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Wednesday, April 30, 2008

MRCB: KL Sentral to be completed by 2015

RELAXATION CENTRE: Sooka Sentral focuses on luxurious health, beauty, wellness and dining experience

MALAYSIAN Resources Corp Bhd (MRCB), a construction and property company, expects to complete the whole development of its RM8.4 billion comprehensive and integrated Kuala Lumpur Sentral development project (KL Sentral) by 2015.

Its retail asset development general manager Zulkifli Ibrahim said the company has completed more than RM2 billion worth of development, and another RM5 billion new development is under construction and progressing rapidly.

"This new development includes the construction of high-rise office buildings, a shopping mall, a five-star hotel, condominiums, luxury service apartments, and a media and education centre," he told reporters during a media tour around KL Sentral's latest edition called Sooka Sentral - a lifestyle, health and dining centre - in Kuala Lumpur yesterday.

Zulkifli said construction work on the new shopping mall is expected to begin by the middle of the year, with targeted completion by 2011, while the office buildings, condominiums and luxury service apartments, located opposite the National Museum, are scheduled to start by the end of the year.

KL Sentral is being developed as a futuristic self-contained city, providing the perfect living, work and play environment. Located in the heart of Kuala Lumpur, it is also dedicated to be the transport hub of the city.

The Sooka Sentral, meanwhile, is located directly opposite the southern entrance of the KL Sentral station. The six-storey building is managed by Sooka Sentral Sdn Bhd, a wholly-owned subsidiary of MRCB.

"It is the only and ultimate centre for relaxation within KL Sentral development that focuses on luxurious health, beauty, wellness and dining outlets," Zulkifli said, adding that Sooka Sentral has reached a 100 per cent occupancy rate.

He said the gross development value of Sooka Sentral is about RM60 million, offering some 9,290 sq m of space. It houses a fitness centre, a spa, beauty and health centre, a food court, fine dining restaurants and alfresco dining outlets.

Among its tenants include Centro, Kiliney Kopitiam, Zen, Chili Espresso,, Oriental Spoom, Sushi King, Kelantan Delights, Kabul restaurant, World of Perfume, Cuttery, Beaubelle, Equal Fitness Sports Massage, Tanamera Tropical Spa, Chiill Reflexology, The Spa, and SynarGym.

By New Straits Times (by Kamarul Yunus)

Lifestyle centres for KL Sentral

KUALA LUMPUR: Kuala Lumpur Sentral, the integrated commercial-cum-residential development in Brickfields, will have two retail-cum-lifestyle centres offering close to one million sq ft of net lettable space.

The first, the 100,000-sq-ft Sooka Sentral Lifestyle Centre that opened last December, is now fully occupied.

Sooka Sentral Sdn Bhd general manager Zulkefli Ibrahim said the RM50mil lifestyle centre would provide wellness, health, beauty and dining facilities for residents and office workers in Kuala Lumpur Sentral and the surrounding area.

With rental rates of RM8 to RM20 per sq ft, Sooka was expected to generate an annual rental income of RM8.4mil, he said at a media tour of the new facility yesterday.

The second project will comprise a 750,000-sq-ft shopping centre to be built at a cost of RM420mil on Lot G. Construction will kick off by mid-year for completion in 2011.

Zulkefli said the new shopping centre was expected to generate annual rental income of RM60mil.

The 72-acre Kuala Lumpur Sentral development started in 1997 and is scheduled to be completed in 2015.

By The Star

Berjaya in RM11b joint venture

RESORT-LIKE: Artist’s impression of part of the Jeju project.

BERJAYA Land Bhd is partnering the Jeju Free International City Development Centre (JDC) to develop a US$3.6 billion (about RM11 billion) resort-type residential and commercial complex in South Korea.

Berjaya Jeju Resort Ltd is an 81:19 joint venture between Berjaya Leisure (Cayman) Ltd and JDC.

Berjaya Jeju will be the master developer for the development of 74.37ha in Yerae-Dong, Seogwipo-Si, Jeju.

The Yerae Resort-type Residential Complex will be developed over eight to 10 years, Berjaya Land said in a statement yesterday.

The development, costing US$2.6 billion (RM8 billion) to build, will comprise 600 mid-rise apartments, 200 villas, 500-room resort hotel and serviced residences, and a full-fledged casino with 500 rooms.

Other components include a commercial facility and shopping; indoor arena and dining amenities; a health, medical centre and spa resort; cultural village; and other recreational, private and public facilities.

The casino, a key development, will be built in the early phase of the project.

Berjaya Jeju, which will have an initial paid-up capital of US$30 million (RM95 million), will enter into a sale and purchase agreement with JDC to buy the land from JDC for 72.1 billion won (RM230 million).

