Tycoon Li Kashing firm buying malls in Malaysia

PETALING JAYA: Singapore-based ARA Asset Management Ltd, which is linked to Hong Kong tycoon Li Kashing, is in different stages of negotiation to buy between five and 10 malls throughout Malaysia.

Its CEO (ARA private funds) and director (corporate office) Ng Beng Tiong said its second Asia Dragon Fund has a fund size of US$1bil to buy Asian assets. Its first Asia Dragon Fund has a fund size of US$1.1bil. ADF is the flagship private real estate fund of ARA.

ARA Asset Management is an affiliate of Hong Kong's Cheung Kong Group, which is controlled by Li.

ARA was set up in 2002 when Li and its other founder, John Lim of Singapore, came together at a time when Cheung Kong was primarily a conglomerate focusing on buying and selling land for development. From a zero base, ARA currently has assets in Singapore, Hong Kong and China exceeding RM44bil in value.

“We don't want to set a limit but we do have a country limit. Nevertheless, that is a lot of firepower given the size of the fund,” said Ng yesterday, adding that they were at different stages of negotiations.

He was in Malaysia to launch 1 Mont'Kiara Mall (1MK), which was purchased by the Cheung Kong Group last year for about RM333mil.

This will be ARA's third property, the other two being the AEON Mall in Malacca and Summit in Subang Jaya.

Ng said they liked well-located community malls which serves the upper middle-class group, with single ownership and management.

“We like community malls because they serve a local need. In that sense, they are stable and defensive. We are also prepared to buy older malls and refurbish them,” he said.

Ng said ARA was looking for economies of scale and they had not limited themselves to just the Klang Valley. Instead, they are considering having assets throughout Malaysia as there is always the possibility of tenants following them. He said there were looking at a risk-return profile with an upper limit of an internal rate of return of about 20%.

“This is an opportunistic fund, meaning we are looking at buying assets at a higher risk, which brings with it a higher return,” Ng said.

In the case of 1MK, it was under construction when the Cheung Kong Group bought it. “We saw the potential and we liked the location. We put in a lot of hard work, brought in the tenants, did the advertising and promotion, and today it is about 60% tenanted. By the end of the year, it will be about 90% tenanted. In three to five years, this mall will be stable and we will have achieved our rate of returns.

ARA has 25 malls throughout Asia 14 in Hong Kong, four each in China and Singapore and three in Malaysia.

Its primary business includes real estate investments trusts, private funds and real estate management services.

By The Star

Recurring income seen from Nu Sentral

KUALA LUMPUR: Nu Sentral, a retail mall under construction at Kuala Lumpur (KL) Sentral, is expected to generate RM70mil recurring income annually from 2013.

It is a joint venture between Malaysian Resources Corp Bhd (MRCB) and Pelaburan Hartanah Bhd (PHB).

MRCB chief executive officer Datuk Mohamed Razeek Hussain said the group planned to increase recurring income contribution to its turnover.

“We have already embarked on acquiring the properties for the purpose of leasing,” he told reporters after the signing ceremony with NU Sentral retail tenants yesterday.

The mall is managed by Nu Sentral Sdn Bhd of which MRCB and PHB hold 51% and 49% stakes respectively.

MRCB planned to increase the contribution of its recurring income to between 20% to 25% of its total income in two to three years from 10% currently.

“We will be selective in the tenants which will be selected based on the reputation of the brand,” he said adding that 60% of the NU Sentral floor area had been taken up.

Among the tenants that signed up yesterday were Golden Screen Cinema, MPH Bookstore, Parksons, Wangsa Bowl and AMP Square Premium Karaoke. MRCB had 28 new tenants yesterday.

The seven-storey retail mall aims to be the first in the country which has the Singapore BCA Green Mark compliance and Malaysia Green Building Index certification.

By The Star

Mah Sing earnings up on existing projects

PETALING JAYA: Mah Sing Group Bhd's net profit jumped 47.6% to RM41.1mil for the first quarter ended March 31 due to progressive recognition of development revenue and contribution from its property projects in the Klang Valley, Penang and Johor Bahru.

The company said in a statement yesterday that revenue for the quarter rose to RM311.7mil against RM238.3mil a year ago. Earnings per share stood at 4.95 sen.

Mah Sing said projects that contributed to the group's profit and revenue included Perdana Residence 2 in Selayang, Garden Residence in Cyberjaya as well as Hijauan Residence and One Legenda in Cheras.

“Also contributing are projects such as Residence @ Southbay and Legenda @ Southbay in Penang as well as Sierra Perdana, Sri Pulai Perdana 2 and Austin Perdana in Johor Bahru.

“Our plastics division also contributed positively to revenue and profit,” it said.

The developer added that its balance sheets remained healthy with net gearing ratio at 0.32 as at March 31.

“The group has 22 ongoing projects and another seven in the pipeline for continued earnings growth in the near and medium term,” it said.

As at May 13, Mah Sing achieved RM975mil in sales, meeting 49% of its full-year sales target of about RM2bil. The group has unbilled sales of about RM1.6bil as at March 31.

By The Star

Fresh new start for Ibraco

KUCHING: Property developer Ibraco Bhd, which has exited the Practice Note 17 (PN17) list, will embark on a new residential project in Stutong here.

The company also plans to extend its property development activities to other major towns in Sarawak and venture into construction business.


Chew says Ibraco will launch the Stutong project in July.

Chief executive officer Chew Chiaw Han said Ibraco would launch the proposed Stutong housing project, comprising 77 single-storey terraced and semi-detached houses, in July.

“The project will have a gross development value (GDV) of about RM15mil,” he told StarBiz.

Bursa Malaysia on Tuesday removed Ibraco from the PN17 classification, about six months after the company completed its regularistion scheme.

Ibraco was classified a PN17 company after its revenue for the financial year ended Dec 31, 2009 fell below 5% of its paid-up capital.

The company's regularisation scheme involved the development of Tabuan Tranquility, a massive commercial, industrial and residential project along Kuching-Samarahan Expressway.

The mixed development on 66ha will comprise 640 double-storey terraced houses, 108 semi-detached houses, 60 units of three-storey townhouses, 76 units of four-storey shophouses, 72 semi-detached industrial buildings, an office block and a petrol station.

Tabuan Tranquility, to be developed in five phases up to 2015, has a GDV of RM517mil.

Chew said all the 76 shophouses priced between RM1mil and RM1.79mil had been sold. These shophouses are expected to be completed in July.

“About 85% of the Tabuan Tranquility phase 5 residential development, comprising 204 terraced houses and 38 semi-detached houses, have been booked,” he added. These houses are expected to ready by November 2012.

Chew said Ibraco also planned to undertake its first mixed property development in Bintulu or Miri.

He said the company had identified the land and might carry out the development via a joint venture with the landowner.

Although the plan has yet to be finalised, he hoped the project could take off this year.

To diversify its activities, Chew said Ibraco planned to venture into construction, including infrastructure and civil building works, for the private and public sectors.

“We are actively studying it. Ibraco is an experienced contractor and has all the expertise,” he added.

Ibraco, which has built about 10,000 properties over the years in the Tabuan area here, has a land bank of about 285ha, mostly in Kuching and Lundu.

By The Star

Prinsiptek in RM90m Bangkok project

SHAH ALAM: Prinsiptek Corp Bhd will embark on a mixed development project in Bangkok next month with a gross development value of RM90 million.

Its group managing Datuk Foo Chu Jong said the mid-range development should be completed within three to four years.

"The land for the Bangkok project is about 12.15ha and is only half an hour away from the city. It is at a very good location and is right beside a highway," he told Business Times after the company's annual general meeting, here yesterday.

Foo said the company has been constructing low-cost housing in Thailand (prior to this development) in a joint venture with the Thai government.

Prinsiptek expects to clock in double-digit growth this year from several developments and construction projects it had undertaken both locally and abroad.

Last year, the company bounced back with a net profit of RM2.27 million after recording a loss in 2009.

On local projects, Foo said Prinsiptek will embark on Vue Residences Service Suits in Jalan Pahang, Sri Gombak, Bangi in Selangor and Pahang in the coming months.

He said the company's current order book for construction stood at RM220 million while for development projects, RM489 million.

Foo added that its property projects were a mix of both leasehold and freehold developments.

Prinsiptek, he said, was in initial talks with the Sabah state government on a private finance initiative project that will enable the company to build government buildings and lease them back to the state government for the next 30 years.

Foo also said that it was looking for land to build more affordable houses under the My First Home Scheme.

"We are currently in talks to develop a leasehold housing area in Kajang under the My First Home Scheme," he added.

By Business Times

Fajarbaru JV buying 44ha site in Balik Pulau

It is understood that the JV intends to undertake medium- to high-end property development projects, which collectively boast a gross development value exceeding RM3 billion.

Kuala Lumpur: A joint venture (JV) between Fajarbaru Builder Group Bhd and Sagajuta (Sabah) Sdn Bhd is on the verge of buying 44ha of land in Balik Pulau, Penang, via a private tender, people familiar with the matter said yesterday.

At least two people with direct working knowledge of the two companies independently confirmed the JV's plan to acquire the land from a local non-government organisation in a cash deal valued at around RM200 million.

According to land brokers, land in Balik Pulau sells at between RM16 per sq ft (psf) and RM35 psf, depending on the type of land.

