Company a household name in Sabah

HAP SENG is a household name in Sabah. This strong brand name in East Malaysia has reached the shores of Peninsular Malaysia where Hap Seng Land Sdn Bhd is bringing with it more than 30 years of expertise and experience in property development and holding of investment properties.

As a leading property developer in Sabah, the company has constantly set new benchmarks in areas such as quality, concept and early completion of its projects. In fact, the company was the first to introduce the gated community concept in Sabah when it developed its Taman Mosaic some 20 years ago! Today, this project of 40 boxy-style bungalows has high perimeter walls and a guardhouse.

The company has done 32 housing projects in Tawau alone since the late 1970s.

In recent years, Hap Seng has vastly improved its products, as shown by projects such as its Taman Suria in Tawau that boasts 24-hour security with CCTV cameras and infrared motion detectors at the perimeter walls. Completed with Certificate of Fitness last year, all except for two of the 30 semi-detached and detached units have been sold.

These houses have 5ft-wide staircase, plaster ceiling for the first floor, and even 6ft-high walls with ceramic tiles grilles in the wet kitchen.

The recently completed wet market at Bandar Sri Indah in Tawa.

Any doubt that I might have about this company soon vanished after a recent visit to its projects in Kota Kinabalu and Tawau.

I was most impressed with its RM2.5bil Bandar Sri Indah in Tawau, the biggest township in Sabah with 1,368 acres of Hap Seng's former oil palm estates that is set to be one of the best in Sabah.

The township, started in 2004, is moving fast into Phase 5.

Straddling both sides of Jalan Apas, it is about 16km from Tawau old town centre. Its sheer size would surprise first-time visitors who arrive at this town bordering Indonesia after a 10 to 15 minutes' drive from Tawau Airport. Bandar Sri Indah is projected to grow into the largest business and residential hub in Tawau. It is near the famous Shan Shui Golf & Country Course.

It will have 7,493 residential units (992 acres), 788 commercial units (96 acres), 527 industrial units (103 acres) and 28 acres of open space. Amenities on 149 acres will include schools, hypermarket, community hall, sports centre, religious reserve, bus/taxi terminal, market, security centre, and petrol stations.

It is about the size of UEP Subang Jaya (UEP) in Selangor and boasts an impressive and grand entrance statement with water features at a big roundabout at Jalan Apas. Security guards salute us as our 4WD cars drove in for a visit.

A modern two-storey wet market (officially opened last December) with spacious car park is near the township's main entrance. It has a nice food court on the first floor with stainless steel chairs and tables, suraus and 114 stalls at the wet market on the ground floor. A freezer will soon be added to enable the stallholders to keep their fresh foodstuff.

Facing Jalan Apas are rows of newly completed two-storey shop offices with 35ft-wide frontage and tinted glass windows. Phase 2A of the shop offices (126 units) have been fully sold while the Phase 2B shop offices (133 units) have also been selling well. Polycarbonate roofs cover the space between the rows for shoppers' convenience. A shopping centre has been proposed on a piece of land between these two phases.

Hap Seng Land plans to create an eco-park with a jungle trail in a forest reserve next to the Phase 2B shop offices. It has also built a RM240,000 imported Australian teflon tent at a landscaped Eco Park open space which can be used to host various functions and activities such as product exhibitions and special events.

“Almost the whole of Tawau town came to this site to see our fireworks display when we celebrated the township's second anniversary last September,” said the project's deputy marketing manager Conrad Paujik.

About half of the purchasers of the 677 houses in Phase 1 (it has also its own guard house) have moved into their houses. This phase has two big family parks with basketball court, children's playground, and futsal court. In the Esplanade area, gazebos and jogging tracks have been built along a stream.

Hap Seng Properties Development Sdn Bhd operations manager Willie Pang said a 3km jogging track along a stream would be built to link Phase 1 to the lake garden in Phase 3. “We even have a 24-hour mobile patrol unit,” said Pang, who also took me to the security centre where the 20 to 30 guards had to clock in and out daily by pressing their thumbs on an identification gadget.

On the other side of Jalan Apas is the BSI Industrial Park, the biggest industrial park in Tawau. Currently, three types of one and 1½-storey industrial shop offices totalling 120 units are being built for sale. They have motorised roller shutters and CCTV cameras (with digital video recording) and an alarm system which are linked to the Bandar Sri Indah 24-hour security centre.

There is a hive of activities as lorries and tractors clear the huge land to build some 2,000 units of terrace house, semi-detached house and bungalow under Phase 5 (to be launched next year), an Anglican primary and secondary school project (under construction and expected to begin operations early next year), and 306 houses for sale under Phase 3.

Surrounded by three virgin forest reserves, it is clear that one of the best selling points of Bandar Sri Indah is that residents can enjoy abundant greenery and fresh air. Besides the good security and the quality of the houses, another selling point is the affordable entry level to own a house here.

A Phase 1, 20ft x 90ft two-storey terrace house was sold at a developer's price for only RM105,000. A hallmark of Hap Seng's houses is its big lot size, generous land setback at the rear of the house which is ideal for future extensions.

The rich Tawau folks will also get to own bungalows with an eco-friendly concept when 110 bungalows and link bungalows under Phase 2C (near the shop offices) are launched next year.

By The Star (by S.C.Cheah)

Plenitude launches Tebrau City Residences project

PROPERTY developer Plenitude Bhd has launched its Tebrau City Residences project, a first-of-its-kind serviced apartments in Johor Baru which is integrated in a "city within a city" concept.

Tebrau City Residences is designed to suit the lifestyle of modern city living and the only one to be surrounded by three international retail malls, namely the AEON Jusco mall, and the upcoming Tesco and IKEA malls.


CHUA: The location, convenience and amenities offered by Tebrau City Residences are one of its kind in Johor

The project consists of 1,088 freehold serviced apartments fronting AEON Jusco mall.

There are four designs with three- and four-bedroom apartments ranging from 1,089 sq ft to 1,882 sq ft per unit. Prices range from RM133 per sq ft to RM175 per sq ft.

"We expect the price to further appreciate upon completion of the project in June 2009 as the location, convenience and amenities offered by Tebrau City Residences are one of its kind in Johor," Plenitude executive chairman Elsie Chua said in a statement.

Tebrau City Residences will also have an in-house pool, gym, sauna and badminton courts as well as easy and secured residence access to carpark bays and other amenities. The service charge for maintenance of common areas and facilities is 14 sen per sq ft.

"Our current launch is the first parcel with 472 units, which has received good response. The rental yield at this area is projected at eight per cent and is expected to continue to increase due to land appreciation in this area and within the Iskandar Development Region," she added.

By New Straits Times

MTM sees brisk sales for project

MTM Millennium Holdings Sdn Bhd expects its maiden development project, Casa Dal-Hanaa in Cherating, Pahang, to be fully sold out by end of this year.

The freehold, gated community development comprises Mediterranean-flavoured villas (20 units) and apartment suites (49 units), with tropical landscaping. The project was expected to be completed by the end of 2009.

MTM Millennium executive chairman Datuk Seri Mohamad T. Al-Ozeir said sales had been satisfactory since the project was launched.

The prices range from RM550,000 for an apartment suite to RM5.8mil for a deluxe villa.

The built-up areas of the villas are from 3,675 to 6,800 sq ft, while an apartment suite has built-up area of between 1,000 and 4,200 sq ft.

Mohamad said prices were subject to change depending on currency fluctuation, cost of materials, and demand and supply.

The properties are targeted at buyers not only from this country but also from around the world who seek a luxury holiday villa fronting the sea.

By The Star

Making local furniture fashionable

Players must avoid pitfalls and market products effectively

THE furniture industry is not all that different from the fashion industry, based on what SJI Industries Sdn Bhd managing director Benny Poh said.

Furniture makers have to work a few seasons in advance like the fashion houses. And they also have to predict what will become the next big trend.

Benny Poh

“Furniture is no longer just a piece of wood. It has now become like fashion,” Poh told StarBiz. “Thus you have to be competitive and avoid pitfalls by selling at lower prices.”

According to him, players should offer higher value-added products rather than compete on pricing.

In addition, he said, they should learn how to market their products effectively.

SJI has been participating at the Malaysian International Furniture Fair (MIFF) over the past few years and had managed to receive a positive response.

Poh said that MIFF had been doing a good job bringing buyers to the exhibition every year.

“We cannot be going around the world to look for buyers, and MIFF has been bringing them to our doorstep every year,” he said.

MIFF Sdn Bhd chairman Datuk Tan Chin Huat urged local furniture makers to be trendsetters and penetrate the medium to high-end markets to keep up with the rapid changes in the industry.

Datuk Tan Chin Huat

“Buyers are now looking at what other extra things that we can offer to enable them to explore their business opportunities,” he said.

“Of course, there will be competition. That is why we need to find a niche for ourselves. Gone are the days where we only compete in terms of pricing. Local furniture manufacturers should not see China as a threat but as an opportunity for them,” he added.

