Major projects under Budget 2011 will drive demand for building materials

The slew of construction projects listed in Budget 2011 will drive up demand for buildings materials. —AP

PETALING JAYA: The construction sector emerged as the clear winner from Budget 2011 but a rally in the past months means stocks valuation are no longer cheap and the risk is higher.

The smart money call is on the building material suppliers, from steel makers to cement producers, analysts said.

“We expect more positive news flow in the coming months for the construction sector,” MIDF Research said in a note yesterday, predicting a slew of project roll-outs and tender awards in the coming months.

While the question of who will bag what remained unanswered, analysts said the sheer number of upcoming construction jobs out there would drive up demand for building materials.

Malaysia Iron and Steel Indsutry Federation (MISIF) president Chow Chong Long said there was enough capacity in the country to meet the anticipated increase in demand for construction steel bars and other products.

“We don’t foresee steel shortages if the construction projects listed in Budget 2011 are implemented next year,” he said in a SMS reply to a StarBiz query.

He noted that steel factories in the country were currently running at about half their installed capacity.

“MISIF does not expect steel demand to increase until the middle of next year as it usually takes up to six months for projects to take off from the date they are awarded,” Chow said.

On Friday, Prime Minister Najib Tun Razak announced that a number of multi-billion ringgit projects would start construction next year.

This includes the RM40bil mass rapid transit system in Kuala Lumpur, six highways, the RM26bil KL International Financial District and a plan for an iconic 100-storey tower by Permodalan Nasional Bhd, on top of smaller builds such as rural roads, schools and hospitals.

Most of the big projects were already made known prior to last Friday because they were part of the 10th Malaysia Plan, or the Economic Transformation Programme.

Hence, it was not really a big surprise for the market when the projects were announced in the budget.

“These construction and infrastructure projects would require a lot of steel bars and cement,” BIMB Securities head of research Rosnani Rasul said yesterday.

“We are comfortable to retain our forecast 7% growth in cement demand in 2011,” she added. Among potential beneficiaries are Lafarge Malayan Cement Bhd and YTL Cement Bhd.

Shares in bigger construction groups Gamuda Bhd, IJM Corp Bhd, MMC Corp Bhd and WCT Bhd declined yesterday, largely in sympathy with the FTSE Bursa Malaysia KL Composite Index’s (FBM KLCI) 9.16 points drop yesterday to 1,480.70 points.

The few big gainers yesterday included Ann Joo Resources Bhd, a steel maker rated as a “buy” by AmResearch and BIMB Securities.

“We expect significant gains for the steel sector, which is a cheaper entry for leverage to the Malaysian infrastructure theme,” AmResearch analyst Mak Hoy Ken wrote yesterday.

Mak’s top pick for the steel sector is Ann Joo. The stock yesterday climbed 14 sen, or 4.7%. to RM3.12 – its highest level since January.

Specialisation may help smaller firms stand out from the pack and MIDF Research sees pre-cast concrete manufacturer MTD ACPI Engineering Bhd as a potential beneficiary.

In the budget, the Government forecast its development expenditure would drop 9% to RM49.2bil in 2011, and the slack in spending to be taken up by the private sector.

One of the key aspects of infrastructure development hinges on the success of the implementation of public-private partnership (PPP) projects.

But given the lack of clear details, “much (uncertainty) still lingers on issues like execution of these projects,’’ Inter-Pacific Research head Anthony Dass noted in his report yesterday.

By The Star

1M’sia Mall project draws mixed responses

PETALING JAYA: The 1Malaysia Mall project proposed under the Economic Transformation Programme (ETP) has drawn mixed responses from retailers and property consultants.

The plan is part of the Government’s initiative to push Malaysian mall operators and retailers to expand overseas and export Malaysian management expertise.

“It is still too early to determine if 1Malaysia Mall is a viable concept. The whole process will take four to five years from site selection, market research, planning, financing, construction, leasing to completion. I encourage the private sector to work with the Government to establish this mall,” Retail Group Malaysia managing director Tan Hai Hsin said in an e-mail reply to StarBiz queries.

Retail Group Malaysia is an independent retail research firm in Malaysia.

Tan suggested two other strategies to help Malaysian retailers expand overseas.

“First, the Government trade agencies in various Asian countries can assist Malaysian retailers who lack the experience in overseas ventures to find local partners (via joint ventures, licensing or franchises) and to introduce them to first-tier or Grade A shopping mall owners in various Asian countries,” he said.

He said there was such an agency in Singapore called International Enterprise Singapore. “Its office in Kuala Lumpur assists Singapore retailers in finding local Malaysian partners and organising meetings with shopping mall owners in Malaysia,” he said.

Second, he said the Government trade agencies in developed countries could assist Malaysian retailers in penetrating First World countries such as Japan, South Korea, the United States, Australia and Britain.

“These countries have mature retail markets and large populations. It is difficult for our retailers to succeed in these markets on their own without some assistance from our Government,” Tan said.

“Government agencies like Malaysia External Trade Development Corp have many offices around the world. A retail unit could be set up in each of these offices for the above two purposes,” he added. The Government’s plan is that by 2020, there will be 21 1Malaysia Malls in the regional emerging markets, starting with Vietnam and continuing to China.

1Malaysia Mall will house Malaysian retailers and food and beverage operators under one roof to cater for these emerging markets whose population has not been exposed to integrated shopping as retail is dominated by street shopping. CB Richard Ellis (M) Sdn Bhd managing director Allan Soo viewed the idea of 1Malaysia Mall as not being practical.

“Although the idea of opening malls to sell Malaysian merchandise in the region sounds good, I think the flaw is that our merchandise lacks breadth, depth and is not of top grade A positioning nor branding,” he told StarBiz in an e-mail.

“We do not have a lot of shoe brands nor fashion brands for instance, compared with Thailand. To fill a typical mall of 500,000 sq ft, we need at least 200 shops. If all these shops stock Malaysian brands, we will have an issue filling up with a full range of merchandise that is really Malaysian and interesting enough to draw the crowd,” he said.

He also said having so many Malaysian malls overseas might mean tourists need not come to Malaysia to shop. Soo is involved in retail development consultancy and leasing as well as property market research. Meanwhile, the Malaysian Retailer-Chains Association (MRCA) applauded the proposed 1Malaysia Mall as it would give more business opportunities to all involved in the industry.

President Datuk Tay Sim Kim said MRCA as the leading retail-chain association in Malaysia was receptive to having a regional presence for 1Malaysia Mall.

“The 1Malaysia Mall concept will provide the opportunity for retailers, operators and the Government to pool their resources together in leveraging the best business deals for their respective companies,” he told StarBiz in an e-mail. He added that local licensing, rental and other local issues might affect retailers if they were to expand to the regional market on their own.

“1Malaysia Mall would also enlarge retailers’ market penetration and enhance growth, thus bringing back more revenue. MRCA members will continue to strive for excellence in their products and services, making Malaysian brands known abroad,” he said.

By The Star

Awareness, marketing activities to lift CIMB Property Mart sales

KUALA LUMPUR: CIMB Property Mart expects sales to further improve this year due to better market conditions, awareness and marketing activities.


Ahmad Shazli

CIMB Bank commercial banking head Ahmad Shazli (pic) said the sales for its auctioned properties have been increasing due to rising awareness for its services.

“Auctioned properties transacted by CIMB Property Mart have been on an uptrend on a yearly basis, from about RM60mil in 2007 to over RM360mil last year,” he told StarBiz in an interview recently. He said people were buying auctioned properties for investment as well as own stay.

While auctioned properties can be attractive, Ahmad said buyers should fully understand the terms and conditions before making any purchase.

CIMB Property Mart offers purchasers a comprehensive, convenient and credible avenue for finding the right property.

Buyers can choose from a vast selection of auctioned properties from all over the country ranging from bungalows, terrace houses, condominiums, apartments, shop lots and vacant land.

CIMB is the auction partner for Star Property Fair 2010, which will be held from Nov 19 to 21 at Exhibition Hall 4 and 5 at Kuala Lumpur Convention Centre.

Visitors will be able to view the latest offerings by renowned property developers, purchase the latest products as well as obtain advice on financing options from participating financial institutions. Among other activities planned include talks and forums, contest and more.

By The Star

Tips for first-time house buyers

SK Brothers Realty general manager Chan Ai Cheng (inset) says if one wants to buy a house, one first needs to figure out how much he can afford.

BUYING a house for the first time is like getting married. You need to be level headed, think wisely, plan well and eliminate the chances of regretting the decision later.

