VALUE FOR MONEY ADDRESSES - Well established areas are the favourite picks of real estate experts

WHAT would you consider to be a value for money address in the Klang Valley?

When it comes to buying or investing in a property, everyone is familiar with the well-known mantra of “location, location, location". So when PropertyPlus rounded up a few real estate experts for their take on value-for-money addresses, it was no surprise that many of them chose wellestablished areas like Petaling Jaya. The agents, who picked Petaling Jaya as their value-for-money address, said residential or commercial properties in the area are considered good investments as properties here are constantly in demand.


For real estate agents, Petaling Jaya is considered an area worth buying, particularly for residential use.

Some agents pointed to upcoming growth areas like Kota Damansara and Sungai Buloh while others preferred prime upmarket locations such as Mont’Kiara and Damansara Heights.

Despite the much higher prices for properties there today, which can easily start from RM500 psf, the experts said those who had invested in these areas earlier, especially first-time owners, are enjoying lucrative returns.

An example cited was the 345-unit Mont’Kiara Aman, sited on a 5.8-acre freehold plot within the Mont’Kiara enclave. With a gross development value of over RM300 million, it was completed in end-2005. The sizes of the standard and penthouse units start from 1,668 to 4,300 sq ft respectively.

Steadfast Realty principal Lee Wai Kong said this project provides good value for both owners and investors. “Capital values here have appreciated between 25% and 40% and there is still room for growth.

Mont’Kiara has turned out to be a choice location for local residents and with amenities such as international schools, restaurants and shops nearby, there is a growing expatriate community, too,” he added.

Although residential properties were a more popular choice among those polled, some opted for commercial properties such as the leasehold shop offices at Dataran Sunway as well as the various upcoming purpose-built office buildings in Petaling Jaya such as 3 Two Square, Jaya 33, Jaya One, PJ8 and PJ Exchange.

Read on as the real estate principals share their choice locations with us.


Bel Air Properties’ Lakhbir Singh



Where: Mid Valley City

Why: It’s a good location to invest in because it provides complete urban living in a confined,
yet intensively active area. As productivity correlates closely with distance of workplace and home, some would want to enjoy the benefits of working and staying within the vicinity.

Besides its strategic location and its proximity to Kuala Lumpur and Petaling Jaya, Mid Valley provides a whole range of amenities, from hotels, shopping centres to entertainment outlets. The roads and public transport system, including the commuter station, at its doorstep provide extra convenience and accessibility. The proximity to Bangsar adds to the value and hype about it being a vibrant place of non-stop activity.


Mid Valley City provides complete ubran living in a confi ned, yet intensively active area

Both its commercial and residential properties will be good investments as growth is likely to be spurred with the completion of its other hotels and remaining office space.

Interest: None


Trenholme Properties’ Roger Teoh



Where: Petaling Jaya

Why: It’s an area worth buying, particularly for residential use. Being a well-established location with a large population, the properties here cater to all types of buyers with a wide range of homes, from affordable to high-end ones. It also has a good mix of residential properties, from compact homes, walk-up apartments, terraced home, semidees to bungalows.

One may still own a 1-storey terraced home for less than RM300,000 like those in Section 17. More expensive homes, such as terraced houses above RM500,000, are found in newer areas like Bandar Utama.

Apart from looking at the residential properties here, one can also opt to invest in the commercial properties in PJ, such as those in the well-known SS2 area.

PJ’s property prices are able to hold well and one can expect a capital appreciation of between 3% and 5% yearly.

Interest: Teoh lives and works in PJ. He has also sold properties here.


JT Properties’ James Tan



Where: Damansara Heights

Why: Apart from the lifestyle factor, Damansara Heights is the premium residential address in KL. It’s popular among the higher income locals as well as expatriates.

However, homes here are not cheap and one needs to fork out at least RM3 million for a secondary landed property.

Moreover, there is no more new land for development in this area. Scarcity will surely push property prices up. Those who bought properties here for their own use or for investment will surely benefit.

Interest: JT Properties has previously transacted some properties here.


Steadfast Realty principal Lee Wai Kong



Where: Mont’Kiara Aman and Marc Service Residence, KLCC

Why: These two projects are able to provide their owners and investors good values/returns. For instance, Mont’Kiara Aman owners are still enjoying capital appreciation as its values have gone up between 25% and 40%. For investors, the returns here are equally good, between 8% and 12%. With the abundance of amenities, including international schools, shops, restaurants, Mont’Kiara has, and continues to attract, a cosmopolitan community.


Marc Service Residence's strategic location in KL city centre makes it attractive to investors

For Marc Service Residence owners, the prices have doubled from RM600 to RM1,200 psf. It may even go up to RM1,400 psf very soon. Marc Service Residence’s strategic location in the Kuala Lumpur city centre has made it the focus of investor interest. Compared with similar properties with the same quality, design and finish in some countries in the region, properties here are still relatively inexpensive and there is still ample room for growth.

Interest: None


Pacific Alliance Realty’s Kayte Teh



Where: Sunway Damansara, Kota Damansara

Why: This commercial area has positioned itself as Kota Damansara’s vibrant and thriving commercial hub catering to the needs of the surrounding residential areas. It also has an interesting mix of new developments that are coming up in the vicinity such as hypermarts, The
Strand as well as the Giza speciality retail centre shop offices.

The commercial properties here make viable investments as they can record capital appreciation of about 100%. When it was launched more than three years ago, the units were going for RM700,000 to RM750,000.

Today, owners are asking about RM1.8 million for their 3-storey shop offices and en bloc rentals command between RM7,000 and RM8,500 for intermediate units.

Despite the leasehold status, demand for secondary units here is on the rise but not many owners are willing to sell. The developer launched the first phase units for less than RM1 million while standard units were priced at about RM1.2 million during the launch of the second phase.

Interest: None


Edmond Tan & Co’s Edmond Tan



Where: Valencia, Sungai Buloh

Why: This project has a good environment, is very exclusive and is definitely value for money. It also has a private nine-hole golf course, a club house, swimming pool as well as beautiful
landscaping.

When the developer launched it about five to six years ago, it was selling the bungalows for between RM1.2 million and RM1.5 million. Prices today have appreciated to more than RM2 million and it translates to an annual capital appreciation of about 20%.

Meanwhile, the rental yields here too are equivalent to those in Bangsar and Damansara Heights. A bungalow in Valencia can fetch rentals of between RM10,000 and RM12,000 monthly and first-time owners are enjoying annual rental yields of about 10%.

