UEM to take control of Sunrise for RM1.4b

UEM Land Holdings Bhd, the country's largest property developer by market value, plans to take control of rival Sunrise Bhd in a RM1.4 billion deal as it aims to be one of the biggest players in the region.

"That's our vision, to have our own version of CapitaLand," said UEM Land managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim in a media conference in Kuala Lumpur today.

Singapore’s CapitaLand is one of Asia’s biggest property developers with presence in over 20 countries.

The deal, which confirmed a Business Times report on Thursday, values Sunrise at RM2.80 a share, an 11 per cent premium to Sunrise's last traded price of RM2.52.


Deputy Chief Executive Officer Employees Provident Fund (EPF) Shahril Ridza Ridzuan and Group Managing Director/CEO of UEM Group, Datuk Izzaddin Idris at the press conference today. Pix by Mohd Khairul Helmy

According to UEM Land, 77 per cent owned by UEM Group Bhd, the deal will immediately boost earnings. It also allows UEM Land to take part in Sunrise's development in the Klang Valley. It will also strengthen UEM Land’s presence abroad.

"For example, we have a very nice piece of land in South Africa, it's a very strategic location, right at the harbour front. And now, we have the expertise to do it.

“Previously, it's quite daunting to think of I am going to build another Mont Kiara (in South Africa), but who is going to do it? Who are we going to send there?' Now, we can deploy the entire (Sunrise) team," said Wan Abdullah.

Major Sunrise shareholders, led by Datuk Tong Kooi Ong, Datuk Allan Lim and Tan Sri Tan Chee Sing, who collectively hold a 40.3 per cent stake, have agreed to UEM Land's offer. But UEM Land needs to have more than 50 per cent of Sunrise for the takeover to happen.

If more than 75 per cent of Sunrise shareholders accept the offer, UEM Land plans to take Sunrise private.

Tong, who was also present, expects the deal to be well received by investors even though it may mean a delisting of another entity on Bursa Malaysia.

"It will excite the market, because now we will actually have a very large property developer in Malaysia, a company that has lots of land bank, lots of potential, the right backing, a company that now has a nice brand and expertise.

“I think it will get a lot of foreign institution interests into the stock. Therefore I think it is positive for the capital market," said Tong.

The offer will be satisfied in one of two ways. The first option, known as the share alternative, is the offer of new UEM Land shares priced at RM2.10 each.

The second option, known as the cash conversion method, involves the issue of redeemable convertible preference shares at RM1 each.

After the deal is completed, scheduled at the end of the first quarter next year, UEM Group's shareholding in UEM Land will fall to between 56 per cent and 65 per cent, depending on the number of shares or preference shares issued.

Major shareholders led by Tong will also have stake of between 6 and 11 per cent in UEM Land.

But the parties admitted that there are concerns over the possible clash of corporate cultures.

"Mergers are clearly beyond P&L (profit and loss)... It was a major issue when this (the deal) was contemplated, but I think we have spent considerable amount of time thinking about this issue and thinking through this issue.

"What we will try to do is we'll try to allow the structure and the people in the two organisations to go parallel and not to force a merger. And then over time, to allow the interaction among the two parties, to feel comfortable with each other first, then crossing each other's boundaries," explained Tong.

The Sunrise brand will also be maintained.

"We will retain the Sunrise brand, because it is of great value. We don't intend to butcher it, certainly," said Wan Abdullah.

By Business Times

UEM Land to buy Sunrise for RM1.4b

Sources say the all-share offer values Sunrise at RM2.80 a share, 11 per cent higher than Tuesday's closing price of RM2.52

UEM Land Holdings Bhd plans to take over rival Sunrise Bhd in a deal valued at some RM1.4 billion to expand and develop the expertise to build and market luxury properties.

Sources said the all-share offer values Sunrise at RM2.80 a share. This is 11 per cent higher than its last closing price of RM2.52 on Tuesday.

Three major shareholders, including Datuk Tong Kooi Ong, who hold more than 40 per cent of Sunrise, have agreed to the deal, which is structured as a voluntary general offer.

"UEM Land needs the expertise in luxury development. They don't have the marketing capabilities," said one of the sources.
Sunrise, valued at RM1.25 billion currently, is well known for its high-end development at Mont'Kiara. Although its market value is half that of UEM Land, its net profit is bigger at RM134 million in the financial year to June 30 2010.

UEM Land is valued at RM2.45 billion and its net profit in the financial year to December 31 2009 was RM115 million.

Shares of both UEM Land and Sunrise have been suspended from yesterday until 5pm today. UEM Land is due to hold a press conference today to announce a mega corporate exercise.

The deal means that shareholders of Sunrise will still be able to profit from the potential future earnings of the combined group.

UEM Land is the developer of Nusajaya in Johor.

The company has 3,400ha of undeveloped land in Nusajaya, targeted to be developed by 2025.

It is also learnt that Tong will become a director of UEM Land and he will also chair the development committee of the group.

By Business Times

UEM Land buying stake in Sunrise?

KUALA LUMPUR: UEM Land Holdings Bhd is believed to be acquiring a substantial stake in Sunrise Bhd following requests for a trading suspension of their shares today pending an announcement.

According to filings with Bursa Malaysia, UEM Land and Sunrise have requested for the trading suspension that started at 9am yesterday to end at 5pm today.

In separate statements, the companies each said it would announce a “corporate exercise”.


Datuk Wan Abdullah Wan Ibrahim is expected to give details today.

In its statements to the stock exchange, UEM Land said it had requested for a trading suspension pending a “material announcement on a potential corporate exercise”.

Attempts to get UEM Land to comment were unsuccessful while a Sunrise representative said the company was not able to disclose details of its material announcement.

Market talk has it that the acquisition by UEM Land would be made via a share swap. According to analysts, there could be share swap between the companies which eventually could result in UEM Land becoming a substantial shareholder in Sunrise.

Another analyst said there were lots of speculation in the market currently. He said the acquisition could result in UEM Land privatising Sunrise. “If so, I’d imagine that UEM Land will issue shares to buy into all of Sunrise. Whether it’ll be fair to minorities depends on the mechanices of the swap.”

However, it is not certain whether the deal will be a straight share swap or share swap with cash option to Sunrise shareholders.

It is unclear what price UEM Land will pay for Sunrise, whose share price has been on an uptrend since Oct 27.

According to Sunrise’s latest annual report, Casa Unggul Sdn Bhd is its single largest shareholder with a 24.41% stake. Casa Unggul is a company controlled by executive chairman Datuk Tong Kooi Ong. The Employees Provident Fund Board has 12.61% voting shares in Sunrise.

Analysts said Tong did not address the potential corporate exercise with UEM Land at Sunrise’s analysts briefing yesterday to announce its quarterly results.

In a media advisory yesterday, UEM Land said it was “set to embark on a mega corporate exercise” with details to be announced today by managing director/chief executive officer Datuk Wan Abdullah Wan Ibrahim.

UEM Group Bhd group managing director/chief executive officer Datuk Izzaddin Idris is also expected to be present at the briefing.

Sunrise closed at RM2.52, its highest in 12 months, prior to its suspension yesterday. The counter has gained more than 22% year-to-date.

UEM Land has appreciated more than 84% year-to-date. It closed at RM2.26 ahead of the suspension.

Meanwhile, Sunrise is upbeat on its prospects for the current financial year ending June 30, due to its substantial unrecognised revenue of RM863.8mil as at Sept 30.

“The profits from these projects will be recognised over the current and subsequent financial years. The group is planning to launch new residential and commercial projects in the near future in order to sustain longer term profits,” Sunrise said in the notes accompanying its results

Sunrise posted a slightly lower net profit of RM36.7mil for the three months ended Sept 30 compared with RM37.3mil a year ago.

In a filing with Bursa, Sunrise said its pre-tax profit surged to RM52.2mil from RM50.2mil and earnings per share fell to 7.41 sen from 7.52 sen before. It also announced an interim dividend of 26.67 sen per share less 25% taxation amounting to RM99mil or 20 sen per share.

Revenue for the period was lower at RM171.3mil from RM190.3mil a year ago.

“Despite lower turnover, higher pre-tax profits were achieved on the back of higher margins and lower operating costs for the quarter under review,” Sunrise said.

The main contributors to the group’s financial performance for the quarter were its ongoing residential and commercial developments.

ECM Libra head of research Bernard Ching said on an annualised basis, the first quarter results came in within market expectations but below the research house’s full year estimates as it expected subsequent quarters to report strong numbers.

He said this was backed by the unrecognised revenue of RM863.8mil as at Sept 30 and including the strong sales from its maiden project in Canada, Quintet, the unrecognised revenue would swell to RM1.22bil as at Oct 31.

“The net interim dividend of 20 sen came as a surprise but we believe this is non-recurring. Nonetheless, we believe the company may reinstate its previous dividend payout guidance of 35% which has been scrapped over the last three financial years in order to conserve cash amid the uncertain economic outlook then.

“As the net debt/equity ratio of the company has been reduced from 0.52 times in FY08 to 0.34 times in FY10, we expect the company to have greater financial capability to reward its shareholders going forward,” Ching said.

