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Wednesday, May 20, 2009

Paramount to launch RM1b property project

PARAMOUNT Corp Bhd is to undertake a mixed property development project known as Banyan Hills in Sungai Petani, with a gross development value (GDV) of RM1 billion, said its managing director Ong Keng Siew.

"We have started earthworks on the 515-acre site which was acquired in 2007. The project will take between eight to 10 years," he told reporters after the company's annual general meeting (AGM) in Shah Alam today.

"The project, to be launched in 2010, will have 96 per cent residential and four per cent commercial properties," he added.

Ong said about 5,000 units of semi-detached homes, bungalows and low rise apartments are expected to be built at Banyan Hills.

According to Ong, another of the company's projects, the Surian Industrial Park in Kota Damansara comprising 38 units of two-storey semi-detached industrial units, is expected to be fully sold by year-end.

He said the company is expecting a GDV of RM120 million from the Surian Industrial Park, which is designed for businesses like corporate offices, showrooms, warehouses, light and clean manufacturing activities as well as small and medium enterprises (SMEs).

Paramount has also acquired a five-acre land in Section 13, Petaling Jaya, to build a high rise commercial tower and is awaiting approval from the authorites.

The company's property development segment registered a 36 per cent increase in revenue for the financial year ended December 31, 2008, to RM233.7 million, compared with RM171.9 million in the same period of 2007.

On its performance for this year, Ong said the company is expecting a marginal drop in profit and revenue due to the gloomy global economic outlook and weak consumer sentiment.

"We are, however, optimistic that affordable housing and educational needs will continue to grow and will do our best to respond to these needs," he added.

For the financial year ended December 31, 2008, the company recorded a lower pre-tax profit of RM60 million, down by 12.2 per cent compared with RM68.3 million in 2007.

However, revenue rose to RM398.8 million, an increase of 32.9 per cent from RM300.1 million in the previous year.

By Bernama

SP Setia: No plans to buy 3 PNB firms

SP Setia is instead more than happy to form a joint venture with Island & Peninsular, Pelangi and Petaling Garden to develop their landbank

SP Setia Bhd, the country's biggest property developer, said it has no plans to buy the three property companies under Permodalan Nasional Bhd (PNB).

Instead, it will collaborate with Island & Peninsular Bhd (I&P), Pelangi Bhd and Petaling Garden Bhd on land development, its president and chief executive officer Tan Sri Liew Kee Sin said.

SP Setia, in which Liew and the Employees Provident Fund hold a 12 per cent and 15 per cent stake respectively, has kept mum on its plan to acquire the three property companies until now.

"SP Setia will not take a stake or buy over the companies at this moment. We are more than happy to form a joint venture with the companies and develop their landbank," Liew told Business Times after the launch of the group's first low-cost housing scheme at its flagship Bandar Setia Alam in Shah Alam, Selangor on Monday.
SP Setia's total undeveloped land currently stands at 1,959 hectares, inclusive of 223ha in Vietnam.

Liew said the group is looking to buy more land in the Klang Valley, Johor and Penang to expand its landbank.

RHB Research Institute Sdn Bhd had last month said that SP Setia may acquire I&P, Pelangi and Petaling Garden from PNB to increase sales and gain financial backing from the government.

The three property units are reported to have a combined annual sales of more than RM1.31 billion, similar to SP Setia's 2008 figures.

PNB, which has a 32.9 per cent stake in SP Setia, is planning to merge I&P, Pelangi and Petaling Garden to create a large property group.

The research house had said SP Setia could be pulled in to spearhead the merger in view of its strong brandname and market leader position in the local property industry.

"Over the years, SP Setia has gained the admiration of customers and we have many repeat buyers. We are still moving on with business. Our sales are picking up and we are expected to achieve our RM1.1 billion sales target by October 31," Liew said.

By Business Times (by Sharen Kaur)

More pain for Asian property sector forecast

SINGAPORE: Asian property values may keep sliding this year as the global credit crisis and economic slowdown undermine investor confidence, investors and analysts said.

