Breaking new ground with The Atmosphere

Artist impression of an aerial view of phase 2E or Lava, of The Atmosphere in Seri Kembangan.

The Atmosphere sets a new benchmark for commercial developments in Seri Kembangan, Selangor with its unique hybrid “shopping mall” design for its 20.1-acre commercial centre, says Tempo Properties Sdn Bhd chief executive officer Khoo Boo Hian.

This commercial centre is the second phase of The Atmosphere, which aims to integrate leisure, retail and office elements in a central hub.

“They are shopoffices but the commercial centre looks and feels like a shopping mall. This hybrid design is unique in Malaysia,” says Khoo.

Khoo: ‘The biggest headache for a commercial development is the car park’.

Khoo points out that the unique design of the commercial centre has resulted in “two ground floors”, with an elevated and landscaped boulevard on the second storey.

“With four-storey shopoffice blocks, usually the top two stories don't carry a lot of value. But with our boulevard level, the third level also becomes a ground floor. People come up to the boulevard level using the escalator, and they can patronise the shops.”

Beneath the boulevard level are two levels of covered car park bays, and it was this design element that led to the creation of the “two ground floors” for the centre.

“The biggest headache for a commercial development is the car park. We were toying around with the idea of a dedicated car park block, which is very inconvenient for people. So we spoke to the architects and authorities. We said ... can we have a situation where we do away with the back lane? So, we covered the back lane. That was how the boulevard level was conceptualised.”

Khoo says this also means patrons of the centre benefit from the covered car park and the open courtyard design with space for events.

Highlights of The Atmosphere's commercial centre include a 1.4-acre public park, covered walkways, public toilets, sheltered boulevards, alfresco plazas, open lawns, an open courtyard design for events, and high ceilings for retail outlets, 22 to 28-feet wide shop frontage as well as the spacious 20 to 30 feet wide walkways.

There are 1,600 covered and open-air car park bays. Areas in the commercial centre are inter-linked via covered walkways, escalators and lifts.

“You can walk from one end to the other without getting wet,” says Khoo.

The Atmosphere's commercial centre, with a gross development value (GDV) of RM370mil, was launched in 2009.

Unit prices ranged from RM1mil to RM4.5mil, and the average selling price was RM300 per sq ft.

Khoo says the 136 units in the earlier launches were sold out, and the final launch (phase 2E or Lava) has a 70% take-up rate.

“Investors have benefited in terms of capital appreciation as the units that have been handed over were sold on the secondary market with almost 100% appreciation in price.”

Phase 2E, which will consist of 54 retail and office units, is expected to be completed by end-2013.

Khoo also points out that phase 2E has a “three ground floors” concept with raised courtyard plazas.

The project also won the category of Best Mixed Use Development in the Asia Pacific region (including 5 stars for Malaysia) in the 2011 Asia Pacific Property Awards 2011 (in association with Bloomberg Television).

It is also the first commercial development in the South Klang Valley to be Green Mark certified by Singapore's BCA (Building and Construction Authority).

Khoo says this will translate into lower water and energy bills and maintenance cost, as well as an enhanced work environment.

“To get the Green Mark certification, we have features like heat reflective polycarbonate roofing from Korea to cover the boulevards, water and electricity saving fixtures and fittings, and reflective glass for the shop offices. Together with disabled-friendly features such as wheelchair ramps and tactile tiles, we spent an extra RM1.5mil. But we felt that it was necessary to enhance this development rather than just building another high-density commercial area.”

Khoo says the commercial centre is a strata-title development, “so investors pay some management fees but they get 24-hour security and tip-top maintenance.”

The Atmosphere has three phases of development, with the first phase being a Giant hypermarket on a nine-acre site.

“The Giant Hypermarket chain bought the land in 2008 for about RM30mil. The hypermarket opened two years ago,” says Khoo.

Another 6.1ha remains to be developed as the third phase on the 53-acre site of The Atmosphere, and Khoo says various options are being planned.

“We are looking at close to a GDV of RM1bil eventually for the 53-acre site,” says Khoo.

Khoo also points out that The Atmosphere is strategically located near to areas such as Prima Tropika, Alam Santuary, 16 Sierra, D'Alpinia, Taman Putra Permai and Taman Equine.

“We are in the heart of the Golden Triangle of South Klang Valley with Puchong, Putrajaya and Seri Kembangan forming the axis.” He says Seri Kembangan is a rapidly growing property hotspot, with high demand for commercial zones.

Khoo cites a Spectrum Research Asia report that last year said the residential population of Seri Kembangan within a 20-minute drive time zone was 1.6 million people.

The project is developed by The Atmosphere Sdn Bhd, a joint venture company that is 60% owned by Eksons Corp Bhd, with the remainder owned by Tempo Properties.

Eksons Corp, which is listed on the Main Market of Bursa Malaysia, is one of the largest manufacturers of tropical thin plywood in the Asia Pacific region.

Tempo Properties provides project management support and expertise.

Being different

Khoo says Tempo Properties is a boutique property developer that aims to create a win-win situation for investors, business owners and patrons in commercial developments such as The Atmosphere.

“We aim to provide investors with something that they don't know they want. We think differently.”

He points out that prices for units at The Atmosphere was the highest for commercial developments in the area.

“Our intention was to set ourselves apart, and come up with something that is unique.”

Tempo Properties has its roots in Yoon Hin Sdn Bhd which is a rice wholesaler in Seremban, Negeri Sembilan.

Yoon Hin diversified into property development by setting up Tempo Properties in 1995, and its first project was developing the 48-acre Taman Cenggal Utama near the Seremban International Golf Club in 1997.

Taman Cenggal Utama consisted of 492 units of residential houses and shoplots, and 179 units of low-cost flats.

It was completed at end-2003, and generated sales of RM65mil.

Meanwhile, in the heart of Seremban town, Tempo Properties recently completed the Medan Suria commercial development which consists of 34 units of three and four storey shop offices that generated RM27.5mil in sales revenue.

“With Medan Suria, we became the first developer in Seremban that does not have a back lane for our shops.”

“It took a lot of convincing to get approval from the authorities. Usually, shops have a back lane for rubbish collection. Our reasoning was - in shopping centres, you have food and beverage outlets without any issue. So, why do you need to have a back lane for shops? The project was well taken up, and the authorities were happy with the design.”

It should also be noted that The Atmosphere is adjacent to the 60-acre Taman Prima Tropika residential development, which was Tempo Properties' first foray in Selangor.

Khoo says 470 units of double-storey terrace houses and two-and-a-half storey terrace houses with a GDV of RM180mil have been built in Taman Prima Tropika.

These were launched from 2004 onwards at prices ranging from RM229,000 to RM379,000.

There are 4 ha left for development in Taman Prima Tropika.

Khoo says Eksons Corp and Tempo Properties have another joint venture company, namely Oval Rock Sdn Bhd for property acquisition and development.

Oval Rock is also 60% owned by Eksons Corp, with the balance held by Tempo Properties.

In January this year, Eksons Corp told Bursa Malaysia that Oval Rock had entered into an agreement with Azam Hartamas Sdn Bhd to acquire 22.7ha of leasehold land at Jalan Gombak, Setapak in Selangor for RM17.1mil.

“We might start a mixed development in Gombak in the third quarter of next year. We are also in discussions with a land owner in Cheras for eight acres,” says Khoo.

By The Star

Largest Mitsui Outlet Park to be built in KLIA

MALAYSIA Airports Holdings Bhd (MAHB) and Mitsui Fudosan Co Ltd will build the first upscale Japan factory outlet in Southeast Asia at the Kuala Lumpur International Airport in Sepang.

To be known as Mitsui Outlet Park KLIA, it will be built on a 20.25ha site, complete with F&B and entertainment facilities as its complementary components are based on strong themed attractions such as Knowledge and Attractions, Prime Time Complex and World Food Expo.

The park, the first Mitsui Outlet Park in Southeast Asia and 14th for Mitsui, will be developed over three phases at an estimated gross development cost of about RM335 million.

