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Saturday, May 30, 2009

Developers still getting good sales from new projects

In every storm, there is a silver lining. Despite the current tough economic conditions, property developers are still able to launch new projects and fetch encouraging sales from ongoing projects, thanks to the low interest rates and attractive financing packages offered by property developers.

Based on banking data released in early May, approved loans for residential property surged 49% in March from the previous month.

According to developers, home buyers are not simply opting for cheaper homes due to the slowdown but are looking for good value buys as opposed to just a cheap sticker price.

That is reason enough for some developers to base their launches on their target markets instead of being compelled to switch to cheaper or affordable properties.

Most, if not all, major property firms are offering attractive financing packages to lure property buyers.

SP Setia Bhd launched its 5/95 home loan package in January. Under this programme, it registered sales of over RM500mil to date. It also targets to sell RM300mil worth of properties during the three-month extension of the 5/95 home loan package promotion from April 19 to July 19.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin says the sales figures show that the market is still active.

“Property players in Malaysia are riding out the challenge well. Many have come up with attractive packages to entice buyers,” he tells StarBizWeek.

Another property player, Mah Sing Group Bhd, also launched an easy home ownership programme that has lifted sales to RM170mil in the first quarter for the financial year ending Dec 31 (FY09), compared with RM115mil previously.

In fact, its group managing director and chief executive Datuk Seri Leong Hoy Kum says sales chalked up in the first three months of FY09 already represent 38% of its RM453mil full-year sales target.

“Attractive financing packages and low interest rates are increasing the affordability for buyers. Buyers will also look at various other factors including location, practicality of design, value-added features and branding as well as track records of developers to make their purchase decisions,” he says.

Paramount Corp Bhd managing director Ong Keng Siew says its home ownership scheme, which was launched early this year has helped grow its sales in recent months. He believes that the scheme will continue to help generate sales in the next two years.

The company recently announced that it plans to launch a mixed township development – Bayan Hills in Sungai Petani next year with a gross development value (GDV) of RM1bil.

Paramount has also launched 38 units of two-storey semi-detached industry property in Kota Damansara with GDV of RM120mil, of which 22 units were sold to date.

Mah Sing plans to expand its landbank for commercial and residential projects which fits its business model of quick project turnaround.

It is looking to acquire one to two more pieces of land for integrated commercial developments next year.

Next month, Mah Sing will launch two developments, Starparc Point in Setapak, Kuala Lumpur, a five-acre commercial development with a GDV of RM125mil and the 54-acre residential precinct of Southbay Penang with a GDV of RM518mil.

The Southbay Penang residences comprise 284 super-link homes priced from RM795,000 and 76 bungalows priced from RM3.7mil. Currently, it has five ongoing commercial projects in Kuala Lumpur and Penang worth a total GDV of RM2.2bil. Meanwhile, SP Setia is set to launch a block of Setia Sky Residences with a GDV of about RM220mil and is waiting for one more approval from the authorities.

This is SP Setia’s first high-rise project in the Kuala Lumpur City Centre and it is located in Jalan Tun Razak on 5.96 acres with a total GDV of RM800mil, comprising four 39-storey tower blocks, with each block containing 211 condo units.

When the project was first unveiled, it was priced at an average of RM800 per sq ft. “Now, the price is at an average of RM680 per sq ft as raw material prices have stabilised. We have not reduced any of the unit sizes. Built-ups are still from 800 sq ft onwards,” he continues.

The company also has a few launches in the pipeline in Penang in the coming months. The group is confident of achieving its target of RM180mil in revenue from the sale of its properties in Penang for the financial year ending Oct 31 (FY09).

Liew says the group is on track to achieve total sales of RM1.1bil for FY09.

SP Setia’s products range from link houses for the mass market to luxury bungalows. Prices for its terraced homes in Setia Alam, Shah Alam start from RM300,000.

In Johor, its link homes are priced between RM200,000 and RM250,000. “All our townships are continuously launching in phases,” Liew says.

Paramount’s Ong says luxury developments may take a hit during a slowdown. But there’s no big impact to the mid-range to upper mid-range properties “because Malaysians still like to own properties”.

“Demand is still there, but all depends on the locations and reputation of the developer. People like to buy properties whether for their own use or for investment,” he says.

“Property is the best bet against inflation. Those smart property investors will always look for good properties to invest,” he says.

Mah Sing’s Leong says: “We feel that medium to high-end landed residential property segment will still do well due to the limited investment options for good properties in prime locations”.

According to the National Property Information Centre report for 2008, transaction volume grew by 10% for houses priced above RM500,000 and by 33% for houses priced above RM1mil.

Leong says this probably reflects the supply demand gap for properties in this price range, especially as semi-detached homes and bungalows account for less than 10% of the residential property supply. Mah Sing has met close to 40% of its full-year RM393mil launch target given the continuous strong demand.

“We plan our launches very carefully, and generally, our products enjoy at least 80% sales take up,” Leong continues.

He says “affordable” homes can be from RM200,000 to RM500,000, depending on location and the property.

By The Star (by Rachael Kam)

Building higher values

The economy’s weaker-than-expected performance in the first quarter of this year at -6.2% and further contractions expected in the second and third quarters, albeit at smaller percentages, is a big wake up call for the government and the people to put in greater efforts to rein in the declines.

The poor performance points to more difficult times ahead for many industry sectors including property, which will be in for a few more lacklustre quarters.

This shows that the magnitude of the problems plaguing the global economy is very severe and things certainly don’t look good for corporate earnings.

Much of the excesses and incompetencies that plunged many of the developed economies into one of their worst recessions since the Great Depression are still unresolved, and these will need much more effort and time to be addressed.

Far from what some pundits would like us to believe, a bottoming out of the world’s economy is still nowhere in sight, much less a recovery.

It is best to face the wrath of the global financial meltdown by getting to the bottom of the problem and repairing the weaknesses rather than see any positive sign as a “green shoot” that the government measures are working well.

Although Malaysia has been lucky so far and spared from a much more severe hit suffered by other countries, there is a need to strengthen its economic structure and move into higher value adding activities.

The Government’s initiatives to liberalise the economy are a good start and these should be followed by a more enabling environment to promote greater income earning opportunities and allow wages to catch up with those in other countries.

Even in the lower economic activities, such as waitressing in the food and beverage (F&B) sector, there are opportunities for higher value activities to be introduced.

It is necessary to employ more Malaysians instead of unskilled foreigners in a broad spectrum of economic sectors, including the F&B and factory production lines, as they are better educated and require less training.

Rather than keeping wages low by employing foreigners, it is necessary to allow wages to rise and catch up with those in other neighbouring countries. Malaysians are drawing much lower wages compared with their counterparts in Singapore and even Thailand.

Doing so will also prevent large amount of money from being repatriated to the other foreign countries that these workers come from and ensure higher domestic consumption for more sustainable economic growth.

Meanwhile, in the property sector, more liberalising measures are also needed for industry players to get back on their feet after being pulled down by the global economic crisis.

Currently the Government has made it mandatory for developers to build low-cost housing, which industry players lament are dragging them down further especially during the current tough market conditions.

It is worth looking at setting up a statutory body that will function as a public housing board to undertake an indepth master plan of all the low-cost or public housing needs in the country and build enough such units to meet demand.

The Government’s initiatives to allocate most of the RM1.4bil for Syarikat Perumahan Negara Sdn Bhd (SPNB), the housing unit of the Ministry of Finance, to deliver some 32,000 low-cost homes in Malaysia through various housing programmes under the two economic stimulus packages is a good start.

If the initiative is taken further and develop into a long-term national housing programme, it will ensure a more orderly development of low-cost housing for all needy Malaysians to own homes.

To further the housing cause, a good model to study is Singapore’s Housing Development Board, which is responsible for the planning and building of all public housing needs in the city state. Its ability to build high-quality public housing, complete with good community amenities at affordable prices, must be one of the best in the world.

·Deputy news editor Angie Ng believes that upgrading the country’s economic structure into a high value add and earnings economy will prepare it for a more competitive global environment after the crisis.

By The Star (by Angie Ng)

Friday, May 29, 2009

MRCB, Gapurna team up

Malaysian Resources Corp Bhd and Gapurna are expected to finish developing the RM1 billion '348 Sentral' project by the third quarter of 2012

Malaysian Resources Corp Bhd (MRCB) is developing a RM1 billion office and residential project at Kuala Lumpur Sentral, the city's largest transportation hub.

The project will be undertaken on a joint-venture basis with Gapurna Sdn Bhd, a local developer with 60 per cent share of the partnership.

Work on the project, known as 348 Sentral, started last month. It is expected to be ready by the third quarter of 2012.

