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Friday, October 31, 2008

Sunway unit to operate Allson Capital in KL

Sunway International Hotels & Resorts, a company under Sunway Group, has signed a management agreement to operate the three-star Allson Capital Hotel Medan Tuanku in Kuala Lumpur in 2011.

The 198-room hotel, to be built at an estimated cost of RM82 million by Capital Properties Sdn Bhd, will be ready in the third quarter of 2011.

Sunway International's chief executive officer Hanley Chew said the hotel expects to achieve a 60 per cent occupancy and a RM175 average room rate (ARR) in the first year of operations.

The bulk of its guests is expected to be the business crowd. Apart from the domestic market, the hotel is also targeting travellers from the Asean region, Hong Kong, India, Middle East, Australia and Europe.

"Allson Capital Hotel Medan Tuanku will be fitted with business-class facilities, and will be designed to serve travellers who seek dependable, consistent and practical accommodation options. The hotel will offer 'selected services' accommodation for today's travellers without compromising comfort and design," Hanley said.

The hotel is expected to offer room rates below the traditional full-service hotel, despite its location in the heart of the city.

Some 55 per cent of its business crowd is expected to be corporate, contributed by multinational companies and the commercial sector from the Kuala Lumpur/Klang Valley areas. Another 15 per cent is expected to come from meeting and conference groups, both foreign and local.

The developer of the hotel, Capital Properties Bhd, was formed in the 1960s to engage in the development of the Medan Tuanku area of Kuala Lumpur. A subsidiary of Glenmarie Estates Sdn Bhd, this is Capital Properties' first hotel project.

Sunway International, meanwhile, manages and franchises hotels under the Sunway Hotels & Resorts and Allson Hotels & Resorts brand names.

By New Straits Time

Malaysia urged to promote property tourism

PETALING JAYA: Malaysia should promote “property” tourism to bring in foreign direct investment that would benefit not only the economy but also the retail industry.

Prime properties like this one in Setia Eco Park might be attractive to foreign investors.

International Real Estate Federation (FIABCI) Malaysia president Datuk Richard Fong said some real estate agencies in Penang had started to bring in groups of foreign tourists under a “property” tourism package that included visits to property launches and show houses.

The idea, he said, was to encourage these tourists to buy local property. As these visitors also shopped and stayed at hotels, their visits had benefited the hotel and retail industry, he added.

Fong, who is Glomac Bhd executive vice chairman, said the newly set up Malaysian Investment Inc by FIABCI Malaysia and the Economic Planning Unit, would strive to promote Malaysian properties abroad.

“With 1,000 foreigners each buying RM1mil worth of property in Malaysia, that will amount to RM1bil,” he said during a panel discussion on the “Synergies of shopping on tourism” at the Council of Asian Shopping Centres Conference 2008 on Wednesday.

He said it had been found that each foreign expatriate who bought a home in Malaysia spent an average of RM10,000 a month.

This would amount to RM10mil a month for 1,000 expatriates.

“They will also bring their friends to visit Malaysia. This is good not only for local properties but also for all of you (shopping centres),” he said, adding that the Malaysia My Second Home (MM2H) had been “under-played”.

Malaysian Association for Shopping and Highrise Complex Management advisor Datuk Eddy Chen, while advocating wholesome “family” tourism, also noted that “sin” tourism like casinos and karaoke lounges had brought in the big spenders for certain countries.

While it was a good to promote Malaysia as a tourism hub, Chen said it was also important to look into offering more quality products and services and increase Internet marketing.

“We’re neither here nor there whereas Singapore offers a cocktail of incentives,” said the Metro Kajang Group managing director.

Tune Hotels Sdn Bhd chief executive officer Mark Lankester in calling for a revival of “sports” tourism said Tune Hotels and its sister company AirAsia Bhd, were making it affordable for tourists to travel and stay in Malaysia.

By paying less on air travel and accommodation, tourists could spend more on shopping, he said, adding that it was part of Tune Hotels’ strategy to set up hotels near shopping areas and at shopping centres.

Malaysia Association of Convention and Exhibition Organisers and Suppliers president Jonathan Kan called for more “cross border” selling to promote travel among Asean nations and bring in more international conferences to Malaysia.

By The Star (by S.C.Cheah)

Ivory seeks investor for proposed 5-star hotel

IVORY Properties Group is looking for an investor for the 450-room five-star hotel planned at its Penang Times Square development in Penang.

Ivory Properties Sdn Bhd executive director Datuk Seri Nazir Ariff Mushir Ariff said the proposed hotel and podium block carry an estimated gross development value of RM250 million.

"The 10-storey podium block will comprise six floors of retail outlets and six parking levels," he told Business Times in an interview.

Nazir said the hotel will form the fourth phase of development for the RM400 million Penang Times Square project on the fringe of George Town's heritage enclave, which has been included in Unesco's World Heritage List.

"We are seeking an investor who is also keen to operate the hotel whose rooms are expected to take up 200,000 sq ft over 20 floors.

"Alternatively, we are willing to build the hotel if a renowned hotel chain is keen to operate it on a long-term basis," he said, adding that the proposed hotel is expected to break ground in 2010 and be completed by 2013.

Ivory Properties managing director Datuk Low Eng Hock said the company has held initial talks with potential investors from the Middle East, but nothing has materialised as yet.

According to Nazir, the first two phases of Penang Times Square, which include residential and commercial units, are scheduled to be completed early next year.

"The third phase, which will include a convention and exhibition centre and a cineplex, is expected to break ground by the end of 2009," he said.

The value of the residential units has already appreciated by 30 per cent, while that of neighbouring properties in the Datuk Keramat area has doubled.

Penang Times Square sits on 5.2ha where one of the country's oldest tin smelting operations, Escoy Smelting Sdn Bhd, once stood.

About 0.8ha has been earmarked by Ivory Properties for an urban open space and a heritage museum.

Ivory Properties' other projects include the luxurious hilltop villas at its "Moonlight Bay" development along the Batu Ferringi tourism belt and "The View Twin Towers" which overlook the Penang Bridge.

By New Straits Times (by Marina Emmanuel)

Las Vegas Sands, Resorts say S'pore casinos on track

SINGAPORE: Las Vegas Sands plans to open its Singapore casino by end-2009 as scheduled despite a report that the project will be delayed, a Singapore-based company executive said yesterday.

"We continue to target the end of 2009 for the opening of Marina Bay Sands," George Tanasijevich, general manager of Marina Bay Sands, said in a statement.

His comments follow a report in the Straits Times newspaper yesterday, which said the casino project was several months behind schedule due to construction issues and a shortage of labour.

An old sea wall built by British colonial rulers set back the laying down of foundation works on the construction site which sits on reclaimed land, the report said.

According to the paper, event organisers said the casino had indicated that it would only accept bookings from April 2010.

The Marina Bay Sands is being built on reclaimed land near Singapore's central business district and is scheduled to open in late 2009. The second, Genting International's Resorts World at Sentosa, is slated for completion in 2010.

Resorts World may also see a delay in the opening of some of its facilities although a casino spokeswoman said it was "on track" for a "soft opening" in 2010, the paper said.

The Straits Times said Resorts World at Sentosa was in talks with the government to defer the opening of some facilities in the US$4.1 billion (US$1 = RM3.55) project.

However, four hotels, the Universal Studios theme park and the casino would open as scheduled in the first quarter of 2010, the paper added.

The delay in the opening of some of the facilities is due to the need to find storage space for the equipment for the attractions in the Universal Studios theme park, it said.

Resorts World at Sentosa spokeswoman Krist Boo denied there were any delays.

"The development is progressing well and on schedule," she said in a statement.

The plan all along was for a "soft launch" in the first quarter of 2010 with Universal Studios, Festive Walk, the casino and most of the hotels, she said.

The other attractions, including the marine life park, a spa and two hotels were scheduled to open in subsequent quarters, she added.

By Reuters, AFP

Thursday, October 30, 2008

Mutiara set to launch RM1b worth of projects

KUALA LUMPUR: Mutiara Goodyear Development Bhd plans to launch about RM1bil worth of projects next year despite the poor economic outlook, said chief executive officer Kee Cheng Teik.

“Although the economic uncertainty has hit investors’ confidence level, there was demand for good projects with good locations especially in the Klang Valley and Penang,” he said after the company AGM yesterday.

From left: Mutiara Goodyear Development Bhd executive director Lim Beng Guan, Mutiara Goodyear Development Bhd CEO Kee Cheng Teik and Mutiara Goodyear Development Bhd executive chairman Hamidon Abdullah at the company's AGM on Wednesday. - Starpic by T.K. Lim

Kee said the company would be prudent to maintain a strong balance sheet.

“We will be more careful as to which projects we would launch first, depending on market conditions while focusing on containing costs involved.”

Mutiara had a net cash flow of about RM50mil as at July 31.

Projects in Mutiara’s pipeline include a commercial block in Sunway in Petaling Jaya, a 69-acre housing scheme in Kajang and a 456-acre mixed development project in Penang.

The company is also involved in the exclusive 80-acre freehold Nadayu property project near Taman Melawati in Kuala Lumpur, that will be launched by the first quarter of 2009.

Kee, referring to talk that banks were limiting borrowings for property developers, assured that all of Mutiara’s projects had sufficient financing.

“Our bankers have been very supportive of our projects,” he said.

Mutiara was looking to increase its landbank, which currently stood at about 890 acres in the Klang Valley and Penang, Kee said.

