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Thursday, December 31, 2009

A good time to buy

I attended the wake of a distant family member who passed away earlier this year. As we sat in his car porch, drinking our mineral water and muttering platitudes, a family member stood up and declared, “good riddance to bad rubbish” and then sat down again, looking satisfied. Much as I admire and enjoy eccentric behaviour and will always support freedom of speech, I thought this remark was a little ill-timed, denying the target his right to initiate the customary hundred million ringgit suit for defamation.

I shall treat the passing year with appropriate reverence and respect. Suffice to say, it marked the 50th anniversary of the kidney transplant. Now, can we move on please?

But before we do, let me spotlight a couple of non-events that didn’t seem to make the news. Firstly, have you noticed you are no longer being beseeched to buy land in England? And that owning a plot in Canada is no longer your passport to the good life? There are reasons for this. In March, Walton International Property Group, a company which enjoyed prominence here for a while, was raided by Bank Negara following suspected breaches of the Exchange Control Act.

Bank Negara warned the public to be cautious of this type of land banking scheme. Then in October the Companies Commission carried out three simultaneous raids on UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (M) Sdn Bhd for alleged breaches of the Companies Act as well as the commission’s policy guidelines.

It transpires that one of the companies is already facing winding up proceedings in the United Kingdom. According to the British Financial Services Authority, which initiated these winding up proceedings, UKLI Ltd had over 4,500 investors but none of the land sold had ever received planning permission.

The other curious non-event was that the Kuala Lumpur 2020 City Plan was not gazetted. If you recall, this was the plan drafted in 2008 which reviewed permitted land use and densities. We are told that gazettal will take place in 2010 but there is still time for appeal. This may be your last chance, although only history will record whether this has been a quixotic attempt at reform or whether the task of master planning a city as dynamic as KL is really feasible.

And so here we are, arguably entering a new decade or possibly nearing the end of the old one, depending on whether you start counting from zero or one. (A book that has made a lasting impression on me is, How to Lie with Statistics. Did you know that the average human being has one breast and one testicle?)

Now that 2009 is over, we can probably lower the storm flags over the property market, although I wouldn’t fold them up and stow them away just yet.

Retail and office space looks well moderated but there is still a hefty supply of top-end condos in the pipeline. And we may not have seen the worst of the non-performing loans.

Developers’ friend

Looking ahead, the Government may face difficulty controlling inflation, which is dubbed ‘the developers’ friend’ and which generally pushes values upwards. My long-range forecast is for our next boom to come around in 2013, and there has probably never been a better time to buy, than now.

This is the last in my series, but before I wish you a Happy New Year and Goodbye, I want to share with you one abiding experience that has made this festive season a truly cheerful one for me.

Coming out of Subway last week after a quick lunch, I nearly tripped over a young man sitting on the kerb, apparently gesticulating wildly into thin air. On closer inspection I saw he had his handphone propped between his knees. He had the camera on. Deaf and dumb, he was ‘talking’ to his friend. God bless him, and hooray for technology. There is hope for humanity yet.

Chris Boyd is executive chairman of Regroup Associates Sdn Bhd, property consultants. We welcome your feedback on this article. Please write to


Ho Hup sees RM400m GDV for Jalil Green City

HO Hup Construction Company Bhd, the country's oldest construction company, expects a gross development value (GDV) of RM400 million for phase one of the Jalil Green City project.

The mega integrated lifestyle development project comprising eight phases of development will commence construction next year.

The first phase, consisting of eight-storey offices, five-storey offices and signature offices is expected to be completed in three years.

"We expect to finish all eight phases of development over 24 hectares of land between eight and ten years.
"Total GDV for the entire project will be RM1.6 billion," said Ho Hup Managing Director Lim Ching Choy to reporters after the company's extraordinary general meeting (EGM) here today.

The remaining seven phases will consist of unique suites, shopping mall, "class A" office lots and residential projects.

Lim said the company was now in the final phase of securing a RM120 million bank loan for the project.

"Next year will be bright for us after sustaining several years of losses. We expect a huge turnover from this project and from one or two other deals which we hope to secure. We are optimistic of securing medium-sized government projects which we tender for recently," he said.

Lim was confident the projects would return Ho Hup back to its glorious days before the financial meltdown.

"Our market share currently is lower than a sub-contractor but we will hopefully increase it by the end of next year to a significant level," he added.

Meanwhile, Ho Hup expects its property division to contribute 70 per cent for the group's annual turnover next year.

"We have no specific contribution percentage for now as it is not significant like it was before.

"The property division, before the company's financial meltdown, was contributing 80 per cent annually to group turnover," he said.

Ho Hup is driven by its three arms namely its property, construction and trading divisions.

Earlier, at the EGM, shareholders approved the resolution to dispose two parcels of freehold vacant land in Hulu Langat and Kuala Lumpur.

When asked about the internal tussle between the management and major shareholders, Lim said the company was currently focusing on a new direction for the company next year.

The tussle was made public in the media by major shareholder Low Tuck Choy, who alleged the Ho Hup management sold two parcels of lands in Balakong and Bukit Jalil below market value.

"The 2.2 hectare land in Balakong for instance, has a lot of disadvantages. There is no proper road or pathway to the land. Besides there is a river and drain reserve which the new owner will have to give up to the government, as required by the law, if he wants to develop the land.

"I believe the RM30 per square feet price tag is not low after considering all these obstacles that the buyer will have to face," Lim reiterated.

He said the company was open to further negotiations and welcomed the support and response of shareholders at each annual general meeting or EGM.

Low, however, was not present at the EGM.

By Bernama

CIMB to sell 65 properties to EPF for RM302m

The group is expected to make a gain of RM171 million from the sale of properties that house its banking operations.

CIMB Group is selling up to 65 properties that house its banking operations to the Employees Provident Fund (EPF) for RM302.4 million in a related-party sale and leaseback deal.

The group, in an announcement yesterday, said the sale will raise cash for CIMB Bank's working capital, reduce its risk-weighted assets by the book value of the properties and reduce its property risks.

The group is expected to make a gain of RM171 million from the sale.

The properties are currently used to house CIMB Group's banking business operations such as branches and offices.
The sale and leaseback deal will be not be its first.

It sold and leased back its current head office, Bangunan CIMB, and Menara Bumiputra-Commerce.

In late 2007, CIMB group managing director and chief executive officer Datuk Seri Nazir Razak said it was mulling over a third sale and leaseback exercise on some buildings as part of its plan to manage capital more efficiently.

The EPF is a major shareholder in CIMB Group, while Nazir is a member of the pension fund's investment panel. He abstained from voting on the deal.

By Business Times

CIMB selling properties for RM302mil

KUALA LUMPUR: CIMB Group Holdings Bhd said yesterday that it is disposing 65 properties to the Employees Provident Fund (EPF) for RM302.5mil as it is not in the business of owning properties.

The group was expected to gain up to RM171mil from the disposal, it said in a filing with Bursa Malaysia.

The rationale of the disposal was to reduce the group’s exposure to property risks as well as to raise money for working capital purposes of CIMB Bank, the group said.

The properties are presently used to house CIMB Group’s banking business operations such as banking branches and banking offices.

The disposal is expected to be completed in the first quarter of 2010, it said.

It added that CIMB Bank had entered into a lease agreement with EPF for the properties concerned.

By Bernama

Hunza Properties buys land for RM82m

HUNZA Properties Bhd has bought four plots of freehold land in Penang for RM82 million.

In a statement to Bursa Malaysia, it said the rationale behind the proposed acquisition is because the group is principally involved in property development and investment, which are currently focused in Penang and Kuala Lumpur.

The acquisition will enable the group to increase its landbank for future development and/or investment, at the same time continue its expansion plans in Penang.

By Business Times

Mydin to open 4th outlet in Malacca

Due to encouraging response from the public, Mydin Mohamed Holdings Bhd will build a RM67 million wholesale hypermarket next March in Bandar Jasin Bistari, its fourth outlet in Malacca.

Its managing director Datuk Ameer Ali Mydin said land acquisition for the six-hectare factory site will cost RM7 million and construction another RM60 million.

He said the continued confidence in the people's purchasing power prompted Mydin Mohamed Holdings to invest in another hypermarket in the state.

"The state government is offering various incentives to woo investors to turn Malacca into a shoppers' paradise for tourists," he said, adding that construction of the factory will begin in March 2010.
"The hypermarket will be ready for commercial operations in May 2011 and provide business opportunities for local retailers," he told reporters in Malacca yesterday after a signing ceremony for the purchase of the factory land from the Melaka Customary Lands Development Corporation (Pertam).

Malacca Chief Minister Datuk Seri Mohd Ali Rustam witnessed the signing of the agreement between Ameer, who signed on behalf of his company, while Pertam was represented by its deputy chairman Datuk As'ari Ibrahim.

Ameer said Mydin's biggest hypermarket is operating at the Melaka International Trade Centre (MITC) and generated a monthly turnover of RM18 million while another two outlets operated at Melaka Sentral.

By Bernama

Wednesday, December 30, 2009

Property developers to gain in 2010

PROPERTY developers will continue to emerge as key winners in 2010, driven by rising demand and improving economic outlook, according to an analyst at MIDF Research.

Moving into 2010, he said players would continue to ride on the sector's buoyant recovery based on the improving number of property sales coupled with declining number of overhang units since the first quarter of 2009, the analyst, who declined to be named told Bernama recently.

For 2009, it was an unanticipated recovery story as the sector had outperformed expectations in becoming one of the leading segments in the stock market.

