China gets tougher on property, land loans

BOAO (China): China's banks must report on the quality of their loan books by the end of June and take fresh steps to rein in risky lending to land developers, the chief banking regulator said yesterday.

Liu Mingkang, head of the China Banking Regulatory Commission, said he had ordered banks in particular to check "project by project" loans extended to local governments' special investment vehicles, which borrowed 36.5 per cent of last year's record 9.6 trillion yuan in new lending.

Loan officers must ensure that these investment vehicles are generating sufficient cash flow to service their debts and, if necessary, amend the loan covenants and demand more collateral.

The CBRC will send inspection teams into banks next quarter to ensure any irregularities have been rectified, Liu told the Boao Forum on the southern island of Hainan.
Some academics and investors have expressed concern that many of the loans made to local governments as part of the government's anti-crisis pump-priming package could turn sour.

Liu said he had the backing of the State Council, China's cabinet, to set a very rigid timetable for banks to reassess their loans and rectify terms as necessary.

"We have limited resources, but we must get focused on the most important areas. If we can do that, we will feel comfortable in the years to come," Liu said.

He also warned banks to be selective in supporting real estate developers and said the CBRC had instructed banks to lower loan-to-value ratios when lending to companies acquiring land.

Land prices more than doubled last year and some plots in Beijing have fetched record prices this year, snapped up by state-owned enterprises (SOEs) whose core business has nothing to do with real estate development.

The government has since ordered 78 SOEs to divest such non-core businesses, and Liu said the principle that the highest bidder should win a land auction was not appropriate in China.

The CBRC has ordered lenders to lend against the collateral of construction projects that are under way, not undeveloped land, and encouraged them to lend only to a limited list of developers with a good track records, Liu said.

He said banks should not make loans to property speculators. If they have doubts about the motives of someone seeking a mortgage for a second or third home, they should charge more for the loan and demand a higher down payment.

He noted that some banks in Beijing were now requiring buyers of second homes to make a down payment of more than 60 per cent of the value of the property. The minimum set by the CBRC is 40 per cent. First-time owner-occupiers taking out a mortgage need a down payment of only 20 per cent.

Liu said he felt comfortable about the level of mortgage risk in China as underlying demand for housing remained strong.

Moreover, most first-home buyers were paying a down payment of 30 per cent and second-home buyers were providing 40-50 per cent.

Banks had made provisions equal to 166 per cent of their bad loans to the real estate sector, he said.

"We have enough bullets to fight against possible downward risks in that market," Liu, who was speaking in English, said.

Liu's remarks and actions are the latest stage in a campaign by the authorities to ensure that last year's credit splurge and fast-rising property prices do not sow a new crop of bad loans.

To that end, the CBRC has pushed banks to raise fresh funds to bolster capital ratios depleted by last year's lending spree. The CBRC has also ordered banks to increase loan loss provisions.

The property sector, a central pillar of the Chinese economy, is at the core of the CBRC's concerns.

Beijing faces the balancing act of continuing to promote widespread home ownership while deterring speculative investment that has driven prices in major cities beyond the reach of ordinary Chinese, prompting widespread grumbling.

By Reuters

REIT market to swing upwards in value

KUALA LUMPUR: Malaysia’s real estate investment trust (REIT) market is expected to swing upwards closer to their net asset value (NAV) in the next six months, with the entry of new players that can attract foreign investors, said Hall Chadwick Asia Sdn Bhd chairman Kumar Tharmalingam.

Besides YTL Corp Bhd’s Starhill REIT, he said the bigger ones that could cross the RM4bil threshold include Sunway REIT, which has a stable brand name including Sunway Resort and Monash University.

“The moment an individual REIT achieves a value of RM4bil, it will attract foreign investments.

“Foreigners may put in US$100,000 into the REIT, or maybe buy 5% or 10% of it,” he told reporters after speaking at The Edge Investment Forum on Real Estate 2010 on Saturday.

He said with a bigger local REIT market, foreign investors may even opt to put a large sum in one of the larger REITs and spread the rest of the investments into smaller REITs.

“Right now, with the exception of Axis REIT, most are trading at about 15%-18% below NAV, compared with property stocks, which are trading at 30% below NAV,” he said.

Among those that are expected to trade closer to NAV are Quill Capita Trust, Axis REIT, Starhill REIT and UOA REIT as they have plans to attract foreign investors, he said.

Tharmalingam said the NAV would also rise due to the revaluation of undervalued properties such as those under UOA REIT.

By Bernama

Developing properties for different generations

The hype surrounding the huge “generation gap” among Malaysians seems to be among the many efforts marketeers are creating to widen the appeal of their products.

Differentiation is certainly a clever way to expand in an otherwise listless and static market. From new generation gadgets such as the iPod to branded fashionwear and credit cards, marketeers are quick to leverage on these differences to make us buy into their message that “we should never leave home without them.”

The country’s demographics is changing fast with more young Malaysians making up a bigger share of the population. The Gen-Yers (aged 15-30) are making a big impact in the market place. The Gen-Xers (born between 1965 and 1979) and Baby Boomers (1945-1964) are also important market segments as they wield the most purchasing power.

The different needs, habits and lifestyles of the various age groups creates huge opportunities for property developers to tap into.

So, planning and designing the right products to meet the requirements of the various age groups should be among the priorities of niche property players.

Instead of turning their projects into a one-size-fits-all, the better option is to identify special products and fit them with the right facilities for the different age groups. This will add higher value to the projects and make them more marketable.

In fact, greenfield projects offer the best opportunity for developers to draw up a good master plan where the needs of different buyers can be catered to.