It will boast a total lettable area of about 47,000 square meters upon full completion, thus positioning the outlet park as the largest within Mitsui's stable of outlet parks.

The first phase of development is expected to begin within the first quarter of next year and is expected to open its doors to the public by end of 2014.

"The outlet park will offer a wide selection of leading brands including luxury brands, popular select shops, high grade and top Asian fashion, sports and outdoor items, fashion accessories and gifts at prices that are guaranteed to be below their recommended retail prices," MAHB said yesterday.

More than 240 famous international designer brands will be invited based on their presence in existing Mitsui Outlet Parks in Japan and China.

It will also offer top Asian fashion from Japan, South Korea, Hong Kong and Malaysia, thus setting it apart from the other retail centres in Malaysia in terms of breadth of brand diversity, it added.

Mitsui, a leading real estate developer in Japan, has been established since 1941 with global operations in the US, UK, Singapore and China.

It is mainly engaged in the development of shopping centres, hotels and office complexes.

The two companies signed a memorandum of understanding on the project yetserday.

"One of the most important benefits from this project is the opportunity to further expand our non-aeronautical or commercial revenue base, in line with our '2010-2014 Business Direction: Runway to Success'," MAHB managing director Tan Sri Bashir Ahmad said.

By Business Times

Higher prices with heritage status

The Coffee Atelier, comprising 5 prewar buildings at Stewart Lane.

HERITAGE properties in Penang are now selling for RM600-RM1,200 per sq ft, depending on the historical and architectural characteristics of the property, the size and location.

Henry Butcher Malaysia (Penang) vice-president Shawn Ong says that prior to George Town's listing as a Unesco World Heritage Site (WHS) in 2008, the properties were selling from between RM300 and RM600 per sq ft.

“In view of the limited units of pre-war properties available in Penang, pre-war buildings with unique characteristics are generally attracting a lot of buying interest.

“Therefore, it is quite common for pre-war buildings available for sale being snapped up by investors, pushing up the selling price.

“The majority of buyers are Malaysians contrary to perception that more foreigners than Malaysians buy pre-war properties.

“A notable recent transaction is the sale of 30 units of pre-war shophouses in Nagore Road, George Town to investors,” he says.

According to Ong, the rentals of pre-war buildings of larger size in George Town's prime zones generally fetch RM10,000 to RM20,000 per month, compared to between RM5,000 and RM8,000 before George Town's Unesco WHS status.

“Locations such as Armenian Street, Stewart Lane, Chulia Street, Love Lane, and Muntri Street, due to their proximity to Little India and Khoo Kongsi, are among the most sought-after areas for heritage properties in George Town,” Ong adds.

The selling price of heritage properties in Penang has risen by about 10% this year compared with 2011, according to Ong.

According to Henry Butcher's Penang Real Estate Market Report, the total number of pre-war buildings within the conservation area of George Town Unesco WHS is 4,665, with 2,344 units at the core zone and 2,321 units at the buffer zone.

The core zone covers 109.4 ha bounded by the Straits of Malacca on the north-eastern tip of the island, Love Lane to the north-west, and Malay Street Ghaut and Dr Lim Chwee Leong Road to the south-west corner.

The core zone is protected by a 150-ha buffer zone bounded by Dr Lim Chwee Leong Road to the south-west and Transfer Road to the north-west.

According to PPC International Sdn Bhd director Mark Saw, the number of heritage property transactions for Penang in 2011 was 228, compared with 211 in 2010.

“Most of these properties were for double-storey pre-war houses in the north-east district of the island.

“Those with the foresight to invest in heritage properties before George Town received the WHS status would see the value of their properties increased substantially today.

“In the market presently, there are large-size heritage properties in inner George Town selling for more than RM10mil,” he says.

One such heritage building in inner George Town with a built-up and land area of 10,000 sq ft and 5,762 sq ft respectively is the No. 25 China Street, a double-storey property built in 1846 by Kapitan Chung Keng Kwee.

Malaysian-born David Wilkinson, who owns the property, says he bought the property in 2005 and spent over RM2mil to restore the building, which took about two years.

“It is the largest property on China Street as the building is equivalent to three shophouses. The property is being used as a private residence, but has the potential for commercial usage as a special heritage museum,” he says.

Another sizable heritage property in inner George Town that has seen its value rise substantially since 2008 is the row of five pre-war houses on Stewart Lane now collectively known as Coffee Atelier, comprising a coffee house cum restaurant, museum, art gallery and four hotel rooms owned by Stefan Gehrig and his wife Lorina.

Stefan says he purchased the five properties, which had a total built-up area of 8,160 sq ft and land area of 4,800 sq ft, for RM3.5mil in 2010.

He adds that he had recently received an offer of RM6mil for the properties.

“The five unique heritage properties were built in 1927 and were called shophouses because the original inhabitants carried out their trades on the ground floor, and lived with their families on the upper floors.

“One of these shophouses was once a coffee merchant's workshop in 1988.

“The name Coffee Atelier' derives from this element of the building's history and celebrates the memory of this artisanal trade from a bygone era,” he says.

By The Star

MK Land to launch luxury hilltop projects in prime sites

KUALA LUMPUR: MK Land Holdings Bhd is upbeat on the real estate market and is planning to launch exclusive hilltop developments and commercial projects in prime locations to meet demand, its key official said.

According to group chief executive officer Lau Shu Chuan, the hilltop developments will feature luxury bungalows and town villas.

MK Land currently has nine projects in Selangor, Perak and Kedah.

Its flagship project is Bandar Damansara Perdana, a 303.5ha township development in Petaling Jaya, comprising landed commercial and residential properties.

The Damansara Perdana project is expected to take another 10 years to be completed and is destined to be a premier centre for business and living in Petaling Jaya.

Lau said Damansara Perdana is currently one of the biggest developments in Petaling Jaya, with sales of RM2.82 billion derived from the launch of condominiums, high-end apartments, a range of commercial buildings and semi-detached bungalows.

MK Land is planning to launch new phases at Damansara Perdana, Lau said after handing over keys to its buyers for its The Rafflesia @ Park project last week.

The new phases include The Rafflesia @ Hills and The Rafflesia @ Peak, featuring semi-detached bungalows, he added.

The Rafflesia @ Park, meanwhile, is a residential project with prices ranging from RM2.6 million. Lau said the development is expected to be completed by June 2014.

MK Land is offering a five per cent discount to buyers, with no legal fees on SPA and loan documentation.

By Business Times

Menara Binjai wins sustainability award

KUALA LUMPUR: Menara Binjai has emerged as the first Malaysian building to win the Cityscape Awards for Emerging Markets 2012 for the Best Sustainable Development Award (Built).

Designed by award-winning Malaysian firm Veritas Architects, Menara Binjai, clinched the top spot in the coveted sustainability category, beating two other finalists; the award-winning UAE Pavilion in Abu Dhabi by Tourism Development and Investment Corp and Masdar Institute of Science and Technology (M.I.S.T) by MASDAR. Both buildings are designed by Foster and Partners of the UK.

The award ceremony was held on October 3 in Dubai.

Chua Guan-Hock, a director of the developer Khor Joo Saik Sdn Bhd attributed the win to the board and consultants who worked hard as a team.

"This award is extremely meaningful and a stamp of approval of the tower's outstanding sustainability, as a market leader in Malaysia and the Asia Pacific region. Competing and winning against outstanding developments adds to the satisfaction of this acknowledgement," Chua said.

Menara Binjai, a 35-storey green office tower, located right next to Ampang LRT station, is the first dedicated officer tower in Malaysia to be awarded dual green certification - Malaysia's Green Building Index Design Assessment for GBI Certification and a Green Mark Gold CerPficaPon (Provisional) by Singapore's Building and Construction Authority.

The office tower was completed in July 2012 and new tenants, which include the British High Commission have already begun moving in.

Menara Binjai's energy-efficient operations through the materials used and features allow up to 25 per cent savings on electricity and air-conditioning consumption.