He added that the company was also exploring opportunities to develop properties overseas, especially in countries like Vietnam and China.

By The Star

Berjaya Hotels targets Mideast tourists

ABU DHABI: Berjaya Hotels and Resorts is going all out to woo more Middle East travellers to its properties in Malaysia, including those located on Tioman and Redang islands as well as Langkawi.

Its regional sales and marketing director, Peggy Tan, said Middle Eastern tourists are seasoned travellers, eyeing destinations where they could enjoy a total holiday experience.

“We’re not only talking about, say, good hotels and accommodation and good airfares here. It has to be a total holiday experience for them.

“And with properties on resort islands, the highlands of Berjaya Hills as well as in Kuala Lumpur, I think we should be able to meet their expectations,” she said on the sidelines of a workshop here yesterday, aimed at strengthening business ties with Middle East travel agencies and airline companies.

The event was part of a joint promotional roadshow with Tourism Malaysia, with Kuwait being the next stop.

Tan said the company believes that the Middle East is the key to helping it further boost its presence in the international travel and leisure industry.

She said Berjaya Hotels and Resorts had invested nearly RM66 million in product development and upgrading hotel facilities and would launch new rooms in Redang soon.

In addition, she said, the company has appointed Dubai-based Leen Marketing Services as its general sales agent for the United Arab Emirates and the Gulf.

“This office will be our eyes and ears that can hopefully spur more business from this region.

“It’ll enable us to elevate Berjaya Hotels and Resorts’ branding and positioning in the Middle East market,” she said.

A member of the Berjaya Corporation Group of Companies, Berjaya Hotels and Resorts is a public listed Malaysian conglomerate managing 15 properties in Malaysia, Singapore, Seychelles, Sri Lanka and the United Kingdom.

On the Middle East market, Tan said: “We’re realigning our marketing strategies, focusing our efforts on this market. The current downturn will have an impact to a certain extent. But as far as this market is concerned, I think this is a bright spot for us to tap.”

Disclosing that Middle East customers chalked up close to 10,000 room nights at Berjaya hotels last year, she said Berjaya would offer more packages developed in collaboration with its travel trade partners.

Being a Muslim country with wonderful culture and a wide array of culinary delights, Tan reckoned that Middle East travellers found Malaysia appealing.

She also commended Tourism Malaysia for having undertaken numerous promotional campaigns in this region to attract more tourists to Malaysia.

Tan said: “We’re committed to showcasing Malaysia as a premier holiday destination among Middle East travellers and are going into full gear with Tourism Malaysia in placing Malaysia prominently on the world map.

“The Middle East plays an essential part in helping elevate Berjaya’s brand name in the travel industry. And we’re certain that our travel trade partners in this region will find our new plans refreshing and exciting.”

Lucky workshop participants went home with attractive prizes, courtesy of Berjaya Hotels and Resorts and Tourism Malaysia.

By Bernama

'Malaysian mall operators, tenants still doing okay'

The number of shopping malls in Malaysia and their total gross area is expected to grow by some 20 per cent by the end of 2010, based on the current projects under development.

This is similar to the 20 per cent growth experienced in the first half of 2008 compared with the same period in 2006, where total number of shopping complexes reached 260 and total gross area was 144.6 million sq ft.

Net lettable area now stands at 82 million sq ft.

Mall development is expected to not only happen in city centres, but also suburban or small towns.

This was revealed by the Malaysian Association for Shopping and Highrise Complex Management (PPK), whose president Joyce Yap said in comparison to other countries in the region, the retail space per capita in Malaysia is still low. This provides an opportunity for further addition.

She was speaking at a press conference following the launch of the Council of Asian Shopping Centres Conference 2008 in Petaling Jaya yesterday.

Meanwhile, Yap said local mall operators and retail tenants are still doing well amid the current global financial crisis.

"Tenants are still (doing) okay. There has been no impact on their sales turnover and visitation," she said.

However, she added that if the situation warrants it, rentals may increase by a smaller percentage compared with previous years when tenancies are up for review.

PPK adviser Datuk Teo Chiang Kok said in the last three years, rentals in shopping malls have increased by up to 15 per cent, depending on the trade and location.

By New Straits Times (by Vasantha Ganesan)

Wednesday, October 29, 2008

Sunrise to proceed with launch of 3 projects

Property developer Sunrise Bhd said it will go ahead with the launch of two projects in Malaysia and one in Canada next year, worth a combined RM2.5 billion, despite concerns over cooling property prices.

The projects were supposed to be launched from December this year, but were deferred by a few months due to weak market sentiment.

They comprise a RM970 million maiden project in Richmond, Canada, featuring five residential blocks with some commercial elements; 28 Mont' Kiara, a six-star condominium development worth around RM900 million; and Solaris Towers, featuring two office blocks worth about RM600 million.

"There is a financial crisis but we will get ready and launch (the projects) when the market is better. We will hold the launches for a while partly because we want costs to come down," executive deputy chairman Datuk Allan Lim Kim Huat said after the company's shareholders meeting in Kuala Lumpur yesterday.

Lim did not rule out selling Solaris Towers en bloc.

As for the Richmont project, which is a modification of Mont' Kiara but with smaller built-ups of 600 to 700 sq ft, Lim said Sunrise will grow from there as margins are similar to its projects in Malaysia.

As for lower margins due to higher cost of raw materials, Lim said the easing of commodity prices will stabilise earnings.

He hopes Sunrise's net profit and revenue will do better this year, given that it has RM1.36 billion of unbilled sales with 32 per cent gross margins that will be realised over the next 30 months.

For its fiscal year ended June 30 2008, it achieved a 119 per cent growth in net profit to RM147.8 million from 2007's RM67.5 million. Revenue was higher by 22.9 per cent to RM685.8 million.

Sunrise's unbilled sales are one of the highest among local listed property firms and will soon touch RM1.49 billion as it gears up to sell 19 completed bungalows worth RM130 million.

"We hope to improve our performance this year. The next two to three years will not be an issue for us as by 2010, we expect to launch the (mix development) project at Wisma Angkasa Raya (opposite Petronas Twin Towers) in Kuala Lumpur, which is in the planning stage now," Lim said.

While the global economic slowdown will put some downward pressure on property prices, Sunrise hopes to maintain the pricing of its products which are targeted at the medium to high-income groups.

Sunrise's remaining 32ha in Mont'Kiara, with an estimated gross development value of more than RM3 billion, will continue to be the cash cow for the company over the next six to eight years.

It also has 160ha in Mersing, Johor, 80ha in Seremban, Negri Sembilan and 22ha in Serdang, Selangor for future launches.

By New Straits Times (by Sharen Kaur)

Sunrise is confident RM1.3bil in unbilled sales can sustain performance over three years

KUALA LUMPUR: Despite softer conditions in the property market, Sunrise Bhd expects to perform well in the next two to three years due to its high unbilled sales of RM1.36bil.

Executive deputy chairman Datuk Allan Lim Kim Huat said the sales were equivalent to about 2.6 times its average annual income over the past three years.

He said these sales came from four ongoing projects, namely 10 Mont’ Kiara (MK10), 11 Mont’ Kiara (MK11), Solaris Dutamas and The Residence.

“With these projects as well as three new projects in the pipeline, I think we will do fine in the next two to three years,” he told reporters after the company’s AGM yesterday.

Unbilled sales are similar to order books of construction companies; both refer to sales secured from customers but not yet booked as revenue in the profit and loss account.

As at July,Sunrise had sold 93% of MK10 units, 45% of MK 11, 92% of Solaris Dutamas, 9% of The Residence Phase 2B, 90% of Mont’ Kiara Meridin, 95% of Mont’ Kiara Banyan, and 100% of Kiara Designer Suites-Kiara Walk.

“We are quite busy constructing and delivering to buyers units in the ongoing projects.

“Although things are a little uncertain due to the economic slowdown, the next three years will be a busy period for us,” he said.

Lim added that Sunrise foresaw the pressure on margins easing given the recent plunge in commodity prices.

However, the company plans to defer the launch of its three new projects in view of weaker demand.

The three projects are a six-star condominium development called 28 Mont’ Kiara, two office blocks at Solaris Tower in Kuala Lumpur, and the first phase of a residential development in Vancouver, Canada.

“We are not under pressure to launch any project, as we want to launch them at the right time and at the right price,” he said.

Although there is a slowdown in demand, Lim does not see any major financial problems for the buyers.

“It is just that they are more careful making investments and have a wait-and-see attitude,” he said.

Originally, Sunrise had planned to launch the two office blocks and 28 Mont’ Kiara by year-end while the Canadian project was expected to be launched by February or March 2009.

Lim said all new launches would depend on market conditions.

He added that it might launch the Vancouver project, next year. The project has an estimated gross development value of C$350mil .

By The Star

YTL buys Singapore REIT

Portfolio worth S$2.2b includes prime properties on Orchard Road, and in Japan and China

INFRASTRUCTURE conglomerate YTL Corp Bhd yesterday thrust itself into the heart of Singapore's Orchard Road prime property belt when it took control of the Macquarie Prime REIT (MP REIT) and its management company Prime REIT Management Holdings Pte Ltd (PRMH) for S$285 million (RM678 million).

MP REIT also has other prime properties in Japan and China. Altogether, it has a property portfolio worth some S$2.2 billion (RM5.24 billion).

MP REIT holds 74.2 per cent of total strata lots in Wisma Atria on Orchard Road and about 27.2 per cent of the total strata lots in Ngee Ann City.

