Need for holistic master plan

A row of houses in Bukit Jelutong township.

DEVELOPERS with projects in the northern corridor of the Klang Valley should take advantage of their sizeable land bank by adopting a holistic master plan approach in their development plans.

As a number of big property and plantation groups such as Sime Darby Property Bhd, Kuala Lumpur Kepong Bhd (KLK), Asia Pacific Land Bhd (AP Land) and GuocoLand Bhd own large tracts of land in the corridor, it makes sense to have the projects planned well from the very beginning to ensure they grow into vibrant growth centres.

Sime Darby Property has more than 8,000 acres of former plantation land in the corridor converted for property development.

The land bank, located along the 25km Guthrie Corridor Expressway (GCE), has been demarcated for the various property development precincts – Bukit Jelutong, Denai Alam, Lagong Mas, Medan Elmina and Sungai Kapar.

KLK has a land bank of 2,828ha, of which 92.9ha has been developed into Desa Coalfields mixed residential and commercial development of more than 2,600 units.

Undertaken by KLK's property unit KL-Kepong Property Development Sdn Bhd, Desa Coalfields, located about 2km to the GCE, comprises 2,600 units of mixed residential and commercial properties worth a gross development value (GDV) of RM450mil. Since its launch in 2002, 1,400 property units with GDV of RM330mil have been completed and sold.

Unlocking value

KLK chief executive officer Datuk Seri Lee Oi Hian said to leverage on the company's large land bank in the corridor, plans were underway for KLK Property to emerge as a bigger player.

Datuk Seri Lee Oi Hian

“We are planning a 405ha integrated township opposite our existing project, Desa Coalfields in Sungai Buloh, and will launch it once the approvals are in place. We will maintain our tagline, KLK - Value Homes concept, which assures quality finishes and good value-for-money for our homes.

“This is a step towards unlocking the value of about 2,828ha of plantation land in the vicinity which is envisaged to be developed step by step. This strategy of organic growth will contribute profits as well as enhance the value of our surrounding land bank,” Lee told StarBiz.

The new development will comprise more than 6,000 residential and commercial units worth a total GDV of RM2.5bil.

KLK Property general manager Lim Peng Hong said low-density projects, with emphasis on ample provision of green tracts and open areas to promote good communal integration and facilities, would do well.

“In our next 405ha development, we plan to continue with the same strategy to offer spaciousness, good layout options, better finishes and, most importantly, affordable pricing to cater to the demand of a wider spectrum of the target market,” Lim said.

Meanwhile, AP Land's Bandar Tasik Puteri is an integrated township development spanning over 2,670 acres in Rawang. Since the project kicked off in 1998, 1,000 acres have been developed.

AP Land joint managing director Low Su Ming said Bandar Tasik Puteri was fast emerging as the urban regional centre of the North Klang Valley.

In the past decade, the company has launched close to 10,000 property units with cumulative sales of RM1bil achieved to-date. The township now has a population of 45,000.

According to Bandar Tasik Puteri's blueprint masterplan, 75% of the development will comprise the residential component, 15% commercial and the balance 10% for green lung, infrastructure and facilities.

Holistic planning

Low said instead of focusing merely on price competitiveness to drive sales, developers should adopt a longer term and more holistic vision of value adding to their townships.

“With the rising cost of construction, affordable houses priced from RM145,000 to RM180,000 will prove more difficult to hold in the medium and longer term.”

Besides offering attractive packages for house buyers, Low said, convenience, facilities and accessibility were primary considerations for even the most affordable group of buyers.

“We are planning a combination of good supporting facilities such as schools, colleges, medical services, shopping convenience, communication services, road linkages and transport.

“To enhance the quality of life for the residents, we are also beefing up the security and community events to promote healthy community living here,” she added.

Meanwhile, the third nine holes at Tasik Puteri Golf & Country Club (TPGCC) have just been opened while the clubhouse extension and upgrade would be ready by the third quarter of this year.

Low said the 27-hole championship course would boost the attractiveness of TPGCC as a popular destination for golfing and club facilities.

Lifestyle projects

In Rawang, GuocoLand's Emerald Rawang on 1,029 acres is also making waves and changing the property landscape in the northern corridor.

The gated community development comprises terrace houses, semi-detached units, bungalows, town houses, shop offices and apartments with a GDV of RM1.5bil. The project is scheduled for completion in 2012.

Besides quality housing, trendy commercial projects will also make their debut in the corridor.

Mainstay Development Sdn Bhd is planning a new retail development called space u8 in Bukit Jelutong that will be completed in early 2010.

Chairman Raja Azmi Raja Razali said there was a need for a good lifestyle destination in Bukit Jelutong as residents now had to travel quite a distance for a “friendly” retail environment.

“As residents' demographics change, the type of residential properties and commercial developments will grow to accommodate them. space u8 aims to meet the growing demand for a lifestyle destination in Shah Alam,” he said.

With net lettable area of 574,647.52 sq ft, the project based on the shop unit, mall office (sumo) retail concept will have a covered courtyard of about 70,000 sq ft as its main attraction.

By The Star

SunCity shines on innovative projects

SUNWAY City Bhd (SunCity) has established a strong brand since it started developing Bandar Sunway in Petaling Jaya in the early 1990s.

Today, the group, listed on Bursa Malaysia main board, has spread its wings overseas as well as other parts of the Klang Valley, each time bringing with it a reputation of building quality and innovative homes.

One may recall how popular The Ritz two-storey link houses in Bandar Sunway were when they were launched in 1990. Priced at RM153,888, The Ritz boasts a large master bedroom of almost 400 sq ft, so big that part of it occupies the top of the car porch! The master bedroom has a large attached bathroom with a long bath.

It also introduced a unique “super link” for its Bandar Sunway Semenyih in 2002. Although not an actual super link house in the true sense of the word as the built-up area is only about 1,600 sq ft, it has an extra-wide frontage but only a length of 51ft.

The group was also one of the first to provide a swimming pool for apartments as in the case of its RM95,000 apartments in Bandar Sunway in 1990.

Ho Hon Sang (left) and Michael Lee with a model of the Villa Manja semi-detached homes.

SunCity takes great pride in its show houses and is among the best in the market. This is evident in its show houses at Sunway Kayangan, D'Villa Bungalows @ Kota Damansara and the more recent ones at Villa Manja at Sunway SPK Damansara.

Over the years, the group has won numerous prestigious awards, including the Superbrands Malaysia Award 2005-2006, The Edge Malaysia Top Property Developers Awards 2003-2007, and Euromoney Real Estate Award 2006 Top 3 Property Developers in Malaysia. It also secured the MS ISO 9001: 2000 Quality Management System certification and was ranked sixth in the Hewitt-Fortune-RBL Top Companies For Leaders 2007 - Asia Pacific.

The group is also known for setting new benchmarks not only in quality, stylish designs but also in pricing. It is one of the few developers that ventured into the very high-end market like its 77 units of Bayrocks garden waterfront villas at the RM3.7bil Sunway South Quay (formerly Sunway Science City) whose prices start from RM4.53mil to RM6.2mil!

The Sunway South Quay, one of the two big former ex-mining lakes in Bandar Sunway (the first lake had been transformed into the Sunway Lagoon Resort more than 15 years ago), is set to be a long-term money-spinner for SunCity.

SunCity has several high-end projects in the exclusive Mont'Kiara/Sri Hartamas neighbourhood in Kuala Lumpur. They are the Kiara Hills, Casa Kiara 1, 2 and 3, Palazzio Sunway and the Sunway Vivaldi, launched in April.

The Sunway Vivaldi at Mont'Kiara comprises of 228 freehold condominium units priced from RM2.6mil to RM6.3mil. The units boast spacious floor layout of up to 4,000 sq ft. Features include a private lift lobby, cascading and meandering water features, Olympic-length swimming pool and a multi-level central eco-park.

Perhaps the most iconic of all is its Palazzio Sunway luxury condominiums in Sri Hartamas where the 160 units in two 20-storey blocks were initially priced from RM850 per sq ft.

The group's latest project is the RM400mil Villa Manja @ Sunway SPK Damansara that is being developed by Sunway SPK Homes Sdn Bhd, a joint venture between Sunway City Bhd and Syarikat Permodalan Kebangsaan Bhd (SPK).

This gated community with security guard house offers only 196 freehold semi-detached homes with a “bungalow-like” design, wide and open spaces, and a green park. Access to this 33-acre residential enclave is via a single entry and exit point, providing further exclusivity and security for residents.

