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Thursday, April 19, 2012

Concerns over floor price hike for residential properties

PETALING JAYA: Some property consultants are not in favour of a potential move to increase the floor price of residential property for foreign buyers from RM500,000 to RM1mil.

They said such a move would not affect the increasing prices of ordinary homes, and might deter foreigners from investing or working in Malaysia.

Property consultancy Rahim & Co executive chairman Datuk Abdul Rahim Rahman said Malaysia needed foreigners to be part of its work force as the country progresses to become a high-income nation by 2020.

“Such a move would reduce the number of residential property purchases by foreigners. Personally, I do not think that foreign purchases have contributed very much to the rise in prices of ordinary homes although it did affect the prices of luxury homes or apartments in the KLCC area, initially,” he said on the sidelines of the 22nd National Real Estate Convention.

The convention is jointly organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) and The Royal Institution of Surveyors Malaysia.

PEPS president Choy Yue Kwong was of the opinion that even at the present RM500,000 floor price, many foreign residents did not find it easy to buy homes. “The focus seemed to be on the upper-income bracket (foreign residents). But people forget that many foreigners are just ordinary professionals and workers.”

The 2011 property market report, compiled by the Finance Ministry’s Valuation and Property Services Department, had noted that the demand for units priced above RM500,000 had increased nationwide, with 21,905 transactions last year (compared with 16,782 in 2010). “This could be attributed to the increase in affordability level and supported by the ease in borrowing as well as attractive loan packages offered by the financial institutions,” it said.

On residential property values, Abdul Rahim said overall prices should stabilise this year due to credit-tightening measures by banks.

HwangDBS Vickers Research said there would be minimal impact to the property sector from the potential move, as “foreigners usually buy high-end properties (Johor is more vulnerable, given its lower property prices and higher dependence on Singaporeans).”

The research unit noted in a report that recently, developers had been holding back or scaling down launches and setting more reasonable selling prices, after 10% to 20% hikes in 2010 and the first half of 2011. “Although mortgage approvals and applications rebounded in February this year, after the sharp drop in January (partly due to festive holidays), they are 27% and 18% off 2011’s peak respectively.”

By The Star

Tradewinds to buy property worth RM510m for MTR2

KUALA LUMPUR: Tradewinds (M) Bhd is buying a commercial property from its sister company for RM510 million, which will be used to develop the proposed Menara Tun Razak 2 (MTR2) project.

More than 80 per cent of the funding will come from bank borrowings, while only RM76.5 million will come from internally generated funds.

Tradewinds' wholly-owned unit, Sovereign Place Sdn Bhd, signed a sale and purchase agreement with Skyline Atlantic Sdn Bhd, a 100 per cent unit of Tradewinds Corp Bhd (TCB).

Tycoon Tan Sri Syed Mokhtar Al-Bukhary has an indirect stake of 42.97 per cent and 71.48 per cent stake in Tradewinds and TCB, respectively.

The proposed Menara Tun Razak 2 project, or MTR2, comprises a new eight-storey car park podium, a single-storey food court and a 31-storey "Grade A" office tower block above the car park podium.

The construction of the proposed MTR2 building is part of the redevelopment plan of the existing 36-storey MTR1 building together with a four-storey annex building.

The redevelopment will also entail the refurbishment of the MTR1 building facade and the demolition of the annex building where the proposed MTR2 building will be built.

The Tradewinds group is one of the largest food and commodity groups listed on the local stock exchange with subsidiaries ranging from Tradewinds Plantation Bhd, Padiberas Nasional Bhd and Mardec Bhd.

The group currently houses a staff of 400 at its headquarters at Menara HLA, which it has been tenanting for the past two years.

"The proposed acquisition will allow the group to own its own 'Grade A' MSC-compliant corporate tower with green building accreditation with gold plus level by BCA Green Mark (Singapore) which is strategically located within the vicinity of the commercial hub of KL city centre," Tradewinds said in its filing to Bursa Malaysia.

The proposed acquisition will also allow the company to consolidate and centralise its businses units as well as business functions to achieve greater operating efficiencies.

Out of the 31 floors of office space of the proposed MTR2 building, the group intends to occupy 10 floors and rent out the remaining floors.

This will allow it to save on rental and at the same time, generate additional income stream arising from the rental of unused office spaces.

The MTR2 is expected to be completed by early 2016.

