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Wednesday, July 30, 2008

i-City to offer world class data centres

KUALA LUMPUR: I-Bhd's i-City project in Shah Alam will be the first commercial development in Malaysia to boast of three world class data centres following a strategic alliance forged with Kompakar Inc Bhd, an integrated solutions provider, yesterday.

At the agreement signing, Kompakar chief executive officer Dr Ahmad Fikri Hussein said Kompakar had decided to become one of the anchor tenants in Selangor’s first digital city.

“We are investing and will be providing world class data centre service expertise in the design, set up, management and operation of the data centre equipment and facilities.”

I-Bhd deputy chief executive officer Lim Boon Siong said I-Bhd planned to invest close to RM50mil in the data centres based on the company's business plan and projected demand.

Deputy CEO Lim Boon Siong speaking at the signing ceremony between i-Bhd and Kompakar on Tuesday. - Starpic by Ong Soon Hin

The data centres comprise a 3,500 sq ft hosting facility catering to local small and medium enterprises and two 70,000 sq ft world-class Tier 4 purpose-built ready data centre catering to global information and communications technology companies.

Al Raji Bank (Malaysia) agreed Monday to purchase 36 units of i-City Cybercentre 1 office suites for RM95mil.

The purchase accounted for 80% of the units completed in the first phase of i-City, a RM2bil township on 72 acres in Section 7, Shah Alam.

On the balance units that I-Bhd said it would hold for local information and communications technology companies, director Eu Hong Chew said long-term investment had always been part of the company's commitment to nurture the information technology industry.

In terms of investor response, Lim said besides the Middle East, i-City had received tremendous response from Australia and South Korea, although talks were still at the preliminary stage.

By The Star

I-Berhad aims to sell i-City office towers by year-end

PROPERTY developer I-Berhad is confident of selling off two office towers at its RM2 billion i-City intelligent township in Shah Alam by the end of this year, following its first en bloc sale on Wednesday.

Al Rajhi Bank (Malaysia) Bhd is buying 36 units of the i-City Cybercentre 1 office suites, one of the many components of i-City, for RM95 million.

"This is the first en bloc sale for i-City. We are in discussions with interested parties from Asia-Pacific and the Middle East and with serious buyers from South Korea and Australia.

"We are optimistic of closing one or two new deals by December," I-Berhad deputy chief officer Lim Boon Siong told Business Times after the signing of a mutual cooperation agreement with Kompakar Group in Kuala Lumpur yesterday.

The signing was witnessed by Minister of Housing and Local Government Datuk Seri Ong Ka Chuan.

Lim said Al Rajhi has indicated that it would invest in other properties within i-City, but did not elaborate.

The 30.28ha i-City, which started in mid-2007, will feature 12 office towers, a 1 million-sq ft shopping mall, office suites, three data centres, a five-star and a boutique hotel, and two blocks of 24-storey residences.

The integrated development, which is envisaged to be Selangor's knowledge hub and in the league of the Dubai Internet City in the United Arab Emirates, will offer 7.5 million sq ft of built-up when completed in 2012.

For the hotels, Lim said the company was still talking to international hotel chains with strong roots in Malaysia to operate the properties.

They include Starwood, Hilton, Marriott and Accor.

"We are at the design and discussion stage now. We hope to finalise the details by year end and launch the hotels in the first half of 2009," Lim said, adding that it was also in talks with an international hospital group that wants to operate at i-City.

Lim also said the data centres are one of the key selling points for i-City.

"Ours is the first township in this region to have world-class Tier 4 ready data centres connected to the whole 30.28ha real estate via giga-speed fibre-optics network. This is one piece of the puzzle that will enhance i-City's value," Lim said.

Earlier, Kompakar chief executive officer Dr Ahmad Fikri Hussein told reporters that the company and I-Berhad will invest RM100 million to build and equip the data centres, which consists of a 3,500 sq ft hosting facility for the local small and medium enterprises, and two 70,000-sq ft Tier 4 ready data centres.

The hosting facility and the first data centre are already operating, while the second data centre will be ready by 2011.

By New Straits Times (by Sharen Kaur)

Talam expects to complete stalled projects by year-end

Property developer Talam Corp Bhd expects three of its stalled projects, namely Ukay Perdana, Bandar Bukit Beruntung and a part of Taman Puncak Jalil - worth a combined RM400 million - to be completed by the end of the year.

The high-rise units at Taman Puncak Jalil will be completed next year.

