Cement price set to rise further

The average selling price of local cement is now on par with cement prices in the Asia-Pacific which range from RM273 to RM277 per tonne.

On Monday, Lafarge Malayan Cement Bhd, which controls about 40% of the local cement market, said it would raise the prices of its cement products by RM20 per tonne from Aug 1.

Industry analysts said the latest price increase would translate into a new average selling price of about RM277 per tonne for cement in Malaysia.

They expect further hikes in cement price this year, given strong indications that other local players like YTL Cement Bhd, Tasek Cement Bhd and Cement Industries of Malaysia Bhd would soon emulate Lafarge's move to offset the recent 26% rise in electricity tariff and 63% jump in diesel price.

An analyst with a foreign brokerage told StarBiz the local cement industry was an oligopoly dominated by four large players.

“I expect cement price to continue to increase based on the high price of coal – the major source of energy for cement operators.

“Cement constitutes about 50% of raw material costs or about 20% of total construction cost. I believe every 10% increase in cement price will increase property development cost by 2%,” the analyst said.

CIMB Research said in its report yesterday that the price hike by Lafarge was not surprising, as cement companies would have to raise their selling prices following higher operational costs.

Despite the anticipated slowdown in construction, the research unit said it did not expect the price increase to dent demand in the short term.

However, CIMB Research is cautious on the long-term outlook, given delays in construction projects and a slowdown in the property sector.

It also expects a lower risk of imports due to the revised selling price that is on par with regional prices.

This will give local suppliers an edge over imports in terms of storage, quality and shelf life of the products.

Aseambankers said Lafarge's revised selling price of about RM275 per tonne in August was comparable to the price of efficient cement producers in Thailand at an estimated RM273 per tonne.

It said the quantum of Lafarge's price hike was sufficient to offset its higher cost but “the main concern is on the price of coal”.

Coal spot price based on Australia's Newcastle Index has averaged US$180 per tonne currently compared with US$70 per tonne last year.

Lafarge is set to review its cement prices by year-end. “They will possibly be higher if prices of raw materials and fuel continue to escalate,” said the research unit.

By The Star - StarBiz

Export ban on steel bars, cement?

KUALA LUMPUR: Is a temporary ban on export of steel bars and cement on the cards?

It looks like the Government may impose some kind of restrictions to help the construction industry overcome the rising prices of these and other raw materials.

Housing and Local Government Minister Datuk Seri Ong Ka Chuan said he had received lots of requests from developers and contractors that there should be restrictions to control the outflow of essential items.

Ong said his ministry was talking with the Finance Ministry on the matter and was mindful of the fact that priority should be given to meet local demand.

However, for the moment, he felt it would be better to allow the free market system to determine the supply and demand of steel bars and cement, while the Government closely monitors escalating prices and their supplies.

“But if the situation persists, I think the Government has to intervene. We have to make it our priority to the local industries rather than overseas market even if it (the raw material) fetches a better price,” he said.

Ong said this at a press conference after witnessing the signing of a mutual co-operation agreement between I-Bhd and Kompakar Group for the development of a Tier 4 Ready Data Centre in the RM2bil i-City integrated commercial-cum-residential development in Shah Alam.

Meanwhile, the Master Builders Association Malaysia (MBAM) has warned that many medium and small contractors from Class D, E and F may be forced to stop, delay or even abandon projects as a result of the steep price hike of essential building materials.

“The Government should act quickly. If the situation continues to worsen, it should step in and ban export of steel bars and clinkers to ensure building materials manufacturers would supply the needs of the local construction industry first,” said MBAM president Ng Kee Leen.

He said the 10% import tax for cement should be waived as well because contractors and developers were facing great pricing pressure and any form of import tax relief would be appreciated.

Although cement liberalisation was announced on June 5, Ng said the import of cement was still not in place due to logistics.

With liberalisation, cement price had continued to rise from RM10.90 during the government price control period to RM13.20 (22% up) immediately after liberalisation and now another increase by RM1, or 30%, per 50kg bag to RM14.25.

In the case of steel bars, he said, although it was liberalised on May 12, the liberalisation process was not well implemented.

“It was difficult to import steel bars and there are still cases of Customs Department officers demanding for approved permits and/or impose import duty on certain steel bars.

“MBAM hopes the Government would simplify (matters) by making clear the process to import steel bars for local construction use,” he added.

MBAM also requested cement and steel bar manufacturers to provide at least six months' lead time for any announcement on price increase to enable contractors to allocate provisions to mitigate their cost.

Ng said the Lafarge Malayan Cement Bhd's announcement on price increase for cement effective Aug 1 would hurt the construction industry.

Meanwhile, ready-mixed concrete operators in Selangor and Kuala Lumpur yesterday announced revised prices for ready-mixed concrete of various grades by 5.2% to 6.2% effective Aug 1.

By The Star

GCorp plans niche residential project in KL

KUALA LUMPUR: General Corp Bhd (GCorp) plans to acquire a small piece of land in the Klang Valley this year for a proposed niche residential property project, says executive director Datuk Marco Low.

The company wanted to focus on small and luxury residential projects because they were in demand, he said, but declined to provide more details on the proposed land acquisition.

“However, for the broader property market, investors are more cautious due to the current economic conditions,” Low said after the company AGM yesterday. Executive director Michael Cheong said the strategy to focus on higher-end properties was necessary to contain capital expenditure, especially due to soaring building material prices.

He said the Malaysia My Second Home programme had boosted demand for high-end properties, especially from foreign buyers. GCorp is developing Panorama, a 223-unit freehold luxury condominium project at Persiaran Hampshire, close to the Kuala Lumpur City Centre.

Low said Panorama was scheduled for completion by end-2010 and the total gross development value (GDV) was about RM300mil. About 90% of the units had been sold since it was launched in April, he added.

He said GCorp was building 25 bungalows at Taman Esplanad, Bukit Jalil, with a GDV of RM40mil and, so far, 50% of the units had been sold. The company had also been busy in Singapore with two projects, Low added. Its subsidiary, Low Keng Huat (S) Ltd, is involved in the S$346mil Hard Rock Hotel at the integrated resort at Sentosa and a S$146mil job to renovate the Meritus Mandarin Hotel along Orchard Road.

“Our development projects in Singapore are contributing the bulk of our profit this and next year,” he said.

By The Star

Developer General Corp on track to maintain growth

PROPERTY developer General Corp Bhd expects to maintain the growth it enjoyed last year, bolstered by its developments in Singapore.

The company has two contracts in Singapore worth a combined S$492 million (RM1.17 billion).

The group registered net profit of RM41.3 million for the financial year ended January 31 2008, a nine per cent jump from the RM37.8 million it made the year before.

General Corp's developments in Singapore contributed 46 per cent to revenue last year.

The group recorded RM337.6 million in revenue last year.

The group's executive director Datuk Marco Low Peng Kiat said the company will not be aggressive in executing its growth plans this year, preferring to focus on completing its existing projects.


LOW: We are looking for more of pockets of land for niche development

He said the stance is in light of the current political and economic uncertainties in the country.

This does not stop the company from growing its land bank though, as it looks to grow its number of properties in the Klang Valley area.

"We are not looking for big acquisitions, more of pockets of land for niche development," Low said.

On the impact of rising raw material prices like steel and cement, he said the group has recorded a 10 per cent increase in cost due to the phenomenon.

Low said he expects a softening in demand for the property market this year especially with the uncertainty in the political scenario.

"We are fortunate that we are involved in niche developments rather than large scale developments like townships," executive director Michael Cheong Chee Leng said.

He said larger scale projects would be the ones most hit by the price increases.

By New Straits Times (by Presenna Nambiar)

Mutiara Goodyear and Kajang Heights team up

PETALING JAYA: Mutiara Goodyear Development Bhd is teaming up with Kajang Heights Development Sdn Bhd to undertake a property project with a gross development value of RM430mil.

Under the agreement signed yesterday, Mutiara unit Regal Form Sdn Bhd would build mixed commercial and residential properties on Kajang Heights’ 27.6ha site in Kajang, of which 21.5ha would be for houses and the remaining 6.1ha for shoplots.

Mutiara chief executive offer Kee Cheng Teik said in a statement the joint venture would allow both parties to combine their resources and expertise to add value to the proposed development. The completion date for project was five years.

Under the agreement, Kajang Heights would be entitled to RM50mil or 22% of the GDV, whichever was higher, from the project with initial payment of RM6mil. Its entitlement could also be satisfied via unsold units in the project based on the launch price.

