Bank expects E&O to return to the black this year

EASTERN & Oriental Bhd (E&O), a high-end property developer, could return to the black in the current financial year and stay profitable for the next three years, CIMB Investment Bank Bhd said in a report yesterday.

For the year to March 31 2009, E&O suffered a net loss of RM37.28 million compared with a net profit of RM128.85 million a year ago.

"The bottom line should return to the black in 2010 and jump 66 per cent in 2011 and 57 per cent in 2012. We believe robust earnings growth is sustainable even until 2013," wrote analyst Terence Wong in the report.

He noted that E&O has the highest upside to its target price if it manages to execute its ambitious launch schedule without too many hiccups.
The research house, which initiated coverage on the company yesterday, describes E&O as its top pick in the property sector with a trading buy target of RM2.18 a share.

This is a steep discount to E&O's revised net asset value of RM3.11 a share, which, according to CIMB's Wong, is the third steepest after UM Land Bhd and Hunza Properties Bhd and more than double the sector average.

Also, E&O has unbilled sales of RM310 million which should reap pre-tax profit margins of 25 per cent and this will be booked over the next two to three years, the CIMB report stated.

The group also has more than RM4 billion worth of properties that are ripe for launch over the next two to four years that should help in its turnaround prospect.

The bulk of the value comes from Seri Tanjung Pinang, a comprehensive mixed development township located 5km northwest of George Town and adjacent to Gurney Drive.

The project also involves reclamation of 397ha of land. So far this year, E&O has launched 33 link houses priced from RM1.1 million upwards, which were snapped up within hours.

Two intermediate units fronting the sea were sold for RM1.6 million, while two corner units, also fronting the sea, were sold for RM2.8 million, a record in Penang.

Its next launch will be the remaining 33 units of marina serviced apartments valued at more than RM30 million, while the biggest launch of the year will be condominiums with RM1.8 billion gross development value (GDV) in total.

Other sizeable launches include the Jalan Conlay condos with a GDV of RM800 million and the commercial building next to St. Mary Residences, situated in the heart of the Golden Triangle, with a GDV of RM500 million.

By Business Times (by Francis Fernandez)

Tabung Haji sees good opportunities to own properties in Europe

JOHOR BARU: Lembaga Tabung Haji (LTH) is now looking at Europe as part of a strategic investment plan to further expand its property portfolio via subsidiary TH Properties Sdn Bhd.

The fund’s chief executive officer Datuk Ismee Ismail said it had explored London and found that the city offered good returns for property buyers.

“After London, we are going to other major European cities and we believe there are good opportunities for us to own properties in Europe,’’ he told reporters after giving out Hari Raya Aidilfitri contributions to single mothers here.

Ismee said LTH was already known among investors and bankers in Europe as an “Islamic economic powerhouse” due to its large fund size.

TH Properties has invested about RM2.3bil in properties in Malaysia as well as Makkah and Madinah in Saudi Arabia, according to Ismee.

He added that for the last two years, instead of focusing on properties in Kuala Lumpur, the fund had been going to Georgetown, Johor Baru and Kota Kinabalu as these places also offered good investment opportunities.

“You can’t go wrong when it comes to (buying) property but you must remember the three words – location, location, location,’’ he said.

Separately, Ismee said the number of LTH depositors had increased to 4.7 million while its fund had grown to RM23bil.

In 2006, there were 4.5 million depositors while its fund stood at RM16bil.

He attributed the increase to two main factors – the growing confidence among depositors and a good dividend pay-out compared with other syariah-compliant financial products.

LTH paid a 5% dividend to its depositors last year. It hopes to maintain the rate this year despite the current global economic crisis, according to Ismee.

By The Star (by Zazali Musa)

CapitaLand cautions about 30% gain in home prices

SINGAPORE: A 30% increase in Singapore home prices would raise concerns about the sustainability of the recovery in the island’s property market, according to CapitaLand Ltd chief executive officer Liew Mun Leong.

However, a gain of 5% to 15% in home prices was still reasonable given pent-up demand, a rally in stocks, interest rates and a recovery in Singapore’s economy, Liew said in an interview with Bloomberg on Sept 4 after presenting a project for 1,040 apartments in Singapore that starts selling next month.

Record home sales in July is still “normal behaviour,” he said.

Home sales jumped 52% in July to 2,767, a sign prices may rebound from four straight quarters of decline. Demand may not be sustained and the government is monitoring the market “closely” to ensure speculation doesn’t lead to a bubble, National Development Minister Mah Bow Tan had said July 29.

“The current market is being supported by some fundamentals like pent-up demand and affordability,” said Chua Yang Liang, head of Southeast Asia research at property consultant Jones Lang LaSalle Inc. “Beyond that, the current rate of growth could certainly cause asset inflation growth if it is not supported by a recovery in the local and global economy.”

An index of private home prices dropped 25% in the 12 months to June 30, according to Urban Redevelopment Authority data. Prices had gained 58% in the previous 17 quarters.

“If it jumps 30%, then I will be a little bit concerned about whether it is sensible,” Liew said, referring to home prices.

Speculation that collective sales or so-called en-bloc sales of existing apartment projects will recover may also be overly optimistic, Liew said.

The Laguna Park development in Singapore’s East Coast is being offered for S$1.2 billion (US$832 million), which would be the second-highest price ever for such a transaction, the Straits Times reported this week.

“It is relatively too soon to think about high prices now,” Liew said. “Given the cost of the land, given the construction cost and given the demand, it is too early for developers to confidently say the world economy has recovered and there will be buyers who can afford the price.”

CapitaLand, Southeast Asia’s biggest developer, paid a record S$1.3 billion for the Farrer Court site in 2007. It also paid about S$548 million for Gillman Heights in 2007. Gillman Heights will be used to build a 1,040-apartment development designed by Office for Metropolitan Architecture’s Ole Scheeren, one of the architects of the 54-storey CCTV building in Beijing, the developer said.

The developer reported its first quarterly loss in 5 ½ years in July amid writedowns on residential and investment properties.

By Bloomberg

The best of Belleview at fair

Well planned: An artist impression of the Bukit Dumbar Residences project.

The Belleview Group will showcase the RM65mil Bukit Dumar Residences, comprising 62 units of terraced and semi-detached units for the forthcoming Star Property Fair.

Belleview Group managing director Datuk Sonny Ho said the units have two covered car porches, an impressive dining area with a large expanse of glass to bring in natural lighting, a spacious master suite, and balconies for occupants to enjoy the panoramic view of the Penang Bridge.

The units also has spacious family areas, walk-in closets, and separate dry and wet kitchens, Ho said.

The other property that would also be showcased at the Star Property Fair include the Palmyra Residences in Balik Pulau, the RM400mil Melody Homes, All Seasons Park and All Seasons Place projects in Air Itam, and the 1st Avenue shopping mall, a joint venture project.

“The Palmyra Residences comprise 227 units of landed property, while the Melody Homes, All Seasons Park, and All Seasons Place projects in Air Itam comprise 1,300 units of high-rise property. We will also construct a 250,000sq ft commercial complexes for the Melody Homes, All Season Park, and All Seasons Place projects.

“The three residential schemes and the commercial complex in Air Itam will take about five years to complete,” Ho added.

Ho said the 1st Avenue shopping mall, with a built-up area of 900,000sq ft, was scheduled for completion in the third quarter of 2010.

The Star Property Fair 2009, organised by The Star in collaboration with Henry Butcher Malaysia and supported by The Expat Group, will feature the creme de la creme of property and will take place at the G Hotel on Sept 11, 12 and 13.

A ‘lifestyle’ section has also been introduced as an extension of the fair at the Gurney Plaza where visitors would find a varied selection of home improvement products and offerings with the aim of converting a property into a dream home.

By The Star

New township project to spur Hua Yang growth

Property developer Hua Yang Bhd plans to build a township in Kulaijaya Johor, with a gross development value of RM350 million, to expand.

It recently bought 56.3ha freehold land in Johor for RM35.15 million.

Located on both sides of the Skudai Pontian highway, the parcel of land is 1km away from Hua Yang's RM1.2 billion mixed development, Taman Pulai Indah.

The acquisition is Hua Yang's second land deal for the year. It sold a plot of land in Perak to Tesco for RM3.23 million earlier this year.

Developed in 2001, Taman Pulai Indah spans 193ha and is Hua Yang's flagship development in Johor.

"With the ongoing Iskandar Malaysia project, we foresee positive take-up in the surrounding areas such as the Skudai-Gelang Patah Corridor, which is shaping up to be the next development area.

"Having operated in Johor for the past eight years, we are positive that our newly acquired land is in a good location, considering that there is a ready catchment of buyers and an existing development just 1km away," Hua Yang chief operating officer Ho Wen Yan said.

The new project will likely be a mixed development comprising commercial units, double-storey terrace houses, cluster homes, semi-detached and bungalow units retailing from RM220,000 onwards.

"Keeping to our philosophy of affordable quality homes for the people, we will continue to ensure that the new project meets community needs. Hence, even as we embark on the mid-high-end segment in Johor, the pricing is likely to remain competitive," Ho said.

