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Monday, June 1, 2009

MRCB determined to go 'green' on buildings

An artist's impression of the 348 Sentral project. It will be the company's first that complies with the LEEDS Gold Standard.

ALL future buildings by Malaysian Resources Corp Bhd (MRCB) are likely to be environmentally friendly, its chief, who is determined to go "green", said.

"Most of the buildings that we're building now are very technologically advanced, and now, the other big thing that we're pushing for is the adoption of the environment standards," group managing director Shahril Ridza Ridzuan said.

He said it was becoming increasingly clear that potential tenants, especially multinationals and big corporates, were becoming more concerned about environmental issues.

"As a developer, we have to respond to the marketplace. It makes a lot of sense for us to move on this path ... it's another selling point for our buildings," he told Business Times.

He said it was a natural step for MRCB, as it is also involved in business like cleaning up rivers and coasts in Malaysia. It is one of the biggest companies to do such clean-up jobs here.

Its 348 Sentral project at Kuala Lumpur Sentral, which comprises an office tower and serviced residence, will be its first that complies with the LEEDS Gold Standard, a green rating system in the US.

But now that Malaysia has its own green rating system for buildings, known as the Green Building Index (GBI), MRCB will also work at having its buildings, old and new, certified by the local standards.

Shahril noted that other developers, especially high-end ones, are also moving into this direction.

It makes sense, he said, adding however that for commercial reasons, this can't be applied to every single project.

"It has to be driven by the market as well," he remarked.

By Business Times (by Adeline Paul Raj)

MRCB looks to property boost

Malaysian Resources Corp Bhd (MRCB), a builder and one of the country's biggest providers of office space, says its property development business will likely account for half of the group's revenue next year owing to a recent pick-up in projects.

At present, the group derives the bulk of its revenue from construction activities.

"We have nearly five million sq ft of space under development right now in terms of offices, retail and serviced apartments," group managing director Shahril Ridza Ridzuan told Business Times in an interview.

By year-end, the group would have launched at least four big commercial developments at a cost of over RM3 billion at Kuala Lumpur Sentral, the country's biggest transport hub.

Shahril said the group expects to return to profitability this year and chalk up higher revenues as building material prices have fallen significantly, allowing it enjoy better profit margins.

About 35 per cent of its revenue this year will likely come from the property business, with the rest contributed by construction, he said.

"But next year, the property recognition will probably be equal to the construction recognition. So, we'll go back to the same balance that we used to see before," he said.

The group, which registered a net loss of RM57 million last year, will probably make a net profit of RM6 million this year, OSK Research said in a report last week.

Shahril said shareholders can expect dividends this year. The company generally tends to pay out at least 20-30 per cent of its net profit.

The projects at Kuala Lumpur Sentral, some of which were delayed from late last year, are expected to reflect in its books from 2010 to 2012.

"Last year was a year when we did a lot of provisioning. But this year, I think we've turned a corner, and so, from 2010 to 2012, we'll start to see a lot of growth again in terms of revenue and profits," he remarked.

It has already started construction work on 348 Sentral, a RM1 billion office tower and serviced residence; "Lot G", a more than RM1 billion development comprising a new mall, hotel and two office towers; and the new headquarters of banking group CIMB.

It will also begin work on a RM500 million low-density campus-style development once it has managed to secure enough potential investors and tenants.

MRCB, the master developer of Kuala Lumpur Sentral, is likely to see its order book expand to about RM5 billion by the year-end from about 4 billion now, Shahril said.

Meanwhile, the group is looking to develop something similar to Kuala Lumpur Sentral, but on a smaller scale, in Vietnam.

Discussions are under way with potential partners there. "We're looking at urban integrated development," Shahril said.

Half of at least 12 analysts who track MRCB have a "buy" recommendation on the stock, according to Bloomberg data. Their target prices range from as low as 60 sen to as high as RM1.70.

MRCB last closed at RM1.32.

By Business Times (by Adeline Paul Raj)

Tan & Tan: Niche marts will still attract buyers

Property developer Tan & Tan Development Bhd says demand for residential properties, particularly in niche markets, remains strong.

It plans to launch projects targeting demographics such as those with young families and the elderly.

"There is still ample money out there. If the product and price are right, people will still buy," its chief executive officer Tan Boon Lee told Business Times.

He cited the recent successful sale of all 49 units of residences at Laman Sierramas West, developed by Kumpulan Sierramas (M) Sdn Bhd.

The sales campaign was to have run from May 7 to yesterday, but all the units were taken up during the first weekend.

Tan & Tan, joint developer with KL-Kepong Property Holdings Sdn Bhd, managed to sell the property for RM37 million.

