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Wednesday, April 1, 2009

IJM Land aims for RM250m in home sales

IJM Land Bhd, the property development arm of the IJM Group, is targeting between RM200 million and RM250 million in sales with the introduction of its home ownership plan, My Space Plan, managing director Datuk Soam Heng Choon said today.

The plan would attract buyers to choose and acquire their preferred living space from condominiums to landed properties according to their budget, starting from today until June 30, he said.

"If we have the right product in the right location, people will still buy despite the current economic slowdown," he told reporters at the launch of the plan in Kuala Lumpur.

Soam said the tailor-made, home-ownership plan, is applicable to all its properties that are in various stages of development in Penang, the Klang Valley, Seremban, Johor, Sabah and Sarawak.

"The current economic situation should not deter first time buyers or investors from buying properties as they can enjoy our incentives like a low down payment from RM500 and cash rebates of up to a maximum of 10 per cent, he explained.

The plan also offers a low interest rate for the 5:95 payment scheme, cash back guarantee, zero interest during the construction period, six months installment holiday and an easy payment scheme.

He said the company had a land bank size of 3,600 hectares located at strategic locations, including its Canal City development project in Kuala Langat, Selangor.

This will keep IJM Land busy over the next 20 years with a potential gross development value of RM17 billion.

Meanwhile, the company plans to launch several property project worth RM750 million during its current financial year ending March 31, 2010, Soam said.

"Although Malaysia's economy is likely to shrink in the first quarter, we still see people buying property. We have a very young population who need homes," he said.

Soam also disclosed that the company had no plan to halt its RM500 million mixed development project in Changchun, China.

"The project is in progress. We have submitted our proposal for approval," he added.

By Bernama

Call to scale down Penang high-rise projects

FOUR property developers involved in high-rise projects in Penang's heritage zone in George Town have been asked to consider scaling down their projects in a bid to safeguard the state's heritage status.

The Penang Heritage Trust (PHT) contends that losing the recognition given by the United Nations Educational, Scientific and Cultural Organisation (Unesco) on the World Heritage List will likely affect all businesses in the city, including the value of the properties the four developers are hoping to build.

The developers comprise Asia Global Business Sdn Bhd, Boustead Holdings Sdn Bhd, E & O Bhd and the Low Yat Group.

The projects in question are AGB's Pier Hub @ Weld Quay and Boustead Royale Bintang Hotel behind the General Post Office in Lebuh Downing, both lying in the heritage core zone.

The other two are E & O Hotel's extension and a 23-storey hotel in Jalan Sultan Ahmad Shah by the Low Yat Group in the buffer zone, both of which are reported to be 84.4m high.

The World Heritage Committee, which administers Unesco's World Heritage programme, stipulates in its guidelines that a maximum height of 18m (or roughly five storeys) has been set for buildings on the island's heritage core and buffer zones.

"We are surprised that the Penang Municipal Council could have allowed such a major slip-up in failing to apply Unesco heritage guidelines on these four building applications," PHT president Dr Choong Sim Poey said in a statement yesterday.

He said regular meetings of the State Heritage Conservation Committee since 2000 were made fully aware of the guidelines during talks on the conservation of the heritage city.

"All relevant state and municipal council officers including the Penang branch of the Real Estate and Housing Developers Association Malaysia (Rehda), along with PHT representatives were part of this committee," Dr Choong said.

He said while the four developers could have been misguided by the planning officers, they should now seriously reconsider their options, after being made aware that George Town stands to lose her heritage status.

"Somewhere along the line, a price will have to be paid for these mistakes, either in losing the Unesco status or compensating the developers," Dr Choong said.

"The government and the people will have to decide which is the greater price to pay," he added.

Meanwhile, Rehda in an advertorial taken out in two English dailies last week noted that there is no absolute prohibition of any structure going above 18m.

"The ongoing furore over the four projects, notwithstanding the fact that they were approved by the council according to the then prevailing guidelines, does not inspire confidence in would-be investors in our state," the association said.

"This is more so when we read that the owners will now be invited and persuaded to reduce the heights of their approved structures," it added.

By Business Times (by Marina Emmanuel)

Promoting green buildings

GREEN property development is currently in vogue. To help in rating these green buildings, the Malaysian Institute of Architects and the Association of Consulting Engineers Malaysia have jointly developed a rating system – the Green Building Index.

A preview of the Malaysian version of green building rating system was held in conjunction with the Green Design Forum on Jan 3 at the Kuala Lumpur Convention Centre.

Two different sets of Green Building Indices have been developed for commercial and residential properties.