Hua Yang is confident that the project will do well despite the economic slowdown.

"We have seen from the performance of our other projects in Johor as well as Symphony Heights in Selayang, Selangor, that buyers are still looking for value-for-money offerings, and expect our latest development to fall within this niche."

Construction is slated to begin 15 months from completion of the sales agreement, with Hua Yang investing heavily in facilities and amenities worth up to RM20 million.

By Business Times

Tabung Haji eyes Europe properties

Muslim fund manager Tabung Haji is looking to invest in properties in Europe to expand its scope of investments.

Its chief executive officer Datuk Ismee Ismail said London was one of the locations the company was looking at.

"To date, we've invested RM2.3 billion on properties, both locally and overseas, which is 20 per cent of our total fund size.

"Right now our foreign properties are located in Mecca and Madinah but we're currently surveying investment opportunities in Europe," he told reporters in Johor Baru yesterday.

Another plan on the cards is a Tabung Haji scholarship for higher education in Islamic studies in a local or foreign institution.

Ismee said the proposal was still at a planning stage.

"We hope to launch the scholarship next year after we decide on the amount and the number of students to be sponsored."

He said the fund's deposit base has been increasing steadily over the past six years by as much as RM1.2 billion annually.

This year, Tabung Haji funds stand at RM23 billion, compared to RM16 billion in 2006.

"Not only has the amount deposited gone up over the years, the number of depositors has also risen.

"Last year, we had 4.5 million depositors. Now, the figure is 4.7 million people," Ismee said.

In 2008, depositors enjoyed a five per cent dividend rate, a return which Ismee said the company would try to repeat for 2009.

Earlier, Ismee and Johor religious adviser Datuk Nooh Gadut handed out aid to 580 underprivileged and elderly folk at the Tabung Haji office in Johor Baru.

A total of RM290,000 was allocated to the Johor branch for the aid, which was in the form of food hampers and cash contributions.

By Business Times (by Anis Ibrahim)

Rehda Penang seeks aid for first-time house buyers

A RM10,000 grant for first-time buyers of affordable homes is being proposed by Penang property players to the government for consideration in Budget 2010.

Real Estate and Housing Developers' Association, Penang Chapter (Rehda Penang) chairman Datuk Jerry Chan said the grant can be considered for properties which fall below a certain price range.

"The hard-core poor can also be helped in owning houses via the setting up of a revolving fund," he told Business Times.

He said the fund can be tapped by those who qualify to pay nominal rental on properties which can later be converted as payment for the said houses.
Chan said these proposals would be incorporated into a master-list of requests which the national-level Rehda will submit to the federal government.

The Penang chapter of the association is made up of some 70 over property players, some of whom are the country's top developers.

Chan said also on Rehda Penang's wish list for Budget 2010 is a request for the waiver of stamp duty.

"We are also asking the federal government to consider taking over the provision of low-cost housing," he added, saying that just like healthcare and education, the provision of housing for the poor should also be assumed by the government.

"The private sector," Chan noted, "should not be asked to build low-cost housing and this social responsibility should be taken over by the government."

Meanwhile, commenting on a recent annoucement by the Penang government of its decision to revise the plot ratio for high-rise developments on certain parts of the island, Chan said:

"This move will now allow for a different pricing structure which will fill the gap between very expensive landed property, very expensive super condominiums and low-medium cost accomodation."

The Penang government two weeks ago announced the plot ratio revision during a Rehda Penang event.

Chan said that previously, a ratio of less than 1.0 time was applied (to medium-cost housing of between 700 and 1,400 sq feet) will now be revised to 2.8 times for certain areas.

This will place Penang on par with Singapore where a 2.8-time plot ratio policy applies. In the Klang Valley the plot ratio for certain high-rises stands at between 4 and 6 times, while the Kuala Lumpur City Centre boasts a plot ratio in excess of 6 times.

Chan said the request to review the outdated policy was made by Rehda Penang earlier this year, and the association is now awaiting official notification from the state government.

On whether the revision of plot ratios would also apply to landed property, Chan said the state is willing to consider the removal of backlanes for terrace-houses (which sometimes make up 15 per cent of the total build-up area) on a case-by-case basis.

By Business Times (by Marina Emmanuel)

Bina Puri unit gets RM37m Sabah project

Bina Puri Construction Sdn Bhd, a wholly-owned subsidiary of Bina Puri Holdings Bhd, has been awarded a RM36.6 million substructure project in Kota Kinabalu, Sabah.

The award from Sunsea Development Sdn Bhd is for the construction and completion of earthworks, piling works, pile caps, basement slab and basement retaining wall for a proposed commercial development in Kota Kinabalu, Sabah.

The substructure works are part of the Kota Kinabalu City Waterfront (KKCW) development and construction is expected to be completed within nine months, the holding company said in a statement today.

KKCW which had its groundbreaking in February, is a mixed commercial development comprising four-levels of retail mall, residential designer suites and a five-star international hotel, all to be built on a 1.248 hectare of sea frontage land.
The project is a joint venture between DBKK Holdings Sdn Bhd and Sunsea Development Sdn Bhd, a subsidiary company of Waterfront Urban Development Sdn Bhd, the statement added.

With the above award, Bina Puri group’s current book order stands at RM2.32 billion, having managed to secure new projects of up to RM1.15 billion so far in 2009.

It will continue bidding for new projects, both locally and internationally and is confident of securing new projects before year-end.

Meanwhile, Bina Puri Construction's on-going projects in Sabah, include the construction and completion of “Dewan Kuliah Pusat Ke-2” and “Pusat Pasca Siswazah for Universiti Malaysia Sabah (UMS), Kota Kinabalu, Sabah and a housing development at Sayang Buang, Papar.

It had completed projects valued about RM1.5 billion in Sabah which includes, the 38-km of Kota Kinabalu Sulaman Coastal Road, Institute Latihan Perindustrian Sabah, Wisma PERKESO, Road from Jalan Sipitang to Tenom and Jesselton Condominium.

By Bernama

AMDB set to become a focused entity

The diversified group is close to finalising its divestment of non-core assets and will focus on property, engineering and infrastructure

Diversified AMDB Bhd expects to complete its transformation into a focused entity specialising in property, engineering and infrastructure operations before the end of the month.

Its chief executive officer Ben Lee Keen Pong said upon completion, the group will emerge as a financially stronger entity with a cleaner balance sheet, larger asset base and increased earnings visibility.

"We are close to finalise the divestment of non-core assets - namely the Seri Melayu Restaurant operations, Harper Travel and Tours as well as our stake in advertising agency J. Walter Thompson Sdn Bhd - to our parent, Amcorp Group Bhd, for RM22.1 million," he said.

In strengthening its position in the property sector, AMDB has bought four property development companies from Amcorp via a debt-to-equity swap.
Lee said the group paid RM159.72 million in cash and new shares for its interest in Amcorp Prima Realty Sdn Bhd, Regal Genius Sdn Bhd and Distrepark Sdn Bhd.

As for a 60 per cent stake in the HDC-Amcorp joint venture, AMDB paid RM20.99 million.

"The acquisitions will enable us to further expand our property segment and involve in the acquisition of ongoing projects namely the 75.2ha bungalow enclave Kayangan Heights in Shah Alam, Selangor, and the 285ha Sibu Jaya township in Sabah," he said, noting that the company currently has an order book valued over RM1 billion.

Last May, shareholders approved the company's three-pronged business reorganisation strategy involving a capital reconstruction, sale of certain non-core businesses and the purchase of land.

Lee said the move will help AMDB write off its accumulated losses of RM356.55 million and allow the group to expand its property development business, one of its main drivers aside from engineering and infrastructure work.

AMDB's revenue for the year to March 31 2009 fell 45 per cent to RM206.8 million from a year ago. This was due to the sale of a development land in Pulau Indah, Selangor, worth RM130 million and lower volume in the property, engineering and infrastructure divisions.

Despite that, AMDB managed to return to a RM18.5 million profit from a loss of RM14.2 million previously, thanks to the gains from the RM18.3 million sale of Sebana Group.

AMDB's gearing is also lower at 0.19 times from 0.49 times before due to the net proceeds of the Sebana sale and the fact that it doesn't have to account for Sebana's borrowings.

"With lower gearing, the group's finance costs during the financial year were lower at RM10.4 million compared with RM18.2 million before," he said.

By Business Times (by Azlan Abu Bakar)

RM500m FDI for halal parks next year

KUALA LUMPUR: The Halal Industry Development Corporation (HDC) has targeted to attract RM500 million in foreign direct investment (FDI) into the Halal Parks located across the country by next year, said its vice president of industry development, Nicholas Shariff Collins.

"The HDC is currently in talks with some foreign parties, particularly multinational corporations, who have shown a keen interest in investing in the Halal Parks.

"A few will in fact be setting up shop soon," he told a press conference here today.

According to Collins, two major companies, F&N and Concept Amenities from Australia, have confirmed commencing operations by the year end.

To date, five Halal Parks are already in operation in the country.

They are the Halal Park in the Port Klang Free Zone, the Selangor Halal Hub ( Pulau Indah), Pedas Halal Park, Serkam Halal Food Park and the Tanjung Manis Halal Hub.

