MPI to attract RM20bil foreign investments

Tan Sri Nor Mohamed Yakcop hitting the gong to mark the launch of MPI. With him (from left) are Datuk Richard Fong and MPI chairman (of the board of governors) Tan Sri Thong Yaw Hong.

PETALING JAYA: Malaysia Property Inc (MPI), a joint public-private sector initiative, is aiming to attract foreign investments worth RM20bil in the domestic real estate sector over the next 10 years.

The key players in MPI are the Economic Planning Unit, International Real Estate Federation (FIABCI) Malaysian Chapter, Real Estate Housing Developers’ Association (Rehda) and the Malaysian Institute of Estate Agents (MIEA).

MPI chairman Datuk Richard Fong said a budget of RM25mil would be set aside by property players in the private sector over the next five years to promote Malaysia as the preferred property investment destination.

“The Government has in principle agreed to match this amount contributed by players in the private sector, making the total pool of funds RM50mil,” he told reporters after the official launch of MPI here yesterday.

Fong said the funds would be used for promotional activities, including property exhibitions overseas in places like Britain, Hong Kong, Singapore and the Middle East.

“We want foreign investors to know more about the competitiveness of Malaysian properties in terms of price, against countries like Singapore and Hong Kong,” he said, adding that Malaysia was likely the only country in this region that allowed foreigners to buy freehold property, besides providing them with exemption from real estate property gains tax.

“If you take a residential property in Kuala Lumpur City Centre (KLCC), the price per square foot would be around US$600, against US$2,000 in a comparable residential location in Singapore or Hong Kong,” he noted.

Fong said MPI would not only act as a platform to create greater awareness of the attractiveness of Malaysian properties as an investment destination for foreigners but also support and assist the various players in the real estate sector, including providing feedback to the Government.

In his speech at MPI’s launching, which was read by Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop, Prime Minister Datuk Seri Najib Tun Razak said the Government would continue to facilitate investments in the Malaysian real estate sector given its key role in the country’s economy.

Najib noted that last year alone, the industry contributed close to RM11bil to the economy, representing a growth of nearly 10%, compared to 2007.

MPI would give specific focus on promoting the Malaysia My Second Home programme, in addition to marketing Malaysia as the preferred destination for multinational companies to have their offices here, the premier said.

Najib, who is also Finance Minister, said the current investment environment was especially inviting, with no restrictions on domestic funding for foreign investment in local properties, in addition to further deregulation in Foreign Investment Committee guidelines.

The Government spending provided for the two stimulus package worth RM67bil would further boost investors’ confidence, he said.

By The Star

Real estate awards to highlight importance of agents’ work

The Malaysia Institute of Estate Agents (MIEA) aims to create more recognition for the real estate industry through its annual National Real Estate Annual Awards.

Julie Wong and Soma Sundram with brochures of the inaugural Malaysia Institute of Estate Agents National Real Estate Awards

MIEA immediate past president and awards chairman Soma Sundram laments that the general public never takes the industry seriously.

“People do not see the real estate agency as a serious business, like say architecture or engineering. With the awards, we hope to promote the estate agency practice,” he tells StarBizweek.

“We also hope that with this recognition, Malaysians at large will also recognise the good work of estate agents. We feel that they are not appreciated by the public at large. They think we just take people, show house and that’s it,” Soma adds.

The MIEA organised its inaugural award on June 26 to highlight the achievements of agencies and its agents in the country for their sales performances in 2008. A total of seven award categories were contested.

Only active members of the MIEA were allowed to participate.

Soma says the idea of an award to recognise the achievements of real estate players was thought of 15 years ago.

“We were actually toying with the idea of an award 15 years ago but it never took off because nobody was prepared for such a thing. At the time, nobody wanted to disclose anything about their sales performance.”

Being the first of its kind, Soma admits there will always be room for improvement in organising such an event like the National Real Estate Awards.

“We expect even greater competition next year and I’m sure even the judging standards will be raised,” he says.

This year’s inaugural awards was judged by an independent committee headed by International Real Estate Federation (FIABCI).

On another note, Soma says he is optimistic about the outlook for the local property industry despite the current global economic downturn.

“I’ve been saying this for the last six months – the local property market has not been seriously affected. We expect to see it improve by year-end.”

Newly appointed MIEA president Julie Wong shares Soma’s sentiments.

