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Monday, June 28, 2010

The big spillover benefits of Greater KL plan

PETALING JAYA: The redevelopment of a number of major goverment-owned assets to transform Kuala Lumpur and the other satellite towns in the Klang Valley, or the Greater Kuala Lumpur, into a leading global city has the potential to create significant spillover benefits to the country’s economy if it is planned holistically and is well executed, property industry players said.

Their concern is whether there will be an overall authority to oversee the redevelopment exercise so as to ensure the projects complement the current environment and are spaced out well to prevent an over supply situation.

Under the Greater Kuala Lumpur Strategic Development Project, an initiative under the 10th Malaysia Plan, the Government is to revitalise the city by re-developing strategic federal assets including the Sungei Besi military airport, Pudu Jail, Kuala Lumpur Financial District and the planned township development on the Rubber Research Institute (RRI) land in Sg Buloh.

Datuk Michael Yam says largescale redevelopment allows a wholesale repositioning of KL

Newly elected Real Estate and Housing Developers Association (Rehda) president Datuk Michael Yam said such large-scale redevelopment would enable a wholesale repositioning of Kuala Lumpur as a world-class city, “embracing all the contemporary features not currently available in existing developments, which grew out of organic demand and ad hoc non-contiguous ventures.”

“Developing large parcels of land enables better integration of services, infrastructure and other components, and is generally more long term and sustainable,” Yam, who took office on June 19, told StarBiz.

He said the development plans needed to be carefully thought out and planned, “not only to achieve profit targets, but for other more holistic benefits including social, environmental and sustainable objectives for the long term.”

“The supply should be of high quality and value, and needed to be developed in phases, in order not to upset the supply and demand equilibrium.”

Yam also said the need for a new, more effective and efficient structure of the approval and decision process to avoid costly delays and from falling short of targets. “Strong financial oversight, corporate governance and supervisory measures by a monitoring team should be established with active private sector participation.”

Meanwhile, the Government can use the highly profitable parcels as a source of additional income to cross-subsidise housing for the poor. This will provide a boost to the public sector’s effort in ensuring affordable housing for the low-income group.

Datuk Eddy Chen ... ‘Each asset or land area must come under a unified master plan.’

Rehda patron Datuk Eddy Chen said the projects should be developments of a high-value nature that have the potential to lure foreign direct investment in assets and properties that are of international standards.

“Each of the asset or land area must come under a unified master plan that has its own unique theme and designated role to play.

This is to avoid inter-city competition and overlaps. For example, while one city can be a financial district, another can be the centre of regional headquarters for multinational corporations, and others for MICE and corporate tourism activities.”

Chen, who was a former president of Rehda, said such cities needed to be well-planned with components for work and play, citing a good public transport system as the main mode of travel was also paramount.

Hall Chadwick Asia chairman Kumar Tharmalingam said the proposed redevelopment of the government assets “shows there is a complete shift in paradigm in how the Government is going about to unlock the value of its assets.”

“Having a government company to undertake the projects is a clever approach as it would give an assurance of implied sovereign guarantee that the Government will actively pursue the completion of the projects,” Kumar said.

He said many foreign funds including private equity and pension funds would be keen to invest their funds in those projects.

“By having open tenders for the development of these assets, the private sector will have the opportunity to participate,” he said, citing the Employees Provident Fund joint-venture development of the Sungei Buloh land that would be opened for bidding as an example.

Located on 1,320ha, the massive development is estimated to cost some RM10bil.

As for the 160ha Sungei Besi airport, Kumar said with the project’s strategic location and the sizeable land, it should become a new gateway to the city if planned cohesively. “To ensure that the place remains vibrant even after office hours, there should be facilities not just for work, but also to live and play there.

Mah Sing Group Bhd group managing director cum chief executive Tan Sri Leong Hoy Kum said high-value project initiatives to redevelop the government assets would provide more opportunities for the players.

“It is a good way to allow greater participation from industry players with the expertise to add value to the assets,” he said.

By The Star

Serviced apartments boom looms in Malaysia

With spacious rooms, the availability of round the clock hours services and a similarity to the modern home lifestyle, it is no surprise that serviced apartments will be one of the fastest growth markets in Malaysia.

Frasers Hospitality Pte Ltd Chief Executive Officer Choe Peng Sum said many players including hotel owners see the opportunities offered in this market. "More serviced apartments will be available soon enough, making the competition more intense."

"As one of the top three global companies for serviced apartments, we realise the potential opportunities arising from this market, with people and tourists opting for residences that offer a myriad of amenities and features to make them feel at home.

"I can also say that many hotels have started investing in their own serviced apartments as a diversified business marketing strategy," he told Bernama recently.
Explaining the group's latest undertaking, Fraser Place Kuala Lumpur (FPKL), Choe said that it is a luxury project in Jalan Perak and close to the Kuala Lumpur City Centre (KLCC).

