MK Land focusing on Klang Valley

PETALING JAYA: MK Land Holdings Bhd plans to focus on ongoing projects in the Klang Valley that are still showing growth in sales despite the economic downturn.

Tan Sri Mustapha Kamal

The property developer’s chief executive officer Tan Sri Mustapha Kamal Abu Bakar said the company would, however, slow its resort and property developments in Perak and Langkawi.

“We have ample land-bank in the Klang Valley and we need not start new projects. If we just focus on the existing ones in the next three to four years, we still can survive this economic downturn,” he told StarBiz.

“Even if the projects in the northern states are not profitable, it is fine as we will still be making profits from the projects in the Klang Valley because of their locations,” he said.

The company has a land-bank of 6,776 acres with potential gross development value of RM19.7bil. It has 623 acres in Damansara Perdana, 399 acres in Damansara Damai and 59 acres in Cyberia.

MK Land is in the midst of planning and is seeking approval from the authorities for its projects in Perak and Langkawi. It will wait for the right time to launch those projects.

In the first seven months of its current financial year ending June 30, MK Land recorded RM150mil in sales, said Mustapha, who made his comeback and assumed executive powers again in June after a one-year-plus hiatus.

Mustapha said his team had put in a lot of effort doing marketing, and thus he was confident the company could achieve healthy growth going forward. “I believe that we will be able to ride through the hard times if we tighten our belt, work harder and sell more,” he said.

The company was expected to sell some 907 properties worth RM438mil in 2010 and 838 worth RM487mil in 2011, said Mustapha.

Its ongoing projects in Damansara Perdana comprise the Armanee Terrace duplex condominiums, the Rafflesia three-storey semi-detached bungalows and Metropolitan Square commercial and residential development.

Mustapha said all the ground work, including piling and facilities, was completed when the first block of Metropolitan Square condominiums and retail units were launched.

“If we build the last two of the five condominium blocks now, comprising 448 units worth RM196mil, we will bring in solid profit,” he added.

With the lower construction costs due to the sharp fall in raw material prices, Mustapha said the company would plough back the savings into its projects, including repackaging the property products to benefit the buyers.

Of the 45,964 properties launched by the company so far, 42,829 worth RM5.1bil had been sold, he added.

“We have a huge land-bank and by offering various types of properties, we can adapt to any economic condition,” Mustapha said.

On the company’s Tasik Bukit Merah mixed development project in Perak, Mustapha said the nursing college there (which is part of the development) was doing very well.

“We want to expand the college further under the second phase of development.

“Instead of totally relying on the tourist market, we believe that by having a college, we will be able to create a critical mass for our project there,” he said.

By The Star (by Rachael Kam)

Berjaya postpones opening of The Chateau to end-2009

BERJAYA Hills Bhd, a subsidiary of Berjaya Corp Bhd (3395) , is to postpone for a second time the opening of its five-star resort, focusing on spa and wellness, in Berjaya Hills, Pahang, on concerns that the leisure market may continue to weaken in parallel with other regional markets.

The Chateau Spa and Wellness Resort, which has 210 rooms featuring a luxurious neo-classical interior design concept, was originally scheduled to open in November 2008, but was postponed to April this year.

Built after the medieval Haut Koenigsburg Castle in Alsace, France, for RM100 million last year, the resort will now open by end-2009, Colmar Tropicale general manager Bjorn-Henning Buth said.

The Chateau is located about 1,000m above sea level in the French- and Japanese-influenced Berjaya Hills (formerly known as Bukit Tinggi Resort), which spans 6,320ha of tropical greenery.
"We are targeting the international wellness market. (However) the market has softened due to the economic turmoil and we are hoping for an improvement in the second half. We expect significant contribution from The Chateau after its first year of operation," Buth told Business Times in an interview.

Berjaya Hills is expecting RM45 million to RM55 million in revenue this year from Colmar Tropicale, which is a French-themed resort offering 248 rooms, the Berjaya Hills Golf and Country Club and the Japanese Village.

For fiscal year ended April 30 2008, the company posted RM40 million in revenue, with around 25 to 30 per cent profit margin.

The company is drawing up more attractions at Berjaya Hills. It will open a street mall this quarter, encompassing souvenir, artifact and clothing shops, and art galleries, among others.

Berjaya is also promoting its 800-people capacity convention centre at the hills, to grow its meeting, incentive, convention and exhibition business.

Buth said the aim is to increase room occupancy at Colmar Tropicale from 54 per cent currently, and sell rooms at The Chateau when it opens.

By Business Times (by Sharen Kaur)

Fall in prime London housing values slowing

KUALA LUMPUR: London’s prime housing values are still dropping but the rate of the fall is slowing, according to Savills Research.

It said buyer interest is beginning to emerge although this has not been translated into more transactions which are still significantly curtailed.

