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Saturday, September 29, 2012

RM1.5b Sky Park project will enhance city's appeal

CYBERJAYA: Cyberview Sdn Bhd managing director Hafidz Hashim believes the RM1.5 billion Sky Park project in Cyberjaya will further enhance the progress and growth of the intelligent city.

"Cyberjaya has the right scale and mass and most importantly the proven track record in helping companies to grow and prosper. That is ultimately what we believe matters to property developers when choosing Cyberjaya for their next project," he said.

Cyberjaya has been identified as a pioneer green city by the government and its development aims to reflect that.

"We are aspired to develop Cyberjaya as a green model city and are working closely with private developers to create a low carbon city. We believe this is an added incentive for home buyers and business operators who want to live and work in a clean environment," Hafidz told Business Times in an interview.

Some 16 major developers are expected to invest up to RM20 billion in Cyberjaya over the next five years.

They include SP Setia Bhd, Mah Sing Group Bhd, Nadayu Bhd, UEM Land Holdings Bhd, Glomac Bhd, OSK Property Bhd and MCT Consortium.

The Sky Park project is being developed by MCT Consortium and consists of six towers of between 12 and 42 storeys.

The project will have an office tower, strata office, a 390-room business hotel, serviced apartments, studio small-office-flexible-office (SOFO) and duplex SOFO.

MCT managing director Danny Goh said the development has many unique features, one of which is the roof-top podium featuring sophisticated ambience with choices of stylish brands.

Five of the blocks (excluding the serviced apartments) will be linked by a spacious, elongated sky park on the roof top, reflecting the fine hallmark of the Sky Park project.

Goh said the SOFO units are also uniquely brilliant-built art of work and play, surrounded with elegant, contemporary designs.

By Business Times

Berjaya lands good hotel deal in Japan

An artist’s impression of Four Seasons Hotel Kyoto.

It is a rainy day in Kyoto, Japan, when executives from Berjaya Land Bhd (BLand) bring a group of Malaysian journalists to see for ourselves the site where the first luxury hotel in the city the Four Seasons Hotel Kyoto will be built.

The rain does nothing to dampen our spirits as we stand on the 5-acre site in historical Higashiyama-ku, situated among beautiful and serene surroundings and the great heritage sites of Kyoto, a city which was once the imperial capital of Japan.

Discussions for this project took more than two years and has finally borne fruit, Tan Sri Vincent Tan, the founder of Berjaya Corp Bhd, the parent company of BLand, tells us.

“Armed with little more than a vision and a conviction to succeed, we approached the city of Kyoto to work together, not merely to build a hotel but to be given a chance to craft an experience like no other in the world,” he says later in a speech at a ceremony to mark the collaboration between BLand and Four Seasons.

BLand's move into Kyoto marks its foray into Japan after two other projects in North Asia in Jeju, South Korea, and Beijing, China.

The company purchased the 5-acre site from the Takeda family, a prominent family of doctors who owns several hospitals and elder care facilities across Kyoto.

The site, which itself used to house a hospital, will cost BLand US$320mil or close to RM1bil to be developed into a luxury hotel with 186 rooms.

The figure includes the acquisition price of the land.

While the exact financing structure has yet to be determined, RHB Bank Bhd is the principal financier and the entire project is expected to be funded by a combination of equity, internal funds as well as bank borrowings.

Return of investment is estimated to be between 5% and 10% and is expected to come “pretty fast”, given that Kyoto gets some 50 million visitors per year, making it the most visited city in Japan, according to Tan.

Construction will start next March and the hotel will officially open its doors to guests in early 2015.

“The hardest part of the project, which is securing approval from the city, is over. With financing in place, we do not foresee major challenges during the construction period,” BLand executive director Leong Wy Joon says.

Kyoto is strict with its building guidelines, given that many sites in the city enjoy a Unesco World Heritage status. Hence the process to obtain the relevant permits took some time, says Leong. Understandably, Leong is excited about this project.

Kyoto, according to him, has a huge pent-up demand for luxury accommodation. It currently only has two international brands the Hyatt and Westin. A Ritz-Carlton will be ready next year.

“We are not worried about demand at all. Demand should come from both business and leisure travellers,” Leong says.

As a luxury hotel positioned also as an “urban resort”, Four Season's room rates will start from 55,000 yen (RM2,200), compared with Kyoto's current average hotel rates of between 28,000 yen and 35,000 yen per night.

The Four Seasons Hotel Kyoto will be BLand's signature and flagship development in Japan.

For this reason, BLand is pulling out all the stops to build a hotel which Tan says “will be one of the most iconic in the world on completion”.

The property itself will have an estimated built-up area of 8,106 sq m with four floors and three basement floors. It will be built with a combination of modern styles and traditional Japanese design.

In other words, expect the hotel to be infused with traditional Japanese arts and crafts, says Leong.

“Age-old traditions will go hand-in-hand with modern luxuries and it will have the understated elegance of a traditional ryokan,” he enthuses.

He points out that among the special facilities, the hotel will have a specially dedicated hall for wedding ceremony.

Other facilities include a banquet hall, main and fine dining areas, fitness gym, pool, spa and shops. An existing pond is expected to be one of the hotel's main attractions, once it is further beautified.

In terms of location, the hotel will be quite ideally located, being less than 2km away from the Kyoto train station, which is the main entry point into Kyoto as well as being the main stop for all the bullet trains going into the city.

“It's an excellent piece of land. We were quick in deciding that we wanted it ... and acted quick as well,” Leong says.

When it is completed, the Four Seasons Hotel Kyoto will be close to tourist sites such as the Myohoin, Sanjyu Sangendo and Kyoto National Museum as well as to various cultural locations such as Gion, the neighbourhood of the famed geishas.

By The Star

Investors may shift to stocks with rise in RPGT

The planned rise in the Real Property Gains Tax (RPGT) to curb speculative activities on properties and avoid a property bubble could return investors to the stock market, say analysts.

Under the 2013 Budget, the government has proposed a review of the RPGT. Effective January 1 2013, RPGT will be imposed on profits for the disposal of properties within two years of buying at 15 per cent, and 10 per cent for those sold in the third to fifth year.

The idea of raising the RPGT is to discourage people from buying and selling houses for quick profit. RPGT is also another government's source of revenue.

Properties held longer than five years are not subject to RPGT. Also, disposals of properties between husband and wife, parents and children, grandparents and grandchildren are exempted from RPGT.

"I don't think the move to increase RPGT rate would dampen the market. In absolute terms, it is not large enough to discourage people from speculating in properties," said OSK Investment equity capital market head Gan Kim Khoon.

"However, we believe property investors will put off buying houses for a while and invest in the stock market as the property market has softened," Gan told Business Times.

Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum said the rise in RPGT rate was within expectation and it will have less physical impact on developers as the construction period for new projects usually takes two to three years.

Leong also lauded the government's efforts in increasing housing affordability and reducing the cost of property ownership.

"There is strong demand for serviced apartments from 500 square feet and landed properties below RM1 million. The 50 per cent stamp duty exemption for first-time purchase of homes under RM400,000 will help to reduce the cost of purchasing a house by up to RM3,500," he said.

Master Builders Association Malaysia (MBAM) is, however, disappointed with the increase in RPGT rate for properties sold within a period of two years and after three years.

"We feel that the financial measures imposed by Bank Negara Malaysia to curb property market speculation is sufficient as it is," said MBAM president Matthew Tee in a statement.

By Business Times

Perks to attract global players to Tun Razak Exchange

KUALA LUMPUR: The government is offering a 10-year income tax exemption to encourage major international financial institutions make Kuala Lumpur their preferred investment centre.

Prime Minister Datuk Seri Najib Razak said perks for global firms setting up business in the financial hub Tun Razak Exchange (TRX) include income tax exemption for 10 years, stamp duty exemption, industrial building allowance and accelerated capital allowance for TRX Marquee-status companies, and tax exemption for property developers.

The development of TRX, which is expected to attract 250 international financial institutions, is on schedule with the realignment of existing utilities on the TRX site well underway and is expected to be completed next month, Najib said.

Analysts, however, said more can be done to boost the RM26 billion project.

Interpac Securities head of research Pong Teng Siew said this is part of the government's efforts to develop TRX as a global hub for Islamic banking.

"The idea is that if you can attract the big companies into TRX, the talents will follow suit."

However, an analyst said more measures can be introduced to make the project more sustainable.

"At the end of the day, the key for such a project to be a success and sustainable is the people, the talents, the brains.

More measures can be introduced to encourage these people to work here, relocate their family and live here, he added.

"The key is questioning why some foreigners prefer to work in other countries, such as Hong Kong or Singapore, and what can we do to attract them to come here," said another analyst.

