PHB shelves proposals for Bangsar land

Pelaburan Hartanah Bhd owns the land where the Unilever headquarters and factory once sat.

KUALA LUMPUR: Pelaburan Hartanah Bhd (PHB) has shelved all proposals from several companies to develop a prime 8.09ha site on Jalan Bangsar in Kuala Lumpur, its chief said.

PHB, a unit of Yayasan Amanah Hartanah Bumiputera and Mayban Investment Management Sdn Bhd, owns the land where the Unilever headquarters and factory once sat.

It has received proposals from companies like Mah Sing Group Bhd, Malaysian Resources Corp Bhd (MRCB), SP Setia Bhd, UEM Land Holdings Bhd and Land & General Bhd.

Business Times reported recently that MRCB had emerged as the front-runner to secure the land development job, which is estimated to generate more than RM5 billion in gross development value.

However, PHB managing director and chief executive officer Datuk Kamalul Arifin Othman said it is not in discussion with any parties currently.

“We are just waiting for approval from the City Hall for the masterplan that we submitted to them early this year.

“Once the masterplan has been approved, we will decide on what to do next,” Kamalul told Business Times via a telephone interview recently.

PHB may award the contract to develop the land to one party or parcel it out to several property developers.

It may also take a stake in the project through a joint venture,
Kamalul said.

“This is a huge project that requires proper master planning.

We want it to be the next mega development for Kuala Lumpur,” he said.

Current developments in Kuala Lumpur include the MRCB’s KL Sentral integrated transport hub in Brickfields, SP Setia’s KL Eco City and Setia Federal Hill and the RM26 billion Tun Razak Exchange.

Set up by the government in 2006, PHB is to facilitate Bumiputera ownership in prime commercial real estate.

PHB also has a trust fund that invests in commercial
properties.

Meanwhile, Mah Sing – one of the interested developers – said it is waiting for a final decision from PHB on the status of its proposal and the land development plan.

“PHB has not come back to us. So we believe we still have a chance to bank the job.

“We think the contract would be awarded after the elections,” its managing director and group chief executive Tan Sri Leong Hoy Kum told Business Times.

By Business Times

More to Naim Holdings? Analysts say stock undervalued based on several factors

Naim Holdings’ outstanding order book stands at RM1.3bil, including the MRT contract, which will provide earnings visibility for the next four years

PETALING JAYA: Naim Holdings Bhd's stock is said to be undervalued after considering factors such as the group's real estate assets, earnings visibility and 34% stake in associate Dayang Enterprise Holdings Bhd, according to research analysts.

The group, headquartered in Kuching, Sarawak, was in the limelight recently after its wholly-owned subsidiary Naim Engineering Sdn Bhd won a RM208.2mil contract for one of the work packages for the My Rapid Transit (MRT) project in Kuala Lumpur.

Naim Holdings is involved in property development, and contracting of construction, civil engineering, oil and gas and infrastructure projects.

According to Bloomberg data, the major shareholders of Naim Holdings include Island Harvests Sdn Bhd (12.25%), Tapak Beringin Sdn Bhd (10.96%), Lembaga Tabung Haji (10%), managing director Datuk Hasmi Hasnan (6.67%), Skim Amanah Saham Bumiputra or ASB (5%), Employees Provident Fund (5%) and chairman Datuk Abdul Hamed Sepawi (4.86%).

Hasmi is also the chairman of Dayang Enterprise.

The group's market capitalisation is RM472.5mil. The stock closed 5 sen higher to RM1.89 yesterday.

TA Securities Holdings Bhd analyst Ooi Beng Hooi pointed out that Naim Holdings' 33.63% stake in Dayang Enterprise, which is a service provider to the oil and gas industry, is worth RM379.1mil or RM1.51 per Naim Holdings share (based on a price of RM2.05 per Dayang Enterprise share).

“Also, Naim Holdings has an undeveloped land bank of 2,620 acres in Sarawak with an estimated gross development value (GDV) of RM9.5bil,” said Ooi.

The group's flagship property developments are Bandar Baru Permyjaya in Miri, Desa Ilmu in Kota Samarahan, and the up-market Riveria satellite township in Kuching.

TA Securities is maintaining a buy call on Naim Holdings' stock, with a target price of RM2.26 per share.

Meanwhile, Kenanga Research has an outperform call Naim Holdings' stock, with a target price of RM2.94.

In a recent note, Kenanga Research said it was neutral on the MRT contract as it was within the research unit's financial year 2012 annual order book replenishment of RM500mil.

“We expect the contract margin to hover around 6% to 8% at the pre-tax level, which is in line with the group's track record.”

The research unit said to date, Naim Holdings' outstanding order book stood at RM1.3bil, including the MRT contract, which would provide earnings visibility for the next four years.

“The next re-rating catalyst for Naim Holdings will be additional new contracts secured this year. Thus far, the group has secured RM500mil worth of new contracts this year,” said Kenanga Research.

An industry source also reckoned there was plenty of share price upside potential for Naim Holdings within a two to three-year horizon, based on new property developments and possibly more government construction contracts in Sarawak.

The source pointed out that Naim Holdings would develop the site of the old Bintulu airport into an integrated upmarket commercial and residential project, with a GDV of RM2bil.

“Also, look at the proximity of the fast-developing new Samalaju Industrial Park, where international companies have invested, to Bintulu. A new RM1.8bil Samalaju Port project is also ongoing in Bintulu. So, there is strong potential for lucrative property plays for Naim Holdings,” said the source.

Samalaju is one of the five growth nodes of Sarawak Corridor of Renewable Energy (SCORE) and it will become the state's new heavy-industry centre.

Meanwhile, HwangDBS Vickers Research said Naim Holdings' MRT contract win underpinned its competitiveness, as it is the first East Malaysian contractor to be awarded one of the main packages of the MRT project.

“Future prospects remain bright with the development of SCORE, where Naim is poised to be one of the largest beneficiaries as the local champion.”

The research unit also said property sales remained robust in Sarawak, supported by the booming oil and gas industry.

Naim Holdings' unbilled sales stood at RM176mil, and the take-up for its new launches has been strong.

“The group generated RM184mil sales last year, the best since 2007. The strong sales performance will translate into sound financial results over the next two years.”

It should be noted that last year, Naim Holdings posted a significant 52.3% drop in net profit to RM46.6mil, compared with RM97.75mil in 2010.

Revenue dropped 32.8% year-on-year to RM411.9mil for the year ended Dec 31, 2011.

In its 2011 annual report, Naim Holdings pointed out that last year was only the second time in its 16-year history that the group has performed below expectations.

However, the group was confident the results were only a temporary setback due to factors such as the slowdown of Federal Government funding for major infrastructure projects in Sarawak, and the nationwide decline in construction margins.

Naim Holdings had posted improved results for the first quarter ended March 31, where its net profit grew 31.5% year-on-year to RM16.1mil. Revenue was 22% lower to RM94.2mil for the quarter under review, and the group attributed the earnings growth to improved margins for its construction segment as well as better performance of its associates and joint ventures, and a decrease in administrative expense.

HwangDBS Vickers Research said an earnings recovery on the horizon for Naim Holdings, and its balance sheet remained strong with 17% net gearing (as at March).

By The Star

IJM upgraded on property upside

IJM CORP BHD

By Kenanga Research

Outperform (upgrade)

Target Price: RM5.74

WE are upgrading our recommendation on IJM from a “market perform” to an “outperform”.

Our upgrade is mainly premised on our in-house upgrade of IJMLand’s target price coupled with its still ample upside (+12%) from the current share price.

Following the recent news on the Selangor water issues, we understand that IJM’s joint venture (JV) project for the Pahang-Selangor Water Transfer Project (PSWT) is currently progressing well at above a 50% completion rate with the project financing, with Japan Bank for International Cooperation (JBIC), still intact. The management is in discussion with the Government to revive the NPE extension project with a new alignment, although the outcome is not likely to be decided in the near term.

Its associate, Kumpulan Europlus (KEURO) is expected to make the announcement on the finalisation of the West Coast Expressway (WCE) concession in the near term.

There are no material changes in our forecasts at this juncture, but we have increased our target price higher from RM5.56 to RM5.74 (+3%) following our upward revision on IJMLand’s revised net asset value (RNAV) for its property project in the United Kingdom.

We understand that there are concerns on the funding of the on-going PSWT project due to the fiasco in the Selangor water industry. To recap, a consortium led by Shimizu was awarded a RM1.3bil tunnelling (45km) contract for the PSWT project at the Pahang site.

IJM holds a 20% stake in the consortium together with UEM Builders (20%), Nishimatsu (30%) and Shimizu (30%). The project is slated for completion by late 2014 and management reiterated that JBIC is still financing the project.

We understand that the management is currently meeting with the Government to refresh the alignment of the proposed NPE highway extension project.

In our view, this could be due to the feasibility of the project and the competition with the existing Besraya Expressway.

Nonetheless, we do not expect the outcome to be out in the near term as the discussion could be prolonged due to land acquisition and final agreement on the concession terms.

