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Saturday, March 31, 2012

Banking on vibrant Sabah market

Artist’s impression of Gourmet Street in Icon City, Petaling Jaya. Sutera Avenue in Sabah will be inspired by Gourmet Street.

Mah Sing's first Sabah venture to use concepts from the group's Icon City

Property developer Mah Sing Group Bhd's managing director and chief executive Tan Sri Leong Hoy Kum is excited about the group's first property venture in Sabah.

“With our prime and very visible location in Kota Kinabalu's central business district (CBD), coupled with our planned offerings which meet market demand, we are very excited about the prospects of this new market,” he told StarBizWeek.

On March 26, Mah Sing had told Bursa Malaysia its wholly-owned subsidiary Capitol Avenue Development Sdn Bhd had entered into an agreement with Paduan Hebat Sdn Bhd for the proposed joint development of 4.26 acres of prime leasehold commercial land in the Sembulan District of Kota Kinabalu.

The land is located along the coastal highway in the CBD.

Paduan Hebat agrees with Capitol Avenue to jointly develop the land for RM39mil or about RM210 per sq ft.

Capitol Avenue was also granted an exclusive option to jointly develop with Paduan Hebat 4.408 acres at RM216 per sq ft or about RM41.5mil.

The option is exercisable by Capitol Avenue within six months.

According to Mah Sing's statement, the land is located opposite the five-star Sutera Harbour Resort and KK Times Square, and has direct road frontage to the Coastal Highway, one of Kota Kinabalu's main thoroughfares.

Other landmarks nearby include the Sabah Umno building, Ming Garden Hotel and Asia City.

The land will be the southern entry point to the CBD from the Kota Kinabalu International Airport, which is only 3.9km away.

The estimated gross development value is RM360mil for the 4.26 acres and RM470mil for the 4.408-acre option land.

Tentatively called Sutera Avenue, the proposed joint development will comprise multi-storey shop offices fronting the Coastal Highway with street mall retail lots and serviced apartments.

The joint development is expected to commence by the first half of 2013, and the 4.26 acres and 4.408-acre option land are expected to be developed over five years.

Mah Sing says the shop-offices with generous lot sizes will incorporate a new and unique concept (inspired by Mah Sing's 30 Jewels and Gourmet Street shops in its flagship Icon City project in Petaling Jaya) that will appeal to business owners, investors and future tenants.

The retail units will be designed for food and beverage outlets, and a street mall retail concept, in synergy with the shop-offices.

According to Mah Sing, demand for the development will result from the vibrancy of Sabah's economy which has benefited from the wealth of natural resources including oil palm, timber and oil and gas.

It also notes that there is a high population base, as Kota Kinabalu together with the surrounding towns of Penampang, Tuaran and Kota Belud has a population of about 800,000.

There is also a strong tourist trade, and Leong notes. “Kota Kinabalu is a premier tourist destination and is projecting about 2.75 million tourist arrivals in 2012, after attracting more than 2.63 million tourists in 2011. Close to 850,000 international tourists visited Sabah in 2011, with more than 300,000 from South Korea, Hong Kong, Japan, Taiwan, China, Macau and Singapore. More than half of Sabah's international tourists are repeat visitors, with close to 80% of them paying for accommodation during their travel. With their intimate knowledge of the region and frequency of their visits, we believe these tourists are also our potential investors.”

According to a report by consultancy CH Williams Talhar & Wong Sdn Bhd (WTW), major condominium developments launched in Kota Kinabalu's CBD have seen new benchmark prices.

Projects launched last year included 441 units of The Loft @ The Mall, priced from RM650 to RM820 per sq ft, and 333 units of Jesselton Residences, priced from RM630 to RM930 per sq ft.

“Also, 2011 saw the completion of condominums Alam Damai, Peak Vista and Hartamas Heights. Alam Damai, which was previously launched at RM230 to RM300 per sq ft, has reached RM400 per sq ft and above in the secondary market,” says the WTW report.

In addition to increasing land costs and scarcer choice development lands, the hype on condominiums is also spurred by the favourable economic climate backed by earnings from good palm oil prices over the last few years.

The report also notes that the existing supply of purpose-built office space in Kota Kinabalu currently enjoys high occupancy rates of 91% due to the lack of new supply and the conversion of some office buildings to hotels in the last one to two years.

Rents and values are rather stable although there are some upward movements in rents and values for prime and newer office buildings within the CBD.

“Overall, yields are estimated to be around 5%.”

“We are opened to landbanking or joint venture opportunities that fit our business model and have been scouting for land in Sabah, especially in Kota Kinabalu for some time. As an established property developer with 38 projects in Greater Kuala Lumpur, Penang, Johor Baru and now, Sabah, we have a wealth of know-how and a broad base of good consultants, both local and international, who can help to add value to the project,” says Leong.

“We want to leverage on our experience and bring in good architecture, new lifestyle concepts and design that make property management easier, thus creating value for the property.”

Leong also points out that Mah Sing Group's land consideration in the Sabah venture was quite reasonable.

“Land in nearby KK Times Square is being transacted at RM288 per sq ft. Certain suburbs have land transacted at RM150 to RM160 per sq ft on average, while current asking prices (for land in the suburbs examples like Likas and Tuaran) are touching RM200 per sq ft.”

He also points out that the land consideration is less than 10% of the gross development value of Sutera Avenue, which is estimated at a combined RM830mil.

“There is no other available land along the Coastal Highway/CBD which is so prime. All the other lands are already developed or being developed. Mah Sing will get to develop nett land as the surrounding areas are built up, and infrastructure is ready.”

(With gross land, land area has to be allocated for roads, infrastructure, open space, setbacks and land to be surrendered back to government [if required]). This means about 30% land area can be saved when the nett land is developed. In other words, the developer has 30% more saleable land area).

Leong also says the Sabah venture fits well into the company's quick turnaround strategy.

“We can launch the project quickly as the location is matured and infrastructure is ready. Mah Sing intends to start registration of interest by the third quarter of 2012.”

By The Star

Good response to I&P’s landed property project in Temasya Glenmarie

Artist’s impression of semi-detached homes in I&P Group’s Temasya Glenmarie mixed development in Shah Alam.

PROPERTY developer I&P Group Sdn Bhd has recorded strong take-up rates for its recent launch of freehold landed residential homes in Shah Alam, latching on the scarcity of new landed residential properties being brought to the market.

Some observers has described the buying response to the launch as “overwhelming.”

In the last two weeks of March, the group has launched 154 units of Citra double-storey superlink and 60 units of Anggun double-storey semi-detached homes at the 200-acre Temasya Glenmarie mixed development.

About 90% of Citra has been sold, while Anggun recorded 100% take-up rate.

Property consultants tell StarBizWeek that the strong response to the recent Temasya Glenmarie launch was not surprising, in view of the limited supply of new landed-residential units in “hot spots” within the Klang Valley.

Temasya Glenmarie, which has an estimated GDV of RM2.4bil, is located 37km west of Kuala Lumpur and is within close proximity to Petaling Jaya, Kelana Jaya and Subang Jaya.

“Some buyers have bought for their own use, while others would be looking at obtaining decent capital appreciation,” says KGV International Property Consultants director Anthony Chua.

“For the next 12 to 18 months, we still see strong demand for new launches of landed residential units in the Klang Valley, depending on the type of property and location,” says Chua.

A bank-backed property analyst concurs, and points out that Temasya Glenmarie appealed to well-heeled buyers.

“There has been very limited supply of new landed units in that area.”

However, he points out that it was not known as to how many of the sales and purchase agreements (S&Ps) signed would translate into actual sales, as buyers would still need to get approvals for loans.

“In the recent past, about 80% of the S&Ps signed during launches of new properties would be converted into actual sales. But if you look at the national mortgage loan approval data, we undertand that as of end-January, it was a bit weaker.”

The analyst also points out that despite credit-tightening measures as a result of Bank Negara's responsible lending guidelines, there was still a situation of high liquidity in the market.

Effective this year, banks have started using net income instead of gross income to calculate the debt service ratio for loans.

“Interest rates are still low, and qualified property buyers still have relatively easy access to financing. Thus, we have an asset bubble situation, where long queues of buyers are seen at new property launches.”

In his opinion, the current situation was not healthy as the credit-tightening measures might penalise many genuine property buyers who were buying for their own use.

“At this time, well-heeled people do not have many avenues to invest their money. So they keep investing in property.”

The Citra and Anggun units have total gross development values (GDV) of RM215.2mil and RM145mil respectively.

The Citra units come in two types. Type 2A has a built-up ranging from 2,839 sq ft to 4,160 sq ft and priced from RM975,888 to RM1.7mil.

Citra type 2B has a built-up ranging from 4,839 sq ft to 6,220 sq ft and are priced from RM1.6mil to RM2.7mil.

Meanwhile, the Anggun double-storey semi-detached homes have a built-up about 4,000 sq ft and are priced between RM2.34mil and RM3.55mil.

The homes are expected to be completed in March 2014.

I&P Group says that the 200-acre Temasya Glenmarie had a tagline of “Space to Live. Live with Space”, and all units come with large built-up areas.

“The township comes with a standard 100-ft wide road frontage and 60-ft wide beautifully-landscaped back roads,” states I&P Group.

Nearby amenities include the Empire Shopping Gallery, Subang Parade shopping centre, Subang Jaya KTM Komuter station as well as Glenmarie Golf & Country Club, Saujana Golf & Country Club and the Holiday Inn Glenmarie.

