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Saturday, October 30, 2010

Most Malaysians cannot afford the high price of property

With prices of terraced houses in the Klang Valley and Penang having appreciated beyond the regular RM300,000 to RM600,000 range to close to and some even surpassing RM1mil, it is not surprising to find many average Malaysians who are rather hapless or even lost as to what and where to buy their house.

There are really not many choices available to them unless they don’t mind moving further away to other suburban addresses where they would have to travel longer distances. But if they still choose to stay near the conveniences close to the city centre, most of them will have to settle for much smaller units or apartments with the price that they can afford.

To maximise their land use, developers have resorted to building high-rise dwellings instead of landed houses which account for the short supply of such housing these days.

A shortage of land available for development can be singled out as one of the factors for the sharp increase in land cost and property prices.

Whatever large tracts of land available have already been snapped up and what’s left are mostly smaller plots.

In Kuala Lumpur, land prices have appreciated even more sharply and the recent sale of a piece of land for over RM7,000 per sq ft has raised alarm among some consumer groups and industry players.

They worry that the high price transacted for the land will be used as the bargaining power for other land owners to push their land prices upwards in the surrounding areas.

This will inevitably be an unhealthy prelude to an overheating in the property market as land is the basic commodity in a property development process. When the price paid for a piece of land escalates way beyond the market norm or the last transacted price, it has actually moved ahead of market fundamentals.

The question is who then will have to bear the high cost at the end of the day. Certainly it will not be the developers as they will factor into their total project costing and recoup the cost by pricing the property they build higher.

And if the property is not for sale but for leasing, the rental rates can also be expected to be higher. Although property buyers are not directly or immediately affected by the high land cost, they will also have to share part of the burden when the prices of goods and services are fixed higher (as the business operators who rent the space will factor the high rent into their pricing.)

If we are worried of a potential property bubble, it is important to keep a close watch on the availability of land supply to keep prices of land in check.

Opening up new corridors of land for development is an effective and speedy measure to ensure adequate land supply.

The other option is to encourage redevelopment of dilapidated parts of the city or old buildings and add value to them.

The Government’s plan to redevelop the 160ha Sungei Besi airport and the 1,320ha Rubber Research Institute land in Sungei Buloh should help to ease the land-scarcity problem.

The initiative should be accorded a top priority and, if possible, a dedicated agency is set up to oversee the whole planning and development process for these large parcels of land, taking into account the real needs of the people.

This will ensure better integration of public transport services and other infrastructure, housing and other commercial property needs that are more long-term and sustainable.

Given the huge need for more affordable housing in the Klang Valley, especially homes priced between RM200,000 and RM350,000, this will be the golden opportunity to plan for such housing projects. Hopefully at least 30% of the land for housing development will be allocated to affordable housing for all eligible Malaysians.

It is indisputable that real estate is an important economic sector, accounting for 50% of the country’s wealth. But the cap on the sector’s growth could be the relatively lower earning and purchasing power of Malaysians compared with those in other high income countries. For the industry to leapfrog to another level of growth, the people’s purchasing power has to grow faster or at least in tandem with the rising property prices as we will need investors who can afford to pay for the high-end properties that are to be built.

The Government’s iniatitives to turn Malaysia into a high income economy will create the platform for the people to earn higher per capital income to support their higher purchasing power.

Expanding the pool of buyers who have the means to absorb the high-end property that are being churned out by developers now will hopefully create a more sustainable property market – one where demand matches supply.

Otherwise the market will have to depend on foreign buyers who can afford to pay for the high-end property.

Deputy news editor Angie Ng believes developers, especially those who own large tracts of land and are involved in major township development, have a moral responsibility to offer a more balanced portfolio of different range of housing projects, to help cool the market from overheating.

By The Star

Mayland sees demand for city condominiums

Hong Kong-based property developer Malaysia Land Properties Sdn Bhd (Mayland) is very bullish about demand for high-rise condominiums in the city.

Based on the positive take-up rates of their properties so far, director Andrew Chiu says the interest in certain categories of city condominiums is expected to remain sustainable this year and next.

He says interest will be on properties of about 1,000 sq ft and below. More than half of its Royal Regent development in Jalan Kuching is sold. The only ones left are the bigger units with a built-up of 1,500 sq ft and above. The smaller units ranging from 900 sq ft to 1,200 sq ft have been sold.

“Even before we launched, our previous buyers have taken up the smaller units,” he says. A typical Mayland investor will have two to three projects already and these buyers bought nearly 70% of Royal Regent, with some of them buying two or three units at a time, he says.

Royal Regent is the third project in the Jalan Kuching location. The other projects in that 20-acre site includes Sri Putramas 1, Sri Putramas II and Royal Domain.

Sri Putramas I was the first project to be launched in that location in 2002. The units, with a standard size of about 1,000 sq ft, had prices starting at RM140,000.

Mayland subsequently launched Royal Domain at about RM200 per sq ft with units priced at about RM240,000. Today, Royal Domain, is selling at about RM320 per sq ft.

Its latest launch, Royal Regent, is priced at about RM400 per sq ft, says Chiu, adding that the location will have a total of about 3,500 units, with the completion of phase four. Royal Regent. which is phase three, is expected to be completed in 2013.

Mayland is also building Regalia@Jalan Sultan Ismail with Bina Puri Holdings Bhd, one of the largest construction groups in the country. The 38-storey has a gross development value of about RM600mil. It is scheduled for completion by early 2011.

“We are positive about demand for units located in the Golden Triangle. Land is a scarce commodity and if the Malaysian government can get the public transport system off the ground, this will add further value to the projects in the city,” Chiu says.

He says property development has become so sophisticated in his home country in Hong Kong that even with a 2,300 sq ft piece of land, it is possible to put up a 40-storey building with no car parks.

Buoyed by demand, Mayland is also embarking on another high-rise project in Ampang, just behind Ampang Point shopping centre. Known as The Elements@Ampang, the freehold service apartment project will have a gross development value of RM650mil. It sits on 2.6 acres adjacent to another high-rise project known as GBC.

The Elements will be developed by Land & General Bhd (L&G). Mayland is the largest shareholder in L&G. Besides Ampang Point shopping centre, the other closest mall is Great Eastern Mall.

The Elements will be competing with Mah Sing group’s M Suites and Brunsfield’s EmbassyView. While The Elements is located a little way off Jalan Ampang, M Suites and EmbassyView are located on Jalan Ampang itself.

L&G MD Low Gay Teck says there are several international schools in the vicinity of The Elements. These are Fairview International School, Sayfol International School, International School of Kuala Lumpur and Mutiara International School.

It will be served by Gleneagles Intan Medical Centre, Ampang Puteri Specialist Centre, Pantai Indah Hospital, Hospital Ampang, Ampang Medical Centre and Prince Court Medical Centre.

Prices at The Elements begin at RM350,000 for units with a build-up of 625 sq ft. The largest built-up is 1,550sq ft.

Low says the company is looking to buy land for residential developments with plans to sell the units at RM400 per sq ft and above.

“Cost of construction and inflation will only go up. As the Government moves along in their plans to remove subsidies, cost of construction, building materials and labour will only go up. Land prices will not be coming down. so prices will just have to keep adjusting upwards,” says Low, adding that there is a demand for land in light of expected future increase in prices.

He says the demand for certain types of properties have also led some developers to price their units at RM5mil in a RM2mil-a-unit area.

As for Mayland and companies within the group, Mayland advertising and promotions manager Ian Tay says the group together with L&G have a good following of buyers.

“Both The Elements and Royal Regent will appeal to different categories of investors. Most of those who buy into Royal Regent are upgraders. They have probably units in Sri Putramas I and II, and maybe even Royal Domain and they see the opportunity to buy into Royal Regent at RM400 per sq ft because they know the city will continue to expand. The development in the Matrade area by the Naza group is after all just a few minutes drive away,” says Tay.

Over at Elements, with prices beginning at around RM700 to RM750 per sq ft, most buyers would be investors. Tay says many may not be able to afford to stay in the city but they will want somewhere close to the city. “Ampang is not too far away from the KLCC City Centre, so the appeal is there,” he says.

By The Star

Growing Sunrise’s earnings

An artist impression of the oasis in the Quintet project.

KUALA LUMPUR: Sunrise Bhd is expected to launch at least four major property projects with gross development value (GDV) totalling RM2.7 billion next year and anticipates to register better results for FY2011 ending June 30, given its large unbilled sales of RM1.2 billion.

Its executive chairman Datuk Tong Kooi Ong said among those slated to be launched would be the ‘MK20’ mixed development project in mid-2011 with GDV of about RM1 billion, stressing that the project nestled in Mont’Kiara would be multi-phased, offering different kinds of products.

“MK20 will meet the demands of the market,” he told a press conference after the group’s AGM yesterday when asked to elaborate on the project.

Tong also said Sunrise would likely launch the Menara Solaris office buildings in the city centre early next year and that it was deliberating on whether the project with a GDV of RM480 million would be sold en-bloc or in the market.

“We are also very sensitive to market perception at the moment, especially for commercial properties after the recent 2011 budget,” said the executive chairman, while not ruling out that Menara Solaris could take off sooner.

Menara Solaris is a commercial development with 587,000 sq ft of net saleable area of strata office space and 20,000 sq ft of retail space. It is located off Jalan Sultan Ismail, behind the Renaissance hotel.