The Sungai Petani Halal Food Park and Pengkalan Chepa Halal Park are expected to start operations by end of this year.

By Bernama

Green project on Hunza's drawing board

Property developer Hunza Properties Bhd will embark on a green concept residential development project in Tanjung Bungah, Penang.

Its executive chairman Datuk Khor Teng Tong said the project is a joint venture with another company and is currently in the planning stages.

"The designs and concept of the project will be finalised soon. Once finalised, the plans will be submitted to the relevant authorities for approval," he told reporters in Penang recently.

The development will look at energy-saving, minimisation of sun's rays and a reduction in construction waste.
Khor said the project will be targeted at local buyers.

"We are looking into between 1,300 sq ft and 1,800 sq ft in build-up area for each (residential) unit," he added.

Khor said the decision by the Penang state government to increase the density of housing projects on the island will help bring the cost of land down, stabilise property prices and give consumers more choices.

He said the increase in density was timely as property prices are expected to escalate in two years.

Another project the developer will embark on is the RM420 million Gurney Paragon shopping mall, with a gross built-up area of 1 million sq ft and 700,000 sq ft of lettable area.

Khor said the designs and plans for the seven-storey shopping mall have been finalised and submitted to the relevant authorities for approval.

"We hope to start work by year-end or early next year," he said.

On the outlook of Penang's property market, Khor said the state is currently short on supply of residential properties, although demand for housing is rising.

"The shortage of supply is mainly due to a (development) slowdown by developers. Not many new housing projects have been launched in the past one year."

By Business Times (by Melissa Darlyne Chow)

Mines Excellence eyes Bukit Beruntung resort

Mines Excellence founder Tan Sri Lee Kim Yew declines to reveal his offer price for the golf resort, but market sources put its worth at about RM30 million.

Property developer Mines Excellence Golf Resort Bhd said it is in talks with the the Selangor state government to acquire the Bukit Beruntung Golf & Country Resort.

"We are talking to the state government now. They have assigned a special officer to look into this matter. If the state decides to sell the golf resort, I will buy it," Mines Excellence founder Tan Sri Lee Kim Yew said in an interview.

He declined to reveal his offer price for the golf resort, but market sources put its worth at about RM30 million.

Lee had initially wanted to take over the management of the golf resort from businessman Tan Sri Chan Ah Chye of Talam Corp Bhd, but found that the latter had contra the property to the Selangor state government.
The proposed property will complement Mines' existing Mines Golf City development, located adjacent to it. The five-star 160ha Bukit Beruntung golf resort in Selangor consists of a 36-hole golf course, a clubhouse with a theatrette, 900 bungalow lots, a driving range and specialist shops.

A source said the value is only for the 160ha land, and a further RM10 million may be required to upgrade the clubhouse, driving range and infrastructure, and other amenities as the condition of the properties has deteriorated over the past few years.

Meanwhile, Mines Excellence, which is developing the Mines Golf City in Bukit Beruntung for RM3 billion, expects the project to start early next year.

It will feature a 63-hole golf course, hotels, a university, a clinic and spa, townhouses and bungalow lots.

Lee said however, a 99-hole golf resort (by integrating the 36-hole Bukit Beruntung golf course and the 63-hole Mines golf course) would attract more golfers to Malaysia and promote the tourism sector.

On Bukit Beruntung acquiring an unwanted stigma due to the number of abandoned houses, lack of amenities such as hospitals and schools and poor infrastructure, Lee said he has approached the local council on his willingness to adopt the 1km road leading up to the township.

Lee wants to also improve the landscape and clean up parts of Bukit Beruntung.

"Bukit Beruntung is rundown. My own estimate is that there are 30,000 tonnes of rubbish thrown by the road side and we don't mind cleaning that up," he said.

Lee said he will spend some RM3 million on these initiatives.

By Business Times (by Sharen Kaur)

Suncity to maintain profitability: RAM

SUNWAY City Bhd is expected to maintain its profitability, given the prime locations of most of its projects, said RAM Ratings.

Concurrently, the group's financials will remain anchored by stable, recurring investment-property income, the rating agency said in a research note today.

"We note recent healthy buying interest in certain projects, driven by low interest rates and the developers'' easy-financing schemes," it said.

Over the next six-12 months, RAM Ratings said this should boost sales with strong branding and strategically located projects, including Suncity.
The rating agency pointed out that Suncity's debt burden remained heavy with RM1.52 billion of borrowings as at the end of June 2009.

In the medium term, the group's debt load is projected to increase to around RM2 billion.

However, Suncity's debt-coverage metrics are anticipated to remain adequate.

RAM Ratings said a sustained and substantial reduction in the group's borrowings would be a key factor for any reassessment of Suncity's ratings.

By Bernama

Asian property bulls shrug off bubble talk

Fears of overheating in China, Hong Kong and Singapore markets have been fanned by media reports of huge crowds at property launches snapping up residential units

SINGAPORE: "Bubble" may be the word on everyone's lips when talking about spiralling housing prices in China, Hong Kong and Singapore, but contrarians believe these fears are overblown and prices have yet to peak.

They point to savings-heavy Asia, a preference for bricks and mortar, low interest rates and a faster-than-expected recovery in Asian economies, led by China.

"We're not near any bubble territory. Such rapid upward moves have simply illustrated the resilience of Asian households and companies," said Frankie Lee, who manages around US$800 million (US$1 = RM3.53) as head of property equities for Asia at Henderson Global Investors.

Fears of overheating in these markets have been fanned by media reports of huge crowds at property launches snapping up residential units the minute they are launched and the availability of easy credit in these centres.
"Act now to prevent a housing bubble", read one headline in Singapore's Straits Times newspaper yesterday, calling for banks to tighten lending terms.

Henderson's Lee said property prices would continue to rise in the next one or two quarters, but less sharply, as the nascent economic recovery takes hold and boosts employment in these cities.

Bubble contrarians say housing prices, especially in Singapore and Hong Kong, remain affordable to their cash-rich citizens, even after the recent sharp gains.

Tan Chin Keong, real estate analyst with UBS Wealth Management in Singapore, notes a typical Hong Kong homebuyer would have to set aside about 35 per cent of monthly income to service a mortgage at current prices, down from 70 per cent a decade ago.

In Singapore, household debt is around 15 per cent of total assets, while cash holdings alone exceed the total amount of borrowings, Tan said, citing central bank figures.

Mortgage rates in Hong Kong and Singapore have also been falling in recent months and are at or near all-time lows, due to loose monetary policies and fierce competition among banks.

Hong Kong's residential prices have risen by more than a fifth this year, helped by a lack of new supply and low mortgage rates.

In Singapore, residential sales hit new record highs in June and July, helped by low interest rates and increased confidence about the local economy.

Chinese homebuyers are also flush with cash, analysts say.

Lee Wee Liat, China property analyst at Nomura, says feedback from developers indicates that around 30 per cent of homebuyers paid for their property in cash, while those who borrowed typically took loans of 50 to 60 per cent of the property value.

Still, market bears continue to warn that China's housing prices may begin to ease and could reverse early next year as supply catches up and demand wanes.

The National Development and Reform Commission, China's top economic planning agency, noted in a report to the country's State Council, or Cabinet, that "housing prices in some cities are rising overly fast", a strong indication Beijing has grown uneasy about the increases and may step in to cool the market down.

Chinese residential property prices shot up in March and the month-on-month growth has been accelerating through July.

Property consultancy DTZ cautioned clients not to be caught up in the current euphoria over Asian residential property, saying market bulls were looking at just one to two months of data and calling it a trend.

"Prices may come off a bit until we see a more sustained economic recovery, both in the region and globally," said David Green-Morgan, Asia-Pacific research director at DTZ.

Market bulls noted that the rally in home prices has helped property stocks outperform their respective markets.

In Hong Kong, the HSI-Properties Index is up 49 per cent year-to-date, outperforming the 37 per cent advance on the main index. In Singapore, property stocks have gained 57 per cent, against a 50 per cent rise in the benchmark index.

The outlook on China property stocks is mixed due to uncertainty about the sort of measures authorities are likely to implement in a bid to cool the market as well as differing views about the quality of the firms' landbank.

By Reuters

Magna Prima unit to buy Ibsul for RM3.5m

PROPERTY developer Magna Prima Bhd said its wholly-owned unit will buy Ibsul Development Sdn Bhd for RM3.5 million.

It told Bursa Malaysia that its unit, Winicon (M) Sdn Bhd, has entered into a deal with Datuk Ahmad Shafee Sabaruddin and Mohd Sabki Razali to buy 250,002 shares.

Earlier this month, Ibsul Development bought a piece of land located in Bandar Shah Alam for RM18.5 million.

By Business Times

Tanjung Rhu Resort eyes niche market

LUXURY hotel Tanjung Rhu Resort Langkawi plans to build villas at the 8ha resort to capture a new and niche market segment.

A total of 20 villas with private swimming pool are scheduled to be built and completed by end-2011.

"We expect to open five or six of the four-bedroom pool villas in the fourth quarter of 2010 and the remaining in 2011," general manager IZ Melvin said.

