Pembinaan SPK to build villas in Abu Dhabi

PEMBINAAN SPK Sdn Bhd, a unit of SPK-Sentosa Bhd, has entered into a Arab Emirates Dirham 950 million (AED100 = RM98.15) deal with Aldar Properties PJSC to build 730 units of villas in Al Falah, Abu Dhabi.

Al Falah is a master planned community for UAE nationals as part of the Plan Abu Dhabi 2030 directive, which was launched early this year at the Cityscape Abu Dhabi exhibition.
The project will provide 5,000 homes for UAE families as part of the Abu Dhabi goverment’s housing initiative.

Apart from Pembinaan SPK, a spokesman said contracts have also been inked with Al Jaber Building LLC Abu Dhabi and El Seif Engineering Contracting Abu Dhabi for the construction of the 5,000 villas in Al Falah.

“However, Aldar Properties would not want to disclose the details of the contract at this stage.

It is anticipated that the project will be completed by the third quarter of 2012,” the spokesman told Business Times.
Meanwhile, SPK-Sentosa said its subsidiary, Pembinaan SPK had sealed a contract on July 15 with Aldar Properties for the construction and completion of 730 units villas in Al Falah.

In a statement, SPK-Sentosa said Aldar Properties has revised and reduced the contract sum and the scope of work from AED2.7 billion for the proposed construction and completion of 2,080 villas in Al Falah commmunity in Abu Dhabi to AED950 million for 730 villas under the revised Al Falah
project.

Aldar Properties, Abu Dhabi’s leading property company, was listed on the Abu Dhabi Securities market in 2004.

By Business Times (by Kamarul Yunus)

Genting S'pore resort may open by end-2009

Genting Bhd, Asia’s biggest publicly-traded casino operator, may open its S$6.6 billion (about RM16 billion) resort in Singapore before the end of 2009 and earn more than earlier estimated for the first year of operations, CIMB Investment Bank Bhd said.

The “quick pace” of construction could lead to a pre-2010 opening instead of early next year, CIMB said in a report today after a recent visit to the site in Singapore.

Genting may announce the resort’s opening date next month, it said.

The casino resort in Singapore is expected to generate S$690 million in earnings before interest, tax, depreciation and amortization in the first year of operations, more than twice CIMB’s previous estimate, CIMB said.

CIMB today raised its target price on Genting to RM9.40 from RM7.90. Shares of the company, based in Kuala Lumpur, gained 1.9 per cent to RM6.42 at 12:05pm, set to become the third-best performer on the Malaysian benchmark stock index today.

Genting’s Singapore project is one of two casino resorts the government has allowed to be built in the city-state as part of its goal to lure 17 million visitors and triple annual tourism revenue to S$30 billion by 2015. Genting Singapore Plc, partly owned by Malaysia’s Genting, said on June 25 the resort in Singapore is on track to open in early 2010.

Las Vegas Sands Corp, controlled by billionaire Sheldon Adelson, said on July 8 it will open its Singapore casino resort on schedule in January or February next year.

Justin Leong, Genting’s head of strategic investments and corporate affairs, didn’t reply to an e-mail or answer his mobile phone.

By Bloomberg

Another hotel by Etika Cekap in Gurney Drive

GEORGE TOWN: Etika Cekap Sdn Bhd, the owner of G Hotel at Gurney Drive, is investing RM100mil in another five-star hotel to be developed at Gurney Drive.

Phuah (left) with the Best Shopping Mall trophy and Battistotti (right) with the Best Hotel trophy, part of the CHT in Penang awards, with Danny Law

Etika Cekap and G Hotel director Phuah Choon Meng said the new hotel, tentatively called Baby G Hotel, would have 200 rooms.

“Located next to the G Hotel, the 22-storey building will have an iconic, environmentally friendly, and sustainable design theme,” he told a press conference on the achievements of G Hotel and Gurney Plaza shopping mall yesterday.

Also present was Penang tourism development and culture head Danny Law, and G Hotel general manager Marco Battistotti.

Phuah said research conducted by the company showed that there was room for another hotel in Gurney Drive.

“Since G Hotel started operations in 2007, it has managed to maintain over 75% occupancy rate per year, without snatching customers from the other hotels in the area.

“In 2008, G Hotel achieved an occupancy rate of 82%, and so far to June, it has already attained an occupancy rate of 79%.

“This shows that a well-designed hotel with the appropriate facilities can carve out a niche market for itself in Gurney Drive,” he said.

Last year, the other hotels situated in Gurney Drive, namely Evergreen Laurel Hotel and Gurney Resort Hotel and Residences, enjoyed over 80% occupancy rate.

By The Star (by David Tan)

Malton sees higher contribution with more projects

PETALING JAYA: Malton Bhd expects higher contribution from its construction division following the return of more building and infrastructure projects in the country.

In the past two to three years, contribution from construction projects undertaken by its subsidiary, Domain Resources Sdn Bhd, has overtaken property development as the main revenue contributor at the group level.

Hong Lay Chuan ...the company will be looking for projects in the region

According to executive director (projects) Hong Lay Chuan, Domain only started to undertake external construction projects earlier this year.

“Our objective is to achieve a 70:30 ratio of external and internal projects. We believe this will optimise our resources,” he told StarBiz.

Its current projects comprise the construction of property projects and other related infrastructure development for its parent as well as for third party clients.

Currently, Domain has an order book of RM680mil.

Its ongoing projects include the construction of the Carrefour hypermarket complex in Bukit Rimau and the design and redevelopment of the former Jaya shopping centre in Section 14, Petaling Jaya.

The contract for Carrefour is worth RM34mil and the Jaya project is RM175mil.

Hong said Domain would be tendering for other projects, including RM534mil worth of in-house property projects and RM305mil external contracts, including an aircraft hangar in Subang and a commercial project in Putrajaya.

“Besides Malton’s in-house property projects, there will be more project design, build and management contracts for other clients. Going forward, the company would be looking for projects in the region as well,” he added.

Meanwhile, property development projects are also expected to make a comeback after the soft market sentiment of the past three quarters.

Malton executive director (sales and marketing) Fong Kin said that although the prevailing market sentiment had been quite soft, “it has been quite stable for us with monthly sales of RM30mil these past few months.”

For the financial year ended June 30 (FY09), the company is expected to turn in RM400mil in sales, a marginal increase over the RM394mil registered in FY08.

The company’s landbank include 56 acres in Ukay Springs that are planned for semi-detached houses and bungalows with potential gross development value (GDV) of RM500mil.

Another parcel is a 2.7-acre site in Taman Maluri earmarked for mixed development with service apartments, office suites and retail podium worth RM210mil. The project will be launched by year-end.

Development plans for its 67 acres in Sg Long, Cheras are under way while its 0.67-acre plot in Petaling Jaya will have service hotel suites worth RM70mil. It also has 17 acres in Seremban that will be turned into a RM160mil project comprising bungalows and shop offices.

Fong said more environment-friendly themes starting with the Ukay Springs project would be introduced into the company’s projects in future.

They will have designs that promote greater energy and water efficiency, better natural ventilation and water harvesting features.

Malton has seven ongoing projects including the Bukit Rimau township development, high-end residences and commercial projects with a total GDV of RM1.5bil, according to Fong.

Of this, RM900mil worth of properties have been sold.

One of its latest lifestyle offerings is the high-end gated development called The Grove in SS23, Petaling Jaya.

The 4.8-acre freehold project comprises 35 bungalows priced from RM3mil to RM3.8mil each.

Other developments include The Pearl @ KLCC and Amaya Saujana @ Saujana Subang.

The Pearl @ KLCC is a high-end condominium project along Jalan Stonor.

On 6 acres oppositve Saujana Golf Resort, Amaya Saujana comprises three 13-storey residential suite blocks with a total of 378 units priced from RM605,000 to over RM2mil. It has a GDV of RM285mil.

On the adjoining three-acre parcel will be a commercial development currently under planning.

Malton is also building the V-Square - an integrated commercial project comprising two corporate towers, a corporate business suite block, and two blocks of corporate offices, with retail space on the ground floors.

The 2.6-acre project in Jalan Utara, Petaling Jaya is scheduled for completion in 2011 and will have a GDV of RM240mil.

By The Star (by Angie Ng)

RM20m facelift for TAE head office

PROPERTY and financial services firm TA Enterprise Bhd (TAE) plans to spend some RM20 million on the facelift of its corporate headquarters in Kuala Lumpur, as it seeks to raise rental and higher yield.

The 34-storey Menara TA One on Jalan P. Ramlee is currently tenanted for an average of RM4.50 to RM5 per sq ft.

It is learnt that TAE is getting about five per cent yield per year from the property, but it wants to increase this to over seven per cent.

"TAE is still mapping out the plan. It hopes to start upgrading works on the building by the end of this year. It will add new security and improve the quality of the building," a source familiar with the plan said.
TAE managing director and chief executive officer Datin Alicia Tiah confirmed the company's plan to upgrade Menara TA One as part of plans to raise its rental rates.