Little impact

“Affected properties are mainly those within the Golden Triangle area whereby 30% are bought by foreigners. When the economy in their own country is affected, they panic and start to sell from here.

“There is a little bit of impact within the Mont’ Kiara area because there are a lot of foreigners there too. Other than that, we have not heard of people who were desperate to sell off their commercial properties or condominiums,” she says.

Soma says the situation is also far from dire for the real estate industry.

“Those who focus on certain affected areas may have seen a slight dip in turnover but it has not gone to the point of closing shop or staff reduction for real estate agents. In fact, I’ve not heard of any of our members cutting staff.”

Wong adds that the real estate industry has become wiser since the 1997 Asian financial crisis and is more prepared to handle the current economic downturn.

By The Star (by Eugene Mahalingam)

More concerted push for FDI needed

The unprecedented hard times brought on by the global financial crisis still have some way to go before countries around the world can look forward to better days ahead.

Having succumbed to major losses in their export income, current accounts and investment values, these countries will be vying for a quicker recovery and are making efforts to shore up their “magnetism” to be among the first in line to attract more foreign direct investment (FDI) to their shores.

Hopefully Malaysia’s recent economic liberalisation measures will place the country on a more equitable footing to vie for a share of the FDI pie. Although the lifting of the 30% bumiputra equity ruling for initial public offerings and the removal of the Foreign Investment Committee’s guidelines on equity acquisitions, mergers and takeovers, would certainly give a boost to the country’s image in the international front, more public and private sector initiatives to ensure the latest government measures are clearly communicated to the global business community are necessary.

If the liberalisation measures are expediently and efficiently implemented and the new liberalised environment is encouraged to flourish, they will provide a strong foundation for Malaysia to attract more local and foreign interest to set up business operations and regional hubs.

Malaysia stands a good chance to emerge as a stronger economy and to actively partake in the emergence of a new world economic order after the tumultous weather of the global crisis.

The global financial crisis has exposed a severe weakness in the present system and there is a need for a dramatic change in the global financial regulations, particularly in the United States, Britain and other developed economies.

In the coming years, global growth will be compromised by the disappointing performance of the developed economies. The consolation is that Asia stands a chance to bounce back stronger than ever before.

Economists expect Asia’s capital markets to emerge stronger through greater integration of its markets, progressive liberalisation and supportive national regulatory frameworks.

In this regard, Malaysia is also doing its part to stay competitive and has seen major liberalisation in its financial sector in recent months, aimed at enhancing competitiveness in its financial landscape as well as increasing foreign investors’ participation in its capital market.

Singapore and Hong Kong’s stature as regional financial centres and their attractive foreign investment and tax incentives are among the factors cited for their popularity as hotspots for high net worth foreigners to set up businesses and second homes. Of course their cosmopolitan lifestyles and world-class infrastructure, especially the highly integrated, easily acessible and affordable public transport system, make people from many parts of the world feel at home.

One of the top marks given to Singapore is for the safety and orderliness of the city state. It is also recognised as one of the cleanest and greenest cities in the world.

Singapore has done very well in the real estate sector and successfully attracted many high net-worth investors to set up homes. Among the Who’s Who in the celebrity circuit that own homes in the city state include famous Hong Kong movie stars Jet Li and Jacky Chan.

Some 25% of Singapore’s property were sold to foreigners in the last few years. Malaysia’s property sales to foreigners only made up 3% of the total RM2.5bil industry sales last year.

To leverage on the Government’s liberalised measures for the property market, Malaysia should further harness its potential as a real estate investment destination by having concerted plans and programmes to attract high net worth investors to set up businesses and homes.

The initiatives by the Malaysia Property Inc (MPI), a joint public-private sector initiative officiated by Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop yesterday, is a commendable effort to promote Malaysia as an international real estate destination.

If MPI’s target to attract RM20bil in foreign real estate investment over the next 10 years can be achieved, Kuala Lumpur and Penang (the two favourite destinations for Malaysia My Second Home participants) should well be on their way to make it to the rankings of global cities. There should also be potential for the other cities to get into the radar of these foreign investors.