By Business Times

Good news for housing sector Industry players, stakeholders to reap benefits

STAKEHOLDERS in the property sector have lauded the housing allocations in Budget 2013.

Raine and Horne Malaysia director Michael Geh said the allocations and incentives struck a good balance between the rakyat’s need for affordable housing and the industry players’ interests.

“The proposed real property gains tax (RPGT) from the disposal of properties (made within a period not exceeding two years from the date of purchase) at the rate of between 10% and 15% won’t negatively impact the property market.

“This shows that the government acknowledges the property industry’s importance in driving the economy by being sensitive to stakeholder input.

“At the same time, the budget addresses the housing needs of the rakyat,” he said.

Geh said the RM1.9bil allocation to build 123,000 affordable housing units by PR1MA, Syarikat Perumahan Nasional Berhad and Jabatan Perumahan Negara should be done fairly in all states.

“It’s good that affordable housing is a priority but I hope the allocation to build the homes is fairly distributed nationwide,” he said.

He also lauded the 50% stamp duty exemption on the instrument of transfer agreements and loan agreements for the purchase of the first residential property of up to RM350,000.

He said the RM100mil allocation to the Ministry of Housing and Local Government to revive abandoned housing projects coupled with tax incentives to encourage the involvement of the private sector was a positive move for the industry.

Penang Master Builders & Building Materials Dealers Association president Lim Kai Seng agreed.

He, however, urged the Government to ensure that the Budget was “effectively implemented”.

“The implementation is very important to ensure that the incentives and allocations are channelled properly.

“Otherwise, we will not see results no matter how good Budget 2013 is,” he said.

By The Star

UK remains the main destination

INVESTMENTS from Malaysia's private and government-linked organisations into prime Central London since 2009 have exceeded £3.5bil, according to syariah-compliant Gatehouse Bank plc.

This is consistent with the £3bil figure brought up by a few property consultants based in London the past two weeks.

“We expect overall purchases to increase (from Malaysia). The EPF (Employees Provident Fund) is looking for diversification and that is a successful strategy.

“The next question is: Do you want to keep it in British pounds or do you want to bring it back?” Gatehouse Bank chief executive officer Richard Thomas says during a trip to Kuala Lumpur for the Global Islamic Finance Forum last week.

The latest completed purchase is by Lembaga Tabung Haji, which bought 10, Queen Street Place for £165mil from Jaguar Capital. The property has an annual yield of 5%.

The deal was completed in the middle of September via Gatehouse Bank and Savills. The 221,200-sq-ft block is tenanted to international law firm S.J. Berwin. The lease expires in December 2025.

The other two deals which are pending are 5 Aldermanbury Square and 10 Gresham Street, both in London, worth £425mil, which are being considered by Kumpulan Wang Persaraan (KWAP).

KWAP has set up a wholly-owned subsidiary office, Prima Ekuiti (UK) Ltd, in Mayfair as part of its strategy to diversify its equity portfolio abroad, with Britain among its key target markets, KWAP chief executive officer Datuk Azian Mohd Noh tells Bernama.

The Malaysian private investment firm was set up with RM985.2mil (about £200mil) geared for equity investment there.

Since the financial crisis erupted in 2008, both private and institutional investors from around the world have been flocking into London to buy prime Central London assets.

EPF, Lembaga Tabung Haji and Permodalan Nasional Bhd (PNB) have been the largest investors in that city from Malaysia to-date. EPF has invested up to £1bil in seven properties since 2010 although what is listed (see table) today is only six.

An EPF spokesperson declined to give details of its seventh purchase. Separately, EPF chief executive officer Tan Sri Azlan Zainol says the fund may invest a further £400mil to £500mil in the next two years, thus expanding the kitty for the British property market.

Gatehouse Bank says in a July report that in the first quarter of this year alone, about £1bil from sovereign wealth and overseas pension funds from around the world have bought into that market. Coming a far behind is opportunity and private equity funds, which have invested up to £200mil in the first quarter.

PROPERTY JEWEL: The Whitefriars at 65, Fleet Street, London, which costs EPF £148mil, has a yield of 5.8%.

At the same time, the greatest sellers have been pension, life and insurance funds as well as open and closed-ended funds, the report says.

As the eurozone is expected to face greater challenges in the next 18 months, there is a possibility that more funds will be entering London.

Says BNP Paribas Real Estate chief executive office John Slade: “If the euro were to collapse, it will have an effect on the London property market. London will be as attractive, probably more so because whatever recession issues (we have) do pale in comparison. But, having said that, European politicians will not allow the euro to collapse. They will stumble through.”

Slade says if the eurozone is to stabilise, far eastern Asian funds may go into Europe, as some already has, such as from South Korea. “You will get better yields (there) but that is because it is very risky,” he says.

A source says EPF is planning to expand its diversification by buying into multi-asset portfolio which comprises 10 to 12 assets that is sold as a single entity. An EPF spokesperson declines comment, adding that “it is the EPF's policy not to comment on matters which are still at the planning stage.”

PROPERTY JEWEL: St James Square, which was acquired by EPF for £147.5mil, offers 5.4% yield.

The strategy may be similar to its Goodman Group purchase in Australia where it has teamed up with Australian integrated property company Goodman Group to seek logistics asset investment opportunities.

The initial investment in that venture totals about A$400mil (RM1.25bil) and comprises six stablised logistics assets.

“If it were to go into a multi-asset purchase, this type of asset portfolio may call for greater management,” Thomas says.

EPF's current portfolio of assets, which comprises office buildings, have yields of 5% to 5.8%. Its first industrial purchase outside Central London is a Sainsbury's distribution centre in Dartford, Kent, which it acquired for £80mil from a fund managed by Tristan Capital Partners and AEW Europe. The property offers an annual yield of 6%.

London is competing with other European cities to attract money, with one of the closest competitor being Paris.

PROPERTY JEWEL: Aldermanbury Square, which is pending acquisition by KWAP for £225mil, has a yield of 5.3%.

Thomas says it is only in London that one is able to have long leases of between 10 and 25 years. French leases are generally short between three and nine years while Germany has a complicated tax structure.

Gatehouse Bank's primary focus in Britain is outside prime Central London, it is active in Leeds, Manchester, Aberdeen and Glassgow because of its emphasis on the syariah-compliant factor. Thomas says the bank has knowledge of London market.

“Prices are lower in the other cities and the quality of rental is equally good. A depressed location does not mean bad property,” he says, adding that it has bought into a 17-year lease at nearly 7% yield. Had it been in London, the property would have generated a 4% yield.

He says central London offers long-term secured value for the pension fund.

“It does not matter if you get a 4% to 5% yield if you have a prime location. The character of the transation is extremely important.

Thomas: ‘A depressed location does not mean bad property.’

“If you are careful, you buy into a low-rent asset and hope that when the property upturn comes around, you get to increase the rent and the value of the asset increases with it. That is the objective of long-term investors in London today,” Thomas says.

Jones Lang LaSalle director (city investment) Andrew Hawkins says in an e-mail that over the last three years, Asian funds have dramatically increased its spending in London offices.

He says that across Central London, the proportion of offices sold to Asian buyers has increased from 6% in 2010 to 16% in 2011 and 17% in the first quarter 2012.

Says Hawkins: “In the city, this is far more pronounced. Respective proportions have increased from 4% to 24% to 31% on an annualised basis and within this pool of investment capital, Malaysian money has been particularly active.

“The EPF alone has purchased just under £800mil of London office stock, from Paddington through to the City. More recently, PNB has acquired £865mil in just three assets, two of which were traded in the opening months of 2012.

“Looking forward, we can expect far more activity in the UK commercial and residential markets from Asian capital including Malaysia. Asian capital is focused more on the City as lot sizes are more palatable and the availability of stock, level of income yield and income is more appropriate,” he says.

Differentiating the Asian investors, Hawkins says South Korean and Malaysian institutional investors tend to be more income-driven while those from Japan, Singapore and Hong Kong tend to be more willing to embrace activity management (as oppposed to buying just a building for its yield).

In a July report, BNP Paribas Real Estate says that since the start of the year, 85% of investment into the City came from overseas investors.

Cruickshank: ‘Investments are coming from a range of countries and regions.’

The report also says that 71% of investment into the overall Central London market came from overseas investors, with North America, Middle East and Germany proving to be the most active regions. In addition, 61% of investments into the West End market has come from overseas the top investors are from North America, Germany and other European locations.

BNP Paribas Real Estate senior director for international investment Andrew Cruickshank says that this year alone, more than £6bil has been invested into Central London offices.

He says that over the decades, specific countries have been dominating the London investment market, “but this has now changed, with investment coming from a range of countries and regions, especially those with growing middle classes or a large amount of high net-worth individuals.”

