Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Monday, April 21, 2008

Big show by Johor builders at Singapore expo

An artist’s impression of the Asia Pacific Trade and Exhibition City

The Cityscape Asia 2008 held at the Suntec City convention centre in Singapore saw the “big boys” in Johor making their presence felt at the international property investment and development exhibition from April 15 to 17.

They included the 1,840-acre Danga Bay integrated waterfront project, Mulpha's 1,765-acre Leisure Farm Resort, Bandar Raya Developments Bhd's 1,400-acre Permas Jaya, Country View Group's 1,100-acre Taman Universiti and UEM Land's Bandar Nusajaya, the key driver of Iskandar Malaysia.

SP Setia, with several successful projects in Johor, was also there to exhibit among others, its latest project, the Setia EcoCity, the premier commercial and business hub in Bandar Nusajaya, the gateway into Iskandar Malaysia.

They all took up large booths.

However, a new development that stole the show was Malaysia Pacific Corp Bhd's (MPC) Lakehill Resort City near Pasir Gudang in Iskandar Malaysia.

Many curious visitors, including foreigners, were seen crowding around the large model of Lakehill Resort City.

MPC staff had their hands full briefing the visitors on this 484-acre resort township, which is part of MPC's 905-acre freehold Nusa Damai, at the eastern zone of Iskandar Malaysia – a 2,217 sq km special economic zone covering the logistic triangle of Senai Airport (north), Tanjung Pelepas Port (south west) and Johor Port in Pasir Gudang (south east).

Developed by Lakehill Resort Development Sdn Bhd, an MPC subsidiary, it will take about eight years to complete and will have a gross development value of about RM6bil.

What sets this project apart from the rest is that instead of merely selling houses, MPC is trying to make Lakehill Resort City a trading, distribution, entertainment, shopping and tourism hub that would bring in lots of investors to Iskandar Malaysia and boost trade and economic activities for Johor and the country.

The centrepiece is the Asia Pacific Trade & Expo City (APTEC) where MPC will help manage, among other things, the sourcing and distribution of goods from around the region, particularly from China, India and Asean countries.

Critics may view it as putting too many “goodies” on a single plate, but MPC chief executive officer Bill Ch'ng, with his vast experience as a “turnaround wizard”, political and business contacts in China and Hong Kong, is confident that his vision of creating another “Shenzhen-Hong Kong” economic miracle in Malaysia would be a reality.

Ch'ng is a visionary and he is going to bring much excitement to the Johor property market with his innovative concepts and designs. For example, he is creating a kind of timeshared living by having a four-villa cluster sharing a swimming pool in the centre. It would be ideal for extended/large families, each owning a villa or for company use.

The man-made beach at the proposed RM6bil Lakehill Resort City

Besides APTEC, the resort township will also have the following components:

Heritage and Cultural Village: It will be a one-stop tourism hub, where 13 pavilions will exhibit the unique arts, crafts and various types of cuisines offered in each state in Malaysia. There will be alfresco international dining along the waterfront restaurants, bistros and cafes. Diners will be treated to weekly musical fountain shows at the Emerald Lake. A special attraction will be 13 traditionally handcrafted Malaysian-styled gondolas, each representing the 13 states' cultures.

Lakehill Regency Lake: This enclave will have the 6-star Lakehill All-Suites Resort & Convention Hotel, Lakehill Medical & Healthcare Specialist Centre, Lakehill Platinum Residences, Lakehill Power Resort Club and Lakehill Golf Village.

The resort club's membership will be open to buyers of Lakehill Resort City homes and by invitation only. It will have a fine dining club with a large spa and rejuvenation centre.

The Platinum Residences will be a luxury retirement home with 24-hour room service and nursing care upon request and will be manned by a team of doctors and nurses.

There will be some putting greens and driving range for private practice. It will complement the existing 54-hole Tanjung Puteri Golf Course and the 18-hole Octville Golf & Country Club, just 20 minutes away.

Nusa Paradis: This will be the lifestyle entertainment centre showcasing international restaurants, amusement park, dance clubs, karaoke and quaint shopping outlets. It is designed to be a vehicle free zone and hand-drawn rickshaws and trishaw rides will be offered to visitors. The theme is comparable to Universal Studios.

Factory Outlet: Visitors can view thematic buildings in this “cowboy town” and drop in at the sheriff's office and enjoy stagecoach rides. It will be a shoppers' “paradise” as branded goods will be sold at discounted price. Off-season fashion products and electronics goods from APTEC will also be sold here.

Real Rock Cafe: This is another “happening place” where the young as well as young at heart can meet over a cup of cappuccino while enjoying the view below from a five-storey, three-acre rock formation. Visitors can take a bubble lift or climb a rocky pathway passing by a man-made waterfall.