"This is part of our RM3 billion expansion of Kuala Lumpur Sentral over the next few years," MRCB group managing director Shahril Ridza Ridzuan told reporters after the launch yesterday.

MRCB is the master developer of Kuala Lumpur Sentral.

348 Sentral will be financed using internal funds and borrowings.

"A couple of banks" are in the process of finalising a loan, Shahril said.

The project will feature a 33-storey office tower and a 21-storey serviced residence tower sitting on a five-storey podium and a four-storey basement.

The joint venture, GSB Sentral Sdn Bhd, will lease part of the office tower to oil firm Shell Malaysia to use as its regional office for 15 years.

Shell will be its anchor tenant, taking up about 340,000 sq ft.

"We decided to consolidate our offices in the Klang Valley and 348 Sentral was the best offer we had," its chairman Datuk Saw Choo Boon said.

The company currently has offices in 10 physical locations in the Klang Valley.

348 Sentral is said to be the country's first integrated commercial development going for the Leadership in Energy and Environmental Design (LEED) certification with gold standard, a US-based green building rating system.

It will be Gapurna's first big-scale project, its chairman Tan Sri Abdul Halim Ali said.

Shahril said he expected MRCB, which turned in sharply lower first quarter profit this year, to show better earnings in future quarters now that building material costs had fallen.

Its first quarter profit fell by almost 99 per cent to RM153,000.

On its upcoming transportation hub in Penang, he said the company was working on the final design and expected to get vacant possession of the site "shortly".

A temporary hub has been built and is operational.

The launch yesterday was officiated by Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal.

By Business Times (by Adeline Paul Raj)

HSL gets RM126mil housing project

KUALA LUMPUR: Hock Seng Lee Bhd (HSL) has received a RM125.7mil subcontract from Pembinaan Nomisual Sdn Bhd for the construction and completion of 1,000 houses in Bintulu, Sarawak.

In a filing with Bursa Malaysia yesterday, HSL said the scope of works included the construction of the affordable houses, related external works as well as the mechanical and electrical works.

The project is expected to be completed by April 2012.

“The contract is expected to contribute positively to the earnings and net assets of HSL for the financial years ending 2009 to 2012,” HSL said.

By The Star

Raffles Hotels aims to be KL rate leader

The prestigious Raffles Hotels & Resorts expects to be the most expensive hotel in Kuala Lumpur when it opens at Pavilion Kuala Lumpur in 2011.

Raffles is now the rate leader in seven out of the eight markets it is in. In Dubai, the rate leader is the Burj Al Arab in Dubai. In Singapore, Raffles last year closed at an average room rate (ARR) of S$1,000 (RM2,420) per night.

Fairmont Raffles Hotels International (FRHI) executive vice-president David Roberts expects the hotel to have an ARR that's a fifth higher than the leader at that time.

"We will position ourselves as a rate leader," Roberts said.

Currently, the rate leader in the capital is Mandarin Oriental at over RM600 per night.

Roberts was speaking to reporters following an agreement signing ceremony between Raffles Hotel Management and Harmoni Perkasa Sdn Bhd.

Harmoni Perkasa is a wholly-owned subsidiary of Urusharta Cermerlang Sdn Bhd. Pavilion Kuala Lumpur is 51 per cent owned by Urusharta and 49 per cent by the Qatar Investment Authority.

The signing ceremony confirmed a Business Times story in April that Raffles will open at Pavilion Kuala Lumpur in 2011.

Raffles Kuala Lumpur will have 200 rooms and suites measuring a minimum of 50 sq metres - 50 per cent larger than most five-star hotel rooms.

Raffles expects to be able to achieve a gross operating profit of between 35 per cent and 45 per cent in Malaysia. FRHI, meanwhile, has confirmed the opening of 15 more Raffles hotels between 2010 and 2012.

By Business Times (by Vasantha Ganesan)

Raffles KL to open doors in 2011

KUALA LUMPUR: The luxury hotel brand Raffles will have its first hotel in Malaysia - the Raffles Kuala Lumpur - which is expected to open its doors in 2011.

The Raffles Kuala Lumpur will be at Pavilion Kuala Lumpur, along Jalan Bukit Bintang. Featuring 200 rooms and suites, each with a minimum of 50 sq m (about 538 sq ft), it will offer the most spacious rooms in the city.

Raffles Hotels & Resorts' signed an agreement on May 28 with Harmoni Perkasa Sdn Bhd, a unit of Urusharta Cemerlang Sdn Bhd, which owns Pavilion Kuala Lumpur.

"The name Raffles is associated with exceptional standards of service, hospitality and cuisine. We look forward to working with Raffles Hotels and Resorts to bring a luxurious lifestyle experience to Kuala Lumpur," said Harmoni Perkasa chairman Tan Sri Zainol Mahmood.

Owned by Fairmont Raffles Hotel International, Raffles Hotels & Resorts is expected to expand from seven Raffles hotels now to 23 hotels worldwide by 2012.

Chris Cahill, COO of Fairmont Raffles Hotel International said the group had always wanted to extend the Raffles portfolio to Kuala Lumpur.

"Now we have an ideal strategic partner and an unrivalled location," he adds. The group also owns Fairmont and Swissotel brands of hotels and resorts.

Raffles Hotels & Resorts' public relations and communications manager Vivian Koh said Raffles Kuala Lumpur will offer six restaurants and bars including a specialty restaurant, an all-day dining restaurant, a lobby lounge, a lobby bar, a pool bar and a Cafe Stelle located at the Couture Pavilion precinct. The cafe which will be a showcase of Raffles' service prior to the opening of the hotel, opened its doors today.

The Raffles Amrita Spa, a signature component of Raffles hotels and resorts worldwide, will feature 10 treatment rooms and an extensive range of massage and wellness treatments.

By The EDGE Malaysia (by Racheal Lee)

Thursday, May 28, 2009

Bertam Alliance to launch RM310m high-end projects

PROPERTY developer Bertam Alliance Bhd will launch three high-end projects worth a combined RM310 million in Selangor and Langkawi to ride out the economic downturn and remain profitable.

The company hopes to maintain its 2008 earnings via locked in sales and income from the projects, its executive chairman Ng Sing Hwa said.

For the year ended December 2008, Bertam made a net profit of RM5.5 million, up 28 per cent from 2007, on revenue of RM45.2 million.

Bertam, (formerly, UH Dove Holdings Bhd), is launching up to 30 bungalow lots in Langkawi worth over RM20 million in June, Ng said.

In July, it will launch Grand View, a gated and guarded community featuring 66 exclusive bungalows worth RM140 million (RM1.8 million to RM3 million each) in USJ1, Subang Jaya.

By September, Bertam will launch 72 bungalows in Kota Damansara, worth RM150 million, or RM1.8 million to RM2.2 million each.

Ng told Business Times after the company's shareholders meeting in Petaling Jaya yesterday that it is optimistic of selling the stocks within a year.

"Our properties are in established areas. So long as you don't overprice, there will be buyers. As a developer, I am quite happy with 25 per cent to 30 per cent profit margins," he said, adding that Bertam will emphasise on building houses in small numbers to remain cash flow positive.

It will also buy pockets of land from developers in choice locations instead of more than 40ha.

"Landbank kills if you are not careful and are over geared. If you buy land of more than 200ha, you will be cashflow negative, unless you have been able to develop it by more than 50 per cent. We won't toy with that risk," Ng said.

Ng added that Bertam will not lock-in a project that will last more than three years.

"Housing is an industry, not a real estate development. We buy land and keep on moving. We do not speculate or keep stocks. We have the right products to sell. We emphasis on design and do not overprice," Ng said.

By Business Times (by Sharen Kaur)

IGB puts 2 big projects on hold

Unfavourable market conditions have caused IGB Corp Bhd to delay two major projects with an estimated combined value of RM1.5 billion to RM2 billion.

This will likely affect its property development division in the current financial year ending December 31 2009.

Last year, revenue from property development fell by a third to RM169.97 million from RM252.48 million in 2007.

The two projects on hold are the final third phase of the Mid Valley City and the high-end Stonor condominium in Kuala Lumpur. They could take off from next year.

Nevertheless, group managing director Robert Tan Chung Meng expects the recent completion of its North Tower Offices and The Garden Residences to make up for any shortfall in that division.
The group's performance this year is likely to remain flat, he said.

IGB made RM172.87 million net profit on RM688.22 million revenue last year. It also made a gain from the sale of Gleneagles Kuala Lumpur of RM83.59 million.

On its hotel division, which contributed a quarter of revenue last year, Tan said that IGB will open The Cititel Kota Kinabalu this year.

