PJ Development to launch RM300m high-end project in KL

ICONIC PROJECT: The Swiss-Garden Residences will consist of two apartment tower blocks of more than 30 storeys each - website picture

PJ DEVELOPMENT Holdings Bhd, a property developer, will launch a new RM300 million high-end project in Kuala Lumpur, dubbed the Swiss-Garden Residences this month.

The residences will consist of two apartment tower blocks of more than 30 storeys each. Construction will take about three years.

James Chew, its general manager for the property division, said the towers will have a unique feature. They will have hotel rooms up to level 11.

The rooms would be directly connected to the Swiss Garden International Hotel Kuala Lumpur via a bridge. The hotel is also owned by PJD.

"The original plan was to build two towers offering more than 450 apartment units. But since the hotel (Swiss Garden) is always fully occupied we decided to offer some hotel rooms at the residences," Chew told Business Times in an interview.

Chew said under a revised plan, the residences will offer 436 apartment units and 42 hotel rooms and both will complement the Swiss Garden Hotel.

The towers will be built on a 0.7ha site which is directly behind the Swiss Garden Hotel, using internal funds and loans.

Chew said the land was bought two years back for RM20 million.

He said the design of the buildings would be contemporary and modern and earmarked as an iconic building in the Jalan Pudu area.

"We are targeting locals, and buyers from Hong Kong, Singapore and the UK. Potential buyers from these countries are already lining up to buy the properties," Chew said.

"The units, with sizes ranging from 550 sq ft to 2,700 sq ft, are pegged from RM600 per sq ft and onwards. The prices are attractive considering the current market value within the vicinity," he added.

Chew said service apartments in the Klang Valley are still selling like hot cakes as they offer good business opportunities, especially for those who are looking at investments.

"Property prices have increased a lot so as developers we are providing good yields for investors," he said.

According to Chew, PJD is moving away from building medium-priced homes to high-end residences and it has been doing this for three years due to strong demand in the Golden Triangle area.

"PJD prefers to go into niche markets by acquiring smaller parcels of land that have good and immediate potential for development," he added.

For the first half of 2008, PJD expects to launch RM810 million worth of new properties in Kuala Lumpur and Johor.

Besides property development, the company also runs a profitable power cable manufacturing business and owns the Swiss Garden hotel chain.

By New Straits Times (by Sharen Kaur)

WTW sees high demand for Johor properties

Property consultant CH Williams Talhar & Wong (WTW) is upbeat about Johor's property market as the state's economic zone takes shape and companies continue their investments.

This year, the administrative centre in Nusajaya and the customs, immigration and quarantine complex will be completed.

The construction of a road linking Johor Baru to the administrative centre and the coastal highway to Pasir Gudang/Permas Bridge will also start this year.

"With these initiatives in fruition in 2008, the confidence in the property market will create added demand for the industrial sector from foreign direct investors," WTW said in its Property Market Report 2008.

In the first half of 2007, Johor recorded 19,242 property transactions, accounting for 13.4 per cent of total transactions in the country during the period.

In the residential sector, more households are due to upgrade their units due to higher purchasing power. This means opportunities for developers to launch high-end residential units.

"In what was believed to be a primarily Klang Valley-based market, real estate investment trusts entered the Johor market in 2007 through Mapletree, Axis and Atrium REITs interest in industrial properties in Port of Tanjung Pelepas, Senai and Pasir Gudang," it said.

Confidence in the retail market is reflected in the continued expansion by retailers like Tesco, Carrefour, AEON and Ikea.

Tesco entered into a 30-year lease for a 3.88ha site to operate a hypermarket in Pulai, AEON Co (M) Bhd bought a 15.1ha site in Bukit Indah for RM106.97 million to develop a shopping centre, and Swedish furniture retailer Ikea bought a 14.78ha site in Desa Tebrau for RM64.366 million to set up its second outlet in Malaysia.

By New Straits Times (by Hamisah Hamid)

Tangkas plans green factories

A model of Tangkas Arena light industrial area

Tangkas Properties Sdn Bhd, the property development arm of Mudahjuta Industries Sdn Bhd, is planning a new light industrial area in Subang Jaya with factories that have eco-friendly features and innovative facilities.

Managing director Yogi Wong said Tangkas Arena, comprising 17 factory units in the prime UEP Industrial Park, would have a gross development value (GDV) of RM45mil.

To be completed in the next three years, it offers non-conventional factories with sophisticated architecture that breaks away from the stereotypical workshop stigma.

“This will provide a good corporate image that reflects a new generation of entrepreneurs,” Wong told StarBiz.

“Each unit will be equipped with integrated pro-environmental products to pioneer active ecological participation.”

One of the eco-friendly features is the net-metering system. Photovoltaic cells (solar panels) generate power from the sun, which is then fed back into the national supply grid for a net deduction in monthly electricity bills.

Wong said the Malaysia Building Integrated Photovoltaic scheme was promoted by the National Energy Centre (PTM) and supported by the United Nations Development Programme.

“Solar panels are expensive, so if business owners purchase these panels from authorised dealers, they would stand to enjoy a 25% subsidy with a further 27% income tax allowance from PTM,” he said.

Another feature is the clean thermal insulation system with Dow Styrofoam to reduce heat entering the building and subsequently reducing energy consumption in cooling.

Wong said these innovative features would also offer owners and investors alternative resources against the inevitable increase in energy prices.

Tangkas Arena comprises 17 units with carefully planned layout that gives much consideration for factory functions, production flow and internal logistics. The units, priced from RM2.88mil to RM3.3mil, will have 11,000-sq-ft built-up space.

Wong explained that by optimising the land area provided, the three-storey structure offered two production levels with generous ceiling allowances and an uninterrupted clear space of 3,200 sq ft per floor.

“The separate production levels are then synchronised by a spacious two-tonne low-energy good lifts, effectively allowing continuous flow of operations simulating one large factory floor space,” he said.

Giving further considerations to factory workings, Level 1 is able to support working loads of 7.5 kiloNewton per sq metre (kN/m2) while Level 2 has been upgraded to 5kN/m2.

Level 3 is a very versatile space that may serve as a corporate office or further support the light industrial operations below.

“All three levels of floor surfaces are grinded down from solid Grade C30 concrete and treated to provide enhance resistance to abrasion.

“For those who require much higher tolerance or hygienic considerations, this concrete provision allows a further but simple procedure to turn the existing surface into a seamless high-gloss finish,” Wong added.

To maintain incessant working spaces, each unit has a separate service tower with staircase leading up to a tank room where 2,200 effective gallons of water storage is available.

This is in addition to rainwater catchment tanks that are also provided to recycle water. The tower also allows alternative controlled access into each level while serving as a fire escape.

Wong observed that inadequate power supply has quite often been the grouse of industrial factory operators. “Therefore, Tangkas Arena has provided the electrical system and support circuits with the option to upgrade up to 200 Amps upon easy application to Tenaga Nasional.”

Instead of providing an inaccessible back yard, Tangkas Arena decided to incorporate a well-lit 40ft public road in the back lane for further function support.

He added that such features would perfectly suit numerous types of light industrial businesses from food and beverage preparation and distribution, printing plants to studio and production houses and even research laboratories.

By The Star (by Laalitha Hunt)

More shop offices for Shah Alam

The newly completed Jayamas 1 shop offices fronting Jalan Montfort at TTDI Jaya in Shah Alam. There are more and more shop offices coming up in Shah Alam

Many new shop office developments are coming up in Shah Alam.

The surge in supply of shop offices is especially evident over the past one to two years when more than a dozen new shop office projects were launched, and more are in the pipeline.

Like in many other parts of the Klang Valley, shop offices are making a strong comeback to the Shah Alam property scene but with new concepts and designs. Each of these projects has its own unique selling points (USP) to command a premium.

Among the reasons for the rising supply of shop offices in Shah Alam are the fairly good demand for commercial property in new growth areas; the shortage of commercial land in prime areas, particularly in the city; the trend for companies to move away from the congested city centre; lower pricing compared with Kuala Lumpur or Petaling Jaya; and the spill-over effects of Port Klang's bustling business community.

