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Saturday, December 31, 2011

Urbanising Malaysia calls for the adoption of smart-growth principles

Green enclave in KL: Sunway Rymba Hills is a landed residential development that integrate natural forest and open park.

STRONG emphasis given by the Government in strengthening the economic attractiveness of Greater Kuala Lumpur, improving the overall public transportation system, improving linkages in major growth centers and other initiatives identified under the various National Key Economic Areas (NKEAs) will have great implications on future development of cities.

These NKEAs will influence the direction as well as speed of growth of the cities where the projects are carried out, which will then influence the property market of these cities.

Realising the high speed of urbanisation rate in Malaysia and the inefficiency that could be created by urban sprawl, it is of high importance that sustainable development be given due consideration. This has become the main focal point of discussions in property seminars and conferences in Malaysia and the region.

At the recently held The 3rd Congress of Asian Association of Urban Regional Studies, the theme was Survival City and Region: Risk or Sustainable Planning, speakers and participants were all in agreement on the need to plan, design and invest in smarter cities where sustainable planning becomes the guiding criteria.

Smart cities require skilled workers and innovative ideas. These cities must address green and sustainable issues and be resilient against natural hazards. The President of Thai Planners Society, Professor Dr Eggarin highlighted that sustainablility did not always translate into higher cost of building cities as there were natural methods to incorporate green issues in property development but required innovative techniques to suit the local environment.

It was also highlighted by Annette Dixon, the World Bank's Country Director for Malaysia in the November 2011 edition of the Malaysia Economic Monitor that “as cities concentrate a growing share of the national economy, it is imperative that they have systems to manage natural hazards and prevent them from becoming human and economic disasters.

Malaysian cities are especially vulnerable to floods and landslides. To reduce the risks related to these hazards, Malaysia would benefit from environmental restoration and integration of risk reduction into development planning”.

To lead the move towards sustainable development, one of the key thrusts of the National Housing Policy 2011 is to promote sustainability in the housing sector by promoting green technologies and features, and encouraging urban renewal and redevelopment. In Malaysia, this growing awareness on sustainable development has resulted in various commercial as well as residential developments using “green features” as one of the development concepts and theme or their unique selling features.

Ken Bangsar and 28 Mont Kiara are two examples of outstanding high rise development employing green features and technologies. Sunway Rymba Hills and Cahaya SPK Shah Alam are examples of landed residential development that integrate natural forest and open park. Launched last month, KL Eco City is going to be the country's first integrated green development targeting GBI and LEED certifications.

It can be concluded that it is becoming a “must” for property players from planners, architects, engineers to developers to take initiatives to create liveable cities by incorporating smart-growth principles in their planning and design.

We expect more new development and redevelopment projects to adopt similar principles, In the long run, smart-growth principles will add value not only in terms of capital appreciation of the properties but also social and economic liveability of entire communities.

Urban renewal and redevelopment projects are currently taking place in Kuala Lumpur city center and mature cities like Petaling Jaya. These are indications of the need for cities to grow vertically to create economies of scale in terms of space consumption and the need to minimise vehicular movement.

The current redevelopment of AngkasaRaya (Aurora Tower@KLCC) and Bok House (W Kuala Lumpur, The Hotel and Residences) and the proposed redevelopment of Hotel Istana, Kompleks Antarabangsa and Crowne Plaza into a mix of commercial and residential uses will encourage more owners of older buildings in the city center to take similar steps.

In Petaling Jaya, owners of older industrial buildings are redeveloping their land for commercial use. Approximately 16 million sq ft of prime office space will be completed by 2016 in Kuala Lumpur city center and its immediate areas, increasing the total supply by 22% to 86 million sq ft.

With the current slow take up in office space, rent is expected to remain stable in the next few quarters, hovering between RM5.50psf and RM6.50psf.

About 11,000 new condominiums with prices ranging from RM500psf to more than RM1,000psf will be completed by 2014. Due to the high supply of newly completed condominiums within the Golden Triangle Area and Embassy Row, average rental rate for selected existing condominiums has declined by almost 5% from RM4.66psf to RM4.44psf and from RM3.49psf to RM3.31psf respectively.

Several newly completed condominiums have even lowered their asking rental rate by almost 10%. We expect the leasing market for condominium will continue to be more challenging especially for bigger units though take up rate for new projects in most cases is very encouraging, with a significant percentage of local buyers.

The retail market will see more neighbourhood malls in the Klang Valley completed between 2012 and 2015 adding about 7.5 million sq ft to the current total supply of 51.4 million sq ft. Most of these new malls are located in high growth areas such as Petaling Jaya, Kelana Jaya, Cheras, Setapak, Kota Damansara, Puchong and UEP Subang Jaya.

Will the growth of residential and commercial properties slow down in 2012? Looking at the numbers provided by the Statistics Department and RAM Economics, average annual transaction growth rate of these properties has continued to slow down from 12.8% (1991-2000) to 5.9% (2001-2009).

With the growing population, high percentage of working population and growth in employment supported by various Entry Point Projects throughout the country, we expect the Malaysian economy to provide a conducive environment for the property market to continue to be one of the key economic contributors.

Senator Datuk Abdul Rahim Rahman is the Executive Chairman of Rahim & Co group of companies. This is his last column for StarBizWeek.

By The Star (by Datuk Abdul Rahim Rahman)

Making ringgit and sense in property investments

Making sensible property investment decisions, especially in the Klang Valley, is getting tougher in today's climate where real estate values are constantly spiralling upwards.

So, would buyers of recently launched properties in the Klang Valley be able to obtain decent rental yields of at least 5% per year after the units are completed in two or three years?

A recent report by property consultancy CB Richard Ellis notes that the average asking monthly rental rates of luxury condominiums, during the first half of 2011, in Bangsar and Mont Kiara were RM3.29 and RM3.13 per sq ft respectively.

The report points out that rental rates in the three main condo markets (Kuala Lumpur City Centre (KLCC), Bangsar and Mont Kiara) on a per sq ft basis had declined since 2007, reflecting weaker demand for rental units coupled with increased supply.

Two months ago, CB Richard Ellis executive chairman Christopher Boyd said: “In some cases in the KLCC area and Mont Kiara, condominium rentals have halved in the last two years.”

Meanwhile, those who are looking at swifter returns on their investments would be asking about the potential increase in value for such units within the next three years, as they want to “flip” their purchases.

A bank-backed property analyst explained that presently, there is a huge gap between the prices of recently launched properties and secondary market units.

“Recently launched properties offer better BLR (base lending rate) spread. Many property developers offer 10:90 schemes, and also absorb entry costs such as the stamp duties.”

However, he says within the next two years, it would be difficult to “flip” recently launched properties that were bought at above RM500,000 depending on unit size and location.

The analyst took the view that many buyers of recently launched properties are facing a “short-term gain, long-term pain” situation.

“I am not hopeful about “flipping” such units and getting a 20% price upside within two years. Buyers also need to pay exit costs like real property gains tax. You may end up with the same returns that real estate investment trusts (REITs) provide presently, which is about 6% to 7% annually.”

So perhaps, investors would do better in buying REITs in the current climate?

CB Richard Ellis executive director Paul Khong said the benefits of investing in REITs include their high liquidity, annual dividends ranging from 6% to 8% per annum and potential capital gain if prices increase.

“The quantum of investment can be small. For example, 1,000 shares in CMMT (CapitaMalls Malaysia Trust) would cost you RM1,440 and some brokerage fee. CMMT was listed (in July 2010) at RM980 per 1,000 shares. If you had invested on day one, you would have made more than 50% gain both capital value and dividends. REIT values are largely more stable and the dividends are usually very consistent.”

HwangDBS Investment Management Bhd equities head Gan Eng Peng concurs and notes that REITs tend to be well diversified, and property fund managers have advantages over individual landlords in terms of attracting tenants as they have “a larger network, reputation and backing behind them.”

“Also, the REIT property fund manager would have done the homework to ensure the property is a good investment and that the tenancy process is also sorted,” he said.

Gan said investors should adopt a longer-term view when investing in REITs.

“REITs are considered a defensive play within the equity asset class. Its performance moves in tandem with economic growth and business cycle.”

However, REIT investors have no direct control of what properties the fund managers invest in and there are annual management fee payments to the fund managers, says Gan.

Meanwhile, Khong took the view that investors who have the means should have both portfolios in physical real estate and REITs.

Khong says there is a “toppish” feel regarding increasing prices for recently launched residential apartments in the Klang valley, and many developers are offering more in terms of quality finishing and full furnishing.

“We note that 2011 has been a good year for the residential market with many new projects topping the charts in terms of pricing.”

Khong points out that the residential markets in areas like Petaling Jaya, Sri Hartamas, Bangsar, Damansara, Puchong and Seri Kembangan have seen substantial increases in capital values.

“Some of the newer strata projects have also done well during this period. These include The Greens @ TTDI, The Capers @ Sentul East, and KU Suites @ Kemuning Utama.”

Based on indicators in regional markets, he expects the local market to stabilise in 2012 with “some positive movements”.