Tong says the success of Sunrise Bhd’s Canada project marks the start of the developer’s Stage 3 growth.

According to Tong, Sunrise was also hoping to launch its landed and gated residential development in Kajang before end-2011. The project, located near The Mines Resort, is situated on 58 acres of land and is expected to generate GDV of RM500 million.

On developments in Canada, Tong pointed out it was expected to launch the second phase of its ‘Quintet’ development in Richmond, which would contribute about 60% of the project’s total GDV of C$400 million (about RM1.2 billion).

He said the take-up rate for Quintet’s phase 1 was much faster than expected with nearly 300 units “literally all sold out” following its launch last month.

“We are basically rushing to launch the the second phase sometime in February or March 2011. The second phase is slightly bigger, closer to 450 units,” he said, adding that Sunrise currently had total unbilled sales of RM1.2 billion.

Based on the concept of an “urban oasis”, the majority of the units in Quintet are one and two-bedrooms with sizes ranging from 500 sq ft for a one-bedroom unit to over 1,500 sq ft for penthouses and townhouses.

Commenting on the outlook for the property market, Tong said he explained to shareholders there was no overbuilding per se in terms of the total number of units in Mont’Kiara, but acknowledged there could be some overbuilding in the type of units that cater more to the general segments of the population.

“There is an oversupply in certain types of condos, but there is no oversupply overall,” he said.

“Clearly, Malaysia is a growing population with a lot of young people who need homes. They move out from their parents’ homes when they get married. It is a question of affordability. It is the type of properties that the market demands,” he elaborated.

A property observer said that smaller-sized condominium units in general have fared well in the recent property upturn, due to affordability issues and rising demand from young families. The observer noted that prices of small-sized condominium units at Sunrise’s Solaris Dutamas have risen to around RM620 psf, compared to RM380-RM400 psf when they were first launched in 2006.

On its financial performance, Tong said the group was confident of registering sustainable revenue and profit for FY2011 and would “probably do better” than the results in FY2010. Sunrise posted a net profit of RM133.95 million on the back of revenue of RM590.74 million for FY2010.

“We have a basket of products and plans coming that will sustain us,” noted Tong.

He also said Sunrise could have strong returns riding on “Stage 3” of its growth development plans starting 2010, where it offered multiple-products and multiple-locations with a focus expanding beyond Mont’Kiara.

Sunrise’s share price yesterday added five sen to close at RM2.24 with 1.35 million shares traded. The counter has risen 8.74% year-to-date.

By The EDGE Malaysia (Posted on 29Oct2010)

Budget hotels urged to shape up to thrive

Malaysia's budget hotels will not have much of a future if they do not improve their facilities and services as foreign rivals are about to make their presence felt.

Come 2012, foreigners are expected to be allowed to operate budget hotels in the country, said Malaysian Budget Hotel Association (MBHA) vice-president for training and research Mohamed Hassan Hamzah.

"Our local budget hotel owners need to be more innovative in terms of marketing and promotion to ensure their survival," he said.

Mohamed Hassan cited the proposed liberalisation of services trade tabled in the middle of last year during the Asean Framework Agreement on Services.

Under the proposal, foreigners will be able to own up to 30 per cent of a budget hotel in the country by 2012 and 49 per cent in 2015. It involves one-and two-star hotels. However, this has yet to be decided.

There are about 6,000 budget hotels in Malaysia.

"Currently, only 1,500 budget hotels are registered with MBHA, and the number ought to rise," Mohamed Hassan told reporters at a press conference in Shah Alam recently.

The budget hotel business here has huge growth potential as Malaysia is a major tourism destination in the world.

Under the Economic Transformation Programme, the government has big plans to develop the industry further.

"If we want tourists to come to Malaysia and stay at our budget hotels, owners can help by providing good facilities and services."

Mohamed Hassan observed that budget hotels here are normally 50 per cent to 60 per cent full during weekdays and could be fully occupied on weekends. Although occupancy rates have risen, many will not survive if they do not upgrade their services.

Tourism is the country's second highest earner, after manufacturing, accounting for 12.3 per cent of the economy last year.

By Business Times

Budget for KLIA 2 increased

Malaysia Airports' board of directors has mandated RM2.5 billion for the overall construction cost of Kuala Lumpur International Airport 2.

Malaysia Airports Holdings Bhd (MAHB) is ready to spend some RM500 million more than the earlier budgeted RM2 billion for total construction cost of Kuala Lumpur International Airport 2 (KLIA 2).

Prime Minister Datuk Seri Najib Razak had said in his second stimulus package announcement in March last year that the new permanent low-cost carrier terminal (LCCT) would cost RM2 billion.

The airport operator said yesterday that its board of directors had mandated a sum of RM2.5 billion for the overall construction cost of KLIA 2.

MAHB chief financial officer Faizal Mansor, however, stressed that the RM2.5 billion budget was not final.
"While we will try to keep it below the budget, it is important to us to get the terminal completed well," he said at a briefing to announce the group's third quarter results in Sepang, Selangor.

While some big contracts have been dished out, Faizal declined to reveal how many more would be awarded.

KLIA 2 is now being planned to have double the initial size of 120,000 sq m.

While the new terminal is only half the size of KLIA's main terminal building, it is designed to have more than double the commercial space of the main terminal building.

After the recent completion of a retail optimisation plan at the KLIA main terminal building, about 7 per cent of the building is now commercial space compared to KLIA 2, which is expected to have about 20 per cent commercial space.

"What this means is that while the cost of running KLIA 2 will be half that of the main terminal building, it will be more viable, more sexy," Faizal said.

On its results for the third quarter ended September 30 2010, MAHB said net profit was down by almost 26 per cent. This was largely due to accounting losses it had to recognise in that period because of the adoption of the Financial Reporting Standard (FRS) 139.

MAHB made RM61.8 million net profit compared with RM83.4 million a year ago. The loss arising from adopting FRS 139 was about RM30 million.

Part of this loss came from recognising concessions payable at fair value for the Sabiha Gokcen International Airport in Istanbul, Turkey.

Year to date, the group recognised RM54 million accounting losses from the associate. MAHB has projected that the full-year figure will touch RM80 million.

Group operating profit in the period reviewed was up 12 per cent to RM128.3 million compared with RM114.4 million in the previous corresponding period.

By Business Times

Friday, October 29, 2010

Mortgage cap decision soon

Bank Negara Malaysia may make it harder for Malaysians to buy more than two houses as it seeks to stem speculative buying that is pushing up property prices.

Sources said the central bank would be meeting with banks next week to discuss plans for a mortgage cap whereby loans would be limited to a portion of the property value.

"The expectation is a cap of about 70-80 per cent. We think a directive will be issued to cap," said two sources with knowledge of the meeting.

Earlier, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said it was prepared to take pre-emptive action and that it has wide-ranging instruments to prevent a property bubble.

"We want to promote house ownership, but we want it to be done in an orderly manner and we don't want speculative activities," she told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

She acknowledged that there may be pockets of bubbles forming in parts of Malaysia, but believes Malaysian banks are dealing with this through their own risk management process.

Areas like the Klang Valley and Penang have reported strong property demand.

In June this year, some 147 double-storey terrace houses just outside of Kuala Lumpur priced from RM1.75 million each were sold out in just five hours.

Rising property prices have been fuelled by low borrowing costs, the continuing promotions by developers and expectations of a recovering economy.

More money is also flowing into Asia from developed economies where interest rates are low as investors seek higher returns elsewhere.

But this is not unique to Malaysia. Regulators in China, Hong Kong and Singapore have imposed measures to cool their property markets.

Zeti also said that "massive" financial literacy programmes would be rolled out as a pre-emptive measure.

These would be aimed at those aged below 30 to help them better manage their finances at the start of their careers.

By Business Times

Sunrise to launch RM3b worth of projects next year

PROPERTY developer Sunrise Bhd will launch about RM3 billion worth of property projects next year to boost profit and revenue for the year ending June 2011.

The projects are mainly located in the Klang Valley as well as a mixed residential development known as Quintet on 1.94ha in Richmond, a suburb of Vancouver in Canada.

Sunrise will launch Phase Two of Quintet within the first quarter of next year. It will comprise 450 residential units with a gross development value (GDV) of C$400 million (RM1.1 billion).

Quintet's first phase of 300 residential units were sold out when it was launched this year.
"We have been seeking property development work overseas and outside Mont' Kiara to ensure sustainable projects to push for further growth," Sunrise executive chairman Datuk Tong Kooi Ong said after its annual general meeting in Kuala Lumpur yesterday.

Locally, the company will launch Solaris Tower located behind the Renaissance Kuala Lumpur Hotel off Jalan Sultan Ismail. It is a two-block strata office development on 1.8 acres of land with a GDV of about RM480 million.

Meanwhile, Sunrise's residential projects that will be launched next year are mixed developments comprising condominiums, serviced apartments, a retail area known as MK 20 with a GDV of RM1 billion, and a gated residential development at The Mines with a GDV of RM500 million.

"We have a good basket of products for the next launches, we will make sure market demand is met," said Tong.

For the year ended June 30 2010, Sunrise reported a 14.2 per cent decline in net profit to RM133.95 million from RM156.18 million previously.

Revenue dropped 26.5 per cent to RM590.74 million against RM803.92 million before. Earnings per share was 27.04 sen.

Sunrise said the lower full-year revenue was due to the completion of Mont' Kiara Meridien and substantial completion of 10 Mont' Kiara and Solaris Dutamas in the previous financial year.

