Property merger mania and what’s in it for minoriy shareholders

An aerial view of Sunway City Ipoh

AGAINST the backdrop of still-distressed economic conditions in the Euro zone, Chinese inflationary worries and perhaps most disconcertingly, the war games in the Korean Peninsula, major shareholders, corporates and bankers are realising that the window for deal-making could be fast closing.

Also perhaps these deals are via the asset-liability route and requires currently only 50% approval compared to other routes which requires at least 75% approval from disinterested shareholders and thus want to take the opportunity now to do these deals without needing to entice a larger portion of minorities and with a price that may need to be good enough for the deal to go through.

These recent spates of deal making, however, need not necessarily be a bad thing if two key questions are answered: firstly, whether minorities are getting a fair and reasonable offer for their shares, and secondly, whether they have the option to ride on the upside of the merged entity's, if any.

First, the UEM Land-Sunrise merger. UEM Land has offered Sunrise shareholders RM2.80 for their shares in an all-stock deal, and has rejected calls to raise its RM1.4bil offer even though Sunrise shares have risen beyond the offer price.

Being an all share deal the minorities can ride on the upside nevertheless, if any.

The market price of Sunrise has risen above the offer price and minorities have the option to sell into the market.

As it stands, three of Sunrise's major shareholders, namely Datuk Tong Kooi Ong, Datuk Allan Lim and Tan Sri Tan Chee Sing, with a combined 40.34% stake have agreed to the offer.

However, UEM Land still needs another 9.7% for the deal to happen. This was where minorities, who had reason to push for a better price, may do so, or reject the deal.

As for the RM7bil merger plan between MRCB and IJM Land, the Employees Provident Fund, being a major owner in both entities looks like the kingmaker in this instance.

As master developer of the Rubber Research Institute's 3,300-acre parcel of land (next to Kota Damansara, Selangor), the EPF quite simply needs the expertise to make this new township a success, in line with the aims envisaged under the country's Economic Transformation Programme.

The property sector is key to Malaysia's growth, and the EPF needs developers that can build townships as well as commercial projects, in a broad plan that will benefit EPF members.

The proposed merger would be implemented through a scheme of arrangement under Section 176 of the Act, and while both companies have yet to come up with a definitive agreement, it has been stated that a new company would be formed, in which both IJM Land and MRCB would exchange shares, or a combination of shares and cash.

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

The offers represent a 19% premium and 7% premium respectively to IJM Land's and MRCB's last traded share price prior to suspension.

Pending further details, there appears to be a premium to the last traded prices, but the upside to this offer is the exposure to the potential of the 3,300 acre development, an area three times the size of Petaling Jaya.

Minority shareholders of both companies might take heart, since it seems illogical that the EPF would want to exit what was essentially a deal of their orchestration. The deal pricing, at 2.5 times price-to-book for IJM land and 2.6 times for MRCB, also appear fair.

Minorities might also want to see how IJM Corp, who as 60% owners of IJM Land, reacts to this deal. IJM Land, after all, did suffer from liquidity issues pre-merger plan, and such a deal would almost certainly boost liquidity.

A definitive agreement between MRCB and IJM Land was expected to be sealed by Dec 14 this year.

And lastly, the plan by Tan Sri Jeffrey Cheah to combine Sunway Holdings and Sunway City in a RM4.5bil deal.

Tan Sri's intention appears two-fold: firstly to create a bigger entity to win larger jobs, and secondly, to safeguard against hostile or unwanted takeovers.

A new company would be formed, where Sunway City would be valued at RM5.10 a share, or a fairly high PE of 12.4 times 2011 earnings, itself at the higher end of the company's 0.5-12.5 times historical PE ratio band.

Sunway Holdings, whose shares are valued at RM2.60 a share under Tan Sri's offer, translates into a PE of 10 times 2011 earnings, and 1.7 times price-to-book value.

Most significantly, Sunway's new company was said to be valued at 12.6 times 2011 PER, which was a significant discount to the other property developers such as SP Setia's 22.8 times, UEM Land-Sunrise's or IJM Land-MRCB's which was above 30 times.

It is easy to see the respective intentions behind all three deals to create bigger companies to give capacity and capability as well as attracting more investors with the bigger size.

A bigger footprint also puts the merged companies under the radar of foreign institutional funds, which was good for capital markets. It was also an argument that applies to a merged Sunway property-construction company.

But deal making and the travails of the global economy aside, the concept of Quid Pro Quo should operate: make it win-win for all parties involved, otherwise expect time to be wasted before the deal can be concluded.

In any case the primary and initial concern should be to obtain the unequivocal buy-in of the minority shareholders?

Beyond question, property companies with significant land banks, financial strength and development expertise would be crucial in succeeding in the future, especially since there are broad expectations for the property sector to stabilise and morph into a medium-housing play in the medium- to long-term, minus the hefty margins of today.

It's just that in the process of getting there, everyone should benefit.

And minority shareholders, who many of them took the earliest leap of faith with the companies involved, should be the ones that need to be given consideration in terms of fair price, first and foremost.

Rita Benoy Bushon is chief executive officer of the Minority Shareholder Watchdog Group

By The Star (by Rita Benoy Bushon)

KSL City shopping mall set for Sunday opening

Ku Hwa Seng posing with a model of KSL City, which includes two hotel blocks and two 33- storey apartment blocks.

JOHOR BARU: KSL Holdings Bhd will be opening part of its KSL City project development the four-storey retail complex on Dec 12.

Executive director Ku Hwa Seng said the retail complex would be Johor's largest shopping mall with a gross floor area of 880,000 sq ft and 2,800 indoor parking lots.

He said the podium block had 420 retail shops, 50 food and beverage outlets, and eight cineplexes, including two 3D screens.

Ku said the atrium of the retail complex would also house Johor's largest indoor electronic billboard made up of nine 62-inch flat-screen LCD televisions.

Work on other components of the project is progressing well and they are expected to be ready by the end of next year, he said in an interview with StarBiz.

Dubbed one of the biggest commercial complexes in the southern region, the RM500mil KSL City project also houses hotel and apartment blocks.

The project is also the first such development in Johor that combines retail, hospitality and high-rise residential living, similar to those found in Kuala Lumpur and Singapore.

The 1,000-room KSL Resorts Hotel comprises two 20-storey blocks while D'Esplanade Residence @ KSL City offers 346 units two 33-storey apartments blocks.

Glass Tower I and II offer 242 and 104 units respectively with built-up areas ranging from 93.83 to 929.03 sq m that are priced from RM500,000 each.

Our apartments have attracted Malaysians as well as buyers from Hong Kong and Singapore. With the influx of foreign investors to Iskandar Malaysia, we believe they will also snap up our units, said Ku.

He said the project's location in Century Gardens less than 3km from the Johor Baru city centre and the Johor Baru Customs, Immigration and Quarantine complex in Bukit Chagar would be a strong selling point to buyers.

Ku said KSL was confident that the hotel would do well, considering most hotels in the Johor Baru central business district were recording almost 90% occupancy rate.

He said Johor also benefited from Singapore's Sentosa World Resorts and Marina Sands Resorts as Malaysians planning to visit the resorts would probably stay in Johor Baru as the hotel rates in the republic were too costly for the average visitor.

Presently, Singapore is facing a shortage of hotel rooms and the average room rates of S$300 could further increase to S$500 by the time KSL Hotel is completed.

We are planning to have a tie-up with the two Singapore casino operators to provide shuttle bus services from KSL City to the two resorts, said Ku.

By The Star

RM1bil investment in Langkawi resort

Khazanah in joint-venture deal under master development plan

LANGKAWI: Khazanah Nasional Bhd, the investment holdings arm of the Government, expects to invest RM1bil with its partners between now and 2014 to develop Teluk Datai in Langkawi.


Peremba (M) Sdn Bhd director of development John Ballantyne (right) briefing Datuk Seri Najib Tun Razak during a tour of the Teluk Datai Resorts development. Accompanying them are Tan Sri Azman Mokhtar (left) and Peremba executive chairman Tan Sri Razali Rahman (second left).

Managing director Tan Sri Azman Mokhtar said the development would be done through Teluk Datai master development plan and Khazanah would get involved via its investee company Teluk Datai Resorts Sdn Bhd.

Under this master plan, we will re-invest in the existing hotels in Teluk Datai and investment in select pieces of earmarked land in an environmentally sensitive manner, he said yesterday at the launch of the master plan.

The plan was launched by the Prime Minister Datuk Seri Najib Tun Razak

In July, the group acquired 70% stake in Teluk Datai Resorts, which owns The Datai Langkawi hotel, The Golf Club, Datai Bay and 1,494 acres at Teluk Datai.

The remaining 30% interest in Teluk Datai Resorts are held by Tan Sri Razali Rahman and Datuk Hassan Abas through Archipelago Hotels (East) Sdn Bhd.

Azman said Khazanah's investment in Teluk Datai Resorts was in line with the Government's efforts to drive the economy upwards under the Economic Transformation Plan.

It is also consistent with the key thrust of the New Economic Model of moving Malaysia towards a high income economy, supported by high-skilled local labour force and sustainable products and services and embodies the spirit of collaboration and partnership between the public and private sector, he said.

The first of the projects under the plan was to enhance The Datai Langkawi hotel through the development of 14 luxury villas, expected to be completed in the first quarter 2012.

Teluk Datai Resorts had also commenced reviewing the realignment of The Golf Club, Datai Bay to upgrade the golf course and also enable the land to be optimised for beachfront development, targeted for completion in the third quarter of 2012.

