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Thursday, February 21, 2008

Rawang on the rise

PETALING JAYA: Affordability and an increasing number of job opportunities in Rawang are drawing more people to stay there, says GuocoLand (M) Bhd chief operating officer John Lou.
The developer has a joint-venture project with Hong Bee Land Sdn Bhd in the area called Emerald Rawang (pix), which comprises terraces, semi-dees, bungalows, and low-cost apartments.

“People are moving there to avoid traffic congestion in the city, while new factories in the vicinity benefit those looking to work in the area. Unlike the Klang Valley, where land is becoming scarce, there is still land available in Rawang suitable for township developments,” he said.

He said properties in Rawang are priced lower compared to other prime areas, due to its location, which is further from the city centre. “However, good infrastructure has created better links to the other parts of the Klang Valley,” he told theSun. It has easy access to Kuala Lumpur and Damansara via the North South Highway and is connected to Selayang and Batu Caves via the Middle Ring Road 2. Within Rawang itself, future accessibility and infrastructure projects include the new Rawang bus terminal scheduled for completion in June and the Rawang bypass, which will divert traffic from the town centre, expected to be ready by end of this year.

First Serendah Real Estate principal Avtar Singh believes current buyers in Rawang are obtaining property at a fair value. “Those that purchased property there 10 to 12 years ago would have seen values increasing by some 30% to 40%,” he said.

However, he added that properties bought eight to 10 years ago have yet to see significant capital appreciation.

Although there is an influx of people into the area, he feels there is no strong existing rental market. “Property rentals are still not popular in Rawang and are limited only to expatriates and those temporarily posted there,” he said. According to him, rental rates for a 2-storey bungalow in Rawang range between RM1,500 and RM2,500 a month.

He added that developments such as the gated Emerald Rawang are “a breath of fresh air” for Rawang with its innovatively designed products and the introduction of the built-then-sell concept.

The price of bungalows in the 1,029- acre freehold Emerald Rawang range from RM900,000 to RM1.6 million, with built-ups of 2,482 sq ft to 5,863 sq ft, whereas the terraces, priced from RM150,000 to RM432,000, have built-ups of between 1,472 sq ft and 1,780 sq ft. GuocoLand’s Lou said the price of the bungalows and link houses have gone up by 38% and 50% respectively since they were first launched in 2001.

By theSun (by Yap Yew Jin)

Hunza Prop sets sights on foreigners

HUNZA Properties Bhd (Hunza) plans to launch a high-end residential project on Penang island in 2010 to capture demand from foreign buyers.

The new project, codenamed "Alila 2", is sited on a 4ha plot in Tanjung Bungah. It will be promoted to buyers in Europe, Hong Kong, South Korea, Indonesia and Singapore.

Hunza executive chairman Datuk Khor Teng Tong yesterday said the project, which is expected to carry a development value of between RM230 million and RM280 million, will be located next to its current "Alila" tropical-garden development.

It will be carried out with joint-venture partner Nilai Ariff Sdn Bhd.

"We want to continue with our strategy of tapping the strong international demand for iconic properties," he told a media briefing in Penang.

Alila 2 will comprise a mix of landed properties and condominiums and is likely to be more expensive than the existing project which is almost sold out.

It will also offer value-added services like concierge and limousines as part of the project.

Hunza's undeveloped landbank in Penang currently totals 200ha in Bertam in Seberang Prai.

"We are looking to expand our landbank in the Klang Valley now that our Mutiara Seputeh project is almost sold out. We want to continue maintaining our presence there," Khor said.

Hunza is likely to announce a land acquisition in the Klang Valley soon, he added.

By New Straits Times (by Marina Emmanuel)

Retail round-up

Industry pundits expect 2008 to be a good year for the retail industry in Asia despite the possible slowdown in the US economy

THE Year of the Rat is expected to be an optimistic one for Asia’s retail market, with expansion activities being a main growth driver. Based on retail consultants Jones Lang LaSalle’s fourth annual Retailer Sentiment Survey released last month, three key factors are behind the anticipated double-digit retail growth – consumer spending, the economic climate and tourism.
While India and Greater China are among the most bullish in the region, 76% of the 150 retailers from various trades in eight key Asian markets polled anticipated higher growth turnover in 2008.

Jones Lang LaSalle Asia Pacific head of research Dr Jane Murray said in the report that 2007 had been a bumper year for retailers in Asia. According to Murray, continued strong, real-income growth has buoyed consumption levels and purchasing power. Murray feels Asia has emerged relatively unscathed from the credit crunch; markets in the region continue to be attractive to investors, developers and retailers.