"It's going to be another year of pain," Stuart Labrooy, chief executive at real estate investment trust Axis-REIT in Kuala Lumpur, said yesterday at an industry conference in Singapore.

"Asia is in for a fairly lean spell," he said.

Markets such as Hong Kong, Shanghai, and Singapore have already seen large price drops since last year after years of cheap credit lured a flood of foreign money into the region's real estate, especially high-end residential and office space.

As credit conditions tightened last year and the global appetite for risk waned, speculative money fled the region's stock and property markets.

Investors who chased hot markets last year have absorbed big losses, and new buyers now shouldn't expect to make a quick profit, said Blake Olafson, head of the Asia real estate group for Bahrain-based investment firm Arcapita.

"Those who made investments last year have had significant writedowns," Olafson said. "You can't have a trading mentality, but rather a five- to seven-year view."

Markets that soared the most during the years leading up to 2008 have subsequently plunged and may not have bottomed yet, analysts said.

Singapore, for example, has seen private residential property prices fall about 20 per cent from their peak in the second quarter last year after jumping 31 per cent in 2007.

Along with the broader global downturn, each Asian market may face its own particular challenges.

In Singapore, the city-state's growing status as a regional finance and wealth management hub left it vulnerable as banks and investment firms shed workers amid the credit crisis.

Offices here that rented for US$3,000 (US$1 = RM3.54) a sq ft last year are now available for US$1,800, Olafson said.

Asian property values will probably bottom by the end of this year but may not start to rise again until the economies of US and Europe have consistent growth and boost investor confidence, Labrooy said.


Sime Darby plans 3rd hospital by 2012

The new 300-bed hospital in Desa Park City near Bukit Menjalara Kepong, Kuala Lumpur, is expected to start operations by 2012

MALAYSIA'S largest conglomerate, Sime Darby Bhd, is expected to open its third full-fledged hospital in Desa Park City near Bukit Menjalara Kepong, Kuala Lumpur, by 2012 to ride on the recession proof medical industry.

Sime Darby Healthcare chief executive officer Elaine Cheong Pek Yim said the group is in the midst of planning for the new 300-bed hospital, and a ground-breaking ceremony will be held by year-end to mark the start of construction works.

"The hospital, called Sime Darby Medical Desa Park City, will be built on a design, build and lease concept and is expected to start operations by 2012," Cheong told reporters in Selangor yesterday after forging a partnership with Medilink Network (PVT) Ltd of Bangladesh and Medilink (Beijing) TPA Services Co Ltd.

Cheong declined to reveal investment cost, but a Business Times report in 2006 estimated at the time that the cost of building the hospital, which also includes a supermarket, would be about RM350 million.
She added that the new hospital is designed by the Sime Darby group and built by Desa Park City developer, Perdana Park City Sdn Bhd, who will then hand it over to Sime Darby upon completion.

Perdana ParkCity is a member of Miri-based Samling Group.

"The hospital will offer tertiary care and it will be a growing business within the Sime Darby group in the future," said Cheong.

The Sime Darby group owns and operate the 393-bed Sime Darby Medical Centre (previously known as Subang Jaya Medical Centre) and the Sime Darby Speacialist Centre Megah in Petaling Jaya. It also owns and operate the Sime Darby Nursing Health and Sciences College managed by its healthcare arm Sime Darby Healthcare Sdn Bhd.

Sources said the hospital could even be bigger than the Sime Darby Medical Centre in Subang Jaya as it will cater to a larger affluent group at nearby densely-populated areas such as Kota Damansara, Damansara Perdana, Bandar Sri Damansara, and Mutiara Damansara.

The hospial will also be within 5km of Bandar Utama, Taman Tun Dr Ismail, Sri Hartamas, Mont' Kiara, Bukit Damansara and the upscale neighbourhood of Petaling Jaya.

Taking into account the population within the Desa Parkcity township, the population in the area has a total disposable income of some RM550 million a month.

