Protecting local house buyers

Out of reach: House prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang.

INCREASING the floor price of residential property for foreign buyers from RM500,000 to RM1mil will be a positive development for the housing market, according to analysts and consultants.

Many quarters are in favour of the move to raise the floor price as it would protect the housing market for the masses.

They say the move is timely due to the continued uptrend in home prices which are forcing financiers to start providing “second-generation” type of home loans which extend the servicing of the debt to the purchasers' children.

Sarkunan: ‘I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil.’

Property consultancy Knight Frank's executive director Sarkunan Subramaniam says the increase in floor price for foreigners would be positive as it would benefit the local buyers as the foreigners have been pushing up house prices.

“I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil. However, there could be some slight impact on foreign purchasers in Johor who choose to stay in Johor Baru but work in Singapore,” Sarkunan tells StarBizWeek.

Hong Leong Research's property analyst Sean Lim says that the move is “positive for the domestic buyers who have been frustrated by the rise property prices over the last two to three years”.

Lim says in a report that the impact on the overall property market will be minimal as “less than 5% of all transactions is by foreign buyers”.

Lim also states that the RM1mil floor price could be irrelevant as most foreign buyers are buying in the KL City Centre area and the Golden Triangle in Kuala Lumpur with valuations in excess of RM1,200 per sq ft.

“In the greater Klang Valley area, channel checks indicate that majority of foreigners are renting instead of buying houses,” Lim says.

Lim maintains his overweight rating on the property sector.

Koh: ‘A limit on foreigners which allow them to buy only houses that are priced above RM1mil will protect the mass market segment of residential properties and see less competition.’

DTZ Debenham Tie Lung executive director Brian Koh says that the latest measure that is being considered by the Government will help protect the mass segment of residential properties from foreign speculation.

“A limit on foreigners which allow them to buy only houses that are priced above RM1mil would protect the mass market segment of residential properties and see less competition,” Koh says.

“There may be some impact on the foreign buyers of houses that are priced RM800,000 and above.

“But most foreigners normally buy properties above RM1mil so there will be limited impact on the property sector. These foreigners are from Hong Kong and Singapore,” Koh says.

Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.

CB Richard Ellis Malaysia's managing director Allan Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.

CIMB Research says in a research note that it is “not entirely surprised by the proposed ruling as house prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang”.

“We believe the impact on developers with significant foreign buyers such as Eastern & Oriental Bhd would be minimal. Only 2.4% of residential properties transacted in 2011 were priced above RM1mil and foreigners typically chose higher-end properties,” it adds.

Should this higher floor price be approved, it would also mean protection for the mass market segment of property purchasers.

The Government intervention into the property market with the objective of eventually cooling down house prices to more realistic levels is also in line with the current trend by governments in Singapore, Indonesia and China.

Analysts say that the move shows how much property prices have spiralled locally and that the move is proactive amid growing fears of a property bubble.

An economist with RHB Research Institute says that sustained high property prices and news about financiers starting to offer second generation loans show the seriousness of the non-affordability issue.

“These financiers need to stretch the loans to the second generation which only indicate that houses are becoming unaffordable for a normal salaried person,” RHB Research said.

“From an economic point of view, if affordability issue continues to deteriorate it would not be a good feeling for the people. Moreover, these second generation loans may have legal implications as the financiers don't know the credit rating of the children of the current buyers,” the RHB spokesperson added.

A senior analyst with a foreign research house observes that property prices have sky-rocketed and reckons that the current prices are unrealistic.

“I think the Government should implement the measure immediately.

“There is no doubt that looking back, prices were more realistic in the past without people having to extend the loans to their children.

“The trend is for developers to offer small-sized units nowadays as the prices keep going up. The houses are becoming smaller and smaller because of the rising cost factor,” he adds.

According to statistics of the Valuation and Property Services Department, the number transactions for properties priced up to RM150,000 decreased year-on-year by an cumulative average of 30.6%.

By The Star

Naza TTDI boss shares his vision

Naza TTDI deputy executive chairman cum group managing director SM Faliq SM Nasimuddin, 27, took over the helm at Naza TTDI in February 2009. He shares his vision and plans for the company with StarBizWeek deputy news editor ANGIE NG in this question and answer session.

StarBizWeek: What is your vision for Naza TTDI and what are the key performance indices for the company in these 2 years?

Faliq: Naza TTDI's vision is to be in the country's top property developer league in the next five years. Our vision will be met by the development of our high impact projects such as the KL Metropolis and Platinum Park and supported by our “bread and butter developments” townships such as TTDI Alam Impian and TTDI Grove Kajang.

For 2012, we are targeting to reach a RM1bil turnover.

How has the company evolved as a property developer and are you happy with its performance so far?

From a developer that developed the award-winning Taman Tun Dr Ismail (TTDI) township in Kuala Lumpur, I am proud to say that we have not only maintained our position as a premier township developer but also over the last few years evolved into the development of high-impact projects such as the projects mentioned above.

The Naza TTDI brand has stood well among our potential buyers and customers. We have received both international and national recognition for our product, quality, innovation and brand through awards and certifications such as the Asia Pacific Property Awards, Cityscape Asia, FIABCI, Brandlaureate, ISO Certification MS9001:2008 and QLASSIC Certification.

What do you count as the major achievements and milestones of the company?

Thirty-nine years ago, the company started off as a township developer by developing Taman Tun Dr Ismail in Kuala Lumpur. By and by, we ventured into boutique developments (TTDI Adina, Shah Alam and The Valley TTDI, Ampang) as well as commercial developments (Laman Seri Business Park, TTDI Dualis and Jayamas 3). Now, we have embarked on high-impact projects such as the Platinum Park which is set to be a prime mixed integrated development in the KLCC vicinity and KL Metropolis which is positioned to be KL's International Trade and Exhibition District.

As can be seen from our track history, we have grown by leaps and bounds in just nearly four decades. Thus, I would say that our major achievement is in being a “full-fledged” property developer in just four decades.

What are some of the challenges that lie ahead for the company and the property market in general?

For the company, the challenge we face is to constantly suit market demands. Looking at market trends for the greater Kuala Lumpur and Klang Valley areas, we see that buyers are now opting to buy smaller residential units. Thus, we now put more focus in developing residential properties which are space efficient with enhanced safety and security features for the increasing demand by executives and those with smaller families.

Parallel to introducing the right products for the market, we are also continuously improving our product quality and features so as to maintain our 39 years of brand legacy.

How do you describe the company's property projects so far in terms of design and concept?

Our concept is simple: Affordable luxury backed by a good track record in delivery and quality.

On top of that, we are continuously injecting technological advancements and innovative designs that will translate into a source of architectural pride and meet customer's expectations.

This is evident from the strong brand following that we enjoy where almost a third of the purchasers for any new launches are our repeat buyers.

(click image to enlarge)

Which are the projects you are particularly proud of and why?

The Platinum Park and KL Metropolis.

Platinum Park marks our first foray into a high impact project development which makes us one of the few developers in this league. The 9.1-acre development is located in one of the biggest contiguous land in the KLCC area where we will build compelling components such as professional spaces, residential, retail and hotel that will integrate with 1.5 acres of public space. I believe that our collaboration with acclaimed architect, Fosters & Partners, in the master design of this development will make Platinum Park an international landmark and destination in Kuala Lumpur.

As for the development of KL Metropolis, we are proud to play a role in the country's goal to be the premier and preferred MICE (meetings, incentives, conferencing and exhibitions) destination in the region by creating Kuala Lumpur's first international trade and exhibition district. In the design of the master plan, we have incorporated these conducive elements, MICE focused facilities, convenient access for logistics and transportation, hotels, grade A offices, regional retail centres and public spaces.

These two mega projects are our flagship developments which will propel the company to the next level.

Following the launch, we received a lot of enquiries and response from local and international investors. Having worked with both local and international architects such as Fosters and Partners and Skidmore, Owings & Merrills to develop the master plan for Platinum Park and KL Metropolis respectively, I believe these developments will be new landmarks and benchmarks of architectural excellence in our country and, perhaps, in the region.

What is your outlook for the local property market and expected performance of the various property sub-sectors?

Our outlook for the local property market is moderate. But backed by the Government's Economic Transformation Programme, we believe the property market especially in the Greater Kuala Lumpur and Klang Valley will continue to prosper especially with the establishment of new growth areas as well as initiatives for the provision of transportation facilities and accessibility. As long as the buying activities are supported by economic fundamentals and genuine purchases, we are confident that the local property market in Malaysia will continue to be on the upside.

By The Star

SP Setia expands its property portfolio into China

It will be a busy period ahead for SP Setia Bhd and Rimbunan Hijau Group as they are in a joint venture with Qinzhou Jingu Investment Co Ltd to develop the Qinzhou Industrial Park (QIP) starting with the RM2.6bil start-up district of QIP.