Together, the holding offers the longest stretch of street level frontage along the bustling upmarket Orchard Road.

YTL Corp's latest investment is an addition to its other projects in Singapore, including the Sandy Island and Lakefront developments on Sentosa Island, and the Westwood Apartments on Orchard Boulevard.

YTL Corp managing director Tan Sri Francis Yeoh was in Singapore yesterday to finalise the agreement with the REIT vendors.

The sale to YTL Corp involved 247.1 million units of MP REIT at S$0.82 (RM1.95) a unit.

Speaking to Business Times, Yeoh said the 49 per cent discount to the REIT's net asset value per unit was possible amid the current global market turbulence.

The price is, however, a 17 per cent premium over its 30-day volume weighted average price and a premium of 52 per cent over the units' last traded price.

The acquisition of 50 per cent of PRMH, together with the units, allows YTL Corp to control the REIT.

The units also provide an attractive 2009 yield of about 9.4 per cent based on a Bloomberg forecast.

MP REIT had a market capitalisation of about S$516 million (RM1.23 billion) as of October 24 2008.

Merrill Lynch (Singapore) Pte Ltd acted as exclusive financial adviser to YTL Corp on the proposed acquisitions.

There are firm plans to rename the REIT as Starhill Global REIT and the property manager as YTL Pacific Star REIT Management Ltd and YTL Pacific Star Property. Yeoh will then be appointed the REIT manager executive chairman.

"The proposed acquisitions provide the YTL group with an opportunity to globalise our Starhill brand," Yeoh said.

YTL Corp's Starhill brand now encompasses several prime properties in Kuala Lumpur's Bukit Bintang area.

MP REIT was listed on the main board of the Singapore Exchange Securities Trading Ltd on September 20 2005 at an initial public offering (IPO) price of S$0.98 (RM2.33) with the year's projected dividend yield of 5.12 per cent.

The IPO was oversubscribed by 35 times.

By New Straits Times (by Mustapha Kamil)

YTL ventures into S’pore REIT

PETALING JAYA: YTL Corp Bhd is making inroads in Singapore’s real estate sector with its proposed acquisition of about 26% in Macquarie Prime REIT (MP REIT) and 50% of Prime REIT Management Holdings Pte Ltd from Macquarie Bank Ltd for S$285mil.

Prime REIT is the holding company of Macquarie Pacific Star Prime REIT Management Ltd, the REIT manager of MP REIT, and Macquarie Pacific Star Property Management Pte Ltd, the property manager of MP REIT’s Singapore properties.

Merrill Lynch (S) Pte Ltd is financial advisor to YTL Corp on the proposed acquisitions.

YTL Corp said in a statement yesterday the group would acquire 247,101,000 units in MP REIT at S$0.82 each, which was a 49% discount to MP REIT’s net asset value per unit, a 17% premium over its 30-day volume-weighted average price and a premium of 52% over its last traded price.

The proposed acquisitions will be financed by internally generated funds.

The acquisitions, which would provide a yield of about 9.4%, would allow YTL Corp to control the REIT. MP REIT had a market capitalisation of S$516mil as of Oct 24 and owns over S$2.2bil worth of prime retail and office properties in Singapore, Japan and China.

Its asset portfolio include 74.23% of total strata lots in Wisma Atria and 27.23% of total strata lots in Ngee Ann City.

YTL Corp said upon completion of the transaction, it intended to rename MP REIT, the manager and the property manager companies to Starhill Global REIT, YTL Pacific Star REIT Management Ltd and YTL Pacific Star Property Management Pte Ltd, respectively.

As Starhill Global REIT will be a key vehicle of YTL Corp, the group planned to appoint managing director Tan Sri Francis Yeoh as the REIT manager’s executive chairman.

“Our vision and investment track record will enable us to add value to MP REIT through our sponsorship as we focus on re-branding and growing the REIT through yield accretive acquisitions of prime regional assets,” Yeoh said.

Since its listing on the Singapore Exchange in September 2005, MP REIT has added eight retail properties to its portfolio through the acquisitions of prime assets in Japan and China.

An analyst with a local brokerage said YTL Corp, with its war chest of more than RM10bil, was in a good position to pick up some quality assets at depressed prices following the global financial meltdown.

“With the price at a 49% discount to the net asset value, the proposed acquisition of MP REIT will provide stable earnings and good upside potential. By having a REIT in Singapore, YTL will be well placed to tap the city-state’s expanding real estate sector and promote its Starhill brand in the international market,” she added.

By The Star (by Angie Ng)

China, S.Korea must do more to avoid property crash

HONG KONG/SEOUL: China and South Korea have moved to prop up their frazzled housing markets but probably need to do much more to avoid major price slides that could ruin developers, damage banks and threaten the region’s economies.

A share price collapse this week for Chinese property developers such as Guangzhou R&F and China Overseas Land suggests that many investors believe a housing market bust is on the cards, despite a policy U-turn by Beijing.

“Investors might just be throwing in the towel,” UBS analyst Eric Wong said of the sharp drop, which saw some stocks lose as much as 35 per cent of their value over Monday and yesterday.

The Chinese government, fearing a price bubble, was in market cooling mode only a year ago, squeezing developers with a clampdown on loans and hatching moves to stamp out speculation.

New home prices then slumped by up to 40 per cent in the southern cities of Guanzhou and Shenzhen as sales dried up, and property firms began slashing prices across the country to keep cash flowing in.

The outlook grew even dimmer as the global credit crisis began to buffet Asia and batter its financial markets, stalling the region’s once-roaring economies.

So last week Beijing unveiled cuts in taxes, mortgages and down payments on homes in an effort to breathe life into a property industry that accounts for about 10 per cent of gross domestic product (GDP) in the world’s fourth-largest economy.

But the country’s biggest developer, China Vanke Co, reported yesterday a 13 per cent decline in net profit and a nearly 30 per cent drop in sales volume, in another reminder of how deep-seated the problems are.

If the housing market fails to perk up, analysts say policy makers will probably resort to macro-economic measures to spur demand, such as cutting taxes and interest rates.

“The usual monetary cocktail is a blunt instrument but it’s longer lasting,” said UBS’s Wong, adding that Beijing might also raise export subsidies and hike pay at state companies.

On the property side, the government could reel back on its measures to dissuade people from buying apartments as investments and tell banks to start lending to developers again, Wong said.


In South Korea, where around half the country’s personal wealth is tied up in property, the government pledged 5 trillion won (US$3.4 billion) last week to buy unsold homes and land from developers to prevent mass bankruptcies in the industry.

An interest rate cut of 75 basis points followed on Monday as policy makers tried to keep the global financial storm at bay.

The steps are a reaction to slowing economic growth and a steep climb in the number of unsold new homes on the market, which rose 43 per cent to a record 160,595 units in July from the end of 2007, according to government data.

Just as in China, the government had a hand in slowing the market in early 2007, tightening restrictions on mortgages and buying second homes.

Analysts believe freeing up finance for homebuyers is the answer, not just taking homes off the market. Apartment prices in the most expensive districts in Seoul and in satellite towns have fallen up to 20 per cent from their peaks in 2006.

“The measures came too late and are too weak,” Daiwa Institute of Research analyst Hyo Yim said of the government’s action to shore up the property market.

The government should loosen rules on mortgage lending and cut back taxes on owners of two or more homes, Yim said.

Mortgage debt in South Korea is still only a quarter of GDP, compared to 61 per cent in Australia, and 105 per cent in the United States, according to CLSA. In China, home loans equal only 12 per cent of GDP.

“The government cracked down on so-called speculative buyers, but people won’t buy homes if they don’t expect prices to rise,” said Yim, adding that the housing market would probably not recover before 2010.

Many of South Korea’s 12,000 builders face a cash crunch as credit dries up and home sales slow, with 88 firms defaulting in the first nine months of 2008, up 17 per cent from a year earlier.

Even top developers are not immune to such worries, with shares in GS Construction, Hyundai Development and Samsung Engineering tumbling between 37 and 50 per cent in the last month.

But some analysts are suggesting that South Korean construction stocks may have bottomed thanks to the government’s actions, with valuations at historical lows and at a 30 per cent discount in price/earnings terms to the overall stock market.

BNP Paribas analyst Jae Rhee has a 12-month target stock price for Hyundai Development that is double its current price. And the potential upside for GS Construction and Samsung Engineering is about 70 per cent, he wrote in a report last week.

Chinese developers are now trading at near 70 per cent discounts to net asset value, and at 7.4 times forecast 2008 earnings, according to Citigroup analyst Oscar Choi, who believes the stocks have been sold off “indiscriminately”.

And Beijing will do all it can to stop a property market crash, said CLSA analyst Nicole Wong, who has a buy rating on New World China Land and Agile Property.

“Policy is very supportive; basically they’re underwriting a put option on market,” she said. “For sure the government will take further steps if the downward spiral doesn’t stop.”

By Reuters

Asian wealth funds eye home turf

SINGAPORE: Asian sovereign wealth funds may become more visible shoring up markets closer to home as emerging economies look to their deep pockets to steer around the damaging effects of global market turmoil.

The shift will come after funds’ risky bets on Western banks such as Citigroup and UBS, where they pumped in billions of dollars during the early phase of the credit crisis, show little signs of paying off.

Wealth funds from Singapore, China and South Korea may instead look to invest growing cash piles in more defensive sectors such as Asian utilities and infrastructure firms, while keeping an eye on distressed property and financial assets in Western markets.