MPI should ramp up its overseas roadshows and programmes in the coming months to the potential markets. Its primary target markets include Singapore, Britain, Japan, Hong Kong, Indonesia and the Gulf Cooperation Council countries, while the secondary markets are China, India, Pakistan and Bangladesh. But to ensure MPI’s “seed planting” efforts bear the desired fruits, it will be necessary for Malaysia’s quality of life index, in terms of personal safety and security, and superior public transport system, to be placed as among the top agenda by the respective governing authorities and the private sector.

This will be the start of many more new initiatives needed to set the country on its path for greater visibility in the post-crisis new global economic order.

Deputy news editor Angie Ng feels that the chaos and impoverishment caused by the global financial upheavals are good reasons for the people to go back to the basics of simplicity and inculcate more humanity and kindness for each other.

By The Star (by Angie Ng)

Private home prices fall less than forecast

SINGAPORE: Singapore’s private home prices fell 4.7 per cent last quarter, less than earlier estimated, as signs the economy was emerging from recession encouraged home sales last month.

The price index of private residential property declined to 133.3 from 139.9 in the previous three months, the Urban Redevelopment Authority said in a statement on its website yesterday.

The agency had forecast on July 1 that prices dropped 5.9 per cent.

By Bloomberg

RM4.77b GDV for Taman Sari waterfront city project

The first phase of an ambitious Taman Sari waterfront city project at the former Pekeliling flats area in Kuala Lumpur is expected to generate RM4.77 billion in gross development value (GDV), its owner said.

The owner, Asie Sdn Bhd, expects to spend nearly RM1.5 billion to develop the phase, which will include a centrepiece 60-storey revolving tower costing RM1.1 billion.

Asie chairman Datuk Khalil Akasah said works on the first four parcels sprawling 3.24ha should start in early September, with the entire first phase expected to be completed in 48 months.

The whole project itself, encompassing 24 parcels on 23.08ha at the intersection of Jalan Pahang and Jalan Tun Razak, should be fully developed in seven to 10 years.

"We will work on parcel K first. After six months, parcels X and L will be simultaneously launched. The following six months, we will launch parcel M, which will boast the 60-storey revolving tower.

"Each parcel should take about 36 months to complete," Khalil told reporters after signing an agreement with Thailand's CH Prosper Co Ltd in Kuala Lumpur yesterday.

Prior to this, Asie has tied up with another Thai firm, Saha Regal Best Co Ltd, to provide some funds for the project.

The latter will also own a 20 per cent share in the joint-venture company, Taman Sari Development Corp, which was set up to develop the project.

Other Thai investors in the project include Virginia Corp and Islamic Bank of Thailand.

A RM417 million loan has been secured from Bank Pembangunan Malaysia Bhd, while some other fundings came from the sale of condominium units under parcel K, Khalil said.

"We have sold 30 per cent of the 178 units of condominiums under parcel K," he added.

Asie won a 99-year concession about 10 years ago to redevelop the one-room Pekeliling flats area built in the 1970s. In return, it will provide new houses for the affected owners at new locations.

The company had so far built about 3,000 units, or 40 per cent of the total houses required, costing RM150 million.

Parcel M with the unique tower, will be built on the banks of the Gombak River. Other parcels within the Taman Sari project will include hotels, condominiums, office and commercial blocks, government and public housing and a medical centre.

Asie is controlled by Khalil, who was an aide to the late Tun Abdul Razak Hussein, Malaysia's second prime minister.

By Business Times (by Zuraimi Abdullah)

Malaysia Property Inc targets RM20b sales in 10 years

PETALING JAYA: Malaysia Property Incorporated (MPI), a private sector-government initiative to attract foreign direct investments into the local property market, targets RM20 billion in total sales of local real estate in the next 10 years.

"In 2008, foreigners purchased RM200 million worth of properties in the country. Our objective of RM20 billion, or RM2 billion a year, is quite significant," MPI chairman Datuk Richard Fong said on July 24.

"Every year, we sell about 120,000 new houses and only 2.5% are foreign purchasers. Singapore, on the other hand, sells about 22% of its properties per year to foreigners," he said after the official launch of MPI. Target markets include the UK, Middle East, India, Bangladesh, Pakistan, Japan, Korea, Hong Kong, Singapore and Indonesia.

Fong says there is a general misconception among foreigners about investing in Malaysia.

