Times Avenue units 70pc snapped up before Nov launch

TIMES Avenue, a RM160 million office and retail project on Jalan Imbi, Kuala Lumpur, has been 70 per cent sold, one month ahead of its launch in November.

The space was bought mainly by a Hong Kong private equity group, said Datuk Lennon Tan, founder and chairman of developer Takashimaya Construction & Development Sdn Bhd.

Times Avenue is located next to Berjaya Times Square. The 15-storey building has nine levels of executive office suites, three floors of retail lots, two levels of penthouse offices and a sky lounge. Construction will start in December and is due for completion by end-2013.

Tan plans to sell the remaining space to local investors.

"I am bullish on the market for office space and expect the whole project to be sold by the end of this year," Tan said yesterday in Kuala Lumpur, after unveiling the project.

Times Avenue is the first commercial building to feature a high-tech multi-level automated valet car parking system. This is its selling point.

The RM10 million system uses technology from South Korea and is widely used in Europe.

It allows customers to initiate their vehicle retrieval simply by scanning their bar coded valet parking ticket at the built-in reader. Their vehicle is automatically stacked vertically alongside the building, saving them time to look for parking.

"We hope to set a new benchmark in office space where security and safety is concerned. We hope land owners and developers will look into the system, which is a high selling point for their projects," Tan said.

Takashimaya was set up in 2004 by Tan and Fanny Foo Youe Moi, an entrepreneur.

Tan said Takashimaya has no links to Berjaya Group, or its founder Tan Sri Vincent Tan.

By Business Times

Cagamas may issue another sukuk worth up to RM2b

NATIONAL mortgage company Cagamas Bhd will issue another landmark sukuk, with size estimated to be between RM500 million and RM2 billion.

Chief executive officer Steven Choy said the size of the Islamic debt paper will depend on the home loans that banks sell to Cagamas.



"If they sell us big loans, it will be bigger, if small loans, it will be small," Choy told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

On the significance of the latest debt paper, Choy said: "We haven't worked out yet on the assets that are coming in, so it is not the right time to talk about it."

It is understood that the sukuk will be launched by the year-end.

Sources told Business Times that the latest Cagamas sukuk will be based on Ar Rahnu concept, or pledging.

"It is termed as covered sukuk (an Islamic version of covered bond)," one of the sources said.

Covered sukuk is an Islamic version of covered bonds, which are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset-backed securities created in securitisation, but covered bond assets remain on the issuer's consolidated balance sheet.

Business Times had earlier reported that the new Cagamas sukuk will not incorporate "doubtful" principles, just like its previous benchmark Sukuk Al-Amanah Li Al-Istithmar (Sukuk ALIm), launched in mid-July.

While Sukuk ALIm was designed to meet the requirements of broader investors especially from the Middle East, Cagamas' new sukuk is expected to attract local institutional investors.

Last year, the country's biggest buyer of home loans sold RM11.3 billion worth of bonds, down by more than half from the record RM25 billion in 1999. About 40 per cent, or RM4.3 billion, were sukuk.

Cagamas issues bonds or debt securities to finance the purchase of housing loans from banks, freeing up lenders to give out more loans.

It is the second biggest issuer of debt papers after the government and carries the highest credit rating of "AAA" from local rating agencies. This means that its paper is highly sought after by investors because the probability of a default is very low.

By Business Times

KLIB unit to sell land for RM58mil

PETALING JAYA: Equine Capital Bhd’s wholly-owned subsidiary Kuala Lumpur Industries Bhd (KLIB) has proposed the disposal of four parcels of land together with Wisma KLIH for up to RM58mil cash to Wonderful Vantage Sdn Bhd.

In a filing with Bursa Malaysia, Equine said the land was with a 14-storey purpose built office building known as Wisma KLIH located at Jalan Bukit Bintang, Kuala Lumpur.

It said the disposal consideration comprises RM48mil for the disposal of the property and RM10mil for renovation and refurbishment of the property, subject to the terms of the renovation and refurbishment option.

By The Star

Commercial property sales rebound in 3Q

NEW YORK: Two of the world's largest commercial real estate services companies reported sharply improved earnings on Tuesday, Oct 26, fueled chiefly by a pickup in building sales and leasing, particularly in the United States.

After more than a year of nearly no activity, US property sales have begun to pick up as buyers and sellers agreed on prices. That helped Jones Lang LaSalle Inc and CB Richard Ellis Group Inc record strong earnings growth in the third quarter.

Boston Properties, which has been on a buying spree over the past couple of months, reported better-than-expected results.

Luxury mall owner Taubman Centers Inc reported earnings that were hurt by an unexpected drop in lease cancellation fees. But the company raised its full-year forecast after sales at its malls rose 13% per square foot.

The slow rebirth of the US commercial mortgage backed securities market (CMBS) and loosening of lending by banks have greatly improved US commercial real estate sales this year. Real Estate research firm Real Capital Analytics expects sales to top US$100 billion (RM310 billion) in 2010, nearly double the US$54.4 billion in 2009.

US companies also have begun to lease more space as they become more confident about the economy.

Sales and leasing transactions are the bread and butter of real estate services companies, providing higher margins than property management or corporate services.

"We've seen sales and leasing improve all year," JMP analyst Will Marks said. "Third-quarter results really picked up from 2009 levels, but they're still nowhere near the levels at the peak."

CB Richard Ellis, based in Los Angeles, posted third-quarter earnings, excluding charges, of US$62.4 million, or 20 US cents per diluted share up from US$21.6 million, or eight US cents a share in the year-earlier quarter.

Analysts on average expected 17 US cents per share, according Thomson Reuters I/B/E/S.

Revenue rose 24% to US$1.3 billion. That was driven in part by a 26% revenue increase from the Americas region, with property sales up 69% and leasing revenue up 36%.

Jones Lang LaSalle posted third-quarter adjusted earnings of US$38 million, or 86 US cents per share, compared with US$27 million or 61 US cents per share in the year-earlier quarter.

Analysts on average expected 95 US cents per share.

Chicago-based Jones Lang LaSalle said its revenue rose 20% to US$708 million. In the Americas, revenue rose 29%, with leasing revenue up 38%, and sales and hotels up 127%.

Taubman reported third-quarter adjusted funds from operations of US$33 million or 59 US cents per square foot compared with a loss of US$67 million, or US$1.26 per share in the year ago period.

Analysts had expected third-quarter FFO of 67 US cents per share. FFO is a real estate investment trust performance metric, which removes the profit-reducing effect of depreciation from earnings.

The company, based in Bloomfield Hills, Michigan raised it 2010 FFO forecast to a range to US$2.77 per share to US$2.82 per share from US$2.65 per share to US$2.75 per share based on improving rents and higher lease cancellation and recoveries.

Boston Properties reported FFO of US$150.8 million, or US$1.07 per share diluted compared with US$158.5 million, or US$1.13 per share.

Analysts expected FFO of US$1.03 per share.

Boston Properties said it expects to report fourth quarter FFO of US$1.09 per share to US$1.12 per share.

The companies reported after the close of the New York Stock Exchange on Tuesday. Jones Lang LaSalle shares closed down 0.7% at US$85.37. CB Richard Ellis shares closed up 0.2% at US$18.90 and were at US$19.06 after hours. Taubman shares closed down 1.1% at US$48.30, and were at US$48.76 in after-hours trade. Boston Properties shares closed down 1% at US$89.87.

By Reuters

SP Setia to launch four residential projects worth RM546mil

The Show Village of Setia Pearl Island

GEORGE TOWN: SP Setia Bhd plans to launch four new residential projects with an estimated gross sales value RM546mil on the island beginning this December and next year.

SP Setia property (North) general manager S. Rajoo told StarBiz that the projects comprised the RM175mil Setia Greens, RM60.5mil Brook Residences, RM170mil Setia V Residences, and the RM139mil Pearl Villas in the Setia Pearl Island scheme.

Setia Greens, comprising 149 three-storey terraces and 18 semi-detached houses with dual frontage in Sungai Ara, would be launched in December.

“The selling price starts from RM918,000 onwards for terraced units with built-up areas ranging from 2,400sq ft and 3,200sq ft.

“The selling price for the semi-detached units, with built-up areas of around 3,300sq ft, is around RM1.6mil onwards,” he said.

Subsequently the group would launch Brook Residences in February 2011 and the Pearl Villas in April, and Setia V Residences in the second half of next year, Rajoo said.

“The Brook Residences in Brook Road, a prime residential area near Jesselton Road, comprises 11 luxurious bungalows priced from RM5.8mil onwards, while the Pearl Villas comprise 35 bungalows priced from RM2.8mil onwards.

“The Setia V Residences project in Kelawei near Gurney Drive, comprising 67 luxurious condominiums, tentatively priced from RM2.8mil onwards,” he said.