Spanning 1,945 acres, the start-up district of QIP will give SP Setia a foothold in the vast China market as it now owns 45% equity stake in a Malaysian joint-venture (JV) company known as Qinzhou Development (M) Consortium Sdn Bhd.

Qinzhou Development will hold 49% stake of the China-Malaysia Qinzhou Industrial Park Investment Co Ltd (QIPIC) to be formed with Qinzhou Jingu as its JV partner.

SP Setia executive vice-president and chief financial officer Datuk Teow Leong Seng tells StarBizWeek that the sizeable and high-profile nature of the project was envisaged to provide a significant boost to its long-term ambitions of achieving meaningful and sustainable overseas expansion, which already included projects in Australia, Vietnam and Singapore.

“QIP presents a unique opportunity for the group to participate in the development of a government-to-government (G2G) supported project that is well-placed to benefit from the growth in China-Asean trade and China's own continuing economic growth,” he says.

Besides SP Setia, Rimbunan Hijau has a 45% stake while Datuk Beh Hang Kong and James Lau Sze Yuan own 5% stake each in the Malaysian JV.

Though details remain scarce as the parties are still in the framework stage of the agreement, Teow said that investors and enterprises registered in the QIP could look forward to a 15% reduced corporate income tax rate and a host of investment friendly incentives to encourage industries registered in the QIP.

The Chinese premier proposed the QIP during the Malaysia-China Economic, Trade & Investment Cooperation Forum in April 2011, and it will become the third industrial park in China to be developed under a G2G collaboration, following Suzhou Industrial Park and Tianjin Eco-City.

Though the Chinese government had recently introduced several cooling measures to curb rising property prices, the challenges met by foreign parties attempting to tackle Chinese market might still be a concern.

“Your network or guanxi is the way things are done in China, and your guanxi could open many doors for you. Looking at the joint venture between the Malaysian parties and Qinzhou Jingu, communication barrier is non-existent and it seems that the mentioned parties can get things going, with the backing of the Chinese and Malaysian governments,” says an analyst.

He says the cooling measures implemented might also bode well for the JV as steady property prices might not expose the companies to volatile market trends.

To sweeten things, the Chinese government has also pledged that all preferential policies of China's West Region Development and Guangxi Beibu Gulf Economic Zone would be applicable to the QIP.

Apart from that Qinzhou Jingu has also committed to inject the land into the JV vehicle, QIPIC, at cost price and not seek any profit from its capital contribution by the provision of land.

QIP consists of five functional districts, which are industrial, residential, supporting facilities, port new city production central, life central and scientific and technology research service.

The industrial park is located 10km south of Qinzhou City and 5km north of the Guangxi Qinzhou Free Trade Port Area, a national economic and technological development zone.

Maybank Investment Research says QIP is strategically located between the port cities of Beihai City to the east and Fangchenggang City to the west.

“The former is a developing hub for shipping oil between South-East Asia and China and the latter is a major regional shipping and trade hub between Guangxi and Vietnam. QIP is accessible from these two port cities and from Nanning to its north via existing expressways,” it says.

The added accessibility to QIP would be improved upon the completion of the Liuging-Qinzhou Expressway and the Coastal Highway to the South.

By developing QIP, the new JV vehicle is also trying to get its hands on the more developed Binhai New Town. It is seeking approval from the Chinese government to allow up to 30% of the commercial and residential land in the start-up district to be swapped for another piece of commercial and residential land.

This deal will ultimately allow the JV company to gain access to be part of the development at Binhai New Town, which has a total planned area of 110 sq km and a net development area of 45 sq km.

Hong Leong Investment Bank Research says in a report that the latest development demonstrates the company's commitment to overseas expansion despite their previous setbacks in China and Vietnam.

“Positive but hard to quantify, given the lack of information on gross development value and product mix. We believe SP Setia's products will likely be landed townships similar to Bandar Setia Alam, catering to local conditions over there,” it says.

“We also see this as a harbinger of future goodies domestically, as we consider SP Setia a potential frontrunner for government-redevelopment projects in Sungai Buloh, thanks to its Permodalan Nasional Bhd parentage,” it says.

By The Star

Investing in foreign property seems harder now with changing rules and economic climate

With the permission from my friend, and with her thoughts on investing in London, this piece is about her considerations when buying into a unfamiliar foreign market.

For quite a while, she and her husband have been considering the option of buying a residential property in London. She attended seminars on properties and lettings, spoke to other potential investors and those who have already invested.

After a long deliberation with her spouse, they both decided to keep their money closer home.

It was not the 2012 Budget announced on March 22 by the Chancellor of Exchequer, equivalent to finance minister, and the slew of changes that govern foreigners buying British properties that made them change their minds. They had made up their mind to drop the idea before that.

They had other considerations. The first was the distance and they questioned the practicality of having to deal with long distance administration issues, be it ownership or tenancy. The second was the uncertainties that govern the world today. Uncertainties and instability exist all the time, but the last several years, the vagaries of the changing world seem to be coming fast and furious. Added to that were the changing rules and regulations by governments.

Foreign ownership, at one time welcomed, may cease because of national considerations. They also reasoned that at this point in their lives, if they did not sell the property, it would be left to their children.

This couple was not hoping to make lots of money with their overseas investment. Neither were they speculating. They just wanted to diversify while at the same time, preserve the value of what they have.

There are many who have invested abroad. And their reasons for doing so may be well justified. But there is something about changes in rules and regulations, at national level, that add to the current load of global economic, financial and political uncertainties that govern the world today.

“Just as there are changes in Malaysian government rules and regulations about what residential properties foreigners can buy, so are there changes in the United Kingdom,” she says.

She was referring to a report early this week that the Malaysian government was mulling over raising the minimum floor price of houses that foreigners were allowed to buy from the current RM500,000 to RM1mil. The move is to control the rise in property prices.

In the same way, other governments around the world too would make changes to suit their national agenda.

Last December, the Singapore government imposed a 10% additional buyer's stamp duty applicable to all foreign purchasers, bringing it to 13%. Foreigners were snapping up about 9,300 private homes last year making it a record one-third of total sales.

Early this month, Singapore government announced that it would end a programme that allowed wealthy individuals to gain permanent residence quicker by putting money in the island, after an influx of foreigners in recent years spurred property prices and fueled voter anger, Bloomberg reported.

Back in 2010, Australia tightened rules on foreign investment in real estate, and introduced penalties to enforce the changes, to ensure pressure was not placed on housing availability for local residents. Temporary residents required approval from the Foreign Investment Review Board to buy property, and had to sell them when leaving Australia.

About three weeks ago, the British government introduced a new Stamp Duty Land Tax (SDLT) rate of 7% for residential properties over £2mil, applicable from March 22 this year.

London-based property consultant Knight Frank in an initial note on the changes says there would be a new 15% SDLT application from March 21 this year for residential properties over £2mil purchased by “non-natural persons”, such as companies.

The British government is also consulting on the introduction of an annual charge on residential properties valued at £2mil owned by “non-natural persons” (that is, properties bought in the name of companies). The intention is to legislate this in the 2013 Finance Bill and if this goes through, this annual charge will commence April 2013.

A fourth issue is an extension of the capital gains tax to gains on the disposal of UK residential properties by non-residents, non-natural persons, such as companies, commencing from April 2013.

In other words, says Knight Frank, the British government was saying that if you bought expensive residential properties as individuals, rather than a company, you would pay 7% and not 15% SDLT, and avoid a future annual charge.

The rationale is to target rich individuals who buy in the name of a company. However, property consultants and lawyers say individuals may come using a company vehicle because they wanted to protect their privacy and not to avoid paying a hefty 40% inheritance tax.

Whatever it is, to avoid all that hassle, my friend has decided to just keep her money closer home.

Assistant news editor Thean Lee Cheng thinks the vagaries of today's global outlook, coupled with changing national rules and regulations, make any investment a colossal consideration.

By The Star (by Thean Lee Cheng)

Should we park and ride?

RECENTLY, one of my long-serving staff decided to give up her job. In most cases, people leave a job for greener pastures. Her case was different.

She lives at one end of Kuala Lumpur (KL) and works at the other end of KL. It would be reasonable to believe that travelling within KL should be a breeze. Yet, on average she spends up to three hours each day on the road to travel to and from work. While she loves working with the company, the tiring years of spending many hours on the road has worn her down and her family time has been greatly shortened.

To many, the announcement of the Klang Valley My Rapid Transit (KVMRT) project is like a timely rain to ease the drought. The development of public transportation dictates the ease of mobility and connectivity in a city, which is a key factor for KL to become a world-class city, and for Klang Valley to elevate to the next level.

