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Monday, November 3, 2008

Berjaya Jeju Resort slated to be launched in first quarter 2009

BERJAYA Jeju Resort, which will be developed into a world-class integrated tourism and recreational destination on the honeymoon island of Jeju, will mark Berjaya Land Bhd’s (BLand) entry into South Korea’s property market when the project is launched in the first quarter of next year.

The development would be undertaken by Berjaya Jeju Resort Ltd, a 81:19 joint venture between BLand and Jeju Free International City Development Centre (JDC).

The joint venture company has invested US$30mil as initial paid-up capital in the development.

BLand chief executive officer Datuk Francis Ng said the development was a strategic investment because the geographical location of Jeju made it a well-connected city with a potential market of over 750 million people.

“Jeju’s free international city status coupled with various tax incentives, such as the five-year corporate tax exemption from the first year of profits, and the property tax exemption of 15 years for both Korean and foreign investors, are the primary factors why Jeju is seen as a good investment destination,” he told Malaysian journalists on a recent site tour of the project.

Other favourable factors include a friendly corporate investment environment, an effective legal system, and the availability of professionals drawn from the ranks of the more than 6,000 local graduates churned out there yearly.

“We are confident that our long term investment in South Korea will stand us in good stead for stronger growth and to partake in other related business activities in the coming years,” Ng added.

Located on 183 acres in Yerae-dong in Seogwipo City in southwest Jeju, Berjaya Jeju Resort with a potential gross development value (GDV) of US$3.5bil is targeted for completion in 2015.

Among the various components of the development will be 1,282 residences, including villas and apartments, worth a GDV of US$1.5bil; a casino, two hotels, shopping mall, an indoor arena and a valley resort and wellness resort.

Ng said the indicative prices of the residential properties in Berjaya Jeju Resort would be between US$500 and US$600 per sq ft.

The first phase of the development, comprising the North Gate mid-rise apartments, is planned for launch in the first quarter next year. The other precincts including the casino, casino hotel and shopping mall would kick off in two to three years.

BLand senior general manager for properties marketing Mah Siew Wan said as there was no restriction on foreign buyers to purchase property in Jeju, “we will be targeting buyers from China, Japan and Taiwan.”

“Our immediate target market will be Korean buyers, especially from Seoul. It is said that it is every Korean’s dream to own a home on Jeju island,” Mah said.

South Korea has a population of more than 70 million, of which 560,000 are residents in Jeju.

According to JDC chairman and chief executive officer Kim Kyung Taeg, Berjaya Jeju Resort would redefine Jeju’s waterfront and bring a whole new dimension to Jeju’s tourism industry.

“It is expected to foster an eco-friendly, high value-added leisure environment and is part of our vision to establish Jeju as an international city with world-class tourist destination developments,” Kim said.

The integrated resort development would be able to position Jeju as an important investment opportunity and also put the island on the world map.

By The Star

High growth in BLand overseas ventures

BERJAYA Land Bhd (BLand), which ventured into the international property development market in a big way two years ago, has in the pipeline a number of interesting residential, commercial and resort projects abroad.

While cautious of the impact of the global financial meltdown on the property market, chief executive officer Datuk Framcis Ng said: “We are invested in these countries for the long term and we have confidence that these countries are resilient enough to weather the downturn and recover when the global economy picks up in time.”

He does not discount the need to slow down or defer some of the company’s projects if the demand is not there.

To finance its ventures overseas, Ng said BLand would be disposing of more assets including shopping malls and overseas hotels, for working capital.

In the past 12 to 18 months, the BLand group had raised approximately RM1.8bil from the sale of assets and Treasury BLand irredeemable convertible unsecured loan stocks. KL Plaza was sold for RM470.6mil in February while the sale of two hotels in Seychelles and Mauritius raked in RM145mil.

Ng pointed out that BLand’s bottomline these two to three years would be well cushioned by income generated from local property development and investment projects, as well as its gaming and hotel activities.

BLand expects overseas ventures to contribute about 30% to the group’s revenue in the next four years.

According to Ng, BLand’s property projects in Vietnam, South Korea, China and Libya will start making more significant contribution by then.

Its maiden project on Jeju island in South Korea, Berjaya Jeju Resort, would make up half of the contribution to the property division.

About 30% of the revenue contribution will come from gaming and the balance from local property development and investment, hotel and recreation businesses.

Ng said together with BLand’s property projects in Malaysia, BLand’s property division could chalk up 50% of BLand’s group revenue by 2012.

BLand’s landbank include 1,000 acres in Malaysia, 660 acres in Thailand, 2,300 acres in Vietnam with investment licences granted, 76 acres in China that are currently under development and 183 acres in Jeju.