By The Star

Mutiara's RM430m project in Kajang

PROPERTY developer Mutiara Good-year Development Bhd will be developing mixed commercial and residential properties in Kajang with a gross development value (GDV) of RM430 million.

Mutiara, through its wholly-owned unit, entered into a joint-venture agreement with Kajang Heights Development Sdn Bhd yesterday to develop the latter's 27.77ha (68.58 acres) land, it told Bursa Malaysia yesterday.

"Under the agreement, Kajang Heights Development is entitled to RM50 million, or 22 per cent, of GDV from the project with an initial payment of RM6 million," it said.

By New Straits Times

IJM calls off Sabah condo, hotel plan

IJM Corp Bhd's property unit will not develop its earlier planned condominium and boutique hotel in Kota Kinabalu, Sabah.

"IJM Properties Sdn Bhd and Suria Capital Holdings have mutually agreed not to proceed with the joint venture for the development of a 16-storey condominium and 11-storey boutique hotel," it told Bursa Malaysia yesterday.

The developments were to be housed under Zone 1 within the port area at Jalan Tanjung Lipat, Kota Kinabalu, which is being developed into a tourism-related mixed development known as the Jesselton Waterfront Project.

By New Straits Times

Phase 2 of Mines park secures sales before launch

COUNTRY Heights Holdings Bhd's second phase of Mines Waterfront Business Park has already secured sales and received enquiries from potential buyers locally and abroad, even before its launch.

Project developer, Mines Waterfront Business Park Sdn Bhd (MWBP), is expected to start the construction within the next six months.

MWBP sales and marketing head Vincent Chew said the second phase of the project, which is an extension of the current five blocks of the property, would be launched in one to two months' time.

"The yet-to-be launched Phase 2 of Mines Waterfront Business Park has already secured sales from purchasers who have heard about this sure-win investment through word-of-mouth.

"There are some enquiries from foreign and local parties who are interested to purchase en-bloc with a net lettable area of a little over 66,000 sq ft," he said in a statement.

Chew said the first phase of the project is 98 per cent tenanted with a net lettable area of 246,000 sq ft. Among the tenants are Astro, EMI, Hitachi and Mynic & Sumitomo.

The second phase comprises two blocks - Prairie and Bay - with a view of 60ha lake and 18-hole golf course and country homes.

Prairie is a 14-storey commercial block with a net lettable area of 66,000 sq ft and Bay is a 19-storey building with a net lettable area of about 106,000 sq ft.

Chew also said that it is timely for purchasers to buy the property now because if the costs of building materials keep rising, future property launches would inevitably be more expensive.

"In this scenario, property prices in general are likely to escalate soon and it is thus, timely to buy now before developers increase their prices," he said.

He said soaring material prices would result in lower supply of commercial properties as developers are more cautious in launching new projects but demand will continue to grow.

"The company (MWBP) has been closely monitoring the increase in building material prices over the past year and fortunately for us, foundation works as well as a portion of the super-structure have already been completed," he added.

By New Straits Times (by Hamisah Hamid)

Lafarge raises cement retail price

PETALING JAYA: Lafarge Malayan Cement Bhd, the country’s largest cement producer, has increased the recommended retail prices for its bagged cement products by RM1 per 50kg bag or RM20 per tonne effective Aug 1. The price increase will apply until year-end. (see table)

Lafarge’s latest move was seen by industry observers as setting the benchmark for local cement players to increase their prices “anytime” soon.

President and chief executive officer Bi Yong Chungunco told StarBiz that the company had to adjust its cement selling prices to alleviate some of the major cost increases.

Bi Yong Chungunco

The cement industry continues to face more increases in its cost of production, particularly for coal and fuel since December 2006 to June 2008.

There has been no adjustment in local cement prices since 1995. In December 2006, the Government increased the cement price by 9% but during the same period, the sector was facing cost increase of over 40%.

Following the liberalisation of the local sector last month, cement prices had increased by an average 17% to “help defray some of the cost increases that the industry has been absorbing since 1995,” Bi Yong said.

Despite the price hike in cement, diesel price shot up even higher, by 63%, while electricity cost rose 26% effective early July.

Bi Yong said: “The higher electricity tariff has an immediate impact on Lafarge’s cost of producing cement and the increase in diesel price directly impacted our inbound and outbound transportation costs.

“This also indirectly affects our other costs including overheads, contract works and capital expenditure.”

Based on the latest cement price increase effective next month, Bi Yong said cement price would have increased only three times in the past 13 years which is a total of 34%.

“This is an average of about 2.6% per annum which is much lower than the annual inflation rate while other costs have risen much higher in recent years,” she added.

Meanwhile, there was consensus that cement prices next year would depend on the prices of vital raw materials that are expected to rise in tandem with the commodity prices.

The current local cement prices range from RM250 to RM280 per tonne.

A spokesman of a major local cement group told StarBiz yesterday that coal prices had increased three-fold to US$120 this year from US$40 five years ago while cement prices increased merely 10% in the 10 years between 1995 and 2006.

“We will absorb additional costs but there are limits to how much we can absorb. The rest we need to pass on to consumers,” he said.

He said international cement prices were 5% higher than local prices, excluding logistic and storage costs.

The recent hikes in fuel price and electricity tariff were also to be blamed for squeezing manufacturers’ operating margins, he added.

Meanwhile, Cement and Concrete Association of Malaysia executive director Grace Okuda said the 10% import duty imposed on non-Asean countries was a fair measure for all parties, including builders.

She also said Malaysian manufacturers had excess supply and there was no shortage of cement at this moment.

An analyst with OSK Research has a negative outlook on the construction industry for the second half of this year. He said construction activities had slowed down partly due to economic uncertainties and inflation.

The price of cement, an important component of concrete, jumped 22% after the ceiling price was lifted on June 5.

Coal, fuel and electricity make up more than 50% of the total raw material costs for cement products.

By The Star - StarBiz - (by Law Kai Chow)

Quill sees long-term gains in assets tenanted by blue-chip firms

PETALING JAYA: Commercial real estate investment trust Quill Capita Trust (QCT) believes that quality commercial assets tenanted by blue-chip companies not only offer a stable income stream but will also generate sustainable long-term total returns on investment despite the challenging economic climate.

Chief executive officer Chan Say Yeong said blue-chip companies usually tenanted QCT's assets on a long-term basis with step-up rental rates.

“In keeping up with the quality blue-chip tenants, we are focused on continuously improving building and tenant relations. These provide QCT with organic rental growth,” he told StarBiz yesterday.

QCT recently announced a 140.4% increase in revenue to RM13.7mil for the second quarter ended June 30 from RM5.7mil recorded in the previous corresponding quarter.

Meanwhile, net profit jumped 81.1% in the quarter to RM6.7mil from RM3.7mil previously.

Earnings per share rose to 1.73 sen from 1.54 sen.

The company attributed the better results to full revenue and income contribution from recent acquisitions, namely Wisma Technip and commercial units and car park of Plaza Mont Kiara acquired in September last year, Quill Building 5-IBM, Quill Building 8-DHL and Quill Building 10-HSBC purchased in March this year.

RHB Research in a report said that despite the jump in revenue, the company experienced about a 5% decline in net profit from the preceding quarter partly due to one-off maintenance costs.

“However, despite rising inflation, we do not expect property maintenance costs to affect the company significantly in the future as we understand that it has the rights to pass on the increase to its tenants via higher service charges,” the report added.

The company recently proposed to acquire the Tesco building in Jelutong, Penang, for RM132mil from IJM Properties Sdn Bhd.

According to Chan, upon the completion of the acquisition in the fourth quarter, QCT’s asset size would increase to RM810mil, exceeding the original forecast of RM750mil for the current financial year ending Dec 31.

New assets in the pipeline include the new HSBC headquarters and KL Sentral Lot J.

“The Kuala Lumpur office market is experiencing an upturn due to healthy demand from business expansion, especially in finance, insurance as well as the oil and gas sectors,” Chan said, adding that take-up rate was expected to remain healthy.

By The Star (by Laalitha Hunt)

Al Rajhi Bank buys property

KUALA LUMPUR: Al Rajhi Bank (Malaysia) is purchasing 36 units of i-City Cybercentre 1 office suites for RM95mil, marking its first property venture in the country.

The purchase accounted for 80% of the units completed in the first phase of i-City, a RM2bil township on 72 acres in Section 7, Shah Alam.

“The investment of Al Rajhi in i-City demonstrates its real value and increasing interest among Middle Eastern companies in our property market,” I-Bhd director Eu Hong Chew said after the parties signed a sale and purchase agreement yesterday.