“We are by no means out of the woods yet. Further deterioration in the outlook for the economy, both nationally and internationally, along with the prospect of further widespread job losses means the short to medium term outlook for the economy has worsened,” it added.

Savills Research said, nevertheless, the rate at which capital values in central London are falling had slowed significantly in the first three months this year, suggesting that the worst of the falls might be over. Average values fell by negative 4.2% in the quarter to March 2009, half of that seen in the last quarter of 2008.

“We have not yet reached the bottom of the market but buyer registrations in the prime London markets as a whole have doubled over the past quarter but, more importantly, deals agreed this month have risen to levels not seen since March 2008.

“Deals are now settling at negative 25% to negative 30% off peak. A shortage of stock is beginning to manifest, demonstrating that falls of this magnitude are sufficient to motivate need-driven domestic buyers,” it said.

Savills Research expects prime central London housing market to cease falling by end-2009 as investor demand starts to revive against still-low levels of stock. Any growth in values, however, is likely to be suppressed until there is a return to confidence in the UK economy.

“We stand by our forecast that total falls from peak will not exceed negative 30% in prime central London and negative 25% in the prime regions,” it added.

Meanwhile, rental values across prime central London have fallen a negative 11.7% from their peak.

The corporate lettings sector continues to be worst hit with a quarterly fall of negative 6.6% in rents in the core area of Knightsbridge, Chelsea, Mayfair and Belgravia. Average rents in this area are now down negative 15.6% from their peak, according to Savills Research.

By The EDGE Malaysia

Mah Sing to extend home campaign

The Mah Sing Group will extend its Easy Home Ownership campaign by a month to April 30 to celebrate its success in winning the BrandLaureate Award 2008-2009 for "Best Brand in Property" recently.

In a statement, Mah Sing said the campaign was a hugely successful financing programme for residential and commercial properties.

Under the campaign, buyers are required to pay only five per cent for residential properties, and the rest upon completion. For commercial properties, buyers need only pay 15 per cent first.

For completed residential properties, buyers can reduce their monthly installment payments by servicing only the interest on their loan amount for the first five years.
Mah Sing Group will also absorb the legal fees for the sales and purchase agreement, loan documentation, and memorandum of transfer for selected properties, it said.

Meanwhile, the company will sustain its momentum this year and beyond by offering medium to high end residential and investment grade commercial projects.

Mah Sing Group Bhd has 16 projects in Malaysia's three growth locations -- the Klang Valley, Penang island and Johor Baru.

The company has a RM3.8 billion remaining gross development value and unbilled sales from its 230-hectare remaining land bank as at December 31, 2008.

By Bernama

Malaysia Property Inc. heads for Japan

KUALA LUMPUR: Malaysia Property Incorporated (MPI) will be heading to Tokyo with its Malaysia Property Fair 2009 to be held on April 25-26.

The event is a follow-up to MPI's successful seminar-cum-exhibition held in December last year, MPI executive director Yu Kee Su said in a statement on April 6.

MPI is a Malaysian government initiative set up to promote and brand Malaysia as an international property investment destination. Also involved is the International Real Estate Federation (Fiabci), Malaysian chapter in collaboration with the National Real Estate and Housing Developers' Association, the Malaysian Institute of Estate Agents and the private sector.

Yu added last year’s event attracted 1,000 visitors and there was also positive feedback from the 11 property development companies, which displayed their products at the two-day event.

The successful even had prompted potential Japanese investors to visit some of the developers’ projects in Malaysia. "Sales value closed, limited to those disclosed to us to date, stands at over RM4 million,” Yu said.

The roundtable meeting session with a group of institutional investors at the December event also prompted one of the parties to take a trip to Malaysia to gather more data about investing in Malaysia real estate on a large scale.

"MPI is now following-up on this potential institutional investment party to facilitate its business development arrangements with local property development companies. We are confident the interest shown by this leading Japanese institutional investor will encourage others to follow suit soon,” Yu said.

It is organising the event again with the support of the Japan Long Stay Foundation, Japan HSBC Premier Banking and Tourism Malaysia Tokyo.

This event will be in line with MPI’s policy of organising focused seminars-cum-exhibitions for a target market of serious investors in real estate outside their country of origin.

It will also enable developers to interact better with potential foreign investors. Visitors to the event can attend a two-day seminar boasting topics related to Malaysia and opportunities available in its real estate. The presenters include representatives from Tourism Malaysia Tokyo, MPI and HSBC.

“With the global economic downturn, we are targeting retirees and soon-to-be retired who are encouraged by their government to explore long term stays outside their country as a means of stretching their pension income as far as possible,” he said.

The Property Fair is one of the key events in MPI’s calendar for 2009 targeted at its Asia-Pacific market including Singapore, China and Hong Kong.

Other regions which MPI is looking into are Europe (in particular, Britain) as well as west Asia, which includes the Middle East and India.

