Glomac to sell off block B at Kelana Business Centre

Property developer Glomac Bhd wants to sell off block B of its building at the Kelana Business Centre in Selangor for RM30 million.

This year alone, Glomac has sold two buildings for RM72.6 million, namely the 13-storey Wisma Glomac 3 in Kelana Centre Point and a building at Wisma Glomac.

Glomac is also in the later stages of finalising by the end of the month, a sale of a 25-storey building at its Glomac Damansara project to a government agency for RM200 million.

"We are selling the buildings so we can use the money and develop bigger projects. The proceeds from the sale of the properties will form part of our war chest," executive vice-chairman Datuk Richard Fong Loong Tuck told Business Times.
Glomac slashed its gearing from 0.5 to 0.12 times since a year ago via the sale of assets, he said.

Glomac Tower, located near the Petronas Twin Towers was sold to a Bumiputera firm for RM577 million in December 2007 and proceeds from the sale are being recognised now as construction progresses, Fong said.

Elsewhere, Glomac Galleria in Sri Hartamas featuring 20 units of four-and-a-half-storey shop offices was sold en bloc last year for RM100 million.

On the fresh asset sale, Fong said that despite block B of the building being put up for sale in the market recently, the company has received numerous offers.

Fong said Glomac will do better this year, with net profit and revenue increasing by 10-20 per cent.

For the fiscal year ended April 2009, it posted a net profit of RM32.3 million on a revenue of RM351 million.

"We have had better sales this year, thanks to financial packages that we had launched earlier in the year. We are also getting income from Glomac Tower and Glomac Galleria, and from our Seri Bangi project," Fong said.

Seri Bangi comprises double-storey terraced houses and shoplots worth RM121 million, and half of the residential properties were launched in April and August this year.

"We launched 94 units and 76 units of double-storey terraced houses in April and August respectively and almost 70 per cent were sold within two weeks after the launch. We were caught by surprise.

"We are going to launch the final 88 units early next year, each priced from RM360,000. We are expecting a similar take up," Fong said.

By Business Times (by Sharen Kaur)

Dijaya Tropicana development almost at tail end

DIJAYA Corp Bhd's development at the 250ha Tropicana Golf & Country Resort in Petaling Jaya, Selangor, is almost reaching the tail end, with the scheduled December launch of the RM745 million Tropicana Grande and Tropicana Avenue project.

The two are are among the final three or four developments left in Tropicana.

According to managing director Datuk Tong Kien Onn, there is only 3 per cent or 7.5ha of land to develop in Tropicana. Tropicana Grande and Tropicana Avenue will use 2.08ha and 2.3ha each.

The remaining land will be used to construct purpose-built office towers for investors, Tong told Business Times in an interview in Petaling Jaya.
Tong said Tropicana Grande is the last residential development in Tropicana and he is expecting brisk sales at the launch as it has ready buyers.

Tropicana Grande will featuring four crystalline blocks. It will offer 300 units, priced from RM600 per sq ft, Tong said.

"We are optimistic of sales. The market is improving and there is demand for properties overlooking a golf course. Our pricing is less than half of what is being offered at the KLCC area," Tong said.

Dijaya is targeting existing Tropicana home buyers, and investors from Singapore, Dubai, Hong Kong, South Korea and Japan.

To accelerate sales from foreigner property buyers, Dijaya will launch Tropicana Grande in Singapore in December, Tong said.

Tropicana Avenue, a lifestyle commercial development, will comprise three blocks of nine and 11 storey offices, worth RM205 million.

There will be 359 shop offices and 38 loft offices parked in seven to nine floors, that will seat on top of 50 retail lots in two floors.

"At the moment, we are looking to lease the retail units to control the mix so we can create a lifestyle for our buyers. We will be selling the office suites at RM350 per sq ft," Tong said.

Tong said he expects Dijaya to surpass its 2009 revenue target of RM260 million this year, attributed by sales from the new properties.

Over the past seven months, Dijaya has achieved RM215 million in sales, or 70 per cent of its target.

For the financial year ended December 31 2008, Dijaya posted RM244 million in sales.

By Business Times (by Sharen Kaur)

MRB plans to cash in some land bank assets

KUALA LUMPUR: The Malaysian Rubber Board (MRB) plans to monetise some of its existing land bank assets, especially those in the Klang Valley, to support the increasingly high operating costs in terms of research and development, patents and information on manufactured rubber goods.

Datuk Dr Kamarul Baharain Basir says MRB’s major research achievement is in tissue culture and genetic transformation.

Its director-general Datuk Dr Kamarul Baharain Basir said MRB currently had an estimated RM1bil of land bank assets nationwide.

“The Government has strongly urged MRB to follow in the footsteps of major corporations and government-linked companies, which have either sold or leased their holdings like buildings or land bank, to monetise their non-core assets,” he told StarBiz.

Kamarul said MRB was now working closely with its property cooperative to look at how best to monetise its land bank assets in prime locations like Sungei Buloh and Jalan Ampang.

“We are keen to develop part of our 1,700ha Rubber Research Institute in Sungei Buloh into commercial centres.

“However, our development (in Sungei Buloh) must not duplicate the nearby Selangor Vision City development,” he said.

Having said that, MRB also does not want to see too much depletion in its assets as it strives to generate regular income to support its operations.

Under the Ninth Malaysia Plan, the Government has allocated RM113mil for MRB, which is the statutory authority for the management of the country’s rubber industry.

“We plan to seek a higher allocation of about RM300mil under the 10th Malaysia Plan but we don’t know how much we will get this time,” he said.

According to Kamarul, MRB is the world’s most “referred” rubber organisation among international rubber set-ups seeking information on the upstream, midstream and downstream activities in the industry.

“Our core activities are in research and innovation in both upstream and downstream, crop management, improvement and protection as well as in biotechnology,” he said, adding that MRB’s major research achievement was in tissue culture and genetic transformation.

“We were able to create a transgenic rubber tree that can enhance crop productivity, production of valuable protein in the latex and has bigger girth tree trunk for timber production as well as high resistance to diseases,” he said.

MRB recently launched its latest high-yield rubber clone, the RRIM 3001, which can boost latex production to over 2,000kg per hectare a year compared with the average yield of 1,430kg in 2008. When mature, the RRIM 3001 tree could also be a good “rubber timber” source for the local furniture industry.

“Currently, rubber timber represents 80% of the raw material used in the local furniture industry,” he said.

On another note, Kamarul said the price of natural rubber was tracking well with crude oil and that demand from China was encouraging. China takes up about 35% of Malaysia’s total natural rubber production.

He said tyre grade SMR 20, currently trading above RM6 per kg, boded well for rubber planters, as the cost of production was about RM3 per kg.

By The Star (by Hanim Adnan)

Nomad strengthens regional foothold

The office space provider is now negotiating to buy an 80-room serviced apartment in Bangkok and is also eyeing Singapore for a suitable property there

The Nomad Group Bhd, an office space provider, has allocated some RM100 million to expand its serviced apartment portfolio and is eyeing properties in Thailand and Singapore.

The group is now negotiating to buy an 80-room serviced apartment in Bangkok, Thailand, for up to RM60 million. Chief executive officer Hew Thin Chay said the deal could be completed as early as next year.

The average occupancy at this property is now only 40 per cent while its average room rate (ARR) is around RM200, providing ample room for improvement.

In an interview with Business Times, Hew said The Nomad was also eyeing Singapore but has yet to find a suitable property there.

In Malaysia, The Nomad was not keen to buy more hotels or serviced apartments but it was open to managing them instead.

It has been approached to convert a 200-unit condominium on Jalan Tun Razak into a serviced residence and manage it.

In other countries, it is looking at the possibility of operating serviced apartments in Chennai, India, and may consider Indonesia in the future.

Meanwhile, Hew said he expects the group to return to the black this year, as it sees the money coming in from the various investments it made last year.

For the financial year ended December 31 2008, The Nomad incurred a net loss of RM7.63 million on the back of RM25.85 million in revenue as a result of start-up costs.

"We have had eight openings, six of which are offices. It takes start-up businesses about 12 months to mature," Hew said.

Its investment last year include The Nomad Offices at Etiqa Twins, The Gardens Mid Valley and Pavilion Kuala Lumpur.

Together with its space in Menara Hap Seng (which opened in December 2007), it has 80,000 sq ft space, making it the largest serviced office provider in the capital.

The Nomad has ventured into the Gemadept Tower in Ho Chi Minh City, Vietnam, and Interchange 21 in Bangkok, Thailand. It also bought the iOffice and Menteng Office Park in Jakarta, Indonesia.

"In the first half of 2009, we will incur a loss but post positive earnings before interest, taxes, depreciation and amortisation. But I think, by end of the year, we should make profits," he said.

In the first quarter to March 31 2009, it posted revenue of RM7.44 million and net loss of RM235,000.

Its cash cow is the Raffles Place in Singapore, which provides it with RM1.6 million a year in operating profit. The group makes 60 per cent of its revenue from foreign markets.

