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Wednesday, August 20, 2008

Kerry: Demand for China properties 'robust'

KERRY Properties Ltd, the Hong Kong-based builder controlled by the family of Malaysian tycoon Robert Kuok, said demand for Chinese real estate is "robust," and will weather any damage from monetary policy controls.

"The tightening of credit has had a direct impact on investment sentiment," Kerry said in its earnings statement yesterday. "However, the group is of the view that given the strong underlying economic fundamentals and continued growth trends in China, the continual demand for real estate properties remains."

Net income was little changed at HK$2.48 billion (US$317 million) compared with HK$2.47 billion a year earlier, Kerry said. Revenue climbed 24 per cent. Profit excluding revaluation gains rose 12 per cent.

Kerry is expanding in mainland China. The developer and three partners last month said they are investing as much as 7.3 billion yuan (US$1.06 billion) in a project in the northern province of Hebei. Kerry will own 40 per cent of the project.

China in March announced plans to tighten controls on foreign investment in real estate to curb inflows of so-called "hot money." China also put in place other controls to help restrain inflation. The economy grew 10.1 per cent in the second quarter, the fourth consecutive slowdown.

Kerry, whose parent company also invests in media and logistics, owns office buildings and shopping malls in Hong Kong, where values have surged since 2005 as rents rose because of increased consumer spending.

Kerry said the Hong Kong property market eased "mildly" in the second quarter, though land supply shortages will underpin demand longer term.

Kuok, 84, was listed as Malaysia's richest man by Forbes Magazine in May. He and his family have estimated wealth of US$10 billion, according to Forbes.

By Bloomberg

Property mart expected to shake off lethargy next year

The sluggish property market could recover in six to nine months as the supply of materials stabilises and buyers adapt to the higher cost of living.

"In 2009, the cloud will be clearer," said Datuk Michael K.C. Yam, chairman of the Real Estate and Housing Developers Association (Rehda).

Buyers are cautious about buying property after Malaysia hiked the petrol price by 41 per cent in June. Some are having problems getting financing as banks are more strict when giving out loans due to the tougher economic outlook.

"When there is certainty in fuel price and there is regular cement and steel supply at market driven prices, I think people can plan better," Yam told reporters at a briefing in Kuala Lumpur yesterday.

Construction and operational costs have jumped by 30 per cent and 20 per cent each respectively, resulting in prices of new launches increasing by about 20 per cent.

According to Rehda's Property Survey for the first half of this year, the rising costs of building material and fuel have also impacted developers' production delivery.

"Most members reported having difficulties in getting consistent supply of building materials besides their continuously rising price, especially steel and cement," Yam said.

Rehda, with over 1,000 members under its belt, had 135 respondents for its survey, comprising housing and property development companies.

More than half of the respondents said they are launching new projects for the second half of this year. However, new launches in the first half of the year were almost halved compared with the same period last year.

The average number of units to be launched per developer in the second half of this year is 152 units, lower than the 169 units in the same period last year.

By New Straits Times

Asiatic Land in talks to open Premium Outlet

KULAI: Asiatic Land Development Sdn Bhd is discussing with US-based Simon Property Group Inc (SPG) to build the country’s first Premium Outlet centre here.

Executive vice-president Alex Phang said the Malaysian Premium Outlet (MPO) would be built on 20ha in the Asiatic Indahpura Kulaijaya township.

Alex Phang

“The project is likely to start in the last quarter of this year and be completed in 2010,” he told StarBiz at the recent launch of 82 units of Lakeview Residency Precinct 33A semi-detached houses.

He said the MPO project would be a 50:50 joint venture between Asiatic Land and SPG’s division Chelsea Property Group.

Chelsea Property Group, previously a New York Stock Exchange-listed (NYSE) company, was acquired by the NYSE-listed SPG in October 2004.

Chelsea Property is the world’s largest owner, developer and operator of upscale outlet centres with 38 outlets in the US, six in Japan, and one each in South Korea and Mexico.

Headquartered in Indianapolis, SPG is the largest public-listed real estate company in the US. It currently owns or has interest in 383 properties comprising 261 million sq ft of gross lettable area in North America, Asia and Europe.

“The outlet in Kulai will be Chelsea’s first premium outlet in South-East Asia, offering international branded items at discounted prices,” said Phang.