Irrespective of age, developers should note that property buyers place high priority on security, good neighbourhood, quality workmanship and convenience. So, projects should always be planned with those needs in mind.

Although there are more niche developments, especially high-end gated and guarded enclaves, most property projects are conventional developments aimed at the mass middle-income market.

The projects are mostly apartments, terraced and detached houses with the usual basic necessities, either in guarded or non guarded enclaves.

I believe there aren’t any developers that have set out solely to cater to the needs of senior citizens. The reason may be because most senior Malaysians are cared for by their children and are living with them, while some may be in homes for the aged or infirmed.

But there is certainly a growing number of senior citizens that have the financial means to own homes in well planned, built and managed housing estates.

For many senior citizens, retirement will be the best time to pursue their “postponed gratifications.” Those with grown up children are likely to experience the “empty nest” syndrome and will look forward to live in homes that are easier to manage.

Many Baby Boomers (aged 45-64) will soon be joining the ranks of retirees and are likely to consider such facilities. If properly planned and managed, developments for our senior citizens could be the next trend for developers just like in Australia, Japan and South Korea.

Projects should preferably be low-density and low-rise with amenities for the aged such as lifts, ramps, medical facilities and attendants, health rejuvenation centres, laundrettes and convenience stores.

As most retirees will look forward to a more relaxed environment, developments should be in quiet suburbs, but close enough to the basic needs and conveniences.

Meanwhile, properties that cater to younger buyers such as Gen-Yers should have smaller built-up for easier maintenance.

Deputy news editor Angie Ng believes simplicity can enrich one’s life regardless of whether one is a Baby Boomer, Gen-Xer or Gen-Yer.

By The Star (by Angie Ng)

Sunway to develop 6.8ha in Puncak Jalil

Sunway Holdings Bhd has sealed a deal to develop three plots of land totalling 6.84ha in Puncak Jalil, Kuala Lumpur, into an upmarket residential area with a gross development value (GDV) of RM120 million.

The deal signed with Monty Properties Sdn Bhd yesterday will increase Sunway's total GDV to RM2 billion from various developments planned on 161.87ha over three years.

Sunway said it will build double storey terrace and semi-detached homes offering lifestyle concepts on the three parcels.

They measure between 1.6ha and 3.23ha each, and are well-served by a network of highways and main roads, including the Bukit Jalil and Sungai Besi highways.

The developments are expected to be launched in the second half of the year, Sunway said in a statement yesterday.
"This venture brings the group's landbank to some 161.87ha with a potential GDV of about RM2 billion, which we will develop over the next three years," Sunway managing director Yau Kok Seng said.

The latest deal follows its recent acquisition of 39.65ha with a total GDV of RM500 million in Templers, Gombak, Selangor.

Last year, Sunway also announced that it was undertaking a private housing project in Singapore's District 14 via a joint venture.

That was its third Singapore property project following the two successful public housing projects under the design-build-sell scheme in Boon Keng and Toa Payoh.

The two Singapore projects and another in Melawati, Kuala Lumpur, have provided Sunway with more than RM650 million in unbilled sales to date.

Yau said the company plans to launch about RM800 million worth of property projects in Malaysia, Singapore and China for the rest of the year.

By Business Times

Sunway Mas in property JV

KUALA LUMPUR: Sunway Mas Sdn Bhd, a unit of Sunway Holdings Bhd, has formed a joint venture with Monty Properties Sdn Bhd to undertake a property development project called “Puncak Jalil”.

Sunway Holdings said the project, to be carried out by the joint-venture firm Geneba Dua Sdn Bhd, is expected to have a gross development value of RM120mil on 6.75ha land.

In a statement to Bursa Malaysia yesterday, Sunway Mas said it would hold 65% stake in the joint venture with the remaining 35% under Monty Properties.

It also said that the proposed joint venture would enable the group to increase the size of its land bank for further property development.

“The land is suitable for high-end residential development and is proposed for a property development project comprising terrace and semi-detached houses which will be launched this year,” said Sunway Holdings.

“That fits into the group’s strategy of focusing on niche residential projects with fast turnaround time,” it said.

The land for the proposed development is strategically located in Puncak Jalil, a well-established township, and is easily accessible to the Bukit Jalil highway and Puchong via the Damansara-Puchong Expressway.

By Bernama

Appetite for British properties

Malaysians’ interest in British properties is increasing in terms of range, scope and pricing.

What started as a passing attraction in British properties prior to the financial crisis has been replaced by an upbeat mood on the part of Malaysians buyers, fanned by aggressive property consultants.

Incidentally, this interest is not limited to Britain but includes Australia and Singapore as well. However, the current weak pound sterling is a strong pull factor; the Australian and Singapore dollar are high comparatively.

Britain’s interest rate environment is also another plus factor. The Bank of England has maintained the base rate at 0.5% for 11 consecutive months.

Over the past 1½ years, Malaysian investors have not only shown interest in residential developments but also commercial buildings and land deals.

Last year, several property consultancies exhibited British properties in Malaysia with prices starting from about £120,000 for an apartment.

While located away from central London, most of the properties are within walking distance to London’s main public transport system – the underground.

There is now a growing interest for developments in the higher price bracket and in more centralised locations.

“We have had conversations with people from Malaysia, Singapore and Hong Kong. The general feel is that they want properties that have a higher value and are more centrally located,” says Tim Wright, a King Sturge realtor. Wright says investors from Hong Kong (including China), Singapore and Malaysia have acquired properties worth about £500mil since March 2009.

Last month, Henry Butcher Malaysia exhibited British properties priced from about £1,000 per sq ft in Covent Garden.


Tang Chee Meng says Malaysians bought British properties worth over £60mil in the past 12 months.

