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Monday, August 25, 2008

Mega cities of opportunity

US$200 billion project in Yemen and Djibouti holds lucrative prospects for Malaysian contractors.

INTERNATIONAL ATTRACTION: An artist’s impression of the Al Noor Cities project.

The massive US$200 billion (RM668 billion) Al Noor Cities project, comprising a city each in Yemen and Djibouti, is taking shape and presents various investment opportunities for experienced contractors from Malaysia.

Al Noor Holdings Investment chief executive officer Mohammed Ahmed Al Ahmed said over the next six years, the project proposes an investment of US$31 billion (RM103.54 billion) in Yemen and US$20 billion (RM66.80 billion) in Djibouti, some by Al Noor, some by private investors.

In 15 years' time, according to plan, US$200 billion would have been invested in the project - US$105 billion (RM350.70 billion) in Yemen, US$70 billion (RM233.80 billion) in Djibouti and US$25 billion (RM83.5 billion) on the world's longest suspension bridge linking the two, he added.

Mohammed Ahmed and project executives and advisers expect "great appetite" for the build-own-operate contracts that will make up the bulk of developments within the Al Noor masterplan.

The project, the vision of Saudi-Yemeni construction magnate Sheikh Tarek Mohammed bin Laden, has attracted interest from a host of international companies. US giants Honeywell, Avaya and AIG Investments are already among its partners.

"It is a new city and it is happening," Mohammed Ahmed said at the launch of Al Noor Djibouti at Djibouti Kempinski Palace recently.

Malaysian contractors like Eversendai Corp, MMC, Gamuda and WCT Engineering that have vast experience in West Asia could stand as possible front-runners to bid for lucrative contracts in the project.

Mega projects undertaken by Malaysian companies in West Asian countries include the New Doha International Airport in Qatar worth US$543 million (RM1.81 billion), mixed development in the Al-Reem Island Project (Zone C) in Abu Dhabi (US$378 million; RM1.26 billion), Abu Dhabi City Centre (US$429 million; RM1.43 billion), Jizan Economic City in Saudi Arabia (US$2.9 billion; RM9.69 billion) and the Shohiba Independent Water & Power Project (US$2.6 billion; RM8.68 billion).

"Africa is the centre of the world with a population of almost one billion, while the Middle East North African region has a population of 400 million. We have all the ingredients to make this project a reality," Mohammed Ahmed said.

Al Noor Cities' master plan calls for one 1,500 sq km city in the southwestern tip of Yemen and a similar 1,000 sq km city in Djibouti. The cities will be linked by a 28.5km road and rail bridges.

The bridge will open up trade routes between Yemen, the Gulf countries and Africa. It will have a six-lane highway and four light rail lines, water and oil pipelines.

Al Noor Cities will also feature free trade zones, research and development facilities, technology parks and financial districts.

Agreements are in place with governments of both countries to start financing discussions with institutional and private investors, corporates and governments.

"The idea is to finance the project in progressive phases and implement it step by step," said Ross Connelly, managing director of Akkadian Private Ventures, a Washington-based project financing firm hired as an adviser.

There will be clear delegation of authority between the governments and administrations of the two cities, said Reem Alaloui, vice president of US-based AECOM International Development which is drawing up the free zone frameworks.

Dean Kershaw of management services firm L3, the project manager, said talks on the framework agreements will begin "within weeks" and should be completed before the end of the year.

By New Straits Times (by Zuraimi Abdullah)

Mayland builds its strength on choice locations

MALAYSIA Land Properties Bhd (Mayland) is confident it can hold its own against the increasing number of developers venturing into the high-end market.

"There are many players in this segment now, but we are unique because of the landbank that we have in choice locations," Mayland executive director Yeo Chung Sing told Business Times.

In recent years, Mayland has launched a number of high-end condominium developments along Jalan Kuching in Kuala Lumpur, a stone's throw from the city centre.

The Regalia, launched last year, is located behind The Mall.

Its latest development, Royal Regent, is off Jalan Kuching as well and near its Putramas development.

"I believe our pricing, from RM330 per sq ft, makes the Royal Regent very competitive considering that we are just 10 minutes away from property which is selling at RM2,000 per sq ft," Yeo said.

The ideal location has enabled the group to sell 30 per cent of the 471 units on offer even before the development was launched last Thursday.

Royal Regent's gross development value is RM300 million.

"Our buyers have always looked to us to give them developments that not only cater for their needs but are also sound investment decisions," Yeo said.

The Royal Regent's five-storey clubhouse and three condominium blocks hold the promise of being a one-of-a-kind development.

"We have spent some RM10 million on the landscaping and clubhouse alone to ensure that buyers get a premium-value product."

There will also be 16 duplex penthouses in the development.

Yeo said the group is moving ahead with its more than RM1.2 billion worth of launches this year despite the increasing prices of building materials and the somewhat dampened economic outlook.

