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Monday, May 31, 2010

Adiva project wins Fiabci award

The Adiva is the third precinct to be developed in Desa ParkCity after Safa and Nadia

BALI: Adiva, a precinct within Desa ParkCity in Kepong, Kuala Lumpur, has been named the world’s best residential (low rise) category at the 61st World Congress of the International Real Estate Federation (Fiabci) here last Thursday.

Fiabci is a French acronym for the Paris-based federation founded in 1948 to highlight real estate specialities and activities.

The 11-acre Adiva precinct won the Fiabci Prix d’Excellence Award under the residential (low rise) category.

The project comprises 160 triple, double-storey and walk-up apartments set against meandering linear parks within the masterplanned development of Desa ParkCity.

Desa ParkCity is a project by Perdana ParkCity Sdn Bhd, a subsidiary of Sarawak-based Samling group.

About 10 precincts are already occupied around a commercial area and work is in progress for the rest of the 500-acre development.

Adiva was the third precinct to be developed after Safa and Nadia. The developer has a vision to turn what used to be a quarry into one of the city’s most beautiful landscaped residential community.

The runner-up in the same category is Jakarta Garden City, a joint-venture development between Singapore’s Keppel Land and Indonesia’s PT Modernland Tbk.

The Fiabci Prix d’Excellence Awards received 54 entrants from 11 countries vying for 14 categories.

Perdana ParkCity group CEO Lee Liam Chye, who has been with the project from its birth, said: “We bought this land of about 500 acres for RM10 per sq ft in June 2000. It was a wilderness with rocks, granite and lots of trees and was part of what is today Country Heights Damansara.

“It was a hillock with ravines and ridges – a hot potato that no one wants – and we carved out the different parcels.

“People may say we paid RM10 per sq ft for this land, but we also spent RM250mil to blast the rocks and prepare it for development. It was a tremendous challenge but amid all that wilderness, I saw the potential.”

Lee said he and his team worked with the local authorities because legislations and town-planning controls had to be amended to legitimise and validate this new housing concept.

Adiva, with its ideals and ideas, played a large part in convincing the authorities to respond favourabley in facilitating the changes.

“I was educated in Britain and when I go there (Europe), especially to Paris, these places are so absorbing. I asked myself, ‘What is it about these places that provoke such emotions within me?’

“I asked myself many times. Today, I have the answer. The emphasis is on authenticity, the embodiment of history and culture. When I set out to plan and build this place, I wanted to create that sense of place and space. It’s exactly 10 years now and I have learned so much,” said Lee.

“When you see a duck swimming in the water, you only see the serenity and gentleness of the scene, but you do not see the furious paddling under the water. The same goes for the development of Desa ParkCity.”

Sime Darby group will operate a hospital there. A contract to build it will be awarded in about two weeks and the hospital is expected to be operational by the third quarter of 2012.

Another contract to build an international school was awarded two weeks ago. This will be completed by the middle of next year.

By The Star

IGB set for bigger challenges

PETALING JAYA: IGB Corp Bhd is ready to take on bigger challenges after having built a substantial portfolio of properties in the retail, hospitality and high-end residential sectors.

»Our Mid Valley Megamall that is parked under KrisAssets Holdings Bhd is doing very well« ROBERT TAN CHUNG MENG

With the stronger ringgit and the company’s low gearing and healthy cash reserves, it was high time to expand aggressively in retail sector abroad, said group managing director Robert Tan Chung Meng.

“Our Mid Valley Megamall that is parked under KrisAssets Holdings Bhd is doing very well.

“We are now aggressively looking to acquire one or two malls in the United States and Europe,” Tan said recently.

For the first quarter ended March 31, its 75%-owned KrisAssets posted a net profit of RM27mil against RM25.4mil in the same period last year.

IGB’s net profit rose 4.1% to RM35.32mil in the quarter from RM33.9mil a year earlier.

Tan said the company, which has a cash reserve of RM180mil, would have no problem raising funds. The company expects the expansion abroad to cost RM1bil to RM2bil.

Its hotel division, which contributes 50% to group profit, is also slated for expansion locally and overseas.

“We are targeting Japan, China and Indochina where we will either buy existing hotels or develop new ones,” Tan said.

In Malaysia, IGB owns Garden Hotel, Boulevard Hotel, Pangkor Island Beach Resort, Garden Residences, the Cititel chain of hotels and the Micasa all-suites hotel.

The company is submitting a proposal to develop the final phase of Mid Valley City comprising office blocks on a 500,000-sq-ft site.

Tan hoped to get the approval for the RM500mil office project by the year-end.

IGB is focusing on expanding businesses which offer recurring income, especially in hospitality and property investment and management.

It is now leasing offices at the Gardens north and south towers within Mid Valley City.

However, “small (property) launches’’ by IGB lately have been a cause of concern, with AmResearch Sdn Bhd describing them as a “disappointment”.

“Given the robust consumer sentiment, we had earlier expected IGB to launch more residential projects such as 6 Stonor with a gross development value (GDV) of RM300mil and projects at Sierramas in Sungai Buloh,” the brokerage said.

Tan said IGB’s two new launches were doing well. “Most of the units at Seri Ampang Hilir Residence and Garden Manor have been sold.” Both projects had a combined gross development value (GDV) of RM150mil.

Founded in the early 1960s by two brothers – the late Datuk Tan Kim Yeow and Datuk Tan Chin Nam – and named after its maiden project in Ipoh, IGB has turned from being a mere developer into a mega asset-based company that is worth RM4.5bil at the end of 2009.

IGB, which was listed in 1981, and Tan & Tan Developments Bhd, another property unit formed by the Tan brothers and listed in 1993, announced a massive merger and rationalisation exercise in the year 2000.

That resulted in IGB assuming the property assets of parent Tan & Tan, which then transferred its listing status to a new vehicle, Gold IS Bhd, another entity controlled by the two Tan families.

The group is now looking at injecting its properties into a real estate investment trust (REIT), which will probably be the country’s largest.

To do that, analysts said the group must inject properties with good financial track records and these include Gardens Mall developed by Mid Valley City Gardens Sdn Bhd, a subsidiary IGB.

However, the proposed REIT was probably delayed due to the drastic drop in market value of such trusts in 2008 and early 2009 and the poor sentiment for REIT listings.

By The Star

China, HK property retains allure despite wobbles

Real estate in mainland China and Hong Kong retains a strong long-term allure despite current fears of a damaging bubble, according to an influential player in the regional market.Alastair Hughes, Asia-Pacific chief executive of Jones Lang LaSalle, a dominant presence in the Chinese property markets, sees plenty of reasons for optimism.

"For every expat who whinges about pollution, there are 20 people in London who'd like to be here," he told AFP in an interview, gesturing out across Hong Kong's famed skyline on a rare clear day in the city.

"I don't think you'd find many people who've made money betting against Hong Kong," Hughes added.The market for luxury property in Shanghai and Beijing is seen as "a little bit frothy" because of wealthy individuals indulging in speculation, he said.

"On the other hand, you've got everywhere else in China," he said, pointing to the annual migration of 50 million people from the Chinese countryside to cities in search of work and better housing.

As other parts of the world struggle out of recession, property markets in China and Hong Kong have been charging ahead, so much so that Beijing has taken increasingly aggressive steps to rein in the mainland market.

The government has restricted lending and made it harder for people to own second or third homes, or to buy outside their home towns.

Largely in response, Shanghai's stock market has fallen about 15 percent in two months.

One analyst, Carol Wu of DBS Vickers Securities, predicts a 20-30 percent fall in prices for top-tier mainland housing and a 10-15 percent drop in the "second tier".

Nonetheless, Hughes says that not only is market "frothiness" confined to the swankiest neighbourhoods, but that the commercial and office sector, where cooler heads prevail, is largely unaffected.

"It's really important to separate commercial from residential. The drivers for residential property are very much individually driven and there's more sentiment and emotion," he said.

"On the commercial property side it's a very professional market. People don't do things on a whim."The International Monetary Fund appears to agree.

In April it said that concerns about Asian property bubbles were "limited to some urban areas in China and high-end luxury segments in Hong Kong and Singapore," although it warned policymakers against complacency.

That said, mainland China's market for commercial and office space doesn't always obey market forces.

Beijing office rents continue to rise despite high vacancy rates. Elsewhere, Shanghai office rents jumped 4.9 percent just in the first quarter, according to Jones Lang LaSalle.

Growth ranges widely, from Shenzhen in the southeast, where Goldman Sachs recently took up grade-A office space, to more modest rises deep in the interior, such as the southwestern city of Chengdu.

As for Hong Kong, the former British colony regularly takes a bashing for its polluted air and fares poorly in some international rankings of cities for "liveability", such as those by the Economist Intelligence Unit.

But boosters of Hong Hong real estate point to the sale this May of an elite property on the Peak, known for its majestic views over the South China Sea -- weather permitting -- for a cool 233 million US dollars, to a local tycoon.

For Jones Lang LaSalle, which traces its origins to a funeral and house-clearance business in London two centuries ago, Asia and particularly China look set to remain key growth areas.

The company employs 4,000 people on the mainland, virtually all of them Chinese nationals, and another 4,000 in India.


