Asian property offers attractive returns

SINGAPORE: Asian property offers attractive returns even as the US housing market enters what may be a prolonged slump, Hong Kong-based Intellectual Property Global Ltd said.

US foreclosures rose 60 per cent in February after surging to a record in the fourth quarter of 2007, and that could worsen a decline that started last year, said Tim Murphy, managing director of IP Global, a real estate advisory firm. Assets in emerging markets such as Asia offer a safer bet, Murphy said last Thursday in an interview in Hong Kong.

"I think the majority of Asia sits very well," Murphy said. "Wage inflation is still pretty good and interest rates are not too scary."

Sales of existing homes in the US fell from a record annual pace of 7.08 million in 2005 to 5.65 million last year, according to Fannie Mae, the largest US mortgage buyer. Median home prices could extend declines as the number of unsold properties builds up and prospective buyers stay away.

"I think it's here to stay now," Murphy said of the US housing decline.

Vietnam is his favourite market in Asia, he said. Only 5 per cent of the population is taking out a mortgage, meaning there is large potential for growth.

By Bloomberg

Taiwan real estate market set to boom: Analysts

TAIPEI: The property market in Taiwan is set for a boom if president-elect Ma Ying-jeou can improve relations with mainland China and stimulate the island's sluggish economy, analysts say.

Market-watchers expect a rise of 20 per cent or more by the end of 2008 if Ma keeps his pledge to liberalise economic exchanges with China - and some say there are already signs of soaring prices since his election last month.

"Luxury residential property prices in certain districts of Taipei jumped one-third right after Ma's victory," said Chang Hsin-ming, a marketing consultant with US-based ERA Real Estate.

He said site visits by potential homebuyers were up 30-40 per cent in recent weeks, with many believing that the tense political rivalry with China will ease under Ma's leadership.

Ma, who takes office on May 20, campaigned on a vow to help create a "commom market" with China across the Strait, improving trade and tourism by lifting barriers to the free flow of goods and people between Taiwan and the mainland.

Since the early 1990s, Taiwanese investors have channelled an estimated US$150 billion (US$1 = RM3.19) to China, which has become the island's largest trading partner and biggest export market.

Doing away with trade barriers would increase the flow of money in the other direction, and allow Taiwan to take better advantage of the vast new wealth being created in China today, say analysts.

A survey by North Rehouse, a Taipei property firm, found that 67 per cent of mainland investors were willing to buy real estate in Taiwan once restrictions are eased - and predicted prices would go up 30-50 per cent by year's end.

Despite the decades of official hostility, there are many Taiwanese based on the mainland - and they will also be looking to channel funds back to the island, Chang said.

"A more relaxed China policy will encourage Taiwan investors on the mainland to repatriate their profits back home without controls," he said.

"Such fund inflows, no doubt, will benefit the local property market."

Andrew Liu, managing director for real estate firm Colliers International Taiwan, said he was "cautiously optimistic" about the outlook for the local market - particularly for commercial property.

"Taking expanded cross-Strait economic exchanges into account, rental in Taipei office spaces may rise some 10 per cent a year by 2011," he said, up from previous industry estimates of a 5-7 per cent annual increase.

By AFP

India's Parsvnath to invest US$5b in realty projects

CHANDIGARH (India): Real estate firm Parsvnath Developers Ltd plans to invest about US$5 billion (US$1 = RM3.19) in the next three to five years on different realty projects in India and to increase the land area it will develop, a top official said.

The company intends to have 350 million sq ft of commercial area by the end of this fiscal year from 209 million sq ft now, its chairman Pradeep Jain said last Saturday while inaugurating a township in Chandigarh.

The investments will be in different ventures including residential projects, integrated townships, special economic zones, hotels and retail business.

The company also plans to venture into the hospitality sector, with an investment of US$1.5 billion in this segment in the next three to five years, he said.

"We propose to build about 100 hotels in different categories which will have 10,000 rooms," Pradeep said.

It has a joint venture with ITC's subsidiary Fortune Park Hotels Ltd and Royal Orchid Hotels Ltd to manage hotels across India, he added.

Of the total planned investment, about US$2 billion would be spent on projects in north India. It has two special economic zones coming up, a residential colony, an integrated township and a 200-room five-star hotel.

The company expects to realise about US$1 billion from Prideasia, the project it inaugurated, the land for which it acquired for 8.2 billion rupees (100 rupees = RM8.34).

The Parsvnath group is also exploring possibilities for a foreign collaboration to move into the retail business.

"Discussions are on to have a tie-up with a foreign company to set up hypermarkets in India, but I can't comment further," Jain said.

By Reuters

Resort trends to watch

The world's changing climate is causing an unprecedented period of innovation and reinvention

Building a mega resort development has never been more challenging than it is today. Besides having to worry about the question, “If we build it, will they come?”, developers also need to consider the extent global warming will have on their resorts.

For instance, ski resorts could be literally finished if, by the time they are completed, the weather is not cold enough to produce snow – they can’t depend on the artificial powder alternative forever!

In 2006, Paris-based Organisation for Economic Cooperation and Development (OECD) predicted that by the year 2050, over one-third of Europe’s top ski resorts would disappear because their low-lying slopes would succumb to higher temperatures.

While many leisure industry experts think the finding is unduly pessimistic, many established winter resort operators are not ignoring it.

Eco-friendly operations
In Aspen, Colorado, one of the most famous mountain resorts in the United States, the Aspen Skiing Company decided to purchase renewable energy certificates from wind farms to offset all of its electricity use – about 21,000 megawatt hours.

To reduce pollution, it also uses biodiesel to fuel its snow-grooming equipment, while the heating and cooling for its Snowmass Golf Clubhouse come from watersource pumps located in a pond.

In Europe, the threat of climate change has made many new and refurbished Alpine resorts look beyond eco-friendly strategies to ensure continued revenue attraction. This includes expanding on their menu of winter-based sports with activities that can be enjoyed during three or four seasons, such as golf, tennis, rafting, canoeing and hiking.

Eco-resorts pave the way
Despite the growing importance of eco-resorts – projects focused on environmental sustainability – they have so far largely been built on a small-scale by local individuals or companies.

One of them is Whitepod near Aigle in Switzerland. As a result of its commitment to provide a holiday experience with zero impact on the environment, it uses furniture produced locally from sustainable wood and water from a rainwater recuperation system.

In Lungau, Austria, St. Martin Chalets is Europe’s first energy self-sufficient resort that uses materials such as local larch and pine insulated with sheep’s wool for its main structure.

