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Thursday, January 6, 2011

Former CapitaLand chief plans S$1b property trust IPO

SINGAPORE: Perennial Real Estate, a firm set up by former CapitaLand retail chief Pua Seck Guan, has hired Goldman Sachs, DBS and Standard Chartered to help it raise as much as S$1 billion (RM2.38 billion) in a property trust initial public offering (IPO), sources with knowledge of the deal said yesterday.

Perennial intends to list a business trust in Singapore that will comprise mostly shopping malls in China, said the sources, who declined to be named because the matter has not been made public.

Pre-marketing of the deal is scheduled to begin later this month with the formal launch of the IPO slated for the end of March, the sources added.

A spokeswoman for Perennial, which is involved in the development and management of malls as well as property funds, said the firm has businesses in China, India and Singapore and it "continues to explore opportunties in these markets".

The three banks either declined comment or could not be reached.

By Reuters

Wednesday, January 5, 2011

Tomei to sell KL land to Oasis

PETALING JAYA: Jeweller Tomei Consolidated Bhd will dispose of six pieces of land in Kuala Lumpur to Oasis Properties Sdn Bhd for a total of RM4.6mil as part of its on-going cost optimisation and business streamlining strategy,

The disposal will allow the jeweller to re-organise its resources and focus on its core business, it told Bursa Malaysia.

In six separate announcements yesterday, Tomei said several of its wholly-owned units entered into six sale and purchase agreements on Dec 27 to sell its freehold land.

By The Star

Tuesday, January 4, 2011

PLUS connection in MK Land's sale of land

It was a simple land sale but MK Land Holdings Bhd's deal raised eyebrows because the buyer shares the same set of shareholders for another major deal - the RM26 billion bid to take over PLUS Expressways Bhd.

MK Land announced yesterday that little-known Foster Estate Sdn Bhd plans to buy two pieces of land in Damansara Perdana, Selangor, for a combined RM130 million.

According to the Companies Commission of Malaysia, Sumami Kiman and Saharuddin Abdullah hold one share each in the RM2 company.

These two were also the same shareholders of Jelas Ulung Sdn Bhd, which is making the bid to buy PLUS.

Jelas Ulung was also rumoured to be the vehicle for Tan Sri Halim Saad although this was denied by people close to the businessman.

Foster Estate was set up on November 4 2010 and is based in Klang. Its core activity is property investment.

According to MK Land chief operating officer Lau Shu Chuan, proceeds from the land sale will be used to carry out existing projects and new ones over two years.

The deal is due to be completed by the end of this year. In a statement to Bursa Malaysia, MK Land said it has no immediate plan to develop the land.

MK Land is selling two parcels of land in Damansara Perdana, comprising 7.4ha and 3.3ha for RM100.8 million and RM29.2 million, respectively.

The developer had bought the land in April 2000 for RM5.9 million and RM2.4 million, respectively.

Damansara Perdana sits next to the thriving Kota Damansara township and it is also close to the new planned development of the Rubber Research Institute Land in Sungai Buloh.

By Business Times

Property and other loans growth poised to slow down

PETALING JAYA: Loans growth is poised to slow down as lending indicators are showing signs of moderation in credit expansion, said analysts.

ECM Libra Investment Research expects household loans growth to slow down as property sales cool down amid credit tightening and policy measures to curb excessive speculative activities.

In a report issued yesterday, ECM Libra said the loans growth momentum could be curbed by slow deposit growth which has continued to lag credit expansion at 6.5% year-to-date or 7% on an annualised basis.

Despite slower growth rates, leading loans indicators remain at comfortable levels considering that absolute levels of loan applications and approvals stayed close to peak levels. Its calendarised loans growth forecasts is 8.4% for this year and 10.9% for last year, according to AmResearch Sdn Bhd's report yesterday.

AmResearch added that net interest margins might see less pressure with the average lending rate stabilising.

OSK Research Sdn Bhd said in a report yesterday that this year's loans growth would remain robust as the rise in interest rates from record lows was unlikely to dampen pent-up credit demand spurred by a recovering economy.

AmResearch said the slowdown in the residential loans segment was positive, considering that household debts had risen significantly over the past one year.

“The future (loans) growth will likely be driven partly by execution of projects under the government's Economic Transformation Programme (ETP),” it added.

While the ETP implementation will be predominantly financed by the private sector and result in higher business loans growth, ECM Libra said it was cautious on the prospect of project implementation delay at this juncture.

The banking industry saw an overall loans growth of 13.2% year-on-year (y-o-y) in November 2010 due to business and household sector loans expansion as compared with the 12.4% y-o-y loans growth seen in October 2010.

“This growth has surpassed the previous high of 12.9% y-o-y growth almost two years earlier in December 2008. The peak before this would be the 14.9% growth in April 1998. Thus, industry loans growth is now at the highest level since the Asian financial crisis,” said AmResearch.

However, slower growth was seen in leading indicators. Loans applications, approvals and disbursements all expanded slower on a y-o-y basis for November 2010 at 13.2%, 4.7% and 0.7% against October's 20.8%, 21.4% and 11.8% respectively.

Despite the slower loans growth, AmResearch said the absolute amount of loans applied of RM56bil was still close to peak levels compared with the monthly average of RM43.4bil for 2009.

It added that the muted increase in loans approved in November 2010 was not a major concern, as it came mainly from a 74.5% y-o-y drop in other purpose segment (which included lumpy loans approved to the public sector).

OSK Research said that loans applications dipped as applications for the business and household sectors trended lower. It added that weaker demand for construction and purchases of fixed assets other than land and buildings led to slower business applications.

“Loans applications for the household sector declined, mainly due to slowing growth in the purchase of residential property,” said OSK Research.

Loans approval growth slowed due to weaker growth in the business sector with loans approvals for the purchase of fixed assets other than land and buildings being the major drag while loans approvals for the household sector moderated, it added.

Meanwhile, ECM Libra said competition in the mortgage market had resulted in widening negative spread over the base lending rate (BLR).

“This is likely the cause for the fall in average lending rate (ALR) to 4.99% despite average BLR remaining unchanged at 6.27%. Interest margin is under pressure as the ALR-3 month fixed deposit spread has fallen to 2.25%, the lowest level in 12 years,” it added.

However, momentum in merger and acquisition activities is expected to be sustained, which would underpin non-interest income growth. CIMB Group Holdings Bhd would be the main beneficiary, said ECM Libra.

By The Star

Singapore home prices rise but pace slows

SINGAPORE: Home prices in Singapore rose to record highs in the fourth quarter but the pace of increase declined, government data showed yesterday, suggesting authorities may hold off introducing new measures to cool the housing market.

The Urban Redevelopment Authority's flash estimate showed private home prices rose 2.7 per cent in the last three months of 2010 compared with the preceding period, down from an increase of 2.9 per cent in the third quarter.

"The pace of growth has slowed for the fifth consecutive quarter... This should give comfort that the recent government property cooling measures, as well as the ramped-up state land supply, have worked to some extent to contain price growth," said Tay Huey Ing, director of research and advisory at Colliers in Singapore.

Tan predicts private home prices in Singapore will rise by around 10 per cent this year, down from the 17.6 per cent increase in 2010, as low interest rates will continue to drive demand for residential property.

A separate index by the Housing Development Board indicated prices of government-built apartments that were sold gained 2.4 percent in the fourth quarter after rising 4 per cent in the preceding period.

Meanwhile, the Ministry of Trade and Industry said Singapore's economy grew 12.5 per cent in the fourth quarter of 2010, a record year in which the city state was Asia's strongest economic performer,

Singapore grew 14.7 per cent for the year as a whole, the figures confirmed, bounding back from a 1.3 per cent contraction in 2009.

Last year's growth was Singapore's best ever economic performance, surpassing the previous record of 13.8 per cent set in 1970 and within the government's projected range of 13-15 per cent.

By Business Times

MRCB-IJM Land merger aborted ‘over CEO choice’

PETALING JAYA: The inability of Malaysian Resources Corp Bhd (MRCB) and IJM Land Bhd to come to an agreement over who will lead the new entity is the cause of the merger between the two property firms being called off.

A source confirmed this to StarBiz yesterday following both companies' announcements to Bursa Malaysia last Thursday that the merger was aborted as they were unable to reach an agreement on the definitive terms and conditions of the proposed merger, following a series of discussions.

“The breakdown in talks is purely management related essentialy on the leadership of the new entity,” the source said.

He said there was a difference in opinion on whether MRCB chief executive officer (CEO) Mohamed Razeek Hussain or IJM Land CEO-cum-managing director Datuk Soam Heng Choon should lead the new entity.

“No one could agree on this fundamental issue,” he said.

According to sources, the Employees Provident Fund (EPF) abstained from the discussion due to the fund's stakes in IJM Corp Bhd (16.91% single-largest shareholder), IJM Land (5.77%) and MRCB (41.95%).

IJM Corp held a 62.76% stake in IJM Land.

Shares of IJM Corp, IJM Land and MRCB fell yesterday at the opening after being requoted following their suspension at midday last Thursday.

At the close, IJM Land fell 9 sen to RM2.77, IJM Corp dropped five sen to RM6.18 while MRCB added one sen to RM2.

