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Thursday, June 30, 2011

Mah Sing to continue land acquisitions, JVs

Property developer, Mah Sing Group Bhd, will continue to acquire prime land and enter into joint ventures in future, to further boost its expansion strategy.

Managing Director, Tan Sri Leong Hoy Kum said the group is keen on both privately held and government land, that could be developed, as it had the track record, experience, branding and financial capacity to unlock and enhance the value.

"This year should be another good year, particularly for developers, with a knack for creative product development and market strategies, among others.

"The mid to high-end residential segment in well established locations should continue to thrive together with the mass housing market, echoing the government's call to provide affordable housing," he told reporters after Mah Sing's Annual General Meeting here, today.

To date, the group has a total of 34 projects in Greater KL (Kuala Lumpur and Klang Valley), Penang and Johor Bharu, which yield a combined remaining gross development value (GDV) and unbilled sales of approximately RM14 billion to last for five to seven years.

Leong also expects the positive sentiment for the property market to continue, riding on the favorable employment conditions and stable economic growth.

"It is a good time to buy properties now, in view of the rising construction cost environment as buyers can lock in current property prices and enjoy borrowing rates, which are still very reasonable.

"Buyers should consider the developer’s track record, in terms of product delivery, quality, service and potential upside of the property," he said, adding, the group will maintain its focus on the local property market for its expansion plan.

For the first quarter ended March 31, 2011, Mah Sing reported a net profit and revenue of RM41.2 million and RM311.8 million respectively.

"We surpassed our shareholders' expectations last year and are working hard on achieving another good year in 2011 with more launches coming up in the second half," Leong said.

Macquarie Equities Research, the latest research firm to have initiated coverage of the group, has forecast Mah Sing' earnings to grow at a compound annual growth rate (CAGR) of 54 per cent over financial years 2011-2013.

In order to provide continuous value enhancement to shareholders, the group is aiming for a RM5 billion market capitalisation within five years, from its present RM2.2 billion.

By Bernama

Merge Housing to go private

PETALING JAYA: Property developer Merge Housing Bhd's chief and his two brothers are looking to take the company private, by offering to buy up all remaining shares not owned by them, or some 69.2 million shares, for RM45mil.

In a Bursa Malaysia announcement yesterday, Merge Housing's managing director Lee Kuang Chong and his two brothers, Lee Fatt Chong and Lee Heng Choong, proposed to undertake a conditional take-over offer to buy all the remaining shares of RM1 each in Merge Housing (net of treasury shares) not owned by them for 65 sen per share.

The brothers collectively hold 75.83 million shares in the company, or representing 52.37% of the issued and paid-up capital of Merge Housing (excluding 5.21 million treasury shares). Lee Kuang Chong holds a direct equity interest of 30.11%, Lee Fatt Chong has a 17.36% stake and Lee Heng Choong's holding is 4.9% in Merge Housing.

The offer price represented a premium of 5.5 sen or 9.24% above the closing price of Merge Housing shares on Tuesday of 59.5 sen, being the last trading day prior to the date of this notice.

The announcement said that the offer price was arrived at after taking into consideration a premium of 9.8 sen or 17.75% above the five-day volume weighted average market share price (VWAP) of Merge Housing shares up to and including June 28, of 55.2 sen and a premium of 10.4 sen or 19.05% above the one-month VWAP up to and including June 28 of 54.6 sen.

The consideration for the offer will be satisfied in cash and should the company declare or pay any dividend and/or other distributions on or after the date of the announcement but prior to the close of the offer, shareholders were entitled to retain the dividend and/or distributions.

However, the consideration for each offer share shall be reduced by the quantum of the net dividend and/or distribution per Merger Housing share.

No rationale was provided for the privatisation exercise.

Based on the company's annual report 2010, a net profit of RM1.13mil was posted against a revenue of RM92.6mil for the financial year ended May 31 2010. Meanwhile, it made a net loss of RM24.6mil against a revenue of RM83.6mil for the financial year ended May 31 2009.

According to the group's website, its major land bank is located in Subang 2, Mon't Kiara, Puchong/Old Klang Road as well as Bukit Jelutong. Although it initially catered to the mass low to medium cost market, the group has now shifted into landed properties and higher end properties.

By The Star

Keep politics off affordable housing schemes

It would appear that demand for super high-end homes is showing absolutely no sign of abating. YTL Land & Development issued a press release that its Grove at Lake Fields project in Sungai Besi, from a starting price of RM1.8mil, has been snapped up by eager buyers ahead of its launch.

Maybe its the name of the developer that led to a such a reception towards its project.

YTL has certainly created a reputation for itself in the property market with buyers appreciating the quality of the houses it builds.

But its that kind of mismatch that has created somewhat an imbalance in the supply of property especially in the major markets natiowide like Kuala Lumpur.

With economic activity chugging away and jobs still being created, more so when economic programmes by the Government start to see more investment and employment being created throughout the country, demand for housing in the hot markets will be on the rise.

Unfortunately, most of the homes being launched are beyond the reach of many Malaysians, especially those who are early in their careers, and the gap is set to widen as a larger percentage of Malaysians enter the age of employment year after year.

Given the penchant for developers to reap as much profit from their landbank, the vast majority of Malaysians will be priced out and just cannot afford to shell out that kind of money to buy a house, regardless of how big or how good the developer is, and at the same time keep up with the escalating cost of living.

It therefore comes to no one's surprise that the Government is now looking to step in and fulfil that demand gap by coming up with two affordable housing schemes ranging between RM100,000 and RM300,000 for Malaysians who do not yet own a home.

Both those schemes which will cater for households earning under RM3,000 a month and RM6,000 a month, which together would form the bulk of Malaysians today.

It was revealed that a portion of the redevelopment of the old Sungai Besi airport development which is called Bandar Malaysia would be carved out to build affordable homes for Malaysians.

Similar projects are being hatched in other areas where the Government owns land and eventually, such schemes would require the support of all parties including state governments as more projects are built throughout the country.

But the building of affordable home should not be subject to partisan politics. The last thing people would want is politicians trying to gain mileage at the expense of people's welfare.

It is also worth watching the impact of new public affordable housing on the price of comparably priced houses currently in the secondary market, which is there but not in the choice locations.

Deputy news editor Jagdev Singh Sidhu misses eating tasty food that is bad for your body.

By The Star (by Jagdev Singh Sidhu)

Wednesday, June 29, 2011

UEM Land to leverage on Sunrise expertise and S’pore infrastructure

Good linkage: The future development’s proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible. — AFP

PETALING JAYA: The coming together of Khazanah Nasional Bhd and Temasek Holdings to develop RM30bil worth of real estate projects in Singapore and Iskandar Malaysia will help UEM Land Holdings Bhd make a great leap forward, both financially and in terms of branding, say analysts.

The tie-up also puts into focus why UEM Land launched an RM1.4bil takeover of property developer Sunrise Bhd, which was completed early this year.

“We believe UEM Land will be able to leverage on Sunrise's expertise in lifestyle integrated developments to take on the proposed developments. As such, Sunrise will be taking the lead on behalf of UEM Land in undertaking these development projects,” said an OSK Research report.

UEM is among the top landowners in Iskandar Malaysia, with 1,300 acres of development land in the southern economic corridor. Among the several economic corridors spearheaded by the Government, Iskandar Malaysia remains the most upbeat and vibrant. In many ways, according to analysts, the alliance of the two government investment holding companies is expected to be a win-win proposition for both sides.

As a result of the Khazanah-Temasek joint venture (JV), UEM Land, together with Mapletree Investments Pte Ltd, have been appointed to oversee the marketing and development of four parcels of land at Marina South in Singapore.

UEM Land is the property arm of Khazanah, while Mapletree Investments is one of Temasek's two real estate portfolio companies. The other Temasek property company is CapitaLand group.

The planned mixed-use development on the 2.62ha white site at Marina South would comprise two office towers with ancillary retail and two blocks of residential towers with a combined gross floor area (GFA) of 341,000 sq m, a statement from the Mapletree website said.

Located on adjoining sites behind the Marina Bay Financial Centre in the new financial and business cluster of Downtown Marina Bay, the development will be positioned between the proposed linear park and a major public open space above the Marina Bay MRT station. Its proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible.

Construction works are expected to commence in June 2012 with completion estimated in mid-2016.

At the same time, UEM Land will work with CapitaLand to oversee the Ophir-Rochor project in Singapore, located between the Kampong Glam Historic District and the Beach Road Conservation Area, in a new growth area envisioned to become a 24/7 mixed-use cluster. Like the Marina South parcels, the Ophir-Rochor parcels also have excellent connectivity.

By virtue of having Khazanah as an ultimate controlling shareholder, UEM Land (as with both Mapletree and CapitaLand in relation to Temasek) will be playing a huge role in this JV.

Sunrise, with its expertise and tangible portfolio of high-rise and high-end condominium in Mont'Kiara, will also have a huge role to play.

Hong Leong Research said: “UEM Land's business model is primarily a two-pronged strategy of developing townships and niche projects townships for stable income, complemented by niche projects to achieve enchanced growth and market branding. The bulk of its land is in Johor.”

With Khazanah's JV, UEM Land's opportunities have now broadened to include Singapore, where real estate is hot.