State funds, following their counterparts in Russia and the Middle East, could also pump cash into local banks to support domestic financial systems, and take part in private equity or debt deals to help firms refinance billions of dollars of debt.

“There has been another round of de-risking from assets like stocks in emerging markets over the last few days, but the SWFs are in for the longer haul,” said Jan Randolph, who covers sovereign funds at London-based consultancy Global Insight.

“I think they’ll still be looking for opportunities now that everything is a lot cheaper.”

Asian sovereign wealth funds, which Deutsche Bank estimated manage around US$1 trillion, or 29 per cent of the assets held by global funds, have become more influential in financial markets, but began building cash piles after the credit crisis worsened.

The fallout from the collapse of the US subprime mortgage market is now hurting the ability of the corporate sector to raise capital, forcing firms to look for state help.

According to Morgan Stanley, Asian sectors facing refinancing risks are banks, especially those dependent on markets for funding in South Korea, Australia, India and Hong Kong, as well as select property stocks in China, India and Australia, and some Australian utilities and infrastructure stocks.

In the corporate bond sector alone, US$17.2 billion worth of bonds mature next year, led by companies in South Korea, Thailand and Taiwan, according to Thomson Reuters data.

The Government of Singapore Investment Corp (GIC) gave evidence of such deals when it agreed to buy US$250 million in convertible debt of Australian property trust GPT, raising its presence in a country that accounts for just 2 per cent of its portfolio.

“The convertible bond space is offering unprecedented opportunities right now,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong.

“If you have capital you can take full advantage of that — the opportunities are far better than getting in on the equity side of a lot of these companies.”

Several investment grade sovereign and corporate bonds now give a yield of around 15 per cent and present opportunities for long-term investors, said Liew Tzu Mi, head of GIC’s global emerging markets team for fixed income, currencies and commodities.

But Liew told a seminar last week it was hard for investors to buy now as the cash market for many bonds has dried up.

GIC, which has over two-thirds of its investments in the United States and Britain, said recently it has been increasing its emerging market exposure in North Asia and the Americas.


The sea of liquidity among wealth funds was illustrated by Singapore’s GIC when it disclosed 7 per cent of its portfolio was in cash — over US$20 billion out of an estimated US$300 billion.

Korea Investment Corp (KIC), which has received US$30 billion from the South Korean government, said it expects to be defensive in a falling market by diversifying.

“In addition to such traditional assets as equities and bonds, a gradual increase in the proportion of alternative assets can diversify investment risks,” it said in a recent report.

But the crisis has not totally derailed SWFs’ appetite for big deals in the West, as shown by an Abu Dhabi state-owned venture capital firm’s move to invest US$2.1 billion in a manufacturing joint venture with Advanced Micro Devices.

And despite China Investment Corp’s (CIC) initial losses on its investments and recent concerns among regulators about overseas investments, the Chinese state fund went ahead to raise its stake in private equity firm Blackstone.

CIC still holds 90 per cent of its around US$200 billion of assets in cash. With the outlook uncertain for financials, these state-backed funds may also look to battered real estate markets and funds.

Property consultant CB Richard Ellis Group said allocations by sovereign funds to the commercial property sector could rise to 7 per cent of their portfolio over the next seven years, with the focus on markets such as Britain and Japan.

Steffen Kern wrote in a Deutsche Bank report that sovereign funds’ investment in the troubled financial sector may have peaked after they injected US$92 billion in the last 18 months.

“With a view to portfolio diversification, they may now be looking to other sectors for future investment opportunities,” Kern said.

By Reuters

Steel imports solution in sight

PETALING JAYA: The construction industry is in the final stage of discussion with the Government to iron out hitches in steel import procedures.

Effective May 12, the Government liberalised the prices of steel bars and allowed the import of steel bars free of tax. However, there has been some confusion at the Customs level.

Master Builders Association Malaysia (MBAM) president Ng Kee Leen said the discussion with the Government on the final details was expected to be completed soon.

“After four months of discussion, we have received a letter from the Customs Department agreeing that Malaysian standard MS146 is equivalent to British Standard BS4449. The confusion was one of the reasons for the steel bar import hitches,” he told StarBiz yesterday.

MBAM and the Real Estate and Housing Developers Association are leading the industry players in the discussion.

Since the Government lifted the ceiling price on steel bars and allowed the import of all steel bars that met the MS146 standard five months ago, there has been confusion on the ground as to the types of steel that can be imported tax-free.

“The Malaysian Customs did not realise that BS4449 steel bars were actually equivalent to the MS146. Thus, many international steel bars that met the BS4449 standard were not allowed to be imported just because of the different steel bar code,” Ng said.

“In addition, some Customs officers asked for import duty and import licence even though the Government had fully liberalised the steel market.

“The message of liberalisation was not understood by the Customs officers who worked on the ground. Hopefully, after this discussion is completed, the procedures and process of importing steel would be clear to all parties.”

Ng said the “full liberalisation” would be a positive move for the construction industry, as it would lower domestic steel prices to match those of neighbouring countries, which are about 10% to 15% lower. Currently, Malaysian steel bars cost about RM3,200 per tonne.

A source said that domestic monthly steel consumption had plunged to below 100,000 tonnes from about 200,000 tonnes in July in anticipation of the “full liberalisation” of steel imports.

Meanwhile, in a statement yesterday, Ng urged manufacturers, trading houses, distributors and Tenaga Nasional Bhd to adjust their prices accordingly, given that fuel prices had fallen recently. This would ensure that the benefits would be passed down to contractors.

“When the fuel prices increased in June, nearly all building materials’ prices jumped by 15% to 30%. The increase in diesel prices also caused transportation and machinery operation costs to rise tremendously by between 30% and 40%. All this happened in June.

“However, when world crude oil prices fell below US$65 per barrel and local fuel prices were adjusted downwards twice, transportation rates remained the same. Input prices have fallen but nearly all of the construction materials have yet to be reduced in price,” he said.

By The Star (by Law Kai Chow)

Tuesday, October 28, 2008

YNH Property’s sale of 50% stake in YNH Tower still on

KUALA LUMPUR: YNH Property Bhd's proposed sale of a 50% stake in YNH Tower to Kuwait Finance House (KFH) is still on and expected it to be formalised by year-end.

The company said in a statement to Bursa Malaysia on Tuesday that it was not delaying the sale of the 50% stake.

YNH also said the KFH acquisition offer had already been announced in January and it was “currently formalising the agreement by end of the year”.

On the second block, YNH stated it “is not in a hurry to sell or to seek a joint venture partner to complete the project”.

It added since the first block had been sold and the funding for the construction of whole development was essentially covered by the sale of the first block.

“Further, the location of the commercial development is very prime, within the Golden Triangle of Kuala Lumpur city centre,” it said.

By The Star

Emkay to develop more projects via Setia Haruman

The Emkay Group expects to boost its revenue in Cyberjaya, Selangor, by opening up new land for development via its stake in Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Setia Haruman, 75 per cent held by Emkay and 25 per cent by the UEM Group, has the rights to sell land parcels and plan, design and develop the infrastructure in Cyberjaya from 1997 until the project is developed by 2019.

It has 2,832.8ha of land under its belt, of which 30 per cent has been developed.

Mustapha Kamal: Cyberjaya project is going to be a vibrant development

Emkay, controlled by property tycoon Tan Sri Mustapha Kamal Abu Bakar, had previously bought 18.6ha of land in Cyberjaya from Setia Haruman for RM143 million to develop NeoCyber, an integrated development; MKN Embassy TechZone, an information technology park; and Bangunan Mustapha Kamal.

It may buy more land to build data centres, more purpose-built commercial buildings and a university for local and international investors, Mustapha Kamal told Business Times in an interview recently.

The group also wants to sell land parcels via Setia Haruman to local developers to build high technology buildings for overseas and local clients.

"The investment that Emkay did (in Cyberjaya) has shown results. Many big names have come in. It proves that the Cyberjaya project is going to be a vibrant development," he said.

Rental rates at Cyberjaya have increased from RM3.50 per sq ft a year ago to RM4.50 per sq ft now.

Emkay is developing MKN Techzone, featuring four commercial blocks worth RM350 million, developed under Phase One, and eight buildings worth over RM600 million in Phase Two, in a 60:40 venture with India's Embassy Group.

State-owned Amanah Raya Bhd (ARB) recently bought two blocks in Phase One, and also Bangunan Mustapha Kamal for RM266 million.

The buildings, which offer more than eight per cent yields, have been tenanted to government agencies for 10 to 15 years.

ARB chairman Datuk Dusuki Ahmad has indicated that the group may buy two blocks in Phase Two.

Emkay is looking for buyers for the other two blocks in Phase One, where one has been leased to Pejabat Pengarah Tanah dan Galian. It is finalising a deal to lease the last block to a government agency.

"The strategy that we took was to construct the buildings, lease them, and then scout for buyers. Embassy is expected to attract new investments from India," Mustapha Kamal said.

Due to good response from tenants and buyers, Emkay plans to launch Phase Two next year, offering two million sq ft of office space.

"Techzone will be developed as a campus project where everything will be integrated. We will not stop our activities because of the current global uncertainties," he said.

In the pipeline is a plan to build an 18-hole golf course and residential units.

By New Straits Times (by Sharen Kaur)

US new home sales up in Sept

WASHINGTON: Sales of new US homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported yesterday.

Sales of new single-family homes rose by 2.7 per cent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.

The surprising increase in September sales still left them 33.1 per cent below the level of a year ago as the US is battered by the worst slump in housing in decades. Analysts are not convinced that the sales increases are signalling a bottom for the housing market.


