Sunway REIT attracts huge foreign funds

KUALA LUMPUR: Sunway Real Estate Investment Trust (REIT), the largest property trust in Asia excluding Japan since 2007, has attracted a significant amount of funds from foreign institutional investors.


Tan Sri Jeffrey Cheah (right) looking at Sunway REIT’s share price after the listing ceremony. With him is Datuk Jeffrey Ng.

Sunway REIT’s initial public offering (IPO) on Bursa Malaysia Main Market yesterday raised RM1.49bil.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said the property trust was 45% subscribed by foreign institutional investors.

“This (foreign stake) clearly reflects their confidence in the performance of the trust,” he said after the listing ceremony.

Sunway REIT posted a one sen discount over its offer price of 90 sen upon listing. The price opened at 89 sen and hit a high of 89.5 sen in early morning trade before closing at 88.5 sen with 72 million units changing hands.

Ng said the property trust was well subscribed by investors despite market volatility and current global economic conditions.

Upon listing, Sunway REIT had assets worth RM3.5bil and a free float of RM1.6bil.

On Sunway REIT’s yield, Ng said it was about 7.5, which was within the mean range of most REITs, and had the potential to improve over time.

Sunway Group chairman and founder Tan Sri Jeffrey Cheah said with the listing, he hoped to see more companies with deeper awareness and investments in the local REIT market.

“Hopefully, we can continue to gain positive momentum and support from investors and regulators,” he said.

Cheah said with Sunway REIT, investors could now look forward to owning properties in high-growth locations.

“We aim to provide unitholders with exposure to a diversified portfolio of authorised investments which can provide stable cash distribution and a potential for sustainable growth in terms of net asset value per unit.”

He added that Sunway REIT aimed to double its asset size in five to seven years.

The eight properties injected into the REIT are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.

An OSK Research report said with its exposure to the retail, hospitality and office sub-sectors, Sunway REIT was a defensive trust that could offer unitholders long-term growth.

An analyst with another brokerage said Sunway REIT had a huge asset base and the trust could easily be leveraged up.

He said the trust had the capacity to get support from financial institutions to expand quickly by buying “ready” properties without reaching its internal gearing or statutory limit.

By The Star

Sunway REIT unfazed by weak debut

SHARES of Sunway real estate investment trust (REIT), Malaysia's biggest property trust, opened lower on their listing debut yesterday, but management remained unfazed by the stock market's recent weakness.

The stock opened at a 1 sen discount to its offer price of 90 sen and closed at the same price of 89 sen, although the market ended broadly higher.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said he was confident the REIT would perform well despite its disappointing start.

"Nearly half of our investors are foreign investors and we are heartened to see big corporations, both overseas and domestic, investing in us despite the volatile markets of the last two months," he told reporters at a press conference after its listing in Kuala Lumpur yesterday.
The REIT also has cornerstone investors like Singapore's investment firm GIC, Great Eastern Life Assurance Malaysia Bhd, Employees Provident Fund and Permodalan Nasional Bhd.

Cornerstone investors usually join large initial public offerings IPOs and unlike institutional investors, they have a confirmed allocation.

Sunway REIT is Malaysia's largest REIT in corporate history and it is also the largest REIT IPO in Asia, excluding Japan, since 2007.

"We have started the ball rolling for other REITs and I believe they will also gain their momentum. Other new players who come in will have to match the qualities of the fundamentals and when they go out marketing," Ng said.

Sunway REIT is made up of eight Sunway City Bhd's properties in the retail and hospitality sector in Penang, Perak, Selangor and Kuala Lumpur, including the popular Sunway Pyramid shopping mall.

By Business Times

CapitaMalls offer draws strong interest

CAPITAMALLS Malaysia Trust (CMMT) received strong interest for its initial public offering (IPO) of 786.522 million units and has its institutional investors' price fixed at RM1 a unit and that for retail investors at 98 sen a unit.

CapitaMalls Malaysia REIT Management Sdn Bhd, which manages the real estate investment trust (REIT), said at RM1 unit price, institutional investors are expected to get 7.2 per cent distribution yield for 2010 and 7.5 per cent for 2011.

The institutional book for the CMMT was opened for subscription on June 25 before closing on Wednesday, while the retail offering was opened for application from June 28 to July 5, it said in a statement.

CMMT will be listed on the Main Market of Bursa Malaysia on July 16.

Chief executive officer Lim Beng Chee said the CMMT was priced at one of the tightest yields for a Malaysian REIT IPO despite the challenging market conditions.

The pricing is above Capita-Malls Asia's book value while at a discount to CapitaMalls Malaysia Trust's valuation. This creates value for CapitaMalls Asia shareholders and provides a reasonable IPO discount for new unitholders, hence creating a win-win outcome for all," he said.

Upon listing, the CMMT will be the largest 'pure-play' shopping mall REIT in Malaysia, with a market capitalisation in excess of RM1.3 billion and free float of 58 per cent, it said.

Meanwhile, the statement said CMMT has a total of 1.350 billion units in issue and under its IPO, a total of 786.522 million units were offered to institutional investors in Malaysia and overseas, and to retail investors in Malaysia only.

The retail offering in Malaysia was 67.50 million units.

The statement said the Employees Provident Fund and Great Eastern Life Assurance (Malaysia) Bhd have signed up as cornerstone investors for the share offer to subscribe for 90 million units in aggregate.

By Bernama

Property market recovering, but oversupply of condo and office units

PETALING JAYA: The residential property market, especially landed residences, is on a recovery mode and prices of houses in some parts of Kuala Lumpur and Petaling Jaya have rebounded by 15% to 25% in the past one year, property realtors and consultants said.

However, the high-rise condominium and office market is still facing an oversupply situation and will weigh down on the market at least over the next couple of months.

CB Richard Ellis Sdn Bhd executive director Paul Khong said Malaysians still had money to invest and residential was the hot favourite at the moment.

“Landed properties have rebounded in all segments across the board while in the strata segment, the high-end ones in KLCC and Mont’Kiara have moved relatively slower due to the current supply situation and the small tenancy market,” Khong added.

Khong said that although the Klang Valley landed housing market was hot, “it is not a property boom.”

According to Knight Frank Ooi & Zaharin Sdn Bhd managing director Eric Ooi, the landed residential property market has fared well as it is considered a good time to buy now.

“The market has certainly picked up due mainly to limited supply, the high liquidity in the system, and growing interest in property as a reliable investment instrument,” Ooi said.

The affordable entry cost and an all-time low bank interest rates have also contributed to the improved sentiment and rising house prices.

Ooi said landed residential property prices in some parts of Kuala Lumpur, such as Desa Parkcity, had breached new high and house prices in well-sought-after locations would continue to strengthen.

“I believe even the commercial sector has seen the worse and although the market is still soft, it is stabilising. If the economy continues to grow steadily, the commercial sector will be next to rebound,” Ooi added.

Ooi said that besides the good location, the unique concepts and exclusive features of some of the projects were the reasons for the strong demand and prices.

DTZ Nawawi Tie Leung Sdn Bhd executive director Brian Koh concurred that supply of landed housing property had not caught up with demand as there was a lag in new supply coming onstream after developers held back their project launches in the past two years.

“The performance is still very location centric and concept driven. Buyers prefer well-established neighbourhoods and those with good concepts. Security has become a top priority and that’s why gated and guarded projects are doing very well,” Koh said.

He said even some KLCC condominiums were attracting interest again.

“This time around most of the buyers are well heeled Malaysians who appreciate the exclusivity of the residences in the KLCC area. Having came off from their previous high, there is potential for some price upside. Moreover, prices of residences here are still lower than those in cities in other parts of the region.”

Koh said there was a need to monitor the impact of potential rise in interest rates on property demand especially in the medium to lower price range.

“The higher entry cost may affect demand going forward but it could have contributed to buyers locking in at the current low entry cost,” he added.

Perdana Parkcity Sdn Bhd director of marketing and sales Susan Tan said a combination of factors including a pent up in demand and limited supply were the main causes of the current price rebound in the residential market.

“There has been no new supply of landed housing in Kuala Lumpur in the past year. A fear that prices will climb further due to an expected rise in the cost of construction is also fuelling demand now.

“Buyers are willing to pay for the right address, a good overall concept and well landscaped and maintained environment. That’s why some highly sought after projects can fetch quite high price premiums,” Tan said.

Perdana ParkCity is the developer of the 473-acre Desa ParkCity in Kuala Lumpur which has fetched one of the highest premiums in terms of landed property prices in the capital city.

By The Star

Sunway REIT falls below reference price

Sunway Real Estate Investment Trust (Sunway REIT) fell on its Malaysian market debut after raising about RM1.5 billion in Southeast Asia’s biggest initial public offering this year.

Sunway REIT’s units were trading at 89 sen each at 9.14 am local time, below its opening reference price of 90 sen.

Meanwhile, Jeffery Cheah, chairman of its parent company Sunway Holdings Bhd said the REIT aims to double its asset size in five to seven years.

“The whole purpose is to grow it,” Cheah told reporters in Kuala Lumpur today.

