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Monday, September 29, 2008

Mah Sing eyes more commercial developments in Sg Besi

NEW HUB: Leong (inset) is confident that its track record will stand the company in good stead in any plans to develop Sungai Besi.

Property developer Mah Sing Group Bhd is keen to do more commercial developments in Sungai Besi, Kuala Lumpur, as the location is the latest commercial hub, says its top official.

Business Times was made to understand that there was still commercial industrial land in the vicinity that could be used for development although the total hectarage was not known.

"If the opportunity permits, we are definitely thinking of developing this area, riding on our branding and track record to expand further," group managing director and group chief executive Datuk Seri Leong Hoy Kum told reporters after the groundbreaking ceremony for Mah Sing's Southgate development, located along Jalan Sungai Besi, on Saturday.

While Mah Sing wants to increase its landbank in Sungai Besi, the developer is not in a hurry to make a purchase.

"Whatever land we buy, we want to ensure we look out for shareholder value and the market must be able to absorb the demand," Leong said.

On Southgate, en bloc sales for its Apex Block and Corporate Building are expected to be finalised by the year-end.

"We have interest from private investors and also equity funds because there are very few freehold land (areas) in Kuala Lumpur to buy," deputy chief operating officer Andy Chua said.

Interested parties include those from the Middle East, Singapore and South Korea.

The three remaining blocks of Southgate - Vox, Vivo and Verve - offer office suites and retail lots.

More than 80 per cent of Vivo has been taken up, while Vox and Verve are seeing about 50 per cent take-up each.

Chua said the rental yield was estimated to be eight per cent, but added that he expected it to increase because of growing demand for good freehold office space in Kuala Lumpur and the insufficient supply.

"Also, with construction cost going up, there will be good potential for capital appreciation in future," he said.

On Mah Sing's performance, Leong said it was on track to hitting its RM560 million sales target for the year.

"Having locked in unbilled sales of RM1 billion and another RM3 billion gross development value (on remaining projects), this can last us for the next five years even without our acquiring new land," he said.

By New Straits Times (by Jeeva Arulampalam)

Mah Sing plans overseas venture by 2010

PROPERTY developer Mah Sing Group Bhd will begin its first international project within two years, says its top official.

Although overall, Asian economies have slowed, Mah Sing said it was the best time for the developer to plan and explore markets such as Vietnam, China, India and Indonesia.

"Once we find the right project, we may start in one or two years. The economy in Vietnam should recover in a year or so. Therefore, we are looking at residential and commercial developments in Vietnam," Mah Sing group managing director and group chief executive Datuk Seri Leong Hoy Kum said.

Business Times had previously reported that the developer was looking at a RM1 billion township project with a local partner in Vietnam.

Leong did not rule out the possibility of carrying out industrial developments as well.

"We can even put up an industrial park in Indonesia. But we are market-driven and will cater for what the market needs," he said.

By New Straits Times

Venturing into the 'Land of Fortune'

STYLISH YET TRADITIONAL: Artist's Impression of the Platinum Galaxy Boulevard in Changshu City, China

PROPERTY developer Asia Pacific Land Bhd (AP Land) yesterday launched a commercial development project in China's Changshu City, marking its first foray into the country.

The project, known as Platinum Galaxy Boulevard and located in the province of Jiangsu, will have a gross development value of about RM800 million once it is completed in three years. It sits on some 65,421 square metres of land which had been bought for about RM44.8 million.

AP Land's wholly-owned subsidiary, Changshu Platinum Landmark Ltd, will undertake the development.

"We have chosen Changshu City due to the growing affluent and friendly foreign investor policies," Low Gee Teong, the company's joint managing director, said in a press statement.

Low and the vice mayor of the city, Fang Jiang Gou, performed the official ground-breaking ceremony at the property development site yesterday.

Platinum Galaxy Boulevard will consist of 14 blocks in phase one of commercial units, with unique features and feng-shui elements, Low said.

The project is meant to cater to the needs of fast-expanding multinational companies as well as local ones.

According to Low, Changshu City has over 200 million multinational enterprises with established manufacturing and industrial operations.

