KPJ to build specialist centre in Iskandar

JOHOR BARU: A new specialist hospital on a 500,000 sq ft of land will be built in Bandar Dato' Onn in the Iskandar Malaysia development region in Johor Baru.

Specialist hospital operator KPJ Healthcare Bhd will collaborate with Johor Land Bhd to build the modern hospital.

The project will be undertaken in two phases, KPJ chairman Kamaruzzaman Abu Kassim said yesterday.

The hospital will have the capacity of 400 beds, encompassing 280,000 sq ft. The first phase of the construction with 150 beds, is expected to start by the end of 2012.

Its total invesment has yet to be determined, but an average of RM1,000 is budgeted for a bed.

"Approval for zoning has been obtained from the Health Ministry and the details are being finalised," Kamaruzzaman said.

Kamaruzzaman, who is also Johor Corp chief executive and president, said the new hospital will house a "Centres of Excellence" featuring a heart centre, a geriatric centre, cancer centre and a cosmetic and reconstructive centre, among others.

"It will serve as a one-stop centre for all medical services of the highest standards to cater to both local and foreign patients to promote health tourism," he told a press conference yesterday.

At the same time, the group is currently developing new specialist hospitals in Bandar Baru Klang, Muar, Pasir Gudang and Kuantan.

KPJ is investing between RM50 million and RM80 million for each hospital.

It recently completed a deal to buy Sibu Specialist Medical Centre and Sibu Geriatric Health and Nursing Centre in Sarawak at RM28 million on April 6.

Kamaruzzaman expected the new project in Bandar Dato' Onn to further sustain its consistent financial growth in the coming years.

For the year ended December 31 last year, KPJ posted a total revenue of RM1.65 billion, up 13 per cent, compared with RM1.46 billion previously.

Group pre-tax profit improved16 per cent from RM143.89 million to RM166.69 million.

On another note, KPJ is venturing into the retirement and aged care market following its agreement to buy 51 per cent interest in Australian operator Jeta Gardens Waterford Trust for RM19 million.

The deal is expected to be completed by September this year.

"There is a huge market for retirement and aged care. We are in the midst of studying the business and is planning to build several retirement villas around the country," Kamaruzzaman said.

By Business Times

New RM1.5bil project to give trendy look to Puchong

Modern street mall: Tan (left) and Millennium Land senior operations manager Chua Chin Eng with a model of Millennia City.

PUCHONG: Millennium Land Sdn Bhd will embark on a RM1.5bil mixed-development project, M Square, which it is optimistic will become the new commercial centre for Puchong and turn it into a trendy township.

Located on 10.12ha, M Square comprises a 380,000 sq ft shopping mall located in the podium block below the 18-storey 255-room Hilton Garden Inn and a 2.1 million sq ft street mall comprising of 13 six-storey blocks of retail and office units.

The development will start by the third quarter this year and is targeted for completion by 2014.

Millennium Land executive director Benjamin Tan said the company also planned to build residential units targeted at the higher income group.

“Puchong is one of the fastest growing districts in Malaysia in terms of growth especially in three key areas population, monthly household income and commercialisation.

“The primary catchment in Puchong reaches an estimated 420,000 people while its secondary catchment area, some 10 minutes away, reaches some 1.2 million people,” he added.

International hotel chain Hilton Worldwide will be managing the 255-room Hilton Garden Inn Hotel set for opening in 2014. It is targeted at business and leisure travellers.

Tan said one of the project's main selling points was that when completed, it would showcase the largest street mall in the country.

“It ties in together with today's lifestyle trend with alfresco dining and outdoor live performances amid a conducive environment,” he said.

He said the project's major pull factors included its size which puts it into the regional mall category.

The size allows for a good tenant mix, and the ambience of a street mall will give it a very different feel compared to the other shopping centres.

“Our design, being modular, allows for flexibility as it does not have lift shaft in the centre like other conventional shop lots. Instead it is served by glass lifts on the exterior of the building,” he said.

“For the convenience of shoppers, every block was planned to cater to specific target markets, such as a Kids' Corner, Japanese Street and Digital Centre that can take up an entire block or a large portion of it, and by itself serves as an anchor tenant,” he added.

By The Star

Dijaya’s condo named best high-rise project

PETALING JAYA: Dijaya Corp Bhd's golf-fronted luxury condominium development, Tropicana Grande, has been named the “Best Residential High-Rise Development” in Asia Pacific at the 2011 International Property Awards in Shanghai recently.

The development was also named the best residential high-rise development with the highest five-star rating in Malaysia in the competition held on May 31 in association with Bloomberg Television and Google.

Dijaya managing director Datuk Tong Kien Onn said in a statement yesterday that the awards were testimony to the company's efforts to create its Tropicana-branded products that offered buyers more than just properties, but also contemporary lifestyle living.

By The Star

Ivory confirms bid for Bayan Mutiara project

George Town: Ivory Properties Group Bhd confirms that it has responded to a tender to develop over 40 hectares of land at Bayan Mutiara on Penang Island.

"I can confirm that we have submitted a bid by responding to the Penang government's request for proposal to develop the land and are now awaiting word from the state authorities," the company's deputy chairman and executive director Datuk Seri Nazir Ariff Mushir Ariff told Business Times after Ivory Properties' first annual shareholders' meeting.

Last Tuesday, Business Times reported that Ivory and SP Setia Bhd are in the race for a multi-billion ringgit development of some 40.47ha land at Bayan Mutiara.

Both companies have already established their presence as property players in the southwestern part of the island via existing developments.

The Bayan Mutiara tender is part of the state government's efforts to unlock the value of the land it owns in selected areas.

Sources had said that of the two companies, Ivory Properties had submitted the higher bid, for which the reserve price was reportedly set at RM200 per sq ft.

Nazir, however, declined to comment on this.

The state government had asked for a request for proposal (RFP) via Penang Development Corp to develop an initial 24.8ha, which is located south of the Pe-nang Bridge, overlooking Pulau Jerejak.

The RFP comes with the potential to develop an additional 14ha via a future re- clamation after the development of the initial 24.8ha land.

Meanwhile, Ivory Properties' operations director Murly Manokharan said luxury condominiums are set to be the group's next offering in Batu Ferringhi, where Ivory has already established its presence as a property developer.

Unlike its Moonlight Bay and Island Resort developments, which are sited on hillslopes commanding ocean views, the proposed The Bay development is set to be located on the beachfront.

Murly said the proposed development will comprise a single block of low-density condominiums, in compliance with environmental and developmental requirements set by the local authorities.

"We are hoping to offer units with large built-up areas ranging from 3,000 to 5,000 sq ft and they will likely be priced between RM600 and RM650 per sq ft," he said.

Ivory Meadows, a wholly-owned subsidiary of Ivory Properties, entered into a conditional agreement last year with Lim Soon Hin and Lim Soon Vin to buy 0.49ha of freehold land in Batu Ferringhi for RM25 million.

The project is expected to be completed three years after construction begins.

Also on the cards for Ivory Properties is the proposed City Mall located in Tanjung Tokong, which is set to be a mixed development project of luxury condominiums perched above a shopping mall.

"We are awaiting approvals from the local authorities before proceeding with this project which we hope to launch by the fourth quarter of this year," Murly said.

The project, with RM433.3 million gross development value, is set to offer 300,000 sq ft of shopping space and is expected to cater to tourists in meeting their dining, rest, travel and information needs.

Murly said the resident component, meanwhile, is set to cover 120,000 sq ft.

Property watchers said the proposed development is set to boost the area's new positioning as Penang island's new lifestyle and commercial hub.

Fronting the Island Plaza shopping mall, Ivory's proposed mall is set to join the ranks of projects that include Eastern and Oriental Bhd's master-planned Seri Tanjung Pinang development, Boon Siew Property Group's Precint 10 food and beverage mall, and IOI Properties' upmarket Fettes Residences condominium project.

By Business Times

E&O, Mitsui to jointly develop properties in Malaysia

PETALING JAYA: Lifestyle property developer Eastern & Oriental Bhd (E&O) and Japan's largest property developer Mitsui Fudosan Co Ltd are looking at opportunities to jointly develop residential properties in Malaysia and the region.


Partners: (from left) Zushi, Shotaro and Eric Chan at the collaboration signing ceremony.

“This is a significant start,” said E&O deputy managing director Eric Chan after signing a marketing collaboration agreement with Mitsui Real Estate Sales Co Ltd, the real estate brokerage arm of Mitsui Fudosan.

Mitsui Fudosan is one of Japan's corporate giants whose parent company, Mitsui Group, goes back to the Edo period. Mitsui Fudosan is listed on the First Section of the Tokyo and Osaka Stock Exchange and as at March this year, its total assets stood at US$47bil.

“With a market cap of US$15bil, they are not here for the (brokerage) commission,” said Chan.