However, property consultancy DTZ Nawawi Tie Leung executive director Brian Koh says, “2011 will see more moderate growth given that the second half was not fantastic. Next year will be more challenging given slower growth, and a tightening of liquidity through the imposition of lower financing margin and pegging to the net disposal income of borrowers.”

A property analyst says there are signs that financial institutions are more cautious in lending to real estate buyers nowadays.

“Unless the economic situation improves substantially, property investors may want to wait till the second half of 2012. There may be pressure on secondary market unit owners who are looking for quick “flips” to sell at lower prices.”

Gan also expects the Klang Valley property market to be softer in 2012.

“In particular, the oversupply of condominiums in Mont Kiara and KLCC, and offices in general, will cap the upside potential of these sub-asset classes,” says Gan.

However, Gan emphasies that this does not mean lower property prices as there is substantial real demand from young property upgraders as well as ample liquidity in the economy.

By The Star

Property market welcomes new group of buyers

BEGINNING tomorrow, new guidelines from Bank Negara Malaysia to curb rising household debt are going to kick in. The guidelines cover all consumer loan products including housing, personal and car loans, credit card receivables as well as loans for the purchase of securities.

Instead of loan approvals being based on gross pay, they will be based on net pay, after income tax, social security deductions and the Employees' Provident Fund contributions. These are the three main items. The objective of this ruling is to reduce the household debt which has been on the rise.

In all likelihood, property sales will be affected but what is interesting is, how this ruling will affect an increasingly younger generation of buyers who are entering the market for the first time.

In the last 24 months, developers have seen a new group of buyers. They are young and aggressive, upbeat and have a huge appetite for risk. Many of them are in their 20s or early 30s. Many buy with joint names and they are not related to each other. They buy studio units and two-bedroom condominiums, with a built-up of between 600sq ft and 800sq ft with a price tag of averaging RM500,000. When the mortgage payment kicks in, that RM450,000 loan (based on a 10:90 scheme) will equate to a monthly repayment of about RM2,500.

A developer says this scenario is due to a combination of factors. The steep rise in property prices the last two years, coupled with the gains, have spurred this young group of buyers to take on the responsibility of shouldering this long-term commitment.

More than 10 years ago, during the stock market bull run of the 1990s, the market was on an uptrend for a good number of years before the Asian Financial Crisis hit the region. At that time, many young people, including college students, began dabbling in the stock market. Just as that period prompted young people to learn about stocks, the last two years have introduced them to another investment instrument. The difference between the two is the outlay, and the duration of that commitment with stocks needing a smaller capital and more liquid.

Developers say there are essentially two groups of young people who have entered the market in the last two years. The first group are those who, seeing the gains made by earlier purchasers, enter the market with the objective of making a quick gain. Another group ventures into the market before prices go up further and they plan to hold the property for the longer term.

A major factor that encourages this group of aggressive young buyers is the availability of easy credit. The introduction of the 10:90 schemes induces them to make the decision. Many of them hope they will be able to flip that property on completion and make that 25% to 30% gain.

For this group who are buying to flip, they may find the gains not worth the while for the simple reason that the premise of making a 25% to 30% gain is based on a rising market. Prices are today stabilising and there is a glut of high-rise condominiums.

Lawyers and property professionals say investors are unlikely to make that 20% gain going forward. Furthermore, the 5% real property gain tax will also shave off gains. In the event they are unable to off load their units fast enough, they will have to rent them out, but they may encounter another problem a glut of condominiums and few tenants.

Assistant news editor Thean Lee Cheng wonders how many of these young buyers will stick with their commitment.

By The Star (by Thean Lee Cheng)

Will the slowdown in property prices continue?


In all likelihood, there will just be slower growth across the board for the mere fact that the last three years have seen exceptional growth since 2008, when the global crisis hit. The following year saw a recovery and 2010 was a year of exceptional growth. Property professionals had never seen such price increases in their 30 years in the profession, where prices went up by double digits in a short period of time.

This year witnessed continued exuberance among developers, agents and property buyers. The final two quarters usher us into 2012, which will be the year of the “great slowdown”.

It will be perceived as such because of the remarkable growth experienced in 2010, but in reality, it is not really a slowdown. It is not possible for prices to go up, up and away until kingdom come.

There has to be a reality check. So we will see slower growth in the coming year. In some locations, prices may hold their ground, but unless something major happens, whether at home or abroad, prices are unlikely to recede in the Klang Valley and other major cities.

Hence, it is not that there will be no growth; price increases next year will be slower, and more subdued and stable. In some locations, prices may plateau.

If there is still growth, however small, why call 2012 the year of the great slowdown?

On the global front, we have the eurozone crisis, which is still unravelling. If the eurozone breaks up, it will affect sentiments. The stock market will be the first to be impacted by the dim outlook and this will spill over into the property sector.

Of greater concern are individuals who have over-invested. They may find it challenging to meet their commitments. These include those who have multiple property purchases, and young people who over-committed themselves with properties costing RM500,000 and more.

By The Star

Property sector to correct

The steep increases seen in the last two years expected to sputter to a halt on weak global sentiment

The overall weak global sentiment is expected to cast a pall over the property sector, which is expected to undergo some downward correction next year, agents, property consultants and developers say, with the steep increases seen in the last two years sputtering to a halt. Virtually all segments of the property market will be affected.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang says the slowdown, though gradual, will be seen in the pricing and take-up rate of all housing segments, particularly more so in the high-end category.

“Whether it is Penang or the Klang Valley, we don't have that many multinational companies coming in to occupy some of our high-end properties. Rentals with yields of between 6% and 8% are no longer achievable,” he says.

This slower rate of growth is expected to be more apparent after the new ruling by Bank Negara kicks in. Effective Jan 1, new lending guidelines require banks to use net income to calculate the debt service ratio for loan approvals.

The new guidelines cover all consumer loan products including housing loans, personal loans, car loans, credit-card receivables and loans for the purchase of securities.

While this latest round has the objective of reducing overall household debt, it will affect the property sector, a branch manager of a local bank says.

Previous lending guidelines capped monthly mortgage repayment at 1/3 of net pay instead of gross pay. This new ruling, and the requirement to have a 30% downpayment on the third and subsequent property, introduced in 2010, will result in the banking sector being more stringent when it comes to mortgage loan approvals. The re-imposition of the real estate property tax, at 5% flat within five years of purchase, was another measure to curb speculation.

These measures, together with the global concerns over the United States and the eurozone, will affect sentiment. However, there will be opportunities in the affordable housing segment, which is part of the Government's Economic Transformation Programme.

Says Ireka Corp Bhd executive director Lai Voon Hon: “We see strong growth potential in these under-served' sectors such as mid-market residential and commercial as well as green' developments located close to infrastructure nodes. Market movement in recent months had observed major developers acquiring parcels of land outside the Klang Valley such as in Kajang, Semenyih and Nilai which are destined to be the next “hot spots”.

“With 65% of the Malaysian population falling under 35 years old, we trust that the demand will pick up as consumer confidence recovers. Close to 10 million people are expected to work, live, learn and play in the Greater KL metropolis by 2020.

“Burgeoning young and middle-class population also means the demand for mid-market properties will remain steadfast,” Lai said, adding that the mid-market will receive strong support in terms of demand, and this will be Ireka's primary focus in 2012.

Other developers to move into affordable housing include the Sime Darby group and Mah Sing group. Sime Darby recently launched affordable housing in Bandar Ainsdale in Seremban. Mah Sing Group Bhd, too, is moving away from high-end housing to go into the affordable housing segment.

Mah Sing group managing director and group CEO Tan Sri Leong Hoy Kum says: “The high-end sector, both landed and high-rise, will be more challenging with the RM4mil and above units taking longer to sell.”

Ireka's Lai says the company will be developing a 28-acre freehold land in Bandar Nilai Utama, Negri Sembilan into a trendy mid-market neighbourhood, consisting of landed houses and apartments. Another five acres of prime land in Kajang will be developed into a mixed development. consisting of two mid-market apartment blocks and a retail precinct.

Ireka will also embark on a modern industrial park development on its 21-acre freehold land in the established Sungai Chua industrial area near Kajang.

Aside from these three mid-market developments, in the pipeline is the launch of its boutique hotel and serviced residences project in Jalan Kia Peng, within the Kuala Lumpur City Centre (KLCC). This 30:70 joint development project between Ireka and Aseana Properties Ltd is slated for launch in the second half of next year.

On the overall market, Lai says launches and sales take-up rate will be generally slower. However, Malaysia's property sector (will be) resilient, he says.

Property consultant DTZ Debenham Tie Leung's executive director Brian Koh says “properties will have to be sensibly priced” with smaller units (if they are condominiums), selling better than larger ones. DTZ will be launching Naza TTDI Sdn Bhd's Platinum Park around the KLCC area next year.

Over in the office segment, the current glut is expected to persist into next year which will put pressure on rentals.