A UEM source said the success of Iskandar Malaysia is due to its proximity with the city state and its tremendous infrastructure, both economically and physically. Besides being a service and financial hub, it has an integrated transport system and other infrastructures like no other in South-East Asia.

“We are leveraging on Singapore's tremendous connectivity. When we sell Iskandar, potential investors always ask how many flights do we have in Iskandar Malaysia out to London? We ask them in return how many flights do you want?

“The issue is not how many flights our domestic airport in Johor has, but how many flights does Changi Airport have? That is how close geographically we are to Singapore. Multiply that with the whole range of services that Singapore offers and you have the big picture. When we sell Iskandar, we are not just selling Johor; we are selling Johor and Singapore,” said the source.

By The Star

'Sunrise buy a boost for Nusajaya township'

UEM Land Holdings Bhd's acquisition of Sunrise Bhd will further enhance the success of its flagship Nusajaya township, HwangDBS Vickers Research says.

In its Company Focus today, the research house said the recent acquisition would allow UEM Land to leverage on Sunrise's strong brandname and track record in high-end high-density residential and commercial developments.

"Sunrise will provide UEM Land with near-term earnings from more mature Klang Valley area to complement greenfield Nusajaya's long-term growth potential, and diversify its earnings base," it said.

It said UEM Land was currently trading at a 25 per cent discount to its realisable net asset value (RNAV) compared with big-capitalised developers' average of 18 per cent.

This discount should narrow down with improved earnings visibility and lower execution risk following the Sunrise acquisition and the company's possible inclusion in the KLCI FBM-30, it said.

"We applied a conservative 10 per cent discount to RNAV to derive a RM3.45 target price for UEM Land compared with five per cent premium to RNAV for sector leader SP Setia Bhd," HwangDBS said.

By Bernama

E&O in joint venture to develop wellness township in Johor

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is partnering the state investment arms of Malaysia and Singapore to develop an 84ha mixed development dubbed as a wellness township in Nusajaya, Johor.

E&O'sunit Galaxy Prestige Sdn Bhd has set up an equal joint venture company, known as Nuri Merdu Sdn Bhd, with Pulau Indah Ventures Sdn Bhd.

Pulau Indah is a 50:50 venture between Khazanah Nasional Bhd and Temasek Holdings.

Nuri Merdu will build, amongst others, terrace and semi-detached houses, bungalows, serviced apartments and condominiums, wellness centre(s), and retail and commercial properties, E&O said in a statement yesterday.

The project is E&O's first project in Johor. The land is located 15 minutes from the Tuas Second Link to Singapore.

It is also located in Medini, one of five flagship zones in Iskandar Malaysia. Medini would have office buildings, malls, hotels and residential units.

However, the project is subject to a revised master development plan. "The proposal is in line with E&O Group's continuous effort in sourcing new landbank and property development opportunities to boost and sustain its earnings growth," it said.

By Business Times

E&O and Pulau Indah in JV to build Nusajaya township

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has entered into a shareholders' agreement with Pulau Indah Ventures Sdn Bhd to develop a wellness township Nusajaya.

Nusajaya is a flagship zone of Iskandar Malaysia.

E&O (via wholly-owned subsidiary Galaxy Prestige Sdn Bhd) and Pulau Indah have agreed to establish a 50:50 joint venture (JV) company named Nuri Merdu Sdn Bhd.

Pulau Indah is a 50:50 JV between Khazanah Nasional Bhd and Temasek Holdings.

This will be E&O's maiden foray into Johor.

The 210-acre freehold land for the proposed development is 15 minutes away from the Tuas Second Link to Singapore, and is owned by Iskandar Investment Bhd, a 60% subsidiary of Khazanah.

By The Star

E&O jumps on township project in Johor

Eastern & Oriental Bhd, a Malaysian property group, rose the most in two weeks after forming a joint venture with Khazanah Nasional Bhd and Temasek Holdings Pte LTd to develop a “wellness” township project in the southern Johor state.

The stock climbed 3.9 per cent to RM1.62 at 9:07 a.m. local time in Kuala Lumpur trading, set for its biggest gain since June 15.

By Bloomberg

The new wave tipping point for Iskandar?

KUALA LUMPUR: It was the most obvious missing piece in the jigsaw puzzle for Iskandar Malaysia.

For about five years, the country's biggest special economic zone was waiting for its closest neighbour to come as an investor. This was only logical since Iskandar is right next door to the island-republic and it was also touted as a cheaper alternative for Singapore companies.

But only Raffles Education Corp Ltd produced Singapore's biggest investment, with plans to build the RM200 million Raffles University Iskandar.

This is set to change. Analysts think the tipping point is the tie-up between Khazanah Nasional Bhd and Temasek Holdings Pte Ltd.

They plan to build RM3 billion worth of properties in Iskandar through their partnership called Pulau Indah Ventures Sdn Bhd.

The project shows the confidence from Singapore, which would lead to more investments from the country and other global investors, said HwangDBS Vickers Research analyst Yee Mei Hui.

"Temasek is very selective with investments. Their interest in Iskandar Malaysia indicates their confidence in the development so we can expect a new wave of investments, boosting land and property prices in the region," she told Business Times.

The two sovereign wealth funds on Monday said they will jointly develop houses, retail space and wellness-related offerings in Iskandar Malaysia.

They will also build hotels, apartments, offices and shops worth RM27 billion in downtown Singapore.

"Iskandar Malaysia may attract major property developers such as CapitaLand and Wing Tai Holdings Ltd," said an analyst with OSK Research.

Three times the size of Singapore, Iskandar Malaysia spans 2,217 sq km and is a mixed-use development planned for completion in 2025.

Launched in 2006, the expected investment of US$110 billion (RM375 billion) is split between an initial start-up of US$13 billion from 2006-2010 and US$97 billion (RM331 billion) from 2011-2025.

Although neighbouring Singapore, the bulk of investments into the region has come from Europe, the Middle East and Japan with focus on manufacturing, property and tourism projects.

The biggest investments are from Acerinox SA of Spain and Japan's Nisshin Steel, which have committed RM5 billion in investments to build a stainless steel plant.

From the Middle East, Mubadala, Millenium, Kuwait Finance House and Aldar have committed US$1.2 billion (RM4.27 billion) to develop properties in Medini in Nusajaya.

Ongoing projects in Medini include the development of Legoland Malaysia by Merlin Entertainment for US$200 million (RM726 million).

The UK's Newcastle University of Medicine is setting up a branch campus for US$100 million (RM363 million) in EduCity.

So far, the Khazanah-Temasek tie-up has produced one quick win.

Yesterday, Eastern & Oriental Bhd announced plans to partner Pulau Indah and develop a wellness township over a 84ha site.

By Business Times

GSB, Projects Start to build commercial lot

GSB Group Bhd today announced that its wholly-owned subsidiary, GSB Summit Development Sdn Bhd had entered into a joint venture agreement with Projects Start Sdn Bhd to develop commercial properties on freehold land in the Kelana Jaya township.

The joint venture project is expected to be completed within four years," the company said in a filing to Bursa Malaysia today.

The proposed joint venture is in line with one of GSB’s principal activities in the business of property development and will enable the company to develop a prime parcel of land in Kelana Jaya.

By Bernama

40 Talam housing projects categorised 'sick'

The National Housing Department has categorised 40 housing projects under Talam Corp Bhd and the Ukay Bistari project by Intelbest Corp Sdn Bhd as "sick projects".

In a statement today, the Housing and Local Government Ministry said the projects had been identified having problems since 2006.

To date, some projects under Talam and Intelbest Corp still failed to be completed although the date for completion in the sale and purchase agreement had passed, it said.

It said that based on reports and investigations carried out, the delay to complete the projects were due to management and financial problems faced by the developers.

"The ministry, through the National Housing Department, will constantly monitor licensed development projects in line with the Housing Development (Control and Licensing) Act 1966," it said.

By Bernama

TSR arm buys land in PD

TSR Capital Bhd’s unit TSR Ocean Park Sdn Bhd has entered into three sale and purchase agreements with Best Reap Sdn Bhd to buy 19.2 ha of land in Port Dickson, Negri Sembilan for RM36.8 million and develop a mixed development project.

In a filing to Bursa Malaysia yesterday, TSR said the proposed acquisition is in line with its expansion plans in Negri Sembilan and to increase its land bank to generate long-term sustainable income.

By Business Times

Tuesday, June 28, 2011

RM30b Khazanah-Temasek incentive

Kuala Lumpur: Malaysia and Singapore's sovereign wealth funds have teamed up to undertake RM30 billion worth of development projects in Iskandar Malaysia and the island state.

Khazanah Nasional Bhd and its Singapore counterpart, Temasek Holdings (Pte) Ltd, have set up two joint venture companies to undertake the projects.

This is the first joint development investment between the two funds.

Khazanah will own a 60 per cent stake in M+S Pte Ltd that will develop land parcels in Marina South and Ophir-Rochor in Singapore.

The developments there will boast a gross development value (GDV) of RM27 billion with a permitted gross floor area of up to 501,020 square metres (sqm).

The Singapore projects include the development of offices, residential units, hotel as well as retail units.

Another joint venture, Pulau Indah Ventures Sdn Bhd - which is equally owned by Khazanah and Temasek - will develop projects in Iskandar Malaysia, Johor. They will have a GDV of RM3 billion and a permitted gross floor area of up to 1.37 million sqm.

