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Wednesday, March 31, 2010

YTL confident of higher earnings

DIVERSIFIED group YTL Corp Bhd is optimistic of better years ahead, helped by the recovery of the property market, its wireless broadband business, as well as its other businesses.

"For the full year results (ending June 30 2010), the absolute sum will be double that of our first-half numbers," said group managing director Tan Sri Francis Yeoh on the sidelines of Invest Malaysia in Kuala Lumpur yesterday.

"For the next financial year, it looks like it's getting better and better, driven by various factors ... WiMAX, property ... everything is moving," he added.

YTL Corp posted a net profit of RM423.7 million on revenue of RM7.9 billion for the first half ended December 31 2009.
It also plans to launch its wireless broadband services at the end of this year, which the group has committed to invest RM2.5 billion over the next five years.

Meanwhile, Yeoh said the group will use the US$350 million (RM1.1 billion) raised via a five-year exchangable bonds to build its war chest.

"We always make sure we have a war chest," he said, without giving details on what companies or sectors he is eyeing.

By Business Times

MRCB a 'potential beneficiary'

Malaysian Resources Corp (MRCB) is a “potential beneficiary” from a plan by the government and the Employees Provident Fund to form a venture to promote the development of 3,000 acres of land outside Kuala Lumpur, HwangDBS Vickers Research Sdn Bhd said in a report today.

The stock, controlled by the Employees Provident Fund, climbed 3.8 per cent to RM1.65 at 9.51 am Malaysia time, set for its highest close since March 7, 2008.

Meanwhile, chief executive officer Mohamed Razeek Hussain Mericar said Malaysian Resources wants to participate in the development of 3,000 acres of government land in Sungai Buloh, outside Kuala Lumpur.

The comment comes after Prime Minister Datuk Seri Najib Razak said yesterday that the government and the Employees Provident Fund, the biggest shareholder of Malaysian Resources, will form a joint venture to promote the development of the land.

By Bloomberg

GCH to open 2nd Giant hypermart in Sarawak

GCH Retail (Malaysia) Sdn Bhd, which operates the Giant, Guardian and Cold Storage outlets, has signed a 15-year tenancy deal with Naim Realty (Malaysia) Sdn Bhd to open its second hypermarket in Sarawak.

Naim Realty is a wholly-owned subsidiary of Naim Holdings Bhd.

The proposed Giant hypermarket located in Miri, will be completed by mid-July next year and is expected to create more than 200 jobs after it's opened.

"We have invested more than RM12 million in the Giant Permy Mall, a two-storey shopping mall with a gross floor area of 269,000 sq ft over 8.5 acres (3.44ha)," said GCH Retail chief operating officer Tom Herriott after the signing ceremony in Kuala Lumpur yesterday.
The event was witnessed by Miri City Council mayor Lawrence Y.S. Lai.

He said the hypermarket in Miri is the second after Sibu in Sarawak, which is slated to be operational by next year.

"We are also looking at building a third hypermarket in Kuching and are presently scouting for the right location," Herriott said.

The new hypermarket in Miri is located within Naim Realty's Bandar Baru Permyjaya development, which has a population of 50,000.

There are 121 Giant hypermarkets throughout Malaysia today.

By Business Times

Tuesday, March 30, 2010

SP Setia buys Melbourne land for RM90m

Its wholly-owned unit, Setia International, plans to develop a high-density inner city integrated residential and commercial project on the land

SP Setia Bhd, the country's biggest property developer in terms of sales, has bought a piece of land in Melbourne, Australia, for A$30 million (RM90 million).

Its wholly-owned subsidiary, Setia International Ltd, signed a deal yesterday to buy the 4,340 sq m land, held under several certificates of titles, from S.L. Nominees Pty Ltd and Jonquil Pty Ltd.

It plans to develop a high-density inner city integrated residential and commercial project on the land.

The deal was brokered by Savills Australia following a tender process.
According to Savills, there was strong interest from local and offshore buyers, but SP Setia offered the best combination of terms and corporate strength which the sellers were looking for.

The group plans to finance the purchase with internally generated funds and external borrowings.

"Barring unforeseen circumstances and subject to Australia's Foreign Investment Review Board approval, the proposed acquisition is expected to be completed in the financial year ending October 31 2010," SP Setia said in a filing to Bursa Malaysia yesterday.

The group targets to launch the project within 18 to 24 months of the date of acquisition.

"The land is strategically located in the central spine of Melbourne's central business district, between A'Beckett Street and Franklin Street and between Elizabeth and Queen Streets.

"The site is a short walk to Melbourne's central shopping centre and railway station, and is close to the Queen Victoria Market."

SP Setia said the close proximity of the site to several premier Australian universities and colleges will enable the group to monetise its Malaysian customer base, many of whom have sent their children to further their education in Melbourne and have invested, or are looking to invest, in properties there.

Based on the 2006 census published by the Australian Bureau of Statistics, it is estimated that 29,174 Malaysian-born individuals now live in Melbourne.

SP Setia declined to reveal the expected gross development value or profits, saying only that the project "will offer a development potential which is at least equal to that of a similar project in Kuala Lumpur".

"Along with international expansion, the group will also continue to focus on acquiring new landbank in Malaysia for growth and reinvestment, given the many opportunities which still exist at home," its president and chief executive officer Tan Sri Liew Kee Sin said in a statement.

By Business Times

Malaysia pushing for more Middle East construction projects

DUBAI: Malaysian contractors are currently working on 51 projects worth US$10bil in the Middle East and are eyeing for more amid a projected upswing in construction demand.

The majority of projects are in United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Oman, Syria, Iran, Jordan and Yemen, the Malaysia External Trade Development Corp (Matrade) said in a statement yesterday. In value terms, the Middle East contributed the highest share of 42% among the 614 overseas projects worth US$24bil in which Malaysian contractors have been involved from 1997 to 2009.

Datuk Noharuddin Nordin ... ‘Malaysian expertise in infrastructure building has been deployed in 73 projects across the Middle East.’

“Malaysian expertise in infrastructure building has been deployed in 73 projects across the Middle East, including landmark initiatives such as Burj Khalifa, Al Reem Island, Dubai Metro, Dubai Mall and Meydan Race Course,” Matrade chief executive officer Datuk Noharuddin Nordin said in the statement.

Construction companies in Malaysia foresee substantially improved demand from the Middle East as infrastructure outlay continued to top national budgets, it said.

Matrade cited a Business Monitor International study forecasting that the global construction industry could grow between 1% and more than 5% up to 2014.

The projected increase was on account of growth expectations in the Middle East, North Africa, China and India.

Matrade said Malaysian construction companies, which already have an international project portfolio of US$15bil, were aiming to lead the revival in key markets.

To seek further inroads in the Middle East, the Malaysian construction sector will attend the third Malaysia Services Exhibition (MSE) 2010 to be held at the Dubai International Convention and Exhibition Centre from April 13 to 15.

“The unique advantages we offer in terms of resources, skills, quality, cost and experience in mega projects give us a competitive edge over leading providers in the United States, Europe and other Asian countries,” Noharuddin said.

Organised by Matrade, MSE 2010 will showcase the world-class capabilities of Malaysian companies specialising in eight service clusters: professional services, oil and gas, construction, information and communications technology, healthcare, franchising, education and specialised training, and financial services.

The three-day exhibition will be attended by 150 establishments including 130 service providers, 12 professional associations and eight government agencies.

A major addition to Malaysia’s construction services portfolio at MSE 2010 will be environmentally friendly architecture and engineering.

By Bernama

MPC, Beijing Construction planning projects in Iskandar

PETALING JAYA: Malaysia Pacific Corp Bhd (MPC) and Beijing Construction Engineering Co Ltd are planning to undertake the construction and financing of two property projects in Iskandar Malaysia, Johor.

In a statement to Bursa Malaysia, MPC said its subsidiary LakeHill Resort Development Sdn Bhd and Beijing Construction had last Friday signed a letter of intent to evaluate the development and financing of Lakehill Resort City and Aptec City.

It said once Beijing Construction had evaluated the plans, the detailed terms and conditions of contract or contracts would be signed in the presence of both governments.

It added that Beijing Construction, which was one of the largest state enterprises of China, was among the largest construction and engineering companies in China where it had undertaken many major construction projects.

MPC said the letter of intent would map out the basis and the roles of the parties in pursuing the project, with a view to enabling Beijing Construction to hold discussions with third parties such as the Iskandar Regional Development Authority, Johor government and other relevant ministries.

By The Star

EPF to launch new housing loan scheme soon

KUALA LUMPUR: EPF contributors should hold off using the money in their Account II to buy a house until the new scheme which would enable them to obtain a higher housing loan is implemented.

Chief executive officer Tan Sri Azlan Zainol said while EPF was keen to launch the scheme as soon as possible it had to wait until the banks were ready to implement it.

“The banks are studying it. In principle, they are agreeable,” he told reporters at the International Social Security Association (ISSA) technical seminar here yesterday.

