REIT players hope for better year

PETALING JAYA: After two quiet years in the local real estate investment trust (REIT) market, industry players are hoping for a better year in 2010 through more active retail interest, asset expansion plans, and entry of new players.


"Since the global financial crisis, there has been a game change on the regulatory environment that is helping REITs"- MRMA PROTEM COMMITTEE CHAIRMAN STEWART LABROOY

According to Malaysian REIT Managers Association (MRMA) protem committee chairman Stewart LaBrooy, news of some existing REITs’ plans to grow their portfolios after a two -year hiatus is encouraging.

Quite a number of REITs have plans to expand their asset portfolio, with expansion by UOA REIT, AmanahRaya REIT and Al-Aqar REIT to involve new investments of RM1bil.

He said REITs would have better upside yields accretion potential if they had steady portfolio expansion through regular strategic asset acquisitions.

On whether raising enough funding for their asset expansion plans still posed a challenge to REITs, LaBrooy said: “Since the global financial crisis, there has been a game change on the regulatory environment that is helping REITs and capital markets cope with issues like faster capital raising and more self regulation.”

“Although under existing Securities Commission (SC) rules REITs can place out new units of only up to 20% of their unit base and it can be done only once every 12 months, the SC is prepared to grant specific approval to REITs to raise additional capital within 12 months on a case to case basis,” he told StarBiz.

It is possible that with the upcoming capital raising plans and new listings, there is potential for the market size to be increased to RM18bil from the current RM8bil.

LaBrooy said if the listing of a few more sizeable REITs took place by this year-end, it would further add to the depth and liquidity of the market.

The upcoming REITs include the Sunway REIT which is estimated to have asset value of around RM4bil and Malaysia’s first cross-border REIT, the RM1bil Qatar REIT.

“The coming onstream of these new players will inject a lot of liquidity into the market. This will create more excitement in the REIT sector in terms of size and asset class diversification and should place REITs on the radar of more local retail investors and larger foreign funds,” added LaBrooy, who is also Axis REIT Managers Bhd chief executive officer.

Currently, retail investors only account for 10% to 15% of the total REITs’ market capitalisation of close to RM6bil. The biggest portion comes from institutional investors who account for close to 60% and REITs promoters at 25%,

To promote greater trading interest and volume for REITs, the target is to raise the retail portion to 40% of the market capitalisation.

“With the huge liquidity in the local system now, there is huge potential to expand the retail interest for REITs,” LaBrooy said.

He added that retail investors were generally ill informed of the benefits of investing in REITs. “Investor education is essential and as a result the MRMA, has undertaken to conduct an investor outreach programme. So far we have conducted public roadshows in Penang, Ipoh, Klang Valley and Malacca. Our next roadshow will be held in Kuching on May 8.”

LaBrooy said to make REITs more popular with the retail investor, there was a need for more liberalisation on the regulatory front and the removal of the withholding tax for individuals.

Currently, both local and foreign retail investors have to pay 10% witholding tax to the Government.

He said the recently established MRMA, with nine out of the 11 REIT managers as members, would engage the regulators to overhaul the prevailing regulations and speak as an industry body on tax issues affecting REITs in time for the 2011 budget.

On challenges ahead, LaBrooy said: “The biggest challenge for local REITs is to reach a size of US$500mil and grow beyond this. This is the minimum requirement if we are to attract foreign funds to our market and has to be an aggressive strategy for each manager.

“To achieve this, the REITs have to have four conditions in place – stock price that trades at a premium to net asset value (NAV), so that capital can be raised in a non- dilutive manner; an identifiable pipeline of new assets to acquire; market yield that is achievable at the time of acquisition; and a recovery in the bond market so that new sources of financing can be obtained without reliance on bank lending,” he pointed out.

By The Star (by Angie Ng)

Malaysia's building sector on the right track

The Construction Industry Development Board (CIDB) is optimistic that the country's construction industry will achieve world-class status by 2015.

Its chief executive officer Datuk Hamzah Hasan said based on the Construction Industry Master Plan 2006-2015, the sector is on track to reach its target.

The growing number of Malaysian companies embarking on projects overseas over the last two decades provides a further boost to this.

Majority of the projects are in the Middle East and North Africa, mainly in Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Libya.
The Middle East is the largest market where 51 projects worth some RM30 billion are ongoing.

"This is more than India where we have 23 ongoing projects valued around RM7 billion and 22 projects in Asean worth RM5.7 billion. The numbers are increasing," Hamzah told Business Times.

"We have been instilling confidence among our construction players that they are at par with or even better than their counterparts internationally. This has made them more willing to venture overseas.

"The challenge overseas is to maintain the competitive advantage over time. This is because any competitive advantage as a result of cost, better work process and easy access to funds is easily overtaken by the locals," Hamzah said.

Master Builders Association Malaysia president Ng Kee Leen said issues affecting local construction firms overseas are track record and funding.

"There are not many mega projects in Malaysia for the companies to build a track record so they embark on overseas projects in a joint venture with the locals to build their portfolio," Ng said.

"When you have another partner, it is very tough. It will be good if Malaysian firms can bid alone for projects overseas," he added.

Ng said funding was an issue because banks in Malaysia were not willing to support the contractors as they were sceptical about overseas projects.

"We hope Malaysian banks will set up branches in the Middle East and North Africa to support our contractors." he said.

By Business Times (by Sharen Kaur)

CDL, Starwood team up for luxury project

SINGAPORE'S City Development Ltd (CDL) and Starwood Hotels & Resorts Worldwide have teamed up to open The Residences at W Singapore Sentosa Cove, which will be sold at S$2,500 to S$300 (RM5,825 to RM699) per sq ft.

Scheduled to be ready in 2012, the project comprises 228 private luxury residences starting from two-bedroom units measuring 1,227 sq ft to penthouses measuring 6,297 sq ft.

This translates into the smallest unit costing between S$3.07 million and S$3.68 million (RM7.15 million and RM8.57 million), and the penthouse from S$15.74 million to S$18.89 million (RM36.67 million to RM44.01 million).

During the launch of the project in Singapore recently, CDL managing director Kwek Leng Joo said he expects the project to attract many investors although there are other residential developments within the cove.
He attributed this to The Residences at W Singapore Sentosa Cove being the only integrated project in Sentosa. It will also have a hotel and retail component.

Asked about the likelihood of Malaysian investors buying the property, Kwek said: "For Singapore, Malaysia has always been a traditional source of buyers and vice versa. I will be surprised if not a single Malaysian buys the property."

The residences will be ready in 2012, and slightly before the hotel and retail portions.

A 240-room marina hotel, operated by W, is said to be the first of such in Singapore while the retail component, focusing on food & beverage and lifestyle products will have a gross area of 86,000 sq ft.

Although Kwek was unable to reveal the construction cost of the developments, he said that it expects the return on investments (ROI) for the hotel portion to take less than seven years.

In 2006, Sentosa Cove was awarded the marina Quayside site, which is collectively called The Quayside Collection. CDL paid S$255 million (RM594.15 million) for the land only, which has a 99-year tenure beginning October 1 2006.

The Residences at W Singapore is conceptualised by architectural firm Wimberly Allison Tong & Goo. It comprises seven six-storey blocks with attic and one basement car park.

The entire site with an area of 250,407 sq ft will have 42 two-bedroom units measuring 1,227 to 1,292 sq ft, 86 three-bedroom units (from 1,625 to 2,626 sq ft), 66 four-bedroom units (2,067 to 2486 sq ft ) and 34 units of penthouse (2,217 to 6,297 sq ft).

By Business Times (by Vasantha Ganesan)

Cyberjaya to be fully developed in 15 years

Setia Haruman Sdn Bhd, the master developer of Cyberjaya, is targeting to fully develop the city within 15 years, says chief operating officer Lao Chok Keang.

In an exclusive interview with StarBizWeek, Lao says currently about 35% of 3,705 acres of saleable land has been taken up.

“Land use for enterprise consists about 1,181 acres, commercial 352 acres, mixed development 290 acres, residential 1,564 acres, institutions 308 acres while light industry is about 10 acres. With better accessibility nowadays to Cyberjaya, I think we can see the full development of Cyberjaya within 15 years,” he says.


Lao Chok Keang says the role of the company is to undertake all aspects of Cyberjaya’s development.

Setia Haruman has been entrusted with the role to plan, design and prepare the primary infrastructure for the Cyberjaya Flagship Zone.

The area covers 7,129 acres of freehold land consisting of four main zones known as enterprise, commercial, institutional and residential. Each zone is fully equipped with a host of intelligent network services and interactive broadband services.

Since its launch in 1997 and some RM2bil in investments, Setia Haruman has successfully developed Cyberjaya as the country’s intelligent city. Cyberjaya has also taken shape to become an eco-friendly city with lush landscape gardens and streetscapes.

The city is fully equipped with wireless interactive city broadband services, fibre-optic networks and the latest technologies in information technology infrastructure and facilities.