Among factors taken into consideration are if the land is leasehold or freehold, and whether it is agriculture, industrial, estate, orchard or housing land.

Business Times was told that an announcement by the JV on the matter will be made by as early as next month.

It is understood that the JV intends to undertake medium- to high-end property development projects, which collectively boast a gross development value exceeding RM3 billion.

Securing the project will be a critical boost for Fajarbaru, which is partly controlled by Datuk Low Keng Kok, former managing director of Road Builder (M) Holdings Bhd.

Fajarbaru is a successful medium-sized construction company, but it has been facing a margin squeeze as construction margin here is not as lucrative as before.

For the nine months ended March 31 2011, Fajarbaru posted a lower group level pre-tax profit of RM15.75 million versus a group pre-tax profit of RM19.31 million in the same period a year ago.

This is despite revenue for the period under review growing marginally to RM126.01 million from RM121.27 million before.

Analysts said construction margins are currently between 8 per cent and 12 per cent, while margins for property development vary from 18 per cent to as high as 30 per cent.

The planned township, which will take five to 10 years to develop, will comprise landed and high-rise residences, a commercial hub, mall and leisure properties, a source said.

Zerin Properties founder and chief executive officer Previn Singhe said with strong demand for landed properties in Penang Island, the project will be well-received if given the approval.

"Penang is a strong market. If you build good condominiums, people would buy. We expect sales to be very domestically-driven," he said.

Fajarbaru's partner in the JV, the privately-held Sagajuta, recently gained prominence after it emerged that the Sabah-based company had identified Robert Kuok Hock Nien's Jerneh Asia Bhd as a possible reverse takeover target.

Both companies are now in the midst of trying to finalise the deal, Jerneh Asia's filings to the stock exchange show.

One of the key driving forces of Sagajuta is its managing director Datuk Chan Boon Siew.

In Sabah, Sagajuta is famous for its 1Borneo development project, the first and largest lifestyle hypermall in the land below the wind.

By Business Times

Developer sees 10% rental yields from office tower

An artist’s impression of Khor Joo Saik Sdn Bhd’s Menara Binjai

KUALA LUMPUR: Property developer Khor Joo Saik Sdn Bhd expects to generate a rental yield of 10% within three years of operations of its Grade-A office tower, Menara Binjai.

The building, which has a gross development value of RM180mil, is strategically located along Jalan Binjai and Jalan Ampang, and will be launched in the final quarter of this year, according to director Chua Guan Hock.

“Our building is strategically located on prime (KLCC) land with a lot of amenities and a good transportation network,” he told StarBiz in an interview, adding that potential tenants would be offered a competitive rate of RM7.50 per sq ft. Khor Joo Saik Sdn Bhd owns the land where Menara Binjai is being built.

“Good thing we don't have to buy the land with heavy borrowing costs. (Because of this) we have the strength to be very competitive with the rentals,” said Chua.

Chua said he expected 75% of the offices to be taken up within the first year of operations, adding that the company was looking to attract tenants within the oil & gas, finance, services and trading sectors.

“We have had enquiries from multinational companies as well as embassies as many of them (embassies) are located nearby. We're looking at a good balance of locals and expatriates (as tenants),” he said.

Chua said another factor that made Menara Binjai appealing to potential tenants was the fact that it was a certified green office tower.

The tower has received the Green Mark Gold Certification (Provisional) by the Singapore Building and Construction Authority (BCA) as well as the provisional certification from the Malaysia's Green Building Index (GBI), making it the first dedicated office tower in the country to receive both awards.

The 35-storey Menara Binjai will have four levels of basement parking and another four levels of podium parking. The office floors, which have a net lettable area of between 12,000 sq ft and 13,000 sq ft, start from level six onwards.

“We're hoping to launch the building on Nov 11, which is a very auspicious date,” said Chua.

By The Star

MCL Land gets good response to Singapore Terrasse condo

SINGAPORE: Encouraging home sales continued over the weekend with MCL Land's Terrasse in Hougang finding buyers for more than 150 apartments.

The homes at the 414-unit project in Hougang Avenue 2, whose preview started on Saturday, were sold at an average price of S$950 per sq ft.

The 99-year leasehold project has homes ranging from 506 sq ft one-bedders to five-bedroom penthouses of about 2,210 sq ft. Ground-level garden duplexes have yet to be released.

The Straits Times understands that a one-bedder will start from S$580,000 while a five-bedroom penthouse will start from S$1.85mil.

All unit types received even interest, with 90% of the buyers locals and permanent residents. The rest were foreigners from countries including Malaysia and China.

Far East Organization also saw 30 units across its properties snapped up by home buyers last week, excluding sales at Eight Courtyards in Yishun. Its Waterfront collection in Bedok Reservoir Waterfront Isle, Waterfront Key and Waterfront Gold sold 15 units in total while The Greenwood and Suncottages sold two units each.

Woodhaven in Woodlands and Seastrand in Pasir Ris will start sales in the first and second half of next month respectively, The Straits Times understands. Online marketing material suggests Seastrand prices will start from S$850 per sq ft. Woodhaven's average price will range from S$900 to S$1,000 per sq ft. These prices do not factor in any possible early bird preview discounts.

On the public housing front, this year's first executive condo launch, Belysa in Pasir Ris, had attracted 520 e-applications as of 8:30pm on Monday. This is about 1.7 times the number of units in the 315-unit project at the junction of Pasir Ris Drive 1 and Elias Road, which experts say is a healthy figure.

Belysa illumination in Swedish will offer only three and four-bedroom apartments to cater to three-generational living. Priced at an average of S$670 per sq ft, the indicative price of an 829 sq ft three-bedder starts from S$574,000 while a 1,335 sq ft four-bedder starts from S$882,000. Sales bookings for units will start tomorrow.

Experts said buying interest was still healthy for projects that were reasonably priced and in a good location.

PropNex chief executive Mohamed Ismail said buyers had begun to accept that prices especially in mature estates, even in suburban areas could be about S$1,000 per sq ft.

By Straits Times

Bina Darulaman, Belleview ink deal

BINA Darulaman Bhd has signed a joint development agreement with Belleview Bina Sdn Bhd to develop two high-rise condominium blocks in Kedah with a gross development value of about RM109.55 million.

The condominium, comprising 277 units, will be built on a land already owned by Bina Darulaman, measuring 1.45ha.

Construction work is expected to start in November this year with target completion in November 2014, the company told Bursa Malaysia yesterday.

By Business Times

Mitrajaya wins RM46m hospital project

MITRAJAYA Holdings Bhd has bagged a RM46.4 million project to build a private hospital in Rawang, Selangor, which is expected to be completed in 18 months.

In a statement yesterday, Mitrajaya said its wholly-owned subsidiary Pembinaan Mitrajaya Sdn Bhd had accepted the letter of award from Rawang Specialist Hospital Sdn Bhd yesterday.

It will build an eight-storey hospital with two-storey basement at Section 16, Rawang. The contract will start on June 6 , Mitrajaya added.

By Business Times

Mah Sing to launch RM2.5bil projects

Tan Sri Leong Hoy Kum with a model of Icon Residence@Mont’Kiara

PETALING JAYA: Mah Sing Group Bhd will launch RM2.5bil to RM3bil worth of projects in the Klang Valley, Penang and Johor this year to meet its sales target of RM2bil for the current financial year ending Dec 31.

Group managing director and chief executive Tan Sri Leong Hoy Kum said the projects would comprise an array of commercial, residential and industrial properties.

The two commercial projects are Icon City Petaling Jaya and Star Avenue@D'Sara, while the industrial project is iParc 3@Bukit Jelutong.

Residential projects lined up for launch in the Klang Valley include Hijauan Residence in Cheras, Kinrara Residence, Aman Perdana, Bayu Sekamat, M Suites@Jln Ampang, M City@Jln Ampang and Garden Plaza in Cyberjaya.

There are also three residential projects to be launched in Penang Legenda@Southbay, Icon Residence and Ferringhi Residence. The project in Johor Baru is Sierra Perdana.

Leong said Mah Sing's RM2bil sales target for this year was higher than the record sales of RM1.5bil achieved last year.

As at April 11, the developer recorded sales of RM738mil, which was about 37% of its sales target for this year. Mah Sing also has unbilled sales of RM1.3bil as at Dec 31, 2010 that will be realised over the next two to three years.

For the financial year ended Dec 31, 2010 (FY10), Mah Sing achieved profit after tax and minority interest of RM118mil, a 25.5% increase over RM94mil in 2009. Group revenue for FY10 was also higher at RM1.1bil against RM702mil previously.

Leong said Mah Sing would aggressively expand its land bank and was now looking for suitable prime land in greater Kuala Lumpur, Penang island and Johor Bahru.

Last year, the group undertook 10 land acquisition exercises. This year, it has so far signed one deal.

“These are prime land which can yield remaining gross development value (GDV) and unbilled sales of about RM14.1bil. It should keep the group busy for the next seven years,” he added.

Leong said Mah Sing aimed to buy land that could provide GDV of RM7bil to RM12bil this year. He said the group had the resources to fund the acquisitions.

Besides making outright land purchase, the group is also open to joint ventures with land owners.

“We are scouting for land near the proposed MRT stations, as the new transport infrastructure would create higher value for these land,” he added.