Cityscape Awards reward excellence and celebrate outstanding performance in real estate and architectural design across emerging markets globally.

Regions and countries considered emerging markets are Asia Pacific (excluding Japan, New Zealand and Australia), Middle East, Turkey, Russia, Africa and Latin America.

By Business Times

Sunway on track for RM1.3bil sales

Artist impression of the Sunway Wellesley Phase 1, which consists of 31 units of three-storey shop offices.

SUNWAY Bhd's property development division is on track to achieve its targeted sales of RM1.3bil this year.

The property development and construction group has done RM1bil in property sales to date, says managing director of property development division (Malaysia) Ho Hon Sang.

The major drivers of Sunway's property sales this year include new phases at Sunway South Quay in Bandar Sunway, and Sunway Velocity in Kuala Lumpur.

Ho: ‘Diversification means mitigated impact and warranted performance.’

Ho points out that the group's recent commercial property offerings Sunway Geo @ Sunway South Quay, Sunway Velocity's Phase 3C1 and Sunway Wellesley Phase 1 in Penang had recorded take-up rates of more than 80% during previews.

The gross development value (GDV) of these projects' phases is RM700mil.

“Besides the strategic locations, these developments are well-planned, with good facilities, infrastructure, security features and incorporate great concepts. They have great potential for excellent capital appreciation,” says Ho.

Ho says the recent preview of Sunway Geo's 31 units of retail shops and 220 units of flexi suites, priced at RM7mil and RM400,000 onwards per unit respectively, has received overwhelming response. “The shops recorded take-ups of more than 80%.”

The retail shops are sized at 4,975 sq ft onwards while the flexi suites are sized at 462 sq ft onwards. They have a combined GDV of RM400mil.

Sunway Geo will benefit from the proposed elevated Bus Rapid Transit-Sunway Line.

Sunway Geo is a 23.4-acre mixed development consisting of retail shops, flexi and office suites, serviced apartments and condominiums. It is located next to the award-winning Sunway Resort City, which was recently certified as Malaysia's first green township by the Green Building Index.

Sunway Resort City is home to 200,000 residents and 33,000 students. It welcomes 36 million visitors yearly.

Sunway Geo is an enhanced version of the group's successful retail concept at Sunway Giza and Sunway Nexis located in Dataran Sunway (Kota Damansara), which featured a covered central boulevard and vibrant alfresco food and beverage dining concept.

Ho says the success of Sunway Geo was due to its innovative retail concept, accessibility and connectivity.

It also enjoys a large catchment pool due to its proximity to Sunway Resort City with amenities such as Sunway University, Monash University, Sunway International School, Sunway Medical Centre, Sunway Pyramid, Sunway Lagoon and Sunway Resort Hotel and Spa.

“Access routes are available from Sunway South Quay to Sunway Resort City amenities. These are via free shuttle-bus service, pedestrian-friendly walkways and elevated canopy walk.”

Sunway Geo is also expected to benefit from the proposed elevated Bus Rapid Transit (BRT) Sunway Line that will run through the township and connect to Setia Jaya KTM Komuter station and an upcoming light rail transit (LRT) station at USJ, Subang Jaya.

Meanwhile, strong sales were also seen recently for Sunway Velocity's Phase 3C1, which consists of 276 designer offices and 12 retail shops priced from RM537,000 and RM3mil respectively.

The retail shops are sized from 2,244 to 4,268 sq ft while the office units are sized from 678 to 1,297 sq ft. They have a combined GDV of RM251mil.

Sunway Velocity is a freehold 23-acre integrated development that is located 3.8km from Kuala Lumpur City Centre. It will feature an integration of five elements retail, office, residence, boulevard and garden.

Sunway Velocity is also planned with a one-million-sq-ft lifestyle shopping mall that will be managed by the group. The development is bordering Jalan Peel, Jalan Cheras and Jalan Shelly, and is reachable via Jalan Tun Razak, Jalan Loke Yew and Jalan Pudu.

It will benefit from two upcoming MyRapid Transit (Cochrane and Maluri) and two existing LRT stations (Maluri and Chan Sow Lin).

Ho also says there was strong response to Sunway Wellesley Phase 1, which consists of 31 units of three-storey shop offices priced from RM972,000.

The 60-acre Sunway Wellesley is surrounded by the Jit Sin Independent High School, AEON Seberang Prai City shopping centre, KPJ Penang Specialist Hospital and Bukit Mertajam High School.

It enjoys accessibility to North-South Expressway, Butterworth-Kulim Expressway and the Penang Bridge and is located within half a kilometre from Bukit Mertajam town centre.

Sunway has undeveloped land bank of 2,780 acres, with a possible GDV of RM32bil. About 93% of the group's undeveloped land bank is in Malaysia (mainly in the Klang Valley, Ipoh and Johor), with a GDV of RM24.5bil. The balance is in Singapore (one acre with GDV of RM95mil), China (95 acres with GDV of RM5.4bil) and other countries in the Asia-Pacific region (103 acres with GDV of RM1.3bil).

The group's launch plans in the Klang Valley in the final quarter of this year include townhouses in Sunway Montana (phase two) at Desa Melawati in Kuala Lumpur, cluster homes in Sunway Alam Suria (phase 2C1) in Shah Alam and three-storey park residences in Sunway Eastwood (phase two) in Puchong.

In Penang, it plans to launch three-storey terrace homes in Sunway Cassia (phase two). Meanwhile, in Singapore, the group has been involved in residential developments with Hoi Hup Realty Pte Ltd since 2007.

Sunway's ongoing projects in Singapore are Vacanza @ East (high-rise development with a GDV of RM1.23 bil), The Miltonia Residences (low-rise development with a GDV of RM952.5mil), Arc @ Tampines (high-rise executive condominiums with a GDV of RM1.17bil), Lake Vista @ Yuan Ching (high-rise development with a GDV of RM915mil) and Sea Esta, Pasir Ris (condominiums with a GDV of RM897.5mil).

The projects have a take-up rate of 92% to 100%, except for Lake Vista @ Yuan Ching which has a take-up of 71%. They are expected to be completed from end-2013 till 2016.

In China, Sunway is presently involved in joint-venture property developments in Jiangyin City (in Jiangsu Province) and the Sino-Singapore Tianjin Eco City.

In Jiangyin City, the group, via a joint venture with Shanghai GuangHao Real Estate Development Co Ltd, is developing a 1,200-unit condominium project with a GDV of RM466mil. It is Sunway's maiden project in China and has achieved a take-up rate of 80%.

In the 7,500-acre Sino-Singapore Tianjin Eco City, the group is developing a 98-acre site which has a GDV of RM5.3bil over the next five to seven years. Sunway has plans for this project to be launched in 2013.

Ho is confident about Sunway continuing to enjoy strong property sales despite talk by industry researchers and analysts about a perceived slowdown in transactional activity within the luxury residential market, due to tougher lending guidelines imposed this year.

He points out that Sunway has a diversified portfolio of properties in different price categories as well as different geographies, catering to various target markets.

“Diversification means mitigated impact and warranted performance. We maintain that strategic properties, which have great value, will always be in demand.”

Ho says Sunway's properties come with well-planned facilities and infrastructure, comprehensive security features, and are strategically located in prime locations.

“These are properties that have excellent potential for capital appreciation and most of our customers, especially the repeat clientele, see the value of these properties.”

He says that in the near future, Sunway will launch products, especially landed units, priced below RM1.5mil. “As for the high-rise segment, we have products worth about RM350,000 and above.”

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

Enquiries start to build up

MENARA WAWASAN MERDEKA: Interest already covers over 60pc of lettable space, says source

The proposed 100-storey Menara Wawasan Merdeka has received pre-booking enquiries for over 60 per cent of its lettable space, according to an industry source.

The source said about 30 per cent of the space is being reserved for its developer, Permodalan Nasional Bhd (PNB), and several government- linked companies under PNB’s stable.