Near Llangollen in rural Wales, the Whitewater Country Park – touted as the United Kingdom’s first ecoresort – is built of solid log, while in Poprad in south-west Slovakia, the Aqua City spa resort has been designed to draw 80 per cent of its electricity from geothermal water, solar power and wind turbines. By the end of this year, it hopes to be completely self-sufficient in energy generation.

Greener development strategies
In Tahoe, California, the Village at Northstar resort features an extensive trail system complemented by a shuttle service and bicycle tracks to get its guests out of their cars.

To minimise disruption to the environment and keep the cars out of sight, its parking is tucked underground, beneath the buildings.

So far, three buildings with 100 ski-in, ski-out condominiums, a commercial precinct, a fitness facility and a slopeside owner’s club, have been completed. The structures have been strategically placed to maximise natural daylight penetration, while over 50 per cent of waste caused by its construction have been recycled by the contractors.

Warm-weather resorts too are tackling climate change issues by rethinking their approach to land use, traffic management, building design and sustainable development.

With their guests becoming more sophisticated and increasingly rejecting created environments, they are seeing this strategy of adopting green development techniques as providing a win-win solution.

Carbon-neutral resort
In Bulgaria, an emerging resort destination that does not have a history of international tourism, architectural practice Foster & Partners recently put together a masterplan for a carbon-neutral resort located on the Black Sea coast.

The development, known as Black Sea Gardens, comprises a series of automobilefree hill towns set amidst oak forests, meadows and river gorges.

Its residential clusters will accommodate some 15,400 residents in a layout that will follow the contours of the landscape so much of the site can be preserved as virgin terrain.

Anchored by a 220-berth marina and with a lakeside spa, activity centre, sports park, restaurants and shops, these hill towns are themed according to the nature of their immediate surroundings, such as “Sky Village”, “Wilderness Village”, “Meadow Village”, “Cape Village” and “Sea Village”.

To create a calm, pollution- free environment, the roads leading to this leisure destination will be inland and away from the seafront. Residents will also be required to leave their cars in an underground car-park at the entrance to each village and commute either by foot, electric shuttle bus, electric pool car or bicycles.

The resort industry is entering an unprecedented period of innovation and reinvention that is likely to accelerate in years to come, with the push coming primarily from the growing recognition of the need to protect our fragile environment.

As is the case for most businesses, the winners will be those that can successfully create places and experiences that will continue to be authentic 20 to 30 years after they are built.

By New Straits Times (by Lim Lay Ying)

Lim Lay Ying is managing director of Research Inc (Asia) a company specialising in market research and consultancy for all facets of real estate development.

The natural upgrade

Mah Sing's Hijauan Residence aims to satisfy the growing demand among home improvers to rediscover nature

If you’re looking to move up the home ownership ladder because you believe it’s “greener on the other side”, here’s one place that actually lives up to the adage.

Situated on 42 acres of freehold land on the periphery of the Klang Valley’s Hulu Langat Forest Reserve is Hijauan Residence, an eco-themed gated-andguarded enclave that will exclusively comprise semi-dees and bungalows.

Adding to its appeal is the fact that the project is in Cheras, Kuala Lumpur, which is fast becoming a sought-after address due to the area’s improved infrastructure and amenities in recent years.

Developed by Mah Sing Group Bhd (MSG) subsidiary, Loyal Sierra Development Sdn Bhd, Hijauan Residence has proven to be popular among buyers looking to reconnect with nature, with all the semi-dees and link semi-dees offered in its first phase almost sold out.

Winning them over, said the developer, is the project’s green hilly backdrop, fresh and cool surroundings, eyecatching entrance statement, promise of extensive landscaping, and the “green street” concept that promotes a safer as well as more contemporary environment.

In terms of security, MSG pointed out that each phase will have individual guardhouses and 24-hour surveillance.

To encourage a healthy community, Hijauan Residence will also feature a resort-themed clubhouse equipped with facilities such as a swimming pool, gym and other amenities.

For those who missed out on the first opportunity, the good news is that the second phase is poised for launch and is now open for registration.

This time, the offer comprises 30 houses that will come in a variety of types ranging from double-storey semi-dees to large three-storey bungalows.

With the bungalows going for under RM1 million, Hijauan Residence represents a value buy, since simillar units in the area are pricier.

The second phase units will be styled with the “three-generation” home concept, and come with high ceilings, large windows that allow plenty of natural lighting inside, an outdoor shower in the master bedroom, a smart home alarm system and a porch that can fit three cars.

To give prospective buyers a clearer insight into the lifestyle proposition Hijauan Residence is offering, Mah Sing has built a show house on site.

The project's location at the periphery of the forest reserve, just minutes from the city, offers the best of both convenient and healthy living

By New Straits Times (by Chris Prasad)

Shah Alam gets new 'big-name' attraction

Those seeking a business address in Selangor’s capital of Shah Alam can now consider Commerce Galleries@One Two One. This mouthful-of-a-name project is being developed by Lebar Daun Development Sdn Bhd (LDD), and is slated for completion by 2010.

LDD executive director Noorazhar Muhd Nurdin said, “The galleries will be a unique commercial centre, where similar businesses will be placed together at specific parts.

“For example, there will be a financial street for banks and financial institutions.”

Located adjacent to the Federal Highway and Jalan Batu Tiga, and part of LDD’s D’Kayangan development, the centre will have 121 Grade A commercial lots that will collectively have a gross development value of RM350 million.

To be completed in three phases, the project will comprise four blocks with corner lots coming in dimensions of 44ft by 80ft, and intermediate units of 26ft by 80ft.

Prices range from RM209,999 for a stratified studio unit to RM4 million for a corner unit.

“We are confident that the remaining 30 of the 38 units (in the first phase) will be snapped up within the next three months,” Noorazhar said, adding that the second and third phases are expected to be open in July and December this year.

LDD also plans to launch its RM600 million Shah Alam Triple Tower integrated commercial project soon.

The company has a landbank of more than 1,482 acres in Selangor and Pahang, of which 494 acres have been developed.

Its past ventures include D’Kayangan and Bukit Bandaraya in Shah Alam, as well as Taman Dato’ Kemang in Seri Kembangan also in Selangor.

By New Straits Times

Will Penang’s property market continue to boom?

An artist impression of Gurney Paragon overlooking the Straits of Malacca.

A couple of weeks ago, the Penang state government created a stir when it said it would review the billion-ringgit Gurney Paragon project if there were “justifiable grounds”.

