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Wednesday, May 6, 2009

The RM5.2bil Light project to shine on IJM Land

An artist’s impression of The Light Waterfront Penang residential precinct

PETALING JAYA: IJM Land Bhd should see a boost in income with the launch of its flagship project, The Light Waterfront Penang, in the third quarter, analysts said.

The project has an estimated gross development value (GDV) of RM5.2bil. It has been scheduled for launch in the first quarter but was deferred when the property market softened under the pressure of the global recession.

Located on 61.5ha just off the Penang Bridge on the eastern coastline of Penang island, it will be developed in three phases over 12 years.

AmResearch said with the launch of The Light project, IJM Land’s three-year earnings compounded annual growth rate would be strong at 49% over financial years ending March 31, 2010 to 2012.

“The company’s annual sales are expected to rise from RM750mil in FY10 with the maiden launch of The Light Linear and The Light Point to more than RM1bil in FY11 with the launch of The Light Collection low-rise residences and sea-front bungalows,” it said in a report.

The research house’s earnings estimates are underpinned by unbilled sales of RM700mil and sales of IJM Land’s existing projects, including Seremban 2, S2 Heights, Taman Perling and Bandar Utama Sandakan.

The freehold integrated waterfront residential and commercial development of The Light will comprise 1,177 residences, including waterfront villas and condominiums.

The first phase of the residential series will be The Light Linear, comprising 328 units with built-up from 1,475 to 1,539 sq ft. With prices at around RM400 per sq ft, this phase will have a GDV of RM200mil.

The next phase, The Light Point, offers 88 condominium units with built-up from 1,830 to 4,090 sq ft at a GDV of RM100mil.

Priced around RM500 per sq ft, or an average of RM1mil a unit, the condos will have sweeping views of the Penang Bridge, the marina and George Town city.

Subsequent phases will be The Light Collection with GDV of RM600mil and sea-front bungalows worth RM300mil.

According to IJM Land managing director Datuk Soam Heng Choon, The Light represents the company’s initiative to showcase the best in integrated seafront living with residential, entertainment, business and hospitality in one dynamic hub.

For the project’s construction, IJM Land will leverage on its parent IJM Corp Bhd’s construction expertise.

IJM Corp is a contractor for several high-end condominium projects in the Kuala Lumpur City Centre (KLCC) area such as The Binjai and Commerce Asset’s headquarters in Jalan Raja Laut.

In its report, AmResearch said IJM Land had the attributes of a blue-chip proxy to the listed property sector.

This is given the potential enlargement of its market capitalisation and gradual improvement in its free float from future placements by parent IJM Corp.

“We understand from management that IJM Corp plans to gradually trim its holding in the property vehicle to 60% from the current 77% to promote greater institutional shareholding,” it said.

It added that the move would promote greater trading liquidity in IJM Land’s shares.

Also planned for launch in the third quarter is the Nusa Duta development on 127 acres in Iskandar Malaysia, Johor.

The RM320mil project will comprise mainly landed properties priced from RM300,000.

By The Star (by Angie Ng)

Sheung Shui site fetches HK$61m in first land auction in 12 months

The government yesterday sold a small piece of land for twice the floor price in its first auction in almost a year while an official report showed property sales rose to a 10-month high last month, indicating that sentiment may be warming up.

The Sheung Shui site attracted 11 bidders and was sold for HK$61 million, more than double the HK$30 million opening bid, and beat analysts' expectation of between HK$39 million and HK$50 million.

The auction was the first since May last year as developers shied away from buying land amid the weak property market and the global financial turmoil. Surveyors said the aggressive bids showed small developers were hungry for sites although key players were still cautious.

Coda Properties chairman Richard Tong Kwan-ming won the site on the 90th bid. The company plans to invest HK$20 million to turn it into an office with two shops. Since no residential units are planned for the development, Coda will get 40 per cent more space than if flats are added to the project.

As a gross floor area of 22,054 square feet of commercial property can be built on the 3,292 square foot site, the land price will be HK$2,766 per square foot. The location is a former water pump station opposite the Shek Wu Hui Post Office.

Mr Tong has been an active buyer in the investment property market, usually focusing on commercial and luxury residential properties in the urban area.

"I want to invest in urban areas, but there is no choice. So I have to pick the site in a prime location in a suburban area," he said.

"Demand for office and retail space is strong in Sheung Shui, where the parallel-import groups are active. Office rents may reach about HK$20 per square foot."

Auctioneer Chris Mills and property agents said the land sale result would not have an impact on property prices because of the site's small size.

Savills Valuation and Professional Services managing director Charles Chan Chiu-kwok said the site was well received by small developers because of its low investment cost and prime location. "It shows they are desperate for development sites," he said. "But it doesn't mean major developers are also interested in land acquisitions as they remain cautious due to the global financial crisis."

