Swiss-Belhotel sees ringing success

The name Swiss-Belhotel International (SBI) may not ring a bell with most Malaysians, but it soon will.

This Hong Kong-based hotel management company, which is yet to open its first Malaysian hotel, will by end-2010 operate some 1,800 rooms in Malaysia and create between 2,000 and 2,500 jobs in the market.

It is also in talks with other developers that will lock another 1,000 rooms under its management by end-2011.

Given the anticipated openings, it is not surprising that SBI's director of projects and developments for Malaysia Carlos Velho expects that Malaysia will be the largest profit contributor to the group in two years.

"We are confident that Malaysia in the next two years will be the biggest net profit churner for the group," he said, adding that now the group's major contribution comes from Indonesia.

SBI manages 26 hotels in 13 countries. Another 26 are under development.

"We are negotiating for openings in Johor, Sarawak, Penang and Langkawi," Velho said, adding that it was close to signing on the dotted lines for all these deals.

The new projects are either four-star or five-star properties with 300 rooms on average and are slated for opening in 2011 and 2012.

Founded in 1987, Swiss-Belhotel today comprises Swiss-Grand (for five-star and boutique brands) and Swiss-Belhotel (for four- and five-star brands).

In more recent years, it created Swiss-Inn and Swiss-Express brands for three- and two-star operations.

The confirmed openings in Malaysia are Golden Palm Tree Sea Villas and Spa, Swiss-Belhotel Mont Kiara Suites and Residences, Swiss-Belhotel Zenith Kuantan and Grand Swiss-Belhotel Kota Kinabalu.

By Business Times (by Vasantha Ganesan) (Posted on 22 June 2009)

Swiss-Belhotel has hands full with new projects

Three hotels and a serviced residence are keeping Hong Kong-based hotel management firm Swiss-Belhotel International (SBI) awfully busy in Malaysia.

SBI, which will open the five-star Golden Palm Tree Sea Villas and Spa Sepang in December 2009, is also working on three other hotel projects which are under development in Pahang, Sabah and Kuala Lumpur.

In Pahang, SBI will manage a 515-room Swiss-Belhotel Zenith Kuantan together with a convention centre that can accommodate 6,000 people. The hotel, slated for opening in October 2010, forms part of the Putra Square Kuantan being developed by Zenith Aim Sdn Bhd.

SBI's director of projects and developments for Malaysia, Carlos Velho, is excited about the project as he feels the opening will fill an existing void in the state capital - the need for a five-star city hotel with convention facilities.

"There is no facility equal to this in Kuantan and its opening will bring the meeting, incentive, convention and exhibition business to the convention centre," Velho told Business Times in an interview.

Accordingly, Velho expects occupancy to touch 80 per cent in the first year of operations - a commendable figure for a new hotel. It hopes to garner an average room rate (ARR) of between RM180 and RM230 per night.

The project in Kota Kinabalu, Sabah is a 335-room sea-fronting five-star hotel. The hotel, to be named Grand Swiss-Belhotel Kota Kinabalu, is owned by China based i-Zenith International Pvt Ltd.

This hotel forms part of the 1.22ha Kota Kinabalu City Waterfront integrated mixed development by Sunsea Development Sdn Bhd. The project will also house a 400,000 sq ft retail space and another 100 units of designer suites.

To be ready in December 2010, Velho expects this hotel to draw a foreign crowd who will help fill up its projected 70-75 per cent average occupancy in the first year. It hopes to achieve an ARR of RM350.

The hotel complies as a green building, and thus expects that while cost of construction may be higher, its cost of operations will be lower from water harvesting and savings on lighting and air-conditioning (typically the highest cost after wages).

In Mont Kiara, a 584-unit Swiss-Belhotel Mont Kiara Suites and Residences is being built by a public-listed company.

Meanwhile, The Golden Palm Tree Sea Villas development in Sepang will open its doors December 2009.

Velho said that reception to the project was so good that it had to increase the number of villas to 399 from 366.

The project guarantees a return of 8 per cent in the first and second year and to gradually improve from the third year onwards.

The villas, which have all been sold, is leased back by the developer of the project Sepang Gold Coast Sdn Bhd's unit Sepang Duta Sdn Bhd.

Sepang Gold Coast is a 70-30 joint venture between CNI Corp and Permodalan Negeri Selangor Bhd (PNSB).

By Business Times (Posted on 22 June 2009)

Parent firm gives IOI Properties the edge

Artist’s impression of Pinnacle Collection. Datuk Lee Yeow Chor (inset) says the company is closely monitoring the Singapore property market to ensure the timely launch of the projects

IOI Properties Bhd will be leveraging on the financial strength of its parent, IOI Corp Bhd, to build a greater presence in the Klang Valley and Singapore property markets.

Since being taken private in April, the 95.33% subsidiary of IOI Corp has greater liberty to plan and decide on the direction and projects it wants to undertake.

IOI Corp group executive director Datuk Lee Yeow Chor said although the level of activities would not change much from what the company had done previously, it was in a better position to leverage on the group’s financial strength to facilitate funding requirements for land acquisitions and move projects ahead.

According to Lee, property is all about holding power and having the financial strength to hold out and mitigate against the prevailing challenging market conditions, including slow sales; are important for property companies.

Despite the severe market crunch in Singapore since February last year, IOI Properties proceeded with the construction of its Seascape Collection residences on Sentosa Cove. The construction of the project has reached 40% to-date.

The 1.44-ha Seascape project is a 50:50 joint venture between IOI Properties and its Singapore partner, Ho Bee Investment Ltd.

It comprises two eight-storey condominium blocks of 151 units of various sizes, tentatively priced from S$2,500 to S$2,800 per sq ft.

IOI’s second project in Singapore, the Pinnacle Collection – which is 65%-owned by IOI Properties and 35% by Ho Bee – will be undertaken by Pinnacle (Sentosa) Pte Ltd. The 2.12-ha site was tendered for S$1.1bil.

The 99-year leasehold land is the final piece of condominium land to be launched by Sentosa Cove and has a maximum permissible gross plot ratio of 2.6.

The site will have seven 18-storey blocks and one 20-storey block of luxurious condominiums. It is one of the two condominium parcels flanking the entrance of the marina leading into Sentosa Cove.

Lee said the launch of The Pinnacle would depend on the take-up for the Seascape residences.

IOI has plans for a third project in the city state, comprising medium to medium high-end residences on a 1.44-ha site near Novena Square and Orchard Road.

He said the company was closely monitoring the Singapore property market to ensure the timely launch of the projects to optimise their value.

“The completion of the two integrated resorts in Singapore later this year will be the catalyst for further economic growth and market upturn in the city state,” Lee said.

In the last two months, the market for medium to mid-high end property in Singapore had shown encouraging signs of an upturn, he added.

Things are also looking up for the Klang Valley property market and demand is expected to recover by year-end.

For the financial year ending June 30, 2010 (FY10), project launches worth RM580mil have been lined up in the Klang Valley, including in Bandar Puteri, Bandar Puchong Jaya and IOI Resort.

A new greenfield development, Sierra Puteri, a mixed housing development on 194ha in the Seri Kembangan-Cyberjaya area, is also in the pipeline for launch in the first quarter of next year. There will also be a 22-ha commercial precinct in the RM2bil development. Lee expects the company’s property sales to bounce back from RM630mil recorded last year to RM650mil next year. This year, it expects to turn in sales of RM610mil.

“We will also be placing more focus on investment properties. For FY10, we expect more than 15% of the company’s earnings to come from property investment and the balance from property development,” he said.

Last year, income from property investment contributed 10% to the bottomline of IOI Properties and about 22% to 25% of IOI Corp’s earnings.

General manager for group operations Lee Yoke Har said besides leveraging on the good location of the company’s land bank and strong branding, it also emphasised on good community relations and programmes to promote wholesome living and safe communities in all its townships.

It set up a dedicated community website, Myioi.com, in 2000 that has become a popular communication tool for residents of its projects.

Other initiatives include the IOI Privilege card, which is a discount card offered to residents when they patronise any of the participating outlets in the townships.

“The next project to be rolled out will be free WiFi within our townships and ‘intercom connection’ for residents via the 015 IP phone,” she added.

By The Star (by Angie NG) (Posted on 22 June 2009)

Higher demand for bricks in Johor

DEMAND for bricks – one of the main components in the construction of any building – was quite badly hit by the economic slowdown, but signs of improvement are showing, especially in Johor in recent months.

Major brick manufacturers in the state are now starting to receive orders from contractors and buyers, not only in Johor but also from Singapore.

Demand is also likely to get better in the second half of the year after a sluggish second half last year.

The price for common clay bricks is now 25 sen to 27 sen each and it is largely determined by the location of the brick plants and the distance between them and the projects.

It was priced at 35 sen when crude oil price was at US$110 per barrel in mid-2008 and also when demand for bricks started to decline.

Batu Pahat-based Kia Lim Bhd executive chairman Datuk Ng Eng Sos told StarBiz the Federal Government had played a crucial role in helping those affected by the current global economic downturn.

“The RM67bil economic stimulus package is helping to cushion off the effects faced by businesses and companies,’’ he said.

