YTL's Q1 net profit jumps to RM279m

YTL Corp Bhd's first-quarter net profit for the period ended September 30 2010 jumped by 34.4 per cent to RM278.9 million over RM207.5 million recorded last year.

Revenue for the first three months of the year ending June 30 2011 improved by 12.1 per cent to RM4.4 billion compared with RM3.93 billion previously.

The group told Bursa Malaysia yesterday that the increases in revenue and profit were substantially due to better performance in its multi-utilities business segment and higher recognition from its offshore property development projects.

In a statement, YTL group managing director Tan Sri Francis Yeoh said it had made a strong start to the current financial year.
"We expect the rest of the year to be promising," he said.

Yeoh said the launch of the Yes 4G mobile Internet service with voice last week and creation of its ecosystem were geared towards spawning further innovation and investment.

On other fronts, he said the group had earlier this week announced the restructuring of its property development businesses.

The restructuring was part of a wider ongoing rationalisation exercise to reorganise YTL's property, retail and hotel assets, and house them within the relevant business divisions.

This started last year with the repositioning of Starhill REIT in Malaysia as a global hospitality REIT, involving the disposal of the trust's retail assets to Starhill Global REIT in Singapore, which was completed in June 2010.

"Starhill REIT will now focus fully on hotel and other hospitality-related assets, both in Malaysia and abroad, whie the concentration of our property development assets under one umbrella is targeted at transforming the division into an international property developer," he said.

By Business Times

Sunway, SunCity in RM4.5b merger

Tycoon Tan Sri Jeffrey Cheah plans to merge the construction and property firms he controls, Sunway Holdings Bhd and Sunway City Bhd (SunCity), in a deal worth RM4.5 billion to compete more effectively at home and in the region.



The move, which is likely to create Malaysia's fourth largest property company by market size, is the third property-related merger to be anounced this month.

Earlier this month, UEM Land Holdings Bhd said it wanted to merge with Sunrise Bhd to create the country's largest property group with a market size of over RM9 billion.

On Tuesday, IJM Land Bhd and Malaysian Resources Corp Bhd announced their merger plans to become the second largest group.

"This merger gives us the benefit of size, synergy and branding," Cheah, the Sunway group's founder, told reporters at a press conference yesterday.

He said the timing for such an exercise was good, with the share prices of both companies having come up to "a very equitable" level.

The two firms' assets and liabilities will be acquired by a new company, Sunway Sdn Bhd, which will be listed in their place on Bursa Malaysia.

The deal, including the listing, is expected to be completed by the middle of next year.

The merged entity will potentially have a market capitalisation of RM3.5 billion, combined revenue of RM3.3 billion and total assets of about RM8 billion.

It will also have a presence in 12 high-growth markets in the region and over 9.7ha of landbank, Cheah said.

He dismissed a suggestion that the merger was a move to help it stave off any potential takeovers, saying it had more to do with right market conditions and the need to scale up for size.

"I am not fearful of being a takeover target," he remarked, adding that "when you have a bigger-sized company, you can take on bigger projects".

The two firms' businesses will be acquired by Sunway at an equivalent of RM2.60 for each Sunway Holdings share and RM5.10 for each SunCity share.

Sunway will pay with RM900 million cash and Sunway shares, with free warrants attached.

After the purchase, Sunway Holdings and SunCity will undertake a capital repayment exercise to distribute the proceedings to shareholders.

Cheah, who now owns 46 per cent of Sunway Holdings and 44 per cent of SunCity, said he would retain a controlling stake of about 44 per cent in the new entity.

The second largest shareholder will be The Government of Singapore Investment Corp, with a 12 per cent stake.

Shareholders will have to approve the merger at an extraordinary general meeting, at which Cheah will refrain from voting.

Sunway Holdings and SunCity yesterday reported third quarter net profits of RM48.5 million and RM138 million, respectively.

"Going forward, (with the merged entity), we're still confident of double-digit growth (in financial performance)," Cheah said.

Trading in both the stocks, which have been suspended since yesterday pending the merger announcement, will resume today.

Sunway Holdings was last traded at RM2.25 and SunCity at RM4.49.

By Business Times

Sunway Holdings, SunCity in RM4.5bil merger deal

The Sunway Group chairman Tan Sri Jeffrey Cheah(left) and Sunway Holdings Bhd managing director Yau Kok Seng (right) at a briefing on Wednesday to announce the merger. Starpic by Chan Tak Kong

PETALING JAYA: Sunway Holdings Bhd and Sunway City Bhd (SunCity) have received a takeover offer from Sunway Sdn Bhd (Newco), a company controlled by Tan Sri Jeffrey Cheah (pic), for RM4.5bil in cash and share swap.

The exercise entails Newco offering RM2.60 per Sunway share, RM1.50 per Sunway warrant and RM5.10 per SunCity share and RM1.29 per SunCity warrant.

The offer prices are to be satisfied via the issuance of an equivalent value of Newco shares representing 80% of the offer prices and the remainder 20% in cash. The offer would include Newco issuing new warrants for free to all shareholders of SunCity and Sunway on the basis of one Newco warrant for every five Newco shares.

Based on SunCity and Sunway Holdings' last traded prices of RM4.49 and RM2.25 respectively, the offer price represented a premium of 13.6% and 15.5% respectively.

This transaction will see three key advantages, namely size, synergies and branding, Cheah, who is also the chairman of the Sunway group, said in a briefing to announce the corporate exercise.

The immediate and obvious advantage of this merger is a bigger and better capitalised entity. Once the offer is accepted and approved, the merged company will have a potential market capitalisation of over RM3.5bil, he said, adding that based on analysts consensus, the merged entity would have combined total revenue of more than RM3.3bil.

As at June this year, total assets for both companies stood at more than RM8bil.

To a question, Cheah said the merger was due to right market conditions. He said the timing was good and the share prices of both companies had come to an equitable level. It's a good time to do it (merging).

Asked if the move was to prevent a takeover by others, Cheah said the group was not fearful of being taken over.

Size brings us opportunities. We will have access to a larger market and the ability to bid for projects with higher value, particularly in international markets, he said.

Following the corporate exercise, both Sunway Holdings and SunCity will be delisted. Subsequently, Newco will seek a new listing on Bursa Malaysia subject to obtaining the required approvals.

Newco, owned by Cheah and his daughter Sarena Cheah, will consolidate all business operations of both companies under one listed entity, Sunway Bhd. The exercise is expected to be completed by mid-2011.

Following the acquisition, Sunway Holdings and SunCity will proceed to distribute Newco shares, cash and Newco warrants to its respective shareholders through a capital reduction and capital repayment exercise.

Cheah and Sarena currently own direct and indirect stakes of about 43.68% in SunCity and 46.53% in Sunway Holdings. Their stake is around 44% in the merged entity.

Sunway Holdings reported a net profit of RM48.5mil, or 8.4 sen per share, in the third quarter ended Sept 30 on the back of RM489mil in revenue, driven by the construction, property development and trading and manufacturing divisions.

Sunway Holdings said its quarterly results included a RM4.9mil gain arising from the adoption of FRS 139. For the nine months ended Sept 30, Sunway Holdings posted a net profit of RM136.99mil on revenue of RM1.49bil.

Cheah said the group had been growing quite nicely. However, he said the rate of growth might not be huge due to the larger base.

In the notes accompanying its financial results, Sunway said the construction division was expected to record impressive profits backed by a healthy outstanding order book of RM2.3bil of which about 60% are overseas construction contracts.

The group also expects sustainable activity in the local construction scene in the next few years with the pick-up in private development activities as well as from the recent announcement of the Budget 2011 and Economic Transformation Programme.

The property development division has unbilled sales of RM400mil from existing property projects, both locally and overseas. This division will continue to contribute positively to the group's earnings in the current and coming year with income from upcoming property launches, it said.

By The Star

JV to develop RM700m township

KUALA LUMPUR: Syarikat Majuperak Bhd, a wholly-owned unit of Majuperak Holdings Bhd, has teamed up with Xtreme New Sdn Bhd to develop a mixed township worth RM700mil in Batu Gajah, Perak.

Its chairman, Datuk Seri Raja Ahmad Zainuddin Raja Omar, said the project, involving about 240 ha, was expected to be completed within 10-15 years.

For a start, the company plans to develop a theme park with foreign companies, he said at the joint-venture signing ceremony between both companies here yesterday.

He said currently, the company was in talks with several foreign companies from Australia and China to develop the theme park.

The talks are expected to be concluded in a couple of weeks, he said.

Raja Ahmad Zainuddin said the ground-breaking ceremony was expected to be held early next year.