Saturday, May 29, 2010

Frankfurt-based SEB bullish about Malaysia

SKANDINAVISKA Enskilda Banken (SEB) Asset Management AG, a Frankfurt-based real estate fund manager, is eyeing more growth opportunities in Asia, especially Malaysia.

The firm entered the Malaysian market in 2007 and has since invested RM700mil in two real estate developments – Tower 1 Pavilion Residences in Kuala Lumpur’s Golden Triangle and Citta Mall, a suburban shopping centre under development in Subang Jaya.

SEB managing director Chua Choy-Soon is optimistic about the company’s investment plans in Malaysia given the country’s strong rebound in the first quarter of 2010. Malaysia’s economy grew 10.1% in the first quarter, its fastest pace in 10 years.

Chua Choy-Soon says all the units of the Pavilion Residences sky villas have a panoramic view of the city skyline, including a view of the Petronas Twin Towers and the KL Towers.

“This is an attraction to a group (like us) to further invest in Malaysia. The Malaysian Government is promoting a liberal and free-market economy. The changes done are a good signal for more foreign investors to come in,” he says.

Chua says the development of Citta Mall in Subang Jaya, which is in collaboration with local developer Puncakdana Sdn Bhd, is expected to be completed by year-end.

“Our strategy is similar to shopping centres in Western countries and we want to apply this concept here. In a recession, these (neighbourhood) malls are quite resilient because people still need to shop for groceries and essential goods.

“We feel this concept has not been fully utilised here. Malaysia is a family-orientated country. There will be a lot of focus on family-related concepts and activity for kids,” he says. The 400,000 sq ft Citta Mall is expected to have 150 shops and 1,200 car parks. Chua says the mall’s tenant mix would comprise mostly food and beverage, fashion and apparel outlets.

The Pavilion Residences meanwhile comprises two high-rise towers of 368 elite residences set amidst a seven-acre park overlooking the city.

Located in the heart of Bukit Bintang, the 43-storey, Tower 1 (which is owned by SEB), comprises 163 apartment units. The development has received overwhelming response since it was launched in November.

“About 70% of the units have been taken up,” says Chua. The size of the units range from 1,234 sq ft to 7,174 sq ft, with prices ranging from RM1,300 to RM1,400 per sq ft.

SEB will be launching its Pavilion Residences sky villas in Tower 1 on June 26. “The most unique selling point is that all units have a panoramic view of the city skyline, including a view of the Petronas Twin Towers and the KL Towers,” says Chua.

Chua says SEB is keen to partner local companies for future real estate projects if there are opportunities. “We’re long-term investors,” he says.

In Asia, SEB has investments in Australia, China, Japan, Malaysia and Singapore. Chua says there are plans to grow its presence further within the region.

“Asia is definitely a focus for us in terms of real estate. In the next few years we think Asia will outperform both Europe and US. We see a lot of money moving into Asia and Malaysia is definitely part of the equation,” he says.

Globally, SEB’s total assets amount to 236 billion euros, while assets under management total 143 billion euros as of March 31, 2010. According to Chua, about 70% of the assets under management are in Europe, with Germany comprising 40%.

By The Star

Championing the green way of building

Going green has become trendy among communities and organisations, and more people are taking up this cause by adopting an eco-friendly lifestyle.

Nevertheless, every stakeholder, whether they are common folk, government or private organisations, has to contribute towards ensuring a more sustainable environment.

With the Government’s move to review the uniform building by-laws to promote the adoption of more energy-saving and environmental sustainable measures for buildings, there will be more environment-friendly developments in the future.

The initiative to ensure new buildings feature energy-saving and other pro-environment measures is a good way to promote the green culture among industry players. After all, built structures make up almost a third of total energy consumption in the world today.

In Malaysia, developers are still weighing the costs and benefits of going green as many are concern that it will result in higher costs for their projects.

That explains why it is still early days for Malaysia’s green building initiatives and there is just a handful of such buildings at the moment.

Developers should be championing the green way of building as they are responsible for the planning and opening up of new corridors. Being a tropical country rich in flora and fauna, there are many opportunities for developers to preserve as much of the natural habitat as possible.

Whether projects are residential or commercial, buildings should adopt environment-friendly features such as natural ventilation for cooling, rain harvesting and conservation of original land form and vegetation.

Buildings should also be built with sustainable construction methods and materials. Although the cost of developing a green building may be more than that of a conventional building, the savings in operational costs would make it cheaper in the long run.

A building constructed with the right green designs and features, can reduce energy cost by 50%, which is a substantial saving as energy makes up 25% of a building’s operating cost.

Although green technologies have progressed quite well, much of the technology and materials used are still mostly imported.

Malaysian companies that have the know-how should venture into producing green technology building materials such as recycled content for floor finishes, photovoltaic systems and mechanical and electrical equipment.

Having a home grown rating tool in the form of the Green Building Index (GBI) is a also good start.

The GBI spells out the importance of energy-efficient design, indoor environmental quality, sustainable site planning and management, using the right materials and resources and water efficiency and innovation.

With the GBI in place, buildings can now be assessed and guided to reduce and minimise their impact on the environment.

But the contention by developers that the market may not be ready to pay the high fees for the GBI accreditation may undermine an otherwise worthy initiative.

Greenbuildingindex Sdn Bhd is a wholly-owned subsidiary of the Malaysian Institute of Architects and the Association of Consulting Engineers.

The assessment fees charged range from RM5,000 to more than RM100,000 based on the category and size of the building or property.

To promote the GBI accreditation among developers, the fees charged should be scaled back to make it more affordable. If the total development costs of a project escalates due to the GBI accreditation, buyers will have to pay more for their “green” property and this will not go down well with them.

If all goes well, green-accredited buildings will become sought after, especially if these buildings are able to fetch higher premium in terms of capital value and rental rates compared with non-green compliant buildings.

Deputy news editor Angie Ng believes the green way of living and industry practices will be a great elixir for Mother Nature.

By The Star (by Angie Ng)

Thursday, May 27, 2010

IGB’s to focus on hotels, properties

KUALA LUMPUR: IGB Corp Bhd plans to focus more on its hotel and property investment divisions to drive its growth and expansion as both businesses offer better gains, says group managing director Robert Tan Chung Meng.

Location is the most important thing to be considered before any decision is made. ROBERT TAN

“Our offices under the property investment division provide strong recurring income to the group and the hotel’s expansion and acquisitions are much easier as less hassle is involved,” he told reporters yesterday after the company’s AGM.

Tan said the group was aggressively looking to build hotels and acquire existing hotels locally and in countries such as China, Japan and Indochina.

“We are reviewing proposals for that matter but, for us, location is the most important thing to be considered before any decision is made,” he said, adding that the group’s latest hotel, located in Manila called St Giles Hotel, would be fully operational by the third quarter this year.

Location is the most important thing to be considered before any decision is made. ROBERT TAN
Tan said new property launches would depend on the market conditions. He also said The Mid Valley City phase 3 that was put on hold in 2009 had been re-planned as a commercial development.

“We plan to build an office and retail building there with a gross development value of about RM500mil. We hope the relevant approvals will be obtained by end of this year.”

Meanwhile, IGB had posted a slightly higher net profit of RM35.3mil for its first quarter ended March 31, compared with RM33.9mil in the previous corresponding period due to improved performance by the other divisions.

It told Bursa Malaysia yesterday that revenue for the period was lower at RM156.1mil versus RM165.6mil previously due to lower contributions from the property development division while earnings per share for the period were 2.42 sen against 2.31 sen before.

By The Star

IGB looks to expand hotel ops overseas

With almost half of its profits from hotel division, property developer IGB Corp Bhd plans to expand the business overseas, namely to Japan, China and Indochina.

Its managing director Robert Tan Chung Meng said the group will either buy existing hotels or develop new ones abroad.

"We are looking at the possibility of acquiring the existing ones, mostly those which are under distress. In such cases, it is easy for us to spread our business activities in this sector if we acquire those existing hotels, which are mostly located strategically within city centres," he told reporters after the group's annual general meeting in Kuala Lumpur yesterday.

The group now manages a hotel in the UK and owns several hotels locally, including the Cititel hotel chain, MiCasa All Suites, The Gardens Hotel, The Boulevard Hotel and the Pangkor Island Beach Resort.
IGB is set to launch its three-star hotel in Makati, the Philippines in the next three weeks.

Financially, IGB expects to maintain profitability for this financial year ending December 31 2010.

Last year, it registered a net profit of almost RM159 million, up against RM155 million previously. This was achieved on the back of RM642 million in revenue for 2009, compared with RM688 million previously.

Yesterday, IGB announced that the group made a net profit of RM42 million for its first quarter ended March 31. This was highwer from RM39 million posted over the corresponding period last year.

Moving forward, Tan said IGB will focus on property investment, rather than property development.

"I don't expect to see any new project launches this year, despite several proposals that have been lined up for approvals from the authorities. We want to optimise our existing assets," he said.

Tan said contribution from property investment and management exceeded RM90 million last year compared with the previous year's revenue of about RM60 million.

Despite a subdued market and strong competition from new offices, the division recorded an average occupancy rate of above 90 per cent.