Chief Minister Lim Guan Eng said the state government would get views from all quarters and welcomes any objection.

“We will revisit the projects approved by the previous administration and if necessary, review them if these projects are adversely affecting people’s lives,” says Lim.

Lim was responding to calls by the Penang Heritage Trust (PHT) and Bar Council Legal Aid Centre to review and hold an open hearing on the project.

Gurney Paragon is a mixed integrated development by Hunza Properties (Penang) Sdn Bhd comprising a mall, two blocks of high-end condominiums and a heritage building spread over 4ha of freehold land on Gurney Drive fronting the sea.

The land was formerly occupied by the Uplands International School.

The company bought it in 2004 for RM97mil.

For several years, Penang’s property market has drawn buyers from far and wide. Be it a holiday home for Malaysians or a retirement home for foreigners under Malaysia, My Second Home (MM2H), the island’s properties have exchanged hands at a premium compared with Kuala Lumpur’s prices.

E&O Property Development Bhd marketing and sales director K C Chong says comparing like with like, the land component in Penang is different from that of Kuala Lumpur.

For example, a KL gated development may be RM150 per sq ft compared with Penang’s RM250. E&O is developing Seri Tanjung Pinang, an upscale master planned water front development.

Because it is an island, land comes with a premium. And there is certainly demand for Penang properties.

Island living offers a heady blend of sun and surf with an option of city or quiet suburban lifestyle.

Although the island is only about 1,000 sq km, it offers a potpourri of all things that foreigners and locals enjoy.

Real Estate and Housing Developers’ Association (Penang) chairman Datuk Jerry Chan Fook Sing says Penang’s selling points in attracting foreign retirees include comfort, cuisine and affordability.

Datuk Jerry Chan

In some ways, this accounts for the various landed and high-rise condominiums coming up along the Tanjung Bungah stretch right up to the Spice Garden.

Developers are building along hill slopes, each offering the best view of the Straits of Malacca and the Andaman Sea.

Chan says foreigners purchase a third or more of properties that come up in popular tourist areas.

Developers who are aggressive with the MM2H programme reported the same percentage of foreigner buyers.

“A third to 35% is not the norm generally. But by and large, locals and Malaysians working aboard account for a large number of Penang property buyers,” says Chan.

Among the most popular locations among foreigners include Tanjung Bungah, Pulau Tikus area and Gurney Drive.

Most of these projects are launched in Hong Kong, Singapore, Britain and the Middle East besides locally.

It is against this popular demand, growing affluence of Penangites, a shortage of upscale lifestyle products and the growing medical tourism offered by the island that Klang Valley-based developers like IJM Corp Bhd, S P Setia Bhd, Bolton Bhd, Malton Bhd and E&O Property Development have moved north to compete with the likes of Penang’s big boys like Hunza, Oriental group, Naluri Corp Bhd and Ivory Properties group, PDC Properties Sdn Bhd.

And because of the shortage of land and burgeoning demand, several have gone into land reclamation.

These include the E&O group, IJM, PDC and CP Land.

Nevertheless, the operating environment today has come under scrutiny, with the change in state government, coupled with the global turmoil originating from the US, developers in the country as a whole may find it increasingly difficult.

Various factors ranging from rising competition, concern over sustainability of demand by foreign purchasers, rising construction costs, inflation and a global economic slowdown as well as potential oversupply are reasons for concern.

A research report by ECM Libra on the country’s overall property sector says the onslaught of negative sentiments of late has to certain extent negated the positive impact of catalytic initiatives introduced by the government since late 2006.

Sharp correction of the stock market has caused enormous wealth evaporating into the thin air.

“This will put a dent on consumer confidence and sentiment. Huge capital investment such as the purchase of new homes may be put off for the time being.

“Demand for properties by foreigners may also wane in the coming months due to the uncertain landscape as well as the debilitating global financial market,” the report says.

The report says developers in the states of Selangor, Penang, Perak and Kedah may face potential delay in procuring planning approval for new projects post-general election due to teething problem arising from the change of state administration involving state executive councillors as well as municipal councillors.

On a more positive note, Penang-based Michael Geh, director of property consultancy at Raine & Home International Zaki + Partners is of the view that those who need to buy homes will continue to buy.

“Life goes on. Those who constantly invest will pick and choose the best and sideline the average offerings.

“For those on MM2H programme, surveys taken by expatriate magazines shows that Penang rates very high as a favourite destination. Kota Kinabalu is favoured for its beachfront lifestyle living while the Middle Easterns like the KLCC precinct.

“It is our world class local food, friendly locals who speak English and a less hectic lifestyle that are bringing foreigners here to Penang,” says Geh.

Rehda Penang chief Datuk Jerry Chan says the new state government has reassured him that it will want to expedite things and be more transparent, which bodes well for the business community.

“What happened in Penang, and in the states of Selangor, Perak and Kedah, is quite drastic. And in any situation of such magnitude, it is only natural to pause. But in the long term, we will want to give the new government a chance.

“They have not said anything that is business adverse. As for the Hunza’s Paragon on Gurney, that is a mega job and it is only natural that mega jobs such as these, which impact people in different ways, be given a relook,” says Chan, who is also the managing director of Asas Dunia Bhd.

By The Star (by Thean Lee Cheng)

Bindev to unveil final phase of Bukit Istana

Properties worth RM70mil in low density residential project


An artist’s impression of the phase three of Bukit Istana project. Inset is Lim Yoke Kim

KUANTAN: Bindev Sdn Bhd is offering properties worth about RM70mil under the final phase of its upmarket and low-density residential project Bukit Istana.

The units would have a land size of 4,000 sq ft and built-up areas of 3,000 sq ft, said branch manager Lim Yoke Kim.

“The third and final phase will comprise 148 double-storey semi-detached units and four bungalows. The units are priced from RM480,000,” he said.

The last phase boasts features such as high ceiling, high-panel glass windows to allow more natural sunlight into the house and three-phase electrical wiring.

A subsidiary of PJ Development Holdings Bhd (PJD), Bindev commenced construction of Bukit Istana during the 1997 financial crisis and has completed 150 bungalows, 226 double-storey semi-detached units and 72 single-storey units, of which about 92% are sold.

The project covers 54.4ha and has a gross development value of about RM250mil.

According to Lim, Bindev continued with the project during the financial crisis as it had confidence in the state’s house buying market.

“Our target is the professionals and top level management especially those working in the Gebeng industrial area and Kuantan Port,” he said in a recent interview.

On future projects, Lim said Bindev planned to develop two plots of land in Sungai Karang and Penor.

