Pavilion REIT IPO oversubscribed

PETALING JAYA: The retail offering of Pavilion Real Estate Investment Trust’s (REIT) initial public offering (IPO) has been oversubscribed by 7.5 times. Total demand for its institutional book, excluding allocation for cornerstone investors, was oversubscribed by about 28 times.

The price for institutional investors was fixed at 90 sen per unit, while the final retail price is 88 sen. The IPO is expected to raise RM710mil.

En route to a listing on Dec 7, Pavilion REIT is issuing 790 million new shares or 26.3% of its total issued units upon listing. This comprises 755 million shares offered to institutional investors, and the rest came under the retail offering.

By The Star

SAAG in talks on RM600mil Tamil Nadu project

PETALING JAYA: SAAG Consolidated (M) Bhd said it is in the final stages of clinching a contract worth more than RM600mil to build houses in the southern Indian state of Tamil Nadu.

In a filing to Bursa Malaysia yesterday, the group said its India-listed subsidiary SAAG RR Infra Ltd is presently in advanced stage of negotiations with the main licensee of the affordable housing project in India which has the rights for the German technology to build 60,000 solar-powered affordable homes per annum for Tamil Nadu.

“SAAG RR has built seven model homes, financed by the main licensee, which are ready to be handed over by the Chief Minister of Tamil Nadu to the underprivileged shortly,” it said, adding that appropriate announcements would be made if and when the project was awarded to SAAG RR.

SAAG RR would have the rights to manufacture, assemble and sell composite panels for the houses.

The Tamil Nadu government is expected to fund the project and construction works are expected to start by year-end, of which about 180,000 rupees (RM11,112) will be allocated for the construction of each house.

By The Star

Pavilion REIT said to raise RM710m IPO

Pavilion Real Estate Investment Trust, a Malaysian shopping mall trust part-owned by Qatar Investment Authority, is raising RM710 million (US$223 million) in an initial public offering, two people with knowledge of the matter said.

The company plans to sell units at 90 sen apiece to institutions and at 88 sen to retail investors, said the people, who asked not to be identified as pricing details are private. Pavilion REIT had marketed the units at 88 sen to 90 sen.

The IPO will be the Southeast Asian nation’s fourth biggest this year, after share sales by Bumi Armada Bhd, UOA Development Bhd. and MSM Malaysia Bhd. Pavilion REIT said earlier this month it’s seeking acquisitions within the country and throughout Asia.

Kuala Lumpur-based Pavilion REIT, which is expected to list next month, owns the Pavilion mall and an adjacent office tower in the capital’s Bukit Bintang area, which Malaysia is developing to rival Singapore’s Orchard Road. The mall, with a gross floor area of 2.2 million square feet, has an appraised value of RM3.4 billion as of June 1, according to its prospectus, and houses luxury retailers including Bulgari SpA and Prada SpA.

Qatar Investment Authority will be the single largest owner of Pavilion REIT with a 36 percent stake, according to its prospectus. The trust aims to start trading in Kuala Lumpur on Dec. 7.

Pavilion REIT plans to pay out at least 90 per cent of its distributable income on a half-yearly basis from 2012, it said. From the listing date to Dec. 31, 2012, it will distribute 100 per cent of its income. CIMB Group Holdings Bhd, Malayan Banking Bhd and Credit Suisse Group AG are among managers of the sale.

By Bloomberg

China to ease property curbs

SHANGHAI: China will likely relax some property market curbs next year due to concerns that slumping prices could hurt economic growth, a prominent Chinese university said in a report.

China has introduced a range of measures aimed at bringing down property prices in the last year, such as bans on buying second homes in some cities, hiking minimum downpayments for buyers and introducing property taxes.

But Beijing-based Renmin University has forecast that the government would likely relax limits on bank lending to the property sector and purchases of new homes in the third quarter of 2012, according to a report published in the state-run China Securities Journal.

Industry officials and analysts are divided over when the government might ease curbs, originally put in place to cool the red-hot property sector after a surge in prices put homes out of the reach of many.

Chinese Premier Wen Jiabao recently dashed hopes of any change in the short term, saying housing prices should return to “reasonable levels”.

But cash-strapped local governments were heavily reliant on revenue from land sales, and the central government would likely intervene to prevent property prices from falling more than 25%, Renmin University said.

Property investment was also a contributor to economic growth, so Beijing might act to help ensure gross domestic product (GDP) growth which created jobs and prevented social unrest remained strong, it said.