He says pension and sovereign funds generally buy into commercial real estate with long leases as these leases cannot be broken. As rents generally only rise, yields will further benefit.

On cities on mainland Europe like Paris and Berlin, which have generated much interest, he says European cities generally do not offer the long leases which generally characterise the London market.

Cruickshank says that over the next 18 months, the eurozone will remain too risky to invest in.

“Some Malaysian investors have already shelved European aspirations. Some opportunity funds have been eyeing the Italian and Spanish markets but it is probably nine to 12 months too early.

“Bargains may exist but only if the assets can be let, and the occupational market in Europe remains uncertain. Looking further ahead, London will remain the favoured location for investment in Europe. However, some investors will look to create a balanced portfolio across Europe.”

By The Star

Friday, September 28, 2012

Emkay plans Cyberjaya affordable housing project

PROPERTY developer Emkay Group expects to launch an affordable housing project in Cyberjaya by the second quarter of next year in an effort to enhance the middle-income group's accessibility to their own house.

"This is an ongoing effort by us in providing affordable housing to the people, in line with the government's desire to see more of the middle income group owning homes," said chairman Tan Sri Mustapha Kamal Abu Bakar.

He said although the project is still in the planning stage, the company expects it to include the development of about 3,000 units of medium cost houses with a selling price of below RM200,000 a unit.

Speaking to reporters after the launch of the Star Central @Cyberjaya project here yesterday, he said the affordable housing project will be part of the group's plan to transform Cyberjaya as Malaysia Silicon Valley in 2020.

Also present was Emkay chief executive Ahmad Khalif Mustapha Kamal.

The Star Central @Cyberjaya project, developed by its subsidiary, Joyful Star Sdn Bhd is a mixed-development project comprising 859,118 sq ft of office space, 814 units of shops and 1,900 residential units with a gross development value (GDV) RM1.8 million.

The construction is scheduled to start next month and is expected to be completed in five years. It will be developed in four phases, Mustapha Kamal said.

"So far, the project recorded a sales value of RM122 million, involving various types of development," he said.

Among the development in the Star Central @ Cyberjaya project are an eight-storey semi-detached office tower units with a GDV of RM420 million, two 25-storey residential studio and office (SOHO) towers (GDV of RM319.4 million), 10-storey shop office (GDV of RM80.8 million), six-storey hypermarket (GDV of RM277.7 million), 48-storey serviced apartments (GDV of RM453.9 million) and a 41-storey hotel (GDV of RM332.2 million).

The company will utilise the Industrialised Building System in order to reduce construction costs, Mustapha Kamal said, without revealing more details about the project.

"We do not want to be too dependent on foreign labour services to build affordable homes in Cyberjaya," he said.

Commenting on the proposed tax incentives for developers who use the IBS and green technology, he said if the government announces it in the Budget 2013 today, the company plans to build more affordable homes in Cyberjaya.

"It is possible (to build more affordable housing) based on Emkay track record so far," he said.

So far, Emkay has already built 22,920 units of affordable housing since 1990 with a GDV of RM1.37 billion. From the total, 11,118 units are located in Damansara Damai, Petaling Jaya and 11,794 units in Taman Bunga Raya, Bukit Beruntung.

By Business Times

Pasdec sets RM18m property sales aim

KUANTAN: Pasdec Holdings Bhd is targeting RM18 million in property sales during its three-day sales carnival, which starts today.

The sales carnival at the East Coast Mall is held in conjunction with the group's month-long promotional campaign.

Its chief executive officer Datuk Mohd Khairuddin Abdul Manan said the carnival is a yearly event to promote the group's housing and commercial properties.

"The main focus is to strengthen the brand and increase awareness on our special offers."

The promotional period runs until October 27.

"The theme of this year's carnival is 'Go Nature', which is centred on the concept of healthy and safe living as well as taking care of the environment."

Citing an example, Khairuddin said the Pasdec project in Bandar Putra, Tanjung Lumpur, here, boasts of exclusive features that combine the elements of safety, tranquillity and green environment.

Pasdec sales and marketing manager Saniyah Mohamed said during the carnival, its bank partners will offer attractive interest rates for home loans.

She said among the new projects to be launched today are two residential areas, namely Pasdec Pesona at Paya Tiga Bukit Setongkol and Vista Verde at Batu 6, Jalan Gambang.

Pasdec Pesona, strategically located between Bukit Setongkol and Indera Mahkota, comprises 158 units of double-storey terrace and double-storey semi-detached houses.

She said a special discount of up to RM9,000 will be offered during the promotional period.

On Vista Verde, Saniyah said the free-hold units are located near Sultan Ahmad Shah Islamic College in Pahang while the designs are suitable for the modern families and "yuppies".

She said Pasdec will work with the Kuantan Municipal Council, the Department of Environment Malaysia and the Malaysian Nature Society to raise awareness among schoolchildren on nature.

State Tourism, Arts and Heritage Committee chairman Datuk Shafik Fauzan Sharif is scheduled to launch the carnival.

Various activities will be held, including a blood donation drive, free health checks and a colouring contest for children.

By Business Times

Rehda ready to pitch in

Developers are very much supportive of the government plans to build more affordable housing and are eager to participate in the programme.

Real Estate and Housing Developers' Association (Rehda) deputy president Datuk FD Iskandar said there is a consumer demand for quality and affordable housing.

"Developers are very much in support of building more affordable housing as we can see the demand is there.

"PR1MA (the 1Malaysia Housing Programme established by the government) cannot do it alone and we are willing to cooperate with them," he told Business Times in a recent interview.

Rehda, he said, fully supports the good intention of the federal government to build more affordable homes.

Iskandar said affordable houses are not a new concept. When the Selangor State Economic Development Corporation was established in the 1970s, its goal was to build affordable houses.

"Sadly today, PKNS is selling houses that are priced more than RM1 million.

"Where is their social responsibility? They get cheap land while private developers pay market rate. On top of that, PKNS gets other benefits. Yet they are building expensive houses," he added.

Iskandar, who is also Glomac Bhd group managing director, said developers are willing to work with PR1MA in building these affordable homes.

"PR1MA can be a facilitator of projects to build affordable homes by private developers as it has the list of first-time home buyers," he added.

The federal and state governments could also identify pockets of land in their respective areas to be tasked to private developers to build affordable homes.

"The authorities can even stipulate that this developments must have as high as 50 per cent of affordable units," he said.

In this respect, Selangor has a crucial role to play as it still has plenty of land to be developed.

The state must do its part in solving the housing woes of the rakyat, especially the middle-income.

"The high-income earner has no problems buying houses. So too the lower-income earners who are entitled for low-cost houses.
"It is the middle-income group which is feeling the pinch," he said.

However, Iskandar said buyers must also change their mindset in choosing the location for their houses.

"You cannot expect to buy an affordable unit in Bangsar (Kuala Lumpur) at RM300,000. An affordable unit there might be RM1 million, while those in Shah Alam RM400,000 and Rawang RM300,000," he said.

Private developers are already building affordable houses but it may be a bit far from Kuala Lumpur where the land cost is cheaper.

That is where a better public transportation system will help make these places more accessible to buyers.

"In this respect, I salute the federal government for biting the bullet to build the multi-billion ringgit Light Rail Transit (LRT) and the Mass Rail Transit (MRT).

"These projects will make more outlying areas accessible to home buyers whose travel time from home to office will be very much reduced.

"After saying this, feeder services should be enhanced so that the public can easily access the LRT or MRT stations," he added.
On rising prices of houses, Iskandar said it does not mean that developers are making bigger margins now.

In fact, he said, when he first entered the business 23 years ago the margin was 25 per cent. Now he is happy if he gets 15 per cent.

Among the main reasons for the reduced margins are the cost of land, building materials and labour.

Recently, the Selangor state government had imposed a 30 per cent development charge on all improvements that it has allowed on any development land in the state.

The Caj Pemajuan 2010 indicates that all approved planning permission and approved extra floor area or space would attract a development charge and local authorities in the state are allowed to charge a 30 per cent fee and a 20 per cent of the difference in value due the permission being granted.

These additional cost would certainly contribute to the rising house prices, he said.

Iskandar said the Selangor state government must also help to alleviate the housing problems, especially of the middle- income earners.

By 2020, it is projected that the population of the Greater Kuala Lumpur area will rise from 4.5 million people to 10 million.

Assuming that the average household has four persons, it would mean that there is a need to build 150,000 new houses a year as compared to 200,000 new and old homes sold nationwide last year.

By Business Times

EPF eyes multi-asset properties abroad

PETALING JAYA: The Employees Provident Fund (EPF) is believed to be considering acquiring “multiasset” property portfolios abroad which would mark a change from merely buying stand-alone commercial properties.