Prices of the Twin Villas start from RM1.97mil each with built-up areas from 3,948 sq ft (45ft x 90ft). There are six bedrooms with five attached bathrooms. The porch can park four cars.

SunCity chief operating officer Ho Hon Sang said about 80% of the 100 units launched last August had been sold.

“We're now opening for sale the balance of the 96 units. This is a single-product development with a low density of only six units per acre. There are no T-junctions and all the houses are placed in a north-south direction,” he said.

The homes come with many extras, including nine units of energy efficient and eco-friendly air-conditioners, security alarm, automatic gate, motion detector light, solar water heater, water booster pump, whirlpool system bathtub for master bedroom, shower screens to all bathrooms (except maid's bath), glass balustrade at staircase and balcony, anti-subterranean termite treatment, and five-year warranty for external painting.

SunCity senior manager (marketing and sales) Michael Lee said all four show houses had been sold. Two of them that are furnished have been sold for RM3.1mil and RM2.7mil.

By The Star (by S.C.Cheah)

Builders, buyers head north to a new corridor

An aerial view of Bandar Tasik Puteri in Rawang.

KLANG Valley's northern corridor, which is still relatively untapped compared with the rapidly developing central and southern corridors, is ripe for more exciting changes and progress, going forward.

The availability of vast land bank and improved infrastructure connectivity have attracted quite a number of developers, including Sime Darby Property Bhd (formerly Guthrie Property Development Holding Bhd), Asia Pacific Land Bhd, KL-Kepong Property Holdings Sdn Bhd (KLK Property) and GuocoLand (M) Bhd (formerly Hong Leong Properties Bhd).

More innovative residential and commercial products that are in the pipeline, including gated residences and lifestyle retail projects, will further spruce up the corridor's landscape.

According to Ho Chin Soon Research Sdn Bhd director Ho Chin Soon, the research company's Locational Centre of Gravity showed there was good growth potential for the various locations in the northern corridor including Selayang, Rawang, Sungei Buloh, Kuang, Guthrie Corridor and Shah Alam North.

“There are large tracts of freehold plantation land in the northern corridor. Besides the Sime Darby group, we have private landowners like Kuala Lumpur Kepong (KLK) group that have sufficient land for development for many, many years to come,” he said.

Ho said since the Klang Valley's growth – including a 5% annual population growth – was continuing unabated, “it would not be wrong to say that the northern corridor would progress more or less in line with Klang Valley's growth.”

“Land prices have not escalated much but we can possibly say there's a 5% per annum increase in values over the last few years.

“Land nearer to the urban areas is priced RM20 to RM25 per sq ft while those in the outskirts is between RM10 and RM15 per sq ft,” Ho said.

Developers are eager to see the implementation of proposed highways, including the Assam-Jawa Latar Expressway linking Rawang to Kuala Selangor and Port Klang and the West Coast Highway that will further enhance the potential of the northern corridor.

New highways

The completion of the 25km Guthrie Corridor Expressway (GCE) that stretches from Bukit Jelutong to Kuang, near Rawang, in 2004 had contributed to the opening up of the northern and western parts of the Klang Valley.

According to Asia Pacific Land Bhd (AP Land) joint managing director Low Su Ming, there has been notable development in the northern corridor in the past decade although the pace was relatively slower compared with the southern and central corridors.

»With escalating prices in other parts of the Klang Valley, demand has begun radiating to the north« LOW SU MING

“With escalating property prices in other parts of the Klang Valley, demand has begun radiating to the north, including Sungai Buloh and Rawang.

“However, there is still a big gap in the prices of properties located here from those in the more developed and sought after areas in the Klang Valley,” Low said.

KL-Kepong Property Development Sdn Bhd (KLK Property) general manager Lim Peng Hong said the GCE and the North-South Expressway had contributed substantially to the success of the various townships in the northern corridor.

This include Sime Darby's Bukit Jelutong, KLK's Desa Coalfields in Sungei Buloh, AP Land's Bandar Tasik Puteri and GuocoLand's Emerald Rawang in Rawang.

The setting up of educational institutions such as Universiti Selangor, Universiti Teknologi Mara II and the new Sungai Buloh Diagnostic Hospital has also attracted property players and investors to the area.

Lower entry cost

“Property projects located within the boundaries of the northern corridor will do well as the scarcity of development land in the Klang Valley and Kuala Lumpur has created the need to build further from the city,” Lim said.

He said escalating costs of construction and scarcity of land, especially in mature areas within the Klang Valley, had contributed to marked increase in property prices of projects with modern living concepts, good facilities and environment.

“The prices of residential properties in the more exclusive addresses in the Klang Valley had made it almost impossible for the average wage earners to acquire them, and they are looking at projects in locations further away from the city.

“With properly planned infrastructure and amenities, projects in the northern corridor will prove to be the next best alternative for many average wage earners,” Lim said.

Although there is still a lot of land available – be it government or privately held, location and accessibility are major considerations that affect the marketability of the projects.

APL's Low said that as land in the central and southern corridors of the Klang Valley was scarce, the price of land in those areas was currently at record highs.

“The lower entry cost of land in the northern corridor is a definite plus. There is certainly potential in the longer term.

“We hope the Government would hasten the approved infrastructure works, which are badly needed in this corridor. When this happens, the growth in this corridor will catch up with the other parts of the Klang Valley.”

She said although places like Rawang and Sungai Buloh had grown substantially, the public transportation system was still lagging and further improvements to the infrastructure network would certainly provide a new growth catalyst for the northern corridor.

“Infrastructure projects, such as the Government’s planned upgrading of certain trunk roads leading into Rawang town and electrified railways under the Ninth Malaysia Plan, will certainly open up more development opportunities and better growth prospects in this corridor,” Low said.

By The Star (by Angie Ng and Leong Hung Yee)

New highway helps push projects

While township developments have mushroomed in prime locations in the Kuala Lumpur city centre, the northern corridor of the Klang Valley is slowly catching up in development activities.

Steadfast Realty principal Lee Wai Kong said the northern corridor had been quite remote previously but developments have started to pick up since the opening of Guthrie Corridor Expressway (GEC).

The 25km-long GCE connects Bukit Jelutong in Shah Alam to Kuang, near Rawang, and complements the North-South Expressway and New Klang Valley Expressway.

Lee believes that traffic on the highway would eventually pick up although it is quite slow at present.

“There is no doubt that the GCE has brought positive effect around the area but new developments are not as rapid as developments in the Kuala Lumpur city centre,” he noted.

“Although developments along the highway have picked up, we do not expect an immediate intense development in these areas. It will probably take another five to 10 years before we can see a property boom in these areas.”

Lee pointed out that property prices in these areas had also been going up steadily since the opening of GCE.

“Locations closer to Petaling Jaya or Shah Alam can command a better pricing although rental yields are still relatively low.

“Exclusive developments are a different story altogether. They could see better appreciation in value but not in yield. Therefore, locations like Rawang and Selayang might not seem so attractive,” he added.

He said Rawang was just another suburb and the housing demand would be fuelled by locals. He said it would be tougher for Rawang to capture the spillover from Kuala Lumpur.

“I think the development in Selayang will be much faster than in Rawang because of the connectivity. Selayang, which links to north Kuala Lumpur, can command better pricing as well,” he said.

Far no more

Meanwhile, Axis REIT Managers chief operating officer and executive director Stewart LaBrooy said land prices in Jelutong had been rising.

“Jelutong and Shah Alam have become more popular and generated a lot more interest today. A lot of new developments have started since the highway was opened,” he said.

He pointed out that there was a time when people were saying Kota Damansara was far, but people did not mind the distance now as the infrastructure was in place.

“The distances start to appear shorter, thanks to a reduction in travelling time,” he said, adding that Jelutong had good connectivity to the rest of the Klang Valley via major highways.

LaBrooy said more people were moving away from KL.

He said some property owners were “trading up” their current property. Some property owners sell their properties in KL at a high premium and buy a semi-detached or bigger property in the suburb.

He agreed with Lee that Rawang was a “local play”. “Personally, Rawang is just Rawang. The property prices are increasing but at a slower rate,” he said.

LaBrooy said Rawang did offer some good properties but some property buyers were “buying into the address” of the property. Buyers were willing to pay for a prestigious address, he added.

He expected more activities in these areas, going forward, but hoped the new developments would not cause a property overhang.

