MK Land drafts 5-year roadmap to boost profits

PROPERTY developer MK Land Holdings Bhd has drafted a five-year roadmap, which will focus on developing two core products within its ongoing Damansara Perdana township in Selangor in a bid to enhance profitability.

They are the Armanee Terrace condominium project and Rafflesia, featuring 460 units of three-storey semi-detached bungalows, which collectively will generate a gross development value of RM3.5 billion over the next 10 years.

"MK Land has the ingredients to grow in terms of landbank, products and people. By creating the roadmap, we will be able to position the company going forward," chief operating officer (COO) for group strategy and planning, Balasundram R, said.

"We need to identify the strength of MK Land and how to make it profitable in the longer term," he told Business Times in an interview.
MK Land had posted losses in the financial year ended June 2007/2008 for the first time since its inception more than 10 years ago due to additional cost incurred to complete projects.

The higher costs was a result of errant contractors being terminated, which happened after its major shareholder Tan Sri Mustapha Kamal Abu Bakar stepped down as executive chairman in April 2007 to focus on his private companies.

Mustapha later returned to helm MK Land in June 2008 in the hope of turning the company around by outlining a three-year plan to rejuvenate it.

The plan included identifying Balasundram, Fatimah Wahab, Lau Shu Chuan and Yusof Abu Othman as COOs to handle specific tasks in MK Land such as strategic planning, finance and projects in the central and northern regions.

The four were roped in from within MK Land, Mustapha's Emkay Group and its 75 per cent unit, Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Since then, MK Land has been able to make profits via cost-efficiency and improving product sales.

The company made a net profit of RM10.1 million in the six months ended December 31 2008, against a net loss of RM18.3 million in the same period of 2007 while revenue doubled to RM125 million.

MK Land is optimistic to repeat its performance in the second half of its financial year, with revenue surpassing RM350 million, boosted by land and property sales.

Balasundram added that there was a challenge that Mustapha had placed on the four but they are on target now to achieve the plan mapped out.

"Our initial stage was to build cash flow and sell existing property stocks. As completed products are now tapering down, we are moving to the next step which is to focus on new launches in our road to profitability," he said.

The company will also continue with its existing developments in Cyberjaya, Damansara Damai and Ipoh, Balasundram said.

By Business Times (by Sharen Kaur)

Bina Puri takes aim at Mideast region

BINA Puri Holdings Bhd, a construction group in which tycoon Tan Sri Syed Mokhtar Al-Bukhary holds a minority stake, is increasingly looking towards the Middle East to replenish its order book amid the global slowdown.

Already, it has bid for some RM2.5 billion worth of jobs including the construction of high-rise residential and office towers there.

Founder and group managing director Tan Sri Tee Hock Seng said the group is looking to replenish its order book and believes that the Middle East in particular the United Arab Emirates (UAE) will provide the support.

Its order book stands at nearly RM3 billion, which will keep it busy for the five years.
"We are bidding for jobs, especially in Abu Dhabi, to build medium- to high-end residential towers. Abu Dhabi is where the money is," Tee told Business Times in an interview.

Its biggest achievement in the Middle East has been in Abu Dhabi, where the group, as part of a larger consortium, won a RM444 million contract from the Tamouh Group to build two 45-storey residential towers.

The contract was awarded in 2007 and the consortium is expected to finish building the towers by December this year.

Tee also said Bina Puri is focused on growth this year to ride out the current slump.

"Business has to go on so the group could be the top runner when the economic recovers. It is all not that bad or gloomy. There are still plenty of jobs in Malaysia and overseas, but you need the right people to look for them," Tee said.

For the first four months of 2009, Bina Puri has managed to secure close to RM1 billion worth of projects in Brunei and Malaysia.

These projects include some RM300 million worth of government projects in Sabah to build houses and offices, and the construction of Universiti Malaysia Kelantan.

In Brunei, it was given a contract in February by the Brunei Economic Development Board to build 2,000 houses for RM693 million.

Tee said Bina Puri is looking for more residential and infrastructure projects in Brunei.

He said the group is also sourcing for new opportunities in Thailand, although it has RM1.7 billion worth of contracts in hand to build houses over the next three years.

The construction group's net profit fell by 38.6 per cent to RM4.3 million in the year-ended December 2008, although revenue was up by 11.4 per cent to RM677.3 million, attributed by higher building material costs and losses incurred by an associate company.

By Business Times (by Sharen Kaur)

Damansara Perdana to see new wave of development

MK LAND Holdings Bhd is planning a new wave of development at its integrated Damansara Perdana township in Selangor and this includes the launch of more than RM5 billion worth of properties over the next decade.

While the company is targeting purpose-built buildings to enhance its margins, its focus for the next 10 years will be to develop Armanee Terrace Condominium and Rafflesia for RM3.5 billion, its chief operating officer for central region, Fatimah Wahab, said.

Launches at Damansara Perdana have been slow since 2007, as MK Land was consolidating its position to focus on other key aspects of its operations.

Since July 2008, a repositioning was carried out with the view to bring the company to a better strategic and financial position to meet the challenges ahead.
The township, which is 44 per cent developed, has accumulated sales in excess of RM2 billion since its launch in 1996.

Fatimah told Business Times that she is optimistic that the luxurious Armanee Terrace and Rafflesia projects, which are supported by a high-end integrated security system and surrounded by greenery, will be the main driving force for growth at Damansara Perdana.

The township has received encouraging response from home owners and investors due to its offerings and location, being in the prime area of the Damansara Perdana enclave amid a primary forest - best of the best location in Damansara Perdana, Fatimah said.

The Balinese-inspired Armanee Terrace features homes with sky gardens and broadband-ready features. It is the first high-rise development in Damansara Perdana with a garden in every unit.

Rafflesia is MK Land's first landed residential property at the township.

"We did a market survey on what people want and upon conclusion, learnt that they are looking for properties like Armanee Terrace and Rafflesia which has, among others, high returns on investment," Fatimah said.

She added that properties in Damansara Perdana would usually appreciate by 25-30 per cent upon completion, making them appealing to buyers.

Armanee Terrace will feature several condominiums in a horseshoe offering various designs of exclusive units.

The first block has been constructed and handed over to buyers in 2007, while the second block, comprising 518 units, is under construction and being offered for sale.

Fatimah said the last two or three blocks may end up as boutique developments or duplexes where it will offer less units but with bigger built-ups.

On Rafflesia, MK Land will offer a total of 460 units of triple-storey semi-detached modern homes.

It launched the first batch of 56 houses, priced from RM1.4 million each in 2007 with 60 per cent sold.

Fatimah said the company will launch 60 new units in July, each priced from RM1.8 million.

By Business Times

What the licence operators have to say

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director, Chung believes the MM2H programme has been growing from strength to strength over the years.

She said that with the recent policy liberalisation, the Government was taking the right measures to ensure a smoother delivery system so that Malaysia could attract more foreigners to retire or stay here.

AMY Chung, 2nd Home Intl (MM2H) Sdn Bhd executive director says ... It is a win-win situation for everyone to aggressively promote the programme as it will benefit all sectors of the economy.

“With these new and positive changes, we are encouraged by the authorities’ efforts to support the MM2H programme,” Chung said.

She added that the tangible benefits were obvious, as the foreigners under the programme were likely to spend about 10 times more that the average Malaysian.

She said it was a win-win situation for everyone to aggressively promote the programme as it would benefit all sectors of the economy.

These include the Government, industry players such as licence operators, property market, travel and tour sector, as well as services-related industries such as hotels and restaurants.

The move will also benefit the MM2H participants, who will be able to enjoy a quality lifestyle in Malaysia and, at the same time, “stretch their dollar” to last longer.

Borneo Vision (MM2H) Sdn Bhd managing director Andy Davison said, conceptually, MM2H was an excellent programme with massive potential for Malaysia to rake in huge earnings to strengthen its economy.

Davison said Malaysia had a lot to offer to the developed world in terms of lifestyle.

“There’s a lot going on for this country ... the tropical weather, high standard of living, good healthcare and infrastructure, all at an affordable price,” he said, adding that MM2H was the perfect vehicle to market Malaysia to the world.

“I’m pleased with the Government’s new and relaxed ruling on MM2H but I do believe there is a need to separate foreigners who are here to retire (with a different status) from those who want to work here, especially high net-worth individuals.

“I believe they are a totally different group of individuals with different intent and if MM2H is bundled together into one category, it confuses everyone, including us (licence operators) and the programme could be prone to abuse,” he said.

Another MM2H licence operator, who declined to be identified, said MM2H was probably one of the best such programmes ever rolled out.

However, he said, there was a need by the authorities to have consistent and well-thought-over policies that did not contradict one another.

“There is a need to resolve issues quicker, including processing time, especially with wives and siblings.