The Sungai Karang project was located along Kuantan’s popular beach belt and was close to Swiss Garden Resort and Spa, a hotel under PJD’s hotels, resort and leisure division, he added.

Construction on the mixed development project comprising condominiums, bungalows and semi-detached units on 8.8ha was expected to begin at year-end for completion in three years, he said.

Lim said the Penor project, also a mixed development venture, would be built on 400ha and completed over 20 years.

Construction would commence at the end of next year, he added.

On its future projects, Lim said BSB had plans to develop two plots of land in Sungai Karang and Penor.

The project in Sungai Karang was located along Kuantan’s popular beachbelt and was close to Swiss Garden Resort and Spa, a hotel under PJ Development’s hotels, resort and leisure division, he added.

He said it would involve a mixed development project comprising condominiums, bungalows and semi detached units on 8.8ha of land with construction expected to begin end of the year.

It would also have a clubhouse and would be the first feature to be constructed, he said, adding, the whole project was scheduled for completion in three years.

Lim said the Penor project, another mixed development venture, would be built on 400ha of land and to be completed in stages over 20 years.

Construction would commence end of next year, he added.

By The Star (by Roslina Mohamad)

Navigating the storm: Asia’s real estate

Asia's Real Estate

In Hong Kong, strong economic growth continues to support residential market.

The confluence of economic uncertainty brought on by the deepening subprime crisis has posed a real risk of a systemic financial event and a prolonged global economic slowdown. This, coupled with another round of de-leveraging in the structured credit market has led to further pressure and deterioration in real estate prices, predominantly in the US and Europe. Given that the pendulum swung as far as it could in the direction of reckless mortgage lending, it will now swing back towards the quaint notion of buyers being lent only the amount they can reasonably be expected to pay back.

Whilst the rout has largely been confined to markets outside Asia, we see considerable softening in real estate markets with high foreign participation and in certain high-end segments. Opportunistic investors are pulling back from Asian property given more scope for acquiring distressed assets in their home markets, and loans remain elusive in Japan and Singapore, one of their favourite markets.

Hedge funds have stopped dabbling in property in the region, and although private equity players will continue to develop property in India and China, they are more likely to buy buildings cheaply in Western countries than in Asia.

We expect values for US commercial real estate to fall by 23% in the next five years from their 2007 peak, causing losses of about US$1,600bil, including those on commercial mortgage backed securities.

London office values have dropped 12% from a peak in the middle of last year, and will be under further pressure from forecasts of a 15% decline in rental values through 2009.

In 2007, total direct investment in Asia jumped 27% to US$121bil – a sixth of the global total – with approximately half invested in Japan and Singapore.

Real estate stock in Asia currently stands at US$9.5tril, growing on average by 6% - 7% p.a (except in China which grew by 15% p.a). China and India make up 50% and 12% of the total stock respectively while Japan constitutes 20% of the total.

The demand for real estate is dependent on the health of the economy, which in turn is affected by financial markets.

In 2008, we expect prospects for Asia’s real estate to remain lukewarm, especially in traditional FDI led markets like Singapore. The global economy still faces major uncertainties as to how a further unravelling of the credit crisis will affect the availability of credit and asset pricing.

The resilience of Asian economies and the real estate market will be truly tested in 2008. Buoyant domestic consumption is expected to help the region weather a substantial economic slowdown as weaker global demand impacts Asian exports.

Overall, despite the risks inherent in the region, we believe opportunities remain in Asia’s real estate market, mainly in grade-A office space, driven by sound GDP growth (projected at 8% y-o-y) underpinned by sustained private consumption, higher public and private investments; a re-rating of property as an asset class, sustained domestic demand and on-going infrastructure development.

We remain bullish on India and Vietnam, with a cautious view on China, Malaysia and Singapore.

Rent and value

Asia's positive economic growth has shored up property rents and capital values to new highs throughout the region in 2006/07. Prices of residential and non-residential properties in many major and smaller cities continue to rise despite higher interest rates/ borrowing costs across Asia.

Capital flows to the Asian region have increased tremendously since 2005, mainly into major economic sectors such as manufacturing, services and oil and gas, and opportunities remain abundant in the property sector.

The US is among the largest sources of investment inflows into the region; nevertheless, the largest increases in the availability of capital for real estate are expected to come from the Middle East, China and India. The main sources of capital for property investments in 2007 and 2008 remain private equity investment funds, institutional investors and real estate investment trusts (REITs).

Since 2006, the Asia region has experienced strong demand in the residential sector despite high interest rates that led to higher house prices. In mainland China and Hong Kong, strong economic growth continues to support the residential market. Beijing and Shanghai continued to attract high levels of foreign investment that entailed a higher number of expatriate professionals which led to higher demand for luxury residential property.

Residential real estate prices have shot up particularly in Singapore. Singapore’s residential price change in 4Q07 stood at 31.4%. Concurrently, Malaysia witnessed stable prices and rentals for 1H07. Strong demand for high-end residential units in prime cities such as Hong Kong, Kuala Lumpur and Singapore has escalated with the launch of new high-end residential units throughout 2007.

The most expensive residential segments in Asia continue to be Hong Kong, Tokyo and Singapore at over US$10,000 per sq m.

In Hong Kong, the real estate scene has not been very different from other countries in the region with house prices trending higher at 8.78% y-o-y in 2Q07 compared to 0.65% negative growth in 2Q06. The real estate market has been gradually recovering since the country’s downturn in the property market last year, following the housing slump in the US.

We expect interest rate cuts in the US to push prices up further in the residential segment. In Japan, land prices advanced 0.4% y-o-y in 2007, an indication that the Japanese residential property market is recovering from its 15-year price slump.

Moving forward, we expect the Asia’s residential market to sustain growth, albeit in the long term, underpinned by the following factors:

• Strong economic growth in most markets in Asia will support the strong performance in the residential segments.

• Rising income per capita will enhance purchasing power and therefore boost consumer spending. High economic growth, improved employment levels and positive wealth effects arising from equities in most parts of Asia Pacific have led to higher disposable incomes.
  
  Average per capita income for the region rose to US$14,371 in 2006 from US$12,906 in 2004. Per capita income is expected to average US$15,217 in 2007 and US$15,886 in 2008 that in turn, will boost demand for residential properties.

• In most Asian markets (China, India, Singapore, Malaysia) the high-end residential property market has witnessed increased demand spurred by the influx of expatriates and skilled professionals, the region's increasing attractiveness as a second home (retirement) and higher rental yields.