He said new public projects such as schools, hospitals, government staff quarters and police stations would help construction-related companies sustain their operations.

The private sector had already cut their spending in the second half of 2008 following the credit crunch in the United States and the financial crisis in Europe. The trend was likely to remain until year-end, he said.

Construction-related companies were pinning their hopes on public projects due to the softening of private and commercial projects, he added.

“What’s important now is the swift implementation of the projects by the relevant government agencies.’’

He said the company was also banking on the construction activities by both public and private sectors in Iskandar Malaysia to boost demand for its products.

Ng noted that several projects were already off the ground or would be implemented soon in the country’s first economic growth corridor despite the slowdown.

He said the assurance given by Prime Minister Datuk Seri Najib Razak that the Federal Government was committed to develop the area bode well for the construction sector in Johor.

Ng said demand for bricks from Singapore was also positive in recent months as there were several ongoing major public and private projects in the republic. “Traditionally, buyers from Singapore will choose brick manufacturers from Johor due to the long business relationship between the two areas and their close proximity,’’ he said.

Kia Lim is one of the few major producers of facing, common and paver bricks in Johor and currently has a 30% market share in Johor and Malacca. The company markets 80% of its products locally and exports the rest to Singapore.

For the financial year ended Dec 31 (FY08), it registered net profit of RM3.65mil on revenue of RM59.6mil compared with a net loss of RM1.32mil on revenue of RM49.34mil in FY07.

Another company, Claybricks & Tiles Sdn Bhd, sees equal demand for its bricks from the public and private sectors in Johor for this and next year.

Managing director Dr Tang Hai Chiang said the supply of bricks was mostly localised as the product was sourced by buyers from the same states.

“It has to do with the logistic and transportation issues as these two factors could determine the price of bricks in the market,’’ he said.

Claybricks & Tiles is the largest maker of fine quality clay products in Malaysia, producing 10 million bricks monthly at its plant in Kota Tinggi.

It produces facing bricks (60%) and common and paver bricks, and about 90% of its products are exported to Japan, Taiwan, Hong Kong, Singapore and the Middle East.

“Common bricks are essential items in the construction industry and I personally don’t see any substitute,’’ said Tang.

Like Ng, Tang said that demand for common bricks in Johor had improved much in the first half of 2008 and likely to get better in the second half.

Many did not know that the prices of bricks in the market were actually determined and controlled by building dealers and not the manufacturers, he said, adding: “The prices can fluctuate five to six times a year and they also depend on demand and supply.’’

However, Tang said the prices in Malaysia were still low and the export business was good because of the abundance of raw materials and low labour costs.

Tang said in the last 10 years there were about 400 common brick manufacturers in the country but 50% of them had since closed down due to stiff competition. In Johor there are only 10 left now.

By The Star (by Zazali Musa) (Posted on 22 June 2009)

Construction sector shows positive signs

The construction sector in Johor has been showing positive signs in the last three months after experiencing a slowdown in the second half of 2008.

Sin Sin Construction Sdn Bhd managing director Tan Wee Hiong said this was due to the implementation of new public projects in the state.

“The government-led projects are bringing relief to the construction industry during the current slowdown as the private sector had cut its spending,’’ he told StarBiz.

Tan hoped the relevant government agencies would be more efficient and swift in implementing the projects under the second stimulus package as they would benefit the construction industry.

He also hoped that the private sector would not further cut their spending as both the public and the private sectors played an important role even during a recession.

Banks in Malaysia had also played a major role by continuing to assist businesses and companies financially, Tan said, adding that low interest rates for housing loans offered by banks and special packages by housing developers also helped developers to launch new properties.

“It is okay if the number of units launched is smaller unlike during good times. Its better to have something rather than not having anything at all.’’

Tan said the slowdown in the second half of 2008 had stabilised prices of building materials, including common bricks.

He said Singapore also played an important role in Johor’s economic performance as both countries were closely linked economically.

Despite the recession, there were several ongoing major public and private projects in Singapore and demand for building materials from Johor for Singapore customers was still “healthy”, he said.

“When Singapore fully recovers, Johor will be the first to benefit as the city state needs more workers and Johor is traditionally the main supplier of labour there,’’ Tan added.

By The Star (by Zazali Musa) (Posted on 22 June 2009)

Boustead, Khazanah to bring Kidzania to Malaysia

The Boustead Group and Khazanah Nasional Bhd will be bringing the increasingly famous Kidzania theme park to Malaysia.

The two parties are expected to sign an agreement next week to build the indoor theme park in Mutiara Damansara, Petaling Jaya.

Kidzania is a family entertainment centre, typically comprising a child-sized replica of a real city.

The city is managed by children and has buildings, shops, streets and vehicles.

The park is to allow children to learn about the adult world by actually engaging themselves in various professions within the 'city'.

The theme park was first created by theme park innovator, Luis Javier Laresgoiti and is the idea of Mexican businessman Xavier Lopez Ancona.

There are now an increasing number of Kidzania parks around the world, including in Mexico City, Monterrey, Tokyo, Jakarta while others are being planned for Dubai, Lisbon, Barcelona, Santiago and Seoul.

By Business Times (by Mustapha Kamil)

Planning a better city with the people

For cities to thrive and stay relevant, it is important to have in place well thought out and clearly defined vision and master planning. And these need to be communicated to the local population to ensure they participate in the process of city building.

It is imperative for the local administration to engage with the local population and other stakeholders so that they can communicate their needs and ideas on the important aspects that should be included in a city’s planning.

The local dwellers and stakeholders should be invited to contribute their views before decisions on a city’s future are made.

The local government should seek public opinion and consensus by way of public display of draft local and state structure plans. Any concerns should be properly addressed before the plans are gazetted into law.

In many parts of the world, including Australia, residents are invited to sit on the planning committee for their area so that they have a hand in deciding what development can and cannot take place there.

At the end of the day, all stakeholders (including the local population, property owners, business operators and workers) should feel comfortable with the local structure plans and projects, and thus give their blessings.

Most of the time, plans that have consensus support and are for the good of the local community and general population, will work out quite well.

In the case of George Town, although the Local Plan had been completed some time back, it has yet to go on public display although this was initially scheduled for late last year. It is understood that the plan is still being amended and the public has not been consulted yet.

With George Town literally bursting at its seams with perpetual traffic jams, an inefficient public transport system and a dire need for transparent and workable redevelopment plans for the inner city and the peripherals, the sooner the local plan goes on public display, the better it is for the plan to adequately address the people’s concerns and work successfully.

To ensure the successful implementation of the local plan that has been gazetted into law, the local administration should be decisive and proactive in its implementation. It should also define the perimeters of development plans, including density, plot ratio, project type and the maximum height for buildings, among other things.

Indecisiveness or wavering on the part of the local administration will give rise to exploitation by some interest groups and other stakeholders may refuse to take part in the implementation process.

To ensure that this does not happen, the administration should be transparent. It must update people on any changes in the plans and seek their views before going ahead.

As land matters are under the purview of the state governments and the local authorities, the local administration has the full authority to come out with their own vision on how their cities should be developed and this includes housing projects, community amenities and infrastructure projects.

The growing population and rural-to-urban migration are some of the contributory factors that are straining cities around the world, and planners should be clear about where the city is heading.

Cities need a raison d’etre, or reason for being, to know specifically how they can be shaped in the future. Most Malaysian cities have not started out with clearly defined visions and master plans. Instead, they have sprung from the people’s needs and economic activities.

With the rapidly changing environment and lifestyles, it is perhaps time for our cities to re-invent and create niches for themselves to ensure greater comfort for city folks and to attract more visitors. There should be a clear understanding on how the city’s needs can be addressed as the population grows and the people’s requirements shift.

Well-planned infrastructure, especially a well-integrated and complementary public transport system and good real estate projects, will add value to the living environment and quality of life. The participation and cooperation of the private sector is paramount to the success of these initiatives.

By adopting a new paradigm of trust and transparency, coupled with clearly defined vision and direction on the part of the local government, industry players will be encouraged to support and participate in these projects.

As in all things, cities will grow old and decay, and it is important to inject new features and redevelopment plans to revitalise the cities and ensure that they move with the times.

On this score, Kuala Lumpur and Penang both have some common traits in that they need to revitalise and redevelop the older parts of their inner cities to inject more life and vibrance, especially during after-office hours.

Inner-city living will become trendy again if the local authorities encourage quality residential and commercial projects that blend in with the local environment.

● Deputy news editor Angie Ng hopes to see greener Malaysian cities through tree planting and the opening of parks to allow city folks a reprieve from the rising temperature.

By The Star (by Angie Ng)

Logistics facilities demand a boost

Areas with excellent road network in Klang Valley are hot spots for industrial property sector.

The performance of the industrial property sector will be led by demand for logistics cum warehousing facilities in specific areas in the Klang Valley.

According to CH William Talhar & Wong’s (WTW) first quarter 2009 property market report, these areas include Klang, Shah Alam and more recently, Kota Damansara that have an excellent network of roads and access to major highways – a prerequisite for international logistics providers.

“Some hot spots identified for the industrial property sector include Temasya Industrial Park in Glenmarie, Bandar Sultan Sulaiman Industrial Area in Klang, Port Klang, Section 15, Shah Alam and Selangor Science Park in Kota Damansara,” the report says.

