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Tuesday, December 14, 2010

No woes from 5/95 home loans foreseen

PETALING JAYA: As the timeframe for repayment of homes purchased under the 5/95 home loan scheme draws near, all eyes will be on the ability of buyers to repay their loans amid forecasts of a slowing economy next year.

A banking industry source estimated that 20% to 30% had started repayment and the bulk of repayment would come onstream next year. However, he said, most of these buyers were from the high-income segment and had traditionally been able to service multiple loans.

He said the scheme, currently for first and second homes, was for selected locations and was undertaken by a few top developers.

The scheme, he said, was extended during the recession two years ago and was likely to be stopped end of this month, as the contract between the banks and developers would be over and the property market picked up.

Datuk Michael Yam ... ‘We don’t foresee banks running into high levels of non-performing loans.’

The 5/95 home loan scheme allows buyers to make only a 5% downpayment and sign the sale and purchase agreement.

Loans were secured by selected banks and the service of the loan only commence when the property is ready to be handed over to the purchaser.

The first property developer to introduce and implement the innovative 5/95 scheme was SP Setia in January 2009 in a cautious property market outlook.

The special home loan package was a great success and boosted the company's second quarter revenue ended April 30.

Soon after, other established property developers such as Glomac Bhd, Mah Sing Group Bhd, Malton Bhd and Sunrise Bhd followed suit with their 5/95 home loan scheme, with minor variances and with varying degrees of success.

Since the 5/95 home loan scheme was implemented, the economic environment has changed. So how are the homebuyers of this scheme faring?

Real Estate and Housing Developers Association (Rehda) president Datuk Michael Yam said the special loan scheme was only adopted by selected and established property developers.

The scheme was introduced mainly to affluent homebuyers, so Rehda does not foresee any repayment problems from these homebuyers presently or in the future, Yam told StarBiz.

Moreover, he said, sales made from this special loan scheme would likely represent only about 5% of the total sales made by these developers from various property projects in 2009.

While growth in the developed world was expected to slow down next year, the local property market's outlook was bullish, said Yam.

Local banks are flushed with funds and we don't foresee banks running into high levels of non-performing loans or default rate by homebuyers next year, he added.

On the 70% loan financing cap for those wanting to buy a third residential property, Yam said it was mainly Bank Negara's way of saying we are monitoring the situation.

A banking industry source said the special loan package in 2009 was structured in collaboration with several foreign and local banks as well as selected property developers.

Interestingly, we find that homebuyers who had purchased several residential properties then under the 5/95 home loan scheme were less likely to be the ones who defaulted on their payments, he said, adding that overall the late payments, or default rate, by these homebuyers were currently insignificant.

OSK Research head Chris Eng said that going forward, the local property market was seen to remain bullish despite an expected global economic contraction.

Eng concurred with Yam that local banks did not have liquidity problems.

We expect the local property market to remain resilient at least for 2011, Eng said.

On the default rates of homebuyers of the 5/95 home loan scheme, he said: It's a bit too early to tell as some of these homebuyers are likely to have either just started making repayments on their home loans or are about to.

A spokesperson from SP Setia said that while the 5/95 home loan scheme introduced by the property developer was a great success, it was only for three months (from Jan 19 to April 19, 2009).

We made good sales (from the promotion of the special home loan package) which helped to boost our company's second-quarter revenue in 2009, she said.

On the default rates of homebuyers under the special package, she said that so far it (default rate) was insignificant for homebuyers that had bought SP Setia homes completed in 2009.

For homebuyers under the special scheme introduced in 2009, who are going to get the keys to their homes next year, we do not expect a high default rate on their home loan repayments, she said.

By The Star

Guocoland project in China wins international property award

LONDON: Guoson Centre, a flagship project by Malaysia's Hong Leong Group property arm, Guocoland China Ltd, won Best International Mixed-Use Development at the International Property Awards here recently.

This award signifies the transformation of the company, from a single project company to one that does mega-size integrated development.

It means world recognition of the efforts that we have put in, and world recognition that China can actually construct quality projects that can top the world. For many years, China has not won any international recognition for its real estate, said Guocoland China managing director Violet Lee, a Singaporean who has worked in China for the past 21 years.

Violet Lee ... ‘We look at the project from the community angle.’

Guoson Centre is a sustainable and fully-integrated development project in Beijing and Shanghai that comprises shopping malls, transportation hubs, hotels, high-end residences and office blocks.

The centres are built on prime locations with transportation hubs in Beijing and Shanghai, and are modelled after the concept of a city within a city around the theme of Work, Live, Play. Their transportation hub in Beijing is the largest in Asia.

The Guoson Centres have earlier won the China and Asia Pacific Property Awards to qualify for consideration for the International Property Awards, which is held in association with Bloomberg Television. The award is regarded as the world's most prestigious accolade in the field of property development.

Lee believed that one of the reasons Guoson Centre clinched the Best International Mixed-Use Award was its emphasis on value for the community.

We look at the project from the community angle. We are giving back to the community, said Lee who listed eco-friendly features as one of the important features in her company's development projects.

We also have the mass rapid transit system which contributes to the livelihood of the people in China.

Lee is also proud of the 40,000 sq m sky garden in Guoson Centre, an open-space roof garden which the company would landscape and provide its clients with green recreational space.

Lee also said that winning the award strengthened the company's confidence in working on large-scale, integrated mixed-use developments.

Guocoland China, a Singapore-listed property investment arm of Malaysian conglomerate Hong Leong Group, was established in 1994. It has invested an estimated US$3.5bil (RM11.03bil ) in China with a land bank of 2.5 million sq m in Beijing, Shanghai, Nanjing and Tianjin.

