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Monday, May 5, 2008

Projects in Singapore set to further boost group image

The Seaview Collection condo in Sentosa Cove will comprise two eight-storey blocks of 125 residences.

VENTURING into Singapore's luxury residential property market is set to enhance IOI Properties Bhd's brand and reputation as a quality home developer in Malaysia and Singapore.

IOI Properties executive director Datuk Lee Yeow Chor is excited about the company's two projects in Sentosa Cove that would pave the way for more ventures across the causeway over the next two years.

The two projects will be undertaken with its Singapore joint-venture partner, Ho Bee Investment Ltd, which is involved in four other projects in Sentosa Cove.

“We are confident that the projects will do well as there are no more land for condominium projects in Sentosa Cove.

“The 5.3-acre land parcel that we successfully tendered for in January is the final piece of condominium land to be launched by Sentosa Cove Pte Ltd,” Lee said.

He added that the acquisition of the land has just been concluded and it would be the site for its second project, The Pinnacle Collection, which is one of the two condominium parcels that flank the entrance of the marina leading into Sentosa Cove.

Lee said the scheduled completion of the Genting group's integrated resort development on Sentosa Island next year would spawn a greater demand for more quality homes in Sentosa Cove.

“Sentosa Cove, a world-renowned exclusive residential development, is now about 50% completed while another 20% of the projects are now ongoing. It has attracted many high net worth buyers from around the world,” Lee said.

The Pinnacle Collection, comprising a 20-storey block of 250 luxury condominium units, will be launched by the end of next year.

The Pinnacle residences will have an average built-up of 2,000 sq ft. The building designs for the project are still being finalised.

Meanwhile, the company's first project in Sentosa Cove, the Seaview Collection, will comprise two eight-storey blocks of 125 residences on 3.6 acres.

Construction will start in the third quarter of this year and the project will be launched for sale by the end of the year.

Analysts look at IOI Properties' venture into Singapore positively.

A recent CIMB Research note said that as the company's profits were the largest compared with other Malaysian developers, IOI Properties had no choice but to seek new avenues for growth to see a significant impact on its bottom line.

“We view positively its choice of joint-venture partner as Ho Bee has carved a niche in high-end residential development projects on Sentosa Island.

“IOI Properties is one of the few Malaysian developers with the balance sheet to take on Singapore-scale projects,” it said.

CIMB Research said although the Singapore property market was highly competitive, “values are significantly higher than in Malaysia”.

“Assuming an average selling price of S$3,000 per sq ft, the sales value of the Seaview Collection condominiums alone is a mind-boggling RM2.4bil, which is equivalent to a medium-sized township that would easily take 10 to 15 years to complete.

“The break-even cost for the condominiums is estimated at S$1,900 per sq ft,” it said.

The margins for the Pinnacle project should also be good as the break-even cost is around S$2,400 per sq ft while the targeted selling price should be closer to S$3,500 per sq ft, the research house added.

By The Star

RM2b launch of Bandar Kinrara’s last phase

DREAM HOMES: Island & Peninsular’s new developments in the township will cover 203ha.

Island & Peninsular Bhd (I&P) will launch the last phase of its 770ha Bandar Kinrara township project in Puchong, building a commercial hub and a residential enclave worth more than RM2 billion.

The two developments will cover 203ha, being the last plot of land at the township, group managing director Datuk Jamaludin Osman said in an interview with Business Times.

“We will use 470 acres (about 190ha) to build semi-detached homes, bungalows and terrace houses, which we will release into the market in phases over six to seven years,” he added.

“The commercial hub will be an icon in the township, enhancing its value completely.”

I&P has 5,670ha in the Klang Valley, Selangor and Negri Sembilan, some of which has existing developments worth RM9.5 billion.

Jamaludin said the company is projecting earnings to grow this year, helped by new product offerings.

It is targeting net profit of RM225 million on the back of revenue of RM900 million for the year ending January 31 2009.

Last year, it posted net profit of RM222 million on revenue of RM774 million.

“The earnings will depend on market forces. We are on track, but will have to look at market sentiments in the second half of the year.