Some notable industrial transactions that took place last year included a 2.6-ha industrial site at Seksyen U8 Shah Alam that was disposed at RM11.15mil and a 9.84-acre industrial site at Bandar Sultan Sulaiman in Klang was acquired at RM27.1mil.

“In 2008, a few manufacturing plants ceased operations including Ford Malaysia’s production and assembly facility in Seksyen 15, Shah Alam, Panasonic’s Sungai Way facility after the operations were moved to Seksyen 16, Shah Alam and the closing of Hitachi Consumer Products’ manufacturing facility in Bangi,” it says.

On its outlook for this year, the report notes that the Malaysian economy is not expected to be fully insulated from the global downturn.

“The full heat of the global crisis is expected to be felt in the second half of 2009 with the market continuing to remain soft. Consumer confidence is not expected to improve with the state of the economic outlook (eg: loss of jobs, pay cuts and reduction in manufacturing output),” it says.

A cautious mood will prevail in the market as property purchasers expect a reduction in prices while developers either opt to postpone, delay or not launch new projects or new phases.

However, with the reduction in interest rates, mortgage payments would be more affordable, it says.

Malaysian Industrial Development Authority in an overview on industrial projects approved from January to March reports a decrease on the number of new projects approved during the period at 128 compared with 548 new projects approved in the same period last year.

The total capital investment from January to March this year for new approved projects is RM4.34bil compared to RM41.99bil it recorded in the same period last year.

National Property Information Centre in its latest Industrial Property Stock Report Q1 2009 says that in the quarter under review, the number of industrial property overhang remains unchanged at 670 units recorded in the previous quarter but the overhang value increased by 2% from RM342.41mil to RM349.1mil.

On a quarter-on-quarter basis, industrial overhang units decreased slightly by 1.3% from 679 units while their value dropped by 0.7% from RM351.42mil.

These units remained unsold in the market for more than 24 months after their initial launch for sale.

Some 40% (269 units) of the overhang indurtrial units are priced between RM250,000 and RM500,000 a unit, while 25.1% (168 units) of them cost RM250,000 and below.

For industrial units that are under construction and remain unsold, the number increased 3.5% from 656 units in the previous quarter to 679 units. Likewise, it said compared to the corresponding quarter of 2008, the number of unsold units increased substantially by 48.9% from 456 units.

In the quarter under review, the number of unsold units that were not under construction remained unchanged at 711 units recorded in the previous quarter.

On the other hand, the quarter-on-quarter analysis shows that the unsold units in this category increased by 57.6% from 451 units.

“Approximately 56.5% (402 units) of the total number of the unsold and not constructed industrial units have been in the market for more than 24 months after their initial launch for sales,” it says.

From the national total, 45.9% of the units (326 units) were priced between RM250,000 to RM500,000 while 39.9% (284 units) were in the RM250,000 and below bracket, the report points out.

By The Star (by Edy Sarif)

Workplace solution for small businesses

WHITE Space Sdn Bhd, an all-in-one workplace solution provider, plans to expand its boutique business centre service beyond the Klang Valley next year, given the rising number of micro-businesses being set up nationwide.

Leslie Jeyam (left) and Jason Chow at White Space office at Solaris Mont Kiara.

Executive director and co-founder Jason Chow says more young entrepreneurs are running businesses at home or in rented offices.

However, the high office rentals in strategic locations in city areas are always the main concern for such business operators.

“We aim to help them reduce their operating costs by providing the services of a fully equipped business centre,” he tells StarBizWeek.

“It is a good opportunity for us to expand during the economic downturn as business owners are looking seriously at cost cutting.”

Established in March, White Space provides a dedicated business address, streamlined call and fax forwarding, meeting room and conferencing facilities, business support services as well as IT telecommunications infrastructure.

Chow’s partner and company executive director Leslie Jeyam says they invested about RM1mil in infrastructure, IT and interior design for its first outlet at Solaris Mont Kiara, Kuala Lumpur.

“We chose Mont Kiara because office rental is expensive in this area, so our potential clients will be able to see better cost savings,” Chow says.

He adds that the company is looking to expand to Penang, Johor Baru, Seremban, Kuala Terengganu, Kota Kinabalu and Kuching.

“Within the Klang Valley, we plan to open four more outlets this year. However, the locations must be in vibrant residential areas,” he says.

Therefore, he says residential areas near business districts such as Subang and Ampang will be the potential places for White Space’s new centres.

He adds that the company wants to strengthen its strong footing in the country first before entering overseas markets like Thailand and Singapore.

Facilities at the 2,000-sq-ft White Space outlet include four meeting rooms, a waiting hall and reception service, says Jeyam.

Its one-stop service package starts from RM99 per month.

“We want to bring a new business concept to customers,” Jeyam says, adding that White Space will continue to improve and upgrade its services.

“We are looking to have more than 200 clients by year-end,” he says.

Potential clients include companies that want full office facilities without the fixed cost of having a permanent office away from their headquarters, he adds.

Chow sees a bright future for all-in-one business centres as long as there are companies that do not want high overhead costs and those who need temporary office facilities.

“We see our annual equity return at 30% and above and we are looking at a business growth rate of 50%,” he says, declining to disclose revenue projections.

By The Star (by Rachael Kam)

SP Setia shares down 12.3pc on lower Q2 profit

Shares of SP Setia Bhd, the country's biggest property developer, slid 12.3 per cent yesterday after its second quarter net profit came in below market expectations.

It fell 54 sen to RM3.84, making it the second biggest loser in the stock market.

Its net profit for the quarter ended April 30 fell by 16 per cent to RM40.5 million because of lower profit margins as the price of building materials rose.

"It is on track to meet its RM1.1 billion sales target (this year) but at the expense of profit margins," analyst Ong Chee Ting of Maybank Investment Bank said in a report yesterday.

He retained a "sell" call on the company but raised his target price to RM2.90 from RM2 given recent market liquidity and good sales achieved.

Credit Suisse downgraded the stock to "underperform" from "neutral", saying that despite strong property sales, its profit margins are under pressure.

By Business Times

IJM-LFE joint venture secures Abu Dhabi job

The joint venture between IJM Corp Bhd and LFE Corp Bhd has received a AED318.38 million (AED100 = RM99.28) contract from Tamouh Investments LLC of United Arab Emirates for reinforced concrete substructure and superstructure works.

The project, under the first phase of Plot 1, Zone E2 hotel development at Al Reem Island, Abu Dhabi, is expected to be completed on February 28 next year.

The joint-venture company is 70 per cent owned by IJM Corp’s wholly-owned subsidiary, IJM Construction Sdn Bhd (Abu Dhabi Branch), and 30-per cent owned by LFE Corp's wholly owned subsidiary, LFE Engineering Sdn Bhd (Abu Dhabi Branch).

By Business Times

SP Setia falls on profit drop, rating cut

SP Setia Bhd, Malaysia’s biggest property developer, fell to a 10-day low after saying fiscal second-quarter net income dropped 15 per cent and JPMorgan Chase & Co downgraded the stock.

The shares slid 3.7 per cent to RM4.22 at 12:30pm break, set for the lowest level since June 9. The stock is the worst performer on the benchmark Kuala Lumpur Composite Index today.

The shares, which have surged 36 per cent this year, outpacing the benchmark index’s 21 per cent advance, have taken into account the outlook for earnings and the prospects for a liberalisation in government policies that may benefit the property industry, JPMorgan said in a report today.

“The good news has been priced in,” Simone Yeoh, an analyst at JPMorgan, said in the report. The shares have outperformed and trade at 25 times 2010 expected earnings, she said.

SP Setia’s price-to-earnings multiple is double the average of 13 times among Malaysian property stocks in Malaysia, according to data compiled by Bloomberg. Yeoh cut her rating on the company to “underweight” from “neutral” and lowered the target price to RM3.60 from RM3.80.

SP Setia in April led a rally among Malaysian property developers that made them the country’s best performers for that month, after central bank data showed loans approved for home purchases in March jumped the most in at least a year.

Luring Investors

SP Setia’s profit in the three months ended April 30 dropped to RM40.5 million because of lower profit margins as the cost of building materials rose.

While the company’s sales momentum has picked up, “aggressive” incentives are putting profit margins under pressure, according to the JPMorgan report.

SP Setia raked in RM803 million of sales as at June 15, as the company, in its property campaign, absorbed buyers’ stamp duties, legal fees and interest costs during the construction period.

The company is boosting sales by “sacrificing margins,” Ong Chee Ting, an analyst at Maybank Investment Bank Bhd, said in a report today. The shares are “way too expensive,” he said.

By Bloomberg

IJM joint venture wins hotel job in UAE

KUALA LUMPUR: IJM Corp Bhd said its joint venture has won a RM303mil contract from Tamouh Investments LLC to help build a hotel at Al Reem Island in Abu Dhabi, the United Arab Emirates.

The contract, awarded to a company owned by IJM and LFE Corp Bhd, involves the construction and completion of one block of 34-storey five-star hotel tower on three-storey podium, a 24-storey hotel apartment on a three-storey podium, two levels basement carpark and other associated foundation and external works.