The items are designer fashion and sportswear, shoes, fine leather, luggage, accessories, jewellery, housewares, home furnishings, gifts, speciality items, and products for children.

Phang said apart from Malaysians, the company wanted to attract shoppers from Asean countries, the Middle East, India, China and Australia to shop at MPO.

He said the company planned to work closely with airlines, hotels, tour operators and travel agents in the region to bring shoppers here.

Asiatic Indahpura covers 2,832ha, and to date, 404.8ha has been developed with 5,000 residential and commercial properties.

By The Star - StarBiz - (by Zazali Musa)

Al-'Aqar REIT to buy 9 more properties

AL-'AQAR KPJ REIT, the world's first Islamic heathcare property trust, said it plans to inject nine more properties into the trust, raising its asset size to just over RM1 billion by year-end from RM651 million now.

Of the nine properties, it will buy six hospital buildings and one nursing college from KPJ Healthcare Bhd for RM305.9 million.

The remaining two properties it plans to buy are a hotel and office tower, Hotel Selesa and Metropolis Tower, which company officials said will be complementary to the healthcare tourism industry.

If regulators approve the deal, it will be the first time in the world that a hotel is included in an Islamic REIT.

Under syariah guidelines, hotels cannot be included.

"The hotel is well-positioned to benefit from health tourism sector growth and its operations are in accordance with syariah principles," KPJ chairman Tan Sri Muhammad Ali Hashim said at a media briefing yesterday.

The REIT's syariah committee had last month approved the proposed purchase, he said.

Some RM392.9 million will go towards the purchase of the nine new assets. This will be satisfied by RM249 million cash and the issuance of 151.4 million new REIT units at 95 sen each.

KPJ will use funds from the sale to Al-'Aqar to build and acquire more hospitals, as well as reduce borrowings.

"We have RM200 million to RM300 million available to build and acquire hospitals, and we can also raise more cash by reducing our stake in the REIT," Muhammad Ali told reporters at a briefing yesterday.

For now, he wants KPJ to maintain a stake of about 49 per cent in the REIT.

KPJ owns or manages 18 hospitals in Malaysia and six overseas. Hospitals overseas may later be injected to the REIT, but "not at this juncture".

The seven buildings that KPJ is selling to the REIT are the Seremban Specialist Hospital, Taiping Medical Centre, Kota Kinabalu Specialist Hospital, Bukit Mertajam Specialist Hospital, KPJ Tawakal Specialist Hospital new building, KPJ Penang Specialist Hospital and PNC International College of Nursing and Health Science.

This will be the third injection of properties into the REIT and it is expected to be completed by year-end.

Meanwhile, the REIT yesterday declared a dividend of four sen a unit for the first half of the year ended June 30 2008. Net income for the first half grew by 16.6 per cent to RM14.4 million.

Yesterday, the KPJ board also approved expansion plans for the Nilai college, where it recently bought a nine-hectare piece of land.

For the first phase, KPJ will spend RM22 million to build facilities to accommodate up to 3,000 students from 1,200 currently.

By New Straits Times (by Adeline Paul Raj)

US July housing starts at 17-year low

BUILDERS in the US broke ground in July on the fewest houses in 17 years, signaling the residential-construction slump will continue to hurt economic growth.

The 11 per cent decrease to an annual rate of 965,000, the lowest since March 1991, followed a 1.084 million pace the prior month, the Commerce Department said yesterday in Washington. July's pace was higher than economists anticipated. Building permits, a sign of future construction, also fell.

Permits decreased 18 per cent to a 937,000 annual pace, lower than the 970,000 rate projected by economists.

By Bloomberg

Al-Aqar REIT to cross RM1bil by year-end

KUALA LUMPUR: The Al-Aqar KPJ Real Estate Investment Trust (REIT) is set to cross its RM1bil target for total asset size by year-end.

Its 11 assets are at present worth RM651.5mil and it yesterday added nine more purchased from KPJ Healthcare Bhd. The deal will be completed by the end of the year.

Al-Aqar, Malaysia’s first Islamic Healthcare REIT, previously bought over the 11 assets from KPJ Healthcare Bhd.