In the meantime, the management expects its associate KEURO to announce the update on the signing of the concession agreement for the WCE highway project.

In a nutshell, IJMCorp will likely be running at its full capacity after securing the WCE highway construction works. Its current order book now stands at about RM1.7bil for the next two to three years.

We opine that its earnings visibility is fairly clear at this juncture while the potential WCE highway construction project will provide an additional three years’ earnings visibility to the group.

Risks involved would be the cancellation of the WCE project, a spike-up in material prices, a sharp decrease in CPO prices below RM3100 per metric tonne and slower take-ups for its property projects.

There are no material changes to our forecasts at this juncture even with IJMLand’s recent venture into the UK property market.

We have already factored in new contracts worth RM6bil for FY13, which will be mainly driven by the construction of the WCE highway (RM4bil to RM4.5bil).

By The Star

S’pore HDB to offer 20,000 flats in 2013

SINGAPORE: The Housing Board (HDB) will deliver at least 20,000 new flats next year.

That is the promise National Development Minister Khaw Boon Wan has given to Singaporeans in a bid to increase home ownership.

“I expect this sustained supply to firmly stabilise the housing market. This will give Singaporeans many options as they make their flat purchases prudently and wisely,” said Khaw on his Housing Matters blog.

The latest infusion of flats comes on the back of the 50,000 flats already promised for the past two years.

The government was also making steady progress in helping newly-wed first-timers land their HDB flats, going by the application rates for the latest Build-To-Order launch, he said.

Application rates for first-timers, or those that have yet to take up a housing subsidy, is 1.7.

“This means that almost all first-timers will get the chance to select a flat when they apply for one, especially in non-mature estates,” he said.

By The Straits Times/Asia News Network

Shares in India’s biggest developer rise

NEW DELHI: Shares in India's biggest property developer DLF rose after posting better-than-expected earnings for the three months to June.

DLF, controlled by billionaire Kushal Pal Singh and his family, reported late Monday that net profit fell 18% to 2.9 billion rupees (US$53mil) in the fiscal first quarter, from 3.58 billion rupees a year earlier.

The figure topped the 2.6 billion rupee profit forecast by analysts in a Dow Jones Newswires poll, sending its shares 1.44% higher at 214.35 rupees in morning trade yesterday.

Sales during the quarter slumped 10% to 22 billion rupees from a year earlier as buyers held off on purchases as Asia's third-largest economy falters under the impact of heavy borrowing costs and the weight of a global economic slump.

During the property boom years in the middle of the last decade, DLF took advantage of inexpensive interest rates to build homes, offices and malls.

But its performance now is a far cry from when it announced a full-year profit of US$1.5bil for the financial year 2007-2008 at the top of its earnings cycle and DLF boasted market capitalisation of US$40bil.

Now the capitalisation figure is down to a little more than US$6bil.

DLF has been battling to sell assets as it struggles to pare debts totalling 227 billion rupees.

Interest costs climbed 265% to 6.2 billion rupees during the quarter.

The company has lately been focusing on its home turf of northern India, easing up on plans to pursue a nationwide strategy.

By AFP

Boston Property beats Wall St forecast

NEW YORK: Office building landlord Boston Properties Inc reported quarterly funds from operations, a key measure of real estate investment trust performance, that easily surpassed Wall Street's forecast, in part due to termination income from a tenant at one of its largest buildings.

The company, whose chairman and chief executive is publisher Mortimer Zuckerman, reported second-quarter funds from operations (FFO) of US$206.8mil, or US$1.38 per share, compared with US$181.6mil, or US$1.24 per share in the second-quarter 2011.

Analysts on average expected Boston Properties to post second-quarter FFO of US$1.24 per share, according to Thomson Reuters. The company had forecast second-quarter FFO in the range of US$1.23 to US$1.25 per share.

FFO removes the profit-reducing effect that depreciation, a non-cash item, has on earnings.

Boston Properties owns or has interests in properties that are mainly first-class office buildings in New York, Boston, San Francisco and the Washington DC area.

By Reuters

DreamWorks plans U$3.2b theme park in Shanghai

DREAMWORKS Animation yesterday said it plans to build a US$3.2 billion (RM9.8 billion) theme park in Shanghai, as the US film giant seeks to bolster its presence in the booming Chinese entertainment market.

The studio's newly formed China joint venture, Oriental DreamWorks, is set to open the theme park in 2016, the creator of megahits like "Shrek" and "Kung Fu Panda" said in a statement.

The 20 billion yuan (RM9.8 billion) project - called the Dream Centre - will comprise entertainment facilities, animation exhibitions and commercial developments including hotels and shopping areas in Shanghai's Xuhui district, it said.

The announcement comes after Walt Disney, another US entertainment giant, last year broke ground on a planned US$3.7 billion theme park in Shanghai which is scheduled to open in 2015.

DreamWorks in February said it planned a US$330 million joint venture company with three Chinese partners - China Media Capital, Shanghai Media Group and Shanghai Alliance Investment.

Yesterday's statement posted on DreamWorks' website said it had formally established the joint venture with the partners, all state-backed Chinese firms which together hold a majority 55 per cent stake in the venture.

The company will make the next "Kung Fu Panda" movie, the third instalment in the series, in China as a co-production for release in 2016.

It plans to release up to three major films a year with its first feature-length animated film scheduled for global release in 2017, it said.

The huge commitment in local production comes even though Beijing maintains strict quotas which limit the number of foreign movies allowed into China.

China's box office grew an annual 35 per cent to US$2.0 billion in 2011, making it the second largest international market behind Japan, according to the Motion Picture Association of America.

By AFP

Sunway REIT FY12 pretax profit falls to RM420mil

KUALA LUMPUR: Sunway Real Estate Investment Trust’s (Sunway REIT) pretax profit for the financial year ended June 30, 2012, fell to RM420.46mil from RM553.66mil in the same period last year.

Revenue, however, rose to RM406.43mil from RM327.42mil previously.

In a filing with Bursa Malaysia yesterday, Sunway REIT said the retail segment’s revenue rose 23%, or RM54.7mil, to RM292.3mil due to a rental reversion in Sunway Pyramid Mall and better contribution from Sunway Putra Mall.

It said the hotel segment registered gross revenue of RM71.6mil, an increase of 28.6%, or RM15.9mil, compared with last year.

“The strong revenue growth was primarily contributed by Sunway Putra Hotel of RM9.1mil and hotel properties located in Sunway Resort City of RM7.3mil,” it said.

Sunway REIT said the office segment for the financial year recorded gross revenue of RM42.6mil, up 24.6%, or RM8.4mil, from last year, attributable to the addition of Sunway Putra Tower, which mitigated the drop in occupancy at Sunway Tower.

On its prospects, it said domestic demand would provide the support to sustain the economy amid softer external demand.

Sunway REIT said it would continue with its capital management programme in view of the accommodative monetary policy and was committed to distribute 100% of its distributable net income for the financial year ending June 30, 2013.

By Bernama

Two M’sian firms announce property projects in London in a week

PETALING JAYA: Within the space of only a week, two Malaysian companies have announced plans to develop property in London, underscoring the rising appeal of Europe's most iconic city as a safe haven in the current roiling global economy.

A progressively larger share of the world's capital whether from property firms or cash-rich investment funds has found its way to the global financial hub in recent times, hungry for stable returns in an otherwise anaemic, debt-strapped region.

On Wednesday, Amcorp Properties Bhd said it was entering into a joint venture (JV) to acquire a freehold office building in London's trendy Mayfair district, followed by IJM Land Bhd's Friday revelation of a mixed development on Royal Mint Street.

Analysts have favourably regarded IJM Land's latest venture, saying it diversifies the company's income stream from the current concentration in Malaysia.

To recap, IJM Land took a 51% stake in a JV with Lite Bell Consolidated Sdn Bhd for the project, which will buy a 999-year lease on a 2.7-acre site that has already obtained planning permission to be developed into 650,000 sq ft of gross floor area (GFA).

The site will be leased from Network Rail Infrastructure Ltd for some £20mil (RM97mil).

With a strategic location in the heart of London, the project will boast of “excellent views” of popular landmarks such as the Tower of London, Tower Bridge, Royal Mint Court, St Katharine's Docks and River Thames when completed, as well as superior connection to public transport, being above the National Rail and DLR railway lines.

It is just 1km off the city's financial centre known as the “Square Mile”.

The initial development plans involve a block of five-star hotel cum residences and three blocks of residential apartments with a combined gross development value (GDV) of £280mil (RM1.4bil).

In a filing with the stock exchange, IJM Land said the favourable exchange rate and lack of funding for property developers in London given the eurozone crisis provided a “window of opportunity” for its UK undertaking.

Affin Investment Bank said in a client note that the effective acquisition price of £30.80 per GFA was fair compared with the £74.10 paid by Sime Darby Property Bhd and SP Setia Bhd for the Battersea power station.

