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Saturday, March 13, 2010

Sime Darby Property launching new project

Datuk Tunku Putra Badlishah Tunku Annuar with a model of Sime Darby Property’s Seri Pilmoor in Ara Damansara. The high-end residential development will be launched today.

PETALING JAYA: Sime Darby Property Bhd plans to launch at least one project a month in the next six months. It is launching a high-end residential development called Seri Pilmoor in Ara Damansara today.

The project, with a gross development value of RM469mil, comprises 74 bungalow units and 34 semi-detached homes. The bungalows are priced from RM4.57mil while the semi-detached units start from RM2.8mil.

Managing director Datuk Tunku Putra Badlishah Tunku Annuar said the company targeted to sell all the units within two years, but added that the full take-up could be sooner.

“We’ve been fortunate that our recent projects have all achieved 80% sales rate within three months of launching,” he said at a preview of Seri Pilmoor yesterday.

“Seri Pilmoor is the last freehold residential project to be launched in Ara Damansara. I’m positive about sales for this project. The feedback has been good,” he said.

Sime Darby Property is initially launching 34 units each of the bungalows and semi-detached homes. Tunku Badlishah said a decision had yet to be made on when it would launch the remaining bungalow units.

Sime Darby Property is also launching a project this weekend in Denai Alam, sited along the Guthrie Corridor Expressway and about 5km north of Bukit Jelutong.

Tunku Badlishah said the company had planned to launch the project three months earlier but it was delayed because it wanted to add new features to the homes.

On another note, he said the company was in constant negotiations with other parties to explore potential partnerships. It recently tied up with Sunrise Bhd to develop a RM1bil commercial development in Bukit Jelutong.

“There are many companies that have approached us. We’re open to joint ventures and we continue to have negotiations with several parties that are interested.

“But there has to be some synergy involved through the JVs and it’s something that we continue to pursue,” he said.

Tunku Badlishah said Sime Darby Property, the property arm of Sime Darby Bhd, accounted for 12% of group revenue.

“Our plantation division is very large and it’s hard to catch up. If palm oil prices go up this year, we’ll fall further behind.”

He said Sime Darby Property had a profit margin of 28%.

By The Star

Sime Darby Prop expects to maintain profit margin

SIME Darby Property Bhd expects to maintain its 28 per cent profit margin for its developments this year.

Its managing director Datuk Tunku Putra Badlishah said he is confident of achieving that level as the company is among the best in the industry, and would help push it forward.

He said by maintaining profit margin at 28 per cent, coupled with more launches this year, the company's property division could contribute more to Sime Darby Bhd's overall net profit.

The division, which has 10 on-going projects worth over RM15 billion, contributed 12 per cent to the group's net profit last year.
Sime Darby Property is also involved in property investment, but contribution from this is still minimal.

"We were number one last year in terms of profitability among the industry players and hope to maintain that," said Tunku Putra Badlishah.

He said the company will do better this year and the 80 per cent sales achieved from new launches in the last quarter was testimony.

Sime Darby Property will launch new products monthly for the next six months as its confident of the market, Tunku Putra Badlishah said.

Yesterday, it unveiled its first landed strata development in Ara Damansara, Selangor, called "Seri Pilmoor", worth RM469 million.

Additionally, it will launch new houses in Denai Alam and USJ Heights.

On Seri Pilmoor, the company hopes to sell all the units in less than 24 months.

The project is slated for completion by March 2013. It features 74 bungalows from 6,500 sq ft and 34 semi-detached homes from 4,600 sq ft.

The first phase of the project, to be launched this month, will include 34 semi-dees and 34 bungalows, priced from RM2.8 million and RM4.4 million respectively.

By Business Times

Going green with buildings

Goldis and Ken Holdings believe this is where property development is heading.

There was a time some 20 years ago when being green was fashionable. Many felt it was just hype; like most passing fads, it would go away. It did not.

Instead, being green took on different hues. While issues like forest degradation and saving turtles continue to matter, being green has taken on a new persona. It has gone corporate.

GTower’s green rooftop. The grass is irrigated by harvested rain water. Inset: Colin Ng

In the property sector, the green movement is making its mark on buildings. Two current examples are Goldis Bhd’s GTower, a Grade A++ office building in Jalan Tun Razak, and Ken Holdings Bhd’s Ken Bangsar, a serviced apartment on commercial land. Both are commercial developments. And there are others.