"It will provide multinational and Chinese companies with an ideal platform for them to conduct their businesses as it combines style, functionality and tradition," he said.

Changshu City, popularly known as the "Land of Fortune", has a population of three million and 800,000 floating residents.

By New Straits Times

Marina Bay Sands to open by end-2009

From left: Las Vegas Sands Corp (LVS) chairman and CEO Sheldon Adelson, Dr Miriam Adelson, LVS president and COO William Weidner and Lynn Weidner looking at the model of Marina Bay Sands project

Come late 2009, Singapore’s vibrant Marina Bay waterfront will feature a new and magnificent destination - The Marina Bay Sands.

The Marina Bay Sands is being developed by Marina Bay Sands Pte Ltd, a subsidiary of Las Vegas Sands Corp, a leading global integrated resorts developer and an industry leader in the meetings, incentives, conventions and exhibitions (MICE) market in the US.

According to Marina Bay Sands Pte Ltd general manager George Tanasijevich, construction of Marina Bay Sands is on-track and on-target for an end-2009 opening.

The total size of the Marina Bay Sands site exceeds 15 hectares with the MICE space occupying more than 120,000 sq m; three hotel towers with more than 2,600 rooms; over 750,000 sq ft of retail and F&B outlets; theatres with approximately 4,000 seats; casino and an event plaza which will accommodate 10,000 people.

“Our three hotel towers; MICE facilities; casino and theatres areas are expected to be topped off in mid-2009. Currently, the development of Tower 1 is at level 13; Tower 2 at level 11 and Tower 3 at level 9.

“In the MICE area, sub-structure works are well established and progressing, and superstructure works are well underway and rising above ground.

“Casino sub-structure works are also progressing well and superstructure works are about to commence above ground,” Tanasijevich told StarBiz.

Las Vegas Sands, which was awarded the bid for Singapore’s first integrated resort (IR) in May 2006, will invest more than S$5bil to develop The Marina Bay Sands, said to be one of the largest investments in the world for a single IR.

The IR is expected to generate S$2.7bil to Singapore’s annual gross domestic product and create 33,000 jobs throughout the economy by 2015.

Tanasijevich said the Marina Bay Sands’ opening would be a powerful catalyst to propel Singapore’s status as a leading MICE hub and enhanced the city state’s position as one of the world’s premier business and leisure destinations.

“As the first luxury IR in Southeast Asia, Marina Bay Sands will offer all visitors new and world-class experiences in dining, shopping, entertainment and MICE.

“It will combine state-of-the-art convention and exhibition facilities, luxury hotel facilities, an iconic ArtScience Museum, Las Vegas-style gaming, theatres, entertainment and an unparalleled spread of shopping and dining outlets in one landmark structure.”

In addition, the design of the development, by world-renowned architect Moshe Safdie, is unique and will integrate seamlessly with its surroundings at downtown Marina Bay.

Two iconic architectural features of Marina Bay Sands are the inspiring ArtScience Museum and the sky park offering expansive 360 degree views of Singapore’s city skyline.

“Marina Bay Sands is committed to helping Singapore achieve its economic, tourism and social goals. To that end, we are working closely with the Ministry of Manpower, Workforce Development Agency, National Trades Union Congress and Singapore Tourism Board to ensure that there is a sufficient pool of skilled talent for the sector.

“Key opportunities moving forward include leveraging and building on Singapore’s status as a premier destination for MICE events. Last year, the business travel and events sector earned over S$5bil for Singapore, establishing a new record

for the MICE sector in the city state.

“Singapore was also ranked as the top international meeting city in the world by the Union of International Associations for the first time this year,” he noted.

The company’s in-house MICE team is leveraging on its extensive experience operating in Asia to market the IR’s MICE facilities to its global network of event organisers.

The team has received an enthusiastic response from organisers of events for industries including medical/ pharmaceutical, finance, IT/telecoms and logistics.

“Marina Bay Sands aims to help position Singapore as a leading leisure, tourism and MICE destination, and support the country in achieving its goals of increasing tourism receipts to S$30 billion and visitor arrivals to 17 million in 2015.