• The demographic profile of Asia is relatively young. Asia’s young population (aged 15 to 59) continues to increase, creating strong demand for housing for ownership occupation and rental increases. India’s population is expected to increase from 1.1 billion to almost 1.5 billion by 2025. In 2006, the working age group of those aged between 15-64 years stood at 64.3% and expects to increase moving forward.

The Asian real estate market capitalisation stands at approximately US$4.9tril, mainly dominated by Japan followed by China and the rest of Asia. We expect this ratio to alter moving forward with strong growth in Asian markets. Apart from Japan, real estate activities are focused in Singapore and China.

A common practice that is picking up in the region is the number of sale and leaseback transactions particularly in Singapore and Japan. We expect this trend to spread across the region over the medium term.

Real Estate Trends

The real estate industry has seen rapid growth across Asia post-crisis, with varying stages of development within each country. Nevertheless, we have identified several similar trends/patterns, unique throughout the region, as follows:

• The real estate sector in Asia is driven mainly by rapid and dynamic growth in the offices and high-end residential segments.

• Prices for residential and non-residential properties in many major cities and smaller cities continued to rise, despite higher interest rates across the region.

• Asia’s REITs markets continued to grow with many companies converting their assets into REITs. The total number of Asian REITs at the end of 2007 stood at 86 with a total market capitalisation of US$74.8bil.

• The overheating property markets in many countries across the region led governments to enforce stricter rules to cool down the situation.

The Chinese government further tightened measures by increasing taxes, requiring developers to build more low-cost houses and tightening rules on property purchase by foreigners. South Korea and India also tightened rules in relation to borrowing.

• In most markets (Singapore, Hong Kong, Malaysia, China, India) demand for office space is highest followed by hotel/resorts, retail, industrial/distribution, homebuilding and apartments residential.

• The strong capital inflow into Asia real estate particularly China leads to the problem of demand exceeding supply. Although the Asia market has unparalleled potential for growth, in most cases, it lacks depth. The lack of a solid investment base to absorb current levels of incoming capital lead to the reflection of the current scenario, therefore increasing the risk of overheating.

Looming subprime issue

We expect the US subprime issue to continue to rear its ugly head well into the year as write downs continue.

However, we expect the impact on Asian markets to be minimal (safe the export sector) given that the region’s financial institutions have relatively limited direct exposures to US subprime mortgages.

In the region, China is the largest overseas holder of US mortgage-backed securities, at around US$260bil, which is held mostly through its international reserve holdings and through holdings of commercial banks.

We take the view that Asia remains relatively insulated from the US subprime issue for the following reasons:

• Asia’s huge pool of international reserves at US$3tril (including Japan and China)

• Asian banks’ exposure to subprime debt instruments is minimal and manageable

• Asian corporate sector leverage is very low

• The banking system has been strengthened and is strongly capitalised

• The financial sector’s direct exposure to equity markets also appears relatively limited

• Asian central banks have taken steps to improve the regulation of high-leveraged activities

• Asian economies have become more resilient to shocks to their capital accounts as external vulnerabilities have been reduced

• Companies depend less on the more risky capital inflows

As such, we expect the contagion from the US subprime crisis to be limited to the capital markets. An indirect effect of the subprime crisis on the region is that it has increased the cost of raising capital for banks, corporate and investment bodies.

New bond issues will have to be priced slightly higher to reflect rising credit market volatility and the anticipated temporary decline in investors’ demand for these products both globally and in the region.

Liquidity on capital markets in Asia remains vast although a re-rating of risk will see some liquidity being sapped out of equities/real estate in the medium term.

Credit market spreads that reached record low levels pre-subprime crisis are likely to widen and remain high into 1Q08, both in the region and for emerging markets as a whole. In the medium to longer-term, as deals get bigger in size and more complex, access to cheap international capital is becoming more important.

The crisis will continue to affect the region indirectly in that it has heightened uncertainty and resulted in a reassessment of risk, as reflected in the periodic declines seen in stock market in 2007.

We expect frequent and large reassessments of risk and high volatility in asset prices to figure largely in Asian economies for the most part of 2008.

Inflation poses a key challenge for the region, which has enjoyed robust expansion in the last few years amidst muted price pressures. Oil prices, which are expected to remain firm in 2008, have raised the spectre of global inflation trending even higher this year.

This poses a key threat to the region’s inflation outlook. We expect oil to trend higher this year to average at US$80 per barrel, vs US$72.4 per barrel in 2007.

A different set of rules will apply moving forward as policy makers strive to balance the need for tighter monetary conditions to rein in rising costs even as growth weakens.

By The Star (by KFH RESEARCH)

Halal certification can open new opportunities

Mohd Shukri Abdullah

KUALA LUMPUR: Companies can benefit greatly from having halal certification, says Malaysia International Halal Showcase (Mihas) chief executive officer Mohd Shukri Abdullah.

He said with the certification, the halal sector could create a lot of opportunities for them.

“Halal certification is becoming a big deal. One day it will be an important standard in both the local and international food industry,” Shukri told StarBiz.

According to him, many companies without halal certificates were losing out.

“Many hotels and big restaurants these days are very conscious of whether their suppliers are halal and many of these suppliers lose business because they are not,” he said.

“The global demand for halal products is increasing. To meet this demand, products would need to be safe from contamination of non-halal substances and the only way to prove such compliance is with halal certification.”

Shukri estimated that there were currently only about 2,300 companies in Malaysia with halal certification.

“Many companies today do not have halal certification because they do not meet good manufacturing practice (GMP) standards. When the Department of Islamic Development conducts checks on them, they lose out on cleanliness.

“Companies looking for certification are rejected for poor GMP and not on whether products were halal. If a product is unclean, it is not safe for human consumption,” Shukri added.

Many countries, primarily within the Asean region, were going into halal certification and Malaysia was starting to realise its importance, he said, adding that by adopting certification, Malaysia had an opportunity to steal a march on countries from the Middle East, which, ironically, were not so stringent on halal certification.

“Countries from the Middle East are allowing all kinds of foods to enter their countries because the products do not comprise either pork or alcohol.

“Pork can come in different forms such as emulsifiers, conditioners or even colouring,” he added.

Shukri also said suppliers of products to the Middle East might be unwittingly including products tainted with non-halal elements.

“A non-Muslim supplier could decide to use a type of colouring that could be cheaper or of better quality but may not realise that it may be tainted with non-halal elements,” he said.

“All the particular supplier would be taking into account is that he is not supplying pork or alcohol.”