I-Bhd director Eu Hong Chew (left) and Al Rajhi Bank (Malaysia) CEO Ahmed Rehman posing with the signed documents for the purchase of RM95m worth of office units in i-City, Shah Alam, by the Al Rajhi Bank.

I-Bhd is the developer of iCity.

The purchase is to be completed over the next two to three months.

The first phase of i-City comprises 44 units totalling 300,000 sq ft. I-Bhd will retain 20% of the units for local information and communications technology companies.

By Bernama

Glomac keen to build more Grade A office towers in KL

DEVELOPER Glomac Bhd may build more Grade A office towers in Kuala Lumpur after its first such project was snapped up even before it started any work.

The company is now looking for land in prime areas like Bangsar, Sri Hartamas, Damansara and the city centre, group executive vice chairman Datuk Richard Fong said.


FONG: The company is now looking for land in prime areas like Bangsar, Sri Hartamas, Damansara and the city centre.

Glomac has sold the Glomac Tower in Kuala Lumpur, a 40-storey building next to the Petronas Twin Towers, to Prestige Scale Sdn Bhd, a company run by a local businessman for RM1,160 psf or RM577 million. The deal was done at the end of 2007.

"Glomac Tower is the first en bloc sale for us off the plans. We got an offer from Kuwait Finance House and Prestige we could not refuse as it was a good deal. We hit record price, which had set a new benchmark for Grade A office buildings for the city centre," Fong told Business Times in an interview recently.

The land was acquired last year by Glomac Al Batha Sdn Bhd for about RM1,000 psf from the Tan family of the Continental Hotel group.

Glomac Al Batha is a 51:49 joint-venture firm held by Glomac and Al Batha Group respectively, one of the largest private business concerns in the United Arab Emirates.

On the construction of Glomac Tower, foundation work will start in August and done in 12 months, followed by the main building, which will be completed by August 2011.

Fong said the project will be affected by higher raw material prices, but it has enough margins to cushion the increase in construction cost.

"We didn't anticipate the cost to go up by so much. The increase exceeded our expectations, but still we are able to make a handsome profit," he added.

Glomac Tower was initially worth RM450 million. It was revalued when the net floor area increased from below 500,000 sq ft to 550,000 sq ft, Fong said.

Glomac Tower will have 30 office floors, two retail and three sky restaurant floors including an open-air rooftop restaurant, four levels of elevated car park and four levels of basement car park.

It will be built in compliance with the requirements of the Multimedia Super Corridor (MSC) so that an application could later be made for MSC status.

By New Straits Times (by Sharen Kaur)

Reserves to help Mah Sing enter new markets

Mah Sing Group Bhd will be using its strengthening cash reserves to expand into new market frontiers in east Malaysia and Vietnam next year.

The company's cash pile of RM130.7mil as at March 31 will receive a boost with the scheduled completion of the en bloc sale of the east wing of The Icon@Tun Razak for RM236mil to Prompt Symphony Sdn Bhd by middle of next year.

Mah Sing's cash position was strengthened by a RM200mil capital raising exercise and proposed sale of two Grade A office buildings, The Icon@Tun Razak and The Icon@Mont'Kiara, for RM735mil last year.

Given the company's low gearing ratio of 0.03 times compared with the industry norm of 0.5 times, Mah Sing could also resort to bank borrowings for its regional expansion plans.

Datuk Seri Leong Hoy Kum

President and group chief executive Datuk Seri Leong Hoy Kum said the company was on track to become a regional lifestyle developer and some potential projects had been identified.

“We are in a very good position to make some opportunistic acquisitions.

“It is a good time to lock in land which have recently dropped in value and by the time the projects are launched in 2010, the regional economy should recover from the current slowdown,” Leong told StarBiz.

He said the company had been closely monitoring the situation in Vietnam and believed the country would recover from its current economic doldrums in the next six to nine months.

“There is still a severe shortage of houses for the country's 85 million people and our plans are to build landed residential projects and Grade A office buildings in high-growth cities,” he added.

Leong said Mah Sing was also looking at other strong growth countries including China, India and Indonesia.

In the next five years, the company's overseas projects will contribute 20% to 30% of group revenue.

Locally, Mah Sing is eyeing opportunities in Sabah and Sarawak to take advantage of the growth to be brought about by the Sabah and Sarawak growth corridors.

“The Sabah Development Corridor and the Sarawak Corridor of Renewable Energy have already attracted more than 30 foreign investors to each of the corridor.

“Kota Kinabalu's strong tourism sector offers big potential for the company to build its brand of themed commercial developments that include hotels, service apartments and shop offices,” he said.

Meanwhile, Mah Sing's 584 acres of undeveloped land bank have the potential to generate RM3bil in gross development value over the next five to seven years.

For the current financial year ending Dec 31, the company is looking at recording sales of RM560mil while new project launches will come up to RM706mil.

Citigroup Research, in a recent note, said that backed by high unbilled sales of RM1.1bil as at 31 March, Mah Sing could look forward to a three-year net profit compounded annual growth rate of 21%.

By The Star - StarBiz - (by Angie Ng)

Colour psychology helps boost business

CRACKING your head over the choice of colour for your home, office, show unit, shopping mall, product or even brand?

Well, you may need the advice of a colour psychologist like Karen Kow, the managing director of Colours In Motion Sdn Bhd that specialises in providing colour consultation to homeowners, interior designers, renovators, property investors and commercial property owners.

Karen Kow

Kow, who set up the company early this year, believes that colour could make or break the feel and value of a property.

“Many people have difficulty picking the right colours for their home. Some have a good idea of how they would like their room to look like but they may end up with mix-match of everything,” she said.

She added that many people were not very adventurous with colours and still kept the builder's white after many years.

“Light and colour can affect your emotions. For instance, it is important to choose bedroom colours that will calm and soothe a hyperactive child. Other colours encourage appetite or study,” she said.

“Colours can be used for corporate identity or it can be used to create a better working environment,” said Kow, who has a doctorate in metaphysical psychology, master's degree in metaphysical science (both from the United States) and a bachelor's degree in psychology from Britain.

Kow said colour could also affect one's perception of a product or brand.

“If you are looking to re-brand your corporate identity, we can suggest the most appropriate colours to send out the message you intend for the public and to attract your target market for your services or product by working closely with your branding, advertising, and creative team,” she said.

The use of distinctive colours to identify products, she said, could be seen everywhere. Some products are packaged in a variety of distinct colours while others tend to be packaged in variations of the same two or three colours in different designs.

She said each colour has its own individuality, wavelength and frequency.

“All physical, mental and emotional levels respond to colours. The application and usage of colour psychology is limitless because we live in a world full of colours,” she said.

“Colours can harmonise and produce effective results when used to complement an individual's character, home, and even the working environment,” said Kow, who has given consultations to clients in the US, Britain, Malaysia, Germany, Hong Kong, Australia, China and Singapore.

Her corporate and individual clients are from the hospitality, fashion, retail, banking, and property development industries.

She said research showed that people made a subconscious judgment about a person, environment, or product within 90 seconds of initial viewing and that between 62% and 90% of that assessment was based on colour alone.

Since colours used for a product, website, business card and a logo could cause powerful reactions, choosing the right colours is critical to successful sales.

Kow, who believes in enjoying everything she does and achieving a balanced and healthy lifestyle, said most people have their own favourite colours that reflected their personality, likes and dislikes.

“I do not have any favourite colours and I hope people will also like all colours and treat them impartially,” she added.

According to a handout, she is also a master practitioner of neuro-linguistic programming and holds a certification in professional clinical hypnotherapy.

Trained and certified as a colour therapist, she understands how colours affect human behaviours, emotions and physical health.

Kow is also founder and director of Path To Excellence, a company that does corporate training, hypnotherapy, executive life coaching, stress management and neuro linguistic programming.

By The Star (by S.C.Cheah)

IJM launches welded wire mesh plant in Hyderabad

NEW DELHI: IJM Corporation commissioned a RM16 million (Rs21 crore) welded wire mesh manufacturing facility in Hyderabad yesterday.

The project undertaken through IJM’s subsidiary IJM Steel Products Private Ltd is located in Isnapur near Hyderabad, capital of Andhra Pradesh.

The Hindu Business Line reported that the facility would operate with one production line initially, with a production capacity of supplying 12,000 tonnes of welded wire mesh per annum.

“Welded wire mesh for concrete reinforcement is new to the Indian construction industry. The manufactured product comes to the site ready for immediate onsite installation, contributing to higher productivity and better quality control,” said Datuk Krishnan Tan, chief executive officer and managing director of IJM Corporation.

