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Monday, May 25, 2009

MK Land drafts 5-year roadmap to boost profits

PROPERTY developer MK Land Holdings Bhd has drafted a five-year roadmap, which will focus on developing two core products within its ongoing Damansara Perdana township in Selangor in a bid to enhance profitability.

They are the Armanee Terrace condominium project and Rafflesia, featuring 460 units of three-storey semi-detached bungalows, which collectively will generate a gross development value of RM3.5 billion over the next 10 years.

"MK Land has the ingredients to grow in terms of landbank, products and people. By creating the roadmap, we will be able to position the company going forward," chief operating officer (COO) for group strategy and planning, Balasundram R, said.

"We need to identify the strength of MK Land and how to make it profitable in the longer term," he told Business Times in an interview.
MK Land had posted losses in the financial year ended June 2007/2008 for the first time since its inception more than 10 years ago due to additional cost incurred to complete projects.

The higher costs was a result of errant contractors being terminated, which happened after its major shareholder Tan Sri Mustapha Kamal Abu Bakar stepped down as executive chairman in April 2007 to focus on his private companies.

Mustapha later returned to helm MK Land in June 2008 in the hope of turning the company around by outlining a three-year plan to rejuvenate it.

The plan included identifying Balasundram, Fatimah Wahab, Lau Shu Chuan and Yusof Abu Othman as COOs to handle specific tasks in MK Land such as strategic planning, finance and projects in the central and northern regions.

The four were roped in from within MK Land, Mustapha's Emkay Group and its 75 per cent unit, Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Since then, MK Land has been able to make profits via cost-efficiency and improving product sales.

The company made a net profit of RM10.1 million in the six months ended December 31 2008, against a net loss of RM18.3 million in the same period of 2007 while revenue doubled to RM125 million.

MK Land is optimistic to repeat its performance in the second half of its financial year, with revenue surpassing RM350 million, boosted by land and property sales.

Balasundram added that there was a challenge that Mustapha had placed on the four but they are on target now to achieve the plan mapped out.

"Our initial stage was to build cash flow and sell existing property stocks. As completed products are now tapering down, we are moving to the next step which is to focus on new launches in our road to profitability," he said.

The company will also continue with its existing developments in Cyberjaya, Damansara Damai and Ipoh, Balasundram said.

By Business Times (by Sharen Kaur)

Bina Puri takes aim at Mideast region

BINA Puri Holdings Bhd, a construction group in which tycoon Tan Sri Syed Mokhtar Al-Bukhary holds a minority stake, is increasingly looking towards the Middle East to replenish its order book amid the global slowdown.

Already, it has bid for some RM2.5 billion worth of jobs including the construction of high-rise residential and office towers there.

Founder and group managing director Tan Sri Tee Hock Seng said the group is looking to replenish its order book and believes that the Middle East in particular the United Arab Emirates (UAE) will provide the support.

Its order book stands at nearly RM3 billion, which will keep it busy for the five years.
"We are bidding for jobs, especially in Abu Dhabi, to build medium- to high-end residential towers. Abu Dhabi is where the money is," Tee told Business Times in an interview.

Its biggest achievement in the Middle East has been in Abu Dhabi, where the group, as part of a larger consortium, won a RM444 million contract from the Tamouh Group to build two 45-storey residential towers.

The contract was awarded in 2007 and the consortium is expected to finish building the towers by December this year.

Tee also said Bina Puri is focused on growth this year to ride out the current slump.

"Business has to go on so the group could be the top runner when the economic recovers. It is all not that bad or gloomy. There are still plenty of jobs in Malaysia and overseas, but you need the right people to look for them," Tee said.

For the first four months of 2009, Bina Puri has managed to secure close to RM1 billion worth of projects in Brunei and Malaysia.

These projects include some RM300 million worth of government projects in Sabah to build houses and offices, and the construction of Universiti Malaysia Kelantan.

In Brunei, it was given a contract in February by the Brunei Economic Development Board to build 2,000 houses for RM693 million.

Tee said Bina Puri is looking for more residential and infrastructure projects in Brunei.

He said the group is also sourcing for new opportunities in Thailand, although it has RM1.7 billion worth of contracts in hand to build houses over the next three years.