Attractive line

Being an architect and a developer, creating quality lifestyle has always been my keen interest, and I do look forward to the development of KVMRT. The first Sungai Buloh-Kajang line that has 51km in total length is expected to generate great benefits along the route once it is completed.

It will attract more people to move into Klang Valley, achieving the mission of growing the Greater KL's population, and eventually spurring the development of the country.

As the MRT project shoulders the important role of changing lifestyles of a huge population, it is important to be prudent in every single detail right from the planning stage to ensure the desirable outcomes are achieved, to the benefit of all, including the owner and operator of the MRT, as well as its end users.

Serving its purpose

Based on the plan, the Sungai Buloh-Kajang line is targeted to serve a catchment of 1.2 million people with 31 stations in total. Thirteen of these stations are expected to have the park-and-ride facilities. How viable are these facilities? Will they do more harm than good in solving the issue of traffic congestion, scarcity of land for housing and preservation of environment?

Before we delve further, let's ask ourselves this question: “How far are we prepared to walk under Malaysia's tropical weather?”

Answers may vary but the average acceptable distance will be 300m to 500m. If this is the comfortable distance for people to walk to the MRT stations, how many cars can we accommodate within the neighbourhood of this radius? How big a space should be allocated as parking bays next to the stations?

If one acre is allocated, it can only accommodate 150 cars, which is too few to satisfy the demand.

If the car park area is increased to three acres for 450 cars, it will be a huge waste of valuable space as the land next to the MRT station is a prime property. The construction and maintenance costs of these car parks will result in high parking fees for the users. Unlike shopping complexes which can charge reasonable parking fees to attract more shoppers and in turn, subsidise its car parks' maintenance cost.

In some developed countries, the same piece of land would be used to develop high rise dwellings or commercial buildings.

For example, instead of constructing a car park, the same three acres can be utilised to build 450 units of apartments of 1,200 sq ft each.

The idea of constructing 1,200 sq ft apartments will also attract more middle income group who can afford to own cars to use MRT instead. This will generate more volume to the MRT stations, increasing the economy of scale and thus lowering the price of ticket.

These stations will eventually become centres of attraction for commercial activities, creating more business and employment opportunities for the areas.

In addition to constructing high-rise buildings nearby the stations, feeder buses can be used to increase the accessibility to the MRT station. The MRT operator must ensure the feeder buses are frequent and timely in delivering reliable services to MRT commuters. Another option is to build covered walkways to encourage more people to use the MRT facility.

Riding quality

In order to attract people to stay near the MRT stations, noise and pollution from the MRT system should be reduced. One of the most effective ways of doing so is to go underground.

We should have more underground stations to ensure the quality of living for those who stay around the stations. Such areas can later on be expanded to become commercial hubs, complementing the existing business activities on the ground, such as what have been practised in Singapore, Hong Kong and Taipei.

Going underground may be expensive. Nonetheless, one has to consider the economic and social impacts of MRT stations in the long run. If it is not viable to go underground, are there any other options that are worth considering? What about building an elevated tunnel enclosed with fiberglass (similar to our KLIA's Skytrain) to cut down noise pollution?

There are many possibilities that can be explored with the development of MRT system. With proper planning, MRT system can ease the traffic flow and enrich quality of life for the people living in Klang Valley. However, with park-and ride stations, the concern is, does it serve the purpose of easing traffic congestion within if MRT commuters still need to drive to MRT stations?

Datuk Alan Tong is the group chairman of Bukit Kiara Properties. He was the FIABCI world president in 2005-2006 and was named Property Man of The Year 2010 by FIABCI Malaysia.

By The Star (by Datuk Alan Tong)

Far East upbeat on property sales

FAR East Organisation, a private developer with an annual revenue of S$5.5 billion (RM13.4 billion), expects investors from Southeast Asia to continue buying its properties despite the global turmoil.

The diversified group is targeting property buyers from Malaysia, China and Indonesia, said its chief operating officer Chia Boon Kuah.

This is because they accounted for a majority of property sales to foreigners last year.

According to a report by Savills Singapore, about 9,300 of the 15,904 properties sold last year were acquired by foreigners, and Malaysia took 20 per cent of the share.

Chia said for properties launched by Far East, Malaysians bought mainly in Woodlands, Bukit Batok and the Thompson area, each worth between S$1 million (RM2.45 million) and S$3 million (RM7.3 million).

"The buyers were mostly from Johor, followed by Penang and Kedah. Malaysia is an important market to us. It is the second biggest market after Indonesia," Chia said in an interview recently.

He said the group will continue to attract investors from Southeast Asia who want to be part of Singapore's growth story.

"Demand for property is there because wealth is growing. There is enough liquidity and foreigners continue to find Singapore attractive despite cooling measures by the government to curb speculative buy," Chia said.

But Far East is launching three to four projects less this year, compared with 14 in 2011. It is also targeting to achieve S$3 billion (RM7.3 billion) in property sales this year, lower than the S$4 billion (RM9.8 billion) achieved last year.

"We had the highest market share of 25 per cent last year in terms of property sales. We are lowering our sales target because demand for properties is expected to slow down in the second half of this year," Chia said.

Far East had launched five projects since early this year and achieved sales of S$1.8 billion (RM4.4 billion).

Some of the group's recent projects which had attracted Malaysians included Alba, Boulevard Avenue, Orchard Scotts, The Scotts Tower, Woodhaven and Watertown.

"We hope to maintain our 2011 revenue of S$5.5 billion this year but it would be challenging. We are bullish on the hospitality market and room sales have been holding strong so far," Chia said.

Far East, founded in 1960, owns and operates the largest corporate leasing and hospitality portfolio in Singapore, including eight hotels and 11 serviced residences.

By Business Times

Bumiputera property expo sees RM50m sales

The 5th Bumiputera Property Exhibition 2012 (BPEX 2012) is projecting RM50 million in sales and some 30,000 visitors this year.

The expo, which started yesterday at the Mid Valley Exhibition Centre in KL, will end tomorrow. It showcases RM2.3 billion worth of properties located mainly within the Klang Valley and Negri Sembilan.

A total of 50 property developers showcased their current and future development at BPEX 2012 including IJM Land, MK Land, SP Setia and Sime Darby Properties.

The properties featured include both residential and commercial developments ranging between RM70,000 and RM7 million per unit.

"About 60 per cent of our visitors are those looking for residential properties.

"BPEX 2012 is like a one-stop centre for those looking for residential areas within the Klang Valley," said organiser MMC Sdn Bhd managing director Shikin Taib.

"The exhibition also gives a chance to those who are looking for a house under the My First Home Scheme," she added.

There will be two more series of BPEX 2012 this year, which will be held between July 14 and 15, and November 23 and 25 at the Putra World Trade Centre here.

By Business Times

Tabung Haji to invest RM975m in UK property

KUALA LUMPUR: Tabung Haji expects to make at least one investment amounting to £200mil (RM975mil) in a commercial property in the United Kingdom this year.

Its managing director and chief executive officer, Datuk Ismee Ismail, said the property had been identified for investment from a study carried out since 2008.

Among the considerations taken in the study included the adherence to syariah principles.

“We had to be careful as we needed to study each of the tenant company occupying the property and ensure their compliance with syariah,” he told reporters after signing the Malaysian Corporate Integrity Pledge here yesterday, along with his senior management, CEOs of subsidiary companies and 450 members.

Tabung Haji yesterday became the first government-linked investment company to have taken the corporate integrity pledge in order to bring up further its corporate governance, accountability and culture of transparency.

By Bernama

Boustead plans shopping centre with Ikano

KUALA LUMPUR: Boustead Holdings Bhd plans to develop and manage a shopping centre here with Ikano Pte Ltd, the operator of Ikea stores in Southeast Asia.

In a statement yesterday, Boustead said its wholly-owned subsidiary Mutiara Rini Sdn Bhd had entered into an agreement with Ikano to form a joint-venture company called Circuit Wealth Sdn Bhd.

Mutiara Rini and Ikano will eventually each contribute RM100 million to the issued and paid-up capital of the joint-venture company.

Boustead said the joint-venture company will acquire land from the Armed Forces Fund Board for the shopping centre.

By Bernama

AP Land bungalows attract good response

AP LAND Development Sdn Bhd is confident of selling all its luxury bungalows situated in Kampung Paya Jaras, Selangor, as soon as possible.

Its chairman Datuk Nazrul Arsad said the 16 unit bungalows, called Puncak Residence Sg Buloh, situated on a hill and will be completed within the next 24 months.

"The gross development value for this project is RM20 million," he told reporters at the groundbreaking ceremony held at the site yesterday.

He said currently only five to six units are still available for sale, while the rest have been already booked.

"We managed to sell all of the units because people like the concept of these bungalows which has its own swimming pool. Our concept is also unique because its luxury living in a kampung," added Nazrul.

Each unit, he said, was sold between RM1.5 million and RM2 million.

