Are we attracting foreign buyers?

Malaysia stands out as one of the few countries in the world that have extensively liberalised their property markets to attract foreign buyers.

The country’s current investment environment is especially inviting, with no restrictions on domestic funding for foreign investment in local properties, in addition to further deregulation in Foreign Investment Committee (FIC) guidelines.

Foreign acquisition of residential property priced above RM250,000, and commercial property and industrial land valued at RM500,000 and above will not require FIC approval.

However, from Jan 1, 2010, the minimum threshold of residential units that can be sold to foreigners will be doubled from the current RM250,000 to RM500,000.

While other neighbouring countries impose various restrictions, Malaysia allows the purchase of freehold property by foreign purchasers.

Many countries including Thailand, Indonesia and the Philippines do not allow foreigners to buy their freehold property. In Singapore, foreigners are only allowed to buy strata property, except on Sentosa Cove where they can also opt for landed property.

To buy a residential or commercial property in Thailand or Indonesia, a foreigner needs a local partner to get approval for the transaction.

The prices of our property are also much lower compared with those in other countries.

Despite the much better terms, lower prices and the offer of freehold property, foreigners are still not coming in droves to invest.

Of the total property transacted nationwide, less than 5% – around 3.5% to be exact, were purchased by foreigners. This compare with about 25% to 30% of foreign purchases in Singapore today.

It goes to show that by dangling “carrots” alone to entice foreign investors will not carry much weight and attract the right targets to our shores.

So, how can the government’s liberalised environment and industry efforts to promote foreign real estate purchases translate into greater interest from foreign investors?

To set up an international market place for our property, the Malaysia Property Inc (MPI), a joint public-private sector initiative, has been launched to promote Malaysia as the preferred international real estate destination.

The country is targeting RM200bil in foreign direct investment (FDI) into the real estate sector over the next 10 years.

The MPI has been allocated a grant of RM25mil by the government to kick start its promotional efforts through road shows and conferences in various target markets including Britain, Hong Kong, Singapore and the Middle East.

These efforts will go a longer way if they are undertaken cohesively and holistically together with the Tourism Ministry to promote Malaysia as a favourite tourism and second home destination.

One way of showcasing Malaysia is through the “back to basics” gamut of the people’s way of life, culture and religious practices.

Promoting a strong Malaysian identity that reflects the true multi-racial and social-cultural make up of the people will go a long way to cement a stronger bond and acceptance among the various ethnic groups and in the process, raise the country’s attractiveness among foreigners as a worthwhile place to visit or settle down.

The relevant authorities and industry players must understand that foreigners who are adventurous enough to venture out of their “comfort zone” and their home country to buy property in a foreign land have very unique needs.

For those who are considering to retire or set up second homes, what they are looking for is the chance to savour the “local experience” of living in a foreign country.

They are certainly not looking to settle down in another concrete jungle where they may probably come from.

That could explain why Bali and Phuket, despite their largely “laid back” and undeveloped environments, are favourites with foreign visitors and retirees.

Closer to home, Penang, Malacca, Sabah and Sarawak are also favourite attractions among foreign visitors because of their unique heritage and environment.

By leveraging on our uniqueness and the many pluses – a year round tropical climate, affordable cost of living, good infrastructure, and a largely friendly, English speaking and peace loving Malaysians – there are much that the people and country will gain by further harnessing its diversity in this highly globalised and borderless world.

Given the big contribution made by the property sector to the country’s economy – last year the industry contributed close to RM11bil to the economy – efforts by the government and industry players to promote Malaysia’s real estate to the rest of the world should be further harnessed.

And given its close connection to the people’s basic lifestyles and interaction with each other, all Malaysians have a role to play to ensure the efforts are successful.

·Deputy news editor Angie Ng hopes Malaysians will take pride in their strong bond and friendships built over so many generations and leave a legacy that will make our future generations truly proud.

By The Star (by Angie Ng)

PNB plans mixed property projects

Permodalan Nasional Bhd (PNB), the country's biggest fund management company, plans to develop next year its 7.2ha surrounding Merdeka Stadium and Stadium Negara in Kuala Lumpur.

Its president and group chief executive officer Tan Sri Hamad Kama Piah Che Othman said it will undertake mixed property projects that add value to the surrounding areas.

PNB had said earlier that it planned to develop the land into posh residential areas and business plazas at a gross development value of RM3 billion.

Hamad Kama Piah said that PNB was stepping up property development as earnings from its property arm provided an important source of revenue for the well-diversfied group.

"PNB will increase real estate investment to ensure it reaps commensurate returns," he told reporters after handing over Hari Raya goodies to seven organisations and orphanages from Selangor in Kuala Lumpur yesterday.
On Amanah Saham 1Malaysia (AS 1Malaysia), Hamad Kama Piah said that an estimated 2.4 billion units had been subscribed to date. More units of the fixed income fund are still available.

The fund, launched by Prime Minister Datuk Seri Najib Razak on July 31, offered 10 billion units for sale at RM1 each. It has the same features as Amanah Saham Wawasan 2020 and Amanah Saham Malaysia.

By Bernama

A test for Islamic home financing?

When Islamic home financing came on the scene, interest rates were neither as low, nor as attractive, as today. House buyers opt for them because the “interest”, or what banks called “profit sharing”, was capped at 10%.

Having seen interest rates going up to 14% during the 1997/98 crisis, 10% may be acceptable for some of them. How times have changed! Today, it is still volatile but interest rates are also at a 33-year low. And it looks like it will remain low for a while.

Most of us want to finish paying off our mortgages as soon as possible. Depending on how young one is, home buyers give themselves a time line of about 10 to 15 years to pay up their mortgages. A 30-year-old may consider a longer tenure.

Under today’s low interest regime, what are house buyers leaning towards? The scenario seems fuzzy.

Three banks interviewed say Islamic financing for properties are growing and Bank Negara Malaysia’s statistic testify to that. However, bank officers say customers prefer conventional loans.

Foreign banks OCBC and HSBC decline to answer questions on Islamic property financing. A marketing officer with OCBC says he is referring Islamic financing enquiries to local banks. Ironically, both HSBC and OCBC have set up Islamic banking outlets.

Phone enquiries at CIMB and Maybank suggest interest among house buyers is towards conventional loans at the moment because of the low interest regime. A second reason may be due to house buyers’ interest to pay up the loan as quickly as possible.

“Generally, those who opt for an Islamic packages are not in a hurry to pay up the loan,” says a bank source.

Paradoxically, these same banks report healthy growth numbers for its Islamic packages.

Maybank Islamic Bhd executive vice-president, acting CEO Ibrahim Hassan says financing of residential and non-residential properties grew at an average rate of 6% from 2007 till June 2009.

It is expecting growth rates of 8% and 12% for financing of residential and non-residential properties respectively. Customers are diverse – Malays make up half of them, Chinese 37%, Indians 8% and others 5%.

The majority are categorised under the mass affluent segment with total financial assets ranging between RM100,000 to RM400,000.

At present, residential properties (landed and condominiums) portfolio comprises a fifth of bank’s total financing, while non-residential properties accounts for almost 3%.

Over at CIMB, they expect to close the year on a strong note for its Islamic property financing. It sold more than RM300mil of its flexi Islamic home package within the first three months of its launch, says CIMB Islamic CEO Badlisyah Abdul Ghani.

CIMB’s 2007 and 2008 growth for Islamic property financing was RM100mil and RM1bil respectively. The introduction of new products last year and this year gave them an average growth rate of about 100% year-on-year.

Badlisyah says its growth rate for the first quarter of this year exceeded that of the industry’s growth; putting their overall Islamic property financing market share at 9.8% (RM2.5bil out of RM25.7bil) as at June 2009. It was RM6mil in 2005.

CIMB Islamic now ranks seventh out of 16 Islamic banks for the financing of residential properties in Malaysia.

He says this year, new bookings of Islamic property financing are about 50% of total property financing for the group (CIMB Bank + CIMB Islamic Bank). Our market share has moved from 11% in 2006 to about 14% of the entire industry in the first half of this year, he says.

While the healthy growth story is also being trumpeted at Bank Simpanan Nasional (BSN), the story is slightly different but no less interesting. BSN is currently promoting its Islamic home financing, but unlike Maybank and CIMB, the rates are fixed. BSN is the third largest bank after Maybank and CIMB in terms of branches.

The bank is promoting a five-year low instalment package, with variants, where rates will be as low as 1.95% for the first two years and 4.79% for the next three years. Thereafter, it is fixed at 5.88%. This package is for loans up to RM100,000 for completed properties. Customers pay for the legal fees. The offer ends Dec 31. (See table for comparison with another variant)

BSN deputy chief executive (consumer banking and business development) Norazian Ahmad Tajuddin says as of June 30 this year, BSN has RM3bil mortgages, a third of which are under Islamic financing.

BSN has dispersed Islamic property loans totalling RM727.9mil in 2007. This represents a 36% growth rate; they started from a low base.

Last year, it amounted to RM821.9mil, representing a growth rate of 13%. The bank expects a 10% growth this year. As of July this year, its Islamic property financing is RM846mil.

