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Monday, July 14, 2008

New office buildings unlikely on Penang island due to glut

A model of the Penang Times Square

There is unlikely to be new purpose-built office building projects on the island in the near future in view of the glut of office space and high construction cost.

On the island, there is an overhang of 2.8 million sq ft of office space with occupancy rate of 74%, compared with about 72% in 2005.

The total available purpose-built office space in George Town as at end last year was about 11 million sq ft, a large portion of which is in purpose-built office buildings developed 10 to 15 years ago.

“These properties are not in demand because they lack information technology (IT) infrastructure and facilities and are not well maintained,” Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat told StarBiz.

Developers were also unwilling to launch more of such buildings due to the high construction cost, he added.

“The construction cost and land value for per square foot of commercial space is about RM210, while the selling price per sq ft of the commercial space is RM250 to RM300, which is less than the 30% profit margins generally looked for by developer,” he said.

He said current rentals of conventional purpose-built office space on the island ranged between RM1.50 and RM2.50 per sq ft while the modern purpose-built office buildings with IT features command a rental of above RM3 per sq ft.

The modern purpose-built office building projects being developed on the island were now in Bayan Baru. They include the recently completed SunTech and the IJM headquarters in Metro-East.

The 23-storey RM100mil SunTech by Emerald Capital Group is almost 100% sold. “The building has the latest IT-MSC infrastructure and facilities. The rental is RM2.60 to RM4.20 per sq ft,” he said.

Teoh said demand for pre-war properties was slightly stronger as there was limited supply of such properties for commercial use.

“Many of these houses are also highly sought after because they are strategically located on main roads,” he added.

The present value of a pre-war property in George Town is around RM600 per sq ft. “A 3,200 sq ft pre-war property on Campbell Street was recently sold for about RM2mil,” he said.

On the retail sector that also faces a glut (occupancy rate is 70% compared with 72% in 2005), Henry Butcher Malaysia (retail) managing director Tan Hai Hsin said there was 13.9 million sq ft of retail space, of which 70% was occupied while new supply stood at 1.2 million sq ft.

The new retail space include such projects as Jusco in Bandar Perda, Penang Times Square, D'Piazza, Wikiworld, Mutiara Parade, Farlim Megamall, Gurney Plaza Phase 2, and Gurney Paragon.

“The oversupply situation has not improved since 2005 as the market is still tough,” Tan said.

“The rising cost of living and declining purchasing power have worsened the situation. Many Penangites will visit shopping centres during weekends, but their expenditures are expected to drop in the next few months,” he said.

Tan said ground floor rentals ranged between RM9.50 per sq ft and RM30 per sq ft for malls in prime locations such as the Queensbay Mall and Gurney Plaza. Meanwhile, those in the heart of George Town ranged between RM4 per sq ft and RM28 per sq ft.

“The average rental rate has remained more or less the same over the last few years, “ he added.

Meanwhile, Real Estate Housing & Developers' Association (Penang) chairman Datuk Jerry Chan said the state government should work with the private sector to revive George Town by having new business themes for different precincts in the inner city.

The state government could offer incentives for businesses like traditional medicine, souvenir or local produce and designating certain streets in George Town for them.

“This type of planning would help absorb the existing commercial properties in the inner city and enhance George Town’s appeal as a tourist hub,” he said.

“Sustainable development, in the form of environmentally friendly policies, is key towards unlocking the value of commercial properties in George Town,” he added.

C.A. Lim & Co proprietor Lim Chien Aun said there was also a need for more parking facilities, improved drainage system to overcome flash flood, and quality public transport.

By The Star (by David Tan)

Mulpha Land plans four new high-end projects

MULPHA Land Bhd will be launching four new high-end projects in Kuala Lumpur over the next two years with a total gross development value (GDV) of RM500mil.

They include three residential projects in Ampang, Bangsar, and Bukit Tunku and an office tower in Jalan Sultan Ismail.

Mulpha International Bhd executive chairman Lee Seng Huang said the very high-end Bukit Tunku development on 2.5-acre freehold land, would have bungalows priced around RM15mil each.

Lee Seng Huang

“We will build only eight bungalows of 10,000 sq ft to 12,000 sq ft built-up area. We plan to launch the project in the fourth quarter of this year or next year. It will be a special product. We have not given it a name yet as we want to get everything right first,” Lee told StarBiz.