"This concept is popular in resort islands like Bali, Phuket and Koh Samui ... but there are only two resorts in Langkawi offering luxury villa accommodation.
"We want to target a niche group especially those who want privacy," he said.

Tanjung Rhu is owned by Tanjung Rhu Land Sdn Bhd and operated by hospitality group Signforce Sdn Bhd.

The 136-rooms are set to undergo some changes, to keep the hotel fresh and more relevant for its market mix. Its last upgrade was in 2005.

The property, owned by Promet Bhd, was originally built as an apartment in 1991. In 1993, the current owners bought the property and converted into a hotel and brought in Radisson Hotels & Resorts Group to operate the property.

Then in June 1999, Signforce took over the management of the hotel. Melvin, who is also Signforce's chief operating officer said that since its entry the average room rate (ARR) at the resort has swelled.

"When Signforce came in the ARR was RM350. Since then, our rates have picked up at an average of 9 per cent to 12 per cent year-on-year," Melvin to Business Times during a recent visit to his resort.

The hotel last year filled 62 per cent of its rooms and enjoyed RM1,500 per occupied room for two which includes food and beverage. About 95 per cent of its guests eat at the hotel and contribute towards 34 per cent of food and beverage revenue.

Last year, Tanjung Rhu's gross operating profit (GOP) was 52 per cent. GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

This year, however, as a result of the global economic downturn and the H1N1 flu, the hotel is expected to see occupancy slip to 58 per cent and per occupied room spend to be RM1,450.

On a more positive note, business in July 2009, saw a sharp improvement with occupancy reaching 80 per cent.

The hotel predominantly caters to the leisure group from the UK, Japan, Australia, Holland and France.

Only 12 per cent of its business is the corporate crowd which is mostly during the Langkawi International Maritime and Aerospace Exhibition.

When asked on how Tanjung Rhu emerged as the top three on the island in terms of rates despite being a locally-owned hotel, carrying a local name and run by locals, Melvin said that it has to do with the hotel's guest experience.

"When it comes to leisure accommodation, people not necessarily look for a brandname but rather an experience. Our biggest selling point is, we sell experiences," he said.

And in support of this, he said, a quarter of its guests are repeat visitors.

By Business Times (by Vasantha Ganesan)

Property market on robust revival

PETALING JAYA: Asia’s property market is making a strong comeback with renewed buying interest for residential property powering sales on expectation that the economic downtrend is bottoming out.

However, the commercial property market, including office and retail space, is still quite soft as easing demand has resulted in rental and occupancy rates sliding.

Bouncing back from the dampened sentiment brought on by the global financial crisis, the regional property market has shown more resilience this time around compared with the 1997 Asian financial crisis which took a heavier toll on the market.

There is increasing evidence that the US recession is bottoming out and this will stabilise the region’s economy and spur its recovery during the second half of the year.


The recovery is expected to provide a favourable basis for both residential sales and leasing markets in Asia, including Kuala Lumpur, Singapore, Hong Kong and Jakarta.

Industry observers are expecting a more robust revival in the region’s property market towards the end of the year, in tandem with a further pick-up in the global economy.

Home prices are forecast to see further upside, driven by huge liquidity in the economy as well as further rebounds in residential rents.

UOB Kay Hian in a recent regional market update said residential sales made a strong comeback in the second quarter of this year on expectations of an economic recovery and relative stability of the job market, despite a steep fall in gross domestic product growth rates, low mortgage rates and a lack of alternative high-yield investments.

“Price levels rebounded by 5% to 10% quarter-on-quarter in the second quarter after a 30% to 50% fall from the end of 2007 peak levels. As the economic recovery gains ground in the coming quarters, we expect sales momentum to pick up and price levels to firm up further on the back of improving liquidity conditions and easy financing options,” the research house added.

UOB Kay Hian said structural transformation had lent a high degree of sustainability to the current recovery.

Across the region, interest rates are drastically low and currencies are fairly stable in comparison to the situation during the Asian financial crisis.

“Household affordability levels are relatively high this time around due to the higher income levels, record low mortgage rates and stronger net household wealth. Corporate balance sheets are also a lot stronger. Furthermore, favourable migratory patterns to Asia due to its attractive long-term growth potential help support a sustainable recovery in the residential sector,” the research house explained in its report.

Market stabilisers

In the office property sector, stabilising economic conditions since June provided support to the prime office market and rentals in Asia for the rest of the year are unlikely to fall as drastically as in the first quarter 2009.

Knight Frank said on the flip side, a continued downward adjustment in occupancy costs could raise the competitiveness of doing business in most Asian cities, and provide more business opportunities for international firms and investors.

Although Kuala Lumpur still lags behind some regional cities like Singapore and Hong Kong, residential property sales have improved.

ECM Libra senior analyst Bernard Ching said the local residential market was more resilient than other regional cities and prices had not been much impacted. This compared with a price drop of about 30% to 40% in Singapore and Hong Kong, he added.

The affordable interest rate environment and lower entry cost for buyers supported property buying and investment activities during the period.

With the average mortgage base lending rate (at 5.5%) minus 2% at an all-time low, Ching said property investment was making a comeback as the preferred hedging tool against inflation.

According to Reapfield Properties Sdn Bhd president David Ong, clearer economic direction in both the global and local arenas had pushed property to regain its position as one of the leading investment instruments among Malaysians.

“Coupled with the more liberalising environment, the property market is in for stronger growth and sales performance going forward,” he noted.

Recent policy liberalisation measures to attract foreign direct investments to Malaysia’s real estate market and relaxation of rules on property purchases by foreigners have also resulted in positive effects on the property sector.

In Singapore, improved market sentiment and pent-up demand stirred private residential launch and sales activities in the first half of this year with a total 5,992 units launched.

Knight Frank said 7,374 residential units were sold during the period, exceeding the total sold in the whole of 2008 by 68%.

“With the take-up significantly exceeding the units launched, it suggested some projects which were launched before this year received strong buying interest and this allowed developers to move outstanding stock,” it noted.

UOB Kay Hian said the two upcoming integrated resorts (IR) in Singapore, which were slated to be ready by the year-end, would boost the city state’s long-term economic fundamentals.

The IR projects are expected to create 50,000 to 60,000 jobs and would directly contribute S$5.4bil to the Singapore economy, or 2.6% of GDP, by 2015.

The liquidity and openness of Singapore’s property market have contributed to attracting high net worth individuals and talented people to its shores.

This is a boon for the property market as it makes a sharp rebound from the meltdown of the past year.

Indicators are pointing to increasing possibilities of a sustained sales activity and price recovery.

These include stabilisation in the economy, which may be able to prolong homebuying sentiments for the second half of 2009.

Various findings by recruitment firms also showed that firms are more likely to hire than before.

Together with the current low interest interest rate environment, these may boost the confidence of buyers for mass-market homes who are concerned with affordability and financing issues.

“As such, homebuying sentiments may persist in the second half, although the number of new homes sold is likely to slightly decrease as the pent-up demand weaken and prices are also increasingly resisting downward corrections,” the research house added.

Meanwhile, Knight Frank said China’s property market was back on its feet following the government’s supportive measures as well as price discounts offered by developers that helped release the pent-up demand for residential properties in key cities.

Amid a lack of new residential supply in core districts, buyers are shifting to the secondary market, which saw strong rebounds in both transaction volumes and sales prices in the first half of 2009.

A more active office market is also expected in most Chinese cities in the coming 12 months with developers launching projects and acquiring land for future office developments amid a recovering market.

Its views are echoed by US research company Real Capital Analytics Inc that reported China’s commercial property transactions totalled US$31.2bil in the first six months this year following a surge in land sales after the government eased credit terms.

Capital inflow from mainland China into Hong Kong has contributed to a rebound in luxury home prices in the Special Administrative Region (SAR).

Compared with the market trough last December, Hong Kong’s housing prices have rebounded 27.2%.

According to CLSA Asia Pacific, capital continued to flow into Hong Kong, bringing the aggregate balance in the banking system to HK$211bil, as at Aug 21.

A number of local property veterans jumped on the bandwagon, engaging in batch acquisitions in The HarbourSide in Kowloon Station.

One acquired 12 units for about HK$100mil and another bought six units for HK$90mil.

In Indonesia, the disbursement of 2.5 trillion rupees in housing subsidies allocated in the 2009 budget and the finalisation of the government’s ruling on foreign ownership are expected to boost overall demand for property.

Thailand’s property prices have also recovered to its previous level due to the high liquidity in the system, low interest rates and property tax incentives.

Although high-end condominiums that cater to foreign buyers succumbed to about 30% price correction, they have since found support from wealthy domestic bargain hunters.

By The Star (by Angie Ng)

RM141m Sunway Giza coming up in Kota Damansara

Sunway Damansara Sdn Bhd, a joint venture between Sunway City Bhd and Perbadanan Kemajuan Negeri Selangor (PKNS), will open a new lifestyle retail centre in Kota Damansara, Selangor, in December.

Dubbed "Sunway Giza", the RM141 million centre will consist of 48 units of shop offices, a three-storey lifestyle shopping mall and an 800-bay basement car park.