“There is also a need to ensure all licence operators are adequately trained to service foreigners with the correct information and that their services are not sub-standard so as not to tarnish the MM2H image, which affects other license operators,” he said.

He also said the full potential of the programme had not been achieved, despite it being around for some time, because of poor marketing.

“Let’s not waste time in showing what Malaysia can truly offer to the foreigners,” he noted.

By The Star

Relaxed rules set to boost Malaysia My Second Home scheme

PETALING JAYA: The Government’s move in February to further liberalise the Malaysia My Second Home (MM2H) programme has been well received by foreigners and industry players, especially MM2H licence operators.

Currently, there are about 200 such operators nationwide.

Several amendments to the MM2H criteria were made by the authorities, including the lowering of entry age (below 50) as well as employment opportunities for foreigners in selective industries.

MM2H Agent Association president Kirby Lim said the programme had undergone significant improvement every year since it took over from the Silver Hair scheme, which began in 2002.

“It shows that the Government, particularly the Tourism Ministry, is fully aware of the importance of MM2H as a key driver to economic growth, bringing in billions of ringgit, which is why it (MM2H) has been promoted heavily as a national agenda,” he told StarBiz.

Kirby Lim ... Despite not being well marketed in its early years, MM2H has been fairly successful

Lim said while there might be some “hiccups” along the way, generally, most players or those who benefited from the programme were satisfied with the progress made.

“Of course, more can be done and there will always be issues that need to be ironed out, but we are making good progress and the association is in close contact with top officials from the Government, especially the Tourism Ministry,” he said.

Lim said the association would convey the concerns of the licence operators and MM2H participants to the relevant authorities.

It would also keep them abreast on the effectiveness of the policies in attracting foreigners under MM2H, and the changes needed to improve the logistics and marketing and promotions undertaken currently.

On the success of the MM2H so far, Lim said despite not being well marketed in its early years, the programme had been fairly successful.

“However, the Government has recently been very aggressive in promoting it and under the stewardship of Tourism Minister Datuk Seri Ng Yen Yen, we believe the programme will gain significant momentum,” he said.

Currently, there are about 12,000 MM2H participants from countries such as China, South Korea, Britain, Bangladesh and certain parts of Europe and the Middle East.

Lim said the Tourism Ministry had recently embarked on a blitz to promote Malaysia, particularly in China and Japan, as a favoured destination to visit as well as to stay and retire (under the MM2H).

“We understand the Tourism Ministry is now looking to promote MM2H in other countries like Canada through exhibitions and other promotional activities,” he said.

Currently, Ng is in Britain to woo more tourists to Malaysian shores. She is targeting at least 10,000 Britons under MM2H. So far, 1,551 Britons have signed up for the programme.

On Malaysia’s advantage in attracting foreigners compared with other countries in the region, Lim said: “We are not trying to be arrogant but Malaysia offers foreigners quite a high standard of living at a relatively low cost, coupled with good infrastructure and a politically stable environment where English is widely spoken.”

Lim said foreigners also had the opportunity to own properties and would not be subjected to real estate property gains tax should they sell their assets.

“Moreover, the Malaysian hospitality is second to none as many foreigners have remarked that the locals are extremely warm and friendly,” he noted.

Lim is optimistic that the number of MM2H applicants will be higher this year.

“This is following the liberalisation of the entry level as well as the strong promotions made by the Tourism Ministry, Immigration and Home Affairs Ministry and other government departments,” he said.

By The Star (by Danny Yap)

Indian developer plans US$600m share sale

MUMBAI: India’s Housing Development & Infrastructrure Ltd (HDIL) said late last Saturday its board had approved selling shares for up to US$600 million (US$1 = RM3.50) to institutional investors.

HDIL, the latest firm to look at an equity sale after a strong stock market rally, said in a stock exchange statement it would seek shareholders approval for the share sale and a share warrants issue to founders on June 17.

India’s benchmark index has risen nearly three-fourths from its lows in March prompting firms to look at share sales.

By Reuters

SP Setia wins award for Johor project

Liew receiving the award from FIABCI World president Lisa Kurrass in Beijing as Malaysia's ambassador to China Datuk Syed Norulzaman looks on

PETALING JAYA: Property developer S P Setia Bhd has won the FIABCI Prix d’Excellence Award 2009 in the Best Master Plan Development category for the second time.

President and chief executive officer Tan Sri Liew Kee Sin said the international award showed that a Malaysian company was capable of meeting international standards in property development.

“The recognition by FIABCI International affirms our commitment to continuously raise the bar in terms of innovation, product, service and quality in all our projects,” he told StarBizWeek in an email reply.

S P Setia received the FIABCI Prix d’Excellence Award 2009 in the Best Master Plan Development for its eco-themed project in Johor Baru, Setia Eco Gardens, from the Paris-based International Real Estate Federation (FIABCI) in Beijing on Wednesday.

In 2007, Setia Eco Park in Shah Alam won FIABCI’s Best Master Plan Development award.

The win puts Setia Eco Gardens among other global real estate gems such as the Twin Waters on the Sunshine Coast in Australia, Trump World Tower in New York, Gardenville in Singapore and Tokyo Bayfront East in Japan.

Liew said the first award to Setia Eco Park spurred the group to look at new ways of sharing the eco concept with home buyers.

“We took the best eco-inspired elements from our Setia Eco Park high-end project in the Klang Valley and adapted it to suit a mass residential township in Johor Baru,” he said.

The 948-acre freehold Setia Eco Gardens located in the heart of Iskandar Malaysia is being developed based on the premise of an environmentally-friendly township.

The project has total gross development value of RM3.5bil, comprising 6,600 residential and commercial properties.

To-date, 95% or 550 eco-homes have been sold with total value of RM140mil.

By The Star (by Racheal Kam)

'Expo city' will make Iskandar trading hub

ISKANDAR Malaysia in Johor is set to become a major trading hub in the region for manufacturers and buyers once a permanent one-stop exposition, trade and distribution centre near Pasir Gudang is completed in five to seven years.

Called the "Asia Pacific Trade and Expo City" (APTEC), it is located within the RM6.6 billion township of Lakehill Resort City, which is being developed by Malaysia Pacific Corp Bhd (MPCB).

Once completed, APTEC will have a built-up gross floor area of about 4 million sq ft, occupying a land area of 9.4ha.

MPCB president and chief executive officer Datuk Bill Ch'ng said APTEC would become a centre for manufacturers of all sizes to showcase their products to international buyers.
"Buyers will come to the hub just like in a department store. These buyers will be retailers and wholesalers.

"The hub will be the centre to supply goods for the regional market, and allow buyers from all over the world to source their products here," said Ch'ng after attending the launch of the Iskandar Malaysia Open Day in Johor yesterday.

Manufacturers who set up their base in APTEC will promote their products to buyers from Southeast Asia, India, Japan, South Korea, Taiwan and the Middle East.

Ch'ng said potential manufacturers at APTEC would be selected based on the potential of their products or services.

They include manufacturers of goods such as electronics, fashion, home appliances and foodstuff.

Investors and traders will also find accommodation and recreation at the Lakehill Resort City to complement their business dealings.

Other attractions in the development include a six-star lakeside resort, factory outlet stores, a heritage and cultural village, a thematic restaurant located on top of a rock formation and other international bistros and cafes.

By Business Times (by Ahmad Fairuz Othman)

Developers act as agents of change

DEVELOPERS should act as agents of change and introduce more value-enhancing elements into their housing developments to promote higher quality neighbourhoods and environments for the people.

Through their projects, especially green field developments, developers are opening up new frontiers and bringing progress to society.

Every developer, irrespective of size, market capitalisation for listed companies, financial strength and expertise, has a role to play and contribute towards enhancing the country’s property landscape and living environment.

Although the market is still quiet with very few new project launches, the lull in the market provides developers the perfect opportunity to review their project plans and enhance them with more resident-friendly features.

Whether they are high-, medium- or low-cost projects, developers should plan with an eye for quality and go the extra mile to turn them into wholesome neighbourhoods for the residents.

Ultimately, these projects will be homes to many families and equipping them with the necessary facilities such as good landscaping, sufficient social amenities, adequate recreational areas and comfortable common facilities for social interaction, will promote more friendly neighbours and interaction among the people.

Developers are certainly one of the frontliners that have the clout to institute the necessary changes through project planning to help realise the Government’s 1Malaysia vision of greater unity and caring towards one another.

With rising concerns on safety and security issues following the growing number of crimes in the country, gated and guarded housing projects are growing in popularity and more developers are moving into such developments to meet the rising demand.

However, it must be noted that such housing projects are also not fool-proof and there have been quite a number of break-ins and security breaches in those housing estates.

