UEM Land’s Nusajaya to be driven by new projects

New attraction: Construction work under way at the Legoland theme park in Nusajaya.

KUALA LUMPUR: For UEM Land Holdings Bhd's fledgling Nusajaya region, the next stage in its growth will be driven by new catalyst projects that are expected to be unveiled soon.

“We have concocted and put on the ground the initial catalysts, but we cannot live on what has been successful in the past, so new projects will be developed,” managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim told StarBiz.

“We have a few that are on the table and very advanced, but I can't talk about them yet,” he said, adding that official announcements would be made in the fourth quarter.

UEM Land is the master developer of the 23,875-acre Nusajaya, which is one of five flagship zones in Iskandar Malaysia, the country's first economic growth corridor in Johor.

Now in its second phase, the 2,217 sq km Iskandar Malaysia that was launched in 2006 needs average investments of between RM15bil and RM20bil per annum from 2011 to 2015, up from RM10bil to RM15bil targeted for 2006 to 2010.

A five-year progress report by the Iskandar Regional Development Authority had projected that Iskandar Malaysia requires a staggering RM383bil in investments over the next 20 years.

“I believe we have very good prospects, and the single biggest factor we are hanging our optimism on is Nusajaya. I have struggled 6 years trying to put Nusajaya where it belongs.

“After six years, I can tell you it has arrived at its 'tipping point'. By the end of the year, a lot of initiatives would be completed and in operation. This will result in a new demand structure for our projects down south,” Wan Abdullah said.

This “new demand structure”, he explained, meant that if the developer previously sold 800 units in a year, it might be able to double or even triple that amount post-tipping point.

“Nusajaya is unique because it is not leveraging on the local market. Our market is the world because of its proximity to Singapore.

Wan Abdullah says new projects will be unveiled soon.

“UEM Land, compared to the other developers, I dare say, has the best opportunity in these current times,” he said, adding that the company was the biggest private landowner in Johor.

This year is touted as the “tipping point” for Iskandar Malaysia as many of its major projects and infrastructure, including the coastal highway to Johor Baru, Legoland Malaysia and two new colleges in EduCity, would come onstream.

In Nusajaya, UEM Land has four ongoing projects: East Ledang, Nusa Idaman, Puteri Harbour, Nusa Bayu and Horizon Hills, which is a joint-venture (JV) with Gamuda Land Bhd.

The high-rise, waterfront Imperia condominiums in Puteri Harbour, its first residential development there, has seen a take-up of 85% since its launch nine months ago and an average selling price of RM725 psf, with prices reaching RM1,000 psf in the upper floors.

Asked if the company, which is 65%-owned by Khazanah Nasional Bhd, has felt any impact from Bank Negara's responsible lending guidelines, Wan Abdullah said: “Of course. Anyone who tells you (otherwise) is not telling the truth. If it is good for the country, I'm resigned to the fact.

"I believe the leadership know what they are doing. They don't want to create a property bubble and they want to curb excessive speculation, which is all good. UEM Land is a long-term player. If tightening credit is the answer, so be it.”

However, he conceded that “it may not be good” for the company's short term performance.

On the possibility that the Government may raise the floor price for houses sold to foreigners, Wan Abdullah said he was not concerned.

“Our products in Nusajaya are upmarket. The bungalows are over RM3mil and apartments over RM1mil, especially those in the waterfront. If they say foreigners can only buy RM2mil and above, then I think I will pack it in,” he said with a laugh.

In April, StarBiz had reported that a proposal was being talked about to set a minimum price of RM1mil on properties bought by non-Malaysians from RM500,000 currently in an effort to prevent runaway house prices.

Sources had also said the revised price threshold may be slightly lower at RM800,000 for residential properties in selected economic corridors such as Iskandar Malaysia.

By The Star

No REIT for KLCC Property soon

Analysts do not see a pressing need for a REIT exercise as KLCC Property is not in urgent need of cash.

SPECULATION about a real estate investment trust (REIT) exercise by KLCC Property is not new. At its analyst briefing in April, management said that it was still undecided on this issue.

Coming up with a REIT will not enhance the value of the company but merely unlock the otherwise trapped value.

This is because its assets have constantly been revalued to market value, already reflected in the net tangible asset of RM5.55 per share, which is close to our revised net asset value estimate of RM5.32 per share.

We do not see a pressing need for a REIT exercise as the company is not in urgent need of cash. Its balance sheet is still solid as net gearing at end-March was 21%, low for a property investment company.

Its debt-to-investment properties ratio of 19% is also lower than most local REITs.

Another potential obstacle to a REIT is major shareholder Petroliam Nasional Bhd's (Petronas) 360.7 million redeemable convertible unsecured loan stocks (RCULS) which have yet to be converted into common shares.

All outstanding RCULS would be mandatorily converted into common shares 10 years from issue the date of (i.e. Aug 9, 2014).

We do not expect a REIT exercise to take place before the conversion of the RCULS as Petronas would miss out on the benefits of such a move.

As there is no confirmation of such a move or its timing, we retain our “underperform” rating.

Without confirmation of REIT plans, KLCC Property could be de-rated as investors switch to larger local REITs like CapitaMalls Malaysia Trust and Sunway REIT for higher yields.

By The Star

MRT plans to integrate station with BB Plaza

Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) has confirmed that it is in negotiations with the government to build an underground station integrated with Bukit Bintang Plaza (BB Plaza).

The plan to integrate the station towards BB Plaza will do away with the need to involve private properties in completing the project, and at the same time provides a golden opportunity to reposition the almost 40-year old BB Plaza.

Discussions between property owners and traders on Jalan Bukit Bintang with Prime Minister Datuk Seri Najib Tun Razak was held in March, after which the prime minister raised concern over the planned five-year closure of businesses there.

MRT Corp explored three alternative solutions but decided on the station integration option.

"It is the best solution because it presents UDA Holdings with the opportunity to redevelop BB Plaza, with a direct linkage to a key public transport infrastructure.

"This link will bring immense benefits to the mall. We have had several meetings with the Ministry of Finance (MoF), as owners of UDA Holdings, to connect the station to BB Plaza.

"Discussions are continuing," said MRT Corp Chief Executive Officer, Datuk Azhar Abdul Hamid in a statement today.

He had also clarified reports that MRT Corp was going to acquire BB Plaza.

"It must be clarified that there has never been any plan to acquire BB Plaza. Our principal focus at present is to build the Sungai Buloh – Kajang (SBK) MRT line.

"We don’t want to be distracted by property development at this stage. All our discussions with the MoF have always been about finding solutions to address the prime minister’s concerns," he said.

Azhar said the construction of the Bukit Bintang Station presents several golden opportunities.

One is for UDA Holdings to redevelop BB Plaza to keep up with the times.

"The other end of Jalan Bukit Bintang has seen rapid redevelopment over the past few years, and this has clearly added KL’s appeal to both locals and tourists alike. BB Plaza can be part of this 'new' Bukit Bintang. The 1970s-built BB Plaza has the potential to be the icon of the area," he added.

The second opportunity centres on enhancing and elevating the Bumiputera agenda, as opposed to merely using cheap rental as a means to incentivise and promote their participation in trade.

"Bumiputeras can now shift up a gear to become entrepreneurs. Of course, an area for small traders can be built into the redeveloped mall, but they must also be given the opportunity to move up the value chain.

"This elevates their role, and is value-adding, so MRT Corp sees no reason why UDA’s role in promoting active participation of Bumiputeras in retail in urban areas has to be compromised with redevelopment. In fact, it can be enhanced," said Azhar.

The days of providing merely cheap rental as leverage for Bumiputera businesses to grow and transform is no longer feasible, he said.

"Cheap rental doesn’t make a destination. It is the quality and offerings inside the mall. With the mall redevelopment, the opportunity exists to reinvent the Bumiputera agenda and make it better," said Azhar.

He emphasised that MRT Corp is ever ready to collaborate with any
government agency or company to creatively redevelop Bukit Bintang, to ensure that there is a win-win situation for all parties.

He noted that apart from housing estates, linkages to malls and public facilities are the key to building a public transportation system that will alleviate traffic congestion and provide a more reliable alternative to commuters.

When completed in 2017, the MRT’s four-car train sets are capable of carrying 25,000 people per hour per direction.

Moving this number of people in the traditional way would put further strain on roads that are already congested in the capital and its surrounding areas.

By Bernama

UDA may sell BB Plaza

UDA Holdings Bhd said yesterday it may ask for RM474 million from MRT Corp Bhd for its Bukit Bintang Plaza (BB Plaza) were it to let go of the property for the construction of an underground MY Rapid Transit (MRT) station.

Chairman Datuk Nur Jazlan Mohamed said the prime property could cost around RM374 million, with a further RM100 million required to compensate BB Plaza retailers who had to leave before their lease expired.

