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Wednesday, May 14, 2008

Quill boosts REIT portfolio with Tesco Penang buy

QUILL Capita Trust (QCT), a real estate investment trust (REIT), expects the acquisition of Tesco Penang to increase its real estate portfolio to RM796 million from RM662 million as at March 31, 2008.

Chan Say Yeong, chief executive officer of Quill Capital Managment Sdn Bhd which manages QCT, said it had surpassed its asset size target of RM750 million for the current financial year.

QCT acquired the Tesco building located on freehold land in Jelutong, Penang, for RM132 million from IJM Properties Sdn Bhd.

“This yield accretive acquisition is expected to provide an initial net property yield of 6.3 per cent when the acquisition is completed,” Chan said.

The acquisition is expected to be completed by the fourth quarter of this year, he told reporters after signing the sale and purchase agreement with IJM Properties in Kuala Lumpur today.

Also present at the event were IJM Corporation Bhd’s chief executive officer and managing director Datuk Krishnan Tan and IJM Properties’ managing director Teh Kean Ming.

Chan said the purchase of Tesco is expected to be funded by a combination of internally generated funds and debts.

If funded 100 per cent by debt, current gearing is expected to increase to about 38 per cent from 25 per cent, he said.

“With our gearing still below the 50 per cent threshold allowed for REITs, QCT is still able to grow via debt financing, which enables us to react faster when acquisition opportunities come by,” he added.

QCT acquired Wisma Technip and part of Plaza Mont’ Kiara last year for RM215 million and subsequently in the first quarter of this year, it bought three additional properties for RM94.5 million.

On further asset acquisitions the year, Chan said QCT would explore the possibility of more REITs in the future.

He said it would also continue to diversify into other states like Johor as it had already expanded into Penang, Cyberjaya and the Klang Valley.

By Bernama

Boustead bids to buy out property arm

MALAYSIAN industrial and financial group Boustead Holdings is making a buyout offer on its property subsidiary, Boustead Properties, Boustead said on today.

The companies today called a halt to trading in their shares.

Boustead Holdings was last traded at RM5.25 and Boustead Properties at RM4.64, a 9.7 percent discount to the per share value of its net assets of RM5.14.

Boustead Holdings owns 65.01 per cent of Boustead Properties, which has a market value of about RM1.18 billion.

Malaysian armed forces fund Lembaga Tabung Angkatan Tentera is the largest shareholder of Boustead Holdings, with a 57.5 per cent stake.

By Reuters Malaysia wins award

IPROPERTY.COM Malaysia has been named the country’s Best Property Portal in the CNBC Asia Pacific Property Awards 2008.

Other property portals within the extensive network, including Singapore, Hong Kong and the Philippines, also clinched similar awards for their respective markets. is the first company to have ever won an award in four countries for the same category at the International Property Awards.

The CNBC Asia Pacific Property Awards is part of the International Property Awards, which began in 1995 in London.

By Bernama

Hypermarket set to boost GUH’s business

PENANG: The set-up of a hypermarket in Seremban is expected to boost the property business of GUH Holdings Bhd in Negri Sembilan.

Tesco Stores (M) Sdn Bhd recently got the go-ahead from the relevant authorities to proceed with its plans for a new outlet in Taman Bukit Kepayang, which is only about 3km to the Seremban town centre.

To date GUH has developed and sold 1,300 landed residential and commercial properties on a 270-acre site in Taman Bukit Kepayang.

GUH managing director Datuk Kenneth H’ng said the hypermarket would be located on 12.5 acres, which GUH sold to Tesco Stores a year ago.

Datuk Kenneth H’ng

Construction works on the hypermarket, which will occupy more than 40% of the site, is scheduled to start in early 2009.

“The project will boost the sales of the residential and commercial landed properties in Taman Bukit Kepayang,” H'ng told StarBiz.

He said the group planned to launch some 590 units of landed residential and commercial properties on a 57-acre site with an estimated gross sales value of RM200mil this year. “After this launch, the group will still have a land bank of 170 acres for development in the area,” he said.

H’ng said GUH expected the contribution from its property sector to increase to about 10% this year from 2% last year.

On its printed circuit board (PCB) manufacturing business, H'ng said the group would spend RM43mil to expand its operations in China's Suzhou and Penang.

“The capital expenditure is to increase the production of multi-layer PCBs and to introduce a new range of silver-through-hole PCBs, which are used in a higher range of audio and visual electronic consumer products,” he said.

The expansion exercise, to be completed by year-end, would enable the facilities in Penang and Suzhou to increase their annual production by 75%, H’ng added.

For the financial year ended Dec 31 2007, the group posted pre-tax profit of RM35.5mil on revenue of RM298mil, compared with RM21.5mil and RM274mil respectively a year earlier.

By The Star (by David Tan)

Sime unit confident on take-up for Denai Alam

SHAH ALAM: Sime Darby Property Bhd is confident of selling the remaining 160 units of two-storey terrace houses in Denai Alam mixed-development project by year-end, a company spokesman said yesterday.

The units, part of the seven phases on 1,000 acres of freehold land next to Bukit Jelutong, are priced from RM290,000 to RM470,000.

Sime Darby Property has also launched two-storey shop lots in Denai Alam in January worth about RM750,000 each, of which 23 have been taken up.

“To date, 714 units comprising both residential and commercial properties with a gross development value (GDV) of RM220mil have been sold in Denai Alam,'' the spokesman said.

He added that most of the buyers were from Shah Alam.

”We are looking to attract buyers from outside Shah Alam,” he said.

The Denai Alam project, to be completed latest by 2020, has a GDV of RM2bil.

The township is accessible via the Guthrie Corridor Expressway, North-South Highway and North Klang Valley Expressway.

“It is also just 15 minutes from the PJ Golden Triangle,” the spokesman said.

Sime Darby Property will organise a carnival this Saturday and Sunday at Denai Alam to attract buyers.

The next residential phase is scheduled for launch in January.

By The Star