Even if these projects provide a sense of security and safety for residents, the issue is whether the residents of gated and guarded projects feel safe and secure when they step out of their housing enclaves. They should if crimes in the streets are kept at bay.

The good old ways of ensuring safety through good neighbourliness, closer interaction and looking out for each other’s well-being, which have been lost somewhat in this rat-race age, have been proven to be effective and should be revived.

Even if a project is low- or low-medium cost, the lower income groups deserve to enjoy good quality housing and facilities, as well as a secure and safe environment.

Developers should not just build these units to fulfil the low-cost housing requirements set by the authorities but should add value to these affordable homes.

Reducing the density and number of units of these projects will avoid overcrowding and reduce the chances of these projects turning into urban slums like what has happened to certain affordable projects.

Proper maintenance of the facilities including lifts, playgrounds and other shared facilities will ensure the comfort of residents.

To enable developers to contribute towards sprucing up these low-cost projects with better amenities and quality homes, it would be worthwhile for the Government to consider their calls to raise the low–cost housing ceiling price to RM60,000 from RM42,000 currently.

It would also be good to look into the model adopted in Sarawak where people-friendly housing schemes are being built to promote home ownership.

By working with a panel of financial institutions to offer preferential rates for such housing schemes, buyers only have to fork out affordable monthly repayment of less than RM300 for their housing loans.

And to overcome concerns of the many unoccupied low-cost houses in various parts of the country, developers and the authorities should avoid locations that are non-prime areas or inaccessible.

Due feasibility studies should be undertaken to ensure supply matches demand.

>Deputy news editor Angie Ng sees many opportunities for developers to shine through their value-enhancing capabilities to spruce up the living environment.

By The Star (by Angie Ng)

Green is the way to go for industry players

GREATER adoption and use of environment-friendly planning techniques, designs and “green” materials in property projects will go a long way towards promoting green practices in the country.

Rather than depending on legislation to make it mandatory for industry players to incorporate pro-environment design features in their projects, it will be more effective if industry players voluntarily adopt green and environment-friendly designs and concepts in their projects.

Wong

Veteran tourism operator and hotelier, Anthony Wong, who is group managing director of Asian Overland Services Tours & Travel Sdn Bhd and The Frangipani Hotels & Resorts Sdn Bhd, should know the importance of personal initiative to adopt the green way of life as he was already a “green” practitioner in 1976 at the tender age of 19.

That was when he started his eco-tourism company, Asian Overland Services Tours & Travel with a few partners from Australia and the US to arrange inbound tours for foreign groups to go on back-to-nature eco expeditions and to savour the rich flora and fauna of Malaysia’s jungles.

These trips include staying in longhouses, jungle trekking, caving expeditions to Niah and Mulu caves and other eco-nature tours in Taman Negara and Belum National Park.

Wong, who took over the company in 1980 after his partners pulled out, is still going strong with his company arranging at least 180 to 250 eco-tours for about 6,000 to 8,000 tourists a year. The company records annual revenue of between RM5mil and RM6mil.

His company also organises nature camps for business executives and students during the school holidays at its Jungle Lodge facility at 14th Mile Jalan Gombak, Kuala Lumpur. The facility is surrounded by a 100-year-old rain forest.

At his “green” hotel in Langkawi, The Frangipani Langkawi Resort & Spa – a four-star deluxe property with 118 villas, he says green practices including the 4 “Rs” (reduce, reuse, recycle and rethink initiatives) are adopted for proper waste management which literally “turn rubbish into gold”. Water and energy conservation are also steadfastly adhered to. The company also plants its own organic fruits, vegetables and herbal teas for its guests.

Wong says the Government should consider offering tax incentives and capital write-offs for cost incurred by industry practitioners to promote more green practices.

“Even exporters should start adopting green practices as there is talk that many European countries are looking into sanctioning exports from non-green-compliant countries as a measure to arrest environmental deterioration,” he says.

The Government’s initiative to ensure new government buildings feature energy-saving and other pro-environment measures is a good start to promote the green culture among property industry players.

Thursday’s launch of the Green Building Index (GBI), Malaysia’s very own certification scheme for sustainable buildings, is also part of the effort to green the property industry.

The GBI, developed by the Malaysian Institute of Architects (PAM) and Association of Consulting Engineers (ACEM), will encourage developers of housing and commercial projects to adopt environment-friendly features such as energy-efficient elements, rain harvesting and conservation of original land form and vegetation.

Wong says although the cost of developing a green building may be more than that of a conventional building, “the savings in operational costs would make it cheaper in the long run.”

“If a building is constructed with the right green designs and features, it will reduce energy cost by 50%, which is a substantial saving as energy easily makes up 25% of a building’s operating cost. Together with other forms of savings, green buildings can cut operating costs by about 60%,” he adds.

By The Star (by Angie Ng)

Clearwater focusing on green projects

The Clearwater Group aspires to turn its 240 acres in Seri Kembangan, Selangor, into an eco-friendly development under founding member and managing director Dian Lee Cheng Ling.

Known as Bluwater Estate, the leasehold gated and guarded development appears to be Dian’s most ambitious project to date.

Since her return from Australia where she studied communications, the eldest daughter of property developer Tan Sri Lee Kim Yew has been busy with several property projects.

Dian Lee

Clearwater Developments Sdn Bhd was set up by Dian and three partners in 2006 and their first project was serviced apartments, Clearwater Residences in Damansara Heights. Since then, she has added three brands to the group – Clearwater, Bluwater and The Heritage.

Clearly, the younger Lee would like to focus on eco-friendly projects. Yesterday, she flew off to New York’s Pratt Institute for a seven-week course on Sustainable Designs.

“It will cost quite a bit as Pratt is one of the premier design school in the United States for interior and architecture. I will also be taking my toddler son Jedi and his nanny with me,” says Lee.

She says motherhood has changed her and given her a new perspective on development.

“I’ve become more conscious of the environment we live in, the activities we can do to make this planet a better place for our future generations,” says Lee.

“I’m not the first to go on eco-friendly projects. There are other developers in town who have already done that but I would really like to go one step further.”

Lee has brought in Environmental Resources Management Ltd, a provider of environmental consulting services, to build Bluwater. She will be looking at four aspects – water, energy, landscape and waste management.

On the energy aspect, she says that at this preliminary stage, she would like all the 1,000-odd households to have solar heaters. She will also encourage the use of bicycles and buggies to go to the clubhouse instead of cars.

The properties there will be designed and built in such a way as to enable owners to collect rainwater for use. There are plans to keep the lake as clear and clean as possible for water sports.

The open-cast tin-mine lake will have lake-front bungalows. Right now, there are already two – her family’s weekend home and another which belongs to her father’s friend.

“We will spend RM2mil on trees and a lot more on landscaping to make this place as green as we can. We will also encourage better waste management, essentially the reuse, recycle and reduce concept with different bins for different types of waste. Our sewage system will not be linked to the lake.”

Lee says that after building several properties, she does not want to just build yet another project.

“I want to be passionate about it, to believe that this is the way to go.”

During a site visit, Lee says although there are some high tension cables running pass the main entrance, they do not cut across the housing estate.

The Bluwater Estate, formerly known as South Lake, used to belong to Mines Resort Bhd which was privately held by her father. She and her partners bought it at a “fair price” at a time when her father was scaling back his privately-held local property development activities.

She has also taken over a serviced apartment project fronting the lake, The Heritage, from her father.

Today, 600 of the 800 unit-project is tenanted. One of the blocks, comprising 200 units, will be sold en bloc.

“When the economy picks up, that will be sold. As it is, there is already a waiting list for those who want to rent units at The Heritage.

“With six universities and the Australian International School, which is located on Bluwater itself, we are confident there will be people who will want to invest in this area,” she says.

The studio units are already generating 8% to 10% yield for the owners (with rental of RM1,400 to RM1,500 a month), while the two- and three-room unit cost RM2,300 and RM2,500 to rent respectively, at a slightly lower yield.

The project is located across the highway from Mines Shopping Centre and fronts the lake in Bluwater Estate.

Bluwater is about 20km from the city and is served by the Besraya Highway, which is linked to several other highways.

However, The Heritage, although adjacent to Bluwater, will not be part of the gated and guarded development.

In the next couple of months, Lee aims to launch vacant bungalow land on Bluwater Estate at RM150 per sq ft.

These lots will be between 8,000 and 12,000 sq ft. Known as Bluhaven, there will be 18 lots initially.

The development will also have townhouses priced from RM850,000, semi-detached residential units and condominiums. These will be launched later.

By The Star (by Thean Lee Cheng)

Shopping in style at Kluang Mall

ESTABLISHED brands such as Sushi King, Secret Recipe and PDI are making inroads in secondary cities like Kluang in Johor.

Sushi King's outlet at Kluang Mall for one, is enjoying robust sales with long queues of people waiting to grab a seat during lunch and dinner.