He said the current global economic slowdown should not affect its efforts to position Malaysia as a preferred international real estate investment destination.

“We need to keep Malaysia and its real estate on the radar of international investors, more so, now or we may risk losing a strong footing to capture market interest when the market picks up again. However, during this slowdown, the marketing expenditure will be kept as lean as possible,” he said,

Limited exhibition booth space is still available and open to property developers, estate agents and MM2H agents. Registration for participation by exhibitors will close on April 10.

By The EDGE Malaysia

Paragon pushes ahead despite property slip

Carpet maker Paragon Union Bhd may have slipped on a property deal but it is still keen to invest in the business further.

The company, which makes carpets for cars, hotels and offices, had tasted success when it sold all its houses under the Paragon Heights project in Bukit Jalil, Selangor.

Its latest plan to take over a property developer for RM18 million fell through when the seller failed to meet the terms of the deal, first announced in August last year.

"When there is opportunity, we will evaluate," executive director Tan Hong Kien told reporters after a shareholders' meeting in Kuala Lumpur yesterday.

Paragon signed a deal to buy Dominon Park Sdn Bhd, which has rights to develop a piece of land in Gombak, Kuala Lumpur.

The deal was terminated on March 10 when the seller, Prestamewah Development Sdn Bhd failed to give the complete documents.

Paragon is now suing Prestamewah to recover the RM18 million.

Paragon makes most of its money from its carpet business. However, higher costs led to its 2008 net profit falling to RM135,000, which is a tenth of what it made in 2007.

Tan said the company seeks new export markets to grow as overseas sales make up 15 per cent of revenue. It now exports to South Korea, Australia, India, Singapore, Brunei and Thailand.

"Locally, the commercial sector is a very big market for us such as hotels and offices. We also supply carpets to royal palaces," Tan said after the company's 45-minute extraordinary general meeting in KL yesterday.

In Malaysia, commercial properties make up about 60 per cent of Paragon's carpet sales, while the rest is from the automotive sector.

It supplies carpet to carmakers like Perodua, Mercedes, Honda and Nissan.

Shares of Paragon closed 15.4 per cent or 6 sen lower, to 33 sen yesterday.

By Business Times (by Hamisah Hamid)

HLG maintains hold on IJM Land

IJM Land Bhd is the latest property firm to offer an easy payment scheme for its customers under the My Space Plan.

With 16 projects on offer and an expected RM875 million in new launches in FY2010, HLG Research is confident that IJM Land will be able to achieve its RM250 million new sales target from the campaign.

The recent soft launch of Summer Place in Penang alone has garnered around RM60 million in bookings, said HLG, adding that it expected fourth-quarter (4Q09) earnings to be slightly lower compared to 3Q09, due to higher interest expense as a consequence of higher debt levels to repay inter-company loans and persisting low margins.

“Overall, FY09 results are not reflective of the enlarged entity going forward, as we believe kitchen sinking and one-off items like merger costs, rebranding costs and debt restructuring costs, will not recur.”

Some 2,700 acres of land under the Canal City project had been alienated to the JV company Canal City Construction Sdn Bhd, and the renegotiation on the flood mitigation project will have minimal impact on IJM Land.

HLG also said it expected the Canal City renegotiation to have minimal impact.

The research house has not imputed potential earnings from Canal City in its forecasts due to its long dated gestation and lack of a concrete masterplan.

HLG reaffirmed its hold call on IJM Land at 83.5 sen, with sum of the parts valuation derived price target of 89 sen per share imputing RM17.7 billion in future property launches.

It said FY09 results are expected to be disappointing, although not reflective of IJM Land’s long-term potential.

FY10 earnings are backed by RM800 million of unbilled sales and the expected RM875 million new launches. IJM Land’s high net gearing level of 0.6 times (0.4 times excluding redeemable convertible unsecured loan stocks), constrained IJM Land’s potential to grow its landbank during the current slowdown, said HLG.

IJM Land added six sen to 89.5 sen yesterday.

By The EDGE Malaysia

High-end property market may stabilise next year

The value of high-end properties, which has been on the decline by five to 15 per cent as a result of the current economic downturn, may stabilise when the economy recovers, according to an industry player.

"High-end properties will start to correct by next year, when the economic conditions recover. We expect it to be either stable or flat. It won't be down anymore but will slowly go up again," said Ho Chin Soon of Ho Chin Soon Research Sdn Bhd.

He said despite the current situation, some high-end properties were still able to command good prices, citing those in the KLCC area which went up by more than 15 per cent.

Ho said though the overall demand for the high-end properties has declined, the situation will correct itself over time.

"A lot of developers are holding back their launches, so there will be less supply and after some time, the demand and supply situation will correct itself," he said.

According to Ho, the developers will usually change their layouts during an economic downturn to offer more lower-end properties to keep their operations going.