Mah Sing's upcoming projects that are located near the proposed MRT stations along the Sungai Buloh-Kajang line include Star Avenue@D'Sara (near Taman Industri Sungai Buloh station) and One Legenda and Hijauan Residence (near Taman Suntex station).

Projects along the proposed circle line include M Suites (near Great Eastern mall stop), M City (near Ampang point station) and Icon Residence Mont Kiara (near Matrade stop).

Star Avenue@D'Sara, the first night-guarded concept shop-office development, is one of the first new commercial projects coming up along Jalan Sungai Buloh. The RM402mil project comprises 3-storey shop offices and retail lots.

The RM980mil Kinrara Residence is a medium-high-end residential project on about 139 acres in Puchong. It comprises superlink residences, semi-detached units and bungalows.

M-City@Jalan Ampang will feature residential suites, designer small-office home-office (soho), sky villas and boutique retail units on five acres of freehold land.

The RM1.2bil project is targeted for preview in the second half of this year. Its first-phase preview will be designer soho and 3-storey boutique retail shops.

Icon Residence Mont' Kiara will feature 260 partially-furnished residences with a GDV of RM408mil. The development will offer about 200 different unit layouts in three iconic towers of 26, 28 and 36 storeys.

Dubbed garden terraces in the sky, the residences will have price tags from RM1.148mil.

By The Star

Bolton suffers drop in profit to RM20.3m

Bolton Bhd's pre-tax profit for the financial year ended March 31, 2011 fell to RM20.34 million from RM50.7 million the previous year while revenue fell to RM243.23 million from RM257.47 million.

For the fourth quarter period ended March 31, its pre-tax profit dropped to RM4.84 million from RM16.66 million in the same period last year.

Revenue increased to RM87.51 million from RM74.17 million previously, the company said in a filing to Bursa Malaysia today.

It attributed the lower profit to mainly to the current work in progress for the new launches with all being at their initial stages.

Its new property launches are Arata (100 units of high end condominiums) located at Bukit Tunku, another 215 units of service apartments at Jalan Ceylon and the Wharf (a mixed commercial and residential development) located at Taman Tasik Prima, Puchong.

By Bernama

BDB to build condos in Alor Setar

Bina Darulaman Bhd (BDB) together with Belleview Bina Sdn Bhd (Belleview) will be developing a condominium here in the near future.

Work on the two-block unit named Kondominium Amansuri Residences, estimated at a cost of RM110 million, is expected to start in November with completion due in 2014.

Chairman of BDB Datuk Mohd Saad Endut said the proposal to build the condominium came about with plans to redevelop the existing Kompleks Tunku Yaacob and build an international standard hotel on a piece of land owned by the Kedah State Development Corporation (PKNK) and left idle the past 16 years.

He said the condominium will be built on a 1.469 hectare piece of land.

All the three projects will be built along the same row, he said during his speech at the signing of an agreement here today between BDB and Belleview for the joint development.

"The condominium will comprise two blocks of 22-storey and 25-storey respectively and will house a total of 227 residential units including six units of penthouse," Mohd Saad said.

Among the buildings' features would be car parks, swimming pool,
multipurpose hall, a pavilion, gymnasium and other facilities on par with the best condominiums around the country.

The condominium will also be gated and have tight security, he added.

With BDB's success record in Kedah and the achievements of Belleview in Georgetown, Mohd Saad said he was confident that the project would be a huge success.

"It would change the skyline of Alor Setar city besides increasing the state's coffer through tax collection and so on," he said.

Mohd Saad said that although the sales price has not been fixed for the condominium, he was confident that the price would be lower compared with prices in Kuala Lumpur and Georgetown.

Kedah Sato Sdn Bhd, a wholly owned subsidiary of BDB will be undertaking the construction of the condominium.

Meanwhile, Menteri Besar Datuk Seri Azizan Abdul Razak said the process of taking over the site of Kompleks Tunku Yaacob was going on and the request for the takeover of the building had already been sent to the state government.

"We expect that only in August we will be calling the involved family for the provision of compensation and we have not decided on the form of compensation that would be given," he said.

He also added the project had been delayed due to several unavoidable problems.

By Bernama

YNH Property enjoys higher Q1 pre-tax profit

YNH Property Bhd achieved a higher pre-tax profit of RM21.43 million for the first quarter ended March 31, 2011, compared with RM20.55 million registered in the previous corresponding quarter.

However, revenue declined to RM55.26 million, from RM93.80 million, registered previously.

In a filing to Bursa Malaysia today, the group said its performance was mainly derived from the recognition of progressive sales of its inventories, development properties and commercial properties.

It said the global economic climate remained challenging after almost three years from the 2008 financial crisis.

"Notwithstanding the challenging environment, the group had been achieving strong demand for its projects such as Manjung Point Seksyen 5, Taman Seri Melor, Taman Sejati III and Taman Pantai Remis in Seri Manjung as well as the balance units in Ceriaan Kiara in Month Kiara," it said.

The company expects sales from both the township projects in Manjung and Klang Valley to continue its contribution to the group's income.

By Bernama

iProperty launches GPS-based Android app

iProperty.com Malaysia, the country’s number one online property portal, recently launched Southeast Asia's first Android app for property search.

The new product was designed to give users real-time access to over 255,000 properties for sale and rent, iProperty.com Malaysia Sdn Bhd said in a statement today.

It said the launch followed the its very successful unveiling of its iPhone and iPad real estate search apps last year.

"Since its debut, these apps have seen tens of thousands of downloads and have been ranked number one in the Lifestyle Category in the iTunes App Store," it added.

A highlight of the Android app is its Global Positioning System
(GPS)-supported feature, enabling users to view in real time properties on the market near their current location via Google Maps.

By Bernama

Malton plans RM2.2b launches over next 3 years

PETALING JAYA: Malton Bhd plans to launch eight property development projects worth some RM2.2 billion over the next three years, as well as beef up its construction division.

Executive director Hong Lay Chuan said Malton's construction unit has about RM200 million-odd worth of jobs in hand and that the division currently contributes some 30 per cent to group revenue.

Hong told reporters after the company's shareholder meeting here yesterday that Malton is bidding for design and build projects from the private sector.

He did not rule out tendering for government projects, especially those that come under the Economic Transformation Programme.

"We are bullish on both sectors and hope to do better this year. We do anticipate high cost in land and raw materials but if market sentiments hold up, we should do okay," he said.

For the nine months to March 31 2011, Malton's net profit increased threefold to RM45.7 million on a revenue of RM294.5 million.

On property development business, Hong said Malton foresees the market to be strong this year as demand for new houses is increasing.

Malton's eight new projects comprise medium to high-end residential and mixed property developments, the majority of which are located in the Klang Valley and some in Penang.

Hong said Malton is poised to benefit from the new launches, based on the success of its existing projects in the marketplace since mid-2010.

Malton has five on-going residential and mixed development projects worth some RM1 billion in the Klang Valley.

Hong said the projects in Bukit Rimau and Mutiara Indah in Puchong, which consist of 101 units of shop units and terraced houses respectively, were sold out even before the launch.

"We are looking for landbank to expand our property development division hence the need to raise funds," he said.

Yesterday, shareholders approved Malton's plan for a rights issue to raise between RM139.3 million and RM156.6 million.

Malton will use part of the money to buy land and undertake property development projects. Some RM60 million will be used to pare debt.

By Business Times

E&O to venture outside Penang, KL

Eric Chan with an artist’s impression of Quayside condominiums in Seri Tanjung Pinang phase one.

EASTERN and Oriental Bhd (E&O) will be leveraging on its expertise and reputation as a lifestyle developer to undertake more upmarket projects outside its traditional markets of Kuala Lumpur and Penang.

Deputy managing director Eric Chan says the group is ready to take the next step to move beyond its traditional markets and that includes venturing overseas.

E&O's foray overseas will commence with the opening of an E&O Property Gallery and the first offshore Delicious cafe in Singapore in November.

“We hope this step-by-step initiative will promote the E&O brand and its unique lifestyle experience to the regional and global market,” Chan told StarBizWeek in a recent interview.

Through its range of lifestyle property and other related activities, he says E&O has set new industry benchmarks in terms of concept, quality, design, service and values.

“We have two hotels, the Delicious chain of restaurants, a marina and a shopping mall to complement our property development initiatives to promote a unique lifestyle experience for our buyers,” Chan adds.

In F&B, the Delicious Group is embarking on an expansion drive that will see the opening of more outlets, both locally and regionally.

Presently it operates five Delicious cafes, a Reunion Chinese restaurant, a DISH steakhouse and a Delicious Ingredients gourmet grocer in the Klang Valley.

The first Delicious cafe outside the Klang Valley was opened at Straits Quay festive retail mall in Penang early this month.

A new Delicious cafe will be opened in Sunway Pyramid in August. It will also cross over the causeway in November when a Delicious cafe makes its debut in Singapore.

Chan says E&O is also looking to expand its capacity in the hospitality sector by adding new rooms and service suites to its two existing hotel properties in Penang.

The Loan Pine hotel just underwent a major refurbishment and expansion which saw the number of its rooms increased to 90 from 50 previously,

E&O Hotel will have another 139 suites added to the existing 100 suites once the Victory Annexe block is completed next year. There will also be new facilities including retail outlets.