Share price of property companies, which is measured by the KL Property Index, in fact outpaced the benchmark FBM KLCI.
However, the analyst pegged a "Neutral" outlook for the property sector in 2010.

"Despite encouraging sales demand and improving economic sentiment, the fear of demand sustainability, upon the withdrawal of cheap credit, absence of attractive promotions and favourable regulations may take its toll on the property sector," he said.

However, the growth driver in 2010 will be, among others, the favourable regulations, continuous governmental support, a thriving property market taking its cue from an improved economy and the ability to attract foreign direct investment flow.

"Sales demand for residential properties are expected to remain buoyant as investors continue to deem it as one of the more liquid hedging asset. Speculators are also taking advantage of the current market sentiment to lock-in on gains," he said.

A survey across key property players revealed that none was slowing down their pace of project development.

Many were, in fact, taking advantage of the current discounted valuations to replenish land banks and were not holding back new launches.

The analyst said key players have signaled that take-up rates of residential properties have remained strong between 80 per cent and 90 per cent in the last quarter.

"Hence, we are confident residential property sales will remain buoyant, at least within the first half of 2010. We are estimating at least 25,000 new units to be launched over the next quarter," he said.

On the retail/shopping complex and office front, he expected continued oversupply of units, notably in the Klang Valley, as many have been under construction over the past two to three years.

Many corporations and businesses are also holding back relocation plans until the financial crisis is over.

Meanwhile, issues that may dampen the sector's recovery include the re-introduction of the Real Property Gains Tax (RPGT), possible pullback in sales demand due to withdrawal of cheap credit, unanticipated rise in raw material prices thus raising average selling prices and delaying launches and approvals.

"We do not expect any immediate impact from the reintroduction of the RPGT and it was mainly to control the secondary sales market. On the flipside, it may discourage foreign investments in commercial properties," he said.

He said the tax was introduced too soon as the economy was still on the verge of recovery but understood the need for it to curb another asset bubble.

On the Real Estate Investment Trusts (REITs), the analyst does not expect it to be a star performer in 2010 but expects some interest in this segment.

He said the average rental yield for offices and commercial properties was on a downtrend in 2009, with rental for offices falling 1.9 per cent, year-on-year, and 1.35 per cent, year-to-date, within the Klang Valley.

However, the recovery in the property market coupled with an exemption from RPGT and stamp duty will see rising interest in REITs which currently yield an average return of between eight and nine per cent in Malaysia.

On the status of Malaysia's property market, the analyst said he did not expect any property bubble in the immediate-term.

"Appreciation of property prices have been modest so far as demand recovered slowly as investors' confidence returns," he added.

Prices of properties, nationwide, declined 9.8 per cent, year-to-date, due to the economic crisis, but gained 1.40 per cent, year-on-year, due to renewed interest emerging in the second quarter of 2009.

"Nevertheless, assuming the presence of cheap financing, attractive promotions and favorable regulations continue into 2010, coupled with new launches and delivery in 2010, property prices may face an upsurge," he said.

And, despite the Dubai's debt crisis, he said Malaysia would still be able to attract Middle Eastern investors who still reaped positive yields from investing in the country's property market.

The main challenges in the property market will be demand fundamentals, whether it can be sustained, and from another point of view, what else can be offered by both property players and financial institutions to support the growing demand.

"One would be cheap cost of fund (credit). Assuming overnight policy rates are raised back to pre-2006 days of 3.50 per cent, can demand be sustained? Secondly, assuming a second dip does occur, can the property segment take it in its stride?" he said.

The analyst said residential properties will continue to be favorites amongst investors who still demanded mid-to-high-end properties.

"We noted in the second quarter that properties priced between RM250,000 and RM500,000 and between RM500,000 and RM1 million were favorites and registered sustained growth," he said.

Residential properties have historically proven to be good hedge instruments with attractive capital appreciation, while commercial and office properties may see a dip in demand, against a backdrop of new launches, except for those Grade-A offices located in sub-urban areas.

Demand for properties around Kuala Lumpur City Centre is recovering as prices within the vicinity improved in the third quarter with stable rental yields.

As for industrial properties, he said the segment would move in line with the nation's economy.

The analyst was also of the opinion that the property market needed a boost in the form of incentives, that included tax reduction for sub-urban developments, cheap credit, continuous efforts to draw foreign direct investments and for local small players to have joint-ventures opportunities with state governments.

By Bernama

YNH optimistic of projects

PROPERTY developer YNH Holdings Bhd plans to launch two luxury projects, worth a combined RM1.6 billion, in Kuala Lumpur next year.

Its head of corporate services, Daniel Chan, said the company was optimistic of good response, given the product offering and location.

The Ipoh-based developer targets to launch Fraser Residence in Jalan Sultan Ismail and Kiara 163 in Mont'Kiara in the first quarter and second half respectively.

Fraser Residence willl comprise 450 condominium units. Kiara 163, located next to Plaza Mont'Kiara, will feature 580 condominium units, a four-storey mall and a 28-storey office tower.
"We are confident of the two launches as the location of our properties is very strategic. At the end of the day, it's all about location, location and location," Chan told Business Times.

The projects will keep YNH busy for the next five to eight years.

Other projects on hand include its bread-and-butter 400ha Sri Manjung township in Perak, which is expected to last the company for 20 years.

"We will launch new phases next year at the township to keep up with demand, thanks to new developments taking place," Chan said.

He cited the iron ore plant in Teluk Rubiah proposed by Brazil's Vale International SA, the world's second largest diversified metals and mining company.

Chan also expects sales to improve because of developments at Kencana Petroleum Bhd's fabrication yard in Lumut and the Lumut Naval Base.

"We will focus on a few developments and not overexpose ourselves. We have a low gearing of 0.3 time and want to keep it at that.

"We have cash of RM100 million coming in soon from Ceriaan Kiara and Fraser Place KL and will use some of it to fund our new projects."

Chan is confident of YNH posting profits in its fiscal year ending December 31 2009.

He said that while earnings may dip slightly this year, 2010 net profit and revenue are expected to surpass 2008 results owing to the bigger developments coming up as well as sales from existing projects.

Last year, YNH made RM86.8 million net profit on revenue of RM350 million.

By Business Times (by Sharen Kaur)

Ho Hup appoints valuer for sale of land parcels

PETALING JAYA: Ho Hup Construction Co Bhd said it had instructed an independent firm to conduct a valuation of the parcels of land it planned to dispose.

In a filing with Bursa Malaysia, the company said the market value for the first plot of land in Balakong was valued at RM30 per sq ft while the parcel of land at Bukit Jalil was valued at RM50 per sq ft.

“With the disposal of the (two pieces of ) land, Ho Hup is expected to realise an estimated gain of RM9mil after deducting estimated expenses in relation to the proposed disposals,” it said, adding that this would help the company pay a portion of its existing bank borrowings and for working capital purposes.

It was reported that there was a growing rift between the company’s management and a major shareholder over the valuation of the two plots of land.

On the platter are two resolutions to be put to the vote at the group’s EGM on Dec 31 for the disposals of the two parcels of land.

The first resolution at the EGM was for the disposal of a piece of land in Balakong for RM7.2mil while the second resolution is for the sale of a land in Bukit Jalil to raise RM5.7mil.

By The Star

Mydin to build 4th hypermart in Melaka

MYDIN Mohamed Holdings Bhd will build a RM67 million wholesale hypermarket next March in Bandar Jasin Bistari, its fourth outlet in Melaka.

Its Managing Director, Datuk Ameer Ali Mydin, said land acquisition for the six hectare factory site would cost RM7 million and construction another RM60 million.

He said the continued confidence in the peoples' purchasing power prompted Mydin Mohamed Holdings to invest in another hypermarket in the state.

"The state government is offering various incentives to lure investors to turn Melaka into a shoppers paradise for tourists," he said, adding that construction of the factory would begin in March 2010.
"The hypermarket will be ready for commercial operations in May 2011 and provide business opportunities for local retailers," he told reporters in Melaka today after a signing ceremony for the purchase of the factory land from the Melaka Customary Lands Development Corporation (Pertam).

Melaka Chief Minister Datuk Seri Mohd Ali Rustam witnessed the signing of the agreement between Ameer, who signed on behalf of his company, while Pertam was represented by its Deputy Chairman Datuk As'ari Ibrahim.

Ameer said Mydin's biggest hypermarket was operating at the Melaka International Trade Centre (MITC) and generated a monthly turnover of RM18 million while another two outlets operated at Melaka Sentral.

The Bandar Jasin Bistari hypermaket is expected to cater for consumers as far as Muar and Tangkak and will be Mydin's 48th outlet in the country providing employment for about 280 people.

By Bernama

Tuesday, December 29, 2009

RM1.7bil housing project taking shape

Sales promotion of at the Senibong Cove office in Permas Jaya during a function held there on Dec 21. - The Star

Iskandar Waterfront teams up with Aussie group to develop waterfront residences in Plentong in two years

JOHOR BARU: Senibong Cove, a waterfront housing project here with an estimated gross development value (GDV) of RM1.7bil, is scheduled to be completed in two years.

The development is a joint venture between Iskandar Waterfront Development Sdn Bhd and Australia’s Walker Group.

“Walker Group is one of the leading developers in Australia and the whole residency is similar to the housing project in Hope Island, Australia,” said Quay Chew Keong, the project’s director.

“The whole residency will have four different parks and all the houses will have gardens or a view of the water.

“We have not started officially advertising for buyers as yet but 90 (people) have already registered for the houses,” he added.