Temasya Glenmarie is also accessible via major highways like the Federal Highway, North Klang Valley Expressway, New Pantai Expressway, North-South Central Link and Guthrie Corridor Expressway.

By The Star

MBSB eyes RM500m loan approvals

The Malaysia Building Society Bhd (MBSB) plans to disburse close to RM500 million loans through its My First Home Scheme campaign this year.

Its chief executive officer (CEO) Datuk Ahmad Zaini Othman said if the reception towards the scheme, which is aimed at first-time home buyers, was good, MBSB would increase its target to up to RM1 billion.

"We hope this will provide relief to the targeted group, who are mainly newcomers to the workforce and facing challenge of rising costs of living and properties in the country.

"This scheme is definitely in support of the government's call and Prime Minister Datuk Seri Najib Razak's aspiration to promote home ownership among younger generation in Malaysia," he told reporters after launching the My First Home Scheme campaign here yesterday.

Ahmad Zaini said the scheme was designed to allow eligible Malaysians under 35 years old to buy their first house up to a ceiling price of RM500,000 and at a 100 per cent margin of financing, offering an exemption of the normal 10 per cent down payment.

On another matter, Ahmad Zaini said MBSB was on track to establish itself as a full-fledged development bank.

"For the past three years, we have been closing some important gaps. We need certain approvals from Bank Negara Malaysia and shareholders' endorsement to move on.

"This may be realised this year or even next year. Even if you look at our products, we are offering financial products similar to banks.

"The gaps are very small now. We will continue to push our efforts to convince the shareholders, the central bank and the authorities," he added.

Ahmad Zaini also said that MBSB was planning to open seven to eight more branches nationwide this year from 36 currently.

By Business Times

Friday, March 30, 2012

UEM Land to launch Nusajaya Gateway this year

Wan Abdullah showing the Imperia Condominium Tower model at the company’s property gallery in Singapore, the project is now being developed at Puteri Harbour in Nusajaya, Johor.

SINGAPORE: UEM Land Holdings Bhd will be launching its new multi-billion ringgit integrated mixed development project known as Nusajaya Gateway this year.

Managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the 1,821 ha parcel would be the last “remaining big fat land” slated for development in Nusajaya.

He said the company had presented the development plan to Johor Mentri Besar Datuk Abdul Gani Othman and the state planning unit and that the Johor government had given the nod the the project.

“The development will keep us busy for the next 25 years with an estimated gross development value (GDV) of about RM18bil as of to date,'' said Wan Abdullah.

He was speaking at a press conference on the opening of the UEM Land Property Gallery in Heritage Place here yesterday.

Wan Abdullah said however, the company would review the GDV from time to time.

He added that it would probably be higher than the estimated figure in years to come.

He said the land was located just few metres away from the Sultan Abu Bakar Custom, Immigration and Quarantine (CIQ) Complex at Tanjung Kupang in Gelang Patah.

Wan Abdullah said the land was divided into two parts with the large parcel located on the left side of the CIQ for motorists coming from Tuas in Singapore and the other parcel was on the right side of the complex.

“We have identified several catalytic projects on the land and these include education, eco-tourism and leisure,'' he said but declined to give details on the other signature developments.

Wan Abdullah added that Nusajaya Gateway's signature development would be different than those at Nusajaya presently but they would be complementing instead of competing with each other.

He said the development would comprise of residential and commercial properties with low and high-density living and that focus would be given on preserving the area as it is located near to mangrove area of Ramsar site.

Meanwhile, a senior official with UEM Land told StarBiz that the company was currently talking with several local and foreign investors who had expressed their interest in the project.

“By having joint-venture with other parties, it will help to fast track the development as they could bank on each other strength in undertaking the project,'' said the official. The official added that Nusajaya Gateway's close proximity to the Second Link Crossing and Tuas checkpoint would be an added advantage in marketing the project for Singaporeans and foreigners living in the republic.

By The Star

UMLand plans RM1.4b projects

UNITED Malayan Land Bhd (UMLand) plans to develop several property projects in the Iskandar development region in Johor with a gross development value of RM1.4 billion over six years.

UMLand director Datuk Syed Ahmad Khalid Syed Mohammed said construction on the mixed development project in Medini, Iskandar, would start soon.

It is targeting local and foreign investors.

"Under phase one, we plan to build commercial properties such as hotel, serviced apartments and retail buildings," Syed Ahmad told reporters here yesterday after inking the deal with Iskandar Investment Bhd.

The latter was represented by its president and chief executive officer Datuk Syed Mohamed Syed Ibrahim.

Syed Ahmad said the company still negotiating with Iskandar on the land size that it could buy for the project.

UMLand chief operating officer Lim Eng Kuan said the proposed investment could boost Medini's attractiveness as an investment hotspot as well as complement its Bandar Seri Alam flagship project within the Iskandar region.

He added UMLand had already bought several parcels of land in the Iskandar region measuring 404.6ha, earmarked for industrial, commercial and residential development.

This will ensure the continuity and growth in the future earnings for the group.

Medini is located within the Nusajaya development zone, which is one of the five flagship developments of Iskandar, touted to be the country's engine of growth in the southern region.

Comprising an area of 902.8ha, Medini is one of Nusajaya's eight catalyst developments.

Others are Johor's new administrative centre, Puteri Harbour, a southern industrial and logistics cluster, Afiat Healthpark, Educity, an international resort and Nusajaya residences.

By Business Times

UMLand eyes Medini

Developer to hold negotiations with IIB on investments in Iskandar

PETALING JAYA: United Malayan Land Bhd (UMLand) will hold negotiations with Iskandar Investment Bhd (IIB) about investments in Medini, Iskandar Malaysia.

The developer said in a filing with Bursa Malaysia yesterday that it had entered into a collaboration agreement with IIB to talk about its proposed investments in the flagship project. Located in the Nusajaya development zone, Medini is one of the five flagship developments and part of the eight catalyst developments of Iskandar Malaysia, in addition to Johor State New Administration Centre, Puteri Harbour, Southern Industrial and Logistic Cluster, Afiat Healthpark, EduCity, International Destination Resort and Nusajaya Residences.

Syed Mohamed: Medini is well positioned to become the central business district in Nusajaya.

IIB president and chief executive Datuk Syed Mohamed Syed Ibrahim said in a press statement that the 2,230-acre Medini is well-positioned and on track to become the central business district of Nusajaya.

“The proposed investment by UMLand, one of the renowned property developers in the local real estate industry, does not only reflect the attractiveness of Medini as an investment hot spot but will add a new dimension to the vibrancy of the lifestyle development,” he said.

UMLand chief operating officer Lim Eng Kuan said that UMLand had been a major player in the Johor property industry since 1990, starting with its first development Bandar Seri Alam.

“Over the years, the group has made concerted efforts in collaboration with the state government and has seeded vast infrastructure and amenities allowing the group to spread its wings further in Johor.

“This can be seen in the group's strong presence in the region with projects in four out of five flagship zones of Iskandar Malaysia,” he said, adding that the group had also acquired several parcels of land amounting to 1,000 acres in the Iskandar region, earmarked for industrial, commercial and residential development.

It was recently reported that Medini's Arab investors would look to dispose of their land over time to other developers.

By The Star

Sime targets RM2.4b sales

SIME Darby Bhd is targeting RM2.4 billion gross sales for the various projects it has in 10 townships for the financial year ending June 20 2012.

Sime Darby Property managing director Datuk Wahab Maskan said the company has already made RM1.2 billion sales in the first half of the financial year.

"We are on track to meet this target," he said after the launch of Sime Darby Property's latest property campaign called "Lifestyle Collection", a showcase of its residential and commercial properties in and around Greater Kuala Lumpur area.

However, in terms of overall contribution to the Sime Darby group's revenue, it will still be maintained at about 15 per cent like in the last financial year, Wahab said.

He said the "Lifestyle Collection" features 1,800 landed and strata properties which include top- selling and newly launched units as well as planned units.

The properties are located in Sime Darby Property's 10 townships in Klang Valley and Nilai in Negri Sembilan which range from the cheapest residential unit in Nilai at RM431,000 to over RM1 million.

Wahab, who is also Sime Darby group chief operating officer, said the conglomerate's property unit is still doing well despite the little consolidation in the luxury segment of the property market.

"It is a bit challenging in the high-end market but we believe it is still reasonably strong, especially in the Greater Kuala Lumpur and Klang Valley areas," he said.

Wahab added that the company's properties priced between RM1 million and RM2 million are still marketable.

"(Properties) above RM2 million may face challenges to sell but we do not have many of those."

On the affordable housing market, he said depending on the approval from authorities, Sime Darby Property can build between 4,000 and 5,000 units a year for five years beginning next year.

"We will build our own units and we can also collaborate with the government's programmes," Wahab said.

He said Sime Darby Property has also plans to look out for property deals in places it has operations like Singapore, London and Australia.

Wahab said in Singapore the company is now working out one or two deals that could be the redevelopment of some old properties or a joint venture with local parties there.

He said Sime Darby Property, which has a total landbank of 14,800ha, is always looking for more local and foreign local acquisitions.

Meanwhile, Wahab said the "Lifestyle Collection" campaign will start today until April 14 at its property gallery in Ara Damansara. From April 14 to April 30, the public can view the products at the respective sales galleries of the specific properties.

Some benefits buyers can enjoy during the period include low initial payment, cash incentives up to RM10,000 and waived stamp duties and legal fees.