He said local players should capitalise on their manufacturing skills and ability to deliver on time to attract more business in the international market.

Yap Fui Fook, operations manager of Samling Housing Products Sdn Bhd which will also participate at this year's MIFF, said the group was currently moving up the value chain to offer more design-oriented furniture.

“We are moving up the value chain to improve on our profit margins. We will also sell more of our products to Britain and Germany,” Yap said, adding that green consumerism was gaining popularity in Europe.

He said the group had been participating in international furniture fairs to secure more direct linkages with smaller distributors and retailers.

Meanwhile, Ascent Furniture Sdn Bhd managing director Eric Au said companies should always be prepared to weather conditions such as higher raw material costs and exchange rates.

“Malaysia definitely has its advantages, such as resources. We will stand to gain if we put in the right design and market them effectively,” he said.

He also said that MIFF was one of the most cost-effective and results-oriented tools to promote Malaysian furniture.Malaysia's total trade in furniture for the first 10 months of last year was RM9.13bil. In 2006, the full-year figure rose 7.4% to RM9.4bil. Malaysia ranked as the ninth largest exporter of furniture in the world in 2006.

MIFF 2008, organised by MIFF Sdn Bhd, will be held for five days starting today at both the Malaysia External Trade Development Corp Exhibition and Convention Centre and the Putra World Trade Centre.

Tan said about 500 exhibitors from Malaysia and other countries had confirmed participation and visitors from over 130 countries had pre-registered their attendance.

MIFF 2007 attracted 7,266 international buyers from 135 countries and a total of 19,518 visitors, generating US$667mil in sales.

“The number of participants and visitors to MIFF has been encouraging every year. In fact, the number is always increasing. Due to overwhelming response, we have to constantly expand in scale and size.

“This year, the fair will occupy a total of 80,000 sq m of exhibition space compared to 12,000 sq m in 1995, when we first started,” said Tan.

He said the bigger space and the increase in number of participants indicated that MIFF had turned into a world-class show.

By The Star - StarBiz (by Leong Hung Yee)

The allure of Melati Ehsan

RM1 BILLION ORDER BOOK: Yap (right) and Melati Project Director Mohd Zainudin Badarudin explaining a plan for a Johor project

WHEN Lembaga Tabung Haji doubled its stake in Melati Ehsan Holdings Bhd recently, one can't help but wonder: What's so sexy about Melati?

So far, two research houses have put the construction and property company under their radar. Both told clients to buy the stock, tagging a 12-month target price of between RM2.35 and RM2.50.

This would give investors a potential upside of at least 63 per cent based on Friday's close.

"Valuation is at single-digit, and it is ridiculously low at this time. It's a good value buy with limited downside," said Jeremy Goh from OSK Research Sdn Bhd.

Currently, the stock trades at a price-to-earnings multiple of around 3.6 times, versus 9-12 times for most of the other small construction companies.

Analysts are also attracted by the amount of jobs the company has.

"The main selling point is that the company has a huge order book, relative to the size of the company. Usually, for a construction company with a market cap of about RM200 million, order book is about RM800 million," said another analyst.

He declined to be named due to company policy.

Melati has an order book of over RM1 billion, which is expected to keep the company busy over the next three years. It is also bidding for RM2 billion worth of jobs.

Tabung Haji, which had about 3.94 million shares or 3.26 per cent of Melati in 2007, currently has over eight million shares or 6.7 per cent.

"There are three things Tabung Haji look at before buying stakes in a company: Sustainable earnings, solid valuation and good management team," said a Tabung Haji official who does not want to be named.

The company is 49.7 per cent held by managing director Datuk Yap Suan Chee.

Another interesting shareholder is Kuala Lumpur Kepong's Datuk Seri Lee Oi Hian. It is believed that he holds 1.67 per cent through Malay-Sino Formic Acid Sdn Bhd.

By New Straits Times

Melati eyes flood mitigation works

MELATI Ehsan Holdings Bhd, a construction and property firm, believes it has what it takes to be one of the top players in flood mitigation.

The company, which has one flood mitigation project in hand, has bid for three more deals worth RM2.1 billion collectively in the south and north of Peninsular Malaysia, managing director Datuk Yap Suan Chee said.

"We are confident about getting one of the three contracts after the mid-term review due to our financial strength and also because of what we have achieved in Kepala Batas, Penang," Yap told Business Times in an interview in Kuala Lumpur.

The government has doubled its budget for projects to tackle flooding to RM4 billion under its latest five-year plan that ends in 2010.

But it will need five times more to end the problem completely. In December last year, Drainage and Irrigation Department director-general Datuk Keizrul Abdullah said that RM21 billion would be needed for such nationwide projects.

"More emphasis has been placed on flood mitigation to tackle flooding problems, especially in growth corridors," Yap said.

Melati won a RM170 million contract for works from Bertam to Kepala Batas in December 2004, which was its first flood mitigation work.

The main job, which started in February 2006 and is 40 per cent complete, includes widening and stabilising five rivers and constructing new drainage, maintenance complex and flood retention pond. Works will be done by April next year.

Melati's edge also lies in its "green products".

Project director Mohd Zainudin Badarudin explained that instead of reinforcing river banks with concrete, a common practice in the past, Melati uses "sand-filled mattress" and "turf reinforced matrix".

These use natural materials like coconut fibres or bio-degradable equivalent material, which allow and promote growth of vegetation.

"In addition, substantial savings in time can be achieved as no specialised equipment or additional machinery need to be deployed," Mohd Zainudin said.

Melati is also geared for more jobs, said Yap. It plans to submit bids for highway and building works as well as infrastructure projects in township developments.

The main board-listed group is targeting contracts worth more than RM300 million each, with the focus on those under the Ninth Malaysia Plan and Private Finance Initiatives.

"We are also looking at dam construction, which will be our first initiative. We have a good management team and strong network of sub-contractors, good cash flow and bankers' support to tackle the job. So we are confident and ready," Yap said.

Melati has RM1.7 billion worth of contracts in hand, of which RM1.4 billion is unbilled.

More than 80 per cent are government projects, from Selangor Economic Development Corp and TPPT Sdn Bhd, a unit of Bank Negara Malaysia.

Melati has contracts for the Trans Eastern Kedah Interland Highway project and a job to build a Carrefour hypermarket in Kota Damansara, Selangor.

"We have completed 60 per cent of the highway and are targeting to finish the job by year-end, five months ahead of schedule," Yap said.

Construction contributes 70 per cent of group revenue, while property development makes up the rest.

By New Straits Times - Business Times (by Sharen Kaur and Goh Thean Eu)

Muhibbah Engr expects double-digit profit growth

CONSTRUCTION and engineering firm Muhibbah Engineering (M) Bhd, which is in the midst of an internal restructuring, said it expects net profit and revenue growth for the 2008 financial year to be in the double digits, supported by all divisions.

"We expect 2008 to be another good year. We see growth in every single division and expect the group to post at least double-digit increases in net profit and revenue," Muhibbah Engineering managing director Mac Ngan Boon told Business Times in an interview.

The group saw its net profit for the financial year ended December 31 2007 more than double to RM70.2 million from RM33.8 million a year ago.

Revenue rose 31 per cent to RM1.4 billion from RM1.1 billion in 2006.

The construction and engineering division accounted for 52 per cent of the group's 2007 revenue, followed by its crane manufacturing business with 32 per cent and marine unit at 16 per cent.

Mac said for 2008, contributions to the group from its various business units will likely remain similar to last year.

Two major local projects that will drive revenue growth of its construction division this year will be the RM1.1 billion construction works of the South Klang Valley Expressway and the RM450 million job to build a petroleum hub and bunkering facility on a man-made island in Tanjung Bin, Johor.

"Currently, we are awaiting funding for the two projects to be put in place but we expect them to kick off this year. At the same time, we expect contribution to come from our overseas projects in Singapore, Syria, Qatar and Yemen," said Mac.

Muhibbah Engineering has an outstanding order book of RM4.6 billion and is also tendering for local and overseas projects worth about RM10 billion.

"As a company, we can never sit idle. We continue to source and look at the market. Our business development is always ongoing," Mac said.

"However, we are now much more selective in terms of the types of work that we look for. The sectors that we like include airport, port and bridge construction works.

"We want to ensure that our profit margins are protected and that we can give value to our shareholders," he added.

Meanwhile, Mac said Muhibbah Engineering is reorganising its businesses into four cores - construction and engineering, crane manufacturing, marine and concessions.

Part of the restructuring involves regrouping its oil and gas fabrication business under its marine subsidiary.

The move will boost Muhibbah Marine Engineering Sdn Bhd's revenue and put it in better stead to secure more shipbuilding and fabrication jobs in the oil and gas industry.

