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Friday, September 4, 2009

Glomac eyes more land in Cyberjaya

Developer Glomac Bhd might buy more land in Cyberjaya, Selangor following the success of its RM180 million flagship Glomac Cyberjaya project.

The first phase of Glomac Cyberjaya, comprising 39 units of three-storey and three-and-a-half storey shop offices worth RM64 million or more than RM1.45 million each were launched in late July.

Group executive vice-chairman Datuk Richard Fong said 75 per cent of the units were sold within a week.

"We were caught by surprise. We did not expect sales to move so fast. It shows the market is improving and there is demand for shopoffices in Cyberjaya. We will buy more land in Cyberjaya if demand for the properties pick up," Fong said.
Glomac had acquired 3.3ha of freehold land to develop Glomac Cyberjaya from land owner, Cyberview Sdn Bhd, for RM21.24 million in January.

"We still have 24 units of three-and-a-half story shopoffices worth RM40 million to sell. We are launching the units this month and expect sales to move as quickly," he told Business Times.

The final phase for Glomac Cyberjaya will include a data centre and a 15-storey office tower, worth a combined RM75 million.

Fong said the two buildings will be launched in early 2010 and Glomac is looking for serious en bloc buyers.

"We have been approached by some parties but there is nothing on the table yet," Fong said.

Glomac Cyberjaya is strategically placed in Cyberjaya and its immediate corporate neighbours are bigwigs like HSBC, DHL and Ericsson.

By Business Times (by Sharen Kaur)

Mitrajaya buys property for RM28m

PETALING JAYA: Mitrajaya Holdings Bhd’s wholly-owned subsidiary, Mitrajaya Homes Sdn Bhd, has acquired a 99-year leasehold property in Petaling Jaya for RM28mil.

In a filing with Bursa Malaysia, the company said its subsidiary had entered into the sale and purchase agreement with Danaharta Urus Sdn Bhd for the acquisition.

It said the 405,108-sq-ft property’s existing use was for light industrial and was currently a vacant lot.

“The proposed future use would be for industrial and commercial development,” it said.

Mitrajaya Holdings said the acquisition would be satisfied fully in cash, to be financed by internal funds and borrowings.

“The acquisition will increase the group’s land bank for future development and it is estimated to be completed by the first quarter of 2010,” it added.

By The Star

Bank expects E&O to return to the black this year

EASTERN & Oriental Bhd (E&O), a high-end property developer, could return to the black in the current financial year and stay profitable for the next three years, CIMB Investment Bank Bhd said in a report yesterday.

For the year to March 31 2009, E&O suffered a net loss of RM37.28 million compared with a net profit of RM128.85 million a year ago.

"The bottom line should return to the black in 2010 and jump 66 per cent in 2011 and 57 per cent in 2012. We believe robust earnings growth is sustainable even until 2013," wrote analyst Terence Wong in the report.

He noted that E&O has the highest upside to its target price if it manages to execute its ambitious launch schedule without too many hiccups.
The research house, which initiated coverage on the company yesterday, describes E&O as its top pick in the property sector with a trading buy target of RM2.18 a share.

This is a steep discount to E&O's revised net asset value of RM3.11 a share, which, according to CIMB's Wong, is the third steepest after UM Land Bhd and Hunza Properties Bhd and more than double the sector average.

Also, E&O has unbilled sales of RM310 million which should reap pre-tax profit margins of 25 per cent and this will be booked over the next two to three years, the CIMB report stated.

The group also has more than RM4 billion worth of properties that are ripe for launch over the next two to four years that should help in its turnaround prospect.

The bulk of the value comes from Seri Tanjung Pinang, a comprehensive mixed development township located 5km northwest of George Town and adjacent to Gurney Drive.

The project also involves reclamation of 397ha of land. So far this year, E&O has launched 33 link houses priced from RM1.1 million upwards, which were snapped up within hours.

Two intermediate units fronting the sea were sold for RM1.6 million, while two corner units, also fronting the sea, were sold for RM2.8 million, a record in Penang.

Its next launch will be the remaining 33 units of marina serviced apartments valued at more than RM30 million, while the biggest launch of the year will be condominiums with RM1.8 billion gross development value (GDV) in total.