By Bernama

Analysts positive over IJM Land-MRCB merger

Combined entity will have stronger balance sheet, appeal to foreign investors

PETALING JAYA: Analysts are generally positive on the merger proposal between IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) although details of the proposal have yet to be revealed.

On Tuesday, IJM Land and MRCB signed a memorandum of understanding pursuant to the proposal that only revealed the merger would involve a share-swap whereby the shares of IJM Land and MRCB would be exchanged for shares in a new incorporated company.

The exchange price is RM3.65 per IJM Land share and RM2.30 per MRCB share. Kenanga Research said the offer price for MRCB and IJM Land was pegged at 2.6 times and 2.48 times price-to-book value respectively.

It said this was fair considering that the combined entity would have a market capitalisation of RM7bil and would become the second largest property company with improved liquidity and market positioning that would appeal to foreign institutional investors.

Kenanga said the new company would essentially be a property company and would look to divest its other businesses like infrastructure, concession and construction.

The research house said it would also be a formidable entity with a stronger balance sheet and would stand a better chance in securing a meaningful role in the development of the Employees Provident Fund's (EPF) Rubber Research Institute land.

We advise investors to subscribe to the offer and convert their shares to the new company shares. Only then will they be able to participate in the new growth under the might of the combined entity, Kenanga said in a report yesterday.

OSK Research viewed the proposed merger as synergistic and complementary to both property businesses given the different strengths of MRCB and IJM Land.

At present, MRCB's property development activities are mostly in the commercial sector and concentrated in the Klang Valley with its flagship project, KL Sentral, commanding a gross development value of over RM12bil.

IJM Land's strength is in its township and residential developments in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak.

OSK Research said the RM2.30 offer price for MRCB was somewhat fair but not quite attractive due to the small premium and upside from its last closing price. It said the offer price only represented a 7% and 12.2% upside from the last closing price and OSK Research's previous fair value respectively.

For IJM Land, Hwang-DBS Vickers Research said at RM3.65 per share, the deal appeared attractive valuing IJM Land at 2.4 times net tangible asset.

It said this was an attractive price to migrate to a new company that would have an estimated market cap of RM7.2bil, 9,023 acres of land bank, RM3bil asset size and RM2bil revenue.

While details of IJM Corp Bhd's stake in the new company are sketchy, Hwang-DBS understood it would be substantial to enable it to consolidate earnings.

It said IJM Corp would convert the RM400mil nominal value of IJM Land redeemable convertible unsecured loan stocks (RCULS) into 229.9 million new shares of IJM Land at RM1.74 per share, raising its stake to 69% from 63% (before conversion of warrants).

Assuming IJM Corp ends up with a 41% stake in the new company based on the current offer prices and conversion of RCULS and warrants, this will work out to RM3.6bil versus its current 63% stake in IJM Land of RM2.1bil, it said.

IJM Land, IJM Corp and MRCB have a common shareholder, the EPF, which holds a 7.8%, 15.6% and 42% stake in the three companies respectively.

By The Star

UAE property developer files for bankruptcy

DUBAI: Al Murjan Real Estate, developer of a US$3 billion (US$1 = RM3.13) housing project in the United Arab Emirates, has filed for bankruptcy after running into financial difficulties, the Financial Times reported yesterday.

The company filed for insolvency in the emirate of Sharjah and two liquidators have been appointed, the FT reported, citing documents it had obtained, and cited lawyers saying that it was the first court-mandated bankruptcy of a distressed property project in the emirates.

Property buyers would likely find it difficult to recover downpayments they made on homes in the 8,000 home White Bay development, which Al Murjan had started to build in another emirate, Umm al-Quwain, the newspaper said.

As property prices plummeted some 60 per cent since peaking in 2008, more than half of buyers had not maintained payments, the FT reported.

By Reuters

M'sian city apartment price 2nd lowest in region

KUALA LUMPUR: The average price of city apartments in Malaysia is the second lowest compared with other countries in the region.

In a statement here yesterday, Global Property Guide (GPG) said according to its research, only Indonesia offered city apartments that were priced lower than those in Malaysia.

In comparison, the average price of city apartments in Singapore is almost eight times more than in Malaysia, beating even Australian prices, which are almost five times higher than Malaysian city apartments.

Other countries surveyed included the Philippines, Cambodia and Thailand, where high-rise residential properties in the city cost more than Malaysia, it said.

The statement said GPG has developed the world's only global rental yields database to support a fundamental investor perspective and developed the world's first global transactions costs database, said GPG founder/publisher Matthew Montagu-Pollock.

International property buying is here big time. Yet people often don't get the information they need, he said.

Montagu-Pollock will be here to address an international property seminar entitled Property Market Outlook' organised by Iskandar Associates from Nov 29-31.

He will be sharing his views with participants on the property market outlook for Asia in 2011.

By Bernama

EPF looks at expanding property investment

KUALA LUMPUR: The Employees Provident Fund (EPF) will evaluate whether to raise its investment in properties, said deputy chief executive officer (investment) Shahril Ridza Ridzuan.


Shahril Ridza Ridzuan

We will look at it from time to time whether the number that we have invested is the right asset allocation at that point of time, he said on the sidelines of Bursa Malaysia's Business Sustainability Programme yesterday.

Currently, the pension fund has less then 2% of its total accumulated funds invested in properties. However, it has a strategic asset allocation target of 5% for properties.

It (the percentage) will grow over time. As for the timeframe, it depends on the opportunities that arise, Shahril said, adding that it was hard to put a timeframe to the target.

In August, the EPF announced that it would invest 1bil (RM4.88bil) in properties in the United Kingdom.

Meanwhile, Shahril said EPF would wait for the outcome of PLUS Expressway Bhd's shareholders meeting in December before deciding on its next course of action in relation to the proposed acquisition of PLUS' assets and liabilities.

He said it also needed to obtain approval from bondholders and the Government. We have to discuss with the Government on the concession agreement, because any changes will require its approval on the concession as well, he said on EPF's next course of action once it obtained the shareholders' approval.

PLUS has accepted the revised joint offer from EPF and UEM Group Bhd to take over the company's assets and liabilities for RM23bil.

The proposed acquisition involves a cash payout of RM11bil to minority shareholders and RM12bil of the amount owing to Khazanah Nasional Bhd, UEM and EPF.

By The Star

Mah Sing to unveil new home project valued at RM800mil

GEORGE TOWN: Mah Sing Group Bhd will unveil its RM800mil residential project on a 61-acre site in Batu Ferringhi in the first quarter of 2011.


Tan Sri Leong Hoy Kum ... ‘Penang is an important market for us and we want to create the same kind of excitement there that we have achieved in the Klang Valley.’

Group managing director and chief executive Tan Sri Leong Hoy Kum said the project to be known as Ferringhi Residence@Penang was designed to be a gated and guarded project, comprising landed properties such as semi-detached, bungalow homes and condominiums.

The semi-detached units, with built-up of 3,000 sq ft, is priced from RM1.4mil onwards, while the bungalow homes, with built-up of 4,200 sq ft, is priced from RM2.2mil.

There will also be condominiums with built-up areas of between 850 sq ft and 1,800 sq ft, priced tentatively from RM480 psf.

Most phases would enjoy commanding views of the sea, he said.

Leong added that the semi-detached homes and bungalows would have their own separate clubhouse facilities.

The condominium will have a facilities deck that will house amenities such as a swimming pool, gym and various other facilities, he added.

Leong said Batu Ferringhi, a renowned tourist belt on the island, was sought after by homeowners and investors as it was located away from the city's hustle and bustle.

Our superlink homes in Penang such as Residence@Southbay are about 90% sold and are expected to be handed over to purchasers by the first quarter of 2011. Penang is an important market for us and we want to create the same kind of excitement there that we have achieved in the Klang Valley, he said.

Mah Sing's wholly-owned subsidiary Uptrend Housing Development Sdn Bhd yesterday acquired the 61-acre freehold site in Batu Ferringhi for RM157.3mil cash or about RM59.17 psf.

The land has been converted for residential development and the group has received approval from the local authorities for the development plans of the landed properties of Ferringhi Residence@Penang, he said.

By The Star

Mah Sing unit buys 24ha land in Batu Ferringhi

UPTREND Housing Development Sdn Bhd, a wholly-owned unit of Mah Sing Group Bhd, has acquired 24.41 hectares of freehold land in Batu Ferringhi, Penang, for RM157.3 million cash.

In a statement yesterday, Mah Sing said the land will be developed into a resort-style project, named Ferringhi Residence@Penang, with an estimated gross development value of RM800 million.