The prestigious university's economic research institute forecast annual GDP growth of 9.2% in 2012, against an estimated 9.4% in 2011.

Official data showed the number of major Chinese cities posting a drop in home prices doubled to 34 in October from September, in a sign efforts to cool the country's surging property market are working.

Housing prices in the capital Beijing, commercial hub Shanghai and the southern cities of Guangzhou and Shenzhen among the most speculative markets all fell slightly in October from September, figures showed.

The report said property prices and sales volume were likely to continue to fall through the first quarter of 2012, but it ruled out a large-scale selloff and a hard landing for the economy.

By AFP

52% of London office blocks owned mostly by German and US investors in 2011

LONDON: British investors own less than half the office properties in London city's financial hub, with foreign ownership of towers such as the Gherkin likely to continue, a report said.

Property company Development Securities said that 52% of city office blocks were foreign owned in 2011, up from 8% in 1980, with German and US investors hiking their stakes considerably over that period.

“City offices are perceived to offer quality and transparency, a safe haven for foreign buyers who have in turn deepened liquidity in the market,” chief executive Michael Marx said in the report, Who Owns the City.

IPD figures show property values fell 50% during the global financial meltdown to August 2009, subsequently rebounding 25%, creating a buying opportunity for cash-rich investors such as sovereign wealth funds, pension funds, insurance firms and real-estate investment companies.

“Traditional owners livery companies, institutions, established property companies have experienced a sharp decline in city office ownership,” Development Securities said, noting these investors now held 17% of the office stock, from 29% in 2005.

In their place, German investors hiked their market share to 16%, from 1% in 1980. US investors held 10%, from zero, while Middle East investors weighed in at 6%, from 3%, the survey found.

The 180m tall Gherkin tower, so-called because of its shape and one of the most distinctive in the city, has been part owned by German property behemoth IVG Immobilien since 2007.

Foreign ownership increased during the global financial crisis, Development Securities said, noting the changing dynamics of globalisation and international investment would continue to be reflected in city office ownership.

“Such resilience would appear all the more remarkable in the light of the city's associations with the failures of the international financial system. What offsets the systemic risk in relation to the city's lack of diversification is the exceptional liquidity that characterises its office market,” it said.

The Development Securities survey also showed the changing profile of owners, with a growing trend towards private ownership by high net worth individuals.

In terms of functional ownership, 41% of the office space was owned by companies in the finance, insurance and real estate sectors, and 57% by financial and business services firms.

By Reuters

IJM Land set to launch "Canal City" project

SINGAPORE: IJM Land Bhd, a leading property developer in Malaysia, is set to mount a roadshow to launch the "Canal City" project in the Klang Valley early next year.

Chief executive officer and managing director Datu Soam Heng Choon said:"We are going to launch the "Canal City" in the Klang Valley middle of next year.

"So, we are going on a road show for the launch (of the project) may be by the beginning of the year. "It was called the Canal City last time, but we are going out there (during the roadshow) to give it a rebranding," he told Bernama today.

The project with a gross development value of more than RM10 billion will be sprawled over 800 hectares at the back of the Kota Kemuning and Kota Permai Golf Course in Shah Alam, Selangor.

"The design will be based on the green city concept. It is one of the the first green township that we are developing and the project will be one of the first few big green townships in Malaysia" he added.

Soam said the project, comprising a mixed township of commercial and residential components, would be fully completed within 12 and 15 years.

Touching on the city concept, Soam said a water and canal feature would be incorporated to run through the entire development.

On the probability of looking for investors, Soam said:"Not so much because we already have experience in carrying out township developments.

"We actually have township and niche project developments like "The Light Waterfront Penang" project," he said.

Spread over 60 hectares, the RM5.5 billion iconic waterfront development will comprise residential and commercial components complete with 100 per cent fibre optic infrastructure.

Soam said IJM Land was currently undertaking projects in Penang, Klang Valley, Johor, Sabah and Kuching.

Currently, IJM Land has a landbank exceeding 4,000 hectares with a gross development value of more than RM20 billion to be realised over 20 years.

By Bernama

Malaysia property sector remains buoyant

Despite talk of a recession, the Malaysia property scene is still buoyant with many people wanting to buy homes, especially in the city centre and in Johor.

HomeGuru.com.my country manager Steven Tan said there is a lot of interest among overseas investors to buy homes in Malaysia via the Malaysia My Second Home programme, especially in places like Sabah, Kuala Lumpur and Johor.

