AN INDUSTRY body wants the government to slap an export tax of up to 20 per cent for cement to ensure adequate supply in the local market.
The construction industry faces higher cement prices as well as an acute cement shortage, Masters Builders Association Malaysia (MBAM) said in a statement.
Removing the ceiling price will not sustain cement supply as cement manufacturers can still export their products overseas, MBAM president Patrick Wong said.
"MBAM strongly urges the government to also curb the exportation of clinker as this is also an important ingredient to produce cement," Wong added.
MBAM and The Real Estate and Housing Developers Association (Rehda) also suggested that the government consider abolishing the 10 per cent import duty on cement.
"The rationale is that, if contractors were to import, they have to consider other expenses such as handling or transportation and shipping charges which still add to the cost of materials," Wong said.
Rehda said the move is counter-productive.
"The move will result in increasing cement prices by local manufacturers," president Ng Seing Liong said in a separate statement.
By New Straits Times
Wednesday, June 4, 2008
Steel millers may face windfall tax
STEEL millers may face a windfall tax if steel bars sold in Malaysia continues to be more expensive than in neighbouring countries.
"Our neighbour Singapore does not produce its own steel bars and yet it can source this commodity at cheaper prices. We will take Singapore as a benchmark for international pricing for steel bars," Domestic Trade and Consumers Affairs Minister Datuk Shahrir Abdul Samad said.
Two weeks ago, he had proposed for a windfall tax on industries that make supernormal returns and are insulated from inflation.
The government can carry this out using The Windfall Profit Levy Act 1998, which is usually carried out annually by the Inland Revenue Board.
Despite the liberalisation of the steel bar and billet market on May 12, prices are still higher at around RM4,000 a tonne. In contrast, steel bars go for around RM3,679 per tonne in Singapore.
To a request by Master Builders Association of Malaysia (MBAM) to waive the need to apply for storage permit for steel bar imports, Shahrir replied: "Since the lifting of price controls on steel bars and cement, I acknowledged there were imperfections and we may have overlooked on certain procedures. I will get my officers to remedy this situation starting today."
Following the government's move to liberalise the steel bar and billet market from May 12, MBAM president Patrick Wong said steel millers continue to benefit at the expense of the construction industry.
"Only two types of steel bars classified under HS Code 7214 were liberalised.
"How about all seven steel bar variants under HS Code 7214 and all four wire rods under HS Code 7213?" Wong asked.
By New Straits Times (by Ooi Tee Ching)
"Our neighbour Singapore does not produce its own steel bars and yet it can source this commodity at cheaper prices. We will take Singapore as a benchmark for international pricing for steel bars," Domestic Trade and Consumers Affairs Minister Datuk Shahrir Abdul Samad said.
Two weeks ago, he had proposed for a windfall tax on industries that make supernormal returns and are insulated from inflation.
The government can carry this out using The Windfall Profit Levy Act 1998, which is usually carried out annually by the Inland Revenue Board.
Despite the liberalisation of the steel bar and billet market on May 12, prices are still higher at around RM4,000 a tonne. In contrast, steel bars go for around RM3,679 per tonne in Singapore.
To a request by Master Builders Association of Malaysia (MBAM) to waive the need to apply for storage permit for steel bar imports, Shahrir replied: "Since the lifting of price controls on steel bars and cement, I acknowledged there were imperfections and we may have overlooked on certain procedures. I will get my officers to remedy this situation starting today."
Following the government's move to liberalise the steel bar and billet market from May 12, MBAM president Patrick Wong said steel millers continue to benefit at the expense of the construction industry.
"Only two types of steel bars classified under HS Code 7214 were liberalised.
"How about all seven steel bar variants under HS Code 7214 and all four wire rods under HS Code 7213?" Wong asked.
By New Straits Times (by Ooi Tee Ching)
Tuesday, June 3, 2008
Putrajaya Perdana wins RM113mil job
KUALA LUMPUR: Putrajaya Perdana Bhd has won a contract worth RM113.69mil from BR Property Holdings Sdn Bhd for a project to extend an existing office and shopping complex in Jalan Maarof in Taman Bukit Bandaraya here.
The project, which is due for completion by Sept 2, 2009, is expected to contribute positively to the earnings and net assets of the group for the financial year ended Dec 31, 2008 and Dec 31, 2009,'' Putrajaya Perdana said in a filing with Bursa Malaysia yesterday.
In a separate filing Crest Builder Holdings Bhd said it had bagged a RM165.9mil job awarded by Panareno Sdn Bhd to construct a serviced apartment in Bukit Damansara, Kuala Lumpur.
It said the contract period was 25 months from the date of site possession, expected to be in the second half of this year.
By The Star
Gamuda shares rebound to close 5 sen higher
PETALING JAYA: Gamuda Bhd shares staged a rebound from last Friday's 18% decline to close 5 sen higher at RM2.50 yesterday after several analysts said the company's exposure to the Vietnam property market was overblown.
The company, through Gamuda Land Sdn Bhd, is developing the RM8bil Yen So Park, comprising a mix of residential and commercial properties on 808 acres in return for constructing a sewage treatment plant and other infrastructure works.
The stock saw 17 “buy” recommendations compared with four “holds” and three “sells”, according to Bloomberg data.
CIMB Research, which has maintained an “outperform” on the stock, said in a report that based on its current worst-case scenario where the RM3.9bil value of the Yen So Park land was stripped out and assuming zero contributions from the double-tracking project to construction profits as well as a lower construction price-to-earnings of eight times instead of 13.5 times, the revised net asset value (RNAV) would drop to RM2.78 based on a higher 30% discount to RNAV instead of 20%.
Analyst Sharizan Rosely said net earnings forecast for the next two financial years would drop by 26% to 30% if Vietnam contributions were removed.
“In view of the cautious economic environment in Vietnam, we're now cutting our revenue forecasts for Yen So,” he said, adding that revenue would be cut for the next two financial years to RM250mil from RM800mil and RM400mil from RM800mil. Gamuda's financial year ends July 31.
Sharizan said this would see earnings forecasts cut by 17% to 20% for the next two financial years.
“Although the conditions of Vietnam's economy are a concern of late, we think it is more worrying for property developers that have planned new launches in the next nine to 12 months,” he said.
Sharizan added that cost inflation and higher borrowing costs had dented affordability and demand over the past six months based on the guided 10% drop in property prices.
“However, we take comfort in knowing that it will take at least 12 months before Gamuda starts selling the commercial and residential units in the market,” he said.
Meanwhile, the share prices of two other developers exposed to the Vietnam property market, SP Setia Bhd and Berjaya Land Bhd, were down 20 sen and 24 sen, to RM3.94 and RM4.86, respectively.
By The Star (by Fintan Ng)
Ceiling prices of cement to be lifted on Thursday
KUALA LUMPUR: The government yesterday announced the liberalisation of cement pricing, with the abolition of ceiling prices for the local market effective Thursday, with the hope that it would boost the cement industry in the country.
It also set new conditions for the import of cement, imposing a 10% import duty and exempting cement importers from Sabah and Sarawak from applying for import licences, Prime Minister Datuk Seri Abdullah Ahmad Badawi said in a statement.
Normal Portland cement (HS2523 29 900) and hydraulic cement (HS2523 90 0000) will be affected by this ruling.
Abdullah was quoted by Bernama as saying that this was in line with the government’s efforts to ensure that the country’s development would progress smoothly and to have a more efficient and transparent cement industry.
In an immediate response, Master Builders Association of Malaysia (MBAM) president Patrick Wong told The Edge Financial Daily that this was bad news for its members, as it would result in local cement manufacturers raising cement prices. The 10% import duty would cause hardship to the building industry and would prompt builders to seek alternative sources of cheaper cement.
Some economists, however, welcomed the news. “Construction players can have access to cheaper sources of the building material worldwide. They can pass down the lower cost to consumers through lower prices of homes and buildings,” Bank Islam Malaysia Bhd senior economist Azrul Azwar told The Edge Financial Daily.
Share prices of cement manufacturers in Malaysia fell yesterday following the announcement. Cement Industries of Malaysia Bhd dropped the most, by 3.3% or 20 sen to end at RM5.80, followed by Lafarge Malayan Cement Bhd, which shed 1.4% or six sen to RM4.34. YTL Cement Bhd dipped 0.8% or four sen to RM4.70.
By The EDGE Malaysia (by Tony C.H.Goh)
It also set new conditions for the import of cement, imposing a 10% import duty and exempting cement importers from Sabah and Sarawak from applying for import licences, Prime Minister Datuk Seri Abdullah Ahmad Badawi said in a statement.
Normal Portland cement (HS2523 29 900) and hydraulic cement (HS2523 90 0000) will be affected by this ruling.
Abdullah was quoted by Bernama as saying that this was in line with the government’s efforts to ensure that the country’s development would progress smoothly and to have a more efficient and transparent cement industry.
In an immediate response, Master Builders Association of Malaysia (MBAM) president Patrick Wong told The Edge Financial Daily that this was bad news for its members, as it would result in local cement manufacturers raising cement prices. The 10% import duty would cause hardship to the building industry and would prompt builders to seek alternative sources of cheaper cement.
Some economists, however, welcomed the news. “Construction players can have access to cheaper sources of the building material worldwide. They can pass down the lower cost to consumers through lower prices of homes and buildings,” Bank Islam Malaysia Bhd senior economist Azrul Azwar told The Edge Financial Daily.
Share prices of cement manufacturers in Malaysia fell yesterday following the announcement. Cement Industries of Malaysia Bhd dropped the most, by 3.3% or 20 sen to end at RM5.80, followed by Lafarge Malayan Cement Bhd, which shed 1.4% or six sen to RM4.34. YTL Cement Bhd dipped 0.8% or four sen to RM4.70.
By The EDGE Malaysia (by Tony C.H.Goh)
Monday, June 2, 2008
India firm invests in Johor cybercity
Mumbai’s Sunil Mantri to jointly develop RM1.16b Kulai project with MSC Cyberport
SMART PROJECT: An artist’s impression of Bandar MSC Cyberport
MUMBAI-BASED Sunil Mantri Realty Ltd (Sunil Mantri) plans to pump in some US$100 million (RM324 million) to participate in the development of Bandar MSC Cyberport in Kulai, the first Multimedia Super Corridor (MSC) cybercity in Johor.
Recently, this Indian property developer signed a memorandum of understanding (MoU) with MSC Cyberport Sdn Bhd, a public-private partnership to develop, construct, market and fund Bandar MSC Cyberport.
