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Wednesday, January 19, 2011

Property transactions may hit RM100bil

KUALA LUMPUR: A total of 342,179 property transactions worth RM96.77bil were recorded between January and November last year, which means the full year's transactions could reach the RM100bil mark, said Knight Frank Malaysia managing director Eric Ooi.

Ooi was commenting on figures provided by the Valuation & Property Services Department director general Datuk Abdullah Thalith Md Thani at the Property Market Outlook for 2011 yesterday.

“This is the first time transactions value has reached this figure,” said Ooi at the event organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia.

Eric Ooi ... ‘This is the first time transactions value has reached this figure

In light of this, and considering Malaysians penchant for property investments, Ooi said it was unlikely that property values would fall. It may not rise as much as it did last year, but the uptrend is there.

Ooi, together with Henry Butcher chief operating officer Tang Chee Meng, said property value rose between 30% and 40% last year.

“This is the first time property went up so much,” Tang said, adding that he had never seen such record growth for the property market in 30 years.

“The condominium market saw a price rise of between 60% and 100% between 2003 and 2008. This pales in comparison to the rise in value of landed units which rose as high as 40% in just one year. If one were to average out the rise in condominium prices, it is about 20% a year,” Tang said.

Earlier, in his overview of the Malaysian economy and the Malaysian property market, director general of Valuation & Property Services Department Abdullah Thalith said it was very significant that the transaction volume between the 11-month period increased 12.2% year-on-year, but the value of transactions increased at a higher rate of 35% from RM71.67bil to RM96.77bil.

“The recovery of the Malaysian economy has reinvigorated the overall property market,” he said.

In terms of lending in the broad property sector, the purchase of residential property took up the lion share of bank loan, at 58.8% compared with the purchase of non-residential property, at 22.1%. Construction took up 9.6%.

“Credit expansion for the broad property sector in the banking system increased from RM342.09bil as at the end of September 2009 to RM391.25bil as at end-September 2010,” he said.

“This means the residential property sub-sector remained the main mover of the property market,” he said. In this residential market, transactions in Kuala Lumpur recorded a growth of 8.2%, Selangor 7.2%, Johor 3.6% and Penang (island) 9.7%.

Terraced houses continued to dominate the market, especially in Selangor with 27,165 transactions, Johor with 12,555 transactions and Penang 4,358 transactions.

The city of Kuala Lumpur recorded more condominiums changing hands, 10,333 units versus terraced housing at 3,756 units.

By The Star

Property deals this year to breach RM100b

However, the growth of Malaysia property sector may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties

PROPERTY transactions will surpass RM100 billion this year but the sector will not enjoy 35 per cent growth as it did last year, said a government official.

Growth may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties resulting from government initiatives under the 2011 Budget.

Datuk Abdullah Thalith Md Thani, director-general of the Valuation and Property Services Department in the Ministry of Finance, said the volume of properties transacted will, however, grow by double digits to more than 350,000.

Between January and November 2010, there were a total of 342,179 properties transacted, worth RM96.78 billion.

Abdullah Thalith thinks there will be more than RM100 million in sales recorded in December, breaching RM100 billion for the whole year.

The RM100 billion mark, a record high for Malaysian properties, would be 35 per cent more than 2009.

In 1998, the value of properties transacted was about RM60 billion, with 5 to 10 per cent growth per annum.

Abdullah Thalith told reporters yesterday in Kuala Lumpur at the 2011 property market outlook summit that the positive economic outlook and the Economic Transformation Programme will drive growth this year.

He said the prime movers will be the redevelopment of the Sungai Besi land, Batu Cantonment army base, Rubber Research Institute land in Sungai Buloh, Matrade project by Naza Group, the 100-storey tower by Permodalan Nasional Bhd and the Mass Rapid Transit project.

"If all these projects can start this year, it will uplift the market. We expect more people to buy low to medium-end properties. We also expect movements in the luxury segment, commercial and industrial," he said.

By Business Times

TILB focuses on mainland Penang projects

KUALA LUMPUR: Newly-listed Tambun Indah Land Bhd (TILB) expects to complete the first of its seven ongoing property projects on mainland Penang in the first quarter of this year.

The company will complete the second phase of its RM79mil Juru Heights bungalow project by March, according to managing director Teh Kiak Seng.

“We have seven projects ongoing this year with a GDV (gross development value) of RM530mil. They include medium-cost apartments and mid-range housing developments,” he said after the listing ceremony of TILB on the Main Market of Bursa Malaysia yesterday.

Going forward, Teh said TILB would continue to develop projects on mainland Penang (as opposed to the island) as properties there were more affordable.

Teh Kiak Seng (second from left) and Tambun Indah Land directors monitoring the company’s share price on Tuesday.

