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Saturday, June 30, 2012

Tradewinds kicks off RM6b project, upgrades more assets

KUALA LUMPUR: Tradewinds Corp Bhd (TCB) will demolish the Crowne Plaza Mutiara Kuala Lumpur and Kompleks Antarabangsa as early as the first quarter of 2013 to build a RM6 billion Tradewinds Centre.

To be located on a 2.8ha site, the project with four towers and a retail podium, will have a total gross floor area of 3.77 million sq ft and a net floor area of 2.78 million sq ft.

The whole project will be completed in 2019.

“The buildings (along Jalan Sultan Ismail) will be demolished in the first quarter of 2013 or early part of the second quarter,” group chief executive officer Shaharul Farez Hassan said.

Shaharul said Crowne Plaza’s last day of operations will be on January 2 next year and that TCB is in negotiations with hotel operator InterContinental Hotels Group (IHG) on ending the management contract ahead of its term.

It is understood that Crowne Plaza held a townhall session yesterday to notify its staff on the last day of operations.

Shaharul said financing for the project would be from a combination of debt and equity.

“We will fund it with debt and equity. We are in talks with key bankers,” he said, adding that the ratio would be 70:30.

Another redevelopment by TCB is the Mutiara Burau Bay Resort in Langkawi, which will close in the first quarter next year.

The hotel is slated for a makeover that would push it to a five-star property from three-starTCB will spend about RM200 million to develop the property, targeted for completion in three years.

TCB, which has been the operator of Mutiara Burau Bay for Langkawi Development Authority, will now lease the land and build its own hotel.

It plans to hire a third party to manage the property.

TCB has refurbished some of its hotels to cushion the impact of the closures of Kompleks Antarabangsa, Crowne Plaza, Mutiara Burau Bay and Menara Tun Razak (MTR).

The latter building at Jalan Raja Laut in Kuala Lumpur will be upgraded to a Grade A office building.

Refurbishing efforts include renovating the Meritus Pelangi Beach Resort and Spa for an estimated RM60 million, Hilton Petaling Jaya (RM50 million), Hilton Kuching and Hotel Istana.

Shaharul, who spoke to reporters after TCB's annual general meeting yesterday, said the upgrading of MTR will help double its per sq ft rent to RM7 from RM3.50. The block is expected to be completed by end-2014.

A new tower called MTR2, to be built adjacent to MTR , has been sold to Tradewinds (M) Bhd for RM510 million.

On reports that TCB is interested in buying Bukit Bintang Plaza to accommodate the MY Rapid Transit (MRT) station, chairman Tan Sri Megat Najmuddin Megat Khas said: "We are in talks (with UDA Holdings Bhd), but nothing concrete has come out of it."

TCB also said that it is unlikely that anything will happen soon to its planned redevelopment of Hotel Istana.

By Business Times

Where land is scarce, the sky’s the limit

Low showing an artist impression of the Penang World City project.

IMPACTED by high-land cost in Penang, Ivory Properties Group Bhd will focus on building high-rise properties on the island.

Group chairman and chief executive officer Datuk Low Eng Hock says the price of landed properties may be beyond the affordability of most due to exorbitant land prices.

”We hardly come by a big parcel of land to plan for landed projects on the island. Most are pockets of land suitable for high rise development.

”We don't think planning for landed properties will work; the property prices will be very expensive,” Low adds.

The cost of a plot of net land in a prime area like Pulau Tikus is between RM500 and RM600 per sq ft. In Tanjung Bungah and Batu Ferringhi, land is priced between RM300 to RM400 per sq ft, while in the South-West district it is between RM100 and RM200 per sq ft.

The land price today is about 20% more than a year ago.

Ivory plans to launch only high-rise schemes in the second half of this year. These include:

the first phase of the RM10bil Penang World City (PWC) project in Bayan Mutiara

the RM300mil third and fourth phases of the residential towers for Penang Times Square

The Bay, a RM130mil sea-fronting condominium block in Batu Ferringhi

and the RM400mil City Mall and City Residence project in Tanjung Tokong

These are some of the key projects that will spur the growth of the group over the next five years.

Last year, Ivory acquired the 102.56 acres for the PWC project for RM1.072bil and 2.4 acres for The City Mall and City Residence in Tanjung Tokong for RM40mil.

The 1.1 acres for the The Bay project in Batu Ferringhi was acquired for RM25mil in 2010.

Despite the high land cost, Ivory plans to keep a percentage of the properties affordable.

The first phase of the PWC project on a 10-acre site, with an RM800mil gross development value, comprises approximately 1,500 condominium units, of which about 15% will be affordably priced between RM300,000 and RM500,000 for units with built-up areas of 600 sq ft and 800 sq ft.

“Subsequent phases for PWC will also see 15% of the properties priced in the affordable range of between RM300,000 and RM500,000. These units were in the entire master plan as a value-added component from the very early stage, even during the tender exercise for the project,” Low adds.

Low says the group also wants to position The Bay project as a medium to high-end scheme, as investors' preference for luxurious super-condominiums has dried up.

As for the City Mall and City Residence project, the plan is to develop 80% residential units and 20% of three-storey commercial lots.

“We are looking at selling the City Mall and City Residence units each for between RM700,000 and RM750,000. The City Mall will have a gross built-up area of 600,000 sq ft. For the residential towers for Penang Times Square, there will be 700 condominium units of various sizes, ranging from 400 sq ft to 1,200 sq ft,” he says.

To differentiate Ivory from its competitors, Low says the group will use architectural and cultural themes of a particular country in the Penang World City project. .

“As we are planning for a world class city within PWC. Economies of scale is of the essence. We need a huge number of Penangites to call Penang World City their home. That is why PWC has affordable components,,” he says.

There would be Chinese, Korean, Middle Eastern and European villages in PWC, so that the properties can be marketed in that particular country through an appointed real estate agent, he says.

“We want to create a world culture in order to attract tourism and foreign investors and to differentiate PWC from the other mega-development projects on the island. These parcels will be solely for en-bloc sales to expatriates,” he says.

Last July, Ivory won the right from Penang Development Corporation to purchase and develop the PWC project in Bayan Mutiara after edging out four other parties, including SP Setia Bhd,.

Ivory offered RM240 per sq ft or RM1.072bil for the entire site, the highest, , securing with it the right to develop on the existing 67.56-acre site and another 35 acres that will be reclaimed over the next three years.

Tropicana Ivory Sdn Bhd, a joint-venture company in which Dijaya Corporation Bhd holds a 55% stake, and Ivory Properties Group Bhd the remaining 45%, is the developer of the PWC project.

On the City Mall and City Residence, he says the residential components will sit above the retail outlets. It will have an open tropical style interior design featuring giant palm trees, water features with lots of natural lighting, to blend with the architectural design of the residential component,” he adds.

By The Star

KSL awaiting nod for project

PROPERTY developer KSL Holdings Bhd is yet to receive building approval for its proposed 10-storey high-end condominium development in Jalan Madge off Jalan U-Thant, Kuala Lumpur.

The project has been on KSL's plans as far back as 2010, a company official said, who declined to put a timeline on the possible approval.

KSL first obtained the project's land in June 2010 for RM24.5 million.

Meanwhile, the company yesterday told its shareholders it would not be paying out dividends this year in a move to cut its gearing level.

KSL executive chairman Ku Hwa Seng said while it was a bitter pill for the shareholders to swallow, the management believes it was in the best interest of the company.

KSL has some RM243 million in borrowings, while cash stood at negative RM582,000.

Ku told Business Times the company hopes to shave off about RM100 million off its borrowings.

On its biggest project KSL City, Ku said the 868-room KSL Resort is currently 70 per cent completed, while KSL City Mall is 85 per cent occupied.

The average room rate (ARR) at KSL Resort is between RM150 and RM160 currently, at promotional rates.

Ku is confident that the ARR will reach RM200 at the end of the promotional period at end-July.

Next week, the developer with land mainly in Johor will launch phase one of its RM2.5 billion Bandar Bestari mixed development project in Klang.

The project will have a gross development value of RM200 million.

KSL has some 800ha of undeveloped land bank and is still on the look out for more land, Ku said.

By Business Times

Selling a haunted house

SELLING a house, even in a stable property market, can be quite a challenge. But what if the home you’re trying to dispose of happens to be haunted?

It’s not a common occurrence, but once in a while, you (or someone you know) may end up running into a property transaction where the house was the scene of a horrific crime and is now home to some ghostly inhabitants.

According to an article by US-based Realtor Magazine, haunted properties fall within the category of “stigmatised properties,” or real estate that is not defective in any physical manner, but due to psychological or emotional factors, may have a reduced value.

Among the situations covered under the title of “stigmatised” is a property that was the site of a murder, suicide, alleged haunting, or “other parapsychological phenomenon,” it says.

And according to Reuters, stigmatised homes typically sell for 10% to 20% less than comparable homes.

On the local front, all of this is compounded by the fact that most Malaysians are generally quite superstitious, meaning that anything associated with the dead is considered taboo and should be avoided like a plague!

One local property realtor concurs that a haunted house is much more difficult to sell.