Norazian says these are healthy numbers for them. “Please do not compare us with other local banks; in value terms, our numbers are small. We are starting slow and BSN is not like other commercial banks. We pride ourselves as a provider of banking services at reasonable rates. We are evolving and provide services to all levels of society from the poor to the rich. But the very rich don’t come to us.

“We like mortgages because it provides a steady stream of income for at least 15 years,” she says.

The national savings bank will have five Islamic banking outlets by the end of this year, and adding 11 more by the end of next year. It has a total of 377 branches.

Says Norazian: “Our customers are questioning if BSN offers Islamic banking. So like other banks, we will open Islamic banking outlets.” They are targeting customers in Klang Valley and Johor, the growth areas and those who buy to stay. More than 90% of its customers are Malays.

A quick check with Bank Negara Malaysia’s website shows that monthly Islamic house financing is growing steadily. For June 2008, it recorded RM17.83bil while June 2009, it reached RM20.40bil.

By The Star (by Thean Lee Cheng)

Government to revive 78 projects

PETALING JAYA: The Government is taking the initiative to revive 78 abandoned housing projects under its new Housing Revival Initiative, said Housing and Local Government Minister Datuk Seri Kong Cho Ha.

However, he said it was difficult to estimate how much time was needed to revive these abandoned projects as many were difficult cases.

“From 1990 to 2007, there were 136 abandoned housing projects, or about 2% of the total housing developments in the country.

“Among them, 49 projects are currently being rehabilitated and 17 are difficult cases (to revive),” he said after launching the Housing Revival Initiative yesterday.

Kong said the previous and new developers, house buyers and bankers should negotiate and discuss “win-win” solutions for the revival of the abandoned projects such as writing off the loan interest for house buyers.

He said the Government would not provide funds for this initiative as it was not right to use tax payers’ money for the exercise.

However, coming up with the money could be the Government’s “last resort only” “should the problem be prolonged further,” he added.Under the initiative, corporate organisations are encouraged to undertake the revival of the abandoned housing projects.

By The Star

LCL seeks partners for UAE projects

DUBAI: Interior fit-out (IFO) group LCL Corp Bhd will be looking at strategic partnerships with both local and foreign parties to financially support the sustainability of its future projects in the United Arab Emirates (UAE), according to group managing director Datuk Low Chin Meng.

He said LCL expected to finalise a strategic partnership with a public-listed Malaysian construction company with on-going projects in Abu Dhabi by the end of the month.

At the same time, the group was negotiating with parties from Abu Dhabi for other strategic partnerships, Low told Malaysian media in Dubai recently.

LCL is a well-known group in the UAE, especially in Dubai, for its IFO projects such as the newly-launched RM28bil Dubai Metro, dubbed the world’s longest fully-automated driverless metro system, the Dubai Mall Hotel and Dubai Marina Hotel.

The group was also involved in the IFO works in Dubai’s latest and luxury Atlantis The Palm Hotel.

To date, LCL has five major contracts in Dubai with the size of RM50mil each.

“We still have confidence in the property market in Dubai but given the current slowdown and slow recovery rate possibly in another one-year period as anticipated by industry experts, LCL will now focus on IFO projects in Abu Dhabi. Our interest will be in government-funded projects, such as hospitals, universities and clinics,” said Low.

On the group’s operation in Dubai, Low said: “We will not be taking many new jobs in Dubai.

“Despite the tough market conditions, we still have confidence that Dubai will recover and we will not throw in our towel just yet. Unlike some other contractors, we have a good track record of completing our jobs in Dubai.”

Low admitted that the group’s cashflow was heavily affected by the tight liquidity situation in Dubai, resulting in losses to the group.

However, he said: “We are currently in the process of recovering our claims and entitlements from property developers in Dubai estimated at not less than RM200mil.

“We have a strong case to make these claims as we have completed our jobs and expect these claims to materialise within the next eight to 10 months. This will lead to a substantial reduction in our high borrowings.”

Currently, the group gearing ratio is about three times.

By The Star (by Hanim Adnan)

Good rates for good borrowers

PETALING JAYA: A new approach by banks called risk-based pricing is expected to boost both their top line as well as bottom line, say industry players.

Under this new system, different interest rates may be set based not just on different portfolios of loans but also different types of customers.

The more creditworthy consumers who show, among other things, that they can repay promptly and do not over-borrow, will likely obtain better interest rates.

This is in line with the current global banking trends as seen in initiatives such as Basel II, which encourages voluntary internal-based ratings that place an increasing importance on the accuracy of risk measurement and pricing of risk portfolios.

Alliance Bank Malaysia Bhd group chief executive officer Datuk Bridget Lai said by being able to recognise its quality borrowers, it would be able to further enhance cross-sell opportunities, which in turn would boost its topline.

“In terms of bottom line, higher-risk borrowers can be identified, and their risks addressed and mitigated through higher pricing. This should serve to protect our bottomline,” she told StarBizWeek.

Lai said its pricing differentiation on home loan applications was based on a margin-of-advance or loan-to-value ratio, as well as the loan size.

She said its home loan borrowers were also rated or categorised based on their loan application score card, which comprises various criteria that differentiate credit quality and, hence, lending rates between borrowers, even within asset classes.

“These criteria or attributes of the loan application score card are derived statistically from our internal loan and customer data, calculated over a period of time,” Lai said.

RHB Banking Group head of retail banking Renzo Viegas concurred that risk-based pricing was a more efficient pricing hypothesis as the rate offered to the customer would efficiently reflect the cost of the credit risk associated to the borrower.

“This is a win-win approach for both the bank as well as customers – a higher rate for customers with higher risk while rewarding low-risk customers with lower rates. We are then able to shift our portfolio towards low-risk borrowers, hence reducing non-performing loans (NPLs) and making the mortgage business more profitable,” he noted.

Bank Negara’s latest quarterly bulletin said net NPL ratio in the local banking system was seen to be flattening at 2.2% for the first half of this year, mainly attributed to higher recoveries and restructuring of loans to performing status.

In fact, on the sectoral front, the lower NPL ratio was driven by the decline in NPLs in the household loan segment, the report added.

With RHB being one of the first local banks to implement the risk-based pricing approach, its customers were pleased with the new system due to the attractive rates offered to the low-risk category, said Viegas.

However, Lai cautioned that the approach was not flawless in nature.

“Customers from the lower-income group and self-employed customers with no credit history are generally accorded high-risk ratings. This is in line with the bank’s prudent practice to ensure risk is mitigated to the minimum while accommodating financial needs of the customers,” she said.

Lai also said the approach was a flexible rating device that could be applied for other loan products, such as hire purchase and personal loans.

“We plan to introduce risk-based pricing on individual borrowers after the full implementation of our mortgage application credit score card by the first half of 2010,” she said.

By The Star (by Laalitha Hunt)

Builders welcome govt move to delay stamp duty rule

The government has decided to delay a stamp duty rule that would raise costs for the construction sector to 2011, following objections from industry players.

The rule, which would have raised costs by up to 2 per cent, was supposed to take effect this year.

"We're thankful to the government for considering the plight of a multitude of stakeholders in the construction industry," said Master Builders Association of Malaysia (MBAM) president Ng Kee Leen.

Under Budget 2009, the government said it wanted to simplify stamp duty assessment. However, it turns out that industry players have to pay more.
From January 1 this year, they will have to pay 0.5 per cent duty on all construction services agreements that do not require collateral.

This covers consulting contracts, operation and maintenance contracts and facilities services contracts.

It means that a RM10 million construction contract will attract a total stamp duty of RM50,000. Previously, the stamp duty on an ordinary service agreement was just RM10.

On Wednesday, the Finance Ministry said from September 15 to December 31 2010, all service agreements will be imposed a flat stamp duty of RM50.

The government is only able to gazette the above ruling next Tuesday onwards. For application requests before the gazetted date, approval for stamp duty will be considered on a case-to-case basis under Section 80(1A) of the Stamp Act 1949.

MBAM told members to include the stamp duty cost in the contract. Contractors should also split the cost for materials and services as this will result in lower stamp duty.

After January 1 2011, all service agreements, including construction contracts, will be charged a stamp duty of 0.5 per cent of the total contract sum.

"We will continue to appeal to the government to consider maintaining the RM50 flat stamp duty for all construction contracts beyond 2011," Ng said.

By Business Times (by Ooi Tee Ching)

MK Land expects to launch India project in March

Property developer MK Land Holdings Bhd expects the first phase of the affordable homes development project in India to be launched in March next year.

Executive chairman Tan Sri Mustapha Kamal Abu Bakar said the project will be a replication of the successful model of Damansara Damai, a low medium cost township developed by its subsidiary, Medan Prestasi Sdn Bhd.

"We are in the stage of planning and hope to launch the first phase in March next year because there is a pent-up demand for properties," he told reporters after launching construction works for a bus terminal in Damansara Damai, in Petaling Jaya, Selangor yesterday.

MK Land via its subsidiary Ritma Mantap Sdn Bhd, is in partnership with Embassy Group of India to develop and construct a 120ha township in northern Bangalore, India.

