdn Bhd (MWBP), is expected to start the construction within the next six months.

MWBP sales and marketing head Vincent Chew said the second phase of the project, which is an extension of the current five blocks of the property, would be launched in one to two months' time.

"The yet-to-be launched Phase 2 of Mines Waterfront Business Park has already secured sales from purchasers who have heard about this sure-win investment through word-of-mouth.

"There are some enquiries from foreign and local parties who are interested to purchase en-bloc with a net lettable area of a little over 66,000 sq ft," he said in a statement.

Chew said the first phase of the project is 98 per cent tenanted with a net lettable area of 246,000 sq ft. Among the tenants are Astro, EMI, Hitachi and Mynic & Sumitomo.

The second phase comprises two blocks - Prairie and Bay - with a view of 60ha lake and 18-hole golf course and country homes.

Prairie is a 14-storey commercial block with a net lettable area of 66,000 sq ft and Bay is a 19-storey building with a net lettable area of about 106,000 sq ft.

Chew also said that it is timely for purchasers to buy the property now because if the costs of building materials keep rising, future property launches would inevitably be more expensive.

"In this scenario, property prices in general are likely to escalate soon and it is thus, timely to buy now before developers increase their prices," he said.

He said soaring material prices would result in lower supply of commercial properties as developers are more cautious in launching new projects but demand will continue to grow.

"The company (MWBP) has been closely monitoring the increase in building material prices over the past year and fortunately for us, foundation works as well as a portion of the super-structure have already been completed," he added.

By New Straits Times (by Hamisah Hamid)

Lafarge raises cement retail price

PETALING JAYA: Lafarge Malayan Cement Bhd, the country’s largest cement producer, has increased the recommended retail prices for its bagged cement products by RM1 per 50kg bag or RM20 per tonne effective Aug 1. The price increase will apply until year-end. (see table)

Lafarge’s latest move was seen by industry observers as setting the benchmark for local cement players to increase their prices “anytime” soon.

President and chief executive officer Bi Yong Chungunco told StarBiz that the company had to adjust its cement selling prices to alleviate some of the major cost increases.


Bi Yong Chungunco

The cement industry continues to face more increases in its cost of production, particularly for coal and fuel since December 2006 to June 2008.

There has been no adjustment in local cement prices since 1995. In December 2006, the Government increased the cement price by 9% but during the same period, the sector was facing cost increase of over 40%.

Following the liberalisation of the local sector last month, cement prices had increased by an average 17% to “help defray some of the cost increases that the industry has been absorbing since 1995,” Bi Yong said.

Despite the price hike in cement, diesel price shot up even higher, by 63%, while electricity cost rose 26% effective early July.

Bi Yong said: “The higher electricity tariff has an immediate impact on Lafarge’s cost of producing cement and the increase in diesel price directly impacted our inbound and outbound transportation costs.

“This also indirectly affects our other costs including overheads, contract works and capital expenditure.”

Based on the latest cement price increase effective next month, Bi Yong said cement price would have increased only three times in the past 13 years which is a total of 34%.

“This is an average of about 2.6% per annum which is much lower than the annual inflation rate while other costs have risen much higher in recent years,” she added.

Meanwhile, there was consensus that cement prices next year would depend on the prices of vital raw materials that are expected to rise in tandem with the commodity prices.

The current local cement prices range from RM250 to RM280 per tonne.

A spokesman of a major local cement group told StarBiz yesterday that coal prices had increased three-fold to US$120 this year from US$40 five years ago while cement prices increased merely 10% in the 10 years between 1995 and 2006.

“We will absorb additional costs but there are limits to how much we can absorb. The rest we need to pass on to consumers,” he said.

He said international cement prices were 5% higher than local prices, excluding logistic and storage costs.

The recent hikes in fuel price and electricity tariff were also to be blamed for squeezing manufacturers’ operating margins, he added.

Meanwhile, Cement and Concrete Association of Malaysia executive director Grace Okuda said the 10% import duty imposed on non-Asean countries was a fair measure for all parties, including builders.

She also said Malaysian manufacturers had excess supply and there was no shortage of cement at this moment.

An analyst with OSK Research has a negative outlook on the construction industry for the second half of this year. He said construction activities had slowed down partly due to economic uncertainties and inflation.

The price of cement, an important component of concrete, jumped 22% after the ceiling price was lifted on June 5.

Coal, fuel and electricity make up more than 50% of the total raw material costs for cement products.

By The Star - StarBiz - (by Law Kai Chow)

Quill sees long-term gains in assets tenanted by blue-chip firms

PETALING JAYA: Commercial real estate investment trust Quill Capita Trust (QCT) believes that quality commercial assets tenanted by blue-chip companies not only offer a stable income stream but will also generate sustainable long-term total returns on investment despite the challenging economic climate.

Chief executive officer Chan Say Yeong said blue-chip companies usually tenanted QCT's assets on a long-term basis with step-up rental rates.

“In keeping up with the quality blue-chip tenants, we are focused on continuously improving building and tenant relations. These provide QCT with organic rental growth,” he told StarBiz yesterday.

QCT recently announced a 140.4% increase in revenue to RM13.7mil for the second quarter ended June 30 from RM5.7mil recorded in the previous corresponding quarter.