During the tabling of the Budget last October, Prime Minister Datuk Seri Najib Tun Razak had announced that the government would launch a scheme to enable EPF contributors to utilise current and future savings in Account II in January this year.

Najib said the scheme, which would enable EPF contributors to be eligible for higher financing to purchase higher value houses, was limited to a purchase of one house at any one time and subject to conditions stipulated by EPF.

During the tabling of the Budget, Najib had also announced the establishment of the 1Malaysia retirement savings scheme where, as an incentive, the Government would contribute 5%, subject to a maximum of RM60 per annum for every RM100 contribution in addition to the existing dividend paid by EPF.

This scheme is for the self-employed and those without fixed income such as taxi drivers, hawkers, farmers and fishermen, who retire without pensions or any form of EPF savings.

Azlan said the 1Malaysia retirement scheme had received encouraging response; it had recorded RM3.4mil in total savings from 8,000 contributors since its establishment on Jan 2.

Of them, 3,000 are self-employed traders.

While contributors can contribute a minimum of RM50 or a maximum of RM5,000 to the scheme monthly and may withdraw their savings upon attaining the age of 55, the Government’s contribution is only for five years.

By The Star

YTL to develop ‘prime real estate’ in Asia

YTL Corp, Malaysia’s biggest builder, plans to develop a “prime real estate” in Asia, Chief Executive Officer Tan Sri Francis Yeoh said in Kuala Lumpur today.

He also said it’s time to take a more “sizeable bite” in Japan’s property market.

By Bloomberg

Bolton inks land deal with Intrapuri

BOLTON Bhd yesterday entered into a deal with Intrapuri Sdn Bhd to acquire a piece of land in Jalan Peel, Kuala Lumpur, for RM39 million cash.

It will develop medium high-end service apartments on the 2.2ha property, with an estimated gross development value and gross development cost of RM280 million and RM220 million respectively.

Development of the property is expected to commence on completion of the proposed acquisition and after obtaining all the approvals from the relevant authorities, with an estimated development period of five years.

By Business Times

Bolton LYL buys land for RM39mil

PETALING JAYA: Bolton Bhd via subsidiary Bolton LYL Sdn Bhd has agreed to buy about 5.5 acres in Kuala Lumpur for RM39mil cash from Intrapuri Sdn Bhd.

It told Bursa Malaysia the proposed development of the land would consist of medium high-end service apartments with podium car parks and facilities with an estimated gross development value and gross development cost of RM280mil and RM220mil respectively.

It added that the development was expected to commence upon completion of the proposed acquisition and after obtaining all the approvals from the relevant authorities with an estimated development period of five years.

The development cost would be financed through internally generated funds and bank borrowings, it said.

By The Star

Partners to discuss Iskandar projects

MALAYSIA Pacific Corp Bhd has teamed up with Beijing Construction Engineering Co Ltd (BCEGC), one of China’s largest construction and engineering firms, to study the development and financing of the proposed Lakehill Resort City and Aptec City projects in Johor’s Iskandar Malaysia.

A letter of intent was signed last Friday, which allows BCEGC to proceed discussions with relevant third parties such as the Iskandar Regional Development Authority, the Johor state government and other relevant ministers.

By Business Times

Kuwait Finance House to step up investments in M’sia

PETALING JAYA: The ongoing due diligence audit at Kuwait Finance House (M) Bhd (KFH Malaysia) has not interfered with the bank’s aim to step up its investment portfolio in Malaysia.

A delegation from its parent company, led by Kuwait Finance House Group chief executive officer Mohammed Sulaiman Al Omar, recently met Prime Minister Datuk Seri Najib Razak and his deputy Tan Sri Muhyiddin Yassin to discuss the group’s intention for further investment in the country.

Specifically, the group is interested to spearhead the establishment of a world-renowned university in Medini Iskandar located in Iskandar Malaysia.

Jamelah Jamaluddin ... ‘The bank will always be guided by pragmatism and act according to the recommendations of the audit team.’

KFH Malaysia chief executive officer Jamelah Jamaluddin, who was appointed less than two months ago, said it was “business as usual” for the bank despite the ongoing due diligence audit.

She said the process was aimed at obtaining an accurate picture of certain transactions and contractual arrangements that had been undertaken over the years.

“This will facilitate a clear perspective of our operations and business to enable us to move forward,” she said in a statement yesterday.

Jamelah said some employees had taken leave to facilitate the exercise and internal re-organisation with the objective of strengthening the bank’s credit team and processes with the intention of improving asset quality.

“The bank will always be guided by pragmatism and act according to the recommendations of the audit team,” she said.

Following the ongoing due diligence audit, RAM Ratings placed the AA2/P1 financial institution ratings of the bank on negative rating watch on March 26.

This is because the audit heightened concerns on the potential for further deterioration in the bank’s asset quality and credit fundamentals.

RAM Ratings had a negative outlook on the financial institution ratings of KFH Malaysia last November, based on the deterioration in the financial metrics of both the bank and its parent.

RAM Ratings said pending comprehensive review, it would maintain close monitoring of the pertinent developments and reassess the ratings when more conclusive information was made available.

Jamelah said the bank also wanted to ensure that its employees were put in positions where their strengths would be fully utilised in line with its talent management strategies.

“We have a strong team in place and it is business as usual for the bank. In fact, we are stepping up our investments in Malaysia.

“Our capitalisation, which is equivalent to US$650mil provides us a strong footing for the bank to expand its portfolio,” she said.

In the same statement, Mohammed Sulaiman said KFH reaffirmed its commitment in its business strategy of fully taking advantage of the enormous opportunities in Malaysia and becoming a partner in Malaysia’s economic growth story.

“We are excited and keen on the country’s new economic model and remain positive on the outlook of Malaysia as it will be the platform for our expansion into the Asia-Pacific region.

“We want to play a vital role in the development of real estate projects in the Asia-Pacific region as well as the introduction of new Islamic financial products,” he said.

FH Group’s interest in the establishment of the university in Medini Iskandar is in line with its vision to have world-class educational institutions in adopting the university of the future concept there.

KFH Malaysia led a consortium to invest about US$329mil in Medini Iskandar via Medini Central Sdn Bhd in 2008.

By The Star

Lion plans more Parkson centres in Vietnam

HANOI: The Lion Group plans to open more Parkson shopping centres in Vietnam, to maintain the chain's development as well as expand their retail network, according to Vietnam news agency today.

Till today, the group manages 82 Parkson stores, with five in Vietnam, 42 in China and 35 stores in Malaysia.

Parkson is a popular department store company in Malaysia which offers items such as fashion, jewellery, cosmetics, furniture, electric goods and food.

Besides the Vietnamese and Chinese markets, Lion plans to enter the Cambodian and Indonesian and other Asean markets at the end of 2011.

By Bernama

KPJ Healthcare plans Asia expansion

KPJ Healthcare Bhd is looking into expanding its network aggressively in Asia beginning next year through acquisition, joint venture and management contract.

The destinations being considered were Indochina, India, Bangladesh, Pakistan and possibly Middle East, Managing Director Datin Paduka Siti Sa'diah Sheikh Bakir told reporters on the sidelines of Invest Malaysia 2010 Conference in Kuala Lumpur today.

"We have received a few offers from these countries and currently, KPJ is reassessing the offers. We hope to finalise them by end of this year to be able to kick off the plan next year onwards," she said.

KPJ presently owns 20 hospitals in Malaysia and two in Indonesia. It also manages two hospitals in Jeddah, Saudi Arabia.

For this year, Siti Sa'diah said, KPJ would only focus on domestic expansion and was in the midst of building two hospitals in Klang and Muar.

On the Al-Aqar KPJ Real Estate Investment Trust (REITs), she said KPJ hoped to complete the exercise of injecting three other hospital buildings (one in Indonesia and two in Malaysia) into REITs by June this year.

The company was waiting for the approval from the relevant authorities.

"This exercise creates more opportunities to acquire more hospital buildings, in particular in Indonesia, for further REIT injection," she said.

To date, KPJ has injected 18 hospitals and a nursing college building into REITs.

Meanwhile, she said KPJ had allocated about RM100 million to expand its existing hospitals and to upgrade facilities in Malaysia.

With the increasing demand for private healthcare services and its expansion plans locally and abroad, KPJ is confident to achieve a revenue of RM2 billion by 2012.

Currently, KPJ’s market capitalisation is RM1.5 billion and hopes to increase it to RM2 billion.

By Bernama

Monday, March 29, 2010

Developers have strong presence in Johor

JOHOR BARU: Johor is a key earnings contributor for many public listed property developers, according to MIDF Research.

In a recent Equity Beat report on the Johor property sector, the research house noted that most key developers continued to have a strong presence in the state with gross development value ranging from RM400mil to RM5bil.

It identified the state’s land availability and close proximity to Singapore as the two main contributing factors, adding that demand for residential properties in Johor could continue to stay healthy in the immediate term.

However, the report also cautioned the downside risk would be steeper than expected in view of the hike in interest rate and a hiccup in the recovery of both Malaysia and Singapore’s economy.

