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Thursday, August 13, 2009

Mah Sing sells building en bloc to Felda co-op for RM226m

Property developer Mah Sing Group Bhd has made its second en bloc sale, this time of an eight-storey building with retail and office space, to Koperasi Permodalan Felda Bhd for RM226 million, helping the developer exceed its full-year sales target.

Mah Sing is selling the Corporate block under its Southgate development in Kuala Lumpur under a sale and purchase agreement signed yesterday.

While the Corporate block had garnered interest from several institutional investors, Mah Sing sweetened the deal for shareholder Koperasi Permodalan Felda to purchase the building by offering its 5/95 programme to the latter.

Five per cent of the sale consideration is paid upon the execution of the sale and purchase agreement while the balance is paid after each stage is completed.
"We have offered the programme as we are confident of the buyer's financial health," Mah Sing executive director of corporate and investment Ng Poh Seng said when contacted yesterday.

In an announcement to Bursa Malaysia, Koperasi Permodalan Felda said it will lease back the building to Mah Sing for two years based on an annual guaranteed rental of 8 per cent of the building sale price.

According to the group's 2008 annual report, Koperasi Permodalan Felda had a 8.47 per cent stake in Mah Sing as at April 29.

Mah Sing's first en bloc sale to Koperasi Permodalan Felda was in July 2007 when it sold The Icon Jalan Tun Razak (West Wing) for RM174.4 million.

Meanwhile, Ng said Mah Sing is still talking to several parties for the sale of its remaining Southgate office and retail block, APEX.

The Southgate development comprises of five buildings in total, of which three blocks (Vox, Vivo and Vertex) opened for investment on a strata basis yielded sales of RM163 million.

Yesterday's deal saw the developer record total sales of RM543 million for the first seven-and-a- half months of the year, more than its initial full-year target of RM453 million.

Its unbilled sales were RM800 million for the same duration, and Ng expects the sales to be realised within the next two to three years.

At a media briefing held in Kuala Lumpur yesterday, Mah Sing said it is acquiring 46.7ha of freehold land in Cyberjaya for RM130.5 million.

"The land will be a medium to high-end residential development, named Garden Residences, with an estimated gross development value (GDV) of RM690 million," said Mah Sing group managing director-cum-group chief executive Tan Sri Leong Hoy Kum.

The Garden Residences will be developed in two phases. Phase One, due to be launched early 2010 with a GDV of RM250 million, will have 267 superlink and 124 semi-detached units. Phase Two, with a GDV of RM440, will have 284 semi detached units and 70 villas.

"We are targeting to complete the development within three years and we should be able to book in about 30 per cent (of Phase One GDV) by the end of 2010," said Leong.

He added that Mah Sing was bullish about the property market and expects a recovery by the middle of next year.

The group has a total of 17 projects with remaining GDV and unbilled sales of RM4.4 billion located in the Klang Valley, Penang and Johor Baru.

On its ongoing talks with stakeholder Permodalan Nasional Bhd, Leong said that both parties are still discussing on future commercial ventures.

By Business Times (by Jeeva Arulampalam)

Mah Sing upbeat on Cyberjaya land

From left: Tan Sri Leong Hoy Kum, Mah Sing chairman Tan Sri Yaacob Mat Zain and Setia Haruman Sdn Bhd COO Lao Chok Keang after the signing

KUALA LUMPUR: Mah Sing Group Bhd’s purchase of 46.1ha freehold land in Cyberjaya for RM130.5mil cash will spearhead its expansion into the southern growth corridor.

According to Mah Sing group managing director cum group chief executive Tan Sri Leong Hoy Kum, the land will be developed into a medium to high-end gated and guarded residential – Garden Residence – comprising superlink homes, semi-detached homes and bungalows, with an estimated gross development value (GDV) of RM690mil.

The company told Bursa Malaysia it intended to fund the acquisition and the development cost of the land through internally generated funds and/or bank borrowings.

The company requested a whole day suspension for its share trading yesterday, pending this material announcement.

To be launched early next year, the Garden Residence will take three years to complete. It will also contribute to group earnings from the financial year ending Dec 31, 2010 (FY10).