Another local analyst said Sunrise’s results were OK and there was no major surprise. However, he concurred with Ching that Sunrise’s project in Canada did exceptionally well and almost fully taken up.

“The dividend was indeed a surprise. We were only expecting FY11 dividiend to be 5.5 sen,” he said.

By The Star

ECM keeps 'buy' call on Sunrise

ECM Libra Investment Research has maintained its "buy" call on Sunrise Bhd with the target price unchanged at RM3.58.

In a research note today, it said the target price was unchanged, pending the widely expected announcement of a corporate exercise today involving UEM Land Holdings Bhd.

ECM Libra reduced its numbers for the financial year 2011 to 2013 taking into account, retention of some units from future launches, for the operation of serviced apartments.

"But this will be offset by recognition of Quintet - residential project in Richmond, Canada - earnings on percentage completion basis at group level instead of at unit level.

"Despite our above consensus numbers, we still expect Sunrise to post record earnings in financial year 2011, backed by strong sales and unrecognised revenue," ECM Libra said.

Sunrise launched the phase one of Quintet with a gross development value (GDV) of RM374 million on Sept 28 and the project is sold-out as of to date.

Phase two with a GDV of RM825 million will be launched in the first quarter next year.

Meanwhile, Menara Solaris with a GDV of RM480 million is expected to be launched within the next three weeks.

During the first quarter financial year 2011, property sales of about RM100 million was achieved, but this does not include RM351 million sales from Quintet achieved in Oct 2010.

Unrecognised revenue remains flattish quarter-on-quarter at RM864 million but would swell to RM1.2 billion in Oct 2010, ECM Libra said.

OSK Research, meanwhile, said it is maintaining a "buy" call on Sunrise but downgraded the target price to RM4.33 from RM4.62 previously.

This was due to the unexpected interim dividend surprise of 26.67 sen as well as some changes to its forecast assumptions on the Quintet.

OSK Research is upgrading Sunrise's financial year 2011 and 2012 earnings upwards by 5.6 per cent and 12.1 per cent respectively.
The management has been guided that earnings from the Quintet, including phase two, would be recognised on a progress billing basis.

Although Sunrise's first quarter financial year 2011 turnover fell by 10 per cent year-on-year, net profit dipped by a mere two per cent as progress billings from its recently launched high-margin projects, such as 11 Mont Kiara and 28 Mont Kiara, picked up momentum.

On the other hand, quarter-on-quarter turnover surged 32 per cent but net profit dropped five per cent on higher expenses incurred on commencement of its Canadian project.

Sunrise's latest unbilled sales totaled RM1.22 billion amounting to 2.1 times of financial year 2010 total turnover.

By Bernama

New rule to cool property speculation

Bank Negara Malaysia has put in place a rule that allows banks to lend only up to 70 per cent of the house value.

The new mortgage lending rule, which applies only to borrowers taking up a third housing loan, is meant to curb excessive investment and speculative activity in urban areas.

"While Malaysia is not experiencing a general property price bubble, targeted pre-emptive measures are appropriate to moderate the increases in property prices that are evident in select locations, arising from purchases that are speculative in nature.

"This measure is expected to moderate excessive investment and speculative activity in the residential property market and to ensure affordability of homes for genuine house buyers," Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said in her keynote address at the Financial Industry Conference in Kuala Lumpur yesterday.

She gave the assurance that financing facilities for the purchase of first and second homes would not be affected and that borrowers would still be able to obtain financing for these at the current loan-to-value ratio (LVR) applied by individual banks, based on their internal credit policies.

The new rule takes effect immediately. Banks were previously not subjected to any curbs on mortgage lending.

The Association of Banks in Malaysia (ABM), whose members comprise the country's 23 commercial banks, supported Bank Negara's move, saying that it was "timely and pre-emptive".

"While the banking sector is wholly in support of house ownership, we agree that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble," its chairman Datuk Seri Abdul Wahid Omar said in a statement yesterday.

Abdul Wahid, who is also the chief executive officer of top lender Malayan Banking Bhd (Maybank), said the move was not expected to dampen or have an adverse impact on the growth of residential property development, nor on the banks' house financing business.

The ABM and its member banks had engaged with Bank Negara on the matter prior to the latter coming out with the ruling.

A banking analyst from a foreign brokerage noted that most banks, particularly the bigger ones, already adopt strict LVR on borrowers taking up a second, and especially third, housing loan, with location also being an important factor.

As such, the analyst agreed with Abdul Wahid that the new rule was not likely to have a big impact on the banks' mortgage business.

"On a third loan, it's already quite hard to get an 80 per cent LVR now," she remarked. For a first loan, banks usually lend up to 90 per cent of the house value, or even up to 100 per cent in some cases.

The country's biggest mortgage players by market share are Public Bank Bhd, CIMB Bank Bhd and Maybank.

Property developer Mah Sing Group Bhd also does not see the new rule hurting overall sentiment of the market significantly as it comprises mainly first-time buyers and upgraders.

Neither does its group managing director Tan Sri Leong Hoy Kum see a property bubble building up as the price increases have been largely those of properties with good concepts by well-known developers and in good locations.

Zeti, in her speech, noted that residential property prices in the country had increased steadily in tandem with economic development and rising household income.

"In the more recent period, however, certain specific locations, particularly in the urban centres, have experienced faster growth, both in house prices and the number of transactions. Supporting this trend has been the increase in financing for multiple-unit purchases by a single borrower. This suggests investment activity that is of a speculative nature," she said.

Property prices in Malaysia rose 5.6 per cent in the first quarter of this year and 4.2 per cent in the second quarter, according to Bank Negara.

By Business Times

New mortgage rule 'positive' move: Citi

Malaysia’s move to tighten mortgage rules is “positive” for the nation’s banks as it will help prevent a property bubble and limit the risk of household non-performing loans, Citigroup Inc analyst Fiona Leong said in a report yesterday.

The central bank yesterday placed a limit on the loan-to-value ratio for people taking out third mortgages to buy homes in a bid to moderate “excessive” investment and speculation in urban areas.

Banks with bigger exposure to home mortgages are Hong Leong Bank Bhd and Alliance Financial Group Bhd, Leong said.

By Bloomberg

Support for Bank Negara’s housing LVR cap move

PETALING JAYA: Bank Negara’s imposition of a maximum loan-to-value ratio (LVR) of 70% for a third and subsequent housing financing facility taken by a borrower is seen as a timely pre-emptive measure to avert unhealthy speculative activities and a potential property bubble, industry players concurred.

With the latest measure that takes immediate effect, people buying their third and subsequent house would be required to pay a higher down-payment than the current standard minimum of 10% of the value of a house.

In a statement yesterday, the central bank said financing facilities for purchase of first and second homes would not be affected and borrowers would continue to be able to obtain financing for these purchases at the present prevailing LVR level applied by individual banks based on their internal credit policies.

Real Estate and Housing Developers Association president Datuk Michael Yam said the association supported the measure as it would ensure a healthier and orderly housing market.

“There are some hot spots in the housing market where prices have appreciated higher than the average price increases in other locations. As financing for the first and second housing properties will not be affected by the ruling, the move is not expected to dampen the performance and growth of the housing property sector.

“Meanwhile. the LVR cap on those buying their third and subsequent house should stem speculative buying and ensure a more sustainable housing market,” Yam added.

Mah Sing Group Bhd group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move was not surprising as Bank Negara had given earlier indications of such a move.

“The move should not significantly affect the overall sentiments of the market which comprises mainly first-time buyers and upgraders.”

Leong said there was no property bubble as price increases were only for properties with good concepts in good locations.

“As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to our strong employment market, low interest environment and good liquidity in our financial system,” he added.

National House Buyers Association honorary secretary-general Chang Kim Loong said the measure would help curb speculative buying in the local housing market.

“Prices of landed residential properties have increased substantially over the last five years.

“We are glad that the Government has heeded HBA’s call with regards to the LVR. We will next seek to make housing more affordable for middle-income households and have pricing control for this group of buyers.

“HBA has urged the Government to set up a Special Task Force with such an objective and aspiration,” he said.

RAM Ratings head of financial institution ratings Promod Dass said: “Given this LTV measure only applies to the third home loan onwards, there should still be ample opportunities for banks to focus on first-time home buyers and perhaps to finance the purchase of a second home for lifestyle upgrading purposes.”

“All said, the level of prevailing interest rates would be an important factor too for the health of home loans, given that the bulk of outstanding home loans are based on floating interest rates,” he said in an e-mail interview.

The Association of Banks in Malaysia (ABM) chairman Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownership, ABM agreed that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Abdul Wahid, who is also Malayan Banking Bhd president and CEO, said: “In my view, the application of the measure is clear and specific and the LTV ratio itself, optimal.

Given that financing for first and second housing properties will not be affected by the ruling, the move is not expected to dampen or have an adverse impact on the growth of residential property development sector as well as the banks’ house financing business.

“Affordability of homes for genuine buyers will be preserved as banks continue to lend prudently under their respective risk management framework.”

On the Financial Capability Programme, he said it underscored the view shared by ABM that education was paramount in the promotion of sound financial and debt management.

Details of the implementation of the programme would be announced next month.