As a result, the demand for low-cost and middle-cost properties has remained stable despite the current economic conditions, he said.

Ho also said that the recent interest rate cut by Bank Negara Malaysia was expected to boost demand for properties, especially for lower-end properties.

"During conditions like this, some developers will change their layout to more lower-end properties. When the condition stabilises, they will change back to high-end to meet the demand for such properties," he said.

For lower-end properties, Ho said: "From October last year until last month, we saw no downside. Asking prices are still very strong."

By Bernama

June launch for Bluwater's RM3b Sri Kembangan project

BOUTIQUE property developer Bluwater Developments Bhd will launch the first phase of its RM3 billion residential project in Seri Kembangan, Selangor, in June, offering 18 bungalow lots worth a combined RM25 million, or RM150 per sq ft, for sale.

The bungalow lots, dubbed "Bluhaven", are part of the upscale Bluwater Estate, which sprawls over 100ha and will be developed over eight years by phases.

And depending on market demand, it will launch a few lakeside villas, priced from RM800,000 to about RM1 million each, in the second half of this year.

Bluwater Developments is a unit of Clearwater Group, controlled by Dian Lee Cheng Ling, eldest daughter of property tycoon Tan Sri Lee Kim Yew.

Dian Lee, who is Bluwater Developments managing director, said she believes in Bluwater Estate's product offering, which is planned and designed by award-winning architect Sim Boon Yang of Eco-id Architects.

In addition to bungalow lots and villas, the estate will have semi-detached homes and condominiums. Some 1,000 households will live there after its completion.

The company is targeting to sell the properties to buyers in Europe and Asia Pacific, including Malaysia.

"The market sentiment has weakened due to turmoil. There are, however, astute investors who continue to look for good quality and priced properties thus, we do see sales in our projects, albeit at a slower pace," Dian Lee told Business Times in Seri Kembangan recently, after inking a deal with GD Baby Programme (S) Pte Ltd for rights to distribute Glenn Doman learning tools in Malaysia.

She believes there is possibility of some form of recovery in the second half of 2009 as trillions of dollars are being pumped into global economies in the form of fiscal stimulus.

"There is a chance that recovery would be sooner. The stock market will probably lead the recovery, followed by the property markets," she added.

Glenn Doman Baby Malaysia Sdn Bhd, the lifestyle arm of Clearwater, will provide the learning kits and programmes for normal and brain injured babies and toddlers up to age six.

By Business Times (by Sharen Kaur)

The hammer fails to fall again?

The auction of Putra Place, which houses The Mall, The Legend Hotel and an office tower, is likely be put off for the third time

A group of banks may have to wait a tad longer to recover their money as the auction of a prominent commercial property in Kuala Lumpur would likely be put off for the third time.

Putra Place, which houses The Mall, The Legend Hotel and an office tower, was meant to go under the hammer on April 16.

But this was disrupted after property owner Metroplex Holdings Sdn Bhd got a restraining order against any action by its creditors, which in effect put a stop to the auction. The restraining order, obtained without the knowledge of the lenders, was set aside last Friday.

"They filed for and obtained the restraining order without serving our clients first. Based on these grounds, the judge has set aside the order," said Alan Gomez, counsel for Commerce International Merchant Bankers Bhd (CIMB).

CIMB and RHB Investment Bank Bhd are agents to the group of banks that gave a loan to Metroplex.

Putra Place is located opposite the Putra World Trade Centre in downtown Kuala Lumpur.

The Mall is a shopping complex with eight floors, the office tower covers the 10th floor to the 33rd floor, while the 25-storey Legend Hotel includes serviced apartments and penthouses.

The freehold property was first put up for auction in April 2008. The reserve price then was RM705 million. Since no bids were received, the price was cut by a tenth to RM634.5 million.

Its second date with the hammer was on January 20 2009, but this was postponed to capture a wider net of bidders.

Due to the size of the sale, the judge decided in January that one advertisement was not enough and more notices were needed locally and abroad. This covered Canada, Los Angeles (the US), Indonesia, Hong Kong, Taiwan, Japan and Singapore.

But Metroplex on January 22 2009 got the restraining order, and the notices, which were supposed to be put up twice before April 16, did not appear.

"Because of the order, we were unable to advertise. We will be meeting our clients to seek their instructions towards the sale and a new auction date is likely to be fixed," Gomez said.

By Business Times (by Vasantha Ganesan)

Bluwater project is learwater's second niche evelopment

The RM3 billion Bluwater Estate residential project in Seri Kembangan, Selangor, is the second niche development by local property developer Clearwater Group.

The group's flagship project is Clearwater Residence, a RM150 million boutique condominium in Damansara Heights, Kuala Lumpur, which is slated for completion by the end of this year.

