Frankfurt-based SEB bullish about Malaysia

SKANDINAVISKA Enskilda Banken (SEB) Asset Management AG, a Frankfurt-based real estate fund manager, is eyeing more growth opportunities in Asia, especially Malaysia.

The firm entered the Malaysian market in 2007 and has since invested RM700mil in two real estate developments – Tower 1 Pavilion Residences in Kuala Lumpur’s Golden Triangle and Citta Mall, a suburban shopping centre under development in Subang Jaya.

SEB managing director Chua Choy-Soon is optimistic about the company’s investment plans in Malaysia given the country’s strong rebound in the first quarter of 2010. Malaysia’s economy grew 10.1% in the first quarter, its fastest pace in 10 years.


Chua Choy-Soon says all the units of the Pavilion Residences sky villas have a panoramic view of the city skyline, including a view of the Petronas Twin Towers and the KL Towers.

“This is an attraction to a group (like us) to further invest in Malaysia. The Malaysian Government is promoting a liberal and free-market economy. The changes done are a good signal for more foreign investors to come in,” he says.

Chua says the development of Citta Mall in Subang Jaya, which is in collaboration with local developer Puncakdana Sdn Bhd, is expected to be completed by year-end.

“Our strategy is similar to shopping centres in Western countries and we want to apply this concept here. In a recession, these (neighbourhood) malls are quite resilient because people still need to shop for groceries and essential goods.

“We feel this concept has not been fully utilised here. Malaysia is a family-orientated country. There will be a lot of focus on family-related concepts and activity for kids,” he says. The 400,000 sq ft Citta Mall is expected to have 150 shops and 1,200 car parks. Chua says the mall’s tenant mix would comprise mostly food and beverage, fashion and apparel outlets.

The Pavilion Residences meanwhile comprises two high-rise towers of 368 elite residences set amidst a seven-acre park overlooking the city.

Located in the heart of Bukit Bintang, the 43-storey, Tower 1 (which is owned by SEB), comprises 163 apartment units. The development has received overwhelming response since it was launched in November.

“About 70% of the units have been taken up,” says Chua. The size of the units range from 1,234 sq ft to 7,174 sq ft, with prices ranging from RM1,300 to RM1,400 per sq ft.

SEB will be launching its Pavilion Residences sky villas in Tower 1 on June 26. “The most unique selling point is that all units have a panoramic view of the city skyline, including a view of the Petronas Twin Towers and the KL Towers,” says Chua.

Chua says SEB is keen to partner local companies for future real estate projects if there are opportunities. “We’re long-term investors,” he says.

In Asia, SEB has investments in Australia, China, Japan, Malaysia and Singapore. Chua says there are plans to grow its presence further within the region.

“Asia is definitely a focus for us in terms of real estate. In the next few years we think Asia will outperform both Europe and US. We see a lot of money moving into Asia and Malaysia is definitely part of the equation,” he says.

Globally, SEB’s total assets amount to 236 billion euros, while assets under management total 143 billion euros as of March 31, 2010. According to Chua, about 70% of the assets under management are in Europe, with Germany comprising 40%.

By The Star

Championing the green way of building

Going green has become trendy among communities and organisations, and more people are taking up this cause by adopting an eco-friendly lifestyle.

Nevertheless, every stakeholder, whether they are common folk, government or private organisations, has to contribute towards ensuring a more sustainable environment.

With the Government’s move to review the uniform building by-laws to promote the adoption of more energy-saving and environmental sustainable measures for buildings, there will be more environment-friendly developments in the future.

The initiative to ensure new buildings feature energy-saving and other pro-environment measures is a good way to promote the green culture among industry players. After all, built structures make up almost a third of total energy consumption in the world today.

In Malaysia, developers are still weighing the costs and benefits of going green as many are concern that it will result in higher costs for their projects.

That explains why it is still early days for Malaysia’s green building initiatives and there is just a handful of such buildings at the moment.

Developers should be championing the green way of building as they are responsible for the planning and opening up of new corridors. Being a tropical country rich in flora and fauna, there are many opportunities for developers to preserve as much of the natural habitat as possible.

Whether projects are residential or commercial, buildings should adopt environment-friendly features such as natural ventilation for cooling, rain harvesting and conservation of original land form and vegetation.

Buildings should also be built with sustainable construction methods and materials. Although the cost of developing a green building may be more than that of a conventional building, the savings in operational costs would make it cheaper in the long run.

