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Saturday, August 14, 2010

CapitaLand’s Malaysian success

Last month, Prime Minister Datuk Seri Najib Tun Razak told Johor Umno branch leaders not to be emotional or parochial about Singapore investments.

For years, there has been this unhappiness about Singapore’s presence in the state, from the day tourists to corporate investors.

The fact remains that Johor – and the country – need the dollars, be it US or Singapore dollars, or any other foreign currency, for that matter.

Singapore’s business involvement in Malaysia can best be seen in the sprawling interest of CapitaLand Ltd, Southeast Asia’s largest property developer.

The company is also part of Temasek Holdings, the investment arm of the Singapore government. While CapitaLand is most bullish about its investments in China, it also upbeat about the region.

CapitaLand’s presence in Malaysia has been significant over the last 10 years.

In this relatively short time, CapitaLand has successfully branded itself in the Malaysia property scene.

Among its first condominium projects in Malaysia was Suasana Sentral, a 400-unit project built in partnership with Malaysian Resources Corp Bhd in 2001, when the Malaysian government was promoting Brickfields as a transport hub.

Since then, there have been various other projects. Says property consultancy Knight Frank MD Eric Ooi: “It was between 2002 and 2007 that the group became very aggressive in the Malaysian property scene. Its foray into the vicinity of the Petronas Twin Towers started with Marc Residences in 2002. It was already working on its branding then.”

Marc Residences was the third project to be launched after Stonor Park and Dua.

“They entered the high-end condominium segment because they saw pent-up demand for these condominiums. From their experience in Singapore, they saw the potential of that location and the demand for such high-end modern living, which Kuala Lumpur had never seen before,” says Ooi.

CapitaLand has since gone into quite a number of residential developments.

Among them Hamsphire Residences (with Zelan Bhd), Kiaraville and Tiffany by i-Zen (Ireka Corp Bhd) and Zehn Bukit Pantai (a joint venture with the landowners), to name a few. All of them are high-rise residentials. Its latest project is Seni Mont’Kiara (also with Ireka).

Successful branding

CapitaLand also has interest in UM Land Bhd, which is involved in township development in Johor.

Says Paul Khong, executive director of Richard Ellis Sdn Bhd: “CapitaLand has successfully branded itself in Malaysia, which is why other developers are keen to co-brand with them today.

“The name CapitaLand comes with a premium, and many Malaysians understand that,” says Khong.

CapitaLand’s presence in the commercial sector in Malaysia is through Quill Capita Trust (QCT), a real estate investment trust listed on the Main Market of Bursa Malaysia.

Currently, QCT has assets totalling about RM788.4mil, comprising 10 commercial properties in Cyberjaya, Kuala Lumpur, Shah Alam, Petaling Jaya and Penang.

CapitaLand is also involved in serviced residences through The Ascott Ltd, one of the world’s largest international serviced residence owner-operator, with more than 26,000 serviced residence units in key cities of Asia-Pacific, Europe and the Gulf region.

The company operates three brands – Ascott, Somerset and Citadines, and its portfolio spans 71 cities in over 20 countries.

In Malaysia, Ascott is the largest international serviced residence owner-operator, with nine properties offering close to 1,200 units.

Ascott manages seven properties in Kuala Lumpur – Ascott Kuala Lumpur, Ascott Sentral Kuala Lumpur (opening in 2013), Somerset Seri Bukit Ceylon, Somerset Ampang (opening in 2010) and three properties for corporate leasing.

In Kuching, Ascott operates Somerset Gateway and Citadines Kuching Uplands (opening 2012).

Says a CapitaLand spokesman: “CapitaLand has the experience and expertise along the entire real estate value chain. Exporting real estate expertise overseas has been CapitaLand’s forte. The group is an investor, developer, operator and manager, and provides financial solutions across sectors and geographies.

“Today, the group has nine listed entities, the latest being CapitaMalls Malaysia Trust, with a total market capitalisation of about S$40bil. It manages about S$50bil worth of real estate assets in more than 110 cities in over 20 countries.”

CapitaLand has no choice but to go overseas. With Singapore being just 700 sq km, it does not have much of an option other than to go offshore in search of opportunities.

After all, the whole of Singapore can only absorb 15,000 apartments a year, but in Shanghai alone, the same number of units can be sold within a week.

By The Star

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