The company has paid RM17.3 million, representing 11 per cent, of the total consideration upon signing of the sales and purchase agreement (SPA).

"The balance will be paid within five months from the SPA date subject to conditions precedent, with an automatic extension of a month subject to 4 per cent interest per annum," it said.
Mah Sing's group managing director-cum-group chief executive Tan Sri Leong Hoy Kum said the group is confident of the resort-style development plan as it already has four projects in Penang, including Icon Residence and Southbay Penang mixed development.

The company said the land has already been converted for residential development and development plan procured for landed development.

"The main access road is ready and external infrastructure substantially completed," it said.

By Bernama

Tough revamp calls for Sime

Sime Darby Bhd, which is expected to snap its money losing streak in its first quarter results, must stick to its plantation and property businessess but it will have to review the remaining four activities and other smaller units.

The group, which has posted losses for two straight quarters due to provisions, also runs hospitals, distributes cars and heavy equipment like excavators and fabricates oil rigs, among others, under its energy and utilities division.

Sime Darby's acting president and group chief executive officer Datuk Mohd Bakke Salleh said last week that there is a plan to sell some of its assets to better manage the group.

He did not say which divisions can be sold but added that the plan will be presented to the board next year. Sime Darby is also set to announce its first quarter results tomorrow.

Analysts said having many businesses may not necessarily be a good thing due to small margins, little impact to the bottom line and intense competition.
An analyst with RHB Institute said the automotive business as an example is without a doubt a good revenue generator but margins are thin and competition stiff.

"The automotive business is too widespread and business strategies change all the time to suit the market's supply and demand situation.

"To me, what matters most is the long-term bottom line and Sime should just focus on its two core business which are plantations and property," the analyst added.

CIMB Investment Bank Bhd's senior regional analyst Ivy Ng said Sime Darby could sell its non-core business like hypermarket operator Tesco, tyre business or hotel business (Sime has a stake in PNB Darby Park hotel).

A CLSA analyst who declined to be named said Sime Darby could even sell its oil and gas division to potential buyers like Malaysia Marine and Heavy Engineering Bhd.

"However, it might not happen because it just bought Ramunia's fabrication yard, indicating it wants to stay in the business. What is important now is that Sime Darby must seriously look at future tenders and question whether it can really carry out the job or not. Otherwise, it will run into another cost overrun."

Another analyst said the healthcare business is also a good business because it is recession-proof with lucrative future potential.

Meanwhile, Sime Darby is due to report positive numbers for its first quarter due to current high crude palm oil (CPO) prices.

OSK Investment Bank analyst Alvin Tai said the results will be good as CPO prices and fresh fruit bunch production are typically good in the months of August, September and October each year.

An analyst at AmResearch said earnings will be better due to good CPO prices as well as the absence of any major provisions.

CIMB's Ng said earnings should be positive and she expects profit to account for around 20-22 per cent of consensus earnings of RM3.1 billion in fiscal 2011.

Sime Darby made a net profit of RM684.6 million on the back of a RM7.7 billion revenue in its first quarter ended September 30 2009.

By Business Times

Plan to group YTL property firms under YTL Land

YTL Land & Development Bhd plans to buy property firms that own prime land in Malaysia and Singapore for RM476 million from its parent and related companies.

It will issue some RM253 million of 10-year irredeemable convertible unsecured loan stock to parent YTL Corp Bhd as payment for the purchases and to settle the firms' outstanding inter-company balances.

The rest will be settled in cash, YTL Land said in a filing to Bursa Malaysia yesterday.

The plan to house the group's property development assets under YTL Land allows the company to acquire key assets and ongoing property development in strategic locations in Malaysia and Singapore, it added.
YTL Land will have access to a proposed development in Brickfields as well as land in Jalan Bukit Bintang and Jalan Stonor in Kuala Lumpur, and in Genting Highlands, Pahang.

It will also have access to development land in Singapore's Sentosa Cove and Orchard Boulevard.

YTL Land hopes to complete the purchases by the first half of next year.

Upon completion, the company's capital structure and asset base will be enlarged and it will rank as one of the country's leading property development companies with a regional presence.

"This will also enhance its earnings potential and competitiveness in property development, allowing it better access to the financial markets," it said.

The plan needs the approval of YTL Land's and YTL Corp's shareholders, among others.

Given that these are related party deals, the company has appointed PM Securities as the independent adviser to non-interested directors and shareholders.

Maybank Investment Bank is the principal adviser for the deals.

By Business Times

Bina Puri to build office lots in Jalan Pasar

Bina Puri Holdings Bhd today signed an agreement with the Selangor and Federal Territory Chha Yong Fay Choon Kuan to invest in the construction of two shop office blocks in Jalan Pasar, here.

The development of 24 units of 4-storey shop offices and one unit of 3-storey office on a two-acre (0.8 hectare) site would cost RM16 million.

"We are very pleased to have the opportunity to work with the association, which is a reputable association representing the Chinese Hakka clan in the Klang Valley.

"We are very optimistic that the development will be well received as it is strategically located at Jalan Pasar, which is a well known commercial hub amongst the Chinese community," Bina Puri Group Managing Director Tan Sri Tee Hock Seng said at the signing ceremony.

The agreement was signed between Bina Puri's subsidiary, Bina Puri Properties Sdn Bhd, and the association which owns the land.
Development is expected to commence in the first quarter of next year and completed within 15 months.

"Upon completion, this investment will contribute positively to our earnings stream.

"Moving forward, we are committed to further maximise our shareholders value and continue to explore new business opportunities which provide us with recurring income," Tee said.

According to the company, the investment will guarantee a return of RM40.6 million in 14 years derived from rental income of the development.

By Bernama

YTL Corp plans revamp of property division

PETALING JAYA: Conglomerate YTL Corp Bhd plans to house all its property development assets and projects under its property development arm YTL Land & Development Bhd (YTL Land), as it undertakes several disposal deals and settlement of outstanding intercompany balances valued at RM476.05mil.

YTL Corp told Bursa Malaysia yesterday that it, along three other wholly owned subsidiaries, entered into some 10 agreements and settlement of outstanding intercompany balances with YTL Land, a 60.72%-owned unit of YTL Corp.

The agreements would see YTL Corp disposing of its property assets and projects in Malaysia and Singapore to YTL Land.

The disposal consideration and settlement of the outstanding intercompany balances of RM476.05mil is to be satisfied by the issuance by YTL Land of RM253.03mil nominal value of 10-year 3% stepping up to 6% irredeemable convertible unsecured loan stocks (Iculs) at 100% of nominal value of RM0.50 per Iculs and the remaining RM223.02 in cash, it said in a filing yesterday.

YTL Land would also undertake a renounceable rights issue of Iculs to raise funds to partly satisfy the cash portion. YTL Corp would subscribe in full for its entitlement under the proposed rights issue of Iculs.

The conversion price of the Iculs has not been fixed. The Iculs and the new YTL Land shares to be issued arising from the conversion of the Iculs would be listed and quoted on the Main Market of Bursa Securities.

Under the share sale agreements, YTL Corp would dispose of its 100% stakes in Arah Asas Sdn Bhd, Satria Sewira Sdn Bhd, Pinnacle Trend Sdn Bhd, Trend Acres Sdn Bhd and its entire 70% stake in Emerald Hectares Sdn Bhd to YTL Land.

Meanwhile, YTL Corp's wholly-owned units YTL Singapore Pte Ltd, Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd also entered into share sale agreements with YTL Land.

YTL Land had also entered into a land deal with YTL Land Sdn Bhd.

This is in line with the YTL Corp's ongoing strategy for its principal business arms to own and operate the relevant assets within their business spheres in order to leverage on operational and developmental efficiencies and synergies, it said.

The disposals are aimed at unlocking the value of YTL Corp's investments in its property units and projects.

YTL Corp would continue to participate in and benefit from the development, potential earnings and capital appreciation of the land owned by the disposed firms through its existing shareholding in YTL Land and its interest in the Iculs and/or the YTL Land shares arising from the conversion of the Iculs.

YTL Corp said the net cash proceeds from the proposed disposal and the settlement of outstanding intercompany balance would be utilised for general working capital purposes.

Until such time as the net cash proceeds are utilised, they will be held in interest-bearing bank deposits, money market instruments, deposits and/or other realisable short-term investments pending further evaluation of the strategic options and opportunities of YTL Corp and its subsidiaries, it said.

By The Star

InterContinental to make debut in Malaysia next year

SINGAPORE: The InterContinental hotel brand will make its entry into Malaysia on Feb 1, 2011, when it replaces the current Nikko Hotel Kuala Lumpur.

