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Monday, January 11, 2010

Property perking up

Gamuda Land will launch its second gated-and-guarded precinct at Bandar Botanic in Klang next month.

PETALING JAYA: The local property market is in for a brighter prospect this year as the economy is forecast to return to growth while prices are now at affordable levels.

A recent CIMB Research report said that due to moderate price appreciation, rising income and record low interest rates, affordability of residential properties in Malaysia was at its all-time best.

It said that for this year, developers such as E&O Property Development Bhd (E&O Prop) would focus on its maiden condominium venture at Seri Tanjung Pinang, Penang.

“The RM1.8bil project will kick off with the official launch of the first block this month, which includes an aggressive awareness campaign,” it said.

E&O Prop would also work towards the launch of a new condo in Kuala Lumpur as its St Mary Residence project had already reached a critical milestone, with a combined take-up of 60% for the two blocks, it said.

“For SP Setia Bhd, the group is targeting to sell a minimum RM1.6bil worth of properties in FY09/FY10.

“It will continue to focus on its core competency of township development but at the same time, lay foundations for a big improvement in profits over the longer term from two fronts – commercial-type properties in the Klang Valley and overseas contribution from Vietnam and China,” it said.

The research house said that a year ago, most developers’ strategies were to hold off on new launches, consolidate their business activities and change the product mix to weather the storm.

“Now, most developers appear optimistic about longer-term prospects and are willing to take on more risks,” it said.

DTZ Nawawi Tie Leung Property Consultants Sdn Bhd deputy managing director Adzman Shah Mohd Ariffin said new residential launches in the Klang Valley this year would focus on mainly high-end properties in well-established locations.

These are the KL City Centre/Golden Triangle, Jalan Tun Razak corridor, Mont’ Kiara/Sri Hartamas and Mid Valley/Seputeh.

He said landed properties would still be sought after as land became scarce in and around KL city and increasing preference for low-density boutique developments.

“Features such as better security, individual pools, greeneries, panoramic views and aesthetic designs will continue to be incorporated in the developments.

“Prices will continue to be tested at increasingly higher levels but will largely depend on the positioning of the products and the performance of the first phase launched in the last three months,” Adzman told StarBiz in an e-mail reply.

He added that innovative packages such as stretched instalment periods and low downpayment offered by developers, coupled with attractive rates offered by financial institutions, would continue to spur buying.

“As long as the base lending rate stays at its current level, the market is expected to remain active albeit at a slower rate unless the economic recovery is expedited,” he said.

He added that the Government’s recent review of the real property gains tax would also help the secondary and sub-sale market.

Glomac Bhd said the company would launch new phases at its township this year but didn’t give details on when they would take place.

A spokesman said the new phases would be at Bandar Saujana Utama, Saujana Rawang and Sri Saujana (Johor Baru).

Gamuda Land Sdn Bhd told StarBiz that it would, at end-February, launch its second gated-and-guarded precinct, Ambang Botanic 2, at Bandar Botanic in Klang.

A company spokesman, in an e-mail reply, said the new project following its earlier Ambang Botanic 1 was prompted by the increasing demand for gated-and-guarded living.

By The Star (by Edy Sarif)

Gadang upbeat, plans new projects

DEVELOPER and construction firm Gadang Holdings Bhd is upbeat on the property outlook for this year and planning several new developments in the Klang Valley.

Managing director Tan Sri Kok Onn said the company has 46ha of prime land in the Klang Valley, Penang and Johor for development.

Kok told Business Times that he was expecting the landbank to generate a gross development value exceeding RM700 million over the next five years.

He said the company, through development arm Gadang Land Sdn Bhd, will build medium- to high-end houses, condominiums, offices and shoplots.
Kok declined to give specifics as the projects were still in the planning stage.

"We are optimistic of the industry but will remain cautious, especially with our high-end developments, as people are still careful with their money," he said.

Gadang's ongoing developments are mostly priced in the medium range.

They include retail, office suites and three-storey superlink homes in Segambut, Kuala Lumpur; medium- and low-medium-cost apartments in Sungai Buloh, Selangor; and single-storey terraced houses and single-storey semi-detached houses in Rawang, Selangor.

