MBSA to relax rules to attract foreign investments

Already open: The first phase of the i-City project has been completed.

The Shah Alam City Council (MBSA) is going easy on its strict rules on entertainment outlets in the city as part of efforts to attract foreign investors to the knowledge-based i-City development project.

With such a policy in place, Shah Alam residents may, within the next few years, see the city’s first cinema with the approval for the facilities having been granted.

The cinema is part of the final phase of the i-City, which comprises a shopping mall and a citywalk which are scheduled to be completed in 2015. The intelligent centre is located at Section 7 of the state capital.

“We are making an exemption for the i-City to encourage international companies and franchisors to invest in the intelligent centre,” Shah Alam mayor Mazalan Md Noor said.

“But they still have to adhere to the existing rules and regulations, especially on the operating hours,” he said.

According to Mazalan, the i-City had been conferred the International Park status by the Selangor government in October last year, allowing it to operate entertainment and lifestyle outlets such as cinemas and theatres, bowling alleys, family theme parks, restaurant and clubs.

He said although the International Park status also allowed restaurants in the i-City to sell liquor, this was not an automatic blanket maxim but subject to approval by the MBSA.

“In principle, we are going easy on the ruling for them, but it does not mean that it is automatic permission. The operators still have to apply for permits and we will look into their cases to make sure that they abide to the guidelines,” he said.

Mazalan said he hoped that the move would serve as a catalyst in boosting the development in the state capital.

“We hope the i-City, with its modern infrastructure and high-tech facilities, will function effectively as the city’s knowledged-based centre,” he said.

“We want the i-City to be an icon for the city and hopefully will be emulated in other areas of the city,” he said.

Shah Alam, with about 90% its population being Muslims, has always been strict on the entertainment outlets, with cinemas, pubs and snooker centres being banned.

But the city is a beautiful place to live, with its many natural parks and a handsome lake too. Traffic chaos is also almost unheard of in this garden city of orchids.

Having a cinema and other modern high-tech facilities in the i-City will complement the other cultural and recreational elements available in Shah Alam.

Residents and visitors can enjoy regular cultural activities at the Laman Budaya and soon watch theatre performances at the Shah Alam Royale Theatre.

“We are also processing applications from karaoke centres, so the residents will soon be able to enjoy that too,” Mazalan said.

Allowing the cinema to operate in the city has received mixed responses and reactions from the Shah Alam residents. Even the city councillors are split on the matter.

While some people agree with relaxing the rules, others feel that the city should maintain its sober identity, with no entertainment outlets.

“All the while we did not have any such outlets and this is what the residents want. Having such facilities would not make Shah Alam any better and might even result in negative influences and impacts, especially among our youths,” said Datin Nor’ini Md Top, a councillor in charge of Section 7.

“So I do feel that we should stick to the the status quo - no cinema,” she said.

Nor’ini said the MBSA should not make an exception to the i-City centre as other similar developments would also demand to be given similar concessions.

She felt that the authority should not bend the rules just to encourage more foreign investors to come and start their business at the i-City.

“Why do we have to sacrifice our own culture and ethics just for the sake of encouraging foreign investors?

“Unless the operator could ensure that they would only conduct constructive and educating activities, I believe we should stand by what the residents want,” Nor’ini said.

Councillor Ang Leng Kiat said the MBSA would have to make sure that the i-City operators provide healthy activities for the people.

Ang said it was only fair to seek the views of the residents on what they wanted.

“We are serving the people and if they want a cinema, then they should have it,” he said.

“But we have to make sure that the cinema operator adhere to our rules and regulations,” Ang said.

Adnan Jamburi said that relaxing the rules would be a boost the development and property value in the city.

He said the move would bring in foreign investors to the city, which was needed especially during the current economic slowdown.

By The Star (Stories by Salina Khalid)

Property market showing signs of recovery, albeit slowly

The Malaysian property market is showing signs of recovery, albeit at a slow pace, attributed to government spending and developers taking a cautious stance during the economic downturn.

"We are recording higher property volume, but lower value. The price is not plunging. It is just that the lower bracket of properties are selling now," said Dr Zailan Mohd Isa, director of the Valuation and Property Services Department under the Ministry of Finance.

