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Wednesday, February 27, 2008

Metro Kajang plans two new projects for 2008

An artist's impression of the Sentosa Villas link houses

KAJANG: Metro Kajang Holdings Bhd (Metro Kajang) will launch two new projects by the end of 2008, one in Desa Melawati in Kuala Lumpur and the other in Kajang’s town centre.

Chong Yong Han, group senior general manager of the Metro Kajang Group, told theSun that the Desa Melawati project would comprise 500 units of serviced apartments with a gross development value (GDV) of RM120 million. According to him, the medium high-end project would take up 2.6 freehold acres located opposite Tunku Abdul Rahman College.

“The larger units would be approximately 1,000 sq ft while the smaller units would be 800 sq ft. There will also be studio units sized at 700 sq ft,” said Chong after the company’s AGM yesterday.

Complete with full apartment facilities, the units are priced at RM250 psf and above. Due to its location, Chong expects the buyers to comprise investors as well as the people who work at the institutions nearby, which include an Islamic university located in the vicinity.

“We will also be launching commercial shoplots in Kajang’s town centre. There will be 20 units of 3-storey and 6-storey shoplots located next to the existing wet market, close to Metro Point,” said Chong. He added that the approvals for the RM40-million project are already being processed.

To be launched in two weeks’ time is Phase 1B of Sentosa Villas in Kajang, comprising terraced homes sized between 20ft by 65ft and 20ft by 80ft with an average price of RM340,000. “The show house has just been completed and we’re doing the interior designing now,” said Chong.

The entire development, which includes Phase 1A of semidees and bungalows as well as shoplots named Serba Sentosa, is approximately 30% taken up.

Meanwhile, its 700-acre ongoing township development, the freehold Bandar Teknologi Kajang, will see the launch of a new phase comprising bungalows and semidees in nine months’ time.
“The bungalows would be 6,000 sq ft and above, while the semidees would be 3,200 sq ft and above,” Chong said. Prices have yet to be confirmed.

He added that Metro Kajang’s latest commercial development, Wang Commerz@Pelangi Semenyih, has been more than 70% sold and the hypermarket Tesco is scheduled to move in at the end of 2008. The freehold project was launched last month and has a GDV of RM33 million.

The group, which has a presence in Kuala Lumpur, Petaling Jaya, Kajang and Semenyih, currently has 400 acres of undeveloped land to occupy them for another five years. Property development, which constitutes its core business, contributes 70% to the group’s profit. For the financial year ended Sept 30, 2007, the Group recorded a 21% increase in profit after tax to RM60.82 million from RM50.40 million in the preceding year.

By theSun (by Yeong Ee-Wah)

Melati Ehsan seeks to expand its property development

KUALA LUMPUR: Melati Ehsan Holdings Bhd, with construction as its core business and main revenue contributor, is expanding its earnings base to include more property development.

“The value in hand currently, for property, is RM500 million, whereas for our construction division, the current value is RM900 million. Our property development will continue to contribute 30% towards our group revenue for the next two years,” Melati Ehsan’s independent non-executive chairman Datuk Dr Ku Abd Rahman Ku Ismail.

Listed last March on the Main Board, Melati Ehsan is set to commence the development of its sole plot of land in Pandamaran, Klang in two months. The almost 100-acre tract was purchased for RM32 million, or approximately RM7.40 per sq ft.

“Our project in Pandamaran is scheduled for completion in five years, with a gross development value of RM500 million. This will provide us with a continuous source of income,” Melati Ehsan’s managing director Datuk Yap Suan Chee told reporters after its AGM yesterday. He added it is the last plot of land left in Pandamaran.

The gated development is adjacent to Bukit Tinggi and would consist of medium range residential and commercial units, with estimated selling prices from RM200,000 to RM350,000. The 2-storey link houses will have built-ups of 2,000 sq ft onwards while the commercial development will comprise 2- to 3-storey shop offices.

The developer is also currently looking for a parcel of land to build a hypermarket on. According to Yap, they are currently in talks with a few hypermarket operators but declined to disclose any further information.

“We are still sourcing for suitable land in prime areas. We prefer the Klang Valley – it is all about price and location,” Yap said when asked if there are plans to add to its landbank.

Melati Ehsan is currently developing the 300-acre Taman Ehsan Jaya, located within the Iskandar Development Region in Johor. It is currently 50% finished and set for completion within three years.

By theSun (by Rosalynn Poh)

IOI Properties to raise RM932m

PROPERTY developer IOI Properties Bhd plans to raise up to RM932 million from a rights issue to part-fund its projects in Singapore.

It will also use part of the money to refinance existing debt, it said in a statement to Bursa Malaysia yesterday.

IOI Properties has total debt of RM225 million.

In January, the company, a unit of IOI Corp Bhd, won a bid with its partner to buy land on the resort island of Sentosa, Singapore, for S$1.097 billion (RM2.5 billion).

This followed its first successful bid in March last year. Then, it won a tender to buy land on the island for RM1.1 billion.

"IOI Corp, being the controlling shareholder of IOI Properties, will give its irrevocable and unconditional written undertakings to subscribe in full for its entitlement," IOI Properties said.

IOI Corp holds 71.15 per cent of IOI Properties as at February 15, 2008.

Before the rights issue, IOI Properties will split its shares into two, to boost trading in the stock as it becomes more affordable.

As at February 15 2008, IOI Properties has a paid-up capital of RM333.52 million comprising the same number of shares. After the split, the number of shares will double to 667 million.

Then, it will offer investors one new rights share for every four existing shares held after the split. The rights are priced at RM5.50 apiece.

Shares of IOI Properties closed at RM12.70 yesterday down 40 sen from Monday's close.