At the event yesterday, Teluk Datai Resorts also signed a head of agreement with Shangri-La Hotels (M) Bhd for the establishment of a joint-venture company (51% would be owned by Teluk Datai Resorts) to develop a 5-star resort there that would later be managed by Shangri-La Int Hotel Management Ltd under the Shangri-La brand.

It was expected that there would be another premium 6-star hotel and a selection of premium villas for sale in Teluk Datai.

To preserve the environment during the development, Teluk Datai Resorts has engaged Camco South East Asia to undertake a sustainability study.

It also announced that the group had adopted Sekolah Kebangsaan Ewa as part of its corporate social responsibility initiatives.

By The Star

SP Setia posts 32% higher PAT on asset disposal, property sales

PETALING JAYA: Property developer SP Setia posted a 32% rise in profit after taxation (PAT) to RM75.2 million for the fourth quarter ended Oct 31 from disposal of an investment property in Bukit Indah, Johor.

Revenue rose 41.8% to RM558mil.

The company said in an announcement to Bursa Malaysia Thursday that profit and revenue were principally derived from property development activities carried out in the Klang Valley, Johor Bahru and Penang.

It added that other ongoing projects that contributed to profit and revenue included Setia Alam and Setia Eco-Park at Shah Alam.

Other significant contributors included Setia Walk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

SP Setia said performance for the new financial year is expected to be underpinned by existing projects in the Klang Valley, Johor Bahru and Penang.

In addition, the company said the upcoming launch of KL EcoCity, an exciting new integrated green commercial development, was expected to contribute strongly to sales.

By The Star

Space for smaller property players

KUALA LUMPUR: Amid the large mergers taking place in the property industry, smaller players believe there is still space for niche property developers.

The recently announced mergers of six big property developers to create three enlarged entities will invariably change the Malaysian property scene.

In November, the property industry was jolted by the news of three proposed mergers as developers race to become bigger.

UEM Land Holdings Bhd got the ball rolling with the proposed takeover of Sunrise Bhd. With a combined market capitalisation of nearly RM10 billion and a landbank of over 12,000 acres, it will create the country’s largest property company by market capitalisation.

Shortly after, IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) announced plans for a marriage that will make the new entity the second largest, with a market capitalisation of about RM7.2 billion and over 9,000 acres of land.

Then Sunway Group’s Tan Sri Jeffrey Cheah and his daughter Sarena proposed to merge Sunway Holdings Bhd and Sunway City Bhd into a single entity, which will have a market capitalisation of RM3.3 billion and over 2,000 acres of land.

Being big has its advantages, as the players in the three merger exercises note. They include access to cheaper funding, increased investor interest and better economies of scale.

In the old landscape, two large players — S P Setia Bhd and UEM Land — stood out among many mid-tier companies. Even then, only S P Setia managed to garner substantial foreign investor interest, fetching premium valuations. By comparison, most property stocks traded below book value.

With the changing landscape, there will be four large players — UEM Land-Sunrise (market cap: RM10 billion), IJM Land-MRCB (RM7.2 billion), S P Setia (RM5.2 billion) and the merged Sunway (RM3.5 billion).

The three largest players will have price-to-book ratios of over two times, and price-to-earnings ratios of well over 20 times, which could set a new benchmark pricing for the sector.

Can the smaller players still hold their own and occupy strategic niches in the market post-merger?

Eric Chan, executive director of Eastern & Oriental Bhd (E&O), said there will still be a need for small property developers with a strong brand.

“There is definitely room for smaller, niche players. We can move faster, we have less red tape to deal with, we can have faster turnaround for our projects,” said Datuk Fateh Iskandar Mohamed Mansor, Glomac Bhd’s group managing director and CEO .

Tan Sri Leong Hoy Kum, Mah Sing Bhd’s managing director and group chief executive, said, despite the bigger merged entities’ stronger balance sheets there would still be room for niche players with a focus on their own strengths.

With a market capitalisation of RM1.5 billion, Mah Sing will rank among the top ten largest developers in the new pecking order. E&O and Glomac have smaller market capitalisation of RM940.6 million and RM505.2 million, respectively.

Interestingly, all three companies have also evolved into their current form from quite different entities, either through mergers and acquisitions, or diversification exercises.

Within the last decade, Mah Sing has evolved from being a successful plastics manufacturing company into a far more successful property developer, led by Leong, its entrepreneurial CEO and founder.

Meanwhile, E&O has a corporate history as colourful as the hotel it is named after, and is no stranger to mergers and acquisitions.

Helmed by low-profile businessman Datuk Terry Tham Ka Hon, E&O most recently conducted a Sunway-like merger exercise in 2008. Back then, E&O privatised its listed subsidiary, E&O Property Development Bhd (E&O Prop) into a single larger entity. That wasn’t the first privatisation attempt — a general offer exercise in 2005 saw E&O increasing its stake in E&O Prop, but not enough to privatise the company.

Glomac was listed in 2000, but its history started in 1988 when two entrepreneurs, Tan Sri FD Mansor and Datuk Richard Fong, joined forces to start a property development company.

Today, Glomac is recognised as a successful niche developer with a landbank of 900 acres. It continues to be run by the two founders, together with FD Mansor’s son, managing director Fateh. Glomac also holds the distinction of having sold the most expensive office space in downtown Kuala Lumpur. Menara Glomac, next to the KLCC Petronas twin towers, was sold for a record RM1,120 psf at the end of 2007, just before the financial crisis.

By The EDGE Malaysia (This article appeared in The Edge Financial Daily, December 8, 2010.)

Daiman to expand beyond Johor

JOHOR BARU: Daiman Development Bhd plans to expand to other parts of Malaysia after having been in the Johor property market for almost 40 years.

General manager Siah Chin Leong said the company had been looking for land in the Klang Valley for the past few years.

He said the areas that it had identified included Cheras, Kajang and Shah Alam but the land price there was too high and some of the land offered was not strategically located for housing projects.

We'll continue with our search. Sooner or later, we will find suitable land, Siah told StarBiz after the company's AGM recently.

He said apart from the Klang Valley, Daiman might also venture into Malacca, Negri Sembilan and Penang.

The company would even consider going into Singapore as demand for private properties there was still good due to the influx of wealthy buyers from abroad, he added.

In April 2008, Daiman's wholly-owned subsidiary Caversham Universal Ltd subscribed to a 70% equity in CNES Property Pty Ltd for A$875,000.

Australia-based CNES was formed in February 2008 and it is now building some bungalows in Perth.

Siah said demand for properties, especially residentials, in Johor had picked up after almost a two-year hiatus following the global economic recession.

He said this could be seen from the many new property launches, especially in Johor Baru, albeit the small number of units launched.

Siah said Daiman would launch 75 double-storey linked houses with prices from RM300,000 and 44 double-storey cluster homes priced from RM480,000 in Taman Gaya here in the first half of 2011. These units will have a gross development value (GDV) of RM40mil.

The company will also launch 68 double-storey cluster homes with a GDV of RM24mil in Taman Daiman Jaya in Kota Tinggi in the third quarter.

It will also offer 16 one-and-a half-storey semi-detached factory buildings with a GDV of RM30mil in Taman Perindustrian Murni Senai in the first quarter.

For the financial year ended June 30 (FY10), Daiman posted RM29.74mil net profit on RM123.319mil revenue compared with RM23.44mil and RM107.125mil respectively in FY09.

By The Star

Pantai plans Gleneagles hospital in Iskandar

PANTAI Holdings Bhd plans to build an estimated RM500 million hospital in Iskandar Malaysia, Johor, to help provide more world-class healthcare services in the country.

The hospital, to be called Gleneagles Medini Hospital, will be built on a 6ha site that Pantai is buying.

The land is in the mixed development area of Medini, Iskandar, the group said in a statement yesterday. It said Gleneagles Medini Hospital will be jointly developed with Global Capital & Development Sdn Bhd (GCD).

An agreement was signed between GCD, a consortium led by Mubadala Development, and Pantai's wholly-owned Pantai Hospital Johor Sdn Bhd.

"This development will set new benchmarks for quality healthcare to reinforce Malaysia's capacity in delivering world-class medical services to both Malaysians and foreign partners," Pantai chairman Khairil Anuar Abdullah said in the statement.

The healthcare complex will eventually comprise a 300-bed private tertiary hospital and a 150-suite medical office block with centres of excellence.

GCD chief executive Keith Martin said the group is proud to be working with Pantai. "The high standards set by Pantai are aligned with GCD's vision to ensure the best in planning, design and management within Medini."

By Business Times

Scond stage of LRT extension project estimated at RM1.7bil

The tender for the facilities works under Package B for both the Kelana Jaya and Ampang lines would be called upon approval of the final railway scheme, which is expected by mid-2011. — AFP

PETALING JAYA: Although the contract awards for the first phase (Package A) of the light rail transit (LRT) extension project have eluded the big construction players, the big boys will have another chance to bid for phase two (Package B), which is estimated to be worth about RM1.7bil, by the middle of next year.

On Nov 26, Syarikat Prasarana Negara Bhd (SPNB) awarded contracts worth RM1.7bil for Package A of the RM7bil LRT extension project involving the Kelana Jaya and Ampang lines.

The main contract of Package A of the Kelana Jaya line, valued at RM950mil, was awarded to Trans Resources Corp Sdn Bhd (TRC). UEM Builders Bhd and Intria Bina Sdn Bhd jointly won the sub-contract works worth RM93.2mil.

For the Package A Ampang line extension project, Bina Puri Holdings Bhd and Tim Sekata were jointly awarded the main contract and sub-contract works worth RM634.6mil and RM67.7mil respectively.

RHB Research Institute said that other players could still bid for jobs under phase two of the LRT extension project.