Tan also provided an update of the Mid Valley City Phase 3 project, which was put on hold in 2009.

With a gross development value of RM500 million, he said the Mid Valley City Phase 3 has been re-planned as a commercial development and will proceed upon approval.

By Business Times

Mah Sing Q1 profit jumps 24pc to RM28m

PROPERTY developer Mah Sing Group Bhd posted a 24 per cent rise in its first quarter net profit due to better performance in its property and plastic divisions.

Its net profit was at RM28 million, an improvement compared with first-quarter net profit of RM22.6 million during the same period last year.

"The group's residential and commercial projects helped contribute to the good results," Mah Sing said in a statement yesterday.

Revenue for the quarter was at RM238.3 million, up from RM150.3 million a year ago.
Main property project contributors were Southgate, Hijauan Residence, Kemuning Residence and Aman Perdana in Klang Valley, Residence@Southbay in Penang as well as Sierra Perdana and Sri Pulai Perdana 2 in Johor Baru.

The group is confident of achieving its RM1 billion sales target for 2010 as it has met 60 per cent of the target or RM601 million sales in the first quarter of 2010.

"Prospects for the residential, commercial and industrial segments are bright, given a better employment market, strong liquidity, pent-up demand and still-conducive interest rate levels," it said.

As at March 31 2010, the property group has unbilled sales of approximately RM1.1 billion, giving it significant earnings visibility.

To date, it has bought three pieces of prime land with combined gross development value of RM712 million.

Currently, the group has a total of 26 projects in the Klang Valley, Penang and Johor Baru, of which five have been completed, 11 ongoing and ten new projects in the pipeline.

By Business Times

RHB Cap takes control of Positive Properties

RHB Capital Bhd is taking control of Positive Properties Sdn Bhd, which owns a 0.51ha freehold site along Jalan Tun Razak, Kuala Lumpur, for future development.

The banking group plans to house all of its operations at the same location for better efficiency.

RHB Capital has signed a deal to buy half of Positive Properties for RM35 million from Bedford Land Sdn Bhd, making the former its wholly-owned unit.

By Business Times

Wednesday, May 26, 2010

CapitaMalls to expand in Malaysia

CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones

Singapore's CapitaMalls Asia Ltd is keen to expand in Malaysia and plans to have a property trust in the future is still on the drawing board.

CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones, said its head for Malaysia Sharon Lim.

"Malaysia is a key market for us. We don't think we will stop at three malls," Lim said at a press briefing in Kuala Lumpur yesterday.

In Malaysia, CapitaMalls owns and operates three shopping complexes - Sungei Wang Plaza in Kuala Lumpur, The Mines in Seri Kembangan Selangor and Gurney Plaza in Penang.

An ideal portfolio is a mix of both existing properties and assets that it builds on its own. In Malaysia, the three malls provide a total nett lettable area of 1.9 million sq ft.

When asked about plans to develop a mall in I-City owned by I-Berhad as previously reported , Lim said "we have spoken to them. But we are not ready to announce anything."

As for plans to set up a real estate investment trust in Malaysia, it is still an option.

"It is our stated strategy that ultimately, the aim is to list in the market where we operate in," she added.

She, however, declined to provide any time frame as to when this could happen.

In 2008, it was reported that CapitaLand Ltd may delay the launch of its retail property trust in Malaysia in light of the market condition then.

The three properties in Malaysia were acquired at around RM1.8 billion and have collectively undergone a RM100 million spruce-up, adding retail space and asset enhancement.

Lim added that return on investment for the properties could take anything between 10 to 15 years.

Meanwhile, on the performance of the three malls, Lim expects a 5 per cent improvement over an earnings before interest and tax (EBIT) in the current financial year ending December 31 2010, similar to the anticipated growth in the Malaysian economy.

However, she did not discount the fact that growth for the year could be more.

The three malls posted an EBIT of S$50 million (RM118.5 million) last year and was the third best performing market for CapitalMalls after Singapore and China. CapitaMalls also operates in India and Japan.

Since its entry into Malaysia in end-2007, it has seen an improvement in net lettable area of 4.5 per cent to 1.87 million sq ft while retail rates have inched up 18.5 per cent.

The occupancy at all three malls are virtually full compared with the national average occupancy of Malaysian malls of some 75 per cent.

By Business Times

Major firms keen to redevelop Pusat Bandar Damansara

Big names such as Sime Darby Bhd is said to be among the companies interested in the redevelopment of Pusat Bandar Damansara in Kuala Lumpur.

Johor Corp (JCorp) chief executive officer Tan Sri Muhammad Ali Hashim said several companies have shown interest in the project.

"A number of companies including Sime Darby and Malton Bhd are said to be among the interested parties, but who gets it depends on who gives the best price," he said, noting that no decision has been made.

Johor state investment arm JCorp, through its 27.7 per cent stake in Damansara Realty Bhd, owns nine of the commercial blocks that make up Pusat Bandar Damansara.

Built in 1981, Pusat Bandar Damansara - also known as the Damansara Town Centre - plays host to a handful of corporate headquarters as well as government organisations, including the Ministry of Housing and Local Government and the Department of Immigration Malaysia.
"It is obvious that something needs to be done on the property and unlock its true value," Muhammad Ali told Business Times in Bangi, Selangor, yesterday.

He earlier gave a talk titled "Today's Business World" at the National Conference - CEO's Mind: Today's Talk for Tomorrow's Walk.

He said JCorp will either sell its property to a third party or develop it on its own to create wealth for the group.

A recent news report quoting sources said Malton would refurbish parts of the 28-year-old complex owned by JCorp.

The job, said to be valued at RM700 million, could also involve demolishing certain portions of the old structure to make way for a new development.

Additionally, the project which is expected to be undertaken over the next five years may require Malton to develop a plot of land adjacent to the complex.

By Business Times

IGB urged not to include The Gardens Mall in REIT plan

PETALING JAYA: IGB Corp Bhd, which has in the past two to three years expressed an interest in restructuring the company’s assets into a real estate investment trust (REIT), may find it more worthwhile not to inject The Gardens Mall into the trust.

An analyst with a foreign investment bank said The Gardens Mall lacked the financial track record for a listing as it had only been operational for about three years.

“The Gardens Mall with the lack of a track record will lower the valuation of the REIT,” the analyst said.

He said management might be more interested in a REIT listing now compared with three years ago as it could have come to terms with the valuation of the properties under IGB. “Three years ago it was not very happy with the valuation but I suppose it has come to accept the market’s valuation so it’s more willing to list now,” he added.

On Monday, KrisAssets Holdings Bhd group managing director Robert Tan said following the company’s AGM that the company, which owns Mid Valley Megamall and is in turn about 75%-owned by IGB, was looking to list its properties in the 50-acre Mid Valley City into a REIT.

However, he said, The Gardens Mall was still not ready to be injected into KrisAssets although the mall was doing well since its opening in 2007.

Meanwhile, Standard & Poor’s Malaysia Sdn Bhd senior analyst Alexander Chia said in an email reply that the delay in restructuring IGB’s assets into a REIT was due to a drastic drop in market value of REITs in 2008 and early 2009 with poor market sentiment for REIT listing another obstacle.

He said the impending listing of Sunway REIT with an estimated asset value of RM3.7bil would make a difference to the staid REIT market, which had often been viewed as unexciting.

Chia added that the large and diversified portfolio of property investments of the Sunway REIT would help to attract more institutional investors’ interest and enhance liquidity of the REIT market.

By The Star

IGB to expand hospitality division

Property developer IGB Corporation Bhd is looking to aggressively expand its hospitality brand locally and abroad this year.

Group Managing Director Robert Tan Chung Meng also said the group has changed its focus from property development to property investment, due to the strong recurring income.

"We are reviewing several proposals and are in discussions for possible hotel projects in countries such as Japan, China, as well as the Indochina market," he told reporters after the company's annual general meeting on Wednesday.

Tan said, the company would be opening its three-star, St Giles Hotel Makati in Manila, in three weeks time. The hotel has more than 500 rooms.
He highlighted that the cost of the project was more than US$30 million.

With several hotel properties coming on-stream this year,the overall rooms inventory will increase to 5,900, with 4,400 under its management.

The group's pre-tax profit for the financial year ended March 31, 2010 rose to RM58.3 million from RM54.01 million in the same period last year.

However, revenue decreased to RM156.13 million from RM165.5 million previously.

By Bernama

Builders see healthy year for construction industry

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60 billion second stimulus package, Master Builders Association Malaysia (MBAM) said yesterday.

Among projects under the country's stimulus packages include the RM2 billion new low-cost carrier terminal (LCCT) and the RM3 billion LRT extension (two lines) in the Klang Valley.

"These projects will support the construction industry for the next two quarters. After that, we will see how the 10th Malaysia Plan (is working) as the effects will be seen by year end and next year," MBAM president Datuk Ng Kee Leen said.

The construction sector saw a growth of 8.5 per cent in the first quarter of this year.
Ng was speaking to reporters after the launch of MBAM Annual Safety Conference 2010, in Kuala Lumpur yesterday. The event was officiated by Deputy Minister of Human Resources Senator Datuk Maznah Mazlan.