Interest: None


MIP Properties’ Alan Kuan



Where: Dataran Prima Condominium, Petaling Jaya

Why: This project is ideal for those who prefer condo living. The current average asking price is around RM215 psf. It also comes with large built-ups of between 1,037 and 3,160 sq ft.

Considering its location and freehold tenure, it’s a good buy and owners/investors have been
enjoying a capital appreciation of at least 20%. Rental returns are between 4% and 5% for basic units while those that are partially or fully furnished can command between 6% and 9%.

The two-year-old Dataran Prima comprises 394 units housed in two blocks and each unit comes with two parking bays. It is near various amenities such as the Rapid KL feeder bus station, Kelana Jaya LRT station, Aman Suria shop offices, Dataran Prima offices and Sunwaymas Commercial Centre.

Interest: MIP Properties has transacted some units here.


Richland Properties’ Selvam Durasamy



Where: Petaling Jaya

Why: PJ is fast growing as an alternative commercial address and people nowadays prefer to work near their homes. PJ is also well connected with various highways and is a wellintegrated lifestyle area for work and leisure.

In the past, there were not many commercial options here but today, more developers are offering office-cum-retail space, such as those at Jaya 33, Jaya One, PJ8, 3 Two Square and PJ Exchange.

With rental rates for office space in Kuala Lumpur’s city centre going up to RM10 psf, there is abundant demand for office space in PJ as average rental rates here are between RM4 and RM5 psf. Commercial properties here can provide average rental returns from RM2.50 to RM5 psf, which translates to an average rental yield of about 7% per annum.

As a further testament to its future prospects, real estate investment trust funds are constantly seeking commercial properties in the PJ vicinity to add to their existing portfolio.

Interest: None


By theSun - Property Plus (by Loo Pik Kwan)

Queensbay lure: CP Land project capitalises on strategic location

CP LAND has lined up for launch this year three residential and commercial property schemes with an estimated gross sales value of RM1.7bil for the Queensbay project that would further enhance its reputation as one of the most prestigious addresses in Penang.

Located on 73 acres freehold site in the south-eastern corridor of the island, the RM3bil Queensbay development comprises luxurious residential homes, shopoffices, signature office suites, corporate towers, serviced residences, business class hotels, a convention centre, a medical centre, marina, waterfront retail shops, and the largest and longest shopping mall in the northern region.

Tan showing the plans for one of the group's forthcoming projects.

“To continue developing high quality lifestyle properties for Queensbay, we are capitalising on its strategic location next to the sea, easy accessibility and matured surroundings for our new launches next year,” group executive chairman Datuk Tan Chew Piau says.

“The three schemes to be launched next year are the RM500mil Bay Villas, the RM200mil Queens Wharf, and a yet to be named RM1bil integrated commercial precinct, which are all sea-fronting properties. CP group is one of the handful developers on the island with landed and high rise residential and commercial properties fronting the sea,” Tan adds.

The Bay Villas comprises 86 units of three-storey waterfront and garden villas, while the RM200mil Queens Wharf is one iconic 10-storey building of 150 serviced apartments.

The Bay Villas to be launched in the next few months.

The Bay Villas linked units have built-up areas of between 4,000 and 5,000 sq ft.

“The units have designs and themes irresistible to those willing to spend on luxurious living.

“The units, with full sea view, are equipped with a roof top garden terrace, private waterfront garden, and a private infinity pool.

“The Bay Villas, scheduled for launching in the first quarter of 2008, will be priced between RM3.8mil and RM5mil,” he says.

Targeted for launch in the second quarter of 2008 is the Queensbay Wharf project.

The iconic building of 150 serviced apartments with facilities and concierge services, with built-up areas of 1,000 to 2,000 sq ft, has panoramic view of the sea, Penang Bridge, Pulau Jerejak, and Seberang Prai.

“There will also be retail and food and entertainment outlets at the ground floor,” he says.

The Bay Villas and the Queens Wharf projects are scheduled for completion respectively in 2010 and 2011.

To be launched in the third quarter of 2008 is the integrated commercial precinct that has yet to be named, Tan says.

The unnamed project is the single largest commercial development consisting of prominent retail outlets, a five-star business class hotel, equipped with a 2,000 capacity ballroom, four blocks of corporate towers and five blocks of super luxurious fully furnished serviced residences.

Surrounding this unique commercial development is a waterfront promenade with viewing decks.

“This business precinct, scheduled for completion in four years, will form Penang's new central business district on the island,” Tan says.

The group's high-end properties, launched for the Queensbay project, have so far been well received by Penangites, who have the reputation of holding tight to their wallets.

To date, CP Land has sold about 80% of the RM500mil residential and commercial properties launched since 2005.

Tan says that about 80% of the purchasers are local, from Penang and neighbouring states, while the remainder are sold to foreign buyers.

Tan says the group is getting more interests from Asian and European buyers who are making enquiries on the Queensbay properties.

“We are attracting attention, as our properties are far more competitively priced than properties of similar range in prime locations overseas.

The innovative designs and concepts of properties that were usually found in big metropolitan cities are mainly responsible for the strong sales of the Queensbay project, Tan says.

For example, the Bay Capital, one of our current ongoing projects, comprising 98 corporate suites with built-up areas of between 983 and 2,955 sq ft, are column-free, and designed with a stunning granite grand lobby and an inspiring triple volume ceiling height.

The units are equipped with en-suite private washrooms, private pantries, and are broadband ready.

The Bay Capital is also a Multimedia Super Corridor (MSC)-compliant building.

“Since its soft launch two months ago, the Bay Capital has sold about 60% of its properties, which are priced between RM350,000 and RM790,000,” he adds.

Another example is the Bay Avenue's three storey shop offices which have high-ceilings, larger built-up areas between 4,000 and 6,000 sq ft, and are equipped with elevators.

The ground floor is fronted by a landscaped boulevard, wide veranda and walkways, which is perfect for retail ventures.

Every unit comes with convenient common lift access and broadband connectivity.

The Bay Avenue three-storey shop offices launched some 18 months ago.

“The capital value of Bay Avenue has appreciated about 50% from RM940,000 some 18 months ago to about RM1.5mil recently, when one customer offered to buy a Bay Avenue unit for RM1.5mil,” he says.

Tan adds that many of Queensbay's investors have also bought other types of property launched by the group for the development.

“Besides buying our first launches in Queensbay, they also invested in other ranges of property planned for the new phases of the project,” he says.

On CP Land forthcoming projects in Kuala Lumpur, Tan says the group is now planning a mixed-development project on a prime seven-acre site in the city.

“We are in the advanced stages of finalising the details of the project, which will be implemented in the first quarter of 2008,” he says.