He also said properties developed by Sime Darby have high appreciative yields of about 15 per cent a year.

By Business Times

Oriental in project buy-back

PETALING JAYA: Oriental Pearl City Properties Sdn Bhd, a subsidiary of Malaysia Pacific Corp Bhd (MPCorp), will pay for the RM110.8mil buy-back of AmanahRaya Development Sdn Bhd's (ADSB) stake in a development project both parties had earlier agreed to via internal resources, loans or “other strategic investors.”

Ch’ng says any new investors will be decided by MPCorp without the restriction of seeking mutual consent from ADSB

ADSB has since exercised its rights to sell its investment in Johor's LakeHill Resort Development Sdn Bhd where it had a 22% stake, and Oriental, the remaining 78%.

MPCorp chief executive officer Datuk Bill Ch'ng told StarBiz that Oriental would purchase ADSB's stake and that the new investors, if any, would be decided by MPCorp, without the restriction of seeking mutual consent from ADSB.

In August 2008, a joint-venture agreement was entered into between ADSB and property firm MPCorp's wholly-owned Oriental whereby Oriental had granted a put option to ADSB to exercise its rights to sell its entire investment of 22% in LakeHill Resort Development to MPCorp on or before the expiry of the option period on Jan 31 this year.

The expiry date of the option period was then extended to Wednesday.

On Monday, the company said ADSB had given notice that it was exercising the put option granted to it and that Oriental was to purchase ADSB's participation in the joint-venture project.

The put option price of RM110.8mil shall be paid within a period of 60 days from March 26, the company told Bursa Malaysia.

It added that it was now at liberty and sole discretion to negotiate with other new strategic partner(s) of its choice.

No details were given as to why ADSB wanted to end the relationship.

StarBiz queries to ADSB were not answered by press time.

In explaining the termination of the relationship, Ch'ng said: “We understand Amanah Raya Bhd, of which ADSB is a subsidiary, is presently being transformed into holding the exclusive role of a trustee' company and shall no longer be involved in property development projects.”

The exercise of its option was both mutually satisfactory and friendly, he added.

LakeHill Resort Development, according to reports, is currently developing Aptec City on a 638-acre piece of land in Iskandar Malaysia under its wholly-owned unit, Asia Pacific Trade & Expo City Sdn Bhd.

Upon its completion in eight years' time, Aptec City will reportedly be MPCorp's jewel in the crown.

As at Dec 31, loss-making MP Corp had cash and cash equivalents of RM1.6mil. Notably, its total assets stood at RM511.1mil while liabilities totalled RM125.3mil.

By The Star

Crescendo posts higher profit of RM88m

Crescendo Corp Bhd registered a pre-tax profit of RM88.062 million for its financial year ended Jan 31, 2012, up from RM50.766 million in the previous year.

Revenue for the year rose to RM290.424 million from RM215.225 million a year ago.

In a filing to Bursa Malaysia today, the company said the significant increase in revenue was mainly attributed to higher sales in industrial properties.

"The substantial increase in pre-tax profit was mainly contributed by higher sales as well as improved margins from industrial properties," it added.

For the fiscal fourth quarter, Crescendo posted a pre-tax profit of RM23.18 million, up from RM16.122 million in the corresponding quarter previously.

Revenue for the three-months period rose to RM70.610 million from RM56.706 million.

Moving forward, the construction and property firm said it had total unbilled sales brought forward and new locked-in sales of RM124 million but it expected market condition to be challenging in the near to medium term.

"Nevertheless, demand for property in Johor is expected to be least affected in view of the enhanced bilateral collaborations between Iskandar Malaysia and Singapore recently.

"The group expects industrial property sales to be the main profit contributor but it will also start to launch residential houses in Bandar Cemerlang in the 2013 financial year," the company said.

By Bernama

Selangor Properties unit gets notices of land acquisition

KUALA LUMPUR: Selangor Properties Bhd subsidiary Bungsar Hill Holdings Sdn Bhd (BHH) has received notices of acquisition from Mass Rapid Transit Corp Sdn Bhd (MRT Corp).

In a filing with Bursa Malaysia, Selangor Properties said that BHH received the notices of acquisition in the form of Form E and Form F under the Land Acquisition Act 1960 from the Government. The proposed acquisition was intended for the Mass Rapid Transit project's Sungai Buloh-Kajang line.

“BHH objected to the proposed acquisition and has filed an application for leave for judicial review for an order of certiorari to quash the notices of acquisition. The said application for leave for judicial review is now fixed for mention by the court on June 21,” it said.

It added that BHH had in the meantime been negotiating with MRT Corp to seek a solution to either reduce and/or avoid the proposed acquisition of the said land.

On Feb 28, BHH and MRT Corp had agreed in principle, via an undertaking letter and points of agreement, that the area for the proposed land acquisition for title no. Geran 58376, Lot 54305 will be reduced; the area for the proposed land acquisition for title no. H.S.(D) 100364, PT 5785 will be reduced; the proposed land acquisition for title no. Geran 70133, Lot 56495 will be withdrawn subject to BHH undertaking to provide the facilities and railway reserve required for the MRT station at Pusat Bandar Damansara to the specifications provided by MRT Corp.

This arrangement provided under the points of agreement is not binding on the parties until a definitive agreement is signed by both the parties.

Following the above arrangements, the land acquisition hearing for the said land has been postponed with no hearing date being fixed yet.

By The Star

Thursday, March 29, 2012

Mid Valley Johor in the making

IGB Corp Bhd is replicating Mid Valley City here in Johor with the project's gross development value exceeding RM6 billion, its chief said.

The megamall project in Johor Baru is the second such development for IGB and is also the first project for the developer in Johor.

Group managing director Robert CM Tan said IGB is bullish on the Johor market, especially with continuous growth in Iskandar Malaysia and more Singaporeans going there for properties.

Tan said "Mid Valley Johor" will take some five years to complete and construction is expected to begin by the end of this year or early 2013.

There are many issues to be addressed such as land matters and finalising the project's development plan for approval.

"We have not finalised the planning of the project. We will undertake a study to identify the best components. Right now, we plan to build a 1.5 million square feet mall, either one or two hotels, high-end residences and commercial towers.

"We hope to resolve the land issues and other matters soon," he said yesterday after inking a memorandum of understanding with Selia Pantai Sdn Bhd to set up a 70:30 joint venture company named Southkey Megamall Sdn Bhd.

Johor Mentri Besar Datuk Abdul Ghani Othman was present at the signing ceremony.

Tan said IGB will maximise the value of the land, estimating the project's gross development cost to be in the region of RM3 billion.

Southkey Megamall will buy 15 hectares for the project. The land is part of Selia Pantai's RM15 billion Southkey development, which started early last year.

Selia Pantai is a public-private partnership between Selia Group founded by Datuk Mohamed Zaini Amran, and Johor state investment company, Kumpulan Prasarana Rakyat Johor.

Tan said IGB is also mulling over developing a megamall project in the north, most likely Penang.

"We are always looking for opportunities to expand. We are also looking for real estate developments overseas," he said.

IGB shares closed at RM2.85 yesterday, seven sen lower than Tuesday.

By Business Times

Johor’s own Mid Valley City

From left: Tan, IGB Corp chairman Tan Sri Abu Talib Othman, Selia Pantai MD Datuk Mohamed Zaini Amran, Ghani and Kumpulan Prasarana Rakyat Johor Sdn Bhd chief Executive officer Johar Salim Yahaya looking at a model of the proposed Southkey Megamall in Johor Baru.

KUALA LUMPUR: The proposed Mid Valley City-type mixed development in Johor Baru, via a joint venture between IGB Corp Bhd and Selia Pantai Sdn Bhd, is expected to take four to five years, and has a tentative gross development value of RM6bil.

“Tentatively, the project will have a gross development cost of RM2bil to RM3bil. It took us 15 years to get Mid Valley City to what it is today. Hopefully, it will take us only half that time with the Johor project,” said IGB Corp group managing director Robert Tan.

IGB Corp, the developer of Mid Valley City in Kuala Lumpur, has entered into a conditional memorandum of understanding (MoU) with Selia Pantai for the joint venture.

Johor Menteri Besar Datuk Abdul Ghani Othman, who witnessed the MoU signing, said the project would complement other developemnts in the Iskandar Malaysia economic growth corridor.

A joint-venture company called Southkey Megamall Sdn Bhd will be set up to acquire three parcels of leasehold land measuring 36 acres for the project within the 300-acre Southkey development in Johor Baru.

Selia Pantai is the Southkey developer and is a public-private partnership between the Selia Group and the Johor government via Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ).

IGB Corp will have a 70% stake in Southkey Megamall, with the balance owned by Selia Pantai.

Southkey is located within the Johor Baru city flagship zone A of Iskandar Malaysia and is accessible via five-minute drive from the Sultan Iskandar Customs, Immigration and Quarantine (CIQ) complex as well as via Jalan Tebrau, Jalan Bakar Batu and the Eastern Dispersal Link.

Tan said it was a great location for the proposed Southkey Megamall.

“It is not easy to find a location like this. We are bullish on the Johor market. There are many things happening in Iskandar Malaysia,” he said.

He said Selia Pantai had approached IGB Corp about six months ago with the proposal for the project, which is planned to have a retail mall as well as hotels, serviced apartments and offices.

The proposed Southkey Megamall will have six million sq ft of space, and will include a net lettable area of 1.5 million sq ft, with about 7,000 carparks and can accomodate two major anchor tenants as well as 400 to 500 retail outlets.