"The development in Iskandar with Temasek will be highly complementary and builds on the momentum of existing and planned projects in Iskandar Malaysia, in which Khazanah has been involved since 2006," Khazanah managing director Tan Sri Azman Mokhtar said in a statement yesterday.

"Both these projects mark our first joint development investment with Temasek, and we look forward to a strong and fruitful partnership in both Singapore and Iskandar Malaysia," Azman added.

Temasek chief executive officer and executive director Ho Ching said: "Both the Khazanah and Temasek teams put in tremendous effort, working very closely together to develop the best ideas possible for our joint projects.

"We were also very fortunate to have the expert and highly professional support of leading real estate companies like UEM Land from Malaysia as well as Mapletree and CapitaLand from Singapore," she added.

UEM Land Holdings Bhd, Khazanah's property arm, will work with Mapletree Investment Pte Ltd, a Temasek portfolio company, to oversee the marketing and development of the project at Marina South.

At the same time, UEM Land will work with Capita-Land Ltd to oversee the Ophir-Rochor project.

So far, two sites in Iskandar Malaysia - one in Medini North and the other at the Heritage Cluster in Medini Central - have been confirmed.

Pulau Indah plans to develop serviced apartments, a corporate training centre, as well as commercial, retail, residential and wellness-related offerings on the sites.

By Business Times

Khazanah and Temasek to develop RM30bil projects in Singapore, Iskandar Malaysia

PETALING JAYA: Khazanah Nasional Bhd has teamed up with Singapore's Temasek Holdings Pte Ltd to develop RM30bil worth of real-estate projects in Singapore and Iskandar Malaysia.

In a statement issued yesterday, both state-owned investment holding companies said they would form two new joint-venture companies M+S Pte Ltd and Pulau Indah Ventures Sdn Bhd for joint-development projects in Singapore and Iskandar Malaysia, respectively.

“We are honoured to be undertaking these exciting developments at these key sites in Singapore and Iskandar Malaysia with our counterparts from Singapore, Temasek Holdings,” Khazanah managing director Tan Sri Azman Mokhtar said in the statement.

“The development in Iskandar with Temasek will be highly complementary and builds on the momentum of existing and planned projects in Iskandar Malaysia, in which Khazanah has been involved since 2006. Both these projects mark our first joint-development investment with Temasek, and we look forward to a strong and fruitful partnership in both Singapore and Iskandar Malaysia.”

Temasek's executive director and CEO Ho Ching in echoing the same sentiment said: “Both the Khazanah and Temasek teams put in tremendous effort, working very closely together to develop the best ideas possible for our joint projects. We were also very fortunate to have the expert and highly professional support of leading real estate companies like UEM Land (Holdings Bhd) from Malaysia as well as Mapletree (Investments Pte Ltd) and CapitaLand from Singapore.

“I am also especially grateful for the guidance, advice and support of very experienced industry leaders who will guide the Singapore developments as key board members of M+S. I look forward to the successful development of the projects both in Johor as well as Singapore.”

M+S, which would be 60:40 owned by Khazanah and Temasek respectively, would develop four land parcels in Marina South and two land parcels in Ophir Rochor. The gross development value of the projects, which would comprise office, residential, hotel and retail components on a permitted gross floor area of up to 501,020 sq m, was estimated to worth around S$11bil (RM27bil).

UEM Land, a real estate company within Khazanah's portfolio, and Mapletree, a Temasek portfolio company, would oversee the marketing and development of the project at Marina South.

The marketing and development of the Ophir Rochor site would be overseen by UEM Land and CapitaLand Ltd, another Temasek portfolio company.

As for the development in Iskandar Malaysia, two new sites one in Medini North and the other at the Heritage Cluster in Medini Central had already been identified for joint commercial development by Pulau Indah, an 50:50 joint venture between Khazanah and Temasek.

Pulau Indah intends to develop serviced apartments, a corporate training centre, and commercial, retail, residential and wellness-related offerings on these sites. Khazanah and Temasek were still in discussions and negotiations with potential partners and operators for the various components to maximise the commercial potential of the location.

Nevertheless, planning and design works for the Iskandar Malaysia projects, estimated at about RM3bil on a permitted gross floor area of up to 1,365,675 sq m, had already commenced since the first quarter.

With the signing of these agreements yesterday, the projects would move towards design and further implementation and delivery of the initial phases over the next five years, the companies said.

By The Star

E&O in maiden foray into Johor

Eastern & Oriental Bhd (E&O) has entered into a shareholders' agreement with Pulau Indah Ventures Sdn Bhd to the development of a township in Iskandar Malaysia.

"We are excited about our maiden foray into Johor.

"With E&O's experience in delivering premier lifestyle properties and the backing of a solid strategic partnership, we are confident of translating the envisioned iconic wellness township concept into a reality for Iskandar Malaysia," said E&O Deputy Managing Director Eric Chan Kok Leong in a statement today.

He said the group would leverage on its expertise from three core businesses to fuel future growth, namely property development, hospitality and lifestyle, and property investment

The 210-acre land for the proposed development is 15 minutes drive from the Tuas Second Link to Singapore, and is in the Heritage Cluster in Medini Central of the Nusajaya flagship zone.

The agreement entered into through E&O's indirect wholly-owned subsidiary, Galaxy Prestige Sdn Bhd, with Pulau Indah will establish a 50/50 joint venture company named Nuri Merdu Sdn Bhd.

By Bernama

KPS' property arm set to be profitable despite loss in first quarter

SHAH ALAM: Kumpulan Perangsang Selangor Bhd (KPS) expects its property division, Kumpulan Hartanah Selangor Bhd, to be profitable again in the current financial year ending Dec 31, 2011 (FY11), boosted by some new and ongoing property launches.

Chairman Raja Idris Raja Kamarudin said the projects were that of a proposed plan to build a resort in Pulau Indah, Klang, a soon-to-be-launched mix-development project in Section 14, Petaling Jaya and a commercial project in Bandar Baru Salak Tinggi, Sepang.

“Our strategies now are to unlock and increase the value of the group's assets and minimise our liabilities. Saying this, we are hoping that our property arm will have a turnaround in FY11,” he told reporters yesterday after the group AGM.

Kumpulan Hartanah Selangor posted a net loss of RM48.05mil in the first quarter ended March 31, 2011 on the back of RM46.7mil revenue against a net profit of RM1.46mil and revenue of RM46.34mil a year ago.

It said the loss was mainly due to higher allowances for impairment on assets in that period.

Raja Idris said KPS would get its shareholders' approval during the next EGM (as an EGM was cancelled yesterday) for the proposed 18-month extension (from June 30, 2011 to Dec 30, 2012) on the expiry date of the put option granted by Kumpulan Darul Ehsan Bhd (KDEB) for KPS' acquisition of a 15% stake in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) from KDEB. Earlier reports said KPS had already decided to exercise its put option pursuant to the acquisition.

KPS said it had considered various reasons to exercise the option. One reason was that its investment in Syabas had not provided any return as there had been no dividend declared since the completion of the acquisition.

KPS had on Sept 24, 2008, entered into a conditional share sale agreement with KDEB to acquire a 15% stake in Syabas for RM200mil cash.

The acquisition was completed on Dec 30, 2008.

By The Star

Mulpha sees stronger revenue with land sale

SUBANG JAYA: Property developer Mulpha Inter-national Bhd (MIB) is in the midst of selling land in Selangor and Malacca to boost revenue this year.

"I think since we are disposing the assets, we should be stronger in terms of re-venue in 2011," MIB chief executive officer Chung Tze Hien said.

The deal to sell a 2ha plot in Section 16, Petaling Jaya, may be concluded as early as the third quarter of 2011 and that for a 23.7ha site in Malacca may be completed by the end of 2012.

The land in Section 16 has a net book value of RM62.7 million while the one in Malacca is worth about RM23 million.

Chung said MIB will continue to focus on developing its existing projects in Malaysia such as the Lei-sure Farm and Enclave Bangsar.

"We are building 290 over units of semi-D and bungalows in Leisure Farm. We have another project, Enclave Bangsar, which should be ready by mid-year for a soft launch," Chung said.

MIB achieved RM794.5 million revenue for the financial year ended December 31 2010, an improvement from RM671.9 million in the preceding year. It staged a turnaround with a profit of RM112.9 million from a loss of RM9.7 million in 2009.

By Business Times

UEM Land raised to 'trading buy'

UEM Land Holdings Bhd rose to an 11-week high in Kuala Lumpur stock trading after Khazanah Nasional Bhd. and Temasek Holdings Pte appointed the Malaysian developer to help oversee S$11 billion (US$8.9 billion) of Singapore property projects.

The stock rose 2.1 per cent to RM2.88 at 11:06 a.m. local time, set for its highest close since April 8. RHB Research Institute Sdn Bhd upgraded UEM Land to “trading buy” from “market perform” with a RM3.35 share estimate, analyst Loong Kok Wen wrote in a report today.

Khazanah and Temasek, Malaysia and Singapore’s sovereign investment companies, will jointly develop hotels, apartments, offices and shops in the city-state, according to a joint statement yesterday. UEM Land, a Kuala Lumpur-based company controlled by Khazanah, will construct parts of the projects along with Temasek units CapitaLand Ltd and Mapletree Investments Pte, they said.