It was understood that the newco would have stood a better chance at getting major portions of the EPF-led development of the 3,300-acre freehold land owned by the Rubber Research Institute in Sungai Buloh, one of the major projects under the Economic Transformation Programme.

MRCB is currently assisting the fund to masterplan the project and, notwithstanding the deal falling through, should still get portions of the project.

HwangDBS Vickers Research Sdn Bhd analyst Chong Tjen San observed that while it was disappointing that the deal was called off, both companies did not have much to worry about.

“All is not lost although MRCB will have lost the opportunity to leverage on IJM Land's township development expertise. However, MRCB should still be able to win the right to develop a sizable portion of the Sungai Buloh project, particularly the transport hub,” he said.

Chong said a well-run company such as IJM Land also had nothing to worry about. “Although the company stands a better chance in gaining a foothold in the Sungai Buloh project if the merger went through, they've other projects including the Light Waterfront project in Jelutong,” he said.

In fact, analysts were confident that IJM Land should weather the failed merger quite well as besides the RM5.5bil Light Waterfront project spread over 210 acres, the company was also in a 50:50 joint venture with Kumpulan Europlus Bhd to develop the 2,500-acre Canal City project near Kota Kemuning worth an estimated RM6.3bil.

By The Star

MK Land sells land for RM130m

PETALING JAYA: MK Land Holdings Bhd is selling two plots of leasehold land in Sungai Buloh, Selangor, to Foster Estate Sdn Bhd for RM130mil cash.

It told Bursa Malaysia yesterday that it had entered into sale-and-purchase agreements with Foster Estate on Dec 30, 2010 to dispose of 18.54 acres for RM100.78mil and another 8.32 acres for RM29.21mil.

MK Land said it was disposing of the two plots to unlock their value which it had no immediate plans to develop and the proposals were expected to be completed by the end of 2011.

By The Star

Hua Yang sells retail units

KUALA LUMPUR: Main-board listed Hua Yang Bhd is selling 73 retail units in its flagship commercial property, One South, Sungai Besi, to South Crest Synergy for RM105mil.

One South, an iconic landmark in Sungai Besi, is a mixed development project spread over 1.72ha and is a key revenue driver for the company.

The development represented a large chunk of RM1bil worth of projects that the group was rolling out, the company said in a statement yesterday.

By Bernama

Builders upbeat on 2011 industry outlook

The Master Builders Association Malaysia (MBAM) expects raw material prices for the construction industry to increase this year but still at a manageable level.

Its president, Kwan Foh Kwai said, the association expects the increase to be less than 10 per cent.

If raw material prices increase by more than 10 per cent, than the industry players would look at alternative sources, he told reporters after the signing of a memorandum of understanding (MoU) between MBAM and Open University Malaysia (OUM) today.

"Raw material prices have always beeen subject to market forces. There will be increase (in prices) but within a reasonable percentage," he said.

On the 2011 outlook for the industry, Kwan said the MBAM is optimistic that the year would be good for the industry, backed by the implementation of projects under the 10th Malaysia Plan (10MP) and the Economic Transformation Programme (ETP).

On the MoU, he said both parties would work together to come up with educational and training programmes for the construction industry.

He highlighted that at present, there was a critical need to replenish the pool of skilled construction manpower, as a majority of the workers in it are already ageing.

According to Kwan, it is estimated that 35.1 per cent of local construction personnel would reach the age of 50 and above, seven years from now.

"The OUM programmes are specially developed and designed for working adults. The courses developed will incorporate knowledge and entrepreneurship skills which would be industry oriented," he explained.

Among the programmes are an Executive Diploma in Construction Project Organisation and Control, an Executive Diploma in Construction Management, an Executive Diploma in Project Management, an Executive Diploma in Contract Administration, an Executive Bachelor in Construction Supervisory Management, an Executive Bachelor in Integrated Contruction Project Management and an Executive Bachelor in Contract Management and Administration.

The Vice Chancellor of OUM, Prof Emeritus Tan Sri Anuwar Ali said, the programmes are expected to start next month.

By Bernama

Saturday, January 1, 2011

Better transport system, affordable housing in 2011?


The MRT system should integrate seamlesly with other existing modes of transport such as the KL monorail.

2011 can be a year for the common folks and real estate industry players to celebrate if more timely efforts are expended to improve the overall living, working and leisure environment in our cities.

There are a number of initiatives that need to be undertaken to further shore up the quality of living for the people.

Top of the list is without doubt the dire need for a highly efficient and functional public transport system that will ensure the optimum integration and utilisation of the various modes of transport and infrastructure. The grossly inefficient public transport system in our cities now is the reason why our roads are so heavily congested as the people have no choice but to drive.

Most environment-conscious cities around the world are clamping down on the number of vehicles in their cities to reduce vehicular pollution and their carbon footprint. Malaysian cities should follow suit and timely action should be taken now to ensure we are not left behind in the pursuit of clean environment. The plan for the much-awaited mass rapid transport (MRT) system in the Greater KL (GKL) area should be accorded fast-track priority and the project should get off the ground as soon as possible. All efforts should be taken to ensure the project will not turn into a white elephant (built at a high cost and under-utilised) which could well be if it fails to integrate seamlessly with other existing modes of transport such as the light rail transit, monorail, public buses, taxis and other transport system.

With petrol prices expected to go up further with the lowering of government fuel subsidy in the coming days, having a world-class public transport system that is operated efficiently will be a big boost to the liveability of our cities including Kuala Lumpur, Petaling Jaya, Subang Jaya and Shah Alam. In order for the MRT project to be a big success, the cost should be kept down so that its operation will not be over-commercialised and profit oriented. The fares should be kept affordable for the common folks in order to ensure it will be widely used.

The proposed redevelopment of the sprawling Rubber Research Institute (RRI) land in Sungei Buloh and the Sungei Besi military airport land among others is a good opportunity to undertake a holistic master planning for a top-notch public transport system that will serve all the well-populated parts of our cities. The success of the project in the GKL should become a model to improve the public transport system in other cities country-wide to keep up with the rapid urbanisation and needs of the people. Cities like George Town, Malacca and Johor Baru are also in need of much better public transport system to move forward.

Quality infrastructure projects, including good public transport system, will without doubt spawn more well-planned real estate projects and townships that will ease the shortage of supply of a broad range of quality housing products, especially affordable housing units. Ideally, there should be a greater emphasis on quality housing projects versus commercial projects in these developments since there is a shortage of good housing units now and a glut of commercial space, especially office buildings.

Another timely initiative will be to enlarge the role of the national housing company or Syarikat Perumahan Negara Bhd (SPNB) to be more proactive as the appointed agency to be responsible for providing enough affordable housing units for the lower and middle income groups. There is currently a severe shortage of affordable housing projects in good locations as many developers are busying themselves with higher-priced niche lifestyle projects that offer higher premiums to their bottomlines.

So the vacuum in the affordable housing sector should be filled by SPNB in concert with the various state housing authorities. A national census or survey should be undertaken to gather and compile all the necessary statistics on the actual number of affordable houses that are still needed and to ensure enough of such housing units are build for the people. With the sharp escalation in house prices in many parts of the country, including the GKL, Penang and Johor, many average income earners are unable to buy a house now.

As the Government is opening up more land, including the RRI land in Sungei Buloh and the Sungei Besi airport land for redevelopment, SPNB should take the opportunity to work with the appointed organisations the Employees Provident Fund for the RRI land and 1Malaysia Development Bhd for the Sungei Besi land to submit plans for affordable housing needs in these projects.

With the huge demand, at least 20% to 30% of the land should be allocated to build housing units priced between RM200,000 to RM300,000. If SPNB is unable to undertake this role for whatever reason, a proper national housing board (like the one in Singapore) should be established touphold the public housing needs.

Deputy news editor Angie Ng believes that to achieve anything worthy, it is time to cast out rhetoric and slogans, and get on with real action.

By The Star (by Angie Ng)

Mixed prospects in property sector


Last year was quite an eventful one for the local housing market with strong demand and record prices registered in key property hot spots that included the Klang Valley and Penang.

Concerns over potential overheating had culminated in Bank Negara’s imposition in early November of a maximum loan-to-value ratio (LVR) of 70% for third home mortgages.

Buyers of landed properties in sought-after locations have benefited from good capital appreciation, with prices appreciating by between 20% and 30% year-on-year.

Most of the home-buying activities were fuelled by cheap cost of funding and huge liquidity in the banking system.

So, what is in store for 2011? Will home sales and prices continue to strengthen or will they sustain at current levels or start to head south?

CB Richard Ellis Sdn Bhd executive chairman Christopher Boyd believes the prices of landed properties in the Klang Valley and Penang will continue to rise, supported by a strong economy, which will be spurred by heavy expenditure on infrastructure and other projects, and high commodity prices. However, the effect in Johor will be more muted because demand has not been so strong.

“I believe the root cause of the strong growth in landed property prices in the Klang Valley and Penang in 2010 was a reduction in supply which followed the global economic crisis. Developers simply turned off the tap for a while until the future became clearer, and this is supported by data from the National Property Information Centre.

“The economy and confidence soon bounced back and so the result was a temporary supply squeeze which of course will ease this year as developers increase supply,” Boyd says.

