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Friday, August 22, 2008

Selangor Dredging to launch projects worth RM1.2b

SELANGOR Dredging Bhd (SDB) will launch five projects worth some RM1.2 billion over the next 18 months but remains cautious about demand.

It hopes to do better than fiscal 2008 but admits that this will be a challenge due to the tough business conditions.

SDB made a fourfold increase in net profit to RM97.1 million for fiscal year March 31 2008.

"In terms of profitability we are there. It is a question of sustaining current profits or whether we could achieve higher," chairman Eddy Chieng Ing Huong said after the company's shareholders' meeting in Kuala Lumpur yesterday.

For the first quarter to June 30, it made a net profit of RM7.03 million, 19 per cent down from the same quarter last year.

"Currently, the outlook is uncertain. We do have properties which are sold and sales are locked in so we will continue to recognise profits," he said.

SDB, which now has three projects worth RM520 million, will remain "cautiously optimistic" of its new launches.

It will launch 248 Jalan Ampang, a RM160 million low-rise condominium development in December and a RM260 million high-rise condominium project at Gilstead Road, Singapore, early 2009.

It will also launch a gated bungalow project in Taman Melati, Kuala Lumpur, phase 2 of Ameera residences in Petaling Jaya, and the controversial Damansara 21 in Damansara Heights, where it plans to build 21 luxury bungalows on a hill slope in the second half of next year.

Managing director Teh Lip Kim said SDB will stagger the launches if there is an economic downturn.

TEH: We will stagger them if there is a downturn

"We need to be flexible. We are experiencing a slowdown in demand and are affected by contractors asking us for revision of cost.

"We are exploring ways to buy steel from stockist and deliver on site for the contractors to use to keep the cost down. We are also leveraging on our financial capabilities to see how we can manage cost," she said.

By New Straits Times (by Sharen Kaur)

Selangor Dredging takes cautious in launching property projects

KUALA LUMPUR: Selangor Dredging Bhd (SDB) will be more cautious in launching property projects due to uncertainties in the market, says chairman Eddy Chieng.

“We have about five developments in the pipeline and will launch them in a staggered manner. We are cautious but still confident of attracting buyers,” Chieng said after the company AGM yesterday.

He added that based on its track record, SDB would be able to sell properties at “respectable” prices.

“Though we are quite new in property development, the quality of the residences that we built has satisfied buyers. We will continue to build high quality residences, focusing on niche market,” Chieng said.

Managing director Teh Lip Kim said the group’s landbank was in various strategic locations in the Klang Valley. However, SDB was very selective in developing its land.

“If we launch all the projects now, we will have no more land in our possession. So we need to think carefully when developing our land to get the best results,” she said.

Teh said the group would launch a development at 248 Jalan Ampang by year-end. The 38-unit low-rise condominium project is forecast to have a gross sales value of RM160mil.

Currently, SDB is developing 20trees, a 23-acre mixed development at Taman Melawati, and the 290-unit Ameera condominium in SS2, Petaling Jaya.

The group is also developing a 22-unit low-rise condominium called Jia in Wilkie Road, Singapore.

SDB is involved in property development, leasing and hotel operation. The group is now focusing on the local and Singapore markets.

By The Star

Magna Prima H1 net leaps 103pc

MALAYSIAN property development and construction company Magna Prima Bhd (MPB) has reported a 77.16 per cent increase in pre-tax profit to RM19.17 million for its second quarter ended June 30, 2008.

In a statement yesterday, it said the creditable performance was driven largely by its ongoing projects in the Klang Valley, namely Dataran Otomobil in Shah Alam, U1 Shah Alam and Magna Ville in Selayang.

The group also posted a 48.68 per cent year-on-year increase in revenue amounting to RM133.8 million from RM90.02 million in the corresponding period last year.

Net profit for the first half of this year also leapt by 103 per cent to RM13.8 million while basic earnings per share increased to 25.78 sen from 12.04 sen.

The company’s outstanding financial performance saw it emerge the overall winner of the KPMG Shareholder Value Award 2007 for the general construction sector.

For the financial year ended December 2007, MPB declared a final dividend of seven sen per share, and recorded a return on equity of 30 per cent.

“Going forward, we are determined to move full steam ahead in our endeavours as a progressive lifestyle property developer and construction company,” said Lim Ching Choy, the MPB executive director and chief executive officer.

By Bernama

New SC measures to boost REITs industry

PETALING JAYA: The Securities Commission (SC) has introduced several new measures to boost the growth of real estate investment trusts (REITs) including allowing the acquisition of uncompleted buildings.

The SC, in its revised REITs guidelines which came into effect yesterday, stated that REITs would be only allowed to acquire property under construction or uncompleted real estates up to 10% of their total asset value.

REITs cannot acquire non-income generating real estates such as vacant land.

Other measures were more freedom for REIT managers to invest in foreign real estate and also allowing a portion of a REIT’s portfolio to consist of properties it does not wholly own or have majority ownership.

The SC also said REIT managers had to appoint a designated person responsible for compliance. This is to ensure that securities laws, land laws and guidelines and rules are complied with at all times.