Meanwhile, Henry Butcher (M) director Dr Teoh Poh Huat says the value of properties in Queensbay and the surrounding neighbourhood has appreciated between 20% and 30% over the past two to three years.

Teoh says the Queensbay residential projects owed much of its success to the Queensbay shopping mall and the surrounding retail outlets and offices developed by CP Land.

“Nowadays the trend is to look for residential properties that are close to the comforts of modern lifestyle living such as shopping amenities, entertainment centres, and food and beverage outlets,” he adds.

CP group is planning an expansion exercise to add 400,000 sq ft of lettable floor area in view of the growing demand for retail space.

The expansion exercise is expected to be implemented in 2009 and scheduled be completed in 2010.

“The proximity of the Queensbay project to the Free Industrial Zone (FIZ) is also one of its selling points.

“The FIZ has created a category of middle and upper income group with the purchasing power to buy luxurious lifestyle projects in Queensbay,” Teoh says.

By The Star (by David Tan)

1 Shamelin goes into unchartered territory - Shopping mall banks on young entrepreneurs

"The concept is highly successful overseas ... it has even been known to become a tourist attraction."



IN A town that is buzzing with new malls, 1 Shamelin shopping mall hopes to stand out from the rest as it goes into unchartered territory.

The mall will not have an anchor tenant but a whole lot of young entrepreneurs.

"The concept is highly successful overseas, it has even been known to become a tourist attraction, because tourists don't come to see big brands ... they come to feel the local culture," Y & Y Group business development director Kenny Yong Yoke Leong told Business Times recently.

1 Shamelin is being developed by Lambang Ehsan Sdn Bhd, a subsidiary of Y & Y Group.

Yong said it will be tough to find a big brand in the mall as there has been a concerted effort to make sure that young entrepreneurs make up the majority of the brands there.

Besides having retail lots that are relatively small, at 108 sq feet, a rule has also been imposed that no retailer can own more than two lots.

"We are catering to a public that 10 to 15 years from now will no longer feel comfortable to frequent night markets," Yong said.

He said the fact that they are also selling retail space, besides leasing it, is a major pull for start-up businesses wanting to set up a shop in a mall.

Retail lots for sale are going at RM128,000 and above while, monthly rental for standard lots (ranging from 108 to 445 sq ft) are expected to be around RM1,200.

1 Shamelin has allocated some 25 per cent of its 800,000-sq-ft retail space for sale to young entrepreneurs and investors.

He said the group has approached small businesses in flea markets and shopping mall kiosks, as part of its marketing strategy.

The mall is modelled after shopping destinations such as Singapore's Bugis Junction and Bangkok's Platinum Fashion Mall.

"Right now it's relatively impossible for young entrepreneurs to set up a shop in a mall because of the expensive rental and the track record that they inevitably ask for," he said.

The company is investing RM200 million in the mall and expects to recoup its investment in two to three years.

This is the first time that the Y & Y group has ventured into the mall business.

Yong said should One Shamelin prove successful, the group has earmarked a plot of land it owns opposite the Putra World Trade Centre in Kuala Lumpur to develop another similar kind of mall.

"Our main challenge right now would be to educate the market, make them understand the concept and see its uniqueness," Yong said.

1 Shamelin is located in Taman Shamelin Perkasa, Cheras.

By New Straits Times - Business Times (by Presenna Nambiar)

Mah Sing expands presence in IDR

Mah Sing Group Bhd has purchased prime freehold land in the southern tip of the Iskandar Development Region (IDR) in Johor totalling about 60.21 acres for RM21 million from several vendors. The land is less than 2km from the group’s ongoing development Sri Pulai Perdana in Skudai.


A bungalow unit in Sri Pulai Perdana 1

The land will be developed into Sri Pulai Perdana 2, with gross development value of about RM157.8million. The group has two other on-going projects in Johor, namely Austin Perdana (Tebrau) and Sierra Perdana (Tebrau-Plentong).

Mah Sing’s group managing director Datuk Seri Leong Hoy Kum said in a statement yesterday, “Johor has the second largest property market in Malaysia with 12% of property transactions in 2006, and the second largest housing demand under the Ninth Malaysia Plan. Strong economic and population growth expected under the IDR should spur demand for housing in the area. We see a lot of upside not only because we can ride on our premium branding, unblemished track record and good locations, but also because the IDR and Singapore’s two integrated resorts will spur the economy further.”

Sri Pulai Perdana 2 will front the Johor Baru-Pontian main road. It is close to Pulai Springs Golf and Country Resort, 10 minutes from UTM Technovation Park, Universiti Teknologi Malaysia and Johor Technology Park. “Residents enjoy proximity to shopping centres and hypermarts. The development also enjoys a ready catchment population from nearby housing developments, including Taman Impian Emas, Taman Universiti and Mutiara Rini,” Leong said.

The development is served by a comprehensive network of major roads and expressways, including the Skudai Highway and North-South Expressway. The Sultan Ismail International Airport is only 20 minutes away while the Causeway to Singapore is 30 minutes away. “The upcoming interchange from the Second Link Expressway is close by. This is especially important with the development of two integrated resorts in Singapore, which will be a catalyst for economic growth and which will spur housing demand,” Leong added.

“At Sri Pulai Perdana 2, we will offer interesting concepts, excellent quality, grand entrances, extensive landscaping and gated and guarded community living within an accessible mid-range price bracket, which has proven to be successful in Johor,” he said.

Sri Pulai Perdana 2 will closely follow the tried and tested Garden Park Living theme of Sri Pulai Perdana. Following customer feedback from Sri Pulai Perdana, the new development will comprise bigger units, namely linked semi-detached homes and superlink homes as well as 2-storey shop offices.

Prior to this land purchase, the group’s projects in the Klang Valley, Johor Baru and Penang contributed 37%, 21% and 42% respectively to its revenue. The purchase has evened out the contribution to 35%, 25% and 40% respectively and the group aims to maintain a 50:30:20 ratio as these three locations are Malaysia’s property hot spots.

According to Leong, the group’s expansion strategy is to acquire choice landbank in multiple prime locations in the Klang Valley, Penang and Johor Baru for its commercial and residential (Legenda, Residence and Perdana) series, which target different segments of the medium to highend property market.

The group will continue to focus on the lifestyle medium to high-end residential market and
commercial segment which has given it very good results.

With this new project, the group now has 15 projects with GDV of RM3.199 billion — 10 in the Klang Valley, one in Penang island and four in Johor Baru. The group has unbilled sales of RM1.077 billion, representing a total GDV of RM4.276 billion, which will ensure earnings visibility for seven years.

