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Saturday, November 19, 2011

Building with responsibility to the environment

On Oct 31 the world's population surpassed the seven-billion mark. We have reached a significant milestone, but there was no cause for celebration.

As the population grows, so does the need for more food and shelter. This will put more pressure on available resources. It is only by adopting a culture of sustainability that we can ensure the future of our children is not compromised.

Just like in any other industry, the building sector will have to adopt new approaches that take into consideration the need to protect the environment and ensure sustainable development.

I am pleased to note that builders are already taking the first steps in that direction. The industry is already taking a serious view of “green building”. The term refers to an environmentally-responsible process that covers the entire life-cycle of a building, from siting, design, construction, operation and maintenance to renovation and even demolition.

Similar steps are being taken by builders in Malaysia. Efforts made by industry players, who have become more conscious of the need for sustainable development, have helped to put in place various guidelines to ensure new properties are developed using a more environmentally-friendly process.

For the industry, there is the Green Building Index (GBI), which was introduced in 2009 to assess and accredit a development along sustainable or “green” criteria. The Government had, in its Budget 2010, even given priority to the procurement of goods and services that are environmentally friendly.

One of the most pertinent objectives of the GBI environmental rating system is to transform the built environment to reduce its impact on its surroundings. Its other objectives include ensuring that new buildings remain relevant in the future and existing buildings are refurbished and upgraded properly to remain relevant.

Under the GBI, buildings are rated based on six criteria energy efficiency, indoor environment quality, sustainable site planning and management, materials and resources, water efficiency as well as innovation.

More recently, the government has taken this initiative another step further by requiring that builders of commercial buildings now ensure that their projects meet GBI standards.

At the same time, owners of bungalow and semi-detached residential units are required to put in place a system for harvesting rain water.

These are baby steps, yet, but they certainly show that there now is a desire in the industry as well as the government to ensure a more sustainable future for the benefit of the next generation.

The bottom line is that whatever we build now to provide a roof over our heads, it must not only not have a negative impact on the environment, it must also be able to enhance our surroundings and ensure we have a better quality of life.

While the environmental benefits of such efforts may not be immediately visible, they can also have a positive effect on corporate image, as well as the rental and resale value of buildings.

The BGI is based on Singapore's Building and Construction Authority (BCA) Green Mark that incorporates internationally recognised best practices in environmental design and performance. Among the benefits of the BCA Green Mark are reduction in water and energy bills, reduction in potential environmental impact, improvement of indoor environmental quality for a healthy and productive workplace and clear direction for continual improvement.

However, like most things, efforts towards sustainable development come at a cost. In some areas, the additional cost may be low enough to be manageable, but in other areas, it may seem exceedingly high.

For instance, an apartment designed with large doors and windows will be more airy and thus require less energy to keep its interior cool. At the same time, it will not require a hefty increase in costs.

However, in other areas, ensuring sustainability could add substantially to the cost of development. For instance, builders could ensure that production methods of the materials used in their projects are also environmentally friendly. But that would entail verifying the entire supply chain for sustainability, and that may turn out to be a costly exercise.

At the same time, the returns from such efforts may still not be attractive enough for many of us. It has been estimated that even the most basic efforts at ensuring sustainability could add 5% to 6% to the building cost. In some cases, the cost could rise by up to 15%.

Even if such efforts eventually result in savings in energy use, it could take 15 to 20 years before such savings actually begin to offset the additional costs that have to be incurred initially. And that is only the ringgit and sen part of it.

There are other costs too. To illustrate, let us take a look at the compact fluorescent bulb or “green” bulb. It uses 75% less energy than a traditional incandescent bulb but it also contains mercury that, if not disposed of properly, could cause contamination in the environment.

Builders will be hard-pressed to keep costs down and ensure sustainability in the procurement of raw materials and construction process at the same time. It, after all, does not make good business sense to build something that people are not prepared to pay for.

One would be tempted to argue for a balance between sustainability efforts and managing the costs. Strictly speaking, that would mean compromising on the need to ensure sustainability so we can save some money, and that's certainly not a long-term solution.

Perhaps a more comprehensive and concerted joint effort by the industry and government could be a start.

Teh Lip Kim is the MD of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcomed. Send by email to md@sdb.com.my.

By The Star

A more balanced development helps

The Klang Valley has grown tremendously in many fronts, both organically from a natural increase in the local population, inter-state migration, and more robust economic and development activities.

There is also a higher influx of foreigners to our shores in the last one to two years.

Looking at the rapid pace of change and development around us, I believe the gravitational centre of the Klang Valley needs to be shifted from the present mostly developed and rather congested cities, especially Kuala Lumpur and Petaling Jaya, to more well spaced out and uncrowded areas.

With quite a number of high impact and transformational projects in the pipeline for implementation, the availability of land will be able to accommodate the big infrastructure and development projects without having to encroach into our present living landscape.

One of the ways this can be done is by ensuring that high impact development projects that have the potential to spawn new economic activities and attract people to set up homes and businesses should be spread out to corridors which are still relatively untapped and inhibited.

As we know the ongoing development of new infrastructure and property projects is mainly concentrated in the central and southern corridors that include Kuala Lumpur, Petaling Jaya, Puchong, Cyberjaya, Putrajaya, right down to Nilai in Negri Sembilan. The western corridor towards the Port Klang area is also seeing greater growth and development.

Meanwhile the northern and eastern corridors are still relatively untapped and efforts should be expended to bring more “enabling” projects to those parts of the Klang Valley.

Unlike some countries where land is a rare commodity, Malaysia is blessed with vast tracts of land that are suitable for development, and the question that has been asked many times is this: Why is there land shortage as well as inflated land cost and property prices in the country then?

Rightly speaking, there should not be any land or property shortage if more land is opened up for development and developers continue to launch township products that include landed properties that are in short supply.

Many of us must have noticed that the number of new greenfield township projects has quite suddenly grounded to a halt in the past three years, as most developers have shifted their focus to building small niche projects instead.

In a way, this has tremendously reduced the supply of property, especially landed housing units, over the past two years.

One of the plausible ways to address the current land and property shortage is to “plant the seeds of development” by spreading out some of the high impact government projects in the undeveloped corridors as catalyst of change and development.

Infrastructure projects such as new highways, and good public transport system such as the mass rapid transit or bullet train project, are some of the initiatives that can spawn wider growth corridors.

Besides the natural “organic” pace of development, efforts to expedite the development process of the cities in the Klang Valley include high impact infrastructure projects, such as the My Rapid Transit (MRT) project.

The MRT is one of the biggest infrastructure projects that has been planned for the country to act as the backbone of the Klang Valley's public transport system.

To ensure that it serves its purpose well into decades to come, it is imperative for the project planners to plan the project not just to cater to the needs of the present population but more importantly, the needs of the growing Klang Valley populace in many years to come.

The question is whether it should just concentrate on the well populated and busy areas or that is should also ply the other sparsely populated areas.

Instead of building most of the rail tracks and stations in the “already occupied” and developed parts of the city, I believe the MRT should also traverse through the less occupied corridors of the Klang Valley to spread development there.

That way it will have more greenfield land and flexibility to master plan for a more holistic and integrated MRT network, with the necessary ancillary supporting structures such as the terminals and car parks, to promote a higher use of the public transport system.

Although in terms of capacity, it may be under utilise initially, its usage is bound to pick up steam once more economic activities start to take shape and the population starts to grow.

When demand increases, new land will bound to be opened and developers will find it feasible to undertake big township projects again. With higher supply, prices will also be back to its lower equilibrium.

Deputy news editor Angie Ng has an advice for those who have misgivings of not having more: Count our blessings and reach out to help the less fortunate.

By The Star

Friday, November 18, 2011

Retail project promises unique building design


Thinking green: Lava boasts three-levels of ground floor with a multi-purpose atrium area and naturally ventilated courtyard plazas.

The Tempo Properties Sdn Bhd unveiled Lava recently, a retail project that is part of The Atmosphere commercial development in Seri Kembangan.

It recently won the regional award at the Asia Pacific Property Awards for best-mix used development in 2011.

Lava features three levels of ground floor with a multi-purpose atrium area and naturally ventilated courtyard plazas.

Its modern architectural façade incorporates minimalist features using predominantly brick-and-mortar, glass and steel elements as well as a lush courtyard and garden space, which provides an innovative urban landscape.

The units are priced from RM783,000 onwards and are targeted to be completed by the third quarter of 2013.

Tempo Properties Sdn Bhd chief executive officer Khoo Boo Hian said the project was an integrated development comprising various commercial and retail spaces where the Lava was an essential layer.

“It complements our vision to build a commercial hub under-one-roof in the south Klang Valley that will cater to every lifestyle need through its varied retail mix. As this area currently lacks a one-stop commercial facility, we feel that Lava will fill the gap in the market for an integrated development of this nature,” he said.

The Lava is architecturally conceptualised and designed with the best “green” practices in mind, such as its lush, landscaped courtyard garden and energy-efficient features of the building’s roof canopy construction.

