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Thursday, May 31, 2012

Glomac near deal to sell complex en bloc

KUALA LUMPUR: Glomac Bhd may ink an en bloc deal soon with an investor looking to buy its integrated commercial complex in Kelana Jaya, which has a gross development value (GDV) of close to RM300 million.

The complex, which comprises a high-rise office tower, an office suite and a mall, will be developed on a 1.45ha land, previously used by Kelana Seafood Centre.

According to group managing director and chief executive officer, Datuk FD Iskandar, Glomac is currently in talks with two potential buyers.

"The investors, a combination of both foreign and locals, are looking at the project in totality," he said yesterday on the sidelines of Invest Malaysia.

Meanwhile, Glomac, a medium-size developer with market capitalisation of around RM550 million, expects to increase the value of existing projects in hand from RM1.4 billion to RM7.4 billion, as it introduces new developments.

Glomac is buying more land in Greater Kuala Lumpur, despite global economic uncertainties and volatilities in the market.

The company is expected to close a deal soon to buy 84ha in Puchong for RM77 million. It is also buying 84ha in Sungai Buloh for RM45 million, to expand its ongoing Bandar Saujana Utama township there.

"Barring any unforeseen circumstances, we hope to launch the project in Puchong by year-end, or early next year. The project will have a GDV of RM2 billion. We expect another RM2 billion from the extension of Bandar Saujana township," Iskandar said.

Iskandar is bullish on the property market, adding that demand for landed properties is still going strong.

"Property is the only commodity, where 97 per cent of the time, it grows in value. People will stop buying only if they don't have confidence in the economy.

"Although the world economic is struggling, property demand, especially for landed properties, is still holding very strong," he said.

On earnings, Iskandar said Glomac will post record net profit this year. For the first nine months of its financial year, net profit rose 32.2 per cent to RM63.5 million compared to the previous corresponding nine-month period.

This surpassed the company's full-year net profit of RM63 million, for fiscal 2011.

By Business Times

RM48bil gross development value for SIC project

GuocoLand MD says the project destined to be a model city of the future

PETALING JAYA: GuocoLand (M) Bhd, the property arm of Hong Leong Group, will be developing the Sepang International City (SIC) with a gross development value of RM48bil.

GuocoLand said in a statement that the proposed project would span about 1,620ha in the southern corridor of Selangor and would be developed over 18 phases.

Full completion of the project is expected to take 15 to 20 years.

“The seafront development will include commercial, business, residential and leisure developments, a hub for institutions of higher learning and a large world-class urban park that will be modelled after the Central Park in New York City,” it said.

GuocoLand managing director Yeow Wai Siaw said the SIC would serve as the catalyst for the growth and future development of Sepang and its surrounding areas.

“SIC is destined to be a model city of the future, not only in Malaysia but in this region. We are very honoured to undertake our second entry point project (EPP) initiative,” he said.

The EPP is part of the new 21 Economic Transformation Programme (ETP) projects announced by Prime Minister Datuk Seri Najib Tun Razak at an ETP progress update briefing earlier this week.

More than 500,000 people are expected to live and work in the SIC.

The project would be supported by direct transport links to the KL International Airport, Kuala Lumpur and other major points in greater Kuala Lumpur and the Klang Valley, it added.

GuocoLand's other projects include Damansara City in Damansara Heights, Commerce One along Old Klang Road, the Emerald master-planned township in Rawang, PJ City Corporate Hub in Petaling Jaya and Amandarii in Kajang.

By The Star

Mah Sing scouting for additional land with potential GDV of RM1.4bil

KUALA LUMPUR: Mah Sing Group Bhd is aiming to acquire additional land with a potential gross development value (GDV) of RM1.4bil this year.

“We have acquired land with GDV of RM3.63bil so far this year, which is about 73% of our target of RM5bil. We have seven months to go, and we definitely have to lock in more land to fuel our long-term growth,” said group managing director and chief executive officer Tan Sri Leong Hoy Kum on the sidelines of the Invest Malaysia 2012 conference.

This year, Mah Sing has acquired land for projects consisting of M Residence 2 in Rawang, Sutera Avenue in Kota Kinabalu, and Southville City which is a planned 412-acre township in Bandar Baru Bangi.

Leong pointed out that Mah Sing currently has 39 residential, commercial and industrial projects across Greater Kuala Lumpur, Johor, Penang and Sabah, with remaining GDV and unbilled sales of RM18.2bil.

The group’s executive director Steven Ng Poh Seng said 70% of the remaining GDV would be from projects in the Klang Valley.

Ng also pointed out that the group has unbilled sales of RM2.48bil as of March 31.

“In acquiring more land, we also make sure we juggle our cash flow well and that the group’s net gearing does not exceed our internal target of 0.5 times,” said Ng.

Ng said the group’s net gearing was still manageable even after the recent RM333.26mil acquisition of 412 acres targeted for a mixed township near Bangi, Selangor.

“We have four to five months to pay for the land. Then we have about RM300mil cash coming in (from delivery of vacant possession of property units). Our gearing is always very manageable because of our quick turnaround business model.” Presently, the group has a land bank of 1,538 acres.

“Even now, we have enough land (to develop) for the next seven to eight years,” said Leong.

As at May 15, the group has achieved property sales of slightly above RM1bil, which is 40% of its 2012 sales target of RM2.5bil.

The bulk of sales were in the Klang Valley (82%), followed by Johor Baru (10%) and the balance from Penang.

Leong said he was “selectively optimistic” regarding the property market this year.

“We need to fit supply to demand. For example, we focus more on mass market products priced below RM1mil such as small serviced residences or link homes,” said Leong.

He also said the group was exploring potential opportunities in the region.

By The Star

Mah Sing expects more foreign buyers

KUALA LUMPUR: Mah Sing Group Bhd, Malaysia's second largest listed developer by sales value in 2011, expects more foreign buyers for its properties, and the driver will be the new 21 projects announced recently, with committed investment of RM20.46 billion.

"These projects will attract more foreigners to invest in Malaysia's real estate sector. By having the right products in good locations, we will be able to attract them," said Mah Sing group managing director cum group CEO, Tan Sri Leong Hoy Kum.

Leong said despite the gloomy global economic picture, Mah Sing experienced strong take-up from foreign property buyers in the last two years, increasing from five per cent to around 10 per cent.

They are mainly buying into projects like M City at Jalan Ampang, Icon City in Petaling Jaya, and Southbay Plaza in Penang, he said yesterday, at the sidelines of Invest Malaysia.

Leong said Mah Sing is setting up offices in Jakarta, the UK and Singapore to woo foreign buyers here. It already has an operating office in China to do that.

On the property market outlook, Leong expects robustness in selected segments. Leong expects stronger demand for properties, especially in gated and guarded schemes, priced above RM1 million, in Greater Kuala Lumpur.

Mah Sing currently has 39 residential, commercial and industrial projects in Greater KL, Johor, Penang and Sabah, with remaining gross development value (GDV) and unbilled sales of RM18.2 billion.

Some 30 per cent of its residential projects are in the RM1 million to RM3 million range, and they comprise mainly semi-detached homes and bungalows.

By Business Times

WCT bids for public infrastructure concessions

KUALA LUMPUR: WCT Bhd, construction, engineering and property outfit, has bid for public infrastructure-related concessions in exchange for land deals from the government, through a public-private partnership (PPP).

Through PPP, a government aims to secure investment and greater efficiency in the delivery of necessary public services in areas such as infrastructure, healthcare, and education by getting the private sector to take them on.

As an incentive, the government may offer concessions, tax breaks, or grants to the relevant private sector players to create a business case.

WCT manager for corporate affairs, Kenny Wong Yik Kae said the land deals will not only lift the group's property development activities, but construction order book as well.

"Getting more concessions especially under the Economic Transformation Programme is part of our way of broadening our construction profile," Wong said yesterday, at the sidelines of Invest Malaysia.

On the type of concessions that WCT has bid for, Wong said they are similar to the integrated complex at KLIA 2 in Sepang, Selangor.

WCT won last year a 25-year concession from Malaysia Airports Holdings Bhd, for privatisation of the construction, development and financing of the integrated complex. The complex will be constructed at a cost of RM530.3 million, funded via a combination of loans and shareholders equity.

By Business Times

Wednesday, May 30, 2012

Reasonably priced homes

The second phase of the Garden Heights residential development is located within Bandar Tasik Puteri (BTP) township in Rawang.

Indah Jaya Development Sdn Bhd, a subsidiary of Low Yat Group, will soon unveil the second phase of its Garden Heights residential development, in Rawang within the 2,670-acre (1,080ha), Bandar Tasik Puteri (BTP) township.

It comprises 123 units of valuefor- money double-storey terrace houses with a land area of 18ft by 75ft with a built-up area of 148.64sqm (1,600sq ft).

This guarded community known as BTP 4, spans an expansive 6.61 acres (2.68ha). The houses have four bedrooms and three bathrooms each.

Its proximity to the KL-Kuala Selangor Expressway (Latar Expressway) is poised to give the over 50,000 (BTP) residents valueadded benefit as a link road will be built to shorten the distance to the Kuala Lumpur city centre.

Indah Jaya Development marketing and business development senior manager Joseph Chia said currently BTP residents take about 30 minutes to get to KL via the North South Expressway, Latar Expressway and Guthrie Expressway.

“The Latar Expressway already exists, therefore we foresee that a link road in the future will provide greater convenience to residents and boost market appreciation,” he said, adding that Garden Heights Phase 2 is expected to be completed in 2014.

As landed properties are becoming few and far between, city dwellers have found comfort in suburban areas that are still within reach via carefully planned expressways.

