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Wednesday, March 19, 2008

Ireka lines up office blocks for launch

Artist's impression of Tiffani by i-Zen

KUALA LUMPUR: Aseana Properties Limited has slated two blocks of office towers for launch in downtown Mont’Kiara by year end.

The project is pending approval from the local authorities, said Ireka Development Management Sdn Bhd COO Lim Ech Chan. Ireka Development, a wholly-owned subsidiary of Ireka Corporation Bhd, is the development manager for Aseana Properties, a property investment and development company listed on the London Stock Exchange with a market capitalisation of approximately US$250 million (about RM800 million).

“The office towers are set to be a new landmark in Mont’Kiara with our hallmark i-ZEN inspired designs,” said Lim. The towers will be 28- and 16-storeys in height.

Each floor will have an average floor space of 12,000 sq ft. “We are keen on selling off the entire floors to buyers. We are also looking at interested parties to purchase the offices en-bloc,” he said.

The average price for the office towers is at RM850 psf. “We believe the property value will appreciate in time to come,” said Lim, after a signing ceremony with LG Electronics Sdn Bhd at the Tiffani by i-ZEN show gallery in Mont’Kiara yesterday.

LG will supply 2,200 units of LG ArtCool air-conditioners in a deal valued at US$4 million. The new-age, sleek-designed airconditioners will be installed in all 399 units of Tiffani by i-ZEN condominiums. Also present was T.Y. Ko, the managing director of LG Electronics Sdn Bhd.

Almost 90% of Tiffani by i-ZEN has already been sold and completion is expected by year-end. Meanwhile, Lim said the second phase of Seni Mont’Kiara is expected to be launched in June.
“The first phase of the condominium, comprising 300 units have been sold out and we are now launching the second phase comprising another300 units,” he said. The units are sized from 2,500 to 3,500 sq ft with prices ranging from RM750 psf.

Lim also disclosed that Aseana Properties has entered into a 40:60 joint venture partnership with Malaysian Resources Corporation Bhd to develop a four-star hotel in KL Sentral, details of which are expected to be annouced middle of this year.

He added that the company is also working on several development proposals in Vietnam and is expected to launch an integrated mixed development comprising offices, apartments and a hotel by year-end.

“Vietnam is a very attractive market and we are keen on working with the right joint venture partners there,” said Lim.

By theSun (by Tim Leonard)

Melati moving into property development

KUALA LUMPUR: Having made its name in the construction services industry, Melati Ehsan Holdings Bhd intends to move into property development to diversify its earnings.

“Construction services are currently the group's main contributor. However, we are always on the look-out for ways to enhance our income stream,” managing director Datuk Yap Suan Chee told StarBiz in an interview.

Datuk Yap Suan Chee

Listed on the Bursa Malaysia main board last March, Melati will be developing its sole plot of land in Pandamaran, Klang soon. The 100-acre land was purchased from Bank Negara unit, TPPT Sdn Bhd, for RM32mil cash, Yap said.

The development, which has an estimated gross development value of RM500mil, will comprise about 500 gated residential units, 320 shop lots with 8.97 acres of commercial units and 6.92 acres of industrial units.

Executive director Tan Hong Hing said apart from diversifying its income base, venturing into property development would enable the group to command higher margins.

“We will be able to reap the profit twice. The first being the developer of the project and second, for construction of the property,” he added.

Tan said Melati would continue to accumulate strategic land bank with residential and commercial property development potential.

Yap said the group was currently at the planning stage and had not started developing the land.

To a question, he said he foresaw a slight delay in the project due to the transition of power in the Selangor government but added that it would not be a major problem.

“We will be having meeting with the state government in due course,” Yap said.

Melati's construction division had been growing steadily over the years, even during the financial crisis, because of its ability to complete projects on time and within budget.

Melati's order book now stands at RM1.7bil, which will keep the company busy for three to five years. To sustain growth, it has tendered for projects amounting to over RM1bil.

“We are still aggressively bidding for more contracts and are confident of increasing our order book.

“The bulk of our projects are local, but if the opportunity arises and the projects overseas are commercially viable, we would consider them,” Yap said.

Recently, the group clinched the job for the construction of Carrefour hypermarket for Magnificent Diagraph Sdn Bhd in Kota Damansara, Selangor.

The company, which has one flood mitigation project in hand, has bid for similar jobs in Johor Baru.

On its financial performance, Yap said the company hoped to perform better in the financial year ending Aug 31.For the year ended Aug 31, 2007, Melati posted a net profit of RM27mil on turnover of RM173.4mil.

By The Star - StarBiz - (by Leong Hung Yee)

SunCity in RM380m India condo venture

PROPERTY developer Sunway City Bhd (SunCity) said a joint venture agreement has been sealed with Hyderabad-based MAK Projects Private Ltd to develop a RM380 million condominium project in Hyderabad, India.

SunCity will initially invest RM4 million to secure the project and subsequently increase it to RM17 million for a 60 per cent stake in the 5.67ha project.

The project will feature 1,500 condominium units that will be completed in several phases over the next three years.

The average size of the units is about 1,500 sq ft with an average selling price of RM208 per sq ft.