However, Gadang will be moving to the Mines area in Seri Kembangan, Serdang, within the next 12 to 15 months to develop seven super-luxury bungalows, worth a combined RM40 million, or more than RM5 million each.

The bungalows will be built on 74.8 sq ft of leasehold vacant land offered by a boutique developer in Mines.

"We are working on the designs and layouts. We hope to launch the units by the end of this year or early next year," Kok said.

Gadang's wholly-owned unit, Gadang Engineering (M) Sdn Bhd (GESB), will secure the land from Bluwater Development Bhd (formerly Mines Resort Bhd) as contra for debts owed by the latter.

Bluwater owes GESB some RM34 million for completing main building works two years ago for a commercial block and a tower featuring offices, serviced apartments, shoplots and facilities in Mines.

Bluwater is a unit of Clearwater Group, controlled by Dian Lee Cheng Ling, eldest daughter of property tycoon Tan Sri Lee Kim Yew.

By Business Times (by Sharen Kaur)

IGB raises MiCasa price tag to RM250m

IGB Corp Bhd, which owns and operates the MiCasa All Suites Hotel in Kuala Lumpur, is still interested in selling the property - but the price tag is much higher now.

Its executive director Tan Boon Lee said the hotel, which reopened last month following a two-year RM85 million renovation exercise, is now valued at RM250 million.

"If the price is right, why not?" Tan said, when asked if IGB would still be keen to sell the asset, as it did two years ago.

MiCasa closed its doors at the end of 2007 and IGB was looking to either sell the property or to give it a makeover.
The renovation is the five-star property's first major refurbishment since its opening 21 years ago.

General manager James Loo, in a recent interview with Business Times, said it expects that it will take six to seven years to recoup its RM85 million investments.

Located off Jalan Tun Razak, the hotel had its soft opening on December 9 2009 with the opening of 58 rooms from a total inventory of 242 rooms.

MiCasa plans to open a floor each week. Today, it has already opened 100 rooms.

Loo said that that following the upgrade, the hotel hopes to see gross operating profit (GOP) improve to 48 per cent from 45 per cent previously.

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

In the first year of operations, MiCasa is targeting an average room rate (ARR) of RM300 and an occupancy of 65 per cent. A bulk of its market will be the long-staying corporate travellers.

"MiCasa used to have a lot of diplomats, embassy and oil and gas guests at our hotel," Loo said, adding that it plans to rope in this clientele as it now has a better product.

The hotel's business-to-leisure revenue split was 85 to 15 per cent. And it plans to keep this ratio.

Prior to its closure at the end of 2007, MiCasa posted an ARR of RM270 and an occupancy of 75 per cent.

Loo said that year-on-year growth from 2011 onwards will be RM300 in ARR and 5 per cent in occupancy.

The hotel, Loo said, was stripped bare to its structure, with the entire mechanical and engineering work redone.

By Business Times (by Vasantha Ganesan)

Maymont expects RM700m sales from luxury super condos

KUALA LUMPUR: Maymont Development Sdn Bhd expects to sell all 158 Matahari luxury super condos worth a total of RM700 million in Desa Sri Hartamas in six to eight months, said its head of sales Prabu Anathan.

"About 43% of the units has been taken up largely by local buyers for both investment and staying purposes," he told a media briefing here yesterday.

Construction work on the project started in 2007, and it is poised to be completed in 2011.

"The construction work now is about 35% completed, and we are expecting to hand over keys to the owners in 2012," Prabu said.

The 5.2 acres Matahari project is located next to Damansara Heights, near Kenny Hills. It consists of 129 superior, 12 duplex and 17 penthouse units, ranging from 3,090 to 10,823 square feet. The prices range from RM3.11million to RM10.77million. Prabu said investors could impressive rentals per annum for their monthly mortgage repayments.

"The concept of a 'bungalow in the sky' not only makes its position unique among other condominiums but also makes this ideal property for Malaysia's expatriate rental market," he said.

He added: "We estimate that the superior units would attract rentals of between RM16,000 and RM18,000 per month, giving a yield of about 6% per annum and enabling banks to offer financing of up to 90%."

Each luxury super condo will have three allocated car park bays, while the penthouses are entitled to four.

By The EDGE Malaysia (by Darlene Liew)

Sutera Harbour Resort up for sale?