"It's a good deal because we are not that far from Kota Damansara (a prime area which houses Ikea)," he added.

He said the bungalow units were two storeys each, six bedrooms and has an individual built up area of 3279.67 sq m from 5344 sq foot land area.

AP Land, which has been in business for the last 12 years, will also be building the Project Rumah Rakyat in Kuantan, Pahang, worth RM300 million and Kooperasi Perumahan Angkatan Tentera in Perak worth RM800 million this year.

"Our company will remain private entity. There is no plan to list it on the local bourse. At present, our order book stands at RM1.3 billion and last year, our net profit stood at RM200 million," he said.

He said the company will concentrate on building affordable homes and work on getting more joint ventures with the government.

By Business Times

Axis REIT buying industrial assets

PETALING JAYA: Axis Real Estate Investment Trust (REIT) is proposing to acquire two leasehold industrial properties near Nilai, Negri Sembilan, from LRS Property Sdn Bhd for RM26.5mil.

The REIT manager said in an announcement to the stock exchange that the proposed acquisition would be paid for in cash and that the properties were tenanted with various term leases.

By The Star

Billion-ringgit tower atop LRT station

Yong says the tower will be built by Crest Builder-Detik Utuh joint venture with Prasarana providing the land.

Project to be developed by joint venture

PETALING JAYA: In what may be Syarikat Prasarana Negara Bhd's most ambitious project yet to unlock value from its real estate, the national public transport operator is partnering with a developer to build a billion-ringgit tower atop its Dang Wangi light rail transit (LRT) station.

The project, won by Crest Builder Holdings Bhd and its 49% joint-venture (JV) partner Detik Utuh Sdn Bhd two weeks ago, is for the construction of a single-block mixed development fronting Jalan Ampang with a gross development value (GDV) of RM1.04bil.

It will be a herculean task for low-profile Crest Builder, not least because the proposed building would tower over the neighbourhood at 40 storeys.

Nonetheless, executive director Eric Yong is excited about its prospects.

“The LRT below is really the key selling point. If this was just bare land, we probably couldn't have got this value and concept.

“The main thing here is that you already have 8,000 to 10,000 people passing through the station everyday,” he told StarBiz in an interview.

The yet-to-be-named project, which will be built on 2.72 acres, marks the Petaling Jaya-based developer's maiden foray into high-end properties since announcing the move last year.

The plan, for now, is to build a tower cut into four segments: a mall at the bottom, small office flexible office (sofo) units, upscale serviced residences, and on the highest floors, a five-star hotel.

To monetise the view at the top, the building could feature a Skylounge with a pool facing KL City Centre as well as a Skygym or Skydeck, Yong said.

He pointed out that they were still deliberating whether to add a layer of office suites, in which case the hotel would be done away with.

The tower would have 50 floors to accommodate eight to nine levels of duplex sofo units.

Its planned total gross floor area measures 1.1 million sq ft while net floor area is close to 830,000 sq ft.

Following the agreement with Prasarana, the LRT owner and operator will receive 21.2% of the project's GDV as payment for land rights, which translates into RM220mil, or about RM1,857 per sq ft.

When contacted, its media affairs manager Azhar Ghazali said the funds would be used to part-finance its operations.

Prasarana will only provide the land; the rest of the development cost is to be borne by Crest Builder-Detik Utuh.

“Some may say (the land cost) is expensive but we're not looking at the market right now. It will be completed in 2017. By then, I think the market would have tumbled a little, corrected a little and maybe even shot up two-fold.

“It is expected that in the next six to nine months, the property sector will be under pressure from the tighter lending regulations but the market will evolve. Malaysian properties are still cheap compared with Singapore or Hong Kong,” Yong said.

Physical works for the project is expected to begin in early 2013 and the launch could be sometime after the middle of that year.

“Plus, we think completing it early may not be beneficial. We could fall into the lower part of the property cycle. Right now, the yield seems to be stabilising downwards.

“We do not know how long this will last, but my guess is (the cycle) will take six to nine months to pick up again,” he added.

Yong believes new record prices for property could emerge in 2017-2018. “The market takes three or so years to recover before it booms. We should see new benchmark prices then,” he enthused.

Asked about Prasarana's intent for the project, he said the state agency had wanted to maximise the potential of its assets.

“They have land in various locations but in this case (Dang Wangi), it was airspace. And because of the LRT, they also want to increase the number of pedestrians.

“If I add this development, assuming that an extra 4,000 to 5,000 people live here and half of them take LRT, we would have added 2,500 people to the system,” he said.

According to Yong, the tower's target customers would include the young and affluent in the banking, finance and marketing sectors.

“Those who can afford premium condominiums but can't buy bungalows yet, and they want to be in the heart of the city with all its lifestyle attractions,” he explained.

With the project being right next to the Klang River, Crest Builder is also readying a proposal for the project delivery partners of the River of Life (ROL).

ROL, a project under the Economic Transformation Programme, involves the beautification and development of a 10.7km stretch of the river within the city centre. Its project delivery partners are Ekovest Bhd and Malaysian Resources Corp Bhd.

“We have not officially approached them yet but we're looking at how ROL can enhance our development in this immediate stretch,” Yong said.

By The Star

UEM Land to showcase properties in Sabah, Sarawak

KUALA LUMPUR: UEM Land Holdings Bhd, one of Malaysia's leading property developers, will be organising several roadshows to promote its latest properties in four cities in Sabah and Sarawak.

They are Kuching, Miri, Sibu and Kota Kinabalu.

UEM Land said in a statement among the projects that will be on display at the exhibitions are Imperia Puteri Harbour, Impiana at East Ledang, Summer VOS and Symphony Hills.

The first leg of the exhibitions will be in three cities in Sarawak - Miri on April 14-15 at the Marriot Hotel, Kuching on April 21-22 at the Hilton Hotel and Sibu on April 28-29 at the RH Hotel. This will be followed by a stop in Kota Kinabalu at the Pacific Sutera Hotel on May 5-6.

"We realise that there is a growing interest for our properties in Sabah and Sarawak," said UEM Land chief marketing officer Siti Mariam Mohd Desa. "These marketing initiatives will not only serve as an excellent promotional platform but will also enable us to meet existing and potential customers to obtain a deeper understanding of their needs."

By Business Times

UEM Land project little affected

Puteri Harbour development prices over RM1mil

PETALING JAYA: The proposed policy to raise the floor price of properties sold to foreigners will have a limited impact on UEM Land Holdings Bhd's developments in Johor, even though a large portion of its buyers there are from abroad.

This is because prices in its Puteri Harbour waterfront development, where foreigners make up some 40% of buyers, have already surpassed the RM1mil mark, well above the proposed RM800,000 threshold, Hong Leong Investment Bank (HLIB) Research said in a report on the property sector.

StarBiz reported on Tuesday that the Government is considering raising the minimum floor prices of houses foreigners are allowed to buy to RM1mil from the current RM500,000 in a bid to prevent runaway house prices.

A decision on this was said to be “in the pipeline” and the implementation would be made by the economic planning unit.

Sources had also told StarBiz the revised guidelines would consider a slightly lower base price threshold of RM800,000 for residential properties in selected economic corridors such as Iskandar Malaysia to ensure their success.

“In the Klang Valley, our channel checks indicate that a majority of foreigners are renters instead of buyers; foreign buyers tend to focus on the KLCC area and the Golden Triangle, and they typically purchase projects with valuations in excess of RM1,200 per sq ft.

“Hence, the RM1mil floor price is also irrelevant to this group of buyers, in our view. We gather that less than 5% of all transactions are by foreign buyers, and we argue that impact will be minimal in light of the current prices,” HLIB Research said.

Meanwhile, analysts think UEM Land's recent purchase of 122.28 acres near Puteri Harbour was done at a good price.

The freehold land, which is under agricultural classification at the moment, was bought for RM93.2mil or RM17.50 psf from Tanjung Bidara Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd.

It is adjacent to Kota Iskandar, the Johor government's administrative centre, and 40km south-west of the Johor Baru city centre.

UEM Land plans to develop the land into a premier residential enclave featuring a mix of canal-front homes with individual berthing and high-end condominiums.

The project is expected to span over seven years, with work to commence in 2013.

In a client note, HwangDBS Vickers Research said the RM17.50 psf price was at the lower end of recent land transactions around Johor Baru.

“The latest transacted price of Puteri Harbour has reached RM220 psf, suggesting vast potential for the proposed land acquisition,” it said.

The 122.28 acres is actually part of a larger 4,500 acres it had disposed to Khazanah as part of a de-gearing exercise in 2006.

UEM Land currently has a land bank of about 5,600 acres in Nusajaya, one of the flagship zones in Iskandar, according to HLIB Research.

With the company now on stronger financial footing, HLIB Research said it was taking the opportunity to re-acquire the land to better implement its original vision for Puteri Harbour.