According to data provided by the department, there were 23,256 unsold completed residential units in Malaysia as at March 31, 2.1 per cent lower than the same quarter last year.

In addition, there are 15,723 units with approved building plans - launched, but not constructed. Last year, the figure was 18,402 units.

For unsold properties under construction, there are 49,904 units versus 53,619 units last year.

"Due to the economy slowdown, developers have been cautious. Hence, there were less new products in the market. But overall, the performance in the sector remains healthy but most importantly, the government has to secure jobs, facilitate domestic spending and control inflation," he said.

Zailan was speaking at a media conference in Kuala Lumpur yesterday, in relation to the 20th National Real Estate Conference that will be held from August 11-12 at the Kuala Lumpur Convention Centre.

The event is hosted by the Association of Valuers and Property Consultants in Private Practice Malaysia and Institution of Surveyors Malaysia.

The conference will underline issues faced by the real estate sector, covering residential, office, retail, hotel and industrial markets.

Organising chairman Elvin Fernandez said the conference was timely and important to re-calibrate the fundamentals in the Malaysian real estate market. He said there is a self correction mechanism in the market now as the country's 2,000-odd developers are holding on to their launches.

By Business Times (by Sharen Kaur)

Khazanah, Boustead in RM50m KidZania venture

A RM50 million educational theme park from Mexico, KidZania, will open by early 2012 at a new building in Mutiara Damansara in Selangor, just across from the Curve shopping mall.

The award-winning indoor park, which allows children to role-play adult occupations in a replica city with activities designed to mimic real-life and functioning economy, is popular in cities like Tokyo and Jakarta besides its home country.

"It is a commercial investment but it also hits the right note on all fronts. We are excited. This world-class facility will fill the current void of entertainment and education in our tourism sector," Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar said at a press conference in Selangor yesterday.

Once completed, the park will create 400 jobs in the service industry, he added.

The project, an 80:20 joint venture between Khazanah and Boustead Holdings Bhd, is the second theme park investment for Khazanah after the RM750 million Legoland in Iskandar Malaysia.

KidZania Kuala Lumpur is expected to attract 500,000 visitors a year. Boustead, developer of Mutiara Damansara and owner of the Curve, will tear down a building currently occupied by McDonalds to build a seven-storey structure to house KidZania Kuala Lumpur. The theme park will take up about 60,000 sq ft on levels six and seven of the new building, which will be linked to the Curve via a sky bridge.

Xavier Lopez Ancona, founder and chief executive officer of KidZania S.A. de C.V., said Khazanah may recoup its investments in as soon as five years based on the hot response for its parks in Tokyo and Jakarta.

"The typical payback period for theme parks is around seven to nine years," said the Mexican entrepreneur who started the first KidZania in the Santa Fe Shopping Mall in Mexico City in 1999.

Entrance fees in Jakarta are priced around US$12-US$13 (RM42-RM46) for kids, while accompanying adults pay a lower price of about US$9 (RM32), Ancona said.

Other operating revenues also come from food and beverage sales and fees paid by marketing partners who want to put up their brands in the mock-up city.

KidZania also owns and operates another park in Monterrey, Mexico. It is building a third one in the country at Cuicuilco.

Outside Mexico, KidZania operates through franchise in Lisbon, Portugal; Jakarta, Indonesia and in the Japanese cities of Osaka and Tokyo. In Tokyo, tickets are sold out every day since its opening in 2006, with 955,000 visitors last year alone.

New KidZanias are coming up in Dubai, Seoul, Shanghai, Bangkok, Santiago (Chile), Mumbai and Istanbul.

By Business Times (by Chong Pooi Koon)

No major issue in finding new buyer for Iskandar land: Azman

KHAZANAH Nasional Bhd says it sees "no major issue" in finding new investments to replace the Dubai property developer which recently dropped a land purchase deal in Iskandar Malaysia.

Damac Properties (Malaysia) Sdn Bhd, one of Dubai's largest private developers, recently said it would not pursue the plan to buy land in Nusajaya for RM396.5 million.