The increasing demand for landed property continues to surge, especially for first-time homebuyers and families looking for a lifestyle upgrade.

Garden Heights Phase 2 homes comprise 123 units of value-for-money double-storey terrace houses.

Garden Heights Phase 2 is perfect for city dwellers who want to escape from the hustle and bustle of the city, and yet want a landed property within serene and natural surroundings. The cost of the two-storey terraces which are affordably priced ranges between RM290,000 and RM478,000. It offers long-term value for homebuyers and boasts spacious, modern designs with a 24ft (7.3m) driveway to fit two cars.

Aside from that, the renowned Bandar Tasik Puteri Golf & Country Club, neighbouring industrial facilities and the relatively new Aeon Anggun Rawang Shopping Centre which is 10 minutes away, adds to the market appreciation in BTP.

Future phases have been earmarked to comprise double-storey link houses, semi-detached, cluster homes and bungalows boasting modern architecture, in a safe environment within a 24-hour guarded community.

Bookings for Garden Heights Phase 2 started on May 26 with a fee of RM1,000. Prospective buyers will also enjoy early bird discounts, no legal fees for loan and Sales & Purchase Agreement (SPA) and Developer Interest Bearing Scheme (DIBS).

Low Yat Group is a well-diversified developer and investment group in Malaysia. The group, which was initially involved in private and government construction projects, has now diversified into trading, manufacturing, plantation, hotel and tourism industries in Malaysia, Japan, Australia, China and Indonesia.

For details or enquiries, e-mail Call 03-6034 5390 / 016-213 9311 or visit my

By The Star

IJM Land unveils RM11b township development

From left to right: SME TM executive vice president Azizi A Hadi, TM Selangor vice president Datuk Zaini Maatan, IJM Land Berhad chief executive officer and managing director Datuk Soam Heng Choon and Canal City Construction Sdn Bhd chief operating officer Shuy Eng Leong exchanging documents after the service agreement signing with Telekom Malaysia Berhad (TM) for high speed broadband in Bandar Rimbayu.

PETALING JAYA: IJM Land Bhd has unveiled its newest development the RM11bil Bandar Rimbayu township development which focuses on sustainable lifestyles and strong connectivity elements.

Bandar Rimbayu is a mixed-township spread over 1,879 acres close to Kota Kemuning.

“The Bandar Rimbayu township reflects IJM Land's vision of what townships of the future would look like. The green township concept is in response to the demand from residents of the future who are becoming increasingly concerned about giving back to the earth. Also, homeowners of the future do not just want a house, they want a residence complete with a holistic lifestyle, thus we are offering a carefully planned and designed township that emphasises better quality of life,” said IJM Land managing director and chief executive officer Datuk Soam Heng Choon.

In addition to green living, Soam said the connectivity was also very important for Bandar Rimbayu.

“This connectivity covers the physical where we make it convenient for residents to move around within the township and also beyond,” he said.

In conjunction with the launch of the project, IJM Land has signed a service agreement with Telekom Malaysia Bhd (TM) for the provision of high speed broadband (HSBB) infrastructure in Bandar Rimbayu.

“With the collaboration, we will be offering TM's HSBB service, UniFi, to residents of our first phase free of charge for one year,” he said.

Datuk Soam Heng Choon (left) and Shuy Eng Leong presenting the scale model of the Bandar Rimbayu township at the media preview.

Bandar Rimbayu's identity as a green township is further expressed via sustainable use of natural resources and environmental consciousness. Most notably, there will be more than 50,000 trees, palms, shrubs, flowering plants, aquatic plants, herbs and climbers around The Arc and Sales Gallery.

Divided into four precincts, Bandar Rimbayu consists of Flora, a mixed residential area, Fauna, a mixed residential area with amenities including shops and a school, Bayu, a 280-acre high-end waterfront residential development by the lakeside; and the commercial hub, which include a canal, town square and service apartments.

Bandar Rimbayu is targeted for completion within 15 years and will boast about 10,000 residential units. The launch of its maiden product The Chimes, consisting of 526 units of link homes, is targeted for the second half of this year.

By The Star

IJM unveils RM11b project

KUALA LUMPUR: IJM Land Bhd has introduced its newest property development, called Bandar Rimbayu, which has an estimated gross development value of RM11 billion.

Bandar Rimbayu is a mixed township project that spread over 761ha across Kota Kemuning in Shah Alam, Selangor.

"Designed with an emphasis on sustainable lifestyles for residents with strong connectivity elements, Bandar Rimbayu reflects IJM Land's vision of what townships of the future will look like.

"The green township concept is our response to the demand from residents who are becoming increasingly concerned about giving back to the earth," said IJM Land's managing director and chief executive Datuk Soam Heng Choon in a statement.

In conjunction with the launch of the development project, IJM Land also signed a service agreement with Telekom Malaysia Bhd (TM) for the provision of high-speed broadband (HSBB) infrastructure at Bandar Rimbayu.

"This service agreement with TM, Malaysia's No. 1 broadband provider, signifies our commitment in providing fibre (connection) to home facility... we will be offering TM's HSBB service, UniFi, to residents of our first phase free of charge for one year," Soam said.

The Bandar Rimbayu township is targeted for full completion within 15 years and will boast about 10,000 residential units in total.

The launch of its maiden product, The Chimes, is targeted for the second half of 2012.

By Business Times (by June Ramlee)

Sara-Timur in joint venture to build RM600mil project

KOTA BARU: Kuala Lumpur-based Sara-Timur Sdn Bhd will be developing the RM600mil Kota Baru Sentral@Tunjung on 40 acres in a joint venture with Tunjung Development Corp and Perbadanan Mentri Besar Kelantan.

It took Sara-Timur several years of planning to fully exploit the potential of the site so that investors can make the best from the new urban development. — PROFESSOR EMERITUS M ZAWAWI ISMAIL

Sara-Timur chairman Prof Emeritus Datuk M Zawawi Ismail said the project, which would be launched after Hari Raya in August, would incorporate elements of a modern lifestyle urban intelligent city.

The project includes a village shopping mall, convention and function mall, leisure center, cineplex, boutique hotels, service apartments, office suites, a library and housing residences located in Bandar Baru Tunjung.

Zawawi told reporters after witnessing the launch of the Rehda Exhebition here yesterday that the project would incorporate green technologies and attract investors from Kelantan as well as other states. It would be tailored to sustain economic growth.

“It took Sara-Timur several years of careful planning to fully exploit the potential of the site so that investors can make the best from the new urban development,” he said.

Zawawi also said Bandar Baru Tunjung has been selected as a new city to match the pace of Kota Baru town while the area would change over the next five years as environmentally-friendly features were incorporated.

Meanwhile, Sara-Timur founder and managing director John Loi Hieng Yee said in a statement that the company chose to support the new development because of the incredible impact it would make on the lives of families and the community.

He said the project provided attractive investment opportunities with the local government drawing private capital via a new strategy for urban redevelopment.

Sara-Timur was founded in 1995 in Kuching but relocated to Kuala Lumpur. Its projects include Sutera Harbour Resort and Sandakan Habour Square in Sabah, Kuala Lumpur City Centre, Sarawak State Stadium.

By The Star

SP Setia wants half of group revenue to come from overseas projects

KUALA LUMPUR: SP Setia Bhd is aiming for half of its revenue to come from overseas projects in five years.

“We want to be an international property player, not just a regional property player,” president and chief executive officer Tan Sri Liew Kee Sin said on the sidelines of Invest Malaysia 2012 conference.

Liew said property developments in Melbourne, Australia, and Singapore were expected to contribute RM700mil to the group's target of RM4bil in new property sales for its financial year ending Oct 31 (FY12).

SP Setia's Malaysian projects are expected to contribute about RM3bil to the FY12 sales target while its projects in Vietnam EcoLakes and EcoXuan are also expected to do well.

Liew told StarBiz that the group's Fulton Lane apartment development in Melbourne had achieved RM400mil sales since its launch last November, while its maiden project in Singapore, 18 Woodsville, had a 90% take-up rate since its launch in late April.

“About 75% of our sales in Melbourne are to Malaysians. More than half of the RM250mil sales in Singapore are to Malaysians. This is part of our two-pronged strategy, where we tap on the Malaysian demand for property in mature overseas markets,” he said.

Liew said that for the next two years, the bulk of SP Setia's overseas sales would come from Melbourne and Singapore. “Hopefully we can also launch Chestnut Avenue, our other project in Singapore, in three to six months time.”

He said the group's strategy also consist of capitalising on its township development expertise in countries with sizeable populations such as Vietnam, China and “hopefully, Indonesia in the future.”

“When we go overseas, we become a much better developer. I am thankful. We learn so many things ... design concepts, practises and new ideas,” he said.

He said the group's remaining land bank of 4,319 acres (of which 88% is in Malaysia) should last for 10 to 15 years.

SP Setia Bhd and Rimbunan Hijau Group are also in a joint venture with Qinzhou Jingu Investment Co Ltd to develop the Qinzhou Industrial Park (QIP), starting with the RM2.6bil start-up district of QIP.

SP Setia will have an effective stake of 22.05% in the China joint-venture company to be formed.

“For the QIP, we are in the midst of doing an audit (of land and infrastructure costs). We expect to finish this in the next three months. There will be revenue contribution from QIP in perhaps two years.”

Liew also confirmed that SP Setia was one of the three bidders on an informal shortlist for the Battersea Power Station site in London.

“We will give our traditional best shot. Hopefully, in the next two or three weeks, we will know the results. But even if we lose, we will continue to invest in the United Kingdom.”