“Actually, there is a combination of several factors and the key one is Iskandar Malaysia which is a big boost for Johor’s property sector,” SP Setia Bhd executive vice-president (property division – northern and southern region) Chang Khim Wah told StarBiz.

Chang Khim Wah ... ‘Iskandar Malaysia is a big boost for Johor’s property sector.’

He said Iskandar Malaysia was gaining momentum with an influx of local and foreign investors since its launch on Nov 4, 2006.

It had received RM55.56bil in cumulative investments up to end-2009, of which 60% were foreign direct investments.

Some investors had already commenced work on the ground and created some 44,000 jobs.

Chang said Iskandar benefitted the property sector as it raised the standard of residential properties and property developers had to deliver quality products.

He said house buyers in Johor Baru now demanded well designed homes with quality finishing.

“Property developers here cater for both locals and foreign buyers (Singaporeans) and must be able to meet their expectations,” said Chang.

He said economic recovery on both sides of the Causeway offered good opportunities for developers here as demand for properties normally grew in tandem with the economic growth.

Chang said SP Setia’s four ongoing projects in Johor – Bukit Indah I & II, Setia Indah, Setia Tropika and Setia Eco Gardens – would keep the company busy for eight years.

Samuel Tan Wee Cheng ... ‘The Federal Government should review the new ruling.’

Meanwhile, KGV-Lambert Smith Hampton director Samuel Tan Wee Cheng said developers had not really taken advantage of Johor’s close proximity to Singapore.

He said developers should look at Singapore’s permanent residents and expatriates based there as their potential buyers.

“It is a well-known fact that Singapore’s cost of living is among the highest in Asia and private properties are beyond the reach of average Singaporeans,” said Tan.

He said the opening of Singapore’s integrated resort in Sentosa last month and Marina Sands Resorts next month would contribute to the escalating living costs in the republic.

Tan said most Singaporeans wanted to upgrade from the Housing Development Board flats to private properties especially landed ones but could not afford to do so, as such properties were extremely expensive.

He said developers should take this opportunity to attract these Singaporeans to buy properties in Johor Baru and with the strong Singapore dollar, they could get their dream houses here without burning holes in their pockets.

Tan said thousands of Johoreans and locals from other states who worked in Singapore but stayed in Johor Baru also offered market potential for developers.

However, he said frequent changes in the state’s housing policies from the RM100,000 levy imposed on foreigners and only allowing foreigners to buy properties worth RM250,000 onwards had dampened growth in the property market here.

Tan said the recent ruling doubling the price of property from RM250,000 to RM500,000 for foreign buyers would further depress the Johor property market after almost two years of slowdown.

“The Federal Government should review the new ruling. It is okay to impose that for properties in the Klang Valley but not outside it,” he said.

Tan shared Chang’s view, saying that Iskandar helped boost demand for high-end residential properties in the Johor Baru district, especially in Nusajaya.

He said the ongoing Legoland Theme Park, Indoor Theme Park, EduCity and BioXCell Biotechnology Park in Nusajaya would also create demand for houses here.

Tan said the completion of the New Coastal Highway, Eastern Dispersal Link Expressway, Senai-Pasir Gudang-Desaru Expressway would improve travel time and connectivity in the southernmost part of Johor.

He said with improvement in connectivity, buyers would be looking for houses in Mount Austin, Tebrau, Skudai, Senai and Kulai areas.

KSL Holdings Bhd executive director Ku Hwa Seng said the Johor government should play a more active role in promoting the state as the preferred investment destination.

Ku Hwa Seng ... ‘We are looking for more land especially in Iskandar for future development

He said even though property development was driven by the private sector, developers needed commitment from the government agencies and departments for growth.

Ku said the state government could open up more land for industrial activities to attract more Singapore-based companies, especially the small and medium enterprises, to relocate their operations to Johor, where land prices and cost of doing business were lower.

He said although land prices in Johor were becoming more expensive, this would not stop developers including those from the Klang Valley from coming here.

“We are looking for more land especially in Iskandar for future development,” said Ku.

KSL’s four ongoing projects in Iskandar – Taman Nusa Bestari, Taman Bestari Indah Ulu Tiram, Taman Kempas Indah and KSL City – will keep the company busy for the next eight years.

By The Star

SP Setia buys land in Melbourne for RM92m

SP Setia Bhd's wholly-owned subsidiary, Setia International Ltd, has purchased a 46,715 sq ft of land in Melbourne for RM92.4 million.

In a filing to Bursa Malaysia, the company said Setia International has formally exchanged a conditional contract of sale with S.L.Nominees Pty Ltd and Jonquil Pty Ltd.

It said the proposed acquisition is expected to be completed in the financial year ending October 31, 2010.

SP Setia's president and chief executive officer Tan Sri Liew Kee Sin in a statement said this new venture is in line with the group's strategy since 2007 to expand its reach beyond its well known township developments, to include integrated commercial, high-rise residential as well as international expansion.
Liew said along with international expansion, the group will also continue to focus on acquiring new landbanks in Malaysia for growth and re-investment, given the many opportunities which still exist at home.

He said the acquisition will give the group a rare and valuable opportunity to enter the matured, high-income and robust Melbourne property market, to credibly, further establish its credentials and boost the profile as an international property developer.

By Bernama

Foreign buyers inflating property market in Australia

MELBOURNE: Foreign buyers are a factor in rising house prices, said Reserve Bank of Australia governor Glenn Stevens.

He said the bank was monitoring how much the Australian government’s decision last March to relax its rules on foreigners owning property had contributed to surging prices for housing. “The role of foreign purchases was an important one and it’s one we’re giving some attention to,” he said.

Australia’s Treasurer Wayne Swan eased restrictions for those on temporary visas, such as business owners and foreign students, to allow them to buy any home to live in, land to build on or new dwelling for investment purposes.

Real estate agency Marshall White said buyers from mainland China and Hong Kong kick-started Melbourne’s prestige property market last year and still accounted for a third of its sales. Malaysian-born agent Julie Wai Leng Karl said it was becoming important to have multilingual agents in the housing business.

By Bernama

Mah Sing receives its second Brand Laureate Award for Best Brand in Property

Mah Sing's Group Managing Director cum Group Chief Executive receiving the Best Brand in Property Award from Datuk Seri Idris Jala, Minister in Prime Minister’s Department.

For the second consecutive year, Mah Sing Group Berhad was awarded The Brand Laureate Award for the Best Brand in Property. The award was presented to the group’s managing director Tan Sri Dato’ Sri Leong Hoy Kum at a ceremony at a hotel in Kuala Lumpur last Friday, March 26.

“I am very honoured that our group is nominated for this award for the second year running as it is recognition of our unwavering commitment to deliver our brand promises made to our stakeholders. We will continue to enhance our brand position while contributing to branding Malaysia globally,” Leong said.

The Mah Sing Group believes that a strong brand identity will be able to enhance a company’s position in both good and challenging times.

Leong said, “A brand promise is made to our stakeholders and these promises must be founded on trust. Trust, reliability and respect will create strong relationships and strong branding. We believe the delivery of this brand promise is what resulted in our strong sales of RM516million for the first 3 months of the year. This is three times the RM170million sales achieved in the same period in 2009, hence we are confident of achieving our sales target of RM1billion for 2010.”

By The Star

Moody's maintains stable outlook for China property developers

HONG KONG: Moody's Investors Service is maintaining its stable outlook for China property developers over the next 12 months and says that while prices will decline, the market is not overly inflated.

Moody's vice president and senior credit officer Peter Choy said on Monday, March 29 that currently, numerous factors -- many at opposing ends of the spectrum -- are at play on the China real estate landscape, leading to a market which shows restrained short-term weakness, but robust long-term fundamentals.

"Moreover, the ability of developers to manage through the situation is much stronger than 18 months ago," he said. "And while we do not subscribe to the view that China's real estate market is grossly inflated -- attracting terms such as "an asset bubble" -- we do expect a 10% year-on-year decline in contracted sales in the country's first-tier cities."

Choy said in 2010, the performances of developers -- with sustainable business models and which focus on owner occupiers rather than investors -- will be less volatile.

"One of the key aims of the regulatory interventions has been curbing activity by property speculators, who will scale back their activities," he said on the release of a new Moody's outlook -- which he authored -- on Chinese property developers.

The report looks at key trends and their rating implications, demand and supply, how the authorities have used regulatory measures to cool the market -- buoyed partly by the government's stimulus packages and the easy available of credit -- and the financial fundamentals of Moody's 14 rated developers.

"In view of the market's improved fundamentals and the timeliness of recent regulatory interventions, the residential property market is unlikely to see a repeat of the slump of 2H2008," he said.

"Moreover, developers are under less pressure to reduce prices, given strong sales in 2H2009 and the resultant strengthening in their liquidity positions."

"And while Moody's rated developers may not achieve their ambitious sales targets in the next 12 months, there is unlikely to be any material impact on their ratings during this time frame. Furthermore, developers need more funding for their larger scale developments, but progress can be adjusted according to levels of funding availability," he said.