With a total gross development value of RM3 billion, the project is being undertaken by Milan Gateway Sdn Bhd, where MK Land and Embassy Group each holds 47.5 per cent while MKN Embassy Development Sdn Bhd has 5 per cent.
Construction is expected to take off next year while completion will take about five years. It will potentially deliver 16,000 units of affordable homes and about 560 units of retail outlets.

Meanwhile, MK Land has spent RM1.9 million to set up the bus terminal in Damansara Damai known as Wan's Central. The terminal is to provide transportation facilities in the township with a population of more than 90,000.

Along with the bus terminal, there will be also 32 affordable shop units specially built for local retailers and traders.

A systematic approach will be taken to build the shop units to allow proper traffic flow along the roads.

The Damansara Damai housing estate developed by Medan Prestasi is a housing scheme under the Selangor government privatisation project.

The project encompasses 75 per cent low-cost and middle-cost homes as well as other properties including condominiums and commercial lots.

Among the bus companies which will operate at the 0.5ha bus terminal due for completion in November are Selangor Omnibus, Rapid KL and Metrobus.

Todate, more than 14,000 properties worth RM1.2 billion have been sold.

Prestasi also has on its planning board projects with gross development value of RM782 million.

The projects include the Seasons Square Block A condominium worth RM115 million and the Armanee Block D condominium worth RM88 million.

By Bernama

RM175mil project just near Gurney Drive

A high-end condominium which is located close to established amenities and facilities is always a draw for potential housebuyers.

This is being offered by Palmex Industries Sdn Bhd through its latest RM175mil Fettes Residences Condominium project in Jalan Tanjung Tokong on Penang island.

Those interested can check out the company’s booth at the Star Property Fair.

The 35-storey block on freehold land consists of 195 luxury condominiums.

The company’s general manager Ang Hooi Eow said the project was located within the vicinity of established amenities and facilities at one’s convenience.

“It is just a five-minute drive from Gurney Drive, home to Penang’s most famous glitzy shopping mall Gurney Plaza,” he said in an interview.

Other amenities which are nearby include healthcare services, international school and colleges, modern shopping complexes and sandy beaches.

Priced from RM836,800, each unit has a built-up space of 2,000 sq ft onwards complete with resort-styled recreation and facilities.

The facilities available are swimming pool and children’s pool, gymnasium, snooker room, table tennis room, barbecue centre, basketball court, skate board rink, water feature and fountain, children playground, resting kiosks, leisure walking path and jacuzzi at swimming area.

“Besides, we also have a 22,000 sq ft landscaped area and an interior landscaped garden,” he said, adding that the project was scheduled for completion in June 2011. Ang said 35% of the units had been sold.

“Those interested in buying the units will receive a special promotion package during the fair.

“They will also benefit from zero bank interest during construction. We expect many enquiries during the fair,” he said.

Ang said each unit was allocated two covered car parks and there would be four high-speed lifts in the block to minimise waiting time.

“Despite all the facilities, the monthly service charge for each unit is only RM400.

There are also six penthouses of 4,000 sq ft. Most of the condominium units have sea views.”

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

By The Star

Bargains galore at fair

The Star Property Fair in Penang is back again with bargains and deals for those seeking to get the home of their dreams or to furnish their existing property.

Exhibitors and their workers setting up their booths at G Hotel for the Property Fair.

The three-day fair at G Hotel (Level 2) and Gurney Plaza’s new wing ground floor concourse area, which starts today, will showcase the latest property complemented by a lifestyle section.

The Star regional manager operations (north) Chung Chok Yin said visitors could expect more higher end property on display.

“We changed the venue of the fair this year from the Penang International Sports Arena with the aim to attract a different target audience.

“We are having more up market products at prime locations. Considering the pricing of property in Penang now, the deals showcased will be good bargains for potential buyers,” Chung said after visiting the exhibition venue yesterday.

He said the fair aimed to help developers reach out to the more affluent segment of the society.

“We are also targeting the expatriates who are looking for property here,” he added.

The fair will feature more than 70 exhibitors with about 150 booths. The exhibitors include property developers, lifestyle product companies and financial institutions.

Among the developers are Henry Butcher Malaysia (which is also the technical adviser for talks and forums), Ivory Properties Group, SP Setia, IJM Land Bhd, Belleview Group, Mah Sing Group, PJ Development Group and Ideal Properties.

For the lifestyle section, exhibitors include Syn Hoo Lim, Matrix Kitchen, Jia Yee, Pensonic, Solar Tech, Door Decor, B.L.Furnishing Sdn Bhd, Groupe SEB and Home Focus Sdn Bhd.

There will also be an auction for the painting ‘Nostalgic Phenomena’ by artist Koay Soo Kau.

The auction will take place throughout the fair and the reserved price is RM10,000. The proceed will go to the Penang Hospice.

There will also be 25 other paintings on sale from which 30% of the proceeds will be channelled to Penang Hospice.

Visitors to the fair stand a chance to win fabulous prizes from the Surf, Click & Win and Lucky Catch contests.

Organised by Star Publication in collaboration with Henry Butcher and supported by The Expat Group, the Star Property Fair 2009 is open from 10am to 10pm daily over the three days.

Admission is free.

By The Star

India project catalyst for MK Land’s international property foray

PETALING JAYA: MK Land Holdings Bhd’s joint-venture development in Bangalore, India, is set to be a catalyst for the company’s foray into the international property market, says executive chairman Tan Sri Mustapha Kamal Abu Bakar.

“The project will be launched in March after we get all the approvals from the authorities involved,” he said yesterday after officiating the start of construction works for a bus terminal in Damansara Damai.

“We are being recognised by India as having the expertise to build projects that focus on affordable houses such as the ones we develop in Damansara Damai,” he added.

MK Land’s housing project in India has a gross development value of RM3bil, according to Mustapha.

He said the company first got involved in affordable housing in the 1990s to help solve the problems posed by squatters.

“Now, our efforts to help these people have opened the eyes of other countries such as India to replicate this kind of concept,” he said, adding that the perception that low-cost housing did not bring much profit was not true.

Such projects can be lucrative if done in big volumes, according to Mustapha.

“To date, we have sold more than 14,000 houses valued at about RM1.2bil. Damansara Damai is now being populated by more than 90,000,” he said.

By The Star

PNB plans project near Merdeka Stadium

PERMODALAN Nasional Bhd (PNB) will intensify its investment in the property sector by developing its 7.2-ha land near Merdeka Stadium.

Group president and chief executive Tan Sri Hamad Kama Piah Che Othman said the mixed development project would start next year.

Property was a new source of income for the company and "PNB will intensify its property investment because we want to ensure each property belonging to PNB brings suitable returns," he said.

PNB would ensure the project meet market expectations and give added value to its investment, he told reporters after giving away donations to seven orphanages in Selangor today.
On Amanah Saham 1Malaysia, Hamad Kama Piah said about 2.4 billion units had been subscribed so far.

The unit trust was launched by Prime Minister Datuk Seri Najib Tun Razak on July 31 with a size of 10 billion units.

By Bernama

AGB awaits nod for Penang project

Property developer Asian Global Business Sdn Bhd (AGB) plans to start work on its RM300 million "Rice Miller" development in Georgetown's heritage enclave by December.

The company's chairman Kate Lim told Business Times that AGB is currently awaiting approval from the Penang local authorities for its project which had to be scaled down, to comply with conservation guidelines stipulated by the United Nations Educational, Scientific and Cultural Organisation (Unesco).

The mixed-development located at Georgetown's waterfront Weld Quay area will include a boutique hotel, upscale private residences and commercial units.

AGB was one of four property developers that obtained approvals from the Penang Island Municipal Council for its projects, well ahead of the date when Georgetown was inscribed on Unesco's World Heritage List in July 2008.
Together with Boustead Holdings Bhd, Eastern & Oriental Bhd and the Low Yat Group, AGB was told by the Penang state government that their proposed developments were jeopardising Georgetown's heritage status, because their height were over the prescribed limit.

The Rice Miller project is located in the city's heritage zone, along with the Boustead Royale Bintang Hotel which is being constructed behind the general post office in Lebuh Downing.

E&O is building an extension to its E&O Hotel while Low Yat had planned to build a 23-storey hotel on Jalan Sultan Ahmad Shah, both in the buffer zone.

"After meeting Unesco officials who came to Penang in April, AGB decided to meet all Unesco's requirements, said Lim, "and we have now lost 50 per cent of our net sellable space".

She said the original plan to build 11-storeys has now been scaled down to five-storeys.

"We submitted fresh plans last month for compliance with Unesco's guidelines," she said, adding that the project is slated to be first permitted under Georgetown's new height limits for its heritage zone.

Sitting on a 1.2ha site, the project is set to revive Georgetown's old port area and will be marketed as a piece of affluent real estate in the heart of the city.

"As planned from the outset," Lim added, "we will be conserving the 60-to-100-year-old buildings at the site and re-using them for commercial and retail, including an old vacant godown."

By Business Times (by Marina Emmanuel)

SATS to unveil first component

SENAI: Senai Airport Terminal Services Sdn Bhd (SATS) will launch the first of three “components” of the multi-billion ringgit Senai Aviation & Airport City project by year-end.