The roof canopy employs the use of high-grade moisture-resistant ceiling boards and polycarbonate sheets over roof openings to enhance natural ventilation.

“Our award-winning, environmentally-responsible development will promise high rental yields, as the building concept and design is unique to the Malaysian commercial property market,” said Khoo.

Formed in 1995 in Seremban, Tempo Properties’ portfolio encompasses projects like Taman Cengal Utama, Taman Prima Tropika, and Medan Suria.

For information on Tempo Properties Sdn Bhd, visit www.tempo.com.my

By The Star

Complete and ready to move in


Luxurious: The Urbana link bungalow units.

If exclusivity is what you are seeking, then check out Hap Seng Land Sdn Bhd’s (Hap Seng) latest offerings at its D’Alpinia in Puchong.

A selection of bungalow units and link-bungalow homes are available under the build-then-sell concept.

The project is located within the Puchong, Seri Kembangan and Putrajaya townships and has direct access to the Lebuhraya Damansara Puchong (LDP).

The development features modern architecture, spacious areas and amenities that are essential to any modern urban home.

It also includes a perimeter jogging track, premium interior features and comprehensive security systems.

All homes will also be TM Unifi-ready. During a media preview of the development, Hap Seng chief executive (property division) said the build-and-sell concept allowed prospective owners to experience his or her property almost in its entirety before buying it.

“It also provides a potential home owner with invaluable peace of mind. One does not have to worry about unfinished developments by unscrupulous developers,” he added.

The project comprised 26 units of 2½-storey bungalow homes with a built-in area of 4,749 sq ft to 5,845 sq ft and 38 units of 2 and 2½-storey link bungalow homes with a built-in area of 3,489 sq ft to 4,168 sq ft.

The bungalow homes, which start from RM2.1mil feature large glass windows and generous garden exteriors.

The link bungalow homes, which start from RM1.5mil offer wide entranceways and generous balcony areas.

Some of the special features include built-in solar heater, water filtering system, alarm system and auto-gate, air-conditioning for living room, dining, family area and all bedrooms, bathroom accessories and shower screen as well as built-in kitchen cabinets with hood, hob and oven.

Each home also comes with anti-termite treatment that has a five-year warranty.

At the same time, residents can also enjoy its gardens with a dedicated children’s playground area with peace of mind.

Ng said that when they first introduced the first selection of homes in Phase 1A in 2009, the average price of a 22 x 75 sq ft two-storey terrace home was around RM440,000.

“Today the same home is fetching RM620,000. All in all, the development has seen a 20% appreciation on average,” he said.

For details, visit www.hapsengland.com or call 010-433 3038.

You can also email info@hapsenghomes.com.my

By The Star

Fortune award for SP Setia

Developer picked as winner in Top Companies for Leaders 2011 Study

PETALING JAYA: Property developer SP Setia Bhd was recently picked by human capital consultant Aon Hewitt as a winner in the Top Companies for Leaders 2011 Study due to the company's strong talent management and success in building a global brand.

This study was jointly conducted by Fortune magazine, Aon Hewitt and human resource specialist RBL Group, and was open to public, private and non-profit organisations from around the world. The results of the study and an accompanying story will be published in Fortune's Nov 21 issue.

SP Setia was one of three Malaysian companies that participated in the study, and among five from South-East Asia. SP Setia was declared a winner and ranked 13th in the Asia Pacific Top 20 list out of 154 companies from the region. A total of 476 companies from around the world took part in the study.


Liew: ‘Team Setia has truly done us proud yet again.’

SP Setia president-cum-chief executive officer Tan Sri Liew Kee Sin said in an e-mail reply to StarBiz that one of the main reasons for the company's inclusion on the list was the level of commitment and engagement demonstrated by the staff at all levels.

He said this had enabled the company to achieve great results year after year in terms of sales, financial performance, awards and social responsibility.

“The Fortune article mentioned that you can't build a great business without nurturing great talent. I could not agree more and I'm truly delighted for SP Setia to be included in the company of global greats such as IBM, General Electric, Intel, McKinsey, China Vanke and Wipro, to name but a few.

“Team Setia has truly done us proud yet again and although we still have much to learn, this recognition will really spur us on to be even better than before,” Liew added.

He noted that although Malaysia had a brain drain problem, there was still talent waiting to be discovered. “We cannot try to hire ready-made talent all the time. We take the approach that if our people have the willingness and capacity to learn, we'll train and groom them to be the best they can be,” Liew said.

He said that since no one was perfect, it was also fortunate that everyone did not have the same strengths and weaknesses. “The key is to blend people with different abilities together so that one person's strength covers another's area of weakness and vice-versa. That way, as a team, we are much stronger than we are as individuals,” Liew explained.

Meanwhile, Aon Hewitt leadership consulting practice lead for South-East Asia, Hari Abburi, said the developer stood out for building a successful brand of Malaysian leaders that were global in outlook as well as having leadership focus at all levels, resulting in strong leadership pipeline for future growth.

He said the universal aspect of such companies was robust leadership development processes and practices across all levels of the organisation, with these practices being institutionalised over a long period of time.

“The Top Companies for Leaders are strong on business sustainability as an outcome of these leadership practices. These companies are seen to be strong brands because of the well-developed and institutionalised leadership practices,” Abburi added.

By The Star

Office suites with all the perks


New lifestyle: Ahamad (right) with company executive director Calvin KH Loh and director Chuah Swee Guan posing in front of the model.

Centro Shah Alam is set to offer a new dimension to the city’s business district once the project is completed by the end of 2013.

The project located at the heart of Shah Alam at Section 14 — not too far away from Wisma MBSA — is the first of its kind in Selangor’s capital city.

It comes with the first duplex-flexi office suites with recreational and business facilities.

SCP Property Services Sdn Bhd director Ahamad Latib said the company had came up with an unique concept and expected to attract young entrepreneurs.

Through the project, they wanted to place all the business community under one roof.

“We are providing a centralised venue to house the business people who are currently operating from shophouses in various parts of the city.

“Centro’s office suites with hotel-style ambience are the unique selling point,” he said in an interview recently.

He added that the office comes with an elevated level that could be used as an office for a superior or even a multi-purpose room.

Ahamad said the 20-storey project worth RM120mil was located in a strategic place surrounded by government offices, hotels and shopping malls.

He added that the project was also accessible via the KL-Klang Federal Highway, SPRINT and Lebuhraya Kemuning Shah Alam (LKSA).

Ahamad said 14 floors of the building would be filled with the duplex-flexi offices.

He said the built-up size of the offices were between 775 and 1,388sqft and the units were priced from RM375,000.

“We are offering affordable office spaces in a luxurious environment so entrepreneurs can operate their businesses in a classy and conducive place,’’ he said, adding there were a total of 245 office premises at the project.

Ahamad said a common business centre was available on the fifth floor where office or business meetings could be held.

He said a swimming pool and gymnasium would also be housed on the floor.

“There will be three levels of elevated parking facilities for the benefit of the office owners who are entitled to a designated free parking bay each,’’ he said, adding that visitors would not be provided access to these parking areas.

Ahamad said the first and the second floors would be housed with 15 retail premises comprising food outlets and financial institutions.

He said a carpark with 600 bays would be provided outside the building for visitors.

“Work on the project has started,’’ he said.

By The Star

Temasek, Khazanah said to be seeking S$5b property loans

SINGAPORE Temasek Holdings Pte Ltd and Khazanah Nasional Bhd, the state-owned investment companies of Singapore and Malaysia, hired banks to arrange S$5 billion (RM12.2 billion) of property development loans, according to two people familiar with the matter.

At least nine lenders will contribute to the five-year bullet facility, which will pay a so-called all-in fee of 100 basis points over benchmark rates, one of the people said on Wednesday

Khazanah and Temasek said in June they would jointly develop US$9.8 billion of projects in southern Malaysia and Singapore. Some S$11 billion of Singapore developments will include hotels, apartments, offices and shops in 501,020 square meters of space in two main areas of the city's downtown. The RM3 billion of projects in Malaysia's Iskandar region will have homes, retail space and "wellness-related offerings," the companies said.

"The outlook for Singapore right now is looking a little soft because it's an open economy and exposed to what's going on in Europe," Euben Paracuelles, a Singapore-based economist at Nomura Holdings Inc, said in a phone interview on Wednesday. "A deeper relationship with Malaysia could result in a few extra percentage points of growth over the next five years."

Serena Khoo, a spokeswoman for Temasek, declined to comment. Mohd Asuki Abas, a Khazanah spokesman, declined to comment.

The property agreement between Khazanah and Temasek earlier this year came as Malaysia agreed to move its railway station in the city-state's central business district to a northern Singapore site close to a bridge that connects the two countries, ending a decade-old dispute over land usage.

The joint venture for the Singapore developments, M+S Pte, will be 60 per cent owned by Khazanah and 40 per cent by Temasek.

The Malaysian project will be run through a 50-50 venture.

