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Wednesday, January 30, 2008

Exciting times ahead for tourism sector


SABAH’S tourism industry, which has been identified as the key driver for the state’s development, can look forward to exciting times.

In line with the state government’s aim to make every year a “Visit Sabah Year”, the Sabah Development Corridor (SDC) masterplan has incorporated three developmental phases, designed to transform Sabah into one of the most liveable places in Asia by 2025.

In Phase One, the blueprint will focus on addressing the basics to support tourism development and lay foundations for its future growth. Phase Two will see Sabah strengthen its position as a premier eco-adventure destination via conservation and sustainable development of new tourism products, which will be anchored by signature resorts. Lastly, Phase Three will turn Sabah into a bustling metropolis within a tropical paradise.

Tourism is currently the third highest contributor to the state’s gross domestic product (GDP), after agriculture and manufacturing. During the Eighth Malaysia Plan (8MP), the sector’s contribution to Sabah’s GDP was 7.4%, and this is expected to grow to 10% in the 9MP period.

Prime tourist attractions including Mount Kinabalu and Sepilok Orang Utan Sanctuary and Rehabilitation Centre in Sandakan have consistently drawn many tourists and adventure-seekers to Sabah. But the SDC blueprint will also seek to promote lesser known natural landscapes such as the Maliau Basin and Darvel Bay as Sabah’s “gems”.

As home to one of Malaysia’s only two United Nations Educational, Scientific and Cultural Organisation (Unesco)-conferred World Heritage Site status, that is, Kinabalu Park (the other being Gunung Mulu National Park in Sarawak), Sabah is actively pursuing the same status for a few more sites. Sites that are listed for consideration are Sipadan Island, Tun Sakaran Marine Park and the Maliau Basin.

If successful, the listings would not just boost the popularity of these sites but make them important for environmental conservation purposes among the international community.

However, these lesser-known sites lack accessibility, mainly due to Sabah’s rugged terrain and poor road system. Such sites are also precious research areas, and have fragile ecological systems that are vulnerable to pollution and damage by swarms of tourists.

Hence, the SDC blueprint will explore various opportunities to improve Sabah’s current infrastructure and networks to boost tourism, but with sustainability in mind.

Taking the leap with eco-tourism
Increasing environmental concerns have changed the pattern of tourism globally. According to The International Ecotourism Society, eco-tourism is estimated to grow 20% annually, compared with just 7% in overall tourism, making it the fastest-growing segment of the industry.

However, as the eco-tourism industry in Sabah is largely driven by the private sector, the industry faces a shortage of utility services such as water supply, electricity and waste disposal.

Responding to the demand, the SDC masterplan will look into providing infrastructure- supporting services to attract and facilitate private sector investment.

But to keep the delicate balance between developing the industry and preserving and conserving Sabah’s natural landscapes, the blueprint will develop the Sabah Eco-Certifi cation Programme (SECP) to assist travel operators in measuring and managing the impact of their operations on the environment.

The demand for more personalised travel is set to overtake the conventional beach-based, mass tourism destinations. As such, the SDC blueprint will seek to attract renowned signature resorts such as Four Seasons, Ritz-Carlton and Bvlgari to anchor new, luxurious tourism products, including wellness spas in the highlands such as Kundasang, or Sabah’s islands.

Under the SDC implementation, Sabah will also be marketed to high-end investors that are seeking to own private villas which overlook virgin rainforests and untouched beaches. In view of this, the blueprint is also looking at the possibility of granting high net-worth individuals long-term social visit visas, which will encourage these individuals to make Sabah their second home.

‘One district one product’ programme
Among the many players that will benefi t from Sabah’s strong tourism drive is its local people. Under the programme “One District One Product” (ODOP), local communities will be able to earn higher income by producing handicrafts and food products distinctive to their cultures.

ODOP will be spearheaded by Kraftangan Malaysia and Yayasan Sabah, along with various ministries, including the Ministry of Tourism, Culture and Environment. The task force will identify potential products, besides providing advice to local communities on quality control and attractive designs and packaging for domestic and export markets.

The branding for authentically “Made in Sabah” products will ensure that rural communities receive a sustainable income. Startup grants will also be provided for entrepreneurs interested in ODOP production full-time.

Additionally, the Keningau Handicraft Production Village which will function as ODOP’s primary training centre will also aim to preserve the diverse handicrafts of Sabah’s natives and traditional production methods, through research and documentation.

Another feature of ODOP is its homestay programmes, whereby villages that are located near major tourist attractions or have distinct lifestyles and activities, will be selected to pilot the programmes.

A Visitors Centre will be set up in each of the selected villages to manage the homestay programme and act as an information centre as well as to provide training to villagers to learn basic courtesy, language skills and tour and activity-guiding.

An example of this initiative is the Rungus Longhouse at Bavanggazo Village, Matunggong, which gives tourists opportunities to experience tranquil, rural life and to participate in the daily activities of the longhouse, including clothweaving and accessories-making from colourful beads. In line with this, some villages have been identifi ed as high potential areas, including Kampung Air in Semporna, Mengkabong Water Village in Tuaran, and other interior villages in Kudat and Tenom.