For first-time house buyers, scouring the market for a suitable property can be exhilarating but it can also be frustrating if you don’t find “the one” or you do but it comes with a bust-your-budget price tag.

There are a few factors to consider in the pursuit of buying your first dream house. Firstly, a prospective house buyer should ascertain how much upfront money he or she can fork out, says SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng.

“This is important. There are heavy upfront costs depending on what you buy, including transfer cost, legal fees and so forth,” she says.

Secondly, the prospective buyer needs to check with the bank on the amount of loan that can be secured based on the income level. “At the same time, try to have savings amounting to at least three to six months of loan instalments plus household expenses as reserve fund, in case of an emergency,” Chan says.

In short, if you want to buy a house, you need to figure out your affordability – how much you can afford.

A real estate agent tells StarBizWeek that the rule of thumb is that monthly loan repayments should not exceed one third of the gross monthly income.

“In assessing your repayment capability, the financial institution would also take into account your other debt repayments such as car loan, personal loan and credit cards,” he says.

He adds that the margin of financing can go as high as 95%.

“The higher the margin, the higher you will have to pay per instalment. Plus, at a given rate, a shorter tenure will require you to pay higher instalment,” he says.

He adds that after you have set your finances right, make a list of features you are looking for in a house.

“Be sure that the house you are buying is big enough to meet all your future needs, in case you have additional members in the family,” he says.

“Take good note of the area and the neighbourhood as these aspects will play a crucial role in determining the price of the house in case you want to sell it in future,” he adds.

In terms of financing, buyers have a wide array to choose from be it conventional or Islamic.

Under the conventional financing, one’s outstanding loan consists of principal plus the interest charged.

“The interest is actually the financial institution’s cost in obtaining the funds. Islamic financing works on the concept of buying and selling where the financial institution purchases the property and subsequently sells it to you above the purchase price,” says a banker.

As for the loan tenure, it can range from anything up to 30 years or until the borrower reaches the age of 65, whichever is earlier.

She also advises that it’s better to buy than to rent a home as the latter is largely expense without equity.

Furthermore, she says: “When you invest in a home, it offers the possibility for appreciation in value. At the same time, the equity becomes yours when you’re still paying off your mortgage. You even get to live in it while your investment matures.”

Still, the key determinant ought to always be keeping within the budget.

“That’s most important. It’s easy to be swayed into wanting a bigger home or a bungalow just because your friends or someone else has one. This is nice to wish for but definitely not practical if it’s way out of your budget. Be realistic,” the banker says.

Ask on the “right” timing to buy a house, she says there is no “right” time to buy or sell anymore.

“If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes do not usually occur fast enough to make that much difference in price and a good home will not stay on the market long,” she says.

By The Star

First home scheme to attract young buyers

PETALING JAYA: To promote home ownership among Malaysians, the Government has proposed to introduce First Home Scheme whereby Cagamas Bhd will provide a guarantee on the 10% down-payment for houses priced below RM220,000.

The scheme is for first-time house buyers with monthly household income of less than RM3,000. It is aimed at young adults who have just joined the workforce.

With the guarantee from the national mortgage corporation, it means that eligible house buyers will be able to obtain a 100% loan.

First-time house buyers will also be given stamp duty exemption of 50% on instruments of transfer on a house priced at not more than RM350,000. The Government has also proposed stamp duty exemption of 50% be given on loan agreement instruments to finance such first-time purchase of houses.

To expedite the process of property registration, the Stamp Act 1949 had been amended to enable the Valuation and Property Services Department assess properties after the payment of stamp duty to the Inland Revenue Board. This will reduce the property registration process from 30 days to one day.


FD Iskandar says the scheme is good news for the housing sector

Welcoming the First Home Scheme initiative, Real Estate and Housing Developers Association (Rehda) deputy president Datuk FD Iskandar Mohamed Mansor said the scheme was good news for the housing sector, “as just over 73% of houses transacted falls under the category of below RM220,000.”

The 50% stamp duty exemption for houses below RM350,000 covers an estimated additional 10% of the market, and together the incentives benefit all-in-all roughly 87% of housing transactions throughout the country.

While Rehda views the measure as a very positive step towards closing the income gap, it acknowledges that properties which are found within these price brackets are not easily found in Greater KL or Penang due to higher land and construction costs in these vicinities.

Concurring with Rehda, C H Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen expects the First Home Scheme to have a lesser impact on the Kuala Lumpur market as the prices of most houses here exceeded the ceiling set by the budget.

“There will be more significant impact on housing demand in other cities such as Johor Baru, Malacca, Ipoh, and Kuantan,” he noted.


David Ong ... ‘The Government is wielding its influence on two fronts.’

Reapfield Properties Sdn Bhd managing director David Ong said the Government’s “invisible hand” in steering the housing market was important in the light of the current market conditions.

“The Government is wielding its influence on two fronts – to help first time buyers and to signal to developers that a certain type of housing within a certain price range is needed. Developers can probably consider townhouses or condominiums within a certain price range,” Ong said.

Ong said hopefully, with this move, developers would build houses within this pricing category.

Khong & Jaafar managing director Elvin Fernandez said the Government’s move not only recognised first-time house buyers, “but also acknowledged them as newcomers into the workforce.”

“The perimeters set out in the budget are correct. This is the type of house this group will be able to afford. They will need this kind of assistance,” he said.

The move, he said, did not mean that the Government was not considering raising the downpayment for house purchase to 20% or 30%.

“That may still come later on as increasing the percentage of downpayment does not fall within the budget,” Fernandez said.

Ireka Development Management Sdn Bhd chief operating officer Lim Ech Chan said the First Home Scheme would enable first-time buyers to afford their first home and promote a healthy property market overall, encouraging more affordable housing to be made available.

Amphil Corp Sdn Bhd chief executive officer PK Poh said it was an excellent measure to provide the means for young households to purchase “starter” homes “as it will be a sort of forced savings and a hedge against inflation, besides saving money on rental.”

“In our major cities, this would often mean buying small one- or two-room apartments in areas a little further from their workplace than they might like. However, the securing of such a loan is still subject to the banker’s determination of the repayment ability of the borrowers.”

On the development of the 1,072ha Malaysian Rubber Board land in Sungai Buloh by the Employees Provident Fund, Poh said most developers were looking forward to the finalisation of the master plan and the granting of conversion and planning approval from the state.

“The land area comprises both freehold and leasehold lands and needless to say, developers would want to see how they could position themselves and participate in the roll-out of this massive development,” he added.

The mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities, is estimated at RM10bil and is expected to be completed by 2025.

By The Star

Full loan for first-time house buyers

FIRST-TIME house buyers with a family income of less than RM3,000 per month need not pay the 10% down payment under the My First House Scheme (Skim Rumah Pertamaku).

The 10% down payment will be guaranteed by Cagamas Bhd for houses priced below RM220,000.

This will allow the first-time buyers to obtain 100% loan.

They will also be given stamp duty exemption of 50% on instruments of transfer on a house not exceeding RM350,000.

The Government also proposed a stamp duty exemption of 50% for loan agreement instruments to finance first-time purchasers.

There will also be a housing assistance programme with an allocation of RM300mil for the construction and repair of some 12,000 houses nationwide – particularly in Sabah and Sarawak.

For estate workers, the Government will help them own houses under a RM50mil housing sponsorship scheme.

The scheme is open to all Malaysian estate workers to assist them in obtaining housing loans with a maximum of RM60,000 for the purchase of low-cost houses at 4% interest, and a repayment period of up to 40 years, which can be extended to the second generation.

For government servants, the goodies include an increase in the maximum loan eligibility from RM360,000 to RM450,000 effective Jan 1.

Fomca secretary-general Muhammad Sha’ani Abdullah said these moves would help first-time purchasers get housing loans, but failed to tackle the core issue of house prices which had skyrocketed.

“A first-time buyer may get the loan to buy a house, but it may not be the type of house he wants because prices are just too high,” he said.

He added that the Government should set specifications and standards for houses under the RM220,000 price range.

“A house can be priced at RM220,000, but the specifications and the quality of the house may not be much better than a low-cost house,” he said.

Malaysian Small Holders Plantation Co-operative secretary Datuk Aliasak Ambia said the move to help estate workers to own houses was a good move.

“The co-operative provides houses for estate workers to live in while they are still working, but once they leave their jobs, they will not have any homes of their own,” he said.

By The Star

Govt scheme to boost house ownership

Township developers are happy that the government is moving to help young adults with income of less than RM3,000 a month to own a home.

Prime Minister Datuk Seri Najib Razak said yesterday the government will introduce a scheme via Cagamas Bhd, which will provide a 10 per cent guarantee down payment for houses below RM220,000.