Banks arranging the Khazanah and Temasek loans include DBS Group Holdings Ltd, HSBC Holdings plc, Oversea-Chinese Banking Corp, Malayan Banking Bhd, Bank of Tokyo-Mitsubishi UFJ Ltd, Standard Chartered plc, Sumitomo Mitsui Banking Corp and United Overseas Bank Ltd, one of the people said. Australia & New Zealand Banking Group Ltd is also joining the group, a person familiar with its plans said yesterday.

Syndicated loans in Singapore this year are the highest on record with S$33.9 billion of facilities signed since December, according to data compiled by Bloomberg. Loans totalled S$20.9 billion for the whole of 2010, according to the figures, which go back to 1999. DBS has arranged the most loans this year, followed by OCBC and HSBC.

By Business Times

BRDB denies rumours it has called off disposal of prime assets

PETALING JAYA: Bandar Raya Developments Bhd (BRDB) is still deliberating the sale of its prime assets and denied that it had called off the deal, the company said in an emailed reply to StarBiz.

BRDB was asked by StarBiz to comment on rumours that it was going to call off the sale. “The matter is still being deliberated by our board of directors. We will make an appropriate announcement once details have been confirmed,” a company official said in the email.

Industry players have also said that no appointment had been made yet by BRDB of any independent international property valuation firm to manage the tender for the sale, something that the company said it would do. BRDB didn't reply to a previous question on this issue.

BRDB had first said in September that it had accepted an offer (subject to shareholders' approval) by major shareholder Ambang Sehati Sdn Bhd to buy its main assets, comprising the Bangsar Shopping Centre (BSC), Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for RM914mil.

Following the proposed disposal, the board had intended to pay a special dividend of 80 sen net per share, or RM390mil. The deal would have seen BRDB netting RM430mil in cash and the repayment of RM430mil in borrowings and dividends from BR Property to BRDB.

Ambang Sehati, which owns 18.8% in BRDB, is a private vehicle of Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, who is chairman of the property firm.

However, since then, there had been calls for BRDB to dispose of the assets via a tender to get a better price and appease disgruntled shareholders, to which the property firm had agreed.

The Minority Shareholder Watchdog Group has commented that the open tender and appointment of an independent international property valuation firm would “allow time and independence as well as professionalism to this exercise, which is positive in terms of governance.”

An analyst said it would bode well for BRDB if it were to call off the sale as its assets had growth potential.

“The Bangsar Shopping Centre has stood the test of time and continues to generate stable recurring income. It is also situated in a strategic location and is popular among expatriates and discerning shoppers,” he said.

AmResearch, in its report after the announcement of the sale, estimated the four properties will contribute between 20% and 25% to BRDB's earnings before interest and tax in 2012 and 2013.

On a separate note, an industry source said BRDB is bidding for the proposed development of 20 acres of prime land in Bangsar that used to house Lever Brothers' soap and margarine manufacturing plant.

The land had been left unoccupied since Unilever Malaysia moved out in 2003.

By The Star

Thursday, November 17, 2011

RM460mil KL Eco City project to be funded by three Islamic financial institutions


Sustainable city living: (From left) Liew, Ahmad Fuad, Raja Nong Chik and SP Setia deputy president and COO Datuk Voon Tin Yow taking a look at the scaled down model of the mixed development project.

PROPERTY developer SP Setia Berhad, officially launched its KL Eco City project recently with a signing ceremony for a RM460mil syndicated Islamic financing facility provided by three Islamic financial institutions, namely HSBC Amanah Malaysia Berhad, Hong Leong Islamic Bank Berhad and Bank Muamalat Malaysia Berhad.

The syndicated financing facility marks the next step for the developer in realising its vision for KL Eco City which is a joint venture project between SP Setia and Kuala Lumpur City Hall (DBKL). The privatisation agreement with DBKL was inked on Oct 24.

President and chief executive officer of SP Setia Tan Sri Liew Kee Sin said with all the required funding in place, KL Eco City was ready to take off and targeted to become the new iconic landmark exemplifying sustainable city living in Kuala Lumpur.

KL Eco City is an integrated mixed development comprising commercial and residential components situated on a 24-acre site along Jalan Bangsar just opposite Mid Valley City.

Liew said KL Eco City would transform the former Kampung Haji Abdullah Hukum site into an inner city haven comprising residential towers, serviced apartments, offices and a retail podium which will embody the group’s core development philosophy of — Live Learn Work Play in an urban setting.

The project is expected to take 10 years to complete and aims to be the country’s first integrated Green development targeting both the Malaysian Green Building Index (GBI) and US-based Leadership in Energy and Environmental Design (LEED) certifications.

Connectivity wise, the group is investing over RM150mil to link KL Eco City to all major highways. There will also be a pedestrian link bridge across Sungai Klang to connect the development to Mid Valley City.

Liew also shared that a new KTM Komuter station would be built and integrated with the existing Abdullah Hukum LRT station. The developer has also made provisions for an underground station for the proposed MRT line. “This will make KL Eco City a unique 3-in-1 public rail transport hub and the first of its kind in the city,” Liew added.

He said the group’s hard work and perseverance over more than a decade to secure this prime redevelopment site had truly paid off.

Phase 1 of the project comprising strata and boutique offices has been tremendously well received with most units taken-up even before its official launch.

Liew expressed his sincere appreciation to both KL Eco City’s customers for their faith in the project and also to the banks for extending the syndicated financing by saying: “We are thankful for your confidence in the group and look forward to your continued support.”

HSBC Amanah was represented by its chief executive officer Rafe Haneef while Hong Leong Bank Berhad was represented by its Group Business Banking chief operating officer Peter Chow. Representing Bank Muamalat was its deputy chief executive officer Musa Abdul Malik.

The guest of honour at the event was Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Datuk Raja Zainal Abidin, who was accompanied by Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail.

Raja Nong Chik said KL Eco City was a great milestone for both SP Setia and DBKL as it was a strategic and synergistic public-private sector partnership to realise the government’s mission to transform Kuala Lumpur into a great modern city, as stipulated in the Greater Kuala Lumpur/Klang Valley roadmap.

By The Star

Shortlisted Bangsar developers to be revealed next month

PETALING JAYA: The names of developers shortlisted to undertake the development of the 20 acres of prime land in Bangsar are expected to be revealed next month.

Permodalan Hartanah Bumiputera (PHB), which owns the land, is believed to be still in the process of shortlisting the candidates based on their project submissions.

Six to eight developers are said to have submitted bids to tender for the development earlier this year.

The candidates have so far made two rounds of presentation on their proposed development plans to the PHB board and independent consultants.

The criteria will be based on potential yields, project concept and design and traffic dispersal system, among others.

The land, formerly a famous landmark housing Lever Brothers' soap and margarine manufacturing plant, has been left unoccupied since Unilever Malaysia moved out in 2003.

Lever Brothers started operations there in 1947 and it was reputed to be the largest factory in the country then; providing jobs for hundreds of Malaysians.

Lever Brothers changed its name to Unilever Holdings Sdn Bhd in 1994. Since moving out, it has been operating at Menara TM in Jalan Pantai Baru, Kuala Lumpur. It also has a food factory in Rawang producing dressings, spreads, seasonings and sauces.

Since it was vacated, a number of developers had expressed interest in the land and were negotiating for a fair value for it.

Industry observers said the land's location was very strategic and would be ideal for an integrated commercial cum residential development.

The land previously belonged to the Railway Asset Corp and came under the ownership of PHB earlier this year.

It is understood that 30% to 40% of the development ratio would comprise residential units, and the rest would be office blocks, a hotel, shopping mall, and shop lots.

The plot ratio will be between six and eight times, and the project is expected to generate a gross development value of RM4bil-RM5bil.

A property valuer said the land could fetch between RM250 and RM300 per sq ft and should be worth between RM250mil and RM300mil.

By The Star

Special policy to assist people to own homes

SELANGOR is setting up a special policy for land development in order to assist residents to own a home.

In a reply to a question by Dr Shafie Abu Bakar (PAS-Bangi) who asked how the state was assisting residents to own a home and the areas identified for such homes, housing, building management and squatters committee chairman Iskandar Abdul Samad said those with land development of over 4.046ha in the Klang Valley would be subjected to 20% of low- cost houses, 20% medium-low cost houses and 10% medium-cost houses.

He added that development on less than 4.046ha of land would be subjected to build 30% medium cost houses.

Over and above this, Iskandar added that the maximum selling price of an affordable home (rumah mampu milik) would also be fixed accordingly.

For instance, low-cost houses within the local council area in the Klang Valley will be priced at RM42,000 while those within the local district area will be priced at RM60,000 and those on the outskirts are priced at RM30,000.

“The state has also introduced the ‘Selangor Affordable Homes New Concept’ programme which allows those with low income to own a comfortable home,” he said.

From 2005 to 2010 Selangor projected that it needs to have at least 435,775 homes in various types to accommodate some 7.3 million residents back then.