On the group's flagship Bandar Setia Alam in Shah Alam, Liew said about half of the 4,000-acre township remained to be developed.

“We will launch apartments in Bandar Setia Alam soon. Our convention hall in Setia City Mall will be ready at the end of this year.”

Liew said Setia City Mall, which was recently opened, had been a successful venture with about 50,000 visitors a day.

“We do have plans for other malls in the future, subject to location,” he said.

By The Star

SP Setia: Foreign ops to play a key role

SP SETIA Bhd, the country's largest property developer, expects half of its sales to come from overseas projects in five years as it becomes an international property developer.

The company anticipates overseas projects to contribute less than afifth to its total sales for the current fiscal year.

"We are on track to hit our RM4 billion sales mark by end of our 2012 financial year. From the amount, RM700 million will come from overseas operations," said SP Setia president and chief executive officer Tan Sri Liew Kee Sin on the sidelines of Invest Malaysia 2012 yesterday.

"In five years, we expect 50:50 contribution from our local and overseas property projects. There's only so much growth you can generate from Malaysia. In order to expand the business further, we have no choice but to expand to the overseas market."

Liew also confirmed that the company is one of the three shortlisted firms for the Battersea Power Station site in London.

"That's all we know for now. If we secure the project, we will be very happy. But if we do not, we would not be going home empty pocket, as we have learnt so much along the way," he said.

Among the things the company "learnt" in its journey to be an international player include placing the importance of greenery in a property and the significance of maintaining an iconic structure.

SP Setia, which currently has over 1,720ha of landbank, said it is enough to keep the company busy for the next 10 to 15 years. About 88 per cent of the land is located in Malaysia.

By Business Times

Gromutual’s project to gain from new JB transport hub

JOHOR BARU: Gromutual Bhd expects its first high-rise project to benefit immensely from the upcoming integrated transportation hub in Iskandar Malaysia.

Executive director Teo Yu Hong said the project's site along Jalan Kempas Lama just a few metres away from Kempas Baru would be its strong selling point.

Teo: Gromutual will launch the project either in early or mid-2013.

Kempas Baru station in Johor Baru would be developed into an integrated transportation hub in Iskandar Malaysia. To be known as Kempas Sentral, it is expected to be several times bigger than KL Sentral station.

Kempas Sentral will have an integrated transportation system encompassing commuter trains interconnected with the rail network at KTM Kempas Baru station, feeder bus and taxi services.

“Initially, we wanted to offer studio units but changed it to two-room and three-room apartments as demand for such properties is good in Johor Baru,'' Teo told StarBiz after Gromutual's AGM.

Teo said Malaysians were still not used to studio apartment living unlike those in world's big cities such as New York, Paris, London, Tokyo and Singapore.

He said the company would launch the project either in early or mid-2013 with an indicative selling price between RM400 and RM450 per sq ft.

Teo said phase one on a 1.41ha site would comprise 21-storey and 26-storey tower blocks with 460 units of two and three-room apartments. The units will have built-up areas of between 800 sq ft and 1,500 sq ft.

Phase one, with a gross development value of RM150mil, will take three years to complete. It will be followed by phase two on a 2.02ha site.

“We are targeting Malaysian professionals working in Singapore and young families as buyers for our project,'' he added.

Meanwhile, Teo said Gromutual would look for more land in Malacca for its future residential property projects as prices of land in Malacca was much lower compared with in Johor.

He said the company was also seeking land in Kuala Terengganu and Ipoh as these two areas offered long-term growth prospects.

For the financial year ended Dec 31, 2011, Gromutual recorded RM21.40mil net profit on RM96mil revenue against RM11.49mil net profit on RM71.70mil revenue in the previous year.

By The Star

Tuesday, May 29, 2012

E&O Q4 net profit triples

E& Quayside project in Seri Tanjung Pinang

PETALING JAYA: Eastern & Oriental Bhd (E&O) saw its net profit for the fourth quarter of its financial year ended March 31 more than triple to RM42.37mil from the RM13.73mil registered in the corresponding period last year.

The niche property developer said its encouraging earnings growth was mainly attributable to strong sales and higher revenue recognition as well as cost control initiatives.

E&O raked in a revenue of RM210.57mil for the quarter, up 78% from RM118.06mil a year earlier. Earnings per share (EPS) improved to 3.84 sen from 1.29 sen previously.

The company has proposed a final dividend of 4.25 sen per share, an improvement from the two sen it paid out in FY11.

On a cumulative basis, E&O’s net profit stood at RM123.46mil for FY12, almost quadruple from the RM32.21mil it registered for FY11. Revenue for FY12 rose about 81% to RM492.17mil from RM271.27mil in FY11.

EPS for FY12 improved to 11.29 sen from 3.04 sen in FY11.

In a statement, E&O said sales for the period under review stood at RM786.78mil, while unbilled sales were close to RM1bil as at March 31. Key contributors to sales included E&O’s landmark Quayside Seafront Resort Condominiums at Seri Tanjung Pinang, Penang, launched in 2010 and currently close to 90% sold.

By The Star

Foreign interest in RM48b project

GUOCOLAND (M) Bhd, the property arm of the Hong Leong group, hopes to start in 18 months work on the estimated RM48 billion Sepang International City, which is among the 21 new Economic Transformation Programme (ETP) projects sannounced by Prime Minister Datuk Seri Najib Razak yesterday.

It is now in the midst of getting the approvals from both the Selangor and Federal governments and talking to international investors.

Managing director Yeow Wai Siaw said investors from East Asia, especially Japan, China and Singapore, are keen on investing in property development here, including Sepang International City.

Najib announced the project along with 20 new projects under the ETP here yesterday.

“Every developed nation needs a vibrant capital, and GuocoLand is one of the new project owners that will be part of ensuring this,” he said.

Najib added that GuocoLand has committed an investment of RM12.5 billion in the development of the Sepang International City, which is projected to generate RM1.34 billion in gross national income (GNI) and create more than 4,000 jobs.

Speaking to reporters after the announcement, Yeow said the Sepang International City will be a world-class and seafront development stretching across 1,600ha.

The development of the integrated and sustainable eco-city with a gross development value of RM48 billion will include commercial, business, residential and leisure development.

Another project announced yesterday was the RM1.57 billion committed investment by Boustead Heavy Industries Corp Bhd to develop sustainable competitiveness in shipbuilding and ship repair.

"We will start from 2014 and hope to train at least 100 technicians annually until 2020 to meet not just our own requirements but the industry, too," said managing director Tan Sri Ahmad Ramli Mohd Nor.

He said the project will involve a plan to move up the value chain of the shipbuilding and ship repair industry by developing local design and systems engineering capability and skilled shipyard human capital.

The project contribution to GNI will be about RM537.24 million by 2020 and will create 1,043 jobs by then.

By Business Times

Guocoland to invest RM12.5b in eco-city

PETALING JAYA: Hong Leong Group's property arm Guocoland (M) Bhd will invest RM12.5bil under the Greater Kuala Lumpur National Key Economic Area for the development of a 4,000-acre eco-city in Sepang.

The gross development value of the Sepang International City is RM48bil and the project is expected to contribute RM1.34bil to the country's gross national income and create 4,712 jobs.

The investment is the biggest from a single Entry Point Project (EPP) partner under the new 21 Economic Transformation Programme (ETP) projects announced by Prime Minister Datuk Seri Najib Tun Razak at an ETP Progress Update briefing yesterday.

Managing director Yeow Wai Siew said Guocoland was in the midst of getting the approvals for construction works to begin.

“We are now going through the proper application and planning stage with the Federal and State Governments. Hopefully we will be able to start the development in one-and-a half years' time,” he said.

Yeow said Guocoland was also talking to international investors for the project. “There are a lot of investors from East Asia now, especially from Japan and China, with some from Singapore,” he said.

He noted that since Japan's March 2011 tsunami disaster, Japanese investors had been looking abroad for property that they could use for emergencies.

The seafront development in the southern corridor of Selangor will include commercial, business, residential and leisure developments, a hub for institutions of higher learning and a large world-class urban park modelled after the Central Park in New York City.

By The Star

Dijaya wins BCI Asia Top 10 Developers Award

Award recognition: Dr Krups (left) presenting the award to Tong.

Property developer Dijaya Corporation Berhad (Dijaya) was awarded the BCI Asia Top 10 Developers Award 2012 at the BCI Asia Awards 2012 ceremony on May 22 in Kuala Lumpur.

This award is a testimony to Dijaya’s ongoing endeavour to strengthen its Tropicana branding and create high-quality and innovative property developments in which people want to work, live and play.

This year, Dijaya is part of the top 10 Malaysia developers whose combined portfolios contain US$3bil (RM9.4bil) worth of properties.

Dijaya managing director Datuk Tong Kien Onn received the award from BCI Asia chairman Dr Matthias Krups.

Now into its eighth year, the BCI Asia Awards is a regional event attended by the industry’s top architects and building professionals in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

This event highlights key industry players that enable the market to better understand the important roles the organisations play as well as their impact, both socially and on the environment.

The BCI Asia Top 10 Developers Award recognises key industry players in the country.

By The Star

Mah Sing Q1 net soarson Greater KL projects

Mah Sing Group Bhd, one of the country's top developers, said its first quarter net profit surged by 46 per cent to RM59.9 million on the back of a 47 per cent growth in revenue to RM457.7 million.

The group attributed the growth largely to its property development projects in Greater Kuala Lumpur.

In a statement issued yesterday, Mah Sing said it has achieved slightly over RM1 billion in property sales as at May 15 2012, marking 40 per cent of its RM2.5 billion target for 2012.