The company has taken steps to regroup a project it had secured in 2006 to build fabricating steel jackets for an oil and gas project in Yemen under its marine division. The project is currently placed under Muhibbah Steel Industries Sdn Bhd.

"The new structure will be reflected in this year's financials, where we expect Muhibbah Marine's net profit and revenue to grow by 20 per cent this year," said Mac.

Last year, Muhibbah Marine posted a net profit of RM18 million on a revenue of RM301 million, driven mainly by its shipbuilding activities.

By New Straits Times (by Kang Siew Li)

Boustead nets RM179m in Q4

DIVERSIFIED Boustead Holdings Bhd said its fourth quarter net profit rose eight per cent as better sales were offset by higher interest and tax charges.

It is bullish of its performance this year, which will be driven by strong palm oil prices and better demand for its properties.

Boustead also expects its banking arm, Affin Holdings Bhd, to do better this year.

"Property Division will continue to be a major profit contributor, with profit deriving mainly from the Mutiara Damansara and Mutiara Rini Johor projects.

"Affin Group is expected to produce better results for the coming year," it said in a statement to Bursa Malaysia yesterday.

It reported a net profit of RM179.2 million for the quarter to december 31, 2007. Revenue more than doubled to RM2.2 billion.

For the full year, net profit more than doubled to RM477.7 million while revenue was up 40 per cent to RM5.75 billion.

This was mainly boosted by a RM162 million gain from an asset-backed securitisation deal.

Boustead plans to pay 18 sen a share in dividends, which includes a 10-sen bonus payout.

Affin Group grew its pre-tax profit to RM352.97 million, up 12 per cent mainly due to the increase in net interest income, other operating income and Islamic banking income.

Loan loss provision and impairment losses were also lower.

By New Straits Times

Regenerating Petaling Jaya

Jaya One leads the way for lifestyle changes in PJ

SOON to become a prominent landmark fronting Jalan Universiti, Petaling Jaya, Jaya One will be among one of the larger development in Section 13, says developer Tetap Tiara Sdn Bhd.

Its executive director Charles Wong says Section 13 is expected to have among the first run of new commercial projects under the “ongoing regeneration of Petaling Jaya”.

Jaya One covers 11 acres of Section 13’s 200 acres.

The other areas that will be undergoing various changes include SS2, Kelana Jaya, and Section 52, commonly known as PJ New Town.

(There are plans to convert some of the industrial pockets into commercial title by the local authorities.)

“The term 'regeneration' encompasses a host of changes. This include a change in the buildings in the area, a change in identity from industrial to commercial, for example, all of which boils down to a change in lifestyle for the people in that area,” Wong says.

Wong says Section 13 comprises 200 acres and Jaya One will occupy just over 11 acres of it. The first phase is now complete and is expected to be fully tenanted by the middle of this year.

Another new development in Section 13 is Jaya33. Close by is 3 2 Square, located in Section 19. A couple of factory lots are undergoing development, to be replaced by office buildings.

“So changes are afoot along Jalan Semangat, which divides Section 13 and Section 14. Jaya Supermarket will be pulled down and something better will come up. All these are part of the regeneration process,” says Wong.

Wong is following the footsteps of his father, L&H Property Development Sdn Bhd executive chairman Wong Chee Kooi. L&H is the main shareholder of Tetap Tiara.

Says Wong senior: “I used to see the Alcom and Colgate factory coming up in the area in the late 1950s and early 1960. At that time, I was working for a consultant and used to come around to see the place. Now my son is developing Jaya One. This is certainly exciting. It says a lot about the growth in this once quiet satellite town of Petaling Jaya.”

Section 13, in terms of land value, is undervalued. Once converted to commercial land, its value will up very quickly, says Wong.

Wong says the other industrialised area is the Jalan Tandang vicinity. Although earmarked as industrial land, Section 13 is expected to be converted to commercial land. Right now, this is being done on an ad hoc basis as factories move out and land owners find uses for their land.

“It is natural for land owners to maximise the value of their land and we see this happening around us,” says Wong senior.

Jaya 33 Sdn Bhd, for example, will be converting the adjacent land into a high-rise block, comprising either office units or service apartments while Tetap Tiara has a second piece of land of about 3.8 acres, behind Jaya One, which it will mull over later on.

“Section 13, in terms of land value, is undervalued. Once converted to commercial land, its value will up very quickly,” Wong says.

When Jaya One was first launched several years ago, its standard office lots were sold for RM220 per sq ft.

They are transacting for about RM350 psf today while the ground floor shop lots were launched at about RM750 psf.

Buyers of ground floor shop lots had to buy the first two floors of offices as well. Now investors are letting go of the office units.

“Nobody wants to sell the ground floor shop lots so it is not possible to compare how much they can fetch today,” says Wong senior.

He says about 40% bought for their own use while 60% were investors.

Tetap Tiara is keeping the centre portion, known as Palm Square. This comprises a cluster of eight two-storey developments, a theatre, and an annex block. They are also managing the car park. They will maintain the place until a committee has been set up.

“What is crucial for Jaya One is the retail mix and maintenance so we will watch this closely,” says Wong.

About three-quarters of the nett built-up of about 400,000 sq ft comprises offices and the rest retail. About 90% of the retail portion will be food and beverage (F&B) outlets.

“Because our frontage faces Jalan Universiti, two colleges have shown interest. This is a change of plans for us, but we view this positively. We had initially wanted showrooms to face Jalan University. A foreign bank has also shown interest. So our plans are changing. The F&B side is going according as planned. So there are positive surprises,” says Wong.

The retail offices are being rented out at between RM2.30 and RM2.50 psf for the standard lots of 1,800 sq ft. Corner units are going for RM3 psf. Jaya33 prices are higher at around RM4 psf. Their floor plate is also larger, between 5,000 q ft to 10,000 q ft, with a certain degree of flexibility to go right up to 20,000 q ft.

Section 19’s 3 2 Square office lots are less than 2,000 sq ft.

Wong cautioned it is not possible to benchmark Jaya One against any other development because there is none similar to it.

“Not on this scale, at least, because 11 acres is a huge development, once phase 2 is complete,” he says.

While developers are happy with the changes in development in the area, Petaling Jaya residents are concerned with the congestion that is taking place around them. Their concerns include parking woes, bumper-to-bumper traffic during peak and certain off-peak periods, and the lack of improvement in public transport within Petaling Jaya.

Complaints to the local authorities have increased but even as these new developments spring up, residents continue to demand a hearing.

But when a building is up and tenanted, what else is there to hear, or to be said? There is a greater force - monetary gains - at work and growth comes at the expense of something else. In this case, the quiet and tranquillity of a satellite town and her residents.

By The Star (by Thean Lee Cheng)

KLCC condo prices expected to double

LUXURY properties in the Kuala Lumpur City Centre, which cost around RM1,500 per sq ft now, could double in price once two new projects are launched this year, an industry executive said.

They are the six-star Four Seasons Hotel and Four Seasons serviced apartments and Millennium Residences.

“They are seen as the crème de la crème and will set a new benchmark pricing in the city area,” said Knight Frank Malaysia managing director Eric Ooi Yew Hock.

Four Seasons, which will be built near the Petronas Twin Towers for RM1.6 billion, is a project by Tan Sri Syed Yusof Tun Syed Nasir and the Sultan of Selangor, Sultan Sharafuddin Idris Shah.

Millennium Residences at Jalan Bukit Bintang, is being developed by City Developments (Malaysia) Sdn Bhd, which is part of Singapore’s Hong Leong group of companies for some RM500 million.

“Property prices in the Klang Valley have been boosted by foreign direct investments,” Ooi said on the sidelines of the 1st Malaysian Property Summit 2008 recently.

About half of the high-rise condominiums in the city centre were bought by foreigners and the trend is expected to continue, he said.

Prices of high-end condominiums in Bangsar, Sri Hartamas, Damansara Heights and Mont’ Kiara are also reaching 700 per sq ft to RM1,000 per sq ft.

“What the suburbs will do is to move beyond RM1,000 per sq ft to touch RM1,500 per sq ft this year,” Ooi said.

By New Straits Times (by Sharen Kaur)

UDS Capital: Five corridors to spur construction and housing

MUAR: UDS Capital Bhd sees the five economic growth corridors in the country spurring development activities, especially in the construction and housing sectors.

The five are the Iskandar Development Region, Northern Corridor Economic Region, East Coast Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy.

Executive chairman Datuk Koh Kim Toon said these activities would augur well for the company’s furniture manufacturing and trading businesses.

Datuk Koh Kim Toon (right) and Datuk Tan Khoon Hai.

Its wholly-owned subsidiary Syarikat U.D. Trading Sdn Bhd is involved in the dealing of furniture, plywood, small hardware, parts, equipment and construction materials.

Koh said the inflow of local and foreign investment to these growth corridors would create demand for residential and commercial properties.

“Domestic demand for furniture and building materials is likely to increase in tandem with activities taking place in the corridors,” Koh told StarBiz after the company AGM on Monday.