“The land cost to GDV ratio of 7.1% is also slightly more attractive than the 7.5% of SP Setia-Sime's acquisition.

“Importantly, we are generally positive on the medium-term outlook for London property given the strong interest from global buyers, including Malaysian high-networth individuals,” it explained.

Kenanga Research, meanwhile, opined that the guided GDV of RM1.4bil was conservative.

“Management is indicating average selling prices of £1,000 to £1,100 psf, which is saleable considering the area's pricing range of £1,000 to £1,500 psf.

“However, if we assume a very conservative 50% utilisation rate on the 650,000 sf of GFA with average selling prices of £1,000 psf, we arrive at a GDV of £325mil (RM1.6bil).

“We also understand that the group will maintain prices below £2mil per unit to avoid the higher stamp duty of 7% on any sales (usually 5% or less),” it noted.

The research unit added that there were no issues as far as funding was concerned, with IJM Land's net gearing expected to inch up to 0.1 times from a net cash position in its fourth quarter ended March 31, assuming a 70:30 debt-equity financing of the land and working capital of £30mil.

“The project will only be launched in the fourth quarter of the financial year 2014 (FY2014), implying significant earnings contributions from FY2015 onwards.

“In the short to medium term, the sales drivers will be from The Light Waterfront and its stable of mass housing projects (Shah Alam 2, S2@Seremban, Johor projects) plus its long-awaited township, Rimbayu, which is slated to have a GDV of RM11bil," Kenanga Research said, noting the launch preview for Rimbayu could take place this month.

It also pointed out that IJM Land is aiming to achieve RM1.5bil in sales in FY2013.

A weak pound, coupled with low interest rates, has helped propel institutional investors from the Far East to become the biggest buyers of central London office properties, real estate consultancy CBRE reportedly said last month.

Malaysia is now ranked second only to the US in a list of the top five investors in London by total investment volume between 2010 and the second quarter this year, with £2.35bil and £3.53bil ploughed in by both countries respectively.

Rounding off the list were Germany with £1.29bil, Saudi Arabia £969mil and Qatar £750mil.

By The Star

Mah Sing earnings forecast to hit RM209m

KUALA LUMPUR: AmResearch estimates that Mah Sing Group Bhd's earnings to rise from RM169 million in financial year 2011 to RM209 million in financial year 2012.

The forecast also includes RM260 million earnings in financial year 2013 and RM320 million in financial year 2014.

The research house said the estimation comes along with a three-year earnings compound 24 per cent annual growth rate, anchored by in-demand landed residential developments namely, M Residence 1&2 and Southville City.

"The group's earnings are very much secured with current RM2.5 billion unbilled sales," said the research house.

AmResearch said the annual pre-sales are expected to rise to RM3.5 billion in financial year 2013 and to RM4 billion in financial year 2014.

"The net gearing is expected to rise to 0.5 with one or two more land acquisitions by year end, but this is still within a comfortable level and should be pared down by its solid cashflows," it said in a research note.

AmResearch said Mah Sing has a 40 per cent dividend payout policy now and it expects the group to pay 11 sen to 15 sen dividend per share for financial year 2012 until 2014, translating to decent yields of four to six per cent.

The research house has put a "buy" rating, with RM3.60 fair value for the initiating coverage on Mah Sing based on a mid-cycle discount to its estimated RM4.80 per share net asset value.

By Bernama

Sunway REIT profit fell to RM420m in FY12

Sunway Real Estate Investment Trust's (Sunway REIT) pre-tax profit for financial year ended June 30, 2012, fell to RM420.46 million from RM553.66 million in the same period last year.

Revenue, however, rose to RM406.43 million from RM327.42 million previously.

In a filing to Bursa Malaysia today, Sunway REIT said the retail segment's revenue rose 23 per cent, or RM54.7 million, to RM292.3 million due to a rental reversion in Sunway Pyramid Mall and better contribution from Sunway Putra Mall.

It said the hotel segment registered gross revenue of RM71.6 million, an increase of 28.6 per cent, or RM15.9 million, compared with last year.

"The strong revenue growth was primarily contributed by Sunway Putra Hotel of RM9.1 million and hotel properties located in Sunway Resort City of RM7.3 million," it said.

Sunway REIT said the office segment for the financial year recorded gross revenue of RM42.6 million, up 24.6 per cent, or RM8.4 million, from last year, attributable to the addition of Sunway Putra Tower, which mitigated the drop in occupancy at Sunway Tower.

On prospect, it said domestic demand would provide the support to sustain the economy amid softer external demand.

Sunway REIT said it would continue with its capital management programme in view of the accommodative monetary policy and was committed to distribute 100 per cent of its distributable net income for the financial year ending June 30, 2013.

By Bernama

Pavilion REIT's earnings forecast raised

KUALA LUMPUR: Maybank Kim Eng Research has raised the financial year 2012-2014 earnings forecast of Pavilion Real Estate Investment Trust (Pavilion REIT)by eight to 8.4 per cent.

It also factored in a higher rental growth and turnover rent as well as higher occupancy rate.

Maybank Kim Eng in a research note today said Pavilion REIT's first half net profit of RM95.6 million was above the research house and consensus expectations at 55 to 56 per cent.

"This was due mainly to higher-than-expected retail turnover rent and rental hikes," it said.

Going forward, it said piling works of the Pavilion KL Mall extension will commence in the third quarter, whilst construction of the sub-urban mall in Subang Jaya is ahead of schedule.

"As for the Fahrenheit 88 mall, the management is monitoring the leases due for renewal in the third quarter, rental reversions and tenancy profile.

"When acquired, we expect these properties to raise Pavilion REIT's asset size by more than 41 per cent from RM3.6 billion currently," it added.

Maybank Kim Eng has maintained a "hold" call on Pavilion REIT but revised upward the target price to RM1.40 from RM1.26 previously.

By Bernama

Kwasa Land: No plans to partner Dijaya Corp

PETALING JAYA: Kwasa Land, a wholly-owned unit of the Employees Provident Fund (EPF) and master developer for the redevelopment of Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, has denied talk that it is partnering Dijaya Corp Bhd.

In a statement released yesterday, Kwasa Land stated that a newsreport titled "EPF and Dijaya may develop RRIM Land" published two days ago was unfounded.

The company reiterated that so far, it has not selected any property developers as partners for the RRIM re-development.

"We view such speculative stories with concern as there will be a clear process for developers to qualify as potential partners for this development," said Kwasa Land chief executive officer Mohd Lotfy Mohd Noh.

"We will announce our pre-qualification process shortly, inviting developers to submit their credentials for short-listing by the master developer," he added.

Kwasa Land was established in September 2010 to manage the EPF's multi-billion property development investments in the country.

The government has asked Kwasa Land to incorporate an integrated transportation system into Sungai Buloh, like that of KL Sentral, into the new township and link it via mass rapid transit MRT to the rest of Klang Valley.

By Business Times

Kenanga Research positive on IJM Land UK venture

KUALA LUMPUR: Kenanga Investment Research is positive on IJM Land Bhd's venture into the UK with a joint venture to build a five-star hotel, residential apartment, which will have a gross development value (GDV) of £280mil (RM1.4bil).

IJM Land had on Friday entered into a shareholders' agreement with Lite Bell Consolidated Sdn Bhd to form a joint venture company in Jersey -- Mintle Ltd -- to acquire a 999-year lease over a 2.7-acre site.

The working capital to be funded by the company to develop the property would be between £25mil and £30mil.

"We are positive on the venture as the group is now seeking new earnings growth avenues in overseas given its already high earnings base in Malaysia," it said.

Kenanga Research said the project would see mid- to high-end apartments with a guided average selling price of £1,000-£1,100 psf. It reckoned the guided GDV was still extremely conservative. It added land cost was fair, based on the gross margin guidance of 25%. "There are no issues with the financing of the project by IJM Land. We expect the group's net gearing to inch up to 0.1 times from a 4Q12 net cash position of 0.1 times, assuming a 70:30 debt-equity financing of the land and a £30m working capital," said the research house.

By The Star

ETP drives demand for luxury condominiums

Luxurious condominiums (as seen in the background) enhance the surrounding of Desa Sri Hartamas while pulling up the property prices in this neighbourhood.

The various initiatives announced under the Economic Transformation Programme (ETP) is said to be attracting investment opportunities into the country and in turn, boosting the demand for luxury condominiums in Malaysia.

Just ask Johor-based property developer BCB Bhd, which has seen good response for its luxury condominium development, Concerto Kiara @ Mont Kiara.

Tan: ‘We are also targeting those local buyers that have gone abroad.’

“We launched it in early July and about 80% of our first phase have already been snapped up,” group managing director Datuk Robert Tan Seng Leong tells StarBizweek.

Concerto Kiara is also sought for investment purposes.

According to him, Concerto Kiara @ Mont Kiara comprises 440 units of luxury condominiums with a gross development value of RM580mil and will be built in three phases. The first phase will comprise some 166 units.

“Currently, the first phase is still under construction and should be completed within the next three to four years,” said Tan, adding that the price of the units start from around RM630 per sq ft.