This scheme is for first-time house buyers. It allows them to own a home without having to pay the 10 per cent downpayment.

Najib said first-time house buyers purchasing homes under RM350,000 will be given a stamp duty exemption of 50 per cent.



Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum applauded the move as it will reduce the cost of buying a home by as much as RM3,000.

Leong said it would directly and indirectly benefit the buyers of several of Mah Sing's projects, where the properties are priced below the RM350,000 range.

Mah Sing has double-storey homes in Bayu Sekamat, Hulu Langat, priced from RM240,000, and residential suites in Garden Plaza, Cyberjaya, priced from RM108,000.

To facilitate civil servants in owning houses, the government is raising the maximum loan eligibility to RM450,000 compared with RM360,000 currently, effective January 1 2011.

Glomac Bhd group executive vice-chairman Datuk Richard Fong said this will allow civil servants to own more expensive homes.

Fong said he expects the company's townships, especially Bandar Saujana Utama in Sg Buloh, to sell better.

"It is very encouraging for the property sector, for the civil servants and first time house buyers. While developers like Glomac will benefit, it will encourage more people to come forward and buy homes instead of shying away," he said.

Fong also said the government's move will be a big boost for properties priced below RM300,000.

By Business Times

RM1bil for bumiputra property trust scheme

PETALING JAYA: A syariah-compliant Bumiputra Property Trust Scheme will be launched this year with a size of RM1bil.

“To ensure meaningful and sustainable participation of bumiputra, the Bumiputra Property Trust Foundation (BPTF) will provide opportunities for bumiputra ownership of prime commercial properties in major towns. The BPTF will establish a fund to enable ownership of prime commercial properties in the Klang Valley, through a group ownership scheme,” according to Budget 2011.

The proposal is similar to one made in Budget 2006, where it was stated that the Yayasan Amanah Hartanah Bumiputra would be created, to be chaired by the Prime Minister, with an initial capital of RM2bil. This body then set up a subsidiary called Pelaburan Hartanah Bumiputra Bhd, which has since changed its name to Pelaburan Hartanah Bhd (PHB). PHB has a joint venture with Malaysian Resources Corp Bhd (MRCB) to develop a RM1.4bil Lot G integrated development in Kuala Lumpur Sentral.

PHB chief executive Kamalul Arifin Othman also said in reports last year that he expected PHB’s revenue to grow 17% to RM70mil in 2009, driven by rental income from properties it had bought, which include four buildings in the Klang Valley. The buildings that PHB has bought include Menara Bumiputra-Commerce in Kuala Lumpur from CIMB Group for RM460mil and CP Tower in Petaling Jaya, from CIMB-Mapletree Management Sdn Bhd for RM200mil, it had been reported.

Budget 2011 however, did not include any incentives for the real estate investment trust (REIT) sector, which disappointed players in the sector. It had been earlier speculated that the Government could be looking to reduce or remove entirely the withholding tax for REIT investors.

By The Star

Condo home with ‘70s feel

Selangor Dredging Bhd’s latest offering is a small development comprising 38 units on slightly more than an acre.

Located off Jalan Ampang, the developer will be tearing down the bungalow and building two interlocking L-shaped blocks of 10-storey condominium in its place.

Managing director Teh Lip Kim says unlike a high-rise condominium project where its main selling point will be the view, the main selling point for Dedaun is its location and overall design and concept. There is a restriction on height in that location and the maximum for that site is 10-storeys.


The living area and master bedroom (below pic) with its floor to ceiling sliding glass doors can be opened to create a “balcony” effect.

“Although one is living in the city, there will not be that busy hustle and bustle feel once one turns into the slip road that leads into Dedaun. There will be a certain elegance about the place, a quiet serenity although it is just a short walk away from Jalan Ampang,” she says of the niche development. The project will have a lush green perimeter around it, hence the name Dedaun (the leaf).

The project will have a gym, a function room with pantry facilities, a rooftop swimming pool on one of the blocks and a children’s wading pool. There will be three garden units with private gardens and three penthouses with their own swimming pools. There will be two units per floor.



In line with the overall 1970s era that she is trying to portray, Teh is using materials and techniques that will give the place that certain bygone era look.

Teh says she was inspired by the family’s home when she was conceptualising the place. There is the hand-crafted copper front door to create that entrance statement in the foyer or what she calls the waiting area. Each unit will have its own private lift lobby. There was a time when metal doors were used, she says.

In the old houses, there was a lot of cross ventilation and she has made that an important feature in Dedaun. There are a lot of floor to ceiling sliding doors and windows in both the rooms and the living area. There is therefore a lot of natural lighting and airiness about the place.

Space is a premium and Teh has created an aura of space with the open concept with living room flowing seamlessly into the dining and dry kitchen area.

“It is an elegant residential area and despite the changes that have taken place, it will continue to be an upscale area to live in,” Teh says.

Selangor Dredging is one of several developers who have targeted that part of Kuala Lumpur for their niche developments currently. Other developers who are building in that area include Singapore’s CapitaLand group, Gamuda group, Nam Fatt Bhd and Tan Sri Yap Yong Seong, popularly known as Duta Yap who has gone into a joint venture with a South Korean partner. There is also another Singaporean developer who is building their project there.

Among the current on-going projects within the same pricing category as Selangor Dredging’s Dedaun, which is selling for about RM1,000 per sq ft, the largest development is probably CapitaLand’s Sastera@U-Thant with more than 100 units over 1.77 acres.

Other projects by Selangor Dredging includes Park Seven around the KLCC area, AmanSari in Puchong Kinrara, 20trees in the Melawati area and Five Stones in SS2. PJ.

By The Star

Getting back to basics

The real estate market across the region, including Malaysia, is still in the limelight and has shown it has the ability to change the course of things for the economy. Whether we like it or not, property can wield quite a lot of power in the way a country’s economy moves.

How the economy turns out – for better or worse – depends on whether market players, property buyers and the relevant authorities have acted responsibly and watched over its welfare.

The latest concern is that the property market in the region is heating up. China, Hong Kong and Singapore have implemented policy measures to cool their overheating property markets.

Malaysia may follow suit if the rise in property prices widens from the landed housing sector in the Klang Valley and Penang to the other parts of the country.

Undoubtedly, a healthy and sustainable property market will benefit the whole economy as it promotes stronger property values, higher employment and tax revenue, and substantial spill over benefits to the other economic sectors. As such, it is important to ensure the local property market continues to grow and be a productive contributor to the country’s economy.

To achieve that, it is important that the right practices and measures are in place. Getting the basics right is important. And all stakeholders – whether they are property buyers, developers, the regulatory authorities – has a responsibility to ensure the market behaves in a balanced and sustainable manner.

As long as we need a roof over our heads and need to buy or sell property, we are all stakeholders in the property market. Usually a laissez-faire or free market economy is a function of demand and supply. Keeping the market balanced is the best way to go but there are various factors that will affect its balance.

The important attributes for a healthy property market include quality product offerings; ensuring supply matches demand and there is no mismatch in product types; constant flow of products to meet demand; and a healthy financing market. At the fundamental level, the basic tenet for a balanced market is that supply should equal demand.

As the rise in property demand and prices is most visible in Kuala Lumpur and some other parts of the Klang Valley and Penang, the supply line for these markets should keep up with the strong demand. Developers with projects in the pipeline should look into “fast track” development models to churn out more timely products for the market.

Meanwhile, quality should also be emphasised as buyers are more selective these days and do not mind paying more for well-designed projects. In fact, the less hassle for them the better.

That explains why more higher priced projects are in hot demand because buyers don’t mind paying for products that use high quality materials and are renovation-free.

After all, well-designed and wholesome housing estates is one of the basic foundations for healthy families and societies to develop.

In keeping with that, sustainable development should be given more emphasis. If possible uniform standards should be introduced to ensure industry practitioners and the public will more readily embrace green and sustainable development practices and way of life.

Although there is a growing number of property buyers who may be opting for higher priced properties these days, not everybody is able to keep up with the rising prices.

Pro-active measures should be taken to promote home ownership among these people. I believe one of the most effective measures is to have a dedicated national housing board to plan and develop good public housing estates in various parts of the country that have different designs, built-up and price range to cater to the different affordable levels and needs of these buyers. With rising prices of many goods and services, many Malaysians are finding it hard to make ends meet.

They are not just the labourers and bottom ranking workers but include fresh graduates, newly married couples, and middle ranking executives. Instead of building high-density low-cost housing projects, it is better to plan for more medium-priced housing of between RM100,000 to less than RM300,000.

