Guocoland project in China wins international property award

LONDON: Guoson Centre, a flagship project by Malaysia's Hong Leong Group property arm, Guocoland China Ltd, won Best International Mixed-Use Development at the International Property Awards here recently.

This award signifies the transformation of the company, from a single project company to one that does mega-size integrated development.

It means world recognition of the efforts that we have put in, and world recognition that China can actually construct quality projects that can top the world. For many years, China has not won any international recognition for its real estate, said Guocoland China managing director Violet Lee, a Singaporean who has worked in China for the past 21 years.


Violet Lee ... ‘We look at the project from the community angle.’

Guoson Centre is a sustainable and fully-integrated development project in Beijing and Shanghai that comprises shopping malls, transportation hubs, hotels, high-end residences and office blocks.

The centres are built on prime locations with transportation hubs in Beijing and Shanghai, and are modelled after the concept of a city within a city around the theme of Work, Live, Play. Their transportation hub in Beijing is the largest in Asia.

The Guoson Centres have earlier won the China and Asia Pacific Property Awards to qualify for consideration for the International Property Awards, which is held in association with Bloomberg Television. The award is regarded as the world's most prestigious accolade in the field of property development.

Lee believed that one of the reasons Guoson Centre clinched the Best International Mixed-Use Award was its emphasis on value for the community.

We look at the project from the community angle. We are giving back to the community, said Lee who listed eco-friendly features as one of the important features in her company's development projects.

We also have the mass rapid transit system which contributes to the livelihood of the people in China.

Lee is also proud of the 40,000 sq m sky garden in Guoson Centre, an open-space roof garden which the company would landscape and provide its clients with green recreational space.

Lee also said that winning the award strengthened the company's confidence in working on large-scale, integrated mixed-use developments.

Guocoland China, a Singapore-listed property investment arm of Malaysian conglomerate Hong Leong Group, was established in 1994. It has invested an estimated US$3.5bil (RM11.03bil ) in China with a land bank of 2.5 million sq m in Beijing, Shanghai, Nanjing and Tianjin.

By The Star

YTL to sell properties to Starhill REIT

YTL Corp Bhd, via its units, will dispose of four of its hospitality-related properties to Starhill Global Real Estate Investment Trust (Starhill REIT) for RM472 million.

In a filing to Bursa Malaysia today, it said the properties were Cameron Highlands Resort, Hilton Niseko, Vistana Penang and Vistana Kuala Lumpur.

YTL said it had entered into four separate sale agreements for the disposal via its direct and indirect units, namely, YTL Land Sdn Bhd, Niseko Village K.K, Business & Budget Hotels (Penang) Sdn Bhd, and Prisma Tulin Sdn Bhd.

"The disposals will enable the group to unlock and realise the fair value of the properties," it said. It said Starhill would lease the properties for an initial lease period of 15 years, and an option to renew for a further term of 15 years.

YTL said the cash proceeds from the disposal would be used entirely by its units for repayment of bank borrowings, payment of cumulative preference share dividends, redemption of preference shares, payment of special dividends, and general working capital purposes.

By Bernama

YTL Crop subsidiaries dispose of properties for RM472m

KUALA LUMPUR: YTL Corp Bhd’s four subsidiaries are selling four properties for a total indicative disposal consideration of RM472.0 million to Starhill REIT under a corporate exercise to reposition Starhill REIT as a full-fledged hospitality REIT

YTL Corp said on Tuesday, Dec 14 the subsidiaries were YTL Land Sdn Bhd, Niseko Village K.K., Business & Budget Hotels (Penang) Sdn Bhd and Prisma Tulin Sdn Bhd.

They had entered into four conditional sale and purchase agreements with Mayban Trustees Berhad (as the trustee for Starhill REIT) to dispose of the properties -- Cameron Highlands Resort; Hilton Niseko; Vistana Penang; and Vistana Kuala Lumpur.

It said the vendors, except for YTL Land Sdn Bhd and Cameron Highlands Resort Sdn Bhd -- the current hotel operator for Cameron Highlands Resort -- had entered into four lease agreements with the trustee for the lease of the properties which shall be effective upon the completion of the proposed disposals.

Starhill said in a separate announcement "the corporate exercise is part of the rationalisation exercise to reposition Starhill REIT as a full-fledged hospitality REIT".

By The EDGE Malaysia

Global Cap, WCT unit in RM688m pact

Global Capital & Development Sdn Bhd (GCD) has signed an agreement with Platinum Meadow Sdn Bhd, a wholly-owned unit of WCT Bhd, for a RM688 million commercial development in the Medini Business District at Iskandar Malaysia, Johor.

GCD chief executive officer, Keith Martin, said the 4.12-hectare development would add to the range of commercial projects already scheduled for development in the business district.

"The key plans include a media village cluster development to support Pinewood Iskandar Malaysia Studios, a US$150 million (US$1=RM3.10) film and television production facility project, which is expected to create over 3,000 jobs.

"The project is located close to the business district," he told a media briefing after signing the agreement with Platinum Meadow here today. Martin said GCD would also take a larger role in the success of Medini.

"Currently, we are conducting a feasibility study to develop Plaza Medini, a two million sq ft commercial mixed project consisting of office space, hospitality venues, service apartments and retail outlets," he said.

Meanwhile, WCT Land Sdn Bhd’s general manager (sales and marketing), Stewart Tew, said the RM688 million commercial development in Medini Business District was its second venture in Iskandar Malaysia.

"WCT’s latest investment adds to its growing presence in Medini, building on a joint venture deal with Iskandar Investment Bhd last year to develop 1Medini, the city's first residential development located in Medini North.

"It has a gross development value of RM600 million," he said.
Tew said One Medini Sdn Bhd would develop the project (1Medini), a 70:30 per cent joint venture between WCT’s unit, WCT Land and Medini Land Sdn Bhd a subsidiary of Iskandar Investment and was scheduled for completion by 2015.

The 142ha Medini Business District is located next to Medini North, the city’s lifestyle, retail and tourism hub as well as connected to Medini South, a high-end waterfront residential and leisure community.

By Bernama

KYM secures jobs from Vale

PETALING JAYA: Industrial packaging manufacturer and property developer KYM Holdings Bhd has been awarded a contract valued at RM585,911 by Vale International SA for the provision of consultancy services for the acquisition of land and development order approval.