Saturday, October 25, 2008

Amanah Raya buys Cyberjaya properties

STATE-OWNED Amanah Raya Bhd (ARB), unfazed by the current financial turmoil, aims to double the size of its property trust to RM1.3 billion next year.

Chairman Datuk Dusuki Ahmad said ARB will buy properties that offer more than eight per cent yields for its AmanahRaya Real Estate Investment Trust (AR-REIT).

GROWTH PLANS: (From left) Ahmad Rodzi, Dusuki and Mustapha Kamal at the press conference.

AR-REIT, listed in February last year and worth RM645.52 million, is the first state-owned property trust and Malaysia's second largest REIT.

It is managed by ARB's asset management arm, AmanahRaya-JMF Asset Management Sdn Bhd, one of the leading fund management firms in the country with more than RM6 billion of assets under management.

Dusuki said ARB is committed to growing the REIT and will buy properties in Selangor, including Cyberjaya, but cautiously.

"The properties will be held under our own portfolio. When the time is right, they may be disposed of to the REIT," he said.

He was speaking to Business Times yesterday after inking a deal with the Emkay group to buy two six-storey commercial blocks at MKN Embassy Techzone and Bangunan Mustapha Kamal in Cyberjaya, worth a combined RM266 million.

The investments for commercial properties in Cyberjaya are the first for ARB.

Emkay, controlled by developer Tan Sri Mustapha Kamal Abu Bakar, is developing Techzone, a 4ha information technology park, under a 60:40 partnership with Bangalore's Embassy Group.

It features four purpose-built blocks worth RM350 million. Blocks A and B have been constructed and the other two will be ready by the end of next year.

ARB is buying Blocks A and B, which have been leased for 10 to 15 years to the Public Service Department and the Malaysian Administrative Modernisation and Management Planning Unit.

Bangunan Mustapha Kamal has a long-term tenancy agreement with the Education Ministry.

"The buildings offer more than eight per cent yields per year, giving us reasons to want to pump them into the REIT," Dusuki said.

Meanwhile, Emkay said it was considering launching Phase Two of Techzone, comprising eight commercial blocks sprawled over 8ha, adjacent to the four blocks.

Dusuki said ARB may look at buying one or two blocks under the second phase.

At a press conference later, ARB group managing director Datuk Ahmad Rodzi Pawanteh said it was in discussions on the possibility of further investments in Cyberjaya.

He also said that it would be up to AR-REIT to consider injecting the three commercial blocks into its fund. "At this point, we are still keeping it in our (ARB) portfolio and will decide if we want to dispose of it later to the REIT."

By New Straits Times (by Sharen Kaur)

Emkay plans office project in Cyberjaya

CYBERJAYA: The Emkay Group plans to construct eight office buildings in Cyberjaya with a total gross development value (GDV) of over RM800mil, as it sees great prospects for such properties in the area.

Chairman Tan Sri Mustapha Kamal Abu Bakar said the buildings would be built on a 8ha-site and construction would probably start by end-2009.

“The projects would take about six years to complete,” he said after a press briefing yesterday on the disposal of its three office buildings to Amanah Raya Bhd for RM266mil. The three buildings are Bangunan Mustapha Kamal and block A and B of MKN Embassy Techzone.

Mustapha Kamal said the rental rates for office buildings in Cyberjaya were expected to grow further due to the aggressive development in nearby Putrajaya.

“The rental rates in the area had increased to RM5 per sq ft from RM1 about 10 years ago,” he said, adding that demand for office buildings was still robust in Cyberjaya.

On the impact of the global crisis, chief operating officer Peter Teh Heng Poh said the effect was minimal, as most of its projects had been sold.

“There has been a slowdown in the demand of certain kinds of properties, such as apartments, in well-developed areas,” he added.

Teh said the company would create more products that could cater to the needs of information technology companies and was currently involved in the development of data centres.

On Emkay’s financial status, he said: “We have a good cash flow and are not facing any financing problems as the banks are supportive.”

Meanwhile, Amanah Raya group managing director Datuk Ahmad Rodzi Pawanteh said the company would lease Bangunan Mustapha Kamal to the Education Ministry for 10 years.

“We are in negotiation to lease the two remaining buildings to government bodies as well,” he said.

On the possibility of injecting the three buildings into AmanahRaya Real Estate Investment Trust (ARREIT), Ahmad Rodzi said the proposal was possible but the company would leave it to ARREIT to decide.

Amanah Raya subsidiary AmanahRaya JMF Asset Management Sdn Bhd is the manager of main board-listed ARREIT.

By The Star (by Lee Kian Seong)

Asian Finance to set up RM1.5b aviation, property funds

ISLAMIC lender Asian Finance Bank will set up aviation and property funds with more than RM1.5 billion, aiming to capitalise on demand for alternative assets amid the global financial crisis.

As financial markets skid under growing fears of a global recession, some Islamic banks are ploughing on with expansion and fund-raising plans, reflecting a belief that the industry is relatively resilient to the meltdown.

Asian Finance, which is backed by Middle Eastern shareholders, is planning a Gulf aviation fund which could be denominated in the euro or dirham, Asian Finance chief executive Mohamed Azahari Kamil said in an interview.

It was too early to state the fund size, but it would probably be more than RM1 billion, he said, adding that the bank is working on the fund with some Gulf airport operators.

"Aviation has always been a growth sector, particularly in the GCC (Gulf Cooperation Council member countries), because we believe there's potential in the transport business," Azahari said.

"Because of the scarcity of liquidity, we need to also look at the possibility of doing a fund which is maybe non-US dollar denominated," he added.

Asian syariah banks are aggressively wooing Middle East investors who want their money to be invested according to Islamic principles.

Asian Finance said on Thursday that it will distribute a RM1 billion Islamic fund to allow Gulf investors to invest in companies in the Asean region.

The move came in the wake of a plan by the Singapore unit of Kuwait Finance House, Kuwait's largest lender by market value, to raise US$600 million (RM2 billion) in Islamic funds next year to buy ships, stakes in private firms and properties in Asia.

By Reuters

Steel firms still strong

PETALING JAYA: Liberalisation of long steel imports earlier this year and falling global steel prices seem like a recipe for disaster for the Malaysian steel industry and the sector’s share prices have certainly reflected this.

This week saw Lion Industries Corp Bhd being heavily traded and its share price tumbling by over 31% since Wednesday. The stock finished at 49 sen yesterday against Tuesday’s close of 72 sen.

Of the other steel counters that have fallen since Wednesday, Kinsteel Bhd shed 10% to 39.5 sen; Perwaja Holdings Bhd plunged 14.5% to 74 sen; while Ann Joo Resources Bhd, which saw trading volume start to spike on Tuesday, fell 27% over the four trading days to close at RM1.19.

However, contrary to previous periods of turmoil in 2005 that saw alleged dumping by China-based steel makers with excess capacity, the current situation is more nuanced than one might imagine.

OSK Investment Bank analyst Ng Sem Guan told StarBiz the global steel industry was more disciplined this time and he did not expect to see much dumping.

Ng said the global steel sector, including China’s, had been experiencing strong earnings in the past two years and had the reserves to support a scaling back of production to maintain steel prices.

“China also has high costs and globally we are seeing the industry making production cuts to overcome market factors,” he said.

However, he conceded that the sudden onset of the US financial crisis would have some impact on the sector.

“A cycle change in less than two months is definitely a shock to the industry but the government is liable to monitor the import situation,” he said.

A Lion Industries spokesman attributed the fall in global steel prices partly to unexpected weather conditions.

“We view the drop in demand beginning in the third quarter as seasonal due to weather conditions hampering construction activities in Asia and the Middle East.

“The drop continued into the fourth quarter, mirroring growing uncertainties of underlying demand with the threat of a global recession and tighter credit facilities to steel traders and producers,” he told StarBiz.

The spokesman confirmed the company had curbed production. “We are closely monitoring the market situation and will adjust our production accordingly.”

On the industry outlook, he said the company expected the market to pick up in 2009, “given the cyclical nature of the steel business.”

As for the immediate term, he said costs for raw materials such as scrap metal had also dropped concurrent with the fall in global steel prices and he expected margins to be impacted.

Perwaja Holdings Bhd managing director Tan Sri Pheng Yin Huah disclosed that his company had also cut production.

“Yes, worldwide steel millers are cutting production and we are of the opinion that this is a sensible and wise move.

“It is wrong to perceive that the steel industry is troubled when steel millers cut production. The steel millers are adjusting their production according to market forces.

“Overstocking does not benefit the millers. Perwaja is monitoring the situation closely and its production level will depend on the market situation,” he said.

As for the industry outlook, Pheng said while there was still demand for steel products locally, it was “not as robust as before the credit crunch”.

He said the steel demand was closely linked to the Malaysian economy, which had not adversely affected by the financial turmoil and was still recording growth.

On the plus side, the cheaper steel stocks offer a good buy with OSK’s Ng saying that it would be “unreasonable to downgrade at these (current) valuations, with such low price to net asset value figures.”

Meanwhile, Master Builders Association Malaysia secretary-general Yap Yoke Keong said domestic steel prices were still about 15% higher than in neighbouring countries.

According to Yap, only the very large contractors in the country imported steel materials directly while the smaller players sourced from stockists.

Going forward, Yap sees some slowdown in construction activities in the medium term as both the private sector and the Government adopted a wait and see attitude in executing their projects.