“We are confident that the mesh is set to revolutionise the infrastructure and the real estate industry in India, which builds close to 1.5 million housing units a year,” he told reporters in Hyderabad after launching the facility.

Tan said the company planned to double its production capacity within the next three years at the Isnapur plant and has plans to set up a similar facility in Mumbai.

“We have signed up IJM (India) Infrastructure Ltd as our first customer. We wanted to first use our welded wire mesh product at our ongoing housing projects — a 120-acre project in Vijayawada and a 42-acre residential project in Nagpur — to create confidence among the Indian customers,” he said.

“We expect the Hyderabad facility to garner revenues of Rs35 crore (RM27 million) this year,” Tan was quoted as saying.

By Bernama

2009 launch for IJM Penang project

An artist's impression of The Light.

KUALA LUMPUR: IJM Land Bhd's flagship development in Penang, The Light, valued at RM4.5bil, will be launched early next year.

Work on the 152-acre mixed residential and commercial development, on 338 acres of reclaimed land along the eastern coastline of Penang (near Tesco hypermarket), will begin in September and scheduled for completion in 2017.

IJM Corp Bhd deputy chief executive officer and deputy managing director Teh Kean Ming told StarBiz yesterday the development would comprise very upmarket waterfront villas, condominiums, office buildings, a hotel, shopping complex, “floating restaurant” as well as facilities for meetings, incentives, conventions and exhibitions. There will also be an amphitheatre, and an event stage on the sea, waterways and canals.

“This will be a very unique waterfront development that we plan to launch in the first quarter of next year. We may launch some low-rise condominiums and the water villas first,” he said, adding that the indicative price of the villas was about RM10mil each.

IJM Land managing director Datuk Soam Heng Choon said The Light would transform Penang into a modern and progressive state.

“The Light Waterfront is IJM Land's jewel in the crown. We are very proud of the project and are extremely excited about what it means for Penang in particular, and Malaysia as a whole,” he said.

Soam said the RM6.5bil mega project, to be developed over three phases, constituted over half the value of all properties featured at the i-Property exhibition, which opened at the KL Convention Centre yesterday.

He said the 42 acres under phase one would have six parcels of 1,186 units of high-end residential waterfront developments, while the 103-acre phase two would involve residential, commercial and retail properties.

He said that in line with the company's efforts to cut utility costs and promote green building concepts, The Light Waterfront would lead the way as Malaysia's premier eco-friendly development.

“In implementing this project, we will follow the guidelines prepared by The Leadership in Energy and Environmental Design, which will result in energy-efficient, healthier, and environmentally-sustainable buildings.

“We are committed to developing eco-friendly buildings as they will help our customers save on utility bills. This is important, especially now with rising energy costs,” he said.

Among the eco-friendly technologies are wind turbines, solar panels, a modern water management system and green roofs. The use of recycled materials in selected areas and a state-of-the-art solid waste management system are also in the cards.

Another unique “green” feature is the harvesting of coral reefs in the waterways around the residential phase.

By The Star - StarBiz - (by S.C.Cheah)

Beneton Properties to open lifestyle mall in mid-2009

BENETON Properties Sdn Bhd will open a 110,000-sq-ft lifestyle mall called Viva on Jalan Ipoh, Kuala Lumpur, in mid-2009.

Located opposite the Sentul Park, the project is scheduled to be launched this quarter and is expected to be fully occupied when it opens next year.

Viva is a mixed-development comprising a 27-storey apartment block with a retail podium. Its gross development value is estimated at RM100 million.

According to a press release by Henry Butcher Retail, the company instrumental in the planning and leasing of the mall, the annual rental collection from the retail components will be about RM2.7 million.

Beneton Properties has involved in projects like Stonor Park, 2Hampshire, Bangsar Peak and Prima Villa.

"Viva offers high quality retail facilities in a convenient shopping environment. It's set to transform the quality of retail facilities in Jalan Ipoh area from a tired neighbourhood to the latest trendy hotspot," Henry Butcher said.

The mall will adopt a main-street concept, said to be the latest and hottest retail development format in the US. This is in line with today's demand for thematic and lifestyle-oriented shopping places, it said.

The name Viva, which in Spanish means long live, cheer and lively, was chosen to represent the exciting lifestyle playground for the KLites.

The catchment for the mall includes the immediate occupants of the residential component as well as the population of around 150,000 within a 15-minute drive.

By New Straits Times

Varsity township land nearly used up

BANDAR Baru Bangi is 96% developed, and has two more years to go before its land bank is completely used, declared Selangor State Development Corporation (PKNS) development controller Siti Zubaidah Abd Jabar.

The township in Bangi is one of the new growth centres developed by the agency.

The 1,869ha township has a population target of 100,000 upon completion of all project developments.

It is developed based on the “university township” concept due to its close vicinity to 18 public and private institutions of higher learning like Universiti Kebangsaan Malaysia, Universiti Putra Malaysia, Selangor International Islamic University College, Malaysia France Institute and Universiti Tenaga Nasional.

“Bandar Baru Bangi used to be an oil palm estate before PKNS began developing the township in the mid-70s. Within 34 years, it has turned into a new growth centre and developed to almost full capacity,” said Siti Zubaidah.

PKNS project: One of the link houses at D’Cempaka in Section 9, Bandar Baru Bangi, which is installed with its own water harvesting system.

PKNS has allocated 20% of land use in the township for housing projects, 15% for recreational projects and 24% for institutional projects.

Industrial projects make up 11%, business 6% and infrastructure 24%.

“An issue of concern is the lack of public transportation, but the bus services are picking up,” she said.

“PKNS presently has eight ongoing projects in Bandar Baru Bangi that are worth over RM100 million. All these projects are done under the ‘Build & Sell’ concept.”

The eight projects are:

·46 units of two-and-a-half storey twin houses in Puncak Bangi (Phase 1a - sold out)

·48 units of two-and-a-half storey twin houses in Puncak Bangi (Phase 1b - under construction; about 40% completed)

·106 units of two-storey link houses and 20 units of two-storey twin houses at D’Cempaka, Section 9 (sold out)

·14 units of two-storey twin houses at Damai Suria, Section 3 (sold out)

·26 units of one-and-a-half storey twin factories at Taman IKS, Section 9 (sold out)

·210 units of apartments at Bangi Idaman, Section 5 (about 60% units sold so far)

·157 units of apartments at Cempaka Sari, Section 9 (unit sales to launch in Aug)

·22 units of two-storey twin houses at Villa Seroja, Section 7 (sold out)

Siti Zubaidah is particularly proud of the D’Cempaka housing project, the only PKNS development in Bandar Baru Bangi with a water harvesting system that is used for flushing the water cistern.

New technology: The individual water harvesting system installed at the houses at D’Cempaka.

“This is a new technology employed by PKNS to make use of natural resources. It costs RM5,000 for each house to have its own water harvesting system,” she explained.

PKNS’ remaining projects for the township include the construction of town houses/service apartments, office shops, a business complex and a convention centre.

Siti Zubaidah added: “Our future plan is to have social programmes for the residents to integrate and develop a relationship within the community.

“We’re working closely with the Bandar Baru Bangi Residents Committee to organise several programmes, like a weekly aerobics and kite-flying session, as well as activities for the upcoming National Day celebrations.

“The Selangor Mentri Besar (Tan Sri Khalid Ibrahim) has proposed the idea of having a book street at Taman Tasik Cempaka, which will feature a street selling knowledge-building materials like books and arts and crafts items.”

By The Star (by Jade Chan)

Stem rising building material prices, Govt urged

PROJECTS under the Ninth Malaysia Plan (9MP) will come to a stop if the government does not act immediately to stem the rising prices of building materials, construction industry bodies said.

They added that contractors could no longer absorb the rising cost of materials and were facing cash-flow problems although the market for steel bars and cement had been liberalised.

"Although these essential building materials have been liberalised, prices continue to soar to an all-time high," Master Builders Association Malaysia, Real Estate Housing and Developers Association of Malaysia, Persatuan Kontraktor Melayu Malaysia and Persatuan Kontraktor India Malaysia said in a joint statement yesterday.

The associations said that contractors may be forced to stop work, delay, or even abandon projects as a result of the costlier building materials.

"This will cause a lot of hardship to many people - clients, designers, suppliers, sub-contractors, and 140 other related industries, including the financial system," they added.

The associations said prices of steel bars and cement had gone of control since 2006, even with the Price Control Act.

In the case of steel bars, although liberalised last May, the process has not been well implemented and it has been difficult to import steel bars.