GTower comprises an office and executive suites, a 180-room business hotel and a club that caters to its guests and tenants, while Ken Bangsar has over 80 units.

Going green has been an exciting challenge and adventure for Goldis head of corporate investments Colin Ng and Ken Holdings managing director Kenny Tan as it involves not only the hardware but the software as well, such as sourcing for carpets and planter boxes made with recyclable materials.

“We initially wanted to build an energy-efficient building and were advised to just ‘go green’ instead. The effect of this was the cost of glass used tripled, cost of air-conditioning system and lighting went up by a third each,” says Ng.

Says Tan: “A green building always has higher value. This is the trend moving forward for property developers. Caring for the earth is a social responsibility of all parties.”

There are five pillars to satisfy in order to get the coveted Green Mark award. Audits are done every two years. The pillars are:

Energy efficiency

This includes air-conditioning, heating and lighting. Air-conditioning takes up as much as 45% of commercial energy consumption. That part of the building which bears the greater heat from the sun will have more concrete and less glass.

Incidentally, GTower is among the first to use double glaze which traps layers of air in between. This helps reduce noise pollution and heat.

Generally, buildings relying more on natural lighting will use more glass. This means there will be greater usage of air-conditioning. To solve this, GTower advocated the use of an energy-efficient air-conditioning system which includes a chiller plant system.

GTower will also have motion sensors in toilets and staircases. Lights will automatically switch on when sensors are activated by movements in these areas.

Lobby and car parks will have photo sensors. Escalators and lifts will have dual mode systems in which escalators will operate on a slower speed when not in use. For parts of the building that gets direct heat from the sun, less glass is used.

Ng says some of the lighting used is about RM200 a piece compared to non-energy saving ones priced at RM30 a piece.

The company discovered that being green does not stop with the hardware. In order to get recognition from Singapore’s Green Mark scheme, carpets, timber, furniture and its fit-out had to be made from recyclable materials.

For example, its timber deck is made up of timber and 60% rice husk. Some of its planter boxes are made from timber doors recycled by a Chinese company.

The wooden strips on part of its club floor and walls come from the timber deck in Menara Tan & Tan. The buzzword, says Ng, is recycle and reuse.

To reduce heat, the top of roofs will also be landscaped and some walls – or vertical greening – like the one in the lobby, will be embellished with real plants using an irrigation grid-like system from Canada.

Over at Ken Bangsar, its key features includes the orientation and sunshade of the building, the type of paint used, the noise level and water consumption among others.

Putting his engineering knowledge to use, Ken Holdings executive director Sam Tan created an air tunnel in the building’s lobby area to ensure a continuous cool environment.

To save energy, motion sensors are used. As air conditioning makes up the bulk of energy usage in a household, Ken Bangsar used only multi-split inverters for its air conditioners to ensure 60% energy savings.

Water efficiency

Because of the country’s large amount of rainfall, GTower will harvest rain water to irrigate the landscaping and vertical greening. The idea is to reduce the use of potable water for its rooftop gardens. The company will also collect condensate water from its air-conditioning units.

Ng also claims that GTower has water-efficient fittings in toilets, shower and pantries.

Ken Bangsar is the first residential development to provide water closets (WCs) with eco-friendly and water-efficient built-in bidet seat covers. The penthouse units enjoy the luxury of the world’s most technologically advanced WC, the Toto Neorest, chalking up yet another first in the country.

Site and project management

GTower will also be linked to the light rail transit (LRT) line for the convenience of guests, and waste will be recycled. Says Ng: “Our proximity to the LRT is a green factor because we want to encourage our guests to reduce emission of carbon monoxide (CO). Our car parks will have special spaces for hybrid cars.”

Like GTower, Ken Bangsar also boasts extensive landscaping. Right from the start, a sunk cost of RM500,000 was spent building a reinforced concrete wall to cover up two unsightly reservoirs as well as landscape the entire 200 metres along Ken Bangsar.

Indoor environmental quality

Goldis has also installed a system to monitor the level of CO in basement car parks. Once it exceeds a certain level, the system will pump fresh air into the basement car parks. It will also have a system to monitor the carbon dioxide inside the building.

Innovative installations

The Green Mark scheme also looks at other environment-friendly measures such as the use of salt chlorinators in swimming pools, the presence of a recycling corner and various other cooling systems.

Ng says the cost of constructing GTower is marginally higher (15% more) than that of a non-green building. He says if the company had embarked on this project five years ago, the cost would have been lower.

