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Wednesday, January 26, 2011

Mah Sing eyes 30pc revenue from overseas

PROPERTY group Mah Sing Group Bhd said it hopes overseas ventures will be able to bring in 30 per cent of its total revenue within five years.

Mah Sing is aiming to launch its first project in China this year and is also working towards participating in property development activities in Vietnam, Singapore and Australia.

"China and Vietnam have a high population demand, while for Singapore and Australia, we can offer the type of products they need based on our experience over the years," senior manager corporate communication Lyanna Tew said in Kuala Lumpur.

She said the group is expected to do well overseas, given its large network of consultants and architects.
Yesterday, Mah Sing held a signing ceremony with 20 of its future tenants at its first retail development project, Southgate Sungai Besi, which will be officially opened in June this year.

Southgate is an integrated commercial hub comprising three retail office blocks and corporate blocks with a total new lettable area of 600,000 sq ft. In 2009, it sold a seven-storey Apex Tower in Southgate to Taiwanese Chen Ho-Yuan for RM63.1 million.

Among tenants who took part in the signing ceremony include food and beverage outlet Subway, Aunty Anne's and Pappa Roti and fashion house Nichii, which took up 32,000 sq ft of retail shop lot.

This year, the property group is projecting between RM2 billion and RM2.5 billion in sales, boosted by project launch, with a gross development value (GDV) of between RM2.5 billion and RM3 billion.

Two highly anticipated projects are the MCity in Jalan Ampang and Icon City located in Petaling Jaya.

Currently, Mah Sing has 33 ongoing projects with a GDV of RM9.4 billion, which should last it over the next seven years.

By Business Times

Mah Sing targets 30% sales from overseas ops

KUALA LUMPUR: Property developer Mah Sing Group Bhd is targeting to get 30% of its revenue from overseas projects in five years.

“In five years we hope that 30% from our sales will come from the overseas projects,” its senior manager for corporate communications, Lyanna Tew told reporters after the signing of agreement with the tenants of its Southgate commercial centre project here, yesterday.

Tew said the remaining 70% revenue contribution would come from the company’s property projects in the Klang Valley, Penang and Johor.

As for the company’s overseas expansion plan, she said it was looking at China, Vietnam, Indonesia, Singapore and Australia.

According to Tew, China and Vietnam are good markets due their population and there is simply such a big demand for properties over there.

“In other places like Singapore and Australia, we believe that we will be able to provide the type of products that will do well even though their market is pretty mature,” she said.

She added that the company also expected to do well overseas because of its network of consultants and partners.

By Bernama

At RM77mil for 200 acres leasehold land in Puchong, analysts say it’s a steal

PETALING JAYA: Glomac Bhd's proposed acquisition of leasehold land in Puchong from Score Option Sdn Bhd (SOSB) will be advantageous to the property developer for its attractive price and strategic location, analysts said.

At RM77mil for 200 acres, the effective cost of the land worked out to be RM8.84 per sq ft, which was significantly lower than the range of transacted or asking prices of RM32 to RM48 psf in Puchong.

“The purchase price is deemed cheap,” TA Research said in its report.

Located near the established commercial hub of the town with the IOI Mall and Tesco Store in the vicinity, it is basically an extension to Glomac's present development, called the Lakeside Residences in Puchong.

“Glomac can now strategise any land enhancement activities to improve the value of its enlarged landbank,” TA Research said.

The Lakeside Residences is a joint-venture development between Glomac and SOSB on a 90-acre land to be acquired.

The project, comprising 537 units of double-storey terraced houses and 100 units of semi-detached houses, was launched in 2005 with a total gross development value (GDV) of RM250mil.

“What's positive is that property prices have increased significantly since the launch of the first phase of Lakeside Residence,” ECM Libra said in its report, comparing the initial launch price of about RM300,000 per unit in 2005 for terraced houses versus the current asking price of about RM440,000.

Puchong is one of the property hot spots in the Klang Valley, as the area is easily accessible via Lebuhraya Damansara-Puchong, the Shah Alam Expressway as well as the Bukit Jalil highway.

With the land acquisition, Glomac's future earnings capability would be enhanced, as the property developer could now extend its presence in Puchong and gain from the fast-growing property market there, analysts said.

“The acquisition would be accretive to the company's net asset value (NAV) and earnings,” AmResearch said in a recent report.

On average, some analysts were looking at a potential increase of 25% for the company's NAV and more than 20% in the company's earnings in the financial year ending April 30, 2013.

However, Glomac had yet to reveal details such as the GDV and timeline for its “enlarged” Puchong project. Following the proposed land acquisition, Glomac's existing masterplan for the area would likely undergo significant amendment, according to some analysts.

Analysts in general viewed Glomac favourably for its strong earnings visibility with unbilled sales of almost RM600mil.

They also expect further news flow on land acquisition by the company as part of its aggressive expansion plan.

Glomac reported a net profit increase of 71% year-on-year (yoy) to RM15.88mil for the second quarter ended Oct 31, 2010 on revenue of RM140.89mil, which represented an increase of 86% yoy.

Over the next 12 months, the company would be launching projects valued in excess of RM1bil. These include a RM250mil apartment project in Mutiara Damansara, a RM145mil retail mall in Glomac Damansara and the RM400mil Glomac Utama mixed development in Petaling Jaya.

By The Star

Sunway REIT posts RM356m interim profit

Sunway Real Estate Investment Trust posted RM355.9 million pre-tax profit for the six months ended Dec 31, 2010, on the back of RM157.778 million revenue.