As for the Bangsar project (opposite Tivoli Villas), he said only seven units of three-storey bungalows priced at RM9mil to RM10mil would be built in the gated and guarded community.

It will have a lot size of 7,576 sq ft to 8,012 sq ft and built-up area from 8,510 sq ft to 9,588 sq ft.

“This is about S$4mil which probably can’t buy you a penthouse in Singapore. Malaysian property is relatively cheaper than other countries,” he said, adding that each bungalow would have a unique design.

The 1.54-acre freehold, gated and guarded development with a Green Architecture Concept, is located at Jalan Medang Tanduk in Bangsar. The main commercial centre of Bangsar Baru, Bangsar Village and Bangsar Shopping Complex are within 500 metres radius.

Features will include open Garden Spine with water features, individual lap pool with koi pond, and private glass lift for each unit with four to six car parking bays.

Each bungalow will also have a solar heater, jacuzzi, water filter, AV room, WiFi, chauffeur’s room, workshop and a garden yard/roof storage areas among others.

Another upmarket development is the Raintree Residence, opposite the Raintree Club at Jalan Wickham in the diplomatic enclave of Ampang Hilir and U-Thant. Kuala Lumpur City Centre is about 3km away.

It will have 12 units: four units of five bedroom duplex penthouses (3,691 sq ft) priced at RM4.4mil each or RM1,200 psf, and eight units of four-bedroom apartments (2,000sq ft) priced at RM2mil each or RM1,000 psf.

Each unit comes with a Raintree Club membership.

Lifts will open to the private foyer of each unit that will be fully fitted with interior built-ins and selected electrical appliances. Standard units are given two parking bays each while penthouses get four bays each.

Facilities include a swimming pool, two security guardhouses, gymnasium and two lifts serving each unit.

Lee said the project, to be launched soon, would target people who did not want to live in a big house after their children had grown up and moved elsewhere.

Mulpha will also build a Class “A” Green office building called 12 Jalan Sultan Ismail. The 23-storey building with four basement-parking levels has a lettable area of about 270,000 sq ft. It fronts Jalan Sultan Ismail and also Lorong Perak (opposite Shangri-La Hotel).

Lee said the land, bought in 1996 for about RM1,000 psf, had probably doubled in value now. The GDV is RM350mil.

“We are holding it for rental income. Renowned New York architects Kohn Pedersen Fox who designed the Shanghai World Financial Centre, The Pinnacle in Britain, and Roppongi Hills Mori Tower in Tokyo is the designer. It will be the first Kohn Pedersen Fox building in Malaysia,” he said, adding that there was still good demand for quality office space in Kuala Lumpur

Lee, who spends most of his time abroad to seek out the “vast opportunity overseas” said Malaysia faced stiff competition from other countries and needed to do things faster with less red-tape.

Although he shares the same concern with other industry players over rising fuel prices, Lee believes that Mulpha’s products would be able to sell as they are very niche and the company is resilient.

On its 474ha award-winning Sanctuary Cove on Queensland’s Gold Coast, Lee said sales had been very good and the whole area was one of the fastest growing in the region.

He said there were still 600 to 700 bungalow lots to sell. Some of the lots would be sold with houses.

“We have not started on the apartments. There is a village with a community centre. The hotel zone will take at least another 10 years to develop,” he added. Sanctuary Cove achieved A$80mil (about RM250mil) sales last year.

An artist’s impression of the Pinggiran Bayou Village Homes in Leisure Farm, Johor

Mulpha Land Bhd is the property arm of the Mulpha group and is listed on the second board of Bursa Malaysia. Its flagship Leisure Farm Resort in Johor has won many property awards including two FIABCI Malaysian Chapter awards.

By The Star - StarBiz - (by S.C.Cheah)

I-Bhd takes intelligent city project to next level

If you were a new kid on the block but eager to show that you have what it takes to turn vision into reality, what would you do?

For I-Bhd, it got world renowned architect Jon Jerde to design its RM2bil i-City in Shah Alam, entered into strategic partnerships with Intel, Telekom Malaysia and Universiti Industri Selangor, won an MSC status for the freehold commercial township and positioned itself as an ICT-based developer.

It showed its sound finances by completing Phase 1 of its Cybercentre offices in i-City under a “build-then-sell” concept. A party is going to buy the offices en bloc while an international shopping centre operator is looking at developing the mall in i-City.

Come September, tenants will be moving into its 44 Cybercentre offices.