Developers attracted

Ho Chin Soon Research Sdn Bhd director and master mapmaker Ho Chin Soon opined that the GCE was constructed in such a way that it benefited Sime Darby Property Bhd.

“There is not much increase in property prices in this area but properties here will rise in tandem eventually with the Klang Valley,” he said.

Developments have started to pick up since the opening of the 25km-long Guthrie Corridor Expressway in 2005

The growing attractiveness of the northern corridor of the Klang Valley has not gone unnoticed. More and more developers have bought land in these areas.

Analysts said that the corridor, being strategically located at the confluence of major highways in the Klang Valley, had encouraged homebuyers to move there.

“GCE brings about the development of Bukit Jelutong, Bukit Subang and neighbouring housing areas,” an analyst said, adding that the highway had also helped properties nearby to appreciate in value.

An analyst with a local brokerage said property prices were moving up in the neighbouring areas of Kuala Lumpur and at the Sungai Buloh boundary.

“With soaring property prices in prime areas like Damansara, it makes sense for people to invest in Sungai Buloh, which is bordering Damansara. Therefore, newly developed properties in Sungai Buloh can be an option for investment,” he said.

He added that property prices were expected to pick up eventually.

Rawang, which is further north, was not exactly a development hotbed, said another analyst. He said that although the area had been growing at a steady pace, it was never a first priority for homebuyers. This is despite property prices there being cheaper.

“A homebuyer could probably get a semi-detached house in Rawang at the price of a link house in Mont'Kiara,” he said.

Setia Eco Park in Shah Alam is one of the developments that have benefited from Guthrie Corridor Expressway

“Developments that are doing well due to their locations near a major highway include Setia Alam, Setia Eco-Park and Alam Perdana that are connected by the Setia-Meru Link, as well as Sierramas and Valencia, which are accessible via the Sungai Buloh Interchange,” an analyst said.

He added that it was very important for any development to have a dedicated link to a highway so that residents would not need to travel far by going through another development.

By The Star

RM200mil nursing college to take shape in Bandar Sri Sendayan

PROPERTY developer BSS Development Sdn Bhd, a subsidiary of Matrix Concepts Holdings Bhd, expects anchor investor International University College of Nursing (IUCN) to boost the economic development in its new township, Bandar Sri Sendayan in Seremban.

Today, state government agency Menteri Besar Inc of Negeri Sembilan will sign a deal to sell 200 acres in Bandar Sri Sendayan to Run Education Sdn Bhd, the owner and manager of IUCN.

Run Education will invest about RM200mil to build IUCN, Malaysia's first international nursing school.

BSS, in a joint venture with Menteri Besar Inc of Negeri Sembilan, is developing the 5,235-acre Bandar Sri Sendayan, which has a gross development value of RM3bil.

“We believe that the new IUCN campus will accelerate the growth of Bandar Sri Sendayan as well as stir up the local economic activities in Seremban,” Menteri Besar Inc of Negeri Sembilan chief executive officer Datuk Mohd Hasiah Mohd told StarBiz.

He said Menteri Besar Inc is confident of attracting students from neighbouring countries, as IUCN would have a competitive advantage in terms of location, being only 20km from the KL International Airport.

IUCN had a target of 60:40 ratio between international and local students, he added.

BSS managing director Datuk Lee Tian Hock said IUCN expected the first intake of 5,000 students in September next year and hoped to accommodate 20,000 students by 2011.

“We hope IUCN would attract foreign and local students to pursue nursing qualifications in Seremban as the cost of living is relatively lower than the Kuala Lumpur city centre,” he said.

Located in the middle of Bandar Sri Sendayan, the IUCN campus would be developed in two phases and construction was scheduled to start next month, said Lee.

According to him, Bandar Sri Sendayan is expected to have a population of 60,000 when it is fully developed in 15 years.

Meanwhile, BSS and the Negri Sembilan state government agency are currently in talks with a foreign party to sell 1,000 acres for over US$1bil for an integrated tourism-related project.

The deal was expected to be finalised next month, said Mohd Hasiah.

By The Star - StarBiz

Selangor Dredging on expansion drive

SELANGOR Dredging Bhd (SDB), a high-end property developer, is on the lookout for opportunities to expand at home and in the region this year, its top official said.

The group last year ventured into Singapore - its first and only overseas market so far - where it expects to fetch RM400 million in sales from the launch of two developments later in the year, managing director Teh Lip Kim said.



"With regard to regional business activities, we will concentrate on this at the moment. However, we are open to venturing into other countries within the region, should the opportunity arise," she told Business Times in a recent interview.

The group is not engaged in any discussions to buy land at the moment, she added.

Besides property development, the main board-listed company is also involved in property management and leasing.

It operates the Hotel Maya, a boutique hotel in the heart of Kuala Lumpur.

"We hope to launch three developments this year - two in Singapore and one in Kuala Lumpur - with a total gross sales value of about RM550 million. This is an increase from last year, where we launched two developments, Ameera Residences in SS2 Petaling Jaya and 20Trees in Melawati," she said.

These new projects are expected to contribute to the group's current fiscal year ending March 31 2009.

In Singapore, the two projects it will launch are seven-storey condominium in Wilkey Road, just off the popular Orchard Road and 38-storey apartment near Newton Circus, just off Scotts Road.

In Kuala Lumpur, it is launching a 10-storey apartment in Jalan Ampang.

Last year, the group registered a fourfold increase in net profit to RM97.1 million. Teh is "cautiously optimistic" that it will continue to do well this year despite an increase in the cost of materials and the bearish global economic sentiment.

Recently, the group spent RM24.6 million to buy three parcels of beach-front land in Batu Feringgi, Penang - located between the Lone Pine and Casuarina hotels - where it plans to develop a "good, villa-type resort development" sometime in late 2009 or 2010, Teh said.

SDB is also the developer of the controversial "Damansara 21" project in Damansara Heights, where it plans to build 21 luxury bungalows on a hillslope, which has drawn a lot of flak from nearby residents.

Its other projects include Aman Sari in Puchong and Park Seven at Kuala Lumpur City Centre.

Yeonzon Yeow, head of research at Kenanga Investment Bank, has a "buy" call on SDB's stock, saying the group's strength lies in its cutting-edge products and its good property management.

While some view SDB as a small cap stock that doesn't perform as well as other property stocks, he said the developer was able to achieve strong sales with high benchmark prices.

"Take the Ameera condominium, it is the most expensive condominium in SS2 and there was strong take-up," he remarked.

He has a target price of RM1.84 on the stock, which suggests a 161 per cent upside from its last Friday's closing of 70.5 sen.

By New Straits Times

Damansara project hangs in balance

SELANGOR Dredging Bhd (SDB)'s plan to build 21 luxury bungalows in Damansara Heights hangs in the balance as nearby residents go all out to stop the hillside development, citing safety concerns.

The project, known as Damansara 21 and with a gross development value of up to RM250 million, is not the group's biggest but it has been grabbing newspaper headlines of late because of protests by concerned residents.

SDB's managing director Teh Lip Kim, however, says the protests are unfair as the group has taken pains to ensure that it has gone through all the necessary legal and regulatory processes.

It has also committed to spending RM34 million on infrastructure work to strengthen the slope and increase safety.

Despite going by all the rules, residents are still protesting, she said.

"As a developer and an investor in the country, when all this is called into question, it really puts the investment sentiment of the country at risk," she said in an interview.

SDB's subsidiary, SDB Properties Sdn Bhd, will this week apply to City Hall to lift a stop-work order that it was issued last month for failing to comply with certain safety standards, she said.

It expects to have complied with all the safety standards by then, she said. The group has twice held dialogues with residents and is willing to address any other concerns on safety going forward as well, she said.

Asked if she expects to be given the go-ahead from City Hall given the rising pressure from residents, she said: "The authorities are basically doing what's right, but somehow with all this pressure, they are feeling it. But, I think one has to review whether some of these pressures are reasonable or not. At the end day, the investment climate has to be there for the country to move forward," she said.

She noted that SDB's is not an isolated case as there have also been other developers facing similar issues in the country.

SDB had bought the 5.78 acres of land in Jalan Setia Bistari for RM50 million in 2005.

Michael Yam, deputy president of Real Estate and Housing Developers' Association Malaysia said hill slope developments are common especially in countries such as Hong Kong.