Lakehill Commercial Training Centre: It will be the first of its kind in Malaysia where specialised courses in tourism, hotel management, food and beverage services, business management, retail, health and beauty therapy and other vocational training will be conducted and serve as a source for special skilled workforce for the Lakehill Resort City's staffing needs.

By The Star (by S.C.Cheah)

Call for review of office space freeze in KL

Most quality buildings in Kuala Lumpur are recording tenancy in excess of 90% while rental rates have climbed to between RM6 and RM9 per sq ft

The decade old “freeze” on high-rise office buildings in Kuala Lumpur's inner city needs to be reviewed to allow for the development of more quality office buildings to keep up with the growing demand, property consultants said.

They concurred that a review was timely as there was a lack of Grade A office buildings in the city with most quality buildings recording tenancy in excess of 90% while rental rates have also climbed to between RM6 and RM9 per sq ft.

The KL City Hall (DBKL) had introduced a freeze of new office buildings of more than 20 stories in the Golden Triangle following a huge surplus of office space after the regional financial crisis hit the country's shores in 1997.

By around 2001, about 28% of the available inventory, or about 13.5 million sq ft of office space, was left unoccupied.

According to Regroup Associates executive chairman Christopher Boyd, the situation had changed in the past 12 months and a company wanting a Golden Triangle location in a Grade A building would have difficulty finding space.

“Major corporations which might otherwise have located in KL city appear to have been squeezed out by a combination of planning restrictions and traffic congestion.

“In many cases, KL's loss has been Petaling Jaya's gain, and this does not seem consistent with DBKL's stated objective to enhance KL's position as an international commercial and financial centre,” Boyd said.

Regroup's latest survey revealed that Grade A office buildings in KL were now 94.5% occupied with very little space available to accommodate large companies.

“Rental rates are also approaching record levels with the better buildings commanding over RM7 per sq ft.

“New office supply may not meet demand over the next three years and rents are likely to continue to rise. If this scenario does not improve, Malaysia is in danger of losing its competitive edge to other regional cities,” he cautioned.

Boyd urged the City Hall to review the current position and issue clear and unequivocal guidelines on new office building approvals which allow for moderate growth.

“The service sector is growing at 9.7% a year, and 200,000 new graduates emerge annually to find employment. It would be ironic if Malaysia lost out in attracting multinational regional operations simply through having insufficient quality office space,” he added.

Zerin Properties head of investments Francis Quah said the freeze should be reviewed in view of the shortage of quality office space in the city.

“The City Hall has not imposed a complete ban on new office buildings but is reviewing new project applications on a case-by-case basis. There are still new projects underway.

“While the freeze has resulted in a shortage of quality office space in Kuala Lumpur, it also has its good points. The close watch on new developments allows for regulation and planning,” he said.

Quah said there was a lot of excitement in the market with a growing foreign and local interest in the local office market.

“We see a lot of growth potential and look forward to seeing our market grow and mature to the likes of the other neighbouring cities,” he added.

Echoing Quah's views, Knight Frank Ooi & Zaharin Sdn Bhd managing director Eric Ooi said the so-called freeze had indeed left a good impact in the industry “as it helps to monitor the market where only feasible projects are approved”.

The driving forces for the office market include the country's strong economic growth of 6.3% last year, robust growth of the services sector and a growing demand for prime office space by companies in the oil and gas sector, financial institutions and information technology companies.

“Kuala Lumpur's office market will continue to see good potential in view of its skilled workforce, lower cost of living and modern infrastructure,” Ooi said.

The City Hall head of urban planning department Mahadi Ngah said the City Hall had since 2005 relaxed the ruling that the development of new office building would only be allowed if it was meant for own occupancy and now allow up to 50% of the space to be sold or leased out to other parties.

“There is no blanket freeze on new office buildings now but we look at the application on a case by case basis. Quality projects that are located in areas zoned for office buildings and have pent up demand will be allowed.”

He said the KL Draft Local Plan, which is to be released next month, would spell out the guidelines on the type of office buildings and location allowed, and other considerations, including the plot ratio and density.

By The Star (by Angie Ng)

Growing assets

AmFirst REIT eyes large properties to boost fund size

SIZEABLE PLAN: Pushpa (left) and Ooi is upbeat about the company’s growth prospects

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, wants to buy bigger assets of at least RM50 million to expand, its manager said.

Anthony Ooi, the acting chief executive officer of Am ARA REIT Managers Sdn Bhd, which manages the fund, said it is negotiating to buy two office buildings within Kuala Lumpur's Golden Triangle.

It is also looking at an out-of-town retail mall in Selangor, he said.

"Timing of the purchase depends on the talks and the due diligence. But there will be no small purchase, unlike some others which may buy properties in the RM7 million-RM8 million range," he told Business Times.