By The EDGE Malaysia

China orders tighter property lending

BEIJING: China's banking regulator ordered lenders to take more care when making real-estate loans, widening efforts to prevent property speculators from causing asset bubbles and bad debt.

Banks should not lend to developers found by state agencies to have held land without building houses, the government said in a statement posted online yesterday evening. They should also stop approving new lines of credit to 78 government-controlled companies whose core business isn't property development if they use collateral other than construction projects already in progress, the statement said.

China's property prices rose 10.7 per cent last month, the fastest pace in almost two years, fueling concern that record lending and inflows of capital from abroad are creating asset bubbles in the world's third-biggest economy. The government this month raised deposit requirements for buyers at land auctions to 20 per cent of the minimum price to raise costs for developers. It also lifted banks' reserve requirements twice this year and re-imposed a tax on home sales.

"We have to closely monitor China's asset bubbles," Liu Mingkang, chairman of the China Banking Regulatory Commission, said yesterday at a conference in Beijing. Property prices have changed "quite a lot in the past five years," he said.
Former Federal Reserve chairman Alan Greenspan yesterday said there are "bubbles" in China, without indicating whether they were in property and stocks.

"There are significant bubbles in Shanghai and along the coastal provinces, but there's some of that going back into the hinterlands as well," Greenspan said in an interview on Bloomberg Television.

The regulator's latest order underlines concerns that banks may be at risk from companies that are speculatively raising capital backed by property investments. Banks must carry out "serious" examinations of developers that are repeatedly using the same pieces of land as collateral for loans, the regulator said in the statement.

"These measures are intended to urge developers with land to build houses and sell them quickly to increase market supply," said Zhao Qingming, a Beijing-based senior analyst at China Construction Bank Corp, the nation's second largest lender. "It may curb fast growth in housing prices, but more measures are needed to tackle the root issue, including controls on land prices and speculative house-purchase investments."

"We ask banks to check the qualifications of the developers and they must have a face-to-face check," the CBRC's Liu said on Friday.

By Bloomberg

Saturday, March 27, 2010

Prospects in retail sector positive

Despite the generally soft sentiment in the commercial property market, there are a number of projects underway in Kuala Lumpur and the Klang Valley slated for completion over the next two years.

Most of these new retail projects are of smaller scale and located in the suburban areas. Subang Avenue in Subang Jaya has an estimated net lettable area of 250,000 sq ft, SSTwo Mall in SS2 Petaling Jaya (463,000 sq ft), 1 Shamelin in Cheras (420,000 sq ft), Citta Mall in Ara Damansara (424,000 sq ft), Solaris 2 in Dutamas (300,000 sq ft) and Viva Homes in Jalan Loke Yew (688,000 sq ft).

In Kelana Jaya, a new project Taragon Kelana Commercial Centre was launched last week for completion in the third quarter of 2011.

The project by Blackstone Seven Sdn Bhd, a unit of Allstones Group Asia, comprises five retail lots, eight blocks of shop offices and 60 office suites with a gross development value of RM80mil. Located on 1.1 acres, it is targeted for completion in the third quarter of 2011.

Allstones chairman K.H. Sim says the office suites range from 1,045 sq ft to 1,388 sq ft and priced at RM407 per sq ft. Every unit comes with a free carpark.

According to Sim, more than 60% of Taragon Kelana has been sold. “The trend for small businesses now is to own their offices in a secured environment instead of renting in upper floors of shop houses. This is a niche market we are targeting,” he says.

DTZ Research, in its latest Property Times report, says while prospects in the retail sector are positive, rentals are expected to remain soft especially in the suburban areas given the completion of more new shopping centres.

The lively food and beverage sub-sector continues to provide support to rental rates.

CB Richard Ellis Malaysia executive director Paul Khong says the office market is also seeing more new developments including the advent of a new generation of green buildings.

Generally these green office spaces can fetch rental premiums of at least RM1.50 per sq ft on top of the average rates of RM5 to RM6.50 per sq ft.

New office buildings to be completed this year include Menara Waqaf with 340,000 sq ft of net lettable area, Menara Worldwide (275,000 sq ft), HSBC’s new annexe building (129,000 sq ft), BRDB Tower (223,000 sq ft), Capital Square Office Tower 2 (600,000 sq ft), Menara Kencana (255,000 sq ft) and One Mont Kiara (380,000 sq ft).

Potentially adding to the future supply is a 100-storey skyscraper in Kuala Lumpur proposed by Permodalan Nasional Bhd.

IGB Corp Bhd is awaiting approval to build two high-rise office towers totaling 600,000 sq ft in the last phase of its Mid Valley City development. Construction may commence in early 2010 for completion in three years.

Khong adds that the local commercial real estate market is seeing growing interest from overseas institutions.

Comprising mainly Singapore, Australia, German and South Korean funds, he says they are keen in shopping malls and office buildings that are leased to good tenants.

“These are canny investors with wide experience in the region and when the right opportunity appears they are keen to buy. With further relaxation of the requirements for local equity, Malaysia will continue to attract foreign capital from a variety of sources including sovereign funds and some of the major names in the industry.”

Khong says office rentals are expected to remain competitive this year in view of the 2.4 million sq ft of new supply expected to be completed this year in Kuala Lumpur. As of fourth quarter 2009, the cumulative supply of Grade A office space in the city stood at around 29.9 million sq ft.

By The Star

Efforts to clean our rivers plausible

MALAYSIANS generally have quite poor maintenance practices and culture when it comes to public facilities, which explains why there are many dilapidated and neglected public places around.

From parks to beaches and rivers, it is common to find them in a state of neglect and unkempt with rubbish and other unsightly objects.

Take our beaches and rivers for example. Their condition is far from the picturesque scene that we see in postcards, which usually show pristine clear blue water lapping up sandy beaches or winding down green meadows and lawns.

Many of them are very unsightly and have been severely polluted with debris and all kinds of pollutants.

So, when the Selangor government announced that it is planning to rehabilitate and develop the Klang River by appointing four companies to undertake the project two weeks ago, those who still care about what’s going on around them must have been relieved to know that help is on the way to salvage the 120km river that meanders from Klang to Shah Alam, Subang Jaya, Petaling Jaya, Kuala Lumpur and Ampang Jaya.

Its objective to rehabilitate and clean up the badly polluted river into a new source of water supply will earn it many supporters given that water is fast becoming a scarce resource in various parts of the country.

The plan to develop its economic potential in the commercial and tourism sectors is also laudable to promote new sources of income for the people.

On the other hand, there are also those who must have doubted whether such a massive and ambitious project can pull through successfully.

Their doubts are understandable because the last time the proposal to clean up and develop the Klang River was made in the 1990s, nothing came out of it.

This time around, Selangor Mentri Besar Tan Sri Khalid Ibrahim says the entire project to clean, rehabilitate and develop the river is expected to take 15 years and it will attract RM50bil worth of investments.

Whether the project will be off to a good start and be successful at the end of the day depends on the persistency and will power of its promoter and project partners.

But in this instance, the public, including the squatters by the river banks and factory operators, need to play their part by watching over and caring for the river by not polluting it further.

As in all public projects, the most important criteria to ensure success is to have a strong political will to drive the project through expeditiously and efficiently.

Due diligence should be undertaken to ensure the project’s viability and how best to implement it to reap greater value for the people.

Instead of just stressing on the economic value to extract the maximum return from the project, it is necessary to ensure that it will also improve the people’s quality of life and living standards.

There should be proper balance between the need to preserve the natural eco-system and environment across the length and breadth of the Klang River and its surrounding land; and how much to be opened up for development.

Development of the river should focus on low-density projects and preferably they should be environment-friendly buildings that promote the green way of life.

The projects should blend well with the natural environment and identity so that it will not be lost to development.

After all, the Klang River has a long history as a busy waterway for merchants and traders during the country’s early days.

To ensure the river stays clean and sustainable for many generations to come, steps must be taken to educate the people that they are also stakeholders and should uphold their responsibility as joint caretakers.

Forming river watchdog groups and cleanliness awareness campaigns way before the river project takes off should be effective.

If the littering and polluting persist, heavy fines should be imposed on repeat offenders who indiscriminately dump factory waste or garbage into the river.

If the project is implemented efficiently, it will turn the river into a new resource for Selangor’s economy and promote more healthy and sustainable projects for the people.

·Deputy news editor Angie Ng recalls with fondness the clean streams and rivers she enjoyed with her siblings during her younger days in Penang.

By The Star

Friday, March 26, 2010

Expected growth in sales for Johor property market

JOHOR BARU: The Johor property market is expected to experience growth in sales this year due to the nation’s economic recovery.

Real Estate and Housing Developers Association (Rehda) Johor branch chairman Lee Kim Chai said other factors include higher employment in various sectors compared to last year.

He said the higher employment rate led to stronger purchasing power for prospective buyers.

“Prospective buyers should take the opportunity to buy property in the state at this point of time.

“Interest rates for housing loans are also very low, and thus very attractive to buyers,” he told The Star here on Monday.