The brokerage added that the earnings impact from this new acquisition was uncertain at this juncture, although more clarity would emerge in end-2012 when UEM Land submits the detailed layout plan to the authorities for approval.

While UEM Land's management had said it was premature to release a gross development value (GDV) for the land, Kenanga Research has estimated a GDV of RM8bil based on a land utilisation rate of 70% and GDV per acre of RM96mil for Puteri Harbour's Imperia condominium.

By The Star

CIMB-TCA buys Canberra office building for A$226m

THIRD INVESTMENT: Property is on a long-term lease to the government department

CIMB TrustCapital Advisors (CIMB-TCA) has acquired a 12-storey office building in Canberra, Australia, for an estimated A$226 million (RM716 million).

CIMB-TCA, a joint venture between CIMB Real Estate Sdn Bhd and Singapore-based TrustCapital Advisors Pte Ltd, bought 50 Marcus Clarke Street from Walker Corp.

The property is described as A-grade and is said to be one of the largest, newest and best-built assets in Canberra, CIMB-TCA said in a statement yesterday.

The property was constructed in 2011 and is on a long-term lease to the Commonwealth Government Department of Education, Employment and Workplace Relations.

This is CIMB-TCA's third property investment in Australia after 469 LaTrobe Street and 850 Collins Street which are both in Melbourne.

Over the past 12 months, CIMB-TCA has invested some A$450 million (RM1.43 billion).

CIMB-TCA is a unique Asian-based fund established with the objective of investing in high-grade commercial office buildings in key cities of Australia.

The fund's chairman Datuk Robert Cheim said that it will continue to take investors into the Australian real estate market and add value through sourcing, structuring, financing and ongoing asset management.

By Business Times

TAR showcases Malaysia in a tourism park

Kuala Lumpur: Themed Attractions Malaysia, in partnership with Kuala Lumpur City Hall (DBKL), will open a world-class cultural attraction called Malaysia Truly Asia Attractions in the capital in 2014.

The Malaysia Truly Asia Attractions, which forms part of the Greater KL initiative, will sit on a 26.59ha site bordered by the Tugu Peringatan, Padang Merbok, Bank Negara Malaysia’s Lanai Kijang residential complex and Istana Selangor.

This will be a one-stop centre showcasing what Malaysia is and has, that can be experienced in a few hours.

“It is an immersive interactive cultural tourism park,” Themed Attractions and Resorts Sdn Bhd (TAR)’s chief executive officer Tunku Ahmad Burhanuddin said.

TAR is the operational and management company for Khazanah Nasional Bhd’s leisure and tourism division.

TAR has a total of RM2.3 billion in investments up until 2015 to develop attractions in Malaysia.

“It will be a tourist attraction where people can see Malaysia in a nutshell,” Ahmad told Business Times in an interview.

The idea, he said, is to woo transit passengers to visit Malaysia Truly Asia Attractions. “We want them to come out (of the airport) and spend a few hours at the attraction. And we want them to go ‘Wow’! This is what Malaysia is all about.

Next time, I come, I will stay a couple days or weeks.” Apart from cultural elements, it will include gastronomical and heritage components.

“We have a forest there, so it will include experiencing a jungle,” he said, adding that the vegetation in the Lake Gardens area will be maintained.

“This is part of the Greater KL initiative to promote KL as well as promote Malaysia as a destination,” he said. Prime Minister Datuk Seri Najib Razak is expected to launch the project later this year.

By Business Times

Axis REIT buys industrial land, buildings for RM26.5m cash

KUALA LUMPUR: Axis Real Estate Investment Trust (Axis-REIT) is expanding its portfolio of properties with the proposed acquisition of two parcels of indsutrial land with buildings in Labu, Negeri Sembilan, for RM26.50mil cash.

Axis REIT Managers Bhd, the management company of Axis-REIT, said on Thursday the 29,436 sq metres of land with tenure of 99 years expiring in September 2095, was acquired from LRS Property Sdn Bhd. The acquisition was undertaken by OSK Trustees Bhd, the trustee for Axis-REIT.

Axis REIT Managers said the acquisition was to provide unitholders with stable distribution and to achieve growth in net asset value per unit of the fund.

By The Star

CIMB-TCA buys RM710m building in Canberra, its third property in Australia

It is joint venture fund's 3rd property in Australia

PETALING JAYA: CIMB TrustCapital Advisors (CIMB-TCA) has acquired another office building in Australia for RM709.6mil (A$226mil) from the Walker Corporation.

The transaction for an A-grade 12-storey office building in Canberra, which was done with a co-investment partner, is the group's third property acquisition in Australia since it entered the market in early 2011.

The premium-grade asset was constructed in 2011 and is on a long term lease to the Commonwealth Government department of education, employment and workplace relations.

The fund's other assets include 469 LaTrobe Street and 850 Collins Street, both in Melbourne.

It had also invested approximately over RM1.41bil (A$450mil) over the last 12 months.

The fund is a joint venture between CIMB Real Estate Sdn Bhd and Singapore-based TrustCapital Advisors Pte Ltd and was established with the objective to invest in high grade commercial office buildings.

““We are very pleased to have completed the acquisition of this excellent asset with a strong tenant covenant,” said CIMB-TCA fund chairman Datuk Robert Cheim in a statement.

He said the third transaction demonstrated that the fund had the clear intent, the will and the resources to execute deals that would deliver strong returns to its investors.

By The Star

Singapore office rents fall up to 8.8%

SINGAPORE: Singapore office rents declined as much as 8.8% in some parts of the citystate in the first quarter, hurt by the weaker global economic outlook that led firms to hold back their expansion, real estate consultants Colliers International said.

The fall signals the downturn in the office rental market has worsened and Colliers expects more pressure on rents.

Office values held firm in the first quarter, however, as record low interest rates and measures to cool the residential market attracted buyers to the office sector.

By Reuters

PNB aims for steady income from overseas property investments

KOTA BARU: Permodalan Nasional Bhd (PNB)'s move to invest in the real estate business overseas is aimed at good returns, said PNB president and chief executive Tan Sri Hamad Kama Piah Che Othman.

The focus has been on equity investments all this while, he said.

Among the properties acquired overseas include Santos Place in Brisbane, Australia, and three other properties in London - namely One Exchange in Liverpool Street, as well as 90 High Holborn, and Milton and Shire House in Silk Street, Central London.

"In the past, PNB's focus had definitely been on equity investments, but now we are venturing into the real estate sector as it is expected to provide stable returns," he told reporters after officiating at a forum here yesterday on the Economic Transformation Programme and its challenges and opportunities for the east coast region.

The programme was organised by Universiti Malaysia Kelantan (UMK) with the help of the National Professors' Council (NPC).

Hamad Kama Piah, who is also chairman of the UMK board of directors, expressed hope that the congregation of the economic experts and professors would help contribute towards the success of the economic transformation plans for the east coast.

Meanwhile, chief of the NPC's Economic and Management Cluster, Prof Datuk Dr Noor Azlan Ghazali, said the 1,700 members of NPC who are professors from the various institutions of higher learning in the country, both private and public, were capable of providing expertise service in their various sectors towards advancing the country's economy.

By Bernama

Cavenagh Road condo in S'pore up for sale again

SINGAPORE: A freehold condominium right next to the Istana is up for collective sale at an asking price nearly S$200mil under the level the owners aimed for in 2007.

Back then, the Cavenagh Gardens owners asked for S$650mil but failed to get a buyer. They lowered it to S$490mil and still struck out amid the financial crisis.

They have again lowered their expectations, this time with an asking price of S$460mil or S$1,394 per sq ft for the 172-unit block in Cavenagh Road.

That price would give owners between S$2.35mil and S$2.96mil each for their apartments.

The estate's buyers could possibly acquire adjoining parcels of state land which would bring the total site to about 150,000 sq ft.

The potential gross floor area could then reach 310,000 sq ft or more.

Charles Chua, head of investment sales at PropNex, the marketing agent, told The Straits Times on Monday that the improving economy and recent successful suburban collective deals had encouraged the Cavenagh Gardens owners.

“We are predicting that with the influx of foreign investors and the interest of high-end home buyers, this land site has a plethora of opportunities to be developed into high-end residences, serviced apartments or Soho (small office and home office) apartments,” he said.

Colin Tan, research head at Chesterton Suntec International, said: “The main issue for launching such a big tender is whether developers can see and avoid more risks ahead. Currently there are more developers than sites available.”

He added that given Cavenagh Gardens' prime location and price tag, developers could consider forming a joint venture in order to mitigate the risks.

The consideration of a joint venture was also echoed by Nicholas Mak, SLP International's head of research.

He also noted that height restriction imposed on buildings around the Istana due to security reasons would be a limiting factor for developers.

