Malaysia to relook stamp duty rate

WORKS Minister Datuk Shaziman Mansor said the government needs to relook the stamp duty of 0.5 per cent on service contracts, as it is having a negative impact on the construction sector.

The new stamp duty rate, proposed under Budget 2009, makes a RM10 million construction contract attract an ad valorem duty of RM50,000.

The combined effect of stamping all agreements including sub-contracting and outsourcing at 0.5 per cent of the contract value is exponential and will be passed on to consumers, regardless of whether they are government or private contracts.

Master Builders Association Malaysia president Ng Kee Leen last week urged the government to revert to the previous practice of a RM10 flat fee on construction services agreements that do not require collateral.

"I support the contractors' call to relook into this stamp duty rate change," Shaziman told reporters after officiating at the Construction Industry Integrity Seminar organised by Construction Industry Development Board (CIDB) in Kuala Lumpur yesterday.

Asked if he specifically supported a complete waiver of stamp duty on construction contracts or to revert to the RM10 flat fee, he replied: "I support a revision. The decision lies with the Cabinet."

On the recent collapse of Jaya Supermarket in Petaling Jaya and the roof of Stadium Sultan Mizan Zainal Abidin in Terengganu, the minister said investigations are still ongoing and he hopes to receive the reports soon.

Shaziman said in the mean time, CIDB will continue to weed out contractors who are incompetent and not credible from its register.

"We don't want part-time contractors. We'll strike out the dormant ones," he said.

Currently, there are 63,000 contractors of varying grades registered with CIDB.

By Business Times (by Ooi Tee Ching)

SunCity prefers Malaysia for listing

PETALING JAYA: Malaysia has become the preferred listing destination for Sunway City Bhd’s (SunCity) proposed real estate investment trust (REIT) although it is not ruling out other proposals for reverse takeovers in Singapore and Australia.

“The authorities in Malaysia are very proactive and doing their level best to get the more established companies to list in Malaysia,” SunCity executive director Datuk Jeffrey Ng told StarBiz yesterday.

Industry sources added that companies also had a more positive view following the revamp of main and second boards into a unified board, further improvement in processes and procedures as well as liberalisation of the 30% bumiputra quota in 27 service sub-sectors.

“Malaysia is definitely a preferred destination,” said Ng. “But we are not closing our doors to other opportunities.

If something very firm comes up, we will study it in the best interests of shareholders, one of which is GIC (Government of Singapore Investment Corp).’’ Early last year, SunCity was reported to be more keen on listing in Singapore where the tax regime is more attractive to REIT investors in relation to withholding tax.


However, the global financial crisis, which erupted in the later part of last year, has changed the scenario and investors turned risk averse.

In terms of mandate, this represents a fresh opportunity to select possibly new parties that can give the best terms. Under the old mandate, the global investment banks were Goldman Sachs and UBS while the local investment banks were CIMB Investment Bank and RHB Investment Bank.

“There could be new parties involving global and local investment banks,” said Ng. “Such a major fund-raising exercise will have to go into the global markets. At the end of the day, we will study what the most aggressive investment bankers have to offer.”

In the wake of early market recovery, SunCity is monitoring the indicators and will make every effort to get into the market as fast as possible. “We don’t want to miss out or be considered slow. We are watching the markets closely,” he said. “If there is a window of opportunity that fits our criteria, we will definitely implement (the listing).”

Among the factors involved are market timing and the need to balance yields in the REIT market and bond yields, which represent the cost of funds and is an indicator used in the calculation of REIT pricing. Investors would also weigh their options in the REIT and bond markets.

StarBiz recently reported that backed by assets valued at RM3.7bil, the proposed REIT listing is possibly the largest in the country. According to the report, about 75% of SunCity’s operating profit of RM175mil for the first half ended Dec 31, 2008, was from its property investment assets and SunCity was expected to receive total rental income of RM285mil this calendar year of which 70% would be from Sunway Pyramid Shopping Mall.

AmResearch managing director/regional head Benny Chew suggested that SunCity list its REIT at a point when property stocks were trading close to their net asset value.

“It will then be seen as a good alternative investment,’’ said Chew, who also expressed concern over the inclusion of diversified assets into the REIT as he considered suburban retail to be the main growth driver. “In general, they have to convince investors on their strategies to grow the fee income.’’

However, other analysts pointed out that SunCity’s proposed REIT would have assets with synergistic benefits in the integrated resort city, education, medical and office, retail, hotel and leisure theme park.

“Next year should be more exciting for the listing,” said a senior analyst with a foreign research house. “It will be cheaper as currently REIT yields are high on worries that rentals might weaken.”

ECM Libra Research acting research head Ching Weng Jin agreed it was time to dust the proposals previously kept on the shelf as market sentiment had changed compared with six months ago. “The properties are well-managed and rental yields are good. It is also more encouraging to list here in view of liberalisation of rules.”

By The Star (by Yap Leng Kuen)

Belleview launching projects worth RM500mil on Penang island

GEORGE TOWN: Belleview Group is launching residental and commercial properties on the island with an estimated gross development value (GDV) of more than RM500mil this year.

Group managing director Datuk Sunny Ho told a press briefing that the projects comprised 227 houses for Palmyra Residences in Balik Pulau, 1,300 condominiums at three high-rise schemes in Air Itam, 62 terraced and semi-detached properties in Bukit Dumbar, and the 1st Avenue shopping mall complex in George Town.

“We are launching now because of the lower raw materials prices. Steel, for example, is now about RM2,000 per tonne from about RM4,000 earlier this year.

“The prices of other materials have dropped by about 30% compared with earlier this year,” he said.

Banks were also offering attractive housing loans at an all-time low interest rate of 2.2% per annum, he said, adding that Belleview also believed the global economy was on its way to recovery.

The Palmyra Residences comprises double-storey terraced and semi-detached houses priced from RM373,000. The properties have built-up areas ranging between 1,625 and 1,976 sq ft.

In Air Itam, the condominium units under Melody Homes, All Seasons Park and All Seasons Place will be built on a 20-acre site, which will also house a 250,000 sq ft commercial complex.

In the third quarter, Belleview will launch 1st Avenue, a shopping mall with an estimated gross commercial area of 600,000 sq ft, next to Komtar.

By The Star (by David Tan)

Terang Jaya to run RM5b Segari project

CHINA, Abu Dhabi (UAE) and Saudi Arabia are expected to invest RM5 billion to develop a 354-hectare township based on tourism and Islamic concept, at Segari, near Lumut.

The three countries have appointed a local company, Terang Jaya Kayangan (M) Sdn Bhd to manage the project.

Terang Jaya Kayangan (M) Sdn Bhd, Chief Executive Officer Datuk Zainal Abidin Hamid said the new township would comprise a theme park, floating shops, shopping mall, hotel, education centres, hospital and a five star resort.

"The township will also comprise low cost, medium cost and exclusive homes plus government buildings.

"The site for the development is strategic as it is situated near the sea and surrounded by hills. It will certainly attract foreign investors, especially those from the middle-east countries, to buy their second homes here," he told reporters in Lumut today.

Zainal Abidin said the project was expected to start by June next year and completed in 2020.

He added that when completed, the new township would offer 40,000 job opportunities for professionals and non-professionals.

By Bernama

UEM Land in talks to get RM350mil

KUALA LUMPUR: UEM Land Holdings Bhd is in talks with two local banks for RM350mil in funds to finance its projects in Nusajaya.

Chairman Tan Sri Dr Ahmad Tajuddin Ali said the amount was scaled down from RM850mil it had sought earlier as banks were tightening their credit facilities in view of the current economic slowdown.

Tan Sri Dr Ahmad Tajuddin Ali (left) and Wan Abdullah Wan Ibrahim looking at the UEM Land Holdings Bhd 2008 annual report on Wednesday.

“The funds are for the second phase development of Puteri Harbour and also for East Ledang development,” he said after the group’s AGM yesterday.

Tajuddin said the group was projecting a 20% growth in revenue this year over the RM511.6mil revenue it chalked up last year, focusing on projects in Nusajaya in Iskandar Malaysia and also in Cyberjaya.

He said the group was also targeting for 6% return on equity this year, almost the same as last year, given the challenges it had to face as a result of the economic downturn.

“We admit that the group is facing difficulties now as the market is not doing well. However, we will try to achieve the target by implementing strategic and different marketing approaches,” he said, adding that the group might defer launching some of its projects to a later date depending on the market situation.

Tajuddin said currently, the group still had about 9,000 acres in Nusajaya for development and would proceed with the plans, design and approval process for future projects as it wanted to be ready once the market improved.