Lee said property prices in Johor were comparatively low to Kuala Lumpur and Penang.

“For example, double-storey terrace houses are priced between RM800,000 and RM900,000 in areas such as Damansara Utama.

“The properties in Johor are much cheaper and thus much more attractive to buyers,” he said.

Lee noted that the sales performance of Johor’s property market is peculiar as it is also affected by Singapore’s economic climate.

“We have a sizeable population of locals staying in Johor Baru who are employed in Singapore.

“If Singapore’s economy is doing well a lot of locals would be working over there,” he said.

He added that some Johoreans working in Singapore have plenty of purchasing power.

“It is good for them to buy properties here as the exchange rate is favourable.

“Most of such workers prefer to stay in neighbourhoods and townships near the Second Link as it is easier for them to get access into Singapore,” he said.

Besides Johoreans, Lee said that the Johor property market was also attractive to foreigners, especially Singaporeans.

“Certain townships attract foreigners especially in Horizon Hills or East Ledang, which is near the Second Link.

“The strategic locations coupled with much cheaper prices compared to landed properties in Singapore is an incentive for buyers.

“Landed properties in Singapore cost millions of dollars while it only cost few hundred thousand Ringgit here,” he said.

Lee said that the development of Iskandar Malaysia would contribute to the growth of property sales in the state as well.

“I believe that with more foreign investments coming in and other infrastructure projects underway, the boom will benefit the Johor property market,” he said.

By The Star

Tong sees potential in Ho Hup’s property arm

KUALA LUMPUR: Tan Sri Tong Yoke Kim, who recently emerged as a substantial shareholder in financially troubled Ho Hup Construction Co Bhd, sees potential in the company’s property arm.

Tan Sri Tong Yoke Kim ... ‘I’m coming in as a private investor only.’

Ho Hup, which saw a months-long tussle between Datuk Low Tuck Choy and Datuk Vincent Lye end in the ouster of the latter and the board headed by him in an EGM on March 17, is a Practice Note 17 (PN17) company.

“I’m coming in as a private investor only and don’t personally know anybody in the management or the major shareholders,” Tong told StarBiz over the phone yesterday.

Tong, together with son Datuk Andrew Tong Ho San, also own a 19.27% stake in another construction firm, Bina Puri Holdings Bhd, through investment vehicle Bumimaju Mawar Sdn Bhd.

According to a filing with Bursa Malaysia on Tuesday, the elder Tong had acquired 7.42 million shares, or a 7.28% stake, in an off-market deal on March 10, a week before the EGM that saw Lye and his board ousted.

Low and his family own 27.23% of Ho Hup, which was founded by his father, the late Low Chee. Lye has a 27.95% stake in the construction firm.

The March 17 EGM was requisitioned by Low, also a former managing director of the company, and another shareholder after disagreeing with the previous board led by Lye on the way forward for the company.

Tong added that despite being a PN17 company, there was still some value in Ho Hup, which primarily lay with the property arm.

Ho Hup recently signed a joint-venture agreement with Malton Bhd to develop 60 acres of freehold land the company owns in Bukit Jalil, Kuala Lumpur, into a mixed project comprising commercial and residential properties.

Based on recent filings with Bursa Malaysia, Ho Hup is entitled to RM265mil from a potential RM2.5bil in gross development value from the project over a 10-year period from the approval date of the development.

Tong said the investment in Ho Hup had nothing to do with his other holdings, in particular with that of Bina Puri. “This is separate from my other investments, including in Bina Puri,” he said.

Meanwhile, Ho Hup director Hew Thin Chay said the board had no knowledge of the change in shareholding except from what was reported.

He said the company would make an announcement soon on the appointment of an advisor for the regularisation plan. Both AmInvestment Bank Bhd and Newfields Advisors Sdn Bhd had resigned from their positions as joint advisors last Friday.

“We will likely ask for an extension of time of up to six months from Bursa for the submission of a regularisation plan,” Hew said.

The deadline had been extended to April 4 in an earlier announcement.

By The Star (by Fintan Ng)

Nilai Res to develop land with GD Devt

Nilai Resources Group Bhd announced today that its subsidiary BBN Development Sdn Bhd plans to team up with GD Development Sdn Bhd to develop 135.52 hectares of land in Putra Nilai, Negeri Sembilan.

The proposal involved a mixed residential and commercial development, the company said in a filing to Bursa Malaysia today.

GD's principal activity is real property and property development.

Under the joint development agreement, BBN Development will be entitled to a sum equivalent to 25.8 per cent of the expected gross profits or actual gross profits from each phase of the project, whichever is the higher.

It will also be entitled to 25.8 per cent of all properties retained by the proposed development.

The proposed development is expected to be completed within eight years, in which the timeframe may be extended for another two years.

Nilai Resources said the joint development will allow BBN Development to leverage on the GD group's strong marketing network for the proposed development.

By Bernama

Glomac Bhd: Hold, target price RM1.40

AMRESEARCH has kept its "hold" rating on property developer Glomac Bhd, with a revised fair value of RM1.40 per share. The rating was maintained as it thinks the stock offers little upside despite a bullish outlook in the property sector.

The fair value is arrived at after applying a discount of 20 per cent to its revised estimated net asset value of RM1.74 per share.

"While demand for residential units should pick up from an expected growth in income and robust buying sentiment, we are neutral on Glomac's planned residential launches for fiscal 2010, which accounts for 36 per cent of planned gross development value this year," the stockbroker said in a March 23 report.

"This is mainly because its launches are not appealing, although modest pricing could entice first time buyers and those from a lower income segment," it added.
However, Glomac's shift to commercial development is showing positive results, it noted. AmResearch was somewhat surprised by the strong sales for the developer's commercial venture in Cyberjaya, which has an estimated GDV of RM205 million. While phase 1 of the project has a 70 per cent take-up, phase 2 was sold out.

Likewise, Glomac Damansara was well received despite a glut in supply of retail and commercial space within the vicinity.

"Given Glomac's knack in securing en-bloc sales for its buildings, we are not ruling out more such deals. It is looking to sell a few more buildings at Glomac Damansara with enquiries for its corporate tower in Plaza KJ4," the report said.

By Business Times

PM: Up to state govts to give land

It is up to the state governments to give available empty lots in their planned land use to second generation Felda settlers, said Prime Minister Datuk Seri Najib Tun Razak.

In a written reply to Datuk Azalina Othman Said (BN – Pengerang), he said the Government never broke its promise in providing land ownership.

“Up till now, there are as many as 112,635 settlers in the country and 75,747 or 67.3% had been given ownership titles. A total of 36,888 or 32.7% of settlers have not receive the titles,” he said.

As of March 1, 13,264 ownership applications had been sent to state governments for approval, he added.

Najib said every Felda settler was allocated 4ha of land for farming and about 0.1ha for their living quarters.

According to the agreement between settlers and the state government, settlers were given land ownership documents when they had repaid the development costs that the Government had initially forked out for them, he said.

The development costs included that for jungle clearing, estate development, foundation preparation and building houses, and taxes, Najib said.

By The Star

‘Spin & Win’ at the Modern Home & Lifestyle Fair’s 10th Edition

The 10th edition of the Modern Home & Lifestyle Fair is currently held at Mid Valley Exhibition Centre from March 26 to 28. There are approximately 250 booths spanning 3 halls featuring security systems, mattresses, furniture and furnishings, landscaping, banks, massage sofas and interior design firms, amongst others. According to the exhibition’s project director Charles Yong, the exhibition is expected to attract 70,000 visitors.

The exhibition's project director Charles Yong holding two prizes while explaining how the 'Spin & Win' wheel works

“Even in the first hour, the response was good. There were 100 people waiting outside when we opened at 11am,” Yong said.

Yong explained that the10th edition is also referred to as the appreciation edition where prizes are given for purchases. Visitors with purchases of RM200 and above in a single receipt will be entitled to one spin at the ‘Spin & Win’ wheel, while two spins are accorded for purchases above RM1,500 in single receipt. The prizes are valued between RM25 and RM1,600.

“There are a lot of prizes such as stainless steel flasks and bicycle. One 32” LCD TV will be given per day. Previous years, we have lucky draws. There was a lucky draw per night and the chances of winning are one tenth to get one of the fifty or sixty prizes. This exhibition’s appreciation edition, we have more than 6,000 prizes,” Yong enthused.

“The main exhibitor is LG. Other key exhibitors include Alfo (lights) and Kian Classic (interior design),” Yong explained. He commented that the exhibition features various new technologies such as cleaning and mopping using robot, cooking with high tech halogen light and doors incorporating high security features while retaining its aesthetic appeal.

One of the interesting products is the ANABESS BioClean laundry ball. It claims to be scientifically designed to clean laundry without detergent. Another worthy mention is the Cozzia massage sofas, which is distributed by Ogawa World Berhad. Ogawa’s general manager for home funishing division Dato’ Eddy Sik said that Cozzia was launched in Jaunary this year and the response has been very encouraging as Cozzia sofas are the only sofas that offer basic massage functions in Malaysia. The massage sofas are made from Italian leather and only the single seater incorporates basic massage functions.