IGB Corp will fund its portion of the project via internal funds and bank borrowings.

According to Tan, another six to nine months will be needed to do studies as well as resolve planning approvals and other issues pertaining to the project.

“We hope to start construction in 2013. This is our first project in Johor. we are always on the lookout for opportunities. We want to look in the north also. Ideally, we want to have Mid Valley City-type developments in the south, central and north (Penang),” he said.

By The Star

Sime on track to hit RM2.4b property sales

Sime Darby Property Bhd is on track to achieve a gross sales value (GSV) of RM2.4 billion in the current financial year ending June 30, 2012, said managing director Datuk Wahab Maskan.

He said the value would be mainly contributed by some 23 property projects under its Lifestyle Collection umbrella. Of the 23 projects, 10 were launched today as the first phase of the Lifestyle Collection series.

"The ten projects have a GSV of RM1.2 billion and the others, RM1.3 billion.

"The promise that we gave to our parent company, Sime Darby Bhd, was to register a GSV of more than RM2 billion. We are sure of reaching RM2.4 billion," he told reporters after the launch.

Wahab, who is also the Chief Operating Officer of Sime Darby said the property arm of the conglomerate, expects its profit to be sustained at between RM400-RM500 million for the current financial year.

He added that Sime Darby Property is also looking to maintain the profit contribution at about 10-15 per cent.

"We have seen tremendous growth in demand for high-end and medium range housing and commercial properties. If this continues, then I would not be surprised, if we touch 20 per cent in the coming years," Wahab said.

He also said that the property developer is keen on increasing its landbank, with the focus on countries like England, Singapore and Australia.

"We will still concentrate on Malaysia but the international property market is also very vibrant and attractive. We currently have some projects in the said countries.

"We will thus be looking for new land and projects while restructuring the development projects in hand," he added.

By Bernama

Tradewinds Corp to build resort hotel in Langkawi

LANGKAWI: Tradewinds Corporation Bhd's subsidiary, Benua Mahsuri Sdn Bhd, will build an international-standard resort hotel on this duty-free island.

Langkawi Development Authority (LADA) chief executive officer Tan Sri Khalid Ramli said this would draw more affluent tourists to Langkawi, hence increase the island's tourism receipts per capita in the future.

He was speaking to reporters after signing the land lease agreement with Tradewinds Corporation chief executive officer Shaharul Farez Hassan here today.

The hotel will be built on LADA's 36.7-acre land in Teluk Burau.

Khalid said the project would create over 400 new jobs.

By Bernama

Prasarana in property joint venture

PETALING JAYA: Syarikat Prasarana Negara Bhd will work with a local property developer to build a RM200mil high-rise mixed development project over its underground Dang Wangi light rapid transit (LRT) station.

Managing director Datuk Shahril Mokhtar said they had made the decision last week in selecting the best developer to work with Prasarana and due announcement would be made soon.

“The bidders submit their proposals via an open tender process and presented their creative ways to develop the piece of land there.

“It’s going to be a mixed development of offices and residential units,” he told reporters after the memorandum of understanding signing yesterday between Prasarana and the Malaysian Anti-Corruption Commission yesterday.

This property venture will be the first for Prasarana that is expected to enhance its revenue stream.

It was previously reported that UDA Holdings Bhd was one of the developers that had sent a proposal to Prasarana to jointly develop the 11,008 sq m.

Previous reports also described that the Dang Wangi development might be emulating the Kuala Lumpur City Centre with underground LRT.

Going forward in this new venture, Prasarana would also be looking at other locations with potential to have property developments especially in high traffic areas such as Ara Damansara, Subang Jaya KTM station and Awan Besar along the Kesas Highway.

By The Star

Nakamichi M’sia sells property

KUALA LUMPUR: Nakamichi Malaysia Sdn Bhd has signed a sale and purchase agreement with Century Advance Technology Sdn Bhd for the proposed disposal of a piece of industrial land and building for RM19mil.

Nakamichi Malaysia is a wholly-owned unit of Nakamichi Corp Bhd.

Nakamichi Corp, in a filing to Bursa Malaysia yesterday, said the proposed disposal was expected to be completed in the fourth quarter of 2012.

By Bernama

BRDB closer to open tender

PETALING JAYA: Bandar Raya Development Bhd (BRDB) is one step closer to selling off its four prime assets via an open tender, after the company announced the appointment of its legal and financial advisers to assist in the deal.

In a filing with Bursa Malaysia, the company said it was working with Lee Hishammuddin Allen & Gledhill and CIMB Investment Bank Bhd to assist in the proposed disposal.

It said the board had decided to proceed with the proposed disposal, while noting that Ambang Sehati Sdn Bhd had to-date been unable to confirm its plans to increase its stake in BRDB.

In September 2011, Ambang Sehati proposed to buy BRDB's properties, namely Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for RM914mil.

The proposal drew criticism from various parties, who expressed concern over the lack of transparency in the deal and the fairness of the offer price, coupled with the fact that it was a related-party transaction.

Subsequently, the company called off the sale and decided to call for an open tender to take into consideration the interest from credible parties to acquire its assets, and also Ambang Sehati's intention to increase its stake in the company.

Ambang Sehati is the private investment vehicle of Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, BRDB's chairman, who owns 18.88% of BRDB.

“The company had decided to proceed with the disposal exercise. Last year, when the news broke (about the four properties), Ambang Sejati wanted to buy (them). At that point in time, Ambang Sejati was thinking of increasing its stake in the company, that is why the board decided to defer the exercise.

“That was 2011, and now Ambang Sejati is still evaluating its options, but the board can no longer wait for them and this (announcement) is a go-ahead with the tender,” said a source familiar to the matter.

He said the company had not appointed a property consultant yet but the legal adviser appointed was in the midst of finalising the proposal on how to go ahead with the tender.

OSK Research said it was acceptable for BRDB to monetise its assets as long as the company disposed of them at a fair and attractive pricing.

“As we think Ambang Sehati's offer price is unattractive, we see the open tender route as positive as this would enable the group to garner better pricing for its assets via competitive bids from other interested parties,” it said.

It said it was very likely that the company would distribute some of the disposal proceeds as special dividend to its shareholders.

By The Star

Wednesday, March 28, 2012

Bolton in its first build-then-sell development

KUALA LUMPUR: Bolton Bhd is embarking on its first build-then-sell residential development with a gross development value of RM80mil on a 2.34ha site in Setapak.

The company has entered into an agreement with CRSC Property Sdn Bhd to develop 70 three-storey superlink terraced houses on the leasehold site, which is part of an ongoing 26.97ha residential and commercial development in Taman Sri Rampai.

Under the agreement with CRSC Property, Bolton will construct and complete the development by February 2015.

“We expect this project to be a quick turnaround for Bolton as the land is currently vacant and ready for development,” said executive chairman Datuk Mohamed Azman Yahya in a statement yesterday.

“Although this is our first build-then-sell concept development, we are confident that Bolton's good and solid reputation has garnered us a strong following in the Klang Valley to ensure the saleability of the superlink terraced houses.”

He said Taman Sri Rampai was a sought-after mature township, which enjoys good accessibility to the city centre via several major highways.

“As this project is a landed development, this would ensure that the property would enjoy healthy capital appreciation upon its completion,” he added.

By Bernama

BRDB to proceed with disposal of properties

PETALING JAYA: Bandar Raya Development Bhd (BRDB) will proceed with the proposed disposal of BR Property Holdings Sdn Bhd, CapSquare Retail Centre and Permas Jusco Mall via a tender exercise.

In a note to Bursa Malaysia yesterday, BRDB said its board noted that while Ambang Sehati Sdn Bhd, its second largest shareholder, is still evaluating its plan to increase its stake in the company (which may or may not result in a general offer), the latter has yet to confirm its decision to proceed with the exercise.

BRDB said it was working with its legal and financial advisers to implement the proposed disposal in an efficient manner.

By The Star

IGB to ink deal to co-develop Johor project

PETALING JAYA: IGB Corporation Bhd will be signing a non-binding Memorandum of Understanding (MoU) with Selia Pantai Sdn Bhd for the proposed establishment of a 70:30 joint venture (JV) to acquire and develop three vacant parcels of leasehold land situated in Johor into a retail mall and / or mixed development.

IGB told Bursa Malaysia today that the MoU shall remain valid for 30 days except as otherwise mutually agreed in writing by the parties.

“Full announcement of the proposed JV will be made in the event the parties have executed a joint venture agreement which shall constitute the definitive documentation providing the details in respect of the matters broadly set out in the MoU,” the company said.

By The Star

Singapore's HDB to launch 8,000 flats today

SINGAPORE: The Housing Board (HDB) will launch a bumper crop of 8,000 flats today through a joint build-to-order (BTO) and sale of balance flats exercise. The flats are located in mature and non-mature estates, such as in Bukit Timah, Bedok and Clementi, and cover the full range of flat types.

“With the wide range of flats offered, flat buyers will be able to apply for one that best meets their needs, and in an estate of their choice,” said National Development Minister Khaw Boon Wan in his latest blog posting.

He expects strong demand for the completed/near completed flats and flats in mature estates. Those who wanted to have a better chance of success should widen their choice and consider applying for a BTO flat in the non-mature estates, he said.

The results of the launch will help HDB calibrate the BTO rules for future launches, to ensure that the policy objectives are met. “Our priority remains to help first-timers get their first HDB flat as quickly as possible, so that they can proceed to start their family,” he said.

