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Wednesday, July 4, 2012

Harrods Hotel to open in KL

From left: Dr Hussain, Tourism Minister Datuk Seri Ng Yen Yen and Jerantas representative Tan Sri Abdul Aziz Ismail viewing a model of the project.

It is part of a RM2bil tie-up between Qatar Holding and Jerantas

KUALA LUMPUR: Malaysia could be home to the world's first Harrods Hotel if everything goes according to plan under a RM2bil collaboration between Qatar Holding LLC and Jerantas Sdn Bhd.

The project, located on a 5.48-acre land between Jalan Raja Chulan and Jalan Conlay, would be one of the world's first three Harrods Hotel chain to be built. The other two on the drawing board would be in London and Italy.

Qatar Holding vice-chairman Dr Hussain Ali Al-Abdulla said the Malaysia Harrods Hotel should be the first to complete, with the London hotel completed slightly later.

The project would be built on two parcels of land where Chulan Square and Sri Melayu Restaurant are sitting. The land was acquired by Jerantas from the Government for 1,800 per sq ft or RM429.68mil.

The development would be a one-structure building housing the seven-star hotel, serviced apartments and some retail space. The hotel is designed to have 250 to 300 rooms but the capacity of the serviced apartment has not been decided.

Both Qatar Holding and Jerantas will fund the project evenly, with construction work slated to commence a year from now.

Jerantas, which would be the sole developer, said the existing structures would be taken down within a year and the occupants would be notified.

Qatar Holding and Jerantas has signed a memorandum of understanding to study the potential development of the hotel, with both expressing confidence in the project.

Hussain said at the signing: “We have done our due diligence and don't think we will do any more study. We will execute.”

On the pricing of the serviced apartments, Hussain said it would “definitely be higher than Banyan Tree Residences but (the specific price) depends on the market”.

“We are looking to invest more in Malaysia because we believe the local economy will grow over the next two years at around 5% (per year),” encouraged by political stability and strengthening ringgit, he said.

“We will continue to invest in hotels because Malaysia is a good destination for tourism, with a lot of things to offer,” he added.

Hussain said that apart from hotels and shopping centres, Qatar Holding is interested to invest more in natural resources in Malaysia, having been the cornerstone investor in Felda Global Ventures Holdings Bhd with US$100mil.

Jerantas is a joint-venture company set up by PS Trading Sdn Bhd (34%) and Gagasan Simfoni Sdn Bhd (66%). PS Trading is a wholly-owned subsidiary of Tradewinds Corp Bhd.

Tradewinds, which holds the Harrods retail franchise in Malaysia, had indicated in its 2008 annual report that it planned to work with Harrods on hotel, residential and commercial projects.

Qatar Holding, which owns the rights to the Harrods brand, will have an equity participation in the project through its shareholding in Gagasan Simfoni.

In a statement, Qatar Holding said the development was part of its strategy to grow the Harrods brand and expand the group's portfolio by opening Harrods hotels in key cities like Kuala Lumpur, New York and Paris as well as in China.

“Preference will be given to construct on sites already owned by Qatar Holding or its affiliates, for example at Chelsea Barracks in London or Costa Smeralda in Sardinia (Italy),” it said.

By The Star

Two restaurants to make way for Harrods Hotel

KUALA LUMPUR: Two popular dining joints in the popular Bukit Bintang shopping zone here, will be making way for Asia's first Harrods Hotel and Residence.

The RM2 billion project will be located on the site of Chulan Square Restaurant in Jalan Raja Chulan and Restoran Seri Melayu in Jalan Conlay.

The Harrods Group portfolio is owned by Qatar Holding LLC, a unit of the Qatar Investment Authority.

In Malaysia, Tradewinds Corp Bhd (TCB) owns the franchise for the Harrods brand of products.

Qatar Holding vice-chairman Dr Hussain Ali Al-Abdulla said its objective was to open hotels in London, Sardinia in Italy and Kuala Lumpur.

