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Wednesday, March 5, 2008

LBI moves far beyond manufacturing

An artist's impression of Le Putra Avenue

Manufacturer cum developer LBI Capital Bhd (LBI) expects to see a steady growth in its property development activities. Last December, the company signed a joint-venture agreement with Seribu Baiduri Sdn Bhd and Intelstyle Sdn Bhd to develop 25 detached factories in Puchong Perdana. LBI's managing director Datuk Jeffrey Ng Chin Heng (pix) told theSun that the company is expecting a gross development value (GDV) of RM80 million from the project sited on 36 acres of industrial land.

“We are still in the initial stages of planning and aim to commence the project by the end of the year,” he said.

Established in 1978 as Len Brothers Industries Sdn Bhd, LBI started out in the manufacturing of moulded-rubber products. Since then, the company has undergone several changes in terms of company name and ownership. It decided to venture into property development in 2000.

Currently, its property division contributes 95% to the group’s revenue.

“It was a natural transition for us to get involved in property development, as through our affiliated companies and some personal investments, we have over 20 years of experience in property – mainly pocket-size developments,” said Ng said. The company’s current projects include commercial and residential developments in Seri Kembangan, Sri Gombank and Johor Baru. Its completed projects include the fully-sold commercial project in Ara Damansara called Taipan Damansara II, which spans 17 acres and has a GDV of RM214 million.

On the Seri Kembangan project called Le Putra Avenue, Ng said it has seen a take-up rate of over 30% since the launch in October last year.

Le Putra Avenue offers first-of-its-kind zerolot bungalows within Bandar Putra Permai, in Seri Kembangan. The 9.2-acre leasehold development comprises 65 units of bungalows -- 31 units of 2-storey bungalows with builtups of 3,500sq ft, 26 units of 2½-storey bungalows with builtups of 4,000sq ft and eight bungalows with built-ups of 4,500sq ft. Prices start from RM700,000 and RM1 million onwards for the 2-storey bungalows and 2½-storey bungalows respectively. The project has a GDV of RM48 million.

Meanwhile, LBI’s project in Sri Gombak, called Pinggiran Permata, is 96% sold. Launched last November, It comprises 73 units of 2-storey terraced and semi-detached houses with average prices of RM350,000 and RM498,000 respectively. It has a GDV of RM23 million.

On its Johor project, Ng said the company has only seen a takeup rate of 10% for the 25 shops launched in January last year in the 13.7-acre freehold, mixed development in Taman Bukit Mewah.

LBI is planning to launch terraced houses and semi-dees this month once the show unit is ready, said Ng. The project has a GDV of RM54 million.

“It is slightly different in Johor compared to the Klang Valley. As we are developers from Selangor, Johorians tend to wait and see – they prefer to monitor the progress until the development is 50% to 60% complete before they make a commitment. They are cautious, as they might have been ‘burnt’ before,” Ng said.

In terms of undeveloped bank for future projects, Ng said LBI had none.

“Our views are rather conservative - we only acquire land for immediate development and it is not our policy to buy land and keep it. Our capital does not allow us to do so, not at this moment,” he said.

He declined to further reveal LBI's interest in some high-end projects in KL but did not deny the possibility of some strata projects in prime areas. Ng said the company is constantly looking out for jointventure partners but so far, nothing has materialised yet.

As to whether the company would dispose of its manufacturing arm, LBR Industries Sdn Bhd, Ng said it would keep the business going for now. “It’s an uphill tussle for manufacturing in Malaysia, with high labour costs and the inability to turn around but for now, we will maintain our manufacturing base – unless someone makes us a really good offer”, he said.

On overseas ventures, he said LBI has received offers to venture into Dubai. “But we must first see if we can afford to do so. We have been lucky so far – with good responses for our projects and being able to pay out dividends since 2004. We are moving on a slow and steady pace,” he added.

At the moment, Ng said LBI would be focusing mainly on property within the Klang Valley, but is open to considering other locations including Penang and Sabah, for either high-end or midrange developments.

By theSun (by Rosalynn Poh)

UEM Land targets foreign property buyers

NUSAJAYA: UEM Land Sdn Bhd is eyeing international buyers for its high-end residential properties in Nusajaya city within the Iskandar Development Region (IDR).