Earlier this month, Khaw announced in parliament new measures to help various groups of home buyers.

They include tripling the BTO chance for second-timers in non-mature estates, enhancing the married child priority scheme and introducing a new multi-generation priority scheme to help married children live with or near their parents, as well as introducing an ageing-in-place priority scheme and a silver housing bonus scheme to help the elderly right-size and age in a familiar environment.


Tuesday, March 27, 2012

The Arabs are out others in, in Medini land

Syed Mohamed(left in pic):‘The Arabs will no longer be involved, but it was good that they came initially.’ File picture shows Iskandar Investment Bhd president/CEO Datuk Syed Mohamed Syed Ibrahim (left) and UEM Land Holdings Bhd managing director/CEO Datuk Wan Abdullah Wan Ibrahim exchanging documents on Jan 10, 2011, after a signing ceremony to mark their collaboration to form a joint venture company offering security services in Nusajaya at Iskandar Malaysia, Johor. UEM an early investor is also involved in other developments in the Iskandar area.

KUALA LUMPUR: Arab investors who were originally the master developers of 2,230 acres at Iskandar Malaysia known as the Medini development will no longer be involved and about 80% of that land has since been sold to other foreign investors, including those from East Asia.

“If the Arabs are not willing to develop the land, we cannot let the project be left idle, there must be activity on the land. In fact, we had initiated this (to get other investors) who are from China, South Korea and also Japan to invest in the land,” Iskandar Investment Bhd (IIB) president/chief executive officer Datuk Syed Mohamed Ibrahim said in an interview.

He added that the Arabs “will no longer be involved in Medini, but it was good that they came (initially).”

Five years ago, Abu Dhabi's Mubadala Development Co was the leading consortium investing US$720mil (RM2.1bil) in Medini Iskandar Malaysia to jointly develop 2,230 acres. But the global crisis had thrown the Arab property world into disarray and that had somewhat slowed the development of the Medini parcel.

Hence, IIB had to get other investors, including those from Singapore, North Asia and domestic players.

“The interest (from the foreign investors) came to our office and we facilitated the deals with the foreign investors,” he added.

But it cannot be denied that the Arabs did put in the money when Malaysia wanted foreign investors to invest in Iskandar Malaysia, which is the country's first economic corridor.

Since then, Malaysia has had investors from other parts of the world including domestic investors who had bought plots of land to develop. One of the bigger foreign investors thus far that has invested RM2bil in Medini's development is Beijing-based real estate developer, Zhuoda Real Estate Group. The Sunway Group has bought 691 acres to undertake a mixed development.

The 2,230-acre Medini development would house lifestyle and leisure development. IIB's overall land bank in Johor is 8,889 acres, of which 2,230 acres are for Medini and Legoland theme park and hotel. Nearby, there is also a educity, a wellness centre and a creative studio, UK-based Pinewood, that will be housed.

For the educity, nine universities and campuses will be sited and they include Singapore's Raffles University, University of Southampton Malaysia campus, Malborough College Iskandar Malaysia, Newcastle University Medicine Malaysia, University of Reading Malaysia and the Netherlands Maritime Institute.

IIB is 60%-owned by Khazanah Nasional Bhd, 20% each by Employees Provident Fund and Kumpulan Prasarana Rakyat Johor.

Syed Mohamed said parties from China had wanted to buy the entire Medini area, but because it would be developed into a cosmopolitan area, they had to ensure there was a mix of investors from different parts of the world.

“We have got a nice problem as far as genuine interest from potential local and foreign parties for the land is concerned. We have a suite of investors and we have no restrictions to sell the plots of land to foreigners. There is a lot of interest for land and while there is limited land out there, we are not ready to open the over 6,000 acres for sale presently,” he said.

He would rather wait for land prices to appreciate before opening the over 6,000 acres for development.

Turning to Legoland, Syed Mohamed said the theme park, sited on 76 acres, will open its doors in the fourth quarter of this year. At a cost of US$700mil, the company is also getting a water theme park because of its strict procurement process.

“For the price of one we are getting two theme parks. The water theme park will open in 2013 together with the Legoland theme park hotel,” he said.

Thus far, IIB has managed to sell 10,000 of the unlimited one-year theme park entry passes which are being offered at a special price of RM195. He is targeting one million visitors per year but has yet to promote the theme park in Indonesia, which he believes has a huge potential market.

By The Star

Mah Sing enters Sabah with Sutera Avenue

KUALA LUMPUR: Mah Sing Group Bhd will enter Sabah property market with a mixed development, called Sutera Avenue with an estimated gross development value (GDV) of RM830million.

With this project, the group's landbank now stands at 490.4ha with remaining GDV and unbilled sales worth an estimated RM16.27 billion.

This provides the group with strong earnings stream for the next five to seven years, group managing director Tan Sri Leong Hoy Kum said.

Sutera Avenue will be developed on about 3.5ha of prime commercial land along the coastal highway in Kota Kinabalu's central business district.

Leong said the group is keen on Sabah market due to its vibrant economy, strong tourist trade and its population base provides a large market segment.

"Sutera Avenue is a perfect fit with our business strategy; the location is second to none, facilities and amenities abound, and we can launch the project quickly in line with our fast turnaround business strategy.

"We shall develop the project over five years, and intend to commence registration of interest by the second half of this year, as early as the third quarter," he said in a statement released yesterday.

The project is Mah Sing's second land deal in many months, as the developer has a landbanking target of acquiring new projects with potential GDV of RM5 billion in 2012.

Mah Sing's wholly owned subsidiary, Capitol Avenue Development Sdn Bhd had signed a joint development agreement with Paduan Hebat Sdn Bhd for the proposed joint development of 1.7ha for an entitlement of RM39 million or about RM210 per square foot (psf).

Capitol Avenue is also granted an option to jointly develop with Paduan Hebat another 1.76ha of adjacent site at an entitlement price of RM216 psf or abour RM41.5 million, within six months of the agreement.

In the first phase of the development, covering 1.7ha, the group plans to develop multi-storey shop offices fronting the coastal highway. This will be complemented by street mall retail lots and serviced apartments.

"These shop offices with generous lot sizes will incorporate a new and unique concept - inspired by Mah Sing's 30 Jewels and Gourmet Street shops in its flagship Icon City Petaling Jaya - appealing to both business owners, investors and future tenants.

By Business Times

UEM Land targets more foreign joint venture deals

The merger of UEM Land and Sunrise Bhd in early 2011 had provided a much-needed boost to the company, which now has property developments in Canada and management projects in Singapore.

UEM Land Holdings Bhd hopes to seal joint venture (JV) deals with major property developers in India, Vietnam and Myanmar by year-end, as part of its aspiration to become a global property player by 2015.

Managing director (MD) and chief executive officer (CEO) Datuk Wan Abdullah Wan Ibrahim said the company is now in discussions with the developers.

"It will be good if we can ink a deal with each party by year-end. Our aim is to have a strong regional presence," he said yesterday.

Wan Abdullah said UEM Land, which is the property development arm of state-owned Khazanah Nasional Bhd, has big targets as it approaches 2015 and 2016.

By then, it hopes to achieve a much higher revenue and net profit, with more land in its pocket, he said at the MIDF Investment luncheon talk. Also present were UEM Group Bhd MD and CEO Datuk Izzaddin Idris and MIDF group MD Datuk Mohd Najib Abdullah.

The acquisition of Sunrise had increased UEM Land's landbank in prime areas of central Kuala Lumpur, Mont Kiara and Seri Kembangan.

For the financial year ended December 31 2011, UEM Land posted a net profit of RM301.7 million on revenue of RM1.7 billion, up 55.1 per cent and 261.5 per cent, respectively, from 2010 financial year.

UEM Land's headline KPIs (key performance indicator) for 2012 is to launch RM4.5 billion worth of projects and achieve property sales of RM3 billion.

"We are looking at net profit growth of 40 per cent, and return of equity of 10 per cent. By 2015, you can imagine the numbers we are targeting," Wan Abdullah said.

UEM Land's current projects include East Ledang and Puteri Harbour in Nusajaya, Johor; Symphony Hills in Cyberjaya; 28 Mont Kiara, Arcoris Mont Kiara, Angkasa Raya and Summer Suites in Kuala Lumpur; and Quintet in Richmond, Canada.

Its partners for some of the developments are Bandar Raya Development Bhd, Sime Darby Bhd, UM Land Bhd, Gamuda Bhd, MCL Land and Emkay Group.

Wan Abdullah also said that UEM Land is looking for more strategic partners to undertake land development in Nusajaya, especially at the Southern Industrial & Logistics cluster to up the ante.

By Business Times

Saturday, March 24, 2012

Tropicana Ivory’s RM10bil Penang World City to feature diverse cultural components

Low: ‘We need a huge number of Penangites to call World City their home.’

GEORGE TOWN: Tropicana Ivory Sdn Bhd's (TISB) RM10bil Penang World City (PWC) project in Bayan Mutiara will have affordably priced high-rise units and a world culture' component, featuring different cultural residential enclaves.

TISB is a joint-venture company in which Dijaya Corporation Bhd holds a 55% stake, while Ivory Properties Group Bhd the remaining 45%.

Ivory group chairman and chief executive officer Datuk Low Eng Hock says about 15% of the properties for the 800 to 1,000 high-rise units for the first phase will be priced between RM300,000 and RM500,000, depending on the built-up area which ranged between 600 sq ft and 800 sq ft.