By The Star

JP Morgan: Buying opportunity in property share price weakness

KUALA LUMPUR: JP Morgan Asia Pacific Equity Research said any weakness in share prices from the Bank Negara Malaysia announcement on the imposition of a 70% loan-to-value cap (LVR) on mortgages for third properties as “a buying opportunity”.

In a research note issued on Thursday, Nov 4 it said the new ruling was clearly targeted at speculative buyers. Genuine first and even second time home buyers would not be affected, and would still be able to obtain financing of up to 90%.

“This is in line with guidance and not a surprise to the market. The government has already provided hints on this possibility over the past couple of months. Note however that even prior to this, banks have generally been stringent with the previous 90% ceiling LVR already not a common practice as much depends on the credit profile of each customer,” it said.

JP Morgan said on balance, it remains positive. In the short term, developers with higher exposure to the more speculative condo/high rise market (namely in the KLCC and Mont Kiara area, Klang Valley) and even for high-end landed properties in certain limited hot spot locations in Klang Valley (i.e. Desa Park City, Mutiara Damansara) and in Penang, could see some softening in demand.

“Overall however, we believe the move is positive for the long term sustainability and health of the sector,” it said.

It maintained its overweight on IJM Land and SP Setia, but preferred the former on valuation. The more speculative condominium market accounts for no more than 20% of sales for SP Setia and 35%-40% for IJM Land.

“For IJM Land, its strong branding, attractive product portfolio at the 'Light' project, and shortage of land in Penang island, also means that it should continue to fare better than most other condo developers, in our view,” it said.

JP Morgan said both companies could also benefit from upside to earnings from new projects i.e. from the commercial KL Eco City project for SP Setia to be launched by year-end, and from the Canal City residential project for IJM Land to be likely launched in 2011.

“We see any weakness in share prices from this announcement as a buying opportunity,” it said.

It said IJM Land was currently trading at a 30% discount to its RNAV of RM3.80/share, while SP Setia is already trading close to its RNAV of RM5.20/share.

During periods of strong liquidity and foreign inflows back in 2007 coupled with healthy sector fundamentals, SP Setia traded up to a 20% premium to RNAV.

By The EDGE Malaysia

Mah Sing buys land worth RM167m

PROPERTY group Mah Sing Group Bhd is buying two pieces of land in Ampang and Cyberjaya for a combined RM167 million and plans to build properties with a total gross development value (GDV) of RM1.2 billion.

The 1.9-hectare freehold land along Jalan Ampang, Kuala Lumpur, is being bought for RM114.9 million or about RM560.63 per sq ft. The development, which will be known as M City, is about 1.26km from the group's recently launched serviced residence project, M Suites.

M City will be a niche project comprising serviced residences, SoHo (small office, home office) and retail outlets with an estimated GDV of RM920 million to be developed over five years.

Preliminary plans for M City include flexible-sized serviced residences and SoHo with built-ups from about 500 sq ft with indicative pricing from RM398,800 a unit.
"We are toying with the idea of vertical green lungs in M City. It will be a new concept for the area," group managing director and group chief executive Tan Sri Leong Hoy Kum said in a statement.

The group is also buying 14.11ha land adjacent to its Garden Residence township in Cyberjaya for RM51.6 million.

It intends to develop two- and three-storey semi-detached homes with a built-up area of about 3,076 sq ft. Indicative pricing is around RM1.28 million for the two-storey semi-detached unit and RM1.44 million for the three-storey semi-detached unit.

To date, Mah Sing has acquired new projects with a combined gross development value of RM3.1 billion.

The group has projects with remaining GDV and unbilled sales of about RM8.64 billion.

Mah Sing's land are in the Klang Valley, Kuala Lumpur, Penang and Johor Baru. They should last the group between five and seven years.

By Business Times

Mah Sing buys land in Ampang, Cyberjaya

KUALA LUMPUR: Mah Sing Group Bhd has acquired two parcels of freehold land for RM166.5mil which are expected to generate a combined gross development value (GDV) of RM1.2bil.

The 1.88ha in Jalan Ampang, named M City Jalan Ampang, will be a niche project comprising serviced residence and retail outlets with an estimated GDV of RM920mil to be developed in five years.

“The land is flat and vacant and ready for immediate development. Furthermore, conversion premium to commercial development has been paid for part of the land and it comes with a sub-structure for two levels of basement car parks,” group managing director and group chief executive Tan Sri Leong Hoy Kum said in a statement yesterday.

Mah Sing has also acquired a 13.94ha freehold land next to its Garden Residence township in Cyberjaya which will add RM280mil to Garden Residence’s GDV and expand the township size to 60ha.

“Together with this latest acquisition, Garden Residence is a sizable project which will take between three and five years to complete.

“It is certainly an opportune time to replenish our land bank in order to meet the strong demand and we intend to create an exclusive enclave of semi-detached homes on the new land,” Leong said.

To date, the group had acquired new projects with a combined GDV of RM3.1bil. – Bernama

Meanwhile, it currently has projects with remaining GDV and unbilled sales of RM8.64bil.

By Bernama

'80pc SetiaWalk occupancy by Q1 2012'

SP Setia Bhd expects the occupancy rate at its boutique lifestyle development project, SetiaWalk, to increase to 80 per cent from 60 per cent when it opens its doors by the first quarter of 2012.

Spanning 8.32 hectares of prime land fronting Jalan Puchong, SetiaWalk offers an eclectic mix of retail offices, serviced apartments, dining delights, a boutique hotel and entertainment centre.

SetiaWalk, with a gross development value of RM1 billion, has a gross floor area of 2.3 million sq ft and a net lettable area of 2.4 million sq ft.

"There will be more exciting things to look forward to at SetiaWalk, one of them being the proposed light rail transit station opposite our project," said its divisional general manager, Wong Tuck Wai, at the ceremony to welcome three anchor retailers of its entertainment centre.

"We welcome TGV Cinemas, Celebrity Fitness and Superstar Karaoke as our business partners," he said.

Wong said the last anchor tenant would be the Chinese restaurant chain and the name was expected to be revealed soon.

SetiaWalk targets its retail offices to open for business in April next year with the entertainment centre operational by December 2011.

Meanwhile, the company said as part of its continuing efforts to ensure the success and vibrancy of SetiaWalk, it would provide pre-leasing services to match owners of the retail offices with the right tenants.

"A dedicated pre-leasing team has identified a list of potential suitors and matched with the buyers to ensure an exciting tenancy mix and add value to the entire development," it said.

Superstar Karaoke's consultant-cum-operations manager, Richard Law, said the outlet at SetiaWalk would be its fourth nationwide and it would occupy about 12,000 sq ft and offer a touch screen song-selection system.

TGV Cinemas chief operating officer, Kenny Wong, said the cinema would have nine cineplexes with 1,900 seats.

Celebrity Fitness would occupy two levels of 22,000 sq ft in total, said its managing director of Malaysia Kwangho Choi.

SetiaWalk, which can be access via Lebuhraya Damansara-Puchong and Persiaran Wawasan, has also managed to attract retailers such as Starbucks, BMS Organics, STADT German Cuisine, Ponytail Salon, Hock Hua Tonic, Bata and La Primavera.

By Bernama

PjH plans RM1.3b projects to make Putrajaya more vibrant

PUTRAJAYA Holdings (PjH) Sdn Bhd said its next phase of development at the administrative capital will comprise commercial and residential properties worth more than RM1.3 billion.



Director and chief executive officer Datuk Azlan Abdul Karim said the properties which will be built in five years, will make Putrajaya a liveable city.

"The perception is that Putrajaya is for government buildings. Our next focus is to build office towers, retail, an entertainment strip and medium- to high-end housing to create vibrancy for Putrajaya.

"We will have several mixed developments and waterfront projects to attract expatriates, too," he told the media in Putrajaya yesterday.

Putrajaya, which started in 1995, comprise 20 precincts sprawled over 4,931ha. By 2020 it will have 3.8 million sq m of government offices, 3.4 million sqm of commercial space, and 65,000 residential units with a working population of 500,000.

PjH, the master developer for Putrajaya will call for tenders for the new projects by early 2011. Some of the projects are in design stage now, Azlan said.

Azlan said PjH will either lease the office towers or sell them if there is demand.

He said PjH has been approached by several government agencies and corporate companies.

"We aim to also attract multi-national companies. We will be talking to some big names," he said.

All the buildings will meet the Green Building Index standards, Azlan said.

On the residential side, he said PjH will build affordable homes starting from RM150,000, terraced houses priced from RM450,000, and waterfront villas, which it expects to sell from RM2 million.

"We will cater to all segments of the market. I am bullish on the outlook for Putrajaya. There is pent-up demand for new houses here," he said.

Azlan said on average, its housing projects are snapped up within one month after launch.

"When we build commercial or residential properties, we will make sure there is demand. We are not going to be like Dubai where they kept on building regardless or not there was demand," he said.

By Business Times

Property bubble unlikely to occur: Mah Sing

A property bubble is not likely to occur following Bank Negara Malaysia's move to increase the loan-to-value (LTV) ratio to 70 per cent for third house financing facilities and onwards, says Mah Sing Group Bhd.