She said TAE will move its non-essential operations such as TA Securities, TA Futures and TA Investment Management from Menara TA One to Wisma Dijaya in Damansara Utama, Petaling Jaya to spearhead the plan.

TAE is buying the four-storey Wisma Dijaya for RM26 million from Elite Meridian Sdn Bhd, which is controlled by Tan Sri Danny Tan Chee Sing, who is group chief executive officer of Dijaya Corp Bhd.

"There is no point for us to occupy a few floors in Menara TA. I prefer that we move out some of the operations so that we have more space to rent. That way, we can command a better yield.

"We will be doing this from the fourth quarter of this year," Tiah told Business Times in Kuala Lumpur.

Wisma Dijaya currently houses Dijaya Corp's headquarters, but the company is expected to relocate its operations to the 12-storey Tropicana City Office Tower at Tropicana City in Petaling Jaya.

Tiah also said TAE plans to develop the 31.5ha freehold commercial land in Bukit Beruntung, Selangor, into a commercial and industrial development, worth over RM500 million, from 2011.

TAE is buying the land from Europlus Corp Sdn Bhd, which is part of Talam Corp Bhd, for RM44.9 million cash. The land deal is expected to be completed by January 31 2010.

"Bukit Berunting is coming up. The land we have is located next to Tesco's distribution centre. There are other pipeline developments in the area, which will help boost our project when we launch it," she said.

By Business Times (by Sharen Kaur)

Million-ringgit terrace houses

Desa ParkCity

The Nadia terrace houses in Desa ParkCity

This development had two things working against it initially – it was previously a quarry land and its not-exactly-glamorous Kepong address.

Beating these odds is developer Perdana ParkCity, a company owned by timber-based Samling group which acquired 473 acres of the part-rubber part-quarry land for RM200mil (or less than RM10 per sq ft) in 1999 from Danaharta during a depressed market.

It’s been seven years since its first launch of strata titled terraces Nadia at RM548,000 a unit. At that point, there were many sceptical buyers who were yet to warm up to the idea of paying service charges for landed property. However, home prices have spectacularly risen two-fold since.

The development’s most striking feature is its 43-acre lake and park right in the centre.

Perdana ParkCity director of marketing and sales Susan Tan says almost all its launches have takeup rates of 80% within the first three months. Of the 2,000 units launched, 1,500 have been delivered. Expatriate families make up 6% of the area.

Greg Poarch bought his Adiva unit in 2004 and stays with his wife Nancy, daughter Lee-Ann and poodle, Gracie.

Jobstreet Corp Bhd chief financial officer Greg Poarch, who bought his Adiva unit in 2004, says he’s seen nothing like it elsewhere in the country. “It’s got a Southern California kind of atmosphere. The whole environment is so peaceful and relaxing.”

What drew him to settle there? He says it was the gated security feature and the community environment with lots of green spaces.

“It’s not like living in a city at all. Pricing may be premium but it’s worth it,” he says.

The project’s most expensive terrace is Zenia which is going for around RM1.3mil per unit in the secondary market which was launched in 2005 at RM890,000 apiece. In August, its clubhouse will be ready. Also, Desa ParkCity has a design, build and lease agreement with Sime Darby Medical Hospital in which the latter will start constructing a secondary private hospital by early next year. Construction of an international school will also begin next year, where enrolment will start in 2012.

Sri Tanjung Pinang

An artist’s impression of the Sri Tanjung Pinang waterfront project.

Set against the backdrop of sun, a grand view of the sea and a hill in Penang island, Eastern & Oriental Bhd (E&O) has built a mammoth waterfront project.

E&O acquired the rights to reclaim the land from the then debt ridden UEM/Renong group in 2003. Reclamation of the headland in phase 1 totalling 240 acres has been completed. The company is now working closely with the authorities in planning the layout of phase 2, totalling 740 acres.

E&O executive director Eric Chan says Sri Tanjung Pinang (STP) is the largest and first city-based international class seafront masterplan in Malaysia. He says it is different because it has international appeal.

“The place is well-organised with beautiful landscaping and big spaces. It is also close to the sea which I love. I’m staying here till I die!” remarks former agronomist Dutchman John Pater who has travelled all over the tropics studying coffee and cocoa during his career.

A friend had recommended STP to Pater’s wife Anita, who had fallen in love with it at first sight and purchased it before telling her husband.

“It’s so pretty. We love the high ceilings and all the details. Once the marina is completed, we’ll get to do a lot more fine dining and shopping,” says Anita who is resident committee chairman for STP.

With that, some say this location is an extension of the new “millionaire’s row” along the bay from Gurney Drive. STP terraces are presently yielding rental yields of 9% to 10%. “Our buyers are mainly locals, about 90%. Our subsequent launches have seen a lot of repeat buyers,” says Chan.

Two weeks ago, E&O launched the second last phase of 28 terraces at STP at RM1.1mil per unit and were sold out within hours.

Direct sea-fronting intermediate units were priced at RM1.52mil, a new record for Penang and arguably the most expensive link house in Malaysia in a new township. Terraces in STP were first launched in 2005 at RM735,000, when homes built on reclaimed land were still not well accepted.

Chan adds that there are four factors which have contributed to the success of STP terraces.

“We’ve got a prime address with easy accessibility. We’re landed and freehold. Our craftsmanship is innovative and there’s quality design. Lastly, the proven track record and branding of E&O as a developer of premier properties also helps,” says Chan.

A milestone for the project is when it completes its marina by June 2010 which will include food, beverage and retail outlets.

Participant of the Malaysia My Second Home Programme Thomas Alexander Craig Cameron from the United Kingdom, moved into his STP unit in March this year because his Malaysian wife wanted to be close to her family.

“We thought STP homes were so much better than anything else we saw in Malaysia. I have stayed in the UK and France. This is so far the best,” he gushes.

Phase 2 of the multi-island development will be of international quality with a 5-star hotel and boutique resort, a championship golf course, marina beach clubs and seafront residences with private berths.

Once completed, Chan says it will be comparable to world class waterfront communities such as The Palms in Dubai and Sentosa Cove in Singapore.

Mutiara Damansara

In less than a decade, Boustead Holdings Bhd has raised the profile of Mutiara Damansara (MD) as one of the most sought after addresses in the Klang Valley.

The development’s most striking feature is its bustling commercial centre; it is home to large retailers Ikea, Ikano, Tesco and in a few years time, Kidszania, a theme park for kids. Luxury auto marques such as Lexus and Mercedes-Benz have grand showrooms there.

Mutiara Damansara is built on former plantation land acquired by Boustead Propeties from the Government.

“With the entrance of big retail players and multinationals, property values literally skyrocketed,” says Hall Chadwick Asia chairman Kumar Tharmalingam.

Being next to well established TTDI and Bandar Utama, it was rather easy for Boustead to rake in the sales. In fact, it could well be the only developer that has sold all its terraces using the balloting system. Boustead launched its first terrace homes in 2000 at RM350,000, which has since doubled to RM680,000 in the secondary market.

In 2007, MD launched its most expensive terraces at RM1.2mil. These homes are now priced at around RM1.6mil.

Dr Tan KK, a doctor with private hospital group, chose to buy a unit in MD because of its nice mix of terraces, semi-ds and bungalows. MD also has better density and more space.

“It is suitable for families. Inside the neighbourhood, you feel secure because of the secured parameters and exit points. And just outside, you get a well designed mall with lots of good eateries and night spots for families,” he explains.

Boustead Holdings Bhd’s director, Datuk Ghazali Mohd Ali says that emphasis is on low-density and semi-guarded housing with excellent infrastructure and access.

Presently MD has 5 access roads with plans for a sixth access soon to cater for the up-market commercial traffic.

Moving forward, Ghazali says the focus will be on its corporate and entertainment lots.

“We are going to build a hotel, tentatively named Royale Bintang Surian Hotel, located behind Cineleisure,” says Ghazali.

Boustead will complete construction of the hotel within 18 months.

Ghazali says that the conference facilities will boost daytime traffic to The Curve and nearby developments, which are already experiencing peak traffic during weekends and at night.

Duta Tropika

Duta Tropika, Sri Hartamas by SP Setia Bhd is an exclusive, low-density community with only 138 residences comprising courtyard and garden villas on 13 acres.

It was launched in 2005 at a developer’s price of RM1.5mil to RM1.8mil. Today, these cluster homes have almost doubled, and are now being transacted at an average price of RM3.05mil.

Some Duta Tropika courtyard houses can be seen on the left of Tan Sri Liew Kee Sin.

SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin says that back in 2006, concept projects were not really heard off.

“On top of the design which captivated our buyers, Duta Tropika also offered a gated and guarded development that was not common then. The development also came complete with a clubhouse with pool, gym, hall and children’s playground. Coupled with good maintenance, this has led to the prices the properties being what they are today,” says Liew.

Liew says SP Setia always believes in adding value to its products as this is the key in attracting buyers. “Must-haves would depend on the surrounding area. In Duta Tropika’s case, Sri Hartamas’ selling point is that it’s adjacent to Mont’Kiara. Several years ago, this would not have been an ideal prime spot but when you add value to the development and assure customers that you will follow through with your plans, this is what attracts them,” he says.

