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Friday, October 14, 2011

KLIFD to take off early 2012

KUALA LUMPUR: The US$8 billion (RM25.07 billion) Kuala Lumpur International Financial District (KLIFD), to be jointly developed by 1Malaysia Development Bhd (1MDB) and Abu Dhabi's Mubadala Development Corp, will get off the ground early next year.

"The master plan is close to completion. We are working closely with City Hall to get the details ironed out," said its chief executive officer Shahrol Azral Ibrahim Halmi.

The project, which is aimed at strengthening the country's position in the financial services sector, will be developed in phases on a 30.35ha piece of land in the Imbi area fronting Jalan Tun Razak.

"We want the development to be on an orderly basis and ensure that there are marketing benefits," he said.

Over the next six months, 1MDB will intensify talks with prospective investors and developers, he said, without revealing details.

The first phase will comprise a tower and several buildings, he added.

The projects in KLIFD are aimed at attracting cutting-edge technology along with promoting sustainable development via green technology, he said.

Such niche development requires huge investment and as a government-owned organisation, 1MDB has the strength and flexibility to execute it, he said.

He praised the incentives given to IMDB in the 2012 Budget, saying they came at the right time when work on the financial district was being intensified.

"We appreciate the government's commitment to KLIFD. It will ensure that we have the right sort of tenants, such as international banks and financial institutions," he said.

The incentives include a 100 per cent income tax exemption for a period of 10 years and stamp duty exemption on loan and service agreements for KLIFD-status companies.

Others include Industrial Building Allowance and Accelerated Capital Allowance for KLIFD Marquee Status Companies, and 70 per cent income tax exemption for a period of five years for property developers in KLIFD.

He said the level of commitment within KLIFD, the government and its officials is exemplary as "everybody has the same sense of urgency (given the importance and impact of the project)".

Such incentives would also attract developers to the development of KLIFD, despite the huge investments needed, he said.

Shahrol Azral, who graduated from Stanford University in the US and has experienced the Silicon Valley lifestyle, said KLIFD would also have a similar concept, being not just about offices but a place where one can "hang out" and network.

"KLIFD is all about building the nucleus for talent and innovation, which is also in line with the government's aim under the Economic Transformation Programme," he said.

1MDB takes a lot of effort to send the message across to the general public of the totally new concept of KLIFD, he said.

"We have a lot of programmes that involve the people and the younger generation, such as Dana Belia," he said.

Dana Belia, funded by Yayasan 1MDB, provides young people a platform to express their hopes, ideas and creativity through projects that promote unity.

Shahrol Azral, who is also an expert in value creation in multiple sectors, said he wants to maintain the "authenticity" of Malaysian culture - Malay, Chinese and Indian - in KLIFD. "We have the diversity and that will be part and parcel of KLIFD. It won't just be some building blocks," he said.

By Bernama

Chor sees no property asset bubble

PETALING JAYA: Malaysia does not foresee a property asset bubble in the near future unlike China, Hong Kong and Singapore, which have such concerns.

Chor: ‘Increase in RPGT among measures to curb speculation.’

Housing and Local Government Minister Datuk Chor Chee Heung said that many local developers were still rushing to submit their applications for various projects.

“No, I don't think so because we have not reached that stage. If you think this (slower property sales) is the sign, then why are developers jumping in to continue to build?” he said after the opening of the 19th International Real Estate Federation Asia-Pacific Real Estate Congress 2011.

On another note, Chor said the increase in the real property gains tax (RPGT) was among the measures taken by the Government to curb speculation.

The Budget 2012 proposed that the RPGT on properties held and disposed of within two years be raised to 10% from 5%.

Chor said although the additional 5% was not too much of a deterrence, it would not give much room for speculators to buy property and flip it shortly, adding that the additional tax would not affect genuine home buyers.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, in his speech at the congress, said the real estate and business services sector was projected to expand by 6.8% and 5.7% respectively in 2011 and 2012.

“As we move forward, we cannot abandon the underprivileged and the poor. In this respect, we have put in place numerous measures to ensure that there is adequate supply of affordable homes. In March this year, the Government launched the My First Home Scheme.

“Under Budget 2012, the ceiling selling price of these homes has been raised to RM400,000 from RM220,000. The new ceiling would allow a greater number of aspiring homeowners to take advantage of the 100% financing scheme by participating financial institutions,” Husni said.

He also said unique public-private partnerships would be forming, where the Government would provide the land on which private property developers could build homes for the less fortunate group.

By The Star