YTL sees S'pore as next big market

SINGAPORE: YTL Corp Bhd expects Singapore to be its next big market, said managing director Tan Sri Francis Yeoh.

He said despite the global financial crisis, YTL went ahead to acquire some assets in the island-state in the past two years and these turned out to be highly successful ventures.

In late 2008, YTL bought a slice of Starhill Global REIT which owns 11 prime properties in Singapore, Japan, China and Australia.

Last March, it acquired PowerSeraya Ltd, Singapore's second-largest power generation company.


The dynamism of Asia's economy is very obvious. We believe the region will lead growth in the next 20 to 25 years« TAN SRI FRANCIS YEOH

In real estate, it is developing villas on Singapore's Sandy Island and Kasara in Sentosa Cove, and will redevelop Westwood Apartments on Orchard Boulevard.

Yeoh said the group was keen to tap Asia's growing utilities market, including power generation, water treatment, property and construction, hospitality and communications.

He believes the world's economic epicentre has shifted to the East, with more business opportunities mushrooming in the region.

“The dynamism of Asia's economy is very obvious. We believe the region will lead growth in the next 20 to 25 years,” he told StarBiz over the weekend.

The group, whose core businesses are ownership and management of regulated utilities and other infrastructural assets, derives about 85% of its revenue from abroad.

“We already have an Asian footprint, including shopping centres and a cement plant in China. We also own the second-largest power plant in Indonesia.

“In Singapore, we have PowerSeraya, property projects and Starhill Global REIT.

“China has tremendous opportunities. Even the average person pays cash when buying property,” he said.

To celebrate its successful ventures in Singapore, YTL hosted the Concert of Celebration in the city-state last Saturday.

The free outdoor concert at the Singapore Botanic Gardens saw Italian tenor Andrea Bocelli, renowned flutist Andrea Griminelli, Slovenian soprano Sabina Cvilak and popular Australian singer Delta Goodrem performed for thousands of people.

On whether the weaker pound sterling would affect YTL Power International Bhd's receivables from Wessex Water Ltd, Yeoh said being a diversified international player, there were bound to be earnings translation losses and gains from overseas investments.

YTL Power acquired Wessex Water, a water and sewerage operator in the United Kingdom, in 2002 for £1.24bil.

He said investors should look at the company's long-term operational efficiency and profitability instead of its quarterly performance.

“All our overseas assets operate on their own and having borrowings in their local currencies provide a natural hedge against foreign exchange fluctuations.

“We are very happy with our investment in Wessex and aim to make it the top water and sewerage company in the world,” Yeoh said.

An analyst with a local brokerage said most investors bought into YTL Power for its strong dividend yield.

In the financial year ended June 30, 2009, YTL Power paid 15.75 sen dividend per share, which translated to about 7% gross dividend yield.

For the six months ended Dec 31, 2009, YTL Power's net profit rose 21.7% to RM481.4mil while revenue increased 232.5% to RM6.3bil.

The YTL group has some US$3.5bil cash for its ongoing search of new acquisitions and projects.

Yeoh said whatever the economic cycle, there were opportunities to be seized. “Particularly in an economic downturn, it is a good time for cherry picking.”

By The Star

House auction ruled unlawful

JOHOR BARU: A woman whose apartment was auctioned off by a bank after she failed to settle her instalments of RM1,385.17 six years ago was awarded RM25,000 in damages by a magistrate’s court here.

In her statement of claim filed in the High Court in 2006, Metildah Louis Angel Perix, 51, said she had taken a RM23,750 loan from RHB Bank to buy a low-cost apartment in Taman Rinting in 1999.

However, she was unable to settle her instalments amounting to RM1,385 between May 2004 and November 2004 due to personal and health problems.

After receiving a telegram from the bank about the arrears, Metildah had paid a partial sum of RM500 in January 2005.

She was shocked that the bank had auctioned off the house together with all her belongings on March 2005.

Her claim, filed through lawyers R. Jeyabalan and K. Bharathi, to nullify the auction, sought RM14,543 in damages for her belongings and RM28,000 for the apartment.

Magistrate Khairulnadiah Hasmi ruled that the auction was unlawful and awarded Metildah RM25,000 in damages.

The bank was represented by lawyer Norlinda Lasri.

Metildah said she was happy that she had gotten something back as she spent almost RM30,000 renovating the house.

“I do not understand why my house was auctioned off when just a small amount of money was owed to the bank,” she said.

By The Star

Iskandar to announce RM250m construction packages soon

JOHOR BARU: Iskandar Investment Bhd (IIB) will be awarding six construction packages with a total value of RM250mil to successful bidders by the end of the month.


Arlida Ariff says catalytic projects are progressing well

President and chief executive officer Arlida Ariff said the packages were mostly for the actual construction work on the buildings related to the IIB strategic projects in Nusajaya, including work on facilities for the University of Newcastle Medicine Malaysia Campus (NUMed) in EduCity, the Marlborough College in International Resort and the Legoland Theme Park in Medini.

“Our planned catalytic projects within the Nusajaya development zone are progressing well and ready for completion as scheduled,” Arlida told StarBiz.

Nusajaya, spanning 9,307.76ha, is one of the five flagship development zones in Iskandar Malaysia. The others are the JB City Centre, Western Gate Development, Eastern Gate Development and Senai-Kulai.

Arlida said the RM300mil NUMed campus on a 5.26ha site in the 123.42ha EduCity was scheduled for completion in May 2011, and the Marlborough College should open in September 2012.

She said Asia's first RM700mil Legoland Theme Park would be the centrepiece of the 230.67ha Medini North, which was expected to open in April 2012, a year earlier than planned.

Work on the infrastructure facilities in Medini, a mixed urban development zone spanning 930.77ha in Nusajaya, was already 46% completed, she said, adding: “Some RM4.2bil has been allocated for the infrastructure inclusive of roads, drainage, earthworks, retention ponds, flood mitigation and telecommunication.”

She said earthworks for Legoland were under way while work on the buildings and attractions in the theme park would start in the third quarter of the year.

The development of projects in Medini is undertaken in partnership between the private and public sectors.

The key investors include IIB, Mubadala Development Co, Aldar Properties, Kuwait Finance House and Millennium Development International.

The overall development of Medini is divided into four distinct zones with separate themes - the Lifestyle and Leisure North, the Financial District, the Medini Central and Lifestyle and Leisure South.

Arlida said IIB and the Iskandar Regional Development Authority were accountable for the success of Iskandar as they were answerable not only to Johoreans but also all Malaysians, as the growth corridor would benefit the whole country.

IIB is backed by Khazanah Nasional Bhd, which holds 60% equity, while the Employees Provident Fund and government-linked company Kumpulan Prasarana Rakyat Johor Sdn Bhd each has 20% equity.

By The Star

PKNS to redevelop old, prime locations

The Selangor State Development Corporation (PKNS) has embarked on the redevelopment of old residential and commercial sites in Selangor to take advantage of their prime locations.

Its general manager, Othman Omar, said the corporation had identified 16 locations in the state to be redeveloped over the medium and long term.

"For a start, it has embarked on redevelopment of Pusat Bandar Keramat near the Jelatek LRT station in Kuala Lumpur," he told a briefing after signing a memorandum of understanding between PKNS and Bernama for the supply of news and information in Petaling Jaya today.

Othman signed on behalf on PKNS and Bernama general manager, Hasnul Hassan, signed on behalf of the national news agency.
Also present were PKNS deputy general manager Md Nasir Md Arshad and Bernama editor-in-chief, Datuk Yong Soo Heong.

The new development at Pusat Bandar Keramat, which will have a gross development value of RM1.3 billion, will be known as Datum Jelatek and will comprise residential and commercial properties, including a shopping mall and recreational facilities.

Othman said the redevelopment included providing compensation to the previous residential and commercial owners.

He said the objective of the redevelopment was to leverage on the prime locations of these areas and for PKNS to provide better amenities to the residents.

"Our old apartments used to be single room or studio types. Under our new development, we intend to provide more for the residents," he said.

By Bernama

China's property prices rise again in April

Property prices in China posted the biggest year-on-year jump in nearly five years in April, official data showed Tuesday, amid persistent fears about a growing bubble in the real estate sector.

Prices in major cities rose 12.8 percent on year in April, the National Bureau of Statistics said on its website, marking the biggest year-on-year rise for a single month since the survey was widened to 70 cities in July 2005.

The statistics bureau had previously collected data on 35 major cities.

The pace accelerated from the 11.7 percent increase in residential and commercial property prices recorded in March and a 10.7 percent rise in February.