“We are hopeful, looking at our existing projects and new launches coming up.” Jamaludin said the new developments in Bandar Kinrara, as well as Alam Impian in Shah Alam and Alam Sari in Bangi, will boost I&P’s outlook with their product variety.

Alam Impian is a 4,860ha township, launched in December 2006, offering 11,000 semidetached homes, bungalows and terrace houses. It will be developed over the next 15 years and is worth RM4 billion.

Aman Sari, which was launched in November last year, will offer 3,500 semi-detached homes, bungalows and terrace houses on 176ha. I&P is expecting sales of RM1 billion from the development, which will go on for the next seven years.

Jamaludin said that two other projects, which will supplement the ongoing developments, are the 203ha Bayuemas in the Klang Valley and the 770ha Kota Seriemas in Nilai, Negri Sembilan.

Bayuemas will offer 2,700 semi-detached homes, bungalows and terrace houses worth RM1.4 bil-lion. It will be completed over 12 years.

Kota Seriemas will offer 18,000 houses worth RM2.7 billion. The project began in 2000 and will last for the next 15 years.

"In Kota Seriemas, we are building a nine-hole golf course, chalets and a clubhouse. We reckon it will enhance the value of the township.

"We will continue to offer a good lifestyle for residents at all of our townships," Jamaludin said.

"We are quite positive of sales from all our projects and will continue to launch new phases," he added.

By New Straits Times (by Sharen Kaur)

IOI Properties in for steady flow of earnings

Plan for high-value projects in Malaysia and Singapore will ensure good earnings prospects for group

IOI Properties Bhd will be able to reap good earnings from several high-value commercial and residential projects in Puchong, Kuala Lumpur, Penang and Singapore over the next two to three years.

The main board-listed company is also building up its property investment portfolio with the launch of the Puchong Financial Corporate Centre and the expansion of the IOI Mall in Puchong.

According to IOI Properties executive director Datuk Lee Yeow Chor, the company has set out to capitalise on the high value of its two townships, Bandar Puchong Jaya and Bandar Puteri Puchong, and has lined up a number of interesting commercial projects that will further spruce up these addresses.

Datuk Lee Yeow Chor

As Puchong still lacked Grade A office buildings, IOI Properties will be building the Puchong Financial Corporate Centre (PFCC) that will showcase five blocks of Grade A office buildings in Bandar Puteri Puchong.

Construction work for the first two blocks has started and is expected to be completed by the first quarter of 2009. Work on the other three blocks will start early next year and the buildings will be ready by 2011.

“If the offer is right, we may consider selling one of the blocks in PFCC on an en bloc basis to a corporate or institutional buyer.

“IOI Properties will keep the remaining four blocks for long-term lease by corporations on condition that the space leased should be at least 25,000 to 40,000 sq ft,” Lee told StarBiz.

At an estimated rental rates of between RM3.80 and RM4.60 per sq ft for the office space and RM7 per sq ft for the retail space, total rental income expected from the first two blocks was some RM23mil, he said.

“These are futuristic and iconic office buildings that will elevate the office property landscape in Puchong. The project's location along the Damansara-Puchong Expressway gives the buildings very good frontage,” he added.

An artist's impression of IOI Boulevard in Pulau Bandar Puchong.

The ongoing extension of the IOI Mall costing RM70mil will add 300,000 sq ft of net lettable space to the existing 670,000-sq-ft mall.

He said the new wing, scheduled for completion by the end of this year, would raise the annual rental income from the shopping mall to RM50mil from RM37mil now.

New lifestyle hub

In the 930-acre Bandar Puchong Jaya, a new lifestyle business-cum-entertainment hub called IOI Boulevard will be built on the last piece of commercial land totalling six acres.

The RM330mil project will comprise 60 shop offices of five, six and eight storeys with average built-up areas of 11,050 to 17,680 sq ft.

The 60 retail lots on the ground floor will be priced from RM600 to RM650 per sq ft while the offices that are occupying the upper floors will be from RM300 to RMM350 per sq ft.