The first phase of Berjaya Jeju Resort comprising the North Gate mid-rise apartments is scheduled for launch in the first quarter of 2009.

Over the next eight years, the Jeju project is expected to contribute net earnings of US$100mil a year to BLand.

“In Vietnam, we target to launch the first phase of Thach Ban in Hanoi by early next year. We have started work on the Dong Nai residential development project, and are planning to launch it in the second quarter of 2009.

“We have also received investment licences for the Vietnam Financial Centre and the Vietnam International University Township projects, and are now awaiting construction permits. The four projects in Vietnam are worth a total gross development value (GDV) of US$2.5bil,” Ng told StarBiz.

In China, BLand is developing the Great Mall of China, a retail mall in Beijing which is targeted for completion in three to four years. The project, with a GDV of RM1.8bil is already 10% completed.

The company has also recently ventured into Libya to undertake the development of an integrated golf resort cum residential and commercial project in Tripoli.

The project, with GDV of RM2.5bil would take off in the second quarter of next year.

For the financial year ended April 30, 2008 (FY08), local property projects contributed 20% of the group’s revenue of RM1.5bil while the share from gaming was 56%. BLand recorded net earnings of RM1.1bil in FY08.

Analysts said with the consolidation of BToto as a 50% subsidiary of BLand in February, contribution from the gaming sector was expected to jump to more than 80% these two to three years.

Meanwhile, the annual dividend of RM150mil to RM200mil received from BToto is also a boost to BLand’s cash flow, they said.

By The Star (by Angie Ng)

Local real estate cheap for foreigners

Despite the current global financial meltdown, the Malaysian property market still remains attractive to foreign investors, according to International Real Estate Federation (FIABCI) Malaysia honorary treasurer Yeow Thit Sang.

“The local property market is still attractive in terms of prices. Properties in Malaysia are among the cheapest in the region,” he told StarBiz.

“Our laws are also comparatively more lenient for foreigners to buy and sell property in Malaysia,” he added.

Yeow said foreigners wanting to purchase property in countries such as Indonesia, the Philippines, Thailand and Vietnam were generally put off by the countries’ respective laws.

Another plus point for foreigners who bought property in Malaysia is that they are not subjected to death taxes, Yeow said.

“Japan has a death tax of 70%. Even in England death duties are stringent. That is why all the Lords are becoming paupers!”

Yeow said FIABCI-Malaysia would be sending a representative to Japan in December to create more awareness about the local property market and to encourage more foreign direct investment (FDI) into Malaysia.

He also said the local political development was not creating uncertainty and was not deterring foreign investors from Malaysia.

“The political scene in Malaysia is a normal democratic process. It is a sign of political maturity rather than uncertainty. It is not causing chaos like some countries,” Yeow said.

On another issue, when asked if the local property market was in a slump, Yeow said: “Our property market has not hit a slump. It is more of a slowdown.”

He attributed the slowdown to rising raw material prices that was sparked by the fuel price hike in June.

“Problems occur when construction cost goes up midway through a project and it is uncertain if it is the developer, contractor or consumer that will bear the cost,” Yeow said.

He said many contractors were increasingly reluctant to take on projects without a variation clause spelt out in the contract.

“Both contractors and developers should insist on a variation clause in their contracts to safeguard their interests.

“Should construction costs go up midway through the project, they can immediately determine who bears the cost and not have projects hanging,” Yeow said.

Going forward, he said he did not foresee see a slump in the local property market.

“There can never be a slump so long as there is demand. There is a lot of migration from rural to urban areas.

“The population is growing steadily and there will always be a need to house people,” he said.

“From an investment point of view, buying property is also a good safeguard against inflation,” Yeow added.

Yeow believes a high level of unemployment in the country could cause the local property sector to tumble.

“If unemployment were to rise, people will not be able to pay their loans and that will cause a slump. When that happens, banks will also take back the property,” he said, adding that the unemployment rate in Malaysia was low now.

“We still need to bring in foreign workers,” Yeow said.

On another note, Yeow said the standard of property development in Malaysia had improved tremendously over the years and it was being benchmarked against international standards.

“Our developments are definitely on par with those of other countries. Many of our projects have won international awards such as FIABCI International Prix d’Excellence,” he said.

The International Prix d’Excellence is an annual competition that honours the world’s best property projects.

On the local front, developers are recognised for their development projects and are honoured at the annual Malaysia Property Award.

Winners of the Malaysia Property Award in their relevant categories will go on to represent Malaysia the following year at the International Prix d’Excellence.