By theSun

SP Setia signs deal for Vietnam project

S P Setia Bhd (S P Setia), through its wholly-owned subsidiary Setia Saigon East Ltd (SSEL), has formalised a cooperation agreement with Saigon Hi-Tech Park Development Company (SHTP Co) to jointly design and develop a mixed real estate development project on 79 acres of land in Ho Chi Minh City (HCMC), Vietnam.

The developer said in a statement yesterday the project caters principally to the expatriate and senior managements of multinational corporations operating in the Saigon Hi-Tech Park (SHTP).


Pham Dac Vinh (left), director of SHTP Co, exchanging documents with Liew

The land is located in District 9, a suburban area of HCMC, about 1km from the SHTP. It is modelled after the technical economic zone concept to attract foreign investment and mobilise domestic high-technology resources.

Since 2003, the park has attracted many hightech names such as Jabil Circuit, Nidec, Sonion and the Intel Group, which has committed over US$1 billion (about RM3.3 billion) in investments. The presence of these multinational firms is expected to create a growing pool of expatriates and local managers and spur demand for good-quality properties in
the vicinity.

“Fresh from securing the investment certificate for our first Vietnam project, EcoLakes, in the industrialised province of Binh Duong, near HCMC, two months ago, we have inked this deal to embark on yet another project in Vietnam.

“This underscores S P Setia’s commitment towards expanding its presence in Vietnam, which is widely hailed as one of the most promising emerging real estate markets in Asia today,” said Tan Sri Liew Kee Sin, S P Setia chief executive officer and group managing director.

Liew added that the latest move was in line with S P Setia’s strategy to export its proven real estate expertise to regional markets with bright economic prospects.

Under the terms of the cooperation agreement, SSEL and SHTP Co will work towards fulfilling the conditions over a 12-month period, after which a jointventure company (JV Co) will be formed within three months to undertake the proposed development. S P Setia, through SSEL and another wholly-owned subsidiary, Setia D-Nine Ltd, will collectively own 67% of the JV Co while SHTP Co will hold the balance of 29%, with the remaining 4% owned by the staff company of SHTP Co.

By theSun

SPNB successfully rehabilitates abandoned projects

Syarikat Perumahan Negara Bhd (SPNB) has successfully completed an abandoned project in Taman Kantan Permai, Kajang, which was awarded the certificate of fitness (CF) on Dec 19, last year.


Before and after: The rehabilitation project in Kajang undertaken by SPNB

“Some 792 houses were completed, and they consist of 621 low-cost double-storey terraced houses and 171 medium-cost terraced houses,” said Datuk Mohd Amin Mohd Salleh, managing director of SPNB.

The project, which has a total gross development value (GDV) of RM38 million, was previously developed by Rajo Sdn Bhd in 1990. According to Mohd Amin, the project was abandoned in 1992 due to “mismanagement and financial problems”. SPNB then took over in April 2005.

The low and medium-cost homes take up 101.53 leasehold acres and are fully sold out, said Mohd Amin. The former is priced at RM25,000 and sized at 646 sq ft while the latter, priced between RM39,060 and RM92,000, ranged from 876 to 1,033 sq ft.

According to Mohd Amin, a total of 16 projects comprising 7,548 homes funded by the government have been completed nationwide under the SPNB rehabilitation project. Meanwhile, a total of 54 projects comprising 13,245 homes were completed with the consultation of SPNB.

“Currently, SPNB is rehabilitating six more projects involving 2,737 houses for the whole of Malaysia. They are targeted to be completed by March 2009,” he said, adding that the projects were also undertaken with the cooperation of the Housing and Local Government Ministry.

By theSun (by Yeong Ee-Wah)

Competition with new entrants

Besides rising costs, the challenge for local developers is to compete with new entrants who are likely to have considerable resources and experience, says Bandar Raya Developments CEO Datuk Jagan Sabapathy.

DATUK JAGAN SABAPATHY
CEO
Bandar Raya Developments Bhd
(BRDB)

Your outlook for the property market next year?

The outlook for the property market, specifically at the high-end, is bullish, and this can be attributed to the recent easing of rules by the Government on foreigners owning residential properties.

The abolishment of real property gains tax, active promotion of Malaysia My Second Home (MM2H) programme, attractive valuations and rental yields viz-a-viz our regional peers have led to strong interest from foreign buyers.

The prospect of a stronger ringgit that may lead to an asset reflation benefits prime residential and commercial properties. The multiplier effect from the implementation of Ninth Malaysia Plan projects, especially for the Johor and Penang property markets, also bodes well for industry players next year.

Strong gross domestic product growth, coupled with an expected increase in liquidity due to lower interest rates and stock market wealth, will positively impact purchasing power of domestic consumers.

What are some of the opportunities and challenges for industry players going forward?

Some of the key opportunities and challenges will surface from the relentless pace of globalisation. Private FDI is now predicted to expand by 10.5% next year. These factors are driving investor confidence.

International developer interest in the city is intensifying with many desirable and attractive residential and commercial projects coming up. The challenge would be for local developers who will now have to compete with these new entrants who are likely to have considerable financial, technical and marketing resources, expertise and experience.

Conversely, globalisation and the robust regional property markets also offer great opportunities for innovative developers to compete in the international arena.

Expanding their presence in the global market will spur greater earnings growth for developers and give them an opportunity to break out of their comfort zone and in the process, shore up their credibility as international property players.

BRDB has already embarked on a highly successful integrated development project in Lahore, Pakistan and is currently evaluating opportunities in the emerging economies of the Indian sub-continent, the Middle East and South-East Asia.

Which property sector and development types offer the best potential for your company?

As a market leader and one of the top developers in Malaysia, we continue not only to strive for quality to meet the increasing expectations of our purchasers, but also to invent iconic and innovative development concepts. At BRDB, we strive to create developments that are the first of their kind in the market, which differentiates us increasingly ahead of our competitors.

Again, with globalisation and the introduction of the MM2H programme, we are taking advantage of opportunities to market BRDB to foreign buyers (with about half the purchasers of our signature project, The Troika, being foreigners).

We now have a very strong footing in the high-end local residential sector, but we are also diversifying our developments into other sectors, ranging from premium offices to retail malls, as well as growing our recurring income business via leasing and asset management.

What are the challenges and prevailing issues being faced by the industry and what is the possible impact on your company?

The rising cost of oil, steel and labour will impact costs. Additionally, with so much choice available in the market, buyers are increasingly demanding the very best in product offering, quality and service standards. These will lead to rising cost of delivery, which will inevitably be passed on to the consumer.

