Tower of sustainability

An artist’s impression of Menara Binjai.

When the idea was conceptualised to develop a 35-storey grade-A office building along Jalan Binjai in Kuala Lumpur, the plan was to construct a “tower of sustainability” rather than a mere “structure with windows”.

“We wanted to build something that was tall, striking and beautiful with lots of glass, not a building with small windows,” says Khor Joo Saik Sdn Bhd director Jackie Chua.

The office tower that the company is building is Menara Binjai, which is scheduled for completion by the fourth quarter of this year.

Fellow company director Chua Guan Hock says a lot of thought has gone into making it “as green as possible”.

“Going green was not an afterthought. It was planned from the beginning. By doing this (going green), we felt that we would be able to improve the quality of the working environment for potential tenants.

“Construction began in 2008 but it has been on the drawing board since 2004,” he says.

According to Guan Hock, Menara Binjai complies with strict environmental regulations that comprise reducing the impact of its construction on the surrounding area and adopting a low carbon footprint approach.

Key green features of the building include low-E double-glazed windows for optimum heat and sound insulation, energy-saving air conditioning (which uses a centralised water-chilled air conditioning system), destination-based lifts (which allows customised floor selection to minimise waiting and stopping times, with drive motors that enable up to 30% savings in electricity consumption) and energy-saving lighting.

Guan Hock adds that incorporating green features into the building allows the company to be more “disciplined”. “It made us more aware on the impact that we had on the environment, so this made us (more conscious) in saving water and reduce unnecessary wastage of raw materials used.”

According to the company's brochure, the host of green features at Menara Binjai permits sustainable, energy-efficient operation with up to 25% savings on electricity and air-conditioning consumption.


From left: Khor Joo Saik project manager David Hong, Jackie Chua and Chua Guan Hock.

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

Multimedia Super Corridor-status accreditation for Menara Binjai is pending, according to Guan Hock.

The building, which has a gross development value of RM180mil, will be targeted mainly at tenants in the oil and gas, financial, services and trading sectors.

Strategically located at the junctions of Jalan Binjai, Jalan Tun Razak and Jalan Ampang, Menara Binjai will comprise four levels of basement parking and another four levels of podium parking.

The office floors, which have a net lettable area of 12,000 to 13,000 sq ft, start from level six. Project manager David Hong says the company has also invested in a centrally-located data centre on the fifth floor of the building.

“Instead of having our tenants set up their own server rooms, we felt that it made business sense to have them park their facilities in one common data centre,” he says.

Menara Binjai today stands on the site where the family home of the late physician Dr Chua Boon Teck used to be. Boon Teck's father was Chua Cheng Tuan, one of the co-founders of Cycle & Carriage Co, now known as Cycle & Carriage Bintang Bhd.


The old Chua family home used to sit where Menara Binjai now stands.

Boon Teck's wife, the late madam Khor Joo Saik (whom the company is named after), was said to be a formidable nyonya businesswoman who acquired substantial plantation and property plots for the Chua family, including heritage sites where the Coliseum Cinema and Coliseum Cafe are located.

Guan Hock and Jackie, who are descendants of the Chua family, says they have no plans to sell Menara Binjai.

“We don't intend to sell the building. It's for the long term,” says Jackie, adding that since they own the land, they are able to provide a competitive rate of RM7.50 per sq ft for their would-be tenants.

“The land is a legacy of the family,” she says.

By The Star

Housing for average income earner

REAL estate industry players are asking the authorities to step in to control the spike in housing. International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang says it is time the authorities look into the matter.

“Home prices have gone up so much that it has reached a ceiling to the point that high-end housing developers must give a 20% rebate in the condominium segment or there will be no sales,” says Yeow.

House prices have gone up many times beyond the average household income.


Yeow...‘We are in a situation where people are using the property market to gamble.’

Yeow says the scenario of low-occupancy and falling prices can be found in KL City Centre and Mont'Kiara. “Overall, developers need to slow down,” he says, adding that KL Sentral is another area where office and retail properties are undergoing continuous development.