The first phase, to be located on a 10-acre site and scheduled for launch in the third quarter of 2012, will have a gross development value (GDV) of around RM600mil to RM700mil.

Subsequent phases for PWC will also see 15% of the properties priced in the affordable range of between RM300,000 and RM500,000, Low adds. Low said the group might consider using the plot ratio guidelines introduced in 2010 for the island to build medium-priced properties.

Under the revised guidelines of 2010, developers have to allocate 5% of the total units in a development scheme to be priced at RM200,000, 10% to be priced at RM300,000, and another 5% not exceeding RM500,000.

The affordable components were in the planning of the entire master plan as a value-added component from the very early stage, even during the tender exercise, according to Low.

“As we are planning for a world class city within World City, economies of scale is of the essence.

“In order for this to happen, we need a huge number of Penangites to call World City their home.

On the world culture' component in PWC, Low says there will be residential enclaves where the properties will reflect the architectural and cultural themes of a particular country.

“For example, we will create Chinese, Korean, Middle Eastern and European villages in PWC, so that the properties can be marketed in that particular country through an appointed real estate agent.

“We want to create a world culture to attract tourism and foreign investors and to differentiate PWC from the other mega-development projects on the island.

“These parcels will be solely for en-bloc sales to expatriates,” he says.

On the impact of the global slowdown on PWC, Low says at present the group has not felt the impact of the global slowdown yet, at least not in the financial and real estate sectors.

“Our banks are well positioned and the central bank played a very proactive role to mitigate any possible impact or threat to our economy. The scale of foreign direct investments is very encouraging not only for Penang but for Malaysia as a whole,” he says, adding that the group does not foresee any slowdown in the next two to three years. “In fact, property prices in Penang are still very attractive and have yet to reach its peak. Many magazines, including those from Hong Kong, have been mentioning and promoting Penang as the ideal home destination.

“Investors from China, Japan and Korea, for instance, are very much interested in coming to Penang, particularly in the aftermath of the Japan earthquake and tsunami,” he notes.

Meanwhile, on Ivory's plans for 2012, Low says the company is targeting to launch projects worth approximately RM1.4bil in GDV this year, including The Latitude in Mount Erskine, Penang Times Square phase three and phase four, City Mall and City Residence in Tanjung Tokong.

“The company is targeting to rake in sales of some RM800mil this year.

“Last year, we only booked RM121.8mil of sales for completed and on-going projects besides having unbilled sales of RM227mil to be realised over these two years. We are expecting higher sales this year since we have more projects to offer this time and not forgetting the much anticipated PWC project,” he adds.

Last July, Ivory won the right to purchase and develop the site in Bayan Mutiara after edging out four other parties, including SP Setia Bhd, which were bidding for the land. Ivory won the bid after offering the highest price to buy the land for RM240 per sq ft or RM1.072bil for the entire site, securing with it the right to develop on the existing 67.56-acre site and another 35 acres that will be reclaimed over the next three years.

To date, about RM22mil or 2% had been paid as earnest deposit for the land. The remaining downpayment of RM80mil will have to be paid on or before April 10. In the agreement with Dijaya Corporation Bhd, Ivory is the turnkey builder for PWC and will thus be entitled to 48% of the project's gross revenue with the amount due to the company estimated at RM5bil.

By The Star

UOA banks on strategic projects

Khor: ‘It is our strategy to continue with our business model of having smaller parcels of land and building good quality projects at our own pace, instead of rushing through projects which may compromise on quality.’

PURSUING pocket developments in mature neighbourhoods will be the forte of UOA Development Bhd to build up a stronger presence in the Klang Valley property market.

UOA chief operating officer (development) David Khor says the Kuala Lumpur-based developer is also looking for opportunities to tap new growth markets like Penang and Johor.

Although the company's cash pile of some RM300mil and borrowing of only RM10mil would mean it has leeway to resort to bank borrowings should it decide to make sizeable land acquisitions, UOA is not in a hurry to ramp up its gearing because it prefers to acquire strategic parcels.

Khor says the 40 acres of undeveloped land in Bangsar South and another 60 acres in other parts of the Klang Valley will keep the company busy for the next seven years.

“It is our strategy to continue with our business model of having smaller parcels of land and building good quality projects at our own pace, instead of rushing through projects which may compromise on quality,” Khor shares with StarBizWeek.

Smaller plots of land will mean a shorter turnaround time of between two and three years (for high-rise developments); and being located in mature locations also ensures a better premium and margin for its properties.

UOA projects yield net margins of about 30%.

He says the other option is for the company to form joint ventures with landowners, and preliminary negotiation is underway for two potential sites in the Klang Valley.

The UOA group also has a large presence in commercial development.

It has completed quite a number of office buildings of which six have been injected into the UOA real estate investment trust (REIT) which currently has an asset value in excess of RM1bil.

UOA Ltd, which is listed on the Australian Stock Exchange, owns 68% of UOA Development and 47% of UOA REIT.

Completed office buildings in Bangsar South – UOA’s flagship project.

Khor says UOA has about 100 acres of undeveloped landbank in the Klang Valley, with 40 acres in Bangsar South, and the balance in Kepong, Taman Desa, Segambut, OUG and Glenmarie.

Last year, it bought three parcels of land six acres in Sri Petaling, and 10 acres each in Segambut and Kepong.

Meeting market needs

The company recorded RM850mil in sales in 2011 and is expecting double digit growth in 2012.

On new project plans, it has lined up four to five projects worth a total gross development value (GDV) of RM1.5bil to be launched in the next12 months.

Khor concurs with industry observers that the high-end condominium market is moving into a glut situation, with a high number of projects scheduled for completion these one to two years.

“The over-supply situation is particularly acute in condominiums with a large built-up of more than 2,000 sq ft, when actually demand is greater for average sized units of between 1,000 sq ft and 1,200 sq ft,” Khor observes.

He points out that the issue of affordability could be one of the reasons for this situation, following Bank Negara's directive to banks to decide on the quantum of loan approved based on a borrower's net income instead of the previous method of using gross income.

“The imposition of a maximum loan to value ratio of 70% for third time borrowers has also impacted on the affordability level of property buyers.

“In such a situation, there is a need for developers to plan for more average sized houses that are more affordably priced at around RM400,000,” Khor notes.

Flagship project

Going forward, he says UOA would be focusing on that market range and designing its projects with more average sized residences to fit the affordability level of buyers.

Khor notes that UOA is among a handful of local developers that have undertaken projects under the build-then-sell (BTS) system.

Its two residential projects Villa Yarl and Halimahton were completed before they were launched for sale in 2007.

It has also completed a few boutique residential projects including Villa Mont'Kiara in Mont'Kiara and One Desa Residence in Taman Desa.

Khor says the company's flagship project is the 60-acre Bangsar South, an integrated mixed use development located on the former Kerinchi squatter colony, which is off the Federal Highway.

The land was acquired at RM35 per sq ft back in 2005, and today, the market price has reached RM300 per sq ft.

Khor says Bangsar South will comprise 29 office blocks, a retail block, and seven residential blocks with an estimated gross development value in excess of RM8bil.

So far the company has sold RM620mil worth of boutique office towers of 10 to 11 storeys to corporate buyers who will have the naming rights for the property.

The selling price for the office space is around RM800 per sq ft while the asking rental rate is RM5.50 per sq ft.

The residential properties were opened for sale since 2007 and so far RM476mil have been sold.

Khor says UOA will be improving the infrastructure access between the residential and commercial precincts by widening the roads, and has upgraded the Universiti LRT station.

Walking pavements and sheltered pavilions have also been built.

According to him, the Bangsar South project will continue to be the main growth driver for the company over the medium to long term.

“Going forward, the development in Bangsar South will remain the company's focus as it will contribute positively to the company's bottomline over the next seven years,” he adds.

By The Star

State to maintain low-cost apartments to improve quality of life

Improving facilities: Low-cost flats need to be spruced up to make it more liveable.

The state government has given priority to improving the quality of life of residents at low-cost apartments through its Caring Government for Residents’ Improvement Aid (Ceria) scheme.

Under the scheme, the state will repair lifts, roofing and water tanks at the flats as well as other issues.

Housing, Building Structure Administration and Squatters committee chairman Iskandar Abdul Samad said the state had agreed to share 80% of the cost and the buyers 20% for repairs at the low-cost apartments.

“This way, the apartment buyers will have a sense of belonging to the facilities in their buildings.

“This also enables the buyers to know the cost of maintenance and how much the Government is paying for it,” he said.

Iskandar added that the Ceria scheme started in June last year and the state had spent RM9.1mil so far.

“Last year, the state contributed RM5.1mil while the buyers paid RM1.8mil.

“The problems in the low-cost apartments are leaking roofs, lift breakdown, rusting water tanks, broken fencing, clogged drains, potholed roads, rundown playgrounds and sewage.

“In the state executive council meeting on Oct 27 in 2010, it was decided there will be a 20% increase in parking bays at low-cost housing projects to address the shortage at such schemes,” said Iskandar when answering a question from Haniza Mohamed Talha (PR-Taman Medan) on the state’s plan for housing for former squatters and the strategy to solve issues like of parking bay shortage.

By The Star

Pembinaan BLT sees strong sukuk demand

MEDIUM-TERM NOTES: Firm announces third series of a 25-year programme to raise up to RM10 billion

PEMBINAAN BLT Sdn Bhd, a property developer owned by the Ministry of Finance, expects the issuance of its third series of Islamic bonds to be well received by the investment community.