"We have done the due diligence and will execute the projects. We are building Harrods hotels, Harrods apartments and retail units. The project here will cost RM2 billion."

Dr Hussain said the opening of the Harrods Hotel in London would be at around the same time as the one here, making it possible for Kuala Lumpur to host the world's first Harrods Hotel.

The Harrods Hotel here could be ready as early as 2016 if construction starts next year as planned.

The luxury hotel will boast of between 250 and 300 rooms and a residential component as well as retail.

Dr Hussain said the residential component would be sold at a higher price than that of the Pavilion Banyan Tree and Banyan Tree Residences, which is understood to be going for about RM2,000 per sq ft.

Dr Hussain said this at the signing ceremony yesterday between Qatar Holding and the sole developer of the property, Jerantas Sdn Bhd.

Both Qatar Holding and Jerantas will plough in an equal amount into the project.

Meanwhile, Ooi Ah Heong, the adviser for the development, said the hotel cum residences would be built on a 2.22ha site, which was bought for RM1,800 per sq ft, or roughly RM430 million.

Restoran Seri Melayu, which is owned by Amcorp Group Bhd, sits on land leased from Lembaga Kraftangan Malaysia.

Lembaga Kraftangan comes under the Information, Communications and Culture Ministry and acts as the custodian for the Federal Lands Commissioner.

It is understood that the land was tendered for sale by the government last year.

Ooi said the tenants had yet to be notified to vacate the land.

The land is now owned by Jerantas, which is a 34:66 joint venture between PS Trading Sdn Bhd (a wholly-owned unit of Tradewinds Corp Bhd) and Gagasan Simfoni Sdn Bhd.

Qatar Holding has an interest in Jerantas via Gagasan Simfoni.

Ooi, who is also a director of Pavilion Reit Management Sdn Bhd, said the opening of Raffles Hotels & Resorts within Pavilion Mall, here, was no longer possible.

By Business Times

Qatar to build Harrods hotel in Malaysia

Gas-rich Qatar’s sovereign wealth fund plans to build luxury hotels in Malaysia, Paris, London and China named after Harrods, the world’s famous department store, a report said today.

Under a US$636 million plan Qatar Holding will partner a local Malaysian firm Jerantas to construct a hotel in Kuala Lumpur’s golden triangle’s shopping district of Bukit Bintang.

Construction work is expected to begin next year on the development, which will comprise up to 300 hotel rooms, apartments and retail space covering a 5.5-acre (2.2 hectare) site, the Star newspaper said.

“We are looking to invest more in Malaysia because we believe the local economy will grow over the next two years at around 5.0 per cent,” Qatar Holding vice-chairman Hussain Ali al-Abdulla said.

Besides London where a Harrods hotel would be opened, Qatar Holding said:

“The target plan is to open Harrods hotels in key cities such as Kuala Lumpur, New York and Paris as well as China.

“Preference will be given to construct on sites already owned by Qatar Holding... for example at Chelsea Barracks in London or Costa Smeralda in Sardinia,” it said in a statement Tuesday.

Qatar Holding bought Harrods in 2010 and plans to establish a hotel management company to conduct feasibility studies as part of a decision-making process to select suitable sites around the world for development of Harrods hotel properties.

“Qatar Holding ultimately intends to grow Harrods into a global enterprise that defines the luxury retail and leisure sectors,” it said.

Egyptian-born businessman Mohamed al-Fayed previously owned the popular London department store.

In April SWF declared assets under management had far exceeded US$100 billion.

It was one of the high-powered cornerstone investors in the recent listing of Malaysian palm oil giant Felda Global, the world’s second-largest IPO this year.

Qatar, a member of the oil cartel OPEC, celebrated in 2011 raising its production capacity of LNG to 77 million tonnes annually, boosting its position as the world’s largest producer. It pumps some 800,000 barrels per day of oil.


More hotels in key cities

KUALA LUMPUR: Qatar Holding LLC, as owners of the Harrods brand, plans to expand the Harrods Group portfolio in key cities.