The project, located in Mukim Plentong, features cluster houses, semi-detached houses, bungalows, apartments, luxurious apartments and terrace houses, with prices ranging from RM290,000 to RM1.8mil each.

“Other than that, residents would also be able to enjoy the facilities of a marina with 70 to 100 berths,” Quay said.

He added that the project was located directly opposite the Sembawang Shipyard.

Johor Mentri Besar Datuk Abdul Ghani Othman will formally launch the project early next year.


Malaysian firm participates in building world's tallest building

A labourer works at Burj Dubai in Dubai. — Reuters

DUBAI: The soon-to-be-opened Burj Dubai is entering the record book as the world’s tallest building and sharing this honour, is Malaysian structural steel construction firm, Eversendai Corp.

According to group managing director Datuk A.K. Nathan, the final 260m of the soaring tower was an all-steel structure, and Eversendai had the privilege of putting it up successfully.

“In fact, we’re the first company in the world to have worked above 700m. No one in the world has worked above this height,” he told Bernama in Dubai.

Previous reports have mentioned that Burj Dubai is over 800m tall with more than 160 floors.

Its developer Emaar Properties is keeping mum about the actual height of the gleaming tower, amid statements that its spire can be seen 95km away.

Burj Dubai is to be inaugurated on Jan 4, 2010 by United Arab Emirates (UAE) vice-president and prime minister, and ruler of Dubai, Sheikh Mohammed Bin Rashid Al Maktoum.

Nathan said Eversendai also carried out structural steelworks on other parts of Burj Dubai.

Alluding to the last 260m of the super-tall building, Nathan said it was a highly complex structure needing precise design, fabrication and contruction processes. “And we’ve done everything to the full satisfaction of our client without any kind of accident,” he said.

He also said Eversendai had good working relations with the tower’s main contractor, Samsung Corp of South Korea.

Tracing Eversendai’s history in the UAE, he said: “I first came here in the mid-90s and our first job was the Burj Al Arab hotel, off the coast of Dubai.”

Then came a slew of other projects in the UAE, Qatar and other places worth billions of ringgit for Eversendai. Qatar is a particularly bright spot for Eversendai, which is currently involved in projects such as the new Doha international airport and the Dubai Towers-Doha.

Nathan reckoned that it had not been easy for Eversendai to be where it was now.

“A company that wants to venture overseas must have developed its own capability as well as possessed a measure of financial strength.

“If you don’t have these, it’s very difficult to penetrate thte overseas markets. I mean, asking support from the government is one thing. But the government also has its limitations,” he observed.

By Bernama

Lii Hen to buy land

LII Hen Industries Bhd’s subsidiary, plans to buy three plots of land with buildings in Muar, Johor, for RM2.2 million.

Kejora Juara Sdn Bhd, the group’s property investment arm, has entered into an agreement with Paragon Progress Sdn Bhd, to acquire the properties to house a majority of the group’s foreign workers.

The properties, which are located about 500 metres away from the group’s major plants, are expected to offer more easy management.

The group will fund the acquisition through internally generated funds.

By Business Times

Crest Builder wins RM175.5mil job

PETALING JAYA: Crest Builder Holdings Bhd has been awarded a contract valued at RM175.5mil by SP Setia Bhd for the construction of “superstructure” works of two 40-storey serviced apartments along Jalan Tun Razak and Jalan Raja Muda Abdul Aziz in Kuala Lumpur.

The company said in a filing with Bursa Malaysia yesterday that the project was expected to be completed in 24 months from date of site possession on Jan 2, 2010.

By The Star

KFH signs US$242m real estate deal in Chicago

KUWAIT: Kuwait Finance House (KFH), the country’s biggest Islamic lender, said it signed a US$242 million (US$1 = RM3.42) real estate deal in Chicago.

KFH owns 95 per cent of the project, the remaining 5 per cent is owned by Prism Co.

“KFH will focus on income producing assets with attractive yields and guaranteed occupancy levels,” it said.

In August, the lender said it was tying up with US apartment building owner UDR Inc to buy high income property in the US.
The joint venture seeks to acquire investments of up to US$450 million in major cities in the US.

By Reuters

Monday, December 28, 2009

RM6m refurbishment, rebranding for Mint Hotel

Property tycoon Tan Sri Lee Kim Yew, the owner of Mint Hotel, is now drafting a business plan to turn the hotel around

The three-star Mint Hotel along the Kuala Lumpur-Seremban highway will undergo a RM6 million refurbishment and rebranding programme and re-open by the first half of next year.

Property tycoon Tan Sri Lee Kim Yew, the owner of Mint Hotel, said he is now drafting a business plan to turn the hotel around, which had ceased operations since February 2005.

This follows the conclusion of Lee's acquisition of Mint Hotel from Ambank (M) Bhd for RM45 million, which Lee said was not voluntary.

A sales and purchase agreement was signed with the liquidator, Ernst & Young, in June this year, via his privately-held firm Lambang Raya Sdn Bhd.
"The hotel is not worth that much now. I am a victim. If i don't buy it, the bank will sue me. I will end up in a legal suit. I am caught because of the undertaking I had with the bank a few years ago," Lee, who is also the founder and executive chairman of Country Heights Holdings Bhd, told Business Times.

Property valuers have estimated Mint Hotel to be worth some RM23 million.

Ambank declined to comment.

The issue started when Jennico Associates Sdn Bhd, which is 50 per cent owned by Lee through Lambang Raya, was liquidated by a creditor in January 2000.

At that point, Jennico had already defaulted on a term loan of RM47 million granted by AmFinance Bhd in 1995, under the stewardship of Datuk Major (R) Zulkifli Abdul Mokti and KifliMokti Sdn Bhd, who owns the balance 50 per cent of the company.

Mint Hotel was then auctioned by Ernst & Young in 2005 and this attracted many bidders, including Lee, Lotus Family Group and Majestic Hotel.

They were keen to buy the 413-room hotel as it overlooks the Selangor Turf Club race course and is close to the Mines Exhibition Centre, Mines Wonderland, the Mines shopping mall and a golf course.

Business Times reported in August 2006 that Lotus won the bid to buy the hotel.

But a tussle broke as Lee claimed he was the rightful owner of the property.

According to Lee, he had submitted a bid for RM55 million for the hotel in October 2005 after being advised by AmBank, and a 5 per cent, or RM2.75 million, deposit was made to Ernst & Young.

Lee said his bid was based on a letter of undertaking he signed with Ambank in October 1995 stating that he will buy the hotel for RM55 million in the event of default of a loan taken by Jennico.

By Business Times (by Sharen Kaur)

Mega success in property deals

SEVERAL years ago, real estate agents and practitioners attended the Malaysian Annual Real Estate Convention primarily to fulfil their statutory obligation in obtaining 10 Continuous Professional Development (CPD) points - required by the Board of Valuers, Appraisers & Estate Agents - to renew their certificate of practice annually.

In the last few years, this has changed somewhat. The quality of such conventions, now known by its catchy acronym MAREC, has improved. Practitioners now no longer look at the convention simply as an avenue for them to obtain their necessary points. Instead, MAREC has now built a reputation as a platform for estate agents to learn, expand their mind as well as meet and network among their peers, all in an environment of friendship and comradeship.

Recently, MAREC which is organised by the Malaysian Institute of Estate Agents (MIEA) has taken another turn for the better, with more focus on training programmes for negotiators. MIEA recognises the importance of negotiators in an estate agency and the need for them to be continuously trained.

As such, MAREC 08 and MAREC 09 were remodelled to encompass entire sessions centred on negotiators. Parallel training sessions were organised for negotiators and have proven popular with negotiators, with larger numbers of them attending each year.

MAREC 10 is no different. An entire day has been set aside for negotiators. Topics have been chosen with great care, to ensure that they meet with the highest standards possible. MIEA has sought views and opinions from negotiators themselves to help formulate relevant topics and points of discussion.

Big deal
Among the topics at MAREC 10 include, “Road map to greater success in the profession.” This topic will guide negotiators through their journey to become registered estate agents. It will deal with professional examinations, required working experience, keeping of a work diary, preparing project papers and finally, attending and successfully passing the oral interview.

On hand to guide negotiators will be Kelvin Yip, who has over 20 years of experience in the real estate industry. Kelvin was in the Council of Management of MIEs for many years, having served in various capacities, including that of treasurer. He also served as a member of the Board of Valuers, Appraisers & Estate Agents and was the examiner for estate agents while in the board. Kelvin currently runs his own estate agency, Property Mall.

Meanwhile, estate agents can also look forward to topics like “Big deals count.” Every estate agent knows the never-ending battle within themselves, “Do I do many small deals in a year or do I focus on one or two big deals?” While there isn’t a correct answer to this question, it is common knowledge that some semblance of balance must be achieved to gain financial success. This session will deal primarily with handling big deals and how they will affect the estate agency. It will attempt to show practitioners that while doing the small “bread & butter” deals are important, true “mega success” can only come if big deals are concluded.

The presenter of this topic is Previndran Singhe, chief executive officer of Zerin Properties. Previndran graduated with a Bachelor of Surveying specialising in property management and valuation from UTM. He has worked in the hospitality industry in various capacities from operations analyst to chief officer marketing. He has more than 15 years experience in the property industry and was the winner of the “Real Estate Agent of The Year” award from MIEA this year.

“Size does not matter” is another topic that would appeal to participants. For a long time, the image of financial success has been equated to size. To a large extent, it has been proven true, as businesses continue to focus on expanding and growing bigger. But what about the practitioner who does not want to grow large, but yet seeks to do meaningful deals and get rich in the process? This session will attempt to dispel the myth that only large firms get all the big deals. It will give you pointers and help you create winning strategies, while remaining a small boutique agency.