The projects should be in reasonably good and decent locations that have good basic amenities, accessibility and infrastructures. These projects should be given priority and open to all eligible Malaysians who are first time home buyers.

First-time house buyers should be allowed to continue to borrow up to 90% of the property value or even 100% depending on the situation. Ensuring accessibility to loan financing to those who really need them to own their dream home will be a boon to the home ownership campaign. Under Budget 2011, the Government’s proposal to introduce a First Home Scheme with Cagamas Bhd providing a guarantee on the 10% down-payment for houses priced below RM220,000 is a step in the right direction. The scheme will allow first-time house buyers with monthly household income of less than RM3,000 to obtain a 100% loan.

Deputy news editor Angie Ng hopes all stakeholders, including developers, property buyers and the authorities, will give more importance to the sustainable cause.

By The Star (by Angie Ng)

Govt to spend RM100m on Karambunai resort

Developer and resort operator Karambunai Corp Bhd will build an integrated eco-tourism resort (IR) in Kota Kinabalu, Sabah, for over RM3 billion.

In unveiling the 2011 Budget yesterday, Prime Minister Datuk Seri Najib Tun Razak said the government will allocate RM100 million to part-finance the development.

Najib said the project will start next year.

The IR project is now under planning and it will take about five years to complete.

It is learnt that the project, which may look like Singapore's Marina Bay Sands, will be developed over 200ha of land in the Karambunai peninsula.

Karambunai Corp has 600ha of land in the Karambunai peninsula. It has since 1997 used about 130ha to build the five-star Nexus Resort Karambunai, Nexus Golf Resort Karambunai and 200-odd units of luxury beachfront villas.

Company sources said the IR project will have four- and five-star hotels and resorts, waterfront properties and an entertainment centre.

It may also include a museum, cultural villages, a cable car and a theme park similar to the famed Disneyland.

"We have the support of the state-government, which is very pro-active in eco-tourism projects in Sabah. International experts will be roped in for the IR project to ensure that it attracts locals and foreigners, targeting a boost in tourism," one source said.

Sabah-based Karambunai Corp is linked to NagaCorp Ltd, which is listed in Hong Kong and operates a casino in Cambodia.

The two companies' common shareholder is Tan Sri Dr Chen Lip Keong, who founded NagaCorp and serves as its chief executive officer. Chen is president of Karambunai Corp.

By Business Times

RM850m for infrastructure support

The Government will allocate RM850 million for infrastructure support to accelerate corridor and regional development in the country.

Prime Minister Datuk Seri Najib Razak, in his Budget 2011 speech, said the focus will be on several clusters with specialisation and geographical advantages.

Iskandar Malaysia will get RM339 million for the construction of highways, development of housing areas as well as providing and improving public transportation services.

Najib said the amount of investment committed by the private sector in the southern Johor region was RM62 billion as at June 2010, surpassing the targeted RM47 billion. Total actual investment in the same period was RM25 billion.

The Northern Corridor Economic Region will get RM133 million, which includes the development of an agricultural products processing centre, tourism infrastructure and a biotechnology incubator centre.

For the East Coast Economic Region, RM178 million is set aside for projects including industrial parks, water treatment plants, development of tourist areas as well as redevelopment of former Pahang Tenggara Development Authority and Jengka Region Development Authority areas.

Sarawak Corridor of Renewable Energy will receive RM93 million for facilities including telecommunication, water supplies, airport and roads as well as halal food industrial parks.

For the Sabah Development Corridor, a sum of RM110 million is allocated, among others, for palm oil industry cluster projects, agro-industrial precinct and integrated farming centre.

By Business Times

Mixed reaction to PNB's tower plan

Pemodalan Nasional Bhd plans to build a 100-storey tower which is due to be completed in 2015; the Petronas Twin Towers is 88-storey high.

Pemodalan Nasional Bhd's plan to build Malaysia's tallest tower on a 7.2ha area in the vicinity of Stadium Merdeka and Stadium Negara was met with mixed reaction from property experts.

Prime Minister Datuk Seri Najib Razak yesterday announced in his budget speech of PNB's plans to spend RM5 billion on an integrated development by 2020.

The development includes a 100-storey tower which is due to be completed in 2015. The Petronas Twin Towers is 88-storey high.

One property consultant, who declined to be named, said the developer of the tower will have to be very resourceful in order to secure tenants for the space. It is understood that the tower alone will have 3.5 million square feet of space.

He also said that the RM5 billion price tag justified the amount of infrastructure work that would have to go into the development of the area, which includes roads and tunnels.

Zerin Properties chief executive officer Previndran Singhe, as a proponent of iconic structures, is all for the project.

"I've always maintained that an iconic structure doesn't have to be a tall one, but we need iconic structures to give the country a sense of identity.

"Just like how when you think Paris, you think Eiffel Tower," he said.

Previndran said with the government's various initiatives like Kuala Lumpur International Financial District and announcement of three brokerage licences, there was a high probability that there would be a need for the space come 2015.

"Also, we don't know what the composition would be like. It could be 80 per cent office space and 20 per cent hotel space, it's all subject to demand and supply," he said.

A 100-storey building on average would cost 50 per cent more per square foot than a normal high-rise building, depending on the actual design.

By Business Times

Multi-billion projects in the pipeline

PETALING JAYA: The Government has earmarked several multi-billion projects that will see the construction of several highways, a mass rapid transit (MRT) system, and the Kuala Lumpur International Financial District (KLIFD) amongst others, to be kicked off next year.

Generally, the planned development is well-received by the construction sector.

Prime Minister Datuk Seri Najib Tun Razak yesterday said in the Budget 2011 speech that under the public-private partnership (PPP) initiatives, several projects under the 10th Malaysia Plan would be implemented next year through private investment of RM12.5bil.

The Government had allocated RM1bil from the facilitation fund.

Among the PPP projects mentioned are the construction of several highways and 300-megawatt combined-cycle gas power plant in Kimanis, Sabah.

Others are the International Islamic University Malaysia Teaching Hospital, the Women and Children’s Hospital, Integrated Health Research Institute Complex in Kuala Lumpur and Academic Medical Centre.

Additionally, high-impact strategic developments were also identified.

The first is RM26bil KLIFD where the Government is prepared to consider special incentive packages to attract investors to the KLIFD.

Next, is the MRT in Greater KL with an estimated private investment of RM40bil which is expected to be completed by 2020.

Also, the mixed-development of the Malaysian Rubber Board (MRB) land in Sungai Buloh to be undertaken by the Employees Provident Fund (EPF).

This is to be completed by 2025 and the development is estimated at RM10bil.

Finally is the development of another landmark building, a RM5bil 100-storey tower, Warisan Merdeka to be developed by Permodalan Nasional to be completed by 2020.

Master Builders Association of Malaysia (MBAM) was appreciative that the Government would focus on many construction projects under Budget 2011.

Its president Kwan Foh Kwai hoped the Government would ensure the speedy award and efficient implementation of high impact projects.

“Any delay in implementation, will mean additional costs to the project,” he said in a statement yesterday.

Additionally, StarBizWeek also contacted Kwan to ask on possible shortage of construction capacity such as professional and labour workforce as well as raw materials due to the implementation of the mega-size projects.

“Because most of the projects are spanned across 10 years on average, we do not expect to experience any shortage on professionals such as engineers and architects as well as raw materials.

“The current demand of raw materials are also within the capacity of suppliers,” he said. But, Kwan was a little bit concern on labour workforce as the industry now was over-reliant on foreign workers.

“That is why MBAM supports the initiative to reshape the economy through a focus on intensifying human capital development, vocational training and improving lifelong education that will help improve the labour force in Malaysia,” he said.

Meanwhile, EPF chief economist Norashikin Abdul Hamid said the development of MRB land by EPF was expected to boost the economy and the construction sector in particular.

“The Government’s decision in selecting EPF to enter into a joint-venture with the Federal Government to develop the land has been weighed and deliberated carefully, given EPF’s strong financial position,” she said.

UEM Land Bhd director of finance, corporate affairs and investment Mohd Zakir Omar supported the PPP concept and the company had been pursuing to the Government a number of projects in the past few years involving property development.

By The Star

Budget 2010/2011: Major infrastructure boost

KUALA LUMPUR: The government made good its commitment to forge ahead with major infrastructure, construction, and oil and gas-related projects under the Tenth Malaysia Plan when the Budget 2011 proposals were unveiled on Friday, Oct 15.

Among them are the Mass Rapid Transit (MRT) in Greater KL; a 100-storey skyscraper in the heart of Kuala Lumpur and a regasification project in Malacca.