The figure came after a top housing official said last week that China's recent measures to rein in soaring property prices had been effective in stabilising the real estate market.

"The trend of excessively fast rising residential property prices in some cities has been curbed, sparking a wide, positive response in society," Qi Ji, vice minister of housing and urban-rural development, said in a online chat.

Chinese authorities have issued a slew of measures in recent weeks as they seek to prevent the property market overheating and derailing the world's third largest economy.

The authorities have tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down-payments for second homes.

By AFP

Naim, CMS and BDA to develop RM1.5bil new township

From left: Datuk William Wei, Datuk Mohidin Ishak and CMS group managing director Datuk Richard Curtis exchanging documents at the MoU signing ceremony on Monday.

KUCHING: Naim Holdings Bhd, Cahya Mata Sarawak Bhd (CMS) and Bintulu Development Authority (BDA) have formed a joint venture (JV) to develop the proposed Samalaju new township, which is estimated to cost at least RM1.5bil.

Located within Sarawak Corridor of Renewable Energy, the project will comprise residential developments, schools, clinics, commercial centres and recreational facilities for about 50,000 people.

Naim has a 60% stake in the JV while CMS and BDA hold 30% and 10% respectively. BDA is the state agency tasked with the planning and development of Bintulu.

Naim executive director Datuk William Wei said the proposed new township, which would span more than 2,200ha, would be located about 15km north of the proposed Samalaju Industrial Park where energy-intensive industries would be sited.

He said at least 5,000 units of houses would be built in the new township.

“The JV (vehicle) will also develop and operate world class facilities for executives employed by the various industries,” he told reporters after the signing of a memorandum of understanding for the JV yesterday.

The houses and facilities are expected to be completed by the first quarter of next year.

BDA general manager Datuk Mohidin Ishak said construction work for the proposed plants for some of the energy-intensive industries in Samalaju Industrial Park would start next year.

Sarawak Aluminium Company Sdn Bhd' aluminium smelter and Japan's Tokuyama Corp polycrystalline silicon plant will be located at Samalaju Industrial Park.

Hong Kong-based Asia Minerals Ltd has also proposed to build a manganese smelting factory at the industrial park.

By The Star

Naim, Cahya Mata in RM1.5b project

Naim Holdings and Cahya Mata Sarawak will develop a township in Samalaju, Sarawak, to cater for an estimated 50,000 workers and their families.

Naim Holdings Bhd plans to partner Cahya Mata Sarawak Bhd (CMS) and a local government agency to build a RM1.5 billion township in Samalaju, Sarawak, which will cater for the expected boom in the working population.

The Samalaju Industrial Park is located 80km north of Bintulu and the proposed township will be home to those who will work at a giant aluminium smelter and other high-technology industries.

The new township, covering an area in excess of 2,200ha a few kilometres from the Samalaju Industrial Park, will cater for the estimated 50,000 workers and their families.

Construction will start next year and the township will be developed over 10 years.
"The township is really required there. It won't work to have the workers commute between Bintulu and Samalaju," Bintulu Development Authority (BDA) general manager Datuk Mohidin Ishak said in Kuching.

The state government has approved the town's master plan, he said.

Yesterday, BDA signed a memorandum of understanding with Naim and CMS to form a joint-venture company. Naim will hold 60 per cent of the tie-up, with CMS having 30 per cent and BDA the balance.

Naim was represented by executive director Datuk William Wei, and CMS by group managing director Datuk Richard Curtis.

Mohidin said that their first priority would be the construction of "world-class standard" temporary camps for the 3,000 to 5,000 workers involved in building the town and those whose companies would be relocating to the industrial park.

Construction of the camps just a kilometre from the park will start very soon and is scheduled for completion by the first quarter of next year, Wei said.

The camps will be converted into storage facilities when the construction frenzy is over.

Construction of the township will only start next year.

Wei said that it would have all the amenities of a modern township.

"There will be schools, a police station, medical facilities, commercial centres and recreational facilities."

The Samalaju Industrial Park is an integral part of the state's industrial development corridor, the Sarawak Corridor of Renewable Energy.

At least two smelting plants, including the proposed Sarawak Aluminium Co - a joint venture between mining giant Rio Tinto and CMS - will be sited in the area.

There will also be a plant from Japan's Tokuyama Corp that will make solar panels and a new deepwater port.

By Business Times

Sunway project in China’s Xuan Cheng

SUNWAY Holdings Bhd has signed a memorandum of understanding (MOU) with China’s Xuan Cheng Municipal Government to develop a two million sq m land into an integrated city in Xuan Cheng, 260km east of Shanghai.

The project will feature an international-standard entertainment park, an exhibition centre, hotels, shopping malls, offices and residential units on land owned by the Xuan Cheng Municipal Government.

Under the MOU, Sunway will be the master developer and will undertake a feasibility and market study on the proposed development.

By Business Times

Sunway Hldg rises on China property deal

Sunway Holdings Bhd, a Malaysian builder and property group, rose to its highest level in almost one week in Kuala Lumpur trading after signing a preliminary agreement for a China development.

The stock rose 2 per cent to RM1.52 at 9.20 am local time, set for its highest close since May 4.

By Bloomberg

Plenitude to buy Penang land

PETALING JAYA: Property developer Plenitude Bhd told Bursa Malaysia that it had entered into a sale and purchase agreement with Geotrade Sdn Bhd to acquire 27 parcels of freehold land in Batu Feringghi totalling 40.8 acres for RM45mil.

Plenitude said in an announcement to Bursa Malaysia that the acquisition would enable the company to tap on an existing project in the location.

By The Star

SunCity launched new development in Penang

An artist impression of the Sunway Aspera 3-storey terrace homes

Sunway City Berhad (SunCity) launched Sunway Aspera, a development that comprises 76 units of 2-storey and 9 units of 3-storey terrace homes in a relaxing seaside environment in Sungai Batu, Penang, on May 6.

These terrace homes are uniquely designed where life's best is experienced to its fullest in both an indoor and outdoor environment. Ideally nestled near the sea, these modern homes boast a built-up that is fitted with separate wet and dry kitchens, a spacious master bedroom with a dedicated walk-in wardrobe and a private bay window.

The estimated gross development value is RM47 million and pricing of the units starts from RM495,000 onwards. The lot sizes are 20’ x 60’ and 20’ x 65’ for 2-storey terrace houses and 22’ x 70’ for 3-storey terrace houses.

Sunway Aspera follows the success of the Group’s well-received development, Sunway Bukit Gambier which comprises of 3-storey courtyard homes, 3-storey semi-detached homes and 3-storey bungalows in Bukit Gelugor, Penang.

SunCity’s property development division, Malaysia, managing director Ho Hon Sang said, “The Group has been building quality properties in Penang since 1992 with the Seberang Jaya township which comprised of 3-storey shop offices while the first residential project was the 2-storey terrace houses and commercial shop houses at Sunway Tunas in Bayan Baru. At Sunway City, we place great emphasis on developing homes with lush greenery to provide families with a naturally relaxing and comfortable living environment as can be witnessed in completed developments such as Sunway Bukit Gambier and Sunway Tunas.”

“The launch of Sunway Aspera is another addition to our portfolio of properties in Penang and we intend to solidify our presence further with new launches in the future. We trust that with our established track record in building quality properties, Sunway Aspera will receive good response from the public.”

Apart from Sunway Aspera, SunCity has other projects in Penang, including Sunway Merica and Sunway Prima.

By The Star

Plenitude to buy land in Penang

PLENITUDE Bayu Sdn Bhd plans to acquire 27 parcels of freehold land for RM45 million in Penang's North East district to develop another residential project.

In a note to Bursa Malaysia today, the subsidiary of Plenitude Bhd said it would acquire the land from Geotrade Sdn Bhd-Eden Ferringhi Resort.

The acquisition is strategic as it would allow the group to tap on the success of the Bayu Ferringhi project in Batu Ferringhi, it said.

"The development of residential properties to be undertaken on the said land will not only provide Plenitude with a new sustainable source of income but it will also enhance its position in the property development sector," it said.

Plenitude Bayu, formerly known as Golden Valley Network Sdn Bhd has proposed to develop medium high-end, semi-detached houses and condominiums, with the target market being first and second home buyers, resort home buyers, expatriate community and Malaysia My Second Home applicants.

It said the purchase price of RM45 million for the parcels of land was derived after taking into account the development potential of the land arising from the surrounding matured housing and infrastructure.

It also took into account the established medium to high end, semi-detached and bungalow houses next to the land and the close proximity to Batu Ferringhi beach and town area.