The overall view of property professionals is that the office market in Kuala Lumpur will remain soft next year unless the global economy recovers sufficiently to spur business expansion to take up the current supply in the city. With the eurozone the way it is, that seems unlikely.

Y. Y. Lau of YY Property Solutions expects Grade A office buildings in KL (existing and new) to face intense competition to secure tenants next year.

“Demand for prime Grade A office buildings held up well last year. But we are expecting an estimated five million sq ft of office space to come onstream in the Kuala Lumpur Commercial Business District and city fringes by end-2012, with KLCC and the Golden Triangle area providing over 90% of the new supply in the first half of next year. “In the second half, the bulk of the supply will be coming from the fringes of Kuala Lumpur.

“We opine that KL Sentral, Bangsar South and Mid Valley City will play a catch-up game in attracting eminent companies seeking MSC status and green building features, as well as conveniences in terms of availability of public transportation, ample eateries and amenities, and upgrading of corporate image. Good building quality and property management services provided are expected to attract companies to set up its businesses here,” Lau says.

By The Star

Singapore stamp duty a blessing?

Malaysian properties like the Sky Garden Residences project Setia Tropika in Johor Baru are more attractive because of the stamp duty imposed by the city state on investors.

Malaysian properties appear to be even cheaper for investors compared with those in the republic

Singapore's decision to impose additional taxes on private property purchases may be a blessing in disguise for other property markets in the region.

CB Richard Ellis (CBRE) Malaysia executive director Paul Khong says move will have a positive impact on Malaysian properties especially those in Johor.

Malaysian properties appear to be even cheaper as a result of the stamp duty by the Singapore government which translates into a further 10% discount compared with properties in Singapore.

“Many other countries including Australia and Britain will benefit as their investment climate is improving due to the lower interest rates and poor market conditions which will make their propertiesattractive to buyers. They are the favourite investment destinations too,” he tells StarBizWeek.

Singapore has announced an additional buyer's stamp duty (ABSD) of between 3% and 10% from Dec 8 on private property purchases, and it is applicable to all Singaporeans, permanent residents and foreigners. The move is aimed at “moderating demand and promoting a more stable and sustainable market.”

The ABSD is in addition to the buyer's stamp duty of 3%.

Khong says the imposition of an additional stamp duty on residential properties will have substantial impact on the Singaporean market.

“Many foreign investors will stay away from the market for a while and the tax will curb speculation on the market,” he says.

Observers are of the opinion that the Malaysian government is unlikely to impose more taxes to “ease” the property bubbles in some key locations.

“The Malaysian government is unlikely to take such an action even though the property prices in some areas especially in the Klang Valley are going up unreasonably,” said a local research house analyst. He says such a move could deter growth in the property market and even suppress demand.

According to Maybank Investment Research, prices of private residential properties have continued to rise, albeit more slowly in the last two quarters. It says prices are now 13% above the peak in second quarter of 1996, and 16% above the peak in second quarter 2008.

“Even with the current global economic uncertainty, the demand for private residential property remains firm largely driven by the volatility in the equity markets and with interest rates remaining low, private property in Singapore continues to attract local and foreign investors,” it says.

Khong: ‘Many foreign investors will stay awa y from the market for a while.’

The introduction of guidelines on responsible finance by Bank Negara last month has helped to clear some concerns about possible lending measures to curb property demand.

“However, the new guidelines are unlikely to lead to a significant drop in the prices of the property market. We think there is still a possibility for further property cooling measures if housing demand remains strong,” it says.

Meanwhile, Khong says the Singapore property market may take quite a while to adjust to the new move as the duty imposed this round is a hefty 10%.

Currently, the real property gains tax (RPGT) for properties held and disposed of within two years from the date of purchase stands at 10% (up from the current RPGT of 5% for properties sold within five years of the date of purchase).

On Wednesday, the Real Estate Developers' Association of Singapore (REDAS) said the latest move by the Singapore government to cool the residential property market might cause the economy to slip into a recession.

REDAS president Wong Heang Fine was quoted by Reuters as saying that industry players were of the consensus view that the measures would, at least in the short term, negatively impact property sales volume and price.

Local players vs new ruling

It is still too early to know the impact on the Malaysian developers who are making a foray into Singapore although there would be an unavoidable slowdown in Singapore property sales, according to Maybank Investment Research.

“This new ruling will not bode well for Malaysian developers which have projects in Singapore. Unlike Malaysia a buy and hold strategy is less applicable in Singapore due to relatively higher land costs of 40% to 60% of gross development value GDV compared with 15% to 20% in Malaysia's,” it says.

Sunway Bhd and SP Setia Bhd have property projects in Singapore while UEM Land Bhd has an indirect involvement via project fees from overseeing and marketing of Khazanah-Temasek's SG$11bil joint venture projects in Marina South and Ophir-Rochor.

Sunway has four ongoing projects with a total GDV of SG$1.7bil under its 30:70 joint venture with the Ho Hup Group and a small wholly owned projects with a GDV of SG$32.8mil.

SP Setia just started to make inroads with its first project known as the 18 Woodsville under a private development scheme expected to be launched in a few months.

“We believe the impact on Malaysian property players will be rather minimal as their exposure to the Singaporean market is relatively small.

“With the ABSD, we think there is possibility of some property investors turning their attention to the Malaysian market, especially in Johor given its proximity to Singapore,” OSK Research says.

By The Star

Friday, December 30, 2011

New residential units in Kajang promise luxury and space

Freehold: The Ambassador Suite units have four bedrooms, a study area and four bathrooms each.

A HOUSE that promises the luxury of a suite will sound attractive to many city dwellers.

The Suria Saujana Home Suites is the latest addition to residential developments in Kajang.

Developed by Hamton Realty Sdn Bhd, the project comprises 12 units of three-storey “President Suite” semi-detached homes and 23 units of three-storey “Ambassador Suite” super-links houses.

Hamton Realty managing director Tang Hong Why said the main emphasis was to build houses with ample space at competitive prices.

“We are aware that spacious residential properties come with a huge price tag. Hence, we wanted to focus on building affordable houses without compromising on the space,” he said.

“Every floor of Suria Saujana units boasts an open concept.

“For example, the bedrooms for both types are built bigger than the usual size, making the suite concept more apparent,” he said.

Tang added that careful consideration went into choosing the location for this project.

Suria Saujana is situated close to the North-South Expressway and Lebuhraya Cheras-Kajang. Among the nearby hypermarkets are Tesco and Giant.

Each unit of the President Suite homes has a built-up area of 3,396 sq ft. They come with four bedrooms, six bathrooms, a maid’s room, a study area, and a utility room.

Relax: The second floor of the Suria Saujana homes is dedicated to entertainment and leisure.

The freehold property is priced at RM868,000 for a standard unit.

The Ambassador Suite houses have four bedrooms, a study area and four bathrooms with a built-up area of 2,581sq ft per unit on freehold land.Each standard unit is priced from RM638,000.

Both types have modern contemporary designs with roomy exterior and interior spaces, giving owners a chance to express their ideas in decorating the house of their dreams.

The recently launched project is expected to be completed by early 2014. For details, call 03-7956 0089.

By The Star

Thursday, December 29, 2011

Magna Prima plans projects worth RM1.6b

Magna Prima aims to develop a commercial development project and a hotel in Jalan Ampang as well as a mixed-development project in Jalan Gasing.

KUALA LUMPUR: Magna Prima Bhd (MPB) is set to develop high-end property projects with an estimated gross development value (GDV) of more than RM1.6 billion in Jalan Ampang, Kuala Lumpur, and Jalan Gasing, Petaling Jaya, Selangor.

MPB, an investment holding company, aims to develop a commercial development project comprising two towers, residential units and a hotel in Jalan Ampang, as well as a mixed-development project in Jalan Gasing.

“The Jalan Ampang project is expected to start next year and the Jalan Gasing one in 2013,” said executive director Datuk Rahadian Mahmud Mohd Khalil.

On MPB’s ongoing 25-storey single-tower residential apartment project in Melbourne, Australia, known as Dynasty Living, he said 62 per cent of a total 320 units had been sold.

The remaining 122 units are expected to be launched in February next year in Kuala Lumpur, he said after the company’s extraordinary general meeting (EGM) here yesterday.

The project is expected to be completed in 2013 and will contribute to the company’s revenue with a gross profit of US$15 million (RM48.26 million) after 2013.

Other MPB ongoing projects — in Shah Alam, Bukit Jalil and Selayang as well as the Jalan Kuching project — are expected to contribute in the next two years.

On future projects, he said MPB is always looking to acquire more land for landed residential property and commercial shop lot projects.

On the industry’s outlook, he said landed property would remain at current levels after taking into account this year’s demand and sales performance but believed there would be an over-supply of commercial and office property.

By Bernama

Market cautious on WCT

An artist’s impression of WCT’s existing project, the Platinum Plaza, in Ho Chi Minh City. The company is set to undertake its second property project on a 11.5-acre site in the Vietnamese capital

Latest Vietnam project may be affected by slowing global economy

PETALING JAYA: The market is for now cautious over construction and property company WCT Bhd's joint venture with Southern Land Corp to develop 11.5 acres in Ho Chi Minh City, a project in which the former has a 70% stake.