“Apart from Nusajaya and Cyberjaya, we are evaluating certain land in the Klang Valley for acquisition and will announce it once the sale and purchase process is done,” he said.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim added that the group was still looking for other new bankable projects and might seek more funds.

“Our current gearing is also low at 0.35 times for our property section. If we find other new bankable projects, we will apply for more loans, even going back to the same banks,” he said.

He also said although the market was challenging, the group still managed to get buyers, especially international buyers, for its property projects in Nusajaya.

By The Star

Sunway sells two foreign firms

KUALA LUMPUR: Sunway Holdings Bhd units Sunway Holdings (Vietnam) Sdn Bhd and Sunway Property (China) Ltd have agreed to dispose of Hochimex Nominee Co Ltd and its subsidiary for US$17mil (RM59.33mil) cash to Mega Methods Sdn Bhd.

Mega Methods is a wholly-owned unit of Sunway City Bhd.

Hochimex owns Sunway Hotel Hanoi Liability Ltd Co, which operates the Sunway Hotel Hanoi.

By The Star

Starwood to build two luxury hotels in Vietnam

HANOI: US developer Starwood Hotels plans to build two luxury hotels in Vietnam, including a 5-star resort on the central coast, the government said yesterday.

Starwood Hotels & Resorts Inc plans to build a 330-room Le Meridien hotel on China Beach, where US troops once went to relax on leave during the Vietnam War.

The stretch of coastline has become a magnet for tourism and five-star hotels. In addition, Hyatt and Marriott resorts are also planned.

By AP

Mudajaya gets Tune Hotels job in JB

KUALA LUMPUR: Mudajaya Group Bhd has been awarded a project by Tune Hotels Sdn Bhd for the construction of a hotel in Johor Baru.

Mudajaya announced yesterday that it received and accepted a letter of award on June 8 from Tune Hotels for the design, construction and completion of a low-cost, seven-storey hotel building with a contract value of about RM19.9mil

The contract is to be completed by March 19, 2010.

By The Star

Mudajaya awarded Tune Hotels project

MUDAJAYA Group Bhd’s (5085) wholly-owned unit, Mudajaya Corp Bhd, has accepted a letter of award from Tune Hotels Sdn Bhd to build a seven-storey low-cost hotel in Johor Baru for RM19.89 million.

The project is expected to be completed in March 2010 and to contribute positively to the earnings and net assets for the financial years ending December 2009 and 2010.

By Business Times

Hydro Hotel Penang for sale

The four-star Hydro Hotel Penang in Batu Ferringhi is up for sale for an estimated RM100 million, sources say.

The property, previously known as Hydro Majestic Hotel and before that Ferringhi Beach Hotel, was bought by the Mah family of Penang in early 2006 from Asia Pacific Land Bhd.

The 350-room property, now 28 years old, was bought for RM43 million.

It is understood that Hydro Hotel underwent a RM20 million facelift after the acquisition.

The Mah family, whose activities include property development, has been in the hotel business for over 10 years, with hotels in Australia and China.

Nick Mah Siew Chean, the executive director of his family's group of companies which include the Mercure Majestic Hotel in Kunming, did not deny that the property was up for sale when contacted several weeks ago.

He said that it was willing to consider the sale if the price was right.

One source said that the owners had voiced their intention to sell the property almost a year ago and that several potential buyers had viewed it.

However, Business Times could not reach Nick yesterday.

A few years ago, the family bought the abandoned hotel building in Jalan Kia Peng, Kuala Lumpur, completed it and ran it as the Novotel Hydro Majestic. The hotel was later sold to Pulai Springs Bhd.

In April this year, Pulai Springs, of which Nick is the executive director, sold the Novotel Hydro Majestic to The Nomad Residences Sdn Bhd.

By Business Times (by Vasantha Ganesan)

KL, JB among Asia most expensive cities

SINGAPORE: Kuala Lumpur, Johor Baru and Georgetown are among the cities earning the reputation as most expensive in Asia, according to a latest cost living survey.

KL is ranked 38th, JB 40th and Georgetown 42nd, said the survey on the 50 most expensive cities in Asia carried out by ECA International for 2009.

Globally, KL is ranked 210, JB 216 and Georgetown 218.
ECA, the world's leading knowledge and solutions provider for international human resources professionals, said strong currencies were pushing up the cost of living in Asian locations.

It said Tokyo remained the most expensive city in Asia, due largely to the appreciation of the yen against other major currencies, and joining the Japanese capital in the region’s top ten are Beijing (ranked 5th) and Shanghai (6th) as well as Hong Kong (7th) and Singapore (10th).


ECA regional director for Asia, Lee Quane, said the strengthening of Asian currencies was the dominant factor contributing to the region being more expensive for visitors than it was 12 months ago.

He said during the period, the yuan continued to strengthen while the yen had appreciated by almost eight percent against the US dollar, and many western currencies, including sterling, the euro and the Swiss franc, had weakened.

ECA carries out a Cost of Living Survey twice a year comparing a basket of commonly purchased consumer goods and services in over 370 locations worldwide.

ECA said Singapore had moved into the top ten most expensive locations within the region in spite of its weakened currency.

"Price rises have not slowed down as much in Singapore as in other parts of Asia," Quane said, adding that its data showed that while the prices of goods and services in China and

Malaysia had increased at half last year’s pace, in Singapore the rate was down by just 25 per cent.

Furthermore, currencies of locations previously more expensive than Singapore, notably London, Stockholm and Istanbul, had depreciated at an even faster rate than the Singapore dollar, he said.

These factors had contributed to Singapore becoming more expensive for visitors than many of the other locations in the survey, Quane added.

ECA also said the depreciation of the ringgit had made the cost of living cheaper for assignees heading to Malaysia.

The Mongolian capital, Ulaanbaatar (ranked 51), is the cheapest location in Asia, with goods and services approximately a third of the cost there than when purchased in Tokyo.

Overall, the city of Luanda in Angola kept its rank as the most expensive city in the world followed by Tokyo, and Maseru, Lesotho is the cheapest.

By Bernama

Bitter pill to swallow for Penang developers

The Penang government's move to take a firm stand in deciding once and for all the fate of four property developers who were said to be affecting George Town's status on the World Heritage List is commendable.

By deciding that all development projects within the heritage core and buffer zones must stick to an 18m or five-storey height ruling ahead of a United Nations Educational, Scientific and Cultural Organisation (Unesco) meeting in Spain next week (where the George Town issue is to be discussed), shows that we have not ceded our "sovereignty" to the UN body in deciding how development in our country and cities should proceed.

For the four affected developers - Asian Global Business (AGB) Sdn Bhd, Boustead Holdings Sdn Bhd, Eastern & Oriental Sdn Bhd and the Low Yat Group - the final decision that they must adhere to is one which may be a bitter pill to swallow.

Four firms had approvals from the Penang Island Municipal Council for projects exceeding the 18m limit well ahead of the date when George Town got its place on the World Heritage List in July 2008.
AGB's project is the Pier Hub @ Weld Quay, while Boustead is developing the Boustead Royale Bintang Hotel behind the general post office in Lebuh Downing. Eastern & Oriental is building an extension to the E&O Hotel while Low Yat plans to build a 23-storey hotel on Jalan Sultan Ahmad Shah, both in the buffer zone.

It has not been an easy ride for these companies since last November, when a bombshell was dropped that their "offensive" projects were now going to be a likely reason for George Town to be de-listed from the prestigious heritage map.

Besides having to contend with nervous and irate bankers, along with an army of demanding shareholders, these companies also had to deal with many trying situations on the ground in Penang, including heritage and conservation activists who have been very vocal in protecting the heritage city's listing status.

Today's state government "inherited" the problems which came in approvals granted to the three companies by the former administration. The mind boggles at how the three companies could be allowed to circumvent the five-storey height restriction which that same government had crafted as part of its heritage guidelines when applying for listing status.

The previous administration must assume some measure of responsibility for the situation the three companies have found themselves in. The current state leadership is not entirely blame-free either, since they were instrumental in granting the green light to the Low Yat group to proceed with its high-rise project by simply following a precedent set for the three companies .

There should no longer be empty promises made to investors by saying that "everything can be settled" and then leave these companies to sort things out.

Local authorities like the municipal council must be empowered to make decisions with no political interference, if Penang is serious in wanting to continue rejuvenating itself as an investment destination of choice.

It is not known if there are major financial casualties yet on the four firms caused from the uncertainly of the past months and the fact that some will now have to scale down their projects, re-position their products or in the case of one, abort their plans altogether.

Looking ahead, there is now an urgent need for a clear-cut blueprint on how the four development projects and subsequent ones in the heritage city are to be carried out.