On the issue of units for cash (other than rights issue), the SC said the number of units to be issued must not exceed 20% of the approved fund size while the placement to one single placee must not exceed 10% of the approved fund size.

The SC said the various measures were to enhance the attractiveness of Bursa Malaysia as a destination for REIT listings and promote a vibrant and competitive REIT industry domestically and regionally.

Am ARA REIT Managers Sdn Bhd chief executive officer Lim Yoon Peng told StarBiz that the SC approval for REITS to acquire partially completed building was a good move as the REIT could participate in the construction also.

“A REIT will be able to buy assets at a lower price. Also since there is a contracted tenant, a REIT can obtain higher yield,” he said.

Lim said all Malaysian REITs focused on local buildings rather than those overseas where the risks could be higher.

Axis REIT Managers Bhd chief operating officer Stewart LaBrooy said the SC’s move to enhance corporate governance among REITs, including the setting up of internal auditors and the harmonising of the rules for REITs was good.

However, he was concerned about the SC’s conditions for issuance of units for cash other than rights issues.

“This could hinder the capital raising exercises of smaller REITs whose fund size is less than RM100mil. However, this ruling would not have an effect on the larger players,” he said.

By The Star (by Joseph Chin)

Malaysia eases rules for REIT managers

The Securities Commission (SC) has relaxed foreign ownership rules for property trust managers, among others, as it seeks to spur the industry further.

Under the revised Guidelines for Real Estate Investment Trusts, foreigners can now hold up to 70 per cent of a REIT management company, from 49 per cent since 2005.

The revised guidelines, which came into effect yesterday, also provide greater flexibility for REIT managers to manage their portfolio mix.

"Following the measures announced in Budget 2008 to encourage foreign REIT management companies to set up operations in Malaysia and list their REIT on Bursa Malaysia, the REITs guidelines now allow a portion of a REIT's portfolio to consist of real estates that it does not wholly own or have a majority ownership.

"REIT managers are also able to raise funds faster for acquisitions or capital expenditure purposes," the SC said in a statement.

The managers can seek a general mandate from unitholders to issue up to 20 per cent of its fund size. Previously, the issuance of any number of new units required REIT managers to hold meetings to seek unitholders' specific approval.

Additionally, the SC's prior approval on real estate valuation is now only required where acquisition of a real estate is financed, or re-financed within one year, through the issuance of new units.

In all other circumstances, the SC will conduct a post-review of the valuations to ensure that they are reasonable and well-supported.

To strengthen investor protection, REIT managers must appoint a designated person responsible for compliance.

To further safeguard investor interest, REITs will not be allowed to buy non-income generating real estates such as vacant land, and may only buy

property that is under construction or uncompleted real estates up to 10 per cent of its total asset value.

It also introduced related party transaction rules and trustees now have a greater role to play in such deals.

Additionally, the revised REIT guidelines require principal advisers to comply with the guidelines on principal advisers for corporate proposals. These specify who can act as principal advisers for the submission of corporate proposals to the SC, in addition to the required competency standards for principal advisers when dealing with corporate proposals involving initial public offers of REITs on Bursa Malaysia.

The REIT guidelines also make reference to the need to comply with the guidelines on due diligence conduct for corporate proposals which sets out the SC's expectations on issuers, advisers and experts in their conduct of due diligence to ensure that investors can make informed investment decisions based on sound and accurate information.

By New Straits Times

IOI Corp wins bid for Menara Citibank?

KUALA LUMPUR: IOI Corporation Bhd is believed to have succeeded in its bid to purchase Menara Citibank from Citigroup-associated Inverfin Sdn Bhd. Sources said IOI Corp would buy the building for RM800 million after outbidding two others.

While details weren't available at press time on the identity of the other two bidders, a local media report last week said they included a "private equity fund and a Korean fund". The building would likely fetch between RM1,000 and RM1,200 per sq ft, the news report said.

Inverfin's major shareholders are Citigroup's unit Menara Citi Holding Company Sdn Bhd (50% stake), Singapore property developer CapitaLand Ltd (30%) and Amsteel Sdn Bhd (20%).

The CapitaLand website stated that the 50-storey freehold Menara Citibank had a net lettable area of 69,379 square metres (746,789 sq ft) as at Dec 31 last year.

According to Malaysian Rating Corporation Bhd's (MARC) Structured Finance Quarterly Ratings Actions, Reviews and Outlooks - 3Q07, Menara Citibank was at that time 99% occupied with average occupancy rates in excess of 90% since 2002.

Using a discounted cash flow valuation approach, MARC said its assessed capital value for the property was RM398.7 million, a 13% downward adjustment from its market value.

"The strong occupancy levels and increases in rental rates are reflected in the property's average operating profit of about RM28.1 million per annum over the past five years," MARC said in the report.

The ratings agency also said in its report that Citibank Bhd was occupying 42.7% of the total net lettable area of the building. It is understood that Citigroup will retain its Malaysian branch offices at Menara Citibank and will lease the space from the new owner.