Located 8km away from the newly opened Rajiv Gandhi International Airport and 21km away from the Hyderabad city centre, Phase One of the development is targeted for launching by early 2009.

This is SunCity's second investment in India; the first being Sunway Opus Grand Residency which was signed in July 2007, another high-end condominium development on a 14.18ha located in the suburb of Ameenpur, about 15km northwest of Hyderabad.

SunCity said it is on target to launch the RM1.5 billion Sunway Opus Grand Residency next month.

SunCity also hopes to expand to other countries in the region such as China and Vietnam. Currently, it has presence in Australia, Cambodia and India.

By New Straits Times

SP Setia shares go on roller-coaster ride

SHARES of SP Setia Bhd, Malaysia's most valuable developer, went on a roller-coaster ride yesterday after the firm gave investors mixed signals on potential sales.

The company initially told analysts that it is lowering its year-end sales target by 20 per cent to RM1.5 billion from RM1.8 billion.

Based on the new guidance and other factors, analysts lowered their target price on the stock. The stock fell 3.5 per cent or 12 sen to RM3.32 in the morning session yesterday.

The company then issued a statement to Bursa Malaysia during lunch, saying it is confident to hit a year-end target of RM1.8 billion.

SP Setia shares rebounded in the afternoon, erasing all of the morning's loss to gain five per cent or 18 sen, to close at RM3.62.

The company explained that its lower target was based on a "worst case scenario". This is if local councils in Selangor and Penang, states that have new governments, are formed late.

"Given the company's October 31 year-end, a delay of one to two months would have resulted in a timing difference of sales being made in FY2009 instead of FY2008," it said.

SP Setia said sales for the first four months of fiscal 2008 have been strong.

It more than doubled to RM646 million, compared with the same period a year ago.

"In view of the recent developments pertaining to the successful transition of state governments in Penang and Selangor and the pro-business stance which have been expressed by both chief ministers in interviews published in the press yesterday and today, the company is confident that its original sales target of RM1.8 billion can still be met," SP Setia said.

Although 14 out of 23 analysts maintained their "buy" recommendation on SP Setia, most of them revised SP Setia's target price and earnings forecast downwards.

JP Morgan, CIMB and Kenanga Investment Bank reduced SP Setia's target price by as much as 36 per cent.

By New Straits Times (by Goh Thean Eu)

AP Land makes foray into Japanese real estate

PETALING JAYA: Asia Pacific Land Bhd (AP Land) is making its foray into the Japanese real estate by acquiring a piece of land in Hokkaido, measuring 3,082 sq m, for RM18.9mil to build apartments.

Based on the price, the freehold land is estimated to cost RM6,132 per sq m, it told Bursa Malaysia yesterday.

The acquisition from Caymans Island-registered Tancho Investments will enable it to broaden its income into the property development sector in Japan.

“The venture is expected to enhance not only the group’s future earnings but also its profile as a regional players in property development,” it said.

AP Land had proposed to use part of the disposal proceeds of RM680mil from the disposal of City Square Centre as well as from borowings to finance the deal.

By The Star

SP Setia expects to meet original sales target

PETALING JAYA: SP Setia Bhd is confident of achieving its original sales target of RM1.8bil for the year ending Oct 31 after it gets a clearer picture of the stance of the new state administrations in Selangor and Penang towards business.

In a statement made available to StarBiz, group chief executive officer Tan Sri Liew Kee Sin said the property developer “should not face any problems adjusting to the new administration, which stated their commitment to uphold good governance, transparency and equal opportunity”.

The statement came on the heels of a downward revision by SP Setia last week of its sales target to RM1.5bil from RM1.8bil due to worries over administrative uncertainties after the opposition took control of Selangor and Penang, where most of the group's projects are located.

Liew said the revision of the group's sales target last week was made on the assumption of a worst-case scenario in the event of a one- to two-month delay in the establishment of local councils.

“Such a delay could result in a timing difference in sales being made in FY09 instead of FY08,” he said in the statement.

Knowing the authorities' commitment to a pro-business policy, Liew said the concerns could be excessive.

“We are pleasantly surprised at the speed with which the newly established Penang and Selangor governments have gotten down to business,” he added.

SP Setia's share price rebounded sharply in the final trading hour yesterday. The stock put on 18 sen, or 5.2%, to RM3.62 after sliding to a 14-month low of RM3.12.

The property group's shares succumbed to heavy selling last week after the group cut its sales target. The drastic fall in share price from the RM5 level wiped out roughly RM1.5bil of its market capitalisation in the past one week.

The cautious macro-economic outlook due to the subprime loan crisis in the United States also weighed on the property stock.

Citi Investment Research, which has downgraded SP Setia shares to a “sell'', cited concerns over the macro economy and higher inflation risks this year, which could reduce consumers' disposable income.

“We expect private consumption (growth) to slow to 8% this year from 11.7% last year. As a result, potential buyers, especially in the mass market segment, could adopt a wait-and-see attitude,” Citi said in a research note on Monday.

Liew, however, believes that the outlook for the property sector is “positive”, adding that consumer sentiment remained “supportive of property purchases''.

He said SP Setia had recorded sales revenue of RM646mil for the first four months in FY08 compared with RM290mil in the previous corresponding period.

By The Star (by Kathy Fong)