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Saturday, July 17, 2010

SunCity eyes foreign investors

Bay Rocks, which c onsists of 77 units of 2 and 2 1/2 storey l uxury bungal ows, signals SunCity’s for ay into the luxury market.

A cooler, calmer sanctuary. This is what Sunway City Bhd (SunCity) will be offering residents of its new condominium development – A’marine – located in Sunway South Quay, Bandar Sunway.

There are elements of comfort, style, and convenience that when put together showcase the height of exclusive lakeside metropolis living.

Sunway South Quay is the company’s new 178-acre residential development that consists of about 4,000 units of condominiums (A’marine and Nautica) and bungalow villas (BayRocks).

SunCity is targeting foreign investors for their latest development.

“We are trying to promote Sunway South Quay to international residents. We have already sold Nautica to a South Korean company, CI Korea,” managing director of property development in Malaysia, Ho Hon Sang tells StarBizWeek.

Nautica was sold for RM171mil, or about RM400 per sq ft. About 70% of A’marine’s 242 units have been sold since its soft launch in May. The units are priced at RM550 per sq ft. A’marine has a gross development value (GDV) of about RM200mil. The project is slated for completion by June 2013.

Ho Han Sang ... ‘As a property de veloper, you always look to better the last project.’

BayRocks, which consists of 77 units of 2 and 2½ storey luxury bungalows, signals the group’s foray into the luxury market. The development has a GDV of about RM367.7mil.

The bungalows are spacious, modern and well furnished. They also come complete with a hydraulic elevator.

Says Ho: “We have kept a low-key profile when marketing BayRocks because it is an expensive product. The price of about RM4mil-RM5mil per unit emphasises that fact. As a result, we have limited the amount of units built. In the first phase, we managed to sell about 95% of the 30 units made available.”

“In line with the Government’s Malaysia My Second Home programme, we are also hoping to attract certain high net worth individuals to come and stay in Malaysia,” he says.

This is not the first time SunCity has done business with foreigners. The development of Bandar Sunway as an integrated city has relied on educational institutions to attract foreign funding in the past.

“Bandar Sunway is an education hub. Taylor’s University College, Monash University and Sunway University College are located in this area. We have about 16,000 students living here, of which 30% are foreigners,” says Ho.

Sunway South Quay is strategically located nearby amenities that includes Sunway Medical Centre, Sunway Pyramid Shopping Mall, Sunway Lagoon Theme Park and an abundance of food and beverage outlets.

Despite what looks to be a rosy future ahead for SunCity, Ho insists that the company will not be resting on their laurels.

“As a property developer, you always look to better the last project. If there is demand for commercial property we will build them, and the same goes for residential property as well,” he says.

By The Star

Penang gears up for more property launches

The Tudor-style houses under the Botanica.CT’s phase one in Balik Pulau, Penang.

HOUSING prices in Penang are expected to rise further over the next 18 months, as local and Kuala Lumpur-based developers plan to launch 2,696 units of residential properties with an estimated gross sales value of over RM2.1bil on the island and the mainland.

Some 1,676 units of these properties, with an estimated of RM1.84bil, are located on the island.

The other 1,020 units of these developments, with an estimated gross sales value of RM300mil, are located on the mainland.

IJM Land Bhd, S.P. Setia Bhd, Asas Dunia Bhd, MTT Properties & Development Sdn Bhd, and Ideal Property Group are among the local and Kuala-Lumpur developers that have drawn up plans for new launches from now till the second quarter of 2011. Real Estate Housing Developers’ Association (Rehda, Penang) chairman Datuk Jerry Chan told StarBizWeek that property prices in Penang were expected to rise between 5% and 10% over the next 18 months.

This was only a very conservative estimate, Chan said after the Star Property Fair 2010 Round-Table Dialogue held at the Star Northern Hub in Bayan Lepas, Penang, on July 9. The dialogue, moderated by The Star’s regional editor (north) Choi Tuck Wo, is a prelude to the Star Property Fair 2010 that will be held from July 23 to 25 at G Hotel and Gurney Plaza.

“The higher pricing reflects the rising land, construction and material costs, and the higher quality, more spacious and better design products from developers,” says Chan.