Inverfin's principle activities are limited to property investment and office management of its sole property Menara Citibank, according to the MARC report.

By The EDGE Malaysia (by Sharmila Ganapathy)

Healthy Living

The Kiaraville gymnasium for condo residents, is equipped with high-end Technogym equipment from Italy, an aerobic room with special lighting and sound system.

The gymnasium is about 5,000sq ft and even has space for two private training rooms.

One of the directors of the property development company, who declined to be named, is a fitness enthusiast who wanted the best facilities available.

The gymnasium is about 5,000sq ft and even has space for two private training rooms.

Residents can make use of the common gym facilities within the operating hours from 7am to 10pm. But the private rooms are meant for residents who prefer the privacy of working out behind closed doors under a private instructor.

Professional fitness centre operator Candi Soo has been engaged to run the private rooms which are equipped with its own set of Technoqym equipment. Fees range from RM70 to RM100 per hour.

Besides personal training, Soo also offers fitness classes such as Gymstickin, Barbell Matrix and aerobic classes. But the more adventurous can opt for:

* The Masala - an energetic group exercise routine based on the latest music and movements from Bollywood and Bhangra dance

* Yogataal – combining the basics of modern yoga practice with contemporary world music

* Marguerita – based on the music and flamboyant movements of carnival-style, contemporary Latin dance For residents with young children, they can leave them at the childcare centre near the gymnasium while they exercise. The centre is designed as a nursery and therapy centr ,in a secure environment. Baby-sitting services have been planned.

This nursery, which is only for the use of residents, spans approximately 1,400sq ft and is equipped with facilities under the advice of childcare specialist Jan Deboer.


Pool facilities available at Kiaraville include a 32-meter swimming pool as well as a linear pool, children’s wading pool and a pool only for adults. Residents can also relax on German-made Rausch outdoor furniture around the pool deck.

Other sports facilities include tennis courts and squash courts, as well as sauna rooms for male and female users.

Residents who want to throw parties can make use of the barbecue facilities available. Or they can use the function hall for their own private events.

The condo development will also have a convenience store, salon, laundry service and cafeteria.

Well-known food and beverage outlets are within walking distance from the nearby Solaris commercial centre which includes the Cold Storage supermarket.

Generally, Kiaraville is well connected to other shopping areas such as the Hartamas Shopping Centre, 1Utama mall, The Curve and IKEA as well as the soon-to-be-completed One Mont’ Kiara mall.

The Mont’ Kiara neighbourhood is also served by three international schools:

* Garden International School

* Mont’ Kiara International School

* French International School

By The Star

Takaful Malaysia eyes 33pc share of govt loan scheme

SYARIKAT Takaful Malaysia Bhd (STMB) aims to capture one-third market share of the government housing loan scheme for the financial year ending June 30 2009.

STMB group managing director Hassan Kamil said up to June 30 2008, STMB had collected about RM25 million to RM30 million in premium for the scheme, for a 20 per cent share.

Yesterday, the company opened its new Treasury Business Centre to cater for the government employees who took housing loan under the scheme at the Ministry of Finance, Putrajaya.

To widen its reach to customers, Hassan said, the company is undertaking an initiative to set up a takaful "desk" within Bank Islam's branches nationwide.

STMB will also sell Bank Islam products in all their branches. STMB and Bank Islam are sister companies under BIMB Holdings Bhd.

STMB hopes to finalise the consolidation of its branches with those of Bank Islam Malaysia Bhd's by year-end.

By New Straits Times (by Rupinder Singh)

SMEs told to tap HK, China building sector

MALAYSIAN small and medium enterprises (SMEs) should tap into Hong Kong and China's building and construction industry, which is recording one of the world's highest rates of growth, says the Hong Kong Trade Development Council (HKTDC).

"Hong Kong serves as an important and convenient entry point into Greater China, minus Taiwan, for Malaysian SMEs in the building industry," said HKTDC assistant executive director Raymond Yip in a statement issued on Tuesday.

"In addition, the implementation of the mainland and Hong Kong's Closer Economic Partnership Arrangement (Cepa) will enhance Hong Kong's importance for Malaysians targeting China.

"Under Cepa, businesses can gain a foothold in China while Chinese businesses see Hong Kong as a perfect springboard for mainland enterprises to reach out to the global market," Yip said as Hong Kong prepares to host the Third Hong Kong International Building and Decoration Materials and Hardware Fair from October 28 to October 31.

Cepa is the first trade agreement concluded by China and Hong Kong, with its main text signed in June 2003 while implementation takes effect from January 2008.

Organised by HKTDC and CIEC Exhibition Co (HK) Ltd, the fair will see both Hong Kong International Building Materials & Construction Equipment Fair and equally popular Hong Kong International Hardware & Home Improvement Fair run concurrently.

The trade shows have become an effective sourcing platform for both buyers and sellers targeting Hong Kong and China, with both fairs attracting more than 20,000 buyers from 113 countries and regions last year.

This year, the merged fair is expected to bring 300 quality exhibitors from around the world.

By New Straits Times