Rajoo said Setia Greens would be the northern region’s first Green Building Index-rated project.

“What makes the project unique are the environmental features such as solar water heater, rain-water harvesting system, water efficient fittings, and cool roof system for each unit.

“We are using a special low-volatile organic compound paint for the project,” he said.

Rajoo said these new projects were targeted at the executives working in the south-west district of the island as well as investors.

For the nine months of SP Setia’s fiscal year ended July 31, 2010, the group’s projects from Penang contributed close to RM150mil or about 10% of the RM1.95bil revenue posted for the nine month period.

“We are confident that the contribution from Penang this fiscal year closing Oct 31, 2010 will hit over 10% of the targeted RM2bil revenue of the group.

“Setia Vista, Reflections condominium, and the new semi-detached launches in Setia Pearl Island contributed significantly from Penang,” he said.

Rajoo said Penang would continue to play an important revenue generating role in the group’s property development business.

“We will continue to look for land in prime locations either to develop on our own or on a joint-venture basis,” he added.

Meanwhile, Henry Butcher (Malaysia) Penang director Dr Teoh Poh Huat said high-end properties were still sustainable in Penang, as there were now overseas Malaysians investing in the island’s property market.

“These are overseas Malaysians earning pounds and US dollars, who are buying high-end properties with the view to come home to stay one day.

“This segment is playing an increasingly important role in the Penang high-end property market developed by branded developers,” he said.

By The Star

Naza's Dualis snapped up at launch

NAZA TTDI's Dualis Business Centre units in Seri Kembangan were snapped up barely two hours after its launch over the weekend.

The 32 units of two and two-and-a-half storey semi-detached shop offices are located within the prime residential and commercial area of Equine Park.

They are part of an 8.7 acre mixed development which will also include other components that will be announced and launched at a later date.

Naza TTDI's group managing director, SM Faliq SM Nasimuddin who was present at the launch said, he was encouraged by the response for the shop offices and assured purchasers that apart from living to the company's tagline of delivering the project ahead of schedule, quality will not be compromised.

He said TTDI Dualis Business Centre will be a new lifestyle hub in the area with its modern architecture concept and open space.

The development is an ideal location for offices, banks, showrooms and F&B outlets, he added.

Faliq expects the launch on Saturday to attract a lot interest from buyers with the project's well-planned layout, strategic location and alluring design.

The two-storey shop office built-up starts from 3,472 sq ft with the land area from 2,866 sq ft with prices starting from RM1.5 million.

For the two and half storey shop offices, built-up starts from 4,733 sq ft with land area from 3,587 sq ft. Price for the two and a half storey shop offices starts from RM2 million. The project is expected to be completed in October 2013.

By Business Times

Glomac acquires Suria Stonor condo units

GLOMAC Bhd is buying 18 units of apartment in Suria Stonor Condominium for RM38.41 million as an investment.

It views the property as one with a potential for a quick turnaround, Glomac said.

The purchase is at a discount of 35 per cent to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

By Business Times

Hong Leong arm, GuocoLand, invests RM9.3bil in China

It is hungry for more land bank in China and GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank

SHANGHAI: GuocoLand Ltd, which is a Singapore-listed property investment arm of Malaysian conglomerate Hong Leong Group, will hunt for other land in China after its setback in acquiring a plot in Shanghai.

GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank but it only managed to secure one of the two plots it bidded in Shanghai.

The successful bid is for a 47,647 sq m site in the Changfeng Ecological Business District in the Putuo district which was sold at the price of 3.04 billion yuan (RM1.4bil).

“There will be leftover of funds and we will use them and continue to bid for other land,” she said after a signing ceremony in Beijing last week which saw the entry of the five-star Poly International Cinema into Beijing Guoson Mall.


Violet Lee and Liu Debin at the signing ceremony in Beijing on Oct 20.

To date, GuocoLand China has invested an estimated US$3bil (RM9.3bil) in China with an ever-growing land bank of two million square metres in Beijing, Shanghai, Nanjing and Tianjin.

Beijing Guoson Mall, spanning 160,000 sq m, is located in GuocoLand China’s flagship project Guoson Centre which has a total area of 600,000 sq m. The mixed development project is smacked within Dongzhimen, which is regarded as Asia’s largest transportation hub with three subway and light rail lines, dozens bus routes and a daily traffic flow of 800,000 commuters.

The similar development has been emulated in the Guoson Centre in Changfeng, Shanghai. The 500,000 sq m is located at the crossroads of the business zones of Zhongshan Park, Gubei and Hongqiao and only 10-minute drive from the Hongqiao transportation hub.

It will also include a Guoson Mall, a Guoman Hotel and office and residential buildings.

The newly-acquired land is situated in the same area as the Guoson Centre in Changfeng and will be used for residential development.

In 1998, GuocoLand China developed its first commercial building called Corporate Square in Beijing’s Financial Street. Only in the last few years, the company entered Shanghai, Tianjin and Nanjing in a big way by building upscale condominiums.

The company is considered a late bloomer in China’s real estate industry and is now up against heavyweights like CapitaLand, Keppel Land, Cheung Kong Holdings, Kerry Properties and Sun Hung Kai from Singapore and Hong Kong.

However, GuocoLand China builds its name as the transportation hub specialist.

“We had come to China many years ago but we were very low profile unlike others who used to boast about their presence,” Lee said.

“This is the right time to come here as China is flourishing into the world’s second biggest economy and we want to participate in its rapid development in this period.”

She said there were many successful approaches that the company could emulate from its projects in Singapore and Malaysia for China but it would prefer to build homes and commercial properties suited for the local market.

“We have built many green buildings in many places. We want to showcase this in China and are proud to say that we have done quite a lot to green the Guoson Centre,” she said.

“I believe it’s hard to find a 40,000 sq m rooftop garden on the complexes in Guoson Centre.”

With the signing of tenancy agreement between GuocoLand China and Poly Film Investment Ltd, Guoson Mall in Beijing will house one of the most advanced cineplexes in China. The cineplex will meet international standards of high-end and eco-friendly cineplex and occupy 7,000 sq m with nine screens and over 1,500 seats.

Poly Film general manager Liu Debin said the Guoson Mall’s brand positioning and vision was in line with Poly Group’s aim of providing the best service.

“Through its strategic location and well-built business atmosphere, we see enormous commercial value and potential. We are sure that our cooperation will lead to a win-win result,” he said.

Lee said GuocoLand and Poly would establish a long-term partnership and look into further cooperation in other projects in China, especially the Guoson Centre Shanghai.

She said being strategic partners would bring benefits to both companies as they could market themselves even better.

“It’s a rare opportunity to develop such a huge project in this strategic location. We will do our best to fulfil our promise to bring our best development to Dongcheng district (where Guoson Centre Beijing is located) and do our part to improve the people’s lifestyle,” she said.

Guoson Mall is scheduled to open early next year. The Guoson Centre project won the Asia Pacific International Property Awards (APIPA) 2010 for the Best Mixed Use Development in April.

This is the first time a Chinese development won the prestigious award.

By The Star

Environmental preservation wins top marks

KUALA LUMPUR: Since organising the inaugural Malaysia Property Award (MPA) in 1992, the International Real Estate Federation (FIABCI) has been striving to raise the standard of the local property sector through this annual event.

Tougher qualifying rules and transparent judging processes over the years have ensured that many local property players keep with the times and also on par with the world’s top class developers.


Yeow ... ‘MPA award has set benchmark on how today’s local developers embark on their projects.’

The awards, which is today considered the “Oscars” of the local property industry, had set the benchmark on how today’s local developers embarked on their projects, said FIABCI-Malaysia president Yeow Thit Sang.

“Local developers know the kind of awareness winning this award brings. Many of them are tailoring their designs to these (FIABCI) standards. They look at our guidelines on how to improve their projects.”

Over the years, FIABCI Malaysia has placed increasing emphasis on environmental awareness and preservation. Initially, the impact of a development on the environment used to account for 10% of the judging criteria for the MPA. This year, it’s 25%.

“Environmental awareness is a global concern and it’s everyone’s responsibility to ensure everything they do has a minimal impact (on the environment),” said Yeow.

He said many local developers today were cautious with the way their projects impacted the surrounding landscape.

Yeow cited Mulpha International Bhd’s Pinggiran Bayou Village Homes, the winner in the best residential development (low-rise) category at the 2007 MPA.

He said prior to construction, the company took great pains to ensure minimal impact on the surrounding ecosystem.

Apart from preserving the environment, Yeow said many developers also designed their projects so that the surrounding elements actually became the highlight of the projects.

“Today, houses built are no longer just boxes on pieces of land. They’re a lifestyle masterpiece.”