By Business Times

Singapore tightens rules for developers

SINGAPORE: Singapore said yesterday it will tighten rules to ensure developers reflect the size and layout of apartments more accurately as part of new measures to protect buyers who are less familiar with the property market.

From May 18, developers of uncompleted apartments must give drawn-to-scale location plans to buyers and "provide breakdown of a unit's floor area by the various spaces such as bedrooms, balconies and bay windows", the Urban Redevelopment Authority (URA) said in a statement.

Other requirements include getting the consent of buyers before making changes such as adjustments to the layout.

URA is finalising changes to existing laws to ensure showflats depict the actual units accurately.

Private home sales in Singapore hit a new record in the first quarter of 2012 despite government efforts to cool the market and analysts are concerned authorities may take new steps to dampen sentiment.

The new measures may focus on small "shoebox" units that are popular with investors looking for higher returns, CIMB said in a report yesterday.

Banks in Singapore now pay as little as 0.05 per cent per year on deposits.

Common tactics by developers to make apartments look bigger include using furniture that is smaller than usual and not including some of the walls in showrooms.

By Reuters

LBS sells stakes in China projects

KUALA LUMPUR: LBS Group Bhd is selling its stakes in two companies involved in golf club operations and property development projects in Zhuhai, China for HK$1.65 billion (RM652 million).

Its wholly-owned Intellplace Holdings Ltd subsidiary yesterday signed a memorandum of understanding (MOU) for the sale and was signed with Jiuzhou Technology Co Ltd (JDX), a wholly-owned subsidiary of Jiuzhou Development Co Ltd (JDCL), which is listed on the Hong Kong Stock Exchange.

"The MOU provides for the parties to negotiate exclusively with each other and finalise the scope and terms of a sale and purchase agreement," LBS managing director Datuk Lim Hock San said in a statement yesterday.

The MOU will kick-start negotiations for JDX to acquire up to 100 per cent and not less than 60 per cent stake in Dragon Hill Corp Ltd, which is wholly owned by Intellplace.

Dragon Hill, through its subsidiaries, owns and operates the 36-hole Lakewood Golf Club and its adjoining property development project in Zhuhai.

By Business Times

LBS unit to sell stakes in firms to HK-listed company

PETALING JAYA: Intellplace Holdings Ltd, a wholly-owned unit of LBS Bina Group Bhd, yesterday signed a memorandum of understanding (MoU) for the sale of the group’s equity in two of its companies involved in golf club operations and property development projects in Zhuhai, China.

LBS managing director Datuk Lim Hock San said the MoU provided for the parties to negotiate exclusively with each other and finalise the scope and terms of a sale and purchase (S&P) agreement.

The MoU was signed with Jiuzhou Technology Co Ltd (JDX), a wholly-owned subsidiary of Jiuzhou Development Co Ltd (JDCL), which is listed on the Hong Kong Stock Exchange.

In a statement, LBS said the MoU would kick-start negotiations for JDX to acquire up to a 100% (but not less than 60%) stake in Dragon Hill Corp Ltd, a wholly-owned subsidiary of Intellplace. Dragon Hill, through its subsidiaries, owns and operates the 36-hole Lakewood Golf Club and its adjoining property development project in Zhuhai.

LBS said the proposed sale to JDX was worth up to HK$1.65bil and would be settled by payment in cash, equity shares in JDCL, convertible securities and/or other means to be mutually agreed by the parties.

In a note to Bursa Malaysia, LBS said that pursuant to the MoU, Intellplace had agreed to grant exclusive right of negotiation to JDX for a period of six months from the date of the MoU.

After the signing of the MoU, JDX will perform due diligence review on the legal, financial, accounting and business aspects of Dragon Hill, and the parties will discuss and negotiate on the terms of the proposed sale and purchase (S&P) with a view to signing a definitive agreement.

“The LBS board wishes to emphasise that the definitive agreement for the proposed disposal may or may not be entered into. Even if such agreement is entered into, whether or not the proposed disposal may proceed will be subject to all the relevant conditions precedent being fulfilled,” LBS added.

Responding to StarBiz queries on the potential uses of the proceeds, Lim said the company intended to “actively and aggressively increase its land bank”.

“We can expand our land bank not only through joint ventures, but also by purchasing land without affecting our borrowings. Our existing land bank of 2,300 acres can last us for about 10 years. Land is increasingly scarce and expensive, and with the extra cash, we can look for good land and have better bargaining power,” he added.