The US$50 million (RM175 million) 550-room St Giles Makati in the Philippines, developed by associate company St Giles London, will be operational in the first quarter of next year.

IGB is also in discussions for possible hotel projects in Bangkok, Thailand; Sydney, Australia; and Hanoi and Ho Chi Minh City in Vietnam.

"We are talking to about 10 parties, some for joint-venture projects, some for management, and some to be wholly owned," Tan told reporters after IGB's annual general meeting in Kuala Lumpur yesterday.

He said the group's 910-room Renaissance Kuala Lumpur is still on the market and that it was also willing to sell the MiCasa All Suite Hotel in Kuala Lumpur that is undergoing a RM50 million renovation.

Tan said the asking price for the Renaissance is RM800 million and for the MiCasa, about RM200 million.

IGB's first quarter results, released yesterday, saw net profit decline 7.6 per cent to RM33.9 million from RM36.7 million in the previous corresponding period.

Better contributions from property investment and its hotel division helped revenue improve 2 per cent to RM165.6 million from RM162 million.

By Business Times (by Vasantha Ganesan)

IGB plans more hotels abroad

KUALA LUMPUR: IGB Corp Bhd is in talks with 10 parties on developing hotels in Vietnam, China, Thailand and Australia.

Group managing director Robert Tan said the development might be in the form of joint venture, asset management or to wholly-own the entity itself.

“The hotels will carry the brand of either St Giles or Cititel but no deals have been closed at the moment,” he told a press conference after the company AGM yesterday.

Tan said the talks were mostly focused on hotel development, while some deals might involve taking over and developing uncompleted buildings.

“We have started the construction of St Giles Hotel in the Philippines and it is expected to be completed by the first quarter of next year,” he said.

He said the hotel might be a 50:50 joint venture between IGB Corp and associate company St Giles London but the latter was currently financing the US$50mil project.

The hotel division now contributes about 30% to IGB Corp’s net profit.

Tan said the company had delayed a few projects, such as Stonor and Mid Valley Parcel 3, this year.

“They carry a total gross development value of RM1.5bil to RM2bil,” he said.

Stonor is a condominium in Kuala Lumpur while Parcel 3 is a commercial development.

On talks of selling its Renaissance Hotel in Kuala Lumpur, Tan said IGB was still pursuing the deal and the asking price was around RM800mil.

However, he said, it had not received any “serious” offer yet.

He said IGB was also considering disposing its MiCasa All-Suite Hotel, which was currently closed for refurbishment and scheduled to open in October.

“We are always open to offers. The value of the hotel will be about RM200mil after the refurbishment,” he added.

By The Star

MK Land back in the black

PROPERTY developer MK Land Holdings Bhd has posted a net profit of RM13.2 million for the nine months to March 2009, against a loss of RM18 million in the same period last year, attributed largely to higher property sales.

The improved performance has allowed MK Land to make an early payment of RM60 million as the final settlement of its outstanding bond, which is only due in September this year.

MK Land, in which Tan Sri Mustapha Kamal Abu Bakar holds a majority stake, slipped into the red in the 12 months to June 2007 and 2008 due to additional cost incurred because of errant contractors.

It was the period when Mustapha Kamal stepped down as executive chairman from April 2007.
Chief operating officer Fatimah Wahab said the profit for the period reviewed was driven by strong sales performance after Mustapha Kamal returned and turned the company around in June 2008.

Sales for the nine months jumped 180 per cent to RM185 million, in spite of the weaker property and economic market condition, Fatimah said.

Top company executives have also mapped out a turnaround plan that includes cutting operating overheads, increasing cash position and reducing debt on a timely basis.

"The early (bond) payment is a significant milestone for MK Land in its turnaround efforts. We have sent a message to our bankers, bondholders and other stakeholders that we are serious about our efforts to reposition MK Land," Fatimah said.

MK Land will also embark on a corporate restructuring to lower the overall costs of funds and enhance earnings of share, she told Business Times.

The group had debts of RM500 million as at December 31 2008 and aims to reduce this to RM400 million by June and RM300 million by early next year.

"We will revisit the capital structure, treasury function and funding situation and see how they could be best structured to carry us forward. We have strategies in place to lower the cost of funds through innovative financial packages. We are talking to bankers," Fatimah said.

She added that MK Land is looking at various ways to enhance its margins and banking on Armanee Terrace Condominium and Rafflesia, its two core products within its Damansara Perdana township in Selangor, to drive profits.

By Business Times (by Sharen Kaur)

US home sales up in April, inventories swell

WASHINGTON: Sales of previously owned US homes rose in April, a report showed yesterday, providing more evidence the housing market is stabilising and backing views the recession is nearing an end.

The National Association of Realtors said sales climbed 2.9 per cent to an annual rate of 4.68 million as the traditional spring home-buying season swung into gear. However, the stock of unsold homes swelled 8.8 per cent to 3.97 million, the highest since November.

Both the trade group and economists shrugged off the rise in home inventories as mainly the result of seasonal factors, with sellers taking advantage of spring to try and sell their properties.

“Most of the sales are taking place in lower price ranges and activity is beginning to pick-up in the mid-price ranges, but high-end home sales remain sluggish,” NAR chief economist Lawrence Yun told reporters.

The data appeared to have little impact on major US stock indexes, which were close to flat in early afternoon, but the Dow Jones Home Construction Index rose 2.3 per cent.

“This report seems to offer another piece of evidence that home sales are stabilising,” said Zach Pandl an economist at Nomura Global Economics in New York.

The data also offered a fresh hint that the 17-month US
economic downturn, triggered by the collapse of the housing market, was easing and could well end by the third quarter, as a National Association of Business Economists survey published yesterday predicted.

The pace of job losses slowed last month, claims for unemployment aid have come off their peaks and consumer confidence has risen from recent rock-bottom levels.

By Reuters

Wednesday, May 27, 2009

Low property purchases by MM2H participants

GEORGE TOWN: If each of the 11,738 participants of the Malaysia My Second Home (MM2H) programme between 2002 and 2008 were to invest in a residential property, the country would have recorded RM7.8bil worth of sales from them. But the actual sales amounted to RM407mil as only 510 of them bought houses during this period.

Tang Chee Meng ...Foreign real estate investors are more likely to invest in countries that they are familiar with

“If each of the MM2H applicants were to buy just one property, there would have been 1,676 properties sold a year, with an estimated gross sales value of RM7.84bil or RM1.12bil a year,” Henry Butcher Malaysia chief operating officer Tang Chee Meng told StarBiz.

Tang was speaking on the sideline at the recent Penang Real Estate Conference, organised by investPenang and the Socio-Economic & Environmental Research Institute, which was officiated by Penang Chief Minister Lim Guan Eng.

Henry Butcher Malaysia (Penang) was the technical advisor for the conference.

“According to the National Property Information Centre (Napic), foreign purchases comprised only 0.62% of the 756,000 housing units sold between 2003 and 2008.

“The most sought after properties by foreigners are those priced between RM250,000 and RM500,000,” Tang said.

The seven states surveyed by Napic are the Federal Territory, Selangor, Penang, Kedah, Johor, Sabah and Selangor. The top MM2H buyers were from China, Britain, Iran and Japan.

Tang said the global recession presented new challenges to Malaysia’s MM2H market.

“Distressed properties in the other countries like the United States, Britain and Singapore offer attractive opportunities to international investors as property prices and exchange rates in those countries have dropped. The challenge now is to convince international investors that Malaysian properties offer better value than sub-prime properties elsewhere and that property values will hold steady despite the uncertain economic environment,” he said.

Tang said there was also great potential in the tourism market.

“Foreign real estate investors are more likely to invest in countries that they are familiar with.

“In 2008, Malaysia saw a record 22 million tourist arrivals from Singapore, Thailand, Indonesia, Brunei, China, India, Japan and Britain.

“If we can convince just 0.01% of these tourists to invest in property in the country, it will translate into 2,200 properties sold.

“At an average of RM668,000 a property, it will bring in some RM1.5bil sales,” Tang said.

To enhance Malaysia’s competitive edge as a MM2H destination, Tang said the property industry should take part in Malaysia Property Inc’s (MPI) roadshows.

MPI is an initiative of the Federal government to promote and brand Malaysia as an international property investment destination.

The target markets include Singapore, South Korea, Britain, Japan, Hong Kong and Indonesia.

Tang said industry players should collaborate with organisations with high net worth database to promote Malaysian property.

“They could look into hosting events with publications such as MillionaireAsia and 100 Thousand Club magazine to tap high net worth individuals in key Asian countries,” he said.