Its property development projects in Greater Kuala Lumpur contributed 82 per cent to the sales. Johor Baru and Penang contributed 10 per cent and eight per cent, respectively.

The stock closed one sen higher yesterday to RM1.98.

Meanwhile, the group's unbilled sales stood at RM2.28 billion during the first quarter ended March 31 2012, or 1.8 times the revenue recorded from its property development division last year.

"We have planned our product mix in line with the market demand, as evidenced by the strong take up, for example, our township development of Kinrara Residence did very well when we launched our semi-detached homes and bungalows.

"This shows that there is continued demand for landed residential properties in good location, especially in gated and guarded schemes," said Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum.

Leong said the group's newly launched mass market township, M Residence@Rawang, also showed robust take up, reflecting market demand for affordable housing.

In the high rise segment, there was strong demand for smaller units of affordable serviced residences, he said.

Leong said Mah Sing is sitting on a cash pile of RM581 million, giving it a healthy landbank war-chest and a chance to buy more land for new developments.

As at May this year, Mah Sing has achieved 73 per cent of its landbanking target this year by making three key buys in Rawang, Bandar Baru Bangi and Kota Kinabalu in Sabah.

By Business Times

Mah Sing Q1 earnings up on sales volume

KUALA LUMPUR: Mah Sing Group Bhd’s earnings increased by 45.5% to RM59.9mil in the first quarter ended March 31 from RM41.17mil a year ago due to strong sales volume.

Its revenue rose 46.8% to RM457.77mil from RM311.75mil. Earnings per share were 7.20 sen from 4.95 sen.

The group has achieved property sales of slightly above RM1bil as of May 15 or 40% of its 2012 full year sales target of RM2.5bil.

The group also has strong earnings visibility, with unbilled sales of about RM2.48bil as of March 31 or 1.8 times the revenue recognised from the property development division in 2011.

Balance sheets remained strong, with high cash pile at RM581.1mil and net gearing at 0.33 as of March 31.

Some of the property development projects that contributed to revenue and profit during the year included township developments in the Klang Valley like Garden Residence, Clover @ Garden Residence, and Garden Plaza in Cyberjaya, Kinrara Residence in Puchong and Aman Perdana in Meru - Shah Alam.

The positive growth was also contributed by its niche developments such as Perdana Residence 2 in Selayang, One Legenda, Hijauan Residence, and Bayu Sekamat in Cheras, and small units of serviced residences in M-City and M-Suites in Jalan Ampang, as well as Icon Residence in Mont’ Kiara.

Group managing director cum group chief executive Tan Sri Leong Hoy Kum said the group had planned its product mix in line with the market demand, as evidenced by the strong take upin its township development of Kinrara Residence which consisted of semi-detached homes and bungalows.

“This shows that there is continued demand for landed residential properties in good location, especially in gated and guarded schemes coupled with the established infrastructure and amenities.

“The same can be said of Clover@Garden Residence which comprises mostly semi-detached homes, with limited units of superlinks and bungalows. Buyers will be able to get a better picture of the two storey and three storey semi-detached homes when our show units are completed in June,” he said in statement yesterday.

By The Star

Boustead earnings rise 22% on higher revenue

PETALING JAYA: Boustead Holdings Bhd's net profit rose 22.4% to RM144.6mil for the first quarter ended March 31, from RM112.2mil a year earlier, on higher revenue.

The diversified conglomerate saw its revenue rise to RM2.4bil from RM1.6bil a year ago.

Boustead is involved in six key sectors of the economy, namely plantations, heavy industries, properties, finance and investment, trading, and manufacturing and services.

Earnings per share of the group improved to 13.98 sen for the first quarter compared with 10.85 sen a year earlier.

Boustead said all its business divisions recorded an increase in revenue during the quarter.

Its manufacturing and trading division saw higher sales volume, resulting in a 23% increase in revenue to RM1.26bil, while its pharmaceutical division's revenue rose sharply to RM446.7mil from RM28.7mil a year ago, reflecting the consolidation of Pharmaniaga Bhd.

Boustead's plantations division, however, saw only a marginal increase in revenue to RM263.8mil from RM254.4mil previously, as lower palm product prices trimmed the gains of a higher crop. Its cumulative fresh fruit bunches crop totalled 282,171 tonnes, up 11% from a year ago, but the average palm oil price was only RM3,143 per tonne, down RM398 or 11% from RM3,541 per tonne in the corresponding period last year.

For the first quarter, the plantation division contributed a slightly lower pre-tax profit of RM92.2mil, compared with RM99mil a year ago due to lower palm product prices.

Boustead's finance and investment division posted a cumulative pre-tax profit of RM26.1mil for the first quarter, up from RM11.9mil a year ago, largely on higher profit contribution from Affin Group.

Its property division also registered higher pre-tax profit of RM40.4mil compared with RM12.2mil a year ago. This was attributable to the gains from the sale of land.

The only division that saw a deficit was its heavy industries, with a pre-tax loss of RM5.4mil due to losses at the commercial shipbuilding segment and the fact that work on the second-generation patrol vessels have yet to move into full swing.

Given its overall positive results, Boustead declared an interim dividend of 7.5 sen for the first quarter, which was an improvement from eight sen a year ago.

For the coming quarters, Bousted expects its plantation division to perform well on positive outlook for crude palm oil prices. It also expects its pharmaceutical division to continue registering good growth.

As for its property division, Boustead said it expected the Surian Residences in Mutiara Damansara, which was already 98% sold and expected to be completed in mid-2013, to be the main revenue contributor for the division.

Its hotels and retail mall operations, on the other hand, are expected to perform satisfactorily.

Earnings at its trading and manufacturing division for the remainder of the year, Boustead said, would be driven by its BHPetrol operations.

By The Star

Monday, May 28, 2012

Jaya33 Cybercentre towers ready soon

New offering: (from left) Jaya33 Sdn Bhd project director James Lee, property director Mike Kan, general manager Tan Kok Leong, and Toh at the unveiling of Jaya33 Cybercentre Tower 4 and 5.

PETALING JAYA: The developer of Jaya 33 will be offering for lease two new office towers in a couple of months. Towers 4 and 5, built at a cost of about RM200mil, will be connected to the existing Jaya33 block with a bridge for cars and pedestrians.

Its marketing director L.C. Toh said the two blocks, known as Jaya33 Cybercentre, had just received its Multimedia Super Corridor (MSC) status and boasted of several unique features. The nearest MSC-status office premises is First Avenue in Bandar Utama, Petaling Jaya.

Toh said the new blocks offered the largest commercial floor space at 19,000 sq ft per floor compared to the conventional 8,000-10,000 sq ft. This will cater to the increasingly popular open office plan concept. The floor interior is laid out to house more people and to improve space efficiency from the conventional 100 sq ft per person to 75 sq ft per person.

The floor design also incorporates additional space to accommodate any extra mechanical and electrical requirements for telecommunications and computer cabling.

The main over-riding feature of the development is the incorporation of three data centre floors in one of the blocks.

Tower 5 will come with purpose-built data centres on levels 9, 10 and 11 which will have a total of 57,000 sq ft.

Companies have the option to rent the suites of 1,450 sq ft. There are four suites to a floor.

“The floor loading is 7kPA (kilo Pascal) to withstand the weight of generators. There will be dual sources of power supply as data centres run 24 hours,” she said, adding that the centre would meet the third tier of data centre specifications.

Toh said the three floors would have specific technicalities of data centres different from normal office premises. These include self-control air-conditioning instead of a centralised one, security, power, heavy-duty floor loading, greater floor to ceiling height and other technical requirements. It will also come with fibre-optic network.

“It will be cost efficient,” said Toh, and the rates would be between RM7.50 and RM8 per sq ft excluding equipment.

“The rates are competitive,” she said, adding that there were some data centre leases which ran into double digits, including equipment and depending on power voltage requirements.

Banks, for example, have their own data centres with the information of their clients which they cannot afford to lose. Security is important.

The data centres were built in consultation with MyTeleHause Sdn Bhd and C2 Consult Sdn Bhd.

By The Star

SP Setia to to buy RM1bil worth of land in Klang Valley, Penang and Iskandar Malaysia yearly

Winner again: (from left) Liew, FIABCI world president 2011/2012 Alexander Romenanko, FIABCI Prix d’Excellence 2012 president Laszlo Gonczi and St Petersburg Committee for Construction chairman Vyacheslav Semenenko at the awards ceremony.

ST PETERSBURG (Russia): SP Setia Bhd is allocating RM1bil yearly to acquire new land for future development in the Klang Valley, Penang and Iskandar Malaysia.

President and chief executive officer Tan Sri Liew Kee Sin said replenishing its landbank in the shortest time possible would place the company in a better position compared with other developers.

He said the move was vital as the company would be able to continually launch new projects as the takeup rate for its properties was good.

“Sufficient landbank is the life-line for us (developers) without which we could not properly plan our future projects,” Liew said after SP Setia's award winning development Setia Eco Gardens in Iskandar Malaysia bagged the FIABCI Prix d'Excellence award at a ceremony held here recently.

The 2012 FIABCI Prix d'Excellence Awards saw 14 winners from seven countries, namely Malaysia, Singapore, India, Taiwan, Russia, Hungary and Switzerland.

Liew said that among Kuala Lumpur, Penang and Iskandar Malaysia, getting new land in Penang was the most difficult due to the space constraint there.

He added that those who managed to get land in Penang would go for high-density projects.

“In the Klang Valley, the next growth centres will be within the Kajang and Semenyih areas,'' Liew said.

He said the upcoming My Rapid Transit system would help boost property development projects outside the existing development centres in the Klang Valley.