Some parts of Shah Alam, like Sections 7 and 13, are experiencing a commercial property boom. Some of the new shop office projects have moved away from the traditional two-storey designs to three, four and even five-storey types that can cater to larger companies. Most of the older shop offices were built by Selangor State Development Corp to cater to a few hundred houses but today, the scenario has changed with modern-style shop office projects very near to each other.

Several new shop office projects are coming up around the decade-old two-storey shop offices in Tadisma Business Park (near Giant) which are almost fully tenanted, and a few units are being offered for sale for between RM700,000 and RM800,000.

The following are some of the new shop office projects in Shah Alam.

Commerce Galleries @ OnetwoOne D'Kayangan in Section 13: Of the 44 units of four and five-storey shop offices under Phase 11A, there are currently only 26 units left since its launch in late February.

Lebar Daun Development Sdn Bhd sales and marketing manager Arman Putera said another 44 similar units under Phase 11B would be launched soon in view of the good sales.

“We call our shop offices 'commerce galleries' because of their big sizes. The intermediate 26ft x 80ft four-storey units, priced from RM2.09mil, have close to 8,000 sq ft built-up area while the corner 44ft x 80ft five-storey corner units, priced from RM4.1mil (both prices are for bumiputra buyers), have about 15,000 sq ft built-up area,” he said.

Arman added that the ground floor “galleries” could accommodate 20 cars for an auto showroom or a banking hall with 20 plus counters!

“People may initially think that our prices are high but our sizes are big. It works out to only about RM250 per square ft which is the most affordable in Section 13. For businesses that require a mere 1,000 sq ft, our studio offices are very affordable,” he said.

This is the first commercial project in Lebar Daun's D'Kayangan development that would have 1,200 residential units when completed in seven to eight years.

USP: Its big ground floor shops are ideal for auto showrooms, banks, furniture shops and businesses that require good visibility. Location is good as this leasehold project is in the 300-acre D'Kayangan new township and about 100 metres from Stadium Shah Alam and Stadium Melawati. It is also near Tesco, Tesco Extra and Giant hypermarkets.

Laman Seri Business Park in Section 13: Soft launched recently, this leasehold development by TTDI Development Sdn Bhd comprises six blocks of four and five-storey shop offices (46 units) that boast modern designs.

The bumiputra price (units facing the main road) is RM2.63mil for the intermediate shop office and RM3.88mil for the corner four-storey shop office.

TTDI Development Sdn Bhd chief operating officer Eng Kim Leng said sales had been very encouraging, adding that the project's proximity to many amenities such as colleges, Giant, apartments and highway linkages were plus factors.

USP: Good location, a 37,000-sq-ft central events piazza for alfresco dining and water features, dual frontage, double-volume office space (front portion only) for 39ft-wide corner units, handicapped-friendly design layout, wide pedestrian thoroughfare and two intermediate shop offices sharing a lift with common lift lobby. Premium corner lots will have their own lifts. Intermediate units will have 26ft-wide frontage and ample parking with 900 bays.

TTDI's fully-sold freehold Jayamas 1 two-storey shop offices (26 units) fronting Jalan Montfort in TTDI Jaya are also poised to benefit from the rapid transformation in the nearby Bukit Jelutong Industrial Park area where a mall is coming up. Another 26 units of shop office called Jayamas 2 were launched recently. There are only a few units left.

MSC-status shop offices in i-City in Section 7: Several shop office projects have been launched in Section 7 but the most advanced in terms of design and concept are those at the proposed RM2bil i-City.

Smart-community developer I-Bhd that was recently awarded the MSC Malaysia Cybercentre Status for its i-City will launch 34 units of three and five-storey shop offices in July or August.

Its first batch of 44 units of three and five-storey shop offices with ultra modern designs have been sold and completed.

With the MSC status, the shop offices that were initially sold for RM1.58mil (three storeys) and RM3.3mil (five storeys) would be increased to RM1.98mil and RM4mil respectively for the new batch.

USP: Nice design, good location and its MSC status which allows owners/tenants to enjoy a host of MSC facilities including power generators, fibre-optic cablings, top security system with CCTVs (alarm system linked to fire stations, hospitals etc) and brighter energy saving lighting.

Alami in Section 7: This leasehold project by Worldwide Holdings Bhd is about 45% completed. The 56 units of three and five-storey shop offices priced from RM1.2mil and RM2.1mil respectively would be ready end of this year.

USP: Good visibility as it fronts the Federal Highway and its “safe environment” concept with CCTVs and security services. About 16 units have been sold.

SpaceU8 in Bukit Jelutong: It will be the first commercial hotspot in Selangor to adopt the SUMO (shop unit mall office) concept that combines business and leisure under one roof. It is located along Jalan Montfort and within the fast-growing Bukit Jelutong Industrial Park.

USP: dual frontage featuring a shop office on the outer frontage with an inner façade for a retail outlet. There will be a 70,000-sq-ft central covered courtyard.

By The Star (by S.C.Cheah)

Perak’s wealth creation

An artist’s impression of a redevelopment project at Jalan 225, Petaling Jaya, by Axis Reit

The Perak state government would issue permanent land titles to about 10,000 holders of temporary occupation licences (TOL) in 134 new villages, its Mentri Besar Mohammed Nizar Jamaluddin said last week.

This will bring about a sea change to these new villages where the residents have been living since just after the Second World War. Although the new villagers will continue to live where they are, land titles will give them ownership of their houses.

That will create a measure of wealth for these 10,000 families. If we assume that ownership represents a value of about RM50,000 per property, a total value of RM500mil will be granted to these families.

In addition, it will produce a major multiplier effect. The new villagers will be more ready to renovate their houses if they have land titles, and they can use their houses as collateral for bank loans, which are important for those who are small businessmen and petty traders.

Such a figure may not amount to much in the Klang Valley, but it would mean a lot to the local economies in Perak.

In this wealth creation process, not a square foot of land is created, but it makes a big difference in transferring latent state land to a large number of “squatters”.

This is the model advocated by Peruvian economist Hernando de Soto who has advised many governments. His line of reasoning was that the poor who “squat” on state land in Third World countries had houses to live in or farms to work on, but did not own them – land titles would enable them to sell the property or use them as collateral for bank loans.

Such a programme would unlock the values of squatters' land, which to de Soto's estimate, total more than US$9 trillion worldwide. This creation of capital for “squatters” is of crucial consequence in a capitalist system.

It would also narrow the disparity in income and assets between poor “squatters” and those in the towns and suburbs, an important endeavour in any economic policy.

De Soto's model is applicable, of course, only where state land, and not privately owned land, is involved and where the “squatters” have lived or worked the land for many years or decades.

Thailand, under former prime minister Thaksin Shinawatra, implemented a Capital Creation Scheme in 2003, following de Soto's advice. Bill Clinton had told Thaksin about de Soto's views when the former US president visited Thailand in 2002, according to Internet reports. The effects of the scheme in Thailand are not known.

Civil affluence
Amid the uncertainties over the strength of consumer demand, one sector that still has drive in demand is the civil servants' group.

One indicator of this is Bank Kerjasama Rakyat Malaysia Bhd's target to achieve a pre-tax profit of RM1bil this year from RM829mil last year. These are large profit figures, bigger than those of even the mid-sized commercial banks.

It shows the strength of demand in the Government sector as Bank Rakyat mainly gives personal loans to civil servants.

RCE Capital Bhd, which is engaged in the same business, is also tapping that demand. Its loans receivables grew to RM565mil at the end of last year from RM418mil six months ago and RM349mil a year ago.

Thus the company's earnings are secure for the next few years in view of this sizeable loan book. The level of non-performing loans is very low as repayment from borrowers is made by deductions against their salaries.

Developers have also reported brisk demand from the civil service sector. In Glomac Bhd, for instance, one of the biggest portions of unbilled sales in its books was contributed by its Bandar Saujana Utama project in Sungai Buloh, Selangor.

Those who do not even know where that township is located would wonder if houses there would sell. Although that's far out in the suburbs, it is understood that Saujana Utama is selling well, with many of its buyers being civil servants.

RB Land Holdings Bhd is also understood to have found firm demand from civil servants for its houses in its Shah Alam 2 township.