The size of the units range from 1,580 sq ft to around 1,900 sq ft.

“We are targeting both local and foreign buyers,” said Tan. He says some of local buyers were from as far as Johor.

“We are also targeting those local buyers that have gone abroad for a while and who are looking for that similar (overseas) lifestyle here in Malaysia. This group of people can afford our properties,” he says.

According to the Property Market Report 2012 by C.H. Williams Talhar & Wong, the demand for luxury condominium properties in the Klang Valley has continued to increase.

“The influential force that is creating demand for properties in the Klang Valley is the ETP initiated by the Government to transform Malaysia into a high income economy by the year 2020.

“Encouraged by the Government through liberalisation and tax incentives, more foreign companies are expected to invest in the country and consequently, increase the entry of more expatriates and demand for up-market residences.

“This will create demand for condominium properties especially in the up-market sector.”

The report went on to note that with these expectations, several developers have introduced newer designs and innovative concepts in their latest projects.

Meanwhile, asked if Concerto Kiara @ Mont Kiara is expensive, Tan says: “Many also buy it for investment purposes. They are worried that the price will escalate further in the future.”

He also says having luxury condominiums would be in line with the Government's Greater Kuala Lumpur/Klang Valley National Key Economic Area (NKEA) 2020.

According to reports, the Greater Kuala Lumpur/Klang Valley NKEA 2020 targets are to be in the top 20 most livable cities list and the top 20 in economic growth.

The goals under this NKEA are to be realised through the implementation of nine Entry Point Projects (EPPs) and the two business opportunities. These include improving the city's attractiveness to foreign multinational companies (MNCs) and foreign talent, putting in place an efficient public transport system and enhancing the ambience of the city by improving its physical environment through various initiatives.

Intensive efforts are ongoing to upgrade the water quality of Kuala Lumpur's main rivers and beautifying and developing its surroundings via the River of Life EPP, going green through the planting of more trees in the city, developing iconic places within the city and providing comfortable walkways for the pedestrians.

There are also plans to enhance solid waste management and sewerage services for the metropolis, as well as efforts to improve housing opportunities and to vitalise Putrajaya.

It is envisaged that initiatives under the Greater Kuala Lumpur/Klang Valley NKEA would contribute RM190bil in gross national income over the next 10 years and create over 300,000 jobs.

An analyst from a local bank-backed brokerage noted that the property sector was a “safer heaven” as far as investments are concerned.

“I foresee more foreign investors putting their money in our local property market, in light of the various initiatives announced by the Government to make Kuala Lumpur more vibrant and liveable.

“Also, Malaysian property prices are cheaper compared with other countries around the world,” she says, adding that she also expects to see more local investors taking their money out of the local stock market and putting it into the local property market.

According to C.H. Williams Talhar & Wong's Property Market Report 2012, there were 22,877 luxury condominiums and serviced apartment units in the Klang Valley as at end-2011. It noted that over 50% of the new developments completed last year were located within the Mont Kiara/Sri Hartamas area.

It said that the average occupancy rate for the condominium market remained stable at about 68%.

“Occupancy for condominium had declined to 69.5% from 70.3% in 2010, while serviced residences recorded a slight improvement of 67.1% from 66.8% in 2010.

“In addition, latest launches comprised smaller and more affordable unit sizes of 500 sq ft to 1,000 sq ft with selling prices ranging from RM850 per sq ft to RM2,000 per sq ft in the KLCC area, RM700 per sq ft to RM1,200 per sq ft in Mont Kiara/Sri Hartamas and Kenny Hills areas.”

In terms of outlook, the report states that luxury condominium developments will face a threat from the large incoming supply in the future.

“Developers are also marketing actively to foreign investors as the prices for luxury condominiums in Kuala Lumpur are still considered relatively cheap as compared with other countries such as Hong Kong and Singapore.

“In addition, the pro-active measures from the Government, efforts to promote the Malaysia My Second Home as well as the lifting of Foreign Investment Committee's approval in purchasing the properties by foreigners will boost the luxury condominium sector.”

The report added that occupancy rates and condominium rentals will be on a downtrend as new units enter the rental market at a faster rate than the slower projected demand from working expatriate professionals entering Malaysia.

“Buyers are still actively looking for condominium properties for investments in the KLCC and Mont Kiara areas but are now have more leeway for negotiation of prices.”

By The Star

Penthouses of St Mary Residences will be sold with the option of owning a Lamborghini

St Mary Residences is located in Jalan Tengah, off Jalan Sultan Ismail, Kuala Lumpur.

In what may well be the first time a developer collaborates with a car company in order to sell a property, both being big ticket items, the flavour of this partnership between Eastern & Oriental Bhd (E&O) and Lamborghini has an intoxicating whiff of big names, superb brands and luxury all coming together.

The partnership has several elements that are difficult to ignore. First, the aspect of consumerism today. It is a subject that can lead to many lessons in marketing, retail, advertising and promotion. Is opting for the branded the way to go? For many consumers, the answer is Yes because branding, more often than not, equates quality. So there is a price to be paid for quality.

Chan with a Lamborghihi Gallardo. He say the Lamborghini is a lifestyle purchase. Just like properties today.

On another aspect, if one were to stay focus and not be distracted by the gleaming wheels of the sports car, what is the way ahead for the high-end property market? Will other developers also co-brand in order to sell their properties?

In the property world, the E&O group is nothing less than innovation, luxury and lifestyle all rolled into one. It has always been the first to market.

Says E&O deputy managing director Eric Chan: “The direction the high end property sector will take depends on how the regional market responds to what we have in Kuala Lumpur. There is value here.”

The last decade or so, in many ways, the niche developer has been rather bold and innovative.

Consider the following. Before the Kuala Lumpur City Centre (KLCC) became the sought after location it is today although it is beyond the reach of a majority of the Malaysian population E&O came up with Dua Residency, the first luxurious condominium development with built-ups of more than 2,000 sq ft and beyond. At a time when few have seen or experienced such luxury, except for high net worth individuals, Dua was sold starting from RM500 to RM600 per sq ft. Today, those units average about RM900 per sq ft.

A couple of years after that in 2006/07, nearly every developer who had the resources tried to enter that KLCC market.

In June 2009, months after the 2008 global financial crisis, E&O boldly launched St Mary Residences, at Jalan Tengah, off Jalan Sultan Ismail, Kuala Lumpur.

It was the first developer to launch anything after the September 2008 fall of Lehman Brothers. Unlike Dua Residency where units were predominantly more than 2,000sq ft and above, the developer changed strategies in 2009 by offering quite a number of one-bedroom units of about 1,000sq ft.

Hungary for launches, its introduction of St Mary Residences saw a strong 80% take-up rate after just a five-day preview, at an average price of about RM900 per sq ft. St Mary Residences is located on four acres of former church land. Three blocks were built. Two blocks were sold and one named E&O Residences. These 200-unit block was “given” to the Synod of the Diocese of West Malaysia in exchange for the land. Besides the serviced apartment block, the church also negotiated for the building of a school in Selayang.

E&O will be operating and managing E&O Residences for 15 years, with the option to extend for another five. It will offer luxury short-term stays. Thus far, all the units in the two remaining blocks have been sold with the exception of three super penthouse units. Next week, purchasers who bought into the development will be getting their keys.

Here is where the co-branding comes in. The three penthouses, with a built-up of about 7,000sq ft, are priced between RM10mil and RM12.18mil. They are being sold with the option for purchasers to own a Lamborghini Gallardo.

Lamborghini Kuala Lumpur chief operating officer Marcus Chye says there are about 200 units of Lamborghini in Malaysia, but there are only 20 Gallardo models. Thirteen have been sold, and three have been put aside for this special partnership with E&O.

Those familiar with the luxurious car market says the Lamborghini is at the top end of the sports car range with aspiring new entrants buying a Lotus which costs about RM500,000 before moving on to a Porsche, then a Ferrari, if they are die-hard collectors.

But why a Lamborghini and not a Bentley or a Rolls Royce?

Says Chye: “The best goes with the best.”

The Bentley and the Rolls Royce are business cars, says Chye. “You go to meetings, dinners and to the office with a Bentley or a Rolls Royce. The Lamborghini is for the weekend.”

Unlike the perception of many that the Lamborghini owner belongs to the 30-to-40-something age group, Chye begs to differ.

Some clients are older and wiser, he says.

Which thus solves the question of who will buy E&O's super penthouses priced between RM10mil and RM12mil. Purchasers cannot contra the price of the property with the price of the car.

Says Chan: “They will get the car at a very special rate.”

Both Chan and Chye are of the view that when it comes to super brands and premium luxury the likes of E&O and Lamborghini, there is “no question of a discount.”

Says Chye: “The Lamborghini is a lifestyle. Just like properties today.”

By The Star

EPF and Dijaya may develop RRIM land

PETALING JAYA: The Employees Provident Fund (EPF) and Dijaya Corp Bhd are presently in talks to jointly develop certain parcels of the Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, as well as to build an access road, according to a source.