As such, local furniture manufacturers should not be unduly worried about the subprime problem in the US that had slowed demand for Malaysian-made furniture, he said.

Koh said the company exported 60% of its furniture, with the US market accounting for 15% of its exports. The rest goes to Europe, Middle East and Japan.

Meanwhile, executive director Datuk Tan Khoon Hai said the company wanted to strengthen the trading activities of hardware and laminated chipboard for projects in the local construction industry.

He said US demand for made-in-Malaysia furniture was expected to pick up when the US economy improved.

“The anti-dumping move by the US against Chinese-made furniture will see more orders come to Malaysia,” said Tan.

With the US also likely to impose the same ruling against furniture from Vietnam, buyers would have to look at other sources including Malaysia, he said.

Tan said the Vietnamese authorities now required foreign investors to have deposits or bank guarantees before setting up operations to protect the welfare of local workers.

He said the move had caused foreign investors to relocate their operations from Vietnam and more investors were coming back to Malaysia.

Tan said 35% of the company’s furniture now catered to the middle and higher-end market segment, and 65% to the lower to middle-end bracket.

“We are targeting to have equal contribution from both segments in the next one or two years,” said Tan.

For the financial year to Aug 31, 2007 (FY07), UDS cut its pre-tax loss to RM2.13mil on improved turnover of RM135.89mil compared with RM9.2mil and RM116.11mil respectively in FY06.

By The Star - StarBiz (by Zazali Musa)

UK varsity plans Iskandar campus

BRITAIN'S Newcastle University will set up its first international branch campus within the Iskandar Development Region (Iskandar), putting the price of medical studies within reach of Malaysians.

South Johor Investment Corp Bhd (SJIC), the promoter of Iskandar, said the university will offer degree courses in medicine and bio-medicine studies.

"While the university's Iskandar campus is expected to be completed in 2011, the target date for the first intake of students will be for September 2009," SJIC said in a statement.

Higher Education Minister Datuk Mustapa Mohamed handed over the letter of invitation to the university's dean of International Medical Education professor Reg Jordan in Johor Baru yesterday.

Mustapa said students could get a Newcastle University medical degree at about half the cost of doing so in the UK.

"The cost for completing a course in the UK is currently about RM1 million for a five-year programme," he said.

According to SJIC, the Newcastle University will be housed in the Iskandar region under its EduCity concept.

EduCity is a fully integrated education hub where all the educational disciplines will come together in one location.

"EduCity serves to provide a platform for facilities from world-renowned universities to work together within a multi-varsity university environment," SJIC said.

SJIC will develop the campus, accommodation and recreational facilities for EduCity, and is currently finalising the design of the campus. Infrastructure work is expected to commence in the third quarter this year.

By New Straits Times

UEM World net profit surges 382%

Full-year revenue also rises to a record RM7bil

PETALING JAYA: UEM World Bhd announced a record RM7bil revenue for the financial year ended Dec 31 (FY07), an increase of 46% compared with RM4.8bil in FY06.

Group net profit saw 382% growth to RM939.2mil against RM194.9mil in FY06.

According to a company statement, UEM World had set aggressive headline key performance indicators (KPIs) for 2007.

Targeted returns for shareholders were exceeded with return on equity for the year at 41% compared with the target of 38% while revenue growth at 46% fell short of the target of 65%.

In the statement, chief executive officer Datuk Ahmad Pardas Senin said: “Our 2007 performance is based on excellent contributions from most of our units and will be the platform for further improvements, going forward.”

“Sustainability” was the key theme for establishing the group's KPI targets for FY08, which was a revenue growth of 13% and a return on equity of 13%.

Boustead Holdings Bhd posted a 114% increase in pre-tax profit to RM828.81mil for FY07 compared with FY06's pre-tax profit of RM386.43mil.

At the same time, the group's net profit after minority interest grew 127% to RM477.74mil from RM210.18mil in FY06.

For the year, the plantation division contributed an operating pre-tax surplus of RM200.59mil compared with RM34.94mil in FY06 mainly due to the good palm product prices.

Property development activity recorded a 76% better pre-tax profit of RM85.28mil due to an increase in progress billings and land sales, while good occupancy and room rates were achieved by the group's Royale Bintang hotels.

The heavy industries division ended the year with a pre-tax gain of RM383.46mil, with the main contributor coming from Boustead Naval Shipyard Sdn Bhd that registered a pre-tax profit of RM380.89mil.

Meanwhile, the finance and investment division posted a significantly improved profit of RM69.5mil compared with RM8.04mil in FY06.

Boustead's banking division, Affin Holdings Bhd registered 12.3% higher pre-tax profit of RM353mil for FY07 compared with RM314.4mil in FY06.

In a statement, the bank said this was mainly due to the increase in net interest income and Islamic banking income totalling RM58.7mil as well as the reduction in impairment loss on securities, loan loss provision and finance cost of RM52mil, RM11.5mil and RM10.2mil respectively.

This, in turn, was partially offset by the rise in overhead expenses of RM76.4mil, higher share of losses in jointly controlled entity of RM7.3mil, lower other operating income of RM4.5mil and lower write-back of profit equalisation reserve of RM4.7mil.

Affin reported a higher revenue of RM2.18bil for FY07 compared with RM1.99bil revenue in FY06.

PPB Group Bhd saw a 47% rise in pre-tax profit for continuing operations to RM577mil for FY07 versus RM392mil in FY06.

Wilmar International Ltd, an associate company since May 2007, contributed RM226mil.

Lower raw sugar prices and improved selling prices of specialty flour, animal feed and farm products also contributed to the better results.

Net profit from the discontinued operations – PPB Oil Palms Bhd, PGEO Group Bhd and Kuok Oils & Grains Pte Ltd – was capped at RM168mil following their disposal to Wilmar, which was completed by end-June 2007.

Meanwhile, the group's revenue for continuing operations of RM2.99bil for FY07 was 15% higher than RM2.59bil in FY06. This was mainly due to higher sales volume generated by the sugar refining division and improved prices of specialty flour and animal feed products, a company statement said.

Transmile Group Bhd posted a larger net loss of RM279.6mil for FY07 against a net loss of RM63.8mil in 2006.

Revenue was lower at RM616.2mil compared with RM731.3mil in 2006, mainly due to a reduction in general freight sales during the year following the cancellation of unprofitable routes and certain flights during the year.

Muhibbah Engineering (M) Bhd registered a 108% growth in profit attributable to shareholders for FY07 to RM70.2mil from RM33.8mil in FY06.

The increase was due to improved operating margins from higher revenue, with better contract pricing and operational efficiency in three divisions – infrastructure construction, cranes and shipyard.

By The Star

UEM World swings into net profit in Q4

UEM World Bhd swung into a net profit of RM275 million for the fourth quarter ended December 2007, compared to a net loss of RM16 million for the corresponding period in the year before. Revenue grew four per cent to RM1.38 billion.

The improvement was due mainly to higher contributions from its property division, gains from the dilution in a foreign subsidiary and a foreign associate, as well as favourable results from joint ventures.

UEM World expects all its divisions to improve their operational results in 2008.

It also expects positive contribution from the construction of the second Penang bridge, works in the Iskandar Development Region and other infrastructure projects under the Ninth Malaysia Plan.

The manufacturing division is expected to benefit from increased activities in the construction industry as well, UEM World said in a statement.

For the full year, it turned to black with a net profit of RM739.3 million while revenue was up 45 per cent to RM5.75 billion.

This was due mainly to the sale of 1,000ha of land to Khazanah Nasional Bhd last June and higher contribution from engineering and construction, manufacturing and healthcare divisions.

The engineering and services segment saw net profit surge by more than 600 per cent to RM286.6 million in 2007, boosted by gains from the New Zealand listing of Opus International Consultants.

The construction division improved to a net profit of RM43.2 million compared to a net loss of RM2.8 million in 2006.

By New Straits Times

Muhibbah doubles Q4, full-year net profits

MUHIBBAH Engineering (M) Bhd has doubled its fourth quarter net profit as it made more money from its construction, crane-making and shipbuilding businesses.

The company expects business to be even better this year as high oil prices spur demand for ships while local construction work gather momentum under the government's five-year plan.

"The group continues to see growth in year 2008," Muhibbah said in a statement to Bursa Malaysia yesterday.

Muhibbah made a net profit of RM19.4 million in the quarter to December 31 2007. Revenue was a third higher at RM418.6 million.

For the full year, it also doubled net profit to RM70.2 million. Revenue was up 31 per cent to RM1.42 billion.

Its infrastructure construction, crane and shipyard divisions had better operating margins and higher revenues due to better contract pricing and operational efficiency.

Muhibbah had orders worth RM4.61 billion as at February 22. About 73 per cent is from the infrastructure construction division, with the rest from its crane and shipyard units.

