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Wednesday, January 9, 2008

Private-sector initiative to market MM2H programme

PENANG: Henry Butcher Malaysia is collaborating with a few private companies to spearhead the private-sector initiative to market the Malaysia My Second Home (MM2H) programme in overseas markets.

The company, together with the Expat Group and Malaysia Airlines System Bhd under its Property Investment/ Second Home (PI2H) programme are joining hands in efforts to market the MM2H programme in the UK in April.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat (pix) said that it was the first time such collaboration was being undertaken involving real estate experts and property marketing professionals to promote the programme.

“In addition, about 10 local residential property developers will also be involved in this mission to better promote the MM2H and other property investment programmes,” he told reporters yesterday.

He said that of the developers involved, about half would be based in Penang.

“We will mostly be marketing residential properties in Malaysia to showcase Malaysia as a property investment destination,” he said.

For starters, the collaboration will be heading to a property expo dubbed “A Place in the Sun” in
the UK on April 25-27. Teoh said that it would be showcasing products that met the expectations of the European market with a target audience of wealthy individuals as well as private equity entities.

“We also aim to have similar property investment missions to countries like Germany, Korea, Japan, Singapore and in cities like Dubai within the year,” he added.

Last year, Henry Butcher embarked on a similar mission to market properties in Georgetown to the Indonesian market with encouraging results.

Teoh said that some 100 Indonesians participated, snapping up a total of more than RM10 million worth of properties within three days.

Expat Group managing director J Andrew Davison said that a survey conducted by his company in 2006 revealed that on average, foreigners under the MM2H programme had brought in about RM180,000 per household into the country.

“Basically the programme is extremely beneficial to Malaysia as it stimulates the economy and
promotes cultural integration, which is important in this globalised world,” he said.

However, he said that inefficient implementation of the programme was the only negative effect in what was a good plan for the country. “There is a risk that other countries may capitalise on this and in the long run may be able to come up with similar programmes that are far more competitive,” Davison added.

By theSun (by Jonathan Chen)

Q&A with UEM Builder MD: Infrastructure projects to shape construction sector

QUESTION: What will be the main challenges for the construction industry in 2008?

Ridza: The main challenges for the construction industry in Malaysia will be to overcome the issues related to the increase in price of construction materials such as bitumen, steel, cement and fuel. The increase of these raw materials is partially due to the global economic environment which, to a certain degree, is caused by the volatility of fuel prices. Another challenge will involve the shortage and loss of human resource/skilled workers in the construction industry to other parts of the world due to more attractive offers especially in the Middle East. These shortages of skilled manpower resources can affect the bottomline of the projects in terms of cost overruns and delays.

RIDZA: Ninth Malaysia projects bode well for the sector

Q: How do you plan to overcome these challenges?

Ridza: As one of the major players in the construction industry in Malaysia and nation-building partner to the government in delivering mega projects such as the PLUS Expressway, Malaysia-Singapore Second Crossing, National Sports Complex and Putra LRT, we have to do our part to contain the situation by reducing the company's construction cost through a more efficient way of conducting and improving operations.

One of the methods is by improvement of systems and processes with the use of information and technology (IT) to enhance efficiency.

As a leader, UEM Builders will endeavour to cascade these efficient methods to all the sub-contractors and suppliers for our projects. There is a critical need to cut red tapes, eliminate unnecessary bureaucracies, make fast decisions, communicate well through paperless methods and technology to execute works on the ground. A good example of innovation and technology in UEM Builders is the use of SMSes for approval and fast decision-making, which can be done anytime and anywhere. Hence, the use of IT in communications to obtain approval and to expedite decision-making processes on the ground with the objective of completing any project within the shortest time possible. This will help to a certain extent to counter the issues of the price increase. The challenges in the construction industry require the co-operation of the major players in the industry. The key players in the industry will also need to come together as a team to draw policies, strengthen and highlight construction issues especially in relation to the increase in material prices. For example, the reinstatement of price fluctuation clauses in the contract will enable the contractor to focus on the completion of the project. This will entail the support of the government as well as private sector in implementing such policies.

Q: What are the trends that can shape the construction industry in 2008?

Ridza: Infrastructure projects will be fundamental in shaping the construction industry in 2008. As such, the growth of this sector will be derived from the implementation of major transport-related infrastructural projects such as the Second Penang Bridge, Penang Monorail, Ipoh-Padang Besar double-tracking rail project and the extension of Ampang and Kelana Jaya light rail transit lines.

Efforts to develop southern Johor, on-going development in the Northern Corridor Economic Region together with the newly-launched East Coast Economic Region stand to add further impetus to the overall growth within the construction sector and many other related industries. However, we will need to overcome the inertia associated with major projects which requires strong commitment and skills of various decision makers, planners and engineers.

Q: What are the future prospects for the industry in 2008?