The public-listed company recently hosted a 20-member media study tour to Sydney to visit the offices of its latest partners, Servcorp (world's second largest managed serviced office operator) and Cisco (worldwide leader in networking).

The aim was to show the advanced technology to be offered by Servcorp and Cisco in i-City, dubbed the No. 1 Technology City in the region. It also showed the Concierge services, wireless 10mbps and the One Network technology powered by Cisco, to be provided in i-City.

After a six-day trip, I must say I was “blown away” not so much by riding a Harley-Davidson over the Sydney Harbour Bridge, sliding down a giant sand dune in Port Stephens, having lunch in the observation deck of Sydney Tower nor even dining in The Great Cask Hall of Hope Estate in Hunter Valley.

Indeed, all the five-star experience as part of I-Bhd's branding exercise, including jetting in the A380, dolphin watching or hand-feeding sharks, probably threw some of us off our feet.

What blew me over was the IT experience at Servcorp and Cisco that showcased cutting edge IT that can be applied to offices and the homes.

For example, at Servcorp, the media saw how its Concierge service could offer human and technical help to firms at a much affordable cost.

As I-Bhd chief innovation officer Ricky Lim said with i-City's MSC status, tenants could enjoy many benefits including super broadband with Gigabit connectivity, no import duties for multimedia equipment, 15 minutes emergency response, no restriction on recruitment of foreign workers, and 10-years tax exemption.

Lim Boon Siong (right) exchanging documents with Marcus Moufarrige

“We are also providing 100% power backup supply in 15 seconds. All buildings in i-City will be connected,” he said. It would also have an integrated data centre (under construction), online portal for one bill payment, concierge, plug-and-play services, redundant broadband and Cisco Unified Communications.

I-Bhd and Servcorp signed an agreement during the trip for Servcorp to provide the concierge service, the first of its kind in Malaysia.

The media was also shown Cisco's latest telepresence technology where reporters talked to a virtual life-size manager from Cisco Singapore in an identical boardroom as the one in Sydney.

We also visited Australia's most intelligent strata office building, the new 10,000 sq m, seven-level Nexus Norwest in Norwest Business Park. Developed by Capital Corp with Office Squared (a Servcorp subsidiary), it has an integrated managed network and advanced Protocol (IP) telephony system from Cisco.

Interviews with several tenants indicated a high level of satisfaction.

Bet Choice Corpo CEO Mark Morrissey praised the fast-speed broadband for his horse-betting business.

For Jacqui Gibbs, director of a small marketing firm, relocating her business from home in the city to Norwest enhanced her firm's image, saved her travelling expenses and time, enabled her to tap into a pool of clients in the business park and run her business more efficiently.

As Office Squared CEO Marcus Moufarrige said organisations could save 30% to 55% per-workstation costs by having a pre-installed infrastructure and a managed network.

This trip showed that real estate is not just brick and mortar but to compete, developers must differentiate and IT can add value to property and is the way to go.

“I-City is on track. We are creating a special niche by investing in technology that can add value to our property and benefit our tenants and purchasers,” said I-Bhd deputy chief executive officer Lim Boon Siong.

Like Nexus Norwest, i-City is about doing business in a faster, cheaper and simpler way and relocating to a new growth suburb has its advantages.

The difference between the two is that Nexus Norwest is merely a third the size of i-City's Phase 1. The 72-acre i-City will be a connected “intelligent city” that will take the next generation of business space to another level.

By The Star

Contractors see risk of abandoned projects

The construction industry wants the Government to resolve the current crisis immediately. Otherwise, its players may be forced to abandon their projects, leading to an entire collapse of the industry.

Escalating building material prices, which had increased by an average of 25% this year, and a serious shortage of workers would be a double blow to lead to this collapse.

Master Builders Association Malaysia (MBAM) president Ng Kee Leen in issuing this warning said the Government must stabilise the high material prices, in particular steel and cement, which were crucial for the construction industry.

Ng Kee Lean

MBAM, he said, had proposed to the Government to address the high prices of building material prices but no action had been taken so far.

“There is only so much that the MBAM can do. If this (rising costs) persists, the whole industry may collapse,” he said.

Ng said the industry also faced a serious shortage of workers. “In 2006, about 30,000 professionals from the construction sector left for Singapore to seek employment,” he said.

Meanwhile, MBAM secretary-general Yap Yoke Keong urged the Government to remove the 10% import tax on cement and impose export taxes to ensure sufficient domestic supply for the local construction industry.