There are also eight corner blocks of eight storeys each offering space of 45,000 sq ft a block. They are priced around RM17mil each.

“The focal point of IOI Boulevard will be the glass canopy-covered centre courtyard called Fusion that will be a covered street with lush landscaping and water features, complete with alfresco sidewalk cafes,” Lee said.

Each of the shop offices will be equipped with a private lift.

On the residential property front, IOI Properties is moving into luxury condominium developments in Kuala Lumpur with its maiden project, The Verandas Condominiums in Jalan Ampang. Work will start by year-end, to be completed in two years.

The 16-storey condominium block on 3.8 acres will have 152 residences, including 10 penthouses. The intermediate units are from 2,200 to 2,700 sq ft while the penthouses will be from 3,300 to 4,200 sq ft.

“The residences will be designed in a single banked layout with all units having a direct view of the Kuala Lumpur City Centre. There will be large landscaped areas with multiple pools and an elevated clubhouse,” Lee said.

In Penang, IOI Properties' parent IOI Corp Bhd will be developing a four-acre site in Tanjong Tokong, Penang, into a 35-storey condominium block.

Fettes Residence will comprise 191 condominiums with average built-up of 1,800 to 2,000 sq ft that will be priced from RM380 per sq ft. There are also four penthouses of 4,000 sq ft. Most of the condominium units have sea views.

Lee said IOI Properties also had three ongoing township projects in Kulai and Segamat in Johor, and was planning to launch a 250-acre project in Kempas.

By The Star (by Angie Ng)

Things Loke great for Peter and his angels

His 35 year old company has come a long way since making clay bricks

PETER'S Holdings Sdn Bhd is such a low-profile developer that many people may not know that this 35-year-old company has ongoing and future projects in Selangor, Perak and Johor worth an estimated gross development value (GDV) of RM1.25bil.

Another interesting aspect of this company is that its founder Peter Loke Kwok Seong is blessed with three talented children, all daughters, who are helping him run the company.

The eldest, Andrea Loke, who is the senior general manager, joined the company in 1994 after being called to the Malaysian Bar and is in charge of legal matters while Joanne, the second daughter, is in charge of sales and administration. Her forte is in graphic design.

Peter Loke Kwok Seong and his daughters (from right) Andrea, Joanne and Katrina with a model of the Papillon Desahill Condominium.

The youngest, Katrina, is the business development manager and the last to join the company.

The Loke sisters, who studied in Britain, have learnt the ropes from their father, having trudged through construction sites when they were young.

They are now busy with their maiden medium-high-end project, Papillion Desahill condominium in Taman Desa (off Jalan Klang Lama) in Kuala Lumpur. The project, soft launched a month ago, has a GDV of RM180mil.

CIMB-Mapletree Real Estate Fund 1 (a private estate fund managed by CIMB-Maple Management Sdn Bhd) is the synergistic partner via a collaborative arrangement.

The condominium comprises two luxurious wings with 15 levels each and 225 units on 4.5 acres. Units come in four designs, with 1,312 to 2,059 sq ft built-up areas and priced from RM480,000 to RM800,000 (or around RM400 per sq ft).

The condominium comprises two wings with 15 levels each and 225 units on 4.5 acres.

The 16 highest units are the duplex penthouses with 2,498 to 3,661 sq ft built-up areas and priced RM1.1mil to RM1.6mil each.

The condominium, atop a hill, offers buyers a good view of either KLCC or Petaling Jaya and it boasts an infinity pool, tai chi garden, jacuzzi pool, gymnasium, sun deck, children's play area and multi-purpose court.

With three women running the daily operations, it is not surprising that they have also given their “feminine” touches to the concept as well as interior design of the show unit at the site.

Show unit: Lounge and dining area.

“When we designed the condo, we looked at it from the woman's point of view. For instance, women like large kitchens and practical layout,” said Andrea, adding that the maid's room with her own bathroom was tucked away for added privacy.

High-end: Solid timber flooring in all bedrooms, air-conditioning units, quality and branded bathroom fittings, among other features.

Each unit has spacious living and dining areas to comply with the Papillon's “family” concept.