Liew cites the example of SP Setia’s flagship Bandar Setia Alam. When first launched, many perceived that distance was going to be an issue.

Today after more than 5 years since its launch, Setia Alam is selling at an average of 25% more than the surrounding developments.

“We feel this has to do with the fact that we pumped in RM150mil for the exclusive interchange among many other amenities that we have since put into the township,” he says.

As land in prime areas become more scarce, Liew sees prices going up.

“It’s not so much that terrace homes are the more preferred abode but like I mentioned before, it has to do with the scarcity of land that it is not possible to indulge in larger homes and bigger land areas,” he says.

Niche Development

Just minutes after taking the North Klang Valley Expressway from Kuala Lumpur to Sungai Buloh, one travels past the gated and guarded resort themed residential enclave Valencia.

Selectively, some of its terraces have surpassed the million ringgit mark.

Developed by Valencia Development Sdn Bhd (a wholly-owned subsidiary of Gamuda Bhd), this development houses 714 homes including 224 garden and hillside terrace houses.

The terraces were launched in 2002 at an average price of RM650,000. Today, property agents familiar with that area say there have been a few terraces transacted above RM1mil

“Its not broad based but there have been some transactions. Its the gated community appeal,” says a property agent covering the SierraMas vicinity.

Meanwhile, located in Federal Hills, or Seri Bukit Persekutuan, off Jalan Travers, sits another million ringgit private residential estate by the IGB group.

Among its myriad of homes, 38 units of its 3½-storey townhouses, Westbank Terraces were launched in 2003 priced from RM1.3mil to RM1.96mil

Today, the townhouses are asking for RM2.33mil or RM613 per sq ft. Based on its developer price, the town houses are also yielding rental rates of 6% to 7%.

There have also been million ringgit transactions of old terraces in Jalan Terasik Bangsar, and off Lorong Maarof in the Bangsar Shopping Complex vicinity.

By The Star

Rising appeal of terrace property

A new trend is emerging in the property sector. Prices of many intermediate terraces in new townships have breached the million ringgit mark on the back of rising demand for these properties. And it is worth taking note particularly because these terrace homes are in areas nowhere close to being considered prime 10-15 years ago.

Driving home this point further is the Sri Tanjung Pinang project in Penang developed by Eastern & Oriental Bhd (E&O) launched two weeks ago; it managed to sell all its intermediate terraces and the highest price achieved was RM1.52mil.

Talks with realtors and industry experts reveal that one of the first million ringgit terrace in a new location was spotted at Kuala Lumpur’s Desa ParkCity (DPC) in 2008, followed by Petaling Jaya’s Mutiara Damansara (MD) in early 2009.

Noteworthy is that this rising trend has persisted despite the global economic recession which has led to a slowdown in Malaysia’s economic growth.

How to build a million-dollar link home

In the distant past, seven-digit price tags were exclusively reserved for super prime areas such as Damansara Heights and Bangsar.

Today, such premium prices are being fetched in areas which have historically never been deemed prime.

Metrohomes Sdn Bhd director See Kok Loong says credit should go to the three developments – Desa ParkCity, Mutiara Damansara and Sri Tanjung Pinang – for turning non-prime land into an address that home owners want to be associated with.

These developments share some common features – they involve an area large enough for a master-planned neighbourhood. This, says an industry observer, is key as it avoids having developments that conflict with each other within the same development, for instance heavy traffic commercial development in a low density residential section.

Secondly, these developments have dominant lifestyle themes such as sea-front or lakeside living. Having a lifestyle-driven commercial development such as a marina or box-concept shopping malls (for example warehouse-type one-stop shop Ikea, Ikano and Tesco) quite clearly increases the appeal of a property project.

In addition, the market seems willing to pay premium capital values and monthly service charges for units that are more spacious in low density and secured neighbourhoods with club facilities such as pools and gyms.

The gated appeal

KGV-Lambert Smith Hampton’s director of valuation Anthony Chua explains that price appreciation of terraces in Mutiara Damansara and Desa ParkCity has been faster than the more established Bandar Utama, largely because they were one of the first to introduce the gated community scheme.

“Older terrace estates are not designed to be gated and have too many entry points. The developer offered the buyer a lifestyle concept, whether it’s sea fronting or lakeside living,” says Chua.

Hence, the buyer gets the best of both worlds. They get to stay in a landed property, but enjoy condominium facilities.

For that reason, the price appreciation for intermediate terraces in these areas have been remarkable, far surpassing the national average of 3%. Desa ParkCity has seen prices go up by 14% per annum, Mutiara Damansara 10% pa and Seri Tanjong Pinang by 12% per annum while the units in Bandar Utama have appreciated by merely 5%.

Managing director and regional head of equity research at AmResearch Benny Chew says properties in these areas have reached prime area status. “Most of the developer’s land in these prime areas are getting very limited, hence the effective physical supply is lessening. This mismatch will cause prices to increase.”

HwangDBS Investment Management Sdn Bhd Head of Equities Gan Eng Peng says there will come a time when we can no longer expect to buy a terrace house for under RM1 million.

“As in more developed countries like Singapore or even Thailand, land prices in the city center start range from RM2,900 to RM4,900 per square feet (SGD1,200 at current exchange rate) compared to KLCC properties that are deemed expensive at RM 900- RM1,500 per square feet (psft),” he says.

Gan says that if a developer were to launch terrace houses today with decent security thrown in within central Klang Valley, there will be very strong demand.

“High terrace houses prices are not deterring buyers,” he says.

New cycle?

See says this could be the start of a new property cycle for landed property.

“Personally, I feel the property market is driven by government policies and interest rates. The low interest rates will drive housing. None of the owners are selling. Everyone seems to have holding power. Besides, low cost of funding allows the owners to refinance,” he adds.

He says these homes will set the new benchmark pricing for upper-middle class demand, as old-school developers cannot offer features like a clubhouse and security.

Meanwhile, Chua sees such terraces easily appreciating by 5% to 7% per year. Due to the continuous huge pricing gap between semi-detached and bungalows compared to terrace houses, Chua expects to see more such million ringgit houses coming on board.

Gan explains that the typical investor’s largest asset class tends to be properties, followed by banking deposits and investments.

“If there is no inflation in properties and no million dollar terrace houses, it would be disastrous for the economy. Because that would mean no wealth creation for the typical investors/household largest asset class. Without wealth creation from properties, consumers are less willing to spend. Banks will be less willing to lend as their collateral does not appreciate. Generally, a healthy economy requires higher property prices,” he says.

By The Star (by Tee Lin Say)

Giant wholesale city in Klang

TSI Holdings Sdn Bhd is developing the largest wholesale city in Malaysia and the South East Asia region on 14.5 acres in Klang with gross development value (GDV) of more than RM1.5bil.

Lim Seng Kok ... We do not offer freebies or gifts to buyers to purchase the properties but will give quality products.

Group managing director Lim Seng Kok says that when the development is completed, the city will have more than 2,000 units of shops solely for wholesale business.

“The development is divided into four phases that will take 8 to 10 years for completion. The first phase is going to be opened in October or November this year, comprising about 200-odd single storey shops where all the units are for lease only for wholesale business,” he tells StarBizWeek.

He says that for the second phase, the group has already submitted plans for approval and will do the launching in the middle of next year.

“The first phase is only for lease but for the next phase, we are going to sell the shops to those in the wholesale business,” he says.

TSI Holdings started its business in 1987 as specialised contractors with projects locally and in the international market such as Indonesia, Thailand, Singapore and Qatar.

The group ventured into property development in 2000 and have accumulated about RM760mil in completed developments in Cheras, Kuantan and the city of Kuala Lumpur.

To date, TSI have completed more than 1,800 units of properties with GDV of about RM500mil. About RM2bil of development is still in the pipeline.


Artist’s impression of the pool view of First Residence in Kepong Baru.

Lim says another project launch this year by the group is First Residence in Kepong Baru, Kuala Lumpur with GDV of RM166mil, comprising two levels of shops and 474 units of condominium in two towers, scheduled for completion by the middle of 2011.

“We did the soft launch for Block A after the Chinese New Year and to our surprise, the sales were overwhelming as almost all the non-bumi units were sold off,” he says adding that though the current market condition is slow for property sector, the group doesn’t feel the pinch at all.

“We always believe that with the right products design that can meet the requirements of buyers, the market is still there for us to continue our business,” he says.

He adds that the group does not offer freebies or gifts to its buyers to purchase the properties but will give quality products.

The group has recently launched the second block (Block B) to meet the demand from the market.

The condominium range from 930 sq ft to 1,450 sq ft and priced from RM233,000 to RM333,000 while the shops are priced from RM700,000 to RM1.2mil.

“This development will be the first in the market to offer 32 facilities for its resident on a 20,000 sq ft podium, such as karaoke rooms, yoga room, reflexology path, etc,” he says.

For upcoming development, Lim says the group will launch a mixed residential development in Puchong by early next year that consist of 520 units of condominium and 12 units of conventional shops with projected GDV of over RM130mil.