It is eyeing Hong Kong, South Korea and Taiwan for the serviced office business.

By Business Times (by Vasantha Ganesan)

Tanjung Bungah hotel to be rebranded

Serviced office and residence specialist The Nomad Group Bhd has taken over the management of the Tanjung Bungah Beach Hotel in Penang as part of a branding exercise.

The hotel will be renamed The Nomad Penang after a facelift to raise its rating to four stars from three.

The property is set to undergo a RM2 million refurbishment exercise, which will see it being transformed to cater for a market mix of business travellers and the information technology-savvy, The Nomad Group chief executive officer Hew Thin Chay said.

"We have a five plus five-year contract to manage the hotel. We plan to reposition it towards a new market segment," Hew told Business Times. The hotel is owned by Plenitude Bhd.

"We are in Penang to establish a network and have a branding presence," Hew said.

The 200-room hotel enjoys 80 per cent occupancy and garners an average room rate (ARR) of RM100 a night.

Currently, most of its business comes from the low-yielding sector, such as through travel agencies.

Hew is confident that repositioning the hotel will work in its favour, especially since it is located close to the island's city centre.

He described the hotel as "a city hotel with a beachfront", noting its position along Jalan Tanjung Bungah, which is between George Town and Batu Ferringhi.

The hotel has already seen an improvement since The Nomad Group took over its management in March this year. Occupancy has touched 90 per cent and the ARR is RM110.

The Nomad Group expects to make a net profit of RM300,000 in the first year of operating the hotel.

Hew expressed his optimism that occupancy will be as good and its ARR can reach RM120 after the upgrade is completed early next year.

The Nomad Group is also managing the The Nomad SuCasa serviced suites in Kuala Lumpur and is in the process of acquiring the Novotel Kuala Lumpur City Centre.

By Business Times (by Vasantha Ganesan)

Sri Lanka opens doors to foreign investors

SRI Lanka is calling on foreign investments to pump prime its economy which had been ripped by over 30 years of civil war.

State Corp (Pvt) Ltd (SCorp) managing director and chief executive officer Keerthi Sri Weerasinghe said there are over US$70 billion (RM246 billion) worth of jobs available in construction, infrastructure and tourism.

Keerthi, who is chairman of the Coconut Development Authority under the Ministry of Plantation Industries said there are also contracts to be undertaken in mineral mining and housing.

"Because of the war, we could not undertake a lot of developments. Many buildings, roads and bridges were ruined during that time. We are now opening doors for investors to come in and develop the country for us," Keerthi told Business Times in an interview in Kuala Lumpur recently.

The present government has introduced a 10-year economic development policy the "Mahinda Chintana" where the focus is to steer investments to vital sectors such as agriculture and infrastructure development to pump up the economy.

Bilateral investment agreements, supported by a constitutional guarantee, provide strong protection to investors in Sri Lanka. Such an agreement exist between Sri Lanka and Malaysia.

Keerthi said a few Malaysian firms have made successful foray into the country and the situation was viable for new players to come in now.

Malaysia remains the largest investor in the country, mainly in telecommunications, infrastructure and property development.

Companies such as Dialog Telekom plc, a unit of TM International Bhd, MTD Construction Sdn Bhd and HeiTech Padu Bhd had ventured into Sri Lanka despite the war.

"We are an open economy and the government is interested to invite investors in oil and gas (O&G) and agriculture. We have identified six sites in north-west and south of Sri Lanka for O&G activities. We are also looking to revive a cement factory which had been shut down during the war and are calling for interested parties to bid," Keerthi said.

Keerthi said the Indian and Chinese governments, and the International Monetary Fund would lend their support financially while building materials were readily available for use.

By Business Times (by Sharen Kaur)

Sime Darby Property’s mega plans to build wholesome townships

Since taking over the helm of Sime Darby Property Bhd a year ago, managing director Datuk Tunku Badlishah Tunku Annuar has been busy crafting up strategic plans to build on the company’s strength as a formidable local and international property player.

Datuk Tunku Badlishah ... ‘The merger has allowed us to enhance operational efficiency.’

The mega merger of Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd in 2007 has created the country’s largest property group in terms of landbank and ongoing developments.

“The merger has allowed us to put in place strategic transformation initiatives to enhance operational efficiency as well as establish strategies for sustainable growth,” Tunku Badlishah says in a recent interview with StarBizWeek.

Following the merger in November 2007, priority was placed on establishing a Target Operating Model by July 1, 2008. This entailed a complete review of the organisation structure and operating processes by adopting best practices within the merged entities and re-engineering the organisation to best deliver the strategies and synergies expected from the merger.

For example, previously sales, marketing and customer service functions were centralised in the corporate headquarters. In an effort to improve the customer service and better understand the market, township offices have been established in each of the company’s ten townships. These offices are helmed by a township head with independent sales, marketing and customer service operations.

Tunku Badlishah says a comprehensive review was also undertaken of the existing development plans for each of the townships and where possible, products and development phases were replanned to enhance development value.

“Efforts were made to identify and execute projects that could increase the marketability of the townships for the benefit of existing and future residents,” he says.

As an example, he says Phase 5T in Putra Heights was originally planned as a typical terraced housing project consisting of 22’ x 75’ and 24’ x 75’ houses with about 500 units on 57 acres of land and an estimated gross development value (GDV) of RM275mil.

Taking into consideration its location at one of the most strategic areas in Putra Heights, The Glades has been re-planned as a premium gated development with meandering waterways and an exclusive lakeside club house with an adjacent retail complex – features that will enhance the project value and attract high-end buyers to the development.

Scheduled to be launched in the first quarter of 2010, The Glades product mix totaling 409 units includes bungalows, cluster villas, courtyard homes and two-blocks luxury condominiums with an estimated GDV of RM700mil, a 250% increase compared to the original plan.

Sime Darby Property has also pioneered a comprehensive Safe City agenda for its Ara Damansara township in its continuous efforts to create a safer living environment for its communities.

Launched by Home Affairs Minister Datuk Seri Hishammuddin Tun Hussein on July 21, the initiatives are based on the Safe City criteria set by the Federal Department of Town and Country Planning, Ministry of Housing and Local Government.

Tunku Badlishah says the success of Sime Darby Property’s township projects so far show the merged entity has been well accepted by the public.

“Buyers are buying into the company’s reputation as a reliable developer with quality projects in good locations, innovative products and wholesome living environment.”

Having a common marketing platform such as the Parade of Homes Series, allows for the promotion of the company’s ten townships under a single initiative.

“We are constantly looking at innovative ways on how to assist potential homebuyers make their home ownership dream a reality. One of our most successful marketing initiatives is the Parade of Homes Series which was launched in June last year.

“The overwhelming response from homebuyers to the three campaigns so far exceeded our expectations. It is an indication that despite concerns over the economic climate, home ownership remains a priority among Malaysians.

“We just need to come up with out-of–the-box marketing ideas to give them the confidence to make that decision to purchase,” he adds.

Its latest Parade of Homes from March 6 to June 15 managed to record sales of 1,657 housing units worth more than RM1bil, by far the highest sales since its first launch last year.

“It is a major accomplishment given the weak economic environment that has negatively impacted the property industry,” Badlishah says.

Post merger, the company has also given top priority to research and development innovation.

Tunku Badlishah believes the future success of the company is dependent on its ability to create desirable, innovative and environmentally-friendly products by establishing new typologies, utilising new materials and construction methodologies and collaborating with cutting-edge technology providers.

Synergistic operational efficiency in research and development, product innovation and marketing will ensure the merged Sime Darby Property becomes a leading industry player in product offerings and sales going forward.

The Sime Darby Idea House is a socially, economically, and environmentally responsive prototype dwelling that provides an insight into future tropical living.

“One of the key initiatives of the year is the Sime Darby Idea House where we are showcasing the latest in construction solution, system applications which will be an example of how green architecture, good design and sustainable living can work harmoniously.

“The Sime Darby Idea House is a socially, economically, and environmentally responsive prototype dwelling that provides an insight into future tropical living.

“Conceived as a test bed for new ideas, the house showcases the latest in sustainable architecture in the buildings’ quest to become the first carbon zero residence in South East Asia,” says Tunku Badlishah.

Sharing his passion for the project, Badlishah says the Idea House will be a self sustaining building that generates power from the sun, reuse harvested rain water and is built entirely on the principle of modular construction where the user would be able to expand and contract the building as the need arises.

The entire frame and construction is modular to provide not only a speed and ease of construction, but also the ability for the house to be demounted in the future in order to preserve the terrain for future generations or future development.

Another initiative is The R&D Village which is a 20-acre experiment facility to be located in Elmina East.

Tunku Badlishah says the facility will be the testing platform to analyse various performance aspects of the company’s latest prototype designs.

“Working closely with our vendors and suppliers, the R&D Village will test and demonstrate new building products, construction technologies and system applications to the public in order to evaluate the response of the market.