These multi-asset portfolios included buildings owned by a company seeking to raise cash by taking on an asset light approach.

The company would then tender out its buildings a nd these were the opportunities that the EPF was looking at primarily in the United Kin gd om, an expert told StarBiz.

These multi-asset properties provided an attractive yield and also held property development possibilities, he said.

EPF's new strategy might involve buying into portfolios with 10 to 12 buildings located in light industrial p arks that would offer annual yields of between 6% and 7%, another source said.

When asked about this, an EPF spokesman said: “It is the EPF's policy not to comment on matters which are still at the planning stage.”

Since its active entry into the London mark et in 2010, Malaysia's largest retirement fund, has to date used up the £1bil for property purchases in Britain.

It has three properties in Australia, one being a direct acquisition while the other two were through investment in funds.

Its seven properties in Britain are currently providing an annual yield of between 5% and 6%.

In a trip to London recently to complete the purchase of the Battersea Power Station in which EPF has a 20% stake, CEO Tan Sri Azlan Zainol said the fund would be setting aside £400mil to £500mil for further purchases in Britain in the next two years.

EPF will be expanding the £1bil it set aside in 2010 for British real estate purchases.

Azlan said EPF's property i nvestment in Britain was separate from its investment in the Battersea Power Station project.

Earlier this month, EPF reported a second quarter investment income of RM7.66bil, representing a 13.42% or RM905.75mil increase compared to the corresponding period in 2011.

Azlan said the healthy earnings recorded in the second quarter were backed by strong performance from its investment in equities despite uncertainties in the current global econ omy.

Equities remained the largest contributor in EPF second quarter results, posting an investment income of RM3.84bil, or a doubledigit growth of 17.40% compared to RM3.27bil recorded in Q2 2011.

Loans and bonds generated RM2.06b il investment income forthe quarter, up RM272.32mil from RM1.79bil in the same quarter in 2011.

By The Star

Weida plans luxury condos

It’s diversifying into property with two projects in Klang Valley

KUCHING: Weida (M) Bhd will embark on two high-rise residential condominium projects in Mont Kiara and Subang with combined gross development value (GDV) of more than RM600mil.

Group managing director Datuk Lee Choon Chin said the two upmarket projects were expected to have a total of some 660 units.

“The projects are expected to simultaneously get off the ground in second half-2013, and will take three years to complete,” he told StarBiz after Weida AGM here yesterday.

Lee said the two projects would be the first to be undertaken by Weida as it diversified into property development to broaden group revenue and earnings base.

He said the Mont Kiara project, which would be located near to the Garden International School and future mass rail transit (MRT) system, was to cater for both local and foreign buyers.

The Subang condominium project will be sited near a Japanese international school.

Lee said Weida, a leading provider of modern environmental engineering solutions, would incorporate green features, like energy and resource conservation, in both projects. “The design of the condominium units will be more friendly to environment living.”

The environmental engineering solutions provided by Weida group cover water and wastewater infrastructure, products and services; trenchless mapping, investigation and rehabilitation of buried utility assets; design-and-build, operation and maintenance of water and wastewater treatment plants. Others are renewable energy and environmental conservation as well as rural water, sanitation and renewable energy facilities.

Lee said the group was currently constructing a biogas plant and other wastes treatment facilities costing some RM93mil for an integrated centralised pig farm in Lubok Antu, Sarawak. The plant, which is expected to be ready next year, is one of the largest applications of biogas technology in Malaysia's livestock farming.

It has the capacity to generate up to four megawatts of electricity using the biogas produced. The electricity could be used internally or uploaded to the state's power grid.

On oil palm development in Tatau, Bintulu Division carried out by two Weida subsidiaries, Lee said nearly the entire 6,200ha had been planted.

“We have invested more than RM100mil in the development of the oil palm estates. About 70% of the palm trees have matured, the oldest being more than four years old,” added Lee.

He said with increased production of fresh fruit bunches in the next few years, the oil palm segment would increase its contribution to group revenue.

Weida's core business is in manufacture of polyethylene engineering products. The group owns and operates five plants in Sarawak, Sabah and Peninsular Malaysia, and a sixth plant in the Philippines.

Lee said the manufacturing and works segment contributed about 45% each to group revenue with the balance by the services division. Weida has been a leading turnkey builder of telecommunication towers in Sabah and Sarawak.

For the financial year ended March 31, Weida posted pre-tax profit of RM30.1mil on revenue of RM309.7mil and earnings per share of 19.9 sen.

By The Star

PNB 'excited' over interest in Menara Warisan Merdeka

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is encouraged by companies' interest to locate their offices at the proposed 100-storey Menara Warisan Merdeka.

"It's true that there has been positive response from the companies. Most of them have expressed their interest to open up offices within the building. It's very exciting to see the high interest shown," PNB president and chief executive officer Tan Sri Hamad Kama Piah Che Othman said after announcing Amanah Saham 1Malaysia's income distribution yesterday.

Hamad Kama Piah was asked to update on the development of the proposed over 600m Menara Warisan Merdeka, touted to be the highest building in the country.

Last week, Business Times reported that the proposed Menara Warisan Merdeka had received pre-booking enquiries for over 60 per cent of its lettable space.

About 30 per cent of the space is being reserved for PNB and several government-link companies under its stable.

Hamad Kama Piah indicated that PNB group will occupy about 60 per cent of the building.

"Most of these companies are under PNB's group," he said, when asked to identify the companies that have shown interests to move into the building.

On the construction date of Menara Warisan Merdeka, Hamad Kama Piah said it had yet to be ascertained but "the preparation is almost there".

"Last month, I said that we have received the development order from City Hall, attached with several conditions.

"We are trying to fulfill these conditions as best as we can and as hopeful. We are also trying to make sure the launch will be in order," he said.

Scheduled to be officially launched by year-end, Menara Warisan Merdeka will cost between RM2.5 billion and RM3 billion.

It will have gross floor space of 3 million sq ft and a net floor space of 2.2 million.

This will be followed by two subsequent phases comprising a shopping complex and condominiums.

The whole development, to be undertaken over a 10-year period, will cost RM5 billion.

To be located within the Stadium Merdeka and Stadium Negara heritage area, the concept of the 100-storey building, its retail portion and the condominiums was mooted in early 2004.

It took into account the need for enhancement of value and effective utilisation of the 7.6ha land adjacent to the two stadiums.

Once completed, Menara Warisan Merdeka will be over 600m tall compared with Petronas Twin Towers at 453m; Burj Khalifa at 829m; and Taipei 101 at 509m.

By Business Times

PNB to occupy 60% of Menara Warisan

KUALA LUMPUR: Permodalan Nasional Bhd (PNB), the developer of Menara Warisan Merdeka, will occupy more than 60% of the 100-storey tower.

Many companies under the group had shown keen interest to set up their offices in the tower block, PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman said after announcing the income distribution for Amanah Saham 1Malaysia yesterday.

By Bernama

Tornado arriving in Shah Alam

Nearly ready: Work on the WaterWorld @i-City is 70% to 80% complete.

Malaysians can look forward to a zero-gravity experience on The Tornado Ride at i-City’s fourth leisure component, WaterWorld @i-City soon.

i-City’s developer, I-Berhad, unveiled the park’s latest attraction recently.

The Tornado Ride is 70% to 80% completed and the 4.05ha (10-acre) theme park is scheduled to be opened to the public this November.

I-Berhad director Monica Ong said WaterWorld @i-City was the fourth leisure component in i-City after the completion of the popular digital lightscape, outdoor park rides as well as the Snowalk.

“The theme park will also provide visitors, especially families, a wholesome experience,” she said.

“The Tornado will be the flagship ride of the theme park and it will offer visitors an exhilarating ‘weightless’ experience,” she said.

The first Tornado was introduced in Canada in 2003.

To-date, there are more than 100 Tornado rides in the world and WaterWorld will be the first in the Asean region to feature such a ride.

The Tornado is a 28-second thrill ride where riders in groups of four will be sliding down on a tube raft through a steep 160-foot water tunnel. The tunnel is connected to a seven-storey high funnel inclined at 45 degrees.

Riders will experience four to six oscillations in the funnel with a 60-foot diameter opening that reduces gradually to a 10-foot diameter at the bottom before splashing onto the 1,350 sq ft landing pool.

It is at the peak of each oscillation that riders can feel the zero-gravity effect.

The funnel and tunnel are made of fibre glass and the ride can take an average of 480 riders per hour.

Around 16,000 litres of water are pumped into the funnel to reduce friction between the raft and the funnel.

Visitors can also check out the gigantic wave pool with a stage and LCD screen for concerts and special events.