Mitsui Fudosan (international department planning and administration group) executive manager Chishu Zushi said the marketing collaboration was the first step in other future collaborations.

“There will be other collaborations later on. We have been looking at various opportunities in the (residential) development business. It can be in Malaysia, Singapore or Japan, but it is too early (to announce) anything right now,” he said.

Future joint residential developments may involve E&O's existing projects or may include new ones, but yesterday's marketing partnership was project specific, that is to sell St Mary Residences in Kuala Lumpur and the Quayside Seafront Resort Condominiums in Penang.

The partnership would last until everything was sold, said Chan.

E& O has several projects, the largest of which is the 980-acre seafront development Seri Tanjung PInang in Penang. The first phase comprising 240 acres has been completed. It also has pockets of land in Jalan Kia Peng and Jalan Yap Kwan Seng in Kuala Lumpur and 365 acres at Gertak Sanggul in Penang plus bungalow lots in Damansara Heights.

Chan said about 20% of its buyers for both its Seri Tanjung Pinang and St Mary Residences in Penang were foreigners, with British being the largest group and Japanese the second largest group.

The percentage of foreign buyers for its Kuala Lumpur properties is smaller.

Ishihara Shotaro, the managing director of Tropical Resort Lifestyle Sdn Bhd, a Japanese support company that will be facilitating the cross-border collaboration said the number of Japanese buyers was expected to grow after the March 11 tsunami and earthquake.

“They invest in properties priced between RM1.5mil and RM2mil with built-up of 700 to 1,500 sq ft. They have found that investing here has been pretty rewarding compared with their investments in Japan. In Singapore, property prices are very high. We see greater possibilities here. After the March 11 tragedy, they are also looking for a country with no natural disasters,” said Shotaro.

By The Star

E&O plans 4 new Quayside condo blocks

KUALA LUMPUR: Property developer Eastern & Oriental Bhd (E&O) expects to launch four new blocks at its Quayside Seafront Resort and Condominiums project in Penang this year.

Its deputy managing director Eric Chan said the company was optimistic about the project.

"So far, out of the total seven condominium blocks planned under the project, three have been launched with more than 75 per cent taken up," he said, noting that phase one will be completed by 2013.

The Quayside project is also home to Malaysia's largest water themepark.

Speaking to reporters after signing a marketing agreement with Mitsui Fudoson Co Ltd yesterday, Chan said one more condominium block will be launched next month while the rest is scheduled for launch either by the year-end or early 2012, with gross development value at more than RM2 billion.

Mitsui, Japan's largest property developer, through its unit, Mitsui Real Estate Sales Co Ltd, will market E&O properties to its high net worth clientele in Japan.

Chan said the collaboration is the first step that marks the beginning of efforts to bring the homegrown E&O brand to the Japanese market.

"We are honoured and excited by the opportunities presented by this collaboration with a giant like Mitsui," he said.

Besides E&O's Quayside project, other projects to be marketed in Japan include the company's St Mary Residences in Kuala Lumpur, due for completion next year.

"Our products are local but we believe demand can be global, especially if our standards of quality and innovation are international," he said.

By Business Times

1MDB acquires land for Bandar Malaysia project

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has signed an agreement to buy and transfer a 200.5ha airport land in Sungai Besi, which will be transformed into Bandar Malaysia.

1MDB, as the master developer of the project, signed the deal yesterday with the Federal Land Commissioner.

A second agreement between 1MDB and the Menteri Besar Incorporated of Negri Sembilan was signed for the latter to buy 303.8ha in Sendayan. This location will be the replacement site for the Royal Malaysian Air Force.

At the same time, 1MDB also entered a master relocation agreement with the Ministry of Defence and the Home Ministry to develop eight replacement sites.

"Bandar Malaysia will have several attractive elements to further strengthen Kuala Lumpur's global competitiveness as cities compete to attract international investors and businesses," 1MDB said in a press release.

"Bandar Malaysia aims to promote livability as a distinctive cha-racter of Greater Kuala Lumpur. It will be a mixed development filled with livable space for/ life balance such as open green space and people's avenue as well as higher learning institutions," the statement added.

Tan Sri Nor Mohamed Yakcop, the minister in the Prime Minister's Department witnessed the signing at the Economic Planning Unit of the PM's Department.

1MDB was represented by its chief executive officer Shahrol Halmi. Its chairman Tan Sri Lodin Wok Kamaruddin was also present.

The release added that this is the third game-changing use of the historical site.

In 1956, it served as the first international airport and it was also the birthplace of RMAF from where it grew to become an ultra modern air force.

By Business Times

Dijaya’s Tropicana Grande named best in Asia Pacific

KUALA LUMPUR: DIJAYA CORPORATION BHD’s Tropicana Grande has been named the best residential high-rise development in Asia Pacific at the Asia Pacific Property Awards in Shanghai.

The Tropicana Grande, the golf-fronted luxury condominium, was also named the best residential high-rise development with the highest five-star rating in Malaysia in the competition held on May 31, 2011 in association with Bloomberg Television and Google.

In a statement Wednesday, June 15, Dijaya managing director Tong Kien Onn said the awards were testimony to the company’s efforts to create its Tropicana-branded products that offered buyers more than just properties, but also contemporary lifestyle living.

“We are honoured to win these awards and we attribute this success to all the employees of Dijaya for their passion, dedication and hard work as well as the trust which our customers have in our company,” he said.

The Asia Pacific Property Awards forms part of the International Property Awards which is the world’s most prestigious property competition covering residential and commercial categories and sets out to identify the very best real estate professionals across the globe.

The process involves a judging panel of over 50 experts chaired by Lord Bates of Langbaurgh and covers every aspect of the property business such as development, architecture, interior design and marketing.

By The EDGE Malaysia

CMMT buys East Coast Mall for RM310m

Kuantan attraction: CMMT’s proposed acquisition of East Coast Mall is expected to be completed by the last quarter of 2011.

PETALING JAYA: CapitaMalls Malaysia Trust (CMMT), through its trustee AMTrustee Bhd, has entered into a conditional sale-and-purchase agreement with Astral Realty Sdn Bhd for the acquisition of East Coast Mall in Kuantan for a cash consideration of RM310mil.

In an announcement to Bursa Malaysia yesterday, CIMB Investment Bank Bhd on behalf of CapitaMalls Malaysia REIT Management Sdn Bhd, the management company of CMMT, said the acquisition consisted of a four-storey shopping mall with one basement level comprising retail space on the ground, first, second and third floors, together with 1,170 car parking bays at the basement level, surface car park on the ground floor, third floor and on the rooftop.

As at May 1, CMMT was the largest “pure-play” shopping mall real estate investment trust in terms of property asset value in Malaysia, and the proposed acquisition will further strengthen this position.

“Following the completion of the proposed acquisition, CMMT's property asset value is expected to increase from approximately RM2.37bil to about RM2.7bil,” it said.

CMMT intends to fund the proposed acquisition through debt and equity to be raised via a proposed placement of up to 298.971 million new units in CMMT by way of book building, representing up to 20% of the existing units in CMMT.

Barring any unforeseen circumstances, the proposals are expected to be completed by the last quarter of 2011.

By The Star

S&P lowers China’s real estate devt to negative

KUALA LUMPUR: Standard & Poor's Ratings Services has revised its industry outlook for China’s real estate development sector to negative from stable, as credit conditions in that country have become increasingly challenging.

In a statement Wednesday, June 15, Standard & Poor's said that elsewhere in the region, the soaring market in Hong Kong may be at risk of a sharp correction.

In a report titled "Asia-Pacific Real Estate Developers: China Sector Outlook Revised to Negative on Regulatory Tightening; Other Markets Are Stable", Standard & Poor's suggested that conditions were stabilising in Japan and credit profiles were largely improving in Southeast Asia.

Standard & Poor's credit analyst Bei Fu said it was likely to see more negative rating actions among Chinese developers in the next six to 12 months because tightened onshore credit conditions and increasingly restrictive government policy have deepened the market downturn.

"Any meaningful slippage in sales will significantly weaken the developers' cash flow protection measures amid higher leverage and stiff competition,” she said.

The report noted that many developers shored up liquidity ahead of the anticipated market downturn at the expense of weakening their capital structures and increasing their refinancing risks due to the concentration of debt maturities.

A protracted negative cycle would therefore intensify the pressure on credit profiles, said the report.

"Property sales were satisfactory for many rated issuers in the first five months of this year, but we expect the sales momentum to slow as policy tightening starts to bite.

"We expect meaningful price adjustments in the second half of 2011. If sales volumes remain sluggish, developers' liquidity will quickly dry up, suggesting sporadic price discounting will likely intensify,” said Fu.

By The EDGE Malaysia

Agreements inked to develop Sungai Besi airport land into Bandar Malaysia

KUALA LUMPUR: Several agreements were inked Wednesday, paving the way for the old Sungai Besi airport land to be transformed into Bandar Malaysia a strategic development for long-term national growth.