Managing director Wan Abdullah Wan Ibrahim said apart from Singaporeans and expatriates based in the republic, it was also targeting European and Middle Eastern buyers.

He said the latter group would be courted under the Malaysia My Second Home programme due to the strong euro and petrodollar.

From left: Nusajaya state assemblyman Datuk Abdul Aziz Sapian, Datuk Ikmal Hijaz Hashim, Datuk Ahmad Pardas Senin and Wan Abdullah Wan Ibrahim looking at a model of East Ledang.

“We will be taking part in property shows in Singapore next month and Dubai in October to promote our products in Nusajaya,” Wan Abdullah told StarBiz at the launch of East Ledang on Saturday.

He said the company might engage an international agent to market East Ledang and Puteri Harbour Waterfront Development in Europe and the Middle East.

Also present were Iskandar Development Region Authority chief executive officer Datuk Ikmal Hijaz Hashim and UEM World Bhd group managing director Datuk Ahmad Pardas Senin.

Wan Abdullah said East Ledang was the first resort residential to be developed in south Johor within the IDR.

Phase one comprised 139 link duplexes priced at RM500,000 and twin villas from RM850,000 per unit which would be completed by mid-2009.

Upon completion in five to seven years, the project covering 111.28ha freehold land would have 861 high-end residential units.

Wan Abdullah expected Singaporeans and expatriates working in the republic would be interested in East Ledang based on their response to the Horizon Hills project.

Horizon Hills is a 50:50 joint venture between UEM Land and Gamuda Land Sdn Bhd (a unit of Gamuda Bhd).

“It is timely for Johor to have quality and well-planned residential properties to attract more international buyers,” said Wan Abdullah.

By The Star (by Zazali Musa)

Johor developers seek incentives

PETALING JAYA: Property developers in Johor, want the incentives given to foreign investors to be extended to local developers who want to be more involved in the development of the Iskandar Development Region (IDR), says Real Estate and Housing Developers’ Association (Rehda) Johor branch chairman Steven Shum.

“These incentive packages, including the tax exemptions as well as the waiving of the bumiputera quota, will certainly benefit us. Not only will it enable local developers to help grow the state economy, we will also be able to bring development standards to the next level,” he told theSun.

Although investments seem to be pouring in and the infrastructure works on the 2,217 sq km IDR, have commenced, Shum feels the overall development of the IDR is “slow”.

“The infrastructure work is being done in bits and pieces... not integrated and there is no clear picture when the IDR will actually kick off,” he said.

It has been reported the economic corridor in the southern part of Johor, has attracted foreign direct investments as well as domestic investments amounting to some RM22 billion. This does not include the RM6.5 billion that has been allocated for the project under the Ninth Malaysia Plan.

By 2010, the objective of IDR is to achieve investments totalling RM47 billion and economic growth of 8%. Apart from the countries from the Middle East, targeted investors include those from Singapore, China, India and Indonesia.

“We are planning dialogue sessions with the state government about our intentions to get more involved with the development of the IDR,” said Shum, adding that developers in the state have only had one or two dialogue sessions with the IDR authorities since the launch of the project in 2006.

By theSun (by Loo Pik Kwan)

Emkay plans property trust

The Emkay Group of companies, which is controlled by Tan Sri Mustapha Kamal Abu Bakar, plans to set up a property trust.

Mustapha is the chairman and dominant stakeholder of MK Land Holdings Bhd, a publicly-traded property developer listed on the main board of Bursa Malaysia.

He holds a 48.7 per cent stake in MK Land via privately-held MKN Holdings Sdn Bhd. MKN in turn is one of Emkay's many subsidiaries.

Emkay chief operating officer Peter Teh Heng Poh said that one of the properties that could feature in the real estate investment trust (REIT) is the RM100 million Bangunan Mustapha Kamal in Cyberjaya.

The property is due to receive its certificate of fitness this month.

"We are looking at at least six per cent growth and are in the midst of negotiations right now, working out details such as REIT value and appointing the arranging merchant bank.

"We also need to first welcome all our tenants before we launch the REIT," Teh told Business Times and Berita Harian at the company's headquarters in Selangor.

Bangunan Mustapha Kamal sits on 1.2ha freehold enterprise land and is purpose-built to be leased out to local and foreign information technology (IT) companies.