There is also a river adventure through the Rockery Cave that is illuminated by LED lights.

Children can indulge in the Rainbow slide and enjoy a splashdown at the Children Adventure pool.

Ong said the company had invested RM25mil in the whole project and expected to break even in two to three years.

i-City currently attracts 90,000 visitors weekly and expected a 30% increase in the number of visitors once the project is completed.

By The Star

New centre for homeless

Kuala Lumpur City Hall (DBKL) has identified a 2.02ha institutional land to build a new centre for the homeless.

Mayor Datuk Ahmad Phesal Talib said they were keen to assist the Women, Family and Community Development Ministry and Social Welfare Department to resolve the homeless issue in the city.

“The ministry and Social Welfare Department do not have a place to build the centre so it is only right we offer them the land.

“The ministry is very responsive to the idea and we are waiting to hold further discussions.

“The temporary relocation centre for Malaysians will be built by the ministry.

“We notice there are a lot of homeless people with jobs but they don’t want to rent rooms or houses because they want to save money. Hence, they take shelter under bridges.

“On the other hand, there are 13 non-governmental organisations (NGO) carrying out soup kitchen programmes,

“With this centre, we can organise the programmes in one place,” he said.

He added that DBKL would also be working with the Immigration Department to round up foreign vagrants.

Through joint operations with the Social Welfare Department and National Anti-Drug Agency, 312 vagrants, beggars and loiterers were picked up as of August.

The areas covered were Jalan Tuanku Abdul Rahman, Masjid Jamek, Jalan Silang, Central Market, Jalan Loke Yew, Jalan Pasar, Sultan Muhammad roundabout as well as areas surrounding Menara Maybank, Mydin Kota Raya, Bank Negara and the National Mosque.

StarMetro has been highlighting the homeless in the city, which is mainly due to the lack of affordable housing, welfare and services.

The city’s bridges, benches, sidewalks, abandoned and dilapidated buildings as well as platforms have become homes to an increasing number of homeless.

According to Social Welfare Department statistics, the number of homeless registered with the department was at 1,387.

At present, Anjung Singgah — a government-run centre — serves as a transit home for the homeless since April. The shelter accommodates up to 76 people, allowing them to stay up to two weeks.

There have been mixed feelings and reviews over the transit home and feed-the-poor programmes by NGOs. Some questioned the effectiveness of the transit home while some are not keen to have soup kitchens as it encourages homeless to continue living on the streets.

By The Star

Thursday, September 27, 2012

Ireka: RM1.9b projects over next 5 years

DIVERSIFICATION: High-end developer looking at the mid-market segment

IREKA Corp Bhd plans to launch projects worth RM1.9 billion over the next five years as the company is upbeat about the prospects of the real estate sector, despite the sluggish global economy.

The upmarket developer is planning to launch two projects by end of this year. The projects are for a boutique hotel and serviced residence in Kuala Lumpur and a housing development in Nilai, Negri Sembilan.

Ireka's group managing director Lai Siew Wah said the boutique hotel and serviced residence project is a 30:70 joint-venture between Ireka and Aseana Properties Ltd.

Lai said Ireka is looking at diversifying into the mid-market residential and commercial sectors, as well as modern industrial buildings.

"The residence project will serve as the niche market for luxurious residential units with smaller built-up, 80 per cent of which are 878 sq ft and 906 sq ft," he said.

Speaking at a media briefing after the company's annual general meeting here yesterday, Lai said, the company expects revenue from the property development projects to roll in within two years.

Also present were chairman Abdullah Yusof, executive director Lai Voon Hon and chief financial officer Monica Lai.

Meanwhile, Lai said Ireka is currently eyeing more construction jobs here.

The company has RM745 million worth of ongoing projects, of which about RM400 million remains outstanding.

Among the ongoing projects are works for the City International Hospital in Ho Chi Minh City, Vietnam, two office towers and a hotel block in KL Sentral as well as a high-rise serviced apartment and office project - the Imperia Puteri Harbour - at Puteri Harbour in Nusajaya, Johor.

In the current financial year, the group will continue to focus on replenishing its order book, Lai added.

By Business Times

Glomac nets RM24m in Q1 on record sales

KUALA LUMPUR: Glomac Bhd has announced a RM23.79 million net profit for the first quarter ended July 31 2012, marginally better than RM23.63 million registered in the same previous quarter.

Net profit attributable to shareholders rose 17.3 per cent to RM21 million from that in the corresponding quarter last year, Glomac told Bursa Malaysia yesterday,

For the first three months of its financial year ending 30 April 2013, the group posted 26.1 per cent year-on-year revenue growth to RM161.1 million.

"The record sales we have achieved continue to drive our earnings growth, with key contributions from our broad portfolio of ongoing projects such as Glomac Damansara, Glomac Cyberjaya and our key townships of Bandar Saujana Utama and Saujana Rawang," group executive chairman Tan Sri FD Mansor said.

He said new sales in this first quarter of RM212 million exceeded that in the corresponding period last year by more than 100 per cent.

As at end July 2012, Glomac's unbilled sales were another record high of RM763 million.

Glomac expects the strong sales momentum to continue.

"We have a pipeline of future projects with a total gross development value of RM7 billion, of which we intend to launch RM1.13 billion in this current financial year," FD Mansor said.

By Business Times

Wednesday, September 26, 2012

Residents voice concern over project

RESIDENTS who attended the Kuala Lumpur City Hall (DBKL) objection hearing session for a proposed residential high-rise project in Wangsa Maju Section 10 recently came out of it with the uncertainty of the safety of the forest located next to their homes.

According to Sheena Moses, 24, a green building consultant who has been living in Sri Ledang Condominium for more than 15 years, the authorities were not very receptive to a few of the issues they raised at the meeting.

Among the major concerns of the residents in the area is the loss of the green space, one of the remaining few in the area, as well as a worsened congestion problem.

A previous front page article by StarMetro published on Sept 13, quoted another resident Aisyah Farhanah Mohamad, 24, an intern at a local environmental organisation saying they were already facing the possibility of the latter problem.

“There are two upcoming projects nearby, one involving six 30-storey blocks and the other another high-rise residential development. These are along the main road leading into this area and will definitely cause an influx of people here,” she said.

They also say that cars are frequently parked along both sides of the roads close to the homes and rush hour congestion is very bad as there is only one access road to the area.

Those staying in the area are from the Wangsa Maju Section 10 low-cost flats as well as Sri Ledang, Sri Kinabalu, Sri Jelatek, Sri Lojing and Desa Villas Condominiums.

During the meeting, they were informed that the project does not involve developing the entire plot and 20%, consisting of Class 3 and 4 slopes, will be maintained.

The project in question will involve the construction of three 26-storey apartment blocks consisting of 721 units with a five-storey carpark podium as well as increase the population density from 60 people per acre to 319 people per acre.

As of the hearing date, the Facebook page they started to save the forest as well as an online petition has garnered more than 2,700 supporters.

By The Star

OSK Property to buy land in Petaling Jaya

KUALA LUMPUR: OSK Property Holdings Bhd has proposed to purchase a commercial land in Petaling Jaya, Selangor, for RM12 million.

OSK said the acquisition will enable it to increase its existing property development land banks and strengthen its presence in the bustling development area northwest of Kuala Lumpur.

The company intends to develop the land which is situated inside a matured residential area of Bandar Sri Damansara by the third quarter of 2013.

By Business Times

Property cooling measures pay

The sitting room of a condominium in world’s tallest luxury residence in Singapore. Statistics suggest that foreign buying interest has picked up again after the market initially cooled in response to the measures. — EPA

Singapore collects US$500mil from additional stamp duties

SINGAPORE: The taxman has collected more than half a billion dollars from additional stamp duties imposed as part of property cooling measures.

The additional buyer's stamp duty (ABSD) has contributed the bulk of that US$450mil between its inception on Dec 8 last year and the end of last month.

A further US$51mil has come from the seller's stamp duty since it was implemented in February 2010, the Inland Revenue Authority of Singapore (Iras) said. According to Iras' annual report, it collected US$2.5bil in stamp duty from sale and purchase agreements in its financial year ended March 31, 2011.

The ABSD take includes about US$261mil collected from foreigners who are not permanent residents (PRs), who bought about 1,400 homes in the nine months to the end of last month, Iras told The Straits Times.

These foreigners comprised about one in four of the buyers who have paid the additional tax.

The figures seem to suggest that foreign buying interest has picked up again after the market initially cooled in response to the measures. In the first four months after the tax was introduced, foreigners paid US$66.2mil in ABSD on the purchase of 369 private homes.

Afterwards, the tax take and transactions shot up, with about US$200mil collected in the subsequent five months on more than 1,000 homes bought. Experts said this trend was also borne out on the ground.

