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Thursday, May 8, 2008

UEM Land plans property trusts

UEM Land Sdn Bhd, the development unit of Malaysia's third biggest construction company, plans to start real estate investment trusts (REITs) and new projects as it prepares for a listing this year.

State-controlled UEM Land, whose Nusajaya commercial and residential project is Malaysia's largest, may also invest overseas from 2010 to emulate CapitaLand Ltd, Southeast Asia's largest property company, managing director Wan Abdullah Wan Ibrahim said yesterday.

"We aspire to be something of that size and that diversified," Wan Abdullah said in an interview in Kuala Lumpur, referring to Singapore-based CapitaLand.

"We even have initiatives like REITs on the table. We cannot rely on just Nusajaya to be our bread and butter."

UEM Land, controlled by UEM World Bhd, is due to start trading on Bursa Malaysia by September in a revamp to attract investors to the group's real estate unit. The firm wants to cut its reliance on Nusajaya, a 9,712ha government-backed development that provides almost all its income.

Malaysia's ruling coalition, in power since independence in 1957, suffered its worst election result in March. Some analysts raised concerns that the weakened government may slow state-backed projects.

"Investors still fear for some reason that projects may not be deployed as strongly as they would have been," said Vincent Khoo, head of research at Aseambankers Malaysia Bhd. "There's enough uncertainty on this project."

Shares of UEM World have dropped 19 per cent since the plan to list UEM Land was announced on February 15, and are down 16 per cent this year. The company has a market value of RM4.6 billion.

Under the UEM reorganisation, investors in UEM World will receive 125 UEM Land shares and RM125.8 in cash for every 100 UEM World shares held.

Wan Abdullah said UEM Land plans to sign an agreement next month to buy a 41ha plot in Selangor, for about RM110 million. The company is also considering buying land in Kuala Lumpur and Penang, he said.

Any overseas investments by UEM Land will be made in 2010 "at the earliest", Wan Abdullah said. Even with other investments in Malaysia, Nusajaya will provide about 80 per cent of the company's profit, he said.

"For the next two years, we have to focus on the delivery on Nusajaya," he said. "But that does not mean that we totally hide ourselves from global opportunities."

By Bloomberg

Plantation REIT profit more than doubles in Q1

With CPO prices averaging at RM3,020 per tonne for the quarter under review, the fund had surpassed its reference price of RM1,500 per tonne and the previous corresponding quarter's RM1,904 per tonne.

PETALING JAYA: Malaysia's only plantation real estate investment trust, Al-Hadharah Boustead REIT, yesterday reported a 111% jump in its net profit to RM16.7mil for the first quarter ended March 31.

In comparison, it recorded net profit of RM7.9mil in the previous corresponding period, Boustead REIT Managers Sdn Bhd said in a statement.

Earnings per share rose as well to RM3.55 compared with RM1.99 previously.

The statement said the primary contributing factor for the strong performance was a direct impact of robust crude palm oil (CPO) prices, which contributed positively to higher performance-based rental income for the quarter under review.

Boustead REIT Managers chairman Tan Sri Lodin Wok Kamaruddin said: “With the full realisation of the injection of the Lepan Kabu plantation, our fund has delivered strong results for the first quarter.

“We are confident with the momentum in CPO prices, Malaysia’s only Islamic plantation REIT will continue to appeal to discerning investors.”

With CPO prices averaging at RM3,020 per tonne for the quarter under review, the fund had surpassed its reference price of RM1,500 per tonne and the previous corresponding quarter's RM1,904 per tonne, the statement added.

Meanwhile, Hektar REIT reported a lower first quarter net profit of RM8.7mil against RM11.2mil in the previous corresponding quarter while revenue fell to RM18.8mil from RM23.6mil.

In a statement yesterday, Hektar Asset Management Sdn Bhd said the net profit of RM8.7mil was 22% lower than the RM11.2mil achieved during the comparable period that comprised four months (December 2006 to March 2007).

For comparison purposes, if the net profit for December 2006 were excluded from the tabulation for the comparable period, the adjusted net profit would be RM8.2mil.

“Therefore, the net profit would be 6% higher than the adjusted RM8.2mil. The increase is mainly due to improvement in rental rates,” the statement added.

Accordingly, the revenue of RM23.6mil for the four months was also not a clean comparison with the first three months' revenue of RM18.8mil, it said.

By The Star