An artist’s impression of the hotel project

Deputy chief executive officer Shahrull Allam Abdul Halim said the first component, on a 323.74ha site, comprised residential, commercial and hospitality amenities.

The other two components in the mixed development project are an air cargo logistics centre and a high-tech park, each occupying a 404.68ha site.

“The first component’s launch involves the commercial and hospitality segment while the residential side will take place when the time is appropriate,’’ Shahrull told StarBiz in an interview.

He said the initial launch would cover a 12.94ha site, of which 10.52ha would be for the commercial precinct and 2.42ha for the hospitality section.

“The hospitality component, comprising two hotel blocks and a convention centre, will be developed in three phases and the project will take 24 months to complete,’’ he said.

The development of the hotels and the convention centre will come under Johor-based Tiong Nam Logistics Holdings Bhd, according to Shahrull.

Shahrull said apart from factory outlets, the commercial area would also have logistics and warehousing facilities.

“We want to position the commercial area as a regional wholesale centre to attract buyers from countries in the region,’’ he said, adding that an international wholesale operator with a similar operation in Dubai had decided to invest in the commercial project and would manage the wholesale centre while SATS would provide the land.

SATS subsidiary Enigma Harmoni Sdn Bhd, which is linked to billionaire Tan Sri Syed Mokhtar Al-Bukhary, has received approval from the Kulai Municipal Council for the airport city project.

MMC International Holdings Bhd, a wholly-owned subsidiary of Syed Mokhtar’s MMC Corp Bhd, has stakes in Senai International Airport, Port of Tanjung Pelepas and Johor Port.

The entire development, which is located next to the Senai Airport, also includes a Customs Inspection Quarantine Complex and will take about 10 years to complete.

The project is estimated to cost about RM1.2bil with the Senai Airport Hi-Tech Park set to be the second high-tech park in the country after Kulim Hi-Tech Park in Kedah.

Opened in 1974, Senai Airport is managed by SATS, which took over the operations of the airport from Malaysia Airport Holdings Bhd in 2003.

By The Star (by Zazali Musa)

Prizes galore at property fair Three-day event starts tomorrow

Besides property, visitors to The Star Property Fair 2009 in Penang also have the opportunity to win attractive prizes such as Global Positioning System (GPS), MP3 portable media player and facial products.

To win the prizes, participants have to look out for the ‘Lucky Catch Contest’ entry forms in The Star newspaper’s Metro section.

Iriver (M) Sdn Bhd has sponsored RM5,000 worth of products for the contest, with its administration assistant Diana Ahmad saying the company was promoting its latest products.

Fabulous Slimming and Skin Therapy Centre has also sponsored RM5,000 worth of cash vouchers for the contest.


Its manager Winnie Lim said the company was rolling out its new product — The Power of Miracle Seed.

“We hope to share the good news with everyone,” she said after handing over the vouchers to The Star’s marketing representative Lai Fuh Sheng at The Star Northern Hub yesterday.

There are also 30 grand prizes to be won which include Blackberry phones, furniture and flight tickets to Bangkok.

The three-day Star Property Fair 2009 kicks off tomorrow at G Hotel in Gurney Drive, Penang.

By The Star

LBS Bina upbeat on demand

PUCHONG: LBS Bina Group Bhd is confident of strong demand for phase II of its Town Villa at Taman Tasik Puchong based on the response to previous launches of property units under its Affordable Home Series.

Managing director Datuk Lim Hock San said in a statement he believed there would be significant demand for affordable residences in this locality.

Phase II, comprising 96 town-houses, was launched yesterday in conjunction with the unveiling of the Town Villa show unit.

LBS said 97% of the 104 units offered under phase I were sold within three weeks of its soft launch.

Town Villa, which occupies 2.2ha of Taman Tasik Puchong’s development land of 64.8ha, comprises 330 townhouses with a total gross development value of RM62.3mil.

The units are priced from RM179,000 to RM267,000.

For its Affordable Home Series, LBS has extended its LBS Hassle Free Hone Ownership programme that allows purchasers to make a low down-payment of RM1,000 while LBS will absorb the legal and disbursement fees.

By The Star

A trip to the future

If you are concerned about where you want to go in life or even the direction of society as a whole, first appreciate where you are coming from. To provide this understanding is a basic objective of the Malaysian Heritage Trust.

Forget the tourism spin-offs and the fact that many older buildings might be prettier than their modern counterparts. That’s not the point of conservation; it’s a secondary issue. In any case, beauty is a subjective quality.

In Australia, disgusting chunks of concrete infrastructure and revolting 1960s high-rise office buildings have been gazetted for conservation. Time will judge the validity of this approach. Over time, the Tower of London has probably been thought by many to lack a certain charm, especially those occupying the dungeons. Nevertheless, it provides an important understanding of how British society has evolved. Sophocles said: “Many are the things that man seeing must understand. Not seeing, how shall he know what lies in the hand of time to come?”

When it comes to town planning, time travel is quite easy. To go back in time, Yangon is a very beautiful example of a city that has not yet been ravaged by development, a virtual time warp. Prague under the communists was once similar. Florence and Venice have retained their integrity, and little new development has been allowed in Paris up till now.

If you want to see the impact of allowing development on a controlled basis, then contemporary cities such as KL are a good example, along with, say, Budapest, Sydney, Brisbane and so many others, depending on the degree of control that interests you.

There are cities such as Leningrad and Bucharest spoilt by the growth of really ugly public housing. There are others where an effort has been made to make public housing a cultural asset (erm ... give me time, there must be one ...).

It is interesting to observe the impact of cities putting in the public transport early (London, Sydney) or racing to catch up (KL, Dubai).

For a trip into the future, go to the United States.

In fact, I just came back from Los Angeles (LA). It’s pretty depressing. Here is a huge urban metropolis filled with some of the smartest people in the world, who have allowed their living conditions to deteriorate to a very uncomfortable level.

Certainly, bold and expensive steps are being taken to preserve the air quality in LA but the sheer quantity of vehicles has turned the roads into “traffic sewers”. When I took the keys to my rental car, the Hertz lady muttered darkly “beware of the 405”.

I soon learnt that this wasn’t a triad, but a constipated arterial highway. LA has many splendid features – the beaches, the hills softly burning in the sunset, the colourful pan-handlers. But how can you work in a city where the traffic is largely paralysed at peak hours? And of course, the fundamental question is, what is society’s tolerance level? My friend in lovely, low-density scenic San Diego wouldn’t move to LA even if promoted.

This is surely a supreme sacrifice for an American. He can’t be alone in this view. So, how long will it be before thousands, or millions, choose not to live there? Or will the rich move out and leave the poor behind, or vice versa? What impact do those possibilities have on the way other cities – even KL – should be developed?

California is the world’s fourth largest economy, ironically suffering high unemployment and insufficient funds to keep all its schools open. LA is the way of the future if you allow unbridled development and vehicle use. Is it our future, too?

The world is growing and so are most of the cities in South-East Asia. It is only a matter of time before these problems begin to threaten KL, Penang, Johor Baru, Kuantan, Kuching and Kota Kinabalu.

What to do?

The soft option, of course, is to keep approving new development and tacking on infrastructure as and when public interest raises its voice. The man in the street, inured to the daily grind, would not expect much more.

But 2020 is only one more property boom away. Maybe it’s time to raise our sights even higher, and envision exactly how we want our grandchildren to live.

And maybe do something about it?

·Christopher Boyd is executive chairman of Regroup Associates Sdn Bhd

By The Star (by Christopher Boyd)

Marriott plans 21 new hotels in Asia

HONG KONG: Hotel group Marriott International announced yesterday it was planning 21 new hotels in Asia, despite the impact of the global economic slowdown on travel and demand.

The company has 37 hotels under construction across the region, meaning that it will have built 58 new hotels by 2013, creating 24,000 jobs.

The 21 newly announced hotels include two luxury JW Marriott hotels in China, 10 Marriott hotels in China, the Philippines and Thailand, two Renaissance Hotels in China and seven Courtyard hotels in Cambodia, China and India.

By AFP

DNP profit forecast to leap on good project prospects

High-End property developer DNP Holdings Bhd, which could be rebranded into Wing Tai Malaysia in the near future, is poised for a quantum leap in profits.

For the year ended June 30 2009, DNP posted a net profit of RM14 million, but DBS Group Research forecast net profit could soar to RM114 million by the 2012 financial year.

For the year ending June 2010 and 2011, DBS forecast a net profit of RM51 million and RM78 million respecitively.

DNP is 54 per cent owned by Wing Tai Holding Ltd, a Singapore public-listed company which has created a niche reputation as one of the island state's top high-end residential developers.
DNP's second largest shareholder is former banker Chua Ma Yu, who owns 2.83 per cent of the company as at end-September last year.

The report said DNP has been marketing its KL high-end segment under the umbrella of Wing Tai Asia, to help ride on its parent's strong brand name.

"We do not discount the possibility of DNP being rebranded in the near future," Mei Hui Yee, an analyst with DBS wrote in a report initiating coverage on the residential developer with a price target of RM2.60 a share.