This would be the second project for WCT, whose other project comprises an integrated development on 22.2 acres in the Vietnamese capital.

However, WCT's share price only gained 2 sen to RM2.32 despite the announcement and allowing for the quiet trading on the local bourse going into the long weekend break.

This could be due to the fact that while analysts have positive long-term views for Vietnam, current global economic conditions as well as high inflation and the devalued dong might be the stumbling blocks in the short term.

The country's inflation for December was still a eye-watering 18.1% year-on-year after rising 19.8% in November and surging 21.6% in October while to-date, the US dollar has gained nearly 8% against the dong.

Analysts believe the project, which involves the development of medium to high-end condominiums and commercial shoplots for the purposes of lease and/or sale, has long-term potential but could face challenges due to the expected slowdown of the global economy next year.

They have also maintained their financial forecasts for WCT pending guidance on the project's launch date and gross development value.

Affin Investment Bank Bhd analyst Ong Keng Wee said in a report that the Vietnamese property industry had long-term potential but short-term uncertainties remained with the eurozone debt crisis still unfolding and the global economy expected to slow in 2012.

He has maintained financial year ending Dec 31 (FY11) to FY13 forecasts with a target price at 15 times earnings per share for 2012 and maintained a “buy” call on the stock pending further information on the project.

Ong noted that the good response to Gamuda Bhd's Celadon City (in Ho Chi Minh City) and Gamuda City (in Hanoi) was a comforting sign but said that WCT construction division's recent tender failures and likely inability to secure RM2bil of new projects this year were the key concerns.

Meanwhile, analysts at Kenanga Investment Bank Bhd, who have maintained their “outperform” call on the stock, said global economic uncertainties could expose the project to construction delays and low take-up rates.

“There is no change to our forecast at this juncture,” they said, adding that the project would only contribute to earnings by FY14 with a contribution of 7 sen to sum-of-parts valuation although that had not been factored into the forecasts yet.

They reckon the company would likely fork out RM78mil for its portion of the joint venture and gear up to RM314mil (assuming operating margin at 20%) while the project financing could further leverage the balance sheet up to 1.07 times gearing throughout the 5-year project period (from 0.9 times as at third quarter ended Sept 30).

WCT said in an announcement to Bursa Malaysia on Tuesday that the project had a duration of 50 years from the date of receipt of the investment certificate awarded by the People's Committee of Ho Chi Minh City on Dec 24.

The company also announced in late October the acquisition of 468 acres in Rawang for RM38.4mil.

By The Star

MIDF maintains 'neutral' call on WCT’s stock

This is despite the property developer receiving Vietnamese government's approval to undertake a residential and commercial development in Ho Chi Minh City.

MIDF Research has maintained “neutral” call on WCT Bhd, despite the property developer receiving approval from the Vietnamese government to undertake a residential and commercial development in the capital city.

Two days ago, WCT told the stock exchange that its unit WCT (S) Pte Ltd was awarded an Investment Certificate to develop a 4.6ha plot at Saigon South in Ho Chi Minh City.

The 70:30 joint venture between WCT and the Vietnamese government’s Southern Land Corp will see WCT setting aside an initial charter capital of US$25.2 million (RM79.88 million).

MIDF said it is sceptical on the execution as back in 2008, WCT was awarded a contract to build Platinum Plaza, the largest shopping mall in Ho Chi Minh City. Yet, up until now, that project is still not contributing to WCT’s income.

“The property market in Vietnam is unstable as the country is still facing high borrowing costs and inflation,” the research house said in its notes to investors.

MIDF estimates that WCT’s share price might settle at RM2.20 from the current RM2.32. It derived the RM2.20 target price by ascribing a price to earnings ratio of 9.6 times.

By Business Times

Mah Sing files suit over project

PETALING JAYA: Property developer Mah Sing Group Bhd has taken legal action to restrain Asie Sdn Bhd and Usaha Nusantara Sdn Bhd from making deals concerning a 4.08-acre leasehold parcel along Jalan Tun Razak, Kuala Lumpur.

Mah Sing told Bursa Malaysia that it had filed a summons on Tuesday at the High Court to apply for an injunction concerning the joint venture land.

Leong: ‘We shall make further announcements when more details are available

On Aug 2, Mah Sing had entered into a 60:40 joint venture with Asie to develop the parcel into a mixed development, tentatively called M Sentral, with a gross development value of RM900mil.

Mah Sing would pay RM106.6mil for the parcel, to be settled via 60% cash and a 40% stake of the joint venture company to Asie.

Usaha Nusantara is a wholly-owned subsidiary of Asie, which is the concession holder for 58 acres of leasehold land slated for urban regeneration under the Blue Corridor policy of Kuala Lumpur City Plan 2020.

The 58-acre land includes the joint venture land, which is part of the urban regeneration area of the Tunku Abdul Rahman flats or popularly known as the Pekeliling flats.

However, Asie has taken the position that the joint venture agreement had lapsed on Dec 2 given that certain conditions precedent (CP) in it were not met.

Mah Sing, however, maintained that the agreement had not lapsed, given that they had waived certain CP.

In a statement to StarBiz, Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum said: “Mah Sing has exercised its rights as provided in the joint venture agreement to waive the CP and proceeded with the transaction, and has also filed a civil suit for specific performance on the CP. We shall make further announcements when more details are available.”

Property analysts said the potential loss of the joint venture deal would not have a significant effect on Mah Sing.

“The proposed M Sentral project is not really big when compared with some of Mah Sing's projects in the pipeline,” said a bank-backed analyst.

Kenanga Research said in a recent note that if the project did not go through, there was no material impact on its financial year 2011 - 2012 net income of RM160mil to RM204mil as the project's significant contribution would only commence from FY13 onwards.

“We would be disappointed if the project fell through as we thought it would give the group an opportunity to tap on to other parts of the River of Life project and enlarge its war chest of landbanks.”

Meanwhile, Leong pointed out that presently, Mah Sing had a remaining landbank of 1,070 acres with GDV of RM13bil.

“Together with unbilled sales of RM2.14bil, this should last us five to seven years. We will also be looking out for more good landbank in 2012 and are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth,” he added.

By The Star

Wednesday, December 28, 2011

WCT unit in Ho Chi Minh City project

KUALA LUMPUR: WCT Bhd says its unit WCT (S) Pte Ltd will undertake the residential and commercial development project in Ho Chi Minh City in Vietnam.

The project is located at the development corridor of Nguyen Van
Linh Expressway at the New Urban Development Area of Saigon South.

In a filling to the stock exchange yesterday, WCT said the project is earmarked for the development of mid-high-class residential apartments and commercial properties for the purposes of lease and/or sale.

“With a plot ratio of six, the project is planned for commercial shoplots and condominium units complete with a garden and full-fledged facilities for modern living,” the company added.

By Business Times

US rental demand lifts housing sector

WASHINGTON: Brian Keith is busier than ever as the architecture firm he works for rushes to wrap up work on a 300-unit apartment complex in Dallas.

The project is one of dozens the firm, JHP Architecture, has on its hands a surge of business driven by a rise in demand in the United States for rental properties.

The increased demand has forced JHP to expand, and it expects to keep hiring at least through the first quarter.

“We're seeing overall work come back and there's a backlog of contracts to go through,” said Keith, director of urban design and planning at JHP.

“There's strong interest in multi-family units and plenty of pent-up demand.”

With US unemployment at a lofty 8.6%, home foreclosures rising and property prices under pressure, more and more Americans have given up the dream of owning, opting instead to rent, a shift that is remaking the face of the US housing industry.

The percentage of Americans who own their home dropped from a peak of 69.2% in late 2004 to a 13-year low of 65.9% in the second quarter.

It edged up to 66.3% in the third quarter of this year.

On the flip side, the percentage of rental properties that are empty fell to 9.8% in the third quarter from 10.3% a year earlier.

In a recent report, Oliver Chang, an analyst at Morgan Stanley, dubbed 2012 “The Year of the Landlord.”

“Rents are rising, vacancies are falling, household formations are growing and rental supply is limited,” the Morgan Stanley report stated. “We believe the demand for rental properties will continue to grow.”

Groundbreaking for new housing jumped 9.3% in November to the highest level in 19 months, fuelling optimism that the battered housing market was regaining its footing.

The gains, however, were almost solely in multi-family housing. Groundbreaking for structures with five or more units shot up more than 30% from October to now stand at nearly double the year-ago level.

By Reuters

Buyers storm project site

BUYERS of the problematic Ukay Bistari mixed-development project took matter in their own hands and marched into the site office to get the keys to their units.

The property owners brought the steel barrier down and entered the compound to see their units, something they have been yearning to do for years.

About 100 protesters gathered to express their disappointment and anger against the developer of the project.

The protesters, who were also members of the Abandoned Property Owners Malaysia (Victims) Association, were promised keys to their units in Block A on Dec 27.