The possible impact on BRDB:

·We have built a strong brand over the past 43 years. In that time, BRDB has demonstrated resilience and creativity in delivering quality living to our customers. We will continue to translate these innovative ideas into quality homes to stay ahead of the competition.

·This is where we need to be aware of the increasingly sophisticated demands of our purchasers. BRDB has always been committed to enhancing the quality of life of our homeowners. Careful thought and planning goes into ensuring all needs and comforts are readily available for the discerning purchaser.

What are some of the interesting property launches that can be expected from your company in coming months?

We will be launching three new developments in the Klang Valley in 2008:

CapSquare Residences II – An integrated commercial, retail and residential enclave, the second 32-storey tower features 176 units of Manhattan inspired condominiums and is expected to be launched in the second quarter of 2008.

Bangsar – This luxurious condominium development in Bukit Bandaraya is divided into eight blocks of low- and high-rise residences featuring open private lobbies with outstanding views of KL and Damansara.

Taman Duta – These condominium residences embrace a natural valley in the middle of a tropical forest. Surrounded by breathtaking views of the Kuala Lumpur City Centre and the lush greenery of Kenny Hills, this low-density development marries the beauty of the natural landscape with the luxuries of modern living.

We will also be rejuvenating our presence in Permas Jaya, Johor with a series of launches aimed at introducing an exclusive lifestyle living concept to this integrated township.

What is your expectation on project take-up rate, sales revenue and earnings for the company next year?

We expect the high-end and niche market to continue flourishing as the demand-supply situation is more favourable. BRDB has a very strong brand and unblemished track record in delivering quality homes to satisfied purchasers.

Our enthusiasm results from the fact that our launches next year are in very much sought after locations.

Based on our previous experience and current high demand for such properties, we anticipate a good take-up rate.

With the favourable market conditions, maturing projects and new launches, BRDB expects strong earnings growth next year.

By The Star - 2008 CEO OUTLOOK

Discount for Kepong Sentral condos

Vivien Lee in front of the Kepong Sentral Condominium

Proximity to commuter station is main selling point

KUALA LUMPUR: Mega Mall Development Sdn Bhd is offering a 10% discount for the second batch of the Kepong Sentral Condominium that it launched on Dec 15.

The 648-unit three-block condominium, completed late last year, represents the last phase of the leasehold Kepong Sentral development sited off Jalan Kepong.

Sales administration manager Vivien Lee said the second batch of the condominium project comprised 150 units.

“To date, 50 units from this batch have been taken up. Including the first batch, 50% of the 648 units have been sold,” she told StarBiz.

The main selling point of the project was the proximity of the KTM commuter station, located within walking distance, she said.

Besides the condominium phase, Lee said the development comprised two blocks of medium to low-cost apartments and two blocks of four-storey shop apartments, which had all been sold.

Priced from RM176,800 to RM250,800 with a maintenance fee of 16.5 sen per sq ft inclusive of sinking fund, the condominium units have built-up areas of 962 to 1,098 sq ft and each comes with a parking bay.

The units are also for rent. “We're renting the units directly and offering our services to owners who need help to rent,” Lee said, adding that the rates were reasonable considering that rentals in the area were between RM800 and RM1,000.

“Besides the discount incentive for the second batch, we're also offering prizes worth RM100,000 through a lucky draw for purchasers,” Lee said.

She also said the company was embarking on another project, called Sun Plaza, in Port Klang. It is a freehold development comprising shops, shop-offices and serviced apartments.

By The Star (by Fintan Ng)

Mah Sing to develop RM158million Johor project

Developer Mah Sing Group Bhd plans to build properties worth some RM157.8 million on a piece of land that it is buying in Johor.

Mah Sing is buying 24 hectares of land in Skudai, Johor, for RM21 million, it said in a statement.

The land is located near the Iskandar Development Region and is less than two kilometres away from its township, Sri Pulai Perdana.

Mah Sing will call the new township Sri Pulai Perdana 2.

"The group is confident of tapping on the success and branding of its three on-going projects namely Sri Pulai Perdana (Skudai), Austin Perdana (Tebrau) and Sierra Perdana (Tebrau-Plentong)," it said in a statement.

With this new project, the group currently has 15 projects with a total gross development value of RM3.2 billion.

By New Straits Times

SP Setia secures 2nd deal in Vietnam

Property developer SP Setia Bhd has clinched a deal to jointly build a 32ha mixed development project in Ho Chi Minh City which caters to expatriates and senior staff working in the Saigon Hi-Tech Park.


LIEW: The latest move is in line with its strategy to expand in regional markets with bright prospects

The project marks SP Setia's second venture in Vietnam, after it secured the investment certificate for its first project there, EcoLakes in the industrialised province of Binh Duong near the capital city two months ago.

"This underscores SP Setia's commitment towards expanding its presence in Vietnam, which is widely hailed as one of the most promising emerging real estate markets in Asia today," group chief executive officer Tan Sri Liew Kee Sin said in a press statement released in the Vietnamese capital.

He said the latest move is in line with its strategy to expand in regional markets with bright prospects.

The land is located in District 9, a suburban area some 1km from the park.

Since 2003, the park has attracted high-tech names such as Jabil Circuit, Nidec, Sonion and the Intel Group, which has committed to over US$1 billion (RM3.29 billion) in investments.

This will create a growing pool of expatriates and local managers that will demand good quality properties in the vicinity.

SP Setia, through its wholly-owned subsidiary Setia Saigon East Ltd has formalised a cooperation agreement with Saigon Hi-Tech Park Development Co to work on the project together.

A joint-venture company will be set up after a 12-month period. SP Setia will own 67 per cent of the joint venture and the Vietnamese firm 29 per cent. The rest will be owned by employees of the Vietnamese partner.

By New Straits Times

A sanctuary in Penang

PENANG: Prima Prai Group, a Penang-based property developer, has launched the latest phase of The Sanctuary, a luxury bungalow project on the eastern side of Penang, in Batu Uban.


The interior of one of The Sanctuary's show units

Phase 1B comprises 30 units of bungalows ranging from 4,200 sq ft to 6,200 sq ft in size, with prices for the units ranging from RM2.6 million to RM4.3 million. Construction is expected to start early next year.

Prima Prai Group recently entered into an agreement with Kuwait Finance House Bhd (KFH) for a RM74.7 million Mudharabah financing facility for the project.

Prima Prai’s managing director Datuk Mohd Ramzan Ibrahim said all units are designed by renowned Australian architect John Colliere to be spacious and bright, with a touch of modern architecture. The Sanctuary aims to be a tranquil and private retreat as its name suggests, he added.

