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Monday, March 16, 2009

Sime campaign netts RM86m property sales

Sime Darby Property's latest "Parade of Homes" campaign saw property sales of RM86 million within the first four days, showing the property market to be resilient amid the economic slowdown.

The campaign was held in conjunction with MAPEX 2009 from March 6 to June 15, 2009, covering both residential and commercial properties in Sime Darby's 10 townships.

"The main factors contributing to strong sales are the Parade of Homes exclusive benefits which include an interest rate of base lending rate minus 2.3 pc, special down payment scheme and no interest charge during the construction period," said Sime Darby Property's managing director Datuk Tunku Putra Badlishah.

Its first Parade of Homes campaign in June 2008 attracted over 15,000 visitors and generated sales worth more than RM246 million in nine days, the company said in a statement today.

The second campaign in November 2008 generated over RM146 million in sales even as Malaysians began to face the pandemic effects of a faltering global economy, it said.

"The success of the previous campaigns has contributed to the commendable first half of 2008 financial results of Sime Darby Property," the company said.

Revenue increased by 7.0 pc to RM566 million compared to the first half of the previous year .

Sime Darby's freehold properties range from affordable homes to high end residences with townships in Subang Jaya, Bukit Jelutong, USJ Heights, Bandar Bukit Raja, Ara Damansara, Denai Alam, Melawati, Nilai Impian, Planters' Haven and Putra Heights.

In conjunction with the latest campaign, the company is organising a property showcase from April 3 to 12 at the Sime Darby Convention Centre.

By Bernama

TA may delay REIT launch

TA ENTERPRISE Bhd (TAE), which aims to list its property unit by April, may delay launching a real estate investment trust (REIT) due to unfavourable market conditions, company sources said.

Business Times had in 2007 quoted TAE group managing director and chief executive officer Datin Alicia Tiah as saying that the stockbroker and property developer was aiming to launch a property REIT by this year, with three Malaysian and foreign assets worth over RM1 billion.

But plans have changed in the last one year that the company is now eyeing a hospitality REIT, after buying Coast Whistler Hotel in Vancouver, Canada, now worth C$65 million (RM191 million) and The Westin Melbourne, a five-star hotel in Australia, for RM390 million last year, a source said.

TAE also owns the five-star Radisson Plaza Hotel in Sydney, Australia, currently worth A$120 million (RM286 million).
These brings to total three hotel assets it has to do a hospitality REIT. Its other prime properties are Menara TA in Kuala Lumpur, valued at RM230 million, and Teresan Centre, a triple A commercial building in Vancouver, worth C$180 million (RM529 million).

But a source said TAE is being cautious on its plan as some Malaysian REITs have been sold down and are trading below their net asset values as the property market and rental yields soften.

"There's negative sentiments and I don't think the market place can take too many things now. TAE will, however, continue to work on the plan and play it by ear. It will launch rightfully, to enhance shareholders' value," the source added.

The challenges facing REITs nowadays are the inability to raise capital due to tighter credits and lack of investor confidence.

When contacted by Business Times, Tiah said the company is still looking at launching a REIT.

"We have yet to decide whether it will be a property or hospitality REIT. However, the outcome will depend on opportunity and the market condition," she said in an email reply.

Tiah said the company is now focused on buying more properties in Malaysia and overseas, particularly undervalued or distressed assets in the hospitality industry.

"There are many prime properties held by hedge funds which are currently available and going cheap, following a massive redemption by them," she added.

By Business Times (by Sharen Kaur)

IOI Prop minority shareholders hold out for better offer

RETAIL minority shareholders of IOI Properties Bhd are holding out for a better offer price in the proposed privatisation of the company.

Following a dialogue organised by the Minority Shareholder Watchdog Group (MSWG) on Friday, the retail minority shareholders had expressed the following concerns, according to a statement from the MSWG to StarBiz:

One, they expect a better offer price. Retail minority shareholders prefer to hold out and not accept the voluntary takeover offer (VTO) unless they are given a better offer price.

And second, they believe the offer should come in one preferred option, to be fully satisfied in cash.

These investors had originally wanted to invest in the property sector. The swapping of IOI Prop shares for IOI Corp shares would inevitably expose them to the plantation industry which is now facing a downturn.

IOI Corp had offered to buy the remaining shares it does not own in IOI Prop for RM519mil, through an offer of 33 sen in cash and 0.6 IOI Corp shares at an issue price of RM3.78 each for the remaining stock.

The proposal by IOI Corp to take its property arm private values IOI Prop at RM2.598 a share. IOI Prop closed last Friday at RM2.43. However, the investors view the offer was below IOI Prop’s revised net tangible value.

Moreover, MSWG said: “Retail minority shareholders are now disappointed, given the fact that the board and management of IOI Corp had expressed in early 2007 that they would not take IOI Prop private.’’

IOI Corp executive chairman Tan Sri Lee Shin Cheng had said in October 2006 that there was no plan at the time to take IOI Prop private. However, he added that nothing was static and if there was a need to change the company would do so.

Retail minority shareholders also raised the concern that the acceptance level of the VTO is not disclosed by the board and management of IOI Prop on a daily basis.

“The last disclosure of the public spread of IOI Prop of 23.06% was made on Feb 23 after the notice for the VTO was made on Feb 4.

“In the spirit of transparency, retail minority shareholders have proposed that the acceptance level of VTO be disclosed daily to keep the market fully informed on the progress of the offer,’’ said MSWG chief executive officer Rita Benoy Bushon.

She said MSWG would call the management of IOI Prop today to find out the acceptance level of the offer so as to keep minority shareholders fully informed on the latest status of the offer.

By The Star (by Yap Leng Kuen)