Mayland has revised the pricing for several of its projects to take into account the almost 30 per cent increase in cost of construction materials, he added.

By New Straits Times (by Presenna Nambiar)

Faber may replicate Taman Desa success story

FABER Group Bhd may replicate its multi-billion-ringgit Taman Desa development if it finds a good location.

"We are not discounting it. It will be a challenge, but we are ready," managing director Adnan Mohammad told Business Times.

ADNAN: Will look at possibilities

"We will look at vicinity and locality since people like the Kuala Lumpur address.

"There's still a lot of land available in Segambut and the surrounding areas. I'm not saying that's where we will go, but we will look at all possibilities," he said.

Faber started developing the 100ha Taman Desa at Jalan Klang Lama in the mid-1970s.

About 90 per cent of Taman Desa, which will take another four years to complete, comprises residential properties. The rest are commercial units.

Faber still has 1.32ha in Taman Danau Desa, part of Taman Desa, ready to be developed. It aims to launch 38 three-storey link-villas, priced from RM1.6 million each, late next year.

Faber, in a venture with Kuala Lumpur City Hall, will also develop 2.28ha in Taman Danau Desa. It will build 40 semi-detached homes, priced from RM1.9 million each, and six bungalows, priced from RM2.5 million a unit, this year.

On another development, Adnan said that Faber will not proceed with a plan in the Sabah Growth Corridor as it wants to focus on two new housing projects in Kota Kinabalu.

This month, Faber plans to launch 32 three-storey semi-detached houses and two bungalows in Taman Hilltop Perdana.

Also in the pipeline is Lucky Heights, a RM110 million condominium project comprising more than 300 units.

Property development makes up about 35 per cent of Faber's revenue, with the rest contributed by its hospital support services business.

By New Straits Times (by Sharen Kaur)

MAHB seeks developers, investors for land around KLIA

MALAYSIA Airports Holdings Bhd (MAHB) will issue a request for proposal (RFP) next month to developers and investors interested in developing land around the KL International Airport (KLIA) in Sepang.

The airport operator has a 30-year lease of 9,690ha at KLIA starting from 1998. Of this total, 6,400ha are for non-aeronautical activities and the rest for aeronautical activities and facilities such as ramp, apron and runway.

MAHB general manager of land development, Muhd Najib Mohd Rawi, said the company is opening 1,092ha of the total non-aeronautical land, currently planted with oil palm, for development over the next 10 to 15 years.

"Our aim is to increase our non-aviation revenues and passenger numbers at KLIA
through creation of activities. In the long term, we want to make KLIA an airport city," he told Business Times in an interview.

MAHB last year commissioned a land suitability study, the results of which showed that the area is suitable for high value and time-sensitive manufacturing facilities, logistics centre and facilities, meetings, incentives, conventions and exhibitions (MICE), destination retail or shopping, tourism and recreational activities.

"A master plan has been developed, outlining development options, and submitted to the Sepang Municipal Council. We expect it to be approved in two months," said Muhd Najib.

"In the meantime, we will continue to generate awareness of the project among developers and investors both locally and abroad," he added.

MAHB is looking to form a joint-venture partnership to develop, build and operate the land or lease the land to others rather than developing it alone.

"We will self-develop some of the development components for long-term recurring rental income," said Muhd Najib.

"We won't invite just anybody. The developers and investors must offer premium development properties in order to maintain the KLIA brand of modern and high technology facilities. This must be carried out throughout the whole development," he added.

Under the master plan dubbed "KLIA Aeropolis", the majority 395.37ha or 36.2 per cent of the 1,092ha land are zoned for commercial use, and 230.4ha or 21.1 per cent for parks and green.

The master plan also features a 128ha allocation for two 18-hole golf courses, 121.07ha for agro-tourism development, and 10.06ha for a stadium.

Muhd Najib said because of the vast development, the RFPs will initially cover several components of the commercial zone such as the expo and convention centre, specialised retail outlets and purpose-built offices.

"We will also invite developers and investors to submit a RFP to develop and operate a 40ha theme park, a logistics centre and golf courses at the airport land," he added.

The company is planning to have a theme park that will rival those in Genting Highlands and Singapore's Sentosa Island.

"The advantages our location has are its proximity to the airport, the abundance of land and the presence of a low-cost terminal," said Muhd Najib.

To attract developers and investors, MAHB is in the midst of drawing up plans to develop a transport centre similar to the KL Sentral station, to connect people from the commercial zone to the airport terminal.

"For this area to be successful, it must be well connected. As such, we are proposing a tram or train line to connect the commercial centre to the airport.

"We are studying what is best. We have allocated some parcels of land for this transport centre," said Muhd Najib.

On the cost of development, Muhd Najib said it will mainly be on infrastructure.

"We will develop the land in phases. For instance, to get the ball rolling, we have allocated a budget in the coming year to commence initial infrastructure development in the commercial zone, covering 20ha," he said, but declined to reveal any figures.

By New Straits Times (by Kang Siew Li)