AmFirst REIT is the second largest in Malaysia after Starhill REIT, and it will be a drain on resources for a sizeable fund to study small assets, he said.

The size of AmFirst REIT swelled 45 per cent to RM835 million recently after it completed the purchase of all unsold units at The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

It had only RM490 million assets when it was restructured and re-listed under the REIT guideline in December 2006. These assets are due for revaluation next year, which will likely reflect the higher asset prices in the city.

AmMerchant Bank Bhd's executive director Pushpa Rajadurai, who is also an alternate director of the REIT's manager, said the trust will continue to grow and meet its own target of RM1 billion asset size in 18 months, and RM2 billion by fiscal year 2010.

"Malaysia still has sufficient good buildings to be acquired for property trusts. We will look abroad when the opportunities come but we don't need to actively seek for overseas acquisitions," Pushpa said.

Outside KL, it is looking at Penang and Sabah for future purchases. It will also not rule out other smaller states, Ooi added.

While office space remains the core asset of AmFirst REIT, Ooi said it plans to add more retail malls, especially from suburban areas like Petaling Jaya and Subang, with good catchment areas. It will also consider suburban office space, he added.

By New Straits Times (by Chong Pooi Koon)

KLCCP earnings likely to beat market estimates

KLCC Property Holdings Bhd’s (KLCCP) full-year earnings for year ending March 31(FY08) is likely to beat market estimates on higher average rental rates at its flaghip mall Suria KLCC and an upward appraisal of its property worth.

At last Friday’s closing price of RM2.89, the stock is also trading at a huge discount to its assets value.

The stock had tumbled 20% over the past three months, prompting some analysts to say that the sharp decline was overdone.

Currently, KLCCP market value stands at RM2.7bil, which is half of its net book value of RM5.4bil as at end of March last year.

Citi Investment Research, in a recent update on the stock, said KLCCP should be valued at par to its assets worth given the prime locations of its commercial properties.

According to Citi, the revised net asset value (RNAV) estimate for Petronas’ commercial property and investment arm is RM6.1bil, or RM4.72 per share.

“We consider RNAV a better reflection of KLCCP’s valuation, as we expect property values and rental rates to increase 10% per annum in the KLCC area,” Citi said.

KLCCP had in February completed the revaluation of Petronas Twin Towers, Suria KLCC, Menara Exxonmobile and Menara Dayabumi, which resulted in a revaluation surplus of RM427mil.

The surplus was estimated to increase KLCCP’s net asset value by about 33 sen per share.

Meanwhile, KLCCP is scheduled to release its full year results by the end of next month.

Citi said the company’s full year earnings would probably exceed market expectation.

By The Star (by Izwan Idris)

PK minority shareholders advised to reject offer

PK Resources Bhd’s three major shareholders and its top three management officials’ bid to take over the cash-rich company suffered a setback after the independent adviser recommended the minority shareholders reject the offer.

Kenanga Investment Bank Bhd, in its independent advice circular issued last Friday, told the minority shareholders to reject the offer of 60 sen per share after taking into account the financial and price considerations.

It said the offer price was below the market prices of the shares since April last year and was also at a discount of 23.08% and 25.39% to the five-day volume weighted average price (VWAP) up to March 17 of 78 sen and 81 sen respectively.

In a separate statement to minority shareholders, five PK Resources directors, who said they were non-interested directors in the deal, said they had also deliberated on the offer and concurred with the recommendation of Kenanga for the holders “to reject the offer”.

The non-interested directors are Chor Eng Choon, Prof Tengku Datuk Shamsul Bahrin, Datuk Alladin Mohd Hashim, Datuk Prof Zainudion Muhammad and Ooi Soon Kiam.

Kenanga said the offer price was also at a price-to-book ratio (PBR) of 0.16 times, which is substantially below the below the average PBR of comparable companies of 1.61 times.

“Holders should also take note that the offer price represents a discount of 18 sen or about 23.08% to the five-day VWAP up to March 17 of 78 sen per share, as opposed to premiums given in recent privatisation transactions,” it said.

It had also considered takeover exercises of companies, which were completed since June 2006 and it noted the average premiums were 16.31%. The premiums ranged from 0.4% for Magnum Corp Bhd to a high of 49.4% for Nexnews Bhd.

PK Resources, which is involved in property development, also operates the Nilai International University College. At Dec 31, 2007, it had RM27.55mil cash.

Kenanga said the implementation of the Government’s proactive measures such as the exemption of the real property gain taxes and other positive measures were expected to augur well for the property development sector in general.

“Based on the outlook and prospects of the property industry, the PK Resources group for the next 12 months is expected to maintain its current business and financial trend,” it said.