In a statement yesterday, InterContinental Hotels Group (IHG) said the 473-room Nikko Hotel in Jalan Ampang would take the name InterContinental Kuala Lumpur.

IHG Asia Australasia managing director Jan Smits said IHG was excited to bring the InterContinental brand to Kuala Lumpur.

He said the hotel market in Malaysia had the potential for long-term growth, especially in view of the country's target of 36 million tourist arrivals by 2020.

Smits said Kuala Lumpur was a key regional destination and Malaysia was one of the few South-East Asian countries that saw an increase in visitor arrivals in 2009, a trend that had continued to-date this year.

Thomas Lee, director of the hotel's owning company MTJ Development Sdn Bhd, said with the InterContinental brand, the hotel would be able to capture an even greater share of the growing number of visitors to Kuala Lumpur, one of the most visited cities in the world.

The statement said the hotel was slated to embark on a 30-month refurbishment, which would take place in three phases.

Currently, there are 170 InterContinental hotels operating globally in more than 60 countries, including 50 in Asia Pacific.

In Malaysia, IHG also operates Crowne Plaza Mutiara Kuala Lumpur, Holiday Inn Kuala Lumpur Glenmarie, Holiday Inn Resort Penang and Holiday Inn Malacca.

With the recent signing of the Holiday Inn Express in Kota Kinabalu, IHG will have all its key brands operating in Malaysia when the Holiday Inn Express debuts in the market.

By Bernama

IJM Land-MRCB deal to create RM7b merger

IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) will merge to create a RM7 billion property company that will be the country's second largest after the recently-proposed UEM Land Bhd-Sunrise Bhd union.

IJM Land and MRCB sealed an initial deal on the proposed merger yesterday.

It is still unclear who will take the lead in the merger, but based on the two companies' shareholders fund size, IJM Land looks set to be in the driver's seat.

IJM Land shareholders' funds stood at RM1.65 billion as at March 31 2010, while MRCB's was about RM697.1 million as at December 31 2009.

IJM Land chairman Datuk Krishnan Tan said both parties had initiated the merger talks.
"We have common shareholders, but it stops there," Tan said at a press conference after sealing the initial agreement in Kuala Lumpur yesterday.

According to latest filings at Bursa Malaysia, Employees Provident Fund (EPF) owns an indirect stake of 62.47 per cent in IJM Land and about 42 per cent in MRCB.

The two parties are yet to come up with a definitive agreement, but have agreed that the merger will be done through a new company, in which IJM and MRCB will exchange shares, or a combination of shares and cash.

The price for the share swap has been fixed to curb speculation on the stocks.

Shares in IJM Land and MRCB will be exchanged based on RM3.65 per share for IJM Land and RM2.30 per share for MRCB.

This represents a 19 per cent premium and 7 per cent premium respectively to IJM Land's and MRCB's last traded share price on Monday.

A definitive agreement is expected to be sealed by December 14 this year, company executives said.

The merged entity will have total assets of RM3 billion and 3,600ha of landbank.

"With the significant increase in size, the merged group will be able to further strengthen its market leadership in the commercial and residential segments of the property market and compete more effectively in both local and international markets," MRCB chief executive officer Mohamed Razeek Hussain said.

The merged entity is expected to be listed on the local stock exchange by the middle of 2011.

Considering that the entity is slotted to be purely in property development, there is a possibility that MRCB would divest its interests in its other non-core businesses.

"Post-merger, there will be a rationalisation exercise... so we could divest or we could keep it (non-core businesses)," Razeek said.

MRCB's engineering and construction division, for example, owns the concessions for Duta-Ulu Kelang Expressway (Duke) and Eastern Dispersal Link Expressway (EDL) in Johor Baru.

It is also involved in several construction projects such as the construction of the traffic dispersal linkage at Jalan Tun Sambanthan for the development of Kuala Lumpur Sentral.

By Business Times

IJM Land to merge with MRCB in share-swap deal

From left: MRCB CFO Chong Chin Ann, CEO Mohamed Razeek Hussain, IJM Land MD Datuk Soam Heng Choon and chairman Datuk Krishnan Tan at the MoU signing on Tuesday.

KUALA LUMPUR: IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) plan to merge via a share swap in a newly incorporated company that is slated to emerge as the nation's second-largest property developer.

Yesterday the two companies signed a memorandum of understanding (MoU) and planned to come up with a definite agreement within three weeks.

The merger will involve a share-swap whereby the shares of IJM Land and MRCB will be exchanged for shares in the new company.

The exchange price per IJM Land share is RM3.65 and RM2.30 per MRCB share. This will translate into a premium of 27.5% and 10.2% for IJM Land and MRCB respectively to the five-day volume weighted average market price.

Post merger, IJM Land and MRCB plan not to maintain their listing status and the new company will take over their listing status by June 2011. IJM Land's market capitalisation is currently at RM3.4bil while MRCB's is about RM3bil.

MRCB CEO Mohamed Razeek Hussain said the MoU was only the first step of the merger where they would reveal further details of the agreement, such as shareholding structure and share swap ratio for the merger, in three weeks' time.

But because of rife speculation of the merger in the media, we think it will be fair to announce that both companies are in discussion and have signed an MoU pursuant to the merger. We are not ready to give the plethora of arrangement just as yet, he said after the MoU signing yesterday.

Meanwhile, IJM Land chairman Datuk Krishnan Tan said the two companies complement each other via the merger.

It's a merger between businesses, people and branding to take both companies to the next level. It's a good marriage, he said.

MRCB specialises in high-rise development office and condominiums while IJM Land projects are slanted towards mass township of mixed developments.

According to a presentation revealing some preliminary details of the merger, the new company is anticipated to be a mega-size property developer with implied market valuation of RM7bil, combined annual revenue of RM2bil and net asset of RM3bil, landbank in excess of 9,000 acres and increase in geographical presence.

AmResearch said the merger between MRCB and IJM Land made sense.

IJM Land could leverage on MRCB's advantage in Sungai Buloh land. MRCB has been assisting the EPF in drawing up the masterplan for the redevelopment of the RRI (Rubber Research Institute) land (in Sungai Buloh).

The research house added that IJM Land would bring expertise and a strong track record to the partnership as MRCB lacked experience in township development.

Separately, OSK Research said the merger would boost synergy and economies of scale. We believe the combined entity will stand a strong chance of being appointed the master developer of the prized piece of federal land at RRI.

However, Krishnan said the purpose of the merger was beyond any specific project and was more towards complementing each other and to be more competitive.

MRCB's largest shareholder is the EPF while IJM Land is a unit of IJM Corp Bhd, a construction and plantation group.

On Nov 4, UEM Land Holdings Bhd made a RM1.4bil takeover offer for Sunrise Bhd that would make it the largest developer of the country.

IJM Land, in its filing to Bursa Malaysia, said its net profit fell by 19.4% to RM30mil for its second quarter ended Sept 30 from a year ago. Revenue for the quarter under review also fell by 30% to RM212.9mil.

The decrease in both revenue and net profit for the quarter was due to strong take-up rate achieved in the preceding quarter for Lot 28 in Penang and sale of units (Platino and Summer Place in Penang) previously reserved for bumiputra being offered to the public.

However, cumulatively, for first six months of the current financial year, IJM Land saw its net profit surged by 30.8% year-on-year on the back of RM577.9mil of revenue.

By The Star

Tan to quit as CEO, MD of IJM Corp Dec 31

IJM Corp Bhd's Datuk Krishnan Tan will step down as chief executive officer (CEO) and managing director (MD) of the group, effective December 31 2010.

Datuk Teh Kean Ming will instead be promoted as the new CEO and MD, IJM Corp said in a filing to Bursa Malaysia yesterday.

Tan, however, will stay on as executive deputy chairman from January 1 next year.

IJM Corp also announced that Tan Gim Foo will be the new deputy CEO and deputy MD of the group effective January 1 next year.

By Business Times

SunCity, Sunway to combine? Analysts see a current trend of M&As

PETALING JAYA: Market observers are speculating that a marriage of sorts is on the cards for Sunway City Bhd (SunCity) and Sunway Holdings Bhd, after both companies had their shares suspended from trading for two days from yesterday, pending a material announcement on a corporate exercise.

According to several analysts polled by StarBiz, the potential marriage between the sister companies would most likely be consummated via a share-swap, non-cash arrangement. The pricing for the potential deal, nevertheless, remained a question.

SunCity's last traded price was RM4.49 per share, while that of Sunway was RM2.25.

A merger between SunCity and Sunway was seen likely, as such an exercise would create synergies for the companies' property businesses. For instance, SunCity's would then be able to draw on Sunway's construction, building materials, and trading operations, resulting in meaningful cost savings for the group.