The proposed acquisition is expected to be completed in the first half of the financial year ending June 30, 2011 and contribute positively to the group''s earnings in future years.

By Bernama

Allstones eyes deals to revive abandoned projects

Allstones Group Asia plans to revive a few abandoned housing and commercial projects in Malaysia, Thailand and Singapore, founder and chairman K.H. Sim said.

It has in the past revived three projects which are now called Taragon Yap Kwan Seng, Taragon Puteri Cheras and Taragon Puteri KL.

Sim said Allstones is focusing on Malaysia currently and is looking at two projects, but he declined to name them.

"We expect to complete the purchase of one project in the third quarter and start working on it by December. We hope to strike the deal for the second project in the fourth quarter and re-launch it early next year," he said.

The value of the two projects, including the three that Allstones has revived, is close to RM1 billion.
"It is challenging as sometimes banks don't want to take a haircut or shareholders don't want to sell. But it is a great satisfaction when it happens," he said.

Allstones has also been invited to do projects in Thailand and Singapore.

In Kuala Lumpur, Allstones is in talks to buy land for a residential development and hopes to seal the deal by year-end.

Sim said the outlook for residential properties in the Klang Valley is currently positive.

"If you are going to be an investor in properties, always look for projects that offer you value for money and go in early. And don't link yourselves to branded developers. Look for churns so you could have good returns," Sim said.

By Business Times

Allstones to set up RM750m fund

ALLSTONES Group Asia will set up a RM750 million property fund here by early next year to invest in distressed assets in Southeast Asia, founder and chairman K.H. Sim said.

The property development and investment group is also mulling to launch a real estate investment fund (REIT) in Malaysia or Singapore.

"I prefer a REIT instead of getting the company listed as we rather take the development risk ourselves and provide steady income to investors. We are building our investment portfolio," Sim said.

"In my view, REIT is quite an interesting valuation as it allows developers to monetise the assets. REIT is also a secured investment against buildings and assets," he said in an interview with Business Times in Kuala Lumpur recently.
On the fund, Sim said he is talking to a Singaporean and an Australian group as well as a local private investor to invest and make up about 10 per cent of the fund. The rest will be held by insurance and pension funds.

By Business Times

Sunway to build integrated city in China

SUNWAY Holdings Bhd plans to develop an integrated city in XuanCheng, 260 km east of Shanghai.

In a filing to Bursa Malaysia today, Sunway said the city would consist of an international-standard entertainment park, exhibition centre, hotels, shopping malls, offices and residential units.

It said the land would be acquired from XuanCheng Municipal Government.

"Sunway will be the master developer and will undertake a feasibility and market study on the proposed development.
"The project is expected to contribute positively to the future earnings of the company," it said.

By Bernama

New accounting method likely to affect property stocks

PETALING JAYA: The International Financial Reporting Interpretations Committee on real estate development (IFRIC 15), which will become applicable for the accounting period commencing July 1, is likely to affect investor sentiment in property stocks, analysts said.

Under the new ruling issued by the Malaysian Accounting Standards Board, property developers are to recognise revenue based on the completion method instead of the percentage-of-completion method in current practice.

ECM Libra Capital Sdn Bhd research head Bernard Ching said the new ruling could deter shareholders that based their investments on a company’s earnings.

“Investors that are not so sophisticated and less informed about the company’s operations will be deterred when they notice that the company’s earnings aren’t so consistent,” he told StarBiz.

“Fundamentally, this new ruling does not change anything as there is no cashflow impact. The only difference is recognition of the company’s accounting profits,” said Ching.

He said developers exposed to strata-high-end projects, which often take three years (as opposed to landed residential projects that take only two years) to complete would be most affected.

“Developers with projects that are few and spaced would have the most impact as opposed to say, township developers that have more projects. Large companies with good track records are least likely to see any impact.”

Ching said a way around this was for developers to become more transparent with their investors.

“The bulk of the listed property companies do not engage their investors. Companies like Sunrise Bhd are great at engaging investors, as they have regular analyst briefings and are quite transparent with their projects.”

“It’s up to the developer to be more transparent with their launches. Companies that consistently make headlines will continue to do well under the new ruling.”

An analyst from a local bank-backed brokerage who requested anonymity called the new ruling “silly.”

“It’s a silly rule. What is wrong with the way earnings are reported that requires it to be amended? Whoever came up with the ruling I feel has zilch industry experience.

“In terms of dollars and cents, it’s business as usual for the developers. Only on paper does it look different. However, it would deter investor confidence as company earnings would look choppy.”

He, however, added that the reaction, if any, would be temporary.

“Investors who are not aware may be shocked and this may create a knee-jerk reaction. But I think after a while, they will adjust.”

The analyst said he wasn’t going to revise his outlook for property stocks because of a “change in accounting rules.”

“A company’s share price is based on cashflow, not on accounting profit. A change in accounting rules does not mean the company isn’t making money.”

Affin Investment Bank, in a recent research report, said earnings for developers were expected to be lumpy and volatile, and might appear negative on the surface.

“Analysis on profit and loss, such as profit margins, (including quarterly earnings) will be tough, as it will be purely based on the guidance from developers on their job completion schedule. Earnings from newly launched properties can only be seen two to three years after the properties are completed.

“As such, valuations based on earnings are not quite valid to reflect future earnings prospects. Instead, valuations based on RNAV (revised net asset value) will be widely used to assess the relative attractiveness of different property stocks,” it said.

The research house does not anticipate developers to continuously launch projects just to have a healthy balance sheet.

“The property sector is known to be cyclical in nature and pretty much depends on economic conditions. Despite the adoption of IFRIC 15, we believe developers will still launch new properties at the best and right time that they reckon.

“Rolling out new properties regularly to smoothen out earnings does not make sense as developers will have to carry higher inventory, especially during bad times, which slows down turnaround time.”

It also said developers with fewer launches and smaller landbanks could be badly affected.

“Earnings could be in the red for a few years before we see positive earnings contribution from property sales. Furthermore, companies which have established a dividend policy may not be relevant anymore and investors and analysts will have to depend on guidance from management.”

By The Star

Sapura Auto to sell property for RM49m

SAPURA Auto Sdn Bhd is proposing the disposal of a piece of land in Kuala Lumpur, which presently houses an automobile showroom, to Sime Darby Motor Division Sdn Bhd for RM49.054 million, cash.

Sapura Auto, a subsidiary of Sapura Resources Bhd, said the proposed disposal could result in a net gain of RM22.98 million and address the continued losses arising from the group's automotive business.

"The proposed disposal enables the company to unlock the value of its assets and raise immediate funds which may be channelled towards the acquisition of new businesses, expansion of existing businesses and or pare down the group's borrowings," it said in a note to Bursa Malaysia today.

Sapura Auto bought the land and the building for RM26.13 million in November 2006.
However, the land and building has been collectively appraised by Messrs Henry Butcher for RM47 million in comparison with existing properties transacted around the vicinity.

By Bernama

Dubai house prices up 2pc year-on-year in Q1

DUBAI: Dubai house prices climbed 2 per cent year-on-year in the first quarter, their first annual rise since the 2008 financial downturn, but oversupply would pressure prices going forward, Colliers International said yesterday.

Prices in the Gulf Arab emirate, home to the world's tallest building, rose 4 per cent in the first quarter from the previous quarter.

That marked the third consecutive quarterly rise, Colliers said, in a sign that the property market is stabilising.

House prices in Dubai have slumped some 55 per cent since their peaks in the third quarter of 2008.
"There will be significant oversupply in the market by the end of the year so it is anticipated the index will experience fluctuations going forward," said Ian Albert, the firm's regional director, referring to its house price index.

"What will be important to watch is how much of the supply matches the end-user demand for community-oriented developments," he added.

Colliers International estimates that 41,000 homes will enter the market by the end of this year, mostly in the low to mid-income segments.

Colliers International said that while demand is not expected to match the supply growth.

Colliers remained unclear as to whether future supply would have a negative impact on established projects, which are typically more resilient to market conditions.

Albert added that while banks are starting to lend again, it was unlikely that all of the supply would meet the new and much stricter lending criteria.

Apartment prices in Dubai rose 6 per cent in the first quarter from the previous quarter, villa prices climbed 2 per cent while townhouse prices fell 4 per cent, the index showed.

House prices and rents are set to fall 10 per cent more in 2010 and not recover until 2012, a Reuters poll showed in April.

By Reuters

Mah Sing’s foray overseas

KNOWN for its shrewd land acquisition and fast project turnaround strategies, Mah Sing Group Bhd wants to leverage on its local success by venturing into new markets overseas.