“What we hope to offer to our partners is an opportunity to test and showcase products that have not been available or generally associated with regular home offerings,” he further explains.

He says the merger has allowed Sime Darby Property to take advantage of its increased scale by negotiating better terms with its vendors for the benefit of purchasers.

Significant cost savings and quality improvements have been achieved through identification of preferred vendors and negotiating pricing based on estimated annual requirements.

“Sime Darby Property is giving preference to vendors whose manufacturing process and products are “green” and “sustainable”.

“Quality has been enhanced as contractors are required to utilise specialist installers/applicators nominated by the preferred vendors and the product warranties are issued directly by the manufacturer to the purchaser,” he elaborates.

So far, the new procurement initiative has resulted in savings of up to 20% on certain building materials.

Tunku Badlishah says construction costs have also been reduced by combining construction contracts that are within the same location, as it has resulted in significant savings on the cost of preliminaries and mobilisation.

By The Star (by Angie Ng)

Expanding Sime’s international presence

SIME Darby Bhd is a well-diversified conglomerate with operations in 20 countries and 70% of the group’s income is derived from outside Malaysia. In comparison its property subsidiary, Sime Darby Property Bhd, with footprints in six countries, derives only 10% of its income from overseas.

“We can leverage on the group’s global presence and it will be easier and less risky for us to penetrate the new markets where the Group already has a presence. To realise our international aspirations, we will be leveraging on the strong reputation and global reach of the parent company,” Sime Darby Property managing director Datuk Tunku Badlishah Tunku Annuar says.

Currently Sime Darby Property has property related interests in Singapore, Indonesia, Vietnam, China, Australia and the United Kingdom with business activities that include asset management, hospitality and leisure, strategic investment and property development.

According to Badlishah, Singapore has been the company’s most successful international market to-date.

Given the limited land availability in the city state, most of its projects involve redevelopment of low-yielding properties into high value assets.

The timing of its recent condominium developments in Singapore has been fortunate and the company has managed to sellout its properties at the peak of the market and gain maximum value out of the projects, just before the global financial meltdown last September.

One good example is The Orion which was originally an old service apartment block with very low building efficiency within the vicinity of Orchard Road.

Upon redevelopment, 46 luxurious residences on a 27 storey condominium block were built and sold. The return on investment was a remarkable 63%.

Another successful project, Balmoral Hills is an exclusive freehold residential development at Balmoral Park in the prime District 10. The 62 apartments measuring more than 1,300 sq ft to 1,841 sq ft have gross development value of RM344mil.

In Australia, Sime Darby Property is developing Eagles Cove, an exclusive residential development on Queensland’s popular Gold Coast.

A joint venture re-development project of 250 acres of prime freehold land, it comprises high-end waterfront resort bungalows, low rise apartments and commercial units. The A$529mil project is planned for launch in mid 2010.

Badlishah says Eagles Cove is a unique example of a creative re-development initiative by the company in Australia.

“After the acquisition, we have undertaken some improvements to the site and provided linkages and access from an existing lake to the open sea.

“The creative engineering work has provided residents access to the open sea via a private lock which provides a non-tidal, secure environment for residents to moor their boats. The effort has significantly enhanced the value of the property,” he adds.

Other hospitality projects that have been completed Down Under include The Karri Valley Resort near Perth; and Quest Margaret River and Quest Subiaco in Western Australia.

The vast China market is also beckoning Sime Darby Property to expand its presence there.

Sime Darby Property first ventured into the China market via a joint venture development called Richmond Park in Beijing.

After exiting the successful Richmond Park project in November 2007, the company has been actively pursuing new development opportunities in China.

Sime Darby already has a presence in Weifang, a coastal city located within the fast growing Shandong Province, through ownership of ports and a water treatment plant and Badlishah says that Sime Darby Property is in the midst of acquiring two land parcels of 163 acres and 224 acres in Weifang.

The estimated gross development value (GDV) for the land parcels is estimated to exceed RM3bil upon completion in 10 years time.

United Kingdom is also under the radar of Sime Darby Property. Its presence in the UK is through Sime Darby London Ltd (SDLL) which has acquired a property in Bognor Regis for about £10.5mil.

Recently, the company signed a conditional sale agreement to sell part of the property for £26.5mil.

“With Britain’s property prices having dropped by some 40% and 50% since the global financial crisis, there are ample opportunities to pick up good assets at depressed prices. Our management is eager to explore London’s West End for some good low priced assets that are up for sale there. In the next few weeks, we will be putting in our bids for some open tenders. We believe there are still many opportunities to shop around for some good bargains in Britain,” Badlishah says.

With its wide geographical spread and relentless efforts to expand further, Sime Darby Property may become a household name in many other cities around the globe in the years to come.

By The Star

A master plan project spanning two decades

The main growth driver for Sime Darby Property Bhd in the coming years will be the development of Sime Darby Vision Valley (SDVV), according to managing director Datuk Tunku Badlishah Tunku Annuar.

The ambitious development has been conceptualised in line with the National Physical Plan which calls for the development of the Kuala Lumpur Conurbation.

Stretching across the state of Selangor and Negeri Sembilan, the KL Conurbation covers an area of 1.2 million acres of which 126,000 acres belong to Sime Darby. Of this, 80,000 acres have been earmarked for development.

Tunku Badlishah says SDVV will strengthen the country’s position as a preferred global destination for the promoted sectors within the development that include tourism and entertainment; healthcare and wellness; education; green tech park, sports; and aviation-related industries.

A master-planned project that will span two decades, SDVV is expected to generate a GDV of between RM25bil and RM30bil.

He adds that Sime Darby Property is in the final stages of fine tuning the master plan for the mammoth project which is expected to be finalised in the next two months.

The first new township to be launched by Sime Darby Property will be the 1,000-acre Elmina when it rolls out early next year.

Says Tunku Badlishah: “The merged Sime Darby Group is committed to developing sustainable futures and Elmina East will be the first township launched post-merger as part of the SDVV master development plan.

“Elmina East is earmarked to be a pilot sustainable neighborhood development which will become a benchmark for Sime Darby Property’s future community developments.”

Elmina East will have an average of 80% permeability which means in a neighborhood, a person would be able to walk anywhere within a 380m radius within five minutes in 80% of that area.

“Our study shows that this is almost 30% higher than some of the best existing townships in the country,” he notes.

The company is also planning to connect the township via a network that rides on High-Speed Broadband Services (HSBB) to reduce travelling time in physical networking.

This in turn would allow business within the township to focus on productivity.

“We anticipate an increase in teleworking or flexi-hours when HSBB comes on live.

“We anticipate at full maturity, we would see businesses in Elmina reduce up to 2.5 tonnes of CO2 emission per person per annum; that is equivalent to a reduction of 40% per capita emission.

“In addition, we have also created vehicle-free zones in key commercial areas that will encourage better interaction between the residents and their surroundings.

“We also intend to create a series of infrastructure services that are connected by a convergence system – that means our water, common facilities; security and communication can be centrally managed,” Badlishah further explains on the plan.

Elmina East will be served by an integrated water-management solution which covers management of clean water, treatment and conditioning of grey water that is collected from surface run-offs and domestic grey water; and treatment of black water from the sewage plants.

The company is also working on developing a Building Automation System (BAS) that will be a given feature in all its houses.

“The BAS will allow better management of security, energy and climate control of the houses. We anticipate our residents would enjoy savings of up to 57% from power consumption by applying an efficient BAS application alone,” he says.

Based on the Building Research Establishment’s (BRE) Sustainable Development Excellence Framework that promotes components for sustainable communities, the aim is to reduce the per capita carbon footprint by 40% through more economical energy usage, less car usage and use of construction materials that are certified products from renewable forest.

“With all the ongoing initiatives, we are confident the synergistic transformation of Sime Darby Property will not only create the largest but the best property company in the country,” Badlishah says.

By The Star (by Angie Ng)

Emkay plans project in Damansara Perdana

PETALING JAYA: Emkay Group plans to develop in Damansara Perdana a project on a 9.2ha site which will offer four million sq ft of built-up space.

From left: Tan Sri Mustapha Kamal Abu Bakar, Bank Rakyat managing director Datuk Kamaruzaman Che Mat and Petaling Jaya City Council Mayor Datuk Mohamad Roslan Sakiman at the launch WAN’s Avenue @ Neo Damansara.

Chairman Tan Sri Mustapha Kamal Abu Bakar said the plan was now awaiting approval from the authorities.

“I can’t give much details at this moment but the development will focus on commercial properties that involve corporate offices,” he said yesterday after the launch of WAN’s Avenue @ Neo Damansara in Damansara Perdana.

Mustapha said the company also planned to sell some of its land as it had about 3,200ha.

“We may sell or enter into a joint venture with other companies to develop our land-bank as it is too big,” he said, adding that the property outlook was improving based on the sales performance of its listed company, MK Land Holdings Bhd.

