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Wednesday, July 1, 2009

KLCC Property expects stable revenue

KUALA LUMPUR: KLCC Property Holdings Bhd expects a stable stream of revenue from its property investment and retail divisions to offset the decline in its hotels business for the financial year ending March 31, 10 (FY10).

Hashim Wahir speaking to reporters after the company's AGM on Tuesday.

Chief executive officer Hashim Wahir said the group remained positive on the outlook of the commercial properties it owned due to the long term lease and quality leasees it had.

“We have good tenant mix with good credit standing for our investment properties within the KLCC integrated development and we believe KLCC is still a premier address to have in Malaysia,” he said after the company AGM yesterday.

With high traffic volume in the KLCC precinct, the group foresaw sustainable performance for its retail business as some new brands had shown interest to come to Suria KLCC shopping mall, he said.

In contrast, the group’s hotel operations has seen some considerable pressure following the downward trend in the average occupancy in hotels due to the declining number of tourists.

“We will ensure that the service provided by our hotels matches the luxury position of the hotel. We will make certain that our customers are satisfied with the services and facilities provided by our hotels,” Hashim said.

The group would also regularly review its operating costs to contain costs and maintain profitability.

Hashim said the group would decide on revising its room rates upwards or downwards based on supply and demand.

On growing its assets portfolio, he said: “We are currently on track to complete our RM1.1bil Lot C office towers development, which we target to be fully operational by 2011.”

Located beside the Petronas Twin Towers, Lot C would offer 84,000 sq ft office space for lease.

The group is also looking to develop 1.5 acres next to Lot C and the Mandarin Oriental into a mixed development project.

“We believe that there is still strong demand for grade A offices,” said Hashim.

“We target to double the commercial space that we’ve developed for lease within the KLCC vicinity to 24 million sq ft in the next five to 10 years time from 12 million sq ft now.”

On the redeemable convertible unsecured loan stocks (RCULS) of RM714.1mil, Hashim said the board was in constant dialogue with its shareholders on the conversion date of the RCULS but nothing was confirmed yet.

For FY09, the group registered a net profit of RM535.65mil on revenue of RM861.22mil.

Its investment properties i contributed 45% and 30% respectively to the group’s revenue, while its hotel operations contributed 19%.

The remaining 6% was derived from its management services division.

By The Star

KLCC Property expects office rental income to boost profit

KLCC Property Holdings Bhd expects gains from office rental space to boost its profit this year, particularly the renewal of three-year leases at the Petronas Twin Towers and Menara ExxonMobil in Kuala Lumpur.

"The group's office properties are expected to remain stable as the majority of our leases are long term and we have a good tenant mix with sound credit standing. In addition, KLCC is a premier address," chief executive officer Hashim Wahir told a media briefing after the group's annual general meeting in Kuala Lumpur yesterday.

KLCC Property's revenue grew 2 per cent to RM861 million for the year ended March 31 2009, from RM843 million a year ago, driven mainly by higher occupancy levels and rentals of office and retail properties.

"On the retail side, we expect performance to remain sustainable, benefiting from the high traffic volume in the KLCC precinct and a good tenant mix. There is also interest from new brands wanting to come to Suria KLCC. Our focus is on innovation to sustain performance," Hashim said.
Leasing of office space contributed 45 per cent to overall revenue in 2009, followed by retail (30 per cent), hotel operations (19 per cent ) and management services (6 per cent). Hashim said the group remains positive about its investment properties under the KLCC integrated development.

The latest addition is Lot C, where a 59-storey development will house 840,000 net lettable sq ft of Prime A office space and just over 140,000 net lettable sq ft. The project schedule expects Lot C to be delivered in October 2011 with retail operations in the podium operational a year earlier than expected.

"Within the KLCC area, we have developed 12 million sq ft of commercial space for leases. I believe there is a capacity to double that in the next five to 10 years," he added.