At a press briefing yesterday, Leong said the Garden Residence would be developed in two phases. The first phase would be launched early next year, followed by the second phase, depending on the market response.

He said the mini-township project included a clubhouse and various facilities and amenities.

The first phase comprises 267 units superlink homes and 124 units semi-detached homes, amounting to about RM207mil to RM276mil or 30% to 40% of the total GDV of RM690mil.

The second phase comprises 284 units semi-detached homes and 70 bungalow units. “The project should start contributing to our earnings next year,” he said.

Leong said sentiment had improved and an upcycle in the property market was likely in the second half of 2010.

Mah Sing would consider purchasing additional commercial land in future as it intended to expand the township and plan for commercial components, should the need arise, he said.

Yesterday, Mah Sing through its subsidiary Myvilla Development Sdn Bhd, signed a sale and purchase agreement (SPA) yesterday with Cyberview Sdn Bhd (as a proprietor) and Setia Haruman Sdn Bhd (vendor) in Kuala Lumpur.

Leong said currently, residential properties in Cyberjaya comprised mainly medium range apartments and bungalow lots.

He believes there is a pent-up demand for gated and guarded landed properties with good concepts and themes that boost value.

Mah Sing’s expansion strategy is to acquire choice land bank in multiple prime locations in Klang Valley, Kuala Lumpur, Penang and Johor Baru for its Commercial, Legenda, Residence and Perdana series which targets different segments of the medium to high-end property market.

With the Garden Residence, Mah Sing now has 17 projects located in high growth regions and property hot spots, comprising 12 projects in the Klang Valley, the Central Region, four projects in Johor, (the southern region) and one project in Penang (northern region).

All developments have a remaining total GDV and unbilled sales of about RM4.4bil.

“We plan to continue the acquisition trail for large landbanks for potential mass housing projects in Malaysia, and explore overseas opportunities in China and Vietnam, which has high population growth,” Leong said.

Among its new launches in the Klang Valley for the third and fourth quarters this year are the StarParc Point commercial project, Kemuning Residence Shah Alam, Hijauan Residence, One Lagenda bungalows development and Aman Perdana residential.

For Penang and Johor, projects to be launched this year are Penang Island Residence@Southbay, Johor Baru Sri Pulai Perdana 2 and Johor Baru Sierra Perdana.

By The Star (by Rachael Kam)

Mah Sing unit to sell retail and office space for RM226m

KUALA LUMPUR: Mah Sing Group Bhd subsidiary, Jastamax Sdn Bhd, has proposed an en bloc sale of an eight-storey retail and office space with two basement levels of car park within its Southgate commercial centre for RM226mil cash to Koperasi Permodalan Felda Bhd (KPF).

Mah Sing told Bursa Malaysia yesterday that it was extending its 5/95 marketing programme to KPF.

Under the programme, 5% of the total price will be paid upon the execution of the sales and purchase agreement and the balance 95% will be released to Jastamax based upon the architect’s certification of each stage of completion.

The eight-storey building, with gross area of 257,943 sq ft (excluding car park) is to be leased back for a period of two years by Jastamax from KPF.

With the proposed en bloc sale, Mah Sing’s sales so far this year have exceeded its full year sales target of RM453mil by 1.2 times to hit RM543mil. Its unbilled sales to date is recorded at RM800mil.

Mah Sing group managing director cum group chief executive Tan Sri Leong Hoy Kum attributed its success to pre-emptive measures in terms of project planning, pre-construction, cost management, cash management and the 5/95 marketing programme.

“Both the residential and commercial divisions have done well under the 5/95 programme, contributing 40% and 60% respectively to sales year-to-date,” he said, adding that it would continue this programme as demand was resilient.

However, it is considering a new sales target for the full year and is unable to reveal any projected figures. Last year, Mah Sing reported revenue of RM651.6mil, of which RM502.1mil came from the property and RM145.7mil from the plastic divisions.

“For the second half, we shall continue launching the projects we had planned last year,” Leong said in a separate statement to Bursa.

By The Star

MK Land confident of achieving RM1b sales

Property developer MK Land Holdings Bhd expects to hit RM1 billion in sales in the near term as it grows double-digit annually over the next five years.