The residential area construction of 11 Mont' Kiara and 28 Mont' Kiara were on schedule and slated for completion in 2011 and 2013 respectively, it added.

By Business Times

Plenitude plans RM400m small-scale projects

PLENITUDE Bhd plans to launch several small-scale property projects worth as much as RM400 million over the next eight months.

The builder is taking advantage of a run-up in property prices to launch the seven residential projects that will cover areas in Klang Valley, Johor and Penang.

"These properties will be launched during this financial year (ending June 30 2011), and we expect positive contribution to the bottom line over the next few years," said executive chairman Elsie Chua after the company's extraordinary general meeting in Kuala Lumpur yesterday.

The company is also planning to launch a big-scale project in Penang in two years' time, which has an estimated gross development value of RM230 million.
"The development will mainly comprise landed residential units, of course. There will be some condominiums as well," said Chua.

The company, which has more than RM75 million in cash as at June 30 2010, said it will use it as a warchest to fuel expansion, and as such, it has no immediate plans to return more cash to shareholders.

Plenitude currently has a policy of returning between 20 and25 per cent of net profits as dividend to shareholders.

"That's what the shareholders were asking for, but we need this cash because we know we want to expand. If we cash it out, instead of having our own cash, we start borrowing, then it's bad," said Chua.

Zukarnine Shah, a director, added that the deciding factor for not returning the cash as dividend is the company's sustainability.

"If we issue out as dividend, shareholders will be happy for sure, but can we sustain? Will we have enough working capital or reserves to acquire valuable land to expand? So, we are trying to keep a balance, but of course, balance is subjective," Zukarnine said.

Chua said its landbank, currently at about 720ha, can keep the company busy for the next 10 years.

By Business Times

i-REIT from GCC may list next year

BURSA Malaysia Bhd expects an Islamic real estate investment trust (i-REIT) from the Gulf Cooperation Council (GCC) to be listed on the exchange next year, adding to its three existing i-REITS.

It did not identify the issuer, but market speculation is that that it may be Qatar-listed property group Ezdan.

News reports as early as May last year indicated that Ezdan was interested in listing an i-REIT made up of Qatar-based assets on Bursa.

"I don't think they (the issuer) have decided what they want to put in yet because it is a very big company. In their market, they're one of the top 10 listed companies. The reason they're coming over is because they don't have a REIT framework," Bursa's global head of Islamic markets, Raja Teh Maimunah Raja Abdul Aziz, told reporters after speaking at the Global Islamic Finance Forum in Kuala Lumpur yesterday.

Meanwhile, a US-dollar exchange traded fund (ETF) by BNP Paribas Investment Partners may be listed here by year-end or in the first quarter next year. The ETF is pending the Securities Commission's approval, she said.

By Business Times

Thursday, October 28, 2010

Mutiara Goodyear plans RM1.6bil projects

Property developer sees timing right for high-end development

KUALA LUMPUR: Property developer Mutiara Goodyear Development Bhd targets to launch several high-end property projects with a total gross development value (GDV) of about RM1.6bil in the next 12 months.

Hamidon Abdullah says the Malaysian property market is on an upward trend.

Executive chairman Hamidon Abdullah said the Malaysian property market was on an upward trend and the timing was just right for the launch of its matured projects.

Hamidon Abdullah said the property projects that would be launched (in phases) were the Nadayu Melawati high-end property development comprising luxury bungalows, semi-detached homes, super links and commercial units (GDV: RM850mil).

The project is slated for completion by 2012.

Other property projects to be launched next year are the Nadayu 92 Kajang (GDV: RM250mil) and Nadayu 28 Sunway (GDV: RM300mil).

Hamidon said the company would launch another property project known as Nadayu Penang (GDV: RM450mil) by next year.

Interestingly, Nadayu Penang is a property project under a 50:50 equity partnership with Affin Bank Bhd.

Hamidon said that with Affin Bank as a partner it would place the company in a stronger financial position.

“All these property projects will keep us busy for several years,” he said after Mutiara’s AGM yesterday.

Hamidon said the company’s high-end property project this year – Prima Avenue, with a GDV of RM120mil – had been completely sold out and slated for completion in the first quarter 2011.

On the company’s performance, Mutiara executive director Lim Beng Guan said the company had taken the option of early adoption on issues of Committee Interpretation 15 (IC 15), which essentially recognises revenue based on completion of project as against the previous practice of percentage of completion.

“If we had not early adopted IC 15 and revenue recognition based on percentage of completion of project, Mutiara’s revenue and net profit for the financial year ended April 30, 2010 (FY10) would have been RM124.2mil and RM17.7mil respectively,” Lim said.

Mutiara recorded a net profit of RM3.2mil and revenue of RM52.6mil for FY10.

Earnings per share for the year under review stood at 1.4 sen and net assets per share was RM1.35.

On the offer of 97 sen per share to buy back Mutiara’s shares not held by Atis IDR Ventures Sdn Bhd, a company that currently holds a 52% stake in Mutiara, Lim said Mutiara shareholders were told by their independent adviser PM Securities Sdn Bhd to reject the offer.

“Some shareholders had accepted the 97 sen per share offer, while others had chosen not to do so. So long as Mutiara is transparent, shareholders can decide on their own accord,” Lim said.

The first closing date for the offer is Nov 8.

By The Star

SunCity mulls over new projects for REIT

PETALING JAYA: Sunway City Bhd (SunCity) is mulling over office and retail projects to be nurtured into yield-accretive assets which can later be injected into the Sunway real estate investment trust (REIT).

The listing of Sunway REIT on July 8 involved the injection of eight assets – Sunway Pyramid Shopping Mall, Sunway Carnival, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.

The listing exercise raised some RM520mil for SunCity’s project development activities, including land purchase.

Ngeow ... ‘We want to build up Bandar Sunway into a location of choice for quality offices.’

SunCity property investment managing director Ngeow Voon Yean said the divestment and unlocking of the value of the assets marked a new chapter for SunCity.

“We are now looking for opportunities in property development or investment to venture into. In the last two years, the ratio of earnings between investment and development property was about 60:40, but post-REIT, it should be around 50:50,” Ngeow told StarBiz.

Besides distribution income from its 37% stake in Sunway REIT, SunCity can also channel the funds raised from its assets divestment to other income-generating activities.

It recently paid RM129mil to acquire an additional 45% stake in its 51%-owned unit, Sunway Lagoon Sdn Bhd.

Ngeow also said the funds would be used to develop more office blocks and retail-related projects. There are 100 acres still undeveloped in the 800-acre Bandar Sunway Integrated Resort, and SunCity also has other smaller parcels of land in Kuala Lumpur.

He said the first project kicked off The Pinnacle in Bandar Sunway, a 25-storey corporate office block with net lettable area of 560,000 sq ft that was scheduled for completion by 2013.

Next up would be the development of a parcel of land beside Sunway Pyramid Shopping Mall. Currently referred to as SP3, this would be a retail and serviced apartments development with vehicular and pedestrian links to the mall.

“The supply of Grade A and international standard office and commercial space in this part of the Klang Valley is still in short supply. We want to build up Bandar Sunway into a location of choice for quality offices to attract blue chip office tenants here,” Ngeow added.

He said the new state-of-the-art office and commercial buildings would qualify as green and sustainable buildings. “The aim is to integrate and link all the office and retail complexes in Bandar Sunway with covered walkways to make them pedestrian-friendly and promote more walking instead of driving within the township. This will lower the carbon footprint of the township and is also in line with the LOHAS philosophy that Sunway has embraced from the start, ” he added.

LOHAS (Lifestyles of Health and Sustainability) is a term that describes the market and lifestyle of consumers interested in issues of health and fitness, personal development, the environment, sustainable living and social justice.

Ngeow said a new commercial project now underway was Sunway Velocity in Cheras, comprising office towers, serviced apartments, shoplots and a shopping mall. The RM1.5bil project on 22 acres will be completed in 2015. It will have a total net lettable area of 850,000 sq ft and gross development value of RM1.5bil.

SunCity also plans to build a 27-storey office building with a net lettable area of 350,000 sq ft, Sunway Tower, in Jalan Ampang, Kuala Lumpur. Plans for the project on a one-acre site are still being firmed up. “We have a couple of other projects on the drawing board and will keep our project pipeline going for synergistic growth between the various divisions of SunCity,” Ngeow said.

By The Star

SunCity unit in JV for RM4.3bil project in China

PETALING JAYA: Sunway City (S’pore) Pte Ltd (SCS), a wholly owned subsidiary of Sunway City Bhd (SunCity), has entered into a joint venture to develop a project with an estimated gross development value of RM4.3bil in Sino-Singapore Tianjin Eco-City, China.

SunCity told Bursa Malaysia yesterday that SCS had signed an equity joint-venture (EJV) contract with Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) to set up a joint-venture firm for developing 27.96ha in the township.

“The preliminary feasibility study of the proposed development features mixed residential and commercial development complemented by integrated and high quality amenities,” it added.

SunCity said the proposed development would span five years with the earliest start in March 2011 and an expected completion in mid-2015.

SCS will be the majority shareholder of the EJV company.

SSTEC, the master developer for the Tianjin Eco-City, is a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by the Keppel group.

By The Star

Sime reports brisk sales in 3 townships

Sime Darby Property Bhd is achieving a high rate of sales for three townships -- Denai Alam in Shah Alam, Bandar Bukit Raja in Klang and USJ Heights in Subang Jaya.