With the better accessibility and connectivity within the central region once the MRT system is completed, developers have started looking for land in new development centres.

He said prospective buyers, mostly the first-time houseowners, would consider buying their first residential properties outside the existing growth centres as the prices were within their reach.

On south Johor, Liew said Iskandar Malaysia would drive the property market in Johor many years down the road based on the progress and development taking place in the corridor over the last six years.

“Iskandar Malaysia is more viable compared with other economic growth corridors in Malaysia,'' he said.

Liew said the Johor property market also benefited from Iskandar Malaysia as demand for high-end residential properties was on the rise in south Johor.

He said that apart from the Iskandar Malaysia factor, Singapore also played an important part in determining the economic growth in Johor.

“It is a well-known fact that Johor and Singapore are intertwined in economic activities during good or bad times due to their close proximity,'' said Liew.

Liew said the company was fortunate as all of its projects in southern Johor were strategically located within the flagship development of Iskandar Malaysia.

Its ongoing projects are Bukit Indah with only 5% land left for development from the entire 610.67ha, Setia Eco Gardens and Setia Business Park (383.64ha and 50% still available for future development).

Others are Setia Business Park II (107.24ha), Setia Tropika (299.46ha and 40%), Setia Indah (359.36ha and 10%) and Setia Eco Cascadia (110.70ha and 70%).

“We'll continue looking for more land in south Johor,'' he adds.

Liew said the remaining landbank would keep the company busy in Iskandar Malaysia in the next 10 to 15 years with a gross development value of RM8bil.

He said on average, land prices in Iskandar Malaysia had appreciated when the company first came 15 years ago, the asking price was RM5.50 per sq ft and now it was between RM15 and RM20 per sq ft.

Liew said the opening of the Eastern Link Dispersal Expressway in April and upgrading of several roads within Tebrau corridor had improved connectivity and accessibility.

Meanwhile, Setia Eco Gardens won its second FIABCI Prix d'Excellence Award within three years.

Setia Eco Gardens had in 2009 won the FIABCI Prix d'Excellence award in Beijing for Best Master Plan.

This year it emerges as the winner in the Specialised Project (Purpose Built) category for Eco Greens beating Green Pyramid and Ocenarium of Hungary and Taiwan's Taipei City Hall Bus Station Project.

Eco Greens is a 11.33ha park complex in Setia Eco Gardens comprising a town park and the famed Eco Gallery, which features a green wall that has become an iconic landmark for the 383.64ha township.

SP Setia is the only Malaysian developer to have won four FIABCI Prix d'Excellence awards Setia Eco Park in Shah Alam won for Best Master Plan (2007) and Best Residential (Low Rise) Development (2011) and Setia Eco Gardens for Best Master Plan (2009) and Specialised Project (Purpose Built).

By The Star

MPHB not planning to go big in real estate

KUALA LUMPUR: Multi-Purpose Holdings Bhd (MPHB), a gaming outfit, have no plans to go big in real estate but will continue its joint venture development projects with Bandar Raya Developments Bhd (BRDB).

The joint venture with property developer BRDB can easily generate more than RM4.5 billion in gross development value (GDV).

Both companies are planning to jointly develop 268ha in Mimaland (Gombak, Selangor), Rawang and Penang.

MPHB director T. Vijeyaratnam said the group would not hive off the joint venture with BRDB as part of its on-going rationalisation plan.

"We may sell some of our land parcels if we get good offers but not the joint venture with BRDB. That will continue. We expect to develop the land over eight to 10 years," he told Business Times after its shareholders meeting last week.

Vijeyaratnam said MPHB owned parcels of land in Kuala Lumpur, Penang and Johor that were worth around RM400 million to RM500 million.

MPHB owns 1,840ha of agriculture land in south Johor. The land has strong GDV potential with the ongoing developments at Iskandar Malaysia.

MPHB, which was set up in 1975, is rationalising its non-gaming asset like financial services held under Multi-Purpose Insurans Bhd, stockbroking operated by AA Anthony Securities Sdn Bhd and hotel investments.

It plans to inject the assets, which have net book value of about RM941.4 million as at end-2011, into a special purpose vehicle (SPV Capital) for listing on the Main Market of Bursa Malaysia.

Its gaming business, operated by Magnum Corp Sdn Bhd, will remain listed under MPHB.

MPHB has so far disposed of Menara Multi-Purpose for RM375 million, a hotel in Pudu for RM54 million and shares in a subsidiary company.

The disposal of the non-core assets has placed MPHB on a more even footing with Berjaya Sports Toto Bhd.

For its fiscal year 2011, MPHB posted a net profit of RM482.03 million on revenue of RM3.54 billion, of which Magnum had contributed around 75 per cent to 80 per cent and more than 80 per cent, respectively.

As of end-2011, MPHB has RM1.04 billion cash, short-term borrowings of RM53.9 million and long-term borrowings of RM2.11 billion.

MPHB closed four sen higher last Friday to RM3.19.

By Business Times

Mixed views on land acquisition in a cooler market

PETALING JAYA: Research analysts and property consultants have mixed views about developers that have been buying sizeable parcels of land recently, as the real estate market has slowed down and prices are relatively reasonable.

“It is a good time to acquire land when the market is slow. Some property developers may just be able to get a bargain price for their purchases,” said property consultancy CB Richard Ellis (M) Sdn Bhd executive director Paul Khong.

Khong told StarBiz via e-mail that real estate sellers would also be more realistic concerning prices, as there were not too many buyers around.

He pointed out that the property sector was moving slowly back to a “buyer's market” and the principle of “cash is king” would rule again.

In recent months, property developers such as Mah Sing Group Bhd, SP Setia Bhd, WCT Bhd and Hua Yang Bhd have been actively expanding their land bank particularly in the Klang Valley.

Last week, Mah Sing announced that it was paying RM333.26mil or RM18.55 per sq ft for 412 acres targeted for a mixed township near Bangi, Selangor.

SP Setia recently acquired 21.3 acres freehold land in Penang for RM185.6mil, and said this was for a mixed residential development project with a gross development value (GDV) of RM1.1bil.

Meanwhile, WCT recently acquired two parcels of 468 acres and 57 acres in the Klang Valley.

WCT executive director Choe Kai Keong had told StarBiz that the land costing RM450mil has a potential GDV of RM5.2bil.

The 468 acres in Rawang, Selangor would be developed into an integrated township with an estimated GDV of RM1.2bil, while the 57-acre in Overseas Union Garden in Kuala Lumpur is planned for a mixed development worth RM4bil.

Hua Yang also has been acquiring small parcels of land in the Klang Valley since last year.

Hua Yang, which is known for developing residential properties in the affordable segment, recently agreed to pay RM15.2mil for 21 acres of freehold land in Ipoh, Perak.

“Prices and sales of properties have obviously slowed down in 2012 as the number of buyers has been halved, with stricter bank lending guidelines. This is rather sensitive in the mid-high and high-end segments (such as above the RM3mil category) of the residential market,” said Khong.

Khong said property developers were now moving quickly to look at larger land banks to develop new projects, and were looking at cheaper locations where there was still demand from the mass market in the mid and lower-mid sections.

“Landed properties especially in the RM2mil and below categories should still do relatively well, as investors will still continue their quest but at a slightly lower segments.”

He also noted that the recent land sales were centred in secondary locations outside the city centre, but were in reasonably “good locations” and were in respect of big parcels where the developers could develop the “evergreen” landed segments again.

Khong pointed out that regardless of market conditions, property developers needed to take a long term view about their land bank.

“They have to continue to acquire land and develop, to sustain their operations and cover overhead costs.”

However, one property analyst contacted by StarBiz said there were concerns that developers might be too aggressive in expanding their land bank.

“In good times, when the property market is hot, developers can increase their gearing without much worry as they can launch and sell properties quickly. Now, the market has cooled and they should be careful about increasing their gearing too much,” he said.

Maybank Investment Bank (IB) Research said in a recent report that it took a neutral view of SP Setia's recent land buy in Penang.

“Despite its strategic location, the RM200 per sq ft land cost (in Penang) appeared to be on the high side. It is 33% to 60% higher than the RM125 to RM150 per sq ft asking or transacted prices in the area.”

However, Maybank IB noted that SP Setia's net gearing was still very healthy, as this was expected to increase to 0.14 times post-acquisition of the Penang land (from 0.08 times as at January 2012).

Meanwhile, Kenanga Research said it took a neutral view of Mah Sing's recent land buy near Bangi as the deal is expected to result in the company's net gearing reaching 0.6 times (from the 0.3 times in the fourth quarter of 2011), based on an assumed 70:30 debt-equity financing.

“This has exceeded our comfort level of 0.5 times net gearing,” said the research unit.

However, Kenanga Research said Mah Sing's expected net gearing of 0.6 times is manageable amd should fall below 0.5 times over the next two quarters, on the back of continuous billings.

By The Star

Renewed interest seen in M-REITs

PETALING JAYA: The continued volatility in the global stock markets is expected to generate renewed interest in local real estate investment trusts (M-REITs) in the medium term, Malaysian REIT Managers Association (MRMA) chairman Stewart LaBrooy said.

With stock markets expected to be in for a correction, he said the narrow trading bands of M-REITs would absolve them from the shocks in the global markets.

“In the current volatile global environment, we have been witnessing a flight of capital to dividend stocks with low beta, such as real estate investment trusts. As investors flee the equity markets, M-REITs have seen their stock prices rising to new highs with a number of them providing their unitholders with double-digit returns in 2011. We believe we should also see strong returns for 2012,” he told StarBiz.

Labrooy said the M-REIT market's liquidity and depth would improve with new REIT listings like the upcoming Mid Valley Megamall and Gardens REIT by IGB (IGB REIT).