The package one project is expected to be completed on Feb 28, 2010.

The joint-venture company is 70:30 owned by IJM Construction Sdn Bhd and LFE Engineering Sdn Bhd, which are wholly owned units of IJM and LFE Corp respectively.

By The Star

IJM shares up on Mideast delight

IJM Corp, Malaysia’s second biggest construction company, rose for the first time in seven days after OSK Research Sdn Bhd raised the stock rating on the builder’s RM303 million (US$86 million) Abu Dhabi project.

The shares added 1.8 per cent to RM5.55 at midday break, bound for the largest increase since June 10.

The “Middle Eastern delight” led Jeremy Goh, an analyst at OSK Research, to upgrade IJM to “trading buy” from “neutral” and raised the stock’s target price to 6.10 ringgit from 6.0 ringgit.

Petaling Jaya, Malaysia-based IJM said yesterday a joint venture owned by the company and LFE Corp won the contract to build a hotel in Abu Dhabi from Tamouh Investments LLC. The project is expected to be completed by the end of February next year, IJM said.

“We expect subsequent awards to flow over the coming months” following this contract, said Goh, who also raised his forecast for IJM’s 2010 and 2011 profits to RM318.9 million and RM353 million, respectively, on the expectation that the builder will secure more projects worth about RM1.7 billion by the end of the year.

“This amount is expected to include two contracts that could be substantial in value,” Goh said. He also expects IJM to participate in the Light Rail Transit extension project in Kuala Lumpur.

By Bloomberg

Halal hub project to help KHSB return to profitability

KUMPULAN Hartanah Selangor Bhd (KHSB) is set to return to the black by end-2009 as it starts to gain from the development of its industrial properties, especially the Selangor Halal Hub (SHH) in Pulau Indah, Klang.

The property arm of the state's investment firm Kumpulan Darul Ehsan Bhd also plans to dispose of non-strategic properties to improve its financial standing after suffering a loss of RM35 million in the last financial year ended December 31 2008.

"We have fully sold Phase 1 of SHH comprising 88ha of industrial land within four years, worth a total of RM133 million," said its executive chairman Datuk Abdul Karim Munisar.

He said Phase 1 is expected to bring in direct investments worth more than RM1 billion, creating about 2,000 new jobs.
Abdul Karim said major players that will operate in the area include Ramly Food Industries Sdn Bhd, Felda, Mara and PML Dairies.

"All facilities have been put in place. It's only a matter of time before these companies start construction of their facilities. One company has started construction and is expected to begin operations in two years," he said.

Speaking to reporters after KHSB's annual general meeting in Shah Alam, Selangor, yesterday, Abdul Karim noted that reclamation works for Phase 2 which involves 97.6ha of industrial land with a gross development value (GDV) of RM234 million have been completed.

"Negotiations with potential foreign and local investors are still ongoing, and we expect to conclude sales worth at least RM70 million this year," he said.

Abdul Karim said construction of the South Klang Valley Expressway is also expected to enhance the accessibility to Pulau Indah and will be a catalyst of growth for the Pulau Indah development.

"We expect to fully sell off Phase 2 within five years," he said.

With a land bank of more than 1,600ha, KHSB, together with Kumpulan Darul Ehsan, are also looking into the possibility of venturing into sand and minerals exploration and exploitation to diversify its cash stream.

"Besides the 1,600ha of land we have now, the state agency is expected to transfer another 2,000ha of land to us to help improve the cash flow of the company in the future," he said, adding that the firm is in the midst of acquiring a strategic land in Petaling Jaya for a proposed mixed development with a GDV of RM600 million.

For financial year ended December 31 2008, the company's revenue dropped 60.08 per cent to RM96.1 million from RM240.8 million previously.

By Business Times (by Azlan Abu Bakar)

KHSB banks on land sale, halal hub

SHAH ALAM: Kumpulan Hartanah Selangor Bhd (KHSB) is set to return to the black in the current year ending Dec 31 (FY09) after it disposes of land and reaps profit from its ongoing projects.

“Our focus will be on industrial properties, particularly in the Selangor halal hub project on Pulau Indah, Klang.

“We also plan to dispose of non-strategic land,” executive chairman Datuk Abd Karim Muniar said, without elaborating.

Speaking after a shareholders’ meeting here yesterday, he said the property unit of Selangor’s state investment arm Kumpulan Darul Ehsan Bhd had already locked in sales of RM133mil for its Selangor halal hub.

“Phase 1 comprising 220 acres has been fully sold, yielding sales of RM133mil.

“The total gross development value of the 244-acre Phase 2 is RM234mil and sales are expected to be completed in three to five years,” Abd Karim said.

Talks were ongoing with both foreign and local parties and KHSB expected to secure sales of RM70mil from the second phase of the Selangor halal hub project by the year-end, he said.

“Phase 1, which is expected to commence business in the next two years, is projected to bring in direct investment of RM1.06bil to Pulau Indah and create at least 2,000 jobs,” he added.

Among the major players that would operate there are Ramly Food Industries Sdn Bhd and Felda Holdings Bhd.

KHSB recorded a net loss of RM38.5mil on revenue of RM93.4mil for FY08 mainly due to provisions and impairment losses.

The company currently has a total land-bank of 4,000 acres, largely in Selangor.

Abd Karim said KHSB was in discussions to acquire a 9.5-acre in Section 14, Petaling Jaya, for a mixed property project with an estimated gross development value of RM600mil.

He said the company was also exploring opportunities in the sand and minerals exploration.

By The Star

WCT sets sights on new LCCT

SHAH ALAM: WCT Bhd has set its sights on taking part in the construction of the proposed RM2 billion low-cost carrier terminal (LCCT) in Sepang.

Its deputy managing director Goh Chin Liong said yesterday that WCT, as one of the largest construction and property developers in Malaysia, would want to bid for the construction of the new LCCT.

“They have started to call for the pre-qualification exercise of the project through the newspapers and we will just continue to pursue,” he told reporters after the company’s AGM yesterday.

Last month, Malaysia Airports Holdings Bhd (MAHB) announced that open tenders for the new LCCT would be out this month and a project management company was appointed.

Goh said most construction companies locally were trying to get part of the contract. However, he said it would take several months before WCT received feedback about its interest in the project.

While WCT had placed its hopes on securing the new LCCT project, the company was on track to reach its targeted order book of RM1 billion for this year alone, Goh said.

The company had earlier in the year secured additional works for the Abu Dhabi F1 circuit and the new Doha International Airport project which amounted to nearly RM500 million.

As of March this year, WCT’s order book of RM2.9 billion was sufficient to last until end-2010, he said.

“We have cash and bank balances with fixed deposits totalling about RM650 million as per the first quarter of 2009.

It is certainly a strong and healthy cash flow,” he said when asked to comment on WCT’s balance sheet.

On recent analysts’ reports that WCT was close to securing a billion ringgit infrastructure project in Sabah, Goh neither confirmed nor denied WCT’s involvement but said WCT was among the more active construction players in that state.

“If we have secured such a project, we will announce at the appropriate time to Bursa Malaysia.

The analysts might not have gotten the information from us and sometimes they speculate,” he pointed out.

On the RM720 million upgrading of the Kota Kinabalu International Airport, Goh said WCT had finished building the new wing at the terminal building and it had completed 80% of the refurbishment in the old wing.

Goh also said WCT’s objective was to improve its earnings for the financial year ending Dec 31, 2009, despite posting a 29.5% lower net profit to RM39.22 million in the first quarter ended March 31, from RM55.58 million in the same quarter last year.

Last year, WCT posted a net profit of RM101.33 million on the back of a RM3.71 billion revenue.

WCT fell 16 sen to RM2.03 with 7.03 million shares done yesterday, in line with the weaker overall market.

By The EDGE Malaysia (by Yong Min Wei)

WCT on lookout for jobs in Mideast

SHAH ALAM: WCT Bhd has given a sombre outlook for the year as big construction jobs get harder to come by and the property market has turned softer.

Hazy order-book visibility for WCT and the construction sector as a whole, however, did not hamper the Employees Provident Fund’s (EPF) appetite for WCT shares.

Latest filings with Bursa Malaysia showed the pension fund now owns the single largest block of shares in WCT with a 26.3% stake. The EPF started the year holding 18.77% in the company.

“It (the EPF) had not asked for board representation,” chairman Datuk Ahmad Sufian Abdul Rashid told a press conference after the group’s AGM yesterday.

WCT’s share price took a beating in January and drifted below RM1 by early March on a massive sell-off following the termination of a contract at an on-going project to build a race cource in Dubai.

The case is currently under arbitration.

Despite the setback, deputy managing director Goh Chin Liong said the group was still actively scouting for new jobs in the Middle East.

Earlier this year, it bagged a total of RM500mil worth of new contracts in Abu Dhabi and Qatar. The contracts are additional jobs given by its existing clients.

“We are very cautious about taking on new ventures” in view of the weak global economic situation, Goh said.

WCT is targeting to achieve RM1bil worth of new order book this year, which is in line with analysts’ expectation.

As at end-March, the group’s total outstanding order book stood at RM2.9bil. This includes some RM750mil worth of internal jobs such as The Paradigm commercial development project in Kelana Jaya, Selangor.