Bandar Malaysia will have several attractive elements to further strengthen Kuala Lumpur's global competitiveness as cities compete to attract international investors and businesses, a statement on the 1Malaysia Development Berhad (1MDB) website said.

1MDB, the master developer for Bandar Malaysia, signed, among others:

* Sale and purchase agreements with Federal Land Commissioner for the transfer of 495 acres of Sungai Besi airport land to 1MDB;

* Sale and purchase agreement with the Mentri Besar Incorporated of Negri Sembilan for the purchase of 750 acres in Sendayan, which is the replacement site for the Royal Malaysian Air Force (RMAF);

* A master relocation agreement with the Defence Ministry and Home Ministry to develop eight replacement sites.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop witnessed the signing at the Economic Planning Unit of the Prime Minister's Department here.

Bandar Malaysia aims to promote livability as a distinctive character of Greater Kuala Lumpur. It will be a mixed development filled with livable space for work/life balance, such as open green space and people's avenue as well as higher learning institutions, the statement said.

This is the third game-changing use of the historical site. In 1956, it served as the first international airport, opening up the aviation, travel, tourism and hospitality industries.

It was also the birthplace of the RMAF from where it grew to become an ultra modern air force.

By The Star

1MDB inks deal to redevelope Sungai Besi airport

1Malaysia Development Bhd, a sovereign fund, signed agreements today to transform Kuala Lumpur’s former Sungai Besi military airport into a township development.

The Federal Land Commissioner will transfer 495 acres of land to 1MDB, as the fund is known, according to a statement on its website. 1MDB will be master-planner for the project which will be known as Bandar Malaysia, it said.

The Royal Malaysian Air Force signed a separate agreement for a replacement site in Sendayan, it said.

By Bloomberg

MRCB poised to clinch RM800m LRT contract

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is poised to secure soon a contract worth as much as RM800 million from Syarikat Prasarana Negara Bhd, people familiar with the matter said yesterday.

The contract is for civil works for phase two of the Ampang light rail transit (LRT) extension line linking Putra Heights to Shah Alam, Selangor.

Other parties which had tendered for the job include Sunway Holdings Bhd.

Prasarana, a unit of the Ministry of Finance Inc, is the asset-owner and operator of the Ampang and Kelana Jaya LRT lines.

It is further understood that Prasarana will award a similar contract to TRC Synergies Bhd for phase two of the Kelana Jaya LRT extension, also linking Putra Heights to Shah Alam.

In addition to that, Prasarana will also award by this week a RM850 million contract to a consortium comprising Hartasuma Sdn Bhd, Bombardier Inc and SNC Lavalin.

The contract is for the electro-mechanical (E&M) system for the Kelana Jaya LRT extension.

The consortium has edged out CMC Engineering Sdn Bhd-Colas and Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd to secure the contract.

It is learnt that CMC-Colas and Ingress-Balfour Beatty had submitted a bid worth RM750 million and RM650 million, respectively but did not meet the technical requirements.

This are the first LRT-related contracts Prasarana is farming out this year. Last November, Prasarana gave out two civil contracts worth as much as RM1.6 billion of the RM7 billion Kelana Jaya and Ampang LRT extension project.

It had appointed TRC as the main contractor for phase one of the 17km extension of the Kelana Jaya Line from Kelana Jaya to Putra Heights. The contract value is RM950 million.

It had also appointed Bina Puri-Tim Sekata JV as the main contractor to implement the first phase of the 17.7km extension for the Ampang LRT line between Sri Petaling to Putra Heights. The contract value is RM634.64 million.

By Business Times

Competition for office tenants set to intensify

KUALA LUMPUR: Competition among lessors of office space in Kuala Lumpur is expected to intensify this year, with the annual average rentals of office space in the business district projected at US$25.19 (RM76) per sq ft.

Global real estate firm Colliers International said completion of individual projects has been deferred from late 2010 to 2011.

"With a total of over 3.0 million sq ft new space coming on line by the end of 2011, competition for tenants is anticipated to intensify," Colliers said in its Asia Pacific Office Market Overview for the first quarter 2011.

According to the publication, which was made available to Business Times, prime office rental and capital values in Kuala Lumpur central area have improved slightly in the first quarter this year.

Colliers predicts the overall market to remain stable over the near term, on the back of economic growth of between 5 and 6 per cent this year.

The real estate firm anticipated that the new supply of office space in Kuala Lumpur business district to reach 3.2 million sq ft by year-end, bringing the total stock in the area to 31.1 million sq ft.

The take-up rate is expected to be 1.2 million sq ft, while the average vacancy for the year is estimated at 13.6 per cent.

For 2012, Colliers expects the average rentals to stay at US$25.19 per sq ft, while the new supply of office space in Kuala Lumpur to halve to 1.4 million sq ft, with the take-up rate to drop by a third to 800,000 sq ft.

Total stock is expected to increase slightly to 32.6 million sq ft, while average vacancy is also expected to trend upwards to 15 per cent.

Regionally, Colliers saw investment demand for office real estate remain strong in the first quarter this year, despite the recent interest rate rises.

"Firstly, the potential capital appreciation remained promising, given the continued rental catch-up in the market. Secondly, investors were encouraged by the sustained low-cost borrowing in the first quarter 2011," it said.

Buoyed by strong investment demand, it said individual centres such as Hong Kong and Taipei had seen office values reach new highs in the quarter under review. End-users remained keen on acquiring their office buildings for owner-occupation, it added.

On leasing, the real estate firm said although the individual centres are going to see an increase of three to four times of new supply this year, office rentals remained firm. This is due to positive business confidence and encouraging pre-commitment rate for a number of new developments.

The potential impact from the growing inflation is going to be the key uncertainty anticipated by most players in the office market.

Colliers, from its research, expects further rental and capital growth this year.

However, individual centres with major developments due for completion this year would provide a window of opportunity for tenants going for corporate relocation and upgrading over the near to medium term, it said.

"In particular, seismic concerns in Japan are expected to prompt more tenants to go for newer developments," it added.

By Business Times

Property at ‘upper band’

KUALA LUMPUR: Property companies on Bursa Malaysia, which have lagged behind the performance of the broader market in the past month, are trading at valuations that put such counters at the upper band against its regional peers.

Some analysts admit the valuations of the larger property companies are frothy but say there are reasons why such stocks are seeing such valuation differences from property companies in Singapore, Hong Kong or Indonesia.

“They have a premium because of execution, a track record and branding,” said HwangDBS Vickers Research analyst Yee Mei Hui, when comparing SP Setia Bhd, the country's top property company, with companies from other countries.

The regional comparison, which was made by CIMB after SP Setia released its second quarter results, showed the biggest property companies on Bursa Malaysia are generally trading at a slim discount to their share price as compared with the regional peers on a revalued net asset value (RNAV) basis.

The RNAV is what analysts think the market value of land and assets on a company's books amounted to compared with the book value of such land.

The small discount is more pronounced for the country's largest property counter by market-capitalisation terms - UEM Land Holdings Bhd, which has a market capitalisation of US$3.8bil - as the counter is trading at about a 9% discount to the stock's RNAV. SP Setia was trading at about 2% as of last week.

In comparison, the larger property companies, such as CapitaLand in Singapore and China Overseas Land & Investments Ltd, are trading at a much steeper discount to their RNAV.

One analyst thinks the difference in pricing compared with Singapore and Hong Kong is down to the mechanics of the markets there.

“Property prices there are volatile and investors who buy such stocks can overshoot in either way,” said ECM Libra Investment Bank Bhd research head Bernard Ching.

He said the land value in Malaysia was not as volatile and tended to rise on a gradual basis.

Concerns over a property bubble in Hong Kong and Singapore has also led to investors taking a much more cautious view of the value of property stocks in those countries in relation to their RNAV.

Some analysts feel the reason why Malaysian property counters have a higher valuation than regional companies was also down to a few factors.

Concentration of Malaysia-based funds seeking investments in Malaysia has seen a lot of money chasing a few quality companies and the bigger the stock, the better their following is.

“Property development is a medium term business and it's not solely about land value,” explained an analyst. He said investors generally want to look at stocks that generate a return on the value of the land the companies own and explained that companies that generally sit on large land reserves with little activity often see bigger discounts to their RNAV.

That argument has been used to explain Mah Sing Group Bhd's share price that is trading close to the company's estimated RNAV.

“Mah Sing works on a fast turnaround model and does not have a lot of landbank,” said an analyst.

Although property stock valuations were high, analysts said the divergence of the property index and that of the FTSE Bursa Malaysia KLCI (FBM KLCI) was down to investors chasing after the more liquid blue chip counters.

“The property index has a big number of mid and small cap stocks,” said an analyst.