“Other factors include the influx of money from regional investors and Malaysians abroad, and the positive forecast from the government that the country’s GDP will be over 6% this year,” Chan says.

He says it is time for the state government to brand Penang’s products and services because of the island’s liveability and uniqueness and the fact that its property prices are one-quarter that of Singapore’s.

He calls for a directory to list comprehensively Penang’s hospitality services, products, facilities, and manufacturing services.

He says current efforts to promote Penang such as road shows have not been effective.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat is also in agreement that property prices would rise between 5% to 10% from now till next year.

According to the Valuations & Property Services Department from the finance ministry, the residential property pricing in Penang had soared above that of Kuala Lumpur in 2009 by over 2.5%, Teoh says.

The housing price index of Penang was 145 in 2009, compared with that of Kuala Lumpur and the national average, which was 142 and 130, Teoh says.

“Among the drivers of residential property prices in Penang include foreign investments from China because the Chinese government have started to implement policies to curb property speculation,” Teoh says.

The largest development projects on the island are by IJM Land, which has lined up over RM1bil worth of residential properties to be launched for the second half of 2010 and 2011.

IJM Land Bhd managing director Datuk Soam Heng Choon says these properties include the RM830mil Light Collection projects, comprising 585 units of condominiums, bungalows, and town-houses next to Penang Bridge, the RM113mil The Address in Bayan Baru, comprising 148 units of condominiums cum town-house scheme, and the RM70mil Permatang Sanctuary project, comprising 170 units of semi-detached and bungalow houses, in Bukit Mertajam.

The Light Collection properties, to be launched in October 2010 and in the second and third quarters of 2011, are priced between RM700 to RM800 psf, while the pricing for The Address, to be launched in December 2011, starts from RM625,000 to over RM1mil.

The landed properties in Permatang Sanctuary, to be launched in January 2011, are priced between RM400,000 and RM700,000.

SP Setia is launching condominiums, terraced houses, and bungalows with a gross sales value of about RM425mil in the south-west and north-east districts of the island.

SP Setia (north) general manager S. Rajoo says the RM180mil high-rise project in Setia Pearl Island, Sungai Ara, comprising 300 condominiums would be launched in the second quarter of 2011, while the RM180mil Setia Eco Greens project in Sungai Ara, comprising 167 terraced and semi-detached properties, and the RM65mil Brookes Residence projects in Taman Jesselton, comprising 11 bungalow houses, have been targeted for launch in the first quarter of next year.

Prices for the condominium scheme starts from RM400,000, while the bungalow houses are priced from RM898,880 onwards, and Brookes Residence bungalows from RM5.8mil onwards.

Ideal Property Group will also be launching RM370mil worth of landed residential properties comprising 436 units of terraced, super-linked, and semi-detached houses for its One Residence project in Bayan Lepas, the southwest district of the island.

Ideal Property managing director Datuk Alex Ooi says in September the group would launch 316 units, and in the second quarter 2011, another 120 units.

Prices range between RM650,000 and RM1.4mil, he adds.

MTT Properties & Development Sdn Bhd general manager Jason Tan says the group plans to launch at end of the year in Balik Pulau, 29 units of three-storey hillside villas for its Botanica.CT project, overlooking the Andaman Sea, with a gross sales value of RM100mil. The properties, with a built-up area of 8,000sq ft, will be priced from RM2.5mil onwards.

On the mainland, Asas Dunia plans to launch RM230mil worth of residential properties comprising 500 single storey semi-detached houses, and 350 double-storey terraced, double-storey semi-detached, and light industrial houses in Bukit Mertajam, Simpang Ampat, Nibong Tebal, Sungai Bakap, and Permatang Tinggi from late July till the second quarter of 2011.

Chan, who is also Asas Dunia managing director, says the single-storey semi-detached unit, with built-up and land areas of 1,200sq ft and 2,660sq ft respectively, was priced between RM150,000 and RM290,000.

The double-storey semi-detached unit, with built-up and land areas of 2,557sq ft and 2,724sq ft, is priced from RM358,888 onwards.

“These properties will be launched in phases starting end of July. Their prices are already about 5% higher than the previous launches,” Chan says.