On the expectations of the 10th Malaysia Plan, which is set to be launched on June 10, Ng said it should be positive with many projects planned to be rolled out especially with the government's focus on public private investment.

"These partnerships will work well and the results will be encouraging," he said.

Ng said MBAM also had a dialogue with the Public Private Partnership Unit (3PU) to work out incentives that would encourage local and foreign investments in the construction sector.

The unit, which comes under the Prime Minister's Department, is the core agency responsible for coordinating the privatisation and public-private partnership (PPP) projects, and which can be given injection from the facilitation fund.

Ng said MBAM has also suggested many measures to the government in order to improve the efficiency and sustainability of the construction industry.

Among them are upgrading workers' skills, importing skilled foreign workers, as well as mechanisation of the construction industry by relooking at building new heavy machinery equipment.

"Although there has been some improvements in the import of machineries and equipment, the duty is still high and it is hoped that the Ministry of International Trade and Industry will relook the duty rates," Ng said.

He said it was important to relook the duty rates in order to encourage more players to use new equipment which are efficient, environment-friendly and with better productivity and more safety features.

By Bernama

Tuesday, May 25, 2010

IGB may spin off assets into 3 REITs

IGB Corp Bhd is mulling over spinning off its assets into three separate real estate investment trusts (REITs) comprising its retail, hotel and commercial components, its top executive said.

Group managing director Robert Tan Chung Meng said that should this plan take off, this could "potentially be the biggest REIT in Malaysia".

Currently, the planned REIT by the Sunway City Bhd at an estimated RM3 billion to RM4 billion is said to be the largest in Malaysia.

Should IGB's plans take off, it could also create history by being the first group to spin off three REITs.
Tan said that it was considering a REIT proposal given that the tax regime has become more favourable.

"Before, we were not too keen to do a REIT. Recently, they changed the tax rules ... now we are seriously contemplating it. We want to unlock the value," he told reporters at a press conference after KrisAssets Holdings Bhd's AGM.

"We prefer to be more focused," Tan said, adding that it could spin off three separate REITs for retail, hotel and commercial/ office space instead of putting several different components into a single REIT instrument.

"If we spin off all three, it's going to be huge," he said.

Tan said that timing of the REIT would depend on market conditions as Malaysia's REIT sector is still considered to be in its infancy.

IGB also owns several hotel properties, including the Cititel hotel chain, Micasa All Suites, The Gardens Hotel, The Boulevard Hotel and the Pangkor Island Beach Resort.

By Business Times

Sunway woos REIT cornerstone investors

KUALA LUMPUR: Malaysia's Sunway City may place out about a fifth of its planned initial public offering (IPO) of a real estate investment trust (REIT) to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said.

The country's sixth biggest property company by market value is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around $500 million, the sources said.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia's largest when it is listed in the third quarter of this year.

Sunway's planned REIT offering has received positive response from investors so far due to its size, steady income source and good growth prospects, a source said.

“This is something significant that investors would not want to miss. The interest is definitely there, the question is pricing,” said the source.

The Sunway REIT will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said earlier this month.

“They are talking to seven funds, which consist of insurance funds, unit trust funds, governmentlinked investment companies, and a few pension funds,” said a second source.

Sunway is looking to place out about one fifth of the offering to cornerstone investors, one of the sources said.

Cornerstone investors normally commit to buy shares before a public listing and promise to hold them until a later date.

Sunway City declined to comment.

The issue price of the Sunway REIT will be determined in a bookbuilding process.

Earlier this month, Sunway City said it would receive RM2.7bil ringgit in cash and about 1.0 billion units in the REIT for the eight properties it will inject into the unit.

The properties, comprise of shopping malls, office towers, and hotels, have a combined market value of about RM3.7bil.

Sunway City Group, controlled by businessman Tan Sri Jeffery Cheah, will own about 38% of Sunway REIT after the listing, which the company said might be completed in mid-July.

By Reuters

Monday, May 24, 2010

Iskandar allots 200ha for wellness township

SINGAPORE: Iskandar Malaysia will parcel out about 200 hectares (500 acres) of land for the proposed joint iconic wellness township project between Malaysia and Singapore.

Malaysia’s Khazanah Nasional Bhd and Singapore’s Temasek Holding Ltd will form a 50-50 joint venture company to undertake the development of the project with the participation of private sectors from both countries.

This was announced by Prime Minister Datuk Seri Najib Tun Razak after meeting Singapore Prime Minister Lee Hsien Loong during a leaders’ retreat at Shangri-La Hotel here today.

Today’s announcement is the latest tangible development after the idea for the project was mooted during Najib’s official visit to Singapore following his appointment as prime minister early last year.
In their joint press conference, both Najib and Lee reiterated their support for the “live work play” wellness township concept proposed by the Joint Ministerial Committee on Iskandar Malaysia (JMC) which would offer holistic wellness services and facilities.

Both leaders hoped to launch the project within a year.
The township will be designed to be vibrant, culturally distinctive, yet socially harmonious and environmentally friendly.

A unique feature of the project will be the encapsulation of “wellness” within activities throughout the township, alongside the integration of traditional healing methods, complementary alternative medicine and modern treatments.

By Bernama

Talam hopes to get out of PN17

PETALING JAYA: Talam Corp Bhd is hopeful of getting out of the Practice Note 17 (PN17) list if auditors give it a clean bill of health.

Bursa Malaysia has requested for more information after the company made a submission to be uplifted from the PN17 list on April 30.

Talam and its adviser, RHB Investment Bank Bhd, are still collating the necessary documents. This will include the audited accounts for financial year ended Jan 31, 2010, which is expected to be out this week.

The company, which has been on the PN17 list since Sept 1, 2006, has taken longer than expected to exit from the troubled companies list because of prolonged negotiations on assets disposal. It plans to dispose land and buildings to pay off its outstanding loans.

Once the country’s largest builder of low- and low-medium cost houses, Talam slipped into the PN17 list after its auditors failed to provide an opinion on its results for financial year ended Jan 31, 2006. The company had also defaulted on term loans and bond obligations.

Its debt restructuring exercise involves three parts – a capital reduction and a share split, the issuance of new convertible instruments to address certain defaulted debts, and a proposed asset divestment programme.

As at Jan 31, 2009, Talam’s debts stood at some RM666.57mil, of which 78%, or RM522.46mil, are sukuk, Al Bai’ Bithaman Ajil Islamic debt securities and bridging loans.

Talam has about 2,400 ha of landbank, which is mostly located in Selangor. It is understood that the company plans to dispose about 1,214 ha, which is about half of its total landbank. The largest tract of land to be disposed would be the company’s Bandar Bukit Beruntung development.

To date, Talam has divested more than RM800mil of its properties, mainly land, including about RM670mil that was committed to be sold to Menteri Besar Selangor Inc to settle debts totalling RM392mil. The balance would be used to repay debts due to financial institutions.

Most of the debts stemmed from joint ventures on land belonging to state agencies, such as subsidiaries of Kumpulan Hartanah Selangor Bhd, Permodalan Negeri Selangor Bhd and Pendidikan YS Sdn Bhd.

Talam partially completed its debt restructuring in July last year and returned to the black in financial year ended Jan 31, 2009.

Even if the company settles all its debts and is uplifted from PN17 status, it still has to redeem its image following stalled projects that have caused many house buyers to be disgruntled.

The company has 8,000 properties in various stages of completion and has roped in IJM Construction Sdn Bhd as the principal contractor for its stalled projects.

The projects are Kinrara Section 3, Ukay Perdana, Lagoon Perdana, Putra Perdana, Lestari Puchong, Saujana Puchong, Saujana Putra, Lestari Permasi and Jalil Heights.

A Talam official said 5,000 units would be handed over with vacant possession to the buyers in the next two months. IJM has completed the Taman Puncak Jalil project with over 3,000 houses delivered. While IJM does not have a direct stake in Talam, it owns 25% of Kumpulan Europlus Bhd (KEuro), which in turn has a 24% stake in Talam.

A KEuro spokesman said the company intends to retain majority interest in Talam eventhough KEuro had pared down its stake in Talam from more than 40% about a year ago.

Talam’s management plans to turn around the company and move on with its project development plans. It is targeting to achieve at least 90% completion rate this year for its stalled projects.

It will concentrate on its joint-venture projects such as Sierra Ukay, Sierra Selayang and Ukay Perdana, as well as disposing its converted industrial and commercial land. These projects have a combined gross development value of more than RM1.4bil.

By The Star

Saturday, May 22, 2010

Robust outlook for Sungai Besi

Sungai Besi is well connected and easily accessible via numerous highways

Sungai Besi is looking to be the next property development “hotspot” for local developers, and to a certain extent, foreign investors, according to industry players and experts.

According to YTL Land & Development Bhd project director Safian Ibrahim, the Sungai Besi area holds much potential as the next “new thriving address” in Kuala Lumpur due to its strategic location.

He notes that it is very well connected and easily accessible via numerous highways as well as railways.

“What this means is that Sungai Besi has already answered three of the main criteria of homeowners - location, location, location. The only other question that remains is what type of property they can invest in and its subsequent potential returns.

