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Saturday, February 7, 2009

Developers wooing buyers with sweeteners

Some developers are offering goodies to home buyers. They include YTL Land & Development for its La ke Edge gated project,....

To sweeten the deal for potential house buyers in this climate of uncertainty, some property companies have come up with several goodies in the form of rebates and ang pows to entice them.

Sime Darby Bhd’s property division, for example, is giving out special ang pow treats until Feb 9 to promote its Bukit Raja properties in Klang. Buyers of intermediate and corner/end residential homes are respectively offered RM3,888 and RM6,888 cash treats over this period.

A salesman from the property group explains that the treat is not meant to offset the price of the house but to help buyers pay for the stamp duty.

...MK Land for its Armanee Condo.

Meanwhile, MK Land Holding Bhd is offering a 20% rebate for purchasers of its completed Armanee Condominium at Damansara Damai. In other words, the company’s salesman says, if the unit costs RM398,000, buyers will be able to get it for RM318,000.

“You only need to pay a booking deposit of RM2,000 and the rest can be paid by a loan from banks. This promotion will end on March 31,” she says.

...TH Properties for its Bandar Enstek and...

TH Properties Sdn Bhd, the developer of Bandar Enstek near the KL International Airport (KLIA), also includes some goodies for buyers of its super-link houses and double-storey bungalows.

Those who opt to buy the super link-house will enjoy, among other things, zero-entry cost (including stamp duties), a five-year warranty, special loan packages with up to 100% financing and no progressive interest during construction.

Priced at RM280,250 with a total land area of 2,080 sq ft, all units have already been completed.

For the Matahari double-storey bungalows that are going to be launched soon, buyers are offered zero-entry cost (including MOT and stamp duties), free Streamyx for one year, a five-year warranty and free first-year golf membership at the Royal Sri Menanti Golf Club.

They will also get special loan packages with up to 100% margin of financing and no progressive interest during construction.

Priced from RM602,092, a total of 32 units will be available with minimum built-up of 2,671 sq ft and land area from 6,600 sq ft.

This project is strategically located 10 minutes away from KLIA, 38 minutes from Kuala Lumpur City Centre and five minutes from Sepang F1 Circuit.

Mah Sing Group Bhd, on its website, says it is offering a financing programme to attract buyers for its residential and commercial properties.

The scheme, which will end March 31, is to allow them to own their dream home by paying only 5% of the purchase price and nothing else till the completion of the property.

As for the commercial projects, buyers only need to fork out the down payment and enjoy no further payments until completion of the property.

However, both offers are not applicable for cash buyers.

Apart from that, Mah Sing will also absorb the legal fees for the sale and purchase agreement, loan documentation and memorandum of transfer for selected properties.

Another developer, YTL Land & Development Bhd, is offering interest-free payment to the bank for its Lake Edge gated project in Puchong.

A salesman, when contacted, says the company will reimburse the interest payment from the bank to buyers until the development is completed.

“Buyers only need to pay 10% booking deposit and we will reimburse the interest charge paid to the bank when they give us the payment receipt,” she says.

With that, there is expectation that more developers will soon join the trend of throwing in sweeteners in their property launches to woo buyers.

By The Star (by Edy Sarif)

Sepang Gold Coast a gold mine for tourism

Golden prospects: Ong (second from left) commenting on the Sepang Gold Coast project as he views a model of the development. With him are (from left) Idris, exacutive chairman/CEO of Sepang Gold Coast Yanki Regan and Ho.

Given its strategic location, the Sepang Gold Coast has all the advantages to become an iconic landmark of resort living that attracts visitors from all over the world.

Transport Minister Datuk Seri Ong Tee Keat said it was just a fishing village fronting the Straits of Malacca but its developer saw its potential to be a tourist attraction.

“I must commend the foresight of the developer for choosing this location.

“I believe the Sepang Gold Coast will eventually become a renowned tourist destination,” he said at the media appreciation night organised by Sepang Gold Coast and Malaysia Airlines in Sepang on Wednesday.