He added that 2011 saw the market capitalisation of listed M-REITs rose to above RM15bil, adding much improved liquidity to the stocks.

“The listing of IGB REIT, expected in the second half of this year, could be even larger than the Pavilion REIT. The market is still waiting for details to emerge on the size of the listings although it has been estimated at around RM4bil,” he added.

Labrooy said there was still a high level of interest in M-REITs among institutional and retail investors, and the IGB REIT listing would be no exception.

“There is still an appetite for more listings in the future and it will definitely develop the M-REIT market into a much more liquid market which will in turn attract more foreign investors.”

He believes that yield compression has topped out and there could be some retracement back to slightly higher levels. “If M-REITs continue to acquire and accrete their funds, we will see a continuation of double-digit total returns in the years ahead.”

In a recent report on the M-REIT sector, RHB Research maintained a “neutral” rating on the sector.

It said the current valuations of M-REITs suggested that there was limited room for yield compression.

“We see limited upside for the key larger REITs Pavilion REIT, Sunway REIT and CapitaMalls Malaysia Trust. Some value is seen in Axis REIT (due to potential bumper dividend post asset disposal) and Al-Aqar Healthcare REIT, which despite its smaller size offers more reasonable yields,” it added.

The research house is also upbeat on the upcoming listing of IGB REIT, “given its not-so-bullish valuations at RM4.6bil, which translates into a rather decent average per sq ft (psf) price of RM1,815 psf.”

“We estimate that the listing yield will be around 5.8% to 6%,” it added.

Labrooy, who is also Axis REIT Managers Bhd chief executive officer, said many of the M-REITs were trading at a premium to their net asset value (NAV) making non-dilutive capital raising possible. This has resulted in many M-REITs returning to the market to raise fresh equity to expand their portfolios and provide their unitholders with higher dividends.

He said institutional investors especially the big pension funds and insurance funds were opting for M-REITs especially for their cash dividends.

However, he said that despite the substantial cash stashed away in fixed deposits and savings accounts that only generated yields of 1.2%-3.3%, interest from retail investors in REITs was just slowly coming around.

“Retail investors are still wary of the equity markets or if they are investors, they don't invest in REITs because they confuse them with unit trusts or the fact they don't behave like equities.”

To address this situation, he said the MRMA was initiating some programmes to educate retail investors on M-REITs.

On prevailing uncertainties in the market, Labrooy said things to watch out for this year included external shocks coming from economic and policy developments in the eurozone, rising China-US trade friction, China's slowing economy, escalation of social and political tension in the Middle East, and expectation of a snap election in Malaysia.

He said the main concern would be the unfolding eurozone crisis as banks there would have to boost their Tier-1 capital ratio by 9% by mid-2012, and this could lead to a liquidity crunch in the second half of the year.

“Meanwhile, with the ebbing of inflationary concerns, the positive news is that the region's monetary policy has now moved from inflationary containment to a focus on growth. This has led to policies that have seen the maintaining of record low interest rates that are providing additional liquidity into the banking system,” Labrooy said.

By The Star

Saturday, May 26, 2012

Iskandar lure for Singapore

A semi-detached house in Permas Jaya, Johor costs a fraction of that in Singapore.

Singapore has the means but lacks land while Johor has abundant land but lacks the means. Enter Iskandar Malaysia ...

ISKANDAR Regional Development Authority (Irda) anticipates the second phase of Iskandar Malaysia development from 2011 to 2015 to be more challenging than phase one which was from 2006 to 2010.

Chief executive officer Ismail Ibrahim tells StarBizWeek that while the first phase was about planning and building foundations, the next level is about growth and expansion.

He says the next three years to 2015 will be about leveraging on developments from phase one.

“The challenge will always be there... in different forms. The question is whether we are able to anticipate it,” he says.

He adds that risks are unavoidable in an undertaking the scale of Iskandar Malaysia, hence stakeholders need to do risk management.

Located in the southern-most part of Johor, Iskandar Malaysia is the country's first economic growth corridor launched in 2006, spanning 2,217 sq km three times the size of Singapore.

A five-year progress report on the economic region by Irda forecasts Iskandar Malaysia would need total investment of RM383bil (US$115.7 bil) over the next 20 years.

It generated a total cumulative committed investments of RM84.56bil until the first quarter of this year.

“The next move is to continue attracting more domestic and foreign investors through a systematic approach and strategy of engaging with them,” he says.

Irda is looking at investments averaging between RM15bil and RM20bil yearly from 2011 to 2015, up from RM10bil-RM15bil targeted from 2006 to 2010.

The tide seems to be turning in favour of the region. Singapore-based Jones Lang LaSalle head of residential project sales David Neubronner says interest in the region was limited and muted in its initial years but has changed dramatically of late.

The Singapore factor

“Singaporean interest, until recently, has generally been muted and limited to a handful of developments like Leisure Farm and Horizon Hills. However, the situation has changed quite dramatically recently,” says Neubronner, in an email interview.

Iskandar Malaysia is now spoken in the same breath as Johor Baru and has become synonymous with the city.

No longer do developers say they have a project in Kota Tinggi or Johor Baru, or some other specific town.

It's “we have a project in Iskandar ”

Tangibles like new highways and improved landscaping have helped. Other tangibles include the September launch of themepark Legoland and educational facilities in Educity.

“For Iskandar to succeed, we need the Singaporeans to agree to play ball,” says Chur Associates managing partner and legal advisor Chris Tan, who promotes Malaysian properties to foreigners. “Johor has always been Singapore's factory. Iskandar Malaysia is like Shenzhen and Hong Kong. Shenzhen is thriving today because of the Hong Kong factor.”

While Singapore has the means, it lacks the land. Johor has abundance of land, but lacks the means.

Iskandar Malaysia is presented as a new territory with ample opportunities for all, particularly Singaporeans in terms of value, growth and possibly future retirement plans, Neubronner says.

He says there are lots of push and pull factors to steer interest to Malaysia in general, and the Iskandar scheme, in particular.

“The rapid price appreciation of Singapore properties over the past 30 months is one of them,” he adds.

“With new price levels, Malaysian properties become relatively cheaper. For example, a new semi-detached house in Bukit Timah, Singapore costs S$5mil (RM12.4mil). A similar house in The Straits View Permas Jaya Johor, 10 minutes drive from CIQ Johor, is S$500,000 (RM1.24mil) or a fraction of what it costs in Singapore.

“And that same house in Permas Jaya offers a view of Senoko Singapore (a power station),” quips Neubronner.

While Iskandar beckons, on the other side of the causeway, the Singapore government has implemented a slew of anti-speculative measures to deter investors in Singapore from speculating in the Singapore property market, he says.

“As a consequence of these measures, investors are going overseas, such as London, Australia and Malaysia.”

From the global property perspective, property values in Malaysia and London have “depreciated” on the basis of the strong Singapore dollar.

Supporting the strong interest for Malaysian property investment is a market well supported by robust fundamentals, including political stability, economic growth and a fast growing middle class which is driving demand in the overall market.

Neubronner says interest subsidy schemes offered by Malaysian developers, which is not available in Singapore anymore, is another key attraction.

In this scheme, an investor needs to put in as little as 10% cash downpayment and nothing thereafter until the development is completed, which may be three to four years down the road.

“Should the property appreciate by 10% at completion, the investor would have doubled their investment, before outgoings,” says Neubronner.

But the formula of affordable property prices and easy credit alone will not have worked if not for friendly government ties between the two countries,” says Neubronner.

Iskandar's early days

The guardians of Iskandar could not be more illustrious and the political weightage could not be more influential. Prime Minister Datuk Seri Najib Tun Razak, and the Johor menteri besar are keenly involved. Irda, the agency that regulates, plans, promotes and strategises Iskandar Malaysia's growth, reports directly to them.

Goverment-linked company (GLC) Khazanah Nasional Bhd drives the corporate motor with managing director Tan Sri Azman Mokhtar having a seat on the Irda board.

Other GLCs involved include Iskandar Investment Bhd (IIB) and the UEM group. There is a reason for such heavyweights. This is the first of several economic zones being promoted by the Government. So far, it has also been the most successful, despite its muted start.

Former Prime Minister Tun Abdullah Ahmad Badawi launched the growth corridor in 2006, then known as Iskandar Regional Development. It attracted much Middle Eastern interest. These initial investors came with their riyals and dirhams to buy land with the aim to become master developers.

The project then was very much government-driven. The scarcity of land for development in the Klang Valley and the proximity to Singapore prompted the private sector to invest in Johor.

Today, some of the country's top developers have interest here. These include BRDB Developments Bhd, the Eastern & Oriental group, Mah Sing and SP Setia group. Their move down south has given credibility to the project, says Neubronner.

Says a property lawyer promoting Malaysian properties to foreigners: “Malaysia was viewed as among the more progressive, moderate and modern Islamic states in the region. It was this factor which attracted the Middle Eastern investors to our shores. (But in the opening up of any region), you need people who actually come and stay and not just to buy land. And our closest neighbour is Singapore,” he says.

A report from Jones Lang LaSalle in London may provide the clue why Singapore is important for Iskandar Malaysia's success. The report says Singapore has the world's highest concentration of wealthy people and is considered as “the Switzerland of Asia”. And all the wealth are just across the causeway.

Singapore has more millionaires per capita of its five million population than anywhere else on the planet, reported The Telegraph. Although other countries have more total millionaires because of larger populations, the little red dot in South-East Asia has more as a percentage of its population.

The catalyst to the strong buying interest from Singaporeans has been the warming of political ties between the two governments and their leaders, says Neubronner.