KYM said in an announcement to Bursa Malaysia yesterday that Vale had instructed it to acquire the land for the construction of a 2.5km-long jetty and for the construction of temporary site office facilities for their proposed iron ore distribution centre and pellet plant in Teluk Rubiah, Perak.

KYM's 54%-owned Harta Makmur Sdn Bhd sold 488ha of leasehold land in Teluk Rubiah to Vale for RM196mil cash last year.

Vale has plans to invest RM9bil in an iron ore distribution centre for Asia on the purchased land.

By The Star

SunCity, Sunway accept merger proposal

Sunway City Bhd and Sunway Holdings Bhd, two Malaysian property developers, said their respective boards accepted a merger proposed by Jeffrey Cheah, chairman of both companies.

Sunway City’s board said in an exchange filing that its board considered advice from independent directors and Goldman Sachs (Malaysia) Sdn Bhd.

Sunway Holdings said in a separate statement that its board took independent advice from OSK Investment Bank Bhd.

By Bloomberg

Mah Sing proposes to buy land

MAH SING Group Bhd has proposed to buy two parcels of prime land in Section U5, Shah Alam, through its wholly owned subsidiary Mestika Bistari Sdn Bhd, for RM65.9 million.

In a statement to Bursa Malaysia, Mah Sing said the total gross area was about 72,115 sq m with some 35,244 sq m in total net area.

The price per square foot was set at RM84.91, it added.

By Business Times

Mutiara reaps RM76m from housing sales

Mutiara Goodyear Development Bhd accrued RM76.3 million from the sale of 119 terrace houses in phase one of Nadayu 92 Kajang and additional units from phase 2 of the company's maiden project in Kajang.

The 100 per cent take up rate for phase one of the project last Saturday was not only overwhelming but prompted the company to open part of the next phase of the project for sale, much to the delight of buyers.

"As of Sunday, 145 units were sold between RM433,000 and RM1.023 million each," said Executive Chairman Hamidon Abdullah in a statement today.

"The concept of gated and guarded with good communal amenities within a central green is alien in Kajang. "Proven now, this is what our purchasers are looking for," said Hamidon.

Having reached this stage, he said the company must now get on with the construction. "This will be the real test for Mutiara. The proof is when the keys are delivered," he added.

By Bernama

PHB secures anchor tenants for Nu Sentral

Both Parkson and GSC take up about 25 per cent of the 460,000 sq ft net lettable area in Nu Sentral, says Pelaburan Hartanah Bhd

Pelaburan Hartanah Bhd (PHB) has secured two anchor tenants, Golden Screen Cinema (GSC) and Parkson, for its seven-storey retail development called Nu Sentral in Kuala Lumpur Sentral.

Nu Sentral is part of a bigger 2.4ha integrated commercial development called Lot G, being jointly developed by Malaysian Resources Corp Bhd and PHB.

"Both Parkson and GSC take up about 25 per cent of the 460,000 sq ft net lettable area in Nu Sentral," PHB managing director and chief executive officer Kamalul Arifin Othman told Business Times.

The development will also have a 27-storey office building with a net lettable area of 450,000 sq ft.

Lot G, with gross development value of RM1.4 billion, is slotted for completion in 2012. It is set to be one of the developments PHB plans to inject into its recently-launched Amanah Hartanah Bumiputera unit trust scheme.

Kamalul said PHB also was in the final stage of evaluation for the development of an integrated commercial complex on a five-acre site at Jalan Ampang.

"We are talking to several parties now, and looking at starting physical work on phase one in mid-2011," he added.

The development is slotted to have a gross development value of RM1 billion and also to be injected into AHB.

PHB is the sponsor for AHB, a RM1 billion unit trust aimed at increasing Bumiputera participation in the commercial property sector.

The fund enjoys beneficial ownership of five properties, ultimately owned by PHB. They are three office buildings CP Tower, Wisma Consplant in Damansara and 26 Boulevard in Putrajaya; Tesco Setia Alam and an industrial complex in Shah Alam.

Kamalul declined to reveal the terms of the beneficial ownership agreement but said the arrangement maximises the unit trust's income distribution to ensure that unitholders will enjoy a competitive and consistent return from their investment.

Early estimates are that initial returns could be in the region of 6 per cent for the first year of the fund.

By Business Times

Forecast earnings for Bolton raised

Bolton is a "buy" with a price target of RM1.50 a share, says OSK Research, noting that Bolton has completed the acquisition of 23 acres in Ukay Perdana for RM72 million, slightly ahead of schedule.

The land comes with a ready development order and substantial earthworks done which should allow for speedy launch in 2Q11.

The project consist of 98 units of gated & guarded zero-lot bungalows with a gross development value of RM220 million.

"We raise our FY12-13F earnings by 3-18 per cent to RM53 million and RM92 million respectively to factor in the project," says OSK Research.

By Business Times

The regeneration of Sentul

When the YTL group took over Taiping Consolidated Bhd in 2001, one of the priced assets that came with it was a piece of land in Sentul.

Much of the early concept for that master plan development stemmed from the Sentul KTM Komuter station and its tracks which split the 294-acre land.


Datuk Yeoh Seok Kian ... ‘We will monitor demand for future residential and commercial projects.’

It was on this basis that the group decided to make Sentul a transport hub, leveraging on the commuter station that was already there and the golf course, which it had turned today into a private park for residents.

Sentul is located 5km north-west from the heart of Kuala Lumpur and 45 minutes from KLIA. Taiping Consolidated eventually became YTL Land & Development Bhd (YTL Land), a 64% subsidiary of YTL Corp Bhd.

Executive director Datuk Yeoh Seok Kian recently unveiled Sentul's first commercial development d7, a seven-story block comprising 20 retail stores on the ground floor, 78 office suites and 34 duplex offices in Sentul West. The project is completed and 100% sold.

Another project d6, on Sentul East, is being planned. A sky bridge connects the two. d7 was launched at RM380 per sq ft a few years ago.

It is expected to be priced about RM650 per sq ft in the secondary market. Rental rates are between RM3.50 and 4.00 per sq ft.