By The Star

Property investments rising in popularity

An consumer trends survey for the first half of this year showed more Malaysians looking to property for investment.

The online survey conducted on the Malaysia website had the participation of 500 respondents and was aimed at getting key insights into Asian property buyers, including motivations for purchasing property and budgets.

In a statement yesterday, the property website said of the 500 respondents, 47 per cent were looking to purchase a home while 31 per cent were investors seeking to expand their financial portfolio with real estate.

The survey showed motivation to invest for rental income dropped in 2010 whereas property investments for capital appreciation was on the rise.

It also said this increased preference to profit from resale could be attributed to rising property prices, as the Malaysian property market continues to improve.

A total of 43 per cent of the respondents were in the market for high-end properties valued between RM400,000 to RM5,000,000. This represents a whopping 16 per cent increase in demand for high-end properties with the RM500,000 to RM1,000,000 segment alone increasing by 10 per cent.

The survey pointed out that rising property prices, better rental returns and high resale profits could be some of the reasons for an increased demand in high-end properties.

"As confidence in the property market grows, we are seeing more home buyers and investors turning to high-end properties as a means to profit from capital appreciation and expand their financial portfolios," said Malaysia Country Manager Ken Tsurumaru.

By Bernama

Creating a real estate investment destination

The Star’s regional editor (north) Choi Tuck Wo met up with Kuala Lumpur-based and Penang developers on what needs to be done further to promote Penang as a real estate investment destination.

The panellists of the roundtable included investPenang executive committee chairman Datuk Lee Kah Choon, Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat, Real Estate Housing Developers Association (Rehda, Penang) chairman Datuk Jerry Chan, IJM Land Bhd managing director Datuk Soam Heng Choon, Belleview Group managing director Datuk Sonny Ho, Ivory Properties Group chief operating officer Datuk Ooi Chin Loo, Iskandar & Associates chairman Dr Iskandar Ismail, Nusmetro Group director Thomas Chan, SP Setia (north) general manager S. Rajoo and KPMG partner Ooi Kok Seng.

The following are excerpts of the discussion:

StarBizWeek: What kind of impact will the effort to cool off property speculation in China have on property demand and property prices in Malaysia?

Iskandar: The overseas demand for Malaysian properties is actually overstated. Our foreign direct investment last year grew only by 1%, compared to 9% in Singapore. I have not seen any real evidence that people from Singapore are moving to Malaysia because the property is cheaper.

Soam: There are a lot of high net-worth investors from China to whom we can sell Penang, especially in Inner Mongolia, where there are states with high GDP.

In light of pending subsidies removal, will property prices in Penang reach a point that is beyond the affordability of Penangites? According to a Socio-Economic Research Institute report, property prices on the island is 14 times higher than annual household income.

Soam: Landed properties priced at RM250,000 are still available on the other side. The mainland is not out of reach from the island, just a bit further.

The main thing is still transportation. People do not mind if there is a good public transport system.

Thomas Chan: The removal of subsidies will have minimal impact on property prices.

How can the south-west district of the island be further developed to attract more foreign investments?

Rajoo: We can improve by having more roads and amenities in the south-west district. This corridor is grossly lacking in the infrastructure.

Soam: There is a lot of potential in the south-west district, as the second bridge is coming up and the airport expansion is starting to move.

How can Penang better utilise its heritage properties to attract investments, taking into consideration the 18m height constraint imposed by the local authorities?

Lee: Heritage by itself is a different sort of investment. Generally, my feeling is why do you want to build a property that is more than 18m in the heritage area? There are so many areas that you can build on. All the other houses in the heritage area are one or two stories high and suddenly you have a skyscraper rising from nowhere.

How can developers in Penang improve on their products to meet investors’ expectations?

Sonny Ho: The Japanese are used to staying in small houses. For them, 2,000sq ft is very big. It is not the case for the Europeans and Australians.

Jerry Chan: Rehda has proposed to the state to allow variable unit sizes and layouts within apartments or condo blocks for multi-general use.

What is the feedback from the recent overseas roadshows to promote Penang as an investment destination?