By The Star (by David Tan)

E&O posts loss on lower property contribution

KUALA LUMPUR: Niche property developer Eastern & Oriental Bhd (E&O) has posted a RM44.6mil net loss for its fourth quarter ended March 31 compared with a net profit of RM9.27mil a year ago.

For the full year, the group saw a RM37.7mil net loss versus a RM128.9mil net profit in FY08, while revenue also fell to RM302.6mil against RM516.4mil previously.

A lower contribution from the property division, as well as provision for impairment loss on investments of RM10.24mil and loss of RM19.976mil on disposal of 50% stake and preference shares in associate Puncak Madu Sdn Bhd to Selangor Properties Bhd were the reasons for the lower full-year earnings, the group said in a statement. The property division accounted for more than 80% of total revenue in FY09.

While the company slipped into the red in FY09, it is looking at strengthening its balance sheet and reducing its gearing with a rights issue that is expected to raise RM200mil.

E&O executive director Eric Chan told StarBiz the severity and suddenness of the economic downturn in 2008 necessitated “pre-emptive balance sheet management strategies”.

E&O announced yesterday a renounceable rights issue of irredeemable convertible secured loan stocks (ICSLS) 2009/2019 on the basis of one new ICSLS for every two shares held. The nominal value 10-year ICSLS of 65 sen each come with a coupon of 8% per annum.

E&O has the option to call for conversion of the ICSLS into new E&O shares after two years of issuance and if its share price exceeds RM1.

E&O’s share price has been penalised since its merger with and delisting in July/August last year of E&O Property Development Bhd which left it with high gearing.

Chan said the rights issue was only part of a two-pronged approach to address the gearing concerns and funding needs.

In total, the group aims to raise RM500mil. In addition to the RM200mil from the ICSLS issue, E&O is raising another RM300mil from the disposal of non-strategic landbank.

“This programme started in January. To-date, we have raised just under RM100mil from our asset disposal including from the unwinding of the joint venture with Selangor Properties,” Chan said.

At present, E&O’s gearing is high at 0.8 times but the group’s loans are not due immediately having been extended to 2014.

According to Chan, with the RM200mil from the ICSLS scheme, E&O’s gearing falls to 0.46 times.

A further RM300mil from the disposal of non-strategic landbanks would bring gearing to a low 0.16 times.

Together with new property launches that would generate even more cashflow, gearing would be slashed to a negligible level in two to three years, said Chan.

By The Star (by Loong Tse Min)

US home prices fall 19.1% in Q1, biggest fall in 21 years

NEW YORK: U.S. home prices are at levels not seen since the end of 2002, but a closer look at data released Tuesday shows the worst may be over for some metropolitan areas.

The Standard & Poor's/Case-Shiller National Home Price index reported home prices tumbled by 19.1 percent in the first quarter compared to the first quarter last year, the largest drop in its 21-year history.

Home prices have fallen 32.2 percent since peaking in the second quarter of 2006.

In cities across the country home prices varied dramatically, depending on affordability, foreclosure activity and the local economy.

The bottom may be in sight in some markets, but nationally home values are expected to decline - though at a slower pace - for the rest of the year.

"We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices," according to Joshua Shapiro, chief U.S. economist for MFR Inc.

It's hard to believe it could get much worse for homeowners in the Detroit area. Homes there are worth what they sold for in 1995.

And while that's good news for homebuyers, the implosion of the auto industry and economic fallout means fewer buyers have the money to qualify for a mortgage.

"I feel like houses here are free," said Detroit area real estate agent Rose Marie Jouan with Re/Max Showcase Homes.

Her house that she sold in 2004 for $200,000 is on the sales block, bank-owned, for $86,000.

In Phoenix and Las Vegas, where prices have plunged by half since their peaks, home values have receded to levels not seen since the beginning of the real estate boom. Phoenix prices are at early 2001 levels and Las Vegas values hover at mid-2002 prices.

Home values in Charlotte, North Carolina, Portland, Oregon, and Seattle are steady at 2005 prices, the best showing of all 20 cities in the Case-Shiller report.

All three were some of the last to fall into the housing slump.

The Case-Shiller report offered other hopeful signs the worst may be over for some cities.

Denver prices posted an increase over February, while Dallas prices were flat. Separately, Case Shiller said its 20-city index of home prices fell by 18.7 percent from the year before, and the 10-city index lost 18.6 percent.

However, the rates of decline slowed in March, the second straight month they didn't set record price drops.

Still, there are no signs home prices nationally have hit bottom.

"We see no evidence that a recovery in home prices has begun," said David M. Blitzer, chairman of the S&P index committee.

All 20 cities showed monthly and annual price declines, with nine setting annual records.

Fifteen cities posted double-digit drops and Phoenix, Las Vegas and San Francisco recorded declines of more than 30 percent.

Minneapolis posted a 6.1 percent decline from February to March, the biggest monthly drop on record for any metros in the indexes.

Ron Peltier, chairman and chief executive of HomeServices of America, attributed the drop to a jump in distressed sales in March.

Economists will get a look at April housing data Wednesday when the National Association of Realtors releases sales data for previously owned homes, and on Thursday when the Commerce Department puts out numbers for sales of newly built homes.

Economists surveyed by Thomson Reuters expect existing home sales to rise 2 percent from March to April, while new home sales are forecast to rise by 1.1 percent.


Tuesday, May 26, 2009

Malaysians feel property prices too high

A majority of Malaysian property hunters feel that there is a surplus in Malaysia and that most selling prices are unrealistically high, according to a survey by Malaysia.

The majority of the respondents also planned to buy properties in the near future but were waiting for prices to fall further before doing so. Malaysia (, Malaysia’s No. 1 property website, is part of the Group (

The results of three separate polls,undertaken between February 11 and April 14 this year in three countries -– Malaysia, Singapore and Hong Kong – revealed similar sentiments.

By Bernama

YNH plans condo project atop Genting Highlands

PETALING JAYA: A rare piece of land on Genting Highlands has been snapped up by YNH Property Bhd which will build holiday condominiums amid the rarefied air there.

It is believed most of the land on the highlands is owned by the Genting group.

YNH itself was surprised that there was land available and offered by a company. It completed the land purchase at the end of last year but did not announce it as the sum involved is not substantial relative to its equity.

YNH paid RM16mil for 95 acres which an official described as being on the same level as the casino. “If it’s on the Awana or Gohtong Jaya level, we wouldn’t have bought it,” a company official told StarBiz yesterday.

The Awana hotel and resort and Gohtong Jaya township are some distance below the peak of Genting Highlands and therefore, less cooling. The land that YNH bought is near the top where the temperature is around 15 to 16 degrees Celsius, he said.

Although the land YNH bought is sizeable, only 30% to 40% is suitable for development as the slope on the rest is too steep. “We’ll use the rest of the land for a golf course and jungle trekking,” the official said.

As for the development portion of the land, the official said the company estimated the gross development value (GDV) at up to RM2bil over 15 to 20 years.

It is working on a GDV of about RM50mil an acre, which it considers achievable as high-end condominium projects in the suburbs of Kuala Lumpur can have a GDV of about RM100mil an acre.

The official said the land had been converted from agricultural use to that of mixed property development. The company is preparing layout and building plans for approval from the Pahang state authorities, and hopes to launch sales next year.

Beside the cool weather, a feature that led YNH to buy the land is that there is good road infrastructure that was built by the Genting group. The land YNH bought will also be accessible by the main Genting road.

On YNH’s other projects, the official said the retail area of Kiara 163 had been sold for a total of RM200mil. Sales for the apartment units of this project in the Mont’ Kiara area of Kuala Lumpur have not been launched yet.

Meanwhile, it has also sold the retail units in the first phase of Menara YNH, near Shangri-La Hotel in Kuala Lumpur. The units in the retail podium were sold for RM300mil and the company expects to start construction of that in three months’ time.

Analysts, however, were disappointed at a recent briefing when they were informed of a further delay in the sale of one of the twin towers of Menara YNH to Kuwait Finance House. The sale and purchase agreement for that might not be signed till next year, they were told.

By The Star (by C.S.Tan)

The Trillium phase 1 shop offices all sold

SYARIKAT Pembenaan Yeoh Tiong Lay Sdn Bhd (SPYTL) saw all 60 units of three-storey shop offices in phase one of its The Trillium project sold within one week of its official launch, generating a total gross development value of RM60 million.

Due to the unexpected strong demand, the second phase of The Trillium, offering 40 units of three-storey shop offices comprising 40 units, will be open for sale from RM1.14 million onwards.

SPYTL general manager of property department Edward Lee said the sell-out of The Trillium has proven that a quality product with the right location can weather any cycle of the market.