As finance is still cheap and confidence remains high, he expects landed property prices to continue to rise in value, albeit at a slower rate. However, luxury high-rise residences in the Kuala Lumpur City Centre and Mon’t Kiara localities will continue to face a challenging market in view of ample supply and weak rental demand.

“Well-located medium-cost high-rise dwellings will remain in strong demand from younger middle-class buyers and we will see a continuation of the trend towards building small affordable units close to the central business district.” Boyd does not see any material impact from the 70% LVR ruling on third mortgages but says it is nevertheless a very timely message “that one has to be careful not to over-commit because prices may level off, making it more difficult to exit.”

He says the redevelopment of the Rubber Research Institute land in Sg Buloh and the Sg Besi airport has the potential to be phenomenal success and will benchmark Malaysia’s skill in producing large-scale developments of a very high quality.

According to ECM Libra research head Bernard Ching, property sales and price appreciation are expected to moderate in 2011.

He expects slower speculative demand due to the central bank’s LVR cap. Furthermore, the intense competition among banks in the mortgage market is not sustainable as net interest margins (NIMs) have compressed to very low levels.

He believes that banks may have to raise rates and/or cease offering zero-moving cost mortgages to alleviate further pressure on NIMs. This will result in higher financing costs to housebuyers. On the outlook for the commercial property sector, Boyd says there will be further upsides in the office market, especially if the country’s economic recovery is sustainable.

“I believe that with the right planning, the office market can be easily well balanced in terms of supply and demand. The Klang Valley office space market will remain quite resilient this year in the face of only moderate new supply and quite buoyant take up.”

Boyd estimates a further 3.5 million sq ft of office space would be completed in Kuala Lumpur this year.

He says it is more of a seller’s market right now as there is not enough investible buildings around to meet demand. Given the lower entry cost, demand is getting stronger especially for office buildings that are well managed and located, have high occupancy and good yields.

“Similarly, the retail property sector is likely to strengthen slightly in 2011 with only moderate new supply and strong demographic of a young and growing workforce,” he adds.

On the interest for commercial property, Boyd says that in the aftermath of the global financial crisis, while commercial rentals fell, the capital value of commercial property held up well.

“The reason for this is that investors had become severely disillusioned with stock markets and were still prepared to pay competitive prices for income-yielding commercial property, so in fact yield expectations dropped.

“This is a phenomenon that was seen all around the globe,” he says.

By The Star

Dream house no more?

The dream of homeownership is very much alive in the emerging world.

The financial crisis that began in 2007 had its roots in excesses in the housing market that remained unresolved in 2010 and that will continue to roil economies in 2011 and beyond.

Everybody now knows about America's dodgy “subprime” mortgages (the term says it all). But it is all too easy to forget that the development of this market was initially welcomed, because it enabled even people who would not normally qualify for a mortgage loan to aspire to homeownership. Subprime mortgages made the American dream come true.

Of course, billions of others around the world share the same dream. But the way housing finance is organised differs enormously from country to country, and these differences explain the recent global imbalances and financial crashes.

In developed economies, construction can add only a relatively small amount each year to the existing stock of housing. With populations stagnating (or declining in many parts of Europe and Japan), the existing stock of housing is exchanged among different parts of the population, and typically bequeathed from old to young.

The situation is different in emerging economies, where the quantity and quality of the existing stock of housing is woefully inadequate. Moreover, most of the existing housing tends to be in rural areas, whereas most of the jobs are in the cities. This is why urbanisation means a huge building boom in emerging economies. China, as usual, is the most extreme example, now accounting for more than one-half of global cement consumption.

The dream of homeownership is thus very much alive and is a powerful economic force in the emerging world. But mortgage markets remain underdeveloped in most emerging economies. This means that young Chinese couples will first have to save a large part of their income as a downpayment for their dream house (typically an apartment in a high-rise).

The absence of “no money down” mortgages might be more important than Confucian ethics in explaining China's high savings rate. One sure way to reduce the savings rate in China would be to develop an American-style mortgage market there.

The Chinese and others should, however, bear in mind that an increase in housing prices does not make a country richer. Of course, every homeowner will feel richer if his property's price goes up. But if the price of all housing goes up, the country as a whole is no better off; after all, people have to live somewhere, so, other things being equal, cashing in on higher house prices would merely mean paying more for one's next home.

Housing booms thus create only an illusion of wealth, though it is compelling enough to induce excessive consumption, as occurred in the United States over the last decade.

Conversely, a crash in house prices does not destroy any real wealth (the houses still stand). On the contrary, a crash makes the dream of ownership more affordable, which benefits first-time buyers typically the young and less well-off.

But, from an economic point of view, the share of homeowners versus tenants is not very important. If the rental market is well developed (as in, say, Germany), most families might elect not to own. But Germans still own indirectly the houses they live in through their investments with life-insurance companies and savings societies, which own and manage a large proportion of the country's housing estates.

By contrast, from an economic point of view, many American households really rent their homes from the Chinese government. They might be proud homeowners on paper, but their mortgage was probably underwritten by quasi-governmental institutions like Fannie Mae and Freddie Mac, which in turn rely heavily on capital from China for their own refinancing.

The real danger arises when everyone is convinced that investing in real estate is the best way to secure one's own future because house prices can only go up. This induces lenders to provide not only NINJA (no income, no job, no assets) mortgages, but also generous loans to real-estate developers to build ever larger mansions and housing estates.

As long as a boom lasts, everybody benefits. But when the bubble bursts, the NINJAs cannot service their debt and builders go into bankruptcy. Lenders find that the collateral (half-finished or empty houses) is worth almost nothing, resulting in huge losses in the banking system (as the United States found out in 2008).

In extreme cases, as in Ireland (one hopes not in Spain), the need to save the banking system can bankrupt an entire country.

Housing booms can last a long time, typically more than a decade. The downside is that housing busts last equally long, because houses are such a durable good. Once too many houses have been built, the existing overhang depresses the market for a very long time, and unemployed construction workers are usually unable to find jobs elsewhere.

The last decade saw the peak of an unprecedented housing boom in most of the rich world. The bust, with its banking problems and unemployment, is likely to last for most of the coming decade, depressing growth in all those countries which looked so strong in 2008.

By contrast, the emerging economies have barely started their own boom, which is underpinned by the spillover of liquidity from the United States. The emerging world's boom might well stretch over the entire next decade, as hundreds of millions of homes are built.

The next bust can be avoided only if emerging markets manage the dream of homeownership better than the United States and Europe. Project Syndicate, 2010

Daniel Gros is director of the Centre for European Policy Studies.

By The Star (by Daniel Gros)

MBSA receives Sustainable City 2010 award for the third time

The Shah Alam City Council (MBSA) was recently presented with the Sustainable City 2010 Award at a national-level event.

The recognition marked the third consecutive year the MBSA has won the Sustainable City award since it was introduced in 2008.

For this year, the MBSA came in second with a 90.09% score while the administrative capital of Putrajaya emerged tops with a 94.12% score.

The conferment of the sustainable city title was based on evaluation done by the Town and Country Planning Department in Peninsular Malaysia via the Malaysia Urban Indicator Network (MURNInet) Programme.

MURNInet is an application to create a database in digital form that can measure the sustainability of a city.

Through MURNInet, local authorities would be able to identify the problem, the quality of an urban settlement and present proposals to resolve and improve the level of services to residents.

The assessment was conducted using several indicators like demographic population in a city, utilities and infrastructure that are efficient and sufficient to ensure the residents’ well-being, provision of community and recreation facilities, sociology and social impact to ensure quality of life, management and strong financial standing.

The Sustainable City 2010 Award was presented by Housing and Local Government Minister Datuk Wira Chor Chee Heung in conjunction with World Town Planning Day 2010.

Shah Alam mayor Datuk Mazalan Md Noor was on hand to receive the award.

“With the award, MBSA will strive to maintain and enhance several indicators to achieve a more sustainable level and make Shah Alam an ideal place to live, work and raise a family,” he said.

“As the local authority, the MBSA will continue to work and cooperate with all parties, including residents’ representative council (MPP), residents associations, government agencies, public and private sectors and NGOs to ensure the city is always prosperous, and that its residents can live in peace, harmony and with mutual respect for each another.”

The MBSA was also presented a five-star rating in the Malaysian Government Website and Portal Evaluation by the Multimedia Development Corporation (MDeC).

The five-star rating for the council’s website was based on the content and information that is regularly updated and current.

The MBSA’s website also has web-friendly features, is easy to browse, posts relevant information like department/ division contacts and client charter, has online payment channels (e-payment), and is linked to myGov and other government agencies websites.

Mazalan added that the MBSA, through its Information and Communication Technology Department, plans to introduce several more applications and approaches to facilitate the Shah Alam community’s access to information and services relevant to the council, including the recent introduction of the Shah Alam Kita portal.

By The Star

Thursday, December 30, 2010

Tambun Indah mulls Klang Valley project

PROPERTY developer Tambun Indah Land Bhd is looking to expand to the Klang Valley to tap into the growing demand for residential properties.



Tambun Indah, which has some RM60 million in cash reserves, has not decided on any particular land yet but is on the lookout for suitable landbank.

"We are eyeing for landbank in the Klang Valley and have viewed some land in Shah Alam and Kajang, but we have not finalised anything yet," said managing director Teh Kiak Seng in Kuala Lumpur.