The upbeat demand in this sector would have arisen from the hefty pay rise for civil servants in July last year.

REITs on the rise
Prices of real estate investment trusts (REITs) have declined everywhere, including those on Bursa Malaysia. The effect is that dividend yields have risen as unit prices of the trusts declined.

In some cases, yields have increased to over 8%, and as the business model of REITs is to purchase properties with yields above its own yield, it has become much more difficult for the trusts to expand.

REITs can also purchase properties with yields above that of borrowing costs, but some of the REITs have borrowed up to the regulated maximum of 50% their equity.

Axis REIT adopted a good approach to continue on its expansion path. It created 50 million new units, which it placed out at RM1.80 each in January. That raised RM90mil cash and expanded its capital base and borrowing capacity.

A day after the placement, Axis announced the purchase of two properties in Johor for a total of RM27mil, and last week, it proposed to buy another two buildings in Johor, also for a total of RM27mil. All these properties offer a yield higher than Axis' borrowing cost.

After the share placement in January, Axis' net gearing is about 35%, which gives it space to finance further purchases with debt.

AmFirst REIT announced last week it completed its purchase of Summit Subang USJ, a combination of a retail mall, office tower and hotel. The acquisition will raise its dividend per unit (DPU) by 2 sen, giving a forecast total DPU of 9.3 sen, AmFirst said in a statement.

AmFirst offers a yield of 10.6% on that forecast yield, which is unusually high for any asset class. That also shows the market fear of an economic slowdown.

By The Star (by C.S.Tan)

Penang as outsourcing and training hub

The new Penang state government wants to develop the state into an outsourcing and training centre for new industries.

Lim Guan Eng says Penang state government will continue leveraging on its core competencies in the manufacturing and electronic sectors.

Chief Minister Lim Guan Eng told StarBiz that the animation business was one of the industries being explored.

“An animation valley should preferably be located on the island. It should comprise private schools and animation companies.

“The schools can provide the training while the companies can receive jobs outsourced from overseas countries,” he said.

Lim said the idea was to model the centre after the Hamburger University owned by fast-food chain McDonald's. “Students trained at the university are then sent to the different outlets of the group worldwide.

“Similarly students trained by the schools can obtain employment from the companies at the centre. This would help Penang to become an animation hub in the Asean region,” he said.

According to Lim, many local students trained in the animation field at public vocational schools have to go to other countries such as Singapore to find work.

“With such a centre here, they can stay back in Penang instead,” he said. Lim envisions the centre as a private and public initiative. “The state government would look into giving appropriate incentives for the private sector to take part in the project,” he said.

Lim said the state government would continue leveraging on its core competencies in the manufacturing and electronic sectors.

“We will also carry on looking for new investments that can offer highpaying jobs,” he added.

On the housing sector, Lim said the Malaysia My Second Home Programme (MM2H) was an important source of revenue for the state.

“The bulk of investment for MM2H comes to Penang, amounting to about RM500mil per annum.

“We will take immediate steps to clean up the beaches, beef up security and introduce new tourism products to attract more investments into Penang for second homes,” he said.

Lim said the state government was also exploring the setting up of an international exposition centre at the current Pesta site in Sungai Nibong.

“Besides the Penang International Sports Arena (PISA), we need to have another centre for exhibition purposes.

“The plan is also to have a food and beverage complex to showcase the well-known local delicacies,” he said.

By The Star

Asian property offers attractive returns

SINGAPORE: Asian property offers attractive returns even as the US housing market enters what may be a prolonged slump, Hong Kong-based Intellectual Property Global Ltd said.

US foreclosures rose 60 per cent in February after surging to a record in the fourth quarter of 2007, and that could worsen a decline that started last year, said Tim Murphy, managing director of IP Global, a real estate advisory firm. Assets in emerging markets such as Asia offer a safer bet, Murphy said last Thursday in an interview in Hong Kong.

"I think the majority of Asia sits very well," Murphy said. "Wage inflation is still pretty good and interest rates are not too scary."

Sales of existing homes in the US fell from a record annual pace of 7.08 million in 2005 to 5.65 million last year, according to Fannie Mae, the largest US mortgage buyer. Median home prices could extend declines as the number of unsold properties builds up and prospective buyers stay away.

"I think it's here to stay now," Murphy said of the US housing decline.

Vietnam is his favourite market in Asia, he said. Only 5 per cent of the population is taking out a mortgage, meaning there is large potential for growth.

By Bloomberg

Taiwan real estate market set to boom: Analysts

TAIPEI: The property market in Taiwan is set for a boom if president-elect Ma Ying-jeou can improve relations with mainland China and stimulate the island's sluggish economy, analysts say.

Market-watchers expect a rise of 20 per cent or more by the end of 2008 if Ma keeps his pledge to liberalise economic exchanges with China - and some say there are already signs of soaring prices since his election last month.

"Luxury residential property prices in certain districts of Taipei jumped one-third right after Ma's victory," said Chang Hsin-ming, a marketing consultant with US-based ERA Real Estate.

He said site visits by potential homebuyers were up 30-40 per cent in recent weeks, with many believing that the tense political rivalry with China will ease under Ma's leadership.

Ma, who takes office on May 20, campaigned on a vow to help create a "commom market" with China across the Strait, improving trade and tourism by lifting barriers to the free flow of goods and people between Taiwan and the mainland.

Since the early 1990s, Taiwanese investors have channelled an estimated US$150 billion (US$1 = RM3.19) to China, which has become the island's largest trading partner and biggest export market.

Doing away with trade barriers would increase the flow of money in the other direction, and allow Taiwan to take better advantage of the vast new wealth being created in China today, say analysts.

A survey by North Rehouse, a Taipei property firm, found that 67 per cent of mainland investors were willing to buy real estate in Taiwan once restrictions are eased - and predicted prices would go up 30-50 per cent by year's end.

Despite the decades of official hostility, there are many Taiwanese based on the mainland - and they will also be looking to channel funds back to the island, Chang said.

"A more relaxed China policy will encourage Taiwan investors on the mainland to repatriate their profits back home without controls," he said.

"Such fund inflows, no doubt, will benefit the local property market."

Andrew Liu, managing director for real estate firm Colliers International Taiwan, said he was "cautiously optimistic" about the outlook for the local market - particularly for commercial property.

"Taking expanded cross-Strait economic exchanges into account, rental in Taipei office spaces may rise some 10 per cent a year by 2011," he said, up from previous industry estimates of a 5-7 per cent annual increase.

By AFP

India's Parsvnath to invest US$5b in realty projects

CHANDIGARH (India): Real estate firm Parsvnath Developers Ltd plans to invest about US$5 billion (US$1 = RM3.19) in the next three to five years on different realty projects in India and to increase the land area it will develop, a top official said.

The company intends to have 350 million sq ft of commercial area by the end of this fiscal year from 209 million sq ft now, its chairman Pradeep Jain said last Saturday while inaugurating a township in Chandigarh.

The investments will be in different ventures including residential projects, integrated townships, special economic zones, hotels and retail business.

The company also plans to venture into the hospitality sector, with an investment of US$1.5 billion in this segment in the next three to five years, he said.

"We propose to build about 100 hotels in different categories which will have 10,000 rooms," Pradeep said.

It has a joint venture with ITC's subsidiary Fortune Park Hotels Ltd and Royal Orchid Hotels Ltd to manage hotels across India, he added.

Of the total planned investment, about US$2 billion would be spent on projects in north India. It has two special economic zones coming up, a residential colony, an integrated township and a 200-room five-star hotel.

The company expects to realise about US$1 billion from Prideasia, the project it inaugurated, the land for which it acquired for 8.2 billion rupees (100 rupees = RM8.34).

The Parsvnath group is also exploring possibilities for a foreign collaboration to move into the retail business.

"Discussions are on to have a tie-up with a foreign company to set up hypermarkets in India, but I can't comment further," Jain said.

By Reuters

Resort trends to watch

The world's changing climate is causing an unprecedented period of innovation and reinvention

Building a mega resort development has never been more challenging than it is today. Besides having to worry about the question, “If we build it, will they come?”, developers also need to consider the extent global warming will have on their resorts.