The associations said the liberalisation of steel bars and cement saw an immediate price increase by millers of 12 per cent for steel bars and 22 per cent for cement.

The higher cement price caused concrete price to rise 23 per cent, and there is a possibility it may increase further next month, they added.

The associations also want the government to undertake a quick study on the need to provide funds to stabilise prices and counter artificial shortages.

By New Straits Times

MRCB confident on sales of property projects

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) is confident its property projects will continue to enjoy good sales and tenancy despite the more challenging economic conditions.

Group managing director Shahril Ridza Ridzuan said that location and accessibility would always play a big part in the sale or rental of property, even during a downturn.

“Even during the Asian financial crisis, certain locations in Kuala Lumpur continued to register strong interest and secondary market transactions,” he said on the sidelines of the StarBiz -Institute of Corporate Responsibility Malaysia forum yesterday.

MRCB has been active in the property development scene in Kuala Lumpur while it entered the Penang property market just last year. The company is developing, on a joint-venture basis, office towers, hotels and serviced residences on 72 acres in KL Sentral. The project has an expected gross development value of about RM2bil.

Shahril said the broadband infrastructure and multimedia supercorridor status of KL Sentral was an added attraction for those thinking of relocating there for business purposes.

The company has about 100 acres in Penang and recently acquired a 3.34-acre freehold parcel in Batu Ferringhi from MBSB Development Sdn Bhd for RM26mil where there are plans for a high-end serviced apartment project.

Last June, Pelaburan Hartanah Bumiputera Bhd awarded a contract worth RM500mil in Penang to MRCB for the construction of landed and high-rise residential properties.

It is also developing the RM2bil Penang Sentral, a similar transportation hub on the island which, when completed, would connect the northern and southern halves of the peninsula. The project is a joint venture with Pelaburan Hartanah.

“Our Penang and KL Sentral property projects have a potential gross development value of RM5bil,” Shahril said, adding that property development contributed 65% to revenue, with the bulk currently coming from KL Sentral.

He said the company's bid for the RM350mil Kompleks Kerjaya 2, in Jalan Sultan Salahuddin, was still ongoing. Its construction arm's order book stood at RM2bil, he added.

By The Star (by Fintan Ng)

Mediterranean concepts that spell indulgence

Indulgence best describes Santorini’s latest 2008 collection, which exudes luxury with a contemporary touch.

Throughout the years, Santorini has designed furniture for some of the most prestigious hotels in the world.

Conceptualised by Spanish and Italian designers, the sleek clean-cut curves and bold lines create breathtaking furniture.

The Romera series is the main attraction in the 2008 collection. The unique cut and materials used, such as mahogany and leather, exude a warm and highly sophisticated feel.

The latest lounge set series – the Artalda, uses fabric fashioned in Spain and is waterproof and scratchproof for maximum protection.

With state-of-the-art technology from Germany, the lounge mechanism offers four different sitting positions for the headrest and armrest.

By The Star

Penang 2nd bridge project already generating spin-offs

The Penang Second Crossing Bridge (P2X) project, which is scheduled to open to the public by 2011, has already started generating value-added and positive spin-offs, UEM Group Bhd managing director and chief executive officer Datuk Ahmad Pardas Senin said.


PARDAS: To date, the company has extended opportunities to more than 40 subcontractors

He said work had actually commenced from the day Prime Minister Datuk Seri Abdullah Ahmad Badawi laid the first piling during the ground breaking ceremony in November 2006, and had not stopped since then.

"To date, we have extended opportunities to more than 40 subcontractors to participate in various preparatory works at this early phase. Some 30 consultants have already started working on the project.

"As the project progresses forward, we will definitely engage more local contractors to participate in this prestigious project," he said in a statement.

Pardas said P2X will increase job opportunities for locals, as well as contribute towards upgrading knowledge and skills of students in local tertiary institutions so that they can be hired and given choice incentives to work in the high-tech project.

UEM signed memorandums of understanding with the Ministry of Higher Education to assist in upgrading community colleges, especially in Penang - as a major initiative to develop knowledge workers and also develop human capital.

The group also provides training and guidance to local vendors so that they will have the required knowledge and skills to undertake projects of such magnitude.

"Via our UEM Young Executive Scheme (UEM YES), 200 young engineers and technical professionals will be selected to work on this project," Pardas added.

He said the group has outlined many corporate social responsibility initiatives including partnerships with local schools. So far it has adopted eight schools in Penang under the Pintar Programme, six via UEM Builders and two via Time Engineering.

UEM Group has already committed more than RM200 million for the P2X project. The total cost of the project has escalated to RM4.5 billion due to the increasing price of materials and fuel. Construction on sea is expected to start in the fourth quarter of 2008.

"We have made significant progress by completing soil investigation (on land and sea), pile testing and the construction of the Batu Kawan site office.

"The casting yard, located in Batu Kawan, is in the advanced stage of completion and will be used to produce segment box girders which is the most critical component of the bridge," he said.

Pardas said the project is one of the main catalysts for the development of the Northern Corridor Economic Region that encompasses Perlis, Kedah, Penang and Northern Perak.

"It will help spur socio-economic activities, contribute towards bridging island and mainland communities, and of course solve traffic congestion on the existing Penang Bridge," he said.

By New Straits Times (by Lokman Mansor)

BLand gets offers for Seychelles hotels

BERJAYA Land Bhd (BLand) has received offers to buy both its hotels in Seychelles for US$62 million (RM201 million), its resort and hotel division head Foo Toon Kee said.



They are the four-star 232-room Beau Vallon Bay Beach Resort & Casino on Mahe Island and the three-star 80-room Seychelles Berjaya Praslin Beach Resort Seychelles.

"We have been operating there for over 10 years. We might consider the sale. We are still contemplating whether to sell or redevelop the place," Foo, the acting head of Berjaya Hotels and Resorts, told Business Times in an interview.

Should Berjaya decide to sell the property, it would be in line with its future plans to focus on five-star hotels and resorts.

Berjaya has had a presence on the popular island resort for over a decade.

When asked what would be a comfortable sale number for the hotels, Foo said: "They could fetch US$70 million (RM227 million) ... but I am not saying that we will definitely sell.

Yet another property it may consider selling if the price is to its satisfaction is the three-star Berjaya Georgetown Hotel in Penang. The 323-room hotel has a book value of about RM80 million.

The hotel produces a lower profit margin than its five-star hotels. It has an earnings before interest, taxes, depreciation and amortisation margin of about 20 per cent versus 45 per cent for the five-star properties.

In the event that the hotel is not sold, Foo said, the group may consider rebranding it to better distinguish the various star categories of the hotels under Berjaya.



By New Straits Times - Business Times - (by Vasantha Ganesan)

GuocoLand to triple investment in China

BEIJING: GuocoLand is aiming to triple its investment in China in the next three years, from US$3 billion now, a senior official with the Singapore luxury home builder said yesterday.

Against a backdrop of slowing domestic sales, GuocoLand is increasingly shifting its attention to other Asian countries, especially China.

“The broad investment climate in China is sound, and our board of directors is confident about the outlook here,” said Violet Lee, managing director of GuocoLand (China) Ltd, a wholly owned subsidiary of Singapore-listed GuocoLand.

Since it entered the Chinese real estate market in 1984, GuocoLand has developed 8 sites in Beijing, Shanghai, Tianjin and Nanjing.

GuocoLand’s most recent project is the Guoson Centre in Beijing, which includes a five-star hotel, offices, a shopping mall, apartments and a transport interchange that is the downtown terminus for the capital’s newly built airport rail link.

The hub was completed and handed over to the local government this month in time for the Olympics starting on August. 8.

The overall US$1.5 billion project is expected to be completed by late 2009.

China now accounts for 20 to 30 per cent of GuocoLand’s total revenues, a figure that is likely to rise as the company expands, Lee said.

GuocoLand’s landbank in China is expected to increase to 5 million square metres within three years from 2 million sq m now, she added.

“The focus of our development will be high-end multi-functional business properties in major cities, as we did in the past,” said Lee.

The developer, controlled by Malaysian tycoon Quek Leng Chan, is also looking to diversify its investments in China by expanding into sectors such as health and education, Lee said.

She did not elaborate.

Lee said GuocoLand’s profits in China would be hurt by Beijing’s drive to cool the real estate market as well as by soaring raw material and labour costs.

But she said the firm would broadly stick to its China growth strategy.

“We wish to hold our assets for a long time, at least 10 to 20 years,” said Lee, who won the Miss Singapore crown in 1984.