To be officially launched by year-end, the Menara Warisan Merdeka will cost RM2.5 billion to RM3 billion. It will have gross floor space of 3.0 million sq ft and 2.2 million sq ft of net floor space.

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.

Last month, PNB announced that it had obtained the development order from Kuala Lumpur City Hall to build the 100-storey Menara Warisan Merdeka, touted to be the country’s tallest building.

PNB president and chief executive officerTan Sri Hamad Kama Piah Che Othman was reported as saying recently that the development order was attached with several conditions, including those related to legal matters.

PNB is studying the terms in order to fulfil them and to ensure proper planning as the development order was approved with conditions, Hamad Kama had said.

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

In 2005, the master plan was approved by the municipal authorities, followed by the issuance of final titles in 2008. The principal concept of PNB iconic building was then approved in 2009.

Since then, PNB has set up a wholly-owned unit, PNB Merdeka Ventures Sdn Bhd, to undertake the project, with Tengku Abdul Aziz Tengku Mahmud, formerly from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd, taking the helm.

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

By Business Times

A question of demand and supply

What the Tun Razak Exchange could look like.

A BIG pipeline of commercial properties in and around the city centre itching to be launched over the next decade or so is stoking concerns by the day – will there be sufficient demand for all these buildings?

1Malaysia Development Bhd, the master developer of the massive RM26bil Tun Razak Exchange development is fully aware of such concerns.

Close to half of the TRX real estate project will comprise office buildings. The project comes along at a time when many other mammoth commercial projects such as the re-development of 926ha Rubber Research Institute (RRI) Malaysia land in Sungai Buloh and Permodalan Nasional Bhd’s proposed 100-storey Menara Warisan Merdeka are poised to take off.

Naturally, the question of oversupply is posed to the government agency.

“The easy answer to such concerns is... that our interest is aligned towards making sure that there is not going to be an oversupply,” says 1MDB chief executive officer Datuk Shahrol Halmi.

“As a government agency, 1MDB is cognisant of the impression that... look, we are the Government, a 800-pound gorilla, therefore we can squeeze people (private developers) out,” he says, referring to the fact that the agency is spearheading such a big project in one of the city centre’s prime areas.

“But I ask you... is it the Government’s job to go and regulate the area of square footage that is available in the market – is that a good idea?

Is it then fair to say if there is better quality that is available on a certain side then that would be our chosen place?” he asks.

“The reality is that it is not the Government’s interest to destroy the economy of the city,” Shahrol says.

How then do we address concerns of oversupply?

“Via market researches, do studies on commercial property demand, moving forward – let market economics dictate,” he says.

Cause for Concern?

As it is now, there is already an oversupply of commercial properties in and around the city centre, according to Henry Butcher Malaysia director Lim Eng Chong.

And the figures seem to back that premise up.

International property consultant VPC director and chartered surveyor James Wong says the take-up rate for office buildings which are being built and will be completed this year stands at below 50%.

“This is for commercial properties in and around the city, but the same scenario exists further away from KL, such as in Cyberjaya; there is already an oversupply situation,” Wong says.

However, the market will tend to correct itself in time to come, he adds.

David Jarnell, senior vice-president and head of research at Malaysia’s Jones Lang Wootton writes in a recent report that this year alone, the prime office market in the city centre is expected to increase by 2.04 million sq ft with the delivery of several prime office buildings.

“The average occupancy rate in KL city centre declined from 84.9% in the fourth quarter 2011 to 81.3% in first quarter this year as the newly completed offices did not yet register any physical occupation,” he writes in his report from which an extract was published in StarBizWeek in June.

Jarnell further notes in his report that in the first quarter this year, the average net rental reduced marginally as many landlords were still maintaining the same rental rates.

Despite all of this, Henry Butcher’s Lim points out there is a saving grace.

The fact that the Government is pushing for so many economic projects as part of its larger plan to drive the country towards higher productivity and income will help attract foreign direct investments (FDIs) and congregate talents and innovators in the country.

This will inevitably produce demand for not only commercial properties but also other property types.

“The financial and economic reforms, if carried out properly, will get the intended results,” Lim says.

“The TRX project is exciting, but more than real-estate, the entire economic reform idea is a progressive one – if it is realised well, it will gel well with mega projects such as the TRX,” Lim says.

VPC’s Wong points out that in order to create effective demand for commercial properties, the country needs FDIs which will bring in the multinational corporations.

In this regard, mega projects like the TRX are needed, but with a twist.

“We need the FDIs to come but before that we need mega developments like the TRX, but with mega developments come the risk of depleting demand,” Wong says.

By The Star

Next generation development concept

Artist impression of Tun Razak Exchange in Kuala Lumpur.

1MDB will spare no effort in building the state-of-the-art Tun Razak Exchange.

UNLIKE other ground-breaking ceremonies where VIPs often sweat it out in the blazing sun with a shovel in their hand to mark the occasion, the one for Kuala Lumpur's newest and arguably swankiest financial district was done in style and comfort.

In one late July afternoon near Jalan Tun Razak, the VVIP who got the project officially off was Prime Minister Datuk Seri Najib Tun Razak. What he did was just touch a LED sphere that rose right before him in a makeshift air-conditioned hall and within seconds, images of a huge excavator loading gravel onto a lorry appeared on two large screens. That was it. No heat, no sweat, just a simple ceremony to mark the momentous occasion, and powered by technology.

And it will be smart technology, a digital backbone, eco-friendly elements and a garden city that will be the hallmarks of a futuristic city for modern living and working. When the cement and paint dries, the Tun Razak Exchange (TRX) will mould and alter the increasingly towering skyline of Kuala Lumpur.

Shahrol: ‘We have locked in a strategic investor for phase one.’

Named after the prime minister's father (Tun Razak), TRX will house 26 buildings over a 70-acre site on the fringes of the Kuala Lumpur city centre. It is designed to house hundreds of multinational companies, financial institutions, government agencies, hotels and support services. The project has an eye-popping gross development value of RM26bil.

Though a lot of planning has gone into the design of the new district, the question is will it be enough to thrust KL into one of the top 20 livable cities in the world? Will it be a financial hub that can attract the big deals and talent that seems to gravitate to Singapore and Hong Kong? Would its emergence create a glut in the real estate sector?

And what will it take to turn this whole dream into reality?

The detractors are already in full voice. They are so sure this new futuristic city will become another “white elephant.” But its master developer, 1Malaysia Development Bhd (1MDB), is convinced otherwise. It's sure that TRX will not just change how real estate is developed in the city and inevitably raise the standards of future developments, but it will become an oasis for global companies to reside and an area for talent creation. Encapsulating all of that, it will be a place where enough and sustainable economic activity will be created.

“People are willing to bear the high cost of living in London because it has everything, from being a financial hub to the connectivity, shopping, gourmet, the art galleries... we want to strive for that.

“We are like a part of this one big jigsaw puzzle and TRX can only address the overall vision of the Government when the other pieces are also moving. The reality is that it requires a lot of effort,” 1MDB chief executive officer Datuk Shahrol Halmi says.

He adds that “we are also not limiting ourselves to financial services. We are open to others so long it contributes to the vibrancy and diversity of the district.”

Big bucks from Abu Dhabi investor

To make sure this new district had all the trappings of a futuristic and livable city, the team visited places such as Rappongi in Japan, Hong Kong, Marina Bay in Singapore and Canary Whaft in London to extract the best of what those places have to offer.

Now that the design is in order, the question is who will fund this venture? Shahrol says “we have locked in a strategic investor for phase one and its infrastructure.”

But he is tight-lipped about the name of the investor. Those in the know say it is the Abu Dhabi government via Mubadala Development Company that is the key strategic investor. It is no coincidence that Mubadala had in October 2010 forged a collaboration with 1MDB with a view to explore joint key strategic projects in the Kuala Lumpur International Financial District or KLIFD, now known as TRX. Shahrol admits KLIFD was a “mouthful” to pronounce and tricky to remember, hence the name change.