Soam: At a recent luxury property exhibition in China for the rich and famous, the first thing they asked was “Hey, where is Penang?” Most of the people know about KL City Centre, but they are not aware of Penang. We have to give Penang more exposure and branding.

Ho: Malaysia as a whole is a country that is friendly to foreign investors and Penang should do a big marketing and communication job to attract them.

By The Star

Ivory Properties sees right time for listing

Penang-based Ivory Properties Group Bhd, which will soon be listed on the Main Market of Bursa Malaysia, believes the timing is right to go for the listing as the economy, especially the property sector, has picked up following economic stimulus measures by the Government in the past two years.

Datuk Low Eng Hock (left) and AmInvestment Bank Bhd MD T.C. Kok at the group’s prospectus launch early this week.

Chairman/group chief executive officer Datuk Low Eng Hock tells StarBizWeek that Ivory sees strong demand from home owners and investors in land-scarce Penang as well as discerning buyers with an eye for exclusive resort living, high capital appreciation and a prime location.

“We also noticed that in recent months, there have been quite a number of land acquisitions in Penang by big developers,” he says in an email reply. The group has so far undertaken a multitude of projects with a gross development value (GDV) of RM1.51bil.

“The GDV for completed property development projects accounted for about RM675.62mil while the GDV for ongoing property development projects is about RM834.09mil. The projects are scheduled for completion within the next few years,” he says, adding that the listing of Ivory will further enhance the group’s ability to complete property development projects and beef up its financial muscle to undertake bigger projects, both locally and abroad.

Ivory will be the first property development company to be listed on the Main Market this year.

The group launched its prospectus early this week where the balloting of the public issue shares is fixed on July 21 while its listing is scheduled for July 28.

July 19 will be the closing date for application of the public issue.

AmInvestment Bank Bhd has been appointed as the adviser, managing underwriter, underwriter and sole placement agent for the initial public offering (IPO).

Ivory’s IPO entails a public issue of 44.9 million new ordinary shares of 50sen each at an issue price of RM1 per share, comprising of 9.3 million new shares for application by the Malaysian public; 1million new shares by eligible directors, employees and business associates of Ivory and its subsidiaries; 34 million new shares for private placement to selected investors; and 570,000 new shares for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).

An additional 16.2 million shares at an offer price of RM1 per share will be offered to Bumiputera investors approved by MITI.

Of the gross proceeds, expected to be RM44.9mil, RM10mil will be used to repay bank borrowings, RM31.5mil for working capital and RM3.4mil for estimated share issue expenses.

“I am confident we should do well. Let’s see on July 28,” he says.

On the group’s property business in Penang, Low says being an island, Penang’s property prices will remain stable and this scarcity of land has somewhat shielded the property sector there from adverse effects of an economic slowdown, as had happened before.

“Our properties have appreciated over 40% within a few years and most of our upcoming projects are located in prime locations. We are overwhelmed with enquiries and have accepted registrations from prospective buyers for all the upcoming projects. We are also in the middle of acquiring new landbank in line with our expansion plan after the public listing,” he says, adding that the properties are priced between RM300 per sq ft and RM500 per sq ft.

The Ivory group is a fast emerging developer with a humble beginning. It was established in 1999 to undertake medium to high end property development projects.

It had completed property development projects such as The View Twin Towers (condominiums) in Batu Uban; Tanjung Park (condominium and townhouse) and Seri Taman Tanjung (apartments) in Tanjung Tokong; Plaza Ivory (condominiums, commercial shop lots and retail) and Palace Hill (bungalows and semi-detached houses) in Bukit Gambir; and Penang Times Square’s Phase 1, Birch The Plaza (condominiums and shopping complex) in George Town (Dato’ Keramat).

The group’s ongoing property development projects are the exclusive Moonlight Bay comprising villas and condo-villas in Batu Feringgi with a GDV of about RM189.96mil; Penang Times Square’s Phase 2, Birch Regency comprising condominiums and shopping complex at Jalan Dato’ Keramat with a GDV of approximately RM307.41mil; Zen @ The View comprising bungalows at Batu Uban with a GDV of approximately RM15.32mil; Island Resort’s Phase 2 and Phase 3 comprising condominiums, resort villas and bungalows at Batu Feringgi with GDV of about RM259.03mil and Aston Villa’s Phase 2 and Phase 4 comprising landed residential and shop lot in Bukit Mertajam with a GDV of approximately RM62.36mil.