The group aims to launch its maiden project in China by the first half of 2011. 


Tan Sri Leong Hoy Kum ... Supply and demand in China has still not yet reached an equilibrium, with demand for properties still far outstripping supply.

Group managing director cum chief executive Tan Sri Leong Hoy Kum says going offshore is one of the steps needed to realise the group’s aim to be a regional property player.

“Venturing overseas has always been our medium to long-term strategy. Our objective is to create an international brand by having offshore projects. At the same time, we will be able to improve our skills from these new markets,” he adds.

Within the next five years, Mah Sing is targeting sales from overseas to contribute 30% of its sales.

“The market is more global now and we feel there are opportunities to be tapped in other countries. Although our focus now is China, we have set up an office in Vietnam to evaluate opportunities there. We believe both China and Vietnam are population driven economies which will have a strong appetite for property,” Leong tells StarBizWeek.

It may also consider other countries like Singapore, Indonesia and Australia if there are opportunities.

Leong says Mah Sing will enter the foreign markets via joint ventures with suitable local partners.

“We will start with the right size so as not to stretch our balance sheet. When the returns are good and consistent, we will consider expanding our overseas presence.”

On the choice of China for its maiden offshore foray, Leong says property demand in China is population led and there are still plenty of opportunities there.

“Supply and demand in China has still not yet reached an equilibrium, with demand for properties still far outstripping supply,” he says.

China’s urban population is rising at 15 million per year, and assuming 15 sq m per capita living space and 40 sq m per unit, the potential demand requires 225 million sq m or 5 million units of smaller size housing units a year.

More than 70% of the land supply in 2010 has been allocated for urban renewal and for smaller to medium-sized apartments as they are in short supply. Developers focusing on smaller sized apartments from 45 sq m to 100 sq m will have a ready market.

He says landed properties should also do well due to the short supply.

“China has the world’s largest foreign exchange reserves, and it also has one of the most number of millionaires and billionaires in the world. The International Monetary Fund has forecast that China’s gross domestic product will grow by 10% these two years,” Leong says.

On the risk of a potential property bubble in China, he says the Chinese government has implemented swift and decisive steps including raising the downpayment for first time homebuyers to 30% from 20%, while those buying their second home have to make a 50% downpayment.

To curb speculative activities, the government has also reimposed the 5.5% transaction tax on properties held for less than five years. Credit lending has also been tightened and interest rates raised.

Last December, Mah Sing signed a letter of intent with its Chinese joint venture partner, Danlong Realty (Beijing) Co Ltd to undertake an integrated development in Wujin, Jiangsu.

Mah Sing has a 51% stake while the Chinese partner owns 49%.

It plans to develop a prime property project comprising medium to high-end residential and commercial properties.

The project on 87 acres along Wuyi Road, a major thoroughfare in the central of Wujin, has an estimated gross development cost of US$620mil.

“Since it is our first offshore project, we are careful in ensuring that our concepts, products and designs will fit in well with the local market. We certainly want to introduce some of our award-winning concepts and designs to China,” Leong says.

Residential products will include condominiums of around 1,000 sq ft while commercial projects will comprise retail outlets and offices.

Leong says Mah Sing is keen to explore other opportunities in China’s second and third-tier cities that are experiencing rapid residential, commercial and industrial developments.

“These are the cities that will be China’s engine of growth. Prominent international and Chinese developers are already entering these markets.

“There are so many cities that offer opportunities like Chengdu, Guangzhou, Dalian and Suzhou. The important thing is to find a good local partner, and also have the ability to work well with the local authorities,” he adds.

By The Star

Coping with the big tickets

Although there are buyers who have no qualms paying the prevailing high price for their dream house in a well sought after location, many Malaysians are really worried about the rising house prices and wonder how they are going to manage.

There is certainly cause for concern as a property is a big ticket item and paying for it takes up a big chunk of a person’s income. Depending on how much downpayment has been paid for a property, mortgage loan repayment can easily takes up to 40% of a borrower’s monthly paycheck.

National Housebuyers Association (HBA) honorary secretary-general Chang Kim Loong laments that even new graduates are finding it increasingly difficult to make ends meet these days.

He says a new law graduate who earns RM2,200 a month is also not in a position to sign up for a new house on their own (unless they have rich parents to chip in).

A decent terrace house in a relatively good location cost nothing less than RM400,000.

Owning a car is also another must-have item at least until the public transport system gets a total overhaul. Add them up with the other daily ancillary expenses including food, toll rates and petrol, among other things, we see why many people must be struggling to make ends meet.

There are some industry players who have the habit of comparing property prices in Malaysia with those in other countries like Singapore, China, Hong Kong and Bangkok, and comment that local property prices are still much cheaper.

It is not healthy to make such conclusions based on the property price alone. Other factors also should be factored in and it is important to see how much disposal income they have left after paying for all their expenses.

One of the most important considerations is the people’s income level. Malaysia is not yet a high income economy and most Malaysians are still stuck in the middle income trap. Although there is the aspiration to move the country up the income ladder, it will take a few years at least before that can be realised.

The whole economic structure needs to be revamped. Even at the service industry sector such as restaurants, employers have to be prepared to employ only Malaysians and pay them higher salaries.

Instead of relying on the cheap foreign labour, it is about time to revert back to our local staff. This is one of the necessary early changes that need to be implemented for the realisation of the Prime Minister’s New Economic Model.

As we know, things are getting more unpredictable these days and we are witnessing first hand that the only certainty is uncertainty.

The contagion effect of the global financial crisis is still raging in some parts of Europe and may spill over to other parts of the world.

Like pendulums, economies and industries are being subjected to the vagaries of the ever changing external environment. The most susceptible will be industries that depend on external demand, including commodities and manufacturers of products for export.

While the landed property market is still quite well cushioned from the external factors, there is still some degree of influence as far as foreign demand is concerned.

Being quite a “domesticated” market has its advantages as developers can depend on local buyers to drive demand.

The country’s relatively young population provides a ready catchment market and consistent demand for houses, especially mass housing products.

But the high-rise condominium market, especially in the KLCC area, is still languishing.

It will take a while for the new supply of condominiums to be absorbed and for prices to get back to their previous high.

For landed housing, demand has been kept robust by the prevailing low interest rates and easy availability of bank financing.

Given the intense competition among banks and ample liquidity in the system, mortgage rates will likely remain accommodative.

Nevertheless, it is important for all stakeholders to keep a close watch on the market and make the necessary changes whenever necessary to ensure the market remains stable.

Deputy news editor Angie Ng hopes buyers and industry players will exercise prudence for a sustainable and healthy property market.

By The Star (by Angie Ng)

Kuok company sells KLCC land for RM150m

A piece of land measuring 0.65ha on Jalan Perak next to Wisma Hong Leong was sold for RM2,200 per sq ft, sources say

A Kuok family company has sold a piece of prime land in the Kuala Lumpur City Centre for some RM150 million, making it the family's second land sale in the past six months.

Sources told Business Times that a piece of land measuring 0.65ha on Jalan Perak next to Wisma Hong Leong was sold for RM2,200 per sq ft.

It is understood that the land is currently being managed as a carpark.

The land is said to belong to Wisma Perak Sdn Bhd. A search with the Companies Commission revealed that Wisma Perak is equally owned by FFM Bhd and Kuok Brothers Sdn Bhd. FFM Bhd is wholly owned by agri-business giant PPB Group Bhd.
One source said the land has been sold to a local individual. The land also has a development order for a twin tower structure comprising offices and serviced apartments.

In December 2009, the Kuok family sold a piece of land measuring 43,559 sq ft and a vacant two-storey bungalow for RM87.12 million near the Petronas Twin Towers to Ireka Corp Bhd

The land has two frontages, Jalan Kia Peng and Changkat Kia Peng, and was sold for about RM2,000 per sq ft.

The owners of the land are said to be related to Malaysia's richest man, Tan Sri Robert Kuok.

This land will be developed into a single tower of high-end residences with a net sellable area of 212,650 sq ft. The project is expected to have a gross development value of RM272 million and provide a gross margin of some RM58 million.

By Business Times

A new Kampung Baru

To go: Kampung Baru may soon undergo a facelift now that the Cabinet has approved the redevelopment plan

AFTER five decades in limbo, attempts to redevelop Kampung Baru may soon become a reality as the Cabinet has agreed to the concept and redevelopment plans put forward by the Federal Territories and Urban Wellbeing Ministry.