It will also feature a pedestrian-friendly covered boulevard, which links the shop offices and shopping mall.

In a statement issued last week, Sunway Group chief executive officer of shopping malls, H.C. Chan, said Sunway Giza has already seen a take-up rate of 85 per cent.
He said Sunway Giza will be managed by the same team responsible for the management of the Sunway Pyramid shopping mall in Petaling Jaya, Selangor, the Sunway Carnival in Seberang Jaya, Penang, and the soon-to-be-launched Sunway Velocity in Kuala Lumpur.

On Thursday, a signing ceremony was held between Sunway Damansara managing director Ngian Siew Siong and Village Gourmet Sdn Bhd managing director Ong Kim Too for the latter to operate a supermarket in Sunway Giza.

By Business Times

S. Korean interest in Selangor Science Park

A South Korean property firm may invest RM1.5 billion to build hotels and a theme park in Selangor Science Park 2 (SSP2), an integrated development in Cyberjaya.

A source said the developer had expressed interest to buy land from the Selangor State Development Corp (PKNS).

"The investors met PKNS officials two weeks ago for a discussion. They have seen the layout and concept of SSP2 and like it," the source told Business Times.

The source said the developer also wants to build resort-style homes and plans to market the properties in Asia-Pacific, Europe and the US.

If the deal materialises, it will be the fourth for PKNS this year.

On August 21, PKNS signed agreements with property developer Metro Kajang Holdings Bhd, investment group Andaman Group and Q-Cells, a Germany-based solar cell manufacturer, to develop land at SSP2.

They plan to collectively invest RM6 billion in SSP2.

PKNS general manager Othman Omar had said that more investments were expected to come from Singapore, South Korea and Indonesia, and that there were enquiries about SSP2 from the rest of Asia-Pacific.

The 400ha project was launched in 2007, with more than RM600 million spent on infrastructure.

The development plan shows that there will be 108 semi-detached factories and industrial lots as well as 261 shop lots, shop-offices and commercial lots.

It will also feature 9,289 units of workers' quarters, low- and medium-cost apartments, serviced apartments, condominiums, double-storey link houses, semi-detached homes and bungalows, covering 12 per cent of the total development area.

The remaining 38 per cent is for recreation and sports facilities, parks and green area.

SSP2 is projected to create 20,000 jobs and spur Selangor's economy.

By Business Times (by Sharen Kaur)

Resort spending US$9m to upgrade, promote property

The five-star Nikko Bali Resort & Spa said it will maintain its 2009 budget of US$9 million (RM31.77 million) to upgrade and promote the property, despite poor global market sentiments.

General manager Jean-Charles Le Coz said Nikko Bali has so far spent US$7.5 million (RM26.48 million) to refurbish all the 386 rooms and two food outlets.
The refurbishment was completed in June and it was the first exercise by the 13-year old resort.

Le Coz told Business Times that it will be spending another US$1.5 million (RM5.30 million) to promote Nikko Bali in Asia Pacific and Europe.

“Whether there is a downturn or not, the property (Nikko Bali) has to look good and be marketed well. We did this last year and it has yielded positive results. We are expecting to achieve a revenue of US$17 million (RM60.01 million) this year,” he said.

Le Coz said he believes Nikko Bali can achieve a higher revenue next year as it aggressively promotes the meeting, incentive convention and exhibition (MICE) business.

“We are a five-star property in a holiday destination and therefore have to offer the best services. If we need to spend money for the betterment of the property, we will do it. We will not compromise on service either,” he added.

Le Coz is no newcomer to Bali, having held consultant and managerial positions in various resorts and opening innovative properties such as Novotel Benoa Bali and Haris Resort Kuta.

He earned his degree in Hospitality Management at the Ecole Hôtelière de Lausanne in Switzerland.

His background spans 14 years in the international hospitality arena including Geneva, Paris, Phuket, Jakarta and Lausanne.

By Business Times

Little gems in the outskirts

Small-scale developers weather the crisis well.

Very often, when one considers a property for investment, one tends to consider those in the city. And when one thinks of developers, there is a tendency to consider the big, established players for fear of projects being abandoned.

But what about the smaller players, some family-based business, in a little town far away from city life serving their community? Where are these companies heading? And how has the turmoil of the past year affected them? Or did it?

Before going further, a big company does not become big overnight. One does not become rich out of the blue. It takes years of savings and investing, wise decisions and many other factors.

From Skudai, Johor to holiday destinations like Langkawi in the north, from Peninsular Malaysia’s largest state to former tin state Perak, these small-scale developers share their views about the community they are building in, and for, and the effects of the global downturn. For three out of four of them, property development is their core business. Because they have years of experience in that community, they know the infrastructure and the market. On the whole, they have weathered the crisis well.

Some, like YNH Bhd, have decided to venture out into the Klang Valley. Others, like Hua Yang Bhd which started out in the Valley, is venturing out to the little areas. Yet others are contended to stay put.

Professionals working in the town centre can also consider Bandar Putra with its exclusive living and pretty surroundings.

To the city

In 2003, a little-known developer from Manjung, Perak, YNH came to Kuala Lumpur. Manjung is about 80km from Ipoh, and is located between the city and Lumut, the getaway point to Pangkor, and Sitiawan.

When it came to Kuala Lumpur, its choice of land was telling – Mont’Kiara and the Jalan Sultan Ismail vicinity. The family business was seeking its fortune in the city but it was not leaving behind its roots in Perak; it was, in fact, adding another pillar to its foundation.

Come the fourth quarter, YNH will be handing the keys to buyers in both projects, Fraser Place, next to Wisma Hong Leong, in the city and Cerian Kiara in Mont’Kiara.

(Because Fraser Place is a project with a commercial title, it is not governed by the Housing Developers Association’s mandatory three-year completion deadline.)

Formerly known as Yu Neh Huat Bhd, the company was incorporated in 1985 as a family business. The late Datuk Yu Neh Huat was a farmer and livestock keeper. The company began constructing its first project – 10 units of double-storey shop offices – in the late 1980s.

Its financial controller Chan Yan Meng says the company’s turning point came in 1995, with the Manjung Point township, a project of about 1,000 acres. It still has about 700 acres that are yet to be developed.

“Although we may have ventured out to Kuala Lumpur, Manjung Point will continue to be our reference point. Today, YNH is a trusted and one of the largest developers with a strong base here,” says Chan, who has been with the company since 1990. Its staff strength has grown from 30 in 1990 to 250 today.

Most of its customers are civil servants – mainly those at the naval base located there and teachers – and small holders.

With 45% of its revenue coming from there and the rest from its projects in Kuala Lumpur, the company has diversified its market with a foot in the city.

There are dozens of small-scale developers in and around the peninsula, Sabah and Sarawak. Many of them have humble beginnings and are contended to be where they are. In some ways, the economic downturn has not really affected them as much as the big boys.

Says an analyst who declined to be named: “Housing development is still very much location based. If a developer is from a small town, it has to consider the local economy and demographics in that area.

“In such a situation, there may be a tendency to expect sales to be poor because of the global economic woes but this need not be the case. Away from the city, these smaller developers have a captive market and they will still do relatively well. In terms of sales and earnings, it will be stable.

“YNH, for example, sells to civil servants, and makes an average RM40mil to RM50mil sales annually in what many would consider as remote areas. Likewise, Pasdec Holdings Bhd in Pahang.

“In Sabah, property sales are doing well in plantation areas because of the significant price of palm oil. So it really depends on locality. While some – Hunza Properties Bhd from Penang and YNH who have made their way into the city the last several years – there are many others who are contented doing what they are doing in these smaller towns.

“A big deterrent is the price of land in the Klang Valley, which is not representative of the whole country.”

Klang Valley-based Hua Yang is scouring for projects outside the Valley where land prices are cheaper.

The rural pull

Like YNH, Hua Yang is also a family-based business. Its Seri Kembangan mixed development is by far the largest project in its stable. Its chief operating officer Ho Wen Yan says it would like to focus on other markets in Perak, Johor and Seremban.

Says Ho: “Outside the Klang Valley, our focus is mass housing in integrated townships; in Seri Kembangan, it is high-rise residential units.”

He says the affordable mass market segment is the company’s core focus and contributes the bulk of Hua Yang’s revenue. In terms of customer demographics, most of them are first-time buyers comprising young couples who buy for occupation.

“In the city, the story is different. There is the investor group who buys to sell, or to rent. So the present lull is an opportunity to grow our presence.

“The bigger boys have gone into niche housing, resulting in a lack of affordable mass market housing in the RM90,000 to RM380,000 range. Our opportunity is to tap into this market,” Ho says.

The company plans to launch several developments in the next six to nine months in Seremban, Senawang and Johor Baru amounting to about nearly RM120mil. Its Sg Besi project, comprising residential, commercial and retail, has a GDV of RM550mil.

It is also pretty upbeat about its financials for 2010 with revenue of RM100mil in 2009, RM60mil in 2008 and RM63.5mil in 2007.