The three phases of terraced houses at Denai Alam boasted an average 85.6 per cent take-up rate, while the two phases of Bandar Bukit Raja averaged 93 per cent take-up, it said in a statement today.

The four recent phases at the USJ Heights averaged 90 per cent take-up, with one phase sold out within three months from launch, it said.

Managing director Datuk Tunku Putra Badlishah said the trio of recent success stories "speaks volumes for the resilience of Kuala Lumpur's property market".

"The sales achieved at the three townships demonstrates the continued strong demand for landed property in well-planned communities within the Klang Valley," he said.

Going forward, he said that there will be new two launches in USJ Heights and a launch of Lavender Park in Denai Alam, both scheduled for next month.

By Bernama

MK Land seeks cheap loans for Bangalore project

PROPERTY developer MK Land Holdings Bhd is seeking cheap loans from Exim Bank to develop affordable housing in northern Bangalore with India's Embassy Group.

The project, with gross development value of around RM4 billion, is set to be undertaken by MK Embassy Land Sdn Bhd, in which MK Land and Embassy Group hold 47.5 per cent each while MKN Embassy Development Sdn Bhd has 5 per cent.

"I hold a 5 per cent stake in the project. We have been invited by our partner Embassy Group to replicate the low-medium-cost model of Damansara Damai in Bangalore," executive chairman Tan Sri Mustapha Kamal Abu Bakar said.

"The joint-venture company will buy land from Embassy Group. With that as collateral, we will borrow money from Exim Bank, at a low payback rate ... as low as 4 per cent," he said.
Mustapha Kamal was speaking to reporters after MK Embassy Land sealed a development agreement with NAM Estates Pvt Ltd, a unit of Embassy Group, in Putrajaya yesterday.

He said the joint-venture company was buying the 185-acre site from Embassy Group at RM2.3 million an acre.

The low-cost apartments will be in the range of 660-880 sq ft and priced between RM115,000 and RM175,000 each.

Since the new township is 8km away from the new Bangalore International Airport, the apartment blocks will be limited to eight storeys.

"We'll launch this project as soon as we receive the approvals from the authorities in India," Mustapha Kamal added.

By Business Times

Sunrise aims to sustain revenue growth

Sunrise Bhd hopes to achieve sustainable profit and revenue growth for financial year ending June 2011.

"We have good products for us to be sustainable and it will allow us to further grow further," executive chairman Datuk Tong Kooi Ong told a media briefing after the company's annual general meeting in Kuala Lumpur today.

Sunrise's pre-tax profit for financial year ended June 30, 2010, fell to RM180.876 million from RM210.911 million in the same period of 2009.

Revenue declined to RM590.742 million from RM803.922 million previously.

Tong said Sunrise would launch the second phase of Quintet in Richmond, Canada sometimes in February or March next year.

"The first phase was launched in early October.

"The gross development value (GDV) of the project is about C$400 million (C$1=RM2.92)," he said.

Sunrise, he said, would launch the MK 20, a mixed development along Jalan Kiara, consisting mostly of condominiums, serviced apartments and some retail units, in the middle of next year.
MK 20 has a GDV of about RM1 billion, he said.

Tong said Sunrise would also undertake another project, a landed and gated residential development in Kajang, Selangor, which is located near The Mines.

"The 23.3-hectare development involves an innovative concept of homes, beautiful landscape and facilities.

"The GDV of this project is about RM500 million," he said.
He said Sunrise would also venture into the hospitality business in operating serviced apartments.

By Bernama

Four projects for Sunrise next year

PETALING JAYA: Property developer Sunrise Bhd plans to launch four projects with a total gross development value (GDV) of RM3.2bil next year.

This will support expectations of turning in a better financial performance in the current financial year ending June 30.

Executive chairman Datuk Tong Kooi Ong said the immediate project to hit the market would be the Solaris Tower with a GDV of RM480mil by this year or early next year.

“Next would be our project in Vancouver, Canada- the Quintet- where the launching of the second phase is expected to be in February or March next year.

“We already launched the first phase last month and all units were sold out much faster than expected. The Canada project has a total GDV of 400mil Canadian dollars,” he said.

By middle of next year, Sunrise will unveil its MK20 with a GDV of RM1bil, a build-and-sell mixed development project in Mont’ Kiara.

“Finally, we should see the launch a premium landed development in Kajang, next to the Mines Resort with GDV of around RM500mil by year-end,” Tong told reporters after the company’s AGM today.

By The Star

Plenitude sees RM333m from new projects

Property developer Plenitude Bhd expects its new project launches to yield an estimated gross development value of RM333 million for the financial year ending June 30, 2011.

Its executive chairman Elsie Chua said the company's projects include Taman Desa Tebrau in Johor, Taman Putra Prima in Selangor, Bandar Perdana and Lot 88 Perdana Heights in Sungai Petani, Kedah.

"We will continue to be cautious of the economy and launch our projects when the timing is right," she said after the company's annual general meeting (AGM) in Kuala Lumpur today.

Chua said Plenitude plans to launch condominium projects located at Tanjung Bungah and in Batu Ferringhi, Penang, soon and its first township in Balik Pulau.

She said the company will focus on building attractive and affordable houses priced above RM300,000 due to encouraging signs of a booming property market.

"We are very upbeat on future projects in Penang but also cautious about the rising price of land and building materials which would inadvertently raise the pricing of properties," she added.

Plenitude also aims to launch its first bungalow development, Tebrau Mutiara at Taman Desa Tebrau, Johor Baru soon, she added.

Plenitude continues to maintain a healthy balance sheet whereby its net cash position rose to RM325 million for the financial year ended June 30, 2010 from RM246 million previously.

It also recorded RM113.55 million in higher pre-tax profit for the financial year ended June 30, 2010 compared with RM109.259 million last year, while revenue increased to RM349.713 million from RM282.756 million previously.

According to Chua, the company is looking at expanding its landbank in the Klang Valley as well as the region.

At the AGM, the shareholders also approved a first and final single tier tax exempt dividend of 15 per cent or 15 sen per share for the financial year ended June 30, amounting to RM20.25 million to be paid out by November 12.

It also proposed and shareholders approved, a bonus issue of 135 million new ordinary shares of RM1 each to be credited as fully paid up on the basis of one bonus share for every one existing share, held during the extraordinary general meeting which was held after the AGM.

By Bernama

Mutiara Goodyear bullish on outlook

Property developer Mutiara Goodyear Development Bhd has lined up four projects worth RM2.1 billion for the next 12 months to expand.

Executive chairman Hamidon Abdullah said he was bullish on next year's outlook, describing the market as buoyant.

Mutiara's new projects in Bandar Sunway, Kajang and Cyberjaya in Selangor and in Butterworth, Penang, are gated communities targeting the middle-to upper-income groups.

They are expected to appeal to buyers looking for a safe and secure environment.

"In my belief, properties are not being offered to the public in a wholesome manner. We have to create a community with proper amenities and landscaping. Then the products will move.
"I do not expect a bubble if we put decent properties in the market for people to live in rather than flip," Hamidon said yesterday in Kuala Lumpur after the company's shareholder meeting.

Mutiara is launching flagship project Nadayu 92 in Kajang, Nadayu 28 in Sunway, Nadayu 290 in Butterworth and an un named project in Cyberjaya.

Hamidon said Nadayu 92 is its attempt to deliver an affordable range in a gated environment and is optimistic of a good response.

Hillside development Nadayu 290 will feature three condo-minium blocks with more than 150 units and seven bungalows, worth more than RM400 million.

Nadayu 290 is touted to set a new benchmark for Penang where green technology is concerned.

"We are working with big international names to integrate green technology into the development. It will be a reference project for Penang, placing us on the map with the big boys," Hamidon said.

In the financial year ended April 30 2010, Mutiara posted RM3.2 million net profit on revenue of RM52.6 million.

By Business Times

Hai-O entry into property may add risk: OSK

Hai-O Enterprise Bhd's venture into the property business will add more risk to the group, given that its multi-level marketing (MLM) business is still trying to recover locally, says OSK Research.

"While the venture may help generate future earnings and reduce its reliance on the more volatile MLM business, our concern is that this will further divert its focus on its current businesses and add risk to the group if not executed properly," it said in its research note today.

The research house said apart from the risk of venturing into a non-core property business, in which Hai-O has no expertise, the group's MLM business was still struggling from the impact of more stringent rules on direct marketing.

The property venture is the second non-core business Hai-O has gone into after it diversified into the heat transfer technology in August 2009.

OSK said given the recovery in buying sentiment among Hai-O's members was taking longer than expected (members were ordering less even for the saleable products), the management believed the MLM division would need more than six months to recover.

"Nonetheless, the Hai-O management is confident that with all the measures put in place by the task force set up to beef up performance, its MLM division would regain momentum and continue to drive the group's earnings," it said.

By Bernama

BNM to act on property, if needed: Zeti

Malaysia’s central bank will clamp down on any speculation that threatens to create a property bubble, the central bank chief said today.

Bank Negara Malaysia (BNM) Governor Tan Sri Zeti Akhtar Aziz said the central bank wanted to promote house ownership but it had “wide ranging instruments" to deal with any excesses in the sector.

“For first time houseowners and perhaps even the second one, any new rules would not apply. It would only be for those that want to purchase 10 units at time, I believe that happens sometimes,” she told reporters on today.