In line with the new scheme — targetted at low-income earners — the state is expected to build at least 10,000 homes through PKNS.

Five areas have been selected for the project next year — Bandar Baru Bangi in Hulu Langat, Antara Gapi in Hulu Selangor, Kota Puteri in Kuala Selangor, Kampung Seri Temenggong in Gombak and Taman Sains Selangor 2 in Sepang — which will see a total of 1,452 homes built.

By The Star

PKNS told to address concerns and resubmit application

The Petaling Jaya City Council (MBPJ) wants PKNS to prove that its plan to redevelop the sports complex in SS7, Petaling Jaya, is sensitive to its surrounding and residents before the council can consider their application.

“The application has not been tabled at the OSC (One-Stop Centre). The public hearing was held last week and they will need to prove that the residents’ concerns raised during the session have been addressed when they re-submit their application,” said mayor Datuk Mohamad Roslan Sakiman.

He said the developer would need to show that all issues arising from traffic, land use and high density had been considered and rectified.

MBPJ councillor Derek Fernandez said they applied for a plot ratio of six which is legally impossible to give because the maximum allowable plot ratio for that area under optimum conditions was four, according to the gazetted local plan.

“Besides, they are applying for apartments when the land title is commercial. They should apply for service apartments instead.

Derek said if PKNS resubmitted their application, a public hearing would be called again to allow the residents to make comments especially in relation to the major issue of traffic congestion and lower quality of life.

SS7 neighbourhood action committee chairman, Datuk Zul Mukhshar Md Shaari said he doubted that PKNS would withdraw their application as Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim had mentioned that the land’s high value could earn PKNS a profit to be invested into other social projects like building affordable homes.

Selangor MCA Public Complaints Bureau chief Datuk Theng Book said the state government must ensure that the project would benefit the people, especially the middle income group.

“The developer may be asked to reduce the density but we still want the project to benefit the middle- income group that struggles to have their own house, or keep the area green.”

Seri Setia assemblyman Nik Nazmi Nik Ahmad said if the plan to redevelop the sport complex stayed, PKNS should start over with a clean slate.

“I hope the state government and PKNS will hold a townhall meeting with the residents before they resubmit the plan,” he said.

The 30-year-old PKNS sports complex which has a field, six tennis courts and a clubhouse was planned to be redeveloped into a mixed-development project comprising seven 35-storey apartment blocks and two 10-storey office blocks and a 15-storey business block.

The development on the 7.6ha site, a joint venture between Melati Ehsan Holdings Bhd and PKNS, is expected to cost more than RM1bil.

PKNS stands to pocket some RM384mil, or 70% of the total projected gross profits from the actual sales value of the development over a period of eight years ending December 2019. The developer, Melati Ehsan, will also pocket a profit from the sales of whatever it builds on the site.

By The Star

Protest a last resort for low-cost house buyers

About 50 buyers of the stalled low-cost flat project in Petaling Jaya Selatan (PJS) staged a protest outside the Selangor state secretariat building recently demanding a solution to their problem.

The group, led by action committee chairman Sugumaran S. Muniandy and Parti Sosialis Malaysia national treasurer A. Sivarajan, insisted on handing over a memorandum to Mentri Besar Tan Sri Abdul Khalid Ibrahim.

They held placards that read, Mana rumah kami (Where are our houses), Tan Sri kami harapkan jawapan kepada masalah kita (Tan Sri, we are hoping for a solution to our problem) and Tunaikan tuntutan kami (Fulfil our demands).

Sugumaran said 276 people bought the Block E low-cost flats in 2003 but the development never materialised.

Some of them paid 10% down payment of either RM3,500 or RM4,200 while the rest took a 100% loan from banks.

The latter had to pay about RM30 per month as loan interests.

“Some of the buyers lived in squatter areas previously. They are now staying in PPR units in Lembah Subang, longhouses in PJS 1 or renting houses on their own.

“Those living in the longhouses suffer from floods which occur three times within five months. The drains in the area are clogged too but the Petaling Jaya City Council didn’t help us to solve the problems,” he said.

A buyer, Paisah Deraman @ Abdul Rahman was served a bank notice in October last year, urging her to pay a sum of about RM15,000 for the loan she took.

“The developer didn’t build the project and yet we have to settle the loan,” she said.

Another buyer, Zainab Mat Yaman, 40, said they just wanted their own house.

S. Kumaran, 36, was worried about applying for loan should the project revived later.

“My wife, who was eligible to apply for loan back then, has stopped working now. How are we going to apply for loan?

“The condition of PPR Lembah Subang isn’t perfect. Only one out of the three lifts are working. It is especially troublesome for us since we live on the 13th floor,” he said.

Sugumaran said the buyers had a meeting with Khalid on June 16 and he promised to settle the problem within four days after discussing with the developer.

“However, five months later and we still haven’t received any news from Khalid.

“We followed up with letters on Aug 19, Sept 26 and Nov 8 but to no avail. In our last letter, we told him we would be here if we still didn’t hear from him,” he said.

He added that Khalid also verbally promised to let the affected buyers purchase the 800 sq ft affordable homes costing RM35,000.

State Housing, Building Maintenance and Squatters Committee chairman Iskandar Abdul Samad came out of the state assembly to meet them at 11.15am but the buyers insisted that Khalid should be the one receiving the memorandum.

Iskandar then told them he would relay their message to the Mentri Besar, and the committee made up of 12 buyers would be allowed inside the building later to see Khalid.

At about 1pm, the buyers were still outside the gate of the state secretariat building, chanting, Turun, turun, MB turun. (Come down, come down, MB come down).

Finally, they were let in at about 2pm and Khalid, who received the memorandum, promised to come out with a solution within a week.

By The Star

Wednesday, November 16, 2011

SP Setia to kick-start RM6b project early 2012


SP Setia Bhd will kick-start the first phase of the RM6 billion KL Eco City project by as early as next year.

The first involves the building of RM2 billion worth of high-rise residential units.

The company's plan for the project received a boost after it managed to secure RM460 million financing facilities.

"We have started works. We are doing soil testing, piling works and so forth," SP Setia president and chief executive officer Tan Sri Liew Kee Sin said.

The project, which has a total gross development value of RM6 billion, is expected to take 10 years to complete. The first phase will take about three to four years.

It is a joint-venture project between SP Setia and Kuala Lumpur City Hall.

"The KL Eco City will be our biggest property project in Kuala Lumpur," Liew said at a media briefing after the signing ceremony for the syndicated Islamic financing facility and launch of KL Eco City yesterday.

Also present at the launch was the Minister of Federal Territories & Urban Wellbeing Datuk Raja Nong Chik Raja Zainal Abidin.

The facility is provided by three Islamic financial institutions, namely HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Muamalat Malaysia Bhd.

Although the development of the property may raise concerns of oversupply of high-rise residential properties, analysts remain optimistic that the project will have a good start.

"There will be demand for the property ... the location is very strategic. I believe the only concern buyers may have is traffic congestion on that area, even that, I believe works are being done to address it," said Mercury Securities head of research Edmund Tham.

SP Setia will be investing more than RM150 million to build dedicated interchanges to directly link KL Eco City to all major expressways coupled with an internal two-tier road system.

"It's also part of our commitment to solve the traffic problems first, so that by the time phase one is ready, traffic problem of that area will be resolved already," said Liew.

Meanwhile, Liew said SP Setia is waiting for the offer documents from Permodalan Nasional Bhd (PNB) for its shareholders to decide whether to sell their shares to the country's biggest fund manager.

He ruled out the possibility that SP Setia would convene an extraordinary general meeting to discuss the PNB takeover bid as reported in a newspaper.

"There will be no such meeting. It's all lies. It's in the shareholders' hands whether to sell or not to sell (their shares)," he added.

By Business Times

SP Setia looking forward to PNB’s offer

KUALA LUMPUR: SP Setia Bhd Group is awaiting offer documents from Permodalan Nasional Bhd (PNB) for its shareholders to decide whether to sell their shares to the country's biggest fund manager.

President and chief executive officer Tan Sri Liew Kee Sin said sentiments aside, his company was still positive on the bid to increase PNB's stake in SP Setia.

“On the positive side, the company was very proud that a national and the largest fund manager is prepared to increase its interests in SP Setia and also boost the company's value.

“If SP Setia is not good, an entity such as PNB will not come forward to invest more.“Whatever it is, we must still wait for the official offer documents to come out,” he told reporters after the launching of KL Eco City project by Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Raja Zainal Abidin yesterday.

Liew said the acquisition process was long and complicated, but the official offer documents should come soon, maybe by year-end, subject to PNB's convenience.

Asked whether he would helm the management after PNB held majority shares in SP Setia, Liew said he would if asked to.

“However, until this moment, our (SP Setia and PNB) relationship is very good,” he said.

Liew also ruled out SP Setia would convene an extraordinary general meeting to discuss the PNB takeover bid as reported in a newspaper.

“There will be no such meeting. It's all lies. It's in the shareholders' hands whether to sell or not to sell (their shares),” he added.