“When the market turns south, buying will concentrate on the large, blue chip stocks.”

Property companies on Bursa Malaysia still, on average, attract “buy” calls with analysts saying the prospects of choice developers are still bright.

By The Star

SP Setia plans to increase Australia landbank

MELBOURNE: Malaysian property developer SP Setia Bhd plans to increase its landbank in Australia, predominantly in popular cities such as Melbourne, Sydney and even Gold Coast, as it seeks to capture the growing opportunities from the population boom of these cities.

Having made its first Australian investment last year, the developer is in the midst of scouting for more investment opportunities in Melbourne.

“For the first few years, we are looking for investment opportunities and to take on projects that will provide quick turnaround and are easy sell. Subsequently, we will look at greenfield projects and (at building) townships,” Setia (Melbourne) Development Co Pty Ltd chief executive officer Choong Kai Wai told Malaysian reporters here last Friday.

SP Setia is known for its township developments in Malaysia, which include Setia Alam in Shah Alam, Setia Indah in Johor and Setia Vista in Penang.

The developer, through its unit Setia (Melbourne) Development, will undertake a mixed-use development on the 4,340 sq metre site purchased last year for A$30mil in the central business district of Melbourne.

The property, dubbed Fulton LN, will comprise two towers of housing apartments as well as offering commercial and retail outlets closer to the ground level. It has dual street frontage, with the first tower facing Franklin Street and a two minute walk to the Queen Victoria Market while the second tower faces A'Beckett Street and is a five minute walk from RMIT University.

The first tower, which will be open for an exclusive preview on June 24, stands at 107 metres and will have 28 storeys offering some 300 apartments. Meanwhile, the taller tower at 44 storeys will be some 150 metres in length offering 400 apartments and should be open for sales in the next six to 12 months.

Most of the apartments will be one or two bedroom units although there will be units offering three bedrooms as well. Apartments start from A$370,000 for one bedroom at 45 sq metre, A$515,000 for a two bedroom starting at 60 sq metres and A$1.05mil for three bedroom dwellings starting at 114 sq metres.

Construction of this project, which has a gross development value of A$470mil, will commence next year and the development is expected to be ready by 2014.

The architectural design of the mixed development is by Karl Fender of Fender Katsalidis Architects, which happens to be the firm behind the proposed 100-storey tower Warisan Merdeka in Kuala Lumpur.

“The size of Fulton LN's ground plan gives us the opportunity to ignite activity movement around the laneway with retail, restaurants and cafes,” Fender said. Fulton LN is within walking distance of several universities and colleges such as Melbourne University and RMIT University. It is also close to Melbourne's central shopping centre.

and easily accessible by public transportation services.

SP Setia is looking to appeal to and monetise its Malaysian customer base, with many local parents having sent their kids to Australia, particularly Melbourne, to further their tertiary studies.

By The Star

CapitaMalls to buy Pahang mall for RM310m

AmTrustee Bhd, the trustee of CapitaMalls Malaysia Trust (CMMT) has entered into a conditional sale and purchase agreement with Astral Realty Sdn Bhd to acquire East Coast Mall in Pahang for RM310 million.

In a statement today, CMMT said the mall a nearly-full occupancy rate of 97.0 per cent, with a forecast property yield of about 7.1 per cent for 2011.

Based on CMMT's closing price of RM1.17 on June 13, CMMT's implied property yield for 2011 is about 6.4 per cent, it said, adding that it would be yield-accretive to CMMT unitholders.

The East Coast Mall is a four-storey shopping mall with one basement car park level and 1,170 car park lots, with a net lettable area of more than 440,000 square feet.

By Bernama

SP Setia forays into Aussie property mart

MELBOURNE: SP Setia, Malaysia's largest property development company will make its debut in the Australian property market with the Fultan LN, a mixed development project with a gross development value of A$470 million (A$1=RM3.20).

Chief executive officer of Setia Melbourne Development Company Pty Ltd, Choong Kai Wai, said the property project, comprising 730 apartments as well as new commercial and retail units would be located at the Melbourne Central Business District (CBD) here.

"Standing at 107 metres tall with 28 storeys, at the site linking Franklin and A'Beckett Street, it is the largest remaining undeveloped site in the central spine of the Melbourne CBD," Choong said during a media familiarisation tour of the Melbourne CBD recently.

Work on the project, covering a site measuring 4,340 square metres, is expected to begin next year with completion due middle of 2014.

The Fultan LN, apart from being a short walk to the Melbourne Central Shopping Centre and railway station, would be also close to the Royal Melbourne Institute of Technology, La Trobe University and Queen Victoria Market.

A preview of the first phase of the property in Malaysia will be held by June 24, he said.

The first phase will comprise 300 units of apartments with a gross development value of A$200 million. Already there are 600 potential takers for the property, said Choong.

"We expect more interest in the property with the coming preview and the scheduled launch in early September in both Malaysia and Melbourne," he said.

Choong also said the commercial units on the ground floor will not be for sale at the moment, explaining that it will be better for the developer to keep retail ownership in order to ensure control over the type of commercial or tenant mix to ensure sustainability to the development.

However, he added that the commercial units may be sold at a later date when development is matured.

"Our selling point is design, location and you get a piece of Melbourne," he said.

The property's architecture was done by acclaimed Australian architect Karl Fender.

On the property, he said it would offer "one one, two and three bedroom dwellings, a green pergola, communal garden, gymnasium, pool and roof terrace with theatrette and communal entertaining kitchen and dining space inspired by Adam D'Sylva, the famous chef in Melbourne."

Choong said SP Setia was also committed to a number of Environmentally Sustainable Building design initiatives to achieve a Green Four Star Certified Rating which incorporates bicycle facilities, grey-water recycling, water tank, natural ventilation, green wall and good energy rating.

Prices for the Fultan LN properties start from A$370,000 for a one-bedroom apartment, while two-bedroom apartments would start from A$515,000 and three-bedroom apartments from A$1.05 million.

"At the moment, we are looking at substantial amount of financing from banks who could give us the most competitive rates," he said, adding that this will be finalised soon.

Choong said SP Setia was in Australia for the long haul and was keen on property development in Melbourne and Sydney.

By Bernama

Analysts puzzled as UOA fails to shine on debut

UOA Development Bhd chairman, Tan Sri Alwi Jantan (right) together with managing director CS Kong (centre) and non-independent non-executive director Alan Charles Winduss (left) looking at the main screen after the listing ceremony. AZMAN GHANI/The Star

PETALING JAYA: Last Wednesday marked UOA Development Bhd's debut on the Main Market of Bursa Malaysia.

Year-to-date, the property developer's initial public offering (IPO) was the largest such exercise in South-East Asia.

Based on the IPO's institutional price of RM2.60 per share, UOA Development has a market capitalisation of RM3.1bil, which makes it among the five largest property developers listed on Bursa Malaysia, together with UEM Land Bhd, SP Setia Bhd, IJM Land Bhd and IGB Corp Bhd.

The company is a unit of United Overseas Australia Ltd (UOA), which was founded and listed on the Australian Stock Exchange (ASX) in 1987.

Its headquarters and business operations has been based in Kuala Lumpur since 1989.

UOA is also listed on the Singapore Stock Exchange (SGX) in 2008, while its associate company, UOA Real Estate Investment Trust (UOA REIT), was listed on the Main Market of Bursa Malaysia in 2005.

UOA Development is known as a fully integrated property developer with in-house capabilities in project conceptualisation and design, construction as well as sales and marketing.

UOA Development's property launches in the second half of this year include One @ Bukit Ceylon Hotel Suites, which consists of 354 units located on a freehold 1,566 sq m site off Jalan Ceylon, Kuala Lumpur, and Kiara IV, which is a freehold residential project with 80 units on a 39,700 sq m site in Bukit Segambut, Kuala Lumpur.

Both projects, due to be completed in 2013, have a combined GDV of RM400mil.

In a recent StarBiz interview, UOA Development director Alan Charles Winduss pointed out that the company's integrated operation model had helped it to remain competitive and also mitigate rising land costs to a degree.

As at Dec 31, 2010, UOA Develop-ment had a total saleable and lettable area of more than 300,000 sq m of properties under development with a 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.

For financial year 2010 (FY10), UOA Development posted a net profit of RM285.8mil on revenue of RM375.2mil.

This was a 61% jump in net profit, compared with its reported net profit of RM177.6mil on revenue of RM427.8mil in FY09.

For the first quarter of this year, the company posted a net profit of RM130mil on the back of revenue of RM145.7mil.

However, it should be noted that in its profit calculation for the quarter under review, the company also recognised fair value gains amounting to RM92.3mil (which was not included as revenue for the quarter) due to the completion of Blocks 3 and 4 of The Horizon Phase II which are held as investment properties in the flagship Bangsar South City development.