Yu ... ‘Environmental awareness will account for more than 25% of the judging criteria at next year’s MPA.’

FIABCI Asia Pacific executive director Yu Kee Su said environmental awareness would account for more than 25% of the judging criteria at next year’s MPA.

For the first time this year, the judging process comprised a three-tier system as part of the organiser’s efforts to raise the bar of the participants, he said. In previous years, the judging process comprised only two levels.

“We evaluate the judging process every year. We get feedback and try to improve ourselves,” he said.

The first tier consists of site visits by evaluators who are senior personnel from the real estate industry. The second tier comprises a jury of senior representatives from various organisations within the property industry while the third tier comprises independent judges from various sectors.

FIABCI Malaysia will be organising the 2010 MPA on Nov 11 in Kuala Lumpur with Malayan Banking Bhd as the official sponsor.

The categories to be contested are: Property Man of The Year, Master Plan, Hotel Development, Office Development, Public Sector, Residential Development (low rise and high rise), Resort Development, Retail Development and Special Award for National Contribution.

Winners of the MPA in their relevant categories will represent Malaysia the following year at the International Prix d’Excellence, an annual competition that honours the world’s best property projects.

By The Star

EPF to call for open bid in 2011

The Employees Provident Fund (EPF) is expected to call for an open tender to develop the 1,214ha of federal land in Sungai Buloh, Selangor, in the second half of next year.

It is learnt that the EPF has initiated a master plan for the land development, which is expected to take six months to a year to complete.

The land, dubbed the "new hub" for the Klang Valley and owned by the Rubber Board of Malaysia, will be split into several parcels to attract local and foreign private property companies.

"The land will not be offered to just one developer. We will be fair and offer land parcels to several companies through an open tender system," a government source said.

Speculation was rife that the EPF would likely appoint Malaysian Resources Corp Bhd (MRCB) as the project's master planner and lead developer since it owns 41.5 per cent of the company.

However, the pension fund said that Kwasa Land Sdn Bhd - its joint venture with the government - would tender individual parcels of land through a transparent process.

The EPF also said that it had requested several developers and property consultants to advise it on the development and feasibility of the land.

The project is expected to have affordable and high-end housing - both landed and high-rise - office towers, shop-offices, retail, hospital, shopping mall, hypermarket, schools and parks.

Prime Minister Datuk Seri Najib Razak has said that the whole project would generate gross development value of RM10 billion.

Some potential participating developers said they would leave it to the EPF to decide how much land to allocate to them and the components to build.

Among them are Glomac Bhd, Gadang Holdings Bhd, IJM Land Bhd, Mah Sing Group Bhd, UEM Land Bhd, Bolton Bhd and MRCB.

A source said the companies could buy small parcels of land to carry out their own projects or develop the land in a joint venture with the EPF on a profit-sharing basis.

"We believe that EPF is likely to parcel out to various developers so that each can introduce new concepts. This will expedite the development as several parcels will be developed concurrently," Mah Sing group chief executive officer Tan Sri Leong Hoy Kum told Business Times.

The project, approved on May 12, will be funded by the EPF over 15 years.

It is understood that the project site will be connected to the Kelana Jaya light rail transit.

By Business Times

Glomac unit buys 18 Suria Stonor apartments for RM38.41m

KUALA LUMPUR: GLOMAC BHD is acquiring 18 units of apartments at the Suria Stonor Condominium project, which was developed by its unit Glomac Regal Sdn Bhd in July 2008, for RM38.41 million.

In a filing to Bursa Malaysia on Monday, Oct 25, Glomac said its wholly-owned subsidiary Berapit Pertiwi Sdn Bhd had entered into sale and purchase agreements with Dekad Darat Sdn Bhd and Progressive Berg Sdn Bhd for the proposed acquisition.

It said the acquisition of the apartment units represented an excellent investment opportunity with strong potential for quick turnaround.

"As the transaction is a bulk purchase, the acquisition is priced at a approximate discount of 35% to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

"As the developer of the project, Glomac is familiar with the product and believes strongly in the saleability of the condominiums in the secondary market at prevailing market prices," it said.

By The EDGE Malaysia

SP Setia upgraded to 'buy' at Kenanga

SP Setia Bhd, Malaysia’s largest property developer, had its stock rating upgraded at Kenanga Investment Bank Bhd to reflect the company’s earnings growth prospects.

The company was raised to “buy” from “trading buy” and its fair value increased to RM5.50 from RM4.78, Yeow Yeonzon, an analyst, said in a report today.

By Bloomberg

Puncakdana plans RM1.5b Ara Damansara project

Property developer Puncakdana Group plans to build 11 corporate buildings worth some RM1.5 billion in Ara Damansara, Selangor, as it is bullish on demand for office space.



The 11-storey buildings, with about one million sq ft of net lettable area, will enter the market over the next five years, said founder and managing director, Mah Siew Sian.

"We expect that many companies will be moving out of the city centre because of traffic congestion. Some are targeting Ara Damansara, which is a new area and a well-planned township.

"We believe there will be a market for our properties. People want a comprehensive environment which is why there is a success story for Mid Valley City," Mah said.

The group is finalising designs and expects to launch the first two blocks by the third quarter of next year. The buildings will be sold en bloc.

It is already in talks to sell one block to information technology group Formis Bhd for around RM150 million. Several multinational companies in the oil and gas and consumer business are also keen.

The towers will be complemented by the group's new RM280 million retail mall, dubbed CITTA, which will open next January.

Half of CITTA, an open air design three-level mall with 130 retail outlets, have been taken up. Some of the big retailers include Harvey Norman, MBO cinemas and Julia Gabriel and Chiltern House.

By Business Times

State firms should stick with affordable housing

Under Budget 2011, the Government’s proposal to help first time home buyers and those earning less than RM3,000 will benefit those living outside the Klang Valley.

The 10% down-payment guarantee by the Government is limited to houses priced below RM220,000 while the 50% stamp duty exemption on instruments of transfer are for houses not more than RM350,000.

While the move is much lauded and applauded, there are not many landed units priced at RM350,000 and below in the Klang Valley today. Which means those who want to go for this scheme will have to buy a condominium or an apartment.

And if one wants to take advantage of the 10% downpayment, one has to buy a property that is RM220,000 and below. There are, of course, properties further away in the Klang or Shah Alam in this price range. One will be hard pressed to find something within this bracket in Petaling Jaya unless one opts for some densely populated condominium enclave.

With the number of young people migrating to the city in search for work, most of them will have to rent before they eventually buy their own homes.

About 50 years or so ago, the Selangor State Development Corp (PKNS) were building single-storey affordable housing that cost less than RM20,000 in Petaling Jaya. Much of Petaling Jaya then – and today – are leasehold land because they are state land.

Twenty-thousand ringgit may seem a paltry sum today but for folks back then, many had to pawn their jewellery and with the help of relatives, pool money together to have a roof over their heads. Young people from the lower ranks of the civil service benefited from PKNS housing. There was another developer whose mission was to provide civil service in the higher categories with more up-market properties in Damansara Heights, Kuala Lumpur.

Today, things are very different. While PKNS continues to build houses in the urban centres, they seem to be concentrating on building condominiums. A clear example is Kota Damansara, Petaling Jaya where PKNS teamed up with developers in joint-venture developments to build high-rise properties. They do build single-storey houses but these are outside city centres in locations such as Bernam Jaya and Antara Gapi. In Klang, PKNS is building some low-cost flats.

In the aftermath of the financial crisis in 1997/98, affordable housing were those capped at RM250,000 and many private developers went into this segment post crisis. There was a huge demand for them. Several years later, to get better profits, developers went on to build “lifestyles” homes where double-storey houses cost closer to RM600,000.

Because it is becoming increasingly impossible to find houses around the RM350,000 price range in the Klang Valley, perhaps PKNS can think about entering into joint ventures with private developers to build houses which may not be all that affordable.

The government agency is offering a broad spectrum, from low-cost flats in Klang to semi-detached and bungalows in Shah Alam. There is also something to be said about low-cost housing across the board. Simply because they are low cost, developers cut them rather small, at about 600 sq ft of four- or five-storey walk-ups with no management services. These projects have the potential – and some of them do – to become urban slums.

After several years, the place becomes really deplorable because there is no sinking fund and unkempt, because there is no management fees. Eventually, social problems arise. Many of these units are also rented out to foreigners and become crime-infested until the locals living there themselves decide to leave.

With the changes in the economy, global and local, which many have never seen in our life time, housing will only become more crucial in the urban centres. State agencies should consider if they need to narrow down their offering to provide for the less-well-to-do with proper and decent housing that are manageable financially and physically so that they at least maintain their value.