In 2005, when Majupadu Development Sdn Bhd managing director Tey Ah Kau conceptualised the idea of building a lifestyle mall in Kluang that later would be the pride of the town, many were doubtful if it would work.

"After three years of research, we made a bold decision to move ahead of others here. We dared to develop something that many were pessimistic about. People wondered whether residents in Kluang would be willing to spend," Tey said.

With the guidance of retail consultant Richard Chan of RCMC Sdn Bhd, Tey decided that there was a still a need to fill an obvious gap despite existing competition.

"We take a long-term view," said Tey, who has been a property developer for the past 21 years.

Today, the RM100 million Kluang Mall with a 800,000 sq ft gross area is the largest in the town, with a primary catchment of 300,000 and a secondary catchment of 1.2 million from Batu Pahat, Muar, Pontian and Segamat.

Kluang Mall, which opened on December 24 2008, is developed and operated by Tenaga Nusantara Sdn Bhd, also owned by Tey.

Kluang Mall's tagline "Shop like a City" has worked in its favour as the mall has been performing satisfactorily since its opening. Seventy-nine per cent of its net lettable area has been filled.

Tenants, including Popular Book Store, Pacific Hypermarket, Pacific Department Store, Big Apple and Laksa Shack, drew 417,000 shoppers in February this year and 375,000 shoppers in March.

Meanwhile, Tey expects return on investment for the mall typically in seven to eight years.

Built on 2.63ha within the town centre of Kluang, the mall aims to cater to the younger Kluang generation who want finer things in life. The entire mall has WiFi connection.

By Business Times (by Vasantha Ganesan)

JLand aborts Windsor Trade stake purchase

JOHOR BARU: Johor Land Bhd (JLand) has decided to abort its plan to acquire 50.98% equity in Windsor Trade Holdings Sdn Bhd (WTHSB) for RM15mil cash.

Muhammad Ali (right) and JLand managing director Shafiqul Hafiz at the AGM

Chairman Tan Sri Muhammad Ali Hashim said the decision was reached after considering the current global economic slowdown.

He said JLand had earlier proposed to buy the stake in WTHSB to diversify its business activities to improve its earnings base.

“However, we want to focus on our core business of property development as the segment is becoming more challenging now,’’ Ali said after the company’s AGM yesterday.

WTHSB, through its 80%-owned subsidiary Windsor Trade Sdn Bhd, has been granted a 30-year concession to operate the barter trade terminal, Sandakan Integrated Trade Exchange Terminal.

The Sabah government, through Sabah Economic Development Corp, owns the remaining 20% stake in Windsor Trade.

The development of the terminal is estimated to cost RM315mil, inclusive of land cost, pre-development cost, construction of infrastructure and buildings, and equipment.

“We have a 1,102.79ha land-bank and we are looking at RM7bil in gross development value (GDV) when the land is developed over the next 10 to 15 years,’’ Ali said.

At present, JLand is undertaking three property projects – Taman Bukit Dahlia, Bandar Tiram and Bandar Dato’ Onn.

The 168.75ha Taman Bukit Dahlia in Pasir Gudang, expected to be completed by 2010, will have 4,100 units of mixed properties.

The self-contained Bandar Tiram township on a 485.62ha site, with 12,300 units and RM2.6bil GDV, is due for completion by 2020.

JLand’s latest project, Bandar Dato’ Onn is located 12km from Johor Baru City Centre. It is sited on 612.69ha and is to be developed over the next 10 years. The project boasts 17,800 properties and a GDV of RM4bil.

Ali said the company would be launching the Bandar Dato’ Onn Regional Commercial Centre this year.

“Covering 47.75ha, the centre will provide about one million sq m of floor area, making the township the largest commercial centre in Johor Baru district,’’ Ali said.

For the year ended Dec 31, JLand recorded pre-tax profit of RM25.29mil on revenue of RM138.69mil compared with RM8.29mil and RM63.36mil respectively in 2007.

By The Star (by Zazali Musa)

Cititel eyes visitors from China, India

CITITEL Hotel Management Sdn Bhd (CHM) is looking to tap visitors from China and India for its Cititel Penang property.

Cititel Penang general manager Jeffrey Goh said the hotel is keen to attract both the leisure and business segments in the two markets.

He said it is currently working with local agents in Penang to create attractive travel packages to penetrate the Chinese and Indian markets and sell the island state as a Unesco heritage-listed destination.

"Malaysia currently serves as our main source of business, which makes up 55 per cent of our total market," he told Business Times in Penang.

"We expect to enter these new markets by the fourth quarter of the year," he added.

Apart from the domestic market, the Japanese market accounts for another 16 per cent of the hotel's business, while Thai visitors make up 8 per cent.

Cititel Penang has recently invested RM2 million to refurbish its ballroom and superior rooms.

On the influenza A (H1N1) outbreak impact, Goh said: "There has been minimal impact with total cancellation of less than five room nights in total."

By Business Times (by Marina Emmanuel)

IOI optimistic on RM1bil development project in Iskandar

Simon Heng (left) with senior manager, marketing and sales department Kelvin Tang at the Taman Kempas Utama showhouses. “We are looking at RM1bil in gross development value and the project will keep us busy for the next 10 years,’’ Heng told StarBiz.

JOHOR BARU: IOI Properties Bhd is banking on the strategic location of its newly launched Taman Kempas Utama within Iskandar Malaysia as the project’s main selling point.

Senior general manager (property division) Simon Heng said the project’s location in the Kempas-Tebrau growth corridor augur well for the company.

The Kempas-Tebrau corridor is currently the hottest spot for property development in south Johor with more than 10 ongoing projects.

Heng said the project was also easily accessible from the North-South Expressway after the Skudai toll plaza, Jalan Kempas Lama and Jalan Senai-Seelong.

“We are looking at RM1bil in gross development value and the project will keep us busy for the next 10 years,’’ he told StarBiz.

Located on 101.17ha, Taman Kempas Utama will have about 2,000 residential and commercial units, while 20.2ha has been allocated for light industrial buildings.

Heng said Tesco Stores (M) Sdn Bhd, the operator of Tesco hypermarkets in Malaysia, would also set up the township’s first standalone hypermarket on 4.04ha next year.

The project is the company’s second mixed property development project in Johor after its 2,023.42ha flagship project, IOI Bandar Putra Kulai.

Besides upgraders and existing house owners in the vicinity, the project is also aimed at Malaysian professionals working in Singapore, Singaporeans, and pensioners and expatriates based in the republic.

“Demand for high-end houses is still positive in Iskandar Malaysia despite the current economic situation as there are still buyers out there with money,’’ said Heng.

He said the commitment shown by stakeholders of Iskandar to ensure that the development of the economic growth corridor continued despite the slowdown would also benefit the property sector.

Under the Ninth Malaysia Plan (9MP), the Government has allocated RM6.83bil for infrastructure projects in Iskandar and all the projects will be completed between 2011 and 2015.

Projects approved under the 9MP include road improvement packages, drainage works, river cleaning and public housing.

These projects are in five flagship development zones in Iskandar – Johor Baru City Centre, Nusajaya, Eastern Gate Development, Western Gate Development and Senai-Kulai.

Heng said the continuous inflow of local and foreign investments and the creation of some 800,000 jobs over the next 15 years in Iskandar would boost demand for houses there.

He said the company planned to expand its IOI Mall shopping centre in Bandar Putra Kulai next year to cater for the growing number of shoppers.

The RM50mil shopping centre, spanning 55,742 sq m, opened in 2001 with 80 tenants and was the only standalone shopping centre in the Kulai-Senai area, he said.

Heng said the new wing, to be known as IOI Mall II, would be built on a 4.04ha site beside the existing shopping centre and would have 100 tenants.

By The Star (by Zazali Musa) (Posted on 22May2009)

UEM Land, BiotechCorp to develop site in Nusajaya

ATLANTA: UEM Land Bhd, the property development subsidiary of UEM Group Bhd, and Malaysian Biotechnology Corp Bhd (BiotechCorp) plan to jointly develop an estimated 80.8ha of land in Nusajaya, Johor, into a biotechnology (biotech) park.

UEM Land strategic marketing and corporate communication director Zulkifli Tahmali said the two companies are expected to sign a joint-venture agreement in the next two months.

"We have matters of land, infrastructure, facilities as well as equity to finalise before we can sign the documents," he told reporters attending the 2009 BIO International Convention here yesterday.

UEM Land is part of the Malaysian delegation participating at the Bio 2009 Atlanta, the largest global event for the biotech industry, to promote the upcoming BIO Malaysia 2009 in November and the proposed biotech park in the Iskandar Malaysia, called "Bioxcell".

UEM Land hopes to start construction on the biotech park by the end of the year.