Ridza: Based on the Economic Report 2007/2008, the Malaysian economy is anticipated to strengthen further to between six per cent and 6.5 per cent, as against six per cent in 2007, with positive contribution from all industry sectors. The construction sector is also poised to strengthen further with a growth of 6.3 per cent (2007: 5.2 per cent). With the announcement of the corridors, there is a strong commitment to make the construction industry as the contributor to the Malaysian economic growth. As such, it is expected the future prospects for the industry in 2008 to be certain and bright, especially in the context of the Ninth Malaysia Plan projects proposed by the government which includes projects such as the Northern, Southern and Eastern Corridors Economic Region. However, there must still be a concerted effort by the government and private sectors to overcome issues, one of which is the escalation of material prices.

Q: How will the industry be affected by the expected rise in fuel and electricity?

Ridza:We foresee that the rise in fuel and electricity will definitely push the price of construction materials. This will have to be addressed by making provisions in the contracts and providing sufficient allowances for the price increase when undertaking the project. UEM Builders' other approach to mitigate the issue is by diversifying and broadening its base. We have plans to diversify into the construction of civil and engineering works for the oil & gas sectors and property development not only in Malaysia but overseas as well. We will use and ride the wave of these sectors to enable us to insulate ourselves from the potential increase of material prices. In addition, we intend to venture into smart partnership basis projects to reduce company's risks especially for oversea markets. Under this scenario, we will be able to manage our risk through a wider distribution of resources and spread our business portfolio into one of which is equitable and not place all the eggs into one basket.

By New Straits Times

Malaysia Airports to unveil property project in 2-3 months

A DECADE OLD: (From Left) Bashir, Malaysia Airports Chairman Tan Sri Dr Aris Othman and Chan at the launch of the KLIA 10th Anniversary campaign logo yesterday

Malaysia Airports Holdings Bhd (MAHB) plans to unveil its maiden commercial property development, involving some 10,000ha of KL International Airport (KLIA) land area, in the next two to three months.

Managing director Datuk Seri Bashir Ahmad said under the plan, which is part of its future growth strategy, the project will have a recreation park, business centres, offices as well as a theme park.

He was tight lipped on the project's details.

"We have already come up with a proposal for this project. We will make an announcement on this in two to three months," he told reporters after the launch of KLIA's 10th anniversary campaign by Transport Minister Datuk Seri Chan Kong Choy in Sepang, yesterday.

The airport operator aims to increase its commercial or non-aeronautical revenue to 50 per cent by this year.

Aside from the property project, MAHB is also revamping retail and food and beverage outlets at the airport area.

Bashir said MAHB expects to receive between four and five new foreign airlines flying into KLIA this year. Talks are still ongoing.

"We are still at the talking stage at this moment. We will not disclose the name of these airline as we want them to make the announcement themselves."

A total of 53 airlines are currently operating in KLIA, including seven new airlines that started their operations last year.

He also expects KLIA to handle between four and five per cent more passengers this year, against last year's 26 million passenger.

About seven million of that are those using the low-cost carrier terminal (LCCT).

As part of the 10th anniversary campaign, MAHB launched the logo, theme song and new attire for the frontline staff.

"The year 2008 will also be a good year to showcase KLIA's strength and credibility, as more than 2,000 airport and airline representative around the world will congregate in Kuala Lumpur for the 14th edition of World Route Development forum (Routes), for which MAHB will be the host," added Bashir.

By New Straits Times (by Anna Maria Samsuddin)

Malaysian property developers to showcase products abroad

The profile of Malaysian properties in the overseas property market will be further raised this year, as local property developers begin showcasing their products in a series of exhibitions abroad.

Henry Butcher Malaysia (Penang) Sdn Bhd is spearheading an investment delegation to the UK in April, which will see the participation of 10 Malaysian developers.

The property consultant will be collaborating with Malaysia Airlines (MAS) and Kuala Lumpur-based The Expat Group.

"We are targeting affluent individuals and private equities in the UK," the company's chief executive officer Dr Teoh Poh Huat said after a half-day seminar on "Branding Malaysia as a Destination For Property Investment and As a Second Home" in Penang yesterday.

Teoh said the property mission from April 25 to 27 will be part of the "A Place In The Sun" property exhibition in London.

"A Place in the Sun" is a British daytime lifestyle programme about buying property abroad. It most often focuses on places in southern Europe, but in recent years has also featured a number of places in other areas of the world.

Spin-offs from the programme have included a magazine, which is now the most popular magazine advising on buying overseas property, and a live exhibition in London, also called "A Place in the Sun Live".

Teoh said apart from the UK, Henry Butcher is also eyeing markets like Germany, Dubai, Hong Kong and Singapore to promote Malaysian properties.

"Our efforts in showcasing Malaysian properties in Indonesia last year had already seen about 40 buyers from Sumatera snap up RM10 million worth of Penang properties," he said.

Last year, MAS' holiday marketing arm Golden Holidays teamed up with Henry Butcher in Penang to launch the "Property Investment and 2nd Home" (PI2H) programme, which was aimed at drawing more tourists to Penang.