Other sizeable launches include the Jalan Conlay condos with a GDV of RM800 million and the commercial building next to St. Mary Residences, situated in the heart of the Golden Triangle, with a GDV of RM500 million.

By Business Times (by Francis Fernandez)

Tabung Haji sees good opportunities to own properties in Europe

JOHOR BARU: Lembaga Tabung Haji (LTH) is now looking at Europe as part of a strategic investment plan to further expand its property portfolio via subsidiary TH Properties Sdn Bhd.

The fund’s chief executive officer Datuk Ismee Ismail said it had explored London and found that the city offered good returns for property buyers.

“After London, we are going to other major European cities and we believe there are good opportunities for us to own properties in Europe,’’ he told reporters after giving out Hari Raya Aidilfitri contributions to single mothers here.

Ismee said LTH was already known among investors and bankers in Europe as an “Islamic economic powerhouse” due to its large fund size.

TH Properties has invested about RM2.3bil in properties in Malaysia as well as Makkah and Madinah in Saudi Arabia, according to Ismee.

He added that for the last two years, instead of focusing on properties in Kuala Lumpur, the fund had been going to Georgetown, Johor Baru and Kota Kinabalu as these places also offered good investment opportunities.

“You can’t go wrong when it comes to (buying) property but you must remember the three words – location, location, location,’’ he said.

Separately, Ismee said the number of LTH depositors had increased to 4.7 million while its fund had grown to RM23bil.

In 2006, there were 4.5 million depositors while its fund stood at RM16bil.

He attributed the increase to two main factors – the growing confidence among depositors and a good dividend pay-out compared with other syariah-compliant financial products.

LTH paid a 5% dividend to its depositors last year. It hopes to maintain the rate this year despite the current global economic crisis, according to Ismee.

By The Star (by Zazali Musa)

CapitaLand cautions about 30% gain in home prices

SINGAPORE: A 30% increase in Singapore home prices would raise concerns about the sustainability of the recovery in the island’s property market, according to CapitaLand Ltd chief executive officer Liew Mun Leong.

However, a gain of 5% to 15% in home prices was still reasonable given pent-up demand, a rally in stocks, interest rates and a recovery in Singapore’s economy, Liew said in an interview with Bloomberg on Sept 4 after presenting a project for 1,040 apartments in Singapore that starts selling next month.

Record home sales in July is still “normal behaviour,” he said.

Home sales jumped 52% in July to 2,767, a sign prices may rebound from four straight quarters of decline. Demand may not be sustained and the government is monitoring the market “closely” to ensure speculation doesn’t lead to a bubble, National Development Minister Mah Bow Tan had said July 29.

“The current market is being supported by some fundamentals like pent-up demand and affordability,” said Chua Yang Liang, head of Southeast Asia research at property consultant Jones Lang LaSalle Inc. “Beyond that, the current rate of growth could certainly cause asset inflation growth if it is not supported by a recovery in the local and global economy.”

An index of private home prices dropped 25% in the 12 months to June 30, according to Urban Redevelopment Authority data. Prices had gained 58% in the previous 17 quarters.

“If it jumps 30%, then I will be a little bit concerned about whether it is sensible,” Liew said, referring to home prices.

Speculation that collective sales or so-called en-bloc sales of existing apartment projects will recover may also be overly optimistic, Liew said.

The Laguna Park development in Singapore’s East Coast is being offered for S$1.2 billion (US$832 million), which would be the second-highest price ever for such a transaction, the Straits Times reported this week.

“It is relatively too soon to think about high prices now,” Liew said. “Given the cost of the land, given the construction cost and given the demand, it is too early for developers to confidently say the world economy has recovered and there will be buyers who can afford the price.”

CapitaLand, Southeast Asia’s biggest developer, paid a record S$1.3 billion for the Farrer Court site in 2007. It also paid about S$548 million for Gillman Heights in 2007. Gillman Heights will be used to build a 1,040-apartment development designed by Office for Metropolitan Architecture’s Ole Scheeren, one of the architects of the 54-storey CCTV building in Beijing, the developer said.

The developer reported its first quarterly loss in 5 ½ years in July amid writedowns on residential and investment properties.

By Bloomberg