This includes the opening of Harrods-branded hotels in London and other prime locations worldwide.

"The plan is to open Harrods hotels in key cities, such as Kuala Lumpur, New York and Paris as well as in China. Preferences will be given to sites already owned by Qatar Holding or its affiliates, for example at Chelsea Barracks in London or Costa Smeralda in Sardinia," Qatar Holding said a statement yesterday.

Qatar Holding will set up a hotel management company to conduct full market and feasibility studies before selecting suitable sites for the Harrods hotels.

The group ultimately intends to grow Harrods into a global enterprise that defines the luxury retail and leisure sectors.

By Business Times

HDB flat prices up again in Q2

Upward swing: The Punggol Residences HDB BTO apartment blocks under construction This resurgence in prices comes on the back of a downward trend in the two previous quarters. – The Straits Times/ Asian News Network

SINGAPORE: Resale HDB flat prices have inched upwards yet again, this time by 1.3% in the second quarter of this year, according to the Housing Board’s flash estimates released on Monday.

This resurgence comes on the back of a downward trend in the two previous quarters.

The percentage increase in the fourth quarter of last year, and the first quarter of this year were 1.7% and 0.6% respectively.

A more detailed release, said the HDB, would be out on July 27.

The agency has committed to offer 25,000 Build-To-Order flats this year, and has launched more than 15,000 flats in the first quarter alone.

There will be 5,200 more flats launched this month, and will be in areas such as Bedok, Bukit Merah, Choa Chu Kang, Clementi, Geylang and Punggol.

On the private homes front, estimates released by the Urban Redevelopment Authority (URA) on Monday showed that prices have risen by 0.4% in the second quarter of this year.

Non-landed private home prices increased by 0.6%, while prices for properties outside the central region went up by a more moderate 0.4%.

There was no change in the prices in the rest of the central region.

The latest price increase is a reversal of last quarter’s price decrease of 0.1% , the first quarterly price fall since Q2 of 2009.

More detailed data will be revealed on July 27 when URA releases the full second quarter real estate statistics.

By The Straits Times / Asian News Network

Jetson unit teams up with Fortress Effect

KUALA LUMPUR: Kumpulan Jetson Bhd has entered into a heads of agreement with Fortress Effect Sdn Bhd for the joint development of a luxury residential development project.

In a filing with Bursa Malaysia, Kumpulan Jetson said the project, known as The Macalister, would be developed on three pieces of freehold land in George Town, Penang.

Meanwhile, China-based Everbright International Engineering Sdn Bhd was appointed the designated contractor to undertake the construction and completion of the project. “Everbright International Engineering will participate in the project on a joint venture basis,” Kumpulan Jetson said.

Kumpulan Jetson’s entitlement under the proposed joint development shall be 30% of the gross development value, while Fortress Effect takes 70%.

By Bernama

SP Setia’s Viet project cancelled

KUALA LUMPUR: SP Setia Bhd's proposed 32ha property development project in Vietnam has been cancelled, the company told Bursa Malaysia in a filing yesterday.

It said that the condition precedent (CP) set out in the cooperation agreement between Setia Saigon East Ltd and Saigon Hi-Tech Park Development Co were not met by yesterday, which was the expiry date of an already extended CP fulfilment period.

The termination is mutual, SP Setia said, but added that the group is still positive on the property development prospects in Vietnam.

By Business Times

REITs stand to gain, defensive qualities will shine in current trying times

PETALING JAYA: Real estate investment trusts (REITs), which focus on higher-than-market average yields, will stand out in the current uncertain economic and market environment due to their defensive qualities.

The impending listing of IGB REIT and KLCC Property Holdings Bhd's planned REIT could potentially raise investor attention to a sector otherwise viewed as a low-beta proxy to the economy.

Analysts contacted by StarBiz said they did not discount the possibility of eventual increased attention on REITs, saying that this could be a prelude to a re-rating for the sector.