“More people are realising how much the area has to offer and we expect its future to be exceptionally bright,” Safian says.

Ho Wen Yan ... 'Sungai Besi will become a hotspot, akin to a golden triangle.'

Hua Yang Bhd chief operating officer Ho Wen Yan also believes the area is rapidly developing into an ideal location for property development.

“We foresee that within five years, Sungai Besi will become a hotspot, akin to a golden triangle location with its multiple accessibility channels and convenient public amenities. Because of escalating property prices, Sungai Besi and Seri Kembangan are becoming suitable locations, as it is well connected via major highways,” he says.

Property developer Hua Yang will be launching its One South mixed development project in Sungai Besi this year. The RM750mil project features residential, commercial and retail components.

The development will be carried out in five phases. The first phase will consist of retail outlets and offices. Phases two, three and four will consist of serviced apartments while the fifth phase will consist of offices.

For its One South development, Ho says the company is targeting small and medium-scale enterprises and office tenants that were looking to upgrade to a newer working environment and lifestyle.

He also says the company has been looking for a suitable piece of land to develop in the past three years and has identified Sungai Besi as a suitable location.

Ho says more people are choosing to live outside the KL city and Petaling Jaya area due to escalating property prices and congestion, making Sungai Besi and Seri Kembangan ideal.

“To make property purchases more accessible, more developments choices need to be given to the surrounding and existing residents in that area, as they look to upgrade their lifestyle.

“Waiting for the Government to upgrade infrastructure such as roads and public transport may take time and private sector-led projects (need to) strive to provide what the market needs.

Safian meanwhile says the biggest challenge in developing projects in Sungai Besi is to find a way to bring value to the area while meeting the needs of homeowners.”

YTL Land has been present there since 2005, when it launched its Lake Fields project, a joint venture with Employees Provident Fund, comprising a 70ha residential development that fronts a 6ha lake.

“The project was initially earmarked for high-rise condominiums, but from our market research, we noticed that the majority of homes in the area were already made up of condominiums like in Desa Petaling and Seri Kembangan, and matured neighbourhoods like Kuchai Lama and OUG.

“So we decided to fill this gap in the market with landed homes set in a modern, landscaped environment. Coupled with the advantages of having a strategic location, public transportation and surrounding amenities, we decided that the concept for Lake Fields is all about spacious, convenient, modern living.

According to Safian, the first phase of homes, Meadows & Glades, which was launched in February 2005, was a tremendous success.

“All 514 units of the three-storey link homes were snapped up overnight demonstrating homeowners' need for spacious homes,” he says.

The development of the Sg Besi Royal Malaysian Air Force (RMAF) air base is another positive factor.

The Government is redeveloping that 162ha into an integrated commercial hub.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong believes this would present an opportunity for property development in that location.

“The Government has the avenue to make Sungai Besi a destination for property investment,” he says.

Richard Chan says he is hopeful it will be developed with an environmental emphasis.

Malaysian Association for Shopping and Highrise Complex Management advisor Richard Chan is hopeful that the area will be developed with an environmental emphasis.

“There is simply a lack of green within the Klang Valley area. It's so congested and concrete-looking, it doesn't look nice!” He says part of the land could be turned into a recreational or fruit park.

“We have good weather with an abundance of sunshine and rain. Fruit trees will thrive, so why not?”

Ho believes the re-development of RMAF base will be the catalyst for the growth of the southern part of the Klang Valley.

“A commercial centre is ideal as the site is surrounded by mature residential areas such as Cheras, Bukit Jalil, Serdang and Seri Kembangan. Furthermore, all the major infrastructure is in place, such as highways and public transport.

“There will be a definite spillover effect. We expect aggressive growth in that area,” he says.

Safian believes it would raise the profile of Sungai Besi significantly.

“Sungai Besi has been under the radar of property investors, when in fact, it has so much to offer as the next future address of the city.”

By The Star

Need to be wary of brewing asset bubble

These days a mere few months will make a lot of difference and this is obvious even in the property market.

The stronger economic rebound in the region is once again threatening asset bubbles in various Asian cities.

One of the obvious reasons for the jump in residential property prices is the big movement of people around the globe these days. Foreigners are making up a big group of the buyers in major Asian cities from Shanghai to Singapore.

It will be just a matter of time before the trend catches up in the other cities, including Kuala Lumpur.

Penang's popularity as the choice for foreign participants of Malaysia, My Second Home programme is already seeing a big jump in foreign buying interest in its property market.

The high savings rate among Asians and their yearn for property as an investment asset is also another factor.

The under-performing equity markets and low bank savings rates are also not providing people with spare cash to invest with other better viable choice.

To the layman, creeping property prices mean more expensive homes and higher costs of living. The lower-income group will be the most hard hit by fly-away property prices.

To curb overheating, China and Singapore have already imposed higher downpayment requirements for mortgages.

There is a high correlation between property prices and liquidity, and to avoid excess liquidity in the system, their governments have no choice but to tighten credit lending and raise interest rates.

These measures will also aid in stabilising inflation.

China has recently raised downpayment for first-time homebuyers to 30% (from 20% previously), while second-home borrowers have to pay a 50% downpayment. To curb speculative activities, it has also re-imposed the 5.5% transaction tax for properties held for less than five years.

Malaysia also has to be wary of the possibility of an asset bubble brewing although the Government had also acted by imposing a 5% real properties gains tax.

Given the strong surge in property demand in the last six months or so, this has not acted as a big deterrent to curb buying and selling activities.

As developers are still continuing with their housing packages and allowing low downpayment of between 5% and 10%, entry cost is still very low for property buyers.

Moreover, they will only have to start servicing their loan only upon vacant possession of the property.

While those who have built up a comfortable portfolio of property assets will benefit from the value appreciation of their assets, many Malaysians are finding it hard to buy reasonably-priced landed property these days.

Kuala Lumpur and Klang Valley folks are certainly among those feeling the pinch.

Penangites have also seen one of the more pronounced property price increases as land on the island is really getting scarce and the number of landed housing projects is getting fewer.

New condominiums there are averaging RM600 to RM700 per sq ft, semi-detached houses and even terraced houses with some land are priced at more than RM1mil while bungalows are from RM3.5mil to RM4mil.

No wonder many island folks have no choice but to opt for medium-cost apartments.

The liberalisation of the local property market has opened up a bigger catchment customer base and created more opportunities for industry players.

In the process, there have been many new developments and project launches that are mostly targeted at the high-end market.

There are fewer affordably-priced properties unless one is prepared to travel as they are mostly located in places further away from the city centres.

To assist those who find private housing way beyond their means, the Government should work towards a holistic and concerted plan to appoint a dedicated agency to undertake the overall planning on the actual need for affordable public housing in the country and have them built in easily-accessible places.

The Singapore model, where all the public housing projects with good community facilities are within a stone's throw from the mass rail transit stations, is a sure winner.

It will overcome the problem faced in the country where many low-cost housing projects are not occupied because they are located in very far-away places that do not have convenient public transport link.

Deputy news editor Angie Ng believes all Malaysians deserve to live in secure, well planned and managed housing estates, whether they are private or public housing.

By The Star

Attractive investments on display at expo

Property hunters and investors can expect another round of exciting properties to be showcased at the upcoming EXPO at the Mid Valley Exhibition Centre until tomorrow.

Organised by Malaysia, the exhibition brings together the hottest local and international properties from India, the Pacific Islands, Bali, the UK and more.

Some 50,000 home buyers and property agents are expected to visit the three-day exhibition that also features property seminars by renowned industry experts.

Whether one is looking for properties in the heart of the city, by the sea or amidst lush greenery, the expo has it all.

Over 100 property developments across Penang, Ipoh, Seremban, Johor and Klang Valley by well known developers such as Gamuda, SP Setia, Mah Sing Group, Mutiara Good Year, Mayland Group, MK Land Group, Dijaya, AP Land and many more will be on display.

Also in the lineup are top developers from Penang like Ivory Properties and Belleview Group while famed UEM Land will be showcasing properties in Johor.

Experts Michael Tan, Juanita Chin, Dr Peter Yee and Milan Doshi are among the speakers who will be presenting talks during the expo.

There will also be topics catering to real estate agents. Tips on selling to investors, closing sales and personal real estate success stories are guaranteed to catch the attention of rookies and veteran agents alike.

“The expo is the perfect opportunity for property hunters to view the latest properties in the market,” Malaysia country manager Ken Tsurumaru said.

The next expo will be held from July 30 to Aug 1 at the Kuala Lumpur Convention Centre (KLCC) and Oct 23 to 24 at Marina Bay Sands in Singapore.

By The Star

AR-REIT in early talks to buy 3 or 4 properties

The manager of AmanahRaya Real Estate Investment Trust (AR-REIT), which plans to increase its asset size to RM1.5 billion within the next two years, is in early talks to buy three to four commercial properties.

The properties, which comprise office buildings and shopping centres, are mainly in the Klang Valley.

"Talks (with the vendor) are at a very preliminary stage. We're hoping to complete the purchase by the middle of next year," said Adenan Md Yusof, chief operating officer of AmanahRaya-Reit Managers Sdn Bhd (ARRM).