It looks like the first phase of the LRT line extension work packages have eluded big names such as Gamuda Bhd, IJM Corp Bhd (IJM), WCT Bhd, Sunway Holdings Bhd and Malaysian Resources Corp Bhd (MRCB).

However, there is always a second chance for these pre-qualified main contractors and sub-contractors to bid for the remaining works, it said in a recent report.

The first phase of the Kelana Jaya line would be a 9.2km extension from the Kelana Jaya station to Summit. The second phase would involve a 7.8km extension from Summit to Putra Heights.

Package A of the Ampang line involves a new 7.4km stretch from the Seri Petaling station to Station No. 5, while Package B would see a 10.3km extension from Station No. 5 to Putra Heights.

According to SPNB, the tender for the facilities works under Package B for both lines would be called upon approval of the final railway scheme, which is expected by mid-2011.

We estimate that the remaining work packages are worth about RM1.7bil as well, said RHB Research.

IJM and MRCB told StarBiz that they would be participating in the tender for Package B of the LRT extension project.

Kenanga Research said there were still contracts of significant value yet to be awarded under Package A of the LRT extension project.

Based on the newsflow, Package A for the Ampang line could be valued at RM1.5bil and Kelana Jaya line at RM1.9bil. With the recent contract awards to Bina Puri and TRC, there will be projects worth another RM600mil and RM800mil respectively left to be awarded in the short term, it said in a report.

By The Star

Tesco's 36th Malaysian outlet is in Seremban 2

TESCO stores hypermarket chain, the world's third largest retailer, opened its 36th outlet in the country on Monday, in Seremban 2.

The new RM107 million Tesco Extra replaced its old outlet, located a few metres away, with a much bigger building covering 15000 sq m to accommodate the growing demand in Seremban, Negri Sembilan.

Mentri Besar Datuk Seri Mohamad Hasan, who officiated at the opening ceremony, said the state government is pleased with foreign investors, especially hypermarkets giants like Tesco, opening up their stores in the state as they provide customers a wide range of products at low prices.

"There will be two more outlet openings soon in Senawang and Nilai and another approved project in Lukut, Port Dickson, with close to RM500 million investment in total," he said.

"I hope Tesco would consider opening stores in places such as Bahau to allow the people at the outskirts to enjoy hypermarket experience in their neighbourhood," he added in his speech.

Also present was Tesco Stores (Malaysia) Sdn Bhd chief executive officer Tjeerd Jegen.

Mohamad said small and medium entreprises are protected despite the entry of foreign retailers, as close to 85 per cent of the products sold at Tesco are local products.

"We want to ensure local industries are protected and not left behind," he said.

Jegen, who has been in the country for seven months, said the opening of the new store in Seremban had a special meaning to Tesco Malaysia as it is the birthplace of hypermarket's first ever Extra format.

"Tesco Extra is a completely new format to not only Tesco in Malaysia but also the group worldwide.

"The format supports and caters to the wider needs of small businesses apart from our end-user customers," he said, adding that the total overall direct investment in Malaysia has surpassed the RM4 billion mark.

Jegen said the new outlet boasts a new food court, a play area, 90 tenants and restaurants, more than 60,000 lines of products and 1200 parking lots.

"The store also provides close to 1,000 job opportunites as well as cares for the environment with 20 per cent less carbon emission with less use of air-conditioning and energy-efficient lighting.

"We hope to reduce carbon emission by 50 per cent in 2020 and become carbon-neutral by 2050," he said.

Jegen added that Tesco has created more than 13,000 jobs since its inception in 2001 and hopes to open more stores in the country in the near future.

By Business Times

RM500m Azea latest project in Danga Bay

A RM500 million high-end mixed development known as Azea Properties will be coming up on a 1.7ha site in Danga Bay, Johor Baru, one of the the key flagship zones within Iskandar Malaysia.

A joint-venture agreement to develop the commercial project was signed among Imperial Marine Pte Ltd, Danga Bay Sdn Bhd and Pembinaan Sahabatjaya Sdn Bhd in Johor Baru yesterday.

Johor Mentri Besar Batuk Abdul Ghani Othman, who is also the joint-chairman of the Iskandar Regional Development Authority, witnessed the signing ceremony. .

Imperial Marine, a Singapore-based property investment company helmed by Tan Yang Po, will invest RM150 million or 30 per cent of the cost of the project, while Danga Bay will put in RM185 million (37 per cent).

Pembinaan Sahabatjaya Sdn Bhd will invest RM165 million, or 33 per cent of the project cost.

Danga Bay is a waterfront master developer with landbank over 182ha along the Straits of Johor, while Pembinaan Sahabatjaya, a building and civil engineering company, has successfully undertaken projects worth over RM1.3 billion since 1999.

Tan, also the chief executive officer of Azea Property Investment Pte Ltd, has property investments around the world including in the UK and the US, where over RM50 million worth of its choice residential properties have been snapped up.

The proposed waterfront development in Danga Bay would comprise 700 units of serviced apartments spread over four tower blocks. Selling prices range between RM650 and RM880 per sq ft.

Retail spaces will also be incorporated into the buildings.

The latest joint-venture comes on the heels of several major recent investments in Danga Bay, including a RM40 million hotel by Tune Hotels Sdn Bhd and a RM150 million four-star hotel to be built by a Kuala Lumpur based developer.

By Business Times

UEM Land to buy plots from Inch Kenneth

UEM Land Holdings Bhd is buying two plots of plantation land in Bangi, Selangor, from Inch Kenneth Kajang Rubber Public Ltd Co for RM268.5 million.

It plans to develop a new township on the land measuring 187.5ha, UEM Land said in a filing to Bursa Malaysia Bhd yesterday.

The company said the proposed acquisition forms part of its strategic plans that include securing at least one new township development outside Nusajaya in Johor by 2015.

This is to enable it to diversify its development portfolio and revenue sources in order to achieve its long-term growth strategy.
UEM Land said the earlier acquisition of land in Cyberjaya in December 2008 as well as the takeover offer for property developer Sunrise Bhd are examples of the strategy.

"Collectively, the move to diversify our development portfolio is also aimed at mitigating the group's market risk and geographical concentration risk," it said.

UEM Land said the Bangi land is a freehold land, strategically located within the growth area of Bandar Baru Bangi where several new townships such as Alam Sari and Bandar Seri Putra are currently being developed.

The proposed acquisition will not have any financial impact on the company's current year ending December 31 2010 as the exercise is only expected to be completed in the next financial year.

UEM Land said it planned to develop the land as a new township as soon as possible once the acquisition is completed by March 31 2011.

Spanning over a 10-year development period, it expects an estimated gross development value of RM2.84 billion.

By Business Times

UEM Land to buy land in Bangi for RM268mil

PETALING JAYA: UEM Land Holdings Bhd said it planned to acquire two parcels of freehold agricultural land in Bangi for RM268.5mil from Inch Kenneth Kajang Rubber Public Ltd Co to develop the land into a comprehensive and integrated township.

It told Bursa Malaysia yesterday that its wholly-owned unit UEM Land Bhd wanted to buy the land measuring 463.51 acres at RM13.30 per sq ft.

These indicative terms have been laid out in an offer letter submitted to Inch Kenneth, but both parties have yet to sign a definitive sale and purchase agreement.

The purchase price is based on an indicative market valuation of the land appraised by Messrs Raine and Horne International Zaki + Partners Sdn Bhd on an as is basis with the benefit of two separate unencumbered freehold titles, with vacant possession of RM248.3mil or RM12.30 psf and the development potential and prospects of the land.

UEM Land Holdings said the acquisition was part of the group's strategic plan to have at least one new township development outside Nusajaya by 2015.

This would enable the group to diversify its development portfolio and revenue sources outside Nusajaya for its long term growth strategy.

The group's purchase of land parcels in Cyberjaya in December 2008 (now known as Symphony Hills) as well as the Sunrise offer are examples of this strategy being implemented, it said in its filing.

The Bangi land, which was an oil palm plantation estate, was a freehold land and the approval to convert the land to mixed development status was obtained by IncKen in 2007.

It was located within the growth area of Bandar Baru Bangi where several new townships such as Alam Sari and Bandar Seri Putra are currently being developed and could be accessed via the North South Expressway and the LEKAS Highway.

Under UEM Land Holdings's preliminary development master plan, the estimated gross development value was estimated at RM2.84bil spanning 10 years.

The proposed acquisition is expected to contribute positively to the group's future earnings and to further enhance its profile as a reputable township developer, it said.

The group plans to fund the purchase from the remaining un-utilised proceeds raised from a rights issue completed in April, internally generated fund and/or if need be, bank borrowings.

The balance un-utilised proceeds earmarked for property development expenditure and general working capital for the group stands at RM168mil on Nov 22.

By The Star

Pantai plans RM500mil expansion of hospital network

KUALA LUMPUR: The Pantai Group plans to expand its network of hospitals in Iskandar Malaysia at an estimated cost of RM500mil.

The group, which has already acquired a 15-acre piece of land in Medini, Iskandar, plans to build a healthcare complex of comprising a 300-bed private tertiary hospital, a 150-suite medical office block with centres of excellence that will address healthcare concerns of a growing yet maturing population.

The development of the project, which will bear the name Gleneagles Medini Hospital, will be done in phases and is slated to be one of the premium hospitals under Parkway Health. The agreement was signed between Pantai Hospital Johor Sdn Bhd, a wholly-owned subsidiary of Pantai Hospitals Sdn Bhd, which in turn is a wholly owned subsidiary of Pantai Holdings Berhad and Global Capital & Development Sdn Bhd (GCD), a consortium led by Mubadala Development Company.