By Straits Times

Seacera buying 55.2ha in Ulu Semenyih

KUALA LUMPUR: Seacera Group Bhd, through its wholly owned unit Seacera Properties Sdn Bhd, is buying a 55.2ha freehold land in Ulu Semenyih, Selangor, from Duta Skyline Sdn Bhd for RM78.13 million.

It plans to develop a mixed development project on the land, which will be bought using internally generated funds and bank borrowings.

Seacera told Bursa Malaysia that the proposed land acquisition is not expected to have an immediate or material effect on the group’s earnings for the financial year ending December 31 2012, but it is expected to contribute positively to the future earnings of the group.

By Business Times

Seacera buys Ulu Langat land

PETALING JAYA: Seacera Group Bhd via its wholly-owned subsidiary Seacera Properties Sdn Bhd has entered into a sale and purchase agreement with Duta Skyline Sdn Bhd to acquire 138 acres in Ulu Langat for RM78mil.

Seacera will satisfy the purchase by way of cash consideration from bank borrowings of RM13mil and the balance from its internally-generated funds.

“The proposed land acquisition is part of Seacera's strategy to continue acquiring sizeable land banks with good development potential in strategic locations, which will provide an opportunity for the company to expand and strengthen its existing business of property development.

“It is also in line with the company's plan to ensure it would become one of its core businesses,” said the company in its filing with the bourse yesterday.

By The Star

SP Setia unit gets SC nod for debt plan

KUALA LUMPUR: SP Setia Bhd’s wholly-owned unit, Setia Ecohill Sdn Bhd, has received approval from the Securities Commission on its proposed commercial papers/medium term notes (CP/MTN) programme.

The programme comprises the proposed issuance of RM505 million CPs and MTN. SP Setia initially announced the seven-year fund raising programme last month.

According to the developer, the scheme will be guaranteed by the parent company and is secured by its land in Semenyih, Selangor.

SP Setia said proceeds from the exercise will finance the acquisition and development of the land.

By Business Times

Hands-on approach to development

WORKING with Tuanku Abdul Halim Mu’adzam Shah on the development of Kedah has been an experience to cherish, according to Mentri Besar Datuk Seri Azizan Abdul Razak and several of his predecessors.

Azizan, who described Tuanku Abdul Halim as a man of wisdom, said it was significant that Tuanku Abdul Halim was being installed as Yang di-Pertuan Agong during the administration of Prime Minister Datuk Seri Najib Tun Razak.

“There is a special historical significance as Tuanku was also King in 1970 during the administration of then Prime Minister Tun Abdul Razak Hussein, who is Najib’s father,” he said.

Having vast experience in the administration of the country as well as the state, Tuanku Abdul Halim placed great emphasis on peace and stability, the MB said.

“That is why during the recent political crisis in Kedah, Tuanku directed me to resolve the matter swiftly and amicably as he did not want the chaos to prolong,’’ Azizan said.

The MB said Tuanku Abdul Halim had pledged to make weekly trips to Kedah to oversee development in the state.

“When in Kedah, Tuanku will be at his office (at Wisma Darulaman) as usual,’’ he added.

Former Mentri Besar Datuk Seri Mahdzir Khalid, who served between December 2005 and March 2008, described Tuanku Abdul Halim as an exemplary Ruler.

“While serving as MB, the most challenging task I had was when I had to get the consent of Tuanku to amend the State Islamic Administration Enactment to divide the Religious Department and Religious Council.

“The draft amendments were already drawn seven years before I was appointed Mentri Besar. When I presented the draft to the Tuanku, Tuanku appeared to have some reservation,’’ he said.

Mahdzir said he made arrangements to seek an audience with the Sultan a week later to convince him that the amendment would not erode the power of the Sultan in matters related to Islam.

“I brought with me the mufti, and the Syariah chief judge, among others.

“After we explained in detail, Tuanku understood and consented to the amendment,’’ he said.

Tan Sri Sanusi Junid, who was MB from 1996 to 1999, said the Tuanku was vastly experienced, skilful and wise.

“The King’s interest and understanding of matters are very deep. And he takes a more objective approach compared with party-based political figures,’’ he said, revealing that Tuanku Abdul Halim also keenly followed political developments.

Azizan: ‘When in Kedah, Tuanku will be in his office as usual’

Sanusi said the Kedah Sultanate was special in the sense that it was the oldest surviving monarchy in the world from the same family lineage.

“All the current royal families such as in England, Japan and Thailand are from different families respectively, although their monarchy systems had been established much earlier,’’ he said.

He said Kedah took pride in having the longest “unbroken” royal family lineage in the world.

Tuanku Abdul Halim was also among the longest serving monarchs in the world, he pointed out.

Sanusi recalled his most unforgettable experience while serving under Tuanku as the MB.

“I had to terminate the services of three Kedah football import players to cut costs in aid of orphanages that needed RM100,000 a month.

“My unpopular decision to terminate the football players made the Kedah team lose its placing from top to bottom in the following league.

“I was in a dilemma at that time as Tuanku was the biggest Kedah football fan.

“But Alhamdulillah (Praise be upon God), Tuanku understood why I resorted to such an action,’’ he added.

Another former Kedah Mentri Besar Datuk Seri Syed Razak Syed Zain said Tuanku Abdul Halim was actively involved in formulating the Kedah Maju 2010 plan.

“Tuanku guided me and gave me advice on ways to improve the plan,’’ he said.

Syed Razak, who served from 1999 to 2005, said Tuanku Abdul Halim was very interested about the plan as he wanted Kedah to strive for developed status.

The Kedah Maju 2010 masterplan included the re-development of Bandar di-Raja Anak Bukit, development of a mini Putrajaya, expansion and refurbishment of the Sultan Abdul Halim Airport, development of Kuala Kedah waterfront city, re-development of Langkawi and construction of flyovers, among others.

“Tuanku has always paid special attention to economic growth and its spillover effects, tourism in Langkawi, and social development.

“Tuanku has a lot of ideas on ways to boost development. He also cares deeply for the poor and government servants,’’ added Syed Razak.

The former MB also said Tuanku paid special attention to punctuality.

“He takes pride in arriving at functions and meetings on the dot,’’ he said.

Syed Razak said Tuanku Abdul Halim kept abreast with current developments but never interfered in political matters.

By The Star

PM: No property will be demolished for MRT project

PETALING JAYA: The Prime Minister has assured his followers on Twitter and Facebook that no building will be demolished to give way for the My Rapid Transit (MRT) project in Jalan Sultan.

“I assure you that no properties on Jalan Sultan will be acquired for the MRT project. They will be declared as heritage buildings,” Datuk Seri Najib Tun Razak said on his Facebook and Twitter accounts yesterday.

Najib’s posts reiterated his comments during Chat Time with Najib, which was broadcast live on ntv7 on Monday.

“I can give a categorical assurance that we will not acquire their land. We only want permission to go below their land and will make sure their properties are not affected.

“We will declare them as heritage properties and will strengthen buildings that are not structurally strong,” he said during the 90-minute interview.

Later on Twitter, Najib announced in Bahasa Malaysia: “The new Bill that will replace the ISA has been discussed in Parliament, as promised on Sept 15 last year,” referring to the Security Offences (Special Measures) Bill which would replace the Internal Security Act 1960.

By The Star

Beijing tightens ‘land grab’ rules

Social unrest: Land grabs triggered a huge revolt in Wukan in December. China has tightened regulations in a bid to put a lid on what has become an explosive social issue. – AP

BEIJING: China has tightened regulations governing forced land expropriations in a bid to put a lid on what has become an explosive social issue and one of the country's biggest sources of unrest.

Authorities have for years tried to address the issue of government-backed “land grabs,” which regularly trigger protests as residents complain of poor compensation for homes that have been demolished to make way for new buildings.

In January 2011, new rules were issued stipulating among other things that violence cannot be used to force homeowners to leave and that compensation must not be lower than the market price, but these regulations are often flouted.

The Supreme People's Court on Monday clarified and tightened these rules in a bid to “protect the public interest and guarantee the legitimate rights and interests of expropriated home owners.”

Under the tightened rules, government authorities that want to expropriate land but cannot reach an agreement with residents and apply to a local court for approval, must provide additional documents to prove their case.

These include a “social stability risk assessment” as well as “feedback from homeowners and the party which enjoys the direct benefits” from the land expropriation.

In addition, the amended rules which came into force yesterday lay out a series of reasons for local courts to reject authorities' applications for land expropriations.

China faces increasing pressure from public discontent over forced and illegal land grabs, which have in the past few months sparked protests against authorities in various areas.

Last week hundreds of ethnic Mongols living in the northern region of Inner Mongolia tried to stop a vehicle belonging to a forestry firm that they claim had illegally occupied their land.

Authorities arrested 22 people amid accusations of police brutality, rights groups said.