The company also plans to invest some RM178 million to purchase two more parcles of land of about 1.62ha each in Penang next year.

Currently, Tambun Indah owns 86ha of land in Penang, with a gross development value (GDV) of about RM1 billion which should keep it busy for the next six years.

Last year, it also had some 10 per cent of the residential property market in Seberang Perai, namely through its Tambun Indah development project.

"Seberang Perai is one of the fastest growing districts in Penang due to the rise of working class population as a result of rapid industrialisation," he said at the company's prospectus launch yesterday.

Tambun Indah is seeking to raise RM22.4 milion from its initial public offering exercise, of which RM12.7 million will be allocated for working capital, RM7.1 million to repay bank borrowings and RM2.6 million for the listing exercise.

Of the 32 million new ordinary shares under the public issue, 11.05 million share will be allocated to the public at 70 sen a share.

Applications for Tambun Indah's shares close on January 6 2011 and subsequently, the company will be listed on the Main Market of Bursa Malaysia on January 18.

Established in 1994, Tambun Indah has completed eight projects, selling more than 2,800 units with a total GDV of more than RM800 million.

Its ongoing projects include Pearl Garden, a gated residential project located in Simpang Ampat which is set to be completed in 2016 and Juru Heights in Seberang Perai, a gated residential project that is expected to be completed early next year.

By Business Times

Tambun Indah to buy 3.2ha in Penang

KUALA LUMPUR: Tambun Indah Land Bhd, a leading property developer in Penang, is planning to acquire 3.2ha of land next year.

Managing director Ir Teh Kiak Seng said the group had identified 1.6ha on the mainland and another 1.6ha on Penang island with a gross development value (GDV) of approximately RM36mil and RM170mil respectively.

According to an independent market researcher, the residential property market in Penang was valued at RM3.7bil last year, and the mainland accounted for approximately 30% of Penang's residential property market.

“Mainland Penang (Seberang Perai) is one of the fastest growing districts in Penang due largely to a growing working class population as a result of rapid industrialisation,” he said during the launch of the group's initial public offering (IPO) here yesteday.

Tambun Indah is scheduled for a main-market listing on Jan 18. “We are still eyeing for landbank in the Klang Valley like in Shah Alam and Kajang but are cautious about the cost; therefore, we have not finalised anything yet.

“As we all know, Klang Valley is a good market to do housing, but we want to build our name by building quality homes at an affordable price. We, however, have no plans to expand overseas at the moment,” Teh said.

Last year, the group garnered a 10% share of the Seberang Perai residential property market.

“We expect after the IPO, our market share will increase above 10%,” he added. To date, Tambun Indah has sold more than 2,800 residential units, mostly in mainland Penang with a GDV of more than RM800mil.” Teh said the group achieved commendable financial performance over the years and had maintained a low-borrowing financial model so as not to burden the balance sheet. As at Dec 31, 2009, the group was in net cash position.

“Tambun Indah has adopted a progressive dividend policy of paying between 40% and 60% of group net profit to shareholders.

“At an IPO price of 70 sen per share, the annualised net dividend yield is (about) 7% in financial year 2010,” he said.

By Bernama

Mall-in-a-park first of its kind in Malaysia

Two Malaysian actors plan to open a shopping mall within a park in October next year, said to be the first of its kind in Malaysia.



Dubbed an outdoor living mart, the project will occupy a land area of 5.9ha located between Puchong, Seri Kembangan and Putrajaya.

The project, dubbed "Garden Explore", will cover seven major zones of outdoor retailing lots, a plaza and entertainment hall, offices, cafes, restaurants and one petting zoo.

"It's the first of its kind in Malaysia but there have been similar developments in China," said Jack Lim, a director of Green Atmosphere Sdn Bhd, at the launch in Kuala Lumpur yesterday.

Managing director Nick JM Wong, a former actor, controls the firm while Weng Zheng Steel Bhd chairman Tan Ching Kee is the adviser.

Construction work is due to start after the Chinese New Year next year. The company has not set any revenue target for the pioneer project.

"The gross development value of the project is RM20 million and this does not include the land cost which was leased from Tempo Properties Sdn Bhd," Lim said.

He declined to reveal the leasing cost, which runs for 10 years.

A unique feature of the project is that cars will not be allowed into the area. Rather, visitors will have to walk or cycle their way through the mall.

By Business Times

MRCB-IJM Land merger called off

PETALING JAYA: Property firms IJM Land and MRCB have aborted their planned merger by way of a members' scheme of arrangement as both companies have not been able to come to an agreement.

Separate announcements by both companies were made to the stock exchange on Friday concerning the matter.

RHB Investment Bank and Newfields Advisors announced on behalf of MRCB that both companies “have not been able to reach an agreement on the definitive terms and conditions of the proposed merger”.

Accordingly, they said the proposed merger was now aborted.

Meanwhile, an IJM Land statement on Bursa Malaysia said after a series of discussions, both were not able to reach an agreement on the definitive terms of the proposed merger.

By The Star

Ibraco selling 6.5ha land in Kuching

REAL ESTATE and property developer, Ibraco Bhd, is selling a total number of 6.5ha of land in Kuching, Sarawak, to Wansa Realty Sdn Bhd for RM14.2 million.

The demand for office buildings and exhibition buildings in the subject area is expected to be limited.

The company told Bursa Malaysia Bhd that the disposal will avoid potential holding cost should Ibraco build and sell the office and exhibition buildings.

The sale consideration is about 2.7 per cent above the market value of the land.

By Business Times

Mitrajaya unit wins RM53.5m contract

PROPERTY developer Mitrajaya Holdings Bhd’s subsidiary has won a RM53.5 million contract for the construction and completion of five units of hangar, one unit of two-storey multipurpose café building, two units of electrical substation and one unit guardhouse at Subang Airport, Selangor.

The contract awarded to Pembinaan Mitrajaya Sdn Bhd, is for a period of 10 months and work starts on January 1 2011.

By Business Times

Axis-REIT wants to buy building for RM51m

Axis Real Estate Investment Trust(Axis-REIT) is proposing to acquire a four-storey building, together with a freehold land, in Selangor from FSBM Holdings Bhd for RM51.25 million.

The proposed acquisition would be consistent with the investment objective and would be accretive to Axis-REIT's distribution income, the company said in a filing to Bursa Malaysia today.

It said the proposed acquisition would diversify and enlarge Axis-REIT's portfolio of properties and was expected to benefit the fund over the medium to long-term.

By Bernama

Wednesday, December 29, 2010

Tambun Indah to acquire land in Penang

Tambun Indah Land Bhd, a leading property developer in Penang, is planning to acquire 3.2 hectares of land next year.

Managing Director Ir Teh Kiak Seng said the group had identified 1.6 hectares on the mainland and another 1.6 hectares on Penang island with a gross development value (GDV) of approximately RM36 million and RM170 million, respectively.

According to an independent market researcher, the residential property market in Penang was valued at RM3.7 billion last year, and the mainland accounted for approximately 30 per cent of Penang's residential property market.

"Mainland Penang (Seberang Perai) is one of the fastest growing district in Penang due largely to a growing working class population as a result of rapid industrialisation," he said during the launch of the group's initial public offering (IPO) here today.

Tambun Indah is scheduled for a main-market listing on January 18.

"We are still eyeing for landbank in the Klang Valley like in Shah Alam and Kajang but are cautious about the cost, therefore, we have not finalised anything yet.

"As we all know, Klang Valley is a good market to do housing, but we want to build our name by building quality homes at an affordable price.

"We, however have no plans to expand overseas at the moment," Teh added.

Last year, the group garnered a 10 per cent share of the Seberang Perai residential property market.

"We expect after the IPO, our market share will increase above 10 per cent," he added.

To date, Tambun Indah has sold more than 2,800 residential units mostly in mainland Penang with a GDV of more than RM800 million.
Teh said the group achieved commendable financial performance over the years and had maintained a low-borrowing financial model so as not to burden the balance sheet.

As at December 31, 2009, the group was in net cash position.
"Tambun Indah has adopted a progressive dividend policy of paying between 40 and 60 per cent of group net profits to shareholders.

"At an IPO price of 70 sen per share, the annualised net dividend yield is estimated to be approximately seven per cent in financial year 2010.

"We believe this policy will go a long way in not only attracting investors but also ensuring value-creation for the long-term," he added.

Tambun Indah's IPO consist of a public issue of 32 million new ordinary shares and an offer-for-sale of 22.1 million vendor shares at an IPO price of 70 sen per share.

Of the 32 million new ordinary shares under the public issue, 11.05 million shares will be allocated for the Malaysian public.
Meanwhile, it has also allocated 9.9 million shares for private placement and 11.05 million shares for eligible directors, employees and business associates of the group.

The 22.1 million offer-for-sale shares will be allocated for placement to identified investors.

Additionally, the group's IPO will raise RM22.4 million in proceeds for the group.

Of this, RM12.70 million will be allocated for working capital, RM7.10 million for repayment of borrowings and the remaining RM2.60 million to defray listing expenses.

MIMB Investment Bank Bhd is the adviser, sponsor, underwriter and placement agent for the group's IPO exercise.