“The MBAM submitted a memorandum to the relevant government agencies asking them to remove the import tax as it is not economically viable,” he said.

He added that many countries, including China and India, had imposed export taxes to help their own industry.

“We are surprised why such a practice has not been implemented in Malaysia,” he said, adding that political instability due to the outcome of this year's general elections had also affected the construction and property sectors.

“Because of the political situation, projects in certain states are not proceeding and many local developments face the risk of being scrapped.”

Yap said many construction players, especially those with sound financial standing, might have to go abroad as the local construction sector was shrinking.

Bina Puri Holdings Bhd chief operating officer Gan Hwa Kian said many contractors were cautious when tendering for projects on concerns that building material prices might continue to escalate.

He said many projects would be abandoned, as contractors could not afford to complete them. “The Government must step in and address this,” he said.

Al-Ambia Sdn Bhd executive director Tang Juang Yew said high material prices had eroded the profit margins of most construction companies.

“Construction cost in the last two months has increased between 18% and 22%. Developers will raise their prices and at the end of the day, it is the purchasers who will suffer.”

By The Star

Investors divided on timing of purchase

Workers pour concrete at a construction site in Kuala Lumpur. Some experts believe property prices are determined by demand and not by raw material prices – Reuters

With inflation expected to have surged to 6% in June from 3.8% in May and looming recession, investors are unsure whether to enter the property market.

S.K. Brothers Realty (M) Sdn Bhd chief executive officer Charlie Chan said political concerns, high cost of living and rising inflation were affecting the real estate sector.

“Investors and purchasers are divided over what is the right thing to do. Some people believe that the time is right to buy for fear that prices will escalate further while some feel that now is the right time to sell,” he said.

Chan said while there were still a lot of uncertainties, he was optimistic that property in the RM150,000 to RM400,000 bracket would still experience brisk sales.

“Transactions within the Kuala Lumpur city centre should remain steady and relatively unaffected,” he said, adding that due to the fuel price hike, people were more likely to buy property that was either within or close to the city.

“We see an increase in demand for property closest to the city as transportation cost has become an issue after the oil price increase and more people will be looking to live closer to their workplace,” he said.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz had said last week that she expected inflation to hit 6% in June following the increases in fuel prices and that domestic inflation was expected to rise until early next year.

She had said the inflationary pressure was also following the increase in electricity tariffs from July 1, with tariffs up to 18% for households and an average of 26% for some commercial and industry users.

DTZ Nawawi Tie Leung Sdn Bhd investment executive director Brian Koh believes sentiment towards the property sector is generally negative and properties costing below RM250,000 would be most affected.

He said those planning to buy houses below RM250,000 might hesitate as their household income had shrunk due to high food and fuel prices.

Reapfield Properties Sdn Bhd president David Ong did not foresee a drastic fall in property transactions, as there would always be some people who would still buy while others might remain cautious.

“Property is one of the best investments in time of inflation. Any time is a good time to buy,” he said.

According to Ong, the high cost of living would impact property within the low-end and medium-end range.

However, sales of high-end properties should continue to remain stable as the wealthier investors were unaffected by the high cost of living, especially with the recent fuel price hike.

Ong said there were also “pros and cons” on purchasing residential properties within the city as it might help to minimise transportation cost but properties in such locations were also too expensive for the average city worker.

On property prices, PPC International Sdn Bhd executive director Thiruselvam Arumugam said they were determined by demand and not by raw material prices.

“Transactions are slowing down because of the cautious approach by investors and buyers. Developers can increase the property prices but the demand will just not be there.

“This will result in an overhang and eventually, prices will have to come down,” he said.

On the market outlook, Thiruselvam said the industrial and manufacturing sectors would be most affected whereas the commercial and residential sectors were still in good demand despite the current situation.

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said as a result of weaker market conditions, the take-up rate for homes could drop in 2008 as buyers took a more cautious stance.

“Confidence in the economic climate is vital for a buoyant property market. People will buy property if they see that there is room for capital appreciation,” he said, adding that investors and purchasers were more likely to invest in established locations where demand was strong.

“Popular and prime locations like Bangsar, Damansara Heights, Mont Kiara, Bandar Utama and Mutiara Damansara will continue to receive strong interests as investors can still enjoy decent yields while waiting for the market to improve.”