By New Straits Times

Gamuda mulls share buyback as market value plummets

GAMUDA Bhd, the country's second biggest builder, may buy its own shares after the company lost nearly RM2.6 billion in market value over the past six trading days.

"We are weighing our options," a Gamuda official said in a telephone conversation recently.

Gamuda has not started buying back its shares, it said in an e-mail reply to Business Times.

Last year, Gamuda's shareholders approved a share buyback plan. It could buy up to a tenth of its shares or spend not more than its retained profits.

As at August 2006, Gamuda had retained profits of RM1.15 billion.

Gamuda closed 20 sen higher at RM3.80 yesterday after DBS Vickers changed its recommendation on the stock to "buy" from "hold".

But DBS Vickers slashed its share price target from RM5 to RM4.50.

However, the single largest shareholder continued to buy more shares.

FMR LLC & Fidelity International Ltd yesterday said it bought 40,300 Gamuda shares last week, bringing its shareholding to 11.87 per cent.

The builder has been under siege since last week, after its group managing director for the past 26 years, revealed last week that he is no longer a substantial shareholder.

Datuk Lin Yun Ling sold 70 million Gamuda shares, paring his stake in the company to 1.73 per cent from 5.23 per cent before.

Following the sale, JPMorgan which said in a report that Gamuda is "a ship without rudders", cut its share price target to RM3.3O, branding it "a top stock to avoid in 2008".

By New Straits Times (by Francis Fernandez)

Gamuda’s Lin staying on

MD assures fund managers he'll lead for at least five more years

PETALING JAYA: Gamuda Bhd managing director Datuk Lin Yun Ling has given foreign fund managers an assurance that he will stay on to lead the construction group he founded for at least five more years.

StarBiz understands that Lin spoke to foreign institutional investors via teleconference on Monday and told them that his move in selling his stake was not a signal that he was exiting Gamuda.

Datuk Lin Yun Ling

He also told them that the fact that he was still heading Gamuda after trimming his equity interest in the company in April 2002 demonstrated his intention to remain in his post.

StarBiz also learned that Lin had admitted that he expected the flow of construction jobs to slow down in the near future.

Gamuda, he said, would still be able to replenish its order book, currently at a record RM11bil, but the jobs secured were unlikely to be as big as those in hand now.

The group’s earnings might not have peaked although the value of its order book might already have, he told the foreign investors.

The session was prompted by the sharp fall in Gamuda’s share price last Thursday when Lin sold 70 million shares, cutting his stake to 1.7% from 5.2%, for “estate planning purposes.”

Gamuda rebounded yesterday with a 20 sen gain to RM3.86 as the day’s most actively traded counter, on volume of 41.6 million shares.

A head of research said the heavy selldown on the construction blue chip was mainly due to the lack of details on the rationale behind Lin’s move.

“The market was left guessing what could possibly be the worst case scenario for an insider to sell the stake.

“Lin could have been more transparent on the share disposal,” he added.

Some institutional investors were upset that the group had been feeding analysts with positive news on Gamuda’s earnings prospects, which had helped push up its share price following their “buy” or “overweight” recommendations.

The stock price skidded when the market was abuzz with speculation over all the possible adverse circumstances that could affect Gamuda, one of which was that the construction industry had reached the end of the upcycle.

The group, it was felt, may experience margin squeeze given the rising price of building material costs and that being a non-bumiputra construction company, Gamuda may also face a tougher operating environment in terms of benefiting from the Government’s pump priming measures.

However, this is not the first time Lin has made such an unexpected move.

When he sold a 1.4% stake in the open market in April 2002, Gamuda’s share price nose-dived, wiping out about RM330mil in market value.

Gamuda’s order book had also swelled to a record RM3bil at that time.

In 2000, Lin took shareholders by surprise when he bought a 44% stake in polymer lithium ion rechargeable batteries maker Dyna Plastic Sdn Bhd for RM68mil cash.

Lin defended the purchase, saying that it was to give the group a more steady earnings growth given the cyclical nature of the construction industry.

The investing community, however, did not accept news of the deal well and Gamuda’s stock price was hammered.

All these happened in less than eight years. Questions are now being asked if Gamuda still deserves the higher premium it currently enjoys on its shares.

By The Star - StarBiz (by Kathy Fong)

BLand unit buys more stake in Piccolo owner

PETALING JAYA: Berjaya Land Bhd (BLand), via subsidiary Berjaya Vacation Club Bhd (BVC), will increase its stake in Absolute Prestige Sdn Bhd to 51% from 20%. Absolute Prestige owns the Piccolo Hotel and Piccolo Galleria in Jalan Bukit Bintang, Kuala Lumpur.

BVC unit Sinar Merdu Sdn Bhd had recently acquired 20% of the company's stake from Piccolo Corp Sdn Bhd for RM6mil and the latest acquisition for RM9.3mil was from another shareholder of Absolute Prestige, Abdul Samad Ramli.

BLand said in a statement yesterday that both the acquisitions were subject to approval from the Foreign Investment Committee and other authorities.

“The acquisition represents an opportunity for the BLand group to add another 239 rooms in a boutique hotel in Kuala Lumpur's Golden Triangle to its portfolio of hotels and resorts.

“It will complement our existing investments in 12 hotel properties, located in Malaysia, Seychelles, London, Sri Lanka, Singapore and, recently, in Vietnam,” it added.

Piccolo Corp director Suzianna Wong-Svrcula will remain the chief operating officer of Absolute Prestige.

“The sale provides the opportunity for the company to tap the synergy of Berjaya Land's portfolio of 12 hotels worldwide,” Wong said.

Piccolo Hotel, which was built at a cost of RM42mil, is scheduled to open by the end of next month.

By The Star (by Angie Ng)