“An investor had just bought 178 units of Block C at our Armanee Terrace condominiums. This is a big sign that the property market sentiment is picking up again. Our focus now will be on our core products, which consist of The Rafflesia, Armanee Terrace condominiums and Metropolitan Square at Damansara Perdana, to enhance our profit,” he said.

Neo Damansara, with a gross development value (GDV) of RM587mil, is divided into three phases and is scheduled for completion in 2013.

Situated on 3.04ha, the first phase – WAN’s Avenue – with a GDV of RM100mil, has already been sold and handed over to the buyers.

Phase two will consist of one tower block of 374 serviced apartments with an estimated GDV of RM270mil, while the final phase will see a corporate office tower and an eight-storey building with a GDV of RM177mil.

Paradigma Intan Sdn Bhd, a subsidiary of Emkay, is the developer and this is its first project.

By The Star

Local property market to pick up soon: Emkay boss

The Emkay group of companies, controlled by property tycoon Tan Sri Mustapha Kamal Abu Bakar, expects the local property market to pick up soon, judging by the response to its recently launched condominium block in Damansara Perdana, Selangor.

"A private investor bought Block C of the Armanee Terrace condominium development, which features 178 units. This showed that investors have confidence in the Malaysian property market. The market is good with funding available," Mustapha Kamal said after launching Wan's Avenue at Neo Damansara in Damansara Perdana yesterday.

"Sales of (properties by) Emkay and (associate firm) MK Land Holdings Bhd has been rising and we will continue to focus on projects such as Neo Damansara, Rafflesia, Armanee and Central Square."

Mustapha Kamal also said the group will sign an agreement with a university in two weeks to lease 2,000 units of its condominiums to undergraduates.

Meanwhile, Emkay has no plans to buy new land to beef up its landbank but would sell its own land, of which proceeds will be used to develop and finance its own land at another strategic locations to hasten its own speed of development.

"We can develop our landbank either on our own or on a joint venture basis," said Mustapha Kamal.

The group owns some 2,868ha of land in the country, while MK Land holds another 3,239ha, which will keep the group busy for the next 10 years.

Meanwhile, Neo Damansara is the first commercial project by Paradigma Intan Sdn Bhd, a subsidiary of MKN Group Sdn Bhd.

Spanning 3ha, Neo Damansara has a total gross development value of RM587 million and features 1,087 units of shop offices, show rooms, an office tower and a food and beverage plaza. The development is due for completion in 2013.

Neo Damansara is divided into three phases, with Wan's Avenue being Phase One. Already, all 84 units of its shop offices have been sold out.

Phase One also sees the construction of a 12-storey building, comprising 84 units of shop offices, penthouse suites, office suites and retail shops.

By Business Times (by Zaidi Isham Ismail)

Selangor Dredging to go big in Singapore

KUALA LUMPUR: Selangor Dredging Bhd (SDB) plans to launch more luxury condominiums in Singapore after its maiden project there, comprising 22 luxury condos at Wilkie Road, received good response and drew in sales worth RM163mil.

Teh Lip Kim ... ‘Singapore has been identified by Selangor Dredging as a place of growth.’

“We do have projects in the pipeline for Singapore,” managing director Teh Lip Kim said at the company AGM here.

“Singapore has been identified by SDB as a place of growth and there are potential development opportunities that suit our niche market.”

The former tin mining company recently acquired a piece of land in the Newton Circus area of Singapore and is in the works to build 110 luxury condos.

The project was expected to generate a revenue of RM450mil for the company, Teh said.

While there are no immediate plans to expand property development beyond Malaysia and Singapore, Teh did not rule out the idea, citing the recovery in regional propert markets.

On SDB’s controversial Damansara 21 project in Kuala Lumpur, chairman Eddy Chieng confirmed that the stop-work order issued by City Hall had not been lifted.

The hillside construction of 21 luxury bungalows at Damansara Heights drew protests from the public due to concerns over its enviromental impact on surrounding areas.

Chieng dismissed fears that the project might cause landslides, claiming that Damansara 21 was benchmarked against standards in Hong Kong, which has many hillside developments.

“We have fully complied with the Government’s recent guidelines regarding hillside developments, and we are just waiting for further approval,” he said.

SDB reported a net profit of RM17.24mil on turnover of RM164.07mil for the year ended March 31.

By The Star

Selangor Dredging: Up to RM500m launches in pipeline

PROPERTY developer Selangor Dredging Bhd expects to launch several developments totalling RM400 million to RM500 million in gross development value by the end of its fiscal year ending March 31 2010.

The developments include two remaining blocks of its Five Stones condominium development in SS2 in Petaling Jaya and a 33-storey high-rise condominium in Singapore.

"To actively manage the soft property market, we have rescheduled some of our launches such as the Five Stones development," its managing director Teh Lip Kim told reporters after the group's annual general meeting in Kuala Lumpur yesterday.

It has brought forward the launch date for the two remaining blocks of the Five Stones development from the middle of next year to the first quarter.
Five Stones comprises five blocks, with three blocks launched last week. It has already sold 70 per cent of the 185 units.

"We are also resizing some of our units in other property projects. Some of our layouts were relatively big and we have decided to decrease the size," she added.

For instance, the 33-storey condominium project located near Newton Circus in Singapore has been re-planned to house smaller units. This development, to be launched either by year-end or the first quarter of next year, will now have 110 units, instead of 66 units.

Selangor Dredging's unbilled sales from recent launches, including Five Stones and another Singaporean development, Jia, stand at RM235 million.

The group saw its fiscal first-quarter earnings dip because of lower sales recorded by the hotel operation due to the Influenza A (H1N1) virus. Selangor Dredging owns and manages Hotel Maya in Kuala Lumpur.

Net profit for the three months to June 30 2009 dropped 62 per cent to RM2.7 million, while its revenue declined 24 per cent to RM48.7 million.

"The last quarter was bad because all our overseas guests were mainly from Europe, Australia and the US, and they basically stopped travelling. In addition, MNCs (multinational corporations) froze their corporate travels, so we had many cancellations," said Teh.

However, there are signs of improvement for the hotel operations in the present quarter, he said.

By Business Times (by Jeeva Arulampalam)

E&O plans RM4b launches over next 3 to 4 years

PROPERTY developer Eastern & Oriental Bhd (E&O) plans to launch RM4 billion worth of properties over the next three to four years, as the local economic and property market conditions improve.

Of the total, half will be launched in Penang and the rest in the Klang Valley.

"Six to nine months ago, everyone was cautious in some ways and sceptical about buying in the high-end market.

"But based on our experience and performance in Penang and Kuala Lumpur over the last three months, we believe we can still continue to launch (properties) and expect good response at least for the rest of the year," said managing director Datuk Terry Tham after the company's extraordinary general meetings in Kuala Lumpur yesterday.

"So far, as far as our launches are concerned, we are fortunate that all of our them have been well received, with at least 80 per cent of the properties sold," he added.

Tham said the company may hasten its launch of the RM4 billion worth of properties to two years, if the market recovers faster than expected.

E&O, which received shareholders' nod to raise some RM200 million via a rights issue yesterday, plans to raise another RM300 million internally.

"We are looking at disposing of inventories and non-strategic landbank. So far, we have raised some RM100 million through these initiatives," said executive director Eric Chan.

Proceeds from the RM500 million fund-raising could be used to increase cash flow, lower gearings, as well as for expansion. E&O expects to raise the funds over the next 18 months.

E&O's net gearing, which as at March 31 stood at 0.79 times, could be lowered to as low as 0.16 times via the fund-raising.

By Business Times (by Goh Thean Eu)

E&O plans to launch RM4bil property projects

KUALA LUMPUR: Property developer Eastern & Oriental Bhd (E&O), which is looking to raise RM200mil from a 1-for-2 rights issue slated to be completed before the year-end, is targeting to launch RM4bil worth of properties in two to three years.

Managing director Datuk Terry Tham said about RM2bil worth of projects would be launched in the Kuala Lumpur central business district and the balance in Penang.

He said most of E&O’s current projects had good take-up rates, despite the tough economic environment.

“On average about 80% of our property projects have been taken up,” he said after the company EGM yesterday.

He said E&O’s fund-raising exercise would help the company take advantage of the opportunities that might arise in the next economic upturn.

The fund raised would have a coupon of 8% per annum, and irredeemable convertible secured loan stocks (ICSLS) holders have the option to convert to E&O shares any time within the 10-year tenure to take advantage of any upside in the share price.

Also, the ICSLS are secured against the assets of the E&O group to mitigate the risk for holders in the event of a default.

“The money raised from the rights issue will be used to fund strategic acquisitions for expansion purposes,” Tham said, adding that it would also help lower E&O’s gearing from 0.79% to 0.16%. We will channel the bulk of funds raised specifically towards the development of ready-to-market and strong-branded E&O products in prime locations.”

Tham said E&O had another target: raising RM500mil within 18 months. “We have raised RM100mil from property sales and RM200mil could potentially be raised from the rights issue and the balance from internal funds and future property sales.”