For instance, ski resorts could be literally finished if, by the time they are completed, the weather is not cold enough to produce snow – they can’t depend on the artificial powder alternative forever!

In 2006, Paris-based Organisation for Economic Cooperation and Development (OECD) predicted that by the year 2050, over one-third of Europe’s top ski resorts would disappear because their low-lying slopes would succumb to higher temperatures.

While many leisure industry experts think the finding is unduly pessimistic, many established winter resort operators are not ignoring it.

Eco-friendly operations
In Aspen, Colorado, one of the most famous mountain resorts in the United States, the Aspen Skiing Company decided to purchase renewable energy certificates from wind farms to offset all of its electricity use – about 21,000 megawatt hours.

To reduce pollution, it also uses biodiesel to fuel its snow-grooming equipment, while the heating and cooling for its Snowmass Golf Clubhouse come from watersource pumps located in a pond.

In Europe, the threat of climate change has made many new and refurbished Alpine resorts look beyond eco-friendly strategies to ensure continued revenue attraction. This includes expanding on their menu of winter-based sports with activities that can be enjoyed during three or four seasons, such as golf, tennis, rafting, canoeing and hiking.

Eco-resorts pave the way
Despite the growing importance of eco-resorts – projects focused on environmental sustainability – they have so far largely been built on a small-scale by local individuals or companies.

One of them is Whitepod near Aigle in Switzerland. As a result of its commitment to provide a holiday experience with zero impact on the environment, it uses furniture produced locally from sustainable wood and water from a rainwater recuperation system.

In Lungau, Austria, St. Martin Chalets is Europe’s first energy self-sufficient resort that uses materials such as local larch and pine insulated with sheep’s wool for its main structure.

Near Llangollen in rural Wales, the Whitewater Country Park – touted as the United Kingdom’s first ecoresort – is built of solid log, while in Poprad in south-west Slovakia, the Aqua City spa resort has been designed to draw 80 per cent of its electricity from geothermal water, solar power and wind turbines. By the end of this year, it hopes to be completely self-sufficient in energy generation.

Greener development strategies
In Tahoe, California, the Village at Northstar resort features an extensive trail system complemented by a shuttle service and bicycle tracks to get its guests out of their cars.

To minimise disruption to the environment and keep the cars out of sight, its parking is tucked underground, beneath the buildings.

So far, three buildings with 100 ski-in, ski-out condominiums, a commercial precinct, a fitness facility and a slopeside owner’s club, have been completed. The structures have been strategically placed to maximise natural daylight penetration, while over 50 per cent of waste caused by its construction have been recycled by the contractors.

Warm-weather resorts too are tackling climate change issues by rethinking their approach to land use, traffic management, building design and sustainable development.

With their guests becoming more sophisticated and increasingly rejecting created environments, they are seeing this strategy of adopting green development techniques as providing a win-win solution.

Carbon-neutral resort
In Bulgaria, an emerging resort destination that does not have a history of international tourism, architectural practice Foster & Partners recently put together a masterplan for a carbon-neutral resort located on the Black Sea coast.

The development, known as Black Sea Gardens, comprises a series of automobilefree hill towns set amidst oak forests, meadows and river gorges.

Its residential clusters will accommodate some 15,400 residents in a layout that will follow the contours of the landscape so much of the site can be preserved as virgin terrain.

Anchored by a 220-berth marina and with a lakeside spa, activity centre, sports park, restaurants and shops, these hill towns are themed according to the nature of their immediate surroundings, such as “Sky Village”, “Wilderness Village”, “Meadow Village”, “Cape Village” and “Sea Village”.

To create a calm, pollution- free environment, the roads leading to this leisure destination will be inland and away from the seafront. Residents will also be required to leave their cars in an underground car-park at the entrance to each village and commute either by foot, electric shuttle bus, electric pool car or bicycles.

The resort industry is entering an unprecedented period of innovation and reinvention that is likely to accelerate in years to come, with the push coming primarily from the growing recognition of the need to protect our fragile environment.

As is the case for most businesses, the winners will be those that can successfully create places and experiences that will continue to be authentic 20 to 30 years after they are built.

By New Straits Times (by Lim Lay Ying)

Lim Lay Ying is managing director of Research Inc (Asia) a company specialising in market research and consultancy for all facets of real estate development.

The natural upgrade

Mah Sing's Hijauan Residence aims to satisfy the growing demand among home improvers to rediscover nature

If you’re looking to move up the home ownership ladder because you believe it’s “greener on the other side”, here’s one place that actually lives up to the adage.

Situated on 42 acres of freehold land on the periphery of the Klang Valley’s Hulu Langat Forest Reserve is Hijauan Residence, an eco-themed gated-andguarded enclave that will exclusively comprise semi-dees and bungalows.

Adding to its appeal is the fact that the project is in Cheras, Kuala Lumpur, which is fast becoming a sought-after address due to the area’s improved infrastructure and amenities in recent years.

Developed by Mah Sing Group Bhd (MSG) subsidiary, Loyal Sierra Development Sdn Bhd, Hijauan Residence has proven to be popular among buyers looking to reconnect with nature, with all the semi-dees and link semi-dees offered in its first phase almost sold out.

Winning them over, said the developer, is the project’s green hilly backdrop, fresh and cool surroundings, eyecatching entrance statement, promise of extensive landscaping, and the “green street” concept that promotes a safer as well as more contemporary environment.

In terms of security, MSG pointed out that each phase will have individual guardhouses and 24-hour surveillance.

To encourage a healthy community, Hijauan Residence will also feature a resort-themed clubhouse equipped with facilities such as a swimming pool, gym and other amenities.

For those who missed out on the first opportunity, the good news is that the second phase is poised for launch and is now open for registration.

This time, the offer comprises 30 houses that will come in a variety of types ranging from double-storey semi-dees to large three-storey bungalows.

With the bungalows going for under RM1 million, Hijauan Residence represents a value buy, since simillar units in the area are pricier.

The second phase units will be styled with the “three-generation” home concept, and come with high ceilings, large windows that allow plenty of natural lighting inside, an outdoor shower in the master bedroom, a smart home alarm system and a porch that can fit three cars.

To give prospective buyers a clearer insight into the lifestyle proposition Hijauan Residence is offering, Mah Sing has built a show house on site.

The project's location at the periphery of the forest reserve, just minutes from the city, offers the best of both convenient and healthy living

By New Straits Times (by Chris Prasad)

Shah Alam gets new 'big-name' attraction

Those seeking a business address in Selangor’s capital of Shah Alam can now consider Commerce Galleries@One Two One. This mouthful-of-a-name project is being developed by Lebar Daun Development Sdn Bhd (LDD), and is slated for completion by 2010.

LDD executive director Noorazhar Muhd Nurdin said, “The galleries will be a unique commercial centre, where similar businesses will be placed together at specific parts.

“For example, there will be a financial street for banks and financial institutions.”

Located adjacent to the Federal Highway and Jalan Batu Tiga, and part of LDD’s D’Kayangan development, the centre will have 121 Grade A commercial lots that will collectively have a gross development value of RM350 million.

To be completed in three phases, the project will comprise four blocks with corner lots coming in dimensions of 44ft by 80ft, and intermediate units of 26ft by 80ft.

Prices range from RM209,999 for a stratified studio unit to RM4 million for a corner unit.

“We are confident that the remaining 30 of the 38 units (in the first phase) will be snapped up within the next three months,” Noorazhar said, adding that the second and third phases are expected to be open in July and December this year.

LDD also plans to launch its RM600 million Shah Alam Triple Tower integrated commercial project soon.

The company has a landbank of more than 1,482 acres in Selangor and Pahang, of which 494 acres have been developed.

Its past ventures include D’Kayangan and Bukit Bandaraya in Shah Alam, as well as Taman Dato’ Kemang in Seri Kembangan also in Selangor.

By New Straits Times

Will Penang’s property market continue to boom?

An artist impression of Gurney Paragon overlooking the Straits of Malacca.

A couple of weeks ago, the Penang state government created a stir when it said it would review the billion-ringgit Gurney Paragon project if there were “justifiable grounds”.

Chief Minister Lim Guan Eng said the state government would get views from all quarters and welcomes any objection.