Meanwhile, net profit jumped 81.1% in the quarter to RM6.7mil from RM3.7mil previously.

Earnings per share rose to 1.73 sen from 1.54 sen.

The company attributed the better results to full revenue and income contribution from recent acquisitions, namely Wisma Technip and commercial units and car park of Plaza Mont Kiara acquired in September last year, Quill Building 5-IBM, Quill Building 8-DHL and Quill Building 10-HSBC purchased in March this year.

RHB Research in a report said that despite the jump in revenue, the company experienced about a 5% decline in net profit from the preceding quarter partly due to one-off maintenance costs.

“However, despite rising inflation, we do not expect property maintenance costs to affect the company significantly in the future as we understand that it has the rights to pass on the increase to its tenants via higher service charges,” the report added.

The company recently proposed to acquire the Tesco building in Jelutong, Penang, for RM132mil from IJM Properties Sdn Bhd.

According to Chan, upon the completion of the acquisition in the fourth quarter, QCT’s asset size would increase to RM810mil, exceeding the original forecast of RM750mil for the current financial year ending Dec 31.

New assets in the pipeline include the new HSBC headquarters and KL Sentral Lot J.

“The Kuala Lumpur office market is experiencing an upturn due to healthy demand from business expansion, especially in finance, insurance as well as the oil and gas sectors,” Chan said, adding that take-up rate was expected to remain healthy.

By The Star (by Laalitha Hunt)

Al Rajhi Bank buys property

KUALA LUMPUR: Al Rajhi Bank (Malaysia) is purchasing 36 units of i-City Cybercentre 1 office suites for RM95mil, marking its first property venture in the country.

The purchase accounted for 80% of the units completed in the first phase of i-City, a RM2bil township on 72 acres in Section 7, Shah Alam.

“The investment of Al Rajhi in i-City demonstrates its real value and increasing interest among Middle Eastern companies in our property market,” I-Bhd director Eu Hong Chew said after the parties signed a sale and purchase agreement yesterday.


I-Bhd director Eu Hong Chew (left) and Al Rajhi Bank (Malaysia) CEO Ahmed Rehman posing with the signed documents for the purchase of RM95m worth of office units in i-City, Shah Alam, by the Al Rajhi Bank.

I-Bhd is the developer of iCity.

The purchase is to be completed over the next two to three months.

The first phase of i-City comprises 44 units totalling 300,000 sq ft. I-Bhd will retain 20% of the units for local information and communications technology companies.

By Bernama

Monday, July 28, 2008

Glomac keen to build more Grade A office towers in KL

DEVELOPER Glomac Bhd may build more Grade A office towers in Kuala Lumpur after its first such project was snapped up even before it started any work.

The company is now looking for land in prime areas like Bangsar, Sri Hartamas, Damansara and the city centre, group executive vice chairman Datuk Richard Fong said.


FONG: The company is now looking for land in prime areas like Bangsar, Sri Hartamas, Damansara and the city centre.

Glomac has sold the Glomac Tower in Kuala Lumpur, a 40-storey building next to the Petronas Twin Towers, to Prestige Scale Sdn Bhd, a company run by a local businessman for RM1,160 psf or RM577 million. The deal was done at the end of 2007.

"Glomac Tower is the first en bloc sale for us off the plans. We got an offer from Kuwait Finance House and Prestige we could not refuse as it was a good deal. We hit record price, which had set a new benchmark for Grade A office buildings for the city centre," Fong told Business Times in an interview recently.

The land was acquired last year by Glomac Al Batha Sdn Bhd for about RM1,000 psf from the Tan family of the Continental Hotel group.

Glomac Al Batha is a 51:49 joint-venture firm held by Glomac and Al Batha Group respectively, one of the largest private business concerns in the United Arab Emirates.

On the construction of Glomac Tower, foundation work will start in August and done in 12 months, followed by the main building, which will be completed by August 2011.

Fong said the project will be affected by higher raw material prices, but it has enough margins to cushion the increase in construction cost.

"We didn't anticipate the cost to go up by so much. The increase exceeded our expectations, but still we are able to make a handsome profit," he added.

Glomac Tower was initially worth RM450 million. It was revalued when the net floor area increased from below 500,000 sq ft to 550,000 sq ft, Fong said.

Glomac Tower will have 30 office floors, two retail and three sky restaurant floors including an open-air rooftop restaurant, four levels of elevated car park and four levels of basement car park.

It will be built in compliance with the requirements of the Multimedia Super Corridor (MSC) so that an application could later be made for MSC status.

By New Straits Times (by Sharen Kaur)

Reserves to help Mah Sing enter new markets

Mah Sing Group Bhd will be using its strengthening cash reserves to expand into new market frontiers in east Malaysia and Vietnam next year.

The company's cash pile of RM130.7mil as at March 31 will receive a boost with the scheduled completion of the en bloc sale of the east wing of The Icon@Tun Razak for RM236mil to Prompt Symphony Sdn Bhd by middle of next year.

Mah Sing's cash position was strengthened by a RM200mil capital raising exercise and proposed sale of two Grade A office buildings, The Icon@Tun Razak and The Icon@Mont'Kiara, for RM735mil last year.