The three design types in Phase 1B are Magnifique, Glamourette and Vogue. The Magnifique units feature a modern-classic design with a distinct pitched roof, while Glamourette offers a modern and tropical design with a variety of layout configurations.


The view from The Sanctuary

The Vogue units have a comtemporary design with stone-clad walls, distinctive curved roofs, tall ceilings and large, glass panels.

The Sanctuary is located within the Northern Corridor Economic Region, is minutes away from the Penang Bridge, Penang International Airport, Georgetown and is near ammenities such as international schools and shopping centres.

Mohd Ramzan said he is confident of a good take-up rate following the success of Phase 1. Comprising 21 bungalows and 11 semidees, Phase 1 is sold out, with as many as 40% of buyers coming from Taiwan, India and China.

Ramzan said other projects in the pipeline for the company include its flagship development, The Runnymede Centre, in Georgetown comprising super condos and a boutique hotel.

The 5.5-acre tract at the historic Runnymede site along Jalan Sultan Ahmad Shah (formerly Northam Road) is expected to be the most exclusive address in the state when launched in mid-2008.

Other projects to be launched next year include a serviced apartment project on 2.03ha in Penang and 103 units of 2 1/2-storey courtyard homes in Prai.

By theSun (by Tim Leonard)

Singapore Q4 growth shrinks versus Q3

More softness in exports expected in next couple of quarters

Singapore: The city-state's economy unexpectedly contracted for the first time in 4 & 1/2 years as factory output slowed, suggesting Asia's export-dependent markets may face increased risks from weaker global growth.


The republic's burgeoning construction industry prevented a wider contraction in the economy last quarter. - Bloomberg

Gross domestic product shrank an annualised 3.2% in the final quarter after adjusting for inflation, from a revised 4.4% expansion in the previous three-month period, the trade ministry said yesterday. Economists had expected a 3.1% gain.

"We definitely should expect to see more softness in exports in the next couple of quarters, and that's bad news for electronics-heavy Asian economies," said Kit Wei Zheng, an economist at Citigroup Inc in Singapore. "That means slower growth for Singapore and the rest of Asia."

Asia is twice as reliant on exports as the rest of the world, with 60% of overseas sales ultimately destined for the United States, Europe and Japan.

Singapore's manufacturing climbed 0.5% in the final three months of 2007 from a year earlier, the smallest increase in 18 quarters.

Output growth slowed from a revised 10.3% in the July-September period.

From a year earlier, the republic's economy grew 6% in the fourth quarter after gaining a revised 9% in the previous three months. Economists were expecting 7.7% growth.

The services industry climbed 8.3% from a year earlier, matching the growth rate of the previous three-month period.

Economists said demand for financial services probably eased as the rout in global credit markets increased risk aversion and the city-state's government implemented measures to cool the property market.

"Singapore's financial services industry has been affected by the shadow of the subprime problem," said Irvin Seah, an economist at DBS Group Holdings Ltd in Singapore. "Investors are more cautious and that has slowed down activity."

The republic's burgeoning construction industry prevented a wider contraction in the economy last quarter as companies such as Exxon Mobil Corp set up new plants and property developers built new office towers and condominiums.

Construction surged 24.4% from a year earlier, after a revised 19.2% gain in the three months ended September.

The economy advanced 7.5% in 2007, easing from a 7.9% rate of expansion the year before. The government expects growth to be between 4.5% and 6.5% in 2008.

By Bloomberg

UEM: Nusajaya poised to ‘come alive’ by 2011

KUALA LUMPUR: The Nusajaya regional city in Johor, boosted by a substantial population of 100,000 now, is on track to “come alive” with commercial activities by 2011 and further development via partnerships, said UEM Group.

UEM World Bhd’s subsidiary UEM Land Sdn Bhd’s chief executive officer Wan Abdullah Wan Ibrahim said the development in Nusajaya would be boosted by the completion of the Johor state administrative centre, which was due for occupation in the first quarter of 2008.

“By 2011, the ongoing developments (in Nusajaya) would be generating new demand and it will propel a step further, driven by its own energy,” he told The Edge Financial Daily recently.

“All these projects would take time to develop and we believe by 2011, would achieve its target of ‘coming alive’ so to speak,” Wan Abdullah said.

He said other development centres include those such as the industrial and logistics cluster, the industrial development for advance technology corporations, which the company began selling this year and its three residential developments.

According to reports, the residential projects in Nusajaya — Horizon Hills, Nusa Idaman and Puteri Harbour — have a gross development value (GDV) of RM4.55 billion. Horizon Hills has a GDV of RM2.6 billion, Nusa Idaman RM450 million and Residential North precinct of Puteri Harbour RM1.5 billion.

Wan Abdullah said Nusa Indaman, which comprise medium cost housing, had been completed.

“So by 2011, these types of properties would be at a mature stage and achieve its tipping point. And then there are other projects like the international resort that would house the theme park and medical city,” he added.

Meanwhile, Khazanah Nasional Bhd managing director Datuk Azman Mokhtar told The Edge Financial Daily that the Iskandar Development Region (IDR), which requires an investment of US$105 billion (RM351.75 billion) over a 20-year period, would see more activities beginning 2008.

He said: “2008 will be when we are clearing and building the roads (and) some of the new investments will be coming in the first half. There will be greater visibility.”

Azman said so far there were already three Gulf-based investors pumping in US$12 billion for land and basic infrastructure in the IDR.

“These investors are committed, they are the bluest of blue chips from the Gulf. We are also working on various other key catalyst developments, including a proposed theme park and investors from other key countries, including China and India,” he said.

Azman said there were progress in the development of the IDR region this year, particularly between the Malaysian and Singaporean governments in identifying mutually beneficial areas of development, which include the Smartcard, a common Custom Immigration and Quarantine (CIQ) and potential MRT and transportation links, among others.

Asked how close is the IDR to achieving the first three benefits, he said: “It is quite encouraging; considerable progress has been made in the last one year.”

By The EDGE MALAYSIA (by Tamimi Omar)

Genting Highlands Resort named world’s top casino resort

KUALA LUMPUR: Genting Highlands Resort defeated many a familiar name in the casino business to win the prestigious International Travel Award — The 2007 World Travel Award for the World’s Leading Casino Resort at the 14th Annual World Travel Awards Gala ceremony.

The local resort was nominated along with world renowned Ceasars Palace Las Vegas (USA), D’oreale Grande, Emperor Palace (South Africa), MGM Grand Hotel & Casino, Vegas (USA), Park Hyatt Mendoza (Argentina), Star City Hotel & Casino, Sydney (Australia) and The Venetian (Macau).