The Modern Home & Lifestyle Fair is organised by Cyan Event Management, the same organiser as the ONE Australia Property Fair held in early March.

By The Star

Thursday, March 25, 2010

The Haven to set benchmark

The Haven, a RM250 million lakeside residential project in Tambun, Perak, will set a benchmark for high-end developments in the state, said property developer Superboom Projects Sdn Bhd.

Its chief executive officer Peter Chan said the project, which features Perak's tallest condominium blocks when completed in early 2013, is the first of its kind in the world.

The Haven comprises three 26-storey blocks of luxury condominiums with green features.

It is aimed to be among the first development to embark on all feasible avenues of harvesting nature's renewable, sustainable resources such as wind, water, bio-gas and pro-active mechanical resources to power and maintain common areas, Chan said.
Each block will offer 165 units overlooking a 1.6ha private natural lake with running water, a 14-storey high monolithic limestone rock formation, and the existing 280 million-year-old limestone hills.

"The Haven is a distinctive development with trappings of luxury and functionality. It will be an icon for Ipoh, with a picturesque setting crafted by mother nature. No projects in the world will be able to replicate The Haven, not at least for the next three to five years as land with natural settings is scarce," Chan claims.

The Haven was unveiled yesterday at the company's showhouse in Tambun. So far, 30 per cent of the Block A units have been sold.

The units, priced from RM250,000 to RM1.4 million with sizes ranging from 958 sq ft to 4,345 sq ft, comes in 12 variations and have attracted buyers from Hong Kong, Vietnam and Singapore.

"We believe we are launching The Haven at the right time as the market for high-end products in Ipoh is picking up. There are more people from Kuala Lumpur, Penang, and foreigners looking to buy condominiums in Ipoh as a getaway," Chan said.

The developer will launch the second block when sales at Block A have reached 80 per cent, said the company's co-principle David Yam.

By Business Times (by Sharen Kaur)

SP Setia still bullish on growth in Malaysia

SP SETIA Bhd, the country's biggest property developer, says its target of RM2 billion sales this year will be driven mainly by projects on the home front.

"About RM1.9 billion will come from Malaysia and the remaining RM100 million from Vietnam," SP Setia president and chief executive officer Tan Sri Liew Kee Sin said yesterday in Kuala Lumpur.

He was speaking at a corporate luncheon on the property sector, organised by Malaysian Industrial Development Finance Bhd.

The group has already achieved RM608 million sales in its first quarter ended January 31 2010.
On average, SP Setia's annual sales of nearly RM1.2 billion come from residential projects in the country.

Some of its key developments in the Klang Valley are Setia Alam and Eco Park, which saw sales of RM238 million and RM197 million respectively in the first four months of the financial year ending October 31 2010.

Liew said that SP Setia's sales represent less than 5 per cent of the total market and he hopes to increase this share by ensuring that the group maintains its sales growth of 20 per cent a year.

He foresees the Malaysian property market being resilient despite an expected normalisation of interest rates in the next one to two years.

"Malaysia will still present growth opportunities for us for the next five years. In five years, we will be able to grow in China and Vietnam after the initial learning costs," he said.

The developer has invested some US$12 million (RM39 million) for land title rights in Vietnam and allocated US$30 million (RM99 million) for its developments in China.

While remaining focused on its projects in the Klang Valley, Johor and Penang, SP Setia also sees potential in Sabah from the Sabah Development Corridor.

In addition, the developer is hoping to launch its key catalyst, the KL Eco City development, in October. It will begin pre-launch marketing in three months.

The "green" mixed development is located opposite the Mid Valley Megamall and is a joint venture with the Kuala Lumpur City Hall (DBKL), which owns the 9.7ha leasehold land in the Kampung Haji Abdullah Hukum area.

"We will address infrastructure concerns such as traffic flow. More details will be provided in time to come," said Liew, who declined to comment further.

By Business Times (by Jeeva Arulampalam)

Talam's 4Q net profit falls 76%

KUALA LUMPUR: TALAM CORPORATION BHD 's net profit fell 76% to RM4.54 million in its fourth quarter ended Jan 31, 2010 (4QFY10) from RM19.09 million a year earlier mainly due to a reversal in its finance cost upon the completion of its restructuring and settlement of debts under a regularisation plan.

Revenue fell 49% to RM72.88 million from RM143.91 million while earnings per share (EPS) dropped to 0.23 sen from 2.97 sen.

For the full year, Talam's net profit fell 88% to RM7.09 million from RM59.11 million a year earlier. Revenue fell to RM250.98 million from RM301.28 million while EPS declined to 0.36 sen from 9.39 sen. No dividend was declared.

It said revenue had fallen on the back of lower progress billings generated from its development projects, adding it would continue to complete its outstanding developments and continue to dispose of land and properties that exceeded its requirements.

Talam also said it would apply to Bursa to lift its Practice Note 17 (PN17) status "soon" as its last few defaulted loans with its lenders had been settled.

Meanwhile, KUMPULAN EUROPLUS BHD (KEuro), which is 25%-owned by IJM CORPORATION BHD, posted a net loss of RM5.3 million in its 4Q versus a net profit of RM3.83 million a year earlier. IJM also has a 26.73% stake in Talam.

This came following a significantly smaller share of results of associates at RM1.05 million for FY10 from RM11.38 million.

Revenue was slightly higher at RM10.18 million from RM8.37 million a year earlier, which was offset by higher sales costs. Loss per share was 1.10 sen from 0.80 sen previously. No dividend was declared.

For the full year, KEuro posted a net loss of RM33.08 million versus a net profit of RM11.24 million in the previous year. Revenue was 5% lower at RM41.57 million from RM43.95 million previously while loss per share was seven sen from earnings per share of 2.4 sen. No dividend was declared.

It posted a pre-tax loss of RM33.72 million versus a pre-tax profit of RM10.81 million in FY09 due to exceptional impairment of leasehold land, provision for liquidated and damages claimed by clients for previous projects, and a RM19.79 million loss from its partial disposal of investment in Talam which was mitigated by a RM37.07 million gain from a debt purchase transaction.

Shares of Talam closed flat on Thursday, March 25, at 12.5 sen, while IJM closed eight sen higher at RM4.77. Meanwhile, KEuro lost 0.5 sen to close at 46 sen.

By The EDGE Malaysia

Wednesday, March 24, 2010

Mah Sing plans to build homes in Sabah for MM2H buyers

Mah Sing Group Bhd, the country's fifth largest property developer, is looking for land in Sabah to build residential homes and villas for foreign buyers interested in the "Malaysia My Second Home" (MM2H) programme.

Group managing director Tan Sri Leong Hoy Kum said the company was seeking land in Kota Kinabalu to develop into a mixed range of properties, including villas and residential homes.

"We want to build more houses that can be sold under the MM2H programme and are looking at buying land near the beaches or anywhere in a prime area, or with potential to become a prime area in future," he told reporters after Mah Sing's extraordinary general meeting in Kuala Lumpur yesterday.

"We decided on Sabah because we find that many foreigners are interested to buy properties there."
The group is on track to meeting its RM1 billion sales target for the year through several property developments in the Klang Valley, Penang and Johor.

"We are on track to achieving our sales target, based on our performance in the first three months of this year during which we hit RM516 million. That is three times more than the RM170 million sales achieved in the same period in 2009," Leong said.

The group also plans to acquire at least 405ha in prime areas in Selangor and Johor Baru.

"We have bought two pieces of land since the beginning of the year and are looking for more land to buy, especially in prime locations in Selangor."

Mah Sing has a gross development value and unbilled sales of RM6 billion, which provides earnings visibility for about six to eight years.

Last year, Mah Sing posted RM94.3 million net profit on revenue of RM727 million, surpassing the year's initial target of RM453 million by 1.6 times.

Leong also said that the group's shareholders had voted and approved its proposed bonus issue of up to a maximum of 151,283,858 new ordinary shares of RM0.50 each on the basis of one bonus share for every five existing ordinary shares of RM0.50 apiece.

By Business Times

Mah Sing on track to meet RM1bil sales target

PETALING JAYA: Mah Sing Group Bhd is on track to achieve its RM1bil sales target this year, having hit sales of RM516mil in the first three months.

Managing director Tan Sri Leong Hoy Kum said in a statement the achievement was three times the RM170mil sales registered in the previous corresponding period.

He said the company had gone on an acquisition trail last year to secure prime land and expected to see some results this year.

The group has landbank with a gross development value and unbilled sales of about RM6bil, which provides earnings visibility for about six to eight years.

The group plans to launch about RM1bil worth of properties this year, comprising industrial, commercial and residential projects in the Klang Valley, Penang and Johor.

The group posted a net profit of RM94.3mil last year with total sales of RM727mil.

Shareholders at its EGM yesterday approved its proposed one-for-five bonus issue of up to 151.3 million new shares.