Currently, the RRIM land that begins from the Sungai Buloh My Rapid Transit Depot in the north and ends with its southern portion bordering the Tropicana Golf & Country Resort, belongs to Dijaya.

The source said that the EPF would need an access road connecting the RRIM land to Petaling Jaya, and that access road would have to cut across the Tropicana Golf resort.

“Dijaya will probably need to relocate a small part of its golf course to make way for this access road. At the same time, the EPF has also invited Dijaya to jointly develop certain parcels of the RRIM land. While no concrete details have been decided, both parties have expressed their intention to work together,” it said.

The source added that the EPF wanted to start developing the RRIM land from the south, as it would make more commercial sense.

“By developing from the Tropicana side, it will also be easier for the EPF, as it is empty lots on that side, and hence being less complicated to develop.

“The mid-portion of the RRIM land is already developed and needs to be teared down and redone. Furthermore, land beside the Tropicana Golf Resort will also fetch better pricing for now,” it said.

When contacted, a spokesperson for the EPF said this market talk was not true.

Currently Dijaya is also in the midst of an amalgamation deal where in April it entered into agreements with several vendors for a proposed acquisition of 73 properties, comprising 49 parcels of land and 16 buildings, for RM949.9mil.

Meanwhile, it is understood that Kwasa Land Sdn Bhd, which is the EPF's wholly-owned unit, will be calling for bids for the RRIM land in Sungai Buloh by year-end. Kwasa Land is the master planner for the RRIM development.

Pre-qualification bids will be opened to developers who meet the requirements, which will include financial muscle, reputation and innovation, according to recent reports.

Kwasa Land is expected to divide out the RRIM land in portions of 20ha to 200ha each, which will be used to develop affordable residential and commercial properties.

The other parts of the RRIM land is to house the Malaysian Rubber Board hub (217ha) and the My Rapid Transit Sungai Buloh depot (72ha).

The redevelopment of the RRIM land is part of the greater Kuala Lumpur Strategic Development initiative and is a project under the 10th Malaysia Plan. The EPF is buying 890ha of the available 1,215ha RRIM agricultural land from the Federal Government for over RM2bil.

By The Star

IJM Land in UK venture

PETALING JAYA: IJM Land Bhd is venturing into the United Kingdom via a joint venture to build a five-star hotel and residential apartments that will have a gross development value (GDV) of £280mil (RM1.4bil).

The company told Bursa Malaysia yesterday it had entered into a shareholders' agreement with Lite Bell Consolidated Sdn Bhd to form a joint-venture company, Mintle Ltd, in Jersey to acquire a 999-year lease over a 2.7 acre site with detailed planning consent for about 650,000-sq-ft space.

The site is predominantly situated above the National Rail and DLR railway lines adjacent to the Royal Mint Street in central London.

Mintle also acquired one share of £1 each in dormant company RMS (England) Ltd for £1. RMS England and Mintle would undertake a mixed-use development on the property.

Network Rail Infrastructure Ltd is the freehold owner of the property and granted ZBV (RMS) Ltd an option to acquire the lease of the property.

The working capital to be funded by the company to develop the property would be between £25mil and £30mil.

“The joint venture is part of a strategic move by the group to expand its property development footprint beyond Malaysia and is in line with its long-term vision of being an internationally admired property developer,” it said.

IJM Land added that the current favourable exchange rate regime and the lack of funding opportunity for property developers in London due to the eurozone crisis provided a window of opportunity to venture into the mature and international central London property scene.

“The company's ability to attract a number of buyers from the Asian region, who are one of the biggest groups of property investors in London in recent times, also augurs well for the project,” it said.

IJM Land said the project, when completed, would have “excellent views of the popular London landmarks such as Tower of London, Tower Bridge, Royal Mint Court, St. Katharine's Docks and River Thames.”

It said the project, granted detailed planning consent in April 2012, comprised one block of 5-star hotel-cum-residential apartments and three blocks of residential apartments with a total gross built-up area of 650,000 sq ft.

“The gross development value of the project is expected to be around £280mil. The cost will be funded via a combination of borrowings and internal funds, the details of which have yet to be determined,” it said.

By The Star

IJM Land in joint venture with Lite Bell

KUALA LUMPUR: IJM Land Bhd has entered into a shareholders’ agreement with Lite Bell Consolidated Sdn Bhd to form a 51:49 joint venture, Mintle Ltd, to undertake a RM1.4 billion mixed-use development in London.

In a filing to Bursa Malaysia yesterday, IJM Land said Mintle will acquire 1.08 hectare above the national rail and DLR railway lines adjacent to the Royal Mint Street in Central London, for the project.

By Business Times

Excitement over landmark project

Lancaster House is a mansion at the affluent St James district in London. It is a landmark that has gained prominence in recent years after it was used as a location in the award-winning British movie The King's Speech.

The building has now become the British Business Embassy and an Olympics investment conference is being held there until the Games are over.

While the Olympic Park will see men and women in track suits, the British Prime Minister is hoping to see more people in business suits visiting Lancaster House.

There are good reasons the fact is that Britain is in the longest double-dip recession in 50 years and official figures released recently showed that the number of inward investment projects has fallen for the third year in a row.

An estimated 4,000 top businessmen are expected to watch the games and David Cameron is hoping they will take time off to do some business.

If the athletes are looking at gold medals, the PM is looking at £1bil in new deals.

He is well aware that the Olympics have bankrupted some host cities.

The Olympic Park is located in East London, regarded as the downside of London, and the naysayers have questioned whether the location could be transformed after the security fence of the Games comes down.

But of all the business deals that have been spoken about, the biggest eye opener is the £8bil development of the Battersea power station.

On the day that I arrived in London last Thursday, I switched on the television in my hotel room to watch Cameron talking about the Battersea project, Pink Floyd and Malaysia.

He had spoken about his trip to several countries including Malaysia on an investment tour and he singled out the importance of the development of Battersea which involved a consortium comprising SP Setia Bhd, Sime Darby Bhd and the Employees Provident Fund.

The same day, London Mayor Boris Johnson hailed the project, which he described as a regeneration scheme, where an estimated 16,470 homes would be built.

More importantly, new shops and businesses could create 33,000 jobs 13,000 permanent.

That is the sort of excitement Malaysia has created in London as the city has an unemployment rate of 8.9% but thanks to the Games, there was a 1.2% dip.

The Battersea power station is located on the south bank of the River Thames on a 15.82ha site and represents one of the last few opportunities for an important development in London.

An extension of the Northern Line tube network will see a ride of eight minutes from Westminster and 12 minutes from the City.

The Malaysian consortium, it is understood, managed to beat Chelsea Football Club owner Roman Abramovich to it for the site because the local non-governmental organisations were unhappy with his plans to set up a stadium there along with other mixed development.

Residents in the area feared that the prices of their properties would drop if a massive stadium was built, as it would result in horrendous traffic congestions.

The British press has given positive coverage to the Battersea project.

For the EPF contributors, a property investment project in London not in the other parts of England is a guarantee for getting investment returns.

There are many property buyers but little land or properties for sale because of the strict rules against high-rise buildings in London.

The reality is that land does not grow in London and it has proven to be recession-proof as far as properties are concerned because the City is an international hub.

Well, Cameron like the actor Colin Firth who portrayed King George VI in the movie delivered a fantastic speech to the listeners which comprised of investors and businessmen.

But Cameron will be judged by how many medals he can collect before his term is over. That's what counts finally.

By The Star

Chartis narrows it down to two buildings

CHARTIS Insurance Malaysia Bhd is said to be close to picking either Menara Worldwide or Cap Square Tower as its new corporate office in Kuala Lumpur.

Sources told Business Times that the two office towers fit the insurer's requirement - able to accommodate more than 3,000 employees and have the Multimedia Super Corridor (MSC) status.

It was learnt that Chartis needs close to 200,000 sq ft of office space to house all of its staff under one roof.

Menara Worldwide in Bukit Bintang is a 27-storey office block with a net lettable area of 250,000 sq ft.

The Grade A tower is owned by Worldwide Holdings, a subsidiary of the Selangor State Development Corp, and was completed in 2010.

Meanwhile, Cap Square Tower is a 41-storey office tower with a net lettable area 601,574 sq ft located directly opposite Chartis' existing office in Jalan Ampang.

Realtors said both office towers could fetch rental rates above RM6 per sq ft, which are negotiable in a long-term lease involving large space.

Property agencies in the city are already scrambling to tie the insurer to several office towers in the city, but remaining discreet since it involves a high-profile client.

Chartis is the global property-and-casualty insurance business of American International Group (AIG).

AIG received US$182 billion (RM570 billion) in government support at the height of the US financial crisis.

Top of the insurer's requirements is that its new office tower must have MSC status since its expanded operations will include those of American International Group Global Services Sdn Bhd (AIGGS), an information infrastructure service provider, and Chartis Technology and Operations Management (CTOM), a shared service centre for insurance and financial services and operations management.