“It’s a known fact that it will affect the marketability of the property and may even take a long time to sell it.

“If it’s known in the market that someone was killed there, the price could be affected,” he says.

In a worst case scenario, if your home is haunted, it may never get sold, says VPC Alliance (Malaysia) Sdn Bhd director James Wong.

“There are many abandoned houses in Malaysia that are supposedly haunted and have been vacant for a long time because they are difficult to sell,” he tells StarBizWeek.

If you happened to own a house that has a macabre past and plan to put it on the market. What can you do to increase the marketability of this supposedly haunted dwelling?

Rumours and hearsay

A house could falsely be considered haunted due to rumours or inaccurate stories.

“Sometimes it’s all just a matter of hearsay. No one may have actually experienced anything eerie, but people just keep talking about it,” says Malaysian Institute of Estate Agents president Nixon Paul.

“They may say things like ‘don’t go to that place because it’s haunted,’ and then the story just stops there. Nothing supernatural is really experienced and the house (is stigmatised) due to a malicious rumour.”

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng points out that people can get easily carried away by stories they read or movies they watch.

“Sometimes movies can have a psychological effect on people. But after they live in the house for a while and nothing bad is experienced, everything is fine.”

Sometimes, the imagination can play cruel tricks on the mind. If you’re convinced that you have spiritual squatters living with you, get an expert to examine the place.

“It’s always best to get to the bottom of things – just to be sure,” says Vincent Liew, a seasoned roof repairman who also does household repairs.

“The sounds you hear could be caused by the wind and the vibrations you feel from loose fittings or a heavy vehicle passing by. If you’re seeing shadows, check to see if they are caused by something external, like an overhanging tree branch or moving curtains, for example. Try recreating the sound yourself.”

If the house you own is looking a little dilapidated, giving it a ghostly appearance, all it may need is some sprucing up or a fresh coat of paint.

KL Interior Design executive designer Robert Lee says “a house looks like it is haunted” because of the lack of maintenance.

“If your house is overgrown with weeds, cut or trim the bushes. If the wall or fence is damaged, fix it. Some properties are so badly neglected, it can actually look abandoned or even haunted. This won’t boost your resale value,” he says.

If, after everything you’ve done and you’re still convinced that the property you have is haunted, then it’s best to get an expert to deal with it.

“Getting help from a priest or a medium can help deal with this,” says Lee.


If, after everything you’ve done and your spooky inhabitants refuse to go away, then the next thing you need to consider is whether to disclose to the prospective buyers that the house you’re selling is indeed haunted.

In certain countries, such as the United States, it is a legal obligation for the seller to disclose information about the property’s history, for example the house may have been the scene of a gruesome crime such as murder.

Fortunately for sellers, no such law exists in Malaysia.

“In this case, the doctrine of caveat emptor (which is Latin for “Let the buyer beware”) applies,” says one industry expert.

“Here, the onus is on the buyer to do research about the property’s history. There is no onus on the seller or agent to disclose anything,” he says.

Kuala Lumpur-based lawyer Dinesh Kanavaji concurs that there is no rule for a seller to disclose that his or her property is haunted.

“There is no legal obligation. But then, which seller would want to disclose that anyway? Of course, morally, you should disclose.

“Either way, a buyer should do the necessary research first if he’s heard things about the house,” he says.

Not a bad thing

To some buyers, a haunted house may be more of an attraction than a deterrent.

“Not everyone is superstitious or cares if a house is haunted. As long as they have a roof above their heads, that’s all that counts,” says one industry observer.

“In a hot property market where prices are sky-high, a haunted house, which would fetch a lower price, is more likely to attract prospective buyers in droves – assuming of course they’re not concerned about sharing their abode with some ghostly housemates,” he adds.

In an article last year, online business portal Business Insider reported that investors sometimes look to buy a haunted house in the hope of gutting the premises, building a new abode and reselling it for a larger profit.

“Other times, adventurous business owners purchase haunted houses in order to transform the properties into bed-and-breakfast, restaurants, or local businesses that will attract curious visitors.”

While many believe that it’s detrimental to own a haunted property, whether residential or commercial, some believe that the impact would be lesser if it’s the latter.

“If it’s residential property, it will have a bigger impact because people are living there. That’s not the case for retail premises because you’re not living there, so it’s not too much of a concern,” says Richard Chan, past president of the Malaysian Association for Shopping and Highrise Complex Management and national committee member of the Building Management Association of Malaysia.

“Of course it does not help if the (commercial) property is haunted, but it’s not detrimental,” he says.

Chan adds that sometimes it’s best to not know what you’re buying into.

“What you don’t know won’t hurt you,” he says.

Another industry observer, meanwhile, believes one has to worry more about the living than the dead.

“It’s better to live next to a cemetery than an unruly neighbour,” he says.

By The Star

Housing fund poser

Is the 3% deposit imposed enough to revive abandoned projects?

Recently, it was reported that an amendment to the housing Development Act 2012 will require developers to set aside 3% of the gross development cost to be placed in a fund that will be managed by the Housing and Local Government Ministry. The proceeds from the fund will be used to revive abandoned projects.

The Housing Developers Authority (HDA) will only issue licensed permit once the 3% is paid (to be enforced end of this year). It is a good move but the quantum may be insufficient to rectify the problem.

The reason being, it all depends at what stage of construction the projects were abandoned. If they wereat 20% completion, then 3% allocation may be insufficient, unless we assume the balance 80% can be sourced from the fund.

It remains unclear how the fund works. A check with the Housing Ministry indicates that the 3% allocation can be refunded to the developer concerned if the project is completed. From what I understand, the 3% allocation is then not considered as a contribution to the fund since the deposit is refundable.

Fund or not?

I fail to understand how 3% can be sufficient unless the completion-to-date reaches 97% development cost (assume also 97% physical completion) and the amount to complete requires the balance 3%. The fund looks and sounds like a fund but in reality, it is not truly a “fund”.

Assuming all the developers completed their projects and there is no abandonment, what does it mean? It means all the deposits will be refunded and there will be no money in the fund, so I don’t see how the fund will help other abandoned projects.

I used to have a friend in Rehda institute who told me that it had in the past actually kick-started an “insurance” concept where all members could contribute some money into the pool. This money was to be used to help members in the event a project was abandoned.

Somehow, it did not take off.

There are many causes of abandonment but invariably the developers who cause problems are the ones that are inadequately capitalised to carry out development projects. In other words, they are not financially strong, they rely too heavily on bank financing and buyers to fund their projects.

The development risk is skewed towards the consumers, meaning they take bigger risk in the event of a failure.

Saving projects

Everybody thinks property development is very profitable and they want to jump onto the bandwagon to make a fast buck. Many do not have the necessary experience and don’t bother to do market studies. The result is that they have a wrong product in a location where there is no demand.

Others get into trouble because they are too ambitious and have financially over-stretched themselves. Some of these projects were designed-driven rather than market driven.

When a project is abandoned, it leads to legal and technical problems. Reviving abandoned projects is no easy task.

In a private free market, white knights (except the Government) will only come in if they can make money upon reviving a project.

I have seen cases where liquidators act as developers. But they do not use their own money. They use the fund accumulated from the additional top up from buyers, money in the developer’s account, buyers’ past payments and sale of remaining units. In these cases, buyers waive their late delivery claims.

When the Government comes in to help, the objective is different. The motive is not profit but a sense of social responsibility. However, they only focus on low/medium cost projects.

I have also seen bridging financiers acting as temporary “developers” who use their own internal fund to complete the projects. They take calculated risk while the white knights will only proceed if the projected result shows viability.

Their injection of fund varies, depending on the stages of completion to date. Some are abandoned at 50% completion, some at 90%. There are times when internal funding is inadequate and external funding is required. There is, therefore, no pre-determined amount required to complete an abandoned project.

Coming back to the 3% allocation, smaller developers complain of high opportunity cost involved when their money is locked up in the HDA account. Bigger developers are well capitalised and have no problem with the 3% ruling.

Buyers at risk

All developers make provisions of between 3% and 5% for contingency or cost variance. The bigger developers will use the provision to meet the requirement. Smaller developers argue that it is a burden and barrier to entry into the industry.

My question is: “A property development often runs into hundreds of millions of ringgit. If they cannot pay the 3% development cost, what does that tell you?”

They want to have their cake and eat it too. The problem is, most developers want to fund their projects almost entirely by purchasers’ cashflow. I can understand if they are unable to come up with 100% equity but how about 30% to 40% own capital and the rest from financiers or buyers’ progressive payments?

Lastly, what is the level of enforcement by the authorities? What is the point of having all the rules and regulations if they are not enforced?

We have cases where developers do not even apply for a developer’s license. Hence, they do not have to pay the RM200,000 deposit for the developer’s licence and open a HDA account. Buyers’ interest are therefore not protected.

What guarantee is there that they will play by the rules and pay the 3%?

People will circumvent the system if malpractices are allowed to go unpunished.

I hope the authority will take a tougher stance to safeguard buyers as well as the industry from the few rogue developers who give the industry a bad reputation.

·Chris Yong is the principal of Rochester Properties.

