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Wednesday, July 9, 2008

I-Berhad seeks foreign investors for mall project

I-BERHAD (I-Bhd) is in talks with several foreign institutional investors to set up a joint venture to develop the shopping complex component of the i-City project's second phase in Shah Alam, Selangor.

I-Bhd hopes to set up a 70:30 joint venture (JV), with the foreign institution holding the majority, to build an international class shopping complex which has an estimated gross development value (GDV) of RM500 million.

"We will set up a JV and sell the land to the JV partner. We will then develop it together and let our partner manage the shopping complex," I-Bhd deputy chief executive officer Lim Boon Siong said.

"We are looking at shopping centre partners who have the expertise in managing shopping centres for this joint venture," he said.

Lim, in a recent press conference in Sydney, Australia, said that I-Bhd could make an announcement on the development in the third quarter of 2008.

"The mall will have one million square feet gross lettable area which is comparable to the Mid Valley Mega Mall in Kuala Lumpur," he said.

i-City, Lim said, is creating an entire new community which is IT advanced and is a lifestyle hub. As such, a mall which services this community is required.

To be ready in 2011, the mall will cater to about 30,000 office population within the i-City township and 50,000 when the entire project is completed in 2012.

I-Bhd believes that the mall will be successful as there is no such shopping destination between Shah Alam and Klang. The catchment for the mall, based on a 15 km radius, is estimated to be around 1.5 million.

On the corporate towers within i-City, which are now at the planning stage, Lim said the company has received enquiries from institutional investors from Korea, the Middle East and Singapore.

"They are interested in buying either one tower or to manage it as a business park," he said.

By New Straits Times (by Vasantha Ganesan)

I-Berhad eyes RM20m profit this year

I-BERHAD (I-Bhd), the first private initiative to be awarded MSC Cybercentre status, is looking to post RM20 million in profit in the current financial year ending December 31 2008, following the sale of the first phase of the i-City project.

The company - which recently phased out its electrical appliances business and moved into property development - last year posted a mere RM1.95 million in net profit on the back of RM4.07 million revenue.

"We are in talks with various parties, a couple of which are in the advance stage, for the sale of the first phase. We expect to formalise a deal for the sale by the third quarter of 2008," deputy chief executive officer Lim Boon Siong said at a press conference in Sydney, Australia, last week.

"If everything goes according to plan, we will definitely show better results," he said.
According to Lim, I-Bhd hopes to sell Phase 1, which consists of the 44-unit CityPark Cybercentre Office Suites, for about between RM400 and RM500 per sq ft. This would fetch the 300,000 sq ft building a price of between RM120 million and RM150 million.

He added that I-Bhd should get between RM15 million and RM20 million from the sale as profit. Once the building has been sold, I-Bhd wants to lease back the property so that it can control the tenant mix.

I-Bhd is building an intelligent city on 30.38ha of land in Shah Alam. The project, which will be completed in 2012, will have an estimated 7.5 million sq ft in built-up.

Asked if the the gross development value (GDV) of i-City would change given rising raw material costs, Lim said it would be able to make a better gauge in six months time.

"Initially our GDV was projected at RM1.5 billion. Subsequently, as our project got more exciting the GDV was estimated at RM2 billion. With the anticipated increases, our GDV could go up by 20 per cent to 30 per cent," he said.

This means the i-City GDV could be as high as RM2.6 billion for the components which include a shopping complex, office towers, serviced residences and hotels.

The first phase is expected to be fully operational by September.

By The Star (By Vasantha Ganesan)

I-Bhd plans to sell i-City en bloc

SYDNEY: I-Bhd is close to clinching an en bloc sale of the first phase of its 72-acre freehold i-City integrated commercial project in Shah Alam.

Deputy chief executive officer Lim Boon Siong told reporters the company was close to signing a deal comprising 44 units of three- and five-storey shop-offices.

Lim Boon Siong

“We're in an advanced stage of negotiation and will be making an announcement in the next few weeks,” Lim said.

“It would be on a sale-and-leaseback option as the company would prefer to have control of the tenant mix”, he added.

The RM2bil project, scheduled for completion in 2012, will comprise a shopping mall, two corporate towers, shop- offices, serviced apartments, data centres, a five-star hotel and an innovation centre.

It will be equipped with seamless wireless access, integrated information and communications technology and building networks, and multimedia and collaborative tools.

He estimated that the en bloc sale would bring RM15mil to RM20mil in net profit to the company. “We believe we can command at least 20% to 30% premium or RM400 to RM500 per sq ft for the shop-offices,” Lim added.

The company signed an agreement last week with Servcorp Ltd, the world's second largest managed office operator, in which Servcorp and 65%-owned subsidiary i-Office2 Sdn Bhd would provide state-of-the -art concierge services.

I-Bhd has also partnered with US-based Cisco Systems Inc for the Cisco Connected Real Estate that will be used as the vehicle to provide the services.

Lim said the company was also negotiating to sell the project's mall component on an en bloc basis.

“We’ll announce towards the end of the third quarter our joint venture with a foreign shopping operator, that is one of the largest in Asia, which will also be managing the mall.”

Lim said recurring income from property management and fees from i-Office2 would form 20% to 25% of revenue going forward.

By The Star (by Fintan Ng)

KLCC Property Holdings positive on earnings

KUALA LUMPUR: Integrated real estate developer KLCC Property Holdings Bhd is optimistic of its earnings prospect despite challenges in the current economy.

According to group chief executive officer Hashim Wahir, its outlook remains positive, as the demand for office space in prime areas of the city centre remains strong and stable.

Kashim Wahir

A major part (46%) of the company's revenue is derived from property investment and office rental, followed by hotel property (21%), retail centre (27%) and management services (6%), he said after the company AGM yesterday.