Losing patience: Barriers to the site were brought down by buyers.

However, Victims chairman Dr Mohamed Rafick Khan Abdul Rahman announced they would receive the letters of vacant possesion soon. The keys were then returned to the site office.

Dr Rafick said the developer had to ensure that the project was completed on time and not keep quiet about the matter.

“The buyers are desperate and 27 of them have to file for bankcruptcy. The developer has taken money from the people and they have to own up.

“It would seem the developer is not serious about keeping to their promise because there are only 80 workers left at the site from the 300 four months ago,” he said.

He added that the state government had not done much to help the victims of abandoned housing projects compared with the Housing and Local Government Ministry.

Self-employed Mohd Faizal Jaafar, 32, has been waiting to move into his own home since 2006 but it is still a dream.

Which is which?: Purchasers sorting out the keys to the units.

“I have gone through a divorce and remarried but I have yet to have my own place. I bought the unit in 2003 thinking this will be where I start my family.

“I am sad this has happened but as buyers we cannot just sit and wait. We have to do something. I hope the ministry will revoke the developer’s licence and get someone else to take over the project,” he said.

According to the developer’s spokesman, the letters of vacant possession were out as promised.

She said there was no need for the purchasers to behave in an uncivilised manner by taking the keys themselves.

“Their action is considered trespassing and they have even brought down the hoarding. If there is damage to the property, who is going to bear the cost?” she asked.

She added they had filed a police report on the incident.

Housing and Local Government Minister Datuk Datuk Seri Chor Chee Heung had said that 600 units from 1,172 apartment units would be handed over while the remaining would be handed in December and February next year. This involved Block A, E, and E.

Ukay Bistari in Ampang consists of 2,214 mixed-development units with double and two-and-a-half storey houses, low-cost apartments, service apartments as well as shops and office lots.

It was reported that the project was launched in August 2003 scheduled to be completed between August 2005 and June 2007.

A total of 353 double-storey houses were completed in October 2006 while another 103 units were completed in May 2008.

By The Star

Tuesday, December 27, 2011

Several projects in Kuala Lumpur still in limbo

Abandoned: The stalled Plaza Rakyat project.

ANOTHER year has passed and there seems to be much uncertainty over numerous projects in Kuala Lumpur.

One of the most talked about is the plan to develop one of the oldest Malay settlements in the capital, Kampung Baru.

The few changes that had been done this year were the upgrading of Jalan Raja Abdullah and Jalan Raja Abdul Aziz, as well as the drains and roads, after decades of attempts to redevelop the area.

Kampung Baru is a 110-year-old settlement made up of seven villages, covering 90.2ha, with about 35,000 residents.

The bulk of it is under Malay reserve land. There are about 4,300 owners.

Set aside as a Malay Agriculture Settlement reserve on Jan 12, 1900, it is one of the last remaining sites in the city with distinctive Malay traditional houses and way of life.

After several attempts to kick-start the plan to develop the settlement, the Kampung Baru Development Corporation Bill 2010 was tabled for first reading by Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin in December last year.

The move, however, irked residents including the Kampung Baru Development Association who claimed that they were not consulted before the bill was tabled.

Problems cited by the residents included the immunity of the Kampung Baru Development Corporation and representatives of the landowners in the corporation.

A consensus was finally reached between the Federal Territories and Urban Wellbeing Ministry, Kuala Lumpur City Hall (DBKL) and representatives of stakeholders in June.

The representatives of the stakeholders included the Kampung Baru Malay Agricultral Settlement board of management, Kampung Baru Development Association and Kampung Baru Malay Children’s Welfare Association (Pakam).

Nong Chik at that time said the representatives had agreed to a comprehensive development in the area by the corporation and government-linked companies.

Only after months of meetings and consultation with the residents, a new amended Kampung Baru Development Corporation Bill was tabled, debated and passed during the Dewan Rakyat sitting in October this year.

The three most important issues amended in the bill were revoking the immunity of the Kampung Baru Corporation, retaining the Malay Agricultural Society and introducing a new post of deputy chairman for the Kampung Baru Development Corporation that will include a landowner.

With the bill now passed, it is only expected to be gazetted by the first quarter of next year, paving the way for the setting up of Kampung Baru Corp after numerous hiccups along the way.

Another project which has been in limbo is the Keramat Mall, a project that has stalled for a number of years now.

The four-storey market complex with a food court, bank and post office was completed last year at RM49mil.

Traders at the Keramat wet market nearby were asked to move into the new mall but they refused to do so, citing several problems.

The traders were unhappy with the design of the building as well as the lots and have asked for a nearby building to house just the wet market.

The project faced more trouble as landowners of the proposed building refused to move, citing insufficient compensation from Kuala Lumpur City Hall (DBKL).

Recently, Nong Chik said a new deadline would be given to the traders to move.

He added that the traders did not want to move because they were afraid of losing their customers, but eventually they have to move.

The Plaza Rakyat is another project that’s turning into an eyesore.

The RM70mil mixed-commercial development near the Puduraya bus station was left half-completed about 15 years ago when the developer ran into financial difficulty.

Many of the buyers have pressured DBKL to solve the problem, however, nothing has been done so far to revive the abandoned project.

Nong Chik had earlier said a new developer would be appointed by the Economic Planning Unit through an open tender, after the deal with the original developer was terminated.

However, so far nothing has been announced on the plan to revive the project.

The authorities need to come to a quick solution to solve the problems in these projects that have been in limbo for so long.

By The Star

Property: Klang Valley elite enclaves in the making

With the rise of luxury property developments all over the Klang Valley, picking the next elite residential address may not just be confined to paying over RM1,000 per sq ft.

While elite enclaves like Bukit Tunku, Taman U Thant as well as certain sections of Damansara Heights may offer snob appeal to wealthy property buyers, such neighbourhoods may not necessarily have everything that today's lifestyle expectations demand. For instance, iconic architecture and integrated facilities.

Residential property specialist Chan Ai Cheng picks several upcoming developments that will shape up to be elite residences when completed.

Chan Ai Cheng: Iconic design by distinguished architectural firms is a must for landmark developments

“The overall concept is important,” said Chan, who is S.K. Brothers Realty Sdn Bhd general manager. And for top places to live in the near future she cites:

Symphony Hills (Cyberjaya) by UEM Land Bhd

KL Metropolis by Naza TTDI group

KL Eco City by SP Setia Bhd

Bangsar South by UOA Holdings Bhd.

Today's discerning property buyers, she explains, will look at developments that offer a modern lifestyle concept with a combination of desirable factors lush greenery, iconic design by distinguished architectural firms and high quality material.

“The right mix of products such as an integrated development combining residential with commercial and retail property is another attraction,” said Chan.

“The convenience of the place itself, that is, being self-contained with a concept that combines life, work and play' as well as easy access and connectivity to other locations would be another significant factor.”

She points out that when it comes to inspiring developments, the futuristic enclave of Cyberjaya will be one of the best places to live.

“Cyberjaya offers selected developments that are beautiful in concept and way of life such as the Symphony Hills development,” said Chan.

Developed by UEM Land, Symphony Hills is a mixed strata project that forms part of a development spanning 98 acres.

Located near the Multimedia University, UEM Land plans to build 2,865 residential and commercial units with a gross development value (GDV) of RM1bil within eight years.

KL Metropolis

Touted as KL's new international trade and exhibition district, KL Metropolis spans 75.5 acres and reportedly involves a GDV of RM15bil. The project will house the new Matrade Centre and other building components.

To be ready by 2016, the Matrade Centre will cover 13.1 acres while the remaining 62.4 acres would be developed in three phases over 15 years.

The whole development is expected to be completed by 2025. The first phase include residential and office towers as well as a regional retail centre scheduled to be ready by 2015.

KL Eco City

KL Eco City is developed by SP Setia through its subsidiary KL Eco City Sdn Bhd. Involving 25 acres of leasehold land, the project with a GDV of RM6bil comprises an integrated, mixed-use development. It is estimated to take 10 years to complete.

The master plan is by Jerde Partnership International USA in partnership with local architectural firms GDP Architects Sdn Bhd, BEP Akitek Sdn Bhd and GRA Architects Sdn Bhd.

Bangsar South

Bangsar South is another integrated, high-density development with residential and commercial properties.

Besides its central location at Kampung Kerinchi next to the Federal Highway, this 60-acre development by UOA Holdings boasts of excellent Internet and transport connectivity.

Launched in 2007, it will take about 10 years to complete. Total GDV is RM2.5bil.

By The Star

Saturday, December 24, 2011

The Pudu Jail transformation

The decision to transform the Pudu Jail site into a prominent landmark in Kuala Lumpur has set tongues wagging among industry observers and experts within the local property scene.

The project, better known as the Bukit Bintang City Centre (BBCC), was initially set to be an integrated mixed development but is now slated to become a vibrant transport hub. Regardless of what it will become, the question at the end of the day remains the same do we really need it?