By The Star (by Chris Yong)

Starhill REIT revalues The Residences

KUALA LUMPUR: Starhill REIT (real estate investment trust) has carried out a revaluation of The Residences which is housed under its portfolio of assets to comply with Clause 10.03 of the Securities Commission's REIT Guidelines.

The trust told Bursa Malaysia that the revaluation had been carried out by Azmi & Co Sdn Bhd, an independent professional valuer, on June 8 and would increase the net asset value per unit from RM1.151 to RM1.155 per unit after incorporation of a revaluation surplus of RM5mil.

By The Star

Friday, June 29, 2012

LBS targets China property launch

PETALING JAYA: LBS Bina Group Bhd plans to launch its maiden property project in Zhuhai, China, by the middle of next year.

Managing director Datuk Lim Hock San said the first phase of the 79ha project might comprise a resort-type high-end landed one.

"We are definitely going to launch the project in China next year. Depending on the market, it could be in the second or third quarter of 2013," he said after LBS' annual general meeting here yesterday.

LBS had submitted its plans to the authorities for approval and should receive a reply in October, Lim added.

The project, which will take five to seven years to complete, is a 60:40 joint venture with Jiuzhou Group, a Chinese government-linked company.

In April this year, LBS' wholly-owned Intellplace Holdings Ltd signed a memorandum of understanding with JDCL's wholly-owned Jiuzhou Technology Co Ltd for the sale of two LBS companies involved in golf club operations and property development projects in Zhuhai.

LBS is then expected to become a substantial shareholder of the Hong Kong Stock Exchange-listed JDCL.

For the Zhuhai project, LBS will not be involved in the financing, although it will have a stake in JDCL.

On the domestic front, LBS said it was on track to achieve its 2012 sales target of RM800 million, Lim said.

As of June 27 2012, it had achieved about RM500 million in sales.

Yesterday, LBS shareholders approved the payment of a first and final dividend of 2.5 sen per ordinary share of RM1.00.

By Business Times

Crest Builder unit to build RM1.3bil project

KUALA LUMPUR: Crest Builder Holdings Bhd’s 51%-owned subsidiary, Landasan Bayu Sdn Bhd, had received a letter of intent from Lembaga Getah Malaysia (Malaysian Rubber Board) for the mixed property development with an estimated gross development value (GDV) of RM1.33bil.

Landasan Bayu is a 51:49 joint venture between Crest Builder Sdn Bhd and Tindakan Juara Sdn Bhd. The plot of land which will be developed is located at the intersection of Jalan Ampang and Jalan Jelatek in Kuala Lumpur and has an area measurement of about 19,247 sq m.

“The estimated gross floor area of the development is expected to be about 1.65 million sq ft,” it said.

The company told Bursa Malaysia that the mixed development comprised three 28-storey apartment and soho (small office home office) towers, a 33-storey corporate tower and a six-storey retail mall, and would be complete with the infrastructure, common facilities and common services.

“The development is expected to commence physical works in 2013, and is expected to be completed in 2018,” it said.

Lembaga Getah was entitled to RM299.85mil, in a mixture of both cash as well as completed property entitlements, it added.

The proposed development will not have any significant effect on the earnings or net assets of Crest Builder for the financial year ending Dec 31, 2012, and the share capital of the company. However, it was expected to contribute positively to its future earnings, it said.

The company also said the risk factors for the proposed joint-venture development would include but not limited to those associated with changes in the economic and regulatory conditions, such as changes to cost of funding and taxes.

By The Star

Crest Builder plans RM1.3b project in KL

KUALA LUMPUR: Crest Builder Holdings Bhd will develop a mixed property project at Jalan Ampang, Kuala Lumpur, generating RM1.33 billion in gross development value over six years.

The firm said in a filing to Bursa Malaysia yesterday that its 51 per cent owned unit, Landasan Bayu Sdn Bhd, had received a letter of intent from Malaysian Rubber Board for the proposed development, which is due to start next year.

By Business Times

Tradewinds to redevelop Crowne Plaza

KUALA LUMPUR: Tradewinds Corp Bhd (TCB) confirmed today that it will demolish the Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa in Jalan Sultan Ismail to pave the way for a RM6 billion mixed development project.

The company said it will redevelop the 2.8 hectare land on its own, and not via a joint venture as reported previously.

The project, comprising grade A+ offices, serviced apartments and retail space, is scheduled to be completed in seven years.

Speaking to reporters after meeting with stakeholders here, its Chief Executive Officer Shaharul Farez Hassan said the project will be funded by bank loans and debt equity, with a ratio of 70:30.

"We are talking with a few banks now," he added.

Crowne Plaza is a 35-storey hotel with over 500 rooms while Kompleks Antarabangsa is a 21-storey office building.

The project once completed, will reportedly, be known as the Tradewinds Centre.

By Bernama

Thursday, June 28, 2012

Crowne Plaza to make way for Tradewinds Centre project

KUALA LUMPUR: Tradewinds Corp Bhd (TCB) is scheduled to demolish two of its buildings here next year to make way for the Tradewinds Centre project.

The Tradewinds Centre, which will have four towers and is stimated to have a gross development value of more than RM5 billion, will be built at the locations of the Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa in Jalan Sultan Ismail.

The project will sit on a 2.8ha land and consist of office units, serviced apartments and a retail component.

According to sources, Crowne Plaza, which is managed by international hotel group Inter Continental Hotels Group (IHG), is expected to close its doors in March next year.

It is unclear if IHG will be compensated should its management contract be terminated ahead of its tenure.

Crowne Plaza could not be reached for an immediate response.

Crowne Plaza is a 35-storey hotel with 565 rooms while Kompleks Antarabangsa is a 21-storey office building with five split-level
car parks.

Business Times had reported earlier last year that TCB was looking for a partner to help fund the project.

Sources said a related company could buy one of the four towers for an estimated RM600 million.

Attempts to contact TCB group chief executive officer Shaharul Farez Hassan failed.

A search on the Internet reveals GDP Architect as the architect hand-ling the Tradewinds Centre project with the first phase of completion slated for 2016.

"The Tradewinds Centre explicitly seeks to establish itself in the international arena of great financial developments. The Tradewinds project offers Kuala Lumpur many exciting features that will enhance and expand the city's growing modern qualities, similar to Rockefeller Center for New York, or Roppongi Hills, for Tokyo," said the architect firm's website, which also carries an artist's impression of the building.

The total gross floor area is 3.17 million sq m and it will have 2,888 parking lots.

Interestingly, in September last year, the then Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail said it had granted TCB an order to redevelop the 21-year-old Hotel Istana, located at the corner of Jalan Raja Chulan and Jalan Sultan Ismail.

TCB will hold its annual general meeting tomorrow.

By Business Times

KLCC Property shares advance on REIT option

KUALA LUMPUR: Shares of KLCC Property Holdings Bhd (KLCCP) rose to a high of RM4.32 on Thursday after it announced plans to look into the setting up of a real estate investment trust (REIT).

At 2.54pm, KLCCP was up 46 sen to RM4.32 with 1.99 million shares done. Its call warrants KLCCP-CA added 10.5 sen to 30.5 sen with 1.75 million unites done.

The FBM KLCI fell 5.26 points to 1,596.63. Turnover was 885.02 million shares valued at RM1.70bil. Losers beat gainers 413 to 193 while 313 counters were unchanged.

KLCCP announced earlier on Thursday that a REIT or equivalent would optimise shareholder value.

It dad authorised the management of KLCCP to explore a corporate structure including an appropriate REIT or equivalent.

"It is expected that any proposals arising from this exercise will be subject to the approvals of relevant authorities, the board of KLCCP, and shareholders," it said in a statement to Bursa Malaysia.

By The Star

Why no notice on high-rise project

Application withdrawn: A developer had submitted their plans to build a SoHo and serviced apartment on the land that is currently used as a hawker centre in Section 19 this year.

The Forum 19 development in Section 19, Petaling Jaya was the hot topic at a meeting held between residents of SS2B, the police and the Petaling Jaya City Council (MBPJ).

During the dialogue, residents raised their concern over the 34-storey Small Office/Home Office (SoHo) units and serviced apartment development, and the lack of feedback from the relevant department on the status of the developer’s application.

According to SS2B Rukun Tetangga chairman Willie Tan, the developer had submitted the plans earlier this year for the land that is currently used as a hawker centre.

A few residents were informed about it before word spread. Tan said MBPJ should have informed all the residents since the development would affect them as the neighbourhood was next to Section 19.

“No signboards for objection had been put up. Of course we would be concerned with the development as the road is already congested” he said.

The residents sent several letters to MBPJ, objecting to the project but none received an official reply. Only a statement was seen in a local daily stating that the developer had withdrawn the application.

“Some of the residents received a letter last week about the withdrawal. We were dissappointed that we were only informed after the withdrawal was done, which would mean the MBPJ left us in the dark during the application process. This is not right,” added Tan.

The residents brought up the topic again, concerned that the project might take off once the area is re-zoned.

However, Petaling Jaya Utara MP Tony Pua assured the residents that only projects that fulfil the requirements will see the light of day.