By New Straits Times

Marriott Putrajaya to get RM30m facelift

YEOW: For this year and next our focus will be on local and International Businesses

PUTRAJAYA Marriott Hotel plans to undergo a RM30 million renovation and refurbishment to win a bigger share of the meetings, incentives, conventions and exhibitions (MICE) market.

It is a substantial investment because typically, hotel owners upgrade their hotels every 10 years. Marriott just turned six on May 15 this year.

The one-and-a-half-year upgrade will cater to an anticipated influx of people with the development in Putrajaya as well as the upcoming shopping complex planned to be built next to the hotel, its general manager Yeow Hock Siew said.

Yeow, who has helmed this five-star 488-room hotel for the past four years, said that in the past the hotel was busy trying to fill its rooms.

"Over the past year, we have started to focus on the right segment, the MICE market. We have an area ideal for MICE," Yeow said.

"We have progressed upwards since. For the fiscal year ended June 2007, we had an average occupancy of 40 per cent and an average room rate (ARR) of RM215. In June 2008, (we should finish) at an average occupancy of 58 per cent and an ARR of RM227," he added.

He said that unlike city hotels, Marriott Putrajaya neither has a night entertainment nor a shopping zone, which poses a challenge.

"For this year and next our focus will be on local and international businesses," Yeow said, adding that its target includes the Indian, Chinese and Indonesian market.

To this end, it is adding on a RM15 million ballroom called the Garden Ballroom which is capable of accommodating 300 people for dinners and 600 people for meetings.

This adds to its existing facility which allows for 2,300 guests in a standing cocktail and 1,500 for seating.

Other planned upgrades includes the refurbishment of over 100 over rooms at RM75,000 per room, its restaurants and the inclusion of an exclusive VIP lounge.

Not included in its current budget is the renovation and addition of villas to accommodate a Martha Tilaar Spa.

With all these in place, Yeow expects that by June 2009, its average occupancy will improve to 65 per cent and ARR to touch RM240.

Some 85 per cent of its guests are business travellers while the rest are leisure travellers.

The hotel, built by the IOI group at RM200 million, currently enjoys a gross operating profit of 38 per cent.

By New Straits Times (by Vasantha Ganesan)

Boston Prop buys New York buildings for US$3.95b

CHICAGO: Boston Properties Inc said on Saturday it reached a deal to buy the General Motors Building in Manhattan, along with three other buildings, from New York developer Harry Macklowe for about US$3.95 billion (RM12.68 billion).

Boston Properties, which owns and operates office buildings, said it would acquire the properties through joint ventures with unidentified partners.

The company said it would pay about US$1.47 billion (RM4.72 billion) in cash and US$10 million (RM32.10 million) of common units of limited partnership interest. The company also agreed to take on about US$2.47 billion (RM7.92 billion) in debt.

The company said in a statement it would also buy three other New York properties: 540 Madison Avenue, 125 West 55th Street and Two Grand Central Tower.

The GM Building is seen as one of the most successful real estate redevelopments and arguably the most coveted office building in Manhattan.

Macklowe Properties bought the building, previously half-owned by Donald Trump, in 2003 for a then-record US$1.4 billion (RM4.49 billion).

Macklowe turned the 50-storey structure into a hot property, luring hedge funds and private equity firms as tenants and commanding some of the highest rents - more than US$150 (RM481.50) per sq ft - in the US.

Macklowe spent about US$7 billion (RM22.47 billion) last year for seven Manhattan buildings previously owned by Equity Office Properties Trust.

He has since struggled to refinance those loans and has reached extension agreements with his chief lenders, Fortress Investment Group LLC and Deutsche Bank AG.

Proceeds from the GM Building will be used to repay Macklowe's lenders.

Last year, Deutsche Bank headed a group that provided US$5.8 billion (RM18.62 billion) in short-term loans for the buildings.

Those loans and a US$1.2 billion (RM3.85 billion) equity loan from Fortress Investment were to be replaced by longer-term loans.

But the tightening credit markets wiped out Macklowe's ability to secure new funding. In February, he defaulted on the loans.

Macklowe's troubles became emblematic of those of large borrowers who relied on temporary financing to foot the bill for huge acquisitions, only to have the credit crunch crush plans.

Borrowing terms have become less generous and more expensive.

By Reuters

Malaysia Building Society's Q1 net soars

MALAYSIA Building Society Bhd, a housing loan provider, said its first quarter net profit quadrupled as it sets aside less money to cover potential bad loans.

In addition, it made more in net interest income as well as from Islamic banking income.

MBSB expects to remain profitable for the second quarter of fiscal 2008 that ends on December 31, it said in a statement to Bursa Malaysia.

"The group will continue to focus on its core mortgage and related retail businesses whilst emphasising on fee-based income and corporate loans recovery," it said.

MBSB made a net profit of RM19.6 million for the quarter to March 31 2008 against RM4.9 million in the same period a year ago.

Revenue was up by a third to RM106.3 million.

MBSB, a subsidiary of the Employees Provident Fund, has been in the limelight as it has lured interest from local and foreign suitors.

In April, MBSB said a due diligence was being done on the group. It was responding to reports that said three Abu Dhabi government-linked companies are eyeing EPF's stake in MBSB.

The reports also said that the main objective of the sale is to develop some of MBSB's strategic landbank without using EPF money.

By New Straits Times

Parkson plans more outlets

DEPARTMENT store operator Parkson Corp Sdn Bhd aims to open two to three new stores in Malaysia each year and an average of four new stores in Vietnam.

This will add to the 34 Parkson outlets in Malaysia and five in Vietnam, that the retailer will have by end-2008.

Investments into one Parkson in Malaysia is about RM15 million, while in Vietnam it's between US$3 million and US$4 million (RM9.63 million and RM12.84 million), half of which is borne by suppliers who fit their counters in the store.

Parkson, a subsidiary of Parkson Holdings Bhd, also plans for a maiden venture into Cambodia in 2010. Its first store there will be in Phnom Penh and it plans to look for more sites to expand.

Parkson's chief operating officer Toh Peng Koon said Parkson continued to see ample opportunities for growth in Malaysia, where the market is mature and the brand is well established.

"There is still opportunity to grow in Malaysia, in places like Johor, Alor Star (Kedah), Taiping (Perak), Sabah and Sarawak and even within the Klang Valley like in Shah Alam," Toh told Business Times in an interview.

A total of five new outlets were planned for 2008, three of which have begun operations - The Spring, Kuching, Parkson Melaka Mall and Parkson East Coast Mall, Kuantan. Two new openings will be the Parkson Bunga Raya Mall in Kuala Terengganu by end-July and Parkson KBTC (Kota Baru Trade Centre) by year-end.

This will bring its total retail space in Malaysia to 3.5 million sq ft by the end of the year.

New stores in 2009/2010 include KK Times Square in Sabah and Parkson on Jalan Genting Klang, a mall that will be owned and operated by the group.

Parkson Malaysia makes up about a quarter of Parkson Holdings' gross sales.

In Vietnam, where retail development is at its infancy, Parkson has the first mover advantage. It introduced the department store concept in Vietnam three years ago and enjoys a handsome level of growth each year.

Parkson will add its fifth store in Ho Chi Minh City this July. Its first store was also opened here.

"In Vietnam, our stores are enjoying very strong growth. Same store growth is about 30 per cent," he said.

According to Toh, even prior to Parkson's opening in Hanoi last month, Parkson was quoted as the most popular brand there. Its four existing stores are located in Ho Chi Minh City, Hanoi and Hai Phong.

Parkson has also entered into a joint venture to build a mall in Vietnam. The shopping centre, with a net floor area of 11,222 sq m, forms part of a property development project comprising a hotel and office blocks with a gross development value of US$88.9 million (RM285.37 million). The project is expected to be completed in 2011.

By New Straits Times (by Vasantha Ganesan)

New kid on U-Thant block

Landlovers finds exclusive niche for Koreans

AFTER a career in construction that spans 25 years, which took him to Singapore, the Middle East, Hong Kong and the American continent, Son Kuem Chan will be building his first property in Kuala Lumpur.

The managing director of Landlovers (M) Sdn Bhd, Son came to Malaysia in 2005. He recalls his initial reconnaissance of the Madge-U-Thant area as he scoured the area for land. “At that time, there was a lot of land to buy and prices were in the RM300 to RM400 psf region. Today, land prices in this area have doubled.

“If I sell the land, I will make money. But I want to build. I compare the market here with other countries in the region, and I see potential.”