UEM Land is a “blue-chip proxy for improved Malaysia- Singapore relations,” Amir Hamzah, a Kuala Lumpur-based analyst at Credit Suisse Group AG, wrote in a report today. “This is one of the catalysts the market was waiting for.” He has an “outperform” rating on UEM Land with a share estimate of RM3.80.

The property ventures come after Malaysia agreed to move its railway station in Singapore’s central business district to a site close to a bridge connecting the two countries, ending a decades-old dispute over land usage. The two nations, united between 1963 and 1965, had argued over issues including a new bridge linking the two nations and the price Singapore pays for water from Malaysia.

By Bloomberg

YTL’s Grove sold out ahead of July launch

YTL Land & Development Bhd said phase three of its Lake Fields project in Sungai Besi, known as Grove, exceeded expectations when it sold out all the units ahead of its July launch.

Grove comprises 102 units of three-storey semi-detached homes, which sold at an average RM2 million each, it said in a statement.

By Business Times

Europlus to dispose of Talam debt

PETALING JAYA: Kumpulan Europlus Bhd has entered into a sale and purchase agreement with Megabig Properties Sdn Bhd to dispose of 10-year Al-Bai Bithaman Ajil Islamic Debt Securities (BAIDS) issued by Talam Corp Bhd with nominal value of RM52,666,340 for RM17,600,000.

As part of its regularisation plan, Talam had issued 10-year BAIDS of RM134,213,337 nominal value of RM1 each, of which an aggregate of RM52,666,340 of the primary BAIDS were issued to Abrar Discounts Bhd in settlement of liability, Europlus told Bursa Malaysia.

By The Star

Monday, June 27, 2011

Phase 3 of Lake Fields to be launched soon

KUALA LUMPUR: YTL Land & Development Bhd is launching phase three of its Lake Fields project in Sungei Besi soon and expects take-up to be overwhelming.

Called Grove, it comprises 102 units of three-storey semi-detached homes worth about RM220 million, or about RM2 million each.

YTL Land executive director Datuk Yeoh Seok Kian said it has received about 1,500 registrations for Grove, mostly repeat buyers and upgraders from matured neighbourhoods such as Desa Petaling, Taman Desa, Kuchai Lama and OUG.

"We expect Grove to replicate the success of our phase one and phase two launches at Lake Fields," he said.

The first phase, known as Meadows & Glades, launched in 2005, was snapped up overnight. All 514 units of the three-storey homes sold at more than RM380,000 per unit.

The second phase known as Dale sold out in four days. It comprises three-storey semi-detached homes and the prices range from RM638,800 to RM1.33 million.

Yeoh said Dale has not only set a new price standard for Sungei Besi homes but also demonstrated the area's potential as Kuala Lumpur's next property hot spot.

"People still want to live in Kuala Lumpur but there is scarcity of land and pressure on land price, making homes more expensive," Yeoh told Business Times in an interview.

"Sungei Besi holds much potential as the next "new thriving address" in Kuala Lumpur due to its strategic location. It is well connected and is easily accessible via numerous highways and railways, which are reasons why the project has become a success," he said.

Lake Fields, a joint-venture by YTL Land via Syarikat Pembinaan Yeoh Tiong Lay and the Employees Provident Fund, launched in 2005, spans across 74ha. Its centrepiece is a 6ha lake.

Grove features large built-up homes of more than 4,354 sq ft with breezy interiors, floor-to-ceiling windows and stunning view of the lake. Each residence comes with a private pool and a rooftop garden in selected units.

Yeoh said the redevelopment of the Sg Besi Royal Malaysian Air Force (RMAF) air base is another positive factor.

The government is redeveloping the 162ha into an integrated commercial hub and it is expected to be the catalyst for the growth of the southern part of the Klang Valley and would further raise the profile of Sungei Besi significantly.

By Business Times

SPNB sets RM2.8b target by 2016

KUALA LUMPUR: Syarikat Perumahan Negara Bhd (SPNB), a wholly owned unit of the Minister of Finance Inc (MoF Inc), aims to achieve a total development value of RM2.8bil by 2016, if all the affordable housing units it plans to build are completed on schedule.

Kamarul: SPNB will complete 36,095 affordable houses by 2013.

Managing director Datuk Kamarul Rashdan Salleh said SPNB would be able to complete 36,095 affordable houses by 2013, of which 16,423 units have been sold.

He said the number of units to be completed over the next three years would still fall short of the target set under the Ninth Malaysia Plan (2005 to 2010) of completing 70,000 units.

Since venturing into building affordable housing in 2003, SPNB has of May 3 1, only completed 26 projects totalling 14,740 units for a development value of RM196mil.

The projects are located in Kedah, Perak, Pahang, Selangor, Malacca, Negri Sembilan, Johor, Sabah and Sarawak.

Another 21,355 units involving 28 projects are under various stages of construction. Of this, 17 projects comprising 14,575 units will be built in Sabah.

Most of the houses are priced below RM220,000.

Kamarul said funding had always been the main issue when it comes to building affordable housing.

“If there is more government allocation, we will be able to build more houses,” he said, adding that RM200mil had been set aside for SPNB this year.

Kamarul said SPNB would be building 2,500 houses for the poor this year. Most of these units will be constructed in Kelantan, Terengganu and Pahang. Over 30,000 people in various states have applied for the SPNB homes.

Kamarul, who joined SPNB in 2009, said there was also the issue of getting the right parcels of land for development.

So far, all the land for its affordable housing projects were provided by landowners who are SPNB's joint venture partners in the schemes.

“If we opt to build the projects in more centrally located areas, we may need to acquire the land which could pose a funding issue to SPNB,” Kamarul explained.

Given the fund constraint, he said SPNB would need to establish joint ventures with landowners or contractors to undertake the projects.

In the last three to four years, SPNB has awarded contracts worth more than RM1.5bil to contractors to build low- to medium-cost houses, in anticipation of demand for its properties.

The joint venture with the contractors hit a snag when some projects were not completed on schedule and the works were shoddy.

Since 2000, 140 contractors had been blacklisted by SPNB for failing to deliver on their housing projects.

To address the problem, he said SPNB had, from this year, stipulated that contractors would be appointed based on merit to ensure that they deliver on their contract terms.

Kamarul said SPNB's role as the provider of affordable housing would also move up the value chain as it would also focus on housing products that are priced up to RM300,000.

“These higher priced units will complement the efforts of the developers and the various state development agencies in building more such homes in view of the rising demand," he said.

By The Star

Foreign property loans up

PETALING JAYA: Banks, especially those with regional operations, are fighting for a larger share in the financing of foreign properties fuelled by the strength of the local currency and weaker property markets overseas.

The stronger ringgit, according to industry observers, has led investors to scout for cheaper properties in Britain, Australia, Singapore and in the United States to diversify their investment portfolio.

Judging from the rising number of advertisements for the sale of foreign properties in local dailies, industry observers foresee a good prospect for banks' foreign property portfolio and improvement in margins.

RAM Holdings group chief economist Dr Yeah Kim Leng said: “We do see growing interest among selected Malaysian banks to extend loans for foreign property purchases in line with overseas investment opportunities presented to local investors, especially in countries where the property markets have hit the bottom or poised for an upturn.

“Overseas lending opportunities are likely to be selective depending on demand by Malaysian firms and high net worth individuals as well as the strategies, risk appetite and credit assessment capabilities of individual banks.

“We anticipate only selective banks notably, the large ones with regional presence making forays into this area given their size, market and networking advantage.”

As banks apply risk-based pricing, Yeah said they may be able to enhance margins to commensurate with a higher risk level when assessing for overseas properties.

Nor Zahidi Alias

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias said the appreciation of the ringgit dramatically against the greenback and other currencies such as the sterling pound over the past one year has induced investors to diversify their investments to include purchasing properties overseas.

Although it has somewhat retraced from its highest level of RM2.95 against the US dollar, he said the prospect of the ringgit was still favourable judging by the US Federal Reserves' pledge to maintain its accommodative monetary stance at its last meeting and the positive growth momentum of the Malaysian economy.

As such, Zahidi added investing in properties overseas would likely enhance investors' returns through foreign exchange gains. Another critical factor that had spurred investors to invest in other countries was the significant decline in property prices, he noted.

In the US, for instance, home prices in 20 major cities have fallen 30% from their peak.

According to Case-Shiller/S&P, the producer of the gauge, real housing prices in the US had plunged to levels not seen since the 1890s (when adjusted for inflation) in 11 of the 20 markets surveyed.

The fact that the index has been in negative territory in the past five months since November last year signalled that investors have the opportunity to purchase properties at low prices, he said.

Similarly in Britain, he said although home prices were just 13% off their peak in 2007, they were more affordable compared with three years ago, adding that this was a great opportunity for long-term investments.

Zahidi said stiff competition would also keep driving banks to look for creative ways to improve their bottom lines, as long as they did not breach Bank Negara's guidelines and regulations.

As such, he added it was not surprising that Malaysian banks are seeking alternative avenues to increase their loan gr owth.

The Government at the same time does not discourage its residents from investing abroad as this could help to stabilise the liquidity condition in the financial system given there was no let up in the capital inflows.

This is seen from the rise in the Malaysia's international reserve assets which currently stood at RM402.6bil as of June 15, closer to its previous high of RM410.9bil achieved in June 2008.