Talam executive director Chua Kim Lan said this would mean that 7,500 units of the 13,000 stalled units would be completed.

She added that 10 per cent of its total stalled units are unsold.

Meanwhile, the company is putting its 92ha development in Gombak on hold, despite obtaining the necessary approval, due to the high prices of construction materials and dampening consumer sentiment.

"At this point of time, it is useless to start any project considering that contractors are giving quotations on a weekly basis because of the increasing price of construction materials," she said.

In March 2007, Mutual Prosperous Sdn Bhd entered into a joint venture with IJM Properties Sdn Bhd to use Cekap Tropikal Sdn Bhd as the 50:50 joint venture company to takeover the development of the area known as Sierra Selayang.

The land, which is owned by three of Talam's subsidiaries, has an estimated gross development value of RM1 billion.

Talam director Loy Boon Chen said work on the project will start once the prices have stabilised.

Loy is an IJM Corp Bhd nominee to the board of Talam.

Chua said the increasing price of steel and cement has not affected the completion of its stalled projects as most of them are past the structural phase where steel bars and cement are used the most.

She said Talam has seen an increase of less than 10 per cent in costs, when the industry average is around 20 per cent.

Chua also said the company is looking at developing industrial lots at the remaining 1,200ha undeveloped land in Bandar Bukit Beruntung and a 64ha in Puchong.

She added that Talam will no longer focus on developing medium-cost housing.

Talam expects to be back in the black this year with the implementation of its regularisation plan, which was approved by the Securities Commission in April this year.

The company will table the plan to the shareholders at an extraordinary general meeting to be held by the end of August.

By New Straits Times (by Presenna Nambiar)

Talam plans to deliver 7,000 homes

PETALING JAYA: Talam Corp Bhd intends to deliver 7,000 homes to buyers this year, says executive director Chua Kim Lan.

“So far, we have delivered 700 units and more are expected in the next few months,” she told StarBiz in a telephone interview yesterday.

Next year, it will deliver another 6,000 homes, bringing the total gross development value (GDV) of the 13,000 units to almost RM1bil.

As the main structure works of the properties are already completed, the developer is marginally affected by the rise in steel prices.

“The impact to total construction cost is less than 10%,” Chua said, adding that this, however, would eat into its margins.

The company’s Serenia Gardens project, which is a joint venture with IJM Corp Bhd, was launched earlier this year while the launch of Sierra Selayang, also with IJM, has been put on hold until next year.

The two projects have a combined GDV of RM1.5bil.

Serenia Gardens, which is on a 90-acre leasehold land in Ulu Kelang, involves the development of 225 terraced houses in the first phase and 104 units in the second.

Sierra Selayang, on the other hand, comprises semi-detached houses and bungalows.

Talam was considering to convert some of its residential land bank in Puchong and Bukit Beruntung to industrial status given that the Selangor government was keen on removing backyard factories. Chua said: “There may be launches of industrial properties early next year.”

By The Star - StarBiz

Mah Sing Q2 net profit surges

Mah Sing Group Bhd has reported an 82 per cent increase in net profit to RM37.3 million for its second quarter ended June 30, 2008, compared with RM20.4 million in the previous corresponding period.

In a statement today, the company attributed the improvement in net profit on revenue of RM195.4 million to contribution from both residential and commercial projects.

Among the projects are the Grade A office of The Icon Jalan Tun Razak and residential projects included Hijauan Residence, Aman Perdana, Kemuning Residence and Perdana Residence as well as Sierra Perdana and Austin Perdana.

Mah Sing said having practised financial prudence and steadily charting strong growth, the group is in a good position for acquisitions with a cash pile of RM145.76 million and low gearing of 0.14 times as at June 30, 2008.

The group will be looking into Sabah and Sarawak and any potential growth locations overseas, apart from its established three hotspots in Peninsular Malaysia for more land acquisitions, it said.

Mah Sing has 14 projects in prime locations, of which nine in the Klang Valley, four in Iskandar Malaysia, Johor Baru, and one in Penang.

“We can hunt for good land for our expansion, but we are not in a hurry as we have sufficient locked-in sales to last us for another two years,” said group managing director and chief executive officer Datuk Seri Leong Hoy Kum.

“Our undeveloped land bank of 574 acres worth RM2.9 billion will be developed over the next five to seven years,” he said.

By Bernama

Luxury property portal launched Group launched a new property portal, ( specifically for Asian luxury properties.

The new portal provides useful information and tips on buying and financing properties in selected countries, aside from showcasing the best new developments, resale and rental properties.