Speaking to Business Times after launching UDA Holdings’ RM13 million IT transformation programme yesterday, Nur Jazlan said construction of the underground station would also affect Bumiputera businesses as at least 60 per cent of the 150-odd retailers at BB plaza, which is owned by UDA and built in the 1970s, are Bumiputeras.

MRT Corp plans to take over the land fronting BB Plaza and the adjacent Yayasan Selangor building next month to start work on the underground station, which is one of 13 stations for the 51km Sungai Buloh-Kajang MRT line.

It will then take over the basements of both buildings to build the station, which means the retailers may have to move out next year.

There are also talks on whether to redevelop BB Plaza or leave the building as it is.

Nur Jazlan said while he supported the building of the station, the redevelopment of BB Plaza would harm the agenda to provide space for Bumiputera retailers in the capital city’s main shopping district.

“If we were to redevelop BB Plaza, the replacement cost will be high and we have to increase rental rates. This will complicate our Bumiputera agenda. It is better to leave the building as it is.”

He said if MRT Corp were to acquire the plaza, the benchmark would be RM374 million for the building.

"BB Plaza is the only prime asset we have left but if we can get RM374 million for the property, based on current market value, then we are willing to let it go.

"This is a national project and if asked by the government to sacrifice the building, we will comply. However, we will also seek compensation for the retailers," he said.

If the asset sale does go through, it won't be the first deal between UDA and MRT Corp. About six months ago, MRT Corp paid UDA RM80 million to acquire UO Superstore and Plaza Warisan in Kuala Lumpur, RM40 million below market price, to build an MRT station at the sites.

By Business Times

UMLand appoints Chia as new CEO

KUALA LUMPUR: United Malayan Land Bhd (UMLand) has appointed Chia Lui Meng as its new group chief executive officer with effect from Monday, succeeding Pee Tong Lim, whose tenure ended in February when he retired.

Chia, who was the CEO of Malton Bhd and adviser to the group managing director of Naza TTDI Sdn Bhd, will be responsible for the strategic direction and overall management and operations of the UMLand group.

By Business Times

RM833mil commercial project in Shah Alam

To be built within two years from now, Magna Prima's mixed development will involve an estimated 180 shop-office units and 1,600 serviced apartments.

Magna Prima Bhd (MPB) is proposing a mixed development project in Shah Alam with a gross development value of RM833 million, with the latest acquisition of 8ha (20 acres) of land worth RM100 million.

Paying about RM115 per square foot, MPB chief executive officer Datuk Rahadian Mahmud said the leasehold commercial land would be an important asset for development while increasing the company’s footprint in Shah Alam.

“We will be funding the purchase with RM70 million cash through internally generated funds and bank borrowings,” said Rahadian in a Press statement,“While the balance RM30 million through the issuance of new shares in Magna Ecocity Sdn Bhd, the wholly-owned subsidiary of MPB through which the land will be purchased.”

One of MPB’s development plans is a mixed development involving an estimated 180 units of two-storey and three-storey, low-rise shop-offices and four blocks of serviced apartments with a total of about 1,600 units.

Development of this project is scheduled to commence within two years.

Rahadian highlighted that the land comes with a wide frontage of almost half a kilometre facing Persiaran Selangor. The property is also visible from the Federal Highway.

Persiaran Selangor forms the main access road for Section 15 and Section 16, two established commercial and industrial hubs in Shah Alam.

The property has direct access to the Federal Highway and easy accessibility to other expressways such as the North Klang Valley Expressway (NKVE), North-South Centre Link, Shah Alam Expressway (Kesas), Leburaya Damansara Puchong (LDP) and the Guthrie Corridor.

The parcel’s proximity to other public amenities such as KTM stations, a private hospital, a hotel, educational institutions and a stadium are expected to fuel its appeal to investors and owner-occupiers alike.

An investment holding company listed on Bursa Malaysia, MPB is involved in property development, construction, trading and property management services.

By The Star

M’sian investment in Aussie properties to grow

Artist impression of the Array project in Melbourne by Mirvac

GEORGE TOWN: Investments from Malaysia in the Australian property market is expected to grow by about 15% this year from RM125mil in 2011.

Property Talk director Steven Cheah said in an interview that for the past two years the investment in Australia had remained flat at about RM125mil per annum.

“This was due to the stronger Australian dollar. But since March, the Australian currency had weakened slightly and so we are anticipating more property investments in Australia.

“We have also been getting a lot more enquiries since March 2012 about investing in properties in Sydney and Melbourne,” he said.

Cheah said every year many Malaysians go to study in Australia, thus creating a severe shortage of property for rental.

“Many parents find that buying property for their children make more economic sense than renting. Once their children completed their education, the property can be rented as rental income or they can sell with good capital income,” he said.

According to Cheah, Melbourne was the top destination for Malaysian property investment funds.

“This is because many Malaysians have relatives who have migrated to Melbourne, where you can find a variety of Malaysian restaurants.

“According to the latest research by Australian Property Monitors, of the major capital cities, Melbourne has been the standout performer for house price growth over the last five years, with prices increasing almost 30% in just 15 months.

“Perth was the worst performing city, with the median house price unchanged in five years, which is largely a hangover from a resource-fuelled boom in prices in the early 2000,” Cheah said.

He added that Sydney and Melbourne were always voted as the top three most livable cities in Asia by ECA International, a research firm with its Asia headquarters in Hong Kong.

On Mirvac's new project in Melbourne, Cheah said the Array project, comprising 169 condominiums was next to the Yarra River.

“The project, introduced in Shanghai recently, received very positive response. Some 35 units were sold in one week,” he said.

The Array condominiums, positioned on the north-facing bank of the Yarra River, with built-up areas from 55 sq m onwards are priced from A$513,000.

“A limited number of three bedroom, deluxe Sky Residence options, priced from A$1.41mil, is also available,” Cheah said.

The project will be exclusively previewed at Hilton Kuala Lumpur on June 9 and June 10.

“Construction work on the Array project has started and is scheduled for completion in end-2014,” Cheah added.

By The Star

Affordable housing in city possible: Rehda

KUALA LUMPUR: Affordable housing in the city for the poor and middle class is possible when the government provide the land for the development, said Real Estate and Housing Developers Association Malaysia (REHDA).

"In terms of rising cost of materials, it's something that we can't control. One thing that is under the government control is land -- whether it is available for low and medium cost housing.

"I'm not sure what the plans are for the Rubber Research Institute land but if they target a certain portion for affordable housing it would be good because land is one of the biggest cost components in property development," said REHDA council member N.K. Tong.

Tong was speaking to reporters here yesterday (5/6) on the upcoming fourth International Conference on World Class Sustainable Cities 2012 (WCSC 2012).

To be held on September 25, the WCSC 2012 will carry the theme "Cities for People". Among issues to be discussed include housing for urban poor, daycare services, preservation of greenery, safety practices and community building activities in the interest of crime prevention, re-landscape of open spaces and a more integrated public transportation.

The WCSC series is being co-organised by REHDA, Kuala Lumpur City Hall, the Malaysian Institute of Planners and the Malaysian Institute of Architects.

In the past three editions, the WCSC series focused on the transformation of Cheongyecheon River in Seoul, South Korea; city transportation solutions Curitiba, Brazil; and the metamorphosis of Kaohsiung, Taiwan; from an industrial polluter to an ecological tourist hub.

By Business Times

Spacious homes of Emerald Gardens

Emerald Gardens will set a new benchmark for upmarket, landed properties.

GuocoLand Malaysia has upped the ante with the latest launch of two and 2½-storey superlinked houses in Emerald Rawang, a township in the Northern Corridor of the Klang Valley.

The new superlinked houses at Emerald Gardens not only feature a contemporary design but are quite spacious. The latest units will be launched in conjunction with the Emerald Gardens Party at the Emerald sales gallery on June 9.

Built with excellent infrastructure, the development enjoys easy accessibility to Kuala Lumpur and the surrounding areas via the North-South Highway, New Klang Valley Expressway and the Guthrie Corridor Expressway.

Located within easy reach of Rawang’s commercial centre, Emerald Rawang is only 20 minutes by car from Jalan Duta and the Damansara toll.

Rawang has all the essential amenities including post office, banks, restaurants, hypermarkets, wet market and KTM Komuter station.

Set within the natural greenery and rolling hills of the 405ha (1,000 acres) township, Emerald Gardens will set a new benchmark for upmarket, landed properties.

Offering a total of 161 new units, the tropical garden concept homes come with an option of three designs with wide frontage.

Besides landscaped features, the two-storey homes of 26ft by 80ft come with a built-up space that starts from 278sq m (2,990sq ft). The 2½-storey homes come with two layout options of 24ft by 80ft and 26 ft by 80ft and the built-up space is from 333sq m (3,585sq ft).