By Bloomberg

Someone bought a penthouse for RM38mil in KL!

Binjai is the only condominium located on the 50-acre KLCC Park.

Some property consultants believe it is the Malaysia's largest condominium transaction

KUALA LUMPUR: The Binjai On The Park development in Kuala Lumpur City Centre (KLCC) caused a stir in the property market when one of its two super penthouses was sold last month for RM38mil, making it among the most expensive homes to have been sold in Malaysia in recent years.

Some property consultants, such as Zerin Properties chief executive officer Previndran Singhe, believe that this is the country’s largest condominium transaction, although it has yet to be verified.

The buyer is a corporate figure who has been on Forbes magazine’s list of wealthiest people. On June 22, he bought the triplex penthouse, measuring 14,300 sq ft, on the 42nd floor of Binjai’s Tower B. The price tag of RM38mil meant the penthouse was sold for almost RM2,660 per sq ft (psf).

“The buyer bought the penthouse to stay. He fell in love with the 360-degree unobstructed view of the KLCC skyline right at his doorstep, similar to views offered by the likes of London’s One Hyde Park. He said Binjai On The Park was just like one of his other homes around the globe,” said Terri Har, marketing and sales manager of Layar Intan Sdn Bhd, the developer.

Layar Intan is 100% owned by KLCC (Holdings) Sdn Bhd, which in turn is a wholly-owned subsidiary of Petronas.

Binjai’s two 45-storey towers have a total of 171 units. To date, the project has recorded sales of more than RM600mil at an average price of RM2,600 psf.

Over the last six months, three other penthouses have been sold for approximately RM18mil. On a psf basis, the most expensive unit so far was a standard unit on the 38th floor, which was sold for RM2,900 psf or RM10.6mil.

With Tower B now sold out, what is left are mainly Tower A’s standard units, which offer 3,700 sq ft each. Binjai is the only condominium located on the 50-acre KLCC Park and is part of the KLCC development master plan.

“Binjai’s key selling point is the fact that every unit has an unobstructed view of the park, along with a spacious balcony,” said HwangDBS Vickers Research analyst Yee Mee Hui.

Said Har of Layar Intan: “Some 30% of our buyers are from Japan, Hong Kong, Britain and other parts of Europe. Most of our buyers are businessmen and corporate people who already have homes around the world. They appreciate Binjai as the only development in the vicinity with an unblocked view of the KLCC skyline.”

She added that most of the local purchasers bought Binjai units to live there or as homes for their children, while the foreign buyers treated the units as holiday homes or transit points.

By The Star

RM2b project to spruce up PJ's Section 52

BUILDER and property developer Bisraya Construction Sdn Bhd will develop 4.8ha in Section 52, Petaling Jaya, Selangor, by the middle of next year as part of efforts to spruce up the city.

The project, dubbed PJ Sentral and with RM2 billion gross development value, will involve upgrading and rehabilitating several buildings and facilities in addition to implementing traffic dispersal systems and new routes.

"The project will be carried out over four phases over the next six years, and will be financed by raising bonds, borrowings from local and foreign banks, and internally generated funds," Bisraya director Imran Salim told a media briefing in Petaling Jaya yesterday.

It will be undertaken as a joint venture with Selangor economic and investment arm Perbadanan Kemajuan Negeri Selangor (PKNS).

Bisraya, a subsidiary of Gapurna Group, received approval from PKNS in June last year for the development.

The project is in the vicinity of Jalan Barat, Hilton Petaling Jaya hotel, A&W drive-in restaurant, light rail transit (LRT) station and Amcorp Mall adjacent to the Federal Highway.

It will have four office towers, a residential tower and a hotel with green features. It will also be the site of PKNS' new headquarters.

The proposed traffic dispersal is aimed at easing the bottlenecks at Jalan Barat and Jalan Templer, such as new alternate routes linking directly to existing high-ways like the New Pantai Expressway.

The development will also be pedestrian-friendly with good connectivity to the nearby Asia Jaya and Taman Jaya LRT stations.

By Business Times

M’sia real estate market transparency slips 2 places

PETALING JAYA: Jones Lang LaSalle’s Global Real Estate Transparency Index 2010 report, which quantifies real estate market transparency, shows Malaysia slipping two places from 23rd in 2008 to 25th out of 81 countries,

Jones Lang Wootton (JLW) said in a statement that Malaysia remained a “transparent” market and the third most transparent country in South-East Asia after Singapore and Hong Kong, which were ranked 16th and 18th in the world respectively.

JLW senior vice-president and head of research David Jarnell said “the index provides a good guide for industry players and the Government who are keen to attract more foreign direct investment to Malaysia and always working towards improving the nation’s transparency.”

“Malaysia’s stable economic and political history and forecast relatively strong gross domectic product growth will underpin the country’s attraction as a destination for real estate investors. Furthermore, Malaysia’s good levels of transparency will help the market gain momentum following the global financial crisis in 2008,” he said.

The Asia-Pacific region showed general improvement in real estate market transparency, the statement said.

Australia is the most transparent country in the world, followed by Canada (2nd), the United Kingdom (3rd) and New Zealand and Sweden (joint 4th).

By The Star

iProperty.com gets record 1.1m visitors

iProperty.com Malaysia, a property marketing site, has beaten its June 2009 record with a total of 1.1 million visitors for the month of June 2010.

The 75 per cent growth is due to aggressive marketing efforts, online marketing and strategic partnership.

iProperty.com.my says figures show it has 51 per cent new agent subscriptions and has over 4,300 real estate agents paying to advertise on the website.

By Business Times

SunCity positive on property launches

Sunway City Bhd (SunCity), developer of the Sunway Integrated Resort City in Bandar Sunway, Selangor, expects prices at its property launches to increase by 20 per cent this year compared to the levels in 2008.

Its managing director of property development in Malaysia, Ho Hon Sang, said this was in line with current market trends.

"SunCity's launches for this year will mainly be in the Klang Valley, with a gross development value of RM1.5 billion," he said in an interview

Ho believes that SunCity's premium pricing strategy of focusing on properties with "green initiatives" that promote quality of life will place it well ahead of competitors.
"Our property prices are usually 10-20 per cent above the competitors'," he said.

By Business Times

Bina Puri acquires property unit

Bina Puri Holdings Bhd announced today the acquisition of nine ordinary shares of B$1.00 each in Bina Puri Properties (B) Sdn Bhd, a company incorporated in Brunei.

This represents 90 per cent of the total issued and paid-up share capital of B$10 for cash consideration of B$9.00 (equivalent to RM20.81), Bina Puri Holdings said in a filing to Bursa Malaysia.

Bina Puri Properties Sdn Bhd, an indirect wholly-owned subsidiary of Bina Puri Holdings, has also acquired one ordinary share of B$1.00 in Bina Puri Properties Brunei, representing 10 per cent of the total issued and paid-up capital of B$10 for cash consideration of B$1.00 (equivalent to RM2.31).

On another matter, Bina Puri clarified that it has not received the letter of award for the third package of Malaysia Airports Holdings Bhd's new low-cost carrier terminal (LCCT) worth close to RM1 billion.
"However, we are liaising with Malaysia Airports Holdings. We expect to receive the letter of award soon. We will make the necessary announcement if and when we receive the letter of award," Bina Puri said.

It was clarifying a report, "RM1 billion LCCT on the cards for Bina Puri" in a news publication.

By Bernama

Mah Sing unit in land deal

Mah Sing Group Bhd's unit, Grand Prestige Development Sdn Bhd, has entered into a deal with Medan Damai Sdn Bhd to jointly develop a piece of residential land of 5.35ha in Kinrara, Selangor.

Grand Prestige is given ex-clusive rights to continue with the sale and development of the land. In return, Medan Damai will be paid RM35.4 million over 12 months.

Development of the land is expected to be completed in the first quarter of 2012.

The land forms part of an ongoing residential project, known as Taman Damai Utama.

By Business Times

Builders warn of costly delays

The government needs to be mindful that for private public partnership (PPP) projects to be successful, approvals must not be delayed.

Indecision and slow approvals, whether by federal or state governments, had many a time caused cost overruns in infrastructure jobs, says Master Builders Association of Malaysia.

"If the government is fully committed to implement infrastructure projects sucessfully under the 10th Malaysia Plan, there has to be an element of accountability in the event of delayed approvals," said MBAM president Datuk Ng Kee Leen.

"Whenever there is a delay in variation order approvals or land acquisition, the costs go up," he said.

"It is not just financing costs. It's also land acquisition costs, building material costs, labour and transportation costs and opportunity costs," he told Business Times in an interview in Petaling Jaya recently.
Government agencies, whether federal or state, need to execute their approvals within scheduled time limits.

"If they fail to do so, they'll need to compensate the bankers who, in turn, are accountable to their account holders and shareholders," he explained.

"This commitment from the government is necessary to boost investor confidence. If not, it will be very difficult for the private sector to pledge tens of billions of ringgit in loans or bond undertakings for infrastructure jobs under a PPP," he said.

Another factor that can help improve implementation of PPP projects is for the enactment of the Construction Industry Payment and Adjudication (CIPA) Bill.