By Reuters

SunCity: REIT listing later this year

KUALA LUMPUR: Sunway City Bhd is evaluating various proposals for the listing of its real estate investment trust (REIT) in view of the overall bearish mood in the markets, its executive director Datuk Jeffrey Ng said.

Ng said that the property developer would continue with the listing of SunCity REIT in the second half of this year. However, he did not elaborate if the REIT listing would be delayed until market conditions improved. SunCity REIT has assets worth RM3.7billion.

Upon listing, the SunCity REIT was touted to be the largest in the country, with a property portfolio comprising three segments — retail, hotel and commercial.

Among the properties that would be injected include the Sunway Pyramid Mall which has a market value of RM1.63 billion, Carnival Shopping Mall in Penang, Monash University campus, Sunway University College and Menara Sunway.

Other properties included in the REIT would be the Sunway Resort Hotel & Spa and Pyramid Hotel.

“With the various properties involved, there would be fair bit of work to do as we recognise that the market is soft,” Ng told The Edge Financial Daily.

However, he declined to elaborate whether the company would opt to list in Singapore.

Compared with Malaysia, Singapore offers attractive incentives in REIT investments as investors are exempted from withholding tax.

According to the Singapore Exchange Ltd, foreign institutional investors and corporations are subjected to a 10% withholding tax up to February 2010. For REIT investment in Malaysia, a withholding tax of 28% is imposed on foreign institutional holders while individual investors are taxed 26%.

Analysts said the real estate investment industry in Malaysia (M-REITs) would be headed for tougher times as a result of the negative sentiment in the property sector due to rising construction costs and a decline in the housing take up rates.

JP Morgan said the growth of M-REITs was unlikely to outperform the property sector. It said the overall weak consumer and business sentiment arising from higher costs could lead to a slowdown in rental revisions.

The research firm said there was a lack of liquidity in the stocks. In a recent report, JP Morgan downgraded SunwayCity to a neutral stance as there was a possibility of the property developer delaying its REIT listing.

“Despite the strong asset base of properties to be injected into the REIT, we fear that the listing may be delayed given the lack of appetite for new equity and the recent de-rating of REITS overall,” property analyst Simone Yeoh said in the report.

JP Morgan revised the SunCity target price to RM2.16 from RM2.50 previously. It had also reduced the property developer’s earnings by 6% for FY08 and 13% for 2009 to account for softer residential property sales.

“Sunway City is evaluating proposals in the REIT structuring to make this listing successful. It is a matter of pricing and packaging the assets given the current market situation that we are in,” Ng said.

By The EDGE Malaysia (by Lim Shie-Lynn)

Bandar Raya's The Troika wins two CNBC awards

PRIME PROPERTY: BRDB Chief operating officer C.C.Pan (left) and BRDB International business general manager Sascha Khan (centre) receiving the awards from CNBC in Singapore recently.

Bandar Raya Developments Bhd (BRDB) has won two awards for The Troika, the country's first globally branded residential development, from the CNBC Asia Pacific Property Awards.

The 5 Star Best High Rise Residential and 5 Star Best Architectural 2008 awards are The Troika's second accomplishment for the year, as the development was also awarded Cityscape Best Developer Award for the future residential category in April.

The year has seen The Troika appreciating substantially in value.

Transaction prices have exceeded RM2,500 per sq ft, one of the highest in the city centre, positioning BRDB as an industry leader in the luxury property market.

"BRDB is consistently pushing the boundaries of design and quality in our aspiration for innovative yet timeless designs," said BRDB chief executive officer Datuk Jagan Sabapathy.

"We are thrilled The Troika has been singled out for such lavish praise in this prestigious award, as this helps cement our standing in the regional marketplace as one of the best in the industry," he said in a statement.

By New Straits Times (by Sharen Kaur)

SunCity property trust delayed

SUNWAY City Bhd (SunCity) has delayed plans to list its property trust, touted to be Malaysia's biggest, to next year, sources told Business Times.

The real estate investment trust (REIT), with an estimated property size of RM4 billion, was scheduled to be listed this year, three-and-a-half years since it first announced its intention to spin off a REIT.

Given that the proposal has yet to be submitted to the authorities, sources say SunCity may miss its target.

"Looking at the timeline required to list it and to have an effective roadshow in November or December is slim. As such, there will be a delay in the listing," a source said.

The delay may work to its advantage as markets around the world are not in good shape, rattled by worries over the global economy and high oil prices.

Malaysia's stock market has lost some 23 per cent so far this year.

The delay in the submission process is attributed to the large number of assets that SunCity plans to put into the REIT. The trust could end up having up to eight properties.

"Due to the number of assets and the diversity of the properties involved in sectors ranging from retail, hospitality and commercial, procedures for evaluation take a much longer time.

"It has taken SunCity longer than initially anticipated," the source said.


'In view of the softer market condition, SunCity is also evaluating other options on the structure of a REIT.’ >> Datuk Jeffrey Ng Tiong Lip Executive director Sunway City Bhd

SunCity's executive director Datuk Jeffrey Ng Tiong Lip, when contacted, did not confirm nor deny the delay, but said the group is looking at other options.

"The SunCity REIT is still moving forward. We are preparing the relevant documents. There are quite a number of assets involved and things like due diligence and valuation reports to be done in the process.

"In view of the softer market condition, SunCity is also evaluating other options on the structure of a REIT," he said, adding that pricing and packaging were important elements.

Ng, however, declined to elaborate what the other options may be.

Meanwhile, it is understood that SunCity is still weighing its option of whether to list on Bursa Malaysia or on the Singapore Stock Exchange.

SunCity has hired RHB Investment Bank Bhd, CIMB Investment Bank Bhd, US bank Goldman Sachs and Swiss lender UBS to help the company set up and list the property trust.

It plans to inject Sunway Pyramid, Sunway Carnival, Sunway Lagoon Resort Hotel and the Pyramid Tower, Menara Sunway, Monash University and its hostels.

Properties that are likely to be injected at a later stage include the recently-acquired Wisma Denmark, Sunway Medical Centre (which is undergoing expansion), the proposed KL South shopping mall in Cheras, and four office towers in Bandar Sunway that the group has proposed to build.

By New Straits Times - Business Times - (by Vasantha Ganesan)

Faber going big on high-end projects

PETALING JAYA: Faber Group Bhd is planning to launch several high-end projects from September with landed properties featuring prominently amongst them.

Upcoming launches include semi-detached houses, priced from RM1.1mil to RM1.3mil, and bungalows, from RM2mil to RM2.5mil each, in Laman Rimbunan, Kepong. The project is a joint venture with Metro Kajang Holdings Bhd in which Faber is the senior partner.

In Taman Danau Desa, next to the company's completed Taman Desa township, there are plans to launch 40 semi-detached houses and six bungalows, priced from RM1.9mil to RM2.5mil.

On a neighbouring parcel, there are plans to launch 38 three-storey link villas, with prices from RM1.6mil, targeted for a launch late next year. These projects are on a joint-venture basis with landowner Kuala Lumpur City Hall.

In Kota Kinabalu, Faber will be launching early next month 32 three-storey semi-detached houses and two bungalows in Taman Hilltop Perdana, while in the pipeline is a RM110mil project, comprising over 300 condominium units, in Lucky Heights.

Managing director Adnan Mohammad told a press briefing yesterday that developers would “need to reassess their projects” based on the challenging property market outlook.

Adnan Mohammad (right) and senior general manager for property development Khalid Abdul Majid

He said despite the challenging conditions with higher construction costs, the company's property development division was planning to launch a number of landed high-end projects in Kuala Lumpur and Kota Kinabalu.

“For us, location still sells and we're targeting mainly upgraders in mature locations near the city centre,” Adnan said, adding that Faber was still open to joint ventures or even acquiring land outright to replenish its dwindling land bank, which stood at a total of 45 acres in Kepong and Kota Kinabalu.

“Land acquisition will depend on a combination of factors, including location, price and type of projects that we can develop,” he said.

On earlier reports of Faber's interest in developing properties in Iskandar Malaysia, Adnan said any projects would be undertaken at the UEM group level. According to Faber's 2007 annual report, UEM Group Bhd held a 34.29% direct stake in the company.

“While I cannot speak on behalf of UEM, there's a possibility that projects secured under UEM Land Sdn Bhd (an indirect subsidiary of UEM Group) can be parcelled out to us,” Adnan said.

By The Star

Faber to launch RM600m Klang Valley, Sabah projects

FABER Group Bhd plans to launch new property projects worth some RM600 million in the Klang Valley and Sabah over the next 18 months.