The Abu Dhabi investor will bring RM3.5bil worth of FDI for the first phase of the TRX development, which will encompass three buildings on top of a mall plus the infrastructure. The first phase should be completed in 2016 and TRX is 15 year project.

The story does not end there.

There is interest to fund the entire infrastructure cost of TRX and both parties are locked in talks. If all parties are agreeable, the Abu Dhabi investors will bring in an additional RM2bil to fund the infrastructure work, which will bring the total FDI from them to RM5.5bil. And that puts TRX in a good spot, says an observer.

“It is that kind of momentum that can push this huge project through but we also need more strategic investors as this is a huge development,” he adds.

Shahrol did say 1MDB plans to lock in another strategic investor soon but did not elaborate.

Contrary to market belief that the biggest investors will be the Middle Eastern firms, Shahrol says “no, we are also looking beyond the Middle East.''

“We have enquires from all over the world, from investors, potential tenants, service providers and even technology firms (that want to be part of the development),'' he says.

Special advisor to the Japanese Cabinet Tadashi Maeda, who was at the launch on July 30, says he had written to the Malaysian government to express the interest of investors from his country to get involved in the development of TRX.

“The Japanese are definitely interested as they feel they have the technology to aid TRX,” says Shahrol.

“It is not a Middle Eastern and Japan play. There have been enquiries are from all over and there may be some government to government arrangements. Even some of the local players are keen to be party to this development,” says someone familiar with the mammoth project.

TRX will be developed in plots and indications are that it will be spread over four phases. But that will depend on how 1MDB wants its dream realised.

“We expect to have strategic investors where they will develop (some buildings) with us and there will be plot by plot joint ventures and also outright sale of land,” he says.

To Shahrol, it is about getting the momentum moving and then it can shift its focus and pitch towards its next priority. Local players will be part of the development including local construction companies, but a key component will be about raising the standards and quality to that of a world-class development in order to attract tenants.

“TRX can only address the overall vision of the Government when the other pieces are also moving. If there is no support, then it will be less than optimal,” he says,

But he is not about to let anything stop TRX from being a reality and he has a checklist of what needs to be done to make sure there is total cooperation and coordination in delivery.

Incentive competition

The concept of working with key strategic investors is similar to that deployed by Iskandar Malaysia and other corridors throughout the country. All dangle incentives to get the FDIs and it is no different for TRX. In fact, a task force has been set up to ensure no stone is left unturned in the planning and development of TRX.

That has raised concerns in the market place if the other corridor developments have a fleeting chance of getting more FDIs if TRX is going to be a magnet of interest from investors.

“The perception is that we are the favoured one, but Iskandar already has its own incentives, and so does the Northern, Southern and Eastern corridors. And when these projects were mooted, they had their own strengths.''

He says Iskandar's strength is that it is near Singapore, the Northern corridor's strength encompasses agriculture, while the Eastern corridor is more into oil and gas and support services.

“Why should Petronas suddenly scale back from the Eastern corridor (just because TRX has emerged) when they (are so entrenched in) Kertih, or why should Sime Darby scale back from the Northern corridor?

“Investors have their own reasons as to why they are investing in the corridors. They have their own sectors and strengths and each of the corridors have their own attraction and appeal,” he adds.

But Shahrol adds: “I cannot speak for the government (where the incentives are concerned) but as the owner and master developer, we would want (all the incentives) for TRX. Of course, there is a whole process of getting the incentives where many agencies such as the Finance Ministry, Securities Commission and Bank Negara are involved. It is really up to the policy-makers and they know how to balance and finalise the details.”

TRX is seen as an enabler and catalyst of the Government's Vision 2020 and the ETP initiative. It is supposed to spur new areas of growth, facilitate economic transformation and promote regional as well a global prosperity. The idea is also to create enough economic activities to create and aggregate talent and move towards a sustainable model for green initiatives. TRX is supposed to pioneer all of that, hence some of the incentives.

The incentives on offer include 100% income tax exemption for 10 years, stamp duty exemption on loan/service agreements, incentives for industrial building allowance and accelerated capital allowance and income tax exemption of 70% for five years for eligible property developers.

While 1MDB, which is wholly-owned by the Government, will spearhead the development of TRX, the Government will not fund the project and Shahrol makes it clear that “they did not write me a cheque, we had to pay RM230mil for the land.”

The potential glut

Shahrol does not believe there will be an oversupply of commercial buildings once TRX is built. He also does not subscribe to the notion that there will be a flight of quality tenants to TRX.

TRX is three minutes away from the Petronas Twin Towers and the Bukit Bintang tourist belt and a stone's throw away from the central business district in Jalan Sultan Ismail and Jalan Raja Chulan.

TRX, however, will share some of the features of those places but will differentiate itself from comparable business districts within Kuala Lumpur. It will have open spaces and parks to create a garden-like city. Of the 70 acres, 21 acres are for parks and open spaces. As for the buildings, there will be 26, one of which is the signature tower with 200,000 sq m of floor space.

Combined with the other towers, TRX will have nearly 900,000 sq m to offer when fully competed besides service apartments, hotels, conference and retail facilities and a cultural centre.

Hence the concerns.

Shahrol says: “We are not planning to go through the list of who is on that street and try to get them to TRX. We are more interested in who are the new players that we can entice, companies and businesses which will have otherwise set up regional centres in Hong Kong or Singapore.

“Of course, over time there is going to be a flight of quality tenants, but it will be a question of location where it makes business sense for them to move to TRX because of all there businesses there. This flight would also inevitably force the rest of KL to upgrade their services and we will be seen as raising the bar for real estate development for other parts of KL and elsewhere and that will eventually be good for the country,” he says.

He adds that “cannibalisation effect will be mitigated” and that in itself sets new standards in real estate and it is all these factors that can help push KL to be among the top 20 liveable cities.

“It is also a willingness issue on the part of property developments to push for higher standards so that there is no flight of tenants. If you do not adapt and change with the times then tenants will just move to places that offer better value,” adds an observer.

Competing ways

Kuala Lumpur has long fought a losing battle to be recognised as a financial hub in the region. It pales in comparison with financial centres such as Singapore and Hong Kong. But can TRX change the game?

“It would be tough given that some of the big deals are done in Singapore and, the republic and Hong Kong are recognised internationally as financial centres of this region,” says an observer.

But KL has the trump card when it comes to Islamic banking.

It has received global recognition as a hub for Islamic Banking. Islamic finance was worth just US$5bil (RM15.6bil) in 1985 and now it worth US$1 trillion (RM3.12 trillion) and the Malaysia's Islamic finance sector is already worth US$400bil (RM1.25 trillion) and the booming sector is set to triple in value in the coming decade, says a report.

“How do we compete? Well, you start with the first step, figure out what are the things that we need to do, which is infrastructure. And the Government is also looking to ease the way of doing business here. To say all the big deals are done in Singapore is not true. Just look at our recent IPOs, these deals are done here.

“If you actually start doing all of this correctly, providing a good environment, and we have inherent advantages as our cost is still a lot lower, and our talent, what if we create a business here for them?

“We are also not saying that we are going to compete with Singapore but what we are saying is that we want to leverage on our strengths. We have a good reputation and good momentum in Islamic finance and we just want to seize the day. The point is that it is better to do something than not do it at all,” he says.

He adds that TRX will also in no way be duplicating the Labuan Offshore Financial Centre.

“Labuan is an offshore centre and we are nothing like that. But you can compare us with (the central business district along) Jalan Sultan Ismail and Jalan Raja Chulan.”

The challenge

Among the many real estate projects in the city centre, KL Sentral has been pretty lucky in getting investors and tenants because a lot of planning went into the project. It is rare to plan on such a huge canvas; something similar with what TRX will be going through. What could potentially derail such a project of this size is a host of issues.

Shahrol says that in case of a slowdown “it does not make sense to push this through and it would not make logical sense to come up with a building in the middle of a recession.” That slowdown issue has been raised because of the fragile economic situation in Europe and the United States.