Development in Cyberjaya has gained momentum since late last year, Lao says, citing the price increase of commercial land, which has risen to RM120 per sq ft from RM100 per sq ft.

“Despite the slight increase, the land here is still cheaper compared with the Kuala Lumpur City Centre area. Apart from large developers such as Mah Sing Group Bhd and Glomac Bhd launching new projects here, we are also in talks with five parties that are keen to acquire land in Cyberjaya for development. Three of them are public listed companies,” he says.

Lao says the role of the company is to undertake all aspects of Cyberjaya’s development, including planning and designing, providing basic infrastructure, marketing and selling of land parcels and other real estate developments.

“Setia Haruman offers assistance to Multimedia Super Corridor status companies in obtaining the right land and approvals for sub-division and building plans,” he says, adding that more than 50 buildings with 5.8 million sq ft of office space has been completed for leading companies such as HSBC, Shell, DHL and Motorola.

“Other major ongoing developments include HP campus (600,000 sq ft) and the Inland Revenue Department headquarters (600,000 sq ft) at enterprise zone, Garden Residences by Mah Sing at residential zone and also Glomac Cyberjaya (220,000 sq ft) at mixed development zone,” he says.

Lao says the company has built and sold over 3,000 units of residential homes that include 200 high-end properties.

Some of the new commercial developments include the CBD Perdana 2, comprising 256 units of four- and five-storey shop houses with a total gross development value of RM210mil.

“Setia Haruman is also working with UEM Land Bhd to develop a mix development project on a 100 acre plot at Perdana Lake View West. When the development of Cyberjaya is fully completed, there will be a total of 42,000 units of residential houses in the city,” he says.

On land sales figures, Lao says the company registered about RM500mil last year. This year the company is targeting about RM600mil based on increasing demand from buyers and investors.

By The Star

Timely opportunity to liven up the city

The Government’s plan to tender some of its land in Kuala Lumpur for development by the private sector must be one of the most awaited news by property industry players as sizeable land has become scarce in the capital city.

Given that most of these parcels are located in prime locations and offer good potential to be redeveloped further add to the excitement.

Probably the most sought after land includes the 50 acres at Jalan Cochrane worth some RM2bil and the 20-30 acres in Ampang Hilir near Kuala Lumpur city centre.

There are other smaller parcels in Jalan Stonor, Brickfields and Bukit Ledang (off Jalan Duta).

This should be the best opportunity to undertake a thorough study on some of the interesting and necessary projects that will further add value to the people and liven up the city.

Although there are a number of ongoing residential developments in the city, most of them are high-end residences that are out of reach of the middle income bracket.

What is lacking is good and well planned projects that have smaller built-up and are priced more affordably to cater to a broader range of buyers.

Projects worth looking into include small office home office to cater to small business start ups, apartments from 1,000 sq ft to 2,000 sq ft and family lifestyle facilities.

Most cities around the world have beautiful parks and a number of structures dedicated to promote art and culture. Kuala Lumpur can benefit from these types of projects.

It is necessary to draw up a well thought out master plan that spells out the broad development plans and concepts for the government land i.e. whether projects should be residential or commercial, the property types and price range.

Adopting an open tender process to identify the best developers for the land will be ideal as it will attract higher quality proposals from calibre developers.

It will facilitate greater participation from industry players with the right track record and expertise to add value to the land.

It will also be in compliance with the Treasury’s rule which requires all projects worth more than RM500,000 to be subject to open tender.

Ultimately, there will be more well-planned developments and higher revenue for the Government, which will benefit all Malaysians and the country.

The Government’s plan to form a joint venture with the Employees Provident Fund to promote the development of 3,000 acres of Rubber Research Institute of Malaysia land in Sungei Buloh will also be followed closely.

All the necessary components should be holistically and carefully thought out to ensure it becomes a model township not only for the Klang Valley but the whole country.

As Sungei Buloh is well known for its road congestion, the relevant authorities must come up with proper traffic planning.

There should be designated areas for the right types of residential and commercial properties, well linked and highly efficient public transport infrastructure and sufficient public facilities.

Deputy news editor Angie Ng hopes this timely opportunity to raise the quality of the living environment will not be wasted.

By The Star (by Angie Ng)

Sime plans green township

KUALA LUMPUR: Sime Darby Property Bhd aimed to be the industry leader by introducing a new system of property development that supports carbon neutrality using renewable energy and recycled materials, said managing director Datuk Tunku Putra Badlishah.


Datuk Tunku Putra Badlishah at the signing ceremony.

“We hope to revolutionise the local market with the introduction of Sime Darby Idea House project, a carbon-neutral concept dwelling that shows how sustainable housing can be developed to minimise mankind’s impact on the environment and the depleting natural resources,” he said.

Tunku Putra said this yesterday at the signing of technical collaborative agreements between Sime Darby and some of the world’s leading green technology and solutions providers.

The tie-up brought together 16 companies that offer the best innovation, solutions and technologies available in their respective fields to improve energy efficiency in homes and reduce the consumption-limited resources.

Tunku Putra said a common house needed 18 to 22 months for completion but the Sime Darby Idea House project took only six months, using modern methods of construction (pre-fabrication and modularisation).

“This will reduce the time of construction and, at the same time, reduce the financial and resource burden,” he said, adding that the project, located at Denai Alam along Guthrie Corridor Expressway, would be open to the public early next month.

Tunku Putra said the prototype house would be rolled out for future property developments but the timeframe would depend on public demand.

“It may be costly to have that kind of house but in the long term, it will save you money as you are using renewable energy,” he said.

By The Star

Sime Darby Idea House set to be the first carbon-neutral residence in Southeast Asia

The Sime Darby Idea House. Clockwise from left: Aerial view, front view, back view

Sime Darby signed technical collaboration agreements with some of the world's leading green technology and solutions providers for its Sime Darby Idea House project on April 1.

The Sime Darby Idea House is a carbon-neutral concept dwelling to show how sustainable housing can be developed to minimise mankind’s impact on the now fragile environmental and depleting resources.


Sime Darby Property managing director Dato' Tunku Putra Badlishah (front row, fifth from left) and the 16 other partners

At the signing ceremony, Sime Darby Property was represented by its managing director Datuk Tunku Putra Badlishah, while its 16 partners to the signing include Cisco, Mesiniaga, Shimizu, Home Research Pte Ltd, MEGAMAN Electronic & Lighting Sdn Bhd, Hunter Douglas (M) Sdn Bhd, Saint-Gobain Construction Products (Malaysia) Sdn. Bhd, Myhomepalm Integrated Sdn Bhd, Nippon-Paint (M) Sdn Bhd, MyZwood Sdn Bhd, Hewlett-Packard (M) Sdn. Bhd, SmartPools Sdn Bhd, Thinkscape Group, Jardine Engineering (Singapore) Pte Ltd, Jurusanwa Enterprise Sdn Bhd, W.Atelier Sdn Bhd and Melco Sales (M) Sdn Bhd.

“The first-of-its-kind in Southeast Asia, the Sime Darby Idea House was conceived as a test bed for new ideas in sustainable architecture, from which Sime Darby Property hope to incorporate the learning and technologies from this house into future development in our townships as part of our commitment to build sustainable communities," said Tunku Putra.

The Sime Darby Idea House is one of the two pilot projects for Green Building Index (GBI) certification in the residential category. “GBI is very pleased to be associated with Sime Darby and we fully support its Idea House project,” said Dr Tan Loke Mun, Chairman of the LAM/PAM Green Building and Sustainable Committee.


Cisco Systems (Malaysia) Sdn Bhd managing director Anne Abraham said, “Cisco is honoured to work with Sime Darby Property to transform the way cities and communities are developed, achieving economic, social and environmental sustainability and changing the way people work, live, play and learn in Malaysia.”

“Mesiniaga is pleased to play a key role in implementing Cisco’s Smart & Connected Communities technologies for Sime Darby’s Idea House. The benefits will take the shape of enhanced security, better energy and resource management, and a variety of community services that were once the realm of science fiction,” said Mesiniaga managing director Fathil Ismail.

Some of the green building technologies that will be incorporated into the Sime Darby Idea House are 100% recyclable roof system, rainwater harvesting system, FSC (Forest Stewardship Council) certified timber products, certified energy efficient appliances, CFL (Compact Fluorescent Lamp) and LED (Light-Emitting Diode) lighting system, environmentally-friendly light bulbs, solar panels and 100% recyclable kitchen cabinets, among others.

Taking into consideration the needs of Malaysian demographic and the expansion and contraction of the family nucleus, the Sime Darby Idea House has been designed with void spaces that can be filled to create further living or sleeping spaces as the family expands, or can be removed in the future as the children grow up and leave home. The promotion of clean renewable energies in the scheme also mitigates the reliance on artificial or mechanical means of lighting and cooling, thus saving on energy bills.

The Sime Darby Idea House is still under construction, but was already a winner in the Environmental Category in the Cityscape Awards 2009 in Dubai. It is hoped that the collaboration between the partners will forge the creation of what will be a benchmark in sustainable design and a precedent for Malaysian lifestyle living for the 21st century.