The potential merger would also create a larger entity, with enhanced liquidity for the group's accelerated business growth.

According to Maybank Investment Bank Bhd's property analyst, Wong Wei Sum, the potential merger would likely result in a combined market value of RM3.46bil for the enlarged group. On top of that, the exercise would also result in the enlarged group having a combined land bank totalling 2,642 acres and a gross development value of projects worth a total of RM25bil.

Analysts were non-committal, though, on which of the two entities would emerge as the holding company from the potential deal, but they were pretty sure that no third-party would come into the picture.

The potential merger between SunCity and Sunway seemed to coincide with the recent flurry of mergers and acquisitions (M&As), involving several major players in the local property and construction industry.

According to analysts, a consolidation trend was seen emerging in the industry as players attempt to enlarge their market capitalisation to boost their capacity, while minimising competition, to bid for larger projects be it in the local market (particularly those under the 10th Malaysia Plan) or overseas.

For instance, IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) yesterday signed a memorandum of understanding to merge in an exercise seen by many as a move to leverage on each other's strengths, while boosting their chances of being appointed as the main developer of the prized Rubber Research Institute land in Sungai Buloh.

With MRCB being majority-owned by the Employees Provident Fund, the chances of winning government-rolled out projects are high indeed. Other prized projects to bid for include the extension of the Klang Valley's light rail transit system, new buildings in Putrajaya as well as the cleaning up of the Klang river.

Less than a month ago, UEM Land Holdings Bhd and Sunrise Bhd had already embarked on an M&A route, with the former proposing to take over the latter to boost its land bank and diversify its product offerings into high-rise residential and integrated commercial development.

The proposed acquisition would also enable UEM Land to capitalise on Sunrise's strong brand and expertise to enhance its market position in the industry and enhance its appeal to high-end local and foreign buyers.

By The Star

Sunway and SunCity shares suspended on merger talks

SHARES of Sunway Holdings Bhd and Sunway City Bhd (SunCity) have been suspended from trading amid speculation that they may be merged.

The construction and property firms, controlled by Tan Sri Jeffrey Cheah, asked for their shares to be suspended from yesterday until 5pm today, pending a material announcement.

They will be merged into a new company via an exchange of shares and cash, Dow Jones newswires reported yesterday, citing an unnamed source.

The new company will continue to be controlled by Cheah, it added.
If a merger were to happen, it would be the third property merger to be announced this month.

Sunway Holdings was last traded at RM2.25 and SunCity, at RM4.49.

By Business Times

I-Berhad in talks to revive mall project

PROPERTY developer I-Berhad is currently in talks with relevant parties to revive its shopping mall project in Shah Alam, Selangor, said its top executive.

The i-City mall project was halted last year due to the global financial crisis. It was initially reported that the mall will span about one million square feet, almost equivalent to Mid Valley Megamall in Kuala Lumpur.

"We are currently in discussion stage and we will announce the plans when appropriate," chief executive officer Eu Hong Chew said but declined to elaborate further.

Earlier reports speculated that Singapore's CapitaLand Ltd would be I-Berhad's foreign partner to help develop the mall.
There are currently about four main shopping malls in Shah Alam - Shah Alam City Centre, Plaza Masalam, Kompleks PKNS and Alam Sentral mall.

i-City is an estimated RM2 billion project on 29ha that boasts a broadband speed of 20Mbps with fibre optics network and a back-up power supply.

The first phase, comprising 6.1ha with 500,000 sq ft of office space, is now 60 per cent occupied.

Yesterday, I-Berhad launched a 10,000 sq ft outdoor convention area known as i-Walk. The convention arena is an indoor-type air conditioned environment that is designed with 1,000 programmable LED lights making it an ideal avenue for corporate events or private functions.

The i-Walk can accommodate up to 33,000 people at one time and is expected to be ready by the end of December. The project is part of its phase two development covering 3.64ha with a gross development value of over RM150 million.

Also present at the event was Minister of Housing and Local Government Datuk Wira Chor Chee Heung.

In his speech, Chor praised i-Berhad for providing township services such as landscaping, security, rubbish collection and traffic management within its i-City development.

"This is in line with ministry's mission of having human settlements with integral facilities, social and recreational services," he said.

By Business Times

IJM Land and MRCB shares suspended, they are to announce potential corporate exercise today

An artist’s impression of IJM Land’s RM4.3bil The Light Waterfront phase two project.

PETALING JAYA: Market talk of a potential merger, or takeover, involving IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) has intensified with the suspension of the shares of IJM Land, its parent IJM Corp Bhd and MRCB since 9am yesterday pending a material announcement on a potential corporate exercise.

The companies are expected to announce details of the corporate exercise later today.

An analyst with a local research house said there was room for consolidation in the local property sector to make way for more competitive and bigger entities in the likes of their better capitalised counterparts in Singapore.

There are various possibilities how the exercise will be carried out. One involves the merger of IJM Land and MRCB into a new entity and the other is via the takeover route, he told StarBiz yesterday.

He said the rationale for a merger or takeover was for both parties to leverage on each other's strengths and synergies going forward.

With the Employees Provident Fund (EPF) having close to a 42% stake in MRCB, he said there was value in MRCB due to its expected involvement or major role in the redevelopment of the Government's land in Sungai Buloh, and a possible strong uplift to the construction order book from the rollout of the 10th Malaysia Plan projects.

Another analyst said while MRCB had proven itself in commercial development, especially the award-winning KL Sentral development, its track record in residential development has not been significant.

IJM Land, with its good track record in residential projects and township development, will be a good match for MRCB as its expertise will be most valuable to the enlarged group's expanded landbank, he said.

Strong brand

The property development arm of IJM Corp has the advantage of a strong brand and is a trusted developer of quality niche properties and new townships.

It is well regarded for its township building expertise as well as expertise in building medium to high-end residences and commercial projects.

Among its flagship projects are The Light Waterfront project in Penang as well as the Seremban 2 and Shah Alam 2 townships.

The analyst said MRCB's advantage of being one of the frontrunners for the redevelopment of the Sungei Buloh land could be the main impetus for the coming together of both companies.

We believe MRCB has been helping the EPF in drawing up the masterplan for the 3,300 acres in Sungei Buloh. However, details on the plot ratio, size of initial development, and other issues are not available as yet. But we understand that the Government is expected to announce the award and details by the first quarter of 2011, he added.

The Government and the EPF will form a joint venture to promote the development of the Sungei Buloh land into a new hub for the Klang Valley. The land is believed to have a gross development value (GDV) of RM10bil.

KL Sentral's development is also progressing well with over RM4bil of GDV having been completed. MRCB, together with its partners, are undertaking RM4.3bil worth of development, to be completed mostly in 2012.

Most of the development centres on Lot G, comprising two office towers, one retail mall and a hotel, with a gross floor area of about three million sq ft. The retail mall, to be called Nu Sentral Mall, will be kept for rental income. Two more properties KL Sentral Park and 348 Sentral (office and apartments) would also be injected into its property investment units for rental income. We understand that about 53% of tenants have been secured for KL Sentral Park and Shell would be taking up office space at 348 Sentral, the analyst said.

He said there would be about RM6bil worth of GDV remaining for development in KL Sentral with construction to start mostly in 2011 and 2012.

This development would include office suites (Lot B), office towers, St Regis Hotel/Residences, and a luxury high-rise development (joint venture with CapitaLand and Quill).

The analyst said MRCB was targeting at least RM1bil of new jobs next year. Among others, it is eyeing some portion of the civil works for the RM43bil MRT project proposed by MMC Corp Bhd and Gamuda Bhd.

The group is also expecting renewals to environmental projects, including the Sungai Pahang rehabilitation project, which is valued at about RM200mil. It is also looking at RM300mil to RM400mil worth of new transmission jobs from Sabah and Sarawak, he said.

By The Star

Skudai to get new RM500mil hub

Datuk Lim Kang Hoo (right) with Teras Hijaujaya Sdn Bhd director Lim Chern Herng looking at the model of the Danga Utama project.

Danga Utama commercial project is latest development in growth corridor

JOHOR BARU: Teras Hijaujaya Sdn Bhd, the developer of commercial project Danga Utama, wants to position the development as the new business hub in the Skudai growth corridor.

Chief executive officer Datuk Lim Kang Hoo said the Skudai growth corridor would derive immense benefits from its close proximity to Nusajaya and Danga Bay, the two main growth components in Iskandar Malaysia.

Spanning over 9,307ha, Nusajaya is one of the five flagship development zones in Iskandar Malaysia, the country's first economic growth corridor launched in 2006.

