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Thursday, August 12, 2010

Five architects shortlisted for RM1bil job

KUALA LUMPUR: Sime Darby Sunrise Development Sdn Bhd (SDSD) has shortlisted architectural companies to send in their designs for its RM1bil mixed development project in Bukit Jelutong, Shah Alam.

The five are award-winning architectural firms, namely BIG, J&H Boifills, Benoy, DP Architects and Hijjas Kasturi, who are renowned for their forte in commercial developments and excellent achievements.

Datuk Tong Kooi Ong: We are confident of being successful.

“Our design participants were selected based on their vast and relevant experience in the comprehensive mixed development, international exposure and commitment to sustainability,” Sunrise Bhd’s executive chairman Datuk Tong Kooi Ong said in a statement yesterday.

The shortlisted architects are expected to present their design concept to the SDSD board of directors on Aug 13, 2010 and the winner would be announced at a later date, he said.

On the project in Bukit Jelutong, which would be a 50-50 joint venture between Sime Darby and Sunrise, he said the company was confident of it being as successful as its other projects.

“Having completed three commercial developments under the Sunrise brand, we are confident of replicating our success in Mont’Kiara to other geographical location, setting the benchmark for creative, contextual design and achieving a sustainable development of long-lasting architectural quality,” he said.

Bukit Jelutong is a self-contained and an excellently planned community spread over 2,200 acres of prime freehold land.

It is well served with a transportation network that link to the other towns in the Klang Valley via expressways.

Meanwhile, SDSD’s mixed development project will cover 21 acres and will be part of the strategically planned Bukit Jelutong Commercial Centre that span 120 acres.

The project will have a gross built-up area approximately 2.7 million sq ft, consisting of 80% for retail namely shop-offices and office-suites and 20% for serviced apartments.

Work will begin next year and the project will be developed in five phases and completed in seven years.

By Bernama

Homes becoming too costly for the average Malaysian

As I was getting ready for some exercise early yesterday morning, I saw a man walking up the street dropping a leaflet into the mailboxes of homes. I took one off him as he approached the front of my house and it was an advertisement for properties.

The houses on offer in the secondary market were not your typical medium cost house or apartment that many Malaysians live in these days, but were million dollar dream homes that many aspire to own.

This got me thinking. Why are many new property launches and existing homes exorbitantly priced? Why are there few to none of the bread-and-butter houses being built?

If developers keep developing and selling higher priced properties, this will lead to an imbalance in supply and demand in the housing market.

Some of the last major townships launched in the Klang Valley include Setia Alam, Kota Damansara, Mutiara Damansara, Ara Damansara and areas surrounding Kepong and Puchong.

Initially catering for affordable homes, the price and types of properties being sold in those areas have moved up in scale.

The surge in home prices these days has been faster than the rise in wages and it would not be long, if it is not already happening, before such properties in the Klang Valley become too expensive for the average Malaysian.

Cheap financing has enabled Malaysians to own more expensive houses. Home buyers often require a small downpayment before purchasing homes.

The low interest rate environment, banks flushed with cash and innovative schemes have also allowed loan repayments to be kept within check – for now.

Furthermore, banks wanting to grab a larger slice of the home loan market are said to have engaged with external sales teams and other agents whose sole motivation might be to secure more loans.

While the absence of large land banks would be the prime reason for developers opting for smaller and higher priced properties, the process of pricing, while still a function of supply and demand, is also subjective. This subjective approach is also the norm in the secondary market.

Those who own homes would have heard about how much properties in their neighbourhood were recently sold for. People would then take that as the market price and would likely want the same price or higher when selling their home.

A gauge of what a house is worth would be the rental it can fetch. As prices of homes rise and the rental market, which is more linked to the disposable income of people, remains static and rigid, the inflated prices of property becomes more apparent.

Yes, price inflation of properties – if it remains strong – would offset the loss in returns from rent if people buy properties as an investment.

But then people should also consider whether they are better off renting and investing their money in higher yielding assets.

Escalating property prices also pushes homes out of the reach of the current generation.

Younger people who are just starting out in life may have to live at the fringes of Klang Valley, which then increases their cost of commuting to their workplace.

Those wanting to stay in the Klang Valley have then no choice but to opt for cheaper apartments or low cost dwelling.

It’s almost like the pickings are getting slimmer. My parents’ generation could afford a bungalow, mine a terrace house and what about my children’s generation if prices keep going up as they have?

The escalation in home prices, which would add to the leverage of home buyers, is also a warning sign. All it takes is one bad recession – recessions are becoming more frequent than in the past – and that would be trouble.

We only have to look at the implosion of the sub-prime market in the US to see what a housing collapse can bring.

Deputy news editor Jagdev Singh Sidhu dreams of a juicy burger as he is on his second attempt of a weight loss programme.

By The Star (by Jagdev Singh Sidhu)

WCT aims to add 2 hotels to portfolio by 2014

WCT Bhd, a leading construction and property development company, plans to own and manage two hotels within the next four years.
It will open its maiden hotel in Klang, Selangor, under the Première brand name on October 10.

The hotel is part of the RM145 million BBT-One Tower and the Boulevard project developed by WCT.

BBT Hotel Sdn Bhd director Eddie Tan said Première, the newest addition to the WCT portfolio, will be one of the main contributors to its hospitality division.