In his speech, Sepang Gold Coast Sdn Bhd president Ho Hock Seng said Sepang Gold Coast was designated by the Selangor government as a key and strategic component of a new Klang Valley.

“In response to the growing congestion in the Klang Valley, the Selangor government has drawn up plans to transform this southern area into the second Klang Valley,” Ho said.

He said the company’s vision was to transform the coastal region into an eco-friendly international destination embracing the rich culture of a global village.

Also present at the event were Malaysia Airlines managing director and chief executive officer Datuk Seri Idris Jala and The Star group chief editor Datuk Seri Wong Chun Wai.

By The Star (by Ng Cheng Yee)

Call for monetary incentives to boost take-up

The dismal outlook of the global economy and the adverse impact on the people’s sentiment is expected to further weigh down on the performance of the local economy and the various business sectors. The storm from the US financial crisis is still wreaking havoc across the continents with no end in sight.

As with most businesses, property sales have taken a severe beating, with property companies reporting sales drop of between 60% and 70% in the last few months. The near-term outlook for the property sector is likely to remain weak and industry players are expecting to see a prolonged slow demand in the coming months.

With more bad news of massive retrenchments around the globe, especially among multinational corporations, sentiment will continue to remain sluggish and buying decisions will be further put on hold.

The market has not bottomed out yet and any signs of recovery can only be seen around the third quarter of this year at the earliest.

With such sluggish outlook, industry players will continue to delay their project launches to avoid been caught in a low take-up situation.

During the current challenging times, it is safer for developers to be realistic and prudent with their project launches. Instead of moving into huge greenfield developments in uncharted territories, it will be better to consider smaller projects in established markets with fast turnaround time as the risk is lower. The fast completion of the projects will ensure smoother cash flow for the companies.

Developers with expertise for fast project turnaround and have strong branding advantage will be well sought after by landowners to enter into joint ventures to steer new developments.

As demand for high-end residential properties has eased substantially, industry players should look into building more affordably-priced houses within well planned and secure enclaves. Although these houses will have smaller built-up and land areas, the quality in the workmanship and materials used should not be compromised.

To promote greater interest in house purchase and give a boost to the industry, it will be worthwhile for the Government to consider providing a RM10,000 grant to first-time house buyers of property priced below RM300,000.

According to FIABCI Malaysia president Datuk Richard Fong, although the incentive will only cost the Government RM100mil if a total of 10,000 such grants were given out, it will be able to raise sales of RM2.5bil for the whole industry (based on average house price of RM250,000). This will be a much needed shot in the arm for the housing industry during the current sluggish market scenario.

Although the high unbilled sales recorded by property companies in 2007 will cushion them from turning into the red and tide them over this year and early 2010, earnings beyond that period, especially in 2011, will be severely impacted if sales do not pick up later this year.

With so much uncertainty still pulling sentiments down, any monetary incentives for buyers will go a long way to give a boost to the market.

Angie Ng is deputy news editor of The Star and she believes a helping hand from the Government for first time house buyers will help ease their burden during the current challenging times.

By The Star (by Angie Ng)

Property firm takeover targets

With IOI Properties Bhd being taken private by its parent company IOI Corp Bhd, other property players are also looking like promising targets for major shareholders to increase their stakes or even be taken over.

Cash-rich property companies, whose share prices are trading at very low valuations due to the weak market, may turn out to be attractive takeover targets.

Among them are Glomac Bhd and Sunway City Bhd (SunCity). Sunway group when contacted by StarBiz, declined comment.

Analysts say despite uncertainties in property development, SunCity has a growing pool of assets which provide sustainable recurring income like the Sunway Pyramid Mall, Sunway Carnival Mall, Monash campus, Sunway Medical Centre and Sunway Hotel and Resort.

They expect the recurring income to account for about 60% of SunCity’s earnings before interest and taxation for the financial year ending June 30 (FY09) compared with just 34.8% in FY07.