Meanwhile, hotel operations of Mandarin Oriental Kuala Lumpur will continue to face pressure in line with the downward trend of occupancy in the Klang Valley in the current environment of slower tourist arrivals.

The board is recommending a 5.5 per cent per share dividend for the year ended March 31 2009.

By Business Times (by Rupa Damodaran)

SP Setia mulls RM5b property project

SP Setia Bhd, Malaysia’s biggest property developer, is considering starting a RM5 billion office and residential project in Kuala Lumpur in 2010, chief executive officer Tan Sri Liew Kee Sin said in an interview today.

The project, on a plot next to the Mid Valley shopping mall, would be a joint venture with Kuala Lumpur City Hall, he said.

He also said SP Setia Bhd will report lower earnings this fiscal year because of poorer profit margins.

Earnings may improve next fiscal year, when the company will be “more aggressive,” he said.

In a statement today, SP Setia said total sales for the year ending October 2009 reached RM1.04 billion (US$295 milion) as of June 30.

The property market is showing “positive signs,” the company said.

By Bloomberg

S P Setia records RM1.9b unbilled sales

KUALA LUMPUR : S P Setia Bhd’s on-going home loan package scheme has been instrumental in enabling the property developer to record RM1.9 billion in unbilled property sales.

Its president and CEO Tan Sri Liew Kee Sin said on July 1 more than half of the RM1.9 billion or RM1 billion in sales were from S P Setia’s Setia 5/95 Home Loan Package.

The developer's unbilled sales, or value of properties sold which has yet to be recognised in the company's books, could sustain it for the next 18 months.

"Much of the sales numbers can be attributed to the Setia 5/95 Home Loan Package. If the sale and purchase agreement is not signed, it is not a sale to us," Liew Kee Sin told reporters at Invest Malaysia.

By The EDGE Malaysia (by Chong Jin Hun)

UEM Land positive of securing partners for Puteri Harbour devt

KUALA LUMPUR: UEM Land Bhd is optimistic of securing partners for its Puteri Harbour development in Nusajaya, Johor by year end after Dubai’s Damac Properties pulled out of RM396.4 million land deal.

UEM Land managing director and chief executive officer Wan Abdullah Wan Ibrahim said on July 1 the company was in “talks with four to five potential partners including locals and from Australia and Singapore” for the project.

Dubai’s Damac Properties had in June pulled out of a deal to acquire 43.54 acres of land in Nusajaya for RM396.4 million from UEM Land after a disagreement over a second extension for the approval period.

By The EDGE Malaysia (by Cindy Yeap)

YTL: KL-S'pore bullet train project economically viable

DIVERSIFIED group YTL Corp Bhd said it still believes the high-speed bullet train linking Kuala Lumpur to neighbouring Singapore is an economically viable project and hopes the government will reconsider its implementation.

Its managing director Tan Sri Francis Yeoh said the project is important to further build and strengthen the country's economy. It can also help attract foreign investors to the country.

"We hope the government will continue with the high-speed bullet train project for the sake of the country and the economy," he told a media briefing on the sidelines of Invest Malaysia 2009 in Kuala Lumpur yesterday.

"Indeed, we don't mind if we are not involved in the project as long as the government or other companies are interested in realising the project," he added.
The plan for a high-speed train between the two cities, spanning about 300km, was proposed in the late 1990s.

The project was shelved in 2008 by the government due to the high cost of building it. This was based on the financial model that was submitted by YTL.

The proposed RM8 billion bullet train project is said to be able to cut travelling time between Kuala Lumpur and Singapore to 90 minutes compared with existing trains which takes about seven hours.

Yeoh said he is optimistic that the present government would reconsider the project's implementation and put it on the urgent list.

"China, Japan, the UK, Europe and Taiwan are among the places that have successfully implemented a high-speed train system. Malaysia should have it too in efforts to become a developed country," he said.

By Business Times (by Azlan Abu Bakar)