Son has a small niche development called 9Madge along Jalan Madge. He will join a host of other developers, both local, Singapore and Korea-based, whose projects are located in the U-Thant and Madge areas.

Together with Landlovers on Jalan Madge will be Singapore-based Katana Developments Sdn Bhd (The Katana Residences), Tan & Tan Developments Bhd's (U-Thant Residences) and Singapore-based Dawntree Properties Sdn Bhd (Iringan Hijau), Nam Fatt Bhd (The Gallery @ U-Thant) and other small-scale niche players. The other Korean developer in the area is SsangYong.

“We expect more South Koreans to come to Malaysia. Right now, officially there are about 15,000 South Koreans in Malaysia. Unofficially, there may be between 17,000 and 25,000. In the next three to five years, we expect the number to swell to 50,000,” Son says.

Rodem Sdn Bhd, a joint venture between Landlovers Group & Hanil Engineering & Construction Co Ltd of Korea, will develop the project.

“The attraction here is education. We have many Korean families sending their children here to school. Mothers follow their children here. After a while, the entire family comes over. So from just renting a condominium, some of them eventually end up buying one,” he says.

With just 23 units on 0.77 acres, Son is offering a contemporary five-storey, two-block development with two basement car park levels.

The building essentially consists of two wings interconnected by a lobby. There will be a central courtyard.

One wing will have four and five-bedroom units facing a 25-metre lap pool while the second wing will have two and three-bedroom units.

The penthouses will have their own gardens. The size ranges from 1,800 sq ft to 8,200 sq ft.

The smaller units will have a minimum of two parking bays while the penthouses, a total of six each. Son says it is essentially a parking bay for every 1,000sq ft. Price ranges from RM2.23mil to RM8mil. The company will use a Singapore architect and will bring in their own project manager from South Korea.

For a small project like this, Son says there's a lot of emphasis on quality, both in the public areas like central court, lobby and basement car park and inside the units.

“Most basements are dark and lack ventilation. Ours will be different. There will be ample natural light and modern electrical fittings. There will be no network of pipes in the basement, as with most. There will also be proper floor finishes in the basement,” he says.

Having checked some of the older developments in the area, Son says 9Madge will have larger units with high ceilings, to bring light and volume to the place.

Savills Rahim & Co managing director Robert Ang says most of today's niche developments in the Madge and U-Thant area are moving away from the 1,200sq ft to 2,000 sq ft units.

“In the 1980s and 1990s, developers gave five-star location but three-star projects, catering to junior expatriate managers. Today, the situation is different. Even among investors, they are going for quality and larger units, sometimes with a minimum built-up of 3,000sq ft. The demand now is five-star developments in five-star location,” says Ang.

There will be a lot of glass in the units themselves and a glass lift and a four-tier security system. The units will have control of the lobby and lift, which means visitors can be guided to the respective units. There will also be a concierge.

On the expected growth in the number of South Koreans coming into Malaysia, Ang says after South Korea recovered from the Asian financial crisis in 1997, real estate boomed.

“It has a population of about 70 million, and Seoul itself has 10 million or more. Development opportunities are very limited. Because these developers had the financial muscle, they decided to venture out into the region. Malaysia became one of their preferred destinations. Land prices in Singapore were rather prohibitive, likewise education. The South Koreans basically wanted a base in English and so they send their children over. As more of them came over, they decided to buy instead of lease. Another strong pull was Malaysia's golf courses,” says Ang.

By The Star (by Thean Lee Cheng)

Golden Triangle and Mont’Kiara still hot spots

KUALA LUMPUR: The Golden Triangle and Mont'Kiara continue to remain the top “hot spots” in the Klang Valley for property investments as these areas have shown marked increase in capital appreciation.

Property map “guru” Ho Chin Soon said some condominiums in the Kuala Lumpur City Centre (KLCC) development had breached RM2,000psf while the price of condominiums in the affluent Mont'Kiara neighbourhood were also rising.

Ho, who is the managing director of Ho Chin Soon Research Sdn Bhd, said the spill over effects from these “hot spots” was apparent but only in certain locations.

Malaysia is an excellent country in Asia to invest in... HO CHIN SOON

The Klang Valley, he noted, would remain the No 1 growth region in Malaysia for many years.

“Malaysia is an excellent country in Asia to invest in because of excellent infrastructure, solid legislation protecting land rights and liberal policies for foreign investors,” he said in his talk at the Malaysia International Property Showcase yesterday.

“We need to fine tune our economic policies to compete with the rest of the world in the light of globalisation. In order to compete we have to change. The recent 12th general election has started the ball rolling.

“People voted for change. They want greater transparency. There should no more be negotiated deals or land alienation but tenders and public sale of land,” he added.

Ho said there had been a lot of foreign interest in Malaysian property, especially last year when investors from South Korea and the Middle East bought office and condominiums en bloc.

He also advised investors to do their “home work” carefully and buy from reputable developers, as there were signs of the market softening.

“We have to take what developers tell us with a pinch of salt. Rental yields are going to come down,” he said in response to a question on the many vacant units in Mont'Kiara.

By The Star

The party is still on

From left: Fong, Kumar, Chan, Christopher Hahn of Rahim & Co, Ang, Jagan, FD Iskandar, SP Setia Bhd COO Datuk Voon Tin Yow, Ho, UOB Malaysia CEO Chan Kok Seong, Previndran, The Edge editor-in-chief Ho Kay Tat and The Edge executive editor Au Foong Yee.

Real estate investors in Malaysia may be a bit more cautious now, what with the US subprime crisis and the slowdown in the world economy, but the party is still on, according to speakers at The Edge Investment Forum on Real Estate 2008, held at the Eastin Hotel in Petaling Jaya on May 10.

More than 500 people attended the forum, which was into its second year, to listen to the views of experts in the industry.

Entitled "What's hot; what's not", the forum opened with Previndran Singhe, CEO of Zerin Properties, giving his predictions for the Malaysian property market, and whether it was time to exit it.

According to him, Malaysia's property market has another three years of positive growth, albeit slower. Good quality products in good locations will still see rapid growth, he says, adding that where pricing is concerned, Malaysia is far from overpriced.

The forum also addressed the issue of whether to invest in commercial properties or residential properties. This paper was presented by the regional president of Fiabci (International Real Estate Federation) Asia-Pacific, Kumar Tharmalingam. He says both investments have their strengths and weaknesses and that on paper, commercial real estate is a better option although landed property is a better investment for the next generation.

Kumar also suggests that those who cannot afford to invest on their own should consider partnerships or private equity.

Ho Chin Soon, director of Ho Chin Soon Research, who spoke on the topic of who is buying land and where, and whether the hot spots are still hot, says there is no doubt the Klang Valley remains the main growth region in Malaysia. (At the inaugural forum held in October last year, he had said the Klang Valley will remain the country's top growth area for many years to come.)
Ho cites the constant activity in the Golden Triangle and how parcels of land keep changing hands there. According to him, the Arabs are not the only foreigners who are buying, but the Koreans and Singaporeans have also joined the fray.

Robert Ang, managing director of Savills Rahim & Co, whose paper was on buying real estate overseas and its rewards and pitfalls, says investors need to pay close attention to foreign exchange rates and follow conventional wisdom when it comes to observing property cycles. Local knowledge of the country where one is buying is also important, especially changes in official policy, as this would affect one's investments, he adds.

The forum also featured a panel discussion on the real estate success story of the Kuala Lumpur City Centre (KLCC). Three developers with projects in KLCC represented by their chiefs, gave an overall analysis of the market in the KLCC. The panellists were Datuk FD Iskandar Mohd Mansor, group managing director of Glomac Bhd; Datuk Jagan Sabapathy, CEO of Bandar Raya Developments Bhd; and Datuk Chan Sau Lai, executive chairman of Beneton Properties Group. The discussion was moderated by Datuk Richard Fong, Glomac's group executive vice-president and president of Fiabci Malaysian chapter.

FD Iskandar says Malaysia finally has a focal point in the KLCC, but he feels that the country is not being "sold properly" to attract foreign investment. He suggests that the government place emphasis on making the KLCC an Islamic financial hub, and allow the promotion of the Malaysia My Second Home programme to come under the Prime Minister's Department instead of the Tourism Ministry.

Agreeing with FD Iskandar that KLCC has indeed put Malaysia on the world map, Jagan says what's happening with prices in the area is real and not hype. He adds that land is being bought up very quickly there and prices have nowhere to go but up.