State economic developments corporations like the PKNS and their counterparts can form part of the government machinery to help first time house buyers. In Singapore, there is the National Housing Board to meet this aim. Which is why more than 90% of Singaporeans have their own homes. They do not need to rent. The same goes for Hong Kong. Both Singapore and Hong Kong are relatively more manageable because they are small. But we in Malaysia have various state economic development corporations and providing affordable housing is part of the game plan. So, if it is affordable housing, why go into building bungalows and semi-detached units? Stick with affordable housing.

Assistant news editor Lee Cheng thinks there is a need for state agencies to look into providing affordable housing in urban centres.

By The Star

Warisan Merdeka – a beacon to PNB’s future

The 100-storey 5-star green building is set to attract more interest to the whole development.

BACK in 2000 when Permodalan Nasional Bhd (PNB) was presented the opportunity to buy the 14.5ha where Stadium Merdeka and Stadium Negara are located, it had decided to retain the heritage value of this priceless asset while looking for opportunities to develop the surrounding area.

A decade later, PNB is doing precisely that.

PNB paid RM310mil or RM220 per sq ft to buy the land from Pengurusan Danaharta Nasional Bhd. The market value of the land has since appreciated to RM800 per sq ft today.


From left: PNB deputy president for corporate and international Jamiah Abdul Hamid, Tan Sri Hamad Kama Piah Che Othman, PNB Merdeka Ventures CEO Tengku Abdul Aziz Tengku Mahmud and PNB senior-vice president, head of property division Ibrahim Awang at the briefing.

At a special briefing for media editors on Wednesday, PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman disclosed that the heritage aspect has been fulfilled through conservation works to restore the heritage characteristics of Stadium Merdeka and Stadium Negara. The two stadiums are now being managed by a heritage trust.

Both the stadiums are occupying 6.8ha, which have been identified as a national heritage site.

Hamad says the overall Warisan Merdeka development on the remaining 7.7ha will complement and blend with the heritage theme. He is optimistic that together with the restored stadiums, the site will be another major landmark in Kuala Lumpur.

“We are looking at ways on how to integrate the building aspects of the stadiums with the planning of the overall development of Warisan Merdeka. The heritage part will not be sacrificed and will actually serve as the enhancement factor to the commercial aspects of the building. The heritage preservation of the stadiums will be undertaken by the heritage trust,” he explains.

Construction work on the 100-storey Warisan Merdeka tower will kick off next year.

Touted to be the country’s tallest when it is completed in 2015, the building will cost RM2.5bil to RM3bil. It will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space.

Hamad says the five-star green building will be the “beacon” to create more excitement and attract more interest to the whole development.

This will be followed by two subsequent phases comprising a shopping complex and condominiums. The whole development, to be undertaken over a 10 year period, will cost RM5bil.

On the rationale for mooting the project, Hamad says: “Since the plan to develop the land was approved by the PNB board in 2004, we were waiting for the right time to proceed with the project.



“The concept of 100-storey building, its retail portion and the condominium was mooted in early 2004 taking into account the need for enhancement of value and effective utilisation of the 19-acre land adjacent to Stadium Merdeka and Stadium Negara. In 2005, the master plan was approved by the municipal authorities followed by final titles being issued in 2008. The principle concept of PNB Iconic Building was then approved in 2009.”

He says that having held the land for so long, “we feel it is now the right time to go ahead. The Government is also promoting this type of development.”

Hamad stresses that most importantly, by initiating the Warisan Merdeka project, PNB is taking the lead to preserve the historical value of Stadium Merdeka as the site for the country’s declaration of independence back in 1957.

Emphasising that PNB is not looking to compete with anybody when it decided to put up a 100-storey tower as part of the Warisan Merdeka development, he says it will make more economic sense to build the high-rise tower than lower rise buildings.

He says as a state investment agency, PNB’s main concern is to maximise return for its stakeholders. “Each year, PNB declares income distribution of 6% to 7% to unitholders. The project with expected yields of between 8% and 10% will be able to meet our responsibility as an investment agency.”

Meanwhile, the new tower will be able to meet PNB’s need for new office space in line with its strategic positioning for the future.

Hamad says PNB will be moving out from its present headquarters, Menara PNB, which will be 30 years old when the tower project is completed, to the Warisan Merdeka tower upon its completion.

PNB has set up wholly-owned unit, PNB Merdeka Ventures Sdn Bhd to undertake the project. Helming it since early this year is Tengku Abdul Aziz Tengku Mahmud who was formerly from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd.

So, will Warisan Merdeka be an iconic project and will there be foreign expertise involved such as the like of world renowned architect Cesar Pelli who designed the Petronas Twin Towers?

Hamad says the project design plans are still in the drawing board.

“We are in talks with several parties comprising experts from the relevant fields. We are exploring the possibilities of creating a strong architectural and engineering team for the project,” he adds.

With its latest venture, PNB is certainly thrusting ahead with its plans to build up its presence in the local property scene.

By The Star

Towering message to deliver

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the 100-storey project were adequately addressed.

The apparently growing opposition to plans by Permodalan Nasional Bhd (PNB) to build a 100-storey skyscraper as part of the Warisan Merdeka integrated project is a classic example of what can go wrong when information is either badly presented or poorly received.

Prime Minister and Finance Minister Datuk Seri Najib Razak, when announcing the project in his 2011 Budget speech on October 15, said the landmark, which will be developed by PNB, is to be completed by 2020.

The project would comprise a 100-storey tower, the tallest in Malaysia, and would retain Stadium Merdeka and Stadium Negara as national heritage. The total project cost is RM5 billion, with the tower to be completed by 2015.

Within minutes after the speech, the Opposition picked on the mega project, calling it a waste of funds. Put the money to better use by building more schools, improving rural infrastructure, and helping the needy, they said. It would affect returns from PNB unit trusts, others echoed.

Suddenly, in their eyes, Warisan Merdeka became a government-funded project. It wasn't. It was PNB's, and PNB is not in the business of building schools or upgrading roads and electricity supply.

Similarly, a facebook group - 1M Malaysians Reject 100-storey Mega Tower - was set up (it is not immediately clear by whom) and has more than 92,000 fans as at 5pm yesterday. The project is also a hot topic on blogs and Internet forums.

PNB had a press conference on October 20, five days after the budget, where we came to know that the project would also have a shopping complex and condominiums, and that the tower itself would cost RM2.5 billion to RM3 billion. The RM5 billion figure included other components of the development, and also factored in improving infrastructure in the area.

Its president and group chief executive Tan Sri Hamad Kama Piah Che Othman is confident that Warisan Merdeka will create spillover benefits. For starters, it will generate about 5,000 jobs in the development stage, and boost property prices in the area.

He said PNB has the capability to finance the project through internally-generated funds, and as an investment house, would seek to optimise returns from the development. It expected to yield returns of 8-10 per cent.

This has been PNB's policy with all its investments over the years, and its track record speaks for itself.

We also learnt that PNB had been planning to develop the land since 2004, conducted annual reviews, and decided that now was the right time to do it. Clearly, this wasn't a flight of fancy hatched up one night just to boast as some people perceive it to be.

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the project were immediately and adequately addressed.

In the days to come, there could well be legitimate concerns about Warisan Merdeka and PNB's role in it, particularly on the part of its more than nine million unitholders, and Malaysians in general. The government, too, needs to clear up remaining confusion and scepticism about the project's benefits.

Let's hope the message gets across better next time.

By Business Times

MBSB sets RM1bil target for new mortgage plan

PETALING JAYA: Malaysia Building Society Bhd (MBSB) is optimistic of hitting, within the next 12 months, its RM1bil loans target for its newly launched home mortgage programme called MBSB Ultimate, given its attractive features and financing, says chief executive officer Datuk Ahmad Zaini Othman.

“We are confident of achieving the RM1bil target as this tailor-made programme offers among others, loan tenure up to 70 years of age. We also have sales personnel from our 33 branches to promote this programme,” he told reporters yesterday after the launch of the programme.

MBSB Ultimate is targeted at properties priced from RM500,000.

Ahmad Zaini said MBSB’s outstanding home mortgage portfolio currently stood at about RM5bil.

He also said MBSB planned next year to come out with three or four new product packages for home mortgage and retail financing.

Chairman Tan Sri Abdul Halim Ali said MBSB Ultimate was the expression of MBSB’s inspiration in developing a home mortgage programme that would be the most definitive in the market.

“With the current drive and momentum set by the MBSB team coupled with new strategies, I am confident that MBSB will be able to re-establish its position as a significant player in the home financing market,” he said.

Meanwhile, commenting on the group’s third quarter results that were announced on Thursday, Ahmad Zaini said overall, its nine-month revenue performance had surpassed its full-year results in 2009 by more than 50%.

“We expect in the next three months our performance will continue to be strong, given the good numbers that we are having now,” he said.