More than 80 per cent of the condominium units, priced from RM900,000 each, have been sold since its launch a year ago, said founder and managing director Dian Lee Cheng Ling, eldest daughter of property tycoon Tan Sri Lee Kim Yew.

In expanding the group's business, Wisma Antah, a nine-storey office block adjacent to Clearwater Residence, was acquired from Antah Holdings Bhd for RM18 million, four years ago. The building will be refurbished and renamed WORK@Clearwater.

Clearwater also has 0.7ha of prime land in the upscale Bukit Tunku area in Kuala Lumpur, where it intends to build super luxury villas, worth over RM20 million each.

"We are waiting for approval to build the villas. Clearwater is expanding its lifestyle division, but property development will remain its core business," Dian Lee told Business Times.

The Bluwater Estate was previously known as the Mines Southlake, which was being developed by Mines Resort Bhd (MRB), the privately-held company of the elder Lee.

As he was scaling back his privately held local property development activities, Clearwater approached him to buy over MRB (now known as Bluwater Developments Bhd), which also owns The Heritage, for around RM350 million in mid-2008.

The Heritage features 842 condominium units in five 18-storey blocks, an eight-storey office building, and the two-level Heritage Village, which offers 120,000 sq ft of retail space.

"My father made a decision to relinquish some of his duties and responsibilities last year to focus more on his passion of charitable works and building his Mines Golf City. We saw the Mines Southlake as a dream project and took over from him. The company and the development were rebranded," Dian Lee said.

By Business Times

High-end property value may stabilise in 2009

The value of high-end properties, which has been on the decline by five to 15 per cent as a result of the economic downturn, may stabilise when the economy recovers, according to an industry player.

"High-end properties will start to correct by next year, when the economic conditions recover. We expect it to be either stable or flat. It won't be down anymore but slowly go up again," said Ho Chin Soon of Ho Chin Soon Research Sdn Bhd.

He said despite the current situation, some high-end properties were still able to command good prices, citing those in the KLCC area which went up by more than 15 per cent.

Ho said though the overall demand for the high-end properties has declined, the situation will correct itself over time.

"A lot of developers are holding back their launches, so there will be less supply and after some time, the demand and supply situation will correct itself," he said.

According to Ho, the developers will usually change their layout during an economic downturn to offer more lower-end properties to keep their operations going.

As a result, the demand for low-cost and middle-cost properties has remained stable despite the economic conditions, he said.

Ho also said that the recent interest rate cut by Bank Negara Malaysia was expected to boost demand for properties, especially for lower-end properties.

For lower-end properties, Ho said: "From October last year until last month, we saw no downside. Asking prices are still very strong."

By Bernama

Plenty of land for development with Country Heights

AMID the current economic uncertainty, Country Heights Holdings Bhd is not targeting any aggressive launches this year, as it is focusing on selling its existing and completed properties. However, the company will stay flexible with its plans to adapt to the current volatile external environment.

“No point launching (projects), if you can’t sell above 60% (of the units)... it will only restrain your cash flow.

“We have set out different targets for different scenarios, so in case the market hits a downturn, we can react promptly. If the US recovers, the sentiment can change very fast...,” says Mark Rozario, the group’s managing director in an interview with StarBizWeek.

He says Country Heights has plenty of land available for development in most of its existing projects, as the company typically retains close to 20% of its completed units for investment purposes.

For example, for its projects Country Heights Kajang and Cyber Heights Villas, it kept 100 units of the 500 villas for each project. These units are not pledged to the banks.

In addition, the company retains about one million sq ft of bungalow vacant lot in Country Heights Kajang. He says that the values of these vacant lots have appreciated to RM70 from RM6 per sq ft since it was first launched.

Very soon, Country Heights will offer bungalow lot landowners in the College Heights development in Pajam, Negeri Sembilan a special package to help them build their dream home which includes building to obtaining the certificate of fitness.

There will be five types of designs for landowners to choose from. However, for the package to work and to allow contractors to build the homes at a 30% discount, it needs to have at least 30 units of bungalow.

The average costs of constructing a bungalow with this package is between RM300,000 and RM400,000 or RM130 per sq ft.

According to Mark, Country Heights gearing ratio is less than 0.5 times, which he considers as “comfortable” based on the industry standard. In addition, he says the group’s assets are undervalued as most of them are carried in the books at historical prices which has since appreciated significantly.

On the property market outlook, he says the domestic market has not been too badly affected; some potential buyers are merely holding back on committing to big item purchases for the time being until market sentiments recover.

“A lot of this is related to confidence and the situation may recover fairly quickly.”

Banking on other drivers

Over the medium-term, he says the group’s main growth driver will be its hospitality, leisure and health division as well as the property investment divisions.

“We will expand our healthcare business (prevention sector) aggressively, as this sector is recession proof,” he says.

Towards this end, the company will expand its healthcare screening facility at Palace of The Golden Horses to 22,000 sq ft which is expected to be completed in three months.