Several brokerages, including Maybank Investment Bank and RHB Research, had recently linked WCT to upcoming huge infrastructure development projects in Sabah and Sarawak.

“All that we can say is that we are active in Sabah,” Ahmad Sufian said.

Currently, WCT is involved in ongoing works at the Kota Kinabalu International Airport and a water supply project in Kudat. In September last year, the company launched a high-end residential project called d’Banyan Residency@Sutera in Kota Kinabalu.

Consensus estimates put WCT’s current financial year ending Dec 31, 2009 (FY09) earnings per share at 17.3 sen, but falling to 15 sen per share in FY10.

WCT’s share price had doubled from its low point in March, and was up 34% year-to-date at RM2.03 yesterday.

By The Star (by Izwan Idris)

What will houses and buildings look like in the future?

Ten years from now, we will probably be eating food that has yet to be invented. Even if it’s green gunk cultured in a petrie dish, we will eat it with gusto, knowing that we are helping to save the planet.

Similarly, after a hundred years under a rock, the motor vehicle industry is beginning to evolve, despite the design of the latest Proton Saga which looks like something my father would have been proud to own. In 10 years, we may all be driving hybrids or electric cars.

The traditional rowdy Mat Rempits may have given way to a new generation who will steal up behind old ladies in their silent electric MPVs and flatten them before they have a chance to look round. Nevertheless, this will all be accepted as the price of progress.

A fight for survival is the most powerful incentive to evolution, whether you’re a microbe or a personal financial consultant. Sadly there is a complacency pervading the housing industry which has produced little innovation in the last 30 years.

Arguably, those who live in link houses will only aspire to bigger ones. The more fortunate in life will buy a bungalow with lots of roof, windows from Alcatraz and corinthian columns framing the entrance portico.

But there is little experimentation. Cluster houses were a flop, timber is passé, and “modern tropical” has become a catchphrase for koi ponds and bathrooms for exhibitionists.

Even though speculative housing needs to have broad appeal, niche developers have been slow to emerge with a response to the fundamental changes in the Klang Valley demographics. A younger middle class may not be so obsessed with the ownership of landed property and may focus more on lifestyle. The Verve Suites in Mont Kiara are a rare and successful example of this philosophy.

Britain has seen an interesting response to changing demand patterns. The high divorce rate has produced a huge band of middle-aged singles looking for companionship, but blended with a desire for some privacy. The emergent real estate solution is a small group of separate living units, linked to a communal lounge and recreation area. This sounds to me a lot like my student digs of the 1960s. I’m sure it’s much more sophisticated although it doubtless shares the same cherished objective of mindless bonking.

If one is looking for a single major evolutionary shift in global real estate markets, the buzzword is probably ‘sustainability.’ Exactly what comprises sustainability is well illustrated on this chart.

Phrases such as “best practice” and “diverse and flexible workplace” may sound alien and idealistic but they are objectives which are rapidly becoming the expectations of any multinational company. This year’s expectations are next year’s demands, so we need to be aware of these changing standards and plan for them.

In practical terms, the “triple bottom line” involves three elements: high technical specifications, environmental responsibility and financial viability.

A need for high technical specifications now applies to practically any new office development. Few businesses can now operate without IT. Even suburban buildings which are traditionally the refuge of the cost-conscious, now have to meet minimum technical requirements.

Environmental responsibility encompasses the provision of a pleasant workspace and office buildings with in-house facilities such as a gymnasium, senior staff canteen and even a swimming pool are becoming popular.

Equally importantly, energy-saving is becoming and will remain a major issue, particularly with the introduction of internationally accepted “green” standards by which buildings can be graded.

Finally of course, financial viability is paramount. “Green” buildings with attractive facilities are not cheap to develop and so far, the only incentive to incurring this additional cost is the belief that sustainability will become crucial to lettability. Over time, I believe this extra cost will be accepted as inevitable and capital values will rise, like social values, to meet the market.

● Chris Boyd is executive chairman of Regroup Associates Sdn Bhd property consultants. We welcome your feedback on this article. Please write to starbiz@thestar.com.my

By The Star (by Chris Boyd)

Deal with Dubai developer collapses

Property developer UEM Land Bhd's plan to sell 17.4ha of land to one of Dubai's largest private developers for RM396.5 million has fallen through.

The deal, which was first struck in June 2008, was for Damac Properties (Malaysia) Sdn Bhd to develop three parcels of commercial land that forms part of Puteri Harbour at Nusajaya in Johor.

Under a sale and purchase agreement (SPA) signed in June 2008, both sides were to have agreed to the conditions of the agreement by June 2009.

"The termination will have no impact on our financial results as the expected revenue from this proposed transaction has not been recognised in our accounts," UEM Land managing director and chief executive officer Wan Abdullah Wan Ibrahim said in a state-ment yesterday.

UEM Land and Damac had been in discussions on certain issues relating to the conditions of the deal. However, they were not able to come to an agreement on these issues and have now agreed for the SPA to be terminated.
Damac on June 16 told UEM Land it did not agree to further extensions of the extended approval period, causing the SPA to lapse.

"Given the current global economic conditions and the impact on many companies and countries including those in the Middle East, we felt that there is no point in pursuing the matter and that a termination of the SPA was in UEM Land's best interest," Wan Abdullah said.

"Our aim is to accelerate the momentum of development and investment in Puteri Harbour. The foundation has already been laid and we have received strong interests from potential investors to partner us in developing the area. We are confident of concluding some of these deals in the near future," he added.

News reports as recent as April had already raised questions regarding the deal, given Damac's troubles following the property bubble bursting in Dubai beginning end of last year.

In December 2008, Damac cut 200 jobs or 2.5 per cent of its workforce.

The company has also called off its Palm Springs project, a 25-storey residential and resort development, planned for the Jebel Ali Palm in Dubai.

UEM Land has another Dubai-based partner in Limitless LLC as a major investor in Nusajaya. Its joint venture is through Haute Properties Sdn Bhd, which will develop a 44.4ha residential project in Puteri Harbour with an initial investment of RM241.8 million.

It is understood that a layout for this project has already been submitted, and will continue as planned, with completion scheduled for 2013 with an estimated gross development value of more than RM1.5 billion.

By Business Times

UEM Land, Damac sale agreement lapses

PETALING JAYA: UEM Land Bhd’s agreement with Damac Properties (M) Sdn Bhd for the RM396mil sale of 43.5 acres in Puteri Harbour, Nusajaya has lapsed.

UEM Land told Bursa Malaysia yesterday Damac had failed to resolve issues relating to the conditions of the purchase agreement within the agreed period.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim said the termination would have no impact on the company’s financial results as the expected revenue from this proposed transaction had not been recognised in its accounts.

“The exit of Damac would not impact the development of Nusajaya as we are currently in talks with new developers to take over its place,” it said.

According to sources, developers from Australia and Singapore have expressed interest to purchase parcels of land in Puteri Harbour, the waterfront development in Nusajaya.

By The Star

UEM Land down after Dubai firm pulls out of RM396m deal in Nusajaya

KUALA LUMPUR: UEM Land Holdings Bhd share price fell this morning after Damac Properties (M) Sdn Bhd, which is part of Dubai's Damac Group, pulled out of a deal with UEM Land to acquire a piece of land for RM396.44 million in Nusajaya, Iskandar Malaysia.

At 9.40am, UEM Land was down 9 sen to RM1.74. It was also among the most actively traded counters with 10.22 million shares done in early trade.

Yesterday, UEM Land said it had received notification on Tuesday that Damac would not be interested in further extending the sales and purchase agreement (SPA), which was signed on June 12 last year.

The company told Bursa Malaysia that under the terms of the SPA, the period to fulfil the condition would expire 12 months from the date of the SPA unless extended by mutual agreement by both parties.

"The parties had been in discussions on certain issues relating to the conditions precedent and a possible extension of the extended approval period. However, on Tuesday, UEM Land received notification stating that they are not agreeable to further extension of the extended approval period," it said.

UEM Land said the SPA relating to the proposed disposal had lapsed and was of no further effect.

By The EDGE Malaysia (by Surin Murugiah)

Genting: Sentosa project on track, within increased budget

The gaming group says the casino project in Singapore is set to have its soft opening in the first quarter of next year

GAMING group Genting Bhd says the casino resort it is building in Singapore is on track for a soft opening in the first quarter of next year and that its construction cost is within the increased budget.

"Genting International revised the budget earlier because the project had overrun the initial budget. At this point, it is within the enlarged budget," Genting chairman and chief executive Tan Sri Lim Kok Thay told shareholders during its annual meeting in Kuala Lumpur yesterday.

Genting International, recently renamed Genting Singapore plc, said earlier this year that its investment in the casino resort on Sentosa Island was expected to increase to S$6.6 billion from S$6 billion (RM16 billion from RM14.5 billion).

"The cost has increased because we have added and changed some specifications so that we will end up with a much, much better project from the original," Lim said.
He added that the project, which boasts of a Universal Studio theme park, Hard Rock Hotel and the world's biggest oceanarium, will open in stages, starting with the casino.

"This is a large project. It is not prudent to launch all at one go although that's the ideal. The plan is to open the gaming part first to get cash flow intact," Lim said.

