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Saturday, May 29, 2010

Frankfurt-based SEB bullish about Malaysia

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By The Star

Championing the green way of building

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By The Star (by Angie Ng)