By Bernama

Europlus plans RM3b bond sale to fund road project

KUMPULAN Europlus Bhd plans to issue bonds worth about RM3 billion early next year to finance the West Coast Expressway (WCE) project.

Its president and chief executive Tan Sri Chan Ah Chye said the company is working with a local rating agency to raise the money quickly.

Ratings for the debt paper are expected to be finalised within a few weeks and the bonds will be put on sale six months thereafter.

The fund-raising exercise has been delayed because of changes made to the alignment of the road and costing, among other factors.

The 216km expressway will cost about RM4.6 billion. It will stretch from Banting in Selangor to Taiping in Perak.

Chan said that construction cost alone is about RM3.6 billion.

Europlus' 64.2 per cent-owned subsidiary, Konsortium LPB Sdn Bhd (KLPB), was awarded the expressway concession on May 25 last year.

Under the concession agreement, KLPB will build the expressway and can collect toll for 33 years before handing the road back to the government.

The consortium's other shareholders are Kumpulan Darul Ehsan Bhd (20 per cent) and Perak Corp Bhd (20 per cent).

Chan expects the expressway project to begin works next year and to take three years to complete.

Currently, Europlus has two major contracts in hand, including the West Coast Expressway and the Canal City, which has been delayed after the Barisan Nasional lost Selangor in the general election.

Chan said the group will soon meet the new state government to finalise new terms and conditions for the project to continue.

Europlus and construction firm IJM Corp Bhd are joint-venture partners in the project.

On its outlook for the year ending January 31 2009, Chan said he expects Europlus to make a profit now that associate company Talam Corp Bhd's proposed regularisation plan has been approved by the authorities.

In the financial year ended Jan-uary 31 2008, Europlus posted net loss of RM4.5 million on turnover of RM41.1 million.

By New Straits Times (by Rupinder Singh)

Builders: Give 6 months lead time before raising prices

Master Builders Association Malaysia (MBAM) has voiced its unhappiness over the proposed increase in cement prices by Lafarge Malayan Cement Sdn Bhd, saying it will hurt the construction industry badly.

The price increase will take effect on August 1.

MBAM president Ng Kee Leen said that cement manufacturers should consider providing the industry with at least six months lead time to allow contractors to allocate provisions to mitigate their cost.

"This announcement has trapped contractors in a cycle of continuous price increase," he said in a statement released in Kuala Lumpur yesterday.

Ng pointed out that it will be yet another increase in just two months, after the government lifted the ceiling price of cement on June 5.

Cement prices rose 22 per cent from the RM10.90 under government price control to RM13.20 immediately after liberalisation.

Lafarge's proposed increase will add another RM1 per 50kg to RM14.25, or 30 per cent.

"As it is, contractors are facing difficulties in controlling the cost of projects and committing to timely delivery. The cement price increase will add more pressure to cash-flow problems," Ng said.

"MBAM would like to caution that many small- and medium-sized contractors from Classes D, E and F may be forced to stop work, delay work, or even abandon projects as a result of the steep price increase of essential building materials, especially steel bars and cement.

"The government should take cognisance of this and act quickly."

Ng said that although the cement liberalisation was announced last month, difficulties remained over its import because of logistics.

He added that the scenario was the same for steel bars, of which prices had risen to an all-time high of RM4,100 a tonne.

The liberalisation process of steel bars has not been well implemented, Ng said.

"It has been difficult to import steel bars into the country and there are still cases of Customs Department officers demanding approved permits and/or imposing import duty on certain steel bars."

MBAM will also ask that all items under HS Code 7214, all steel bars for construction use under Code 7214 and all steel bars for construction use under Codes MS 146 and BS 4449 be fully liberalised.

"If the situation continues to worsen, the government should step in and implement 15 per cent export tax on steel bars and billets, cement and clinkers, and ban exports of steel bars and clinkers to ensure building material manufacturers meet the needs of the local construction industry first.

"The 10 per cent import tax on cement should be waived as well because contractors and developers are already facing great pricing pressure, and any form of import tax relief will be appreciated," Ng said.

By New Straits Times

Cement price set to rise further

The average selling price of local cement is now on par with cement prices in the Asia-Pacific which range from RM273 to RM277 per tonne.

On Monday, Lafarge Malayan Cement Bhd, which controls about 40% of the local cement market, said it would raise the prices of its cement products by RM20 per tonne from Aug 1.

Industry analysts said the latest price increase would translate into a new average selling price of about RM277 per tonne for cement in Malaysia.