Chan, whose company is behind Stonor Park, the first high-end condominium in the KLCC, says this is the place to be today. He adds that as land prices escalate, developers will have no choice but to shrink the size of properties on offer.

Fong concludes that the KLCC is still hot and that those looking to invest there should do so now.
The Edge Investment Forum on Real Estate 2008 was organised by The Edge and presented by United Overseas Bank. The forum was supported by S P Setia Bhd, ranked No 1 in The Edge Top Property Developers Awards for three consecutive years since 2005.

By The EDGE Malaysia - (Article from The EDGE Investment Forum On Real Estate 2008)
* Article posted on 19th May 08 *

Loh & Loh sees RM180m GDV from latest project

Selayang scheme to feature semi-detached and bungalow homes

KUALA LUMPUR: Loh & Loh Corp Bhd expects its upcoming property development in Selayang to generate RM170mil to RM180mil in gross development value (GDV).

That project, which will feature semi-detached and bungalow homes on 34 acres, will take after the construction group’s maiden residential property project in Melawati in Ampang.

The Melawati gated-community project, called RiverView Kemensah, comprises 78 semi-detached houses and nine bungalows on 13.44 acres.

“We have sold over 90% through word of mouth,” managing director Jason Loh told StarBiz ahead of the launch of RiverView’s showhouses today.

Started in October last year and scheduled for completion in October 2009, the development also has a 600m walkway alongside a river flowing through the land.

Loh said the company intended to preserve and beautify the river while incorporating it into the overall concept of the development.

The showhouses and some of the units were being held back from sale but the launch today would also serve as a branding exercise for Loh & Loh’s future property forays, he added.

So far, the RiverView home buyers comprise professionals and businessmen.

“There are also a number of upgraders who have lived in the Melawati area for years and are reluctant to move away,” Loh said, adding that the homes were being constructed with families in mind.

“One of the things learnt (from the RiverView project) is that we have to be focused on a concept and make it liveable,” said Loh.

Feeling that quality had to be emphasised, Loh said there would be demand for good quality homes if the concept was right.

On future residential jobs, Loh said the group was now on the lookout for more land.

It is working on a formula whereby it would buy a small piece of land but one that would enable the group to achieve a quick turnaround and hedge against the cyclical nature of the construction industry.

Apart from being a hedge, property development is a lucrative new business for Loh & Loh. The group recorded revenue of RM290.3mil for its financial year ended Dec 31 and, with RiverView booking in sales of RM110mil and the Selayang project a little more.

By The Star

Where land is as good as gold

For many more years to come, the Klang Valley is likely to remain the country's top growth area despite the launch of the Iskandar Malaysia blueprint in late 2006 and the unveiling of the Northern Corridor Economic Region blueprint last July, says Ho Chin Soon, master mapmaker and director of Ho Chin Soon Research Sdn Bhd.

"Kuala Lumpur's Golden Triangle is the undisputed No 1 hot spot and people are still looking to buy land there. And when developers buy land, they buy into the future, so the optimism is there," he adds.

Ho was one of the speakers at the The Edge Investment Forum on Real Estate 2008. He was also a speaker at the inaugural forum held in October last year.

Land is scarce in the Kuala Lumpur City Centre and everyone wants to know who owns what, says Ho. His research reveals that some of the prime lots surrounding the KLCC have been transacted. The market is still talking about the record RM2,000 psf that the YTL Group paid for a tract of land in Jalan Stonor, he adds. A residential development is planned for the 0.4ha plot.



Many foreigners are also buying land in the KLCC and big funds are looking for properties there because of the subprime crisis in the US and related problems in Europe.

"Just last week, a South Korean investor walked into my office and bought a Golden Triangle map. I found out that he had purchased a plot of land near the KLCC for RM1,400 psf," says Ho, who also notes that Suasana Simfoni Sdn Bhd, a company that is partly owned by Singaporeans, has bought two adjoining plots of land for RM172.1 million in Jalan Conlay and plans to develop luxurious residential serviced apartments there.

"The Hakka Restaurant in Jalan Kia Peng has also been sold to Fabulous Circuit Sdn Bhd. A lot of people say the plot of land where the Bok House used to be has been sold, but I am unable to find out who the owner is in a title search. The land beside the Pakistan Embassy in Jalan Ampang is also rumoured to have changed hands, but after a check, I found the owner is still Ng Shin Chiu & Sons Rubber Estates Sdn Bhd," says Ho.

"The world has changed and economic power has moved from the west to the east. People are saying that it is either you go to Mumbai, Dubai or it's goodbye. Three out of the 10 biggest banks in the world are Chinese banks. Thus, we need to restructure our economy to capture foreign direct investment interest. The people in Malaysia are ready for change. If the politicians are not ready, then let us change the politicians," he adds.

During the forum, Ho told the 500 participants that some new developments will be coming up in Kenny Hills in KL because the largest landowner there, Tenaga Nasional Bhd, is inviting tenders for its land.

"There are a lot of transactions going on there as Tenaga is selling its land. Why should civil servants or employees of government-linked companies stay in nice bungalows when the prime land is worth millions? Companies such as S P Setia and Sunway Bhd own land there as do private companies. Seven Stars Sdn Bhd own 15 parcels of land in Kenny Hills," he says.

Ho adds that the future of property development in the greater Klang Valley or areas out of the second tier (a concept he popularised in his Locational Centre of Gravity theory) would largely belong to Sime Darby Bhd. The Locational Centre of Gravity is centred around Petaling Jaya New Town and areas within a 15km radius of it are deemed to be in the first tier, while locations 25km off are in the second tier.

"Last year's Synergy Drive merger between Golden Hope Plantations Bhd, Kumpulan Guthrie Bhd and Sime Darby Bhd resulted in Sime Darby being the developer with the largest landbank in the country. The red colour (refer to map) is the plantation and property development landbank that they own and a large amount is in the second tier. The future action would be Sime Darby's and their land would be ripe for development in 15 to 20 years," Ho says.

Asked about the outlook for Cheras in KL and Kajang in Selangor during the question and answer session, Ho says he is optimistic about those two locations.

"A lot of developers are making money in Cheras, targeting the upgrader market, and the semidees and bungalows there are quite expensive. While Kajang is just outside the first tier, it is doing well and should have no problem growing further," he adds.

By The EDGE Malaysia - (Article from The EDGE Investment Forum On Real Estate 2008)

KLCC not overpriced

There is no denying that the iconic Petronas Twin Towers in the Kuala Lumpur City Centre (KLCC) have served Malaysia well as they have put the country on the world map. The towers have not only created a focal point for the country and the Klang Valley, but also added value to the KLCC area where property prices are concerned. Over the last few years, several high-rise luxury projects have been launched and prices for luxury condominiums in the KLCC today have breached the RM2,000 psf mark.

But is there any more upside potential in the KLCC? Or is it all just hype?

Three panellists at The Edge Investment Forum on Real Estate 2008, with the theme "What's hot; what's not", addressed these issues when they presented a paper on "A real estate success story — KLCC: A developer's perspective". They were Glomac Bhd's group managing director Datuk FD Iskandar Mohd Mansor, Bandar Raya Developments Bhd's CEO Datuk Jagan Sabapathy and executive chairman of Beneton Properties Group Datuk Chan Sau Lai.


The panellists (from left): FD Iskandar, Jagan and Chan

Moderated by Datuk Richard Fong, president of the International Real Estate Federation (Fiabci) Malaysian chapter and group executive vice-chairman of Glomac, the panel concurred that the KLCC is far from overpriced.

According to FD Iskandar, if one were to compare similar high-end properties in Bangkok, Singapore, Jakarta, Manila and even Ho Chi Minh City, KL's properties are among the cheapest in the region. One of the simplest ways to measure if a city is expensive is to use the Big Mac Index created by The Economist.

FD Iskandar points out that Malaysia has one of the cheapest Big Macs in the world, which means the city is "cheap".

Jagan feels the same way. "I think the dilemma for most of us is that KL is a cheap city but the KLCC is expensive. People find this difficult to reconcile with. The reality is that the city is a cheap place to live in, do business and invest and I think we're beginning to see the fruits of it," says Jagan.

He adds that there is still a lot of domestic liquidity available and although there is a credit crunch in the US and Europe, money is coming in from China, India and the Middle East. "It is common for the Arabs to put money into real estate. All this money has to find a home. The KLCC is an attractive proposition as our interest rates are low."