Although the Papillon is a medium-high-end project, it boasts high-end features like solid timber flooring of bungalow standards in all bedrooms, air-conditioning units, quality and branded bathroom fittings, 8ft-high doors and an intercom system linked to the security centre.

An intercom system links each unit to the security centre.

Each unit comes with two covered car park bays.

“We are extremely busy these days. We are still developing Petaling Utama, where we have completed some 4,000 units of mixed low and low-medium-cost apartments on 150 acres of leasehold land. This project has another five years to go,” said Katrina.

She said the company prided itself in being able to create new and value-added products for its purchasers.

“Value creation is very important to us. For example, we increased the size of the normal low-cost apartment from 650 sq ft to 700 sq ft for our RM42,000 low-cost apartments in Petaling Utama that also come with an en suite for the master bedroom,” she said.

Peter's Holdings began as a manufacturer of clay bricks before moving up into property development and construction and then embarked on salvaging of abandoned housing schemes in Perak and Kuala Lumpur.

Its foray into the Kuala Lumpur market happened when Bank Negara sought its help to revive 150 acres of prime land in Petaling Utama that has today become a viable township.

The company's other projects include Taman Seri Berembang in Port Klang, Green Acres in Ipoh, Zeus Business Park in Johor, and a medium-cost apartment project in Balakong.

With his “angels” running the show, Peter Loke said he was spending more time to look for property development opportunities in China.

“I am very happy with them (daughters). Now I can retire,” he said with a smile.

By The Star (by S.C.Cheah)

Developers zoom in on Taman Desa

With better road infrastructure, more projects are coming up

Taman Desa, off Jalan Klang Lama, is experiencing a mini property boom as developers zoom into this much-sought-after neighbourhood in Kuala Lumpur.

The completion of the New Pantai Expressway (NPE) a few years ago has greatly eased the traffic flow at Jalan Klang Lama as motorists can bypass most parts of the widened Jalan Klang Lama.

The NPE links Bangsar and the KL-Seremban Highway to Bandar Sunway, Subang Jaya and beyond.

Taman Desa residents can also access the KLIA-Putrajaya Highway via the Seremban Highway or at Kuchai Lama.

With the new highway linkages, residents of Taman Desa and its adjacent areas, including Seputeh and Taman Abadi, can gain access to any part of the Klang Valley and many amenities are now within their reach.

Over the past few years, several new developments have come up or are being launched in Taman Desa, an established neighbourhood that was developed by Faber Union about 30 years ago.

Faber Union started off with 110 semi-detached houses and 120 bungalow lots in 1976 at Taman Desa. It later built 578 units of two-storey terrace house in 1978.

It then went into building apartments such as the Faber Ria (402 units) in 1985, Faber Heights (370 units) in 1989, Faber Indah (130 units) in 1989, Danau Idaman (659 units) in 1996, Danau Impian (500 units), Danau Permai (512 units), Tiara Faber (320 units) in 2000, and Taratak Muhibbah (1,064 units) in 2000.

It also developed the Casa Desa condominium (410 units) and Danau Villa (64 units of three-storey semi-detached link home) in 2007.

Taman Desa started off as an upmarket housing area with semi-detached houses and bungalow lots many years ago. It has retained its middle-to-upper-class image, thanks to new developments that reflect this upmarket image.

One of the newcomers is the Papillon Desahill condominium by Zeus-TNB Properties Sdn Bhd, an affiliate of Peter's Holdings Sdn Bhd.

The 4.5-acre freehold project comprises 225 units with built-up areas from 1,312 to 2,039 sq ft and duplex units from 2,498 to 3,661 sq ft (from RM365 per sq ft). It is next to the Faber Heights condominium and very near Jalan Klang Lama.

Two other new projects are the Danau Villa three-storey semi-detached link homes, a joint venture between Faber Union and Kuala Lumpur City Hall and the Desa Ria, a 104-unit freehold condo by the UOA Group. It boasts larger units of 2,200 sq ft and was launched in 2006. The units were priced around RM300 per sq ft when it was launched but they are now selling from RM385 to RM445 per sq ft.