In the shorter haul, MK Land expects sales to breach RM600 million next year, buoyed by the Armanee Terrace condominiums and Rafflesia, two core products within its Damansara Perdana township in Selangor.

This should reflect further progress in the company's fortune after the return of Tan Sri Mustapha Kamal Abu Bakar.

MK Land, in which Mustapha Kamal holds a majority stake, slipped into the red in the years ended June 2007 and 2008 on extra costs incurred because of errant contractors.
It was the period when Mustapha Kamal stepped down as executive chairman from April 2007.

His return as chief executive officer in June 2008 made an instant impact as the company turned in a net profit of RM13.2 million for the nine months to March 2009, reversing the loss of RM18 million a year ago.

MK Land is due to announce its recently-ended 2009 accounts on August 28, with Mustapha Kamal only hinting that he was happy with the result. He is more bullish over MK Land's near to medium-term outlook.

"Instead of concentrating on other areas of our developments, we are focusing on the Damansara Perdana township.

"There are three major projects there - the Armanee Terrace, Rafflesia and Metropolitan Square. The projects alone will generate sales of about RM3.5 billion over five years," he said after the handing over ceremony of eight Modenas Elegant motorcycles to the Selangor police yesterday.

The motorcycles will be used to patrol Damansara Perdana, Damansara Damai and Cyberia.

"The strong demand of the projects will give the possibility of the company registering double-digit growth annually in the next five years," Mustapha Kamal added.

He disclosed that a local investor recently bought all 178 units of a tower within the Armanee Terrace's Block B development for about RM180 million.

Earlier, the entire three buildings within Block A, comprising 522 units, had been snapped up.

MK Land chief operating officer Fatimah Wahab said more towers will be built under blocks C,D, E and F.

Meanwhile, the improved financial performance enables MK Land to make an early payment of RM60 million in May to settle its outstanding bonds, ahead of the September deadline.

This subsequently cut its debts to RM400 million from about RM500 million as of June 2008, Fatimah said.

By Business Times (by Zuraimi Abdullah)

Singapore residential real estate booms anew

Singapore: Recession? What recession?

Despite Singapore's worst economic slump since independence, the residential property sector is in the midst of a new boom reminiscent of 2007, when the city-state was known as the world's hottest real estate market.

Greed and its twin brother fear are back in play as punters stake out condo launches days before sales open, with some offering blank cheques to pre-book flats, prompting the government to hint it may have to cool things down.

"Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful," said Minister for National Development Mah Bow Tan, whose portfolio includes housing.

"A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid," he said.

The minister's words of caution fell on deaf ears.

A 297-unit condo called Optima in the extreme east - well outside prime districts - sold out in within three days in early August after Mah's warning, fetching as much as S$2 million (S$1 = RM2.43) a unit.

The developer had to issue ballots "to address the needs of the genuine buyers" and disperse the huge crowd that turned up for the launch of the project, which will only be ready for occupancy in 2014, a spokesman said.

Within days, some units were already being advertised for resale in the secondary market.

An AFP reporter who recently walked into the sales office of another high-rise condo being built close to the Orchard Road shopping belt was treated like royalty by agents expecting to close deals within days, if not hours.

Bank officers were ready to process loans on the spot.

"Buy before prices go up further," an agent whispered in his ear, gesturing to a "sky garden" bisecting the scale model of a glass-clad, 45-storey tower.

Singapore's economic output is officially forecast to shrink by 4 to 6 per cent this year - less severe than earlier estimates, but still its worst economic performance on record - and office rents are still soft, reflecting weak business activity.

"It is too early to celebrate," Prime Minister Lee Hsien Loong warned over the weekend as he spelled out the country's economic prospects.

The property frenzy began in middle-class condo projects due to pent-up demand from families upgrading from public to private housing but scared off by the 2007 price spiral.

Their enthusiasm quickly spilled over to more exclusive developments.

Prices of luxury condos - the segment worst hit by the recession - are now inching towards peak levels achieved around mid-2007, according to an analysis by business weekly The Edge.

