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Wednesday, October 27, 2010

Times Avenue units 70pc snapped up before Nov launch

TIMES Avenue, a RM160 million office and retail project on Jalan Imbi, Kuala Lumpur, has been 70 per cent sold, one month ahead of its launch in November.

The space was bought mainly by a Hong Kong private equity group, said Datuk Lennon Tan, founder and chairman of developer Takashimaya Construction & Development Sdn Bhd.

Times Avenue is located next to Berjaya Times Square. The 15-storey building has nine levels of executive office suites, three floors of retail lots, two levels of penthouse offices and a sky lounge. Construction will start in December and is due for completion by end-2013.

Tan plans to sell the remaining space to local investors.

"I am bullish on the market for office space and expect the whole project to be sold by the end of this year," Tan said yesterday in Kuala Lumpur, after unveiling the project.

Times Avenue is the first commercial building to feature a high-tech multi-level automated valet car parking system. This is its selling point.

The RM10 million system uses technology from South Korea and is widely used in Europe.

It allows customers to initiate their vehicle retrieval simply by scanning their bar coded valet parking ticket at the built-in reader. Their vehicle is automatically stacked vertically alongside the building, saving them time to look for parking.

"We hope to set a new benchmark in office space where security and safety is concerned. We hope land owners and developers will look into the system, which is a high selling point for their projects," Tan said.

Takashimaya was set up in 2004 by Tan and Fanny Foo Youe Moi, an entrepreneur.

Tan said Takashimaya has no links to Berjaya Group, or its founder Tan Sri Vincent Tan.

By Business Times

Cagamas may issue another sukuk worth up to RM2b

NATIONAL mortgage company Cagamas Bhd will issue another landmark sukuk, with size estimated to be between RM500 million and RM2 billion.

Chief executive officer Steven Choy said the size of the Islamic debt paper will depend on the home loans that banks sell to Cagamas.

"If they sell us big loans, it will be bigger, if small loans, it will be small," Choy told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

On the significance of the latest debt paper, Choy said: "We haven't worked out yet on the assets that are coming in, so it is not the right time to talk about it."

It is understood that the sukuk will be launched by the year-end.

Sources told Business Times that the latest Cagamas sukuk will be based on Ar Rahnu concept, or pledging.

"It is termed as covered sukuk (an Islamic version of covered bond)," one of the sources said.

Covered sukuk is an Islamic version of covered bonds, which are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset-backed securities created in securitisation, but covered bond assets remain on the issuer's consolidated balance sheet.

Business Times had earlier reported that the new Cagamas sukuk will not incorporate "doubtful" principles, just like its previous benchmark Sukuk Al-Amanah Li Al-Istithmar (Sukuk ALIm), launched in mid-July.

While Sukuk ALIm was designed to meet the requirements of broader investors especially from the Middle East, Cagamas' new sukuk is expected to attract local institutional investors.

Last year, the country's biggest buyer of home loans sold RM11.3 billion worth of bonds, down by more than half from the record RM25 billion in 1999. About 40 per cent, or RM4.3 billion, were sukuk.

Cagamas issues bonds or debt securities to finance the purchase of housing loans from banks, freeing up lenders to give out more loans.

It is the second biggest issuer of debt papers after the government and carries the highest credit rating of "AAA" from local rating agencies. This means that its paper is highly sought after by investors because the probability of a default is very low.

By Business Times

KLIB unit to sell land for RM58mil

PETALING JAYA: Equine Capital Bhd’s wholly-owned subsidiary Kuala Lumpur Industries Bhd (KLIB) has proposed the disposal of four parcels of land together with Wisma KLIH for up to RM58mil cash to Wonderful Vantage Sdn Bhd.

In a filing with Bursa Malaysia, Equine said the land was with a 14-storey purpose built office building known as Wisma KLIH located at Jalan Bukit Bintang, Kuala Lumpur.

It said the disposal consideration comprises RM48mil for the disposal of the property and RM10mil for renovation and refurbishment of the property, subject to the terms of the renovation and refurbishment option.

By The Star

Commercial property sales rebound in 3Q

NEW YORK: Two of the world's largest commercial real estate services companies reported sharply improved earnings on Tuesday, Oct 26, fueled chiefly by a pickup in building sales and leasing, particularly in the United States.

After more than a year of nearly no activity, US property sales have begun to pick up as buyers and sellers agreed on prices. That helped Jones Lang LaSalle Inc and CB Richard Ellis Group Inc record strong earnings growth in the third quarter.

Boston Properties, which has been on a buying spree over the past couple of months, reported better-than-expected results.

Luxury mall owner Taubman Centers Inc reported earnings that were hurt by an unexpected drop in lease cancellation fees. But the company raised its full-year forecast after sales at its malls rose 13% per square foot.

The slow rebirth of the US commercial mortgage backed securities market (CMBS) and loosening of lending by banks have greatly improved US commercial real estate sales this year. Real Estate research firm Real Capital Analytics expects sales to top US$100 billion (RM310 billion) in 2010, nearly double the US$54.4 billion in 2009.

US companies also have begun to lease more space as they become more confident about the economy.

Sales and leasing transactions are the bread and butter of real estate services companies, providing higher margins than property management or corporate services.

"We've seen sales and leasing improve all year," JMP analyst Will Marks said. "Third-quarter results really picked up from 2009 levels, but they're still nowhere near the levels at the peak."

CB Richard Ellis, based in Los Angeles, posted third-quarter earnings, excluding charges, of US$62.4 million, or 20 US cents per diluted share up from US$21.6 million, or eight US cents a share in the year-earlier quarter.

Analysts on average expected 17 US cents per share, according Thomson Reuters I/B/E/S.

Revenue rose 24% to US$1.3 billion. That was driven in part by a 26% revenue increase from the Americas region, with property sales up 69% and leasing revenue up 36%.

Jones Lang LaSalle posted third-quarter adjusted earnings of US$38 million, or 86 US cents per share, compared with US$27 million or 61 US cents per share in the year-earlier quarter.

Analysts on average expected 95 US cents per share.

Chicago-based Jones Lang LaSalle said its revenue rose 20% to US$708 million. In the Americas, revenue rose 29%, with leasing revenue up 38%, and sales and hotels up 127%.

Taubman reported third-quarter adjusted funds from operations of US$33 million or 59 US cents per square foot compared with a loss of US$67 million, or US$1.26 per share in the year ago period.

Analysts had expected third-quarter FFO of 67 US cents per share. FFO is a real estate investment trust performance metric, which removes the profit-reducing effect of depreciation from earnings.

The company, based in Bloomfield Hills, Michigan raised it 2010 FFO forecast to a range to US$2.77 per share to US$2.82 per share from US$2.65 per share to US$2.75 per share based on improving rents and higher lease cancellation and recoveries.

Boston Properties reported FFO of US$150.8 million, or US$1.07 per share diluted compared with US$158.5 million, or US$1.13 per share.

Analysts expected FFO of US$1.03 per share.

Boston Properties said it expects to report fourth quarter FFO of US$1.09 per share to US$1.12 per share.

The companies reported after the close of the New York Stock Exchange on Tuesday. Jones Lang LaSalle shares closed down 0.7% at US$85.37. CB Richard Ellis shares closed up 0.2% at US$18.90 and were at US$19.06 after hours. Taubman shares closed down 1.1% at US$48.30, and were at US$48.76 in after-hours trade. Boston Properties shares closed down 1% at US$89.87.

By Reuters