The Urban Redevelopment Authority's Realis website shows that non-PR foreigners bought 358 homes in the first three months of the year or 5.4% of private home purchases. In the second quarter, they snapped up 637 homes 6.7% of private home sales led largely by renewed interest in city centre and city fringe homes.

These numbers are still well below the quarterly sales average of 1,369 foreign-bought units seen last year.

International Property Advisor chief executive Ku Swee Yong said that while foreign buyers held back from purchases when the additional buyer's stamp duty was first announced, continued uncertainty in the global economy had led them to reconsider Singapore. “Singapore is still a safe haven, and for high-net-worth individuals, their goal of wealth preservation might have overridden their concerns of the ABSD,” he said.

By Asia News Network/ST

Australians’ unusual habit with home mortgages

SYDNEY: Australians have an unusual habit of paying off their mortgages much faster than borrowers in most other rich nations, a valuable trait that gives households a safety buffer were the economy to slow sharply.

Around half of all borrowers are ahead on mortgage payments, the Reserve Bank of Australia (RBA) reported yesterday, a level only reached by Canada among developed nations.

“In this way, many households have a buffer that they could temporarily draw on to stay current on their loan repayments if their incomes were to fall,” the central bank said in its semi-annual report on financial stability.

This peculiar feature of the Australian market was noted by officials from the International Monetary Fund (IMF) in the country recently to assess the local banking system. It was one reason the IMF awarded the banks top marks in a series of stress tests, setting them apart from many of their global peers.

In total, the RBA estimated mortgage prepayment buffers in Australia were equivalent to around one-and-a-half years of scheduled repayments based on current interest rates.

Indeed, the RBA said liaison with major banks suggested 15% of borrowers were ahead by two years or more.

By Reuters

Tuesday, September 25, 2012

I-Berhad signs MoU with Thai retail developer to set up i-City Mall

Expansive: A night view of the Central World Mall Bangkok.

TO GIVE the local media an idea of what the new mall in i-City Cybercentre, Shah Alam may be like, I-Berhad held a media visit to two malls in Bangkok recently.

During the visit, which also saw the signing of Memorandum of Understanding (MoU) between Thailand’s largest retail developer, Central Pattana Public Company Limited (CPN) and I-Berhad’s wholly-owned subsidiary — I-City Properties Sdn Bhd, the media were taken on a tour of the Central World Mall Bangkok and the tastefully refurbished Central Plaza.

With over 550,000sq m of retail space, the Central World Mall which is the largest mall in South-East Asia, has 500 different retails including 35 different fashion brand flagship stores and 36 new brands.

It also houses six flagship stores, over 50 restaurants and a 21-screen cinema with an indoor parking facilities with 7,000 parking bays. The mall is also connected to a five-star hotel, the Centara Grand and the Bangkok Convention Centre and an office tower.

Using creative artwork and sculpture as part of the shopping complex’s interior, shoppers would have a fun experience while the clever zoning system with unique design and ambience makes it easy for them.

Although we had limited time at the huge mall, members of the media had a fun time rushing through the various zones. One needs more than an hour or two even to just skim through the floors.

Otherwise, the eight-floor mall has a tasteful combination of retail outlets and an impressive area for restaurants and food.

A tourist whom I had met at the mall described the place as enormous and said that he had never seen so many eateries in one mall before.

“Food is good and I can just spend the whole time here. There are the massages, all in one place and it’s connected to the hotel via the seventh floor carpark — it’s just a walk over,” said the tourist.

It is a workable concept that has been successful even in the Klang Valley with malls like 1Utama Shopping Centre and the Mid Valley Megamall.

Huge project: Chirathivat (left) pointing out to Lim an interesting feature of Central World Mall.

CPN president and chief executive officer Kobchai Chirathivat said the joint venture was the company’s stepping stone to further expand its business in Malaysia.

He said the Malaysian government’s consistent policies on foreign investments, the country’s gross domestic products (GDP) growth and the per capita income of Malaysians were factors that attracted the company to invest in Malaysia.

“We hope to bring the best experience we have in building and managing malls in Thailand and to hopefully be one of the best retail projects in Malaysia.

“As Asians, we have almost similar lifestyles so it will be very compatible to move across the border.

“We are very proud to be part of the Malaysian economic development,” said Chirathivat, adding that the mall was still in its designing stages and it would consider the demography and needs of the market as part of the design and concept.

Present at the MoU signing were I-Berhad executive chairman Tan Sri Lim Kim Hong, I-Berhad chief executive officer Datuk Eu Hong Chew and Central Group chief executive officer Sudhitham Chirathivat.

The event was witnessed by Selangor Mentri Besar Tan Sri Khalid Ibrahim and Selangor state executive councillor Teresa Kok.

The i-City mall with a space of 1.7 million sq ft is expected to open at the i-City Cybercentre in Shah Alam by the end of 2015. Construction will begin early next year.

The project with a budget of RM500mil, will be located within an 7.3ha plot in i-City and is set to complete the RM5bil Cybercentre’s offering as an international business hub by day and lifestyle haven by night.

By The Star

Property sector eyes Budget 2013

As the announcement of Budget 2013 draws near, growing concerns in the past year towards escalating property prices and availability of affordable homes are perceived to pique the interest of industry players and the public on upcoming amended or new policies regarding the property market.

In the second quarter this year (Q2 2012), the federal government was reported to have begun mulling the hike of minimum floor prices for residential property that may be bought by foreigners from RM500,000 to RM1 million, a move which has been strongly supported by the state government of Penang.

"Though Budget 2013 will determine that this floor price increase will be mandatory across the country, the move will not likely affect the affordability of homes for local buyers whether positively or otherwise," said John Paul Sta Maria, Country Manager of PropertyGuru Malaysia.

In a statement today, he said that based on the online portal's Malaysia Property Sentiment Survey Q2 2012, 30 per cent of respondents felt the hike would help improve property affordability for locals, however, a close 29 per cent do not believe there will be any major impact on local prices.

He also revealed that 82 per cent of respondents believed the current residential property prices to be expensive while 74 per cent said all property types in Malaysia are expensive as compared with 65 per cent in Q1 2012.

Some 36 per cent of respondents believed that developers are responsible for pushing the rising construction costs and high land prices, 20 per cent indicated it's the herd mentality of buyers which caused an uptrend in prices while 10 per cent pointed to competition with foreigners as the main reason.

Some 70 per cent felt that property prices with further increase in the next six months.

The perception of escalating property prices is not limited to first-time homeowners or those looking to buy a property.

Compared to Q1, only 25 per cent instead of 33 per cent said they are willing to upgrade their existing property in the 12 months.

Concurring with the findings of PropertyGuru, Chief Executive Officer of Malaysia Property Incorporated (MPI) said: "An increase in house prices is evidenced by results of MPI's research with the National Property Information Centre (NAPIC), which revealed that the average price of houses below RM500,000 had risen by 25.8 per cent between 2004 and 2011.

"As seen from last year whereby seven out of 13 states showed double-digit house price increases...the core issue on price increase seems to be state dependent."

However, despite the increase in prices, the market is expected to grow due to increasing demand.

Some 68 per cent of respondents versus 64 per cent in Q1 2012 believed the number of property transactions would increase in the next six months.

"Rural-urban migration is also another factor, and of course people could be buying homes in new locations further from the city instead of urban centres," said Sta Maria.

While the market seemed healthy, all eyes will be fixed on the government and Budget 2013 as to how policymakers will act in response to current market sentiments.

Previously, the budget included the reintroduction of Real Property Gains Tax (RPGT) for properties sold within the first two years of purchase (up to 10 per cent) to curb speculation and the launch of the PR1MA (1Malaysia People's Housing) programme to provide affordable homes.

By Bernama

New incentives for developers proposed

The government should consider giving more attractive incentives for property developers to install solar panels in new homes as a step towards fostering the development of green buildings, a construction industry player said.

ATSA Architects' chief executive officer, AR Azim A Aziz, said the government through the 2013 Budget could introduce new incentives in place of present incentives given to developers for the use of green materials including solar panels that could meet the feed-in-tariff requirement.

"There is a lot more potential in feed-in-tariff, but not many people can afford to put up RM44,000, the initial setup cost, on their roof," he told Bernama in an interview today.

Although the price of solar panels has dropped more than 45 per cent in the last two years, the RM44,000 initial setup cost for 16 solar panels and supporting equipment is still considered high among common people, he said.

He said with Real Estate and Housing Developers' Association estimating 100,000 new houses to be built every year, any incentive to the developers could provide an immediate effect to the country's energy supply.

Azim said the feed-in-tariff, which is managed by Sustainable Energy Development Authority (SEDA), is a good idea to encourage people embracing the green lifestyle.