In Pahang, the largest state in Peninsular Malaysia, land is in abundance. This is Pasdec Holdings home turf. CEO Mohd Khairuddin Abdul Manan says the company is best known for medium-cost houses comprising mainly single-storey terrace and semi-detached homes, which contribute 60% to the group’s turnover.

Besides housing development and management, the group is also involved in construction, the manufacture of bricks and trading in building materials.

The group recorded improved sales of its residential properties from RM32mil in 2007 to RM64.8mil in 2008. The projected sales for 2009 is RM81.8mil. The group has 2,500 acres of land, 90% of which are in Pahang. Pasdec expects revenue and profit to be affected due to market condition.

Says Khairuddin: “Results for the first half of the year indicated a drop in our targeted turnover by 37%, we anticipate unfavourable results for the second half of the year. But we will look for ‘wow’ factors’, like public infrastructure and other amenities.

“We expect caution and perseverance for the residential market owing to the economic turmoil until the year-end.”

The total GDV of the company’s five flagships projects, which are located in Kuantan, Pahang is RM1.98bil.

Further north, Thong Sin Development Sdn Bhd has made Langkawi and Cameron Highlands its playing field. The company is best known for building apartments and serviced apartments, which contribute 70% to the company’s revenue. It has some double-storey and semi-detached units scattered about but overall, its forte is apartments.

Born and bred in Penang, and having been in the business for the past 30 years, its managing director K. C. Tan is familiar with the infrastructure and the market he is operating in.

The glass bubble lift overlooking the pool in Century Suria condominium.

“The global downturn did affect us, but not too much. Century Suria condominium in Langkawi saw a drastic drop in response from foreign purchasers as a result of the global woes. Since second quarter 2009, sales have picked up for all the projects and continue to look encouraging from local buyers. We have 17 acres in Kuah, Langkawi and 2.5 acres in Cameron Highlands and we expect things to be stable and encouraging in the coming months,” he says.

By The Star (by Thean Lee Cheng)

Developers foray into boutique development

Valencia residents enjoy a private 9-hole golf course and country club.

The concept of boutique developments is fast becoming an attraction in the property market nowadays.

Gamuda Land Sdn Bhd managing director Chow Chee Wah says usually, the design of a boutique development is for the middle to high-end housing, catering to a special targeted niche market that has a discerning taste and appreciation for resort lifestyle living.

“Gamuda Land has a few boutique developments, namely Valencia in Sungai Buloh, Jade Hills in Kajang and Madge Mansions in Kuala Lumpur. Both of these landed developments – Valencia and Jade Hills – are within the 300-acre range, while Madge Mansions, our high-end condominium is on 2.16 acres,” he says in an email.

Chow defines Gamuda Land’s concept of a boutique development as one with a low density ratio and a host of other Oooomph! factors.

“It has to be very exclusive, very private with top security features in placed. Added to that is the ambience and this includes a host of criteria – quality products, safety and security, tranquil environment, well-equipped facilities, status and class, and a good return on investment, he says.

He says Gamuda Land first ventured into boutique developments in the year 2000 with Valencia.

“This luxurious project became the first boutique development in Malaysia with a private 9-hole residents’ golf course and country club. Valencia soon became a much sought after address because it offers the perfect combination of living in a landed property with condominium living facilities.

“It is a private, exclusive development within an environment equipped with the best resort facilities for a healthy and secure living lifestyle,” he says.

Facilities and ambience aside, Chow says a boutique development is also about location. It has to be a prime address that an owner will be proud of.

“It is about being a class above others,” he says.

“Gamuda Land decided to undertake this type of projects because we saw a growing demand and need for it. In urban areas, especially in the Klang Valley, the growing population of the affluent and elite group are looking for residences that meet their needs and desires for fine resort living.

“Valencia and Jade Hills testify to our success in this boutique home category. More than 60% of Valencia purchasers are repeat buyers. Thirty percent of Valencia’s residents today are expatriates, a large majority of them are Europeans. This means our boutique developments have become prime investments,” he says.

Because developers saw the popularity of boutique properties, they are now beginning to offer boutique commercial developments.

IRDK Land Sdn Bhd director Datuk Kevin Woo says such developments are not a trend but a need as the market evolves.

“The difference between boutique commercial developments and other commercial developments is the concept and setting of the development. It gels the business with lifestyle elements by providing and facilities,” he says.

The company is developing a boutique commercial development called Alam Avenue in Shah Alam, comprising 51 commercial units on three-storey intermediate shop offices and five-storey corner and end units.

“The ground floor will have a floor to ceiling height of 4.5 metres (15 feet). It will be generously fitted with high quality zinc aluminium roller shutters of 10 feet high to give maximum advertising and showroom presence.

These shops will have generous 17-feet verandas and walkways frontage to accommodate alfresco dining and cafes. They will be tiled luxuriously with homogenous floor tiles. Decorative light fittings will be installed at the walkways to enhance the ambience and to exude on easy flamboyant lifestyle where business and leisure meet in a quaint setting,” he says.

The gross development value of the project is about RM100mil. It is scheduled to be completed by December next year.

A green development is another concept introduce by developers. Sentral City (M) Sdn Bhd has gone one step further by incorporating a touch of Zen in its green concept development in Puchong Zen Residence@Asplenium condominium.

General manager Pang Swe Haw says the word Zen has been widely used in different industries like food and beverages but nobody has attempted to define the true meaning and essence of Zen.

“Zen is a living philosophy which centres around the simplicity and beauty of nature around us.

“In Zen Residence, we aim to create landscape and architecture settings that encourage the residence to take a longer and closer look at the environment around them and hope they will be able to develop a greater insight and appreciation of nature.

“So, we may not be the one who first use the word Zen, but we are the first to really explore and implement the Zen living concept,” says Pang.

With GDV of about RM96mil, Pang says Zen Residence has achieved close to 90% sales to date. The company will continue to explore this concept in their next project that is currently on the drawing board.

By The Star (by Edy Sarif)

Talk to your buyers

Customers quite spontaneous to share their views if sought

The property market is set to move into higher gear after the dreary days of project delays and deferment of the past one year.

Despite the seemingly brighter days ahead, developers are treading carefully and have not completely lowered their guard on the market’s passiveness to avoid an over built situation that will send property prices southwards.

While mulling over whether it is still too early to launch their projects, especially if they are green field developments that will take many years, developers should not completely withdraw from the market. Instead, they should stay in touch with their potential and existing buyers.

Engaging their customers will enable developers to stay on top of things and know what their buyers want and plan their projects accordingly.

Buyers’ needs are always evolving and developers who take the trouble to stay in touch with them will benefit tremendously.

After all, customers know best what they want and they will be quite spontaneous to share their views if sought.

They would appreciate developers who keep them posted on new initiatives and seek their views, especially for product development and improvement.

These days, it is not unusual to receive newsletters and project brochures from developers. There are also announcements on new upcoming project launches to promote repeat buying.

With the Internet, developers should go a step further and interact directly with buyers. By opening up the communication channel through a well managed and user friendly website, a participative virtual community will emerge among residents and buyers of their projects.

An active two-way communication flow and interaction will promote a more well informed and knowledgeable society.

In the process, developers will be able to get invaluable information first hand from their customers on how to design, or redesign, their projects.

Developers who value their customers’ views and input will be able to have the right products in place, whether it is during the good or bad times.

The tag line for developers these days should be to deliver real value for customers. A clear focus on customers will certainly go a long way to earn their lifetime loyalty.

It is still very much a buyer’s market and property buyers now have many choices to choose from.

Instead of building rows and rows of standard housing units or shop lots, it will be good if developers allow buyers to have some degree of flexibility in the interior layout plans of the property they are buying.

For a start, this can include the number of rooms and their sizes, choice of colours, and materials used, to meet the different needs and budgets.

Although such flexibilities are only practised in very high-end housing estates now, especially for houses with price tags of at least a few million ringgit onwards, the developer that is willing to extend this “magnanimous” gesture to the medium-range projects will, without a doubt, become an instant favourite.

Many Malaysians are still practising the extended family tradition with their aging parents and grown-up children staying together in the same house, and catering to their differing needs will be a good act of corporate social responsibility on the developer’s part.

Going by the earning capacity of the majority of average Malaysians, buying a decent house priced at slightly over RM300,000 is still a big commitment.

To borrow for a property priced that cost RM300,000, a couple will need to have at least a combined monthly income of RM10,000.

So the onus is on developers to offer greater value to house buyers and any gestures that show that they truly take great care to plan their projects to meet their buyers’ needs will earn them a more loyal following.

Village or “kampung” environment has always been the preferred for many Malaysians until quite recently when rapid urbanisation and massive infrastructure projects changed the people’s living landscape and way of life.

To many, it is still their preferred living environment as they like the stability of staying “grounded” in landed housing units and enjoy the closeness and camaraderie of their fellow villagers.

To promote closer kinship among the people, one of the ways is to replicate the village–like features and environment in our new townships.

■ Deputy news editor Angie Ng believes that a return to more community-centric developments will be good to promote and revive a stronger bonding among the people, in line with the 1Malaysia aspiration.

By The Star (by Angie Ng)

MK Land returns to the black

MK Land Holdings Bhd returned to the black with a net profit of RM18.3 million in its full year to June 30 2009, and it expects to do even better this year, driven by higher property sales.