"With the financial close and successful finalisation of financing facility for the South Klang Valley Expressway (SKVE) project by the client, Muhibbah as the main contractor for SKVE project has commenced the construction work," it said.

By New Straits Times

Lebar Daun brings affordable space to Shah Alam

An artist's impression of the Commerce Galleries at 121 D’Kayangan

The 4- and 5-storey Grade A Commerce Galleries at 121 D’Kayangan in Section 13, Shah Alam, offers space at affordable prices. The project is by Lebar Daun Development Sdn Bhd, which is also the developer of Bukit Bandaraya in Shah Alam, Taman Pahlawan in Telok Panglima Garang, and Taman Dato Demang in Puchong.

Its marketing manager, Arman Putera Asmuni, said the first phase of the development has four blocks totaling 38 strata-titled units with enbloc built-ups of between 7,800 sq ft and 14,000 sq ft. Prices range from RM209,999 for a studio unit to RM4.1 million for a corner unit.

“The average rental rate for a 1,000 sq ft office space is about RM1,000 a month. The studio units in our project can be purchased with almost the same installments,” he told theSun, adding that about 20% to 30% of the units had been sold prior to the official launch.

He said the studio units are targeted at professional firms, while the larger units are suitable for financial institutions, telco centres, and car showrooms. “Due to their huge size, a car showroom would be able to fit in access of 20 cars, while a banking hall could have more than 20 counters in the larger units” he offered.

The development is located within the D’Kayangan township, which is just five minutes away from Shah Alam’s city centre and the Federal Highway, and enjoys good visibility from Tesco, Shah Alam Stadium and Kelab Shah Alam. The two future phases are set for launch in the middle and end of this year respectively. The project has a gross development value (GDV) of RM110 million.

Arman said the 165-acre leasehold township consists of mid- to high-end residential properties including semidee villas, cluster semidees and superlink houses. It will be fully completed in the next 10 years with a GDV of RM1.6 billion.

“We will make studies and launch our products according to the market,” he said.

He added that properties in Shah Alam attract Malays and non-Malays alike with the former purchasing for owneroccupancy and the latter buying for investment. “Properties in D’Kayangan have been experiencing capital appreciation of about 10% per annum. For instance, the subsale price of a 2- storey semidee is RM575,000 from RM500,000 two years ago,” he said.

Meanwhile, the group’s 300-acre Bukit Bandaraya township in Section 8, is currently 20% to 30% complete and handed over. Its latest launch of superlink houses, priced from RM295,000, has experienced a good take-up to date.

The group aims to launch its latest commercial project in Section 14, the Shah Alam Triple Tower, by the end of this year. It will comprise three office towers, a 5-storey shopping complex with a net lettable area of 500,000 sq ft and 2,300 parking bays. “The development is going to be a new landmark in Shah Alam and with a GDV of RM600 million, it is going to be the biggest commercial development in the area,” Arman said, adding that details such as the price and size of the office units are still being finalised.

By theSun

Fiamma Holdings’ maiden property venture

FIAMMA Holdings Bhd (Fiamma) will soon start work on its first property venture, a serviced apartment and SoHo project located on Jalan TAR, Kuala Lumpur.

“We’re working on the development order and we aim to get the order this year,” said Jimmy Lim, group chief executive officer and managing director of Fiamma. According to Lim, the project is expected to have a gross development value (GDV) of between RM150 million and RM170 million.

“There will be one block and we’re looking at 30 storeys, subject to approvals,” said Lim after the company’s AGM held yesterday. The 1.06-acre freehold tract was acquired by its unit Fiamma Development Sdn Bhd last year for a total of RM16.5 million and the transaction was completed in November last year.

Fiamma had also entered into a sale and purchase agreement (SPA) to acquire land in KLCC, on which it would develop an office and serviced apartment. According to Lim, the SPA is pending completion. “We hope to launch it immediately after the SPA is completed,” he said.

The company’s foray into property development is due to a decision to diversify its earnings base. Lim revealed that the company would eventually have two core businesses — trading and property development. “We expect property to contribute to our earnings by 2009 onwards,” he added.

For the financial year ended Sept 30, 2007, Fiamma recorded an increase of more than 200% in pre-tax profit at RM12.6 million, up from RM4.1 million in the previous financial year.

By theSun (by Yeong Ee-Wah)

UM Land set to launch three high-end condos in 2008

This year is expected to be a positive one for United Malayan Land Bhd (UM Land) as the developer will be launching three high-end condominium projects with a gross development value of over RM1 billion by end-2008 said its CEO Anthony Yap (pix).



“It will be challenging in view of the rising costs of doing business, but the group is well positioned to withstand any negative impact brought about by these economic uncertainties,” he said in a press release announcing the group’s results for the financial year ended Dec 31, 2007.

For the first quarter of the year, UM Land will be launching its RM 175 million Suasana Bangsar in Bangsar.

“It consists of a single luxury residential tower housing 190 condo units with sizes from 1,112 to 4,800 sq ft. We are confident of the success of this freehold project based on the high level of interest gathered from the early registrants,” he said.

In the second half of 2008, UM Land’s 310 units of serviced residences in the enclave of Bukit Ceylon will be launched. “Given the attractive location and development potential of this project, it is expected to contribute positively to future earnings of the group,” Yap added. Meanwhile, a third condo project located along Jalan Mayang, off Jalan Yap Kwan Seng is scheduled for launch by the fourth quarter of the year.

Yap also said that the group would remain focused on its two-pronged growth strategy through its township and niche development divisions. It is currently pursuing several land acquisitions and joint venture development opportunities in the Iskandar Development Region (IDR) in line with this strategy.

UM Land is the developer of the integrated townships in Bandar Seri Alam, Seri Austin and Bandar Seri Putra in Johor and Selangor. Its niche projects include Suasana Sentral Loft in KL Sentral and Seri Bukit Ceylon, a freehold, serviced residences development managed by the Ascott International Management Group.

The group recorded a 16% growth in profit after tax of RM46.6 million for FY07, up from FY06’s RM40 million. UM Land is listed on the main board of Bursa Malaysia and its major shareholders include Perangsang Mewah Sdn Bhd, CapitaLand Ltd, Tradewinds Corp Bhd and Chee Tat Holdings Pte Ltd.

By theSun (by Allison Lee)

Tourism, office and retail properties look good for 2008

REAL estate consultants believe that the local hospitality market will continue to enjoy more upside driven largely by the tourism market growth and foreign investments.

Zerin Properties chief executive officer Previndran Singhe said the country’s hotels and resorts will soon be experiencing new trends that have been taking place on the international front.


Previndran: Hotels and resorts will soon be experiencing new trends

“For example, limited service and branded budget hotels [like the Tune brand] are very popular overseas and these are managed by well-known hotel brands including Holiday Inn and Marriott.

Serviced apartments are also another type of limited-service offering,” he stated. Previndran was presenting his paper on the hotel and resort market performance for 2007 and the outlook for 2008 at the recently concluded First Malaysian Property Summit 2008 in Kuala Lumpur.

Other trends that would benefit the local hospitality sector include spa resorts and Syariah compliant hotels. “Foreigners will enjoy the spa-themed resorts, which are considerably more affordable here.

There is also a big market for ethnic-based hotels with Islamic architecture here and in the Middle East, there are about 26 Syariah compliant hotels,” he added. According to data from Zerin Properties, foreign investments in hotels grew by 64% to RM878 million in 2006, while the total investments by locals only amounted to RM153 million. Last year, 62% of the total value of hotel transactions, which amounted to RM756 million, was by foreigners.

Hotel funds as well as foreign investment funds, said Previndran, are the main drivers of demand for properties here. “While Malaysia is still perceived as a value-for-money destination, the growth in our tourism market is also driven by low-cost carriers like AirAsia. So allowing the open-sky policy will actually be beneficial to us.”

Some 20.7 million tourist arrivals were recorded in 2007 and tourism receipts amounted to RM45.7 billion, which is the second largest foreign exchange earner for the country.

The property summit was organised by the Association of Valuers & Property Consultants in Private Practice Malaysia and more than 100 participants attended the one-day seminar.

On the office market segment, CH Williams Talhar & Wong Sdn Bhd managing director Goh Tian Sui said that the segment’s benchmark selling price would be boosted to a new level above that
of RM1,230 psf recorded by the upcoming Menara YNH along Jalan Sultan Ismail.


Goh: The benchmark selling price would be boosted to a new level

In his paper on the office market’s performance for 2007 and outlook for 2008, Goh said capital values would be “quite bullish” and foreign buyers’ enthusiasm in Malaysia in the sector would continue to grow.

“Interest from foreign investors and institutions continue to remain strong… it depends on how much yield they can accept. But we are facing more competition from Singapore, Australia and the Middle East,” said Goh.

For the investment and retail market’s performance for 2007 and outlook for 2008, executive chairman of Regroup Associates Christopher Boyd feels confident that the rental rates in shopping centers in the Klang Valley have the potential to reach RM100 psf.