They expect further hikes in cement price this year, given strong indications that other local players like YTL Cement Bhd, Tasek Cement Bhd and Cement Industries of Malaysia Bhd would soon emulate Lafarge's move to offset the recent 26% rise in electricity tariff and 63% jump in diesel price.

An analyst with a foreign brokerage told StarBiz the local cement industry was an oligopoly dominated by four large players.

“I expect cement price to continue to increase based on the high price of coal – the major source of energy for cement operators.

“Cement constitutes about 50% of raw material costs or about 20% of total construction cost. I believe every 10% increase in cement price will increase property development cost by 2%,” the analyst said.

CIMB Research said in its report yesterday that the price hike by Lafarge was not surprising, as cement companies would have to raise their selling prices following higher operational costs.

Despite the anticipated slowdown in construction, the research unit said it did not expect the price increase to dent demand in the short term.

However, CIMB Research is cautious on the long-term outlook, given delays in construction projects and a slowdown in the property sector.

It also expects a lower risk of imports due to the revised selling price that is on par with regional prices.

This will give local suppliers an edge over imports in terms of storage, quality and shelf life of the products.

Aseambankers said Lafarge's revised selling price of about RM275 per tonne in August was comparable to the price of efficient cement producers in Thailand at an estimated RM273 per tonne.

It said the quantum of Lafarge's price hike was sufficient to offset its higher cost but “the main concern is on the price of coal”.

Coal spot price based on Australia's Newcastle Index has averaged US$180 per tonne currently compared with US$70 per tonne last year.

Lafarge is set to review its cement prices by year-end. “They will possibly be higher if prices of raw materials and fuel continue to escalate,” said the research unit.

By The Star - StarBiz

Export ban on steel bars, cement?

KUALA LUMPUR: Is a temporary ban on export of steel bars and cement on the cards?

It looks like the Government may impose some kind of restrictions to help the construction industry overcome the rising prices of these and other raw materials.

Housing and Local Government Minister Datuk Seri Ong Ka Chuan said he had received lots of requests from developers and contractors that there should be restrictions to control the outflow of essential items.

Ong said his ministry was talking with the Finance Ministry on the matter and was mindful of the fact that priority should be given to meet local demand.

However, for the moment, he felt it would be better to allow the free market system to determine the supply and demand of steel bars and cement, while the Government closely monitors escalating prices and their supplies.

“But if the situation persists, I think the Government has to intervene. We have to make it our priority to the local industries rather than overseas market even if it (the raw material) fetches a better price,” he said.

Ong said this at a press conference after witnessing the signing of a mutual co-operation agreement between I-Bhd and Kompakar Group for the development of a Tier 4 Ready Data Centre in the RM2bil i-City integrated commercial-cum-residential development in Shah Alam.

Meanwhile, the Master Builders Association Malaysia (MBAM) has warned that many medium and small contractors from Class D, E and F may be forced to stop, delay or even abandon projects as a result of the steep price hike of essential building materials.

“The Government should act quickly. If the situation continues to worsen, it should step in and ban export of steel bars and clinkers to ensure building materials manufacturers would supply the needs of the local construction industry first,” said MBAM president Ng Kee Leen.

He said the 10% import tax for cement should be waived as well because contractors and developers were facing great pricing pressure and any form of import tax relief would be appreciated.

Although cement liberalisation was announced on June 5, Ng said the import of cement was still not in place due to logistics.

With liberalisation, cement price had continued to rise from RM10.90 during the government price control period to RM13.20 (22% up) immediately after liberalisation and now another increase by RM1, or 30%, per 50kg bag to RM14.25.

In the case of steel bars, he said, although it was liberalised on May 12, the liberalisation process was not well implemented.

“It was difficult to import steel bars and there are still cases of Customs Department officers demanding for approved permits and/or impose import duty on certain steel bars.

“MBAM hopes the Government would simplify (matters) by making clear the process to import steel bars for local construction use,” he added.

MBAM also requested cement and steel bar manufacturers to provide at least six months' lead time for any announcement on price increase to enable contractors to allocate provisions to mitigate their cost.

Ng said the Lafarge Malayan Cement Bhd's announcement on price increase for cement effective Aug 1 would hurt the construction industry.

Meanwhile, ready-mixed concrete operators in Selangor and Kuala Lumpur yesterday announced revised prices for ready-mixed concrete of various grades by 5.2% to 6.2% effective Aug 1.

By The Star