Chief operating officer Tang Chee Meng says Malaysians bought British properties worth over £60mil in the past 12 months.

Due to strong interest, the company has also increased its frequency of British property exhibitions in Malaysia, sometimes featuring several projects over a weekend.

Henry Butcher has so far exhibited 13 British developments in Malaysia over the past year.

Among the developers the company works with includes Berkeley Homes, St James, St George, United House, Eurpoean Land, Bellway and Ballymore.

Savills Rahim & Co is another local consultancy firm promoting British properties in Malaysia.

Some of the recent projects showcased by the company were Neo Bankside, located south of River Thames, and Chelsea Apartments in Chelsea.

Neo Bankside was priced between £1,000 and £1,500 per sq ft when the first phase was launch last year.

Prices are expected to rise about 10% when phase two is launched in a couple of months.


Christopher Hahn says Savills Rahim & Co has sold six units of Neo Bankside totalling about £6mil.

The company has so far sold six units of Neo Bankside totalling about £6mil, says Christopher Hahn, corporate real estate and overseas business development manager at Savills Rahim.

Hahn says the company is selective of the British developments it markets in Malaysia as it has to balance the type of properties with the pricing that Malaysians are comfortable with.

Says Robert Ang, Savills Rahim’s MD: “Buying properties overseas is a tricky thing when you are not a local person. We try to not only offer good products, but sound and prudent advice.

“We do our due diligence and prefer to work with developers, not contractors, whom we know and trust. We also prefer take on one project at a time. Maybe we are too conservative but we do not want our buyers to lose money.”

Much of the interest in British properties, says Hahn, is in the south east side of England. It is here that the bulk of the city’s regeneration programme is being carried out.

Regeneration is a process where vast areas are torn down with the purpose to re-energise or re-zone the land use.

That was how Canary Wharf came about. Formerly known as Docklands, it was at one time an area comprising mass warehouses by the River Thames. Today, it has been transformed into a financial centre.

By The Star (by Thean Lee Cheng)

Britain’s weak economy entices local investors

BRITAIN’S low interest rate environment and the weak pound sterling has drawn Malaysian investors over the past year to enter into joint ventures or take up equity interest in property development .


Robert Ang ... ‘The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets).’

This trend is expected to continue as investors eye opportunities there. Savills Rahim & Co’s recent £100mil land deal involved a Malaysian firm taking a 10% stake in the deal, says managing director Robert Ang.

“It is a private company with property development experience in Malaysia,” he says.

The main parties involved in the deal is Native Land, one of London’s leading residential developers, and Grosvenor, a privately owned property group.

According to a press release from Native Land, the 2-acre development site currently forms part of Holland Park School.

Planning consent has already been granted for 72 private luxury residential apartments, 78 car parks and a residents’ only leisure facility on the 2-acre site.

Holland Park’s location is equivalent to Bukit Tunku in KL, says Chris Hahn, manager for corporate real estate and overseas business development at Savills Rahim.

“It’s not smack in the city centre but just beyond it. It is home to many of Britain’s corporate figures, including Sir Richard Branson,” he says.

Prime central London locations include Chelsea, Mayfair, Knightsbridge and Kensington.

The Native Land press release said the land purchase was one of the most significant land deals in prime London residential development in the last 12 months.

To date, Native Land and Grosvenor have worked together on three other luxury residential projects in London.

The most recent is Neo Bankside, a residential development promoted by Savills Rahim last year.

Last year, another Malaysian investor invested £6mil in a 50:50 joint venture project to build a five-storey office and residential building located in Chelsea, a prime London location.

The proposed plan is to have 10 units of apartments priced between £1,200 and £1,300 per sq ft.

The apartments are expected to be put on sale in a few months time, says Ang.

Last September, AMDB Bhd invested £50.5mil in two freehold office buildings in Paddington, London. Banking icon Tan Sri Azman Hashim owns 53% of AMDB. His main asset is AMMB Holdings Bhd.

The properties consist of two buildings constructed in 1960.

The first is 40 Eastbourne Terrace, a 83,000 sq ft grade A building refurbished in 2006.

It is fully tenanted with a total rent of just over £2.9mil a year until 2016.

The other building comprising 60,000 sq ft over three blocks of multi-let office and retail accommodation with an annual rental of £1.7mil.

Ang is helping to broker a fourth land deal involving Malaysian interest, keen to enter into a joint venture.

“The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets),” he says.

By The Star

Flat outlook for British housing market

The British housing market is expected to be broadly flat this year, according to Jones Lang LaSalle (JLL).

The short-term outlook is relatively uncertain, despite a stronger than expected rebound in the last nine months of 2009, says James Thomas, head of residential development and investment at JLL.


Savills expects British property prices to soften, albeit marginally, over the course of the current year. — Reuters

House prices have been trending upwards since March 2009 but fell marginally in February, he says. London and south west London have seen far stronger price growth during the recovery. Thomas expects Britain’s average property prices to decline by up to 3% this year.

“Next year is also likely to be relatively stagnant, although it should be the year that firmer foundations are estbalished in preparation for stronger economic and housing market conditions from 2012 onwards,” he says.

According to a report by London-based Savills (Prime Residential Markets in London and Great Britain – January 2010), the prices of ultra prime properties in London remained 1.3% lower at the beginning of the year compared with the same period last year.

“Generally, high net (worth) individuals have been slower to return to a market more or less dominated by discretionary second home acquisitions,” it says.

“The prime markets in London, particularly the south west inner suburbs, were surprisingly strong last year given the extent and speed of the previous price falls of 2008.

Since the bottom of the market in March 2009, prices in prime central London and prime south west London have increased by 13.4% and 21% respectively.