The seven storey project will have offices, retail and food and beverage outlets. It will be a low-rise office building with courtyard and communal spaces.

It will have two unique office layouts duplex units with skylights, pantry and spacious interior and office suites, which come as empty shells with flexible configurations.

Yeoh says the company will build residential and commercial projects with a total sales value of about RM8bil over the next seven years. That location will be among YTL Land's largest property development.

The plan was to characterise the two halves differently. Over time as Sentul West becomes more established, the community is likely to be more senior and relatively more sedate, compared with the community in Sentul East which will cater more to the up-and-going younger group of people living there, he says.

Covering 186 acres, Sentul West will be the crown jewel of the location comprising a 35-acre private park and residences, offices and retail shops.

Sentul East, which spans 108 acres, with all its vibrancy, will set the tone for modern downtown living.

Yeoh says between 15% and 20% of its targeted projects for that location has been completed since work started on that site in 2002, beginning with The Tamarind in Sentul East and subsequently The Maple in Sentul West.

We will monitor demand for future residential and commercial projects to ensure good buying interest for each project, Yeoh says, alluding to the uncertainties that plague the global economy today and the effects on Malaysia's property market.

But for now, he says there is much they can be proud of. Public infrastruture has improved significantly over the years and Sentul now had a iconic development the new KTM train station, a connecting hub that anchors Sentul West and Sentul East.

Pedestrian sidewalks and skywalk, improved traffic systems, LRT and commuter trains are also part of Sentul's transportation plan, Yeoh says.

Sentul Link also provides access to Jalan Sentul and Jalan Ipoh by connecting Jalan Mahameru at the intersection of Jalan Kuching.

This access helps alleviate existing traffic congestion at the Jalan Mahameru-Jalan Ipoh, Putra World Trade Centre intersection, he says.

When completed, Sentul will have a mixed development of 7,000 units of residential properties, commercial offices and retail outlets.

We are also trying to improve Sentul's past image of being a place that's often plagued by criminal activities, Yeoh says.

He says too often, city development projects tend to focus on decentralisation and the relocation of communities, which ultimately results in cities losing their identity.

The regeneration of Sentul is not just about renewal of the physical environment and wealth. It is also about the renewal of its community, their access to local services and their relationship with the area and the people that live and work there, he says.

YTL Land, which has a market capitalisation of about RM1.05bil, currently has a land bank (with no holding costs) of over 2,000 acres with a sales value of about RM12bil.

By The Star

BCB targets Klang Valley

KLUANG: Johor-based property developer BCB Bhd will focus on building its presence in the Klang Valley property market over the next three to four years.

Group managing director Datuk Robert Tan Seng Leong said the company was confident it would be able to compete with established players in the Klang Valley.

He said BCB was in the midst of setting up a permanent office in Mont' Kiara, Kuala Lumpur to mark its commitment to become one of the major property players in the Klang Valley.

It is only natural for us to move beyond Johor and our presence in the Klang Valley will open up opportunities for us to venture into other states including Penang, Tan told StarBizWeek after the company AGM on Wednesday.

He said BCB would be launching two maiden property projects in the Klang Valley in the third and the fourth quarters of 2011.

The first project comprises three bungalows, priced from RM3mil, at Lorong Awan Jawa, Taman Yarl.

The second project is Secret Garden @ Kiara on a 2.02ha site beside Solaris Mont' Kiara, which consists of 352 condominium units in five 30-storey blocks with a gross development value of RM500mil.

Tan said the units, with built-up areas ranging from 1,400 to 4,000 sq ft would be priced at RM650 per sq ft and BCB expected the project, when completed in three years, to generate a pre-tax profit of RM100mil.

Being the new boy on the block, our selling price per sq ft is slightly lower than what the established players offer and we believe this will be our strong point to attract buyers, he said.

He said BCB had engaged building consultants and landscape architecture companies from Shanghai for Secret Garden @ Kiara and would award the construction of the project to a leading Japanese or South Korean contractor.

Tan said BCB would bank on its close relationship with property companies in China, especially from Beijing and Shanghai, in marketing the project to buyers in China as many rich Chinese were looking to buy properties in South-East Asia.

He also said BCB was actively looking for land in the Klang Valley for future development and was willing to undertake projects on joint-venture basis with land owners.

For the financial year ended June 30, BCB recorded net profit of RM2.12mil on revenue of RM91.07mil against RM3.6mil and RM93.07mil respectively the previous year.

By The Star

The perils of the American dream

There was this tagline The American Dream is truly attainable! in a local newspaper advertisement marketing US properties.

The advertisement highlighted earning an annual rental income with a three-bedroom detached house of up to 20%, which in Malaysia, would be considered a bungalow.

The nice house and attractive proposition aside, is that American dream really attainable? And if it is, is it sustainable?

If it were, the US government would not need to pump nearly US$1 trillion into the economy and neither would US President Barrack Obama speak to CEOs to seek their help to ease unemployment which is running at more than 9%.

Malaysia's unemployment rate is 3.2%, which is technically considered as full employment. But this piece is not about the American economy, or the Malaysian economy.

It's about the pursuit of the American dream which Hollywood and savvy marketing have enticed us with over the years. That American dream constitues a nice house in a middle class neighbourhood, sons who drive to college, daughters who are trendily dressed in class.

They take annual holidays and are up to date with the latest trends and lifestyle. They go after the latest gadgets that technology has spawned. Sounds familiar? But that lifestyle has also incurred high household debts which in some cases has resulted in foreclosures in the United States.

The situation in United States today is due to choices made years ago. It did not begin with Lehman Brothers fall in 2008, it started way before because of materialism and consumerism.

The Americans have been so good at marketing and advertising, they have made consumerism and marketing into an art and the Americans bought into it.

They are selling that same dream to Asia and other parts of the world just as they have very successfully sold us the various gadgets that technology has spawn.

Out of a population of 28 million, Malaysia has a working class of 12.5 million, of which two million are foreign workers. Of the remaining 10.5 million, 1.5 million are in the public sector.

Only 5.5 million are formally employed in the private sector. The remaining 3.5 million are making a living as traders.

Of late, the authorities and the press have been talking about being in the middle income trap. The middle income group has a monthly salary of between RM2,000 and RM10,000.