"We expect great demand for our sukuk. We expect the rates to be even better than the second series. It (the rates) has been showing downward trend, which is good.

"I think we are also hitting the market at the right time. The market has a lot of interest in high-grade papers this time around, but there are not many (such papers) at the moment," managing director and chief executive officer Mohammed Redza Mohd Yusof told newsmen after announcing the third series of Islamic Medium Term Notes (IMTN) yesterday.

The fund-raising exercise was part of Pembinaan BLT's 25-year IMTN programme of up to RM10 billion, to be raised by its wholly-owned unit, Aman Sukuk Bhd.

The first series of the sukuk issue, which involved RM1.1 billion, was priced between 3.73 per cent (three years) and 5.05 per cent (15 years).

The second series, which involved RM1.16 billion, was priced between 3.6 per cent (three years) and 4.45 per cent (15 years).

The company has 74 projects in hand worth RM7.6 billion. It expects to complete all the projects by 2015.

"So far, we have completed 47 projects worth RM4.28 billion and another 27 projects ongoing," he said.

Pembinaan BLT was formed in 2000 to build quarters and facilities for the Royal Malaysia Police.

Under its business model, it is responsible to build and secure its own financing.

The government will pay Pembinaan BLT in stages only upon completion of the quarters and facilities.

The company hopes to secure more jobs over the near term.

"We remain very optimistic. We have already received in black and white and are currently ironing out some details. There are many more police facilities to be developed all over the country.

"We are looking at RM600 million to RM700 million of jobs, comprising 10 to 15 projects," Mohammed Redza said.

By Business Times

Glomac posts RM21.9m net profit in Q3

HEALTHY GROWTH MOMENTUM: Firm well on track to achieve target sales of RM500m for full year

GLOMAC Bhd registered a net profit of RM21.9 million in its third quarter ended January 31 2012, up 32.7 per cent compared to RM16.5 million in the previous corresponding quarter.

In a statement, the property group said its net profit attributable to shareholders for the first nine months of its financial year rose 32.2 per cent to RM63.5 million from RM48 million achieved in the previous corresponding nine-month period.

This surpassed the company's full-year net profit attributable to owners of the company of RM63 million in its previous financial year ended April 30 2011.

Consequently, Glomac's earnings per share for the nine-month period jumped 34 per cent to 11 sen from 8.2 sen previously, it added.

Glomac has proposed an interim dividend of 2.75 sen per share less 25 per cent tax for the current financial year ending April 30 2012, higher than the 2.25 sen interim dividend paid in the previous financial year.

"We are riding on a healthy growth momentum. Not only have our results continued to excel, we chalked up property sales of RM343 million in this nine-month period, well on track to achieve our target sales of RM500 million for the whole financial year," said Glomac Group executive chairman Tan Sri F.D. Mansor said.

He added that the group's townships are thriving with launches in both Bandar Saujana Utama and Saujana Rawang enjoying good take-up rates.

F.D. Mansor also said that the company's current projects, namely Glomac Cyberjaya 2 and Glomac Centro have also been well received.

Glomac Cyberjaya 2, which has total gross development value (GDV) of RM130 million, was launched in November last year.

Glomac Centro, meanwhile, which will be launched later this month, will have a GDV of RM370 million.

"We are also looking forward to the upcoming launch of our 39-storey Reflection Residences, a freehold serviced apartments project with a GDV of RM270 million in Mutiara Damansara," he said.

F.D. Mansor said Glomac has built up a substantial "war chest", which will allow it to acquire new landbank.

Glomac's balance sheet, as at January 31 2012 stood at RM353.5 million in cash and cash equivalents.

The company recently required two parcels of leasehold land totalling 80ha for RM44 million, adjacent to Bandar Saujana Utama. This would raise its total estimated GDV of current and future projects to RM6 billion.

Meanwhile Bernama reports that Glomac Bhd's sales are expected to pick up in the fourth quarter of the 2012 financial year, with RM640 million worth of new launches by end-March, said Maybank Investment Bank.

In a research note yesterday, it mentioned the launches of Reflection Residences and Glomac Centro shop offices and serviced apartments, both in the Klang Valley.

"We believe projects in good locations such as Reflection Residences will continue to attract buying interest," it said.

Maybank Investment said Glomac has locked in RM343 million worth of property sales in the nine months of financial year 2012 (FY12), meeting only 69 per cent of its FY12 target.

It said Glomac's 2012-14 earnings would be driven by RM418 million in property sales achieved in FY11 and new launches worth RM1.4 billion this financial year.

Maybank Investment has maintained its 'buy' call on Glomac with a target price of 96 sen.

By Business Times

Glomac posts higher profit on property sales

PETALING JAYA: Glomac Bhd posted a higher net profit of RM21.9mil for its third quarter ended Jan 31, 2012, up 32.7% from RM16.5mil recorded in the previous corresponding quarter.

Revenue decreased to RM145.2mil from RM176.5mil previously.

For its nine-months ended Jan 31, 2012, the company achieved a net profit of RM63.5mil, a 32.2% increase, compared with RM48mil previously. Revenue dropped to RM407.9mil from RM443.7mil.

In a statement, Tan Sri Datuk FD Mansor said the company was riding on a healthy growth momentum. Not only have our results continued to excel, we chalked up property sales of RM343mil in this nine-month period.

“We're well on track to achieve our target sales of RM500mil for the whole financial year,” he said.

The group is also preparing for the upcoming launch of its 39-storey Reflection Residences, a freehold serviced apartments project with a gross development value of RM270mil in Mutiara Damansara.

“We have also built up a substantial war chest,' allowing us to seek out opportunities for new landbank acquisition to maintain the growth strategy in our development business.” he said.

The company recently acquired two parcels of leasehold land totaling 80.94ha for RM44mil, which is adjacent to Bandar Saujana Utama.

By The Star

GuocoLand expects 18% yield from PJ City, PJ Corp acquisitions

KUALA LUMPUR: GuocoLand Malaysia Bhd expects a firm yield of 18% from the recent related party transaction to purchase PJ City Development Sdn Bhd and PJ Corporate Park Sdn Bhd from Guoline Asset Sdn Bhd and MPI Holdings Sdn Bhd respectively.

GuocoLand’s shareholders yesterday approved the resolution at an extraordinary general meeting held at Wisma Hong Leong because of the good prospects of these developments given their locations, its senior public relations manager, Leslie Lim, said.

“The company (GuocoLand) expects per annum returns of 18% from these developments and of course this will be dependent on the economic situation as well,” Lim told StarBiz, citing some research documents.

After the approvals, GuocoLand will proceed and buy PJ City for RM29.79mil from Guoline Asset; and will then purchase PJ Corp from MPI Holdings for RM258,000.

These companies house developments which are mainly parked under PJ City, including commercial land of 3 acres which already has existing buildings on them as well as an industrial land of 7.75 acres fronting Jalan 225, PJ.

GuocoLand said it would develop the industrial land for factories after tenancy agreements for the open air carpark and the cement batching plant expires on March 31, 2012.

The purchases of PJ City and PJ Corp would be funded entirely from borrowings which would increase its gearing ratio basing on its shareholders’ funds from 1.13 to 1.20, the shareholder statement said.

The purchase of PJ City also took into consideration the unaudited net tangible assets (UNTA) of PJ City of RM8.77mil as at Oct 31, 2011 and after adjusting for the total market value of the land at RM72.5mil, it said.

“Guoline Asset is a wholly-owned subsidiary of Hong Leong (Co) Malaysia Bhd (HLC) and its original cost of investment in PJ City was RM5mil,” it added.

The purchase of PJ Corp also took into consideration of the UNTA at RM258,375 as at Oct 31, 2011 while there was no valuation had been undertaken on the two units of low-cost houses owned by PJ Corp.

MPI’s original cost of investment in PJ Corp was RM265,000 which was made on May 4, 2011.

By The Star

Perak Corp unit enters joint venture

PETALING JAYA: Perak Corp Bhd subsidiary PCB Development Sdn Bhd has entered into a heads of agreement with Sanderson Project Development (Malaysia) Sdn Bhd (SPDM) for a joint venture to develop and operate an international standard animation theme park, resort hotel and serviced apartments in Ipoh. The project has a gross development value of RM506.7mil.

Perak Corp told Bursa Malaysia yesterday that the intended equity participation in the joint venture shall be 20% to be held by PCB Development and the balance 80% by SPDM.

“SPDM will negotiate with third parties in relation to raising funds for the JV to develop the project,” it said.

PCB Development is the land owner and developer of BioD City at Bandar Meru Raya, Ipoh. BioD City is a master-planned development comprising residential, commercial, retail and leisure precincts.

SPDM is a special-purpose vehicle set up particularly for the project by Sanderson Group Pty Ltd group of companies, which is engaged in the design, construction and operation of international tourist and leisure destinations around the world.

“The rationale of the project is to fulfil the BioD initiative development as well as to complement the developments of BioD City and BioD Eco-Tourism undertaken by the PCB Group to facilitate the national strategic policies providing various conducive environments for optimal economic growth,” Perak Corp said.

The heads of agreement will enable the contracting parties to negotiate on an exclusive basis the formation of the joint venture for the purpose of developing and operating the project.

The joint venture will enter into a turnkey construction contract with SPDM, or a company under the Sanderson Group, to provide turnkey construction services to develop the project which will include the design, fabrication, construction, project management and operations establishment of the project.