By The Star

Buy property stocks, says RHB

Investors should buy Malaysian developer stocks such as IJM Land Bhd, Sunway City Bhd and Mah Sing Group Bhd because of rebounding demand and improved margins, according to RHB Research Institute Sdn Bhd.

Property sales have seen “continuous strong take-up” despite last month’s rise in interest rates, RHB analyst Joshua Ng said in a report today. “This confirms our bullish view on the sector,” he said.

Malaysia’s central bank raised interest rates for the first time in almost four years on March 4 after Southeast Asia’s third-largest economy emerged from its first recession in a decade in the last quarter. The country may expand by between 4.5 per cent and 5.5 per cent this year after shrinking 1.7 per cent in 2009, Bank Negara Malaysia said in its annual report on March 24.

IJM Land, Malaysia’s second-biggest property group by sales, rose 2.1 per cent to RM2.44 at 11:11 a.m. local time, set for its highest close since Oct 23. Mah Sing added 2.6 per cent to RM1.98, while Sunway was unchanged at RM3.33.

SP Setia Bhd, Malaysia’s largest property developer, raised its 2010 financial year sales target by 25 per cent to RM2 billion on March 3 to reflect higher demand for its properties.

The company is “on track” to achieve this, it said in a statement on March 31. Sales reached RM900 million as of March 22, less than five months into its current financial year ending October 31, it said. SP Setia rose 1 per cent to RM4.17 at 11:11 a.m.

“As the economy is back on the recovery path, developers’ confidence is getting stronger,” Ng said in the report. “This can be seen in their aggressive launching and land acquisition plans.”

By Bloomberg

New York property market bouncing back

The New York housing market seems to have a new spring in its step after months of crisis with sales doubling in the first three months of 2010 compared to this time last year, data showed Friday.

In the first quarter of the year the number of apartments sold in the city rose by 99.5 percent, according to figures from the Prudential Elliman real estate agency.

But despite the rising numbers of sales, prices remain relatively low compared with the boom years before the US housing market collapsed, according to two other agencies Corcoran and Halstead.

The "Big Apple" has some of highest real estate prices in the world.Currently an average Manhattan apartment costs around 820,000 dollars, or about 10,000 dollars per square meter, about 10 percent less than a year ago.

Even if the United States seems to be climbing out of the economic crisis which has paralyzed the property market since 2008, experts remained wary.

"The market is definitely recovering, with stabilized prices and a spring sales boom, but this is not yet the big turn. I am cautious," Douglas Elliman, executive vice president of Ariel Cohen, told AFP.

"We have a lot of foreign buyers, including Asian and European, because of the strong euro.

"The property market is also being bouyed by recent rises on Wall Street and the current low interest rates on mortgage loans offered by banks.

By AFP

SP Setia eyes govt land

SP SETIA Bhd, the country's largest property developer by sales, is keen on taking on the government land recently identified to be developed by the private sector, its chief says.



Prime Minister Datuk Seri Najib Razak on Tuesday announced that several parcels of land in Jalan Stonor, Jalan Ampang and Jalan Lidcol in Kuala Lumpur would be tendered out and developed by the private sector.

"Yes, we're definitely interested in those pieces of land. But, like all developers, we have to wait for them to tell us the detailed policy, the tender procedures and so forth," the group's president and chief executive officer Tan Sri Liew Kee Sin said on the sidelines of Invest Malaysia 2010 yesterday.

He said the group will be "more than happy" to tender for the project on its own or work as a joint venture with government-linked companies.
"We want more landbank because we seem to be selling faster than we can get landbank."

SP Setia's sales for the current financial year ending October 30 2010 has been robust amid the improving property market, and the group foresees no problems achieving a sales target of RM2 billion.

As at March 22, less than five months into the financial year, its sales had already reached RM900 million. This is almost double sales in the same period a year ago, Liew said.

He said the property market remains strong on the whole and can probably take up to a 200-basis-point hike from where current morgage rates stand.

Meanwhile, the group is still awaiting aprovals to launch its "green" mixed development project opposite Mid Valley Megamall in Kuala Lumpur.

By Business Times

Strong demand boosts SP Setia sales

KUALA LUMPUR: SP Setia Bhd sales hit RM900mil in under five months in the current financial year ending Oct 31.

President and chief executive officer Tan Sri Liew Kee Sin attributed the performance to the strong underlying demand for good properties, fuelled by an increasingly confident business and consumer sentiment as well as highly supportive financial sector.

“This achievement clearly shows we are on track to meet the sales target of RM2bil for the financial year,” he said at the sidelines of Invest Malaysia 2010.

For the first quarter ended Jan 31, SP Setia posted a net profit of RM38.2mil on revenue of RM363.9mil.

“We’ll be the first Malaysian property company to hit RM2bil sales. We’re trying to push the limit higher,” Liew said, adding that sales were recognised only when the sales-and-purchase agreement was signed.

He also said its sales were cyclical and the second-quarter performance may not be as “fast” (good).

To a question, he said he expected an increase in mortgage rates this year.

Meanwhile, Liew said the company was keen to bid for the parcels of government land that would be tendered out for development by the private sector as announced by Prime Minister Datuk Seri Mohd Najib Tun Razak.

He said the company was interested in pursuing such opportunities along with other strategic collaborations with government-linked or government holding companies.

“We welcome the Government’s move to monetise government assets via outright sales or joint ventures,” Liew said.

On the industry outlook, he said: “Malaysia’s property market is sound and resilient.”

He said prospects and opportunities for quality developers were plentiful and would only get better, as income levels rose and good landbank released for sustainable environment development.

Meanwhile, Bloomberg reported that SP Setia planned a real estate project with a gross development value of RM1.4bil in Australia.

It will be on 1.07 acres of land in Melbourne which SP Setia agreed to buy for A$30mil on Monday.

The company expected to build about 850 apartment units and some retail shops there, Liew Kee Sin said in an interview.

By The Star

Hua Yang to launch RM45m Senawang Link

Main board listed property development company Hua Yang Bhd, will launch the Senawang Link, an integrated commercial and industrial development project, in Seremban.

Located on a 11.2 hectare site, it has a gross development value (GDV) of RM45 million.

Construction will begin this month on the Senawang Link, which comprises shop offices, semi-detached factories and industrial lots, the company said in a statement today.

"We have earmarked the Senawang Link as an industrial hotspot, especially for those keen to operate strategically located factories, priced from RM251,000 onwards," said its chief operating officer, Ho Wen Yan.
Strategically located along the main road of Jalan Tampin, the Senawang Link is also just next to the upcoming KTM Sungai Gadut Station, which is expected to be completed by 2010.

Meanwhile, the Senawang Link is part of the RM1 billion worth of development, earmarked by Hua Yang, for this year.

Among the others are One South, a mixed development project with a GDV of RM750 million in Sungai Besi, the RM45 million Seremban Country Heights development, the RM28 million Polo Park exclusive residential area in Johor Bahru as well as the RM200 million Symphony Heights Serviced Apartments venture in Selayang.

By Bernama

MRCB keen to develop land in Sg Buloh: CEO

Construction and property group Malaysian Resources Corp Bhd (MRCB), which is building up a war chest for land purchases, is keen to participate in the development of a large area of land in Sungei Buloh, its chief said.

MRCB's controlling shareholder, the Employees Provident Fund (EPF) and the government will be forming a joint venture to promote the development of 1,214ha there into a new hub for the Klang Valley.

Prime Minister Datuk Seri Najib Razak, in announcing the joint venture on Tuesday, said it would lead to over RM5 billion of new investments being made, with the private sector having enormous potential to participate prominently.

"It is our task now to convince EPF to give us some work on the land.
We'd like to participate in the development itself, a part of it, and also provide construction expertise and project management expertise for EPF," MRCB's chief executive officer Mohamed Razeek Hussain told reporters yesterday on the sidelines of the Invest Malaysia conference.

MRCB's stock gained 3.8 per cent to RM1.65 yesterday, as investors bet that the company would be a beneficiary of this project. It was the fourth most actively traded counter.

The company is also looking to buy more premium land in Kuala Lumpur and this is partly why it recently undertook a rights issue to raise up to RM566 million, Mohamed Razeek said.

"The war chest for acquisitions alone is about RM380 million," he said.

The company currently has 1,618ha in Perak and another roughly 6 million sq ft of gross floor area to develop at its flagship development Kuala Lumpur Sentral, he said.

The EPF, which now owns more than 33 per cent of MRCB after the renounceable rights issue, recently made a general offer to buy the rest of the company's shares at RM1.50 each.

The exercise is expected to conclude on April 13.

By Business Times

YTL confident of higher earnings

DIVERSIFIED group YTL Corp Bhd is optimistic of better years ahead, helped by the recovery of the property market, its wireless broadband business, as well as its other businesses.