“If we consider that there is imminent risk of a property bubble, we will take pre-emptive action. We’re not going to wait for the bubble before taking action.”

Although Asian policymakers are mostly concerned about hot money from developed countries, CIMB notes that Malaysia has the highest household debt in Asia outside of Japan.

It said household debt hit 76 per cent of GDP in 2009 and is expected to ease to 74.6 per cent by the end of this year, making domestic consumption sensitive to further interest rates rise.

House prices in Malaysia rose 32 percent between 2000 and 2009, but some areas of the country have seen a big rise this year.

A condominium near the business district in the capital was recently sold for US$12 million, making it among the most expensive homes sold in recent years, a local newspaper reported in July.

Policymakers in Hong Kong, Singapore and China have imposed measures to calm their heady property markets this year as investment flowed into Asia from developed countries.

Zeti said Asia was well placed to deal with these capital inflows due to better developed financial markets, rigorous surveillance and a larger regulatory policy toolkit.

“We have more rigorous surveillance, we know almost real time about these flows, where they come from and where they are placed, whether equities, bonds or deposits. We are better positioned now to deal with it,” Zeti told reporters.

To a suggestion on implementing a single Asian currency, Zeti said she was not in favour of such a move as the objective of achieving greater prosperity for the region could be achieved at a much lower cost.

By Reuters

Plenitude to launch seven projects in FY11

KUALA LUMPUR: Property developer Plenitude Bhd plans to launch seven projects in the financial year ending June 30, 2011, which could generate a total gross development value of about RM400mil.

Its executive chairman Chua Elsie said these projects - mix development with a combination of residential and commercial properties - were located in Johor, Penang, Sungai Petani and Selangor.

“We are upbeat on our future projects in Penang and will be launching our next condominium projects in Tanjung Bungah and Batu Ferringhi,” she said at a press conference after the company’s AGM and EGM today.

By The Star

On the fast track

Several companies made presentations to the National Key Economic Area (NKEA) lab about three months ago on the Kuala Lumpur-Singapore high-speed train project, industry sources say.

Among them were YTL Corp Bhd and Hartasuma Sdn Bhd, which was said to be partnering a Chinese state-owned firm.

Hartasuma, a Class "A" Bumiputera contractor, is a member of Ara Group, founded by Datuk Aisamar Kadil Mydin Syed Marikiah and Tan Sri Ravindran Menon, director and executive director of Subang SkyPark Sdn Bhd respectively.

Its track record includes repair and overhaul of passenger coaches for KTM Bhd and civil works (Kuala Kubu Baru-Tanjung Malim Halt) for the Rawang-Ipoh electrified double tracks.

Business Times understands that some of the companies have proposed to undertake the high-speed rail project for between RM8 billion and RM14 billion.
A government source said the project could be worth RM10 billion to RM12 billion and that it would take five to eight years to complete as it will cover 300km.

The source said that cost would depend on the type of technology deployed, whether it is magnetic levitation (maglev) or conventional, and how the tracks are aligned.

Maglev will cost more than conventional, but requires less maintenance, is safer and faster. The system also uses more electronics and essentially involves "non-contact electromagnetic levitation".

"If the alignment is built along the coastal road, then it would involve a lot of land acquisition and this would add to the cost," he said.

The source added that the project would depend on a study by the Treasury, the Performance and Delivery Unit (Pemandu) and other government agencies.

It is believed that Pemandu, which is leading the NKEA lab, has invited officials from the Ministry of Transport, the Land Public Transport Commission (Spad) and City Hall to attend briefings held separately by the companies.

The high-speed train project was mooted by YTL in 2006. It had proposed to undertake the project for RM9 billion, partnering Germany's Siemens, a global expert in high-speed rail technology.

The YTL proposal, however, was shot down because of the high cost involved.

Malaysia is mulling over a high-speed rail linking Kuala Lumpur and Singapore that will cut travel time between the two cities to 90 minutes.

Plans would require the approval of Singapore, which has expressed its interest in the project. However, the government has not given a firm approval, the source said.

By Business Times

Wednesday, October 27, 2010

Times Avenue units 70pc snapped up before Nov launch

TIMES Avenue, a RM160 million office and retail project on Jalan Imbi, Kuala Lumpur, has been 70 per cent sold, one month ahead of its launch in November.

The space was bought mainly by a Hong Kong private equity group, said Datuk Lennon Tan, founder and chairman of developer Takashimaya Construction & Development Sdn Bhd.

Times Avenue is located next to Berjaya Times Square. The 15-storey building has nine levels of executive office suites, three floors of retail lots, two levels of penthouse offices and a sky lounge. Construction will start in December and is due for completion by end-2013.

Tan plans to sell the remaining space to local investors.

"I am bullish on the market for office space and expect the whole project to be sold by the end of this year," Tan said yesterday in Kuala Lumpur, after unveiling the project.

Times Avenue is the first commercial building to feature a high-tech multi-level automated valet car parking system. This is its selling point.

The RM10 million system uses technology from South Korea and is widely used in Europe.

It allows customers to initiate their vehicle retrieval simply by scanning their bar coded valet parking ticket at the built-in reader. Their vehicle is automatically stacked vertically alongside the building, saving them time to look for parking.

"We hope to set a new benchmark in office space where security and safety is concerned. We hope land owners and developers will look into the system, which is a high selling point for their projects," Tan said.

Takashimaya was set up in 2004 by Tan and Fanny Foo Youe Moi, an entrepreneur.

Tan said Takashimaya has no links to Berjaya Group, or its founder Tan Sri Vincent Tan.

By Business Times

Cagamas may issue another sukuk worth up to RM2b

NATIONAL mortgage company Cagamas Bhd will issue another landmark sukuk, with size estimated to be between RM500 million and RM2 billion.

Chief executive officer Steven Choy said the size of the Islamic debt paper will depend on the home loans that banks sell to Cagamas.

"If they sell us big loans, it will be bigger, if small loans, it will be small," Choy told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

On the significance of the latest debt paper, Choy said: "We haven't worked out yet on the assets that are coming in, so it is not the right time to talk about it."

It is understood that the sukuk will be launched by the year-end.

Sources told Business Times that the latest Cagamas sukuk will be based on Ar Rahnu concept, or pledging.

"It is termed as covered sukuk (an Islamic version of covered bond)," one of the sources said.

Covered sukuk is an Islamic version of covered bonds, which are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset-backed securities created in securitisation, but covered bond assets remain on the issuer's consolidated balance sheet.

Business Times had earlier reported that the new Cagamas sukuk will not incorporate "doubtful" principles, just like its previous benchmark Sukuk Al-Amanah Li Al-Istithmar (Sukuk ALIm), launched in mid-July.

While Sukuk ALIm was designed to meet the requirements of broader investors especially from the Middle East, Cagamas' new sukuk is expected to attract local institutional investors.

Last year, the country's biggest buyer of home loans sold RM11.3 billion worth of bonds, down by more than half from the record RM25 billion in 1999. About 40 per cent, or RM4.3 billion, were sukuk.

Cagamas issues bonds or debt securities to finance the purchase of housing loans from banks, freeing up lenders to give out more loans.

It is the second biggest issuer of debt papers after the government and carries the highest credit rating of "AAA" from local rating agencies. This means that its paper is highly sought after by investors because the probability of a default is very low.

By Business Times

KLIB unit to sell land for RM58mil

PETALING JAYA: Equine Capital Bhd’s wholly-owned subsidiary Kuala Lumpur Industries Bhd (KLIB) has proposed the disposal of four parcels of land together with Wisma KLIH for up to RM58mil cash to Wonderful Vantage Sdn Bhd.

In a filing with Bursa Malaysia, Equine said the land was with a 14-storey purpose built office building known as Wisma KLIH located at Jalan Bukit Bintang, Kuala Lumpur.

It said the disposal consideration comprises RM48mil for the disposal of the property and RM10mil for renovation and refurbishment of the property, subject to the terms of the renovation and refurbishment option.

By The Star

Commercial property sales rebound in 3Q

NEW YORK: Two of the world's largest commercial real estate services companies reported sharply improved earnings on Tuesday, Oct 26, fueled chiefly by a pickup in building sales and leasing, particularly in the United States.

After more than a year of nearly no activity, US property sales have begun to pick up as buyers and sellers agreed on prices. That helped Jones Lang LaSalle Inc and CB Richard Ellis Group Inc record strong earnings growth in the third quarter.

Boston Properties, which has been on a buying spree over the past couple of months, reported better-than-expected results.

Luxury mall owner Taubman Centers Inc reported earnings that were hurt by an unexpected drop in lease cancellation fees. But the company raised its full-year forecast after sales at its malls rose 13% per square foot.

The slow rebirth of the US commercial mortgage backed securities market (CMBS) and loosening of lending by banks have greatly improved US commercial real estate sales this year. Real Estate research firm Real Capital Analytics expects sales to top US$100 billion (RM310 billion) in 2010, nearly double the US$54.4 billion in 2009.

US companies also have begun to lease more space as they become more confident about the economy.

Sales and leasing transactions are the bread and butter of real estate services companies, providing higher margins than property management or corporate services.

"We've seen sales and leasing improve all year," JMP analyst Will Marks said. "Third-quarter results really picked up from 2009 levels, but they're still nowhere near the levels at the peak."