Its minister, Datuk Raja Nong Chik Raja Zainal Abidin, said even though the Cabinet had given the green light, nothing has been finalised yet as the ministry would have to meet the stakeholders, including residents and landowners at the end of the month.

He also said he would be meeting the government-linked companies (GLCs) that would be involved in the redevelopment plans.

“There are three components to the redevelopment plans — one of it is that the Cabinet has agreed that Kampung Baru will be developed comprehensively — in totality. No areas will be left out — in other words all landowners will get the same deal.

“Secondly, we will set up a Kg Baru Development Corporation, to be endorsed by Parliament, and thirdly only trustworthy developers from GLCs will be identified for the redevelopment,’’ he said.

Asked if he would be using the same formula for Kampung Baru like the one used in Kerinchi flats, Nong Chik said: “No, the Kerinchi flats is only a small area and its owners are strata title holders. Kampung Baru is a much bigger area and there are multi-owners to one plot of land. And also the developers will not come from the private sector but will be a GLC.’’

However, Nong Chik said the monitoring authority would be the Kampung Baru Development Corporation which would ensure that the village’s rustic and Malay identity as well as the people’s interests would be safeguarded.

He added that the corporation would come under the FT Ministry’s purview.

Nong Chik said the ministry had identified a mechanism to resolve the multiple ownership problem, but added that he was not at liberty to divulge it to the press without speaking to the stakeholders first.

“All I can say is we have various mechanisms, but we have to see which one is most agreeable to the landowners. I will present the full picture when I meet them,’’ he said.

Nong Chik said Kampung Baru must be developed no matter what and that the place would look like a modern township in par with KLCC one day. “The Malay characteristics will be retained but in a modern sense — it will not look like the pasar malam that it is now.

“The whole process of talking to the people, setting up the Corporation and identifying the GLCs will take about six months and once we get these technicalities out of the way — only then we can tackle the legal aspects,’’ he said.

By The Star

SunCity to fortify Penang presence

Sunway City Bhd (SunCity) continues to fortify its reach and presence in Penang with the launch of Sunway Aspera, a freehold residential development at Sungai Batu.

"The estimated gross development value of the project is RM47 million and pricing of units, start from RM495,000 onwards," Suncity said in a statement here today.

The development comprises of 76 units of two-storey and nine units of three-storey terrace homes.

"At Sunway City, we placed great emphasis on developing homes with lush greenery to provide families with a naturally relaxing and comfortable environment, such as Sunway Bukit Gambier and Sunway Tunas," said Managing Director, Property Development Division, Malaysia Sunway City Bhd, Ho Hon Sang.

Apart from Sunway Aspera, SunCity has numerous other exciting projects in Penang, including Sunway Merica and Sunway Prima.

By Bernama

Kumpulan Jetson unit set to form JV

PETALING JAYA: Kumpulan Jetson Bhd’s wholly-owned subsidiary Jetson Construction Sdn Bhd (JCSB) has entered into a joint-venture agreement with China State Construction Engineering (Hong Kong) Ltd to form a joint-venture (JV) entity.

The company told Bursa Malaysia that the JV would prepare and submit a tender invited by Naza TTDI Sdn Bhd for the proposed development of a 38-storey building with 10 levels of podium for Platinum Park in Kuala Lumpur.

JCSB will have a 60% stake in the JV, which is aimed at pooling and sharing resources in technical and management skills, finance and equipment.

By The Star

China plans new curb on developers

BEIJING: China is drawing up a new curb on property developers as part of a host of measures to cool the country’s red-hot property market, the state-controlled China Securities Journal reported yesterday.

The plan would ban developers from investing revenue from pre-sales of uncompleted property developments in new projects, it said, citing an unnamed source close to the Housing and Urban-Rural Development Ministry.

By Reuters

Plans to build an Empire of hotels

The Empire Hotel in Subang, Selangor, may be a new player in the market, but plans are already afoot to grow the brand and its business.

The RM60 million hotel is part of the RM250 million Empire Gallery project, which is developed and managed by Mammoth Empire Holdings Bhd.

The Empire Hotel is a 198-room boutique business class hotel that is scheduled to open at the end of this month.

Its general manager, Ng Yee Ming, said the company is looking to open a second boutique hotel in Kuala Lumpur and possibly a third in the suburbs of Selangor.
The group may run as many as three hotels in the next three years.

Although a new hotel brand, Ng feels that it can be successful as the combination of location, product and service will surely lure guests to its doors.

"The hotels will be located in prime areas, and we expect that we will do well with competent people on board," Ng told Business Times in an interview.

"Our focus will be on guest experience," he said, adding that it has hired staff from five-star hotel chain.

The hotel, which has four restaurants, has a lean staff to room ratio of 0.65.

For the maiden Empire Hotel, Ng expects that the hotel will be able to rake in an average room rate (ARR) of between RM230 and RM250 per night and fill 65 per cent of its rooms in the first year of operation.

Should the hotel achieve its projection, it would be a commendable feat, as most hotels in their first year of operations garner about 50 per cent occupancy.

Ng said the optimism stems from the fact that its product is new and the Empire Gallery also houses a mall and offices.

In the first year, the Empire Hotel also aims to achieve gross operating profit (GOP) of 32 per cent. GOP is the gross revenue from rooms, food and beverage, laundry or business centre minus cost of operations like wages, electricity and amenities.

In the second year, the hotel is looking to improve occupancy to 70 per cent and post an ARR of RM250 per night.

The hotel, described as having an artistic feel, plays with a lot of colours. The owners brought in 10 carpenters from China to help with the numerous details in the decoration.

The person behind Mammoth Empire is Datuk Sean Ng and the group's projects include The Ara, The Loft and The Atrium in Bangsar, Kuala Lumpur. It has also done projects in Senawang, Negri Sembilan, and Bandar Baru Bangi, Selangor.

By Business Times

Iskandar to hold more roadshows in Singapore

Arlida Ariff meeting participants at the Iskandar Malaysia Forum 2010.

Iskandar targets investments in tourism, leisure, services and property sectors

SINGAPORE: Iskandar Investment Bhd (IIB) will hold more roadshows in Singapore within the next six months to attract more investors to Iskandar Malaysia.

President and chief executive officer Arlida Ariff said IIB wanted to attract more Singaporeans – who were already making inroads in Iskandar in the education and the health sectors – to the tourism, leisure, services and property sectors.

“There seems to be renewed interest from investors in the republic in Iskandar following the economic recovery both in Singapore and Malaysia,” she told journalists yesterday after presenting a keynote address in the Iskandar Malaysia Forum 2010 jointly organised by IIB and the Institute of South-East Asian Studies.

Arlida said Singapore was one of Iskandar’s top investors with its private companies holding more than RM2.64bil worth of investments in the manufacturing sector.

In fact, long before Iskandar was launched on Nov 4, 2006, Singaporeans already formed a large group of foreign property buyers in Johor and had regarded the state as their second home, she said.

Now, more Singaporean property buyers were attracted to Johor’s real estates, especially with the upcoming business and lifestyle developments that were due to be completed in Iskandar, she said, adding that Singapore investors would normally give their first preference to invest in Malaysia, particularly in Johor, before looking at other areas in the region.

“This is due to the close proximity between Singapore and Johor and historically both countries have been interdependent on each other economically.”

Arlida said the forum was a good platform for potential investors from Singapore to get a first-hand information from IIB on the opportunities in Iskandar and the development taking place in Malaysia’s first economic growth corridor.

She said many participants at the forum wanted to know whether Prime Minister Datuk Seri Najib Razak was committed to continuing the development in Iskandar as the corridor was the brainchild of his predecessor, Tun Abdullah Ahmad Badawi.

She said stakeholders of Iskandar – the Federal and Johor Governments and the Iskandar Regional Development Authority – and IIB had assured investors that the policies remained unchanged despite the change in leadership.

By The Star

Loh & Loh expects to do better this year

LOH & Loh Corp Bhd, owned by construction outfit UBG Bhd, hopes to do better in the current financial year ending December 31 2010 in view of new projects in hand.

The major jobs it has secured over the past 18 months are RM142 million worth of infrastructure works in Medini in Johor's Iskandar Malaysia and a RM273 million job in the Seremban-Gemas double-tracking railway project.

"We are a healthy company. We should continue to do well this year. Our property development is building up and we expect higher contribution from the division," its chief executive officer Jason Loh said.

Its new projects are Idaman Hills in Selayang, comprising 38 semi-detached homes and 142 bungalows, and The Peak, a high-end residential project in Bandar Sri Damansara, worth more than RM300 million.
Last year the company posted a net profit of RM27.5 million, 16 per cent more than in 2008.