With more than 32 different indigenous groups, Sabah is wellplaced to become a key destination
offering diverse experiences for the culture-seeking traveller.

Appealing to the international community
Sabah has the potential to tap the 34.5 million international visitor arrivals at the region’s major
aviation hubs of Kuala Lumpur, Hongkong, Singapore and Bangkok.

To do so, it is poised to recreate its landscape to appeal to the international community. In the pipeline is the Kinabalu Harbour Front that will stretch from Tanjung Aru to One Borneo, modelled after Australia’s renowned Sydney Harbour waterfront. A Waterfront Development Masterplan will be commissioned to coordinate the development of this world-class waterfront city.

The Kinabalu Harbour Front will be anchored by key projects including the RM2-billion Jesselton Waterfront and Kinabalu Integrated Convention Centre (KICC). These projects are also expected to spur the development of water taxis and buses that will ply the harbour, jetty points, various hotels, as well as a maritime museum and ferry and cruise terminal.

Adding to its international appeal is a performing arts centre, which will nurture Sabah’s creative
industries and artistes. The SDC blueprint will also set aside RM250 million for its Arts and Culture Development Fund to support budding creative talents such as playwrights, choreographers and composers, and emerging arts organisations specialising in indigenous art preservation.

Meeting increasing demands
Major hotels enjoy an average 80% occupancy rate during peak seasons between July and August and December and January. An increase in tourism numbers may lead to a shortage of rooms, especially during peak holiday periods.

The Sabah Tourism Board says to counter the problem, about 4,000 to 5,000 new hotel rooms are expected to be completed by 2010.

Among hotel operators planning to increase hotel rooms is the Sutera Harbour Resort. Its chief operating offi cer Ravindran Kathiravelu says the hotel group is developing two luxury service condominium development projects on its 384-acre property.

“ ‘The Vista at Sutera Harbour’ and ‘The Point at Sutera Harbour’ will each comprise over 400 units of two to three-bedroom confi gurations.

“The construction for ‘The Vista at Sutera Harbour’ is set to commence in the middle of this year and is targeted to be completed within 36 months from the date of construction, (which) is our commitment in line with the expected growth of tourist arrivals to Sabah in the future,” he says.

Malaysian Hotel Association Sabah Chapter chairman Alex Cham says resorts are popular among foreign tourists, but local tourists prefer to stay in city hotels.

Cham says Sabah is currently lacking beach resorts, but expects the situation to change in the next two or three years.

“A lot of investors are looking at setting up beach resorts, especially along the east coast of the city, where it is less congested and has beautiful beaches,” he says, adding that the demand for backpacking lodges is also encouraging.

By theSun (by Yong Yen Nie) - Sabah Development Corridor: A Special Report- pt.2

SP Setia in maiden Sabah venture

Malaysia's most valuable property company, SP Setia Bhd, has unveiled plans for its first venture in Sabah, a RM1 billion mixed development project in Tanjung Aru.

The project is a major bet on the economy of Sabah, which is set to benefit from an 18-year development plan, estimated to attract investments of more than RM100 billion.

SP Setia group managing director and chief executive officer Tan Sri Liew Kee Sin said the project will see the state become a springboard for its stable of brands and enable the company to capitalise fully on the anticipated economic boom there.

"The expansion into East Malaysia is in line with the group's aim to diversify its geographical concentration to other high-growth states as well as international markets.

"This will be our first showcase project in Sabah to establish our credentials and earn the trust of the property-buying public in the state," Liew said in a statement released yesterday in Kuala Lumpur.

Industry executives said that Sabah would pose a major challenge because of the low purchasing power of its people and the soft property demand compared to that in Peninsular Malaysia.

"SP Setia has to come up with innovative and quality products, which can start a property trend," Irhamy and Co property valuer Sharizal Supian said.

SP Setia subsidiary Aeropod Sdn Bhd signed the deal with the Sabah state government yesterday, witnessed by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Under the agreement, SP Setia will build a transport terminal and new headquarters and ancillary buildings of Jabatan Keretapi Negeri Sabah on part of 24 hectares near the Tanjung Aru township and the Kota Kinabalu International Airport.

In return, it will have the rights to develop the balance of 17ha into a mixed residential and commercial project, named Aeropod @ Tg Aru.

The project will have a shopping mall, a five-star as well as a three-star hotel, and residential condominiums, among other developments.

Aeropod @ Tg Aru will be modelled after the creative hybrid commercial projects that SP Setia has launched, such as Setia Walk and Setia Nexus 1 in the Klang Valley.

By New Straits Times (by Zaidi Isham Ismail)

SP Setia gets over RM1bil jobs

It will develop project, transport hub in Sabah corridor

PETALING JAYA: SP Setia Bhd is moving into Sabah where it will develop a RM1bil property project, known as Aeropod @ Tanjung Aru, and a transportation hub as part of the Sabah Development Corridor (SDC).