Group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move should not affect the overall sentiment of the property market significantly which comprised mainly first time buyers and upgraders.

"As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to the strong employment market, low interest environment and good liquidity in the financial system," he said in a statement today.

Meanwhile, the Association of Banks in Malaysia viewed the move as timely and pre-emptive in nature.

Its president cum chief executive officer Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownerships, the association agreed that the appropriate measure should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Bank Negara Malaysia today announced the implementation of a maximum LTV ratio of 70 per cent, applicable to third house financing taken out by a borrower, which is effective immediately.

The measure aimed to support a stable and sustainable property market and promote the continued affordability of houses for the general public.

By Bernama

Mah Sing in RM167m land buy pact

Mah Sing Group Bhd, a Malaysian property developer, said it agreed to buy land in Kuala Lumpur and Cyberjaya for a total of RM167 million.

The 4.7 acre land in Kuala Lumpur will be used to develop serviced residences and retail outlets with a total estimated gross development value of RM920 million, it said in a statement today.

The second plot, measuring 34.9 acres in Cyberjaya, is worth RM280 million in gross development value, it said.

By Bloomberg

Cyberview sees 10% investment growth in Cyberjaya

CYBERJAYA: Cyberview Sdn Bhd, the landowner of Cyberjaya, is optimistic of achieving a further 10% growth in investment in Cyberjaya by year-end from the current RM3.19bil.


(From left) Setia Haruman COO C.K. Lao, Hafidz Hashim, Multimedia Development Corp GM Wee Huay Neo and Sepang Municipal Council president Mohd Sayuthi Bakar at the media briefing yesterday.

“Giving the rapid growth of development in Cyberjaya, we are confident to achieve that growth through land sales for enterprise, commercial, institutional and residential space,” managing director Hafidz Hashim said yesterday after Cyberjaya’s annual media briefing.

Hafidz said the RM3.19bil represented more than a third of Cyberjaya’s total investment value of RM9.1bil since its inception over 10 years ago.

In 2009, Cyberjaya received investment worth RM1.29bil.

Hafidz said the company was also optimistic of surpassing this year’s investment figure for 2011, as it had secured projects worth RM1.48bil to start next year.

“Cyberjaya intends to support the Government’s aspiration to become a developed and high income nation as had been tabled in Budget 2011.

“We are poised to bring development-centric initiatives to fruition in line with what had being announced during the recent budget,” he said.

He added that to date, more than 500 companies, including global multinationals such as HP, Dell, Fujitsu and Motorola, had set up regional and global centres in Cyberjaya.

“Cyberview aspires to strengthen the key government initiatives by driving inward local and foreign investments, developing skilled workers and talents, and nurturing creative economies in Malaysia via its thriving content creation and multimedia industries,” he said.

On the other hand, Hafidz said Cyberview had in place initiatives from Budget 2011 that called for creative content development as a key contributor to the national economy with Cyberjaya-TV.com, which went on air earlier this year.

“As a whole, Cyberview’s vision and direction for Cyberjaya closely echoes the four major thrusts identified by the National Economic Advisory Council for the implementation of the New Economic Model, which are talent development, the creation of research and development ecosystem, provide growth infrastructure and institutional development,” he said.

On the current population living in Cyberjaya, he said there are 12,000 residents at the moment and the figure was expected to reach 35,000 in 2014.

The annual media briefing brought together Cyberjaya stakeholders such as Multimedia Development Corp, Setia Haruman Sdn Bhd and the Sepang Municipal Council.

By The Star

Cyberview will take heed of advice in report

PETALING JAYA: Cyberview Sdn Bhd, the landowner of Cyberjaya, acknowledges the recommendations in the Auditor General’s Audit Report 2009 for tighter management and coordination of efforts in developing Cyberjaya.

The company was responding to the recent report which highlighted some weaknesses in Cyberview in handling issues related to the development of Cyberjaya.

Managing director Hafidz Hashim said via e-mail that scheduled reporting and tighter monitoring measures as recommended by the report were in the process of being put into place as Cyberview’s role expanded from that of a landowner to the entity spearheading and masterminding the development of Cyberjaya.

“With the rapid changes taking place in the cybercity, the role as development mastermind brings challenges and Cyberview’s role is continuously evolving with the growth of Cyberjaya and we constantly strive to improve processes for the betterment of the cybercity,” he told StarBiz.

The audit report for the company was done between July and November 2009 and highlighted some weaknesses such as management of the land, records on land status that were not properly maintained, dissatisfaction with the transport service and some financial management.

However, it said, Cyberview’s financial performance from 2006 to 2008 was satisfactory as the company was profitable all those years despite some decline in profit in 2008.

It said the objective to form Cyberview was to ensure the development of Cyberjaya was in tandem with the Government’s aspiration to create an information technology city (cybercity).

“The complete development of a cybercity could not happen if Cyberview could not monitor the development of the city efficiently,” it said.

The report said the Finance Ministry, the main shareholder in Cyberview, needed to ensure the company was focused in monitoring Cyberjaya’s development.

It also suggested that Cyberview fully monitor the buildings’ rent collection and take action on those who failed to pay their outstanding rent.

By The Star

BNM: Maximum loan-to-value (LTV) ratio of 70% for 3rd home loan

KUALA LUMPUR: Bank Negara Malaysia is imposing with immediate effect the maximum loan-to-value (LTV) ratio of 70% for the third house financing facility taken by a borrower as it seeks to curb "excessive investment and speculative activity in the residential property market".

The central bank said on Wednesday, Nov 3 the move was expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations.

“This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers," it said.

Bank Negara said the financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies.

“The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public,” it said.

Below is the entire statement issued by Bank Negara:

Measures in Promoting a Stable and Sustainable Property Market and Sound Financial and Debt Management of Households

Bank Negara Malaysia wishes to announce with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower. Financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies. The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public.

At the national level, residential property prices have increased steadily in tandem with economic development and the rise in income levels. This aggregate growth trend remains largely manageable and has not deviated from the long term trend in residential property prices. In the more recent period, however, specific locations, particularly in and around urban centres, have experienced faster growth, both in the number of transactions and in house prices. This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature.

The targeted implementation of the LTV ratio is expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations. This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers. This measure therefore remains supportive of the objective of encouraging home ownership among Malaysians which continues to be an important national agenda.

Introduction of the Financial Capability Programme

As part of the continuous efforts to raise the level of financial literacy and to promote sound financial and debt management by Malaysians, Bank Negara Malaysia also wishes to announce the introduction of the Financial Capability Programme. This Programme will be offered by Agensi Kaunseling dan Pengurusan Kredit (AKPK) through its establishments nationwide and will commence from January 2011. The Programme is aimed at equipping individuals with important knowledge for responsible financial decisions by gaining practical understanding and skills in money and debt management. This in turn will contribute towards preserving the sound financial positions of households and ensure that debt accumulation is commensurate with household affordability, including their ability to absorb interest rate adjustments and potential volatility to income and expense levels. Individuals particularly new prospective borrowers and young adults are strongly encouraged to participate in this specially designed programme. The details of the implementation of the Financial Capability Programme will be announced later in December this year.

Bank Negara Malaysia

3 November 2010

By The EDGE Malaysia (by Joseph Chin)

Sunrise Q1 pre-tax profit up 4pc

Sunrise Bhd's pre-tax profit for the first-quarter ended Sept 30, 2010, increased four per cent to RM52.214 million from RM50.244 million registered in the same quarter last year.

However, revenue fell 9.98 per cent to RM171.272 million against RM190.261 million chalked up previously, it said in a statement.

It attributed the higher profits to lower operating costs while the lower revenue was due to the fact that its projects, Mont'Kiara Meridin, 10 Mont’Kiara and most of Solaris Dutamas were completed in the previous corresponding period.

Sunrise said it has locked in substantial unrecognised revenue of RM863.8 million, as at Sept 30, 2010, with another RM351 million sales recorded in October, mainly from its Quintet project in Richmond, Canada.

The substantial lock-in sales would help sustain the group's earnings until 2013, it added.

The group has several residential and commercial projects in the pipeline with the immediate one being Menara Solaris in Kuala Lumpur, it said.

Publika, the retail gallery at Solaris Dutamas is expected to open mid-2011 offering 320,000 sq ft of net lettable space with 4,000 car park bays, it said.

The construction of 11 Mont’Kiara and 28 Mont'Kiara are on schedule, slated for completion in 2011 and 2013, respectively.

Sunrise is also venturing into the hospitality sector to operate service residences which would be a boon to existing home owners in generating yield occupancy for their properties through medium to long-term leasing, it said.

By Bernama

Exciting decorating ideas to inspire home owners

HOMEDEC, an exhibition for homeowners, will be held at the Penang International Sports Arena (PISA) in Relau from Friday to Sunday.

It is open to the public from 11am to 9pm daily.

HOMEDEC will be a source of inspiration for those who plan to renovate, refurbish or redecorate their homes.

It features new designs, the latest products and innovations for the home.

The highlight of the event is ‘Kids Living’ where there are ideas and settings to show off designs and solutions for a child’s room.