He also said Middle Eastern countries would then look to countries that issued halal certification like Malaysia as an alternative for halal supplies.

On Malaysia’s potential as a global halal hub, he said the country still had a long way to go.

“But it is getting there and events like Mihas would help expedite that process,” he said.

Organised by the Malaysia External Trade Development Corp (Matrade), Mihas is the largest annual gathering of halal industry players and entrepreneurs in the effort to ease the sourcing and selling of global halal products.

Shukri said Mihas would also help boost foreign direct investments.

As an example, Shukri said companies from China often had problems exporting to Muslim countries because of their predominantly non-halal products.

He said Malaysia would not face a similar problem despite the fact that the country’s exporters were predominantly Chinese.

“They are still successful because they are based in Malaysia. With Mihas, we are trying to encourage local Chinese businessmen to work with their foreign counterparts,” he said.

“We want to encourage them to come set up factories here, send their raw materials here, process and pack them here. They can then get local halal authentication and send them to the world.”

This year, Mihas will be held from May 7 to 11 at the Matrade Exhibition and Convention Centre. It expects participants from 30 countries to open 610 booths. It also hopes to attract about 40,000 visitors from 70 countries.

The event last year registered over RM600mil in sales.

By The Star (by Eugene Mahalingam)

Brisk sale of Plaza Damas 3

From left: Maximerge Capital Sdn Bhd CEO Terence Yooi Sing Keen, Michelle Won and Mayland group general manager Yap Boon Teck with a mock cheque at the signing ceremony.

KUALA LUMPUR: Malaysia Land Properties Sdn Bhd (Mayland) registered sales of about RM160mil, or a take-up rate of 95%, for its 72 shop offices in Plaza Damas 3 project in Sri Hartamas.

The one-to three-storey shop offices were soft launched last week.

Bulk buyers Maximerge Capital Sdn Bhd and Koperasi Pendidikan Islam Malaysia Bhd took up 18 units worth RM45mil and eight units worth RM20mil respectively.

Marketing manager Michelle Won said other purchasers were from the group's existing clientele.

“Some of the purchasers are tenants from our Plaza Damas 1 and 2 project,” she said at the signing of agreements with Maximerge and Koperasi Pendidikan yesterday.

Won said Plaza Damas 3 would also comprise 1,500 serviced apartments that would be launched in three months.

“Collectively, the entire Plaza Damas 3 project will have a gross development value (GDV) of RM800mil,” she said.

Plaza Damas 3, located within a 15km radius covering Sri Hartamas, Mont' Kiara, Damansara Heights and Kenny Hills, would be linked to the earlier phases via an overhead bridge link, Won said.

Mayland will next be launching its Sri Putramas 3 condominiums in Jalan Kuching and a residential project in Johor Baru.

“The (Sri Putramas 3) project will have a GDV of about RM300mil, and we plan to launch that in three months as well,” she said.

“We will be launching our residential project comprising 400 townhouses in Johor Baru,” Won added, but did not specify a date.

Won also said the group was in the final stages of completing the purchase of 10 acres in the Klang Valley.

Mayland had under 500 acres of undeveloped land, mainly in the Klang Valley and Johor Baru, she added.

By The Star

Real estate cycle seen peaking this year

KUALA LUMPUR: The country’s real estate cycle is expected to peak in late 2008 as the pace of rental increases begin to lag price increases, particularly in the high-end property segment in the vicinity of Kuala Lumpur City Centre.

OSK Investment Bank said compression of rental yields from high-end condominiums could prompt existing owners to lock in capital gains in anticipation of more new luxury units hitting the market at a time when the real estate cycle was peaking.

Its latest property market outlook report indicated that additional supply of condominiums in KLCC would make it more difficult for investors to rent out their residential units.

“If most buyers are mere speculators and investors, risk of a potential bubble burst in KLCC condos will be rather high by late 2008,” OSK said, adding that the current upward trend in the local real estate cycle may begin to taper off in 2009 when more properties hit the market.

It was reported in February that prices of upmarket condominiums may reach a new high of RM3,000 a sq ft this year as new products hit a niche market driven mainly by foreign demand for local luxury units which are deemed one of the cheapest in the region.

According to property consultancy Knight, Frank, Ooi and Zaharin Sdn Bhd, residential properties in KLCC had fetched between RM1,300 a sq ft and RM2,000 a sq ft last year (2007) while rentals ranged between RM5.50 a sq ft and RM6.50 a sq ft.

The rising prices of these top notch homes, essentially, translates into lower rental yields as prices advance at a quicker pace than rental hikes.

Meanwhile, foreign demand for high-end real estate here may dip on investors’ cautious sentiments surrounding the country’s new political landscape following the recent general elections.

But the slower take-up rate for luxury properties should not be viewed as an across-the-board phenomenon as foreign individual buyers, experts said, were still scouting for local assets.

A downside in demand for larger transactions like en bloc commercial property acquisitions by overseas institutional buyers is, however, possible as investors adopt a wait-and-see attitude to safeguard their portfolios.

“Foreign direct investment is going to be sustained but definitely there will be a wait-and-see attitude in certain industries especially on the bigger ticket purchase items like en-bloc sales.

“Foreign individual investors are still coming in,” real estate consultancy Zerin Properties chief executive officer Previndran Singhe told The Edge on the sidelines of a forum discussing the impact of the recent national elections on the country’s real estate sector.

The forum was organised by the Malaysian chapter of the International Real Estate Federation or better known as Fiabci.

Speaking at the event earlier, Asian Strategy & Leadership Institute chief executive officer and director Datuk Dr Michael Yeoh said foreign investors were still deliberating on the Malaysia’s investment climate following the unprecedented outcome of the recent elections.

“We cannot exclude any possibility,” Yeoh said.

By The EDGE Malaysia (by Chong Jin Hun)

Dijaya's Tan buys more Sunrise shares

TAN Sri Danny Tan Chee Sing, a major shareholder of property developer Dijaya Corp Bhd, has been buying more shares of Sunrise Bhd.

Tan bought another eight million shares on March 26, bringing his total stake to 6.91 per cent of rival Sunrise.

Tan's interest in Sunrise is via Phoenixflex Sdn Bhd.

Tan emerged a substantial shareholder in Sunrise in October 2004 and has since been accumulating shares. Yesterday, Sunrise's shares fell three sen to close at RM2.07.

By New Straits Times

UAC counts on new system to push sales

KUALA LUMPUR: Cellulose fibre cement board manufacturer UAC Bhd, whose earnings has been slightly affected by high raw material costs, is focusing on new and innovative products and improving productivity to mitigate rising costs.