CB Richard Ellis, based in Los Angeles, posted third-quarter earnings, excluding charges, of US$62.4 million, or 20 US cents per diluted share up from US$21.6 million, or eight US cents a share in the year-earlier quarter.

Analysts on average expected 17 US cents per share, according Thomson Reuters I/B/E/S.

Revenue rose 24% to US$1.3 billion. That was driven in part by a 26% revenue increase from the Americas region, with property sales up 69% and leasing revenue up 36%.

Jones Lang LaSalle posted third-quarter adjusted earnings of US$38 million, or 86 US cents per share, compared with US$27 million or 61 US cents per share in the year-earlier quarter.

Analysts on average expected 95 US cents per share.

Chicago-based Jones Lang LaSalle said its revenue rose 20% to US$708 million. In the Americas, revenue rose 29%, with leasing revenue up 38%, and sales and hotels up 127%.

Taubman reported third-quarter adjusted funds from operations of US$33 million or 59 US cents per square foot compared with a loss of US$67 million, or US$1.26 per share in the year ago period.

Analysts had expected third-quarter FFO of 67 US cents per share. FFO is a real estate investment trust performance metric, which removes the profit-reducing effect of depreciation from earnings.

The company, based in Bloomfield Hills, Michigan raised it 2010 FFO forecast to a range to US$2.77 per share to US$2.82 per share from US$2.65 per share to US$2.75 per share based on improving rents and higher lease cancellation and recoveries.

Boston Properties reported FFO of US$150.8 million, or US$1.07 per share diluted compared with US$158.5 million, or US$1.13 per share.

Analysts expected FFO of US$1.03 per share.

Boston Properties said it expects to report fourth quarter FFO of US$1.09 per share to US$1.12 per share.

The companies reported after the close of the New York Stock Exchange on Tuesday. Jones Lang LaSalle shares closed down 0.7% at US$85.37. CB Richard Ellis shares closed up 0.2% at US$18.90 and were at US$19.06 after hours. Taubman shares closed down 1.1% at US$48.30, and were at US$48.76 in after-hours trade. Boston Properties shares closed down 1% at US$89.87.

By Reuters

Tuesday, October 26, 2010

SP Setia to launch four residential projects worth RM546mil

The Show Village of Setia Pearl Island

GEORGE TOWN: SP Setia Bhd plans to launch four new residential projects with an estimated gross sales value RM546mil on the island beginning this December and next year.

SP Setia property (North) general manager S. Rajoo told StarBiz that the projects comprised the RM175mil Setia Greens, RM60.5mil Brook Residences, RM170mil Setia V Residences, and the RM139mil Pearl Villas in the Setia Pearl Island scheme.

Setia Greens, comprising 149 three-storey terraces and 18 semi-detached houses with dual frontage in Sungai Ara, would be launched in December.

“The selling price starts from RM918,000 onwards for terraced units with built-up areas ranging from 2,400sq ft and 3,200sq ft.

“The selling price for the semi-detached units, with built-up areas of around 3,300sq ft, is around RM1.6mil onwards,” he said.

Subsequently the group would launch Brook Residences in February 2011 and the Pearl Villas in April, and Setia V Residences in the second half of next year, Rajoo said.

“The Brook Residences in Brook Road, a prime residential area near Jesselton Road, comprises 11 luxurious bungalows priced from RM5.8mil onwards, while the Pearl Villas comprise 35 bungalows priced from RM2.8mil onwards.

“The Setia V Residences project in Kelawei near Gurney Drive, comprising 67 luxurious condominiums, tentatively priced from RM2.8mil onwards,” he said.

Rajoo said Setia Greens would be the northern region’s first Green Building Index-rated project.

“What makes the project unique are the environmental features such as solar water heater, rain-water harvesting system, water efficient fittings, and cool roof system for each unit.

“We are using a special low-volatile organic compound paint for the project,” he said.

Rajoo said these new projects were targeted at the executives working in the south-west district of the island as well as investors.

For the nine months of SP Setia’s fiscal year ended July 31, 2010, the group’s projects from Penang contributed close to RM150mil or about 10% of the RM1.95bil revenue posted for the nine month period.

“We are confident that the contribution from Penang this fiscal year closing Oct 31, 2010 will hit over 10% of the targeted RM2bil revenue of the group.

“Setia Vista, Reflections condominium, and the new semi-detached launches in Setia Pearl Island contributed significantly from Penang,” he said.

Rajoo said Penang would continue to play an important revenue generating role in the group’s property development business.

“We will continue to look for land in prime locations either to develop on our own or on a joint-venture basis,” he added.

Meanwhile, Henry Butcher (Malaysia) Penang director Dr Teoh Poh Huat said high-end properties were still sustainable in Penang, as there were now overseas Malaysians investing in the island’s property market.

“These are overseas Malaysians earning pounds and US dollars, who are buying high-end properties with the view to come home to stay one day.

“This segment is playing an increasingly important role in the Penang high-end property market developed by branded developers,” he said.

By The Star

Naza's Dualis snapped up at launch

NAZA TTDI's Dualis Business Centre units in Seri Kembangan were snapped up barely two hours after its launch over the weekend.

The 32 units of two and two-and-a-half storey semi-detached shop offices are located within the prime residential and commercial area of Equine Park.

They are part of an 8.7 acre mixed development which will also include other components that will be announced and launched at a later date.

Naza TTDI's group managing director, SM Faliq SM Nasimuddin who was present at the launch said, he was encouraged by the response for the shop offices and assured purchasers that apart from living to the company's tagline of delivering the project ahead of schedule, quality will not be compromised.

He said TTDI Dualis Business Centre will be a new lifestyle hub in the area with its modern architecture concept and open space.

The development is an ideal location for offices, banks, showrooms and F&B outlets, he added.

Faliq expects the launch on Saturday to attract a lot interest from buyers with the project's well-planned layout, strategic location and alluring design.

The two-storey shop office built-up starts from 3,472 sq ft with the land area from 2,866 sq ft with prices starting from RM1.5 million.

For the two and half storey shop offices, built-up starts from 4,733 sq ft with land area from 3,587 sq ft. Price for the two and a half storey shop offices starts from RM2 million. The project is expected to be completed in October 2013.

By Business Times

Glomac acquires Suria Stonor condo units

GLOMAC Bhd is buying 18 units of apartment in Suria Stonor Condominium for RM38.41 million as an investment.

It views the property as one with a potential for a quick turnaround, Glomac said.

The purchase is at a discount of 35 per cent to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

By Business Times

Hong Leong arm, GuocoLand, invests RM9.3bil in China

It is hungry for more land bank in China and GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank

SHANGHAI: GuocoLand Ltd, which is a Singapore-listed property investment arm of Malaysian conglomerate Hong Leong Group, will hunt for other land in China after its setback in acquiring a plot in Shanghai.

GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank but it only managed to secure one of the two plots it bidded in Shanghai.

The successful bid is for a 47,647 sq m site in the Changfeng Ecological Business District in the Putuo district which was sold at the price of 3.04 billion yuan (RM1.4bil).

“There will be leftover of funds and we will use them and continue to bid for other land,” she said after a signing ceremony in Beijing last week which saw the entry of the five-star Poly International Cinema into Beijing Guoson Mall.

Violet Lee and Liu Debin at the signing ceremony in Beijing on Oct 20.

To date, GuocoLand China has invested an estimated US$3bil (RM9.3bil) in China with an ever-growing land bank of two million square metres in Beijing, Shanghai, Nanjing and Tianjin.

Beijing Guoson Mall, spanning 160,000 sq m, is located in GuocoLand China’s flagship project Guoson Centre which has a total area of 600,000 sq m. The mixed development project is smacked within Dongzhimen, which is regarded as Asia’s largest transportation hub with three subway and light rail lines, dozens bus routes and a daily traffic flow of 800,000 commuters.

The similar development has been emulated in the Guoson Centre in Changfeng, Shanghai. The 500,000 sq m is located at the crossroads of the business zones of Zhongshan Park, Gubei and Hongqiao and only 10-minute drive from the Hongqiao transportation hub.

It will also include a Guoson Mall, a Guoman Hotel and office and residential buildings.

The newly-acquired land is situated in the same area as the Guoson Centre in Changfeng and will be used for residential development.

In 1998, GuocoLand China developed its first commercial building called Corporate Square in Beijing’s Financial Street. Only in the last few years, the company entered Shanghai, Tianjin and Nanjing in a big way by building upscale condominiums.

The company is considered a late bloomer in China’s real estate industry and is now up against heavyweights like CapitaLand, Keppel Land, Cheung Kong Holdings, Kerry Properties and Sun Hung Kai from Singapore and Hong Kong.

However, GuocoLand China builds its name as the transportation hub specialist.

“We had come to China many years ago but we were very low profile unlike others who used to boast about their presence,” Lee said.

“This is the right time to come here as China is flourishing into the world’s second biggest economy and we want to participate in its rapid development in this period.”

She said there were many successful approaches that the company could emulate from its projects in Singapore and Malaysia for China but it would prefer to build homes and commercial properties suited for the local market.

“We have built many green buildings in many places. We want to showcase this in China and are proud to say that we have done quite a lot to green the Guoson Centre,” she said.

“I believe it’s hard to find a 40,000 sq m rooftop garden on the complexes in Guoson Centre.”

With the signing of tenancy agreement between GuocoLand China and Poly Film Investment Ltd, Guoson Mall in Beijing will house one of the most advanced cineplexes in China. The cineplex will meet international standards of high-end and eco-friendly cineplex and occupy 7,000 sq m with nine screens and over 1,500 seats.