MBSB’s third-quarter net profit fell 23% to RM40.5mil due to loan loss allowances made for impaired loans. Its revenue almost doubled to RM317.66mil for the three months ended Sept 30.

For the nine months ended Sept 30, MBSB reported net profit of RM133.2mil on revenue of RM890.8mil. It recorded net profit of RM57.2mil and revenue of RM538mil for 2009.

By The Star

Housing developer gets creative

NUSAJAYA: Property developers in Johor are becoming more creative and innovative in promoting their projects to potential buyers.

Apart from putting up nicely decorated show homes, developers are also bringing celebrities in for their project launches in hopes to attract crowds.

Weekends and public holidays are the favourite times for developers to launch new projects with a carnival-like atmosphere.

However, Country View Bhd has taken one step further by setting up an art gallery at its sales office at the Nusa Sentral housing project here.

“It showcases 11 modern contemporary art pieces collected by the company over the years,” said Country View marketing manager Andrew Tan.

The project on a 121.40ha site is located along Jalan Gelang Patah-Ulu Choh and will keep the company busy for the next eight years.

He said the art gallery would give an opportunity for customers to appreciate the art work and give them ideas to decorate their houses too.

Tan said although it was still a long way for ordinary Malaysians to show interest and deep appreciation for contemporary art pieces, the company believed someone has to take the initiative to start it.

He said interested customers can also purchase the paintings.

“We also welcome local painters to come to our gallery and promote their works to potential house buyers,” said Tan.

Couple Haw Yew Hock and Chow Yit Sin from Lima Kedai who planned to buy a house said this was the first time that a property developer had set up an art gallery at its sales gallery.

“It is something different and probably we can also pick up the ideas by putting up a painting or two in our new house too,” said Haw.

By The Star

Take up long-term housing loans, buyers told

PETALING JAYA: Home buyers are encouraged to take up two-generation loans and financial institutions should support the move.

“The most important thing is for the individual to own a house for his family to live in.

“If loan repayment is extended to the second generation, that means the family will remain intact,” Housing and Local Government Minister Datuk Chor Chee Heung told a press conference here yesterday.

He had earlier launched the MBSB Ultimate mortgage programme by Malaysia Building Society Bhd, which offers loans for customers up to the age of 70 years.

Chor said Budget 2011 encouraged the two-generation loan term, refuting suggestions that stretching the loans that far would be a burden to the younger family members.

“I don’t think it is a burden for the next generation because the repayment is spread over a long time,” he said, adding that the younger generation is financially strong and can even afford to buy another house.

MBSB chief executive officer Datuk Ahmad Zaini Ithman said the idea of offering longer-term housing loans was to preserve the value of assets or investments.

“Ownership in the past meant buying for investment. But now, a house is a place for the family to stay.

“I think more financial institutions should pursue this ap proach,” he said.

By The Star

Tough job for PNB

PERMODALAN Nasional Bhd (PNB) has studied market trends before deciding to embark on the Warisan Merdeka development, its president and group chief executive Tan Sri Hamad Kama Piah Che Othman says. The 100-storey tower will be a five-star green building which is still uncommon in Kuala Lumpur.

“We believe it will be able to meet the market’s growing need for such office space,” he explained when asked about the rationale for the tower project.

At a time when the world economy is still uncertain and amid rising prices, many Malaysians have questioned the necessity for the RM2.5bil to RM3bil tower project after Prime Minister Datuk Seri Najib Tun Razak announced the project in his budget speech last Friday.

Responding to questions on the project recently, Najib stressed the Government did not instruct PNB to construct Warisan Merdeka and that it was the investment agency’s board of directors that had wanted to embark on the project.

He said the area would be a business centre for both the bumiputra and non-bumiputra, and could be one of the country’s attractions that will generate profit.

Developers and property consultants have urged PNB to undertake extensive and in-depth feasibility and market studies to weigh the cost-benefit and potential impact of the tower on the property market.

The public also wants an environmental impact assessment study to be done on the project to look at the impact to the social system, the traffic situation and suitability of the site.

Most of the concerns are on whether the high-impact commercial development will cause an over supply of office space in the capital city, and the impact of the skyscraper to the worsening of the heavy traffic jams in the area.

There are also a number of schools in the vicinity and the expected heavier flow of the traffic have worried students, parents and the school authorities.

Hamad says PNB is looking to have the mass rapid transit (MRT) plying the Warisan Merdeka route.

“We are aware of the public’s concerns that the traffic jam in the area will worsen with the tower project, and will be working with the relevant authorities to look at ways to improve the infrastucture and traffic flow in the area,” he adds.

Hamad also allays fears that funds from unit trust investors or the Government will be used to finance the project.

He says PNB has enough funds to finance the whole development if need be but he does not rule out borrowings if interest rates are reasonable.

On the project’s positioning, Hamad stresses that the heritage elements of Merdeka Stadium will be one of the central themes and highlights of the project.

If that is the case, industry observers have asked whether PNB will look at introducing a full-fledged culture village around the historical site that can also double up as function destinations to ensure the the project will remain functional.

To avoid the project becoming a “white elephant” like many observers fear will happen, the culture village should be kept alive with interesting cultural performances and events on a daily basis.

Perhaps, the National Museum should be moved there as its historical ambience is the most appropriate to showcase important things and events of the country’s past.

On the rationale for the 100-storey tower instead of vying to be the world’s tallest, Hamad explains: ”We are not competing with anybody in the world in terms of the height of the building. Currently, there are already three buildings being planned at 1000m heights, surpassing Burj Khalifa’s 828m. There will be no end to this sort of competition. So making it the world’s tallest is a non-issue and we would not go into this.”

Hamad stresses that the building is not being designed to outshine any particular organisation, including the Petronas Twin Towers which have been and will continue to be Malaysia’s icon.

“We want the building to look architecturally good and acceptable whilst incorporating the green features. These are market expectations in the near future. With this, we can get a reasonable return on our investment on this building.”

Besides being the country’s most famous landmark, the 88-storey Petronas Twin Towers are the world’s tallest twin buildings today. Completed in 1998 at a cost of US$1.2bil, they were the tallest buildings in the world until they were “dethroned” by Taipei 101 which was completed in 2004.

The twin towers also have world renowned Argentine-American architect César Pelli, to thank for its unique and timeless design. The towers were constructed largely of reinforced concrete, with a steel and glass facade which have given them the magical and glittering effect.

On the cost difference between the two projects, Hamad says: “We are comparing relative costs, in terms of the timing of these two developments. Material prices have gone up quite a fair bit. The real yardstick is the return on investment, using current market prices and costs for the building materials and other related costs.”

By The Star

Karambunai Corp: No notification from govt to develop eco-nature resort, no MoU signed with SPV

KUALA LUMPUR: Karambunai Corporation Bhd (KCB) has clarified that it has neither received any notification from the government nor has it signed any agreement with or have shareholding in special purpose vehicle (SPV) originated by its controlling shareholder, together with a Beijing-based contractor, to develop an integrated eco-nature resort in Karambunai.

Karambunai Corp's controlling shareholder is low-profile tycoon Tan Sri Dr Chen Lip Keong.

Karambunai Corp is one of the largest resort operators in Kota Kinabalu with its Nexus Karambunai Hotel resort in Sabah. The Main Board-listed company has 600ha of land in the Karambunai peninsula. About 130ha have been used to build the five-star Nexus Resort Karambunai, Nexus Golf Resort Karambunai and 200-odd units of luxury beachfront villas.

The company came under the spotlight after it was mentioned in the 2011 Budget Speech that there were plans to develop an integrated eco-nature resort in Karambunai.

The government announced in its Budget 2011 on Oct 15 that it would allocate RM100 million to part finance developer and resort operator Karambunai Corp’s integrated eco-tourism resort in Kota Kinabalu.

The RM3 billion project is slated to start next year and is expected to take about five years to complete.

In a filing to Bursa Malaysia on Friday, Oct 22, KCB said the promoter was a SPV specifically incorporated to assess the feasibility of investing in the Karambunai Peninsula.

“Together with its local and overseas consultants, including its financial consultant China Construction Bank International, the SPV aims at bringing in foreign direct investments to Malaysia and has presented proposals to the Malaysian government to assess the relevance and importance of developing Karambunai, Sabah to spearhead the growth of tourism in the Eastern corridor of Malaysia.

“Up to date, Karambunai Corp has no shareholding in the SPV, nor has it received any official notification from the government or signed any MoU (Memorandum of Understanding) or agreement with the SPV to develop Karambunai yet,” it said.

However, both the management of Karambunai Corp and SPV have concrete, specific, clear time-line plans and commitments to the Malaysian government to attain the desired results under Economic Transformation Programmes as envisaged by the Government, it said.

The company said its board of directors was of the opinion that there were not yet corporate developments which merit disclosure.