By The Star (by Angie Ng)

Marina Bay Sands developer optimistic about project

MARINA Bay Sands is expected to be profitable from day one and the expected payback timeframe is between five and eight years.

“Overall, we remain extremely optimistic about the prospects for Marina Bay Sands and the future of the tourism industry in Singapore with China, India, Indonesia, Malaysia and Thailand serving as key source countries for both the business and leisure tourist market,” Marina Bay Sands Pte Ltd general manager George Tanasijevich said.

“We are targeting the premium and high net worth segment, along with mass affluent leisure and business travellers.”

He said Singapore had proven to be resilient in challenging times.

According to him, there is massive potential for integrated resorts in this part of the world, especially with demand from the booming markets of China and India.

“Multinational corporations seeking to hold corporate events or participate in exhibitions gravitate towards such strong markets where they anticipate demand.

“Therefore, our MICE-driven business model serves to mitigate the effects of a challenging economic climate.”

The company’s optimism is also driven by factors like the strong appeal of the integrated resort format that the Marina Bay Sands offers, its network of properties in Las Vegas and Macau, and the extensive network of travel operators worlwide.

These strengths would enable Marina Bay Sands to attract many different and diverse customer segments, and strategically target its marketing efforts.

“With our parent company Las Vegas Sands Corp’s unsurpassed track record in building world-class integrated resorts, Asian operating experience and MICE expertise, we are confident that Marina Bay Sands will be a destination filled with buzz, excitement, and something for everyone,” Tanasijevich said.

Las Vegas Sands has been awarded a 30-year concession to develop and operate the IR on Marina Bay by the Singapore government.

The Las Vegas, Nevada-based company owns The Venetian Resort Hotel Casino and the Sands Expo and Convention Center in Las Vegas and The Sands Macao in the People’s Republic of China (PRC) Special Administrative Region of Macao.

The company’s two additional integrated resorts - The Palazzo Resort Hotel Casino in Las Vegas and The Venetian Macao Resort Hotel Casino in Macao, opened last year.

By The Star

Sunrise going ahead with super-condos amid challenges

Sunrise Bhd is continuing to launch “super-condos” in Mont’ Kiara despite fears of an economic slowdown.

In the pipeline is the 460-unit 10 Mont’ Kiara which may set a new benchmark price.

The company, which was the first property developer to launch the RM1mil “super-condo” eight years ago, continues to set new benchmarks not only in pricing but also quality and service.

Sunrise general manager (branding & corporate communications) Joachim Ng recalled how Sunrise shocked the market when it launched its Mont’ Kiara Damai in 2000, the first “super-condo” that broke the RM1mil per unit mark in Mont’ Kiara.

Joachim Ng

Since then, the public-listed company went on to launch more “super-condos” priced at an average of RM1mil and above. They include Mont’ Kiara Aman and Mont’ Kiara Banyan.

In 2006, Sunrise launched the 10 Mont’ Kiara where the units were priced above RM2mil each or about RM530 per sq ft (psf). While other developers went for smaller units, Sunrise continued building large units of 2,500 to 4,000 sq ft.

“The success of 10 Mont’ Kiara showed that this affluent suburb can take a price level of RM2mil,” he said, adding that another benchmark was set when it launched the 11 Mont’ Kiara last September at RM700 psf and climbing to RM890 psf for the latest units.

Ng said 65% of Sunrise’s residents were foreign expatriates and their families, mainly from Japan, Korea, Britain, the United States, Sweden, India and Indonesia. The average occupancy of its condominiums is 82%.

“Sunrise spearheaded the development here 15 years ago. Its philosophy has always been creating value-added products and it gave so much back to its purchasers in terms of excellent services from property management, security, traffic control to cleaning public roads,” he said.

He said new players who came in about five years ago had benefited from Sunrise’s efforts. An example is the Solaris Mont’ Kiara where its many food and beverage outlets would meet the growing demand for eating and entertainment facilities. Solaris Dutamas Phase 1 is due for completion this September while the project would be finished in first quarter of 2010.

“The other developers are riding on Sunrise’s infrastructure. While we’re trying to differentiate ourselves from others, they have no problem identifying themselves with us as they too call their area Mont’ Kiara although they are further away,” said Ng.