Zone eight councillor Tony Cheong who was also present said they have upgraded the system for e-mail complaints from residents that will help with the follow-up of complaints made.

Apart from that, the residents complained that the trees in front of their homes had not been pruned properly. This obstructs light from the street lamps, making the area unsafe for residents.

Cheong said he would personally visit the site and notify the relevant departments.

Also present at the meeting was Seapark police station Chief Inspector Gunam Resul Gulam and Damansara Utama assemblyman Dr Cheah Wing Yin’s representative Robert Tan.

Some of the residents of Jalan 19/1 also complained about vehicles including lorries which double park on the road, causing massive congestion during peak hours.

C/Insp Gunam assured the residents that he will place two officers to issue parking tickets to the vehicle owners.

By The Star

Faber to continue expanding integrated facilities management division

KUALA LUMPUR: Faber Group Bhd will continue to expand its integrated facilities management (IFM) business locally and overseas by targeting commercial buildings apart from hospitals.

Faber managing director Adnan Mohammad said the company would continue to pursue the non-concession business in United Arab Emirates and India actively as there were opportunities there.

He said the company was looking at commercial buildings, such as offices for the IFM arm, besides hospitals.

“The competition is posed by low barriers to entry. We are coming up with innovative products related to energy and environment and link it with our services,” he said.

Meanwhile, Adnan said the extension to the existing concession agreement (CA) for the privatisation of hospital support services was still pending.

He said the CA would depend on the “negotiation and meetings with the Government.” “We hope that there will be a conclusion by the end of this year.”

Currently, the company's IFM unit contributes 82% to revenue with the concession business contributing 64% and non-concession business the remainder.

Adnan said the property unit, which contributed 18% to revenue, was still negotiating with landowners and potential joint-venture partners.

He, however, declined to reveal details of the discussions as they were in “preliminary stage.” “The real challenge is getting the right piece of land, which is scarce.”

“With the on-going projects, we have until 2016 to complete (the lands we have) in Kuala Lumpur,” he told StarBiz when asked about the size of the company's landbank.

“The 2.5 acres at Persiaran Gurney will be launched in the fourth quarter of 2012 and condominium units on a 5-acre site in Kota Kinabalu will be launched next year,” Adnan said.

By The Star

UK house prices drop in June-Nationwide

LONDON: British house prices fell back in June with the annual pace of decline reaching its highest rate for almost three years as the economy remained weak with little sign of a bounce back, mortgage lender Nationwide said on Thursday.

House prices fell 0.6 percent in June after a rise of 0.2 percent in May, leaving prices 1.5 percent lower than a year ago, the lowest reading for annual growth since August 2009.

"The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound," said Nationwide's chief economist Robert Gardner.

Nationwide said the outlook for house prices remained highly uncertain, with economic conditions likely to stay challenging.

But it said efforts by policymakers to boost credit to the economy and lower its cost should support demand, while the supply of housing remained constrained with construction failing to keep pace with the number of households being formed.

"Overall, this suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months," Gardner added.


Wednesday, June 27, 2012

IGB eyes hospitality, office REITs

KUALA LUMPUR: IGB Corp Bhd (IGB), which will have RM800 million cash following the listing of IGB Real Estate Investment Trust (REIT), is looking at spinning off two more REITs in the next five years.

Group managing director Robert Tan Chung Meng said that the group would ultimately like to have a hospitality and office REIT, but the exact timing for the product could not be determined now.

"It could be anything between two and five years," Tan said.

The timing, he said, now is suited for a retail REIT and hence it is establishing a IGB REIT, which will have two of Malaysia's most prized mall assets - The Mid Valley Megamall and The Gardens Mall.

IGB's preference is also to have separate REITs for different business and not to place it all under the same REIT.

IGB, a property developer, also operates hotels and manages office buildings to obtain recurring income.

The listing of the IGB REIT is expected to be in September 2012.

Some 3.4 billion units will be issued under the exercise for the two malls which have been a valued at RM4.6 billion.

Currently, both assets come under KrisAssets Holdings Bhd, in which IGB has a 75 per cent stake. KrisAssets will sell the shopping complexes to the IGB REIT.

IGB's stake in the soon-to-be-listed trust will be 51 per cent. The dilution of the stake would provide IGB with an estimated RM800 million in cash, following the listing exercise.

Tan, who was speaking to reporters following IGB and KrisAssets annual general meeting yesterday, said that RM800 million will be used for future expansion both locally and abroad.

The board has no intention to maintain the listing of KrisAssets.

Meanwhile, Tan said IGB continues to look for properties in the country and abroad for merger and acquisition purposes, and take advantage of the opportunity in the uncertain global economy which could offer assets at a bargain.

By Business Times

Glomac FY12 profit jumps 36% on property sales

PETALING JAYA: Glomac Bhd announced a 36.2% jump in its financial year 2012 (FY12) net profit from RM62.98mil to RM85.78mil, attributable to the commendable sales of its prime mixed developments.

Its revenue for the 12-month period ended April 30 was 9.7% higher at RM655.61mil compared with RM597.48mil a year ago.

In its filing with Bursa Malaysia, the group said the improvement was due to “on-going sales and progressive recognition of development projects in Glomac Damansara, Bandar Saujana Utama, Saujana Rawang and Glomac Cyberjaya”.

In its press statement, Glomac elaborated that profits were anchored by Glomac Damansara, Glomac Cyberjaya and final billings from the completed Glomac Tower.

“Our total sales of RM663mil achieved in FY12 were higher than our internal target of RM500mil, driven by our prime mixed developments,” group executive chairman Tan Sri FD Mansor said.

He added that the launch of Glomac’s 39-storey Reflection Residences in March 2012 and the freehold serviced apartment project in Mutiara Damansara with a gross development value (GDV) of RM270mil received good response. The latter was 90% sold to date.

Moving forward, the group’s earnings growth will come from its record unbilled sales of RM731mil, alongside its pipeline of development projects with a total available GDV of about RM7bil.

Glomac has development landbanks of 200 acres in Sungai Buloh, adjacent to Bandar Saujana Utama and 192 acres in Dengkil for a new township project.

These projects are estimated to generate a GDV of RM800mil each.

Glomac is also proposing a final gross dividend of 2.75 sen per share less 25% tax for the financial year.

The total dividend paid for FY12 is 5.5sen, 4.75 sen higher than the previous year.

Meanwhile, Bernama reported that at an analyst briefing yesterday, group managing director and chief executive officer Datuk FD Iskandar Mansor said Glomac aimed to grow its market capitalisation to RM1bil from the current RM600mil in the next three years.

He said the growth would be underpinned by both merger and acquisition (M&A) exercise as well as organic growth. “To grow the market cap from RM300mil to RM600mil took us about two to three years. So we expect a similar timeline for this objective.

“However, the aim is still subject to the external economic factors and domestic demand,” he told reporters after the briefing.

By The Star

IGB Corp to fund growth with REIT listing proceeds

KUALA LUMPUR: IGB Corp Bhd is expecting to raise some RM800mil in cash from the upcoming listing of its retail real estate investment trust (REIT), which is expected to happen in mid-August.

IGB Corp group managing director Robert Tan said the proceeds would be used for future expansion activities, which “are in the pipeline.”

Tan also confirmed a recent StarBiz report that said IGB Corp was mulling over another two REITs to unlock the value of its office and hotel assets.

“If this (the listing of the retail REIT) goes well, we will look at the possibility of the office/commercial and hotel/hospitality REITs.

“It is a question of the timeline or timing. Now, the demand is good for a retail REIT but an office REIT is not the flavour of the month.

“Also, the office/commercial and hotel/hospitality REITs would have different investors with different expectations,” he told reporters after the group's EGM.

To recap, the listing of IGB's maiden REIT, the retail REIT, in the third quarter of this year is to unlock the value of its two prime retail assets - Mid Valley Megamall and The Gardens Mall.

Both the malls are currently parked under IGB Corp's 75%-owned unit, KrisAssets Holdings Bhd.

KrisAssets Holdings has proposed to sell both the retail malls and their related assets to its parent IGB Corp for RM4.6bil.

The disposal would be satisfied via cash and the issuance of 3.4 billion units in IGB REIT.

KrisAssets had also proposed an offer for sale of 670 million consideration units by Mid Valley City Gardens Sdn Bhd via the initial public offering (IPO) of IGB REIT.

KrisAssets said it wanted to distribute 2.73 billion consideration units, as well as the remaining cash proceeds from the sale of the two properties and the IPO to its entitled shareholders at a date to be determined and announced later.

KrisAssets' board has no intention of maintaining the company' listing status after the completion of the proposed disposal of its two malls.

Meanwhile, the group's hotel division including associates, reported revenue of RM424.2mil in 2011, which was up 14.5% compared with RM370.5mil in 2010.

In its annual report, IGB Corp also said last year, rental revenue from office buildings was within expectation with an improved contribution of RM112.2mil, compared with RM105.8mil in 2010.

Tan also said IGB Corp was looking at mergers and acquisitions, both locally and abroad.

“We are in an opportunistic mode,” he said.