Boyd: Klang Valley shopping centers rental rates could reach RM100 psf

“This is likely to happen over the next three years because of the continuous growth of new retail space in the market.
Top rentals in the Klang Valley are about RM80 psf at Suria KLCC while the recently opened Pavilion KL is already charging as much as RM45 psf and has the potential of catching up quickly,” said Boyd.

On retail space transactions, Boyd expects that prices will surpass the RM1,500 psf mark from the current RM1,100 psf following growing demand from foreign buyers.

“Buyers outnumber sellers here by a very large margin and in the last two years, we have experienced investor interest from Europe, Australia, Singapore. Hong Kong and the Middle East,” he added.

By theSun (by Loo Pik Kwan)

E&O plans luxury homes in IDR

It's finalising joint venture details with KFH

PETALING JAYA: Eastern & Oriental Bhd (E&O) is exploring the possibility of a high-end residential property development in the Iskandar Development Region (IDR).

The company signed a memorandum of understanding (MoU) with Kuwait Finance House (M) Bhd (KFH) for the development of a 195-acre in the IDR in mid-February.

E&O managing director Datuk Tham Ka Hon in an e-mail reply to StarBiz said details were being finalised for the proposed joint-venture development with KFH.

“The MoU provides for a six-month period for both parties to sign the joint-venture agreement,” he said.

E&O signed an MoU with Cultural Cluster Sdn Bhd, a subsidiary of KFH, in mid-February to jointly develop the parcel, which is designated as the Heritage District within the 624-acre Cultural Cluster of Node 1.

KFH - together with Khazanah Nasional Bhd and Jumeirah Capital - were awarded a 99-year leasehold concession last August to develop the Cultural Cluster.

Tham said the development would be in line with the group's strategy of developing premium properties with unique concepts to meet the needs of the discerning segment of the market.

He said the group was in a stronger cash position following the sale of its 50.6% stake in Putrajaya Perdana Bhd for RM199mil.

“Assets amounting to RM1bil have been identified within the group that will be maintained as investments from which we'll be able to enjoy recurring income as well as capital appreciation,” Tham said.

He added that these included retail and office properties in the Klang Valley and Penang.

The group also plans to expand its hospitality and lifestyle division in Penang with the addition of 150 rooms to the Eastern & Oriental Hotel and 50 rooms to the Lone Pine hotels while 60 serviced apartments from the Suites at Waterside project in Seri Tanjung Pinang would be eventually managed by the E&O Hotel, he said.

Meanwhile, E&O's results for its third quarter ended Dec 31 saw the company posting a net profit of RM89.63mil.

This is largely due to a one-off gain from the disposal of the Putrajaya Perdana stake. Revenue was at RM86.61mil.

It also announced a special dividend less 26% income tax.

Analysts said the group's outlook remained bright although there was a 49% fall in its third-quarter revenue compared with the second quarter because new projects were not launched.

For the nine months ended Dec 31, there was a decline in revenue largely due to the absence of revenue from Putrajaya Perdana.

Hwang-DBS Vickers Research Sdn Bhd analyst Tan Siang Hing said in a research note that “the strategy of focusing on property investment allows the group to generate recurring income that should improve its earning quality.”

In another research note, Kenanga Research said despite a drop in revenue there was a 12% growth in sales in the nine months to Dec 31.

This was partly driven by a 53% increase in revenue from the hospitality business and increased take-up rates and more launches from Seri Tanjung Pinang.

It said estimated net profit for the financial year ending March 31 (FY08) would be revised down by 23% to RM140mil to account for the third-quarter result, which was below market expectations.

The outlook for the fourth quarter would be much stronger due to RM217mil in unbilled sales.

By The Star (by Fintan Ng)

KFH in talks on projects in Sabah Development Corridor

KUALA LUMPUR: Kuwait Finance House (M) Bhd (KFH) is in talks with 10 to 12 companies eyeing projects in the Sabah Development Corridor (SDC).

Managing director Datuk K. Salman Younis said it was talking to the companies about different financing opportunities.

“It is an ongoing process, and hopefully before year-end, the deals will start happening,” he told reporters after KFH signed a master terms of reference agreement with Calyon London to conclude an Ijarah Rental Swap-i (IRS-i) transaction yesterday.

Datuk Salman Younis (left) exchanging document with Calyon London director Mr Collin Willis (right). With them is Securities Commision executive director of strategy and development Goh Ching Yin

Salman said the companies were interested to get financing for projects such as logging, deforestation, real estate and infrastructure.

The IRS-i would enable clients to hedge their market risk exposure through employing a fully syariah-compliant structure. It is designed to the unique needs of the client, with tenures varying in accordance to the preference of the client.

“The KFH IRS-i will enable our customers to effectively hedge against the risk market rate exposure.

“Companies can convert either their fixed or floating rate cash flow commitments into more manageable rate exposure suitable with their risk appetite, which will help mitigate the occurrence of any negative impact to volatility and uncertainty in the movement of market rates,” he said.

By The Star

Sunrise MD to step down

PETALING JAYA: Sunrise Bhd managing director Datuk Michael Yam will be stepping down on March 20 after helming the company for 11 years but will remain on its board as a non-executive director.

Sunrise told Bursa Malaysia yesterday that Yam, 55, would be ending his three-year contract with the company.

Commending Yam for having made significant contribution to the growth and reputation of Sunrise, the board said it looked forward to receiving his advice and opinion during its deliberations.

Datuk Michael Yam

In a phone interview with StarBiz, Yam said his re-designation would pave the way for the younger breed of management executives to move up in the company.

“I look forward to spending more quality time with my family and improve on my golf handicap.

“If I get bored, I may consider taking up some advisory roles, including acting as a consultant to companies, as long as they are not in conflict with Sunrise's business.”

Yam, who holds a 1.5% stake, or 6.8 million shares, in Sunrise, said he might also venture into one or two small niche developments, including building his own dream home “to keep abreast with the latest technical know-how and keep my passion of building quality residences alive.”

Since taking over the top post at Sunrise in March 1997, Yam had been instrumental in bringing the company to its present leadership position in the high-end condominium market in the Mont'Kiara enclave.

In the latest quarter ended Dec 31, Sunrise recorded unbilled sales of more than RM1.2bil which would be recognised in the next two to three years.

AmResearch, in a research note yesterday, said Sunrise would be able to record higher revenue of close to RM700mil for the financial year ending June 30 (FY08) compared with RM558mil a year earlier.

This year, the company plans to launch RM1.5bil worth of projects.

Summing up his tenure at Sunrise, Yam said: “A decade after the regional financial crisis hit the country in 1997, I stand back with much pride and contentment that this company can only go from strength to strength on a firm platform under the current leadership.”

After Yam's departure as managing director, executive chairman Tong Kooi Ong will also assume the position of chief executive.

By The Star - StarBiz (by Angie Ng)

Singapore’s CityDev 2007 profit doubles

SINGAPORE: City Development, South-East Asia’s second largest property developer, yesterday beat market forecasts by more than doubling its 2007 profit on home sales and hotel revenues, and said it was upbeat despite the credit crisis.

“Property development will continue to make significant contribution with locked-in profits yet to be recognised from pre-sold residential projects,” CityDev executive chairman Kwek Leng Beng said in a statement.

CityDev reported record full-year net profit of S$725mil, against S$351.7mil a year earlier, beating an average forecast of S$625.4mil by Reuters Estimates.

The company did not report separate fourth-quarter earnings, which jumped 72% to S$235mil, compared with S$137mil a year earlier, according to Reuters calculations.

“The results came in above everyone’s expectations,” said CIMB analyst Donald Chua. Analysts had expected a slide in fourth-quarter earnings due to the absence of one-time gains.

CityDev’s full-year results did not take into account revaluation gains on its investment properties, which would have boosted full-year earnings to S$2.8bil, the company said.

Its accounting differed from CapitaLand, South-East Asia’s biggest developer, which last week reported revaluation gains of S$136.8mil on its assets for the final quarter of 2007.

Private home prices in Singapore jumped 31.2% last year, boosting CityDev and its Singapore rivals CapitaLand and Keppel Land.

By Reuters

Wellness Zone boost for tourism industry

TOURISM Malaysia has initiated a Wellness Zone project in Port Dickson, Negri Sembilan, to attract foreign tourists and further grow this tourism segment.

Deputy secretary general of Tourism Datuk Dr Ong Hong Peng said the Wellness Zone, initiated in 2007, will kick off within the next one to two years.


HEALTHY DISCUSSION: (From Left) Ong, Datuk Dr Chan Kok Ewe from Island Hospital and Woodman

The project covers a 61km zone from Lukut to Pasir Panjang, Port Dickson.

"It will be an integrated area offering medical, wellness and spa facilities," Ong told Business Times when met at the Medical Travel World Congress 2008 on Tuesday.