He said it was important for E&O to strengthen its balance sheet before embarking on an expansion. Currently, E&O has cash reserves of about RM300mil.

Tham said in the past three months the property market, especially the high-end category, had shown early signs of recovery.

By The Star

Metro Kajang to partner PKNS for RM500m development in Selangor

PROPERTY developer Metro Kajang Holdings Bhd will partner Selangor State Development Corp (PKNS) to develop an integrated project on a 2.4ha leasehold land in the city centre in Kajang, Selangor, for RM500 million.

Group senior general manager Chong Yong Han said the project, dubbed "Kajang Walk", will feature a three-star 300-room city hotel, a retail mall and offices.

Chong said the properties will have a gross built-up area of 1.5 million sq ft and both Metro Kajang and PKNS will jointly promote them to investors in Asia-Pacific, including Malaysia.

"This is our first venture with PKNS and we hope to work together on other potential developments," he said at a signing ceremony in Shah Alam, Selangor, yesterday.
The event saw Metro Kajang college operator Andaman Group and Q-Cell, a Germany-based solar-cell manufacturer inking agreements with PKNS to develop land at the latter's 400ha Selangor Science Park 2 (SSP2) integrated project in Cyberjaya.

PKNS general manager Othman Omar said he believes that the synergistic relationship between PKNS and Metro Kajang will benefit both parties.

By Business Times (by Sharen Kaur)

RM3.8bil investment for science park

SHAH ALAM: Selangor State Development Corp (PKNS) has attracted RM3.8bil worth of investments via three investors for its Selangor Science Park 2 (SSP2) that is under development in Cyberjaya.

The investors are Q-Cell from Germany, the Andaman Group and Serba Sentosa Sdn Bhd, a wholly-owned subsidiary of Metro Kajang Holdings Bhd.

SSP2 is a 1,300-acre mixed development project with gross development value of RM3bil which is expected to be completed between 10 and 15 years.

PKNS general manager Othman Omar said Q-Cell, the largest manufacturer of solar wafer and cells in the world, had started operations in SSP2 in May.

“The company is also collaborating with us to energise PKNS Gallery in SSP2,” he said yesterday after a memorandum of understanding signing ceremony with the investors, witnessed by Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim.

Q-Cell plans to take up to 100 acres in SPP2 which will involve investment of about RM3bil.

The Andaman Group will develop another SEGi College campus, estimated to cost RM300mil. It had developed a similar campus in PKNS’ earlier project, Selangor Science Park 1, in Kota Damansara.

“Metro Kajang will collaborate with PKNS to develop our commercial and residential area in SSP2.

“In return, PKNS will jointly undertake a commercial development with Metro Kajang in Kajang town centre,” Othman said, adding that the land belonged to Metro Kajang.

Metro Kajang’s project in SSP2 will involve an investment of about RM500mil.

Going forward, Othman said PKNS was in serious talks with local and foreign investors to invest in SSP2. “We want our investors to be in line with the SSP2 concept of high-technology and environment-friendly industries,” he said.

SSP2 would be a low density and sustainable development, with over 20% of the area reserved for green areas and public parks.

By The Star

Hua Yang unit buys land in Pulai

HUA Yang Bhd’s wholly-owned Grandeur Park Sdn Bhd has bought 140.87 acres planted with oil palm in Pulai, Johor, for RM35.15 million from two vendors.

It plans to turn the land into a mixed commercial and residential township with estimated gross development value of RM350 million, Hua Yang said.

By Business Times

Hard Rock Hotel set to add RM10m to Penang economy

The opening of Malaysia's first Hard Rock Hotel in Penang next month is set to generate up to RM10 million for the island-state's economy.

Hard Rock Hotel Penang general manager John Primmer said the figure includes wages and spin-offs to local businesses, including transportation companies and an estimated 100 local vendors.

"We are planning to open three Rock Shop merchandise outlets (in the hotel), offering 150 items from t-shirts, caps, pins to Hard Rock souvenirs, and expect up to RM4 million in revenue from the sale of these items during our first year of operation," he told Business Times.

"These outlets are located at different parts of the hotel and each shop carries a different range of items," he said, adding that the Rock Shop by the main driveway to the hotel will allow convenience and access to the public who are not hotel guests.

The RM150 million Hard Rock Hotel Penang will open its doors on September 19 and has created over 200 jobs.

"Due to the brand and the concept of the hotel, we are looking at young information technology-savvy couples (30 per cent), families (30 per cent), older rockers (20 per cent), and the meetings, incentives, conventions and exhibition market (20 per cent) in terms of the markets we are targeting," Primmer said.

He added that while the concept that the Hard Rock brand carries remains, what makes the Penang property unique is that it will be the first Hard Rock Hotel with a beach front in the world.

"At the same time, it adapts a modern concept compared to the existing Hard Rock hotels outside of the US," he added.

The first Hard Rock Hotel in Asia opened in Bali, Indonesia, in 1998, followed by one in Pattaya, Thailand, in 2001.

The Penang property will be the 10th Hard Rock Hotel worldwide.

By Business Times (by Marina Emmanuel)

Builders cautious on construction prospects

The construction sector, which recorded marginal growth of 0.6 per cent in the first quarter of 2009, should be cautious of its prospects for the rest of the year.

"The total value of projects awarded by the government and private sector, is showing a declining trend," said Malaysian Master Builders Association of Malaysia (MBAM).

Its vice-president, Datuk Aziz Bahaman, said recent data released by the Construction Industry Development Board (CIDB) for the first quarter of 2008 and 2009, pointed to a reduction in the number of projects awarded.

Aziz said total value of projects awarded to the construction sector, between January and March 2009, fell sharply by 70.55 per cent to RM6.14 billion from RM20.85 billion in the corresponding quarter.

Addressing the realities of Malaysia's property and construction sector in a concurrent session held at the Industry Insights Seminar in Kuala Lumpur yesterday, Aziz said there was a contraction of 66.19 per cent or RM5.79 billion in the number of government projects awarded during the quarter under review.

As for the private sector, Aziz said the value of projects awarded plunged 73.70 per cent or RM8.92 billion.

The government awarded RM6.95 billion worth of construction projects under the first stimulus package in November 2008 and RM10 billion under the second stimulus package in March 2009.

The impact of these packages is expected to be felt in the third and fourth quarters of 2009.

By Bernama

Equine plans high-end project

SERI KEMBANGAN: Property developer Equine Capital Bhd is proposing to acquire 108.4ha with an estimated gross development value (GDV) of RM700mil in Batu Kawan, Penang.

The acquisition of the land, for high-end property development, will be funded by internally generated funds and external borrowings.

“We are negotiating with state authorities to expedite the purchase of the land,” Bernama quoted chairman Datuk Seri Tengku Ahmad Shah as saying after the company AGM yesterday.

Equine currently has a total land bank of 141.2ha in Seri Kembangan, Cheras and Batu Kawan, with an estimated GDV of RM1.1bil.

”We are on the look out to acquire land banks in Selangor and Negri Sembilan,” Tengku Ahmad Shah said, adding that its current land bank was sufficient for the company’s property business for the next five to 10 years.

He said Equine would launch several commercial and residential properties this year, with a GDV of RM300mil, mainly in Seri Kembangan, Cheras and Batu Kawan.

He said the development would include three- and four-storey shop lots and landed residential properties.

“We are projecting a growth for our current and future financial years,” Tengku Ahmad Shah said, adding that the company, as at March 31, 2009, had unbilled sales totalling RM70mil.

It posted a pre-tax loss of RM43.75mil for the financial year ended March 31, 2009 as turnover dropped 21% to RM86.083mil.

Tengku Ahmad Shah said Equine Capital would continue to dispose off its non-core business and assets to concentrate on property development.

It planned to sell Wisma KLIH in Bukit Bintang, which was valued at RM35mil, two years ago.

Meanwhile, Equine in a filing with Bursa Malaysia said it had signed a sales and purchase agreement to acquire a 15.88-acre piece of leasehold land in the district of Petaling from Jelang Puncak Sdn Bhd for RM47.4mil.

It planned to develop 156 units of two- and three-storey shopoffices with an estimated gross development value of RM127mil and a gross profit of RM18mil.

It added that the project would commence at the end of next year and was targeted for a mid-2012 completion.

By The Star

Taman Equine buying land in Selangor

EQUINE Capital Bhd's wholly-owned Taman Equine (M) Sdn Bhd is buying a piece of land near Equine Park in Petaling, Selangor, for RM47.4 million, to turn it into a commercial centre.

It will acquire the 64,303 sq m land from Jelang Puncak Sdn Bhd. The land is presently used for recreation and equestrian activities.

In a filing to Bursa Malaysia yesterday, Equine said it plans to build 156 units of two- and three-storey shop offices there, with an estimated gross development value of RM127 million and a gross profit of RM18 million.

The development cost is estimated at RM109 million and will be funded via bank borrowings and internally generated funds.