Future property development projects of Ivory in Penang are Penang Times Square’s Phase 3 and Phase 4 with a GDV of approximately RM624.88mil; Mount Erskine Development comprising The Peak Residences with a GDV of approximately RM221.89mil, Taman Bukit Erskine with a GDV of approximately RM42.30mil, The Latitude with a GDV of approximately RM117.46mil, commercial lots with a GDV of approximately RM34.86mil at Mount Erskine; City Mall with a GDV of approximately RM269.61mil at Jalan Tanjung Tokong; Island Resort’s Phase 4 with a GDV of approximately RM121.15mil; and Aston Villa’s Phase 1 and Phase 3 with a GDV of approximately RM47.66 mil.

Ivory’s project in Tanjung Malim, Perak comprises Ivory Eco Park @ Tanjung Malim with a GDV of approximately RM420mil. On the outlook of the property market this year, Low says he is very optimistic, not only on the Penang market but Malaysia in general.

“With many positive and investor-friendly policies by the Government and healthy growth in our domestic economy, I believe we are on the uptrend. We at Ivory are all gearing up to take up every opportunity in this optimistic property market,” he says.

On plans to venture into the Klang Valley property market, Low says Ivory is studying several parcels of land in the Klang Valley and is looking at joint development with a local partner in the Klang Valley.

Ivory had recorded historical proforma consolidated profit after taxation (PAT) of about RM10mil, RM22.5mil, RM26.5mil, RM26.87 mil and RM17.17mil for its financial years ended Dec 31 (FY) 2005, FY 2006, FY2007, FY2008 and FY2009 respectively.

The company is forecasting a proforma consolidated PAT of approximately RM33.86mil for the financial year ending Dec 31, 2010.

By The Star

Developing townships with the right attributes

The environment theme has become a unique selling proposition for many new property projects as developers hope to leverage on the people’s greater awareness of the environment to boost sales.

It is easy to understand why there is great interest in the environment by both ends of the market. For the buyers, it is not just about the “environmental friendly” way of life but the overall environment of a neighbourhood, including security, safety, facilities and amenities, accessibility and other considerations.

These are important factors that will affect the value of the property in the secondary market when one decides to sell the property.

Many landed residential properties in such neighbourhoods have escalated in prices and even intermediate units are being sold at more than RM800,000 to close to RM1mil a unit.

A check in the classified pages of The Star shows only limited units of landed residences up for sale around the Klang Valley. Most of the “for sale” units are high-rise apartments or condominiums.

As for developers, it pays to plan their townships or projects based on a well balanced and sustainable environment for living, working and playing or recreation.

Instead of maximising the built-up space, developers should strive to achieve the optimum and balanced ratio between the built and “free” or undeveloped space in their projects.

By freeing up land to provide for more pedestrian walkways that link the different neighbourhoods, green lungs and other community facilities including playgrounds, residents will be able to walk more and drive less – thus lowering their carbon footprint.

Besides lowering the cost of living, such facilities will also promote a stronger community camaraderie and kinship among the residents.

These could be the reasons why Desa ParkCity homes are fetching one of the highest price premium in Kuala Lumpur, and possibly the country today.

Since the 473 acre-township took off in 2002, houses in Desa ParkCity have registered a compounded price appreciation of between 50% and 150%, or about 10% to 25% a year, in the secondary market.

From about RM470,000, or about RM235 per sq ft for a terrace house of 2,000 sq ft in 2002, the price has escalated to RM563 per sq ft last month. At a balloting on June 26, all the 137 terraced houses of 3,100 sq ft priced at RM1.75mil were snapped up. More than 800 buyers turned up for the balloting.

Desa ParkCity is a thriving “walkable” township with nine foot walkways connecting all the neighbourhoods.

Its tree-lined streets, a 43-acre central park and well-landscaped neighbourhood parks are among its main attractions.