By Bernama

IJM brings RM5bil iconic waterfront project to Hong Kong

HONG KONG: IJM Land Bhd's RM5 billion iconic waterfront project in Penang, known as "The Light," is up for grabs at the ongoing MIPIM Asia 2011, the world's premier real estate exhibition and conference, at the Hong Kong Convention and Exhibition Centre.

Located just off the Penang Bridge on the island's eastern coastline, The Light is an integrated project comprising commercial and residential components.

Its chief executive officer and managing director Datuk Soam Heng Choon said: "We are bringing it up to Hong Kong (at MIPIM Asia) where there are more international investors who are looking at it.

"The residential component is on 16.8ha (42 acres) reclaimed land which we launched in 2009. Currently, we've launched four parcels of the residential projects.

"We already commenced reclamation for the commercial projects. We are now ready to go into the market to look for investors," he told BERNAMA on the sidelines of MIPIM Asia 2011, here.

MIPIM Asia 2011, which began yesterday, was opened by Hong Kong's secretary for development, Carrie Lam Cheng Yuet-ngor.

The three-day event will end tomorrow.

In the commercial component, Soam said the total land hectarage was about 42 hectares (105acres) comprising hotels, a business park, convention centre, shopping complex and a performing arts and cultural centre.

He said the first phase of the residential component was under construction.

"We've launched (the residential component) and was mostly sold to Penangites.

"This project will take 10 years (to complete). This, however, depends on how fast we can go. If we can get investors to come in to partner us in some of the commercial projects, this can go very fast, may be in the next five to eight years, it will be completed, he said.

Soam said IJM Land was not desperately looking for investors, however,"we are just looking for people who may be interested because we've already got a lot of interest and investors who are already there but there may be additional people who are also interested as well."

Back home, he said: "We've our local and also Singaporean funds looking at investing in this place as well."

"We came here to specifically network and showcase The Light project. So, we need to be more focused and today we are here to focus on The Light," he added.

IJM Land, with projects in Penang, Klang Valley, Johor, Sabah (in Kota Kinabalu and Sandakan) and Sarawak (Kuching), is among the Malaysian participants at MIPIM Asia 2011 being held at the Malaysian Pavilion.

The Malaysian Pavilion was initiated by Malaysia Property Inc, a Malaysian government initiative that acts as a "bridge" between institutions and corporate and private investors to real estate investment opportunities in Malaysia.

By Bernama

Ibraco buys prime land in Kuching

KUCHING: Ibraco Bhd is to aggressively expand its property development with the purchase of 49.5ha of prime land along Kuching-Kota Samarahan Expressway for RM41.6mil in cash.

Managing director Chew Chiaw Han said the land acquisition was a strategic move in line with the group's expansion and development plans.

“The said land is a strategic investment which will help to enhance the group's future earning potential,” he told StarBiz.

Ibraco, which has built more than 10,000 units of properties mostly in the Tabuan Jaya area here, expects the acquisition to be completed within 60 days.

The purchase will be funded by internally generated fund and bank borrowings.

Chew said the acquisition had boosted Ibraco group landbank to more than 404ha in Kuching.

Ibraco said the vacant land was strategically located in the greater Tabuan Jaya with good existing infrastructure and easy accessibility to public amenities.

It is sited near to Ibraco's most ambitious flagship development Tabuan Tranquility, a massive commercial, industrial and residential project on 66ha which had registered high take-up rates since it was launched last year.

The 49.5ha land has been approved by the Sarawak Land and Survey Department for mixed development.

“We are in the midst of drawing up a development masterplan for the vacant land.

“First phase development is expected to kick off in the first half of 2012,” he added.

The land is expected to be developed in phases, and would probably comprise commercial, office and residential properties.

As of Sept 30, Ibraco has sold all 76 units of four-storey shophouses under Tabuan Tranquility phase 1 and 81% of residential properties (204 units of terrace houses and 38 units of semi-detached houses) under phase 5.

Tabuan Tranquility will have 640 units of double-storey terraced houses, 108 units of semi-detached houses, 60 units of three-storey townhouses, 76 units of shophouses, 72 units of semi-detached industrial buildings, one office block and a petrol service station when fully developed in five phases by 2015.

The mixed development has a gross development value of RM517mil.

Two months ago, Ibraco launched a new residential scheme in Tabuan Stutong Jaya, which comprises 77 units of single-storey terraced houses and semi-detached houses.

It is also building a block of eight three-storey shophouse in Stutong.

“The group continues to post strong sales momentum for all projects,” Ibraco said in notes accompanying its third quarter (Q3) results.

Ibraco posted a group pre-tax profit of RM3.2mil on turnover of nearly RM27mil for the quarter ended Sept 30, 2011 against a group pre-tax loss of RM2.14mil on turnover of merely RM72,000 in the Q3 of 2010 when it was still categorised as a Practice Note 17 company.

For the first nine months this year, the group registered pre-tax profit of RM10.8mil on revenue of RM74.9mil.

By The Star

Details of loans can widen reach to help distressed US homeowners

WASHINGTON: The reach of a government effort to help distressed homeowners refinance their mortgages could be largely determined by details on lender liability that will be announced.

The regulator for government-controlled mortgage finance firms, Fannie Mae and Freddie Mac, said last month that it was widening a programme to help borrowers with little or no equity in their homes refinance.

The initiative, known as the Home Affordable Refinance Programme, or HARP, hinges on lenders voluntarily writing new loans for borrowers hard-hit by declining home prices.

But many lenders have been worried that they could be forced to buy back refinanced loans if defects with the initial mortgage are found, a concern that has undercut the programme's effectiveness.

The regulator, the Federal Housing Finance Agency (FHFA), said it would relax the representations and warranties participating lenders had to abide by as part of its revamp of the programme.

Lenders would have learnt yesterday to what extent those contracts, which determine their liability for bad loans, will be waived.

“For those originating the new loans, they will look at how these waivers are going to structured,” said Bose George, an analyst with Keefe, Bruyette & Woods Inc in New York. “If they provide enough of a comfort zone, these changes to the representations and warranties could bring meaningful participation.”

HARP is open to borrowers who have little or no equity in the homes as long as they are making timely payments and their loans are guaranteed by Fannie Mae and Freddie Mac, which currently back about half of all US residential loans.

As part of the revamp announced in October, FHFA said it would scrap a cap that prevented borrowers whose mortgages exceeded 125% of the value of their homes from participating in the programme.

Analysts at Barclays Capital estimate up to 3.1 million loans are eligible for the programme. So far, about 894,000 borrowers have used HARP to refinance.

FHFA said the changes could double that number, although that would still fall far short of the five million homeowners the Obama administration had hoped to reach when the programme was unveiled in 2009.

While borrowers may move through the refinancing process at a faster rate under the retooled initiative, the breadth of the waivers on representations and warranties will largely determine the degree to which lenders and mortgage servicers are willing to make these riskier loans.

Those originating the loans have been skittish about refinancing higher-risk borrowers with the possibility a loan's government guarantee could be stripped if it sours or it is deemed defective.

Edward DeMarco, acting director of FHFA, said during a conference call with reporters last month the plan would wind up producing “substantial relief” from the representations and warranties.

But George cautioned that Fannie Mae and Freddie Mac might try to offset the waivers with an additional fee to cover the potential costs of being stuck with bad loans.

The companies have been successful at getting lenders to buy back defective loans, which has helped them bring in revenue.

By Reuters

Tuesday, November 15, 2011

SP Setia launches KL Eco City project

SP Setia Bhd Group today officially launched the KL Eco City Project, an integrated mixed development project that may become a new iconic landmark of Kuala Lumpur.

President and Chief Executive Officer Tan Sri Liew Kee Sin said that with all the required funding secured, the 9.6-ha project was set to take off and be completed in 10 years.

"The project aims to be the country's first integrated green development, targeting both the Malaysian Green Building Index and US-based Leadership in Energy and Environmental (LEED) certifications.

"We are developing this project in line with the government's aim for the private sector to rejuvanate the squatter lands in Kuala Lumpur," he said at the launch ceremony officiated by Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin here.

Liew said the main priority for the development now would be to solve the traffic congestion problem in the area by the completion of its first out of four phases in three to four years.

"We expect 30,000 occupants in the city, comprising both commercial and residential," he said.

Connectivity-wise, Liew said the group would invest more than RM150 million to link KL Eco City to all major highways.

KL Eco City, a joint venture project between SP Setia through KL Eco City Sdn Bhd and Kuala Lumpur City Hall (DBKL), is situated along Jalan Bangsar, opposite the Mid Valley City.

At the same event, SP Setia inked a RM460 million syndicated Islamic financing facility provided by three Islamic financial institutions for the KL Eco City project.

The funding, Liew said, would be utilised mainly for the infrastructure purpose, namely the proposed transportation hub in the project itself.

The banks were HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Mualamat Malaysia Bhd.