Prime Minister Datuk Seri Abdullah Ahmad Badawi launched the SDC yesterday and witnessed the signing of the development agreement between SP Setia subsidiary Aeropod Sdn Bhd and the Sabah government.

Under the agreement, Aeropod would build the transportation hub in return for the state government procuring the alienation of three parcels of land measuring 59.21 acres and valued at RM110mil. The hub will comprise a transport terminal, new headquarters for Jabatan Keretapi Negri Sabah and ancillary buildings.

The land is sited 5km southwest of the Kota Kinabalu town centre and 2km northeast of Tanjung Aru. It is is near the Kota Kinabalu International Airport and the Low Cost Carrier Terminal 2.

In a statement, SP Setia group managing director and chief executive officer Tan Sri Liew Kee Sin said the project was a crucial stepping stone for the company into the state and that it aimed to capitalise on Sabah's anticipated economic boom.

He said the expansion into Sabah was in line with the group's goal of diversifying into other high-growth states in Malaysia as well as overseas. It currently has projects in the west coast of Peninsular Malaysia and Vietnam.

A shopping mall, a 3-star and a 5-star hotel, condominiums and small office home office units have been planned as part of the Aeropod @ Tanjung Aru.

An SP Setia spokesman told StarBiz that the company would start construction of the transportation hub as soon as possible. She said the hub would not cost more than the agreed RM110mil.

“Aeropod @ Tanjung Aru can only be realistically launched around the end of next year or the beginning of 2010,'' she said.

An analyst said that Aeropod @ Tanjung Aru would most likely cater to tourists since Tanjung Aru was in the tourist belt of Kota Kinabalu.

He noted that the company's first integrated commercial project, Setia Walk in Puchong, had done well with almost all units sold. However, the analyst cautioned that a comparison between Sabah and the Klang Valley could not be made based solely on the size of the population.

He said this was due to the state having a blueprint for development under the SDC in which the agricultural, manufacturing and services sectors would figure prominently over the next 18 years.

“Developers can tap into this for more synergies,” he said.

By The Star

Suria signs MoUs for KK development

PETALING JAYA: Suria Capital Holdings Bhd has signed memoranda of understanding (MoUs) with Kota Kinabalu Pavilion Sdn Bhd, IJM Properties Sdn Bhd and Glomac Bhd for the development of certain specified precincts of the Jesselton Waterfront Project.

Suria group managing director Datuk Abu Bakar Abas said on Tuesday that the MoUs were signed for the purpose of combining the resources and expertise of the various parties in the development of the project. He said the development would be undertaken via individual joint ventures with the three companies concerned in which Suria's subsidiary, Suria Bumiria Sdn Bhd, would hold 50% of the equity, with the rest to be held by the individual companies.

The MoUs called for the development of 5- and 10-storey luxury condominiums called Suria Avenue, and 3- and 4-storey shopoffices called Suria Boulevard with Glomac, a 5- or 6-star boutique hotel and 16-storey condominium with 200 units called Suria Vista with IJM, and 3- and 10-storey commercial and office buildings with Kota Kinabalu Pavilion.

By The Star

Boustead exercising option on two estates

PETALING JAYA: Boustead Holdings Bhd is exercising its first call option to buy back two oil palm estates totalling 3,771ha located in Tasek Glugor, Penang, and Pekan, Pahang, from Golden Crop Returns Bhd (GCRB) for at least RM110mil.

In a statement yesterday, Boustead said its subsidiaries Boustead Rimba Nilai Sdn Bhd and Boustead Eldred Sdn Bhd had served a notice of exercise pursuant to the call option agreement entered into by Boustead with GCRB in November 2005.

The two estates were part of a sale and leaseback agreement between Boustead and GCRB in which the former had sold and subsequently leased back the estates for up to three, five and seven years. The exercise was to facilitate the securitisation transaction involving the issuance of RM442mil Sukuk al-Ijarah by GCRB and an RM300mil Musyarakah facility obtained from Lembaga Tabung Angkatan Tentera.

Boustead said it would accept the sale of the plantation assets from GCRB upon payment of the aggregate exercise price of no less than RM110mil on or before Oct 22 as well as the servicing agent's fee.

It added that after completion of the proposed exercise of first call option, the company might explore the possibility of disposing the plantation assets to Al-Hadharah Boustead Real Estate Investment Trust (Reit).

“Further information on this matter shall be announced once the terms of the transaction, if any, are finalised,” Boustead said.

In a separate announcement, the manager of Al-Hadharah Boustead Reit said the fund would consider the acquisition of the estates if such an opportunity arose.

The Al-Hadharah Boustead Reit announced that in its maiden year, it registered a net profit of RM49.8mil.

To improve the performance of the fund, chairman of Boustead REIT Managers Sdn Bhd Tan Sri Lodin Wok Kamaruddin said in a statement a combination of strategies - existing plantations to be managed for maximum returns and selected plantation assets will be acquired - would be adopted.

By The Star