However, on average, this still leaves prices in these markets between 10.2% and 12.85 below their peak,” the report says.

It says this year, the prime London markets will have to contend with the continuation of relatively weak economic conditions, the uncertainty that surrounds a general election and the prospect that improvements in earnings and purchasing power will be tempered by increased taxation.

Savills expects British property prices to soften, albeit marginally, over the course of the current year.

By The Star

Sunway unit in jv with Monty Properties

Sunway Mas Sdn Bhd, a unit of Sunway Holdings Bhd, has formed a joint venture with Monty Properties Sdn Bhd to undertake a property development project called "Puncak Jalil".

Sunway Holdings said the project, to be carried out by the joint-venture firm Geneba Dua Sdn Bhd, is expected to have a gross development value of RM120 million on 16.88 acres of land.

In a statement to Bursa Malaysia today, Sunway Mas said it would hold 65 per cent stake in the joint venture with the remaining 35 per cent under Monty Properties.

It also said that the proposed joint venture would enable the group to increase the size of its land bank for further property development.
"The land is suitable for high-end residential development and is proposed for a property development project comprising terrace and semi-detached houses which will be launched this year," said Sunway Holdings.

"That fits into the group's strategy of focusing on niche residential projects with fast turnaround time," it said.

The land for the proposed development is strategically located in Puncak Jalil, a well-established township, and is easily accessible to the Bukit Jalil highway and Puchong via the Damansara-Puchong Expressway.

By Bernama

MRCB eyes land in Iskandar to develop property projects

JOHOR BARU: Malaysian Resources Corp Bhd (MRCB) is eyeing land in Iskandar Malaysia for its property development projects in Malaysia’s first economic growth corridor.

Executive director Datuk Ahmad Zaki Zahid told StarBiz that the company was looking to develop projects on a joint-venture basis with land owners or other parties.


Datuk Ahmad Zaki Zahid ... ‘We see Iskandar offering good prospect.’

“We see Iskandar offering good prospect in the long run in view of the commitment shown by the Federal Government and other stakeholders,” he said.

The company is now undertaking two projects in Johor Baru – the RM550mil Permai psychiatric hospital in Tampoi (to be ready by year-end) and the RM1bil Eastern Dispersal Link Expressway (EDL).

Earlier, at a press briefing, Zaki said MRCB’s wholly-owned subsidiary, MRCB Lingkaran Selatan Sdn Bhd (MLSSB), was on track to complete the EDL project by end-2011 and it would be opened to motorists by February 2012.

MLSSB was awarded the 30-year concession in June 2007, including the four-year construction period.

The 8.1km dual three-lane carriageway – 4.4km elevated and 3.7 At-Grate – is an electronic, open toll system and motorists have to pay their toll charges using the Touch & Go card only.

The expressway provides direct link between the Sultan Iskandar Customs, Immigration and Quarantine complex in Bukit Chagar and the North-South Expressway via the Pandan interchange.

“The opening of the EDL will shorten travelling time by almost 50% to most destinations in Johor Baru and improve connectivity and accessibility,” said Zaki.

He said this would help reduce daily traffic congestion at Jalan Tebrau/Pandan, Jalan Tun Razak, Jalan Skudai/Jalan Abu Bakar and Jalan Stulang Darat.

He said toll charges were only for traffic going to and fro Singapore; while local motorists could use the EDL for free. He added that Works Ministry would announce the toll rate before the opening date.

Zaki said MLSSB was the first highway concessionaire in the country to finance the land cost at RM254mil including allocating RM10mil for squatters relocation programme.

He said the EDL would also help to open up the eastern corridor of Johor Baru which has been earmarked for major development under Iskandar Malaysia.

By The Star

Rehda: Outlook for Johor property market positive

JOHOR BARU: The outlook for the Johor property market this year is expected to be positive following the economic recovery in Malaysia and Singapore.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Lee Kim Chai said it was well known that Johor and Singapore had a long history of economic interdependence.

“Johor and Singapore complement each other in economic activities so economic recovery on both sides of the Causeway will bring benefits to both,” he said in an interview with StarBiz.

Lee said the economic recovery meant that consumers’ confidence was returning after a two-year low period following the global recession sparked off by the US subprime crisis and European financial woes.

He said banks were also offering attractive interest rates to house buyers and consumers were spoilt for choice with the numerous home loan packages available in the market.

Lee said Iskandar Malaysia was another main factor that contributed to the positive growth in Johor’s property market as it helped boost demand for houses here.

Iskandar was the first economic corridor launched in the country. Covering 2,217 sq km area in the southernmost part of Johor, it has received RM55.56bil in cumulative investments, of which 60% were foreign direct investments. .

Lee said the stakeholders of Iskandar should be commended for putting in much effort in attracting both local and foreign investors.

“Iskandar is now gaining momentum with many on-going projects by both the public and the private sectors,’’ said Lee.

He said construction of new roads and upgrading of existing roads within Iskandar would improve connectivity and accessibility; benefitting developers.

However, Lee said Johor Rehda wanted the Economic Planning Unit to look into the directive in its Circular dated Jan 1, 2010, that stipulated foreigners were only allowed to buy properties worth RM500,000 each compared with RM250,000 previously. He said the threshold should only apply for properties in the Klang Valley as it could further dampen the property growth in other states such as Johor and Penang.

Lee said the Johor government had already in place for many years a quota system where foreigners could only make up 20% of buyers for double-storey and the semi-detached houses. “Most of the time, the quota is not even filled. With the RM500,000 ruling, we can imagine the situation getting worse,’’ he said.

Lee said developers taking part in the Malaysia Property Expo hoped to rake in sales of RM200mil.