“For the hotel operations we need to be innovative, focus more on marketing and sustain occupancy. For example, Suria KLCC is registering 99% occupancy. "

Hashim disclosed that ExxonMobil was renewing its lease agreement with KLCC Property's wholly owned subsidiary Arena Johan for Menara ExxonMobil. The management expects a 3% increase in rental revenue every three years.

“The traffic volume at the Suria KLCC currently stands at 40 million people per year. KLCC Property has yet to see any impact from the decline in domestic demand and consumer spending,” Hashim said.

Asked on KLCC Property's acquisition plans, Hashim said its hands were full with Lot C development in the KLCC precinct, which was under the substructure phase, and Lot D1, which is in the planning stage, but it did not discount the possibility in the future.

Plans for Lot D1are expected to be finalised in one to two years.

By The Star

KLCC Property bullish on growth

KLCC Property Holdings Bhd is optimistic of positive growth in the current financial year ending March 2009 because about 70 per cent of its recurring rental revenue is fixed under three-year leases.

Group chief executive officer Hashim Wahir said KLCC Property has locked in a recurring rental revenue, which is revised upwards once every three years at a rental growth rate of three per cent.

"Despite a challenging business environment in the year ahead, we remain positive because our RM9 billion property assets are located in prime areas in the middle of the Kuala Lumpur city centre.

"Demand for offices in Kuala Lumpur remains strong and revenue from office property is stable. KLCC remains the preferred address for leading multinational corporations," Hashim told reporters in Kuala Lumpur yesterday after its shareholders' meeting.

KLCC Property, one of the world's largest integrated real estate developments, raked in a net profit of RM442 million in financial year ended March 2008 on the back of RM843 million revenue.

Office space contributes to 46 per cent of its total revenue, hotel 21 per cent, retail 27 per cent and management services six per cent.

All of its office space such as at Petronas Twin Towers and Menara Dayabumi is fully occupied, and retail space at Suria KLCC is 99 per cent occupied. Suria KLCC recorded 40 million visitors last year.

By New Straits Times (by Zaidi Isham Ismail)

Mudajaya accepts Tune Hotels job

MUDAJAYA Group Bhd via its unit, Mudajaya Corp Bhd, has accepted a letter of award from Tune Hotels Sdn Bhd for the design, construction and completion of a Low-Cost Hotel Building at the Low-Cost Carrier Terminal in Sepang for RM22.25 million.

In a filing to Bursa Malaysia, Mudajaya said it has commenced construction works. The project is expected to be completed by mid-February 2009.

It said the project is also expected to contribute positively to the earnings and net assets of the company for the financial years ending December 31, 2008 and 2009.

By New Straits Times

Banks agree to restructure housing loan payment

The government has been discussing with banks in Malaysia on restructuring the payment plans for housing loans in order to help reduce the burden of borrowers.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the banks welcomed the government’s suggestion and that he had been informed by the banks offering housing loans of their move to restructure their housing loans.

The lower repayment on loans will ease the burden of the borrowers, he said at the winding up session of the debate on the mid-term review of the Ninth Malaysia Plan at Dewan Rakyat today.

On Bank Negara Malaysia (BNM)’s decision to allow banks issuing credit cards to stop the interest free period payment on the purchase of retail items, Nor Mohamed said BNM was introducing a tier pricing structure to encourage credit card users to be more careful and smart in their spending.

He said three types of tier pricing structures had been introduced namely a mechanism which allows credit card holders to enjoy a lower finance charge of 15 per cent a year if they are able to make all their credit card payments on time, while the second tier charges 17 per cent if the users pay 10 months out of the 12 months on time and under the third tier 18 per cent will be charged if the credit card holder frequently fails to pay back on time.

“This tier pricing structure will help to reduce the cost of credit card usage compared with the previous system which charged 18 per cent,” he said.

With this system, Nor Mohamed said the previous offer of 20 days repayment period without interest charge enjoyed by all credit card holders automatically without taking into account the monthly credit card payment, will be discontinued.

However, he said he had meetings with all the banks and had asked them to review the matter and that they had agreed to reviewing it.

By Bernama

Materials at 'friendly' prices: Builders to know next week

The government will tell contractors next week where they can get construction materials like cement and steel at reasonable prices.

Works Minister Datuk Mohd Zin Mohamed said a committee, set up in May to find solutions to the escalating cost of building materials, will come up with the recommendations.

"I have asked the committee, which is headed by the ministry's secretary general (Datuk Dr Abdul Munit Kasmin) to prepare a report in a week," he said after officiating MTD's new corporate office building in Batu Caves, Selangor, yesterday.

He was asked when the committee, which also comprised the Construction Industry Development Board, the Public Works Department, the Malaysian Highway Authority and Master Builders Association Malaysia, will submit its recommendations.

"It will not take a long time for them to come out with the recommendations as it is easier to get data on the materials such as the sources and prices.

"If there is a need for a change of policy and (to) produce a Cabinet paper on the matter, I will present those recommendations to the Cabinet," he said.

Mohd Zin said he will also try to meet International Trade and Industry Minister Tan Sri Muhyiddin Mohd Yassin and Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad to discuss further action to tackle the problems.

"I also had a dialogue with industry players last week, discussing the various issues plaguing them," he said.

Mohd Zin said it is important to further grow the country's construction industry to sustain economic growth.

"Currently, the construction industry is growing at 5.2 per cent, which accounted for 6.1 per cent of the country's gross domestic product," he said.

Despite the lifting of ceiling prices for cement and steel, Mohd Zin said there seems to be a continued shortage of these materials, which has resulted in higher prices.

By New Straits Times