The five-star 956-room Sutera Harbour Resort in Kota Kinabalu, Sabah, is up for sale for an estimated RM1.5 billion, sources say.

Sprawling over 155.5 hectares of reclaimed land, the asset includes two hotels - The Pacific Sutera and The Magellen Sutera, a 27-hole golf and country club and a 104-berth Sutera Harbour Marina.

The Pacific Sutera and The Magellen Sutera have 500 and 456 rooms, respectively.

The property is understood to be owned by Singaporean Datuk Edward Ong Han Nam through OCK group of companies.

Sutera Harbour, which opened in 1998, is said to have met several real estate agents for a possible disposal of the property.
It is unclear if any offers have been made.

Sutera Harbour neither confirmed nor denied if the property has been put up for sale when contacted.

"As far as the management is concerned, there is no change in the corporate structure of the company," Sutera Harbour Resort director of public relations Nilakrisna James said in an e-mail to Business Times (BT).

This OCK Investment Pte Ltd's project was reported for a planned RM1.2 billion resort-cum-residential development. OCK is a family-owned company which is mainly involved in the construction and property development.

In an agreement with the Sabah state government, the state had the option to take up to a 20 per cent stake in the Sutera Harbour Resort project. However, BT was unable to ascertain if the state had exercised the option.

By Business Times (by Vasantha Ganesan)

UEM Land rights to raise RM970m

UEM Land Holdings Bhd (ULHB) plans to undertake a rights issue to raise gross proceeds of approximately RM970 million.

In a statement today, ULHB said the proceeds would be used for repayment of borrowings, payment for the acquisition of land in Cyberjaya and for property development and working capital purposes.

Its managing director and chief executive officer, Wan Abdullah Wan Ibrahim, said the rights issue would allow the company to raise funds to repay borrowings and reduce interest cost which would lead to a more robust capital structure.

"Further, the inflow of capital for our property development activities will accelerate the realisation of value from our Nusajaya land bank and spur ULHB’s future earnings growth," he said.

Wan Abdullah said ULBH has a number of property projects in the pipeline which were due to be launched soon and was confident confident they would be well-received by the market.

"We are also optimistic that for 2010, the overall property market in Malaysia will outperform 2009 -- particularly for Johor where we expect a lot of excitement arising from the successful implementation of Iskandar Malaysia’s initiatives and the spillover demand from Singapore with the recovery of Singapore’s property market and the opening of the Marina Bay Sands and Resorts World Sentosa," he said.

ULHB said UEM Group Bhd (UEMG), its major shareholder, has provided irrevocable written undertaking to subscribe for its entitlement in full under the proposed rights issue.

"As at December 31, 2009, UEMG holds directly 1.873 billion ULHB shares, representing 77.14 per cent equity interest in ULHB.

"The remaining portion is expected to be underwritten," it said.
It said subject to all approvals being obtained, the proposed rights issue was expected to be completed by April 30, 2010.

By Bernama

UEM Land proposes rights issue to raise RM970m

KUALA LUMPUR: UEM LAND HOLDINGS BHD has proposed to undertake a rights issue to raise up to RM970 million of which the bulk would be used to repay the UEM Group term loan of RM633 million and RM266.2 million for property development.

UEM Land said on Monday, Jan 11 the rights issue, while enabling it to repay the loan, would enable it to achieve a more robust capital structure.

"In addition to reducing debt, the proposed rights issue will also increase the UEM Land's shareholders' funds, which would improve its gearing level. In this respect, the group is also expected to be better-positioned to obtain debt funding for its future business development and expansion activities," it said.

UEM Land the corporate exercise would enable it to raise funds (without incurring interest costs) to part finance the Cyberjaya land acquisition and for property development expenditure, payment of outstanding trade payables and general working capital purposes which are expected to contribute positively to the future profitability and/or cashflow position of the group.

"In addition, the Cyberjaya land acquisition is expected to provide further diversification of the UEM Land group's future earnings," it said.

UEM Land said as compared to a private placement of new equity securities in UEM Land, the proposed rights issue would allow all of UEM Land's shareholders to participate in an equity offering on a pro-rata basis to avoid dilution of interest and to acquire new shares at a discount to prevailing market prices.