As a Singapore-based company, the venture marks Frasers Hospitality Pte Ltd's first foray into Malaysia.

"The apartments are strategically nestled in the heart of the city, comprising 30 floors with 215 one or two bedroom suites, studios, stunning penthouses and an infinity sky pool.
The pool offers a view of the city's skyline.

"We are positioned in the very heart of the city centre with a host of food and entertainment outlets, offering unparalleled convenience to residents," he explained.

With a proven international track record in the hospitality industry, FPKL is expected to carry on the legacy here in Malaysia.

By Bernama

RM4b projects seen in Penang

GEORGE TOWN: The Penang Master Builders and Building Materials Dealers Association (PMBBMDA) expects the value of construction contracts in Penang this year to be slightly over RM4bil, which is the same as last year, but below the RM5bil forecast in 2009.

PMBBMDA president Vincent Ong said this was due to the global uncertainties and the pending gradual removal of subsidies, which would hike construction costs and lower demand.

“Nevertheless for the first quarter 2010, the value of 38 contracts from both the government and private sectors in Penang hit RM206mil, compared with about RM45mil achieved in the previous corresponding quarter, according to the Construction Industry Development Board (CIDB) report,” he told StarBiz.

“Of the 38 contracts, 10 were from the government sector. This compared with 11 contracts in the first quarter last year, of which three were government jobs.”

He said the association hoped to get more contracts from the state and federal governments for projects such as the expansion of the Penang International Airport, the second bridge and the Mengkuang Dam expansion.

“A lot of the government and private contracts that our members are handling now were approved before 2010.

“We hope this year there will be more fresh projects. If not, there may not be sufficient work to go around,” he said.

Last year, there were a total of 88 contracts, with an estimated value of RM638mil.

Meanwhile, PMBBMDA immediate past president Finn Choong said there would be over RM350mil worth of renovation jobs available for the association’s 117 members from now till March next year.

The renovation jobs are from projects such as the phase three of Setia Pearl Island and The Looc Residence, which recently obtained a certificate of fitness, Prestige Heights, the Moonlight Bay, Suria, Pavillion, Summer Place and Platino, which will be ready for renovation before year-end, and the Residence@Southbay, which will be ready in the first quarter 2011.

“The total sales value of these projects is about RM1.32bil.

“These properties will easily generate about RM350mil worth of renovation jobs, as it is normal for the owner of a unit to spend 25% to 30% of the property’s value on renovation,” Choong said.

Real Estate Housing Estate Developers’ Association Penang chairman Datuk Jerry Chan said the pending removal of subsidy sales would spur the sales of properties.

“This is natural as people want to grab properties with prices as they are today before an increase after the subsidies are removed,” he said.

By The Star

CapitaMalls Malaysia Trust largest "pure-play" shopping mall REIT

KUALA LUMPUR: CapitaMalls Malaysia Trust (CMMT) will be the largest "pure-play" shopping mall real estate investment trust (REIT) on the main market of Bursa Malaysia by market capitalisation upon its expected listing on July 16.

At the launching of its prospectus Monday, June 28, CMMT said its market capitalisation was expected to be about RM1.4 billion, adding that its portfolio has been valued at RM2.13 billion in the valuation conducted by its trustee, AmTrustee Bhd.

The Trust said its initial portfolio comprises three shopping malls namely Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. The portfolios have a net lettable area of about 1.88 million sq ft.

Under its initial public offering (IPO), CMMT is offering 786.522 million units to institutional investors in Malaysia and overseas and to the retail investors in Malaysia only.

The retail offering in Malaysia consist of 67.5 million units made available through application by the Malaysian public, eligible directors and employees at the retail price pursuant to the retail offering. The final price according to CMMT would be the lower of the retail offer price of RM1.08 per unit or the institutional price less a discount of 2 sen.

CMMT noted that the institutional price would be determined by way of book building. At an indicative price of RM1.08, the retail offer would provide a distributional yield of 6.9% to the prospective investor based on its distribution per unit (DBU) of 7.45 sen for the forecast year 2011.

The Employees Provident Fund Board (EPF) and Great Eastern Life Assurance (M) Bhd have signed up cornerstone investors for the IPO to subscribe 90 million units or 11.4% of the total 786.522 million units offered to investors. They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.

By The EDGE Malaysia

CapitaMalls to offer shares at RM1.08

CapitaMalls Malaysia Trust plans to offer shares for its Malaysian initial public offering at RM1.08 each to individual investors, according to a prospectus published on Malaysian newspapers today.

Individual investors will get a refund if the final IPO price for institutional investors is lower than the retail one, according to the sales document.

CapitaMalls will offer a total of 786.5 million shares, it said.

By Bloomberg