By Bernama

RM20m GDV for 'Garden Explore' project

Green Atmosphere Sdn Bhd (GA) has estimated a gross development value of RM20 million for its newly launched one-stop outdoor living mart project called "Garden Explore".

With its strategic location in Seri Kembangan, between Puchong and Putrajaya, the project would create opportunities for business owners in the industry with an expected high turnover of 750,000 visitors within a five km radius of the location, says GA's chief executive officer Nick Wong.

"The project will begin after the Chinese New Year and we hope to complete it by October next year," he told reporters after the project's launch today.

Wong, who is also the original concept creator of the project, added that Garden Explore has been strategically located to provide a better option for the public to meet their needs for outdoor accessories.

GA has signed the lease agreement with the land owner, Tempo Properties Sdn Bhd (TP), for a period of 10 years and had also obtained the development order from the local authority to construct the project in August.

TP's chief executive officer Khoo Boo Hian said the project would complement its adjacent development called The Atmosphere, which was a signature shop offices type commercial development between Tempo Properties and Eksons Corporation Bhd.

"With the co-existence of Garden Explore and The Atmosphere, this part of Seri Kembangan will soon transform into a vibrant commercial hub," he said.

He also said the project will be Malaysia's first outdoor living mart that would group all the resources and outlets within the green and landscape industry.

The project will cover a total 14.5 acres of land consisting of seven major zones of outdoor retailing lots, a plaza and amphitheatre (entertainment hall), 30 contractors and designer or consultant offices, two cafes and restaurant.

With a whole year round of events to be organised, the Garden Explore project is expected to offer various attractions to the public as well as business entities.

By Bernama

Ibraco to sell land in Kuching

Ibraco Bhd plans to dispose of 6.48 hectares of mixed zone land in Kuching, Sarawak to Wansa Realty Sdn Bhd for RM14.18 million cash.

In a filing to Bursa Malaysia today, Ibraco said the demand for office and exhibition buildings was expected to be limited.

"The disposal will avoid potential holding cost. In addition, the sale consideration is approximate 2.7 per cent above the market value of the land," it said.

Ibraco said the disposal was expected to derive a gross profit of RM10.64 million for the year ending Dec 31, 2010.

"It is expected to be completed within five years and the sale proceeds will be used for working capital," it said.

By Bernama

Asian Pac’s Safe Valley signs deal to sell land

ASIAN Pac Holdings Bhd’s unit, Safe Valley Sdn Bhd has signed a deal to sell 3.5ha of land in Setapak, Kuala Lumpur, to Axis Milestone Sdn Bhd for RM49.1 million.

Proceeds will be used to reduce its borrowings and to fund other development projects.

It expects to complete the deal by March 31 next year.

By Business Times

Sunway City buys land in Johor

PETALING JAYA: Sunway City Bhd is acquiring 64.63 acres near Johor Baru from Bukit Lenang Development Sdn Bhd for RM134.52mil.

The company said in an announcement that a shareholders' agreement was also signed for a proposed joint venture via Asli Budimas Sdn Bhd (a subsidiary of Sunway City), for the development of the land.

By The Star

GuocoLand says no plan to set up REIT

SINGAPORE: Singapore-listed developer GuocoLand, a firm linked to Malaysian billionaire Quek Leng Chan, said today it had no plans to set up a real estate investment trust (REIT), dismissing a report in the Business Times newspaper.

GuocoLand rose as much as 2.7 per cent today after paper said it may float two real estate investment trusts with assets of up to S$8 billion (US$6.2 billion) in the next 3-5 years.

“GuocoLand wishes to clarify that the group currently has no plans to establish a real estate investment trust,” it said in a filing to the Singapore Exchange.

“The group will review this as a possible strategy to extract value from its property portfolio, at the appropriate time,” it added.

By Reuters

Saturday, December 25, 2010

Malls expand and upgrade to stay ahead of the competition

WITH new malls being developed all the time, shopping complexes that have been around a while need to continue to re-invent themselves to keep up with the competition. So what do these malls have to do to stay attractive and be able to pull in the crowds'


Kevin Tan Gar Peng ... ‘We designed the mall in such a way that coming here would be more of an adventure than just a shopping trip.’

The Sunway Pyramid shopping centre, which has been around since 1997, is still being continuously upgraded to keep up with the competition, says Sunway IFM Sdn Bhd retail division chief operating officer Kevin Tan Gar Peng.

Due to demand for added space, we are expanding a section of our mall after Chinese New Year (which falls in early February), he says in an interview.

The upgrade, says Tan, will comprise the addition of three levels of retail space.

There will be another phase of expansion. Collectively, both phases will have a collective gross lettable area of 300,000 sq ft, Tan says, adding that it is too early to reveal the total investment cost for the upgrade.

He says there is always room for improvement at the mall. The Sunway group has already invested some RM550mil in upgrades since the malls first inception.

About RM30mil was spent to upgrade and improve the fly-overs and connecting roads around the shopping centre to improve accessibility to the mall, Tan says.

Sunway Pyramid trumped all entries at this years FIABCI awards to become the Best Retail Development 2010.

Of course, our goal is not to win awards. But winning it is a bonus and a testament to our hard work. Winning encourages us to work harder, says Tan.

He says the mall spends about RM3mil annually to light up the surrounding area of the mall during festive seasons.

According to Tan, the mall has been experiencing full take-up for the past seven years, with current rental rates at about RM10 per sq ft.

This is in spite of the continuous expansion weve been making to the mall.

Compared to other malls in the country, the Sunway Pyramid shopping centre has the advantage of being near a hotel and a theme park namely the Sunway Resort Hotel & Spa and Sunway Lagoon.

Our strategic location provides a choice to people who come here, says Tan.

Arab tourists who come with their families enjoy this option very much. The men like the facilities that the hotel offers. Their children love the rides at the theme park and their four wives can enjoy the shopping lifestyle, Tan enthuses.

The appeal of the Sunway Pyramid shopping mall, especially to the Arabs, could also be because of its Egyptian-inspired pyramid and lion statue at the main entrance.

Tan says the mall is the countrys first themed shopping and entertainment centre.

We designed the mall in such a way that coming here would be more of an adventure than just a shopping trip.

Pulling in the crowds

According to reports, property consultants expect 20 new malls with a combined net floor area of 4.4 million sq ft to be opened this year.

According to statistics by the National Property Information Centre, as at March 2010, there were 49.98 million sq ft of existing retail space within the Klang Valley. A further 7.18 million sq ft is under development and 7.5 million sq ft of new space planned.

Citing data from the Malaysian Association for Shopping and Highrise Complex Management, Tan says there are currently about 300 shopping malls in the country, with half of them in the Klang Valley alone.

The competition (for malls) level in the Klang Valley is great. However (with the global economy picking up), tourist arrivals into the country have increased this year. That helps to support the malls.

However, while the improved economic outlook has seen a tourist influx into the country, other countries, especially Singapore, have been luring Malaysian tourists to their malls, says Tan.

Singapore is aggressively promoting their tourist destinations, such as Resorts World Sentosa, here.

According to statistics from Singapores tourism board website, the number of Malaysian travellers into Singapore increased 40.2% to 95,371 for September 2010 from 68,008 in the previous corresponding period.

For the nine-month period ended September, the number of Malaysian travellers rose 44.5% to 724,528.

According to various reports, the surge in tourist arrivals into Singapore has been attributed to the opening of Resorts World Sentosa and Marina Bay Sands earlier in the year.

Tan adds that with the advent of budget airlines, travelling has become cheaper.

With cheaper flights now, more Malaysians are going abroad but that does not mean that the same amount of foreigners are coming in, he says, adding that local malls need to aggressively market their products or risk losing customers.

Looking forward, Tan is optimistic about the local retail sector. He says that the Governments proposal under Budget 2011 to abolish import duty on 300 goods preferred by tourists is a good move.

The move now makes branded goods more affordable. Now, shoppers dont have to travel overseas to buy such goods, he says.

By The Star

Making KL a greater place

With the NKEA in mind, it is time to make GKL a livable place which is clean and peaceful, and filled with environment-friendly economic activities producing high-quality, high-value goods and services.

MANY analysts compare, rather simplistically, the economy of Singapore with that of Malaysia. This is like comparing apples with oranges.

The two economies cannot be compared in that simplistic manner because of the markedly different economic structure of two, with Malaysia having a large rural sector and abundant land, and Singapore, a service-oriented trading economy.

It would be more meaningful to compare Singapore with Greater Kuala Lumpur (GKL), or what was often referred to as the Klang Valley.

After all, the latter is already very urbanised and is endowed with modern infrastructure.

The inclusion of GKL as one National Key Economic Area (NKEA) is befitting given that it is the epitome of our economic space and national urban system.

In fact, we can take up issue with the physical and development planners of GKL if the region fails to perform socially, economically and culturally, on the scale achieved by city economies like Singapore and Hong Kong.

The GKL region should be the leader in productivity and intellectual capital creation in various fields especially in services such as finance, education, communication and the arts, and high-value manufacturing where intellectual capital and K-economy-related activities are the natural choice.

To date, the GKL has expanded much on the basis of organic growth.

The processes of population concentration and agglomeration have led to what GKL is today.