Celebrity designer Eric Leong will provide home tips while feng shui expert Henry Fong will be available to point homeowners in the right direction to maximise qi within their homes.

Tips on choosing the right wall paints will also be provided.

Visitors who spend a minimum of RM100 in a single receipt at the exhibition will be eligible to join a contest to win the grand prize of Cuisinart, KitchenAid and Omega Juicer products worth RM15,000 and also RM5,000 in cash.

A demonstration on making healthy juices will also be held.

Other prizes worth more than RM40,000 are up for grabs.

Visitors who spend a minimum of RM500 in a single receipt will also stand to win a RM20,000 cash reward.

For details on HOMEDEC, call 03-79824668 or 010-2528622 or visit www.homedec.com.my.

By The Star

Property laggards take centre stage

KUALA LUMPUR: Property counters climbed in active trade on Wednesday, spurred by news of impending “material” corporate exercises to be announced by UEM Land Holdings Bhd and Sunrise Bhd.

The two property firms - UEM Land and Sunrise - were suspended at the opening bell following separate requests made to the exchange. No other details were made available as at 5pm.

At the close, the FTSE Bursa Malaysia KL Composite Index inched up 1.03 points, or 0.07% to 1,507.60 points.

Market breadth was positive, with 503 gainers leading 280 decliners, while 307 counters were unchanged. Volume was 1.325 billion shares billion shares worth RM1.436bil.

Smaller property laggard were in the limelight. UM Land Bhd advanced 22 sen, or 13% to RM1.89, Glomac up 8 sen, or 4.9% to RM1.71, while MK Land added 1.5 sen, or 4% to 39.5 sen.

Shares companies linked to Perak state government - Maju Perak Bhd and Perak Corp Bhd - were up sharply in heavy volume.

Maju Perak soared 19.5 sen, or 45% higher at 63 sen on volume of 18.3 million shares, while Perak Corp surged 42 sen, or 36% to RM1.58 on volume of 6.59 million shares.

Shares in Pasdec and Mentiga, both linked to Pahang state government also had a good run. Pasdec jumped 12 sen, or 30% to 52.5 sen, while Mentiga climbed 13.5 sen, or 20% to 82 sen.

In overseas markets, Hong Kong’s Hang Seng rose 2% to 24,144 points, Korea’s main index was up 0.9% to 1,935 points, while in Singapore the Straits Times rose 0.7% to 3,227 points.

By The Star

Contractors renew appeals for stamp duty waiver

CONTRACTORS have renewed their appeals to the government to waive stamp duties on construction-related contracts.

Two years ago, the government said it wanted to simplify stamp duty assessment by revising the rate on all construction services agreements that do not require collateral to 0.5 per cent of contract value.

This covered consulting contracts, operation and maintenance contracts and facilities services contracts. Therefore, a RM10 million construction contract would attract a total stamp duty of RM50,000.

After appeals from trade bodies the Finance Ministry gave a temporary relief by revising the stamp duty to a flat RM50 fee. But this ends at the end of the year.

"The reversion ... will inflate construction costs," Master Builders Association of Malaysia (MBAM) president Kwan Foh Kwai told reporters after Works Minister Datuk Shaziman Mansor launched the third Malaysian Construction Summit in Kuala Lumpur yesterday.

Eventually, these extra but unnecessary costs will be passed on to the government and the public because all construction contracts are either government jobs or packages awarded by property developers in the private sector.

MBAM also appealed to the government to table the Construction Industry Payment and Adjudication Bill for enactment at Parliament. The draft Bill, which was given to the Attorney General's Chambers in early 2007, has yet to make its way to Parliament.

This proposed new law is meant to minimise payment defaults in the construction industry via timely and cost-efficient recourse to adjudication.

By Business Times

Property demand boost in Greater KL

Greater Kuala Lumpur/Klang Valley will need to house one million new residents by 2020, says the Economic Transformation Programme report

DEMAND for medium- to high-end properties in Greater Kuala Lumpur/Klang Valley (Greater KL/KV) is expected to increase to match regional peers, the Economic Transformation Programme (ETP) report said.

Greater KL/KV will need to house one million new residents by 2020, the report added.

Currently, the population of Greater KL/KV is about six million, contributing RM263 billion or 30 per cent to the nation's Gross National Income (GNI).

Over the next decade, Greater KL/KV is targeted to grow in population by 5 per cent annually and achieve a GNI growth of 10 per cent a year.

The economic aspiration for Greater KL/KV is to grow its GNI contribution to RM650 billion by 2020, the report noted.

The economic clusters that will contribute to growth is the Sungai Buloh land development, Sime Darby Vision Valley and Matrade centre as well as the Kampung Baru, Blackwater and Batu Kantomen mixed developments.

Others include the Kuala Lumpur International Financial District, commercial projects in Pudu and Cochrane, the Sungai Besi Bandar 1Malaysia mixed development, Media City Angkasapuri and Global Healthcare Metropolis.

The Greater KL/KV has been identified as one of the 12 National Key Economic Areas (NKEA) laboratories to drive rapid growth parallel with upgrading the city's liveability.

The report said strategic redevelopments such as the old Pudu Jail site, the old KTM railway station and Chinatown has the potential to create more iconic places within Greater KL/KV, adding to its liveability.

Across the 12 NKEAs, Greater KL/KV has the largest public sector funding requirement of RM58 billion or 34 per cent of the total investment requirement.

Greater KL/KV covers 10 municipalities, each governed by local authorities - Kuala Lumpur City Council, Perbadanan Putrajaya, Shah Alam City Council, Petaling Jaya City Council, Klang Municipal Council, Selayang Municipal Council, Ampang Jaya Municipal Council and Sepang District Council.

The ETP has outlined nine entry point projects that will be pivotal towards achieving the nation's aspiration for Greater KL/KV to achieve a top 20 ranking in city economic growth by 2020.

The aim is also to attract 200 new MNCs by 2020. Attracting 100 such firms will contribute about RM40 billion in annual GNI to Greater KL/KV.

There are now 1,600 MNCs based here, compared with 17,000 in Shanghai and 6,000 in Singapore.

By Business Times

ARK in RM100m Paroi job

PETALING JAYA: ARK Resources Bhd has entered into an agreement with Prop Development Sdn Bhd to complete the construction works worth RM100mil for the development of business/commercial units and buildings in Paroi, Negri Sembilan.

In a statement to Bursa Malaysia yesterday, the group said it would undertake the main construction works under the project on a design-and-build basis, carried out in two phases and expected to be fully completed in two years.

It added that the award of the contracts for the project was conditional inter alia upon the successful completion of ARK’s corporate restructuring exercise, re-quotation of ARK’s shares on the Main Market of Bursa Malaysia and upliftment of ARK’s PN17 status within 120 days from the date of the agreement, and relevant approvals from the authorities/parties to commence the development of the project.

By The Star

Framework for disused mines

PETALING JAYA: A solid commercial framework that embraces environmental concerns is necessary to transform disused mines into useful land, said Malaysian Chamber of Mines (MCOM) president Datuk Seri Mohd Ajib Anuar.


»We are targeting to produce a blueprint on the use of ex-mining land in 12 months to be forwarded to the Government« DATUK SERI MOHD AJIB ANUAR

Mohd Ajib said there was a common perception by the public that former mines were barren and useless.

“This is not true. There is definitely life after a land is mined off its tin and other minerals.

“Ex-mining land can be used for many commercial and community-driven activities,” he told StarBiz yesterday after the launch of a coffee table book titled Tin Story: Heritage of Malaysia by MCOM.

The book was launched in conjunction with the inagural International Conference and Exhibition On the Rehabilitation, Restoration and Transformation Of Mining Land, which started yesterday and ends tomorrow.

The conference was to gather experts in various fields from 15 countries to meet, brainstorm and look at commercial as well as sustainable ways to maximise the use of former mines nationwide.

“We can learn from each other’s proven ways to commercialise idle ex-mining land to benefit people in a profitable and sustainable manner,” he said.

Mohd Ajib said MCOM, together with various parties including the Kuala Lumpur Tin Market, Ministry of Natural Resources and Environment, Department of Minerals and Geoscience as well as external parties were collaborating on two fronts.

“We are targeting to produce a blueprint on the use of ex-mining land in 12 months to be forwarded to the Government for approval and the development of a solid commercial framework for those interested in converting ex-mining land into useful land,” he said.

There are about 200,000 hectares of disused mines across the country, of which two-thirds have been used while the balance one-third remain idle.

Mohd Ajib, who is also Kuala Lumpur Tin Market chairman, said it had been proven that former mines could be used for various agricultural activities, property development and as a place to harvest renewable energy.

“We are in talks with several experts to kickstart various projects on ex-mining land and some of the projects are expected to commence once we get the nod from the authorities,” he said.

Mohd Ajib said there was also opportunity to market the talent (in the use of former mines) to other countries.

“We also believe these projects will create a lot of employment for Malaysians locally and abroad once they have developed the required skills.”

By The Star

Winners see benefits in clinching FIABCI Malaysia Property Award

PETALING JAYA: To the casual observer, the annual International Real Estate Federation (FIABCI) Malaysia Property Award (MPA) might just be glitz and glamour, but previous victors have attested that winning has certainly helped boost their business in some way.