Transparency by all parties is also key if the state is serious in wanting to keep George Town's place on the heritage list. It is apparent that the state government has decided to take into consideration an extensive mission report which has been compiled by two Unesco experts who visited Penang recently.

Among them is a suggestion that Malaysia introduce new legal provisions for the protection and management of its World Heritage sites.

Apart from stating in no uncertain terms that the AGB and Boustead projects must be scaled down in height, the report also recommends that efforts be made to reduce the impact of the E&O and Low Yat projects which lie in the buffer zone.

The question now is: Since the state has more or less "resolved" the outstanding concerns of Unesco about George Town's heritage enclave, is there a necessity to be spending public funds and have two Penang Island Municipal Council officials flying to Seville in Spain this month to attend the Unesco Heritage Committee meeting?

Probably not.

By Business Times

RM3bil project in Mersing

MERSING: Radian Starfish Sdn Bhd will develop Laguna Marina, a RM3bil integrated development on the seafront of Mersing.

The development, which has received the Department of Environment approval, involves land reclamation of 809.37ha scheduled to start this year.

“The project is expected to take 10 years to complete,’’ Johor Mentri Besar Datuk Abdul Ghani Othman said.

He said this after the inaugural meeting of Johor’s Implementation and Coordination Committee (ICC) under the East Coast Economic Region (ECER) development master plan.

Ghani is also chairman of the ICC, which oversees the implementation of projects in Mersing which is part of the ECER, which also covers Pahang, Terengganu and Kelantan.

He said the waterfront development would consist of star-rated and boutique hotels, waterfront homes, a water theme park, convention centre, cultural centre, private medical centres as well as commercial and business areas.

He said Radian would build a jetty complex for a new ferry service that would operate 24 hours and able to handle large capacity vessels, as well as a fishing jetty.

Ghani declined to divulge any information about Radian, which he said was a local property developer.

“Soon-to-be-launched tourism-related projects as well as the planned infrastructure development will transform Mersing into an even more popular tourist destination,’’ he said.

Mersing is the gateway to islands such as Pulau Tengah, Pulau Sibu, Pulau Rawa and Pulau Tioman. It is also the main eco-tourism gateway for the Endau-Rompin National Park.

Ghani said the Federal Government had allocated some RM215mil under ECER for three infrastructure projects in Mersing this year.

These include RM200mil for the construction of a 68km coastal road linking Mersing to Kg Sedili, RM12mil for the upgrading of a 56km track between Kg Kahang and Endau-Rompin National Park, and conversion of the roundabout in Mersing town into a traffic light intersection.

By The Star (by Zazali Musa)

Group refinances loan for Singapore project

SINGAPORE: A consortium comprising City Developments (CityDev), Dubai World and El-Ad Group said yesterday it had successfully refinanced a US$1.2 billion (US$1 = RM3.52) loan to develop a commercial project in downtown Singapore.

The consortium will raise the new funds via a S$800 million (S$1 = RM2.41) syndicate loan and S$400 million in secured convertible notes, the South Beach consortium said in a statement.

Singapore-based CityDev, southeast Asia’s second-largest developer, will take up S$195 million of the convertible notes.

By Reuters

Sime Darby in talks for development project in China

KUALA LUMPUR: Sime Darby Bhd has been invited by the Weifang People's Government to participate in the development of an economic development zone (EDZ) near Weifang City.

"The company is in discussions with the Weifang People's Government regarding the planning and development of this EDZ which will focus on enhancing Malaysia-China economic cooperation," it said in a filing to Bursa Malaysia on June 9.

"Amongst others, Sime Darby will assist the Weifang government in identifying suitable Malaysian companies to invest in this EDZ."

The company's statement came following Prime Minister Datuk Seri Najib Razak's official visit to China last week during which he announced that the conglomerate had been offered a multi-billion dollar development project in the Weifang prefecture city in China.

By The EDGE Malaysia (by Surin Murugiah)

CapitaLand arranges credit lines of US$3.7b

SINGAPORE: CapitaLand, South-East Asia’s biggest developer, said yesterday it has arranged for credit lines of up to 25 billion yuan (US$3.7bil) from two major Chinese banks to fund its China projects.

Bank of China and Industrial and Commercial Bank of China will provide the loans to the Singapore developer.

CapitaLand also said it “soft launched” a retail mall in Beijing on June 5 and that it would build an integrated development in Ningbo City called Raffles City Ningo that will comprise a mall, offices and serviced residences.

By Reuters

Maybank recommends Kinsteel, Lafarge

Investors should buy Malaysian steelmakers such as Kinsteel Bhd and cement producers including Lafarge Malayan Cement Bhd before construction projects accelerate next year, Maybank Investment Bank Bhd said.

The companies will be “prime beneficiaries of government infrastructure spending; the foundations are set for a recovery,” Maybank Investment said in a report today. “Projects are expected to gain momentum in 2010 after a year of awards in 2009.”

The government has unveiled two stimulus plans totaling RM67 billion (US$19 billion) to help revive growth as the nation nears its first recession in a decade. The economy may shrink as much as 5 per cent this year, the government said May 28, slashing its forecast in March for a contraction of 1 per cent at worst.

The central bank kept its key interest rate unchanged at 2 per cent last month, saying previous cuts and stimulus measures will contribute to a recovery later this year.
The cement industry should recover faster than steel as smaller-sized infrastructure and building projects “spark cement demand,” Maybank said.

By Bloomberg

Pavilion Group plans to expand to other places

The Pavilion Group is considering opportunities to replicate its success with the Pavilion Kuala Lumpur in other parts of the country and overseas.

Although the current soft market conditions may not make its expansion plans viable, owner Tan Sri Zainol Mahmood said the company was not ruling out having Pavilion developments elsewhere in the future.

“Having created a successful retail-focused integrated development model, we can confidently move into other new markets if the opportunity arises,” Zainol told StarBiz.

Pavilion KL is a privatised project by KL City Hall under its urban redevelopment programme to inject more life and wholesome activities into the city.

Developed by Kuala Lumpur Pavilion Sdn Bhd, a subsidiary of Urusharta Cemerlang Sdn Bhd, the four-part development is located on 12.6 acres at the intersection of Jalan Bukit Bintang and Jalan Raja Chulan.

It comprises the seven-storey Pavilion KL shopping centre, two luxury residential towers above the retail podium, a 19-storey corporate office block, and a proposed boutique hotel.

On the development concept, Zainol said the aim was to optimise on the project’s location on the last piece of prime real estate in the Bukit Bintang commercial district by adding more value to the project.

The project is located on the former Bukit Bintang Girls’ School premises. The school has since moved to Cheras.

“Pavilion KL has established itself as an iconic landmark and lifestyle destination for inner city living and shopping. It has certainly lived up to its status as the defining authority in city living, fashion, dining, and urban leisure,” adds Zainol, who is Urusharta Cemerlang chairman.

In its first year since opening for business in October 2007, the shopping centre recorded an estimated retail sales of RM1.56bil. With an average customer traffic of 83,000 a day, the shopping centre has to-date registered 48 million visitors.

With 1.37 million sq ft of net lettable space and 460 shops, Pavilion KL shopping centre was completed in September 2007. It is 100% tenanted and offers a mix of fashion, dining and urban leisure catering to the mid to upper-market segments.

Launched in 2004, the two blocks of Pavilion Residences were purchased by Kuwait Finance House at RM750 per sq ft.

Zainol said demand for high-end residences in the Golden Triangle was still good as more people were embracing inner city living.

The 19-storey office tower has also been completed and handed over to its owner, the KL City Hall.

Coming up next will be a six-star boutique hotel, Raffles Kuala Lumpur, targeted for opening in 2011. To be built at a cost of RM300mil, the hotel will offer between 180 and 200 suites.

On his market outlook, Zainol says: “Pavilion KL has established itself as an anchor of the community through its ‘totality approach’ to create a pedestrian-friendly shopping centre that in turn will transform KL into a ‘walk-able city’.

“We are happy with how the project has turned out and is upbeat of its potential.”

He added that plans were afoot to host more national and international events and promote Bukit Bintang as a must-see destination for tourists and locals.

By The Star (by Angie Ng)

Gurney Plaza plans budget hotel near shopping mall

GURNEY Plaza Sdn Bhd, via subsidiary G Hotel Sdn Bhd, is planning its second hotel on Penang island.

The company, which owns the five-star G-Hotel fronting Penang's famous esplanade, Gurney Drive, is looking to build a budget-cum-boutique hotel near its existing property.

The proposed 204-room hotel will be sited on a 0.4ha plot and the company is budgeting between RM70 million and RM80 million for the project, Gurney Plaza Sdn Bhd director Phuah Choon Meng said.