By Bernama

Dijaya, Ivory rise on Penang property tie-up

PETALING JAYA: Dijaya Corp Bhd and Ivory Properties Group Bhd shares were up after the companies announced a tie-up for a mixed-property project with a gross development value of RM10bil in Bayan Mutiara, Penang.

Dijaya rose 3.6%, or 5 sen, to RM1.44 while its warrants advanced 6.5%, or 3 sen, to 49 sen. Ivory Properties added 7%, or 7 sen, to RM1.07.

Dubbed Penang World City, the project will be undertaken by joint-venture vehicle Tropicana Ivory Sdn Bhd (TISB), which is 49% owned by Dijaya and 51% by Ivory Properties. TISB was set up on Oct 14.

Penang World City will be built on a 102.56 acre site, of which 35 acres is to be reclaimed. It will comprise residential units, a shopping mall, office suites, office towers, a hotel, retail spaces and an open mall with a boulevard.

The land is being bought for RM1.08bil from state-owned Penang Development Corp.

Bayan Mutiara is a new development hub in the eastern part of the Tun Dr Lim Chong Eu Expressway and is in the vicinity of Sungai Nibong.

Ivory Properties has proposed to finance the project via a renounceable rights issue of 186,000,000 new ordinary shares of 50 sen each as well as 186,000,000 new free detachable warrants.

Dijaya, meanwhile, will extend financial assistance to TISB in the form of shareholder advances, guarantee, indemnity or collateral of up to RM525.4mil, or 49% of the total consideration of the development land.

Analysts contacted by StarBiz have a positive view of the project, citing its prime location as a major plus factor.

“Land in Penang is scarce and the outlook for housing in the Bayan Mutiara area is booming,” an analyst said.

“It is not easy to get land in Penang for that price. Property developers prefer Johor Baru because land is much cheaper there.”

Another local bank-backed analyst said although he liked the land, he considered it pricey. At RM240 per sq ft, it was comparably higher than IJM Land Bhd's land further north of the island that was purchased at RM50 per sq ft. IJM Land has a 150.24-acre mixed-development called Light Waterfront Penang.

The analyst also said the upside for Ivory Properties' stock would be capped at around 30% as its share base would be diluted by two to three times following the rights issue.

He added that the choice of office towers in the development mix was surprising as the demand for office space in Penang was tepid.

Nonetheless, he said the project was still at its early stage and was subject to change.





“We haven't seen a detailed breakdown of the development components yet but the residential portion is likely to be larger,” he said.

Penang World City is scheduled to be completed in eight years. Work on the first phase is scheduled to begin at the end of next year.

By The Star

Pavilion looking to expand


Launched: (from left) Maybank Investment CEO Tengku Datuk Zafrul Tengku Abdul Aziz, CIMB Group corporate & investment banking deputy CEO Datuk Charon Wardini Mokhzani, Pavilion REIT Management executive directors Datuk Lee Tuck Fook and Datin Cindy Lim, and Ho at the prospectus launch.

KUALA LUMPUR: Pavilion Real Estate Investment Trust (REIT), en route to a listing on Bursa Malaysia, aims to add more assets to its portfolio and wants to continue its “shopping spree” to acquire at least three more retail properties within the next three years, depending on the economic situation.

Chief executive officer Philip Ho told StarBiz recently that the company, which will see its post-listing loan-to-value (LTV) ratio at 20%, could either finance these additional property injections by going back to its shareholders or through bank borrowings, although the latter was the preferred option for now.

“The proceeds of close to RM700mil is being utilised to pay down the debt. At 20% LTV ratio, I reckon this is a comfortable gearing ratio and will allow us to finance these acquisitions either through shareholders or with bank borrowings. We can acquire up to a billion ringgit without going back to shareholders,” Ho said.

“Under Securities Commission rulings we are allowed to gear up to 50% LTV ratio. We don't intend to gear up until that high though. I think the right formula is somewhere between 25% and 30% as most of our peers would. Our balance sheet is very strong, we can still borrow money,” he added.

The current Pavilion shopping complex, which has been fully occupied for two years with a potential-retailer waiting list of 200 and rental yields of about RM16 per sq ft, will begin extension works by the first half of next year. Ho said Pavilion REIT had “obtained all development approvals” for the extension.

“This is an extension of about 300,000 sq ft of retail space, and will be built by Pavilion REIT's sponsors (original shareholders Urusharta Cemerlang Sdn Bhd) on the former carpark of Millenium Hotel. They (the sponsors) will also build an apartment on top of the new retail space,” Ho said.

Pavilion REIT will also develop another shopping mall in UEP Subang Jaya, following the compact mall concept with an apartment block on top of it.

“This will be our first foray into the suburbs and we believe this concept will work. This compact mall which will be developed by Usurharta Cemerlang will have another brand name that will be managed by the Pavilion Group,” Ho said.

“We believe in our branding and good location which will enable this shopping mall to withstand the troughs of any economic crisis,” Ho said responding to qualms of the possible downward price pressure on rental yields due to oversupply.

Pavilion REIT Management Sdn Bhd, the manager of Pavilion REIT yesterday launched the prospectus in conjunction with its proposed listing on the Main Market of Bursa Malaysia on Dec 7.

Pursuant to the initial public offering (IPO), 755 million units would be offered to Malaysian and foreign institutional investors and selected investors at the institutional price (other than cornerstone investors) which would be determined by way of book building.

A total 265 million units has been earmarked for allocation to six identified cornerstone investors at an offer price of 90 sen per unit or the institutional price, whichever is lower.

The six cornerstone investors are Permodalan Nasional Bhd, Employees Provident Fund, Kumpulan Wang Persaraan, Great Eastern Life Assurance (M) Bhd, American International Assurance Bhd and HwangDBS Investment Management Bhd.

“About 35 million units will be offered to the general public in Malaysia, eligible tenants of Pavilion Kuala Lumpur Mall and Pavilion Tower, directors of the manager and the eligible employees of the manager, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd at the indicative retail price of 88 sen per unit,” Ho said at the event.

At an indicative retail price of 88 sen, the manager expected Pavilion REIT to provide a distribution yield of 6.41% and 6.51% for the one-month forecast period ending Dec 31, 2011 and the 12-month forecast period ending Dec 31, 2012 respectively.

Ho said the total appraised value of Pavilion REIT's initial property portfolio was about RM3.5bil. With the inclusion of Pavilion Kuala Lumpur Mall, which forms 96.4% of the total appraised value of Pavilion REIT's initial property portfolio, Pavilion REIT would become one of Malaysia's largest listed REITs with the largest exposure to the retail sector of any listed Malaysian REIT by appraised value.

“Based on an indicative retail price of 88 sen, Pavilion REIT is expected to achieve a market capitalisation of RM2.6bil upon listing,” he said, adding that Pavilion REIT remained an attractive option for investors looking for liquid investments in Malaysia's retail and corporate property sector.

On a pro forma basis, he said Pavilion Kuala Lumpur Mall and Pavilion Tower, collectively, achieved revenue of RM291mil and net property income of RM203mil for the financial year ended Dec 31, 2010.

By The Star

DKLS to buy Melbourne property for A$13.3m

KUALA LUMPUR DKLS Industries Bhd has proposed to participate in the acquisition of a property in Melbourne for A$13.3 million (RM42.96 million).

In a filing to Bursa Malaysia yesterday, the company said the property in Bourke Street, Melbourne, comprises an existing building erected on a piece of land measuring 1,162 sq m.

The existing building was completed in 1931 and was utilised as Barristers Chambers.

It comprises five levels plus basement, mezzanine and a rooftop caretakers unit.

There are also two prime Bourke Street shops and six on site car parks.

The gross building area of the existing building is measuring approximately 5,228 sq m in area.

The existing building is currently vacant except for the two Bourke Street shops which have been leased to two separate retail tenancies.

The company said the existing building was ideal for a range of uses such as commercial owner-occupation, strata subdivision, investment or hotel conversion.

"DKLS proposes to refurbish, re-lease and hold the existing building as a central CBD (central business district) office investment. It is also ideally suited to strata subdivision and selling down to barristers, lawyers and other professionals.

"The cost of refurbishment of the existing building is estima-ted at A$3 million (RM9.69 million)."

By Business Times

DKLS buying Aussie property

KUALA LUMPUR: DKLS Industries Bhd has proposed to take part in the acquisition of a property in Melbourne for A$13.3mil (RM43.04mil).

The company told Bursa Malaysia the property in Bourke Street, Melbourne, comprised an existing building on 1,162 sq m.

The existing building was completed in 1931 and was utilised as Barristers Chambers. It comprises five levels plus basement, mezzanine and a rooftop caretakers unit. There are also two prime Bourke Street shops and six on-site car parks.

The gross building area of the existing building measures about 5,228 sq m.

The existing building is now vacant except for the two Bourke Street shops which have been leased to two separate retail tenancies.

DKSL said the existing building was ideal for a range of uses such as commercial owner-occupation, strata subdivision, investment or hotel conversion.