“We have also just launched a traditional Chinese medicine centre at the Palace Beach and Spa few months ago,” he says.

So far, Country Heights’ healthcare division has about 12,000 memberships, all of them from the Klang Valley. Going forward, the company plans to extend its memberships overseas as well as include a wider demographic such as senior citizen, children and expatriate.

The company has another healthcare screening facility at Plaza Mont’Kiara.

He says the other growth driver for the company is the property investment division, particularly the Mines International Exhibition and Convention Centre (MIECC). The company has plans to install more exhibitions events.

However, for the long term, Country Heights core activity and earnings driver will still very much be property development.

This year, Country Heights expects to chalk up an annual revenue of RM200mil and capital expenditure of RM30mil.

Launches ahead

Country Heights’ rainforest development in Sarawak, the Borneo Highlands Resort, will launch 18 super-luxury bungalow lots this year.

This project, with one super-luxury bungalow lot per golf hole would cater to the international market.

The size of bungalow lots varies from one to two acres and will be priced and sold in US dollars. (The indicative price is US$4mil-US$5mil per lot.)

During the launch of Phase 1 to 3 of the smaller bungalow lots last year, Country Heights managed to sell 80 out of 103 lots.

Recently, it launched 46 lots of Phase 4 bungalows.

“There is huge potential for international market. No where in the world is there this kind of (rainforest development) environment. We didn’t cut down the trees, the golf course is built on the original terrain.”

Currently Borneo Highlands Resort’s existing landowners have already built about 30 bungalows. This development covers 5,000 acres of land but the company will only develop 1,000 acres for now.

As for the Country Heights Damansara project, after seeing only a handful of landowners building their dream homes there a few years ago, the numbers have slowly grown to 30 households today and by the end of this year, new homes are estimated to reach 100 units.

Mark expects over 200 homes to be built in the next three years. Country Heights launched a “build and sell” concept for ten of its vacant lands to encourage more landowners to build their bungalows.

“It helped a lot and things (sales of vacant lots and construction of new bungalows by landowners) can go quickly as well,” he said.

To date, it has completed six units of bungalow and sold four of them. Four other bungalows are still under construction.

Out of the 380 bungalow lots, it has sold 280 lots. That leaves another 60 lots available for sales, as the company will keep the remaining 40 lots.

Apart from that, Country Heights has also allocated 23 acres of land for cluster bungalow and 6 acres of land for the condominium development.

By The Star

Tweaking product offerings

Developers may have to resort to more affordable properties

AFFORDABILITY is the key word these days. Developers have no choice but to review and tweak their product offerings, particularly those in the high-end price range.

Buying interest for property has been dampened by the economic downturn. The property market has yet to show signs of bottoming out and the adverse impact of the prolonged global financial turmoil on the people’s sentiment and confidence will take a while to recover.

Amid the global financial meltdown, interest in the property market continues to wane as reflected by the contraction in residential and non-residential property loan approvals in January.

Further contractions are expected in the months ahead following a sharp fall in property sales these last few months. The high unsold property stock further aggravates the situation.

Rather than being stuck with poor take-up of their high-end products, developers are opting for lower margin products. As can be seen in newspaper advertisements these days, most of the projects launched are of the affordable range.

Even big time developers like SP Setia Bhd and Mah Sing Group Bhd have made adjustments to their product lines and resorted to more affordable products with scaled down built-up space.

Following aggressive sales campaigns by developers early this year, loan approvals for residential property may recover from the second quarter although the slide in non-residential property loan approvals is expected to persist.

With the country’s gross domestic product (GDP) in the first quarter of this year expected to plunge into the negative territory after recording a nominal growth rate of 0.1% in the fourth quarter of last year, consumer sentiment is likely to remain weak, especially for big ticket items such as property.

Meanwhile, the Government’s RM60bil allocation under the second stimulus package or mini budget to stem the slide in the economy is expected to take a few months before it gets filtered down to the needy sectors, especially with the impending changes in the Cabinet line-up after the recent Umno general assembly.

To ensure the economy gets back on its recovery track and to restore the people’s confidence, it is imperative for the expedient and efficient implementation of the mini budget’s allocation for the identified sectors and projects.

With Malaysia’s manufacturing and export sectors expected to remain weak for the next few quarters following a prolonged weakness in the developed economies, especially in the US and Europe, any recovery in the local economy will have to be local consumption-driven.

Besides the service industry which has a strong local market content, the property sector also has the ability to create big spill over on the economy given its link with more than 140 other industries.

To give a lift to the staggering property market, more developers are resorting to easy financing packages for buyers of their properties and it looks like these financing schemes will be a norm for the market at least until the year-end before a recovery can be expected.