"In fact, we have more friendly property laws compared to some other countries in Southeast Asia," he adds. For example, foreigners can only purchase condominium units in Singapore, not landed properties.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop, who officiated the launch, said 77% of foreign visitors to Malaysia were keen to buy properties in Malaysia, and out of this percentage, 60% were interested to buy their second property here.

Speaking to reporters after the launch, he said there was a significant global liquidity currently in search of investments despite the global economy crisis.

"We should leverage on Malaysia's natural linkages to countries such as China and Singapore, offer quality and value-for-money properties. We want Malaysia to be the preferred destination for foreigners to work, live and play," he adds.

He cited high-rise residential properties in Kuala Lumpur city centre selling at an average US$600 psf to be modest compared to prices in countries such as Hong Kong and Singapore where similar properties are at an average US$2,000 psf.

MPI, a non-profit company wholly owned and funded by the government, was allocated a RM25 million starting grant. While MPI is still at its infancy, Fong said the private sector planned to match the government's grant. Since MPI started operations in December 2008, it had held road shows and exhibitions in Japan, Singapore and the UK.

By The EDGE Malaysia (by Rosalynn Poh)

'Make Malaysia a choice property destination'

PRIME Minister Datuk Seri Najib TunRazak has urged property players to give more emphasis to the identity, function and sustainability of their projects to make Malaysia a preferred destination for real estate.

He said the reputation of local properties for quality should be reinforced through promoting a Malaysian identity.

"We should not have a skyline which is indistinguishable from any other city in the world," he said at the official launch of the Malaysia Property Incorporated (MPI) in Kuala Lumpur today.

"We are proud that our iconic buildings like the Petronas Twin Towers and Menara Dayabumi have Malaysian and Asian aesthetics," he said in his speech which was read by Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop.

Najib said Malaysian properties should be truly functional to meet the needs of its users while understanding and taking into account, local factors such as weather and the culture.

"A focus on function means that a property should not be just a physical structure of brick and mortar but one which truly supports the activities and lifestyle of its users.

"At the same time, it must be well integrated into the surrounding community," he added.

When it comes to sustainability, he said the government was focused on promoting the use of green technology, which also includes encouraging the development of energy efficient buildings.

By Bernama

Sunrise wins 2 Asia Pacific Property Awards

Sunrise Berhad’s Executive Deputy Chairman, Datuk Allan Lim (centre) and AGM Development, Raymond Cheah accepting the first of two 5-star awards bestowed onto two Sunrise condominiums.

KUALA LUMPUR: Sunrise Bhd's two condominiums won two "5-Star" awards in the recent Asia Pacific Property Awards 2009 held in Singapore.

The company said on July 24 that 10 Mont'Kiara won in the category for "Best High Rise Architecture in Malaysia" and 11 Mont'Kiara for "Best High Rise Development in Malaysia".

A '5-Star' rating reflects the top honour in each category. The awards were presented at at the Marina Mandarin, Singapore on July 16. The awards were held in association with CNBC Arabia Television.

Sunrise assistant general manager for development, Raymond Cheah said: "We are ecstatic to have been awarded the highest honour in such a prestigious competition."

"The results bear testament to the passion we put into what we do and our promise to deliver our best to exceed customers' expectations', he added.

Cheah said the awards would encourage the company to come out with more innovative ideas to deliver new experiences, where product quality, state-of-the-art designs and service excellence are the key differentiators.

The bungalow-in-the-sky twin-tower 10 Mont'Kiara has 332 units with sizes ranging from 3,478 sq ft to 4,090 sq ft and sprawling penthouse units of over 7,500 sq ft.

The iconic Green Mark certified 11 Mont'Kiara presents five uniquely sculptured curvilinear towers with 339 units, each enjoying a grand 270º view. With one or two private abodes per floor, unit sizes start from 2,700 sq ft with a choice of eight unique designs.

Limited units in both condominiums, located next to each other at Jalan Kiara 1, are available for sale, it added.

By The EDGE Malaysia (by Joseph Chin)

Al-Hadharah Boustead REIT profit at RM16.6m

KUALA LUMPUR: Al-Hadharah Boustead Real Estate Investment Trust (REIT) recorded a net profit of RM16.57mil for the second quarter ended June 30, an increase of 1.5% from RM16.33mil in the previous corresponding period, boosted by a gain of RM6.5mil on the compulsory acquisition of investment property by the Government.

Revenue rose 1.7% to RM17.8mil for the second quarter from RM17.5mil previously.