Genting Singapore is a 54.4 per cent-owned subsidiary of the group.

Lim quelled speculation that Genting was eyeing an ultimate investment in Macau through the recent purchase of a 3.2 per cent stake in MGM Mirage and US$100 million (RM353 million) of its bonds.

MGM Mirage, a major casino operator on the Las Vegas strip, is part of a joint venture in Macau.

"We are treating it as an investment at the moment, to maximise returns on cash rather than keeping it in deposits. The plan is no more than that," he said.

"The bond is secured against two top quality assets and, if repayments failed, we can collect the collateral. The management recognises that this is a good investment.

"As we get to know MGM better, we hope we can strike out some marketing alliances."

Lim also said that despite the recession in the UK, the group expects its investments there "to turn in profits at the same time as projected when it made the acquisitions".

The group acquired control of Stanley Leisure, the UK's largest casino operator, in October 2006.

"The business has got a lot of potential," Lim said. Already a major player in the UK, the unit can later expand to Europe, which is a "greenfield for gaming".

"It will be good to get the timing right for investment, but no one has predicted this round of financial crisis."

On another development, Lim said that Genting was just a "minor player" in Rank Group, the UK's bingo hall operator in which Tan Sri Quek Leng Chan's Guoco has reportedly built up a 24.1 per cent stake as of last October.

Genting owns about 11 per cent of Rank, according to media reports.

By Business Times (by Chong Pooi Koon)

Serviced apartments in Hong Kong more resillient

KUALA LUMPUR: The serviced apartment sector in Hong Kong has been relatively more resilient than the luxury residential market during the current economic downturn, according to real estate services agency Colliers International (Hong Kong) Ltd.

According to the "Serviced Apartments Overview - June 2009" report published by Colliers International recently, between August 2008 and April 2009, the average rental of serviced apartments registered a -12.9% fall compared with a fall of -24.6% for luxury residential leasing property.

The pace of serviced apartment rental decline slowed to -1.7% month-on-month (m-o-m) in April 2009 to HK$44.78 psf per month.

The average rental of serviced apartments decreased 6.4% quarter-on-quarter (q-o-q) in 4Q2008 and 5.4% q-o-q in 1Q2009. Average luxury residential rentals fell 13% q-o-q in 4Q2008, while its downward adjustment narrowed to 8% q-o-q in 1Q2009 as inexpensive opportunities were snapped up by early-bird occupiers.

The rate of decline in rentals tapered off further to less than 2% m-o-m, with average unit rate at HK$34.87 psf per month. Individual serviced apartments of medium-to-large sizes experienced a double-digit fall in rental.

Director of research and advisory Simon Lo said in a statement that a number of occupiers had chosen to relocate to cheaper areas, or to downgrade their accommodation in terms of size or quality due to the general tightening in housing allowances.

"Sustained weakness in occupational demand and the cost-cutting initiatives among multinational companies remain the major challenges for the overall residential leasing market," he added.

Colliers said the leasing demand has dropped significantly, and some vendors have changed their leasing strategies by offering competitive rentals to fill their units in view of a demand contraction.

Some 75% of serviced apartment tenants have also chosen short term leases of less than six months, it added.

Colliers expects rentals in the luxury residential market in Hong Kong to fall 12% over the next 12 months, while the potential rental downslide in the serviced apartment sector will be limited to 8% during the same period, as the latter will continue to be resilient with its services and flexible lease terms.

By The EDGE Malaysia (by Racheal Lee)

I-Bhd to offer IT solutions to others

From left: Eu Hong Chew, Tan Sri Hamad Kama Piah Che Othman and Datuk Seri Kong Cho Ha looking at a model of i-City after the launch of the iO2 system Tuesday.

SHAH ALAM: I-Bhd, the developer of i-City commercial project, is looking to offer its digital technology solutions to other developments in the region.

Speaking at the launch of the I-Office Squared (iO2) system yesterday, chairman Tan Sri Hamad Kama Piah Che Othman said this would be a technology-based income for the company.

“I-Bhd will have another revenue stream to complement the one from property development when this roll-out is fully operational,” he said.

The system was launched by Housing and Local Government Minister Datuk Seri Kong Cho Ha.

Hamad said tenants at i-City would be offered a range of built-in facilities and services that would enable them to lower operational costs.

I-Bhd has teamed up with Cisco and Australia-based Servcorp to set up a joint-venture, i-Office2 Sdn Bhd, to provide managed services to i-City and other property projects in the country.

The iO2 is a multi-tenant managed service system. The key tenant service offerings include high-speed Internet access, IP telephony and unified communications, wireless/mobility solutions, network and physical security and control over their office environments.

I-Bhd CEO Eu Hong Chew said the company would focus on local markets for its technology solutions services before venturing into other countries in the region.

“We will probably have the first roll out of the iO2 system beyond i-City by early next year,” he told StarBiz in a phone interview.

He said I-Bhd was looking to either invest and provide its solutions to projects undertaken by other developers or license the products to them.

By The Star (by Rachael Kam)

I-Bhd plans digital expansion outside i-City

GOING BIG ON DIGITAL... I-Bhd is planning to expand its digital technology solutions beyond i-City, says its chairman Tan Sri Hamad Kama Piah Che Othman (3rd from left) at the launch of the property developer’s i-Office2 system in Shah Alam yesterday. At the event, Housing and Local Government Minister Datuk Seri Kong Cho Ha presented a certificate of recognition to Hamad for i-City’s unique and innovative property development. Also present were (from left) I-Bhd non-executive director Eu Hong Chew, Shah Alam mayor Mazalan Md Noor and I-Bhd deputy chairman Datuk Lim Kim Hong. Photo by Abdul Ghani Ismail

SHAH ALAM: Property developer I-Bhd is looking to expand its digital technology solutions to other development areas in the country and the region.

Speaking at the launch of the i-Office2 (iO2) system here yesterday, I-Bhd chairman Tan Sri Hamad Kama Piah Che Othman said the company’s latest endeavour would provide it with technology-based income.

“When this rollout is fully operational, I-Bhd will have another revenue stream to complement the one from property development,” he said.

Hamad Kama Piah said the built-in facilities and services of i-City would enable clients to save costs due to the extensive planning, significant economies of scale and strategic alliances with partners. iO2 is the result of a joint venture between I-Bhd and Australian virtual business offices creator Servcorp to deploy network and telecommunication services throughout the i-City development.

Housing and Local Government Minister Datuk Seri Kong Cho Ha, who launched the iO2 system, said it was not surprising that digital technology was incorporated into property development.

“This ICT-enabled commercial development will act as a catalyst to spur more growth for activities driven by economies of knowledge especially in the IT-related sector,” he said.

By The EDGE Malaysia

I-Berhad upbeat on new revenue

I-BERHAD, developer of the RM2 billion i-City project in Shah Alam, Selangor, will have a new income stream starting next year that will improve its revenue and net profit, a top official said.

Already the company is expecting revenue to improve this year, mainly because it has, in the past six months, leased 300,000 sq ft of office space in i-City, an MSC Malaysia Cybercentre.

By December, I-Berhad will complete and lease an additional 200,000 sq ft of office space, its director Eu Hong Chew said.

In the past, I-Berhad's income was mainly from property sales. It posted a net profit of RM15.3 million on revenue of RM95.8 million last year.

Chairman Tan Sri Hamad Kama Piah Che Othman said I-Berhad, in partnership with Australia's Servcorp, will offer its managed office system, a digital technology solution that has been the tackling point for i-City, to developers involved in commercial projects.

Initially, I-Berhad and Servcorp, through i-Office 2 Sdn Bhd, their 35:65 joint-venture firm, will offer the technology to developers in Malaysia. It may branch out to Southeast Asia in a few years and target high-end residential developments, too.

Hamad added that i-Office will invest RM100 million over the next 10 years in information technology infrastructure, equipment and services in i-City for the roll-out plan.

"We will roll out the services beginning the first quarter of 2009. When fully operational, I-Berhad will have another revenue stream to complement the one from property development," he said at the launch in Shah Alam yesterday by Housing and Local government Minister Datuk Kong Cho Ha.

Under the plan, i-Office will deploy an IP-based open network platform in i-City that allows building technologies such as heating ventilation and air-conditioning and CCTVs, among others, to be integrated with traditional IP-based communications systems on a common network platform.

"When tenants relocate to i-City, they would be offered a range of built-in facilities and services, enabling them to lower their operational costs by 33 per cent. The same goes to tenants in other developments, which have applied our technology," said Hamad, who is also the president and chief executive officer of state-owned investment fund Permodalan Nasional Bhd.

By Business Times (by Sharen Kaur)

KYM to sign RM300m medical hub deal soon

The medical complex project in Malacca is expected to see KYM back in the black as early as next year, says KYM group managing director

Property developer KYM Holdings Bhd is expected to sign an agreement as early as next week to help build a RM300 million medical complex in Malacca, its group managing director Datuk Raymond Chong Thin Choy said.

"Construction of the medical hub should start by early next year," Chong told Business Times in an interview.

The federal government-funded project, under the Ministry of Health, will include construction of a state health administration centre, nursing institute and public health laboratory.