Chan says it is a natural progression for E&O to leverage on its hospitality management expertise honed through the years to introduce the E&O Concierge Services that provide pay-on-demand concierge services, starting with the Suites at Straits Quay.

E&O is also targeting to manage the serviced suites at St Mary Residences (if it clinches the management contract for the property), and its other future developments.

Its ongoing property projects include the Seri Tanjung Pinang phase one in Penang that will take another three to five years to complete and St Mary Residences in Kuala Lumpur.

E&O's Seri Tanjung Pinang phase two is currently at the masterplanning stage.

Among the Kuala Lumpur projects in the pipeline include condominiums at Jalan Yap Kwan Seng and Jalan Kia Peng, as well as the sale of prime bungalow plots in Damansara Heights.

Chan says although property development is local in terms of supply, “the demand is actually global.”

“Singaporeans make up about 30% to 50% of our total foreign sales, and there is also growing potential to be tapped from other emerging markets like buyers from China and India,” he adds. Chan attributes the strong foreign interest to the relatively lower Malaysian property prices compared with those in other regional markets such as Singapore, Hong Kong and Thailand.

“Liquidity is ample and banks offer friendly financing. At the same time, Malaysian developers continue to innovate and offer quality products which are on par with international standards. Given the reasonable price levels, they present an attractive value proposition to property purchasers,” he explains.

In particular, Chan is upbeat on the Kuala Lumpur and Penang property markets, with the ongoing public sector and infrastructure transformation plans for Greater KL which he says will draw investors and support the property market.

“Kuala Lumpur and Penang are among the most liveable cities in Asia. They emerged in the 8th position in 2010 according to EAC International (an agency that rates living conditions in major cities for expatriates),” he points out.

Citing figures from Malaysian Investment Development Authority, Chan says Penang's growing popularity among foreign investors, having emerged as the state with the highest inflow of foreign direct investment (FDI) totalling RM12bil last year, will give a boost to the property market.

“Another RM7bil of FDI has been committed to be invested in the state which will generate a wave of expatriate workforce for the island within the next three years,” he adds.

Other supporting factors include the ongoing improvements in Penang's key public infrastructure such as the international airport expansion project targeted for completion this year end, the construction of Penang's second bridge (by end 2013) as well as the enhanced connectivity to the state with more air flights into the island.

“Penang's heritage and cultural appeal (as a Unesco World Heritage site) has won it many accolades, including the 2011 vote by Yahoo as one of the Top 10 Islands in the World to visit,” Chan says.

By The Star

Sime eyeing more projects in Singapore

SINGAPORE: Malaysia's largest property developer, Sime Darby Property Bhd, is eyeing for new projects, especially redevelopment projects in Singapore, said managing director Datuk Tunku Putra Badlishah Ibni Tunku Annuar.

“We are constantly looking for new projects, but obviously as you see the land here is very scarce and expensive, so we are doing more on redevelopment projects. We have old warehouses, we convert them into office buildings that kind of projects but we own quite a few buildings in Singapore, so we collect rental,” he told Bernama.

For the tenants, Tunku Putra Badlishah cited one of the buildings the company had in Dunearn Road, Bukit Timah. “We rent out a lot of buildings to our own companies. The motor division, for example, is big in Singapore,” he said.

Asked whether Sime Darby Property is looking for more land for its future projects, Tunku Putra Badlishah said most of the land here was standard in that they are mostly government tendered. “We have tried in the past and we will continue to bid for them,” he said.

He said Singapore was a good market for Sime Darby Property. “We've been successful in Singapore. We have a team here already, so it makes sense for us to continue looking at Singapore,” said Tunku Putra Badlishah, who is here for the Building and Construction Authority Awards (BCA Awards 2011), which recognises excellence in the built environment.

Sime Darby Property's Idea House has been awarded the “Platinum Green Mark” recognition, the first time that the state-run BCA is awarding a platinum recognition in the residential category.

Tunku Putra Badlishah received the award on behalf of the company from the National Development Minister Mah Bow Tan, who also launched the inaugural Construction Productivity Award last night.

He said the Idea House was a prototype project. “It is a research and development project because all the learning that we got in this project, we will try to implement and incorporate as many features of the Idea House in our products.”

Tunku Putra Badlishah said from the Idea House, Sime Darby Property was able to produce photovoltic cells enough to produce to power the house.

“We've been implementing a lot of this switches almost six months ago. So all of our future projects will have some elements of sustainability,” he added.

Meanwhile, the BCA Award is an annual event to honour and pay tribute to displays of excellence in the built environment in the areas of safety, quality and sustainability and user-friendly. This year, it marks a few firsts in the building and construction industry.

By Bernama

Malaysian developers win 4 top Fiabci awards

KUALA LUMPUR: Malaysian developers have won four top places out of the 14 categories contested in the Fiabci International Prix d’ Excellence Award 2011 with another three being runners-up, making this year’s outing the most lucrative.

The winners, from nine countries namely the United States, China, India, Malaysia, Brazil, Russia, Hungary, Singapore and Cyprus, were announced in a gala event held in Cyprus on Thursday night.

The Malaysian developers who picked up the four awards were SP Setia Bhd, Gloharta Malaysia Sdn Bhd, Sunway Pyramid Sdn Bhd and The Western Langkawi Resort & Spa.

SP Setia won the award for Precint 3 Setia Eco Park in the low-rise development category, Gloharta’s Bunga Raya Island Resort and Spa in Kota Kinabalu was the winner in the resort development category and Sunway Pyramid’s mall expansion was top in the retail development category.

The other winner was The Westin Langkawi Resort & Spa.

The runners-up were MMC-Gamuda Joint Venture Sdn Bhd’s Kuala Lumpur Smart Tunnel, Coronation Springs Sdn Bhd’s Springtide Residences in Tanjung Bungah, Penang, and Cahaya Jauhar Sdn Bhd’s Kota Iskandar (Phase 1) in Nusajaya, Johor. About 60 projects were submitted for the international award.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang said this was an indication that our standards had gone up.

“For those who won, their victory is a marketing tool for them. It is a recognition of the holistic nature of their respective development and how it benefits the community it is intended for. They have won because they have met the criteria,” he said.

The successful outing, he added, was significant as it showed that the Malaysian property sector was evolving with new products and new concepts entering the market.

Setia Eco Park spans 790 acres of freehold land in Shah Alam of which 25% of the land has been set aside for lakes, gardens and walkways. It has extensive facilities like tennis courts, swimming pools, badminton and squash courts.

The award marked the SP Setia group as the only Malaysian developer to be recognised three times as a winner at the global level by Fiabci.

It was the second Prix d’Excellence Award for Setia Eco Park following its 2007 win in the Master Plan category.

“We are extremely proud of this achievement and recognition given by an international world body like Fiabci. As the country’s No. 1 property developer, we hold our heads high as we carry the Malaysian flag abroad,” said SP Setia group president and chief executive officer Tan Sri Liew Kee Sin.

By The Star

MK Land Q3 profit jumps more than two-fold

PETALING JAYA: MK Land Holdings Bhd's net profit jumped more than two-fold to RM7.2mil for the third quarter ended March 31 against RM2mil a year ago due to stronger performance of the property segment.

Its revenue for the period rose to RM165.1mil from RM94.7mil a year ago.

Going forward, MK Land's executive chairman Tan Sri Mustapha Kamal expects “double-digit growth” buoyed by its on-going property projects and new launches.

In a briefing yesterday, Mustapha said the “momentum” for the group to achieve double-digit growth was already in place.


MK Land’s incoming CEO Lau Shu Chuan with Tan Sri Mustapha Kamal.

For the nine months ended March 31, MK Land posted a higher net profit to RM15.8mil on revenue of RM292.9mil.

The higher net profit was due to higher revenue and lower finance cost.

Its property development segment generated RM249.5mil, representing 76.2% of the total revenue for the nine months ended March 31. The revenue was mainly from its property projects in the Klang Valley, particularly its Damansara Perdana development.

MK Land had also appointed Lau Shu Chuan as its chief executive officer effective June 1, taking over from Mustapha. Lau is currently the chief operating officer. Mustapha will be redesignated as non-executive chairman.

Mustapha made a comeback as executive chairman on June 25, 2008 when the company was facing difficulties. The company posted a net loss of RM60mil for the financial year ended June 30, 2008 (FY08). He managed to steer the company out of turbulence and felt that it was time to pursue his charity works through his foundations - Yayasan Emkay Foundation, Orang Utan Island Foundation and Pulau Banding Foundation.

“I do not want you to speculate. There's no other reason,” he said when explaining his leave from the company. Mustapha will remain as the major shareholder of MK Land.

Lau agrees with Mustapha on the company's prospects. He said its products were well accepted in the market and that the group had a landbank of 5,000 acres with various developments.

On its gearing level, Lau said MK Land had managed to bring down its borrowing significantly. Its total borrowing stood at RM275mil against its shareholders fund of RM1.1bil.

“We will bring it (borrowings) lower. Our interest is eating into our profit. We have a systematic plan to bring down the gearing level,” he said. Lau, however, said the company's borrowings might increase as it bought new landbank and to finance its joint venture project to develop affordable housing in northern Bangalore, India.