It is also one of only two Islamic REITS in the country. The total purchase consideration for the new acquisitions is RM392.9mil, to be satisfied partly by RM250mil in cash and through the issuance of 151.446 million new units at an issue price of 95 sen per unit.

KPJ Healthcare chairman Tan Sri Muhammad Ali Hashim said Al-Aqar would emerge as the largest Islamic REIT in the country once it crossed the RM1bil asset size target and this would appeal to foreign investors.

“It would help draw foreign direct investment into Malaysia,” he said at a briefing on Al-Aqar REIT yesterday. Seven hospitals are among the new properties to be included in the REIT.

They are the Seremban Specialist Hospital, the Taiping Medical Centre, the Kota Kinabalu Specialist Hospital, the Bukit Mertajam Specialist Hospital, the KPJ Tawakal Specialist Hospital New Building, the KPJ Penang Specialist Hospital and the PNC International College of Nursing and Health in Nilai.

The two other properties are Hotel Selesa and Metropolis Tower in Johor Baru. Al-Aqar KPJ REIT is managed by Damansara REIT Managers Sdn Bhd.

Damansara REIT Managers chief executive officer Yusaini Sidek said Al-Aqar would declare a four sen dividend per unit for its financial interim period ended June 30 compared to the previous corresponding period.

“For 2008, Al-Aqar KPJ REIT has forecast to do better than the 7.32 sen dividend we paid out in 2007,” he said.

Al-Aqar recorded a 27% increase in revenue of RM22.75mil for the first six months of 2008, up from the RM17.85mil in the previous corresponding period. Its net income improved 16.6% to RM14.43mil compared with RM12.38mil previously due to rentals received from the second acquisition of hospitals completed earlier as well as those from existing ones.

By Bernama

YTL Corp nets lower profit in Q4

MALAYSIA'S largest builder and power group YTL Corp Bhd's net profit for its final quarter to June 30 2008 fell 35.5 per cent to RM231.5 million from RM359.4 million in the same period last year.

Revenue for the last three months of the accounting year did, however, improve by 9.2 per cent to RM1.88 billion from RM1.72 billion previously.

The group's net profit for the year just ended rose 11 per cent to RM847.9 million against RM762.4 million previously, helped by earnings at its utility and cement divisions.

Revenue climbed 10 per cent to RM6.62 billion from RM6 billion a year ago, driven by its overseas operations including the UK, Australia and Indonesia.

"The group after considering its current level of operations and the current market conditions, is expected to achieve satisfactory performance for the current financial year ending June 30, 2009," YTL announced to Bursa Malaysia yesterday.

Net profit of its units YTL Power International Bhd also fell by 11 per cent to RM1.03 billion due to an exceptional tax credit of RM132.9 million in the last quarter of 2007 financial year.

Revenue was up 6.7 per cent to RM1.38 billion, helped by better performance in all business segments including Wessex Water Limited in the UK and PT Jawa Power in Indonesia.

Meanwhile, YTL Cement Bhd reported a 21.3 per cent increase in profit to RM191.6 million against a revenue of RM1.46 billion for the year to June 30.

The YTL group has recommended an additional final gross dividend of five per cent for the year just ended.

"The strength of the year's performance has, in turn, enabled us to sustain our dividend payout levels, and the group expects to be able to continue to reward long-term shareholders with dividends for future years.

YTL Corp, for example, has paid dividends to its shareholders consecutively for 24 years and remains committed to its dividend policy," YTL group managing director Tan Sri Datuk Francis Yeoh Sock Ping said in a statement yesterday.

YTL Power and YTL Cement also recommended additional final gross dividends of 7.5 per cent and five per cent respectively for the year ended June 30.

By New Straits Times

The stone provider

Beautiful stones add character to your garden.

IT Stone is an importer of a wide range of natural stone products for landscaping, outdoor gardens, feature walls, living and dining floors, vanity tops and more.

With their recent cooperation with China Xiamen Ocean Rock Garden & Landscaping Co Ltd, they now bring in the latest designs for natural stone fountains.

Most of them come with LED lights and transformer pumps which are easy to install. Other products that they offer include granite garden benches, tables, oil lamps and stone basins.

In demand and the most popular products here is the wide variety of stones. They include pebbles, natural stacked stones, slates, sandstones, stepping stones, river stones, yellow mushroom stones, quartz, marble and granite.

By The Star