By The Star (by Edy Sarif)

TAE's growth drivers

TA Enterprise has commercial and residential projects with a total gross development value of about RM6 billion to be launched from now to 2012

TA Enterprise Bhd (TAE) said its property business will drive the group's growth for the next few years, with a portfolio possibly worth RM6 billion comprising five new residential and commercial projects in the Klang Valley targeted for launch between now and 2012.

The property and financial services firm, which has over 400ha of undeveloped land, will also buy or build one hotel a year to grow its hotel portfolio, possibly under the Aava brand, managing director and chief executive officer Datin Alicia Tiah said.

"While we are focused on the new (property) launches, our aim is to build our hotel portfolio. So, if any irresistible deals come by, we will buy. Now is the best time to buy assets as they are cheap and the exchange rates are low," she said after the company's annual general meeting and extraordinary general meeting in Kuala Lumpur yesterday.

TAE is looking for new assets to buy in Malaysia, Canada and Australia.
It is also eyeing new markets such as Hong Kong and London, and other cities close to financial centres.

Tiah said TAE has over RM400 million in its coffers to use for asset acquisition.

The group now runs Radisson Hotel (Sydney), Aava Whistler hotel (Canada) and Westin Hotel (Melbourne). It paid almost RM700 million for the properties.

It is buying Swissotel Merchant Court Singapore, owned by Singapore's Merchant Quay Pte Ltd. It is learnt that TAE will pay more than RM250 million for the hotel deal, which will conclude by August 25.

TAE is also building a six-star and a five-star hotel, located directly opposite the Petronas Twin Towers and at the Jalan Bukit Bintang/Jalan Imbi junction in Kuala Lumpur, respectively. They form part of TAE's new projects.

"I believe the worst (of the economic crisis) is over. You can see some green shoots, even in the US.

"We hope that by the time we launch our new projects, the market would have recovered. We will undertake piling works first before launching to minimise risks," Tiah said.

TAE expects to do better this year, thanks to housing sales at its ongoing projects, and the acquisition of new investment assets which have contributed immediately to earnings, Tiah said.

Last year, TAE made a net profit of RM91.9 million on revenue of RM535.4 million.

"Our net profit fell by 59 per cent last year as we made heavy provisions. I am very confident to write back 80-100 per cent of these this year.

"The stock market performance will be better than last year. So this year, we also expect to do better as far as financial services are concerned," Tiah said.

By Business Times (by Sharen Kaur)

TA Enterprise to launch projects worth RM2bil next year

KUALA LUMPUR: TA Enterprise Bhd plans to launch a few property projects with a total gross development value (GDV) of over RM2bil next year due to an improving real estate market, said managing director and chief executive officer Datin Alicia Tiah.

The projects include a boutique residential development at Jalan U-Thant with a GDV of RM110mil and a condominium development at Dutamas worth RM300mil in GDV.

Also in the offing was a long-term mixed commercial development in Sri Damansara with an estimated GDV of over RM3bil over seven to 10 years, she said.

“The worst is over and greenshoots are emerging in the US market. The economic activities are still good but there is a lack of confidence,” Tiah told a press conference after the company AGM yesterday.

The company plans to launch shop-offices and small home office units in the first quarter next year and a mixed commercial development project opposite the Petronas Twin Towers in 2011 and another mixed commercial development in Bukit Bintang in 2012.

Tiah said its property segment contributed about 75% to group profit in its financial year ended Jan 31 (FY09) with the remainder from financial services.

“We expect to have a (more) balanced portfolio in FY10, particularly when the market is maintaining growth momentum,” she said.

Tiah sees TA’s property segment, with more than 1,000 acres of undeveloped landbank, to continue driving the group’s growth at least for the next three years.

TA also aims to build or acquire a hotel every year, according to Tiah.

It currently has three hotels – Radisson Plaza in Sydney, The Westin Melbourne and the Aava Whistler in Canada.

The company recently proposed to buy Mauritius company Quayside Gem Ltd, which owns Merchant Quay Pte Ltd of Singapore.

Merchant Quay is the owner of the four-star hotel Swissotel Merchant Court Singapore.

On the outlook for FY10, Tiah said the company expected a better performance due to the improving business sentiment as well as good take-up rates for its properties.

The group’s net profit slumped 59% to RM92.3mil in FY09 mainly due to the lacklustre performance and thin trading volumes on Bursa Malaysia and high provisions totalling RM50.6mil for impairment loss on financial receivables and investments.

“We expect to write back 80% to 100% of our provisions in this financial year,” Tiah said.

TA currently has a net cash position of more than RM400mil and unbilled sales of RM61mil.

On plans to list its property arm, TA Global Bhd, Tiah said it would be done by early November.

By The Star

Syed Yusof builds a niche

Businessman Tan Sri Syed Yusof Tun Syed Nasir is returning to property development and building niche properties for high net worth people.

Syed Yusof, or JoJo as he is fondly known, the third child of the late Tun Dr Syed Nasir Ismail, Malaysia's first Parliamentary Speaker, is in the midst of evaluating several pieces of land to buy.

"My partners and I have been approached by landowners. We are looking at it," Syed Yusof told Business Times in a rare interview.

Syed Yusof's maiden property venture was Pandan Cahaya, an abandoned low-cost housing project in Pandan Jaya, Kuala Lumpur, which he took over just after the Asian financial crisis in the early 1980s.

"The project was a challenge, but I found property development an interesting field," he said.

The 62-year-old businessman, who is married with three children, loves expensive cars, Harley-Davidson motorcycles and all things beautiful that captivate the rich and famous.

But his real passion is to own and operate a string of boutique hotels, resorts and themed cafes, and develop niche housing.

For this, he has partnered Malaysian-born tycoon Ong Beng Seng, 64, who was last year voted as Malaysia's 14th wealthiest businessman with a net worth of US$470 million (RM1.6 billion). The minimum net worth to make the list is US$90 million (RM317 million) and Syed Yusof was also voted in after cashing out of Southern Bank Bhd in 2006 and making new investments.

Today, the flamboyant tycoon with his striking pair of spectacles partly owns 10 hotels and resorts in Malaysia, Bali, Pataya and the Maldives.

They include Concorde Hotel Kuala Lumpur, Concorde Shah Alam, Concorde Inn Sepang, Concorde Singapore, Hard Rock Hotels in Bali and Pataya, The LakeHouse in Cameron Highlands, Rihiveli Beach Resort in Maldives and Casa Del Mar, Langkawi.

The properties are parked under HPL Hotels & Resorts, a unit of Hotel Property Ltd Group (HPL Group) controlled by Ong.

New developments include a boutique hotel known as Casa Del Rio in Malacca, and Malaysia's first Hard Rock Hotel in Penang.

Syed Yusof, who was not exactly born with a silver spoon, graduated with an economics degree from the University of Tasmania in Australia in 1975.

He joined Petroliam Nasional Bhd in 1976, handling various management positions before calling it quits in 1983 to become an entrepreneur.

Syed Yusof was toying to build houses when he came across the Pandan Cahaya development.

Following that, he formed Prima Damansara Sdn Bhd to build shoplots, medium-cost apartments and 800 low-cost houses in Sungai Buloh, Selangor.

He was awarded a Datukship in 2002 by the Selangor ruler, Sultan Sharafuddin Idris Shah, and Tan Sri in 2007 by His Majesty Seri Paduka Baginda Yang di-Pertuan Agong Sultan Mizan Zainal Abidin.

Syed Yusof helmed Southern Bank in 2004 and in the same year made a move to go up a notch and set up Sierra Damansara Sdn Bhd to construct exclusive gated bungalows and semi-detached houses in the sought-after Kota Damansara enclave.

He is now planning the RM2 billion six-star Four Seasons Hotel, serviced apartment and mall project next to the Petronas Twin Towers, via ISY Holdings Sdn Bhd, a firm he set up with the Sultan.

Syed Yusof is a long-time childhood friend of the Sultan. Their fathers were also friends.

In Australia, Syed Yusof said he owns seven Dome Cafes and has property development activities.

"I'm always on my toes but I manage my time well. I start my day at the gymnasium and when I'm at work, I am full fledged. I love the islands and yachting and that is what I do when I need a break. Otherwise, I would travel between Malaysia, Australia and Singapore," Syed Yusof said.

Syed Yusof is currently the chairman of pipemaker YLI Holdings Bhd and he has a stake in investment bank K&N Kenanga Bhd.

He owns Saloma Theatre Restaurant on Jalan Ampang, Kuala Lumpur and has interest in the Hard Rock Cafe and Planet Hollywood restaurants, where he is looking to expand.

Syed Yusof also runs Jo-Jo Entertainment, which has brought in international stars like Michael Jackson, Gloria Estefan, Kenny G and Sting to Malaysia.

By Business Times (by Sharen Kaur)

Keeping to a time-tested adage

Although potential property buyers are taking a longer time to make up their mind on whether to proceed with a purchase, the time-tested adage of the property business still holds true. Good quality property products in the right locations that are priced competitively will not face difficulty in finding buyers.