Timely payment is vital for the survival and continuity of contractors and sub-contractors' businesses. Although payments should be made by government agencies or project owners within 30 to 60 days, which is the industry practice, it is often not the case.

Currently, there is no law to mandate security of payment and quick justice via adjudication. Unpaid sub-contractors either suffer in silence or are put out of business, well before they have a chance to seek arbitration or go to court.

"When there is late payment, projects are delayed, squeezing profits along the way. Chronic problems of late and non-payments affect the entire delivery chain of consultants, contractors, building material suppliers, freight forwarders and bankers. A rough calculation will show claims running up to billions of ringgit," he said.

On average, construction jobs run into the millions and span over three years. With each progress payment involving big sums, Ng said the enactment of the CIPA Bill is vital to protect the interests of contractors and sub-contractors.

"This law will help to minimise payment defaults via timely and cost-efficient recourse to adjudication," he said.

"We have been waiting far too long for the CIPA Bill to be made law. We initiated this Bill as early as June 2003. A year later, during a construction industry roundtable chaired by the then Minister of Works Datuk Seri S. Samy Vellu, he lent support to this proposal for Cabinet deliberation," said Ng.

"We, therefore, appeal to the Government to expedite the enactment of CIPA Bill," Ng said.

Similar laws are already in practice in the region. Among them are Australia's Building and Construction Industry Security of Payment Act 2002, New Zealand's Construction Contracts Act 2002 and and Singapore's Building and Construction Industry Security of Payment Act 2004.

By Business Times

Spruce-up enhances Pangkor resort’s allure

PANGKOR Island Beach Resort will rejuvenate and spruce up the 26-year-old property to lure long-haul and long-staying guests.

It is even looking at the possibility of building villas that will then be sold as holiday homes. The resort, owned by IGB Corp Bhd, sits on a 40.5ha site of which less than half has been developed.

Recently appointed general manager Ermanno Cima Vivarelli, who termed the plan as a “360º development”, said the changes will be in infrastructure, services and activities at the hotel.

“We are looking at renovating and decorating the hotel where necessary,” he said.
He added that all its 230 employees, who have been working for an average of 15 years, consider their job at the resort as a lifetime project.

Cima Vivarelli would like to imbibe in them the meaning and responsibilities in hospitality, so that guests know that their money was well spent at the resort.

The food and beverage menu at the resort has been changed. “We have already redesigned the entire menu and wine list and at an affordable price. We are adding more fresh seafood and international selection,” he said.

It is also working on creating niche packages focusing on health and wellness.

Since coming on board, Cima Vivarelli, who also has vast experience in the entertainment and leisure industry, has introduced activities like fishing trips, snorkelling, island cruise, motorised and non-motorised sports like jungle bike trekking and archery.

It is also offering decicated services via tie-up with tour limousine buses to ferry guests from Kuala Lumpur to Lumut, to help improve arrivals into the island resort.

With all this in place, the resort is looking at garnering an a 10 per cent increase in average room rate in 2011 from RM220 in 2009. It hopes to up occupancy to 70 per cent next year from 65 per cent in 2009 and improve long stay to 10 days from five days now.

In the year ended December 31 2009, it registered RM22 million in revenue and this is set to hit RM27 million in 2011.

“We forecast to invest about RM5 million up to the first half of 2011 as part of our marketing and product enhancement budget,” Cima Vivarelli said.

While the profile of the hotel will be maintained as a four-star property, it hopes that services and facilities provided will be in the five-star league.

Foreign guests, Cima Vivarelli said, preferred the wooden structure exposed to natural weather look. “They like the aged look and this also blends better with the rest of the environment as opposed to a modern structure.”

The resort’s guest profile is currently split equally between foreigners and locals. Locals, who include those from the expatriate market, stay an average of two nights.

The hotel’s last refurbishment was six years ago, when IGB took over the hotel operation from Pan Pacific group.

The hotel now has a total of 250 rooms, eight land villas and four sea villas on stilts, 80 per cent of which are sea facing and only few metres away from a 1.2km long private beach.

In order promote its newly enhanced resort, the hotel has packages starting from RM398 per night for two persons which includes both breakfast and dinner for two and unlimited use of all non-motorised activities.

By Business Times

Suncity sees its property prices up 20pc

Sunway City Bhd (Suncity), developer of the Sunway Integrated Resort City in Bandar Sunway, expects prices at its property launches to increase by 20 per cent this year from 2008.

Its managing director of property development in Malaysia, Ho Hon Sang, said this was in line with the current market trend.

"Suncity's launches for this year will mainly in the Klang Valley with a gross development value of RM1.5 billion," he told Bernama in an interview.

Suncity, Ho said, believes that its premium pricing strategy of focusing on properties with "green initiatives" that promote quality of life will place it well ahead of competitors.
"Our property prices are usually 10 to 20 per cent above the competitors," he said.

According to Ho, the Malaysian property market is not expected to enter a bubble stage despite rising prices due to the limited supply of land in prime areas, and availability of liquidity at the banks and institutions such as the Employees Provident Fund (EPF).

"Malaysian property prices are still lower compared to Singapore," he said. Suncity began its green journey back during its Sunway Integrated Resort City in Bandar Sunway, an iconic project which encompasses a township of medical, university, shopping and retail mall as well as resort and hotels.

"We have also emphasised on security with the implementation of CCTV within strategic roads and location and auxiliary police to ensure proper surveillance," Ho said.

"Sustainable construction is certainly here to stay as
Malaysians are becoming more environmentally conscious. Moreover, it is widely practised by other developers overseas," he said.

He also said that Lafarge Malayan Cement Bhd's cement products such as the Phoenix complemented the group's objective to promote sustainable construction.

The group's efforts in going green were given recognition when the Sunway Palazzio development in Sri Hartamas, Kuala Lumpur, was awarded the Gold Award in High Rise Residential Development by Singapore's Building and Construction Authority Green Mark Scheme.

Sunway Palazzio is the first high-rise residential development in Malaysia to receive the coveted award based on five criteria -- energy efficiency, water efficiency, site/project development and management, good indoor environmental quality and environmental protection, and innovation.

By Bernama

Mah Sing, Mahajaya to team up

Mah Sing Group Bhd's wholly-owned unit, Grand Prestige Development Sdn Bhd will team up with Mahajaya Bhd's subsidiary, Medan Damai Sdn Bhd, to develop 5.28 hectares in Kinrara.

In a statement, Mah Sing said it would be the developer and Medan Damai the landowner. It said the joint venture (JV) would form part of the on-going mixed project, known as Taman Damai Utama, a matured development with more than 600 units of two- and two-and-a-half-storey terrace houses sold and delivered.

"The commercial portion of the development comprising more than 100 units of terrace shop and offices are also sold except for Bumiputra units," it said.

Mah Sing said it planned to rebrand the JV into a residence development comprising gated and guarded environment with trend-setting layouts and lush greenery.
It said the JV has an estimated gross development value of RM100 million and comprised 180 units of terrace houses which were launched in April this year.

"To date, 53 units with sales value of about RM29 million have been sold while a further 27 units are booked but sale and purchase agreements have not been signed," it said.

It said construction works had started. Group managing director, Tan Sri Leong Hoy Kum, said it was an opportune JV for the company to replicate its success in Perdana Residence 2 in Selayang and Garden Residence in Cyberjaya where sales were good due to the good location, strong concept and value proposition backed by the company's brand.

By Bernama

iProperty draws 1.1m visitors in June

iProperty.com Malaysia experienced a record-breaking 75 per cent year-on-year growth to 1.1 million in visits in June 2010.

This growth was attributed to iProperty.com's aggressive marketing efforts to increase traffic to the site via advertising, online marketing and strategic partnership.

"We have broken records in all key metrics as we continue to dominate as Malaysia's No 1 property website," said country manager Ken Tsurumaru in a statement today.

According to iProperty.com, the website also hit a significant milestone of having over 100 thousand registered members, a 155 per cent increase in members since June 2009.
The company said as it continued to gain in popularity among consumers, more real estate agents were turning to the property portal as a means to advertise their properties.

In June this year, the website signed on 452 new property agent advertisers, totalling a 51 per cent growth in agent subscriptions between January and June 2010.

To date, it has over 4,300 real estate agents paying to advertise on the website.

By Bernama

New boss wants UDA to focus on core strengths

The newly appointed chairman of UDA Holdings, Datuk Nur Jazlan Mohamed will stress on the company focusing on three core business areas namely real estate, development of town and management of shopping complexes in three major cities in the country.

This is to make a success of the Bumiputera mission as set out by the government in the 10th Malaysia Plan and the New Economic Model, he said.

"The cities would be Johor Baru (Johor); Kuala Lumpur and George Town (Penang)," he told reporters in Johor on Saturday.

Nur Jazlan said he had received the official briefing from the managing director of UDA, Datuk Jaafar Abu Hassan, and had directed that all management of UDA focus on the businesses in the three cities.
He said he wanted the existence of UDA to enable the Bumiputera community to compete with other communities and at the same time did not want to hear incidents of them having to move out of the cities because they could not afford to buy residences or business premises in the cities.