Its property arm, Faber Development Holdings Sdn Bhd (FDH), has 18ha, which is enough to launch five niche projects and keep it busy for four years, managing director Adnan Mohammad told reporters at a briefing in Kuala Lumpur yesterday.

"We are not holding back on development. We have to keep moving under current market turbulence," Adnan said.

Adnan said Faber is focusing on niche projects as it is easier to adjust prices for raw material costs and such developments offer higher margins.

In Kota Kinabalu, Sabah, FDH will launch Taman Hilltop Perdana in early August, a two-year project worth RM32 million, comprising 34 units of triple-storey semi-detached homes.

FDH senior general manager Khalid Abdul Majid said it is targeting medium to high income groups. The units will be priced at RM870,000 to RM1.1 million each.

Also in Kota Kinabalu, FDH will launch phase 2 of Lucky Heights, a RM110 million high-end condominium project with 300 units, each priced from RM300,000, by the second half of 2009.

Phase 1 was completed 20 years ago.

FDH, in a venture with City Hall, is also launching 40 units of semi-detached homes and six bungalows at Taman Danau Desa. The semi-detached units will be priced at RM1.9 million each while the bungalows start from RM2.5 million.

The RM90 million project, which is part of its multi-billion ringgit Taman Desa at Old Klang Road, Kuala Lumpur, will be launched in early 2009. Faber started developing Taman Desa in the mid-1970s.

The homes will be built on 2.3ha with leasehold title owned by City Hall, which will get 20 per cent of the project's profit, Khalid said.

"Whether good times or bad, we are confident of the sale of the product due to its locality," he said.

Also at Taman Danau Desa, FDH will launch 38 units of three-storey superlink homes, worth RM60 million by the third quarter of 2009.

At FDH's existing development, the RM600 million Laman Rimbunan mixed development project in Kepong, it will launch phase four and five comprising 160 units of semi-detached units and three bungalows by year-end.

"We plan to sell the semi-d homes for between RM1.1 million and RM1.3 million each while the bungalows will double that. We are targeting buyers from Sg Buloh, Kepong, Rawang and Selayang. We are bullish on the product because of the take up rate at our previous phases," Khalid said.

The 40ha project, in which FDH has a 55 per cent stake and the rest held by Metro Kajang Bhd, has six phases and the first three phases, worth RM300 million, have been launched since end 2004.

By New Straits Times (by Sharen Kaur)

Kuok family-controlled firms to spend US$1b on China site

KERRY Properties Ltd and three partners, all controlled by the family of Malaysian tycoon Robert Kuok, will invest as much as 7.3 billion yuan (US$1.07 billion) in a real estate project in China’s Hebei province.

Kerry Properties and Shangri-La Asia Ltd, both listed in Hong Kong, Singapore-listed Allgreen Properties Ltd and Malaysia-based Kuok Brothers Sdn Bhd have won a tender for the building site in Tangshan city, according to a statement to Hong Kong's stock exchange yesterday.

Kerry Properties will own 40 per cent of the project while Allgreen will take 25 per cent, the statement said. Shangri-La and the Kuok Brothers will own 20 and 15 per cent, respectively.

The companies have agreed to pay 1.71 billion yuan for the site, which will be used to develop residential buildings and hotels, the statement said.

By Bloomberg

Gamuda, IJM ideal targets for Mideast firms: Macquarie

GAMUDA Bhd and IJM Corp, Malaysia's second- and third-biggest builders, may be perfect takeover targets for Middle East companies seeking expertise for Gulf development projects, Macquarie Research said.

The shares of the two companies are cheaper than regional counterparts, and most of their stocks are owned by shareholders without significant stakes, making an acquisition easier, Sunaina Dhanuka, a Kuala Lumpur-based analyst at Macquarie, wrote in a report yesterday.

"Companies like Gamuda and IJM could be ideal targets," said Dhanuka, who has an "outperform" rating on both stocks. "Few Middle Eastern companies have the skills required to undertake large infrastructure projects. Gamuda's skills are likely to be the most sought after."

Persian Gulf investors are spending US$2.4 trillion (US$1 = RM3.24) on local construction projects, according to Dubai-based research company Proleads. Shares of Gamuda and IJM, which have built tunnels, roads and railways across Asia, have tumbled this year on concern growth is slowing at home, and Malaysia's Edge newspaper on July 20 reported a possible bid for Gamuda by a Middle East fund.



Gamuda shares, down 44 per cent this year, rose 10 sen to RM2.69 yesterday, giving the company a market value of RM5.4 billion. IJM fell 15 sen to RM5, extending this year's drop to 42 per cent and cutting its market value to RM4.3 billion.

Gamuda's largest shareholder, the Malaysian royal family in the state of Perak, supports the takeover plans by a Middle East fund, according to a newspaper report, which didn't name the possible buyer. The acquisition of the royal family's 7.5 per cent stake is crucial to any takeover, the report said.

By Bloomberg

Asiatic upbeat on luxury homes

KULAI: Asiatic Land Development Sdn Bhd sees demand for high-end houses in the Senai-Kulai growth corridor is expected to rise in the coming years.

Alex Phang (left ) and Asiatic vice-president Habibullah Kong after the launch

Executive vice president Alex Phang said developers with projects in the corridor should take the opportunity and cater to such demand.

Among the new developments coming up in the area are the Airport City, MSC Cyberport City, Senai Multimodal Terminal Hub and Skudai Knowledge Centre.

“This augurs well for the company as our on-going Asiatic Indahpura Kulaijaya township is strategically located in the growth corridor,” he said at the launch of 82 semi-detached houses at the Lakeview Residency Precinct 33A by Kulai MP Datuk Seri Ong Ka Ting on Sunday.

The township covers 2,832.8ha and, to date, 404.87ha have been developed.

The 20 single-storey semi-detached houses are priced from RM318,800 each and the double-storey semi-detached houses from RM470,822.

Phang said the company expected to generate RM40mil in gross development value from the houses, which would be completed in 2010.

The Senai-Kulai corridor is part of Iskandar Malaysia which focuses on the manufacturing sector and related activities like electronics and electrical, high-value food processing and agro-based processing, bio-tech, aviation-related downstream industries and engineering based industries.

Demand for houses would come from executives, senior management staff, local and foreign investors working or having investment interest in the Senai-Kulai area, Phang said, adding: “We are also looking at upgraders from Johor Baru district, Malaysian professionals working in Singapore and Singaporeans.”

Pricing would be the main factor attracting buyers from Johor Baru and Singapore, he said, as a similar house would cost double in Johor Baru and even more in the republic.

Asiatic Land is a wholly owned subsidiary of Asiatic Development Bhd and a member of the Genting group.

By The Star (by Zazali Musa)

Developer counts on Johor land for growth

JOHOR BARU: Tebrau Teguh Bhd says its land bank within the Tebrau-Plentong river basin development augurs well for its future growth.

Executive vice-chairman Johar Salim Yahaya said the company had a total 437.47ha and 12km water frontage.

Johar Salim Yahaya (left) and Mohd Zafaruddin Razali with a model of the shop offices at Puteri Point Commercial Park in Permas Jaya

He said 56.06ha were currently being developed with low and high-density apartment blocks, shop offices and a commercial complex.

“Our land bank is strategically located in the main growth nodes of Iskandar Malaysia,” Johar told StarBiz recently at the launch of shop offices at its Puteri Point Commercial Park at Permas Jaya near here.

Johar said the 62 three-storey shop offices were priced from RM456,000 and expected to be completed in 2010 with gross development value of RM37mil.

He said the company was currently talking to a supermarket operator to set up a standalone supermarket in the 4.856ha commercial park.

Head of property division Mohd Zafaruddin Razali said growth prospects for the supermarket was promising as there was an estimated population of 80,000 within a 1km radius.

He said Tebrau Teguh planned next to develop 184.69ha with a 1.5km river frontage just a stone’s throw from the commercial park.

“This is the last piece of land for development in the eastern part of Johor Baru with river frontage,” he said.

By The Star - StarBiz - (by Zazali Musa)

ASM Invt in talks on REIT with developers

ASM Investment Services Bhd, the asset management arm of Amanah Saham Mara Bhd, is in talks with two property developers on setting up a real estate investment trust (REIT).

The company may manage the property trust, which is expected to be launched by the second quarter of next year.

This is part of its plans to double the size of funds under its management to RM1 billion in two years from about RM500 million at present.

ASM Investment is also in the midst of tying up with a foreign party to offer exchange-traded funds (ETFs) by the third quarter of next year.