"For the full year results (ending June 30 2010), the absolute sum will be double that of our first-half numbers," said group managing director Tan Sri Francis Yeoh on the sidelines of Invest Malaysia in Kuala Lumpur yesterday.



"For the next financial year, it looks like it's getting better and better, driven by various factors ... WiMAX, property ... everything is moving," he added.

YTL Corp posted a net profit of RM423.7 million on revenue of RM7.9 billion for the first half ended December 31 2009.
It also plans to launch its wireless broadband services at the end of this year, which the group has committed to invest RM2.5 billion over the next five years.

Meanwhile, Yeoh said the group will use the US$350 million (RM1.1 billion) raised via a five-year exchangable bonds to build its war chest.

"We always make sure we have a war chest," he said, without giving details on what companies or sectors he is eyeing.

By Business Times

MRCB a 'potential beneficiary'

Malaysian Resources Corp (MRCB) is a “potential beneficiary” from a plan by the government and the Employees Provident Fund to form a venture to promote the development of 3,000 acres of land outside Kuala Lumpur, HwangDBS Vickers Research Sdn Bhd said in a report today.

The stock, controlled by the Employees Provident Fund, climbed 3.8 per cent to RM1.65 at 9.51 am Malaysia time, set for its highest close since March 7, 2008.

Meanwhile, chief executive officer Mohamed Razeek Hussain Mericar said Malaysian Resources wants to participate in the development of 3,000 acres of government land in Sungai Buloh, outside Kuala Lumpur.

The comment comes after Prime Minister Datuk Seri Najib Razak said yesterday that the government and the Employees Provident Fund, the biggest shareholder of Malaysian Resources, will form a joint venture to promote the development of the land.

By Bloomberg

GCH to open 2nd Giant hypermart in Sarawak

GCH Retail (Malaysia) Sdn Bhd, which operates the Giant, Guardian and Cold Storage outlets, has signed a 15-year tenancy deal with Naim Realty (Malaysia) Sdn Bhd to open its second hypermarket in Sarawak.

Naim Realty is a wholly-owned subsidiary of Naim Holdings Bhd.

The proposed Giant hypermarket located in Miri, will be completed by mid-July next year and is expected to create more than 200 jobs after it's opened.

"We have invested more than RM12 million in the Giant Permy Mall, a two-storey shopping mall with a gross floor area of 269,000 sq ft over 8.5 acres (3.44ha)," said GCH Retail chief operating officer Tom Herriott after the signing ceremony in Kuala Lumpur yesterday.
The event was witnessed by Miri City Council mayor Lawrence Y.S. Lai.

He said the hypermarket in Miri is the second after Sibu in Sarawak, which is slated to be operational by next year.

"We are also looking at building a third hypermarket in Kuching and are presently scouting for the right location," Herriott said.

The new hypermarket in Miri is located within Naim Realty's Bandar Baru Permyjaya development, which has a population of 50,000.

There are 121 Giant hypermarkets throughout Malaysia today.

By Business Times

SP Setia buys Melbourne land for RM90m

Its wholly-owned unit, Setia International, plans to develop a high-density inner city integrated residential and commercial project on the land

SP Setia Bhd, the country's biggest property developer in terms of sales, has bought a piece of land in Melbourne, Australia, for A$30 million (RM90 million).

Its wholly-owned subsidiary, Setia International Ltd, signed a deal yesterday to buy the 4,340 sq m land, held under several certificates of titles, from S.L. Nominees Pty Ltd and Jonquil Pty Ltd.

It plans to develop a high-density inner city integrated residential and commercial project on the land.

The deal was brokered by Savills Australia following a tender process.
According to Savills, there was strong interest from local and offshore buyers, but SP Setia offered the best combination of terms and corporate strength which the sellers were looking for.

The group plans to finance the purchase with internally generated funds and external borrowings.

"Barring unforeseen circumstances and subject to Australia's Foreign Investment Review Board approval, the proposed acquisition is expected to be completed in the financial year ending October 31 2010," SP Setia said in a filing to Bursa Malaysia yesterday.

The group targets to launch the project within 18 to 24 months of the date of acquisition.

"The land is strategically located in the central spine of Melbourne's central business district, between A'Beckett Street and Franklin Street and between Elizabeth and Queen Streets.

"The site is a short walk to Melbourne's central shopping centre and railway station, and is close to the Queen Victoria Market."

SP Setia said the close proximity of the site to several premier Australian universities and colleges will enable the group to monetise its Malaysian customer base, many of whom have sent their children to further their education in Melbourne and have invested, or are looking to invest, in properties there.

Based on the 2006 census published by the Australian Bureau of Statistics, it is estimated that 29,174 Malaysian-born individuals now live in Melbourne.

SP Setia declined to reveal the expected gross development value or profits, saying only that the project "will offer a development potential which is at least equal to that of a similar project in Kuala Lumpur".

"Along with international expansion, the group will also continue to focus on acquiring new landbank in Malaysia for growth and reinvestment, given the many opportunities which still exist at home," its president and chief executive officer Tan Sri Liew Kee Sin said in a statement.

By Business Times

Malaysia pushing for more Middle East construction projects

DUBAI: Malaysian contractors are currently working on 51 projects worth US$10bil in the Middle East and are eyeing for more amid a projected upswing in construction demand.

The majority of projects are in United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Oman, Syria, Iran, Jordan and Yemen, the Malaysia External Trade Development Corp (Matrade) said in a statement yesterday. In value terms, the Middle East contributed the highest share of 42% among the 614 overseas projects worth US$24bil in which Malaysian contractors have been involved from 1997 to 2009.


Datuk Noharuddin Nordin ... ‘Malaysian expertise in infrastructure building has been deployed in 73 projects across the Middle East.’

“Malaysian expertise in infrastructure building has been deployed in 73 projects across the Middle East, including landmark initiatives such as Burj Khalifa, Al Reem Island, Dubai Metro, Dubai Mall and Meydan Race Course,” Matrade chief executive officer Datuk Noharuddin Nordin said in the statement.

Construction companies in Malaysia foresee substantially improved demand from the Middle East as infrastructure outlay continued to top national budgets, it said.

Matrade cited a Business Monitor International study forecasting that the global construction industry could grow between 1% and more than 5% up to 2014.

The projected increase was on account of growth expectations in the Middle East, North Africa, China and India.

Matrade said Malaysian construction companies, which already have an international project portfolio of US$15bil, were aiming to lead the revival in key markets.

To seek further inroads in the Middle East, the Malaysian construction sector will attend the third Malaysia Services Exhibition (MSE) 2010 to be held at the Dubai International Convention and Exhibition Centre from April 13 to 15.

“The unique advantages we offer in terms of resources, skills, quality, cost and experience in mega projects give us a competitive edge over leading providers in the United States, Europe and other Asian countries,” Noharuddin said.

Organised by Matrade, MSE 2010 will showcase the world-class capabilities of Malaysian companies specialising in eight service clusters: professional services, oil and gas, construction, information and communications technology, healthcare, franchising, education and specialised training, and financial services.

The three-day exhibition will be attended by 150 establishments including 130 service providers, 12 professional associations and eight government agencies.

A major addition to Malaysia’s construction services portfolio at MSE 2010 will be environmentally friendly architecture and engineering.

By Bernama

MPC, Beijing Construction planning projects in Iskandar

PETALING JAYA: Malaysia Pacific Corp Bhd (MPC) and Beijing Construction Engineering Co Ltd are planning to undertake the construction and financing of two property projects in Iskandar Malaysia, Johor.

In a statement to Bursa Malaysia, MPC said its subsidiary LakeHill Resort Development Sdn Bhd and Beijing Construction had last Friday signed a letter of intent to evaluate the development and financing of Lakehill Resort City and Aptec City.

It said once Beijing Construction had evaluated the plans, the detailed terms and conditions of contract or contracts would be signed in the presence of both governments.

It added that Beijing Construction, which was one of the largest state enterprises of China, was among the largest construction and engineering companies in China where it had undertaken many major construction projects.

MPC said the letter of intent would map out the basis and the roles of the parties in pursuing the project, with a view to enabling Beijing Construction to hold discussions with third parties such as the Iskandar Regional Development Authority, Johor government and other relevant ministries.

By The Star

EPF to launch new housing loan scheme soon

KUALA LUMPUR: EPF contributors should hold off using the money in their Account II to buy a house until the new scheme which would enable them to obtain a higher housing loan is implemented.

Chief executive officer Tan Sri Azlan Zainol said while EPF was keen to launch the scheme as soon as possible it had to wait until the banks were ready to implement it.

“The banks are studying it. In principle, they are agreeable,” he told reporters at the International Social Security Association (ISSA) technical seminar here yesterday.

During the tabling of the Budget last October, Prime Minister Datuk Seri Najib Tun Razak had announced that the government would launch a scheme to enable EPF contributors to utilise current and future savings in Account II in January this year.

Najib said the scheme, which would enable EPF contributors to be eligible for higher financing to purchase higher value houses, was limited to a purchase of one house at any one time and subject to conditions stipulated by EPF.