MSC Cyberport chief executive officer Ganesh Kumar Bangah said the Indian company signed the MoU to jointly develop Bandar MSC Cyberport, a RM1.16 billion development within Iskandar Malaysia.
"The US$100 million investment from Sunil Mantri will be injected to develop Phase 1 of Bandar MSC Cyberport, covering a size of 13.2ha. Work on the project is expected to start at the end of the year," he told Business Times.
Ganesh said this foreign direct investment is significant for the development of Bandar MSC Cyberport as it will give the development international credibility and recognition from Indian multinational companies (MNCs) that are already clients or are familiar with Sunil Mantri's successful developments in India.
"This will jump-start foreign information technology (IT) investments in Bandar MSC Cyberport and Iskandar Malaysia," he said.
He said Sunil Mantri and MSC Cyberport will cooperate to develop Bandar MSC Cyberport, and does not rule out the possibility of the establishment of a joint-venture company to carry out the project.
"We are in the midst of finalising the details of a special purpose vehicle (SPV) to conduct the development and will make the announcement on the set-up of the SPV in due course," he said.
Elaborating on Bandar MSC Cyberport, Ganesh said the project is a 60ha information, communication and technology (ICT) city development located in Kulai, within Iskandar Malaysia where the Second Link and the North-South Expressway meet.
"It will be a mixed development with residential, commercial and ICT spaces targeting the IT operations of MNCs, while developing local technology companies and technopreneurs.
"The cybercity will be ready in phases, starting end of 2008 to 2009," he said.
MSC Cyberport was established to create a global ICT business hub, with a world-class living environment for ICT companies worldwide within Iskandar Malaysia. This is in line with the government's MSC Malaysia initiative.
Bandar MSC Cyberport is operated and managed by MSC Cyberport Sdn Bhd, 30 per cent-owned associate of Kumpulan Prasarana Rakyat Johor Sdn Bhd, which in turn is a wholly-owned subsidiary of the Johor government.
The cybercity at present covers two designated locations, namely Menara MSC Cyberport and Bandar MSC Cyberport. It is envisioned that these two hubs will serve as a vehicle to initiate and facilitate the growth of ICT and knowledge-based industries in Johor.
It is based on the hub and spoke concept, each having its own unique strength and cost-effective base for ICT companies targeting emerging markets in the Asia-Pacific region.
By New Straits Times (by Kamarul Yunus)
SMART PROJECT: An artist’s impression of Bandar MSC Cyberport
MUMBAI-BASED Sunil Mantri Realty Ltd (Sunil Mantri) plans to pump in some US$100 million (RM324 million) to participate in the development of Bandar MSC Cyberport in Kulai, the first Multimedia Super Corridor (MSC) cybercity in Johor.
Recently, this Indian property developer signed a memorandum of understanding (MoU) with MSC Cyberport Sdn Bhd, a public-private partnership to develop, construct, market and fund Bandar MSC Cyberport.
MSC Cyberport chief executive officer Ganesh Kumar Bangah said the Indian company signed the MoU to jointly develop Bandar MSC Cyberport, a RM1.16 billion development within Iskandar Malaysia.
"The US$100 million investment from Sunil Mantri will be injected to develop Phase 1 of Bandar MSC Cyberport, covering a size of 13.2ha. Work on the project is expected to start at the end of the year," he told Business Times.
Ganesh said this foreign direct investment is significant for the development of Bandar MSC Cyberport as it will give the development international credibility and recognition from Indian multinational companies (MNCs) that are already clients or are familiar with Sunil Mantri's successful developments in India.
"This will jump-start foreign information technology (IT) investments in Bandar MSC Cyberport and Iskandar Malaysia," he said.
He said Sunil Mantri and MSC Cyberport will cooperate to develop Bandar MSC Cyberport, and does not rule out the possibility of the establishment of a joint-venture company to carry out the project.
"We are in the midst of finalising the details of a special purpose vehicle (SPV) to conduct the development and will make the announcement on the set-up of the SPV in due course," he said.
Elaborating on Bandar MSC Cyberport, Ganesh said the project is a 60ha information, communication and technology (ICT) city development located in Kulai, within Iskandar Malaysia where the Second Link and the North-South Expressway meet.
"It will be a mixed development with residential, commercial and ICT spaces targeting the IT operations of MNCs, while developing local technology companies and technopreneurs.
"The cybercity will be ready in phases, starting end of 2008 to 2009," he said.
MSC Cyberport was established to create a global ICT business hub, with a world-class living environment for ICT companies worldwide within Iskandar Malaysia. This is in line with the government's MSC Malaysia initiative.
Bandar MSC Cyberport is operated and managed by MSC Cyberport Sdn Bhd, 30 per cent-owned associate of Kumpulan Prasarana Rakyat Johor Sdn Bhd, which in turn is a wholly-owned subsidiary of the Johor government.
The cybercity at present covers two designated locations, namely Menara MSC Cyberport and Bandar MSC Cyberport. It is envisioned that these two hubs will serve as a vehicle to initiate and facilitate the growth of ICT and knowledge-based industries in Johor.
It is based on the hub and spoke concept, each having its own unique strength and cost-effective base for ICT companies targeting emerging markets in the Asia-Pacific region.
By New Straits Times (by Kamarul Yunus)
Mainstay counts on Sumo concept
Raja Mohd Azmi Raja Razali (centre) showing a model of Space U8 to Bank Kerjasama Rakyat Malaysia managing director Datuk Kamaruzaman Che Mat (left) and Shah Alam Mayor, Mazalan Md Noor at the project launch recently.
DEVELOPERS love to coin new words, especially for concepts that are new, exciting and marketable. The word condotel (a mix of condominium and hotel) was the craze in the early 1990s. Then the term vanished as sudden as it appeared. Soho (small office, home office) is still in vogue today while we are hearing less of the city-within-a-city concept.
Last week, Mainstay Development Sdn Bhd, a subsidiary of Mainstay Holdings Sdn Bhd, has called its maiden flagship commercial development, Space U8 in Shah Alam, a Sumo or shop unit, mall office.
Some reporters attending the official launch of Space U8 at the project site (1.5km from Giant Shah Alam and near TTDI Jaya) on May 26 were baffled by the term.
Mainstay Development executive chairman Raja Mohd Azmi Raja Razali explained that Sumo is built on a hybrid concept of dual frontage, featuring shop offices on the outer frontage with an inner facade of a retail outlet.
Like a mall, it will be a place for people to meet. Space U8, with a gross development value of RM220mil, will have a 70,000 sq ft central courtyard where events such as the screening of movies on a giant screen, weekend markets and celebrations could be held.
“We believe it's the first concept of its kind in Selangor, but people may call it differently. We have received about 50% bookings for the shop office units,” he said. He is confident that the units would be quickly taken up.
The concept sounds familiar.
Some new shop office developments in the Klang Valley like Glomac's Plaza Glomac in Kelana Jaya (which also has a dual frontage and a big centre court), and I-Bhd's CityPark shop offices (hi-tech and linked to the City Walk pedestrian mall) also have a kind of mall concept.
A potential problem of this kind of open mall is that it might attract the wrong crowd –youths might lepak (hang around) and become a nuisance. It is thus important that the property must have proper management and security. In this respect, Space U8 will have 24-hour security with CCTV facilities as well as ample parking space with 1,500 bays.
Scheduled to open first quarter of 2010, Space U8 (named after its location in Section U8, Bukit Jelutong) will comprise 58 units of freehold, stratified four-storey shop offices on an almost triangular-shaped 8.39-acre site. Intermediate units measure 25ft x 90ft with total built-up area of 9,000 sq ft while end and corner units vary from 10,000 to 12,000 sq ft. The average price is RM330 per sq ft.
There will be 46 intermediate, eight end and four corner units. Shop units on the ground level will have a five-metre high ceiling with other units at 3.2m. There will be a four-storey building with 84,000 sq ft for an anchor tenant.
The project is scheduled for completion in December 2009.
Raja Azmi (previously chief executive officer of Fly Asian Xpress Sdn Bhd, now renamed Air Asia X) said the company's vision was to make Space U8 the shopping haven and corporate address in Shah Alam.
“We also hope to attract people from the surrounding areas such as Ara Damansara, Subang Jaya and Klang,” he said. “We have received a great deal of interest from potential investors keen to become part of this commercial hub. We are confident it will be a huge success.”
He added that businesses and investors would find much appeal in Space U8's location, as there was a population of more than 580,000 spanning Bukit Jelutong, TTDI Jaya, TUDM Subang and Shah Alam.
The company is targeting new start-ups and medium-sized companies as potential tenants, offering them a suburban address with easy accessibility and less traffic congestion. The project is linked to highways like Guthrie Corridor Expressway and the New Klang Valley Expressway.
A hypermarket, private college, and food and beverage operators have enquired about leasing in the project.
By providing the funding, Bank Kerjasama Rakyat Malaysia Bhd is also lending confidence and credibility to the development.
By The Star (by S.C.Cheah)
Penang projects to gain from conversion
A NUMBER of property projects in Penang, especially those on reclaimed land of the island and township developments by state agencies, can look forward to higher property value if the land tenure of these projects is converted to freehold from their current leasehold status.
According to Real Estate and Housing Developers Association Penang chairman Datuk Jerry Chan, while most privately owned pieces of land are on freehold status, projects on state reclaimed land are mostly on leasehold land.
Townships undertaken by state agencies in Bayan Baru and Seberang Jaya and commercial projects such as Komtar are also on leasehold basis.
“The initiative to allow the conversion of leasehold residential land to freehold status is certainly welcomed as it will add value to leasehold property and development projects in the state.
“It is a timely exercise to raise Penang's profile and attraction as a real estate destination,” Chan said.
The projects that stand to benefit include IJM Properties Sdn Bhd's 350 acres of reclaimed coastal land along the Jelutong Expressway, which has a potential gross development value of RM6.5bil.
Under a privatisation exercise in 1997 to build the Jelutong Expressway, IJM was granted the right to reclaim the land for property development.
Development plans for an integrated waterfront township called The Light will comprise residential, entertainment, business, education and commercial components.
Under phase one, six parcels of high-end residences will be developed over 17ha comprising 1,186 units. It is scheduled for completion in three to five years.
Phase two will comprise a commercial and retail centre on 41.68ha while phase three would be developed into a 2.8ha seafront park.
Previously, there were also other sizeable leasehold property developments in the state that have been converted to freehold status.
In October 2005, the former Penang state government allowed the 73-acre Queensbay land to be converted from leasehold to freehold. The Queensbay project, which was located on reclaimed land, was jointly developed by the state and a private developer.