Land grabs also triggered a huge revolt against authorities in the southern village of Wukan in December, in a case that attracted international media attention and eventually led to rare concessions by the provincial government.

By AFP

Govt may double minimum price of houses foreigners can buy

RM1mil floor price?

KUALA LUMPUR: The Government is considering raising the minimum floor prices of houses foreigners are allowed to buy to RM1mil from the current RM500,000 in an effort to control the rise in property prices, sources said.

They said such a decision was “in the pipeline” and the implementation would be made by the economic planning unit (EPU) under the Prime Minister's Department currently headed by Minister Tan Sri Nor Mohamed Yakcop.

“From what I understand, these revised guidelines have been discussed at the ministerial level and should this be enforced, it will mean that foreigners will only be allowed to buy properties priced above RM1mil. For now, the base price is set at RM500,000 for foreigners. This base price is a bit low looking at present circumstances,” a government source who requested anonymity said.

“The current trend in the property market indicates that prices are still continuing to climb despite measures by Bank Negara to curb property prices from spiralling out of control. We need to act before it goes further out of hand,” the Putrajaya source added.

Another source said the revised guidelines would also consider a slightly lower base price threshold of RM800,000 for residential properties in selected economic corridors such as Johor's Iskandar Malaysia to ensure the development and success of these corridor hotspots.

“This base price will also be subject to reviews by the Government from time to time depending on the inflationary situation of the economy and to keep overall inflation in check,” the source said.

Deputy Finance Minister Datuk Donald Lim had recently told the press that the Government would take “strict measures” to avoid a US subprime mortgage financial crisis after average house prices jumped almost 7% in the fourth quarter of last year despite measures announced by Bank Negara to rein in property prices.

“The Government is worried about property prices causing a bubble and we don't want banks to overlend to the property sector,” Lim said.

Industry sources surveyed by StarBiz said foreigners that tend to buy properties in Malaysia were those from South Korea, Japan, China and Singapore.

“This move will give an advantage to locals, especially those in the middle-income category as locals will not need to compete with foreigners. I am not surprised by this move, but our agency has so far seen mostly people from China and Singapore buying properties above RM1mil anyway,” a KL-based licensed real estate negotiator who did not want to be named said.

“However, we may see fewer transactions from the Koreans and Japanese. Westerners such as those from the United States and Europe won't usually buy. They prefer to rent instead,” the real estate negotiator added.

Meanwhile, the implementation of the higher floor price is expected to have a minimal impact on the property market in Malaysia as official statistics show that only 2.4% (worth RM1.45bil) of transactions conducted in the residential sector last year were worth RM1mil and more.

The Finance Ministry's Valuation and Property Services Department Property Market Report 2011 released last week showed there were 269,789 residential property transactions worth RM61.83bil transacted last year, the highest recorded in the last five years.

“Both volume and value recorded double-digit growth of 18.9% and 22.1% respectively. The All House Price Index surged to 156.9 points in the fourth quarter (Q4) of 2011 against 147.2 points registered in Q4 2010,” the report said.

The report said that landed housing was on a “general upward trend” in Malaysia and also attributed the rise in property prices to the Sungai Buloh-Kajang My Rapid Transit project.

“Across the board, terraced houses in KL recorded increases of 8%-13%. Increased prices of landed houses on Penang island were apparent. The highest transacted price of two- and three-storey detached (houses) were at RM2.05mil and RM5.15mil respectively,” the report said.

By The Star

RM1.4bil shopping mall and office tower in KL Sentral to be ready by year-end

Interim distribution: Kamalul (left) and Nor Azamin at the announcement of the first AHB income distribution for this year.

KUALA LUMPUR: Pelaburan Hartanah Bhd (PHB), a subsidiary of Yayasan Amanah Hartanah Bumiputra, will inject a RM1.4bil shopping mall and office tower project in KL Sentral into its portfolio of assets under the Amanah Hartanah Bumiputra Unit Trust Fund (AHB) next year.

PHB managing director and chief executive officer Datuk Kamalul Arifin Othman said the shopping mall or Lot G was currently under construction and expected to be completed by year-end.

“We will have to achieve the right rental yield for Lot G, the single largest property owned by PHB in terms of value, before injecting it into AHB.

“Once Lot G is included in the portfolio, we could offer more AHB units to be subscribed,” he told reporters after jointly announcing AHB's income distribution for the six months ended March 31 with its manager Mayban Investment Management (MIM) Sdn Bhd yesterday.

AHB is a first of its kind fixed-price syariah-compliant real estate backed unit trust fund which enables bumiputra investors to participate in the ownership of real estate assets with a minimum investment of RM500.

Unlike other unit trust funds, assets under AHB have to be acquired first before the units can be subscribed to.

Other than Lot G, Kamalul pointed out that PHB was also working on a property development project with Gleneagles Hospital Kuala Lumpur.

“The project involves the extension of Gleneagles Kuala Lumpur covering a total gross floor area of approximately 300,000 sq ft. The gross development cost of this extension is approximately RM138mil and should be completed in 2014.

“It will have a new 10-floor healthcare facility being built with a lease period granted to Gleneagles Kuala Lumpur to occupy the same for 15 years with an option to renew for another 15 years.

“Other than that, we also have a long-term plan to develop our 20 acres of land along Jalan Bangsar into an integrated development,” he said.

Besides these three developments, Kamalul added that PHB would continue to source for new assets to be injected into AHB.

“To provide our investors with a good and consistent income stream, PHB is looking to buy more completed and income-yielding assets, expand its land-bank and venture into more property development projects.

To date, PHB's completed list of properties include DEMC Specialist Hospital, Block D of Peremba Square in Saujana Resort, Menara Bumiputra-Commerce in Jalan Raja Laut, CP Tower in Petaling Jaya, Wisma Consplant in Subang Jaya, Tesco Setia Alam, Menara Prisma in Putrajaya and Logistics Warehouse in Shah Alam, which collectively are valued at RM1.4bil.

For the six months ended March 31, PHB declared an interim income distribution of 3.25 sen a unit which would involve a total payment of RM32mil for AHB unit holders.

This translates to an annualised income yield of 6.5% when benchmarked against the 12-month General Investment Account-i of Maybank Islamic Bhd.

AHB's income distribution, if any, is payable on a six-month basis for periods ending March 31 and Sept 30 each year and is tax-exempt.

The first payout for this year and the third since it was launched would be directly credited into the unit holders' bank accounts.

MIM managing director and chief executive officer Nor Azamin Salleh said the tremendous response from the investors proved that the fund was a suitable investment option among bumiputra investors as it offered participation in the beneficial ownership of real estate assets, competitive returns at a low minimum entry point.

AHB was launched in November 2010 by Prime Minister Datuk Seri Najib Tun Razak.

And as the fund units are fully-subscribed, the public is advised to enquire with any Maybank branch for units which are made available.

By The Star

I&P eyes repeat of RM1.4b revenue

I&P Group Sdn Bhd, a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), aims to repeat the RM1.4 billion revenue it chalked up last year, despite the more challenging time this year.

Its managing director Datuk Jamaludin Osman said properties with gross development value of about RM3 billion were expected to be put into the market this year.

“Every year, we have new phases. New phases will be offered to the market through various township developments,” he told Business Times in an interview in conjunction with this year’s Minggu Saham Amanah Malaysia (MSAM) exhibition in Kota Kinabalu.

I&P has successfully developed several major and well-known projects, such as Bukit Damansara, Bandar Kinrara, Alam Damai, Alam Impian, Alam Sari, Temasya-Glenmarie, Bandar Baru Seri Petaling, Taman Pelangi and Taman Perling.

It is learnt that the group has 3,622ha of land in the Klang Valley and Johor Baru, with 1,195ha still undeveloped.

“We hope to be able to maintain last year’s revenue of RM1.4 billion. Barring unforeseen circumstances and getting plan approvals, God willing, we will achieve (the target).”

Jamaludin said the timing of the company’s property launches would depend on the market condition and the approval status. Despite the uncertainties in the global economy, Jamaludin said he expected the industry to grow in tandem with the anticipated growth of the country’s economy.

On the MSAM, Jamaludin said I&P had been participating in the exhibition since its inception in 2000 as it was a good opportunity for the group to showcase it projects.

The MSAM, organised by PNB, will be held from April 20 to April 28. “By participating in MSAM, people can see that PNB is not just a unit trust conglomerate but has reliable subsidiaries such as I&P.

“We hope to get more exposure and recognition from the Sabah market. We want the public to know that one of the businesses run by PNB is property development through its subsidiaries like I&P,” he said.

He said while I&P had yet to make its mark in Sabah, its participation in MSAM would enable the people there to know more and invest in the company’s development projects in the Klang Valley and Johor.

I&P Group was formed in May 2009 after the successful merger and rationalisation exercise between three companies under PNB, namely Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd.