Award-winning agency owner Govin Balaguru will talk about the pros and cons of big and small agencies. Govin started his career in engineering and ventured into real estate in 1982, setting up his own agency GDS Properties in 1992. His company was awarded “Commercial Agency of The Year” by MIEA this year.

MAREC 10 is scheduled for Jan 23-24 at the Putra World Trade Centre in Kuala Lumpur. On Jan 22, there will be a welcome dinner for delegates, VIPs and speakers. Participants will be able to network with fellow practitioners as well as with the speakers attending the dinner.

From now till Dec 31, early bird discounts are offered to members, non-members and negotiators. The convention is also open to the public at RM800 per participant.

- For details, contact MIEA. Tel: 03-79602577 / Fax: 03- 79603757 / E-mail: secretariat@ / Website: www.miea.

By The Star

YNH may revise tower project

PROPERTY developer YNH Holdings Bhd may revise the proposal to build a 45-storey Grade A office building in Jalan Sultan Ismail, Kuala Lumpur, after Kuwait Finance House (M) Bhd (KFHMB) aborted plans to buy part of the property.

The proposed YNH Tower was to have featured two wings on a luxury three-level retail podium. The development would take up 1.2ha next to the Shangri-La Hotel.

Changes to the original plan may be made after KFHMB decided against buying one of the wings for RM926 million.

YNH's head of corporate services, Daniel Chan, said it has received more than five offers from investors in Malaysia, Europe, Singapore and Hong Kong since the KFHMB deal was aborted. They include property and pension funds, private equity and real estate investment trusts, which want to buy the whole block.

"If they offer us a good price, we will sell them the whole block. Otherwise, we are in no hurry to sell. We aim to sell the first wing for more than RM926 million, and the second wing for around RM1.2 billion," Chan told Business Times.

By Business Times (by Sharen Kaur)

Dubai Properties axes top executives

DUBAI: Dubai Properties Group, owned by the ruler of Dubai’s holding company, replaced several executives including its chief financial officer yesterday and pledged better corporate governance to improve operations.

Changes at the property firm – a unit of Dubai Holding, the private company of Dubai’s ruler – included new chiefs of financial affairs, marketing, legal affairs, operations and property development, it said in a statement.

A planned merger between three of Dubai Holding’s property firms – Dubai Properties, Sama Dubai and Tatweer – and Emaar Properties was called off on Dec 9, adding to uncertainty about the debts of Dubai state-linked firms.

Flagship conglomerate Dubai World, faced with a US$26bil debt pile, rocked global markets on Nov 25 after it indicated a need to restructure.

Dubai Holding has about US$1.9bil of debt maturing in the first half of next year.

Dubai Properties said yesterday it would set an advanced corporate government framework “to ensure efficiency”.

By Reuters

KFH, not KFHMB, pulled out of Icon deal

KUWAIT Finance House (Malaysia) Bhd (KFHMB) has clarified that it is not a party to an aborted deal to buy a building in Kuala Lumpur.

Rather, it was Prompt Symphony Sdn Bhd (PSSB), a special purpose vehicle created by Kuwait Finance House KSC and a subsidiary of Autron Corp Ltd, that pulled out of a deal to buy The Icon building from Mah Sing Group Bhd for RM237 million.

KFH is the parent company of KFHMB. KFH would take up 80 per cent of PSSB while Autron would subscribe for the rest of the shares, according to Mah Sing's initial announcement on the deal in 2007.

"As far as KFHMB is concerned, it maintains a positive outlook in conducting business in the country and continues to seek potential investment opportunities," KFHMB said in a statement released last week.

By Business Times

KFHMB refutes new report’s allegations

KUALA LUMPUR: Kuwait Finance House (M) Bhd (KFHMB) has refuted an article titled Kuwait Finance House aborts deal to buy The Icon published in a local newspaper (not The Star) on Dec 25 and a related announcement made by Mah Sing Group Bhd on Dec 24.

In a statement, KFHMB clarified that it was not a contractual party to the sale and purchase transaction of the East Wing of the Icon property. The Icon is an upscale commercial development slated to become a 20-storey Grade A office building in Jalan Tun Razak.

Kuwait Finance said it maintained a positive outlook in conducting business in the country and continued to seek potential investment opportunities in line with the Government’s objective of making Malaysia an international Islamic financial Centre.

By Bernama

BSLI to buy land, factory for RM4.8mil

PETALING JAYA: BSL Corp Bhd’s wholly-owned unit Ban Seng Lee Industries (BSLI) has signed an agreement to sell a piece of freehold land in Gombak measuring 31,501 sq ft and a single-storey detached factory on it to MyDecor Marketing Sdn Bhd for RM4.8mil.

The gross proceeds would be used to repay bank borrowings (RM3mil), for working capital (RM1.7mil) and disbursements (RM100,000), BSL said in a filing with Bursa Malaysia.

BSLI’s operation will be transfered to a newly acquired freehold industrial land in Rawang.

By The Star

Crest Builder awarded RM175.5m contract

CREST Builder Holdings Bhd has been awarded a RM175.50 million contract by Exceljade Sdn Bhd, for the superstructure works on two towers of a 40-storey serviced apartment in Kuala Lumpur.

The contract was awarded to its a wholly-owned subsidiary, Crest Builder Sdn Bhd, the company informed Bursa Malaysia today.

The contract period is 24 months from the date of site possession which has been set out for Jan 2, 2010. The contract is expected to be completed by Jan 1, 2012.

Crest Builder said the contract will not have any effect on its issued and paid-up share capital or the substantial shareholder's shareholdings.
The contract, however, is expected to contribute positively to the earnings of the group for the financial years ending Dec 31, 2010 and onwards.

By Bernama

Friday, December 25, 2009

LOOKING AHEAD TO 2010: Property players upbeat on signs of economic recovery

PROPERTY developers are upbeat about their business outlook for 2010 as the Malaysian economy is set to recover.

The economy is expected to contract by 3 per cent this year but has been forecast to expand by up to 3 per cent in 2010. Prime Minister Datuk Seri Najib Razak has said he wants to do better and aim for a 5 per cent growth.

Ireka Development Management Sdn Bhd president and chief executive officer Lai Voon Hon thinks the sector could be in for a "mini boom" if the global economy stabilises.

But the availability of attractive mortgage rates and a low-entry cost to home ownership will be key for the sector in 2010.
"Signs of recovery are beginning to surface, albeit slowly. Buyers or investors who were sitting on the side, waiting for prices to bottom out or looking for distressed opportunities, are now returning to the market," Lai told Business Times.

The implementation of a 4 per cent Goods and Services Tax in mid-2011 could also benefit the sector as people may want to buy before houses cost more with the tax.

YTL Land & Development Bhd executive director Datuk Yeoh Seok Kian said having survived 2009, developers would be more bullish about 2010, with many anxious to move forward with their plans.

This means buyers can expect more launches in the Klang Valley, Penang, Johor and Sabah, featuring medium to high-end landed properties and high-rise residential and commercial towers.

But as the market regains confidence, developers may scale back incentives like discounts on downpayments.

Developers were also worried about the Real Property Gains Tax (RPGT) taking effect from January but this is no longer a concern as the policy has been reversed.

Now, only those who sell property within five years of purchase will pay the tax, as announced by Najib on December 23.

TA Global Bhd spokesperson Datin Alicia Tiah said developers will be more creative and innovative next year and develop products with a unique selling point to move sales.

Mah Sing Group Bhd group managing director cum group chief executive Tan Sri Datuk Sri Leong Hoy Kum said he expects strong recovery in demand for mid-tier to high-end landed properties.

He also expects appetite for commercial properties to improve.

A new scheme that allows Employees Provident Fund contributors to withdraw more from their Account 2 saving to buy their first house would also help the market.

However, the EPF has yet to announce details of this new scheme.

By Business Times (by Sharen Kaur)

Revision of property gains tax 'a perfect Christmas gift"

PETALING JAYA: The amendment to the real property gains tax (RPGT), which will be reimposed next year at 5% but now applicable only to transactions involving properties sold within five years from their purchase, is “a perfect Christmas gift” which will lift the local property market, analysts said.

Prime Minister Datuk Seri Najib Tun Razak announced the amendment to the RPGT on Wednesday, where the 5% tax would now only be imposed on properties sold within five years of the date of purchase.

The Government had previously wanted to impose the RPGT across the board, irrespective of the number of years of ownership, as announced in Budget 2010.

The premier had said the decision would cause the Government to lose about RM200mil in revenue, but the move was made following appeals from the Federation of Chinese Associations of Malaysia (Hua Zong) and the business sector.

The Government wanted to see stronger growth in the property sector next year in making the amendment, according to Najib.

Kenanga Research said the move to limit the RPGT to the five-year ownership ruling was definitely good news, adding that it would spare non-speculators from being penalised.

It noted that this would allow those holding properties for more than five years to sell their homes and recognise 100% of the capital gains.

“In turn, this spurs genuine property activities, which are supported by the country’s fundamentals, as opposed to speculative activities,” the research house said in a report.

Analyst Mervin Chow of OSK Research agrees that the amendment to the RPGT has ensured a much fairer policy as the 11th hour change in policy will benefit long-term property investors.

“(The amendment to the RPGT) is reflective of the main objective of having the RPGT in the first place, which is to rein in excessive speculation in the property sector,” he said.

ECM Libra Investment Research said the move was a “perfect Christmas gift for the property sector.”