When the original developer was unable to continue with the project, the state government in a kind gesture granted the conversion of the freehold titles to the buyers as “compensation in kind”, as the developer (the state is also a partner) was unable to pay the liquidated damages.
The CP group was invited by Bayan Bay Development Bhd to be the “white knight” to revive the project. Work started in 2005 and the project is scheduled for completion in 2013.
The entire integrated seafront township in the southwestern seaboard of Penang island will have a gross development value of RM1.5bil.
In 2006, E&O Property Development Bhd also managed to convert its Seri Tanjung Pinang reclaimed land in Tanjong Tokong to freehold status.
A filepic showing the development of Seri Tanjung Pinang
Seri Tanjung Pinang, with an estimated gross development value of RM2bil, is a key earnings driver for E&O. With the 605 acres and rights to reclaim a further 740 acres, the company is one of the largest developers in Penang now.
By The Star
Call for review of land status
PROPERTY consultants and developers agree it is time to review the country's leasehold land concept to keep up with the changing needs and overhaul Malaysia's land tenure system.
They concur that such an initiative would benefit individual property owners as well the respective state governments through conversion premium income.
“While owners of individual leasehold property face a steady erosion in the value of their property over time, state governments are sitting on essentially a goldmine which could easily be unlocked by returning the freehold rights to the leaseholders,” Regroup Associates executive chairman Christopher Boyd told StarBiz.
He said it was timely for the Federal Government to take the lead to come out with a Leasehold Reform Act that would enable leaseholders to buy the freehold interest based on a certain premium formula.
“Both the Federal and state authorities should realise that there is no point in holding on to their freehold reversions. An orderly and transparent system for selling the freehold rights to the respective leaseholders would be a wise and popular move.
“The whole leasehold concept is an anachronism and has outlived its usefulness. It's a legacy from the old British system and Britain has also went on to review the leasehold concept that resulted in the Leasehold Enfranchisement Act (1963), giving leaseholders the right to buy up their freehold interest. “It is long overdue in Malaysia and a review is certainly in order,” Boyd said.
He said the Penang state government's initiative to encourage residential leasehold landowners to have their land converted to freehold status would have a far-reaching impact on the property market if it was adopted by the other states.
Penang chief minister Lim Guan Eng had recently urged leasehold landowners to apply to the state government to convert government land into freehold status with a premium payment.
The new land policy would allow 30-year, 60-year or 99-year residential leasehold land to be converted into freehold land on a case-by-case basis. The state is also looking at allowing the tenure of leasehold industrial land owned by the state government to be extended from 60 years to 99 years.
“It is a very far-sighted policy that will encourage a long-term mindset in terms of development plans by developers and enhance the attraction of Penang as a real estate investment venue.
“Leaseholders will substantially enhance the value of their properties, and when renovating or improving their properties, they can take a long-term view,” Boyd said.
He said the land premium price to convert leasehold to freehold status had to be based on a fair formula, taking into account the difference between the freehold land price and the property's current market price.
Real Estate and Housing Developers Association (Rehda) president Ng Seing Liong concurred that the initiative was a positive development for the people as well as the property sector and urged other state governments to look into adopting it.
Rehda Penang chairman Datuk Jerry Chan said land and property value could easily appreciate by 25% to 30%, and property projects would be more marketable and attractive to investors.
“The onus is on the state government to disclose the quantum of premium to be paid based on a fair formula for leaseholders,” he said.
Mah Sing Group Bhd president and group chief executive Datuk Sri Leong Hoy Kum said converting leasehold land to freehold status would certainly enhance the value of the development, depending on the location of the property.
Datuk Seri Leong Hoy Kum
If it is in the heart of the city and at a very strategic location, the appreciation in value could reach 100% to 300%.
“There will be a two-fold benefit to the owners – they do not have to face the hassle of renewing the leases, and they may enjoy a windfall should they decide to sell the land or property later. Bank financing for freehold property will also be easier to come by compared with property with less than 40 years’ lease.
“Besides enhancing the appeal of the development for local buyers, this will also encourage foreign buyers to participate more actively in the property market,” Leong said.
He said Penang was a good state to start with the initiative “since there is not much leasehold land there and other states can observe the effects of the initiative before deciding whether this is viable for the individual states.”
“Developers who may have been hesitant to develop land with short lifespan left on their leases will have a new avenue to explore business opportunities. This will be a stimulus to boost the property market as there will be more land transactions,” Leong said.
By The Star (by Angie Ng)
Trinity upbeat on PT19 Residency
TRINITY Towers Sdn Bhd is optimistic that the bungalows at its PT19 Residency development in Bandar Bukit Puchong will be fully taken up by August.
The development, comprising 24 units of three-storey garden villa bungalow, has achieved a 40% take up since its launch in March, said managing director Datuk Neoh Soo Keat.
»Our designs are anything but conventional« DATUK NEOH SOO KEAT
“We have had buyers from Subang, Petaling Jaya, Bangi and within Puchong itself,” Neoh told StarBiz.
Located on two acres of 99-year leasehold land, the PT19 Residency project has a gross development value of RM20mil and is expected to be completed in 18 months.
The guarded and gated enclave would have round-the-clock CCTV surveillance and lush greenery surrounding the development.
The garden villas come in two types, comprising built-up areas of 3,529 sq ft and 3,588 sq ft with price tags ranging from RM848,000 to 877,000.
With readily available infrastructure and amenities, residents could enjoy the value of the development the moment they moved in, said Neoh.
“PT19 Residence is five minutes' away from shopping complexes like Giant, Tesco and Jusco. It is also directly connected to the NKVE and Kesas highway,” he added.
Neoh said people were impressed with the designs of the garden villas.
“Many people think Puchong is a very conventional area. Our designs are anything but conventional,” he said.
“It is also part of our philosophy to develop projects that have value and quality. We want our projects to be reputable developments.”
PT Residency is the second project by Trinity Towers. Its first, a high-rise condominium, The Heron Residency, was launched in 2005 and has been fully taken up.
“Our Heron Residency project is located just next to PT19 and the value of the property has appreciated about 30% since its launch,” said Neoh. “We expect the value of our PT19 project to achieve an appreciation of up to 35% in three years,” he added.
Trinity Tower’s next project is a mixed development, Bandar Kinrara 9, situated near Bukit Jalil. “We hope to launch that project in August,” said Neoh.
By The Star - StarBiz - (by Eugene Mahalingam)
Monorail - just what Penang needs
RAPID economic development coupled with increased urbanisation in Penang has led to a significant growth in the number of vehicles using the road network.
On Penang island, this has placed considerable strain on the existing urban transport infrastructure, leading to worsening traffic congestion, increased parking problems and environmental degradation.
The Malaysian Resources Corp Bhd (MRCB)-led consortium's monorail proposal for Penang covers densely populated areas such as George Town, Air Hitam, Pulau Tikus and Komtar, to name a few, and the industrial areas.
The plan also provides proposed monorail stations with environmentally clean and efficient feeder bus services.
It will also be easy for the disabled to use.
"Among the features, are a lift with Braille buttons, blind person guides (via studded floors) leading to the station platform and two wheelchair spaces in each monorail vehicle," said Scomi Engineering Bhd president Hilmy Zaini Zainal.
Each station will boast elevators and a train floor at platform height that meets International Disability Act standards.
The trains will also have a wheel chair area.
Hilmy said foundation works are in progress and the pre-cast beams can be constructed simultaneously at the casting yard and launched at site when columns are ready.
"In fact, a considerable amount of site work will be done during the night to mitigate disruption to normal traffic during the day."
The MRCB-led consortium, which includes Scomi Engineering Bhd and Penang Port Sdn Bhd, has been given a letter of intent by the government for the job.
The consortium beat three other bidders for the project and submitted its bid in November last year.
The other three bidders for the monorail were MMC Bhd, the then Road Builder (M) Holdings Bhd, which has since been taken over by IJM Corp Bhd, and the Melewar Group.
By New Straits Times
On Penang island, this has placed considerable strain on the existing urban transport infrastructure, leading to worsening traffic congestion, increased parking problems and environmental degradation.
The Malaysian Resources Corp Bhd (MRCB)-led consortium's monorail proposal for Penang covers densely populated areas such as George Town, Air Hitam, Pulau Tikus and Komtar, to name a few, and the industrial areas.
The plan also provides proposed monorail stations with environmentally clean and efficient feeder bus services.
It will also be easy for the disabled to use.
"Among the features, are a lift with Braille buttons, blind person guides (via studded floors) leading to the station platform and two wheelchair spaces in each monorail vehicle," said Scomi Engineering Bhd president Hilmy Zaini Zainal.
Each station will boast elevators and a train floor at platform height that meets International Disability Act standards.
The trains will also have a wheel chair area.
Hilmy said foundation works are in progress and the pre-cast beams can be constructed simultaneously at the casting yard and launched at site when columns are ready.
"In fact, a considerable amount of site work will be done during the night to mitigate disruption to normal traffic during the day."
The MRCB-led consortium, which includes Scomi Engineering Bhd and Penang Port Sdn Bhd, has been given a letter of intent by the government for the job.
The consortium beat three other bidders for the project and submitted its bid in November last year.
The other three bidders for the monorail were MMC Bhd, the then Road Builder (M) Holdings Bhd, which has since been taken over by IJM Corp Bhd, and the Melewar Group.
By New Straits Times
Saturday, May 31, 2008
SP Setia uses ECO approach
Top property developer SP Setia Bhd set up a Corporate Responsibility Think Tank late last year to map out a long-term strategy towards fulfilling its corporate social responsibilities.
For years, everyone in the public-listed group, from the directors to the most junior employees, have been involved in community work, preserving the environment and nurturing a caring community.
The best part is that staff members enjoy their voluntary work, with many even performing at the company’s annual dinner and other functions.
Datuk Voon Tin Yow (right) and executive director Khor Chap Jen.
Chief operating officer Datuk Voon Tin Yow said the group believes the time is ripe to take its social activism to the next level. “Our aspirations as a responsible corporate citizen can be summed up in a single statement: Building Sustainable Communities for All.”
Voon said the group’s activities and approach were reflected in the acronym “ECO” where “E” stands for environment, “C” for community and “O” for organisation.
Environment: Its focus is on the 3Rs – reduce, reuse and recycle – and it pledges to never develop projects on environmentally sensitive land.
It recently held a 13-week long Setia Indah Recycling Campaign initiated by Setia Indah Residence Club, Southern Waste Management (SWM) and the Johor Baru City Council. Some 1,200 residents turned up every week with old newspapers, magazines, plastic bottles and aluminium cans to exchange for cash.