"This is coupled with our strong track record of delivering high capital appreciation on all our properties, in turn maximising value for us, our purchasers and our investors," he said in a statement issued last Friday.

The Trillium is located in Sungei Besi, Kuala Lumpur. Featuring shop offices with built-up that starts from 4,805 sq ft, it is scheduled for completion by the first quarter of 2010.

Besides The Trillium, SPYTL had earlier launched Midfields, a 9.315hamixed development project offering prime stylishly designed condominium units, retail lots and offices that is also located in Sungei Besi.

The launch of Phase One of the Midfields condominiums in 2008 was an overnight success where 300 units were sold out in the first weekend of its debut.

By Business Times

Megamall owner to focus on internal operations

KRISASSETS Holdings Bhd, the owner and operator of Mid Valley Megamall in Kuala Lumpur, will focus on its internal operations this year to maintain its financial performance.

In the year ended December 31 2008, it made a net profit of RM98.12 million on the back of RM216.63 million revenue.

Group managing director Robert Tan Chung Meng said the company has put on hold earlier plans to inject new foreign retail and commercial assets into the company. At that time, property prices, particularly in the US, had plunged and made it an attractive investment option.

Given the unpredictable economy, the fluctuation of the stock market and foreign exchange, KrisAssets has decided to tread carefully. Nevertheless, even taking over an ongoing project remains an option if the price is irresistible.

Speaking at a press conference after the company's annual general meeting yesterday, he said KrisAssets has the muscle to consider one large project for merger and acquisition purpose, as long as it did not have the effect of increasing borrowings by too much.

On the performance of The Gardens Mall, which is planned to be injected into KrisAssets when it achieves profitability, Tan said the high-end mall was doing better than in 2008.

Although he expects gestation for The Gardens Mall to possibly even take up to five years, he is still hopeful that it will start making money faster.

"The one to two year (timeframe to inject Gardens Mall into KrisAssets) is still on our roadmap. We want to unlock its value," Tan said.

KrisAssets is 74.81 per cent owned by IGB Crop Bhd. IGB now owns the Gardens Mall which has a net book value of RM625.67 million.

On whether rental collection has been an issue, Tan said that it is not to the extent that it has an impact on its performance. The mall is also working with its tenants to help them through the challenging times.

Meanwhile, for the first quarter ended March 31 2009, revenue at the RM1.75 billion mall grew by 6.7 per cent to RM56.5 million from RM52.95 million.

Net profit increased by 14 per cent to RM25.4 million from RM22.3 million in the previous corresponding period as total rental income improved while it incurred lower property maintenance cost.

By Business Times (by Vasantha Ganesan)

Metro Kajang H1 pre-tax profit up

Metro Kajang Holdings Bhd's pre-tax profit for the six months ended March 31, 2009, rose to RM25.205 million from RM22.857 million in the same period of 2008.

Revenue increased to RM175.293 million from RM149.773 million previously.

In a statement today in Kuala Lumpur, executive chairman, Datuk Alex Chen Kooi Chiew, said property sales were encouraging.

"Our non property-related activities also delivered commendable results, notably our manufacturing and integrated livestock divisions continue to grow in significance," he said.

Chen said although economic uncertainty prevailed, the recent improvement in stock market sentiment could translate into overall improvement in confidence, especially in the property sector.

He said the company planned to launch the initial phases for several key property projects over the next 18 months.

"These new developments, which has a total estimated gross development value of RM1.5 billion, consist of township projects as well as the RM133 million-Melawati serviced apartments in Desa Melawati, Kuala Lumpur," he said.

He said at the group level, the company has identified and would continue to build up four core divisions -- property development, investment, integrated livestock and oil palm plantation -- as future growth drivers," he said.

By Bernama

US home prices fell 18.7% on year in March, says S&P

NEW YORK: Prices of US single-family homes in March fell 18.7% from a year earlier, while prices in the first quarter dropped at a record pace, according to the Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday.

On a month-over-month basis, the index of 20 metropolitan areas fell 2.2% in March from February, S&P said in a statement.

Price drops on both a month-over-month and year-over-year basis were worse than expectations based on a Reuters survey of economists.

The composite index of 10 metropolitan areas declined 2.1% in March from February for a 18.6% year-over-year drop.

"Declines in residential real estate continued at a steady pace into March," David M Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement.

However, he noted it was the second month since October 2007 in which the 10- and 20-City Composites did not drop at a record annual pace.

By Reuters

Monday, May 25, 2009

MK Land drafts 5-year roadmap to boost profits

PROPERTY developer MK Land Holdings Bhd has drafted a five-year roadmap, which will focus on developing two core products within its ongoing Damansara Perdana township in Selangor in a bid to enhance profitability.

They are the Armanee Terrace condominium project and Rafflesia, featuring 460 units of three-storey semi-detached bungalows, which collectively will generate a gross development value of RM3.5 billion over the next 10 years.

"MK Land has the ingredients to grow in terms of landbank, products and people. By creating the roadmap, we will be able to position the company going forward," chief operating officer (COO) for group strategy and planning, Balasundram R, said.

"We need to identify the strength of MK Land and how to make it profitable in the longer term," he told Business Times in an interview.
MK Land had posted losses in the financial year ended June 2007/2008 for the first time since its inception more than 10 years ago due to additional cost incurred to complete projects.

The higher costs was a result of errant contractors being terminated, which happened after its major shareholder Tan Sri Mustapha Kamal Abu Bakar stepped down as executive chairman in April 2007 to focus on his private companies.

Mustapha later returned to helm MK Land in June 2008 in the hope of turning the company around by outlining a three-year plan to rejuvenate it.

The plan included identifying Balasundram, Fatimah Wahab, Lau Shu Chuan and Yusof Abu Othman as COOs to handle specific tasks in MK Land such as strategic planning, finance and projects in the central and northern regions.

The four were roped in from within MK Land, Mustapha's Emkay Group and its 75 per cent unit, Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Since then, MK Land has been able to make profits via cost-efficiency and improving product sales.

The company made a net profit of RM10.1 million in the six months ended December 31 2008, against a net loss of RM18.3 million in the same period of 2007 while revenue doubled to RM125 million.

MK Land is optimistic to repeat its performance in the second half of its financial year, with revenue surpassing RM350 million, boosted by land and property sales.

Balasundram added that there was a challenge that Mustapha had placed on the four but they are on target now to achieve the plan mapped out.

"Our initial stage was to build cash flow and sell existing property stocks. As completed products are now tapering down, we are moving to the next step which is to focus on new launches in our road to profitability," he said.

The company will also continue with its existing developments in Cyberjaya, Damansara Damai and Ipoh, Balasundram said.

By Business Times (by Sharen Kaur)

Bina Puri takes aim at Mideast region

BINA Puri Holdings Bhd, a construction group in which tycoon Tan Sri Syed Mokhtar Al-Bukhary holds a minority stake, is increasingly looking towards the Middle East to replenish its order book amid the global slowdown.

Already, it has bid for some RM2.5 billion worth of jobs including the construction of high-rise residential and office towers there.

Founder and group managing director Tan Sri Tee Hock Seng said the group is looking to replenish its order book and believes that the Middle East in particular the United Arab Emirates (UAE) will provide the support.

Its order book stands at nearly RM3 billion, which will keep it busy for the five years.
"We are bidding for jobs, especially in Abu Dhabi, to build medium- to high-end residential towers. Abu Dhabi is where the money is," Tee told Business Times in an interview.

Its biggest achievement in the Middle East has been in Abu Dhabi, where the group, as part of a larger consortium, won a RM444 million contract from the Tamouh Group to build two 45-storey residential towers.

The contract was awarded in 2007 and the consortium is expected to finish building the towers by December this year.

Tee also said Bina Puri is focused on growth this year to ride out the current slump.

"Business has to go on so the group could be the top runner when the economic recovers. It is all not that bad or gloomy. There are still plenty of jobs in Malaysia and overseas, but you need the right people to look for them," Tee said.

For the first four months of 2009, Bina Puri has managed to secure close to RM1 billion worth of projects in Brunei and Malaysia.

These projects include some RM300 million worth of government projects in Sabah to build houses and offices, and the construction of Universiti Malaysia Kelantan.

In Brunei, it was given a contract in February by the Brunei Economic Development Board to build 2,000 houses for RM693 million.

Tee said Bina Puri is looking for more residential and infrastructure projects in Brunei.

He said the group is also sourcing for new opportunities in Thailand, although it has RM1.7 billion worth of contracts in hand to build houses over the next three years.

The construction group's net profit fell by 38.6 per cent to RM4.3 million in the year-ended December 2008, although revenue was up by 11.4 per cent to RM677.3 million, attributed by higher building material costs and losses incurred by an associate company.