Yeow says the Housing and Local Government Ministry and the relevant authorities can play a greater role in controlling prices. They can do this by studying the needs of the market the take-up rate, the number of people entering the Klang Valley to seek employment, the number of expatriate entering or leaving the country, and which type of housing is facing a shortage.

“They can approve or not approve applications by developers. For example, there are too many condominiums in the KLCC area which cost millions of ringgit,” says Yeow.

He says expatriates are the ones who mainly occupy these units. Many who bought into that location are local and foreign investors who expect a certain yield. When they do not get the yield they want, they may decide to sell it instead of holding on. When this happens, there is always the possibility of prices coming down.

In London, Hong Kong, Singapore, China and Australia, the authorities will study the housing needs of cities. “We must do the same,” says Yeow. Currently, this is being done on a five-yearly basis, which is far from the ideal, says Fiabci Asia-Pacific executive director Yu Kee Su.

The people need medium-range housing priced around RM300,000, says Yeow.

Khong & Jaafar managing director Elvin Fernandez says some form of measures targeted at the property sector should be put in place.

“It would be difficult for the authorities to know when to apply the brakes and when to lift the foot off the pedal if we are to use demand and supply to control prices. A better measure would be to bring back the real property gains tax on a graduated level to help curb speculation.

“A second measure would be to extend the 30% downpayment requirement for second property instead of the third and subsequent residential purchase,” says Fernandez.

Last November, Bank Negara required buyers of third and subsequent residential properties to pay a minimum downpayment of up to 30% while the remaining 70% constitutes a loan. Analysts say this is just a temporary setback.

Fernandez also suggests doing away with mortgage brokers.

“Banks want to increase their share of property loans and engage mortgage brokers, who are not bank staff. These brokers' interests are not aligned with the long-term interest of the banks. They only want their commission.

“The services of mortgage brokers is something that came out of the United States. Are these mortgage brokers doing a service or a disservice to our banking system and to the house buyers?”

Yeow reiterated the need for housing to be priced in the medium range of about RM300,000 because this is what the average wage earner can afford even in the Klang Valley.



However, he notes that it is difficult to find houses with this price in the Klang Valley or Penang and this is worrying. Yeow says that the most pressing issue now is escalating prices and the question of affordability among the ordinary wage earners.


His concerns are very real. House prices have moved far ahead of wages. Yeow says the average monthly household income is about RM7,500 while Fernandez puts it at close to RM6,000. He is quoting a private survey done for the Klang Valley this year.

RAM Holdings Bhd economist Jason Fong says that at the national level, the average monthly household income in 2009 was RM4,025. Putrajaya has the highest monthly average wage of RM6,747 while Kelantan has the lowest at RM2,536.

On a sectoral basis, Fong says the average wage for manufacturing sector (March 2011) is RM2,240 while for wholesale and retail (fourth quarter 2010) is RM2,219 and for rubber plantation (March 2011) is RM826.

Kuala Lumpur has the highest average transacted property price at RM488,536 last year, says Fong. This is the least affordable relative to income levels in Malaysia in 2009.

In the east coast, the lowest transacted price in Terengganu was RM74,063 while in Kelantan was RM82,337 both were relatively affordable.

Fernandez says there is a need to look at housing from the perspective of the ordinary wage earner with an average income of about RM6,000 or less because of the relatively low wages in the country. “We cannot look at housing from the perspective of those earning RM15,000 or more a month. In 2008, only 1.7% of the entire population drew a monthly income exceeding RM15,000, and only 5.2% earned more than RM10,000.

“In the Klang Valley, only about 3% earn more than RM15,000. This means there are not many rich people in Malaysia,” says Fernandez.

He points out two fundamental factors that drive house prices household income and rental returns.

House prices, as against annual household income, is normally calculated at three to four times. For example, if a household monthly income is about RM6,000, which is what the average Malaysian household earns, at four times, the price of the house should be about RM300,000 (6,000 x 12 = 72,000 x 4 = 288,000).

In the Klang Valley, this has gone up to 15 to 20 times. In places like Kajang, house prices against annual household income is about four times. “Such areas are relatively untouched by the rapidly rising prices in other parts of the Klang Valley. Their yield is, therefore, higher, at 3%.”