By The Star (by Angie Ng and Eugene Mahalingam)

Strategies to survive the property slowdown

A filepic shows the crowd at a property fair in Penang. The high cost environment will be here to stay for a while unless global demand and speculative activities for some of the key commodities such as oil and steel slow down

Mounting inflationary pressures following the sharp rise in the price of construction materials, oil and food are creating much anxiety among the property and construction industry fraternity.

To mitigate the adverse impact of the rising cost and softening market sentiment, developers are resorting to more ingenuous strategies and measures to ride out the tough times.

The threat of stagflation – high inflation without demand growth – is also looming and developers are faced with rising costs and slower take-up of their property products.

The big jump in the price of key construction materials, especially steel and cement by between 30% and 40% in the last six months, has resulted in slower progress of work on site.

It looks like the high cost environment will be here to stay for a while unless global demand and speculative activities for some of the key commodities such as oil and steel slow down.

According to SP Setia Bhd group managing director and chief executive officer Tan Sri Liew Kee Sin, the company has incorporated cost escalation clauses into fixed-price contracts for a few key construction materials (steel and cement) to alleviate cost pressures on contractors while avoiding over-pricing of overall contracts.

“We will also take advantage of our strong financial position to offer to purchase construction materials on behalf of our subcontractors to enable works to progress expeditiously on site.

“By doing bulk material purchase, we can enjoy the economies of scale and command better bargaining power with suppliers,” Liew told StarBiz.

Concurring with Liew, Sunway City Bhd managing director Ngian Siew Siong said: “To lessen the impact and to help contractors contain costs, we encourage them to buy materials in advance and have enough materials in stock so that there is a lesser impact on rising costs.

“We also leverage on our financial capability and pay our contractors in advance to buy their materials. In the long run, we want to ensure that all parties are affected as little as possible.”

Mah Sing Group Bhd president and group chief executive Datuk Sri Leong Hoy Kum said competitive funding costs and good payment terms for land acquisitions have helped the company to keep costs in check.

“We have set up a specialized material sourcing team which works together with suppliers and contractors to ensure the best pricing and bulk purchase discounts,” he added.

SP Setia's Liew said the company has restructured and streamlined its operations to strive for higher cost efficiency and productivity improvements.

“We are also expediting the provision of key infrastructure and amenities in the company's various townships and improve our product offerings to achieve greater value creation for customers.

“This will facilitate justifiable price increases to be passed on to purchasers,” Liew said.

Meanwhile, Glomac Bhd group managing director Datuk F.D. Iskandar has called for more proactive measures to address the country's high prices of construction materials and attract greater interest in real estate.

He said tax discrepancy between the import and export of steel has contributed to the high price of steel in the country. In the last six months, the price of steel bars jumped 45% to RM3,000 per tonne.

“While imported steel products are subjected to a 20% tax, steel products bound for the export market are not taxable.

“Political will and more concerted efforts are necessary to address the steel issue. More priority should be placed on local needs. It will certainly help if both import and export of steel are subjected to the same quantum of tax rates,” Iskandar said.

On measures to promote greater demand for the country's real estate, he said concerted efforts to attract more multinational corporations to set up regional offices in the country would create demand for a broad section of properties, including office space and residences.

“Malaysia My Second Home (MM2H) programme has great potential to attract high net worth and other potential foreigners to invest in the property market.

“However, to reap its full potential, the programme has to come under the purview of the Prime Minister's Department and get full co-operation from all the other agencies,” he said.

Another area that offers great potential is turning Malaysia into a reputable Islamic financial hub to attract the huge reserve of “oil money” from big institutions and investors in the Middle East.

“There is growing competition for these investments from other neighbouring countries and Malaysia should leverage on its position as a model Islamic country to attract more such funds,” he said.

By The Star (by Angie Ng and Eugene Mahalingam)

Y&Y upbeat on returns from Shamelin Heights

Y&Y PROPERTY Development Sdn Bhd is confident of returns from its RM150 million Shamelin Heights Business Park in Cheras, Kuala Lumpur, as it is the only low-density industrial property in the area.

In fact, Singaporean institutional funds have approached to buy the park from the company but it’s not selling for now.

The company plans to lease the properties to industrial players and multinational firms, said Y&Y sales and marketing manager Mike Hue.

“We will have better bargaining power with the institutional investors for a REIT (real estate investment trust) when the business park is fully tenanted with good recurring income,” Hue told Business Times in an interview.

The project encompasses 30 units of three-storey semi-detached corporate industrial buildings and a three-storey standalone industrial bungalow on 5.04 hectares of freehold land in Taman Shamelin Perkasa.