Malaysia's "fairly decent" economic activity and the huge amounts of investment coming in from the oil and gas and telecommunications sectors have also created more high-paying jobs. Jagan sees this as an impetus for the market. Furthermore, the country's improving educational facilities are proving to be attractive to foreigners looking to send their children overseas for education. "These people will be looking to buy quality properties. There is definitely money to buy and rent," says Jagan.

Looking at the big picture, he says Malaysia has now become attractive to high net worth Malaysians and global citizens who own several homes all over the world. "KL is the best-kept secret in the entire world, but we do an awful job telling people how good it is. I think it's a conspiracy by the rakyat to keep property prices down!"

Jagan was echoing FD Iskandar's point that Malaysia needs to be "rebranded". According to Iskandar, there will always be wealthy people who want the best and are looking for alternatives for their investments. "I believe the KLCC offers the best not only in Malaysia but also in Southeast Asia."

One of the steps that can be taken by the government to attract foreign investors is to market and position KL as an international Islamic financial hub, says FD Iskandar. "We need to focus our efforts on making KL the preferred destination to attract global investors, issuers and high net worth individuals to take advantage of their surplus private and sovereign funds."

FD Iskandar feels that the Malaysia My Second Home programme needs to be marketed better and that this should fall under the purview of the Prime Minister's Department to ensure more efficiency, speedier approvals and seamless inter-ministerial coordination.

The panel also discussed the scarcity of land in the KLCC. According to Jagan, locals and foreigners are picking up land very quickly. "Prices can only go one way — up, and that's the reality of it," he says.

Undoubtedly, the shortage of land will drive prices higher but Jagan says if one were to compare KLCC's prices on a per plot ratio basis, they are still cheaper than those in other cities in the region. "For example, YTL group's recent land purchase at RM2,000 psf in Jalan Stonor. On a per plot ratio, we're looking at a pricing of RM200 to RM300."

Chan, whose company was one of the first players in the KLCC with its Stonor Park project, says it is definitely the place to be today. "It is cool, chic and the place to chill out."

He says there are a few key factors for a successful development — location, good design and timing. "In all major capitals of the world, any development adjacent to, or with a view of iconic landmarks, will always succeed."

"In the KLCC area, projects with a view of the iconic Twin Towers will have a good chance to succeed," he adds.

According to Chan, developers also need not worry if their projects offer good design. "Good designs always sell and at the prices that KLCC properties command these days, they are more than homes. They are a statement of the owner's social standing and the people who live in them," he says.

A case in point is Bandar Raya Developments' Troika. The developer bought the land for RM560 psf in 2004 and priced the units at RM1,000 psf when it launched a year later. The market, says Jagan, reacted accordingly. "People thought we were crazy buying land at that price and even crazier when we began selling. But we had a plan and launched Troika in stages. We were not going to compete on pricing but architecture," he adds.

The strategy has certainly paid off for Bandar Raya. The Norman Foster-designed Troika today has recorded transactions at RM2,500 psf, with a portfolio of investors from over 20 countries.
"There is no hype. What we're seeing is real," says Jagan.

The past few years have certainly seen great changes to the KLCC skyline, with property prices moving at a fast clip, says Chan. He feels that as prices continue to escalate, there are two issues to consider. "First, those who want to and can afford to live in the KLCC area will buy irrespective of price. Second, investors who buy for yield or capital gain will have to consider carefully the state of the rental market."



According to Chan, as the cost psf of KLCC properties increases, condo sizes need to be smaller in order to achieve the same yields. "Moving forward, for the KLCC's property market to grow, expat rental allowance should increase and investor yield expectation should match that of other major cities. For example, rental yield for Hong Kong property in a prime area is about 2% return per year," he adds.

For KL's property market to be on a par with cities such as London, Hong Kong and Singapore, Chan agrees that KL needs to be branded as a financial hub and it has to formulate policies that will allow free movement of capital. "The government should also look at reducing or eliminating stamp duty, waiving the Real Property Gains Tax, placing no limit on the number of transactions and improving the collection of service charges and property maintenance."

Fong says the KLCC is still hot and those looking to invest should do so now.

By The EDGE Malaysia - (Article from The EDGE Investment Forum On Real Estate 2008)

Bina Puri unit awarded RM24.8m contract

ON-GOING PROJECT: Artist's impression of Jesselton Condominium in Kota Kinabalu

BINA Puri Construction Sdn Bhd, a subsidiary of Bina Puri Holdings Bhd, has been awarded a RM24.8 million contract to build 351 units of one-storey terrace houses in Buang Sayang, Papar, Sabah for Fastgrow Properties Sdn Bhd.

The project is slated for completion by July 2009.

In a statement issued yesterday, Bina Puri Holdings said with this new contract, its order book, both local and overseas, stands at RM2 billion, which would keep it busy till 2010.

Apart from this, the group has a number of ongoing projects in Kota Kinabalu, Sabah, including Jesselton Condominium and 96 units of four-storey apartments in Taman Melawa Jaya Phase 2.

"The group has been actively participating in tendering for projects both locally and overseas. We will make appropriate announcements on projects secured to keep investors and the public informed from time to time," Bina Puri Holdings said.

By New Straits Times

S P Setia builds luxury high-rise in KLCC

Setia Sky Residences is S P Setia's first project downtown

The Kuala Lumpur City Centre is a coveted address for many real estate players. Award-winning S P Setia Bhd is not about to be left out of the action.

Although the established developer is a newcomer to the location, its divisional general manager Wong Tuck Wai is confident that the RM800 million Setia Sky Residences, its first downtown project, will be well-received because of its novel concept and superb location.

"This is our first high-end condominium project in the area and, having built a strong reputation in the landed luxury property segment, we are excited to realise our vision of luxury high-rise living with Setia Sky Residences," says Wong.

The six-acre freehold Setia Sky Residences is strategically located on the intersection of Jalan Tun Razak and Jalan Raja Muda Abdul Aziz Shah. It comprises 844 units, with sizes ranging from 1,044 to 1,679 sq ft. The project will be launched in stages, with the first batch up for sale by July. S P Setia is carrying out a registration drive for prospective buyers.

Wong says the target market will be owner-occupiers and property investors, both foreign and local, who wish to own a premium property with good appreciation potential.

"We believe Setia Sky Residences has all the ingredients of success. While the project is not on the immediate fringe of KLCC, most of the units offer a clear view of the Twin Towers. Indicative price is RM800 psf. The current selling prices of other high-rise projects in the KLCC area are above RM1,000 psf while those within the direct vicinity of KLCC have even exceeded RM2,500 psf. Our price is very attractive and offers good upside potential," he says.

Wong says the concept and design of Setia Sky Residences were inspired by the fluid lines of natural landforms. "The faces of the tower fronting KLCC are sculpted into a curvilinear form. This gives a longer building edge that allows more units to face this dramatic view. The sides facing the Titiwangsa Lake are shaped into slender and elegant forms, creating a dynamic composition of building blocks."

Setia Sky Residences has four towers of 40 storeys and will be ready by 2011. The layout includes a lobby for private lifts, a full range of family-recreational facilities spread over 40,000 sq ft of space at the Sky Deck (Level 5) and the Sky Club (Level 34).

The Sky Deck, located on the roof of the car park podium, features a playing area for children, spaces for family parties, a function room for big parties and a "secret spa garden" surrounded by lush greenery for quiet relaxation.

The Sky Club has four private entertainment villas. Each of the two villas on either end has a dramatic infinity plunge pool. All the villas are equipped with a kitchenette, where residents can host parties, The club also comes with a lap pool and a fully equipped gym with an aerobics and dance studio.

For the past three consecutive years from 2005, S P Setia has ranked first in The Edge Top Property Developers Awards. The developer's flagship projects include the 2,525-acre Setia Alam and the 791-acre Setia EcoPark in Shah Alam. In KL, S P Setia has three high-end projects — Duta Nusantara and Duta Tropika in Sri Hartamas, and Setiahills in Ampang. In Johor, it has Bukit Indah Johor in Bandar Nusajaya, Setia Indah Johor in Tebrau, Setia Tropika in Kempas and Setia Eco Gardens in Pulai. It also has Setia Pearl Island in Bayan Lepas, Penang, and Aeropod @ Tg Aru, Sabah. Last June, the group also inked a deal with Vietnam's top state-owned conglomerate, Becamex IDC Corp, to develop its maiden residential project there.

The Edge Investment Forum on Real Estate 2008 held on May 10 was supported by S P Setia.