Ng said Singapore’s Building and Construction Authority (BCA) recently conferred the Green Mark Certified Award to 11 Mont’ Kiara, making it the first residential development in Malaysia to achieve this distinction in environment sustainability in several criteria: energy and water efficiency, indoor environment quality, innovation and site/project management.

Sunrise, which had won numerous awards, was also named Malaysia’s Best Residential Developer in Euromoney’s 2008 Liquid Real Estate Awards. It is also thrice winner of the Malaysia Property Award (formerly known as FIABCI Award of Distinction) in 2005, 2001 and 1997 for Best Residential Development and was named Forbes Asia 200 Best Under US$1billion Company 2005.

Ng said although Sunrise’s condominiums were priced at a premium (10% to 15% more), it offered a host of services to its buyers.

“You may pay slightly more but in the long run it’s actually cheaper as you get to enjoy so many kinds of services and facilities,” he said, as he showed the security command centre in Plaza Mont’ Kiara where staff monitor the 38 CCTV cameras placed at strategic spots in the Jalan Kiara area. This Safe City concept has given residents and visitors a sense of security.

Ng said the company spent about RM1mil yearly just on security (not including security in the condominiums) and cleaning services.

It has also spent RM1.5mil on Fun Zone (opened in Sept 2006), a 4,000 sq ft upbeat community area for its 12,000 residents living in its 11 completed condominiums. Located at Aman Walk retail deck along Jalan Kiara 2, the centre is the brainchild of Sunrise Bhd executive chairman Tong Kooi Ong, who wanted the residents to foster closer bonding through free activities as reflected in its seven themed “planets”: arts, books, cuisine, drama, music, nature and sports. There is also a large play area called Space Explorer play-gym that is very popular with the children.

Sunrise has built over 4,000 completed residential and commercial units in 11 condominium and two commercial projects (Plaza Mont’ Kiara/Solaris Mont’ Kiara). This does not include the Solaris Dutamas and several high-end condominiums like the 10 Mont’ Kiara, 11 Mont’ Kiara and Mont’ Kiara Meridien - all under construction. It has another 100 acres in the area to be developed over the next decade.

There is an estimated 6,000 condominium and commercial units completed by other developers in the area.

Ng feels the “congestion issue” had been overplayed as the current heavy traffic is mainly due to construction activities. Jalan Kiara 1 (recently made into a no-parking zone) would be widened by three feet and there would be more access roads in the future, he added.

By The Star (by S.C.Cheah)

Survey: Malaysian real estate still attracting investors

Property buyers are still keen to invest in the local market, with more than half expecting prices to rise by more than 10 per cent in the next six to 18 months, said a survey.

The Group, Asia's leading network of property portals, announced the results of its online Asia Property Trends Survey 2008 last week. The survey tracks the buying habits and trends of about 2,000 local and overseas property buyers who visited and Malaysian website,

The survey was conducted online from August 1 to 31.

"In recent times, Malaysia has proven to be an attractive place to invest in property. as a group has been a primary observer of this trend, and it looks no different this year based on the feedback and results we have collated."

"As property values continue their consistent rise, Malaysians and those who have an interest in local property have again shown that a healthy demand still exists in this country," group executive chairman Patrick Grove said in a statement released yesterday.

While 50 per cent of the respondents revealed that they have bought at least one property over the last 24 months, a whopping 89 per cent of them intend to buy property within the next 12 months.

Some 57 per cent of respondents say buying property remains a solid and safe investment, while 52 per cent believe they could generate passive rental income from their purchases.

While most of the respondents' main motivation for purchase is for their own stay, around 47 per cent of respondents are looking to buy purely for investment purposes.

The survey also found that landed property remains the apparent favourite of buyers with 63 per cent keen on readymade or completed landed property while 48 per cent were set on ready-made or completed condominiums and newly-launched or uncompleted landed property.

The results show that 59 per cent of respondents used the Internet as the first medium they turn to when initiating their property hunt.

While over 60 per cent said it is the number one source they rely on for updates on available property.