“We will revisit the projects approved by the previous administration and if necessary, review them if these projects are adversely affecting people’s lives,” says Lim.

Lim was responding to calls by the Penang Heritage Trust (PHT) and Bar Council Legal Aid Centre to review and hold an open hearing on the project.

Gurney Paragon is a mixed integrated development by Hunza Properties (Penang) Sdn Bhd comprising a mall, two blocks of high-end condominiums and a heritage building spread over 4ha of freehold land on Gurney Drive fronting the sea.

The land was formerly occupied by the Uplands International School.

The company bought it in 2004 for RM97mil.

For several years, Penang’s property market has drawn buyers from far and wide. Be it a holiday home for Malaysians or a retirement home for foreigners under Malaysia, My Second Home (MM2H), the island’s properties have exchanged hands at a premium compared with Kuala Lumpur’s prices.

E&O Property Development Bhd marketing and sales director K C Chong says comparing like with like, the land component in Penang is different from that of Kuala Lumpur.

For example, a KL gated development may be RM150 per sq ft compared with Penang’s RM250. E&O is developing Seri Tanjung Pinang, an upscale master planned water front development.

Because it is an island, land comes with a premium. And there is certainly demand for Penang properties.

Island living offers a heady blend of sun and surf with an option of city or quiet suburban lifestyle.

Although the island is only about 1,000 sq km, it offers a potpourri of all things that foreigners and locals enjoy.

Real Estate and Housing Developers’ Association (Penang) chairman Datuk Jerry Chan Fook Sing says Penang’s selling points in attracting foreign retirees include comfort, cuisine and affordability.

Datuk Jerry Chan

In some ways, this accounts for the various landed and high-rise condominiums coming up along the Tanjung Bungah stretch right up to the Spice Garden.

Developers are building along hill slopes, each offering the best view of the Straits of Malacca and the Andaman Sea.

Chan says foreigners purchase a third or more of properties that come up in popular tourist areas.

Developers who are aggressive with the MM2H programme reported the same percentage of foreigner buyers.

“A third to 35% is not the norm generally. But by and large, locals and Malaysians working aboard account for a large number of Penang property buyers,” says Chan.

Among the most popular locations among foreigners include Tanjung Bungah, Pulau Tikus area and Gurney Drive.

Most of these projects are launched in Hong Kong, Singapore, Britain and the Middle East besides locally.

It is against this popular demand, growing affluence of Penangites, a shortage of upscale lifestyle products and the growing medical tourism offered by the island that Klang Valley-based developers like IJM Corp Bhd, S P Setia Bhd, Bolton Bhd, Malton Bhd and E&O Property Development have moved north to compete with the likes of Penang’s big boys like Hunza, Oriental group, Naluri Corp Bhd and Ivory Properties group, PDC Properties Sdn Bhd.

And because of the shortage of land and burgeoning demand, several have gone into land reclamation.

These include the E&O group, IJM, PDC and CP Land.

Nevertheless, the operating environment today has come under scrutiny, with the change in state government, coupled with the global turmoil originating from the US, developers in the country as a whole may find it increasingly difficult.

Various factors ranging from rising competition, concern over sustainability of demand by foreign purchasers, rising construction costs, inflation and a global economic slowdown as well as potential oversupply are reasons for concern.

A research report by ECM Libra on the country’s overall property sector says the onslaught of negative sentiments of late has to certain extent negated the positive impact of catalytic initiatives introduced by the government since late 2006.

Sharp correction of the stock market has caused enormous wealth evaporating into the thin air.

“This will put a dent on consumer confidence and sentiment. Huge capital investment such as the purchase of new homes may be put off for the time being.

“Demand for properties by foreigners may also wane in the coming months due to the uncertain landscape as well as the debilitating global financial market,” the report says.

The report says developers in the states of Selangor, Penang, Perak and Kedah may face potential delay in procuring planning approval for new projects post-general election due to teething problem arising from the change of state administration involving state executive councillors as well as municipal councillors.

On a more positive note, Penang-based Michael Geh, director of property consultancy at Raine & Home International Zaki + Partners is of the view that those who need to buy homes will continue to buy.

“Life goes on. Those who constantly invest will pick and choose the best and sideline the average offerings.

“For those on MM2H programme, surveys taken by expatriate magazines shows that Penang rates very high as a favourite destination. Kota Kinabalu is favoured for its beachfront lifestyle living while the Middle Easterns like the KLCC precinct.

“It is our world class local food, friendly locals who speak English and a less hectic lifestyle that are bringing foreigners here to Penang,” says Geh.

Rehda Penang chief Datuk Jerry Chan says the new state government has reassured him that it will want to expedite things and be more transparent, which bodes well for the business community.

“What happened in Penang, and in the states of Selangor, Perak and Kedah, is quite drastic. And in any situation of such magnitude, it is only natural to pause. But in the long term, we will want to give the new government a chance.

“They have not said anything that is business adverse. As for the Hunza’s Paragon on Gurney, that is a mega job and it is only natural that mega jobs such as these, which impact people in different ways, be given a relook,” says Chan, who is also the managing director of Asas Dunia Bhd.

By The Star (by Thean Lee Cheng)

Bindev to unveil final phase of Bukit Istana

Properties worth RM70mil in low density residential project


An artist’s impression of the phase three of Bukit Istana project. Inset is Lim Yoke Kim

KUANTAN: Bindev Sdn Bhd is offering properties worth about RM70mil under the final phase of its upmarket and low-density residential project Bukit Istana.

The units would have a land size of 4,000 sq ft and built-up areas of 3,000 sq ft, said branch manager Lim Yoke Kim.

“The third and final phase will comprise 148 double-storey semi-detached units and four bungalows. The units are priced from RM480,000,” he said.

The last phase boasts features such as high ceiling, high-panel glass windows to allow more natural sunlight into the house and three-phase electrical wiring.

A subsidiary of PJ Development Holdings Bhd (PJD), Bindev commenced construction of Bukit Istana during the 1997 financial crisis and has completed 150 bungalows, 226 double-storey semi-detached units and 72 single-storey units, of which about 92% are sold.

The project covers 54.4ha and has a gross development value of about RM250mil.

According to Lim, Bindev continued with the project during the financial crisis as it had confidence in the state’s house buying market.

“Our target is the professionals and top level management especially those working in the Gebeng industrial area and Kuantan Port,” he said in a recent interview.

On future projects, Lim said Bindev planned to develop two plots of land in Sungai Karang and Penor.

The Sungai Karang project was located along Kuantan’s popular beach belt and was close to Swiss Garden Resort and Spa, a hotel under PJD’s hotels, resort and leisure division, he added.

Construction on the mixed development project comprising condominiums, bungalows and semi-detached units on 8.8ha was expected to begin at year-end for completion in three years, he said.

Lim said the Penor project, also a mixed development venture, would be built on 400ha and completed over 20 years.

Construction would commence at the end of next year, he added.

On its future projects, Lim said BSB had plans to develop two plots of land in Sungai Karang and Penor.

The project in Sungai Karang was located along Kuantan’s popular beachbelt and was close to Swiss Garden Resort and Spa, a hotel under PJ Development’s hotels, resort and leisure division, he added.

He said it would involve a mixed development project comprising condominiums, bungalows and semi detached units on 8.8ha of land with construction expected to begin end of the year.

It would also have a clubhouse and would be the first feature to be constructed, he said, adding, the whole project was scheduled for completion in three years.

Lim said the Penor project, another mixed development venture, would be built on 400ha of land and to be completed in stages over 20 years.

Construction would commence end of next year, he added.

By The Star (by Roslina Mohamad)

Navigating the storm: Asia’s real estate

Asia's Real Estate

In Hong Kong, strong economic growth continues to support residential market.

The confluence of economic uncertainty brought on by the deepening subprime crisis has posed a real risk of a systemic financial event and a prolonged global economic slowdown. This, coupled with another round of de-leveraging in the structured credit market has led to further pressure and deterioration in real estate prices, predominantly in the US and Europe. Given that the pendulum swung as far as it could in the direction of reckless mortgage lending, it will now swing back towards the quaint notion of buyers being lent only the amount they can reasonably be expected to pay back.