"We conservatively expect DNP's earnings to leapfrog by 3.7 times over the next three years. If all launches go ahead as planned, there could be a further 40 per cent upside to our earnings estimate," Mei wrote in the report.

DNP has about RM1.5 billion of upcoming high-end launches around Kuala Lumpur's Golden Triangle over the next few months.

Among its forthcoming launch is the Verticas Residensi at Bukit Ceylon, which has a gross development value (GDV) of RM726 million. The project comprises 423 condo units priced at a minimum of RM1.2 million a unit.

"We understand 64 per cent of the 70 units opened to registrants have been sold to date (within just one month) despite the price tag and ahead of management's expectations," Mei wrote in the report.

DNP is also expected to launch by year-end a high-end condominium project that comprises 25 units priced at RM3.5 million a unit. The condos have a built-up area of between 3,000-3,500 sq ft.

It is also expected to launch 197 units of luxury condos just opposite the Petronas Twin Towers by next year. The project is estimated to have a GDV of RM703 million.

By Business Times (by Francis Fernandez)

CIMB eyes property sale-and-leaseback

CIMB Group is eyeing sale-and-leaseback exercise for its properties, said group chief executive Datuk Seri Nazir Tun Razak.

"We are engaging a few potential buyers and they are financially, potential investors," he said.

According to Nazir, the transactions for all its buildings, especially CIMB branches and some other offices, would be completed by the fourth quarter of this year or the first quarter of 2010.

Early this year, the group had signed an agreement with Pelaburan Hartanah Bumiputera Bhd (PHBB) for the sale and leaseback of the new 630,000 sq ft 39-storey Menara Bumiputra Commerce.
The group is now the sole tenant of the building, he said.

"The transaction with PHBB was worth RM460 million. On top of that, we spent about RM80 million for internal refurbishments," he told reporters after the opening of the building by Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin today.

The Menara Bumiputra-Commerce, which cost RM400 million, was constructed by IJM Corp Bhd. It began in October 2004 and was completed early this year.

It will serve as the headquarters for commercial banking, franchises of CIMB Group, CIMB Bank and CIMB Islamic.

Nazir said the investment banking and capital market arm would be located in Menara CIMB, which was still under construction in Kuala Lumpur Sentral.

He said construction was expected to be completed in 2012.

Nazir said today also marked the completion of CIMB Group's multi-year branch re-branding exercise.

"South-East Asia's largest retail network of 1,150 branches across Malaysia, Indonesia, Singapore and Thailand have now all assumed the CIMB icon, its red and green colours and consistent branch look and feel," he said.

By Bernama

Houses with condo facilities

Those who are interested in landed property and like condominium facilities should head for the Mah Sing Properties’ booths during the three-day The Star Property Fair 2009, which kicks off at G Hotel and Gurney Plaza in Penang this Friday.

Luxury homes: Tan showing units of the SouthBay Residence comprising three-storey link houses equipped with condo facilities in Batu Maung Penang.

The developer will showcase its RM241mil SouthBay Residence project comprising 284 three-storey link houses that come with condo facilities such as a guardhouse, clubhouse and swimming pool in Batu Maung in Penang.

Its general manager Tan Hun Beng said the units were selling fast with only some 60 bumiputra lots left for purchase.

“We have applied for and conformed with all the requirements needed for the bumiputra lots to be released beginning of next year.

“Potential housebuyers who are interested will be placed on the waiting list with some 300 others,” he said, adding that 70% of the units were snapped up within two weeks after the official launching in May this year.

Tan said everything that was behind the guardhouse in the gated and guarded landed property was considered private owned, unlike certain landed property where the service roads or drains belong to the government.

“In other words, each of the 284 houseowners is actually a shareholder of the property.

“Besides, the availability of comprehensive clubhouse facilities and round-the-clock security are also plus points for this project,” he said, adding that each unit was priced from RM900,000 onwards with a built-up area of over 3,000 sq ft.

Construction work started in June and is scheduled for completion by end of next year.

The SouthBay Residence comes under the SouthBay project which comprises two other projects — SouthBay Legenda comprising 76 hillside bungalows and SouthBay City, a tourism development comprising hotels, a shopping complex, a themed restaurant, a food court, the Admiral Cheng Ho Memorial Hall and a sculpture garden.

Tan said the three projects, located a stone’s throw away from one another, sit on a 35ha piece of land which was bought in June 2007.

On the bungalows priced from RM3.5mil onwards, he said the 76 units with built-up areas ranging from 5,000 sq ft to 8,000 sq ft would be open for registration during the three-day fair.

“One of the unique features of SouthBay Legenda, comprising three and four storey resort bungalows, is that each unit is fitted with a lift and a private swimming pool,” he said.

By The Star

Great expectations

Exhibitors of The Star Property Fair 2009 attending a briefing at G Hotel.

The Star Property Fair 2009’s new venues at G Hotel and Gurney Plaza have been welcomed by exhibitors hoping for a bigger crowd.

Benar Prima Resources Sdn Bhd sales administration senior manager Lee Phoy Yeong said G Hotel should be a good venue to promote upmarket property as the hotel was linked to Gurney Plaza where the lifestyle section of the fair would be held.

“This is our first time at the new venue and we don’t know what the crowd will be like.

“The Star Property Fair is a good platform to sell our products,” he said, adding that the company had sold 90% of its Casa Prima lifestyle apartments in Seberang Jaya.

The Star Property Fair had been held at the Penang International Sports Arena since its inception in 2003.

SP Setia sales and marketing assistant manager Joanne Koay said the company had good expectations for the new venue.

“We recorded fairly good sales at last year’s fair,” she said.

Monier Sdn Bhd regional sales manager John Tan said this was the first year that the company would be taking part in the Star Property Fair, and expectations were high for the new venue.

“We expect G Hotel and Gurney Plaza to attract more medium and higher-end customers who are our target group,” he said.

More than 80 participants from about 70 companies recently attended a briefing on the set-up of the fair at the hotel, conducted by Star Publications (M) Bhd advertisement sales account executive Mike Ong.

Besides the usual briefing on bookings and deadline to set up and tear down the booths, the exhibitors were given specific details relating to the new venue such as electrical points, security and parking.

They were also given an introduction to The Star Property Portal, and taken on a familiarisation tour of the exhibition area.

By The Star (Posted on 8th September 2009)

Mines Excellence plans 5-star hotels in Bukit Beruntung

Founder Tan Sri Lee Kim Yew aims to turn Mines City into a world-class destination for golfing and for health tourism

Developer Mines Excellence Golf Resort Bhd will build three five-star hotels within its RM3 billion Mines Golf City development in Bukit Beruntung, Selangor over the next three to four years.

Founder Tan Sri Lee Kim Yew said it is looking to set up a boutique hotel, a wellness hotel with golden standards and a hotel for golfers for more than RM300 million.

Lee said he is also keen to establish a university designed for golfers and a health clinic and spa.

"My aim is to turn Mines City into a world-class destination for golfing and for health tourism," Lee told Business Times in an interview in Kuala Lumpur recently.
"I want to set up a few golf and wellness hotels in Malaysia and it would be ideal to have two in Mines City," he said.

Lee said he is ready to talk to boutique hotel and spa operators who are keen to set up shop at the golf resort.

The 840ha Mines City is being developed by Mines Golf City (MGC) Sdn Bhd, a 70:30 joint venture between Mines Excellence and Country Heights Holdings Bhd, in which, Lee, has a 48.1 per cent stake.

MGC will develop a 63-hole golf course on 320ha, which would be Malaysia's largest, and build townhouses, 500 bungalow lots, an equestrian and driving academy, schools, sports facilities, food outlets and parks on the remaining land.

Lee said construction on Mines City will commence in early 2010 after it gets approval from the local council to develop the golf course.

MGC has completed the piling work and signed up Swedish golfing superstar Annika Sorenstam to design the first 18 holes and South Korea's Se Ri Pak, the next round of 18-holes.

Lee said MGC is in talks with other golfing superstars to design the remaining 27-holes.

"There is a big business in golf. In the US, there are over 20,000 golf courses and more than 90 per cent are successful. There will be a big Japanese and European market for Malaysia going forward because of Sorenstam and Pak," Lee said.

Meanwhile, Lee, who was CHHB group managing director but relinquished his position last year to focus on golf, said there is scepticism from the market on whether he would finish developing Mines City.

"There is scepticism on whether I would be able to do it. A few years after I started Mines Resort City in Seri Kembangan, recession hit. People started talking. But I completed it in five years," Lee said.

Mines Resort City consists of seven components including Palace of the Golden Horses, Mines Wellness Hotel (previously Palace Beach & Spa) and Mines Waterfront Business Park, built from 1993 to 1998.

"MGC is free from encumbrances. If banks want to support the Mines City development, I am more than willing to talk to them. Right now, I am self-funding the project," said Lee.

By Business Times (by Sharen Kaur)

Hua Yang aims to be among top 10 players

Property developer Hua Yang Bhd aims to become one of the top 10 developers in Malaysia within five years by offering more residential and commercial properties.