AR-REIT has an asset size of about RM1 billion, making it the country's second largest property trust after Starhill REIT.
The property trust yesterday agreed to lease a warehouse complex in Port Klang to Kontena Nasional Bhd, the national container haulier and logistics services provider, for nine years.

The lease will contribute an annual rental of RM2.15 million for the first three years, which is about 3.5 per cent of the total income received by AR-REIT.

"There will be a five per cent step-up rental (after the first three years)," Adenan told reporters after the signing ceremony.

The warehouse is one of the 15 properties managed by ARRM and one of the five industrial properties in the AR-REIT portfolio.

"Kontena has now increased its storage capacity and expanded its services without having to raise funds for construction of new facilities," Kontena's chief executive officer Hood Osman said.

It plans to designate the complex as Kontena Nasional Distribution Centre 11, housing 12 units of single-storey warehouses, offices, cold room and open yard facilities.

Kontena will continue to offer tenancy to the existing tenants at the warehouse complex in the hope that it will also be able to provide to them its logistics services.

The tenants there now include Gudang Damansara, Ikano, Rafsanjan Pistachio Producers, Milawa and Taskar Shipping & Forwarding.

By Business Times

Friday, May 21, 2010

Mah Sing wins at 2010 Cityscape Asia Real Estate Awards

Southbay City, Penang

Mah Sing Group Berhad (Mah Sing) won the prestigious award for Best Developer – Waterfront Development (Future) for its Southbay project in Penang Island at the 2010 Cityscape Asia Real Estate Awards Ceremony in Singapore on May 18.

Southbay is an iconic township located at Batu Maung, Penang Island. The elite township development comprises residential homes and serviced residences, retail and commercial strips, recreational and tourism attractions, hotels and malls, and world-class lifestyle entertainment, shopping and dining districts. The first phase of Southbay City has more than 1,500 registrants thus far.

Mah Sing Group managing director Tan Sri Leong Hoy Kum said, “We are very pleased with this award as it recognises the Group’s firm commitment to excellence. This award marks the Group’s seventh award for the year - the Group was named the Best Brand in the Property Category in The Brand Laureate 2009-2010 Awards; our projects in Klang Valley and Penang Island won four awards at the Asia Pacific International Property Awards 2010; and our plastics division had garnered the 8th Asia Pacific International Honesty Enterprise – Keris Award 2009.

“It is indeed an honour to be recognised for what we do but more importantly it is testament to the talent and passion of our entire organisation, which is committed to delivering innovative concepts, high quality and exceptional service. These awards have not only given us the recognition but also the boost for us to perform better.”

The Cityscape Awards for Real Estate in Asia recognises and rewards excellence and outstanding performance in architecture and design for projects in the region.

By The Star

AmanahRaya-REIT to grow assets to RM1.5b

AmanahRaya-REIT Managers Sdn Bhd is to grow the asset size of the real estate investment trust (REIT) to RM1.5 billion in the next two years, from RM1.002 billion, at present.

The total assets puts AmanahRaya-REIT in second place after Starhill REIT, said Chairman Tan Sri Ahmad Fuzi Abdul Razak.

Meanwhile, the company has embarked on an acquisition trail of commercial properties.

"We are currently in preliminary negotiations to acquire 3 to 4 assets, mainly office buildings and shopping centres," AmanahRaya's Chief Operating Officer Adenan Md Yusof said after a leasing signing ceremony with Kontena Nasional Bhd today.
He said AmanahREITS, which has been accored a global investable grade rating of "BBB-", hoped to conclude some deals by mid-2011.

"AmanahRaya REITS will continue to scout for properties in good locations in order to give the best returns to unit holders," he said.

By Bernama

KEuro seeks to retain majority interest in Talam

PETALING JAYA: Kumpulan Europlus Bhd's (KEuro) recent selldown of a 5.21% stake in Talam Corp Bhd, which reduced its holding in Talam to about 24%, is to raise fund to pay for financial instruments issued by Talam that KEuro has bought from Abrar Discounts Bhd (Abrar).

At an EGM on Nov 4 last year, KEuro shareholders approved the proposed acquisition from Abrar of financial instruments issued by Talam with total par/nominal value of RM423.35mil for a total purchase price of RM125mil.

A KEuro spokesperson said the company was expected to fully settle to Abrar the outstanding sum by this year. “Once we managed to achieve that, we expect the group's shareholding in Talam to creep back to above 30%.

“We have the intention to retain our majority interest in Talam because we see potential in the company when it assumes its business as a township developer in the Klang Valley,” he told StarBiz yesterday.

Talam has been classified under Practice Note 17 (PN17) on Sept 1, 2006, after its auditors failed to provide an opinion on its results for its financial year ended Jan 31, 2006. The company had also defaulted on term loans and bond obligations.

The developer partially completed its debt restructuring in July last year. The exercise was effectively divided into three parts - a capital reduction and a share split, the issuance of new convertible instruments to address certain defaulted debts, and a proposed asset divestment programme.

As at Jan 31, 2009, Talam's debts stood at some RM666.57mil, of which 78% or RM522.46mil are sukuk, Al Bai' Bithaman Ajil Islamic debt securities and bridging loans.

Its proposed regularisation plan has been delayed by prolonged negotiations on assets disposal.

A Talam official said due to the great effort by the management, the company had divested more than RM800mil of its properties, mainly land, including about RM670mil that was committed to be sold to Menteri Besar Selangor Inc to settle its total debts of RM392mil. The balance will be used to repay debts due to financial institutions.

On April 30, Talam made a submission to Bursa Malaysia to have it uplifted from PN17 and Bursa had requested for further furnishing of documents. Talam and its adviser, RHB Investment Bank Bhd, are collating the necessary documents as requested by Bursa and expect this to be done by early June.

The official said once the documents were in place, the company was hopeful of getting Bursa's approval soon. “There are plans to turn around Talam and allow the company to start on a clean slate to move on with its project development plans.”

He said the company's audited results were expected to be announced next week.

By the Star

Thursday, May 20, 2010

Mah Sing wins award for its Southbay project

PENANG: MAH SING GROUP BHD bagged an award as best developer in the future waterfront development for its Southbay project in Penang Island at the 2010 Cityscape Asia Real Estate Awards Ceremony in Singapore on Tuesday, May 18.

The first phase of the billion-ringgit township development has been opened for registration with more than 1,500 registrants thus far, said the company in a statement on Thursday.

Southbay is located at Batu Maung, Penang Island. The development comprises residential, commercial and tourist attractions, with shopping and dining districts.

Group managing director Tan Sri Leong Hoy Kum said Mah Sing was pleased with the award, which was its seventh for the year.

Cityscape is the world's largest business-to-business real estate event brand. Mah Sing has 16 years of experience in property development, with 26 residential, commercial and industrial projects under its belt.

By The EDGE Malaysia

Kurnia Setia plans RM2b township

PAHANG-BASED oil palm plantation group Kurnia Setia Bhd (KSB) plans to invest up to RM2 billion over the next 15 years to develop an integrated township called Kota Sri Ahmad Shah (KotaSAS) in Kuantan, Pahang.

The group's maiden venture into property development will be via its property arm, KotaSAS Sdn Bhd.

KSB director Tengku Datuk Zubir Tengku Datuk Ubaidillah said the group was following in the footsteps of other plantation companies like IOI and Sime Darby, which have expanded into property development by developing their former plantation land into townships and housing estates.

"We are always looking for opportunities, although our plantation land are mainly located in remote areas. But if the areas surrounding the land have potential for property development like that of KotaSAS, we will do so," Zubir said.
Nevertheless, plantation of oil palm will remain its core business. KSB has some 14,000ha of oil palm plantations in Pahang.

"We will continue to look for other opportunities, but for now we will concentrate on developing KotaSAS since it is a big project covering a huge tract of land.

"We plan to build 10,000 units of residential and commercial units and the development will be carried out in several phases spanning 15 years," said Zubir, who also serves as KotaSAS executive director.

The proposed township is strategically located near Istana Abdul Aziz and is accessible via the East Coast Highway and the Kuantan-Kemaman bypass. It features residential, commercial, institutional and recreational components.

In line with its aim of creating a signature township with a premier location, Zubir said it will be divided into four precints with wide roads, pavements, and plenty of landscape, green open space and buffer zones.

The project will also be a low density development, with six units per acre compared with the average housing density of between 12 and 16 units per acre.

Amenities include a recreational lake, park, five schools, a public field and facitilies for polo and horse riding and go-cart activities, which will be opened to the public. The township will also have patrols by security guards.

Prices of units will be between RM200,000 and RM400,000. The first phase covering 98ha for 320 units of bungalows, semi-detached and linked houses is expected to be completed by early 2012.

A sales carnival will be held on May 28 and 29 2010 at the site.

By Business Times

Wednesday, May 19, 2010

Faber eyes RM1b revenue from overseas this year

INTEGRATED facilities management (IFM) and property developer Faber Group Bhd hopes its revenue from overseas will reach RM1 billion this year, by expanding on its non-concession income base.

The group will continue to focus on its businesses in the UAE and India to expand its non-concession income base, especially in the areas of bio-medical engineering services and facilities engineering services.