Kenny says developers are initially apprehensive about constructing green buildings as the cost of construction is easily 18% to 20% higher.

Those that spearhead the movement may face challenges, like Ng, who had to source for fittings made from recycled materials from around the world, simply because Malaysia did not have them.

Nevertheless, both companies went into it despite the challenges because they believe this is where the green movement is heading.

By The Star

Determining property prices the healthy way

BANK Negara’s decision to raise the overnight policy rate (OPR) by 25 basis points on March 4 must have jolted many people out of their slumber into realising that the days of low lending rates may be numbered.

While some Malaysians, especially those who are risk-averse and prefer to keep their savings in banks, are rejoicing that interest rates on deposits are on the way up, there are those who must be apprehensive that they will have to fork out higher loan interest payments.

Those in the second group, including corporate and retail borrowers, should recognise that the low interest rates that they had been enjoying for close to two years came at a cost.

Malaysians generally have a high propensity to save and the all-time low interest rates have been frowned upon by savers, especially the retirees who are mostly dependent on their interest income to get by in their golden years.

It is only fair that they be compensated for their prudence – a strong trait among Asians that may have saved the region from further financial quagmire brought on by a widening sovereign debt crisis in some western economies.

The recent OPR hike will certainly not be the only adjustment by the central bank, considering the country’s lending rates are still at record lows.

We can expect more upward adjustments in the coming months as there is still room for rates to rise at least another 50 basis points should Bank Negara act in response to a stronger local economy.

Normalising the interest rates by allowing it to be decided by actual market forces of demand and supply is certainly more healthy.

Although there are now more avenues to invest one’s savings, property is clearly a favourite.

Most of the big property companies are raking in record sales and some of the projects, especially those in Penang and the Klang Valley, are once again selling like “hot cakes”.

Although there is no property bubble – a situation where prices escalate to artificially high levels that do not reflect the actual market fundamentals of demand and supply – there may be a chance of this happening if we are not careful.

We only have to look at the many condominium blocks in the Kuala Lumpur City Centre locality. Their prices have fallen by up to 30% as demand for high-rise residences is still quite lethargic, with no signs of a recovery anytime soon.

The huge price correction can be attributed to a high percentage of investors and speculators in that market segment compared with the owner-occupier buyers.

Hence, there is a need to rein in speculation in our property market. Higher interest rates also signify confidence that the market will hold out well.

It will complement the move to reinstate the real property gains tax, albeit at a flat 5% for all property sales within the first five years of purchase.

Curbing excessive speculation will help prevent overheating in the market.

Property prices should be determined by actual demand and supply forces and not by artificial means.

● Deputy news editor Angie Ng hopes the normalisation of interest rates will ensure a more balanced and healthy property market – one that is not too expensive for the common folk.

By The Star

Encorp proposes to raise RM134mil

KUALA LUMPUR: Encorp Bhd announced yesterday that it plans to raise RM134.1mil for new projects and working capital.

In a filing with Bursa Malaysia, Encorp said it proposed to make a renounceable rights issue and a placement to identified investors of up to RM134.1mil of nominal value five-year 6% redeemable convertible secured loan stocks (RCSLS) at RM1 each.

A free detachable warrant will be given for every two RCSLS. The coupon rate of RCSLS is payable on a quarterly basis. The RCSLS is convertible into fully paid new Encorp shares during the conversion period, with an option for RCSLS holders to require Encorp to redeem part or all outstanding units at the end of the third year.

Datuk Seri Effendi Norwawi … ‘We will continue on the success of our current flagship development at Encorp Strand.’

Chairman Datuk Seri Effendi Norwawi said in a statement that the RSCLS would allow shareholders to increase their equity and participation in the company’s future growth.

On new projects, he said: “We will continue on the success of our current flagship development at Encorp Strand, Kota Damansara, for which buyers have enjoyed high capital appreciation from a distinctive project concept, innovative design, quality finishes and timely delivery.”

He said Encorp aimed to incorporate the latest ideas and technology to create excellent value for customers.

Effendi said the company was encouraged that two of its latest products – Garden Office @ Encorp Strand and Camelia in Cahaya Alam – respectively were already 71% and 91% sold just from soft launches.

“The next two to five years will see the completion of more features in Encorp Strand to make it the most vibrant commercial development in Petaling Jaya,” he said.