Meanwhile, retail sales in Hong Kong also rose 19.3% in December last year following an improved labour market and lower interest rates, which encouraged consumers to spend more on food, clothes and electronics. A Bloomberg report last month quoted MasterCard Inc estimating that Hong Kong’s retail sales may grow 10.5% in the first half of this year from a year earlier after gaining 8% in all of 2007.

However, there seems to be mixed sentiment on home ground. MasterCard Worldwide expects retail sales to rise by 6.7% year-on-year in the first half of 2008, to RM40.5 billion on the back of strong consumer confidence. According to its Master-Index of Retail forecast released recently, increased attention by the government on infrastructure and development reforms would aid economic activity although Malaysia’s real gross domestic product growth would slow to 4.8% this year.

Local consultant, Retail Group Malaysia Sdn Bhd however is not so optimistic. The company, which tabulates quarterly retail data for the Malaysian Retailers Association cut its sales growth projection to 7% from 8% earlier. This cut could result in total sales for the year coming in at RM68 billion, a RM610 million shortfall. The reasons for this include higher living costs and stagnant salaries that are weighing down consumer confidence. Retail Group Malaysia’s managing director Tan Hai Hsin feels retailers are preparing for slower consumer spending this year as they are concerned about Malaysia’s rising cost of living more so than a slowdown in US economy.

Business as usual
However, despite the threats of inflation, the retail scene continues to look exciting for shoppers who are spoilt for choice when it comes to shopping destinations in the Klang Valley. The opening of two new malls, The Gardens Galleria and Pavilion Kuala Lumpur coupled with the extension of Sunway Pyramid last year, saw new international brands such as Massimo Dutti, Ted Baker and GAP, being introduced. Tan, who is also managing director of Henry Butcher Retail observed large shopping crowds during the festive period at the end of last year.

“While consumers remain cautious in spending following expectations of price increases in petrol prices, the shopping managers went all out to attract shoppers and big boys like Pavilion Kuala Lumpur, Suria KLCC, 1 Utama and the Curve also organised regular promotional activities at their main concourses,” Tan told PropertyPlus.

However, Tan cautions that there are not enough shoppers and purchasing power to cope with the increasing shopping centre supply in the Klang Valley. Some shopping centers are going to
be forced to close down due to poor occupancy and low visitation in the near future, he said.

According to the Ministry of Finance’s Valuation and Property Services department latest report in 3Q2007, total retail space within shopping centers stood at 66,887,886.55 sq ft nationwide housed in 353 shopping centers, of which, about 77.1% is occupied. Not surprisingly, Kuala Lumpur leads in market share at 23.4% (50 shopping complexes with 15,619,457 sq ft retail space and 81.9% occupancy), followed closely by Selangor (19.2% or 40 shopping complexes with 12,837,449 sq ft retail space and 86.8% occupancy), Johor (13.8%) and Pulau Pinang (13.0%).

A check with some shopping malls revealed that visitation and sales results last year improved compared to 2006. Take the example of 1 Utama – thanks to its constant reinvention and finetuning of offerings and presentation to entice discerning shoppers, approximately 25 million shoppers visited the mall last year.

Shopping centre director of 1 Utama, Datuk Teo Chiang Kok said, “We follow trends closely and strive to introduce new and exciting facilities in line with shoppers’ experiences and expectations that are always changing. In fact, our 2007 year-end sales results improved on average by 15% against the previous year.”

Teo: We follow trends closely

Meanwhile, Sunway Pyramid Sdn Bhd senior general manager HC Chan expects the newly extended mall to see it gather full momentum within the next six to 12 months. “With a total of 1.7 million sq ft of net lettable area, we are enjoying 98% occupancy and visitation levels have doubled, with 2.5 million visitors monthly,” he said.

Centre manager of the Curve, Adele D Flores said that a majority of its fashion and food-andbeverage tenants achieved their sales target for the year, resulting in a direct positive impact on the mall. “One of our key efforts was a branding exercise for Mutiara Damansara, which integrates the Curve, Cineleisure, Ikea/Ikano and Tesco as a one-stop destination for shoppers. Our visitorship increased by 30% last year compared to 2006,” said Flores.

Despite being in business only since the fourth quarter of last year, Pavilion Kuala Lumpur experienced monthly visitation of between 65,000 and 70,000 people. Leasing and marketing director for Pavilion Kuala Lumpur Sdn Bhd, Joyce Yap, also said that December was a successful month for the mall.

Yap: We did well in the festive period

“We did quite well during the festive period and business was three times that of October and November. From the feedback gathered from our tenants, the number of tourist visitors at their outlets in Pavilion is higher,” added Yap.