Voon said 34 tonnes of material were collected during the campaign and SWM paid out RM9,348 to the residents.
“We take into consideration how our developments could impact the environment. For example, at Setia Eco-Park we try not to cut too much of the terrain but keep as much to the original contours as possible. We also try not to disturb the eco-system and change the drainage system too much,” he added.
Other efforts include designing offices that are energy-efficient such as the new Setia Corporate Tower and the Setia Eco Gardens sales office.
It also observes Earth Day 2008 at Setia Eco Gardens with a carnival, nature excursions and exhibition. It has also introduced energy-efficient homes and preserved the biodiversity and created living environments in projects such as Setia Eco-Park in Shah Alam and Setia Eco Gardens in Johor Baru
Community: SP Setia prides itself in being a developer of communities where people can live in harmony and interact closely with one another. With plenty of amenities, residents can “live, learn, work, play” in the same township.
In the case of its 4,000-acre Setia Alam in Selangor, the company has set aside some 200 acres for a commercial centre and amenities for the residents. In the adjacent Setia Eco-Park, it is building some 3,000 high-end homes and even built a link to the North Klang Valley Expressway.
“We also take into consideration the travel patterns of the residents and plan our development in such a way that residents do not generate too many trips. All our projects have amenities such as parks, schools, a sports academy and shopping malls. We also invest heavily to provide top-notch infrastructure for all our projects,” Voon said.
Its biggest contribution to society is via SP Setia Foundation, a charity trust established in January 2000 to provide financial assistance to needy individuals and charitable bodies.
A core activity of the foundation is the Setia Adoption Programme that has adopted 2,300 students of all races from 119 primary schools.
The programme provides school bags, stationery, school uniforms, books, school fees, canteen meals, and tuition fees worth RM700 to RM800 per pupil annually up to Year 6. A series of holistic activities like home visits, holiday camps, UPSR motivation camps, dialogues with parents and excellence awards night are organised under the programme.
Voon said the foundation had raised RM35.5mil since 2000, with group managing director and chief executive officer Tan Sri Liew Kee Sin personally donating RM300,000 a year. The group alone donates RM1.5mil a year to charity.
The foundation has spent over RM11.6mil in the Setia Adoption Programme from 2000 to 2007. In 2003, the programme was extended to secondary education where straight A scorers in the UPSR examination would each receive RM1,000 a year. At present the group has adopted 168 such pupils.
Organisation: Hewitt Associates, Asian Strategy of Leadership Institute and Malaysian Employers Federation have voted SP Setia the Top 10 Best Employer in Malaysia for 2003 and 2005.
Voon said its many staff benefits include interest-free study loans, free lunch boxes for all employees on normal working days (annual cost is RM60,000), three paternity leave days and 60 maternity leave days, staff discount on the purchase of a residential unit for every two years of service, merit-based performance appraisal system which rewards high productivity, outpatient medical treatment and check-up reimbursement for employees and their family members, including parents, spouses and children, and over 100 types of in-house and external training.
“We also have an Employees Prolonged Illness Scheme whereby the company will continue to give full monthly basic salary for the first two months of medical leave; half pay for the second two months and no pay for the third two months’ leave,” Voon added.
By The Star (by S.C.Cheah)
Inspiring reality through creativity and innovation
One of the kitchens exhibited, showing considerbale floor to ceiling storage space, large island countertops for food preparation and dining
Someone once defined creativity as the act of turning new and innovative ideas into reality.
In order to be creative, we need to be inspired, and one of the sources of inspiration for us in the property development industry is the Salone Internazionale del Mobile in Milan.
The Milan International Furniture Fair is an annual affair that attracts furniture designers from all over the world who use the fair as a venue to showcase their latest creations.
Visitors, who also come from all over the world, are thus given a glimpse of what they can expect for the home of the future.
A team of us from SDB visited the I Saloni 2008 last month.
The fair was held at Fiera Milano, also known as the Milan Fairgrounds, in Rho, just outside the city centre.
Fiera Milano is an indoor exhibition area with eight huge pavilions covering approximately 345,000 sq m.
There is a central boulevard equipped with walkalators and flanked by exhibition halls on either side.
The roof of the Fiera Milano resembles a sail, made from glass and steel, making it a sight to behold.
This year’s furniture fair featured 2,450 exhibitors. It was so well organised that in spite of the large turnout of 348,000 visitors, it did not feel overly congested.
The exhibition was divided into 20 exhibition sections – too vast to completely cover in just six days.
We, therefore, concentrated on the furniture, kitchen and bathroom exhibits, focussing on the high-end designer pieces in line with our local developments.
Each exhibitor had at least one or two attention-grabbing pieces that were notable in their design and innovation.
We observed that storage and the covering up of clutter was a big theme at the fair.
Flou, a well known company that designs bedroom furniture showed off cabinets that looked like large upright trunks.
Several variations of this were on display – one opened to reveal a vanity table with storage areas for personal belongings; while another opened up into a wardrobe; and yet a third concealed a writing table and bookshelf.
Renowned furniture house, Minotti, had very cleverly designed large seats with flexible back rests that could be detached from the chairs and re-attached in several different ways, making the chair a versatile addition to any household.
The furniture on display was generally stylish and well thought out. For example, there was a table made from an exceptionally thin and sleek piece of wood which, upon closer examination, revealed that it was, in fact, secured by bolts on the underside of the table.
The kitchens that we saw featured open plans with island counter tops.
Kitchen cabinets were mostly large, reaching from floor to ceiling and providing a generous amount of room for kitchen and pantry storage – the kind of set up that is ideal for keeping all kitchen wares out of sight, thus endowing the kitchen with a spacious feel.
In many displays, the kitchen was no longer tucked away, but was integrated into the living and dining areas.
Island counter tops, for example, were used as areas for food preparation as well as for dining and entertaining.
What was also interesting were the many different types of cabinet mechanisms – some cabinet doors would slide to the side when open, while others would slide sideways and back, allowing the door to be completely hidden from view when ajar.
There were also high-tech electronic kitchens on display – doors, for example, could be opened at the mere touch of a button; and in some cases, there was the total luxury of having a flat screen TV, a CD player and a radio incorporated into the kitchen set up – all very practical when you consider the kitchen as part of your living space.
A lot of thought had also been put into bathroom storage. Like kitchens, bathrooms have become an “extension” of the bedroom space.
A large proportion of the display featured space-saving ideas in bathroom accessories such as small side tables that open to expose storage space.
The bathroom cabinets were generally very sleek-looking - some had large sliding panels that provided storage options for all manner of bathroom necessities including towels and toilet paper – a de-cluttering process that again gives a more spacious feel to the bathroom.
The roof at the entrance of the Milan Fairgrounds
In addition to the fair, we managed to visit several furniture stores around Milan.
There, too, we found some engaging pieces. One kitchen cabinet manufacturer, Bulthaup, had cabinets, ovens and microwave ovens that were cantilevered from the walls.
Overall, the trip was an interesting one – we saw a good mix of interesting and appealing designs which were, above all, practical.
Our impression of Italian designers – in both the industrial design and fashion arenas – is that they have a natural flair for crafting first-class artistic creations.
The dimensions of their products, the quality of materials used and the designs were superior in many ways.
It is interesting to note that this design capital of the world attracts not only manufacturers and exhibitors to its fair grounds; it also draws a wide variety of young designers who flock to the fair for the SaloneSatellite, as well as various fringe events like the Zona Tortona held in the south western part of the city, where young designers participate in exhibiting their design ideas and projects.
By The Star (by Teh Lip Kim)
New Parkson store in Kuantan
KUANTAN: Parkson Corp Sdn Bhd is expecting sales turnover of RM40mil in the first year of operations for its latest Parkson outlet at East Coast Mall here.
General manager (marketing and merchandising) Raymond Teo said RM15mil had been invested in the outlet.
Raymond Teo at the store’s launch
“This is the third outlet in Kuantan and the 33rd in the country. I am also glad to note it is our third store launch within the first four months this year,” he said here recently.
Teo said Parkson would be opening two more outlets this year - one in Kuala Terengganu by mid-July and another in Kota Baru by year-end.
He said with the new stores, the company would see its retail space expand by 30% and be represented in every state except Perlis.
“This is a special year for us as it marks our 21st anniversary. We are still growing with the nation and remain committed to being the best department store for all Malaysians,” he said.
Teo said as the anchor tenant at East Coast Mall, Parkson occupied 105,640 sq ft over three floors.
Parkson would constantly innovate, adapt and change to stay ahead and further strengthen its position in the Malaysian retail scene, he said.
“We are proud to be the first commercial and travel square in the east coast to contribute to the Government’s initiative for the East Coast Economic Region.
“In line with our corporate social responsibility programme, we have adopted six parks nationwide. They including Taman Kejiranan in Jalan Teluk Sisek, Kuantan,” he added.
By The Star (by Simon Khoo)
Gamuda leads falls
SHARES of property developers with key investments in Vietnam fell yesterday, led by Gamuda Bhd, on fears that the weakening macro-economic outlook for that country would affect property sales.
"We are turning more cautious on Gamuda's property venture in Vietnam," Citigroup said in a report on Thursday, telling investors to sell the shares.
House buyers in Vietnam face higher borrowing cost after its central bank raised the key interest rate to 12 per cent this month.
The Vietnamese dong, bond and stock markets are all under pressure, with investors starting to cash out, worried by the outlook for the country's currency and its trade and current account deficits.
Some analysts, including from Wall Street bank Morgan Stanley, are afraid that Vietnam may be heading for a currency crisis because its central bank has kept the dong too strong as inflation soars.
"If anything, the focus of the potential impact will be on Malaysian firms with substantial exposure in Vietnam," Affin Investment Bank said in a report yesterday.
Earnings of these companies may be eroded, and they may have to provide for diminution in investments, it added.
Shares of Gamuda were the worst-hit on Bursa Malaysia yesterday among the Malaysian builders who have ventured into Vietnam.
Gamuda tumbled 18 per cent in its steepest decline in a decade to close at RM2.45, although it is Berjaya Land Bhd, which has bigger-scale projects and higher share of earnings pinned on Vietnam, which could be the one most affected by a weaker property demand there.
Berjaya Land shares dropped 3.8 per cent to RM5.10, while SP Setia Bhd, which also ventured into Vietnam recently, was down 5.7 per cent to RM3.96.
"Gamuda fell the most because it has the biggest foreign shareholding. Most of the selling in Gamuda yesterday was done by the foreign funds," said Phillip Capital Management Sdn Bhd chief investment officer Ang Kok Heng.