Tan also said the group would continue to focus on centrally located city hotels.

“We do not want to compete with resort operators.

“We will continue to focus on our strength, which is city hotels.

“Location is central,” he added.

Meanwhile, the group has a remaining land bank of 2,000 acres with the bulk in Selangor.

In its annual report, IGB Corp stated that its property development unit had seen encouraging sales for its mixed commercial development G Residence, which was launched in Feb 2012.

To date, 85% of G Residence units have been sold.

Located off Jalan Ampang Hilir, Kuala Lumpur, G Residence comprising 474 service apartments and 26 retail shops, has a gross development value (GDV) of RM430mil.

By The Star

BB Plaza to make way for MRT station

Landmark: The iconic 38-year-old BB Plaza, located in the heart of Kuala Lumpur, will be demolished to make way for the MRT project.

KUALA LUMPUR: The 38-year-old Bukit Bintang Plaza (BB Plaza) will need to make way for the construction of a My Rapid Transit (MRT) station, contradicting earlier reports that only the front of the property and basement will be needed for development purposes.

UDA Holdings Bhd officials, who earlier met with BB Plaza’s tenants to clear up the confusion on the status of the property, said they had been asked to vacate the premises by MRT Corp by the end of the year in a meeting two weeks ago.

UDA, a wholly-owned entity under the ministry, owns BB Plaza as well as several other commercial properties in central Kuala Lumpur, Ipoh and Johor Baru.

UDA group managing director Ahmad Abu Bakar said at a media briefing that Tradewinds Corp Bhd, a property and hotel conglomerate majority-owned by media-shy tycoon Tan Sri Syed Mokhtar Al-Bukhary, had expressed its interest to acquire the property.

“We discussed it at the board and have related the offer back to the ministry, so we’ll wait for the decision,” he said, adding that there were parties who were interested to either jointly develop or acquire the property.

According to recent reports, Tradewinds Corp had approached UDA to redevelop BB Plaza under a 50:50 joint venture which the latter’s board had declined because the returns were not lucrative enough.

MRT Corp, the body tasked with overseeing the development of the MRT line, have previously said it has no plans to acquire BB Plaza, valued at an estimated RM500mil.

Ahmad said UDA had no plans to redevelop the property on its own due to the lack of funds. “There’s been talk of redevelopment but not in the near term as we don’t have the funds because we’re trying to clean up our balance sheet,” he clarified.

UDA’s senior vice-president of property management Syed Ahmad Nazri Syed Kamaruzaman said the company was just as surprised as the tenants that the property was going to be demolished.

“We had a meeting with the tenants because of the confusion over the status of the property especially after reports came out saying that BB Plaza will not be demolished. In all our meetings with the ministry, the understanding is that the property will be demolished,” he said.

Syed Ahmad Nazri said a letter from MRT Corp only requested UDA to vacate the front of the property while Ahmad pointed out that this has caused a lot of confusion.

“Initially MRT Corp told us that they just need the front portion and that the station will be underground.

“They said there was no need to demolish the whole building. Later on when we discussed with them, they said the whole building will have to be brought down, so this is the confusion of the last one month or so,” he said.

Meanwhile, Syed Ahmad Nazri said compensation for the tenants was discussed but it was the stance of the company that compensation should come from MRT Corp.

“In fact we’ve passed the claims of several of the tenants to MRT Corp and they have come back to us asking for more information. Even though there’s nothing formal, we’re working towards it,” he said.

By The Star

UMLand upbeat on new projects

KUALA LUMPUR: United Malayan Land Bhd (UMLand) is upbeat on its plan to launch about 1,500 units of mixed properties with a gross development value (GDV) of RM1bil this year.

Group chief executive officer Chia Lui Meng said the projects, both township and niche, were mostly located in Iskandar Malaysia and were expected to enhance the group’s earnings for at least the next two years.

By Bernama

Tuesday, June 26, 2012

REIT market's worth to hit RM20b this year

KUALA LUMPUR: Market capitalisation for Real Estate Investment Trust (REIT) in Malaysia is expected to grow by 30 per cent to RM20 billion this year from RM15 billion last year, an industry player said.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said the increase will come mainly from the listing of IGB Corp Bhd's REIT in the second half of this year.

"The IGB REIT listing is worth between RM3.5 billion and RM4.5 billion. We are confident the market value could reach RM20 billion this year," he told reporters after the opening of the Real Estate Investment Trust Conference 2012 by Housing and Local Government Minister Datuk Seri Chor Chee Heung, yesterday.

IGB, a general construction and real estate developer, operates through four business segments, namely property development, property investment and management, construction and hotel.

The company's initial investment portfolio on Bursa Malaysia Main Market will comprise eight-storey retail mall called "The Gardens Mall" and its five-storey retail mall "Mid Valley Megamall".

On the industry performance and outlook, Real Estate and Housing Developers' Association Malaysia president Datuk Seri Michael Yam Kong Choy said the industry has been robust in the first half of this year.

Going forward into the second half, he said, the market is expected to moderate, awaiting a fresh moving factor.

Organised by the Asian Strategy and Leadership Institute, the REIT Conference 2012 brought together key decision makers, policymakers, sector players, property developers, asset managers, investors and consultants to share experience and forecast outlook and opportunities in the REIT market.

The conference will, among others, discuss new trends and the industry's development.

By Bernama

Glomac Q4 earnings up 49.1% to RM22.24m

KUALA LUMPUR: Glomac Bhd's earnings rose to RM22.24mil in the fourth quarter ended April 30, 2012 and expected earnings growth to be underpinned by its unbilled sales of RM731mil and development projects with a gross development value (GDV) of RM7bil.

It announced on Tuesday the earnings were 49.1% higher than the RM15.02mil a year ago. Revenue rose 61.1% to RM247.66mil from RM153.73mil.

Earnings per share were 3.90 sen compared with 2.54 sen. It also proposed a final dividend of 2.75 sen a share, compared with 2.50 sen a year ago.

For the financial year ended April 30, 2012, its earnings rose 36.2% to RM85.78mil from RM62.98mil. Revenue rose 9.7% to RM655.61mil from RM597.47mil.

Glomac group executive chairman, Tan Sri F.D. Mansor said anchoring the profits for the year were Glomac Damansara and Glomac Cyberjaya, as well as the final billings from the completed Glomac Tower.

"With this, we are pleased to see that Glomac has consistently delivered steady growth in profits over the recent years. Our profits have doubled within two years from RM41mil in financial year 2010 to RM85.8mil in 2012," he said.

He said new sales "have been encouragingly strong, reflecting the healthy demand for the projects we bring to market".

Glomac's total sales of RM663mil in FY12 was higher than its internal target of RM500mil, driven by its prime mixed developments such as Glomac Damansara and Glomac Centro, as well as steady sales from its townships, Bandar Saujana Utama and Saujana Rawang.

By The Star

Dijaya unit to buy land in Johor Baru

KUALA LUMPUR: Dijaya Corp Bhd’s 80 per cent owned unit, Aliran Peluang Sdn Bhd, has entered into a sale and purchase agreement with Chua Joo Cheng @ Chua Su Yin to acquire 23 hectares in Johor Baru, Johor, for RM105.07 million, or at RM43.80 per sq ft.

In a filing to Bursa Malaysia yesterday, Dijaya said the proposed acquisition ties in with its strategy to acquire sizeable land banks with good development potential, especially in the economic zone of Iskandar Malaysia.

By Business Times

Monday, June 25, 2012

SP Setia sees RM500mil revenue from Penang

Rajoo showing the media a model of Setia V Residences, which is projected to contribute RM150mil in revenue for the company’s 2012 fiscal year

GEORGE TOWN: SP Setia Bhd is projecting its Penang properties would generate about 15% or about RM500mil of the company's 2012 revenue, expected to be about RM4bil.

SP Setia Property (North) general manager Datuk S. Rajoo said that the developer's key contributing projects in Penang included Setia V Residences, Setia Triangle, Pearl Villas and 11 Brook Residences.

The biggest contributor to revenue for the financial year ending Oct 31, 2012 (FY12) would be the Setia V Residences project, comprising 166 units in 43- and 48-storey towers in Kelawei Road.

“This project will generate RM150mil for the company's 2012 fiscal year. We have sold about 20% of the project to Penangites working overseas, locals and foreigners from Medan and China,” he said.

According to Rajoo, the 48-storey block would be the tallest residential tower in Penang and is built to withstand earthquake vibrations of up to 6.8 on the richter scale.

The Setia V Residences units have built-up areas of at least 2,700 sq ft and are priced from RM2.7mil onwards.

“The buyers comprised largely those who have the disposable income to upgrade their lifestyle,” he said.

The RM265mil Setia Triangle is expected to add about RM120mil to the company's FY12 revenue.

“The project, already 50% sold since the soft launch two months ago, comprises 34 units of two, three and four-storey shop-offices with built-up areas of 3,000, 4,500 and 6,000 sq ft, respectively,” he said.

The units are priced between RM1.95mil and RM3.6mil.

“There will also be a residential component comprising a 225-unit condominium, priced between RM575,000 and RM1.2mil,” he said.