FIABCI Malaysia will be organising its 16th Malaysia Property Award on Nov 12 at the One World Hotel in Petaling Jaya, with Malayan Banking Bhd as the official sponsor.

The categories that will be contested are: Property Man of the Year, Master Plan, Residential Development (low rise and high rise), Retail Development, Industrial Development, Specialised Project (two categories), Office Development, Hotel Development and Resort Development.

The Yang di-Pertuan Agong and Raja Permaisuri Agong will be the guests of honour at the prestigious event.

By The Star (by Eugene Mahalingam)

Emkay to build RM4.3b Cyberjaya projects from 2010

EMKAY Group, controlled by developer Tan Sri Mustapha Kamal Abu Bakar, plans to build RM4.3 billion worth of properties in Cyberjaya, Selangor, from 2010.

The future developments will add another 10 million sq ft of office space in Cyberjaya in several years, Mustapha Kamal said.

"The group is now looking at buying some 70 acres of prime land for that purpose," he said after a ceremony to mark the construction of an 11-storey office building at its NeoCyber project in Cyberjaya on Saturday.

The Emkay group is helping to develop Cyberjaya through major projects such as NeoCyber and MKN EmbassyTechzone.
The latter's development is a 60:40 joint venture with India's Embassy Group.

Until then, Emkay will first build eight office towers at MKN Embassy Techzone next year.

The office buildings will boast a gross development value of RM800 million, covering an office space of two million sq ft. It had bought 20 acres for the project.

State-owned Amanah Raya Bhd recently bought three completed office buildings at MKN Embassy Techzone development for a combined RM266 million.

Emkay has so far completed projects totalling RM291 million and an office space of 700,000 sq ft in Cyberjaya.

By 2011, it will have provided a total 3.5 million sq ft of office space.

On whether the looming economic recession would hamper the group's development plans, he said: "We have successfully gone through two recessions before. With this experience, God willing, we are confident that our future projects will go on as planned."

Meanwhile, Emkay has built 272 residential units and 205 shop offices at NeoCyber.

Being built in four phases since 2007, the development is into its third phase, which started last month and slated for completion by June 2010.

By Business Times (by Zuraimi Abdullah)

Global crisis won't derail Malton's regional ambitions

Chief operating officer Yeoh Teng Tatt said the crisis will not derail plans to expand its property developments regionally nor will it derail any current projects.

"We are exploring potentials abroad and will carry out feasibility studies when something materialises. In the meantime, we will proceed to develop current projects as per plan even if we are suffering from thinner (profit) margins," Yeoh said.

The main board-listed firm's current outstanding order book totals some RM2 billion, which will keep it busy until 2011.

Yeoh said Malton is expected to do better this year, encouraged by sales from its recently launched projects including Amaya Saujana, V Square, Pearl Villas and Bayu Villas.
"For new launches, we did quite well for the higher-end products, which are more resilient to the market (slowdown)," Yeoh said.

For fiscal year ended June 30 2008, it posted a net loss of RM3.1 million from a net profit of RM4.7 million in 2007.

While there may be no further launches for the rest of this year, Malton is gearing up to launch its maiden signature condominium project in Penang, dubbed The Mansion@Cantonment, also the first for the firm outside the Klang Valley, by early next year.

It is a 36-storey block with duplexes fronting the sea and city worth RM47 million.

Also in the plan is to launch a mixed-commercial project in Taman Maluri, Cheras, worth some RM200 million, by March 2009.

"We are fortunate to have an in-house construction arm to plan our resources. This holds water for our next launches," Yeoh said.

To augment its landbank and continue with its property developments especially in Johor, Malton recently bought Austin Heights Sdn Bhd (AHSB) for RM103 million.

AHSB is involved in a 78.8ha project called Austin Heights in Tebrau, Johor, comprising houses, condominiums, retail units and schools.

By Business Times (by Sharen Kaur)

Nomad unveils serviced offices at Pavilion KL

The Nomad Group Bhd's unit has unveiled its latest serviced offices, The Nomad Offices Pavilion KL, situated in Bukit Bintang to cater to business professionals.

They are located on the eighth floor of the shopping centre and will be the sixth Nomad offices available in the central business district of Kuala Lumpur.

The serviced offices offer fully furnished and unfurnished office suites, virtual office, meeting rooms, business lounge and video conferencing facilities, in addition to office support services.

They will cater to retail-based companies, not only to be used as their corporate headquarters, but also as satellite offices.
"The smaller fully furnished office suites of three to four workstations can be expanded to increase floor space and accommodate more workstations," Nomad Group chief executive officer Hew Thin Chay said in a statement.

By Business Times