Most of us belong to this group whose profile is a house, or several houses, in the Klang Valley and the major towns of Malaysia, with school going children in private or overseas schools and universities. It also includes young graduates who earn slightly less than RM2,000 but who within a short time, move from lower income bracket to the lower middle income group.

This middle income group comprises about half of the 12.5 million working population, who are in a way pursuing that American or Malaysian dream.

The resulting trend is that house buyers no longer seek to buy a house, but to buy a lifestyle.

And developers prefer to build lifestyle homes, because the margin is greater. Lifestyle housing also gives them the added edge of branding themselves.

If it is an apartment, the bigger the better. Buying a house is no longer enough, one has to buy a lifestyle house with designer fittings and sanitary ware.

Education for the children is a premium. Technologically advanced gadgets and branded attire completes the picture.

In short, technically we are geographically in a different location but the people and that American dream remains the same.

Some 30 to 40 years ago, the manufacturing sector was the mainstay of the American economy. It now accounts for 12% of US jobs. Today, services, creation and innovation accounts for a large chunk of it.

In Malaysia, manufacturing used to account for about 35% of gross domestic product (GDP). Manufacturers used to be the largest employers.

Today, contribution from that sector has dropped to 29% of GDP, giving employment to a third of the 5.5 million private sector salaried workers.

The service sector is expected to be the largest employer this year, constituting more than half of the total employment, followed by manufacturing.

For years, the problem in the United States was hidden by cheap debt. We have that today in Malaysia. Banks are pushing attractive mortgage terms. Another way to finance that lifestyle is to leach from the Employees' Provident Fund to finance home mortgages, children's overseas education and private investments in unit trust.

And so the baby boomers (those born in the the 1950s and 1960s) have to postpone their retirement because banks are now approving loans up to the age of 65 or 70.

Easy debt has become a millstone in latter years. Come 2011, house buyers who purchased properties with the 5/95 scheme and variations of it, will be getting the keys to their properties. They paid a downpayment of only 5% of their property price in the first quarter of 2009.

They will now have to cough out the other 95%. Americans are slowly relinquishing that American dream. We are aspiring towards it. Is the American or Malaysian dream sustainable? Food for thought.

Like other middle class wage earner, assistant news editor Thean Lee Cheng is herself a victim of the American dream.

By The Star

Taiwan plans special property tax

Taiwanese authorities said Friday they plan to levy a special property tax in a bid to curb rising real estate prices and narrow the widening income gap.

The finance ministry is proposing a minimum 10 percent special tax on non-residential properties that change owners frequently, aimed at countering speculative activities, said an official, without elaborating.

The proposal, which requires parliament's approval, is expected to take effect as early as March 2011, according to local media.

Taiwan's property prices have been on the rise on the back of the island's recovery from the global recession last year.Meanwhile, the gap between the island's richest and poorest has continued to widen according to various government figures.

The ministry is also planning a "rich man's tax" on high-end products, services and trade to help reduce the gap between the island's haves and have-nots.

The most prosperous 20 percent in Taiwan reported average disposable incomes of 1.79 million Taiwan dollars (56,000 US) last year, or 6.34 times more than the income of the poorest 20 percent, according to government figures.

This was the highest since 2001, said the Directorate General of Budget, Accounting and Statistics, which attributed it to a global trend of growing inequality.

By The Star

Firm buys 14.1ha due to overwhelming response

Vast: Teh showing a model of the Garden Residence project.

Following the overwhelming response towards the freehold Garden Residence (GR) in Cyberjaya, Mah Sing Properties Sdn Bhd (MSPSB) has acquired another 14.1ha of prime freehold land adjacent to the GR township for the Clover@Cyberjaya project.

The Clover@Cyberjaya will be an extension to the 46.5ha Garden Residence and will have the same concept with gated and guarded living environment.

MSPSB chief operating officer Teh Heng Chong said the intention was to create an exclusive enclave on this new land.

“This is the company’s future development which will be launched sometime next year. Registration is now open for the Clover properties which are two- and three-storey semi-detached homes, said Teh.

He said the Garden Residence, which the company was focusing on now, comprised medium- to high-end residential homes of two and three-storey Super-link, semi-detached and three-storey bungalows within four precincts. They were conceptualised as a self-sustaining residential development.

To create a resort lifestyle environment, each precinct will have its own perimeter fencing and guard house to ensure an exclusive living environment and better security.

There are a total of 676 units in all four precincts combined. However the 69 units of the three-and-half-storey Blossom garden bungalow in Precinct 4 or known as the Blossom Precinct, is the most exclusive edition of the Garden Residence.

Priced at RM3.2 million, these premier luxury bungalows boasts a designer central park, a rooftop garden with jacuzzi, 9+1 bedrooms/nine bathrooms, private lift and a dedicated entertainment floor all within a spacious built-up of approximately 7,796 sq ft.

“Once completed, the residents of Garden Residence will have access to The Promenade, an integrated community clubhouse and retail amenities. It is a self-contained township so to speak, with lush landscape surrounding the entire development,’’ added Teh.

He said Mah Sing was conscious to nature thus green features have been cleverly integrated into these homes.

The units in Precinct 1 (Cassia), Precinct 2 (Evergreen) and Precinct 3 (Jacaranda), is currently 85% sold within six months of launch at the sub-sale level before they were completed. The Blossom Precinct is open for registration.

According to Teh, the homes have a potential of appreciating in value due to the demand in residential properties in this part of Kuala Lumpur.

Teh said, the homes come with green building features such as rain harvesting system, solar powered water heaters, surface run-off collection, ample natural lighting in each home with north-south orientation and light colour roof material for better heat and light deflection.

Prices for the resort homes in Precinct 1-3 ranges from RM858,800 to RM2.1 million with a built-up of approximately 2,845 sq ft to 4,514 sq ft.

Garden Residence is located within the Multimedia Super Corridor in Cyberjaya and is well connected to the Maju Expressway, North-South Expressway, Damansara-Puchong Expressway, North-South Central Link, South Klang Valley Expressway and the North Klang Valley Expressway.

“With such an extensive linkages, residents will be able to reach their destinations conveniently. The ERL station is just a stone throwaway and the KL Sentral or KLIA just takes less than 20 minutes,’’ said Teh.