The developer, which suffered a loss of RM60 million in 2008, said its turnaround was due to strong property and land sales.

"The strategies which we put in place during the recession has paid off and we are optimistic of seeing continuous growth in the current financial year," said its executive chairman Tan Sri Mustapha Kamal Abu Bakar.

He said the company is seeing robust growth in sales despite the economic slowdown due to its properties' strategic location and also a more stable property market.
"Another contributing factor is the success of our turnaround plan or renaissance which took place early July 2008," Mustapha Kamal told reporters at a media briefing in Petaling Jaya, Selangor, yesterday.

MK Land's revenue for 2009 stood at RM246.5 million as against RM137 million previously.

In the 12-month period, the group recorded sales worth RM136 million compared with only RM93 million previously.

Mustapha Kamal is confident the property market will continue its recovery over the next 12 to 18 months.

"With a total landbank of 2,833.6ha, we have enough landbank to last us for the next five years," he said, noting that in the first three months alone until August, the group already achieved sales worth RM271 million.

The group has a total gross development value of RM19.8 billion.

By Business Times (by Azlan Abu Bakar)

Sunway Damansara to open new retail centre

COME December, Sunway Damansara Sdn Bhd, a property development company, will open a RM141 million lifestyle retail centre in Kota Damansara.

Sunway Group of Shopping Malls' Chief Executive Officer H.C. Chan said Sunway Giza, the first lifestyle retail centre of its kind, would serve as a convenient shopping and dining area for the residents in the vicinity.

Saying that retail space was already 85 per cent taken up, he added that Sunway Giza would be managed by the same management team of Sunway Pyramid shopping mall.

Sunway Giza will consist of 48 units of shop offices, a three-storey lifestyle shopping mall and basement parking with 800 bays.
"We are assured of the retail centre's success as the area has a population catchment of 700,000 people from Subang Jaya, Bangsar, Kelana Jaya and Mont Kiara, all within a nine kilometres radius", he said in a statement today.

Sunway Damansara is a joint-venture between Sunway City Bhd and Perbadanan Kemajuan Negeri Selangor.

By Bernama

PJ Dev registers lower Q4 pre-tax profit

PJ Development Holdings Bhd has recorded a lower pre-tax profit of RM18.264 million for its fourth quarter ended June 30, 2009, compared to RM22.887 million in the same period last year.

Its revenue rose to RM168.208 million from RM164.845 million previously.

Basic earnings per share stood at 2.45 sen from 3.78 sen previously.

For the financial year, the group's pre-tax profit dropped to RM37.450 million from RM122.566 million in the previous year.
Its revenue declined to RM628.731 million from RM680.029 million previously.

By Bernama

China plans to let funds, brokers launch REITs

SHANGHAI: China plans to allow fund houses and brokerages to launch real estate investment trusts, or REITs, that would be publicly traded on the Shanghai and Shenzhen stock exchanges, two people with direct knowledge of the proposal said.

REITs should be launched in the form of closed-end funds via special asset management firms, in which property developers can also own a stake, according to draft rules issued by The China Securities Regulatory Commission (CSRC) for consultation, the people said.

The draft rules are subject to changes and it is not clear when they will be officially published.

China's bourses are competing with the country's interbank market in launching China's first REITs as soon as this year, as Beijing accelerates financial reforms to support a slowing economy and the property market.
"REITs are liquid investment instruments that would enable individuals to invest in properties even with only a few thousand yuan," said Alex Wang, real estate lawyer at Paul, Hastings, Janofsky & Walker LLP.

He added that REITs would mean a new source of funding for developers and may create a new exit channel for foreign property investors in China such as Morgan Stanley.

A REITs market in China would also generate new revenue streams for fund companies and brokerages, such as Haitong Securities Co and Harvest Fund Management Co.

But analysts noted that a shortage of qualified properties, uncertainty over tax treatment and fears of irrational price swings all threaten to delay the launch of REITs in China.

REITs, which invest mainly in commercial and industrial properties and pay most of their rent as dividends, have been long-established in the US and Australia but only caught on across Asia over the last five years.

China's stock exchanges appear to be lagging the interbank market in the race to pioneer the REITs market.

The People's Bank of China plans to submit a proposal to the State Council, or Cabinet in September, seeking approval for the launch ofREITs in the interbank market by the end of this year, the Caijing magazine reported on Monday.

Developers including Shanghai Zhangjiang Hi-Tech Park, Shanghai Jinqiao Export Processing Zone Development Co Ltd, Shanghai Lujiazui (Group) Ltd and Shanghai Waigaoqiao (Group) Co Ltd are likely to raise money via REITs in a pilot programme, Caijing reported.

Creating a domestic REITs market was part of a financial reform package unveiled by the government last December to aid the rapidly slowing economy and help developers, which at that time suffered from stagnant sales, tight credit and a frozen IPO market.

The real estate market has rebounded sharply this year after China unveiled a massive stimulus plan and boosted lending, making developers less willing to sell high-yielding properties.

"One major problem is that there's a shortage of qualified properties to be bundled into REITs," said one person familiar with the situation.

He added that for REITs to be attractive enough to investors, the underlying assets must generate an annual rental yield of 7 to 8 per cent.

It is a challenge especially at a time when the global economic downturn saps demand for lodging and office space in China, with prime office rentals in major cities falling in the first six months, real estate consultancy CB Richard Ellis said.

By Reuters

Penang raises density for property development

GEORGE TOWN: The state government has raised the density for property development in Penang, which will bring down land cost and stabilise property prices, said Hunza Properties Bhd executive chairman Datuk Khor Teng Tong.

Datuk Khor Teng Tong says it will help arrest the escalation of property prices.

“The state government recently decided to increase the density to 280,000 sq ft in built-up area from 90,000 sq ft per 100,000 sq ft of land.The decision to increase density will allow developers to build more, hence giving consumers more choices.

“It will also help arrest the escalation of property prices over the next few years,” he said at a company briefing for the media, analysts and bankers.

On the group’s projects on the island, Khor said Hunza would finalise the design plans for a “green” apartment building project on a 4ha site soon.

The apartments would have built-up areas ranging between 1,300 and 1,800 sq ft

The project was expected to contribute strongly to the bottom line of the group for the financial years ending 2011 and 2012, Khor said.

On the Gurney Paragon project, Khor said the designs and plans for the shopping mall had been finalised and submitted to the relevant authorities for approval.

“We hope to start work by early 2010,” he said.

The seven-storey shopping mall will have a gross built-up area of 1 million sq ft, of which 650,000 to 700,000 sq ft would be lettable.

On the property market in Penang, Khor said property was currently in short supply.

“The shortage of supply is mainly due to a slowdown by developers. Not many new housing projects have started in the past one year.

“Furthermore, work on projects in the state has to stop at 6pm, which will delay the delivery of units, resulting in lower supply and the increase of property prices,” he said, adding that the local authorities needed to speed up approvals for new housing projects to meet market demand.

For the fiscal year ended June 30 (FY09), the group posted RM27.6mil net profit on revenue of RM91.8mil compared with RM48.4mil and RM245mil respectively in FY08.

By The Star

UM Land ties up with Tradewinds Johor

PETALING JAYA: United Malayan Land Bhd (UM Land) has proposed a joint venture with Tradewinds Johor Sdn Bhd to govern Extreme Consolidated Sdn Bhd (ECSB), and to participate in a property development project in Kulai, Johor.

Tradewinds Johor is an indirect wholly-owned subsidiary of Tradewinds Corp Bhd.

In a filing with Bursa Malaysia yesterday, UM Land proposed to purchase the remaining 49% of the total issued and paid-up share capital of ECSB in a call option agreement with Tradewinds Johor.

And UM Land – through wholly-owned subsidiary ECSB – has proposed to acquire a piece of freehold 629.25-acre land in Kulai from Ambang Budi Sdn Bhd and Hartaplus Realty Sdn Bhd for RM233mil cash upon the terms and conditions in the sale and purchase agreement dated Feb 12.

UM Land will hold an EGM in respect of the proposed joint venture and acquisition on Sept 10 in Kuala Lumpur.

By The Star

Malaysia's Renexus proposes to build houses in Pakistan

Local construction firm, Renexus, has submitted a formal proposal to the Pakistan government for the construction of 20,000 low-cost houses in each of its eight major towns.

Pakistan High Commissioner to Malaysia Lt-Gen (Rtd) Tahir Mahmud Qazi said the state land in major towns - Lahore, Rawalpindi, Multan, Bahawalpur, Faisalabad, Sargodha, Gujaranwala and Sialkot - would be used to build quality houses through private sector participation and financial institutions.

Describing Renexus' proposal as the beginning of a mutually beneficial cooperation between the two countries in the housing sector, Tahir is inviting other Malaysian companies to take full advantage of the Pakistan government's vision to provide decent housing to its low-and middle-income families.

"The supply and demand gap in the housing sector will be met by public and private partnerships and the government will serve as enabler, regulator and facilitator," he said in a statement recently.
For major investments, Tahir said it would be tapped from the private sector, both local and foreign and financial institutions.