Given the company's low gearing ratio of 0.03 times compared with the industry norm of 0.5 times, Mah Sing could also resort to bank borrowings for its regional expansion plans.


Datuk Seri Leong Hoy Kum

President and group chief executive Datuk Seri Leong Hoy Kum said the company was on track to become a regional lifestyle developer and some potential projects had been identified.

“We are in a very good position to make some opportunistic acquisitions.

“It is a good time to lock in land which have recently dropped in value and by the time the projects are launched in 2010, the regional economy should recover from the current slowdown,” Leong told StarBiz.

He said the company had been closely monitoring the situation in Vietnam and believed the country would recover from its current economic doldrums in the next six to nine months.

“There is still a severe shortage of houses for the country's 85 million people and our plans are to build landed residential projects and Grade A office buildings in high-growth cities,” he added.

Leong said Mah Sing was also looking at other strong growth countries including China, India and Indonesia.

In the next five years, the company's overseas projects will contribute 20% to 30% of group revenue.

Locally, Mah Sing is eyeing opportunities in Sabah and Sarawak to take advantage of the growth to be brought about by the Sabah and Sarawak growth corridors.

“The Sabah Development Corridor and the Sarawak Corridor of Renewable Energy have already attracted more than 30 foreign investors to each of the corridor.

“Kota Kinabalu's strong tourism sector offers big potential for the company to build its brand of themed commercial developments that include hotels, service apartments and shop offices,” he said.

Meanwhile, Mah Sing's 584 acres of undeveloped land bank have the potential to generate RM3bil in gross development value over the next five to seven years.

For the current financial year ending Dec 31, the company is looking at recording sales of RM560mil while new project launches will come up to RM706mil.

Citigroup Research, in a recent note, said that backed by high unbilled sales of RM1.1bil as at 31 March, Mah Sing could look forward to a three-year net profit compounded annual growth rate of 21%.

By The Star - StarBiz - (by Angie Ng)

Colour psychology helps boost business

CRACKING your head over the choice of colour for your home, office, show unit, shopping mall, product or even brand?

Well, you may need the advice of a colour psychologist like Karen Kow, the managing director of Colours In Motion Sdn Bhd that specialises in providing colour consultation to homeowners, interior designers, renovators, property investors and commercial property owners.


Karen Kow

Kow, who set up the company early this year, believes that colour could make or break the feel and value of a property.

“Many people have difficulty picking the right colours for their home. Some have a good idea of how they would like their room to look like but they may end up with mix-match of everything,” she said.

She added that many people were not very adventurous with colours and still kept the builder's white after many years.

“Light and colour can affect your emotions. For instance, it is important to choose bedroom colours that will calm and soothe a hyperactive child. Other colours encourage appetite or study,” she said.

“Colours can be used for corporate identity or it can be used to create a better working environment,” said Kow, who has a doctorate in metaphysical psychology, master's degree in metaphysical science (both from the United States) and a bachelor's degree in psychology from Britain.

Kow said colour could also affect one's perception of a product or brand.

“If you are looking to re-brand your corporate identity, we can suggest the most appropriate colours to send out the message you intend for the public and to attract your target market for your services or product by working closely with your branding, advertising, and creative team,” she said.

The use of distinctive colours to identify products, she said, could be seen everywhere. Some products are packaged in a variety of distinct colours while others tend to be packaged in variations of the same two or three colours in different designs.

She said each colour has its own individuality, wavelength and frequency.

“All physical, mental and emotional levels respond to colours. The application and usage of colour psychology is limitless because we live in a world full of colours,” she said.

“Colours can harmonise and produce effective results when used to complement an individual's character, home, and even the working environment,” said Kow, who has given consultations to clients in the US, Britain, Malaysia, Germany, Hong Kong, Australia, China and Singapore.

Her corporate and individual clients are from the hospitality, fashion, retail, banking, and property development industries.

She said research showed that people made a subconscious judgment about a person, environment, or product within 90 seconds of initial viewing and that between 62% and 90% of that assessment was based on colour alone.

Since colours used for a product, website, business card and a logo could cause powerful reactions, choosing the right colours is critical to successful sales.

Kow, who believes in enjoying everything she does and achieving a balanced and healthy lifestyle, said most people have their own favourite colours that reflected their personality, likes and dislikes.

“I do not have any favourite colours and I hope people will also like all colours and treat them impartially,” she added.

According to a handout, she is also a master practitioner of neuro-linguistic programming and holds a certification in professional clinical hypnotherapy.

Trained and certified as a colour therapist, she understands how colours affect human behaviours, emotions and physical health.

Kow is also founder and director of Path To Excellence, a company that does corporate training, hypnotherapy, executive life coaching, stress management and neuro linguistic programming.

By The Star (by S.C.Cheah)

IJM launches welded wire mesh plant in Hyderabad

NEW DELHI: IJM Corporation commissioned a RM16 million (Rs21 crore) welded wire mesh manufacturing facility in Hyderabad yesterday.

The project undertaken through IJM’s subsidiary IJM Steel Products Private Ltd is located in Isnapur near Hyderabad, capital of Andhra Pradesh.

The Hindu Business Line reported that the facility would operate with one production line initially, with a production capacity of supplying 12,000 tonnes of welded wire mesh per annum.