For the six months to June 30, the group posted a slightly higher net profit of RM36.81mil against RM33.65mil before.

Total revenue, however, was lower at RM33.61mil compared with RM36.3mil in the same period last year.

In a statement, the company attributed the decline in revenue to lower performance-based rental which was a result of lower crude palm oil prices.

The unit price of the fund for the quarter gained 13 sen to close to RM1.17 as at June 30 from RM1.04 recorded on March 31.

As at July 22, the unit price was at RM1.23.

The fund will distribute a dividend of 3.69 sen to unitholders, to be paid on Aug 28.

By The Star

Quill Capita Trust reports 19.8pc rise in net profit

QUILL Capita Trust, a commercial real estate investment trust, reported a 19.8 per cent increase in net profit for the second quarter ended June 30 2009, with income contribution from 10 assets compared with 9 previously.

It posted RM8.09 milion in net profit for the quarter from RM6.75 million a year ago.

Revenue rose 21.1 per cent to RM16.67 million from RM13.69 million in the second quarter of 2008.

QCT will distribute 3.78 sen per unit for the six months period, up 12.5 per cent from last year.

By Business Times

Malay builders seek research grant

The Malay Contractors Association is seeking a nationwide grant for research to make the industry more competitive.

Its president Senator Datuk Roslan Awang Chik has proposed that each state receives between RM500,000 and RM1 million for administrative purposes.

The administration of the contractors will depend on the income generated from the projects received.

"If a grant is given, it would be used for administrative purposes. This way our focus won't be so much on seeking and waiting for projects, but more on looking for ideas for the betterment of the industry," he said after launching the association's 33rd annual general meeting in Kuala Terengganu yesterday.

Also present was the state's association president and Kuala Nerus Member of Parliament, Datuk Mohd Nasir Ibrahim Fikri.

Roslan said the country needs a new breed of contractors who are knowledgeable in several aspects, including management, administration and building techniques.

This is vital in line with the changes in the industry, such as the emergence of new technologies and higher costs of building materials.

"We need contractors who thirst for knowledge and not sit just around waiting for government contracts," Roslan said.

However, he added, not many contractors want to learn new things from the Internet and seminars and lack of information can lead to emotion-based decisions.

By Business Times (by Sean Augustin)

Tabung Haji said to be buyer of Naza building

Tabung Haji is believed to be the buyer of a multi-storey tower in the heart of Kuala Lumpur that will be built by Naza TTDI Sdn Bhd.

A source said that Tabung Haji had purchased the 30-storey building, located at the RM4.1 billion integrated upmarket commercial and residential property project known as Platinum Park.

It would be the second property in the project that Naza TTDI has sold, after last year's RM640.7 million deal with plantation group Felda for a 50-storey tower.

"I don't know whether Tabung Haji will move its headquarters to the new building or whether it bought for investment purposes," the source told Business Times. Tabung Haji has declined to comment.

In an interview with Business Times recently, Naza TTDI group managing director SM Faliq SM Nasamuddin said that a 30-storey building had been sold to a government-linked company. He did not reveal the buyer.

"This tower together with two other towers is scheduled for completion within five years," the source said.

Naza Group of Companies joint executive chairman SM Nasarudin SM Nasimuddin, when met at a function in Kuala Lumpur yesterday, declined to reveal the buyer of the third tower at Platinum Park.

"It has already been sold, but I am not about to reveal who the buyer is," he said after witnessing the signing of an agreement between Naza Group and Well Spring Inc in Kuala Lumpur.

Naza has been given a master licence by the US-based company to operate "Tutti Frutti" frozen yogurt outlets in the country.

Work has started on the Felda building as well as the 50-storey building which will house Naza Group's headquarters.

Platinum Park, developed by Naza TTDI, is in the vicinity of the Petronas Twin Towers and the Suria KLCC shopping centre.

It is set to be the single largest luxury project undertaken by a Bumiputera company in the heart of Kuala Lumpur.

There will be seven buildings at Platinum Park.

Naza TTDI is the property arm of the Naza group. Founded by the late Tan Sri Nasimuddin SM Amin, the group was better known as a motoring company before it bought over TTDI from Danaharta in 2004.