By The EDGE Malaysia (by Surin Murugiah) (Posted on 22Oct2010)

Mall operators see strong sales

Members of the Malaysian Association for Shopping and Highrise Complex Management are confident that the shopping industry will register double-digit growth by next year.

Shopping mall operators and retailers expect their businesses to increase up to 15 and 6 per cent respectively next year, buoyed by tax-free incentive on 300 imported goods announced in the 2011 Budget.

The Malaysian Association for Shopping and Highrise Complex Management (PPK) president H.C. Chan said its members are confident that the shopping industry will register double-digit growth by next year.

"Members previously felt the industry would register single-digit growth. With the tax abolishment, they expect double-digit expansion. The industry is looking at between 10 and 15 per cent growth for next year.

"They hope that higher FDIs (foreign direct investments) will provide a multiplier effect that will push for higher industry growth," Chan said.

He was speaking at a joint press conference with Malaysian Retailer-Chains Association (MRCA) and Malaysian Retailers Association (MRA) in Petaling Jaya, Selangor, yesterday.

Chan described the tax-waiver proposal as "bold" and "strategic" to promote Malaysia as a key shopping destination, of which shopping mall rents are one quarter of Singapore's and one eighth of Hong Kong's.

"The announcement is a breakthrough for the tourism and shopping industries. What it means is the operational costs would be much lower," he said.

PPK adviser Joyce Yap expects the retail industry to post 10 to 12 per cent growth in 2011, although retailers group MRCA only anticipates 6 per cent growth.

"Prior to this, the retail forecast was between 5 and 8 per cent. Now, more than 90 per cent of the retailers at the Pavilion, for instance, are raising their sales target to between 10 and 12 per cent.

"We are confident they can achieve that," said Yap, who is also Kuala Lumpur Pavilion Sdn Bhd chief executive officer for retail.

She expects more international brands to open outlets in Pavilion next year.

"Two international brands that we have courted for about a year are knocking on our doors. Initially, we are looking at bringing one brand in 2011 but now there are five already making contacts.

"The minimum investment they are bringing in to do the fit-out (at the Pavilion) is between RM3 million and RM5 million. It is a good size," she said.

The MRCA is bullish too, but remains cautious on the global economic scenario.

"As far as MRCA is concerned, our forecast for 2010 is still within the range of 5 to 8 per cent," its secretary general Valerie Choo said.

"For 2011, the target is slightly lower, between 5 and 6 per cent, because of the global scenario," she added.

"The proposal is a boost to consumers spending. I can say that positive consumer sentiment is back. Once consumers start spending again, the multiplier effect on the economy is very great," she added.

MRA vice-president Datuk Ameer Ali Mydin said the proposal was crucial to help businesses remain competitive and reduce costs.

It will not only benefit tourists but also the locals who can now buy branded goods at lower prices, Ameer said.

By Business Times

Sunway inks MoU to explore mixed development project in China

KUALA LUMPUR: SUNWAY HOLDINGS BHD has entered into a memorandum of understanding (MoU) with Shanghai Zhushengyuan Real Estate Co Ltd (SZRE) to explore the feasibility of a proposed mixed development project comprising commercial and residential units in “Wuguang New City” in Wuguangxincheng, Changsha, China.

The MoU was also signed to explore the feasibility of other projects in China.

In a filing to Bursa Malaysia on Friday, Oct 22, Sunway said that under the MoU, both parties would evaluate the feasibility of the proposed development by utilising the expertise and experience of each party.

They will also jointly bid, invest, construct and develop the land plots for the proposed development in Changsha and other projects in China, it said.

It said the MoU would be valid for a period of 18 months, unless extended by Sunway and SZRE.

On the rationale for the MoU, Sunway said the overseas market was a major source of its revenue.

Sunway said it has established a strong business presence in China in view of the country's huge population and high economic growth.

“The MoU is in line with Sunway’s strategy of expanding further into adjoining businesses and accessing the China market.

“The MoU will give Sunway the opportunity to explore the feasibility of developing a large landbank and to negotiate terms and conditions that are mutually beneficial to Sunway and SZRE,” it said.

By The EDGE Malaysia

Sunway in China deal

SUNWAY Holdings Bhd signed a me- morandum of understanding with Shanghai Zhushengyuan Real Estate Co Ltd (SZRE) to bid and work on projects together in China, starting with a mixed-development project in Changsha.

They will evaluate the feasibility of the proposed development and will jointly bid, invest, construct and develop the land.

SZRE is a property developer with a registered capital of RMB131 million.

By Business Times

Sarner to invest RM62m in Malacca project

KUALA LUMPUR: Sarner IXL Sdn Bhd, which will invest a total of RM62.5mil in a major tourist attraction project in Malacca to be known as “Malacca Alive, History In a New Way”, is targeting to achieve 800,000 to 1 million visitors in the first 12 months of its operations.

Sarner president Mohd Nizar Mohd Najib said the first phase of Malacca Alive would be completed by April next year and the second and final phase slated for completion in 2012.

The Malacca Alive tourism project is located in Bandar Hilir which was declared a Unesco World Heritage Site.

Mohd Nizar said the crown jewel and focus of attraction of Malacca Alive would be Bahtera Merdeka, which offers visitors the experience of 5D, the first of its kind in Asia.

“Visitors will experience the birth of a nation, from the start of Malacca through the years of prosperity until the beginning of Malaysia, and the venue can also be used for other purposes including concerts,” he said at a press briefing yesterday.

Malacca Alive would also have a couple of museums such as the 4-D theatre Rakyat museum showcasing Malaysia’s natural history and a time travel museum which gives visitors the experience of going back in history. Moreover, there will be 50 retail outlets and outdoor warisan complex bistro as well.

Malacca Alive and the museums are build under the auspices of Perbadanan Muzium Melaka which is tasked to manage daily visitors at the tourist sites.

Mohd Nizar said phase one of Malacca Alive cost slightly over RM21mil, while phase two would cost RM41.4mil. The project would be financed via bank borrowings.

There will also be a grand tour of the place through various modes of transport.

By The Star

Hunza Properties Q1 net profit surges 273% to RM34.69m

KUALA LUMPUR: HUNZA PROPERTIES BHD net profit for the first quarter (1Q) ended Sept 30, 2010 surged 273% to RM34.69 million from RM12.69 million a year ago, on the back of a 13% increase in revenue to RM64.53 million.

Earnings per share was 18.39 sen while net assets per share was RM2.36.

Hunza attributed the higher revenue and profit mainly to improvement to FRS 140 Investment Properties, whereby it measures investment property under construction at fair value on a yearly basis.

It also said the physical construction for the two residential towers of Gurney Paragon had been progressing well and cumulative percentage of sales was now higher at this juncture, contributing to higher attributable revenue.

On its prospects, the company said it was confident of a strong performance for the 2011 financial year.

By The EDGE Malaysia (Posted on 22Oct2010)

Hai-O unit enters share sale, shareholder agreement to venture into property and development

KUALA LUMPUR: HAI-O ENTERPRISE BHD unit, Hai-O Properties Sdn Bhd (HOP), has entered into a share sale and shareholders agreement with Sierra Equatorial Development Sdn Bhd (SED) to venture in the property investment and development business.

In a filing to Bursa Malaysia on Friday, Oct 22, Hai-O said the agreement was for HOP and SED to establish a long-term relationship via their participation in Hai-O Development Sdn Bhd (HOD), a wholly owned subsidiary of HOP, for mutual benefit and gain in undertaking the business of property investment and development in Malaysia.

Under the agreement, SED will acquire from HOP 48,000 ordinary shares of RM1 each, representing 40% of the current total issued and paid-up share capital of HOD for RM1,000.

SED will also assist HOD in applying and procuring all necessary licences, approvals, permits and consents required undertaking the business.

It will also assist in the completion and market any development project undertaken by HOD, as well as provide the necessary expertise to HOD to train and develop a team of personnel to carry on and manage the business.

By The EDGE Malaysia (by Surin Murugiah)(Posted on 22Oct2010)

Kenmark sells land for RM15mil

PETALING JAYA: Kenmark Industrial Co (M) Bhd has sold a vacant piece of industrial land in Klang via an open tender exercise for RM15mil, the company told Bursa Malaysia yesterday.

Of the total amount, RM14.25mil will be used to settle the redemption sum on the property due to EON Bank Bhd. The property was charged for a banking facilities granted earlier.

“The disposal is to partially settle the total amount owing to EON Bank under the charge,’’ it said.

By The Star

SP Setia hub sets green benchmark

SP Setia Bhd's Setia City integrated commercial hub in Shah Alam, Selangor, will have 40 office towers with green certification over the next 10 to 15 years, its chief said.