KYM, controlled by Datuk Lim Kheng Yew, will have 70 per cent stake, while its partner in the venture, Yayasan Melaka, a state government agency, will hold the remaining 30 per cent.
The project is expected to see KYM back in the black as early as next year, said Chong.

"We are targeting to break even in the financial year ending January 31 2010 and rake in sustainable profits from 2011 onwards."

KYM last reported a profit of RM28.7 million in 2006.

Its return to profitability and planned transformation from property developer to infrastructure player hinge largely on the sale of its landbank in Perak to Brazil's Vale SA, the world's biggest iron ore producer.

Completion of the multi-million-ringgit deal will help KYM degear itself, bringing its gearing ratio to as low as 0.41 time, or RM29.08 million, from the current 8.94 times, or RM209.73 million, while its net tangible asset is poised to rise to 89 sen a share from 29 sen.

The metal producer, which intends to pump in as much as RM9 billion into the Perak economy, has agreed to buy land in the silver state from KYM for RM101.9 million.

Vale also has an option to buy more land from KYM for RM93.7 million.

"It's truly a godsend," said Chong, adding that KYM is hoping to get as much as 10 per cent, or RM900 million worth, of the construction contracts on offer by Vale.

Securing RM900 million worth of jobs could help keep KYM busy for the next three years. Vale is expected to start developing the land as early as next year.

Chong also said that KYM in-tends to venture into quarrying in Perak to complement Vale's operational needs.

By Business Times (by Francis Fernandez)

US housing construction rebounds sharply

WASHINGTON: US housing construction rebounded sharply in May from all-time lows, official data showed yesterday, stoking hopes the real-estate crisis at the heart of the recession may be easing.

The Commerce Department reported construction starts on privately owned homes vaulted 17.2 per cent in May from the prior month to a seasonally adjusted annual rate of 532,000, marking a third consecutive month of gains.

Building permits, an indicator of future activity, leapt to a seasonally adjusted annual rate of 518,000, an increase of 4.0 per cent from April.

By AFP

Mah Sing buys land next to Sri Pulai Perdana 2

MAH Sing Group Bhd has bought a 2.3ha freehold land next to its existing Sri Pulai Perdana 2 project for about RM2 million.

This brings the total land size of Sri Pulai Perdana 2 in Johor Baru to about 29ha, with RM225 million estimated gross development value.

“The increase in gross development value of Sri Pulai Perdana 2 arising from future development on the (purchased) land is expected to enhance the future profit and net assets of Mah Sing Group,” the company said in a statement to Bursa Malaysia.

By Business Times

Cool roofs for hot climates

Heat absorbers: Concrete surfaces absorb heat, causing the heat island effect. If roofs and buildings are painted white, they will reflect the heat instead.

The stifling heat might have gotten some of us thinking about how best to cool our homes without pushing up the electricity bill in this time of financial crunch.

Dr Gary Theseira thinks he has the answer – simply reflect the light and heat back to the atmosphere. He suggests that we look at the potential of our roofs – that space that is directly exposed to the sun and absorbing vast amounts of heat during the day – as a reflector.

He says conventional tiles absorb heat as almost all are made from material that do not reflect heat and the heat absorption is intensified manifold with the dark-coloured tiles preferred by most Malaysians.

The botanist with the Forest Research Institute of Malaysia (FRIM), who has represented Malaysia at several United Nations climate change negotiations, is frustrated that no one take is taking him seriously about making changes to our roofs.

Theseira feels the world is giving disproportionate attention to the loss of white snow cover at the poles, and is failing to address the heat island effect of cities at the Equator, where the heat intensity is 2.5 times higher than at the pole.

“If we at the Equator bounce off the light and heat back to the atmosphere, that would really help,” he explains.

Having designs on the roof as a climate change mitigating tool is not a new idea but it hasn’t caught on in a big way. In fact, the roof is not the only building surface that can help lower the temperature of buildings.

“In the Middle East and Mediterranean, for thousands of years, buildings have been traditionally white-washed to keep them cool in the summer,” says Dr Hashem Akbari, who heads the Heat Island Group of the Lawrence Berkeley National Laboratory at the University of California, Berkeley, California, in the United States.

(Heat island is a phenomenon where an urban centre is significantly warmer than its surrounding rural area due to the modification of land surfaces and heat generated by high energy usage.)

Akbari is known for his relatively simple idea to cool the earth’s urban surfaces: make all rooftops and paved surfaces white. He is pioneering the white-roof concept and recently launched the 100 Cool Cities programme to get homeowners to switch to white roofs or at least a cool-coloured roof. No cities have signed on, however, despite showing interest.

“I am hoping to create an international programme to recruit as many large cities as possible. My current focus, in addition to the US cities, are China, India, Brazil and the Middle East. I would like to make sure that the building standards in all these countries prescribe white or cool-coloured materials for roofs,” he says in an e-mail interview.

Akbari found that communities with white roofs and cool pavements are a few degrees cooler, thus requiring less air-conditioning in the summer. Also, a lower ambient temperature reduces the reaction rate of smog-producing pollutants, leading to better air quality.

Akbari’s work shows that replacing 10sqm of a dark roof with a reflectivity of 0.15 albedo (reflecting only 15% of incoming solar radiation) with a white roof with a reflectivity of 0.55 will offset about one tonne of carbon dioxide (CO2) emissions.

White is best

“If all cities in hot and temperate climates were to use white material on their roofs or cool-coloured materials, we can offset about 24 gigatonnes of CO2 emissions which is equivalent to over 10 years of emissions from all cars in the world. The current world emission is about 27 gigatonnes, ” he says.

He says a white roof has an initial reflectance of about 0.7 to 0.85 albedo. Over time, its reflectivity drops (due to dust collection) to about 0.55 to 0.65 albedo, depending on the location and climate.

Globally, roofs account for 25% of the surface of most cities, and pavement accounts for about 35%.

“I call it win-win-win,” Akbari says. “First, a cooler environment not only saves energy but improves comfort. Second, cooling a city by a few degrees dramatically reduces smog. And the third win is offsetting global warming.”

He says some leading industries are pushing the idea while some, who are afraid of losing market share, resist.

His colleague Arthur Rosenfeld, who is a commissioner with the California Energy Commission, told the San Francisco Chronicle in an interview, that the team estimated that a worldwide conversion to white rooftops would take at least 20 years.

Rosenfeld said California is the only state to embrace white roofing, at least for commercial projects. In 2005, with the aid of Akbari’s research, the state passed a building standards law that requires all builders to first consider cool colours for major retrofits or new buildings.

Akbari says the roofing industry responded well, designing new materials and cooler colours to appeal to builders and homeowners seeking cost-savings and ecological benefits. Cooler colours refer to paint with cool pigments that reflect more of the near-infrared part of the solar spectrum. Painting or coating roofs is one option, he adds.

While costs (without incentives from the government) is prohibitive, there are Malaysians who have embraced the idea at their own expense. When Tony Cheah of Taman Tun Dr Ismail in Kuala Lumpur decided to renovate his single-storey link house two years ago, he came across a UV-resistant roof coating called Tileflex.

“Replacing the whole roof would have cost me in excess of RM25,000, not to mention the mess I would have had to endure. I had no intention of changing the original tiles which were still in excellent condition,” he says, adding that he ended up paying RM6,500 and got a new coating for the roof in three days.

While Cheah couldn’t specify the savings in electricity bill or provide a reading of the ambient temperature in the house post-renovation, he says the house “is considerably cooler”.

Lim Voon Bin, director of Nuruf Sdn Bhd which distributes Tileflex, says electricity savings will be apparent in the long run. He claims the product reflects up to 3°C of heat.

Lim ran a roof-making business for 30 years before he closed down his factory in Nilai in 2004 when he realised that he would be helping the environment if he could “restore roofs rather than replace them”. So far, he has restored 150 houses since 2005, as eco-consciousness takes root among Malaysians.

By The Star (by Hilary Chiew)

Scomi eyes US$2.5b monorail job in Brazil

Scomi Engineering is banking on its excellent delivery time track record to win the tender for the first phase, which will open in the middle of next month.

Scomi Engineering Bhd is confident that it can win a US$2.5 billion (RM8.8 billion) job to set up a monorail system in Sao Paulo, Brazil's largest city, says president Hilmy Zaini.

The tender for the first phase, which will open in the middle of next month, is part of a 100km monorail project to be commissioned by the State of Sao Paulo in preparation for the 2014 World Cup, to be held in Brazil.

Scomi Engineering will be the systems supplier and designer of the project, while CR Almeida will work on the civil construction.

The state government has earmarked some US$10 billion (RM35.2 billion) to design monorail lines and modernise its metro lines.
The US$2.5 billion is for the first 45km of the monorail line.

"We are banking on our excellent delivery time track record to be a main attraction, because of the June 2013 deadline the Brazilian authorities have, as well as the fact that we have a very strong civil construction partner in CR Almeida," Hilmy said.

This in turn will provide numerous opportunities for implementing monorail systems in the 12 cities selected to host the games.

The city of Sao Paulo is set to host the opening match.

Scomi Engineering is hosting the Brazil Monorail Consortium delegation comprising officials from the transportation and planning departments of the city and State of Sao Paulo on a visit here since June 11.