It should be noted that BBCC, should it be turned into a commercial centre, will have to compete with not just existing, thriving developments in the vicinity such as Berjaya Times Square, but also potential projects in the near future in and around the Kuala Lumpur Golden Triangle area.

It also has to cope with mammoth projects a little outside the city centre such as the KL Metropolis by Naza TTDI Sdn Bhd that will add millions of square feet of office, retail and residential space. In addition, there is competition from the ongoing KL Sentral project and the recent launch of the KL International Financial District.

Other projects in the pipeline include Menara 3 Petronas, Menara Binjai, Menara Worldwide and Permodalan Nasional Bhd's proposed 100-storey Menara Warisan Merdeka.

Commercial value

“With many developments coming up, this project (BBCC) will face some competition,” says Elvin Fernandez, managing director of property consultancy firm Khong & Jaafar Sdn Bhd.

Elvin: ‘It will take a lot of good planning and execution, (and) if a project is well placed and you add more space, it makes things better.’

He however adds that BBCC is strategically located and has the potential to be successful.

“It will take a lot of good planning and execution. Astute management plays a big part. Lots of research and correct decisions from day one this is the stuff of success. But it cannot be underestimated what needs to be done.”

Elvin does not think that BBCC will “steal the crowd” from the Berjaya Times Square area.

“I doubt it will steal the crowd from there. In fact, I think it will enhance Berjaya Times Square. If a project is well placed and you add more space, it makes things better.”

Elvin notes the Government's need to make Kuala Lumpur a liveable city which is one of the twelve Key Economic Areas (NKEA) identified under the Economic Transformation Programme (ETP).

“The ETP and emphasis on making KL a liveable city is a property-dependent policy. You need to look at all projects and not just one in isolation. Sufficient demand must be created to receive the supply.”

Soo: ‘There is a possibility that the 100-storey (Menara Warisan Merdaka) tower could take up all of the demand and vacuum clean the market!’

Depending on how the development is planned, CB Richard Ellis Malaysia managing director Allan Soo reckons that new supply of space at BBCC could be either a boon or a bane.

“The question is what kind of commercial space will be offered. Take the 100-storey (Menara Warisan Merdaka) building as an example. On one hand, having a 100-storey tower nearby justifies having more commercial space.

“However, there is also a possibility that the tower could take up all of the demand (for commercial space) and vacuum clean the market! So the success rate is 50-50.”

The development of the former Pudu Prison was first unveiled by Second Finance Minister Datuk Ahmad Husni Hanadzlah in May last year. Back then, the plan was to redevelop the land into a mixed development project that would comprise a 33-storey office tower, shopping complex, 43-storey hotel and 44-storey serviced apartment.

UDA Holdings Bhd is the project's master developer. The company was recently issued a directive by its shareholder, the Finance Ministry, to divide the 20-acre land into three plots to maximise the value of the land.

Two plots will given to bumiputra investors to develop, while UDA will develop the one parcel.

Transport hub

Earlier this month, UDA chairman Datuk Nur Jazlan Mohamed said the company's transport consultant had indicated that the site was instead suitable to be redeveloped into a transportation hub and so a big bus terminal is expected to be constructed on the site.

He says the transportation hub will be able to accommodate 200,000 to 300,000 commuters daily and complement the monorail and light rail transit facilities already at the Pudu Jail site.

Nur Jazlan says the transport hub will also help to ease vehicle congestion around Kuala Lumpur's golden triangle area, adding that the terminal will complement the my rapid transit (MRT) and ease commuter travel into the city centre in the future.

VPC Alliance (Malaysia) Sdn Bhd director James Wong points out that there are already a number of transport hubs in Kuala Lumpur.

“We already have KL Sentral and the Pudu Raya bus terminal. You may have to close one if you want to build another.”

One industry observer who requests anonymity says it will not be viable to set up a transportation hub in Pudu.

“Just look at the bus terminal there. It's always congested and the traffic jams in the area are crazy!”

Soo believes that the area can be made into a transportation hub if it is planned properly.

“With the current infrastructure, the current bus terminal is always congested. If we can take it out of that fringe and offer taxi as well as MRT services, it could work.”

Former prison site

Whatever is to become of BBCC, one will eventually have to address the elephant in the room. For over 100 years, the site housed some of the country's most notorious criminals and served as an execution ground for convicts a fact that might not sit well with potential investors and residents, especially the superstitious types.

“If BBCC is to house retail and office space, it might not be a problem,” says Wong.

“However, if the land is redeveloped to comprise residential property, it may affect demand.”

Elvin reckons the “stigma” associated with Pudu Jail will not be a big deal.

“To me, it's not an issue, although to some people, it might be. Ultimately, it's all about perception.”

Soo says it all depends on how BBCC is marketed.

“As long as your rebrand it properly, people will not be reminded of the former prison. Besides, people tend to forget after a while, especially with the newer generation coming into the market.”

Soo also says the project can be marketed to foreign investors and buyers, who are less likely to be concerned with the site's history.

By The Star

1MDB embarks on tender process for KLIFD project

PETALING JAYA: The tender process on major foundations works for the Kuala Lumpur International Financial District (KLIFD) has started, 1Malaysia Development Bhd (1MDB) said.

The Government-owned company had invited contractors to participate in a pre-qualification exercise in the construction and completion of earthwork and excavation works, retaining structure, piling works and related sub-structure works.

Deputy chief executive officer (operations) Datuk Azmar Talib said in a statement yesterday: “This is probably among the largest earthwork, covering the size of about 20 football fields (12ha) and excavating about 20m or about four storeys into the ground.”

Azmar said many activities had been taking place in view of the start of construction in the first quarter next year. Amid this, they are creating and enhancing value to the site.

Acting as the master developer for KLIFD, 1MDB is taking measures in environment management planning to minimise the impact of construction on the surrounding environment.

“As the master developer for KLIFD, we are always conscious of our responsibility to the community. We have sought the guidance and cooperation of Dewan Bandaraya Kuala Lumpur. We have taken proactive steps to submit the Environment Impact Assessment (EIA),” Azmar said.

The EIA is voluntary as the size of the KLIFD development is below 50ha, which is the minimum development size that will call for a mandatory EIA.

The notice of pre-qualification will close on Jan 6. Short listings and invitations to tender have been scheduled to complete by mid-Feb next year.

Azmar said 1MDB sought an inclusive participation by both big and small players. Companies can form joint ventures (JV) or consortium to participate in the pre-qualification.

The JVs can also be between local companies and international companies with locally incorporated operations. This will promote a blend of global and local expertise as well as technology transfer.

1MDB is also developing a Digital Master Plan for a digitally smart financial district, utilising technologies that are smart, intelligent and future proof.

The 30ha development in the Imbi area in between Jalan Tun Razak, Jalan Sultan Ismail and the Putrajaya elevated highway, seeks to create a catalytic pool of world-class players by combining leading financial institutions and top global companies.

By The Star

AEON, Parkson rightly command higher valuations

KUALA LUMPUR: AEON Co (M) Bhd and Parkson Retail Asia (PRA)'s solid price to earnings (PE) ratio shows that good consumer companies in the region rightly command higher valuations.

In its report, OSK Research Sdn Bhd has tagged AEON, which runs the Jusco retail stores, at a higher PE of 15 times to RM8.23.

PRA, which was recently listed on the Singapore Stock Exchange (SGX), currently trades at a 18 times forward PE, it added.

"Although the group posted two consecutive quarters of top and bottom-line year-on-year contractions, AEON still logged in positive revenue and net profit growth in Q3 after reopening its department store in 1 Utama. Since August, the company has been delivering positive profit growth since 1998," it said.

Hence, OSK Research has recommended the stock as a "buy", at a fair value of RM8.23.

It said AEON has new stores in the pipeline. The retailer plans to open two to three outlets next year alone.

"In the next two years, we expect AEON to open one outlet each in Kedah, Johor and Penang, for which the land was acquired in early 2011 (in Kedah and Johor) and in December in Penang," it said.

AEON also plans to penetrate Sabah and Sarawak, where it has no presence, next year. At the same time, the group will maintain its strategy as a residential area mall and will only penetrate small towns.

OSK Research likes AEON's unique business model as a department store-cum-shopping mall operator, which locates its outlets near residential areas and targets the mass market.

It said PRA's higher forward PE than AEON's reflects the former's regional presence and faster growth.

By Business Times

TA Enterprise Q3 profit falls to RM20m

KUALA LUMPUR: TA Enterprise Bhd’s pre-tax profit declined to RM20 million in the third quarter ended October 31 from RM36.5 million in the same quarter last year.

However, its revenue rose to RM173.1 million from RM153.3 million previously.

In a statement to Bursa Malaysia yesterday, TA Enterprise said it recorded lower contributions from both the stockbroking arm and TA Global Group in the current quarter.

It said contributions from its property division would continue to be positive, despite growing uncertainties in the global economic landscape.

By Business Times

Friday, December 23, 2011

Three-storey superlink homes launched

Luxurious: Nautilus, D’Island Residence’s latest three-storey superlink homes are priced from RM1.71mil.