Ang believes that some investors may have overreacted.
"Investors were too bullish when Gamuda first went into Vietnam, and now they are overly bearish," he said.
Other builders with relatively smaller exposure to Vietnam also fell. WCT Engineering Bhd declined 6.3 per cent to RM3.26, while Ireka Corp Bhd was 3.7 per cent lower at RM1.05.
By New Straits Times (by Chong Pooi Koon)
Gamuda likely in for choppy times
PETALING JAYA: Construction and engineering group Gamuda Bhd may be in for some choppy times, given the company's exposure to the property sector in Vietnam, which is facing soaring inflation, a plunging stock market and a depreciating currency.
The group, through Gamuda Land Sdn Bhd, is launching the 808-acre Yen So Park, with a gross development value (GDV) of US$1bil, this year.
Its share price has dropped to the lowest in two months on concerns the company might face higher borrowing costs if property sales were delayed due to a tougher environment.
Similarly, the share price of two other developers exposed to Vietnam's property sector, Berjaya Land Bhd and SP Setia Bhd, have also come under selling pressure. Gamuda shares tumbled 53 sen to RM2.45, SP Setia fell 24 sen to RM3.96 while Berjaya Land lost 20 sen to RM5.10.
According to Vietnam's General Statistics Office, consumer prices jumped 25.2% in May from a year ago as food costs jumped 42.4% on a 67.8% rise in the price of grains, including rice.
The price of housing and construction materials rose 22.9% during the period.
Citigroup said in a report yesterday that it had turned more cautious about Gamuda's property venture in Vietnam due to the country's sharply deteriorating macro picture.
It has a target price of RM2.57 per share after excluding the contribution from Gamuda's Vietnam property sales over the next two years. It cut its earnings estimates for the company by 27.3% to RM432mil for 2009 and 36.4% to RM537mil for 2010.
Analyst Choong Wai Kee expects more headwinds ahead for the company's Vietnam projects, which will account for 58% and 82% of its property revenue in the next two financial years. Overall, property is expected to account for 39% and 45% of group revenue over the period.
“The delays in property sales in Vietnam could also mean that Gamuda would have to rely entirely on borrowings to fund its initial infrastructure outlay,” he said, adding that the earnings and target price had yet to factor in any potential delays in the double-tracking project.
Earlier this year, Gamuda and MMC Corp Bhd were jointly awarded the RM14.5bil electrified double-tracking rail project linking Ipoh to Padang Besar.
Choong said the company might have to review its generous dividend policy due to the delay in the sale of its stake in 40%-owned associate company Syarikat Pengeluar Air Selangor Sdn Bhd. The company is a privatised water supplier with a capacity of two billion litres a day.
Meanwhile, Aseambankers Malaysia Bhd analyst Wong Chew Hann told StarBiz that investors have over-reacted to Gamuda's overseas exposure.
“It's now well below the revised net asset value, even after taking out the overseas property earnings,” she noted, adding that foreign shareholdings had yet to be sold.
Wong said the fair value for the company, considering only the infrastructure assets and local property projects, should be RM3.
By The Star - StarBiz - (by Fintan Ng)
UEM World profit rises to RM60mil
PETALING JAYA: UEM World Bhd’s net profit rose 23.9% to RM60.75mil for the first quarter ended March 31 from RM49.02mil a year earlier, boosted by better performance at most of its divisions.
Announcing the results yesterday, the group said revenue rose 7% to RM1.47bil from RM1.38bil while pre-tax profit improved 44.6% to RM143mil from RM98.8mil before. Earnings per share rose to 4.38 sen from 3.53 sen.
Managing director and chief executive officer Datuk Ahmad Pardas Senin said in a statement the group had shown resilience so far this year despite the tough market conditions.
“The group’s overall operating performance remains positive but we remain mindful of the current macro-economic challenges,” he said.
Ahmad Pardas said material prices were going up and that it was crucial to closely monitor the group's costs and ensure the delivery of key projects.
“It is imperative that we achieve this in order to stay on course in meeting our targets,” he said.
UEM World said the engineering and other services segment saw revenue rising 7% to RM341.9mil from RM318.8mil.
Its construction segment saw a 24% decline in revenue to RM433.7mil from RM573.5mil in the previous corresponding quarter. However, it managed to contain the costs, resulting in a 17% improvement in net profit of RM11.4mil compared with RM9.7mil a year ago.
The group's healthcare operations reported a three-fold rise in net profit to RM18.9mil against RM6.3mil a year ago, underpinned by a 21% increase in revenue to RM309.7mil from RM256.1mil.
By The Star
Friday, May 30, 2008
Magna Prima targets fivefold jump in revenue
PROPERTY developer Magna Prima Bhd is targeting revenue to increase fivefold to RM1.6 billion in four years, contributed mainly by Magna City Kuala Lumpur, its five-in-one integrated lifestyle development.
The RM1.1 billion Magna City, on a 4.12ha freehold site along Jalan Kuching, will be developed in phases over four years, starting from the third quarter.
It will include shop-lots, signature offices, two blocks of serviced apartments comprising 800 units, a boutique hotel and a three-level retail mall.
"With a total current gross development value (GDV) of RM2.6 billion and estimated future revenue of RM1.6 billion, the group is confident of sustaining its earnings visibility for at least the next four years," chief executive officer Lim Ching Choy said after Magna Prima's annual general meeting (AGM) yesterday.
INTEGRATED DEVELOPMENT: Lim talks about Magna City at the AGM
The RM2.6 billion GDV will come from its 34.4ha in the Klang Valley, currently under development.
In the fiscal year ended December 31 2007, Magna posted a higher net profit of RM26.6 million compared with RM93,000 in 2006, largely due to sales from its six-star Avare condominium at the Kuala Lumpur City Centre and the Dataran Otomobil township in Shah Alam, Selangor.
Revenue jumped 326 per cent to RM344.44 million.
"We are taking this occasion (AGM) to unveil Magna City. We have opened it for registration and expect sales to be encouraging as it is the first five-in-one concept project in the northern corridor to meet the integrated needs of consumers," Lim said.
He added that the RM100 million boutique hotel will offer 250 rooms, while the RM445 million lifestyle non-conventional retail mall will be retained to strengthen its recurring income stream.
The serviced apartments are targeted at local as well as overseas buyers from Hong Kong, Singapore, Indonesia, India, South Korea and Australia, and those who have previously purchased Magna Prima properties.
The one-, two- and three-bedroom apartments will have built-ups of 600, 900 and 1,350 sq ft respectively, while the penthouses will offer 3,300 sq ft space.
The units will be priced from RM230,000, or RM350 per sq ft, to RM1.25 million each.
Magna Prima is also looking for land within the Kuala Lumpur city boundary to launch additional integrated developments. It is negotiating with a landowner and expects to conclude a deal for a piece of land in two months, Lim said.
"Our business model is to go for urban pocket-size developments where the GDV is of significant value.
"The group will focus on strengthening its position as a niche integrated lifestyle developer and leverage on the demand for exclusive products in prime locations to ensure sustainable growth in sales and earnings."
On the rising cost of raw materials, Lim said that Magna Prima has ventured upstream into the ready-mix concrete business to ensure regular supply of materials for its projects. It is also sourcing globally to reduce building costs.
Yesterday, shareholders approved the proposed final dividend of seven sen per share for 2007.
By New Straits Times (by Sharen Kaur)
For more information, please visit the official website: http://www.magnaprima.com.my/future.htm
The RM1.1 billion Magna City, on a 4.12ha freehold site along Jalan Kuching, will be developed in phases over four years, starting from the third quarter.
It will include shop-lots, signature offices, two blocks of serviced apartments comprising 800 units, a boutique hotel and a three-level retail mall.
"With a total current gross development value (GDV) of RM2.6 billion and estimated future revenue of RM1.6 billion, the group is confident of sustaining its earnings visibility for at least the next four years," chief executive officer Lim Ching Choy said after Magna Prima's annual general meeting (AGM) yesterday.
INTEGRATED DEVELOPMENT: Lim talks about Magna City at the AGM
The RM2.6 billion GDV will come from its 34.4ha in the Klang Valley, currently under development.
In the fiscal year ended December 31 2007, Magna posted a higher net profit of RM26.6 million compared with RM93,000 in 2006, largely due to sales from its six-star Avare condominium at the Kuala Lumpur City Centre and the Dataran Otomobil township in Shah Alam, Selangor.
Revenue jumped 326 per cent to RM344.44 million.
"We are taking this occasion (AGM) to unveil Magna City. We have opened it for registration and expect sales to be encouraging as it is the first five-in-one concept project in the northern corridor to meet the integrated needs of consumers," Lim said.
He added that the RM100 million boutique hotel will offer 250 rooms, while the RM445 million lifestyle non-conventional retail mall will be retained to strengthen its recurring income stream.
The serviced apartments are targeted at local as well as overseas buyers from Hong Kong, Singapore, Indonesia, India, South Korea and Australia, and those who have previously purchased Magna Prima properties.
The one-, two- and three-bedroom apartments will have built-ups of 600, 900 and 1,350 sq ft respectively, while the penthouses will offer 3,300 sq ft space.
The units will be priced from RM230,000, or RM350 per sq ft, to RM1.25 million each.
Magna Prima is also looking for land within the Kuala Lumpur city boundary to launch additional integrated developments. It is negotiating with a landowner and expects to conclude a deal for a piece of land in two months, Lim said.
"Our business model is to go for urban pocket-size developments where the GDV is of significant value.
"The group will focus on strengthening its position as a niche integrated lifestyle developer and leverage on the demand for exclusive products in prime locations to ensure sustainable growth in sales and earnings."
On the rising cost of raw materials, Lim said that Magna Prima has ventured upstream into the ready-mix concrete business to ensure regular supply of materials for its projects. It is also sourcing globally to reduce building costs.
Yesterday, shareholders approved the proposed final dividend of seven sen per share for 2007.
By New Straits Times (by Sharen Kaur)
For more information, please visit the official website: http://www.magnaprima.com.my/future.htm
Lifestyle project to drive Magna’s revenue
KUALA LUMPUR: Magna Prima Bhd is confident of clear earnings visibility at least over the next four years, thanks mainly to its newest project, Magna City.
Executive director and chief executive officer Lim Ching Choy said the company was targeting revenue of about RM1.6bil over the four-year period.
“The projected revenue will be largely driven by Magna City, our latest 5-in-1 integrated lifestyle project in Jalan Kuching,” he said after the company AGM yesterday.
The integrated development project will comprise shop lots, signature offices, serviced apartments, a hotel and a retail mall.