Poly Film general manager Liu Debin said the Guoson Mall’s brand positioning and vision was in line with Poly Group’s aim of providing the best service.

“Through its strategic location and well-built business atmosphere, we see enormous commercial value and potential. We are sure that our cooperation will lead to a win-win result,” he said.

Lee said GuocoLand and Poly would establish a long-term partnership and look into further cooperation in other projects in China, especially the Guoson Centre Shanghai.

She said being strategic partners would bring benefits to both companies as they could market themselves even better.

“It’s a rare opportunity to develop such a huge project in this strategic location. We will do our best to fulfil our promise to bring our best development to Dongcheng district (where Guoson Centre Beijing is located) and do our part to improve the people’s lifestyle,” she said.

Guoson Mall is scheduled to open early next year. The Guoson Centre project won the Asia Pacific International Property Awards (APIPA) 2010 for the Best Mixed Use Development in April.

This is the first time a Chinese development won the prestigious award.

By The Star

Monday, October 25, 2010

Environmental preservation wins top marks

KUALA LUMPUR: Since organising the inaugural Malaysia Property Award (MPA) in 1992, the International Real Estate Federation (FIABCI) has been striving to raise the standard of the local property sector through this annual event.

Tougher qualifying rules and transparent judging processes over the years have ensured that many local property players keep with the times and also on par with the world’s top class developers.

Yeow ... ‘MPA award has set benchmark on how today’s local developers embark on their projects.’

The awards, which is today considered the “Oscars” of the local property industry, had set the benchmark on how today’s local developers embarked on their projects, said FIABCI-Malaysia president Yeow Thit Sang.

“Local developers know the kind of awareness winning this award brings. Many of them are tailoring their designs to these (FIABCI) standards. They look at our guidelines on how to improve their projects.”

Over the years, FIABCI Malaysia has placed increasing emphasis on environmental awareness and preservation. Initially, the impact of a development on the environment used to account for 10% of the judging criteria for the MPA. This year, it’s 25%.

“Environmental awareness is a global concern and it’s everyone’s responsibility to ensure everything they do has a minimal impact (on the environment),” said Yeow.

He said many local developers today were cautious with the way their projects impacted the surrounding landscape.

Yeow cited Mulpha International Bhd’s Pinggiran Bayou Village Homes, the winner in the best residential development (low-rise) category at the 2007 MPA.

He said prior to construction, the company took great pains to ensure minimal impact on the surrounding ecosystem.

Apart from preserving the environment, Yeow said many developers also designed their projects so that the surrounding elements actually became the highlight of the projects.

“Today, houses built are no longer just boxes on pieces of land. They’re a lifestyle masterpiece.”

Yu ... ‘Environmental awareness will account for more than 25% of the judging criteria at next year’s MPA.’

FIABCI Asia Pacific executive director Yu Kee Su said environmental awareness would account for more than 25% of the judging criteria at next year’s MPA.

For the first time this year, the judging process comprised a three-tier system as part of the organiser’s efforts to raise the bar of the participants, he said. In previous years, the judging process comprised only two levels.

“We evaluate the judging process every year. We get feedback and try to improve ourselves,” he said.

The first tier consists of site visits by evaluators who are senior personnel from the real estate industry. The second tier comprises a jury of senior representatives from various organisations within the property industry while the third tier comprises independent judges from various sectors.

FIABCI Malaysia will be organising the 2010 MPA on Nov 11 in Kuala Lumpur with Malayan Banking Bhd as the official sponsor.

The categories to be contested are: Property Man of The Year, Master Plan, Hotel Development, Office Development, Public Sector, Residential Development (low rise and high rise), Resort Development, Retail Development and Special Award for National Contribution.

Winners of the MPA in their relevant categories will represent Malaysia the following year at the International Prix d’Excellence, an annual competition that honours the world’s best property projects.

By The Star

EPF to call for open bid in 2011

The Employees Provident Fund (EPF) is expected to call for an open tender to develop the 1,214ha of federal land in Sungai Buloh, Selangor, in the second half of next year.

It is learnt that the EPF has initiated a master plan for the land development, which is expected to take six months to a year to complete.

The land, dubbed the "new hub" for the Klang Valley and owned by the Rubber Board of Malaysia, will be split into several parcels to attract local and foreign private property companies.

"The land will not be offered to just one developer. We will be fair and offer land parcels to several companies through an open tender system," a government source said.

Speculation was rife that the EPF would likely appoint Malaysian Resources Corp Bhd (MRCB) as the project's master planner and lead developer since it owns 41.5 per cent of the company.

However, the pension fund said that Kwasa Land Sdn Bhd - its joint venture with the government - would tender individual parcels of land through a transparent process.

The EPF also said that it had requested several developers and property consultants to advise it on the development and feasibility of the land.

The project is expected to have affordable and high-end housing - both landed and high-rise - office towers, shop-offices, retail, hospital, shopping mall, hypermarket, schools and parks.

Prime Minister Datuk Seri Najib Razak has said that the whole project would generate gross development value of RM10 billion.

Some potential participating developers said they would leave it to the EPF to decide how much land to allocate to them and the components to build.

Among them are Glomac Bhd, Gadang Holdings Bhd, IJM Land Bhd, Mah Sing Group Bhd, UEM Land Bhd, Bolton Bhd and MRCB.

A source said the companies could buy small parcels of land to carry out their own projects or develop the land in a joint venture with the EPF on a profit-sharing basis.

"We believe that EPF is likely to parcel out to various developers so that each can introduce new concepts. This will expedite the development as several parcels will be developed concurrently," Mah Sing group chief executive officer Tan Sri Leong Hoy Kum told Business Times.

The project, approved on May 12, will be funded by the EPF over 15 years.

It is understood that the project site will be connected to the Kelana Jaya light rail transit.

By Business Times

Glomac unit buys 18 Suria Stonor apartments for RM38.41m

KUALA LUMPUR: GLOMAC BHD is acquiring 18 units of apartments at the Suria Stonor Condominium project, which was developed by its unit Glomac Regal Sdn Bhd in July 2008, for RM38.41 million.

In a filing to Bursa Malaysia on Monday, Oct 25, Glomac said its wholly-owned subsidiary Berapit Pertiwi Sdn Bhd had entered into sale and purchase agreements with Dekad Darat Sdn Bhd and Progressive Berg Sdn Bhd for the proposed acquisition.

It said the acquisition of the apartment units represented an excellent investment opportunity with strong potential for quick turnaround.

"As the transaction is a bulk purchase, the acquisition is priced at a approximate discount of 35% to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

"As the developer of the project, Glomac is familiar with the product and believes strongly in the saleability of the condominiums in the secondary market at prevailing market prices," it said.

By The EDGE Malaysia

SP Setia upgraded to 'buy' at Kenanga

SP Setia Bhd, Malaysia’s largest property developer, had its stock rating upgraded at Kenanga Investment Bank Bhd to reflect the company’s earnings growth prospects.

The company was raised to “buy” from “trading buy” and its fair value increased to RM5.50 from RM4.78, Yeow Yeonzon, an analyst, said in a report today.

By Bloomberg

Saturday, October 23, 2010

Puncakdana plans RM1.5b Ara Damansara project

Property developer Puncakdana Group plans to build 11 corporate buildings worth some RM1.5 billion in Ara Damansara, Selangor, as it is bullish on demand for office space.

The 11-storey buildings, with about one million sq ft of net lettable area, will enter the market over the next five years, said founder and managing director, Mah Siew Sian.

"We expect that many companies will be moving out of the city centre because of traffic congestion. Some are targeting Ara Damansara, which is a new area and a well-planned township.

"We believe there will be a market for our properties. People want a comprehensive environment which is why there is a success story for Mid Valley City," Mah said.

The group is finalising designs and expects to launch the first two blocks by the third quarter of next year. The buildings will be sold en bloc.

It is already in talks to sell one block to information technology group Formis Bhd for around RM150 million. Several multinational companies in the oil and gas and consumer business are also keen.

The towers will be complemented by the group's new RM280 million retail mall, dubbed CITTA, which will open next January.

Half of CITTA, an open air design three-level mall with 130 retail outlets, have been taken up. Some of the big retailers include Harvey Norman, MBO cinemas and Julia Gabriel and Chiltern House.

By Business Times

State firms should stick with affordable housing

Under Budget 2011, the Government’s proposal to help first time home buyers and those earning less than RM3,000 will benefit those living outside the Klang Valley.

The 10% down-payment guarantee by the Government is limited to houses priced below RM220,000 while the 50% stamp duty exemption on instruments of transfer are for houses not more than RM350,000.

While the move is much lauded and applauded, there are not many landed units priced at RM350,000 and below in the Klang Valley today. Which means those who want to go for this scheme will have to buy a condominium or an apartment.

And if one wants to take advantage of the 10% downpayment, one has to buy a property that is RM220,000 and below. There are, of course, properties further away in the Klang or Shah Alam in this price range. One will be hard pressed to find something within this bracket in Petaling Jaya unless one opts for some densely populated condominium enclave.

With the number of young people migrating to the city in search for work, most of them will have to rent before they eventually buy their own homes.

About 50 years or so ago, the Selangor State Development Corp (PKNS) were building single-storey affordable housing that cost less than RM20,000 in Petaling Jaya. Much of Petaling Jaya then – and today – are leasehold land because they are state land.