Multimedia Development Corp website listed Menara Worldwide as a MSC status-building.

Cap Square Tower, according to its owner Europe-based Union Investment Real Estate (UIRE), was built to MSC specifications.

UIRE bought Cap Square Tower for RM440 million from by Bandar Raya Developments Bhd back in 2008.

Chief representative of AIG (Malaysia) Matt Harris, who is also chief executive officer of Chartis Malaysia Insurance Bhd, recently told Business Times that the insurer had reached full capacity at its current office and would need to move.

Wisma Chartis, its current head office in Jalan Ampang, Kuala Lumpur, now holds 540 workers.

The insurer also has a call centre and a back office team in Dang Wangi, Kuala Lumpur.

Currently, AIGGS has 300 staff operating in Cyberjaya and this is expected to more than double to 700 strong. CTOM, meanwhile, has 300 employees at Technology Park Malaysia in Bukit Jalil, which are expected to grow to 1,600 in future.

By Business Times

E&O plans RM1b projects

THREE MORE: Development of condominiums in KL, Johor and Penang

EASTERN & Oriental Bhd (E&O) will be launching three more condominium projects with a total gross development value of about RM1 billion, within the next six months.

The projects will include the first phases of its properties in Kuala Lumpur, Johor and Penang, said deputy managing director Eric Chan.

The Kuala Lumpur project is located on a half hectare land on Jalan Yap Kwan Seng, while the Johor one is the first part of the RM3 billion Medini Integrated Wellness Capital in Iskandar Malaysia.

The Penang project is the group's second tower for its Andamam at Quayside condominiums.

Chan told reporters this after a media briefing on its completed luxury lifestyle project, St Mary Residences, here yesterday.

St Mary Residences, developed in partnership with the Lion Group, comprises 457-unit luxury apartments, and the E&O Residences Kuala Lumpur, which is the group's first serviced apartment project in Kuala Lumpur. It also has a retail centre of over 34,400 sq ft, which is expected to be fully occupied by the end of this year.

Chan said, to date, half of the retail space had been taken up.

The apartment units, which include 16 penthouses and four super penthouses, were sold between RM1.5 million and RM12.18 million.

All the apartment units, said Chan, have been sold out while the penthouse units will be offered for sale soon.

He said in collaboration with Lamborghini KL, buyers of the su-per penthouses will be offered an option to purchase a limited edition Lamborghini priced at RM1.68 million.

Chan also said E&O for the next six months will provide information on the range of rentals, to owners of the units at St Mary Residences who will be getting their keys next week.

"We will assist them in getting their units rented out for free for the first six months and we will work with valuers and property agents on this," he said adding that the rental price will be between RM5.50 and RM8 per sq ft.

The smallest unit is a studio suite measuring 1,131 sq ft while the biggest is the penthouse unit with a size of 6,759 sq ft.

By Business Times

Hua Yang sees RM872m revenue from BUSI

IPOH: Property developer Hua Yang Bhd expects to generate a revenue of some RM872 million, which would keep them busy for the next 12 years at the 196ha site in the fast developing Bandar Universiti Seri Iskandar (BUSI).

BUSI, located at Perak Tengah district, about 30 minutes drive from here, was derived from educational institutions located in the area like Universiti Teknologi Petronas (UTP), Universiti Teknologi Mara (UiTM), Kolej Profesional Mara and others like Sekolah Menengah Teknik Seri Iskandar and National Youth Skills Training Centre.

The company has a landbank of 335.3ha, of which 110.4ha had been developed to a tune of RM200 million, while the ongoing project covers 12.4ha, which is worth RM48 million.

The latest project is the Pedestrian Mall, costing some RM12 million.

The project, which is adjacent to Tesco hypermar-ket, comprises 123 units of two- and three-storey buildings, each priced between RM598,800 and RM1.56 million.

"The retail shops at our new project site is built on a pedestrian concept," Hua Yang Perak branch manager Tony Ng said.

The ongoing new phases include Tropika double-storey terrace houses, Bandar Universiti Business Centre (BUBC) and double-storey shop offices. Other projects in the pipeline are double-storey Sierra Homes and single-storey Seri Idaman units.

The masterplan is to build an integrated lakeside township, complete with facilities, including commercial shoplots, hospitals, schools, educational centres, budget hotels, hawker centres and a clubhouse.

By Business Times

'Revamped' Oriental Village for Langkawi?

GEORGE TOWN: A revamped "Oriental Village" in Teluk Burau, with additional features like an events hall and a canopy walk, is likely to emerge as part of the Langkawi Development Authority's (Lada) efforts to boost tourism products in Langkawi.

Business Times has learnt that the existing Geopark Hotel Langkawi, which is sited in the grounds of the themed village, may also undergo a refurbishment and be turned into a boutique hotel.

"It is likely that Lada will incorporate some of the elements outlined by Syarikat Prasarana Negara Bhd in its business plan for the potential takeover of Oriental Village's operations," industry sources said.

Last year, Business Times reported that Prasarana was in talks with Lada for the proposed takeover in a bid to add value to Prasarana's cable car operations which were sited in the grounds of the Oriental Village on the resort island.

Prasarana yesterday confirmed Business Times' report on Wednesday that it had handed back the cable car operations to asset owner Lada after operating for ten years.

In a statement issued yesterday, Prasarana said the handover was formalised on Tuesday in Langkawi with Prasarana group managing director Datuk Shahril Mokhtar signing an agreement to sell off its shares in Panorama Langkawi to Lada Eco Tourism Sdn Bhd, a subsidiary of Lada to facilitate the change in ownership.

The firm was represented at the signing ceremony by its chief executive officer Tan Sri Khalid Ramli.

Prasarana was appointed by Lada to take over the operations of the Langkawi cable car services from Machinchang Skyways in November 2002, by bringing in its expertise to run the business.

A year later, Prasarana set up Panorama Langkawi as a special vehicle to manage the operations and business. The handover of the cable car services is reportedly valued at RM3 million.

"Through Panorama Langkawi, we have helped put the island and Langkawi Cable Car in particular on the world map.

"For that, I would like to congratulate my team at Prasarana and also to now my former staff at Panorama Langkawi," Shahril said in the statement.

He also expressed hope that Lada will continue Prasarana's good work and to build on the fact that the cable car services have become a tourism icon for the island.

By Business Times

Buy a penthouse and get a Lamborghini

Dream combination: What has a Lamborghini got to do with St Mary Residences? Eastern & Oriental Bhd (E&O) has come up with a novel option for a penthouse purchaser to own the sports car. Seen here are E&O deputy managing director Eric Chan (right) and Lamborghini KL chief operating officer Marcus Chye with the Lamborghini Gallardo at St Mary Residences.

Probably the first time such an offer is being made

Kuala Lumpur: Fancy a Lamborghini to go with your super penthouse?

In what could be the first time in the property industry, lifestyle developer Eastern & Oriental Bhd (E&O) has come up with the option for purchasers of its super penthouses at St Mary Residences Kuala Lumpur to own a Lamborghini Gallardo at a special price. The car costs about RM1.7mil.

E&O deputy managing director Eric Chan said this was made possible as a result of a co-branding partnership between the two companies.

“This is a market first, and another way E&O is setting benchmarks for luxury living in the city,” Chan told a press conference.

Lamborghini Kuala Lumpur chief operating officer Marcus Chye said: “The best goes with the best.”

There are only 200 units of Lamborghini in the country. On the Gallardo special edition, Chye said only 20 units were made for Malaysia. Thirteen have been sold and three out of the remaining seven have been reserved for St Mary buyers.

As for the other big-ticket item, the three remaining penthouses, with a built-up of 6,700sq ft, are priced between RM10mil and RM12.18mil each. There are 16 penthouses, but only four come with the “super” status. One of them was previously sold.

The three-block 28-storey development is located in the heart of the central business district in Jalan Tengah, off Jalan Sultan Ismail, and is about 10 minutes from the Kuala Lumpur City Centre area.

Two of the blocks, comprising 457 units, have all been sold except for the three super units.

The third block will be returned to the church Synod of the Diocese of West Malaysia, the previous owner of the 4.04 acre freehold land but E&O will manage the 200 units, known as E&O Residences Kuala Lumpur, for the church for 15 years, with an option to extend to another five years.

It will be the company's first serviced apartments in the city. It also owns Eastern & Oriental Hotel and Lone Pines, both in Penang.

Chan also introduced the E&O rental programme which was designed to help buyers and investors better realise their investment in St Mary Residences.

Chan said the programme would help buyers and investors to facilitate the sale or rental of their units by advising them on the rental and sub-sale rates.

He said purchasers might have an annual yield of between 5% and 7% depending on when they bought the units.

On its other projects, Chan said the company wasplanning to launch its Jalan Yap Kwan Seng development, several blocks of Penang properties and possibly Johor properties with a combined gross development value of about RM1bil in the next 12 months.