"Currently, we are not even in the top 20 list. To be close to the top 10 list, you need to have RM300 million to RM500 million revenue annually. The big boys are way ahead, but nevertheless, it is our ambition to achieve the goal, hopefully in five years," said chief operating officer Ho Weng Yan in an interview with Business Times in Kuala Lumpur recently.

For its recent financial year ended March 31, the company's revenue grew by 67 per cent to RM100 million, while net profit rose 31 per cent to RM8.6 million.

It expects to perform better in the current financial year.

"It is highly likely to be a better year. So far, our products have received good response and we have a number of launches coming up. With consumer sentiment improving, we see the property market, especially properties for the middle-income group which we are focusing on, will continue to grow.
"Interest rates are low now and buyers are becoming more savvy these days. They know that interest rates will eventually go up. So, for them, they feel that this is the best time to buy properties now," he said.

Hua Yang plans to launch Phase Two of Symphony Heights sometime after Hari Raya, One South - a mixed development in Sg Besi worth RM540 million and spread over 6.7ha of land - in January next year, as well as a commercial development in Senawang and a residential development in Johor over the next 12 months.

It is also in talks with various land owners to expand its land bank. "We are always in talks. Normally, two to three pieces at the same time. We expect to seal one of the talks within the next 12 months," he said.

The company, which has projects in Johor, Perak and the Klang Valley, is also eyeing the Penang property market. "But, it is a very tough market. There's very little supply of land, especially on the island, and on the mainland, several big players have already established themselves there," he added.

The company, which has been established since 1978 or 31 years ago, started its business by building properties for the Perak market. In the 1980s, it decided to look beyond the home-base market.

"We tried a few small projects in Kuala Lumpur, but it was only in the 1990s that we did a big pro-ject outside Perak (Flagship project: Taman Pulai Indah in Johor). Last year, we entered the Klang Valley market in a big way with the launch of Symphony Heights," he added.

By Business Times (by Goh Thean Eu) (Posted on 8 Sept 2009)

'SunCity faces challenge in selling high-end units'

Property developer Sunway City Bhd (SunCity) faces a great challenge to sell a massive stock of RM1.2 billion houses, particularly the high-end projects in Mont Kiara and Bandar Sunway where sales have been slow, AmResearch says.

The group is aiming for RM330 million in residential sales this year but has so far achieved only RM130 million, the broker said.

The take-up rate for Bayrock South Quay in Bandar Sunway, which has 77 bungalows priced between RM4 million and RM7 million per unit, has stalled at 35 per cent since the soft launch in April last year.

Only about two-fifths of the Vivaldi project in Mont Kiara were sold, where there are 234 units priced at RM850 per sq ft.
"We understand from its management that the group is unlikely to bring prices down to speed up inventory liquidation," AmResearch said in a report yesterday to initiate coverage on the company.

Instead, SunCity plans to lure potential buyers with more attractive financial scheme for selected projects, such as no-interest payment during construction and no payment for up to 24 months, the report said.

AmResearch rates the shares of SunCity as a "hold", with a fair value of RM3.45. The stock appears "fairly valued" after its price more than doubled in March this year, the broker said.

SunCity fell 1.8 per cent to close at RM3.20 yesterday. The stock has risen 83 per cent this year, beating a 36 per cent rise in the FTSE Bursa Malaysia KLCI so far.

The primary catalyst for the shares continues to centre on SunCity's potential to cash out from its large portfolio of investment properties worth an estimated RM3 billion to RM4 billion via the set up of an real estate investment trust (REIT).

"We, however, are skeptical that the group can successfully launch a REIT given our concern over pricing and quality of assets to be injected," AmResearch said.

Aside from Sunway Pyramid shopping mall and Wisma Denmark, other assets that the group plans to sell into the property trust are not really suitable for a REIT, it pointed out.

Sunway Group had planned to float a REIT which holds its key assets that include office towers, retail malls, a hospital and university hostel by as early as 2007. The plan has been delayed so far, mainly due to unfavourable market conditions.

By Business Times (Posted on 8 Sept 2009)

BLand expects RM150m from Seputeh project

BERJAYA Land Bhd, a unit of Berjaya Corp Bhd, expects to rake in RM150 million in sales from its Vastana25 bungalow and villa boutique development in Taman Seputeh in Old Klang Road, Kuala Lumpur.

Vastana25, which has three bungalows and 22 link villas, is an exclusive enclave within the 16.5ha freehold low-density Seputeh Heights project.

Berjaya Land senior general manager for properties and marketing, Mah Siew Wan, said the company has started construction on Vastana25 and the properties will be ready by October next year.

The bungalows and villas are priced from RM5.5 million to RM8 million, with a built-up area of 5,743-7,665 sq ft and a private glass lift and pool each.

Mah told Business Times during a site visit recently that Berjaya Land has sold eight bungalows despite the economic slowdown, by word of mouth.

She said there will be a private viewing for the properties in December, where the company hopes to close sales for the remaining 17 units.

"People are buying into Vastana25 because of its location. Every unit offers an excellent view of the city and a lot of natural lighting, thanks to the glass features," Mah said.

On Seputeh Heights, Mah said that prices of properties built by land owners in Seputeh Heights have tripled since 1997.

Berjaya Land started Seputeh Heights in 1997, offering 103 bungalow lots, measuring 7,992 to 23,100 sq ft, for sale.

Ninety lots have been sold over the past 12 years at more than RM150 per sq ft.

Seputeh Heights also has four purpose-built bungalows, which were constructed by Berjaya Land and sold for more than RM5 million each.

"Seputeh Heights is one of our most exclusive developments and it would be impossible to replicate it. This is because land is scarce in prime locations and not many areas can offer a full view of the city," Mah said.

By Business Times (by Sharen Kaur)

11 new hotels by 2011

PETALING JAYA: The Klang Valley will see 11 new hotels by 2011 although some newly planned projects will be delayed due to the uncertain economic climate, property consultants said.

These hotels are mostly three- to five-star rated, comprising a mix of foreign and local brands.

Based on recent research, the hotel sector would have an additional 4,000 rooms upon the completion of these hotels, they said, without giving an estimated value of the projects involved.

Goh Tian Sui ... ‘The average hotel room rate in Malaysia is the cheapest in the region.’

CH Williams Talhar & Wong Sdn Bhd (WTW) managing director Goh Tian Sui said the new supply of hotel rooms in the next three to five years would not lead to an oversupply in the market as demand was still intact.

“More people will start travelling again when the global economy recovers. And later more foreign brand hotels will come in to expand their operations here,” he told StarBiz recently.

Goh said that coupled with more budget travel packages offered by airlines like AirAsia, more tourists would be visiting the country, thus boosting the domestic hotel business.

“Moreover, the average hotel room rate in Malaysia is the cheapest in the region,” he noted.

Although the hotel industry is currently doing not so well due to the Influenza A (H1N1) outbreak and global financial crisis, Goh sees a positive outlook for the hospitality industry.

There are currently 103 hotels (both foreign and local brands) with three- to five-star ratings in the Klang Valley, providing a total of 33,484 rooms.

According to WTW’s latest research, there will be an additional 297 rooms by year-end, 1,845 rooms in 2010, 992 rooms in 2011 and 553 rooms in 2012.

“Average occupancy rate in (upcoming) years will be around the current level of 60% to 70%, which is the historical average level,” Goh said.

Average room rates at present for hotels in Malaysia range between RM250 and RM600, according to Goh.

Zerin Properties chief executive officer Previndran Singhe said the company expected eight new 5-star hotels to be launched after 2011 in the Klang Valley, worth RM2bil to RM2.2bil.

Previn sees the Klang Valley needing more branded budget hotels in five years’ time.

“Budget hotel is set to be the next growth market in Asia,” he said, adding that many investors were taking positions in the Malaysian hotel sector as they realised that the country’s tourism industry was underrated.

Malathi Thevendran ... ‘New entries into the market should weigh the pros and cons first.’

International real estate consultant Jones Lang Wootton executive director Malathi Thevendran said the Klang Valley, the main economic centre of Malaysia, had consistently recorded the highest number of hotel guests in the country, increasing to 20.5 million in 2008 from 16.7 million guests in 2004.

“Although the opening of more four- and five-star hotels may heighten competition in the local hotel scene, they (especially the new brands) will enhance the global awareness of Kuala Lumpur/Klang Valley in totality as an international destination for leisure, culture and meeting,” she said.

But she noted that developers of four- and five-star hotels were cautiously monitoring the market to avoid any oversupply in the long term.

“Hence any new entries into the market should weigh the pros and cons prior to making inroads into the local market,” she added.

Malathi concurs with Previndran that budget accommodation is always good investment as budget-conscious business travellers downgrade to cheaper accommodation during these challenging times.

“Overall, the mid- to long-term outlook of the Klang Valley hospitality industry remains positive as it has received strong government support to grow further,” she said.

The 5-star Royale Chulan Kuala Lumpur, soft-launched in April, expects to achieve 55% occupancy rate by year-end.

Leo Kuscher ... ‘Hotel business is cyclical, so there will be demand.’