“This will provide a much needed relief for the property sector as it sends an affirmative signal that the Government will adopt an accommodative stance to support growth in the property sector,” it said.

With the relaxation of the RPGT, ECM said buying interest might pick up, especially among those looking to upgrade their property ownship.

Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Ng Seing Liong said the property market would benefit from the amendment, and that it would have “a very significant stimulating effect” on property investments by both foreign and local investors.

“This can be acknowledged by the fact that the market reacted positively to the RPGT waiver in 2007 where increased sales and enquires were recorded,” Bernama quoted Ng as saying.

Propery player Naza TTDI also supported the amendment to the RPGT.

“With this new RPGT measure, we are confident the market will respond positively and this will help propel Malaysia’s property market among the other countries in the region,” Bernard Yong, a senior marketing manager with Naza TTDI, told StarBiz in an email reply.

Deloitte Malaysia country tax leader Ronnie Lim said the Government had done the right thing in imposing the RGPT only on properties sold within five years from the date of purchase.

“Prices of some property development companies’ shares have risen as the market showed its approval,” he noted in a statement.

But not everyone is excited about the RPGT amendment, with Regroup Associates Sdn Bhd executive director Paul Khong saying if there were any impact at all, it would be quite nominal. He noted that the move would basically encourage long-term investments in the sector.

“The RPGT has already served its original purpose of curbing speculation by holding to a five-year period. This is a long time and many short-term investors will continue to shy away from the market accordingly or weigh this into their purchase consideration,” he told StarBiz in an email reply.

The re-imposition of the RPGT has resulted in “the Malaysian property sector becoming slightly less attractive regionally as investors still have much choice locations to invest their money,” Khong said.

He reckoned that investors, especially foreign investors, would like to see a longer term and more consistent property policy, adding that recent policy changes pertaining to the property sector were short term and too sudden.

“Ever since Budget 2010 was announced, some property owners had been working feverishly to dispose of properties before Jan 1, 2010, the date when (the original) RPGT would be re-activated with tax levied on gains on disposals irrespective of the period of ownership,” he said.

A property buyer, who declined to be named, agreed, saying he had reaped the benefit of the RPGT before it was amended, as sellers were willing to sell at lower prices on the assumption that the RPGT would be implemented in full.

“I managed to buy an old aparment for RM160,000 although the market price was RM180,000 because the seller wanted to sell it fast, before the reimposition of the (original) RPGT on Jan 1,” he said.

By The Star (by Edy Sarif)

Higher, led by property stocks

Share prices on Bursa Malaysia closed firmer across the board yesterday, led by property-related stocks.

The benchmark FTSE Bursa Malaysia (FBM) Kuala Lumpur Composite Index reversed the morning's easier trend to finish 3.41 points higher at 1,263.94. It had opened 0.52 point lower at 1,260.0.

The revision of the real property gains tax policy bolstered renewed confidence in property counters and was described as the "perfect Christmas gift" for the sector.

"It provides a much needed relief to the sector as it sends an affirmative signal that the government will adopt an accommodative stance to support the property sector," said ECM Libra Investment Research in its research note yesterday.

The FBM Emas Index added 27.95 points to 8,421.43, the FBM Top 100 Index increased 25.48 points to 8,239.03, the FBM 70 Index advanced 38.15 points to 8,151.53 but the FBM ACE Index eased 17.99 points to 4,200.53.
The Finance Index rose 25.44 points to 10,905.94 prompted by Maybank which rose 3 sen to RM6.80 and CIMB Group which gained 2 sen to RM12.84.

Plantation stock PPB Group rose 30 sen to RM16.00 and Kuala Lumpur Kepong gained 2 sen to RM16.08.

Dealers said trading was moderate ahead of the long weekend amid positive sentiment buoyed by advances in regional markets.

The local bourse will be closed today for Christmas.

Gainers led losers 340 to 208 while 268 other stocks were unchanged.

AAG Consolidated was the most actively traded stocks but it eased 1/2 sen to 17 sen with 17.098 million shares changing hands.

Next on the actives list was Affin Holdings Warrants which also shed half-a-sen to 27 sen and Green Packet Warrants added 1/2 sen to 67 sen.

Among other actives, DSC Solutions fell 1.5 sen to 31 sen and Axiata Group was flat at RM3.02.

In heavyweights, Sime Darby fell 2 sen to RM8.97, Maxis added 1 sen to RM5.40 but Tenaga Nasional was flat at RM8.32.

Meanwhile, FBM KLCI futures on Bursa Malaysia Derivatives closed higher yesterday amid firmer underlying cash market, said dealers.

December 2009 rose 0.5 point to 1,264.0, January 2010 inched up 0.5 point to 1,265.0, March 2010 added 1.0 point to 1,265.0 and June 2010 went up 1.5 points to 1,265.5.

Total volume improved to 7,508 lots from 6,809 lots on Wednesday while open interest increased to 19,858 contracts from 17,561 previously.

By Bernama

Property stocks surge on gains tax move

PROPERTY stocks rose yesterday as investors bet developers would benefit from amendments to the real property gains tax (RPGT).

The tax, which comes into force next year, now only applies to those who sell properties within five years of purchase.

Shares of SP Setia Bhd, the country's biggest developer, rose 1.6 per cent to RM3.74, while those of United Malayan Land Bhd rose 4.5 per cent to close at RM1.40.

Shares of Glomac Bhd improved 4 sen to RM1.25, while IGB Corp Bhd ended up 3 sen to close at RM2.04.
Some analysts have upgraded the sector from neutral to overweight due to better property demand and the RPGT review.

The government had re-introduced the RPGT in the 2010 Budget announced in October. Under that announcement, the RPGT would be imposed on all properties sold from January 1 2010, regardless of the year of purchase.

But this was changed when on December 23, Prime Minister Datuk Seri Najib Razak said the RPGT will only be applicable to properties sold within five years from its purchase.

Real Estate and Housing Developers' Association (Rehda) chairman Datuk Michael K.C. Yam described the move as a New Year bonus for all.

"From equity point of view, economic sentiment and growth of the industry, it is a good move. A lot of people were aggrieved when the RPGT was announced and that anxiety has now been removed," Yam told Business Times via telephone.

But Yam said there should be clarity and certainty on the RPGT so foreign investors won't shy away.

Lingering concerns include whether the RPGT will exceed 5 per cent in future years.

Kenanga Research in a research report said the new rule would curbs speculative activities, mainly seen in the KLCC vicinity, Mont' Kiara/Hartamas and some areas on Penang island.

It would also allow those holding properties for over five years to sell their homes and recognise 100 per cent of the capital gains.

But the amendments to the RPGT also illustrates uncertainties in policy making, which may shake foreign investors' confidence, it said.

By Business Times (by Sharen Kaur)

Mah Sing to sell office building for RM226m

PETALING JAYA: Mah Sing Group Bhd has proposed en bloc sale of 278,182 sq ft of the 20-storey grade A commercial building, including 301 units of car park bays in the east wing of the Icon@Tun Razak, to T.S. Law Realty Sdn Bhd for RM226.5mil cash.

In a filing with Bursa Malaysia yesterday, Mah Sing said the Icon@Tun Razak was a freehold purpose-built office building by owned its subsidiary, Star Residence Sdn Bhd.

“The group pursued the proposed en bloc sale to ensure that it will be able to maintain its earnings, net assets and cashflow.

“And Star Residence offers to take up the tenancy of the Icon@Tun Razak for a period of three years commencing from the actual vacant possession date which shall correspond with the date of the sales and purchase agreement.

“Star Residence intends to lease the sale property for rental income in order to offset rental payable to the purchaser,” it said.

With the proposed en bloc sale, the Icon @ Tun Razak is fully sold.

In another statement to the exchange, Mah Sing said it had obtained the approval of Bank Negara for shareholder’s advance to its wholly-owned subsidiary, Mah Sing International (HK) Ltd, to subscribe to shares in its newly incorporated wholly-owned subsidiary, Mah Sing Property Consulting (Changzhou) Pte Ltd.

Mah Sing said it had remitted US$29.8mil on behalf of Mah Sing International for the subscription of the registered capital of Mah Sing Changzhou.

The intended business activities of Mah Sing Changzhou are property consulting and business consulting.

By The Star

Property JV to contribute RM66m to Sunway

PETALING JAYA: Sunway Holdings Bhd’s latest joint property development project in Singapore with Hoi Hup Realty Pte Ltd is expected to contribute earnings of about RM66mil over the project period, RHB Research Institute Sdn Bhd said.

The research house is assuming a profit before tax margin of about 20%.

In a filing with Bursa Malaysia on Wednesday, Sunway had said the 30:70 joint venture was expected to generate a gross development value (GDV) of S$420mil (RM1.03bil).

“The proposed joint venture is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the current financial period ending Dec 31 but is expected to contribute positively to the future earnings of Sunway group,” the group said in the statement.

The project, expected to be launched in mid-2010, features eight blocks of 12-storey residential flats (totalling about 500 units) with a clubhouse, multi-tiered basement car park, roof terrace and swimming pool.

The joint venture was signed between Sunway’s wholly-owned subsidiary Sunway Developments Pte Ltd and Hoi Hup Realty Pte Ltd and Hoi Hup JV Development Pte Ltd, to set up the joint venture company, Hoi Hup Sunway Property Pte Ltd.

RHB said the latest project was Sunway’s third partnership with Hoi Hup Realty and the first two ventures, also based on the same 30:70 equity structure, had been a great success.

The research house is also positive on the latest development in Sunway.