UDA has strength in the management of shopping complexes being the sole Bumiputera company managing properties in the cities such as BB Plaza, Pertama Complex and Daya Bumi in Kuala Lumpur and Plaza Angsana in Johor Baru.

This is an edge UDA has and it should be fully exploited to ensure that the Bumiputera community can do businesses in the main cities, he said.

UDA has been delisted from Bursa Malaysia and is under the patronage of the Minister of Finance Inc and the government wants it to be a corporation as was its mission during its establishment 40 years ago.

Prime Minister Datuk Seri Najib Razak is very concerned and wants to see UDA return to the root of its establishment which is to strengthen the ownership of properties by Bumiputera be it business or residential in the city area, Nur Jazlan said.

Nur Jazlan who is also member of parliament for Pulai, was announced as the new chairman of UDA in mid-June, replacing Datuk Hilmi Abd Rashid, for a two-year term.

By Bernama

YPU to invest RM40mil to build two hotels

KUALA TERENGGANU: Yayasan Pembangunan Usahawan Terengganu (YPU) will build two three-star hotels, costing more than RM40 million, in the state.

"This is the first hotel project to be undertaken by the foundation," said its Genera Manager Azmi Razik in an interview with Bernama on Monday.

He said the "T Hotel" chain would create employment opportunities for 100 people when they begin operations in mid-2012.

Azmi also said the RM15 million three-storey T'Hotel would be built on a one hectare site near the Sultan Mahmud airport and have 76 rooms to cater for tourists arriving in the state.

The hotel would also boost of other facilities such as a convention hall, shops and a cafe.

Meanwhile, YPU is currently building a RM26 million entreprenuer complex in Kampung Banggol Tuan Muda, near here, which would comprise a hotel, batik village, an entreprenuer training centre and offices.

Azmi was confident the complex would enjoy good business as it was strategically located near institutions of higher learning and residential areas.

In another development, he said YPU would soon establish a RM100,000 T'Shop in Sungai Petani, Kedah, which would sell a variety of made-in-Terengganu products including batik, songket and brassware.

By Bernama

E&O water limousine to boost Penang allure

EASTERN and Oriental Bhd is set to add to Penang's attractions with one of its newest offerings: a water limousine service operating between the 125-year-old Eastern and Oriental (E&O) Hotel and the Seri Tanjung Pinang development.

Executive director Eric Chan Kok Leong said the E&O water limousine will ferry passengers between the new pier at the E&O Hotel Annexe and the retail marina at Straits Quay in Seri Tanjung Pinang in Tanjung Tokong.

"These plans are subject to the authorities' approval and we are currently evaluating potential partners with the necessary expertise in type of craft and caliber of operations management," he told Business Times.

Construction of the 15-storey E&O Hotel Annexe, which is estimated to cost RM150 million, is slated for completion by the end of next year.
Chan said the ground floor of the annexe will have new restaurants and 5,000 sq ft of retail space.

As for the seafronting Straits Quay, which is sited within Phase 1 of Seri Tanjung Pinang, the E&O group will be announcing its retail partners soon.

"We are on track to open by the end of this year," Chan said, adding that construction is in its final phase. When launched, the sea-facing galleria will occupy 4.4ha, out of which the nett lettable area is approximately 270,000 sq ft.

"Straits Quay is sectioned into three thematic zones and, to date, a good mix of tenants have been secured, appealing to tourists and local residents living within a 15km radius," Chan said.

The food and beverage precinct centres around the marina and offers alfresco dining on the water fringe.

Chan said that in addition to outlets offering Asian, Japanese and Italian cuisines, to name a few, there will be seafood restaurants, bars and bistros dotting Straits Quay's outdoor dining boulevard.

"The tourist belt will offer souvenir and gift concessions, and feature Penang artisans."

The Suites at Waterside's serviced apartments, launched two years ago, will be handed over to buyers this month.

By Business Times

Singapore’s latest icon opens

The 340-metre long Skypark sitting 60 stories high on three Marina Bay Sands Singapore hotel towers looking like cricket stumps. The rooftop strip is regarded as one of the world’s largest cantilevers. — Bernama

The Lion City is betting on the success of the Marina Bay Sands as it aspires to be a global entertainment hub

The Marina Bays Sands integrated resort represents a new icon for Singapore.

Throngs of locals as well as foreigners have been heading towards the hotel since its opening two months ago.

The resort’s owners are hopeful that Marina Bays Sands will be a hit in the region for classy entertainment.

As for the Singapore government, it hopes to change the city-state’s rigid lifestlye image to that of a hip tourist destination.

There is a lot at stake here.

The Singapore government has been striving to keep the country’s economy vibrant.

The economic journey from an that of original equipment manufacturing base and financial centre to leisure industry hub has been fraught with risks and challenges.

The government has made a huge bet by allowing casinos to operate in the Lion City.

Entertainment and gaming chain Las Vegas Sands Corp, which competed with 19 other operators in the 2004 bid for the right to develop two integrated resorts in Singapore, had to navigate through many regulatory hurdles.

For example, the government had imposed regulations that the casino should not be the centre of the establishment nor should it take up too much floor space.

The Casino Regulatory Authority was formed to handle all dealings with casinos.

A daily entry levy of S$100 is imposed on all citizens and permanent residents.

Together with the Sands, the government had also imposed a casino exclusion programme to stop people with gaming-related problems from entering.

The Sands reciprocated by allocating 3% of floor space to gaming activities in its vast 51-acre resort.

It proposed to build an integrated resort with features such as a world-class shopping centre, an international theatre and concert hall, museums and world class dining. The 1.3 million sq ft of MICE (meeting, incentives, conference and exhibition) facilities are also meant to meet Singapore’s requirements. Sands chairman and chief executive officer Sheldon G. Adelson, in an interview with StarBizWeek, says South Asia is a perfect place for an integrated resort, and Singapore is the most suitable spot to expand Sands’ business.

“The Asian people have a high propensity to gamble,” he notes.

He knows this well, having directly participated in Macau’s booming gaming and entertainment industry. Through its majority-owned subsidiary Sands China Ltd, the company owns a collection of properties in Macau, including The Venetian Macao, Four Seasons Hotel Macao and the Four Seasons-branded serviced apartments at its Cotai Strip development, as well as the Sands Macao on the Macau peninsula.

The company is currently constructing a 6,400-room complex at the Cotai Strip, which will feature the Shangri-La, Traders, Sheraton, and St Regis hotel brands. Adelson adds that Singapore is an ideal city-state to invest in because Singapore is known internationally as a clean government.

Getting a gaming licence in Singapore is the toughest regulatory process he had ever gone through, Adelson says.

“They do a complete background check on you. It is not easy. Many people like to keep themselves private. But what is good when dealing with Singapore is that everything is transparent. They want to succeed. I want to succeed. And they will help me succeed,” he says.

In order to win the bid, Adelson appointed world-renowned architect Moshe Safdie to design the Marina Bay Sands on a 15.4 ha site.

It was built at a total cost of US$5.7bil. The complex comprises a 2,560-room hotel in three towers and a skypark spanning 107,000 sq ft that connects the towers ot the top. The skypark, replicating a sea vessel, accommodates a public observatory deck, jogging paths, gardens, restaurants, lounges, and an infinity pool.

“We are builders of an integrated resort. We are not just into casino ownership. It will be a benchmark for future entertainment sites internationally. I am open to new partnerships anywhere in the world that want to boost tourism as long as there are clear guidelines and transparency,” stresses Adelson.

But it remains to be seen if Singapore has made the right step in allowing the gaming industry to set up shop in the country. The numbers show that visitor traffic has stepped up since the Marina Bay Sands opening, with 500,000 visitors each month in the last two months.

But can the numbers hold, especially taking into consideration that the Sands opened during the summer holidays, and that the target markets of Indonesia and Malaysia do find the currency exchange rates with the Singapore dollar daunting.

By The Star

Rebuilding a city – chance to right some of the wrongs

REBUILDING a city to make it relevant for the present generation of city folks will not be an easy task as it involves many stakeholders including land and asset owners, the common folks, and the authorities.

Despite its daunting task, the effort will be worth it if things turn out well and the people gets a new city after the construction dust settles down.

Land and building owners have to be duly compensated before they will agree to move away or give up their asset for redevelopment. There are also the existing physical limitations such as buildings, roads and highways that will have to be considered.

Most old cities started out from organic growth and were built on an ad-hoc basis out of the needs of those early years. As with all things, cities also age and decay and some turn into slums.

With time, the people’s needs change and cities have to be revitalised and added with new facilities and features to stay relevant .

Not many cities will get the chance to be redeveloped unless the initiative has the unwavering support from the government, the people, and other stakeholders, especially the asset and landowners.

So, when the government recently announced that a number of the federal assets in Kuala Lumpur and other parts of the Klang Valley would be redeveloped, many feel that this is a chance of a lifetime to “right some of the wrongs” or shortcomings that have been plaguing our cities. It is an opportunity to redesign and rebuild , albeit on a small scale.