"It's not a major issue. The Damac plot of land is a good site and there is interest shown for the site.

"We are confident there will be replacement coming in," Khazanah's managing director Tan Sri Azman Mokhtar told reporters in Petaling Jaya yesterday.

By Business Times

Mulpha confident of facing challenges

MULPHA International Bhd is confident of withstanding the challenges arising from the unprecedented global economic turmoil.

Its executive chairman, Lee See Huang, said companies faced problems and hoped for recovery to grow.

"We are confident of the quality of our developments and assets and have a strong balance sheet to ride out of the current economic storm," he told a media briefing after the the company's annual general meeting today.

Mulpha is involved in real estate and property-related and financial services, with operations and investments in Malaysia, Vietnam, Singapore, China, Hong Kong and Australia.

By Bernama

LaSalle ready to invest in Asian real estate

SINGAPORE: LaSalle Investment Management said yesterday it has US$3bil available for investing in Asian real estate and is ready to re-enter the market after nine months on the sidelines, focusing initially on Japan and Australia.

“The process of debt restructuring and market resetting and capital and economic stabilisation seems to be happening fastest in those countries,” chief investment officer for Asia Pacific Ian Mackie told the Reuters Global Real Estate Summit.

“Japan has had a price correction that has been very significant (and) people forget that Japan is still the second biggest economy in the world,” he added.

The US real estate investment firm, which has US$8.7bil in Asian assets, favours “gateway” cities such as Tokyo and Osaka in Japan and Sydney, Melbourne and Brisbane in Australia.

MacKie said LaSalle’s US$3bil war chest, most of it from a fund raised around the middle of last year, would probably translate into acquisitions worth US$6bil as the firm planned to keep debt levels low.

The firm, the investment arm of property services firm Jones Lang LaSalle, used to borrow up to 75% to fund an acquisition in Japan but will likely seek about 50% financing under current market conditions.

Asian property investment sales fell sharply in the second half of last year, hurt by a tightening of credit markets and a collapse in investor confidence following the collapse of Lehman Brothers in September.

For the first three months of 2009, investment sales fell 83% to US$3.1bil from a year ago, according to data compiled by rival property services firm CB Richard Ellis. The worst-hit markets were Japan, Hong Kong and Singapore.

Mackie said LaSalle invested in most types of property but was keenest on warehouses, hotels and offices. Besides Japan and Australia, its other preferred destinations include China and South Korea.

But the firm will probably give Indian real estate a miss as it feels the potential returns do not compensate for the risks.

“We have not seen an attractive investment in India in terms of risk-adjusted returns ... We can get the same returns in Japan and the risks are much, much higher in India,” he said.

LaSalle said that while it saw opportunities in Japan and Australia, it remained cautious about Asian real estate in the near-term and warned that a pick-up in home sales in China, Hong Kong and Singapore could be a “bear rally”.

Kenneth Tsang, the firm’s Asia-Pacific head of research and strategy, said the spike in apartment sales was driven by pent-up demand and low mortgage rates and may not be sustainable.

By Reuters

YTL to subscribe to Starhill REIT units

PETALING JAYA: YTL Corp Bhd will subscribe for up to 75% of the total rights units issued by Starhill Global Real Estate Investment Trust (REIT) under its proposed one-for-one basis.

In a statement to Bursa Malaysia yesterday, the company said it had entered into a sub-writing agreement with DBS Bank Ltd, Merrill Lynch (Singapore) Pte Ltd and Credit Suisse (Singapore) Ltd for the purpose.

Starhill Global REIT, which is listed on the main board of Singapore Exchange Securities Trading Ltd, has proposed to issue 963.72 million new units at issue price of 35 Singapore cents per unit.

As at June 22, YTL Corp has an aggregate deemed interest in 256.1 million units, representing about 26.6% stake in Starhill Global REIT.

By The Star

S'pore Starhill REIT rights issue to raise S$337m

SINGAPORE: Singapore's Starhill Global Real Estate Investment Trust yesterday proposed a rights issue to raise S$337.3 million (S$1 = RM2.43) to reduce debt and get new funds for possible acquisitions.