Yeow Thit Sang ... Winning the awards had a number of intangible benefits.

FIABCI-Malaysia president Yeow Thit Sang said winning the awards had a number of intangible benefits.

“It helps boost the winner’s branding and marketing. It also helps generate publicity to get their products to another level,” he said.

Perdana ParkCity Sdn Bhd marketing and sales director Susan Tan said when the company won the MPA for best residential (low-rise category) for its Adiva Parkhomes at Desa ParkCity in Kuala Lumpur, prices of the houses shot up.

“We noticed some price appreciation for Desa ParkCity properties in the secondary market with Adiva enjoying as much as 30% additional increase in prices after the awards were announced,” she said.

The following year, Perdana ParkCity’s Adiva bagged the FIABCI Prix d’Excellence Awards 2010 for the residential (low-rise) category in Bali.

“Obviously, winning did put Desa ParkCity in the spotlight and we have benefited from the exposure as more purchasers and investors are keen on other offerings (that we have) available,” said Tan.

Sunrise Bhd assistant general manager for branding and community development, Anne Tong, said winning at FIABCI was like “icing on the cake” for the company.

“Accolades from prestigious professional bodies such as FIABCI builds credibility for the Sunrise brand, which will in turn instill customer confidence in our products and services,” she said.

Tong said winning at FIABCI helped to elevate awareness to purchasers on its product quality and service excellence.

“Winning a competitive award confers peer acknowledgement that we are on track in our mission to deliver sustainable value to customers.”

Sunrise has won accolades at FIABCI for projects such as Mont’Kiara Palma (1997), Mont’Kiara Sophia (2001) and Mont’Kiara Damai (2005).

Selangor Dredging Bhd communications and corporate affairs manager Lina Othman said among the benefits of winning a FIABCI award was that it gave credibility to the development as it was recognised to be one of the finest in the country.

“It also gives credibility to the company for being able to come up with an award-winning building. This of course helps with marketing of other developments as it is a testimony of the company’s commitment and capability in developing quality homes,” she said.

Selangor Dredging won the MPA in 2009 for its Park Seven development (residential high-rise). The project was subsequently runner-up at the Prix d’Excellence 2010.

FIABCI Malaysia will be organising the 2010 MPA on Nov 11 in Kuala Lumpur with Malayan Banking Bhd as the official sponsor. A total of 10 categories will be contested.

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

PKNS to spend RM140.7m for Bukit Botak

The Selangor government, through the Selangor State Development Corporation (PKNS), will spend RM140.7 million to develop Bukit Botak.

Menteri Besar Tan Sri Abdul Khalid Ibrahim said the development would involve 1,422 single-storey terrace houses which would be offered to the landowners for RM99,000 each.

"If the landowners don't want the houses, PKNS will buy them from the landowners at RM170,000 per unit," he said after the project's ground breaking ceremony in Selayang today.

The houses bought by PKNS would then be offered to the public at a price based on the size of land per unit, he added.

"The project is part of the economic stimulus package introduced by the state government which among others focuses on redevelopment of stalled housing projects like Bukit Botak," Khalid said.

He said the project was being carried not for profit but a charity.

The Bukit Botak development project involves 201 acres and a resettlement of 2,300 families who have been waiting for over 20 years since the project began in 1986.

The houses are expected to be ready for occupation by June 2012.

By Bernama

DRB-HICOM seeks revenue balance

DRB-HICOM Bhd plans to improve the balance of revenue contribution from its services, automotive and property businesses over the next five years as it seeks to expand.

Currently, its motor vehicle business makes up some 57 per cent of revenue, followed by its banking, insurance and power plant maintenance services at about 40 per cent.

Property makes up less than 2 per cent of revenue now, but DRB-HICOM wants to boost this to 20 per cent in five years.

"I never like to put all my eggs in one basket," group managing director Datuk Seri Mohd Khamil Jamil told reporters at a briefing in Kuala Tahan, Pahang, yesterday.

DRB-HICOM, controlled by Tan Sri Syed Mokhtar Al-Bukhary, reported net profit of RM472 million in the financial year to March 31 2010, 29 per cent down from the year before mainly because it gained almost RM600 million from an asset sale last year.
Revenue hit a record of RM6.3 billion.

The group plans to launch properties with a total gross development value of RM9 billion over 10 to 15 years. This will be a mix of residential and commercial properties.

It has some 607ha near Mount Austin, Johor, which will be developed into a new township.

"There are still pockets of land in DRB which are very prime," Mohd Khamil said. They include a piece of land in Taman Wahyu in Jalan Tun Razak, Kuala Lumpur, and tracts of land in Shah Alam, Selangor.

This month, it plans to launch Glenmarie Gardens, a high-end bungalow project.

As for its motor vehicle business, it aims to sign a definitive agreement with Europe's Volkswagen AG (VW) next month.

VW had signed in August a memorandum of understanding with DRB-HICOM to produce VW cars from 2012 at the group's plant in Pekan, Pahang.

"The final negotiations are going on well and the parties are finalising the terms," he said.

Eventually, the deal may include the export of VW cars to Asean countries, among other things.

DRB-HICOM is also still looking for a foreign partner to buy 30 per cent of its Islamic lender, Bank Muamalat Malaysia Bhd. It holds 70 per cent of the bank currently.

It was in talks with five foreign parties and one local firm, but the talks fell through amid the global financial crisis last year.

Asked about the weak performance of its stock, Mohd Khamil said it could be due to the fact that the group was too diversified.

It is also classified under the industrial sector on Bursa Malaysia although services have become a big part of its business.

"If shareholders understood the nature of our business, the share would definitely escalate and show their true value," Mohd Khamil said.

Apart from Syed Mokhtar with 55.92 per cent, its other main shareholders are the Employees Provident Fund with 9.11 per cent and Khazanah Nasional Bhd with 5.13 per cent, according to its 2010 annual report.

By Business Times

Most Malaysians cannot afford the high price of property

With prices of terraced houses in the Klang Valley and Penang having appreciated beyond the regular RM300,000 to RM600,000 range to close to and some even surpassing RM1mil, it is not surprising to find many average Malaysians who are rather hapless or even lost as to what and where to buy their house.

There are really not many choices available to them unless they don’t mind moving further away to other suburban addresses where they would have to travel longer distances. But if they still choose to stay near the conveniences close to the city centre, most of them will have to settle for much smaller units or apartments with the price that they can afford.

To maximise their land use, developers have resorted to building high-rise dwellings instead of landed houses which account for the short supply of such housing these days.

A shortage of land available for development can be singled out as one of the factors for the sharp increase in land cost and property prices.

Whatever large tracts of land available have already been snapped up and what’s left are mostly smaller plots.

In Kuala Lumpur, land prices have appreciated even more sharply and the recent sale of a piece of land for over RM7,000 per sq ft has raised alarm among some consumer groups and industry players.

They worry that the high price transacted for the land will be used as the bargaining power for other land owners to push their land prices upwards in the surrounding areas.

This will inevitably be an unhealthy prelude to an overheating in the property market as land is the basic commodity in a property development process. When the price paid for a piece of land escalates way beyond the market norm or the last transacted price, it has actually moved ahead of market fundamentals.

The question is who then will have to bear the high cost at the end of the day. Certainly it will not be the developers as they will factor into their total project costing and recoup the cost by pricing the property they build higher.

And if the property is not for sale but for leasing, the rental rates can also be expected to be higher. Although property buyers are not directly or immediately affected by the high land cost, they will also have to share part of the burden when the prices of goods and services are fixed higher (as the business operators who rent the space will factor the high rent into their pricing.)

If we are worried of a potential property bubble, it is important to keep a close watch on the availability of land supply to keep prices of land in check.

Opening up new corridors of land for development is an effective and speedy measure to ensure adequate land supply.

The other option is to encourage redevelopment of dilapidated parts of the city or old buildings and add value to them.

The Government’s plan to redevelop the 160ha Sungei Besi airport and the 1,320ha Rubber Research Institute land in Sungei Buloh should help to ease the land-scarcity problem.

The initiative should be accorded a top priority and, if possible, a dedicated agency is set up to oversee the whole planning and development process for these large parcels of land, taking into account the real needs of the people.

This will ensure better integration of public transport services and other infrastructure, housing and other commercial property needs that are more long-term and sustainable.

Given the huge need for more affordable housing in the Klang Valley, especially homes priced between RM200,000 and RM350,000, this will be the golden opportunity to plan for such housing projects. Hopefully at least 30% of the land for housing development will be allocated to affordable housing for all eligible Malaysians.

It is indisputable that real estate is an important economic sector, accounting for 50% of the country’s wealth. But the cap on the sector’s growth could be the relatively lower earning and purchasing power of Malaysians compared with those in other high income countries. For the industry to leapfrog to another level of growth, the people’s purchasing power has to grow faster or at least in tandem with the rising property prices as we will need investors who can afford to pay for the high-end properties that are to be built.

The Government’s iniatitives to turn Malaysia into a high income economy will create the platform for the people to earn higher per capital income to support their higher purchasing power.

