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Wednesday, June 29, 2011

UEM Land to leverage on Sunrise expertise and S’pore infrastructure

Good linkage: The future development’s proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible. — AFP

PETALING JAYA: The coming together of Khazanah Nasional Bhd and Temasek Holdings to develop RM30bil worth of real estate projects in Singapore and Iskandar Malaysia will help UEM Land Holdings Bhd make a great leap forward, both financially and in terms of branding, say analysts.

The tie-up also puts into focus why UEM Land launched an RM1.4bil takeover of property developer Sunrise Bhd, which was completed early this year.

“We believe UEM Land will be able to leverage on Sunrise's expertise in lifestyle integrated developments to take on the proposed developments. As such, Sunrise will be taking the lead on behalf of UEM Land in undertaking these development projects,” said an OSK Research report.

UEM is among the top landowners in Iskandar Malaysia, with 1,300 acres of development land in the southern economic corridor. Among the several economic corridors spearheaded by the Government, Iskandar Malaysia remains the most upbeat and vibrant. In many ways, according to analysts, the alliance of the two government investment holding companies is expected to be a win-win proposition for both sides.

As a result of the Khazanah-Temasek joint venture (JV), UEM Land, together with Mapletree Investments Pte Ltd, have been appointed to oversee the marketing and development of four parcels of land at Marina South in Singapore.

UEM Land is the property arm of Khazanah, while Mapletree Investments is one of Temasek's two real estate portfolio companies. The other Temasek property company is CapitaLand group.

The planned mixed-use development on the 2.62ha white site at Marina South would comprise two office towers with ancillary retail and two blocks of residential towers with a combined gross floor area (GFA) of 341,000 sq m, a statement from the Mapletree website said.

Located on adjoining sites behind the Marina Bay Financial Centre in the new financial and business cluster of Downtown Marina Bay, the development will be positioned between the proposed linear park and a major public open space above the Marina Bay MRT station. Its proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible.

Construction works are expected to commence in June 2012 with completion estimated in mid-2016.

At the same time, UEM Land will work with CapitaLand to oversee the Ophir-Rochor project in Singapore, located between the Kampong Glam Historic District and the Beach Road Conservation Area, in a new growth area envisioned to become a 24/7 mixed-use cluster. Like the Marina South parcels, the Ophir-Rochor parcels also have excellent connectivity.

By virtue of having Khazanah as an ultimate controlling shareholder, UEM Land (as with both Mapletree and CapitaLand in relation to Temasek) will be playing a huge role in this JV.

Sunrise, with its expertise and tangible portfolio of high-rise and high-end condominium in Mont'Kiara, will also have a huge role to play.

Hong Leong Research said: “UEM Land's business model is primarily a two-pronged strategy of developing townships and niche projects townships for stable income, complemented by niche projects to achieve enchanced growth and market branding. The bulk of its land is in Johor.”

With Khazanah's JV, UEM Land's opportunities have now broadened to include Singapore, where real estate is hot.

A UEM source said the success of Iskandar Malaysia is due to its proximity with the city state and its tremendous infrastructure, both economically and physically. Besides being a service and financial hub, it has an integrated transport system and other infrastructures like no other in South-East Asia.

“We are leveraging on Singapore's tremendous connectivity. When we sell Iskandar, potential investors always ask how many flights do we have in Iskandar Malaysia out to London? We ask them in return how many flights do you want?

“The issue is not how many flights our domestic airport in Johor has, but how many flights does Changi Airport have? That is how close geographically we are to Singapore. Multiply that with the whole range of services that Singapore offers and you have the big picture. When we sell Iskandar, we are not just selling Johor; we are selling Johor and Singapore,” said the source.

By The Star

'Sunrise buy a boost for Nusajaya township'

UEM Land Holdings Bhd's acquisition of Sunrise Bhd will further enhance the success of its flagship Nusajaya township, HwangDBS Vickers Research says.

In its Company Focus today, the research house said the recent acquisition would allow UEM Land to leverage on Sunrise's strong brandname and track record in high-end high-density residential and commercial developments.

"Sunrise will provide UEM Land with near-term earnings from more mature Klang Valley area to complement greenfield Nusajaya's long-term growth potential, and diversify its earnings base," it said.

It said UEM Land was currently trading at a 25 per cent discount to its realisable net asset value (RNAV) compared with big-capitalised developers' average of 18 per cent.

This discount should narrow down with improved earnings visibility and lower execution risk following the Sunrise acquisition and the company's possible inclusion in the KLCI FBM-30, it said.

"We applied a conservative 10 per cent discount to RNAV to derive a RM3.45 target price for UEM Land compared with five per cent premium to RNAV for sector leader SP Setia Bhd," HwangDBS said.

By Bernama

E&O in joint venture to develop wellness township in Johor

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is partnering the state investment arms of Malaysia and Singapore to develop an 84ha mixed development dubbed as a wellness township in Nusajaya, Johor.

E&O'sunit Galaxy Prestige Sdn Bhd has set up an equal joint venture company, known as Nuri Merdu Sdn Bhd, with Pulau Indah Ventures Sdn Bhd.

Pulau Indah is a 50:50 venture between Khazanah Nasional Bhd and Temasek Holdings.

Nuri Merdu will build, amongst others, terrace and semi-detached houses, bungalows, serviced apartments and condominiums, wellness centre(s), and retail and commercial properties, E&O said in a statement yesterday.

The project is E&O's first project in Johor. The land is located 15 minutes from the Tuas Second Link to Singapore.

It is also located in Medini, one of five flagship zones in Iskandar Malaysia. Medini would have office buildings, malls, hotels and residential units.