Its status as the national capital attracts many business houses to establish their headquarters in Kuala Lumpur, thus putting pressure on space and impacting property value.

Thanks to earlier efforts, we have been able to avoid GKL from becoming a primate city, such as Manila, Mexico City, Bombay, and Cairo, with the attributes of over-population.

Indeed, the earlier years of development concern for regional disparity restrained GKL from overexpansion and as such, growth was dispersed to other parts of the country, as expected by the spirit of federalism.

In fact, on realising this, the seat of Federal Government administration was moved to Putrajaya, leaving Kuala Lumpur to become the financial and commercial centre of the country.

In line with the NKEA objective, let us make GKL a livable place, clean and peaceful, and filled with economic activities which are environment-friendly yet producing high-quality, high-value goods and services.

These activities will have a high content of intellectual capital.

GKL does have the potential to attract high-return activities such as banking and finance, tourism, advertisement and professional services such as legal, accounting, engineering, healthcare and arts and design.

The presence of premier tertiary educational institutions in and around GKL can help spur the growth of these activities in the area.

The lower costs such as rentals of premises in the GKL compared with the rates in Singapore, Hong Kong and Bangkok can attract these services.

In the same breath, GKL should not be the location of manufacturing activities which demand high-labour content and low technology.

Other places where labour is still plentiful can be the location of such industries.

This is one reason why regional corridors are established.

The GKL, which covers various urban conurbations and the surrounding townships of Klang, Kajang, Bangi, Putrajaya, and Shah Alam, has to be targeted as a planned modern urban space and that its untoward features of squatters, traffic jams and unhygienic stalls have to be phased out or upgraded speedily to befit the region as the foremost urban centre of the nation.

The transition has taken place, with Shah Alam, Bangi and Putrajaya leading the pack, but its momentum has to be expedited.

The mindset of urbanites in GKL have to change fast to accommodate the emerging status of GKL.

It is heartening to see that public transport has been given due emphasis in the National Key Result Area and the NKEA of the current administration.

Indeed, the issue of traffic jams in the city of Kuala Lumpur, especially on Friday evenings and particularly when it rains, demands a strong political will to address as it is the consequence, in part, by our car ownership policy.

On this matter, an independent transport and road planning body can be given the task to plan and carry out road and transport planning in the region, having regard for the current multiplicity of agencies with power to influence transport system in GKL.

A final point that is worth reflecting is the position of Kampung Baru and Chow Kit in the context of future urban renewal expected to take place under the impetus of the NKEA of developing the GKL.

The cultural and historical elements of urban planning have to be equally considered and there is no better window than capitalising on the opportunities arising from new developments of GKL, which has to grow with an identity of its own.

By The Star

Demand for green buildings on the rise


The Securities Commision premises is a good example of a green building.

WITH leading multinational corporations at the forefront to lease green office space, the demand for green buildings in Malaysia will continue to rise as environmental awareness grows and more companies embrace the practice of corporate social responsibility.

Another driver is the growing body of evidence demonstrating that green buildings make financial sense.

CB Richard Ellis (Malaysia) vice-president research, Nabeel Hussain says there is growing recognition that key participants in the countrys real estate sector have a responsibility to adopt sustainable building practices and related technologies in order to play a pro-active role in climate change mitigation.

Malaysia has introduced its own green rating system, the Green Building Index (GBI) in 2009. The Government is supporting the drive towards green buildings and technology and its Budget 2010 was the first one ever to give priority to the procurement of goods and services that are environmentally friendly, he adds.

Nabeel reveals that studies by CB Eichard Ellis on mature markets such as the United States and Australia have found that developing green buildings can help landlords achieve higher values, fetch higher rents and enjoy higher occupancy rates than comparable non-green buildings.

In an ongoing study of national office portfolio in the United States managed by CB Richard Ellis, the company concludes that sustainable buildings are expected to generate stronger investment returns than traditionally-managed properties.

The study found that owners of sustainably-managed buildings anticipate 4% higher return on investment than owners of traditionally-managed buildings, as well as 5% increase in building value.

Roughly 79% of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5% increase in building occupancy and 1% increase in rental income, Nabeel says.

This is the second phase of a multi-year study initiated in 2009 by CB Richard Ellis and the University of San Diegos Burnham-Moores Center for Real Estate.

The largest and longest-running study of its kind, the ongoing analysis benchmarks and measures green building benefits and economic results as a framework of investment criteria for retrofit activity.

According to the study, tenants in sustainably-managed buildings report increased productivity, satisfaction and health. Roughly 10% of tenant respondents have seen

increased productivity, 94% of tenant managers register higher employee satisfaction in green space and 83% of tenants believe their green space provides a healthier working environment.

The study defined a green building as those with Leadership in Energy and Environmental Design (LEED) certification at any level or those that bear the EPA Energy Star label. All Energy Star buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.

CB Richard Ellis was recently ranked 30 among Newsweeks greenest companies in America, and occupied top spot in the financial services sector. The US Environmental Protection Agency has named CB Richard Ellis an Energy Star Partner of the Year for the past three years, including recent recognition for Sustained Excellence.

Nabeel says the US Green Building Council has awarded CB Richard Ellis its Leadership Award for Organisational Excellence and the industry group, CoreNet, recognised CB Richard Ellis with a special commendation for Sustainable Leadership and Design Development.

In Asia, CB Richard Ellis recently won a Merit Award for Interior Projects in an Existing Building at Hong Kong Green Building Councils 2010 Green Building Awards, in relation to its office relocation in Hong Kong.

CB Richard Ellis new office premises in Hong Kong, Shanghai and Mumbai have been designed and constructed in accordance with LEED best practices.

By The Star

Friday, December 24, 2010

Nusajaya to develop RM670m project

PETALING JAYA: Nusajaya Consolidated Sdn Bhd (NCSB), a 50:50 joint venture between UEM Land Bhd and United Malayan Land Bhd (UMLand), will develop 6.7 acres in Nusajaya, Johor, into a mixed development project with a gross development value of RM670mil.

UMLand said in a statement to Bursa Malaysia that NCSB yesterday signed an agreement with Bandar Nusajaya Development Sdn Bhd to acquire the freehold land in Nusajaya for RM49.6mil in cash.

The proposed development, to comprise commercial, residential and retail components, will be developed over four years and is expected to yield a gross profit of RM160mil.

It is located in Puteri Harbour, an integrated waterfront and marina development spanning 278.42ha within Nusajaya and Iskandar Malaysia.

At present, NCSB is developing boutique waterfront apartments in Puteri Harbour scheduled for launch next year.

Following the purchase of 0.89ha in November 2009, NCSB has now exercised its option to buy the second parcel.

UMLand said the land and development costs would be financed through internally generated funds and/or bank borrowings.

By The Star

UEM Land in deal with Nusajaya

UEM Land Bhd, the master developer of Nusajaya, signed a sale and purchase agreement valued at RM49.6 million with Nusajaya Consolidated Sdn Bhd, as the latter has exercised its option to buy a second parcel, measuring 2.71ha in Puteri Harbour.

Nusajaya Consolidated, a 50:50 joint venture company of UEM Land and United Malayan Land Bhd, was formed in October 2008 to develop waterfront properties in Puteri Harbour.

It purchased a 0.89ha land in November last year, with the option to purchase a second parcel.

Nusajaya Consolidated is currently developing boutique waterfront apartments, scheduled to be launched in 2011.

By Business Times

UM Land gains on Johor property plan

United Malayan Land Bhd (UM land), a property developer, gained 1.2 per cent to RM1.76, set for its highest close since November 24.

The company said its joint venture, Nusajaya Consolidated Sdn Bhd, has exercised an option to buy a 6.7-acre land in Puteri Harbour in Johor state for RM49.6 million.

The joint venture plans an office, residential and retail project on the land worth RM670 million in gross development value, according to a company statement.

By Bloomberg

Thursday, December 23, 2010

CapitaMalls buys Queensbay Mall

CapitaMalls Asia Ltd is buying Queensbay Mall in Penang for about RM658 million.

The acquisition will be made through CapitaMalls Asia's subsidiaries and an asset-backed securitisation structure.



CapitaMalls Asia will buy about 90.7 per cent of the mall's retail strata area and all its car park spaces, the company said in a statement yesterday.

Queensbay Mall is Penang's largest mall located at Bayan Lepas along the southeastern shorefront of Penang island and about 20 minutes' drive from Penang International Airport.

It is a family-lifestyle mall located at the heart of a 29.57ha prime waterfront integrated development which comprises a hotel, a wide range of residential homes and planned office towers.

It is easily accessible from the north of the island via the Jelutong Expressway and from the south via the Bayan Lepas Expressway.

This will be CapitaMalls Asia's second mall in Penang and fourth in Malaysia.

The other three malls - Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor - are owned through CapitaMalls Asia's stake in CapitaMalls Malaysia Trust.

"Gurney Plaza, which we already own through CapitaMalls Malaysia Trust, and Queensbay Mall are the two best malls in Penang.

"The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia's market leadership in the state.

"This acquisition signals our ongoing commitment to invest in Malaysia's retail sector for the long-term, following our listing of CapitaMalls Malaysia Trust in July this year," CapitaMalls Asia chief executive officer Lim Beng Chee said in the statement.