The property trust, which is controlled by Malaysia's YTL Corp Bhd (4677), will offer shareholders one new unit for every existing share held at S$0.35 per rights unit - a discount of about 45 per cent to the last closing price of S$0.64.

YTL, whose units own about 26.6 per cent of Starhill, will take up its entire allotment of rights shares and will subscribe for up to 75 per cent of the rights unit, the property trust said in a stock market filing.

DBS is the sole financial adviser to the deal and the rights issue will be fully underwritten by DBS, Merrill Lynch and Credit Suisse.

Starhill's assets include stakes in Wisma Atria and Ngee Ann City, two large malls on Singapore's Orchard Road shopping belt.

By Reuters

Oriental in RM200m hospital venture

Auto and plantation group Oriental Holdings Bhd (OHB) plans to open a RM200 million specialist hospital in Malacca in 2012 to strengthen its healthcare division.

Called the Melaka Straits Medical Centre, OHB will hold a controlling 51 per cent stake in the hospital that will be located in the new reclaimed coastal tourist township of Klebang in Malacca.

Boon Siew Sdn Bhd, the controlling shareholder of OHB, will hold another 20 per cent, followed by Bagan Specialist Centre with 29 per cent.

Boon Siew also holds the majority stake in Bagan Specialist Centre which is located in Seberang Prai, Penang.

"This 300-bed hospital will offer multi-diciplinary specialist healthcare services with niche specialisation in heart, lung and cancer treatment," OHB director Datuk Dr Tan Chong Siang told Business Times.

Dr Tan said Malacca was chosen because land was available. The reclamation project there is handled by Ultra Green Sdn Bhd, a construction and property development subsidiary of OHB.

The hospital is expected to create 500 new jobs. Construction is due to start in November this year.

"We choose to expand at this time of challenging economic situation because we see the synergistic opportunity presented in a field we have been involved in for the past 22 years," said Dr Tan, who is also the medical superintendent of Bagan Specialist Centre.

"It is a concept well received by the public from our track record, we believe we are ready now for expansion," he added.

According to Dr Tan, the existing hospital, Bagan Specialist Centre in Seberang Prai in Penang, operates on the basis of good quality at minimum cost, minimum discomfort and optimum speed. It plans to do the same for the new hospital.

In the year ended December 31 2007, Bagan Specialist Centre made a net profit of RM6.83 million on revenue of RM39.23 million.

As for OHB, its net profit eased 3 per cent to RM314 million in 2008 while revenue was up 14 per cent to RM5.1 billion.

By Business Times (by Vasantha Ganesan)

Khazanah: KidZania to be opened by 2012

KHAZANAH Nasional Bhd and its partner, Boustead Holdings Bhd, expect the indoor educational theme park, KidZania Kuala Lumpur, to be opened by 2012.

Khazanah managing director, Tan Sri Azman Mokhtar, said the RM50 million theme park would occupy about 60,000 sq ft at the new building in Mutiara Damansara.

"About 500,000 visitors are expected per annum," he told reporters after the signing of licensing agreement between Rakan Riang Sdn Bhd and KidZania SA de CV today.

Rakan Riang is a joint-venture company between Khazanah and Boustead.

Azman said the theme park was expected to create 400 jobs.

He said the company would announce the entrance fees soon.

Founder/chief executive officer of KidZania SA de CV, Xavier Lopex Ancona, said it cost between US$12 and US$13 to visit KidZania in Jakarta.

KidZania is a family entertainment centre where children play adult roles in a child-sized replica of an actual city with streets, buildings, shops as well as vehicles moving along its streets.

The first KidZania was opened in 1999 in the Santa Fe Shopping Mall of Mexico City. The others are in Japan, Indonesia and Portugal.

By Bernama

Malaysian builders set for 'fat years'

Malaysian construction stocks including Gamuda Bhd, IJM Corp and WCT Bhd are set to benefit from several “fat years” as the government accelerates a slew of development projects, Maybank Investment Bank Bhd said.