We are proud to be working with such an established international healthcare provider to bring top quality healthcare to Medini.

The high standards set by Pantai aligned with GCD's vision to ensure the best in planning, design and management within Medini. We will work closely with Pantai to develop a world class facility that will put Iskandar Malaysia at the forefront of healthcare in South-East Asia, said Keith Martin, chief executive of GCD in a statement yesterday.

This development is a key step in establishing healthcare as a catalyst sector in Iskandar Malaysia and will set new benchmarks for quality healthcare (in Malaysia), said Pantai Holdings chairman Khairil Anuar Abdullah.

capacity for delivering world-class medical services to both Malaysians and foreign patient.

By leveraging on the strategic positioning of Iskandar, the hospital will be well positioned to serve the growing demand for medical travel in the region, and will provide even better medical facilities to the people of Johor.

This facility is targeted to meet the demands for high quality, yet affordable, healthcare in Malaysia, Singapore and wherever such services are not available, said said Pantai Holdings chairman Khairil Anuar Abdullah.

By The Star

MRT project poised to boost Aman Putri profile

PPC GLOMAC Sdn Bhd's newest development in the 6.76ha of Aman Putri prime freehold land in Sungai Buloh, Selangor is located within what renowned property researcher Ho Chin Soon has designated as "first-tier locations".

These are property hot spots that lie within a 15km radius from the centre of gravity in Petaling Jaya New Town and include Kuala Lumpur, Cheras, Puchong, Sungai Buloh, Shah Alam, Subang Jaya and Ampang.



"The first-tier locations will remain the focus and it's difficult to imagine a downside for (such) properties which, in general, have no bubble whatsoever," Ho, master mapmaker and principal of Ho Chin Soon Research Sdn Bhd, had said last year at an investment forum on real estate.

Aman Putri is going to be one of the main beneficiaries of the upcoming mass rapid transit (MRT) system.

With two main lines starting from and connecting to Sungai Buloh, Aman Putri will be wellconnected to the whole of Klang Valley.

But before that, it is already conveniently accessible via the New Klang Valley Expressway, LDP, and the Guthrie Corridor, all of which provide residents easy access to Kuala Lumpur city centre and Petaling Jaya.

It is also surrounded by mature and well-developed neighbouring estates like Valencia, Sierramas, Bandar Baru Sungai Buloh and Bukit Rahman Putra.

Nestled at the edge of tropical palms at the heart of Sungai Buloh, it is said that Aman Putri is "the only freehold landed property" still available in the vicinity.

With gorgeous gardens and the "longest linear parks" in Malaysia, Aman Putri's greens are designed by award-winning landscape architect, Malik Lip and Associates, while the houses are designed by another award-winner, NRY Architects.

Those with enquiries can call PPC Glomac at 03-9173-6877 or email sales@ppc-glomac.com.my.

By Business Times

RM800mil projects in Klang Valley and Ipoh next year

Artist's impression of the RM100mil Taipan@Ipoh Cybercentre project.

GEORGE TOWN: Andaman Property Group, which is based in Kuala Lumpur, will develop six property projects with a gross sales value (GSV) of RM800mil in the Klang Valley and Ipoh next year.

Andaman Property Management Sdn Bhd head of sales and marketing Vincent Tiew said of the six projects, one would be in Ipoh.

In Ipoh, the plan is to develop landed commercial and residential properties while in the Klang Valley, the plan is to develop a mixture of high-rise and landed commercial and residential properties.

The pricing, which is yet to be determined, will be attractive to lure investors, Tiew said.


Potential buyers viewing a model of Andaman’s RM100mil Taipan@Ipoh Cybercentre project during its soft launch recently.

This year, the group launched four projects two in the Klang Valley, one in Johor Baru and one in Ipoh with an estimated GSV of RM350mil.

Ipoh is the group's focus as we have just unveiled the RM100mil Taipan@Ipoh Cybercentre in Bandar Meru Raya, he said.

The project is a 1,600-acre integrated, self-contained township in North Ipoh Growth Corridor, which is being developed by Perak government.

Tiew said the landed commercial and residential project planned for next year in Ipoh would also be in Bandar Meru Raya.

The residential component will be priced affordably to attract first-time home buyers while the commercial components will be marketed to local and outstation investors with competitive pricing, he said.

On the RM100mil Taipan@Ipoh Cybercentre, Tiew said the project saw 50% of its 102 retail lots sold during a three-day preview that started on Nov 26.

The three-storey retail lots, with a built-up area of 4,500 sq ft, are priced from RM688,000 while the four-storey retail lots, with built-up areas between 6,000 sq ft and 11,000 sq ft, are priced from RM1.5mil.

Tiew said there were two key reasons for the brisk sales the features of the retail lots and the location of the project, which is close to the Perak MSC Cybercentre in Bandar Meru Raya.

He said some 30 units had dual-frontage, which meant that they were accessible from front and back.

There are 24 retail lots with 770-sq-ft to 1,200-sq-ft land in front of them that can be used for al fresco dining and other business activities. These units cost RM50,000 extra, he said.

By The Star

Bukit Bintang’s covered walk among stars

PETALING JAYA: The Government's proposal to revive plans for the Bukit Bintang area to be developed along the lines of Singapore's famous shopping haven Orchard Road to boost tourism and increase shopping expenditure, has received positive response from retail associations and real estate consultants.

Under the Economic Transformation Programme (ETP), a 6km-long covered walkway would be built in the Bukit Bintang area. The walkway is part of the RM204bil public-private investment master plan under the ETP's Greater Kuala Lumpur development.

For comparison, Orchard Road is a 2.2km one-way street flanked by distinctive shopping malls on both sides of the road.

Malaysian Retailer-Chains Association (MRCA) secretary general Valerie Choo said in principle, the Orchard Road concept would be good for Bukit Bintang.

MRCA is happy that more emphasis has been placed on reviving Bukit Bintang. Malaysia is now able to sell Bukit Bintang as a tourism product while tourists and locals will be able to walk seamlessly and comfortably from one mall to another, she told StarBiz in an e-mail.

However, she said more needed to be done such as shopping mall enhancement and refurbishment.

This is what Singapore Tourism Board did in 2009, pumping in S$40mil to rejuvenate Orchard Road together with other stakeholders i.e. shopping malls and building owners, she said.

Choo suggested planting more trees to create lush greenery and shade to complete a multi-sensory experience for tourists and locals alike.

But the most vital thing is how the traffic condition can be improved in that area, she said, adding that road closures were now carried out without stakeholders being informed beforehand.


H.C. Chan

Malaysian Association for Shopping and Highrise Complex Management (PPK) president H. C. Chan said Bukit Bintang had the pedigree and history in shopping since its first shopping mall Sungei Wang Plaza opened over three decades ago and this gave the area tremendous potential to be a world-class shopping destination.

Creation of a comprehensive pedestrian network would be a major step towards integrating all the mall and hotel facilities and linking them to public transportation, befitting and expected of a world-class shopping destination, he told StarBiz via e-mail.

Besides customer-friendly physical integration, he said there was a need for a long-term holistic approach of branding and marketing Bukit Bintang as a single shopping haven entity, similar to Orchard Road or Regent Street of London.

PPK urges all mall owners and managers in Bukit Bintang and interested stakeholders like the City Hall to adopt a common platform and work closely together for the common good of the country's tourism and their respective properties, he said.


Tan Hai Hsin

Henry Butcher Retail managing director Tan Hai Hsin said reviving the concept of Orchard Road in Bukit Bintang area was viable and long outstanding. It should have been done many years ago! he told StarBiz in an e-mail reply.

However, Tan said many things still needed to be done to make Bukit Bintang area a world-class shopping district, including:

Covered connection

All major shopping centres should be linked via a series of tunnels and/or bridges that provide cover and protection from the rain and the sun. Berjaya Times Square is now disconnected from Sungei Wang Plaza. There is no covered bridge or tunnel joining both buildings. Also, Plaza Low Yat is disconnected from Sungei Wang Plaza/Bukit Bintang Plaza. Sungei Wang Plaza/Bukit Bintang Plaza is linked to Lot 10 via a bridge. Lot 10 is disjointed from Fahrenheit 88, which is not directly linked to Starhill Gallery or Pavilion.

Pedestrian mall

Jalan Bukit Bintang or Jalan Sultan Ismail should be turned into a pedestrian mall during the weekends. This was attempted many years ago but with great resistance from the hotel, office and retail operators in the area who complained their customers would not be able to access their premises when the road is closed.

Public facilities

Public facilities such as a tourist information centre, public toilets and street furniture are important components of a world-class shopping district. The tourist information booth in front of McDonald's is too small, unfriendly and stocks too few brochures. According to recent media reports, the public toilets (in front of McDonald's and Lot 10) are not well-maintained.

Promotion

A tourist brochure or shopping directory just for the Bukit Bintang shopping district is a must. In Singapore, there are a few publishers on Orchard Road's retail attractions and other facilities.

By The Star

Malaysia-S'pore firm to develop Johor poject

Singaporean and Malaysian investors today announced a partnership to jointly develop a RM500 million new waterfront residential and commercial project in Johor.

To be known as Azea Properties, the high-end development will be coming up on a 1.68 hectare site in Danga Bay – one of the key flagship zones within Iskandar Malaysia.

The Singapore investment, valued at an estimated RM150 million, is by Imperial Marina Pte Ltd – a property investment company helmed by businesswoman Tan Yang Po.

The company is a special purpose vehicle set up by Tan to explore and seize investment opportunities in the booming Iskandar Malaysia real estate sector.