In a previous interview, Perdana ParkCity said it was prepared to offer 2.03ha of land to operate a private hospital in the township. The Damansara Specialist Centre, operated by KPJ Healthcare Bhd, is the only other large private hospital in the area.

Sime Darby Healthcare, which has a presence in Indonesia, Vietnam, the UK and the US, is part of conglomerate Sime Darby Bhd which has businesses in over 20 countries ranging from motor, industrial, property and plantations.

Analysts said the new hospital is part of Sime Darby's long-term plan to grow its healthcare business which, together with general trading and other business, account for about 10 per cent of revenue compared with plantations (8.2 per cent), property (3.6 per cent), heavy equipment (33.3 per cent), motor vehicles (34.1 per cent) and energy and utilities (9.6 per cent).

By Business Times (by Zaidi Isham Ismail)

US housing starts, permits hit record lows in April

WASHINGTON: New US housing starts and permits unexpectedly fell to record lows in April, a government report showed yesterday, denting hopes that stability in the housing market was imminent.

The Commerce Department said housing starts fell 12.8% to a seasonally adjusted annual rate of 458,000 units, the lowest on records dating back to January 1959, from March’s upwardly revised 525,000 units.

“It obviously calls into question the notion that the housing market is stabilising,” said Brian Dolan, chief currency strategist at in Bedminster, New Jersey.

Compared to the same period last year, housing starts tumbled 54.2%. Analysts polled by Reuters had expected an annual rate of 520,000 units for April.

US stock index futures pared gains after the data. Government bond prices extended losses despite the weak report.

New building permits, which give a sense of future home construction, dropped 3.3% to 494,000 units, the lowest since records started in January 1960, from 511,000 units in March. — Reuters

That was well below analysts’ forecasts of 530,000 units. Compared to the same period a year-ago, building permits plunged 50.2%.

Meanwhile, aggressive cost-cutting helped Home Depot Inc, the word’s largest home improvement chain, to report yesterday a bigger-than-expected profit in the latest quarter despite the deep US housing slump.

By Reuters

Accor Group eyes Malaysia for Ibis Hotel

French multinational corporation, Accor Group is eyeing Malaysia for its economy hotel chain, Ibis Hotel, given the rising interest in the country as a top tourist destination in the region.

Ibis is Accor's economy hotel brand, which has expanded rapidly around the world and become the European market leader in the economy hotel industry and one of the five largest worldwide operators.

Currently, it has 800 hotels in 40 countries.

"Malaysia offers nature, cultural experience and great shopping which makes it a key destination for all the hoteliers, making sure they have presence not just inbound and outbound but being there," said Hiro Inoue, the director of marketing for Ibis Singapore on Bencoolen.

Besides being strategically located in the region, he said the country has become an attraction for tourists particularly from South Korea and Japan due to lower currency exchanges rates.

Beside Malaysia, Ibis has yet to have any presence in these countries in the Southeast Asia region namely Brunei, Laos, Cambodia, Myanmar and the Philippines.

"We actually have had regular meetings with potential parties in Malaysia and have not gone to a point where we could announce where, how and when," he said in an interview recently.

However, Inoue said focus would likely be in areas where growing businesses are, such as Kuala Lumpur, Johor Bahru, Kota Kinabalu and Kuching.

When asked what kind of partnership the group was looking at for the venture, he said there were various levels of business interest which could be achieved between the parties.

"We currently have a number of opportunities. I just can't discuss it yet," he said.

Inoue said some Ibis hotels are fully owned by Accor. particularly in strategic locations, some are through joint venture while others are managed hotels.

Under Ibis's worldwide expansion plan, it expects to have 1,100 hotels by next year in more than 70 countries across all five continents.

According to the plan, the Asia Pacific region, where 40 per cent of these new establishments will be opened, will be the main growth market for Ibis.

Late February this year, Accor opened its first hotel in Singapore, Ibis on Bencoolen, which is a joint venture between Accor and La Salle Investment Group.

The hotel which is also the largest Ibis hotel outside Europe, is 30 per cent owned by Accor while La Salle, which is also the developer, owns 70 per cent.

By Bernama