The “hard to come by” opportunity should not be wasted and should be given much thought and a cohesive master planning to derive the most optimum result.

With most of the sizeable land in the city already snapped up and privately owned, the opening up of these prime government assets for redevelopment should be treated with utmost reverence to ensure they will offer real value to the people.

The redevelopment initiatives should not be driven just by profit, but should strive to meet other more holistic social, environment and other non-tangible objectives to improve the people’s quality of life and overall wellbeing.

It is a good opportunity for the government to leave behind some memorable legacies for the people. Highest on the list is of course the long overdue overhauling of the public transport system to make it highly efficient and well integrated. It should service the length and breadth of the Klang Valley cities to make it one of the most well utilised and successful public facility.

Kuala Lumpur’s population has grown to more than two million people and the number is increasing by the day. On top of that, there are close to one million foreign workers in the city.

No wonder the city’s infrastructure and facilities including roads, public transport system and open spaces are bursting at their seams. There are also other shortcomings that need to be addressed.

In many parts of the Klang Valley, there is a serious over-built and congestion situation.

It is time to de-congest and ease up the environment with lower density projects.

In view of the glut in the high-rise residential and commercial property sector, developers should plan for more quality low-density developments to raise the quality of the living and working environment.

There are already too many unoccupied apartments and condominiums, from the low-cost range to the very high-end ones in many parts of Kuala Lumpur and the Klang Valley. Instead of aggravating the over-supply situation, more low-density residences including townhouses and commercial projects can be planned in those new areas, including the new proposed Sungei Buloh township on the 1,200 ha Rubber Research Institute land.

It will be a great if the redevelopment plans incorporate more green and environment-friendly themes with “carbon free” structures and buildings to contribute towards lessening the world’s carbon footprint.

Meanwhile, buildings with heritage value should be restored and protected to ensure the country’s rich history and culture is preserved for the future generations.

Deputy news editor Angie Ng hopes our city authorities will embrace more balanced development models that promote higher quality of life for the people.

By The Star (by Angie Ng)

Getting away from the ‘govt’ mode

For many, “Putrajaya” is often associated with the “Federal Government.” And it’s not difficult to see why.

One just have to drive through Putrajaya Boulevard, a stretch of road flanked by formidable, uniquely designed Government buildings with the word “Ministry” on nearly every one of them.


Datuk Azlan Abdul Karim ... ‘When we built Putrajaya, we didn’t design it solely for the public sector.’

Putrajaya Holdings Sdn Bhd (PJH) chief executive officer Datuk Azlan Abdul Karim is the first to point out the Putrajaya/Government co-relation.

“When we built Putrajaya, we didn’t design it solely for the public sector. It’s for the entire nation. You can’t have a liveable city if it’s only catered to one particular sector,” he tells StarBizWeek.

PJH is the administrative capital’s master developer.

Commercial hub

Azlan admits there is a need for developments in Putrajaya that could “attract the people,” namely via commercial projects.

“People don’t consider Putrajaya as a business hub, again because of the feel that the place is exclusive to government personnel,” says Azlan.

Azlan says PJH has sold three parcels of land to two Hong Kong-based parties for potential commercial developments, but declines to go into detail.

He also says PJH is looking into the possibility of setting up a theme park within Putrajaya.

“We’ve been having discussions with several parties, especially international players. But nothing is concrete at this moment. We are embarking on several ‘unique’ projects to bring in the crowd,” he says.

“There is also no point in signing an MoU (memorandum of understanding) with potential parties on a project that we want to work on, and then it (the MoU) just fizzles out.”

Azlan says PJH is looking at setting up another retail centre within Precint 8. However, that too, he says, is still “on the drawing board.”

It currently has one retail centre – the Alamanda Shopping Centre in Precint 1.

In May, PHJ launched its Venice-inspired commercial development, the Promenade@8 in Putrajaya. The freehold development is the first waterfront development in Putrajaya. It comprises shopping lots, outdoor dining and leisure areas.

Heralded as the “waterfront hub for business and leisure,” the project bosts a nett saleable area of 240,000 sq ft, with a gross development value of about RM120mil. Azlan says that about 90% of the units had already been taken up.

The project is slated for completion within the next three years.

Azlan says that PJH plans to offer office suites in Putrajaya within the next year and a half.

“We want to target entrepreneurs to both live and work here. We have also awarded a contract for a 380-room business hotel about three months ago,” he says, without disclosing further details.

Azlan also says there was a need for more entertainment outlets in Putrajaya.

“We don’t have nightclubs here, but then again, that isn’t our intention. We want a Putrajaya to be a place that’s good for the family, where people can have good, clean fun.”

A place to live in

According to previous reports, PJH has a total undeveloped landbank of 801 acres, with 385 acres allocated for commercial development, while the remaining 416 acres have been earmarked for residential development.

Asked if there is a perception that property, especially residential, was expensive in Putrajaya, Azlan says: “We sell whatever the market can take.”

“We have high-end homes that cost RM2.2mil as well as more affordable homes from around RM45,000.”

Azlan says there are about 1,800 “affordable homes” in Putrajaya already, adding that there were plans to launch more of these developments in the pipeline.

“We’re still determining the prices of these homes.”

“The people living here complain that our residential developments don’t have fences (between the homes). But this is intentional, as we feel it would foster better interaction between the residents,” he adds.

According to Azlan, Putrajaya has about 80,000 residents. Its working population is around 35,000.

The green agenda

As part of its initiative to make Putrajaya more “liveable” and attractive, PJH will be addressing the Government’s call to turn the administrative’s capital into a “green city.”

Under the 10th Malaysia Plan, The Government announced it would promote environmentally-friendly housing by introducing guidelines and a green rating system. Putrajaya and Cyberjaya would serve as flagship green townships.

“The Government is looking at making Putrajaya a model green city and we are working closely with the Energy, Green Technology and Water Ministry to achieve this.”

He says future projects would need to comply with the Green Building Index (GBI).

“This is to ensure that our buildings are energy efficient. The Government is also providing incentives to developers that construct buildings that are GBI-compliant.

“With the incentives, we’re hoping that more developers would come in and take up the challenge (of developing green buildings).

Azlan adds that developers should not be influenced by incentives to develop green buildings.

“It should not be about that (incentives). (Going green) means to be sustainable, which is necessary for our future development. In some countries today, construction projects are not even approved if they don’t meet certain (green) requirements.

“That is where we should be headed.”

By The Star

Putrajaya Perdana gets RM321m job

PETALINGJAYA: Putrajaya Perdana Bhd was awarded a contract worth RM321.5mil by The Intermark Sdn Bhd to complete a hotel and commercial redevelopment project in Kuala Lumpur.

“The contract period for the project is 23 months, that is to commence on July 14 and to complete by June 15, 2012,” the company told Bursa Malaysia yesterday.

It said the project was expected to contribute positively to the earnings and net assets of the group for the financial years ending Dec 31, 2010 to 2012.

By The Star

Focus on green at Archidex 2010 exhibition

With over 330 exhibitors, the 11th Malaysia Architecture, Interior Design and Building Exhibition (Archidex 2010) is not to be missed — at least not by architects, interior designers, developers, quantity surveyors, engineers and other professionals in the building industry from the region.

The ongoing exhibition at the Kuala Lumpur Convention Centre in KL ends tomorrow. The annual event is jointly organised by the Malaysian Institute of Architects (Pertubuhan Arkitek Malaysia/PAM) and C.I.S Network Sdn Bhd, in conjunction with the PAM 2010 Convention and the Inaugural Asean Architect Congress.

The exhibition this year features 838 booths occupying five exhibition halls with more than 330 companies from eight countries — Austria, China, Singapore, Australia, Germany, Korea, Thailand and Malaysia.

According to C.I.S Network Sdn Bhd president Vincent Lim, there is an increase of six percent in exhibition space and a 10% increase in exhibitors at this year’s Archidex.

In his welcome address, PAM president Boon Che Wee said design and green are the two fundamental and crucial differentiating factors in enhancing global competitiveness.

“We have encouraged the government to first adopt a visionary, defining and all-embracing Malaysian Architectural Policy or MAP as a commitment of the government to architecture of excellence, and as a role model to the private sector.

“We urge the government to lead by providing more opportunities for the discovery of Malaysian architects through open competitions, for all projects of national and public interest, starting with projects by government agencies and government-linked companies, to set an example to the private sector,” he said.

This year, there is a green hall, which is introduced exclusively for exhibitors to exhibit environmental, green building technologies, and green-related products.

Edward Loy, the managing director (Malaysia, Singapore and Indonesia) of Saint-Gobain Construction Products (M) Sdn Bhd, said since the introduction of the Green Building Index (GBI), many deve lopers are looking into going green.

“Our objective at this exhibition is to raise our profile and encourage architects and developers to go for green products for sustainable development,” he said.

Established in 1665, the company ventured to Malaysia in 2006. Its headquarters is in Paris.

Loy believes they are the first company in Malaysia to collect and recycle their materials.

“We collect leftovers and unused materials from our clients’ construction site and recycle it,” he said.

He added that their product, the ThermaLine, reduces heat transfers and prevents cool air from the air conditioner from escaping.