According to a statement today, she will be teaming up with Danga Bay Sdn Bhd (37 per cent) and Pembinaan Sahabatjaya Sdn Bhd (33 per cent) to develop the project through a joint-venture company – Para Impiana Sdn Bhd.

Witnessing the joint venture signing ceremony in Johor Baru today was Menteri Besar Datuk Abdul Ghani Othman, who, with the Prime Minister, is joint-chairman of the Iskandar Regional Development Authority (IRDA).

Danga Bay is a waterfront master developer with a land bank of over 450 acres along the Straits of Johor, while Pembinaan Sahabatjaya, a building and civil engineering company, has successfully undertaken projects worth over RM1.3 billion since 1999.

Tan, who is also chief executive officer of Azea Property Investment Pte Ltd, has property investments around the world.

Her latest foray was into the United Kingdom and the United States, where over RM50 million worth of choice residential properties were snapped up.

This joint-venture comes on the heels of several major recent investments in Danga Bay, including the RM40 million hotel by Tune Hotels Sdn Bhd and a RM150 million 4-star hotel project to be built by a Kuala Lumpur-based developer.

In August this year, property developer Dijaya Corporation Bhd had also entered into a 60:40 joint venture with Danga Bay Sdn Bhd (DBSB) subsidiary, Iskandar Waterfront Sdn Bhd, to develop high end condominium and retail properties on 37 acres of land.

DBSB chief executive officer Datuk Lim Kang Hoo said the latest joint venture with Imperial Marina was a clear signal of the growing confidence of Singapore investors in opportunities across the causeway since the Prime Ministers of Malaysia and Singapore announced a resolution to the long-standing issue of Malaysian railway land in the Republic earlier this year.

Lim also noted a marked increase in investment interests since Khazanah Nasional Berhad and Temasek Holdings Limited announced the setting up of a joint-venture company to explore iconic property developments in Iskandar Malaysia.

Meanwhile, Tan said the proposed waterfront development in Danga Bay would comprise 700 units of serviced apartments spread over several tower blocks.

Retail space would also be incorporated into the buildings.

“All available units in one of the tower blocks has already been booked even before the project launch,” she disclosed, with selling prices ranging from RM650-RM880 per sq ft.

She said the premier seafront project offered exceptional value because of its prime location and proximity to Singapore.

Most of the prospective buyers, she admitted, would be members of the Azea Property Investment Club - a 1,000-strong member club of ordinary individuals who invest in properties around the globe.

The group recently acquired £3 million (about RM15 million) worth of 12 Victorian-styled apartment units in London and another 200 units of landed properties valued at over US$7 million (about RM21.7 million) in Houston, USA – all of which were going for sale below market value.

“We’re also looking into developing commercial properties on an adjoining parcel of land in Danga Bay,” she said.

By Bernama

GuocoLand moves to integrated development

Malaysia’s Hong Leong Group property arm, GuocoLand (China) Ltd (GLC), is set to go bigger into integrated development in China from its early years of single building projects when it first set foot in that country.

GLC managing director Violet Lee said that after GLC’s flagship project, Guoson Centre, won the Best International Mixed-Use Development award last week in London, she was positive that integrated development was the way to go for the company.

Taking the prize at the International Property Awards had given her more confidence to continue with even bigger integrated development projects, she said.

“Over the years, we have transformed from single building projects to mega integrated projects of 100,000 sq metres, 600,000 sq metres,” she said.

Now, the company “will do bigger,” she told Malaysian, Singaporean and Hong Kong journalists in London last weekend after the award ceremony

“The next project in Beijing is going to be 1.4 million sq metres and in Tianjin 1.2 million sq metres, even bigger, double the size I am doing now,” said Lee who initiated the Guoson Centre development.

She said that after winning the award, at least she knew that she was doing the right thing and that she had been recognised for producing quality products.

“So if I continue with this development, this way of doing things I should not be wrong,” she said, adding that GLC’s focus would be on integrated developments in the years to come.
GLC’s developments are in prime locations in Beijing, Shanghai, Nanjing and Tianjin.

Lee said that to-date GLC, which was established in 1994, has a land bank of some 2.5 million sq metres valued at over US$3.5 billion in Beijing, Shanghai, Nanjing and Tianjin.
“We are not intending to move out of these four cities. They will always be within these four cities,” she addded.

The award winner Guoson Centre is a sustainable and fully-integrated development brand in Beijing and Shanghai. Comprising a large-scale cosmopolitan Guoson Mall, five-star British-styled Guoman Hotels, Grade A Office Towers, high-end residences, and expansive Singapore-inspired “Garden City” landscaping, the Guoson Centre combines aspects of ‘Work, Live, Play’ in resembling a city within a city.

Built specifically on prime locations that integrate two of the largest transportation hubs in the world, Guoson Centre is set to provide local, national, and global interconnectivity while satisfying the market’s needs for eco-friendly environments and cosmopolitan lifestyles. The centre is strategically located to provide easy access to some of the largest transportation hubs in the world, connecting urban, national and global centres.

Lee said that the US$2 billion 600,000 sq metres Beijing Guoson Centre is 90 per cent completed while the slightly smaller US$600 million Shanghai centre is on its first phase.

The US$80 million Guoman Hotel Shanghai, which is located within the Shanghai Guoson Centre, is already opened for business while the Guoman Hotel Beijing will open in July next year.

Touching on the hospitality sector, especially the hotel sector, where GuocoLand has ventured into, Lee said that despite the stiff competition there was still a market for hotels if ”you differentiate yourselves from the rest of the people in the industry.”

She noted that two years ago when China hosted the Olympic Games a lot of money were thrown into the hospitality business, with hotels sprouting out everywhere coupled with entertainment complexes, restaurants and malls. Similar facilities also emerged during the recent Shanghai Expo which was held from May 1 to Oct 31.

“But can you sustain this, that is the big question. To me, I think a lot of it will depend on the products that you are giving to the market. That means the hotel itself.”

Another factor would be the services one is providing because “branding comes not only with the products, a lot of it with the software too – the services.”

“When we march into a hotel, no bell boy to take your luggage, you walk to the front desk and they are talking on the phone and do not even want to look at you, I don’t think you would want to go back to the same hotel.

“So is there a market for hotels? The answer is yes, Despite the competition, there is a market. But you have to differentiate yourselves from the rest of the people in the industry," she said. So how is this done apart from having products that are spectacular?

“To me, I always emphasise on the different kinds of services. People say in a hotel you are looking for comfort, you don’t want to feel inhibited. You want to be comfortable. You want to know that people are looking over you. Actually in Guoman (hotels) we emphasise a lot on these services."

For example, she said that the Guoman Hotel Shanghai opened a few months ago is a “true blue five-star standard hotel” where the design was done from scratch.

“From now on all new hotels will be like the hotels in China. Those are our own own hotels we build from scratch. The next one in Beijing, you will see the Guoman signature."

Apart from the hotels in Shanghai and Beijing, one is being planned in Nanjing, and there would also be a hotel in Tianjin, she said, adding that all these hotels had and would have the Guoman signature.

Britain’s Guoman, which runs the hotels, has a 30-year history in hospitality management.

Lee was reported to have said at the launching of the Guoman Hotel Shanghai that with Guoman''s 30-year history in hospitality management and its uniqueness in services, she was confident of the group''s future in the China market.

By Bernama

UEM Land Buys Two Parcels of Land

KUALA LUMPUR:UEM Land Holdings Bhd is buying two parcels of agricultural land from Inch Kenneth Kajang Rubber Plc for RM268.5mil to be developed into a township in Bangi, Selangor.

It told Bursa Malaysia today it was buying the 463.51 acres of land in Semenyih, Selangor for a cash consideration of RM13.30 per sq ft.

It said the indicative market valuation of the land as appraised by Messrs Raine and Horne International Zaki + Partners Sdn Bhd was of RM248.3mil or RM12.30 per sq ft.

The group had stated "the scale of the Bangi land, with a total land area in excess of 450 acres, would provide the opportunity for UEM Land to develop a comprehensive and integrated township".

The group said it had surplus cash of RM351.5mil as at Sept 30, 2010 and the board intends to fund the requirements through internally generated funds and/or bank borrowings.

The Bangi land is adjacent to the Alam Sari township and Universiti Kebangsaan Malaysia, and is within the vicinity of Bandar Baru Bangi.

Whilst the Bangi land is currently classified for agricultural land use and is an oil palm plantation estate, approval for conversion to mixed development status was obtained by IncKen in 2007.

It added that the proposed acquisition was part of its strategic plan where one of the objectives was to secure at least one new township development outside Nusajaya by 2015.

This was to enable the group to diversify its development portfolio and revenue sources outside Nusajaya in order to achieve its long term growth strategy.

The scale of the Bangi Land, with a total land area in excess of 450 acres, would provide the opportunity for UEM Land to develop a comprehensive and integrated township, it said.

By The Star

Board expects buoyant building sector as 10MP projects roll out

The Construction Industry Development Board (CIDB) expects the construction sector to be buoyant next year as projects under the 10th Malaysia Plan (10MP) start to roll out from January.

But the government will be cautious in awarding contracts to mitigate the risk of being exposed to a second wave of global economic crises, said CIDB chief executive officer Datuk Hamzah Hasan.

Hamzah said the European debt crises and the slow US economic recovery was worrying and many countries are taking steps to reduce their expenditure in order to improve their budget deficit.

"Malaysia is taking similar steps in view of the expected crises. The impact will be felt in 2011 as what was experienced in 2009," he said.