Encorp’s property projects have a combined gross development value of RM2bil, while its construction division currently has booked work amounting to RM1.6bil.

Encorp’s business expansion follows Effendi’s return to the private sector in September 2009 to lead the company, after holding several ministerial positions.

Effendi said he had set high challenges and benchmarks for his team to focus on achieving highest quality, standards, value and service (QSVS).

“Internally, we are aligning all efforts to our common vision for Encorp to be a frontrunner in providing QSVS unrivalled by others. If you buy an Encorp product, you are guaranteed QSVS,” he said, adding that the new focus had resulted in a thorough review of processes to match and exceed industry standards.

“These have included a re-look at designs to make future projects more unique and innovative to give customers exciting and value-for-money products,” Effendi said.

Similarly, the incorporation of new systems had enabled online tracking of construction progress to ensure Encorp delivered on time or ahead of schedule, while running at optimal cost and providing excellent quality, he added.

By The Star

Tender to redevelop Carcosa called off

It is understood that at least nine bids for the rejuvenation of the 98-year-old boutique hotel, Carcosa Seri Negara, have been received

The government has called off the tender for the redevelopment of Carcosa Seri Negara, a boutique heritage hotel in Kuala Lumpur, barely five months after calling and receiving bids for it.

The move came as a surprise to bidders who have been waiting the outcome of the tender offer. When contacted, some bidders said that they have yet to receive the government's notification.

In a letter dated March 4 this year addressed to Business Times, the Property and Land Management Division of the Prime Minister's Department (BPH) said that it has decided to cancel the invitation for request for proposal (RFP) advertised on October 2 2009. It did not give a reason for the cancellation.

It said that a new date for a RFP will be made in the future and the parties will be invited to put forward their proposals.
The letter, signed by the director-general Hasnol Zam Zam Ahmad, said that the department apologises for the inconvenience caused.

It is understood that the department had received at least nine bids for the rejuvenation of the 98-year-old boutique hotel.

Hasnol could not be reached for comment yesterday.

It remains unclear why the bid has been cancelled. However, industry observers said there may have been some objections and concerns from an environmental and preservation point from the public as Carcosa is a heritage site and is located within a green lung of the city.

As such, the new requirements may be more restrictive, a source said.

During a briefing on October 9 2009, an officer from BPH had announced that bids were to be submitted by October 29.

Some 17 people had attended the briefing. They had lamented that the timeframe to submit the proposal was too short. Following this, the date was extended by two weeks to November 13.

The RFP document highlighted that the proposer must bear all upgrading costs and pay a monthly rental. The developer/operator must also propose a profit-sharing deal with the government.

The government had wanted bids from candidates with strong financial standing, wide experience and recognition in hotel and resort management and one with a chain of hotels/ resorts in Malaysia and abroad.

The applicant should own a hotel brand and have a proven administrative and management track record.

The same officer had also announced that Carcosa will be closed for renovation from January 1 this year and the duration of the closure will depend on the extent of work that was proposed.

All the investment was to come from the private sector, unlike previously when the government paid for all the renovation and refurbishment.

By Business Times

Naim plans 'Solar Oasis' concept

PROPERTY developer and builder Naim Holdings Bhd is working on a concept for a development in Libya with its General Board of Privatisation and Investment (GBPI).

"We will use the next six months to come up with the concept," Naim managing director Datuk Hasmi Hasnan told reporters after signing a memorandum of understanding with GBPI in Kuala Lumpur yesterday.

GBPI, which owns 100ha 30km from the Tripoli City Centre, is planning a mixed development, known as "Solar Oasis".

The Solar Oasis Science and Business Park will be the first of its kind in Libya, aimed at being a hub for alternative and renewable energy, GBPI board chairman Dr Gamal N. Al Lamushe said. Lamushe is also Libya's Minister of Privatisation and Investment.

By Business Times

Hektar REIT sells land to Govt

KUALA LUMPUR: Hektar Asset Management Sdn Bhd, the manager for Hektar REIT (real estate investment trust), yesterday announced the Government has acquired 0.1331 ha from Hektar REIT.

The deal, done under the Land Acquisition Act 1960, was for the proposed extension of the Kelana Jaya Light Rail Transit Phase Two project in Subang Jaya.

The land formed part of the 4.362 ha on which the Subang Parade Shopping Centre is located and which belong to Hektar REIT, the company said in a filing with Bursa Malaysia.

By Bernama