By Business Times (by Sharen Kaur)

Damansara Perdana to see new wave of development

MK LAND Holdings Bhd is planning a new wave of development at its integrated Damansara Perdana township in Selangor and this includes the launch of more than RM5 billion worth of properties over the next decade.

While the company is targeting purpose-built buildings to enhance its margins, its focus for the next 10 years will be to develop Armanee Terrace Condominium and Rafflesia for RM3.5 billion, its chief operating officer for central region, Fatimah Wahab, said.

Launches at Damansara Perdana have been slow since 2007, as MK Land was consolidating its position to focus on other key aspects of its operations.

Since July 2008, a repositioning was carried out with the view to bring the company to a better strategic and financial position to meet the challenges ahead.
The township, which is 44 per cent developed, has accumulated sales in excess of RM2 billion since its launch in 1996.

Fatimah told Business Times that she is optimistic that the luxurious Armanee Terrace and Rafflesia projects, which are supported by a high-end integrated security system and surrounded by greenery, will be the main driving force for growth at Damansara Perdana.

The township has received encouraging response from home owners and investors due to its offerings and location, being in the prime area of the Damansara Perdana enclave amid a primary forest - best of the best location in Damansara Perdana, Fatimah said.

The Balinese-inspired Armanee Terrace features homes with sky gardens and broadband-ready features. It is the first high-rise development in Damansara Perdana with a garden in every unit.

Rafflesia is MK Land's first landed residential property at the township.

"We did a market survey on what people want and upon conclusion, learnt that they are looking for properties like Armanee Terrace and Rafflesia which has, among others, high returns on investment," Fatimah said.

She added that properties in Damansara Perdana would usually appreciate by 25-30 per cent upon completion, making them appealing to buyers.

Armanee Terrace will feature several condominiums in a horseshoe offering various designs of exclusive units.

The first block has been constructed and handed over to buyers in 2007, while the second block, comprising 518 units, is under construction and being offered for sale.

Fatimah said the last two or three blocks may end up as boutique developments or duplexes where it will offer less units but with bigger built-ups.

On Rafflesia, MK Land will offer a total of 460 units of triple-storey semi-detached modern homes.

It launched the first batch of 56 houses, priced from RM1.4 million each in 2007 with 60 per cent sold.

Fatimah said the company will launch 60 new units in July, each priced from RM1.8 million.

By Business Times

What the licence operators have to say

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director, Chung believes the MM2H programme has been growing from strength to strength over the years.

She said that with the recent policy liberalisation, the Government was taking the right measures to ensure a smoother delivery system so that Malaysia could attract more foreigners to retire or stay here.

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director says ... It is a win-win situation for everyone to aggressively promote the programme as it will benefit all sectors of the economy.

“With these new and positive changes, we are encouraged by the authorities’ efforts to support the MM2H programme,” Chung said.

She added that the tangible benefits were obvious, as the foreigners under the programme were likely to spend about 10 times more that the average Malaysian.

She said it was a win-win situation for everyone to aggressively promote the programme as it would benefit all sectors of the economy.

These include the Government, industry players such as licence operators, property market, travel and tour sector, as well as services-related industries such as hotels and restaurants.

The move will also benefit the MM2H participants, who will be able to enjoy a quality lifestyle in Malaysia and, at the same time, “stretch their dollar” to last longer.

Borneo Vision (MM2H) Sdn Bhd managing director Andy Davison said, conceptually, MM2H was an excellent programme with massive potential for Malaysia to rake in huge earnings to strengthen its economy.

Davison said Malaysia had a lot to offer to the developed world in terms of lifestyle.

“There’s a lot going on for this country ... the tropical weather, high standard of living, good healthcare and infrastructure, all at an affordable price,” he said, adding that MM2H was the perfect vehicle to market Malaysia to the world.

“I’m pleased with the Government’s new and relaxed ruling on MM2H but I do believe there is a need to separate foreigners who are here to retire (with a different status) from those who want to work here, especially high net-worth individuals.

“I believe they are a totally different group of individuals with different intent and if MM2H is bundled together into one category, it confuses everyone, including us (licence operators) and the programme could be prone to abuse,” he said.

Another MM2H licence operator, who declined to be identified, said MM2H was probably one of the best such programmes ever rolled out.

However, he said, there was a need by the authorities to have consistent and well-thought-over policies that did not contradict one another.

“There is a need to resolve issues quicker, including processing time, especially with wives and siblings.

“There is also a need to ensure all licence operators are adequately trained to service foreigners with the correct information and that their services are not sub-standard so as not to tarnish the MM2H image, which affects other license operators,” he said.

He also said the full potential of the programme had not been achieved, despite it being around for some time, because of poor marketing.

“Let’s not waste time in showing what Malaysia can truly offer to the foreigners,” he noted.

By The Star

Relaxed rules set to boost Malaysia My Second Home scheme

PETALING JAYA: The Government’s move in February to further liberalise the Malaysia My Second Home (MM2H) programme has been well received by foreigners and industry players, especially MM2H licence operators.

Currently, there are about 200 such operators nationwide.

Several amendments to the MM2H criteria were made by the authorities, including the lowering of entry age (below 50) as well as employment opportunities for foreigners in selective industries.

MM2H Agent Association president Kirby Lim said the programme had undergone significant improvement every year since it took over from the Silver Hair scheme, which began in 2002.

“It shows that the Government, particularly the Tourism Ministry, is fully aware of the importance of MM2H as a key driver to economic growth, bringing in billions of ringgit, which is why it (MM2H) has been promoted heavily as a national agenda,” he told StarBiz.

Kirby Lim ... Despite not being well marketed in its early years, MM2H has been fairly successful

Lim said while there might be some “hiccups” along the way, generally, most players or those who benefited from the programme were satisfied with the progress made.

“Of course, more can be done and there will always be issues that need to be ironed out, but we are making good progress and the association is in close contact with top officials from the Government, especially the Tourism Ministry,” he said.

Lim said the association would convey the concerns of the licence operators and MM2H participants to the relevant authorities.

It would also keep them abreast on the effectiveness of the policies in attracting foreigners under MM2H, and the changes needed to improve the logistics and marketing and promotions undertaken currently.

On the success of the MM2H so far, Lim said despite not being well marketed in its early years, the programme had been fairly successful.

“However, the Government has recently been very aggressive in promoting it and under the stewardship of Tourism Minister Datuk Seri Ng Yen Yen, we believe the programme will gain significant momentum,” he said.

Currently, there are about 12,000 MM2H participants from countries such as China, South Korea, Britain, Bangladesh and certain parts of Europe and the Middle East.

Lim said the Tourism Ministry had recently embarked on a blitz to promote Malaysia, particularly in China and Japan, as a favoured destination to visit as well as to stay and retire (under the MM2H).

“We understand the Tourism Ministry is now looking to promote MM2H in other countries like Canada through exhibitions and other promotional activities,” he said.

Currently, Ng is in Britain to woo more tourists to Malaysian shores. She is targeting at least 10,000 Britons under MM2H. So far, 1,551 Britons have signed up for the programme.

On Malaysia’s advantage in attracting foreigners compared with other countries in the region, Lim said: “We are not trying to be arrogant but Malaysia offers foreigners quite a high standard of living at a relatively low cost, coupled with good infrastructure and a politically stable environment where English is widely spoken.”

Lim said foreigners also had the opportunity to own properties and would not be subjected to real estate property gains tax should they sell their assets.

“Moreover, the Malaysian hospitality is second to none as many foreigners have remarked that the locals are extremely warm and friendly,” he noted.

Lim is optimistic that the number of MM2H applicants will be higher this year.

“This is following the liberalisation of the entry level as well as the strong promotions made by the Tourism Ministry, Immigration and Home Affairs Ministry and other government departments,” he said.

By The Star (by Danny Yap)

Indian developer plans US$600m share sale

MUMBAI: India’s Housing Development & Infrastructrure Ltd (HDIL) said late last Saturday its board had approved selling shares for up to US$600 million (US$1 = RM3.50) to institutional investors.

HDIL, the latest firm to look at an equity sale after a strong stock market rally, said in a stock exchange statement it would seek shareholders approval for the share sale and a share warrants issue to founders on June 17.

India’s benchmark index has risen nearly three-fourths from its lows in March prompting firms to look at share sales.

By Reuters

Saturday, May 23, 2009

SP Setia wins award for Johor project

Liew receiving the award from FIABCI World president Lisa Kurrass in Beijing as Malaysia's ambassador to China Datuk Syed Norulzaman looks on

PETALING JAYA: Property developer S P Setia Bhd has won the FIABCI Prix d’Excellence Award 2009 in the Best Master Plan Development category for the second time.

