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Friday, January 14, 2011

Sime plans 15 property launches by June

KUALA LUMPUR: The Sime Darby group is preparing for at least 15 property launches for the six months ending June when the group's financial year comes to an end.

Sime Darby Property Bhd head of marketing development Henri Young said these 15 launches would cover different locations. Young was speaking to reporters at the launch of the Certificate of Real Estate Investment Finance programme in Malaysia, which will be sponsored by the Sime Darby group for the first time.

The eight-month course was first launched in 2007, and Malaysia is the fifth market to offer the programme.

The programme is promoted by the Asia Pacific Real Estate Association, which is partnering with the Malaysia Property Inc and Sime Darby Property, to offer the programme.

Young said the property market had been very buoyant the last year with units being sold the first two months after launch.

“Demand is very strong for landed units. We are now seeing a demand for service apartments and condominiums in the suburban areas. Buyers are looking for more value and they see room for capital appreciation in future years. The KLCC and Mont'Kiara areas have reached their peak and the rental market is struggling.”

In the next two months, the company will be launching The Glades in Putra Heights, Subang Jaya, a 53-acre development with bungalows, semi-detached, link and condominium units.

This will take place in May where as the Denai Alam in Shah Alam development will be offering Mulberry Grove linked houses while the Bandar Bukit Raja project will also offer linked houses.

In USJ Heights, it will offer zero-lot bungalows, where the compound is either small or limited.

In Melawati, the company launched super-linked terraces in Casa Rimba priced at RM1.5mil and retail and condominium units at its Quartza development in Desa Melawati.

By The Star

Sime to launch 15 property projects

SIME Darby, through Sime Darby Property Bhd, will be launching 15 projects across 10 townships in the first half of this year.

Its head of marketing development, Henri Young said, the townships include Putra Height and USJ Heights in Subang Jaya, Denai Alam (Shah Alam) and Bandar Bukit Raja (Klang).

"There is still strong demand for landed and residential properties in Malaysia," he said before the launch of the Certified Real Estate Investment Finance programme in Kuala Lumpur yesterday.

He highlighted that the company's previous projects in Denai Alam, Bandar Bukit Raja and the USJ Heights townships was sold out within two months.

By Bernama

Good outlook despite soft rental market for property

KUALA LUMPUR: The overall property sector is expected to enjoy an uptrend this year, buoyed by the various economic transformation programmes announced by the Government and expansion in the manufacturing and services sectors, a property real estate consultancy said.

Rahim & Co Chartered Surveyors Sdn Bhd, one of the largest property consultancy firms, said at a press conference that the outlook was good despite a soft market in the rental of high-end condominiums. Executive chairman Datuk Abdul Rahim Rahman said average prices in the secondary high-end condominium market fell by 29% between the second quarter of 2008 and the second quarter of 2009 but this sub-segment of the residential market had been on the uptrend since the third quarter of 2010, increasing by 13%. Prices of new launches range between RM750 and RM2,500 per sq ft (psf).

“The leasing market has not fully recovered. Rental rate has remained low at about RM4.30 psf compared with its high in 2008 at RM4.90 psf. With the various projects to be implemented under the ETP to make city living more vibrant, we expect the market to be on the uptrend by 2012,” said Abdul Rahim.

In locations like Shah Alam, landed units by the more reputable developers are snapped up within six months. “People are buying because for RM2mil or so, they can buy the same type of houses which cost RM6.5mil to RM7mil in the city. That is why the launches outside KL are doing well, coupled with the fact that there is no landed launches within KL itself because of the scarcity of land. In locations like Bangsar and Sri Hartamas, only condominiums are launched,” he said.

In view of this, Shah Alam, Rawang, Selayang and Sg Buloh have become the hot spots today. The effects of the 2008 financial crisis also put pressure on the rental rate in the office sector, which enjoyed a peak of between RM6.50 and RM8 psf in 2007/2008.

He said there were limited transactions in 2010 but capital values rose to an average of RM775 psf after a sharp decline of 19% in 2008/09. Net yield is estimated to be between 6% and 7%.

Abdul Rahim cautioned that in the next five years, an estimated 14.5 million sq ft of new office space would be completed, of which about 27% would be located in the suburbs.

He added that with selling prices of between RM500 and RM1,000 psf, some companies in the city centre were relocating to new office buildings in the suburbs due to lower rental rates, opportunity to own their own space, and convenience which helps recruitment and retention of staff.