"We will stay true to our developmental expertise and focus on the project and facilities management, while BiotechCorp will bring in the biotech expertise," Zulkifli said.

The proposed biotech park will house not only shared facilities such as offices and incubators, but also graduate facilities.

Zulkifli said about 50 per cent of the area will be allocated to contract manufacturing companies. It is expected to house 20 to 30 companies of various sizes.

"The proposed biotech park in Nusajaya will benefit from its close proximity to University Technology Malaysia, a biosciences institution as well as Singapore's advanced biotechnology industry, and pool of human capital. Bioxcell would be able play a complementary role to the research park which has positioned itself as the place for cutting edge technology," Zulkifli said.

He added that the development of a biotech park in Nusajaya will have tremendous spillover effects on the entire development of the area, contributing towards making the development a success.

Nusajaya is a 9,600ha development, which is currently home to eight signature projects.

By Business Times (by Presenna Nambiar)  (Posted on 22May2009)

Boustead REIT nets RM20m in Q1

Al-Hadharah Boustead REIT, the only Islamic plantation REIT, recorded a 17 per cent increase in its profit after tax to RM20.236 million for its first quarter ended March 31, 2009 from RM17.314 million last year.

In a statement yesterday, Boustead REIT Managers Sdn Bhd's chairman Tan Sri Lodin Wok Kamaruddin said it was mainly because of a gain of RM6.5 million on the compulsory acquisition of investment properties by the government.

He said the strong performance was achieved on the back of a revenue of RM15.810 million against last year's RM18.798 million.

Lodin added performance based profit sharing dipped slightly to RM2.5 million compared with last year's RM2.9 million.

"Though there were contraction in crude palm oil prices which affected our performance based structure, our fixed rental income for the period under review grew.

"In addition, this gain from the compulsory acquisition of the investment properties by the government went directly to our bottom line. This significant gain of RM6.5 million was a primary contributing factor in psuhing our profits up," he said.

He said the company was confident that demand for palm oil will see an upward trend due to its strong popularity although global demand for edible oils has been affected by the credit squeeze and economic crisis.

"We are optimistic that palm oil prices will continue to trade at the current steady price range for the year," he said.

By Bernama  (Posted on 22May2009)

Shaziman: Let's have more environ-friendly buildings

MALAYSIA must move towards having more "green" buildings, Works Minister Datuk Shaziman Abu Mansor says.

He plans to propose that all upcoming government buildings be "green", or environment-friendly, in their design.

"In future, I hope whenever there are new government buildings to be built, criteria like energy savings and usage of recycled water would be taken into consideration. This can bring down operations cost for the government," he told reporters at the launch of the Green Building Index (GBI) in Kuala Lumpur yesterday.

The GBI, developed by the Malaysian Institute of Architects and the Asociation of Consulting Engineers Malaysia, is essentially a rating system that gauges how "green" a building, be it residential or non-residential, is.

"It was initiated to provide the building industry a common and verifiable mechanism to benchmark buildings within the Malaysian context," said Serena Hijjas, a GBI accreditation panel member.

For now, the GBI will assess new buildings. Later, it will develop a framework that will enable it to also assess existing buildings.

Building owners, developers and consultants can apply to have buildings assessed for a marginal fee, Serena said.

"So far, we've done pilots on 11 projects, and more are coming in, so the take-up rate has been very encouraging," said Tan Loke Mun, another accreditation panel member.

Asked if the government plans to make it mandatory for all property developers to have their projects assessed, like in Singapore, Shaziman said it was too early to say.

"It's still at an initial stage. But on the government's part, we encourage the move towards green buildings," he remarked.

In Malaysia, the GBI will rate buildings based on six key criteria, namely energy-efficiency, indoor environmen quality, sustainable site planning and management, materials and resources, water efficiency and innovation.

A building will be assessed at the design stage as well as a year after it is first occupied, and then again every three years to ensure that it is well-maintained.

A building can be assigned a Platinum, Gold, Silver or Certified rating, depending on the scores achieved.

By Business Times (by Adeline Paul Raj) (Posted on 22May2009)

S P Setia’s Setia Eco Gardens, Pavilion clinch Fiabci awards

KUALA LUMPUR: S P Setia Bhd’s Setia Eco Gardens project in Johor and Pavilion Kuala Lumpur have emerged winners in the Fiabci Prix d’Excellence Awards 2009 international property awards. Fiabci is the French acronym for the International Real Estate Federation.

S P Setia won in the Master Plan category while Pavilion KL won in the Retail category. Fiabci International announced the winning projects in a press release on May 21.

The awards presentation ceremony was to be held during the 60th Fiabci World Congress in Beijing. However, the entire Congress was called off three days before it was to due to begin on May 19 due to concerns over the spread of the A (H1N1) influenza.

This is S P Setia’s second win as it won in the same category in 2007 for its Setia Eco Park residential development in Shah Alam. The Group has been ranked the nation’s top property developer in The Edge Top Property Developers Awards for the past four years.

S P Setia president and CEO Tan Sri Liew Kee Sin attributed the win to the Group’s continous efforts in striving for excellence. “We are heartened that our efforts over the years to differentiate ourselves as the developer of choice have been rewarded with such a well-respected award in the property industry,” said Liew who is currently in Beijing together with about 100 other delegates who were already in Beijing when the Congress was called off including Lisa Kurrass, the new Fiabci World president.

“Setia Eco Gardens was developed in line with the Eco Concept due to the existing environment and the intention is to make the Eco concept available to both high-end customers (lavish eco villas priced from RM800,000) and the mass market (eco homes priced from RM200,000),” added Liew of the homes in the 948-acre township development.

Among the common features of the Eco homes and villas are energy conservation features such as rainwater harvesting, water recycling and solar panels.
The provision for green zones in the development master plan includes a 18.5-acre Eco park, a 16-acre rainforest, smaller landscaped parks as well as rivers, lakes and canals.


Meanwhile, Joyce Yap, CEO-Retail of Kuala Lumpur Pavilion Sdn Bhd said winning the award in the Retail category could mean that the lifestyle mall has led the country’s retail industry to new levels particularly in the growth of retail brands in Malaysia. It has a total of 450 tenants across 1.3 million sq ft net of retail space and has received about 48 million visitors since opening in 2007.

Residential project Lake Edge Puchong by YTL Land & Development Bhd was runner-up in the Master Plan category.Other runners-up from Malaysia was YTL's condominium project The Maple at Sentul Park which came in second runner-up in the Residential category while the 1 Sentral office building in KL Sentral by Malaysian Resources Corporation Bhd and G Hotel in Penang were first runners-up in the Office and Hotel categories respectively.

Orchard Scotts and Newton Suites from Singapore took the top two spots respectively in the Residential category while St Regis Singapore was the winner in the Hotel category.

Last year, Mulpha International Bhd's Pinggiran Bayou Village Homes which is part of its Leisure Farm Resort development in Johor was tops in the Residential category while four other Malaysian developers were runners-up in various categories.

This year’s awards saw several first-time winners from China, India and Russia. The two China projects that won were Huaming Model Town in the Rural & Suburban category and the Nanjing Riverbank Family affordable housing project which won a special award called the Beijing Congress Award. Russia’s tallest building the Federation Tower won in the Office category.

The full list of 2009 winners can be viewed at www.fiabciprix.com

By The EDGE Malaysia

‘Sell then build’ has worked well

IN London last week I found the weather to be similar to the residential property market – mostly cloudy, with some bright patches.

Values of central London property have dropped 25% in a year.

When coupled with a drop in the value of the pound against the ringgit, this reduction in cost, to a Malaysian, is about 40%.

Of course, values are still high by our standards, ranging between £1,000 and £2,000 per sq ft.

A million pounds wouldn’t buy you much, but many Londoners had become quite blasé about the big numbers.

I met one “small time” operator who had accumulated about seven apartments to renovate and sell.

He was personally indebted to his bank for over £45mil and there was some doubt about whether his assets could cover that amount.

It was, he explained, so easy to borrow money until the crunch came.

He showed me one of his apartments currently let at £33,000 per week.

When I left England in the late sixties, that was the amount a blue-collar worker might expect to earn in his entire lifetime.

An interesting feature of the London market is that there is not much stock available.

Sellers, including the banks, are holding off until prices perk up, and there are already some early signs of recovery.

A prolonged upturn might persuade more owners or people with mortgages to liquidate, confirming my belief that a recession always has a sting in its tail.

While I was winging back to KL, a gentleman in Australia was penning a letter to the press accusing me, in one of my articles, of “obfuscation, irrelevance and mumbo jumbo.”

The less confused bits of his letter appear to deal with the issue of “sell then build.”

I am grateful to him for bringing this up and would like to clarify what I believe is confusion over terminology.