However, the project is subject to a revised master development plan. "The proposal is in line with E&O Group's continuous effort in sourcing new landbank and property development opportunities to boost and sustain its earnings growth," it said.

By Business Times

E&O and Pulau Indah in JV to build Nusajaya township

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has entered into a shareholders' agreement with Pulau Indah Ventures Sdn Bhd to develop a wellness township Nusajaya.

Nusajaya is a flagship zone of Iskandar Malaysia.

E&O (via wholly-owned subsidiary Galaxy Prestige Sdn Bhd) and Pulau Indah have agreed to establish a 50:50 joint venture (JV) company named Nuri Merdu Sdn Bhd.

Pulau Indah is a 50:50 JV between Khazanah Nasional Bhd and Temasek Holdings.

This will be E&O's maiden foray into Johor.

The 210-acre freehold land for the proposed development is 15 minutes away from the Tuas Second Link to Singapore, and is owned by Iskandar Investment Bhd, a 60% subsidiary of Khazanah.

By The Star

E&O jumps on township project in Johor

Eastern & Oriental Bhd, a Malaysian property group, rose the most in two weeks after forming a joint venture with Khazanah Nasional Bhd and Temasek Holdings Pte LTd to develop a “wellness” township project in the southern Johor state.

The stock climbed 3.9 per cent to RM1.62 at 9:07 a.m. local time in Kuala Lumpur trading, set for its biggest gain since June 15.

By Bloomberg

The new wave tipping point for Iskandar?

KUALA LUMPUR: It was the most obvious missing piece in the jigsaw puzzle for Iskandar Malaysia.

For about five years, the country's biggest special economic zone was waiting for its closest neighbour to come as an investor. This was only logical since Iskandar is right next door to the island-republic and it was also touted as a cheaper alternative for Singapore companies.

But only Raffles Education Corp Ltd produced Singapore's biggest investment, with plans to build the RM200 million Raffles University Iskandar.

This is set to change. Analysts think the tipping point is the tie-up between Khazanah Nasional Bhd and Temasek Holdings Pte Ltd.

They plan to build RM3 billion worth of properties in Iskandar through their partnership called Pulau Indah Ventures Sdn Bhd.

The project shows the confidence from Singapore, which would lead to more investments from the country and other global investors, said HwangDBS Vickers Research analyst Yee Mei Hui.

"Temasek is very selective with investments. Their interest in Iskandar Malaysia indicates their confidence in the development so we can expect a new wave of investments, boosting land and property prices in the region," she told Business Times.

The two sovereign wealth funds on Monday said they will jointly develop houses, retail space and wellness-related offerings in Iskandar Malaysia.

They will also build hotels, apartments, offices and shops worth RM27 billion in downtown Singapore.

"Iskandar Malaysia may attract major property developers such as CapitaLand and Wing Tai Holdings Ltd," said an analyst with OSK Research.

Three times the size of Singapore, Iskandar Malaysia spans 2,217 sq km and is a mixed-use development planned for completion in 2025.

Launched in 2006, the expected investment of US$110 billion (RM375 billion) is split between an initial start-up of US$13 billion from 2006-2010 and US$97 billion (RM331 billion) from 2011-2025.

Although neighbouring Singapore, the bulk of investments into the region has come from Europe, the Middle East and Japan with focus on manufacturing, property and tourism projects.

The biggest investments are from Acerinox SA of Spain and Japan's Nisshin Steel, which have committed RM5 billion in investments to build a stainless steel plant.

From the Middle East, Mubadala, Millenium, Kuwait Finance House and Aldar have committed US$1.2 billion (RM4.27 billion) to develop properties in Medini in Nusajaya.

Ongoing projects in Medini include the development of Legoland Malaysia by Merlin Entertainment for US$200 million (RM726 million).

The UK's Newcastle University of Medicine is setting up a branch campus for US$100 million (RM363 million) in EduCity.

So far, the Khazanah-Temasek tie-up has produced one quick win.

Yesterday, Eastern & Oriental Bhd announced plans to partner Pulau Indah and develop a wellness township over a 84ha site.

By Business Times

GSB, Projects Start to build commercial lot

GSB Group Bhd today announced that its wholly-owned subsidiary, GSB Summit Development Sdn Bhd had entered into a joint venture agreement with Projects Start Sdn Bhd to develop commercial properties on freehold land in the Kelana Jaya township.

The joint venture project is expected to be completed within four years," the company said in a filing to Bursa Malaysia today.

The proposed joint venture is in line with one of GSB’s principal activities in the business of property development and will enable the company to develop a prime parcel of land in Kelana Jaya.

By Bernama

40 Talam housing projects categorised 'sick'

The National Housing Department has categorised 40 housing projects under Talam Corp Bhd and the Ukay Bistari project by Intelbest Corp Sdn Bhd as "sick projects".

In a statement today, the Housing and Local Government Ministry said the projects had been identified having problems since 2006.

To date, some projects under Talam and Intelbest Corp still failed to be completed although the date for completion in the sale and purchase agreement had passed, it said.

It said that based on reports and investigations carried out, the delay to complete the projects were due to management and financial problems faced by the developers.

"The ministry, through the National Housing Department, will constantly monitor licensed development projects in line with the Housing Development (Control and Licensing) Act 1966," it said.

By Bernama

TSR arm buys land in PD

TSR Capital Bhd’s unit TSR Ocean Park Sdn Bhd has entered into three sale and purchase agreements with Best Reap Sdn Bhd to buy 19.2 ha of land in Port Dickson, Negri Sembilan for RM36.8 million and develop a mixed development project.

In a filing to Bursa Malaysia yesterday, TSR said the proposed acquisition is in line with its expansion plans in Negri Sembilan and to increase its land bank to generate long-term sustainable income.

By Business Times