Prior to UOA Development's listing, many research analysts were quite bullish about the shares' prospects as they said the company had solid fundamentals with a strong parent in UOA, prime landbank in strategic locations in the Klang Valley, and reasonably high margins attributable to its in-house construction and procurement unit.

Several research firms accorded fair values in the RM3.50 range for the share prior to listing.

However, the company's lacklustre debut on Bursa Malaysia left investors disappointed and analysts puzzled.

The stock touched a high of only RM2.62 on its first day of trade, and ended at RM2.52 as at last Friday, down 3.1% from its initial public offering (IPO) institutional price of RM2.60 per share.

The volume traded last week was 82.5 million shares, with some 78 million shares changing hands on Wednesday but only about 4.5 million shares on Thursday and Friday.

In a filing with Bursa Malaysia, UOA also raised its stake in UOA Development to 66.58% or 796.15 million shares by acquiring shares in the open market last Wednesday.

One analyst from a local research firm said investors' perceptions might have been affected by the share's low 5 sen par value against its offer price, as well as the flat performance on the local bourse last week.

Another analyst pointed out generally, investors preferred property stocks with more diversified township developments and were perhaps unhappy that UOA Development was mainly renowned for its ongoing 60-acre Bangsar South City project in Kampung Kerinchi, Kuala Lumpur.

Kenanga Research said in a IPO note last month that there was “single” area concentration risks for the company as the bulk of its projects were in Bangsar South City while the property sector's risks included negative real-estate policies, rising interest rates, tightening banking system liquidity and an economic slowdown.

A note issued by ECM Libra Investment Research last month said the company was also overly exposed to non-residential properties which accounted for 86% of its remaining GDV.

However, the company's chief operating officer (development division) David Khor said recently he hoped the ratio would change in the next two years, with higher volume contribution from residential projects.

As part of this strategy, the company announced last week, in a Bursa Malaysia filing, that its wholly-owned subsidiary, Magna Tiara Development Sdn Bhd, had entered into a conditional sale-and-purchase agreement with Sim Nam Housing Development Co Sdn Bhd to acquire two parcels of freehold land measuring 4.86 acres in Sri Petaling, Kuala Lumpur, for RM50mil cash from internally-generated funds.

The company plans to build a high-rise residential development on the site, located 15km from Kuala Lumpur City Centre, with a launch slated in the fourth quarter of this year.

By The Star

Sime Darby to invest RM280m in 2 hospital projects

KUALA LUMPUR: SIME DARBY BHD’s healthcare division is investing RM280 million in two hospital projects in the Klang Valley as part of the government’s health tourism plan under the Economic Transformation Programme (ETP).

The conglomerate said on Monday, June 13 it would invest in a 220-bed Sime Darby Medical Centre Ara Damansara in Subang which will be operational by the third quarter of 2011.

The 300-bed Sime Darby Medical Centre ParkCity will be operational by the second half of 2012.

Sime Darby’s investment in the two hospitals is part of the Entry Point Project 4 under the Economic Transformation Programme.

“To achieve this target, the healthcare sector will require an additional 1,900 beds. The bulk of the investment required to achieve this target is expected to come from the private sector,” it said.

Under the EPP 4, the target is to attract two million people under the health tourism programme.

By The EDGE Malaysia

Regional debut for Mah Sing

An artist’s impression of Icon City Petaling Jaya.

Mah Sing Group Bhd plans to make its debut as a regional property player this year and hopes to kick off its first offshore project in China by year-end.

Group managing director and group chief executive Tan Sri Leong Hoy Kum says the decision to hold back from venturing overseas earlier has been a blessing for the company as it has allowed Mah Sing to build up a stronger market presence locally.

“We had planned to venture into China two years ago but decided against it after some careful analysis. On hindsight, this has proven to be the right decision and the company is in a much more comfortable position to do so now,” he tells StarBizWeek.

To achieve its vision as a world-class regional developer within the next five years, Leong says Mah Sing has also set its sight on Singapore, Australia and Indonesia.

Locally, the company has grown to be one of the most diversified property developers in the country with a broad product offering in the Klang Valley, Penang and Johor Baru.

It has 34 projects (including five completed ones) in the residential, commercial and industrial segments.

To support its sales target of RM2bil to RM2.5bil this year, Mah Sing plans to roll out between RM2.5bil and RM3bil worth of launches. Of this, some 36% will comprise landed residences, 32% will be service residences and small office home office (SoHo), 29% from commercial properties and 3% from industrial projects.

Mah Sing's range of residential projects are marketed under the township Perdana brand, medium high to high-end Residence brand, and high-end Legenda brand.

For high-rise properties, Mah Sing recently launched the M series M Suites and M-City, and Plaza series Garden Plaza in Cyberjaya.

Leong says the current trend is to have mixed-use developments that have a mixture of residential suites, office suites and retail outlets within the same development, “as buyers are opting for products that improve their quality of life, and the convenience of everything being in close proximity to each other.”


An artist’s impression of M-City@Jalan Ampang in Kuala Lumpur.

Its latest project to be previewed, M-City@Jalan Ampang, attracted over 3,000 registrants for the designer SoHo suites, residential suites and sky villas.

The RM920mil project features 1,200 units of residential suites, office suites and retail outlets, on five acres of freehold land.

The first component to be previewed was the designer SoHo suites comprising single storey units with built up of 781 sq ft, 853 sq ft and 1,066 sq ft, as well as duplex units with built up of 910 sq ft and 1,330 sq ft.

These semi-furnished residences have average price of RM800 per sq ft (psf).

Trendsetter

Based on a garden city concept, M-City boasts of over four acres of greenery with hanging gardens, lagoon parks and other thematic parks for residents.

There will also be lifestyle retail outlets to cater to the needs of residents and tenants. The three-storey boutique retail shops has average lot size of 28' x 78'.

According to Leong, Mah Sing is also making an impact in the commercial property sector, and is one of the few listed developers to offer industrial products through its iParc range of projects.

Its latest iParc 3@Bukit Jelutong will comprise 25 units of 3 storey semi-detached bungalows with land size of 60'x132', built up from 5,339 sq ft and indicative price from RM3.3mil.

They will be designed for 4-in-1 centralised functions, where the factory, office, showroom and warehouse can operate from one central location.

Going forward, Mah Sing wants to build more street malls and retail malls.

It has three street mall projects Southgate KL, StarParc Point Setapak and Star Avenue D'Sara, and two retail malls Icon City Petaling Jaya and Southbay City on Penang island.

Since its launch in 2008, Southgate KL with gross development value (GDV) of RM458mil, has been 98% sold. Of the five blocks of lifestyle retail and modern office suites, two were sold en-bloc and the balance on strata.

“At the moment, we have approximately 70% tenancy rate for the retail portion of Block A, and

the building is expected to open for business in August,” Leong says.

StarParc Point Setapak with GDV of RM129mil was launched in the first quarter of 2009. It is nearly 100% taken up.

Fronting the upcoming Parkson Mall and Jalan Genting Klang, the covered lifestyle square will feature al-fresco dining outlets and boutique shopping.

The three-storey shop office units with built-up from 4,880 to 6,904 sq ft are priced from RM2.2mil,

There are also the six-storey series comprising double-storey retail lots from 2,251 to 4,950 sq ft priced from RM1.3mil, while the four-storey offices of 1,264 to 2,715 sq ft are from RM295,000.

Lifestyle projects

Star Avenue D'Sara that fronts Jalan Sungai Buloh is one of the first new commercial projects along Jalan Sungai Buloh.

Comprising 92 units of three- storey shop office priced from RM2.2mil, the RM402mil project was launched in April.

Located close to the proposed MRT station in Taman Industri Sungai Buloh, the project is adjacent to the Rubber Research Institute land, has dual access from Jalan Sungai Buloh Shah Alam and Persiaran Cakerawala.


Leong: ‘We had planned to venture into China two years ago but decided against it.’

As for retail malls, Icon City Petaling Jaya, located on 20 acres at the crossroads of Lebuhraya Damansara-Puchong and the Federal Highway, is Mah Sing's flagship project in the commercial segment.

The project with GDV of RM3.2bil offers one of the best visibility in the Klang Valley.

Under the first phase of the project, 30 prime lots comprising seven and eight storey lifestyle shop offices with wide frontage, high ceilings, quality finishing, private lifts and main road frontage, were recently previewed, of which 19 units valued at RM192mil were sold.

The second phase of the project comprising two and three storey retail lots (with indicative price from RM3.6mil), small office versatile offices (from RM570,000) and residential units, are now open for registration.

Leong says the development will also have a hotel, corporate office towers and a retail mall.

Meanwhile, Southbay City on Penang island, located about five minutes from the upcoming second Penang bridge, will have commercial portion to the tune of RM2bil in GDV.

The first phase of the project will comprise the RM265mil Southbay Plaza that will be ready for a preview soon.