By Business Times

AHB eyes more properties, land

AMANAH Hartanah Bumiputera (AHB) is eyeing more property acquisitions and increasing its land bank, especially in the Klang Valley, to enlarge its current fund size of RM1 billion.

AHB is the country's first syariah-based property unit trust fund and is open only to Bumiputera investors.

Pelaburan Hartanah Malaysia (PHM) chief executive officer Datuk Kamalul Arifin Othman said the fund is scouting for more properties such as offices, retail, industry as well as land banks.

"We are certainly looking at expanding the size of the fund as part of efforts to foster equality in Bumiputera property ownership. We are in talks for a couple of acquisitions," Kamalul told reporters here yesterday after unveiling its first out of two dividend payouts for the year.

He, however, declined to reveal details or specify the fund's target size.

Kamalul said the fund manager will continue to source new assets to be injected into Amanah Hartanah Bumiputera to provide its 60,000 investors with good and consistent income stream.

"We are looking to buy more completed and income-yielding assets, expand our 52.6ha land bank and venture more into property development, especially in healthcare as we believe in the future of the sector," said Kamalul.

Kamalul said next year, PHM plans to include its 8ha parcel of land in Jalan Bangsar into AHB. Another property to be injected into the fund is the Lot G development at KL Sentral, which includes an office tower and shopping complex spanning 900,000 sq ft with a gross development value of RM1.4 billion.

Established in May 2006, PHM is a real estate investment holding company and is a subsidiary of Yayasan Amanah Hartanah Bumiputera and Mayban Investment Management Sdn Bhd under the purview of the Ministry of Finance.

Together with Mayban Investment Management Sdn Bhd, it currently manages AHB with eight properties under its wings with a value of RM1.4 billion and a recurring income of RM10.5 million per annum.

Its properties include Darul Ehsan Medical Specialist Hospital in Shah Alam, Blok D Peremba Square in Saujana Resort, Menara Bumiputera Commerce in Jalan Raja Laut, CP Tower in Petaling Jaya, Wisma Consplant in Subang Jaya, Tesco Setia Alam, Menara Prisma in Putrajaya and Logistics Warehouse in Shah Alam.

Meanwhile, Mayban Investment Management Sdn Bhd managing director and chief executive officer Nor'Azamin Salleh said AHB has declared an interim income distribution of 3.25 sen a unit, which involves a total payment of RM232 million for its 60,000 unitholders for the six-month period ended March 2012.

The income distribution is payable twice a year for periods ending March 31 and September 30 each year. It is tax exempted.

Since its inception in November 2010, this is the third income distribution made by AHB. The fund declared its first income distribution of 2.17 sen a unit for the four-month period ended March 31 2011 and a second income distribution of 3.25 for the six-month period ended September 30 2011.

The first payout for this year will be credited into unitholders' bank accounts today.

By Business Times

Dijaya in amalgamation deals worth RM950mil

PETALING JAYA: Dijaya Corp Bhd has entered into agreements with several vendors for a proposed acquisition of 73 properties, comprising 49 parcels of land and 16 buildings, for RM949.9mil.

In a statement to Bursa Malaysia, the company said that the proposed acquisition would be satisfied by cash totalling RM250mil, while the balance would be through the issuance of a 3% coupon redeemable convertible unsecured loan stock, with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

Tan: ‘The intention of this amalgamation exercise is to consolidate all property development and investment activities into Dijaya, while avoiding businesses that are conflicting or competing with its interest.’

“The intention of this amalgamation exercise is to consolidate all property development and investment activities into Dijaya, while avoiding businesses that are conflicting or competing with its interest,” said group CEO Tan Sri Danny Tan.

With the signing of the definitive agreements, the size of Dijaya's land bank would increase to 870 acres and the group's total gross development value would increase to RM37bil.

In addition, the investment properties' net lettable areas for Dijaya would increase to 1.4 million sq ft. The additional properties were expected to generate a more stable and recurring income for Dijaya.

It was noted that the parcels of land to be acquired were located within Kuala Lumpur, Johor Baru, Penang as well as in Kota Kinabalu and Sandakan.

Tan has agreed to procure the relevant parties, to be identified, to enter into long-term lease of three years with an automatic extension at an average annual lease rental investment yield of not less than 8% per annum or aggregate gross rental of RM42.7mil per annum, whichever is higher.

As an integral part of the proposed amalgamation exercise, Dijaya would undertake a combination of equity and debt fund raising exercise via a proposed rights issue exercise and proposed issuance of RM500mil guaranteed commercial paper/medium term notes programme.

The proposed renounceable rights issue is on the basis of four rights shares for every five Dijaya shares held and one bonus share for every four rights shares subscribed at an issue price of RM1.20 per rights share.

Tan and the parties related to him have provided Dijaya with undertakings to subscribe for RM250mil in value pursuant to the proposed rights issue, which would constitute the minimum subscription level for the proposed rights Issue.

By The Star

UEM Land unit to buy JB plot for RM93.2m

KUALA LUMPUR: UEM Land Holdings Bhd's wholly-owned subsidiary, Nusajaya Premier Sdn Bhd (NPSB), has proposed to acquire 49.49 hectares of freehold land in Johor Baru from Tanjung Bidara Ventures Sdn Bhd for RM93.2 million cash.

In a filing to Bursa Malaysia yesterday, UEM Land said the proposed acquisition was conditional upon approvals being obtained from the Economic Planning Unit, Johor State Authority, Estate Land Board and any other relevant authorities.

"The land is adjacent to Kota Iskandar and the company's existing prime development in Nusajaya, Puteri Harbour," UEM Land said.

On rationale, it said the proposed acquisition would allow the group to realise its original development vision for Puteri Harbour, where high density urban waterfront precincts at the heart of public and private marinas are balanced with landed and high-rise residential precincts on both sides.

Barring any unforeseen circumstances, UEM Land expects the proposed acquisition to be completed within seven months.

By Bernama

UEM signs RM93mil conditional agreement with Khazanah for the Pulai land

PETALING JAYA: UEM Land Holdings Bhd has entered a deal to acquire a 122.28-acre freehold land in Pulai, Johor Baru, from Khazanah Nasional Bhd's group for a cash consideration of RM93.2mil.

In a statement to Bursa Malaysia, UEM Land said the conditional sale and purchase agreement signed yesterday involved its wholly owned subsidiary Nusajaya Premier Sdn Bhd and Khazanah's wholly owned subsidiary Tanjung Bidara Ventures Sdn Bhd.

The proposed acquisition for the land, which is located adjacent to Kota Iskandar and UEM Land's existing integrated waterfront and marina development, Puteri Harbour, in Nusajaya, is expected to complete within seven months.

The proposed acquisition, according to UEM Land, represented an opportunity for the company to consolidate strategic land parcels, which were in close proximity to its existing development in Puteri Harbour.

UEM Land said it planned to develop the land, which it would acquire through Nusajaya Premier, into a residential enclave featuring a mix of distinctive, landed canal-front homes with individual berthing and high-end condominiums.

“The proposed development, which is expected to commence in 2013, will span over seven years,” it said.

“It is expected to be funded through existing cash balances, internally generated funds and/or borrowings, in line with the group's other developments,” it added.

UEM Land, however, clarified that the total development cost and expected profit to be derived from the proposed development could not be determined at this juncture, pending the finalisation of a detailed layout plan.

The detailed layout plan for the proposed development, it said, would be submitted to the authorities for approval by the end of this year.

By The Star

KLIA2 commercial lots tender enters third phase

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) will call for new tenders for the low-cost carrier terminal (KLIA2) commercial space on April 12 and April 17.

The tender process, now in its third phase, will involve 37 tenders comprising retail, food and beverages (F&B), and service outlets.

In a statement, MAHB senior general manager commercial services Faizah Khairuddin said tender documents for the third phase can be purchased from April 12 until May 10.

"The tender submission deadline for the lots is 3pm on May 17 2012. More information on the KLIA2 tender briefing is available at www.klia2retail.com.my," she said.

Faizah said tenders for KLIA2 are conducted in phases. The first phase was conducted in December last year and Phase Two in end-February to early-March this year.

"The first and second phases involved 27 and 39 tenders, respectively. There will be 225 lots comprising 118 retail outlets, 81 F&B outlets and 26 service outlets," she said.

The airport operator received overwhelming response at the first two tenders' briefing sessions. Over 1,000 interested parties, comprising retailers, F&B and services operators, attended the sessions, Faizah said.

"Successful bidders for Phase One will be announced in May upon the board's approval. Meanwhile, those interested in getting a piece of the pie can still do so under Phase Three of the tender process," she added.

KLIA2, an extension of the Kuala Lumpur International Airport, will be a technology-driven, shopper-oriented travel and lifestyle hub," Faizah said.

By Business Times