Whilst the rout has largely been confined to markets outside Asia, we see considerable softening in real estate markets with high foreign participation and in certain high-end segments. Opportunistic investors are pulling back from Asian property given more scope for acquiring distressed assets in their home markets, and loans remain elusive in Japan and Singapore, one of their favourite markets.

Hedge funds have stopped dabbling in property in the region, and although private equity players will continue to develop property in India and China, they are more likely to buy buildings cheaply in Western countries than in Asia.

We expect values for US commercial real estate to fall by 23% in the next five years from their 2007 peak, causing losses of about US$1,600bil, including those on commercial mortgage backed securities.

London office values have dropped 12% from a peak in the middle of last year, and will be under further pressure from forecasts of a 15% decline in rental values through 2009.

In 2007, total direct investment in Asia jumped 27% to US$121bil – a sixth of the global total – with approximately half invested in Japan and Singapore.

Real estate stock in Asia currently stands at US$9.5tril, growing on average by 6% - 7% p.a (except in China which grew by 15% p.a). China and India make up 50% and 12% of the total stock respectively while Japan constitutes 20% of the total.

The demand for real estate is dependent on the health of the economy, which in turn is affected by financial markets.

In 2008, we expect prospects for Asia’s real estate to remain lukewarm, especially in traditional FDI led markets like Singapore. The global economy still faces major uncertainties as to how a further unravelling of the credit crisis will affect the availability of credit and asset pricing.

The resilience of Asian economies and the real estate market will be truly tested in 2008. Buoyant domestic consumption is expected to help the region weather a substantial economic slowdown as weaker global demand impacts Asian exports.

Overall, despite the risks inherent in the region, we believe opportunities remain in Asia’s real estate market, mainly in grade-A office space, driven by sound GDP growth (projected at 8% y-o-y) underpinned by sustained private consumption, higher public and private investments; a re-rating of property as an asset class, sustained domestic demand and on-going infrastructure development.

We remain bullish on India and Vietnam, with a cautious view on China, Malaysia and Singapore.

Rent and value

Asia's positive economic growth has shored up property rents and capital values to new highs throughout the region in 2006/07. Prices of residential and non-residential properties in many major and smaller cities continue to rise despite higher interest rates/ borrowing costs across Asia.

Capital flows to the Asian region have increased tremendously since 2005, mainly into major economic sectors such as manufacturing, services and oil and gas, and opportunities remain abundant in the property sector.

The US is among the largest sources of investment inflows into the region; nevertheless, the largest increases in the availability of capital for real estate are expected to come from the Middle East, China and India. The main sources of capital for property investments in 2007 and 2008 remain private equity investment funds, institutional investors and real estate investment trusts (REITs).

Since 2006, the Asia region has experienced strong demand in the residential sector despite high interest rates that led to higher house prices. In mainland China and Hong Kong, strong economic growth continues to support the residential market. Beijing and Shanghai continued to attract high levels of foreign investment that entailed a higher number of expatriate professionals which led to higher demand for luxury residential property.

Residential real estate prices have shot up particularly in Singapore. Singapore’s residential price change in 4Q07 stood at 31.4%. Concurrently, Malaysia witnessed stable prices and rentals for 1H07. Strong demand for high-end residential units in prime cities such as Hong Kong, Kuala Lumpur and Singapore has escalated with the launch of new high-end residential units throughout 2007.

The most expensive residential segments in Asia continue to be Hong Kong, Tokyo and Singapore at over US$10,000 per sq m.

In Hong Kong, the real estate scene has not been very different from other countries in the region with house prices trending higher at 8.78% y-o-y in 2Q07 compared to 0.65% negative growth in 2Q06. The real estate market has been gradually recovering since the country’s downturn in the property market last year, following the housing slump in the US.

We expect interest rate cuts in the US to push prices up further in the residential segment. In Japan, land prices advanced 0.4% y-o-y in 2007, an indication that the Japanese residential property market is recovering from its 15-year price slump.

Moving forward, we expect the Asia’s residential market to sustain growth, albeit in the long term, underpinned by the following factors:

• Strong economic growth in most markets in Asia will support the strong performance in the residential segments.

• Rising income per capita will enhance purchasing power and therefore boost consumer spending. High economic growth, improved employment levels and positive wealth effects arising from equities in most parts of Asia Pacific have led to higher disposable incomes.
  
  Average per capita income for the region rose to US$14,371 in 2006 from US$12,906 in 2004. Per capita income is expected to average US$15,217 in 2007 and US$15,886 in 2008 that in turn, will boost demand for residential properties.

• In most Asian markets (China, India, Singapore, Malaysia) the high-end residential property market has witnessed increased demand spurred by the influx of expatriates and skilled professionals, the region's increasing attractiveness as a second home (retirement) and higher rental yields.

• The demographic profile of Asia is relatively young. Asia’s young population (aged 15 to 59) continues to increase, creating strong demand for housing for ownership occupation and rental increases. India’s population is expected to increase from 1.1 billion to almost 1.5 billion by 2025. In 2006, the working age group of those aged between 15-64 years stood at 64.3% and expects to increase moving forward.

The Asian real estate market capitalisation stands at approximately US$4.9tril, mainly dominated by Japan followed by China and the rest of Asia. We expect this ratio to alter moving forward with strong growth in Asian markets. Apart from Japan, real estate activities are focused in Singapore and China.

A common practice that is picking up in the region is the number of sale and leaseback transactions particularly in Singapore and Japan. We expect this trend to spread across the region over the medium term.

Real Estate Trends

The real estate industry has seen rapid growth across Asia post-crisis, with varying stages of development within each country. Nevertheless, we have identified several similar trends/patterns, unique throughout the region, as follows:

• The real estate sector in Asia is driven mainly by rapid and dynamic growth in the offices and high-end residential segments.

• Prices for residential and non-residential properties in many major cities and smaller cities continued to rise, despite higher interest rates across the region.

• Asia’s REITs markets continued to grow with many companies converting their assets into REITs. The total number of Asian REITs at the end of 2007 stood at 86 with a total market capitalisation of US$74.8bil.

• The overheating property markets in many countries across the region led governments to enforce stricter rules to cool down the situation.

The Chinese government further tightened measures by increasing taxes, requiring developers to build more low-cost houses and tightening rules on property purchase by foreigners. South Korea and India also tightened rules in relation to borrowing.

• In most markets (Singapore, Hong Kong, Malaysia, China, India) demand for office space is highest followed by hotel/resorts, retail, industrial/distribution, homebuilding and apartments residential.

• The strong capital inflow into Asia real estate particularly China leads to the problem of demand exceeding supply. Although the Asia market has unparalleled potential for growth, in most cases, it lacks depth. The lack of a solid investment base to absorb current levels of incoming capital lead to the reflection of the current scenario, therefore increasing the risk of overheating.

Looming subprime issue

We expect the US subprime issue to continue to rear its ugly head well into the year as write downs continue.

However, we expect the impact on Asian markets to be minimal (safe the export sector) given that the region’s financial institutions have relatively limited direct exposures to US subprime mortgages.

In the region, China is the largest overseas holder of US mortgage-backed securities, at around US$260bil, which is held mostly through its international reserve holdings and through holdings of commercial banks.

We take the view that Asia remains relatively insulated from the US subprime issue for the following reasons:

• Asia’s huge pool of international reserves at US$3tril (including Japan and China)

• Asian banks’ exposure to subprime debt instruments is minimal and manageable

• Asian corporate sector leverage is very low

• The banking system has been strengthened and is strongly capitalised

• The financial sector’s direct exposure to equity markets also appears relatively limited

• Asian central banks have taken steps to improve the regulation of high-leveraged activities

• Asian economies have become more resilient to shocks to their capital accounts as external vulnerabilities have been reduced

• Companies depend less on the more risky capital inflows

As such, we expect the contagion from the US subprime crisis to be limited to the capital markets. An indirect effect of the subprime crisis on the region is that it has increased the cost of raising capital for banks, corporate and investment bodies.

New bond issues will have to be priced slightly higher to reflect rising credit market volatility and the anticipated temporary decline in investors’ demand for these products both globally and in the region.