SunCity posted net profit of RM45.12mil in the first quarter ended Sept 30 while its net asset per share was RM3.67. At the current price of RM1.60, it is trading at a steep 0.43 times price-to-book. However, it has RM534.97mil in cash and cash equivalents.

SunCity’s major shareholders are Sungei Way Corp Bhd with 27.86% and the Singapore government, 21.28%.

For Glomac, at its current price of 49.5 sen, it is trading at a steep discount of 0.27 times price-to-book. It posted net profit of RM7.72mil for the second quarter ended Oct 31 while its net assets per share was RM1.81, analysts say.

Glomac’s pipeline of niche projects include its commercial developments in Mutiara Damansara and the final phase of Plaza Kelana Jaya as well as its RM800mil mixed-development project, Glomac Damansara.

Its major shareholders are group executive chairman Tan Sri Mohamed Mansor Fateh Din with 24.12% stake and executive vice-chairman Loong Tuck Fong, 19.51%.

AmResearch in a recent report says Glomac’s share price, around 49 sen, was trading at a steep 67% discount to its estimated net-asset value of RM1.50 per share.

As at end-October, it had total unbilled sales of RM443mil or 1.4 times revenue for the financial year ended April 30, 2008, while its net gearing was healthy at 10%.

“Backed by its strong financials, we think that the balance sheet risk is low although earnings are expected to remain flat in FY10 (at RM31.9mil),” the research house says.

However, AmResearch says despite the steep value in Glomac, it does not see any visible catalysts to trigger a share price re-rating as the company might scale back its projects amid the economic slowdown.

When contacted, a Glomac spokesman said the company “is not looking at privatisation.”

CIMB Equities Research says although share prices of property companies have fallen sharply after a disastrous 2008, the fundamental outlook for the property sector remains poor.

As for the IOI group, IOI Corp has extended a voluntary general offer (VGO) to minority shareholders of IOI Prop at about 8 times price-to-earnings ratio in a cash-cum-share deal.

The offer for IOI Prop is RM2.598 per share to be satisfied by 33 sen cash plus 0.6 new IOI Corp shares.

TA Securities in a report on Thursday feels the offer is low compared with its price-to-earnings target of 9 times for IOI Prop, but would not face much of a challenge from minority shareholders.

However, it adds: “Despite cheap valuation, we believe IOI Corp could eventually privatise IOI Prop without much impediment from minority shareholders during an EGM as IOI Corp and its related companies jointly own 76% of IOI Prop.”

TA Securities feels that minority shareholders should take the deal to avoid future marketability issues of IOI Prop shares given that it would soon be delisted from the stock exchange.

The research house has upgraded its target price for IOI Prop to RM2.60 from RM2.50, in line with the proposed VGO.

By The Star (by Joseph Chin and Loong Tse Min)

Civil projects worth US$698b on going in UAE: Survey

DUBAI: Work on civil construction projects worth US$698 billion (US$1 = RM3.61) continues to move ahead in the United Arab Emirates despite the negative impact of the global economic crisis in this Gulf nation, according to a survey.

Published by Proleads Global, the report concludes that 52.8 per cent of the total current civil construction project portfolio of the UAE, worth a combined total of US$582 billion, is now on hold while a further US$698 billion remains in operation.

It also finds that while numerous real estate projects are scheduled for completion in early 2009, the pace at which projects are being completed has slowed down.

“The UAE may no longer be the land of milk and honey but it is still in a far better position than most,” said Emil Rademeyer, director of Proleads Global, the Dubai-based publishers of what is billed as the first in-depth investigation of its type.
The Proleads investigation encompasses 1,289 projects in real estate, including residential, commercial and Proleads has recorded a sharp increase in the rate at which projects have been placed on hold across all sectors of the industry. Real estate was the hardest hit.

“Within the real estate sector, it is likely we will witness more deferred projects throughout 2009 as will be the case, but to a lesser degree, within the infrastructure sector,” the Proleads report says.

By Bernama