Managing director Adnan Mohammad said Faber has recently managed to secure a second contract extension for maintenance of low-cost houses in Abu Dhabi. The first year of the contract is valued at RM62 million. It has also bid for a similar tender in Abu Dhabi. In India it has bid for a RM10 million-a-year contract to service seven Fortis Hospitals.

"We have set a KPI (key performance index) of between 12 per cent and 15 per cent increase in revenue this year, pushed by both IFM and property development activities," he said after the group's annual general meeting in Kuala Lumpur yesterday.
In the financial year ended December 31 2009, Faber recorded a 21.8 per cent rise in revenue to RM805.3 million. Of this, 85 per cent was from IFM and 15 per cent from property development. Its net profit last year was RM106 million.

With a cash flow of about RM300 million in hand, the group is looking to widen its landbank and explore opportunities for potential mergers and acquisitions to expand its IFM business.

Faber plans to launch three property projects this year, with a total value of RM500 million. The residential developments are all located in the Klang Valley. It has a total landbank of 15.39ha, valued at RM850 million.

On the home front, its wholly-owned subsidiary Faber Medi-Serve Sdn Bhd has submitted a proposal to the Ministry of Health to renew its existing 15-year government concession to provide hospital support service.

The current concession covers 79 government hospitals in Malaysia located in Perak, Penang, Kedah, Perlis, Sabah and Sarawak and will expire in October 2011.

Commenting on the possible merger between Faber Medi-Serve and Pantai Holdings Bhd's Pantai Medivest Sdn Bhd, Adnan said: "If the option is there, we will look into it."

By Business Times

Tuesday, May 18, 2010

CL Integrated takes on high-end job

Property developer CL Integrated Resources Sdn Bhd plans to launch by next year a high-end gated residential project worth RM500 million in Seksyen U10 in Shah Alam, Selangor.

Its founder and executive director Chu Bak Teck said the 50-acre development will comprise 400 units of hillside bungalows, semidetached houses and villas, priced from RM1 million.

Chu said CL Integrated has submitted the layout plans and is awaiting the authority's approval.

"If all goes well, we hope to start construction by mid-2011 and launch the project six months later," he told Business Times in an interview.

CL Integrated is owned by four individuals, who have more than 10 years of experience each in real estate development.

The other three directors are managing director Kenneth Lim, John Lam Joo Onn and chairman Datuk Pua Kim An.

The company's existing project is 1 Sentul Condominium in Kuala Lumpur, which is being developed in a 50:50 joint venture with Zalam Builder Sdn Bhd.

Some 95 per cent of the 284 units, each priced from RM317,800 to RM903,800, have been sold. The project is expected to be completed by early next year.

CL Integrated's latest development is PJ21 on 2 acres of freehold land in SS3, Petaling Jaya, comprising 21 blocks of four and six storey shop offices.

This is a joint development with low-profile Jalur Rimbun group of companies.

Chu said 80 per cent of the blocks were taken up less than two months after the soft launch.

Buyers were mainly local businessmen buying for their own use and for investment.

He expects the remaining blocks to be sold by July.

The four-storey blocks are priced from RM2.88 million each, which the six-storey is selling at more than RM5.95 million per unit.

"This is evidence that the property market is improving. We are optimistic on the outlook and are looking for more land to buy," Chu said.

Chu said construction on PJ21 is expected to start next month and the project will be completed by December next year.

By Business Times (by Sharen Kaur)

Iskandar to offer RM1b worth of contracts

Iskandar Investment Bhd, which oversees a special development zone in Malaysia’s southern state of Johor, will offer RM1 billion worth of contracts for retail outlets, hotels and office space by the end of this year, an executive said.

Financing will come “substantially” from equity from partners Chief Executive Officer Arlida Ariff said in an interview today. The rest would be through bank borrowings, she said.

Malaysia’s government launched the Iskandar development in November 2006 with the hope of attracting 382 billion ringgit of investment into the area in two decades.

State-controlled Iskandar Investment will tender out another six packages of contracts worth 250 million by the end of this month for the construction of schools, a stadium and initial administrative buildings for a Legoland theme park, Arlida said.

Iskandar Investment has seen a “marked increase” in interest from foreign investors from Southeast Asia as the global economy recovers, Arlida said. In particular, there was been growing interest out of neighboring Singapore, she said.

“For the balance of this year, we will be going out quite aggressively into the region, focusing mainly on Asia,” said Arlida. “We will be travelling to China, South Korea and possibly Indonesia in the next three months” to attract investors and speak to people who’ve shown interest in the past, she said.

By Bloomberg

Many developers yet to go green

Many developers have yet to seriously consider the potential of sustainable development via the use of green technologies, a senior minister said.

Housing and Local Government Minister Datuk Seri Kong Cho Ha, however, noted that several industry players had taken up the green challenge.

"Several of the industry's players are well on their way to creating the first batch of sustainable development in the country," Kong said.

He spoke to reporters after opening "The Green Solutions for Property Development 2010" conference in Kuala Lumpur yesterday.

It was organised by the Eastern Regional Organisation for Planning and Human Settlement (EAROPH Malaysia) and the Real Estate and Housing Developers' Association Malaysia (Rehda).
Kong said developers had yet to come to terms with balancing their bottomline with the incremental costs that comes with developing a green project.

To promote the use of green technologies in buildings, the ministry is reviewing the Uniform Building By-Laws.

"Some green technologies will be considered from the practical aspects to be incorporated into it in order to create a more sustainable living environment for homeowners, their families and the community at large," he said.

Kong said 2009 was a watershed year for green in Malaysia, with the introduction of various initiatives and incentives.

This included the launch in May the Green Building Index (GBI), an accreditation program with specific rating tools to encourage green building development.

The GBI rating tool is seen as a major undertaking as it seeks a good energy-efficient design, indoor environmental quality, site planning and management, materials, resources, water efficiency and innovation.

By Business Times

Bolton gets RM195m loan for expansion

Property developer Bolton Bhd has signed a RM195 million syndicated banking facility with three banks to fund its expansion plan over the next three to five years.

The lenders -- Affin Investment Bank Bhd, Affin Bank Bhd and OCBC Bank (Malaysia) Bhd, have committed to provide RM170 million of term loan facility and RM25 million of revolving credit facility.

Bolton executive chairman, Datuk Azman Yahya, said the funds would help in the acquisition of strategic land bank, part finance its development cost and finance the working capital requirements of the group.

Currently, the group's gearing ratio is still low at 0.58 times even with the full utilisation of the facility, he said in a statement here today.
Azman said in line with its plan to replenish their land bank, half of the approved facility will be use to acquire land, particularly in the Klang Valley and Penang.

Bolton will be launching three new luxury condominium projects in the Klang Valley and a mixed commercial development project in Puchong by end of this year with a total gross development value of more than RM1 billion.

By Bernama

RM11mil in sales at property fair

The recently concluded state-level Malaysia Property Expo (MAPEX) organised by the Seremban chapter of the Real Estate and Housing Developers’ Association (Rehda) netted RM11mil in sales over the three-day fair.

Some 20 developers showcased 1,432 properties including single and double-storey terraces, semi-Ds, shop-offices and bungalow lots during the expo held at the Seremban Parade Shopping Centre.

The annual property expo is a one-stop centre aimed at providing house-buyers the convenience of selecting their properties of choice under one roof.

Full info: Park Properties managing director Datuk Gan Boon Khuay (left) telling Siow about his project at the Mapex fair in Seremban recently. Looking on is Soam (centre).

Rehda Negri Sembilan chairman Datuk Soam Heng Choon said the expo provided a platform for investors to grab choice properties in good locations at unbeatable deals.

“With the improving economic situation, now is indeed a good time for purchasing your ideal home or office before prices start going up.

“We are also mindful in ensuring our developments are environmentally sustainable and will be encouraging our members to construct more energy-efficient and environmentally-friendly homes,” he said adding that this year’s Mapex theme — Go Green — reflected the association’s commitment to promoting green living.

Soam said developers were already planning sustainable development projects with the use of green building materials and through incorporating green features such as water conservation systems (rain water harvesting).

“Homes today incorporate a green living concept with beautifully landscaped parks, with the use of reusable, recyclable or biodegradeable building materials to reduce waste and pollution and energy-efficient lighting systems to reduce long term utility costs,” he said.

State housing, local government, new villages and public transportation committee chairman Datuk Siow Chen Pin commended the association for successfully organising the biennial expo.

He also emphasised the building of quality homes and encouraged developers to incorporate green features in their projects.

“With spacious homes, good amenities and public facilities, I think Seremban is also an ideal place for people working in the Klang Valley to settle down,” he said.

The participating developers offered various incentives including cash rebates and visitors who bought properties at the fair also had the opportunity to participate in a lucky draw.

The expo also had the support of co-sponsors Nippon Paint and Monier.

By The Star

KLCC Property Holdings posts higher profit

PETALING JAYA: KLCC Property Holdings Bhd had posted a higher net profit of RM467.2mil for the fourth quarter ending March 31, 2010 against RM362.5mil it posted on the same quarter last year due to higher valuation surplus of its properties.