Due to its strategic location, Teh added that apart from Cyberjaya, Garden Residence has the potential to enjoy a large market catchment from Putrajaya, Puchong, Subang Jaya, USJ, Petaling Jaya, Shah Alam, Cheras, Seri Kembangan and Seremban.

By The Star

SP Setia on track to hit RM3b sales target

Property developer SP Setia Bhd declined to comment on speculation of a merger but stressed that it is on track to achieve RM3 billion sales target for 2011.

The Edge weekly magazine recently discussed the potential of a merger between SP Setia and Sime Darby Bhd's property unit.



Asked if SP Setia is keen on such a deal after a slew of tie-ups among big local property developers recently, president and chief executive officer Tan Sri Liew Kee Sin declined to comment except to say that the group will continue to grow and compete.

SP Setia's sales target for 2011 would be 40 per cent more than the RM2.31 billion it made last year.

"For the financial year 2011, we expect all our existing projects in the Klang Valley, Johor and Penang to continue doing well," Liew said at a media briefing in Shah Alam, Selangor yesterday.
"In addition, we will shortly be launching KL Eco City, our exciting new integrated green commercial development opposite Mid Valley City which should contribute strongly towards the targeted RM3 billion new sales," he added.

SP Setia plans to launch the RM6 billion "green" mixed-development by January or February next year, he said.

The project will be developed in three phases over at least 10 years and will be a joint venture with Kuala Lumpur City Hall (DBKL), which owns the 9.7ha leasehold land in the Kampung Haji Abdullah Hukum area.

SP Setia is also planning a real estate project with a gross development value of RM1.4 billion in Australia by March or April next year.

It will be on 0.4ha of land in Melbourne which SP Setia bought for RM92.4 million on March 29 this year.

The company expects to build about 800 apartment units and some retail shops there.

The developer has begun expanding overseas to markets such as Vietnam and China to tap Asia-Pacific's economic recovery.

Liew said it is keen to grow its landbank in Malaysia which stands at 1376ha of undeveloped land in various prime locations within the Klang Valley, Penang and Johor. This is expected to keep it busy for at least another decade.

SP Setia would build new townships or integrated commercial developments on any new land.

"We love townships. They are able to generate big volumes for a long period of time," he said.

Liew expects 2011 to be exciting and busy for the group and also the property sector at large.

"Competition will be keen with more developers gaining confidence and launching new products which is a good sign of the health of the market as a whole," he said.

For the year to October 31 2010, SP Setia's net profit and revenue reached RM251.8 million and RM1.7 billion, rising 47 per cent and 24 per cent, respectively.

Projects which contributed to the group's strong performance included Setia Alam and Setia Eco-Park at Shah Alam; SetiaWalk at Pusat Bandar Puchong; Setia Sky Residences at Jalan Tun Razak; Bukit Indah, Setia Indah, Setia Tropika and Setia Gardens in Johor Baru; and, Setia Pearl Island and Setia Vista in Penang.

By Business Times

Townships still a growth kicker for SP Setia

While township development will continue to be a major earnings catalyst for SP Setia Bhd, other bonus re-rating catalysts will be the successful launch of its RM6.0 billion KL EcoCity by January or February next year, says OSK Research.

In a research note today, OSK said the launch of Phase One of the six to 10-year development will likely comprise 12 blocks of boutique offices valued at some RM60 million each, which would be sold en bloc.

"As we understand that some small and medium enterprises (SMEs) are keen in acquiring these office blocks, the launch by first quarter of calender year 2011 looks likely to be well-received and will provide the necessary momentum to kick-start the entire development," said the research firm.

It said the next growth kicker will be the continuing progress at the RM5 billion Setia City, an integrated commercial city in the Setia Alam township.

According to OSK, Setia City Mall, with 60 per cent of the retail space now taken up, is expected to be completed by late next year and open by mid 2012 and give the whole commercial city added impetus.

Setia City will also have a medical centre, hotels, transportation hub as well as a convention centre.

Meanwhile, MIDF Research said performance in financial year 2011 is expected to continue to be underpinned by SP Setia's existing projects in the Klang Valley, Johor Bahru and Penang.

In a filing to Bursa Malaysia yesterday, SP Setia reported a higher pre-tax profit of RM330.967 million for the year-ended Oct 31, 2010 from RM231.112 million in 2009.

The profit was achieved over a bigger revenue of RM1.745 billion against RM1.408 billion previously, with income principally derived from its property development activities.

MIDF said it was not expecting an upward revision in its earnings forecast for SP Setia in view of a general slowdown anticipated in the sales of residential units next year.

By Bernama

SP Setia Q4 net profit up 32% on higher sales

SHAH ALAM: SP Setia Bhd's net profit rose 32.2% year-on-year to RM75.2mil in the fourth quarter ended Oct 31 due to higher sales and gain from the disposal of Tesco Hypermarket in Bukit Indah, Johor.

Revenue for the quarter grew by 41.7% to RM558mil while earnings per share increased to 7.39 sen from 5.59 sen previously.

For the full financial year 2010 (FY10), the group achieved a net profit of RM251.8mil from revenue of RM1.7bil, which was 47% and 24% higher respectively from the previous financial year.


Tan Sri Liew Kee Sin ... ‘For financial year 2011, we targ et to achieve RM3bil in sales.’

President and chief executive officer Tan Sri Liew Kee Sin said the positive results were mainly due to the group's innovative marketing campaigns, Best for the Best and Invest in SetiaHomes.

Speaking after the company's results briefing yesterday, Liew said SP Setia sales for the year stood at RM2.31bil, which was 40% higher than FY09.

For financial year 2011, we target to achieve RM3bil in sales as all our projects in Klang Valley, Johor Bahru and Penang continue to do well.

We will soon launch our KL Eco City, an integrated green commercial development opposite Mid Valley City, he said.

Liew is also looking forward to SP Setia's 800-apartment project, which will be launched in Melbourne in March or April 2011.

To date, SP Setia has a land bank of 3,430 acres.


The KL Eco City project has a gross development value of RM6bil while the Melbourne project RM1.4bil.

For FY10, the board has proposed a final dividend of 14 sen per share less income tax of 25%.