“Hence, you save on electricity bills,” he said.

At the Nippon Paint booth, there is a range of eco-friendly paints available.

“The exhibition is good for brand exposure, there has been quite a good response from the visitors, mostly developers, who were looking for green paint,” Nippon Paint (M) Sdn Bhd senior marketing executive Audrey Tan Khang Yee said.

This is the second time De Sofa Manufacturing Sdn Bhd director Eric Lee Chin Foong is taking part in the exhibition as he feels that it provides good exposure for his company and products.

“The exhibition is a good opportunity to gather all the professionals (in the industry) to share the latest trends and market information,” he said.

For details, call 03-7982 4668 or visit www.archidex.com.my.

By The Star

CapitaMalls Malaysia Trust to list on July 16

CapitaMalls Malaysia Trust (CMMT), the largest “pure-play” shopping mall REIT in the country, is expected to list on the Main Market of Bursa Malaysia Securities Bhd on July 16 with a market capitalisation of about RM1.4 billion.

Upon listing, CMMT will invest in a portfolio of income-producing real estate primarily used for retail purposes and located primarily in Malaysia.

Its initial portfolio which comprises of Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur, and The Mines in Selangor has a total net lettable area of approximately 1.88 million square feet.

AmTrustee Bhd, the CMMT Trustee, has conducted a valuation which valued the portfolio at RM2.13 billion.
As CapitaMalls Asia seeks to capitalise on acquisition opportunities present in Malaysia’s fragmented shopping mall market, CMMT will be the designated listed vehicle to hold its stabilised Malaysian retail assets, the company said in a statement.

CMMT will be given a right of first refusal over retail properties located in Malaysia that CapitaMalls Asia or any of its subsidiaries may identify and target for acquisition in the future, including a right of first refusal over Gurney Plaza Extension.

By Business Times

S'pore property prices jump to record high

SINGAPORE: Singapore real estate prices jumped to a record high in the second quarter as the city-state's economic recovery broadened.

Private residential property prices rose 5.2 per cent in the April-to-June period to the highest level since the government began the index in 1975, the Urban Redevelopment Authority said yesterday.

Prices leapt 5.6 per cent in the first quarter and 7.4 per cent in the fourth, bouncing back strongly after diving 25 per cent in the 12 months to mid-2009.

Singapore's low crime rate, good schools and low personal and corporate taxes have helped the island rank near the top of expatriate global quality-of-life surveys and attracted investors to the residential and office property markets. Singapore opened its first two casino-resorts this year, boosting tourist visits.
Singapore has sought to slow price gains by implementing a series of measures this year to discourage short-term speculative investment in property.

The government earlier this year imposed a 1 per cent to 3 per cent tax on residential properties sold within one year of purchase and lowered the loan-to-value limit to 80 per cent from 90 per cent on loans for private housing. Officials have also pledged to release more government land this year for real estate development to help boost housing supply.

By AP

KYM to buy Kinta land for RM12mil

PETALING JAYA: KYM Holdings Bhd had proposed to acquire 41.36 acres of leasehold land in Kinta, Perak, from Idaman Bina Makmur Sdn Bhd for RM12mil.

It told Bursa Malaysia yesterday the acquisition would be satisfied by RM100,000 cash and the balance via the issuance of 8.7 million 50 sen new ordinary shares in KYM at RM1.36 each.

The company had proposed an exemption under Practice Note of 2.9.1 of the Malaysian Code On Take-Over and Mergers, 1998 by Datuk Lim Kheng Yew and parties acting in concert with him from an obligation to do a mandatory takeover offer for the remaining KYM shares not already owned by them upon the issuance of the new shares.

In a separate announcement, KYM said it had mutually agreed to extend the cut-off date for a sale and purchase agreement (SPA) involving 13 parcels of leasehold properties with Harta Makmur Sdn Bhd and Vale Malaysia Manufacturing Sdn Bhd to July 31.

It said the properties involved had unexpired lease period of 80 years and measured about 756 acres.

It added that on March 31, KYM, Harta Makmur (a 54%-owned subsidiary of KYM) and Vale had signed a conditional SPA pursuant to the exercise of their option to purchase the properties for RM93.76mil cash.

Reports before this said KYM might venture into the processing of iron ore, banking on its relationship with one of the world’s largest diversified metals and mining companies, Brazil’s Vale SA.

KYM recently sold 488ha of land in Manjung, Perak, to Vale for RM196mil cash. The company now derives almost all its revenue from carton and paper bag-manufacturing business.

By The Star

BKP to expand land-bank in Klang Valley

BEIJING: Bukit Kiara Properties Sdn Bhd (BKP), a developer of luxury residential properties (mostly high-rise) in the Mont’Kiara neighbourhood of Kuala Lumpur, is looking to expand its land-bank in the Klang Valley.

BKP group managing director NK Tong said at a media briefing on Wednesday that the company was looking to expand land-bank in central Kuala Lumpur as well as central Klang Valley.

“We’re looking actively to acquire land, smaller plots in KL for high-rise projects and bigger parcels in the suburbs for landed and gated developments,” he said.

Tong added that the size of the land parcel in the suburbs would have to be about 20ha to 40ha and preferably freehold.

He said the possibilities for land acquisition existed in locations between KL and Putrajaya. “There’s still room to grow there.”

Currently, the company is developing the second and third phases of Verve Suites on a 2.35ha freehold land in Mont’Kiara. The first phase has been completed and sold.

The second phase, known as Vibe Tower, is fully sold while the third phase, known as Vogue tower, is nearly sold out.

The fourth and final phase, the 34-storey RM216mil Vox Tower, which was previewed in early June, has seen more than three-fourths of the 250 units sold at average prices of RM1,200 to RM1,300 per sq ft.

Tong said the company was keeping options open on the whereabout of the larger parcels to be acquired.

“We haven’t found anything just yet, but I think if we find the right place, we’ll be ready,” he said.

On Tuesday, BKP, represented by Tong and members of the management team, signed a memorandum of agreement with BSH Home Appliances Sdn Bhd, the maker of Bosch home appliances at the Shanghai World Expo.

The agreement would see BSH furnish the second through fourth phases of Verve Suites with Bosch washer cum dryer. BSH in an earlier agreement signed in 2007 with BKP is furnishing the first three phases of Verve Suites with Bosch kitchenware.

The fourth phase comes with suites sized from 462 sq ft, 926 sq ft and 1,395 sq ft, and with one to three bedrooms.

This phase would feature a sky lounge, known as theVersilica Sky Beach where residents could sunbathe or swim with a view of the KL skyline. Besides Verve Suites, BKP has two other projects in the pipeline – The Ambangan located along Persiaran Madge, consisting of 19 units in a five-storey block and Verve Suites KL, a 20-storey, 170 luxury serviced apartment units.

By The Star

KSL to launch high-end Ampang condo project

SEGAMAT: KSL Holding Bhd plans to launch its high-end condominium project in Ampang in the first or second quarter of next year.

Executive director Ku Hwa Seng said the company was now working on the details of the project and was hoping to submit its plans to the relevant authorities soon.

He said it planned to build a 10-storey building on its land in Jalan Madge off Jalan U-Thant. The condominium block will comprise 50 units, each with a built-up area of between 334.45 sq m and 464.51 sq m with its own private lift.

“The indicative selling prices start from RM3mil to RM5mil per unit and the project has a gross development value of RM200mil,” he told StarBiz recently.

It would take two years to complete the project, expected to be named D’Embassy, in view of several foreign embassies being located within the vicinity, Ku said, adding that the company was confident that the project would attract interest from the rich, businessmen and expatriates due to its good location in the Golden Triangle area.

“We can also benefit from the spill-over effect of the KLCC and the redevelopment projects in certain parts of Kuala Lumpur.”

The project will be KSL’s second outside Johor for the Johor-based developer. The first is in Klang.

Phase one of the Klang project would be launched toward the end of the year with 100 units of mixed residential units comprising double-storey link cluster, semi-detached and bungalows priced from RM500,000 each, he said.

With the company taking bigger steps out of Johor, Ku said it would be looking for more land in the Klang Valley for future projects.

He said after the Klang Valley, the company would probably go north to Penang as demand for houses, especially high-rise living, in the land-scarce state was good.

For the financial year ended Dec 31, 2009 (FY09), KSL recorded net profit of RM91.38mil on revenue of RM186.17mil compared with RM90.50mil and RM216.24mil respectively in FY08.

By The Star

Mapletree plans to float 2 property trusts

SINGAPORE: Mapletree Investments, a property firm owned by Singapore state investor Temasek, plans to float two real estate investment trusts, including what may be Southeast Asia's largest REIT listing.

Listings of property trusts are making a comeback in Asia as investors are lured by their high yields relative to bonds, recovering from the credit crisis.

Malaysia's Sunway REIT is raising about US$455 million (RM1.48 billion) in Southeast Asia's biggest initial public offering so far this year. CapitaMalls Malaysia Trust is aiming to garner over US$300 million (RM978 million) in a Malaysia IPO.