By New Straits Times

Farrali wellness resort a shot in the arm for Penang

MEDICAL tourism activities in Penang are set to be boosted with the entry of a new player in Penang.

The RM300 million Farrali International Specialist Hospital and Wellness Resort in Batu Kawan on the mainland is set to not only woo medical tourists from Indonesia and Thailand, but as far as the Middle East, Penang Chief Minister Lim Guan Eng said.

The project will be undertaken by Kuala Lumpur-based Kumpulan Perubatan Farrali Mutiara Sdn Bhd (KPFM) and is slated for completion by 2011.

The integrated medical resort, which will boost 120-bed and state-of-the-art medical equipment to treat chronic ailments like diabetes and cancer, will also boast a nursing college, convention centre, hotel and service apartments and a herbal farm.

"This project complements the state government's efforts in increasing the tourism sector's current contribution of 22 per cent to the state coffers to 30 per cent in five years," he said on Saturday.

Lim was speaking during a signing ceremony between KPFM and the Penang Development (PDC) for the purchase of six hectares of land at Mukim Batu Musang in Batu Kawan where the medical resort will be sited.

Present were KPFM executive chairman Datuk Alias Ali and PDC general manager Datuk Rosli Jaafar. Batu Kawan is the site on mainland Penang where the Second Penang Bridge is supposed to be located.

The 24km crossing will connect Batu Kawan and Batu Maung on Penang island, which is minutes from the Penang International Airport in Bayan Lepas.

The new private hospital is set to offer complementary medical treatments such as acupuncture and ayurvedic treatments.

The five-star hotel resort, with 200 rooms and service apartments close to the private hospital, will cater to needs of patients and their families who intend to remain in Penang for extended periods for treatment.

Other facilities like a spa, restaurants, recreational facilities and shopping outlets are also planned.

Lim said with the presence of five-star medical facilities in Penang, the state will be able to tap into the lucrative medical tourism market.

In 2004, about 152,000 foreign tourists sought treatment in seven private hospitals in Penang and this generated revenue of RM135 million.

Medical tourists to Penang in 2001 totalled 72,000, 2002 (84,000) while the number rose to 92,000 in 2003.

By New Straits Times (by Marina Emmanuel)

Johor Corp unit to manage 5 Saudi hotels

JOHOR Corp's hospitality arm, Puteri Hotels Sdn Bhd, has signed to manage five luxury-class hotels in Saudi Arabia beginning September 2009.

The hotels, with a room inventory of between 270 and 350, will be located in Medina, Mecca, Riyadh and Jeddah.

"All of the new five-star hotels are being built," managing director John J. Roozemond said.

The first hotel, with a 267-room inventory, is scheduled to open in Medina in September 2009.

All hotels in Saudi Arabia are automatically syariah-compliant, which means, among others, that they will not serve alcohol, have a floor specially for women and serve halal food.

"There will be no entertainment except in-room entertainment," Roozemond told Business Times.

A second such hotel is set to open at the end of 2009 either in Medina or Mecca.

"We will manage the hotel and at the same time we will have a 50 per cent stake in the management company," he said.

Even prior to the opening of the hotel, Puteri Hotels has been involved in the provision of technical assistance.

The Saudi partner, Arab Resorts Areas Co (Arac), is wholly owned by one of the largest conglomerates from the Middle East - the Taiba Investment and Real Estate Development Corp.

Through this partnership, The Islamic Hospitality Management Corp was created to build and manage hotels and resorts throughout Saudi Arabia, the Middle East, Malaysia, Singapore, London and other Islamic countries.

Puteri Hotels, which is best known for the five-star Puteri Pacific Hotel in Johor Baru, will leverage on this opportunity to expand this hotel chain for the niche market even outside of Saudi Arabia, including Malaysia.

By New Straits Times (by Vasantha Ganesan)

Slight rise in demand for cement this year

The Cement & Concrete Association of Malaysia (C&CA) expects domestic cement demand to grow marginally by 3% to 5% to about 16.33 million tonnes this year versus 15.86 million tonnes in 2007 due to a lacklustre construction industry.