While housing prices have gone up, rental has not.

A double-storey house in Petaling Jaya was priced at about RM500,000 about two years ago while rental was between RM1,500 and RM1,700.

Today, that same house is priced at about RM800,000 but the rental is only RM1,800 to RM2,000. So although house prices have gone up, rental rates do not reflect that rise.

Condominiums used to have yields of about 8% while landed housing about 4%. Both have fallen to about 4% and 2% respectively today.

RAM Rating Services Bhd head of real estate and construction ratings Shahina Azura Halip says the affordability issue is expected to persist as prices of residential properties, especially landed units, are likely to increase this year but at a much slower pace than last year.

This is fuelled by the keen demand, higher land prices and construction costs, as well as the scarcity of landed properties in prime locations.

“Bank Negara's 70% cap on the loan-to-value ratio for buyers' third residential property mortgages will deter speculation to some extent particularly in the high-end segment although the impact is not expected to be as significant in the long run, given the strong fundamentals supporting demand for homes,” she says.

Meanwhile, Shahina says, the Government's recent announcement on the My First Home Scheme, which will enable those earning less than RM3,000 per month to obtain 100% financing for the purchase of their first house costing RM100,000 to RM220,000, is a positive move for the market.

“The main consideration, however, is the availability of either landed or strata-titled units in this price range, especially in Kuala Lumpur, Selangor, Penang and Johor,” she says.

Both Yeow and Fernandez are of the view that, at the rate house prices are moving now, those who have not bought their houses will not be able to afford one because salaries are not growing in tandem with inflationary pressures.

Says Yeow: “We are in a situation where people are using the property market to gamble.

“It is purely to flip. This is bad because it will only drive prices higher. This deprives the average wage earner of buying his own house.

“The Government is trying to stem the bubble with various measures,” Yeow adds.

By The Star

Sharp property price hike puts a damper on affordability

The fact that the average salaried workers are ready to buy into properties many times their annual income is food for thought.

LONG-TERM sustainable house prices ought to be determined by two key fundamentals household income and rental returns. The relationship between household average annual income and property prices is an important one as it measures affordability levels.

If the average annual household income in the Klang Valley is RM72,000, this means the family can afford a house that is three to four times the annual income; that is, a property priced between RM216,000 and RM288,000.

This is just a rough guide. If commitments are high in other areas, they may not be able afford a property priced within this range.

For a long while in Malaysia, this number hovered between three and four times. In the United States, it was about eight times in many of the overpriced cities just before the financial crisis hit the property market.

Last year, certain parts within Petaling Jaya began to inch up to five and six times. This means households had to fork out more in order to buy properties priced between RM360,000 and RM432,000.

At that time, the property consultant who did the study said that at five to six times, this was still managebale and was not a cause for concern.

About two months ago, another study was done by the same consultant. This time, more areas within the Klang Valley were included. It was during the course of this study when it was found that within the Klang Valley itself, the prices of certain locations have gone up far ahead of others. This is not something new, all of us know that. But what is startling is that property prices that used to be five to six times a household's annual average income has gone up to 11 times about two months ago.

While Kajang continues to have a household income/property price ratio of 4 times, in other parts of the Klang Valley, this has gone up to as high as between 17 and 20 times in some areas. There is a caveat: all of this is viewing house prices from an average household income of RM6,000 a month or RM72,000 a year.

As with the use of any statistics, there is always a margin of error. The prices of properties are for all to see in the classifieds. The question is: What is the average income in the Klang Valley?

The company which did the study used RM6,000 as an average monthly income in the Klang Valley. Another property-related professional said it is about RM7,500 a month, while an economist says it is slightly more than RM4,000. The figure varies even more for different states (see table Monthly average household income by state on page 24).

The fact that we, the average salaried workers, are ready to buy into properties that are many times our annual income is food for thought and cause for concern.

The other fundamental governing house prices is rental returns. In most of the areas that were included in this analysis between house prices and household income and rental returns, the trend is clear over the last 10 years, the returns are dropping.