On the land being looked at, he said: “I see the Klang Valley, Johor and East Malaysia as having very good potential. The local property market still has big room for growth. Under the 10th Malaysia Plan, the population in the Klang Valley is expected to increase from six million now to 10 million in 2020.”

Lim said LBS might also invest in other project in China when good proposal cropped up.

He said part of the proceeds would be used to reduce the company’s borrowings which would strengthen its balance sheet.

“We will also consider declaring a special dividend to our shareholders. When we reap profit from the China project, whether via disposal or through profit distribution from the joint venture operations, we would like to share the fruits with our shareholders,” he added.

Lim said the proposed sale would be a win-win deal for the parties.

By The Star

KPJ, Naim Land ink hospital pact

Kumpulan Perubatan (Johor) Sdn Bhd has signed a joint-venture agreement with Naim Land Sdn Bhd to own a purpose-built hospital and later operate the hospital at Kuala Baram district in Miri.

Under the joint venture, Kumpulan Perubatan Johor, a wholly-owned subsidiary of KPJ Healthcare Bhd, will design, develop, build, complete and run the hospital.

Parent company, KPJ Healthcare, said Kumpulan Perubatan Johor, would operate through a joint-venture company, in which the latter would hold 70 per cent equity interest while Naim Land the remaining 30 per cent.

The joint venture was in line with the KPJ Healthcare and its subsidiaries' objectives to increase their hospital network to locations where private healthcare was in demand.

At the same time, it would leverage on KPJ's and Naim Land's capabilities to operate a private hospital and to lower KPJ's initial start-up costs, it said.

The joint-venture is expected to be fulfilled and completed by the first half of this year, said KPJ Healthcare in a statement today.

By Bernama

Proposal with minimal Govt funding favoured for high-speed KL-S'pore rail bids

Briefing by SPAD officials for media editors: From left SPAD chief development officer Azmi Abdul Aziz, SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal and SPAD chief operating officer Azhar Ahmad - Starpic by AZLINA BT ABDULLAH .

PETALING JAYA: The private sector will be invited to come out with a proposal that requires minimal Government funding for the development of the high-speed rail (HSR) project linking Kuala Lumpur and Singapore if the project gets the green light.

Land Public Transport Commission (SPAD) chief executive officer Mohd Nur Ismal Mohamed Kamal said if the project received the go-ahead from the Government, the authorities would favour a proposal from private parties that would involve the smallest amount of financial assistance from the Government.

“But we also know that a rail project can seldom sustain itself financially. No operator can bear the cost of infrastructure, land acquisition, signalling system and rolling stock from the collection of fares alone as it will never pay for itself.

“Rail projects will require some forms of assistance from the Government, but we are looking at the least form of assistance,” he told the press at an editors’ briefing on SPAD’s plan and key projects yesterday,

Ismal said the HSR project was now in the second phase of a feasibility study that looked into the actual corridors and alignment. This is expected to be completed by year-end.

“This study will provide a more detailed economic impact of the HSR and its engineering challenges,” he said.

He said this time around, the HSR study would be more comprehensive in looking at matters that largely revolved around national interest in contrary with previous HSR proposals that came from the private sector.

It was reported that the idea on the HSR came from Performance Management and Delivery Unit laboratory.

On the comparison with KTMB services when its double-tracking is completed, Ismal said the KTMB services would cater to the mass market and freight transportation, while the HSR was targeted at the high and middle-income markets.

SPAD was also in the midst of finalising plans for the Bus Rapid Transit (BRT) project for the Klang Valley, which should draw interest from construction companies because it entails building extra bus lanes in the city centre.

“We have already embarked on the traffic impact assessment study, which is expected to be completed by year-end and we plan to start physical work early next year.

“The project will take 12 to 18 months to be completed and will be fully funded by the Government. It will have to go through an open tender procurement process,” he said.

On the Rapid Transit System project, which links Johor Baru and Singapore, Ismal said: “The project will be funded by both Malaysia and Singapore. As of now, the tender for consultancy services for the alignment and design of the project is closed,” he said.

These three projects were part of SPAD’s 50 priority projects from a total of more than 200 projects that has already gained traction or will begin this year.

“The development of the 50 projects is on-going. Some of the projects are still in the concept stage and haven’t obtained the commitment from the Government.

“But, we are pushing forward the projects for the development of public transport. We are doing our best to convince the Government that in certain cases that are no other available options but to put in the infrastructure,” he said.

On the mass rapid transit, Ismal said the study for the second and third lines would start early next month.

By The Star