“As for Penang, the trend is different as many locals are snapping up properties there, mostly luxury condos,” Tan said in an interview with Business Times.

He added that another emerging trend in the Penang property market was that in recent months, there has been a lot of interest among Singapore investors to snap up heritage buildings on the island.

“You will be surprised that after Malaysians and Singaporeans, the third most visits we get for our website are the Europeans,”
he said.

On HomeGuru’s recently concluded survey, in which some 2,800 people were interviewed on the local property market, Tan said 63 per cent of the respondents felt that properties across the board in Malaysia were expensive.

The survey also revealed that 78 per cent of the respondents felt that bungalows were the most expensive type of property.
Tan added that some 18 per cent of the respondents also indicated that they were planning to invest overseas in the coming months.

HomeGuru is a Singapore company which has been in Malaysia for slightly under a year. Its 11-month-old website has about three million visitors a month, Tan said, adding the Malaysian HomeGuru website has over 10,000 agents with more than 70,000 properties to buy and sell.

HomeGuru is the second most popular property portal in the country, but it holds pole position in three other countries, namely Indonesia, Thailand and Singapore.

By Business Times

Property sector to feel impact from tighter lending, slower sales

PETALING JAYA: The winds buffeting the property industry may become stronger with the introduction of guidelines by Bank Negara to rein in household debt which becomes effective from Jan 1.

RHB Research Institute Sdn Bhd analyst Loong Kok Wen said in a report that these regulations would have an impact on the industry with the high-end segment of the market being more sensitive to regulatory tightening as financing availability gets narrower.

She said the stricter lending rules were likely to result in a 14%-37% decrease in affordability with the impact to be felt from the first half of next year.

The central bank issued guidelines last week in a move to clarify lending practices among financial service providers which included the requirement by banks to make appropriate assessment into prospective borrowers' income after statutory deductions and consider all outstanding debt obligations.

Loong said that although banks were already assessing potential borrowers' net salary in their evaluation process, lending would likely be tighten on home mortgages going forward on worries of rising household debt to gross domestic product (GDP) levels.

She said fundamentals in the market remained weak with the prolonged sovereign debt crisis in the European Union overshadowing the global economic outlook.

“From our recent conversation with developers, potential buyers are indeed taking longer time in their property buying decisions than previously, especially on premium properties. Mass housing will continue to fare better due to pent-up demand,” Loong said.

She added that property sales were likely to taper off (after a 21% growth in 2010) with a growth of 0% to 5% in 2012, given that sales were largely driven by GDP growth.

Loong said the house was maintaining an “underweight” and was still cautious on property stocks although they have recovered in tandem with the temporary rebound in the equity market.

“Our stock pick is selective,” she said, adding that UEM Land was recently upgraded to a “trading buy” and Mah Sing Group Bhd to “market perform”.

Loong expects UEM Land Holdings Bhd to benefit from more oil and gas-related news flow in Iskandar, while IJM Land Bhd's share price could be supported by a potential merger and acquisition angle following the recent offer made by Permodalan Nasional Bhd to SP Setia Bhd.

By The Star

"Isola" snapped up within hours of public launch

Each tower of Isola are corner units overlooking Subang Jaya and Glenmarie.

Isola, the latest offering by Sime Darby Property in the renowned and award-winning township of Subang Jaya, saw 75 percent of its units snapped up within hours of public launch.

Out of the 115 units available for sale, 85 units were sold at the close of the business day. Isola is a freehold development consisting of two 16-storey tower blocks that house 216 units of centrally located and quality apartments.

The built-up area of each unit ranges from 95sq m (1,023sq ft) to 384sq m (4,133sq ft), with prices starting from RM679,888. The entire development has a gross development value of about RM220 million.

Sime Darby Berhad group chief operating officer Datuk Abdul Wahab Maskan who is also managing director of Sime Darby Property, said he was pleased to see the good response from home buyers and investors for Isola units.

“The fantastic take-up rate on the first day of its public launch spoke well of the attractiveness of our products and promises to our customers. I salute our customers for their confidence in the market. We are together in making the current landscape of the property sector active and attractive.

“As we track with cautious optimism of the sector’s outlook for the coming year, Sime Darby Property is confident that its products will continue to match market and consumers’ need in terms of right prices and sales requirements.

“Prospects will continue to be strong, especially for properties built by reputable and sustainable developers in city centres, growth areas such as Klang Valley and other urban centers. The positive response to Isola today is clearly reflective of this,” he added.