Following the acquisition, JDC is required to con-tribute not less than US$4.5 million (RM14 million) worth of improvements to the land in the form of infrastructure such as roads and parks.

Berjaya Land said that the development cost of the project will be financed through equity, borrowings and proceeds from the sale of housing units developed under the project.

JDC is a statutory agency established within South Korea's Ministry of Construction and Transportation.

It oversees the development of Jeju.

By New Straits Times

BLand-S. Korean JV to build US$2.6bil resort

PETALING JAYA: Berjaya Land Bhd (BLand) is teaming up with South Korea’s Jeju Free International City Development Centre (JDC) to build a US$2.6bil (RM8.2bil) resort-style residential and commercial complex with a full-fledged casino in Jeju province.

BLand told Bursa Malaysia yesterday its unit, Berjaya Leisure (Cayman) Ltd (BCayman), had signed an agreement to set up the joint venture, Berjaya Jeju Resort Ltd (Berjaya Jeju).

Berjaya Jeju would be the master developer for the 74.37ha site in Yerae-dong, Seogwipo-si, Jeju province. It will develop the project over eight to 10 years.

The development would have 600 mid-rise apartments, 200 villas, a 500-room resort hotel and serviced residences and a full-fledged casino with 500 rooms, an indoor arena, a health, medical centre and spa resort, a cultural village and other recreational, private and public facilities.

“The casino, which will be the key development, shall be constructed in the early phase of the project,” the company said.

BLand said the project would have a gross development value estimated at US$3.6bil, subject to the finalisation of the business plan.

The initial paid-in share capital of Berjaya Jeju would not be less than US$30mil, of which BCayman would subscribe for 81% and JDC the remaining 19%.

BLand said Berjaya Jeju would then enter into a sale and purchase agreement to acquire the land from JDC for 72.1 billion won (US$73mil).

After the land acquisition, JDC would contribute US$4.5mil for infrastructure such as roads and parks on the site.

In a separate statement, JDC said the JV would attract foreign tourists by developing high-end tourism products targeting Asia and the Middle East as well as South Korea by using Berjaya Group’s global marketing network.

JDC said the resort-style residential complex would make a 774.1 billion won (US$772.83mil) contribution to the Jeju economy and create 6,300 jobs.

By The Star

Status quo on mega projects in Penang

PENANG: The situation with Penang's mega projects under the Ninth Malaysia Plan (9MP) remains unchanged for now.

Chief Minister Lim Guan Eng said this after meeting Second Finance Minister Tan Sri Nor Mohamed Yakcop on Monday to get a clearer picture on the status of the projects in the state, which had been included under the 9MP.

“The situation is the same for now,” he said.

On Saturday, Nor Mohamed said the mega projects under 9MP, which included the Penang Outer Ring Road (PORR) and the monorail, have not reached “approval stage.”

He said the government couldn’t give a commitment on the two projects as they had yet to reach the level where approval was being considered.

However, Lim, in a reaction to the issue, said it was a question of ethics and moral.

“Before the general election, the Federal and previous state government had made commitments that the mega projects had been passed and will be implemented. But their commitments changed after the people’s decision on March 8,” he said.

Lim said if the Federal Government did not intend to live up to its commitment, “it would be making a rash action as the mega projects also involved international parties.”

By The Star

Fiasco of the factories to end

Major changes are in the offing for the Illegal Factories Rehabilitation Programme introduced by the previous Selangor state government in 2006.

According to Selangor State New Village Development and Illegal Factory Task Force Committee chairman Ean Yong Hian Wah, the policy reviews are necessary because the illegal factories legalisation programme has flaws.

“It must benefit entrepreneurs and citizens of the state which isn't the case now,” Ean Yong told the StarMetro during a recent interview at the state secretariat in Shah Alam.

“Factory owners feel that the premiums being charged for land use conversions are too high while those living near the factories are complaining about pollution, fire hazards, non-existent buffer zones and social issues,” he said.

“The process will take time because we intend to pursue this on a case-to-case basis to draw up new rules and regulations,” Ean Yong said.

By definition, factories operating without permits, business licences or certificates of completion and compliance (CCC) on land meant for residential, agricultural or commercial purposes or on government reserve land are illegal.

Responding to a question on illegal factories during The Star's Cafe Latte Chat in March, Selangor Mentri Besar Khalid Ibrahim said: “I’m not closing them down. I’m trying to work with them, to make them follow us. The existence of illegal factories is due to corrupt practices”.

A 2006 census recorded 3,165 illegal factories in Selangor with exports worth RM4bil annually and 150,000 job opportunities for locals and foreigners.