He said a pilot project will be set up at Palm Springs Resort City.

The resort's master developer is Tanco Holdings Bhd while the Genium group will be involved with the Wellness Zone within the resort. Genium will both develop and manage this segment.

Among the treatments that will be offered in the zone are medical, aesthetic, cosmetic surgery, dental services, wellness treatment and traditional medicine.

Ong said that businesses in the zone will be given tax incentives which include 70 per cent of income generated by companies through services rendered to foreign citizens be tax-exempted for 10 years.

Machines and equipment will also be given tax exemption, he said.

On why Port Dickson was chosen, Ong said: "It is close to Kuala Lumpur and is associated with relaxation."

Wellness tourism is a component of health tourism but is distinguished from medical tourism.

At the conference meanwhile, "Patients Beyond Borders" author Josef Woodman said there are between two million and three million medical travellers worldwide, with a bulk of them going to Southeast Asia, North Asia and India.

Woodman estimates the growth of this industry at 20-34 per cent annually, and that by 2010, the global market for this business will be at US$40 billion (RM128.8 billion).

By New Straits Times (by Vasantha Ganesan)

Mah Sing Q4 net up 18pc

MAH SING Group Bhd, a property developer, said its fourth quarter net profit rose 18 per cent to RM20.4 million due to better sales from new projects.

The company, whose shares are a favourite with investors, plans to pay 45 per cent of its 2007 net profit as dividends.

"We believe 2008 will be another good year for the group and we should be able to perform and achieve another good year," Group managing director and chief executive Datuk Seri Leong Hoy Kum said in a statement.

This year, its performance will be driven by some RM1 billion of sales that have yet to be booked into its accounts.

The company also plans to develop properties worth some RM3.2 billion over the coming years.

Mah Sing made a net profit of RM81.1 million in the financial year ended December 31 2007, a 24 per cent increase. Revenue was up 16 per cent to RM573.4 million.

Projects like The Icon Jalan Tun Razak (West Wing), Perdana Residence, Hijauan Residence, Kemuning Residence and Aman Perdana in the Klang Valley helped to boost profits last year.

By New Straits Times

UEM Builders in the black

UEM Builders Bhd ended its 2007 financial year with a net profit of RM157.3 million from a net loss of RM21.9 million the year before, as its infrastructure maintenance and facilities management and toll concession divisions continued to contribute consistent and positive earnings for the group.

Revenue grew 36 per cent to RM2.4 billion last year, driven by the local construction sector, namely the electrified double track project from Rawang to Ipoh and PLUS' third lane widening project from Seremban to Ayer Keroh.

In a statement, UEM Builders said revenue for 2008 can be expected from the remaining phases of the third lane widening project from Rawang to Tanjong Malim as well the the Penang Bridge widening works.

"Looking ahead, the group anticipates positive contribution from the construction work of the Penang Second Crossing Bridge. The bridge will be the longest bridge in Southeast Asia on completion in 2011, spanning 24km of which 17km will be over water. This project will contribute significant economic benefits to the country and further strengthen the group's capabilities in infrastructure development," group managing director Datuk Ridza Abdoh Salleh said.

He also expects construction works in the Johor Iskandar Development Region and other projects from the Ninth Malaysia Plan to further enhance the earnings prospects of the group.

"Taking into consideration the global economic scenario and the markets we operate in, the group expects the results for 2008 to be better than 2007," he said.

By New Straits Times

Promising yet cautious property market for 2008

KUALA LUMPUR: The outlook for the property market this year is expected to remain promising yet cautious due rising oil prices, the possible increase of inflation rates and growing concerns in financial markets worldwide.

“The government’s move to allow EPF contributors to make monthly withdrawals from the balance in Account 2 for the financing of one house (effective 1 Jan, 2008) as well as the establishment of one-stop-centres (OSC) are expected to give a positive effect,” said Datuk Abdullah Thalith Md Thani, directorgeneral of the Valuation and Property Services Department, Ministry of Finance.

Abdullah was presenting an overview of the Malaysian property market at the 1st Malaysian Property Summit 2008 organised by the Association of Valuers & Property Consultants in Private Practice Malaysia (PEPS) yesterday.

Other topics presented at the conference included the performance of Malaysian real estate investment trusts (REITS) and the high-end condominium market for 2007 and their outlook for 2008.

On Malaysian REITS, chartered surveyor Datuk Mani Usilappan said the market is expected to be aggressive in acquisitions this year, with additional injections of assets.

“Aside from this, some REITs have review of rents coming up this year and next year. So these REITs are expected to perform better,” he said. There are 13 REITs with a total capitalisation of RM6.5 billion as of 31 Dec, last year.

Where high-end condominiums were concerned, Knight Frank Malaysia’s managing director Eric Ooi (pix) said the completion for high-end condos in Kuala Lumpur is expected to be higher this year.



“Last year, there were 1,400 newly completed high-end condominiums and the expected completion this year is 4,370 — more than half are located in KL city. We are also expecting branded residences such as Four Seasons Place, St Regis Residences and The Binjai to set a new benchmark in pricing of RM2,000 to RM3,000 per sq ft,” Ooi said. Last year, high-end condos within the Kuala Lumpur City Centre were selling for RM1,300 to RM2,000 per sq ft.

The rental market is also expected to be competitive this year due to the higher completion of units. Rentals may increase but there would be yield compression, as the increase in prices is faster and higher than the rental increase.

“We have seen very strong foreign interest to buy properties in Malaysia, about 40% to 50% are foreign purchasers, and we expect this percentage to remain this year,” Ooi said, adding that buyers from the UK, Australia and Europe found the property prices here to be very affordable.

Ooi explained that there might be concerns of oversupply in high-end condos but it would depend on two segments – whether it is for investment purposes or owner occupation. He said there is still demand for high-end condos and among some of the key demand drivers are competitive pricing, location, quality and lifestyle.

By theSun (by Rosalynn Poh)

SP Setia sets five-year plan

KUALA LUMPUR: Renowned developer SP Setia Bhd unveiled a five-year plan with a theme “Move to Change” to firmly position itself locally and abroad. Group managing director Tan Sri Liew Kee Sin (pix) said the plan was mooted to strengthen the SP Setia brand name and move the company aggresively in the highend property market segment.



Speaking to the media after the company’s 33rd AGM at the Kuala Lumpur Golf and Country Club yesterday, Liew said the company is also geared to achieve record sales revenue of RM1.8 billion from new and existing projects this year.

“SP Setia is currently well known for its Setia Homes brand comprising terraced houses that make up 80% of our products, but by 2012, we wish to reduce it to 30% and concentrate fully on making the ‘SP Setia Eco’ brand the main driver of the company,” said Liew. Future projects are expected to be modelled after SP Setia’s award winning brand of Eco-themed developments (Eco is Setia’s corporate acronym for “environment”, “community” and “organisation”).

“We are going to concentrate on integrated development, overseas markets, bungalows and high-rise condominiums in an effort to push the Setia Eco brand,” Liew added.

He said the five-year plan also aims to make SP Setia’s international operations as big as the company’s local operations.

“We are going on an aggressive overseas expansion drive starting in Vietnam. We are also looking at other countries such as Pakistan, Cambodia, India and China, but it depends if we can get the right land at the right price.

“Although we are going out aggressively in Vietnam with our EcoLakes in MyPhuoc project, we make sure we carry out a detailed study on each piece of land before we make a purchase.

“When we went there first [Vietnam], we thought we could build a few hundred houses. But after seeing the market there, we think we should build a few thousand houses now,” said Liew.
According to him, the group is also looking for the right land at the right price in Vietnam and have scheduled projects with a gross development value of more than RM300 million there.

On another note, Liew said rising construction costs are a “headache” but the company is well prepared to face it. “We sell our products at a premium price, 20% higher than our competitors but our buyers are willing to pay the price because they know our brand name. For now, we are concentrating on higher margins, which translate to higher profits,” he said.

Liew described the financial year ended 31 Oct, 2007, as a great year. The group recorded a total sales volume of RM1.2 billion on the back of RM1.1 billion in revenue. Group profit after tax was at an all time high of RM260 million.

SP Setia has a strong local presence in the Klang Valley, Johor and Penang. It is well known for its Setia Eco Park Shah Alam, Setia Eco Gardens and Setia Tropika developments in Johor. It has a current landbank of 4,817 acres and aims to launch a RM1 billion project in Sabah within the next three to six months.

By theSun (by Tim Leonard)

SP Setia to widen revenue base

It targets commercial property, overseas projects

KUALA LUMPUR: SP Setia Bhd, which is developing townships and niche projects in the Klang Valley, Penang and Johor, is aiming for a broader revenue contribution base by 2012.

Group managing director and chief executive officer Tan Sri Liew Kee Sin said the company was targeting a larger contribution from integrated commercial property projects within matured townships, high-end condominiums and overseas property projects in five years.