Our project is located just a few kilometres away from the Skudai exit of the North-South Expressway and Second Link to Singapore and also from Danga Bay, Lim said at the project's launch recently.

He said the company had, under phase one, sold 85% of the 129 three-storey shop offices with mezzanine floors priced from RM1.35mil.

Other components in phase one include six six-storey corporate office towers with selling prices from RM6.1mil.

Lim said the project on a 7.3ha site along Jalan Skudai and Jalan Sutera Danga would be completed in the next four to five years with gross development value of RM500mil.

He said phase two would have high-end condominium towers and retail outlets overlooking Sungai Skudai which would be rehabilitated under the 10th Malaysia Plan.

The Federal Government has allocated about RM300mil for a comprehensive river beautification programme which include dredging, widening and complete clean-up of filthy rivers in the country.

We want to repeat the success of Danga Bay in our Danga Utama project. Phase two will also see us introducing water taxi services from Danga Bay to the project here, said Lim, who is also Danga Bay Sdn Bhd CEO.

Located along Jalan Skudai, Danga Bay is now one of the most sought after addresses for waterfront development properties in Johor Baru, with Lim as one of the players behind the transformation of Danga Bay.

Upcoming projects in Danga Bay include three hotels, high-end condominiums, a marina, an international convention and exhibition centre, and office towers.

Iskandar Regional Development Authority has also chosen a waterfront area in Danga Bay for the wellness township development project in Iskandar.

Khazanah Nasional Bhd and Temasek Holdings Ltd will be jointly developing the project on the 202ha site.

By The Star

Mulpha offers Hayman prime properties

PETALING JAYA: Mulpha Australia Ltd, a subsidiary of Mulpha International Bhd, is offering exclusive properties for purchase for the first time at Australia's premier island resort, Hayman.

In a statement yesterday, it said these residences represented the first private ownership opportunity ever offered at Hayman.

It said the first Hayman Private Residence, estimated at about A$18mil, would be delivered this month, making it one of the highest prices paid for a property in Queensland this year.

Mulpha Australia head of hotel investment Lloyd Donaldson said the decision to offer premium residential property on the island was due to long-standing interest from frequent visitors.

The group, which bought Hayman in 2004, also announced a pre-release of six Hayman Marina Residences to selected Hayman clientele.

By The Star

Ukay Bistari project to be ready soon

The Ukay Bistari mixed development project delayed for five years is expected to be completed by July 2011, state housing, building management and squatter affairs committee chairman Iskandar Abdul Samad said.

He said three blocks of Ukay Bistari service apartment and management office, namely A, D and E were expected to be completed by next month. Only the external electrical, firefighting, architectural and piping works remain to be done.

“The handing over of the units in three blocks to the buyers should be carried out by early next year,” said Iskandar, adding that Block B and C were expected to be completed by February 2011 while Block F was scheduled to be ready by July next year.

Iskandar, who visited the project site yesterday, said the 256 low-cost flats units would be completed by January 2011.

As for the 60 medium low-cost units and 120 medium-cost units, Iskandar said the sale and purchase agreements for these units would be terminated and the buyers would get a refund.

“Buyers will get their refunds plus compensation which comes up to RM5mil,” he said.

He said they would be discussing with the Ampang Jaya Municipal Council (MPAJ) to provide the certificate of fitness (CF) for the completed blocks.

He said the safety of the buyers will not be compromised.

“We will check on the access and hazards,” he said.

In response to a question on Ukay Bistari Land Owners’ (PHUKB) intention to vote en bloc for the coalition which successfully resolved their stalled housing woes, Iskandar said the state government’s priority was to complete the project.

“We will do our part to ensure the work is completed as it is our responsibility. We are not doing this to secure votes,” he said.

According to Block A contractor Abdul Rahman Abdul Manaf, only 20% of works are left to be done.

He said if all payments were on schedule, buyers should be able to move in by January next year.

“Internally everything is done and we are just left with some external electrical and piping works,” he said.

Meanwhile, PHUKB committee chairman Dr Mohamed Rafick Khan Abdul Rahman said he was not keen on the idea of sectional CF for the completed block.

“There is no water supply currently and a water tank would be placed to provide water temporarily.

He added that on an official level, the committee would have to discuss further with the local authorities and state conditions with regards to the CF.

Ukay Bistari in Ampang consists of 2,214 mixed-development units with double and two-and-a-half storey houses, low-cost apartments, service apartments as well as shops and office lots.

It was reported that the project was launched in August 2003 with scheduled completion between August 2005 and June 2007.

A total of 353 units of the double-storey houses were completed in October 2006 while another 103 units were completed in May 2008.

By The Star

IJM Land, MRCB propose merger

The entity that will emerge from the proposed merger between IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) will be a mega property owner and developer with an implied market value of RM7 billion.

IJM Land chairman, Datuk Krishnan Tan Boon Seng, said the entity was also expected to expand its presence not only in Malaysia but also in the region.

He said the creation of a leading listed property development entity would provide a platform for both parties to tap each other's strengths and capabilities.

"The proposed merger is also expected to provide an opportunity for both entities in terms of product offerings, land bank, management expertise and regional expansion plans," he told reporters after signing the memorandum of understanding with MRCB on the merger today.

Tan said the merged entity would benefit from better project management practices which were expected to give rise to improved operational efficiencies and economies of scale.

"By leveraging on each other’s core competencies, over time, the value of the merged entity can be further enhanced through the adoption of best practices currently being practised by IJM Land and MRCB respectively," he said.

Meanwhile, MRCB chief executive officer, Mohamed Razeek Hussain, said the merged entity would also be well-placed to pursue strategies that could propel its future growth on the back of a combined net assets in excess of RM3 billion.

"With the significant increase in size, the merged group will be able to further strengthen its market leadership in the commercial and residential segments of the property market and compete more effectively in both the local and international markets," he said.

The proposed merger was expected to be finalised within three weeks, Tan said.

Mohamed Razeek said the merged group was expected to have a combined landbank of over 3,600 hectares with presence in the Klang Valley, Penang, Johor, Perak, Negeri Sembilan, Sabah and Sarawak.

The principal activity of IJM Land is investment holding while its units are involved in property development, construction, hotel operations and investment holding while MRCB is engaged in construction-related activities, infrastructure, property development and investment and provision of management services to its subsidiaries.

In a filing to Bursa Malaysia, the companies said the proposed merger would be implemented through a scheme of arrangement under Section 176 of the Act.

For the purpose of the scheme of arrangement, a newly-incorporated company would be formed (newco) to facilitate the proposed merger.

The shares in IJM Land and MRCB will be exchanged for securities in newco or a combination of shares in newco and cash.

The exchange will be based on RM3.65 per share in IJM Land and RM2.30 per share in MRCB.

The newco is to be admitted to the Official List of Bursa Securities upon completion of the proposed merger, in place of IJM Land and MRCB.

The proposed merger is subjected to approvals from the boards of directors of IJM Land and MRCB, shareholders of both companies and the relevant authorities.

RHB Investment Bank and Newfields Advisors have been appointed joint advisers to both the companies.

By Bernama

MRCB revenue up but profit down

MALAYSIAN Resources Corp Bhd’s (MRCB) third quarter net profit fell by 63 per cent to RM3.7 million despite higher revenue.

Group pre-tax profit, however, increased by a quarter to RM15 million, helped by its ongoing property projects at Kuala Lumpur Sentral in Kuala Lumpur, MRCB said in its announcement.

Its revenue increased by 5.4 per cent to RM270.9 million.

For the nine months to date, MRCB’s net profit increased by 16 per cent to RM25.8 million.

By Business Times

China cools hot property mart

BEIJING: Some of China's top trust companies have halted property-related lending and investment following a regulatory order, four sources told Reuters yesterday.

Seeing risks in rapid credit expansion to real estate projects, the China Banking Regulatory Commission (CBRC) last week instructed trust firms to assess the risks posed by their portfolios in a fresh move to rein in the red-hot property market.

The CBRC ordered a self-examination last Friday in a document, and our application to invest in a property project was turned down by our company on the same day.

I don't know whether it's a regulatory requirement or a decision by the company, a source at Ping An Trust told Reuters yesterday.


Pedestrians walking past a property advertisement billboard showcasing various building projects put in front of an old residential building in Beijing. — AP

Two sources close to Zhongrong International Trust cited a company document as saying that it had halted all new plans to invest in the property sector, except affordable housing a niche strongly supported by the government.

One of the sources added that China might order a complete halt to all property-related businesses by trust firms.