“Welded wire mesh for concrete reinforcement is new to the Indian construction industry. The manufactured product comes to the site ready for immediate onsite installation, contributing to higher productivity and better quality control,” said Datuk Krishnan Tan, chief executive officer and managing director of IJM Corporation.

“We are confident that the mesh is set to revolutionise the infrastructure and the real estate industry in India, which builds close to 1.5 million housing units a year,” he told reporters in Hyderabad after launching the facility.

Tan said the company planned to double its production capacity within the next three years at the Isnapur plant and has plans to set up a similar facility in Mumbai.

“We have signed up IJM (India) Infrastructure Ltd as our first customer. We wanted to first use our welded wire mesh product at our ongoing housing projects — a 120-acre project in Vijayawada and a 42-acre residential project in Nagpur — to create confidence among the Indian customers,” he said.

“We expect the Hyderabad facility to garner revenues of Rs35 crore (RM27 million) this year,” Tan was quoted as saying.

By Bernama

Sunday, July 27, 2008

2009 launch for IJM Penang project


An artist's impression of The Light.

KUALA LUMPUR: IJM Land Bhd's flagship development in Penang, The Light, valued at RM4.5bil, will be launched early next year.

Work on the 152-acre mixed residential and commercial development, on 338 acres of reclaimed land along the eastern coastline of Penang (near Tesco hypermarket), will begin in September and scheduled for completion in 2017.

IJM Corp Bhd deputy chief executive officer and deputy managing director Teh Kean Ming told StarBiz yesterday the development would comprise very upmarket waterfront villas, condominiums, office buildings, a hotel, shopping complex, “floating restaurant” as well as facilities for meetings, incentives, conventions and exhibitions. There will also be an amphitheatre, and an event stage on the sea, waterways and canals.

“This will be a very unique waterfront development that we plan to launch in the first quarter of next year. We may launch some low-rise condominiums and the water villas first,” he said, adding that the indicative price of the villas was about RM10mil each.

IJM Land managing director Datuk Soam Heng Choon said The Light would transform Penang into a modern and progressive state.

“The Light Waterfront is IJM Land's jewel in the crown. We are very proud of the project and are extremely excited about what it means for Penang in particular, and Malaysia as a whole,” he said.

Soam said the RM6.5bil mega project, to be developed over three phases, constituted over half the value of all properties featured at the i-Property exhibition, which opened at the KL Convention Centre yesterday.

He said the 42 acres under phase one would have six parcels of 1,186 units of high-end residential waterfront developments, while the 103-acre phase two would involve residential, commercial and retail properties.

He said that in line with the company's efforts to cut utility costs and promote green building concepts, The Light Waterfront would lead the way as Malaysia's premier eco-friendly development.

“In implementing this project, we will follow the guidelines prepared by The Leadership in Energy and Environmental Design, which will result in energy-efficient, healthier, and environmentally-sustainable buildings.

“We are committed to developing eco-friendly buildings as they will help our customers save on utility bills. This is important, especially now with rising energy costs,” he said.

Among the eco-friendly technologies are wind turbines, solar panels, a modern water management system and green roofs. The use of recycled materials in selected areas and a state-of-the-art solid waste management system are also in the cards.

Another unique “green” feature is the harvesting of coral reefs in the waterways around the residential phase.

By The Star - StarBiz - (by S.C.Cheah)

Beneton Properties to open lifestyle mall in mid-2009



BENETON Properties Sdn Bhd will open a 110,000-sq-ft lifestyle mall called Viva on Jalan Ipoh, Kuala Lumpur, in mid-2009.

Located opposite the Sentul Park, the project is scheduled to be launched this quarter and is expected to be fully occupied when it opens next year.

Viva is a mixed-development comprising a 27-storey apartment block with a retail podium. Its gross development value is estimated at RM100 million.

According to a press release by Henry Butcher Retail, the company instrumental in the planning and leasing of the mall, the annual rental collection from the retail components will be about RM2.7 million.

Beneton Properties has involved in projects like Stonor Park, 2Hampshire, Bangsar Peak and Prima Villa.

"Viva offers high quality retail facilities in a convenient shopping environment. It's set to transform the quality of retail facilities in Jalan Ipoh area from a tired neighbourhood to the latest trendy hotspot," Henry Butcher said.

The mall will adopt a main-street concept, said to be the latest and hottest retail development format in the US. This is in line with today's demand for thematic and lifestyle-oriented shopping places, it said.

The name Viva, which in Spanish means long live, cheer and lively, was chosen to represent the exciting lifestyle playground for the KLites.

The catchment for the mall includes the immediate occupants of the residential component as well as the population of around 150,000 within a 15-minute drive.

By New Straits Times

Varsity township land nearly used up

BANDAR Baru Bangi is 96% developed, and has two more years to go before its land bank is completely used, declared Selangor State Development Corporation (PKNS) development controller Siti Zubaidah Abd Jabar.

The township in Bangi is one of the new growth centres developed by the agency.

The 1,869ha township has a population target of 100,000 upon completion of all project developments.

It is developed based on the “university township” concept due to its close vicinity to 18 public and private institutions of higher learning like Universiti Kebangsaan Malaysia, Universiti Putra Malaysia, Selangor International Islamic University College, Malaysia France Institute and Universiti Tenaga Nasional.