The traditional delivery system for developers in Malaysia – and in many other parts of the world including Singapore, Spain and occasionally in England – is to buy “off the plan” and pay progressively during the development period.

This is known as “sell then build.” My antipodean correspondent is of the view that this is grossly “unfair.”

I’d like to be present when he takes possession of a new apartment in Shanghai.

Customarily developers over there deliver a bare shell and all “extras” such as doors and sanitary fittings are added by the purchaser.

My friend from down under went on to add that my act of buying a Proton Exora by signing an order, paying a deposit and taking delivery when it was built, was somehow not “sell then build.”

My view is that we have a locally accepted housing delivery system that has worked phenomenally well and has put a roof over the heads of millions of Malaysians post independence at a rate that the Government alone could never emulate.

It has taken care of the needs of the low-income sector and stands as a shining tribute to private endeavour.

However, in response to potential interest from the market, a second delivery system has been introduced, popularly known as “build then sell” or, “BTS 10:90.”

I believe this is seen as offering the consumer better protection against default by the developer.

As the name implies, the system provides for the buyer to pay a 10% deposit and the balance upon issuance of the Certificate of Completion and Compliance.

In an ideal world, the buyer only risks 10% and he can withhold the balance if there are substantial defects, or if the developer absconds.

In reality, a developer is unlikely to offer this delivery system unless the buyer has lined up a bank loan for payment of the balance 90%.

This seems sensible to me because it discourages speculation.

The developer will normally draw down this 90% during development and bear the interest costs, so in most cases, the arrangement is still essentially a “sell then build” system.

Nothing has changed very much, including the right of the bank to seek redress from the buyer if, for any reason, the developer fails.

In Britain, house buyers have the protection of the much-vaunted National House Building Council 10-year Buildmark warranty and insurance cover for new home buyers.

Despite this self-important title, its effectiveness has been called into question.

The British press recently carried a story of a disgruntled buyer’s letters of complaint to the developer being returned with the endorsement “moved to Iraq.” One wonders who deserves the most sympathy.

In response to the problem, the Council assured the buyer that it is “committed to resolving the problems as soon as possible.”

Critics call the Council a toothless tiger and blame the local authority for signing off on the property in the first place.

All this has some resonance in Malaysia and it is so reassuring to see that delivery problems will persist no matter where.

Finally a little perspective. Last year, 216,702 houses changed hands in Malaysia. 80% were sold in the secondary market.

That means they were mostly completed and available for inspection.

Only 20% of transactions were sales from developers.

By a large margin the majority of purchasers get to see, smell and feel their property before purchase.

Amongst those who do not, there is undeniably a small percentage who suffer from the default of the developer.

The Ministry of Housing and the Bar Council are working on enhancing the current legislation.

Enhancement is always desirable; fundamental change would be a mistake.

As the saying goes, “if it ain’t broke, don’t fix it.”

Chris Boyd is executive chairman of Regroup Associates Sdn Bhd property consultants.

By The Star (by Christopher Boyd)

UEM Land, BiotechCorp to set up biotech hub

ATLANTA (US): UEM Land Bhd and Malaysian Biotechnology Corp Bhd (BiotechCorp) are expected to sign a definitive agreement to jointly develop about 80 hectares in Nusajaya, Johor into a biotech hub in a couple of months.

"We have matters of land, infrastructure, facilities as well as equity to finalise before we can sign the documents," UEM Land strategic marketing and corporate communication director, Zulkifli Tahmali, said at the Malaysian Pavilion at the Bio International Convention 2009 here yesterday.

Both parties had on May 15, 2009, signed a memorandum of collaboration (MOC) to collaborate and cooperate with each other to develop and set up the hub to be known as "Bio-XCell".

UEM Land and BiotechCorp signed the MOC to govern the working relationship between the parties pending finalisation of the definitive agreement.

It is the master developer of Nusajaya, which is part of Iskandar Malaysia.

UEM Land is part of the Malaysian delegation to BIO Atlanta this year to promote Malaysian biotech industry, including "Bio-XCell".

Zulkifli said UEM Land hoped to start construction by year-end.

"We will stay true to our developmental expertise and focus on the management of the project and facilities, while BiotechCorp will bring in the biotech expertise," Zulkifli said.

He said the biotech park in Nusajaya would benefit from its close proximity to University Technology Malaysia, a bioscience institution as well as Singapore’s advanced biotechn industry, and pool of human capital.

"Bio-XCell" would be able play a complementary role to the research park which has positioned itself as the place for cutting-edge technology," Zulkifli said.

He said the biotech park would be one of the important projects in Nusajaya as it would have tremendous spillover effects on the entire development of the area.

Nusajaya is a 9,600-ha development, which is currently home to eight signature projects, namely the Johor State New Administrative Centre, Southern Industrial and Logistics Centre, International Destination Resort, Residences at Nusajaya, EduCity, Medical Park and its jewel, the Puteri Harbour waterfront development.

By Bernama

Vietnam offers projects for Malaysian firms

Opportunities are now available for Malaysian firms to participate in major construction and infrastructure projects being implemented in Vietnam up to 2020.

State Capital Investment Corp of Vietnam (SCIC)'s strategy department director Nguyen Chi Thanh said the country was offering foreign investors a wide range of investment opportunities in areas like roads and bridges, power,seaports, railways and airports.

For this year, Vietnam planned to undertake two major projects worth US$75 billion to build the Long Thanh International Airport and Thu Thiem International Financial Centre, Thanh said.

Other projects such as North-South Express Railway, Lach Huyen International Port and Ha Noi-Lao Cai Highway will be implemented in stages up to 2020, he said.

Thanh, who was in Malaysia to meet Malaysian companies, said SCIC would like to discuss with investors about potential investment cooperation that could be achieved between both countries.

"We are here to introduce big projects to foreign investors, especially Malaysians, due to the strong investment capital cooperation between both countries, such as with Khazanah Nasional Bhd," he said. "Both countries have a strong relationship, and we want to follow the Khazanah model and implement it in our country," he added.

SCIC, the investment holding arm of the Vietnamese government, is looking for cooperation in the form of strategic investors for its existing investee companies as well as setting up new businesses, Thanh said. This, he said, could be carried out with SCIC and its linked companies to implement major investment projects.

By Bernama

Paramount to launch RM1b property project

PARAMOUNT Corp Bhd is to undertake a mixed property development project known as Banyan Hills in Sungai Petani, with a gross development value (GDV) of RM1 billion, said its managing director Ong Keng Siew.

"We have started earthworks on the 515-acre site which was acquired in 2007. The project will take between eight to 10 years," he told reporters after the company's annual general meeting (AGM) in Shah Alam today.

"The project, to be launched in 2010, will have 96 per cent residential and four per cent commercial properties," he added.

Ong said about 5,000 units of semi-detached homes, bungalows and low rise apartments are expected to be built at Banyan Hills.

According to Ong, another of the company's projects, the Surian Industrial Park in Kota Damansara comprising 38 units of two-storey semi-detached industrial units, is expected to be fully sold by year-end.

He said the company is expecting a GDV of RM120 million from the Surian Industrial Park, which is designed for businesses like corporate offices, showrooms, warehouses, light and clean manufacturing activities as well as small and medium enterprises (SMEs).

Paramount has also acquired a five-acre land in Section 13, Petaling Jaya, to build a high rise commercial tower and is awaiting approval from the authorites.

The company's property development segment registered a 36 per cent increase in revenue for the financial year ended December 31, 2008, to RM233.7 million, compared with RM171.9 million in the same period of 2007.

On its performance for this year, Ong said the company is expecting a marginal drop in profit and revenue due to the gloomy global economic outlook and weak consumer sentiment.

"We are, however, optimistic that affordable housing and educational needs will continue to grow and will do our best to respond to these needs," he added.

For the financial year ended December 31, 2008, the company recorded a lower pre-tax profit of RM60 million, down by 12.2 per cent compared with RM68.3 million in 2007.

However, revenue rose to RM398.8 million, an increase of 32.9 per cent from RM300.1 million in the previous year.

By Bernama

SP Setia: No plans to buy 3 PNB firms

SP Setia is instead more than happy to form a joint venture with Island & Peninsular, Pelangi and Petaling Garden to develop their landbank

SP Setia Bhd, the country's biggest property developer, said it has no plans to buy the three property companies under Permodalan Nasional Bhd (PNB).

Instead, it will collaborate with Island & Peninsular Bhd (I&P), Pelangi Bhd and Petaling Garden Bhd on land development, its president and chief executive officer Tan Sri Liew Kee Sin said.

SP Setia, in which Liew and the Employees Provident Fund hold a 12 per cent and 15 per cent stake respectively, has kept mum on its plan to acquire the three property companies until now.