However, the impending removal of most of the housing packages offered by developers to attract buyers will mean that any sales realised will be dependent on the intrinsic values of these property products and how attractive they are.

Buyers have to accept the fact that developers are not about to continue with their housing packages indefinitely as these facilities incur higher cost.

As buyers only need to fork out 5% or 10% of the purchase price depending on the facilities signed for, developers have to service the interest charges to the financiers for between two to three years during the project construction period.

They are also bearing all the legal fees and stamp duty on the sale and purchase agreement, loan agreement and memorandum of transfer.

The consolation is that these facilities have translated into low entry cost for buyers and have contributed to the higher sales of the past few quarters.

Post-housing packages, whether the sales numbers will continue to flow in will largely depend on whether there is a major turnaround in the people’s sentiment.

Generally the prevailing sentiment is still one of caution. This has resulted in more developers resorting to redesigning and repositioning their projects into more affordable range which have lower profit margins.

A number of projects that have been launched lately have smaller built up space to ensure they are priced lower.

It is a fact that competition will continue to heat up and developers will be faced with more challenges on the horizon.

How well they hold up to the competition and overcome these challenges will have a great impact on their performance and market’s sustainability going forward.

The lull in the market of the past few quarters should have given industry players sufficient time to undertake some serious business restrategising plans and product research and development initiatives.

It looks like industry players still have some way to go before regaining their previous confidence (before the global financial crisis sets in last September) where they have no qualms about having multiple project launches.

These days, developers have to really tune in to buyers’ needs and the realities of the current times when planning their projects.

They have to conduct their business differently and come out with more “out of the box” project designs and plans.

The projects are likely to be of smaller scale and with less units.

One of the projects that should be able to hold out quite well will be well designed and moderately sized apartments and small office home office units in Kuala Lumpur’s inner city or the peripherals areas just outside the city’s central business district.

There are many young executives and professionals who are looking to move into these residences to enjoy the conveniences of city life, yet cannot afford or are not ready to commit to buy one of the high-end KLCC residences.

To ensure a more “smooth landing” for industry players, it will certainly help if the Government adopts more market liberalisation measures to create a level playing field for property players.

Industry players, through Real Estate and Housing Developers Association (Rehda), want the Government to urgently look into the bumiputra quota release mechanism to ensure a standardised, structured and transparent system is in place so that developers will not be unneccesarily burdened by the high holding cost of these unsold bumiputra units.

There is a need for an automatic release of the quota units after six months of a project’s launch or when a project has reached 50% in its construction, whichever is earlier.

Meanwhile, to help the lower income group, it will be fair to cap discounts for bumiputra buyers at 5% of a property price and such discounts should only be applicable for houses priced at RM250,000 and below.

Purchasers for a higher priced property are better off financially and will not need a discount. Currently, the different states impose different discounts ranging from 5% to 15% for bumiputra buyers.

Deputy news editor Angie Ng believes it is timely for more proactive collaboration between developers, the Government and common folks to promote strong bonding, good neighbourliness and mutual respect.

By The Star (by Angie Ng)

State-of-the-art security features for Puteri Harbour

Puteri Harbour in Nusajaya, Johor, will be equipped with state-of-the-art security features estimated to cost some RM20 million.

Among features planned include individual security centres in every building within that 405ha area and these to eventually be linked to the Puteri Harbour security command centre.

Phase One of the waterfront development's safety and security blueprint costing RM3m is already up-and-running at the marina and clubhouse.

The emphasis on security is one of Puteri Harbour's strongest pull factors, says UEM Land Bhd general manager (waterfront development) Zamani Kasim.

At present, 46 closed-circuit television cameras encircle the marina and clubhouse, some equipped with a "help" button.

"When the 'help' button is pressed, the cameras located closest to it will zoom in and you'll be able to speak to an officer at the command centre.

"Our command centre is manned by fully-trained security officers," he told Business Times yesterday.

"We're willing to spend significant sums on the safety and security because of the high-end nature of Puteri Harbour. We're also fully aware of the security concerns of the individuals who choose to come here," Zamani said.

On the search for a new investor to replace Middle East developer Damac Properties, Zamani said UEM Land hopes to find a suitable replacement by the year-end.

"We are now in talks with several parties but have yet to make our decision," he said, referring to the developer which, in June, backed out of a deal to invest in Puteri Harbour.

Damac pulled out from an arrangement to buy 17.4ha of land for RM396 million. Zamani said Damac had faced some financial difficulties.

Puteri Harbour is an integrated waterfront development offering harbourfront residences, offices and retail and entertainment outlets as well as berthing facilities for yatchs of various lengths.

The marina and clubhouse are already in operation, while the ferries and water taxis are expected to be operational by 2012.

By Business Times (by Anis Ibrahim)

CapitaLand registers first quarterly loss since 2003

Singapore: CapitaLand, Southeast Asia's biggest developer, yesterday posted its first quarterly loss since 2003 due to writedowns on investments and said the outlook for 2009 was uncertain.

Although CapitaLand is benefitting from soaring home sales in Singapore and China, its two biggest markets, it has suffered from the drop in the value of its investment properties in Singapore, Australia and elsewhere in the region.

The firm reported a 45 per cent increase in China home sales to S$158.2 million (S$1 = RM2.45) during the second quarter, but booked a net S$280.9 million in revaluation and impairment losses due mainly to a drop in the value of its commercial and Australian properties.

"Although some stability has been restored in the financial markets, the outlook for 2009 remains uncertain," CapitaLand chairman Richard Hu said in a statement.

CapitaLand chief executive officer Liew Mun Leong said that excluding writedowns, operating profit was higher in the second quarter compared with the first, and that the improvement will likely continue in subsequent quarters due to an improvement in market sentiment.

CapitaLand, which is 40 per cent owned by Singapore state investor Temasek, reported an April-June net loss of S$156.9 million compared with a net profit of S$515.2 million a year earlier.

The loss was expected by several analysts although estimates varied widely due to uncertainty over how CapitaLand would revalue its various assets.

The company's bottom line was hit by writedowns and impairment charges at Australian unit Australand, a residential development in Singapore, as well as the drop in the value of real estate held by CapitaCommercial Trust, a Singapore-listed real estate investment trust.

Excluding revaluations and impairments, CapitaLand said it made a net profit of S$124 million for the quarter.

Hu said the firm was in a strong position going forward as it had S$4.2 billion in cash and a relatively low debt-to-equity ratio of 0.43.

By Reuters

Klang Valley property expo kicks off today

The Real Estate and Housing Developers' Association Malaysia (Rehda) will team up with its Federal Territory and Selangor chapters to organise the second Klang Valley Malaysian Property Exhibition (Mapex) 2009 in Kuala Lumpur from today to Sunday.

Themed “Go Green”, the event is expected to provide a platform for property developers to market their green projects as well as encourage them to design and construct green, sustainable buildings.

By Business Times

Genting's Sentosa casino gears for opening

By early 2010, a good 60-70 per cent of the new casino resort in Singapore will be opened to receive guests

Genting Bhd's new casino resort in Singapore will start receiving guests in two-thirds of the facilities by early next year, including Southeast Asia's first Universal Studio theme park and the casino.

It is aiming for 60 per cent overseas visitors, most of whom will come from Malaysia. Other key target markets are China, India, Indonesia and Thailand.

An estimated 12 million to 13 million visitors are expected to arrive in the first year at the resort on Sentosa Island, a stone's throw from the harbourfront Vivocity shopping mall.

"By early 2010, a good 60-70 per cent will be opened. We are talking about the Universal Studio, four hotels, part of Festive Walk, which is a dining and shopping area, and the casino," Robin Goh, assistant communications director of Resorts World at Sentosa Pte Ltd, told Business Times in an interview in Kuala Lumpur yesterday.
"We would love to (open by Chinese New Year), but we don't have the date yet," he said.

The rest of the project, including the Oceanarium and two more hotels, will be ready in the following months.

The company is ramping up publicity and marketing efforts to prepare for ticket sales which will start towards the year-end. As a prelude to the opening, a charity concert will be staged within the resort in December, Goh said.

Both the integrated resorts in Singapore are expected to open in the first three months of next year.

Analysts are speculating that Resorts World, which started construction later, may be the first to open after Marina Bay Sands encountered some delays.

Marina Bay Sands will probably open in either January or February, its executive director of sales Paul Stocker told Business Times separately.

Analysts believe that the two resorts will strive to start operations before Chinese New Year, which falls on Valentine's Day next year, to capture the peak period for the casino.

Goh said that Resorts World had yet to decide the ticket price for the theme park or the hotel room rates, but was "mindful" of its pricing strategy to attract the crucial Malaysian crowd.

It will probably bundle hotel stays with entrance fees, apart from the day ticket, two-day pass and annual pass.

"What is important is that Malaysian families must be able to see value for money in our theme park.

"The proposition is that this will be the nearest Universal Studio among the four parks in the world, and it is a world-class facility and not a watered-down version."

There will be 24 rides in Singapore's Universal Studio compared with around 21 for the other destinations in Osaka, Japan, and Orlando and Los Angeles in the US.