“Bandar Baru Bangi used to be an oil palm estate before PKNS began developing the township in the mid-70s. Within 34 years, it has turned into a new growth centre and developed to almost full capacity,” said Siti Zubaidah.


PKNS project: One of the link houses at D’Cempaka in Section 9, Bandar Baru Bangi, which is installed with its own water harvesting system.

PKNS has allocated 20% of land use in the township for housing projects, 15% for recreational projects and 24% for institutional projects.

Industrial projects make up 11%, business 6% and infrastructure 24%.

“An issue of concern is the lack of public transportation, but the bus services are picking up,” she said.

“PKNS presently has eight ongoing projects in Bandar Baru Bangi that are worth over RM100 million. All these projects are done under the ‘Build & Sell’ concept.”

The eight projects are:

·46 units of two-and-a-half storey twin houses in Puncak Bangi (Phase 1a - sold out)

·48 units of two-and-a-half storey twin houses in Puncak Bangi (Phase 1b - under construction; about 40% completed)

·106 units of two-storey link houses and 20 units of two-storey twin houses at D’Cempaka, Section 9 (sold out)

·14 units of two-storey twin houses at Damai Suria, Section 3 (sold out)

·26 units of one-and-a-half storey twin factories at Taman IKS, Section 9 (sold out)

·210 units of apartments at Bangi Idaman, Section 5 (about 60% units sold so far)

·157 units of apartments at Cempaka Sari, Section 9 (unit sales to launch in Aug)

·22 units of two-storey twin houses at Villa Seroja, Section 7 (sold out)

Siti Zubaidah is particularly proud of the D’Cempaka housing project, the only PKNS development in Bandar Baru Bangi with a water harvesting system that is used for flushing the water cistern.


New technology: The individual water harvesting system installed at the houses at D’Cempaka.

“This is a new technology employed by PKNS to make use of natural resources. It costs RM5,000 for each house to have its own water harvesting system,” she explained.

PKNS’ remaining projects for the township include the construction of town houses/service apartments, office shops, a business complex and a convention centre.

Siti Zubaidah added: “Our future plan is to have social programmes for the residents to integrate and develop a relationship within the community.

“We’re working closely with the Bandar Baru Bangi Residents Committee to organise several programmes, like a weekly aerobics and kite-flying session, as well as activities for the upcoming National Day celebrations.

“The Selangor Mentri Besar (Tan Sri Khalid Ibrahim) has proposed the idea of having a book street at Taman Tasik Cempaka, which will feature a street selling knowledge-building materials like books and arts and crafts items.”

By The Star (by Jade Chan)

Stem rising building material prices, Govt urged

PROJECTS under the Ninth Malaysia Plan (9MP) will come to a stop if the government does not act immediately to stem the rising prices of building materials, construction industry bodies said.

They added that contractors could no longer absorb the rising cost of materials and were facing cash-flow problems although the market for steel bars and cement had been liberalised.

"Although these essential building materials have been liberalised, prices continue to soar to an all-time high," Master Builders Association Malaysia, Real Estate Housing and Developers Association of Malaysia, Persatuan Kontraktor Melayu Malaysia and Persatuan Kontraktor India Malaysia said in a joint statement yesterday.

The associations said that contractors may be forced to stop work, delay, or even abandon projects as a result of the costlier building materials.

"This will cause a lot of hardship to many people - clients, designers, suppliers, sub-contractors, and 140 other related industries, including the financial system," they added.

The associations said prices of steel bars and cement had gone of control since 2006, even with the Price Control Act.

In the case of steel bars, although liberalised last May, the process has not been well implemented and it has been difficult to import steel bars.

The associations said the liberalisation of steel bars and cement saw an immediate price increase by millers of 12 per cent for steel bars and 22 per cent for cement.

The higher cement price caused concrete price to rise 23 per cent, and there is a possibility it may increase further next month, they added.

The associations also want the government to undertake a quick study on the need to provide funds to stabilise prices and counter artificial shortages.

By New Straits Times

MRCB confident on sales of property projects

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) is confident its property projects will continue to enjoy good sales and tenancy despite the more challenging economic conditions.

Group managing director Shahril Ridza Ridzuan said that location and accessibility would always play a big part in the sale or rental of property, even during a downturn.

“Even during the Asian financial crisis, certain locations in Kuala Lumpur continued to register strong interest and secondary market transactions,” he said on the sidelines of the StarBiz -Institute of Corporate Responsibility Malaysia forum yesterday.

MRCB has been active in the property development scene in Kuala Lumpur while it entered the Penang property market just last year. The company is developing, on a joint-venture basis, office towers, hotels and serviced residences on 72 acres in KL Sentral. The project has an expected gross development value of about RM2bil.

Shahril said the broadband infrastructure and multimedia supercorridor status of KL Sentral was an added attraction for those thinking of relocating there for business purposes.

The company has about 100 acres in Penang and recently acquired a 3.34-acre freehold parcel in Batu Ferringhi from MBSB Development Sdn Bhd for RM26mil where there are plans for a high-end serviced apartment project.

Last June, Pelaburan Hartanah Bumiputera Bhd awarded a contract worth RM500mil in Penang to MRCB for the construction of landed and high-rise residential properties.