It said the project would help sustain Sunway’s property profits from Singapore beyond the next two to three years, upon the completion of the first two.

RHB has forecast that the first two property projects by Sunway in Singapore would contribute 21% and 28% to the developer’s total profit before tax.

Analysts said Sunway had been pretty aggressive in bidding for contracts locally and overseas.

It was reported that the group was bidding for foreign and local contracts worth about US$5.7bil.

Sunway is said to have an outstanding orderbook of about RM2.5bil. It has also been awarded a spate of jobs recently.

Early this month, the group was awarded a RM23.4mil job by Damansara Assets Sdn Bhd for piling and substructure works in Johor.

By The Star (by Leong Hung Yee)

Insas plans to buy more properties

INSAS Bhd is looking to buy more properties that can provide the group with sustainable earnings in the future.

In July this year, Insas together with a UK property group had bought a residential-cum-commercial property in London for RM128 million.

Director Wong Gian Kui said the new property will provide the group with an annual recurring income of STG1 million (RM5.5 million) each year from a 5 per cent rental yield.

The Chantery House Belgravia property comprises 29 apartments measuring 29,140 sq ft, with commercial space of 8,065 sq ft.
Insas bought the building close to the bottom of the London property market this year and believes that the investment will do well eventually.

Insas, which also deals in information technology, retail and stockbroking businesses, is financially healthy, with cash flow standing at close to RM500,000.

Its 2009 annual report stated that the group has RM430.6 million in bank deposits and RM30 million in cash.

In the current financial year ending June 30 2010, Insas has obtained a licence to carry out advisory and submission work in corporate finances activities.

"We have been successful in securing a number of advisory mandates. This new source of fee-based income will broaden our earnings base, increase our corporate client base and generate new sources of broking revenue," said Insas executive deputy chairman Datuk Thong Kok Khee.

The relaxation of capital controls for foreign investments has also opened up new opportunities for Internet broking.

"We are tying up with foreign stockbroking firms to access their global internet platform to enable our clients to buy and sell foreign securities. This will provide value-added services to our clients and further enhance our stockbroking revenue," he said.

Stockbroking business accounts for 15 per cent of Insas' revenue.

For the financial year ended June 30 2009, Insas' net profit almost tripled to RM57.1 million from RM20.8 million a year before. Revenue was up marginally to RM241.8 million from RM233.5 million.

By Business Times (by Rupinder Singh)

KFH aborts deal to buy The Icon

Kuwait Finance House (Malaysia) Bhd (KFHMB) has pulled out of a RM237 million deal to buy recently-completed The Icon, Jalan Tun Razak (East Wing) from Mah Sing Group Bhd.

The failed deal was announced by Mah Sing yesterday, which means that the RM42.67 million, being an 18 per cent upfront cost KFHMB paid earlier, has been forfeited.

Mah Sing also said that it has found a new buyer for the property in the form of T.S. Law Realty Sdn Bhd.

This is the second property deal that KFHMB has pulled out from. Last week, it had aborted its pact with YNH Property Bhd to buy the proposed 45-storey Menara YNH for RM920 million.

The property, which is yet to be built, is located on Jalan Sultan Ismail, Kuala Lumpur.
YNH had said that it was seeking legal recourse against KFHMB for backing out of the deal but the latter refuted, saying that their pact "was not legally binding".

Mah Sing, in its filing to Bursa Malaysia, said the deal was terminated after Prompt Symphony Sdn Bhd, a special purpose vehicle (SPV) set up by KFHMB and an Australian firm, failed to pay the balance of the agreed price.

Mah Sing, through wholly-owned Star Residence Sdn Bhd, had signed the sale and purchase agrement with Prompt Symphony in late November 2007.

Prompt Symphony is an 80:20 SPV set up by KFHMB unit and Autron Corp Ltd. It originally planned to buy The Icon, which measures 278,182 sq ft and will have 301 car park bays.

Prompt Symphony also signed with Maxim Heights Sdn Bhd, another Mah Sing subsidiary, to buy The Icon Mont' Kiara for RM285.4 million.

Mah Sing said that T.S Law Realty will pay RM226 million for The Icon Jalan Tun Razak's 20-storey East Wing.

"The Icon Jalan Tun Razak is the first purpose built grade 'A' office building in the vicinity of Kuala Lumpur City Centre to be completed with certificate for occupancy issued in 2009," it said.

Overall, the office building has more than 500,000 sq ft of lettable office space.

By Business Times (by Zuraimi Abdullah)

US home sales remain weak

BOSTON: The unexpected sharp drop in new home sales in the United States last month, coupled with rising mortgage delinquency rates, illustrates the delicacy of the current economic recovery after a brutal downturn.

The bursting of the housing bubble, which had been inflated by a lax credit environment, set off the worst US recession since the Great Depression of the 1930s.

While the economy shows signs of bottoming out, the surprise 11.3% drop in new home sales in November suggested Americans were still treading cautiously around major purchases, with recovery still tied to government money, analysts and investors said on Wednesday.

“Many people are looking at the rally in the stock market as a typical V-shaped recovery, that what worked before is going to work again,” said Keith Springer, president of Capital Financial Advisory Services, a money manager in Sacramento, California.

“They are not taking into account the demographic cycle that is changing. The biggest thing going on is you have an aging demographic turning from net spenders to net savers.”

Retirement-age Americans, many of whom have seen the value of their savings decimated by the drop in stock and house prices, are selling the large homes they raised their families in and buying smaller, more affordable dwellings.

By Reuters

Thursday, December 24, 2009

Expo centre a start for Naza in iconic projects

An artist's impression of the Matrade Centre in Kuala Lumpur.

PETALING JAYA: Naza TTDI Sdn Bhd is expanding its property business and building its brand image by venturing into more iconic projects in Kuala Lumpur and other parts of the country.

The construction of Malaysian External Trade Development Corp (Matrade) Centre building, located off Jalan Duta, will pave the way for such projects by the company.

The Naza group, well known for its automotive business, has a number of prominent projects including the KLCC Platinum Park and other residential and commercial developments in Ampang, Shah Alam, Kajang and Taman Tun Dr Ismail.

Last November, Naza TTDI signed a privatisation agreement with the Government and Syarikat Tanah dan Harta Sdn Bhd to build the Matrade Centre in exchange for 62.45 acres of prime land in Mukim Batu, off Jalan Duta, Kuala Lumpur.

The exhibition building will have a gross floor area of one million sq ft.

According to a company spokesman, construction of the Matrade Centre is expected to begin in the second quarter next year with completion scheduled for 2014.

He said the centre, with three floors to house 12 exhibition halls, would be linked to the existing Menara Matrade building.

Phase one of the project will comprise a 90,000-sq-m expo centre on 13.1 acres that is set to be the largest exhibition and convention centre in the country.

It will consist of the main exhibition centre, multi-purpose hall, auditorium, meeting rooms and display arena. There will also be a hotel, shopping mall and office tower.

On Tuesday, Kumpulan Jetson Bhd and TTDI KL Metropolis Bhd, a wholly-owned subsidiary of Naza TTDI Sdn Bhd, entered into a shareholders agreement to facilitate a joint-venture arrangement to plan, design and construct the Matrade Centre.

Kumpulan Jetson said in a note to Bursa Malaysia that a special-purpose vehicle – TTDI Jetson Sdn Bhd – would be set up, with Kumpulan Jetson and TTDI KL taking up 49% and 51% stakes respectively.

Besides the Matrade Centre, it will also develop the 62.45 acres which will be transferred from the Government to TTDI Metropolis in exchange for building the expo centre.

The mixed development, provisionally known as Naza KL Metropolis Development, will be developed over 15 to 20 years and will have a gross development value of RM15bil.

Based on a preliminary projection, the total project costs for the Matrade Centre is RM628mil.

It is understood that the company is talking to potential investors in the hotel and retail sectors.

By The Star (by Angie Ng) (Posted on 24th December 2009)

Mah Sing stamps mark in global arena

PETALING JAYA: Mah Sing Group Bhd’s RM2.2bil property project in Wujin District, China’s Jiangsu province, will mark the company’s foray as a serious player in the global market, said managing director-cum-group chief executive Tan Sri Leong Hoy Kum.

He said Mah Sing was keen on China because its property market was expected to do well as it had the right structure with population-led demand.

“With increasing consumer sophistication in the country (China), it gives opportunities for expatriate developers like Mah Sing to expand there,” he said in a statement.

In a filing with Bursa Malaysia on Dec 2, Mah Sing said its subsidiary, Mah Sing International (HK) Ltd, had jointly with Danlong Realty (Beijing) Ltd entered into a letter of intent with the Wujin District People’s Government, Changzhou City.

This was to develop the project, which would have a total gross development value (GDV) of RM2.2bil.

In the same announcement, the company said Mah Sing International and Danlong intended to establish a joint-venture (JV) company.

On the local front, Leong said Mah Sing had had a very good year so far, and its success could be attributed to the pre-emptive measures in terms of project planning, pre-construction, cost and cash management as well as marketing strategies.

“We have a healthy balance sheet with only 0.18 times net gearing as at Sept 30 due to our strong financials and branding.

“Mah Sing was able to introduce innovative marketing concepts like Easy Home Ownership programme which helped us exceed our sales target by 1.4 times.

“We achieved RM615mil for the nine-month period against our full-year sales target of RM453mil,” he noted.

Leong said the local property market was expected to gain momentum as the country had the third-highest savings rate in the region.

With this liquidity, coupled with low returns on fixed deposit rates, property remained an attractive investment, he said.