By The Star

UDA Land eyes RM2bil GDV

KUALA LUMPUR: UDA Land Sdn Bhd, a subsidiary of UDA Holdings, aims to achieve RM2bil in gross development value (GDV) from Phase 4 of the Suaindah development in Bandar Tun Hussein Onn by 2016.

Chief operating officer Mohmad Sallihhudin Barlin said the GDV would be derived from high-end properties planned to be built in the area, including bungalows, semi-detached houses, condominiums and commercials.

By Bernama

Amcorp Properties in joint venture to invest in real estatein London

Amcorp Properties' Lexham Gardens in London

PETALING JAYA: Amcorp Properties Bhd is the latest to venture into the London property market. The company announced that it had entered into a joint venture (JV) to acquire a freehold property in London via wholly owned subsidiary Old Burlington Ltd (OBL) with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd.

The company's investment portion would amount to a maximum of £23.75mil (RM117.6mil).

OBL, together with NL and HPL, formed a JV company to acquire the property from Standard Life Assurance Ltd for £85mil.

The JV company, Ten Acre (Mayfair) Ltd, plans to redevelop the property for residential use. A further £5mil will be considered for the conversion of the property for that purpose. In a filing with Bursa Malaysia, Amcorp Properties said Ten Acre's major shareholder was HPL, with a stake of 65%, while OBL and NL would respectively hold a 25% and 10% stake.

The property is located east of Mayfair, which boasts as a prestigious retail and residential area in London. “The property comprises a mid-terraced, Mayfair office building totalling 83,024 sq ft of commercial accommodation over basement, ground and eight upper floor levels. The ground and basement comprised restaurant and gallery tenants with office accommodation on the upper floors,” said Amcorp Properties.

Ten Acre intends to acquire and manage the property in two stages. The first of which is to secure a high quality residential led scheme. The second stage will see the development, marketing and sale of the completed units at the property.

OBL's £23.75mil investment will be funded via advances from Amcorp Properties. “Amcorp Properties intends to finance its portion of the capital contributions via internally generated funds of Amcorp Properties and its subsidiaries,” the company told Bursa.

The building was constructed in the 1930s, and was subsequently refurbished in the 1980s.

Kenanga Investment Bank head of research Chan Ken Yew said Malaysian companies were taking advantage of the weakness in the pound, coupled with the trough cycle in the London property cycle. “Additionally, London's common law is similar to our common law. Therefore, it is easier to adopt their law as compared with other countries,” he said.

In its note to Bursa, Amcorp Properties said it intended to continue the expansion of its property portfolio in central London, based on its profitability in the London property market in recent years.

In late 2010, Amcorp Properties had acquired a residential property with 10 self-contained apartments in Lexham Gardens, London via its unit Riverich Ltd for £7.3mil. The company said the rental from the property provided a sustainable recurring income. According to the company's website, the rental yield for the property is about 4%.

In a separate note, adding to the foray of local investments into the United Kingdom, Malaysian consortium consisting of SP Setia Bhd, Sime Darby Bhd and the Employees Provident Fund officials recently announced plans to develop the Battersea Power Station for £8bil.

Lembaga Tabung Haji was also said to be finalising its first commercial property acquisition in London, estimated at £165mil. The proposed acquisition is expected to be completed in September.

It is also noteworthy that Genting Malaysia Bhd is investing £120mil to develop a leisure and entertainment complex in Birmingham.

Chan added the return on investment for companies investing in the UK property market arena will bank on the economic situation. “If the economic situation is good, companies will find that it is time to harvest their investments. Now, it is time to sow them,” Chan said.

Trading of Amcorp Properties' shares on Bursa was halted from 9am to 10am following the announcement on Wednesday. The share closed 0.5 sen up to 50.5 sen at 5pm yesterday.

By The Star

Amcorp unit in pact to buy London property

KUALA LUMPUR: Amcorp Properties Bhd's wholly-owned subsidiary, Old Burlington Ltd, has entered into a shareholders' agreement with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd, to purchase a freehold property in London.

In a filing to Bursa Malaysia, Amcorp Properties said following the agreement, the maximum funding commitment to be made by Old Burlington is STG23.75 million (RM117.6 million) as its share.

"The three entities have agreed to form Ten Acre (Mayfair) Ltd, a joint-venture entity, whereby the agreed proportion of shares would be 10 per cent for NL Pollen, 65 per cent for HPL Mayfair and 25 per cent for Old Burlington.

"The property, located in central London, comprises a mid-terraced, Mayfair office building totalling 7713.18 square metres of commercial accommodation over basement, ground and eight upper floor levels," it said.

The group said the joint venture would allow it to foray into the larger property investment opportunities in prime central London, while expanding its property portfolio there.

On the source of funding, Amcorp Properties intends to finance its portion of the capital contributions internally and through its subsidiaries.

"The joint venture is expected to contribute positively to the future earnings and growth of Amcorp Properties," it added.

By Bernama

CapitaLand sees China home sales improving

SINGAPORE: CapitaLand Ltd sees residential sales in China improving for the rest of the year, helped by expectations of a turnaround in the world’s second-largest economy.

CapitaLand, about 40 per cent owned by Singapore state investor Temasek, said the number of homes it sold in China in the second quarter more than tripled to 812 units from the previous three months, boosted by a rebound in buyers’ sentiment.

“We’re seeing a lot of pent up demand and seeing a lot of people committed to buying properties now, having stayed away for the last one and a half years,” Jason Leow, CEO of CapitaLand’s China unit, told a briefing of media and analysts.

By Reuters

Irda plans more theme parks in Iskandar Malaysia

Latest attraction: (From left) Muhammad Zainal Ashikin, Tunku Datuk Ahmad Burhanuddin, Datuk Ismail Ibrahim and Datuk Mohd Nor Khalid at the briefing. — Bernama

JOHOR BARU: Iskandar Regional Development Authority (Irda) is looking at having more theme parks in Iskandar Malaysia.

Chief executive officer Datuk Ismail Ibrahim said the development of the new theme parks could be at other zones in Iskandar and not necessarily in Nusajaya.

“It will be better to have different theme parks to cater to different segments of visitors rather than just having one or two in our development,'' he said.

Ismail was speaking at a briefing on the RM115mil Puteri Harbour Indoor Theme Park@Nusajaya.

Nusajaya is one of the five flagship development zones in Iskandar's 2,217-sq-km region the others are JB City Centre, Eastern Gate Development Zone, Western Gate Development Zone and Senai-Kulai.

Also present at the event were the theme park operator Theme Attractions and Resorts Sdn Bhd (TAR) managing director and chief executive officer Tunku Datuk Ahmad Burhanuddin, chief development officer Muhammad Zainal Ashikin and famous cartoonist Datuk Mohd Nor Khalid, better known as Lat.

TAR is a wholly-owned subsidiary of Khazanah Nasional Bhd formed in June 2009 to develop, manage and operate theme parks and attractions in Malaysia.

“Florida in the United States is the best example where there is a collection of several theme parks attracting different sets of visitors,'' Ismail said.

He said while Legoland Malaysia Theme Park and Puteri Harbour Theme Park catered for children, it would be good to have a theme park that catered for adults.

Ismail said the existing and the new theme parks in Iskandar should offer a wholesome fun and entertainment for the whole family.

The RM750mil Legoland Malaysia is the first Legoland in Asia. Built on a 23ha site in Medini, Nusajaya, it is a joint venture between Merlin Entertainment Groups and Khazanah's 60%-owned Iskandar Investment Bhd.

Legoland Malaysia will open its doors to visitors on Sept 15 while Puteri Harbour Theme Park in November.

By The Star

Penang BN wants state govt to come clean on low, medium-cost housing

GEORGE TOWN: Penang Barisan Nasional wants the state government to reveal the facts and myths on low and low-medium cost houses constructed since 2008.

Its publicity bureau chief Tan Cheng Liang said the state government was diverting the Taman Manggis land sale issue and confusing the people.

She said Chief Minister Lim Guan Eng was explanation on the Taman Manggis land sale because he had made a blunder by saying the land was too small for housing development.

She said Penangites were still in doubt about the Taman Manggis land sale.

"He has not answered the questions raised on the issue until today," she said, here.

Barisan coordinators for the Batu Lancang, Sungai Puyu and Komtar state constituencies and Bayan Baru parliamentary seat on Thursday also joined hands to brush off Guan Eng's claim of Barisan not building low-cost houses when it was in power in Penang.

Guan Eng was quoted by Chinese newspapers as questioning why Barisan raised the issue on low-cost housing since it did not undertake the initiative when in power.

Batu Lancang Barisan constituency coordinator, Lee Boon Ten said the statement was incorrect because Barisan had constructed 35,761 units of low and low-medium cost houses from 1990 to 2008.

"During that period too, BN provided 4,615 units of low-cost flats under the rent-and-purchase scheme for needy families. It also approved 33,514 low-cost houses for construction in Penang from 2004 to 2008," he said.

Lee said Barisan, if returned to power in the general election, would be committed to building 20,000 units of low cost-flats and implementing the rent-and-buy scheme within a period of five years at a cost of RM1.5bil to alleviate low-cost housing woes in Penang.