By The Star (by Loong Tse Min)

Singapore private home prices fall 2.4% in third quarter

SINGAPORE: Singapore private home prices fell 2.4% in the third quarter, worse than an initial estimate of a 1.8% drop as the property market weakened sharply at the end of September.

Rents during the July-September period fell 0.9% after gaining 2.5% in the three months to June, the government’s Urban Redevelopment Authority (URA) said yesterday. Homes in prime areas registered the biggest price decline of 2.7%.

“We know the property markets turned so the revised figures were not a huge surprise. It’s more than likely the fourth quarter will see a sharper decline,” said Song Seng Wun, Singapore-based economist at CIMB.

The fall in Singapore home prices in the three months to September marked the first decline in four years and coincides with the economy’s descent into recession during the quarter.

Demand for government built HDB apartments remained firm during the third quarter as prices gained 4.2%, a separate index from the Housing Development Board showed.

The increase was, however, slower than the second quarter’s 4.5% gain.

By Reuters

Friday, October 24, 2008

i-Berhad expects RM2b township to drive profit

I-BERHAD, a home appliances maker turned property developer, expects to see double-digit growth in its net profit this year.

Director Eu Hong Chew said this would be driven by its RM2 billion integrated commercial township in Shah Alam, known as i-City.

Last year, the company made a net profit of RM1.9 million.

"The main (profit) drivers will be the investment by Al Rajhi Bank as well as our tenancies," he told reporters after a media preview of i-City yesterday.

A few months ago, Saudi Arabia's Al Rajhi Bank, the world's largest Islamic banking group, paid RM95 million to buy some commercial space in the first phase of the township's development.

i-City, which spans 72 acres and has MSC Cybercentre status, has so far managed to attract 12 companies, including two multinationals, to take up tenancy since obtaining its certificate of fitness six weeks ago.

Another eight companies are expected to move in before the end of the year, said Eu.

These 20 companies would take up about 30 per cent to 40 per cent of the township's office space.

Eu said 100 per cent office tenancy would be possible by the middle of next year as there has been strong demand for space.

He pointed out that developments like i-City stand apart from others in that it is an information, communications and technology (ICT)-based township.

"These are the kind of services office users are looking for, and they are market-driven," he said.

He added that i-City, envisioned to be a digital city, is on track to be fully completed by 2015 as planned, with a shopping mall, an innovation centre, corporate office towers, serviced apartments and hotels.

Eu said the company does not expect to defer any launches and that its fiscal performance is unlikely to be affected by any economic slowdown next year.

I-Berhad is also keen to do joint venture developments with other landowners outside of the Klang Valley.

"We have been approached by two or three developers to see if we can bring the i-City concept to their developments," Eu said, adding that such plans are still at a preliminary stage.

By New Straits Times (by Adeline Paul Raj)

Wind of fortune blowing for I-Bhd

SHAH ALAM: The wind of fortune is blowing for I-Bhd as the company charts a new course in real estate and information and communication technology (ICT). Returns from its maiden property development in Shah Alam are expected to boost net profit by at least 10% in the current financial year ending Dec 31, 2008 (FY08).

I-Bhd, formerly known as Sanyo Industries (M) Sdn Bhd, began as an electrical home appliances manufacturer. Stiff competition from low-cost producers in China had prompted the company to think outside the box, which eventually led to I-Bhd's exit from the business.

In the second half of 2005, I-Bhd unveiled its intention to undertake its maiden property project - the RM2 billion i-City. The integrated commercial development sits on 28.8ha (72 acres) of freehold land in Shah Alam's Section 7.

"The journey we started three years ago is bearing fruit. We have nowhere to go but up," I-Bhd director Eu Hong Chew told reporters during a media visit to i-City's development site yesterday.

"We expect double-digit growth in net profit in 2008," Eu added.

I-Bhd's earnings declined in FY08's second quarter ended June. Net profit fell 4.4 % to RM525,000 from RM549,000 a year earlier while revenue was down 36% to RM475,000 from RM742,000. Going forward, property development will be the company's major revenue source.

i-City, a privately-funded five-year initiative, is due for completion by 2011. The future digital city includes a shopping mall, offices and hotels, besides apartments. So far, 44 cyber office suites have been completed and sold.

i-City was certified as an MSC Cybercentre by the government in May this year, placing the project on a par with Cyberjaya, KL Sentral and the Kuala Lumpur City Centre.

The corporate makeover of I-Bhd has received the thumbs-up from a major shareholder. Permodalan Nasional Bhd (PNB) president and group chief executive officer Tan Sri Hamad Kama Piah Che Othman said PNB was convinced of I-Bhd's new business model which combined the expertise of real estate development and ICT, hence differenting the firm from other property players in the country.

PNB is the second-largest shareholder with 17.15% in I-Bhd, after Sumurwang Sdn Bhd which holds 54.45%. "Good things will happen here (I-Bhd)," Hamad Kama Piah said during the visit to i-City yesterday.

He was non-committal when asked whether the state-owned fund manager planned to raise its stake in the property developer. "I have to get my advisers' (opinion). Our people will look at it," said the captain of PNB which manages some RM120 billion as of June this year.

Other property firms under PNB's stable include Island & Peninsular Bhd and Petaling Garden Bhd. PNB had taken both firms private in 2007.

I-Bhd fits strategically into PNB's portfolio as the developer could extend its ICT expertise to other real estate firms held by the fund manager.

By The EDGE Malaysia (by Chong Jin Hun)

Thursday, October 23, 2008

I-Berhad eyes double-digit profit growth

Property developer I-Berhad aims to achieve double-digit growth in net profit by year-end, driven by its unique information and communication technology (ICT) infrastructure, said its director, Eu Hong Chew.

“These are the kind of services office users are looking for and they are market-driven,” Eu told reporters after the preview of its RM2.0 billion integrated commercial development, i-City, in Shah Alam today.

For the financial year ended December 31, 2007, the company recorded a pre-tax profit of RM700,000 on the back of RM1.631 million in revenue.

Eu said i-City was designed as a fully-integrated township, comprising a shopping mall, corporate towers and corporate offices, office suites, shop offices, office and retail suites, hotel, apartments, a data centre and an innovation centre.

“Concierge services are also provided in i-City, which is equipped with meeting rooms and event halls in order to cater to the needs of tenants.

“All meeting rooms and event halls are equipped with wireless broadband connection and state-of-art audio visual facilities,” he said.

By Bernama

YNH in talks with funds to complete RM2.1b KL project

YNH Property Bhd is delaying the sale of part of a RM2.1 billion tower being designed by Norman Foster as the global credit crisis threatens the Malaysian capital's biggest commercial property transaction.

The company may scrap plans to raise as much as RM1.2 billion by selling the second half of the project and is in talks with funds from Singapore, Hong Kong and Japan on a venture to help complete development of the tower, said Daniel Chan, head of corporate services at the Ipoh-based company.

"People are more cautious and want lower pricing," Chan said in an interview yesterday. "This global problem will definitely affect Malaysia. It would be foolish to say we will be shielded."

YNH stumbled attempting to carry out Kuala Lumpur's biggest commercial real estate deal as the global credit crisis threatened to tip the world into recession.

The Malaysian government said on October 20 it expects slower-than-expected growth next year as the US and Chinese economies cool.

Shares of YNH closed 7 sen lower at RM1.15 yesterday. The decline in the company's shares this year has outpaced the slide in the benchmark Kuala Lumpur Composite Index.

The company is delaying completion of the RM920 million sale of the first half of the 45-storey office development to Kuwait Finance House (Malaysia) Bhd, agreed to in January, because of design changes, Chan said.

London-based architecture firm Foster & Partners, which designed the Beijing Capital International Airport's newest terminal and "The Gherkin" skyscraper in London, was appointed in March to design the Kuala Lumpur tower.

Malaysian real estate prices may stall as the supply of office space will increase from 2010, said Mervin Chow, an analyst at OSK Research Sdn.

"A lot of supply will hit the market in Kuala Lumpur, so I'm not too sure whether they can demand a good price by that time," he said. "Supply is going to come in by the end of this year and the momentum is going to peak by 2011. The dynamics of supply and demand by that time is not going to be favourable for developers."

There will be an additional 24.8 million square feet of office space after 2010, compared with existing capacity of 56.8 million square feet, Chow said.

Malaysia will cut its 2009 economic-growth forecast on November 4, from the current estimate of 5.4 per cent, Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak said on October 20.

The developer is negotiating with funds that may take a 20 per cent stake in a venture to develop the tower.

Investing in the venture will allow the funds to receive earnings from rental while they wait for property markets to recover. They may then sell the building to a real estate investment trust, Chan said.

They "will have the ability to sell the second block to a REIT, that's what they have proposed to us," he said. "It's still in early stages of discussion."

YNH in January agreed to sell the first half of the development to Kuwait Finance.

The sale will be completed by year's end, later than planned, so the buyers can "make sure everything is right," Chan said.

The Grade A tower in Malaysia will have a retail podium and two office wings with total lettable space of 1.2 million square feet.

YNH plans to increase 2009 profit by 20 per cent to as much as RM120 million next year, based on RM300 million of sales.

"We are very cautious, we now like to be more conservative in what we are doing," Chan said. "If we are able to achieve our targets, it will be a bonus for us."

By Bloomberg

'Strong liquidity, firmer ringgit will boost properties'

SINGAPORE: The property market in Malaysia will be affected by the US financial crisis but strong liquidity and a firmer ringgit will help to weather the storm, a developer says.

