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Thursday, February 17, 2011

Will an MRT affect the price of your properties?

File picture shows MRT and surrounding properties. - The Star

PETALING JAYA: While some property consultants and analysts have been bullish on the overall impact of the mass rapid transit (MRT) on property prices, another group of property consultants has reservations about the blanket “price hike” touted by their counterparts and other parties.

This second group of property consultants, together with sources familiar with the project, have an alternative view.

Their conclusion is: not all properties affected by the Sg Buloh-Kajang line will have a positive impact. In fact, there will be properties that will have an adverse impact.

A source who declined to be named said: “If you can hear it, see it, feel the vibration, but cannot access it, your property will be negatively impacted. You want it (MRT) close, but not too close.”

The 50km line that begins from Sg Buloh will splice through the monorail and light rail transit (LRT) in the city and head south towards Kajang, affecting a total 91,900 properties along the way. Of these, 82,700 units, or 90%, will be residential units with a total population of about 341,000. About 40% of these are located in the Sg Buloh-Semantan area, and 46% in the Cheras-Kajang area.

It will be the country's largest infrastructure project, reportedly costing RM36.6bil.

A source said: “Logically speaking, people should not oppose the MRT or any form of public transport. But, if it is going to affect your standard of living, either by the noise, vibration or visual impact, then it is logical for them to oppose it.

“Imagine this: you live in a quiet, serene area for years, and all of a sudden you have the MRT line running in front or behind your property. Your serenity is broken, your standard of living is negatively impacted, and so will the value of your property.”

The noise level will be tremendous. The MRT begins from 6am to midnight. In time to come, the MRT will run every 1.8 minutes.

The affected areas are Section 4 and 6 of Kota Damansara; Pelangi Damansara condominium; Taman Tun Dr Ismail; Damansara Utama; Section 17/52 Petaling Jaya; Bukit Bandaraya; Jalan Bukit Ledang; Bukit Damansara; Taman Desa Aman; Taman Connaught; and Taman Koperasi.

According to the executive summary posted on the Department of Environment website, as the line enters Kota Damansara, which is predominantly residential and remains so until TTDI, the line visual, vibration and noise level will be significant to properties in that area. And as the line enters the residential area of Cheras, the visual impact, noise and vibration level will also impact negatively on the property values there.

“Most of the measured noise levels exceeded the recommended limit for suburban residential area and urban residential area,” the executive summary said.

Reports that property prices would go up by between 100% and 500% were “too bullish”, said the group of property consultants. A property developer who has several projects in Kota Damansara said the visual impact, noise and vibration would affect values negatively.

Last week, the Land Public Transport Commission (LPTC) and Prasarana exhibited the alignment at Mid-Valley Megamall. They are seeking a location in Petaling Jaya to exhibit the alignment.

The MRT route will be displayed for three months at local authority offices in the Klang Valley, in Bangsar LRT station and at LPTC in KL Sentral. The environmental impact assessment will be displayed for one month from Feb 14 to March 14.

By The Star

MRCB to develop luxurious high-rise project with GDV of RM300mil

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) plans to develop a luxurious high-rise project with an estimated gross development value (GDV)of RM300mil in Jalan Kia Peng here.

In a statement today, it said the group had purchased a one-acre tract of prime land for the project on Jan 7.

The project, slated to be developed over three years would be set alongside established, luxurious service residences within the general neighbourhood of the Kuala Lumpur City Centre.

Chief executive officer Datuk Mohamed Razeek Hussain said although the land status is leasehold, the prime location and scarcity of land at this posh area as well as its proximity to numerous world-class facilities and amenities would make the new development ideal for luxury residences.

“Our experienced in mix commercial urban development involving high-rise residential towers in Kuala Lumpur Sentral and our constant access to market trends will enable us to inject new ideas that will ensure a project that is specially designed and will stand out in KLCC,” he said.

By The Star

Metro Kajang looks to grow its plantation business

KAJANG: Diversified group Metro Kajang Holdings Bhd, which currently has its core business in property development, is aggressively looking to grow its plantation division into another core business.

Metro Kajang other current businesses are trading, manufacturing, property investment and integrated livestock processing.

Executive Chairman Datuk Alex Chen said for the financial year ended Sept 31, 2010 (FY10), property development represented 62% of the company's turnover, while the balance 38% was spread between the other divisions.

Chen said, while property development remains Metro Kajang's core business the company expects its oil palm plantation division - which is still a fairly new business, to contribute more significantly to revenue in the coming years.

In Jan 2008, the company acquired 16,000 hectares in East Kalimantan, Indonesia via its subsidiary, PT Kam, in preparation for its second core business.

“We expect the plantation division to contribute about 20% to total revenue in FY12 onwards,” he said at a media briefing on Metro Kajang's current and upcoming projects.

On the property division, he said Metro Kajang ongoing and new projects were in Kajang, Semenyih, Bangsar and Kuala Lumpur. “We expect to generate a total gross development value (GDV) of RM2.1bil in the next five years or RM3bil over the next seven years from these projects,” he said.

He said in FY10/FY11 new property projects should amount to a GDV of RM586mil and expect more property projects to be launched the following years.

Within Kajang and Semenyih the company has about 800 acres landbank.

Metro Kajang's ongoing property projects include Kajang 2, its flagship integrated urban lifestyle township development covering 270 acres of freehold land in Kajang.

He said Kajang 2 would benefit from the rail transit extension and KTM network. Phase 1 of Kajang 2 slated to be launched first quarter this year has a GDV of RM157mil.