Getting to bed with the right partner is also critical, and to this, Shahrol says “the choice of parents is very important and it is a matter of picking the right partner.”

Forget about everything else, the biggest challenge to him is about “sticking with our original vision, where talent aggregates and value is created.”

By The Star

Office rentals in KL suburbs seen rising

KUALA LUMPUR: Rentals for purpose-built offices in suburban areas outside Kuala Lumpur are expected to rise with vibrant business activities, good information and communications technology (ICT) and government projects there, said the valuation and property services Department (JPPH) of the Finance Ministry.

“Domestic and foreign investors in the region will also make it attractive,” said Dr Zailan Mohd Isa, director of the National Property Information Centre (NAPIC), a unit under JPPH.

She was speaking to reporters after the launch of the Purpose-Built Office Rent Index (PBO-RI) for Federal Territory of Kuala Lumpur for the first to fourth quarters 2011 by Deputy Finance Minister Datuk Dr Awang Adek Hussin.

The first rent index of its kind in South-East Asia was developed by NAPIC to provide a guide on current office rentals in Kuala Lumpur besides being a benchmark of the country's financial stability.

It comprises sub-indexes for four main regions - the KLCC-Golden Triangle (KLCC-GT), central business District (CBD), within city centre (WCC), and selected suburban areas.

According to the index, the KLCC-GT region was the most sought after location in the city in 2010, with the highest average rentals among the four regions.

In the fourth quarter of 2011, average office building rental per sq ft was RM4.66 in KLCC-GT, RM3.27 in CBD, RM3.36 in WCC and RM3.51 in the suburbs.

JPPH director-general Datuk Abdullah Thalith Md Thani said the department intends to produce the index every half-year for the country's main cities including George Town and Johor Baharu.

By Bernama

Stable office rentals in KL

KUALA LUMPUR: Rental rates for purpose-built offices in Kuala Lumpur were generally stable in the last three years, except for certain suburban and city centre areas which showed an upward trend, according to the 2011 Purpose Built Office Rent Index (PBO-RI) for Federal Territory of Kuala Lumpur.

“Looking at the data... the market is still good,” National Property Information Centre (Napic) director Dr Zailan Mohd Isa said at a pre-launch briefing of the 2011 PBO-RI which will be launched today.

The rent index has four regions, namely Kuala Lumpur City Centre-Golden Triangle (KLCC-GT), Centre Business District (CBD), within city centre (WCC) and suburban.

According to the rent index, average monthly rentals for purpose-built offices in the WCC region had increased gradually from RM2.92 per sq ft in the first quarter of 2009 to RM3.46 per sq ft in the fourth quarter of 2011.

This meant that average monthly office rentals in the WCC region had increased 18.5% over a three-year period.

It was also noted that average monthly office rentals in the suburban region had appreciated by 13.2% over a three-year period, rising from RM3.10 per sq ft in the first quarter of 2009 to RM3.51 per sq ft in the fourth quarter of 2011.

The suburban region includes Bangsar, Bukit Kiara, Damansara Heights, Jalan Pantai Baru, Jalan Istana and Jalan Syed Putra.

“Companies may be relocating to the suburban areas,” said Zailan.

Meanwhile, although the KLCC-GT region is the most sought after location in the city, average monthly office rentals were stable (a slight rise from RM4.60 per sq ft in the first quarter of 2009 to RM4.66 per sq ft in the fourth quarter of 2011).

However, the CBD region suffered a drop in average monthly office rentals, from RM3.46 per sq ft in the first quarter of 2009 to RM3.27 per sq ft in the fourth quarter of 2011.

For the entire Kuala Lumpur region under review, average monthly office rentals had increased sightly over a three-year period, from RM3.91 per sq ft in the first quarter of 2009 to RM4.04 per sq ft in the fourth quarter of 2011.

The rent index, which will be produced on a quarterly basis, is developed by Valuation and Property Services Department (JPPH), with assistance from Universiti Teknologi Mara (UiTM) and University of Malaya.

Zailan said it was the first rent index of its kind in the Asean region.

“It is based on data from actual rental agreements, and not asking rates.”

The rent index defines purpose-built offices as buildings with office use of not less than 75% of net lettable area, and has compiled rental data from 6,831 tenancy leases from 167 buildings.

Zailan said the rent index's aim was to provide a guide on current market rentals for investors, and a benchmark for the financial stability of the country.

“We also want to attract multinational corporations to set up regional headquarters in Kuala Lumpur,” she said.

Zailan also said the PBO-RI would be expanded eventually to cover all the major cities and towns in Selangor, followed by Penang and Johor.

“Getting data is the most dificult part. We urge all property managers and owners to co-operate with us in providing data.”

By The Star

Napic: KL office rentals stable over past 3 years

KUALA LUMPUR: Office rentals in Kuala Lumpur had remained stable over the past three years until end-2011, easing concerns over a possible property bubble.

This is based on data from the Purpose Built Office Rent Index Wilayah Persekutuan Kuala Lumpur (PBO-RI WPKL) produced by National Property Information Centre (Napic), a unit under the Valuation and Property Services Department of the Finance Ministry.

The first edition of the index will be launched today by Deputy Finance Minister Datuk Dr Awang Adek Hussein.

Napic director Dr Zailan Mohd said the index, the first of its kind in Asean, would be used as a tool to gauge the health of the country's economy.

It was also created to attract multinational companies to set up headquarters here, she said.

PBO-RI was designed to provide an overview of the office rental index for Kuala Lumpur, with special focus on investment grade building.

In line with the Financial Soundness Indicators by the International Monetary Fund, the index can be used as a benchmark for the financial stability of the country.

At a pre-launch briefing held yesterday, Zailan said looking at the overall data, the capital's purpose built office market was healthy. A purpose built office in this context is one with at least 75 per cent of space for office.

Overall, office rentals within the Kuala Lumpur-Golden Triangle zone are higher than average.

In the fourth quarter, the rent per sq ft was RM4.66 compared with the median rent of RM4.50 per sq ft.

The highest rent per sq ft in this zone is at RM11.50.

Similarly, rentals in the suburban areas including Bangsar, Bukit Kiara and Damansara Heights are termed "extreme high rent" as per-sq-ft rent in the final quarter of 2011 was RM3.51.

By Business Times

Port Klang Authority teams up with Lagenda Erajuta in RM500mil 16-acre project

(From left) PKA assistant GM (admin and finance) Salihuddin Yussuf, Teh, GM Capt David R. Padman and manager (property) Husna Abdul Hamid Karim checking out the 1Gateway Klang sales catalogue

PORT KLANG: Port Klang Authority (PKA) is teaming up with a developer, Lagenda Erajuta Sdn Bhd, to jointly develop its 16 acres in Klang into a landmark mix-commercial development dubbed 1Gateway Klang worth RM500mil.

Official consent has been received from the Public Private Partnership Unit of the Prime Minister's Department for the commencement of construction work. The landowner of this project is PKA.

PKA chairman Datuk Dr Teh Kim Poo said at a press conference that the project had already started its groundwork and would be completed in five years.

“But I foresee the project to be completed earlier than expected as they had already started work since we already received approval for the building plan from the Klang Municipal Council.

“The project is expected to be a landmark development in Klang, being strategically located along Persiaran Raja Muda Musa and Lebuh Turi which includes two hotel towers, a large shopping mall and offices.

Teh hoped that this time around, the stalled project of more than six years would be a success.

“The project was abandoned in the past due to the developer's insufficient funds. But, finally we have sorted out the problem,” he said.

Teh said they had studied the background the Lagenda Erajuta and was confident of the company's track record and capability.

“Lagenda Erajuta would have to pay PKA RM45mil as a guaranteed minimum amount for the cost of land that we are putting in,” he said.

1Gateway Klang, the first lifestyle street mall in the area, will boast of two 31-storey hotel towers, offices, gourmet zone, retail zone and leisure zone.

With the prime location of 1Gateway, the developers intend to add value and prestige to the property. They have secured two internationally branded hotels, Novotel and Best Western Plus, to operate here.