The residential suites with built-up of 1,030 to 1,645 sq ft will have indicative price of RM550 psf, while the lifestyle retail shops of 1,000 to 12,500 sq ft will be at RM500 psf.

By The Star

SP Setia seen hitting RM3bil

Setia Tropika, a mixed property development project in Kempas, Johor Baru by SP Setia.

KUALA LUMPUR: Shares of SP Setia Bhd, the largest property stock on Bursa Malaysia, rose 5 sen to RM4.15 after meeting earnings expectation for the half way mark of its financial year with analysts confident the company would be able to meet its full year sales target of RM3bil.

Sales for the second quarter and the first half had surpassed previous highs, and revenue for the seven months of its financial year ending October 2011 was already higher than any other full year except for its 2010 financial year.

“Current unbilled sales have touched a record RM3.2bil following strong year-to-date (7 months) pre-sales of RM1.66bil. Setia is very much on track to meet its sales target of RM3bil,” said AmResearch in a note yesterday.

CIMB Investment Bank in a report said some 57% of the sales came from the Klang Valley.

“The four townships in Johor contributed huge sales of RM510mil or 36% of the total while Penang chipped in 7%. The Johor sales were very commendable, being an unprecedented RM1bil on an annualised basis compared with past sales of RM400mil to RM500mil per annum,” it said.

“SP Setia's second half sales should exceed first half sales comfortably as sales from KL EcoCity should be considerable.”

Expected to drive sales this year will be the company's KL Eco-City project. HwangDBS Vickers Research in its note said KL Eco-City's RM1.8bil worth of bookings from boutique and strata offices and recent condo tower launch at an average selling price of RM1,200psf, which was a 40% premium to adjacent properties, should be converted soon, following the signing of S&P agreements from mid-June onwards with the completion of DBKL's land privatisation exercise.

It pointed out that other launches to watch were V Residences and Brook Residences (with a gross development value of RM233mil), Fulton Lane@Melbourne with a projected GDV of RM1.4bil and Aeropod@ Kota Kinabalu (projected GDV of RM1bil but is awaiting approvals).

“SP Setia will be one of the biggest beneficiaries of the mass rapid transit with 25% of RNAV exposed to potential interchanges ie KL Eco-City and Jalan Bangsar (near KL Sentral),” said Hwang DBS.

It said SP Setia could be involved with more landbanking deals. Hwang DBS said SP Setia has been the most aggressive developer with four acquisitions year-to-date with a GDV of RM15bil.

AmResearch expects land acquisitions to be the primary valuation driver. “Based on its township track record, SP Setia would be the leading candidate to co-develop a parcel of the prime residential land in Sg Buloh with EPF-owned Kwasa Land, leveraging on its successful Eco Park brand,” it said.

“We are expecting stronger newsflow on this front in the next few months. It is also bidding for the 100-acre seafront land in Bayan Mutiara, Penang believed to be valued at over RM900mil including reclamation cost, and a potential GDV of over RM5bil,” said the report.

By The Star

Mutiara Goodyear to launch projects with GDV of RM1.3bil

KUALA LUMPUR: Property developer, Mutiara Goodyear Development Bhd expects to launch several mixed development projects amounting to RM1.3bil in gross development value (GDV) this year, said its executive chairman Hamidon Abdullah.

Among the upcoming launches are Nadayu 28 Sunway, Nadayu 290 Penang and Nadayu Cyberjaya, Hamidon told reporters after the company's annual general meeting here yesterday.

“We have successfully launched Nadayu 92 in Kajang with overwhelming response. We launched 286 units of link houses, four units of bungalows and 24 units of semi-detached homes,” he said.

According to Hamidon, the Nadayu 28 Sunway project meanwhile will comprise 10 units of shoplots and 411 condominium units while Nadayu 290 will have 142 units of condominiums and seven units of villas.

The company which has vast experience in commercial and residential developments currently has a land bank of 876 acres.

Asked on the proposed change in the company name to Nadayu Properties Bhd, Hamidon said it was part of its branding strategy to establish the Nadayu brand for all its property development projects.

It would be in line with the group's objective to maintain strength and value in product quality, project execution and timely delivery while it pursues its vision of becoming an innovative property developer in the local and global market, he added.

By Bernama

Mutiara Goodyear plans RM1b project

KUALA LUMPUR: Property developer Mutiara Goodyear Development Bhd plans to build commercial and residential units worth some RM1 billion on a 1.4ha site along Jalan Sultan Ismail here.



Last week, Mutiara Goodyear told Bursa Malaysia that it will buy the land for RM215.5 million from UDA Holdings Bhd.

The land is sited next to the Sheraton Imperial Hotel and behind the Asian Heritage Row.

Mutiara Goodyear executive director Cheang Chee Leong said the deal is pending approval of the Finance Ministry.

"Our current focus is to complete the transaction of the land. The project has a development order since 2005. It would have to be reassessed as the original plan was done in 2003," he said after the company shareholders' meeting here yesterday.

Cheang said Mutiara Goodyear plans to borrow up to RM170 million to fund the deal. "We will borrow about 70 per cent of the RM215.5 million."

On whether Mutiara Good- year plans to diversify, executive chairman Hamidon Abdullah said the company will focus on property development.

Hamidon joined the board of Mutiara Goodyear following the takeover of the company by Atis Corp Bhd.

In September 2010, Atis Corp and wholly-owned subsidiary Atis IDR Ventures Sdn Bhd took over Mutiara Goodyear.

As at April 22 this year, ATIS IDR Ventures Sdn Bhd owned 60.8 per cent of Mutiara Good- year.

At the AGM, shareholders approved the proposed name change to Nadayu Properties Bhd.

This will be formalised in two weeks to better reflect the change of new management and company branding strategy.

Hamidon said the company will launch several projects, mainly residential, worth RM1.3 billion in gross development value by the end of the year.

Among the upcoming launches are Nadayu 28 Sunway, Nadayu 290 Penang and Nadayu Cyberjaya.

Currently, Mutiara owns 347-ha of land, of which 68.4ha is in the Klang Valley, while the balance is in Penang.

By Business Times

GAAM: Japanese interested in Iskandar property

JOHOR BARU: Global Asia Assets (M) Sdn Bhd (GAAM) sees Iskandar Malaysia as offering good prospects to Japanese looking to invest in property development projects outside their home country.

Chief executive officer Fujimura Masanori said the company planned to bring more Japanese investors to invest in the Iskandar Malaysia property market.

He said Johor Baru or Iskandar Malaysia still had ample land for future developments with the prices of properties here still cheaper compared with Kuala Lumpur and Penang.

Fujimura said since setting up its office here last September, about 300 of its Japanese clients had visited Johor Baru and many had shown strong interest to invest in the property market in Iskandar Malaysia.

“They are attracted to Johor Baru's close proximity to Singapore which is a popular destination among Japanese and also the long term prospects of Iskandar Malaysia,'' he told StarBizWeek.

Fujimura said this after signing a memorandum of understanding (MoU) with United Malaysian Land Bhd's subsidiary Seri Alam Properties Sdn Bhd at the Wealth of Iskandar Malaysia Conference recently.

Seri Alam Properties will develop 110 units of bungalows on an 8.09ha site overlooking a lake in Bandar Seri Alam township in Pasir Gudang with a gross development value between RM200mil and RM400mil.

The project is known as Japanese Holiday Homes with each bungalow having a built-up area of 2,200 sq ft and a land size of 4,500 sq ft with its own swimming pool and a club house.

GAAM is a subsidiary of Global Asset Asia Investment Ltd (GAAI), a holding company incorporated in Hong Kong whose clients are mostly high net worth Japanese investors.

“It (the group) has 10,000 cash-rich Japanese clients who are serious investors and always on the look-out to enhance their investment portfolios,'' said Fujimura.

GAAM general manager Takahiro Sakanoue said this was the company's second purchase in the Johor Baru market after the acquisition of two high end luxury condominium blocks of Molek Pine 3, in Taman Molek for RM200mil early this year.

The 28-storey tower block consisting of 212 units and a six-storey block with 36 units, are being developed by Tanjung Bintang Sdn Bhd, which comes under Berinda Group, a property development arm of Kuok Group.

On the bungalows at Seri Alam township, he said it was impossible to get a bungalow of similar size in Tokyo as the city was already densely populated.

Takahiro said a similar bungalow located in the suburbs of Tokyo, about 30 minutes by train to the city centre and minus the lake view, cost a whopping RM37mil each, and a that bungalow in an area about one hour's train ride from the city would sell about RM19mil.

“Our clients love properties in Johor Baru as they are considered bargains for them,'' he said.

Takahiro said Johor Baru was well known to the Japanese after the country's soccer team qualified for the World Cup after beating Iran at Larkin Stadium here in 1997. He said Iskandar Malaysia would also be a good location for Japanese manufacturers planning to relocate their operations elsewhere in view of the natural disasters in Japan, such as earthquakes.