The assessment criteria of the Green Building Index for commercial and residential buildings include energy efficiency, indoor environmental quality, sustainable site and management, materials and resources and water efficiency.

Based on these criteria, commercial buildings will be rated and certified silver, gold and platinum.

This is a new green rating system in addition to the current more than 100 types of environmental rating tools available globally.

Among the well-known rating systems are LEED (the United States and Canada), Energy Star (US), BREEAM (Britain), CASBEE (Japan), Green Star (Australia) and NABERS (Australia).

Most of these tools rate a building through its design and construction phase. Only Energy Star, NABERS and ABGR rate a completed building in operation. The Green Building Index is expected to be applied to new buildings.

The green building property trend is very much driven by developers to differentiate their new developments to add a marketing edge to their new projects.

This is evidenced by GTower and 11 Mont’ Kiara which received a Green Mark Gold certification (provisional) Award and Green Mark Certified Award (provisional) respectively from the Building and Construction Authority of Singapore.

Such certification could potentially differentiate the properties from other competitive developments.

A newly developed green building is perceived to have lower development risk as it readily attracts and retain tenants.

There is willingness by occupiers and owners to occupy such sustainable buildings in the US and Australia. Such buildings are perceived to provide a better workplace which could enhance productivity, reduce energy costs, improve indoor environment quality and reduce carbon dioxide emissions.

With the introduction of the Green Building Index in Malaysia, it is expected that the initial ratings will focus mainly on office buildings and that most of the buildings to be rated will be new ones.

The effect of the rating will create a dichotomy of buildings i.e. green and non-green buildings.

While evidence is starting to emerge to confirm the performance benefits of green buildings in the US, there is relatively little quantitative evidence in Australia and other countries where green buildings are newly introduced.

Green buildings in the US are found to outperform non-green buildings in occupancy rate, capital values and rental rates. Green buildings command a rent premium and have a higher occupancy rate.

However, there are debates in Australia on whether green buildings necessarily command a premium in capital values.

Theoretically, green buildings may have a lower level of obsolescence and operating costs, thereby offering better net operating income and lower capitalisation rate.

However, being new buildings, it is arguable whether an increase in rental or capital value can be attributable to the green building features rather than the properties just being new.

Specifically, would there be any significant differences in the returns from an existing prime office building and a similar green building?

Aren’t new prime office buildings always designed with better specifications, equipped with the latest services and automation systems which are more energy efficient, water efficient and better indoor environmental quality?

When the dichotomy of green and non-green buildings is formed, there will be a profound effect on property investment.

There will be implications to property fund managers, particularly real estate investment trust managers, who may want to re-examine their property holdings in existing property portfolios, criteria for future new property acquisitions and property portfolio strategies.

Non-green buildings are likely to continue to be the bigger stock of commercial spaces. To remain competitive, the challenge is for property owners to refurbish these buildings to turn them into green buildings.

● Associate professor Dr Ting Kien Hwa is director at the Centre for Real Estate Research, Universiti Teknologi Mara. We welcome your feedback on this article. Please e-mail to

By The Star (by Dr Ting Kien Hwa)

Demand in Shanghai residential market emerges

KUALA LUMPUR: Demand in the Shanghai residential market has gradually re-emerged as developers slashed house prices since the end of last year.

“The overall market saw a decrease in prices but there is an increase in sales volume in March,” said Colliers International's East China division, director of research and advisory Hingyin Lee when presenting Colliers' March 2009 Shanghai Research Bulletin.

In February, sales surged 136.5% year-on-year and 52.2% month-on-month, as the average home price experienced a drop by 13.2% month-on-month to 12,314 renminbi (RM6,569) per sq m.

Although the number of visitors to the Shanghai Spring Real Estate trade fair held from March 10 to 12 hit new highs, the wait-and-see attitude was still overwhelming, said Lee.

The Shanghai municipal government has also issued a notice in March in relation to the progress of the redevelopment of old districts’ where district and county-level governments are encouraged to purchase low-to-mid end commodity residential properties to resettle residents who are affected by re-development.

“We believe the government’s acquisition for the low-to-mid class housing will help drive demand in the market,” said Lee.

As for the land market, it has been quiet overall with several prominent developers seen taking part in land auctions.

Three residential plots first listed for auction sale in 2009 located in the sub-urban districts such as Jiading and Fengxian were sold at the initial bidding price, with the largest piece measuring 149,813 sq m located at Xuhang town, Jiading district acquired by the Shanghai Jiading Real Estate Development Company Ltd (Shanghai Jiading).

Lee said the land plots acquired by the local government-owned enterprises suggested that they believe the market is near to touching the bottom.