Foreign investors, including Asians looking for a secure place to park their money, are also back in the Singapore market.

Singaporeans enjoy one of the world's highest savings and home ownership rates, but most live in relatively spartan government-built flats, making owning condos an obsessive goal for families.


I&P taking cue from Klang Valley

JOHOR BARU: I&P Group Sdn Bhd plans to introduce the Klang Valley lifestyle to the Johor Baru property market via wholly-owned subsidiary Pelangi Sdn Bhd.

Datuk Jamaludin Osman (right) with a model of Tiara semidetached houses. With him are I&P southern region deputy general manager Abd Razak Mohd Yusof and group marketing and communications general manager Noor Lida Nazri

Group managing director Datuk Jamaludin Osman said it would be bringing in the new concept and new design for its future property launches in Johor Baru.

He said the company wanted to repeat the success story of its projects in Kuala Lumpur and Selangor, such as Seri Beringin Bukit Damansara and Temasya Glenmarie, for buyers in Johor Baru.

“We are looking at the niche category for residential properties priced above RM300,000 with larger built-up area and better design,” Jamaludin said at a briefing yesterday on its JB Mega Property Sales Carnival to be held at Pelangi Leisure on Aug 14-16.

He said the three-day event would showcase an existing stock of 300 residential and commercial properties valued at over RM100mil at prevailing market prices.

All the properties are located in its existing development schemes near hear in Taman Pelangi Indah, Taman Perling and Taman Rinting.

He said once the existing stocks were cleared, the company would roll out new launches under Pelangi as it still has 107.24ha left in the ongoing Taman Pelangi Indah and 364.21ha for the yet-to-be-launched Taman Pelangi Indah II.

To date, I&P Group has about 606.21ha land bank in Johor, including 134.76ha in Gelang Patah near the Port of Tanjung Pelepas.

“We are going for high-end properties in limited units for our future launches in Johor as we believe that this segment is growing,” Jamaludin said.

I&P Group, wholly-owned by the Permodalan Nasional Bhd, is the new entity following the successful merger of three properties companies – Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd – in May.

By The Star (by Zazali Musa)

Managing your condo management

Professional services of registered valuers a good alternative as they have the expertise.

If you are buying a condo in Malaysia, here are a couple of things they don’t tell you in the advertisements.

The first thing is all about the condominium principle. This is a concept drawn together by Western idealists from crowded socialist European countries where they reckon they might have perfected the rules for all living on top of each other. Brief historical research would also reveal that the same countries also probably hold world records for civil war, communal strife and suppression of minorities but that is all confined to history and so should do nothing to dent their credibility.

Basically, the condominium principle is a bit of starry-eyed dogma inspired by the works of Karl Marx. It makes some sweeping assumptions about the desire of the individual to act only in the common good and dictates that any areas outside one’s own unit are all jointly owned for the benefit of the community. This can be anathema to any free-spirited Malaysian who sees the colonisation of his corridor and the ability to park anywhere any time as being merely matters for negotiation.

You can probably guess the second thing about the condominium principle, which is that it creates a small bureaucracy with far-reaching powers extending right up to one’s front door. It assumes that owners will clamour to donate their time and energy to this public service, whereas the more canny ones will of course stay at home, leaving the way open to those who are either na├»ve or power-crazy.

Malaysians are all generally quite smart so it is no surprise that joint management boards and management corporations are often run by Klaus or Pierre. Those owners who have declined involvement usually regard these committees with a certain amount of suspicion, surpassed only by their general contempt for the original developers who initially managed the property and then left with the accounts in a mess.

Malaysia now has nearly 10,000 stratified projects and some, particularly in the low-cost sector, are in serious decline, having reached a point where the arrears of service charge are so formidable that it is impossible to provide minimal service standards.

Despite recent amendments to the Strata Title Act, it is going to take some time to sort some of them out.

It is in this climate that the professional property manager finds himself invited to take control.

In fact, managing common areas is a task that can be performed without professionals by the joint management board or the management corporation which is formed when strata titles are issued. It can be achieved by directly employing suitable staff. However, that is very time consuming for the committee, which has to monitor these operations on a voluntary basis. They may also face unwanted legal liability if mistakes are made. The alternative is to engage the professional services of a registered valuer. Under Malaysian law, only registered valuers can provide property management services on a professional basis. They have the expertise, and they carry professional indemnity insurance.

