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Tuesday, January 25, 2011

Increase in property and rental prices after facelift in Brickfields

Many business operators in Little India and other parts of Brickfields are likely to be edged out or forced to take a cut in their profits with an imminent increase in rental and property prices.

According to property consultants, realtors and valuers, the market was adjusting to the improved outlook Brickfields is now enjoying.

All along the price of property and rental were stagnant because Brickfields, though close to the city centre, was perceived as congested, dirty and predominantly Indian enclave with perennial traffic problems.

Property consultant agency PPC International Sdn Bhd executive director Thiruselvam Arumugam said with improved traffic flow, better infrastructure, cleaner environment and better-looking buildings the market was adjusting and this was reflected in rising property prices and rental.

He said the rental and property prices had been low for quite sometime and now the market was adjusting to reflect its true value.

“In other words the market is only making up for its lost time,” he said.

Citing the Palm Courts condominium as an example, he pointed out that before KL Sentral was built the price of a unit was between RM240,000 and RM250,000.

“But recently it has shot up to RM300,000 and it will likely go up to RM500,000,” he said.

Property valuer T. Nagalingam of Azmi & Co Shah Alam Sdn Bhd noted that foreign money had also helped boost property prices in Brickfields.

“Investors now see Brickfields in a positive light and forecast a better return on the investments,” he said.

Nagalingam said the present business operators, who are renting in Little India and other parts of Brickfields, would probably have to go somewhere else.

Since Little India took shape, many traders have complained that while their profits were dwindling due to lack of parking space fronting their shops, property owners were increasing the rental.

Little India Action Committee chairman S. Baktha, also a registered property agent, said many business operators had complained that their landlords had threatened to increase the rental once their tenancy agreement expired.

“Their businesses have been further affected by lack of parking space in front of their shops,” he said.

Sampoorna Curry House owner S Thilagavathy, 30, noted that the lack of parking was likely to keep away many customers and cut into her profits by at least 30%.

Another restaurant owner, M Prema, 40, who owns Seetharam Curry House, pointed out to lack of parking space as the main factor in the drop in her revenue.

Her business registered almost a 50% drop since parking bays were done away in the area.

Saradha Silks (M) Sdn Bhd owner P Loganathan, 45, attributed the rise in rental as the main concern of the business community in the area.

“There is talk that building owners may hike up rentals after Deepavali,” said Loganathan, who is also a tenant.

He claimed that he had learnt that building owners were planning to increase rental to RM30,000 for the ground floor, from the current RM10,000 once the tenancy agreements expired.

“I’m not sure how I’m going to deal with the increase,” said Loganathan, who claimed the move was attributed to the RM35mil facelift to the area to attract more tourists.

By The Star

Glomac buys land

GLOMAC’s wholly-owned unit, Glomac Alliance Sdn Bhd, has sealed a sale-and-purchase agreement with Score Option Sdn Bhd to buy 80ha of leasehold land in Puchong, Selangor, for RM77 million.

In a filing to Bursa Malaysia yesterday, Glomac said the acquisition was in line with its core strategy to buy suitable land in Klang Valley with strong potential for a prime new development.

By Business Times

Ninth Tune Hotel in Malaysia opens

KOTA BARU: Barely three years after the inception of Tune Hotels, a total of one million people have stayed in its 12 hotels locally and abroad, confirming that it is one of the fastest-growing hotel chains in the region.

Tune Hotels chief executive officer Mark Lankaster said the limited service model offers value for money.

“We always listen to our guests and strive to meet their needs and expectations.

“Recently, we removed the RM10.90 administration fee across our entire chain.

“Guests now only pay for the room,” Lankaster told reporters after the soft launch of the 12th Tune Hotel here on Sunday.

He added Tune Hotels enjoy a 95% occupancy rate on any given day.

The opening of the Kota Baru hotel brings Tune Hotel properties in Malaysia to nine, the last hotel was opened in Bintulu on Jan 3.

Three other Tune properties are located in Kuta and Legian in Bali and one in London.

Lankaster revealed that by the end of next year, a total of six hotels woud be built.

“The Kota Baru hotel completes our framework to cover the northern, southern, central, eastern and western regions of the country and from next year we would be concentrating on building hotels beyond Malaysian shores,” he said.

By The Star

Tune Hotels to expand chain

TUNE Hotels is confident of expanding its hotel chain to more than 40 in the country and abroad by the end of next year, group chief executive officer Mark Lankester said.

At least one hotel will be opened every month from September to add to the existing 12 under its name, including two in Bali and one in London.

Lankester said the new hotels would be coming up in Indonesia, the Philippines, Thailand, Australia and the United Kingdom, beside expanding locally.

"Locally, we have covered the central, northern, southern, eastern and western parts," he said after the soft launch of the latest Tune Hotels in Kota Baru on Sunday.

Lankester said it would invest substantially for the new hotels as the development cost for a hotel in the country averaged from RM15 million to RM20 million.

In London, he said, the cost could rise to RM70 million for a hotel.

On Tune Hotels Kota Baru, he said it cost the company RM20 million to develop the 173-room hotel which was completed in 11 months to usher in the New Year.

It was built in a partnership with property company HLK Group, which established HLK Ventures Sdn Bhd to exclusively develop the hotel.

"As our sister company AirAsia is doing well with its flights to Kota Baru, it is a natural extension for Tune Group to come to Kota Baru," Lankester said.

"The opening of Tune Hotels here is also an acknowledgement of the increasing importance of Kota Baru as a travel and tourist destination with vibrant commerce and business sectors."

Lankester said although the hotel chain was targetted at leisure travellers who accounted for about 70 per cent presently, it was drawing an increasing number of guests from the business sector.

"Business organisations need their people to travel all over the country but to keep down their costs, they are putting up at Tune Hotels," he said.

On a related note, Lankester said Tune Hotels had eliminated administration fees for room reservation across all of its hotels effective from January 5.

"As we open more hotels, we have become more cost efficient. We have found that the fees are no longer relevant and the savings will be passed on to our guests," he said.

By Business Times

Bina Puri looks to Mideast, Thailand for new jobs

Construction outfit Bina Puri Holdings Bhd hopes to maintain the rate of new contracts this year by securing RM2.5 billion worth of work.

Group managing director Tan Sri Datuk Tee Hock Seng said the group is leaning towards the Middle East and Thailand for new jobs this year.

This is because he does not expect major projects to be announced in Malaysia, apart from the RM40 billion mass rapid transit system.

Bina Puri anticipates more jobs in Saudi Arabia, where its government has announced new infrastructure projects worth US$60 billion (RM183.6 billion).

It won its first project in Saudi Arabia late last year, a RM5.7 million storm water pipeline project.
"Last year was an exceptionally good year for us with both the the Ampang light rail transit line extension and the new low-cost carrier terminal in Sepang coming on board at the same time," he said.

In 2010, the group secured projects worth RM2.5 billion.

Other projects it won are the Kuala Lumpur-Kuala Selangor Expressway privatisation job as well as building ramps and a main line bridge for the Eastern Dispersal Link in Johor.

In an interview with Business Times last week, Tee said Bina Puri has bid for building and infrastructure projects worth over RM2 billion, in Malaysia, Thailand, Brunei and the Middle East.

So far, it has won a RM62.8 million contract for structural and architectural works for Phase One of a condominium project in Thailand.

By Business Times