Twenty-thousand ringgit may seem a paltry sum today but for folks back then, many had to pawn their jewellery and with the help of relatives, pool money together to have a roof over their heads. Young people from the lower ranks of the civil service benefited from PKNS housing. There was another developer whose mission was to provide civil service in the higher categories with more up-market properties in Damansara Heights, Kuala Lumpur.

Today, things are very different. While PKNS continues to build houses in the urban centres, they seem to be concentrating on building condominiums. A clear example is Kota Damansara, Petaling Jaya where PKNS teamed up with developers in joint-venture developments to build high-rise properties. They do build single-storey houses but these are outside city centres in locations such as Bernam Jaya and Antara Gapi. In Klang, PKNS is building some low-cost flats.

In the aftermath of the financial crisis in 1997/98, affordable housing were those capped at RM250,000 and many private developers went into this segment post crisis. There was a huge demand for them. Several years later, to get better profits, developers went on to build “lifestyles” homes where double-storey houses cost closer to RM600,000.

Because it is becoming increasingly impossible to find houses around the RM350,000 price range in the Klang Valley, perhaps PKNS can think about entering into joint ventures with private developers to build houses which may not be all that affordable.

The government agency is offering a broad spectrum, from low-cost flats in Klang to semi-detached and bungalows in Shah Alam. There is also something to be said about low-cost housing across the board. Simply because they are low cost, developers cut them rather small, at about 600 sq ft of four- or five-storey walk-ups with no management services. These projects have the potential – and some of them do – to become urban slums.

After several years, the place becomes really deplorable because there is no sinking fund and unkempt, because there is no management fees. Eventually, social problems arise. Many of these units are also rented out to foreigners and become crime-infested until the locals living there themselves decide to leave.

With the changes in the economy, global and local, which many have never seen in our life time, housing will only become more crucial in the urban centres. State agencies should consider if they need to narrow down their offering to provide for the less-well-to-do with proper and decent housing that are manageable financially and physically so that they at least maintain their value.

State economic developments corporations like the PKNS and their counterparts can form part of the government machinery to help first time house buyers. In Singapore, there is the National Housing Board to meet this aim. Which is why more than 90% of Singaporeans have their own homes. They do not need to rent. The same goes for Hong Kong. Both Singapore and Hong Kong are relatively more manageable because they are small. But we in Malaysia have various state economic development corporations and providing affordable housing is part of the game plan. So, if it is affordable housing, why go into building bungalows and semi-detached units? Stick with affordable housing.

Assistant news editor Lee Cheng thinks there is a need for state agencies to look into providing affordable housing in urban centres.

By The Star

Warisan Merdeka – a beacon to PNB’s future

The 100-storey 5-star green building is set to attract more interest to the whole development.

BACK in 2000 when Permodalan Nasional Bhd (PNB) was presented the opportunity to buy the 14.5ha where Stadium Merdeka and Stadium Negara are located, it had decided to retain the heritage value of this priceless asset while looking for opportunities to develop the surrounding area.

A decade later, PNB is doing precisely that.

PNB paid RM310mil or RM220 per sq ft to buy the land from Pengurusan Danaharta Nasional Bhd. The market value of the land has since appreciated to RM800 per sq ft today.

From left: PNB deputy president for corporate and international Jamiah Abdul Hamid, Tan Sri Hamad Kama Piah Che Othman, PNB Merdeka Ventures CEO Tengku Abdul Aziz Tengku Mahmud and PNB senior-vice president, head of property division Ibrahim Awang at the briefing.

At a special briefing for media editors on Wednesday, PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman disclosed that the heritage aspect has been fulfilled through conservation works to restore the heritage characteristics of Stadium Merdeka and Stadium Negara. The two stadiums are now being managed by a heritage trust.

Both the stadiums are occupying 6.8ha, which have been identified as a national heritage site.

Hamad says the overall Warisan Merdeka development on the remaining 7.7ha will complement and blend with the heritage theme. He is optimistic that together with the restored stadiums, the site will be another major landmark in Kuala Lumpur.

“We are looking at ways on how to integrate the building aspects of the stadiums with the planning of the overall development of Warisan Merdeka. The heritage part will not be sacrificed and will actually serve as the enhancement factor to the commercial aspects of the building. The heritage preservation of the stadiums will be undertaken by the heritage trust,” he explains.

Construction work on the 100-storey Warisan Merdeka tower will kick off next year.

Touted to be the country’s tallest when it is completed in 2015, the building will cost RM2.5bil to RM3bil. It will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space.

Hamad says the five-star green building will be the “beacon” to create more excitement and attract more interest to the whole development.

This will be followed by two subsequent phases comprising a shopping complex and condominiums. The whole development, to be undertaken over a 10 year period, will cost RM5bil.

On the rationale for mooting the project, Hamad says: “Since the plan to develop the land was approved by the PNB board in 2004, we were waiting for the right time to proceed with the project.

“The concept of 100-storey building, its retail portion and the condominium was mooted in early 2004 taking into account the need for enhancement of value and effective utilisation of the 19-acre land adjacent to Stadium Merdeka and Stadium Negara. In 2005, the master plan was approved by the municipal authorities followed by final titles being issued in 2008. The principle concept of PNB Iconic Building was then approved in 2009.”

He says that having held the land for so long, “we feel it is now the right time to go ahead. The Government is also promoting this type of development.”

Hamad stresses that most importantly, by initiating the Warisan Merdeka project, PNB is taking the lead to preserve the historical value of Stadium Merdeka as the site for the country’s declaration of independence back in 1957.

Emphasising that PNB is not looking to compete with anybody when it decided to put up a 100-storey tower as part of the Warisan Merdeka development, he says it will make more economic sense to build the high-rise tower than lower rise buildings.

He says as a state investment agency, PNB’s main concern is to maximise return for its stakeholders. “Each year, PNB declares income distribution of 6% to 7% to unitholders. The project with expected yields of between 8% and 10% will be able to meet our responsibility as an investment agency.”

Meanwhile, the new tower will be able to meet PNB’s need for new office space in line with its strategic positioning for the future.

Hamad says PNB will be moving out from its present headquarters, Menara PNB, which will be 30 years old when the tower project is completed, to the Warisan Merdeka tower upon its completion.

PNB has set up wholly-owned unit, PNB Merdeka Ventures Sdn Bhd to undertake the project. Helming it since early this year is Tengku Abdul Aziz Tengku Mahmud who was formerly from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd.

So, will Warisan Merdeka be an iconic project and will there be foreign expertise involved such as the like of world renowned architect Cesar Pelli who designed the Petronas Twin Towers?

Hamad says the project design plans are still in the drawing board.

“We are in talks with several parties comprising experts from the relevant fields. We are exploring the possibilities of creating a strong architectural and engineering team for the project,” he adds.

With its latest venture, PNB is certainly thrusting ahead with its plans to build up its presence in the local property scene.

By The Star

Towering message to deliver

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the 100-storey project were adequately addressed.

The apparently growing opposition to plans by Permodalan Nasional Bhd (PNB) to build a 100-storey skyscraper as part of the Warisan Merdeka integrated project is a classic example of what can go wrong when information is either badly presented or poorly received.

Prime Minister and Finance Minister Datuk Seri Najib Razak, when announcing the project in his 2011 Budget speech on October 15, said the landmark, which will be developed by PNB, is to be completed by 2020.

The project would comprise a 100-storey tower, the tallest in Malaysia, and would retain Stadium Merdeka and Stadium Negara as national heritage. The total project cost is RM5 billion, with the tower to be completed by 2015.

Within minutes after the speech, the Opposition picked on the mega project, calling it a waste of funds. Put the money to better use by building more schools, improving rural infrastructure, and helping the needy, they said. It would affect returns from PNB unit trusts, others echoed.

Suddenly, in their eyes, Warisan Merdeka became a government-funded project. It wasn't. It was PNB's, and PNB is not in the business of building schools or upgrading roads and electricity supply.

Similarly, a facebook group - 1M Malaysians Reject 100-storey Mega Tower - was set up (it is not immediately clear by whom) and has more than 92,000 fans as at 5pm yesterday. The project is also a hot topic on blogs and Internet forums.

PNB had a press conference on October 20, five days after the budget, where we came to know that the project would also have a shopping complex and condominiums, and that the tower itself would cost RM2.5 billion to RM3 billion. The RM5 billion figure included other components of the development, and also factored in improving infrastructure in the area.

Its president and group chief executive Tan Sri Hamad Kama Piah Che Othman is confident that Warisan Merdeka will create spillover benefits. For starters, it will generate about 5,000 jobs in the development stage, and boost property prices in the area.

He said PNB has the capability to finance the project through internally-generated funds, and as an investment house, would seek to optimise returns from the development. It expected to yield returns of 8-10 per cent.

This has been PNB's policy with all its investments over the years, and its track record speaks for itself.

We also learnt that PNB had been planning to develop the land since 2004, conducted annual reviews, and decided that now was the right time to do it. Clearly, this wasn't a flight of fancy hatched up one night just to boast as some people perceive it to be.

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the project were immediately and adequately addressed.

In the days to come, there could well be legitimate concerns about Warisan Merdeka and PNB's role in it, particularly on the part of its more than nine million unitholders, and Malaysians in general. The government, too, needs to clear up remaining confusion and scepticism about the project's benefits.

Let's hope the message gets across better next time.

By Business Times