On March 18, the major shareholders and management officials had proposed to acquire the remaining 54.02%, or 61.6 million shares, at 60 sen each or RM36.96mil.

Akarmas Sdn Bhd, which owns 10.84% of PK Resources, had teamed up with Ragan Jaya Sdn Bhd (22.83% equity) and Pristine Acres Sdn Bhd (7.24%), for the takeover exercise. They had stated the listing status of PK Resources would be maintained.

The top management officials of PK Resources also involved in the takeover were executive chairman Tan Sri Dr Gan Kong Seng, managing director Gan Eng Hong and executive director Datuk Gan Kong Hiok.

Kong Seng has a direct stake of 3.53 million shares or 3.10% while he indirectly controls 40.63 million shares or 35.63% and Kong Hiok, 2.24 million shares.

By The Star (by Joseph Chin)

AmFirst REIT plans more share placements

AMFIRST Real Estate Investment Trust (REIT) plans to place out more stocks this year to bring its gearing down and to raise money for future buys.

Its gearing is now around 48 per cent, which is near the 50 per cent limit for a REIT set by the Securities Commission.

"Our acquisition strategy has been funded by borrowing because it is convenient, fast and we have the capacity to do so," AmMerchant Bank Bhd's executive director Pushpa Rajadurai, who is also an alternate director of the REIT's manager, said in an interview with Business Times.

"With a strong yield of 8.2 per cent, as we buy more buildings, we will issue more units to increase the investor base and hopefully improve the unit performance," she said.

The money raised may also be used to refinance existing buildings, she added.

Pushpa said it is already working on the placement plan, but she was not ready to talk about the placement size yet.

"Acquisition is very competitive and you need to get the money ready. Over the long term, we want to keep the gearing at 30-35 per cent level," she said, although the ratio is bound to fluctuate as and when the fund buys an asset or places out more units.

With the backing of Malaysia's fifth largest bank and an experienced property manager in ARA Asset Management Group, which is an affiliate of Hong Kong's property giant Cheung Kong group, AmFirst boasts a strong pipeline of assets.

ARA Management's director Michael Lim said AmFirst may tap into the ARA Asia Dragon Fund, a US$1 billion (RM3.15 billion) private equity fund set up to invest in Asia assets, for growth in the medium term.

LIM: Firm may tap into the ARA Asia Dragon Fund

"We can use it as an incubator fund to prepare assets for the REIT, similar to what Quill Capita Trust has done.

"The Asia Dragon Fund can buy more rundown buildings, enhance them and sell into the property trust. Every fund will have an exit timeline and AmFirst will be its preferred REIT," Lim said.

The Asia Dragon Fund has allocated US$200 million (RM630 million) for investment in Malaysia and ARA has a dedicated team for the country.

The team is evaluating a retail mall outside Kuala Lumpur, he said.

Other prospects for AmFirst still include buying from the AmBank Group itself, which has many buildings housing its operations as well as a wide network of branches.

By New Straits Times - Business Times - (by Chong Pooi Koon)

Saudi investor aims to sell luxury homes

KINGDOM Hotels Investment (KHI) will start selling luxury homes that will be built next to the Four Seasons Resort Langkawi in November this year, the sales agent for the project said.

The private residences, to be priced at about US$900 (RM2,844) per sq ft, could rake-in an estimated US$75 million (RM237 million).

Last year, Four Seasons Resort Langkawi was bought by KHI, which is controlled by Saudi Arabian Prince Alwaleed Bin Talal for RM430 million from Malaysian Airlines System Bhd.

"We are waiting for the approval for a couple of concepts. We intend to commence marketing and sales in the fall of 2008 and the first sales is anticipated in November 2008, assuming all permits and licences are in place," Scott Brown, vice-president (Sales) of The Kor Real Estate said.

The Kor Real Estate is a luxury marketing and sales organisation. Investors of Kor Real Estate also own the luxury hotelier, The Kor Group.

"We have been engaged by KHI to coordinate the global marketing and sales programme for this project," Brown told Business Times in a telephone interview.

"One plan is for 18 to 24 private residences which have spacious two, three and four bedrooms, ranging in size from 2,500 sq ft to 5,000 sq ft.

"Comparable Four Seasons branded Private Residence projects sold in similarly matured or more matured resort destinations globally are priced between US$800 and US$1,500 (RM2,528 and RM4,740) per sq ft. At the present time, the product designed for Langkawi will be priced starting from US$900 (RM2,844) per sq ft," Brown said.

Potential buyers would be the same people who already frequent the Four Seasons Resort, Langkawi.

"They include Eastern Europeans, Russians, Middle Eastern buyers and affluent Asians," he said.

By New Straits Times (by Vasantha Ganesan)