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Monday, September 6, 2010

Wing Tai upbeat despite Singapore property move

Strong demand for high-end properties in Singapore means that property developers who build assets in that segment won't be affected by the island republic's measures to cool the property market.

Singapore had put a 70 per cent cap on loan-to-property-value for second mortgages, among other measures, to prevent the market from overheating.

Property developer Wing Tai Holdings Ltd deputy chairman Edmund Cheng said at the launch of its luxury project Belle Vue Residences in Singapore last week that the new curbs will not affect the group.

"The measures are few but for genuine buyers it is still okay. It may affect upgraders. Most of our projects are upper middle, high-end and super high-end, so the impact is not much," he said.

"Wing Tai will continue to launch new projects as there is pent-up demand for high-end properties, especially among international investors and home seekers," he added.

Foreign buyers generally make up about 29 per cent of Singapore's property market, Cheng said.

Meanwhile, Wing Tai may replicate Belle Vue Residences, its most valuable residential project worth S$350 million (RM812 million), in other Asia Pacific countries.

The project may be developed in Hong Kong, China or Malaysia, provided there is suitable land and Japan's renowned architect Toyo Ito agrees to design it.

Belle Vue was designed by Ito, whose free-flowing spaces and designs mirror the rhythms and patterns of organic growth. This is his first residential project outside of Japan.

Some 62 per cent of its 167 units have been sold, mostly to international property buyers, at between S$2,000 (RM4,640) per sq ft and S$2,300 (RM5,336) psf.

The project was launched in phases starting August 2008 and the remaining units will sell from S$2,300 psf to S$2,800 (RM6,496) psf.

Cheng said he was confident that the project will be fully taken up soon.

"Belle Vue is our best project but we are aiming for another best development," Cheng said.

Belle Vue, located on Orchard Road, is designed to parallel nature's simplicity.

By Business Times

Wing Tai to launch projects in Malaysia

WING Tai Holdings Ltd, a property developer, will launch several new projects in Malaysia as it is bullish on the market, its deputy chairman Edmund Cheng said.

Wing Tai will continue to develop high-end properties in the Klang Valley. It currently has 80ha of land in Kuala Lumpur and Penang.

"We are looking to increase our landbank in the Klang Valley, and work with suitable partners," he said.

Wing Tai, through its Malaysian-listed unit DNP Holdings Bhd, will launch Kondominium Nobleton Crest at Jalan U-Thant in Kuala Lumpur in 2011, pending market conditions.

The project comprises three blocks of low-rise residences.

It will also launch a prime development in Jalan Ampang, Kuala Lumpur, comprising two blocks of 49-storey and 43-storey serviced residences.

The project, on a freehold site spanning 0.6ha, is under construction.

"Work is progressing well. The launch will depend on market conditions. The market can expect several other exciting projects," Cheng said in a recent interview with Business Times in Singapore.

Wing Tai, through DNP, is currently developing Verticas Residensi, 423 units of freehold condominium in the Bukit Ceylon enclave.

Cheng said the project has received good response from the preview of its Tower A in July 2009.

Tower B was officially launched in January 2010 and the units have been quite well received, he said.

Verticas is under construction and it is expected to be completed in 2012.

Its other ongoing developments are in Penang. They are Sentral Greens in Relau, Phase 2 of BM Utama in Butterworth, and Phases 4 and 5 of Taman Seri Impian, comprising terraced and semi-detached houses.

Wing Tai started in Hong Kong as a garment manufacturer in the 1950s. It expanded its business in Malaysia in the 1960s and has developed over 70 projects to date.

By Business Times

RM500m potential assets for AHP

Real estate investment trust Amanah Harta Tanah PNB could add over RM500 million worth of assets in its portfolio within the next four years.

AHP now has a total of RM142.3 million worth of assets, including Plaza VADS and Bangunan AHP in Taman Tun Dr Ismail in Kuala Lumpur.

More assets are coming to AHP because PNB Commercial Sdn Bhd, the asset management subsidiary of Permodalan Nasional Bhd, has set its objective of turning around the commercial properties within PNB Commercial's stable, which will later be offered for injection into the REIT.

PNB Commercial owns and manages 11 properties as well as manages nine other assets for PNB. The total value of the assets is RM1 billion.