It is also developing the RM2bil Penang Sentral, a similar transportation hub on the island which, when completed, would connect the northern and southern halves of the peninsula. The project is a joint venture with Pelaburan Hartanah.

“Our Penang and KL Sentral property projects have a potential gross development value of RM5bil,” Shahril said, adding that property development contributed 65% to revenue, with the bulk currently coming from KL Sentral.

He said the company's bid for the RM350mil Kompleks Kerjaya 2, in Jalan Sultan Salahuddin, was still ongoing. Its construction arm's order book stood at RM2bil, he added.

By The Star (by Fintan Ng)

Friday, July 25, 2008

Mediterranean concepts that spell indulgence


Indulgence best describes Santorini’s latest 2008 collection, which exudes luxury with a contemporary touch.

Throughout the years, Santorini has designed furniture for some of the most prestigious hotels in the world.

Conceptualised by Spanish and Italian designers, the sleek clean-cut curves and bold lines create breathtaking furniture.

The Romera series is the main attraction in the 2008 collection. The unique cut and materials used, such as mahogany and leather, exude a warm and highly sophisticated feel.

The latest lounge set series – the Artalda, uses fabric fashioned in Spain and is waterproof and scratchproof for maximum protection.

With state-of-the-art technology from Germany, the lounge mechanism offers four different sitting positions for the headrest and armrest.

By The Star

Penang 2nd bridge project already generating spin-offs

The Penang Second Crossing Bridge (P2X) project, which is scheduled to open to the public by 2011, has already started generating value-added and positive spin-offs, UEM Group Bhd managing director and chief executive officer Datuk Ahmad Pardas Senin said.


PARDAS: To date, the company has extended opportunities to more than 40 subcontractors

He said work had actually commenced from the day Prime Minister Datuk Seri Abdullah Ahmad Badawi laid the first piling during the ground breaking ceremony in November 2006, and had not stopped since then.

"To date, we have extended opportunities to more than 40 subcontractors to participate in various preparatory works at this early phase. Some 30 consultants have already started working on the project.

"As the project progresses forward, we will definitely engage more local contractors to participate in this prestigious project," he said in a statement.

Pardas said P2X will increase job opportunities for locals, as well as contribute towards upgrading knowledge and skills of students in local tertiary institutions so that they can be hired and given choice incentives to work in the high-tech project.

UEM signed memorandums of understanding with the Ministry of Higher Education to assist in upgrading community colleges, especially in Penang - as a major initiative to develop knowledge workers and also develop human capital.

The group also provides training and guidance to local vendors so that they will have the required knowledge and skills to undertake projects of such magnitude.

"Via our UEM Young Executive Scheme (UEM YES), 200 young engineers and technical professionals will be selected to work on this project," Pardas added.

He said the group has outlined many corporate social responsibility initiatives including partnerships with local schools. So far it has adopted eight schools in Penang under the Pintar Programme, six via UEM Builders and two via Time Engineering.

UEM Group has already committed more than RM200 million for the P2X project. The total cost of the project has escalated to RM4.5 billion due to the increasing price of materials and fuel. Construction on sea is expected to start in the fourth quarter of 2008.

"We have made significant progress by completing soil investigation (on land and sea), pile testing and the construction of the Batu Kawan site office.

"The casting yard, located in Batu Kawan, is in the advanced stage of completion and will be used to produce segment box girders which is the most critical component of the bridge," he said.

Pardas said the project is one of the main catalysts for the development of the Northern Corridor Economic Region that encompasses Perlis, Kedah, Penang and Northern Perak.

"It will help spur socio-economic activities, contribute towards bridging island and mainland communities, and of course solve traffic congestion on the existing Penang Bridge," he said.

By New Straits Times (by Lokman Mansor)

Thursday, July 24, 2008

BLand gets offers for Seychelles hotels

BERJAYA Land Bhd (BLand) has received offers to buy both its hotels in Seychelles for US$62 million (RM201 million), its resort and hotel division head Foo Toon Kee said.



They are the four-star 232-room Beau Vallon Bay Beach Resort & Casino on Mahe Island and the three-star 80-room Seychelles Berjaya Praslin Beach Resort Seychelles.

"We have been operating there for over 10 years. We might consider the sale. We are still contemplating whether to sell or redevelop the place," Foo, the acting head of Berjaya Hotels and Resorts, told Business Times in an interview.

Should Berjaya decide to sell the property, it would be in line with its future plans to focus on five-star hotels and resorts.

Berjaya has had a presence on the popular island resort for over a decade.

When asked what would be a comfortable sale number for the hotels, Foo said: "They could fetch US$70 million (RM227 million) ... but I am not saying that we will definitely sell.

Yet another property it may consider selling if the price is to its satisfaction is the three-star Berjaya Georgetown Hotel in Penang. The 323-room hotel has a book value of about RM80 million.

The hotel produces a lower profit margin than its five-star hotels. It has an earnings before interest, taxes, depreciation and amortisation margin of about 20 per cent versus 45 per cent for the five-star properties.

In the event that the hotel is not sold, Foo said, the group may consider rebranding it to better distinguish the various star categories of the hotels under Berjaya.