The selling price of two-storey terrace and semi-detached houses under Phase 1 range from RM429,000 to RM889,000.

Future phases of Kajang 2 would consists of residential and commercial units and has a GDV of RM1.25bil over eight years.

In a filing to Bursa Malaysia yesterday, Metro Kajang had proposed to implement a 1-for-10 bonus issue of 24.05 million new shares of RM1 each.

The company said the proposed bonus issue would be implemented by capitalising RM24mil on its retained earnings and it aims to maintain a minimum 5% per share dividend in FY11.

By The Star

Metro Kajang sees gem in plantation business

Metro Kajang's executive chairman Datuk Alex Chen expects contribution from plantation to exceed 30 per cent from 2013 onwards, instead of zero now.

PROPERTY developer Metro Kajang Holdings Bhd is beefing up its plantation business so it could account for a fifth of its earnings in 2012, its chief said.

Metro Kajang ventured into plantation in 2007 when palm oil prices were on the rise.

It bought 95 per cent of PT Khaleda Agroprima Malindo Plantation and is involved in the cultivation of oil palms and production of crude palm oil.

PT Khaleda owns 15,942ha of plantation land in east Kalimantan and 94 per cent has been planted as at February this year.
Executive chairman Datuk Alex Chen said he expects contribution from plantation to exceed 30 per cent from 2013 onwards, instead of zero now.

Currently, a bulk of the company's earnings come from property development. The rest is from property investment, integrated livestock processing, manufacturing and trading of building materials.

Chen said the fresh fruit bunch (FFB) output is targeted at above 10 tonnes per hectare in the first year, and 30 tonnes per hectare upon full maturity in five to six years.

Metro Kajang is spending RM42 million to set up a 60-tonnes a day mill near the plantation by this September. It will upgrade the mill to produce 90 tonnes daily by 2013 for some RM15 million more, he said.

Chen said going forward, Metro Kajang will focus on plantation and property development.

"We may raise capital through borrowings or a corporate exercise to buy land for our property and plantation divisions when the need arises.

"Plantation is a rising jewel for Metro Kajang. We are very ambitious for growth but will be cautious in any investment that we make," Chen said.

At a media briefing yesterday in Kajang, Selangor, Chen said it is looking to buy 20,000ha of plantation land from a local land owner in East Kalimantan for an undisclosed amount.

Chen, who is not new to plantation, having been in the business some 20 years ago, said Metro Kajang may buy rivals or merge with other plantation firms when the opportunity arises.

On property development, the company has RM3 billion worth of properties in its bag, which it is launching in phases until 2015.

The properties, comprising high-end landed residential and high-rise apartments as well as shops, are located in Kajang, Semenyih, Desa Melawati and Bangsar.

By Business Times

Plantation and property sectors boost IOI results

PETALING JAYA: IOI Corp Bhd's net profit rose 12.8% to RM520.2mil in the second quarter ended Dec 31, 2010 compared with RM461.2mil in the previous corresponding period mainly on higher contribution from its plantation and property divisions.

Revenue for the second quarter stood at RM3.97bil, which was 29.7% higher than RM3.06bil posted in the same period last year.

The company proposed an interim single-tier dividend of 80%, or 8 sen per ordinary share of 10 sen each, which is not taxable in the hands of the shareholders, be declared in respect of the financial year ending June 30, 2011.

In a filing with Bursa Malaysia, IOI said the plantation segment reported a 14% increase in operating profit to RM363.7mil for the second quarter compared with RM319. 9mil previously.

“The higher profit is mainly due to higher crude palm oil (CPO) and palm kernel prices realised. Average CPO price realised for second quarter in this financial year (FY11) is RM2,800 per tonne comp ared with RM2,225 per tonne for the second quarter of FY10,” it said, adding that the average palm kernel price realised for the second quarter o f FY11 was RM1,979 per tonne compared with RM1,089 per tonne previously.

It said the higher operating profit for property development and investment was mainly due to gains recognised on disposal of investment properties amounting to about RM61mil during the second quarter.

“Despite the higher profits achieved in refining activities, the resource-based manufacturing segment recorded lower profits mainly due to fair value losses on the adoption of FRS 139,” it said.

During the second quarter, the total fair value losses on derivative contracts recognised were about RM73mil.

For the first six months ended Dec 31, 2010, IOI's net profit jumped 8.4% to RM1.02bil from RM939.6mil in the same period last year. Its revenue was RM7.49bil, which was 18.2% higher th an RM6.34bil previously. IOI said the group was expected to perform satisfactorily in the current financial year underpinned by strong palm oil and palm kernel prices and a resilient property market.

CIMB Research said at 40% of its full-year forecast and 42% of consensus projections, IOI's core net profit for the firs t six months was broadly in line as it expected better secondhalf earnings.

“The second-quarter resourcebased earnings missed our forecast because of RM73mil fair value losses on derivative contracts following the adoption of FRS 139 in the current year. However, this was offset by a RM61mil gain on the disposal of investment properties,” the research house said.

It said the second-quarter results also included a RM20.6mil loss on foreign-denominated debts, which was a reversal from a gain of RM159.7mil in first quarter.

An analyst told StarBiz that IOI's results for the quarter under review were within market expectation and the group was expected to post better results in the second half.

“The group is expected to do well in the second half given the higher CPO price as well as manufacturing earnings, particularly a stronger earnings from downstream business. The current CPO price is over RM3,000 per tonne, which is higher than RM2,700-plus per tonne realised in the first half,” the analyst said.

By The Star