The event at Danga City Mall started yesterday and ends on Sunday.

By The Star

Mulpha plans to list unit in HKSE

Mulpha International Bhd, a Malaysian property developer, said it plans to list its Manta Holdings Co unit on the Hong Kong stock exchange.

As part of the initial share sale, the Manta unit, which trades and leases construction machinery, will sell 50 million new shares or a 25 per cent stake in the company, Mulpha said in a statement today.

By Bloomberg

Sunway City: Buy, target price RM4.33

ECM Libra Investment Reach maintained its "buy" call with a target price of RM4.33 on Sunway City Bhd (SunCity) after the developer said it would be injecting eight investment properties into a property trust.

The research firm estimates the eight properties to have a value of RM2.9 billion. This would make SunCity's Real Estate Investment Trust (REIT) the largest in Malaysia upon listing.

ECM hasn't changed its earnings estimates for the developer, but said it was nevertheless positive on this latest news given that SunCity made another step towards realising its long-awaited REIT listing plan.

The eight properties are Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.
The sale consideration will be satisfied via cash or units in the proposed REIT, or both.

By Business Times

Sunway City to place properties under REIT

KUALA LUMPUR: Sunway City Bhd (SunCity) and its subsidiaries are proposing to dispose their entire interest in selected properties to a real estate investment trust (REIT) to be set up by SunCity and listed on Bursa Malaysia.

The purchase consideration, which will be determined later, will be satisfied by way of cash or units in Sunway REIT or a combination of both, the company told Bursa Malaysia yesterday.

SunCity said the proposed properties would include the Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.

The company is also disposing three parcels of leasehold land measuring 19,406 sq metres in Selangor to its subsidiary Sunway Pyramid Sdn Bhd (SPSB) for a consideration to be determined later.

SunCity owns a 52% stake of SPSB while the other 48% stake is held by Reco Pyramid (M) Sdn Bhd.

SunCity has also proposed to acquire 48 million shares or 48% of SPSB from Reco Pyramid (M) Sdn Bhd (RPSB) and 9.6 million shares or 48% stake in Sunway Resort Hotel Sdn Bhd from Reco Resort Hotel (M) Sdn Bhd.

SunCity said the investment objectives of the Sunway REIT were to provide the unitholders with an exposure to a diversified portfolio of authorised investments that would provide stable cash distributions with the potential for sustainable growth of the net asset value per unit.

“Subject to the approvals of the relevant authorities, Sunway REIT proposes to undertake a public issue of units in Sunway REIT and subsequent listing of and quotation for its entire issued and paid-up units on the Main Market of Bursa Malaysia,” it said.

SunCity said the proposed disposal of the land and properties would allow the group to realise its investments in the properties.

The proceeds from the proposed disposal of the land and the properties would be used to acquire land bank, working capital, future business expansion and to repay the group’s borrowings, it said.

SunCity added that the disposal of the land and properties would also enable the group to enhance the development of the real estate investment market in Malaysia through its proposed holdings in the units in Sunway REIT as well as its involvement in the management of Sunway REIT upon the completion of the proposed listing.

SunCity said subject to the approvals of relevant authorities,

Sunway REIT has proposed to undertake a public issue of units in Sunway REIT on the Main Market of Bursa Malaysia.

By The Star

SunCity among top gainers in Thursday's morning trade

PETALING JAYA: Sunway City Bhd were among the highest gainers in Thursday’s morning trade. At 12pm, its shares rose 11 sen to RM3.81 with 619,000 shares traded.

The company announced yesterday it is proposing to dispose its entire interest in selected properties to a real estate investment trust (REIT) that will be established by SunCity and listed on Bursa Malaysia.

SunCity said the properties would include the Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.

The company is also disposing three parcels of leasehold land measuring 19,406 sq metres in Selangor to its subsidiary Sunway Pyramid Sdn Bhd for a consideration to be determined later.

SunCity said the investment objectives of the Sunway REIT were to provide the unitholders with an exposure to a diversified portfolio of authorised investments that would provide stable cash distributions with the potential for sustainable growth of the net asset value per unit.

By The Star

SunCity plans property stake sale to REIT

Property conglomerate Sunway City Bhd (SunCity) has proposed to sell all its stake in eight properties to a real estate investment trust for a price that has yet to be fixed.

The properties are Sunway Pyramid shopping mall, Sunway Resort Hotel & Spa, Pyramid Tower hotel, Menara Sunway, Sunway Carnival mall, Sunway Hotel Seberang Jaya, SunCity Ipoh hypermarket and Sunway Tower.

It also plans to sell three pieces of leasehold land in Selangor to Sunway Pyramid Sdn Bhd (SPSB).

SunCity also signed letter of intents to buy 48 per cent of SPSB and Sunway Resort Hotel Sdn Bhd.
The company has hired Maybank Investment Bank to arrange the proposals.

SunCity involves in property development and investments. Its crowning jewel is the RM5.6 billion Bandar Sunway, which spans an impressive 7.0 million sq ft in the Klang Valley.

By Business Times

SunCity to go ahead with REIT IPO

Malaysian property company Sunway City today said it will inject eight retail properties into a real estate investment trust (REIT) for the listing of the assets.

The properties, which include shopping malls, hotels and office towers, will be injected into the REIT at a price to be determined at a later date, Sunway City said in a filing with the stock exchange.

In a separate announcement, Sunway City said it has applied to the Securities Commission (SC) for the proposed listing of the real estate investment trust.

Details of the proposed listing will be announced once it obtains all the relevant approvals, it said.
Sunway City may raise about RM1 billion in the offering and the REIT will likely have a market value of more than RM3 billion,
sources told Reuters in January.