A building constructed with the right green designs and features, can reduce energy cost by 50%, which is a substantial saving as energy makes up 25% of a building’s operating cost.

Although green technologies have progressed quite well, much of the technology and materials used are still mostly imported.

Malaysian companies that have the know-how should venture into producing green technology building materials such as recycled content for floor finishes, photovoltaic systems and mechanical and electrical equipment.

Having a home grown rating tool in the form of the Green Building Index (GBI) is a also good start.

The GBI spells out the importance of energy-efficient design, indoor environmental quality, sustainable site planning and management, using the right materials and resources and water efficiency and innovation.

With the GBI in place, buildings can now be assessed and guided to reduce and minimise their impact on the environment.

But the contention by developers that the market may not be ready to pay the high fees for the GBI accreditation may undermine an otherwise worthy initiative.

Greenbuildingindex Sdn Bhd is a wholly-owned subsidiary of the Malaysian Institute of Architects and the Association of Consulting Engineers.

The assessment fees charged range from RM5,000 to more than RM100,000 based on the category and size of the building or property.

To promote the GBI accreditation among developers, the fees charged should be scaled back to make it more affordable. If the total development costs of a project escalates due to the GBI accreditation, buyers will have to pay more for their “green” property and this will not go down well with them.

If all goes well, green-accredited buildings will become sought after, especially if these buildings are able to fetch higher premium in terms of capital value and rental rates compared with non-green compliant buildings.

Deputy news editor Angie Ng believes the green way of living and industry practices will be a great elixir for Mother Nature.

By The Star (by Angie Ng)

IGB’s to focus on hotels, properties

KUALA LUMPUR: IGB Corp Bhd plans to focus more on its hotel and property investment divisions to drive its growth and expansion as both businesses offer better gains, says group managing director Robert Tan Chung Meng.


Location is the most important thing to be considered before any decision is made. ROBERT TAN

“Our offices under the property investment division provide strong recurring income to the group and the hotel’s expansion and acquisitions are much easier as less hassle is involved,” he told reporters yesterday after the company’s AGM.

Tan said the group was aggressively looking to build hotels and acquire existing hotels locally and in countries such as China, Japan and Indochina.

“We are reviewing proposals for that matter but, for us, location is the most important thing to be considered before any decision is made,” he said, adding that the group’s latest hotel, located in Manila called St Giles Hotel, would be fully operational by the third quarter this year.


Location is the most important thing to be considered before any decision is made. ROBERT TAN
Tan said new property launches would depend on the market conditions. He also said The Mid Valley City phase 3 that was put on hold in 2009 had been re-planned as a commercial development.

“We plan to build an office and retail building there with a gross development value of about RM500mil. We hope the relevant approvals will be obtained by end of this year.”

Meanwhile, IGB had posted a slightly higher net profit of RM35.3mil for its first quarter ended March 31, compared with RM33.9mil in the previous corresponding period due to improved performance by the other divisions.

It told Bursa Malaysia yesterday that revenue for the period was lower at RM156.1mil versus RM165.6mil previously due to lower contributions from the property development division while earnings per share for the period were 2.42 sen against 2.31 sen before.

By The Star

IGB looks to expand hotel ops overseas

With almost half of its profits from hotel division, property developer IGB Corp Bhd plans to expand the business overseas, namely to Japan, China and Indochina.

Its managing director Robert Tan Chung Meng said the group will either buy existing hotels or develop new ones abroad.



"We are looking at the possibility of acquiring the existing ones, mostly those which are under distress. In such cases, it is easy for us to spread our business activities in this sector if we acquire those existing hotels, which are mostly located strategically within city centres," he told reporters after the group's annual general meeting in Kuala Lumpur yesterday.

The group now manages a hotel in the UK and owns several hotels locally, including the Cititel hotel chain, MiCasa All Suites, The Gardens Hotel, The Boulevard Hotel and the Pangkor Island Beach Resort.
IGB is set to launch its three-star hotel in Makati, the Philippines in the next three weeks.

Financially, IGB expects to maintain profitability for this financial year ending December 31 2010.

Last year, it registered a net profit of almost RM159 million, up against RM155 million previously. This was achieved on the back of RM642 million in revenue for 2009, compared with RM688 million previously.

Yesterday, IGB announced that the group made a net profit of RM42 million for its first quarter ended March 31. This was highwer from RM39 million posted over the corresponding period last year.