Meanwhile, he said MK Land's shares were “undervalued”. He said the price, at over 30 sen, was still below the company's net tangible assets (NTA). As at March 31, MK Land's NTA stood at 87 sen per share.

By The Star

Govt’s active role in social housing vital

YESTERDAY, Housing and Local Government Minister Datuk Chor Chee Heung said the Government is monitoring the spike in house prices. He went on to say that it will not hesitate to implement measures to keep them under control. This is probably the first time the housing minister has come outright to state a fact that has been staring in our faces the last 18 months or more, particularly for landed units in the Klang Valley, Johor Baru and Penang.

Nevertheless, although the housing ministry has been relatively sanguine about it, Bank Negara has not. Last November, the central bank put in place a requirement for buyers of third and subsequent properties to have a 30% downpayment. Real estate personnel say buyers will adjust to this requirement in due time.

Early this week, Bank Negara raised the overnight policy rate which effectively led to banks raising lending rates by 30 basis points. This effectively will result in banks revising their lending, and deposit rates. Two banking groups have raised their base lending rates and base financing rates by 30 basis points to 6.6% respectively. These rates would affect lending rates of property, automobile and hire-purchase loans, among others.

So far, these are the only two measures that will affect the housing market. While the 30% downpayment was implemented to curb property speculation, the recent rise in interest rates will affect a whole gamut of things over and above more than just housing and the way people are buying into the property market. The raise in interest rates will affect the cost of doing business, among other things.

Housing is a very basic need. It is a terrible thing for a young person or even an older one to have to fork out rental every month, at the end of which, the house does not belong to him, but to the landlord. A tenant is effectively is helping the landlord to finance his housing mortgage. This does not mean investing in property is immoral or unethical. It is wise to invest, and that's a different issue.

With the way house prices are going up, and the way our salaries are not, and the rate of inflation today, those who do not have a property to their name, are not in an enviable position. They are being pressured on several fronts or more the negative effects of inflation on their earnings and savings, their continual need to rent and their continual depleting purchasing power.

In the story on public housing policies undertaken by China (see story below), the Chinese government is pressing developers to go into social housing because this basic social need can turn political. It can be used by ruling and opposition parties.

It is difficult to govern a country of 1.3 billion people. Although they are all Chinese, the Chinese population come from diverse minority groups with different religions, beliefs and communication. That is why the Chinese government uses putong hua or Mandarin, a single common language to unite the people. China looks at social issues very carefully.

Malaysia has a population of about 28 million. It must look at social issues like housing because we have a young and diverse population.

Although Malaysia has, and plan to, improve its social housing for the masses to include My First Home for first time house buyers, this scheme is only a part of the whole affordable housing scheme conundrum that is currently bedevilling this nation. There is also the low-cost housing scheme, which is also a segment of the affordable housing scheme plan. Low-cost housing schemes must also be improved as urban slum is another social problem.

There is a need for the Government to come right out with the logistics, location, pricing and its implementation to ensure the public that there is action behind the words. And to do it soon. Very soon.

While affordable housing is being planned and hopefully implemented real estate professionals are also calling for measures directed at the housing market in the form of reintroducing the real property gains tax on a sliding scale, requiring sellers to pay a stamp duty and not just the buyers and extending that 30% requirement to include the purchase of a second house, instead of the current ruling for the third and subsequent purchase. These measures, unlike the rising of interest rates, would directly affect housing and the speculative nature of this industry.

Assistant news editor Thean Lee Cheng thinks the Government should look at housing for the masses not only from a social stand point but as its duty, much like healthcare and education.

By The Star (by Thean Lee Cheng)

IGB allocates RM3bil for overseas assets

An artist’s impression of Mid Valley City. Tan says IGB has allocated RM500mil for the construction of the third and final phase of the development

KUALA LUMPUR: Property developer IGB Corp Bhd has allocated up to RM3bil for various assets acquisitions overseas this year, said managing director Robert C.M. Tan.

He said the acquisitions comprising mixed developments, including hotels in Europe and the United States, were in line with the company's expansion plan.

“We always look for deals and that's how we grow,” he told reporters after the company's AGM here yesterday.

Tan added the acquisitions would follow the company's successful move in acquiring and rebranding two hotels in New York last year.

Meanwhile, for the third phase of the Mid Valley City development, he said RM500mil was allocated for its construction, which was also the last phase of the commercial development. The construction was expected to commence within the next quarter and would take up to 30 months for completion, Tan said.

IGB is the developer of the Mid Valley City. On the possibility of moving Mid Valley City into the real estate investment trust (REIT), he said the company had no intention of doing so in the near-term.

By Bernama

Ensuring the success of affordable housing

News that affordable homes will soon be built through a partnership between the Government and private developers would certainly be welcomed by a growing number of Malaysians, particularly those struggling to buy their first house.

Details of the programme will be revealed in two months. One hopes that it would not only be implemented in the Klang Valley where the issue is most pressing, but also in other locations where home prices have risen beyond affordability levels.

Houses that fall under this category ought to be opened up to those in the middle income bracket as well (apart from the lower income group) while rules need to be in place to avoid them from becoming targets of excessive speculation.

The world over, there are various models of effective and successful affordable housing schemes that have worked for the benefit of the people. Closest to home is, of course, Singapore. With the mass rapid transit (MRT) project scheduled to start operations in 2017 in the Klang Valley, there is sufficient time for a partnership to identify the land suitable for affordable housing and to complete the project in parallel with the construction of the MRT.

But there needs to be one certainty - affordable houses must be built with quality in mind.

What the Government can do is to carve out a certain portion of land at identified areas for commercial purposes in the future;these pockets of land can be sold at market rates for commercial development and the money received could be used to cross-subsidise the residential component of the project.

The new dwellings should not be of low quality. If incomes are expected to rise in future, so will the demand for creature comforts. They would need the luxury of amenities provided by most of the apartments and condominiums in the Klang Valley, such as a swimming pool, gymnasium or even some tennis or badminton courts.

Maintaining such facilities should not be shirked and a monitoring agency should be set up oversee this matter.

The other thing the government should do ensure affordability in the greater housing market is to douse excessive speculation that has dramatically pushed up prices of homes.

A house is an asset class, not unlike equities. The difference is people can live without buying shares, but not if they can't afford a roof over their heads.

Therefore, more must be done to ensure the housing market reflects the fundamentals of actual demand and supply as close as possible.

One way may be to rein in certain liberties that foreigners currently enjoy in terms of buying houses.

Who hasn't heard of stories of tourists or foreigners in the country laden with bags of cash to buy houses or commercial properties at certain property launches?

These flexibilities largely benefit property developers and foreigners. Even so, they would be easier to accept if they didn't happen at the cost of Malaysians being able to afford homes. Of course, there are speculators among Malaysians as well. But where does it leave genuine house buyers?

There should also be a limit on the number of houses a person can own in the affordable segment and real property gains tax should be used to make flipping homes in the country less lucrative.

With Malaysians now able to buy just about any asset around the world as an investment, the freedom of making money will not be lost. They just have to look elsewhere to make a quick buck.

Deputy News Editor Jagdev Singh Sidhu wonders if it's a good idea to wear the new charcoal grey Liverpool away jersey during this current heatwave when he plays football this weekend.

By The Star (by Jagdev Singh Sidhu)

Hua Yang buys prime land in KL

KUALA LUMPUR: Hua Yang Bhd has acquired 1.55 acres of prime land in Desa Pandan Commercial Centre.

It plans to develop the land into a mixed serviced apartment and commercial centre with a gross development value of RM160mil.

“This is part of our strategy to expand our operations in the Klang Valley with our developments in Sungai Besi, Selayang and now, Kuala Lumpur City Centre,” said CEO Ho Wen Yan in a statement yesterday.

For developments in the Klang Valley, he said the company's strategy was to develop vertical communities in the form of high-rise apartments, complete with a retail space for the convenience of residents.

By Bernama

Prop Park buys land

HUA Yang Bhd’s wholly-owned unit Prop Park Sdn Bhd, has signed a conditional sale and purchase agreement with U Thant Square Sdn Bhd to buy leasehold land in Kuala Lumpur for RM32 million.

Hua Yang said it will build residential and commercial properties worth RM160 million on the land starting mid-2011.

It will be completed in three to four years.

By Business Times

IGB targets foreign acquisitions

Property developer IGB Corporation Bhd has allocated up to RM3 billion for various assets acquisitions overseas this year, said managing director, Robert C M Tan.

He said the acquisitions comprising mixed developments, including hotels in Europe and the United States, was in line with the company's expansion plan.

"We always look for deals and that's how we grow," he told reporters after the company's annual general meeting here today.

By Bernama

UOA gears up for IPO

KUALA LUMPUR: Soon-to-be listed property developer UOA Development Bhd signed a retail underwriting agreement with its underwriters, ahead of its initial public offering (IPO) on the Main Market of Bursa Malaysia next month.

The underwriters for the IPO were CIMB Investment Bank Bhd, RHB Investment Bank Bhd, OSK Investment Bank Bhd, HwangDBS Investment Bank Bhd and Hong Leong Investment Bank Bhd, it said in a statement.

UOA has received approval from the Securities Commission for the proposed listing of its entire enlarged issued and paid-up share capital of up to 1.2 billion 5 sen shares.