In many of the areas where prices have increased, the rental returns of the typical terrace house have dropped below 3% net. In some areas, it is about 2% net.

With the situation the way it is today, real estate professionals are calling for the authorities to put in place greater measures.

In China and Singapore, various measures have been put in place to cool prices the past year or so. Since last year, the Chinese government has introduced a series of policy measures to cool the market. This includes raising interest rates, raising down-payment requirements, directly restricting home purchases, imposing price control targets in Beijing and Shanghai and finally charging a real estate tax, albeit on a trial basis, in Shanghai. Nevertheless, prices remain stubbornly high.

Early this year, the Singapore government required those who buy, and sell, residential properties within four years to pay a stamp duty, up from the previous requirement of three years. Other measures include making it mandatory for individual buyers, who are still servicing an existing loan, to borrow only up to 60 % of the new property's value, down from 70% previously. For corporate investors, the loan-to-value limit has been cut to 50%.

What is emerging today is Chinese developers and owners of malls are now offering investors their assets. According to a fund which is on an acquisition trail in Asia, the company is looking at commercial properties at a “flow rate” of one property a day, which, according to the source, is very high.

These developers and owners essentially want to make their exit. In the commercial segment in Malaysia, developers here are also beating a path to the same fund to sell their assets. Thankfully, not at a flow rate of one per day.

Assistant news editor Thean Lee Cheng is wondering what it takes to douse this madness.

By The Star (by Thean Lee Cheng)

Dijaya plans RM3.5bil projects

PETALING JAYA: Dijaya Corp Bhd will launch property projects worth RM3.5bil over the next two years.

The projects include W Hotel and Residences Kuala Lumpur, serviced apartments in Tropicana Danga Bay, Tropicana Gardens commercial centre, Tropicana Avenue business and retail centre, Tropicana Bayou mixed development and Tropicana Cheras bungalows, semi-dees and linked houses.

“With all these projects in the pipeline, the company is poised for growth,” said managing director Datuk Tong Kien Onn in a statement yesterday.

Meanwhile, for its first quarter ended March 31, Dijaya's net profit surged to RM18.14mil from RM464,000 previously.

The improvement is attributable mainly to higher profit margin contributed by its new property launches such as Tropicana Grande condominiums, Casa Tropicana Block E condominiums, and Pool Villas.

However, revenue fell to RM57.68mil from RM58.37mil previously.

By The Star

OSK Property receives takeover offer

PETALING JAYA: OSK Property Holdings Bhd executive director Ong Leong Huat and Land Management Sdn Bhd have offered to buy up the remaining OSK Property shares they do not own for RM119.56mil.

In a filing with Bursa Malaysia yesterday, the company said both Ong and Land Management collectively owned 49.96 million shares of RM1 in OSK Property, representing a 26.66% stake, and was looking to buy up the remaining 137.42 shares in the company for 87 sen per share.

They are also looking to buy 47.81 million warrants not owned by them for some 6 sen per warrant.

Ong is also a substantial shareholder and director of OSK Investment Bank and OSK Holdings Bhd as well as a director of Bursa Malaysia.

The shareholders of Land Management Khor Chai Moi, Ong Yin Suen, Ong Yee Ching, Ong Ju Yan, Ong Yee Min and Ong Ju Xing also held direct stakes in OSK Property amounting to 5.43%. Yin Suen, Yee Ching and Ju Xing are also directors of Land Management.

OSK Property's share price gained 7.5 sen within the day to end at 87 sen yesterday on news of the proposed takeover. Based on Thursday's closing of 79.5 sen, the offer price provides a 9% premium but that premium was wiped out yesterday when the company saw its share price end at the offer price of 87 sen.

For the financial year ended Dec 31, 2010 (FY10), the company posted a revenue of RM144.9mil against RM125.8mil a year ago. Net profit for FY10 was RM11.9mil against RM5.1mil in FY09.

As at the end of FY10, OSK Property's cash and cash equivalents stood at RM53.2mil.

The company currently trades at 11.25 times price/earnings ratio and has a market capitalisation of RM163.02mil.