Setia City is by far the only commercial hub that will have more than 40 buildings. It will include residential blocks, four-star hotel, retail mall, convention centre, hospital and university.

Setia City, estimated to be worth RM5 billion, will set a new benchmark where green development is concerned, SP Setia president and chief executive officer Tan Sri Liew Kee Sin said.

According to Liew, Setia City will be the first integrated project in the country to have all its buildings certified under the Green Building Index.

"While green buildings may not be a new phenomenon in the country, they are usually standalone structures," he said at the launch of Setia City by Housing and Local Government Minister Datuk Chor Chee Heung yesterday.
Setia City, sprawled over 96ha in Setia Alam, is expected to attract local and multinational companies, Liew said.

SP Setia is also selling land at Setia City and companies which buy the land can build their own towers to their specifications.

To date, Top Glove Corp Bhd and Khind Holdings Bhd have bought land to set up Grade A office towers as their new corporate headquarters.

Top Glove will build an 18-storey tower, while Khind is mulling over its plans.

SP Setia will also set up its corporate headquarters in a nine-storey building.

Ongoing works at Setia City include the 1.23 million sq ft Setia City Mall by Land Lease Australia.

On the hotel, university and hospital, Liew said the company will talk to local operators to run the facilities.

Meanwhile, Chor said his ministry and Bank Negara Malaysia were monitoring property price movements to prevent a housing bubble.

"We are still far from a property bubble. But we are monitoring and will take action against speculators," he said.

By Business Times

SP Setia plans 40 corporate office buildings worth RM5bil in Setia City

From left: Tan Sri Liew Kee Sin, Housing and Local Government Minister Datuk Wira Chor Chee Heung, Cheng Ping Keat, Lee Kim Meow and SP Setia deputy president and COO Datuk Voon Tin Yow with a model of Setia City

SHAH ALAM: SP Setia Bhd plans to set up about 40 corporate office buildings in its 96ha integrated green commercial hub, Setia City that is worth RM5bil in gross development value when completed in 10 to 15 years.

The company has secured Top Glove Corp Bhd and Khind Holdings Bhd to set up their corporate headquarters in the hub, which will comprise office towers, hotels, service apartments and a retail mall.

“We are now in talks with a few local companies to set up their corporate office towers here and are not discounting the possibilities to talk to multinational companies in the future,” SP Setia president and chief executive officer Tan Sri Liew Kee Sin told a press conference after the official launch of Setia City by Housing and Local Government Ministry Minister Datuk Wira Chor Chee Heung yesterday.

He said SP Setia was constructing its own corporate building at Setia City, a nine-storey block with a four-storey annexed building connected to the mall via a bridge.

The construction of its headquarters was expected to start by the first quarter of next year and to be completed by end of 2012, he added.

Meanwhile, Top Glove managing director Lee Kim Meow said the company decided to initially go for a smaller building of between six and eight floors. With the additional land area, it has the option of expanding the size of its headquarters when the need arise.

Khind Holdings chief executive officer Cheng Ping Keat said: “We are still in the planning stage and will understand our needs going forward in order to make a final decision.”

On Setia City’s future development, Liew said the company planned to launch two blocks of serviced apartment and a SoHo next year, adding that it planned to build a three or four stars hotel and was in talk with a local company for a possible joint venture.

“We plan to build a medical centre and a private university. We will make sure we embrace the group’s live, learn, work and play philosophy for our township development,” he said.

By The Star

E&O looks to the arts

EASTERN & Oriental Bhd (E&O) is set to raise Penang's profile as a cultural and tourism attraction next year with the opening of the northern region's first performing arts centre.

The RM7.5 million seafronting Penang Performing Arts Centre is part of E&O's waterfront development, Seri Tanjung Pinang, on the island.

The centre will be managed by Kuala Lumpur-based The Actors Studio (TAS), which is helmed by renowned performing arts couple Joe Hasham and Datuk Faridah Merican.

Located at the soon-to-open Straits Quay retail marina, the 22,000 sq ft performing arts centre will feature two theatres: a proscenium theatre that can seat 304 and an experimental theatre which can accommodate 150 people.
E&O managing director Datuk Terry Tham said yesterday that RM7 million will be funded by the company for the proposed project, while the balance of RM500,000 will be borne by TAS.

"At E&O, we believe in creating distinctive lifestyle experiences, as is Straits Quay, a festival retail marina like no other in Penang," Tham said at the signing ceremony between E&O and TAS in Penang yesterday.

Also present were E&O executive director Eric Chan Kok Leong, Hasham and Faridah.

"Penang has always been at the forefront of the performing arts scene and with this new arts centre, we can take it to a whole new level," said Faridah.

Straits Quay is a 4.8ha festival retail centre and commercial development in Seri Tanjung Pinang featuring a comprehensive mix of outlets and attractions.

The 270,000 sq ft centre borders the upscale Quayside Seafront Resort Condominium development.

The RM1.8 billion Quayside currently serves as the region's first private waterpark within a gated community.

By Business Times

PNB to start 10-year Warisan Merdeka project with 100-storey tower

Tan Sri Hamad Kama Piah Che Othman pointing to the site of Warisan Merdeka development during the press conference pn Wednesday.

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will be undertaking the Warisan Merdeka development over three phases in 10 years starting with the 100-storey tower next year.

At a press conference yesterday to explain PNB’s plans for the project, president and group chief executive Tan Sri Hamad Kama Piah Che Othman said the development costing RM5bil would also have a shopping complex and condominiums.

The 100-storey tower – touted to be the country’s tallest – will cost RM2.5bil to RM3bil and will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space .

“It will be a five-star green building. We are confident its completion in 2015 will create some excitement and spill-over benefits for the development as a whole,” Hamad added.

PNB has set up wholly-owned unit PNB Merdeka Ventures Sdn Bhd to undertake the project. The company is headed by Tengku Abdul Aziz Tengku Mahmud who was from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd. He came on board early this year.

“We are now finalising the project design and concept, and may invite professionals, both local and foreign, to submit their ideas for the project.

“PNB’s existing headquarters, Menara PNB will be 30 years old by the time the new tower is completed. We are looking for strategic positioning for the future and will need new office space for the expanding PNB group of companies. The Warisan Merdeka tower will become the new PNB headquarters while Menara PNB will be upgraded and leased out for recurring income,” Hamad added.

He said PNB had the capability to finance the project through internally generated funds but he did not discount resorting to borrowings “if the interest rates are attractive.”

On the rationale for PNB’s decision to undertake the project, Hamad explained: “We have been planning to develop the land since 2004 after acquiring it in 2000. After holding the land for so long, we decided it is now the right time to move ahead with the project. As an investment house, our intention is to optimise returns from the development.”

He said the project was expected to yield reasonable returns of between 8% and 10%.

“For the past few years, we have revisited the plan every year. Now with Tengku Abdul Aziz helming PNB Merdeka Ventures, we are more focused on the project and are ready to move ahead with it. The Government is also promoting this type of development.”

PNB paid RM310mil or RM220 per sq ft to buy the 36-acre land from Pengurusan Danaharta Nasional Bhd in 2000. Hamad said the market value of the land was estimated at RM800 per sq ft today.

Of the 36 acres, around 17 acres are occupied by Stadium Merdeka and Stadium Negara, which have been identified as a national heritage site. Conservation works have been undertaken to restore their heritage characteristics and the two stadiums are now being managed by the National Heritage Trust.

The overall Warisan Merdeka development on 19 acres would have to complement and blend with the heritage theme, and together with the restored stadiums, the site was set to be another major landmark in Kuala Lumpur, he said.

Hamad said although the project was scheduled to take 10 years, it may be expedited if market conditions warranted it.

“As a long-term player, we would prefer to own the Warisan Merdeka property and leased it out for recurring profit but we may also consider unlocking the value if the situation warrants it.”

He said PNB had been expanding its portfolio of property assets from mainly investing in equities previously. It had been purchasing commercial properties that offered competitive returns and potential for capital appreciation at reasonable prices.

Today, its property portfolio includes Menara PNB, PNB Darby Park, Kenanga International Building, Bangunan MAS in Kuala Lumpur, Hotel Perdana in Kota Baru and PNB Ilham Resort in Port Dickson. Its first offshore property, Santos Place in Brisbane, Australia, a six-star Green Star building, was acquired in August for A$287mil.

Hamad said PNB was also active in property development through its strategic holdings in a number of companies, including the merged entity of Island & Peninsular Bhd, Petaling Garden Bhd and Pelangi Bhd.

By The Star

100-storey tower to be PNB new HQ

The tower forms part of Warisan Merdeka, which will be PNB's single biggest property project to date and its construction to create some 5,000 jobs.

The 100-storey tower that forms part of Warisan Merdeka will be the new headquarters of Permodalan Nasional Bhd (PNB) as the fund manager is already thinking about redeveloping its existing head office.