Development is expected to start by end-2010, with completion in mid-2012.

By Business Times

Mah Sing Q2 net profit falls 38pc year-on-year

Property developer Mah Sing Group Bhd posted a 38 per cent drop in its fiscal second-quarter net profit from a year ago, as last year's gain was boosted by a large property sale.

Its net profit was RM23 million in the quarter to June 30 2009, which is a slight improvement compared to first-quarter net profit of RM22.6 million.

"The group believes the property market is gaining momentum for a likely up cycle in the second half of 2010," Mah Sing said in a statement to Bursa Malaysia yesterday.

The company's revenue for the second quarter was RM167.2 million, down from RM195.4 million a year ago.
Sales for the period were driven by residential property projects like Kemuning Residence, Hijauan Residence and Aman Perdana in the Klang Valley, and Sierra Perdana and Austin Perdana in Johor Baru.

For the first six months, Mah Sing made a net profit of RM45.7 million against RM59.6 million in the same period a year earlier.

Revenue was down 5.5 per cent to RM317.5 million.

However, the company has made sales of RM543 million in the first seven-and-a half months this year, which is more than its full-year target. This was mainly due to the sale of a building in its Southgate project in Kuala Lumpur for RM226 million.

It has also yet to book RM818 million of sales of residential and commercial properties as at June 30 this year.

"The strong take-up for our projects is evidence that the property market is resilient, and niche products with good branding coupled with the right concepts and designs in prime locations will continue to do well," group managing director Tan Sri Leong Hoy Kum said in a separate press release.

By Business Times

Singapore property sales set for record year

SINGAPORE: Record sales of private homes here in July may push the 2009 total to an all-time high as local sentiment and global economic prospects improve, analysts said yesterday.

A total of 2,767 apartments and houses were sold in July - the most ever sold in a single month - and this brought the total for the first seven months of this year to more than 10,000 units, according to official figures.

The previous annual record of 14,811 units was set in 2007 and experts believe there is still pent-up demand from buyers sidelined by high prices that year and the financial crisis of 2008, when property sales dipped sharply.

Buyer interest began to pick up in the first quarter of this year and exploded in the second quarter as developers launched affordable projects and foreign investors returned to the Singapore property market.

"It (2009) is likely to beat the 2007 record of 14,811 units sold," said Chua Chor Hoon, head of Southeast Asia research at property advisers DTZ Debenham Tie Leung.

Property purchases in August, a traditionally slow month for sales in Singapore, are still going strong with some projects sold out or close to selling out within one or two weeks of launch, she noted.

"The general mood is that the worst is over and better times are coming. So buying activity will continue to be strong, unless there is a shock," Chua added.

The government has warned that it may have to intervene if a property bubble forms due to speculation although most analysts do not expect any drastic measures unless housing prices spiral out of ordinary families' reach.

Singapore's economic output is forecast to shrink by 4 to 6 per cent this year, but the city-state is now technically out of recession and back on a growth path.

By AFP

CapitaLand to invest in China and Vietnam

SINGAPORE: Southeast Asia's largest property developer CapitaLand said yesterday it was deploying S$1 billion of S$1.8 billion (S$1 = RM2.44) in capital raised from a recent rights issue to its businesses in China, Vietnam and the Ascott Group.

It said S$500 million of the S$1 billion will go to its China arm, S$299 million to Vietnam and the remainder to Ascott, a wholly-owned unit that operates serviced apartments. The rest of the S$1.8 billion will be kept for further investment opportunities.

"With the worst of the crisis behind us, and with a solid balance sheet, we are ... ready to embark on the next phase of our growth," CEO Liew Mun Leong said.

By Reuters

US home construction posts surprise fall in July

WASHINGTON:US home construction saw a surprise decline in July, with both new starts and building permits suffering a drop after rising for two months, the Commerce Department said yesterday.

Privately-owned housing starts fell at a seasonally adjusted annual rate of 1.0 per cent to 581,000 from the revised June estimate of 587,000.

Building permits to construct privately-owned homes fell to a seasonally adjusted annual rate of 560,000, 1.8 per cent below the revised June rate of 570,000.

By AFP

US$12.5b link proposed

Straits of Malacca Partners Sdn Bhd (SOMP) has proposed to build a US$12.5 billion (RM44.3 billion) bridge connecting Malaysia and Indonesia, a project that was mooted 14 years ago.

The bridge, which will be almost four times the length of the Penang Bridge, will cross the Straits of Malacca at the narrowest point between Malacca and Dumai, Sumatra in Indonesia.

SOMP chairman Tan Sri Ibrahim Zain (picture) said the company has submitted the proposal, both to the Malaysian and Indonesian governments for approval.

"We hope to secure the approval from the two governments by the end of this year or early 2010.

"We need to start the project as soon as possible so that we would not pay higher construction materials cost," he told reporters after a special seminar on the 48.69km-long bridge in Kuala Lumpur yesterday.

Ibrahim said 15 per cent of the funding for the project will come internally while the rest from bank borrowings.

China's Exim Bank plans to support the bridge project.

"Under the bank's policy, we can provide funding up to 85 per cent for such infrastructure projects," Exim Bank of China general manager Tang Yinlian said.

A Chinese firm, Hunan Provincial Communications Planning, Survey and Design Institute (HNCDI), is also involved in the project.

"Exim Bank of China sees the proposed Straits of Malacca bridge as one the biggest in the world and is a far-reaching programme for Malaysia and Indonesia as well as other countries in Southeast Asia," she said.

SOMP has also proposed a joint committee at the government level for both countries to oversee security issues such as immigration and customs.

Managing director Datuk Lim Sue Beng said apart from the bridge, HNCDI also proposed the construction of an underground tunnel that crosses the Straits of Malacca.

Ibrahim and Lim are the major shareholders of SOMP.

Malacca Chief Minister Datuk Seri Mohd Ali Rustam, who attended the seminar, said the proposed bridge will be the longest man-made link between two countries.

"We know that besides government approvals, there are other issues such as land acquisition to be dealt with but that should not be a problem.

"The bridge is a viable and profitable project, and expected to boost the economies of both countries," he said.

He said Prime Minister Datuk Seri Mohd Najib Razak is supportive of the project, first mooted by former prime minister Tun Dr Mahathir Mohamad in 1995.

It was shelved due to the Asian financial crisis in 1997.

The bridge project was brought up during the Ninth Malay World Islamic Convention in Malacca in January this year.

By Business Times (by Kamarul Yunus)

TH, India developers to build luxury homes in Nilai

TH Properties and the developers will build super size luxury bungalows, each standing on 0.4ha, marketed under Malaysia My Second Home.

TH Properties Sdn Bhd will launch by mid-2010, two luxury housing projects worth RM1 billion at its 2,046ha freehold Bandar Enstek development in Nilai, Negri Sembilan, in a joint venture with developers from India.

Chief executive officer Zaharuddin Saidon, who declined to reveal the developers, said each developer will be given 40ha of land to develop under the joint-venture agreement

Zaharuddin told Business Times that they will build super size luxury bungalows, each standing on 0.4ha, marketed under Malaysia My Second Home.

He added that the bungalows would be sold to high networth individuals from India, the Middle East and Singapore.

It is learnt that each bungalow will sell for around RM5 million.

"We can't reveal more details as the agreement is still being finalised. We hope to sign it next month. The developers are preparing the master plan for approval," Zaharuddin said.

"In terms of development value, the Indian partnership will be our biggest investment from overseas into Bandar Enstek."

Zaharuddin said TH-NSTC Sdn Bhd, the developer for Bandar Enstek had been approached by the developers at the start of the current year and initial talks have led to the signing of a memorandum of understanding in March.

He said TH-NSTC is open to similar JVs with local and foreign developers but they should be able to add value to the township and bring in their own market catchment.

"We will consider allocating land to them to develop but we will be cautious in our approach. We rather do it ourselves while we can," Zaharuddin said.

TH-NSTC is a 70:30 venture between TH Properties, the property development arm of Lembaga Tabung Haji, and the Negeri Sembilan State Development Corporation, respectively.

The project is 30 per cent developed with 1,200 units of single and double-storey terraced hou-ses, bungalows and semi-detach-ed houses built and occupied.

The entire development will feature residential, industrial, commercial and institutional components with properties worth RM9.2 billion.

The project is scheduled to be completed in 2025.

By Business Times (by Sharen Kaur)

Unbilled sales of RM1b to boost Sunrise results

PETALING JAYA: Sunrise Bhd’s results for its current financial year will be supported by its unbilled sales of about RM1bil but the tough outlook for the luxury property market in the Klang Valley will continue to be a threat.

According to OSK Research, Sunrise’s unbilled sales stood at RM1.01bil as at July with a potential addition of RM157.1mil pending the signing of sale and purchase agreements.

The research house said the company was expected to continue to register commendable earnings growth for most of its financial year ending June 30, 2010 (FY10) supported by its high unbilled sales. However, the outlook for the Klang Valley luxury condominium market would continue to be tough until some time next year.