He said a set of solar panels comprising 16 solar panels could
generate three kilowatt per hour (kWh) of electricity and with SEDA paying RM1.49 per kWh, this will give the owner a passive income of RM600 per month and around five years to break-even the initial cost.

"SEDA is offering a contract of 21 years, which means that the owner can have 16 years of passive income while living a green lifestyle," he said.

Aziz said another way to hasten the acceptance of feed-in-tariff is through banks which can provide the initial capital.

He said banks could provide loan schemes for purchasing solar panels and related equipment, similar to the hire purchase schemes for buying cars.

"Banks have to be readily involved to make sure the people can afford to place the solar panel at their homes," he said.

He said the schemes could be in the form of loans, hire purchase etc.

Aziz said with Malaysia strategically located under the sun belt, one of the best areas in harvesting the sun's energy, the country receives an average of 3.5 hours of sunlight every day making it a suitable place to implement solar-based technology.

Emphasizing on the importance of green lifestyle, he said as a developing nation, the population was growing and this would exert pressure and natural resources would become more scarce.

The population is estimated to double to 57 million people in 2090 when natural resources and even food are expected to be no longer plentiful.

"We cannot go on building as we did in the past or living as how we lived in the past. We must contribute to reducing green house gases and energy consumption over the years," he said.

By Bernama

Affordable homes concept to be out soon

The Federal Territories and Urban Wellbeing Ministry is in the midst of formulating a concept for affordable homes with regards to the middle-income group.

According to Kuala Lumpur City Hall (DBKL) deputy director-general (project implementation and maintenance) Mohd Najib Mohd, the formula will be ready within a month.

He said the ministry was aware of the vacuum that exists in the community between the rich and the poor.

“The ministry is working on some of the criteria such as having the homes within the city, controlling the price and having a specific size.

“We hope that if the projects come through, the middle-income group can afford to live in the city by 2014 or 2015. But we won’t be able to see anything until the guidelines are out as we will have to follow them.

“We will have to facilitate the conditions and put it into the development if there are DBKL projects in the pipeline.

“We are willing to be partners with private developers.

He added they did not want people working in the city to travel very far from where they live.

On Sept 15, Kuala Lumpur mayor Datuk Ahmad Phesal Talib announced that DBKL were considering two pilot projects for the middle-income group.

He had said based on the growing demand, there was a need to provide such homes, especially for the younger generation while trying to cap the unit price at below RM400,000.

By The Star

Sites for 10,000 affordable homes in Seremban

KELANA JAYA: 1Malaysia People’s Housing Scheme (PR1MA) has earmarked a few plots of government land as part of its plan to build 10,000 affordable houses in Seremban, Negri Sembilan, within a decade.

PR1MA is also eyeing private andpublic land in Johor, Malacca and Pahang, besides the Klang Valley.

PR1MA is a government unit tasked to build affordable quality homes for the people, with household income of RM3,000 to RM7,500 a month.

“We have identified three plots of federal land in Seremban. Our target is to build about 10,000 PR1MAhouses in Seremban over 10 years,” PR1MA chief executive officer Datuk Abdul Mutalib Alias said.

He did not disclose details of its targeted land.

“Our priorities (in building affordable houses) are urban areas in Johor, Malacca, Pahang and Negeri Sembilan, besides the Klang Valley,” Abdul Mutalib said at a briefing hereyesterday.

Seremban is poised to host PR1MA’s first housing scheme since the PR1MA Act was gazetted in January this year.

The scheme, to be launched on Saturday by Prime Minister Datuk Seri Najib Razak, will involve 1,200 units of double-storey houses under the first phase.

The three-phase project is sited on some 162ha in the northern part of Seremban, which is being bought gradually from private owners, Abdul Mutalib said.

PR1MA had decided to carry out the project there because there was demand for it, he added.

PR1MA is also finalising plans to launch several projects in Kuala Lumpur. These include a high-rise development at Bandar Tun Razak.

Abdul Mutalib said PR1MA will implement the Industrialised Building System (IBS) mechanism to speed up construction work.

IBS may be costlier than the conventional way but over time, it will be offset by the high volume of units built, he added.

“Of course, initially not all PR1MA projects will use IBS. It will be hybrid-IBS,” he remarked.

Industry observers said IBS would speed up the construction of housing projects by half the time compared with the conventional way, while needing only a third of workers.

The mechanism, however, would see a cost increase of between 10 per cent and 15 per cent.

Abdul Mutalib said PR1MA will ask private property developers to set aside part of their projects to build affordable PR1MA houses.

In return, the developers will be provided with the government’s facilitation fund supervised by the Public Private Partnership Unit.

Abdul Mutalib reiterated that originally, when PR1MA was announced last year, the scheme was only open to a narrow joint-salary band of RM3,000 to RM6,000.

This had created a sandwich group, and hence, the move to broaden the income eligibility to between RM3,000 and RM7,500 a month.

He also reiterated that PR1MA prices will be below market price, and will be the same for everyone, without quotas or discounts of any kind.

There will be a mix of PR1MA landed and medium-rise properties.

By Business Times

Malaysia mulls rail link with Asean, Chinese cities

HIGH-SPEED TRAINS: Several options currently being explored for Kuala-Singapore route

MALAYSIA is studying the possibility of linking the high-speed rail (HSR) system from Kuala Lumpur to Thailand, and to other Southeast Asian countries, says Transport Minister Datuk Seri Kong Cho Ha.

“We want to provide connectivity beyond Thailand. But to do this, you would need government to government understanding and we have not come to that yet,” Kong said.

“High-speed trains today are more convenient and is a faster mode of transportation, from city to city , than flying,” he said yesterday, at the signing of a memorandum of arrangement (MOA) between the Ministry of Transport and China’s CSR Group.

It is learnt the government is mulling providing rail connectivity from Kuala Lumpur to Thailand, Laos, Vietnam and several cities in China.

The Land Public Transport Commission (SPAD) is currently doing a study on the HSR to link Kuala Lumpur and Singapore. The study is expected to be completed by the end of the year. If found feasible, SPAD will call for pre-qualification bids by mid-2013.

Kong said several options and alignments are being explored for the Kuala Lumpur-Singapore route.

“The train could either runnon-stop from Kuala Lumpur to Singapore, or start from KL Sentral and have stops at the Kuala Lumpur International Airport, Seremban and beyond that,” he said.

Asked whether the government was eyeing the use of the magnetic levitation (maglev) technology, Kong said no decision has been made.

The MOA involves the building of a RM400 million CSR Rail Centre in Batu Gajah, Perak by CSR Zhuzhou Electric Locomotive
Co Ltd. It was witnessed by Prime Minister Datuk Seri Najib Razak, Kong, China’s Ambassador to Malaysia Chai Xi and CSR vice-president Fu Jianguo.

Meanwhile, Kong said participants at the recent Innotransconvention, the world’s biggest rail industry event in Berlin, Germany have expressed interest to work on railway projects in Malaysia.

Kong, who was at the conference, said Malaysia was also invited
by several European and Asian companies to use their technology.

The companies included Bombardier, Rotem, Alstom, CAF, Ansaldo, Hitachi and CSR.

“There are many things happening in the railway sector here. We have the MRT, the LRT extension, ongoing double tracking works, with the possibility of the HSR being implemented.

“There is also the rapid transit system from Johor Bahru to Singapore.

So there is a lot of potential for rail technology and suppliers,” Kong said.

By Business Times

MAAKL: No tie-up with Listari Marina

PETALING JAYA: MAAKL Mutual Bhd says it has no tie-up with developer Listari Marina (M) Sdn Bhd in a property project or sale of unit trusts.

Referring to the StarBiz article last Friday on Listari Marina’s recent event to publicise a mixed development project in Malacca, MAAKL said a unit trust consultant who had been at the event was never authorised to attend the ceremony on MAAKL’s behalf.

The consultant was not authorised to receive any pledge or mock cheque or to make any commitment for and on behalf of MAAKL, it said in a statement.

It added that it had not received any investment pledge, mock cheque or actual payment from Listari Marina.

“Prospective investors are advised to note that MAAKL is not permitted at law and do not and will not issue any free unit trust.

“All sales of unit trust are and will only be done for valuable consideration, in accordance with our prospectus and the relevant laws and regulations,” it added.

On Friday, StarBiz reported that little-known property developer Listari Marina was building a mixed development at Klebang, Malacca, with a gross development value of RM183mil.

In collaboration with MAAKL, it was reported that Listari Marina would offer purchasers free mutual fund units equal to about 8% to 10% of the property purchase price and also free MAAKL life plus Insurance policy to eligible and qualified purchasers and investors.

By The Star

Monday, September 24, 2012

Are there too many malls in Penang?