During the tabling of the Budget, Najib had also announced the establishment of the 1Malaysia retirement savings scheme where, as an incentive, the Government would contribute 5%, subject to a maximum of RM60 per annum for every RM100 contribution in addition to the existing dividend paid by EPF.

This scheme is for the self-employed and those without fixed income such as taxi drivers, hawkers, farmers and fishermen, who retire without pensions or any form of EPF savings.

Azlan said the 1Malaysia retirement scheme had received encouraging response; it had recorded RM3.4mil in total savings from 8,000 contributors since its establishment on Jan 2.

Of them, 3,000 are self-employed traders.

While contributors can contribute a minimum of RM50 or a maximum of RM5,000 to the scheme monthly and may withdraw their savings upon attaining the age of 55, the Government’s contribution is only for five years.

By The Star

YTL to develop ‘prime real estate’ in Asia

YTL Corp, Malaysia’s biggest builder, plans to develop a “prime real estate” in Asia, Chief Executive Officer Tan Sri Francis Yeoh said in Kuala Lumpur today.

He also said it’s time to take a more “sizeable bite” in Japan’s property market.

By Bloomberg

Bolton inks land deal with Intrapuri

BOLTON Bhd yesterday entered into a deal with Intrapuri Sdn Bhd to acquire a piece of land in Jalan Peel, Kuala Lumpur, for RM39 million cash.

It will develop medium high-end service apartments on the 2.2ha property, with an estimated gross development value and gross development cost of RM280 million and RM220 million respectively.

Development of the property is expected to commence on completion of the proposed acquisition and after obtaining all the approvals from the relevant authorities, with an estimated development period of five years.

By Business Times

Bolton LYL buys land for RM39mil

PETALING JAYA: Bolton Bhd via subsidiary Bolton LYL Sdn Bhd has agreed to buy about 5.5 acres in Kuala Lumpur for RM39mil cash from Intrapuri Sdn Bhd.

It told Bursa Malaysia the proposed development of the land would consist of medium high-end service apartments with podium car parks and facilities with an estimated gross development value and gross development cost of RM280mil and RM220mil respectively.

It added that the development was expected to commence upon completion of the proposed acquisition and after obtaining all the approvals from the relevant authorities with an estimated development period of five years.

The development cost would be financed through internally generated funds and bank borrowings, it said.

By The Star

Partners to discuss Iskandar projects

MALAYSIA Pacific Corp Bhd has teamed up with Beijing Construction Engineering Co Ltd (BCEGC), one of China’s largest construction and engineering firms, to study the development and financing of the proposed Lakehill Resort City and Aptec City projects in Johor’s Iskandar Malaysia.

A letter of intent was signed last Friday, which allows BCEGC to proceed discussions with relevant third parties such as the Iskandar Regional Development Authority, the Johor state government and other relevant ministers.

By Business Times

Kuwait Finance House to step up investments in M’sia

PETALING JAYA: The ongoing due diligence audit at Kuwait Finance House (M) Bhd (KFH Malaysia) has not interfered with the bank’s aim to step up its investment portfolio in Malaysia.

A delegation from its parent company, led by Kuwait Finance House Group chief executive officer Mohammed Sulaiman Al Omar, recently met Prime Minister Datuk Seri Najib Razak and his deputy Tan Sri Muhyiddin Yassin to discuss the group’s intention for further investment in the country.

Specifically, the group is interested to spearhead the establishment of a world-renowned university in Medini Iskandar located in Iskandar Malaysia.


Jamelah Jamaluddin ... ‘The bank will always be guided by pragmatism and act according to the recommendations of the audit team.’

KFH Malaysia chief executive officer Jamelah Jamaluddin, who was appointed less than two months ago, said it was “business as usual” for the bank despite the ongoing due diligence audit.

She said the process was aimed at obtaining an accurate picture of certain transactions and contractual arrangements that had been undertaken over the years.

“This will facilitate a clear perspective of our operations and business to enable us to move forward,” she said in a statement yesterday.

Jamelah said some employees had taken leave to facilitate the exercise and internal re-organisation with the objective of strengthening the bank’s credit team and processes with the intention of improving asset quality.

“The bank will always be guided by pragmatism and act according to the recommendations of the audit team,” she said.

Following the ongoing due diligence audit, RAM Ratings placed the AA2/P1 financial institution ratings of the bank on negative rating watch on March 26.

This is because the audit heightened concerns on the potential for further deterioration in the bank’s asset quality and credit fundamentals.

RAM Ratings had a negative outlook on the financial institution ratings of KFH Malaysia last November, based on the deterioration in the financial metrics of both the bank and its parent.

RAM Ratings said pending comprehensive review, it would maintain close monitoring of the pertinent developments and reassess the ratings when more conclusive information was made available.

Jamelah said the bank also wanted to ensure that its employees were put in positions where their strengths would be fully utilised in line with its talent management strategies.

“We have a strong team in place and it is business as usual for the bank. In fact, we are stepping up our investments in Malaysia.

“Our capitalisation, which is equivalent to US$650mil provides us a strong footing for the bank to expand its portfolio,” she said.

In the same statement, Mohammed Sulaiman said KFH reaffirmed its commitment in its business strategy of fully taking advantage of the enormous opportunities in Malaysia and becoming a partner in Malaysia’s economic growth story.

“We are excited and keen on the country’s new economic model and remain positive on the outlook of Malaysia as it will be the platform for our expansion into the Asia-Pacific region.

“We want to play a vital role in the development of real estate projects in the Asia-Pacific region as well as the introduction of new Islamic financial products,” he said.

FH Group’s interest in the establishment of the university in Medini Iskandar is in line with its vision to have world-class educational institutions in adopting the university of the future concept there.

KFH Malaysia led a consortium to invest about US$329mil in Medini Iskandar via Medini Central Sdn Bhd in 2008.

By The Star

Lion plans more Parkson centres in Vietnam

HANOI: The Lion Group plans to open more Parkson shopping centres in Vietnam, to maintain the chain's development as well as expand their retail network, according to Vietnam news agency today.

Till today, the group manages 82 Parkson stores, with five in Vietnam, 42 in China and 35 stores in Malaysia.

Parkson is a popular department store company in Malaysia which offers items such as fashion, jewellery, cosmetics, furniture, electric goods and food.

Besides the Vietnamese and Chinese markets, Lion plans to enter the Cambodian and Indonesian and other Asean markets at the end of 2011.

By Bernama

KPJ Healthcare plans Asia expansion

KPJ Healthcare Bhd is looking into expanding its network aggressively in Asia beginning next year through acquisition, joint venture and management contract.

The destinations being considered were Indochina, India, Bangladesh, Pakistan and possibly Middle East, Managing Director Datin Paduka Siti Sa'diah Sheikh Bakir told reporters on the sidelines of Invest Malaysia 2010 Conference in Kuala Lumpur today.

"We have received a few offers from these countries and currently, KPJ is reassessing the offers. We hope to finalise them by end of this year to be able to kick off the plan next year onwards," she said.

KPJ presently owns 20 hospitals in Malaysia and two in Indonesia. It also manages two hospitals in Jeddah, Saudi Arabia.

For this year, Siti Sa'diah said, KPJ would only focus on domestic expansion and was in the midst of building two hospitals in Klang and Muar.

On the Al-Aqar KPJ Real Estate Investment Trust (REITs), she said KPJ hoped to complete the exercise of injecting three other hospital buildings (one in Indonesia and two in Malaysia) into REITs by June this year.

The company was waiting for the approval from the relevant authorities.

"This exercise creates more opportunities to acquire more hospital buildings, in particular in Indonesia, for further REIT injection," she said.

To date, KPJ has injected 18 hospitals and a nursing college building into REITs.

Meanwhile, she said KPJ had allocated about RM100 million to expand its existing hospitals and to upgrade facilities in Malaysia.

With the increasing demand for private healthcare services and its expansion plans locally and abroad, KPJ is confident to achieve a revenue of RM2 billion by 2012.

Currently, KPJ’s market capitalisation is RM1.5 billion and hopes to increase it to RM2 billion.

By Bernama

Developers have strong presence in Johor

JOHOR BARU: Johor is a key earnings contributor for many public listed property developers, according to MIDF Research.

In a recent Equity Beat report on the Johor property sector, the research house noted that most key developers continued to have a strong presence in the state with gross development value ranging from RM400mil to RM5bil.

It identified the state’s land availability and close proximity to Singapore as the two main contributing factors, adding that demand for residential properties in Johor could continue to stay healthy in the immediate term.

However, the report also cautioned the downside risk would be steeper than expected in view of the hike in interest rate and a hiccup in the recovery of both Malaysia and Singapore’s economy.

“Actually, there is a combination of several factors and the key one is Iskandar Malaysia which is a big boost for Johor’s property sector,” SP Setia Bhd executive vice-president (property division – northern and southern region) Chang Khim Wah told StarBiz.


Chang Khim Wah ... ‘Iskandar Malaysia is a big boost for Johor’s property sector.’