In response to a query, Malayan Banking Bhd (Maybank) via the Association of Banks in Malaysia (ABM) in a statement said it currently only offered financing for properties in certain areas of London but has plans to look at Australia.

An international bank operating in Malaysia said it offerred financing for properties in Singapore, Hong Kong, China, Australia and Britain.

For banks that provide financing for overseas properties, the lending could be in local and foreign currency. Whereas, financing in pound is extended to Malaysians for buy-to-let purposes only and entails monthly repayments in that currency, Maybank said.

OCBC Bank (M ) Bhd is now offering a mortgage loan facility to finance the purchase of residential properties in prime sections of central London.

OCBC Bank head of consumer financial services Charles Sik said the introduction of the OCBC Overseas Property Financing facility was timely as customers would be able to take advantage of the ringgit-based loan, hence mitigating the effects of fluctuating foreign exchange risks.

Thoo Mee Ling

Meanwhile, the bank's head of secured lending Thoo Mee Ling said the interest rate offered was comparable to the domestic home loans even though the collateral was in foreign market.

She said OCBC Bank was currently looking at a few more viable markets for foreign property financing.

By The Star

YTL Land breathes new life into 'old' townships

KUALA LUMPUR: YTL Land & Development Bhd will continue to rejuvenate old thriving townships and create modern integrated developments to lure local and foreign investors.

The company has a strong track record in urban rejuvenation, having undertaken projects in areas where other developers had avoided in the past, such as Pantai Dalam, Puchong, Sungai Besi and Sentul in the Klang Valley.

YTL Land, which has a market capitalisation of about RM1.4 billion and known for conceptualising Bukit Bintang, has spent a few billion ringgit to transform these areas into sought-after locations today.

It started with Pantai Hillpark, a "kampung" area about a decade ago, building condominiums with Spanish design and using metal instead of wood for some of the roof trusses.

YTL Land later unveiled its masterplan to redevelop Sentul Raya, a multi-billion ringgit project, which stalled during the 1997/98 Asian financial crisis.

As the 117 hectare site is divided by the Sentul KTM Komuter station and tracks, the concept of the masterplan characterises the two halves differently, thereby forming Sentul West and Sentul East.

Sentul East (43ha) showcases the Malaysian flavours and Sentul West (74ha) has exclusive residences, lakes and a private park.

The project, started in 2002, is the first private gated park in Kuala Lumpur and it would generate an estimated RM8 billion in sales, once completed.

YTL Land then embarked on another project in Puchong called the Lake Edge, making use of the existing natural attributes of the location, which includes the disused mining lake.

Following this, it launched Lake Fields in Sungei Besi, its fourth project in the Klang Valley.

YTL Land has used the surroundings of the ex-mining lake to create a successful residential enclave comprising bungalows, semi-detached homes and luxury terraced houses.

"Today, all these projects are thriving communities. New launches are fast selling. When we launched The Capers at Sentul East, it sold like hot cakes in two hours," YTL Land executive director Datuk Yeoh Seok Kian claimed.

Yeoh told Business Times that YTL Land is looking for more land to buy or develop jointly with private owners in the same areas.

The company is also eyeing urban renewal projects.

YTL Land currently has a land bank (with no holding costs) of over 800ha with a sales value of about RM12 billion.

Parent company, YTL Corp Bhd, is injecting prime land in Kuala Lumpur (KLCC-Bukit Bintang, KL Sentral) and Singapore (Sentosa Cove, Westwood Apartments in Orchard Road) into YTL Land for RM476 million (to be satisfied by cash and irredeemable convertible unsecured loan stocks).

Upon completion, YTL will transform into a regional player with track record in high-end residential and a bigger balance sheet.

By Business Times

Tabung Haji eyes more property investments

Lembaga Tabung Haji, a pilgrimage fund that manages some RM28 billion, wants properties to account for a quarter of its investments, from 15 per cent now.

Kuala Lumpur: Lembaga Tabung Haji, a pilgrimage fund that manages some RM28 billion, plans to invest more in property to grow its recurring income base.

It wants properties to account for a quarter of its investments, from 15 per cent now. Its properties are mainly in Malaysia and Saudi Arabia.

Group managing director and chief executive officer Datuk Ismee Ismail said Tabung Haji already has properties in Mecca and Madina and is eyeing more in Jeddah, which are all in Saudi Arabia.

"In Jeddah, the projects can be owned by us or via joint ventures unlike in Mecca and Madina where we are not allowed to own property but allowed to lease," Ismee told Business Times recently on the sidelines of the GLC (government-linked companies) Open Day media briefing.

Tabung Haji is reallocating its funds in line with current market conditions.

"We always review our asset allocation because the market is always changing. The share market, for example, can be very vibrant but when it is cool we invest in other instruments," he said.

It wants to invest more in Mecca and Madinah as well as in Europe over the next one to two years.

Tabung Haji currently earns a recurring income from its 25-year lease of the Hajar Towers Hotel in Mecca and the 10-year lease of the Moven Pick Hotel in Madinah, both in Saudi Arabia.

Ismee said the group has been seriously looking at investment opportunities in Saudi Arabia since 2008.

Apart from haj management of 26,000 Malaysian pilgrims every year, Tabung Haji also manages some RM28 billion of savings from some 5.8 million Muslim depositors in the country.

Besides investing in the the stock market and properties, the pilgrims fund also has operations in plantations, travel, construction and owns stakes in KFC Holdings (Malaysia) Bhd, shoemaker Bata, consumer goods giant Unilever, breadmaker Silver Birds Group Bhd and other listed and non-listed companies.

By Business Times

Talam in uphill battle

TALAM Corp Bhd, once the country's largest builder of low- and medium- cost houses, has unfortunately been making headlines for the wrong reasons.

Recently, the company reported a net loss of RM25.97mil for its first quarter ended April 30, 2011 versus a net profit of RM1.57mil in the previous corresponding period, mainly attributable to lower progress billings generated from the development projects during the quarter under review.

Revenue for the period plunged 43% to RM13.18mil from RM23.26mil a year earlier.

Talam slipped into PN17 on Sept 1, 2006, after its auditors failed to provide an opinion on its results for the financial year ended Jan 31, 2006. The company had also defaulted on term loans and bond obligations.

Its debt-restructuring exercise involves three parts a capital reduction and a share split, the issuance of new convertible instruments to address certain defaulted debts, and a proposed asset divestment programme.

According to reports, most of the debts stemmed from joint ventures on land belonging to state agencies, such as subsidiaries of Kumpulan Hartanah Selangor Bhd, Permodalan Negeri Selangor Bhd and Pendidikan YS Sdn Bhd.

However, over the years, Talam had been striving to reduce its gearing level. In the first half of 2010, Talam entered principal and supplementary agreements respectively with Menteri Besar Selangor (Inc) (MBI) to dispose of RM676.09mil worth of properties in settlement, principally of RM391.99mil due to MBI and RM266.26mil due to lenders.

On a good note, in June 2010, Bursa Malaysia also approved Talam's application to be uplifted from PN17 classification. As at April 30, 2011, the company's borrowings and debt securities stood at RM695.57mil.

In its note to Bursa Malaysia accompanying its first-quarter results, Talam said it was still facing a huge challenge in the low- and medium-end property sectors.

“Despite the uncertainty in the property development market, the group will endeavour to undertake all necessary measures to mitigate the adverse effects on the liquidity position of the group,” it said.

The company, when contacted, declined to comment on its prospects.

One property analyst believes that Talam should consider focusing fully on high-end developments.

“Generally, low-medium-cost developments tend to reap low returns,” he said.

Talam also said in its announcement (accompanying its first quarter ended April 30, 2011) to Bursa Malaysia that it was committed to completing the remaining development projects undertaken and expected to deliver most of the sold units to the purchasers by the second quarter of this financial year ending Jan 31, 2012.

According to its 2010 annual report, Talam has a total balance land bank of approximately 5,047 acres, mainly in Selangor, comprising a mixed portfolio of commercial, residential and industrial properties at various strategic locations in Ampang, Sepang, Puchong, Bukit Jalil and Rawang.

Its existing projects, namely Taman Puncak Jalil, Ukay Perdana, Lestari Puchong, Kinrara Section 3, Jalil Heights, Saujana Puchong, Danau Putra, Putra Perdana, Saujana Putra, Lestari Permai, Bukit Sentosa and Bandar Bukit Beruntung have a combined gross development value (GDV) in excess of RM10bil.

It also has a project in the pipeline, namely its Berjuntai Bistari project, which is to be developed over 15 years and will comprise approximately 3,500 units of residential and commercial properties with an estimated GDV of RM350mil.

In its announcement to Bursa recently following its first-quarter results, Talam said other than its current development projects, the group would go into joint-venture projects with reputable corporations.

A property analyst said Talam could approach developers keen on strategic partnerships.

“Collaborating in a project is one way to create better value by leveraging on each other's strengths and expertise. However, it is imperative if both parties shared the same goals and values,” she said.

According to its annual report, Talam has four on-going joint-venture projects currently, but with its own units.

The projects include the 252 units of terrace houses at Ukay Perdana, which is a venture undertaken by 50%-owned Good Debut Sdn Bhd. The development is part of the Ukay Perdana project in the vicinity of Bukit Antarabangsa and has a gross sales value estimate of RM96.55mil.