“We are getting more purchasers coming to the mainland because they can't afford prices on the island,” he said, adding that it would be more viable for TILB to tap the mainland property market.

“The Penang state population is about 1.6 million. The island has 700,000 people. There are more people staying on the mainland and it is also attracting a lot of FDI (foreign direct investments),” Teh said.

He cited, as an example, Japan-based printed circuit board maker Ibiden Co Ltd, which has invested in a RM1bil plant at Penang Science Park. He also mentioned Nasdaq-listed Rubicon Technology Inc, a leading global light-emitting diode (LED) manufacturer, as well as US-based Honeywell Aerospace, a leading provider of avionics and electronics, which have also invested substantially in the mainland.

“Connectivity (in Penang) is also being improved with the construction of the second Penang bridge,” Teh said, adding that the Federal Government had big plans to develop Butterworth.

“Expansion at Butterworth Port has just been completed. The main railway station is also in Butterworth. All of this will create opportunities such as new jobs and attract more people, who will need to buy houses to be closer to the job market.”

Teh also said the Penang mainland property market was more active and had better growth prospects.

“During the recession in 2009, the Penang island property market grew by 0.3%, but mainland Penang grew by 9.3%,” he said.

“Also, from 2002 to 2010, the island housing market grew by 4%, but mainland grew by 5.4%.”

According to Teh, TILB has a land bank of close to 300 acres, all located on the mainland.

“We have an option of another hundred acres. We move very fast, we buy land and develop. We don't buy land to keep as it's too costly. This has been our business model since the beginning.”

TILB was negotiating with land owners in Penang to acquire land for projects in 2012 and “actively seeking” land in the Klang Valley, he said, adding: “We've seen some land in the Klang Valley but we haven't bought any. We're still looking but the project must be viable.”

On another note, Teh said the company had set a dividend payout policy of 40% to 60% of its annual net profit.

TILB recorded a net profit of RM25.37mil for its financial year 2010.

The company opened at 80 sen and closed at 80.5 sen, a 10.5 sen premium over its issue price of 70 sen. A total of 41.5 million shares were traded, making it the second most active counter of the day.

By The Star

Bolton eyeing 44ha site in Penang

PROPERTY developer Bolton Bhd is looking to expand its landbank in Penang with a potential acquisition in Teluk Kumbar this year.

Bolton executive chairman Datuk Azman Yahya yesterday said it was hopeful to conclude the proposed acquisition of the 44ha site within two to three months.

The land on the south-western end of Penang island is estimated to cost Bolton RM150 million, Azman added.

"Our maiden project in Penang - Surin, has been encouraging and we are now looking at expanding our landbank on the island via acquisitions and joint ventures," he told reporters after a topping out ceremony for the Surin Tower B project located in Tanjung Bungah.
Surin is a two-block 28-storey luxury condominium project which is built on a freehold parcel of elevated land and carries a development value of RM199 million.

Of the project's 390 units, about 77 per cent had already been sold out and about 30 per cent to 35 per cent of the buyers were foreign, Azman said.

The units, which were sold at prices ranging from RM345,998 to RM1.2 million, offer amenities such as an infinity pool, rooftop garden, two covered carpark bays per unit, three tier security, a barbeque area and sky decks.

On the planned purchase of the Teluk Kumbar land, Azman said Bolton was looking at building landed property units, along with apartments in a gated community.

"Our target investors for this proposed project would be locals," he added, saying that Bolton remains on the lookout to buy land in Tanjung Bungah.

"We remain convinced of Penang's vibrancy and growth prospects and we are actively looking for development opportunities.

"The residential market remains buoyant and this is a segment which we want to focus on," Azman said.

In the Klang Valley, he said the company will soon unveil a block of luxury serviced residences at Jalan Bukit Ceylon, an exclusive gated community in Ukay Perdana, and the 51 Gurney development.

The latter project is touted as Malaysia's first and only super luxurious condominium which comes complete with spacious driveway on every floor and a car park within every unit.

By Business Times

Bina Puri wins RM62.8m Thai project

Bina Puri Holdings Bhd''s associate, Bina Puri (Thailand) Ltd (BPTL), has secured a 626 million baht (approximately RM62.76 million) project to undertake structural and architectural works for phase one of Phahonyothin Park condominium in Bangkok, Thailand.

"Thailand remains one of our key markets overseas. To date, we have secured projects exceeding RM1.5 billion in Thailand," said Group Managing Director Tan Sri Tee Hock Seng in a statement today.

He said the awarding of the project proved the company's project and management capabilities in delivering results and its continued acceptance in this region.

"We will continue to strengthen our reputation in Thailand and are confident of clinching more projects there," he added.

The project is a joint venture between BPTL and Dimara (Thailand) Ltd and is expected to be completed in 15 months.