These are the principal functions of the property management professional in a condo:

Financial Management: Budgeting, collection of service charges and sinking fund, payment of salaries and other recurrent operating costs and keeping proper records.

Maintenance: Routine inspections, monitoring the specialist service providers, scheduling preventive maintenance, dealing with day-to-day repairs.

Cleaning and landscaping: Monitoring and maintaining high standards.

Security: Formulate procedures, monitor and inspect.

House rules: Propose, communicate and implement a complete set of rules.

Insurance: Review, quantify and advise.

Reporting: Monthly and annual budgets and reports.

If you are in need of the professional services of a property manager, you can get a list of registered persons from the Institution of Surveyors, on 03-79551773 or 03-79569728. Alternatively, you can log on to the website of the Board of Valuers at

Bon chance, Pierre.
·The writer is executive chairman of Regroup Associates Sdn Bhd property property consultancy.

By The Star (by Christopher Boyd)

Bolton mulls RM300m Islamic bond sale

BOLTON Bhd, a medium-sized property developer, is considering raising up to RM300 million from an Islamic bond sale to buy land and fund existing projects, its chief says.

"We want to capitalise on the cheap cost of funds to build a war chest to fuel our growth, enhance financial flexibility and be financially ready to purchase a strategic landbank," executive chairman Datuk Azman Yahya told reporters after the company's annual general meeting yesterday.

Bolton, which aims to position itself as a "premier league" property developer, is interested in pursuing land in the Klang Valley and, possibly, Penang.

It has a land bank of some 283.5ha now which can potentially generate about RM3 billion in gross development value (GDV), he said.
The group plans to launch three high-end projects in Kuala Lumpur in this fiscal year with a total GDV of RM450 million.

These projects are expected to enhance its sales over three years to 2012.

For the last fiscal year ended March 31 2009, Bolton made a net profit of RM18.3 million, and it hopes to at least maintain that this year despite the property market still being relatively soft, Azman said.

"Even with reduced margins, and based on our unbilled sales of just over RM100 million, I think we should be able to maintain that," he said.

It made RM46.7 million in the previous year.

Azman explained that property developers are seeing margins coming down as construction costs have gone up again and buyers need to be provided with a lot of incentives.

"I think the heydays of developers making 40 per cent margins is gone. I don't think you'll ever see that again," he remarked.

The group avoids undertaking projects with margins of below 20 per cent, he said.

The three high-end projects it will focus on this year are the redevelopment of the Bolton Court apartments on Jalan Bukit Ceylon with a GDV of about RM153 million, and the final phase of the Tijani apartment project in Bukit Tunku with a GDV of RM110 million. Both are slated for launching in the final quarter of this year.

The third project is a 16-storey condominium, 51Gurney, on Jalan Persiaran Gurney in Kuala Lumpur, which features a unique "drive-to-your-doorstep" concept. This is expected to be launched in the first quarter of next year.

By Business Times (by Adeline Paul Raj)

Bolton mulls over issuing RM250mil to RM300mil bonds

KUALA LUMPUR: Bolton Bhd is planning a bond issuance of RM250mil to RM300mil to fund the development of existing projects and acquisition of land bank, says executive chairman Datuk Mohamed Azman Yahya.

“We are seriously considering a bond issuance at this time of RM250mil to RM300mil at a standby line with a staggered draw down,” he told reporters after the company’s AGM yesterday.

“We have started evaluating the options,” Azman said, adding that the bond issuance would not be for refinancing purposes.

“Our gearing is only 27% today. The ability to gear up is there for Bolton.”

Azman said while the company’s focus this year would be to capitalise on its undeveloped land bank of 700 acres, it was still looking to increase its land bank in the Klang Valley and possibly, Penang.

He said the Penang property market was slow now as Penangites had been hit by the economic slowdown.

Azman said Bolton planned to launch three projects with total gross development value of RM450mil in its current financial year ending March 31, 2010 (FY10).