These projects would be a boon to infrastructure and construction players, as well as those providing oil and gas support services, fabricators and those specialising in pipe-coating services.

For the MRT project to be implemented next year, the estimated private sector investment is to the tune of RM40 billion. The project is envisaged to be completed by the year 2020 and is expected to increase utilisation of public transportation by at least 40%.

Permodalan Nasional Bhd will undertake development of the integrated Warisan Merdeka, including a 100-storey skyscraper that would be the tallest building in the country, at a cost of RM5 billion. The tower will be completed in 2015, and the project would retain the Merdeka Stadium and Stadium Negara as national heritage sites.

Another mammoth project is the RM10 billion Sungai Buloh project at the current Malaysian Rubber Board land covering an area of 2,680 acres. The Employees Provident Fund will develop this project.

As the oil and gas, and energy sectors remain among the major contributors towards the national economy, the government has pledged RM146 million to support the sector and expand downstream activities.

Towards this, the government proposed an oilfield services and equipment centre in Johor that will be built at a cost of RM6 billion via private investment.

Also, Petroliam Nasional Bhd would undertake a proposed RM3 billion regasification project in Malacca, to be operational by 2012.

By The EDGE Malaysia

Cyberjaya green office a milestone for Emkay

The Emkay Group, owned and controlled by Tan Sri Mustapha Kamal Abu Bakar, is set to become one of the country's top "green" property developers with the launch of its first and very own green office building in Cyberjaya.



To be opened in December, the Emkay Group through its associate company Joyful Gateway Sdn Bhd, will set another benchmark in the country and Cyberjaya's green building development.

The RM150 million office tower, which will be occupied by a multinational oil giant for the next 10 years, is set to be accredited as the country's first LEED gold certified building by April next year.

The LEED or Leadership in Energy and Environment Design rating and certification standard is a green rating given by the internationally recognised USA Green Building Council.

LEED rating has four levels of certification, including platinum, gold and silver certification. They promote design and construction practises that increase profitability, reduce negative environmental impact of buildings and improve occupants' health and well being.

The LEED rating system is based on six green design categories which are sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality and design innovation.

The office tower project was awarded to the Emkay group in October 2009 via an open tender and is expected to be launched by Prime Minister Datuk Seri Najib Razak.

Emkay representative Balasundram R. said this will be a proud and important milestone for the group and recognition to its ability as one of the country's top property developers

"The experience accumulated by the group over the years has enabled us to build this green building," said Balasundram.

The green building is 100 per cent developed by Emkay group via Joyful Gateway and is the first building in Cyberjaya to be pre-certified with the prestigious internationally recognised LEED gold certification.

The tower will house five levels of office space and three levels of sub-basement for car-parking.

It is designed to conserve energy and natural resources and provide for a healthier and safer environment designed to improve the quality of human life and increase the productivity of operations.

The form of the building capitalises on the natural terrain of the land, which slopes down towards the back.

This allows for the sub-basement carpark levels to be naturally ventilated and minimise energy usage.

Other green features include the use materials with higher recyclable content and energy-efficient equipment, the enforcement of water efficiency strategy, the control and management of the environment during construction and also the strive to improve the quality of the indoor environment.

By Business Times

UniFi for 19 projects in Johor

JOHOR BARU: Telekom Malaysia Bhd (TM) will next year sign service agreements with 19 property developers in Johor to provide high-speed broadband (HSBB UniFi) services in their projects.

TM Johor general manager Mohd Roslan Mohd Rashidi said all 19 projects were located within Iskandar Malaysia in greenfield areas where it would be easier to lay the HSBB infrastructure instead of brownfield areas or places that were already developed.

“Presently, 2,000 premises within Iskandar have access to HSBB UniFi and the figure is expected to increase to 120,000 by 2013,” he told a press conference after an agreement signing between TM and UMLand Bhd subsidiary Dynasty View Sdn Bhd for the provision of HSBB UniFi services in Taman Seri Austin.

All 316 double-storey link houses in the gated and guarded precinct under phase three of the project will receive free HSBB UniFi services for up to two years.

Taman Mount Austin is the second housing scheme in Iskandar to have HSBB UniFi connectivity. TM had in August signed a similar agreement with Mudra Tropika Sdn Bhd for its Nong Chik Heights project.

Roslan said TM would also extend the HSBB service to Pasir Gudang and Seri Alam in a few months. Areas in Iskandar that currently enjoy the service are Nusajaya, Permas Jaya and Senai.

“The Johor Baru city centre transformation plan also includes HSBB UniFi connectivity,” he said.

By The Star

Plans for national REIT body and withholding tax removal likely

PETALING JAYA: The Malaysian real estate investment trust (REIT) sector is likely to get a boost soon, with firmer plans for a national REIT company and a reduction or removal of the withholding tax for REIT investors, sources said.

The national REIT will likely include a number of assets belonging to the Government and government-linked companies (GLCs).

“There is a huge potential for “REITing” these government properties in a similar way Singapore did,” said a source.

In the 10th Malaysia Plan (10MP), there was a proposal for Pelaburan Hartanah Bhd to set up REITs to facilitate bumiputra investment in commercial and industrial properties and benefit from property appreciation.

It is likely that Pelaburan Hartanah would be used to set up the national REIT, drawing from the experience of Singapore.

There the government had made available a vast array of properties to be put into REITs such as those run by CapitaLand.

“The Singapore government wanted to turn Singapore into a REITs hub and has achieved much success with attracting capital to its market,” explained a REIT expert.

The expert added that in Malaysia, there were a vast array of properties still being held primarily by GLCs which could be put into a REIT.

There are 14 listed REITs on Bursa Malaysia with a total market capitalisation of slightly over RM10bil. In comparison, Singapore’s REITs’ market capitalisation is more than RM60bil while Japan’s stands at around RM100bil.

In another effort to boost the REIT sector and to move it on par with markets like Singapore, the Government is likely to reduce or remove entirely the withholding tax for REIT investors. This is something that REIT players had been lobbying the Goverment for the last few years to no avail.

“The aim is to bring it in line with markets like Singapore and Hong Kong where individuals and institutional investors do not pay withholding tax on REIT investments,” said a party familiar with the situation. Both local and foreign retail and institutional investors in Malaysia now have to pay a 10% withholding tax, which had already been reduced from the 25% tax rate previously. The withholding tax rate in Malaysia has not been adjusted since 2008.

ECM Libra head of research Bernard Ching said a reduction of withholding tax for REIT investors would be a major boost for the sector “as the effective dividend yield to shareholders would rise, which would translate into higher capital values for the REITs.”

Analysts have said that REITs in Malaysia had traded at a discount to those in Singapore and Japan in terms of yields and their price to net asset values.

The analysts have said that while factors such as asset and liquidity played an important role in determining valuations, the tax regime and REIT guidelines imposed by governments and authorities in individual countries also affected the attractiveness of all REITs.

Another analyst, however, said the Government may be hard-pressed to reduce the withholding tax, considering that it just postponed the implementation of the planned goods and services tax.

But it is understood that the REIT withholding tax waiver would not seriously dent the Government’s coffers in terms of the total amount of lost tax revenues from this sector. Furthermore, the last tax waiver proposal is believed to be only for a three-year period.

It is understood that these proposals may appear in the soon-to-be- announced Budget 2011.

By The Star

Call to curb loans for third home buyers

GEORGE TOWN: The Penang Master Builders’ and Building Materials Dealers’ Association (PMBBMDA) urges the Government to impose a cap on the margin of advance for housing loans for third home buyers.

The move was necessary to curb speculation, reduce gearing of purchasers, and maintain the sustainability of housing prices and the property market, PMBBMDA president Vincent Ong told StarBiz.

“The first and second home buyers should continue to get borrowing up to 90% of the property value to ensure that the demand for properties is sustained, creating spill-over effects for the contractors and building materials suppliers,” he said.

He also added that the federal and state governments should also implement more government projects in Penang, as there were so far only 28 projects, with a total value of RM172mil, awarded by the government sector for Penang for the period January to June 2010.

“Even though the number of government projects has increased from 10 in the first quarter to 18 in the second quarter, the value of government contracts is still very low and only makes up about 13% of the total value of projects awarded to the Penang state of RM1.35bil,” Ong said.

Meanwhile, PMBBMDA immediate past president Finn Choong said the Government should quickly draw up a national policy on green building.

Choong said so far the guidelines for green or environmentally friendly buildings and policy were being implemented on a piecemeal basis at the state level.

“A standard national policy on sustainable buildings would not only further spur the adoption of green lighting components such as light-emitting diodes (LEDs), and environmentally friendly materials but also commit the country towards a sustainable culture as we make the transition towards a developed nation,” Choong added.