The food and beverage outlets will be located mainly on the ground floor duplex shoplexes and also in the upper ground floor.

The upper ground consisting of three to six storeys of shop-offices will be zoned into leisure and business clusters with cineplexes, children playground, gaming arcades, leisure ventures, offices, banks, business corporations, signature retails, concept stores and fashion boutiques.

Lagenda Erajuta has already secured many international, regional and local brands and is still actively identifying more branded retailers and operators to enhance the 1Gateway value.

This area along Persiaran Raja Muda Musa has great potential to become the most lively business and social lifestyle enclave in Klang. The daily traffic flow of more than 60,000 vehicles along this major road is one of the highest in Klang.

By The Star

New landmark for Klang

PORT KLANG Authority (PKA) and Lagenda Erajuta Sdn Bhd formed a joint venture to give Klang a new landmark by developing a RM500 million 1Gateway project in the royal town.

Chairman Datuk Dr Teh Kim Poo said the project will be on a piece of 6.47ha of land in Taman Datuk Abdul Hamid along Persiaran Raja Muda Musa. It is expected that the project will be completed within five years.

The commercial project will consist of two internationally branded hotels, office towers, Cineplex and shopping mall, he said.

"Once completed, it will be a landmark in Klang," he told reporters at a press conference here, yesterday while adding that the site preparation work has already commenced.

Official consent was received from the Public Private Partnership Unit of the Prime Minister Department. The landowner of the project is PKA.

Initially, the land was a joint-venture project between PKA and Dermaga Suasa Sdn Bhd (DSSB) in 1995 and was called Intania project. However, it was stopped due to the 1997 financial crisis and was abandoned.

Teh said as part of the joint venture agreement, Lagenda Erajuta have to pay PKA a guaranteed minimum amount of RM45 million for the cost of the land which belongs to PKA.

Meanwhile, Lagenda Erajuta executive director, Datuk Lim Thiam Huat said in a press statement that the 1Gateway project will be a stylish top class commercial centre with high capital appreciation and rental yield.

He said the area along Persiaran Raja Muda Musa has great potential to become the most lively business and social lifestyle enclave in Klang.

He added that 1Gateway being the first lifestyle street mall in Klang will certainly bring back the younger Klang generation.

"We are excited for this new impressive development that is prominently located. We are certain that it will bring about a new era of prosperity into the area, thus rejuvenating an area long neglected despite its real estate value potential," he said.

Lagenda Erajuta Sdn Bhd is a subsidiary of Sagajuta (Sabah) Sdn Bhd. Sagajuta is Sabah's leading developer of the iconic 1Borneo hypermall, 1Sulaiman, Kingfisher Ujana and Warisan Square in Kota Kinabalu, Sabah.

By Business Times

Temasek eyeing Lido developer?

RM4B JOHOR DEVELOPMENT: Singapore group said to be in talks with Vincent Tan for a portion of his 47 per cent stake in CMP

SINGAPORE'S Temasek Holdings is believed to be eyeing a stake in Central Malaysian Properties Sdn Bhd (CMP), the project developer of Lido Boulevard.

Lido Boulevard is a RM4 billion integrated residential and commercial waterfront development overlooking the Strait of Johor.

It is understood that Temasek is in talks with majority shareholder Tan Sri Vincent Tan to take up a portion of his stake in the company.

Questions emailed to both Tan and Temasek were not answered as at press time.

The Crown Prince of Johor Tunku Ismail Ibrahim Sultan Ibrahim Iskandar is a 30 per cent share holder in CMP, while Tan owns a 47 per cent stake.

Its other shareholders include Datin Leong Foong Lai with a 9 per cent stake and Pasti Ekslusif Sdn Bhd with a 14 per cent stake.

Another source close to the deal said Temasek representatives had been to CMP offices for preliminary auditing.
The Lido Boulevard project is a joint venture between CMP and State Secretary Inc.

"One of Temasek's issue is whether the project is indeed being developed. They want to make sure that it's not just another abandoned project in Johor Baru," one source said.

Little has been heard of the project since late 2010, with many sure that it was a non-starter.

In a recent interview, CMP's chief executive officer Khoo Boo Teng, however, said mitigation work on the project was to start this week and likely to go on for another three to four months.
Reclamation work was expected to be completed in three years, Khoo said.

According to accounts filed with the Companies Commission of Malaysia, CMP's reserves are running in the negative of RM25.5 million.

Its assets stood at RM54.3 million, while liabilities were at RM79.56 million for the financial year ended December 2010.
No accounts were filed thereafter.

Should the Lido deal go through, it would be the second high-profile investment to have come into Johor Baru in recent months.

November 2011 saw Billionaire Peter Lim team up with Tunku Ismail to start a joint-venture company to develop a S$2 billion (RM5 billion) 10ha medical complex close to the Johor Customs, Immigration and Quarantine Complex.

By Business Times

All systems go for RM4b Johor beachfront project

LIDO BOULEVARD: Site mitigation works to start this week

TAN Sri Vincent Tan's multi-billion ringgit beachfront project Lido Boulevard, thought to be abandoned, will start site mitigation works this week.

It is estimated the entire development will have a gross development value of RM4 billion.

Overlooking the Strait of Johor, Lido Boulevard is an integrated residential and commercial waterfront development that spans 2.4km along the Tebrau Strait coastal line.

The development starts right after the abandoned JB Waterfront City, Lot One, and ends just before the Marine Department.

Little has been heard of the project after a portion of land which had been reclaimed caved in, resulting in the loss of a life in November 2010.

"We had to have a complete revamp after the whole incident. We took a bit more time to be more careful," Central Malaysian Properties Sdn Bhd (CMP) chief executive officer Khoo Boo Teng told Business Times recently.

Post-clean up works, he said there was a need to revisit its design work for, among others, roadworks along Jalan Skudai, the closest point to the coastline.

After a long and tedious process of submitting plans for approval, Khoo says after a fine-tuning of its masterplan, it is all systems go for mitigation works.

This includes rigging out the sea area it will reclaim with silt curtains and sheet piles to ensure that waste and debris, once work starts, do not get into the straits. This procedure will take three to four months to complete.

The project will comprise six parcels: Its high-end condominium towers Lido Residences, a 2.7km long and 10m wide boardwalk, a cultural centre, a hotel and retail mall, office suites and a 1.8ha to 2ha green lung.

The development will stretch 450m into the strait from the coastline.

The initial plans for a 50,000 sq ft snow park is still under consideration, says Khoo.

The development blueprint is based on the theme of a garden city with heavily landscaped garden, water features, park-like facilities and pocket gardens.

Reclamation work is expected to take about two years to complete.

The project is being developed in a joint venture with the Johor State Secretary Inc, an investment holding company of the state government.

Vincent Tan and Johor Crown Prince Tunku Ismail Ibrahim Sultan Ibrahim Iskandar are shareholders in CMP.

By Business Times

Gamuda Land in RM600mil commercial project in Kelana Jaya

PETALING JAYA: Gamuda Land Sdn Bhd, the property arm of Gamuda Bhd, has purchased 4.86-acre freehold land in Kelana Jaya for RM95mil.

It intends to develop the commercial plot into a mixed project of retail and office suites for RM600mil.

“The average selling price for the residential component is RM750 per sq ft while the retail shops are estimated at an average selling price of RM800 per sq ft.

“The planning and content of this development is anticipated to be revealed in early 2014,” said Gamuda Land managing director Chow Chee Wah.

The site is located behind the Giant hypermarket, and in front of Dataran Glomac. Other notable developments within a 500m to 1km radius are the newly-opened Paradigm Mall, Parklane Commercial Hub, Zenith Corporate Park, Kelana Square, Kelana Centre Point and Tiara Kelana.

The group's other projects included Bandar Botanic in southern Klang, Jade Hills in Kajang and Horizon Hills in Johor Baru.

“Two significant developments which we have added to our recent portfolio are Madge Mansions in Jalan Ampang, Kuala Lumpur and The Robertson Suites in Pudu, Kuala Lumpur,” said Chow.