Loh & Loh was set up in 1965 as a civil construction company by the late P. K. Loh.

The company's first contract was for earthworks for a housing project in Bangsar, Kuala Lumpur, for RM6 million.

The company grew quickly and over the past 45 years has built 15 dams, 48 water treatment plants and over 50 water intakes and pumping stations.

It has also constructed and installed over 250km of large diameter pipelines, and built sewerage plants, river gates, reservoirs, buildings, roads, bridges and golf courses.

By Business Times (by Sharen Kaur)

Ivory Properties all geared up to join big players

Ivory Properties Group Bhd, one of Penang's top property companies, plans to join other big players in the country by expanding into Selangor, Kuala Lumpur and Indonesia.

Its group managing director Datuk Low Eng Hock said the company has been building itself from scratch for the past 11 years and is now setting its sights on projects outside its traditional stronghold.

"We have received numerous enquiries to carry out property projects in Kuala Lumpur, Selangor and Medan, Indonesia.

"We are in the midst of talking with various parties, including listed property companies, to carry out projects either on a joint venture basis or on our own," Low told Business Times in an interview in Penang.
Soon-to-be listed Ivory expects to raise RM44.9 million via its initial public offering (IPO) slated by June 10, after postponing its listing plans since 2008 due to the weak market situation.

Low said the company's forte include adding value to existing but slow-selling projects as well as rescuing and reviving abandoned projects, rejigging them and then reconceptualising the projects to catch the attention of buyers.

This provides a win-win situation for Ivory, buyers, authorities and the land owners.

"Although land is limited in the Klang Valley, there are many slow- selling projects or abandoned projects which we can turn around together with our joint-venture partners or carry out on our own," he said.

Low added that Ivory plans to grow beyond its "rescue mission", but to do so would require massive capital expenditure which is a handicap for a private limited company such as Ivory Properties.

"That is why we are going for listing to raise money required for our future expansion as well as boost our credibility," said Low, who is a civil engineer by training.

Low said he gets ideas to boost sales of slow-selling properties from looking at newspaper advertisements in countries such as Hong Kong and Singapore, and emulating and inspiring his staff on how property players there do sales as well as come up with revolutionary building designs.

By Business Times

Danajamin guarantees Asian Pac unit’s PDS

PETALING JAYA: Danajamin Nasional Bhd has guaranteed the RM200mil private debt securities programme of Asian Pac Holdings Bhd’s subsidiary, property development company Syarikat Kapasi Sdn Bhd.

In statement, Danajamin said Syarikat Kapasi would be utilising the funds raised to finance the construction of a real estate development project in Kota Kinabalu known as KK Times Square II, which would comprise a retail shopping mall, serviced apartments and shoplots.


Ahmad Zulqarnain Onn says guarantee enables companies to access the bond market for funding

Danajamin chief executive officer Ahmad Zulqarnain Onn said Danajamin’s financial guarantee enabled a wide spectrum of companies to access the bond market for funding.

“The increased accessibility allows more companies to raise long-term borrowings to finance their businesses at a reasonable cost of financing,” he said.

Danajamin is the nation’s first financial guarantee insurer, which was established to provide financial guarantee insurance for bond/sukuk issuances to enable viable Malaysian companies to access the bond/sukuk market for capital-raising.

It has approved a total of RM1.7bil guarantees as for to-date for companies in various industries including oil and gas, property and construction, plantation and infrastructure.

By The Star

Aussie home prices surge, set stage for rate rise

SYDNEY: Australian house prices surged 20% in the year to March, the fastest pace on record and a powerful argument for the central bank to raise interest rates this week.

Other data released yesterday showed Australian manufacturing activity running at its fastest pace in eight years, while a private gauge of inflation pointed to percolating price pressures as the economy gained steam.

All of which stoked speculation the Reserve Bank of Australia (RBA) would pull the trigger on another rate rise at its monthly policy meeting on Tuesday, which would be the sixth increase in seven meetings.

“All the various measures of house prices are now growing in the double digits and that’s a major plus for household wealth, consumption, building employment and the like,” said Brian Redican, a senior economist at Macquarie.

“It’s a big tick in the box for a rate hike tomorrow.”

A Reuters poll of 21 analysts taken on Friday found 16 expected the cash rate to be raised 25 basis points to 4.5%, making 150 basis points of policy tightening since October.

Investors were reluctant to bet too heavily on a rate rise, having been burned badly in February when the central bank chose to skip a move.

Interbank futures showed a near 60% chance of an increase while a measure from Credit Suisse put the probability at 66%.

If the central bank does choose to keep its policy rates steady on Tuesday, the market is almost certain it will get to 4.5% in June and then keep nudging up rates to 5% or 5.25% by the end of 2010.

Some had thought that market uncertainty over debt stricken Greece could deter the central bank from raising rates this week, but that risk had diminished after Athens agreed to a 110 billion euro aid deal.

The Australian dollar bounced from its lows on the day following the housing data.

By Reuters

Hunza Properties net profit doubles

PETALING JAYA: Penang-based Hunza Properties Bhd’s net profit surged 95.26% to RM11.29mil for the quarter ended March 31, 2010 compared with the previous corresponding period on higher property sales and contributions from the Gurney Paragon project.

The company said in an announcement to Bursa Malaysia yesterday that revenue for the quarter jumped 214% to RM58.52mil.

By The Star

Sunway-Opus alliance

SUNWAY Holdings Bhd's wholly-owned subsidiary Sunway Marketing Sdn Bhd will partner Opus Developers and Builders Pte Ltd to set up a joint-venture company and expand its business to India.

The joint-venture group known as Sunway Opus International Trading Pte Ltd, will import and sell finishing products like sanitary wares and fittings, ceramic tiles, marble, pipes, iron-mongering and hardware products, paints and home furniture.

Opus has several construction and property development projects in Hyderabad, India, including the iconic Sunway Opus Grand, a joint venture between Sunway City Bhd and Opus.

By Business Times

Magna Prima to start project in 2011

Property developer Magna Prima Bhd plans to start development work on its 6.95-acre land in Petaling Jaya by next year. To be known as Jalan Gasing project, Magna Prima has purchased the land for RM48.5 million cash from Petaling Garden Sdn Bhd.

Magna Prima Chief Executive Officer Yoong Nim Chee said the company would develop a neighbourhood type lifestyle centre consisting of commercial and retail outlets.

"The Jalan Gasing development's estimated gross development value is RM300 million," he said in a statement today.

Located at the intersection of the Jalan Gasing/Jalan Templer roundabout, it is one of the last parcels of prime freehold land in Petaling Jaya, and one of seven projects in the Klang Valley that Magna Prima will be launching over the next 18 months.
"We are looking at the possibility of commencing development by next year once the planning, zoning and other permits come through. Completion is slated to occur within four years," Yoong said.

The Jalan Gasing project is part of the RM1 billion worth of projects that Magna Prima will be launching over the next 18 months.

Yoong said Magna Prima had also secured full project financing totalling RM59 million from CIMB and EON Bank for two of its projects in Selayang and one in Bukit Jalil respectively.

By Bernama

Tap opportunities in Vietnam, developers told

Real estate adviser CB Richard Ellis (Vietnam) Co Ltd says Malaysian developers should take the opportunity to make inroads into Vietnam as the economy is improving.

Its managing director Marc Townsend said there was more affordability in the market, coupled with transparency and clearer rules regarding when a developer can sell a property and collect deposits.

But he cautioned developers that the market was still volatile and subjected to speculative swings.

Townsend said developers looking to explore Vietnam should study Ho Chi Minh City and Hanoi as there was a lot of land for development.

"Foreigners are restricted to land development in Vietnam. They should form joint ventures with the locals to enter the market," Townsend said.

He added that the focus for foreign developers in Vietnam currently was to build condominiums with "selling off" as their exit strategy.

Berjaya Land Bhd and Perdana ParkCity Sdn Bhd are looking to develop new projects in Vietnam.

Perdana ParkCity, the subsidiary of the timber-based Samling group, will launch its maiden township project in Hanoi, worth some RM6 billion by June or July this year as it is bullish on the market.

Berjaya Land, which had bought Sheraton Hanoi Hotel and Towers and InterCon Hanoi Hotel previously, will start to develop its US$6.3 billion mixed project in Dong Nai Province in two years.

Other companies that have forayed into Vietnam include SP Setia Bhd, Ireka Corp Bhd, Gamuda Bhd, Sime Darby Group and Sunrise Bhd.