Chief executive officer Koo Hock Fee said UAC would focus on its UCO SolidWall system, which would reduce to only one-third the time taken to put up a wall compared with a brick and plaster wall.

Koo Hock Fee

The product would translate into cost savings because of the shorter time involved, he said, adding that the company would hold a series of seminars nationwide this month to market it to property developers.

Speaking after the company AGM yesterday, Koo said 2007 had been challenging as the prices of raw materials such as pulp and cement had risen 10% and 12% respectively since December 2006, amid weak domestic demand.

The group also recently moved to Menara UAC, its new corporate office, in Mutiara Damansara, Selangor. The building, with a net lettable area of 138,000 sq ft, would provide the group with an additional income stream and potential capital appreciation.

Khoo said the tenancy of 46% of the building was already confirmed while 36% was under negotiation.

“We are reasonably confident that the office will be fully tenanted by year-end,” he said, adding that the expected rental yield was 9% while the return on capital 6.5%.

UAC registered a lower pre-tax profit of RM27.2mil on turnover of RM165.5mil for its financial year ended Dec 31, 2007. Net profit came in at RM22.6mil, down from RM30.9mil in 2006.

By The Star

High-end properties still attracting foreigners

MALAYSIA'S property sector will continue to attract foreign investors, especially the high-end segment, despite the recent changes in the local political landscape, Asian Strategy & Leadership Institute (ASLI) chief executive officer Datuk Dr Michael Yeoh said yesterday.

However, the foreign investors are bound to adopt a “wait and see” attitude for now until the political scenario is much more clearer, he said.

The wait-and-see attitude is more likely to affect the high end properties that depend on foreign purchases like those in the KLCC areas or those above RM2,000 per sq ft.

Presenting a talk in Kuala Lumpur yesterday on the “Impact of The Recent General Election on the Real Estate Industry”, organised by the International Real Estate Federation Malaysia (FIABCI-Malaysia), Yeoh said a more clearer political picture was expected after the UMNO General Assembly in December and this will result in a relatively more stable property market.

He, nevertheless added there was no sign yet of a slowdown in the foreign investments.

Whatever the changes, the basic policies are expected to remain same, he said, adding that the local property market will continue to be boosted by domestic demand.

“I dont think domestic demand would slow down, I think that would continue to be strong,” he added.

Yeoh also said a more influencing factor was the global economic situation rather than Malaysian politics as the US subprime crisis was far from over and that it may have impact on global liquidity.

On a positive side, he said Malaysian economy was well preserved by domestic consumption which was robust.

ASLI has forecast a gross domestic product growth of between 5.8 per cent and 6.2 per cent this year amid robust domestic demand, and exports of its oil and gas and palm oil.

Meanwhile, Glomac Bhd’s group executive vice chairman, Datuk Richard Fong, was also upbeat on the high-end property market. He said: “I think the property sector will remain stable and we will see a surge of foreign investments for properties especially in the high-end market, mainly from the Middle East.”

Bukit Kiara Properties Sdn Bhd’s group chairman Datuk Alan Tong Kok Mau meanwhile said there was still a lot of growth potential for the high-end property market, saying that Malaysia’s property prices still remained very competitive.

“There is still a niche market for the high-end segment and we would focus on that. Towards the year, we would see demand mainly from the Middle East and China,” he said.

By Bernama

MPHB makes property thrust

MULTI-PURPOSE Holdings Bhd (MPHB) will use cash from the privatisation of its gaming subsidiary Magnum Corp Bhd to venture into property development in a bigger way, its top official said.

The move will provide the group with a new earnings stream as it seeks long-term growth, managing director Datuk Surin Upatkoon (pic) said.



He said MPHB, which stands to get up to RM731 million from the privatisation exercise, already has two hectares of prime land along Jalan Sultan Ismail in Kuala Lumpur on which it is planning a commercial development.

The group expects to obtain the planning approval for it by year-end. It also wants to increase its landbank in Malaysia and has the first right of refusal to buy land owned by Magnum.

"It's still premature to say how much of the proceeds we'll use for property development, (but) it'll be one of our core businesses and will start contributing to the group from 2009 onwards," Surin told reporters after shareholders gave their approval for the privatisation yesterday.

The Magnum buyout, which MPHB is undertaking with global private equity firm CVC Capital Partners Asia III Ltd, is expected to be completed by June this year, he said.

MPHB is now on the brink of a growth phase after successfully cutting debt to some RM200 million today from a peak of over RM2 billion about five to six years ago.

It derives the bulk of its earnings from gaming, but also does insurance and stockbroking.

Surin expects MPHB to do well this fiscal year but warned that it will probably not be able to match last year's strong performance, where net profit more than quadrupled to RM571 million.

Shareholders can nevertheless expect to get a higher dividend than the 11 sen a share that was declared last year, he said.

The gaming business is expected to grow by between three per cent and 3.5 per cent this year, while insurance is targeted to grow by about 14 per cent to RM320 million.

The group may sell its insurance business if a good offer comes by, Surin said. It is currently in talks with a local insurance firm which has a foreign shareholder.

"We're not in a hurry to dispose it. We could also go for a merger," he remarked.

As for gaming, the group has no plans to expand into the region as yet. It has been "business as usual" in states like Kedah where the opposition Islamic political party recently wrested control.

By New Straits Times (by Adeline Paul Raj)

MMC-Gamuda rail project to create 150,000 jobs

ABOUT 150,000 jobs will be created under the RM12.5 billion electrified double-tracking railway project over the next five years.

The main contractor, an MMC Corp Bhd and Gamuda Bhd joint venture, expects the project, which involves laying parallel railway lines over 329km from Ipoh to Padang Besar, to be completed on time in 2013.

About five per cent of the project has been done.

"In addition to hiring 5,000 professionals and 12,000 sub-professional staff, the project will also see over 100,000 skilled and unskilled workers engaged," MMC-Gamuda JV director Datuk Azmi Mat Nor told a media briefing in Bukit Mertajam, Penang, yesterday.

He said since the company took possession of the sites across Perak, Penang, Kedah and Perlis on January 8, work has been on schedule.

MMC-Gamuda will brief the state governments and local authorities on the progress of the project in their respective states and its benefits.

The infrastructure works in the four northern states include over 196km of railway tracks, stations, depots, halts, yards and bridges, while the system works comprise the relocation of existing services, electrification systems, signalling and communication systems.