He, however, said the impact will not be as great as last year due to continuation of projects from the Ninth Malaysia Plan (9MP), new jobs under the 10MP and more public-private partnership (PPP) projects coming up.

Under the 10MP, an amount of RM230 billion has been allocated for development, whereby 60 per cent, or RM138 billion, is for infrastructure.

Hamzah is bullish the industry will replicate this year's expected growth of 3.7 per cent in 2011. To achieve the target, it would need RM80.3 billion new projects next year, up from RM77.4 billion in this year.

He said projects like Matrade Centre, Warisan Merdeka, mass rapid transit and the Malaysian Rubber Board's land development in Sungai Buloh, worth RM70 billion, will contribute to growth next year.

This year, the government has announced projects to the tune of RM72 billion such as the LRT extension, the New LCCT terminal, power plants and luxury housing projects in Iskandar Malaysia.

"These are high-impact projects which will improve the business environment and private investment," he said.

In 2009, when the global economy hit the height of recession, Malaysia's construction sector was able to grow by 5.8 per cent because of completed jobs worth RM309 billion within four years of the 9MP.

"We expect by 2015, the sector will contribute 5 per cent to the country's gross domestic product, from the current 3 per cent," he said.

By Business Times

Pantai to build hospital in Iskandar

Pantai Holdings Bhd intends to expand its network of hospitals to Iskandar Malaysia with the purchase of six hectares of land in the mixed development area of Medini, Iskandar.

An agreement was signed between Global Capital & Development Sdn Bhd (GCD), a consortium led by Mubadala Development Company, and its wholly-owned subsidiary, Pantai Hospital Johor Sdn Bhd.

"This development is a key step in establishing healthcare as a catalyst sector in Iskandar Malaysia and will set new benchmarks for quality healthcare to reinforce Malaysia's capacity for delivering world-class medical services to both Malaysians and foreign partners," Pantai Holdings Chairman Khairil Anuar Abdullah said in a statement today.

The planned healthcare complex will be built in phases and will eventually comprise a 300 bedded private tertiary hospital, a 150 suite medical office block with centres of excellence to address the healthcare needs of the population.

By Bernama

Johor developers face future challenges

JOHOR BARU: Demand for residential properties is still good in Johor but developers will face challenges in the coming years due to labour shortage and a hike in building material prices.


Simon Heng .... ‘The take-up rate for new houses in Johor is still good despite the increase in prices.’

Real Estate and Housing Developers Association (Rehda) Johor branch chairman Simon Heng said developers did not have much choice but to pass the additional cost to house buyers.

He said building materials costs had increased by 10% to 15% in the past two months, translating into higher selling prices for new houses, especially in Johor Baru.

The take-up rate for new houses in Johor is still good despite the increase in prices and hopefully the trend continues next year,'' Heng told StarBiz on Wednesday.

He said banks were still offering attractive home loans, including full-loan facility for first-time buyers with a monthly household income of less than RM3,000 as announced recently in Budget 2011.

He said developers should look at coming out with innovative packages, including gated-and-guarded precincts and high-speed broadband facilities, to attract buyers.

Heng said the construction industry was also facing labour shortage and had to depend on foreigners as locals were not interested to take up the job.

He said many Indonesians that had been working in the construction sector in Malaysia for more than five years had left home as the construction sector in the republic was booming.

He said despite having workers from Bangladesh, Pakistan and Vietnam, contractors still preferred Indonesians as they were more hardworking and easy to communicate with.

By The Star

RM27b investment spent in Iskandar Malaysia

A total of RM26.89 billion or 42 per cent of the committed investments of RM64.38 billion in Iskandar Malaysia have been spent on projects on the ground as at end of September.

A statement from the Iskandar Regional Development Authority (IRDA) said the 9th meeting of the Members of Authority (MoA) of IRDA, which was chaired by Prime Minister Datuk Seri Najib Tun Razak on Monday, was pleased that several key projects were on track and ready to commence operations in 2011/2012.

These include the Netherlands Maritime Institute of Technology (recruitment to start in 2011); Newcastle Medical University Malaysia (in October 2011); Johor Premium Outlets (in November 2011); LEGOLAND theme park in Medini North (2012); Lifestyle Retail Mall@Medini (2012); and Marlborough College Malaysia (2012).

Najib is the IRDA co-chairman with Johor Menteri Besar Datuk Abdul Ghani Othman.

The statement said Iskandar Malaysia's positive growth continued to be on track for 2010 with greater awareness locally and internationally.

This was achieved despite the weak worldwide economic growth last year but following a strong rebound of regional economies in 2010.

It said the meeting also discussed strategies to woo more local and foreign investments to Iskandar Malaysia.

IRDA members were also informed that Iskandar Malaysia has been in the forefront of implementing the government's Economic Transformation Programme (ETP), aligned with the New Economic Model (NEM).

Seven of the 12 National Key Economic Areas (NKEAs) under the ETP are being promoted in the region, it said.

The statement said several Entry Point Projects (EPPs) under the NKEAs not only offered business opportunities to local and foreign investors but also help develop Iskandar Malaysia to be "a strong and sustainable metropolis of internatioal standing".

The MoA noted that Iskandar Malaysia continues to attract interest from investors given its strategic location, strong brand, competitive cost of doing business, transparency and good investment environment.

The economic corridor attracted 58 per cent domestic and 42 per cent foreign investments, with positive outlook from Singaporeans, both in the manufacturing and services sectors.

IRDA said it is also targeting at more impactful promotions and marketing activities next year.

The MoA was also given updates on the progress of the Johor Baharu Sentral Business District Transfrmation Plan and the Iskandar Malaysia Human Capital Blueprint initiatives, among other matters.

By Bernama

Glomac at 3-year high on profit surge

Glomac Bhd, a Malaysian property developer, rose to its highest level in more than three years after profit in the second quarter ended Oct. 31 surged 71 per cent from a year earlier.

The stock gained 1.8 per cent to RM1.73 at 9:08 a.m. in Kuala Lumpur trading, set for its highest close since July 31, 2007.

By Bloomberg

Cahya Mata unit in RM380mil JV to build hotel, apartments

PETALING JAYA: Cahya Mata Sarawak Bhd, through 51%-owned subsidiary CMS Land Sdn Bhd, has signed a joint-venture agreement to build, own and manage a four-star hotel and service apartments at the Kuching Isthmus in Sarawak.

It told Bursa Malaysia yesterday that it had signed the agreement with Premier Cottage Sdn Bhd (PCSB), Boulevard Jaya Corp Sdn Bhd (BJSB), Hikmat Majusama Sdn Bhd (HMSB) and Isthmus Developments Sdn Bhd (IDSB).

The building, comprising 381 hotel rooms and 96 service apartments, will cost about RM380mil, including outfitting, furniture, fittings and equipment, but excluding financing costs and contingencies.

IDSB, which will undertake the development, will finance it via a combination of share issuance, borrowings from banks or financial institutions, as well as advances from the joint-venture partners, except CMS Land, totalling up to RM50mil.

CMS Land will inject two parcels of vacant land in Kuching, totalling 4.25ha with a lease period of 99 years expiring in 2109 to IDSB for a total consideration of RM10mil to be satisfied via the issuance of 10 million new shares in IDSB, which will undertake the hotel development, at their par value.

Based on the audited financial statements as at Dec 31, 2009, the net book value of the land was approximately RM5.106mil. The land has not been income generating and thus no profit is attributable to the land, it said.

CMS Land will eventually own 10.3% in IDSB, while PCSB, BJSB and HSMB will hold 50.5%, 19.6% and 19.6% respectively.

CMS Land will subscribe for 300,000 new RM1 shares in IDSB, while PCSB, BJSB and HSMB will subscribe for 5.05 million new shares, 1.96 million new shares and 1.96 million shares respectively.

Building works for the hotel is expected to begin in the first quarter of 2011 and completed by December 2013.

CMS Land is the land owner and property developer for the Kuching Isthmus development project, which is intended to become Kuching's new central business district.

It is a proposed mixed commercial and residential development project that includes convention and exhibition centre, transport hub, tertiary educational institutions, marina and other housing/commercial developments.

By The Star

Cahya Mata unit in apartments, hotel deal

CAHYA Mata Sarawak Bhd's 51 per cent unit has formed a joint venture with four parties to help it build, own and manage serviced apartments and a four-star hotel in Kuching Isthmus in Sarawak.

CMS Land Sdn Bhd will have a 10.3 per cent stake in the joint venture company.

The other parties are Premier Cottage Sdn Bhd, Boulevard Jaya Corp Sdn Bhd, Hikmat Majusama Sdn Bhd and Isthmus Development Sdn Bhd.

By Business Times

GuocoLand China wins property award

LONDON: Malaysia’s Hong Leong Group property arm, GuocoLand (China) Ltd (GLC), was voted the Best International Mixed-Use Development at the International Property Awards here over the weekend for its US$2 billion flagship project Guoson Centre.

The achievement sets an important milestone for China as it is the first time that one of its mixed-use projects has been honoured for "Best International" in 16 years since the awards’ inception, GLC said.

GLC group managing director Violet Lee said that winning the award showed that “China can actually construct quality projects that can top the world.”

“Winning the world’s best means we have reached a certain point namely world recognition of the efforts that we have put in,” she told reporters from Malaysia and Hong Kong here Sunday.

Lee said that one of the factors why GLC won the award against other nominees, which included those from the Midle East like Bahrain Bay with projects worth more than US$6 billion, was its “community angle.”

By Business Times

RM700m boost for Iskandar Malaysia

The government has agreed to allocate an additional RM700 million for rolling plans for Iskandar Malaysia over the next two years.