"SP Setia will not take a stake or buy over the companies at this moment. We are more than happy to form a joint venture with the companies and develop their landbank," Liew told Business Times after the launch of the group's first low-cost housing scheme at its flagship Bandar Setia Alam in Shah Alam, Selangor on Monday.
SP Setia's total undeveloped land currently stands at 1,959 hectares, inclusive of 223ha in Vietnam.

Liew said the group is looking to buy more land in the Klang Valley, Johor and Penang to expand its landbank.

RHB Research Institute Sdn Bhd had last month said that SP Setia may acquire I&P, Pelangi and Petaling Garden from PNB to increase sales and gain financial backing from the government.

The three property units are reported to have a combined annual sales of more than RM1.31 billion, similar to SP Setia's 2008 figures.

PNB, which has a 32.9 per cent stake in SP Setia, is planning to merge I&P, Pelangi and Petaling Garden to create a large property group.

The research house had said SP Setia could be pulled in to spearhead the merger in view of its strong brandname and market leader position in the local property industry.

"Over the years, SP Setia has gained the admiration of customers and we have many repeat buyers. We are still moving on with business. Our sales are picking up and we are expected to achieve our RM1.1 billion sales target by October 31," Liew said.

By Business Times (by Sharen Kaur)

More pain for Asian property sector forecast

SINGAPORE: Asian property values may keep sliding this year as the global credit crisis and economic slowdown undermine investor confidence, investors and analysts said.

"It's going to be another year of pain," Stuart Labrooy, chief executive at real estate investment trust Axis-REIT in Kuala Lumpur, said yesterday at an industry conference in Singapore.

"Asia is in for a fairly lean spell," he said.

Markets such as Hong Kong, Shanghai, and Singapore have already seen large price drops since last year after years of cheap credit lured a flood of foreign money into the region's real estate, especially high-end residential and office space.

As credit conditions tightened last year and the global appetite for risk waned, speculative money fled the region's stock and property markets.

Investors who chased hot markets last year have absorbed big losses, and new buyers now shouldn't expect to make a quick profit, said Blake Olafson, head of the Asia real estate group for Bahrain-based investment firm Arcapita.

"Those who made investments last year have had significant writedowns," Olafson said. "You can't have a trading mentality, but rather a five- to seven-year view."

Markets that soared the most during the years leading up to 2008 have subsequently plunged and may not have bottomed yet, analysts said.

Singapore, for example, has seen private residential property prices fall about 20 per cent from their peak in the second quarter last year after jumping 31 per cent in 2007.

Along with the broader global downturn, each Asian market may face its own particular challenges.

In Singapore, the city-state's growing status as a regional finance and wealth management hub left it vulnerable as banks and investment firms shed workers amid the credit crisis.

Offices here that rented for US$3,000 (US$1 = RM3.54) a sq ft last year are now available for US$1,800, Olafson said.

Asian property values will probably bottom by the end of this year but may not start to rise again until the economies of US and Europe have consistent growth and boost investor confidence, Labrooy said.

By AP

Sime Darby plans 3rd hospital by 2012

The new 300-bed hospital in Desa Park City near Bukit Menjalara Kepong, Kuala Lumpur, is expected to start operations by 2012

MALAYSIA'S largest conglomerate, Sime Darby Bhd, is expected to open its third full-fledged hospital in Desa Park City near Bukit Menjalara Kepong, Kuala Lumpur, by 2012 to ride on the recession proof medical industry.

Sime Darby Healthcare chief executive officer Elaine Cheong Pek Yim said the group is in the midst of planning for the new 300-bed hospital, and a ground-breaking ceremony will be held by year-end to mark the start of construction works.

"The hospital, called Sime Darby Medical Desa Park City, will be built on a design, build and lease concept and is expected to start operations by 2012," Cheong told reporters in Selangor yesterday after forging a partnership with Medilink Network (PVT) Ltd of Bangladesh and Medilink (Beijing) TPA Services Co Ltd.

Cheong declined to reveal investment cost, but a Business Times report in 2006 estimated at the time that the cost of building the hospital, which also includes a supermarket, would be about RM350 million.
She added that the new hospital is designed by the Sime Darby group and built by Desa Park City developer, Perdana Park City Sdn Bhd, who will then hand it over to Sime Darby upon completion.

Perdana ParkCity is a member of Miri-based Samling Group.

"The hospital will offer tertiary care and it will be a growing business within the Sime Darby group in the future," said Cheong.

The Sime Darby group owns and operate the 393-bed Sime Darby Medical Centre (previously known as Subang Jaya Medical Centre) and the Sime Darby Speacialist Centre Megah in Petaling Jaya. It also owns and operate the Sime Darby Nursing Health and Sciences College managed by its healthcare arm Sime Darby Healthcare Sdn Bhd.

Sources said the hospital could even be bigger than the Sime Darby Medical Centre in Subang Jaya as it will cater to a larger affluent group at nearby densely-populated areas such as Kota Damansara, Damansara Perdana, Bandar Sri Damansara, and Mutiara Damansara.

The hospial will also be within 5km of Bandar Utama, Taman Tun Dr Ismail, Sri Hartamas, Mont' Kiara, Bukit Damansara and the upscale neighbourhood of Petaling Jaya.

Taking into account the population within the Desa Parkcity township, the population in the area has a total disposable income of some RM550 million a month.

In a previous interview, Perdana ParkCity said it was prepared to offer 2.03ha of land to operate a private hospital in the township. The Damansara Specialist Centre, operated by KPJ Healthcare Bhd, is the only other large private hospital in the area.

Sime Darby Healthcare, which has a presence in Indonesia, Vietnam, the UK and the US, is part of conglomerate Sime Darby Bhd which has businesses in over 20 countries ranging from motor, industrial, property and plantations.

Analysts said the new hospital is part of Sime Darby's long-term plan to grow its healthcare business which, together with general trading and other business, account for about 10 per cent of revenue compared with plantations (8.2 per cent), property (3.6 per cent), heavy equipment (33.3 per cent), motor vehicles (34.1 per cent) and energy and utilities (9.6 per cent).

By Business Times (by Zaidi Isham Ismail)

US housing starts, permits hit record lows in April

WASHINGTON: New US housing starts and permits unexpectedly fell to record lows in April, a government report showed yesterday, denting hopes that stability in the housing market was imminent.

The Commerce Department said housing starts fell 12.8% to a seasonally adjusted annual rate of 458,000 units, the lowest on records dating back to January 1959, from March’s upwardly revised 525,000 units.

“It obviously calls into question the notion that the housing market is stabilising,” said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.

Compared to the same period last year, housing starts tumbled 54.2%. Analysts polled by Reuters had expected an annual rate of 520,000 units for April.

US stock index futures pared gains after the data. Government bond prices extended losses despite the weak report.

New building permits, which give a sense of future home construction, dropped 3.3% to 494,000 units, the lowest since records started in January 1960, from 511,000 units in March. — Reuters

That was well below analysts’ forecasts of 530,000 units. Compared to the same period a year-ago, building permits plunged 50.2%.

Meanwhile, aggressive cost-cutting helped Home Depot Inc, the word’s largest home improvement chain, to report yesterday a bigger-than-expected profit in the latest quarter despite the deep US housing slump.

By Reuters

Accor Group eyes Malaysia for Ibis Hotel

French multinational corporation, Accor Group is eyeing Malaysia for its economy hotel chain, Ibis Hotel, given the rising interest in the country as a top tourist destination in the region.

Ibis is Accor's economy hotel brand, which has expanded rapidly around the world and become the European market leader in the economy hotel industry and one of the five largest worldwide operators.

Currently, it has 800 hotels in 40 countries.

"Malaysia offers nature, cultural experience and great shopping which makes it a key destination for all the hoteliers, making sure they have presence not just inbound and outbound but being there," said Hiro Inoue, the director of marketing for Ibis Singapore on Bencoolen.

Besides being strategically located in the region, he said the country has become an attraction for tourists particularly from South Korea and Japan due to lower currency exchanges rates.

Beside Malaysia, Ibis has yet to have any presence in these countries in the Southeast Asia region namely Brunei, Laos, Cambodia, Myanmar and the Philippines.

"We actually have had regular meetings with potential parties in Malaysia and have not gone to a point where we could announce where, how and when," he said in an interview recently.

However, Inoue said focus would likely be in areas where growing businesses are, such as Kuala Lumpur, Johor Bahru, Kota Kinabalu and Kuching.

When asked what kind of partnership the group was looking at for the venture, he said there were various levels of business interest which could be achieved between the parties.

"We currently have a number of opportunities. I just can't discuss it yet," he said.

Inoue said some Ibis hotels are fully owned by Accor. particularly in strategic locations, some are through joint venture while others are managed hotels.