Chief executive officer Nik Mohamed Zaki Nik Yusoff said he hopes corporate product activities will command half of ASM Investment's fund size by 2010.


NIK MOHAMED: Firm hopes to attract larger investment with more corporate products

Currently, retail products make up 80 per cent of its fund size, while corporate products make up the rest.

"By having more corporate products, we will be able to attract larger investment, (hence) the reason we are interested to offer a REIT and ETF next year," he said in Kuala Lumpur.

Yesterday, ASM Investment launched its 17th investment fund called the ASM Syariah Dividend Fund which has a fund size of 500 million 25-sen units. A minimum of RM100 is required for the investment in the fund.

Despite the weak market, Nik Mohamed is optimistic that the fund will be fully taken up within six months.

"Yes, people are conservative to invest due to the uncertainty in the market today. But investors realise that this is in fact a good time to invest based on the low price offerings in the stock market," he said.

Furthermore, he added that a dividend fund is suitable for conservative investors like pensioners since it is low-risk and provides a consistent stream of returns.

A wholly-owned subsidiary of Amanah Saham Mara Bhd, ASM Investment also has the licence to promote and distribute third-party funds.

By New Straits Times (by Zurinna Raja Adam)

REITs an alternative to other stocks

PETALING JAYA: As large numbers of investors exit from stocks and shares of companies, high yielding real estate investment trusts (REITs) are a viable alternative.

Although REITs are equities in the sense that they are also entities listed on Bursa Malaysia, “downside is limited for these assets,” said an investment officer at Meridian Asset Management Sdn Bhd.

There are very few alternative asset classes in this country in which savers would be willing to place a large part of their savings. Generally, for the average saver, the few choices are shares, property or cash.

The edge that REITs have over real property is that in the former, investors would be buying them below their net asset values (NAV) whereas buyers would have to pay market prices for real property.

The NAV of Quill Capita Trust, for instance, was reported as RM1.20 per unit earlier this month. The REIT closed at RM1 yesterday.

In addition to this discount to its NAV, Quill Capital offers a yield of about 8.5% after its price has almost halved from a high of RM1.90 last year.

While there were concerns that property prices could decline as economic growth slows in the second half of the year, the discount in Quill Capita's NAV was defensive while replacement cost for its properties had increased, the Meridian officer said.

As a result of the much higher costs of cement, steel and other building materials, the construction cost of commercial properties has sharply increased. Quill Capita owns a range of commercial properties that comprise office, retail and technology park buildings.

The current barriers to growth would be, ironically, its high yield of 8.5%, which means it's difficult to identify and purchase properties that have a higher yield than the REIT. It would be difficult to find properties that are yield accretive for the trust.

High interest rates would also erode its ability to expand with borrowed funds.

It is partly for this reason that REITs in Singapore have also fallen in price where they are yielding about 7% against a lower benchmark yield in government securities.

Expansion by REITs may have to wait until their prices move back up.

“It would have to be money that can be kept in a REIT for a two-year time frame,” the officer said, adding that during that time, the investor would receive a good yield.

By The Star

Bank Simpanan banks on personal, housing loans

BANK Simpanan Nasional (BSN) expects personal and housing loans to drive growth this year as it braces itself for a possible rise in bad loans.

Personal loans are due to rise 21 per cent to RM4.6 billion this year from RM3.8 billion last year, chairman Datuk Seri Abdul Azim Mohd Zabidi said in an interview recently.


"BSN is now a different 'animal' after a transformation exercise." Datuk Seri Abdul Azim Mohd Zabidi Chairman Bank Simpanan Nasional

The bank is on track to achieving its target as it has given out some RM4.4 billion in personal loans as at end-June this year.

Housing loans, which form the bulk of its loan portfolio, are due to expand by another RM400 million or 15 per cent to a cumulative RM3.1 billion by year-end.

Mortgages totalled RM2.7 billion as at June 30 2008, which accounts for 37 per cent of its total.

Its customers are set to continue their preference for Islamic loans. Its Islamic assets make up 43 per cent of its loan book of RM3.2 billion at the end of June this year.

"Islamic banking has become more popular in the current situation because people think as the interest rates go up they prefer to lock in, according to the Islamic banking rates," Azim said.

The national savings bank is a statutory body, which means that its products are limited. It is not able to extend trade lines, corporate loans or overdrafts.

It has also started to give out car loans again to civil servants, mostly teachers, after terminating the service about five years ago due to "huge problems".

Azim said BSN is now a different "animal" after its transformation exercise, which has helped improve operations, service and products.

Apart from being equipped with mobile banking and weekend banking facilities, going electronic has also helped the bank to improve its efficiency and traceability of loans.

The bank's gross non-performing loans level is at nine per cent compared with six per cent for the industry. Azim expects BSN to face rising numbers although the bank's current level is still within reach of the industry average.

Malaysians are facing higher food prices as well as a higher petrol price after a 41 per cent hike in June. But BSN is ready to help customers.

"For instance, we may have to step up the repayment scheme in the case of housing loans, to reduce the monthly repayment amounts by half," Abdul Azim said.

The bank has a special monitoring unit for NPLs and delinquent accounts.

"Our advice to borrowers is once your disposable income has shrunk, you need to come back to the bank and we can help to restructure your loan, by increasing the tenure of the loan until good times come round again. Don't wait till the loan becomes a NPL which makes it difficult to justify helping you, as we have to adhere to Bank Negara's strict guidelines."

Microfinancing is still very much in the books, said Abdul Azim and a scheme was introduced last year.

"About RM800 million was disbursed under the first microcredit scheme was introduced, NPLs was high but we slowly brought them down and managed to grow our assets from housing which helped to cushion the NPLs."

Although it was one of the three financial institutions identified under the previous budget for the distribution of microfinance apart from Bank Rakyat and Agro Bank, BSN's market share is small as it prefers a prudent and more conservative approach.

As at June 30, it disbursed RM21.3 million of which 69 per cent was for the retail sector, followed by services at 23 per cent and manufacturing eight per cent.

Under the government's Amal Jariah project to rebuild houses for the hardcore poor, BSN, one of the two financial institutions tasked with the project, has disbursed RM8.8 million out of RM25 million.

Some 1,283 houses have been completed with work in progress on 423 houses.

By New Straits Times (by Rupa Damodaran)

Gamuda, IJM may be 'ideal' takeover targets: Macquarie

GAMUDA Bhd and IJM Corp, Malaysia’s second- and third-biggest builders, may be perfect takeover targets for Middle East companies seeking expertise for Gulf development projects, Macquarie Research said.

The shares of the two companies are cheaper than regional counterparts, and most of their stock is owned by shareholders without significant stakes, making an acquisition easier, Sunaina Dhanuka, a Kuala Lumpur-based analyst at Macquarie, wrote in a report dated yesterday.

“Companies like Gamuda and IJM could be ideal targets,” said Dhanuka, who has an “outperform” rating on both stocks. “Few Middle Eastern companies have the skills required to undertake large infrastructure projects. Gamuda’s skills are likely to be the most sought after.”

Persian Gulf investors are spending US$2.4 trillion on local construction projects, according to Dubai-based research company Proleads. Shares of Gamuda and IJM, which have built tunnels, roads and railways across Asia, have tumbled this year on concern growth is slowing at home, and a newspaper on July 20 reported a possible bid for Gamuda by a Middle East fund.

Shares of Gamuda, down 44 per cent this year, today rose 3.5 per cent to RM2.68 at 10.24 am in Kuala Lumpur, giving the company a market value of RM5.4 billion. IJM fell 2.9 per cent to RM5, extending this year’s drop to 42 per cent and cutting its market value to RM4.3 billion.

Gamuda’s largest shareholder, the Malaysian royal family in the state of Perak, supports the takeover plans by a Middle East fund, according to the paper, which didn’t name the possible buyer. The acquisition of the royal family’s 7.5 per cent stake is crucial to any takeover, the newspaper said.

Gamuda stock is trading at 18 times earnings, compared with an average of 22 among 20 heavy construction companies in Asia, according to data compiled by Bloomberg. IJM is trading at 11 times estimated earnings.

By Bloomberg

MRCB to buy land in Penang

MALAYSIAN Resources Corporation Bhd (MRCB) plans to acquire a freehold land in Penang for RM26 million.

MRCB entered into a sales and purchase agreement with MBSB Development yesterday to purchase the beach-front land measuring 13,533 sq metres.

The land, located near Bayview Hotel and opposite to Ferringhi Villa, will be used by MRCB to develop high-end apartments.

By New Straits Times