But Selangor State Local Government, Study and Research Committee chairman Ronnie Liu said the number of illegal factories was more than 4,000 because cottage industries were also involved. (See table for comprehensive data).

Under the incentive package offered, factory owners will enjoy a 50% discount on land premiums paid within three months of the conversion approval while those paying within six months are entitled to a 30% discount and 10% discount for those who pay up within nine months.

According to Balakong Chinese Chamber of Commerce and Industry and Balakong Jaya Industrial Area Land and Factory Owners Associa-tion joint chairman Lam Koong Sum, factory owners are forced to pay higher premiums due to the higher value of industrial land.

“Furthermore, light industries were told to pay premiums for medium industries and medium industries for heavy industries. This has affected the small players,” he said.

Under the incentive package, temporary operating licences and temporary building permits are issued yearly for a maximum of three years to premises located in industrial zones or areas to be rezoned for industrial use.

Owners and operators must first submit land usage conversion applications, planning permits and build ing plans to be reviewed by authorities such as the Fire and Rescue Department, Environment Depart-ment, state water supplier Syabas and Tenaga Nasional Berhad.

For premises not in industrial zones or in areas that cannot be rezoned, temporary licences and permits would still be issued on a yearly basis for a maximum of three years but operators would either have to move to an industrial zone or cease operations within the time.

The ultimate agenda should be to create a win-win situation for residents, factory owners and the state that also stands to benefit from collecting quit rent.

By The Star (by Geetha Krishnan)

Investors turn wary on construction stocks

Negative news on possible delays and revaluation hits sentiment

PETALING JAYA: After several consecutive quarters of positive growth for the construction industry, investor sentiment on the sector appears to be turning, mainly owing to negative news of possible delays or revaluation of mega projects

A case in point is the selldown on Gamuda Bhd from a 30-day high of RM3.44 on April 21 to RM3.08 yesterday.

TA Securities technical analyst Stephen Soo said news on further delays, especially in Penang where there remained disagreements, were worrying traders.

“At the same time, the market has also come off its peak since the Telekom Malaysia Bhd listing (ex-TM International Bhd),” he told StarBiz.

Soo forecasts 1,240 to 1,260 points as the immediate term support for the KL Composite Index. The benchmark index fell 11.66 points to 1,283.65 yesterday.

He said as the construction sector could be overbought, he anticipated further downside next month, which indicated its relative weakness versus the resilient oil and gas and plantation sectors.

In the medium term, Soo said the market would “try to find a bottom” at end-June.

On the other hand, Kenanga Investment Bank Bhd head of research Yeonzon Yeow does not think the outlook for the sector is bad.

“Most (construction counters) have booked in their projects for the next two years.

“Their earnings would come in within expectations, hopefully for those that were negotiated last year and this year as well,” he added.

Yeow said the contracts tendered for had built-in cost escalation and cost variation allowances so there would be little risk to margins, but before construction companies could complete negotiations, some counters might book losses.

Beyond the next two years, he said, ongoing projects were unlikely to be derailed since the state and federal governments “are both investment friendly.''

However, it would be a different story for the projects on which work has not commenced.

Yeow believes that the margins for such projects would be maintained, but “the quantum could be affected”.

He picks LCL Corp Bhd, TRC Synergy Bhd, Muhibbah Engineering (M) Bhd, WCT Engineering Bhd and IJM Corp Bhd as stocks that would be able to meet earnings expectation over the next two years.

Meanwhile, OSK Research has a neutral call on the sector “with a downside bias based on delay and non-commencement risk,” said its analyst Jeremy Goh.

However, Goh believes that much of the downside would have been factored into share prices by now.

Generally, he sees flat growth, or at best 1% growth this year, in contrast to the Bank Negara's official estimate of 5.5% growth, given that about 85% of the growth in the sector could be statistically attributed to government expenditure.

He attributed this to the lower government development expenditure of RM40bil this year compared with RM40.6bil last year.

Goh recommends construction players with large overseas exposure, naming WCT Engineering, which derives 67% of its order book from the Middle East.

By The Star (by Loong Tse Min)

HLA buys building from PJ City

KUALA LUMPUR: Hong Leong Assurance Bhd (HLA) has entered into a sale and purchase agreement with PJ City Development Sdn Bhd for the proposed acquisition of a six-storey commercial building for RM75.698mil.

Hong Leong Financial Group Bhd, the parent company of HLA, told Bursa Malaysia the commercial building was to be erected on leasehold land measuring about 16.6 acres in Petaling Jaya.

“The property is targeted to be fully completed by first quarter of 2009,” it said.

By Bernama