Johor Menteri Besar Datuk Abdul Ghani Othman said the amount is an addition to the RM339 million set aside to the southern Johor growth region during the recent tabling of Budget 2011.



"Yesterday, Prime Minister Datuk Najib Razak agreed to add funds for rolling plans with another RM700 million for Iskandar Malaysia programmes," Ghani said in his speech at the launch of the Kota Iskandar Tourism Programme and Sinar Jauhar gallery in Nusajaya yesterday.

He did not elaborate on the rolling plans. Sources said the funds may be for various infrastruture projects and new investments which have not been announced by the government.

Najib is co-chairman of the Iskandar Regional Development Authority.

On a related matter, Ghani said , Nusajaya is set attract more tourists with the new guided tours for the Sultan Ismail Building which houses the state assembly in Kota Iskandar.

"In 2009, the building attracted 8,000 tourists, and between January 2010 and now, the tourist arrivals have risen by 30 per cent.

By Business Times

New builder for major project - High-end property scheme in Batu Ferringhi to be rebranded

GEORGE TOWN: Mah Sing Group Bhd will apply for approval to take over the planning permission for the Tropika Ferringhi project given to the previous land owner.

Mah Sing said in a statement that on 22 November, the group had acquired a piece of freehold land in Batu Ferringhi which had been approved by the authorities for residential development as applied by the vendor from an earlier submission.

“The premium has been paid and a development order procured for landed development (Phase Two) for the project named Tropika Ferringhi.

Subject to authorities’ approval, Mah Sing intends to rebrand the project ‘Ferringhi Residence@Penang’ upon completion of the sales and purchase agreement.

”Mah Sing will be applying to the MPPP for approval to take over the planning permission upon completion of the land purchase,” the statement said.

Mah Sing was responding to an MPPP statement which said that the group had not submitted any application for planning or development approval for the Ferringhi Residence@Penang project.

Mah Sing had said the group would unveil its RM800mil residential project on a 61-acre site in Batu Ferringhi in the first quarter of 2011.

Group managing director and chief exe-cutive Tan Sri Leong Hoy Kum said the pro- ject would be a gated and guarded scheme, comprising property such as semi-detached and bungalow homes as well as condominiums.

By The Star

UEM Land to sell asset for RM6.5m

UEM Land Holdings Bhd is selling 8.09ha in Johor to Medini Iskandar Malaysia Sdn Bhd for RM6.53 million.

Medini plans to build water supply reservoir, suction tank, pump house and retention pond on the land.

The sale will provide a gross profit of RM2.86 million for the year ending December 31 2010, UEM Land said in a filing to Bursa Malaysia yesterday.

By Business Times

Mahajaya to buy land in Selangor

MAHAJAYA Bhd is buying 3.79ha of land in Cheras, Selangor, for RM15.52 million.

The land will be used to extend the development of its Bandar Damai Perdana, the company said in a statement yesterday.

By Business Times

Glenmarie Properties launches high-end bungalows

Niche development: Aerial view of Glenmarie Gardens

Glenmarie Gardens is an exclusive, low density enclave comprising 70 units of two and two-and-a-half storey bungalows, situated on freehold land in Glenmarie Section U1, which is conveniently accessible from the main highways and main roads serving the vicinity of Glenmarie.

The development is split into two phases, Phase 1, consisting of 14 units, was launched on 26th November 2010, while the Phase 2 of the project will take off in the 1st Quarter of 2011. Construction works for 14 units of Phase 1 will commence in May 2011, and is due to be completed in September 2012.

There are seven distinctive architectural designs in the Glenmarie Gardens project - Amaryllis, Bloomeria, Carlina, Dellania, Encillia, Firmiana and Gazania. The build-up area starts from 5,910sq ft and tops at 8,033sq ft, while the land area starts from 8,364sq ft and stretches up to 14,693sq ft. These homes are tagged from RM5,262,277 to RM8,156,888.


Exclusive and luxurious: Glenmarie Gardens is a low density enclave with unique designs

Glenmarie Properties takes pride in its property development’s involvement, covering residential development, commercial development and also the hospitality segment. Completed projects under Glenmarie Properties’ residential projects’ portfolio include Glenmarie Court, Glenhill Saujana, Glenmarie Residences and Glenpark, all within Glenmarie and Shah Alam vicinity. The commercial development’s completed projects include the Accentra Glenmarie and Glenmarie Industrial Park.

At a glimpse in the year 2010, several lifestyle projects have been planned and in May 2010, 48 units of townhouses were launched at Mutiara Tropicana. Glenmarie Properties recently launched 17 commercial units of Glenpark at Seksyen U1, Shah Alam in October 2010. The Glenpark shoplots’ project under Horsedale Develeopment Berhad, is built on a 0.62 acre land next to the Glenpark residential area and is due for completion in October, 2013.

On a different note, Glenmarie Properties’ involvement in the hospitality segment include the Holiday Inn KL Glenmarie in Shah Alam, set amidst a 350-acre of tropical greenery, overlooking two 18 hole world class golf courses of the Glenmarie Golf & Country Club. In the northern region, lay Rebak Island Resort in Pulau Langkawi, a 5-star accommodation with pristine and secluded beaches. Situated on the East Coast in Terengganu, is Lake Kenyir Resort & Spa, featuring a world-class resort fringing the country’s biggest lake, surrounded by the beautifully preserved tropical rainforest.

Contact 1800-88-8580 or email raja.azahatuluyun@glenmarieproperties.com for more information or a private presentation on Glenmarie Gardens.

By The Star

E&O's unbilled property sales soar to RM605m

EASTERN & Oriental Bhd (E&O) says its unbilled property sales as at September 30 have surpassed peak levels recorded in the year ended March 2008.

E&O, listed on Bursa Malaysia's main board, locked in unbilled property sales of RM604.8 million during the period compared to RM203.7 million registered as at March 31 2008.



This was due to stronger buying sentiments in the high-end segment where it has a niche, the company said in a statement yesterday.

This helped E&O to achieve a net profit of RM17.9 million for the six-month period to September this year, matching the performance of a year ago.
E&O executive director Eric Chan said the profit from its strong unbilled sales position will provide a robust base for an enhanced future performance.

"In addition to this, the recent reopening of Lone Pine Hotel, E&O's boutique resort at Batu Ferringhi, and the upcoming launch of Straits Quay, Penang's first seafront retail mall, are expected to positively impact the group upon achieving targeted operational levels."

Chan said E&O was on a strong platform to capitalise on future growth opportunities and is expanding in all segments.

"We are set to execute a portfolio of current and near-future projects with a total GDV (gross development value) of RM4 billion," he added.

E&O is positive about its hospitality arm, spearheaded by its two heritage hotels in Penang, the E&O Hotel and Lone Pine Hotel.

The company has recently increased its stake in The Delicious Group to 100 per cent and is embarking on an expansion drive locally and regionally.

Plans are under way to strengthen the brand presence of the F&B chain, which currently operates seven outlets in Kuala Lumpur.

By Business Times

MRCB to go big in the property sector

Malaysian Resources Corp Bhd’s activities are heavily concentrated in the Klang Valley with KL Sentral(pic) as its flagship project

PETALING JAYA: After nearly 30 years, Malaysian Resources Corp Bhd (MRCB) is poised to join the premier league of the property development sector via its proposed merger with IJM Land Bhd.

The company started in 1969, under the name Perak Carbide Sdn Bhd, with its core activity of carbide manufacturing. In 1981, it became known as MRCB, following a major shift in operational interests to property development and investment.

To recap, the government-linked company, with Employees Provident Fund (EPF) holding in excess of 40% stake, announced that it would team up with IJM Land under a newly incorporated company (Newco). The proposal will involve a share swap of MRCB and IJM Land with new shares in Newco.

Newco is expected to take over the listing status of both company in the second half of next year with implied market capitalisation of RM7bil and net asset of over RM3bil where it will emerge as the second-largest property developer in the exchange.

It was largely reported that it would be a synergistic merger given the different strengths of MRCB and IJM Land in the property market segments.

So, what does MRCB bring to the merger with IJM Land?

According to OSK Research, MRCB's activities are mostly in the commercial sector and heavily concentrated in the Klang Valley, with its flagship project KL Sentral with gross development value (GDV) of about RM12bil.

Its major shareholder, the EPF, is to undertake the development of the prized Rubber Research Institute (RRI) land in Sungai Buloh where we believed the merged entity may be the frontrunner to undertake the project on behalf of EPF, it said.

This announcement was made in Budget 2011, whereby the project would involve mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities. The entire development is estimated at RM10bil and is expected to be completed by 2025.

IJM Land, on the other hand, is more focused on township and residential developments in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak with remaining landbank of 6,637 acres and remaining GDV of about RM22.85bil.

This landbank of IJM Land would complement the merger, as according to Kenanga Research, post-completion of KL Sentral, MRCB might not have another equally strategically located landbank and would only be counting on securing a role in EPF's RRI land development to have a significant new earnings stream.

OSK Research also believed the proposed merger might have been initiated by EPF as part of its efforts to consolidate its property exposure as well as to establish its own sizeable property arm.

Besides MRCB, EPF is also a common and significant shareholder in IJM Corp Bhd and IJM Land.

This, we believe, will enhance EPF's capability to achieve its goal of increasing its exposure in the property market as part of its investment diversification strategy, it said.

The EPF was recently quoted on the merging of IJM Land and MRCB as saying it would first have to evaluate the proposal before deciding on its position.

Based on current information, the EPF is slated to be the second-largest shareholder in Newco after IJM Corp, as the details of the new management structure has yet to be revealed.