The company has hired RHB Investment Bank and Credit Suisse as the main coordinators for the planned listing of the REIT.

By Reuters

Singapore housing market defies cooling measures

Singapore's housing sector is still sizzling despite government measures to cool it down, with demand fuelled by a strong economy and foreign investor confidence, analysts say.

Hefty price tags have not dented the market, with buyers flocking to pre-construction sales offering blank cheques to reserve condominium units which they expect to rise sharply in value after the projects are finished.

All 202 units at a private condominium in the central business district -- costing 1.2 million-2.0 million Singapore dollars (870,000-1.4 million US) -- were snapped up in just one day at a preview in March, agents said.

About 25 percent of the 56 multi-million-dollar units offered at an invitation-only event at an exclusive waterfront development, The Residences at W Singapore Sentosa Cove, were bought in just one weekend preview.

Waterfront homes boasting unobstructed sea views, marketed as the ultimate experience in lifestyle living, have been prime among the recent launches.

"The market is driven by confidence fuelled by the recovering economy and employment market, and supported by low interest rates," Tay Huey Ying, director for research and advisory at property consultancy Colliers International, told AFP.

"Market optimism is also riding high on the anticipated potential for Singapore to rise in prominence in the investment radar of foreigners, particularly the high net-worth individuals and high-rollers, as a result of the opening of the two integrated (casino) resorts in 2010."

Singapore in February opened its first casino resort complex, which includes Southeast Asia's first Universal Studios theme park.

A second casino built by Las Vegas Sands will open next month.The city-state, a regional financial centre, is also promoting itself as a hub where the world's growing ranks of multi-millionaires can park their money safely.

Warning of a possible bubble that could derail the economic rebound, the government in February imposed new regulations to stem property prices, and warned it was prepared to take further measures if necessary.


But the move, designed to discourage investors who buy and sell for a quick profit, appears to have had limited impact. Private home prices rose 5.1 percent in the first quarter from the previous three months, government figures showed.

Although this was slower than the 7.4 percent rise in the previous quarter, property analysts said prices are expected to continue going up for the rest of the year.

"Barring unforeseen circumstances and further cooling measures, the residential sector is expected to continue to lead the property market in price movement in 2010," Tay said.

Singapore's economy is expected to grow up to 6.5 percent this year after contracting 2.0 percent in 2009 due to the global financial crisis. Even prices for government-built residential highrises, which do not have security guards, swimming pools and other luxuries offered by private condominiums, are heating up.

They rose 2.7 percent to a fresh record in the first quarter compared to the previous three months, according to official data.

Tay said foreigners, including permanent residents, accounted for 28 percent of all private home transactions between January and March 16, surpassing the 26 percent seen at the market's peak in the first half of 2008.

Desmond Sim, Jones Lang LaSalle's associate director for research and consultancy, added: "More foreign buyers are looking to the Singapore residential market as the properties offer further potential for gains given the country's long-term positive economic growth prospects and stable political climate."

Analysts said the government may introduce more measures if home prices risked forming a bubble." The fundamental concern is overt asset prices that could destabilise economic recovery and affect home affordability," said Sim.

But Justin Chiu, executive director of Hong Kong's Cheung Kong (Holdings), was unapologetic at the recent launch of his company's latest development in Singapore."I like bubbles. It's my religion... If there is some bubble, people will be more enticed to go into the market," he said.

By AFP

YTL plans to house hotels under REIT

YTL Corp Bhd has plans to house its various hotel brands into a real estate investment trust (REIT) and list it on the stock market in the near future, said its managing director Tan Sri Francis Yeoh.



The REIT will be modelled similiar to that of LVMH Moët Hennessy Louis Vuitton S.A. (LVMH), a French holding company, recognised as one of the world’s largest luxury goods conglomerate.

LVMH has a group of 50 luxury brands such as Louis Vuitton, Fendi and Marc Jacobs under its stable.

“It’s just the same as LVMH, within the REIT we will be able to own many brands in the hospitality business. Right now we have many brands such as JW Marriott, Ritz Carlton, Muse in Saint Tropez, France, hotels in Bali, Swatch Art Peace Hotel in Shanghai located at the Bund in China and Niseko Village in Hokkaido, Japan and several resorts in Malaysia such as the Pangkor Laut Resort,” he said in an interview with Business Times recently.

He said the Muse hotel in Saint Tropez, France, which is set to be launched in June is an old resort which has been refurbished into an “exciting hotel” will be a six-star resort with an investment of RM140 million.

Yeoh added that the idea of putting the hotels under a REIT was to expand globally, as the group is looking at expanding the brands of hotel through good property buys in the Asia-Pacific region.

“A lot of people ask why I do high-end and it’s because of economic returns, we feel our expertise is much better.... we have access to greatest architects and designers and it’s better to do a masterpiece for the people who want to buy our products,” he added.

“In Asia you get a lot of nice beach areas whereby they are filled with high-rise buildings but I want to do pockets of developments like in Europe... like in Saint Tropez, as there are regulations there that do not allow overbuilding and that is why it’s so beautiful and not overwhelming,” he said.

On the Sentul West housing project, which is the first private gated park in Malaysia, Yeoh said the project has been delayed as the price disparity is too wide compared to Shanghai and Tokyo.

“It hurts me as Malaysia is well developed but still cannot command (the property pricing) of a global city price. Even our hotel rates need to be increased. RM350 for a five-star room is too little ... in New York we give that much for tips,” he said.

Yeoh said the reason why Malaysia has yet to arrive to a global financial city was because the country did not have the right type of international showcase to attract the right type of high spending tourists.