Developers are facing a “double whammy” of sorts as they can only come out with more affordable homes which have lower profit margins and yet have to offer attractive financing packages to attract buyers. These days residential products that are still selling well are double-storey terrace houses priced between RM300,000 and RM400,000.

Either it’s the 5:95 or 10:90 packages, developers have to finance the cost of a property’s construction as buyers only need to pay a downpayment of either 5% or 10% of the property price while the repayment of their loans will only commence after they receive vacant possession of their property.

If developers are not willing to “downgrade” their high-end projects, they have to either scale down the project size and build less units for now although many have opted to defer their projects for a later launch when the good times come back again.

Meanwhile, those with strong financing capability and good products in the right locations should take advantage of the build and sell system, a largely untapped market with much potential going forward.

·Deputy news editor Angie Ng believes greater proactiveness and innovative prowess are the way forward for industry players during bad and good times.

By The Star (by Angie Ng)

IJM Land joins promotion bandwagon to woo clients

IJM Land Bhd has become the latest developer to launch a promotion to woo house buyers, an indication of how the slowdown has hurt consumer spending on big-ticket items.

Rivals like SP Setia Bhd, Mah Sing Group Bhd and Sime Darby Properties have unveiled schemes that range from low down payments to a guarantee to buy back the property.

While the schemes may attract buyers, developers are also sacrificing part of their profit with such campaigns, analysts said.

IJM Land managing director Datuk Ir Soam Heng Choon said people should take advantage of low interest rates to buy property.

"We are not sure what could happen in the future. Anybody could speculate and say prices may go down further towards end of the year but no one knows for sure," he told reporters in a briefing in Kuala Lumpur yesterday.

IJM Land hopes to make RM250 million in sales from the three-month home ownership promotion called "My Space Plan" that started yesterday.

The incentives include down payment from as low as RM500, low interest rate for the 5:95 payment scheme, no interest during construction period and up to six months instalment holiday.

The programme covers all existing and new development under IJM ranging from middle- to high-end projects.

"Rather than offer a one-scheme for all, we have improvised a flexible homeownership plan according to their financial abilities," Soam said.

Depending on the economic situation, the group hopes to launch about 10 new projects this year with a total gross development value (GDV) of between RM700 million and RM750 million.

"It depends on the market. If market softens further, we might relook at the timing and hold back some of the launches," said Soam.

IJM now has 3,237ha of land with a total GDV of RM17 billion.

By Business Times (by Zurinna Raja Adam)

IJM Land eyes RM250mil sales from new home ownership plan

SUBANG JAYA: IJM Land Bhd hopes its newly launched home ownership package, My Space Plan, will rake in RM200mil to RM250mil sales in three months.

Managing director Datuk Soam Heng Choon said the new plan was applicable for the company’s existing and new property projects.

“This plan will cater to all our buyers as we want to help potential buyers or investors during these difficult times. Although some developers have already come out with their own promotion packages, our unique tailor-made home ownership plan with additional incentives will appeal to those looking to own properties,” he said yesterday after the launch of the plan.

Among the incentives under the plan are low downpayment from RM500, cash rebates up to a maximum of 10%, low interest rates for the 5:95 payment schemes and 0% interest during a project’s construction period.

Soam said the current economic situation should not deter Malaysians from purchasing their own homes. He said although the current property market was softening, he believed developers could still sell their products with the right products and good location.

This year, IJM plans to launch more than 10 new projects worth about RM750mil in Penang, the Klang Valley, Johor and Sandakan, Sabah.

“However, the launches will depend on market conditions. If the market turns softer, we will review a launch and not simply go ahead with it,” Soam said.

IJM still has about 8,000 to 9,000 acres with potential gross development value of RM17bil that would take 20 years to be developed. Currently, IJM’s property projects are located in Penang, the Klang Valley, Seremban 2, Sabah and Sarawak.

By The Star

WCT targets RM1b projects in Malaysia, Middle East

WCT Bhd, Malaysia's biggest construction and property development group, aims to secure RM1 billion worth of new projects in Malaysia and the Middle East this year.

WCT regional general manager for the Middle East Elina Abdul Aziz said the group was tendering for projects in Abu Dhabi and Oman.

The group, with RM2.6 billion order book as at December 31 2008, is now positioning itself in three major markets - Malaysia, Vietnam and Middle East.

"In spite of the slowdown in Middle East markets, there are still opportunities in countries such as Oman and Bahrain.

"Major cities such as Dubai where development has reached its height could be experiencing some slowdown," she said during the Malaysia Services Exhibition 2009 which ended in Dubai recently.

Elina said it was crucial for WCT to position itself and strengthen its foothold in the Middle East market in view of more opportunities when the economy recovers.

She said the Abu Dhabi Formula 1 circuit, one of the iconic projects in Middle East, will be the platform for WCT to expand further in the region.

"The circuit will be completed in August in time for the race in November," she said.

