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Friday, March 27, 2009

Super Rich's appetite for property remains unshaken

KUALA LUMPUR: Luxury house prices have fallen around the globe, but the super rich's appetite for property remains unshaken, according to the Knight Frank/Citi Private Bank Wealth Report 2009.

Knight Frank London's head of residential research Liam Bailey said despite the global house prices falls, the rich are committed to property as an asset class.

“The results of our Attitudes Survey, which represents the views of a cross section of Citi Private Bank’s wealthiest clients, reveals that 55% of them plan to increase their exposure to residential property over the next two years,” he said.

Bailey added the wealthy want their investments to be both tangible and transparent amidst the turbulent times.

The Wealth report analyses prime residential property markets and the behaviour and attitudes of the wealthy.

It covered the property market in the UK, Europe, the Caribbean, Asia, Australia and Africa.

It is produced by Knight Frank in collaboration with Citi Private Bank and includes the 2008 Knight Frank Prime International Residential Index, Knight Frank/Citi Private Bank High Net Worth Individuals (HNWI) Attitudes Survey, Knight Frank World Cities Survey and Knight Frank Global Farmland Survey.

The report also showed a majority of HNWIs appeared to be sitting on the fence at the moment when looking at bricks and mortar as an investment class.

It added 57.1% of them were not making changes to their property portfolios, although over 90% have seen their property portfolios decrease in value during the credit crunch, with about a third of those hit by a substantial decrease.

According to the survey, property accounts on average for 30% of the HNWI's asset portfolios.
Although a number of investors admitted they might have to sell some property, it appeared that HNWIs still regarded property as a crucial part of their investment portfolios and have more confidence in it than other more ephemeral investments.

Some of the world’s richest people had cut down discretionary spending, with some of the most desirable prime residential property markets in the world inevitably affected by the global downturn.

According to the report, experienced investors realise they are firmly into the bargain-hunting stage of the property cycle, especially in the commercial and newbuild sectors with some HNWIs actively looking to take advantage of distressed sales to cheaply acquire stable assets with good yields.

However, there are those who seemed to be awaiting the bottom of the market but they risk missing out on the best opportunities, which could have been snapped up by those prepared to take more risks, it said.

Bailey said: “Although almost half the locations surveyed in Knight Frank’s Prime International Residential Index (PIRI) managed to show a positive overall return in 2008, price growth had either stalled or started to decline in nearly 75% of these locations by the end of last year."

Hong Kong saw the sharpest annual drop of 24.5%, Dubai, which recorded annual overall growth of almost 11%, and later saw prices fall by 19% in the last quarter of 2008. Prime properties in Monaco are the most expensive in the world, costing an average of €55,000 psm for its best properties, followed by London and Manhattan.

By The EDGE Malaysia

Glomac cuts target for new launches

A house in Bandar Saujana Utama

PETALING JAYA: Glomac Bhd has cut its new launches target this year by about 40% to RM400mil from an initial target of RM600mil to RM700mil due to the economic slowdown.

Nevertheless, the group still had 15 projects with a total gross development value (GDV) of some RM3bil to be launched in the next five to six years, said group managing director Datuk Fateh Iskandar Mohamed Mansor.

Glomac hopes to chalk up at least RM120mil in sales by the end of next month from its ongoing Glomac 360 property fair.

“We hope to achieve about 30% to 40% sales out of the RM400mil properties on sale during this period,” he told a press briefing at Glomac’s show gallery in Kelana Jaya on Wednesday.

The group currently has unbilled sales of about RM400mil.

For the third quarter ended Jan 31, the group posted a flattish net profit of RM9.5mil and a 5.5% decrease in revenue to RM81.1mil.

For the first nine months of its financial year ending April 30, the group generated sales of RM148mil.

Glomac’s property showcase, which runs from March 20 to April 30, offers both commercial and residential properties worth some RM400mil from 10 projects.

Among the properties on sale are the group’s Saujana Utama development in Sungai Buloh, Suria Stonor in Kuala Lumpur and Galleria in Sri Hartamas, Kuala Lumpur.

Its latest commercial project, Glomac Cyberjaya, with a GDV of RM180mil and located in the Cyberjaya Flagship Zone, is also open for bookings during the showcase period.

Glomac is offering incentives including loans of up to 100%, 0% interest during construction period, free legal fees on the sale and purchase agreement and free loan documentation during the promotional period.

By The Star

Metro Kajang unit buys land worth RM32m

METRO Kajang Holdings Bhd's subsidiary, Pelangi Semenyih Sdn Bhd has entered into a sale and purchase agreeement with Glengowrie Rubber Company Sdn Bhd to acquire 168.18 acres of freehold development land in Ulu Langat, Selangor for RM31.95 million.

Currently, the land is mainly planted with oil palm trees, Metro Kajang said in a filing to Bursa Malaysia.

The acquisition is in line with the group's strategy to acquire good, ready to develop land for its property development projects.

The land will be developed into a township comprising mixed residential and commercial properties with an estimated total gross development value of RM335 million over a period of seven years.

By Bernama

Boustead unit gets RM18.8m hotel deal

KUALA LUMPUR: Boustead Holdings Bhd unit Boustead Building Materials Sdn Bhd has been awarded a RM18.87mil deal from from Boustead Hotels and Resorts Sdn Bhd, also a subsidiary.

In a filing with Bursa Malaysia, Boustead said the contract involved the construction and completion of earthworks, piling and sub-structure works in relation to the proposed construction of a 12-storey, four-star, 301-room hotel and two levels of basement of car park in Mutiara Damansara, Selangor.

By Bernama