Its general manager Leo Kuscher told StarBiz that there appeared to be an oversupply of hotel rooms in the Klang Valley and the current market was very competitive, affecting hotel room yields.

“However, the hotel business is cyclical, so there will be demand,” he said.

Operated by Boustead Hotels & Resorts Sdn Bhd, The Royale hotel chain also has three 4-star hotels, namely The Royale Bintang Kuala Lumpur, The Royale Bintang Damansara and The Royale Bintang Resort & Spa Seremban.

The hotel operator plans to launch The Royale Bintang Penang and The Royale Bintang Suria-Damansara, with 300 rooms each, in the second quarter and end of 2010 respectively.

Meanwhile, TA Enterprise Bhd managing director and chief executive officer Datin Alicia Tiah said it was too soon to comment on its two hotel projects in Kuala Lumpur. TA said in an email reply that it had not started any hotel project in Malaysia.

“Construction of the new hotels will start next year and be ready only in four to five years,” the company told StarBiz.

By The Star (by Racheal Kam)

Reclamation project not under us, says developer

JOHOR BARU: The Lido Boulevard land reclamation project is under the purview of the Iskandar Regional Development Authority (IRDA) and its appointed contractors.

CMP, developer of the Lido Boulevard project, said it was not responsible for the land reclamation.

It was reported in a Bernama story in The Star on Wednesday that Pulai MP Datuk Nur Jazlan Mohamed had urged the state to order the Lido Boulevard developer to activate its environment management plan to prevent pollution.

CMP managing director Datuk Chan Tien Ghee said the company had carried out studies in line with the Government’s environmental standards.

“We have conducted all the relevant studies in line with Federal and state environmental standards.

“The Detailed Environment Impact Assessment Studies initiated in 2006 received approval in May last year while the Environmental Management Plan was approved in March this year,” he said.

He added that all approved measures would be in place before the company started work at the project site.

“We hope that complaints will be referred to the relevant parties responsible for the project,” he said.

By The Star

Tech park to attract RM2bil investments

Kulim Technology Park holding talks with three US companies

KULIM: Kulim Technology Park Corp Sdn Bhd (KTPC), the developer of Kulim Hi-Tech Park (KHTP), is negotiating with three US companies to bring in about RM2bil investments.

President of Kulim Technology ParkCorp, Muhamad Sobri Osman(inset), says KYPC has recently completed the RM1 billion business centre wing.

KTPC president Muhamad Sobri Osman said the companies were involved in the solar power, semi-conductor and pharmaceutical businesses.

“The solar power investment, likely to be around RM1.5bil, will be on a 75-acre site in phase three of the KHTP development.

“The phase, covering 432 acres, is over 90% complete in terms of infrastructure development,” he told StarBiz recently.

Sobri said he hoped the deals would be finalised in 12 months.

“The investment for the phase three infrastructure is around RM100mil,” he said, adding that KTPC was also in negotiation to bring in investment from a US company involved in nano-technology.

On the development of phase four of KHTP, Sobri said KTPC had recently secured a RM80mil soft loan from the Federal Government to lay high-technology and utilities infrastructure for the 450-acre site.

“We recently completed the RM11bil business centre wing, which has a built-up area of 75,000 sq ft.

“We are now bringing in tenants involved in business process outsourcing activities, research incubators and equipment support business,” he added.

In fulfilling its pledge to turn KHTP into the most successful high-technology park in the country, Sobri said the Federal Government had agreed to upgrade the present hospital so that it could handle hazardous chemical cases.

The Government had also given the green light to set up a police station and an industrial skills development centre.

Sobri said the capacity of the present 220MW power plant in KHTP, which is owned and managed by Northern Utility Resources, could be upgraded to 440MW.

“Thus, KHTP could cater to the needs of the new tenants without building another power facility.”

On housing for workers, Sobri said some 1,900 units of landed properties, priced between RM170,000 and RM220,000 each, were being developed.

“So far, about 1,900 units of landed and high-rise properties have been sold and occupied in KHTP,” he said.

By The Star (by David Tan)

Tradewinds, InterContinental terminate Mutiara contract

Plans to renovate and rebrand The Mutiara Beach Resort in Penang, which belongs to Tradewinds Corp Bhd (TCB), has been put off indefinitely.

The 20-year-old property, which has been closed for some 41 months now since 2006, was to be renovated and rebranded as an InterContinental Resort Penang.

TCB and InterContinental have now mutually terminated the management contract, its chief executive officer Shahrul Farez Hassan told Business Times.

"Both parties decided to terminate the contract early this year," he said.
However, he dismissed talks that it may sell the hotel located on a 4.05ha land in Jalan Teluk Bahang, Tanjung Bungah. He pointed out that the group plans to develop the hotel at a later stage.

"We are now relooking ... there are weaknesses in the market and we want to see when these weaknesses will abate," Shahrul added.

"Our strategy is to continue maintaining our hotel assets, especially in key areas," he said.

TCB, which owns eight other hotels in the country, is controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary.

A year ago, TCB chairman Tan Sri Megat Najmuddin Megat Khas said that it had scrapped its initial plans to halve the room inventory and build luxury residences at the hotel.

It had instead decided to have only hotel rooms, as otherwise the return on investment will not commensurate with the cost of building the property.

TCB had planned to reduce the inventory of the 438-room property to 220 rooms and include 80 units of luxury residences. The cost at the time was estimated at around RM100 million.

The residences were to be sold at around RM500 per sq ft and leased back. The hotel was supposed to reopen at the end of 2008.

The reopening date was then changed to mid-2009.

TCB's hotel portfolio includes Crowne Plaza Mutiara Kuala Lumpur, Hotel Istana, Hilton Petaling Jaya and Mutiara Johor Baru.

By Business Times (by Vasantha Ganesan)

Cash-rich AEON scraps REIT plan

Retailer and mall operator AEON Co (M) Bhd has scrapped its plan to set up a property trust, one of the company's options to raise funds, as it has enough cash to expand.

Managing director Nagahisa Oyama said it has enough money in its coffers to grow its business without having to raise funds.

"AEON has money to open two to three outlets each year ... so we do not need to do a REIT (real estate property trust)," Oyama told Business Times in an interview.

Companies with a lot of assets can form a REIT as a way to raise funds. Typically, they sell some of their assets to the REIT which in turn will raise funds from an initial public offering.
As at June 30 2009, AEON has RM33.3 million in cash. The group has also seen its net profit growing each year for the last five years. For the year ended December 31 2008, it made a net profit of RM120.6 million on revenue of RM3.43 billion.

AEON chairman Datuk Abdullah Mohd Yusof first announced that it was looking at a REIT as an option in April 2007.

However, in 2008 the company said that it was in no rush to set up the REIT as it thought the local property trust market was still in its infancy.

AEON continued to keep tabs on the industry and was also studying the REIT.

It identified seven properties valued at about RM700 million to be sold to the trust vehicle. Four of the properties are located in the Klang Valley namely Alpha Angle Shopping Centre in Kuala Lumpur, Jusco Metro Prima Shopping Centre in Kepong and Aeon Cheras Selatan Shopping Centre and Bukit Raja Shopping Centre in Klang.

Two outlets are in Johor - Jusco Taman University Shopping Centre and AEON Tebrau City Shopping Centre. The seventh outlet is Jusco Melaka Shopping Centre.

In 2008, its property management division made an operating profit of RM62.17 million and a revenue of RM308.86 million.

Today, it operates 25 outlets, four of which are MaxValu supermarkets. About 10 shopping centres, where the 21 Jusco department store-cum-supermarkets operate, are owned by AEON.

It will also own two of the three new confirmed store openings - the Mahkota Cheras and Bandar Permaisuri. It will lease the space in Bandaraya Melaka.

By Business Times (by Vasantha Ganesan)

Gamuda rises to a 3-week high

Gamuda Bhd, Malaysia’s second- biggest builder, rose to the highest level in three weeks after Maybank Investment Bank Bhd said the company may report a 52 per cent increase in net profit in the year ending July 2010, boosted by a strong order book.

The stock gained 1.6 per cent to RM3.18 at 10:14 a.m. in Kuala Lumpur, set for the highest level since Aug 14 and outpacing the FTSE Bursa Malaysia KLCI Index’s 0.4 per cent gain. Gamuda shares have surged 68 per cent this year.

It’s “sunny skies ahead,” Maybank Investment said in a report today. “We also expect major job wins in fiscal 2010.” Gamuda is Maybank’s top construction stock pick with a “buy” rating and a target price of RM3.80.

Profit at Gamuda is expected to rebound next year as the work pace on its RM8 billion (US$2.3 billion) of outstanding orders accelerates and profit margins at the new Doha International Airport project are restored, the report said.
The government may roll out as much as RM80 billion of construction contracts over the next few years, benefiting builders, CIMB Investment Bank Bhd said in a report on Sept 2.

The government has unveiled stimulus plans valued at RM67 billion in the past year to restore economic growth.

Gamuda is the only contractor vying for all three major infrastructure contracts that are now at various stages of “pre-award,” Maybank Investment said.