Other joint ventures include the Serenia Garden residential development project undertaken by 50%-owned Sierra Ukay Sdn Bhd, which has a GDV of RM615mil; the Sierra Selayang residential project undertaken with 50%-owned Cekap Tropikal Sdn Bhd (which has a GDV of RM963.9mil) and the Yin Hai Complex project undertaken by Jilin Dingtai Enterprise Development Co Ltd, a wholly-owned subsidiary of Larut Leisure Enterprise Hong Kong Ltd, a 50%-owned associate of the Talam Group.

By The Star

Saturday, June 25, 2011

A resort island in Nilai?

The sky bungalows has a 70% take-up rate.

The idea of offering island living in Nilai, Negri Sembilan, sounds like pie in the sky, but to gain attention in the competitive property market, you have to think big and different sometimes.

The 350-acre Green Beverly Hills development in Putra Nilai (formerly known as Bandar Baru Nilai), with its inland resort island concept, is said to be the first of its kind in the world.

The brainchild of GD Development Sdn Bhd, Green Beverly Hills is on freehold land, and plans includes a five-star health-themed hotel, a 500,000 sq ft club house, condominiums, semi-detached homes, villas, and a shopping mall. The project, due to be completed in eight years, has a gross development value of RM4bil.

GD Development chief executive officer Lim Ching Choy says Green Beverly Hills was conceptualised as a upmarket residential community on a iconic lifestyle resort island.

“As far we know, there is no other similar development in the world,” says Lim in an interview with StarBizWeek.

At present, there are five lakes within the development. “We will link the lakes, and flood other areas, to create a canal system around the development, thus turning it into a man-made inland island,” he says.

According to Lim, it is the company's joint chairman Datuk David Yeat Sew Chuong who comes up with the idea.

“He was inspired by the castles and palaces he visited in Europe, South Korea, Japan and China that are surrounded by moats and lakes.”

Yeat is also the founder and chief executive officer of INS Bioscience Bhd, which is listed on the ACE Market of Bursa Malaysia.

Lim has extensive experience in property development, having served as chief executive officer in Mah Sing Group Bhd and Magna Prima Bhd within the past nine years. He was also formerly the managing director of Ho Hup Construction Co Bhd.

Engineering firm Angkasa Consulting Services Sdn Bhd, which has been involved in wetlands and lake developments in Malaysia and China, is the consultant for Green Beverly Hills.

Lim says water discharge and flow in the canal will be controlled by mechanical systems. “During periods of heavy rain, we can discharge the water when it reaches a certain level.”

Access to the development, over its water channel, will be via three roads. The development is touted as being strategically located, with the South Klang Valley Expressway and North-South Expressway as highway links.

“From Green Beverly Hills, it is a 10-minute drive to the KL International Airport (KLIA), a 15-minute drive to Putrajaya, a 35-minute drive to the Kuala Lumpur City Centre, and a 20-minute drive to Seremban. The Salak Tinggi KLIA Transit Station is just a five-minute drive away,” says Lim.

He points out that institutions of higher learning such as the Inti International University, Nilai University College, Nilai International School and Universiti Sains Islam Malaysia are located close to the development.

Also in the vicinity are the Nilai Springs Golf & Country Club, NCI Hospital as well as Tesco and Giant hypermarkets.

Lim says other highlights of the gated and guarded development includes the availability of broadband Internet services, a “green environment” and a density of 5.7 units per acre (including condominiums) with about 2,000 planned property units.

He adds that a 50-acre forest, 20-acre organic farm and 20 acres of water (surrounding the island) are in the works. “Residents can buy produce from the organic farm with points accumulated via their property maintenance fees.”

A closed-circuit television (CCTV) camera surveillance and CMS (central monitoring system) will be put in place for better security on the island. “Each house is linked to the CMS,” says Lim.

Also, the company will make a submission for certification from Malaysia's Green Building Index soon. “All our buildings will incorporate a rain water harvesting system.”

Lim: As far we know, there is no other similar development in the world like Green Beverly Hills.

Earlier this year, two blocks of Sky Bungalow condominiums with 334 units sized from 932 to 1,816 sq ft per unit, were launched.

A unique feature of the Sky Bungalow condominiums, priced from RM487,200 to RM910,800 per unit, with one to three-bedroom types, is that each unit comes with a swimming pool.

Smaller units have 5 x 10 ft pools while bigger units have 5 x 14 ft pools. “We can provide an option for heated water in the pools, depending on request,” says Lim.

Another highlight here is the 12-ft ceiling of the units. One block of the Sky Bungalow condominiums is a 25-storey tower, while the other is a 20-storey tower.

Each floor has six to eight condominium units, with each allocated a car park bay. An extra car park bay for each unit can be rented at less than RM100 per month. “For those who need more than two car park bays, we are providing an additional 66 bays.”

To date, the Sky Bungalow condominium project has a 70% take-up rate. According to Lim, the Sky Bungalow condominiums will be the only high-rise residential units on the development. “All other residential units here will be landed types.”

Also launched earlier this year were 17 units of four-storey Water Villa bungalows, each with a built-up area of 4,769 sq ft and priced at RM3.167mil.

Each unit comes with a private lift. There are also 44 units of three-storey Garden Villa bungalows, each with a built-up area of 3,858 sq ft and priced at RM2mil. Lim is pleased by the take-up for the bungalows, as only two and 18 units of Water and Garden Villas respectively remain available for sale.

The condominiums and bungalows are due to be completed by the end of 2014 and 2013 respectively.

In July, Lim plans to launch 148 units of three-storey semi-Ds, each with a built-up area of about 3,600 sq ft and priced at RM1.7mil onwards. According to Lim, to date, about 30% of the buyers are foreigners. “The foreign buyers are mainly from Singapore, with the rest from Indonesia and Hong Kong.”

Green Beverly Hills is GD Development's maiden and only foray in property development. The company was incorporated in 2009. Lim says the company has no other property development plans. “For the next eight years, we will focus only on Green Beverly Hills.”

By The Star

Now everyone can have a home?

The robust property market is a double-edged sword. On one hand, the appreciation in property prices has the potential to churn out many more wealthy individuals and property developers are among the big beneficiaries of this strong property market.

On the flip side is the increasing burden on the general public who have to cough up more to own a property today.

The rising cost of living caused by creeping prices for a broad range of consumer items is a double whammy and will have a big impact on the middle and lower income groups. If left unchecked, it may result in greater disparities between the haves and have-nots.

It is important that the Government's affordable housing programme be accorded top priority to ensure more reasonably priced housing units are built in various parts of the country.

Initiatives such as the My First Home Scheme (MFHS) will serve to lighten the burden on young Malaysians aged between 18 and 35 purchasing their first house through the provision of 100% loan financing.

The initiative will have a higher success rate if it is supported by enough sizeable land parcels dedicated for the MFHS projects, and reputable developers are roped in to build these schemes.

And it is important that any concerns voiced out by the public and industry players be addressed and ironed out early on before they mar the success of this noble project.

The Government's latest initiative to dedicate a portion of the old Sungai Besi airport land for quality affordable housing by the developer, 1Malaysia Development Bhd (1MDB) is most timely.

Prime Minister Datuk Seri Najib Tun Razak says the scheme, dubbed Perumahan Rakyat 1Malaysia (Prima) to be launched next month, will offer homes at below market value as part of a public-private partnership to provide affordable housing.

I believe another idea that can be adopted to help alleviate the hardships caused by rising house prices is to introduce “no frills” housing projects as an option for house buyers who choose to pay the minimum for a house.

Just like the model adopted by low-cost carriers or budget hotels, buyers will only be charged what they have signed up for.

If they opt for the no frills unit, they will only have to pay for the land, the house structure, and the can't-do-without items.

Those who want to have their units fitted with all the usual finishing like decorative tiles, plaster ceiling and built-in furnishings, should also be given the choice to do so.

This model will minimise wastage as it is a well known fact that many new house owners will choose to renovate their house before moving in. Many times, the whole interior structure and room partitions are knocked down, only to be rebuilt.

If these house buyers are allowed to choose the “minimalist” unit instead of the standard “fully dressed up” one, they can save substantially on their property.

Although offering such flexibility may mean more work and lower margin for developers, the one who has the foresight to take up this idea may stumble on a winning formula and win over a big customer following.

Just like Air Asia's gutsy founder, Tan Sri Tony Fernandes who has taken budget air travel to a whole new level, a “no frills” developer will also emerge a big winner by moving into a new, uncontested market.

It is heartening to note that amid the growing materialism among some sections of the populace, there are people who make it a point to serve and contribute, rather than be served.

Many inspiring stories have emerged about individuals who are selfless and go out of their way to help other people and contribute towards a better world.

Giving editorial space like what The Star is doing through the “Be Inspired” initiative, to individuals who have achieved success despite the odds stacked against them, and those who selflessly contribute their resources, either in kind, time or effort, for the well being of other people, can inspire others to take action and chip in however small the effort may seem.

Although it may just be a mere drop in the vast ocean, the important thing is that we start to take action which cumulatively will become a force for more positive change to take place either on the individual or the society as a whole.

And initiatives like “The Giving Pledge” by Microsoft co-founder Bill Gates and billionaire investor Warren Buffet, that asks the wealthy to donate half their fortune to charity, will hopefully give birth to more philanthropists among the super-rich.