Taman Desa's other housing schemes such as Seputeh and Taman Abadi are a mix of landed and high-rise apartments.

There are some 7,000 units of apartment and condominium in Taman Desa alone. These include completed projects like the OBD Garden (260 units), Desa Villa (340 units), Desa Murni (500 units), Bukit Desa (252 units), Desa Ria (104 units), Abadi Villa condo (330 units) and Abadi Indah apartments (754 units).

There are about 5,500 housing units in Taman Desa, Taman Bukit Desa, Taman Danau Desa, Taman Desa Utama, Seputeh and Taman Abadi, with about 30,000 people staying in Taman Desa.

Facilities in Taman Desa include the Desa Water Park, Taman Desa Medical Centre, wet market, office towers at Faber Towers, shops in the Taman desa and Danau Desa commercial centres, two secondary schools and a primary school. A new school is being built near Desa Ria.

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said Taman Desa was a generally safe place to live as residents have their own security patrols. He said a number of tycoons also lived there.

Tang Chee Meng >> It is a good place to call home <<

“Taman Desa is one of those under-rated locations in the Klang Valley which is a very convenient place to stay.

“In the past, people were concerned about the notorious traffic congestion along Jalan Klang Lama, but today with the vast improvements in road infrastructure, Taman Desa, with its central and convenient location between KL and PJ, enjoys excellent connectivity and accessibility. It is a good place to call home,” he said.

Tang said Taman Desa had a good record of capital appreciation. He cited the case of a man who bought his first house, a double-storey terrace house, for only RM145,000 in 1989 and sold it in 1991 for RM181,000. Today it is worth RM560,000 toRM630,000. A similar house was priced at only RM70,000 to RM76,000 in 1978.

“The man bought his second house, a double-storey semi-detached house, in 1991 at RM265,000. Today, it is worth more than RM1mil.

“The house was going for only RM98,000 to RM113,000 in 1978 while the bungalows were going for RM140,000 to RM160,000. Today, the bungalows are worth RM1.8mil to RM2.5mil. Prices have never dropped,” he added.

By The Star (by S.C.Cheah)

Vasa sees better profit despite higher costs

Local laminated flooring producer and exporter Vasa International Sdn Bhd is calmly working out ways to overcome challenges arising from the US economic slowdown and rising raw material prices.

“There is no point complaining on negative issues all the time. Somehow we have to live with them,” said group managing director P.C. Tam. “We should find a way to overcome the problems and to mitigate their impact.”

P.C. Tam

The group has two wholly owned subsidiaries: Stalheim Industries Sdn Bhd which manufactures Inovar Floor brand wood-based laminated flooring, and Vasatech Sdn Bhd which produces low-pressure melamine paper for short-cycle press lamination.

Vasa also markets accessories related to laminated flooring like skirting boards and profiles. It sources these accessories from suppliers in Malaysia and China, and also imports some high-end accessories from Europe.

Vasa now exports 80% of its laminated flooring to about 30 countries.

Tam said the increasing prices of oil and raw materials had resulted in higher production and logistic costs.

Coupled with the weakening US dollar, these factors had pulled down the group's earnings in the past three years, he told StarBiz at Vasa's head office and plant in Batang Berjuntai, Selangor.

The group posted a net profit of RM4.8mil in 2005 and RM5.3mil in 2006, but the figure dropped to RM3mil last year.

Nevertheless, it has forecast a higher profit of about RM7mil this year, supported by an expansion in production capacity and better sales of high-end products.

“We have plans to enlarge our production capacity as the increase in capacity usage will lower the unit cost. Then we will be able to compete in the international market with quality products at reasonable prices.”

Currently, Stalheim sources most of the raw materials like water-resistant high-density hardwood fibreboard from East Malaysia and China. Its plant, which runs at about 70% capacity, produces about 6 million sq m of laminated flooring annually. Tam said it would increase production to 90% capacity this year.

As for Vasatech, its factory is running on full capacity, producing 22 million sq m of melamine paper annually. The group has invested RM11mil to buy another automated machine from Europe that is expected to arrive this month.