By The Star

Investors infuse value into heritage buildings

AS PENANG'S property scene remains on the boil with developers offering newer and pricier accommodation and commercial options, a new trend in property investment is emerging, notably in George Town's heritage enclave.

In contrast to land reclamation projects, those on hillslopes and efforts in building on virtually any and every available space on the land-scarce island, a group of property investors are out to prove that "old is gold", infusing new life into heritage buildings and giving conservation an economic context.

From foreign retirees to young people who are starting off a business, the address of choice for their premises seem to be centred around the inner city, which saw a migration of its residents a decade ago.

In place of dilapidated shophouses and abandoned pre-war homes are now chic eateries, boutique residences, private dwellings and quaint shops, which make walking tours to visitors very refreshing.
Although the interest in heritage properties is not new, a spike was noted when the Rent Control Act was repealed in 2000.

"George Town has always been synonymous with its historic buildings," notes One Asia Property Consultants (Penang) Sdn Bhd chief operating officer Lim Ewe Tatt.

He attributes George Town's conferment as a World Heritage Site by Unesco to one of the reasons why there has been a recent surge in the number of eateries and boutique accommodation.

"The need to preserve our heritage comes along with it," he said, adding that demand for heritage properties is currently centred within George Town's inner city in sites such as Lebuh Armenian, Lebuh Muntri, Lorong Stewart and other streets boasting structures with beautiful designs.

Award-winning architect Laurence Loh - who is synonymous with putting Malaysian conservation efforts on the world map with the Cheong Fatt Tze Mansion or La Maison Bleue (the blue house) - blazed a trail in architectural conservation in Malaysia, long before the issue even became trendy or understood.

He has to date, worked on some 30 conservation projects in George Town, of which about 70 per cent have been commercial in content.

Loh's first conservation job was the Cheong Fatt Tze Mansion on Lebuh Leith, which he describes as a challenging project.

"This was because in 1990, I did not have any working or hands-on knowledge and training in building conservation, nor attended a single course.

"There was no Internet, so reaching out for help and advice was difficult from a statutory point of view. The laws for protection of heritage were also non-existent," said the deputy president of Badan Warisan Malaysia.

Conceding that the World Heritage inscription has placed George Town and in turn, the whole of Penang under the microscope, Loh added: "World attention has zoomed in on us and the advantages and opportunities are beginning to be apparent."

People, Loh said, are exposed to the heritage values of the place and is a greater awareness now.

"The concept of living in the city that was formerly alien has become fashionable and stylish."

The government's property market report for 2009 showed that a total of 164 pre-war properties (totalling RM74.22 million) were transacted in Penang during the first six months.

This is in contrast with the 120 pre-war properties worth RM64.45 million transacted in the state during the corresponding period in 2008.

"Pre-war properties usually encompass several units which are sitting on one title and if you are to analyse it, it is cheaper than buying into a property with its own qualified title," said Lim.

"The price range could be from RM200 per sq ft to RM500 per sq ft, depending on the location, size, condition and other considerations."

On whether the latest wave in heritage property investments is likely to see a revival of activity in the historic enclave, Lim said: "We anticipate a revival of commercial activities in the area but we doubt it will bring back the residents.

"One of the reasons is the lack of car parking space in this area, and rentals are no longer affordable to the lower-income group who used to stay here."

Although the current trend serves as a boost for the city, Loh said that the only critical factor to it is that the authorities have to really look into managing change.

"They cannot allow market forces to dictate the direction of pace or policy," he added.

By Business Times

Govt to spend RM1b in Kota Iskandar

NUSAJAYA: The construction of six buildings expected to house more than 50 federal departments and agencies in Kota Iskandar here will commence next year.

Historical record: Ghani, State Secretary Datuk Abdul Latiff Yusoff and Ghani’s wife Datin Paduka Dr Jamillah Ariffin looking at the coffee table book in Nusajaya.

Johor Mentri Besar Datuk Abdul Ghani Othman said the buildings which cost RM1bil would be built in the northern part of Kota Iskandar, the new state administrative centre.

“The project is expected to be completed in two to three years. It is part of the Government’s expenditure under the 10th Malaysia Plan,” he told reporters after launching a coffee table book entitled Johor In the 21st Century: The Making of Kota Iskandar here recently.

Abdul Ghani said the book delved into events behind the development of Kota Iskandar.

“The state realised the need for a new administrative centre to replace Bangunan Sultan Ibrahim. The project involved Johoreans especially in the design of the buildings,” he said.

“The book sheds light on the first phase of Kota Iskandar involving the construction of the State Assembly building, the Mentri Besar’s office complex, Dataran Mahkota and other government offices in 2006.

“It illustrates how the building designs are inspired by Johor Malay history and Moorish elements,” he said.

The book which cost RM200 also served as a reference on the history of Kota Iskandar, he added.

By The Star

Tuesday, March 23, 2010

Samling unit in RM6b Viet project

Perdana ParkCity Sdn Bhd, a subsidiary of the timber-based Samling group, will launch its maiden RM6 billion township project in Hanoi, Vietnam by July this year.

Called ParkCity Hanoi, the project features townvillas, townhouses, semi-detached homes and bungalows, as well as condominiums and apartments, which will be built in 15 phases. It will comprise a commercial belt, a community clubhouse, a central park and international schools.

The project will be a replica of Perdana ParkCity's on-going multi-billion ringgit Desa ParkCity township development in Bukit Menjalara, Kuala Lumpur, its group chief executive officer Lee Liam Chye told Business Times in an interview.

"We didn't launch earlier because of the global financial crisis. While the property market in Vietnam (now) remains soft, we expect it to bounce back in the third quarter of this year. We are seeing pockets of recovery," Lee said.

ParkCity Hanoi will be developed by The Vietnam International Township Development JSC (VIDC), in which Perdana ParkCity has a 59 per cent stake.
Vietnam's Vinaconex-Hoang Thanh Urban Development and Investment JSC holds another 40 per cent in the joint venture, while the remaining 1 per cent is owned by a local Vietnamese businessman.

Lee said Perdana ParkCity's contribution in the joint venture is to develop the properties, transfer its expertise and provide some funding.

VIDC has signed a credit agreement with Vietinbank to provide US$45.7 million (RM150.81 million) for the project's two initial development phases.

ParkCity Hanoi will cover 77.4ha at the junction of Le Van Luong and Le Trong Tan roads in Ha Dong district, about 13km from the city centre.

"Our partners will assist us in marketing the products and dealing with the authorities. They are targeting the locals and expatriates in Vietnam. We are confident the project will generate good sales," he said.

Lee added that ParkCity Hanoi will be a good platform for Perdana ParkCity to establish its brand internationally.

Vietnam is Perdana ParkCity's first overseas venture.

By Business Times

Mah Sing rewards shareholders and confident of strong growth with RM516million sales for 1st Quarter 2010

At its Extraordinary General Meeting (EGM) on 23 March 2010, Mah Sing Group Berhad’s shareholders voted unanimously to approve the bonus issue up to a maximum of 151,283,858 new ordinary shares of RM0.50 each on the basis of one Bonus share for every five existing ordinary shares of RM0.50 each.

The bonus issue serves to reward Mah Sing’s existing shareholders for their continuous support and loyalty towards the growth of the Group. With a strong track record of profitability, clear expansion plans and an attractive dividend policy, the Group has strong institutional shareholdings, with more than 50% of their shares being held by reputable institutional investors. The bonus issue will allow the Group to increase its capital base and improve its liquidity by further enlarging the market capitalisation.

Mah Sing Group’s managing director Tan Sri Dato’ Sri Leong Hoy Kum said, “We have done well, achieving compounded annual growth rate of 51% in net profit from 2002 to 2009. As such, it is timely to reward our shareholders as the marketability of Mah Sing shares on Bursa are also expected to improve further with an enlarged large capital base and with stronger growth prospects.”

The Group has landbank gross development value and unbilled sales of approximately RM6billion which provides earnings visibility for approximately 6 to 8 years. Despite the challenging economy, Mah Sing posted a RM94.3million net profit and sales of RM727million in year 2009, surpassing the initial target of RM453million by 1.6 times.

Leong said, “We went on an acquisition trail in 2009 to secure prime land and this year will see the fruition of our efforts. Of our 25 projects, we have completed 5, and our launches this year will come from our remaining 20 projects. Our sales target is RM1billion for 2010 and while this is ambitious, we believe this is achievable given our strong branding, products quality, location, concept and track record. So far, we are on track to achieve our sales target with sales achievement for the first 3 months of the year hitting RM516million. This is three times the RM170million sales achieved in the same period in 2009.”

“The sales momentum in 2010 has been boosted with the launch of new projects namely iParc@ Bukit Jelutong, iParc@Shah Alam and Perdana Residence 2 in Selayang as well as the preview for Garden Residence in Cyberjaya. The show units for Perdana Residence 2 has just been completed and unveiled to approximately 500 privileged guests on 13 March 2010. We received positive feedback on the designs, layout and finishes, and we are now eagerly looking forward to presenting the show village in Garden Residence. Comprising 10 show houses and a sales gallery, we target to open the show village to the public by the first half of 2010,” added Leong.