PENANG'S retail scene appears to be on the boil, if the number of shopping or lifestyle malls which have sprouted or are being constructed are anything to go by.

Just how well these establishments and their tenants are doing is anyone's guess, even if some of the major ones found on the island and Seberang Prai appear to not be lacking in terms of human traffic.

The island is currently home to less than 10 shopping malls, while Seberang Prai has about half the number. Not all these establishments are raking in high profits. Those which are managed by professionals and boast solid anchor tenants are the ones who are finding themselves profitable.

Others have been known to be spiraling downwards due to poor management and inadequate planning. Tenants in these centres are finding themselves left with no choice but to move out or come up with novel ways of luring consumers to survive.

A check on the type of merchandise stocked in some outlets reveal that stock has not been refreshed for some time. Others, by virtue of in-store promotions and sales are seeing a little better business although the general consensus is that retail shoppers are not buying as much as they used to.

While some food and beverage establishments with vantage locations continue to see a constant flow of diners, others are lamenting the fact that things have slowed down.

Others doing relatively well as those offering entertainment options like cineplexes, beauty and fitness outlets and also good bookstores.

Some tenants who find themselves struggling appear to be those who are faced with increased rentals and a shrinking pool of patrons (who tend to flock over to the next mall when a new one opens).

For those those living in neighbourhoods within close proximity to shopping malls, especially on the Penang island, their regular gripes these days are centred on horrendous traffic jams in their areas, especially during long weekends and peak hour.

These residents are forced to contend with haphazard parking by those who opt not to park in the generous number of parking bays provided by shopping mall operators.

In order to save parking fees, shoppers have no qualms in parking illegally in a residential area for hours on end, sometimes even blocking the entry way of house owners into their own properties.

Questions being asked about Penang malls are:

* Does Penang need more shopping malls which essentially mirror each other when it comes to tenant mix?

* Are traffic dispersal systems taken into consideration by the local authorities when giving planning permission for projects which generate massive traffic flow into an area?

* Whose responsibility is it - the local government or the business operator's - to ensure that the quality of life enjoy by those living in the vicinity of malls are not adversely affected when a property developer decides to build a neighbourhood mall in their midst?

As traffic congestion in Penang is now getting to unbearable levels during festive and holiday periods, perhaps a review is needed on where future malls should be located, and if these malls are even needed in such great numbers in the first place.

Like most other Malaysians, Penang residents love their malls and their shopping habits sometimes have a tendency to spur a mall-building boom.

The financial shape of retailers and both national and international property developers must also be looked into when shopping malls are being proposed.

Also to consider should be the fact that Internet shopping has and continues to grow by leaps and bounds and that the retail sector would likely be one of the first casualties during an economic downturn.

This in turn, will likely see a state or country left with an increasing number of abandoned - or dead - malls.

By Business Times

In Ipoh property boom prices up more than 30%, on par with KL and Penang

One of the many new developments in Ipoh – The Enclave along Jalan Sultan Azlan Shah is sought after.

IPOH: The prices of properties in Ipoh have skyrocketed in prime locations to be almost on par with those in Kuala Lumpur and Penang.

“Ipoh is now bustling with activities. There is no sign of prices coming down,” said Oriental Realty agent Gladwin Agilan.

Gladwin said the demand was not only for new developments but in the secondary market.

Gladwin: ‘There is no sign of prices coming down.’

Among the factors that have contribute to the upward trend in the demand for properties were better transport facilities including direct flights to Singapore, the electric train service, the state being an education hub and a high number of foreign companies investing in the state.

Condominiums or high-rise apartments, once considered unprofitable, are now in demand as people look for amenities such as swimming pools, gymnasium, and restaurants at their doorsteps.

The prices of properties in Canning Gardens have been increasing by 10% annually for the past three years.

He said people chose to own properties in the area due to its location, which is near the city, and because of its freehold status.

Gladwin, who is the head of the sales division, said the latest transaction showed the price of land was RM144 per sq ft for a single-storey semi-detached house.

“Surprisingly these houses are purchased by Perakians who are in their late 30s to mid-40s.

“Many of them have returned to their hometown due to better job opportunities.

“Foreign companies such as Vale iron ore distribution centre in Teluk Rubiah have also created demand,” he said.

The type of residential units being sought after has also changed. There is demand for condominiums, gated-and-guarded landed properties as well as properties that have easy access to amenities.

Gladwin said new developments such as the Haven Lakeside Residences in Tambun, Meru Hills in Meru Valley and The Enclave along Jalan Sultan Azlan Shah, Somerset at Thompson off Jalan Sultan Azlan Shah, Casa Bintang near the Ipoh Swimming Club in Jalan Raja Dr Nazrin Shah, were gaining popularity.

He added that developments were now taking place in the outskirts such as Klebang, Kledang, Pasir Putih and Sunway in Tambun.

Gladwin said the perception of owning a property in Ipoh, and not being able to rent out was incorrect as the demand for rented housing was overwhelming especially in Meru Valley and the Sunway area.

“Foreigners working in the state prefer to stay in bungalows or condos in such serene areas.

“It offers a higher yield of between 7% and 10%, which is considered good, as only commercial properties offer such attractive returns,” he added.

He said besides Ipoh, the next upcoming market is Manjung, located about 90km from the city. Other potential areas for development included Lumut, Teluk Batik and Pangkor.

Another real estate agent P.Ranganathan agreed that the prices of properties were going up in certain parts of the city.

He said the prices of property had increased by up to 30% in the last three years.

“Those that have made up their mind to purchase properties in the city should do so fast as the prices of building materials are increasing.

“With steel bars and other building materials on the rise, the prices of properties are also expected to increase,” he added.

Datuk Bandar Datuk Roshidi Hashim said the skyline of Ipoh would change by 2014.

He said this was visible from the rapid development that was taking shape in the city.

“We are expecting more development to take place in the city,” he said.

By The Star

Developers want to hand over the baton

Private developers want the government to take over the responsibility of building low-cost houses, but say they are willing to partly contribute to such projects.

Glomac Bhd's group managing director and chief executive officer Datuk FD Iskandar said this role can be taken up by Syarikat Perumahan Negara Bhd (SPNB), a government-owned entity.

SPNB, a wholly-owned subsidiary of the Minister of Finance Inc, was established in 1997 with the objective of building quality affordable homes.

However, Iskandar said, SPNB should not be left on its own to raise fund for the low-cost homes. Developers should partly contribute to such projects as part of their social obligation.

Iskandar is also the Real Estate and Housing Developers' Association deputy president.

Towards this end, he suggested that developers pay certain amount to be channeled to SPNB, in lieu of not building such homes.

"There is already a formula in Kuala Lumpur where for every low-cost (unit) developers don't build, they have to pay to Kuala Lumpur City Hall (DBKL).

"For example, say you have to build 100 low-cost units and you don't want to build them ... In lieu of not building them, for each of the low-cost unit, you have to pay RM3,250 to DBKL.

The money collected should be channeled to SPNB so that it can build low-cost units elsewhere, he added.

He said it makes sense for the government to build affordable houses for the lower income group, with private developers helping with the funding.

Private developers lose RM15,000 to RM50,000 for each low-cost unit they have built. "Stop, don't ask us to build anymore low-cost (units) as the demand is no more there," he told Business Times in an interview recently.

Iskandar said private developers do not try to run away from their social obligation, noting that they have, in fact, over-achieved in delivering the low-cost housing targets.

The government, in 1982, imposed the 30 per cent low-cost housing quota on developers as a social obligation. Since then, developers have been building low-, low-medium and medium-cost houses at prices that have been maintained at between RM42,000 and RM99,000 each.

Under the Eighth Malaysia Plan (2001-2005), developers built more than double the target 40,000 units by delivering a total of 97,294 houses.

Between 2006 and 2010 under the Ninth Malaysia Plan, developers again exceeded the target by building 78,500 compared with 77,700 imposed by the government.

"For the hardcore and urban poor, they cannot buy a house (even) at RM42,000 as they don't have the capacity to buy at that price," said Iskandar.

He noted that places like Bukit Beruntung, Klang, Semenyih and Bukit Sentosa have thousands of low-cost units priced at RM42,000, which are empty.

"Today, when the low-cost houses are auctioned, they're only sold at RM12,000 to RM15,000 ... so there is no demand," he said.

Furthermore, he said, what is more worrying is that most low-cost apartments in Malaysia are not well maintained.

Iskandar said the registration and distribution system of low-cost housing leaves much to be desired, with many units not fully taken up by low-income households.

"As business entities, we have to meet profit expectations of shareholders as well, and building homes and selling them at RM42,000 or below is certainly not going to help meet those expectations," he said.

By Business Times