Takahiro said the company would be looking at several options when investing in property projects in Iskandar Malaysia, including having joint-ventures with local partners, buying the properties en bloc or acquiring certain equities in companies. Other than Malaysia, GAAI has similar investments in Canada, China, Cambodia, Europe, Hong Kong, Japan, Macau, Thailand, USA and the Philippines.

By The Star

Potential in Islamic REIT

DH Flinders Ltd, a specialist Asia-Pacific corporate advisory practice that focuses on real estate, financial services and small capital sectors, sees good investment opportunities in Islamic real estate investment trust (REIT) in Malaysia.

Executive director Stephen Hawkins says Malaysia already has a good start in terms of Islamic REIT awareness, having established the guidelines for this type of investment.


Hawkins: ‘Malaysia has syariah guidelines and syariah REIT guidelines, so there’s already a formal structure that provides fund managers and operators a structured environment to work within.’

“Malaysia has syariah guidelines and syariah REIT guidelines, so there's already a formal structure that provides fund managers and operators a structured environment to work within.

“It also provides the regulators with an environment to regulate and investors will be able to see clearly how things will be structured and run in this market,” he tells StarBizWeek.

DH Flinders has offices in Australia and Singapore.

In November 2005, the Government, through the Securities Commission (SC), issued guidelines for Islamic REIT, setting a new global benchmark for the development of Islamic REIT and making Malaysia the first jurisdiction to introduce such guidelines in the industry.

According to Bursa Malaysia website, presently, Malaysia is the only government to establish such guidelines for Islamic REIT.

The guidelines facilitate the creation of a new asset class for investors and provide new opportunities for market players, including fund managers, to further diversify their investment portfolios.

“Malaysia has an advantage over the rest of the region because it has taken the time to put those guidelines in place,” says Hawkins.

On a global level, Hawkins believes that there is a large, untapped market for Islamic REITs. Malaysia, he says, is in a good position to benefit with its established guidelines in place.

“From a Malaysian context, Malaysian people and Malaysian funds are already comfortable with syariah-compliant REITs.

“From an international perspective, there are lots of syariah investors in the Middle East that look to countries like Malaysia that have established guidelines. There's an opportunity to provide more investment products to those investors to give them choice.”

Hawkins notes that by having an established conventional REIT market in Malaysia, both local and foreign investors would be confident in diversifying their investment portfolio into Islamic REIT.

“From a REIT perspective, I see some good opportunities in Malaysia. Investors are already aware of REITs in this country. They've become comfortable with this vehicle in the last five to 10 years.”

According to Bursa, there are 13 REITs being offered in Malaysia now, including two Islamic REITs.

Al-Aqar KPJ REIT is the first Islamic REIT in the world while Al-Hadharah Boustead REIT is the first Islamic plantation REIT.

Both Al-Aqar KPJ REIT and Al-Hadharah Boustead REIT rank among the top-three REITs in Malaysia in terms of dividend yield, according to information on the local bourse's website.

“There are already (Islamic REIT) vehicles out there, but I believe there's a lot more market appetite for this type of products,” Hawkins says.

According to SC guidelines on Islamic REITs, rental incomes are derived from permissible business activities conducted according to syariah principles.

In the case where a portion of the rental is from non-permissible activities, then these rentals shall not exceed 20% of the total turnover of the Islamic REIT.

An Islamic REIT is not permitted to own properties where all the tenants operate non-permissible activities.

With more stringent guidelines (as opposed to) conventional REITs, Islamic REITs usually comprise investments in industrial properties.

This is because industrial properties are the easiest of the property sub-sectors to assess and to ensure that they are syariah-compliant, says Hawkins.

“Most industrial facilities, even if they're multi-tenanted, you kind of know what they're doing and it's easy to asses or judge. But a lot of industrial properties are single tenanted anyway.

“It's harder for a hotel or shopping centre as there's going to be alcohol or gambling activities in this type of property. It's difficult to eliminate this from your tenancy mix. Even from an office point of view, it will be multi-tenanted and it won't be easy to determine what the tenants are doing inside.”

Essentially, properties that are syariah-compliant would need to operate under circumstances where it is not contrary to syariah law. These include gambling activities or the selling of alcohol, tobacco-related products and manufacture or sale of non-halal or related products.

“Fundamentally, industrial properties (tend to be more) compliant with the syariah guidelines,” says Hawkins, adding that industrial properties are capable of generating good and stable yields.

“From my perspective, for the industrial sub-sector, the buildings may not be the trophy assets. They're not going to be the largest office tower or the newest shopping centre in a city.

“But I believe that industrial properties can provide good yields because they have all of (right investment) fundamentals, such as strategic locations and long leases.”

Hawkins also says that the industrial property sector is not subject to huge upswings and downturns experienced by other property sectors.

“In good times, the rents (for industrial properties) may not increase as sharply as other sectors but in a downturn, they are more defensive from a returns and value perspective, and essentially, more resilient.”

Hawkins also believes that industrial property sector is a “proxy for the overall economy.”

“Demand for industrial space is essentially linked to economic activity. Asia is in the middle of a big growth cycle and the world is starting to recognise that Asia is where that growth is, and industrial property is a proxy for that growth.

“As the population grows or economic activity starts to increase, people need more industrial space. It's a good time to be in Asia and Malaysia and a good time for the industrial sector to provide strong returns to investors in a REIT product that is safe and provides solid yield, plus growth.”

By The Star

LBS Bina to buy rest of Astana

LBS Bina Group Bhd's wholly owned unit, LBS Bina Holdings Sdn Bhd (LBSBH), has agreed to buy the remaining 35 per cent stake in its subsidiary, Astana Modal (M) Sdn Bhd (AMMSB), from one of its directors for RM25.8 million.

LBSBH currently holds 65 per cent stake in AMMSB and wants to gain full potential earnings derived from the D'Island Residence project.

It is a self-contained township with an estimated total gross development value of RM2.9 billion.

AMMSB is the joint developer of the D'Island project together with Kumpulan Darul Ehsan Bhd.

By Business Times

AmFIRST plans to grow asset size by a fifth

PETALING JAYA: AmFIRST Real Estate Investment Trust (AmFIRST) hopes to grow its asset size by a fifth annually, predominantly comprising acquisitions of office buildings.

As at March 31, its total asset size stood at RM1.02 billion. The assets are managed by Am ARA REIT Managers Sdn Bhd.



By September this year, it would have grown its asset size by 13 per cent as it completes the purchase of two office buildings in Cyberjaya valued at RM133 million. This will bring total assets under its management to RM1.16 billion.

Yesterday, Mayban Trustees Bhd - on behalf of AmFIRST - signed a deal to buy Prima 9 and Prima 10 office buildings in Cyberjaya for RM72 million and RM61 million respectively from Complete Event Sdn Bhd, confirming a Business Times article.

Complete Event is part of Prima Group of Companies.

Am ARA REIT Managers chief executive officer Lim Yoon Peng said the purchases will contribute gross revenue of RM12.68 million in the first year.

Together the properties have a net property yield of 7.8 per cent and a distribution per unit of 0.68 sen in a year.

"We are hoping to give a marginally higher dividend than 9.75 sen (given) last year (to our unitholders)," Lim told reporters at a press conference.

He added that it would also hinge on whether borrowing costs go up further.

The acquisitions will increase its total net lettable area by 9 per cent to 2.56 million sq ft.

Average occupancy of eight buildings will improve to 88.10 per cent from 83.57 per cent from six buildings.

The latest acquisitions will be financed via borrowings. Accordingly, the group's gearing will reach 45.84 per cent of total assets.

This means that it can still make purchases to the tune of RM92 million without having to raise any funds.

AmFIRST's six properties include Bangunan AmBank Group, Menara AmBank Group and AmBank Group Leadership Centre in Kuala Lumpur.

In Petaling Jaya, it owns Menara Merais, Kelana Brem Towers and The Summit Subang USJ.

By Business Times

Olympia sells Johor land for RM80mil

PETALING JAYA: Olympia Industries Bhd is disposing of 15.25 ha of freehold land in Johor Baru for RM80mil cash to Adawan Development Sdn Bhd in order to reduce its debts.

It told Bursa Malaysia yesterday that the land was acquired in December 1989 and was an unconverted development land zoned for residential and commercial use located about 5km north-east of the Johor Baru city centre.

The group said the land was one of several earmarked assets which had been identified as a significant divestment asset subsequent to the implementation of Olympia Industries' restructuring scheme to meet its obligations under the said scheme.

“The proposed disposal is to comply with the terms of the restructuring scheme, specifically to substantially reduce the debts owing to the primary holders of 2007/2013 six-year irredeemable convertible bonds which are the original lenders under the scheme,'it said.