Properties under the group's stable include luxury homes, townships and The Atria Shopping Complex in Damansara Jaya.

Proposed privatisation of smaller property companies seems to be picking up steam following an announcement earlier this year that Low Chuan Holdings Sdn Bhd, owned by the founding family of the Low Yat Group, was looking to privatise Asia Pacific Land Bhd.

The Low Yat Group had offered 45 sen per AP Land share, pricing the stock at 0.43 times its book value of RM1.05.

By The Star

Genting plans to build ‘Resorts World’ in Florida

PETALING JAYA: Genting Malaysia Bhd plans to build “Resorts World Miami” in Florida after buying a 13.9-acre land for some US$236mil from a US newspaper publisher, The McClatchy Co.

The company told Bursa Malaysia yesterday that its subsidiary, Bayfront 2011 Property LLC purchased the land, which includes a building currently housing The Miami Herald Media Co and an adjacent parking lot, with plans of building a mixed-use development.

Genting Malaysia said it was working towards developing a comprehensive master plan for the project called “Resorts World Miami”, which will include hotel, convention, entertainment, restaurant, retail, residential and commercial facilities.

The project aims to capitalise on Miami’s standing as one of the world’s leading tourism hubs.

“The acquisition involves large prime freehold waterfront properties facing the scenic Biscayne Bay. Located in downtown Miami, the properties are close to commercial, residential and shopping areas and are bordered by an extensive road network linking to Miami International Airport and South Beach, one of the world’s top beach destinations,” the company said.

The land is located directly across the street from the Adrienne Arsht Center for the Performing Arts of Miami-Dade County, which is among America’s largest performing arts centres. Miami’s new Museum Park development, the future home of Miami Art Museum and Miami Science Museum, is located immediately to the south.

Genting Malaysia is looking to fund the purchase through bank borrowings and internally-generated funds. It said that bank borrowings of US$200mil to partly fund the purchase, Genting Malaysia’s consolidated gearing ratio of 8.3% as at Dec 31 will increase to 12.4%, on a proforma basis.

“Resorts World Miami will be a landmark mixed-use development for Miami, Florida and the United States,” Genting Malaysia chairman and chief executive Tan Sri Lim Kok Thay said.

“Downtown Miami has experienced dramatic residential and commercial growth in recent years, and we believe the addition of a large-scale mixed-use and entertainment complex will be a welcomed addition, further elevating the area’s status as a global destination.”

Genting Malaysia said it was seeking to expand internationally in the leisure, hospitality and entertainment industry. The envisioned Resorts World Miami represents Genting Malaysia’s second venture in the US, after Resorts World New York at the historic Aqueduct Racetrack in the City of New York.

The seller of the land is the third-largest newspaper publisher in the US and is listed on the New York Stock Exchange. It is also the parent company of Miami Herald.

An analyst said based on the little information provided from the announcement said he was netural on the deal.

“It seems cheap, considering that they are buying at a property down cycle in the US and that this is prime property.”

However, he added, that it is not clear if Genting would be issued with a gaming licence. “If a casino is in the plans, then the move is a good one, considering that Miami is a top tourist site. But let’s see the details.”

By The Star

Tanco to resume property projects after settling debt

PUCHONG: Resort operator and developer Tanco Holdings Bhd plans to proceed with some of its property projects once it has paid its RM144.58mil debt to Lehman Brothers Commercial Corp Asia Ltd by the third quarter of 2012.

At an EGM on Tuesday, Tanco shareholders approved the ordinary resolution in relation to the proposed settlement scheme to Lehman Brothers.

Tanco group managing director Datuk Tan Jing Nam said the company's land was now locked up in the lengthy litigation process.


Tan says the company ’s land is now locked up in the litigation process.

The land bank includes 430 acres in Palm Springs Resort City, Port Dickson, and 170 acres in Duta Lakes, Lake Kenyir, Terengganu.

“From the waiver of the remaining secured debts pursuant to the settlement scheme, Tanco will have net exceptional gain of some RM118mil that will improve the company's net tangible assets by 35 sen per share,” Tan told StarBiz.