"Among the developers, SP Setia has had some success in Vietnam," Townsend said.

Sunrise and Sime Darby had respectively ventured into hospitality projects in Hanoi and Vung Tau.

"Other developers have sniffed around since 2006 but did not commit as the process to identify sites, structure a joint venture, find funding and clear land for development takes a long time," Townsend said.

Department store operator Parkson Holdings Bhd owns three stores in Ho Chi Minh City, and one each in Hanoi and Hai Phong. It has talked about setting up more stores in Vietnam in the future.

By Business Times

Sepang's Sea Tropics ready for launch this year

The management of Sepang Gold Coast project in Selangor will launch the RM300 million Sea Tropics Resorts & Hotel later this year.

To be ready in end-2012, Sea Tropics will have two blocks with water features.

The management is yet to decide if it will be owned and operated by them, or sold and leased back or a combination of both.

"Sea Tropics will be our third phase and it will be on land hotels and villas. We are looking at 300 to 400 rooms and to be categorised in the four- or five-star category," general manager of Golden Palm Resort & Spa Sdn Bhd Francis Lee said.
The Sepang Gold Coast first phase is the 392-unit Golden Palm Tree Resort & Spa water villas.

The second phase is the Escapade. The Escapade, described as the epicentre for fun and entertainment at the resort, will offer water surfing, canoeing, kayaking, and archery, canopy walk and yoga gym. It will also have a large number of food and beverage outlets.

Lee, in a recent interview with Business Times, said that 80 per cent of the water villas have been sold, with studio units costing RM740,000 and a three-bedroom unit at RM3.1 million. The developer is keeping the remaning 20 per cent of the units.

Golden Palm Tree has provided an eight per cent guarantee on returns in the first two years for the first set of purchasers and a seven per cent guaranteed return over seven years for the second batch of purchasers.

The resort will be operational by the end of June and is forecasting an average occupancy of 30 per cent to 35 per cent in the first six months of operations.

Lee said that it is looking at an introductory price of RM599 per night for the six-month period, which will include five meals and alcoholic drinks.

The hotel expects customers to be mainly Malaysian (40 per cent) and Singaporeans (20 to 25 per cent). The rest are expected to be from North Asia.

Sepang Gold Cost Sdn Bhd, the project developer, is a 30-70 joint-venture between Permodalan Negeri Selangor Bhd (PNSB) and Sepang Bay Sdn Bhd.

Sepang Bay is owned by Bapak Yanki Regan, who is also the founder of CNI International.

By Business Times

SunCity, SSTEC to develop Tianjin project

Ngian Siew Siong (far left) exchanges a collaboration agreement with Goh Chye Boon. Witnessing the signing are Tan Sri Jeffrey Cheah (second from left) and Dr Lee Boon Yang.

PETALING JAYA: Sunway City Bhd (SunCity) has inked a collaboration agreement with Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) for a RM5bil eco-themed project in Tianjin Binhai New Area in China.

The integrated development on 110 acres within the 30 sq km Tianjin Eco-City will be a 60:40 joint venture between SunCity and SSTEC.

SSTEC, a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by the Keppel Group, is the master developer of the eco-city.

Signing on behalf of SunCity yesterday was international property development division managing director Ngian Siew Siong while SSTEC was represented by chief executive officer Goh Chye Boon.

The signing was witnessed by SunCity chairman Tan Sri Jeffrey Cheah and Keppel Corp Ltd chairman Dr Lee Boon Yang.

According to Ngian, the development would comprise 90% residential component or about 5,000 residences and some commercial properties, including a retail centre. It will have an estimated gross development value (GDV) of RM5bil.

The houses will mostly be medium-range condominiums of 900 to 1,200 sq ft priced at about RM500 per sq ft.

The project is expected to take off in the first quarter next year and will take five years. It will start contributing to SunCity’s earnings from 2012.

Ngian said Tianjin Eco-City was currently the largest eco-city being developed in the world and it was expected to have a population of 350,000.

“As the first eco-city in China, the aim is to promote an ecologically and socially sustainable environment, and be a model for sustainable development for other cities in the future,” he added.

Ngian said the company’s development would be based on the lifestyles of health and sustainability philosophy that would elevate the green status of the city.

He said SunCity, which was a pioneer in developing green buildings in Malaysia, was the only local developer to be selected for the project. The other regional developers include Keppel Land of Singapore, Farglory Group of Taiwan, Shimao of Hong Kong, Mitsui Fudosan of Japan and Vanke of China.

With a fast growing middle class population and high urbanisation, China will be one of the biggest foreign markets for SunCity.

Projects from there were expected to make up more than 50% of the company’s foreign earnings in the coming years, Ngian said.

SunCity’s maiden project in China, the 17-acre Sunway Guanghao project in Jiangyin, is targeted for launch by June. The project, comprising medium-end condominiums and specialty shops, has an estimated GDV of RM492mil.

It is a 39:26:35 joint venture between SunCity, SunwayMas Sdn Bhd and Shanghai Guanghao Real Estate Development Group Co Ltd.

By The Star

SunCity keen to work with Keppel

Property developer Sunway City Bhd (SunCity) hopes to commence talks with Singapore's Keppel Corp Ltd over a possible future collaboration, following its agreement to jointly develop a RM5 billion residential project in Tianjin, China.



"Keppel is a global player and we would like to work with them on their projects internationally.

"There is no serious discussions as yet," SunCity international property development division managing director Ngian Siew Siong said.

SunCity yesterday signed a collaborative agreement with Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) to develop the project on 41ha, which is within the 3,000ha Tianjin Eco-City integrated development.

SSTEC is the master developer for Tianjin Eco-City, a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by Keppel Group.

Ngian said the new project will create a platform for more collaborations for the firm, especially with Keppel in future.

SunCity has completed a six month feasibility study and a business model for the 41ha project.

A 60:40 joint venture company between SunCity and SSTEC will build 5,000 units of luxury homes comprising bungalows, villas, semi-detached and terraced houses and low-rise condominiums. There will also be a street mall with small office home office (SOHO).

Ngian said the five-year project will incorporate the concept of lifestyles of health and sustainability (Lohas) and sell mainly in the Chinese market.

Lohas is a concept dedicated to promoting and improving health and fitness, environment, personal development, sustainable living and social justice.

"We are bullish on the market as this is the first-of-its-kind Lohas-centric development in China," Ngian said.

He added that houses in the first phase of construction, which will start early next year, will be priced from RM500 per sq ft.

The project will be funded through bank borrowings.

By Business Times (by Sharen Kaur)

Budget travellers to drive demand for more affordable lodging

MALAYSIA’S hospitality industry can look forward to stronger growth as there is room for more niche facilities.

In the next three years, the industry will see the addition of about 5,600 new four-star and five-star hotel rooms. New facilities such as limited service hotels and service apartments are also expected to come on-stream.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) president James Wong believes the tourism market is bound for healthy growth as there is a need for more hotels and related facilities.

“The fastest growing markets are expected to be China and India, and as there are more budget travellers from those countries, we will need to build more affordable yet good quality accommodation including no-frills hotels,” he says.


Previndran Singhe says low-cos carriers have boosted tourism.

Zerin Properties chief executive officer Previndran Singhe says low-cost carriers have boosted the tourism industry. He says the country’s competitive rating has made it one of the most popular value-for-money destinations in the region.

Previndran says to continue attracting tourists into the country, air fares and travel packages must continue to remain competitively-priced.

Citing Malaysia’s ranking in the Travel & Tourism Competitiveness Report 2009, he said there is opportunity for more varied hospitality products and established brands to come into the country. These include spa resorts, premium hotel groups, branded budget facilities and heritage and eco-friendly facilities.

Knight Frank Research, in its latest Real Estate Highlights, says some of the proposed hotels in the capital city include a boutique hotel in KL Sentral, a 200-room Dorsett Regency business boutique hotel in Sri Hartamas, a 7-star Palace Residential Suite at the Mines Resort City with 430 suites, and a business or 5-star hotel from the redevelopment of Bangunan MAS along Jalan Sultan Ismail.

Other upcoming projects include the redesign, renovation and rebranding of the Crown Pricess Hotel as Doubletree, an upscale hotel brand under the Hilton group.

Schedule to open in the second quarter, Doubletree will form part of The Intermark, a mixed-use property development in KL.

Concorde Hotel Kuala Lumpur will undergo a RM40mil facelift over the next three years.

The 502-room Grand Dorsett Subang (formerly Sheraton Subang Hotel) was opened last October after a RM60mil renovation and refurbishment exercise.