He said according to the 2010 Auditor-General's Report, the Pakatan Rakyat government did not implement any new low-cost housing project between 2008 and 2010 despite receiving 152,702 applications.

By The Star

Aussie house prices enjoy surprise rise

SYDNEY: House prices in Australia's major cities recorded a surprise increase last quarter, the first in more than a year and perhaps an early sign that recent cuts in interest rates are stabilising demand in what has been a very subdued market.

Yesterday's figures from the government showed prices for established houses in the major cities rose 0.5% in the second quarter, beating forecasts of a 0.5% fall. The first quarter was also revised to show a slight 0.1% dip, compared with an initial 1.1% drop.

Prices were still down 2.1% on the same quarter of 2011, but that was the slowest pace of decline in more than a year. The index of house prices was also just 4.7% below the all-time peak hit in 2010, a far smaller drop than suffered in say the United States or Britain.

By Reuters

Real estate back in favour

Comeback: Interest in real estate has returned, as can be seen from the housing front in New York to Paris. Prime property in major cities has seen its strongest growth since 2010 in the second quarter. – Reuters

It’s in demand again with signs of US housing market bottoming out

LONDON: Treated by many as a pariah after the US subprime collapse triggered the 2007 global financial crisis, real estate is increasingly bouncing back with insurance, pension and sovereign wealth funds.

The evaporation of interest rates on high-quality government bonds is encouraging asset managers to look again at prime real estate properties and stocks, where they find returns far outshooting socalled “safe” sovereigns.

Sovereign wealth funds are a US$4 trillion business and pension funds cover more than US$30 trillion, so even a small shift could move billions away from lower-yielding and more volatile assets.

Top-of-the-crop commercial and residential properties from London to Bangkok are in demand and there are signs of a bottoming out in the US housing market, prompting major investors to buy foreclosed homes to rent.

A sign of increasing interest in the sector can be seen in real estate funds, which have attracted more fresh money than other sectors this year, according to fundtracker EPFR Global.

Andrew Economos, head of sovereign and institutional strategy for JP Morgan Asset Management in Asia, says sovereign wealth funds are particularly active.

“Sovereign wealth funds are looking for positive yields and they are finding anywhere between 5% and 7% in real estate. They are getting yield on purchase as well as capital appreciation,” he said.

“They are diversifying across real estate into commercial, trophy properties as well as REITs (real estate investment trusts),” he said. REITs are securities sold like a stock and which invest in real estate properties or mortgages.

In one of the most recent high-end deals, Norway's sovereign wealth fund teamed up last month with Italian insurance giant Assicurazioni Generali to manage prime office and retail properties worth 550 million euros in central Paris.

Norway's sovereign wealth fund NBIM, which holds assets worth about 3.6 trillion Norwegian crowns (US$598.93bil), plans to raise real estate assets to as much as 5% of its overall portfolio from 0.3% at the end of March.

China's US$482bil sovereign wealth fund Investment Corp said on Wednesday this was one of the sectors it was now focusing on.

One way that investors are tapping the real estate market is through stocks and real estate investment trusts, which offer substantially higher dividend yields than sovereigns in areas spanning from Europe and the United States to Japan.

Dividend yields for stocks listed on the MSCI real estate index for the eurozone reach nearly 7%, according to Thomson Reuters Data-Stream, which beats by far negative or near zero yields for government bonds in core countries Germany or France. This is also higher than other sought-after assets including corporate bonds, which offer an overall yield of 3.24% on the iBoxx index.

The MSCI real estate eurozone index is up 13.1% since the beginning of the year compared with 2% for the overall MSCI index for the region, Data-Stream shows.

Yields on prime commercial or real estate housing the actual property rather than stocks vary widely but analysts give estimates of an average 35% for the best property in Europe.

“Certainly the work that we have done on an advisory basis to clients in the past three to four months has highlighted the importance of property in their portfolios,” said Ken Adams, global strategist at Scottish Widows Investment Partnership.

That market is highly polarised, however, with anything less than outstanding properties offering long leases with financially sound tenants in sought-after areas being spurned by investors put off by recession and the euro debt crisis and prices for these more secondary assets falling.

Commercial real estate, which had widely collapsed in the wake of the subprime crisis, was competing with other high-yield assets such as emerging market bonds and must offer the safety of a high-quality bond with better yields to attract investors such as pension funds, said John Danes, property research director at UK fund manager Aberdeen Asset Management.

“The return has to be very financially secure, with long leases and if there is some kind of inflation link as well, all the better,” said Danes, adding that he had seen increased interest across sectors, from long-let retail and offices to British supermarkets, which he said offer financially solid tenants and yields of 4.55%.

In the birthplace of the subprime crisis, in the United States, a number of investors are focusing on the opportunities that have been created in housing.

Blackstone Group LP has spent more than US$300mil to purchase over 2,000 foreclosed homes to rent and bet on a recovery of the US housing market, the firm said in mid-July.

Although analysts forecast any growth in the US housing market would be sluggish and it could take 10 years or more to go back to 2006 peak levels, commercial housing had seen nine consecutive quarters of uninterrupted improvement with vacancies down and rents up, said Citi analyst Jeff Berenbaum.

“Yields are in the high 3% to low 4% range for the strongest properties,” he said.

“For a risky market like commercial housing that's pretty historically low but if you compare with treasury yields, it's still a pretty wide spread.”

On the housing front globally, prime property in major cities has seen its strongest growth since 2010 in the second quarter, with a 1.3% growth in the year to June, according to Knight Frank's prime global cities index, which tracks the top 5% of mainstream markets.

By Reuters

Pension fund raises stake in KLCC Property

Although KLCC Property has yet to provide further details on the REIT venture, analysts remained positive on the idea.

KUALA LUMPUR: The Employees Provident Fund (EPF) has been increasing its exposure in KLCC Property Holdings Bhd this month, where the pension fund has spent over RM10 million to buy more than two million shares in the property investment company.

While the net acquisition may not be significant, it may be a sign that EPF likes KLCC Property's idea on exploring the possibility of a real estate investment (REIT) structure as a move to further unlock value gains in the property market.

In a HwangDBS Vickers Research report, it explored two possible scenarios for a REIT structure (a pure retail REIT and a mixed REIT) where asset sale proceeds could touch RM4.8 billion and RM13.6 billion, respectively, based on cap rates of six per cent for retail, six to seven per cent for offices and eight per cents for hotels.

"While the timing remains uncertain, this is a positive step to help unlock value and allow non-corporate shareholders to benefit from REIT distribution's lower tax rates.

"We do not discount the possibility of the RCULS (redeemable convertible unsecured loan stocks) overhang being addressed as well.

"Petronas can convert RM714 million RCULS anytime as they are in the money (RM1.98 conversion price, 2014 mandatory conversion), raising its stake in KLCC Property to 66 per cent from 51 per cent," said the report.

By Business Times

AmMutual open to more REIT buys

KUALA LUMPUR: AmMutual, which is positive on the Asia-Pacific real estate investment trusts (REITs) market, is keeping its options open on buying more REITs in the region, but much will depend, among others, on the liberalisation of a country's REITs regulation.

Its chief investment officer for equities Andrew Wong said the company would buy properties for REITs investment in any country in the region where REITS regulations were liberal, adding that this was one of the important considerations in the REITs business.

Wong says AmMutual will focus on the Asia-Pacific market in the next 12 months.

AmMutual is the conventional unit trust brand that is managed by the AmBank Group.

Besides this, he said the company would also look into countries where the demand for property REITs exceeded its supply, as well as the liquidity requirement in terms of liquidity risk when it exits certain properties in the region.

He was speaking at a media briefing on investments in Asia-Pacific REITs.

Currently AmMutual, via its wholly managed property fund - AmAsia Pacific REITs - has property REITs, in Australia, Singapore, Japan, Thailand, Hong Kong and Malaysia, among other countries.

It is also looking to buy REITS in countries in the region where the economy is starting to thrive.

Wong said the company's exposure to Malaysian REITs at present was about 7% and that it would consider buying others if the price was right, noting that it was also eyeing the soon to be listed IGB REITs.

For the next 12 months, he said the focus would still be on the Asia-Pacific region.

On the type of Malaysia REITS, he said the company was comfortable and keen on retail REITs, neutral on office REITs, partly due to the over-supply situation and mindful on logistics because of the liquidity of its REITs universe.

For the liquidity level of the REITs stocks, he said the company's cut-off point was preferably those with a minimum RM1.5bil in market capitalisation.

AmAsia Pacific REITs has raked in total returns of 20.8% to date since its inception on July 18 last year.

The property REITs fund also has an annual average dividend yield of about 6% and is the only fund in Malaysia to solely invest in the Asia-Pacific REITs.

On the challenges of REITs, Wong said this would be closely linked to the state of the economy and foreign direct investments.

Apart from this, the demographics of a particular country, for example its immigration laws, are important as this would entice people and investments into the country.

By The Star