He said Iskandar Malaysia was gaining momentum with an influx of local and foreign investors since its launch on Nov 4, 2006.

It had received RM55.56bil in cumulative investments up to end-2009, of which 60% were foreign direct investments.

Some investors had already commenced work on the ground and created some 44,000 jobs.

Chang said Iskandar benefitted the property sector as it raised the standard of residential properties and property developers had to deliver quality products.

He said house buyers in Johor Baru now demanded well designed homes with quality finishing.

“Property developers here cater for both locals and foreign buyers (Singaporeans) and must be able to meet their expectations,” said Chang.

He said economic recovery on both sides of the Causeway offered good opportunities for developers here as demand for properties normally grew in tandem with the economic growth.

Chang said SP Setia’s four ongoing projects in Johor – Bukit Indah I & II, Setia Indah, Setia Tropika and Setia Eco Gardens – would keep the company busy for eight years.


Samuel Tan Wee Cheng ... ‘The Federal Government should review the new ruling.’

Meanwhile, KGV-Lambert Smith Hampton director Samuel Tan Wee Cheng said developers had not really taken advantage of Johor’s close proximity to Singapore.

He said developers should look at Singapore’s permanent residents and expatriates based there as their potential buyers.

“It is a well-known fact that Singapore’s cost of living is among the highest in Asia and private properties are beyond the reach of average Singaporeans,” said Tan.

He said the opening of Singapore’s integrated resort in Sentosa last month and Marina Sands Resorts next month would contribute to the escalating living costs in the republic.

Tan said most Singaporeans wanted to upgrade from the Housing Development Board flats to private properties especially landed ones but could not afford to do so, as such properties were extremely expensive.

He said developers should take this opportunity to attract these Singaporeans to buy properties in Johor Baru and with the strong Singapore dollar, they could get their dream houses here without burning holes in their pockets.

Tan said thousands of Johoreans and locals from other states who worked in Singapore but stayed in Johor Baru also offered market potential for developers.

However, he said frequent changes in the state’s housing policies from the RM100,000 levy imposed on foreigners and only allowing foreigners to buy properties worth RM250,000 onwards had dampened growth in the property market here.

Tan said the recent ruling doubling the price of property from RM250,000 to RM500,000 for foreign buyers would further depress the Johor property market after almost two years of slowdown.

“The Federal Government should review the new ruling. It is okay to impose that for properties in the Klang Valley but not outside it,” he said.

Tan shared Chang’s view, saying that Iskandar helped boost demand for high-end residential properties in the Johor Baru district, especially in Nusajaya.

He said the ongoing Legoland Theme Park, Indoor Theme Park, EduCity and BioXCell Biotechnology Park in Nusajaya would also create demand for houses here.

Tan said the completion of the New Coastal Highway, Eastern Dispersal Link Expressway, Senai-Pasir Gudang-Desaru Expressway would improve travel time and connectivity in the southernmost part of Johor.

He said with improvement in connectivity, buyers would be looking for houses in Mount Austin, Tebrau, Skudai, Senai and Kulai areas.

KSL Holdings Bhd executive director Ku Hwa Seng said the Johor government should play a more active role in promoting the state as the preferred investment destination.


Ku Hwa Seng ... ‘We are looking for more land especially in Iskandar for future development

He said even though property development was driven by the private sector, developers needed commitment from the government agencies and departments for growth.

Ku said the state government could open up more land for industrial activities to attract more Singapore-based companies, especially the small and medium enterprises, to relocate their operations to Johor, where land prices and cost of doing business were lower.

He said although land prices in Johor were becoming more expensive, this would not stop developers including those from the Klang Valley from coming here.

“We are looking for more land especially in Iskandar for future development,” said Ku.

KSL’s four ongoing projects in Iskandar – Taman Nusa Bestari, Taman Bestari Indah Ulu Tiram, Taman Kempas Indah and KSL City – will keep the company busy for the next eight years.

By The Star

SP Setia buys land in Melbourne for RM92m

SP Setia Bhd's wholly-owned subsidiary, Setia International Ltd, has purchased a 46,715 sq ft of land in Melbourne for RM92.4 million.

In a filing to Bursa Malaysia, the company said Setia International has formally exchanged a conditional contract of sale with S.L.Nominees Pty Ltd and Jonquil Pty Ltd.

It said the proposed acquisition is expected to be completed in the financial year ending October 31, 2010.

SP Setia's president and chief executive officer Tan Sri Liew Kee Sin in a statement said this new venture is in line with the group's strategy since 2007 to expand its reach beyond its well known township developments, to include integrated commercial, high-rise residential as well as international expansion.
Liew said along with international expansion, the group will also continue to focus on acquiring new landbanks in Malaysia for growth and re-investment, given the many opportunities which still exist at home.

He said the acquisition will give the group a rare and valuable opportunity to enter the matured, high-income and robust Melbourne property market, to credibly, further establish its credentials and boost the profile as an international property developer.

By Bernama

Foreign buyers inflating property market in Australia

MELBOURNE: Foreign buyers are a factor in rising house prices, said Reserve Bank of Australia governor Glenn Stevens.

He said the bank was monitoring how much the Australian government’s decision last March to relax its rules on foreigners owning property had contributed to surging prices for housing. “The role of foreign purchases was an important one and it’s one we’re giving some attention to,” he said.

Australia’s Treasurer Wayne Swan eased restrictions for those on temporary visas, such as business owners and foreign students, to allow them to buy any home to live in, land to build on or new dwelling for investment purposes.

Real estate agency Marshall White said buyers from mainland China and Hong Kong kick-started Melbourne’s prestige property market last year and still accounted for a third of its sales. Malaysian-born agent Julie Wai Leng Karl said it was becoming important to have multilingual agents in the housing business.

By Bernama

Mah Sing receives its second Brand Laureate Award for Best Brand in Property

Mah Sing's Group Managing Director cum Group Chief Executive receiving the Best Brand in Property Award from Datuk Seri Idris Jala, Minister in Prime Minister’s Department.

For the second consecutive year, Mah Sing Group Berhad was awarded The Brand Laureate Award for the Best Brand in Property. The award was presented to the group’s managing director Tan Sri Dato’ Sri Leong Hoy Kum at a ceremony at a hotel in Kuala Lumpur last Friday, March 26.

“I am very honoured that our group is nominated for this award for the second year running as it is recognition of our unwavering commitment to deliver our brand promises made to our stakeholders. We will continue to enhance our brand position while contributing to branding Malaysia globally,” Leong said.

The Mah Sing Group believes that a strong brand identity will be able to enhance a company’s position in both good and challenging times.

Leong said, “A brand promise is made to our stakeholders and these promises must be founded on trust. Trust, reliability and respect will create strong relationships and strong branding. We believe the delivery of this brand promise is what resulted in our strong sales of RM516million for the first 3 months of the year. This is three times the RM170million sales achieved in the same period in 2009, hence we are confident of achieving our sales target of RM1billion for 2010.”

By The Star

Moody's maintains stable outlook for China property developers

HONG KONG: Moody's Investors Service is maintaining its stable outlook for China property developers over the next 12 months and says that while prices will decline, the market is not overly inflated.

Moody's vice president and senior credit officer Peter Choy said on Monday, March 29 that currently, numerous factors -- many at opposing ends of the spectrum -- are at play on the China real estate landscape, leading to a market which shows restrained short-term weakness, but robust long-term fundamentals.

"Moreover, the ability of developers to manage through the situation is much stronger than 18 months ago," he said. "And while we do not subscribe to the view that China's real estate market is grossly inflated -- attracting terms such as "an asset bubble" -- we do expect a 10% year-on-year decline in contracted sales in the country's first-tier cities."

Choy said in 2010, the performances of developers -- with sustainable business models and which focus on owner occupiers rather than investors -- will be less volatile.

"One of the key aims of the regulatory interventions has been curbing activity by property speculators, who will scale back their activities," he said on the release of a new Moody's outlook -- which he authored -- on Chinese property developers.

The report looks at key trends and their rating implications, demand and supply, how the authorities have used regulatory measures to cool the market -- buoyed partly by the government's stimulus packages and the easy available of credit -- and the financial fundamentals of Moody's 14 rated developers.

"In view of the market's improved fundamentals and the timeliness of recent regulatory interventions, the residential property market is unlikely to see a repeat of the slump of 2H2008," he said.

"Moreover, developers are under less pressure to reduce prices, given strong sales in 2H2009 and the resultant strengthening in their liquidity positions."

"And while Moody's rated developers may not achieve their ambitious sales targets in the next 12 months, there is unlikely to be any material impact on their ratings during this time frame. Furthermore, developers need more funding for their larger scale developments, but progress can be adjusted according to levels of funding availability," he said.

By The EDGE Malaysia

China orders tighter property lending

BEIJING: China's banking regulator ordered lenders to take more care when making real-estate loans, widening efforts to prevent property speculators from causing asset bubbles and bad debt.