GuocoLand Bhd marketing and sales director Pam Loh said the Emerald Gardens project was designed for today’s discerning consumers and investors, who seek more spacious and versatile homes to meet their lifestyle needs.

“We have redefined the two key features by offering the biggest superlinked homes with carefully planned layouts in Rawang, and which cater to the different needs of home buyers.

“We have received overwhelming response during the pre-launch period. We have sold over 80% of our pre-launch releases. More units will be released on Saturday,” added Loh.

Besides the spacious built-up, other key features include:

• Minimum 5+1 bedroom configuration
• Two master bedrooms for 2½-storey units
• All bedrooms with spacious ensuite bathrooms
• His and hers vanity top, and bathtub for the master bathroom
• Three-phase wiring
• Wide driveway and column-free car porch for side-by-side parking
• Rooftop terrace for natural lighting and better ventilation for 2½-storey units
• Exclusive linear park – landscaped walkway for residents
• Landscaped back lanes
• 24-hour guarded development with perimeter fencing

Visitors to the Emerald Gardens launch party from 9.30am to 9.30pm on June 9 can look forward to fun and activities, apart from viewing the two Emerald Gardens show units. Highlights of the carnival include helicopter rides, biking, “Shanghai jazz” performance and fireworks display.

By The Star

SP Setia clinches most trusted developer award

KUALA LUMPUR: SP Setia Bhd was recognised recently for the second time running as the developer Malaysians trust most in the Reader's Digest Asia Trusted Brands 2012 study.

The company was awarded the Gold Trusted Brand Award in the Property Development category at the gala awards dinner held last month.

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed presented the award to SP Setia director Tan Sri Lee Lam Thye.

The SP Setia brand has grown regionally with the developer's first international foray into Vietnam in 2007 when it joined forces with the country's top state-owned conglomerate Becamex IDC Corp to develop EcoLakes at the MyPhuoc Industrial Park.

In 2010, EcoLakes was named first runner-up in the FIABCI Prix d'Excellence Award for Best Development Master Plan.

Following this success, the group has also launched a mixed development project called Eco Xuan at Lai Thieu in Tuan An District, Binh Doung Province.

By Business Times

BB Plaza compensation projected at RM370m

UDA Holdings Bhd hopes that a fair and commensurate compensation will be offered by MRT Corp Bhd to the affected party and Bumiputera traders if its building, Bukit Bintang Plaza (BB Plaza), has to be demolished.

There is a possibility that the plaza including a part of the Yayasan Selangor building will be demolished to make way for the building of an underground station under the government's mega project, My Rapid Transit.

UDA's Chairman, Datuk Nur Jazlan Mohamed said if the BB Plaza is demolished, the company stood to lose 25 per cent or RM20-RM25 million of its annual revenue comprising rental collections from its lots in the building.

"Nevertheless, what also concerns us is the potential losses to the Bumiputera traders who would be affected throughout the implementation of the MRT project which is estimated to take four to five years," he told reporters after launching the transformation of UDA's information technology system.

Todate, 150 retailers or 60 per cent of the retailers in BB Plaza are Bumiputeras.

"We have also projected that the fair amount of compensation to be paid out for demolishing the building should be in the region of RM370 million," Nur Jazlan said.

He said the plaza would also be its third building to be surrendered to MRT Corp in making way for the MRT.

Other two buildings that have already made way are the UO Superstore and Plaza Warisan.

"We had received RM80 million for those two buildings from MRT Corp even if the property value for the buildings currently stands at RM120 million. This however is a sacrifice made by UDA to ensure that the government's economic develoment plan is successfully carried out."

Nur Jazlan also said that no definite date has been given on when MRT Corp would be taking over the building as it was still under discussion.

Nonetheless, any decision would depend on the Ministry of Finance which is the ultimate owner of UDA, he said.

On the transformation of UDA's information system which is to cost RM13 million, Nur Jazlan said it was part of UDA's efforts to provide more efficient services to its clients.

By Bernama

Magna unit in RM100mil land deal

Shah Alam 20-acre acquisition to be paid by RM70mil cash and share issuance

KUALA LUMPUR: Magna Prima Bhd unit Magna Ecocity Sdn Bhd has proposed to buy 20 acres from PCM Bina Sdn Bhd, located in Section 15, Shah Alam, for RM100mil via cash and share issuance.

Magna Prima signed a conditional sale and purchase agreement with PCM Bina Sdn Bhd yesterday and stated that the RM100mil payment would be satisfied by RM70mil cash and the balance in the form of 1.11 million issuance of new ordinary shares representing a 30% interest in the enlarged share capital in Magna Ecocity or at approximately RM26.92 per Magna Ecocity share.

The cash consideration portion of the proposed land acquisition would be financed through a combination of internally generated funds and bank borrowings, of which the breakdown had yet to be determined, Magna Prima said.

The said land was located at the north-west intersection of Federal Highway, Expressway Lingkaran Tengah (ELITE) Highway and Guthrie Corridor Expressway, it said in a statement to Bursa Malaysia.

“Magna Ecocity will be responsible to undertake the overall construction and completion of the proposed development of the property. Currently the property is vacant,” it said.

Magna Prima is proposing to develop the land into a mixed residential and commercial project, comprising 180 units of 3-storey shop offices and 1,620 residential apartments.

“The gross development value of the proposed development is estimated at RM832.67mil and the total development cost is estimated to be RM624.83mil with an expected gross profit of RM207.84mil. The proposed development is expected to commence in 2013 and is estimated to be completed by 2016,” it said.

The proposed land acquisition is subject to approval and barring any unforeseen circumstances, the proposed acquisition is expected to be completed within the fourth quarter of 2012, it said.

By The Star

Magna Prima buys 8ha site in Shah Alam

KUALA LUMPUR: Magna Prima Bhd, via its wholly-owned unit Magna Ecocity Sdn Bhd, plans to buy a 8ha leasehold land in Shah Alam for RM100 million.

The purchase will be settled via cash (RM70 million) and issuance of 1.11 million Magna Ecocity shares.

By Business Times

Karambunai to dispose land worth RM44.9mil in Sabah

KUALA LUMPUR: Karambunai Corp Bhd is selling several land parcels measuring about 94 acres in Bandar Sierra, Kota Kinabalu for RM44.9mil.

According to the company, it expected to record gain of disposal of RM22.8mil as the net book value of the plots were at RM22.1mil.

Karambunai said it had signed sale and purchase agreements to sell 33.11 and 3.27 acres of leasehold land in Bandar Sierra to Sinkong Construction Sdn Bhd for RM15.86mil and RM498,769 respectively.

The company also said it was selling 27.01 and 29.95 acres of leasehold land in Bandar Sierra to Yu Sin Kong for RM12.94mil and RM15.65mil respectively.

“The proposed disposals of these non-core assets are part of the group's streamlining exercise,” Karambunai said.

The group is primarily involved in resorts operations and development in the Karambunai Peninsular, Kota Kinabalu, Sabah.

The proceeds from the disposals would be used to repay bank borrowing and fund the group's working capital requirement.

Yu is a Malaysian citizen, residing in Kota Kinabalu.

Sinkong Construction Sdn Bhd was incorporated in Malaysia as a private limited principal activity in general civil engineering, building construction and transportation.

By The Star

Pantai Plaza rebranded as Bangsar Trade Centre to house wholesale mall

Close inspection: Ramli (left) and Nong Chik checking out the BTC model after the signing ceremony.

PLANS to revive the mostly vacant Pantai Plaza are expected to commence in August and to be completed in stages.

Located along the Federal Highway, the plaza, renamed as Bangsar Trade Centre (BTC) will have a wholesale centre for food and beverage and hospitality industry.

Malaysia Building Society Bhd (MBSB) signed a RM120mil debt settlement agreement with Twin Pavilion Development Sdn Bhd to revive Pantai Plaza.

The agreement will also settle the debts of the plaza’s previous owner, Atlas Corporation Sdn Bhd.

Twin Pavilion Development chairman Tan Sri Ramli Ngah Talib said plans for the plaza included a corporate office tower, convention and exhibition centre, strata office suites and a hotel.

“We estimate 10,000 visitors daily with the potential to increase this figure exponentially when the surrounding commercial properties such as KL Eco City come into full occupancy,” he said at the signing ceremony, adding that the project has a gross development value of RM850mil.

Ramli added that each component in BTC will support the wholesale centre where manufacturers, suppliers, knowledge and financial providers are brought together.

Twin Pavilion Development chief executive officer Lee Seng Khoon said they would be refurbishing the plaza as well as some construction work.