Ties improved when Najib hosted his counterpart Lee Hsien Loong at an inter-governmental meeting in March. Both countries were looking for opportunities to expand beyond their borders. International Trade and Industry Minister Datuk Seri Mustapa Mohamed says the Singapore business community is looking to relocate or expand operations in Iskandar Malaysia.

That meeting was quickly followed with Temasek Holdings (Pte) Ltd and Khazanah Nasional Bhd announcing they would jointly develop about RM30bil of projects in the south of Peninsular Malaysia and Singapore.

The developments in Singapore will include hotels, apartments, offices and shops in two main areas of the city state while the Iskandar developments will have homes, retail space and “wellness-related offerings”.

Singapore Business Federation did not respond to questions emailed to them. The Association of Small & Medium Enterprises in Singapore says it does not have information about Singapore's SME interests in Iskandar Malaysia.

Brian, a Malaysian businessman, with Singapore PR status, who has been living in Johor “off and on” the past 10 years, says the Singapore factor is important for Johor to succeed “much faster.”

“We need the support of Singapore because it is a successful neighbour and has a well-established brand name. It is generally felt that if Singapore companies were to invest in Iskandar, it will be quite safe for others to follow,” he says.

While government-to-government ties are important, other prerequisites are needed. These include good infrastructure in the form of roads and connectivity, services, amenities and aggressive marketing and promotional efforts from both private and public sector.

“With each passing day, the challenge (seems) less daunting,” says Neubronner.

Legoland Malaysia will be opening its doors Sept 15 to provide the leisure component. Over one million visitors are expected during its first year of operations.

“We are expecting to have over 70% to 80% of the visitors from Malaysia and Singapore, with the rest are international visitors,” says Legoland Malaysia general manager Siegfried Boerst.

The park's pre-opening promotional drive, which began in January, resulted in 35,000 annual passes sold online by the closing date on April 16, the highest ever recorded for the sale of pre-opening annual passes for any of the Legoland theme parks.

Singaporeans make up the majority of foreign buyers who bought 40% of those passes. Malaysians bought the other 60%.

Even without Legoland, Singaporeans were enjoying the beach and island resorts over in Johor over the years.

Brian says he is drawn to the open space and serenity of Johor. He has bought a holiday home in Leisure Farm some years ago.

EduCity provides the education framework. In the next five years, Iskandar is expected to have 10,000 students, nine universities and schools. Raffles University Iskandar vice-president (services) and registrar Gan Chin Huat says its American-curriculum school is targeting 1,000 students in 2017.

Of the 3,000 students targeted for Raffles University Iskandar, half of them are expected to be Malaysians and the rest from around the region.

On how it will attract students to Iskandar, Gan says Raffles Education Corp is a quality name in Asia Pacific and its graduates are well received by industries.

Raffles will offer hostel facilities in the new campus at Iskandar and also shuttle students over, he says in an email interview.

The Raffles education group has 32,000 students in the 38 Raffles Colleges in 35 cities in 14 countries.

Of the three universities and 38 colleges in 14 countries, Gan says they only have one Raffles College of Higher Education in Singapore with the rest located elsewhere. In Malaysia, the group currently has one Raffles College in KL in addition to the Raffles University Iskandar and Raffles American School in JB.

While Singaporean and Malaysians with PR status remain a prime target, and with the US and the eurozone the way they are, other Asian investors from Indonesia, South Korea, China and Vietnam are being keenly sought.

The building blocks for the next chapter attracting investors are being put together today. But challenges remain.

By The Star

Mulpha finds its golden goose

Semi-detached homes perched over the 1.2km Canal Waterways in Bayou Water Village.

Village-style homes stand out from the rest and win international accolade

WINNING accolades seems to be second nature for property developer Mulpha International Bhd, which recently picked up an award at the 20th FIABCI Prix d’Excellence Awards for its Bayou Water Village development under the Best Residential (Low-Rise) category.

The development is part of the company’s 1,765-acre Leisure Farm Resort in Gelang Patah, Johor and next to the Second Link Expressway to Singapore.

Winning a FIABCI Prix d’Excellence Award is certainly great for the public image, but Mulpha deputy chief executive officer (property division) Ronn Yong is quick to point out it is also beneficial from a business sense.

Yong says FIABCI award is a confidence booster and reaffirms Mulpha’s mission of establishing its brand name as a high-end eco-lifestyle developer that gives back to nature.

He says the Bayou Water Village development is built and designed according to Singapore’s Construction Quality Assessment System (Conquas) to ensure that only homes of high quality and excellent workmanship are delivered to homeowners.

“From a business sense, it is a testament to delivering Conquas standard finishes with passive green features. It’s also about getting recognition from the challenging property industry.

“It is definitely a confidence booster, knowing that we are coming up with the right products – and that it is being well accepted by the market both locally and internationally. It also helps to reaffirm Mulpha’s mission of establishing its brand name as a high-end eco lifestyle developer that gives back to nature,” Yong tells StarBizWeek.

The 22-acre Bayou Water Village development comprises 213 two-storey residential units, five bungalows, 46 semi-detached units and 162 courtyard terrace homes.

The development has a distinct Malaysian village concept, with the houses built on stilts, fronting a waterway and built in small clusters at certain sections.

It also features homes nestled within nine acres of park, 1.2km of canal waterways and garden ponds. The houses are linked by three bridges over the canal, with jogging paths, pocket parks, barbeque gardens and childern’s play area.

The homes range from 1,777 sq ft to 2,203 sq ft and are priced around RM550,000. Residents are a mix of locals, Singaporeans and other expatriates.

“The creative design adopts an eco-chic waterfront village living concept. The (development) planning takes into account site factors such as respecting the surrounding ecosystem and interacting with the inherent environment,” says Yong.

According to him, prior to construction, Mulpha went to great lengths to ensure the impact on the surrounding ecosystem was minimal.

Detailed, photo-documentation of the sites was done prior to construction, so that the company would know if any wildlife would be affected upon the project completion.

“It (the development) definitely stands out from the rest, especially when we successfully transformed the existing drain reserve into a garden spine with 1.2km of sustainable canal waterways and walkways.

“The newly carved canal becomes a natural habitat that meanders through the whole site, linked by a series of bridges to an island clubhouse with a cantilevered pool perching over the canal, making it a community hub,” Yong says.

Yong says integrating its development with the surrounding nature also helps the company differentiate itself from the competition.

“When we come to a piece of land that has a lot of green, we don’t want to ignore it and we chose to work with the surrounding. Another thing is that with our proximity to Singapore, we need to differentiate ourselves.

“Singapore doesn’t have as much green space and our products need to capitalise on this.”

According to Yong, the latest award for Bayou Water Village is the fourth FIABCI Prix d’Excellence Awards for Mulpha.

It has also won three awards on the local front at the FIABCI Malaysia Property Awards.

The awards are intended to recognise the world’s best developments.

This year’s FIABCI Prix d’Excellence Awards, which was held in May at St Petersburg, Russia, crowned four Malaysian developments in total.

The event saw winners from seven countries namely Hungary, India, Malaysia, Russia, Singapore, Taiwan and Turkey. There were over 60 projects from 16 countries that contested for this year’s international awards.

“Naturally, we will continue to develop more international class products, which we believe will benefit our investors and residents in the long term.

“Through this winning experience, we want to express our sincere appreciation to all our buyers, contractors, consultants, colleagues and other partners for their invaluable support and contributions. We hope to impart this confidence factor to them too so that they feel recognised to be associated with Leisure Farm.”

Moving forward, Yong says Mulpha will continue to focus on developing more projects within Leisure Farm.

Firstly, Bayou Creek, known as Precinct 7 and consisting of 332 canal front bungalows and semi-detached houses, will be launched in four sub-phases over three years. This precinct is a continuation of our series of successful canal-front living homes.

Yong says the first phase opened for sale recently, offering 96 units of semi-detached houses and bungalows at RM1.8mil and RM2.8mil respectively.

“The second lifestyle product is based on the build-then-sell concept, where we are in the process of building 30 individually-themed villas progressively over the next two years. There are four new show villas ready for private viewing now with a starting price of RM4mil.”

On the prospects of the property market, Yong says the prevailing cautious market sentiment currently, coupled with the uncertain global economy, will pose challenges.

“Nevertheless, we see many opportunities opening up in Iskandar Malaysia from this year onwards for Leisure Farm. This year represents the tipping point of Iskandar Malaysia with the commencement of some catalytic developments such as the Johor Premium Outlet, Newcastle Medicine University and Legoland in September.

“The improved bilateral relationship with the Singapore has also seen interest in Iskandar Malaysia grow. We’re also optimistic because compared with Singapore, in terms of price per sq ft, we’re about one-fifth cheaper. So based on that, the Malaysian property market is still attractive,” says Yong.

By The Star

Look at the fine print in guaranteed rental returns

CALL them what you like leasebacks, buy-to-let, cash back, own-for-free developers have come up with creative plans to woo investors with guaranteed rental returns (GRRs) on yet-to-be-built properties.

Developers would agree to pay buyers rentals ranging from 8% to 12% per annum or a proportion of the purchase price for a certain length of time.

This kind of purchase, which has become increasingly common judging from the press advertisements, sounds enticing to investors who do not want the trouble of managing their own investments. You buy the property, and you get the rental returns thrown in.

While GRRs could be very attractive, investors need to know that the scheme is not as simple as it seems, much like ads that appeal to our desire to lose weight quickly, get rich fast or strike the lottery.

Realistic rentals

If a developer is offering GRRs, the buyer has no way of knowing whether that property is going to achieve the promise in the open market. The developer may not be able to get the guaranteed rent or the property may not be let out at all during the guaranteed period.