MMC-Gamuda has given out RM3 billion worth of construction packages.

"Of the total, up to RM1.6 billion has been awarded to Bumiputera contractors that fulfilled three main criteria of being genuine and having hands-on management experience, capable contractors that have positive track records for both financial and technical, and able to offer competitive pricing via a tender system," Azmi added.

By New Straits Times (by Marina Emmanuel)

AmREIT to increase assets under management by 45%

AmREIT is confident of improving the performance of The Summit retail mall to attract more shoppers and provide them with a satisfying shopping-cum-lifestyle experience

PETALING JAYA: Am ARA REIT Managers Sdn Bhd (AmREIT), the manager of AmFIRST Real Estate Investment Trust (AmFIRST), increased the assets under management by 45% to RM835mil after acquiring all the developer’s units at The Summit Subang USJ.

Director Cheah Tek Kuang said on Monday he was confident of improving the performance of The Summit retail mall to attract more shoppers and provide them with a satisfying shopping-cum-lifestyle experience.

The purchase of the unsold units was the last stage of AmREIT's acquisition of the property, which comprises an office tower, a retail mall, a 323-room hotel and 2,125 car park bays for RM260mil.

Cheah said in a statement the acquisition marked another milestone for AmFIRST after the recent completion of its purchase of Kelana Brem Towers in Kelana Jaya in June last year.

With this acquisition, AmFIRST had executed two sizeable acquisitions with asset values totalling RM350mil within 15 months of listing, he said, adding this was a significant 70% growth from the initial listing portfolio.

“AmFIRST will continue to look for acquisition opportunities to maximise shareholders’ value. We are looking to achieve sustainable long term growth in total returns (in terms of income distribution and capital growth) of AmFIRST REIT units,” he added.

The acquisition was structured with a guaranteed net property income yield on a stepped-up basis over four years for the retail, office and car park. The hotel would be leased back to the vendor for five years and an additional five years on a stepped-up basis also.

The structure would offer unit holders yield protection via the guaranteed minimum net income and also upside potential via the hotel profit-sharing arrangement, the statement said.

The acquisition would boost the distribution per unit (DPU) by an approximately two sen up to the year ending March 31, 2009.

By The Star

Menara Stanchart up for sale?

SINGAPORE's real estate investment arm plans to sell Menara Standard Chartered at Jalan Sultan Ismail here for about RM300 million, seven years after it bought the property, sources said.

The Government of Singapore Investment Corp Real Estate (GIC RE) is believed to have approached several local property agents for the possible sale.

"They are looking for a yield of about six per cent which works out to about RM950 per sq ft. They should not settle for any less than RM900 per sq ft for the building and in that location," a property agent said.

Based on a nett lettable area of 321,000 sq ft, the building could be sold for between RM289 million and RM305 million.

GIC RE vice-president for administration and corporate affairs, Greg Baptist, declined to comment when contacted.

According to GIC RE's website, it bought Menara Shahzan Insas through its affiliate Reco City Sdn Bhd in November 2001 for RM135 million.

Built in the mid-1980s, Menara Shahzan Insas is a 42-storey office tower with a total gross floor area of 46,700 sq m.

The building was later renamed Menara Standard Chartered in July 2004 after Standard Chartered Bank relocated its corporate headquarters there.

The website also said the building required extensive renovation due to its age and condition at the time of acquisition.

Once renovation was completed, GIC RE repositioned Menara Standard Chartered as a premium office building, attracting class A office rentals and international tenants like Standard Chartered Bank, California Fitness and Servcorp.

GIC RE is one of three business units under GIC, one of two of Singapore's investment arms. Temasek is the other arm that is more well known among investors. Together, they manage Singapore's foreign reserves.

GIC RE's website states that its current assets in Malaysia include holdings in the Sunway Pyramid Mall, Sunway Hotels and Resorts and a stake in the City Square shopping mall in Johor Baru.

By New Straits Times (by Vasantha Ganesan)

Affin, Mutiara Goodyear in Penang housing pact

Affin Islamic Bank CEO Kamarul Ariffin Mohd Jamil (left) exchanging documents with Hamidon Abdullah. Looking on is Affin Islamic Bank chairman Jen (R) Tan Sri Datuk Seri Ismail Omar

KUALA LUMPUR: Affin Islamic Bank Bhd and Mutiara Goodyear Development Bhd have entered into a musharakah (joint venture) financing arrangement for a high-end residential development in Penang with a gross development value of RM180mil.

Under the joint venture, Mutiara Goodyear would be responsible for the construction and sales of the development while Affin Islamic Bank would provide the required financing facilities.

Affin Islamic Bank chief executive officer Kamarul Ariffin Mohd Jamil said the musharakah was established via a registered special purpose vehicle called Affin-i Goodyear Sdn Bhd in which Affin Islamic Bank and Jurus Positif Sdn Bhd, a wholly owned subsidiary of Mutiara Goodyear, are joint partners.

“The financing arrangement is the first in the country to feature a combination of hybrid Islamic financing products in a partnership where profit and losses are shared equally. This is truly advantageous in times of economic uncertainty,” he said at the signing ceremony yesterday.

Mutiara Goodyear executive chairman Hamidon Abdullah said the company was in the midst of obtaining Penang state government approval for the development on an 8.8 acres in Bukit Gambir.

He did not anticipate any problems in getting the green light, adding that the project should take three years to complete.

“We are targeting the affluent market and are confident that this development would enjoy a high take-up rate, buoyed by the dynamic Penang property market and the influx of foreigners residing under the Malaysia MySecond Home Programme,” he said.

The property developer, which has an undeveloped land bank of about 800 acres in Penang and the Klang Valley, has lined up a few launches.

“We are planning commercial developments, comprising a shopping podium and office blocks at PJS 11 in Sunway; office suites at Prima Avenue, Kelana Jaya; and high-end bungalows at Nadayu Melawati, Ampang,” Hamidon said but did not elaborate.

Affin Islamic Bank, which celebrated its second anniversary yesterday, has targeted a 10% growth in pre-tax profit this year from RM58mil last year.

The bank, which hopes to increase its disbursement of loans by 15% this year from the total of RM1.7bil in 2007, also plans to expand to Indonesia in the near future.

“Islamic banking penetration is very low as it comprises only about 1% of total banking assets in Indonesia,” he said, adding that the bank also hoped to springboard to China as well as the Hong Kong market via its 25% stakeholder, Hong Kong-based Bank of East Asia Ltd.

By The Star (by Laalitha Hunt)