“The existing podium with a space of 400,000 sq ft will be refurbished to house the wholesale centre where suppliers will be able to connect with buyers,” he said.

Lee added that they would be constructing towers, providing an additional 1mil sq ft of floor space.

“After the project’s completion, we will still be very much involved in this area as we will be retaining a majority of the mall and office space,” he said.

MBSB chairman Tan Sri Abdul Halim Ali who was also present at the event, said the agreement would also see MBSB extending end-financing assistance totalling RM120mil.

“We hope that BTC will become a new landmark that Kuala Lumpur can be proud of,” he added.

Federal Territories and Urban Wellbeing minister Datuk Raja Nong Chik Raja Zainal Abidin had witnessed the signing and launched the project.

He said the continuous urban renewal of the city was a necessity.

“Renewal can provide a city the opportunity to reclaim quality urban spaces.

“However, it does not mean merely putting cosmetic improvements into ageing buildings but to create sustainable urban development through innovation that adds value to the surrounding community,” he said.

By The Star

Programme now offered to properties nationwide with a RM20mil allocation

JOHOR BARU: The 1Malaysia Maintenance Fund (TP 1Malaysia), set up to help residents of private low- and medium-cost flats in Kuala Lumpur, will now be offered to high-rise properties nationwide.

Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin said a RM20mil allocation would be utilised for the programme to go nationwide.

“So far, we have received 43 such projects nationwide with six applications from Johor alone,” he said, adding that since the programme was launched two years ago, 12 projects worth RM5.3mil had been completed in Kuala Lumpur.

The fund is set up to help pay for repairs such as faulty elevators, new coat of paint for exterior walls, roof leaks and rewiring works.

Speaking to reporters after launching a briefing on the programme here yesterday, Raja Nong Chik said his ministry would carry out the maintenance works for private buildings while the Housing and Local Government Ministry would take care of public housing needs.

To qualify, Raja Nong Chik said the management body, committee or even a residents association could submit their requests for the grants.

“The process takes about seven to eight months,” he said. “The purchase price of the property must also be RM80,000 and below,” he said.

Raja Nong Chik said in Kuala Lumpur, about 25% of flat dwellers had failed to pay their monthly maintenance fees of RM60.

State Local Government, Housing, Arts, Culture and Heritage Committee chairman Datuk Ahmad Zahri Jamil said the state government had requested for funds for six projects with four in Johor Baru and one each in Kota Tinggi and Kluang.

He said such programmes helped to spruce up an area and allowed the price of the property to appreciate because of improved surroundings.

By The Star

Magna Prima plans RM832m mixed property project in Shah Alam

KUALA LUMPUR: Magna Prima Bhd's unit is acquiring 20 acres of land in Bandar Shah Alam for RM100mil for a proposed mixed residential and commercial project with a total gross development value (GDV) of RM832mil.

It said on Tuesday that Magna Ecocity Sdn Bhd (MESB) had signed a conditional sale and purchase agreement with PCM Bina Sdn to purchase the land.

MESB would pay RM70mil to PCM and settle the outstanding RM30mil via the issuance of 1.114 million new shares or at about RM26.92 per MESB Share.

Magna Prima said MESB would undertake the overall development of a mixed residential and commercial project, comprising 180 three-storey shop offices and 1,620 residential apartments.

"The gross development value of the proposed development is estimated at RM832.67mil and the total development cost is estimated to be RM624.83mil with an expected gross profit of RM207.84mil. The proposed development is expected to commence in 2013 and is estimated to be completed by 2016," it said.

By The Star

SP Setia named most trusted developer

KUALA LUMPUR: SP Setia has been named for the second time running as the developer Malaysians trust the most in the Reader’s Digest Asia Trusted Brands 2012 study.

In a statement today, the company said it took home the Gold Trusted Brand Award in the Property Development category at the gala awards dinner on May 29.

The SP Setia brand has grown regionally with the developer’s first international foray to Vietnam in 2007 when it joined forces with the country’s top state-owned conglomerate Becamex IDC Corp to develop EcoLakes at the MyPhuoc Industrial Park.

The developer’s regional reach now includes Melbourne, Australia, and Singapore.

The Reader’s Digest Study, now in its 14th year is carried out in eight markets across Asia (China, Malaysia, Hong Kong, India, the Philippines, Singapore, Taiwan, and Thailand) to determine the brands most trusted by consumers in 43 different product and service categories.

The study is based on responses to questionnaires distributed via Reader’s Digest copies as well as telephone interviews of randomly selected, upscale consumers, carried out by Ipsos, one of the world’s leading custom research firms.

By Bernama

Karambunai to record RM22.8m gains from KK land sale

KUALA LUMPUR: Karambunai Corp Bhd is expected to record about RM22.81mil in net gains from the sale of several pieces of land measuring about 94 acres in Bandar Sierra, Kota Kinabalu.

It said on Tuesday the net book value was RM22.15mil while the sale consideration was RM44.96mil.

The properties were acquired in March 1997 with an original investment cost of RM19.83mil, including incidental costs incurred.

Karambunai said it had signed sale and purchase agreements to sell 33.11 acres of leasehold land in Bandar Sierra to Sinkong Construction Sdn Bhd for RM15.86mil and another 3.27 acres of leasehold land for RM498,769.

The company also said it was selling 27.01 acres of leasehold land in Bandar Sierra to Yu Sin Kong for RM12.94mil and another 29.95 acres of leasehold land for RM15.65mil.

"Karambunai said the proposed disposals were part of Karambunai group's streamlining exercise by disposing of non-core assets. KCB Group is primarily involved in resorts operations and development in the Karambunai Peninsular, Kota Kinabalu, Sabah.

The proceeds from the disposals would be used to repay bank borrowing and fund the group's working capital requirement.

By The Star

SP Setia joins Sime Darby in Battersea bid

Sime Darby Bhd said it joined Malaysian developer SP Setia Bhd’s bid for London’s Battersea Power Station, Europe’s largest brick building.

“The consortium is positive that its plan for a mixed sustainable development will be well received,” Kuala Lumpur- based Sime Darby said in an e-mailed statement today.

The derelict 38-acre (15-hectare) site on the south bank of the River Thames was put on sale in February after its owners failed to pay lenders owed more than 500 million pounds ($770 million). At least 10 offers were made to buy the site, including one from Russian billionaire Roman Abramovich’s Chelsea Football Club Ltd., a person familiar with the matter said last month.

SP Setia is one of three remaining bidders for the landmark power station, Chief Executive Officer Liew Kee Sin said May 29. The defunct station, featured on the cover of the 1977 Pink Floyd album “Animals,” is about 2.2 miles (3.5 kilometers) from the Houses of Parliament and has been vacant for almost three decades.

Sime Darby is the country’s largest publicly quoted plantations group, while SP Setia is the Southeast Asian nation’s biggest listed property developer by sales.

The Employees Provident Fund, Malaysia’s biggest pension fund, has been approached to join the bid, though hasn’t made a commitment, Nik Affendi Jaafar, general manager for public relations said by phone today.

Planning permission was granted to Real Estate Opportunities Plc, controlled by Irish developer Treasury Holdings Ltd., last year for a 5.5 billion-pound redevelopment of the station. SP Setia tried to buy the debt related to the power station in November for 262 million pounds and the offer was rejected.

By Bloomberg

Positive on Glomac land buy

GLOMAC has entered into a sale and purchase agreement with Lee Chin Cheng Dengkil Oil Palm Plantations Sdn Bhd, to purchase a piece of agricultural land in Sepang, Selangor, measuring 191.75 acres, for RM66.8mil or RM8 per sq ft (psf).

The purchase will be financed via internally generated funds and borrowings.

Glomac intends to develop a mix residential development on the land.

Given the land size of about 200 acres, we believe this development is likely to replicate its existing townships like Bandar Saujana Utama (1,070 acres) in Sungai Buloh and Saujana Rawang (345 acres). The development will provide affordable housing.

Assuming land efficiency ratio is of 70% and there are 15 units terrace houses per acre as well as an average selling price of RM350,000 per unit, we estimate the township to potentially yield a gross development value (GDV) of RM700mil.

There are no similar land deals transacted within the area recently for comparison.

Referring to iProperty.com, the acquisition price at RM8 psf appeared to be on the high side if we compare it with the current asking prices of RM4 to RM9 psf for agricultural land in Sepang.

Nevertheless, if we compare the total land cost of RM66.8mil against the total estimated GDV of RM700mil, the land cost would account for 9.5% of total estimated GDV, which we deem is fair.

Glomac's balance sheet is healthy and with a net cash of RM31mil as at January, it should provide financial flexibility for the acquisition. Hence, we do not expect the land acquisition to reduce the group's ability to payout dividend in the future.