This would add to the total dividend to 20 sen less income tax of 25% for FY10, representing a payout of about 60.6% of the group's net profit.

Meanwhile, RAM Ratings has reaffirmed its AA3 rating for SP Setia's RM500mil nominal value 2% redeemable serial bonds with 168,151,302 detachable warrants (2007/2012) with a stable outlook for long term.

The rating reflects SP Setia's strong business profile as a leading property developer in Malaysia, said RAM head of real estate and construction ratings, Shahina Azura Halip, in a statement yesterday.

With its strong branding and innovation, SP Setia is expected to continue churning impressive sales based on its track record of annual sales growth over the past decade irrespective of economic cycles.

On the flip side, the rating is moderated by the uncertainties of SP Setia's foreign ventures.

The company's debt is expected to increase from RM1.29bil (as at end-July) to about RM2.1bil, some RM400mil higher than an earlier projection.

SP Setia has, however, redeemed RM250mil of its bonds on Nov 23.



By The Star

EPF: RM1.9b invested in property sector

The amount invested in the property sector constituted 0.44 per cent of the EPF's total investment of RM420 billion.

The Employees Provident Fund (EPF) has invested RM1.89 billion in the property sector which in return contributed RM67.29 million to its revenue in the third quarter of this year.



Chairman Tan Sri Samsudin Osman said the amount invested in the property sector constituted 0.44 per cent of the EPF's total investment of RM420 billion.

"As a pension fund which aims at providing a comfortable life for retirees, EPF's investments were made through a due diligent process to benefit the contributors in the long run," he said at the opening of the EPF Kuantan building in Bandar Indera Mahkota, Kuantan, yesterday.

Sultan Ahmad Shah of Pahang officially opened the RM12.8 million building which was completed in March 2006. Present was the Tengku Mahkota of Pahang Tengku Abdullah Sultan Ahmad Shah.

Samsudin said the EPF had also invested in other sectors and subscribed to the government's securities, bonds and equities and each decision was made after a thorough study to minimise risk.

The approach has allowed the EPF to give competitive dividends every year, which was the main objective for the establishment of the retirement fund.

As for Pahang, he said there were 168,000 active contributors in the state with a total savings of RM5.27 billion. Some 94,388 of them are in Kuantan with their savings totalling RM3.08 billion. Samsudin said there were 9,194 employers in Kuantan who contributed about RM42 million monthly to the EPF.

By The Star

Rehda Penang: High cost of land the reason

The Real Estate and Housing Developers' Association (Rehda) of Penang is claiming that the high cost of land is the main reason for houses being sold at high prices in the state.

Its chairman, Datuk Jerry Chan Fook Sing, said the high cost of land was also the reason for developers' inclination towards building upmarket homes in the state.

The limited land in Penang Island has caused landowners to sell their land at very high prices and this directly impacts the price of houses, he said.

"When the land is bought for a high price, developers are forced to sell the houses at a high price as well.

"Therefore it is not fair when only the developers are blamed in this matter," he told reporters in George Town yesterday.

To ensure affordable housing prices for all levels of society in the state, the government would have to find a suitable mechanism to overcome the problem, he said.

A recent report quoted Senior Fellow at the Social, Economic and Environment Institute (Seri) Dr Michael Lim Mah Hui as saying that the average price of a house in Penang was RM540,000 last year.

The report also said the price of house in the state exceeded that of the average house price in Kuala Lumpur at RM390,000.

By Bernama

China's property bubble getting worse

BEIJING: A Chinese government think tank has warned the country's real estate bubble is getting worse, with property prices in major cities overvalued by as much as 70 per cent, state media reported Thursday.

Of the 35 major cities surveyed, property prices in eleven including Beijing and Shanghai were between 30 and 50 per cent above their market value, the China Daily said, citing the Chinese Academy of Social Sciences.

Prices in Fuzhou, capital of the southeastern province of Fujian, had the worst property bubble with average house prices more than 70 per cent higher than their market value, according to the survey conducted in September.

The average price in the 35 cities surveyed was nearly 30 per cent above the market value, the report said.

Property prices have remained stubbornly high despite the government adopting a slew of measures since April including hiking minimum downpayments to at least 30 per cent and ordering banks not to provide loans for third home purchases.

Prices in 70 major cities were up 0.2 percent in October from the previous month and 8.6 percent higher than a year ago, official data showed.

The increase came after prices gained 0.5 per cent month on month in September, which was the first increase since May.

Massive stimulus measures taken since 2008 to fend off the financial crisis injected huge amounts of liquidity in the market and have been blamed for fuelling real estate prices.

"The government target is not clear and policy is incoherent," CASS senior research Ni Pengfei was quoted saying.

By AFP

Stratified property issues need attention

KUALA LUMPUR: Developers of stratified properties should be more transparent with buyers about the buildings' overall maintenance cost.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang said there had been a lot of unresolved problems, especially on the collection of maintenance fees, in such properties.

Yeow said there were two million strata-titled residential units and the problem was growing but the resolution had not been fast enough.

Speaking on the sidelines of the 5th Property Management Seminar here yesterday, he said even before the purchase of such properties, buyers must be informed of the maintenance fees and processes involved.

He said the Commissioner of Buildings (COB) should also act more forcefully and speedily to overcome the problem as it had the authority to deal with houseowners who did not pay maintenance fees.

The COB must send a message because they have the power to attach the property of the defaulting condominium owners, he said.

On grey areas involving stratified properties such as fees for car parks in a mixed complex, Yeow said there was a need to find a correct formula on how to handle and share the fees which had different users.

By Bernama

i-City plans second data centre worth RM300mil

SHAH ALAM: i-City, a subsidiary of listed I-Bhd, plans to build a second data centre with two towers worth RM300mil.

The company would form a strategic alliance with HDC Data Centre to develop the centre and the first tower was expected to be completed in three years, I-Bhd chief executive officer Eu Hong Chew said yesterday.

i-City's existing data centre was fully tenanted, he told reporters after signing a pact with HDC for the development of a green data centre here.

The first 50,000 sq ft data centre was completed a year ago and HDC occupies half the space.

It was envisaged that i-City would focus on building aspect of the development while HDC would be responsible for the equipment and facilities, Eu said.