Construction on the 10.23-acre freehold site will be undertaken in four phases, with the first phase to start in July. The final phase is targeted for completion by the third quarter of 2011.
Magna Prima currently has a gross development value (GDV) of RM2.13bil.
On coping with challenges, Lim said Magna Prima had a policy of mitigating the effects of rising raw material prices by opting for bulk purchasing and hedging the purchase of building materials where possible.
“We have also ventured upstream into the ready-mixed concrete business to ensure a regular supply of materials to our projects besides also sourcing globally for materials to reduce building costs,” he said.
For the first quarter ended March 31, Magna Prima posted a net profit of RM5mil on sales of RM48.3mil from a net profit of RM1mil on revenue of RM25.4mil for the same quarter in 2007.
Among the company's newly launched projects is the U1 Shah Alam, a 3-in-1 integrated lifestyle development venture with GDV of RM135mil.
By The Star
Property scene in Vietnam still good
PETALING JAYA: The Vietnamese economy is going through a tough period with high inflation, a poorly performing stock market and a depreciating currency but Malaysian investors there are not unduly worried at the moment.
“A cooling off in the economy, which has recorded an average gross domestic product growth of 8% in the past three years, is a good breather for the country.
“The current snags will not tailspin into anything worrisome and Vietnam is on track for sustainable growth,” Berjaya Land Bhd chief executive officer Datuk Francis Ng told StarBiz yesterday.
He said Vietnam was attracting a huge inflow of foreign direct investments (FDIs), which totalled US$25bil last year. Most of the FDIs were in infrastructure development, manufacturing and property development sectors.
Such comments are comforting to investors who have over the past few months become anxious over the state of Vietnam's economy.
Fitch Ratings has cut the country’s credit rating, and its currency is taking a beating. Its stock market has been closed for the past few days due to a computer glitch.
But the main cause for concern is rising inflation, which in May topped 25%, and the measures taken to cool it.
TA Securities property sector analyst Kamarul Zaman Hassan told StarBiz that Malaysian property players had not been too concerned about the currency and inflation crisis now facing that country.
”The market is still there for property in Vietnam,” he said, adding that many investors saw the current turmoil as a short-term correction.
“Vietnam has seen a lot of inflows of funds in the past three years, so a correction was expected,” Kamarul said. “But in the long term, the players expect growth to continue as it has in the past three years.”
Ken Peng, a Citigroup analyst who covers Vietnam, said in a report dated Tuesday that the weakening of the dong was a result of severe foreign currency shortage.
“The central bank (SBV) is curbing foreign currency supply to preserve foreign reserves for refined petroleum imports and other contingencies,” he said.
The potential for further currency depreciation was worsening Vietnam’s balance of payments position, Peng said.
A host of Malaysian companies have made a steady beeline for Vietnam, one of South-East Asia's fastest growing economies. From rubber glove makers to can manufacturers, Malaysian companies have been increasing their exposure to Vietnam.
But the group that has made the biggest splash has been the construction and property players, which view Vietnam as a huge earnings kicker to their Malaysian-centric operations.
Berjaya Land has six projects in Vietnam – two in Hanoi and four in Ho Chi Minh City. The projects, with an estimated gross development value (GDV) of RM40bil, will span from 2009 to 2020.
Its maiden residential project, The Thach Banh New City project in Hanoi, with GDV of US$500mil, will be launched in the middle of next month.
“The take-up of recently launched residential projects in Ho Chi Minh City is still very strong. We are in Vietnam for the long term and are confident of the long-term growth of the economy,” Ng said.
A WCT Land Bhd spokesman said the Vietnamese government was very pro-active in assisting overseas companies develop designated areas in the country's cities.
“Fundamentally, the property market should still hold out quite well, given the huge population of 85 million, of whom more than half are less than 30 years old,” he said.
WCT Land, which has been granted an investment certificate to undertake a mixed commercial development in Ho Chi Minh City, will be launching next year the Platinum Plaza, which has a projected GDV of RM1bil. The project comprises a shopping mall, a hotel, two office towers and serviced apartments.
WCT Land is also in the process of getting its next investment certificate for the RM2bil Gateway Point on 8.4ha near the commercial business centre of Binh Thanh District in Ho Chi Minh City.
SP Setia Bhd is also on track to launch its maiden residential project, EcoLakes in My Phuoc in Binh Duong province, at the end of next month.
Last June, SP Setia teamed up with government-linked conglomerate Becamex IDC Corp to develop the RM2.5bil township.
Gamuda Land Sdn Bhd, too, will launch its Yen So Park integrated development on 500 acres south of Hanoi this year. The RM8bil project will comprise high-rise office towers, four- and five-star international hotels, a convention centre, shop offices and residential components.
By The Star - StarBiz - (by Angie Ng and Loong Tse Min)
Mah Sing Q1 net profit rises 25% to RM22.3mil
PETALING JAYA: Mah Sing Group Bhd reported 25% jump in net profit to RM22.31mil for the first quarter ended March 31 compared with RM17.9mil in the previous corresponding period.
In a statement, the company attributed the higher net profit on revenue of RM140.7mil to contribution from nine projects in first quarter compared with seven projects in the previous corresponding quarter.
Group managing director and group chief executive Datuk Seri Leong Hoy Kum said growth markets this year were medium- to high-end residential and commercial projects in good locations.
He said the company expected another good year underpinned by its unbilled sales of about RM1bil as at March 31, which was twice its revenue last year.
The company also had a remaining gross development value of RM2.98bil, which would ensure earnings visibility for seven years, Leong added.
By The Star
Gamuda, BLand down on Vietnam worries
KUALA LUMPUR: Property stocks Gamuda and Berjaya Land fell in the morning session Friday, dragged down by worries about their Vietnam ventures on the country’s worsening macro outlook and surge in inflation.
However, gains by blue chips including DiGi, BAT and Genting lifted the KL Composite Index.
At 12.30pm, the KLCI was up 5.99 points to 1,267.81. The FBM Emas added 17.18 points to 8,475.15 and the FBM Second Board gained 7.51 points to 5,795.44. The property sector index fell 5.45 points to 790.84.
Turnover was 371.88 million shares valued at RM950mil. There were 204 gainers, 291 losers while 254 counters were unchanged.
Asian markets were mixed, with Japan’s Nikkei 225 up 1.24% to 14,299.53, Singapore’s Straits Times Index added 0.55% to 3,178.08 while Hong Kong’s Hang Seng Index gained 0.56% to 24,520.69 but Shanghai’s A Share Index fell 0.27% to 3,559.12.
Vietnam’s stock market was the world’s biggest decliner when it fell 55% to 414 after a government report showed inflation had jumped the most since 1992. The stock exchange has yet to resume trading after a technical glitch over the past three days.
Light crude oil eased to US$126.27 (RM409.12) per barrel while crude palm oil fell RM61 to RM3,504 per tonne in line. The ringgit was quoted at RM3.24 to the US dollar.
At Bursa Malaysia, Berjaya Land-LB fell 55 sen to RM5 with 9,000 units done. IOI Properties lost 50 sen to RM9.90. Gamuda was the most active with 53.73 million shares done, down 38 sen to RM2.60 while Berjaya Land lost 30 sen to RM5.
Other decliners were Shell, falling 30 sen to RM10.90, MPI and Nestle 25 sen each to RM8 and RM29.50 while Proton gave up 20 sen to RM3.40 and Tradewinds 19 sen to RM4.96. Actively traded MRCB lost seven sen to RM1.35.
United Plantations fell 30 sen to RM13.80 but KL Kepong rose 40 sen to RM17.60 and Kulim gained 25 sen to RM9.10 and Kulim-WB 15 sen to RM6.45.
DiGi, BAT and PPB advanced 50 sen each to RM25.50, RM44 and RM11.50 respectively as they are viewed as defensive counters.
Genting rose 20 sen to RM6.50 and Resorts two sen to RM3.24, despite Genting’s first quarter net profit fell 33% to RM439.4mil.
By The Star (by Joseph Chin)
Gamuda tumbles 13pc
GAMUDA Bhd led shares of Malaysian property developers lower in Kuala Lumpur trading on concern their sales in Vietnam will be eroded by higher borrowing costs.
Gamuda, Malaysia's second-biggest builder by stock market value, tumbled 13 per cent to RM2.60 at 12.30 pm. Berjaya Land Bhd lost 5.7 per cent, while SP Setia Bhd, whose only overseas projects are in Vietnam, dropped 4.3 per cent.
Malaysian developers have increased investments in Vietnam, where the economy grew at the fastest pace in a decade last year. Gamuda's projects include the Yen So Park in Hanoi, a development of offices, luxury apartments and a convention center that the company values at US$1 billion.
"There may be de-ratings coming in on these property projects," said Jason Lee, who helps oversee the equivalent of US$2.1 billion as general manager of equities at Amanah Raya-JMF Asset Management in Kuala Lumpur. "Nobody really knows the impact. These property companies have some fairly big exposure."
Vietnam's central bank raised its key interest rate to 12 per cent on May 17 and the country is heading for a "currency crisis" because the bank has kept the dong too strong as inflation soars, Morgan Stanley said on May 28.
Citigroup Inc cut its target price for Gamuda 14 per cent to RM2.57, turning more cautious on the company's venture in Vietnam, analyst Choong Wai Kee said in a report today. He maintained his "sell" rating on the stock. Gamuda is based in Petaling Jaya, outside the Malaysian capital.
Ho Chi Minh Projects
SP Setia, Malaysia's biggest property developer, said on April 16 it plans to invest US$100 million in Vietnamese projects that may generate as much as 30 per cent of the company's profit and sales in three years.
Puchong, Malaysia-based SP Setia last year began developing the 558.4-acre (226-hectare) EcoLakes project in My Phuoc, 40 kilometers (25 miles) north of Ho Chi Minh City. The company also plans to develop 79 acres of land in Ho Chi Minh City.
SP Setia fell 18 sen to RM4.02, headed for the largest drop since April 3. Berjaya Land declined 30 sen to RM5, set for the biggest fall since March 10.
Berjaya Land said on February 14 it plans a debt sale that may raise RM875 million (US$270 million) to help expansion in Vietnam. The company said in December that the projects may generate sales of RM31.1 billion.
By Bloomberg
Gamuda, Malaysia's second-biggest builder by stock market value, tumbled 13 per cent to RM2.60 at 12.30 pm. Berjaya Land Bhd lost 5.7 per cent, while SP Setia Bhd, whose only overseas projects are in Vietnam, dropped 4.3 per cent.