Priced at between RM560,000 and RM800,000 each, Tan said the completed project enabled people to view the units and make an immediate decision on purchase.

He said that it was looking next at developing another 40 gated, guarded community bungalows catering for those with younger families. The bungalows, to be developed with KL-Kepong, will have space of 3,000 sq ft to 3,500 sq ft.

"We are niche developers, but we are not looking at super-high-end projects. We are targeting specific groups," Tan said.

In the fourth quarter of the year, Tan & Tan plans to launch 50 to 60 condominium units catering for the elderly in Jalan Ampang Hilir, Kuala Lumpur.

"It will be elderly-friendly, with facilities like grab bars/railings, ramps, non-slip flooring in the bathrooms," Tan said, adding that it has looked into the little details.

Tan & Tan has had experience with hospital developments when it owned the Gleneagles Medical Centre in Kuala Lumpur.

No pricing has been set for the project as yet.

By Business Times (by Vasantha Ganesan)

Strong foreign demand for Australian properties

KUALA LUMPUR: Buying interest in Australian properties by Malaysian as well as other foreign investors has been on the rise the past six months and this trend is expected to continue for some time, say real estate agents and developers.

Jalin Realty International Pte Ltd, a real estate agent that specialises in properties abroad, expects a stronger demand for Australian properties this year.

Ian Chen

Chief executive officer Ian Chen said the company was seeing encouraging response for properties Down Under this year, especially from Malaysian investors.

“We are definitely getting a lot of enquiries,” he told StarBiz in an interview before the launch of the Artists apartments promotions here recently.

The Artists apartments, located in Fitzroy, Melbourne, have a gross development value of about A$100mil and is expected to be built by late 2010.

Only 30%, or 50, of the total 173 units are now available and priced from A$600,000 at about A$700 per sq ft. The average size of the two-bedroom apartment is about 860 sq ft.

Chen said because of the good response by Malaysian investors in its previous launch of the Milano Service apartments on Franklin Street, also in Melbourne, last year, the company decided to continue with the promotion of Australian properties here.

He said there were several reasons for the higher uptake in Australian properties.

“Clearly the weaker Aussie dollar against the ringgit is the main factor, which makes Australian residential properties very attractive, especially in this current economic environment when property prices are depressed due to the downturn,” he said.

Chen said there was potentially a 25% upside to the properties in Australia over time and generally properties there had a compounded growth rate of 8% to 10% per annum, depending on the states.

An Australian real estate agent from LJ Hooker said there was stronger buying interest in Australian properties this year.

“The bulk of the foreigners buying Australian properties is from Britain. There is also an increase in interest and purchase of properties from Asian investors, including Malaysians, compared with previous years,” he said, but declined to give numbers.

A spokesman from another Australian property agent said Victoria appeared to attract more foreigners than other states, possibly because of its incentives.

He said that besides federal funding to prop up the property market in Victoria, property buyers in the state would pay a lower stamp if they could choose to buy the land first and pay the full amount when the building was constructed.

On property investors, he said there were mainly four classes – those that buy to invest for capital gain, those that migrate, those that buy for their children to live in and affluent people attracted to a lifestyle of having homes in different countries.

Australian property developer PDG Corp sales manager Charles Vraca said the company was very bullish about properties in Australia, especially Melbourne, going forward.

“Purpose-built properties in choice locations in the inner city with a strong theme should sell well,” he said, adding that developers needed to understand the buying power and needs of the community first before starting construction.

PDG was the developer for the Milano Service and Artists apartments which were 70% sold before their construction.

Vraca said another reason locals and foreigners were attracted to Australian properties was the ease of getting loans to purchase residential homes.

“Generally they can get 70% to 80% financing for their property purchase,” he said.

A local property analyst, who declined to be named, said the Australian government was very supportive of the property market by coming out with a slew of incentives to stem the loss of confidence due to the global economic meltdown.

The Australian government made several interest rates cuts to lower the cost of mortgages for property, pumped in A$10.4bil to prop up the property sector and gave first-home buyers A$21,000 initially to buy their homes and has now extended the programme to June next year.

“There is also a good chance that the amount of assistance for first-home buyers could be significantly increased further,” the analst said.

Moreover, in another positive development, Australian Prime Minister Kevin Rudd recently announced a whopping A$42bil allocation (in stages) to extend the broadband network reach across the country, which will help support the property sector’s growth.

“All these positive moves done by private sector initiatives in tandem with government funding and support help tremendously to strengthen foreign investors’ confidence in the value of Australian properties,” said the analyst.

By The Star (by Danny Yap)