Group executive director Datuk Lynne Tan said there would also be a significant drop in the company's net gearing ratio to 0.09 from 1.83 now.

Tanco had, on Feb 21, reached an agreement with Lehman Brothers for the settlement sum of RM144.58mil which would involve RM44mil cash as well as the transfer and vesting of certain properties at an agreed value of RM100.58mil.

According to Tanco's circular to shareholders, these properties include parcels of land, houses and shophouses in Rawang and Seremban as well as a parcel of beachfront vacant resort development land in Port Dickson.

Tanco and its affected subsidiaries have signed a settlement agreement with Lehman Brothers Commercial, Lehman Brothers Pan Asian Investments Ltd and Malaysian Trustees Bhd to formalise the settlement scheme.

The settlement sum of RM144.58mil was arrived at on a negotiated basis.

Lynne said the cash settlement sum would be paid in five instalments over 12 months from the date of “consent judgment”.

The cash settlement sum would be funded through internal funds and bank borrowings.

“There is also the possibility for the cash settlement sum to be settled earlier,” she added.

Lehman provided a two-year loan facility of about RM239.6mil in November 2007 to repay Tanco's debt obligations which saw Tanco coming out of PN17 classification on Jan 17, 2008 after completing its debt restructuring exercise.

By The Star

Dijaya Corp to launch projects with GDV RM3.5b

KUALA LUMPUR: DIJAYA CORPORATION BHD reported net profit of RM18.54 million in the first quarter and announced projects with gross development value (GDV) of RM3.5 billion over the next two years.

It said on Friday, May 27, that its earnings jumped 489% from RM3.15 million a year ago, boosted by higher profit margin contributed by its new property development launches.

The earnings were underpinned by the new launches including Tropicana Grande golf-fronted condominiums and Casa Tropicana final Block E condominiums at Tropicana Golf & Country Resort as well as Pool Villas at Tropicana Indah Resort Homes.

Dijaya added the 3Q earnings included net gain of fair value adjustment of RM5.16 million arising from marketable securities and recognition of RM4 million in liquidated and ascertained damages compensated from a contractor.

Its managing director Datuk Tong Kien Onn said that given the current set of results and the good location of the company’s current development, he was optimistic Dijaya would continue to post an improving set of results.

“The Company also has projects under planning to be launched over the next two years worth RM3.5 billion in GDV.

“These projects include W Hotel and Residences Kuala Lumpur, serviced apartments in Tropicana Danga Bay, Tropicana Gardens commercial centre, Tropicana Avenue business and retail centre, Tropicana Bayou mixed development and Tropicana Cheras bungalows, semi-dees and linked houses. With all these projects on the pipeline, the Company is poised for growth.”

By The EDGE Malaysia

China, Malaysia to develop industrial park

China is looking to incorporate a joint venture company with Malaysian developers to undertake the construction of the Qinzhou Industrial Park (QIP), said Deputy Director Qinzhou Municipal Commerce Bureau Xiao Xiao.

She said the joint venture company would cooperate in land acquisition, infrastructure construction and investment promotion.

"We chose Malaysia as our JV partner as it our biggest trading partner in the China-Asean Free Trade Agreement with bilateral trade having grown eight times since 2000.

"Qinzhou offers easy access via multiple options, including direct sea route, Pan-Asia railway and the highway network," she told Bernama in an interview today.

She said the QIP was planned to focus on equipment manufacturing, electronic information, new energy and materials, agriculture products, food processing and modern services industries.

"In terms of industrial layout, we welcome any constructive suggestion and advice from Malaysia," Xiao added.

She also said to formulate preferential policies, the bureau has defined three aspects which included sharing land development profits, local tax revenue and to strive for early harvest.

"Tax revenue retained for local public finance, in the start-up stage, will be granted to the JV company as follow-up development funds," she said.

In order to promote practical progress in the joint development of QIP, Malaysians enterprises that invest in Qinzhou can enjoy a favorable industrial land price of RM35 per square metre.

QIP, to be sprawled over 50 square kilometres, will be developed over 10 to 15 years close to port and high-tech industries, and have an anticipated population of between 300,000 and 350,000.

By Bernama

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