The Pearl Villas bungalows and 11 Brook Residences are expected to contribute about RM150mil to the group's 2012 revenue.

“The balance will be generated by the release of bumiputra units from other projects,” he said.

By The Star

Property sector still strong, says MB

The real estate sector in the state has remained resilient despite political and economic uncertainties, said Mentri Besar Datuk Seri Dr Zambry Abdul Kadir.

“In 2011, the state recorded 54,452 property transactions with a combined value of RM9.23bil.

“This marks a 22.6% increase compared to 44,323 property transactions in 2010 totalling RM5.75bil,” Dr Zambry added.

The transactions included residential homes, commercial and industrial properties.

He was speaking to reporters after opening the Malaysia Property Expo 2012 in Ipoh, organised by the Real Estate and Housing Developers Association of Malaysia.

Dr Zambry said the occupancy rate for commercial and office space had also increased to 88.2% last year compared to 86.6% in 2010.

The state government would assist affected developers in dealing with unsold properties amounting to RM26mil.

“We will enlist the help of related government agencies such as the State Economic Development Corporation (SEDC) and Syarikat Prasarana Negara Bhd,” he added.

On another matter, Dr Zambry said issues concerning education especially religious schools, should not be politicised.

He was referring to objections to the building of a religious school in Taman Pegoh Aman in Ipoh.

“The school had obtained the necessary approval from the local authority and was already 80% complete.

“The argument that the school is blocking the view of houses hardly holds water as it only occupies a small portion of a field,” Dr Zambry said.

He also rapped the Opposition for claiming they have the people’s interest at heart.

“But here they are against a project that fulfils the people’s need for better education,” he said.

By The Star

Green townships

Green cause: Wahab (left) and Mohd Jaafar launching the T.R.E.E. programme in Denai Alam.

RESIDENTS of Sime Darby Property’s 10 townships will be seeing more greenery in their surroundings, thanks to the company’s efforts to plant endangered, rare and threatened species in their residential areas.

Spearheaded by the developer’s sustainability quality management (SQM) department, this initiative is aptly called T.R.E.E. or Together in Restoring the Earth’s Environment.

Shah Alam mayor Datuk Mohd Jaafar Mohd Atan launched the T.R.E.E programme at an event attended by nearly 250 residents of Denai Alam.

Also present were Sime Darby Property managing director Datuk Wahab Maskan, Denai Alam Residents’ Association president Datuk Aidi Ismail, Shah Alam City Council (MBSA) heads of departments and community leaders.

Mohd Jaafar, in his speech, lauded Sime Darby Property for embracing sustainability that engaged all segments of society, ranging from members of the community to local authorities.

“We hope other Malaysian corporate citizens, especially developers in Shah Alam, can spearhead more programmes such as the T.R.E.E. programme to help communities, especially children, become more conscious about conserving our natural resources and improving our environment,” he said.

Wahab said: “We are pleased to kick-start our inaugural T.R.E.E. programme in Denai Alam.

“This township is special because it was planned according to the unique “Denai” concept, which is a 4.3km continuous green trail within the township.”

The Sime Darby Property T.R.E.E programme is aligned to the MBSA’s “Trees for Life” programme.

A total of 150 endangered, rare and threatened forest trees were planted by members of the Denai Alam community.

Each tree planted carried the name of the family who planted it, and each family member will be able to see the growth of the tree just like their very own.

At the event, T.R.E.E. Pledges were presented by Wahab to head of property development Zulkifli Tahmali, head of strategic development Salem Kailany and head of commercial asset Emran Ismail, as a show of support and commitment from these townships to undertake the T.R.E.E. programme. It will be replicated in all of Sime Darby Property’s townships.

Tree saplings of hopea odorata were presented by the mayor to Daniel Hilmi and Sabrina Tan, who represented the children of Sime Darby Property employees and Denai Alam residents, respectively.

The presentation is a symbol of the significance of the T.R.E.E. programme to the future generation.

By The Star

Maybank taps Aussie property mart

KUALA LUMPUR: Malayan Banking Bhd (Maybank) is expanding its "Overseas Mortgage Loan Scheme" for purchase of residential properties in Melbourne, Australia to tap into the growing demand of Malaysians investing in Australian properties.

In a statement it said the new scheme will finance completed or off plan residential properties developed in Melbourne by Malaysian and Australian developers in the form of term loan, overdraft or a combination of both.

Maybank deputy president and head of community financial services, Lim Hong Tat, said the right investment property in Melbourne offers great returns and exceptional growth potential.

The Australian market has not suffered a fall in median house prices, he said, adding that in fact it had grown by an average of 9.1 per cent per annum on average for the past 10 years.

"The global financial crisis in 2009 and 2010 saw property prices in markets such as the UK and US fall significantly. However, properties in Australia actually in-creased in value during this period." he said.

Under the scheme, financing will be in ringgit and other key features include competitive interest rate, high margin of financing of up to 75 per cent, flexible repayment and longer loan tenure of up to 30 years or 70 years of age, whichever is earlier.

Currently, Malaysians purchasing properties in Australia obtain financing in Australian dollars and are exposed to foreign currency exchange fluctuations when making monthly loan repayments.

Lim said the new mortgage will benefit Malaysians who are showing increasing interest in buying properties in Australia.

Given that Australia currently offers attractive advantages for property purchase to non-residents, he said Maybank has tied up with reputable international real estate agencies to assist customers, particularly on the country's regulations.

"We anticipate a take-up of RM300 million for this new facility within the next 12 months. It will also help the bank to achieve double-digit growth for our home financing,"said Lim.

Maybank first introduced the Overseas Mortgage Loan Scheme in ringgit in January to finance the purchase of London properties. As at May 2012, the bank approved new loans from this portfolio exceeding RM260 million.

By Business Times

REIT market cap to grow 30% to RM30b this yr

KUALA LUMPUR: Market capitalisation for Real Estate Investment Trust (REIT) in Malaysia is expected to grow by 30% to RM20bil this year from RM15bil last year, an industry player said.

Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng said the increase would come mainly from the listing of IGB Corp Bhd's REIT in the second half of this year.

"The IGB REIT listing is worth between RM3.5bil and RM4.5bil. We are confident the market value could reach RM20bil this year," he told reporters after the opening of the Real Estate Investment Trust Conference 2012 by Housing and Local Government Minister Datuk Seri Chor Chee Heung.

IGB, a general construction and real estate developer, operates through four business segments, namely property development, property investment and management, construction and hotel.

The company's initial investment portfolio on Bursa Malaysia Main Market will comprise eight-storey retail mall called "The Gardens Mall" and its five-storey retail mall "Mid Valley Megamall".

On the industry performance and outlook, Real Estate and Housing Developers' Association Malaysia president Datuk Seri Michael Yam Kong Choy said the industry has been robust in the first half of this year.

Going forward into the second half, he said, the market is expected to moderate awaiting a fresh moving factor.

Organised by the Asian Strategy and Leadership Institute, the REIT Conference 2012 brought together key decision makers, policymakers, sector players, property developers, asset managers, investors and consultants to share experience and forecast outlook and opportunities in the REIT market.

The conference will, among others, discuss new trends and the industry's development.

By Bernama

Malaysian Res Corp up on prime land deal

Malaysian Resources Corp, a property and construction group, climbed 2.2 per cent to RM1.86, bound for its highest close since April 3.

The company may win a deal to develop prime land in Kuala Lumpur, the Business Times reported, citing people it didn’t name.

Malaysian Resources Chief Executive Officer Mohamed Razeek Hussain Maricar couldn’t be reached for comment when phoned at his office today as he was in a meeting.

By Bloomberg

Saturday, June 23, 2012

Glomac sees better times with more projects and bigger landbank in the Klang Valley

An artist impression of landed units that will be built by Glomac in its recently acquired Puchong land.

By next week, right after its analysts and fund managers' briefing on Tuesday, June 26, Glomac Bhd will be making preparations to move to its new headquarters in Damansara opposite Tropicana City Mall in Petaling Jaya. The briefing, held in conjunction with the release of its financial results for its fourth quarter, and the move to its new premises, are in a way, the beginning of a new chapter for the medium-sized developer with market capitalisation of around RM550mil.

The last several years, Glomac has been riding high on a buoyant property market. It is expected to announce strong results again, due very much in part to the multiple projects it has undertaken. Prior to 2009, results were a bit flat. But in the three years starting 2009, the net profit and revenue have been strong.

“We were not doing well because we undertook few projects. Today, we have 10 to 15 on-going projects, which account for our strong balance sheet,” says Group managing director and chief executive officer Datuk FD Iskandar.

FD Iskandar: ‘Today, there is a huge appetite for landed housing and we are going to provide this.’

In and around Petaling Jaya, Glomac has some pretty interesting projects. In February of this year, it launched high-rise apartments, Reflection Residences in Mutiara Damansara, which is expected to be completed at the end of 2015 starting from RM800 per sq ft. There are few units left.

It is also developing Glomac Centro in Bandar Utama, another serviced apartment from 1,175 sq ft to 1,162 sq ft with two-storey shop offices between RM700 and RM800 per sq ft.