The Grade A office market in Shanghai also saw the first major en-bloc transaction in 1Q2009 after a lacklustre period.

Transacted on March 19, the POS Plaza located at Pudong district was acquired by the Lujiazui Group from the South Korea-based POSCO Engineering & Construction Co Ltd for 1.76 billion renminbi.

“This deal implies an initial yield of 8.9% and suggests that domestic investors with strong balance sheet will become the market players,” Lee added.

By The EDGE Malaysia

WCT aims to secure projects worth RM1b

WCT Berhad, Malaysia’s biggest construction and property development group, aims to secure RM1 billion worth of new projects in Malaysia and the Middle East this year.

WCT regional general manager for the Middle East Elina Abdul Aziz said the group was tendering for projects in Abu Dhabi and Oman.

The group, with RM2.6 billion order book as at Dec 31, 2008, is now positioning itself in three major markets -- Malaysia, Vietnam and Middle East.

“In spite of the slowdown in Middle East markets, there are still opportunities in countries such as Oman and Bahrain.

"In major cities such as Dubai where development has reached its height could be experiencing some slowdown," she told BERNAMA during the Malaysia Services Exhibition 2009 which ended in Dubai recently.

Elina said it was crucial for WCT to position itself and strengthen its foothold in the Middle East market in view of more opportunities when the economy recovered.

She said the Abu Dhabi Formula 1 circuit, one of the iconic projects in Middle East, will be the platform for WCT to expand further in the region.

"The circuit will be completed in August in time for the race date in November," she said.

The project, costing 3.3 billion dirham (US$1=3.704 United Arab Emirates dirham) is reputed to be the world's most modern and finest F1 circuit, with a 50,000 spectator capacity.

WCT has also secured the 235 million dirham Yas Marina Royal Yacht Club located adjacent to the F1 circuit to host the Royal family of Abu Dhabi and VIP visitors for the Abu Dhabi F1 Grand Prix.

"We entered the Middle East construction market in 2002. The Bahrain Formula One circuit project, which we completed at a record time of 16 months, provided us the platform to penetrate into the Middle East market," she said.

WCT's current projects in the Middle East include the 1.6 billion dirham Bahrain City Centre, the country's largest leisure and entertainment hub, 43km 800 million dirham West Dukhan Highway in Qatar and infrastructure work at the New Doha International Airport.

The 2.6 billion dirham airport is touted to be the most modern international airport in the Gulf region.

Elina said while the economic climate and financial situation have become more challenging now due to low demand for construction projects owing to the global economic downturn, WCT is confident of weathering the economic crisis.

She said infrastructure projects are still in demand in the Middle East region though the clients may be more selective.

"The projects we are doing are not affected by the economic downturn and clients are keen to go ahead with the projects.

"In Dubai, for instance, we are finishing with the storm water project and are looking at tenders for infrastructure projects.

"The Middle East market looks promising now while in the next three years Vietnam will be an attractive market," she said.

Elina said to be successful in overseas markets, especially in the Middle East, it is crucial to work with local partners.

In Vietnam, WCT is focusing on the Platinum Plaza project, set to be the country's largest leisure and entertainment centre, she said.

The project will be completed in 2014.

By Business Times

Axis REIT plans bond sale to refinance debt

AXIS Real Estate Investment Trust, the world's only Islamic office and industrial REIT, plans a bond sale in the first half of this year to help refinance debt as it prepares for potential acquisitions this year.

"There's nothing worse than having the sale of the century if you haven't got any money to buy anything," Stewart LaBrooy, chief executive officer of Axis REIT Managers Bhd, manager of the property trust, said in an interview in Kuala Lumpur on Monday.

"The-re's a lot of opportunities and fat pickings," he added.

Axis REIT, which is eyeing RM100 million of property assets, may sell Islamic bonds under a seven-year programme to refinance about RM220 million of debt, he said. It may also sell new stock to private investors.

Axis REIT owns RM726.4 million of assets in Malaysia, from offices and warehouses to logistic centres. It is taking advantage of a global recession to snap up properties at cheaper prices and ride on an eventual rebound when economies recover.

The company was reclassified as an Islamic REIT from a conventional property trust in December, allowing it to attract a wider pool of funds, LaBrooy said.

Axis REIT may raise about RM70 million selling new units to private investors to help fund any acquisitions, LaBrooy said. It raised RM90 million last year from a placement of 50 million units and will consider the fund-raising plan once it refinances its existing debt, he said.

Still, it won't be easy to acquire high-yielding properties amid the economic decline, said Terence Wong, an analyst at CIMB Investment Bank Bhd.

By Bloomberg