Isola, or “island” in Italian, is situated at a central location with direct access to major highways and other transportation hub, established business districts and private medical and public facilities.


Units are designed with contemporary urban living features.

It is close to the KTM Komuter, Sime Darby Medical Centre Subang Jaya, the Empire Shopping Gallery, Subang Parade, Carrefour as well as various colleges and educational institutions such as Taylor’s College, Metropolitan College, Monash University Sunway Campus as well as the Seri KL private school.

Isola has been specially designed to ensure the privacy and safety of its residents. It features a residents-only resort-themed podium that provides a wide range of facilities and amenities to meet the needs of contemporary and discerning lifestyle. These include swimming pools, playgrounds, multi-purpose halls, gymnasiums and a mini forest.

Isola has a selection of 12 different designs. All units are corner units that are also carefully planned to offer the best view of Subang Jaya while promoting natural ventilation. Feng shui philosophy is also incorporated into the development, ensuring that Isola is entirely chi positive.

As a sustainable development, Isola features, among others, an open corridor concept for ample ventilation and light. It also has its own rainwater recycling system specifically for maintaining its lush landscaped area. For more information on Isola Serviced Apartments, please contact Sime Darby Property at 1800 88 1118 or log on to our website at www.simedarbyproperty.com

By The Star

Jazz-ing up the Penang hotel scene

GEORGE TOWN Penang is set to see the entry of yet another five-star resort to meet continued tourist demand.

The RM100 million sea-fronting Jazz Hotel Penang will open its doors by 2015, its operators said.

Full-service hotel management company Ri-Yaz Hotels and Resorts Sdn Bhd will manage the 226-room hotel, located at Tanjung Sri Pinang in Tanjung Tokong.

"Our expansion into Penang is timely, given the growth of the northern region's tourism industry and our projected increase in demand for hotel rooms in Penang," Ri-Yaz's managing director Datuk Shaheen Shah said in Penang yesterday, after the company signed an agreement with Sure Commerce Sdn Bhd.

Under the agreement, Sure Commerce will develop the Jazz Hotel Penang, comprising two towers which will be made up of the 30-storey hotel, along with service suites in the adjoining 45-storey tower.

Witnessing the signing of the agreement at the Eastern and Oriental Hotel were Yang diPertua Negeri Tun Hamdan Abdul Abbas and Emkay Group chairman Tan Sri Mustapha Kamal Abu Bakar.

"We purchased a 0.91 ha piece of land close to Tesco from Koperasi Gabungan Negeri Pulau Pinang," Sure Commerce's managing director Todd SB Teoh said in an interview.

He said the Ri-Yaz group was chosen based on its proven record in managing boutique hotels in key tourism markets.

Meanwhile, Shaheen said the group will draw from its experience in managing leisure properties in Malaysia like the Cyberview Resort and Spa in Cyberjaya, Ri-Yaz Heritage Marina Resort and Spa in Terengganu and Belum Rainforest Resort in Perak.

Internationally, Ri-Yaz also manages the Pure Villas in Canggu Bali, Indonesia.

"Over the next three years, we are looking to expand our footprint by investing and managing properties in Tuaran, Sabah, Langkawi and Kuala Lumpur," Shaheen said.

"The Jazz Hotel Penang," he noted, "will be positioned as a trendy chic hotel, where the latest technology will be showcased, and where jazz music and art pieces will enhance the hotel's contemporary design."

Also included in the design for the new hotel, are a sea-fronting roof-top pool, along with a glassed-ballroom.

By Business Times

Mulpha International unit seeks buyers for ultra-luxury homes

SINGAPORE: Real estate developer, Mulpha Australia Ltd, is seeking high net-worth individuals, especially from Singapore, Hong Kong and Shanghai, to purchase five units of its ultra-luxury residences on Australia's premier island resort of Hayman.

Each of the units has an estimated value of A$20 million.

Mulpha Australia is a wholly-owned subsidiary of a Malaysian-based, Mulpha International Bhd. Mulpha Australia purchased Hayman in 2004.

The Head of Hotel Investment for Mulpha Australia and managing director of Hayman, Lloyd Donaldson said the residences, represent the first private ownership opportunity ever offered at Hayman.

One of the top resorts of the world, Hayman Island is located 33 kilometres east of Australia's North Queensland coast, nestled between the coast and the Great Barrier Reef in the country's fabled Whitsunday passage.