Expanding the pool of buyers who have the means to absorb the high-end property that are being churned out by developers now will hopefully create a more sustainable property market – one where demand matches supply.

Otherwise the market will have to depend on foreign buyers who can afford to pay for the high-end property.

Deputy news editor Angie Ng believes developers, especially those who own large tracts of land and are involved in major township development, have a moral responsibility to offer a more balanced portfolio of different range of housing projects, to help cool the market from overheating.

By The Star

Mayland sees demand for city condominiums

Hong Kong-based property developer Malaysia Land Properties Sdn Bhd (Mayland) is very bullish about demand for high-rise condominiums in the city.

Based on the positive take-up rates of their properties so far, director Andrew Chiu says the interest in certain categories of city condominiums is expected to remain sustainable this year and next.

He says interest will be on properties of about 1,000 sq ft and below. More than half of its Royal Regent development in Jalan Kuching is sold. The only ones left are the bigger units with a built-up of 1,500 sq ft and above. The smaller units ranging from 900 sq ft to 1,200 sq ft have been sold.

“Even before we launched, our previous buyers have taken up the smaller units,” he says. A typical Mayland investor will have two to three projects already and these buyers bought nearly 70% of Royal Regent, with some of them buying two or three units at a time, he says.

Royal Regent is the third project in the Jalan Kuching location. The other projects in that 20-acre site includes Sri Putramas 1, Sri Putramas II and Royal Domain.

Sri Putramas I was the first project to be launched in that location in 2002. The units, with a standard size of about 1,000 sq ft, had prices starting at RM140,000.

Mayland subsequently launched Royal Domain at about RM200 per sq ft with units priced at about RM240,000. Today, Royal Domain, is selling at about RM320 per sq ft.

Its latest launch, Royal Regent, is priced at about RM400 per sq ft, says Chiu, adding that the location will have a total of about 3,500 units, with the completion of phase four. Royal Regent. which is phase three, is expected to be completed in 2013.

Mayland is also building Regalia@Jalan Sultan Ismail with Bina Puri Holdings Bhd, one of the largest construction groups in the country. The 38-storey has a gross development value of about RM600mil. It is scheduled for completion by early 2011.

“We are positive about demand for units located in the Golden Triangle. Land is a scarce commodity and if the Malaysian government can get the public transport system off the ground, this will add further value to the projects in the city,” Chiu says.

He says property development has become so sophisticated in his home country in Hong Kong that even with a 2,300 sq ft piece of land, it is possible to put up a 40-storey building with no car parks.

Buoyed by demand, Mayland is also embarking on another high-rise project in Ampang, just behind Ampang Point shopping centre. Known as The Elements@Ampang, the freehold service apartment project will have a gross development value of RM650mil. It sits on 2.6 acres adjacent to another high-rise project known as GBC.

The Elements will be developed by Land & General Bhd (L&G). Mayland is the largest shareholder in L&G. Besides Ampang Point shopping centre, the other closest mall is Great Eastern Mall.

The Elements will be competing with Mah Sing group’s M Suites and Brunsfield’s EmbassyView. While The Elements is located a little way off Jalan Ampang, M Suites and EmbassyView are located on Jalan Ampang itself.

L&G MD Low Gay Teck says there are several international schools in the vicinity of The Elements. These are Fairview International School, Sayfol International School, International School of Kuala Lumpur and Mutiara International School.

It will be served by Gleneagles Intan Medical Centre, Ampang Puteri Specialist Centre, Pantai Indah Hospital, Hospital Ampang, Ampang Medical Centre and Prince Court Medical Centre.

Prices at The Elements begin at RM350,000 for units with a build-up of 625 sq ft. The largest built-up is 1,550sq ft.

Low says the company is looking to buy land for residential developments with plans to sell the units at RM400 per sq ft and above.

“Cost of construction and inflation will only go up. As the Government moves along in their plans to remove subsidies, cost of construction, building materials and labour will only go up. Land prices will not be coming down. so prices will just have to keep adjusting upwards,” says Low, adding that there is a demand for land in light of expected future increase in prices.

He says the demand for certain types of properties have also led some developers to price their units at RM5mil in a RM2mil-a-unit area.

As for Mayland and companies within the group, Mayland advertising and promotions manager Ian Tay says the group together with L&G have a good following of buyers.

“Both The Elements and Royal Regent will appeal to different categories of investors. Most of those who buy into Royal Regent are upgraders. They have probably units in Sri Putramas I and II, and maybe even Royal Domain and they see the opportunity to buy into Royal Regent at RM400 per sq ft because they know the city will continue to expand. The development in the Matrade area by the Naza group is after all just a few minutes drive away,” says Tay.

Over at Elements, with prices beginning at around RM700 to RM750 per sq ft, most buyers would be investors. Tay says many may not be able to afford to stay in the city but they will want somewhere close to the city. “Ampang is not too far away from the KLCC City Centre, so the appeal is there,” he says.

By The Star

Growing Sunrise’s earnings

An artist impression of the oasis in the Quintet project.

KUALA LUMPUR: Sunrise Bhd is expected to launch at least four major property projects with gross development value (GDV) totalling RM2.7 billion next year and anticipates to register better results for FY2011 ending June 30, given its large unbilled sales of RM1.2 billion.

Its executive chairman Datuk Tong Kooi Ong said among those slated to be launched would be the ‘MK20’ mixed development project in mid-2011 with GDV of about RM1 billion, stressing that the project nestled in Mont’Kiara would be multi-phased, offering different kinds of products.

“MK20 will meet the demands of the market,” he told a press conference after the group’s AGM yesterday when asked to elaborate on the project.

Tong also said Sunrise would likely launch the Menara Solaris office buildings in the city centre early next year and that it was deliberating on whether the project with a GDV of RM480 million would be sold en-bloc or in the market.

“We are also very sensitive to market perception at the moment, especially for commercial properties after the recent 2011 budget,” said the executive chairman, while not ruling out that Menara Solaris could take off sooner.

Menara Solaris is a commercial development with 587,000 sq ft of net saleable area of strata office space and 20,000 sq ft of retail space. It is located off Jalan Sultan Ismail, behind the Renaissance hotel.


Tong says the success of Sunrise Bhd’s Canada project marks the start of the developer’s Stage 3 growth.

According to Tong, Sunrise was also hoping to launch its landed and gated residential development in Kajang before end-2011. The project, located near The Mines Resort, is situated on 58 acres of land and is expected to generate GDV of RM500 million.

On developments in Canada, Tong pointed out it was expected to launch the second phase of its ‘Quintet’ development in Richmond, which would contribute about 60% of the project’s total GDV of C$400 million (about RM1.2 billion).

He said the take-up rate for Quintet’s phase 1 was much faster than expected with nearly 300 units “literally all sold out” following its launch last month.

“We are basically rushing to launch the the second phase sometime in February or March 2011. The second phase is slightly bigger, closer to 450 units,” he said, adding that Sunrise currently had total unbilled sales of RM1.2 billion.

Based on the concept of an “urban oasis”, the majority of the units in Quintet are one and two-bedrooms with sizes ranging from 500 sq ft for a one-bedroom unit to over 1,500 sq ft for penthouses and townhouses.

Commenting on the outlook for the property market, Tong said he explained to shareholders there was no overbuilding per se in terms of the total number of units in Mont’Kiara, but acknowledged there could be some overbuilding in the type of units that cater more to the general segments of the population.

“There is an oversupply in certain types of condos, but there is no oversupply overall,” he said.

“Clearly, Malaysia is a growing population with a lot of young people who need homes. They move out from their parents’ homes when they get married. It is a question of affordability. It is the type of properties that the market demands,” he elaborated.

A property observer said that smaller-sized condominium units in general have fared well in the recent property upturn, due to affordability issues and rising demand from young families. The observer noted that prices of small-sized condominium units at Sunrise’s Solaris Dutamas have risen to around RM620 psf, compared to RM380-RM400 psf when they were first launched in 2006.

On its financial performance, Tong said the group was confident of registering sustainable revenue and profit for FY2011 and would “probably do better” than the results in FY2010. Sunrise posted a net profit of RM133.95 million on the back of revenue of RM590.74 million for FY2010.

“We have a basket of products and plans coming that will sustain us,” noted Tong.

He also said Sunrise could have strong returns riding on “Stage 3” of its growth development plans starting 2010, where it offered multiple-products and multiple-locations with a focus expanding beyond Mont’Kiara.

Sunrise’s share price yesterday added five sen to close at RM2.24 with 1.35 million shares traded. The counter has risen 8.74% year-to-date.

By The EDGE Malaysia (Posted on 29Oct2010)

Budget hotels urged to shape up to thrive

Malaysia's budget hotels will not have much of a future if they do not improve their facilities and services as foreign rivals are about to make their presence felt.

Come 2012, foreigners are expected to be allowed to operate budget hotels in the country, said Malaysian Budget Hotel Association (MBHA) vice-president for training and research Mohamed Hassan Hamzah.

"Our local budget hotel owners need to be more innovative in terms of marketing and promotion to ensure their survival," he said.

Mohamed Hassan cited the proposed liberalisation of services trade tabled in the middle of last year during the Asean Framework Agreement on Services.

