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Wednesday, April 23, 2008

JTC Corp to sell properties to Mapletree

JTC Corporation has announced that it will be divesting a selected portfolio of high-rise ready-built properties to Mapletree Investments Pte Ltd worth a total of S$1.71 billion

“This divestment option was part of Mapletree’s proposal to JTC, when Mapletree was appointed by JTC as the real estate investment trust (REIT) manager for the selected portfolio in February this year,” said JTC in a statement yesterday.

The company said the divestment of properties to Mapletree was part of its overall divestment exercise to promote competitiveness and vibrancy in the industrial property market.

“It will also enable JTC to focus on being a strategic infrastructure provider to support Singapore’s economic growth and position Singapore as the choice investment location,” it said.

JTC and Mapletree also announced that based on the advice of the REIT financial advisers, they will not be proceeding with the proposed listing of the portfolio of properties via REIT at the present time.

“This is in light of the current volatile market conditions which are not conducive for a REIT initial public offering. Instead, JTC will divest the portfolio of properties to a private trust sponsored by Mapletree,” they said.

The transfer of properties to Mapletree is expected to be completed by July this year.

By Bernama

Melewar submits RM2.2b monorail plan

On Track: An artist's impression of Melewar's RM2.2 billion monorail system for George Town

MELEWAR Industrial Group (MIG) Bhd has presented to the Penang state government a proposal for a RM2.2 billion monorail system for George Town.

The proposed ultra-light loop monorail system covering a 52km track is set to operate on a single line and run on three different loops from locations like Gelugor, Farlim in Air Itam and Gurney Drive into the city.

“The focus of the main link will be the centre of George Town and we strongly believe that the federal government and state government will work together in bringing a monorail system to Penang,” Melewar Industrial Group’s managing director and chief executive officer Tunku Datuk Yaacob Tunku Abdullah told reporters after presenting the proposal to Chief Minister Lim Guan Eng and members of the state executive council yesterday at Lim’s office.

He said the proposed system, which is aimed at moving people from point-to-point into the city, will boast a 12-car train of monorail and can move 17,600 passengers per hour.

Tunku Yaacob said the company can take 28 months to complete the system which would feature steel structures.

“Land acquisition can also be kept to a minimum because the monorail will be running on road dividers,” he added.

When asked to comment on concerns from Penangites that a monorail would mar the charm of George Town’s historic inner city which is vying for a listing on the World Heritage List, Tunku Yaacob said:

“We will not bring the monorail to heritage buildings ... we will not run it in front of the buildings but behind them.”

However, an artist’s impression of the proposed monorail system for Penang provided by Melewar showed the system running alongside historic structures in the city.

On postings in blogs that Penang should bring back its tram system instead of introducing a monorail, he described the tram concept as an interesting one but pointed out that the trams had not been successful.

Last November, Melewar Industrial Group Bhd unit Melewar Metro Sdn Bhd (MMSB), which is vying for the estimated RM1.2 billion monorail project in Penang, announced that it had formed a consortium with Putera Capital Bhd to cooperate to jointly secure the project.

Melewar Group had said in a statement that the consortium was formalised with the signing of a memorandum of understanding between MMSB’s wholly-owned subsidiary Melewar Metro (Penang) Sdn Bhd (MMP) and Putera Capital. MMSB made the proposal for the monorail project to the government via its subsidiary.

Melewar is one of several parties which participated in a tender exercise for the development of a monorail system for Penang on November 14 last year which was called by Syarikat Prasarana Negara Berhad (SPNB).

In January this year, SPNB awarded a letter of intent for the project to Malaysian Resources Corporation Bhd (MRCB), which has formed a consortium with Penang Port Sdn Bhd and Scomi Engineering Bhd.

By New Straits Times (by Marina Emmanuel)

Damansara Realty to pare down losses

DAMANSARA Realty Bhd (DBHD) has proposed to use RM656.6 million arising from its proposed capital reduction exercise to reduce the accumulated losses of the company and put it on a firmer footing.

In a filing to Bursa Malaysia yesterday, DBHD said the exercise entailed the cancellation of 84 sen of the par value of each of the existing 781,689,857 ordinary shares of RM1 each.

“Upon completion of the exercise, the issued and paid-up capital of the company will be reduced to RM125,070,377 comprising 781,689,857 ordinary shares of 16 sen each,” it said.

DBHD also proposed one-for-two rights issue of up to 125,070,377 shares.

It said based on the issued price of 50 sen per rights issue, the gross proceeds to be raised under the minimum subscription level and maximum subscription level would amount to RM30 million and RM62.5 million, espectively.

“The proceeds will be used for the working capital requirement and to defray expenses relating to the proposed restructuring scheme of about RM2.5 million,” it said.

The company also has proposed to acquire some assets from Johor Corp Group of Companies to improve revenue generation capabilities of the DBHD.