LBS Bina Group Berhad (LBS) launched Nautilus, D’Island Residence’s latest three-storey superlink homes priced from RM1.71mil for land area of 24’ x 80’ and RM1.81mil for the 24’ x 100’ recently.

Inspired by the classic charm of the Nordic region as well as its renowned tradition of minimalist design, Nautilus will appeal to those with a discerning taste for subtlety and understated elegance.

The luxury Superlink homes, each endowed with an authentically Nordic essence, boast a spacious gross built-up area from 4,246sq ft for 24’ x 80’ and from 4,791sq ft for 24’ x 100’, defined by versatile en suite spaces throughout.

Distinctively contemporary in design, Nautilus offers two lavish layout choices with five bedrooms, one utility room and six bathrooms.

The architecture and overall design of Nautilus is characterised by a series of modern, symmetrical forms, enhanced by a subdued colour palette.

The spacious interior of each home is further accentuated with an expansive indoor atrium which allows for an abundance of natural light, illuminating indoor areas and bringing forth a feeling of domestic warmth.

A private roof garden serves as a natural extension into the great outdoors, facilitating spectacular views of the development’s beautifully landscaped surroundings.

The inclusion of a private in-house lift gives residents the ultimate sense of exclusivity.

Explaining the overall concept for the luxury residential development, LBS managing director Datuk Lim Hock San said, “Our idea is to capitalise on the natural terrain and the beautiful 404ha water mass surrounding the 71ha D’Island Residence development. We will use existing landscapes to bring out the best in each launched phase to create a unique experience for every homeowner.”

In addition to exclusive sunrise and sunset views right from their terraces, residents at D’Island Residence will be able to delight in the calm waters and pristine landscaping surrounding their homes.

The serene laid-back atmosphere will provide the foundation for an inspiring way of life, creating a haven for residents to unwind and recharge.

Thus far, all 122 units of Apicalia, D’Island Residence’s first phase three-storey luxury superlink units have been sold.

The recently launched 44 units of Balvia, a series of three-storey semi-detached homes, are already more than 40% sold.

D’Island Residence has an estimated GDV of RM3.6bil and is expected to take five to seven years to complete.

The development’s superlinks, semi-detached and bungalows are scheduled to be launched in 2012.

By The Star

Well connected township

Mah Sing Group previewed its new 91ha township, M Residence@ Rawang for priority registrants recently, with 80% take up of Phase 1 achieved in a single day.

The township which has an estimated gross development value of approximately RM948mil drew some 2,500 registrants since the land was acquired in October.

Good buy: Priority registrants having a first look at M Residence@Rawang.

Registrants were able to confirm their interest for properties in Phase 1 comprising 214 units of 18’x70’ link homes with built up of approximately 1,650sq ft priced from RM360,800.

Phase 2 shall be opened to meet buyers’ demand. This comprises 233 units of 22’x80’ superlink homes with built-up of approximately 2,380sq ft priced from RM558,800.

Mah Sing’s chief operating officer James Bryuns said, “M Residence@Rawang meets the current need for quality housing at accessible entry level. We believe that Phase 2 shall see equally strong interest as we are offering semi-detached layouts in our superlink homes, at link home pricing.”

The 22-footers in M Residence@Rawang have an expansive layout boasting three bedrooms with en-suites on the first floor, whilst the ground floor houses the living room, dry and wet kitchen, a guest room, bathroom and powder room. They also enjoy a generous 10ft yard area at the back.

M Residence@Rawang is well connected and is only 5km from the mature townships of Anggun 1&2@Kota Emerald and 8km from Emerald East and West. It only takes 20 minutes to get to the Rawang toll from Kuala Lumpur (Jalan Duta toll) and Petaling Jaya (Damansara toll).

In terms of distance, it is only 28km from both tolls. From the Rawang toll, it is less than 10 minutes or 10km to the project.

A major road upgrade to turn the road into a dual carriageway from the junction of the Rawang toll to the junction of the main road to Bandar Tasik Puteri is in progress, and shall improve the traffic flow along this road. M Residence@Rawang can also be accessed via the Kuala Lumpur-Kuala Selangor Expressway (formerly known as Latar Highway).

Besides Rawang town itself, the project has a large target market catchment from Kuala Lumpur, Petaling Jaya, Shah Alam, Bukit Jelutong, Subang Jaya, USJ, Kepong and Selayang who are looking for an affordable alternative in a well connected location.

Furthermore, there are large catchments of upgraders from Batu Arang, Kundang, Kuang, Sungai Buloh, in search of new township schemes offering a lifestyle concept.

Bukit Badong Forest Reserve is located next to M Residence@Rawang and extensive green reserves namely Templer’s Park, Kanching Forest Park and Commonwealth Forest Park are all within the radius of 15km of the project.

By The Star

Property market to see a gradual slowdown next year

KUALA LUMPUR: The Malaysian property market is likely to see a gradual slowdown next year, taking into consideration the uncertainty in the global economic situation.

Fiabci Malaysia president Yeow Thit Sang said the high end residential units were already seeing a slowdown both in pricing and take-up rate.

“There are fewer expatriates from multinational companies coming here and rentals with a yield of between 6% and 8% are no longer achievable. Investors in these units will have to wait longer to realise their investment. The slowdown in global economy is definitely affecting the high-end property market,” he told Bernama recently.

He also saw a fallout for office space next year, saying the category was already overbuilt and the overhang felt in the market with rental falling and a slow take-up rate.

Meanwhile, Zerin Properties chief executive officer Previndran Singhe said the slowdown in the property market would only last until the first quarter next year and the industry would be stable afterwards.

“Prices will remain stable, with asking prices, not values, becoming more reasonable as owners check their values to real pricing. At present, sentiment is down due to the eurozone financial crisis and the US double dip fears, which has been faring for a long time, but I think we are more Asia focused,” he said.

By Bernama

HK ‘Superman’ swoops on another mall

Li Ka-shing-owned Cheung Kong Group is buying The Citta, the new suburban mall in Ara Damansara

The Cheung Kong Group, owned by Hong Kong tycoon Li Ka-shing, is buying The Citta Strip Mall for an estimated RM245 million.

Sources told Business Times that the purchase was done through Cheung Kong Group’s ARA Asia Dragon Fund.

Citta, the new suburban mall in Ara Damansara, is 70 per cent-owned by German real estate fund SEB Asset Management and 30 per cent by property developer Puncakdana Group.

“There are a few conditions precedent that have to be met before the deal is completed and one of it is state approval,” a source told Business Times.

Messages left at the office of Mah Siew Sian, the managing director of Puncakdana, were not returned.

The open air shopping mall, with some 424,467 sq ft of nett lettable space, opened for B4business in April 2011.

The mall covers three floors, excluding the basement and rooftop, and has over 800 car park bays.

Tenants in the mall include Harvey Norman, MBO cinema, Pappa Rich, Chili’s, Julia Gabriel, RakuZen and Anjappar Restaurant.

Li, who is in the list of Asia’s richest men, is known as “Superman” in Hong Kong due to his deal-making ability.

His Cheung Kong conglomerate is one of Hong Kong’s biggest property developers and owns the world’s largest operator of container ports, among others.

Cheung Kong’s affiliate, ARA Asia Dragon Fund, bought two properties in Malaysia last year – One Mont’ Kiara in Kuala Lumpur and Aeon Bandaraya Mall Melaka – for a total of RM710 million.

In May, ARA Asia Dragon Fund won the bid for three shopping complexes – Klang Parade in Selangor, Ipoh Parade in Perak and Seremban Parade in Negri Sembilan.

It paid some RM450 million to TMW Asia Property Fund.

By Business Times

Consultants: Right timing for PNB's RM1.74bil London property buy

PETALING JAYA: Permodalan Nasional Bhd's (PNB) reported 350mil (RM1.74bil) purchase of Milton & Shire House building in London is a good move owing to the weak pound sterling and the European economic woes, said property consultants.

The Times reported recently that PNB had bought the 15-floor complex from US-based fund manager Beacon Capital Partners.

The complex is said to have 460,000 sq ft of office space, and houses global law firm Linklaters which is paying RM100mil in rental annually on a lease that expires in 2026.

CB Richard Ellis executive chairman Christopher Boyd said that it was a unique time to buy real estate in London, as traditional major funds from the United States and Europe were not in the market due to the global economic slowdown.

“So you have less competition for buildings like this. The downside risk is minimal as PNB bought the building with a long lease,” he said.

Property consultancy DTZ Nawawi Tie Leung executive director Brian Koh pointed out that London was a global financial and commercial centre, and had some of the most expensive real estate in the world.

“In good times, it is very difficult to penetrate the London market due to high competition for prime properties, which accounted for its low historical yield,” he said.

Koh said the weak pound and the liquidity crunch in Europe, due to the eurozone debt crisis, had made it easier for players from the Middle East, South Korea and Malaysia, among others, to enter the London real estate market at reasonable prices.

The Times said it was the “largest single asset transaction in central London this year”.