By Bernama

Bolton selling Campbell Complex owner for RM50mil

PETALING JAYA: Bolton Bhd plans to sell its unit that owns Campbell Complex in Kuala Lumpur for RM50mil.

This is part of the group's plan to dispose of its non-core assets and investments that do not yield reasonable returns.

Bolton told Bursa Malaysia yesterday that it had entered into a sale and purchase agreement with Shapadu Resources Sdn Bhd for the disposal of its entire stake in Lim Thiam Leong Realty Sdn Bhd, which owns the 20-storey complex.

The disposal will raise cash, which will be used to meet the working capital requirements and/or to repay borrowings of Bolton, it added.

Bolton said it would record a gain of RM3.16mil from the disposal, resulting in an increase in its consolidated earnings per share of 11.27 sen based on the present number of ordinary shares in issue for the financial year ended March 31.

By The Star

Bolton agrees to sell Campbell Complex

BOLTON Bhd has agreed to sell its 20-storey commercial complex known as Campbell Complex to Shapadu Resources Sdn Bhd for RM50 million.

The deal means selling its 100 per cent stake in Lim Thiam Leong Realty Sdn Bhd which owns the complex in Kuala Lumpur.

The sale is in line with its plan to sell non-core assets and investments that do not yield reasonable returns.

It will use the RM3.16 million gain from the sale to to repay bank borrowings and as working capital.

By Business Times

Starproperty.my d2.TV online portal brings new dimension to property hunt

PETALING JAYA: Need information on decor and design, or on the dos and don’ts on improving your dream home?

Look no further than StarProperty.my’s new online portal d2.TV featuring celebrities, real estate experts and rising stars of the realty and property market.

A first in Malaysia, d2.TV will take viewers through heaps of information and entertaining topics about the property and home decor lifestyle.

Celebrities like Xandria Ooi, Yuri Wong, Eric Leong and Jojo Struys will introduce viewers to beautifully designed homes and properties.

Videos will be uploaded weekly with each episode lasting not more than 10 minutes, said head of StarProperty.my Martin Chow.

“Viewers can choose episodes from the series in which they are interested in and watch them as they please,” Chow said during the launch of the portal by Star Publications (M) Bhd group managing director and chief executive officer Datin Linda Ngiam at Cartrade, The Curve yesterday.

Chow said d2.TV is aimed at working adults looking for a fun and informative way to learn about buying and selling properties and quality interior design.

“It brings a fresh twist to searching for property and learning about interior design.”

Chow added d2.TV was also aimed at grooming up-and-coming realty millionaires. Ngiam said the portal had taken property search engines to a “whole new level”.

“When we launched StarProperty.my a year ago, we promised the portal will be more than a search engine,” Ngiam said.

“This is a testament to The Star’s passion and commitment to providing great content.

“And this is just the beginning.”

By The Star

Qatar MRT project on Gamuda's radar

GAMUDA Bhd said it is eyeing opportunities in the massive US$45 billion (RM141 billion) mass rapid transit (MRT) project Qatar is planning to build next year.

Qatar is building the new infrastructure as it prepares to host the 2022 Fifa World Cup finals.



Gamuda group managing director Datuk Lin Yun Ling said the MRT system will be part capital city Doha's key transport infrastructure.

"The Qatari government needs the entire system to host the event and tender is expected to be announced next year, and when that happens, Gamuda will be ready to submit its tender," Lin told reporters after its shareholders' meeting in Shah Alam, Selangor, yesterday.
Lin said Gamuda has a good track record and is well-positioned to take part in construction projects in the Middle East, especially in Qatar as it is involved in the ongoing construction of the New Doha International Airport.

Gamuda's other on-going projects in the Middle East include the Dukhan highway in Qatar and the Sitra causeway bridges in Bahrain which are due to be completed by year-end.

On its property development projects, Lin said the company expects to rake in a record RM1 billion worth of sales this year and another RM800 million in unbilled sales.

Gamuda is anticipating total sales of RM5 billion in the next two years, of which RM2 billion will be from local sales while the remaining RM3 billion from its Gamuda City project in Hanoi.

"The property market is hot at the moment due to low interest rates, and banks have a lot of loan provisions on this sector and people do not want to sit on cash and lose its value preferring to get involved in assets.

"Our landbank is ample and our priority is also to sell low-yielding landbank and develop innovative developments for other strategic landbanks." Lin added.

On the greater KL MRT project, Lin said the Cabinet has yet to approve its joint proposal with MMC Corp Bhd.

He said the government, Prasarana (Syarikat Prasarana Negara Bhd) and Spad (Land Public Transport Commission) will decide on the location of train stations, railway alignment, railway network and get feedback from the public and other stakeholders before Gamuda and MMC take up the offer to deliver the RM45 billion project.

By Business Times

Opal Damansara wins two prestigious awards

Opal Damansara by Sunway Damansara Sdn Bhd

Opal Damansara in Sunway Damansara has recently achieved two significant milestones due to its impressive design and layout. It is a 248-unit semi-d condominium that was developed by Sunway Damansara Sdn Bhd, a subsidiary of Sunway City Berhad and designed by Arkitek Maju Bina.

Defying the conventions of condominium living, Opal Damansara is inspired by a vision of a tropical paradise. Low-density units are nestled amidst lush landscaping to create a pristine and private retreat for those who crave a resort-living lifestyle in the city.

The semi-d concept whereby every unit in Opal Damansara is a corner has proven to be popular and well received. Residents enjoy the exclusivity of having only one attached neighbour. The Group has also ensured that residents are able to enjoy an enviable ambience within the project development by allocating 30% of the development for landscaping.

During the 3rd Asian Habitat Summit 2010 at Fukuoka, Japan, Sunway Opal Damansara Condominium was awarded the 2010 Green Asian Townscape Award at the annual commending grand ceremony.

The Asian Habitat Summit is held once every two years and the theme for the third summit was “Green Asia – Picturesque Cities.” The organisers of the 2010 Green Asia Townscape award are Fukuoka Asian Urban Research Center, United-Nation Habitat for Asia and The Pacific, Asia Townscape and Design Society and China Real Estate Association.

This forum encourages members to discuss the construction of residential environment in the Asian process of urbanization, exchange research results and boost sustainable development of the Asian undertaking of residential environment.