Within Hayman, stylish elegance reflects the harmonious freshness of the tranquil surrounds.

"I've got the development approval for 20 units of these homes. But at this stage, we are going to develop only eight homes.

"I have already sold three, so I have five (units) available," he told Bernama in an interview.

Donaldson said the homes are designed by internationally renowned Singaporean architect, Kerry Hill.

"The houses are approximately 1,000 sq metres and the land at about 5,000 sq metres. The houses are also about 88 metres above sea level, having a sweeping view of the entire Great Barrier Reef.

"The type of buyers we are looking for are, ultra high net-worth individuals, looking to purchase a legacy asset," he added.

Donaldson said the homes, now under construction, will be ready by the middle of 2013.

He also said that the buyers can make use of the facilities at its 210 suite resorts.

Hayman Island is also a great attraction for the rich and famous as well as honeymooners.

By Bernama

Banyan Tree comes to KL

Lai: ‘Buyers draw comfort from the brand recognition of Banyan Tree.’

The collaboration between local developer Lumayan Indah Sdn Bhd and Singapore-based Banyan Tree Holdings Ltd will see the opening of the luxurious Banyan Tree Signatures Pavilion Kuala Lumpur hotel in 2016.

The Banyan Tree Signatures Pavilion Kuala Lumpur project with a gross development value (GDV) of RM1.4bil comprises a 55-storey block of 441 private residences, 51 service residences, and 50 hotel suites.

It is located on 1.46 acres at the junction of Jalan Conlay and Jalan Raja Chulan, and is scheduled for completion in 2015.


The Banyan Tree Phuket is the flagship property of the Banyan Tree Group, known for its high standards.

According to 1 Pavilion Property sales and marketing director Tracey Lai, buyers draw comfort and confidence from the brand collaboration of Banyan Tree, a respected global hotel brand and Pavilion, an iconic award winning premier shopping mall.

Banyan Tree, listed on the Singapore Stock Exchange, is a leading manager and developer of premium resorts, hotels and spas around the world.

Lai says Banyan Tree will operate the 50 hotel suites and manage the private and service residences, while 1 Pavilion Property Consultancy Sdn Bhd is the sales and marketing consultant of the Banyan Tree Signatures private residences.

“With this collaboration, the Banyan Tree trademark can be used to promote, market and sell the Banyan Tree Private Residences. Since the sales preview of the project in July, the response has been good with a take up rate of 80% mainly from local buyers,” Lai discloses.

With average sizes of 1,076 sq ft to 2,174 sq ft, the residences are priced at an average RM2,000 per sq ft, with vacant possession of the residences in 2015.

At 55 stories, she says the project will be one of the tallest residential buildings in the country, and a private link bridge to the Pavilion Kuala Lumpur shopping mall allows exclusive access to the mall.

More Banyan offshoots

Banyan Tree executive chairman Ho Kwon Ping hopes the company's entry in Kuala Lumpur's hospitality market will pave the way for more hospitality projects in Malaysia.

“We are on the look out for other opportunities in East and West Malaysia, and hope to be able to make some announcements in due course,” he discloses to StarBizWeek in an email response.

Ho says Banyan Tree typically opts for stunning locations and also gateway cities for its resorts, with the hope of creating unforgettable holiday and travel experiences for its guests.

“Banyan Tree Signatures Pavilion Kuala Lumpur will be a new and innovative product concept offering a suite of diverse and complementary facilities and services spa, a retail gallery and a destination roof-top restaurant anchored by an iconic hotel and primary luxury residences.

“We look to offer a holistic lifestyle encompassing dining, shopping and relaxation delivered with the signature Banyan Tree service standards,” he explains.

On its expansion plans, Ho says there will be more hotels and resorts, integrated resorts, as well as property development projects where appropriate.

“Next year, we look forward to the opening of Banyan Tree Tianjin, Banyan Tree Riverside and Banyan Tree North Bund in Shanghai; the integrated resort of Banyan Tree and Angsana Lang Co in Vietnam; and Banyan Tree Kerala, to name a few. Further afield, we have projects lined up in Europe, particularly in the Mediterranean region.”


Ho: ‘Banyan Tree has always believed in being different from other hotel brands.’

Ho believes Banyan Tree's pioneering and can-do spirit has steered the company to many uncharted territories to earn its place as one of the industry leaders.

The group's first resort Banyan Tree Phuket, which opened in 1994, was the result of the successful rehabilitation of an abandoned tin mine in Laguna Phuket.