It also said PNB was believed to have allocated 1bil (RM4.98bil) for London investments.

The daily quoted PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman as saying the transaction was “part of a strategic plan in acquiring premium assets in major cities globally after the acquisition of our maiden overseas property, Santos Place in Brisbane last year”.

PNB reportedly bought the upmarket office block in Brisbane for more than A$290mil (RM931mil).

The 37-storey building has 373,508 sq ft of lettable space with about two-thirds of that leased to Australian oil and gas giant, Santos.

A recent StarBiz report quoted sources as saying PNB was looking to invest in properties primarily in London, Sydney, Melbourne and Perth.

PNB's management could not be reached for comments at press time.

By The Star

Thursday, December 22, 2011

LBS upbeat on RM800m sales target

LBS Bina Group Bhd (LBS) is confident of achieving RM800 million sales target despite a challenging year ahead.

Managing director Datuk Lim Hock San said strong market demand and competition in the property sector will generate higher value for Malaysian homebuyers.

"We feel this is a positive sign as this creates the opportunity for more innovative and creative products for consumers. Homebuyers will be at an advantage as each investment dollar will generate higher value for them," he said.

Landed property for both affordable homes and high-end homes are expected to be the highlights of 2012 with the rising scarcity of land in urban areas.

Property prices are expected to continue climbing albeit at a lower rate compared with this year.

LBS has a land bank of some 931.5ha worth an estimated gross development value (GDV) of RM9.1 billion.

Lim said the group will launch 13 new projects comprising 2,085 units with a GDV of RM1.5 billion together with some 19 ongoing projects with a GDV of RM562 million.

This includes D'Island Residence, Bandar Saujana Putra, Taman Golden Hills in Cameron Highlands and Bandar Putera Indah in Batu Pahat, Johor.

While focusing on the high-end market, Lim said LBS will continue to offer quality homes in the medium-cost range.

With the implementation of My First Home Scheme and other government initiatives, LBS anticipates this market to contribute 20 per cent to total revenue.

"With our recent rebranding and progressive changes, we will continue to learn and improve throughout the year. Part of that process includes recrui-ting more talented employees to take our growth to the next level," he said.

By Business Times

BLand Q2 net profit higher

KUALA LUMPUR: Berjaya Land Bhd’s net profit rose to RM55.85 million in the second quarter ended October 31 this year from RM43.69 million a year ago.

Group revenue, however, eased to RM988.9 million from RM1.02 billion previously.

The slightly lower revenue was mainly due to the lower property sales registered by its property development business, BLand said in a statement yesterday.

By Business Times

Wednesday, December 21, 2011

LBS Bina bullish on meeting sales target

Property developer, LBS Bina Group Bhd, is confident of achieving RM800 million sales target despite tough market

In a statement today, managing director, Datuk Lim Hock San, said 2012 was expected to be a challenging yet confident year for LBS.

He said My First Home Scheme and other government initiatives would contribute 20 per cent to the group's total revenue.

"Currently, LBS Bina has a land bank of some 920 hectares with an estimated gross development value (GDV) of RM9.1 billion, that will keep it busy for the next few years," he said.

Lim said LBS Bina would be launching 13 projects comprising 2,085 units with a GDV of RM1.5 billion together with some 19 ongoing projects with a GDV of RM562 million.

He expected landed property for both affordable homes and high-end homes would be the highlight next year amid scarcity of land in urban areas.

"At the same time, property prices would continue increasing but at a lower rate compared to this year, especially in a 'central' location," he said.

By Bernama

Tenders for KLIFD project now open

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has started a tender process on major foundation works for the Kuala Lumpur International Financial District (KLIFD), where a pre-qualification exercise is currently under way.

The tender invitation is scheduled for completion in mid-February, while the construction is expected to start in the first quarter of next year.

1MDB, is inviting contractors to participate in the construction and completion of earthwork and excavation works, retaining structure, piling works and related sub-structure works.

"This is probably among the largest earthworks, covering the size of about 20 football fields or 12ha, and excavating about 20m into the ground." 1MDB Real Estate Sdn Bhd deputy CEO of operations Datuk Azmar Talib said .

1MDB said the pre-qualification notice, advertised on December 8 2011 in the newspapers, will close on January 6 2012. It is also available at

By Business Times

Court: Ho Hup has no standing

PUTRAJAYA: The Court of Appeal has ruled that Ho Hup Construction Co Bhd has no locus standi to bring a legal action against its subsidiary Bukit Jalil Development Sdn Bhd, and Pioneer Haven Sdn Bhd, over a joint development agreement (JDA) on a 24.3ha land.

A three-member panel of the Court of Appeal comprising Justices Zainun Ali, Ramli Ali and Zaharah Ibrahim made the ruling unanimously, and as such, reversed the High Court decision which was in favour of Ho Hup Construction.

“On the issue of whether Ho Hup has locus standi in its own right to bring an action (against the appellants), our answer is in the negative.

“The directors that Ho Hup can restrain are the directors of Bukit Jalil Development only, not of Ho Hup itself, as the asset in question (the 24.3ha land) is the asset of Bukit Jalil Development,” Justice Zainun ruled yesterday.

The appellate court also ruled that the JDA between Bukit Jalil Development (a 70% subsidiary of Ho Hup Construction) and Pioneer Haven (a wholly-owned unit of Malton Bhd) did not amount to a disposal of the land.

“Unless and until the land is registered in the name of Pioneer Haven, the land remains the property of Bukit Jalil, which has indefeasible title over the land,” Justice Zainun ruled.

It was previously reported that Ho Hup had entered into the JDA (via Bukit Jalil Development) with Pioneer Haven on March 16 last year, with a plan to see the partners jointly develop the freehold land in Bukit Jalil into a mixed commercial and residential project.

Later that year, Ho Hup filed the suit against Bukit Jalil Development, Pioneer Haven and nine others over the matter.

In June this year, the Kuala Lumpur High Court had ruled that Ho Hup's previous board of directors had acted in breach of its duties to Ho Hup by committing Bukit Jalil Development to the JDA, and that Pioneer Haven had knowingly assisted in those breaches.

The High Court had found that the JDA was, in substance, a disposal of the land, and as such, required the approval of shareholders under Section 132C of the Companies Act, 1965.

As no such approval was obtained, the High Court ruled that the JDA was null and void, which would enable Ho Hup Construction to proceed with its financial regularisation plan, which had been delayed pending the outcome of the suit.

Pioneer Haven and seven others then appealed against the High Court decision.

Representing Pioneer Haven was counsel Datuk Seri Muhammad Shafee Md Abdullah, while lawyer Malik Imtiaz Sarwar stood for Ho Hup Construction.

Ho Hup told Bursa Malaysia yesterday that it would be filing an appeal to the Federal Court.

“Meanwhile, the Court of Appeal has given Jan 30, 2012, as the hearing date for an application to be filed by Ho Hup for an order for the preservation of the rights and interests of Ho Hup,” it said.

By The Star

Tuesday, December 20, 2011

Digital master plan for KLIFD

Azmar (inset) says the plan is aimed at turning KLIFD into a leading financial district with state-of-the-art connectivity, utilising technologies that are smart, intelligent and future proof.

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) is developing a Digital Master Plan for the Kuala Lumpur International Financial District (KLIFD).

In a statement, 1MDB Real Estate Sdn Bhd deputy chief executive officer Datuk Azmar Talib said the aim was for KLIFD to be a leading financial district with state-of-the-art connectivity, utilising technologies that were smart, intelligent and future proof.

Datuk Azmar Talib

The blueprint will be used to build solutions that embrace sustainability and connectivity through new Internet technologies and infrastructure services.

1MDB has gathered a global team of IT experts and digital planners led by Accenture Solutions Sdn Bhd to draw up the Digital Master Plan for KLIFD.

“With their proven experience, Accenture will be able to help us identify the scale of the infrastructure and how to put it best, focusing on strategic services that work towards current and future needs,” said Azmar.

“Today, nearly everything can be done electronically and remotely. But nothing can replace the human connectivity – the personal touch and personal interaction for ideas and businesses to thrive.”

In the same statement, Accenture Malaysia country managing director Goh Aik Meng said digital services would help differentiate KLIFD as a pioneering financial district and as a place to live and work.

“It is a pleasure to be teaming with 1MDB on this project, and it confirms our long-term commitment to Malaysia in supporting the national development objectives of the Economic Transformation Plan.”

KLIFD is currently at the master planning phase and is on track to start construction beginning of next year.

The 75-acre development in the Imbi area fronting Jalan Tun Razak aims to bring together leading financial institutions and top global companies to create a catalytic pool of world-class players. It will leverage on Malaysia’s existing strength in Islamic finance and play on its strategic location to complement other financial centres within the region.

1MDB recently appointed Akitek Jururancang (M) Sdn Bhd and its international partner Machado Silvetti and Associates as the master planners for KLIFD.

1MDB is wholly-owned by the Government and serves as a strategic enabler for new ideas and sources of growth to propel economic transformation.

By The Star