The IPO consists of an institutional offering of up to of 337 million shares to Malaysian and foreign institutional and selected investors (including bumiputra investors approved by the International Trade and Industry Ministry) and a retail offering of 70 million shares to the Malaysian public, eligible directors and employees of UOA Development, its subsidiaries and persons who have contributed to the success of UOA and its subsidiaries.

UOA Development through its subsidiaries and associated company is involved in property development, construction and property investment. Its development projects are in matured and prime locations, centralised within the Klang Valley.

As at Dec 31, 2010, UOA Development has a total saleable and lettable area of more than 300,000 sq m of properties under development with an estimated gross development value (GDV) of RM2bil to be completed over the next three years.

The company has a further total potential saleable and lettable area of more than 1.2 million sq m being held for future development projects with an estimated GDV in excess of RM8bil.

By The Star

Maju Assets to unveil RM4b Iskandar project

KUALA LUMPUR: Maju Assets Sdn Bhd, the property arm of Maju Holdings Sdn Bhd aims to launch a RM4 billion high-end project, primarily for the expatriate community in Iskandar Malaysia, Johor.

It is also planning a beach fronting expatriate village in Terengganu for RM200 million, its managing director Adam Radlan Adam Muhammad said.



For the 480-hectare project in Iskandar, it is in the planning stage and will be launched in two to three years, Radlan said.

Radlan said the the catalyst development will be a 18-hole golf course over 120ha.

He said what would make the development appealing are the specially-designed Spanish villas.

Radlan added that the pricing for the villas will start from US$300,000 (RM897,000).

"We are getting Emiliano Armani, a Spanish master planner to design the villas. He will oversee the master plan," Radlan said in an interview with Business Times recently.

The project, which has yet to be named and located in Ulu Tiram, will include semi-detached homes, link houses and a marina equestrian centre.

"The timing is right for this project. The government is pumping in money in Iskandar Malaysia and it has attracted foreign parties. Our immediate market will be Singaporeans," he said.

Three times the size of Singapore, Iskandar Malaysia spans 2,217 sq km and is a mixed use development planned for completion in 2025. The government is targeting investments of US$110 billion (RM329 billion).

For the project in Terenganu, Radlan said the company is targeting players in the oil and gas sector.

The gated community will have villas and serviced apartments, for long-term lease to foreigners.

Radlan said with the award of contracts by Petroliam Nasional Bhd, he expects more expats to live in Terengganu.

"We are talking to Esso, Talisman and Murphy Oil to lease the units when the project is ready," he said.

According to Radlan, this will be the first of its kind project in Malaysia.

The properties will feature modern living with a touch of traditional Malay architecture, preserving the heritage.

By Business Times

Hua Yang plans RM160m development

Hua Yang Bhd has acquired 1.55 acres of prime land in the Desa Pandan Commercial Centre, just opposite the Royal Selangor Golf Club (RSGC) here.

The company plans to develop the land as a mixed serviced apartment and commercial centre with an estimated RM160 million in gross development value.

"This is part of our overall group strategy to expand our operations in the Klang Valley with our developments in Sungai Besi, Selayang and now, Kuala Lumpur City Centre," said Hua Yang Chief Executive Officer Ho Wen Yan in a statement today.

For developments in the Klang Valley, he said the company’s strategy was to develop vertical communities in the form of high-rise apartments, complete with a retail space for the convenience of residents.

"We are looking at a modern lifestyle concept for the project with club facilities and amenities -- suitable for city dwellers who enjoy the sights and sounds of the city," he said.

By Bernama

Listing plan for Pavilion KL

Sources say that the assets under Pavilion Kuala Lumpur could be worth between RM4 billion and RM5 billion.

Kuala Lumpur: Datuk Desmond Lim Siew Choon is preparing to list Pavilion Kuala Lumpur, in what could be Malaysia's largest initial public offering of a real estate investment trust (REIT), sources said.

While details of the REIT are still sketchy, sources said that the assets under it could be worth between RM4 billion and RM5 billion.

Others, however, said the asset size may not be that large but its market capitalisation could be comparable to that of Sunway Real Estate Investment Trust (SunREIT).

SunREIT, listed last year, is the country's largest REIT with properties valued at about RM3.7 billion and a market capitalisation of RM2.98 billion as of yesterday.

Business Times understands that Pavilion KL's listing could happen as early as end-2011 and will include the retail portion of the mixed development.

It is also believed that CIMB Investment Bank, Credit Suisse and Maybank Investment will be involved in the deal.

Lim, who controls Malton Bhd, developed the mall via Malton's subsidiary Kuala Lumpur Pavilion Sdn Bhd.

The mall is owned by Urusharta Cemerlang Sdn Bhd, which is 51 per cent-owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by Qatar Investment Authority (QIA).

A search with the Companies Commission of Malaysia revealed that a company by the name of Pavilion Reit Management Sdn Bhd had been set up.

Lim and his wife Datin Tan Kewi Yong each hold a share in this company, which was registered on April 7 this year.

The nature of business of Pavilion Reit Management is described as "management of real estate investment trust, investment holding and property management".

Officials of Pavilion KL, when contacted, did not say anything.

Valuers contacted to indicate the Pavilion KL asset size said that it would depend on the method used. It could be on the lower end if the comparison method is used (market price per sq ft) and on the upper end if the investment return method is used (income stream generated per sq ft).

While it is certain that the retail portion of the building, which has a total net lettable area of 1.37 million sq ft, will form part of the REIT, it is unclear if the corporate office tower with a nett floor area of 185,000 sq ft will be included in it.

Pavilion KL, opened in 2007, is said to be profitable. It is enjoying a 98 per cent tenancy.

Talk is that Fahrenheit 88, the shopping centre opposite Pavilion KL and managed by Pavilion KL, may later be injected into the REIT. The mall is now 92 per cent occupied.

Fahrenheit 88 belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.

Last year, Urusharta Cemerlang (KL), owned by Tan Sri Zainol Mahmood and another individual, made history by paying RM7,209.80 per sq ft for the land in Jalan Bukit Bintang adjacent to Pavilion KL.

By Business Times

Rate hike unlikely to impact on property market

PETALING JAYA: The property market will not be impacted by the recent increase in the overnight policy rate (OPR), said property consultants.

Last Thursday, Bank Negara raised the overnight policy rate (OPR) by 25 basis points to 3% and increased the statutory reserve requirement (SRR) by one percentage point to 3%.

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said the slight increase meant that borrowing cost was still reasonable.


Tang Chee Meng

“With banks offering base lending rate (BLR) minus 2%, this means effective interest rates are still below 5%. However, property investors will look at the slight rate hike with caution,” Tang told StarBiz.

He pointed out that demand in the property market might be curbed slightly if the central bank raises the OPR by another 25-basis points before year-end.

“Property investors look closely at micro situations and factors such as location, possible further interest rate hikes in the short-term, rental yields and capital appreciation,” he said.

Zerin Properties chief executive officer Previndran Singhe said the recent rate hike was not significant.

KGV-Lambert Smith Hampton Sdn Bhd director Anthony Chua said the rate hike would not “put brakes” on the property market.

“It will not have a significant impact, although there may be some minor adjustment in buying sentiment,” said Chua.

CB Richard Ellis (CBRE) Malaysia managing director Allan Soo said the impact on property buying sentiment would be negligible.

“At this level, the property market is not interest sensitive,” Soo pointed out.

CBRE Malaysia executive director Paul Khong pointed out that property prices, especially in the Klang Valley, still soared despite a rate hike last July.

“Property buyers will continue to make decisions based on their repayment capability, and also factor in their expected rental yields in view of the rate hike,” said Khong.

By The Star

Bertam Alliance in property project

BERTAM Alliance Bhd wholly-owned UH Capital Sdn Bhd has sealed a joint development agreement with GJH Development Sdn Bhd to develop mixed properties worth more than RM400 million on 108ha in Johor.

In an announcement to Bursa Malaysia yesterday, Bertam said the project will be carried out over three to six years.

It will unlock the value of the land without having to fund the development cost of the project, the company added.

By Business Times

Timeframe extension for unit

PETALING JAYA: Ho Hup Construction Co Bhd's unit has extended the timeframe for the conditions precedent to the proposed disposal of its 3.32-acre freehold land in Bukit Jalil.

In a statement to Bursa Malaysia yesterday, it said that its 70%-owned subsidiary Bukit Jalil Development Sdn Bhd and Bayu Melati Sdn Bhd had mutually agreed to the timeframe extension to up to May 20.

Ho Hup gained its shareholders' approval for the land disposal for RM9.55mil cash to the unit of Melati Ehsan Holdings Bhd in February. The proposed disposal was part of the company's exercise to dispose of all non-core land bank.

By The Star

FDIs into Malaysia from Singapore to drop?

Foreign direct investments into Iskandar Malaysia and job opportunities for Malaysians could be affected by last week's Singapore general election outcome, says Provectus

Kuala Lumpur: The outcome of the recent general election in Singapore could spell the end of many Malaysians landing good-paying jobs there and worse, put a dent on foreign direct investments (FDIs) in top notch projects here such as Iskandar Malaysia, an industry observer said.

Provectus managing principal Sreedhara Naidu said the election, which saw the People's Action Party (PAP) lose 40 per cent of the votes, meant that Malaysia's dependence on Singapore's FDIs could also see a slight fall within the next three to four years as the island republic looks more inward in terms of investments.