For the second quarter, the company registered RM45.2 million pre-tax profit on the back of RM85.333 million revenue.

In a filing to Bursa Malaysia, it said the better performance for the current quarter was contributed by the commencement of new tenancy terms pursuant to renewals at the Sunway Pyramid Shopping Mall about one million square feet of net lettable area achieved an average increase in rental rates of 17.1 per cent for the three-year term.

The stronger performance at Sunway Resort Hotel & Spa and Pyramid Tower Hotel during year-end holiday season further contributed to improved results for the current quarter.

On the prospect, it said, visitorships to Sunway Pyramid Shopping Mall registered strong quarter-on-quarter growth of 9.7 per cent, whilst Sunway Carnival Shopping Mall recorded moderate growth of 2.9 per cent due to the year-end mega sales campaign and festive and school holidays.

It said occupancy remain strong with Sunway Pyramid at 98 per cent, Sunway Carnival at 93 per cent and Suncity Ipoh Hypermarket at 100 per cent.

The Sunway REIT Management Sdn Bhd believes the Sunway REIT retail properties, especially Sunway Pyramid Shopping Mall, will be able to enjoy another year of solid performance in tandem with the expectation of continued robust domestic consumption, pursuit of lifestyle trends and thriving Sunway Integrated Resort City.

As for the hotel market, it said the Sunway REIT's hotel properties would continue to perform well in line with the positive outlook for the industry.

In the quarter under review, the Sunway Resort Hotel & Spa and Pyramid Tower Hotel enjoyed strong occupancy (Sunway Resort Hotel & Spa: 70.8 per cent; Pyramid Tower Hotel: 86.3 per cent) and average daily rates (Sunway Resort Hotel & Spa: RM407; Pyramid Tower Hotel: RM258) in conjunction with the year-end school holidays and MICE (meetings, incentives, conferences and exhibitions).

Meanwhile, Sunway Hotel Seberang Jaya, a four-star corporate hotel, enjoyed steady performance as the domestic and global economy recover.

The office market, occupancy at both the Sunway REIT’s office properties, has been stable at 99.5 per cent for Menara Sunway and 97.0 per cent at Sunway Tower.

The occupancy for Menara Sunway and Sunway Tower is expected to remain stable and the rental rates are expected to increase moderately for the renewals in 2011.

By Bernama

HK has world's least affordable housing: survey

Hong Kong has the world's least affordable housing, according to an international survey, a finding that is sure to stoke anger among many residents already fed up with runaway property prices.

Buying a home in the Asian financial hub, synonymous with its super-rich tycoons and glittering financial district, costs more than 11 times the city's average salary, outpacing London, New York and other major cities, US-based consulting firm Demographia said in a report released Monday.

Sydney was ranked the second-least affordable major city, followed by Vancouver, and Melbourne.

The 7th Annual International Housing Affordability Survey compared home prices and household income in 325 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.

It was the first time Hong Kong has been included in the survey.Hong Kong's median home prices in the third quarter of 2010 averaged HK$2.58 million ($330,939), about 11.4 times the median household annual income of HK$225,400.

The most affordable homes in the survey were all in the US and Canada, with Saginaw in the US state of Michigan being the most affordable city, where the median house price was $61,400.

Atlanta was the most affordable major city, where the median house price was $129,400.Rising property prices have become a major concern for Hong Kong's population of seven million.

Worries about a property bubble have prompted Hong Kong's government to announce a series of cooling measures, including boosting land supply and new stamp duties to keep out hot money.

Home prices in Hong Kong have risen 50 percent over the past two years, due to low interest rates, a robust economy and an influx of buyers from mainland China, who account for a big portion of purchases, especially for luxury homes.

Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said he expected home prices to continue to surge in 2011, but he questioned the Demographia survey's methodology.

"The survey does not take into account more affordable housing in Hong Kong, like government housing," he said.


US home prices still falling in November

US home prices dropped in November for the fifth month straight after appearing to have bottomed out from mid-2009 to mid-2010, according to the monthly S&P/Case-Shiller index released Tuesday.

The index, which maps prices in 20 key urban areas, fell 0.5 percent from October on a seasonally adjusted basis, after a 1.0 percent fall the previous month.

It was also off 1.6 percent from the year-earlier figure.All but four of the 20 metropolitan areas covered in the index fell.

Prices rose in Washington, San Diego, California; and Charlotte, North Carolina, while in hard-hit Las Vegas they were unchanged.

The five-month fall in the index represents a clear return to bearish sentiment in the market after a slow but steady rise from the May 2009 low through May 2010, according to S&P.

The seasonally adjusted index peaked in April 2006 and has since fallen in all but 13 months.

The November level was just 1.2 percent higher than the 90-month low struck in May 2009.S&P's David Blitzer said the data suggests "that a double-dip could be confirmed before spring."

Certainly (with) eight cities setting new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices," he said in a statement.

Economists at Barclays Capital Research said the November fall was smaller than expected.

"We expect softness to persist in the near term as home prices continue to face headwinds from the large pipeline of foreclosures entering the market," they said in a statement.

"However, we expect this to be a gradual process with some of the decline offset by increased housing demand."Inna Mufteeva, an economist at Natixis, echoed that view."

In the context of job market sluggish revival and continuous deleveraging of households, real estate remains the area of risk for the current economic recovery," Mufteeva said.

"Indeed, still-numerous foreclosures should keep home prices subdued in the medium term despite some improvement on the real estate market."