Under Ibis's worldwide expansion plan, it expects to have 1,100 hotels by next year in more than 70 countries across all five continents.

According to the plan, the Asia Pacific region, where 40 per cent of these new establishments will be opened, will be the main growth market for Ibis.

Late February this year, Accor opened its first hotel in Singapore, Ibis on Bencoolen, which is a joint venture between Accor and La Salle Investment Group.

The hotel which is also the largest Ibis hotel outside Europe, is 30 per cent owned by Accor while La Salle, which is also the developer, owns 70 per cent.

By Bernama

SP Setia set to hit RM1.1b sales target

SP SETIA Bhd, the country's biggest property developer, is on track to meet its sales target of RM1.1 billion by October 31, thanks to its innovative home loan scheme.

Dubbed "Setia 5/95 Home Loan Package", it allows buyers to make a 5 per cent downpayment on a house and nothing more until completion.

The scheme was launched on January 19, and due to its overwhelming response, the company has extended the promotion period to July 19 and is targeting an additional RM300 million in sales, group managing director and chief executive officer Tan Sri Liew Kee Sin said.

Up to April 19, SP Setia has registered RM500 million in sales.
SP Setia is launching Setia Sky Residences this month, expecting to rake in RM200 million sales.

"When we launch, one whole block comprising 211 units will be sold. Times are good for developers," Liew said at the launch of the group's first low-cost housing scheme at its flagship Bandar Setia Alam in Shah Alam, Selangor, yesterday.

Sky Residences comprises four 39-storey condominium blocks, featuring a total of 844 units worth about RM800 million.

It is SP Setia's first high-rise development in the Kuala Lumpur city centre, located next to the National Heart Institute on Jalan Tun Razak.

On Bandar Setia Alam, Liew said the group will launch 449 units of low-cost apartments priced at RM42,000 each, and 220 units of low medium-cost apartments priced from RM72,000 to RM105,000 per unit, as part of its corporate social responsibility.

The total gross development value is RM34 million.

"We will be losing RM20,000 from every unit we sell but we are building the apartments to cater to the lower income group. The properties will be located next to established areas," Liew said.

To help the lower income group own a home, SP Setia has teamed up with Malaysia Building Society Bhd (MBSB) to provide 100 per cent financing.

SP Setia will build 7,212 affordable homes over the next 10 years.

Housing and Local Government Minister Datuk Seri Kong Cho Ha, who witnessed the signing between SP Setia and MBSB yesterday, said the housing landscape should change with low-cost houses moving up a notch from a low-edge environment.

Kong also urged local developers to build affordable homes close to prime areas and infrastructure to assist the low income group whom largely depends on public transportation for travel.

By Business Times (by Sharen Kaur)

Extended loan scheme to draw RM300m home sales

SHAH ALAM: SP Setia Bhd targets to sell RM300mil worth of properties during the three-month extension of the 5/95 home loan package promotion from April 19 to July 19.

“When we stopped 5/95 on April 19, many people still wanted to buy property but could not benefit from the promotion, so we extended it by three months,” SP Setia president and chief executive officer Tan Sri Liew Kee Sin said yesterday, adding that there would be no more extensions.

It had registered RM500mil revenue during the first three months of the 5/95 financing scheme launched on Jan 19.

SP Setia is also set to launch one block of Setia Sky Residences with a gross development value of about RM220mil and is waiting for one more approval from the authorities. This development is located in Jalan Tun Razak on a 5.96-acre site. It comprises four 39-storey tower blocks, with each block containing 211 condos.

Liew said the company was on track to achieve RM1.1bil sales for the financial year ending Oct 31 (FY09).

Contrary to media reports on the current slowing property market, Liew was optimistic on the domestic property market. He said now was a good time for development with sales worth a few billion ringgit transacted in the last three months.

He said this after the launch of a low-cost housing scheme and the signing of a memorandum of understanding between SP Setia and Malaysia Building Society Bhd (MBSB) for 100% financing for low-medium cost housing in Bandar Setia Alam.

Housing and Local Government Minister Datuk Seri Kong Cho Ha launched the event.

A total of 120 acres out of 2,525 acres in Setia Alam have been set aside for low-cost homes comprising 7,212 units. The low-cost scheme would be developed in phases and currently, 449 units are being offered. These comprise five- and six-storey walk-up apartments with a built-up area of 682 sq ft. The low-cost home costs RM42,000, while the low-medium cost home costs about RM72,000.

Liew said that for every low-cost unit sold, the company was subsidising RM20,000.

“As long as we can benefit the mass market, we will continue with this effort,” he said.

By The Star (by K.C.Law)

YNH Property posts RM15m net profit in 1Q

KUALA LUMPUR: YNH Property Bhd posted a net profit of RM15.17 million in its first quarter ended March 31, 2009, down 43% from the RM26.69 million recorded in 1Q08.

Revenue fell 29% to RM62.93 million from RM88.73 million.

The lower profit and revenue were mainly due to fewer property launches in view of the weak market demand for high-end properties, the company said in a statement today.

However, going forward, the group had entered into joint ventures to develop a few pieces of strategic land in Mont' Kiara, Hartamas, Kuala Lumpur city centre, Ipoh city and Seri Manjung town.

These developments, which are at the planning stage, had an estimated gross development value of RM1.8 billion and were expected to contribute to the group's earnings for the next 15 years, YNH said.

By The EDGE Malaysia (by Tony C H Goh)

Bina Goodyear to sell land for RM27m

BINA Goodyear Bhd (BGB) said its wholly owned subsidiary, Greater Heights Development Sdn Bhd, is proposing to dispose of a piece of land to Green Heights Development Sdn Bhd for RM27 million cash.

BGB said in a filing to Bursa Malaysia that the proposed disposal involved the disposal of a piece of freehold land in Mukim Bandar Sri Damansara, Selangor.

Proceeds from the sale has been mainly earmarked for the repayment of bank borrowings and working capital of the group, it said.

By Bernama

Ahmad Zaki unit gets RM185mil Saudi job

PETALING JAYA: Ahmad Zaki Saudi Arabia Co Ltd (AZSA), a wholly-owned subsidiary of local construction company Ahmad Zaki Resources Bhd (AZRB), had on May 12 accepted works order worth RM185mil from Saudi Oger Ltd of Saudi Arabia to build reinforced concrete structures for Tower H1-A of the Jabal Omar Development in Mecca.

In a filing to Bursa Malaysia yesterday, AZRB said the works were expected to be completed in 18 months from the acceptance of the order.

AZRB said the contract was expected to contribute positively to the group’s earnings and net tangible assets for the financial year ending Dec 31, 2009 and the following financial year.

The directors were of the opinion that the works were in the best interest of the company and that it would not have any effect on the issued and paid-up capital of AZRB.

By The Star

Domestic steel demand to dip this year, pickup next year

KUALA LUMPUR: Domestic steel demand is projected to contract a further 25% this year, after falling 10.7% to 7.8 million tonnes in 2008, according to the Malaysian Iron & Steel Industry Federation (MISIF).

Chow Chong Long ... We expect demand to stabilise in the second half of the year as domestic construction activities go into full swing

Its president, Chow Chong Long, said consumption was expected to post a “recovery” in 2010 but “it would probably take a few years” for demand to be able to re-test its peak volume of 8.7 million tonnes achieved in 2007.

“We are probably at the bottom, or at least near the bottom, in terms of demand and prices,” he told a press conference after the opening ceremony of South East Asia Iron and Steel Institute’s conference and exhibition 2009.

Steel bar price in the domestic market had plunged from a high of RM3,800 per tonne in July 2008 to around RM2,000 per tonne in recent weeks. Chow said prices might creep up higher in the coming months, as new orders from the construction sector gained traction.

“We expect demand to stabilise in the second half of the year, as domestic construction activities go into full swing, boosted by the implementation of projects under the two economic stimulus packages,” Chow said.

Reflecting the trend in the global market, local steel consumption plunged more than 50% in the last quarter of 2008 and continued to be depressed during the first three months of this year.

Chow said while domestic demand was showing early signs of a rebound, the sharp drop in the early part of the year would weigh down on the country’s full-year consumption forecast.

The huge decline in domestic steel consumption projected by MISIF this year is also much lower than the 14.9% drop prediction in global consumption forecast by the World Steel Association.

The sharp contraction may have forced local steel millers, including Ann Joo Bhd and Perwaja Holdings Bhd, to delay their production capacity expansion and factory upgrade plans this year.

Currently, local steel millers are mainly skewed towards producing construction steel. While Malaysia’s production capacity in terms of tonnage “exceeds” total usage, the country still imports the bulk of its steel requirement.

Government figures showed total iron and steel products exports amounted to RM10.5bil in 2008, while imports stood at RM28.7bil.

By The Star (by IZWAN IDRIS)