The construction group's net profit fell by 38.6 per cent to RM4.3 million in the year-ended December 2008, although revenue was up by 11.4 per cent to RM677.3 million, attributed by higher building material costs and losses incurred by an associate company.

By Business Times (by Sharen Kaur)

Damansara Perdana to see new wave of development

MK LAND Holdings Bhd is planning a new wave of development at its integrated Damansara Perdana township in Selangor and this includes the launch of more than RM5 billion worth of properties over the next decade.

While the company is targeting purpose-built buildings to enhance its margins, its focus for the next 10 years will be to develop Armanee Terrace Condominium and Rafflesia for RM3.5 billion, its chief operating officer for central region, Fatimah Wahab, said.

Launches at Damansara Perdana have been slow since 2007, as MK Land was consolidating its position to focus on other key aspects of its operations.

Since July 2008, a repositioning was carried out with the view to bring the company to a better strategic and financial position to meet the challenges ahead.
The township, which is 44 per cent developed, has accumulated sales in excess of RM2 billion since its launch in 1996.

Fatimah told Business Times that she is optimistic that the luxurious Armanee Terrace and Rafflesia projects, which are supported by a high-end integrated security system and surrounded by greenery, will be the main driving force for growth at Damansara Perdana.

The township has received encouraging response from home owners and investors due to its offerings and location, being in the prime area of the Damansara Perdana enclave amid a primary forest - best of the best location in Damansara Perdana, Fatimah said.

The Balinese-inspired Armanee Terrace features homes with sky gardens and broadband-ready features. It is the first high-rise development in Damansara Perdana with a garden in every unit.

Rafflesia is MK Land's first landed residential property at the township.

"We did a market survey on what people want and upon conclusion, learnt that they are looking for properties like Armanee Terrace and Rafflesia which has, among others, high returns on investment," Fatimah said.

She added that properties in Damansara Perdana would usually appreciate by 25-30 per cent upon completion, making them appealing to buyers.

Armanee Terrace will feature several condominiums in a horseshoe offering various designs of exclusive units.

The first block has been constructed and handed over to buyers in 2007, while the second block, comprising 518 units, is under construction and being offered for sale.

Fatimah said the last two or three blocks may end up as boutique developments or duplexes where it will offer less units but with bigger built-ups.

On Rafflesia, MK Land will offer a total of 460 units of triple-storey semi-detached modern homes.

It launched the first batch of 56 houses, priced from RM1.4 million each in 2007 with 60 per cent sold.

Fatimah said the company will launch 60 new units in July, each priced from RM1.8 million.

By Business Times

What the licence operators have to say

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director, Chung believes the MM2H programme has been growing from strength to strength over the years.

She said that with the recent policy liberalisation, the Government was taking the right measures to ensure a smoother delivery system so that Malaysia could attract more foreigners to retire or stay here.

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director says ... It is a win-win situation for everyone to aggressively promote the programme as it will benefit all sectors of the economy.

“With these new and positive changes, we are encouraged by the authorities’ efforts to support the MM2H programme,” Chung said.

She added that the tangible benefits were obvious, as the foreigners under the programme were likely to spend about 10 times more that the average Malaysian.

She said it was a win-win situation for everyone to aggressively promote the programme as it would benefit all sectors of the economy.

These include the Government, industry players such as licence operators, property market, travel and tour sector, as well as services-related industries such as hotels and restaurants.

The move will also benefit the MM2H participants, who will be able to enjoy a quality lifestyle in Malaysia and, at the same time, “stretch their dollar” to last longer.

Borneo Vision (MM2H) Sdn Bhd managing director Andy Davison said, conceptually, MM2H was an excellent programme with massive potential for Malaysia to rake in huge earnings to strengthen its economy.

Davison said Malaysia had a lot to offer to the developed world in terms of lifestyle.

“There’s a lot going on for this country ... the tropical weather, high standard of living, good healthcare and infrastructure, all at an affordable price,” he said, adding that MM2H was the perfect vehicle to market Malaysia to the world.

“I’m pleased with the Government’s new and relaxed ruling on MM2H but I do believe there is a need to separate foreigners who are here to retire (with a different status) from those who want to work here, especially high net-worth individuals.

“I believe they are a totally different group of individuals with different intent and if MM2H is bundled together into one category, it confuses everyone, including us (licence operators) and the programme could be prone to abuse,” he said.