By Bernama

Showcase of Negri properties

Properties worth about RM940mil will be up for grabs at the three-day Negri Sembilan Mapex to be held in Seremban beginning Nov 18.

The event, to be held at Seremban Parade, will be the biggest held to-date and will showcase dwellings priced as low as RM36,000 to a cool RM1.6mil.

State Real Estate and Housing Developers’ Association chairman S. Sivanyanam said 22 developers would be taking part in the event with 2,330 units ranging from single-storey terraces to bungalow lots up for sale.

“We had had to turn away several other developers due to space constraints. Despite this, we are confident that the Mapex will receive an even greater response from buyers this time around,” he told reporters.

Also up for sale at the event themed “Affordable, Accessible, Quality Living” are parcels of commercial land worth between RM729,000 and RM19.1mil, shop offices (RM180,000-RM1.28mil), bungalow lots (RM53,980-RM200,395) and single and double-storey semi-D units (RM260,000-RM1mil).

Among the 2,330 units, 469 are double-storey units, single-strorey terrace (436), double-storey semi-D (269), commercial units (260), shop offices (233), and low and medium-cost apartments (271).

Sivanyanam expressed confidence that more buyers from outside Seremban, particularly the Klang Valley will make a beeline to buy properties in Negri Sembilan during the event due to the much lower land prices.

“Some of the developers will also be offering incentives such as legal and disbursement fee waiver and stamp duty exemption and this will mean substantial savings for the buyers,” he said.

There would also be guaranteed rental returns, cash rebates and discounts, free feng shui consultation amd zero interest during construction of the said property.

Sivanyanam said at the state-level Mapex held from May 20 to 22 this year, 84 units of properties worth RM20.6mil were sold. Then, 1,630 properties worth about RM460mil were showcased.

This time around, a lucky draw of five 32-inch Samsung LED television sets will also be held on Nov 20 for all housebuyers.

All housebuyers who sign the sales and purchase agreement during the three-day Mapex will be entitled to a Touch&Go card worth RM110.

By The Star

Tiger Synergy gains on condo project

Tiger Synergy Bhd, a Malaysian developer, rose to a five-month high in Kuala Lumpur trading after saying it expects to make a RM68 million profit from a condominium project.

Its shares gained 7.4 percent to 14.5 sen at 9:05 a.m. local time, set for their highest close since June 2.

By Bloomberg

Malton to acquire Ulu Kelang land

KUALA LUMPUR: Malton Bhd is acquiring 56.05 acres in Ulu Kelang for RM105mil for a residential project with an estimated gross development value of RM500mil.

The company said in a filing with Bursa Malaysia that its wholly owned subsidiary, Gapadu Harta Sdn Bhd, had entered into a sale and purchase agreement with Ukay Spring Development Sdn Bhd to acquire the land.

The acquisition would be financed by internal funds and/or bank borrowings, said Malton.

By The Star

Pavilion REIT to acquire 3 malls


KUALA LUMPUR: En route to a listing, Pavilion Real Estate Investment Trust (REIT) plans to buy three shopping malls, namely the Fahrenheit88, the extension to Pavilion Kuala Lumpur Mall (Pavilion Mall) and a soon-to-be-developed mall in USJ Subang Jaya, within the next two years.

Pavilion REIT Management Sdn Bhd chief executive officer Philip Ho said this is part of Pavilion's growth strategy as outlined in its prospectus.

"We believe our listing will serve to enhance the growth of our retail and corporate property business. We hope to provide a platform for investors to invest in a REIT that provides a stable distribution income, capital appreciation as well as opportunities to benefit from its future acquisitions of yield-enhancing assets," he said at the launch of Pavilion REIT's prospectus here yesterday.

Speaking to reporters later, Ho said Pavilion plans to acquire Fahrenheit88 by 2013, Pavilion Mall's extension by 2014 and a retail mall in USJ Subang Jaya by 2015.

Currently, Pavilion has secured the right of first refusal (ROFR) for the acquisitions of Fahrenheit88, and the Pavilion Mall extension, both of which are close proximity to Pavilion Mall.

It has also obtained the ROFR for a six-storey retail mall to be developed in Subang Jaya.

With an appraised value of RM3.54 billion, Pavilion REIT is currently made up of two assets - Pavilion Mall and Pavilion Tower.

The mall, which contributes 96.4 per cent to the appraised value, has 1.3 million sq ft of net lettable area, with about 450 retail tenants, making it the largest premium retail fashion mall in Malaysia.

The award-winning mall, which was completed in 2007, is strategically located in Bukit Bintang, Kuala Lumpur.

Meanwhile, Ho said, the Pavilion Tower offers a premium corporate and business address and spans over a net leaseable area of about 167,000 sq ft.

Based on the indicative initial public offering (IPO) price of 88 sen per unit, Pavilion REIT expects to raise some RM695 million, making it one of Malaysia's biggest IPOs for the year.

With an appraised value of RM3.4 billion for Pavilion Mall, Pavilion REIT will also bear the distinction of being the Malaysian REIT with the largest portfolio of retail assets upon listing, slated for December 7.

For its IPO, Pavilion is offering 790 million shares, of which 755 million units will be offered to Malaysian and foreign institutional investors and selected investors at the institutional price, while 265 million units have been earmarked for allocation to six identified investors at an offer price of 90 sen per unit or the institutional price, whichever is lower.

The balance 35 million units will be offered to the general Malaysian public and eligible tenants of Pavilion Mall and Pavilion Tower, among others.

By Business Times

Monday, November 14, 2011

Tradewinds may further develop Langkawi

Langkawi Tradewinds Corp Bhd (TCB), controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary, is set to bring more developments to Langkawi, with at least two major projects on the cards.

Business Times has learnt that the company may build a new five-star resort and redevelop Telaga Harbour Park at Pantai Kok.

It is not immediately known if TCB will embark on these developments on its own or on a joint-venture basis.

Speculations are also rife that TCB may have recently bought over the three-star Mutiara Bay Beach Resort in Langkawi, which it manages and operates for the Langkawi Development Authority
(Lada).

“The proposed location of the new resort is likely to be sited on land leased out from Lada, somewhere between The Danna Langkawi and Mutiara Burau Bay Beach Resort,” a source said.

The redevelopment of Telaga Harbour, meanwhile,is said to see the construction of residential and commercial units.

TCB currently owns and manages Perdana Quay, a commercial and retail property made up of some 90,000 sq ft of business space.

In addition to Mutiara Burau Bay, TCB also owns luxury boutique hotel The Danna and the five-star Meritus Pelangi Beach Resort and Spa Langkawi.

By Business Times

RM600m condo deal in Iskandar Malaysia

Medini Land Sdn Bhd, a wholly-owned subsidiary of Iskandar Investment Bhd (IIB), is teaming up with Darul Tinggi Sdn Bhd to develop a high-rise condominium project in Iskandar Malaysia with a gross development value of RM600 million.

Both companies will set up a joint venture company, Distinctive Resources Sdn Bhd, which will be 80 per cent owned by Darul Tinggi and 20 per cent by Medini Land.



The condominium project will be implemented in two phases.

In a statement, IIB said that the construction work for phase one will start in May next year. It will involve 351 condominium units.

The second phase, comprising 334 units, will take place 20 months after the completion of phase one.

"The new residential project will cater to both local and international property markets and help spin off other projects to bring vibrancy to the vicinity," said IIB president Datuk Syed Mohamed Syed Ibrahim.

In the vicinity are Legoland Malaysia and Educity, which are expected to bring about multiplier effects to other nearby projects.

Darul Tinggi founder Datuk David Koh said Johor Baru is increasingly attracting property buyers due to Iskandar Malaysia.

By Business Times

Banks offering more attractive home loans


PETALING JAYA: With razor thin margins due to rising competition in the home loans market, banks are now aggressively value-adding their home loans to stay competitive and boost their market share.

OCBC Bank (M) Bhd head of secured lending Thoo Mee Ling said banks must value-add to their generic home loan offerings in order to not just survive but thrive, especially in this competitive climate.

“What separates those who thrive from the others today is how much they have moved from price to innovation. It is heartening to see a greater emphasis today on enhancements to loans products, rather than mere reliance on price cutting previously.

“This is where banks are getting even more creative by adding in the necessary finer details to a product that otherwise appears bland. Home loans with features and benefits that are tailored specifically to complement customers' lifestyles often serve to compel them to look beyond price and into a more holistic perspective,'' she told StarBiz.


File picture shows a housing are in Shah Alam - Starpic by BRIAN MOH

Thoo said customers were nowlooking for more than just a home loan as purchasing a house was simply the beginning.

Banks would also need to cater to their immediate follow-on needs like renovations and furnishing, for example, and this was where additional financing that came with the home loan would be helpful, she reckoned.

At OCBC Bank, she said there were bespoke home loans that were tied in with study loans, renovation loans and even overseas property financing schemes, adding that each of these took into consideration things that went beyond mere property purchase.