Competitive marketplace
Pavilion’s Yap, who is also president of the Association for Shopping Complex and High-rise Management (PPK), feels that the existing malls are not competing for the same retail pie and that only 10% to 15% of the market is cannibalised.

“Competition is good for the industry because it will see an increase in investment by the mall managers to step up promotional efforts and fit-outs,” she added.

PPK vice-president MK Foong concurs, believing that competition is a method to gauge a mall’s strengths and capabilities, and to keep on improving itself.

Foong: Competition is a method to gauge strength

Foong, who is also Sungei Wang Sdn Bhd’s general manager, said, “Despite the emergence of new players, Sungei Wang continues to retain its identity, strengthen its retail and promotional activities. We also generate continual publicity in the relevant media, introduce new concepts/floors to attract shoppers.”

Another player that places emphasis on advertising and promotion is Mid Valley Megamall, which spends in excess of RM5 million annually, said Mid Valley City Sdn Bhd executive director Daniel Yong.

“We aim to provide valueadded services and create a feelgood factor for our customers. Despite the new competition, our key indicators such as visitation and spend have continued to grow. In fact, our sales growth for 2007 was met and in many cases, exceeded expectations,” Yong added.

However, Sunway Pyramid’s Chan, who is also PPK vicepresident, expects mall players to experience a competitive squeeze on margins and market share as a result of the opening of the new malls.

“With approximately four million sq ft of retail space created by these new malls, there is an oversupply of mall retail space and the market size is not increasing as fast as the supply,” he explained.

Henry Butcher’s Tan agrees with Chan, saying that it is a survival of the fittest with such intense competition in the marketplace.

“This dilution has been happening since 2004 where newer and larger malls have been facing problems filling up space and bringing in shoppers,” said Tan.

While no major retail space with over one million sq ft of net floor area is expected this year, there are still many shopping centres being planned, said Tan.

Tan: Dilution has been happening since 2004

“Major ones that have yet to be opened in the Klang Valley include Suria KLCC phase two, Vision City, Plaza Rakyat, Bukit Bintang City Centre [Pudu Jail], KL Sentral’s Lot G, Bangsar Shopping Centre phase three, Subang Parade phase two, Harbour Place and Tropicana Mall.”

VMY 2007
Following the government’s extension of the Visit Malaysia Year 2007 campaign by an additional eight months in conjunction with the country’s 50th year of independence, the retail boys are not resting on their laurels.

Ongoing efforts are being made to up the ante in efforts to get a slice of the Tourism Ministry’s targeted tourist revenue pie worth some RM50 billion this year against the RM44.5 billion set last year.

PPK’s Yap believes there must be a concerted effort between the government and the private sector to promote the country as a shopping destination. “The latest malls have caused some excitement on the local retail scene and certainly increased our standards to compete on the foreign front,” she said.

Foreseeing the market to be a competitive one, both locally and internationally, Yap said that Malaysia remains known as a shopping holiday destination.

“With no limit to the potential revenue from tourists and shopping, our neighbours are also competing for shopping dollars. For instance, Singapore’s new attractions are F1 and casinos, Thailand has huge malls with breadth and depth like Siam Paragon, and malls in Indonesia are catching up in size,” she said.

According to 1 Utama’s Teo, the retail scene in Malaysia still trails countries like Hong Kong, Singapore and Bangkok where shopping accounts for some 60% of tourist spending, while Malaysia only recorded 25%.

By theSun - PropertyPlus (by Loo Pik Kwan)

Malaysia set to be world’s halal industry centre

PETALING JAYA: Limitless LLC, the global master development arm of Dubai World, has secured its second project in Malaysia: a 1,115 ha mixed-use development that is set to be the world’s first fully integrated halal centre.

Limitless said in a statement yesterday that the Malaysia International Halal Park (Mihap), a 80-20 joint venture between Limitless and a Malaysian investment company comprising Mihap Holdings and Perbadanan Kemajuan Pertanian Selangor, will turn Malaysia into a global gateway for the industry’s trading, services and knowledge.

Mihap will be located between Kuala Lumpur International Airport and Port Klang. The project will include more than 800 ha of residential units. There will also be food-manufacturing plants of international standard, logistics ports, and training and research centres, as well as offices, entertainment and retail facilities, all of which will comply with halal principles. A significant proportion of the master plan is dedicated to open spaces, with more than 170 ha of parks and water features.

Limitless CEO Saeed Ahmed Saeed said: “It is an honour for Limitless to be playing such a key role in establishing Malaysia as the world’s centre of excellence for the halal industry.” Construction of Mihap is due to begin towards to the end of 2008, with phased completion over eight years.

By theSun