Generally, GRRs are best for the laidback investor. Some people will value the “simplicity” of the deal. However there are issues that buyers have to be aware of and comfortable with before entering into such agreements.

A typical mortgage lasts 20 years. If you have a guaranteed rental for just three years, what will happen for the next 17 years? You are left to sink or swim on your own.

A typical table of returns will show potential buyers a surplus income. A potential investor has to take into account the cost of maintaining the property, the taxes that come with being a property owner, the cost of maintaining the mortgage and all other fees related to acquiring the property.

Under most GRR schemes, you will need to buy a furniture package with the apartment and commit yourself to the management charges and sinking fund of the building, on top of the regulatory quit rent and assessment tax.

These will often take a substantial bite out of any rental money left each month.

GRRs are specifically aimed at selling units to investors, so you may see a situation of 500 apartments all going to the rental market rather than owner-occupiers at the end of the scheme. You will need to consider how many people will be chasing tenants at the end of the guarantee period and most particularly how many prospective tenants there are.

In areas of high competition, landlords will have to reduce the rent to attract available tenants. Consequently, the market value of the properties will go down rather than up.

If you decide to sell, you will also be limited to buyers who will also be mainly investors. Sellers will also find themselves competing with developers who are offering higher rental returns with new developments.

Overpricing When supply is more than demand, developers always look for ways to avoid having to reduce prices. While GRRs may offer attractive secure returns, it will be a false economy in the long run if the buyer ends up overpaying for the property.

A guarantee is only as good as the company who underwrites it. Even if the GRRs seem reasonable and are offered with honourable intentions, investors need to be sure that the developer would be able to sustain the returns if the rental or sales market were to take a turn for the worse. If developers were to default on the payments due to buyers, these buyers will likely default on their respective loan repayments, thereby setting off a chain of events with dire consequences.

Terms and conditions in GRR agreements are not regulated by law. As such, the inexperienced investors may not understand that the fine prints are often written in the guarantors' favour. Example of such clauses:

“Provided always and it is hereby agreed between the contracting parties hereto that the Developer reserves its right to terminate the GRR agreement for any reason whatsoever by giving TWO (2) MONTHS written notice to the Purchaser wherein such a case the Developer's obligation to pay the guaranteed return to the Purchaser shall cease from the date of such termination. Such notice is deemed to have been received within three (3) days from the date of the letter”

Purchaser's nightmare

Quite sometime ago, we received an email from an observer who was at a developer's office. He narrated this incident where he witnessed an elderly Ah Pek who had just taken “vacant possession” of his investments, comprising four units of apartments with a GRR scheme. He was demanding that the developer “take back” the units and give him a full refund on the purchases.

The Ah Pek had discovered that the four units he purchased under the developer's GRR scheme had depreciated in value by 25%. To rub salt to the wound, the developer had terminated the GRR scheme as allowed in their agreement, leaving the Ah Pek frustrated with his “failed” investment. The elderly Ah Pek wept in full view of all present at the developer's office! Did the “generous” developer give the Ah Pek any refund? Your guess is as good as mine.

In another case reported in the local papers two years ago, a group of investors filed a legal suit to claim from the developer whom they alleged had breached their agreements. They were practically throwing good money after bad. Win or lose, lawyers collected their fees upfront.

Buyers beware

The rental market is volatile, depending on current competition and market conditions. People investing in these schemes are not just buying properties that they hope will increase in value in time, but also using “other people's” money (from rentals) to pay for the purchase. It is, however, a cyclical market, and one is subject to the laws of supply and demand as in any other sector of the economy.

GRRs offered to investors should be checked carefully against the local market and competition. A simple survey within the location will give an investor a fair idea of the state of the local market. If market prices are lower than the proposed rent, incentives and discounts being offered to woo the buyers, then this are issues to be considered. If guarantees of rentals are higher than the existing market rate, then a rent decline after the end of the guarantee is likely. It is a classic case of caveat emptor rental guarantees can sometimes guarantee investors nothing but heartache.

Anyone who has any real estate experience knows there is no such thing as a guaranteed rental. Real estate, as with any other type of investment, has its ups and downs. There are times when one cannot rent out. Any developer or any person (mind you) who says that he is able to predict the future is “bluffing.”

Our economic cycle goes through cyclical changes that response to economic and other happenings in, as well as, outside our country. Projected monetary returns that cannot be guaranteed (or self-guaranteed) are doubtful in nature.

Had it been so profitable, don't you think that the developer, their shareholders and related companies would have snapped them up before being available in the market? Why don't they keep it for themselves? Guaranteed returns should be accompanied by documentary proof of a trust account nothing more nothing less.

Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, check or e-mail

By The Star (by Chang Kim Loong)

What are Iskandar’s attractions?

PROPERTY consultants say the lower price point compared with Singapore properties, which are eight to 10 times higher, and the proximity to Singapore are two of the main reasons why foreigners buy into Iskandar Malaysia’s property developments.

Personal, telephone and email interviews with property consultants in Kuala Lumpur, Johor and Singapore say most of the foreigners who buy into Iskandar Malaysia are Singaporeans, which developers in Johor confirm.

Singapore-based Jones Lang LaSalle head of residential project sales David Neubronner says the physical proximity to the city state is a huge attraction, when compared with buying properties in Kuala Lumpur city or Penang. A drive to Kuala Lumpur will take between four to five hours and to Penang island another three to four hours.

Neubronner: ‘Proximity to Singapore a huge attraction.’

“It is a case of picking at the low hanging fruits as there is the perception that the growth corridor, which is about an hour’s drive away, and relatively cheap to enter, is a new horizon with vast potential and opportunities. There is the perception that over time, values will multiply,” says Neubronner.

They have heard how the pioneer investors in Horizon Hills and Leisure Farm, who made their investments five to six years ago, have reaped hefty profit and enjoyed price appreciation in the property.

Johor-based KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng says the yield factor is not a major criteria for them.

“It’s capital appreciation they are after as that project is a 20-year plan.”

Location matters a lot and properties located at Nusajaya with their contemporary designs have generated a lot of attention. The same goes for waterfront projects.

“The higher cost of living in Singapore has resulted in some Singaporeans relocating to Johor. The common cultural and language platforms between the two countries have also played an important role,” says Tan.

Among the Japanese, Malaysia, which is free from natural disasters like earthquakes and typhoons, is a great attraction.

Tropical Resort Lifestyle (MM2H) Sdn Bhd managing director Ishihara Shotaro says Japanese interest has been particularly good after the March 2011 earthquake and tsunami, especially for those below 40 years old as Iskandar Malaysia has a 10- to 15-year timeframe to be developed.

Shotaro promotes Malaysian properties among the Japanese and is also involved in the Malaysia My Second Home (MM2H) programme.

Most of the major highways are operational. Among them are the Southern Link, Senai-Desaru Highway, EDL and Western Coastal Highway. There are also many interchanges and flyovers constructed to ease traffic flow within Johor Baru. Among them are those at Jalan Yahya Awal, at Jalan Abu Bakar, at Ulu Tiram town and soon at the Senai Airport junction. All these work towards improving connectivity within Iskandar. These new highways open new frontiers into regions which were not popular – or accessible – in the past.

“Since these highways and expressways have become operational, we noticed that property prices have shot up. Examples of these places are those near Nusajaya and along the Southern Link,” says Tan.

At the state government level, he says the local authorities have also worked to improve relationships.

“There must also be an atmosphere of welcome by the authorities which means there is a need for consistent and friendly foreign property ownership policies,” says Tan.

The marketing efforts and promotional campaigns by the stake holders (developers who are offering their projects there as well as those involved in promoting the growth corridor) have been rather effective with more reputable developers entering Johor’s property development sector.

Nevertheless, there are still concerns and perceptions which are also difficult to shake off. Among the main concerns is security followed by connectivity. Other important factors are proximity and availability of good and hygienic food and beverage outlets and other amenities.

Security has always been an issue with Johor and despite the assurances by the government at federal level that overall security has improved for the country, that concern remains.

Other concerns by investors are the quality of the workmanship of their purchases as most of these projects are purchased off plan. They are also concerned about delivery.

“With so much land and construction, demand may not meet supply,” says Neubronner.

“Potential for capital growth may also be constrained,” he says.

These, he says, are the negative issues. But while there are challenges, he is quick to add the challenges facing the Iskandar scheme do not seem as daunting as before.

“There seems to be more confidence on the delivery of the promise,” he says, adding that these issues can be overcome with better public relations with the market, which the Malaysian authorities at various levels are working hard on.

The entry of more reputable players into the fold has also boosted the confidence of investors, both local and foreign. Some of the big names in Malaysia’s property development who have interest there include Bandaraya Developments Bhd, which is known for its KLCC project The Troika, Cap Square and One Menerung in Bangsar, Kuala Lumpur and the SP Setia Group. The latest reputable developer to enter the Iskandar scheme is niche lifestyle developer Eastern & Oriental group wich is known for its Penang’s Tanjung Sri Pinang.

“They have some success with the Japanese in places like Horizon Hills. But the MM2H scheme has a lot of work ahead,” he says.

Singaporean and Japanese investors are generally comfortable with properties priced at about RM1mil or under S$500,000 – what they term “bite size” – between 600 sq ft and 1,000 sq ft. Investors prefer to buy multiple compact units in a few developments rather than to buy a single luxury apartment in the capital.

He says while the Iskandar scheme is quickly soaking up buying interest from Singaporeans, other locations of interest to them include London, Melbourne, Sydney and Kuala Lumpur.

By The Star