Malaysian developers have increased investments in Vietnam, where the economy grew at the fastest pace in a decade last year. Gamuda's projects include the Yen So Park in Hanoi, a development of offices, luxury apartments and a convention center that the company values at US$1 billion.
"There may be de-ratings coming in on these property projects," said Jason Lee, who helps oversee the equivalent of US$2.1 billion as general manager of equities at Amanah Raya-JMF Asset Management in Kuala Lumpur. "Nobody really knows the impact. These property companies have some fairly big exposure."
Vietnam's central bank raised its key interest rate to 12 per cent on May 17 and the country is heading for a "currency crisis" because the bank has kept the dong too strong as inflation soars, Morgan Stanley said on May 28.
Citigroup Inc cut its target price for Gamuda 14 per cent to RM2.57, turning more cautious on the company's venture in Vietnam, analyst Choong Wai Kee said in a report today. He maintained his "sell" rating on the stock. Gamuda is based in Petaling Jaya, outside the Malaysian capital.
Ho Chi Minh Projects
SP Setia, Malaysia's biggest property developer, said on April 16 it plans to invest US$100 million in Vietnamese projects that may generate as much as 30 per cent of the company's profit and sales in three years.
Puchong, Malaysia-based SP Setia last year began developing the 558.4-acre (226-hectare) EcoLakes project in My Phuoc, 40 kilometers (25 miles) north of Ho Chi Minh City. The company also plans to develop 79 acres of land in Ho Chi Minh City.
SP Setia fell 18 sen to RM4.02, headed for the largest drop since April 3. Berjaya Land declined 30 sen to RM5, set for the biggest fall since March 10.
Berjaya Land said on February 14 it plans a debt sale that may raise RM875 million (US$270 million) to help expansion in Vietnam. The company said in December that the projects may generate sales of RM31.1 billion.
By Bloomberg
UEM Builders posts RM29m Q1 net profit
UEM Builders Bhd reported RM29.2 million net profit on RM595.8 million revenue in the first quarter ended March 31 2008, compared with RM17 million net profit and RM714.6 million revenue in the same period last year.
The firm said the lower revenue was mainly due to completion of major domestic construction projects in 2007 such as the Rawang-Ipoh electrified double track project and PLUS third lane widening project (Seremban-Ayer Keroh), while other new projects are in the start-up phase and have yet to generate revenue.
"We are happy with the results and will strive to achieve our targets despite a challenging business environment where significant cost escalation in material prices has become the norm," managing director Datuk Ridza Abdoh Salleh said in a statement.
He said the company is implementing various measures to counter the impact of price volatility in construction materials and fuel, including the inclusion of negotiated price escalation clauses in the construction contracts.
"Moving forward, the group is positive that the Penang second bridge project will be implemented as planned," he said, adding that progress of works on the project has been significant and the company has incurred more than RM200 million to-date.
By New Straits Times
The firm said the lower revenue was mainly due to completion of major domestic construction projects in 2007 such as the Rawang-Ipoh electrified double track project and PLUS third lane widening project (Seremban-Ayer Keroh), while other new projects are in the start-up phase and have yet to generate revenue.
"We are happy with the results and will strive to achieve our targets despite a challenging business environment where significant cost escalation in material prices has become the norm," managing director Datuk Ridza Abdoh Salleh said in a statement.
He said the company is implementing various measures to counter the impact of price volatility in construction materials and fuel, including the inclusion of negotiated price escalation clauses in the construction contracts.
"Moving forward, the group is positive that the Penang second bridge project will be implemented as planned," he said, adding that progress of works on the project has been significant and the company has incurred more than RM200 million to-date.
By New Straits Times
Thursday, May 29, 2008
Condos for the Japanese
Teluk Air Tawar condo (artist's impression)
RAINE & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh is confident the time is ripe to market Penang properties more aggressively to the Japanese market.
His latest project is to sell three tower blocks at the Teluk Air Tawar condominium development in Butterworth to Japanese who are keen to have a vacation or second home close to three golf courses.
Located north of the Butterworth ferry terminal, the project site takes only 15 minutes to reach by car via the newly-built Seberang Perai Coastal Road.
Comprising 72 three-bedroom units in each of the three blocks, the project was revived this year and is undertaken by Welcome Properties Sdn Bhd.
Standard units have a built-up space of 1,328sq ft and come in two layout designs. They are all designed as corner units. The en bloc sale is estimated at RM30 million per block.
Geh, whose firm is in Penang, cites the scenic coastal location with a panoramic view of Penang island as an important selling point. The development site faces Tanjung Bungah and Tanjung Tokong on the island.
Location map of Teluk Air Twar condo project, dotted line in the map indicates the Seberang Perai coastal highway.
But the main attraction for targeted Japanese buyers is the proximity of the Teluk Air Tawar condo development to three golf and country clubs, namely, Cinta Sayang, Permaipura and Havard Jerai. They are all located to the north-east in Kedah. Cinta Sayang is only 20 minutes away by car.
And with the vibrant growth of commercial centres and retail outlets in Butterworth, residents will have no lack of shopping facilities such as the Tesco, Makro and Carrrefour hypermarkets.
As for food and beverage outlets, the highly popular Auto City commercial centre at Juru is a choc-a-block full of bars and restaurants offering all types of cuisines including Japanese and Korean as well as Western food.
With liberal conditions under the Malaysia My Second Home scheme, the Teluk Air Tawar development may soon become another Japanese enclave with spin-off services to cater to this expatriate community.
By The Star
Marketing property professionally
MALAYSIAN property developers seem poised to undertake megaprojects with world-class facilities but the country lacks marketing specialists able to sell effectively to international investors.
But property consultant Michael Geh, senior partner at Raine & Horne International Zaki + Partners Sdn Bhd, has a vision to help improve the marketing skills of not only his fellow real estate practitioners and agents but developers and their marketing staff.
Newly elected as the FIABCI vice president for network and marketing for 2008 to 2010, Geh will make a case at the federation's meeting this month in Amsterdam for internationally-recognised professional real estate courses to be introduced in Malaysia.
Based in Paris, FIABCI is the French acronym for The International Real Estate Federation. Some 100 national real estate associations representing 1.5 million professionals are affiliated to the federation.
“During my two-year term, I'm committed to do something to enhance the level of real estate marketing skills in Malaysia,” said Geh.
Geh pointing to the condo development site in Teluk Air Tawar
“As FIABCI's elected representative in the Asia-Pacific region for network and marketing, there are certainly a few things which I can contribute.
“In the Malaysian property sector, there are currently two crucial things lacking, international marketing skills and transnational marketing skills for both agents and developers. At best, such skills are at a very low level.
“Even if there are courses available, only bosses get to attend international seminars or meetings to learn about trans-national marketing skills. What about the marketing managers and other executives?”
Geh plans to get the approval of FIABCI headquarters in Paris to allow courses from their FIABCI University (www.fiabciuniversity. org) to be conducted here.
Said Geh: “I look forward to getting FIABCI University, which is like London's Open University, to conduct courses in Malaysia. This is to enable FIABCI members in this region to benefit from such a development.
“Another possibility is to have the Certified International Property Specialists (CIPS) course by the United States National Association of Realtors to be introduced here,” he said, adding that he qualified as a CIPS member in Bangkok two years ago.
There are only three people in Malaysia who have CIPS qualification.
Trans-national
Geh envisaged that with readily available opportunities to improve themselves, real estate agents will be motivated to act more professionally especially if they are duly rewarded.
He cited the Malaysia My Second Home scheme as a prime example of how better international marketing skills can promote the programme more effectively.
Professional agents will encourage foreigners who target South-east Asia as a possible base to relocate or buy a vacation home here.
Said Geh: “We also need world class real estate practitioners to handle world class projects.
“Developers in general have a limited understanding of international sales and their attitude towards their sales agents is equally limited. They don't really take it seriously.
“When it comes to international sales, developers deem it adequate to allocate 1% to 2% sales commission.
“In Singapore, Hong Kong and Europe, developers use estate agents as part of their marketing plans during the pre-launch and even the developmental stage. Obviously, the developers also have their own inhouse marketing team as the backbone to take care of details.
“Major international sales are conducted by highly-skilled estate agents with important networking connections. There are such factors as international co-brokering and referrals.
“Our real estate business is limited to a person to person basis. Currently, the fees are at a lowly 1% to 2% of the transacted price. We are simply not competitive enough to sell internationally except, perhaps, to Indonesia. International referrals are not forthcoming.”
In this situation, Geh pointed out that property websites flourish and developers are putting their money in such websites. But as skill levels increase, transactions will go back to a person-to-person basis and there will be a higher degree of networking success.
In mature markets, for example, in the U.S. and Europe, everything is done on a cobrokering basis. In the Philippines, the fee is 5% of the transacted price.
“For international transactions to be facilitated, we need to have 3% to 5% sales commission for international co-brokering and referrals.”
But Geh stressed that skills can't be gained “overnight”.
“We need to have professional training and expertise to be taught here. But some say that by promoting such courses, I'm just creating more competitors for myself. But I don't see it that way. By having such courses here, we can all benefit.
“Real estate transactions should be a high value, high trust and high fee form of business. These three elements must be there to promote greater professionalism.”
By The Star
IGB expanding Mid Valley development
KUALA LUMPUR: IGB Corp Bhd is expanding its Mid Valley City development, which would see the group launching two 42-storey blocks of condominiums.
Group managing director Robert Tan said the two blocks would have a gross development value of RM750mil. The units are due for launch by the third quarter.
Robert Tan
The condominiums, which would cost about RM650 per sq ft, would be the last component in Mid Valley City, he told reporters after the company AGM yesterday.
Tan also said IGB was looking to build a hotel each in Bangkok and Australia as it sought to expand its hotel business overseas.
The proposed RM200mil hotel in Bangkok would be undertaken by a joint venture between IGB and a foreign party. Under the joint venture, IGB’s 49% stake would cost RM100mil. The hotel would be managed by IGB’s hotel management arm, Cititel Hotel Management Sdn Bhd.
Construction cost was estimated at A$80mil to A$150mil, Tan said.
On its Micasa hotel property in Kuala Lumpur, Tan said IGB was keen to dispose of a 50% stake and was in talks with an interested party.
By The Star
IGB to start building St Giles hotels next year
IGB Corp Bhd hopes to begin construction of its St Giles hotels in Bangkok, Thailand and Sydney, Australia next year, which it will then manage.
"In Bangkok, we are trying to finalise the deal. We are looking for a strategic partner. We have identified and are in negotiations with a few parties," managing director Robert Tan Chung Meng said.