For the nine months to April 30, Gamuda Land has recorded 30% increase in new property sales of RM1.3bil. Total unbilled sales remain at RM1.3bil.

Kelana Jaya is the new hotspot in Petaling Jaya and has recently seen the influx of developers along the Lebuhraya Damansara-Puchong stretch.

Property developers who have made inroads included Mah Sing Group Bhd, Glomac Bhd, WCT Engineering Bhd and the SIMA Group.

With 1.7 million sq ft of retail space, the Paradigm Mall by WCT has so far achieved 90% occupancy rate and a blended rental rate of RM6.

Hwang DBS said that occupancy rate could rise to 95% when a key retailer occupies 20,000 sq ft.

The mall, which has a gross development value of RM500mil is part of a 12-acre RM1.4bil mixed development. The other components of the development would comprise office towers, serviced apartments and a 350-room hotel which would be developed over the next few years.

Paradigm Mall is managed and operated by Jelas Puri Sdn Bhd, a subsidiary of WCT.

Mah Sing's RM3.2bil neighbourhood development of Icon City sits on a 20-acre site of the former Matsushita factory.

The Sima group's Parklane Commercial Hub@ Kelana Jaya on a nine-acre plot is nearing completion. With a gross development value of some RM300mil, Parklane consists of shopoffices, retail units and small office home office suites.

By The Star

Hua Yang bullish on earnings growth

Artist Impression of One South in Seri Kembangan. It is Hua Yang’s biggest project in the Klang Valley.

Property developer Hua Yang Bhd is looking forward to another year of impressive sales and earnings growth, says group chief financial officer May Chan.

The group, which is known for developing residential properties in the affordable segment, will also be celebrating the 10th anniversary of its listing on Bursa Malaysia this November.

It plans to launch projects with a combined gross development value (GDV) of RM815mil for its current financial year ending March 31, 2013 (FY2013).

Chan says this will more than double the RM400mil GDV of properties launched by Hua Yang in its previous financial year.

Chan says the group is looking to build on the momentum of financial year 2012's record breaking success.

The bulk of Hua Yang's sales in FY2013 will be from its Klang Valley developments, namely Phase 4 of One South in Seri Kembangan (GDV of RM200mil) as well as new leasehold service apartments in Shah Alam (GDV of RM175mil) and Desa Pandan (GDV of RM160mil).

The Desa Pandan development of two blocks of serviced apartments and two levels of retail units is on 1.55 acres in Kuala Lumpur, and is slated for a January 2013 launch.

“There will be around 400 units, sized from 540 to 1,000 sq ft. We have not firmed up prices yet. But interest is strong, with 2,000 registrations to date,” says Chan.

Meanwhile, the Shah Alam service apartments is due to be launched in October and is priced at more than RM300 per sq ft.

Another significant sales contributor in FY2013 will be new launches with a GDV of RM105mil in the group's Bandar Universiti Seri Iskandar township in Perak.

“We are also looking to acquire more land for future growth. It will be another busy year for us,” Chan tells StarBizWeek.

Presently, the group has an undeveloped land bank of 766 acres which has an estimated GDV of RM2.4bil across the Klang Valley, Johor, Perak and Negri Sembilan.

Chan says the group is looking to build on the momentum of FY2012's record-breaking success, where Hua Yang posted a 111% year-on-year increase in net profit to RM53mil while revenue rose 62% to RM306.4mil on the back of strong sales growth which was largely driven by its ongoing One South development.

One South

One South is Hua Yang's biggest project in the Klang Valley, with a GDV of RM920mil, consisting of retail units and offices, serviced apartments, soho (small office/home office) units and office towers on 16.7 acres in Seri Kembangan.

About 70% or RM365.6mil of Hua Yang's sales of RM520mil in the previous financial year (FY2012) came from One South.

As of end-June, phase one which consists of retail and office units is 90% sold.

Phase 2 and 3 which consist of 795 units of serviced apartments is 100% sold.

This year, the strong sales momentum for One South has continued with the April launch of phase 4 or Hua Yang's first ever soho development, namely Flexis@One South.

Two types of layouts are offered, consisting of single level units with built-ups of 475 and 628 sq ft, as well as duplex (split level) units ranging from 1,106 to 1,271 sq ft.

A typical soho unit will come with air conditioning, instant water heater, kitchen cabinets with sinks, gas hobs, audio intercom handset, Astro-ready cables and fibre optic points for high-speed Internet access.

Duplex upper floor units will have laminated timber flooring as well as a washing machine, fridge and a wardrobe.

“That way, residents need to purchase very little prior to moving in, as we have sorted out most of the fixtures,” says Chan.

Flexis@One South will have facilities on the 21st floor that ranges from a sky infinity lap pool, sky wading pool, sky pool bar, jacuzzi, floating sun deck, floating cabana, sauna, reflexology path, sky garden, barbecue deck, children's playground, rock climbing wall, meditation deck, yoga deck, Zen Garden, gazebo, study room, games room, boxing room, kitchenette, sky dining, sky lounge, sky bar to a sky fitness centre.

“Flexis@OneSouth will be the first in Seri Kembangan to have a 40m sky infinity lap pool, with a pool bar.”

Meanwhile, Chan says the first block of 266 units in Flexis@One South is fully booked, with prices starting from RM250,000 per unit.

The second block of 158 units in Flexis@One South was recently opened for bookings, and is selling at higher prices of around RM480 to RM500 per sq ft.

According to Chan, Flexis@One South is priced reasonably compared with other new high-rise developments in Seri Kembangan. Chan also points out that selling prices were in line with market demand and conditions.

“Phase 2 serviced apartments were sold at RM320 per sq ft in May last year. Subsequently, Phase 3 units were sold at RM370 per sq ft in July 2011.”

Chan says Hua Yang had bought the land for One South at RM55 per sq ft in December 2008.

“Recently, we looked at land around One South and prices have reached more than RM200 per sq ft.”

The final phase 5 and 6 of One South is likely to consist of a last block of serviced apartments and two blocks of office towers. “Initially, there plans for a hotel. But we are still exploring and looking at the best options for the final phases.”

One South is due to be completed by 2018.

Future growth

When asked whether Hua Yang is overly dependent on One South to drive sales growth, Chan says, “Not at all.”

She points out that One South has less than 25% of the combined GDV of RM815mil in new launches of projects for FY2013.

“This year, the Shah Alam and Desa Pandan developments will also drive our sales.”

As at March 31, 2012, Hua Yang's total unbilled sales from five ongoing developments stood at RM488mil.

The five ongoing developments are One South, Bandar Universiti Seri Iskandar township in Perak, Taman Pulai Indah in Johor, Senawang Link in Negri Sembilan, and Symphony Heights in Selayang, Selangor.

Developed since 2002, the 838-acre Bandar Universiti Seri Iskandar (BUSI) is Hua Yang's biggest township project.

“BUSI's GDV is estimated at RM1.2bil and it is slated to have about 6,000 residential and commercial units. So far, we have completed about 2,000 units. so, we still have eight to 10 more years to go for BUSI.”

Meanwhile, less than 20% of the 477-acre Taman Pulai Indah remains to be developed while the Senawang Link light industrial development has a GDV of RM45mil.

The Symphony Heights serviced apartments will be completed this year.

“All these, coupled with new phases and developments that will come on-stream in FY2013, gives the group a good earnings visibility for the next two years,” says Chan.

She is also confident about seeing continued positive response from buyers in the affordable market segment, such as first-time home owners, newly-weds, young adults and small families.

Chan says the group had been on an upward growth momentum since 2008, and is on track to achieve revenue of RM500mil by FY2014 and RM800mil by FY2018.

Concerning dividend payouts, Chan says the group usually pays out 25% of net profit as dividends.

For FY2012, the group has proposed a gross first and final dividend of 15 sen per share, which translates to a net dividend payout ratio of 30% of net earnings.

“This is the highest ever dividend payout.”

By The Star