Banks should not lend to developers found by state agencies to have held land without building houses, the government said in a statement posted online yesterday evening. They should also stop approving new lines of credit to 78 government-controlled companies whose core business isn't property development if they use collateral other than construction projects already in progress, the statement said.

China's property prices rose 10.7 per cent last month, the fastest pace in almost two years, fueling concern that record lending and inflows of capital from abroad are creating asset bubbles in the world's third-biggest economy. The government this month raised deposit requirements for buyers at land auctions to 20 per cent of the minimum price to raise costs for developers. It also lifted banks' reserve requirements twice this year and re-imposed a tax on home sales.

"We have to closely monitor China's asset bubbles," Liu Mingkang, chairman of the China Banking Regulatory Commission, said yesterday at a conference in Beijing. Property prices have changed "quite a lot in the past five years," he said.
Former Federal Reserve chairman Alan Greenspan yesterday said there are "bubbles" in China, without indicating whether they were in property and stocks.

"There are significant bubbles in Shanghai and along the coastal provinces, but there's some of that going back into the hinterlands as well," Greenspan said in an interview on Bloomberg Television.

The regulator's latest order underlines concerns that banks may be at risk from companies that are speculatively raising capital backed by property investments. Banks must carry out "serious" examinations of developers that are repeatedly using the same pieces of land as collateral for loans, the regulator said in the statement.

"These measures are intended to urge developers with land to build houses and sell them quickly to increase market supply," said Zhao Qingming, a Beijing-based senior analyst at China Construction Bank Corp, the nation's second largest lender. "It may curb fast growth in housing prices, but more measures are needed to tackle the root issue, including controls on land prices and speculative house-purchase investments."

"We ask banks to check the qualifications of the developers and they must have a face-to-face check," the CBRC's Liu said on Friday.

By Bloomberg

Prospects in retail sector positive

Despite the generally soft sentiment in the commercial property market, there are a number of projects underway in Kuala Lumpur and the Klang Valley slated for completion over the next two years.

Most of these new retail projects are of smaller scale and located in the suburban areas. Subang Avenue in Subang Jaya has an estimated net lettable area of 250,000 sq ft, SSTwo Mall in SS2 Petaling Jaya (463,000 sq ft), 1 Shamelin in Cheras (420,000 sq ft), Citta Mall in Ara Damansara (424,000 sq ft), Solaris 2 in Dutamas (300,000 sq ft) and Viva Homes in Jalan Loke Yew (688,000 sq ft).

In Kelana Jaya, a new project Taragon Kelana Commercial Centre was launched last week for completion in the third quarter of 2011.

The project by Blackstone Seven Sdn Bhd, a unit of Allstones Group Asia, comprises five retail lots, eight blocks of shop offices and 60 office suites with a gross development value of RM80mil. Located on 1.1 acres, it is targeted for completion in the third quarter of 2011.

Allstones chairman K.H. Sim says the office suites range from 1,045 sq ft to 1,388 sq ft and priced at RM407 per sq ft. Every unit comes with a free carpark.

According to Sim, more than 60% of Taragon Kelana has been sold. “The trend for small businesses now is to own their offices in a secured environment instead of renting in upper floors of shop houses. This is a niche market we are targeting,” he says.

DTZ Research, in its latest Property Times report, says while prospects in the retail sector are positive, rentals are expected to remain soft especially in the suburban areas given the completion of more new shopping centres.

The lively food and beverage sub-sector continues to provide support to rental rates.

CB Richard Ellis Malaysia executive director Paul Khong says the office market is also seeing more new developments including the advent of a new generation of green buildings.

Generally these green office spaces can fetch rental premiums of at least RM1.50 per sq ft on top of the average rates of RM5 to RM6.50 per sq ft.

New office buildings to be completed this year include Menara Waqaf with 340,000 sq ft of net lettable area, Menara Worldwide (275,000 sq ft), HSBC’s new annexe building (129,000 sq ft), BRDB Tower (223,000 sq ft), Capital Square Office Tower 2 (600,000 sq ft), Menara Kencana (255,000 sq ft) and One Mont Kiara (380,000 sq ft).

Potentially adding to the future supply is a 100-storey skyscraper in Kuala Lumpur proposed by Permodalan Nasional Bhd.

IGB Corp Bhd is awaiting approval to build two high-rise office towers totaling 600,000 sq ft in the last phase of its Mid Valley City development. Construction may commence in early 2010 for completion in three years.

Khong adds that the local commercial real estate market is seeing growing interest from overseas institutions.

Comprising mainly Singapore, Australia, German and South Korean funds, he says they are keen in shopping malls and office buildings that are leased to good tenants.

“These are canny investors with wide experience in the region and when the right opportunity appears they are keen to buy. With further relaxation of the requirements for local equity, Malaysia will continue to attract foreign capital from a variety of sources including sovereign funds and some of the major names in the industry.”

Khong says office rentals are expected to remain competitive this year in view of the 2.4 million sq ft of new supply expected to be completed this year in Kuala Lumpur. As of fourth quarter 2009, the cumulative supply of Grade A office space in the city stood at around 29.9 million sq ft.

By The Star

Efforts to clean our rivers plausible

MALAYSIANS generally have quite poor maintenance practices and culture when it comes to public facilities, which explains why there are many dilapidated and neglected public places around.

From parks to beaches and rivers, it is common to find them in a state of neglect and unkempt with rubbish and other unsightly objects.

Take our beaches and rivers for example. Their condition is far from the picturesque scene that we see in postcards, which usually show pristine clear blue water lapping up sandy beaches or winding down green meadows and lawns.

Many of them are very unsightly and have been severely polluted with debris and all kinds of pollutants.

So, when the Selangor government announced that it is planning to rehabilitate and develop the Klang River by appointing four companies to undertake the project two weeks ago, those who still care about what’s going on around them must have been relieved to know that help is on the way to salvage the 120km river that meanders from Klang to Shah Alam, Subang Jaya, Petaling Jaya, Kuala Lumpur and Ampang Jaya.

Its objective to rehabilitate and clean up the badly polluted river into a new source of water supply will earn it many supporters given that water is fast becoming a scarce resource in various parts of the country.

The plan to develop its economic potential in the commercial and tourism sectors is also laudable to promote new sources of income for the people.

On the other hand, there are also those who must have doubted whether such a massive and ambitious project can pull through successfully.

Their doubts are understandable because the last time the proposal to clean up and develop the Klang River was made in the 1990s, nothing came out of it.

This time around, Selangor Mentri Besar Tan Sri Khalid Ibrahim says the entire project to clean, rehabilitate and develop the river is expected to take 15 years and it will attract RM50bil worth of investments.

Whether the project will be off to a good start and be successful at the end of the day depends on the persistency and will power of its promoter and project partners.

But in this instance, the public, including the squatters by the river banks and factory operators, need to play their part by watching over and caring for the river by not polluting it further.

As in all public projects, the most important criteria to ensure success is to have a strong political will to drive the project through expeditiously and efficiently.

Due diligence should be undertaken to ensure the project’s viability and how best to implement it to reap greater value for the people.

Instead of just stressing on the economic value to extract the maximum return from the project, it is necessary to ensure that it will also improve the people’s quality of life and living standards.

There should be proper balance between the need to preserve the natural eco-system and environment across the length and breadth of the Klang River and its surrounding land; and how much to be opened up for development.

Development of the river should focus on low-density projects and preferably they should be environment-friendly buildings that promote the green way of life.

The projects should blend well with the natural environment and identity so that it will not be lost to development.

After all, the Klang River has a long history as a busy waterway for merchants and traders during the country’s early days.

To ensure the river stays clean and sustainable for many generations to come, steps must be taken to educate the people that they are also stakeholders and should uphold their responsibility as joint caretakers.

Forming river watchdog groups and cleanliness awareness campaigns way before the river project takes off should be effective.

If the littering and polluting persist, heavy fines should be imposed on repeat offenders who indiscriminately dump factory waste or garbage into the river.

If the project is implemented efficiently, it will turn the river into a new resource for Selangor’s economy and promote more healthy and sustainable projects for the people.

·Deputy news editor Angie Ng recalls with fondness the clean streams and rivers she enjoyed with her siblings during her younger days in Penang.

By The Star

Expected growth in sales for Johor property market

JOHOR BARU: The Johor property market is expected to experience growth in sales this year due to the nation’s economic recovery.

Real Estate and Housing Developers Association (Rehda) Johor branch chairman Lee Kim Chai said other factors include higher employment in various sectors compared to last year.

He said the higher employment rate led to stronger purchasing power for prospective buyers.

“Prospective buyers should take the opportunity to buy property in the state at this point of time.

“Interest rates for housing loans are also very low, and thus very attractive to buyers,” he told The Star here on Monday.

Lee said property prices in Johor were comparatively low to Kuala Lumpur and Penang.

“For example, double-storey terrace houses are priced between RM800,000 and RM900,000 in areas such as Damansara Utama.

“The properties in Johor are much cheaper and thus much more attractive to buyers,” he said.