One of the trends in the local hospitality market is the growing popularity of service apartments as an alternative to hotels, especially for long stay visitors.

“With relatively lower rates and more living space, including facilities for light cooking, service apartments are suitable for longer-term stay. This suits newly posted expatriates who need a few months accommodation as they search for a permanent residence,” says Wong.

Home-grown hospitality brand, Fairlane Hospitality, which manages Fairlane Residences in Bukit Bintang and myHabitat 2 service studios at Jalan Aman, sees potential to grow into a bigger hospitality company.


Ariff Ng at the myHabitat 2 service apartments.

General manager for area operations and business planning, Ariff Ng says well managed service apartments with good facilities are still in short supply.

“Fairlane Hospitality offers a truly Malaysian hospitality service that is set to redefine business and executive travel.

“Each apartment unit is designed with high quality fittings and furnishings that include a fully equipped kitchen with cooking implements, cutlery and clothes washer-dryer,” says Ng.

The company’s main target market is business travellers, corporate executives and families on vacation.

The myHabitat 2 service studios is a project by Asia Pacific Land Bhd and is expected to be completed in the third quarter of this year. The studio and two-bedroom apartments, with a built-up of 600 sq ft to 1,140 sq ft, are priced from RM760,000 to RM1.3mil.

By The Star (by Angie Ng)

Should house buyers be wary?

Property consultants say the recent price rise in properties in select locations reflect pent-up demand after the market slump in the first half of last year.

Should house buyers be wary of rising property prices? Anecdotal evidence seem to point to significant price increases in the Klang Valley and Penang although the National Property Information Centre report for 2009, which was released on April 23, noted that residential property prices remained stable for the year.

The all-house price index, which is a gauge of national prices, saw a gain of only 1.5%.

ECM Libra Capital Sdn Bhd research head Bernard Ching says in a report dated April 26 that the gain is “the lowest annual gain since 2001.”

Several property consultants say the recent price rise in properties in select locations reflect pent-up demand after the market slump in the first half of last year.

They also say that the Malaysian residential property market sentiments are, while not immune to global economic factors and price movements, largely driven by house buyers here.

It was recently reported that the uptrend in property prices was driven by easy financing schemes offered by banks in partnership with developers and that this had led to some speculation in the market.

However, the consultants feel that any increase in property prices will still be selective and overall prices will not rise drastically but gradually.


Paul Khong says prices for the luxury condominium sub-segment of the residential property market, are still between 10% and 20% below the market’s peak.

CB Richard Ellis Sdn Bhd executive director Paul Khong says there have been some price increase but only for landed residential properties and in selected locations.

“Over the past one year, residential landed property prices have gone up 15% to 20% in good locations in and around Kuala Lumpur and Petaling Jaya,” he says.

Khong says prices for the luxury condominium sub-segment of the residential property market, are still between 10% and 20% below the market’s peak.

This sub-segment has been badly hit by the financial crisis as a considerable portion of sales are to foreigners. The number of foreign property buyers have dropped since early last year.

Khong feels that fewer launches and higher demand will affect the prices of landed residential properties.

Ching says property launches have been moderate after bottoming out in the first quarter of 2009. This trend was in line with on-the-ground observation of developers preferring to launch in smaller parcels.

“We expect moderate growth in property launches to continue in 2010. This is supported by declining building plan approval,” he says.

Ching says the last quarter of 2009 was a record quarter for both the residential and commercial segments of the property market despite the uninspiring set of numbers for the year as a whole.

He says in 2009, the residential segment recorded a marginal improvement in overall transaction value of 1.3% to RM41.8bil while the commercial segment contracted marginally by 1.4% to RM16.4bil.


Dr Teoh Poh Huat says the recent property price increases reflect the different economic fundamentals at play compared to a year ago.

Henry Butcher Malaysia (Penang) Sdn Bhd director Dr Teoh Poh Huat says the recent property price increases reflect the different economic fundamentals at play compared to a year ago.

He says the property market is driven by the sentiments of Malaysian buyers although these buyers may take into consideration factors at the macro or global levels. “But these factors are short-term whereas investing in property is long-term,” Teoh says.

He says the significant increase in transactions for the first quarter of this year is a reflection of these sentiments following an unexpected expansion of the economy in the final quarter of 2009.

“Confidence in the economy is quite strong. There is liquidity due to pump-priming measures as well as the high savings rate in the country. This is reflected in the transactions,” Teoh says.

By The Star (by Fintan Ng)

Classifying green buildings

In 2007, Ken Holdings Bhd executive director Sam Tan unveiled the company’s then-latest project Ken Bangsar, a residential development in Bangsar, Kuala Lumpur. He said that building would be a trendsetter but he did not say in what way.

Fast forward 2010. On April 26, Tan was among several recipients of Malaysia’s Green Building Index (GBI) award (design assessment stage).

It will have to submit an application for a second stage (completion and verification) later on. After that, there will be three-yearly audits to maintain its GBI rating.

GBI’s four rankings are based on the point system - Certified is the lowest (50 to 65 points), Silver, Gold and Platinium (> 86 points). Ken Bangsar was classified a Gold (76 to 85 points). The building also has Singapore’s Gold Mark.

There were other GBI recipients: Kajang Resources Corp Sdn Bhd (for KRC Sales Gallery, Kajang, Selangor), Bandar Utama City Corp Sdn Bhd (office block 1 First Avenue, Petaling Jaya), Central Holdings Bhd (Menara Worldwide KL) and Sunway SPK Homes Sdn Bhd (3 Harmoni residential, Kepong, Kuala Lumpur). Past president of Persatuan Arkitek Malaysia (PAM) and GBI accreditation panel member Dr Tan Loke Mun also received an award for his home.

The GBI is Malaysia’s rating tool for buildings to promote green living and working.

Green living is more than the location of your home or office. It is the type of buildings you inhabit. Essentially, green living is pretty much based on that famous quote: “A penny saved is a penny earned.” Hence, a kilowatt saved is a kilowatt earned. Put another way, the cheapest – and greenest – energy is the energy you never have to use.

All the green building standards around the world have different emphasis. Singapore’s Green Mark is on energy efficiency because it has a small land mass and is dense. GBI’s emphasis for residential segement is on sustainable site planning and management because developers keep building new townships that is not supported by public transport system while the commercial segment is energy efficiency. GBI was launched in May last year, four years after Singapore’s Green Mark.

Says one of the proponents of GBI, Loke Mun: “The GBI is a sort of check-list. It is a rating tool to give developers and owners an opportunity to adhere to a set of guidelines in their design and construction that can provide energy and water savings, a healthier indoor environment, better connectivity to public transport and the adoption of recycling.

“Simply put, it is like a recipe that lists out all the ingredients needed to make a good dish,” he says.

There are six criteria:

·energy efficiency;

·indoor environment quality;

·sustainable site planning and management;

·material and resources;

·water efficiency; and

·innovation.

The thrust of GBI is to have buildings, designed, constructed and fitted out in such a way that will help to reduce wastage of every form.

Having our own green standard is inevitable.

Says Loke Mun: “There are simply too many leakages, be it water, energy or resources. Our salary is so small we cannot afford to lose the little we have. GBI will help us to prepare for the increase in cost when managing and operating a building.”

For a commercial building, the bulk of its operating and maintenance cost comes from energy usage, or air conditioning. Water wastage is another issue; having an abundance of rain does not mean it is all right to waste water. Ikea, the Swedish furniture brand, was among the first to have a rain harvesting system.

The professional bodies that initiated the GBI are PAM and the Association of Consulting Engineers Malaysia (ACEM), which came together in August 2008 to form a sustainability committee to undertake the task of setting up the Green Building Index Sdn Bhd. While GBI is issued by a company, Singapore’s Green Mark is issued by the government.

In Malaysia, there are currently two tools – a GBI for residential buildings and one for non-residential. While the Government does not plan to make it mandatory for new buildings to be green-compliant in order for its certificate of fitness to be issued, unlike Singapore, having a tool like GBI will encourage the more responsible developers to go for sustainability.

(In Singapore, new buildings must have the Green Mark before its certificate of fitness can be issued).

While the above two are for new buildings, there is also a need for a rating tool to rate existing buildings. Over the week, Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui unveiled a variation of the GBI, to rate existing buildings.

Tan says every year, depending on the country, new buildings are added to the stock of buildings a country has. In Malaysia, about 5% to 15% are added to its current stock. This means about 85% of the existing stock are old buildings.

Already, the more responsible developers are retro-fitting their old buildings and among the chief aims is to save energy.

By The Star (by Thean Lee Cheng)