Commercial Counsellor at the Pakistan High Commission, Waijullah Kundi, said the proposal titled "Green Township for the Future" envisages each satellite township complete with commercial, educational, institutional recreation, spiritual, healthcare, and infrastructure services.

Waijullah said the development would incorporate Renexus' latest state-of-the-art smart building system and other industrialised building methods to ensure good quality workmanship and speedier construction time.

The Punjab province, with a population of 82 million, is facing a shortage of five million houses.

It has an incremental demand for 700,000 units a year against the annual construction of 150,000 units, leaving a huge gap and as a result creating immense opportunities for construction firms.

By Business Times (by Rupinder Singh)

World housing market showing signs of recovery

KUALA LUMPUR: The world's housing markets are showing signs of recovery, with seven countries having emerged from the house price slump, according to Global Property Guide.

After experiencing declines in 2008, house prices in China, Portugal, Australia, New Zealand, France, Sweden and Hong Kong rebounded during the latest reported quarter, 2Q 2009.

In its survey of world-wide house price indices, issued on Aug 26, it said however, most countries suffered sharp house price falls during the year to end-Q2 2009, hence the general situation remains negative.

The Global Property Guide uses price-changes after inflation, giving a more realistic picture than the (more upbeat) nominal figures usually preferred by real estate agents.

In Shanghai, China, house prices rose 1.96% during the year to end-2Q09, with most of these gains entirely during 2Q when Shanghai's house prices rose 2.09%.

China's house prices started falling in 2Q08, but a strong increase in government spending revived the housing market and the economy. This saw the country recording a 7.1% growth in GDP in 1H09. Chinese property prices are widely expected to increase further.

Average house prices in the Algarve, Portugal, at €1,429 per square metre, were up by 2% in 2Q09. House prices in Portugal as a whole rose 1.01% in 2Q and were down only 0.43% on the year to end-2Q09, compared to minus 7.24% during the year to end-2Q08. New CONSTRUCTION [] orders in Portugal increased 12.3% in 2Q09.

Global Property Guide said in Australia and New Zealand saw house price increases of 3.73% and 3.31% respectively in 2Q09. All regional capital cities in Australia registered quarterly house price increases, ranging from 2% to 5%. However, over the year to Q2 2009, there was a price decline of 2.80% in Australia.

In New Zealand, the annual change was still negative at minus 3.07% in the year to end-2Q09. But in July 2009, New Zealand had the first yearly house price increase since 2008.

After falling for the last five quarters, house prices in France were up by 3.31% during Q2 2009, thanks to government subsidies. In Sweden, house prices were up by 3.16% during Q2 2009. Hong Kong's house prices increased by an average of 8.9% during Q2 2009.

As for the US housing market, it was stronger, as reflected in the Case-Shiller house price index, which rose 0.35% in 2Q09, from a decline 6.46% in 1Q09.

Year-to-date in 2Q, house prices were down 13.96%, an improvement from 18.51% decline on-year to 1Q09.

The FHFA's purchase-only index was however down by 1.74% during 2Q09, somewhat worse than the 0.04% drop in 1Q09, so the signals in the US are mixed.

Year-to-date in 2Q, seasonally-adjusted prices fell 5.03%.This was a lesser fall than in the year to end-Q1 (down 9.16%) and than in the year to end 4Q08 (down 9.69%) (all figures inflation-adjusted).

However, the Global Property Guide said some countries avoided the crunch.

Israel's housing market has continued to sail through the global recession. The average price of houses rose 8.40% on-year to end-2Q09. But the quarterly increase in 2Q09 was down to 1.02%, a drop from 5.52% in 1Q09.

Switzerland saw an increase of 4.90% over the year to end-2Q09. However, house prices barely increased during 2Q09.

A key indicator of improvement is the market's momentum, that is the number of countries that did better this year, than during the previous year.

Nine countries improved their on-year performance to end 2Q09, compared with a year ago. In contrast during the year to end-1Q09, only six countries did better than the previous year.

But many countries are still suffering. The house price index for Dubai, UAE, fell 49.9% during the year to end-2Q09. But quarterly data indicates Dubai's downward house price spiral is moderating.

House prices fell 8.92% in Q2 2009, much less than the 42% drop in 1Q09.

Double digit year-on-year declines were also experienced in Bulgaria, Singapore, Iceland, UK, Japan, Denmark and South Africa. Most recent quarter declines in these countries range from 2% to 10%.

By The EDGE Malaysia (by Joseph Chin)

IJM expects to keep orderbook above RM4b

Malaysia's second biggest construction firm aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia

IJM Corp Bhd, the country's second biggest construction company, expects to maintain an order book of more than RM4 billion as it bids for sizeable government contracts locally and abroad.

It aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia. Governments around the world are spending more money to pull their economies out of recession.

"We would replenish the order book so that we maintain about RM4 billion plus at any one time. Since our chewing rate is about RM200 million a month, we have to (replenish) about RM2 billion plus a year," said IJM Corp managing director and chief executive officer Datuk Krishnan Tan Boon Seng.

He was speaking to reporters after the group's annual and extraordinary general meetings in Subang Jaya yesterday.
Some projects IJM Corp is eyeing include the new permanent low-cost carrier terminal in Sepang and the light rail transit (LRT) extension works in Kuala Lumpur.

"We do a broad range of work from civil engineering works to building. You will see us participating where there are sizeable jobs," said Tan, adding that the company was bidding for works here and abroad.

Tan said tenders for both the LCCT and LRT projects have yet to be called.

"For the LCCT, the pre-qualification process has been called and we have also submitted. We will look to bid for the sizeable packages (once the tender is open)," he said.

Tan also said that there will be other tenders from the Pahang-Selangor Water Transfer project, including the dams, intakes, ancillary infrastructure and the treatment plant.

On IJM Corp's property division, Tan said there are strong property sales yet to be billed and expects the division to perform decently given the wide range of products - retail, industrial, medium- and high-cost developments - in high density locations.

Meanwhile, the group saw its first quarter net profit decline 22.5 per cent to RM70.8 million while revenue slipped 5 per cent to RM1.16 billion.

In a Bursa Malaysia announcement, it said the lower earnings for the three-month period to June 30 2009 was due to lower contributions from its plantation division as crude palm oil prices fell.

Also, the construction division suffered lower margins from old contracts affected by higher costs in the previous year and higher financing costs incurred in India.

The plantation division earnings dipped as the group expedited its fertiliser application and repair cost for infrastructure due to heavy rainfall and floods.

"We don't think that the first quarter is reflective of the following quarters," said Tan. He added that the current fiscal year ending March 31 2010 would be similar to 2007, where the first quarter was lower but later quarters showed improvements.

By Business Times (by Jeeva Arulampalam)

Sunway bidding for deals worth US$5.7b

Sunway Holdings is bidding for foreign and local contracts worth about US$5.7 billion (RM20 billion) as big spending plans by governments boost construction activity globally.

"Including what we are going to bid, it's about RM20 billion," managing director Yau Kok Seng said on Monday.

"Our past track record (for successful bids) is about 10 per cent, which means over the next six to 12 months, we should be able to win at least RM2 billion (worth of jobs)," Yau said in an interview.

Sunway has submitted bids for construction jobs worth about RM1 billion in India. The company, the seventh-largest builder in the country with market value of US$224 million (RM785 million), is also confident of obtaining repeat jobs within the US$25 billion (RM87.75 billion) Arzanah Development in Abu Dhabi.
"We have been shortlisted to tender for Phase 2 which will be launched in the near future," said Yau.

In May, Sunway said 75 per cent-owned Sunway Construction has been awarded a RM326 million contract for the Arzanah Development.

In Malaysia, the company is bidding for jobs under a multi-billion ringgit low-cost carrier terminal project, said Yau.

Construction stocks are the best performers on the local bourse so far this year, as investors bet that massive government pump-priming will boost builders' earnings.

Malaysia has one of Asia's largest stimulus plans, worth RM67 billion.

The government is expected to launch later this year major infrastructure projects including a light rail line extension and the RM2 billion low-cost carrier terminal project.

Shares in Sunway have more than doubled so far this year, outpacing its larger rivals such as Gamuda and WCT. The Kuala Lumpur Construction Index, made up of 42 stocks, has risen 36 per cent.

Sunway, which also has interests in property development and quarrying, is one of three bidders for German cement maker HeidelbergCement's Malaysian assets.

HeidelbergCement is looking to sell the Malaysian assets, which have also drawn interest from private equity firms, for at least US$250 million (RM877 million), two sources said in June.

"They have not officially informed us yet, but we should know soon," said Yau. The potential acquisition is not expected to stretch Sunway's balance sheet as it seeks to further reduce debts by selling off non-core assets, he said.

"The way we structure the acquisition, there is a minimum capital requirement," he said.

Sunway wants to cut its gearing ratio to 0.5 times over the next two years from about 0.8 times currently, said Yau.

"Although it's our vision to regain our pole position (in the quarry business), we are not keen to compete with someone who's prepared to pay (a) ridiculous price," said Yau when asked if he was confident of securing the assets.

By Reuters