Among others, it has proposed to acquire a leasehold industrial land for RM178 million, 100 per cent equity interest in TPM Technopark Sdn Bhd for RM41.3 million and 53.2 per cent equity interest in TMR Urusharta (M) Sdn Bhd.

It has also proposed to dispose of 99.99 per cent equity interest in Tanjung Tuan Hotel Sdn Bhd for RM37.6 million.

By Bernama

AmFirst REIT moves to shed old perception

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, is working hard to shed a past perception when it comes to performance.

Previously known as the AmFirst Property Trust, the fund was the first to go public on the local bourse 18 years ago as part of the government's plan to kick-start the industry. Performance of the sector was generally viewed as lacklustre as proper legislation was lacking before to spur growth.

"It is not that the market perception on AmFirst was bad. To put it in perspective, it was listed back then to answer to the government's call to set up property trusts. The fund was started to include AmBank's own buildings," AmMerchant Bank Bhd's executive director Pushpa Rajadurai said in an interview with Business Times.

PUSHPA: Since ARA came in, our asset size has increased

Since then, there was no change in the regulations that govern property trust, until 2005. And AmFirst had almost immediately taken steps to look at revamping the old property trust according to the new REIT guidelines. It remains the only one of three old property trusts that have been rebranded and re-listed on Bursa Malaysia.

"We know that in REIT, it is good to bring in an independent property manager. ARA Management has the expertise in this area and that's why we've tied up with them," Pushpa pointed out.

Singapore-based ARA Asset Management Ltd, an affiliate of Hong Kong's real estate giant Cheung Kong Group, was roped in to own a 12.5 per cent share of AmFirst REIT. It also owns 30 per cent of the trust manager, Am ARA REIT Managers Sdn Bhd.

"The change has already been reflected in our strategy. Since ARA came in, our asset size has increased and the dividends per unit were boosted," she said.

AmFirst's asset size has swelled to RM835 million recently after it bought all the unsold units of The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

The purchase boosted its dividends by two sen per unit for the financial year to March 2009, bringing the total forecast distributions to 9.3 sen gross per unit.

Michael Lim, a director of ARA Management, said AmFirst will spend at least RM6.5 million this year to upgrade three buildings - Menara Ambank, Menara Merais, and AmBank Group Leadership Centre.

By New Straits Times (by Chong Pooi)

PNB sees bigger foreign investments by 2010

STATE-owned fund manager Permodalan Nasional Bhd (PNB) aims to see overseas investment representing 10 per cent of its investment portfolio by 2010, an effort to further enhance its returns.

Chief executive officer Tan Sri Hamad Kama Piah Che Othman said this is part of plans to restructure its current investment portfolio, which will also see them focusing on other potential sectors such as property and hospitality.

Despite interest to expand abroad, he said the group will continue to be focused on its local investments.

"We would first focus on our base here. We will try to go to countries where we can get good returns," he told reporters after the launch of the PNB International Lectures by Deputy Prime Minister Datuk Seri Najib Razak in Kuala Lumpur yesterday.

Hamad Kama Piah said PNB also plans to introduce new investment products, particularly those offering higher returns but at higher risk level, into the market.

In line with this, he said PNB plans to organise more programmes to help educate the public on investment strategies.

"Our investors are always looking for low-risk investments that offer very high returns. In reality, low-risk investment brings low return. That is why we are organising various programmes such as the Minggu Amanah Saham, to educate the public so that they would have a better understanding on the concept of 'risk and return' as well as the need to plan their wealth," he added.

PNB manages some RM120 billion worth of funds or 12.6 per cent of Bursa Malaysia's market value.

Since 1981, it has distributed returns of RM60 billion and set aside RM5 billion each year in investment returns. It has a 58.4 per cent share of the total net asset value in the country's unit trust industry.

By New Straits Times (by Anna Maria Samsudin)

High cost derails KL-S'pore bullet train project

The cost factor was the main reason the government decided not to go ahead with the high-speed bullet train link between Kuala Lumpur and Singapore proposed by YTL Corp Bhd.

“The letters on the decision were sent to parties such as YTL and the relevant agencies in early April,” said Economic Planning Unit (EPU) director-general, Datuk Seri Dr Sulaiman Mahbob, said yesterday.

He said the government would have to bear a significant cost based on the financial model that was submitted by YTL.

“Based on the financial model submitted by YTL, the government has decided not to go ahead with the bullet train (project),” he said, without elaborating on the amount the government has to bear.

YTL has proposed the RM8 billion project which would take 90 minutes to travel between the two capitals from about seven-and-a-half hours now.

It was earlier reported that the government has allowed YTL to do a feasibility study and it (YTL) came back to say the project was feasible.

The plan for a high-speed train between the two cities, spanning about 300km, was proposed in late 1990s, but garnered strong interest last year after the government invited companies to come up with ideas for privately-funded projects.

By Bernama