Each unit has a built-up area of 8,500 sq ft to 20,400 sq ft except for the bungalow, which offers 7,800 sq ft.

“Land is scarce in Kuala Lumpur and cost has gone up. Industrial properties are limited in the market and under City Hall’s Kuala Lumpur 2020 City Plan, there will be no new area for industrial projects.

We believe we will benefit from this,” he added.

He also said the project will not be affected by rising raw material costs as it is half way developed.

Some 15 buildings have been constructed while 16 more will be ready for occupation by early 2009.

Shamelin Heights’ joint exclusive leasing agent BT Properties principal Billy Tan said the buildings are suitable for service centres, storage, warehouse and corporate offices, making it ideal for logistics, especially under rising fuel and operational costs.

The buildings are available for rent with monthly rates starting from RM18,800 to RM28,000.

Other industrial properties in the area are being leased at RM20,000 and above, Tan said.

About 15 units will have textile firms, a halal food processing company and a mattress maker, as tenants, among others.

“Shamelin Heights is not only a guarded business park. All tenants will have their own loading and parking bays,” he said.

The low-profile Y&Y is owned by the Yong family. It started as a textile manufacturer, trader and garment retailer in the 1980s. The company then diversified into property development in the 1990s.

By New Straits Times (by Sharen Kaur)

Opportunities in high-end segment

Mass townships such as Setia Alam that are equipped with all the elements for healthy living, learning, work and play will become more sought

Although the increase in the price of petrol and escalating cost of living has affected sentiment in the property market, especially for the lower to medium-priced property, there are still pockets of opportunities to be tapped.

Developers said housing products priced at less than RM300,000 a unit now take more than nine months to be fully taken up while those priced between RM300,000 and RM800,000 take about six months to a year.

However, demand for houses priced at more than RM1mil remains good and these high-end units usually take only a week to be fully taken up.

According to Glomac Bhd group managing director Datuk F.D. Iskandar, since the 30% rise in construction cost and 40% fuel hike in the past six months, developers of medium-range residential properties priced between RM250,000 and RM300,000 were the worst hit.

“This is because 60% to 70% of the country's population belong to the middle class. Potential buyers have turned cautious since the rising inflation and they have changed their priorities to lower their financial commitments.

“With interest rates expected to start rising in the coming months to curb rising inflationary pressure, market sentiment is expected to soften further for the lower-to-medium property sector.”

On sustaining interest for properties in the Kuala Lumpur City Centre (KLCC) area, Iskandar said given the competitive pricing of residences around the KLCC compared with other global cities, investors saw good upside potential for these properties and the response had been good.

Concurring with Iskandar, SP Setia Bhd group managing director Tan Sri Liew Kee Sin said higher-end property buyers were more resilient and recession-proof.

“While buyers in the medium-range market comprised mainly end users now, high-end investors are driven by the opportunity to invest in property as a hedge against rising inflation.

“Those who are serious investors always have an eye for premium properties at attractive entry price to enjoy good capital appreciation potential or rental yields,” Liew said.

He foresees that the fuel price hike would result in more pronounced demand for properties in areas that provide integrated amenities in a single location.

“Mass townships such as Setia Alam that are equipped with all the elements for healthy living, learning, work and play will become more sought-after, as residents and businesses find it more cost-effective to move into well-connected suburban townships with main highway arteries,” Liew said.

Mah Sing Group Bhd president Datuk Sri Leong Hoy Kum said developers should look into offering good value products to help ease the people’s burden.

To suit the needs of the current times, Mah Sing is redesigning its property offerings which has given rise to new trendy design elements such as the use of windows extension to promote cross ventilation and lower electricity consumption.

Leong said innovative and cost efficient designs that embrace practicality and sustainability were important considerations for house buyers these days. “Ecologically friendly and passive, low energy designs will make their way into homes,” he added.

Sunway City Bhd managing director Ngian Siew Siong said the property market was getting more competitive and newer properties with facilities that promote quality lifestyle, well-designed and sustainable products, as well as safe environment would be much sought after.

“By offering value innovation in our product offerings and consistent delivery of quality products and services, we aim to set new benchmarks in new growth markets,” Ngian said.

Gamuda Land Sdn Bhd managing director Chow Chee Wah said the company also placed much importance on sustainable living environment in its developments.

These include providing efficient road network systems with dedicated interchanges, reliable traffic management systems, modern facilities and commercial centres.

