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Tuesday, January 18, 2011

SP Setia to develop govt complex

PETALING JAYA: SP Setia Bhd's 50% owned associate Sentosa Jitra Sdn Bhd has received the Government's approval-in-principle to negotiate over terms to develop a new integrated health and research complex for the Health Ministry in Setia Alam, Selangor.

In a filing with Bursa Malaysia yesterday, SP Setia said the approval-in-principle was subject to terms and conditions to be agreed between Sentosa, the Public Private Partnership Unit (UKAS) in the Prime Minister's Department and the Health Ministry.

The proposed complex, to be known as the 1National Institute of Health (1NIH) Complex, is expected to be developed on 55.33 acres owned by SP Setia's wholly-owned unit, Bandar Setia Alam Sdn Bhd, in Setia Alam.

The complex will house the various national health institutes and relevant supporting offices and research centres under the ministry's purview which are currently situated on 40.22 acres along Jalan Bangsar and other parts of Kuala Lumpur.

In exchange, SP Setia will get the 40.22-acre Government land which it will redevelop into an integrated mixed residential and commercial project.

It will provide the Health Ministry and the Government with a 20% share of the net profits from the redevelopment.

“The land swap nature of the deal means that the ministry and the Government will not have to fund any part of the cost for the construction of the new 1NIH Complex,” the company said.

SP Setia was responding to a report over the weekend that it would build the complex at a cost of RM600mil to RM700mil.

The statement to Bursa did not mention the estimated cost of the complex or the estimated value of the proposed development in Bangsar.

In a separate statement, SP Setia announced a proposed placement of new shares of 75 sen in the company, representing up to 15% of its paid-up capital and a proposed 1-for-2 bonus issue.

The proposed placement would enable the company to raise funds to finance some existing projects, for future expansion plans as well as for general working capital requirements.

By The Star

SP Setia plans project, in talks with govt on KL site

SP Setia Bhd plans to undertake a mixed residential and commercial project in Bangsar, Kuala Lumpur, giving the government a 20 per cent share of its net profit from it.

The 16.3ha of prime land along Jalan Bangsar, where it proposes to undertake the project, is owned by the government.

SP Setia is currently in talks with the government to be given that land in exchange for building an integrated health and research complex for the Ministry of Health (MoH) on 22.4ha of land it owns in Setia Alam, Shah Alam.

It told the stock exchange yesterday that its unit, Sentosa Jitra Sdn Bhd (SJSB), has the government's in-principle approval for the land swap proposal.

The proposal was mooted by SJSB to the government along the lines of the public-private partnership concept.
The land in Bangsar currently houses five National Institute of Health agencies under the MoH's purview, which will be relocated to Setia Alam.

SP Setia said SJSB had finalised its design and costing for the new complex, to be known as the 1National Institute of Health (1NIH), and is now ready to commence negotiations with the MoH and the Public-Private Partnership Unit in the Prime Minister's Department.

The proposed new 1NIH will serve as a hub and centre of excellence for health research, training and consultation at both the local and global level.

"The land swap nature of the deal means that the MoH/government will not have to fund any part of the cost for the construction of the new 1NIH complex."

This, it said, will be paid for by the difference between the current market values of the Bangsar and the land in Setia Alam.

SP Setia told the stock exchange in a separate filing later that it plans to place out up to 15 per cent of its issued and paid-up capital. The issue price will be determined by way of book-building.

By Business Times

Property transactions to top RM100b in 2011

Property transactions are expected to exceed RM100 billion in worth this year from RM96.77 billion in the first 11 months of last year, said Director General of Valuation and Property Services Department, Datuk Abdullah Thalith Md Thani.

He also said the recovery of the economy has reinvigorated the overall property market with the residential property sub-sector remaining the main mover of the property market.

The value of transactions in the residential sector between January and November last year rose 7.6 per cent to RM222.29 billion taking up 60.2 per cent share of the volume of property transactions, he said during a press conference here today on the upcoming 4th Malaysian Property Summit 2011.

The transactions of commercial properties rose 21.3 per cent while that of industrial properties went up 25.6 per cent, agriculture 17.9 per cent and development land 24 per cent.

In the residential property sub-market, the major states recorded positive growth with the city of Pulau Pinang recording the highest rate of 9.7 per cent followed by Kuala Lumpur at 8.2 per cent and the state of Selangor with 7.2 per cent growth.

By Bernama

S P Setia back in the limelight

KUALA LUMPUR: S P Setia Bhd has bounced back strongly after taking a backseat in recent months when mega-property mergers took the spotlight. The property developer has confirmed securing 40 acres of prime land along Jalan Bangsar.

It also announced a fund-raising exercise via a proposed placement of 15% of new shares to be done via book-building that could easily raise RM1.14 billion. The fund raising comes in tandem with a one-for-two bonus issue.

In an announcement confirming a report in The Edge, S P Setia said it had received an approval-in-principle from the Prime Minister’s Department to talk over terms for the proposed development of a new integrated health and research complex for the Ministry of Health (MOH) in Setia Alam.

In return, S P Setia’s 50% subsidiary Sentosa Jitra Sdn Bhd gets a piece of prime land along Jalan Bangsar where the present facilities belonging to the health ministry are located.