Given the rising property prices and land scarcity in first-tier locations in the Klang Valley, we expect property demand to be decentralised from first-tier locations to areas like Cyberjaya, Kajang, Puchong and Seri Kembangan.

As such, we are positive on Glomac's move to expand its landbank in Sepang. In 2012, the group has made two land purchases with estimated GDV replenishment of RM1.5bil.

There is no change to our financial year 2012 and 2013 earnings projections. However, we raise our financial year 2014 earnings by 2.9% as we expect the progress billing from this project to begin then.

Given the change in future earnings and cashflow projections, we raise our discounted free cashflow to equity valuation higher to RM1.10 per share from RM1.08 per share previously, based on an unchanged discount rate of 16%.

By The Star

KLCC Prop jumps on Kenanga upgrade

KLCC Property Holdings Bhd, owner of Kuala Lumpur’s Petronas Twin Towers, gained 5.1 per cent to RM4.09.

The stock, which headed for a record close, was upgraded to outperform from market perform at K&N Kenanga Holdings Bhd.

An outperform means the stock’s total return may exceed 10 per cent over 12 months, according to the report.

The share price estimate was raised to RM4.60 from RM3.50, it said.

By Bloomberg

Mutiara Burau Bay Resort to stop ops?

HOTEL DEVELOPMENT: New owners said to be planning four- and five-star resorts on existing site and adjoining plot of land

The three-star Mutiara Burau Bay Resort (MBBR) in Langkawi is said to be closing down, as part of efforts by its new owners to build a new resort in its place.

Business Times has learnt that the 150-room resort, which commands a stunning beachfront, is expected to cease operations by the end of this year.

This is following a reported sale by its old owners the Langkawi Development Authority (LADA) to Langkawi Tradewinds Corp Bhd (TCB), a company controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary.

It is also learnt that two resorts - one four-star and another five-star - will be constructed on the land where MBBR is sited, along with an adjoining plot of land.

LADA chief executive officer Tan Sri Khalid Ramli did not respond to emailed questions from Business Times on this development.

TCB has been operating and managing the resort for LADA.

On March 12, TCB announced that its indirect wholly-owned subsidiary, Benua Mahsuri Sdn Bhd (BMSB), had entered into a lease agreement with LADA for a cash consideration of RM34.7 million.

The lease agreement stated that over 14 hectares of Malay reserved land (also referred to as leasehold land) located in Mukim Padang Matsirat, Langkawi, will be leased out by LADA for 81 years from January 2013 to 2093.

TCB stated on its website that the lease agreement is subject to BMSB obtaining declaration from the relevant state authority and that the leasehold land would be handed over to BMSB on January 1 2013 and the company is set to start constructing a new hotel within three years from the date of the lease agreement.

Without stating the costs involved, TCB stated that construction costs will be in line with acceptable industry standards. The construction of the hotel will be funded from a combination of internally generated funds and external borrowings.

TCB now owns luxury hotel The Danna and adjoining Perdana Quay development where the Telaga Harbour marina is located.

Sources say that the empty plot of land between The Danna and MBBR is likely to see the construction of one of the two new resorts being planned by TCB.

By Business Times

TA raises Glomac’s target price

TA Research raised the target price of Glomac Bhd to RM1.10 per share from RM1.08 as it viewed positively the property developer’s move to expand its landbank in Sepang, the southern part of Selangor state.

“Given the rising property prices and land scarcity in the first tier locations in the Klang Valley, we expect property demand to be decentralized from the first tier locations to areas like Cyberjaya, Kajang, Puchong and Seri Kembangan,” TA said in a research note on Monday.

Glomac announced on Friday it was buying a piece of agricultural land in Sepang measuring 191.75 acres for RM66.8 million. It said it intended to develop the land into a mixed residential property.

Maintaining a "buy" on Glomac, TA said it raised the property developer’s financial year ending April 30, 2014 (FY2014) earnings by 2.9 percent, as it expected the progress billing from the project to begin in that financial period.

By 10.38am, Glomac shares were down 1.78 percent, in line with the Malaysian benchmark stock index’s 1 percent fall.

By Reuters

HLIB: Glomac land buy part of key strategy

Hong Leong Investment Bank Research has described the land acquisition by Glomac Bhd as a continuation of its key strategy to acquire sizeable tracts of land in the outskirts of Klang Valley.

The company acquired 77.59 hectares of agricultural land in Dengkil, Selangor, from Lee Chin Cheng Dengkil Oil Palm Plantations Sdn Bhd for RM66.589 million.

The research house said the land's exact mix and gross development value was yet to be determined but it expected Glomac to roll out affordable housing projects.

"However we do not expect any launches before 2014 due to Glomac's ample land bank in Puchong and Kuala Selangor.

"And, the low acquisition price of only RM8 per square feet removes the urgency for a quick turnaround launch," it added.

Following the land acquisition, the research firm maintained a "hold" call on Glomac Bhd with an unchanged target price of 87 sen.

By Bernama

Raub to become a tourism hub

RAUB: The Tourism Ministry is preparing a blueprint to promote Raub as a tourism destination.

Minister Datuk Seri Dr Ng Yen Yen said the Raub Integrated Tourism Development Blueprint would improve the livelihood and employment opportunities for the locals.

“It is my mission to develop Raub as an integrated tourism district because of its abundant natural resources and good accessibility.

“Moreover, there are two well-known home-stays in Sungai Pasu and Gali Hilir,” she said when opening the East Coast Economic Region Development Council empowering programme for Raub district here yesterday.

Also present was ECERDC chief executive officer Datuk Jebasingam Issace John.

Dr Ng said Raub district would also have 27 projects to develop tourism and upgrade facilities worth RM15.87mil under the Ninth and 10th Malaysia Plan.

She said the ministry had also picked Kampung Sungai Pasu as a 21st century village with access to WiFi connection while still maintaining its traditional values and culture.

On the ECERDC programme, Dr Ng said it would provide training in academic and entrepreneurship skills to local youths.

“The programme will help bridge the gap between urban and rural areas.”

Dr Ng said everyone in the tourism industry had the responsibility to maintain their services and products.

“Failure to do so could mean a loss of financial resources,” she said, adding that besides tourism operators, local leaders and local government officers, even the ordinary people shared the responsibility of selling the country’s tourism products.

“However, what normally happens when these efforts fail is that there will be parties blaming each other for not giving support.”

By The Star

Debt, property risks curb China stimulus firepower

BEIJING: Investors counting on China to repeat its huge 2008-09 stimulus to backstop global economic growth are failing to recognise Beijing's limited scope to deliver another major spending surge.

The 4 trillion yuan ($628 billion) stimulus package launched to counter the post-Lehman global crisis won worldwide applause but left a stellar bill - a 10.7 trillion yuan ($1.7 trillion) mountain of local government debt, the risk of sour loans as growth slows and a super-heated property market.

Add in a naturally declining growth rate and China's ability and willingness to deliver a forceful response to mitigate the global impact from Europe's deepening debt crisis are seriously curtailed, analysts say.

"Not only is the policy room smaller, but the incentives for the government to produce a large stimulus package are smaller," Qinwei Wang, China economist at Capital Economics in London, told Reuters.

The National Development and Reform Commission (NDRC), China's top economic planning agency, is fast tracking investment projects to support economic growth, expected by economists to slide this year to its weakest pace since 1999.

Premier Wen Jiabao's had pledged to make the task of supporting growth more prominent, although the latest spending push is more cautious and selective than the 2008-09 stimulus, focusing on infrastructure, steel and green energy projects.

"The size of the stimulus this time round will be much smaller judging by both the needs and the constraints," Lu Feng, an economist at Peking University, said.

Few analysts can give an exact tally on the "mini" stimulus, which also includes tax cuts and subsidies for consumers.

Beijing has pledged to stabilise growth with policy fine-tuning. So far that has also included three cuts in banks' reserve ratios since November. There is little sign that Beijing will loosen its grip soon on the property sector, as it did in 2008.

Back in 2008-09, Beijing sought to stimulate growth in what it described as a "fast and heavy-handed" way. The central bank shifted policy gears to complement the pump-priming, as the economy sank into deflation. "INVESTMENT ADDICTION"

In the dark days of the financial crisis, Beijing won international praise for turning the economy around and bolstering global growth.

But the unfettered spending fuelled economic distortions, ranging from over-investment to a come-back of state-owned monopolies.

The new investment push has already drawn fire from some Chinese academics, who argue that the short-term gain in economic growth could further worsen the economy's structure. For example, investment accounted for half of GDP growth.

"This will deepen the economic imbalances and make the further adjustments even more difficult," said Zhao Xijun, an economist at Renmin University in Beijing.

"It's like taking drugs. It's difficult to give up once you get such investment addiction. It's time to give up the addiction and reform economic structures to help long-term growth."