By The Star (by Angie Ng and Eugene Mahalingam)

MAHB to commercialise land around airports

MALAYSIA Airports Holdings Bhd (MAHB) plans to commercially utilise its reserved land around airports, especially the land around the KL International Airport (KLIA), with the view to increasing its income.

General Manager of MAB Land Management Muhd Najib Mohd Rawi said apart from being developed into oil palm and coconut plantations, the land will be also developed with commercial buildings to house offices and industries.

“We have seen in overseas, the land near airports have very high value due to the easily available transportation facility for the marketing of products,” he told reporters after launching the Smart Programme organised by MAB at the Pengkalan Chepa secondary school in Kota Baru today.

Muhd Najib said KLIA had reserved land amounting to 7,200 hectares with a large part of it planted with oil palm besides housing the Sepang International Circuit, hotels and commercial buildings.

“The available land will be commercialised based on the agreement set by KLIA given its increased value now,” he said.

As for the Sultan Abdul Aziz Subang Airport, it has been developed into the country’s aerospace centre besides being a training centre for flight trainings, as well as the repair centre for helicopters and aircraft and it also has several office buildings.

By Bernama

World-class luxury project on Pulau Banding

ECO-Tourism Destination: Sultan Azlan Shah (second from right) being briefed by Mustapha Kamal (right) on the herbal garden concept at the opening of the Belum rainforest resort and Pulau Banding Rainforest research centre recently.

MKN Group Sdn Bhd aims to put its mixed development project on Pulau Banding, Perak, on the map as an exclusive world-class luxury project.

The 10-year project, which has yet to be named as the proposed master plan, is pending local authority approval, would have a gross development value of at least RM600 million, said Tan Sri Mustapha Kamal Abu Bakar, who controls MKN.

The project, which will be gated, would have 45 homes with each unit sprawled over 1.6 to 2.4 hectares.

According to Mustapha Kamal, the houses will be worth US$3 million to US$5 million (RM9.75 million to RM16.25 million) each and MKN will target mainly foreign buyers.

The project will also have two five-star boutique resorts operating under international brands, 35.2ha for eco-tourism activities and a rest and recreation centre.

"MKN will minimise the felling and cutting of trees through professional planning during the development process. FRIM has done its audit on the island and we will adhere to all guidelines in environmental conservation and sustainability," Mustapha Kamal told Business Times during a site visit to the island recently.

He said the development was expensive because the properties will all be sited and positioned according to the natural ground terrain and alignment. This means the environment, consisting of endemic tree, exotic and endangered species, will not be destroyed.

Pulau Banding, covering an area of 250.4ha, is located 330km north of Kuala Lumpur and is situated on Temengor Lake. It is at the heart of the 130 million-year-old Belum-Temengor rainforest complex.

The rainforest complex comprises the Royal Belum State Park, the Gerik Forest Reserve and the Temengor forest reserve.

MKN's parent, the Emkay Group, had bought some 117.6ha from Fima Group for RM15.8 million in August last year, including the 27-room Banding Island Resort.

More than 120ha was awarded to Emkay by the Perak state government to transform the island into an eco-tourism destination.

By New Straits Times (by Sharen Kaur)

MK Land to be taken private?

Tan Sri Mustapha Kamal Abu Bakar, a co-founder of MK Land Holdings Bhd, may take the troubled property developer private as part of plans to turn it around, a source close to him said.

The businessman holds 47.4 per cent of MK Land and he has taken over the company's leadership as chief executive on June 25.

He replaces his partner Datuk P. Kasi who was redesignated as a non-executive director. Kasi holds 25.4 per cent of MK Land.

"As a majority stakeholder of MK Land, it's logical for him to come back and return the company to the black," the source said.

Mustapha could not be reached for comment.

However, it is learnt that he will study the company's situation before making major moves.

Contractors and consultants for some of MK Land's projects are expected to be called for a meeting soon.

"After leaving MK Land for so long, Mustapha Kamal wants to study the nitty-gritty of the company," the source said.

In May, MK Land asked its bondholders for permission to delay debt repayments by up to a year.

The company had in 2001 and 2002 issued two tranches of RM150 million each of serial bonds, with the final maturities due in August this year and September 2009.

MK Land said it was seeking an indulgence from bondholders to defer payments for a total of RM60 million to two separate sinking fund accounts.

By New Straits Times (by Sharen Kaur)