Having high profile individuals do their bit for the larger good of humanity is a great way to create awareness of the goodness of giving.

I believe this is one of the positive effects of globalisation as the vast movement of people and multinational corporations turn the world into a big global village. Hopefully it will serve to instil greater empathy and lessen the differences between people from the various continents.

There is no stopping the rapid globalisation underway now, and even the property industry is a party to this with more property developers taking to the global stage.

This should be a golden opportunity for developers from the more developed continents, including those from Malaysia, to help out with efforts to house the many millions of homeless people, including slum-dwellers, in the poorer and less developed countries today.

Deputy news editor Angie Ng hopes a “white knight” developer with a big heart will be the first to champion the “no frills” housing project model in Malaysia.

By The Star (by Angie Ng)

High-speed rail will spur growth in hub cities

Rail-link: The Eurostar train link has helped to strengthen economic activities in both London and Paris. — AFP

The Kuala Lumpur-Singapore High Speed Rail (HSR) has been highly anticipated ever since the Malaysian Prime Minister announced in September 2010 the instigation of the HSR connecting the two neighbours. Initiated by YTL Corp Bhd way back in the late 90s, this RM8bil to RM14bil project has so far received mixed views from the public.

HSR has been operating long ago in our Asian counterparts especially in Japan, China, Taiwan and South Korea. For comparison, China's HSR network by the year 2013 will be at 6,000 km, exceeding Japan's HSR network of 2,459 km. Last year, in the United States, the Obama administration invested US$8bil in federal stimulus money to create 13 high-speed rail corridors and billions of dollars of new business and tens of thousands of jobs are expected to flow to four hub cities Los Angeles, Chicago, Orlando and Albany, NY where plans for major high-speed rail networks are located.

It was reported at the Conference of Mayors that the benefits of travelling between 110 mph and 220 mph will mean better connectivity, shorter travel times and new development around train stations. The changes will create 150,000 new jobs and some US$19bil in new businesses by 2035. The rail network is also expected to spur tourism, give businesses a wider pool of workers to choose from and help grow technology clusters in cities.

Similar to experiences in other countries, in Malaysia, HSR will also generate substantial economic benefit to both countries, particularly Kuala Lumpur City Centre and the Iskandar region. The availability of HSR will shorten the distance between Malaysia and Singapore in terms of travelling time, hence attracting a larger pool of market catchment to stay in Malaysia and work in Singapore or vice versa. Straddling around 400 km, the proposed HSR will reduce travelling time to Singapore to 90 minutes compared to existing trains which take about seven hours. The significant reduction in travelling time will attract foreign companies to operate in Kuala Lumpur or Iskandar.

While the occupation cost (gross rental rate) for prime office space in KL City Centre range between RM6 per sq ft (psf) and RM8 psf, the cost in Singapore range between RM25 psf and RM30 psf. Meanwhile, the current rental rate in Johor Baru, where most of the buildings are more than ten years old, range from RM1.40 psf to RM3 psf. The low rental market in Johor Baru is hardly surprising as it is mainly domestic-demand driven. With ambitious Iskandar initiatives coupled with various investment friendly policies, the HSR will further augur the Johor Baru office market, hence attracting more MNCs to operate in Johor Baru. Upon completion of the HSR, gross rental rate for new Grade A office towers in Iskandar is expected to hover between RM4.50 psf and RM4.80 psf, 50% to 60% higher than the highest rate achieved in Johor Baru city centre.

Meanwhile, average selling price for existing condominiums in Johor Baru range from RM230 psf to RM370 psf. Capital value for existing condominiums in Johor Baru registered mixed performance from as high as 23% growth while some even noted depreciated values by -19%. Imperial@Puteri Harbour registered the highest selling price at RM400 psf. I believe the HSR will add vibrancy to the high rise properties in Johor Baru. Current average rental rate at RM2 psf in Johor Baru is estimated to increase by 50% to 60% arriving at RM3 psf, which is still below Kuala Lumpur rental rates, averaging at RM4.50 psf. Therefore, it is timely for the HSR to be in place as it will help improve demand from locals and Singaporeans for high-rise residential properties.

The tourism industry has grown favourably, with tourist arrivals increasing from 5.2 million in 1997 to 24.6 million in 2010 in Malaysia and 10.2 million to 11.6 million in Singapore during the same period. The proposed HSR is also expected to create positive impacts to the tourism industry of both nations. With combined tourist arrival of about 35 million coupled with 90 minutes commuting time, Kuala Lumpur-Iskandar-Singapore will be able to position themselves as the transportation hub of South-East Asia as it will provide tourists a wider airline selection to choose from either in KLIA, LCCT or in Changi Airport hence, improving international access to the region. In addition, the HSR in Shanghai and Tokyo are one of the “must see” tourists' attractions in the respective countries.

Manufacturing will remain as one of the sources of income to both nations. As land in Singapore is becoming scarce with limited land for expansion, coupled with escalating business costs, the HSR would enable some companies to expand or relocate to Malaysia, particularly in the Iskandar region. Moving manufacturing activities to Iskandar would allow the land to be used for even higher value activities. Malaysia's relatively liberal immigration policies and substantially cheaper labour costs in Iskandar compared to Singapore will reduce the operating costs. The relocation of manufacturing activities to Iskandar via the availability of HSR is expected to raise the contribution of the manufacturing sector to the nation's GDP by 6.5%.

The closer cross-border link between Malaysia and Singapore will eventually position the region as the first South-East Asian “mega region” similar to Tokyo-Osaka via the Shinkansen Bullet Train, and Shanghai-Hangzhou via the Huhang High Speed Rail among others. While it is noted that existing mega regions are within the same country under the same political driver, with strong political determination, deeper mutual understanding and putting aside all long standing aggravation, Malaysia and Singapore can materialise the idea. We should learn from the European experience; the Eurostar train link has helped to strengthen economic activities in both London and Paris.

In essence, the HSR will economically benefit both nations and strengthen economic ties between the two nations. A larger joint economy will result in larger land area, larger population and larger market, offering greater economies of scale. In addition, larger joint economy with a more diverse mix of skills, types of companies, types of business activities and greater variety of business locations, could accommodate the diversity of talents, business activities, consumer preferences and skill sets. All this will be made possible via improved connectivity by the High Speed Rail, which has been proven to stimulate local economies and act as a driver of growth and thus help spur property prices.

Senator Datuk Abdul Rahim Rahman is executive chairman of Rahim & Co group of companies


Tambun Indah to ride on Penang property boom

KUALA LUMPUR: Tambun Indah Land Bhd expects to record strong revenue growth in the current financial year ending Dec 31, underpinned by the sustained property boom in Penang.

Its managing director Teh Kiak Seng said on Friday, June 24 there was strong interest in its ongoing projects due to the rapid industrial expansion in Seberang Perai. This was also due to the spillover effect from the high demand for residential properties on Penang island.

“At present, Tambun Indah has several ongoing projects on mainland Penang with total gross development value (GDV) of RM1.6 billion until 2016, which has positioned the group as a leading property developer in mainland Penang,” he said after the shareholders meeting.

Teh said since the beginning of the year, the group has recorded an increase in sales, both in terms of units and value, from its various projects.

“To date, we have sold more units than what we had sold in the first half of 2010. At this rate, Tambun Indah is likely to sell more units this year than what we did in 2010. Therefore, we are optimistic of a higher revenue base for FY2011,” he said.

Tambun Indah’s ongoing projects include Pearl Garden, Pearl Villas, Juru Heights, Carissa Park, Impian Residence, Dahlia Park and Tanjung Heights

Launched in 2009 and 2011 respectively, Pearl Garden together with Pearl Villas have a GDV of RM277 million.

“The RM277-million GDV projects are expected to contribute 45% to the group’s revenues in FY2011, compared to 35.1% in FY2010,” he said.

By The EDGE Malaysia

Friday, June 24, 2011

Ampang’s latest high-rise launched

Impressive: Tajol Rosli (left), looking at the D’Pines@ Ampang project model with Dr Foo and some others before the launch of the sales gallery.

A new residential high-rise property named D’Pines has just been launched in Ampang and is set to liven up the mature neighbourhood surrounding it.

“We are proposing a future development next to the condominium, a centre with facilities like badminton courts, a swimming pool, game room, hall and such. Those who can apply for membership to use the place are residents in Taman Nirwana only,” Sri Seltra Sdn Bhd (a member of City Motors Group of Companies) sales and marketing manager Michael Lip said, adding that there may also be retail space available.

While no other details available yet because the idea is still in the planning stage, what has already started construction is the two block 20-storey condominium towers. along Jalan Cempaka 6, due to be completed in early 2014.

“Block A will have 265 units while Block B will have 267. Both consist of units ranging from 1,321 square feet (sq ft) to 1,875 sq ft,” Lip said.

The carparks will be built in a separate block with a sundeck at the top of it.

“One of the main features of the deck is the freeform pool with sand beach while the other is the ‘forest park’. There will also be a playground, yoga zone, barbeque area and gymnasium,” he said.

According to Lip, selected units will also have a skydeck, an open air platform that can be considered as a second and more private balcony, accessible via the master bedroom.

As for the features of the units, all designs have minimum three bedrooms and two bathrooms.

The larger two units comes with wet and dry kitchen areas while most of the units have an utility room and yard.