“The company said that it had received a letter on Sept 24, 2010 by Unit Kerjasama Awam Swasta (UKAS) of the approval-in-principle granted by the Federal government for Sentosa Jitra to enter into negotiations with UKAS and the MOH over terms for the proposed development of a new integrated health and research complex on a 55.33-acre land in Setia Alam by way of land swap for the government land located along Jalan Bangsar,” the company stated.

In the last two months, S P Setia’s position as the industry leader among property developers was jolted following the mergers between UEM Land and Sunrise Bhd, and the proposed tie-up between Malaysian Resources Corp Bhd (MRCB) and IJM Land Bhd. The MRCB-IJM Land deal did not take off but the UEM Land-Sunrise merger had created a large property company overtaking S P Setia as an industry leader.

However, S P Setia’s president and CEO Tan Sri Liew Kee Sin last month had told analysts and reporters that the developer would bounce back and was looking at aggressively expanding its landbank in the Klang Valley.

This, he appeared to have delivered as the piece of land along Jalan Bangsar is one of the few sizeable parcels remaining in that location.

The proceeds from S P Setia’s fund-raising exercise are partly for the MOH development in Setia Alam that is expected to cost RM600 million to RM700 million. The funds are also to finance its existing projects, general working capital requirements, future expansion plans as well as to defray related expenses.

“The funds to be raised are timely especially for the MOH deal and will help expedite the development of Setia City to complement the presence of the 1NIH Complex,” Liew said in a statement yesterday.

S P Setia’s other development projects are also expected to benefit from the corporate exercise, including its KL Eco City (KLEC) project opposite Mid Valley, and the Fulton Lane project in Melbourne, Australia. The KLEC is a joint venture with City Hall.

S P Setia has plans to redevelop the land in Bangsar into an integrated mixed residential and commercial project where the MOH will have a 20% share of the net profits from the redevelopment under the proposal.

“We are tremendously excited about the project given the site’s excellent location which provides a rare opportunity for the group to further showcase our skills in developing luxury residential and integrated commercial products within the affluent Bangsar and Federal Hill areas,” Liew added.

Analysts are positive on this development. According to CIMB Research, the 40 acres could be worth RM523 million to RM871 million, based on the price of RM300 to RM500 psf for residential bungalow land in Bangsar.

“If the land has a plot ratio of four times or higher with commercial title, it could be worth several times more,” the research house said.

CIMB said that assuming a plot ratio of four to five times and an average selling price of RM1,200 psf, the gross development value of the Bangsar land would amount to RM8 billion to RM10 billion.

Additionally, CIMB expects margins for the project to be higher than KLEC’s as infrastructure requirements are likely to be considerably lower than the RM400 million expected to be spent on KLEC.

CIMB also assumes that S P Setia has a 50% to 60% stake in the project, which is similar to its effective 60% stake in KLEC, the surplus value from the land at a net cost of RM700 million for the 1NIH Complex alone would be around RM550 million or 48 sen per share, boosting the revised net asset value (RNAV) to RM6.21.

The research house kept its target price at RM7.45 but noted that there was a possibility of raising it to around RM8 based on the surplus value of the Bangsar land.

“There could be further upside to the RNAV as the shift of several thousands of ministry staff to Bandar Setia Alam would make S P Setia’s flagship township and the RM5 billion 158-acre Setia City commercial centre even more attractive,” it said.

Potential re-rating catalysts include positive news on the Bangsar land, continued robust sales, newsflow on other landbank and strong earnings growth. S P Setia remains the property sector bellwether and CIMB’s top pick for the sector.

The counter closed unchanged at RM6.70, with its market capitalisation at RM6.81 billion. S P Setia’s share price has risen some 50% since late September, thanks to the impending launch of KLEC.

By The EDGE Malaysia

China property prices climb in December

SHANGHAI: Property prices in China’s major cities posted a fourth straight month-on-month rise in December and sales picked up pace, data showed yesterday, despite efforts to cool the market.

Prices in 70 major cities were up 0.3 per cent last month from November and were 6.4 per cent higher than a year ago.

The month-on- month gain in November was 0.3 per cent.

The annualised surge peaked in April, when prices soared 12.8 per cent, but growth has slowed since then.


Sunrise shares to be delisted on Jan 21

SUNRISE Bhd’s shares will be removed from the Main Market of Bursa Malaysia with effect from 9am on January 21.

Sunrise, which develops high-rise residences and commercial properties locally and abroad, has been taken over by UEM Land Holdings Bhd.

By Business Times

Axis-REIT to sell Port Klang complex

AXIS Real Estate Investment Trust (REIT) hopes to complete the sale of an industrial complex in Port Klang for RM14.5 million by the end of June this year.

Axis will make a net gain (after real property gains tax) of RM764,000 from the sale to freight services firm Freight Management Sdn Bhd.

It told Bursa Malaysia yesterday that the amount would be distributed to its unitholders this year at 20 sen a unit and also be used to reduce its gearing.

It was the right time to dispose of the property as it offered limited upside for future rental growth, Axis added.

By Business Times