Although billed as a 4 trillion yuan package, only a quarter of that came from the central government. The rest was largely financed by banks that lent heavily to local governments, resulting in a staggering 10.7 trillion yuan in debt.

Standard Chartered Bank estimates that the total spending as a result of the two-year stimulus could be 10 trillion yuan.

Chinese banks have been told to roll over such loans as local governments face a revenue crunch due to falling land sales. But they are unlikely to open their purse strings again.

"The key constraints are policymakers' hesitation to repeat the mistakes of the 2008 stimulus and banks' reticence to lend on such a grand scale," Stephen Green, chief China economist at Standard Chartered Bank, said in a research report.

Beijing still has formidable fiscal firepower backed by huge revenues, but it also faces a big debt burden and obligations to shore up social security systems.

Various China government agencies have different estimates of the total size of local government debt. Yang Kaisheng, head of the Industrial and Commercial Bank of China, has put total central and local government debt at 43 percent of GDP.

Some analysts put total public debt, including implicit liabilities such as bond issues by the railway ministry, policy banks, and bad loans in the banking system, at 80-90 percent of GDP - higher than the international standard of 60 percent.

Shi Xiaomin, vice president of China Society of Economic Reform, a think-tank under the NDRC, said the new stimulus may not be effective due to the problem of overcapacity.

"Banks are having difficulty lending even though they have money because companies don't want to borrow," he said.

The central bank is widely expected to cut bank reserves further and may even cut bank lending rates to spur growth. REFORMS With China's underlying potential rate of growth falling in line with the country's demographic shifts and the diminishing dividends from entry into the World Trade Organisation and market-based reforms, Chinese leaders feel less urgency to stimulate growth, analysts say.

The government, which has long pledged to wean the economy off dependence on investment and exports, has set an annual GDP growth target of 7.5 percent for 2012. Between 2011 and 2015 it aims for average growth of 7 percent a year.

"China's potential growth rate is falling but it's not entirely a bad thing. If we assume potential rate is 8 percent, that means we don't need to worry too much if growth falls to 7 percent," said Lu at Peking University. China's annual economic growth is expected by analysts to fall to 7.9 percent in the second quarter, the first dip below 8 percent since 2009. They forecast 8.2 percent for 2012, the lowest level since 1999.

Xia Bin, a former adviser to the central bank, said last week that slowing growth alone does not imply a hard landing, as long as the job market and the banking sector remain stable.

In 2008-09, a sudden collapse in China's exports threw some 20 million migrant workers out of job.

Reforms will be the key to averting a sharp slowdown, analysts say. Beijing appears to be moving in the direction.

"New sources of growth need to be unleashed, and we think the government must speed up reforms to encourage more private investment, including in the service sector," Tao Wang, China economist at UBS, said in a research report.

Wang at Capital Economics expects growth to slow to 7.8 percent in the second quarter before rebounding to 8.5 percent in the third, with the full-year rate slowing to 8.5 percent from 9.2 percent in 2011.

But Shi at the think-tank sounded more bearish, expecting full-year growth to slow to around 7 percent.

By Reuters

Malaysians urged to keep house plants with health benefits

INDOOR green plants are more than decorations because many of them also have the power to make a difference to our quality of life.

From clearing cigarette smoke to repelling mosquitoes, houseplants such as peace lilies and geranium are set to feature more prominently in Malaysian houses soon.

Deputy Agriculture and Agro-based Minister Datuk Chua Tee Yong, who was captivated by the plants during a visit to the Malaysian Agricultural Research and Develop-ment Institute (Mardi) in Serdang recently, said plans were afoot to raise public awareness on such plants so more people could enjoy the benefits.

“They are also beautiful and easy to maintain. All them of them have different uses and strengths,” he said, citing peace lilies which help to clear the air of cigarette smoke as an example.

For people who are allergic to dust in the air, Chua suggested that they plant bamboo palms at home because it could reduce irritation caused by air pollution.

“One can also trade their mosquito coil or spray for geranium plants which have the ability to ward off mosquitoes,” he added.

Chua said geranium plants could also double as an insect repellent when placed on balconies of apartments or condominiums.

Meanwhile, Mardi director-general Datuk Dr Abd Shukor Abd Rahman said these plants, costing between RM5 and RM10, were God’s gifts.

He said some of the plants originated from tropical rainforests but had long been planted as decorative plants in local households.

“Mardi is trying to identify the active compound in these plants which enable them to have these special abilities.

“If we can process the compound, we can create products for commercial use,” he said. The following are some of the indoor plants and their uses.

Peace Lily

Peace lily has the ability to purify indoor air from tobacco smoke and trading it for fresh oxygen. The plant also gets rid of toxic gases such as formaldehyde found in paint, and benzene, which is found in cigarette smoke. With its dark green leaves and spade-shaped white flowers, it is also a beautiful plant that adds a fresh touch to home surroundings. Peace lilies thrive in shady areas and needs to be watered about once a week. Keeping several peace lily plants at home can help reduce stuffiness in the air.

Geranium

With the citrus smell of its leaves, the geranium plant has the very practical and useful ability to repel mosquitoes. It is suitable to be placed in bedrooms and gives off a slight fragrance in the air. While it can be kept indoors, the plant needs to be brought out for some sunshine every two to three days. The plant takes about two months to grow from seed to a mature plant.

Aloe Vera

Perhaps more well known than other houseplants, the aloe vera is believed to have healing properties and can be used to treat wounds. This succulent plant is also able to clear the air from toxic gases like formaldehyde and benzene. Commercially, aloe vera gel is processed into facial products, yogurt, beverages and some desserts.

Chinese Evergreen

The Chinese evergreen plant has the ability to filter various toxic gases such as ammonia, formaldehyde, carbon monoxide and benzene. It is easily maintained and does not require much sunlight. This leafy plant grows from 20cm to 150cm in height. It is a popular ornamental plant seen in shopping malls, hotels and offices as it is easy to grow.

Spider Plant

With its leaves stretching out like spider legs, this plant is helpful in purifying the air and reduces indoor air pollution. It clears the air from pollutants such as benzene, formaldehyde, carbon monoxide and xylene. This plant thrives easily but grows best at temperatures between 18°C and 32°C.


By The Star

Greater KL initiatives a good opportunity for city to become a well-planned one

Without the softer and more artistic aspects, Kuala Lumpur will remain pretty much a concrete jungle.

KLANG Valley folks must be keeping their fingers crossed, hoping they will be able to inherit a better planned and user-friendly city when the Greater Kuala Lumpur (GKL) initiatives materialise.

If we look closer, Kuala Lumpur is just a sub-set of the Klang Valley and the GKL actually involves quite a number of local authorities as well as municipal and city councils. To be precise, the 279,327ha covers districts under 10 municipalities namely Kuala Lumpur, Putrajaya, Selayang, Ampang Jaya, Petaling Jaya, Subang Jaya, Shah Alam, Klang, Kajang and Sepang.

To ensure this Economic Transformation Programme project becomes a reality, all the local authorities should join forces to achieve a common mission that has the potential to fast-track the GKL to join the ranks of the global liveable cities league.

It has been observed that the top three “best” cities in the world, according to Mercer Consulting's Quality of Living Survey are Vienna, Zurich and Auckland - all have great connectivity, cultural and civic amenities and green spaces.

The array of development projects that are going on in many parts of Kuala Lumpur and the other parts of the Klang Valley is indeed a rare and fortuitous opportunity for the GKL to be redesigned and revitalised to have the attributes of these global liveable cities.

One of the major concerns, however, is that most development projects in our cities are still being planned on an ad-hoc basis without a clear focus or theme that is part of a holistic master plan.

The importance of such a master plan cannot be over-emphasised as it acts as the development blueprint that will ensure all the different components will be planned in unison towards a bigger common objective.

Among the key components to look into are the provision of adequate infrastructure for fast and cost-efficient connectivity of people (good public transportation, roads and highways) as well as data and information (broadband connectivity) and dedicated spaces for cultural and civic amenities and green spaces.

It is time to showcase the softer and more artistic sides of Kuala Lumpur to promote cultural, arts and live performances which will intersperse with the brick and mortar of the capital city attributes that will create a more lasting impact on locals and visitors alike. Without those attributes, Kuala Lumpur will remain pretty much a concrete jungle.

With the fast pace of life and the fast-changing world we live in today, things have grown more complicated with each passing day and it will help if our cities have the attributes to remind the people of the need to “slow down” and the value of seeking personal renewal and rejuvenation.

Some quiet moments at the parks, art galleries, museums and libraries will do much good for the heart and soul. These are some of the facets of our capital city that have yet to be tapped and it should be showcased to the world.