The programme, which is designed to lure more foreigners to invest in Penang properties is targeted to bring in 7,500 foreigners to Penang per year.

"We expect to double this figure within four to five years and eventually register an estimated 25,000 foreigners per year to Malaysia under this programme," MAS area manager (northern region) Wan Mohd Ebrahim Wan Hasnan said.

By New Straits Times (by Marina Emmanuel)

Sunway Holdings close to exiting highway ops

The coast is clear for Sunway Holdings Bhd (formerly Sunway Holdings Inc Bhd) to transform into a regional player in the construction materials, quarrying and property development sectors, with the expected completion of the divestment of its 36.16% stake in Sunway Infrastructure Bhd (SunInfra) by the end of this month.

Sunway managing director Yau Kok Seng sees strong prospects for the group going forward, with 50% of earnings for financial year ending June 30 (FY08) expected to come from overseas, especially Singapore, India, China, Vietnam, and Trinidad and Tobago.

Sunway is close to exiting the highway concession business altogether with the completion of the debt restructuring for Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (SILK), a 100% unit of SunInfra.

Tan Sri Jeffrey Cheah

At a recent EGM, SunInfra shareholders approved the proposed cancellation of Sunway's undertaking granted to SILK in favour of the holders of the RM2.01bil Al-Bai Bithaman Ajil Islamic debt security (BaIDS) issued by SILK. The BaIDS bondholders had, on Aug 17, given the green light for the restructuring and refinancing of the BaIDS.

The exercise involved RM50mil cash and the transfer of Sunway's equity interest in SunInfra to the bondholders. After the exercise, the bondholders will take over the shares and management of SunInfra.

Sunway group chairman Tan Sri Jeffrey Cheah had said a few parties were keen to buy the stake in SunInfra.

SunInfra, through SILK, has a concession to collect toll at the RM1.25bil, 37km highway in Kajang until 2037. But poor traffic volume has affected toll collection.

The company no longer has to account for losses arising from SunInfra, as the investment was fully written down to nil in the last financial year.

Yau said the key growth areas for Sunway were the quarrying, construction and construction materials, both locally and overseas.

Since moving back to the quarry business two years ago, Sunway has captured second place in the Klang Valley market. It has seven quarries in Malaysia and two in Vietnam.

The company is also growing its core business of construction and its order book stands at more than RM2bil, of which about 50% comes from abroad.

Sunway is seeking new projects in Malaysia and overseas, especially in Trinidad and Tobago and the Middle East. Its construction, quarry and building materials divisions stand to benefit from the Ninth Malaysia Plan while the supply of construction materials to Singapore will also boost earnings.

Aseambankers Equity Research is raising Sunway's net profit forecasts for FY08 by 18% and by 12% for FY09 and 10% for FY10 on revised assumption for margins from its construction, quarrying and property development businesses.

It expects Sunway to deliver a stronger 152% growth in core net profit for 2007, and a three-year compounded annual growth rate of 59% versus 55% previously.

The research house remains positive on Sunway and rates the stock a “strong buy”.

By The Star (by

Record H1 sales for SunCity

Sunway Palazzio condo (both picture above)

PETALING JAYA: Sunway City Bhd (SunCity) has achieved record unbilled sales of RM1.2bil in the first half of the financial year ending June 30 (FY08) with the en bloc sale of two projects.

Property development managing director Ngian Siew Siong said the projects were Sunway South Quay (two blocks), which was sold to a South Korean investor on Dec 27, and the Sunway Palazzio Block B, which was sold for RM219mil to Radiant Splendour Sdn Bhd.

Ngian Siew Siong

“The 80-unit super luxury condominium in Sri Hartamas (Sunway Palazzio) was sold at RM750 per sq ft and the building is due to be completed in 2010,” Ngian told a media briefing yesterday.

Sunway Palazzio condo

The 249-unit South Quay luxury condominium was sold for RM171mil to Luxury Court Sdn Bhd, a joint venture between South Korean developer CI Korea and Korea’s first real estate asset management specialist Daol Fund.

South Quay, located in the southern precinct of Sunway Integrated Resort City, will consist of 10 blocks of condominiums when fully completed.

“With the en bloc sale of the two projects, we expect to perform better and surpass our target sales of RM1.35bil for the current financial year,” Ngian said, adding that its maiden project in India, Sunway Opus Grand Residency, had not been included in the targeted figures.

He said SunCity to date had achieved RM924mil sales, representing 68% of its FY08 target.

He said SunCity was now in talks with Korean and Middle East investors for the en bloc sale of other blocks in South Quay.

Chief financial officer Koong Wai Seng said the RM1.2bil unbilled sales would form the foundation of the company’s future earnings for at least 1½ years.

Currently, SunCity has 3,000 acres of unlaunched landbank, including in India, Cambodia and Australia, worth a total of about RM13bil.

Koong said SunCity expected 30% revenue contribution from its overseas projects in five years from less than 5% currently.

By The Star