The four-storey office building has a built-up of 121,500 sq ft.

Teh said the REIT is part of Emkay's long-term strategy. The company also has more buildings in the pipeline.

Emkay is also in the midst of building the RM350 million MKN Embassy Techzone in Cyberjaya, the RM300 million NeoCyberjaya mixed development and the RM411 million NeoDamansara in Petaling Jaya.

By New Straits Times (by Zaidi Isham Ismail)

Jeffrey Ng joins SunCity as exec director

PETALING JAYA: Datuk Jeffrey Ng, the immediate past president of the Real Estate and Housing Developers Association (Rehda), has joined the board of Sunway City Bhd (SunCity) as an executive director, effective Monday.

Ng, 51, was managing director of Asia Pacific Land Bhd from 1994 to 2006.

Datuk Jeffrey Ng

On his appointment, Ng said he looked forward to contribute positively to SunCity’s further achievements as a major property player in the country.

“With its strong financial credentials now and its resilience in facing the market cycles in the past 20 years, it is certainly a very good company to be associated with.

“Going forward, there are many exciting plans lined up for the company and I look forward to partaking in and adding value to these plans,” he said.

Ng, who holds a Bachelor of Economics degree from University of Monash in Melbourne, is a member of The Institute of Chartered Accountants Australia, Malaysian Institute of Accountants and Malaysian Institute of Certified Public Accountants.

He has more than 26 years’ experience in finance, corporate planning and executive management in the property and hotel industry in Malaysia and Singapore.

Ng was also the immediate past chairman of Rehda Wilayah Persekutuan (KL) branch and vice-chairman of Malaysia Australia Business Council.

By The Star (by Angie Ng)

Triple thrust for Cisco

SMART CITY: An artist impression of the financial and commercial centre in Danga Bay, IDR in south Johor. Cisco says it has been in talks with all the major developers involved in the IDR

Networking solutions company Cisco Systems said that its local growth for this year would be driven by the Government, real estate and small-and-medium business segments.

Cisco Malaysia managing director Kumaran Singaram said that the Government would continue to provide growth opportunities for Cisco.

According to Kumaran, Cisco has been working with both Federal and state government agencies to discover ways in which ICT can be used to achieve the objectives outlined in the Ninth Malaysia Plan. Key areas include supporting connected Government initiatives.

He said Cisco has technology solutions that are designed specifically to increase productivity and efficiency of the public sector, enhance public safety and drive change in the country’s infrastructure. Cisco’s Connected Healthcare solutions, for example, can be used to enhance the nation’s medical grid network.

“The medical grid network is something we’ve been lobbying the Government to do for the past year. It has many practical uses. For instance, X-rays from one hospital to another don’t need to be carried, if the information sits on a network,” he explained.

Presently, Cisco claims that patient information is scattered across disparate systems in public and private healthcare entities, which makes it difficult and costly for healthcare professionals to share vital medical, clinical, and patient information.

“However, to link up all the hospitals would take a few years as each state has a general hospital and there are about 130 district hospitals nationwide,” he said.

The real estate sector is another key focus area for Cisco.

Cisco feels that with Internet Protocol (IP) being implemented as the fourth utility – after electricity, gas and water – real estate developers in Malaysia are ready to move from a business model based solely on physical space to one that is based on the provision of services.

IDR connection
“In the past year, we have seen a lot of investment in smart city developments such as the Iskandar Development Region (IDR), Northern Corridor Economic Region and the East Coast Economic Region. Successful cities of the future consider the network as another basic infrastructure that has to be designed into the plans from the beginning,” Kumaran said.

“The various elements of utilities, commercial buildings, residential, public spaces, hotels and retail need to be connected to enable improved collaboration, security, management, mobility and productivity,” he added.

Kumaran claims that Cisco has been in talks with all the major developers involved in the IDR. “Most of them have shown interest in creating smart cities,” he said, adding that he could not reveal any names.

The third focus area for Cisco is the SMB sector and this is based on their contribution to national gross domestic product (GDP). In countries like South Korea, Taiwan and Japan, SMBs account for up to 75% of the GDP.

In Malaysia, SMBs contributed 35% to the nation’s GDP in 2006 and are expected to make an increased contribution of 37% to the national GDP by 2010.

By The Star (by Steven Patrick)