Eighteen of the rides are built exclusively for the park in Singapore, Goh said.

Among the highlights, a new Transformers ride will debut in Singapore, replacing the popular Spiderman three-dimension thrill ride which is already in all the three existing parks.

By Business Times (by Chong Pooi Koon)

LBS banks on new launches

Datuk Lim Hock San in front of a show unit of Topaz II

KUALA LANGAT: LBS Bina Group Bhd is optimistic of achieving its property sales target of RM250mil this year, driven by overwhelming buyer response for its new launches.

Managing director Datuk Lim Hock San said the company’s recent launches such as Iris Garden and Ruby Garden in Bandar Saujana Putra saw the units offered snapped up within two months.

“Topaz II, the latest property offered in Bandar Saujana Putra, was also 20% taken up when we did the soft launch last weekend.

“With current sales at RM135mil, we believe we can achieve our target this year,” he said yesterday at the official launch of 67-unit Topaz II in Bandar Saujana Putra.

Lim said the company would continue to build affordable homes priced from RM150,000 to RM180,000 in Bandar Saujana Putra as it believed there was still strong demand from this market.

“However, demand remains selective, so a development’s strong take-up rate is largely dependent on location, price and quality of the project,” he said.

Topaz II comprises double-storey link-houses priced from RM179,000 to RM244,300.

Lim said LBS would this year launch more properties in Bandar Saujana Putra apart from other new developments in Taman Tasik Puchong, Batu Pahat and Cameron Highlands.

“The new properties we will launch later this year include Topaz II phase two, consisting of 156 double-storey link-houses with a gross development value (GDV) of RM31.3mil, and 218 semi-detached single-storey homes in Batu Pahat priced at RM188,000 with GDV of RM40mil,” he said.

He believed the property market would pick up by year-end, boosted by the stimulus packages and the support from banks that currently offered low interest rates.

LBS is extending its “LBS Hassle-Free Home Ownership Programme” where buyers only need to pay as low as RM1,000 upon signing the sales and purchase agreement. It is also giving free furniture to purchasers of Topaz II.

To date, LBS has completed 4,800 residential and commercial units at Bandar Saujana Putra, located along the Elite Highway, with total GDV of about RM500mil.

By The Star

Resort city to drive tourism in Kuantan

KUANTAN: Bukit Gambang Resort City, a RM1bil project undertaken by Sentoria Development Sdn Bhd, is expected to spearhead the growth of the tourism industry in Kuantan town when completed in 10 years.

Datuk Gan Kim Leong (left) at the launch. Also present is Mentri Besar Datuk Seri Adnan Yaakob (right)

Sentoria executive director Datuk Gan Kim Leong said the first phase, costing some RM140mil, had been completed.

Gan said RM100mil was spent to construct the Carribean Bay suites consisting of 578 studio, deluxe and family suites complete with a clubhouse, gymnasium, jacuzzi, infinity pool, steam room and meeting, incentive, convention and exhibition facilities.

“The water park cost RM40mil and is divided into four main components – Coco Beach, Penguin Island, Tree Top Hill Slides and Garden Terrace.

“Our target is (to attract) 500,000 local and foreign visitors in the first year of operations,” he said after the official opening of the water park by Pahang Mentri Besar Datuk Seri Adnan Yaakob last Tuesday.

Gan added that safety and security features were among the group’s main priorities and the water park and hotel had created 300 job opportunities for the locals.

“I believe the idea of a water park in the east coast is workable as people still need some form of entertainment despite the trying times.

“Our concept is nature-friendly and leans towards family-oriented activities,” he said.

He said the first phase included an active academy centre which would provide team-building facilities such as a 18-part obstacle course and high rope challenges, mini zoo, paintball and jungle trekking activities.

“At least, half the components in the water park were made locally while the remaining 50% were imported from the West.

“Among the suppliers for fibreglass structures and water pumps were renowned firms from Canada, Scotland and Australia, which conform to international standards,” he said.

Gan said the second and third phases would comprise the adventure park, forest park, east coast bazaar, global heritage and heritage square.

“In the later stages, the public can look forward to themed accommodation namely Andaman Bay, Arabian Bay, Mediterranean Beach and Hawaiian Beach,” he said, adding that the integrated city would be the “gateway to Kuantan and east coast states.”

Gan said despite the global economic slowdown, Sentoria was not hard hit as its other properties such as housing and mixed-development projects were still doing well.

He said early this year, it had completed and launched its 108-room budget hotel in Taman Indera Sempurna, which was opened to the public in March.

By The Star (by Simon Khoo)

Mah Sing receives CNBC 5-star achievement award

Mah Sing Group Bhd became the only Malaysian property developer to receive a five-star award in the commercial category from CNBC Asia-Pacific Property Awards 2009.

This is the highest level of achievement awarded by CNBC Asia-Pacific Property Awards 2009 to the property industry in Asia.

Its Southgate commercial development in Kuala Lumpur was awarded five stars for Best Development in Malaysia. It comprises five blocks of retail units and offices surrounding a covered boulevard.

Its 315-acre township project called Aman Perdana in Meru-Shah Alam, Selangor, was also awarded four stars for Best Mixed Use Development in Malaysia. The project involves over 2,000 units of semi-detached homes, bungalows and community shops.

By Business Times

HK's property market sees good sales, low rental values

KUALA LUMPUR: The Hong Kong property market is being pulled into two directions. On one hand, sales are rising but leases are on a downward trend. According to Colliers International Hong Kong 2Q 2009 property report, the general market mood is still conservative but investors are snapping up properties to ensure they are in good position to reap the benefits when the global economy recovers.

OFFICE SPACE

Due to ample liquidity and with near zero interest rates, real estate purchasers, including a number of local private investors, have entered the market in anticipation of a global economic recovery in 4Q2009 to achieve capital gains, said the report.

As a result, prices increased in 2Q. For example, the average asking price for strata-titled office buildings in Admiralty rose to between HK$10,000 to HK$13,000 psf compared with between HK$8,000 to HK$9,000 psf in the previous quarter.

Rental, on the other hand, have gone down, with tenants preferring to play it safe with downgrades to less expensive offices or second-tier buildings. The vacancy rate across the various business districts increased 0.43% from 7.43% in February to 7.89% in 2Q2009.

Overall, Colliers predicted that Grade A office rentals will see a further slide of 15% over the next 12 months unless there is a change in the economic climate.

RESIDENTIAL

The luxury residential sector also saw an increase in sales in 2Q09 thanks to the low mortgage rates of as low as 1% per annum based on certain conditions making investment buying attractive. The number of sales in the three traditional luxury residential districts of The Peak, Mid-levels and South Side all saw a leap of more then 100%.

On the leasing front, however, the market is weak, no thanks to the low occupational demand for luxury units by multinational companies' employees. A number of tenants have opted for cheaper areas due to tightening purse strings.

Colliers said luxury residential capital values should rise by 5% over the next 12 months, although rentals are likely to edge down 3% during the same period.

INDUSTRIAL

Transactions in the industrial sector rose 129% quarter-on-quarter from 393 in March 2009, the lowest level since 1999, to 900 in May 2009. The most active areas were industrial districts of Kwai Chung/Tsuen Wan and Kowloon East.

There was a rather subdued feeling in terms of leasing due to the global recession. Although individual warehouses are taking advantage of the market downturn to upgrade their premises to be in prime position when the economy recovers, tenants remain cautious when it comes to rental expenses. As a result, industrial rentals are expected to fall by 5% to 15% over the next 12 months.

RETAIL

The drop in tourist numbers, the A(HINI) flu pandemic situation and the global slowdown has resulted in a downward trend in rents of retail property. The average retail rent in the four traditional shopping districts of Central Causeway Bay, Mong Kok and Tsim Sha Tsui showed a decrease of 4.7% quarter-on-quarter in 2Q2009, compared to the fall of 3.1% quarter-on-quarter in Q12009.

Nonetheless, Colliers predicted that rentals will decline further by another 12% over the next 12 months.

However, investment buying has grown thanks to increased capital inflow and more relaxed lending policies by local banks. The number of major transactions with lump sum considerations of HK$10 million or above increased by 70% quarter-on-quarter.

By The EDGE Malaysia (by Wong King Wai)

Mudajaya wins RM75mil job

PETALING JAYA: Mudajaya Group Bhd’s wholly-owned unit Mudajaya Corp Bhd has been awarded a contract for the construction of a hospital in Pahang for RM75.39mil.

In a filing with Bursa Malaysia, Mudajaya said the contract was awarded by Mudajaya-Takdzim Joint Venture, which was awarded the project by Takdzim PMC Sdn Bhd.

“The project is expected to contribute positively to the future earnings and net assets of the company,” it said.

The project is expected to be completed by Jan 31, 2012.

By The Star

Harp Soon to build integrated resort in Malacca

PRIVATELY-HELD construction and property firm Harp Soon Construction Bhd plans to develop a 8.72ha integrated resort in Malacca, with the help of Crystal Crown Hotel & Resort Group.

The resort, to be named Bayou Lagoon Park Resort, will be a mixed development comprising a hotel, retail centre, four blocks of service apartments, a water park, convention hall and a club house.