It said developers’ claims of better property sales from recent launches should not be misconstrued as a sign of recovery as it was achieved via various discounts and innovative loan packages.

“This can cut into a developer’s earnings margin and such incentives cannot last indefinitely,” it said.

OSK Research viewed that Sunrise’s management sentiment was one of cautious optimism with the belief that the worst was indeed over for the sector.

“Being cautious, however, the management remains uncommitted to any timing and pricing of its future launches,” the research house said.

Meanwhile, AmResearch acknowledged that Sunrise would continue to recognise profits from its strong unbilled sales for FY10 onwards.

Its unsold inventories had dropped to about RM200mil as at June versus RM300 to RM400mil in the preceding quarter.

“We feel Sunrise will step up its plans for new launches especially for MK28 and Solaris Towers KL, which have been granted all the necessary approvals,” the research house said.

For its overseas projects, AmResearch said the management was still cautious in launching overseas projects.

Its project in Canada, which has a gross development value of RM1.2bil, would be launched in two phases three years apart.

Sunrise posted a net profit of RM43.1mil for the fourth quarter ended June 30 against RM44.9mil a year ago. Its revenue stood at RM237.3mil.

For FY09, it reported a net profit of RM156.2mil on a 17% growth in revenue to RM803.9mil.

OSK Research said the growth for FY09 was driven by higher earnings contribution from its property projects that included MK10, Dutamas, Maiden, MK11 and the Residence.

“Since the introduction of the 10/90 financing scheme and two-year deferred payment for buyers, new property sales indeed picked up in the fourth quarter, particularly for the MK11 and the Residence,” the research house said.

HwangDBS Vickers Research said Sunrise’s net profit for the fourth quarter was within its expectations.

“Its net gearing rose to 46% from 38% in the third quarter due to funding for on-going projects but it is expected to improve with unbilled sales,” it said.

HwangDBS raised the company’s earning estimates by 37% to RM148mil after taking into account stronger take-up rates for upcoming launches.

“Consequently, we raised the target price to RM2.60 from RM2.10 based on 30% discount to revised net asset value of RM3.77 and maintain our ‘buy’ call,” it said.

AmResearch revised Sunrise’s earnings estimates to RM174mil and RM177mil for FY10 and FY11 respectively, in view of the expected launches for its MK28 and Solaris Towers.

It forecast the company’s FY12’s earnings at RM178.3mil.

The research house also expected Sunrise’s gearing to improve to 34% in FY10 and 22% in FY11.

By The Star (by Lee Kian Seong)

Land sale deal extended

IRIS Corp Bhd and Mapletree Industrial Fund Ltd have agreed to extend the deal to sell two plots of land with a building at Technology Park Malaysia.

The parties now agreed that negotiations to seal the sale and purchase agreement of the land and a four-and-a-half storey block be extended to November 18 this year from August 19 originally.

According to the plan first announced in 2007, Iris would sell the land to Mapletree before leasing them back.

By Business Times

Subang SkyPark eyes up to RM7m revenue from terminal

SUBANG SkyPark Sdn Bhd is confident of recording RM6 million to RM7 million in revenue from its refurbished Skypark Subang Terminal (SST), formerly known as Terminal 3, by May next year.

Executive director Tan Sri Ravindran Menon said the city airport operator was confident of achieving its target with the completion of works at SST by October this year.

"The RM40 million terminal is 90 per cent completed and destined to become Malaysia's premier airport in the city," he said at a media sneak preview of the SST in Petaling Jaya, Selangor yesterday. When fully operational, the SST is able to accommodate an average of 60 flights daily, comprising of local and regional arrivals and departures, he said.

Presently, Berjaya Air and Firefly are using the terminal for international and domestic flights.

The 150,000-square foot SST is expected to handle 2.5 million passengers by end of this year, Ravindran said.

Currently, passenger numbers are peaking at 60,000 a month, he said.

The company is involved in the RM300 million redevelopment plan for the Subang airport, consisting of RM40 million for phase one, RM110 million for phase two and RM150 million for phase three.

Ravindran said the three phases included a city airport for turbo-prop aircraft, fixed base operations for business jets, and maintenance, repair and overhaul facilities.

The three phases are scheduled for full completion by end-2011, he said.

By Bernama

Ideal Property to launch RM1.1bil project in Penang

Datuk Alex Ooi showing the scale model of the RM1.1bil Penang International City project

GEORGE TOWN: The RM1.1bil Penang International City, located on a 100-acre site in Bayan Lepas, will be the most expensive and largest project unveiled on the island this year when it is launched in October, said Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi.

Ideal Property is developing the project through a joint venture with Koperasi Tunas Muda.

It comprises some 1,800 landed residential and high-rise properties, which make up 80% of the project, with commercial properties taking up the rest, according to Ooi.

“Our strategy is to first launch the residential components, strengthen the infrastructure, and then move on to the commercial phase, comprising a four-star hotel, a 250,000 sq ft lifestyle shopping mall, and a 150,000 sq ft resort office building, equipped with recreational facilities, besides modern IT infrastructure,” he said.

“The landed residential components, over 500 terraced and semi-detached units, will be launched in three phases between October 2009 and April 2010.”

Subsequently residential high-rise properties, comprising over 1,000 condominium units will be launched while “sometime in late 2010 or early 2011, the commercial components will be launched,” he added.

Ooi said the landed properties would be priced between RM550,000 and RM780,000, while the apartments between RM300,000 and RM500,000, adding that a 12-acre site would be allocated for the development of an education institution.

“We will also create a one-acre man-made lake as part of the project,” he said.

The project would be marketed in Hong Kong, Singapore, Indonesia, and other parts of Asia, Ooi said.

“We are confident as the property market in China has rebounded, which will have a positive impact on the regional market,” he said.

The recent brisk sales of the One World and One Sky high-rise projects in Bayan Baru showed very strong demand for residential properties on the island, Ooi said.

“The One World and One Sky high-rise properties by Ideal Property and Kuwait Finance House were respectively sold out after their launches in May and July.

“Both projects have over 500 condominium units, priced between RM235,000 and RM410,000,” he said.

Ooi said Ideal Property was also exploring to launch other projects with Koperasi Tunas Mudas, which owns other strategically located sites in the southwest district of the island.

“We are considering the development of modern office buildings next year,” he said.

Ideal Property is part of the Penang-based Ideal Group, comprising over 20 companies, involved in property development, property investment holding and business process outsourcing.

In property development, the group has since 2002 developed over 600 units of landed and residential high-rise properties in Penang and Kuala Lumpur.

The group currently owns and manages three properties on the island, including the landmark Northern Tower at Jalan Sultan Ahmad Shah (or the millionaires’ row) and a light industrial park in Kepong.

Besides Penang, the group also has property investment businesses in Cambodia, Shanghai and Beijing in China.

By The Star (by David Tan)

Glomac selling corporate tower to govt agency

Property developer Glomac Bhd is selling one of its two corporate towers at its upmarket RM800 million Glomac Damansara development in Petaling Jaya to a government agency for RM200 million.

Its executive vice-chairman Datuk Richard Fong Loong Tuck said the deal is due to be finalised by month-end.

Glomac Damansara consists of a 15- and 30-storey corporate tower, two 25-storey serviced apartment blocks, five- and eight-storey shop offices, nine- and 11-storey office suites and a hybrid retail mall.

Fong told Business Times the government agency will buy the 30-storey corporate tower but it wants the height reduced by five floors.
"We are in negotiations with the agency and will plan the design of the building according to their request. Since we are reducing the height of the tower, we will raise the floors for the other buildings," Fong said.

Fong said the office suites, which will be launched in mid-2010, may be increased by two floors, increasing its value from RM120 million currently.

Fong said other investors have approached Glomac for the 15-storey tower, which is valued at RM60 million and earmarked as its new headquarters.

He added that negotiations are ongoing with some of the parties.

"We will launch and hope to sell the corporate tower, shop offices and office suites before introducing the serviced apartments and mall next year. There is demand for office space in this area," Fong said.

Glomac has sold 70 per cent of the five- and eight-storey shop offices, launched in March this year.

Fong said sales of the shop offices were slow initially but picked up from late May.

As for the apartment blocks, Glomac is mulling to launch the units in early 2010, targeting locals within Petaling Jaya, Taman Tun Dr Ismail, Bandar Utama, Damansara and Bangsar, Fong said.

Fong said the price of the apartments have been pegged at RM600 per sq ft and above.

"When we first planned the apartments, we were looking to have 208 units, each with a built-up of 1,500 sq ft. However, we have reduced the sizes to 800 sq ft to 1,500 sq ft so we are now offering 300 units for sale to the man on the street," Fong said.

"We are not targeting en bloc buyers as there are not that many around. Previously, there were a lot of buyers from the Middle East but they have become very cautious and are cash-strapped as a result of the financial meltdown," Fong said.

Fong said Glomac will start construction on the mall, which is worth RM150 million, by the end of 2010.