Prime Minister Datuk Seri Najib Razak is yet to award RM12 billion (US$3.4 billion) of contracts from two stimulus packages, Wong Chew Hann, a Kuala Lumpur-based analyst at Maybank, said in a report today. The first-quarter economic slump of 6.2 per cent underlines the need for faster project implementation, Wong said.

“The momentum of awards for construction jobs should quicken,” Wong said in the report, reiterating an “overweight” rating on the industry. “Tenders and awards ought to lift the valuations of construction stocks.”

The rollout of all outstanding contracts has the potential to trigger Malaysia’s first building boom since the Petronas Twin Towers and the Kuala Lumpur International Airport projects before the 1997-1998 regional financial crisis, Maybank said. Steelmakers, property developers and construction stocks are already among the year’s top climbers on the nation’s main index.

IJM, helping to build a tunnel for an interstate Malaysian water project, has almost doubled in 2009 and is the second-best performer on the Kuala Lumpur Composite Index. Gamuda, jointly building a railway in the north of Malaysia, has surged 33 per cent. WCT has jumped 27 per cent.

The government may hand out infrastructure projects valued at between RM8 billion and RM10 billion this year, followed by a similar total in 2010, Bank of America-Merrill Lynch said today after meeting executives at IJM and Gamuda.

More Spending

“The government will continue to spend, spend and spend,” Melvyn Boey, a Singapore-based analyst at Bank of America- Merrill Lynch, said in a report. Contracts awarded in the next 12 months to 18 months will have a “big multiplier effect” on the economy, Boey said.

According to Maybank, the funds from Najib’s two stimulus packages will coincide with the acceleration of spending under a five-year government industrial plan, devised before the current crisis, which stretches through 2010. Najib has an additional RM103 billion, almost half the entire allocation, to spend before the end of next year, Maybank said.

The biggest projects due by the middle of 2010 are the remaining components of a water-transfer project in central Malaysia, already partly awarded to IJM, that are probably worth a combined RM6.2 billion, Maybank said.

The government will also award a RM2 billion contract to build a low-cost terminal at Kuala Lumpur’s airport, and order an extension to a railway network in the Klang Valley surrounding the Malaysian capital, a job that might be worth as much as RM10 billion, the bank said.

Najib, who came to office in April and inherited the government’s smallest majority in more than 50 years, probably has only a 12-month window to implement the biggest projects in order to strengthen the economy before the next general election, due by 2013, Maybank said.

By Bloomberg

Muhibbah MD sees better year for infrastructure construction

SHAH ALAM: Muhibbah Engineering (M) Bhd sees better performance from its infrastructure construction business this year due to cheaper materials after the division posted losses last year.

Nevertheless, the current general business environment remains slow and a pick-up in the construction industry is not seen for another six months, said managing director Mac Ngan Boon.

Mac said the group’s infrastructure construction business was expected to perform better this year as raw material prices overall had decreased by 10% to 15%.

“Last year was a difficult period as we had to endure high prices for raw materials and scarcity of equipment for our heavy engineering works.

“Going forward, we see a trend reversal and that (will have a) positive impact on our ongoing jobs,” he told reporters after Muhibbah’s annual general meeting yesterday.

The company’s infrastructure construction division registered a pre-tax loss of RM21.5mil in its previous financial year ended Dec 31 mainly due to increased costs in oil, construction materials, transportation as well as other operating costs.

This had a negative impact on the company’s net profit, which fell to RM21.8mil from RM70.2mil in FY07, although revenue rose to RM2.1bil from RM1.4bil.

Mac said although the construction business was currently slow, “our present strength lies in the orderbook that should last another two years during which we can replenish our orders.”

“The secured projects also give us the choice to select projects that would be highly beneficial for the company and not just aggressively fight to get jobs,” he said, adding that the company had bid for jobs worth RM3bil for both local and overseas projects.

“But the market environment is more competitive today,” Mac acknowledged when asked on the success rate of the jobs tendered for.

Muhibbah’s order book for construction projects stands at RM2.6bil currently with 55% local projects and the rest goreign.

On its crane business, Mac believes that demand will be more robust in the latter part of the year.

By The Star

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