Lip said that other features of the condominium is three-tier security, 24-hours CCTV and guards service while maintenance is charged at 20sen per sq foot.

“We also had several town villa and penthouse units that has been sold out. Currently, 70% of our units have been sold,” he said, adding that prices for the units start at RM380,000.

Former Perak Mentri Besar Tan Sri Tajol Rosli Ghazali, who had planted a tree in the area back when he was the Housing and Local Government deputy minister, launched the opening of the sales gallery recently.

At the event, City Motors executive chairman Datuk Dr Foo Wan Kien said the company has come a long way to be able to develop the land that was once filled with squatters.

“Through social responsibility, we resettled the squatters amicably to a medium-cost apartment in Sri Pinang just opposite this condominium where units are between 800 to 1,000 sq ft,” Foo said, adding that they believed in a win-win situation where the living standards of everyone is upgraded.

He said that one of the key attractions of D’Pines was its proximity to the city centre and other facilities such as the MRR2, Jalan Ampang, DUKE Highway, Ampang-Kuala Lumpur Elevated Highway and even LRT Ampang line stations like Cempaka.

“There are also plenty of hospitals, both government and private nearby and schools. There are also conveniences like Tesco and Carrefour Market close by,” he said, adding that D’Pines offers one of the lowest prices for a similar project in the vicinity.

He was also worried that a build- and-sell policy that seems good now may be harmful to the public.

“Not many can finance such projects as banks are reluctant to finance it. Bigger developers on the other hand will not be launching a housing scheme with more than 100 or 200 units, fearful of the market at the time of the project’s completion,” he said, adding this could lead to shortage of affordable homes.

Foo believes that incentives such as lower premium, soft loans or suggestions such as developers only collecting about half of the cost to cover construction costs be implemented by the government instead.

The show gallery that is located at the construction site of the project is open from 10am to 6pm daily.

By The Star

MGPA upbeat on Vista Tower

KUALA LUMPUR: Real estate investment firm MGPA expects its grade A office building Vista Tower (formerly known as Empire Tower), located at the junction of Jalan Tun Razak and Jalan Ampang, to be fully taken up by year-end.

MGPA Asia chief executive officer John Saunders said the building had already recorded a 60% take-up in the last six months. Refurbishment of the tower was completed at the end of last year.

“We have quite a number of potential tenants talking to us. By year-end, the tower should be full,” he said after a signing ceremony between MGPA and Maybank Investment Bank Bhd for a syndicated term loan facility worth RM1.2bil yesterday.

Saunders said the price for office space at the 62-storey tower ranged between RM8 and RM9.50 per sq ft.

“Currently, the tenant mix is 50:50 between local (tenants) and foreigners,” he said.

The RM1.2bil syndicated term loan facility is for The Intermark, which comprises the redevelopment of the Empire Tower, City Square, Crown Princess Hotel and Plaza Ampang.

MGPA, through its Asia Fund 2, acquired the properties in 2007 for about RM760mil. The entire redevelopment is expected to cost RM2.25bil.

“In 2007, (when) MGPA acquired the development, (the) property was underperforming and neglected but we've now turned it into a grade-A office space with A-list tenants, an international business class hotel managed by Doubletree by Hilton, and a retail podium that supports and integrates the development. We will soon be completing Malaysia's first pre-certified platinum LEED office tower, Integra Tower.”

Maybank Investment is the mandated lead arranger and bookrunner for the syndication which is participated by Malayan Banking Bhd as the main lender.

Saunders said MGPA would raise the rest of the funds via equity. “The (syndicated) loan is just liquidity management.”

Maybank Investment chief executive officer, Tengku Zafrul Tengku Abdul Aziz said the facility would add to the depth of the Malaysian ringgit syndicated loan market for 2011 which to-date stood at over RM5bil.

By The Star

Singapore's Healthway snaps up land near KLCC

Kuala Lumpur: A unit of Singapore-listed Healthway Medical Corp Ltd (HMC) has bought a piece of land near the Petronas Twin Towers in Kuala Lumpur for some RM80 million.

Sources told Business Times that the family-owned land, located on 19 Jalan Kia Peng, was sold to Healthcare Medical Corp's associate, Healthway Medical Development (Private) Ltd.

The buyer is said to have paid an estimated RM1,600 per sq ft for the site, measuring a little over 50,000 sq ft. The land is located just behind The Pearl condominium and between Suria KLCC and Pavilion.

A drive by the plot of land revealed that Zerin Properties is the exclusive marketing agent for the land. However, its chief executive officer Previn Singhe, when contacted to confirm the deal, declined to comment.

It was reported last year that the asking price for the piece of land was RM1,800 per sq ft and that it has potential for development.

Incidentally, Healthway Medical Development has incorporated a company called Healthway Medical Centre (KLCC) Pte Ltd. However, it is unclear if this company is related to the land buy in any way.

Healthway Medical Corp is Singapore's largest network of private medical centres and clinics of primary healthcare, dental and specialist services.

Last June, Singapore billionaire Peter Lim Eng Hock emerged as a substantial shareholder in Healthway Medical Corp. However, in October 2010, Lim, known as the Remisier King, ceased to be a substantial shareholder.

Lim made headlines in Malaysia last year when he bought a substantial stake in TMC Life Sciences Bhd. He is now the largest shareholder with 32.59 per cent of TMC, a private healthcare group.

Meanwhile, it was reported two months ago that Lim had bought 14ha of land in Stulang Laut, Johor, for some RM200 million. He was said to be planning to build a Thomson Medical healthcare facility there.

Singapore-listed Thomson Medical was taken private by Lim lastyear. It is described as a leading healthcare service provider in Singapore for obstetrics, gynaecology and paediatric service.

By Business Times

Johor set to house region’s largest film-making complex

JOHOR BARU: Johor is set to house the largest film complex in the region when Pinewood Studios Iskandar Malaysia (PSIM) opens its doors in 2013.

PSIM chief executive officer Michael Lake said the complex, on a 32.37ha site in Nusajaya, would offer state-of-the-art facilities for film production and related activities.

He said that among the facilities would be production offices, filmset construction areas and backlot (an area behind or adjoining a movie studio, containing permanent exterior sets for outdoor scenes in motion picture or television production).

The complex will have five fully air-conditioned and sound-proofed film stages with floor areas of between 1,400 and 2,800 sq metres, and two high-definition television stages of 1,100 sq metres each.

“It will become a one-stop centre, providing filmmakers with world-class facilities,” Lake said at a talk held in conjunction with the Careers, Businesses and Skills Carnival 2011 at Persada Johor here.

He explained that Malaysia had all the elements to make it attractive to film producers, such as its competitive exchange rate, lower production costs and interesting locations that could be used for filming.

“We hope to attract film production companies not only from Asia, but also Europe and the United States,” he said .

However, Lake pointed out that building the infrastructure alone would not suffice, and that PSIM needed to train talents in various cinematic, organisational and technical skills.

He added that PSIM would look into providing internship opportunities for locals who were interested in the film industry.

Lake said he had already begun marketing PSIM to the film industry overseas, and the reaction has so far been largely positive.

“Malaysia presents a new and exciting frontier, and film producers have been interested in learning more about the country,” he said.

He added that PSIM would work closely with Multimedia Deve­lopment Corp and the National Film Development Corporation to promote and market the complex both locally and overseas.

PSIM was established with RM400mil in investments in a joint venture between Khazanah Nasional Berhad and UK-based Pinewood Shepperton.

By The Star

Thursday, June 23, 2011

Dijaya Corp to unveil projects worth RM762mil

PETALING JAYA: Property developer Dijaya Corp Bhd plans to launch three new projects this financial year ending Dec 31 with a gross development value (GDV) of RM762mil.

Tong: We will launch Tropicana Cheras, a residential project in Sungai Long some time between July and August.

Managing director Datuk Tong Kien Onn said the total GDV for the three projects was more than RM1bil but as the group planned to launch them in phases the GDV was RM762mil.

“We will launch Tropicana Cheras, a residential project in Sungai Long some time between July and August. The first phase of the Tropicana Danga project will be launched in the third quarter while the first phase of Tropicana Avenue, a mix development project with commercial centres and apartments, in Tropicana will be launched in the final quarter,” he told reporters after the group's AGM yesterday.

The group had in the last financial year launched projects with GDV worth RM800mil.

Dijaya had earlier said the group planned to launch property projects worth RM3.5bil over the next two years.

Tong said Dijaya would aggressively launch more new projects in FY12 and FY13 to achieve the RM3.5bil target.

He also said Dijaya was still looking for more land to acquire.

“Our current land bank of 140 acres is excluding the recently purchased land in Subang and Kampar. If we add up both parcels, our total land bank will be about 240 acres,”he said.

Dijaya had bought two parcels of land - one in Subang (88.5 acres) and another in Kampar, Perak with a size of 12.9 acres.

On the move by the group to embark into the hotel business, Tong said after partnering with hotel and leisure company Starwood Hotels & Resorts Worldwide Inc to develop W Hotel in Kuala Lumpur, the group was looking for other places for new projects.

He said the W Hotel would take about four-and-a-half year to be completed and the project would start by the end of this year.

Tong also said Dijaya would continue to focus on the local market for its businesses although it was open for any business potential in the overseas market.

He said the outlook of the property market in the country was still positive.

By The Star