On another matter, the PMBBMDA urged the federal government to consider deferring or revoking altogether the imposition of ad-valorem stamp duty for all service agreements in 2011.

By The Star

LBI Capital buys land in Genting

PROPERTY developer LBI Capital Bhd is buying a leasehold land measuring 2.166ha located near Gohtong Jaya, Genting Highlands, for RM5 million, to build resorts and hotel suites.

The acquisition is to enhance its property development activities given the completion of most of its projects, LBI said in a filing to Bursa Malaysia yesterday.

By Business Times

Amcorp Prop buys UK property

PETALING JAYA: Amcorp Properties Bhd is enhancing its presence in London by buying a freehold commercial property along Baker Street from British Land Offices (Non-City) Ltd for £16.25mil in cash.

It told Bursa Malaysia yesterday that British Land would convert part of the building into residential units, with work on the residential scheme scheduled to start in early 2011 and completed in 12 to 18 months.

By The Star

Rehda to hold 3-day property expo

The Real Estate and Housing Developers' Association (REHDA) will showcase a wide selection of properties at Malaysia’s Property Exposition 2010 (MAPEX 2010) from Oct 22 to 24, 2010.

In a statement today, REHDA said MAPEX 2010, with the theme '1Malaysia, 1Home', aimed to connect homebuyers to their dream home by providing a comfortable and convenient avenue for information seeking and exchange through interaction with 38 property developers.

Housing and Local Government Minister, Datuk Chor Chee Heung, will officiate at the launch of the expo on Oct 23.

Chairman of MAPEX committee, Datuk Ng Seing Liong, said in the spirit of 1Malaysia, REHDA wished to set up this platform to help the rakyat of all races own a home.

"At MAPEX, everyone can talk to the developers, pick up brochures and gather as much information as possible to make informed choices," he said.

Other participants include financial institutions, Tribunal for Homebuyers Claims, Treasury Housing Loan Division, Malaysia My Second Home, Employees Provident Fund, Malaysia External Trade Development Corp and the National Housing Department.

The event will be held at Midvalley Exhibition Centre.

By Bernama

Tighter BNM rules on property sector likely

Malaysia is expected to adopt tighter regulations in the 2011 Budget to curb potential dangerous run-up in consumer credit card spending and speculation in the property market.

“We believe Bank Negara Malaysia (BNM) is focusing on tackling household debt in 2011 to promote healthy credit card spending,” said Kenanga Research.

In its 2011 “Wish List”, Kenanga said the central bank should consider imposing tighter borrowing limit for the property sector to avert potential over-leveraging on the household segment and speculations.

It said bank loans should be lowered to between 70 and 80 per cent value ratio for third mortgage, it said.

Bank Negara should also consider capping maximum of two mortgages for each borrower, it said, adding that such a rule would slow down housing price appreciation rate, going forward.

Should tighter borrowing rules be enforced in 2011, it would not have any impact on loan growth this year as borrowings are anticipated to remain strong till year-end, it said.

“But we are cautiously optimistic on business loans as businesses in the next six months may be negatively impacted by global economic turmoil and Malaysia''s economy is not immuned from moderating global growth,” it said.

The research house said it was cautious for the second half of this year due to healthy loan growth but increasing risk on slower growth in the business segment, namely manufacturing and exports.

"Profit margin squeeze is directly triggered by the wave of intensely- competitive pricing, moderate growth expectation and possibility of a slowdown on mortgages if 70 per cent to 80 per cent loan-to-value ratio (LVR) is implemented.

“We see the implementation of a blanket 70 per cent to 80 per cent LVR cap as a real challenge to the industry's loan growth next year and could put pressure on retail banks,” it said.

However, strong asset quality suggested lower credit charge-off, going forward, compensating net profit for the lower top line growth, it said.

As for credit cards, Kenanga said new measures should see tougher limits on the number of cards a person could hold and lower credit limit on each card.

Bank Negara should restrict a consumer to own only two credit cards from two banks of their choice and allow people with an annual income of above RM24,000 to own a credit card from the current minimum requirement of RM18,000.

The central bank should also reduce spending limit by 1.5 times their monthly salary (currently 2.5-3.0 times), set at the bank’s discretion for first-time applicants.

“In our view, stricter credit card rules are prudent and limit the risk of rising household non-performing loans. It will curb spending-spree cultures that have surfaced in certain segments of the population recently,” it added.

By Bernama

LBI to buy land in Pahang for RM5.5m

Triple Equity Sdn Bhd (TESB), a wholly-owned subsidiary of LBI Capital Bhd, has signed a conditional sale and purchase agreement (SPA) with Space Passage Sdn Bhd (SPSB) for 2.16-hectare leasehold land in Pahang for RM5.5 million.

In a filing with Bursa Malaysia, LBI Capital said the purchase consideration would be satisfied by way of cash from internal funds and banks borrowings.

It said TESB, a property development company, planned to develop the land, located near Gohtong Jaya, Genting Highland, into a resort and hotel suites.

LBI Capital said the acquisition would increase the development land of the group and contribute higher earning in the future.

By Bernama

HK luxury property market rosy, say experts

HONG KONG: The latest government land auction, a site in the Kowloon Tong district in Hong Kong, has fetched a higher-than-expected price at US$210 million.

Analysts said the price reflected optimism about luxury property prices in Hong Kong and expected that the government would not be raising curbs on property speculation.

Two developers had earlier bid for the site: Robert Kuok's listed Kerry Properties, which owned an adjacent site and unlisted ChinaChem Group, the property empire of the late Nina Wang.

ChinaChem eventually won with a bid of US$210 million - 55 per cent higher than the opening price, and exceeding expectations.

By AFP

PJD to launch projects worth RM2b next year

PJ Development Holdings Bhd (PJD) is set to unveil three new projects worth over RM2 billion next year as it is bullish that market will perform better on pent-up demand for high-end properties.

Managing director Wong Ah Chiew said he is confident that the new projects, located in hot spots like Sri Hartamas, Cheras and Kuantan, Pahang, will do well.

This year, PJD did not launch any new projects except for sub-phases in existing developments because of uncertainties in the market.

The company has five on-going projects, lasting it for the next five years. They are Swiss-Garden Residences at Jalan Pudu, Kuala Lumpur, Taman Putri Kulai and Mont' Callista in Johor, Taman Bukit Istana in Kuantan, and Ocean View in Butterworth, Penang.
"These projects have been selling well. For instance, Ocean View, a condominium development, is 80 per cent sold. We have a number of enquiries for new projects and that is why we are launching," Wong said.

In Sri Hartamas, PJD will launch Dutamas Kingsbury, located near Solaris, the bustling commercial centre of Mont' Kiara, by early next year.

Dutamas Kingsbury boasts over 200 condominium units, each with built-up of more than 2,000 sq ft, priced from RM650 per sq ft, and some 60 units of three-storey super link homes, with over 3,000 sq ft in built-up area, selling from RM3 million.

"Demand and choice are there and availability of land is scarce in the Mont' Kiara area. So we hope there will be good take-up," Wong said after the company's extraordinary general meeting in Kuala Lumpur yesterday.

In Cheras, PJD plans to launch an integrated development featuring retail lots, shopoffices, a mall and high-rise serviced apartments, by mid-2011.

Wong said the best project will be the resort-style development at Sg Karang in Kuantan, located close to Swiss-Garden Resort & Spa Kuantan.

The project, which is targeted for launch in the second half of next year, will comprise seafront condominiums, and a four- or five-star hotel.

"We expect that from 2011, when all these projects take off, our turnover from property development will increase. We have several other new projects in the planning stage," Wong said.

For fiscal year ended June 30 2010, PJD posted a net profit of RM52.8 million on revenue of RM666 million, whereby 40-odd per cent was contributed by property development.

PJD also runs a profitable power cable manufacturing business and owns the Swiss Garden chain of hotels.

"We will definitely perform better in the current year," he said.

By Business Times

Subang - best choice for city airport

ONE idea that should have been given more prominence in the Economic Transformation Programme (ETP), in the context of “Greater KL”, is the creation of a city airport.

Specifically, turning the already existing Subang airport into a city airport, with more aircraft plying it, including (albeit, in a limited way), commercial jet aircraft.

City airports are a feature of many major cities the world over and they seem to nicely complement their major airports.

What sets this idea apart from other transport-related ones in the ETP is that it requires so little to get it started. That’s because we already have a city airport in form. What is needed is a mere tweaking of policies. At present, the Sultan Abdul Aziz Shah Airport in Subang only allows the operations of propeller aircraft (for commercial passenger flights).