It told Bursa Malaysia yesterday that the higher surplus of RM249.6mil was from the value adjustment of its investment properties of RM758mil as compared to RM508.4mil in the preceding year.

The group had declared a final dividend of 6 sen per share in the last quarter, to bring the total payout for the year to 11 sen per share.

For the full year, net profit was RM647.6mil or 69.33sen per share, versus RM535.65mil or 57.35sen per share.

The group's revenue for the financial year ending March 31, 2010 was RM881.3mil, reflected an increase of RM14.9mil or 2% as compared to RM866.5mil it posted last year.

The profit before taxation of RM1.292bil (inclusive of fair value adjustment) in the current year represent an improvement of RM259.3mil or 25% as compared with RM1.032bil for the year ended March 31, 2009, it said.

It added that the increase in revenue was mainly attributed to better rental income (in particular Menara ExxonMobil and Dayabumi) and the retail mall, despite a reduction in revenue from the hotel operations.

The improved profit before taxation was also attributed to lower operating and finance costs during the year.

By The Star

Sunway Geo bags job

SUNWAY Holdings Bhd said its unit Sunway Geotechnics (M) Sdn Bhd has won a RM88 million deal from Sunway City Bhd to partly build an office tower in Bandar Sunway, Selangor.

Sunway Geo will do the earthworks, piling and substructure works for a one- block 24-storey office tower that has a six-storey basement car park, Sunway said in a statement to Bursa Malaysia.

Work is due to be completed on November 14 2011, with a construction period of 18 months.

By Business Times

Monday, May 17, 2010

China property sector curbs leave buyers in limbo

BEIJING: Accountant Jiao Yurong carefully organised her family's finances to put her son through university in the US.

Now that he has the coveted degree, she has been saving to buy him a flat.

But soaring property prices in China - and a series of moves by the government to rein them in - are throwing a spanner in the 50-year-old mother's plans, and she admits she does not know how to proceed.

"Just when we had saved enough for a down payment, prices surged," Jiao, a Beijing resident, said. "The policy is so unstable... I'm so confused."
Jiao is not alone. Prospective home buyers are reeling from a series of measures put in place by the Chinese government to curb rocketing prices amid persistent fears about a ballooning bubble in the real estate sector.

Authorities have tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down payments for second homes.

The Beijing city government has gone even further, limiting families to one new apartment purchase and barring people who have not paid taxes or made social security contributions in the city for one year from getting home loans.

"Sellers have started to lower the prices," said Hu Jinghui, vice general manager of 5i5j, a real estate agency chain that has around 600 outlets in eight cities across China. "But the buyers are still waiting."

At the Beijing Real Estate Expo last month, the average price of a new apartment in the city was around 21,164 yuan (1 yuan = RM0.47) per sq m, double that of last year, state media said.

That means a 90 sq m apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 26,738 yuan in 2009.

Since the capital put in place the austerity measures on April 30, prices have dropped an average 10-15 per cent, with the number of home purchases slumping by 50 per cent, according to Hu.

In 2008, China also introduced a range of policies to dampen the market frenzy, but a government stimulus package to prop up the economy during the financial crisis quickly negated any progress made.

The new measures so far seemed to have had a limited effect, as official data showed last Tuesday that prices in major Chinese cities rose 12.8 per cent in April, a double-digit rise for the third straight month.

Experts also said the rules contained apparent loopholes that could be exploited by speculators.

China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities.

And higher down payments will have little impact on speculators who mostly pay the full value of properties in cash.


Iskandar to tender out RM250m deals

ISKANDAR Investment Bhd (IIB), a government company tasked to build catalytic projects in Iskandar Malaysia in Johor, will tender out another six packages of contracts worth a combined RM250 million by the end of this month.

The contracts include jobs to build two schools, a stadium and college buildings. It was earlier reported that IIB will give out RM2 billion worth of contracts this year.

President and chief executive officer Arlida Ariff said the company has awarded over RM3 billion worth of construction jobs since its inception four years ago and is continuously stepping up the development pace at Iskandar Malaysia.

"We will announce the contracts by the end of the month. We have moved past the earthwork phase and into construction. Our team is now working on the tender," she told Business Times in an interview.
IIB is also expected to sign with its Dutch counterpart to establish a world-class Maritime University in Iskandar Malaysia soon. It is also in talks with two other universities to set up engineering and hospitality schools in EduCity, the 120ha education enclave in Nusajaya.

Three institutes that have confirmed their presence to establish a school here are UK's Newcastle University of Medicine, British boarding school Marlborough Overseas Ltd and Singapore-group Raffles Education Corp.

"We seriously view education as a key pillar of growth for the region and IIB's long-term objective is to create a global education hub in Iskandar Malaysia," said Arlinda.

The Legoland theme park, which is among the main attractions at Iskandar Malaysia, is on track to be opened in 2012.

Earthworks are underway and IIB has also awarded contracts to rides operators. Construction of the building will start in the third quarter this year.

The RM750 million Legoland Malaysia is the fifth Legoland in the world after the US, Denmark, Germany and Britain. Spanning 28.32ha, the theme park is some 20 minutes from the Second Link and within Medini in Nusajaya, one of five flagship zones of Iskandar Malaysia.

There will also be a four-star business hotel and a resort hotel around Legoland.

Arlinda said the infrastructure at Medini is already on the way and is about 24 per cent completed. The infrastructure works completed include roads, street lighting, traffic lights, sewer, water reticulation and electricity.

Medini is a 920ha international mixed-use urban development, located on prime greenfield land in the heart of Nusajaya. The development is expected to bring in gross development value in excess RM69.6 billion over 15-20 years.

By Business Times

Saturday, May 15, 2010

New gameplan for YTL Land

An artist's impression of YTL Corp's Sandy Island project at Sentosa Cove in Singapore.

YTL Corp Bhd will inject some of its overseas projects into YTL Land & Development Bhd by the year-end to transform the property unit into an international player.

For a start, the group will place its three projects in Singapore - Sandy Island and Kasara villas in Sentosa Cove, and the redevelopment of Westwood Apartments on Orchard Boulevard - under YTL Land.

Currently, these projects are under YTL Singapore Pte Ltd, a wholly-owned unit of YTL Group.

YTL Corp managing director Tan Sri Francis Yeoh says YTL Land will be busy with more projects as the group focused on expanding its presence in Asia.

It will concentrate on building luxurious residences in highly-sought-after destinations that offer unique culture and lifestyle.

Yeoh says YTL Land can tap into YTL Corp's experience in building properties in Phuket, Pangkor, Bali and Sentosa Cove, Singapore.

YTL Corp has a low-density luxurious villa project in Bali, Indonesia, and a big development in Koh Samui, Thailand.

Its hospitality arm YTL Hotels & Properties Sdn Bhd recently acquired Niseko Village, a prime winter and summer destination in Hokkaido, Japan, for six billion yen (RM224mil).

YTL Hotels is also embarking on some overseas projects such as the Swatch Art Peace Hotel in Shanghai; the MUSE Hotel De Luxe in Saint-Tropez, France; and The Chedi in Phuket, Thailand.

Yeoh believes the next two to three decades will see Asia growing from an emerging market to a global economic powerhouse.

He says the South-East Asian region is also likely to see big growth over the next two decades. “The tourism and related industries in this region can be an incubator for bigger things.

“South-East Asia is actually the Mediterranean and Caribbean of the East, offering lots of opportunities from the real estate perspective,” he tells StarBizWeek in Singapore on Saturday.

Datuk Yeoh Seok Kian ... 'We aim to be a global developer of branded addresses.'

YTL Corp deputy managing director Datuk Yeoh Seok Kian says the group has great plans for YTL Land and these include establishing its footprint through iconic properties and communities worldwide.

“Ultimately, we aim to be a global developer of branded addresses, not because we can do so but because it presents us with a unique opportunity to make a difference in people's lives.

“We are extremely excited about the future of YTL Land. We will consolidate our Singapore properties - Sandy Island, Kasara villas in Sentosa Cove and Westwood Apartments in Orchard Boulevard - with our Malaysian portfolio. This is expected to take place in the last quarter of 2010,” says Seok Kian, who is also YTL Land executive director.

“We are not just building beautiful homes; we are contributing to the well-being of our homeowners, allowing them to lead a more fulfilling life while connecting with their loved ones,” he adds.

Through its projects like The Maple, Sentul Park and Lake Edge, the company has shown how it can enrich the lives of homeowners.

“Seeing kids running around parks or families strolling leisurely along the lake while interacting with their neighbours is a huge satisfaction for us.”

Stressing that Singapore will be a huge market for YTL Land, Seok Kian says the company will bid for land that will be put up for sale by Singapore's national land use planning and conservation agency, the Urban Redevelopment Authority.

YTL Singapore director Kammy Tan says the development of Sandy Island and Kasara villas in Sentosa Cove is underway and the projects are scheduled for completion by 2015.

So far, 15 of the 18 Sandy Island villas priced from S$15mil to S$16mil have been sold. They have built up of 7,000 to 8,000 sq ft.

The 13 Kasara villas of 10,139 to 17,362 sq ft with price tags from S$14mil to S$22mil have all been taken up.

By The Star