"We are awaiting approval from the local authorities," he told Business Times in Penang.
Phuah said the proposed hotel is set to be completed by 2010. Its developers are aiming at the rise in visitors to Penang island, since George Town made it to Unesco's World Heritage List.

"This proposed hotel project will be good for the Penang since we will be able to generate new jobs and more business for contractors and suppliers," he said.

Phuah said the proposed hotel will front Jalan Kelawai in Pulau Tikus and is within walking distance to the Gurney Plaza shopping mall and Gurney Park Condominiums.

"We are hoping to offer an unusual lobby and decor for the new hotel," he added, "along the lines of G-Hotel."

G-Hotel was last year recognised by the International Real Estate Federation (Fiabci) the best 2008 Hotel Development category at the Malaysia Property Award.

Last week, it emerged first runner-up in the hotel category of the Fiabci Prix d'Excellence Awards 2009 international property awards.

By Business Times (by Marina Emmanuel)

SP Setia, DutaLand, Sime Darby up in early trade

KUALA LUMPUR: SP Setia Bhd, DutaLand Bhd and Sime Darby Bhd share prices rose in early trade today. The three companies had been in the limelight since late last week after the first two inked agreements with China-based parties while Sime Darby was reported to have been offered a multi-billion dollar project in China.

SP Setia had entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd to set up a JV to carry out a mixed property development in the province of Zhejiang, China.

At 10.55am, SP Setia was up 4 sen to RM4.22 with 71,200 shares done.

The co-operation agreement marks the company's first foray into China, and its third venture overseas after Vietnam where it is developing Eco-Lakes at MyPhuoc Industrial, 42km north of Ho Chi Minh City and EcoXanh at Saigon Hi-Tech Park in District 9 of Ho Chi Minh City.

Meanwhile, DutaLand Bhd rose 10 sen to 72.5 sen with 20.3 million shares traded at 10.55am.

DutaLand inked an MoU with China-Boda Group to jointly develop two pieces of land in Hebei province, China and in Iskandar Regional Development Malaysia.

Meanwhile, Sime Darby added 15 sen to RM7.10 with 1.38 million shares done.

Sime Darby Bhd has been offered a multi-billion dollar development project in the Weifang prefecture city in China. The project, covering almost 700 sq km, will be one of the biggest ventures ever undertaken by a foreign company in China.

By The EDGE Malaysia (by Surin Murugiah)

SP Setia, DutaLand hit 52-week high

KUALA LUMPUR: Setia Bhd and DutaLand Bhd, which inked separate deals with China-based parties last week, rose to their 52-week high respectively today.

SP Setia rose to a high of RM4.24 before easing to RM41.8 as at 3.25pm, while DutaLand jumped to 77 sen before easing to 74 sen. DutaLand was among the most actively traded stocks with 32.9 million shares done.

SP Setia had entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd to set up a JV to carry out a mixed property development in the province of Zhejiang, China.

The co-operation agreement marks the company's first foray into China, and its third venture overseas after Vietnam where it is developing Eco-Lakes at MyPhuoc Industrial, 42km north of Ho Chi Minh City and EcoXanh at Saigon Hi-Tech Park in District 9 of Ho Chi Minh City.

DutaLand inked an MoU with China-Boda Group to jointly develop two pieces of land in Hebei province, China and in Iskandar Regional Development in Malaysia.

By The EDGE Malaysia (by Surin Murugiah)

Royale Chulan on track to hit occupancy target

The Royale Chulan Kuala Lumpur is on track to achieve 60 per cent occupancy at an average room rate of RM350 a night by December 2009.

The five-star property is expecting double-digit revenue growth or more than RM10 million in sales, general manager Leo Kuscher told Business Times in Kuala Lumpur recently.

The Royale Chulan, wholly-owned by the Armed Forces Fund Board (LTAT), was built for over RM200 million in two years.

Located on Jalan Conlay, it features a 300-room hotel with nine food outlets, 15 meeting rooms and a 1,000 capacity ballroom and 102 serviced apartments.
Kuscher said he is anticipating to recover the investments in five years depending on market conditions.

Since its soft opening in April, it has achieved 30 per cent occupancy.

Kuscher said he is targeting 45 per cent occupancy by end July.

"We have forward bookings for international conferences in July. According to our plan, we are already doing what we want to achieve. We are expecting a certain percentage of business from rival hotels riding on our legacy," Kuscher said.

The Royale Chulan is expecting 60 per cent of its income from the local market and 40 per cent from the Middle East, Europe and Asia Pacific.

The property will focus on three segments - corporate, leisure, and meeting, incentive, convention and exhibition.

Kuscher said it will spend 5 per cent of its revenue on marketing and promotions to be visible globally.

He is aiming to turn The Royale Chulan into a "must visit attraction" and an icon in Kuala Lumpur.

The property has elements of Malaysia's unique architecture with Terengganu influences.

Handcrafted wooden design elements are discretely located throughout the hotel. Carved wooden features were incorporated to enable circulation of the air and to keep the interiors of buildings cool. These carved pieces of timber also enable filtered light into the buildings. A dominant feature of the property is its glassed-in courtyard conservatory.

"There are challenges to run the hotel and serviced apartments in this slow economy. But a challenge is always nice especially when you are working for an excellent hotel. We have to market it to the world and sell it accordingly," Kuscher said.

The Royale Chulan, which will employ 450 people by December, is operated by Boustead Hotels & Resorts Sdn Bhd, a wholly-owned subsidiary of Boustead Holdings Bhd, which is majority owned by LTAT.

Boustead Hotels and Resorts has a collection of four-star properties such as The Royale Bintang Kuala Lumpur, The Royale Bintang The Curve, The Royale Bintang Resort and Spa Seremban, The Royale Bintang Penang (opening this year) and The Royale Bintang Surian The Curve (opening in 2010).

By Business Times (by Sharen Kaur)

Royale Chulan -- 5-star experience at half the normal rates

The Royale Chulan Kuala Lumpur may be the most expensive hotel in the Klang Valley but it is offering services and facilities of superior quality in tandem with its five-star rating.

Its rooms are priced at RM700 a night and the Royale suite at RM9,000.

As the hotel opened only in April, it is offering introductory rates now, which halve the price of the rooms.

For the serviced apartments, a studio unit is being offered at RM8,000 while a two-bedroom apartment is going for RM9,000.
The apartments are luxuriously furnished with sizable living and dining rooms and a well-equipped kitchen.

"We will launch a royalty programme next month to drive sales at The Royale Chulan. The royalty programme will give people a return on their investment. At times like this, people are looking for the best deal and we want to give them that," its general manager Leo Kuscher said.

Kuscher said he has no qualms running the hotel and serviced apartments although the world is in a depressed mood.

He believes there will be growth which will be accelerated by good service command and attitude from its staff and having facilities at par with international standards.

"If you want to be successful in today's business, you must offer excellent services. You must have passion which should be infectious to show that you are really dedicated and are totally immersed in every single detail of the property," Kuscher said.

The Austrian-born has been in the hospitality industry for 40 years and has gained a reputation for branding hotels and turning them around.

An example is The Royal Adelphi Seremban in Negri Sembilan, which he rebranded into a Royale Bintang property within three months.

When he was the general manager at The Andaman Langkawi, he repositioned the four-star property into a five-star super deluxe hotel and into one of Asia's best resorts through continuous service improvements.

Kuscher first came to Malaysia in 1984 where he served as the executive assistant manager of Holiday Inn Kuching in Sarawak.

He joined The Prince Hotel (now known as Melia Hotel) in 1986 as general manager and left for Hong Kong in 1988 to join The Regal Meridien Hotel in Kowloon as its resident manager.

He then moved to the Philippines and transformed Manila Hilton into Manila Pavilion, Manila's largest casino hotel, in 1989.

Kuscher returned to Malaysia in 1990 and joined The Crown Princess Kuala Lumpur before moving on to become the operations director for Federal Hotels International.

Kuscher was running The Royale Bintang Kuala Lumpur in March 2006. He had pushed this four-star property to achieve 86 per cent occupancy and average room rates of RM169 for November 2007.

By Business Times

Mah Sing encouraged by good sales of Southbay property

An artist’s impression of the bungalow unit to be launched by Mah Sing in Batu Maung.

GEORGE TOWN: Mah Sing Group Bhd is bringing forward to the next two to three months the launch of its bungalows for the RM1.35bil Southbay Penang mixed development project in Batu Maung.

The 76 bungalows, with an estimated gross sales value of RM200mil, were originally targeted for launch at year-end, chief operating officer Ng Heng Phai told StarBizWeek.