The visit is part of a fact-finding mission. The delegation will also go to India to view Scomi's project in Mumbai in addition to visiting Japan.

The delegation will not only meet with embassies and senior management but will also stop by the Asian Oil & Gas exhibition, take a ride on the Kuala Lumpur Monorail and visit Scomi's North KL facility.

Sao Paulo Metro's director of metropolitan transport planning and expansion, Jair Felipe Molina, said it hopes to announce the winner of the tender between end-August and mid-September and have construction start by January next year.

SP Trans SP Brazil's director of transportation, Pedro Luiz de Bnida Machado, said there were also plans for another monorail line in the south zone of Sao Paulo, estimated to be worth US$4 billion (RM14 billion).

By Business Times (by Presenna Nambiar)

Piling starts on Johor's biggest condo project

Construction has started on the RM650 million Iskandar and Oakwood Residences in Danga Bay, touted as Johor's biggest condominium development.

The contract for piling works was awarded to Econpile (M) Sdn Bhd, a specialist piling contractor, which is expected to finish the job by October.

Actual building of the three-tower project, comprising about 750 luxurious units, will begin soon. Completion is scheduled for 2012.

The condominium project, taking up 2.5ha, is being developed by Global Corporate Development Sdn Bhd, a joint venture between Iskandar Waterfront Development Sdn Bhd (IWD) and Danga Bay Sdn Bhd (DBSB).

IWD is majority owned by Iskandar Investment Bhd, in which Khazanah Nasional Bhd holds a 60 per cent stake; the Employees Provident Fund, 20 per cent; and Kumpulan Prasarana Rakyat Johor, a state government-linked company, 20 per cent.

Johor Menteri Besar Datuk Abdul Ghani Othman, who is also Iskandar Regional Development Authority (Irda) co-chairman with the Prime Minister, visited the site last Saturday.

Present were IWD chairman Arlida Ariff and chief executive officer Datuk Lim Kang Hoo.

The 28-storey Oakwood Residence, with 230 units, is the southern region's first high-end serviced apartments to be managed by Oakwood Asia Pacific Pte Ltd.

The other two 38-storey towers, called Iskandar Residences, will have 523 residential units.

The podium block will offer a wide range of shopping, food and beverage facilities. Also available will be some 150,000 sq ft of corporate suites for local and multinational corporations keen to set up office in Iskandar Malaysia.

Several other signature waterfront developments in Danga Bay will be announced soon, including at least three hotel properties, an international convention and exhibition centre, office towers, and a wet and dry theme park.

By Business Times (by Sim Bak Heng)

UEM Land in talks with 3 foreign parties for tie-up

KUALA LUMPUR: UEM Land Bhd, the master developer of Nusajaya, is in talks with three foreign parties on possible strategic partnerships for its Puteri Harbour project.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim said the company hoped to conclude the deals this year.

“We hope to seek greater foreign participation besides our existing two Middle Eastern partners,” he said in an interview.

Spanning over 688 acres, the Puteri Harbour waterfront development consists of high-end residential, commercial and retail properties, resorts, hotels and a convention centre.

Wan Abdullah said the group would proceed with all its development plans regardless of the weakening economy.

“We have no choice but to continue with our projects because our company is still growing as a property developer.”

Unlike more established property developers, UEM Land could not afford to defer its projects as this would have a severe impact on its medium-term growth, he said.

“However, we believe the biggest challenge for us this year is to manage our cash flow well in order to meet our business targets,” he added.

On its new project line-up this year, Wan Abdullah said preparation was currently under way for the launch of Phase 2 of its East Ledang project with an estimated gross development value (GDV) of RM195mil.

East Ledang would be developed in seven phases with a total GDV of RM2.4bil. It is a gated high-end, low-density, resort-style residential development that covers 275 acres comprising 861 units.

Phase 1, launched in February last year comprising 139 units, has a take-up rate of 80%.

Wan Abdullah said the group was also expected to launch next to East Ledang soon the Ujana, comprising a 23-storey residential tower with 172 executive apartments and four penthouses.

The company had identified a gap in the market and planned to launch residences comprising medium-cost housing with a GDV of RM630mil by the fourth quarter, he said.

“We will move into more medium-cost housing projects as this is what the market needs right now. More affordable housing, priced from RM140,000, will be built in the next few years at our schemes,” he added.

The medium-cost precinct will cover 261 acres along the Pontian Link that has not kicked off yet.

By The Star (by Shannen Wong)

YNH’s serviced residences to be managed by Fraser & Neave

GEORGE TOWN: YNH Property Bhd rebranded a month ago its RM350mil 163 Seviced Suites project as the five-star Fraser Place Kuala Lumpur to be managed by Frasers Hospitality Pte Ltd, the hospitality arm of the Fraser & Neave Group.

Fraser Hospitality manages four and five-star serviced residences equipped with hotel facilties worldwide under its prestigious Fraser Place, Fraser Residence, Fraser Suites, and Fraser Resort brand names.

Fraser Place Kuala Lumpur is scheduled to commence operations and grand opening in November 2009.

“We brought in Fraser Hospitality to manage because this will enhance returns and add value to our investors from the rentals of the serviced suites,’’ YNH corporate services head Daniel Chan told StarBiz.

“We estimated that for the location – Jalan Perak – where the project is located, which is five minutes from the KLCC shopping complex, the yield generated from rental is between 6% and 10% per year based on the purchase price of the units.

“Fraser Place Kuala Lumpur will be one of the higher-yield generating properties based on the purchase price of the units, which ranges from RM600,000 to RM2mil,” he said.

Chan said Fraser Place Kuala Lumpur was sold out, leaving only about RM80mil in unbilled sales to be recognised.

YNH started selling the project back in late 2005, and completed the sales only recently.

“The investors, both local and foreign, have agreed to lease their properties back to us, as they realised that they could generate higher returns through Fraser Hospitality management,” he said.

Fraser Place KL offers 217 rooms, comprising studios with one and two bedrooms and luxurious penthouses, with built-up areas ranging from 450 to 4,000 sq ft.

Chan said the group had also engaged Fraser Hospitality to manage its 446-unit serviced residence development to be known as Fraser Residence Kuala Lumpur, off Jalan Sultan Ismail, next to Renaissance Hotel.

The RM550mil project, comprising two 30-storey towers with one and two-bedroom serviced apartments, features a sky gymnasium, infinity lap pool, whirlpool and sauna.

“It is scheduled for completion in four years,” Chan said.

On the group’s 95-acre land in Genting Highlands, he said YNH planned to develop residential cum commercial projects with an estimated gross sales value of RM2bil.

On the group’s other projects, Chan said YNH had recently achieved sales of RM300mil for Menara YNH’s retail podium, which measures 180,000 sq ft.

“The offer from Kuwait Finance House to take up 50% of the office space in Menara YNH is expected to be finalised this year,” he said.

On the Kiara 163 project, located next to Plaza Mont Kiara, Chan said the group had achieved sales of RM200mil for the commercial component measuring 480,000 sq ft.

“We will launch the residential component, comprising serviced apartments, soon as there are a lot of enquiries from the local and overseas market,” he added.

By The Star (by David Tan)

Three-star Hotel Sentral targets budget travellers

HOTEL Sentral (KL) Sdn Bhd, a privately-held company controlled by the Ta family, has opened the RM80 million Hotel Sentral, a three-star property in Brickfields, Kuala Lumpur, aimed at budget travellers.

The 192-room 16-storey hotel is located behind the monorail station, which is opposite the Kuala Lumpur Sentral development.

The company's managing director and founder May Ta said she has no qualms about opening the hotel now eventhough city hotels are suffering from low occupancy due to poor market sentiments.

Ta told Business Times that the company is branding the property as a value-for-money destination.

"While we are a three-star property, we are providing in-room safe, an LCD flat screen television in each room, and WIFI services. The hotel is located within walking distance to KL Sentral and public transporation," Ta said.

Walk-in room rates start from as low as RM138 nett for a standard room, to RM345 nett for an executive suite.

Ta added that Hotel Sentral is expected to achieve 60 per cent occupancy at an average room rate of RM110 by December 31 2009.

"We have been operating for just a month and are running at more than 60 per cent currently. We are enjoying from AirAsia's night flights. The first place travellers want to go to upon reaching KL Sentral is to the nearest hotel. This will contribute to growth for the property," Ta said.

Since its opening, Hotel Sentral has received guests from New Zealand, Australia, Japan and India.

Ta said she is optimistic the company will be able to recoup its investments in the hotel over the next 8-10 years.

"Brickfields will be the future Little India and this will encourage more travellers to come towards this part of Kuala Lumpur. We will be investing a lot over the next one year to position the hotel," she said, adding that the rich heritage of Brickfields will bring customers to the hotel's doorstep.

The hotel was officially opened by former Tourism Minister Datuk Tengku Adnan Tengku Mansor on Saturday, witnessed by ex-Inspector General of Police Malaysia Tan Sri Norian Mai, and Datuk Ruslin Hasan, former mayor of Kuala Lumpur.

Ta's father, Tan Sri Ta Kin Yan was also present.

By Business Times (by Sharen Kaur)