“Malaysia’s financing environment is still conducive with attractive interest rates and financing packages.

“The new scheme allows further drawdowns from Employees Provident Fund’s Account 2 to finance first-home buyers and will further increase affordability.”

Leong said the domestic outlook was turning brighter as more consumers were willing to buy big-ticket items like properties.

“All these factors should result in improved property demand in the coming months in anticipation of asset reflation as our properties are still among the cheapest in the region.

“We believe this will lead to a strong demand recovery in mid-tier to high-end landed properties,” he said.

An analyst with Maybank Research said Mah Sing’s entry into China was a strategy to growing its earnings base beyond Malaysia.

“Its maiden project in China is a baby step but a long-term positive move to growing its base and becoming a global player in the industry,” he said.

The analyst said the JV was targeting to develop residential and commercial properties in two phases, with an estimated total costs of US$620mil, starting in 2011.

Assuming a 20% pre-tax margin and 25% China corporate tax rate, the project could deliver RM395mil in net profits, with Mah Sing International getting RM202mil based on its 51% equity stake.

“We estimate this amount to be recognised over five to six years and that the project could add RM34mil to RM40mil in yearly profits,” he said.

Locally, the analyst said Mah Sing’s 3.4-acre land in Penang was slated for high-end residential development with a GDV of RM280mil.

The research house’s earnings forecast for Mah Sing remains unchanged, with a “buy” call on the stock and a target price of RM2.35.

By The Star (by Danny Yap) (Posted on 24th December 2009)

Sunway in S$420m Singapore project

SUNWAY Holdings Bhd expects its 30:70 joint property development project in Singapore with Hoi Hup Realty Pte Ltd to generate an estimated gross development value of S$420 million (RM1,030 million).

The project features eight blocks of 12-storey residential flats (totalling about 500 units) with a clubhouse, multi-tiered basement car park, roof terrace and swimming pool.

This is Sunway's first private property development in Singapore after previous state-backed projects at Boon Keng and Toa Payoh.

By Business Times

PNB confirms Kenanga building deal

PERMODALAN Nasional Bhd (PNB) has confirmed that it has bought the 22-storey Kenanga International Building in Kuala Lumpur from Injaz AsiaEquity Property.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman confirmed the purchase but did not reveal the amount spent.

"I cannot remember how much the purchase price was and I don't want to be quoted wrongly on this," he told reporters after announcing the income distribution for Amanah Saham Nasional in Kuala Lumpur yesterday.

Business Times had reported that the Kenanga International Building on Jalan Sultan Ismail, Kuala Lumpur, was bought for an estimated RM250 million.
The 22-storey commercial building with a three-and-a-half-storey annexed podium block was bought from Injaz AsiaEquity Property Bhd, which was jointly set up by Middle East Injaz Mena Investment Co and Singapore-based Asia-Equity Partners Inc.

Hamad Kama didn't elaborate on the reasons for the purchase.

Meanwhile, he said PNB is also considering listing its property arm at the right time.

PNB had merged three of its companies - Pelangi Bhd, Petaling Garden Bhd and Island & Peninsular - into one big property developer.

On the proposed 100-storey skyscraper to be built at the Stadium Merdeka site, Hamad Kama said a study is under way and is at a very advanced stage.

"The site is owned by one of our subsidiaries, Merdeka Ventures, and we are looking into it. We plan to have a board meeting soon to discuss this in detail before making an announcement on the matter which will be quite soon," he added.

Hamad Kama said although there were numerous people criticising the project, what was important to PNB was whether it could get good returns.

PNB manages a total of 102 billion units in trusts funds.

By Business Times (by June Ramlee)

CEO: PNB skyscraper study in advanced stages

KUALA LUMPUR: Permodalan Nasional Bhd’s (PNB) study of a proposal for a multi-storey building here is in “advanced stages,” according to president and group chief executive Tan Sri Hamad Kama Piah Che Othman.

However, he neither confirmed nor denied that the building would be a 100-storey skycraper.

Tun Ahmad Sarji Abdul Hamid (left) and Tan Sri Hamad Kama Piah Che Othman announcing the income distribution.

“Whatever assets we have, we need to do a proper study to ensure that the returns we achieve will be beneficial for our shareholders. The study (for the building) is in advanced stages.

“I’m not saying it will be 100 storeys, but we are going to develop something,” he told reporters after announcing the income distribution for its Amanah Saham Nasional (ASN) fund yesterday.

Hamad Kama Piah declined to comment on whether the evaluation was being undertaken by local or foreign consultants. The building is expected to be developed near Stadium Merdeka and Stadium Negara.

On the reason for the proposed development, he said: “We want to improve our returns. If you just rely on equity and the stock market – there are too many ups and downs. Through this diversification, it helps to improve our returns.”

On another note, Hamad Kama Piah confirmed that PNB had purchased the 22-storey Kenanga International Building in Kuala Lumpur from Injaz AsiaEquity Property but declined to verify that the purchase cost the company RM250mil.

He also said PNB was looking at the possibility of listing its property assets, namely Island & Peninsular Bhd, Pelangi Bhd and Petaling Garden Bhd. “It will depend on whether it would benefit our shareholders and if the timing is right.”

Asked on the progress of PNB’s 10 billion-unit Amanah Saham 1Malaysia (AS1M) fund, he said 2.96 billion units had been subscribed by 235,032 investors since its launch on July 31.

Subscription of the AS1M units is subject to an allocation of 50% for bumiputras, 30% for Chinese, 15% for Indians and the remainder for other minority groups.

Hamad Kama Piah said about 82% and nearly 20% of the Chinese and Indian quotas respectively had been filled, adding that there was “still a lot to go” for the bumiputra allocation.

He said PNB might extend the period for subscribing to the AS1M share trust units, which has a Dec 31 deadline.

Asked whether PNB expected the 10 billion units to be fully subscribed, Hamad Kama Piah said “it would take time,” adding that the company was currently conducting nationwide promotions to create more awareness of the AS1M fund to the public.

Meanwhile, PNB announced an income distribution of 5.2 sen per unit for its ASN fund for the financial year ending Dec 31, 2009.

The income distribution will involve a total payment of RM81.52mil versus RM79.9mil last year.

PNB chairman Tun Ahmad Sarji Abdul Hamid said based on the net asset value of ASN of 75.86 sen per unit on Dec 22, 2009, the yield derived from the income distribution of 5.2 sen per unit was 7.36%.

The price return for ASN for the same period is 25.75%.

“Therefore, based on the rise of the net asset value of ASN from RM0.5619 per unit on Dec 31, 2008 to 75.86 sen per unit on Dec 22, 2009, the total return recorded by ASN is 35.01%,” Ahmad Sarji said.

Up until Tuesday, ASN recorded a gross income of RM87.91mil. Of the amount, the profit from the sale of shares contributed RM55.46mil (63.09%) followed by dividend income that contributed RM23.75mil (27.02%), while RM8.70mil (9.89%) was derived from short-term investment instruments.

The income distribution of ASN is calculated based on the units held on Dec 31, 2009, which is the last day of the ASN financial year. The payment will benefit 1.19 million unit holders which currently hold more than 1.57 billion units of ASN.

By The Star (by Eugene Mahalingam)

Mall set to open its doors

Work in progress: Construction workers using heavy machinery to complete the stretch from Jalan Harapan to the shopping mall.

Traffic in Petaling Jaya is set to worsen when another shopping mall opens its doors soon unless the council speeds up work on the missing links and other alternative roads.

During a check yesterday, construction workers were busy completing the exterior of the mall while bulldozers and excavators continued to use a short stretch of the road which connects the mall to Jalan Harapan (Jalan 17/47).

The stretch had been tarred and some workers were busy working on the pavements. However, the stretch links it to an unnamed road behind two blocks of low-cost flats and shoplots.

The advertisments placed by the developer states that the five-level SStwo Mall is positioned to be a lifestyle neighbourhood centre and would be open by early next year.

A representative from developer IJM when contacted said their task was only to complete the part that connected Jalan Harapan and the mall’s parking entrance and exit point.

He also said the mall would not aggravate the traffic situation in the area as it had another entrance and exit point in Jalan 2/72.

Meanwhile, Petaling Jaya city councillor for the area Mak Khuin Weng said the MBPJ had approved the budget for work in Jalan Harapan as well as chosen a consultant for the remaining road work in the area which included a link from Jalan Harapan to the Sprint Highway.

He said the council was facing some technical problems and needed approval from the state government.

“Once we have appointed the consultant formally, we will give them to a month to prepare the relevant information and plans for the area.

“The residents will then be called by MBPJ for a meeting with the consultant,” said Mak.

At the council’s full board meeting yesterday, MBPJ mayor Datuk Mohamad Roslan Sakiman said a temporary measure to ease traffic from the Rothman’s roundabout was to introduce a traffic light system.

He also said a flyover had been proposed to be built over the Rothman’s roundabout but that this would have be discussed first with the residents at the Special Area Plan hearing for Section 13.

By The Star (by Christina Low) (Posted on 24th December 2009)

Property curbs fear as mainland firms pay record prices for sites

Record prices being paid for development sites on the mainland have heightened concerns that Beijing will introduce new measures to cool the property market.

A high-end residential site in Shanghai's Xin Jiang Wan Cheng district was sold to China State construction Engineering Corp yesterday for 3.72 billion yuan (HK$4.22 billion), or 32,484 yuan per square metre, the highest unit price for a mainland plot.

The price is 9 per cent higher than the previous record of 29,859 yuan per square metre that state-owned Beijing Dalong Estates paid for a site in the capital last month.