“These two REITs are huge in terms of potential flotation volume and market capitalisation. For IGB REIT, its asset valuation of RM4.6bil will make it the largest retail REIT to date,” RHB Research Institute's REIT analyst Loong Kok Wen said over the telephone.

Loong said the huge asset base due to high liquidity in the financial system would also attract the attention of institutional investors.

“This is a good opportunity to buy into such initial public offering REITs amid the sustained global uncertainties,” he added.

Loong noted that interest in REITs was currently high and this could be sustained, moving forward, should global uncertainties persist.

“There has been a lot of attention lately on consumer-based dividend-paying stocks and their prices have been going up.

“It is the same for REITs their asset revaluation had seen increased prices on the backdrop of high liquidity in the economic system,” Loong added.

A property analyst with TA Research said the other qualities of REITs that would be appreciated by investors in these volatile times were their dividend yielding nature compared with other fixed-income securities.

“I am positive about retail REITs as their dividends are stable because these cash stream comes from their rents.

“Retailers are resilient amid booming economies in the East. And locally, consumers here are always shopping and buying goods during the weekends,” the analyst said.

However, the analyst noted that while REIT yields had declined slightly from the past, one could still find yields as high as 8%.

Yields today still offer 2%-3% premium over fixed-deposit (FD) rates.

“For example, if I am a person with a lot of money, I would like to diversify my returns and risk. So REIT is the next best alternative after FD.

“Today, we are also looking at richer valuations for REIT stocks,” the analyst said.

In a report, Hong Leong Investment Bank said foreign funds and investors were continuing to show strong interest in Malaysian retail assets due to their attractive yields and pricing.

“The retail segment is blessed with a highly favourable macroeconomic backdrop sustained consumption theme in Malaysia, rising disposable income and discretionary spending, high consumer confidence, strong employment market (and) the tourism boom of Malaysia,” Hong Leong's REIT analyst Sean Lim wrote in the report.

By The Star

Ho Hup and Malton settle out of court

PETALING JAYA: Ho Hup Construction Co Bhd and its 70%-owned Bukit Jalil Development Sdn Bhd (BJD) have agreed to discontinue their appeal to the Federal Court and have opted to settle out of court with Pioneer Haven Sdn Bhd, a subsidiary of property developer Malton Bhd.

Ho Hup was previously trying to invalidate the joint development agreement (JDA) signed between the two parties on 60 acres in Bukit Jalil.

In a statement issued to Bursa Malaysia, Ho Hup executive director Derek Wong said: “The board of directors is of the view that the amicable settlement reached through a variation of the original terms of the JDA was for the mutual interest and benefit for all parties.”

Ho Hup said the settlement comprised two key variations to the JDA, developed more than two years ago on March 16, 2010. Under the variations, the joint development would now be on 50 acres instead of the 60 acres agreed upon in the previous JDA. The other 10 acres would be developed solely by BJD.

Out of the 10 acres, 5.9 acres had been approved based on a plot ratio of 3.09 and would comprise an office tower and shop-offices. The remaining 4.1 acres were earmarked for highrise residential units.

BJD would also be entitled to 18% instead of 17% of the estimated gross development value, which was subject to a minimum of RM220mil.

In addition to that, Pioneer Haven have agreed to pay for and on behalf of BJD and Ho Hup towards the servicing of monthly interests and the redemption of the secured loan of RM75mil from Insas Credit & Leasing Sdn Bhd and the payments would be treated as an advance of part of BJD's entitlement. Pioneer Haven has also agreed to assist BJD in securing bank financing of up to RM20mil to develop BJD's land.

The company said Pioneer Haven would then be entitled to restrict the land as security for the refinancing and indebtedness to Insas Credit & Leasing Sdn Bhd as well as to partly finance the development cost of the joint-venture land.

Ho Hup executive director Derek Wong had said earlier that the company would focus on expanding its ready-mix concrete operations and reviving its construction arm. The company is in the midst of bidding for a few medium-size Economic Transformation Programme-related construction jobs.

He added that the company was looking at developing properties in the Klang Valley and Johor on a joint-venture basis.

By The Star