Turning the Subang airport into a full-fledged city airport does not require the heaps of investments other transport-related plans mentioned in the ETP.

Furthermore, it requires very little changes to an already choking city. One just has to imagine the major construction works that will be carried out to build the mass rapid transit system over the next few years. And, the astronomical ball park figure of RM50bil to get that project up and running. Until today, it is unclear who exactly is going to fork that money out.

To turn Subang airport into a city airport however, will require a decent dose of political will and careful explanation to interested parties why this is a good idea now.

To be sure, this idea is not new. Everyone following the aviation industry will know of that one very entrepreneurial airline industry individual who had lobbied long and hard for his budget airline to use Subang as its base. The idea even then, made perfect sense but it was never to see the light of day, for one reason or another.

One of those reasons was a determination by the Government to make KL International Airport (KLIA) a success.

Hence the question is, will a move to have a city airport be detrimental to KLIA? From the standpoint of airport operator, Malaysia Airports Holdings Bhd (MAHB), the concern will surely be that its earnings from KLIA could be cannibalised from giving Subang more flights.

Well, that’s one way of looking at it. Another way to see it is that Subang can play a complimentary role to KLIA, just like how most city airports in bigger cities around the world do. In London, Chicago, New York, Tokyo and Shanghai, the city airports have posed no major threats to the main airports in those cities, as the city airports play a sort of niche and complimentary role. Furthermore, it is very likely that having a city airport would create new revenue streams for MAHB.

City airports tend to cater to shorter flights and appeal largely to businessmen and professionals making short flights to attend meetings.

A well-located city airport (like the one in Subang) will help reduce regional business travel time significantly, which in turn could enhance productivity levels of Malaysian professionals and businessmen.

Subang airport’s transformation into a city airport has other advantages. Since 2008, work had begun to transform it into a modern day airport by its operator Subang Skypark Sdn Bhd, with much success, judging by the growing number of passengers travelling through it. The area is also the home of the Malaysian International Aerospace Centre.

It is located not too far away from the KTM Komuter station in Subang Jaya. This poses the possibility, again without a massive amount of capital expenditure, to link the airport up with the city via KL Sentral. Imagine the connectivity and time-savings for a business traveller flying in from say, Bangkok or Singapore for a meeting in Shangri-La hotel in downtown Kuala Lumpur. Hence more little more needs to be done other than a change in government policies, to give this facility a chance to become a full-fledged city airport.

Jet aircraft plying Subang however, had been contentious in the past for another reason – some residents of Subang didn’t quite like it, and understandably so. But smaller narrow-bodied jet aircraft should be less offensive to the residents.

Also, to be noted is that Subang airport already has jet aircraft flying into it, in the form of private jets and Transmile Group Bhd’s cargo planes. Furthermore, if indeed, Subang airport is made the city airport, the township of Subang should see a multiplier effect as the connectivity would bring in more travellers needing services such as eateries and hotels. Property prices in Subang will also likely to benefit. All that may be needed is careful planning and proper communication and the chances are, there would be more people supporting the idea of making Subang airport, Greater KL’s much needed city airport.

Deputy news editor Risen Jayaseelan, who lives less than 20km from the Subang airport and who loves to travel into the region, openly declares that his arguments for more flights out of Subang Airport is partly driven by personal interests.

By The Star (by Risen Jayaseelan)

Property tax likely to be launched soon

BEIJING: China will soon start to levy a property tax on a trial basis to curb speculation and contain housing inflation, an industry group said yesterday.

Talk about a property tax has swirled in China for many years and has weighed on the domestic stock market this year amid signs that the government was about ready to implement such a levy.

“It will be launched within months, not in years,” Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum.

The central government said at the end of September that it would accelerate efforts to launch a property tax trial, though it gave no details.

He Ken, deputy head of the economic committee of the National People’s Congress, China’s largely ceremonial parliament, told the same forum that the tax rate would be higher on bigger homes and that homes below a certain size would receive exemptions.

“Imposing a property tax is a major way to curb speculation,” Mr He said. “All other measures are unable to help China fundamentally solve the housing problem.”

The municipalities of Shanghai and Chongqing have already submitted proposals to the central government for how to design a property tax. Nie said China would experiment with multiple alternatives in the trial stage.

China unveiled a battery of policies to cool its real estate market earlier this year and reinforced them at the end of September with a move to raise downpayments on some home purchases.

There had been signs of a pick-up in property transactions and prices in recent weeks but the latest steps appear to have taken the wind out of the market’s sails.

“A rebound in housing prices is unlikely this year,” Nie said.

By Reuters

Mah Sing: Keep tax relief on housing loans

Mah Sing Group has called on the government to maintain the tax relief on interest up to RM10,000 per year incurred on housing loans.

This was initially announced for sale and purchase agreements executed between March 2009 and December 2010.

"In fact, it would be good if the tax relief is extended to all interest incurred on end financing for the first home," said Mah Sing's chief executive officer Tan Sri Leong Hoy Kum in a statement today.

In line with government's initiative to promote affordable home ownership, he said the government could also consider providing grants for first-time house owners.

On the proposal for the loan to value ratio to be reduced to 70 or 80 per cent for third and fourth property, Leong said any implementation should take into consideration the industry feedback and current market consideration.

"We are confident that banks are very selective and have their own set of strict guidelines when giving out loans to ensure high quality of loans," he said.

Leong said for Malaysia to become a high-income economy, the mandatory delivery of a given percentage of low-cost houses by developers should be reviewed.

"In selected locations with high land cost, this can be replaced by the delivery of low-medium cost houses so that it will be more equitable for developers," he said.

He also hoped that the government will further ease policies to encourage foreigners to buy properties in Malaysia as this can be significant source of foreign direct investment.

By Bernama

iProperty.com launches ad-free portal

IPGA Ltd, owner of Asia's number one network of property portal under the iProperty.com umbrella brand (www.iproperty.com), has launched an ad-free property portal Propertyguru.com.my.

The portal is for use to test innovative interface design concepts and technologies, iProperty.com said in a statement today.

The group's chief executive officer Shaun De Gregorio said the new beta site is a platform to safely test new technology and products and set new industry standards for Malaysia and the region.

"The launch of our new beta test site, Propertyguru.com.my, is a welcome addition to the iProperty.com group of website," he said.

"It is a testament to the iProperty.com group's commitment to innovation and to providing our consumers with a different search experience."

Launched as an extension of the iProperty.com Malaysia brand, all property data on Propertyguru.com.my, including its 120,000 property listings for sale and rent, is powered by iProperty.com.my.

By Bernama

Menara Binjai receives provisional BCA Green Mark Gold Award

Menara Binjai, a 35-storey state-of-the-art green office tower

Menara Binjai, a 35-storey state-of-theart green office tower being built in the heart of KL’s Golden Triangle, has been awarded Singapore’s Provisional Building and Construction Authority (“BCA”) Green Mark Gold Certification.

Menara Binjai is also awaiting the final approval for its certification from Malaysia’s Green Building Index (“GBI”). With these dual green certifications, Menara Binjai will be the first dedicated office tower in Malaysia to be awarded both awards.

“We are delighted that Menara Binjai has been awarded BCA Green Mark Gold status. Right from the start, the company decided that the design and features incorporated into the tower would use cutting-edge Green technology to reduce the environmental impact wherever possible,” said Chua Guan-Hock, one of the six directors of the developer, Khor Joo Saik Sdn. Bhd. Located next to the Ampang Park LRT Station, Menara Binjai is a stone’s throw from the Petronas Twin Towers and KLCC, and is easily accessible from all major highways.


The roof garden of Menara Binjai

“We are very fortunate to have a unique location at the intersections of three major roads which are Jalan Ampang, Jalan Binjai and Jalan Tun Razak. All key highways, MEX, DUKE, and AKLEH are easily accessible. Tenants and visitors have a variety of transportation options whether by car, or public transport such as the LRT, buses, and taxis,” commented Chua on Menara Binjai’s location.

Designed by Veritas Architects, with Ranhill Consulting as mechanical and electrical engineering and green consultant, the tower complies with stringent environmental regulations. The energy-efficient operations allow up to 25% savings on electricity and air-conditioning consumption.

“We are also bringing nature to every three floors of Menara Binjai. Every third floor will have access to a unique triple volume garden terrace with lush greenery. This is a first for office towers in the country. There is also a Sky Garden on the 32nd floor where an unobstructed view of the Kuala Lumpur cityscape awaits. We spend most of our time in the office, and we want to ensure our occupants are comfortable and enjoy coming to work every day,” added Chua.