Liquidity on capital markets in Asia remains vast although a re-rating of risk will see some liquidity being sapped out of equities/real estate in the medium term.

Credit market spreads that reached record low levels pre-subprime crisis are likely to widen and remain high into 1Q08, both in the region and for emerging markets as a whole. In the medium to longer-term, as deals get bigger in size and more complex, access to cheap international capital is becoming more important.

The crisis will continue to affect the region indirectly in that it has heightened uncertainty and resulted in a reassessment of risk, as reflected in the periodic declines seen in stock market in 2007.

We expect frequent and large reassessments of risk and high volatility in asset prices to figure largely in Asian economies for the most part of 2008.

Inflation poses a key challenge for the region, which has enjoyed robust expansion in the last few years amidst muted price pressures. Oil prices, which are expected to remain firm in 2008, have raised the spectre of global inflation trending even higher this year.

This poses a key threat to the region’s inflation outlook. We expect oil to trend higher this year to average at US$80 per barrel, vs US$72.4 per barrel in 2007.

A different set of rules will apply moving forward as policy makers strive to balance the need for tighter monetary conditions to rein in rising costs even as growth weakens.

By The Star (by KFH RESEARCH)

Halal certification can open new opportunities

Mohd Shukri Abdullah

KUALA LUMPUR: Companies can benefit greatly from having halal certification, says Malaysia International Halal Showcase (Mihas) chief executive officer Mohd Shukri Abdullah.

He said with the certification, the halal sector could create a lot of opportunities for them.

“Halal certification is becoming a big deal. One day it will be an important standard in both the local and international food industry,” Shukri told StarBiz.

According to him, many companies without halal certificates were losing out.

“Many hotels and big restaurants these days are very conscious of whether their suppliers are halal and many of these suppliers lose business because they are not,” he said.

“The global demand for halal products is increasing. To meet this demand, products would need to be safe from contamination of non-halal substances and the only way to prove such compliance is with halal certification.”

Shukri estimated that there were currently only about 2,300 companies in Malaysia with halal certification.

“Many companies today do not have halal certification because they do not meet good manufacturing practice (GMP) standards. When the Department of Islamic Development conducts checks on them, they lose out on cleanliness.

“Companies looking for certification are rejected for poor GMP and not on whether products were halal. If a product is unclean, it is not safe for human consumption,” Shukri added.

Many countries, primarily within the Asean region, were going into halal certification and Malaysia was starting to realise its importance, he said, adding that by adopting certification, Malaysia had an opportunity to steal a march on countries from the Middle East, which, ironically, were not so stringent on halal certification.

“Countries from the Middle East are allowing all kinds of foods to enter their countries because the products do not comprise either pork or alcohol.

“Pork can come in different forms such as emulsifiers, conditioners or even colouring,” he added.

Shukri also said suppliers of products to the Middle East might be unwittingly including products tainted with non-halal elements.

“A non-Muslim supplier could decide to use a type of colouring that could be cheaper or of better quality but may not realise that it may be tainted with non-halal elements,” he said.

“All the particular supplier would be taking into account is that he is not supplying pork or alcohol.”

He also said Middle Eastern countries would then look to countries that issued halal certification like Malaysia as an alternative for halal supplies.

On Malaysia’s potential as a global halal hub, he said the country still had a long way to go.

“But it is getting there and events like Mihas would help expedite that process,” he said.

Organised by the Malaysia External Trade Development Corp (Matrade), Mihas is the largest annual gathering of halal industry players and entrepreneurs in the effort to ease the sourcing and selling of global halal products.

Shukri said Mihas would also help boost foreign direct investments.

As an example, Shukri said companies from China often had problems exporting to Muslim countries because of their predominantly non-halal products.

He said Malaysia would not face a similar problem despite the fact that the country’s exporters were predominantly Chinese.

“They are still successful because they are based in Malaysia. With Mihas, we are trying to encourage local Chinese businessmen to work with their foreign counterparts,” he said.

“We want to encourage them to come set up factories here, send their raw materials here, process and pack them here. They can then get local halal authentication and send them to the world.”

This year, Mihas will be held from May 7 to 11 at the Matrade Exhibition and Convention Centre. It expects participants from 30 countries to open 610 booths. It also hopes to attract about 40,000 visitors from 70 countries.

The event last year registered over RM600mil in sales.

By The Star (by Eugene Mahalingam)

Brisk sale of Plaza Damas 3

From left: Maximerge Capital Sdn Bhd CEO Terence Yooi Sing Keen, Michelle Won and Mayland group general manager Yap Boon Teck with a mock cheque at the signing ceremony.

KUALA LUMPUR: Malaysia Land Properties Sdn Bhd (Mayland) registered sales of about RM160mil, or a take-up rate of 95%, for its 72 shop offices in Plaza Damas 3 project in Sri Hartamas.

The one-to three-storey shop offices were soft launched last week.

Bulk buyers Maximerge Capital Sdn Bhd and Koperasi Pendidikan Islam Malaysia Bhd took up 18 units worth RM45mil and eight units worth RM20mil respectively.

Marketing manager Michelle Won said other purchasers were from the group's existing clientele.

“Some of the purchasers are tenants from our Plaza Damas 1 and 2 project,” she said at the signing of agreements with Maximerge and Koperasi Pendidikan yesterday.

Won said Plaza Damas 3 would also comprise 1,500 serviced apartments that would be launched in three months.

“Collectively, the entire Plaza Damas 3 project will have a gross development value (GDV) of RM800mil,” she said.

Plaza Damas 3, located within a 15km radius covering Sri Hartamas, Mont' Kiara, Damansara Heights and Kenny Hills, would be linked to the earlier phases via an overhead bridge link, Won said.

Mayland will next be launching its Sri Putramas 3 condominiums in Jalan Kuching and a residential project in Johor Baru.

“The (Sri Putramas 3) project will have a GDV of about RM300mil, and we plan to launch that in three months as well,” she said.

“We will be launching our residential project comprising 400 townhouses in Johor Baru,” Won added, but did not specify a date.

Won also said the group was in the final stages of completing the purchase of 10 acres in the Klang Valley.

Mayland had under 500 acres of undeveloped land, mainly in the Klang Valley and Johor Baru, she added.

By The Star

Real estate cycle seen peaking this year

KUALA LUMPUR: The country’s real estate cycle is expected to peak in late 2008 as the pace of rental increases begin to lag price increases, particularly in the high-end property segment in the vicinity of Kuala Lumpur City Centre.

OSK Investment Bank said compression of rental yields from high-end condominiums could prompt existing owners to lock in capital gains in anticipation of more new luxury units hitting the market at a time when the real estate cycle was peaking.

Its latest property market outlook report indicated that additional supply of condominiums in KLCC would make it more difficult for investors to rent out their residential units.

“If most buyers are mere speculators and investors, risk of a potential bubble burst in KLCC condos will be rather high by late 2008,” OSK said, adding that the current upward trend in the local real estate cycle may begin to taper off in 2009 when more properties hit the market.

It was reported in February that prices of upmarket condominiums may reach a new high of RM3,000 a sq ft this year as new products hit a niche market driven mainly by foreign demand for local luxury units which are deemed one of the cheapest in the region.

According to property consultancy Knight, Frank, Ooi and Zaharin Sdn Bhd, residential properties in KLCC had fetched between RM1,300 a sq ft and RM2,000 a sq ft last year (2007) while rentals ranged between RM5.50 a sq ft and RM6.50 a sq ft.

The rising prices of these top notch homes, essentially, translates into lower rental yields as prices advance at a quicker pace than rental hikes.

Meanwhile, foreign demand for high-end real estate here may dip on investors’ cautious sentiments surrounding the country’s new political landscape following the recent general elections.

But the slower take-up rate for luxury properties should not be viewed as an across-the-board phenomenon as foreign individual buyers, experts said, were still scouting for local assets.

A downside in demand for larger transactions like en bloc commercial property acquisitions by overseas institutional buyers is, however, possible as investors adopt a wait-and-see attitude to safeguard their portfolios.

“Foreign direct investment is going to be sustained but definitely there will be a wait-and-see attitude in certain industries especially on the bigger ticket purchase items like en-bloc sales.