Its third commercial project in Petaling Jaya is Damansara Residences project opposite Tropicana City Mall where its new headquarters is located. It is currently developing the fourth of a six-phased project here.

The interesting part about all three of these projects is connectivity. They will have a My Rapid Transit (MRT) station several hundred metres away, a fact that FD Iskandar is very pleased about.

Its Damansara project started out with a gross development value (GDV) of RM500mil. Today, it has nearly doubled to about RM900mil for a seven-acre site.

“Our (projects') GDV has gone up from RM3bil to RM7bil in a matter of a few years. Which brings me to this point: You can have 10,000 acres but what is important is WHERE is your land bank?”

Besides these projects, which comprise mainly serviced apartments with commercial retail element, the company will be moving into township development.

In the last 18 months, Glomac has bought three pieces of land, each about 200 acres, in Sungai Buloh, Puchong and Dengkil, Sepang.

“Landed housing is what the people want today. Two years ago, the hottest thing in the property market was commercial properties. Last year, it was three to five-storey houses. Today, there is a huge appetite for landed housing and we are going to provide this,” he says.

As for condominium developments, this will be popular in specific locations, and this can be seen in the demand for high-rise residential living in Petaling Jaya.

“Landed housing, however, is always popular. Because of that, the three pieces of land we bought will focus on landed properties and part of it, commercial projects.”

The company extended further its project in Bukit Saujana by another 240 acres, having paid RM45mil for it. Bukit Saujana is about 1,000 acres now.

It recently completed its sale and purchase for 200 acres in Puchong for RM77mil. The land is near Tesco Puchong and there are plans to have rail transport, either the LRT or MRT, about 200 metres from the site.

“In that respect, there will be good access and connectivity which will increase the value of our Puchong site. Also, this location is in Puchong proper and not far away in the peripheral of Puchong. So that makes the development noteworthy,” says FD Iskandar.

The third piece of land in Dengkil, Sepang, about 3km from Cyberjaya and 4.5km from the K L International Airport, was acquired for RM67mil. “The Sepang parcel, of about 191 acres, will be our project for the future,” says FD Iskandar.

At the same time, Glomac is keen to replenish its land bank in the Klang Valley.

On whether it is on a land buying spree, he says: “I won't call it that. We have been developing properties for the last 24 years. We have to replenish land banks.

“Why sit on cash? We have about RM350mil in cash and we must replenish. We saw our opportunities the last 12 months. Land prices are going up too high. Owners thought their land was gold, especially early this year.

“There has been tightening in lending, which we have taken note of. But the domestic economy has been good though the situation in Europe has not been addressed.”

FD Iskandar says the company is taking cognizance of these factors but it has also to consider the cash pile it is sitting on, and the gearing, which at 0.1 times can be increased to 0.5 times.

The company has seen tremendous growth in the last three years and FD Iskandar attributes this to the multiple projects the company has embarked on. Prior to this, the company had few projects.

Today, it is simultaneously developing more than 10 projects of different sizes.

Its unbilled sales have been hovering around RM300mil since 2000 and presently it is about RM700mil and still climbing.

“Unbilled sales will turn to revenue next year,” he says.

On its focus to purchase more land in the Klang Valley and not move in the same directio of other developers who have ventured into Penang and Iskandar Malaysia, FD Iskandar says the company is familiar with Klang Valley.

“We are aware of the pockets of growth in Penang and in the south in Iskandar, but 67% of the RM107bil residential sales for the whole of Malaysia last year are from within the Klang Valley. This is where the action is. This is the first point of entry.”

On his outlook for the rest of the year, FD Iskandar expects the property market to remain stable.

“There will be growth but the increase will not be as fast as in 2010 when Klang Valley property prices went up 20% to 30% .

“Prices rose last year too, but not as much as in 2010. It is expected to continue to grow this year,” he says.

By The Star

MRCB to develop prime Bangsar land?

Malaysian Resources Corp Bhd has emerged as the frontrunner to develop a prime 8.09-ha site on Jalan Bangsar in Kuala Lumpur where the Unilever headquarters and factory once sat.

Sources said MRCB is close to inking a deal with landowner Pelaburan Hartanah Bhd (PHB).

They added that MRCB plans to build several office towers, a
serviced apartment-cum-hotel, a retail mall and boutique outlets on the plot.

The project is expected to rake in more than RM5 billion in gross
development value (GDV), they said.

“It will be an extension of the KL Sentral development in Brickfields, and may be linked to the Bangsar LRT station,” said a source.

MRCB is the developer of KL Sentral, an integrated transport hub with GDV of over RM10 billion. The project is slated to complete in 2016.

The sources said MRCB is fine-tuning its masterplan for the project and expects to submit to the relevant authorities soon.

It is still unclear if MRCB will acquire the land outright or develop it in a joint venture with PHB.

“PHB may give the land to MRCB in exchange for properties in the development and cash. It may also develop the land jointly with MRCB,” said the source.

Business Times had reported early this month that PHB was studying a few proposals it had received to develop the area.

PHB had pre-qualified more than five property developers last year, to submit their proposed masterplan for the land development, before shortlisting the list to three.

The three are MRCB, SP Setia Bhd and Mah Sing Group Bhd.

Formerly a well-known landmark housing Lever Brothers’ soap and margarine factory, the land has been left unoccupied since Unilever Malaysia moved out in 2003.

The land used to belong to Railway Asset Corp (RAC) but came under the ownership of PHB in early 2011. PHB bought the land from RAC at about RM150 per sq ft two years ago.

PHB is a subsidiary of Yayasan Amanah Hartanah Bumiputera, created under Budget 2006 with an initial capital of RM2 billion, to promote Bumiputera ownership of prime real estate.

According to Zerin Properties chief executive officer Previndran Singhe, the land, if it has been converted to commercial use, could fetch about RM600 psf, given its frontage to the busy Jalan Bangsar.

"If it has not been converted to commercial use, then I reckon it could be worth RM400 psf to RM450 psf," he told Business Times.

As a perspective, SP Setia had paid under RM400 per sq ft for a 10.1ha land on the former Kampung Haji Abdullah Hukum site along Jalan Bangsar, not too far from the former Unilever headquarters.

It is developing KL Eco City, with a projected GDV of RM6 billion on the site.

The land is said to be currently worth around RM600 per sq ft, given that several phases of the project have been launched.

By Business Times

Penangites go for leasehold projects

Kamarudzaman, with an artist impression of Darra, says that UDA’s Brezza comdominiums, located where Darra is going to be built, was sold out in a year.

UDA Land (North) Sdn Bhd plans to launch a RM650mil condominium project on a leasehold site in Tanjung Tokong in the first quarter of next year in view of the strong demand for high-rise residence in prime locations and the changed perception towards leasehold properties among Penangites.

UDA Land chief operating officer Kamarudzaman Mohd Zain says in an interview that the project, Darra, located by the sea will comprise condominiums with built-up areas ranging between 1,400 sq ft and 1,800 sq ft and are priced above RM800,000.

“The layout plan is in the final stages of approval. The project is expected to be launched in the first quarter of 2013,” he says.

Kamarudzaman says that with the right pricing residential properties located in prime locations are still selling very well.

“For example, Brezza, comprising 312 condominium units of between 1,250 sq ft and 1,450 sq ft in the same location as Darra, was sold out in a year to mainly local buyers.

“The selling price in the sub-sales market for Brezza units has appreciated to about RM700,000 from the initial pricing of between RM350,000 and RM500,000 per unit in late 2010,” he says.

The demand for commercial properties in the right location is still strong, despite a slowing economy with an anticipated GDP of 4.6%, compared to over 5% in 2011.

The Vantage Desiran Tanjung, comprising a four-story business centre with 120 units of shop office, although 80% completed, is already 100% sold. The price for a standard ground floor unit is around RM1.2mil. The units on the higher floors are priced lower.

“The RM87mil Vantage Desiran Tanjung sold well because of its broadband facilities, ample car park bays. The project's proximity to a hospital, international hotels, botanical gardens, and renowned project Straits Quay mall in Tanjung Tokong were plus points,” he says.

Registered and chartered valuer C.A. Lim & Co proprietor Lim Chien Aun says the value of properties on leasehold land in the island has appreciated substantially. This shows that Penangites, who have always been reluctant to invest in leasehold properties, have changed.

“Leasehold properties in prime locations are now appreciating faster than freehold properties in a non-prime location. Actually, the leaseholds in neighbouring countries have appreciated very well. For example, the land in Hong Kong island is leasehold and yet the value of properties on the island is among the highest in Asia.

“A lot of the land in central London, for example, is leasehold too, but the value of property is very high,” he says.

Raine & Horne Malaysia director Micahel Geh says Penangites now give more importance to the location of the property rather than to the status of the land on which it sits.

“They are now looking for conveniences and amenities like easy access to shopping malls, food and beverage outlets, banks, cinemas, and hospitals.

“Some of the leasehold projects on prime locations in the island have been appreciating at over 10% per annum over the past two years,” he adds.