Sime Darby Property Bhd managing director Datuk Tunku Putra Badlishah Tunku Annuar said for the country, liquidity would mean further access to mortgages.

However, lower interest rates would help to spur interest among consumers to buy house especially on the back of the economic uncertainties, he said.

“Malaysia will be one of the markets in the region that will be less affected by the crisis,” he told reporters here ahead of the launch of the rebranded Sime Darby Performance Centre here today.

Besides Malaysia, Singapore, which is the second biggest market for the developer, will also offer opportunities despite the current lacklustre property market, Badlishah said.

The company has a total landbank of 15,040 hectares in Malaysia, of which more than 75 per cent is for future development.

Last year, the Singapore business contributed 15 per cent to the developer’s bottomline while Malaysia’s operations accounted for 80 per cent contribution.

Among its successful projects in Singapore include the Orion, Balmoral Hills and the Sime Darby Enterprise Centre.

The company also has presence in Vietnam, China, the United Kingdom, the Philippines, Indonesia and Australia.

Badlishah said with the pressure of escalating material costs, the company planned to increase efficiency and procure centrally to help contain the external price pressures.

“We will be announcing some initiatives where we are tying up bulk purchases contracts with suppliers of raw materials so we can get good price for contractors. By doing so, we will be able to mitigate the cost increases.”

He said the company would also take a cautious stance on new property launches due to the slower demand.

By Bernama

UEM: Global crisis will slow growth

Infrastructure and property group UEM Group Bhd expects slower growth in the months ahead because of the global economic slowdown.

Managing director and chief executive officer Datuk Ahmad Pardas Senin said, however, that UEM Group, which has up to RM5 billion worth of projects in the country and overseas, will not be severely affected by the crisis although slower growth is expected.

"We don't feel the impact just yet, but there will definitely be slower growth.

"But our projects in Iskandar Malaysia and India are proceeding as planned," Ahmad Pardas told Business Times at the group's Hari Raya gathering in Kuala Lumpur yesterday.

The diverse group, which has interests in construction, property and highways, among other sectors, controls UEM Builders Bhd, Pharmaniaga Bhd and UEM Land Bhd, which is expected to be listed by month-end.

UEM Group in turn is wholly owned by government investment arm Khazanah Nasional Bhd.

On the second Penang bridge, Ahmad Pardas said the group was still awaiting word from the government on any new development.

The government last month withdrew the second bridge concession awarded to the group.

By New Straits Times (by Zaidi Isham Ismail)

Malaysian goods shine at China-Asean expo

NANNING: Hall 14 of the Nanning International Conference and Exhibition Centre in Nanning, Guangxi, China, was abuzz with visitors drawn to the Malaysian products on display at the 5th China-Asean Expo (Caexpo), which was launched yesterday.

In one corner, two Proton cars - a white Saga and a sporty-looking Symphony (Satria Neo) in orange and black stripes - held sway, drawing admiring glances and close scrutiny.

Other Malaysian exhibitors were not overlooked either, as visitors made their acquaintance with Made-in-Malaysia products ranging from assorted jam tarts from Sabah and automotive parts, to Ipoh white coffee and high-end stainless steel jewellery.

With almost 100 firms and government agencies from Malaysia promoting their products and services in the 2,900 square metres of exhibition space, there was certainly plenty to see, touch and sample.

The Malaysian booths in Hall 14 were part of the 3,300 booths from China and the 10 Asean countries participating in the Caexpo until October 25.

The event is co-sponsored by the Ministry of Commerce of China and its Asean counterparts as well as the Asean Secretariat, and organised by the government of Guangxi Zhuang Autonomous Region of China.

Held annually in Nanning, it is aimed at spurring the setting up of the China-Asean Free Trade Area (Cafta) and serving as a platform for China and Asean to enhance their bilateral economic and trading cooperation.

The expo, which is highlighting information and communications technology (ICT) cooperation as its theme this year, is divided into four exhibition pavilions, namely the Pavilion of Cities of Charm, the Pavilion of Investment Cooperation, the Pavilion of Commodity Trade and the Pavilion of Agricultural Applicable Technology.

Malaysia External Trade Development Corp trade commissioner Roslina Long said Caexpo is a valuable opportunity for Malaysian firms to showcase their products to China and other Asean countries.

Also held concurrently with the Caexpo is the 5th China-Asean Business Summit and other forums and conferences, including the 3rd China-Asean ICT Week.

By New Straits Times (by Chan Cheng Tuan)

Wednesday, October 22, 2008

YNH struggles with RM2.1b Foster tower

YNH Property Bhd is delaying the sale of part of a RM2.1 billion (US$600 million) tower being designed by Norman Foster as the global credit crisis threatens the Malaysian capital’s biggest commercial property transaction.

The company may scrap plans to raise as much as RM1.2 billion by selling half of the project and is in talks with funds from Singapore, Hong Kong and Japan on a venture to help complete development of the tower, said Daniel Chan, head of corporate services at the Ipoh, Malaysia-based company.

“People are more cautious and want lower pricing,” Chan said in an interview yesterday. “This global problem will definitely affect Malaysia. It would be foolish to say we will be shielded.”

YNH stumbled in attempting to carry out Kuala Lumpur’s biggest commercial transaction as the global credit crisis threatened to tip the world into recession. Malaysia’s government said October 20 it expects slower-than-expected growth next year as the US and Chinese economies cool.

The company is delaying completion of the RM920 million sale of the first half of the 45-story office development to Kuwait Finance House (Malaysia) Bhd, agreed to in January, because of design changes, Chan said.

London-based architecture firm Foster & Partners, which designed the Beijing Capital International Airport’s newest terminal and “The Gherkin” skyscraper in London, was appointed in March to design the Kuala Lumpur tower.

Supply Glut Looms

Malaysian real estate prices may stall as the supply of office space will increase from 2010, said Mervin Chow, an analyst at OSK Research Sdn Bhd.

“A lot of supply will hit the market in Kuala Lumpur, so I’m not to sure whether they can demand a good price by that time,” he said. “Supply is going to come in by the end of this year and the momentum is going to peak by 2011. The dynamics of supply and demand by that time is not going to be favorable for developers.”

There will be an additional 24.8 million square feet (2.3 million square meters) of office space after 2010, compared with existing capacity of 56.8 million square feet, Chow said.

Malaysia Slowing

Malaysia will cut its 2009 economic-growth forecast on November 4, from the current estimate of 5.4 per cent, Finance Minister Datuk Najib Razak said on October 20.

The developer is negotiating with funds that may take a 20 per cent stake in a venture to develop the tower. Investing in a venture will allow the funds to receive earnings from rents while they wait for property markets to recover. They may then sell the building to a real estate investment trust, Chan said.

They “will have the ability to sell the second block to a REIT, that’s what they have proposed to us,” he said. “It’s still in early stages of discussions.”

YNH in January agreed to sell the first half of the development to Kuwait Finance.

The sale will be completed by year-end, later than planned, so the buyers can “make sure everything is right,” Chan said.

The Grade A tower in Malaysia will have a retail podium and two office wings with total lettable space of 1.2 million square feet (111,000 square meters).

Shares of YNH have fallen 54 per cent this year, outpacing the 37 per cent slide in the benchmark Composite Index.

YNH plans to increase 2009 profit by 20 per cent to as much as RM120 million next year, based on RM300 million of sales.

“We are very cautious, we now like to be more conservative in what we are doing,” Chan said. “If we are able to achieve our targets, it will be a bonus for us.”

By Bloomberg

S. Korea to prop up building sector

SEOUL: South Korea said it would spend about US$4bil to prop up its wilting construction industry, the second major package this week as it grapples with the impact of the global financial storm on its economy.

President Lee Myungbak said the credit crunch around the world made South Korea’s economic situation even more grave than the Asian financial crisis a decade ago, which pushed the country to the edge of default.

“The overall situation is more serious than the 1997 crisis. Back then it was an Asian crisis but today the entire world economy is at risk,” a presidential spokesman quoted Lee as saying during a cabinet meeting.

“It’s not like any recovery of our own means we will have escaped the effects of the (global) crisis,” Lee said.

The latest package, which follows Sunday’s US$130bil rescue for the credit-squeezed financial system, will allocate over five trillion won (US$3.8bil) to the construction sector whose problems the government fears could ricochet through the slowing economy.

“It is feared troubles in sectors of the real economy, such as the construction industry, could make things worse in the financial sector as well,” the government said in a statement.

The money will be used to buy unsold new homes and land from domestic builders who want to pay off debt.

By Reuters

Seoul to spend US$6b to help builders

SOUTH Korea will spend as much as 8 trillion won (US$6 billion) to buy land and unsold homes, aiming to shield the property industry from a collapse that may worsen an economic slowdown.

State-owned Korea Housing Guarantee Co will buy 2 trillion of houses, the Ministry of Strategy and Finance and Ministry of Land, Transport and Maritime Affairs said yesterday in a statement.

Korea Land Corp will sell up to 3 trillion won of bonds to buy land from private companies. The rest of the funds will be used to provide debt guarantees and help low-income earners buy homes.

By Bloomberg

Tuesday, October 21, 2008

Relaxed FIC rules boon for residential property

PETALING JAYA: Further liberalisation of the Foreign Investment Committee (FIC) guidelines to attract foreign investors to the local property market, especially for commercial property, is most welcomed, industry players said.

It would be a most timely measure to raise the country’s attractiveness as a real estate investment destination, they said.