“We have always striven to provide the best products and services to our valued customers,” said Resorts World Bhd executive vice president Alan Teo who accepted the award on behalf of the group.

Held at the Beaches Turks & Caicos Resort & Spa on the Carribean island of Providenciales last month, the event was attended by 330 travel trade representitives from around the world.

The award, touted as the Oscar of the travel and tourism industry, acknowledges industry excellence, Resorts World said in a statement.

Genting Highlands Resorts emerged winner of the award after an industry poll of 167,000 travel agencies, tour and transport companies and tourism organisations in over 160 countries.

The resort, with it famous tagline “City of Entertainment”, has won a string of other awards, including the Hospitality Asia Platinum Awards 2007/2008, TTG Travel Awards 2007, Malaysia’s Most Valuable Brands 2007, Brand Laureate Award 2007, Malaysia Spa & Wellness Awards 2007 and FIABCI Malaysia Property Award 2007.

Resorts World said it is continously upgrading and introducing new attractions and services at the resort.

By The EDGE MALAYSIA (by Sharon Tan)

Builders cast wary eye on prices of building materials

KUALA LUMPUR: The abundance of 9MP and economic corridor projects will not distract the local construction industry players from casting a wary look on building material prices, partly due to the introduction this month of the hotly contested automated pricing mechanism (APM).

Industry observers are expecting steel and cement prices to spike in the wake of the APM, pinching the margins of construction players already burdened with rising fuel prices. Escalating building material prices will put a dent in margins of smaller players rather than the big boys, analysts said.

“On the ground, there is already word that prices will go up in January 2008. We hope the rumours on price increase are not true as any attempt to further increase the price of cement will definitely affect project costs.

“Inevitably, this will result in an upward revision of prices for new housing and property launches,” Real Estate and Housing Developers Association (Rehda) and Master Builders Associaton of Malaysia (MBAM) said in a joint statement recently.

“The supply of construction jobs is not a concern but we hope the pricing of raw materials can be resolved,” Putrajaya Perdana Bhd chief executive Wie Hock Kiong said.

“Smaller players will be affected, the bigger construction players are paying market prices,” said MBAM president Patrick Wong.

This rings true for players who have secured projects on an open tender basis that bring in lower margins. “Companies with a steady order book have more margins. Some of them are mitigating by variation of price clause in contracts,” Osk Research’s Kenny Goh said.

Unsurprisingly, steel and cement players have plenty to celebrate with burgeoning demand for these materials. Lafarge Malayan Cement Bhd, YTL Cement Bhd, Kinsteel Bhd and Ann Joo Resources Bhd will be the main beneficiaries, analysts said.

Also of concern is the shortage of manpower, particularly technically skilled staff in the construction sector, which is experiencing an outflow of local talent to the Middle East and other Asian countries, Wie said.

By The EDGE MALAYSIA (by Sharmila Ganapathy)

Muhibbah gets RM196m job in Syria

Construction group Muhibbah Engineering (M) Bhd clinched a RM196 million contract in Syria, its third job in the Middle East, and the company expects more to come.

The latest deal is to upgrade the existing passenger terminal building, road, car parks and parking apron at the Damascus International Airport.

"This is our third win in the Middle East. The region will be our biggest growth area going forward," Muhibbah group chief financial controller Shirleen Lee told Business Times in a telephone interview.

Muhibbah, which also builds ships and cranes, will bid for more jobs in the cash-rich Gulf countries.

"We are eyeing all types of infrastructure construction works in the cash-rich region. With the oil price surging, the respective governments are investing in infrastructure projects," she said.

Muhibbah is due to start work on the Syrian project immediately after signing the agreement with the government in the current quarter.

Lee said it will take Muhibbah a year to complete the project, which will be funded by Malaysia's Exim Bank.

She also said that the project will contribute positively to the group's earnings in the current financial year ending December 31 2008.

Muhibbah has orders worth RM4.7 billion now.

By New Straits Times - Business Times(by Sharen Kaur)

Official nod for Gamuda to develop Vietnam project

Gamuda Bhd has received an investment certificate that officially allows it to develop Vietnam's Yen So Park project, worth almost RM10 billion.

Its wholly-owned unit Gamuda Land Vietnam LLC was awarded the certificate from the Hanoi City People's Committee (HPC).

Gamuda will design and build a RM1.5 billion sewerage treatment plant, which will be the biggest in Vietnam.

The plant will cater to half of Hanoi's sewage needs. It will also develop Vietnam's largest public park. The plant and the park is due to be ready in 2010.

"Gamuda will also be developing a new urban centre and residential townships at the location, which are expected to generate a gross development value of RM8 billion over the next eight to 10 years," the company said in the statement.

According to Gamuda, construction works on the project has started after the ground-breaking ceremony held last month.

"The project is expected to start contributing strongly to the Gamuda group's earnings beginning from the financial year ending July 31 2008," the company said.

By New Straits Times

Putrajaya Holdings offers a resort garden

MORE than half of Putrajaya Holdings Sdn Bhd’s (Putrajaya Holdings) lakeside semidees and terraces (Precinct 18R1) have already been sold within two weeks of its launch last month.

An artist's impression of Precinct 18R1's semidees

“Precinct 18R1 is based on the ‘resort garden’ concept,” said Syed Farouk Azlan Syed Abdul Aziz, Putrajaya Holdings property services division head. Located approximately 4km away from Alamanda Shopping Mall in Putrajaya, the main selling point of these homes is their lakeside location.

“Putrajaya Lake is a man-made lake measuring 988.42 acres with 486.80 acres of wetland system to treat catchment water that flows into the lake,” said Syed Farouk, adding that the 36 units of semidees and 58 units of terraced homes have a gross development value (GDV) of RM63 million.

According to him, the majority of buyers are from Kuala Lumpur and Selangor, specifically from areas such as Ampang, Wangsa Maju, Gombak, Cheras, Damansara, Subang Jaya and Bangi.

“There are also foreigners from the UK, Qatar, Pakistan and Singapore, making up approximately 10% of purchasers. Among the purchasers are newly married couples, retirees, business owners, top-management officers and investors,” he added.

The 2 ½-storey semidees in Precinct 18R1 have land areas of between 2,700 sq ft and 5,000 sq ft, with built-ups from 3,300 sq ft to 3,500 sq ft. Prices are between RM788,818 and RM1,104,681.

Meanwhile, the 2 ½-storey terraced homes are sized between 1,550 sq ft and 4,500 sq ft, with built-ups from 2,400 sq ft to 3,000 sq ft. These homes are priced between RM420,018 and RM730,421.