He suggested that the government create more skilled jobs as Singapore immigration rules may be tightened, making it difficult for Malaysians to land jobs there.

"FDIs into Iskandar Malaysia and job opportunities for Malaysians, particularly in Johor, could be affected by last week's Singapore general election outcome as the Singapore cabinet addresses key election issues that lost them 40 per cent of popular votes.

"With only 60 per cent of voters happy with PAP, the leadership will pull out all stops to quickly remedy immigration, housing, urban poverty, health services and education issues.

"They may choose to tighten skilled and semi-skilled foreign worker intake, which will affect Malaysians' skill pool with Sijil Pelajaran Malaysia to diploma education that have traditionally looked to Singapore as an attractive destination (for employment)," Naidu said.

Iskandar Investment Bhd chief executive Datuk Syed Mohamed Syed Ibrahim, when contacted by Business Times yesterday, disagreed.

He said investments into Iskandar Malaysia would not be affected by the election outcome. He, however, did not elaborate.

Iskandar Regional Development Authority chief executive Ismail Ibrahim, meanwhile, reiterated that Singapore has been the top investor for Johor and Iskandar Malaysia.

"From 2006 to February 2011, Singapore registered a total investment of RM3.49 billion in manufacturing. For the services sector, until today, investments from Singapore was RM463 million in healthcare and education," he said.

Ismail added that the total cumulative committed investments into Iskandar Malaysia was RM73.24 billion from 2006 till the second quarter of this year. Of this, 59 per cent was domestic investment while the rest was foreign.

"So far, 40 per cent of the total committed investments has been spent on projects and developments. Investments came in from countries such as Australia, Singapore, Abu Dhabi, Kuwait, United States and India," he added.

Provectus is a performance transformation specialist which has advised Iskandar Malaysia, the Economic Planning Unit, the Prime Minister's Department on the Economic Transformation Programme, Government Transformation Programme, Sabah and Sarawak Bumiputera development and other programmes.

Elaborating on his views, Naidu said the Singapore government is expected to invest in new rail-based public transport, housing for locals, and more education and health facilities.

"Interestingly, these are the very same investments that Iskandar Malaysia is targeting to attract from Singapore businesses and government funds," he added.

Hence, he said, Iskandar Malaysia should now look at other countries such as China and India for investments in the future.

"It would be a paradox for Singapore to focus on external investments for commercial reasons when local social demands are not met. That would not be palatable for the population and the six new opposition parliamentarians will lose no time in pointing these out."

Naidu said Iskandar Malaysia aims to attract investments worth RM73.3 billion in the next five years, much of it from the Middle East, India, Singapore and China.

"But in reality, most it would come from Singapore businesses and government agencies.

"Relationship with Singapore, which has improved since Prime Minister Datuk Seri Najib Razak came to power, was supposed to facilitate faster and bigger investments from Singapore.

"But the (recent) general election changes everything and Iskandar Malaysia has to re-strategise.

"Even our Ministry of Human Resources will have to conduct an assessment on the potential impact as many young Malaysians may soon find it harder to land good-paying jobs in Singapore," he added.

By Business Times

Metroplex’s case on May 27

PETALING JAYA: Metroplex Holdings Sdn Bhd's suit against Sunway Real Estate Investment Trust (REIT) and seven other parties in relation to a building ownership dispute has been set for hearing at High Court Kuala Lumpur on May 27.

In a statement to Bursa Malaysia, Sunway REIT revealed that Metroplex was seeking, among other things, to nullify its purchase of Putra Place.

The plaintiff argued that Sunway REIT, being a trustee to unit holders and as a trustee could only take instruction from its beneficiaries through procedures in the Trust Deed dated May 20, 2010, the Capital Markets and Services Act 2007 and also the Guidelines on Real Estate Investment Trust issued by the Securities Commission on Aug 21, 2008. Hence, any action by Sunway REIT which breached the law was invalid.

Sunway REIT had bought Putra Place, a mixed-development comprising a shopping mall, hotel and office in Kuala Lumpur for RM513.95mil in a public auction earlier this year.

By The Star

SunCity to launch RM1b Ipoh project

SUNWAY City Bhd (SunCity) will launch a mixed use commercial project worth over RM1 billion at Sunway City Ipoh (SunCity Ipoh) in Perak, as one of the catalysts to recoup its investments in the township which started in 1995.

Managing director for property development Ho Hon Sang said the project, earmarked as a shopping village, will comprise a mall, retail, SOHO (small office/home office) and apartments.



"This project will revolutionise the shopping experience in Perak. We are banking on it," Ho told Business Times in an interview at Bandar Sunway, Selangor, recently.

Ho said new projects will include the development of 1,000 units of hillside bungalows, semi-detached homes and apartments, 16 units of lakeside bungalows worth over RM2.5 million each and a convention centre.

The properties are worth over RM300 million and will give good margins to SunCity when launched over the next few years, he said.

SunCity Ipoh, sprawled over 560 hectares, started with infrastructure development but was halted for five years because of the Asian financial crisis.

Work resumed in year 2000 and the first residential project comprising 452 units of semi-detached garden villas was launched in 2002.

As demand for high-end properties improved, SunCity launched bungalows, lakeside villas, cluster houses, and apartments.

The properties were slow to sell but sales picked up as the township grew. The prices had appreciated between 22 per cent and 66 per cent, Ho said.

"Now that the township is mature, we are launching new products, targeting the medium- to high-end segment to give us higher returns," he said.

Ho said SunCity will soon launch the second phase of MontBleu, which is the first gated and guarded community at the township.

MontBleu comprises 220 units of three-storey townhouses with selling prices from RM450,000 onwards. The units range from 1,680 sq ft to 3,336 sq ft with a 25ft backyard garden.

Ho is optimistic that the second phase will sell out, judging from the sales from phase one, which had 98 units and where 70 per cent of the units were sold within two months from its launch in December.

"Many foreigners are buying our properties as their retirement or holiday home under the Malaysia MySecond Home plan. We expect it to continue," Ho said.

By Business Times

HK group Cheung Kong wins bid for malls

Tycoon Li Ka-Shing's Cheung Kong Group is believed to have won a bid to buy the three TMW Asia Property Fund's shopping complexes put up for sale in Malaysia.

Business Times was informed that the party would pay less than the RM500 million asking price set earlier but above the RM400 million level.



Sources say that the due diligence process by the Hong Kong bidder had been completed and it was a just a matter of signing on the dotted lines.

It is understood that a sale and purchase agreement will be signed very soon.

International property consultant Rahim & Co was appointed as the exclusive agent to handle the tender.

Real estate agent, Rahim & Co's managing director Robert Ang, when contacted by Business Times (BT) to confirm the news, declined to comment.

Last month, BT reported that Cheung Kong Group had emerged as the front-runner for tender which closed on March 8 2011.

The German-based TMW had put the Klang Parade in Selangor, Ipoh Parade in Perak and Seremban Parade in Negri Sembilan on sale.

It acquired theassets in 2005 from the Lion Group for RM340 million.

TMW is managed by Pramerica, the real estate investment management business of Prudential Inc from the US.

However, it is unclear which company or fund under the Cheung Kong group is purchasing the assets.

Cheung Kong helps manage AmFirst REIT in Malaysia via its affiliate ARA.

ARA Asia Dragon Fund, another affiliate of Cheung Kong, bought two properties in Malaysia last year - One Mont' Kiara in Kuala Lumpur and Aeon Bandaraya Mall Melaka - for RM710 million.

According to previous reports, Seremban Parade has a nett lettable area of 316,847 sq ft and sits on 1.97ha, Ipoh Parade has a nett lettable area of 594,414 sq ft on 4.14ha and Klang Parade has 696,045 sq ft of space.

By Business Times

Country View sees success in Nusa Sentral

JOHOR BARU: Country View Bhd is optimistic that the company's on-going property project, Nusa Sentral, will do well due to its strategic location.

Marketing manager Andrew Tan said prospective buyers would be attracted to the housing scheme's location within the development of Nusajaya in Iskandar Malaysia.

He said Nusajaya, which was also easily accessible from Singapore via the second link crossing, was another factor that would attract buyers.

“Most of our buyers for phase one are Malaysians working in Singapore who commute daily to the republic using the crossing,'' Tan told StarBiz.

He said other buyers were upgraders from nearby areas such as Gelang Patah, Ulu Choh, Pontian, Pekan Nenas and Skudai.

He said all non-bumiputra lots for the phase one comprising 312 units of five-room double-storey link houses with built-up areas ranging from 2,100 sq ft to 2,300 sq ft and priced from RM338,000 had been sold out.

Tan said Nusajaya was progressing well and completed and soon-to-be completed major projects would add value to the properties within the development zone.

Two major projects in Nusajaya Kota Iskandar, Johor Sate New Administrative Centre, and Puteri Harbour Waterfront development are already completed.

Other projects slated for completion within the next one to three years include the Newcastle University Medical Campus, Marlborough College, Netherlands Maritime Institute of Technology and Legoland Theme Park.

Nusajaya, spanning 9,600ha, is one of the five flagship development zones in Iskandar Malaysia. The other four are the Johor Baru City Centre, Eastern Gate Development, Western Gate Development and Senai-Kulai.