By Business Times

UEM Land in RM50m pact with Nusajaya

Nusajaya master developer UEM Land Bhd has signed a sale and purchase (S&P) agreement valued at RM49.6 million with Nusajaya Consolidated Sdn Bhd (NCSB).

NCSB is a 50:50 joint venture company of UEM Land and United Malayan Land (UM Land).

"Following the purchase of 2.204 acres in November 2009, NCSB has now exercised its option to purchase a second parcel, measuring 6.698 acres in Puteri Harbour.

"The acquisition was pursuant to the exercise of the option given to NCSB to purchase Parcel Commercial South 3 (Parcel CS3) at Puteri Harbour," UEM Land said in a statement today.

Parcel CS3 is located within the Commercial South development of Puteri Harbour.

UEM Land managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the exercise of the option and the S&P agreement reaffirmed UM Land's commitment and belief towards the overall development potential of Puteri Harbour.

"With UM Land's involvement in the development, it will contribute to realising our vision to develop Puteri Harbour as a premier waterfront destination for the region," he said.

By Bernama

UEM Land, UMLand to jointly develop RM670m project in Puteri Harbour

KUALA LUMPUR: UEM Land Bhd and UNITED MALAYAN LAND BHD (UMLand) are teaming up to develop the second mixed development project in Puteri Harbour with an estimated gross development value of RM670 million while gross development profit is estimated at RM160 million.

UEM Land, the master developer of Nusajaya, had on Thursday, Dec 23 signed a sale and purchase agreement valued at RM49.6 million with Nusajaya Consolidated Sdn Bhd (NCSB), a 50:50 JV of UEM Land and UMLand to acquire the parcel of land -- Parcel Commercial South 3 (Parcel CS3) -- in Puteri Harbour.

The Parcel CS3 is within the Commercial South development of Puteri Harbour. Commercial South is envisioned to be a business and residential hub with high towers overlooking the marinas of Puteri Harbour.

UEM Land and UMLand said their strategy was to target regional companies to locate their offices there while for the condominiums, their plan was to attract international investors to be the main buyers for the units.

UEM Land managing director Datuk Wan Abdullah Wan Ibrahim said the company was excited with the exercise of the option and the SPA as it reaffirmed UMLand’s commitment in the overall development potential of Puteri Harbour.

“We have enjoyed a strong working relationship with UMLand in the development of Parcel A3 and are pleased with the progress achieved for Parcel A3, which we hope to introduce to the market in 2011.

“With UMLand’s involvement in the development, it will contribute to realising our vision to develop Puteri Harbour as a premier waterfront destination for the region,” Wan Abdullah said.

Presently, NCSB is developing boutique waterfront apartments scheduled to be launched in 2011.

UMLand group chief executive officer Pee Tong Lim said with development activities picking up in Nusajaya, the joint project was timely and augured well with UMLand’s business plans and strategies.

“This development is expected to contribute to UMLand’s group earnings from financial year 2012 onwards,” said Pee.

By The EDGE Malaysia

L&G to develop RM555mil upscale housing project in Seremban

PETALING JAYA: Land & General Bhd (L&G) plans to develop an upscale residential development with estimated gross development value of RM555mil in Seremban.

L&G told Bursa Malaysia that its wholly-owned subsidiary Bright Term Sdn Bhd had signed a conditional agreement to acquire 10 parcels of land in Seremban with a 27-hole golf course for RM25mil.

The properties, located in the Tuanku Jaafar Golf & Country Resort, would be developed to include bungalow lots, double-storey cluster semi-detached houses, link cluster houses and apartments, L&G said.

It expects gross development profit of RM135.52mil, excluding land cost.

The proposed development, to be completed in 2018, will be financed through internally generated funds and borrowings.

By The Star

Malaysia REIT yields expected to fall

The yields of Malaysian Real Estate Investment Trusts (REITS) are expected to come down next year in view of the surplus in office buildings with the completion of new projects.

The yield, which is also known as return on investment in properties, is derived by dividing rental with property value.

President of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia, Choy Yue Kwong, said while the surplus in office buildings is expected if more developers receive the nod to build, there are very few premium-grade 'A' buildings.

"Investment-grade buildings with premium values are the ones foreigners are looking for," Choy said in an interview.

Choy said while there are enough of good properties in Kuala Lumpur, not many of them are for sale.

"Some of them are owned by banks and most of them do not have the incentives to sell," he said.

He said the owners, some of them big corporates like Boustead Holdings Bhd and its major shareholder, Armed Forces Fund Board, own a lot of properties but may not be motivated to sell them as they are in the business of investing in properties and collecting rentals to pay dividend to members.

However, Choy said, there are rare instances when corporates or REITs will sell.

In March this year, Pelaburan Hartanah Nasional Bhd, manager of Amanah Harta Tanah PNB (AHP) sold three parcels of land in Pahang, Perlis and Kedah, together with shopoffice units erected on the parcels, to Permodalan Nasional Bhd for RM2.01 million.

The proceeds from the disposal were used to part-finance the cost of upgrading and refurbishment of Plaza VADS in Taman Tun Dr Ismail, Kuala Lumpur, another property owned by AHP, a REIT.

Choy said that while investment-grade properties are most sought-after, there is no need to buy expensive properties, or Grade A buildings, to get a reasonable yield of seven per cent.

"For instance, you can buy a property in Cyberjaya and still get a reasonable yield.

"It is also important that buildings are rebranded to upmarket category," he said.

He said one of the well-known office and commercial buildings in KL which has been extensively re-branded to upmarket brand is the Intermark, which is located at the junction of Jalan Tun Razak and Jalan Ampang.

It sets new standards in design and quality by integrating green technology and a lifestyle environment for work and leisure.

The project, which consists of Grade A office towers, an international hotel and retail podium, was a refurbishment of several buildings -- City Square, Empire Tower, Plaza Ampang and Crown Princess Hotel.

Choy said market rate of office space for premium Grade A office buildings in Kuala Lumpur is expected to be stable next year with market rate of between RM5 and RM7 per sq ft.

By Bernama

Selangor Prop Q4 profit grows to RM60m

Selangor Properties Bhd's pre-tax profit for the fourth quarter ended Oct 31, 2010 rose to RM59.843 million from RM45.017 million in the same quarter of 2009.

Revenue, however, fell to RM52.251 million from RM155.119 million previously.

For its fiscal year ended Oct 31, 2010, it recorded a higher pre-tax profit of RM71.787 million compared to RM61.558 million in 2009. Revenue fell to RM203.044 million from RM321.702 million previously.

In a filing to Bursa Malaysia today, the company said the increase in pre-tax profit was mainly due to contributions from property development, investment properties and education.

The group said prospect for the next financial year remained positive.

By Bernama

Wednesday, December 22, 2010

CapitaLand unit to buy Penang mall

SINGAPORE: CapitaMalls Asia, a unit of Southeast Asia’s largest property developer CapitaLand, said today it will acquire a mall in Penang, Malaysia, for S$275.6 million (US$209.9 million).

The firm said Queensbay Mall, its fourth in Malaysia, will form the seed asset for its planned RM1 billion Malaysia retail property fund.

“The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia’s market leadership in the state,” said Lim Beng Chee, CEO of CapitaMalls Asia.

By Reuters

L&G acquires 10 parcels of land for RM25m

PROPERTY developer Land & General Bhd (L&G), via its unit Bright Term Sdn Bhd (BTSB), is acquiring 10 parcels of land from Seremban Gold Resort Bhd for RM25 million in cash.

L&G said the properties would provide an opportunity for the group to expand and complement its existing business of residential and commercial property development, said the company in a filing to Bursa Malaysia today.

"It will also serve as an opportunity for the group to venture and penetrate into the development activities in the vicinity of Senawang and Seremban in Negri Sembilan," it said.

The 10 parcels of land comes with a 27-hole golf course with a club house and other supporting facilities, five parcels of vacant residential development land, forty-four parcels of vacant bungalow plots, a single-storey bungalow house and a parcel of industrial plot designated for Tenaga Nasional Bhd sub-station located within the Tuanku Jaafar Golf and Country Resort.

The group intends to develop the properties into an upscale high-quality residential development with a modern tropical concept which would include bungalow lots, double-storey cluster semi-detached houses, link cluster houses and apartments.

The estimated gross development value of the proposed development is RM555 million with an estimated gross development cost of RM419.54 million and estimated gross development profit of RM135.52 million.

The proposed development will be financed through internally generated funds and borrowings.

The group is finalising the master plan for the proposed development, construction on which is expected to commence in 2011/2012, and is scheduled to be completed in 2018.

L&G said the proposed development was expected to enhance its future revenue stream which in turn was anticipated to contribute positively to the group's financial performance in the future.

"The board is of the view that the proposed acquisition provides an excellent and timely opportunity for the efficient deployment of the group's surplus financial resources in order to achieve a better return for shareholders in the long-term," said the company.

By Bernama

Tuesday, December 21, 2010

Tax on property rentals

If you own a property that you rent out, you should know that besides the prospect for ongoing income and capital appreciation, such investments offer deductions which can reduce the income tax on your profits.

However, what type of property investor are you? If you have been actively looking for housing properties to purchase and selling them at a profit, you may not be a passive investor. It is likely that you could be regarded as a property dealer or trader.