By The Star

YTL to sell properties to Starhill REIT

YTL Corp Bhd, via its units, will dispose of four of its hospitality-related properties to Starhill Global Real Estate Investment Trust (Starhill REIT) for RM472 million.

In a filing to Bursa Malaysia today, it said the properties were Cameron Highlands Resort, Hilton Niseko, Vistana Penang and Vistana Kuala Lumpur.

YTL said it had entered into four separate sale agreements for the disposal via its direct and indirect units, namely, YTL Land Sdn Bhd, Niseko Village K.K, Business & Budget Hotels (Penang) Sdn Bhd, and Prisma Tulin Sdn Bhd.

"The disposals will enable the group to unlock and realise the fair value of the properties," it said. It said Starhill would lease the properties for an initial lease period of 15 years, and an option to renew for a further term of 15 years.

YTL said the cash proceeds from the disposal would be used entirely by its units for repayment of bank borrowings, payment of cumulative preference share dividends, redemption of preference shares, payment of special dividends, and general working capital purposes.

By Bernama

YTL Crop subsidiaries dispose of properties for RM472m

KUALA LUMPUR: YTL Corp Bhd’s four subsidiaries are selling four properties for a total indicative disposal consideration of RM472.0 million to Starhill REIT under a corporate exercise to reposition Starhill REIT as a full-fledged hospitality REIT

YTL Corp said on Tuesday, Dec 14 the subsidiaries were YTL Land Sdn Bhd, Niseko Village K.K., Business & Budget Hotels (Penang) Sdn Bhd and Prisma Tulin Sdn Bhd.

They had entered into four conditional sale and purchase agreements with Mayban Trustees Berhad (as the trustee for Starhill REIT) to dispose of the properties -- Cameron Highlands Resort; Hilton Niseko; Vistana Penang; and Vistana Kuala Lumpur.

It said the vendors, except for YTL Land Sdn Bhd and Cameron Highlands Resort Sdn Bhd -- the current hotel operator for Cameron Highlands Resort -- had entered into four lease agreements with the trustee for the lease of the properties which shall be effective upon the completion of the proposed disposals.

Starhill said in a separate announcement "the corporate exercise is part of the rationalisation exercise to reposition Starhill REIT as a full-fledged hospitality REIT".

By The EDGE Malaysia

Global Cap, WCT unit in RM688m pact

Global Capital & Development Sdn Bhd (GCD) has signed an agreement with Platinum Meadow Sdn Bhd, a wholly-owned unit of WCT Bhd, for a RM688 million commercial development in the Medini Business District at Iskandar Malaysia, Johor.

GCD chief executive officer, Keith Martin, said the 4.12-hectare development would add to the range of commercial projects already scheduled for development in the business district.

"The key plans include a media village cluster development to support Pinewood Iskandar Malaysia Studios, a US$150 million (US$1=RM3.10) film and television production facility project, which is expected to create over 3,000 jobs.

"The project is located close to the business district," he told a media briefing after signing the agreement with Platinum Meadow here today. Martin said GCD would also take a larger role in the success of Medini.

"Currently, we are conducting a feasibility study to develop Plaza Medini, a two million sq ft commercial mixed project consisting of office space, hospitality venues, service apartments and retail outlets," he said.

Meanwhile, WCT Land Sdn Bhd’s general manager (sales and marketing), Stewart Tew, said the RM688 million commercial development in Medini Business District was its second venture in Iskandar Malaysia.

"WCT’s latest investment adds to its growing presence in Medini, building on a joint venture deal with Iskandar Investment Bhd last year to develop 1Medini, the city's first residential development located in Medini North.

"It has a gross development value of RM600 million," he said.
Tew said One Medini Sdn Bhd would develop the project (1Medini), a 70:30 per cent joint venture between WCT’s unit, WCT Land and Medini Land Sdn Bhd a subsidiary of Iskandar Investment and was scheduled for completion by 2015.

The 142ha Medini Business District is located next to Medini North, the city’s lifestyle, retail and tourism hub as well as connected to Medini South, a high-end waterfront residential and leisure community.

By Bernama

KYM secures jobs from Vale

PETALING JAYA: Industrial packaging manufacturer and property developer KYM Holdings Bhd has been awarded a contract valued at RM585,911 by Vale International SA for the provision of consultancy services for the acquisition of land and development order approval.

KYM said in an announcement to Bursa Malaysia yesterday that Vale had instructed it to acquire the land for the construction of a 2.5km-long jetty and for the construction of temporary site office facilities for their proposed iron ore distribution centre and pellet plant in Teluk Rubiah, Perak.

KYM's 54%-owned Harta Makmur Sdn Bhd sold 488ha of leasehold land in Teluk Rubiah to Vale for RM196mil cash last year.

Vale has plans to invest RM9bil in an iron ore distribution centre for Asia on the purchased land.

By The Star

SunCity, Sunway accept merger proposal

Sunway City Bhd and Sunway Holdings Bhd, two Malaysian property developers, said their respective boards accepted a merger proposed by Jeffrey Cheah, chairman of both companies.

Sunway City’s board said in an exchange filing that its board considered advice from independent directors and Goldman Sachs (Malaysia) Sdn Bhd.

Sunway Holdings said in a separate statement that its board took independent advice from OSK Investment Bank Bhd.

By Bloomberg

Mah Sing proposes to buy land

MAH SING Group Bhd has proposed to buy two parcels of prime land in Section U5, Shah Alam, through its wholly owned subsidiary Mestika Bistari Sdn Bhd, for RM65.9 million.

In a statement to Bursa Malaysia, Mah Sing said the total gross area was about 72,115 sq m with some 35,244 sq m in total net area.

The price per square foot was set at RM84.91, it added.

By Business Times