By Business Times (by Sharen Kaur)

'Offer local firms incentives to invest in Iskandar Malaysia'

Iskandar Malaysia in Johor is likely to recover from the economic slowdown much faster than other parts of the country.

Despite the downturn, foundation infrastructure work has begun, and there is clear political will to make the economic corridor a success, a senior valuer said.

Chartered valuation surveyor Samuel Tan said Iskandar Malaysia's proximity to Singapore and the multi-million-ringgit allocation from the federal government are also factors which will help Johor pick itself up better than others.

"A lot of overseas interest was generated when Iskandar Malaysia was launched in 2006. Johor Baru, which had been in a property slump for the past decade, is now seen as a place with good investment potential.

"Malaysians are sceptical (of Iskandar Malaysia's success) because of how the past years went, but I would remind them that it's a 25-year plan. Things will not change overnight," he said.

Tan, who is also executive director of KGV-Lambert Smith Hampton in Johor Baru, added that a statutory body like the Iskandar Regional Development Authority (Irda) also helps to convince foreign investors of the groundwork which the government has set up.

And while much still needs to be done on projects such as EduCity and the Newcastle University of Medicine Malaysia, important foundation work has begun.

"I can give examples of the Eastern Dispersal Link, Jalan Yahya Awal interchange, Southern Link and Senai-Desaru Expressway - all these facilitate traffic flow. "I believe that by the time these roads are ready, Johor Baru will have recovered from the slump and be ready to move forward."

Tan was cautious when asked to comment on reports of soaring property prices, following the Iskandar Malaysia development.

"It's true that following extensive promotion, Iskandar Malaysia captured a lot of foreign interest and things started looking up.

"Unfortunately, the present slowdown set in soon after that. So recovery has been derailed a bit."

House prices in Johor fell nearly 25 per cent following the 1997-98 economic crisis.

A two-storey house in Perling, Johor Baru, which sold for RM280,000 in 1997 will fetch about RM180,000 today.

Tan said although this trend was likely to continue next year, there could be some light at the end of the tunnel next year.

"For instance, about four years ago, a company bought 12ha of commercial land at RM30psf for a large department store in Johor Baru. More recently, they bought another plot of land but this time at RM65psf.

"Even in these uncertain times this company was willing to pay twice the price for this new piece of land. This is a sign that we're slowly moving towards better times, most probably in 2011 or 2012."

The next two years, Tan said, will be a time for Iskandar Malaysia to build up its foundation and strengthen ties with new and prospective investors.

He suggested that Iskandar Malaysia stop depending on foreign investments for the next couple of years.

"I've heard local investors claim that they're not given a level playing field. For the next two years, make it easier for local investors to set up in Iskandar Malaysia. Why not offer incentives for local companies to come in.

"The reason I'm suggesting this is because foreign investors first need to get their own house in order before they can invest overseas whereas Iskandar Malaysia cannot wait, it has to continue.

"And in the meantime, where else do we get investors from, but from our own shores," he said.

Despite the uncertainties surrounding the current business climate, Tan was hopeful about the property market in Johor.

"We're at the stage of building a foundation for Iskandar Malaysia, which is made easier with the close collaboration of the federal and state governments and the private sector.

"With that in mind, we can work towards recovery, which I believe we can expect to see in 2012," he said.

By Business Times (by Anis Ibrahim)

Mayland to expand retail mall business

Malaysia Land Properties Sdn Bhd (Mayland), a privately held property developer controlled by Tan Sri David Chiu, could add a new mall under its wings by as early as next year.

Mayland, which owns and manages the RM50 million Hartamas Shopping Centre, sees the operation of shopping complexes as an ideal avenue for recurring income.

"We are looking at expanding our recurring income division mainly by doing more retail. We believe in the Malaysian market," said its director Winnie Chiu.

"There will be something coming up soon within the Klang Valley. We expect to finalise the details by year-end," she told Business Times in an interview.

Chiu added that Mayland would consider other locations for a mall if it meets the group's criteria.

Mayland's keenness to expand the retail mall segment of its business is partly due to the double-digit revenue growth notched by its maiden 300,000 sq ft Hartamas Shopping Centre in Kuala Lumpur.

The mall, which forms part of the integrated Plaza Damas project, provided a return on investment within three-and-a-half years.

In the first three years, it grew at an average of 10 per cent year-on-year.

"Hartamas Shopping Centre has a proven track record. Our revenue has grown 35 per cent this year," she said.

This year's handsome growth numbers are the result of an additional 20,000 sq ft of space, a rental increase following tenancy renewals as well as a better tenant mix.

Tweaking its tenant mix coupled with the opening of Taylor's College a year ago has seen average patronage to the mall increase to 8,500 a day from a daily average of 6,000 last year.

"A 20 per cent increase in revenue next year is possible," Chiu said, when asked about the outlook for 2010.

She said this will be made possible by the creation of additional space through the reduction in space wastage. The improving economy will further lend support to improved revenue.

The mall has a total of 138 outlets and 35 per cent of its tenants are in the food and beverage business. Its best performing tenant is Japanese restaurant Rakuzen.

By Business Times (by Vasantha Ganesan)

Room for more listed REITs in Malaysia

REIT transactions account for only 11% of local market capitalisation

PETALING JAYA: Malaysia, which has 11 listed real estate investment trusts (REITs) and two property trusts, can accommodate more listed REITs to add further depth, liquidity and asset choices to the stock market.

Currently, REIT transactions account for only 11% of market capitalisation in the country compared with 52.1% in North America.

According to the latest Asian Public Real Estate Association’s weekly REIT report, Asia’s REIT industry has a market capitalisation of US$58.86bil, with Japan taking the lead with US$30.5bil.

Malaysia’s US$1.43bil in market capitalisation is behind the rest of the pack, including Singapore (US$15.1bil), Hong Kong (US$8.3bil), Taiwan (US$1.53bil) and Thailand (US$1.52bil).

Come next year, if Sunway City Bhd goes ahead with its proposed listing of its RM3.7bil REIT on the local bourse, it will be the industry’s largest. Also in the pipeline is CapitaLand Ltd’s retail REIT, which will be the first foreign-sponsored REIT on Bursa Malaysia.

Axis REIT Managers Bhd chief executive officer and executive director Stewart Labrooy said shareholders’ current expectations of high dividend yields would not be conducive for new REIT listings.

“The average prevailing yields of 8% to 10% are considered high. When the market stabilises and the unit price of REIT goes up, yields should come back down again to around 7% to 8%. When that happens, it will be a better time for new REITs to be listed,” he said.

Although the market environment has turned more positive following the Government’s liberalisation measures, Labrooy said there was a need to create a more attractive tax regime for REIT investors in relation to withholding tax.

“We would like to see distributions for Malaysian REITs not to be taxed to promote greater retail participation. A higher retail investor participation in the market will create a higher liquidity and trade volume,” he said.

He lauded the Securities Commission (SC) for doing a great job in supporting the local REIT industry by constantly engaging with industry players for feedback and acting on them.

“There was a complete revamp of the REITs guidelines last August. The SC has been very innovative and was the first to come out with Islamic REIT guidelines,” Labrooy said.

He said there was potential for new sectors to be introduced including toll-roads, airports, serviced apartments, university accommodation and even prisons.

In terms of total returns over the past one year, Labrooy said five Malaysian REITs (M REITs) emerged among the top 10 performing REITs in Asia. They were Al-Hadharah Boustead REIT, UOA REIT, Al-Aqar KPJ REIT, Axis REIT and AmFirst REIT.

The total returns (comprising the share value plus dividend yields) for these top performing REITs ranged from 17% to 30%.

Labrooy said M REITs had bounced back from their lows in December last year and were “displaying the true characteristics of how REITs should behave in a volatile market by making steady gains over a period.”

Although the worst may be over for M REITs as most of their unit prices have recovered to match their net asset value (NAV), there are still some challenges that need to be addressed by industry players.

“There is a need to move short-term debt into medium to long-term debt to match the leasing period and remove uncertainties of volatile interest rates. At the end of the day, it is better for industry players to opt for longer term debts and a good ratio will be 60:40 of long term to short-term debts,” he added.

There is also a need for a higher retail investor participation in the REIT market as currently the market liquidity is still low. This can be addressed by expanding portfolios and market capitalisation of each of the listed funds.

Labrooy said following the improvement in the market, Axis REIT has recently got back on its asset acquisition trail with the latest addition of a RM65mil logistics centre in Port Klang.

At the same time it is also planning a placement of 51.18 million new units into the market which will provide the funding for the purchase of an additional RM120mil of new assets which have already been identified.

“Our intended goal of achieving RM1bil in assets under management was delayed by the crisis last year but we are back on track and will continue to execute our strategy for the benefit of our unitholders,” he said.

As at June 30, Axis REIT has 19 properties under its stable with assets under management worth about RM728mil and approved fund size of 255.9 million units.

By The Star (by Angie Ng)