Tan Sri Liew Kee Sin (right) and company directors at the AGM

“We’re moving away from the traditional market segment of link homes as there won’t be much growth if we just continue developing them,” he said after the company AGM yesterday.

Liew said 80% of revenue in the last financial year was contributed by this segment.

There would be more launches of “Eco” brand residential properties, high-end condominiums as well as integrated commercial properties, he added. The “Eco” brand is SP Setia’s high-end brand.

“We’re aiming for sales of RM1.8bil for the financial year ending Oct 31 (FY08), of which RM1.5bil will be in Malaysia and the remainder in Vietnam,” Liew said, adding that sales would be RM600mil higher than FY07.

SP Setia entered the regional property development scene last year when it signed a joint-venture agreement with Becamex IDC Corp of Vietnam to develop a mixed development project in My Phuoc. A second joint-venture agreement was signed recently with Saigon Hi-Tech Park Development Co for a mixed development project.

Liew said the first phase of the RM2.1bil EcoLakes project at My Phuoc to be launched in April or May, would comprise three-storey link homes.

“Property development in Vietnam will only grow over time; we may launch our other project there next year,” he said. Both projects are located near Ho Chi Minh City.

Liew said there were no plans as yet to scout for property projects in Hanoi. “We’ll invest in Hanoi only when we find a location where we’re able to implement our development concept and where the joint-venture partner sees value in having us on board.”

Apart from the Vietnam launch, Liew said the RM1bil Aeropod @ Tanjung Aru, near Kota Kinabalu, would be launched in six months after the finalisation of the development plans.

Other launches for the year include Duta Grande in June or July, comprising 15 bungalows priced at RM30mil each, and Setia Sky Residences, a RM700mil condominium project located near the National Heart Institute in downtown Kuala Lumpur that will be priced at an indicative RM750 psf.

For FY07, the company posted a net profit of RM260mil on revenue of RM1.15bil.

By The Star

Gamuda starts working on succession plan

KUALA LUMPUR: Gamuda Bhd managing director Datuk Lin Yun Ling said the group has started working on a succession plan while he would continue to helm the company he founded.

Describing Gamuda’s prospects as “good”, Lin is confident the group would be able to meet all “the guidance that it had given to analysts earlier”.

He denied market talk that his share sale was due to any adverse changes on the group’s fundamentals or earnings prospects.

“I brought up the company over the past 25 years. I certainly don’t intend to have an abrupt exit ... we will ensure that over the next five years or longer, there will be a smooth transition,” Lin told StarBiz yesterday.

He said he could foresee the day Gamuda would be run by professional managers who were not shareholders.

“There are two or three names who have the potential (to take over the top executive positions),” he added.

Lin trimmed his stake to 1.7% from 5.2% last week. The shares were placed out to global institutional investors.

The share sale sparked heavy sell down on Gamuda shares amid worries that the group’s prospects would not be as rosy if Lin exited. HLG Securities anlayst Teoh Paul Keng noted that the rate Gamuda replenished its order book had decelerated. “The group has not secured anything substantial besides the double tracking project,” he said.

The group’s order book ballooned to RM11bil after it bagged the double tracking project together with MMC Corp Bhd.

The share price tumbled to a low of RM3.20 – down nearly 40% from its recent high of RM5.30. It closed at RM3.92, up six sen yesterday.

“I didn’t expect the (market) reaction to be so strong,” Lin said.

Lin noted it was “unfortunate” that investors perceived the “18-month lock-in period” for his remaining stake as a sign that he would only stay on for that period.

He pointed out that this was the fourth time he sold down his stake in Gamuda.

“Over the last 16 years, it (the selling down) hasn’t affected my commitment to grow the company and make it a success,” he said.

Lin stressed he had never been the controlling shareholder. He was holding about 16% stake when Gamuda floated its shares on Bursa Malaysia.

“There are lots of rumours flying around, such as our Vietnam project is not doing well and I have health problems.

“My plan to sell shares has nothing to do with what is being speculated. It is mainly for estate planning purposes,” said Lin, adding that the share sale was to diversify his personal wealth.

“But I suppose for the investors, there is never (a good) time for the CEO to sell shares,” he quipped.

Lin refuted market talk that he sold shares because Gamuda was under pressure from the Malay Chamber of Commerce in terms of distributing 30% of the sub-contracts to bumiputra contractors. “That issue has been resolved to our (Gamuda’s) satisfaction,” he said.

On the outlook of the construction sector, Lin said it would still be “quite good” for the next few years and there was no sign of a downturn.

But in terms of the number of jobs being dished out, Lin opined it would be the same as in the past two years.

“The slowdown in the US would trigger the need for the Government to pump prime (the economy) a bit more.

“You will have some big ticket items to be rolled out from the development of the economic corridors,” he added.

By The Star - StarBiz (by Kathy Fong)

Tesco to invest RM800m in 11 new stores

BRITISH retailer Tesco Stores (M) Sdn Bhd will invest RM800 million within the next 12 months as it opens 11 stores, bringing the total number of Tesco stores to 31 and possibly over RM3 billion in sales.

The planned expansion, growth in like-for-like sales coupled with a strong consumer friendly pricing policy, is expected to help sales for the year ending February 28 2009 grow by not less than 30 per cent.

"We are currently constructing eight stores and we have plans to develop a further three stores, hopefully within the next 12 months. We are also building a second distribution centre for our ambient products," chief executive officer Chris Bush said.

Bush said Tesco's growth in Malaysia, in terms of expansion and sales, is one of the biggest markets outside of the UK.

"We ended 2006/2007 (February 2007) with RM1.7 billion in sales. In the current year (ending February 29 2008) we expect it to be significant, at around 50 per cent ... and we will be disappointed if we do not grow by at least 30 per cent in the coming year (ending February 2009)," he said.

Tesco, which opened its first Malaysian hypermarket in 2002, will also post its maiden profit in the current year ending February 2008.

Apart from the RM800 million investment, another RM100 million will be for the opening of a distribution centre. The investments will come from its 15-year-tenure RM3.5 billion bond sale.

"RM100 million will be for the distribution centre to be located in Bukit Beruntung," Bush said.

Two of the scheduled 11 stores - in Johor Baru and Prai - are Makro outlets which are being renovated and converted into Tesco Extra outlets.

New outlets are also scheduled for Mergong, Kedah, Kampar and South Ipoh in Perak, Desa Tebrau and Setia Alam in Johor and Semenyih in Selangor.

Bush, who was speaking to reporters yesterday to announce Tesco's price commitment for the next 12 months, said it has slashed RM20 million off the price of 500 products. The price cuts range from 5-41 per cent.

Tesco, which initiated two other price cuts in 2006 and 2007, investing RM6 million and RM15 million respectively, is this time taking its pledge a little further.

It announced that 50 basic everyday staples, which are its best-selling lines across fresh and grocery including oil, sugar, flour and rice will not be beaten on price.

Tesco will refund twice the difference if any of the 50 products is found to be cheaper elsewhere.

Tesco in Malaysia, a 70-30 joint venture between Tesco Plc and Sime Darby Bhd, employs 7,000 people at its 20 outlets and is set to employ another 5,200 people in the next year as its expands.

Going forward, Bush expects Tesco to invest a further RM500 million to RM600 million for openings in the 2009/2010 financial year.

By New Straits Times (by Vasantha Ganesan)

Cepco eyeing RM200mil job for Penang Bridge

KUALA LUMPUR: Concrete Engineering Products Bhd (Cepco) is confident of securing a contract worth about RM200mil to supply marine piles for the second Penang bridge project.

Cepco’s marine piles were successfully tested for the bridge project in July 2007, managing director Leong Kway Wah said.

“However, there is no indication yet. We have yet to hear if we are going to get the contract,” he said after the company AGM yesterday.

He added that Cepco was also eyeing jobs from projects to be rolled out under the Ninth Malaysia Plan and the various economic development corridors.

Leong was positive on the prospects for Cepco as the company was one of two players in the spun concrete piles market.

Cepco currently has an order book of about RM80mil that would keep the company busy for five to six months.

On new export markets, Leong said the company was in talks with parties in Canada.

“We have received enquiries from Canada on supplying materials for the construction of an indoor stadium for the 2010 Winter Olympics,” he said.

He said the award of the contract would be confirmed by the end of this month.

At present, the company already exports concrete piles to Iran.

“Currently, we have an existing order to supply marine piles worth RM15mil for an ongoing project in Iran,” he said.

Leong said revenue contribution from exports contributed 15% to total group revenue.

“We would like to increase our export market share but have to consider the problem of logistics especially with the increase in the price of fuel, which has impacted transportation cost,” he said.

On the rising price of raw materials like steel and cement, Leong said that this would affect the company’s bottom line as the company was not able to transfer the cost to customers fast enough.

He said Cepco’s strategy would be to anticipate the higher prices and factor them into its prices as well as to source for cheaper raw materials from external suppliers.

By The Star