By The Star

Dorsett Intl may get second hotel in Johor

DORSETT International Hotels & Resorts Sdn Bhd may own and manage a second hotel in Johor in the next three years.

The proposed hotel, to be developed by a subsidiary of Malaysia Land Properties Sdn Bhd (Mayland) - Mayland Austin Sdn Bhd in Mount Austin, Johor, will however be positioned differently from the existing Dorsett Johor Hotel.

"We are looking at a second hotel in Mount Austin within the Palazio development by Mayland," Dorsett Johor's resident manager Tengku Ahmad Faizal Tengku Mohamed told Business Times in an interview.

"The hotel should be ready within the next three to four years. The positioning of the hotel has to be different, maybe only about five to 10 minutes from the existing Dorsett Johor (in Plentong)," he added.
However, details on room inventory and cost of the new development have yet to be finalised.

Dorsett International is owned by Hong Kong's Far East Consortium International Ltd (FEC).

FEC deputy chairman and chief executive officer is Tan Sri David Chiu, the founder of Mayland.

The Far East group now operates hotels in Hong Kong, China, Macau, Japan and Malaysia. It has confirmed a hotel opening in Singapore.

Dorsett is also looking at growing its hotel portfolio in Malaysia. It was reported that Dorsett has been given RM500 million to either build or buy hotels in Malaysia.

While it is eyeing to expand into the Klang Valley, it is also looking to have representations in Sabah, Pahang and Penang.

It has confirmed of opening two hotels in the Klang Valley, one a 200-room business boutique hotel in Sri Hartamas, for an estimated RM100 million, and a three-star 300-room one in Cheras for between RM60 million and RM70 million.

Apart from Dorsett Johor, the group owns and operates four other hotels in Malaysia, namely the Grand Dorsett Subang, the Dorsett Regency in Kuala Lumpur, the Grand Dorsett Labuan and the Maytower Hotel and Serviced Residences.

By Business Times (by Vasantha Ganesan)

Dorsett Johor -- 3-star rating but 5-star service

DORSETT Johor Hotel may be a three-star property, but everything else, from its service culture to room facilities, would earn it an additional star or even two.

The hotel is in fact comparable to other five-star properties in Kuala Lumpur.

How so? For a start, the rooms are new and modern and its service standards impeccable.

This 252-room hotel has a very lean staff to room ratio of 0.35, which is an enviable one, as every employee not only executes his or her job efficiently but also multitasks.
Its 95 employees play their role in helping the hotel chalk-up a gross operating profit (GOP) of some 40-odd per cent.

GOP is gross revenue from rooms, food and beverage, laundry or business centre minus cost of operations like wages, electricity and amenities.

"We need quality staff and not an army," the hotel's, resident manager Tengku Ahmad Faizal Tengku Mohamed told Business Times when asked about its performance.

This two-and-a-half-year-old hotel located in Plentong, Johor, expects a GOP of 43 per cent in the year ending March 2011, as it hits an average occupancy of 75 per cent and an average room revenue (ARR) of RM130.

The jump in guest arrivals, from 65 per cent now, will be a result of an improving economy and the opening of the neighbouring Singapore casinos.

By March 31, the company's GOP is expected to touch 40 per cent.

"The economy has stabilised. Without a doubt, we can achieve 75 per cent occupancy," Tengku Ahmad said.

"We plan to tap into the opening of the casinos in Singapore from those who want to gamble but prefer to stay here," he said, quoting tourists from Thailand as an example.

He also expects Internet bookings to grow this year by up to a quarter of its bookings from about an eighth now.

Accordingly, Tengku Ahmad is hopeful that the hotel will be able see the return on investment within seven years.

The RM80 million hotel is owned by Hong Kong's Far East Consortium International Ltd. The hotel was originally part of an 11-block apartment called Prima Regency. One block comprising 47 units were converted into the hotel.

The hotel's guests are two-thirds corporate-based and predominantly from Malaysia and Singapore. It also gets a good response from the US, Europe and Australia.

It has some 50 rooms, which are on long-term lease and has a good 35 per cent of repeat guests.

Tengku Ahmad's winning formula also comes from his principle of "One should sell what the guests/customers want and not sell what the vendor or the hotel wants to sell".

Meanwhile, the hotel, which now shares the swimming pool with the apartment block, will have its own swimming pool within the next six months. It also plans to open a high-end spa.

Dorsett Johor had two weeks ago won the Gems Awards for Best Three-Star Hotel in Johor, which was awarded by the Johor state government.

By Business Times (By Vasantha Ganesan)

LFE unit sells land for RM4.9mil

KUALA LUMPUR: LFE Corp Bhd’s 51%-owned subsidiary Bestgate Development Sdn Bhd (BDSB) has entered into a sale and purchase agreement with Adept Development Sdn Bhd for the disposal of 116 pieces of freehold land for RM4.9mil cash.

LFE Corp told Bursa Malaysia yesterday that the land was currently charged to AmBank (M) Bhd as security for the banking facilities granted to BDSB.

“The land (prior to subdivision) was acquired on Jan 10, 2005 at an aggregate original investment cost of RM3.71mil,” it said in a statement.

“As per the latest consolidated audited accounts dated March 31, 2009, the net book value of the land was RM5.72mil attributed to the additional sum of RM2mil incurred in the development of the land and maintenance thereof since the date of acquisition.”

LFE Corp said the price was arrived at a willing buyer willing seller basis after taking into account the current prevailing market value based on another earlier lower offer on the land and the valuation on the land carried out by Messrs One Asia Property Consultants (PG) Sdn Bhd which valued the land at RM5mil.

By The Star

OilCorp’s D’Tiara sells property arm

OILCORP Bhd’s unit D’Tiara Corp Sdn Bhd has agreed to sell property arm Magic Coast Sdn Bhd to Amanahraya Development Sdn Bhd for RM29 million.

The sale was necessary to ensure that the joint-venture project, Amanahraya Corporate Tower & D’Tiara Hotel Suites, continues since Oilcorp would have difficulty in procuring end-financing due to its Practice Note 17 status.

The project development cost is RM374.4 million and is expected to be completed by the end of this year.

By Business Times

Talam unit sells land for RM35mil

KUALA LUMPUR: Talam Corp Bhd subsidiary Galian Juta Sdn Bhd has entered into two sale and purchase agreements with Malaysian Allied Health Sciences Academy Sdn Bhd to dispose of two pieces of land for RM35.4mil.

In a filing yesterday, Talam said the original cost of investment of the land was RM34.7mil.

It added that the sale proceeds from the proposed disposal would be utilised to pare down the interest and principal to the entire loan facility granted by EON Bank Bhd to Galian Juta and the balance for its infrastructure cost and working capital.

By The Star

Monday, March 22, 2010

GTower expected to be 75pc occupied by Jan

GOLDIS Bhd, a private equity investment company, expects three-quarters of its GTower building in Jalan Tun Razak, Kuala Lumpur, to be occupied by January 2011.

The 30-storey office building, which comprises offices, a 180-room business hotel and a club that caters to its guests and tenants, has a built-up of 1.4 million sq ft and over 800,000 sq ft in nett lettable area.

"We have confirmed occupancy of 48 per cent," Goldis' head of corporate investments Colin Ng said.

The tenants, mostly from the oil and gas and Multimedia Super Corridor (MSC)-status companies, moved into the building in late January this year.
The rental at GTower including service charge is RM7.50 per sq ft. The tower has also allocated 0.4ha for a food court, which is scheduled to open in September. It was reported that construction of the food court will cost some RM470 million.

Ng, who expects return on investment to take between seven years and eight years, said that among GTower's pull factor is the leasing flexibility which enables tenants to rent for short or long term.

GTower, the first international green rated office building in Malaysia, has 10 units of cube, which measure between 120 sq ft and 280 sq ft per unit. It accommodates one to three persons.

"It is suitable for start-ups and for short-term use," GTower Sdn Bhd manager of business offices operations, Lucia Micheal said.

The building also has nine units of flexible offices measuring between 1,250 and 2500 sq ft. These units are fully fitted and suitable for short-term use and projects, particularly those who do not want to invest much to fit out an office. It can comfortably accomodate 20 people.

GTower also has duplex units which are designed to allow maximum amount of light to filter in.

Other pull factors include its MSC-status. Its provisional MSC status will soon be converted to a full MSC.

"The building has been designed efficiently in terms of size and tenancy terms. We can allow the tenants to expand and provide contracts according to their needs," Micheal said.

Its green building initiative also enables it to save as much as 23 per cent in electricity.

The hotel, to be called The G City Club Hotel, occupies three floors of the building. Scheduled to open in May 2010, it expects an average room rate of RM400 and an occupancy of 75 per cent in the first year of operations.

The Club, which is scheduled to open at the same time as the hotel, measures 10,000 sq ft. All hotel guests and chief executive officers of companies located in the building will receive club membership.

"It will be run like a business club," Micheal said.

The building also features two salt water swimming pools.

By Business Times