The project, costing 3.3 billion dirham (100 dirham = RM102.10) is reputed to be the world's most modern and finest F1 circuit, with a 50,000 spectator capacity.

WCT has also secured the 235 million dirham Yas Marina Royal Yacht Club located adjacent to the F1 circuit to host the Royal family of Abu Dhabi and VIP visitors for the Abu Dhabi F1 Grand Prix.

"We entered the Middle East construction market in 2002. The Bahrain Formula One circuit project, which we completed at a record time of 16 months, provided us the platform to penetrate into the Middle East market," she said.

WCT's current projects in the Middle East include the 1.6 billion dirham Bahrain City Centre, the country's largest leisure and entertainment hub, 43km 800 million dirham West Dukhan Highway in Qatar and infrastructure work at the New Doha International Airport.

Elina said while the economic climate and financial situation have become more challenging now due to low demand for construction projects owing to the global economic downturn, WCT is confident of weathering the economic crisis.

She said infrastructure projects are still in demand in the Middle East region though the clients may be more selective.

"The projects we are doing are not affected by the economic downturn and clients are keen to go ahead with the projects.

"The Middle East market looks promising now while in the next three years Vietnam will be an attractive market," she said.

In Vietnam, WCT is focusing on the Platinum Plaza project, set to be the country's largest leisure and entertainment centre, she said.

The project will be completed in 2014.

In Malaysia, Elina said WCT was busy with several projects - the office and commercial buildings in Putrajaya due for completion in 2010 and Paradigm Petaling Jaya Grade A offices and shopping mall, Malaysia's most modern commercial development.

The Paradigm, to be completed in 2014, has a gross development value of RM1.4 billion, she said.

Other ongoing projects in Malaysia are civil work at the Kota Kinabalu International Airport in Sabah and Bakun hydroelectric dam in Sarawak.

By Bernama

S'pore Q1 home prices plunge 14pc

SINGAPORE: Singapore's home prices plunged 14 per cent in the first quarter, the most in at least 16 years, as the global financial crisis and a recession deterred buyers.

The price index of private residential property fell to 140.3 points in the three months ended March 31 from 162.8 in the previous quarter, the Urban Redevelopment Authority said in an e-mailed statement yesterday.

That's the largest drop since the first quarter of 1993, according to the earliest data provided by the government agency.

Residential prices have retreated for three straight quarters, ending a four-year rally.

The island-state's trade ministry has forecast the economy may shrink by as much as 5 per cent this year, the largest contraction on record, amid the worsening global recession.

"Developers have already made a quantum leap in reducing prices in the first quarter and although further declines in launch prices can be expected, the incremental drop is likely to be marginal and more gradual," Tay Huey Ying, Colliers International's Singapore-based director for research and advisory, said in an e-mail. "The overall residential property price decline for 2009 is forecast to be in the region of 25 per cent to 30 per cent."

Prices for private homes in the so-called core central area dropped 15 per cent last quarter and retreated 17 per cent elsewhere in central Singapore, according to the Urban Redevelopment Authority. They fell 7.5 per cent across other parts of the island, yesterday's statement showed.

The data is based on transactions in the first 10 weeks of the quarter, the government agency said. It will provide an update in four weeks.

By Bloomberg

Country Heights in Sarawak venture

COUNTRY Heights Holdings Bhd’s 70 per cent subsidiary Borneo Heights Sdn Bhd is joining hands with Cougar Properties Sdn Bhd to construct, promote and market Borneo Highlands Resort & Golf course and eco-friendly and luxury villas in Kuching, Sarawak.

Borneo Heights, being the landowner, will procure all the necessary approvals and permits for the development of the villas while Cougar Properties has agreed to secure a minimum total sales value of US$160 million (RM584 million) for the villas.

By Business Times

IOI Prop minority shareholders still a force: MSWG

IOI Corp Bhd had on March 31 announced that it holds approximately 742.328 million ordinary shares of 50 sen each representing 91.33 per cent of the issued and paid-up capital of IOI Prop as a result of acceptances received under the voluntary takeover offer by IOI Corp.

Therefore, the public shareholding spread of IOI Prop as at March 31 has become less than 10 per cent, MSWG said in a statement.

IOI Corp does not want to maintain the listing status of IOI Prop.

MSWG said the minority shareholders who want to hold on and willing to ride along with the IOI Corp even if IOI Prop is delisted will still benefit from IOI Prop's performance in the long run.
Those who wish to remain in the unlisted entity of IOI Prop will have three consequences, MSWG said.

They will be locked in the unlisted IOI Prop with limited exit strategy for their unquoted IOI Prop shares held.

They could also be entitled to dividend payments declared by IOI Prop to IOI Corp in the future. However, it is at the board's discretion to declare dividends.

The rights of the minority shareholders in the unlisted IOI Prop will still be regulated under the Companies Act 1965.

By Bernama