The company said the project would contribute positively to group earnings for the financial year ending Dec 31, 2011.

Inclusive of this project, Bina Puri's outstanding orderbook stands at RM2.5 billion, which will sustain the company's earnings for the next two years.

By Bernama

AmResearch maintains buy on SP Setia

KUALA LUMPUR: AmResearch maintains its BUY rating on SP Setia and raises its fair value from RM6.80 per share to RM7.10 per share based on an unchanged 5% discount to its revised fully diluted (FD) net asset value (NAV) of RM7.46.

“We lifted our FD NAV from RM7.15 to RM7.46 to account for the estimated accretion to assets value from its landbanking deal with the Ministry of Health (MOH). SP Setia has been given the right to develop 40 acres of prime land in Bangsar in return for a new health and research complex on a 55-acre site in Bandar Setia Alam,” said AmResearch

Based on AmResearch's conservative estimated plot ratio of 5 times (x) and an efficiency factor of 70%, the net saleable area is about 6.1msf. Assuming an average selling price of RM1,000psf, the gross development value is about RM6.1bil.

Compared to status quo, AmResearch said this land swap is accretive because the Bangsar site has high development potential and ready end-user demand. And, the relocation of the new research complex would accelerate the maturity of Setia City, the commercial precinct in Setia Alam.

“But the deal fell short of consensus expectations. SP Setia would only have a 50% stake. The joint venture company would also have to distribute 20% of its profits to the MOH,” “SP Setia also spooked the market by announcing a surprise placement of up to 15% (153mil) of its paid-up capital to raise funds for its existing projects and future' expansion,” said AmResearch.

AmResearch said the market would need to digest the immediate dilution risk from the proposed placement and the back-ended accretion to assets value from the land swap. After the sell down yesterday, this trade-off is already being priced-in.

Hence, the risk reward profile is turning more favourable starting from a lower entry point because the fundamental story is intact, we believe. For a start, it is poised to deliver at least RM3bil in sales this year, given maiden contributions from the prolific KL Eco City.

Given a recapitalised balance sheet (post the proposed share placement), SP Setia must again demonstrate its uncanny ability to grow acquisitions.

The litmus test though is how prolific and significant its next land deal is going to drive NAV growth, considering its share capital would have expanded by 15% post the share placement.

By The Star

Axis-REIT records RM16m profit in Q4

AXIS REIT Managers Bhd has reaped RM16.16 million profit in its fourth quarter ended December 2010 and plans to distribute 5.25 sen a unit to investors.

"Last year, we saw the highest gain in fair value of investment properties for a single year since the listing of the trust," said chief executive officer Stewart Labrooy. He said the company revalued 14 of its stable properties.

"It has led to an increase in the net asset value of the trust to close at RM2.009 a unit compared with RM1.842, a year ago," he told reporters at a briefing in Kuala Lumpur yesterday.

In the fourth quarter of 2010, Axis-REIT bought three more properties, namely Tesco Hypermarket, Axis PDI Centre and Axis Technology Centre. It also concluded the purchase of two IDS warehouses in Seberang Prai, Penang.

Following these acquisitions, Axis-REIT now owns 26 properties. Its net asset value rose to RM1.18 billion in 2010 from RM884.96 million in 2009.

Two days ago, Axis-REIT said it will sell an industrial complex in Port Klang for RM14.5 million by June 2011.

"We need to maintain growth by culling smaller assets where the returns have stagnated. We will bring in assets that have capital gain potentials," said Labrooy.

"We'll gain RM764,000 from the sale of industrial complex in Port Klang and this will be chanelled back to unitholders," he added.

On outlook for 2011, he said Axis-REIT is looking to buy five more warehouses in Johor and the Klang Valley and two more office blocks in Cyberjaya. So far, the company has set aside RM365 million for these acquisitions.

By Business Times

Jetson Development buys land in Penang

KUMPULAN Jetson Bhd’s 51 per cent-owned subsidiary, Jetson Development Sdn Bhd, is buying three plots of first grade freehold land in Penang from Malaysia Building Society Bhd for RM14 million.

The company said the purchase fits into its strategy to implement boutique developments in Penang, which will appeal to the niche local and foreign property buyers, who demand luxury and secluded prestigious address.

By Business Times

Sycal Ventures unit signs property JV

Sycal Ventures Bhd's wholly-owned unit, Sycal Properties Sdn Bhd, has signed a joint venture agreement with Global Net Communication Sdn Bhd.

In a filing to Bursa Malaysia today, Sycal said the companies aimed to jointly develop three plots of land in Kuala Lumpur into a high-end residential villas with estimated gross development value of RM70 million.

It said the development would contribute positively to the construction order book of Sycal Group.

By Bernama