Today, Banyan Tree has over 30 hotels and resorts, close to 70 spas and 80 retail galleries and two golf courses.

As of end-2010, the total equity value of its investments around the world is in the region of US$1bil net of any debt.

The net asset value of Banyan Tree Holdings is around US$540mil and the total cash equity in the two Banyan Tree Hospitality Funds (for Indochina and China) is around US$450mil.

Ho discloses that Banyan Tree has around 30 projects in the pipeline and singles out China as the strongest growth region. It has a strong presence and pipeline of projects in China.

“Given the general economic climate in the world, our investments in the core regions of the Asia Pacific, including China, are performing reasonably well. Much of the downturn in our traditional European and Japanese markets has been mitigated by strong performance from China, where our brand is strong. We have around 10 marketing offices in China now,” he adds.

Ho says growth in the Asia Pacific is still quite stable and the new markets for the company include Vietnam, the Indian Ocean and India.

Flagship property

“We are looking to double our properties by 2015, and will be opening five to six hotels a year. This year alone, we opened Banyan Tree Macau, our newest and latest urban resort, and soon to be opened will be Angsana Hangzhou, our second resort in that city; Angsana Balaclava, our first property in Mauritius, as well as Angsana Laguna Phuket, our flagship Angsana property on the island with more than 400 rooms/suites, and exciting facilities for families, meetings and holiday makers,” Ho discloses.

Meanwhile, specific properties have been affected by local conditions such as Bangkok which was hit by riots last year and floods this year.

As for Europe, he says although the region is suffering the worst recession in many years, there are still opportunities to be found.

To tap on opportunities when they arise, Banyan Tree has established an operational, business development, and marketing office in London.

According to Ho, Banyan Tree has always believe in innovation in its products and designs “to be different than other hotel brands.”

Among its innovations include the all pool-villa concept, with the birth of Banyan Tree Phuket 17 years ago; the tropical garden spa concept; and being one of the largest spa operators in the world with its own Spa Academy that provides therapists with no less than 350 hours of training. At its urban resorts of Banyan Tree Seoul and Banyan Tree Macau, relaxation pools are installed in every suites.

The recently opened Banyan Tree Spa in Singapore, located on level 55 of Marina Bay Sands, features the concept of “an oasis in the sky” with therapists offering treatments that are signature to the Banyan Tree Spa experience.

Ho says Banyan Tree is also a strong supporter of corporate social responsibility initiatives and believes in working with and giving back to the community.

“We believe in a sense of culture and place, and I am interested in how our resorts can be an impetus for social-cultural and economic change for the local people,” he adds.

By The Star

CBRE aims to double Asia property portfolio

Kuala Lumpur CBRE Global Investors, which has a portfolio of US$5 billion (RM15.8 billion) invested in Asian real estate, aims to raise and invest another US$5 billion in the region within three to five years.

"We're looking to double the size of our Asian business," said Asia chief executive Richard Price in an interview yesterday.

"I think it's an achievable goal."

The company will invest the money in China, Indonesia, Japan, South Korea, Malaysia and Singapore, Price said, favouring retail property in markets such as China and Southeast Asia, where greater consumer spending power is supporting shopping centre development.

Japan is CBRE Global's biggest market in Asia, with US$2 billion invested in office buildings, residential property, shops and industrial space. Although Japanese investment property was the worst performer in Asia last year, with a gain of just 0.1 per cent according to property market tracker Investment Property Databank, large investors now consider it a safer market at a time many others are seeing prices fall.

"We think cyclically Japan looks interesting again for income-focused investors," Price said.

"It's close to the bottom of the trough for Tokyo rental prices. The impact of the earthquake has made a lot of older (office) stock obsolete and is causing a real flight to quality," he added.

China would be another key focus, Price said, and should account for 20 per cent of the portfolio, or US$2 billion.

The company has invested US$1 billion over the years in China, but only has an equity of about US$300 million because it has invested mainly in residential projects via joint venture partners who have sold off apartments as they built them.

Those projects have seen it collaborate with some of the country's largest developers, including China Vanke Co Ltd and Longfor Properties Co Ltd.

Los Angeles-based CBRE Group Inc took over the bulk of the property business of Dutch company ING Groep NV in a US$1 billion deal that closed on October 4 for its Asian assets and on November 1 for its business in Europe. That gave the company US$95 billion in assets under management at the end of September.

By Business Times

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

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

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

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

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