However, having sold 150 or about 75% of the first batch of 200 three-storey link houses in the first week of launch last month, Mah Sing decided to introduce the bungalows earlier, he said.

The units are priced from RM795,000 and sales have since reached 85% for the phase which has an estimated gross sales value of RM200mil.

“We expect the value of the link houses to appreciate by 15% before year-end,” Ng said.

With built-up areas ranging between 5,000 and 8,000 sq ft, the bungalows will be priced around RM3mil each.

“The bungalow project, known as Legenda, is a guarded and gated scheme on a 27.8-acre site,” Ng said.

Ng said the group was preparing to launch the RM900mil commercial component, Southbay City, on a 34.5-acre site at year-end.

“We plan to develop sea-fronting retail outlets. The commercial component will increase the value of the residential properties in the project,” he said.

Ng said the group was working with agents to market Southbay Penang overseas.

To be developed over five to seven years, Southbay Penang is Mah Sing’s biggest project to date.

“Our projects in the country have a gross sales value of about RM3.8bil, of which RM1.35bil will come from the Southbay Penang project,” Ng said.

“The projects in the Klang Valley and Johor Baru will contribute about RM1.6bil and RM800mil respectively,” he added.

“The bulk of Southbay Penang’s contribution should come in when we launch Southbay City,” he said.

By The Star

E&O gearing up for next economic upturn

A handout image of Seri Tanjung Pinang project. E&O will be launching two new projects this year.

Eastern & Oriental Bhd (E&O) group is positioning itself to capitalise on opportunities in the next economic upturn including holding back launches to time for the upturn as well as raising capital that could be used to make opportunistic acquisitions.

The group’s RM200mil proposed 1-for-2 rights of irredeemable convertible secured loan stocks (ICSLS) 2009/2019 in late May is part of a two-pronged strategy to raise a total of RM500mil.

Executive director Eric Chan told StarBizWeek in an interview that the RM500mil would strengthen the company’s balance sheet in the next two to three years “by increasing cashflow and lowering gearing.”

The money will be used to fund developments, opportunistic acquisitions such as strategic acquisitions of landbank, and general working capital and repayment of financial obligations, etc.

The suddenness of the economic downturn in 2008 and 2009 had impacted E&O’s business and strategies Chan said.

Under current weaker conditions, the premium niche property developer is focused on “managing the balance sheet rather than being only profit and loss-driven”.

In addition to the RM200mil from the rights issue expected to be completed by August, RM300mil will be raised from the disposal of non-strategic landbanks and cash generated from new launches.

To date, it has also raised just under RM100mil from the disposal of what it considers to be non-strategic landbanks including a property in the Semantan area of Kuala Lumpur from the unwinding of a joint venture with Selangor Properties.

As part of its “value preservation” strategy, E&O has been holding off launches and will only put these developments worth RM4bil in gross development value (GDV) into the market when the economy and demand for high-end property recover.

In fact, the company had not launched aggressively in 2007 and 2008, which had shown in its 2009 financial results, given that there was an average two-year lag for the value of launches to be manifested in earnings, said Chan.

The group has announced an unaudited RM37.7mil net loss for the financial year ended March 31, 2009 (FY09) compared with a net profit of RM128.9mil for FY08.

“But the value of the developments are intact. They are deferred but not cancelled,” Chan said referring to the RM4bil GDV of held-back projects.

The RM4bil appears to be readily realisable when the market recovers.

“These are ready-to-market projects. We have acquired all the approvals,” he said, adding that approvals for property development launches could take about a year.

But the upturn may be sooner than expected.

The company expects to take two to three years to reduce the high gearing it has built up during the downturn. Meanwhile, it is launching two projects this year.

These projects are the 440-unit St Mary service apartments in Kuala Lumpur near the Weld next month and 1,000 units of Seri Tanjung Pinang condos in September. The company expects these projects to bring RM600mil into the company’s coffers.

The estimated RM200mil from the rights issue, by E&O’s calculations, will bring down the company’s gearing from 0.8 times to 0.46 times, while the RM300mil from landbank disposal and new launches will bring gearing down to a negligible 0.16 times.

HwangDBS Vickers which maintains a “hold” call on the counter in its latest report says of the two expected launches, “We expect the takeup to be slow due to high incoming supply of high-end condos especially around KLCC over the next two to three years.

“However, St Mary’s initial launch will likely be priced at an attractive RM800 per sq ft versus the KLCC secondary market price of RM800 to RM950 per sq ft, along with a 10/90 financing scheme.”

But at the same time, the research house has raised its FY10 and FY11 earnings forecasts of the company by 6% to 18% after factoring in stronger takeups with property sales showing signs of bottoming out on anecdotal evidence.

On the rights issue last month, HwangDBS says that E&O will have more working capital to resume launches in the second half of 2009 from the estimated RM2.4bil GDV, which should help to replenish dwindling unbilled sales at RM150mil currently.

The research house also opines that concerns about the company’s high gearing “will abate” and calculates that gearing will improve to 0.53 times from 0.83 times at present.

“The funds raised will also ease pressure to sell assets at distressed prices – E&O still hopes to raise RM300mil from the disposal of non-strategic landbank,” it says.

By The Star (by LOONG TSE MIN)

Banks on why loan rates lag cut in key interest rate

FOLLOWING the reduction in the overnight policy rate (OPR) by 75 basis points to 2.5%, which subsequently went to down to 2%, banks have adjusted their mortgage rates to competitive levels that are below their base lending rates (BLRs).

A few aggressive ones had initiated the reduction in mortgage rates to as low as 3.2%–3.3% while others took some time to catch up. This led to questions on why some banks were not reducing their mortgage rates fast enough.

Banks surveyed by StarBizWeek say changes to loan rates were usually not done immediately after every revision of the OPR, as they had to complete several internal processes to consider the impact of any change.

Most banks, nonetheless, would revise their financing rates within a week after the central bank announced the changes to OPR which has been kept unchanged at 2% since February.

OCBC Bank (M) Bhd director and CEO Jeffrey Chew said while banks tried to respond as quickly as possible, they needed to balance all the factors involved in the pricing equation.

“We need to evaluate our overall strategy for running the business, cost of funds, marketing strategy for attracting new customers while retaining the existing ones, as well as sales and administration costs,” he says.

Alliance Bank Malaysia Bhd group CEO Datuk Bridget Lai says factors determining the pricing structure included the customer’s risk profile, collateral, loan tenure and market competition.

Ultimately, the bank’s goals are to protect the quality of its asset portfolio while driving up productivity, efficiency and service levels, she says.

RHB Bank head of retail banking Renzo Viegas says that upon an announcement of a cut in the OPR, the bank’s central treasury together with related business segments in the group would immediately carry out their analysis, following which the new rates would be keyed into the system.

“Changes are overnight with all the loans that have rates pegged to the BLR revised. Concurrently, the website and all point-of-sale interactions within the bank are also updated,” he adds.

While floating rates pegged to the BLR are easy to revise, given that adjustment is automatic, he says the fixed rate module is tougher due to profitability issues, as these fixed rates are already built into the pricing structure.

Both RHB’s conventional and Islamic banks revised their respective lending rates within a week after Bank Negara’s monetary policy change.

According to RHB Islamic Bank head of asset based finance group Zulkhairi Zabiri, property developers’ discounts, coupled with banks’ cheap financing, were attracting individuals to buy properties.

“We do see an upward trend in demand for this segment and we observe a similar trend for commercial properties,” he says.

Chew of OCBC concurs. He says companies are less sensitive to changes in the cost of funds as their need for loans depended more on demand for their products and services.

“If there’s strong demand, businesses tend not to mind slight increases in interest costs. The factors include credit availability, turnaround time and service delivery,” he says.

This was evident last year when most banks recorded significant loans growth despite the BLR being at a higher rate of 6.5%, as the business environment was conducive with individuals spending and companies investing.

By The Star (by Yeow Pooi Ling and Laalitha Hunt)

Going back to basics a better option

Although the rapid pace of expansion and the sheer size of companies have been idolised by many western economies, the latest global financial debacle that brought down many industry giants in the financial, automobile and manufacturing sectors, shows that being big does not necessarily mean greater efficiency and profitability.

On the contrary, many of the companies that are still staying afloat and have strong financial standing are the ones that have not gone on an overzealous expansion spree to flex their muscles around the various continents.

Instead of diversifying into various business sectors to prove their mettle, these companies have remained steadfast in what they do best and stayed focused on their areas of competencies.

By keeping to what they know best and not being caught up by the “borrowing and expanding game” that decapacitated most of the felled giants, it goes to show that companies should not expand just for the sake of expanding, or in the name of globalisation.