These projects, all located in Kuala Lumpur, are expected to enhance its sales till 2012.

Coming onstream in the fourth quarter are 100 apartments in Bukit Tunku and 207 serviced apartments at Jalan Bukit Ceylon.

In the first quarter of 2010, Bolton will launch fiftyonegurney, located at Jalan Persiaran Gurney.

Azman expects the company to maintain its sales and net profit for FY10, backed by new property launches and existing unbilled sales.

By The Star (by Eileen Hee)

SP Setia, ARIF JV unit get RM315m loan

GREENHILL Resources Sdn Bhd, a 50:50 joint-venture company between SP Setia and Lend Lease's Asian Retail Investment Fund 2 (ARIF), has signed a RM315 million syndicated banking facility with CIMB Bank, Public Bank and Affin Bank to fund the development of Setia City Mall.

SP Setia president/chief executive officer, Tan Sri Liew Kee Sin, said phase one of the retail mall, which would provide approximately 700,000 sq ft of net lettable area, was expected to be opened in early 2012.

"The mall, which will be located in Setia Alam here, is expected to be fully tenanted once first phase is completed," he told reporters after the signing of the agreement in Shah Alam today.

Also present was Selangor Menteri Besar, Tan Sri Abdul Khalid Ibrahim.

Others included Datuk Seri Nazir Razak, group chief executive of CIMB Group, Tan Sri Tay Ah Lek (managing director of Public Bank), Amirudin Abdul Halim (director for business banking of Affin Bank) and Erle Spratt (fund manager of Lend Lease's Asian Retail Investment Fund 2).

Liew said the company, which had spoken to 50 retailers, has secured three major anchor tenants.He, however, to reveal the names.

He said the mall would be designed, marketed and managed by the joint venture entity, combining local and international retail development skills and experience to create a high quality retail platform.

"It will also be the first mall to be included under the Green Building Index's pilot accreditation scheme," he said.

Lend Lease, one of world's leading fully integrated property solutions providers, was founded in Sydney in 1958.

By Bernama

Mudajaya jumps to record on CIMB report

MUDAJAYA Group Bhd, a Malaysian builder, surged to a record after CIMB Investment Bank Bhd said the company is targeting RM600 million (US$171 million) worth of orders by year-end and plans to venture into Vietnam and Saudi Arabia.

The shares leapt 27 per cent to RM3.54 at 11:30 a.m. local time in Kuala Lumpur, set to close at an all-time high. The stock was the best performer on the 319-member FTSE Bursa Malaysia EMAS Index today, which gained 0.6 per cent.

CIMB raised its target price for the stock to RM6.65 from RM3.68 and maintained its “buy” recommendation, it said in a report.

Mudajaya is “gaining appeal as a pump-priming play” and is a “potential winner of mega jobs,” said Sharizan Rosely, an analyst at CIMB.

The “main positive surprise” from a meeting with management is its plan to seek contracts in Vietnam and Saudi Arabia, he said.

Mudajaya is expected to increase its orderbook to RM6 billion from RM5.4 billion by the end of the year as the Malaysian government accelerates a slew of construction contracts to help revive economic growth.

The government has unveiled RM67 billion of stimulus measures to counter an economic slump as plunging exports push the Southeast Asian nation closer to its first recession in a decade.

The government cut its 2009 GDP forecast in May, predicting a contraction of four per cent to five per cent.

Improved Visibility
“Orderbook visibility has improved, thanks to pump-priming,” Sharizan said.

CIMB raised its earnings estimate for the company by 21 per cent for 2010 and by 34 per cent for 2011.

Mudajaya Managing Director Ng Ying Loong was at a meeting and couldn’t be reached for comment, one of his members of staff told Bloomberg.

The builder may bid for the RM2 billion contract to construct a new low-cost airport terminal at Kuala Lumpur’s airport and participate in the RM7 billion upgrade or extension to a railway network in the Klang Valley surrounding the Malaysian capital, CIMB said in the report.

Mudajaya is vying for four contracts valued at as much as $500 million in Vietnam and has submitted US$400 million to US$500 million of bids in Saudi Arabia, the report said.

By Bloomberg