The resort will be developed in stages, with the completion of two of its serviced apartment blocks by early 2012.

The entire serviced apartment development has a gross development value of RM250 million.

The water park, which will be exclusive for guests and residents of the resort, will be ready by the time the apartments are up, and has a gross development value of RM8 million.

The convention hall, club house and hotel, meanwhile, are to developed later.

Bayou Lagoon Park Resort Sdn Bhd executive director Marco Seow said the development is the company's first foray into integrated resort development after developing residential and commercial developments in the Klang Valley for the last 30 years.

"This is why we brought in Crystal Crown, which has experience in the planning, development and management of hospitality project, as a consultant for the project," Seow said.

Crystal Crown and the manager of the resort, Bayou Lagoon Park Resort Sdn Bhd, entered into a distinctive partnership yesterday.

Under the pact, Bayou Lagoon will be a member of the Crystal Crown Group, allowing it to leverage on the established brand name as well as be accorded technical and feasibility advice on layout and hotel system solution.

By Business Times (by Presenna Nambiar)

invest Penang GM tipped to head PDC Properties

INVESTPENANG general manager Wan Zailena Noordin is tipped to replace Osman Kallahan as the next head of PDC Properties Sdn Bhd, the property development arm of Penang Development Corp (PDC).

It is understood that chief executive officer (CEO) Osman's contract, which ends this month, has not been renewed.

Sources told Business Times that Wan Zailena is tipped to take over, but as managing director.

It is not known if Wan Zailena will relinquish her post at investPenang, where she had served as CEO and then resigned. She rejoined investPenang as its general manager last year.

Osman has more than a decade of property development experience under his belt when he was hired to helm the company during its inception.

Incorporated in 2005 as a private limited company and wholly-owned by corporation, PDC Properties has been actively playing the role of a major property developer of high-end properties to low-cost housing, condominiums, offices and shop lots.

On Penang island, its projects include the sea-fronting Bayan Mutiara, Ixora Heights and Halaman Kenanga at Sungai Nibong.

PDC Properties' Bandar Cassia development at Batu Kawan on the mainland is strategically located close to the landing point of the second Penang bridge.

A restructuring exercise at the PDC in 2004 saw the emergence of PDC Properties, which is understood to be making higher profits.

In April this year, PDC appointed former banker Julian Candiah as its deputy general manager, in a bid to help Penang woo more investors to its shores.

By Business Times (by Marina Emmanuel)

Bandar Raya unit to buy stake in Oman firm

PETALING JAYA: Bandar Raya Developments Bhd’s wholly-owned subsidiary BRDB (Oman) Ltd has entered into an agreement for the proposed development of an integrated real estate tourism project on about 40ha in Oman through Amouage Hotels & Resorts LLC, Oman.

In a filing with Bursa Malaysia, Bandar Raya said BRDB would acquire 30% stake in Amouage from its shareholders, Mamas Loizou Ioanou Christodoulides and Mohammed Saleh Bin Eid Al Khaldi, for RM423,000 cash.

“Subject to the relevant approvals in Oman, the project will comprise residential and commercial units, hotel and other facilities,” it said.

The acquisition is in line with Bandar Raya group’s intention for new property development projects locally and overseas to enhance its earning base.

“The proposed joint venture represents an opportunity for the group to expand to and take advantage of the fast growing economies of Oman and the Gulf Cooperation Council countries,” it added.

By The Star

US housing market stabilising but consumers lack confidence

NEW YORK: US home prices rose in May for the first time in three years, suggesting the housing market is stabilising, but a weakening job market hit consumer confidence in July and could prevent near-term economic recovery.

Potential home buyers afraid of committing to a fast depreciating asset have been clamouring for such signs of house price stabilisation. But rising unemployment and wage cuts are straining consumer optimism and keeping many potential buyers out of the housing market, impeding spending and prospects for economic rebound.

"People are getting a bit discouraged. Jobs are not coming as quickly as expected," said John Silvia, chief economist at Wells Fargo in Charlotte, North Carolina. "This won't be a V-shaped recovery for either the economy or the jobs market."

Home prices have plunged more than 32 per cent on average from their 2006 peaks, but the pace of the annual declines slowed in May for the fourth straight month, according to Standard & Poor's/Case Shiller home price indices yesterday.

"This could be an indication that home price declines are finally stabilising" after tumbling to 2003 levels, David M. Blitzer, chairman of the index committee at S&P, said in a statement.

The index of 20 metropolitan areas rose 0.5 per cent in May from April, after a 0.6 per cent drop the month before, in contrast with the 0.5 per cent drop forecast in a Reuters poll.

"The pressures are all working in alignment to support that we're at the turning point" in the worst housing market since the Great Depression, said Steve Hagenbuckle, managing principle for TerraCap Partners, a distressed real estate private equity fund in Cape Coral, Florida.

"Affordability is at all time highs, inventories are shrinking, there's competition for properties, and we're not building as much new product to compete with the existing homes," he said.

Still, caution is warranted as long as the US unemployment rate keeps rising, economists advised. That rate is at its highest in nearly 26 years and is headed to double-digit levels.

For a rebound, consumer confidence needs to improve, foreclosures need to start falling from their record pace and potential buyers need to have a sense that it won't be even cheaper to purchase if they keep waiting.

Consumer confidence, however, fell more than expected this month because of the worsening job market.

The US Conference Board's index of consumer sentiment fell to 46.6 in July from 49.3 in June, according to data published yesterday. A reading of 49 was forecast in a Reuters survey.

The eroding sentiment came as Americans saying jobs are hard to get increased and those who thought jobs were plentiful fell to its lowest in more than a quarter century.

"Consumers are feeling no love in this recovery," said Boris Schlossberg, director of foreign exchange research at GFT in New York. "Consumers are still concerned about the labor market and their own security."

By Reuters

Survey: Dubai hotels hit hardest in region in first half

DUBAI: Dubai hotels saw the biggest falls in revenue in the region in the first half of 2009, according to a survey of key Middle East cities published yesterday.

Hotels in 22 cities in the region witnessed an average 10.9 per cent decrease in occupancies and a 17.2 per cent drop in revenue per available room (RevPAR), an industry benchmark, said a report by US hospitality research firm STR Global and Deloitte & Touche Middle East.

Occupancy rates in Dubai, the region's trade and tourism hub, fell 12.9 per cent compared to the year-earlier period, and RevPAR plunged 35 per cent.

Dubai, which attracts hundreds of thousands of tourists to its beaches and luxury hotels, predominantly from Europe and Russia, continued to suffer as the global financial crisis bit into the spending power of those countries.

Hotels in Oman's capital Muscat were among those badly hit as they experience "high seasonality in occupancies and revenues". Occupancies were down 21.7 per cent and RevPAR 16.6 per cent in the first six months of the year.

Lebanon's main tourism destination, Beirut, remained the top performer in the period, as it enjoyed "increased political stability". Beirut's occupancy levels soared 69.4 per cent and RevPAR surged 125.2 per cent, due to a significant inflow of tourists, the survey said.

By Reuters

China building materials expo from Oct 20 to 24

The China-Asean Expo (CAEXPO), which showcases Chinese building materials and processing machinery that caters to the Malaysian market, will be held for the sixth time in Nanning, China, from October 20 to 24.

CAEXPO secretariat said there will be more Chinese brand enterprises joining this year’s show The Chinese Ministry of Commerce of China has listed CAEXPO as one of the four major trade fairs in China under its direct guidance

By Business Times

Naza TTDI looks for land to undertake niche projects

NAZA TTDI Sdn Bhd says the 202.34ha it has in the Klang Valley has a total of about RM8 billion in gross development value (GDV) and is looking to increase its landbank to undertake more niche projects.

Naza TTDI also expects its latest upmarket project launched in Ampang on Saturday to rake in RM360 million in GDV.

The project joins other niche developments by Naza TTDI such as the RM4 billion Platinum Park at the Kuala Lumpur City Centre, Laman Seri in Shah Alam and TTDI Plaza in Taman Tun Dr Ismail.

"Our landbank is small. We have plots of land in Taman Tun Dr Ismail in Kuala Lumpur and Shah Alam, among others. We want to buy more in the Klang Valley," managing director SM Faliq SM Nasimuddin said at the launch of The Valley TTDI, Ampang.

The Valley TTDI, which boasts units priced from RM2.67 million to RM5 million onwards each, has been warmly received. Half of the total 134 units of link villas and bungalows have been sold.

Faliq expects the sales rate to hit at least 80 per cent by year-end.

There are 66 units of seven-room link villas priced at RM2.67 million onwards and another 56 units of eight-room bungalows costing RM2.97 million onwards.

If the eight-room bungalows are not premium enough, there are 12 units of "exclusive" bungalows that cost over RM5 million each. Nine units had been snapped up, company officials said.

The "exclusive" bungalows sit on 7,000 sq ft each and have 10 rooms with internal lifts and a swimming pool, bringing the total built-up area to 8,412 sq ft.