It looks like globalisation will have to take a back seat for a while as many of these “once huge” companies and conglomerates are still struggling for their survival.

The latest shake-up of the global economic and financial systems should be taken as a lesson for Malaysian corporations to avoid the temptation of growing too big, too fast – the path travelled by their western brethrens and one of the major contributors to the current financial quagmire.

Luckily for Malaysia, many of its companies, including property developers, have not gone overboard to expand into unknown territories overseas. Those who have done so have limited their exposure to markets that they are familiar with and only after due market intelligence studies are conducted.

Of course, there are some companies that have been “caught” after paying premium prices to take over some local companies for their offshore expansion. There have also been instances of property companies which went on a huge expansion binge by leveraging on bank borrowings to acquire huge landbanks and got caught when they bet on the wrong growth corridors.

These companies are still paying heavily for their mistakes after investors deserted their stocks.

Turning the table on these quick-fix expansion model and going back to the organic growth model that values prudence, manageability and efficiency looks like a better option these days.

Nurturing a company by focusing on its core competitive advantages and growing organically by harnessing its human resource expertise will be much healthier than blindly expanding into new areas without the right market knowledge.

Good property companies should be trendsetters in terms of product quality, innovative designs, pricing and service excellence.

Having a strong brand name and proven business model will certainly add value to a property company and raise its attractiveness in the eyes of buyers and investors, if the company is listed.

Property buyers are increasingly savvy these days and are more careful of which developers they buy from to ensure good quality products and timely delivery of their property.

Developers that are reputable and well regarded for their product quality and timely delivery usually have a strong following of loyal buyers.

Moreover, projects that are offered by these developers usually command a higher price premium over projects by other developers.

Although much effort and hard work are needed to build a strong reputation, all will be worthwhile at the end of the day when these efforts are translated into loyal buyers and good product take-up rate.

Those who have made it will be the ones to survive any bad glitches thrown their way, like the latest one that is brought about by the global financial meltdown.

Athough the market is likely to remain lacklustre over the next few months before it bottoms out later this year, industry players should harness their skills and competitiveness to prepare for the market upturn.

● Deputy news editor Angie Ng believes much can still be done by property players to lift the industry standards further and for them to vie for a bigger share of the global real estate market.

By The Star (by Angie Ng)

Builders press for stamp duty exemption

CONSTRUCTION players want the government to immediately exempt imposition of the new stamp duty as the sector is grappling with escalating cost.

"We cannot wait any longer. The matter has become very serious now," Master Builders Association of Malaysia (MBAM) president Ng Kee Leen told newsmen in Kuala Lumpur yesterday.

MBAM said the exemption should be for all service agreements including construction contracts of all types including consultancy contracts, operations and maintenance contracts, maintenance contract projects, and facilities management services contracts.

MBAM feels that construction contracts are not service agreements and therefore do not fall within the scope of "services" under Item 22 of the First Schedule of the Stamp Duty Act 1949.
On Wednesday, Ng told Business Times that the amendment to the Stamp Duty Act, which came into effect on January 1 2009, has resulted in construction cost rising up by 1-2 per cent.

As a result, ordinary service agreements are slapped with 0.5 per cent stamp duty of the total contract value, whereas previously the stamp duty on an ordinary service agreement was fixed at only RM10.

MBAM along with other construction players including architects and consultants hope to voice their grievance during their annual dialogue with the Ministry of Finance on June 11 2009.

He said a memorandum was forwarded to the Ministry of Finance in April but no action has been taken so far.

Ng said the combined effect of stamping all agreements at 0.5 per cent of a contract value is exponential since the nature of the construction industry has multiple levels of subcontrac-ting works.

"MBAM believes that the imposition of the additional stamp duty on construction contracts is inconsistent and counter productive to the policy and objectives set out in the stimulus package plan to help drive the economy out of the turbulent financial crisis by boosting the construction industry which is recognised as an important growth engine in the economy," Ng said.

He said many construction contracts to be executed were negotiated or awarded prior to the amendment where the project costing did not include the additional stamp duty.

"Imposing such much heavier stamp duty may cause serious cash flow constraints and reduced margins for the contractors and consultants in an already highly competitive market and therefore impact the viability of projects committed," Ng added.

By Business Times (by Rupinder Singh)

SP Setia’s maiden China project

From left: Tan Sri Liew Kee Sin, Datuk Seri Najib Razak, Hangzhou Ju Shen Construction Engineering Ltd legal representative Hu Baifu and International Trade and Industry Minister Datuk Mustapa Mohamed at the agreement signing ceremony in Beijing

PETALING JAYA: SP Setia Bhd has marked its first foray into China’s property market by inking a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd in Beijing, the company said in a statement.

The event was witnessed by Prime Minister Datuk Seri Najib Razak yesterday, who is in China on an official visit.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said the agreement would lead to the setting up of a joint-venture company to carry out a mixed property development project on a 25-acre site.

The land is located in the growth corridor of XiaoShan, Hangzhou in the Zhejiang province.

“The venture follows our first overseas foray into Vietnam in mid-2007 and is in line with our expansion to be an international property player,” Liew said in the statement.

By The Star

SP Setia enters China

The developer will build a mixed property development on a 10ha site in Hangzhou with a Chinese company

Property developer SP Setia Bhd has embarked on its maiden venture in China, teaming up with a local company for a mixed development in Hangzhou in Zhejiang province.

In a statement yesterday, SP Setia said it will develop the 10ha site together with Hangzhou Ju Shen Construction Engineering Ltd.

The joint-venture pact was sealed yesterday, witnessed by Prime Minister Datuk Seri Najib Razak, who is on an official visit to China.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said that the project will be its third overseas, after the EcoLakes and EcoXanh developments in Vietnam.
"This venture is in line with the group's expansion plans to be an international property player," he said in the statement.

Liew added that it was still premature to disclose details of the joint venture, such as the shareholding structure and development cost.

Hangzhou, about 180km southwest of Shanghai, is the capital of Zhejiang province and a key tourist and historic cultural city with a population of 6.78 million.

By Business Times

SP Setia, DutaLand trade higher

PROPERTY development companies, SP Setia Bhd and DutaLand Bhd, both traded higher today following their announcement on joint development ventures in China.

As at 10.35 am, SP Setia increased eight sen to RM4.18 while DutaLand rose five sen to 55 sen.

Yesterday, SP Setia announced that it had entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd for a 25-acre mixed property development in the province of Zhejiang.

The cooperation marks the start of the company's foray into China, and its third venture overseas after Vietnam, where it is developing the Eco-Lakes project at MyPhuoc Industrial.
Meanwhile, DutaLand sealed a memorandum of understanding (MoU) with the China-Boda Group to jointly develop two pieces of land in Hebei province, as well as in the Iskandar Regional Development (IRD) Malaysia.

DutaLand said the project in China would be developed over two phases.The the first would involve approximately 51.5 hectares and 100 hectares in the second phase.

The company said phase one comprised a mixed development project with a total estimated gross development value (GDV) of RM3.1 billion.

By Bernama

Qatar developer to sell some assets

DOHA: Ezdan Real Estate Co, Qatar's largest developer by market value, said yesterday it planned to sell some of its real estate portfolio as it seeks to raise funds for billion-dollar projects in the next five years.

Ezdan's deputy chief executive officer, Samer Wahbeh, said the company, which complies with Islamic law, would build schools, hotels, residential units and hospitals in Qatar, the world's biggest exporter of liquefied natural gas.

"We are still quite bullish about the market and have an aggressive expansion plan and we need to fuel this growth for the company," Wahbeh said in an interview.

To help finance new real estate projects, Wahbeh is in talks to sell about 4 per cent of its portfolio, worth about 600 million riyals, to a real estate investment trust based in Malaysia, Wahbeh said.

He did not rule out pursuing real estate projects outside Qatar.

By Reuters

Plenitude to increase land bank via proposed acquisition

KUALA LUMPUR: Plenitude Bhd unit Plenitude Permai Sdn Bhd (PPSB) has entered into a share sale agreement to acquire the entire equity interest in Intisari Sanjung (M) Sdn Bhd (Intisari) for RM24.5 million cash.

In a statement June 5, Plenitude said Intisari was the registered proprietor and beneficial owner of 327 separate parcels of leasehold land situated in Mukim Dengkil, Daerah Sepang, Negeri Selangor.

The land, Intisari's core asset, are adjacent to PPSB's existing ongoing mix development project at Taman Putra Prima, it said.

The company said the proposed acquisition would provide the Plenitude group synergy in its property development activities where Intisari was expected to contribute positively to its revenue and profit in the future years.