Another significant milestone for Opal Damansara was the win of the 2010 Design Grand Award of Chinese Residential Projects by the World Association of Chinese Architects (WACA).

WACA provides a platform for elite Chinese architects in the world to publicize their achievements and expertise. Through interaction and academic exchanges, it is hoped that WACA can raise the innovation and creativity amongst architects to serve the community. The 2009 Design Award is definitely a positive step towards that direction.

Sunway City Berhad Property Development Division, Malaysia managing director Ho Hon Sang said, “We are pleased that Opal Damansara has won these awards as it reflects the recognition that this development deserves based on its innovative design that promotes a green and sustainable lifestyle. We are also heartened to collaborate with Arkitek Maju Bina as they have provided solid consultation advice to enhance the living features for residents.”

“A lot of thought and effort has been invested in this project to create a practical living environment that is both contemporary and functional. Moving forward, homebuyers can certainly expect more innovative property development projects from the Group that echo these same values of excellence.”

Apart from the plethora of plants that make up the lush green surroundings, residents will find a wide array of facilities for their daily comfort that include landscaped gardens, children's play area, swimming pools, gymnasium, tennis and badminton courts, reading room, multi-purpose hall, surau and a gazebo.

Opal Damansara is located within the 400-acre integrated Sunway Damansara township with good access and proximity to facilities, commercial centers and shopping malls. The township is one of the most sought-after locations in Petaling Jaya.

Opal Damansara has also enjoyed good price appreciation which commensurate with this award-winning project. In short, this is another stellar project by the leading master community developer.

By The Star

MK Land sticks to strategy to cut debt

MK Land has so far locked in RM138 million in joint-venture projects, which will help it settle its loans in stages.

PROPERTY developer MK Land Holdings Bhd will continue with its strategy to form joint ventures for land development and selling land that it does not plan to develop to reduce its debt.

The group has settled borrowings by RM98 million to RM398 million through asset realisation exercises and more stringent cash flow management. In 2008, it was riddled with some RM550 million in debts.

Chief operating officer Lau Shu Chuan said MK Land has so far locked in RM138 million in joint-venture projects, which will help it settle its loans in stages.

Over the last two years, the group has made RM162 million in land sale after disposing of 9.3ha land in Damansara Perdana for RM150 million and 2ha land in Cyberjaya for RM12 million.
For the financial year ended June 30 2010, MK Land posted a RM11 million net profit on the back of RM308 million in revenue.

"We have put in place various strategies to improve operations and standards of services to strengthen relationship with bankers, contractors, consultants and purchasers," Lau said after the group's annual general meeting in Kuala Lumpur yesterday.

MK Land has some 2,025ha of landbank, of which 1,620ha is located in Lembah Beriah, Meru Perdana and Bukit Merah in Perak.

Lau said the group is waiting for the completion of the Alor Pongsu interchange in Perak before launching property development projects there.

"The construction is said to start next year and will be ready in two years. Hopefully we can start developing the land by then."

The Alor Pongsu interchange will ease the entries and exits to the North-South Expressway and is expected to boost the development in Bandar Lembah Beriah.

Meanwhile, in the Klang Valley, MK Land will continue with its ongoing mixed development projects in Damansara Perdana - three-storey semi-detached house projects namely Rafflesia, Armanee Terrace and Metropolitan Square.

It is also undertaking a RM3 billion project to develop affordable housing in northern Bangalore, India.

MK Land is partnering two other companies in the project - Embassy Group of India and MKN Embassy Development Sdn Bhd.

The project will be undertaken in four phases and developed within five years. It will potentially build 16,000 affordable houses, ranging from 650 to 1,200 sq ft, and about 560 retail outlets.

By Business Times

MK Land stays open to mergers If there is a strategic opportunity, group will not hesitate to consider

SUBANG JAYA: MK Land Holdings Bhd is not ruling out the possibilities of merging with other property players, according to chief operating officer Lau Shu Chuan.


MK Land’s previous project – the Metropolitan Square condominium in Damansara Perdana township.

If it (potential merger) is better for the company, why not? We're always open, he said after its AGM yesterday.

Lau said the group did not mind if someone with deep pockets was interested in such a proposition.

However, he said the group had yet to receive any proposals.

Lau added that they would look at the potential value if such an opportunity arose.

Commenting on the mergers and acquisitions in the property industry, Lau said companies were leveraging on one another and merged if there was a synergy.

We believe there is still room for niche market players, he said, adding that the product and location of the property matters if its landbank was strategic.

Meanwhile, Lau said the group hopes to achieve better results in the current financial year ending June 30, 2011 (FY11) boosted by ongoing projects and new launches.

He said the group had achieved improved financial results year-on-year since FY08.

For the first quarter ended Sept 30, MK Land posted a net profit of more than doubled to RM3.4mil from RM1.2mil a year ago.

However, revenue for the period was lower at RM61.7mil against RM80.8mil previously.

MK Land posted a net profit of RM11.2mil on revenue of RM323.5mil in FY10.

Our financial performance have been on an uptrend. Arising from this, we expect to maintain this kind of growth going forward, Lau said.

He said its main contributions would come from its projects in the Klang Valley as its other projects was somewhat weaker.

We're talking about RM100,000 to RM200,000 per unit for houses outside Klang Valley and a unit in the Klang Valley is between RM1mil and RM2mil, Lau explained.

The group has also sold some of its assets and the cash generated was used to pare down its borrowings.

Lau said it sold 23 acres of its land in Damansara Perdana and five acres of land in Cyberjaya.

The group had managed to pare down its debt to RM398mil as at June 30 from RM550mil in FY08 and intends to trim it further.

Lau said the group had managed to lock-in over RM300mil from the sale of its land and joint venture projects.

He said the money from selling its land had come in but expects cash inflow from its joint ventures to flow in over a period of time.

Our gearing of 0.36 times is not a frightening figure but we realised that we are paying a lot of finance charges.

The group still has capacity to borrow more. We're not over-geared. We may gear up ourselves in future if needed, Lau said.

MK Land has a total landbank of about 5,000 acres worth some RM800mil on its book.

In terms of market price, it could be higher, Lau said, adding that some 4,000 acres of its land were in the northern part of peninsula.

By The Star

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