It said UEM Group Bhd, a major shareholder of UEM Land, would subscribe in full its entitlement under the rights issue. As at Dec 31, 2009, UEM Group holds directly 1.87 billion UEM Land shares or 77.14%. Under the exercise, UEM Group’s minimum subscription amount will be about RM748.2 million.

By The EDGE Malaysia (by Joseph Chin)

Beijing vows to keep 'hot money' out of property market

BEIJING: China vowed yesterday not to let foreign speculative investment affect the property market, the latest expression of official concern that real-estate prices are racing ahead too fast.

The directive from the State Council, China's Cabinet, will serve as a guideline for local authorities and ministries, including the People's Bank of China and the China Banking Regulatory Commission, to work out detailed policies.

"Relevant departments must enhance monitoring of loans and cross-border investment to prevent illegal inflows of capital into the property market and to avoid the impact of overseas hot money on China's real-estate market," the Cabinet said.

It said the central bank and banking regulator should step up oversight and "window guidance" of mortgage lending.
About one-sixth of China's nearly 10 trillion yuan (100 yuan = RM49.48) in new loans last year flowed into the property sector.

Concerned that a property bubble could stir social and economic instability, Beijing has vowed to combat overly fast price increases, although its moves to date, such as restricting sales tax exemptions, have been relatively mild.

The Cabinet urged local authorities, especially in cities where housing prices are rising sharply, to increase the supply of affordable housing.

It reiterated that it would curb house buying for "investment and speculation purposes" and keep the minimum down payment for purchases of second homes at 40 per cent.

Separately, China's finance minister said the government would likely spend the full amount of its planned stimulus in 2010, despite improvements in its economy and efforts to control bank lending.

Finance Minister Xie Xuren's comments could help to reassure companies and investors that Beijing will keep spending to shore up growth.

Xie said Beijing plans to spend 992.7 billion yuan on public investment in 2010, Xinhua News Agency reported, including 572.2 billion yuan of stimulus funds.

The state-run news agency gave no indication whether Xie's comments included whether the rest of the stimulus due to come from other levels of government also would be fully spent.

Xie's comments add to a string of assurances that official aid will continue, especially to private companies, which missed out on the first year of the stimulus. - Agencies

By Business Times

S.Korea announces multi-billion dollar plan for new city

South Korea's government Monday announced a 14.6 billion dollar blueprint to develop a new city as a science and education hub, dropping controversial plans to move several ministries there.

The country's biggest business group Samsung has signed a deal to move some operations to Sejong City, along with the Hanwha, Woongjin and Lotte groups, said Prime Minister Chung Un-Chan.

Monday's announcement officially scraps a plan announced in 2005 by then-President Roh Moo-Hyun to relocate nine ministries and four subsidiary agencies to the city 150 kilometres (94 miles) south of Seoul.

Roh's liberal government said the aim was to promote balanced regional development in a country where almost half the population lives in Seoul or surrounding cities.

The plan was also attractive to the Chungcheong region, whose traditionally uncommitted voters have often swung elections.

But the current conservative government decided not to go ahead with it, despite strong opposition within the ruling Grand National Party.

Chung's office said in a statement the previous plan "would have resulted in inefficiency and waste" of national resources.

"The government has decided to create an economic hub centred on education and science in Sejong City with public and private investments of 16.5 trillion won (14.6 billion dollars) in total," Chung said in a statement.

"We expect Sejong will grow into a self-sufficient city with a population of 500,000 with 246,000 new jobs by 2020."

The city is named after the revered 15th century monarch who invented the country's written alphabet.


Sunway Vivaldi gets green mark cert

SUNWAY Vivaldi of Sunway City Bhd has received the coveted green mark certification from Singapore's Building and Construction Authority (BCA).

The BCA green mark was introduced in January 2005 as a key strategic programme to raise the awareness of sustainable and environmentally friendly buildings.

The benefits of a green mark building include the cost of savings from efficient use of key resources such as energy and water, leading to lower operation and maintenance costs.

"Excellence in green buildings is a commitment of the company.We are very happy that this has been recognised by the Singapore BCA," said Suncity property development division managing director, Ngian Siew Siong.

By Bernama