“I am disappointed that we are very slow and we have to move faster so that we can compete with Ho Chi Minh, Vietnam, and Jakarta, Indonesia,” he said.

By Business Times

Ex-CapitaLand exec plans real estate funds

SINGAPORE: Perennial Real Estate, a firm set up by the former head of CapitaLand's shopping mall business, plans to launch property funds that will buy malls in China and Singapore to tap the region's growing consumer demand.

Pua Seck Guan, who left CapitaLand in 2008, is making a comeback in the property fund management scene, drawing on his experience in helping build the Singapore developer's regional shopping mall business and floating off assets via real estate investment trusts (REITs).

Perennial just closed a 1.2 billion yuan (100 yuan = RM47.35) Chinese shopping mall fund aimed at Chinese investors and it has started pre-marketing a similar fund aimed at international investors.

Beijing Hualian Group, a large Chinese retailer, is a cornerstone investor in the yuan-denominated fund, he said.
"Particularly in China, there is a huge amount of opportunity. There is no shortage in the pipeline (and) we can still buy malls at good valuations," Pua, who is Perennial's CEO, said in an interview.

He downplayed risks of a bubble in Chinese retail property, noting it was possible to acquire malls in Beijing for 12,000 to 13,000 yuan per square metre compared with prices of around 20,000 yuan per sq m for residences outside the city centre.

China's retail sales were also growing at a clip of over 15 per cent per annum, he added.

Michael Kerley, a fund manager at Henderson Global Investors, said concerns about property price bubbles in China were overstated, noting the country's high savings rates, rural-to-urban migration and strong gross domestic product (GDP) growth.

"If property prices go up by 20 per cent in London, that's a multiple of 5 times GDP. When they go up by 20 per cent in China, it is only a 1.5 times multiple of GDP," Kerley said.

Similar to CapitaLand and other developers that have diversified into fund management, Perennial is directly involved in the design and management of the malls.

In China alone, the firm employs about 450 people directly or through its partners.

"You need a platform to demonstrate you know the local market... We have anchor tenants who will follow us so we know what kind of rentals we can achieve. We are not the kind of fund managers who pluck numbers from the air," Pua said.

Chinese malls that the Perennial funds invest in will be divested to Shenzhen-listed Beijing Hualian Department Store once the malls develop a track record and are able to deliver steady rental returns.

The Shenzhen firm, which now owns 24 malls, is in the process of being renamed to reflect its status as a REIT-like vehicle for investors seeking fairly high, predictable dividends with the possibility of capital appreciation if property prices increase.

Beijing Hualian Group is an anchor tenant at several China malls owned or managed by CapitaMalls Asia, which was spun off by CapitaLand last year in a US$2 billion (US$1 = RM3.23) initial public offering.

As for Singapore, Pua said Perennial hoped to raise a S$300 million (S$1 = RM2.31) to S$400 million fund that will invest in underperforming malls as well as develop new projects.

The firm has already led one investment, paying S$248 million for Katong Mall in one of Singapore's wealthy eastern suburbs. Food retailer Breadtalk, which will be taking space at the mall after it is refurbished, was an investor in Katong Mall.

Pua, who is widely credited with building CapitaLand's malls business, resigned in September 2008, sparking a 7 per cent fall in the firm's share price amid already uncertain market conditions which caused Singapore's benchmark index to fall 3.5 per cent.

He is a civil engineer by training and holds a masters degree from the Massachusetts Institute of Technology.

Besides China and Singapore, Singapore-based Perennial, whose management includes several former CapitaLand executives, is also active in India where it advises property giant DLF on the retail business.

By Reuters

PLB buys land in Penang

PLB Engineering Bhd has bought via a public auction nearly 20ha of land in Penang for RM38 million, in line with its efforts to increase landbank.

The land was bought through wholly-owned PLB Land Sdn Bhd, PLB said in a filing to Bursa Malaysia yesterday.

The price paid for the land was the highest bid received by vendor Southeast Asia Special Asset Management Bhd, it added.

By Business Times

Re-orienting Penang as heritage destination

For many decades, tourists to Penang tended to give George Town's heritage a miss, and headed instead straight to the beaches.

Locals compounded this situation by either ignoring the city's cultural charms or neglecting them altogether.

However, a homegrown heritage movement - the Penang Heritage Trust (PHT) - kept plodding quietly and sometimes, rather vocally on the need to not only respect, but also give a second look to George Town's unique identity, architecture and traditions.

It is the efforts of these tireless crusaders from the PHT that was instrumental in the international recognition conferred on George Town two years ago, when the inner city was inscribed on the United Nations Educational, Scientific and Cultural Organisation (Unesco) World Heritage List.

Since then, a new air seems to have been infused in George Town, where investors are recognising the potential of heritage tourism.
The old formula of waxing lyrical and positioning Penang as a beach resort with sun and sea and pristine skies can now be replaced with selling the state as a cultural tourism destination.

Private sector initiatives in recent years to restore and rehabilitate pre-war buildings in George Town's inner city has seen new life into what used to be derelict and run-down structures.

While some locals and participants of the Malaysia My Second Home programme have begun to invest in shophouses and call them home, others have seen the potential of housing their businesses in these solid buildings.

In place of empty and neglected shophouses are now charming cafes, restaurants, art galleries and boutique residences.

The government's property market report for 2009 showed that a total of 164 pre-war properties (totalling RM74.22 million) were transacted in Penang during the first six months.

This is in contrast with the 120 pre-war properties worth RM64.45 million transacted in the state during the corresponding period in 2008.

To ensure that investors continue buying into heritage properties in Penang, efforts must be put in place to promote these dwellings when tourism players go abroad to market the state.