Lee noted that the sales performance of Johor’s property market is peculiar as it is also affected by Singapore’s economic climate.

“We have a sizeable population of locals staying in Johor Baru who are employed in Singapore.

“If Singapore’s economy is doing well a lot of locals would be working over there,” he said.

He added that some Johoreans working in Singapore have plenty of purchasing power.

“It is good for them to buy properties here as the exchange rate is favourable.

“Most of such workers prefer to stay in neighbourhoods and townships near the Second Link as it is easier for them to get access into Singapore,” he said.

Besides Johoreans, Lee said that the Johor property market was also attractive to foreigners, especially Singaporeans.

“Certain townships attract foreigners especially in Horizon Hills or East Ledang, which is near the Second Link.

“The strategic locations coupled with much cheaper prices compared to landed properties in Singapore is an incentive for buyers.

“Landed properties in Singapore cost millions of dollars while it only cost few hundred thousand Ringgit here,” he said.

Lee said that the development of Iskandar Malaysia would contribute to the growth of property sales in the state as well.

“I believe that with more foreign investments coming in and other infrastructure projects underway, the boom will benefit the Johor property market,” he said.

By The Star

Tong sees potential in Ho Hup’s property arm

KUALA LUMPUR: Tan Sri Tong Yoke Kim, who recently emerged as a substantial shareholder in financially troubled Ho Hup Construction Co Bhd, sees potential in the company’s property arm.


Tan Sri Tong Yoke Kim ... ‘I’m coming in as a private investor only.’

Ho Hup, which saw a months-long tussle between Datuk Low Tuck Choy and Datuk Vincent Lye end in the ouster of the latter and the board headed by him in an EGM on March 17, is a Practice Note 17 (PN17) company.

“I’m coming in as a private investor only and don’t personally know anybody in the management or the major shareholders,” Tong told StarBiz over the phone yesterday.

Tong, together with son Datuk Andrew Tong Ho San, also own a 19.27% stake in another construction firm, Bina Puri Holdings Bhd, through investment vehicle Bumimaju Mawar Sdn Bhd.

According to a filing with Bursa Malaysia on Tuesday, the elder Tong had acquired 7.42 million shares, or a 7.28% stake, in an off-market deal on March 10, a week before the EGM that saw Lye and his board ousted.

Low and his family own 27.23% of Ho Hup, which was founded by his father, the late Low Chee. Lye has a 27.95% stake in the construction firm.

The March 17 EGM was requisitioned by Low, also a former managing director of the company, and another shareholder after disagreeing with the previous board led by Lye on the way forward for the company.

Tong added that despite being a PN17 company, there was still some value in Ho Hup, which primarily lay with the property arm.

Ho Hup recently signed a joint-venture agreement with Malton Bhd to develop 60 acres of freehold land the company owns in Bukit Jalil, Kuala Lumpur, into a mixed project comprising commercial and residential properties.

Based on recent filings with Bursa Malaysia, Ho Hup is entitled to RM265mil from a potential RM2.5bil in gross development value from the project over a 10-year period from the approval date of the development.

Tong said the investment in Ho Hup had nothing to do with his other holdings, in particular with that of Bina Puri. “This is separate from my other investments, including in Bina Puri,” he said.

Meanwhile, Ho Hup director Hew Thin Chay said the board had no knowledge of the change in shareholding except from what was reported.

He said the company would make an announcement soon on the appointment of an advisor for the regularisation plan. Both AmInvestment Bank Bhd and Newfields Advisors Sdn Bhd had resigned from their positions as joint advisors last Friday.

“We will likely ask for an extension of time of up to six months from Bursa for the submission of a regularisation plan,” Hew said.

The deadline had been extended to April 4 in an earlier announcement.

By The Star (by Fintan Ng)

Nilai Res to develop land with GD Devt

Nilai Resources Group Bhd announced today that its subsidiary BBN Development Sdn Bhd plans to team up with GD Development Sdn Bhd to develop 135.52 hectares of land in Putra Nilai, Negeri Sembilan.

The proposal involved a mixed residential and commercial development, the company said in a filing to Bursa Malaysia today.

GD's principal activity is real property and property development.

Under the joint development agreement, BBN Development will be entitled to a sum equivalent to 25.8 per cent of the expected gross profits or actual gross profits from each phase of the project, whichever is the higher.


It will also be entitled to 25.8 per cent of all properties retained by the proposed development.

The proposed development is expected to be completed within eight years, in which the timeframe may be extended for another two years.

Nilai Resources said the joint development will allow BBN Development to leverage on the GD group's strong marketing network for the proposed development.

By Bernama

Glomac Bhd: Hold, target price RM1.40

AMRESEARCH has kept its "hold" rating on property developer Glomac Bhd, with a revised fair value of RM1.40 per share. The rating was maintained as it thinks the stock offers little upside despite a bullish outlook in the property sector.

The fair value is arrived at after applying a discount of 20 per cent to its revised estimated net asset value of RM1.74 per share.



"While demand for residential units should pick up from an expected growth in income and robust buying sentiment, we are neutral on Glomac's planned residential launches for fiscal 2010, which accounts for 36 per cent of planned gross development value this year," the stockbroker said in a March 23 report.

"This is mainly because its launches are not appealing, although modest pricing could entice first time buyers and those from a lower income segment," it added.
However, Glomac's shift to commercial development is showing positive results, it noted. AmResearch was somewhat surprised by the strong sales for the developer's commercial venture in Cyberjaya, which has an estimated GDV of RM205 million. While phase 1 of the project has a 70 per cent take-up, phase 2 was sold out.

Likewise, Glomac Damansara was well received despite a glut in supply of retail and commercial space within the vicinity.

"Given Glomac's knack in securing en-bloc sales for its buildings, we are not ruling out more such deals. It is looking to sell a few more buildings at Glomac Damansara with enquiries for its corporate tower in Plaza KJ4," the report said.

By Business Times

PM: Up to state govts to give land

It is up to the state governments to give available empty lots in their planned land use to second generation Felda settlers, said Prime Minister Datuk Seri Najib Tun Razak.

In a written reply to Datuk Azalina Othman Said (BN – Pengerang), he said the Government never broke its promise in providing land ownership.

“Up till now, there are as many as 112,635 settlers in the country and 75,747 or 67.3% had been given ownership titles. A total of 36,888 or 32.7% of settlers have not receive the titles,” he said.

As of March 1, 13,264 ownership applications had been sent to state governments for approval, he added.

Najib said every Felda settler was allocated 4ha of land for farming and about 0.1ha for their living quarters.

According to the agreement between settlers and the state government, settlers were given land ownership documents when they had repaid the development costs that the Government had initially forked out for them, he said.

The development costs included that for jungle clearing, estate development, foundation preparation and building houses, and taxes, Najib said.

By The Star

‘Spin & Win’ at the Modern Home & Lifestyle Fair’s 10th Edition

The 10th edition of the Modern Home & Lifestyle Fair is currently held at Mid Valley Exhibition Centre from March 26 to 28. There are approximately 250 booths spanning 3 halls featuring security systems, mattresses, furniture and furnishings, landscaping, banks, massage sofas and interior design firms, amongst others. According to the exhibition’s project director Charles Yong, the exhibition is expected to attract 70,000 visitors.


The exhibition's project director Charles Yong holding two prizes while explaining how the 'Spin & Win' wheel works

“Even in the first hour, the response was good. There were 100 people waiting outside when we opened at 11am,” Yong said.

Yong explained that the10th edition is also referred to as the appreciation edition where prizes are given for purchases. Visitors with purchases of RM200 and above in a single receipt will be entitled to one spin at the ‘Spin & Win’ wheel, while two spins are accorded for purchases above RM1,500 in single receipt. The prizes are valued between RM25 and RM1,600.

“There are a lot of prizes such as stainless steel flasks and bicycle. One 32” LCD TV will be given per day. Previous years, we have lucky draws. There was a lucky draw per night and the chances of winning are one tenth to get one of the fifty or sixty prizes. This exhibition’s appreciation edition, we have more than 6,000 prizes,” Yong enthused.

“The main exhibitor is LG. Other key exhibitors include Alfo (lights) and Kian Classic (interior design),” Yong explained. He commented that the exhibition features various new technologies such as cleaning and mopping using robot, cooking with high tech halogen light and doors incorporating high security features while retaining its aesthetic appeal.

One of the interesting products is the ANABESS BioClean laundry ball. It claims to be scientifically designed to clean laundry without detergent. Another worthy mention is the Cozzia massage sofas, which is distributed by Ogawa World Berhad. Ogawa’s general manager for home funishing division Dato’ Eddy Sik said that Cozzia was launched in Jaunary this year and the response has been very encouraging as Cozzia sofas are the only sofas that offer basic massage functions in Malaysia. The massage sofas are made from Italian leather and only the single seater incorporates basic massage functions.

The Modern Home & Lifestyle Fair is organised by Cyan Event Management, the same organiser as the ONE Australia Property Fair held in early March.

By The Star