Plenitude executive chairman Chua Elsie said the proposed acquisition was in tandem with Plenitude's corporate vision of increasing land banks required for its property development business.

"As often-mentioned, we are always on the lookout for a good piece of land. We seize the opportunity when we see one and our healthy balance sheet and cash flow position are able to support us in such prospects," she said.

Chua said the land would be considered for future development of residential and commercial properties.

"It will not only provide our group with a new sustainable source of income but it will also enhance our position in the property development sector," she said.

By The EDGE Malaysia (by Surin Murugiah)

Naza TTDI to launch two new projects

SM Faliq SM Nasimuddin posing with a replica project of The Valley TTDI.

SHAH ALAM: Property developer Naza TTDI Sdn Bhd’s current unbilled sales of RM1.5bil will sustain the company for the next three to four years.

Group managing director SM Faliq SM Nasimuddin said that besides the launch of The Valley TTDI, the company would be launching two new projects in Kajang and Shah Alam this year.

The Valley TTDI in Ampang is an upmarket, exclusive residential development targeted at middle and upper end buyers seeking a premium green address in Ampang.

With a gross development value (GDV) of RM393mil, the project comprises double-storey linked villas and bungalows with prices starting from RM2.5mil.

“We managed to sell about 50% of the units during our recent soft launch. I believe if you continue to have a good track record and reputation, buyers will buy as they feel confident with the company and the products offered,” he said, adding that last year the company managed to chalk up sales of RM239mil.

Faliq said most of the buyers were locals and the company showcased the project in Singapore last month and would be going to Beijing later this month to attract more foreign buyers.

The TTDI Kajang will have a GDV of RM339mil while the GDV for TTDI Alam Impian is RM1bil. Both TTDI Kajang and TTDI Alam Impian targeted the middle-income group, he said.

Other ongoing property projects by Naza TTDI include Laman Seri Business Park (GDV of RM131mil), Laman Seri Business Suites (RM51mil) and Jayamas II (RM25mil) in Shah Alam, the 38-storey Platinum Park (RM466mil) and Menara Felda (RM640mil).

“We also have about 480 acres across the Klang Valley for our future developments. Though the size may be small, the locations of our land are quite strategic,” Faliq said.

To woo more buyers, Faliq said the company was teaming up with banks to provide more attractive loan packages such as having schemes like the 5:95 promotion, where buyers need only pay 5% for the downpayment and would only continue to pay the rest once the house was ready.

Naza TTDI, acquired from Danaharta in 2004, is the property arm of the Naza group. Established in 1973, the company’s first major property development was Taman Tun Dr Ismail in Kuala Lumpur.

By The Star (by EDY SARIF)

SP Setia enters China property arena

SP Setia Bhd has entered into a cooperation agreement with Hangzhou Ju Shen Construction Engineering Ltd for a 25-acre mixed property development project in China.

The signing was witnessed by Malaysia's Prime Minister Datuk Seri Najib Tun Razak who is on his first official visit to China, the company said in a statement today.

"This cooperation marks the start of the group’s foray into China and this will be our third venture overseas after Vietnam," said SP Setia's president and chief executive officer Tan Sri Liew Kee Sin.

The venture was in line with the group’s expansion plans to be an international property player, he said.
Liew said it was still too early to reveal more details of the joint venture including the proposed investment, shareholding of the parties involved and project cost.

The project, he said, is located in the growth corridor of XiaoShan and Hangzhou in the province of Zhejiang.

By Bernama

SP Setia makes first foray into China

Najib witnessed the signing of agreement between SP Setia Bhd and Hangzhou Ju Shen Construction Engineering Ltd. (picture source from The EDGE Malaysia website)

BEIJING: SP Setia Bhd has entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd to set up a joint-venture company to carry out a mixed real property development project on 25 acres of land in the growth corridor of XiaoShan, Hangzhou in the province of Zhejiang, China.

Prime Minister Datuk Seri Najib Razak, who is on his first official visit to China, witnessed the signing of the agreement today.

SP Setia was represented by its president and chief executive officer Tan Sri Liew Kee Sin while Hangzhou Ju Shen Construction Engineering Ltd was represented by its legal representative, Hu Baifu.

In a statement today, Liew said the co-operation agreement marked the group's foray into China.

This will be the company's third venture overseas after Vietnam where the company is developing EcoLakes at MyPhuoc Industrial Park, 42 kilometres north of Ho Chi Minh City and EcoXanh at Saigon Hi-Tech Park in District 9 of Ho Chi Minh City.

"This venture is in line with the group's expansion plans to be an international property player," Liew added.

However, Liew said it was still too premature to reveal more details of the joint venture, proposed investment and shareholding of the parties or the development with regards to costs, commencement as well as completion.

Hangzhou, located 180km southwest of Shanghai, is the capital of Zhejiang province as well as a key tourist and historic cultural city with a population of about 6.78 million.

With a population of about 1.16 million, Xiaoshan is the biggest district in Hangzhou and is located at its southern gate.

By The EDGE Malaysia (by Surin Murugiah)

Glomac plans property campaign

PROPERTY developer Glomac Bhd is organising a property campaign for both its residential and commercial development from June 6-July 31.

The campaign, Glomac 21st Anniversary Property Campaign, offers three residential township developments in Bandar Saujana Utama, Sungai Buloh, Saujana Rawang in Rawang and Sri Saujana in Johor, the company said in a statement today.

Also included in the campaign are commercial developments, including Glomac Galleria in Sri Hartamas, Plaza Kelana Jaya, Plaza Glomac(Kelana Jaya) and Glomac Damansara (Kuala Lumpur), Glomac said.

The company said its newly launched Glomac Cyberjaya is also open for registration.
The campaign will also feature high-end, exclusive full-featured freehold condominiums, located in the Kuala Lumpur City Centre area known as Suria Stonor, double storey terrace house called Seri Bangi in Bangi and exclusive semi-D’s and bungalows in Suria Residen, Cheras.

Several incentives are available to purchasers, such as a 100 per cent financing loan, zero per cent interest during construction, free sales and purchase agreement and loan documentation, early bird discount and RM500 for successful introducers.

By Bernama

DutaLand in MoU to jointly develop land in China, Iskandar region

KUALA LUMPUR: DutaLand Bhd has entered into a memorandum of understanding (MoU) with China-Boda Group to jointly develop two separate pieces of land in Hebei Province, China and in the Iskandar Development Region.

In a filing to Bursa Malaysia on June 4, DutaLand said the development of the 151.5ha piece of land in China would be developed over two phases.

"Phase 1 consists of a mixed development project with a total estimated gross development value of 6 billion yuan (RM3.1 billion)," it said.

The land in the Iskandar Region is located at Mukim Plentong, Johor Baharu and measures 15.25ha, it said.

DutaLand said the proposed joint venture would be carried out through the formation of two JV companies incorporated in China and Malaysia, respectively.

It said the company incorporated in China would have a proposed paid-up capital of 100 million yuan on an equity basis of 30:70 between DutaLand and Boda Group respectively.

The Malaysian company shall have a proposed paid-up capital of RM50 million with an equity participation of 70:30 between DutaLand and Boda Group, it said.

DutaLand and Boda Group are expected to sign a formal joint venture agreement within six months from the date of the MoU, it said.

By The EDGE Malaysia (by Surin Murugiah)

Sime Darby Property rakes in RM800m from 'parade'

The property arm of Sime Darby has earlier sold RM450 million worth of properties for the first two instalments of Parade of Homes

SIME Darby Property Bhd, the property arm of Sime Darby Bhd, said its ongoing Parade of Homes promotion has sold more than RM800 million worth of properties, which is by far its most successful Parade of Home instalment.

During the first two instalments, the company sold RM450 million worth of properties combined.

"Sales have been very good, given the current economic situation," said its managing director Datuk Tunku Putra Badlishah Annuar in Kuala Lumpur yesterday.

The promotion ends in the middle of this month.
Badlishah was speaking to reporters after the launch of Sime Darby's "Switch!" campaign, an energy-efficiency initiative targeted at more than 10,000 households in townships developed by the company in Shah Alam, Petaling Jaya, Subang Jaya and Klang.

In the first phase, Sime Darby is offering 100,000 energy-savings bulbs at a heavily discounted price.

Each household in Sime Darby townships like UEP Subang Jaya/ USJ Heights, Bandar Bukit Raja, Ara Damansara, Denai Alam, Bukit Jelutong and Putra Heights can purchase a box of eight energy-saving light bulbs at RM50 (retail price: about RM160).

"We want to help Malaysians become conscious of the energy choices they make. If we can switch people to the many small differences they can make at home every day, the cumulative savings will be dramatic - both to their own energy bills and the planet as a whole," he said.