A source at China Credit Trust Co Ltd said his company had adopted a more prudent approach following the CBRC's order but had not yet halted property business.

Funds from trust companies have been an important alternative channel for Chinese developers to raise capital as the country has tightened controls on bank lending.

Trust companies are hybrid institutions combining features of commercial bank lending, private equity and asset management. Until recently they had been loosely regulated and had expanded rapidly.

By repackaging loans into equity- or fixed-income-linked products, trusts have been able to offer bank clients, typically rich individuals, much more attractive yields than are available on certificates of deposit.

The CBRC in July ordered trust companies to halt the launch of wealth-management products via banks.

Property-related trust investment totalled 150 billion yuan (US$22.6bil) in the first 10 months of this year, compared with 40 billion yuan in the whole of 2009, according to Use Trust Studio, a private data provider.

By Reuters

'Landed property prices to rise further'

Property prices will continue with the uptrend despite speculation of a bubble building up in the property market, said SP Setia Deputy President and Chief Operating Officer, Datuk Voon Tin Yow.

"The market is still very strong. In terms of the uptrend in landed property prices, it is just a matter of catching up, with the higher income individuals are receiving, and other factors related to society," he added, after speaking as a panelist at the launch of the Bursa Malaysia Business Sustainability Programme today.

He added the uptrend seen is due to the supply shortage in landed properties and is an adjustment, rather than a bubble.

"If we analyse the price of a RM1 million landed property, it would be very expensive. But if we analysed in terms of built-up area, it would be worth the price.

"Of course, the uptrend, cannot go on for the next 10 years at this rate," he quipped.

He added the increase in prices are mostly in landed properties, but not strata title developments.

"The trend will continue for sometime but in the foreseeable future, there would not be any bubble forming in the property market," Voon said.

By Bernama

Mah Sing buys land for RM157.3m

Uptrend Housing Development Sdn Bhd, a wholly-owned unit of Mah Sing Group Bhd, has acquired 24.41 hectares of freehold land in Batu Feringgi, Penang, for RM157.3 million in cash.

In a statement here today, Mah Sing said the land would be developed into a resort-style project named, Feringgi Residence@Penang, with an estimated gross development value of RM800 million.

By Bernama

KL to get first vertical car park

PETALING JAYA: Kuala Lumpur see the city's first multi-storey automated car parking system in Times Avenue, a new 15-storey building to be developed by Takashimaya Construction & Development Sdn Bhd.

The company has no ties with Japan's Takashimaya Co Ltd, which is known for its chain of department stores.

The automated car parking system was based on South Korean technology and being used in Japan, South Korea and the United States, said the company's project director Kelvin Lee Seong Seng.


Kelvin Lee ... ‘We may replicate the project to give us recurring revenue.’

About 140 parking bays will be available in the project that also comprises 20 retail units on its first three floors and 36 office suites from the fourth to the nine floors. There will be two penthouse offices.

The narrow strip of land of about 13,000 sq ft along Jalan Imbi next to Berjaya Times Square was purchased a few years ago. Work on the project will begin by the year-end.

We wanted to go into property development. When that small piece of land came up for sale, we decided to buy it.

At 13,000 sq ft, it is a small piece of land. We wanted to have office suites and some basic retail facilities to serve the office units.

But with the size constraint and the need for parking facilities, we decided to put in an automated system to maximise the efficiency of the land and enable more cars to be stored, Lee said.

The system stacks up the cars vertically.

All the office and retail units will be sold but the company will operate and manage the car parking facilities.

This is a pilot project. We will see how it goes and may replicate it to give us a recurring revenue. The branding will be important, Lee said.

The plan is to fix parking charges at RM5 for the first hour and RM1 for every subsequent hour.

The project will have a gross development value of about RM130mil. Construction cost will total about RM70mil.

By The Star

MRCB, IJM Land up news report

Malaysian Resources Corp and IJM Land Bhd rose in Kuala Lumpur trading after the two property developers said they are considering various corporate proposals, responding to a Business Times report they may merge.

Shares of Malaysian Resources rose 1.4 per cent to RM2.15 at 9:05 a.m. local time, set for its highest close since Nov. 11.

IJM Land gained 3.7 per cent to RM3.08.

By Bloomberg

Opposition to changes in property law

VAEA amendments deemed unfair to owners

FOR owners and occupiers of stratified buildings, their biggest concern is whether the building they own or occupy will continue to be managed properly after the strata titles are issued and the management of the property is handed over to the joint management body or management corporation. Buildings that are properly maintained and managed usually are better sought after and can fetch higher capital appreciation and rental.

The maintenance and management of common property in all stratified buildings are governed by three laws the Housing Development (Control and Licensing) Act 1966 (HDA), the Strata Titles Act 1985 (STA) and the Building and Common Property (Maintenance and Management) Act 2007 (BCP).

The three Acts are specific laws relating to the maintenance and management of common properties in a strata scheme.

In all these three acts, the people who can be appointed to carry out the maintenance and management of the common properties are a qualified person or agent (HDA), agents and servants as it thinks fit (STA) and any person or agent (BCP) .

While the three laws do not compel the appointment of valuers to maintain and manage common properties, the proposed amendments to the Valuers, Appraisers and Estate Agents Act 1981 (VAEA) compel all property managers to be valuers.


Datuk Teo Chiang Kok says practically all properties in the country are currently not managed by valuers.

Building Management Association of Malaysia president Datuk Teo Chiang Kok says practically all properties in the country are currently not managed by valuers.

There are tens of thousands of persons engaged by landlords and as managing agents involved in property management. These practitioners collectively have years of experience and have proven track record, expertise and competencies in all aspects of property management, he says in an interview.

But their rice bowl may be affected if the proposed bill to amend the VAEA into the Valuers, Appraisers and Estate Agents (Amendment) Bill 2010 create an absolute exclusivity and monopoly for valuers to be the only ones allowed to undertake property management.


The liberalisation proposed will result in only valuers becoming the controlling parties.

The amendments pertaining to property management are contained in two embedded clauses in the proposed Bill.

According to Teo, these amendments seek to usurp the rights of owners and the Commissioner of Buildings (COB), and conflicts with the intend and functions of the joint management boards as provided for in the BCP (Act 663).

They also usurp the rights of owners and their management corporations and conflicts with the provisions of the STA (Act 318) that allows for the establishment of management corporations, Teo adds.

Teo says the STA and the BCP expressly allow property owners or legally incorporated entities or the developers the rights and responsibility to act as property managers to maintain and manage the properties, and to also appoint managing agents to perform property management and related services.

There is no requirement whatsoever in these Acts that these managing agents must necessarily be valuers, nor are there any related references in this regard in the VAEA.

The Commissioner of Buildings established under Section 3 of the BCP has already been vested with the necessary powers and authority to oversee and regulate property management. The proposed amendments to Section 21 of the VAEA Act would be in conflict with the BCP and the COB, he explains.

Teo points out that the amendments that seek to give valuers the exclusive monopoly to property management and create a closed-shop rent-seeking occupation, are definitely unfair terms of trade which The Consumer Protection Act seeks to prohibit and directly affronts the objectives of The Consumer Protection Act.

The amendments are also in conflict with The Competition Act which seek to ensure the economy and business sector are not distorted in favour of monopolies and oligopolies, he adds.

Teo explains that the inclusion of property management as a function that can be performed by valuers was added into the Valuers Act by way of an amendment in 1997.

The main reason for this introduction was to prevent foreign valuers to practise valuation in Malaysia under the guise as property managers.

We feel the valuers' concept of liberalisation is not altruistic as made out to be, but self-serving. Currently only valuers can be partners and shareholders in valuation firms. The liberalisation proposed is to allow non-valuers to own up to 49% of a valuation firm and only valuers can be the controlling partners or shareholders.

This liberalisation move is to allow valuation firms to grow faster than organic growth by inviting minority investors in preparation for the onslaught of foreign valuation firms coming into the Malaysian market. It is not addressing the multi-disciplinary and inclusive nature of property management, he adds.

Following a meeting between the BMAM members, the Board of Valuers, Appraisers and Estate Agents, Institution of Surveyors Malaysia, and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia with Deputy Finance Minister Datuk Dr Awang Adek Hussin on Oct 18, all stakeholders involved in property management have agreed to withdraw the proposed amendments pertaining to property management from the Bill and a moratorium imposed on the implementation and enforcement pertaining to property management in the Act.

Teo says this is to allow industry practitioners to carry out a holistic review to develop and agree on a structure that is inclusive, fair, equitable and acceptable to all parties.