When considering projects for the city, planners should not just be motivated by the dollars and cents of how much profit can be churned out from the projects but more importantly they should bring back life and add value to the city's living environment.

Despite its relatively “young age” compared with other older cities around the world, Klang Valley folks must have noticed that a number of sections around Kuala Lumpur have aged and grown quite dilapidated. They can actually do with some facelifts.

One of the most obvious examples are the squalid looking apartments and flats that badly needed a new coat of paint at the very least.

A good measure to prevent buildings from turning into slumps is to pass a legislation that requires property owners to upkeep and maintain the buildings' external facade and paint work at least once every five years so that they will not turn degraded and become eye-sores. Those who fail to do so will have to pick up the tab for the maintenance work that will be done on these buildings by the city councils.

That way we can ensure that the buildings in the capital city will be kept in relatively presentable shape and will be able to blend in with other newer developments coming up in the city.

Many of the old dilapidated buildings are high-rise municipal council flats that have been built many years ago and the residents are mostly tenants who do not have a vested interest in the upkeep of the property. In such a situation, the councils will have to uphold the responsibility of the building upkeep and maintenance.

Deputy news editor Angie Ng shares the hopes of Klang Valley folks for a more liveable environment and quality of living all round.

By The Star (by Angie Ng)

KL prime property market quarterly snapshot shows progress

Despite increasing economic uncertainties, Kuala Lumpur's prime property markets continued to perform well as 2011's momentum carried into 2012, albeit at a slower rate.

Condominium

In the first quarter of this year, the high-end condominium stock increased to 21,214 units with the completion of 285 units in a Bangsar located project. The freehold development, designed for “young and aspiring urbanites,” has six types of unit layout with built-up areas ranging from 671 sq ft to 1,610 sq ft all of which have been sold.

The number of high-end launches slowed as developers focused on the more saleable mid-price range market. One high-end development, located in Ampang, was launched in the first quarter. With good demand from both owner occupiers and investors and early pre-launch marketing by the developer, the freehold development, comprising 500 units, has been almost fully sold. Activity in the high-end condominium market is, however, expected to slow this year, in line with more caution in the market. More developers are expected to adopt a wait and see attitude and many are expected to promote and market their products to gauge demand before officially launching them.

Demand in both the sale and leasing markets has been stronger for smaller units and we anticipate this trend will continue this year with developers building smaller more affordable' units, which cover a larger purchaser catchment. We also expect to see more developers delivering SOHOs (small office home office), SOVOs (small office versatile office) and SOFOs (small office flexible office) in the short term.

Generally, market prices and rental values remained stable and rental rates were steady and average net yields were in the range of 3.5% to 5%. We anticipate that market prices will consolidate this year and rentals will continue to face downwards pressure despite the relatively strong holding power of many investors.

Office

Following the completion of two buildings, located in the city's Golden Triangle, the total existing supply of prime office space in Kuala Lumpur city increased by 1.1 million sq ft. The city centre's prime office market is expected to increase by 2.04 million sq ft this year with the delivery of four prime office buildings.

The average occupancy rate in KL city centre declined from 84.9% in the fourth quarter 2011 to 81.3% in first quarter this year as the newly completed offices were yet to register any physical occupation. However, one of the two was reported to be fully pre-committed. The office market in the city centre registered a net absorption of just below 190,000 sq ft and notable leasing activity was recorded within numerous prime buildings in the Golden Triangle.

In the first quarter this year, the average net rental reduced marginally as many landlords are still maintaining the same rental rates. Some, however, are now willing to offer attractive incentives such as longer rent free periods to attract prospective tenants.

With limited stock available in the market and steady demand from Malaysian investors, the investment market was relatively quiet and no major transactions were concluded.

We believe that if all buildings are delivered on time, the oversupply scenario will become more serious and with steady local demand, but slowing foreign demand, the occupancy rate in the city centre will decline. The lower occupancy rate will result in some landlords reducing their rental rate expectations in a tenant favourable market. Generally, market prices are expected to remain stable but assets with high occupancy rates and superior specifications within prime locations could register some capital appreciation.

Retail

Supply increased marginally, with the completion of the refurbishment and extension of one suburban, prime-retail centre, adding approximately 92,000 sq ft to the total stock and a further 1.4 million sq ft of prime space is expected to be completed by the end of the year in both the city centre and the suburbs.

The average occupancy rate declined marginally from 91.7% to 91%, predominantly due to retail centre owners and retailers undergoing refurbishments of their outlets. However, strong demand prevailed with the majority of the vacant space in new retail developments being pre-committed to by tenants.

Rental and market prices generally remained stable for the first quarter of this year with limited investment stock available. No en bloc transactions involving prime-retail centres were recorded. Investor interest, however, remained strong with a keen focus on prime-retail investment opportunities in either the city centre or the suburbs.

In the city centre, the average occupancy rate is forecast to increase over the next 12 months as retailers take physical occupancy upon completion of their fit-outs and renovations. In the suburbs, however, the market is expected to enter a temporary adjustment period where the occupancy rate is anticipated to reduce marginally as substantial supply will be completed during 2012.

We expect rental values to generally remain stable this year, but there is room for improvement in select prime retail centres in the city centre. Market prices are more likely to see an upside as interest from both local and foreign investors remains strong and many owners remain “unwilling” to sell at the prices most investors are prepared to pay.

David Jarnell, senior vice-president and head of research at Jones Lang Wootton, has over 25 years working experience in the property market and has been based in KL since 1996. This is an extract of a report released this week.

By The Star

Nilai stirs excitement for Sime Darby

Iluna has a modern architectural design featuring either vertical or horizontal elements. It is the first super-link house development in the Nilai Impian township.

GROWTH activity is spreading. And it is spreading fast into the region south of the Klang Valley Nilai.

As director of Henry Butcher Lim & Long Sdn Bhd Fahariah Abdul Wahab puts it: “While city-centric people may be quick to dismiss Nilai, the reality is that the area has been growing steadily.”

Whether one acknowledges it or not, there is value in Nilai.

Zulkifli: ‘We are looking at the community from around Nilai and Seremban, and employees at KLIA and Putrajaya as well as those from the civil service.’

While prices of landed property within the urban areas of Klang Valley have sky-rocketed, Nilai presents itself as a new place to seek comfortable home-living. And yes, we are talking landed properties here, not small condominiums.

Following the growth corridor's movement towards the south, developments going on at the fringes of Greater KL are picking up pace and Sime Darby Property's (SDP) Nilai Impian.

The township development began in 1997, steered by Negara Properties Bhd before it merged with the SDP group three years ago.

This development is sited on 1,263 acres freehold land, with 41% reserved for residential developments, 29% commercial and 33% industrial developments.

Currently, Nilai Impian is 50% completed with a population of about 5,000 residents. It can accommodate at least 7,000 more people.

The township is partially visible from the North-South Expressway and is accessible via major highways like Elite, SILK and Maju Expressway, PLUS Highway via the Nilai Interchange, KL International Airport (KLIA) Link Road and Kajang-Seremban Highway (LEKAS).

It is one of 10 townships SDP has under its belt and is about 15km away from KLIA and Putrajaya.

SDP head of property Zulkifli Tahmali is positive that things are getting exciting for the township of RM1.4bil gross development value.

He points out that Nilai Impian will be in the middle of mature developments and employment centres all around such as KLIA, Putrajaya, Cyberjaya and other townships.

Job opportunities would come from industrial developments like Bandar Baru Nilai, Nilai 3, Nilai Square, Nilai Industrial Area and Nilai 3 Industrial Area.

Among the education institutions peppered around Nilai Impian are Universiti Sains Islam Malaysia, Nilai University, INTI College, Murni Nursing College, Nilai International School and upcoming boarding school Epsom College.

“With the LEKAS highway providing better access, the area will only become more vibrant.This is the beginning to (what we believe will become a popular) area,” he says.


Zulkifli likens Nilai Impian's potential to SDP's Bukit Jelutong township in Shah Alam.

“When we started Bukit Jelutong, the Guthrie Corridor Expressway was not there. The access just goes to Bukit Jelutong and we had use other roads to get to other areas,,” he says.

Nilai Impian will be another Bukit Jelutong in years to come.

On why it took 15 years to bring some semblance to the township, Zulkifli says the company has initially focused on the industrial aspect of it.

“The project only accelerated three years ago when SDP merged with Negara Properties. Previously it was driven by the industrial estates around it,” he says.

Zulkifli says that the purchaser profile for Nilai Impian would be the people from around the area.

“People who are in the middle-income bracket are our target. We are looking at the community from around Nilai and Seremban, and employees at KLIA and Putrajaya as well as those from the civil service.”

The township is targeted at owner occupiers, rather than investors looking for capital gains. It will have landed houses, mostly terraces, and mid-rise apartments.