Those who want to take part in the programme are required to register at www.simedarby.com/switch.

By Business Times

Sime's latest campaign attracts RM850mil home sales

Datuk Tunku Putra Badlishah (left) and Puvan Selvanathan at the launch.

KUALA LUMPUR: Sime Darby Property Bhd’s latest Parade of Homes campaign launched in early March has attracted sales worth RM850mil so far, surpassing the combined sales of RM450mil from its previous two home campaigns last year.

“Of the 955 new units offered, nearly 70% or 645 units (have been) snapped up by savvy home buyers as of last week,” said managing director Datuk Tunku Putra Badlishah Tunku Annuar.

This reflected that home ownership was still a priority despite the current economic slowdown, he told reporters after the launch of Sime Darby’s Switch!, an energy saving initiative yesterday.

The latest Parade of Homes campaign, which offers the largest display of properties under Sime Darby’s nine townships, will end on June 15.

Tunku Putra said the Switch! energy initiative was targeted at over 10,000 households in townships developed by the property group in Shah Alam, Petaling Jaya, Subang Jaya and Klang whereby each household was encouraged to exchange their old incandescent light bulbs (ordinary light bulbs) for energy-saving (ES) light bulbs.

Under phase one, Sime Darby will offer 100,000 ES light bulbs for exchange to its township residents where they could purchase a box of eight ES light bulbs at RM150 from the usual retail price of about RM160.

Tunku Putra said the Switch! programme was part of Sime Darby’s corporate social responsibility programme to promote and practise energy efficiency throughout its business operations.

“When our residents exchange 100,000 ES bulbs, they are helping to reduce carbon dioxide emissions by 65,000 tonnes,” said Puvan Selvanathan, Sime Darby Property’s chief sustainability officer.

By The Star

Builders: Stamp duty change stings

An amendment to the Stamp Duty Act has resulted in construction cost going up by between 1 per cent and 2 per cent, say builders

It was meant to make things easier. But a change in the law resulted in those in the construction sector having to pay more for the necessary paperwork.

"This sweeping change has resulted in construction cost going up by between 1 per cent and 2 per cent," Master Builders Association of Malaysia president Ng Kee Leen told Business Times in an interview recently.

Under Budget 2009, the government said it wanted to simplify stamp duty assessment. Industry players, who said they were not consulted, did not object because they thought it would be positive for the sector.

However, they found out that under the Stamp Duty Act amendment, there is a 0.5 per cent duty on construction services agreements that don't require collateral.

This covers consultancy contracts, operation and maintenance contracts, maintenance contracts and facilities services contracts.

The enforcement of the amendment to the Stamp Duty Act 1949 took effect on January 1 2009 by virtue of the Finance Act 2009.

This resulted in ordinary service agreement being slapped with 0.5 per cent stamp duty of the total contract value. Prior to this, the stamp duty on an ordinary service agreement was fixed at RM10.

"Now, the stamp duty office says the new rate of 0.5 per cent applies to second- and third-tier agreements too. This change of such drastic magnitude is causing serious cashflow constraints on contractors, consultant engineers, quantity surveyors and architects," Ng said.

A lot of construction-related contracts that will be carried out this year were negotiated before the law was changed. This means that the extra costs with the new duty rate were not taken into account.

The accumulative result of stamping all agreements (including sub-contracts and outsourcing) at 0.5 per cent of contract value is exorbitant.

Eventually, these extra but unnecessary costs will be passed on to the government and the public because all construction contracts are either government jobs or packages awarded by property developers in the private sector.

Malaysia's contractors have appealed to the government.

"We've forwarded a memorandum to Finance Ministry in April and the officials promised to look into the matter. So far, there has yet to be any positive action. Our members cannot afford to wait any longer. Time is running out and we face penalties for late completion of projects," Ng said.

Malaysian Institute of Architects president Lee Chor Wah concurred with Ng. "The amendment was supposed to simplify stamp duty assessment but it had increased cost of doing business instead," he said.

Already, more than half of its member architects had to take job cuts and pay cuts due to the tough economic climate.

By Business Times (by Ooi Tee Ching)

ING arm launches second property fund in China

SHANGHAI: Dutch financial group ING’s real estate arm has launched a second property fund in China and is targeting to raise US$500 million (US$1 = RM3.48) to US$750 million.

The fund will make nine to 10 investments with average deal sizes of US$50 million to US$75 million, Richard van den Berg, China head of ING Real Estate, said.

The fund is expected to return 20 per cent or more, he said.

The fund will include mainly residential development projects in first- and second-tier Chinese cities, but will also be on the lookout for acquisition opportunities in first-tier cities.

By Reuters

First Hard Rock Hotel in Malaysia to open in September

Solid: An artist's impression of the facade of the Hard Rock Hotel Penang.

HARD Rock Hotel Penang is offering fabulous packages to celebrate its opening come Sept 19.

Take a break and soak in the sun during the day, and watch live band performances and party during the night as Hard Rock Hotel Penang promises the ultimate fun-filled vacation for holidaymakers by infusing elements of Rock ’n’ Roll music and entertainment.

Featuring a modern structural design with a rockin’ edge and memorabilia from rock stars around the world, the hotel – the first Hard Rock Hotel in Malaysia – is offering an Opening Special Package that starts at RM368++ for Hillview Deluxe and RM418++ for Seaview Deluxe, valid from Sept 19 until Dec 18, 2009.

These packages include accommodation for one night, breakfast for two adults and two children (below 12 years old) and a Limited Edition Platinum Record Souvenir.

“To celebrate the opening of this hotel, we are offering the Opening Special to allow everyone to walk this journey of entertainment, fun and music with us. It’s more than just a vacation at Hard Rock Hotel Penang,” said Hard Rock Hotel Penang general manager John Primmer.

Located at the famous Batu Ferringhi in Penang, Hard Rock Hotel Penang boasts 249 chic rooms and suites with unprecedented view of the hill and sea.

All rooms are fully equipped with DVD/CD players, a 32-inch LCD TV, iPod Docking station, Wi-Fi connectivity, IDD telephone, in-room safe, mini bar, hairdryer, coffee- and tea-making facilities and iron and ironing board.

For an exceptional dining experience, the hotel features five food & beverage outlets, including the famous Hard Rock Cafe serving authentic American food; Starz Diner, an all-day dining restaurant featuring Asian and International Cuisine; and the Pizzeria by the poolside. To enjoy a chill-out session, relax at The Shack pool bar or at the Lobby Lounge.

A wide selection of facilities are also available at the hotel, including the Rock Spa, Lil’ Rock Kids Club, Teens Club, a fully equipped gym, Hard Rock merchandise stores and a 2,416 sq m (26,000 sq ft) free-form swimming pool – the largest swimming pool in Penang.

So get ready to rock! For reservations, book online at www.hardrockhotels.net/penang or call the hotel’s toll-free line at 1800-88-ROCK (7625) and request for the Opening Special Package.

By The Star

MRCB: We can bring down debt gradually

MALAYSIAN Resources Corp Bhd (MRCB) said it can manage its high debt level and expects to gradually cut it over the next few years as it wins more work and sells more properties.

The group's total debt of RM1.6 billion is almost triple its shareholders' equity.

MRCB group managing director Shahril Ridza Ridzuan said the high gearing has always been a matter of concern to the group.

"We currently have an order book of RM2 billion which should double by year-end and and this can help bring down our gearing to 0.5 times," Shahril told reporters in Kuala Lumpur yesterday after the company's annual general meeting.

MRCB chief financial officer Chong Chin Ann said the group's actual gearing is 0.5 times but ballooned to 2.5 times partly due to the Eastern Dispersal Link highway project in Johor Baru and some other office projects.

"By excluding the highway project, the debt will come down by RM540 million and will improve our gearing," said Chong.

The Eastern Dispersal Link and the Permai Psychiatric Hospital, also in Johor Baru, are worth RM1.2 billion.

In the first quarter ended March 2009, MRCB which is a builder and one of the country's biggest providers of office space, returned to the black when it made a net profit of RM153,000 compared to a net loss of RM57 million in the whole of last year.

Meanwhile, Shahril said the future of MRCB is bright with various projects lined up for completion.

This includes Jalan Duta-Ulu Klang Expressway, the Eastern Dispersal Link highway project and a multitude of projects at its flagship Kuala Lumpur Sentral.

At Kuala Lumpur Sentral, there are nearly 5 million sq ft of space under development right now in terms of offices, retail and serviced apartments, a new mall and a campus, among others.

By Business Times (by Zaidi Isham Ismail)