Lauding the economic stabilisation plans announced by Deputy Prime Minister Datuk Seri Najib Tun Razak yesterday, industry players said the Government’s proposed measures to review the FIC guidelines for the property sector would cushion the market from a demand slowdown caused by the global financial meltdown.

International Real Estate Federation (FIABCI) Malaysia president Datuk Richard Fong said while the FIC guidelines for residential property purchases by foreigners had been relaxed over the years, the commercial property sector was still subject to strict regulations.

Datuk Richard Fong

“Currently, a foreigner who wants to invest in any commercial property such as offices, retail malls, shop lots and factories but does not intend to occupy the premises himself, is required to have a bumiputra partner taking up 30% stake in the investment before he can go ahead with the purchase.

“This has been a huge restriction to commercial property sale as the guideline is deemed impractical and not advantageous to either party. It is not easy to find the right bumiputra partner who has the financial means to tie down their money for a commercial property purchase which usually runs into millions of ringgit,” Fong said.

Calling for the restriction to be relaxed, he said FIABCI Malaysia had proposed to the Government to impose such a requirement only on investments above RM100mil.

“There have been many instances where foreign interest for commercial property of RM50mil to RM100mil have been rejected because the right bumiputra partners could not be found,” he pointed out.

Fong said the relaxed FIC guidelines for the housing market that were introduced in December 2006 had attracted stronger interest from Middle Eastern, Korean, Japanese, Chinese, British and American buyers.

Since then, FIC approval for housing units priced from RM250,000 and restrictions on the usage and the number of units foreigners can purchase had been lifted.

Stressing that the property sector had the potential to attract higher foreign investments, Fong said the joint public-private sector initiative to launch Malaysia Property Inc next year to promote Malaysia’s real estate overseas had targeted to attract RM10bil in foreign investments over the next five years.

Meanwhile, Real Estate and Housing Developers Association president Datuk Ng Seing Liong said while the FIC had been relaxing guidelines for property purchases by foreigners, there were still restrictions imposed by state authorities.

At the state level, each state authority has the discretion to consider acquisition by a foreigner based on the location and type of property and the percentage of total units in a project. The transfer of property title is under the jurisdiction of the state government.

“These pertain mostly to issuance of property titles for projects involving state-alienated lands and bumiputra lots. State governments should abide by the Federal Government’s directive to relax rulings on foreign purchases to ensure the success of these measures,” Ng said.

By The Star (by Angie Ng)

Berjaya Land to proceed with overseas projects

BERJAYA Land Bhd (BLand), which has excess cash of RM1.8 billion from asset disposal and sale of loan stocks last year, will use more than half of it to fund overseas projects.

The projects are in Vietnam, South Korea and Libya, worth about RM50 billion, which will be released in phases over the next eight to 10 years, chief executive officer Datuk Francis Ng said.

Ng is cautious but bullish about the prospects, despite the current uncertainties in the global economy.

"We may rope in partners to work on the projects in Vietnam to cushion the volatile market. We believe demand will pick up due to the population size and the need for housing," he said after signing an agreement with Hanju Savanna (M) Sdn Bhd for the sale of Covillea Bukit Jalil condominiums in Kuala Lumpur for RM150 million.

BLand has four projects in Vietnam - the RM6.8 billion Vietnam Financial Centre and RM24.03 billion university township project in Ho Chi Minh City; Bien Hoa City Square in Dong Nai province worth RM752 million; and Thach Ban New City in Hanoi worth RM1.64 billion - launching from next year.

It plans to launch the RM11 billion Berjaya Jeju Resort development project in South Korea by the first quarter of next year and the RM6.8 billion integrated golf resort-cum-residential and commercial project in Tripoli, Libya, by mid-2009, Ng said.

"We expect the property division to contribute 50 per cent to the company's revenue by 2012 from 20 per cent currently. From the amount, 30 per cent will come from overseas projects," Ng said.

For fiscal year ended April 30 2008, BLand achieved a net profit of RM1.14 billion, largely from selling KL Plaza in Bukit Bintang, Kuala Lumpur, for RM470.6 million; two hotels in Seychelles for RM201 million; and irredeemable convertible unsecured loan stocks amounting to RM938.1 million.

Revenue tripled to RM1.52 billion due to the consolidation of Berjaya Sport Toto Bhd as a BLand unit.

Ng said earnings for the current year may dip due to outflow of investment funds for overseas projects.

Locally, BLand will launch 110 units of double storey houses or phase 2 of Berjaya Park in Shah Alam, Selangor, next month and 25 units of luxury bungalows worth RM175 million in Seputeh Heights, Kuala Lumpur, by December.

Ng said BLand is looking for en bloc buyers for the properties and also for its future launches.

"We hope to achieve RM350 million in sales by the end of the current fiscal year, from RM200 million currently," he added.

By New Straits Times (by Sharen Kaur)

BLand may put projects on hold

KUALA LUMPUR: Property company Berjaya Land Bhd may put some of its projects on hold due to the current bearish market sentiment but is still confident of generating some RM350mil in property sales in its financial year ending April 30, 2009, said chief executive officer Datuk Francis Ng.

But the company’s huge projects in Vietnam would not be affected, Ng said, pointing out he expected the property slowdown in Vietnam to be short term.

“We will proceed with our Vietnam ventures because it is a long term investment,” he said, adding that the company’s four property development projects in Vietnam were worth about US$2.5bil in gross development value (GDV).

He said he expected the overseas markets to contribute 30% of the company’s revenue in the next three to four years.

Ng said the global financial crisis and rising cost of building materials had brought on a slowdown in the local property market and that the company might have to review and postpone some projects until the market recovered.

But he said other new launches would boost the company’s total property sales and that Berjaya Land was confident of achieving RM300mil to RM350mil in sales this financial year.

Berjaya Land is scheduled to launch its Berjaya Park project in Shah Alam and Vasana Link Bungalows development in Seputih Heights before the end of the year.

“We are currently in talks for en-bloc sales of the properties,” Ng said, adding that the GDV for its 25-unit Vasana Link project was RM175mil.

“We have sold about RM200mil worth of properties currently,” he said after a signing ceremony between Berjaya Golf Resort Bhd and Hanju Savana(M) Sdn Bhd yesterday.

Berjaya Land’s subsidiary Berjaya Golf Resort signed a sale and purchase agreement with Hanju I&D Co Ltd’s subsidiary Hanju Savana, for the sale of its entire two blocks of the 20-storey Covillea Bukit Jalil condominiums for a total of RM150mil.

Ng said Berjaya Land was not in a hurry to raise new funds as it had about RM1.8bil from previous fund-rasing exercises, which it would use for future expansion.

By The Star

Bukit Kiara in UAE JV It is injecting RM700mil of properties

DUBAI: The Bukit Kiara group is injecting its properties, with a gross development value (GDV) of RM700mil, into a joint-venture (JV) company with United Arab Emirates’ Al Batha group to focus on property developments in Malaysia and overseas.

Under the JV agreement signed in Dubai yesterday, the JV company, Al Batha Bukit Kiara Holdings Sdn Bhd (ABBK Holdings), would be owned 60% by the Bukit Kiara group and 40% by Al Batha.

“The JV would enable both parties to expand their customer bases as well as leverage on each other’s strength to undertake property developments both in Malaysia and the UAE,” the two parties said in a joint statement

The Al Batha group, one of the biggest private investment groups in the UAE, would invest RM42mil in ABBK.

Al Batha, which is owned by the Al Qassimi family, has diverse businesses, including automobiles, pharmaceuticals, manufacturing, real estate and education.

As for the Bukit Kiara group, eight of its companies related to property development and previously 100% owned by Bukit Kiara Capital Sdn Bhd (which is under the Bukit Kiara group) would be injected into ABBK. These include the RM700mil worth of projects.

These eight companies include Bukit Kiara group’s flagship company Bukit Properties Sdn Bhd and seven others that are involved in interior design and contracting works as well as properties management services.

Bukit Kiara Properties Sdn Bhd managing director Tong Nguen Khoong said for the Bukit Kiara group, the formation of ABBK marked a significant milestone.

Speaking at the signing ceremony, Tong said Bukit Kiara Properties, which was set up eight years ago, had successfully completed its first and second projects with a GDV of about RM300mil.

“We are now in the middle of our third project, namely the Verve Suites, which comes in four phases. When completed, Verve Suites will reap in gross development revenue of close to RM530mil,” he said.

Tong added that the Verve Suites were now injected into ABBK as part of the RM700mil property projects.

He said ABBK would also undertake more property projects, the Persiaran Madge in Ampang and another along Jalan Tun Razak.

“We will also be exploring possibilities with Al Batha about expansion plans within Malaysia, the region and perhaps the UAE, where Al Batha has strategic pockets of land,” he said.

Tong said ABBK had started plans to open up a marketing and sales office in Dubai to tap into the growing affluence of UAE residents seeking alternative real estate investment opportunities.

Al Batha group managing director Rainer Joechen said the JV was an important step into the global market, where Al Batha wanted to have its operations or JVs with overseas companies.

“To invest in Malaysia is in line with the strategic objective of the Al Batha group to expand beyond the UAE,” he said.

Joechen said Al Batha was seeking to develop into the global markets and to have operations and JVs that would add value to its business.

Among those present at the official signing ceremony were Bukit Kiara group chairman Datuk Alan Tong Kok Mau and the chairman of the Al Batha group, Sheikh Ahmad Mohammed Al Qassimi.

By The Star (by Joseph Chin)