“Foreign individual investors are still coming in,” real estate consultancy Zerin Properties chief executive officer Previndran Singhe told The Edge on the sidelines of a forum discussing the impact of the recent national elections on the country’s real estate sector.

The forum was organised by the Malaysian chapter of the International Real Estate Federation or better known as Fiabci.

Speaking at the event earlier, Asian Strategy & Leadership Institute chief executive officer and director Datuk Dr Michael Yeoh said foreign investors were still deliberating on the Malaysia’s investment climate following the unprecedented outcome of the recent elections.

“We cannot exclude any possibility,” Yeoh said.

By The EDGE Malaysia (by Chong Jin Hun)

Dijaya's Tan buys more Sunrise shares

TAN Sri Danny Tan Chee Sing, a major shareholder of property developer Dijaya Corp Bhd, has been buying more shares of Sunrise Bhd.

Tan bought another eight million shares on March 26, bringing his total stake to 6.91 per cent of rival Sunrise.

Tan's interest in Sunrise is via Phoenixflex Sdn Bhd.

Tan emerged a substantial shareholder in Sunrise in October 2004 and has since been accumulating shares. Yesterday, Sunrise's shares fell three sen to close at RM2.07.

By New Straits Times

UAC counts on new system to push sales

KUALA LUMPUR: Cellulose fibre cement board manufacturer UAC Bhd, whose earnings has been slightly affected by high raw material costs, is focusing on new and innovative products and improving productivity to mitigate rising costs.

Chief executive officer Koo Hock Fee said UAC would focus on its UCO SolidWall system, which would reduce to only one-third the time taken to put up a wall compared with a brick and plaster wall.

Koo Hock Fee

The product would translate into cost savings because of the shorter time involved, he said, adding that the company would hold a series of seminars nationwide this month to market it to property developers.

Speaking after the company AGM yesterday, Koo said 2007 had been challenging as the prices of raw materials such as pulp and cement had risen 10% and 12% respectively since December 2006, amid weak domestic demand.

The group also recently moved to Menara UAC, its new corporate office, in Mutiara Damansara, Selangor. The building, with a net lettable area of 138,000 sq ft, would provide the group with an additional income stream and potential capital appreciation.

Khoo said the tenancy of 46% of the building was already confirmed while 36% was under negotiation.

“We are reasonably confident that the office will be fully tenanted by year-end,” he said, adding that the expected rental yield was 9% while the return on capital 6.5%.

UAC registered a lower pre-tax profit of RM27.2mil on turnover of RM165.5mil for its financial year ended Dec 31, 2007. Net profit came in at RM22.6mil, down from RM30.9mil in 2006.

By The Star

High-end properties still attracting foreigners

MALAYSIA'S property sector will continue to attract foreign investors, especially the high-end segment, despite the recent changes in the local political landscape, Asian Strategy & Leadership Institute (ASLI) chief executive officer Datuk Dr Michael Yeoh said yesterday.

However, the foreign investors are bound to adopt a “wait and see” attitude for now until the political scenario is much more clearer, he said.

The wait-and-see attitude is more likely to affect the high end properties that depend on foreign purchases like those in the KLCC areas or those above RM2,000 per sq ft.

Presenting a talk in Kuala Lumpur yesterday on the “Impact of The Recent General Election on the Real Estate Industry”, organised by the International Real Estate Federation Malaysia (FIABCI-Malaysia), Yeoh said a more clearer political picture was expected after the UMNO General Assembly in December and this will result in a relatively more stable property market.

He, nevertheless added there was no sign yet of a slowdown in the foreign investments.

Whatever the changes, the basic policies are expected to remain same, he said, adding that the local property market will continue to be boosted by domestic demand.

“I dont think domestic demand would slow down, I think that would continue to be strong,” he added.

Yeoh also said a more influencing factor was the global economic situation rather than Malaysian politics as the US subprime crisis was far from over and that it may have impact on global liquidity.

On a positive side, he said Malaysian economy was well preserved by domestic consumption which was robust.

ASLI has forecast a gross domestic product growth of between 5.8 per cent and 6.2 per cent this year amid robust domestic demand, and exports of its oil and gas and palm oil.

Meanwhile, Glomac Bhd’s group executive vice chairman, Datuk Richard Fong, was also upbeat on the high-end property market. He said: “I think the property sector will remain stable and we will see a surge of foreign investments for properties especially in the high-end market, mainly from the Middle East.”

Bukit Kiara Properties Sdn Bhd’s group chairman Datuk Alan Tong Kok Mau meanwhile said there was still a lot of growth potential for the high-end property market, saying that Malaysia’s property prices still remained very competitive.

“There is still a niche market for the high-end segment and we would focus on that. Towards the year, we would see demand mainly from the Middle East and China,” he said.

By Bernama

MPHB makes property thrust

MULTI-PURPOSE Holdings Bhd (MPHB) will use cash from the privatisation of its gaming subsidiary Magnum Corp Bhd to venture into property development in a bigger way, its top official said.

The move will provide the group with a new earnings stream as it seeks long-term growth, managing director Datuk Surin Upatkoon (pic) said.



He said MPHB, which stands to get up to RM731 million from the privatisation exercise, already has two hectares of prime land along Jalan Sultan Ismail in Kuala Lumpur on which it is planning a commercial development.

The group expects to obtain the planning approval for it by year-end. It also wants to increase its landbank in Malaysia and has the first right of refusal to buy land owned by Magnum.

"It's still premature to say how much of the proceeds we'll use for property development, (but) it'll be one of our core businesses and will start contributing to the group from 2009 onwards," Surin told reporters after shareholders gave their approval for the privatisation yesterday.

The Magnum buyout, which MPHB is undertaking with global private equity firm CVC Capital Partners Asia III Ltd, is expected to be completed by June this year, he said.

MPHB is now on the brink of a growth phase after successfully cutting debt to some RM200 million today from a peak of over RM2 billion about five to six years ago.

It derives the bulk of its earnings from gaming, but also does insurance and stockbroking.

Surin expects MPHB to do well this fiscal year but warned that it will probably not be able to match last year's strong performance, where net profit more than quadrupled to RM571 million.

Shareholders can nevertheless expect to get a higher dividend than the 11 sen a share that was declared last year, he said.

The gaming business is expected to grow by between three per cent and 3.5 per cent this year, while insurance is targeted to grow by about 14 per cent to RM320 million.

The group may sell its insurance business if a good offer comes by, Surin said. It is currently in talks with a local insurance firm which has a foreign shareholder.

"We're not in a hurry to dispose it. We could also go for a merger," he remarked.

As for gaming, the group has no plans to expand into the region as yet. It has been "business as usual" in states like Kedah where the opposition Islamic political party recently wrested control.

By New Straits Times (by Adeline Paul Raj)

MMC-Gamuda rail project to create 150,000 jobs

ABOUT 150,000 jobs will be created under the RM12.5 billion electrified double-tracking railway project over the next five years.

The main contractor, an MMC Corp Bhd and Gamuda Bhd joint venture, expects the project, which involves laying parallel railway lines over 329km from Ipoh to Padang Besar, to be completed on time in 2013.

About five per cent of the project has been done.

"In addition to hiring 5,000 professionals and 12,000 sub-professional staff, the project will also see over 100,000 skilled and unskilled workers engaged," MMC-Gamuda JV director Datuk Azmi Mat Nor told a media briefing in Bukit Mertajam, Penang, yesterday.

He said since the company took possession of the sites across Perak, Penang, Kedah and Perlis on January 8, work has been on schedule.

MMC-Gamuda will brief the state governments and local authorities on the progress of the project in their respective states and its benefits.

The infrastructure works in the four northern states include over 196km of railway tracks, stations, depots, halts, yards and bridges, while the system works comprise the relocation of existing services, electrification systems, signalling and communication systems.

MMC-Gamuda has given out RM3 billion worth of construction packages.

"Of the total, up to RM1.6 billion has been awarded to Bumiputera contractors that fulfilled three main criteria of being genuine and having hands-on management experience, capable contractors that have positive track records for both financial and technical, and able to offer competitive pricing via a tender system," Azmi added.

By New Straits Times (by Marina Emmanuel)