By Business Times (by Kamarul Yunus)

Bina Goodyear confident of bagging new jobs ahead

CONSTRUCTION company Bina Goodyear Bhd expects to win two contracts, worth as much as RM800 million in total, within the next six months.

The company, which reported RM15 million net loss in the nine months to March 31 2009, is optimistic of returning to profitability next year, helped by lower material prices.

"We believe prices of most things have stabilised. It may go up by 5-10 per cent. But once it stabilises, it's easier for us to move on," senior general manager Lawrence Lau told reporters after the company's extraordinary general meeting (EGM) in Subang, Selangor, yesterday.

Bina Goodyear currently has orders of about RM750 million, which will keep it busy for the next six to nine months.
"Most of the jobs will be completing soon. In our business, each job usually takes about 24 months," Lau said.

During the EGM, shareholders approved the company's plans to sell a piece of land in Bandar Sri Damansara, Selangor, for RM27 million.

The sale is to fund working capital and cut debt. The company has some RM100 million in borrowings.

However, it said it was not too concerned over its borrowings.

"Most of our borrowings, more than 50 per cent, are borrowings for construction jobs. This means we will be able to settle the loans as soon as the project is completed," said Lau.

The company has no plans as yet to venture outside the country.

By Business Times (by Goh Thean Eu)

Bina Goodyear to use RM9m of land sale proceeds to reduce debt

SHAH ALAM: Bina Goodyear Bhd will use about RM9mil of the RM27mil to be raised from the sale of its 8.6-acre land in Bandar Sri Damansara to part-pay borrowings which stand at about RM100mil currently.

Senior general manager Lawrence Lau said the land disposal and cancellation of its proposed development project were part of the company’s plan to consolidate its non-income-generating assets.

“We believe the market is not good enough for the kind of development we were looking at. At such a time it could be a bit tough to have good take-up rate,” he said after the company EGM yesterday.

Shareholders yesterday approved the proposed sale to Green Heights Developments Sdn Bhd for RM27mil.

Bina Goodyear had earlier proposed a residential development comprising three bungalows with a sales value of RM2mil to RM2.5mil each, and 46 semi-detached bungalows at RM1.3mil to RM1.6mil each.

Due to the softening property market, Lau believed it was pointless to proceed with the project only to hold on to it later on.

“We believe the proceeds from the land sale can be more efficiently utilised,” Lau said, noting that the proposed disposal was expected to be completed by the third quarter of this year.

Of the proceeds, about RM16.5mil will be used for working capital.

Shareholders’ approval for the proposed development had also lapsed some time ago, said Lau.

Meanwhile, the group was optimistic of returning to the black in the financial year ending June 30, 2010.

“We believe prices of raw materials will stabilise and this will be the major basis for our turnaround,” said Lau.

To date, its order book of on-going local construction jobs is valued at RM750mil, of which 40% to 50% has been completed.

This will keep the group busy for another six to nine months.

“We expect to secure one or two projects, mainly construction jobs, within the next six months,” Lau said, adding that the group was bidding for jobs worth RM50mil to RM300mil.

Bina Goodyear posted a net loss of RM4.7mil on revenue of RM91.3mil for the third quarter ended March 31.

By The Star

Taiwan aims to build mega resort-casino

TAIPEI: Officials in an outlying Taiwan archipelago said yesterday they would build a massive resort-casino with investment of at least US$910 million (US$1 = RM3.55) if local voters approve a gambling referendum as early as next month.

The Penghu County government has proposed its casino resort on 130 coastal hectares with hotels, duty-free shops, a convention centre and a golf course, said Liu Mei-fan with the county’s tourism bureau, which would concession out the land.

By Reuters

Axis REIT on expansion trail to buy more properties

KUALA LUMPUR: Axis Real Estate Investment Trust (Axis REIT), which posted its best second-quarter results since listing, is on an aggressive expansion plan to inject more properties into the trust this year.

Net property income for its second quarter ended June 30 was up 15%, or RM12.54mil, compared with RM9.59mil in the previous corresponding period.

Stewart LaBrooy, chief executive officer-cum-executive director of Axis REIT Managers Bhd, which manages Axis REIT, said conditions were now “right” for selective acquisitions of properties in prime locations to be placed into the REIT.

“Up until October last year, we were conservative in our acquisition plans but conditions have improved significantly, which is why we are back on the acquisition trail,” he said at a briefing on the company’s results yesterday.