It added that the consideration for the proposed disposal was a willing-buyer willing-seller basis and based on the valuation carried out by Messrs CH Williams, Talhar & Wong on June 3.

CH Williams, the designated valuer of the lenders had assessed the market value of the land at RM73mil.

By Business Times

Nusajaya on track to come alive in 2012

Kuala Lumpur: Developer UEM Land Holdings Bhd says its Nusajaya township, the key driver of the Iskandar Malaysia emerging economic zone in Johor, is on track to "come alive" in 2012 as targeted.

UEM Land is the master developer of Nusajaya, which is a tenth the size of Iskandar, but the largest integrated urban development in Southeast Asia.



"In 2012, there'll be enough critical mass and completion of projects. Post-2012, a new demand structure will evolve ... and with that, comes better profits," managing director Datuk Wan Abdullah Wan Ibrahim told reporters here yesterday.

Projects that are expected to be completed include the Coastal Highway, which will improve accessibility to Nusajaya. This is expected to be done by the end of this year, ahead of schedule, he said.

Healthcare-wise, there is already Columbia Asia Hospital, while Khazanah Nasional is poised to start on a 350-bed hospital soon.

As for education, Newcastle University Medicine will open this year, and next year, University of Southampton will be completed while Netherlands Maritime Institute of Technology will take on a new campus, Wan Abdullah said.

Theme park Legoland Malaysia will be completed in September next year, while an indoor theme park that is in the advanced stage of construction at Puteri Harbour will be completed by year-end.

As for residential occupancy, there are currently 20,000 homes occupied, which works out to a population equivalent of 100,000, he said.

The ultimate plan is for Nusajaya to have 100,000 homes over time, or a population equivalent of half a million.

Wan Abdullah was speaking at an event to formalise its subsidiary UEM Land Bhd's 55:45 joint venture with Iskandar Harta Holdings Sdn Bhd to develop a mall-and-residence project in Medini, Nusajaya.

The project, known as the Lifestyle Retail Mall and Residences @Medini North, is expected to generate sales of RM850 million.

"This is one of our initiatives to build up a portfolio of recurring income to weather any (property) downcycle," he remarked.

The first phase of the mall is targeted for completion in September next year to coincide with the opening of the Legoland, which is a 200-metre walk away.

Visitors have to go through the mall to get to Legoland, Wan Abdullah said.

The Iskandar project was launched in 2006 to much scepticism about its viability and prospects.

OSK Research, in a report earlier this week after attending a conference that centred on the developments in Iskandar, said it has turned optimistic on its prospects.

"We gather that just like the majority of us, when the entire (Iskandar) project was first launched in 2006, the locals had been sceptical, but have over the years progressively turned more optimistic, especially after witnessing the progress that Iskandar has made to date," it said in the report.

It maintained an "overweight" call on the property sector and said that given the "favourable" outlook for the property market in Iskandar, it had a preference for property developers with sizeable exposure in Iskandar such as UEM Land, SP Setia Bhd and Plenitude Bhd.

By Business Times

UEM, Iskandar in RM850mil Nusajaya development project

Johor project: Wan Abdullah, Iskandar Investment president/CEO Datuk Syed Mohamed Syed Ibrahim and UEM Land Holdings chairman Tan Sri Ahmad Tajuddin Ali discussing the project after the signing ceremony.

KUALA LUMPUR: UEM Land Holdings Bhd, the real estate investment and development company of UEM Group, is collaborating with Iskandar Investment Bhd, the main property developer for Iskandar Malaysia, to develop retail and residential units in Nusajaya, Johor with a gross development value of RM850mil.

Both parties signed a shareholder agreement yesterday through their subsidiaries UEM Land Bhd and Iskandar Harta Holdings Sdn Bhd.

UEM Land Holdings managing director/chief executive officer Datuk Wan Abdullah Wan Ibrahim said a new company called Nusajaya Lifestyle Sdn Bhd had been formed to develop and manage the project.

“UEM Land owns 55% equity interest in that company while the remaining is under Iskandar Harta,” he said at a press conference after the signing ceremony.

Wan Abdullah said the project, known as Lifestyle Retail Mall and Residences @ Medini North, is located in Medini North, Nusajaya on 35 acres which Nusajaya Lifestyle had bought earlier at a cost of RM100mil.

“The entire development will have a total gross floor area (GFA) of 2 million sq ft combining colonnade-style retail outlets, entertainment facilities, shopping mall and service apartments,” he said.

He added that phase 1A of the project, which comprised colonnade-style retail outlet and alfresco dining with GFA of 200,000 sq ft would be completed in September 2012.

“A large-scale quality retail offering is an integral part of any urban development as it will improve the quality of life and boost the demand and value of surrounding properties,” he said.

Wan Abdullah said the overall development of the project was expected to be completed in eight years and the project was part of the group's plan to build up its recurring income portfolio to weather the downside of the market.

By The Star

SP Setia Q2 net profit up 80% on investment property

Profit contributor: SP Setia’s Setia Pearl Island project in Penang

PETALING JAYA: SP Setia Bhd's net profit for the second quarter ended April 30 surged 80% to RM92.22mil from RM51.21mil a year earlier due to a gain arising from the disposal of an investment property.

Revenue for the period increased to RM496.75mil from RM409.07mil a year earlier.

In a note to Bursa Malaysia yesterday, the company said its profit and revenue were principally derived from its property development activities carried out in the Klang Valley, Johor Baru and Penang.

“Ongoing projects which contributed to the group's profit and revenue include Setia Alam and Setia Eco-Park at Shah Alam, Setia Walk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Baru and Setia Pearl Island and Setia Vista in Penang.

“Apart from property development, the group's construction and wood-based manufacturing activities also contributed to the earnings achieved,” it said.

For the six-month period ended April 30, net profit increased to RM154.26mil from RM89.41mil a year earlier while revenue rose to RM1.02bil from RM772.97mil previously. SP Setia also declared a gross interim dividend of five sen per share in respect of the financial year ending Oct 31, 2011.

On prospects for the current financial year, SP Setia said it had continued to set new sales benchmarks, with second-quarter sales of RM671mil and cumulative six-month sales of RM1.41bil.

“This represents the group's strongest ever second-quarter and six-month sales eclipsing the previous highs achieved in the second quarter of the previous financial year (FY10) and six months FY09 by 12% and 17% respectively.”

SP Setia also said total sales of RM1.66bil for the first seven months of the financial year had surpassed the full-year sales achieved in every year of the company's history, except for the RM2.32bil recorded in FY10.

“Based on the strong sales momentum for existing projects and the imminent launch of the group's highly-anticipated KL EcoCity project, the management is very confident that, barring unforeseen external shocks, the group's FY2011 sales target of RM3bil will be met.”

By The Star

i-City looks to tourism for sustainable income

Working together: (From left) Eu, Viacom International Media Networks executive VP Indra Suharjono, Dr Ng, MTV VJ Holly and I-Bhd executive chairman Tan Sri Lim Kim Hong marking their strategic partnership.

KUALA LUMPUR: I-Bhd is looking to create sustainable income sources for i-City by tapping into the tourism market.

Apart from its sole property investment in Shah Alam, the company is looking at opportunities to invest in international events and functions to boost i-City's image locally and globally.

i-City now has about 90,000 visitors each week, of whom 90% are locals.

I-Bhd CEO Datuk Eu Hong Chew said there were plans to push up the number of foreign visitors so that tourism would eventually become a recurring income source for the company even after fully developing i-City.

The company was collaborating with MTV Networks Asia to strengthen i-City's positioning as a family leisure night tourism spot in the Klang Valley, Eu said yesterday in an event to mark the strategic partnership between both companies.

The event was witnessed by Tourism Minister Datuk Seri Dr Ng Yen Yen.

The partnership will see a multitude of activities by MTV as well as Nickelodeon, targeting youths as well as children.

I-Bhd has allocated US$5mil for advertising and promotions with MTV and Nickelodeon from March this year to the next.

“This partnership is a significant investment but it's not so much about the financial investment but time, effort and commitment put into making this work,” he said.



Eu is looking at the partnership from a brand positioning point of view rather than as revenue contribution.

“If we were to promote i-City to various countries, it would need a lot of money so we're leveraging on international events like MTV World Stage,” he said.

“Right now, we want to bridge the gap between content and digital technology at i-City,” he said, noting that the location had attractive visual technology while MTV would have the content to draw the audience.

Under the partnership, i-City will become the host for MTV World Stage Live in Malaysia 2011, an international concert featuring pop stars from abroad and here.

The concert will be held on July 24, with an expected crowd of 50,000.

Eu also said that he looked forward to tie-ins with MTV Networks Asia's parent company, Viacom International Media Networks, for their online games and other entertainment platforms.

According to Eu, the gross development value of i-City will be RM2bil. He revealed that RM200mil had been spent on the project so far, resulting in 20% development of the 72-acre land.

By The Star