BBT Hotel, known as Smart Seasons Sdn Bhd until September 2006, is a subsidiary of WCT.

“We have found an opportunity to leverage on our expertise and apply it to the hospitality industry,” Tan said, adding that the hotel will be an ideal destination for business visitors and tourists.

The business-class hotel offers 250 rooms, including suites, in a 22-storey tower.

“We expect to achieve an occupancy rate of 60 per cent with an average room rate of RM170,” Tan said.

Premiere Hotel was built at a cost of RM75 million and was financed with internal funds and borrowings.

WCT is also planning to open Platinum Plaza Hotel in Ho Chi Minh City, Vietnam.

It will be part of the Platinum Plaza mixed commercial development comprising a shopping mall, two office blocks of 22 storeys each and small office units. The total development area is 7.2 million sq ft.

Gross development value of the proposed development is RM1 billion. The project will be developed in three phases over a four-year period.

By Business Times

Gadang to launch RM110m property projects

KUALA LUMPUR: GADANG HOLDINGS BHD plans to launch RM110 million worth of property projects over the next year in Kuala Lumpur and Johor.

A company official said on Thursday, Aug 12 Gadang was also looking to expand its plantations in Sabah via joint ventures with the landowners. Currently, it has plantations in Ranau, Sabah.

On the proposed joint venture with Long An Province People's Committee, Vietnam to undertake a waterworks project with 300,000 cubic metres daily capacity there, he said it was still at a feasibility stage.

Its subsidiary Green Water Investment had signed an MoU with Long An People's Committee in November 2008 for the proposed project.
The delay was due to the change in the local government there, the official said.

By The EDGE Malaysia

AmFIRST posts 6.17% revenue growth in Q1

KUALA LUMPUR: AmFIRST Real Estate Investment Trust has registered a revenue of RM25.11mil for its first quarter ended June 30, 2010, up by 6.17% from RM23.65mil in the same quarter last year.

Its net property income rose 15.94% to RM17.66mil from RM15.23mil previously.

However, the company’s income after tax declined marginally to RM9.94mil from RM10.58mil previously due to higher interest expense that resulted from the overnight policy rate (OPR) hike and provision for doubtful debt, AmFIRST said in a filing to Bursa Malaysia yesterday.

“Despite a marginal slip in income after tax for the first quarter period, we are pleased to report a positive start to the year with a fair performance of all six AmFIRST’s assets,” said Lim Yoon Peng, chief executive officer of Am ARA REIT Managers Sdn Bhd, the manager of AmFIRST.

By Bernama

KHSB to buy land for RM62m

KUALA LUMPUR: Kumpulan Hartanah Selangor Bhd (KHSB) has proposed to acquire two parcels of leasehold commercial land in Section 14, Petaling Jaya, from Majlis Agama Islam Selangor for RM61.72mil.

In a statement to Bursa Malaysia, KHSB said the land, measuring approximately 38,850 sq m, would be used to develop a service apartment, shop offices and shopping complexes.

It said the acquisition would be settled via bank borrowings and internally-generated funds.

“The proposed acquisition is a continuing effort by KHSB to reposition KHSB Group of Companies as developer of choice as the prime land is in the heart of Petaling Jaya,” it said.

KHSB said the exercise was also to prepare the group for immediate development.

“The present strong economy, coupled with a conducive building environment, high financial liquidity and demand, will augur well for the development and sales plan by the company,” it said.

By Bernama

Hartanah Selangor buys PJ land

KUMPULAN Hartanah Selangor Bhd (KHSB) is buying two plots of leasehold land of 3.8ha in Petaling Jaya, Selangor, for about RM62 million. KHSB will pay RM45 million through borrowings, while the balance will be met from its own coffers.

The deal is subject to the approval of the state authority.

KHSB intends to develop serviced apartments, shop-offices and shopping complexes.

By Business Times

REIT managers propose new tax incentives

The Malaysian REIT Managers Association (MRMA) has proposed a new set of incentives to enhance the existing tax concessions for real estate investment trusts (REITs).

The current tax concessions will expire next year.

It is proposing zero tax for individual local and foreign investors and 10 per cent flat withholding tax for all investors.

"The current tax concessions granted by the MOF (Ministry of Finance) for REITs will run out next year.

"Hence, there is an urgent need to ensure that industry players will continue to benefit from a similar or enhanced tax regime in the coming years," MRMA chairman Stewart LaBrooy said in a statement.

The MRMA also wants to establish a framework to develop the industry and coordinate investment opportunities and networking in the region.

This will help industry players to have more effective discussions with the MOF and other authorities on issues that affect the industry.

The MRMA held its annual general meeting (AGM) recently, during which 10 REIT managers participated in the election of its office bearers. The elected representatives will represent the REIT industry in the country.

The AGM saw the appointments of Axis REIT chief executive officer (CEO) Stewart LaBrooy as the MRMA's chairman, AmFirst REIT CEO Lim Yoon Peng and Amanahraya REIT CEO Adenan Md Yusof as its vice-chairman 1 and 2 respectively.

Hektar REIT's CEO, Zalila Mohd Toon, was appointed the association's treasurer, while Tower REIT's CEO, Chan Wan Leong, was appointed its secretary.

By Business Times