Chairman Tan Sri A. Razak Ramli said cement demand had remained stagnant at 15 to 16 million tonnes a year since 2003.

Tan Sri A. Razak Ramli

“Despite an encouraging growth in the first half of the year, we will only see a relatively small growth in demand this year due to the slowdown in the construction industry. We hope things will be better next year. If the economy picks up next year then construction should also,” he told StarBiz.

In addition to a lack of demand, the local cement industry has been a much misunderstood industry.

Various accusations have been hurled at industry players including increasing cement prices after liberalisation and creating artificial shortages through orchestrated plant shutdowns.

There have also been calls by various parties for the Government to remove all import duties for cement, impose an export or windfall tax and/or impose an export ban on clinker and cement to ensure sufficient domestic supply.

To Razak the allegations are baseless.

“There can never be a shortage of cement in Malaysia as the cement installed capacity is very high at 28.3 million tonnes,” he said.

In 2007, cement production inclusive of export was only 19.48 million tonnes of which 15.86 million tonnes were consumed locally. Razak said the forecast production this year would be slightly higher at 19.62 million tonnes as domestic consumption was expected to increase to 16.33 million tonnes. Cement export is expected to increase to 14.7% of production this year, up from 14% last year.

“The Government should also not impose an export ban on cement because manufacturers can easily meet domestic demand and export the excess,” Razak said.

Moreover, the Government is in full control of clinker and cement exportas every tonne can only be exported with an export license from the International Trade and Industry Ministry supported by a letter of no objection from the association.

Razak said cement manufacturers were also not intentionally creating shortages by simultaneously shutting down plants for maintenance.

“No manufacturer would shutdown their plants unnecessarily thus incurring production losses and additional costs including high fixed costs. Kilns require a minimum of three days to heat up to the desired temperature of 1,500 ÂșC.

“All cement companies notify the Domestic Trade and Consumer Affairs Ministry on their scheduled plant maintenance shutdowns. The plants would also have stocked up to ensure sufficient supply,” he said, adding that unscheduled plant breakdowns, however, were beyond the manufacturers’ control.

He said complaints of tight cement supply, especially in Peninsula Malaysia, was actually due to the fact that “bagged cement was not moving fast enough.”

“With the increase in fuel price, many transporters are reluctant to carry bagged cement as cargo as they are low value, bulky items. Otherwise they will try to overload the lorries. There is also a lack of lorries, drivers and licences,” he added.

Road Transport Department operations on overloaded tankers and lorries carrying cement and its related raw materials also added to the industry’s transport woes.

Razak pointed out that although the Works Ministry had gazetted an additional 20% loading from the present permissible weight for lorries/tankers on all federal roads in Peninsula Malaysia, federal roads in east Malaysia and state roads nationwide were not covered.

To help ease supply issues, the C&CA is in the midst of setting up a public hotline centre to assist those in Peninsula Malaysia who have trouble with cement supply.

“Through the centre, Class F contractors will have a direct avenue to obtain cement. We will also be able to capture and build a database on public complaints on cement supply,” Razak said.

On cement price increases, Razak said the industry did not raise prices indiscriminately and exorbitantly despite having absorbed cost increases of more than 60% from 1995 to 2007.

There were only two price increases between 1995 and 2006 when cement prices were under the Price Control Act - 10% in August 1995 and an average of 9% in December 2006.

Following cement price liberalisation on June 5, prices were only increased twice - 15% to 20% country-wide in the same month as well as an average 8% in Peninsula Malaysia in August due to an unprecedented 63% diesel price hike and a 26% rise in electricity tariff. This price will hold until December.

Despite the price liberalisation, the return on investment (ROI) for the cement industry has only increased to 6% to 10% from the previous 3%.

“This is still insufficient to encourage reinvestment by industry players,” Razak said, adding that the cost of a 1.2 million tonne integrated plant was about RM1bil currently.

“This is why there has been no expansion programme or new plants coming on-line since 1997 although manufacturing licenses for the production of more than 14 million tonnes of cement have been issued by the Government.

“There has been some re-investments and upgrades but returns and demand are too low to encourage new expansion.”

By The Star (by Elaine Ang)