President and chief executive officer Tan Sri Liew Kee Sin said the international award showed that a Malaysian company was capable of meeting international standards in property development.

“The recognition by FIABCI International affirms our commitment to continuously raise the bar in terms of innovation, product, service and quality in all our projects,” he told StarBizWeek in an email reply.

S P Setia received the FIABCI Prix d’Excellence Award 2009 in the Best Master Plan Development for its eco-themed project in Johor Baru, Setia Eco Gardens, from the Paris-based International Real Estate Federation (FIABCI) in Beijing on Wednesday.

In 2007, Setia Eco Park in Shah Alam won FIABCI’s Best Master Plan Development award.

The win puts Setia Eco Gardens among other global real estate gems such as the Twin Waters on the Sunshine Coast in Australia, Trump World Tower in New York, Gardenville in Singapore and Tokyo Bayfront East in Japan.

Liew said the first award to Setia Eco Park spurred the group to look at new ways of sharing the eco concept with home buyers.

“We took the best eco-inspired elements from our Setia Eco Park high-end project in the Klang Valley and adapted it to suit a mass residential township in Johor Baru,” he said.

The 948-acre freehold Setia Eco Gardens located in the heart of Iskandar Malaysia is being developed based on the premise of an environmentally-friendly township.

The project has total gross development value of RM3.5bil, comprising 6,600 residential and commercial properties.

To-date, 95% or 550 eco-homes have been sold with total value of RM140mil.

By The Star (by Racheal Kam)

'Expo city' will make Iskandar trading hub

ISKANDAR Malaysia in Johor is set to become a major trading hub in the region for manufacturers and buyers once a permanent one-stop exposition, trade and distribution centre near Pasir Gudang is completed in five to seven years.

Called the "Asia Pacific Trade and Expo City" (APTEC), it is located within the RM6.6 billion township of Lakehill Resort City, which is being developed by Malaysia Pacific Corp Bhd (MPCB).

Once completed, APTEC will have a built-up gross floor area of about 4 million sq ft, occupying a land area of 9.4ha.

MPCB president and chief executive officer Datuk Bill Ch'ng said APTEC would become a centre for manufacturers of all sizes to showcase their products to international buyers.
"Buyers will come to the hub just like in a department store. These buyers will be retailers and wholesalers.

"The hub will be the centre to supply goods for the regional market, and allow buyers from all over the world to source their products here," said Ch'ng after attending the launch of the Iskandar Malaysia Open Day in Johor yesterday.

Manufacturers who set up their base in APTEC will promote their products to buyers from Southeast Asia, India, Japan, South Korea, Taiwan and the Middle East.

Ch'ng said potential manufacturers at APTEC would be selected based on the potential of their products or services.

They include manufacturers of goods such as electronics, fashion, home appliances and foodstuff.

Investors and traders will also find accommodation and recreation at the Lakehill Resort City to complement their business dealings.

Other attractions in the development include a six-star lakeside resort, factory outlet stores, a heritage and cultural village, a thematic restaurant located on top of a rock formation and other international bistros and cafes.

By Business Times (by Ahmad Fairuz Othman)

Developers act as agents of change

DEVELOPERS should act as agents of change and introduce more value-enhancing elements into their housing developments to promote higher quality neighbourhoods and environments for the people.

Through their projects, especially green field developments, developers are opening up new frontiers and bringing progress to society.

Every developer, irrespective of size, market capitalisation for listed companies, financial strength and expertise, has a role to play and contribute towards enhancing the country’s property landscape and living environment.

Although the market is still quiet with very few new project launches, the lull in the market provides developers the perfect opportunity to review their project plans and enhance them with more resident-friendly features.

Whether they are high-, medium- or low-cost projects, developers should plan with an eye for quality and go the extra mile to turn them into wholesome neighbourhoods for the residents.

Ultimately, these projects will be homes to many families and equipping them with the necessary facilities such as good landscaping, sufficient social amenities, adequate recreational areas and comfortable common facilities for social interaction, will promote more friendly neighbours and interaction among the people.

Developers are certainly one of the frontliners that have the clout to institute the necessary changes through project planning to help realise the Government’s 1Malaysia vision of greater unity and caring towards one another.

With rising concerns on safety and security issues following the growing number of crimes in the country, gated and guarded housing projects are growing in popularity and more developers are moving into such developments to meet the rising demand.

However, it must be noted that such housing projects are also not fool-proof and there have been quite a number of break-ins and security breaches in those housing estates.

Even if these projects provide a sense of security and safety for residents, the issue is whether the residents of gated and guarded projects feel safe and secure when they step out of their housing enclaves. They should if crimes in the streets are kept at bay.

The good old ways of ensuring safety through good neighbourliness, closer interaction and looking out for each other’s well-being, which have been lost somewhat in this rat-race age, have been proven to be effective and should be revived.

Even if a project is low- or low-medium cost, the lower income groups deserve to enjoy good quality housing and facilities, as well as a secure and safe environment.

Developers should not just build these units to fulfil the low-cost housing requirements set by the authorities but should add value to these affordable homes.

Reducing the density and number of units of these projects will avoid overcrowding and reduce the chances of these projects turning into urban slums like what has happened to certain affordable projects.

Proper maintenance of the facilities including lifts, playgrounds and other shared facilities will ensure the comfort of residents.

To enable developers to contribute towards sprucing up these low-cost projects with better amenities and quality homes, it would be worthwhile for the Government to consider their calls to raise the low–cost housing ceiling price to RM60,000 from RM42,000 currently.

It would also be good to look into the model adopted in Sarawak where people-friendly housing schemes are being built to promote home ownership.

By working with a panel of financial institutions to offer preferential rates for such housing schemes, buyers only have to fork out affordable monthly repayment of less than RM300 for their housing loans.

And to overcome concerns of the many unoccupied low-cost houses in various parts of the country, developers and the authorities should avoid locations that are non-prime areas or inaccessible.

Due feasibility studies should be undertaken to ensure supply matches demand.

>Deputy news editor Angie Ng sees many opportunities for developers to shine through their value-enhancing capabilities to spruce up the living environment.

By The Star (by Angie Ng)

Green is the way to go for industry players

GREATER adoption and use of environment-friendly planning techniques, designs and “green” materials in property projects will go a long way towards promoting green practices in the country.

Rather than depending on legislation to make it mandatory for industry players to incorporate pro-environment design features in their projects, it will be more effective if industry players voluntarily adopt green and environment-friendly designs and concepts in their projects.


Veteran tourism operator and hotelier, Anthony Wong, who is group managing director of Asian Overland Services Tours & Travel Sdn Bhd and The Frangipani Hotels & Resorts Sdn Bhd, should know the importance of personal initiative to adopt the green way of life as he was already a “green” practitioner in 1976 at the tender age of 19.

That was when he started his eco-tourism company, Asian Overland Services Tours & Travel with a few partners from Australia and the US to arrange inbound tours for foreign groups to go on back-to-nature eco expeditions and to savour the rich flora and fauna of Malaysia’s jungles.

These trips include staying in longhouses, jungle trekking, caving expeditions to Niah and Mulu caves and other eco-nature tours in Taman Negara and Belum National Park.

Wong, who took over the company in 1980 after his partners pulled out, is still going strong with his company arranging at least 180 to 250 eco-tours for about 6,000 to 8,000 tourists a year. The company records annual revenue of between RM5mil and RM6mil.

His company also organises nature camps for business executives and students during the school holidays at its Jungle Lodge facility at 14th Mile Jalan Gombak, Kuala Lumpur. The facility is surrounded by a 100-year-old rain forest.

At his “green” hotel in Langkawi, The Frangipani Langkawi Resort & Spa – a four-star deluxe property with 118 villas, he says green practices including the 4 “Rs” (reduce, reuse, recycle and rethink initiatives) are adopted for proper waste management which literally “turn rubbish into gold”. Water and energy conservation are also steadfastly adhered to. The company also plants its own organic fruits, vegetables and herbal teas for its guests.

Wong says the Government should consider offering tax incentives and capital write-offs for cost incurred by industry practitioners to promote more green practices.

“Even exporters should start adopting green practices as there is talk that many European countries are looking into sanctioning exports from non-green-compliant countries as a measure to arrest environmental deterioration,” he says.

The Government’s initiative to ensure new government buildings feature energy-saving and other pro-environment measures is a good start to promote the green culture among property industry players.

Thursday’s launch of the Green Building Index (GBI), Malaysia’s very own certification scheme for sustainable buildings, is also part of the effort to green the property industry.