Meanwhile, the Land Registry said 11,148 property units were sold last month, up 38.28 per cent from March or 1.85 per cent from April last year. Sales value surged 41.03 per cent from March to HK$40.32 billion, 20.32 per cent higher than the HK$33.51 billion recorded in April last year. The figure is also a 10-month high since a sales peak of HK$57.48 billion in June last year.

By South China Morning Post

MRCB rises on winning RM239m jobs

MALAYSIAN Resources Corp, a property developer and builder, rose to an 11-month high after RHB Research Institute Sdn Bhd said the company won two building contracts valued at RM239 million (US$68 million).

The shares advanced 3.3 per cent to RM1.25, the highest close since June 17. The stock has surged 78 per cent this year, making it the third best performer on the benchmark Composite Index.

“The key new jobs and internal work will underpin construction profits,” RHB said in a report today. RHB increased its target price on the stock to 86 sen from 69 sen, maintaining its “underperform” rating.

The contracts are the first building jobs the company has secured so far this year, increasing its order book to RM2 billion, RHB said.

It raised its profit forecast by 34 per cent for 2010 and 36 per cent for 2011 to reflect higher earnings from construction. Malaysian Resources reported a RM39.3 million loss in the fourth quarter of last year as sales slid.

One of the projects include upgrading a road network of Kuala Lumpur Sentral, which comes under the government’s stimulus package, RHB said. The government unveiled RM67 billion of stimulus measures to help revive economic growth.

Malaysian Resources is the builder of Kuala Lumpur Sentral, Malaysia’s biggest bus and rail transport hub, where it is also constructing offices and condominiums.

The other contract is the “rehabilitation” of a condominium project, the report said.

The company also secured a key tenant for its 40 per cent- owned 348 Sentral, a RM650 million office and serviced apartment project, RHB said. The foreign oil company took 80 per cent of the total office space there, the report said.

Malaysian Resources managing director Shahril Ridza Ridzuan didn’t answer calls to his mobile phone or immediately respond to a text message.

By Bloomberg

Developers in Negri Sembilan get lifeline

The Negri Sembilan government will be reviewing its bumiputera housing quota policy to assist developers sell unsold bumiputera housing units and shoplots.

Negri Sembilan Menteri Besar Datuk Seri Mohamad Hasan said the review would be restricted to a "one-time" offer and was aimed at helping housing developers survive the economic recession.

"The Real Estate and Housing Developers' Association (Rehda) had a discussion with us on this. One of the resolutions discussed was allowing them to sell housing units and shoplots reserved for bumiputeras to non-bumiputeras," he told reporters after the weekly state executive council meeting today.

However, he said it was conditional that houses and shoplots meant for non-bumiputeras must be sold off first.

The current policy requires housing developers to allocate 30 per cent of units built to be sold to bumiputeras at a discounted rate.

By Bernama

Home ownership fair expected to triple PKNS sales

The Selangor State Development Corp (PKNS) aims to triple its sales this year, by offering some 3,400 properties for sale this month and in August.

For the 12 months in 2008, PKNS sold RM220 million worth of properties.

"This year, even though the economy is slow, PKNS will be able to beat the RM500 million mark," said its deputy general manager for administration and development, Md Nasir Md Arshad.

Nasir said PKNS has achieved RM54 million sales for the first four months of the current year.

From May 8 to June 7, PKNS will run the home ownership fair themed Rumah Pilihanku@PKNS, where it will offer for sale 2,300 units of low-, medium- and high-end houses, and 60 units of commercial properties, worth RM456 million.

Nasir said 70 per cent of the properties are new launches in Shah Alam, Kota Damansara and Bangi. The rest are old stocks in Kota Puteri, Antara Gapi and Bernam Jaya, Selangor.

He added that PKNS is optimistic of achieving 65 per cent sales, or RM298 million, by the end of the campaign, and 80 per cent, by end-July.

To boost sales, PKNS is offering home buyers an attractive financial package, which includes RM500 downpayment for every property bought and zero entry cost.

Buyers will also get cash rebates of up to RM20,000, depending on the type of property and location.

Nasir said PKNS is giving away six units of apartments in Klang, worth RM280,000 in total as lucky draws and electronic and household goods.

"Our properties are 10 to 15 per cent cheaper than rivals and there is guarantee that the houses and shop offices will be completed. So we are optimistic of achieving our target for 2009," he said.

Nasir said the August launch will feature some 1,000 new houses worth RM300 million, a bulk of which, will be located in Alam Nusantra, Shah Alam.

PKNS expects to sell 80 per cent of the properties by end-December, he added.

By Business Times (by Sharen Kaur)