By The Star

Developers unfazed by new ruling

KUALA LUMPUR: Most developers participating at the Star Property Fair 2010 are unfazed with the lower loan-to-value ratio imposed by Bank Negara early this month on buyers taking up a third loan on a new house as they believe the new ruling would not significantly impact their bottomline.

The decision to impose the new ruling is to cool down the property market and to curb speculations.

Effective from Nov 3, house buyers who have signed up for two mortgages and intend to apply for a third loan will only be eligible to get up to 70% financing of the value of the house.

The Haven Sdn Bhd personal assistant of principal Yeo Kong Meng said: As a medium to high-end developer, we have not found this new ruling to have impacted our sales so far.

We also don't think this cap on home financing will have a severe impact on our bottomline going forward.

He said many home buyers were already placing at least 20% deposit to book the company's properties, prior to the new ruling.

Yeoh also said 60% to 70% of the company's customers were housebuyers, while 30% bought property for investment. Many of our house buyers have high disposable incomes; paying a higher deposit for their new property is not an issue.

Event manager K.Kalai said the company's main property project The Haven in Ipoh would comprise of three-condo towers built next to a natural lake and had a total gross development value (GDV) of RM230mil.

Tower A is almost fully taken up and is priced at RM338 per sq ft. The price range of a unit starts from RM331,500 onwards, he said, adding that all three towers would be fully built by 2013.

Penang-based Ivory Properties Group Bhd project director Murly Manokaran said property sales had not been impacted at all by the new ruling.

We actually welcome the new ruling, he said, adding that it would ensure that banks had housebuyers who were less likely to default on their loan payments.

Sime Darby Property executive (property division) Rizal Affendy Abdul Latif concurred with the other developers that the new ruling had not impacted sales.

We have so far not experience a slow down in sales due to a higher deposit on a third house. Most housebuyers with an investment intention are prepared for a higher deposit, Rizal Affendy said, adding that Sime Darby's strong reputation on delivering quality homes might have helped ensure sales remained strong.

We are targeting sales of about RM50mil for this fair but it will include following up with enquiries after the fair, he said, adding that the bulk of the house buyers were likely to be first or second-time home buyers.

Plenitude Heights Sdn Bhd executive (sales and marketing) Kevin Ho also concurred that the new ruling should not significantly impact the company's sales.

The uptake of Plenitude Heights properties so far has been satisfactory despite the new ruling, he said.

Rimbunan Raya Sdn Bhd senior manager Moses Ooi Chong Seng said the company was a niche and high-end developer.

Our current project The Enclave, in Perak, is a gated exclusive boutique residential development comprising of 45 bungalows, of which there are only eight units left for sale with price tags ranging from RM1.5mil to RM3mil, Moses said, adding that sales were good despite the new ruling.

By The Star

Association calls for level playing field in property management

PROPERTY management practitioners want an open market and level playing field where the profession will be regarded as an open occupation based on competency, expertise and experience and not by mere legislation or purely by qualification.

According to Building Management Association of Malaysia (BMAM) president Datuk Teo Chiang Kok, if the proposed Bill to amend the Valuers, Appraisers and Estate Agents Act 1981 (VAEA) into the Valuers, Appraisers and Estate Agents (Amendment) Bill 2010 Act and changes pertaining to property management are to be passed, it will create an absolute exclusivity and monopoly for valuers to be the only ones allowed to undertake property management. Entrepreneurs who are now operating as managing agents will all have to wind up their businesses or become employees of valuers.

The two embedded clauses on property management in the proposed Bill will cast the net so wide to include facilities management, building maintenance management, building facilities management, building management and managing agents, he says.

Stressing that legislation compelling and restricting property owners to only appoint valuers to manage their properties has never been imposed anywhere in the world, Teo says property management is fundamentally a general management function like marketing management, sales management and operations management.

It should be an open occupation based on competency, expertise and experience and not by mere legislation or purely by qualifications. Owners either individually, or via company holdings or collectively as in sub-divided buildings, must have the inherent and indivisible rights and freedom to choose whomever they have confidence in to manage, operate, maintain, preserve and enhance their investments in their properties.

Their skills have been honed and recognised by property owners. Many have been head-hunted and gone on to work in neighbouring countries including China, Singapore and Indonesia. Some may migrate and contribute to the country's brain drain, Teo says.

He says that although 95% of the 20 clauses in the Bill to amend the Act covers mostly housekeeping matters, the two clauses are worrisome for BMAM members with regard to their future livelihood.

BMAM has no problem with 95% of the housekeeping clauses but we are opposed to the two clauses that will make property management the exclusive domain of valuers.

An open and competitive environment will ensure best practices and will be the most efficient and best value for property owners and consumers. Valuers must be confident to compete on an equal footing and level playing field. Owners must have the unfettered rights and freedom to choose and engage the best and deserving in a competitive environment, he points out.

BMAM is organising a roadshow and forum to raise awareness on the role and importance of property management, starting with Penang today.

Registered in November last year, the principal members of the BMAM are Real Estate and Housing Developers Association of Malaysia (Rehda), Institution of Engineers Malaysia, Malaysia Institute of Architects, Malaysia Association for Shopping and High-rise Complex Management, Associated Chinese Chambers of Commerce and Industry Malaysia, Malaysian Institute of Estate Agents, joint management bodies, management corporations and managing agents.

Stressing that the association is not against valuers performing in property management, Teo says the members are totally against the exclusivity and monopoly to be created solely for valuers.

Our main basis of objection is that property management is a multi-disciplinary occupation and valuers are not the only persons competent and qualified to perform property management. Property management partnerships and entities should be open to all disciplines without limitations that only valuers must be the controlling partners or shareholders.

Being a multi-disciplinary management function, he says property management encompasses a wide range of activities from operations, leasing, maintenance, credit control, safety and security to engineering.

Teo points out that different types of buildings require different emphasis of property management skills.

The demands and skills required for a shopping centre are very different from a medium-cost condominium. No one profession can fulfil all the needs of property management. Allowing free competition will promote greater competency and efficiency in the industry, he says.

By The Star (by Angie Ng)

Growing appetite for investments

Medini is a mixed-development comprising three clusters – lifestyle and leisure, cultural and Iskandar financial district in Iskandar Malaysia, Johor. The three clusters are pivotal to the whole development of Nusajaya City.

Investors still committed to Iskandar Malaysia despite downturn, says Millennium Development

MILLENNIUM Development chairman Oussama Kabbani, whose company is involved in the development of Iskandar Malaysia, says the success of the growth corridor is its proximity to Singapore.


Oussama Kabbani ... ‘We are in a position to make the best of this recovery.’

Once the bullet train to Singapore becomes a reality, it will be possible to time one's journey to the city state. Even if it is delayed, it will happen. And the same goes for Medini, says Harvard-trained urban planner Oussama who was in Kuala Lumpur recently.

Medini is a mixed-development comprising three important clusters namely lifestyle and leisure, cultural and Iskandar financial district in Iskandar Malaysia, Johor. The three clusters are pivotal to the whole development of Nusajaya City.

When we first came three years ago, there was no housing, no Kota Iskandar, no shopping centres. In the last three years, the change has been unbelievable. Now there is warehousing and industries. Despite what the world economy has gone through, commitment from investors is still there. The world's appetite for investment is rising. We are in a position to make the best of this recovery, says Oussama.

Millennium Development is a member of Saraya Holdings, a Middle Eastern real estate development company. Its expertise is in development management services.

The company undertakes work on behalf of developers and investors in real estate. Essentially, they set up the development strategy and undertake all the work done by a developer.

The only difference is the investment does not come from Millennium Development but from the investors, which can be the Government or private sector.

Oussama says Millennium Development offers clients a portfolio of services which includes business development, urban planning, architecture, finance, marketing, legal and construction management.

We are only the catalyst. If you go through the check list, all the right factors are there, the location and the government support, among them.

How demand is created from abroad is a question of influence, he says.

Many projects sank during the recent economic crisis but Medini grew greater. The fundamentals are there. In a year or two, things will be coming up. LegoLand, the housing community, he said.

Oussama said credit goes to the investors and public-private initiatives, adding that where there is population and growth in wealth, there will be increasing aspiration for better social infrastructure and this is where Millennium Development adds value.

Southeast Asia is ripe for that. There is demand and big apirations but these aspirations are not limited to this region alone. The same is happening in China, the Middle East and Africa.

On the various development projects that are being undertaken around Kuala Lumpur by the Government in various public-private enterprises, Oussama said when one builds, one has to bear in mind that one is building for generations.

You have to be careful and creative about many things; the timelessness, a place of different incomes, all of which are timeless factors that make cities what they are. And they must be memorable.

By The Star