The exclusive leasing agent for Menara Binjai is Jones Lang Wootton. Menara Binjai is targeted for completion in Q4 2011. The property manager is CB Richard Ellis, a leading international property manager. For more information, please visit www.menarabinjai.com

By The Star

PJ Devt to launch integrated devt project GDV RM750m in Cheras

KUALA LUMPUR: PJ DEVELOPMENT HOLDINGS BHD (PJD) is expected to launch an integrated development project with gross development value (GDV) of about RM750 million in Cheras mid-2011, said its managing director Wong Ah Chiew.

He said PJD has obtained green light from the authorities for the development order of the project and was currently awaiting approval for its building plans, adding that the project would be on a 20-acre area.

Wong noted the project would include commercial units and high-rise service apartments as well as a retail shopping mall.

"We have not really named it (project) as yet as it is in the final stages of approval... It will be quite a big development," he told reporters after the group's EGM on Monday, Oct 11.

By The EDGE Malaysia

PortCity@POIC set to boost Lahad Datu

ECONOMIC growth in Sabah's east coast town of Lahad Datu is poised to be boosted with the development of the PortCity@POIC, a commercial project.

To be developed by BriSteel Properties Sdn Bhd, the project covers a 10ha area located not far from the Lahad Datu town centre.

The project involves the construction of a commercial complex with 196 shop and office units as well as 35 detached home units and industrial warehouses.

Launching the project yesterday, Palm Oil Industrial Cluster (POIC) Sabah chief executive officer Datuk Dr Pang Teck Wai said the project would contribute towards enlarging the business opportunities in Lahad Datu.

"The project will make Lahad Datu even more attractive for investors and I would like to encourage the business community to explore business potential generated by the development of the POIC," he said.

Lahad Datu is also famous for its tourist attractions such as the tabin Wildlife Centre and Danum Valley Conservation Centre.

Pang said if the development in POIC is well planned, it could also become a place that attract tourists.

BriSteel Properties managing director William Chee said the PortCity@POIC project which will be developed in three phases is expected to be fully completed within three years.

By Business Times

Exco Village bungalows for rent

STUMPED for business ideas to maximise the revenue-making potential of the Exco Village in Section 7, Shah Alam, the Selangor government has begun renting out the 10 bungalows for a paltry RM170 each, per day.

State housing, building management and squatters committee chairman Iskandar Abdul Samad said the revenue earned from the rental would be channelled to the state government.

“We have succeeded in cutting the maintenance of the complex from RM170,000 per month to RM70,000,” he said.

Opposition chief Datuk Seri Dr Mohamad Khir Toyo lambasted the Pakatan government for not being able to keep their promise to unlock the business potential of the bungalows.

“First they attacked the project and called it a waste. Then they promised the people that it would sell the complex and the money would be used for community-based projects.

“Later in June 2008, state executive councillor Ronnie Liu suggested it be turned into a medical centre while Sekinchan assemblyman Ng Suee Lim called for it to be part of a tour package.

“After 18 months have gone by, we now find each of the six-room bungalows is being rented out at only RM170 per day,” he said.

“It is a resort setting that offers expensive and comfortable facilities and it cannot be rented at such low fee. This is shameful,” he added.

Even Ng feels that RM170 is too low a rental for the bungalow, and plans to table the issue at the coming state assembly sitting.

All bedrooms and the living room are air-conditioned. There is hot shower in each bathroom and guests also have acccess to an outdoor swimming pool with jacuzzi.

Iskandar said the rental sum for each bungalow per day was agreed to by the state and which was based on De Palma Hotel’s rate for a standard room.

We decided to rent the bungalows out and sought the help of De Palma Hotels, a subsidiary of Selangor State Development Corporation, to conduct a study.

“At first the state wanted to appoint De Palma to manage the bungalows but after some consideration, we decided that the State Management Services could do it,” he said.

He said the whole complex was now called Selangor Government’s Rest House.

“We will change the board at the entrance soon.

“Six of the 10 bungalows are surrounded by lush greenery and used for training, meetings and government courses as well as to house state guests.

“Most of the time we have courses for local leaders including village heads, officers in the Mentri Besar’s office and for spiritual, physical, intellectual, emotional and social programmes at the rest house,” he added.

Iskandar said four bungalows had been allocated to the state legal adviser, state financial officer, state information director and the Petaling District Council president.

The Exco Village was built at a cost of RM21mil. However, since the Pakatan Rakyat government wrested power from Barisan Nasional in the March 2008 general election, it has been unable to unlock the village’s business potential.

Voices on the ground had begun to rumble over the bungalows and the decision to set such low rent for the luxurious bungalows.

Dr Khir said even if all six bungalows were rented out for a year it would earn about RM370,000 and there would be no profit as the revenue would go to paying for maintenance, management fees as well as the wages of gardeners and security guards.

“It would be better for the state executive councillors to move into the bungalows as that would save the ratepayers’ money,” he said.

By The Star

China's tightening moves to speed up property sales

HONG KONG: China's series of policy tightening measures to prevent a property bubble from bursting will likely speed up sales of some projects as prices in top tier cities fall, analysts and industry executives said on Monday, Oct 11.

Since April, China has announced a range of measures to curb the sector that is in danger of overheating, including raising downpayments for home purchases and requiring banks to conduct stress tests in case of sharp housing price declines.

Earlier on Monday, sources told Reuters China has raised reserve requirements for six large commercial banks by 50 basis points on a temporary basis, a surprise move to drain cash from the economy, but avoid over-tightening.

"Some developers would speed up project sales from the second half of this year to the first half next year so as to reduce their reliance on loans from banks with the government's measures to reduce liquidity," Evergrande Chief Executive James Xia told a news conference on Monday.

Last week, Shanghai issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax. A newspaper also reported that Shenzhen would prohibit local families from buying a third home and those who don't pay local taxes would be barred from buying any unit.

PROPERTY TAX EXPECTED

China will likely introduce a property tax on a trial basis to further clamp down speculation in the sector, especially in first tier cities where prices remain high, though the market is mixed on when the tax might be launched.

Xia said there was a slim possibility that the trial property tax would be introduced this year, though Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum in Beijing earlier on Monday that it would be launched in months.

With the government's series of measures announced this year to cool the property sector, housing prices in top-tier Chinese cities will probably fall by 10 percent over the next 6-12 months, ratings agency Standard & Poor's said.

China's housing prices in top cities, such as Shanghai, Guangzhou and Shenzhen, had fallen by about 10 percent as of the end of August from a peak in April, before the impact of tightening measures started to have a negative impact on the market, S&P credit analyst Bei Fu said.

"We expect such corrections to deepen in the next 6-12 months," Fu said in a media teleconference after the ratings agency issued a report on China's property sector, although she added that the corrections would not be as sharp as in 2008.

"In 2008, we've actually seen probably a 20, 30 percent downward correction in a timeframe of six to nine months. So this time, it's going to more moderate, kind of gradual downward adjustment," she said. Some analysts expect the impact of tightening moves impacting the property market for several months to come.

"We are not so optimistic on the short-term, believing that the government will not easily surrender its current tightening efforts, which have a lagging effect, and will be felt more acutely in the first half of next year," said Wee Liat Lee, regional head of property at Samsung Securities.

By Reuters

S&P: China property developers may faces price cuts of 10% in main cities

HONG KONG:-China's property developers may face further price cuts of up to 10% in major cities in the next 12 months, says Standard & Poor's Ratings Services.

It said on Monday, Oct 11 that despite the sector volatility and regulatory uncertainty, the developers appear to be in a healthier position to withstand such challenges compared with the downturn of 2008.

"The government's policy attempts to prevent sharp price rises and speculative activities, which muted demand, have coincided with an abundance in supply of new property for sale. As a result, we believe there is room for average selling prices to adjust downward in the near term," said S&P credit analyst Bei Fu.

"Nevertheless, many developers have adequate liquidity and have already locked in the majority of their revenue for 2010. That will reduce the pressure to make drastic price cuts in the near term," she said in a recently released industry report card by S&P, titled “Chinese Real Estate Developers Are Wary As Correction Deepens".

The report card compares the rating and outlook trend today with that in February, when it published the last sector outlook report entitled “Rankings of Chinese real estate developers in a sector ripe for consolidation.

It also comments on the performances and credit outlooks on more than 20 developers and ranks them according to their credit profiles.

"Given the reasonable financial and liquidity position of many developers, we stand by our stable short-term outlook for the sector, despite the continued volatility and aggressive expansion of some players," said Fu.

By The EDGE Malaysia