Zulkifli notes that there is demand for semi-detached houses and bungalows, which will be developed later on in Nilai Impian.

There are five projects launched in Nilai Impian so far Iluna, Davina 2 and 3, Medina and Impian Avenue, all of which had 75% take-up rate compared with the average 50% for areas like this.

“The prices (of the property) have not gone up much. Therefore, there are not much investor interest. But I think the area has great potential ,” he says, adding that SDP is the only developer working on a project of this scale in that vicinity.

On the big picture front, he says that the company will keep making investments in Nilai Impian even though projects in Klang Valley naturally have higher returns for the group.

“We need to develop this kind of places because these are our bread and butter projects,” he adds. “Even if the economy is bad, we're still be there because this is what people would need.

He says while SDP is better known as a high-end developer, “that is not all that we do”.

“We also do this bread and butter projects. We build these townships and put in the same effort into them as with the higher-end developments elsewhere,” he says, adding that about 70% of SDP's portfolio comprise these developments.

However slow the appreciation of the property value in Nilai may be, landed property prices in Nilai have grown from the range of RM250,000 to RM350,000 in 2009 to RM420,000 to RM430,000 now for units with built-ups of between 1,700 sq ft and 2,000 sq ft.

While he admits the prices of SDP projects may be slightly higher than other smaller developers, he says that SDP brings amenities to the townships it develops.

Among the infrastructures SDP will introduce to Nilai Impian is a highway interchange and other road system to ease accessibility, as well as utilities.

“If you're building a township like this, you have to fork out money to build the roads and drainage system. Then only will we look at the parcels of land to build the properties. We will also be enhancing whatever utilities that may already be there,” he says.

He adds that there will be a toll gate at the new interchange, within Nilai Impian itself, to enhance accessibility not only to the township but also surrounding areas like Bandar Bukit Raja and Bukit Mahkota, to name a few.

By The Star

Bina Puri to leverage on new businesses as construction cost rises

With construction business margins getting squeezed because of higher labour and raw material costs, Bina Puri Holdings Bhd group managing director Tan Sri Tee Hock Seng is seeking to add recurring income into the company portfolio and diversify its core operations.

He tells StarBizWeek that he would personally be steering the company towards more recurring income and new businesses, and would divert all his personal “kangtao” to Bina Puri. Tee, a true blood Hokkien, places emphasis on “kangtao” also known among the Chinese as “guanxi” and often described as the “bamboo network” of clan associations, guilds and chambers of commerce and industry.

In the spirit of diversifying, Tee first ventured into the power generation business when an acquaintance offered some power plants in Indonesia for Bina Puri to purchase and this has turned out to be fruitful.

“Margins generated by the power plants are very healthy and is currently generating about 40% of its revenue,” he says in an interview recently.

However, according to him, the venture was not smooth as there was a lot of red tape, but guidance from his acquaintances made all the difference.

The company acquired an 80% stake in Indonesia-based PT Megapower Makmur via Bina Puri Power Sdn Bhd, and spent close to US$5mil on the investment.

Bina Puri is going to add a 4.2 megawatt (MW) hydropower plant to its portfolio of power plants soon as discussions are already in their final stages and an announcement is expected once the power purchase agreement is signed between the parties in Indonesia.

The hydropower plant will complement the company's existing five diesel-powered plants that have a combined capacity of 10MW located in Pulau Bangka, Indonesia.

A miner of the 1970s, Tee is also looking at a coal mine located in Kalimantan, Indonesia, which predictably, Bina Puri is going in via a local partner familiar with the area.

“It would be a joint venture, and we will be engaging Chinese contractors for this mine, as they are well known for their mining expertise,” he says.

While Tee is setting the stage for the company to diversify, construction is still the company's forte and core business, and the company is targeting to commence work as early as October for its RM864mil Pakistan highway concession.

“Our team is currently working on the technical and financial aspect of the motorway, and financing is expected to be done via Chinese banks based in Pakistan,” he says.

Pakistan's National Highway Authority awarded the work to Bina Puri in January to convert the existing four-lane highway into a six-lane motorway on a built-operate-transfer basis for a concession period of 28 years.

“I would like the construction business to contribute 50% to revenue, property development to generate 30% and mining and recurring income to give the rest” he says.

He says if the mineral business goes well in the future, the company will scale down on its construction business.

“Margins for construction contracts are very low, and not only are we faced with rising building material prices, the industry is also suffering from labour shortages,” he says, adding that he prefers to venture into property development, which offers better profit margins.

While its property development division had been somewhat dormant for the past two years, the company has already brought forward plans worth RM1.5bil in gross development value.

“Although construction has been our bread and butter, we must leverage on our prominent brand name and change with the times,” Tee says.

By The Star

Cyberjaya developer to pump RM2.5bil

Mustapha says Cyberjaya has become a development hotspot.

PETALING JAYA: The master developer for Cyberjaya, Setia Haruman Sdn Bhd, is set to pump a whopping RM2.5bil over the next five years to develop four projects and construct additional infrastructure for the area.

Called Cyberjaya’s “new wave”, chairman Tan Sri Mustapha Kamal Abu Bakar said that the projects were namely CBD Perdana 3 & 5, APEX Residence and a proposed mixed residential development.

About RM2.1bil will be used to develop the projects, while RM400mil has been allocated for the construction of infrastructure such as roads and drains, water reservoir drainage systems, sewage treatment plants and fibre optic.

Setia Haruman is 75% owned by Emkay Group, with the balance held by UEM Land Bhd. It is entrusted with designing, planning and developing about 2,830ha in Cyberjaya.

Mustapha said Cyberjaya had become a development hotspot with many property developers seeing potential to cater to working adults and students in the area.

“Over the last three years, 16 major developers have acquired large tracts of land for residential, commercial and institutional developments. This has resulted in Cyberjaya experiencing a residential and commercial boom,” he said.

Setia Haruman chief operating officer Lao Chok Keang said the company expected to fund the projects with internal funds.

“We have a facility of about RM200mil, and the gross development value of the projects would be 20% to 30% higher than our investment,” he said.

Since 2009, other developers like Mah Sing, SP Setia, OSK and Glomac began buying large parcels of land in the area, and there now are 16 developers building their projects concurrently in Cyberjaya.

The ongoing and upcoming cumulative investments amount to about RM20.6bil and are projected to reach RM52.6bil by 2016.

Cyberjaya now has about 11.1 million sq ft of completed offices, 263 shops, 3,200 completed residential units, four schools, and five universities and colleges.

Setia Haruman projects completed office space would reach 18 million sq ft by 2016, along with 1,200 shops, 14,000 residential units, seven schools, and eight universities and colleges.

Owing to the current ongoing projects, the company expects the town’s population to double to 100,000 by 2016.

Many multinational companies like HSBC, Huawei, Dell and IBM, among others, call Cyberjaya their home, with offices and staff based in Malaysia to support their regional business presence.

By The Star

Cyberjaya developer's grand vision

The main developer of Cyberjaya, Setia Haruman Sdn Bhd, will invest RM2.5 billion over the next five years to develop four mixed residential projects here, which it dubbed "Intelligent City".

Its chairman Tan Sri Mustapha Kamal Abu Bakar said the projects - CBD Perdana 3 and 5, APEX Residence and a proposed mixed residential development - will be riding on the "new wave" development of Cyberjaya, slated to start from this year right up to 2016.

Setia Haruman has also set aside RM400 million to build infrastructure such as roads and drains, water reservoirs, drainage systems, sewage treatment plants and fibre optic lines to service and support the "new wave" development.

"The projects' gross development value is about 30 per cent more than the amount invested," Mustapha said during a media briefing here, yesterday.

He said over the last three years, 16 major developers had acquired large tracts of land in Cyberjaya for residential, commercial and institutional developments.

The other developers include UEM, OSK Group, Mah Sing and SP Setia.

This "new wave" is expected to double the population here to 100,000 from the present 54,000.

"Property prices have appreciated by 30 per cent over the last two years and early investors have enjoyed substantial gains.

"With the many developments being undertaken by various developers, we expect Cyberjaya to be transformed from a development hotspot into a vibrant city of the future," he said.

Currently, the ongoing and upcoming accumulative investments in Cyberjaya by 16 developers is about RM20.6 billion.

By Business Times

Glomac buying Dengkil land for RM66.8mil

PETALING JAYA: Glomac Bhd is buying 191.75 acres of agricultural land in Dengkil, Selangor, for RM66.8mil or RM8 per sq ft from Lee Chin Cheng Dengkil Oil Palm Plantations Sdn Bhd.

Glomac told Bursa Malaysia that it had plans for a mixed residential development for the land. The deal is subject to the Estate Land Board's approval for the transfer of the land.

By The Star