By New Straits Times - Business Times - (by Vasantha Ganesan)

GuocoLand to triple investment in China

BEIJING: GuocoLand is aiming to triple its investment in China in the next three years, from US$3 billion now, a senior official with the Singapore luxury home builder said yesterday.

Against a backdrop of slowing domestic sales, GuocoLand is increasingly shifting its attention to other Asian countries, especially China.

“The broad investment climate in China is sound, and our board of directors is confident about the outlook here,” said Violet Lee, managing director of GuocoLand (China) Ltd, a wholly owned subsidiary of Singapore-listed GuocoLand.

Since it entered the Chinese real estate market in 1984, GuocoLand has developed 8 sites in Beijing, Shanghai, Tianjin and Nanjing.

GuocoLand’s most recent project is the Guoson Centre in Beijing, which includes a five-star hotel, offices, a shopping mall, apartments and a transport interchange that is the downtown terminus for the capital’s newly built airport rail link.

The hub was completed and handed over to the local government this month in time for the Olympics starting on August. 8.

The overall US$1.5 billion project is expected to be completed by late 2009.

China now accounts for 20 to 30 per cent of GuocoLand’s total revenues, a figure that is likely to rise as the company expands, Lee said.

GuocoLand’s landbank in China is expected to increase to 5 million square metres within three years from 2 million sq m now, she added.

“The focus of our development will be high-end multi-functional business properties in major cities, as we did in the past,” said Lee.

The developer, controlled by Malaysian tycoon Quek Leng Chan, is also looking to diversify its investments in China by expanding into sectors such as health and education, Lee said.

She did not elaborate.

Lee said GuocoLand’s profits in China would be hurt by Beijing’s drive to cool the real estate market as well as by soaring raw material and labour costs.

But she said the firm would broadly stick to its China growth strategy.

“We wish to hold our assets for a long time, at least 10 to 20 years,” said Lee, who won the Miss Singapore crown in 1984.

By Reuters

SunCity: REIT listing later this year

KUALA LUMPUR: Sunway City Bhd is evaluating various proposals for the listing of its real estate investment trust (REIT) in view of the overall bearish mood in the markets, its executive director Datuk Jeffrey Ng said.

Ng said that the property developer would continue with the listing of SunCity REIT in the second half of this year. However, he did not elaborate if the REIT listing would be delayed until market conditions improved. SunCity REIT has assets worth RM3.7billion.

Upon listing, the SunCity REIT was touted to be the largest in the country, with a property portfolio comprising three segments — retail, hotel and commercial.

Among the properties that would be injected include the Sunway Pyramid Mall which has a market value of RM1.63 billion, Carnival Shopping Mall in Penang, Monash University campus, Sunway University College and Menara Sunway.

Other properties included in the REIT would be the Sunway Resort Hotel & Spa and Pyramid Hotel.

“With the various properties involved, there would be fair bit of work to do as we recognise that the market is soft,” Ng told The Edge Financial Daily.

However, he declined to elaborate whether the company would opt to list in Singapore.

Compared with Malaysia, Singapore offers attractive incentives in REIT investments as investors are exempted from withholding tax.

According to the Singapore Exchange Ltd, foreign institutional investors and corporations are subjected to a 10% withholding tax up to February 2010. For REIT investment in Malaysia, a withholding tax of 28% is imposed on foreign institutional holders while individual investors are taxed 26%.

Analysts said the real estate investment industry in Malaysia (M-REITs) would be headed for tougher times as a result of the negative sentiment in the property sector due to rising construction costs and a decline in the housing take up rates.

JP Morgan said the growth of M-REITs was unlikely to outperform the property sector. It said the overall weak consumer and business sentiment arising from higher costs could lead to a slowdown in rental revisions.

The research firm said there was a lack of liquidity in the stocks. In a recent report, JP Morgan downgraded SunwayCity to a neutral stance as there was a possibility of the property developer delaying its REIT listing.

“Despite the strong asset base of properties to be injected into the REIT, we fear that the listing may be delayed given the lack of appetite for new equity and the recent de-rating of REITS overall,” property analyst Simone Yeoh said in the report.

JP Morgan revised the SunCity target price to RM2.16 from RM2.50 previously. It had also reduced the property developer’s earnings by 6% for FY08 and 13% for 2009 to account for softer residential property sales.

“Sunway City is evaluating proposals in the REIT structuring to make this listing successful. It is a matter of pricing and packaging the assets given the current market situation that we are in,” Ng said.

By The EDGE Malaysia (by Lim Shie-Lynn)

Wednesday, July 23, 2008

Bandar Raya's The Troika wins two CNBC awards


PRIME PROPERTY: BRDB Chief operating officer C.C.Pan (left) and BRDB International business general manager Sascha Khan (centre) receiving the awards from CNBC in Singapore recently.

Bandar Raya Developments Bhd (BRDB) has won two awards for The Troika, the country's first globally branded residential development, from the CNBC Asia Pacific Property Awards.

The 5 Star Best High Rise Residential and 5 Star Best Architectural 2008 awards are The Troika's second accomplishment for the year, as the development was also awarded Cityscape Best Developer Award for the future residential category in April.

The year has seen The Troika appreciating substantially in value.