By The EDGE Malaysia - City & Country (by Allison Lee)

UOB sees growth in home loans market

The UOB booth at the Forum

The Malaysian property market has been on an upward trend and is still doing well despite concerns about the effects of the US subprime crisis and a slowdown in the global economy. This augurs well for the home loans market as well, says United Overseas Bank (M) Bhd's (UOB) first vice-president for mortgage, Loo Yeok Bee.

Take-up rates have risen by more than 50% within three months of launch, especially for high-end properties, she adds. According to Bank Negara Malaysia, loan approvals for 1Q2008 stood at RM13.6 billion, while for 1Q2007 it was RM8.5 billion.

UOB currently holds more than 6% of the home loans market in Malaysia. "We hope to increase our share to 7% by 2009," Loo says.

UOB is confident of the property market, and will continue to be, so as long as there is demand.

According to the Valuations and Property Services Department, over RM77 billion worth of properties were transacted in 2007, of which almost 65% comprised residential properties. Sales increased to 45% in 2007, with 52,664 units launched, compared with 41% in 2006.

"Currently, high-end properties in choice locations, such as the Klang Valley, Johor and Penang, are better re-ceived than low-end ones," says Loo.

Is it easier to approve home loans now than before?

Loo says it is relatively easier now than three or four years ago, as banks have access to better and more efficient technology and secured assessment systems to process loan applications. This encourages faster approvals and turnaround time for customers. Currently, it takes three working days for a home loan to be approved and for a letter of offer to be issued.

The bank looks out for five main considerations when approving loans — credit rating, capability, commitment, collateral and the applicants' character.

On whether banks prefer to give out loans for new properties or secondary market properties, she says both contribute substantially to their growth.

There are many home loan packages that cater for the different needs of customers and all offer competitive interest rates.

"We are proud of our flexible home loan facility. Customers can choose from a variety of facilities to match their financial needs. It is important for us to deliver quality service and we are supported by a large branch network and competent sales team," says Loo.

Current UOB home loan packages include the Flexi Mortgage Home Loan, the Intelligent Home Loan as well as the International Home Loan for its foreign customers. "At UOB, we offer a home loan facility of up to 40 years or until the borrower reaches 70 — giving customers flexibility in deciding their loan tenure and possibly lower instalments. UOB also offers up to 90% margin of financing plus 5% for mortgage reducing term assurance. These are our special features as we cater for our customers' financial needs at different stages of their life," says Loo, adding that the average loan tenure for high-end properties is around 15 to 20 years, with an average margin of financing of 80%.

The Edge Investment Forum on Real Estate 2008, which was held on May 10, was organised by The Edge and presented by UOB.

By The EDGE Malaysia - City & Country (by Rosalynn Poh)

Wijaya Baru plans to sell portion of land

WIJAYA Baru Global Bhd is in talks to sell up to 30 per cent of a 153.4ha leasehold land it recently bought in Pulau Indah, Klang.

The land, located adjacent to the Port Klang Free Zone (PKFZ), was purchased from Pulau Indah Marina Resort Sdn Bhd for RM130 million.

Wijaya Baru Global entered into the deal to acquire the land in March 2005, and full payment was settled in November 2007.

"We acquired a piece of land next to the PKFZ for mixed development involving some housing, commercial and leisure (components)," its deputy chief executive Faizal Abdullah said.

"There are people who are interested to buy large lots (within the area we bought). There are two parties - one in industrial and the other in trading," Faizal told Business Times in an interview.

"We are still negotiating (to sell) between 10 per cent and 30 per cent of the land," he said.

Faizal said Wijaya Baru Global has not yet decided whether or not to sell the land, or to which party, but if it does go through the price will be at a premium to what the company paid earlier.

Meanwhile, work on this mixed development job is expected to commence early next year.

"We have put things on the drawing board. We will be finalising these plans in the next three to four months and commence operations early next year," he added.

Wijaya Baru's associate Wijaya Baru Sdn Bhd is involved in the construction of the infrastructure and superstructure of PKFZ.

By New Straits Times (by Vasantha Ganesan)

Global hotel investments may fall 50pc: Broker

SINGAPORE: Global investment in hotels may fall by more than half to US$50 billion (US$1 = RM3.21) this year because of the credit crunch, Jones Lang LaSalle Inc said.

Real-estate financing has evaporated as defaults by US homeowners prompted more than US$379 billion of losses and asset writedowns at banks and securities firms worldwide. Demand for hotel properties has slumped after global deals surged to a record US$110 billion last year, said Arthur de Haast, chief executive officer of Jones Lang LaSalle Hotels.

"The main thing that will stimulate hotel investment is an improvement of liquidity in debt markets," de Haast said in an interview here yesterday.

Hotel investment fell to about US$8 billion in the first quarter of 2008, after exceeding US$20 billion a year earlier, Jones Lang LaSalle, the world's second-largest real-estate broker, said this month. The last time global hotel investment was below US$50 billion was in 2005 when transactions totalled US$47 billion, de Haast said.

Even as global hotel acquisitions slow, de Haast said he expects hotel deals in India to more than double to as much as US$1 billion this year, up from between US$380 million last year, he said.

Real-estate funds from private equity companies and sovereign wealth funds seek to tap India's growing domestic tourism market by acquiring hotels in the world's second most populous country, de Haast said.

By Bloomberg

Builders want to backdate claims to April 2007

Source: Master Builders Association of Malaysia

The government is allowing contractors to claim for price increases in steel bars for design and build jobs from May 12, but contractors said their claims should be backdated to a year ago.

They want to backdate their claims to April 2007 and if the government agrees, this could involve billions of ringgit.

Master Builders Association of Malaysia (MBAM) president Patrick Wong said steel prices have been rising since April 2007 and many contractors who took on design-and-build jobs could not claim for the full amount paid for the steel bars.

"Last year, contractors' claims for government design-and-build jobs were limited to that of the April, June and December ceiling prices," he told reporters in Kuala Lumpur yesterday.

"We have appealed to the government to consider paying us the price difference above the ceiling price which we have been shouldering all these while," he said.

Last week, following Prime Minister Datuk Seri Abdullah Ahmad Badawi's announcement to fully liberalise the steel bar and billet market from May 12, all government design-and-build jobs were also required to incorporate price variation clause to accommodate claims for price increase in steel bars.

From May 12, changes in the price of steel will be based on the market price and calculated separately from the index of the construction items.

While MBAM welcomes this decision, it said the government should allow for contractors to claim from April 2007.

"If backdated to April 2007, the total claims for the price differences above the ceiling prices for steel bar in design-and-build-jobs could amount to between RM2 billion and RM3 billion," Wong said.

By New Straits Times (by Ooi Tee Ching)

Builders: Customs still demands permits for steel bars

SOME government agencies still demand contractors to apply for approved permits (APs ) to import steel bars, despite Prime Minister Datuk Seri Abdullah Badawi having declared that the steel bar and billet market has been fully liberalised from May 12.


OPEN CEMENT MARKET: Wong (left) with Asli Chief Executive Officer Datuk Dr Michael Yeoh. Contractors have been told that the implementation date will be 'announced anytime soon'

"Our members on May 15 had wanted to import steel bars, but the Johor Customs Department at entry point had told them to apply for an AP," said Master Builders Association of Malaysia (MBAM) president Patrick Wong told reporters after the preview of the First Malaysian Construction Summit 2008 in Kuala Lumpur yesterday.

"They were also told to apply for APs to stockpile steel bars at the worksite," he said.

He said the association is saddened that there is a lack of follow-through when it comes to the implementation of the Cabinet's decision to liberalise the steel bar and billet market.

"We have written to the Ministry of International Trade and Industry on this matter," he added.

The government had scrapped the ceiling prices on steel bars from May 12 to enable contractors undertaking government projects to claim for changes in the contract price based on the market price.

In addition, contractors are no longer required to apply for APs to import or pay import duties when they buy steel bars from the overseas market.

There is also no export restriction on steel millers to sell steel bars and billets to their overseas clients.

On the government's move to open up the local cement market, Wong said contractors were told that the implementation date will be announced "anytime soon".

The First Malaysian Construction Summit 2008, which is jointly organised by MBAM and the Asian Strategy & Leadership Institute (Asli), will be held on June 3 in Kuala Lumpur.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad is scheduled to deliver the keynote address on ways to solve supply-chain bottlenecks in the construction industry.

By New Straits Times