LaBrooy said with the FTSE Bursa Malaysia KLCI closing at an 11-month high of 1,110 points and the narrowing of the discount between market price and the net asset value of Axis REIT units, it was timely for a placement exercise to raise capital for property acquisition.

As at June 30, Axis REIT had 19 properties under its stable with assets under management worth about RM728mil and approved fund size of 255.9 million units.

“The placement of 51,180,200 new units is slated for this third quarter. We hope to raise a minimum of RM75mil, assuming Axis REIT’s share price at the time of placement is at least RM1.55,” LaBrooy said.

The REIT’s latest proposed acquisition is Axis Steel Centre, an industrial complex in Klang, Selangor, for RM65mil cash.

“It’s our second property purchased from a related party at a favourable discount to market price and it can accommodate more rental space, if renovated,” LaBrooy said.

He said Axis REIT had the option to acquire assets from the market or promoters, depending on the price and market condition.

“Who we buy the property from does not matter as long as the purchase is in the interest of our shareholders,” he noted.

On the target number of properties to be injected into the trust this year, LaBrooy said it depended on the funds raised.

Axis REIT Managers director Stephen Tew said on the promoters’ side, there could be three or four properties if funds were available to purchase them.

On the company’s good performance in tough times, Axis REIT Managers general manager (assets & lease management) David Abound said besides solid management and selection of assets purchase, the quality of clients as well as rental to a group of diverse sectors helped cushion the trust from any major fallout in payment from one sector.

Axis REIT’s unaudited gearing was 33.09% or RM242.5mil of its total asset value as at June 30.

By The Star

Axis REIT again on the prowl

Axis Real Estate Investment Trust, which has just agreed to buy its first property this year, is in talks for another four buildings worth RM220 million.

They include logistic warehouses in Johor, Puchong and Petaling Jaya, said Stewart LaBrooy, chief executive officer of Axis REIT Managers Bhd, which manages the property trust.

Axis REIT plans to sell the maximum number of new units it can to private investors for the acquisitions since its debt-to-assets ratio is already close to the 50 per cent limit under the rules, leaving it little room to gear up further.

A REIT is only allowed to sell up to a fifth of its current units according to Securities Commission rules, LaBrooy said, which means that it may be able to raise about RM75 million from the private placement.

Axis REIT's unit price has risen 51 per cent this year to RM1.69 on Bursa Malaysia yesterday, outpacing the 29 per cent gain in the benchmark FTSE Bursa Malaysia KLCI.
"There could be a window of opportunity to place out new units in the third and fourth quarters this year," LaBrooy said during a media briefing in Kuala Lumpur yesterday.

"We had deferred the private placement earlier because we just couldn't do it when there was a huge disparity between the unit price and our net asset value. Now, it has narrowed," he added.

Axis REIT owns RM728 million of assets in Malaysia, ranging from offices and warehouses to logistic centres.

The property trust is back on the acquisition trail this week with the planned purchase of the RM65 million Axis Steel Centre in North Port, Klang, reflecting a marked change from the management's gloomy outlook early in the year.

The purchase is expected to bring its debt-to-assets ratio up to 38 per cent while adding 1.28 sen earnings per unit in the next financial year.

In addition, there are five more properties being groomed by its private equity fund, the bulk of which may be ready to be sold into the REIT next year, LaBrooy said.

"Six months ago, we thought we couldn't raise fresh money this year to buy assets. But things just happened suddenly and people are now talking about the green shoot.

"The bankers' strong support to our refinancing took us by surprise and our unit price has greatly improved as mutual funds like Amanah Saham are snapping up our units like crazy."

By Business Times (by Chong Pooi Koon)

Sime Darby Property invests RM15mil to enhance security

PETALING JAYA: Sime Darby Property Bhd wants to change the concept of developing properties by putting safety and security as the top criteria to gain buyers’ confidence.

From left: Home Affairs Minister Datuk Seri Hishammuddin Tun Hussein, Deputy IGP Tan Sri Ismail Omar and Datuk Seri Ahmad Zubir Murshid viewing the closed circuit TV surveillance system after the launch of the Safe City Initiative on Tuesday

President and group chief executive Datuk Seri Ahmad Zubir Murshid said the group had so far invested about RM15mil to enhance the security and safety at its existing townships and would extend the concept to its other new township developments.