Tan said the hotel ownership will be on a 51-49 per cent basis, in which the Thai partner will hold the majority stake.
"It will be a 650-room four-star hotel. Our portion of the cost of construction will be RM100 million. We hope to finalise something within the next six months," he told reporters after the company's annual general meeting yesterday.
In Australia, IGB is negotiating to build either a A$80 million (RM248 million) 250-room hotel or a A$150 million (RM466 million) 450-room hotel.
These two new hotels will add to its Cititel and Cititel Express brands, MiCasa All Suite Hotel in Yangon, Myanmar; and New World Hotel in Ho Chi Minh City, Vietnam. IGB also owns and operates the Boulevard Mid Valley and The Gardens Hotel in Mid Valley.
Asked about the status of plans to sell the 242-suite MiCasa All Suite Hotel in Kuala Lumpur, Tan said that it has held talks for the sale of a 50 per cent stake in the hotel.
Although he declined to reveal how much the 50 per cent stake may be worth, it is believed that the entire property could go for as much as RM230 million.
Meanwhile, IGB said that it will launch the final phase of the Mid Valley City project by the third quarter of 2008.
"The final phase consists of two 42-storey residential blocks with different configurations. The gross development value for the project is estimated to be RM750 million," he said.
IGB plans to sell the property from RM650 per sq ft onwards.
In the current year ending December 31 2008, IGB expects its asset management and hotel business to be the main profit contributor.
By New Straits Times (by Vasantha Ganesan)
"In Bangkok, we are trying to finalise the deal. We are looking for a strategic partner. We have identified and are in negotiations with a few parties," managing director Robert Tan Chung Meng said.
Tan said the hotel ownership will be on a 51-49 per cent basis, in which the Thai partner will hold the majority stake.
"It will be a 650-room four-star hotel. Our portion of the cost of construction will be RM100 million. We hope to finalise something within the next six months," he told reporters after the company's annual general meeting yesterday.
In Australia, IGB is negotiating to build either a A$80 million (RM248 million) 250-room hotel or a A$150 million (RM466 million) 450-room hotel.
These two new hotels will add to its Cititel and Cititel Express brands, MiCasa All Suite Hotel in Yangon, Myanmar; and New World Hotel in Ho Chi Minh City, Vietnam. IGB also owns and operates the Boulevard Mid Valley and The Gardens Hotel in Mid Valley.
Asked about the status of plans to sell the 242-suite MiCasa All Suite Hotel in Kuala Lumpur, Tan said that it has held talks for the sale of a 50 per cent stake in the hotel.
Although he declined to reveal how much the 50 per cent stake may be worth, it is believed that the entire property could go for as much as RM230 million.
Meanwhile, IGB said that it will launch the final phase of the Mid Valley City project by the third quarter of 2008.
"The final phase consists of two 42-storey residential blocks with different configurations. The gross development value for the project is estimated to be RM750 million," he said.
IGB plans to sell the property from RM650 per sq ft onwards.
In the current year ending December 31 2008, IGB expects its asset management and hotel business to be the main profit contributor.
By New Straits Times (by Vasantha Ganesan)
Wednesday, May 28, 2008
Sunrise to set KLCC land price record
PRIME SITE: Wisma Angkasa Raya is a stone’s throw from the Petronas Twin Towers.
SUNRISE Bhd has proposed to buy a piece of prime land in the heart of Kuala Lumpur, a deal that will set a new record for land prices in the Kuala Lumpur City Centre (KLCC) area.
The freehold 69,171 sq ft land houses the 29-year old Wisma Angkasa Raya, and is a stone's throw from the Petronas Twin Towers.
Sunrise plans to buy the land for about RM179 million, or RM2,588 per sq ft (psf), higher than what YTL Corp Bhd paid for 0.4ha in Jalan Stonor earlier this year.
"The price is undoubtedly a new record for Kuala Lumpur," Aseambankers analyst Ong Chee Ting wrote in a report yesterday, adding that it is a fair price.
The deal reflects the bullishness of Malaysian developers as the capital grapples with a shortage of office space.
The land "has potential to be redeveloped into an upmarket commercial development", Sunrise said in a statement to Bursa Malaysia on Monday.
The main risk to the project is that Kuala Lumpur may have too much office space by 2010.
Nevertheless, that risk is offset by the fact that the site is a good location, Ong noted in his report.
Under the deal, Sunrise is buying all of Tanah Tuah Development Sdn Bhd for RM27 million cash from Reliance Pillar Sdn Bhd and Lembaran Segimaju Sdn Bhd.
Tanah Tuah has an interest in the land as it signed a deal on January 14 this year to buy the property for RM152 million.
However, that deal is not completed yet. Sunrise did not identify the original landowner.
In addition, Sunrise will settle a RM30.4 million loan given to Tanah Tuah by Reliance Pillar and Lembaran Segimaju.
Ong calculates that if Sunrise's new property can be sold at RM1,300 psf, there is still a hefty 30 per cent margin to be made.
"This translates into potential gross development value and development profit of RM900 million and RM208 million respectively," he said.
Reliance Pillar and Lembaran Segimaju bought into Tanah Tuah this month for about RM40 million.
By New Straits Times (by Presenna Nambiar)
KrisAssets eyes foreign properties
KRISASSETS Holdings Bhd, the owner and operator of Mid Valley Megamall in Kuala Lumpur, may inject foreign retail and commercial assets into the company.
Depending on the location and value of the assets, KrisAssets may buy the properties on its own or with a partner.
"We are always looking for opportunities to acquire. We are in negotiations with foreign parties in China, India and Vietnam. They came to us and asked us to do a joint venture," group managing director Robert Tan Chung Meng said.
TAN: We are in negotiations with parties in China, India and Vietnam
"We are able to explore opportunities in the US because of the subprime issues. Otherwise, the US was not in our radar. We are looking at completed retail and commercial properties there," he said.
Speaking to reporters after the company's annual general meeting yesterday, Tan said the company was also in negotiations with parties from Europe and the UK.
Tan is also looking at property development opportunities in these countries for IGB Corp Bhd. IGB owns 74.9 per cent of KrisAssets.
Tan added that the recently opened high-end retail component The Gardens Mall, with a net book value of RM442.37 million, will be injected into KrisAssets when it achieves profitability. The Gardens in now owned by IGB.
"The Gardens is showing a 10 to 15 per cent improvement month-on-month. This is still not to our mark, but when we are in the high-end business it will take time to grow the business ... but it will come," Tan said.
Tan who described The Gardens' occupancy as "not bad" at 90 to 95 per cent, however, said that the mall needed higher visitation and higher spending. "There is a shortfall in our targets," he said.
A bigger budget has been set aside this year to help improve The Gardens' performance and results are expected within the next two to three years.
The existing components within Mid Valley City and the addition of five-star The Gardens Hotel and two office blocks with an anticipated 30,000 to 40,000 occupants will lend support towards the performance of the mall.
According to Tan, KrisAssets takes the form of a real estate investment trust. As such, it will look at injecting The Gardens within two to three years when it achieves earnings before interest, taxes, depreciation and amortisation.
On plans to inject commercial properties, Tan said: "There are a few possibilities. We may keep KrisAssets purely as retail or we could add offices as well."
Another company may be set up to spin off the commercial properties, which could happen in 2009 or 2010.
Meanwhile, based on the current status of the Malaysian economy, Tan expects the commodity market to have a positive impact on the performance of Mid Valley Megamall.
The RM1.75 billion mall receives between 30 million and 35 million visitors annually. The company hopes to outdo the internal target set for itself.
In the financial year ended December 31 2007, KrisAssets posted a net profit of RM122.74 million on the back of RM207.09 million in revenue.
By New Straits Times (by Vasantha Ganesan)
Sunrise to redevelop Wisma Angkasa Raya
PETALING JAYA: Sunrise Bhd is believed to be acquiring Wisma Angkasa Raya, located opposite the Petronas Twin Towers in Kuala Lumpur City Centre (KLCC), for redevelopment into an upmarket commercial project.
In a filing with Bursa Malaysia on Monday, the property developer said it had entered into an agreement with Reliance Pillar Sdn Bhd and Lembaran Segimaju Sdn Bhd to acquire Tanah Tuah Development Sdn Bhd for RM57.4mil.
Sunrise will pay RM27mil in cash and make a RM30.4mil shareholders' advance to Tanah Tuah. It has paid a deposit of RM5mil.
According to the announcement, Tanah Tuah has registrable interest in a piece of freehold land within the KLCC.
“Tanah Tuah represents a good investment as the property that is being acquired by Tanah Tuah has potential to be redeveloped into an upmarket commercial development, which will further strengthen the group's presence in a prime location,” Sunrise said in the statement.
Tanah Tuah had in January agreed to buy the 1.6-acre land from the original owner for RM152mil but the agreement has yet to be concluded.
Sunrise said it had taken the necessary legal measures to safeguard its interest in the event the company's agreement with the vendors was completed before the completion of the accord between Tanah Tuah and the original owner.
Wisma Angkasa Raya, which is around 29 years old, is Kuala Lumpur’s first high-rise office building. The unencumbered property is a 24-storey commercial building comprising a 20-storey office tower and a four-storey podium with two basement carparks.
It has a total net lettable area of 167,728 sq ft and an occupancy rate of 96.4%.
Aseambankers research analyst Ong Chee Ting said that assuming Tanah Tuah had taken a 100% debt funding for the purchase, Sunrise’s RM27mil cash payment to the vendors would have raised its acquisition cost to RM179mil, or RM2,588 per sq ft.
“Even at RM2,588 per sq ft, it is considered a fair price. Assuming that KL City Hall grants Sunrise a 10 times plot ratio for redevelopment, similar to the upcoming Menara YNH in Jalan Sultan Ismail, the price per plot ratio works out to RM259 per sq ft.
“Adding RM500 per sq ft per plot ratio for the construction of an upmarket development and factoring in an efficiency ratio of 80%, the total construction cost comes to about RM1,000 per sq ft per net saleable area,” Ong said.
Given that KL City Hall has raised the plot ratio for commercial development to nine to 10 times now compared with Wisma Angkasa Raya's three times, Ong said the redevelopment could yield a gross development value of at least RM900mil.
“If Sunrise’s new property can be sold above RM1,300 per sq ft, there's still a 30% margin to be made. This translates to a development profit of RM208mil,” he said.
Ong said the risk for the redevelopment plan was a possible oversupply of new office space in Kuala Lumpur by 2010, although this risk is “mitigated by the property’s prime location''.
By The Star (by Angie Ng)
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