The 11 properties that PNB Commercial owns and manages are valued at around RM460 million and are scheduled to undergo a RM70 million makeover in 2010 and 2011.

PNB Commercial chief executive officer Datuk Mohamed Marzuk Basir said PNB Commercial has given itself five years to flip the properties so that they gives better yields.

"We have three-and-a-half years remaining to work on our assets, efficiently manage and refurbish them, and bring them to a healthy level," Mohamed Marzuk told Business Times in an interview.

Office buildings owned by the company include PNB Commercial House in Penang, as well as Wisma Nusantara and Menara Aik Hua in Kuala Lumpur.

Its retail assets are Pudu Plaza in Kuala Lumpur, a retail complex in Kajang, Selangor, and Perling Mall in Johor Baru.

Hospitality assets include three-star Hotel Sri Petaling in Bukit Jalil, Kuala Lumpur, and Lanjut Golf and Beach Resort in Kuala Rompin, Pahang.

Currently, the yield derived by these assets ranges between 2 per cent and 7.8 per cent and occupancy levels at its office buildings range from 50 per cent and 90 per cent.

Mohamed Marzuk expects that once occupancy level hits 80 per cent, PNB Commercial should be able to have a decent yield of 7.5 per cent to 9 per cent.

Similarly, any new acquisition made will be upgraded and then potentially sold to AHP.

The sale money will then be used as operating capital, for refurbishment and for acquisitions by PNB Commercial.

It is understood that the retail complex in Kajang, leased to Tesco hypermarket with an estimated RM60 million value, may be the first property that will be turned around and ready to be sold to AHP.

Mohamed Marzuk declined to comment on this but said PNB Commercial's task is to nurture the yields of all its properties and offer for injection into the REIT.

A decision on whether AHP buys any properties would depend on approval from shareholders as well as a gearing level of not over 50 per cent.

In the six months ended June 30 2010, AHP made RM7.53 million revenue and a net profit of RM4.04 million.

In the financial year ended December 31 2009, it made a gross rental income of RM13.97 million and a net rental income of RM8.89 million.

By Business Times

No to 80% mortgage cap on housing

PETALING JAYA: Several groups are up in arms over a proposal to cut housing loans by 10% from the current cap of 90%, saying that the move will only discourage Malaysians from buying houses.

National House Buyer’s Association (HBA) and Federation of Malaysian Consumers Associations (Fomca) cautioned that the proposed home loan reduction to 80% would only be a burden to potential house buyers.

HBA honorary secretary-general Chang Kim Loong said the proposal would go against the Government’s plans to encourage home ownership

“Young professionals who are just starting out will be deprived of buying a home for themselves. How are they going to get the 20% upfront payment?

“This campaign is to develop and maintain a firm rapport with one of our key stakeholders as they are the best people to promote the hotel,” said Barrow.

"That does not include the legal fees and stamp duties house buyers have to pay,” said Chang when contacted yesterday.

He said the move would only be good if it targeted high-end buyers, as an effort to deter speculation.

On Sept 2, StarBiz reported that Bank Negara was engaging with banks on possible measures to curb excessive speculation on property prices.

One of the measures discussed was whether the central bank will be capping the loan-to-value ratio (LVR) for mortgages at 80% in order to avert the risk of a potential property bubble.

Currently, most banks provide loans of up to 90% of the value of the property.

Fomca secretary-general Muhd Sha’ani Abdullah urged the Govern ment to ensure there was enough affordable housing available first before implementing such proposals.

“40% of the workforce earn up to RM1,500 a month. If this proposal were to be implemented across the board, how are they going to afford houses?” he asked.

Gerakan vice-president Datuk Mah Siew Keong said that if the proposal was applied across the board, the property market, construction industry, housing and real estate industry, and economic growth would slow down.

“Bank Negara must study the plan carefully, as the present limit of home loans of 90% has helped the housing and real estate industry,” said Mah, who is also the party’s economic development bureau chairman in a statement.

Housing and Local Government Minister Datuk Chor Chee Heung, however, said the measure would not dampen the housing market as in the long-term, it would actually be a healthy growth for the industry.

Banking sources said Bank Negara might consider discontinuing the 5:95 and 10:90 housing loan packages and impose higher downpayment for property purchasers.

This was due to a surge of between 10% and 30% in the price of landed properties in some parts of the Klang Valley and Penang.

By The Star