“Precinct 18R1 is the first residential phase to be launched in Precinct 18, also known as the Core Island, which will comprise semidees, terraced homes, luxury condominiums and apartments upon completion in 2012,” said Syed Farouk, adding that the high-rise units, with views of the lake, would only come at a much later stage.

Precinct 18, which takes up 403.88 freehold acres, will be equipped with two neighbourhood commercial plots, five primary schools, two secondary schools, a monorail station, health centre, ferry terminal, recreational facilities, city service centre, mosque, police and fire stations, tadika, promenade and a pebble beach.

“In the first quarter of 2008, we will launch 98 units of semidees and 52 units of terraced homes in Precinct 18R5, as well as 91 units of zero-lot homes in Precinct 14, also known as Palladium.
We will also launch Precinct 8’s Luxury Twin Villas,” said Syed Farouk.

Putrajaya Holdings first launched its residential precincts in Putrajaya circa 1998 and 1999. To date, it has several precincts that have been completed and handed over, and almost completely sold out. Other notable projects by Putrajaya Holdings include government buildings in Precincts 1, 2, 3 and 4, the Putrajaya International Convention Centre, Alamanda Shopping Mall, Sri Garden International School, the Diplomatic Precinct, 26 Boulevard, the Prime Minister’s Residence and Putra Mosque.

By theSun (by Yeong Ee-Wah)

12 projects in IDR this year

Meeting the press: Abdul Ghani speaking to reporters during the press conference to deliver his New Year message at Bukit Timbalan in Johor Baru yesterday.

Nusajaya set to start ops by March

JOHOR BARU: Twelve mega projects totalling billions of ringgit are expected to kick off this year under the Iskandar Development Region (IDR), said Johor Mentri Besar Datuk Abdul Ghani Othman.

Among the projects scheduled for implementation are:

1. The RM4.2bil Node 1 project in Nusajaya;

2. RM1bil Eastern Dispersal Link (EDL);

3. The 15km, RM1bil coastal highway linking Johor Baru with Nusajaya;

4. RM900mil clean up of Sungai Skudai, Segget and Tebrau; and,

5. RM500mil MSC Cyber City project in Kulai.
   

“The new state administrative centre in Nusajaya, worth RM1.2bil, is also expected to start operations by March,” he told reporters at a press conference to deliver his New Year message.According to him, among the projects implemented in 2007 were the launch of the RM1.5bil Puteri Harbour and the RM7.8bil Tanjung Bin power plant.

The IDR project was launched in November 2006, but it has taken over a year for the details, including the support and incentive packages for investors, to be finalised.

Abdul Ghani dismissed concerns that a possible recession in the United States would negatively impact development projects in the region, saying that smaller countries would enjoy high growth rates.

“Besides the United States and Europe, everybody is optimistic about economic growth and we expect the world rate of growth to go beyond 6%, even in Africa,” he said.

He was confident the IDR would continue to attract large foreign and local investments in 2008.

He added that projects funded by West Asian investors would be situated in Node 1, about 30km from Johor Baru after the Second Link.The Abu Dhabi-based main developer, Alder Properties, will invest US$520mil (RM1.7bil) to develop a leisure zone, while Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, will invest US$330mil (RM1.08bil) to develop the culture cluster.

In addition, Abu Dhabi’s Millinium Development Company will invest US$325mil (RM1.07bil) for the development of the international financial zone.

Meanwhile, the state hopes to be almost squatter free by 2013 through a RM583mil relocation programme that will house around 8,000 squatters presently living within the IDR.

An estimated 2,932 people whose settlements had to make way for the construction of the EDL would be given alternative housing.

Abdul Ghani said RM300mil would be spent to relocate 2,700 squatters from Skudai Kiri and its neighbouring areas to flats near Sungai Melana, behind the Kipmart in Tampoi.

Another 2,450 squatters from Lumba Kuda and Bukit Chagar are expected to get the keys to their homes in Seri Stulang and Pasir Pelangi soon.

By The Star

Worries over price of cement - Builders say automatic price mechanism will raise costs

Master Builder: Cement should remain price-controlled

PETALING JAYA: Two bodies representing builders are worried that the automatic price mechanism (APM) for setting cement prices, due to take effect today, would further increase their cost burden and in turn affect new property launches.

The Real Estate and Housing Developers Association of Malaysia (Rehda) and Master Builders Association Malaysia (MBAM) said in joint statement that “any attempt to further increase the price of cement will definitely affect project costs. Inevitably, this will result in upward revision of prices of new housing and property launches.”

Deputy Prime Minister Datuk Seri Najib Tun Abdul Razak made the announcement on the automatic price mechanism (APM) earlier last year.

The two associations, whose members are the main end-users of cement, said the APM was not in the interest of the industry or property buyers. They called for the scrapping of the APM, saying cement prices should remain status quo.

“Cement is a major and essential component of the construction industry. The country's consumption of cement totalled 19.5 million tonnes in 2006 and it is expected to increase due to the planned developments under the Ninth Malaysia Plan,” MBAM president Patrick Wong said.

On the average, cement and cement-related products such as cement sand bricks, plasters, concrete roof tiles, reinforced concrete piles, concrete culverts, ready-mixed concrete, drainage, among others, comprise 50% of the materials used in a project.

The Government believes the introduction of the APM would give reasonable profit margin to encourage re-investment by cement manufacturers, because prices would automatically adjust to costs.

But Wong, and Rehda president Ng Seing Liong, said “with the APM, cement prices would be revised every four months. And, with regular review, the industry believes there is a high tendency that prices would be revised upwards instead of downwards.”

“Developers and contractors are disappointed that no prior consultation was made with the main players of the Malaysian property and construction industry, consisting of more than 2,000 developers and 60,000 contractors,” Wong said.

According to Wong, cement makers had asked the Government for an increase in prices to offset rises in their production costs and to match prices in the region.

He suggests that for the interim, cement should remain a price-controlled item to ensure that the rollout of infrastructure and housing projects, especially affordable homes, are not affected.

“In the long run, the Government should consider allowing free market forces to decide the price of cement. By opening up the market, market forces will find their own equilibrium and this would cause prices to be more stable,” Wong said.

Ng added that since the price control on cement would create market distortion, in the form of shortages, its import should be allowed.

“As it is, contractors and developers are paying RM10.90 per 50/kg bag effective Dec 1, 2006 when the price before adjustment was RM9.90 per 50/kg bag despite cement operators operating at 60% of capacity,” Ng said.

“Imports would ensure uninterrupted supply of cement. This would also encourage competition and greater efficiency among local cement manufacturers, instead of unhealthy and uncompetitive oligopoly,” he said.

By The Star (by Laalitha Hunt)