By The Star

PCB, Sanderson to cooperate on RM507m project

IPOH: Perak Corp Bhd (PCB) says its unit, PCB Development Sdn Bhd, has teamed up with Sanderson Project Development (Malaysia) Sdn Bhd to develop an animation theme park, resort hotel and serviced apartment here with a gross development value of RM506.7 million.

In a filing to Bursa Malaysia, PCB said a joint venture would be formed between the two partners, with PCBholding a 20 per cent stake and Sanderson Project the balance.

PCB is the developer of BioD city at Bandar Meru Raya here, a key development comprising residential, commercial, retail and leisure precincts. Sanderson Project is a special purpose vehicle set up particularly for the Perak venture by Sanderson Group Pty Ltd.

By Business Times

PNB projected to get more than 5.5% yield from latest London office

PETALING JAYA: Permodalan Nasional Bhd's (PNB) latest and fourth purchase of a London office building is expected to have a yield exceeding 5.5%, a source familiar with the deal said.

PNB is expected to seal the purchase of Woolgate Exchange at 25, Basinghall Street in London by the end of this month, bringing its total investment in UK properties to more than £1bil in a span of four months.

On Thursday, group president and chief executive officer Hamad Kama Piah Che Othman told Bernama that “PNB has changed”.

“In the past, it was shares but now we are looking at real estate which would bring in stable returns,” he said.

Inclusive of its purchase of Santos' Place, in Brisbane, Australia, PNB has spent RM4.9bil on both continents. PNB bought Santos' Place for A$290mil in August 2010. Since then, it seems to have shifted its focus to the prime London.

According to several websites, the principal tenant in Woolgate Exchange is German bank West LB. The lease is until 2020. The next rent review is in three years, in 2015.

According to two London-based websites, the selling price for Woolgate Exchange was set at £290mil (RM1.4bil). The 350,000-sq-ft office building was constructed in 2000 and has an annual rent of more than £7mil.

In 2006, the same property was purchased by Irish property investment group D2 Private for £325mil when British property prices were on an uptrend.

The nine-storey building, which comes with a basement floor, is located within 150 metres of the Bank of England, a salient feature of the property considering that London is famed for its financial centre status.

PNB has attracted the interest of the British property fraternity when it bought a 12-storey office space in Milton & Shire House on 1 Silk Street for £350mil in December.

Earlier this month, it acquired two other properties, 90 High Holborn and One Exchange Square, from German fund manager KanAm for £500mil.

By The Star

Friday, March 23, 2012

Naza TTDI expects RM315m sales at property carnival

SHAH ALAM: Naza TTDI Sdn Bhd, the property development arm of Naza Group of companies, expects to sell RM315 million worth of properties at its first ever property carnival this weekend.

The developer of the RM15 billion KL Metropolis project in Kuala Lumpur will offer buyers several incentives for some of its signature developments in the Klang Valley.

The incentives include attractive rebates and low down payments, in addition to fast loan approval.

Some of the prized properties that will be on offer during the carnival include residential units at TTDI Alam Impian in Shah Alam, TTDI Grove in Kajang and The Valley in Ampang.

For TTDI Alam Impian, Naza TTDI is offering two- and three-storey linked residences in Zircona, linked and super-linked residences in Aquina and linked residences in Sephira.

At TTDI Grove, units available include two-storey link homes in Dhania, Ellenia and Azalia.

The Valley will introduce three-storey linked homes and exclusive villas.

There will also be commercial units for its projects like TTDI Adina in Shah Alam, the second phase of the TTDI Dualis Business Centre in Equine Park, Seri Kembangan, and TTDI Grove Square 1.

Combined, 276 residential and commercial units will be available for sale during the two-day carnival.

The property carnival will be held from March 24 to March 25 at the TTDI Adina Sales Gallery in Section 13, Shah Alam.

By Business Times (by Sharen Kaur)

PNB to buy fourth London property

PERMODALAN Nasional Bhd (PNB) is poised to seal its fourth major property acquisition in London, which will put its overseas spending spree in recent times to well over RM5 billion.

According to its president and group chief executive Tan Sri Hamad Kama Piah Che Othman, the country’s largest fund owner and manager was expected to conclude the deal by the end of the month, “We can’t reveal too much at the moment as it is yet to be completed,” Hamad Kama Piah said after announcing the income distribution of four of PNB’s funds here yesterday.

He said more overseas acquisitions were imminent as PNB looked for “worthy” properties that could yield sustainable income.

“We focused more on equity before this but we are now looking at investing in the property market,” he said, adding that London properties were not only cheap but also offered good prospects.

“The tenants of these office buildings have signed 10-year to 15-year leases. They will notsimply exit,” he said.

Early this month, PNB bought the major London landmark One Exchange Square in the financial district and 90 High Holborn for
?550 million (RM2.67 billion).

The buildings are currently home to the European Bank for
Reconstruction and Development and law firm Olswang Solicitors, respectively.

Earlier this year, PNB snapped up Milton and Shire House in Silk Street for ?350 million (RM1.7 billion).

Hamad Kama Piah said including its property in Brisbane, Australia, PNB had spent about RM4.9 billion on property deals abroad so far.

The property in Brisbane, an upmarket office block called Santos Place, was bought in 2010 for more than A$290 million (RM926

Asked if PNB was eyeing the Europe and United States property markets, he said: “Yes and no. We will reveal when we have something concrete.”

On whether PNB would be buying properties in countries it had offices in, Hamad Kama Piah said that would be a wise decision.

PNB currently has offices in London, Singapore and Tokyo.

By Business Times

PNB, Liew now collectively own 78.9pc stake in SP Setia

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) and Tan Sri Liew Kee Sin now collectively own 78.95 per cent of SP Setia Bhd.

This is after the mandatory general offer (MGO) for SP Setia by PNB and Liew, as joint offerors, closed on March 19 this year.

Therefore, SP Setia will request to Bursa Malaysia for an acceptance of a lower public shareholding spread, PNB and Liew said in a joint statement yesterday.

The aggregate shareholding of PNB and the unit trust funds under its management increased from 32.99 per cent in September 2011 to 70.71 per cent as at March 19, while Liew maintains his 8.24 per cent direct stake in SP Setia.

The MGO was triggered in September last year when PNB and parties acting in concert with it raised their collective stakes to 33.17 per cent, slightly above the 33 per cent threshold for triggering MGOs.

PNB and Liew yesterday reaffirmed their commitment to maintaining SP Setia's listing and stature as the premier property developer on Bursa Malaysia.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman and Liew said they will also work with advisers and SP Setia to explore all possible options to restore its public shareholding spread.

"We are happy that this exercise concluded satisfactorily. We believe that SP Setia will continue to perform well, and be a significant contributor to the investment portfolio of PNB and the unit trust funds under its management, which will benefit our 10.7 million account holders," Hamad Kama said in the statement.

Liew, meanwhile, said that the joint offerers look forward to continuing building on the strong success of SP Setia by strengthening its property sales. "We are confident we will be able to see sustained growth in the remaining quarters of this financial year," he added.

By Business Times

SP Setia posts record-breaking first quarter

SHAH ALAM: SP Setia Bhd yesterday announced a record-breaking quarter with sales at RM933 million for its first quarter ended 31 January.

This was the group's highest ever sales in a single quarter and a 27 per cent increase from its first quarter FY2011 sales.

As at February 29 this year, SP Setia's sales for the first four months of the financial year totalled RM1.23 billion, another new record, and a 29 per cent increase from the corresponding period last year.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said the strong performance indicates that the group is well on target to achieve and deliver its FY2012 sales target of RM4 billion.

By Business Times

Condo buyers want stalled project to be revived

Sad state: The Platinum Damansara Condominium which was left uncompleted.

Frustrated by the delay in reviving the Platinum Damansara Condominium project, about 30 buyers held a protest in Ara Damansara last Tuesday to voice their grievances.

The project, consisting of four blocks of service apartments and a commercial building, stalled in 2007 and the buyers are having a tough time finding interested parties to revive it.

It was once promoted as a high-end service apartment in Damansara but today it is in ruins with squatters taking over the development, posing health and security risks for the surrounding township.

Abandoned Platinum Damansara Condominium Purchasers Association committee member Noel Vong said there were many court cases that delayed the project even further.

“However, last year we managed to get an interested party to revive the project.

“We hired a consultant and scheme manager to draw up a scheme of arrangement with the developer,” he said.

The move was supported by 410 buyers out of 422 who attended a meeting on June 14 last year.

There are a total of 680 buyers.

Vong said the scheme had the support of the bank which provided the finance as well.

“On June 17 last year, the Shah Alam High Court approved the scheme but almost immediately after the decision, several parties filed claims to set aside the scheme.

“After several court hearings a decision was made by the High Court on Nov 30 to set aside the scheme and we were back to square one,” added Vong.

The buyers in turn filed an appeal and the case will be heard on April 5.

A buyer, Paul Adaikalam, said many purchasers had been declared bankrupt as they were are unable to pay the bank loans.

“Each buyer pays an average of RM50 per day in interest and there are so many stories of civil servants losing their jobs, businessmen being blacklisted and pensioners who invested now left without a home,” he added.

Vong said the revival cost had also increased, forcing buyers to fork out an extra 25% for work to be completed.

“It was stated that the project was 80% complete when it stalled but today due to vandalism, the building looks only 30% complete,” he added.

By The Star