The projects are the Pahang-Selangor interstate water transfer project, the new Sepang low-cost carrier terminal, and the extension of the Klang Valley Light Rail Transit, the report said.

Gamuda’s profit for the year ending July 2010 may advance to RM281.6 million, Maybank Investment said. Net income may have shrunk 40 per cent to RM185.7 million in the year ended July from a year earlier, it said.

By Bloomberg

Asians’ yen for British properties

Caspian Wharf’s price ranges from £170,000 to £550,000.

Since February this year, more than half of the international buyers who have been scrutinising properties in London have been Asians, says a British developer who is here in Kuala Lumpur to promote its apartment project.

Berkeley Homes (Capital) plc operations director Pier Clanford says that while Europeans, especially the Italians, have historically been keen purchasers, he is increasingly seeing more Asians since the early part of this year. The Russians and the Middle Easterners are the other interested groups.

Piers Clanford ... ‘The entry level has been lowered quite a bit with the current downturn.’

Berkeley Homes is part of the Berkeley Group Holdings plc, one of the largest developers in Britain. Besides Berkeley Homes, the group also has the St James and St George groups in its stable.

Clanford says the group’s preference is for central London or southeast suburbs of the British capital.

“Asians are buying to take advantage of the drop in the property value and the cheaper British pound (RM5.70 to £1 compared with RM7 in September 2008),” he says.

Excluding central London, some areas have dropped by 25%, says Clanford. In cities like Manchester and Birmingham, the drop could be greater with slower recovery.

Since the beginning of this year, the group has been promoting its properties in Malaysia, Singapore and Hong Kong. Several of the projects were also marketed in India. Because of this interest on the part of Malaysians as seen in these earlier promotions since the downturn in 2008, the group will be bringing in more projects in the next several months to Kuala Lumpur. Previously, they only went to Hong Kong and Singapore.

Clanford says other projects include Imperial Wharf (SW6), Merchant Square by Paddington Station, Beaufort Park (NW9) and Royal Arsenal in Woolwich (SE18).

“We are trying to get our specifications and pricing right. What we have discovered over the months is Malaysians’ interest for 2-bedroom units of between 700 and 800 sq ft with the price band between £150,000 and £350,000,” he says.

“The entry level has been lowered quite a bit with the current downturn,” says Clanford. Besides gaining advantage from the cheaper pound and the drop in price value, the prices offered here are also lower than those in Britain.

(It is a lot more expensive for developers to promote the properties in Britain than it is in Asia. Also, as properties were sold at a certain price in London before the downturn, developers are unable to drop their prices. However, they have that option when they bring their projects here).

Clanford says Malaysians who opt for 2-bedroom units buy for their own use and for their children studying there.

Hong Kong buyers, who generally prefer one-bedroom units, have a higher appetite for risks while Singaporean buyers prefer 2- and 3-bedroom units, and go for more upmarket projects.

On the whole, the Asian buyers’ preference are for projects which are near the public transport system, universities and easy access to amenities like shops.

Caspian Wharf, the project being showcased here, comprises 550 units. Eighty-five units are put up for sale in the region. Prices range from £170,000 to £550,000.

Its second phase will be offered for sale in Kuala Lumpur in November. The project will be ready for the 2012 London Olympics.

International property consultants King Sturge who is accompanying Clanford on this Asian tour says London’s property market continues to be depressed compared with the Singapore and Australian markets.

James Talbot, a partner in the company’s residential investment and development consultancy section, says the Singapore market is driven by local consumption with some international investors while the Australian market is faring well.

“Britain’s property sector continues to be depressed, which is why we feel this is the time to buy. It is a discount of 40% to 45% if we compare the current prices today with the 2007 prices when the property market was at its peak. There is now more room for negotiation,” he says.

By The Star (by Thean Lee Cheng)

Targeting Malaysian buyers

Malaysians are generally quite a frugal lot and believe in saving for rainy days. That should explain why we have one of the highest savings rates in the world at 32% of gross national product.

There are in fact many rich Malaysians who are looking for quality properties to invest in. Malaysian buyers constitute one of the largest foreign buyers in Singapore; many do this with investment in mind or for having a holiday home.

That could be the reason why developers from overseas, including Australia and as far as Britain, are targeting Malaysian buyers and are showcasing their projects in Kuala Lumpur.

Berkeley Homes group, one of the largest developers in Britain, is a regular foreign developer with outings to Kuala Lumpur to woo our buyers.

Last month, its subsidiary, St George was in the city to promote Battersea Reach in the township of Battersea and Aquarius House, on St George Wharf in Vauxhall SW8, south of London.

Averaging £200,000 to £350,000 for a 800 sq ft apartment or around RM1,500 to RM2,600 per sq ft, these properties are not exactly cheap by Malaysian standards.

Although most of the buying activities are from parents who have children pursuing their education in Britain, there are also those who are frequent travellers and enjoy the lifestyle there.

Those still with spare cash to invest will be on the lookout for good property to buy in Malaysia and buying activities are expected to resume when there are clearer economic and market directions.

For now, the majority of buying activities are still by first-time home buyers and for medium-priced property, while buying for high-end property has been markedly decimated by the global financial crisis.

One of the reasons could be that many of the high net worth buyers are out on “bargain hunting expeditions” to pick up overseas properties that have eroded in prices.

It is about time developers come up with the right products to attract these high net worth buyers and some of the high-end products will likely make their way to the market next year.

The pro-active stance adopted by industry practitioners will ensure they have the right products to offer and they will go the extra mile to design and market them well.

In fact, the pace and quality of property development in the country will depend on other factors including the rate of population growth, people’s changing lifestyles and economic activities.

Although the residential property sector has been the main driver of the local property market in the past, commercial property has the potential to grow in importance, especially with the advent of real estate investment trust.

Malaysia has many promising services-related businesses that should be tapped and harnessed to generate a more positive impact on the real economy and real estate sector.

Among the sectors that easily come to mind are tourism, education, healthcare, retailing, food and beverage, and financial services.

These businesses will continue to grow in importance in the coming years and will contribute to more job creation and economic growth for the country.

Having a robust services sector will have a significant impact on the real estate sector, especially commercial real estates, which are still largely in the doldrums as a result of the global financial crisis.

Many cities around the world that have drawn big numbers of businessmen, investors and visitors to their shores mostly started out as successful business and financial hubs.

From Singapore and Hong Kong to London, Paris and New York, these global cities are renowned for their highly efficient and top-notch infrastructure as well as corporate and public governance.

All are international financial centres and have well developed services sectors and facilities.

With more concerted efforts to further develop Malaysia’s services sectors, hopefully more opportunities will emerge for the people in terms of business opportunities and employment.

Meanwhile, property industry players will also be able to partake in more quality developments for the enlarged sectors.

·Deputy news editor Angie Ng hopes industry players will introduce more vibrancy and refreshing designs to their post-crisis property projects, both residential and commercial.

By The Star (by Angie Ng)

Glomac eyes more land in Cyberjaya

Developer Glomac Bhd might buy more land in Cyberjaya, Selangor following the success of its RM180 million flagship Glomac Cyberjaya project.

The first phase of Glomac Cyberjaya, comprising 39 units of three-storey and three-and-a-half storey shop offices worth RM64 million or more than RM1.45 million each were launched in late July.

Group executive vice-chairman Datuk Richard Fong said 75 per cent of the units were sold within a week.

"We were caught by surprise. We did not expect sales to move so fast. It shows the market is improving and there is demand for shopoffices in Cyberjaya. We will buy more land in Cyberjaya if demand for the properties pick up," Fong said.
Glomac had acquired 3.3ha of freehold land to develop Glomac Cyberjaya from land owner, Cyberview Sdn Bhd, for RM21.24 million in January.

"We still have 24 units of three-and-a-half story shopoffices worth RM40 million to sell. We are launching the units this month and expect sales to move as quickly," he told Business Times.

The final phase for Glomac Cyberjaya will include a data centre and a 15-storey office tower, worth a combined RM75 million.

Fong said the two buildings will be launched in early 2010 and Glomac is looking for serious en bloc buyers.

"We have been approached by some parties but there is nothing on the table yet," Fong said.

Glomac Cyberjaya is strategically placed in Cyberjaya and its immediate corporate neighbours are bigwigs like HSBC, DHL and Ericsson.

By Business Times (by Sharen Kaur)

Mitrajaya buys property for RM28m

PETALING JAYA: Mitrajaya Holdings Bhd’s wholly-owned subsidiary, Mitrajaya Homes Sdn Bhd, has acquired a 99-year leasehold property in Petaling Jaya for RM28mil.

In a filing with Bursa Malaysia, the company said its subsidiary had entered into the sale and purchase agreement with Danaharta Urus Sdn Bhd for the acquisition.

It said the 405,108-sq-ft property’s existing use was for light industrial and was currently a vacant lot.

“The proposed future use would be for industrial and commercial development,” it said.

Mitrajaya Holdings said the acquisition would be satisfied fully in cash, to be financed by internal funds and borrowings.

“The acquisition will increase the group’s land bank for future development and it is estimated to be completed by the first quarter of 2010,” it added.

By The Star