“With the recovery in the economy expected to continue in the second half of 2011 and the effects of the ETP being felt, the office market may stabilise in the short term but will continue to be challenging in the long term,” he said.

In the retail property market, Abdul Rahim was upbeat about this sector, noting that retail sales were forecast to increase from RM137bil in 2010 to RM227bil in 2014.

For this year, 13 new malls are expected to be opened offering a total of 4.5 million sq ft of retail space, including two malls that are being refurbished and rebranded, Intermark (previously City Square) and Viva Mall (previously UE3 Mall).

By The Star

Sluggish outlook for property investment trusts

Prospects for real estate investment trusts (REITs) are sluggish as there are fewer Grade A office buildings for sale in Greater Kuala Lumpur.

As such, Rahim & Co managing director Robert Ang reckons there will be fewer REIT launches this year.

"REITs look at investments of above RM100 million. However, there is no good stock in the market. If there are quality assets, most developers will hang on to them as an investment, and probably float their own REITS," Ang said.

"What you have in the market now are assets for sale by trust funds who are cashing out," he said after a briefing on the Malaysian property market outlook in 2011 in Kuala Lumpur yesterday.

Ang said developers may take up property investment as a side income because of scarce land for new projects.

Nevertheless, he expects more launches this year compared with 2010, with prices for landed residential properties increasing by 5 per cent to 10 per cent in choice locations.

But he cautioned that ordinary investors are staying out of the market.

"Fundamentals are not strong for foreign investors to come here. There is oversupply of condominiums in Kuala Lumpur. The vacancy rate is 30 per cent and rentals are softening. I do not foresee a major price increase for the next one to two years," he said.

Ang said developers are still launching condominiums in Kuala Lumpur despite an oversupply situation and sales have been brisk as prices are 20 per cent less from the peak.

Meanwhile, Rahim & Co founder and executive chairman Datuk Abdul Rahim Rahman said the Malaysian property market will do better this year, led by projects under the Economic Transformation Programme.

Abdul Rahim expects more demand for residential, commercial, industrial and retail properties.

He said projects like the Sg Buloh land and Sg Besi airport redevelopment, the Matrade project by Naza Group, the Kuala Lumpur International Financial District and the 100-storey tower by Permodalan Nasional Bhd will contribute to growth in the property sector over the next few years.

"There would not be a nationwide phenomenon of property bubble," he said.

By Business Times

Ringgit loans for British properties

PETALING JAYA: Malayan Banking Bhd (Maybank) expects its Overseas Mortgage Loan Scheme, the bank's first ringgit-denominated mortgage facility for property purchase in Britain, to boost its home financing division.

With the new product, the division is expected to grow more than 13% in its current financial year ending June 30, 2011.

The mortgage was designed for high net worth customers interested in buying properties in Britain due to the favourable currency exchange rate, said Maybank community financial services deputy president and head Lim Hong Tat in a statement yesterday.

London offered attractive advantages for property purchase to non-residents, he said, adding that the bank had worked with international real estate agencies to assist customers on British regulations.

The ringgit mortgage facility will finance completed or residential and commercial properties under-construction in London covering prime locations such as the city of London, Westminster, Knightsbridge, Kensington and Chelsea.

Key features of the loan scheme include repayment in ringgit, high margin of financing of up to 85%, flexible repayment and long tenure of up to 30 years or 70 years of age whichever is earlier.

“This milestone mortgage scheme brings tremendous savings to customers as the unique proposition of this loan is Malaysians being able to borrow in ringgit for the purchase of property in London.

“Borrowing in ringgit will protect customers from currency fluctuations on their monthly loan repayments and savings as the pound sterling is anticipated to rise against the ringgit this year,” said Lim.

A banking analyst said the facility provided investors with protection against currency fluctuations.

Asked if other banks would offer similar facilities, the analyst said: “The banking industry is constantly coming up with ways to boost their margins and remain competitive.”

According to Maybank, Malaysians purchasing properties in London have to obtain financing from Britain-based banks and pay the monthly installments in pound, thus exposing them to exchange fluctuations.

Financing from Britain-based banks for Malaysians is only available for “buy-to-let purposes” the property must be purchased for investment purposes and not for own occupation.