It will increase annual production to 40 million sq m of melamine paper by year-end.

“This is to meet the rising demand from customers and for our own consumption (Stalheim),” Tam said, adding that 60% of the melamine paper output was currently supplied to customers in the furniture-manufacturing sector.

Seeking non-price-sensitive markets
Tam said the laminated flooring market was growing tremendously.

Although production costs had gone up, Tam said the group had segmented its products so that it could get a higher margin from the high-end products and at the same time, not lose out in terms of volume from the medium-range products.

“So, it is quite important for us to sell more high-end products and look for markets that are not so price-sensitive.

“We have to move to the markets where people are looking for quality products, more reliable service, professional approach, consistent quality and forward product development.”

Tam said there were always such customers in countries like Japan, Australia and South Africa.

Mitigating the US dollar impact
The challenge now for the group is to continue widening the range of Inovar Floor products to maintain or improve its profitability.

Tam believes strong branding efforts played an important role in marketing its products. Vasa now exports 80% of its laminated flooring to about 30 countries, including Thailand, South Africa, the US, Singapore, Middle East, South America and Japan.

He said currency fluctuations should not be the excuse for a company delivery of good performance.

“We try not to pass on the cost increase to customers. We try to switch to other currencies (in pricing) instead of just US dollars,” he said, adding that it was now also selling products in Australian dollar, Singapore dollar and Japanese yen.

Vasa started exporting Inovar Floor laminated floorings to Japan five years ago and Japan is now a very important market for the group.

“We are quite proud of this achievement – that we are able to sell to Japan – because our quality products have managed to meet the requirements of the Japanese customers and achieved the Japan Industrial Standard for Super E0 (formaldehyde emission level) certification.”

Inovar Floor laminated flooring is also being supplied to IKEA Japan for the use of IKEA outlets in the Asia-Pacific. The group targets to sell 30,000 sq m of flooring to the IKEA chain in Asia-Pacific this year.

“We will continue to develop new products and more designs and try to be competitive and ahead of market trends. We want to be the innovator, not the follower,” said Tam.

Improved domestic
Vasa does not want to miss out on the opportunities in the local market too. It wants to have a strong position in its own country.

Therefore, through marketing arm Inovar Resources Sdn Bhd, it started to place more emphasis on the local market three years ago. Domestic sales contribution has since risen from 5% to 20%.

“We realised that our quality products were gradually getting acceptance from the local consumers compared with those from China,” Tam said.

Currently, Inovar Floor products have about 90% share in the local property development market. Its customers include Gamuda, Sime UEP, Malton, Sunrise and Negara Properties.

Tam added that to further develop its business, the group would seek a public listing, perhaps in two years.

By The Star (by Rachael Kam)

Serenity seeks more Malaysian buyers for Phuket project

HIGH-END residential developer Serenity Development Group is looking to attract more Malaysian purchasers for its latest luxury development, Serenity Terraces in Phuket, Thailand.

The beachfront development, which comprised apartments, penthouses and villas, had already seen “encouraging” interest from Malaysian buyers, said development director Elad Kushnir.

“We look forward to attracting more Malaysians in the future,” he told a press conference recently.

Elad said that there was an increasing number of Malaysians with businesses in Thailand and more Malaysians were looking to invest in properties there.

The Serenity Terraces development project, which overlooks Chalong Bay, is 60% complete with about 30% of the units already sold, primarily to European purchasers, he said.

The development consists of 52 luxury residential units with a gross development value of US$30mil. Prices of the properties range from US$450,000 to US$1.2mil.

Green Heritage Group is the principal consultant for the project and provides full marketing and sales as well as development management for Serenity Terraces.

According to its chief operating officer and director Ramesh K. Hamal, purchasers are guaranteed great value in capital appreciation.

“As the project is located in Phuket, buyers are assured of great capital returns,” he said.

Also present at the press conference was reigning Formula One (F1) champion Kimi Raikkonen, one of the newest residents of Serenity Terraces.

By The Star (by Eugene Mahalingam)