The purchase follows Tuesday's record 25.5 billion yuan paid for a single plot — a Guangzhou Asian Games City development site — by a consortium comprising Guangzhou R&F properties, Agile Property Holdings and Country Garden Holdings at another public auction.

Shanghai-listed China State Construction outbid eight developers to win the site. The price is 117 per cent higher than the opening bid of 1.72 billion yuan.

Xin Jiang Wan Cheng is a new luxury residential area in Shanghai. Prices of the most recent project in the area being developed by China Resources Land range between 45,000 yuan and 50,000 yuan per square metre.

Clement Luk, a deputy general manager at Centaline China in Shanghai, said China State Construction would have to achieve an average price of at least 55,000 yuan per square metre to generate a reasonable profit.

However, he said Beijing would not be happy with the record-breaking land prices, adding they could force the central government to issue more measures to cool the property market.

The sentiment was shared by Huang Tao, a project manager at Centaline China's Guangzhou office, following the price paid for the Asian Games City site.

However, he added that this was not the only challenge facing the three-member Guangzhou consortium. "This is the first time for them to develop a project together. They need time to adapt to each other," he said.

The market originally expected a consortium comprising state-owned developers China Vanke and Poly Real Estate Group to win the site as they had put together an opening bid of 16.5 billion yuan.

However, a property analyst said the aggressive bidding by R&F Properties surprised the state-owned developers. "We were one of the consultants of Poly Real Estate. We suggested the developer not submit a bid higher than 20 billion yuan," he said.

"It was easier for the privately owned developer to raise the upper limit of the bid as the process for the state-owned developers to do so is longer. They could not raise the limit just by making a call."

John So, an analyst at ICBC International Research, expects property sales volume to drop next year as Beijing tightens the mortgage market. "We won't see strong growth in property prices next year as new supply will increase substantially," he said.

By South China Morning Post (Posted on 24th December 2009)

Mayor wants link to open by next month

PETALING JAYA mayor Datuk Mohamad Roslan Sakiman wants the developer to open the road linking Ara Damansara and Tropicana by the end of January.

The link is still closed despite an order last month from the Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim to open it to ease traffic congestion at the much debated Jalan Tanjung.

Under an injunction, the road was to remain closed pending the completion of the Tropicana Tunnel, following strong objections from Tropicana residents.

Roslan confirmed that the injunction had been lifted and all legal matters were supposed to have been solved.

But the problem is, the road is in a bad condition and the developer needs four months to complete the repair work.

Road plan submitted by the developer had been approved and the company was also to meet nearby developers to discuss other matters.

“How do you expect the residents to wait for four months for the road to be opened?”

“The festive season is here and the relevant parties have to expedite it as it is a crucial situation we are facing here,” he said during a press conference after the Petaling Jaya City Council’s full board meeting yesterday.

This, and other road issues, made the council’s engineering department the target of criticism from councillors during the meeting.

The councillors expressed regret that the department tasked to monitor the contractors had actually gave in to their excuses for the delay in progress.

They highlighted the situation at the Lembah Subang tunnel connecting Ara Damansara and Taman Megah Mas, which would be closed until Jan 4 for upgrading work.

“There had been many delays, and the work is only 20% complete now.

“Can the contractor be sure that the tunnel be reopened before school starts?” asked councillor Tiew Way Keng.

By The Star (by Yip Yoke Teng) (Posted on 24th December 2009)

Wednesday, December 23, 2009

Property sector may face oversupply next year

From left: Ho Chin Soon, Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani and Raine & Horne International Zaki and Partners Sdn Bhd executive director Lim Lian Hong at the press conference

KUALA LUMPUR: The property sector may experience an oversupply next year due to a burst of launches from developers that have been held back since the start of the global economic crisis.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) president James Wong said developers would need to come up with “creative ways” to maximise sales.

“Because there will be a lot of launches next year, there will be a lot of supply, and the success of the take-up rates will depend on the marketing strategies of the developers,” he told a press conference on the 3rd Malaysian Property Summit 2010 yesterday.

Ho Chin Soon Research Sdn Bhd director Ho Chin Soon concurred, adding that there would be a pent-up from buyers that had been eager to get into the housing market.

“A lot of developers I have spoken to are preparing to launch in 2010. After over a year of waiting (since the global economic downturn hit), the public is hungry!” he said.

Wong said property transactions for 2010 were expected to be better than 2009, adding that the residential sector would see the biggest growth.

“With the recovery of the economy in 2010, the property market will also experience a slow, steady recovery. The residential sector has been quite resilient and should experience faster growth next year.”

Wong added that the secondary market for upmarket condominiums would remain soft until the second half of 2010 because of existing oversupply and new launches.

“However, the secondary market for landed residential property remains firm,” he said, adding that the average occupancy of high-end condominiums within the KLCC area was about 60%, with yields hovering at 5% to 6%.

Wong also said the shopping complex and office building sectors would face “some oversupply.”

“Many office building projects started two to three years ago are nearing completion and therefore are facing occupancy problems as companies are postponing decisions to relocate to bigger and more expensive premises.

“Hence the take-up rate of new Grade A office buildings in Kuala lumpur remains slow. Office rents will come down as more supplies (completed units) come in (to the market) by end-2010,” he said, adding that the hotels and industrial sectors should remain flat next year.

Wong said the hotel occupancy rate in Kuala Lumpur in the third quarter of 2009 was 66%, with average room rates reported at RM277.

“Owing to competition, many hotels are undergoing rebranding and refurbishment exercises,” he said.

PEPS will be organising the 3rd Malaysian Property Summit 2010 on Jan 26, 2010 at the Sime Darby Convention Centre.

By The Star (by Eugene Mahalingam)

Property sector likely to rebound next year

Malaysia's property sector is expected to rebound next year after experiencing a drop in the last two years due to the global economic crisis.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president James Wong Kwong Onn said many property companies are planning a comeback next year after a two-year hiatus that saw them adopting a wait-and-see approach.

"We expect to see an increase (in launches), especially in the residential sector. But it will still remain a buyers' market," Wong told a press conference to announce the Third Malaysian Property Summit 2010, which will be held on January 26, in Kuala Lumpur yesterday.

According to Wong the trend is the properties will be located more in areas where the new LRT line will be coming up as a lot of developers have purchased land around these areas, which are meant for residential development.

He expects the residential property market to see a pick-up as more people marry and have children.
"Although our property market is not recovering as fast as Singapore and Indonesia but viewed in perspective, our initial drop of 10-15 per cent (in demand) at the end 2008 was less severe as compared with Singapore and Indonesia's 25-30 per cent. As a result, Singapore and Indonesia have subsequently staged a higher percentage rate of recovery whereas the recovery in Malaysia showed a slower rate," he said.

Wong said foreign purchase may be affected by the reinstatement of the real property gains tax (RPGT) in January. Although the projected 5 per cent drop in potential capital gain is relatively small, its repercussions may be more damaging as it has reinforced a perception by foreign investors that government regulations in Malaysia are not consistent and this increases the risks of investments here. He added that this may significantly affect foreign direct investment into the country next year.

"When RPGT was introduced, the objective was to curb speculation. If this is still the rationale for RPGT, then properties purchased and held for more than five years as an investment and not speculative should not be subject to RPGT.

"We strongly urge the government to exempt RPGT for properties held more than five years, and bring forward the base year to January 1 2000," he added.

By Business Times (by June Ramlee)

Naza ropes in Jetson for Matrade Centre project

NAZA Group has drafted Kumpulan Jetson Bhd as a partner to develop the country's largest exhibition centre on 62.45 acres of prime federal land off Jalan Duta in Kuala Lumpur.

Naza, through wholly-owned TTDI KL Metropolis Sdn Bhd, and Kumpulan Jetson yesterday sealed a pact to form a 51:49 joint venture (JV) called TTDI Jetson Sdn Bhd.

Kumpulan Jetson will eventually get a RM628 million job to build the proposed Matrade Centre, which will have a one million sq ft of gross floor area.

TTDI Jetson will sign a proper development agreement with TTDI KL Metropolis once Kumpulan Jetson has obtained shareholders' nod for the proposed JV at an extraordinary general meeting to be convened soon.
TTDI Jetson will then award Kumpulan Jetson the contract to build the Matrade Centre for RM628 million, the latter said in a statement to Bursa Malaysia yesterday.

"The company will carry out the planning, design, construction and complete the Matrade Centre," Kumpulan Jetson said.

Naza Group joint executive chairman SM Nasarudin SM Nasimuddin and director SM Faliq SM Nasimuddin are major shareholders of Kumpulan Jetson, with a combined 29.79 per cent stake.

The brothers recently made an unsuccessful bid to buy the remaining Kumpulan Jetson shares not already owned by them.

TTDI KL Metropolis was previously awarded the privatisation of the 62.45-acre land by the government via a deal signed on December 21 this year.

The company will build the Matrade Centre for the government at its own cost.

In return for the exhibition centre, TTDI KL Metropolis has the exclusive rights to develop the land into a mixed project tentatively dubbed the "Naza KL Metropolis Development".

The project will boast of hotels, offices, residences and shopping malls, with a gross development value of RM15 billion over 15-20 years.

Naza and Kumpulan Jetson have estimated that they would have to fork out some RM800 million to render Matrade Centre functional plus the land premium for conversion of the 25ha into commercial status.

Given its 49 per cent shareholding in TTDI Jetson, Kumpulan Jetson said its portion would amount to at least RM392 million.

By Business Times (by Zuraimi Abdullah)