Cultural heritage tourism can be a major contributor to the state's coffers if an integrated approach is adopted.

While incentives should not only be given to heritage tourism players, the state must do its homework in better understanding how culture, heritage and the arts can be appealing as tourist destinations.

By "rediscovering" culture as an important marketing tool to attract travellers with special interest in heritage and arts, the spinoffs can be significant.

Heritage tourism, if promoted responsibly and correctly, can help not only preserve the island state's cultural heritage but also facilitate harmony and better understanding among people.

The move will also support culture, help renew tourism and more importantly, serve as a fresh take in branding Penang instead of competing with other island resorts which are miles ahead of the game in selling its sun, sea and skies.

By Business Times (by Marina Emmanuel)

Young Singaporean businessmen see potential in Iskandar Malaysia

JOHOR BARU: Young Singaporean entrepreneurs in small and medium industries (SMIs) are optimistic about investing in Iskandar Malaysia, especially in supporting businesses such as the services and logistics sectors.

Singapore’s National Youth Council member Eng Tok Ching, who led a delegation of 15 entrepreneurs to visit the Pulai parliamentary constituency located within Iskandar Malaysia, said the economic region presented a lot of potential investment.

“It is certainly a very exciting project that we are confident of investing in.

“Given Malaysia’s close relations with Singapore, we feel that entrepreneurs from both countries can benefit from this mega project,” he told reporters after visiting the economic region here yesterday.

Eng said among the attractive investment prospects was the waterfront project, in which both countries could cooperate to develop.

He cited successful western projects such as the Niagara Falls, which was a joint development between the United States and Canada.

“Both counties should look into the possibility of developing the waterfront together. There will be abundant opportunities for businesses from both countries,” he said.

Pulai MP Datuk Nur Jazlan Mohamed, who hosted the Singaporean delegation, said the number of such informal visits should be increased in order to shed more light on Iskandar Malaysia, particularly among the young entrepreneurs.

“I hope that such visits can foster better ties between businesses of both countries and subsequently lead to more business opportunities.

“Such visits are a catalyst towards sparking interest to invest in the economic region,” he said.

He added that there should be no reason for businesses in Singapore not to consider investing in Iskandar Malaysia as the operating costs there would be much cheaper compared to that on the island republic.

Nur Jazlan said more efforts should also be made to attract multinational companies based in Singapore by generating more awareness on the economic region.

“These companies have heard about the mega project but have no proper information. We should generate awareness by organising more visits to the economic region,” he said.

By The Star (posted on 4April2010)

Wulf & Partner plans regional office in Malaysia

GERMAN architecture company Wulf & Partner plans to open a regional office in Kuala Lumpur by as early as this year, to tap into the vast number of opportunities available in Malaysia and other Southeast Asian countries.

"We are bringing along our expertise in architecture to tap opportunities, especially in Malaysia," said Kai Bierich, one of the company's three partners.

Wulf & Partner is eyeing, among others, a piece of the massive development on 26.3 hectares of prime land in Jalan Duta, Kuala Lumpur, by the Naza group.

The project includes the construction of a RM628 million trade centre.
"We heard that the Malaysian government, through Matrade (Malaysian External Trade Development Corporation), wants to build a new trade centre to be developed by a local company.

"Maybe we can share our expertise with the local company for that development or propose to do some business consultation as a start," Bierich said in an email.

Senior Wulf & Partner executives may visit Malaysia next month to pitch for local jobs as well as scout for a site to house its regional office.

Naza group recently sealed a building-for-land deal with the government, allowing it to develop the 26.304 hectare plot in return for building the RM628 million trade centre for Matrade.

The trade centre and other projects planned on the plot would have a combined estimated gross development value of RM15 billion over a 10-year period.

The project's first phase will comprise a 90,000 square metre trade centre on 5.3 hectares.

The trade centre is set to be the largest exhibition and convention centre in the country.

There will also be a hotel, shopping mall and office tower.

Bierich said Wulf & Partner is also keen to cooperate with other local developers. "Maybe we can look for some other upcoming projects by the Malaysian government."

Wulf & Partner's track record includes planning and designing the Stuttgart Trade Fair Centre in Germany, which was built at a cost of nearly euro1 billion (RM4.41 billion).

With a unique design structure, the 105,200 square metres Stuttgart trade centre has hosted more than 50 exhibitions a year since it opened its doors in 2007.

In Asia, Wulf & Partner is currently taking part in a euro100 million (RM441 million) mixed development project in Chongqing, China.

By Business Times (by Zuraimi Abdullah)

Cambodia approves foreign property ownership

Cambodia's parliament on Monday approved a law allowing foreign ownership of property such as apartments and office buildings, in a measure intended to increase economic growth.

The draft law, which will permit foreigners to buy leaseholds on buildings and apartments, but not own the land beneath them, was passed when 85 of 96 members of parliament who attended the Monday meeting voted in favour.

Land management minister Im Chhun Lim told the national assembly the law would boost the kingdom's real estate market and bring in more foreign investment. The law will take effect after approval from Cambodia's Senate and promulgation from King Norodom Sihamoni, which are both considered formalities.

Under old rules, foreign property investment could only be made through the name of a Cambodian national and many were unwilling to risk losing their assets to potentially unscrupulous local partners.

The cash-strapped country's investment law was amended in 2005 to allow foreign ownership of buildings but the legislation was never implemented and the initiative foundered.

Despite the restrictions, billion-dollar skyscraper projects and sprawling satellite cities promising to radically alter Phnom Penh have bloomed over the past few years.

But many projects have been halted or slowed down as Cambodia was buffeted by the world financial crisis after several years of double-digit growth, fuelled mainly by tourism and garment exports.

By AFP

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