The Valley TTDI itself is located on a 14.36ha site. It will also have a broadband-enabled central community centre and park amenities such as a jogging track, waterfront decks, meditation garden and spring water spa.

"The Valley TTDI was designed to personify living harmony with nature. Another unique selling point is its relative short distance to the Kuala Lumpur city centre," Faliq said.

The Valley TTDI is targeted for completion in July 2010.

By Business Times (by Zuraimi Abdullah)

DTZ: Klang Valley property market remains challenging

Conditions in the Klang Valley's property market remain challenging, according to a property market report from global estate agent DTZ.

DTZ said the office property sector faces downward pressure on rental and capital values due to weak demand and the new supply that will be completed in the next few years.

In the second half of the year, there is an impending supply of some 3.43 million sq ft in Kuala Lumpur.

DTZ said the downward trend may, however, be cushioned by the government's recent liberalisation on economic policies targeting the services and financial sectors.

"The relaxation in policies is expected to promote foreign direct investment, with more foreign interests in the commercial property sector specifically," it said in its DTZ Research Report, Malaysia Property Times Q2 2009, released yesterday.

Nevertheless, rents of prime office space in Q2 2009 remained unchanged at an average of RM6.14 per sq ft per month. This is attributed mainly to the fact that there was no new completion of office space in the city centre, and most of the prime office buildings were close to full occupancy at the time of review.

On the retail front, DTZ said there was no significant change in occupancy of existing shopping centres as at end Q2 2009, which remained at above 90 per cent.

But prospects for the retail property sector are expected to be weighed down by the continued contraction in the economy, which is forecast to recover only in the fourth quarter of this year.

"Rents in prime shopping centres remained stable as they are less vulnerable to the economic slowdown.

"However, new and upcoming centres that are currently under construction are expected to experience downward pressure in targeted rents in their efforts to build occupancy up to a higher level," it said.

"With the oversupply of retail malls in the market, it will be a testing time for shopping malls, especially those in the secondary area with poor population catchments," it added.

Meanwhile, the residential property sector would be challenging over the next six months as any improvement in the economic situation is not expected until the fourth quarter of this year.

"Prices continued to undergo corrections and are expected to continue softening in the short term in view of impending new supply and weak economic conditions," it said.

Generally, prices of high-end condominiums in the Kuala Lumpur City Centre (KLCC) area have dropped by 20 per cent year-on-year.

Average rents of high-end condominiums in the KLCC area increased by 6.5 per cent quarter-on-quarter to RM4.08 per sq ft per month.

However, the rental market is expected to face downward pressure as a result of incoming massive supply of condominium units in and outside the city centre during the second half of this year and towards the early part of 2010.

DTZ said on a positive note, the recently announced overhaul in economic policies, particularly on the repeal of the foreign investment committee's approval for property transactions involving foreigners, would boost interest from foreigners in the local property market, specifically on the high-end residential segment.

In terms of selling and buying of commercial properties on the market, DTZ revealed that there were only two major transactions in the second quarter, of which one is between related parties.

"There are still some investors out in the market looking for commercial properties with investment value.

"Over the next six months, sentiment is likely to recover with some investment activities by opportunistic funds but this will be selective and driven by value hunting," it added.

By Business Times

UM Land expects RM1.2bil from mixed development project

JOHOR BARU: UM Land Bhd expects to generate RM1.2bil in gross development value from its ongoing mixed property development project Taman Seri Austin near here.

The 202.34ha project was launched in July 2005 and is being developed by UM Land wholly owned unit Dynasty View Sdn Bhd.

Wong Kuen Kong (right) says the project will keep the company busy for the next eight years. With him is Datuk Abdul Halim Suleiman.

Dynasty View general manager Wong Kuen Kong said the project would keep the company busy for the next eight years.

Todate, 25% of Taman Seri Austin has been developed with 1,300 units of residential and commercial properties, of which 90% had been sold.

“Upon completion, the scheme will have 5,700 property units and 30,000 residents,” Wong told StarBiz at the launch of 122 double-storey terrace houses on Sunday by Puteri Wangsa assemblyman Datuk Abdul Halim Suleiman.

The four-bedroom four-bathroom Deanna II units with a built-up area of 180.88 sq m in a gated and guarded precinct are priced from RM300,048 to RM552,472 each.

Wong said although the property market was experiencing a slowdown due to the current economic downturn, demand for houses priced from RM250,000 and above in Johor Baru was still encouraging.

Wong said the company always believed that despite the bad times, there were still potential buyers willing to pay more for the medium-high and high-end properties.

“Another trend is that customers will only ink the sale and purchase agreement when they see the houses reaching 50% completion,” he said.

Wong said when the RM997mil Eastern Dispersal Link Expressway (EDL) was completed by end-2011, it would take only 15 minutes to travel from the Johor Baru city centre to Taman Seri Austin from the current 30 minutes.

EDL will link the Sultan Iskandar Customs, Immigration and Quarantine Complex at Bukit Chagar and the North South Expressway via the Pandan Interchange.

Wong said the surrounding amenities such as 36-hole golf and country resort, shopping mall, hypermarkets, education facilities and a public hospital were other selling points of the project.

By The Star (by Zazali Musa)

TA to buy firm with 4-star hotel in Singapore

PETALING JAYA: TA Enterprise Bhd has proposed to purchase the entire issued shares of Mauritius company Quayside Gem Ltd, which owns Merchant Quay Pte Ltd of Singapore.

Merchant Quay is the owner of the 4-star hotel Swissotel Merchant Court Singapore.

In a filing with Bursa Malaysia, the company said it had entered into a memorandum of agreement with LaSalle Asia Opportunity II SARL of Centre de Paris to purchase the entire issued shares of Quayside.

TA said the purchase would be financed through internally generated funds and external borrowings.

TA had paid an earnest deposit of S$5mil, according to the agreement.The company expected to enter into a sale and purchase agreement with LaSalle Asia by Aug 25.

The total transaction value for the acquisition was not mentioned in the statement.

The company had last December acquired the property and business known as The Westin Melbourne in Australia for RM389.12mil from RPHT Pty Ltd and RPHT Operations Pty Ltd.

TA registered a net profit of RM30.5mil for the first quarter ended April 30.

Its revenue dropped 38.1% to RM72mil from RM116.4mil previously.

By The Star

GenCorp on track to complete S’pore hotel by 1Q10

KUALA LUMPUR: GENERAL CORPORATION BHD (GenCorp) is on track to complete the Hard Rock Hotel in Singapore, which is part of the Sentosa integrated hotel and casino resort, by the first quarter of next year.

GenCorp executive director Datuk Marco Low said despite the weak global economic conditions, “the owners of the project continue to support the project and are sticking to the date of completion”.

GenCorp subsidiary Low Keng Huat (Singapore) Ltd was awarded the S$346 million (RM845.73 million) hotel construction contract in April last year by Resorts World at Sentosa Pte Ltd, a member of Genting International Group.

Then the expected completion date for the hotel was by December 2009, but that has since been changed to completion in two phases with phase, one by December 2009 and phase two within the first quarter of 2010.

Earlier this month, another casino owner, the Las Vegas Sands group announced the delay in the opening of its US$5.5 billion (RM19.41 billion) Marina Bay Sands hotel and casino resort in Singapore to January or February 2010 from December this year.

GenCorp’s other construction project announced at the same time as the The Hard Rock project, the S$146 million construction contract on the additions and alterations to the retail and hotel podium of the Meritus Mandarin Hotel at 333 Orchard Road is expected to be completed by the end of the year.

The group, which derived 71.8% of its consolidated revenue of RM766 million for its financial year ended Jan 31, 2009 (FY09) from its Singapore operations, is also working on the S$295 million Serangoon Central Mall to be completed by end-2010.

GenCorp, which posted a RM64.93 million net profit in FY09, expects “earnings to be sustained” in the current financial year, said its executive director Michael Chong.

He said its 33-storey Panorama freehold luxury condominium project here had seen a 90% take-up rate since its launch in April last year. Construction on the project has started and it will contribute to earnings this year.

The Panorama, located near the Corus Hotel, is worth about RM300 million in gross development value and scheduled for completion by end-2010.

Malaysian operations are the second-highest contributor to group revenue, after Singapore, making up about 15% in FY09.

Going forward, the group plans to develop a 1.6ha (3.95-acre) freehold site in Jalan Conlay here for high-end condominiums.

Ongoing projects in Malaysia are the 25-unit “zero lot” bungalows at Taman Esplanad, Bukit Jalil, and 12 semi-detached luxury residences in Jalan U-Thant.

The group, which does not have any major landbank in Singapore, undertakes property development in the republic on a joint-venture basis. Its projects include One-North Residences and South Bank.

By The EDGE Malaysia (by Loong Tse Min)

Aliran Perkasa to buy land

Property developer Metro Kajang Holdings Bhd’ subsidiary Aliran Perkasa Sdn Bhd, plans to buy a 45.4ha plot of land in Semenyih, Selangor, from Bandar Centre Development Sdn Bhd for RM34 million.

The group will jointly develop the land with another 8ha land it owns next to it.

By Business Times