The profits derived by a property trader are taxed as income from a business whereas that derived by passive investor is treated as a capital gain and will be subject to a 5% real property gains tax if the property was held for less that five years. If held longer, there will be no tax.

The law to determine whether you are a property trader is imprecise and the outcome can depend on a subjective evaluation of the relevant facts.

For example, does it mean that if you have sold a property within a two-year period, you will be a property dealer? Not necessarily, since it depends on your intention when you acquired that property and the reason why you sold it.

The sale of a second property will reduce the strength of a claim that you are not a property dealer but again, there may be reasons to enable you to argue otherwise.

Rent received in advance

The money that you receive for rent is generally considered taxable in the year you receive it, even when it is not due or earned. You should therefore include advance payments of rent as income even though they are not due.

Tenant-paid expenses

Expenses paid by your tenant are considered income to you. This would include, say, an emergency repair to an air conditioner while you are out of town. You can then deduct the repair payment as a rental expense.

Trade for services

Your tenant might offer his services in exchange for rent. You must include as income a fair market value of his services.

For example, if your tenant, an accountant, agrees to help you prepare your accounts in exchange for two months rent, you must include the two months rent as income even though you did not actually receive the money.

Security deposits

Such deposits are not taxable on you when you receive them if the intent is to refund the money to the tenant at the end of the lease. If the tenant breaches his lease terms, then you are entitled to use the deposit to make good any defects in the property and return the balance to the tenant.

You must include the amount used to repair the defect as income and at the same time claim the amount spent as a deductible expense.

Repairs and improvements

Owners of rental properties should not assume that anything done on the property is a tax-deductible expense. The tax law looks at it quite differently.

A repair keeps your rental property in good condition and is therefore deductible in the year you incur the expense.

Improvements, on the other hand, will add value to your property and the costs are not deductible. Improvements could include a new patio, a garage or a new roof.

From a tax standpoint, you should carry out repairs as the need arises rather than wait until the problem becomes such as to require extensive renovations where elements of improvements would invariably be present. If you bought a dilapidated property and immediately incurred repair expenses on it, these “initial” repairs are not deductible, being of a capital nature.

Mortgage and other expenses

Expenses incurred to obtain a mortgage are not deductible. These could be appraisal fees, commissions or legal fees.

When you start making your mortgage payments, the amounts paid relating to your rental property will only be deductible to the extent of the interest portion. This would be ascertainable from the annual statement, which your bank will send you.

You will also be able to deduct the cost of insurance on the rental property as well as assessments and quit rent.

Rental as a business

The Inland Revenue Board (IRB), in its public ruling, states that “Where in conjunction with the letting of a property, a person also provides ancillary or support services/facilities, the letting can be considered a business source of income …” The consequence is that you are entitled to claim “capital allowances” on any plant and machinery used in the business of letting.

These could include air conditioners, refrigerators as well as furniture and fittings. Should the tax-deductible expenses in any one year exceed the rental income, then the excess being a business loss can be carried forward.

Keep good records

The IRB can be reasonable (based on the law) in deciding on the items you can deduct but you need to show them that you have adequate records of the expenses. Always be prepared to back up your claims.

Kang Beng Hoe is an executive director of Taxand Malaysia Sdn Bhd, a member of the Taxand organisation of independent tax firms worldwide. The views expressed do not necessarily represent those of the firm. Readers should seek specific professional advice before acting on the views.

By The Star (by Kang Beng Hoe)

UEM Land: Sunrise shareholders say ‘aye’

UEM Land Holdings Bhd has received enough acceptances from Sunrise Bhd shareholders to ensure its RM1.4 billion takeover will happen.

Shareholders with more than 50 per cent of Sunrise have said yes to the offer, which has been extended to January 7 2011 from tomorrow, UEM Land said in a statement to Bursa Malaysia yesterday.

The offer still needs the approval of UEM Land shareholders at a meeting tomorrow

By Business Times

Olympia Ind sells land in Melaka for RM42m

Olympia Industries Bhd's wholly-owned subsidiary, City Land Sdn Bhd, has entered into sale and purchase agreements for the disposal of 14 pieces of freehold land measuring 21.38 hectares in Melaka to Starwatt Engineering Sdn Bhd for RM42 million.

In a filing to Bursa Malaysia today, the company said the proposed disposal was in line with Olympia Industries' restructuring exercise to reduce its total debts.

"Resulting from the early settlement of the existing encumbrances with the financier, the Olympia Industries group will derive significant interest savings estimated at RM4.3 million, assuming redemption of 2007/2013 Redeemable
Unsecured Loan Stocks (nominal value amounting to RM12.6 million) and 2007/2013 Irredeemable Convertible Bonds (nominal value amounting to RM21.3 million), is made before April 21, 2011," it said.

The proposed disposal is expected to reduce the group's gearing position to 0.49 times from 0.53 times. Olympia Industries will make a gain of RM0.96 million from the proposed disposal.

The company intends to utilise the proceeds from the proposed disposal to redeem the existing encumbrances of RM33.9 million. The balance will be used for working capital requirements of the group.

The timeframe for full utilisation of proceeds is expected within a year after the completion of the transaction. The proposed disposal is expected to be completed on or before March 31, 2011 or the extended date of completion by the end of April 2011.

By Bernama

KPJ to open 4 new medical centres


KPJ Healthcare Bhd, Malaysia's leading private healthcare provider, is on target to open four new medical centres by 2012 to add to its stable of 20 hospitals.

KPJ Healthcare, a member of the Johor Corp Group, is expected to spend nearly RM500 million on the hospitals in Bandar Baru Klang in Selangor, Pasir Gudang and Muar in Johor, and Sabah Medical Centre in Kota Kinabalu.

Its managing director, Datin Paduka Siti Sa'diah Sheikh Bakir, said it had other hospitals in the pipeline but they would be built later.

"The construction of the four hospitals is in progress and the Klang hospital, which costs nearly RM100 million including equipment, is expected to open next year.
"The RM200 million Sabah Medical Centre and the Muar and Pasir Gudang hospitals, which cost RM70 million and RM90 million respectively, are expected to open in 2012," she told reporters in Kota Baru, Kelantan, yesterday.

Siti Sa'diah was speaking after the presentation of the Malaysian Society for Quality in Health (MSQH) accreditation to its hospital, Perdana Specialist Hospital, and the subsequent change of its name to KPJ Perdana Specialist Hospital.

KPJ Perdana is the ninth hospital in the group which has received the international-standard accreditation. The others are KPJ Ampang Puteri Specialist Hospital, KPJ Johor Specialist Hospital, KPJ Ipoh Specialist Hospital, KPJ Damansara Specialist Hospital, KPJ Selangor Specialist Hospital, KPJ Seremban Specialist Hospital, KPJ Kajang Specialist Hospital and Kedah Medical Centre.

Siti Sa'diah said it had targeted four hospitals to achieve the accreditation this year and had managed to do so.

"We hope to get another four hospitals to receive the accreditation next year," she said.

The accreditation was presented by MSQH chief surveyor Dr Mary Abraham to the chairman of KPJ Perdana Specialist Hospital, Aminudin Dawam.

By Business Times

Monday, December 20, 2010

Penang to become 'preferred regional hub'

The Federal Government is to make Penang the preferred hub in the region, Prime Minister Datuk Seri Najib Tun Razak said Monday.

He said several development strategies designed to stimulate the state's economy and provide jobs were driving the federal government towards that goal.

The development in Penang would result in encouraging economic growth in the national interest, he said at the ground-breaking for an extension project at the Bayan Lepas International Airport here. Penang Chief Minister Lim Guan Eng was present at the ceremony.

Najib said 10 infrastructure projects had been identified for implementation, and they included the expansion of the airport, Penang Port and the Penang Bridge, construction of the second bridge and the creation of a multimedia super corridor in the state.

"These initiatives will not only facilitate economic activities but also support our nation's objective to increase tourism revenue from the RM53 billion in 2009 to RM168 billion by 2020," he said.

Najib said Penang had many unique advantages which positioned the state well to become a hub for the northern corridor and the growth triangle comprising Indonesia, Malaysia and Thailand.

"For example, Penang already offers the highest economic density and the shortest distance to market for a city in the growth triangle," he said.

The total development of the airport expansion project, targeted to be completed by 2012, costs RM250 million, which is provided for under the RM60-billion fiscal stimulus package announced by the federal government last year.

Najib said the project was yet another federal government initiative to enhance facilities and services as Penang was a catalyst for growth of the tourism industry.

From the commercial perspective, airports enjoyed a competitive advantage and a captive market and, today, the modern airport offered much more than just a place to catch a flight, he said.

He said that following the example of successful airline hubs around the world, Malaysia envisioned its airports as a platform to drive commercial business.

In today's interconnected world, the abilities to offer high quality reliable air travel services and facilities served as a catalyst to attract trade and investment into any country, he said, adding that this directly supported employment and wealth generation which in turn would help Malaysia's drive to become a high-income nation.

Najib said the Penang international airport had seen encouraging traffic growth, receiving more than 3.4 million passengers this year up to September, up by 30.5 per cent from the corresponding period last year.

"As such, I am sure the expansion of the airport will enable Penang to achieve greater economic growth," he said.

By Bernama