Mapletree hopes to get as much as S$1 billion (RM2.32 billion) from the initial public offering of Mapletree Industrial Trust, which currently owns about S$1.7 billion (RM3.94 billion) worth of factories, business parks and warehouses in Singapore.
"We hope to launch the REIT by this year," Mapletree CEO Hiew Yoon Khong told reporters yesterday. He declined to name the bankers involved in the deal but banking sources said the institutions were Citi, DBS and Goldman Sachs.

The banks either declined comment or were not contactable.

Bahrain's Arcapita will help market the REIT, which is syariah compliant, to Middle East investors, the sources added.

Following the listing of Mapletree Industrial Trust, the Temasek unit will float Mapletree Commercial Trust, whose assets include Vivocity, Singapore's largest mall, and several office buildings west of the city-state's central business district.

Mapletree has not yet appointed bankers for its commercial REIT, which will draw the initial portfolio from the firm's S$6.4 billion (RM14.85 billion) worth of Singapore commercial properties, Hiew said.

Mapletree owns or manages over S$13 billion (RM30.16 billion) worth of real estate assets in Singapore and around Asia.

Its listed property trusts include Lippo-Mapletree, whose main assets are Indonesian malls, and Mapletree Logistics Trust, which owns warehouses and other industrial properties across Asia.

The company, which is unlisted, reported yesterday an 87 per cent increase in net profit to S$393.8 million (RM913.62 million) for the financial year ended March 2010.

Mapletree Industrial Trust will likely be Southeast Asia's largest REIT IPO when it comes onto the market.

REITs are property funds that pay out most of their rental income as dividend and are aimed at investors who want regular income with an opportunity to benefit if property values rise.

HSBC said recently it expects a surge in the number of Asian REITs over the next three to four years due to demand for more risk-averse property investments.

"We have plans to launch more REITs and private real estate funds," Hiew said. "We are optimistic about our growth in the year ahead (and) we will continue to scale up our fund management platforms and increase the share of assets under management as part of our overall growth strategy."

Besides listing the two REITS, Mapletree Investments intends to launch several private property funds including a US$300 million (RM978 million) Japan fund focused on IT-related infrastructure, a US$300-US$500 million (RM978 million to RM1.63 billion) Vietnam fund in which Mapletree may inject existing commercial and residential projects, and a US$500 million China-focused fund that will invest in a wide range of sectors.

By Reuters

Spotlight on REITs

The impending high profile initial pubic offering (IPO) for Sunway Real Estate Investment Trust (REIT) on the Main Board of the Bursa Malaysia has certainly raised investor awareness on this particular class of investment securities.

Sunway REIT will make its debut on July 8. Hot on its heels, yet another REIT, the CapitaMalls Malaysia Trust is slated for listing on July 16.

Although REITs have been around for some time — Axis REIT was the first REIT to be listed in Malaysia back in August 2005 — investor interest has been largely subdued with relatively thin trading volumes observed for most of the 12 REITs currently listed on the local bourse.

However, we could see increased interest going forward. For starters, the listing of Sunway REIT has helped raise the profile for this entire asset class. It will be the largest REIT on Bursa Malaysia with assets valued at almost RM3.73 billion and a market capitalisation of roughly RM2.7 billion (assuming the indicative unit price of RM0.97). Elsewhere, CapitaMalls will list with assets totalling RM2.19 billion and a market capitalisation of about RM1.46 billion (assuming a price of RM1.08). By comparison, Starhill REIT, currently the largest listed, has assets of about RM1.64 billion and market capitalisation of little over RM1 billion.

We expect the larger size and better liquidity will broaden the appeal of REITs to a wider spectrum of investors, including foreigners. Case in point, one of the four cornerstone investors in Sunway REIT is the Government of Singapore Investment Corp.

Several of the other REITs have also announced plans to increase their assets base. For example, AL-AQAR KPJ REIT recently completed the acquisition of additional assets that lifted the total value of its investment properties above the RM1 billion mark. It has further proposed additional purchases, including two hospital buildings in Indonesia, worth some RM303 million. Axis REIT too has announced acquisitions that will boost assets under management to some RM1.1 billion by end-2010.

So, what is a REIT?
Although listed and traded on Bursa Malaysia, REITs are not equity. As the name suggests, a REIT is a form of trust that invests, primarily, in property assets. Funds, to acquire property assets, can be raised through the sale of units in the trust and/or borrowings.

REIT unit holders have a direct and proportionate ownership in the underlying properties. As such, buying into a REIT is akin to property investing, albeit on a smaller scale, but which requires minimal time and effort. The properties are professionally managed.

Part of a diversified portfolio
Indeed, investors may consider REITs as an alternative investment to properties — to form part of their diversified portfolio, which would typically also include bonds and equities.

The unit price of a REIT normally tracks closely the value of its underlying assets less borrowings (NAV or net asset value). Thus REITs, like property investing, are a hedge against future inflation.

Since REITs are listed and traded on the local bourse, they have the advantage of better liquidity as compared to owning properties. Plus, investors need only a small capital outlay in order to gain exposure to a diversified portfolio of real estate investment.

Attractive yields on high distribution rate
REITs are exempted from paying corporate tax provided they distribute in excess of 90% of their annual incomes, primarily rental, to unit holders. Hence, most are committed to a high distribution rate. For example, both Sunway REIT and CapitaMalls intend to distribute 100% of incomes in the first two years of operations and at least 90% thereafter.

The high distribution rate usually translates into yields that are more attractive than that from the average equity investment. Gross yields from REITs listed on the local bourse range from 7.2% to as high as 8.4%, based on 2009's distribution rates at prevailing prices.

Currently, incomes distributed to both individual and institutional investors in 2010-2011 are subject to a final 10% withholding tax. The government has yet to indicate the tax rate beyond this period. But industry watchers expect the rate will not stray too far from the global norm, especially if the government aims to attract foreign investors. Singapore, which has one of the largest REIT markets in the region, do not levy any taxes on income distribution to individual investors.

More defensive than equity investment
REITs are widely seen as a defensive investment alternative and are appealing to investors with a lesser appetite for risks.

To be sure, unit prices are still influenced by sentiment prevailing in the equity market. However, their volatility is generally lower since the rental incomes have been, by and large, steadier than revenue for many businesses in the economy.

Indeed, the majority of REITs have registered positive earnings growth over the past few years, albeit at a gradual pace. Rental rates have, on average, been trending higher as had property values. Of course, the longer-term rental prospects and market values for individual REITs will depend heavily on the quality of their underlying property assets.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

By The EDGE Malaysia (Written by InsiderAsia)

MPHB diversifies into property development for additional income

PETALING JAYA: Multi-Purpose Holdings Bhd (MPHB) will be announcing its joint venture (JV) with a public-listed developer in the next several weeks to mark its entry into the property development sector.


MPHB MD Datuk Lau Kim Khoon pointing the way forward for the company: It is in property development. He says ‘We do not have the expertise but we have the land'. So a joint venture with someone who has the expertise is the answer to increase profit.

MPHB is known for its gaming business from which it generates about half of its profit via 51%-owned Magnum Corp, one of Peninsular Malaysia’s three legal number forecast operators,

Managing director Datuk Lau Kim Khoon @ Surin Upatkoon said the group was entering the property development sector in order to have an additional income stream and “to build a sustainable recurring income model.”

Besides gaming, its other businesses are insurance, stockbroking, property and hospitality.

The group is starting from ground zero in property development as other than its two residential projects which it launched early this year in Penang, it does not derive any revenue from property development.

The group has two office buildings, Menara Multi-Purpose and Plaza Flamingo, and two hotels under the Flamingo brand as investment properties. Menara Multi-Purpose is 98% occupied and Plaza Flamingo, 90%.

“In the past, MPHB has been factoring in the recurring income from these assets but the contribution was not substantial. The current contribution to the group’s revenue from property development comes mainly from two residential developments in Penang which are expected to contribute a total of RM37mil in profit before tax when completed in the next three years,” said Lau.

The Paya Terubong project is a six-acre joint venture comprising 116 units of town houses and 256 apartment units with a gross development value (GDV) of RM72mil. The Minden Heights project is another JV comprising 74 units of terrace houses under phase 1, launched early this year, and 95 units of terrace houses under phase 2, which will be launched at the end of this year. The GDV for this project is RM143mil.

The group is also converting Magnum Plaza into a three-star hotel to be part of its Flamingo chain. This is expected to open next year.

The jewel in the crown, Lau said, would be its RM3bil iconic integrated mixed development project at the junction of Jalan Sultan Ismail and Jalan Imbi near Park Royal Hotel, which is currently in the planning and designing stage.

It was reported last week that MPHB will launch a RM3bil project which will complement the Government’s proposed international financial district and Pasar Rakyat redevelopment in Imbi. The 2.4ha will have a retail podium, a 50-storey luxury condominium, a 35-storey four-star hotel and 30-storey office tower. The entire project will take several years.

“We believe our project in downtown KL is in line with the Government’s vision for KL. For this reason, we view the various ongoing projects by the Government and existing developers to be complimentary to our project, which would in turn strengthen other projects in the area.”