She said it was undeniable that investing in a product to bring in customers and then introduce them to other products remained a good strategy for growing the business, but banks would still need to strengthen their range of offerings to become a one-stop shop for their customers.

Outstanding home loans, valued at RM261bil, accounted for about 27% of the total banking system's loans as at end-September 2011. Although there has been strong expansion in home loans in the last couple of years, the proportion of home loans has been hovering at 27% in the past five years.


Thoo: ‘What separates those who thrive from the others today is how much they have moved from price to innovation.’

Commenting on home loans, RAM Ratings' head of financial institution ratings Wong Yin Ching said competition among banks in the home loan market had been rife, resulting in razor thin margins in recent years.

This stemmed from the homogeneity of the home loan products, whereby any innovation in product features and price competition (by lowering rates) were quickly replicated and matched by market players, she said.

Wong added: “While some banks have instilled more discipline in its risk-reward pricing, aggressive pricing is still seen in the market and this is unhealthy and unsustainable in the long run.

“Going forward, we think that personalised services and quicker turnaround times by banks would be key to stay relevant in the home loan market.”

Alliance Bank Malaysia Bhd executive vice president and head of consumer banking Ronnie Lim said competitive pricing aside, Malaysian banks were now re-inventing the mortgage landscape by extending superior customer experience at every customer touch point.

For the bank, he said having mortgage specialists, who also acted as advisory consultants, among others, had enabled Alliance Bank to become one of the key mortgage players in the market.

He said the bank has been growing its mortgage specialists force extensively to not only engage customers effectively but also deepen its relationship with developers, lawyers and real estate agents.

Lim added the bank was also able to provide fast “approval in principle” service to assist customers looking for home financing solutions to make informed decisions before committing to their choice property.

For mortgage players, he said one of the key challenges was about overcoming margin compression and the bank was able to achieve this by introducing new systems and processes to help staff increase their productivity.

This had since yielded results: “For the year under review, sales productivity has increased threefold compared to a year ago,” he said.

By The Star

OCBC Bank offers loans to buy properties in Australia

KUALA LUMPUR: OCBC Bank (Malaysia) Berhad (OCBC Bank) is for the first time, offering a new mortgage loan facility, to finance the purchase of residential properties in prime sections of Sydney and Melbourne, Australia.

Its Head of Consumer Financial Services, Charles Sik said the introduction of the facility, OCBC Overseas Property Financing-Australia, follows the success of a similar scheme for London properties launched six month ago.

"Like the earlier scheme, customers will be able to take advantage of the fact that this is also a ringgit-based loan, hence mitigating the effects of fluctuating foreign exchange risks," he said in a statement here today.

He said customers can now invest in Sydney and Melbourne properties with peace of mind, knowing their loan facility is fixed in the ringgit, mitigating forex risks.

"Australian property prices are certainly on an uptrend and we think it's really a good time now to capitalise on this," he added.

The scheme offers a margin of financing of up to 75 per cent and a loan tenure of up to 36 years for off-plan properties and 40 years for completed properties, or up to the time the borrows turn 70, whichever is earlier.

By Bernama

More hotels in Penang with GDV of RM860mil

GEORGE TOWN: Tourism projects comprising six hotels in George Town and a water theme park in Teluk Bahang in Penang, with gross development value (GDV) of over RM860mil, will be operational in 2013 and 2014.

IGB Corp Bhd's St Giles Hotel and Cititel Express, and NT Industrial Park (M) Sdn Bhd's five-star boutique hotel, with a combined GDV totalling over RM225mil, are the latest projects approved by the Penang Municipal Council (MPPP).

Construction work for the RM100mil NT Industrial Park's project on a one-acre site at Lebuh Gereja is scheduled for completion in 2013.

IGB's projects, with over RM125mil GDV, are expected to be completed in the first quarter of 2014.

The other hotel projects that will be ready by late 2012 and 2013 are the RM150mil new wing of Eastern & Oriental Hotel (known as Victory Annexe), which is scheduled for opening at the end of next year, the RM285mil Rice Miller Hotel & Residences in Lebuh China which will open in 2013, and the RM83mil Mansion One Hotel at Jalan Sultan Ahmad Shah.

Sim Leisure Consultant's RM120mil Escape Waterpark in Teluk Bahang is expected to begin work soon and scheduled for opening in 2013.

Approved by the Penang Municipal Council (MPPP) in September 2011 and scheduled to start work in six months, the NT Industrial Park project entails the development of a five-star five-storey hotel with 85 rooms. The design takes cue from the early 20th century port office and warehouse building in George Town.

Two heritage buildings on the site formerly used as offices will be preserved for adaptive commercial use to accommodate restaurants and boutiques.

The hotel, yet to be named, will be ready for operations in late 2013.

IGB Corp Bhd will also start the construction work soon on its St Giles Hotel and Cititel Express on a one-acre site in Jalan Magazine, the heritage city of George Town.

Cititel Hotel Management Sdn Bhd managing director Datuk Eric H.K. Lim said the GDV for both hotels was over RM125mil.

The hotels, which will be built back-to-back to each other, are scheduled for completion in the first quarter of 2014.

St Giles would house a grand ballroom with a seating capacity of 1,200 persons, several meeting rooms, a caf swimming pool, gymnasium, health centre, executive lounge and a helipad, he said.

“The development will also include retail shops, restaurants, a food court and car park bays for more than 500 vehicles.

“Adjacent to the St Giles Hotel Penang will be the 260-room Cititel Express Penang,” Lim added.

Asian Global Business chief executive officer Dr Noraini Abdullah said piling work was currently being done for the RM285mil Rice Miller Hotel & Residences, which comprised of a 48-suite hotel, retail space with 17,000 sq ft of lettable area, two five-storey office blocks, and 99 units of city residences.

“The piling work for the hotel has been completed and we are now doing the piling for the residences.

“The project will also accommodate clubhouse facilities such as a swimming pool and a gymnasium, and five restaurants catering Asian and Western cuisines.

“The entire project is scheduled for completion in June 2013,” she added.

The RM150mil new wing of Eastern & Oriental Hotel known as Victory Annexe, is now about 65% completed and is scheduled for opening at the end of 2012.


Battistotti: ‘The Sarkies Restaurant at the new wing is expected to open for business next month.’

Eastern & Oriental Hotel general manager Marco Battistotti said the new wing would add another 120 suites to the existing 100 suites of the hotel.

“The new wing would also have two banquet rooms, a state-of-art gymnasium, spa, and swimming pool.

“The Sarkies Restaurant at the new wing is expected to open for business next month,” Battistotti said.

The RM83mil Mansion One (formerly known as Northam Tower) building at Jalan Sultan Ahmad Shah is currently being transformed into a four-star hotel with 200 rooms.

Magna Putih Sdn Bhd director Adrian Tan said that the refurbishment work for Mansion One would be completed in 2013.

“There would be 200 hotel rooms, all facing the sea and George Town city.

“The competitive edge of Mansion One is its prestigious address and that its management would be provided by a well-known hotel chain group with strong presence in Asia and the Middle-East.

“To add further value to Mansion One, the Hardwicke House, a heritage building, would be renovated to become a fine dining restaurant,” he said.

Meanwhile, MPPP's technical review panel committee member Datuk Richard Jong said both the designs of the Rice Miller Hotel & Residences and the NT Industrial Park project were in line with Unesco's heritage guidelines.

“The architectural theme of both projects complements the other heritage buildings in inner George Town.

“Both projects should help revitalise the tourism belt of inner George Town,” he said.

Sim Leisure Consultant Sdn Bhd managing director Sim Choo Kheng said the company's was mobilising to start work for the RM120mil Escape Theme Park Resort on a 44-acre site in Teluk Bahang.

Sim said the first phase, comprising an adventure park and water park occupying a 17-acre land area, was due for completion in 2013.

“When the remaining two phases are completed in six years, the theme park would generate economic benefits for some 6,000 people involved in the services industry and supply chain business.

“We expect about 50% of our visitors to come from within the country and from the Asean region,” he said.

Yeng Keng Hotel owner Datuk Ong Gim Huat said entrepreneurs should explore developing hotels with larger rooms and interesting designs to differentiate themselves.

“If the land allows for a 100-room hotel, the developer should look into building a hotel with 60 to 70 rooms with innovative designs and interesting facilities.

“The local authorities should not impose rules on heritage buildings to have terracotta tiles or gable roofs.

“A modern building with interesting design can blend well in a heritage surrounding,” he added.

Yeng Keng is a well-known heritage boutique hotel located in inner George Town.

By The Star

Ivory, Dijaya rise on Penang venture

Ivory Properties Group Bhd had a record gain in Kuala Lumpur trading and Dijaya Corp rose after saying they will jointly develop a property project in Penang that may generate RM10 billion of sales.

Ivory jumped 13 percent to RM1.13 at 9:06 a.m. local time. Ivory also said it plans a bonus issue and rights offer, the company said in a statement. Dijaya added 1.4 percent to RM1.41.

By Bloomberg