The success of Desa ParkCity shows that developers should not just exploit the environment catchphrase as a marketing tool, but to go the extra mile to ensure that the townships or projects being built have all the right attributes that promote a holistic, wholesome and secure environment.

Developments with community, park-like environment, walkable streets and top-notch security will be a welcome change from the usual barrack-style layout of most housing estates that are still being built today.

Bad road congestion seems like a “perpetual” occurence in many of our townships. To alleviate the problem, developers should not overbuild and have better traffic planning, including more entrances and exits to make driving within the townships more pleasant.

Likewise, while the Government is making plans to redevelop some of the federal assets and land in Kuala Lumpur and the Klang Valley, the planning authorities should set aside land for the environment cause.

Our cities certainly need more central parks to allow city folk some natural avenues to unwind and relax.

Deputy news editor Angie Ng believes developers that adopt the noble objective of building wholesome environments for the people will be held in high regard for their nobility.

By The Star

CapitaMalls Asia has RM2b to invest in Malaysia

SINGAPORE'S CapitaMalls Asia Ltd (CMA) is looking at investing up to RM2 billion to build and buy malls in Malaysia.

Once the asset starts to generate income, it may then be sold to the CapitaMalls Malaysia Trust (CMMT). CMMT, Malaysia's second largest property trust was listed on Bursa Malaysia yesterday.

CapitaMalls chief executive officer Lim Beng Chee, said that all the money raised from the initial public offering will be reinvested into the Malaysian market.

"We have close to RM800 million from the listing. We have intention to continue investing in Malaysia as we see opportunities in Malaysia.

"So, while CMMT can go on to acquire income producing assets which is yield accretive, there could be projects that are not accretive from day one and need to add value.

"We will be setting up a fund to undertake some development assets to build a pipeline for CMMT to grow over time," Lim said at a press conference following the listing of CMMT.

The development fund, to be ready within a year, will have RM1 billion and can be geared up to RM2 billion.

While the preference is for the fund to build retail properties, Lim said that it may also collaborate with its parent CapitalLand Ltd for funding to build an integrated development which includes a retail component. It can also purchase assets and enhance them.

Similarly, the fund can buy integrated properties provided that at least 65 per cent of the gross floor area, asset value or rental income is the retail portion. If the retail portion is less than 65 per cent, it could opt to do a joint venture with CapitaLand Ltd.

Also, if necessary, the retail portion of an integrated property can be split from the remaining component and offered to CMMT.

Meanwhile, Sharon Lim, chief executive officer of CapitaMalls Malaysia Reit Management said that it has allocated RM40 million and RM60 million for capital expenditure and asset enhancement for 2010 and 2011 respectively.

The CMMT, now has a portfolio of three malls - Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. Together these properties with some 1.88 million sq ft in net lettable area is valued at RM2.13 billion.

CMMT's initial public offering raised RM785.2 million from local and foreign institutional investors. The price for institutional and cornerstone investors was fixed at RM1 per unit and at 98 sen for retail investors.

Retail investors are expected to get a distribution yield of 7.3 per cent in 2010 and 7.6 per cent in 2011.

Yesterday, CMMT's units closed at 98 sen, a 2 sen discount from its reference price of RM1. A total of 11.98 million units were traded.

By Business Times

Lower debut for CMMT

KUALA LUMPUR: Shares of CapitaMalls Malaysia Trust (CMMT), the largest “ pure-play” shopping mall real estate investment trust (REIT) in Malaysia, closed lower yesterday on its trading debut on Bursa Malaysia’s main market at 98 sen, 2 sen lower than its institutional price of RM1 but at par with its retail price.

The stock opened at 98.5 sen, its high for the day, and had a low of 97.5 sen before closing the day with 11.987 million shares changing hands.

CMMT’s initial public offering comprised 786.5 million units, of which 67.5 million were for retail investors and the rest for institutional investors.

Lim Beng Chee and Sharon Lim at the press conference after the listing.

CapitaMall Asia Ltd chief executive officer Lim Beng Chee said he was happy with the opening price as retail investors managed to gain a premium of 0.5 sen.

“Despite the small premium, the most important thing is that the market recognised the value and assets class hidden,” he told reporters yesterday after the listing ceremony.