Another MM2H licence operator, who declined to be identified, said MM2H was probably one of the best such programmes ever rolled out.

However, he said, there was a need by the authorities to have consistent and well-thought-over policies that did not contradict one another.

“There is a need to resolve issues quicker, including processing time, especially with wives and siblings.

“There is also a need to ensure all licence operators are adequately trained to service foreigners with the correct information and that their services are not sub-standard so as not to tarnish the MM2H image, which affects other license operators,” he said.

He also said the full potential of the programme had not been achieved, despite it being around for some time, because of poor marketing.

“Let’s not waste time in showing what Malaysia can truly offer to the foreigners,” he noted.

By The Star

Relaxed rules set to boost Malaysia My Second Home scheme

PETALING JAYA: The Government’s move in February to further liberalise the Malaysia My Second Home (MM2H) programme has been well received by foreigners and industry players, especially MM2H licence operators.

Currently, there are about 200 such operators nationwide.

Several amendments to the MM2H criteria were made by the authorities, including the lowering of entry age (below 50) as well as employment opportunities for foreigners in selective industries.

MM2H Agent Association president Kirby Lim said the programme had undergone significant improvement every year since it took over from the Silver Hair scheme, which began in 2002.

“It shows that the Government, particularly the Tourism Ministry, is fully aware of the importance of MM2H as a key driver to economic growth, bringing in billions of ringgit, which is why it (MM2H) has been promoted heavily as a national agenda,” he told StarBiz.

Kirby Lim ... Despite not being well marketed in its early years, MM2H has been fairly successful

Lim said while there might be some “hiccups” along the way, generally, most players or those who benefited from the programme were satisfied with the progress made.

“Of course, more can be done and there will always be issues that need to be ironed out, but we are making good progress and the association is in close contact with top officials from the Government, especially the Tourism Ministry,” he said.

Lim said the association would convey the concerns of the licence operators and MM2H participants to the relevant authorities.

It would also keep them abreast on the effectiveness of the policies in attracting foreigners under MM2H, and the changes needed to improve the logistics and marketing and promotions undertaken currently.

On the success of the MM2H so far, Lim said despite not being well marketed in its early years, the programme had been fairly successful.

“However, the Government has recently been very aggressive in promoting it and under the stewardship of Tourism Minister Datuk Seri Ng Yen Yen, we believe the programme will gain significant momentum,” he said.

Currently, there are about 12,000 MM2H participants from countries such as China, South Korea, Britain, Bangladesh and certain parts of Europe and the Middle East.

Lim said the Tourism Ministry had recently embarked on a blitz to promote Malaysia, particularly in China and Japan, as a favoured destination to visit as well as to stay and retire (under the MM2H).

“We understand the Tourism Ministry is now looking to promote MM2H in other countries like Canada through exhibitions and other promotional activities,” he said.

Currently, Ng is in Britain to woo more tourists to Malaysian shores. She is targeting at least 10,000 Britons under MM2H. So far, 1,551 Britons have signed up for the programme.

On Malaysia’s advantage in attracting foreigners compared with other countries in the region, Lim said: “We are not trying to be arrogant but Malaysia offers foreigners quite a high standard of living at a relatively low cost, coupled with good infrastructure and a politically stable environment where English is widely spoken.”

Lim said foreigners also had the opportunity to own properties and would not be subjected to real estate property gains tax should they sell their assets.

“Moreover, the Malaysian hospitality is second to none as many foreigners have remarked that the locals are extremely warm and friendly,” he noted.

Lim is optimistic that the number of MM2H applicants will be higher this year.

“This is following the liberalisation of the entry level as well as the strong promotions made by the Tourism Ministry, Immigration and Home Affairs Ministry and other government departments,” he said.

By The Star (by Danny Yap)

Indian developer plans US$600m share sale

MUMBAI: India’s Housing Development & Infrastructrure Ltd (HDIL) said late last Saturday its board had approved selling shares for up to US$600 million (US$1 = RM3.50) to institutional investors.

HDIL, the latest firm to look at an equity sale after a strong stock market rally, said in a stock exchange statement it would seek shareholders approval for the share sale and a share warrants issue to founders on June 17.

India’s benchmark index has risen nearly three-fourths from its lows in March prompting firms to look at share sales.

By Reuters