The GBI, developed by the Malaysian Institute of Architects (PAM) and Association of Consulting Engineers (ACEM), will encourage developers of housing and commercial projects to adopt environment-friendly features such as energy-efficient elements, rain harvesting and conservation of original land form and vegetation.

Wong says although the cost of developing a green building may be more than that of a conventional building, “the savings in operational costs would make it cheaper in the long run.”

“If a building is constructed with the right green designs and features, it will reduce energy cost by 50%, which is a substantial saving as energy easily makes up 25% of a building’s operating cost. Together with other forms of savings, green buildings can cut operating costs by about 60%,” he adds.

By The Star (by Angie Ng)

Clearwater focusing on green projects

The Clearwater Group aspires to turn its 240 acres in Seri Kembangan, Selangor, into an eco-friendly development under founding member and managing director Dian Lee Cheng Ling.

Known as Bluwater Estate, the leasehold gated and guarded development appears to be Dian’s most ambitious project to date.

Since her return from Australia where she studied communications, the eldest daughter of property developer Tan Sri Lee Kim Yew has been busy with several property projects.

Dian Lee

Clearwater Developments Sdn Bhd was set up by Dian and three partners in 2006 and their first project was serviced apartments, Clearwater Residences in Damansara Heights. Since then, she has added three brands to the group – Clearwater, Bluwater and The Heritage.

Clearly, the younger Lee would like to focus on eco-friendly projects. Yesterday, she flew off to New York’s Pratt Institute for a seven-week course on Sustainable Designs.

“It will cost quite a bit as Pratt is one of the premier design school in the United States for interior and architecture. I will also be taking my toddler son Jedi and his nanny with me,” says Lee.

She says motherhood has changed her and given her a new perspective on development.

“I’ve become more conscious of the environment we live in, the activities we can do to make this planet a better place for our future generations,” says Lee.

“I’m not the first to go on eco-friendly projects. There are other developers in town who have already done that but I would really like to go one step further.”

Lee has brought in Environmental Resources Management Ltd, a provider of environmental consulting services, to build Bluwater. She will be looking at four aspects – water, energy, landscape and waste management.

On the energy aspect, she says that at this preliminary stage, she would like all the 1,000-odd households to have solar heaters. She will also encourage the use of bicycles and buggies to go to the clubhouse instead of cars.

The properties there will be designed and built in such a way as to enable owners to collect rainwater for use. There are plans to keep the lake as clear and clean as possible for water sports.

The open-cast tin-mine lake will have lake-front bungalows. Right now, there are already two – her family’s weekend home and another which belongs to her father’s friend.

“We will spend RM2mil on trees and a lot more on landscaping to make this place as green as we can. We will also encourage better waste management, essentially the reuse, recycle and reduce concept with different bins for different types of waste. Our sewage system will not be linked to the lake.”

Lee says that after building several properties, she does not want to just build yet another project.

“I want to be passionate about it, to believe that this is the way to go.”

During a site visit, Lee says although there are some high tension cables running pass the main entrance, they do not cut across the housing estate.

The Bluwater Estate, formerly known as South Lake, used to belong to Mines Resort Bhd which was privately held by her father. She and her partners bought it at a “fair price” at a time when her father was scaling back his privately-held local property development activities.

She has also taken over a serviced apartment project fronting the lake, The Heritage, from her father.

Today, 600 of the 800 unit-project is tenanted. One of the blocks, comprising 200 units, will be sold en bloc.

“When the economy picks up, that will be sold. As it is, there is already a waiting list for those who want to rent units at The Heritage.

“With six universities and the Australian International School, which is located on Bluwater itself, we are confident there will be people who will want to invest in this area,” she says.

The studio units are already generating 8% to 10% yield for the owners (with rental of RM1,400 to RM1,500 a month), while the two- and three-room unit cost RM2,300 and RM2,500 to rent respectively, at a slightly lower yield.

The project is located across the highway from Mines Shopping Centre and fronts the lake in Bluwater Estate.

Bluwater is about 20km from the city and is served by the Besraya Highway, which is linked to several other highways.

However, The Heritage, although adjacent to Bluwater, will not be part of the gated and guarded development.

In the next couple of months, Lee aims to launch vacant bungalow land on Bluwater Estate at RM150 per sq ft.

These lots will be between 8,000 and 12,000 sq ft. Known as Bluhaven, there will be 18 lots initially.

The development will also have townhouses priced from RM850,000, semi-detached residential units and condominiums. These will be launched later.

By The Star (by Thean Lee Cheng)

Shopping in style at Kluang Mall

ESTABLISHED brands such as Sushi King, Secret Recipe and PDI are making inroads in secondary cities like Kluang in Johor.

Sushi King's outlet at Kluang Mall for one, is enjoying robust sales with long queues of people waiting to grab a seat during lunch and dinner.

In 2005, when Majupadu Development Sdn Bhd managing director Tey Ah Kau conceptualised the idea of building a lifestyle mall in Kluang that later would be the pride of the town, many were doubtful if it would work.

"After three years of research, we made a bold decision to move ahead of others here. We dared to develop something that many were pessimistic about. People wondered whether residents in Kluang would be willing to spend," Tey said.

With the guidance of retail consultant Richard Chan of RCMC Sdn Bhd, Tey decided that there was a still a need to fill an obvious gap despite existing competition.

"We take a long-term view," said Tey, who has been a property developer for the past 21 years.

Today, the RM100 million Kluang Mall with a 800,000 sq ft gross area is the largest in the town, with a primary catchment of 300,000 and a secondary catchment of 1.2 million from Batu Pahat, Muar, Pontian and Segamat.

Kluang Mall, which opened on December 24 2008, is developed and operated by Tenaga Nusantara Sdn Bhd, also owned by Tey.

Kluang Mall's tagline "Shop like a City" has worked in its favour as the mall has been performing satisfactorily since its opening. Seventy-nine per cent of its net lettable area has been filled.

Tenants, including Popular Book Store, Pacific Hypermarket, Pacific Department Store, Big Apple and Laksa Shack, drew 417,000 shoppers in February this year and 375,000 shoppers in March.

Meanwhile, Tey expects return on investment for the mall typically in seven to eight years.

Built on 2.63ha within the town centre of Kluang, the mall aims to cater to the younger Kluang generation who want finer things in life. The entire mall has WiFi connection.

By Business Times (by Vasantha Ganesan)

JLand aborts Windsor Trade stake purchase

JOHOR BARU: Johor Land Bhd (JLand) has decided to abort its plan to acquire 50.98% equity in Windsor Trade Holdings Sdn Bhd (WTHSB) for RM15mil cash.

Muhammad Ali (right) and JLand managing director Shafiqul Hafiz at the AGM

Chairman Tan Sri Muhammad Ali Hashim said the decision was reached after considering the current global economic slowdown.

He said JLand had earlier proposed to buy the stake in WTHSB to diversify its business activities to improve its earnings base.

“However, we want to focus on our core business of property development as the segment is becoming more challenging now,’’ Ali said after the company’s AGM yesterday.

WTHSB, through its 80%-owned subsidiary Windsor Trade Sdn Bhd, has been granted a 30-year concession to operate the barter trade terminal, Sandakan Integrated Trade Exchange Terminal.

The Sabah government, through Sabah Economic Development Corp, owns the remaining 20% stake in Windsor Trade.

The development of the terminal is estimated to cost RM315mil, inclusive of land cost, pre-development cost, construction of infrastructure and buildings, and equipment.

“We have a 1,102.79ha land-bank and we are looking at RM7bil in gross development value (GDV) when the land is developed over the next 10 to 15 years,’’ Ali said.

At present, JLand is undertaking three property projects – Taman Bukit Dahlia, Bandar Tiram and Bandar Dato’ Onn.

The 168.75ha Taman Bukit Dahlia in Pasir Gudang, expected to be completed by 2010, will have 4,100 units of mixed properties.

The self-contained Bandar Tiram township on a 485.62ha site, with 12,300 units and RM2.6bil GDV, is due for completion by 2020.

JLand’s latest project, Bandar Dato’ Onn is located 12km from Johor Baru City Centre. It is sited on 612.69ha and is to be developed over the next 10 years. The project boasts 17,800 properties and a GDV of RM4bil.

Ali said the company would be launching the Bandar Dato’ Onn Regional Commercial Centre this year.

“Covering 47.75ha, the centre will provide about one million sq m of floor area, making the township the largest commercial centre in Johor Baru district,’’ Ali said.

For the year ended Dec 31, JLand recorded pre-tax profit of RM25.29mil on revenue of RM138.69mil compared with RM8.29mil and RM63.36mil respectively in 2007.

By The Star (by Zazali Musa)