“Ara Damansara township will be the role model for this concept of security and safety and we plan to introduce this concept in our future developments,” he said yesterday at the launch of the Safe City Initiative and the launch of Ara Damansara police station.

Zubir said the group had invested about RM4mil alone for security and safety measures in Ara Damansara that included building the new police station, closed circuit television surveillance system, manned guard houses at each entry point and three cars for the police to do patrolling.

He added that in responding to the Government’s call to create a safer living environment for its citizens, Sime Darby Property was making an effort to transform Ara Damansara into one of the safest townships in the country.

On the group’s business performance this year, Zubir said it might not be as good as last year’s performance.

“Last year, the (high) price of crude palm oil (CPO) contributed strongly to the group. Nevertheless, this year, our other divisions will offset the low CPO price to achieve our expectation for this year,” he said.

On the group’s venture in Weifang prefecture in China, he said a team had been sent to do a study before drawing up a proper master plan.

“Initially, the size of this development project spanned about 700 sq km but our team found that it is actually about 100 sq km. It will be a mixed development project but we don’t know yet its gross development value at this moment,” he said.

It was reported last month that China had offered Sime Darby a multi-billion dollar property development project in the Weifang prefecture city in Shandong measuring 700 sq km.

By The Star

Rehda, MBAM appeal against stamp duty

KUALA LUMPUR: The Real Estate and Housing Developers’ Association Malaysia (Rehda) and Master Builders Association Malaysia (MBAM) are appealing against the Government’s recent decision to apply ad valorem stamp duty of 0.5% for second-tier private as well as Government contracts from RM10 previously.

In a statement, Rehda urged the Government to abolish this imposition as it was burdening members of the building fraternity, including contractors, consultants and developers.

President Datuk Ng Seing Liong said with the stamp duty of 0.5%, a construction contract of RM10mil would now attract ad valorem duty of RM50,000 while previously only a nominal duty of RM10 per document was imposed regardless of the contract amount.

“This would definitely push up building costs,” he said.

Rehda is asking the Government to consider exempting the imposition of the new stamp duty rate on all service agreements without security including consultancy, operation and maintenance contacts.

In a separate statement, MBAM president Ng Kee Leen said the duty was exorbitant as Construction Industry Development Board also imposed a levy of 0.125% on a construction contract.

“The ruling would cost the construction industry an additional RM300mil per annum, which is burdensome,” he said.

MBAM appealed to the Government to consider reverting to the old stamp duty of RM10.

By The Star

China builder to raise US$7b from share sale

BEIJING: The Chinese company that built the "Water Cube" swimming centre for the Beijing Olympics said yesterday it hopes to raise up to US$7.3 billion (US$1 = RM3.54) in the world's biggest initial public offering (IPO) since March 2008.

The decision to let China State Construction Engineering Corp proceed with such a huge IPO indicates regulators believe China's markets have regained their strength after a plunge last year that prompted a ban on new offerings.

China's main market index is up more than 75 per cent this year and was the world's best performer for the first half of 2009.

"There will be no problem selling all those shares in the current market mood," said Mao Nan, an analyst for Oriental Securities in Shanghai.

State Construction will offer 12 billion shares at 3.96 yuan to 4.18 yuan (1 yuan = RM0.53) each, the firm said in a statement through the Shanghai Stock Exchange. That would bring in 50.1 billion yuan, or about US$7.3 billion, if all shares sell at the highest price.

State Construction said earlier it hoped to raise 42.6 billion yuan. The increase might reflect increased confidence in the price Chinese investors are willing to pay.

Regulators banned new IPOs in September after the benchmark Shanghai Composite Index plunged more than 65 per cent from its October 2007 peak. Investors worried that new IPOs would flood the market and further depress prices.

The moratorium was lifted in June after a surge in stock prices amid massive government stimulus spending.

State Construction is China's biggest builder of housing and is known for the "Water Cube" and other showcase projects such as the futuristic state TV headquarters and China's tallest skyscraper, the 492m tall Shanghai World Financial Center.

Its IPO would be the world's biggest since Visa's US$19.7 billion listing in March 2008, according to financial data firm Dealogic. It would be China's biggest since PetroChina Ltd in October 2007 and the country's fourth-largest to date.

State Construction said last year it received approval for an IPO before the moratorium.

By AP