Lim said CapitaMalls Asia planned to set up a RM1bil fund within a year to build and prepare a pipeline of assets for the Malaysian property trust. “We are looking for maybe another three or four malls to add to our existing assets here in Malaysia,” he said.

CMMT is managed by CapitaMalls Malaysia REIT Management Sdn Bhd, a joint venture between CapitaMalls Asia, which is one of Asia’s largest shopping malls developers, and Malaysian Industrial Development Finance Bhd.

Its portfolio in Malaysia comprises three assets, namely Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor.

CapitaMalls Asia is part of CapitaLand Ltd, South-East Asia’s biggest developer, which owns shopping malls in China, India and Singapore.

Meanwhile, CMMT – which is also the country’s second biggest property trust – expects to distribute its yield of 7.3% for the forecast period of 2010 and 7.6% for forecast year 2011 to retail investors based on the unit price of 98 sen.

CapitaMalls Malaysia REIT Management chief executive officer Sharon Lim said the yield distribution was really attractive compared with some other investment yields in the market.

“This is much more attractive than Malaysian bonds, which offer about 4% yield, as well as fixed deposit rates of about 3%,” she told reporters yesterday.

OSK Research Sdn Bhd in its latest report stated that the dividend yield of 7.5% was “well below” the average 8.5% of other Malaysian REITs.

It said CMMT was likely to offer very limited upside to its unit holders, at least in the medium term.

Having said that, it added that the “premium” might be justified given that the trust would be the second largest in Malaysia, and with the largest free float of 58.3%.

Given its defensive nature and longer-term organic growth catalyst it potentially offered, CMMT was likely to appeal to certain classes of investors only, especially those with a defensive investment strategy, it said.

By The Star

UEM-Bina Puri venture wins RM997m LCCT deal

UEM Construction-Bina Puri joint venture will be the main contractor for the construction of the new LCCT at KLIA in Sepang.

UEM Construction Sdn Bhd (UEMC) has won a RM997.23 million contract with Bina Puri Holdings Bhd to build a much-anticipated permanent low-cost carrier terminal (LCCT) at the KL International Airport (KLIA) in Sepang for airport operator Malaysia Airports Holdings Bhd (MAHB).

MAHB told Bursa Malaysia yesterday that it had appointed the UEMC-Bina Puri joint venture (JV), a 60:40 JV that was established in February, as the main contractor for the construction of the new LCCT.

In a separate filing to the stock exchange, Bina Puri group managing director Tan Sri Tee Hock Seng said the company accepted the letter of award yesterday in the name of UEMC-Bina Puri JV to undertake the design, construction and maintenance of the new LCCT's main terminal building, satellite building, sky bridge and piers.

This works package is expected to be completed within 20 months.

The contract is expected to contribute positively to Bina Puri's earnings for the financial year ending December 31 2010.

"With the award, the group's current book order stands at RM2.7 billion. The total value of contracts secured this year is RM1.51 billion," Bina Puri said.

Its share price gained 31 sen to RM1.42 yesterday on news of the award.

Meanwhile, UEM Group managing director and chief executive officer Datuk Izzaddin Idris said in a statement that the group was privileged to have clinched the mega project, helping its construction order book grow to RM3.7 billion.

UEMC is a wholly-owned subsidiary of UEM Group.

"Based on our track record in building the KLIA in Sepang and other infrastructure assets, we strongly believe that we will deliver an LCCT complex that is of global standing," said Izzaddin.

MAHB managing director Tan Sri Bashir Ahmad recently told reporters that the new LCCT that will be ready by March 2012 will be bigger than previously planned.

However, details of the revised cost, size and capacity of the new LCCT have yet to be announced. The project was originally supposed to cost RM2 billion and cater for 30 million passenger per year, with potential capacity for 45 million passengers per year.

Prior to yesterday's main contractor award, MAHB had given out two other contracts for the new LCCT project. The first, worth RM362 million, was given to WCT Bhd last December for site preparation, earthworks and main drainage. In January, a RM291 million contract was awarded to Gadang Bhd to carry out earthworks for the runway and taxiways.

By Business Times