Lim said the facility was offered in the form of term loan, overdraft or a combination of term loan and overdraft.

“We anticipate a take-up of RM60mil within the next six months. This is in view of the attractive property valuation in London and overseas buying interest which will be before April when the new 5% sales tax is imposed for properties above 1mil.

“The current strong ringgit against the pound is also another factor that will encourage Malaysians to buy before the anticipated rise in the second half of the year,” he said.

Lim said the people can enquire about this new facility at any Maybank branch in Malaysia or in London.

By The Star

UCSI plans RM1.13b expansion drive

DIVERSIFIED firm UCSI Group plans to spend up to RM1.13 billion to expand its business and education-based operations over five years, its chairman Datuk Peter Ng said.

The group, which operates the UCSI University, is in the midst of developing three five-star hotels in Kuching, Kuala Lumpur and Bandar Springhill in Port Dickson, Negri Sembilan.

Ng said in Bandar Springhill, UCSI is planning to build a university medical centre on 13.9ha with investments of RM500 million, besides a RM200 million resort hotel and convention centre.

Bandar Springhill is also where UCSI University's main campus will be located.

"Initially, the medical centre will hold 400 beds and will expand to 1,000 beds," he said, noting that it will feature state-of-the-art technology and a hostel for nursing students.

The resort hotel and convention centre, meanwhile, are being built on a 5.6ha site comprising a 17-storey hotel with 319 rooms.

Ng said the hotel will feature nine restaurants and eateries with indoor and outdoor seating, a sandy beach, a full-service spa, a roof garden, four meeting rooms, conference and seminar rooms, function hall and grand ballroom.

A 14-storey residential block for students with 390 rooms will be built next to the hotel.

"These projects are expected to be completed by May 2012," Ng said after unveiling the expansion plans at UCSI University's 25th anniversary celebration in Kuala Lumpur yesterday.

Also present was UCSI University chancellor Tan Sri Abdul Rahman Arshad.

Ng said UCSI University is committed to strengthening Malaysia's position as an international tourist destination.

"To ensure the success of the university medical centre, we have to be involved in health tourism," he said.

He said at present, Malaysia's health tourism was still low, with revenue of RM350 million recorded in 2010.

Ng said this was due to lack of hospitals involved in the niche market.

Apart from the two projects, UCSI is also setting up an international school in Bandar Springhill costing RM50 million whereby the project is due for completion by year-end.

Others include UCSI CityIsland Hotel in Kuching worth RM180 million, a RM200 million UCSI tower and hotel in Cheras and an office building in Cyberjaya.

"We are funding all of the projects via internal funds, disposable of fixed assets and borrowings," Ng said.

The government recently appointed UCSI University to lead a national initiative to help the country achieve its goal of becoming a high-income nation by 2020.

The university will chair the hospitality and tourism discipline cluster (Entry Point Project 10), one of the 131 projects under the Economic Transformation Programme.

By Business Times

Perak may have its own LCCT, says MB

The Perak state government is considering setting up its own low-cost carrier terminal (LCCT) in the northern part of the state.

"We have had a few discussions with AirAsia Bhd on the matter and we have proposed several locations in Perak, and they have stated their preference for one particular location," Menteri Besar Datuk Seri Zambry Abd Kadir told reporters in Sepang yesterday.

The site is expected to be in the vicinity of Parit Buntar and Taiping, which is in the area of the Northern Corridor Economic Region. Zambry was accompanying Sultan of Perak Sultan Azlan Shah and Perak Regent Raja Dr Nazrin Shah on a three-hour official visit of the LCCT and AirAsia Academy in Sepang yesterday.

Zambry explained that the state government was waiting for the right time to bring it up to the federal government to decide on the suitability and viability of the project.

He ruled out the possibility of turning the existing Sultan Azlan Shah airport in Ipoh into an LCCT because of congestion issues.

Currently, only Malaysia Airlines' low-cost arm Firefly services the Ipoh airport. At one time, however, MAS was flying in its Boeing 737 there.

"We have always, always said that we need a low-cost airport or terminal in the north (of Peninsular Malaysia). The airport has to know if there are airlines that will come ... we have said we can come. Now it's up to the airport (operators) to decide if that makes sense," AirAsia chief executive officer Datuk Seri Tony Fernandes said when asked to comment on the possible terminal in Perak.

By Business Times