Come 2016, its main building on Jalan Tun Razak, Kuala Lumpur, will be 30 years old. It is already fully occupied by PNB and its companies.



"We have to ensure we have occupancy. We need to move to this place. It will be mainly used by us and our investee companies," group chief executive officer Tan Sri Hamad Kama Piah Che Othman said at a briefing in Kuala Lumpur yesterday.

Warisan Merdeka, a 10-year mixed-development project estimated to cost RM5 billion, will be PNB's single biggest property project to date. Its construction is set to create some 5,000 jobs.

The tower alone, of about 525 metres, makes up half of the cost. The project will be done by PNB's wholly-owned PNB Merdeka Ventures Sdn Bhd, but it is open to having partners.

It may also sell part of the 14.6ha site, but this has yet to be finalised as it also wants to have recurring income from the properties.

"We must make sure returns prevail," Hamad Kama Piah said, adding that 8-10 per cent a year would be a good rate.

More importantly, Warisan Merdeka will boost the prices of residential, office and retail properties in the Golden Triangle, especially the Jalan Hang Tuah area, Pudu and Imbi, said Zerin Properties founder and chief executive officer Previn Singhe.

Property valuers said property prices shot up when the Petronas Twin Towers was built in 1985. Some foresee Warisan Merdeka to be the next KLCC.

"We need to look at the project very objectively. New York had five tallest towers in the world at any one time and they are all doing well," Previn said.

The land price in the Golden Triangle area is currently around RM2,000 per sq ft, while the net lettable area of a top office building is about RM800 per sq ft.

But valuers who were not so bullish said the key challenge is how to deal with traffic flow.

"You must look at the project site. It is very dense and road access and public transportation is limited. If the government can improve that, then we will have a different price outlook," said a valuer who declined to be named.

This was acknowledged by Hamad Kama Piah, who stressed that PNB has consultants working on the traffic issue. The cost of improving infrastructure in the area has also been factored into the overall RM5 billion cost, he explained.

By Business Times

SP Setia launches green hub in Shah Alam

SHAH ALAM: SP Setia Bhd's newly launched first integrated green commercial hub in Shah Alam, Setia City, will have a gross development value (GDV) of RM5 billion once completed within the next 10 to 15 years.

President and Chief Executive Officer of SP Setia Bhd, Tan Sri Liew Kee Sin said the 240-acre integrated freehold mixed development, will set a new benchmark where green development is concerned within the Shah Alam skyline.

"It will comprise office towers, hotels, service apartments and a retail mall with all the elements of the concept of live, learn, work and play," he said during the official launch of Setia City today.

"With the confirmation of the building of three Grade A corporate headquarters for SP Setia, Top Glove Corporation and Khind Holdings Bhd, Setia City is now ready to be launched as the first integrated green commercial hub serving the Greater Klang Valley," he added.

He also indicated there are also plans to bring in private universities.

According to Liew, the commercial hub will be one of the largest master-planned city centres in the Klang Valley and carry the SP Setia stamp of lush tropical landscapes featuring parks and gardens, as well as lakes and waterways.

"Setia City will also be the first integrated project to have all the buildings certified under the Green Building Index," he highlighted.

Setia City, he said, has managed to attract international and renowned property player, Lend Lease, headquartered in Australia to jointly invest in the development of a retail centre to be known as Setia City Mall.

"The new mall will form the focal point of Setia City. "The confidence the market has in Setia City Mall has led to the signing of major anchor retailer, Parkson, as well as leading cinema operator Golden Screen Cinemas.

"In addition numerous other specialty retailers have been secured," Liew said.

When complete, the mall he said, will offer a fun and affordable family experience comprising amazing green space, fantastic shops, great food and entertainment.

By Bernama

'Long way to property bubble in Malaysia'

SHAH ALAM: There is still a long way to reach property bubble in Malaysia, says Housing and Local Government Minister Datuk Wira Chor Chee Heung.

According to the Housing Index for the last 10 years, prices of houses have moved about 37 per cent while in countries like Singapore and Hong Kong, property prices shot passed 35 per cent last year, he said.

He said property prices in Malaysia started to rise since 2008 due to land cost, building materials and vibrancy of the economy as a result of the initiatives and measures taken by the federal government.

"This is also as a result of foreign companies coming into this country to invest in properties. Because of the aggressive policies by the government, a lot of foreign companies set up bases in this country and bought properties for their senior staff and executives," he said when launching Setia City, an integrated green commercial hub in Shah Alam to be developed by SP Setia Bhd.

Chor, however, said it did not mean ordinary people who just joined the workforce are not able to buy houses.

"If you go further up a bit, 10km away from the KL City Centre, you are still able to find a reasonably-priced house. "If you say you can't find houses in the Klang Valley within the RM350,000 range, I will not believe you, but you have to travel a bit further out of the city centre.

"In central Kuala Lumpur, you can't find houses within the range of RM150,000 to RM300,000. Last year and this year, the most sought-after properties are in the range of RM150,000 to RM180,000.

"In central Kuala Lumpur, you can't find houses within the range of RM150,000 to RM300,000.

"This is the result of government efforts to transform Kuala Lumpur into a bustling city. If you find a house at RM200,000 within the Kuala Lumpur City, this means our economy is in bad shape," he said.

Chor said the government was concerned of this and that was why incentives were provided for in the 2011 Budget to assist low-income earners and young people who just joined the workforce to buy houses.

The minister, however, said the government would not control property prices as Malaysia was a free economy.

"The government will intervene if certain things happen that will bring disaster to the economy and the people," he said.
Chor said people have been buying houses since 2008 and he did not deny that there could be some speculation.

"There is also a sudden drop in the number of houses to be built last year and this showed developers are also studying the market situation," he said.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said there was no where to build houses within the RM350,000 price range except in Johor where land was cheaper.

"Land cost is a factor of the end-product," he said, adding that a large portion of SP Setia's projects were within the price range of RM400,000 to RM1 million.

By Bernama

What is REITS and how to get monthly dividend payments from it

A lot of investors, especially senior citizens, are hoping to get consistent and regular dividend payments from stocks.

In this article, we will look into constructing an investment portfolio, which consists of real estate investment trusts (REITs), to get monthly dividend payments.

A REIT is a real estate company that pool investor funds to purchase a portfolio of properties. Normally, it has two unique characteristics: investment in income-producing properties, with almost all of its profits distributed to investors as dividends.

From the table, based on the latest stock price (as at Oct 18) and on assumption that the same dividend payments will be paid over the next 12-month period, almost all REITs will provide about 7%-8% dividend yields. Based on our observations, most of the REITs will try to pay higher dividends over the years. Hence, if the overall economy continues to recover, some REITs may pay even higher dividends for the coming few years.

Due to them only listing at the middle of this year, we have excluded CMMT and Sunreit.

As mentioned earlier, a lot of retirees would like to invest in investment assets that can provide a consistent and regular dividend income. Therefore, we think that REITs can provide a good alternative to the retirees. From the table, except for Arreit, Atrium, Axreit and Hektar, all other REITs will make dividend payments twice per year. Most of them will pay their dividends in the month of February and August. Hence, if an investor would like to receive his dividends other than the above two months, he may need to diversify their REITs into holding many types of REITs.

Based on the list of REITs in the table, we can see that, except for the month of January and April, dividend payments were being made at different months throughout the year, thus investors can receive a stream of dividend income by buying into different types of REITs.

Investors can build a REIT portfolio consisting of a few REITs which make dividend payments at different months of the year. The following is just one of selection options available for consideration.

Based on the current price dated on Oct 18, assuming that the same dividends will be paid in the next 12 months, a portfolio with AMfirst, Arreit, Atrium and Hektar can generate a dividend yield of more than 8% (see table). Besides, by buying with equal amount into these four REITs, investors can get dividend payments for almost every month, except for the month of January, April, July and October.

Nevertheless, investors need to understand that the above selections are solely based on the assumption that these REITs will reward investors with the same dividends and pay during the same month as shown in the table above.

We also understand that apart from the above four REITs, some other REITs may reward investors with even higher dividend payments.

OoiKokHwa is an investment adviser and managing partner of MRR Consulting.

By The Star (By Ooi Kok Hwa)

Bangunan MAS to be upgraded

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is planning to upgrade Bangunan MAS into a Grade A++ office building and a new five-star hotel apartment block will be added on the site, said president and group chief executive Tan Sri Hamad Kama Piah Che Othman yesterday.

PNB bought the 35-storey building on Jalan Sultan Ismail from Malaysia Airlines (MAS) three years ago for RM130mil.

Hamad said the former MAS headquarters would be refurbished and leased out for recurrent income.

It is believed the hotel will have world-class standards and will be operated by a professional hotel group.

By The Star