Under the proposal, foreigners will be able to own up to 30 per cent of a budget hotel in the country by 2012 and 49 per cent in 2015. It involves one-and two-star hotels. However, this has yet to be decided.

There are about 6,000 budget hotels in Malaysia.

"Currently, only 1,500 budget hotels are registered with MBHA, and the number ought to rise," Mohamed Hassan told reporters at a press conference in Shah Alam recently.

The budget hotel business here has huge growth potential as Malaysia is a major tourism destination in the world.

Under the Economic Transformation Programme, the government has big plans to develop the industry further.

"If we want tourists to come to Malaysia and stay at our budget hotels, owners can help by providing good facilities and services."

Mohamed Hassan observed that budget hotels here are normally 50 per cent to 60 per cent full during weekdays and could be fully occupied on weekends. Although occupancy rates have risen, many will not survive if they do not upgrade their services.

Tourism is the country's second highest earner, after manufacturing, accounting for 12.3 per cent of the economy last year.

By Business Times

Budget for KLIA 2 increased

Malaysia Airports' board of directors has mandated RM2.5 billion for the overall construction cost of Kuala Lumpur International Airport 2.

Malaysia Airports Holdings Bhd (MAHB) is ready to spend some RM500 million more than the earlier budgeted RM2 billion for total construction cost of Kuala Lumpur International Airport 2 (KLIA 2).

Prime Minister Datuk Seri Najib Razak had said in his second stimulus package announcement in March last year that the new permanent low-cost carrier terminal (LCCT) would cost RM2 billion.

The airport operator said yesterday that its board of directors had mandated a sum of RM2.5 billion for the overall construction cost of KLIA 2.

MAHB chief financial officer Faizal Mansor, however, stressed that the RM2.5 billion budget was not final.
"While we will try to keep it below the budget, it is important to us to get the terminal completed well," he said at a briefing to announce the group's third quarter results in Sepang, Selangor.

While some big contracts have been dished out, Faizal declined to reveal how many more would be awarded.

KLIA 2 is now being planned to have double the initial size of 120,000 sq m.

While the new terminal is only half the size of KLIA's main terminal building, it is designed to have more than double the commercial space of the main terminal building.

After the recent completion of a retail optimisation plan at the KLIA main terminal building, about 7 per cent of the building is now commercial space compared to KLIA 2, which is expected to have about 20 per cent commercial space.

"What this means is that while the cost of running KLIA 2 will be half that of the main terminal building, it will be more viable, more sexy," Faizal said.

On its results for the third quarter ended September 30 2010, MAHB said net profit was down by almost 26 per cent. This was largely due to accounting losses it had to recognise in that period because of the adoption of the Financial Reporting Standard (FRS) 139.

MAHB made RM61.8 million net profit compared with RM83.4 million a year ago. The loss arising from adopting FRS 139 was about RM30 million.

Part of this loss came from recognising concessions payable at fair value for the Sabiha Gokcen International Airport in Istanbul, Turkey.

Year to date, the group recognised RM54 million accounting losses from the associate. MAHB has projected that the full-year figure will touch RM80 million.

Group operating profit in the period reviewed was up 12 per cent to RM128.3 million compared with RM114.4 million in the previous corresponding period.

By Business Times

Mortgage cap decision soon

Bank Negara Malaysia may make it harder for Malaysians to buy more than two houses as it seeks to stem speculative buying that is pushing up property prices.

Sources said the central bank would be meeting with banks next week to discuss plans for a mortgage cap whereby loans would be limited to a portion of the property value.

"The expectation is a cap of about 70-80 per cent. We think a directive will be issued to cap," said two sources with knowledge of the meeting.

Earlier, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said it was prepared to take pre-emptive action and that it has wide-ranging instruments to prevent a property bubble.

"We want to promote house ownership, but we want it to be done in an orderly manner and we don't want speculative activities," she told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

She acknowledged that there may be pockets of bubbles forming in parts of Malaysia, but believes Malaysian banks are dealing with this through their own risk management process.

Areas like the Klang Valley and Penang have reported strong property demand.

In June this year, some 147 double-storey terrace houses just outside of Kuala Lumpur priced from RM1.75 million each were sold out in just five hours.

Rising property prices have been fuelled by low borrowing costs, the continuing promotions by developers and expectations of a recovering economy.

More money is also flowing into Asia from developed economies where interest rates are low as investors seek higher returns elsewhere.

But this is not unique to Malaysia. Regulators in China, Hong Kong and Singapore have imposed measures to cool their property markets.

Zeti also said that "massive" financial literacy programmes would be rolled out as a pre-emptive measure.

These would be aimed at those aged below 30 to help them better manage their finances at the start of their careers.

By Business Times

Sunrise to launch RM3b worth of projects next year

PROPERTY developer Sunrise Bhd will launch about RM3 billion worth of property projects next year to boost profit and revenue for the year ending June 2011.

The projects are mainly located in the Klang Valley as well as a mixed residential development known as Quintet on 1.94ha in Richmond, a suburb of Vancouver in Canada.

Sunrise will launch Phase Two of Quintet within the first quarter of next year. It will comprise 450 residential units with a gross development value (GDV) of C$400 million (RM1.1 billion).

Quintet's first phase of 300 residential units were sold out when it was launched this year.
"We have been seeking property development work overseas and outside Mont' Kiara to ensure sustainable projects to push for further growth," Sunrise executive chairman Datuk Tong Kooi Ong said after its annual general meeting in Kuala Lumpur yesterday.

Locally, the company will launch Solaris Tower located behind the Renaissance Kuala Lumpur Hotel off Jalan Sultan Ismail. It is a two-block strata office development on 1.8 acres of land with a GDV of about RM480 million.

Meanwhile, Sunrise's residential projects that will be launched next year are mixed developments comprising condominiums, serviced apartments, a retail area known as MK 20 with a GDV of RM1 billion, and a gated residential development at The Mines with a GDV of RM500 million.

"We have a good basket of products for the next launches, we will make sure market demand is met," said Tong.

For the year ended June 30 2010, Sunrise reported a 14.2 per cent decline in net profit to RM133.95 million from RM156.18 million previously.

Revenue dropped 26.5 per cent to RM590.74 million against RM803.92 million before. Earnings per share was 27.04 sen.

Sunrise said the lower full-year revenue was due to the completion of Mont' Kiara Meridien and substantial completion of 10 Mont' Kiara and Solaris Dutamas in the previous financial year.

The residential area construction of 11 Mont' Kiara and 28 Mont' Kiara were on schedule and slated for completion in 2011 and 2013 respectively, it added.

By Business Times

Plenitude plans RM400m small-scale projects

PLENITUDE Bhd plans to launch several small-scale property projects worth as much as RM400 million over the next eight months.

The builder is taking advantage of a run-up in property prices to launch the seven residential projects that will cover areas in Klang Valley, Johor and Penang.

"These properties will be launched during this financial year (ending June 30 2011), and we expect positive contribution to the bottom line over the next few years," said executive chairman Elsie Chua after the company's extraordinary general meeting in Kuala Lumpur yesterday.

The company is also planning to launch a big-scale project in Penang in two years' time, which has an estimated gross development value of RM230 million.
"The development will mainly comprise landed residential units, of course. There will be some condominiums as well," said Chua.

The company, which has more than RM75 million in cash as at June 30 2010, said it will use it as a warchest to fuel expansion, and as such, it has no immediate plans to return more cash to shareholders.

Plenitude currently has a policy of returning between 20 and25 per cent of net profits as dividend to shareholders.

"That's what the shareholders were asking for, but we need this cash because we know we want to expand. If we cash it out, instead of having our own cash, we start borrowing, then it's bad," said Chua.

Zukarnine Shah, a director, added that the deciding factor for not returning the cash as dividend is the company's sustainability.

"If we issue out as dividend, shareholders will be happy for sure, but can we sustain? Will we have enough working capital or reserves to acquire valuable land to expand? So, we are trying to keep a balance, but of course, balance is subjective," Zukarnine said.

Chua said its landbank, currently at about 720ha, can keep the company busy for the next 10 years.

By Business Times

i-REIT from GCC may list next year

BURSA Malaysia Bhd expects an Islamic real estate investment trust (i-REIT) from the Gulf Cooperation Council (GCC) to be listed on the exchange next year, adding to its three existing i-REITS.

It did not identify the issuer, but market speculation is that that it may be Qatar-listed property group Ezdan.

News reports as early as May last year indicated that Ezdan was interested in listing an i-REIT made up of Qatar-based assets on Bursa.

"I don't think they (the issuer) have decided what they want to put in yet because it is a very big company. In their market, they're one of the top 10 listed companies. The reason they're coming over is because they don't have a REIT framework," Bursa's global head of Islamic markets, Raja Teh Maimunah Raja Abdul Aziz, told reporters after speaking at the Global Islamic Finance Forum in Kuala Lumpur yesterday.

Meanwhile, a US-dollar exchange traded fund (ETF) by BNP Paribas Investment Partners may be listed here by year-end or in the first quarter next year. The ETF is pending the Securities Commission's approval, she said.

By Business Times