On the occupancy prospects of its KL integrated mixed development in view of the weak global economy and dwindling expatriate community, Lau said MPHB’s projects were not designed exclusively for expatriates but for the working class.

Only a small portion will be condominiums, as such occupancy and oversupply will not be an issue, he said.

“We do not have the expertise but we have the land. So we will work with the parties that have the expertise. It is not necessary to have our own property team to undertake these developments. The objective is to build a sustainable recurring income stream from our investment properties,” he said.

Lau said most of its land were bought and paid for years ago. Over the years, they have appreciated by three- or four-fold.

He said property development and investment is expected to contribute 10% to the group bottomline.

“Revenue from the property sector will contribute between 20% and 25% in about three to four years’ time,” he said.

“We are of the view that the local economy is stable and not directly affected by the fragile global economy. We are also taking a long-term view of the sector and the group will consider the overall economic climate and other factors when deciding on the timing of launches.”

He said the bulk of its landbank, which includes a 4,641-acre oil palm estate in Pengerang, Johor, which is near the third link to Singapore, are generally more suitable for the local market.

By The Star

Tradewinds sees higher rental for refurbished Menara Tun Razak

TRADEWINDS Corp Bhd, which is undertaking the RM450 million refurbishment of the 29-year-old Menara Tun Razak in Jalan Raja Laut, forsees office rental in the building to increase by 40 per cent by 2014.



Chairman Tan Sri Megat Najmuddin Megat Khas said office space in the building was currently rented out between RM3.50 and RM4.50 per sq ft and this would be increased to RM6 per sq ft.

He said the redevelopment activities would result in a temporary decline in the rental income from the group's property division.

"Barring any unforeseen circumstances, we expect to see rental income to decline by RM8 million annually, but we are optimistic that we can recover and improve our profitability when the Menara Tun Razak project is completed in four years' time," Megat Najmuddin told a press conference in Kuala Lumpur yesterday, after the company's annual general meeting.
Tradewinds will also construct a 40-storey office building, next to the Menara Tun Razak, later this year which will be crucial for the company's property development business.

"The development would enhance the area in terms of asethetics and value, increase our profile as a major high-end urban property developer, attract new and reputable clientele as well as create spill-over effects for surronding areas," Megat Najmuddin added.

He also said the company planned to set aside RM70 million to refurbish three other hotels under its wings, PJ Hilton, Hilton Kuching and Pelangi Langkawi.

By Bernama

Tradewinds to refurbish tower and build 40-storey block for RM450mil

PETALING JAYA: Tradewinds Corp Bhd will spend RM450mil to refurbish Menara Tun Razak (MTR) as well as build a brand new 40-storey office block on the existing land just beside MTR.

Tradewinds has just received the approval for the new office block and will start developing the 5-star office building this year. The building is expected to be completed by 2014.

“We are building a commercial building for tomorrow’s standards. The office block fulfils 95% of the checklist of some of the best buildings in Singapore,” said Tradewinds Corp director and advisor Poh Pai Kong.

Currently, MTR is generating net cashflow of RM8mil per annum.

Hence, from now until the refurbishment is completed in 2014, there will be a loss of some RM8mil in cashflow. However Poh said the refurbishment was likely to be completed before 2014.

He also emphasised that the refurbished building would fetch higher rental yield.

The existing rental for MTR is RM3.50 to RM4.50 per sq ft (psf). Once refurbished, MTR will be rented out at RM6 psf.

“The new office block will be rented out at RM6 psf for the first three years before we increase it in the coming years. If you look at Jalan Raja Laut, where MTR is located, it is increasingly becoming a bankers’ street. When you have a 5-star building, you are able to rent it to anyone,” said Poh, after the company AGM.

Tradewinds chairman Tan Sri Megat Najmuddin said property development was a catalyst of growth for Tradewinds, with commercial property as its focus.

Poh added that the refurbishment of MTR was a mere appetiser before the company served its main course.

“We are now looking at all sorts of projects. We are reviewing all our existing assets and developments. The property drive will be the catalyst moving forward for us,” he said.

Megat said that he was optimistic about the property outlook of the country despite many people criticising Malaysia.

Malaysia has a young population and there are only 4 million homes for a population of 28 million, according to Poh. “There is a shortage of homes now. There is a lot of potential for the property market.”

When asked whether Tradewinds would enter the residential property market, Poh said it was something they were looking at. One of the projects Tradewinds is planning for will include service apartments.

Meanwhile, Tradewinds will spend RM70mil over the next two years refurbishing three of its hotels, which are PJ Hilton, Kuching Hilton and Meritus Pelangi Beach Resort & Spa Hotel in Langkawi.

Right now, its gross operating profit for its hotels is around 40%.

By The Star

Sunway confident of record profit this year

Sunway Holdings Bhd expects a record net profit this year, driven by new business and healthier margins from all its five core divisions, managing director Yau Kok Seng said.



These include construction, property development, trading and manufacturing, quarry and building materials.

The construction division, which has RM3 billion worth of jobs in hand, is bidding for more infrastructure and building projects worth RM16 billion in Malaysia, Abu Dhabi, India and Singapore.

"We hope to get minimum RM1 billion worth of new contracts this year, maintaining our order book at RM3 billion," he told reporters yesterday after a shareholders' meeting in Bandar Sunway, Selangor.

Sunway, controlled by founder Tan Sri Jeffrey Cheah, has prequalified for projects like the light rail transit (LRT) line extension in the Klang Valley, the new low-cost carrier terminal in Sepang and the Kelau dam, part of the Pahang-Selangor raw water transfer project.

Yau said Sunway's property development unit, SunwayMas Sdn Bhd, will launch five projects, including one in Singapore, from July to December this year worth RM600 million.

It has six projects worth RM1.1 billion and 182ha of undeveloped land with potential to generate a gross development value of RM3.3 billion.

"With new construction jobs, property launches and unbilled sales of RM515 million, and increasing trading, manufacturing and quarry activities, we hope to exceed last year's earnings," Yau said.

Sunway reported a strong first quarter net profit of RM40 million, which is 2.5 times higher than in the same quarter last year.

"We have very clear strategy on how we want to build our businesses. The geographic diversification has helped us grow all the divisions.

"To expand further, we will continue to recruit the right talent and manage the foreign exchange rates," he said.

Sunway, which has RM170 million in its reserves, has no immediate plans to do a rights issue, he said.

Yau said Sunway will manage its cash flow, generated from all its operations, to expand.

"We hope to come up with a consistent dividend policy from next year. We are looking to distribute 20 per cent of our profits to shareholders," he said.

By Business Times

MRCB expands KL landbank with RM105m acquisition

KUALA LUMPUR: MALAYSIAN RESOURCES CORP Bhd is expanding its landbank near in landmark KL Sentral development by acquiring a company which owns a piece of land fronting Jalan Brickfields for RM105 million.

MRCB said on Wednesday, June 30 it had proposed to acquire 22.82 million shares or 60% stake in GSB Sentral Sdn Bhd with 17.91 million redeemable preference shares of 1 sen each in GSB for a total of RM105 million.

It is acquiring the stake from Gapurna Sdn Bhd, which is principally engaged in property development.

GSB Sentral owns 91,040 sq ft of land which has been approved for a mixed development of office and service apartments with total gross floor area of 1.468 million sd ft and an estimated gross development value of RM850 million.

The development on the lot started in March 2009 and is expected to be completed by the fourth quarter of 2012.

By The EDGE Malaysia

Glomac profit jumps 27.4pc to RM40.7m

GLOMAC Bhd’s net profit for fiscal year ended April 30 rose 27.4 per cent to RM40.7 million, driven by contributions from its Sg Buloh township and Glomac Tower commercial project in KL.

Revenue was down almost 8 per cent to RM317.8 million.

Going forward, Glomac expects significant growth, helped by unbilled sales of RM588 million, and pipeline projects worth RM1.8 billion, over the next 2 years.

By Business Times

Good response to IJM Land project

Property developer IJM Land Bhd has seen overwhelming response from Korean buyers for its RM500 million The Pearl Regency development on Penang island.

Apart from an en bloc sale of the entire commercial portion of the project comprising 83 commercial units worth RM90 million to a Korean party, IJM has also seen 40 per cent of 574 condominiums sold to Koreans.

The units, which were launched in Penang yesterday, were pre-sold to the Koreans in December last year in South Korea.

"The buyers of the condos are mainly Korean retirees and families who send their children to Penang to brush up on their English skills," IJM Land general manager Toh Chin Leong told a media briefing in Penang yesterday.

IJM Land established a sales presence in South Korea at the end of 2008.

The residential units are priced from RM478,314 up to RM1.3 million each, while the commercial area is priced at RM750 per sq ft.

The project, which sits on a 20ha site close to the Penang bridge and next to the Tesco hypermarket and e-Gate, which is a popular retail and food and beverage hub, is slated for completion by early 2013.

The project, sited on freehold land, has been marketed to potential overseas buyers in countries like South Korea, Indonesia, Singapore and Hong Kong with the help of local private hospitals in Penang, international schools, along with golf and country clubs.

By Business Times