“Accessibility to the area will improve when the RM1bil New Coastal Highway linking Nusajaya and Johor Baru city centre is completed by the end of the year,'' he said.

Tan said Country View would be launching 217 units of double-storey link houses for phase two with indicative pricing of between RM358,000 and RM418,000 and three-storey shop offices this year.

Nusa Sentral is located along Jalan Gelang Patah-Lima Kedai on a 121.40ha site and the project will keep the company busy for eight years.

Separately, he said seven out of 12 bungalow units priced between RM3.8mil and RM4.6mil each, at Jalan Straits View facing the Straits of Johor, were already sold. “The buyers are foreigners based in Singapore and also those who have businesses all over the world and have chosen Johor Baru as their second home.''

For the financial year ended Nov 30, 2010 (FY10), Country View recorded a net loss of RM8.19mil on revenue of RM23.25mil compared with a net loss of RM3.74mil on revenue of RM51.49mil FY09.

By The Star

Rate hike to have little impact on property market

KUALA LUMPUR: Bank Negara Malaysia’s (BNM) recent hike in interest rates may do little to dampen the property market as demand is expected to continue amid rising inflation.

Analysts said demand for property was expected to continue growing as the trend of rising rates was merely a normalisation process as previous lending rates were “too low”. Additionally, there was still plenty of liquidity in the market.

“The rate hike was expected, and there is generally still a lot of liquidity in the market. And the demographic is such that there is still a lot of demand for property.

“Property is a big hedge against inflation so people are still looking at it. The rate hike would not have a significant impact on the property market,” an analyst told The Edge Financial Daily.

Given the rising fear and the uncertainty about inflation, the analyst said interest in the property market was not about to wane anytime soon.

BNM raised the overnight policy rate (OPR) by 25 basis points (bps) to 3% on concerns of inflation. The increase in the OPR will result in an increase in the country’s base lending rate (BLR) which could negatively affect domestic spending and the property market.

The central bank also increased the statutory reserve requirement (SRR) ratio by 100bps to 3%.

In a recent report, CIMB Research noted that loan applications for residential property showed a strong rebound in March with a 74.1% increase from the previous month. The research house said the rebound could have been driven by borrowers who rushed to lock in low interest rates in anticipation of higher borrowing costs in the near term.

Property prices have been on a steep uptrend in the last two years. CIMB said house prices in Malaysia rose last year at an average gain of 6.7%, the strongest in the past 13 years, including the mid-1990s property boom. The Klang Valley alone enjoyed a strong rebound from the contraction in 2009, with Kuala Lumpur recording the steepest appreciation of 12.2%.

However, the analyst noted that the increase in property prices had moderated.

“While property prices are not going down, the increase is slowing down or stabilising. Still, it may be a bit too soon to say property prices are cooling,” he said.

Industry observers noted that property prices in Southeast and North Asia, especially in heavily ethnic Chinese populated areas, had generally been resilient.

Apart from blips caused by financial crises, prices rarely pulled back due to strong demand because culturally, properties are viewed as good investments or a hedge against inflation, the observers noted.

CIMB noted that the 33% jump in property transaction value in 2010 came as a surprise as it expected the rebound to be 10% to 15%.

“For the overall market, we expect transaction value growth to slow down to around 15% to 20% as historically, growth has never sustained at 30% for more than a year and the base of comparison is also much larger,” CIMB said in its report.

Escalating property prices have been a much talked-about topic of late as the rapid inflation in asset prices has made it difficult for young adults to own houses.

CIMB said the affordability index for residential properties in general slipped slightly last year.

Additionally, Malaysia’s household debt was growing making home ownership difficult.

BNM’s Financial Stability and Payment Systems Report 2010 showed that an average Malaysian household’s debt service ratio (the ratio of the debt payments to disposable income) was at 47.8% last year.

This implied that nearly half of Malaysian households’ disposable income went towards repaying debt, a ratio which suggests that either household debt is too high, or incomes are too low.

The government is embarking on means to make housing more affordable. It was reported that it was in the initial stages of establishing a national public housing authority similar to the one in Singapore that would build affordable, quality homes.

In the longer term, some quarters expected more supply to come onstream in the near future, which could ease property prices.

Some expect to see a correction in prices later this year or early next year, as interest rates continue to rise and governments around the region take more steps to cool property demand.

An industry observer also noted that a number of properties sold with minimum upfront and deferred payment schemes would also be completed within the next year.

By The EDGE Malaysia

Bertam unit in venture to develop land

UH Capital Sdn Bhd, a wholly owned subsidiary of Bertam Alliance Bhd, has entered into an agreement with GJH Development Sdn Bhd to jointly develop a land located in Ledang, Negeri Sembilan.

In a filing to Bursa Malaysia today, Bertam said the 109-hectare piece of land is expected to have mixed development including residential and commercial shop lots or other such development approved by the relevant authorities and landowner.

The last recorded market value of the land was RM48 million.
UH said the name and type of project, number of units in respect of each type of development of the proposed joint development have yet to be confirmed.

"We expect to commence construction after getting approvals from the relevant authorities and the whole development is expected to be completed within six years from the signing of the agreement," it added.

The deal with GJH will allow Bertam, through UH Capital, to unlock the value of the land without having to fund the development cost of the project.

"There would be general cost saving arising from the interest savings from bridging loans, which would have been required if UH Capital were to develop the land on their own," it said.

By Bernama

Bertam Alliance inks deal for RM400m mixed development project

KUALA LUMPUR: BERTAM ALLIANCE BHD’s unit has inked a joint development agreement for a mixed development project of residential and commercial shoplots in Johor with a gross development value (GDV) estimated at no less than RM400 million.

In a statement Monday, May 9, Bertam said its wholly owned unit UH Capital Sdn Bhd had entered into an agreement with GJH Development Sdn Bhd for the joint development of 270 acres of land at Mukim Seroh in the district of Ledang in Johor.

UH Capital owns the land, and GJH is the developer.

Bertam said the land would be developed in two phases and the planned joint development was expected to commence upon receiving approval from the relevant authorities, with completion expected within six years.

It said all the costs and expenses to be incurred in relation to the proposed joint development would be borne and paid by the developer.

Bertam said that under the agreement, the developer guaranteed that the GDV for the two phases shall be not less than RM200 million each, and that the landowner’s entitlement would be no less than RM40 million for each phase.

On the rationale for the agreement, Bertam said the proposed joint development would allow it, through UH Capital, to unlock the value of the land without having to fund the development cost of the project.

“Furthermore, there will be general cost savings arising from the interest savings from bridging loans, which would have been required if UH Capital were to develop the lands on their own,” it said.

As for the funding of the project, Bertam said UH Capital was not required to finance the development and that GJH shall be solely responsible to meet and defray the development costs in the implementation of the project.

By The EDGE Malaysia

RM50m facelift for Hilton PJ

PETALING JAYA: Hilton Petaling Jaya will undergo its first major renovation in more than a decade, beginning this month.

The makeover, which will involve all its guest rooms, meeting rooms and the ballroom, is expected to involve some RM50 million.

General manager Chris Ehmann said that the renovation will be done in stages and it is expected to be completed in August 2012.

Hilton, which has been managing the property for the past 27 years, has been signed on to manage the hotel until December 31 2025. The hotel is owned by Tradewinds Corp Bhd.

"We will start with six floors on May 9," Ehmann told Business Times in an interview recently.

The hotel has 553 rooms, 17 meeting rooms and a ballroom that can accommodate 600 people.

"The investment will involve all infrastructure such as hot water, new televisions, telephone lines and the back of house," he said.

Ehmann said that its most recent makeover was in 2005/2006 which involved all its food and beverage outlets, main lobby and the public area.

Once completed, Ehmann expects both occupancy and average room rates to increase in line with its new product offerings.

"We pride ourselves on our service and we are excited about the products that will match our service," he said.

When asked about the surrounding competition, he said "It is the people who make the difference."

About 75 per cent of its guests are business guests as the hotel is focused on corporate travellers.

The hotel is essentially divided into three parts: the Main Block (10 storeys), the East Wing and the West Wing, each with 21 storeys.

The hotel, which started as Jaya Puri, came under the Hilton management in 1982. It closed for two years, underwent a RM40 million renovation, added a tower and reopened as Petaling Jaya Hilton.

In 1992, another tower block was added at a cost of RM75 million. Later, the hotel was renamed Hilton Petaling Jaya.

Ehmann said that Petaling Jaya residents will be particularly happy with the refurbished product as it is an iconic building in the area and most people have fond memories of the place. "We are putting Hilton Petaling Jaya back to her glory days," he said.

By Business Times

AmFIRST REIT posts lower profit of RM45m

AmFIRST Real Estate Investment Trust recorded a lower pre-tax profit of RM45.362 million for the financial year ended March 31, 2011, compared with RM54.057 million recorded last year.

In a filing to Bursa Malaysia, the company said revenue decreased to RM88.539 million, for the period under review, from RM98.188 million registered previously.

Meanwhile, Am ARA REIT Managers Sdn Bhd, the manager for AmFIRST, declared a final income distribution per unit of 4.94 sen for the six-months ended March 31, 2011.

Taking into account the interim distribution payout of 4.81 sen, the total dividend was maintained at 9.75 sen, similar to the previous year.

By Bernama