On the offer price of RM2.30 per MRCB share on the merger share in Newco compared to RM3.65 per share for IJM Land, OSK Research said it's a fair offer price but not that attractive.

The RM2.30 offer price for MRCB offers only a 7% and 12.2% upside from the last closing price (before the merger announcement) and our previous fair value respectively.

As such, we view the offer price as somewhat fair, and yet not that attractive, owing to the rather limited premium or upside, it said.

Going forward, although Newco is expected to enter the premium league of property sector, the other players in the league are also stepping up in terms of size and capabilities apparent in the current trend of mergers and acquisition in the industry.

On Nov 4, UEM Land Bhd has proposed a merger with Sunrise Bhd, while last week Sunway Holdings Bhd and Sunway City Bhd received a takeover offer from Sunway Sdn Bhd for RM4.5bil in cash-and-share swap.

Thus, although the merger between MRCB and IJM Land is expected to create a giant in the sector next year, Newco is not alone in the battlefield as the other contenders would be equally strong.

By The Star

M-REITs on the acquisition trail

PETALING JAYA: Malaysian real estate investment trusts (M-REITs) are taking steps to expand their yield accretive potential and market capitalisation with a number of asset acquisitions underway.

Malaysian REIT Managers Association (MRMA) chairman Stewart LaBrooy said there was a resurgence in activity in the M-REIT sector and the acquisition trail had commenced in earnest.

In the list include AmanahRaya REIT's planned acquisitions amounting to RM497mil; UOA REIT's RM500mil asset purchase plan; KPJ Al-'Aqar REIT's purchase eight hospitals amounting to RM383mil and an Australian nursing home for RM135mil; and Axis REIT's purchase of four major assets worth RM238mil, Stewart said.


Steward LaBrooy ... ‘it would be important that M-REITs have sponsors who can provide a pipeline of projects or stock to the REIT vehicle at reasonable returns during these times.’

According to Stewart, M-REITs are getting set for a re-rating and REITs which are actively growing and have high liquidity would be rewarded with a better premium than those that have not.

On his outlook for M-REITs in 2011, he said if the property market remained bullish through next year, it is going to be difficult to manage to get yield accretive yields as we are evidencing a compression in the yield curve.

Stewart said it would be important that M-REITs have sponsors who can provide a pipeline of projects or stock to the REIT vehicle at reasonable returns during these times.

With the uncertain outlook of inflation and the falling US dollars, investors are moving into hard assets like property as a hedge resulting in the rising property prices, he added.

The current high liquidity in the capital markets in Asia has led to a boom in equities on Bursa Malaysia.

Stewart said in such an environment, the regional bourses, including Bursa Malaysia, have outperformed the REITs around the region, including in Malaysia.

However, selected M-REIT stocks have seen their share prices rise and in some cases prices have touched record highs as risk-adverse investors clamour for yields in a market that was getting more risk adverse.

Stewart said demand for M-REIT units by both institutional as well as retail investors was growing as evidenced by the successful listing of Sunway REIT and CapitaMalls Malaysia Trust in July. This was because there was still a strong arbitrage of 300 basis points in the returns for REITs when compared with Government bonds and 400 basis points when compared to bank fixed deposits.

Disclosing that there was some RM244bil held by individuals in fixed deposits and a further RM80bil held in savings accounts, he said much of the work of the MRMA was to explain to the retail investors that they should seriously consider M-REITs as an investment class.

As the M-REITs emerge from trading below their net asset values to trading above them they now can efficiently raise capital to purchase assets without diluting unit holders. The number of M-REITs that are trading at a premium to NAV is increasing.

Stewart said the issue of liquidity was however a concern, adding that many of the REITs did not have the liquidity to attract global investors who required that average daily turnover on the local bourse per counter exceeds US$1mil a day.

Many stocks are still tightly held and we have to get much larger in terms of number of units in circulation and market capitalisation of at least US$500mil to qualify. It is good to note that M-REITs are taking steps to increase their size and market capitalisation and this has resulted in a total market capitalisation of RM10bil now, he pointed out.

On initiatives by the MRMA to raise the competitiveness of M-REITs, Stewart said the association had made representations to the Finance Ministry and Pemandu (Performance Management and Delivery Unit) to get a tax regime that was aligned with Singapore, such as waiving the 10% withholding tax for resident and non-resident individuals, but did not succeed in the 2011 budget.

We will continue to have dialogues with the regulators. We will be meeting next month to approve the proposals from our Regulatory Sub Committee that will lay out proposals for regulatory reforms for M-REITs. All these moves will bode well for the industry. Malaysia leads the region by having such an association as MRMA, he said.

By The Star

KL plans RM1b Islamic property trust

Pelaburan Hartanah Bumiputra Bhd, a unit of a Malaysian government foundation, said it will start a RM1 billion Islamic property trusted to enable the country’s so-called bumiputeras to invest in real estate.

Bumiputeras, comprising ethnic Malays and indigenous people, will able to invest in the trust for a minimum RM500, Pelaburan Hartanah said in a statement today.

Pelaburan Hartanah is a unit of Yayasan Amanah Hartanah Bumiputra, a foundation created by the government for real estate investment in 2006.

By Bloomberg

HSBC Amanah: Islamic REITs drawing Gulf investors

DUBAI: More syariah-compliant real estate investment trusts (REITs) will come to market in Asia in early 2011 as cross-regional Islamic investors increasingly embrace the product, HSBC Amanah Malaysia's new head said.

Singapore's first syariah-compliant REIT, Sabana REIT, listed last Friday, has drawn a mixture of both conventional and Islamic investors, a quarter of them from the Middle East, chief executive officer Rafe Haneef said last Friday.

"The take-up (among Gulf investors) for future Islamic REITs will be a lot greater than that," said Haneef, who is also managing director of global markets for HSBC Amanah.

"At the moment there is no timeline for when other issuers will come out with Islamic REITs, but I would expect more in the first or second quarter of next year," he said.

HSBC Amanah was exploring other Islamic REIT opportunities in Malaysia and Singapore, Haneef said, noting it was financial adviser for the Sabana REIT initial public offering (IPO).

Sabana REIT sold 508 million units at S$1.05 (RM2.51) each in its IPO last week. The IPO was 2.5-times subscribed. Sabana REIT's shares closed at S$1.02 (RM2.44) on the Singapore stock market, after being weighed down by jittery market sentiment.

By Reuters

RM1b Amanah Hartanah Bumiputera launched

PELABURAN Hartanah Bhd (PHB), a subsidiary of Yayasan Amanah Hartanah Bumiputera, today launched a RM1 billion investment fund to help Bumiputera entrepreneurs own properties.

The "Amanah Hartanah Bumiputera" launched by Prime Minister Datuk Seri Najib Tun Razak is open to Bumiputera entrepreneurs with an initial investment of only RM500.

"Under the Syariah-compliant investment scheme, Bumiputeras will indirectly have an opportunity to own equities in major properties. The unit trust will be sold at RM1 a unit," said PHB managing director and chief executive officer Kamalul Arifin Othman at the launch of the scheme.

He said PHB was collaborating with Maybank to facilitate smooth transaction of the scheme.

"Bumiputera entrepreneurs who are keen to participate in the scheme can go to the 400-odd Maybank branches nationwide to buy the AHB units," he said.

On AHB returns, Kamalul Arifin assured investors that the returns would not be less than six per cent per annum based on the property sector's performance at the Golden Triange area.

He said the PHB would continue to identify business opportunities through acquisition of premier assets and developing properties particularly in the commercial property development sector.

"We are also looking to grow the fund size by another RM500 million by next year," he added.

Established in May 2006, PHB is an investment holding company, which currently owns properties worth in excess of RM1 billion in and around the Klang Valley.

By Bernama

KL site for Accor's largest hotel in S-E Asia by rooms

COME July 2011, Malaysia will house Accor's largest hotel in Southeast Asia by rooms.

French hotel operator Accor, which operates brands like Sofitel, Novotel, Mercure and Pullman is opening a 513-room five-star hotel in Bangsar, Kuala Lumpur.



General manager Patrick Sibourg said that the hotel, the Pullman Kuala Lumpur Bangsar, will also become the flagship for the Pullman brand in Southeast Asia.

In a recent interview with Business Times, Sibourg said that the hotel will be the third Pullman brand in Malaysia after Kuching and Putrajaya.

Based on the room configuration and the success of the Pullman brand here, the group decided to adopt this brand to target the business crowd.

It hopes to woo both the domestic and the foreign corporate businesses, especially those who visiting offices within a twenty-minute driving radius of the hotel.

Being a hotel that focuses on business, it also has a ballroom with a 1,400-capacity and ten meeting rooms.

"The performance of Hilton Sentral, Le Meridien and Hilton Petaling Jaya shows the growing confidence in the market here," Sibourg said.

"We expect to have a 60 per cent occupancy and an average room rate of RM320++ by the end of December 2012," he added.

Sibourg hopes to see occupancy rise by between 2 and 3 per cent each year.

The hotel will have some seven restaurants, cafes and bars. Since it will also be big on meetings, the hotel expects to have some 500 staff.

Revenue split from room and food & beverage is expected to be equal.

Sibourg anticipates gross operating profit to be about 30 per cent in the first year of operation.

Pullman has a 12-year contract with the developer Cygal Development Sdn Bhd. The hotel will be located in Tower 3.

Cygal Bhd (which has changed its name to Sycal Ventures Bhd) started the construction of the building in 1995 but was stalled during the 1997/1998 economic crisis.

Telekom Malaysia Bhd bought Tower 1, Plaza Cygal in early 2005, and later that year TM bought Tower 2 from the owners.

By Business Times