In Seberang Prai, UDA Land plans to launch a RM33mil four-storey commercial mall come end of 2012, known as TPJ Business Park, in Jalan Baru, a prime location.

“The mall will have about 8,500 sq m of gross built-up area that can accommodate 76 commercial lots of 1,160 sq ft and 2,100 sq ft. We are planning more commercial projects on our remaining land bank of about 20 acres. These commercial schemes are to support the needs of the residential community in Seberang Prai,” he says.

Kamarudzaman says UDA Land also plans to submit the building plan for the RM98mil Serambi project soon to the local authorities.

The project, which is on a 16-acre site, comprises three-storey semi-detached, terrace, and bungalow units. “The plan for the project has received the green-light,” he adds.

He says UDA Land will launch the RM22mil Arcaria project early next year. It comprises 26 units of three-story semi-detached, three-story super-linked, and bungalows.

The terrace units will be priced from RM725,000 onwards, a semi-detached for about RM900,000, and bungalow units from RM1.4mil.

Meanwhile, Fook Tone Huat of Henry Butcher Seberang Prai says property prices in central Seberang Prai have appreciated by about 20% since 2010.

“In prime locations of Seberang Prai, a semi-detached house is priced at about RM750,000. A terrace house in similar locations is now priced at about RM280,000, compared with about RM350,000 two years ago. Similarly, a bungalow has a price tag of RM1mil now, about 20% more than two years ago,” he says.

The value of commercial properties in Seberang Prai has also appreciated by about 20% from 2010, Fook adds.

“A three-storey shop lot in a business park in Bukit Mertajam is now priced at RM700,000, approximately 20% more than in 2010. People are buying properties on the mainland for investment, as the second bridge is scheduled to be completed soon. More funds are coming into the industrial park south of Seberang Prai,” he says.

By The Star

Developers: Consumers don’t want low-cost homes

PETALING JAYA: While house buyers are seeking more affordable homes, developers do not want to be bound into building low- and medium-cost homes.

In its memorandum to the Finance Ministry, Real Estate and Housing Developers Association (Rehda) said it wanted to develop affordable homes in line with the increased household income instead of being compelled to build low- and low-medium cost units, which it said consumers did not want.

“Unoccupied and excess low-cost units are a waste of resources. They are cross-subsidised by both developers, through lower profit, and lower tax collected by the Government and buyers of non-low cost units, in additional tax,” said Rehda president Datuk Seri Michael Yam.

“They are either vacant or abused by being rented to foreigners. The hardcore poor group, which is falling in numbers, can be housed in the government-built social housing (PPR).”

He said Rehda had also proposed a lower stamp duty, with buyers of cheaper units paying less.

“The ceiling for higher priced units should be lifted as inflation and higher costs have increased the prices of even affordable homes,” he said, adding that more incentives were needed to encourage faster adoption of the Green agenda.

Yam said Rehda had also suggested an auto release mechanism for Bumiputra units, which were not sold after a certain period.

“Penalties should not be imposed for such releases as it is caused by low demand,” he said.

National Housebuyers Associa-tion (HBA) secretary-general Chang Kim Loong said the organisation had not submitted a memorandum for the upcoming Budget as its previous request for the enforcement of the “build-and-sell” system had yet to become a reality.

“Although Sharia-compliant housing using the BTS system was announced in Budget 2012, it is yet to be implemented,” he said.

It was reported that the ministry had approached HBA early this month for recommendations on how to reduce the price of homes.

Among its 10 recommendations, HBA urged the Government to unlock its land banks in various locations and give priority to affordable housing projects instead of high-end properties.

By The Star

Realising a dream city

Looking ahead: (From right) Saifuddin Ahmad from PAM, Tong, Norliza and C.M Chan from Rehda showing pamphlets on the conference.

AN INTERNATIONAL conference on sustainable cities will be held in Kuala Lumpur on Sept 25 and city dwellers and other stakeholders are invited to take part.

The World Class Sustainable Cities 2012 (WCSC 2012) conference is appropriately themed ‘Cities for the People’.

It will be held at the JW Marriot Hotel Kuala Lumpur, with some 500 participants expected to attend.

It is being co-organised by the Real Estate & Housing Developers Association Wilayah Persekutuan Kuala Lumpur branch (RehdaKL) , the Malaysian Institute of Planners (MPI) and the Malaysian Institute of Architects (PAM). The conference is endorsed by Kuala Lumpur City Hall.

N.K. Tong, the co-organising conference chairman for RehdaKL, said the conference hopes to connect with people that matter.

“This conference is unique because it brings together all the city’s stakeholders,” he said.

Tong noted that while WCSC’s past conferences had focused on various topics, including the transformation of Cheongyecheon River in Seoul, South Korea, the city transportation solutions for Curitiba, Brazil, and the metamorphosis of Kaohsiung, Taiwan, from an industrial polluter to an ecological tourist hub, this year’s WCSC 2012 will focus on people as the theme suggests.

Norliza Hashim, the co-organising chairman for MIP also said:

“It will be exciting to see the outcome of this year’s conference on KL city’s development.

“In previous years, our conference speakers have had an influential impact in shifting public perception to the Kuala Lumpur projects that followed. The Cheongyecheon River restoration was a great prelude to our KL River of Life project, and the Curitiba experience, in transforming our city’s MRT and covered walkway systems.”

This year’s conference will feature two world-class speakers from two cities globally renowned for their livability and transformation — Copenhagen, Denmark and Bilbao, Spain.

Award-winning Danish architect Dr Jan Gehi, of Gehi Architects, will share his rich experience on his work in transforming cities such as New York, London, Melbourne, Perth, Adelaide, Sydney, Auckland and Christchurch.

Another world renowned architect, Alfonso Vegara of Fundacion Metropoli, will present a paper titled ‘Bilbao Next — Regenerating Cities’, illustrating the transformative work that the city of Bilbao has undertaken to bring it to its enviable status among global cities today.

“In line with the conference theme focusing on people, the two key speakers will help refocus our attention on creating streetcapes friendly to people living in urbanised areas,” added Norliza. “In the pursuit for a world-class city, we may sometimes forget about the basic needs of its citizens. In many cities today, people compete with vehicles; roads are too wide for people to cross, communities are divided by one-way traffic flows; public open spaces and green spaces where communities can meet and interact freely are few and scarce; access to affordable housing, clean water and cheap food become increasingly challenged,” she noted.

In conjunction with the conference, a photography competition and essay competition entitled “Cities for People” was launched at the press conference.

Attractive cash prizes will be given out to winners and their photographs would be featured during WCSC 2012, whereas the essays would be compiled in a book.

By The Star

Friday, June 22, 2012

SP Setia looks across the channel

PROPERTY developer SP Setia Bhd wants to expand its landbank across the Penang channel to leverage on the Second Penang Bridge.

SP Setia property division (north) general manager Datuk S. Rajoo yesterday said Batu Kawan is the preferred site to establish the company's footprint in Seberang Prai.

SP Setia's presence in the northern region is currently on Penang island.

"We are anticipating a population growth on the mainland once the second crossing is completed and think it would be prudent to establish a landbank there."

He spoke to reporters on the sidelines of the three-day "SP Setia Setia 4U Showcase" which is part of the firm's roadshow to showcase a selection of its products locally and overseas.

The Second Penang Bridge, linking Batu Kawan on the mainland and Batu Maung on the island, has been touted to emerge the longest bridge in Southeast Asia with a total length over water of 16.9km upon completion by September 2013.

Along with SP Setia, other Penang-based property developers like Tambun Indah Land and Asas Dunia, which are sitting on sizeable landbanks, are anticipating higher sales from the opening of the new bridge.

On Penang island where SP Setia continues to expand its landbank, especially in prime locations, Rajoo said the company has seen a 20 per cent take-up rate for 166 of its upscale "Setia V Residences" condominiums along the sea-fronting Gurney Drive.

The project, which boasts a dual frontage of the promenade and Jalan Kelawai in Pulau Tikus, is sprawled over a 0.9ha piece of land and comprises a 48-storey and a 43-storey towers respectively.

Dubbed as "bungalows in the sky", each unit comes with a dipping pool and a host of other luxurious amenities in what the developer has termed the tallest residential development in Penang. Its smallest unit will measure 2,700 per sq ft.

"Two heritage houses in the grounds of the project site will be incorporated into the development," Rajoo noted, adding that investors for the property, which is tagged from RM2.7 million onwards, include locals, Singaporeans, European, Indonesians and Chinese nationals.

He said the project with a development value of RM550 million, will take 48 months to complete (by 2016) owing to its earthquake-resistant design.

"Investors only need to pay the downpayment now for their units and the rest will be upon completion of the project," he added.

Rajoo said "Setia V Residences" is expected to contribute between 20 per cent and 30 per cent to SP Setia's targeted RM500 million revenue for the group's 2012 fiscal year ending October 31.

"Other big ticket contributors to our projected sales for Penang this year will include projects like Setia Triangle, Pearl Villas and 11 bungalow units of Brook Residences which were snapped up before we could even launch the projects," he added.

Rajoo said that SP Setia will be launching affordable homes on Penang island in locations such as Balik Pulau.

By Business Times