Transaction prices have exceeded RM2,500 per sq ft, one of the highest in the city centre, positioning BRDB as an industry leader in the luxury property market.

"BRDB is consistently pushing the boundaries of design and quality in our aspiration for innovative yet timeless designs," said BRDB chief executive officer Datuk Jagan Sabapathy.

"We are thrilled The Troika has been singled out for such lavish praise in this prestigious award, as this helps cement our standing in the regional marketplace as one of the best in the industry," he said in a statement.

By New Straits Times (by Sharen Kaur)

SunCity property trust delayed

SUNWAY City Bhd (SunCity) has delayed plans to list its property trust, touted to be Malaysia's biggest, to next year, sources told Business Times.

The real estate investment trust (REIT), with an estimated property size of RM4 billion, was scheduled to be listed this year, three-and-a-half years since it first announced its intention to spin off a REIT.

Given that the proposal has yet to be submitted to the authorities, sources say SunCity may miss its target.

"Looking at the timeline required to list it and to have an effective roadshow in November or December is slim. As such, there will be a delay in the listing," a source said.

The delay may work to its advantage as markets around the world are not in good shape, rattled by worries over the global economy and high oil prices.

Malaysia's stock market has lost some 23 per cent so far this year.

The delay in the submission process is attributed to the large number of assets that SunCity plans to put into the REIT. The trust could end up having up to eight properties.

"Due to the number of assets and the diversity of the properties involved in sectors ranging from retail, hospitality and commercial, procedures for evaluation take a much longer time.

"It has taken SunCity longer than initially anticipated," the source said.


'In view of the softer market condition, SunCity is also evaluating other options on the structure of a REIT.’ >> Datuk Jeffrey Ng Tiong Lip Executive director Sunway City Bhd

SunCity's executive director Datuk Jeffrey Ng Tiong Lip, when contacted, did not confirm nor deny the delay, but said the group is looking at other options.

"The SunCity REIT is still moving forward. We are preparing the relevant documents. There are quite a number of assets involved and things like due diligence and valuation reports to be done in the process.

"In view of the softer market condition, SunCity is also evaluating other options on the structure of a REIT," he said, adding that pricing and packaging were important elements.

Ng, however, declined to elaborate what the other options may be.

Meanwhile, it is understood that SunCity is still weighing its option of whether to list on Bursa Malaysia or on the Singapore Stock Exchange.

SunCity has hired RHB Investment Bank Bhd, CIMB Investment Bank Bhd, US bank Goldman Sachs and Swiss lender UBS to help the company set up and list the property trust.

It plans to inject Sunway Pyramid, Sunway Carnival, Sunway Lagoon Resort Hotel and the Pyramid Tower, Menara Sunway, Monash University and its hostels.

Properties that are likely to be injected at a later stage include the recently-acquired Wisma Denmark, Sunway Medical Centre (which is undergoing expansion), the proposed KL South shopping mall in Cheras, and four office towers in Bandar Sunway that the group has proposed to build.

By New Straits Times - Business Times - (by Vasantha Ganesan)

Faber going big on high-end projects

PETALING JAYA: Faber Group Bhd is planning to launch several high-end projects from September with landed properties featuring prominently amongst them.

Upcoming launches include semi-detached houses, priced from RM1.1mil to RM1.3mil, and bungalows, from RM2mil to RM2.5mil each, in Laman Rimbunan, Kepong. The project is a joint venture with Metro Kajang Holdings Bhd in which Faber is the senior partner.

In Taman Danau Desa, next to the company's completed Taman Desa township, there are plans to launch 40 semi-detached houses and six bungalows, priced from RM1.9mil to RM2.5mil.

On a neighbouring parcel, there are plans to launch 38 three-storey link villas, with prices from RM1.6mil, targeted for a launch late next year. These projects are on a joint-venture basis with landowner Kuala Lumpur City Hall.

In Kota Kinabalu, Faber will be launching early next month 32 three-storey semi-detached houses and two bungalows in Taman Hilltop Perdana, while in the pipeline is a RM110mil project, comprising over 300 condominium units, in Lucky Heights.

Managing director Adnan Mohammad told a press briefing yesterday that developers would “need to reassess their projects” based on the challenging property market outlook.


Adnan Mohammad (right) and senior general manager for property development Khalid Abdul Majid

He said despite the challenging conditions with higher construction costs, the company's property development division was planning to launch a number of landed high-end projects in Kuala Lumpur and Kota Kinabalu.

“For us, location still sells and we're targeting mainly upgraders in mature locations near the city centre,” Adnan said, adding that Faber was still open to joint ventures or even acquiring land outright to replenish its dwindling land bank, which stood at a total of 45 acres in Kepong and Kota Kinabalu.

“Land acquisition will depend on a combination of factors, including location, price and type of projects that we can develop,” he said.

On earlier reports of Faber's interest in developing properties in Iskandar Malaysia, Adnan said any projects would be undertaken at the UEM group level. According to Faber's 2007 annual report, UEM Group Bhd held a 34.29% direct stake in the company.

“While I cannot speak on behalf of UEM, there's a possibility that projects secured under UEM Land Sdn Bhd (an indirect subsidiary of UEM Group) can be parcelled out to us,” Adnan said.

By The Star