Moving forward, Tan said IGB will focus on property investment, rather than property development.

"I don't expect to see any new project launches this year, despite several proposals that have been lined up for approvals from the authorities. We want to optimise our existing assets," he said.

Tan said contribution from property investment and management exceeded RM90 million last year compared with the previous year's revenue of about RM60 million.

Despite a subdued market and strong competition from new offices, the division recorded an average occupancy rate of above 90 per cent.

Tan also provided an update of the Mid Valley City Phase 3 project, which was put on hold in 2009.

With a gross development value of RM500 million, he said the Mid Valley City Phase 3 has been re-planned as a commercial development and will proceed upon approval.

By Business Times

Mah Sing Q1 profit jumps 24pc to RM28m

PROPERTY developer Mah Sing Group Bhd posted a 24 per cent rise in its first quarter net profit due to better performance in its property and plastic divisions.

Its net profit was at RM28 million, an improvement compared with first-quarter net profit of RM22.6 million during the same period last year.

"The group's residential and commercial projects helped contribute to the good results," Mah Sing said in a statement yesterday.

Revenue for the quarter was at RM238.3 million, up from RM150.3 million a year ago.
Main property project contributors were Southgate, Hijauan Residence, Kemuning Residence and Aman Perdana in Klang Valley, Residence@Southbay in Penang as well as Sierra Perdana and Sri Pulai Perdana 2 in Johor Baru.

The group is confident of achieving its RM1 billion sales target for 2010 as it has met 60 per cent of the target or RM601 million sales in the first quarter of 2010.

"Prospects for the residential, commercial and industrial segments are bright, given a better employment market, strong liquidity, pent-up demand and still-conducive interest rate levels," it said.

As at March 31 2010, the property group has unbilled sales of approximately RM1.1 billion, giving it significant earnings visibility.

To date, it has bought three pieces of prime land with combined gross development value of RM712 million.

Currently, the group has a total of 26 projects in the Klang Valley, Penang and Johor Baru, of which five have been completed, 11 ongoing and ten new projects in the pipeline.

By Business Times

RHB Cap takes control of Positive Properties

RHB Capital Bhd is taking control of Positive Properties Sdn Bhd, which owns a 0.51ha freehold site along Jalan Tun Razak, Kuala Lumpur, for future development.

The banking group plans to house all of its operations at the same location for better efficiency.

RHB Capital has signed a deal to buy half of Positive Properties for RM35 million from Bedford Land Sdn Bhd, making the former its wholly-owned unit.

By Business Times

CapitaMalls to expand in Malaysia

CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones

Singapore's CapitaMalls Asia Ltd is keen to expand in Malaysia and plans to have a property trust in the future is still on the drawing board.

CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones, said its head for Malaysia Sharon Lim.

"Malaysia is a key market for us. We don't think we will stop at three malls," Lim said at a press briefing in Kuala Lumpur yesterday.

In Malaysia, CapitaMalls owns and operates three shopping complexes - Sungei Wang Plaza in Kuala Lumpur, The Mines in Seri Kembangan Selangor and Gurney Plaza in Penang.

An ideal portfolio is a mix of both existing properties and assets that it builds on its own. In Malaysia, the three malls provide a total nett lettable area of 1.9 million sq ft.

When asked about plans to develop a mall in I-City owned by I-Berhad as previously reported , Lim said "we have spoken to them. But we are not ready to announce anything."

As for plans to set up a real estate investment trust in Malaysia, it is still an option.

"It is our stated strategy that ultimately, the aim is to list in the market where we operate in," she added.

She, however, declined to provide any time frame as to when this could happen.

In 2008, it was reported that CapitaLand Ltd may delay the launch of its retail property trust in Malaysia in light of the market condition then.

The three properties in Malaysia were acquired at around RM1.8 billion and have collectively undergone a RM100 million spruce-up, adding retail space and asset enhancement.

Lim added that return on investment for the properties could take anything between 10 to 15 years.

Meanwhile, on the performance of the three malls, Lim expects a 5 per cent improvement over an earnings before interest and tax (EBIT) in the current financial year ending December 31 2010, similar to the anticipated growth in the Malaysian economy.

However, she did not discount the fact that growth for the year could be more.

The three malls posted an EBIT of S$50 million (RM118.5 million) last year and was the third best performing market for CapitalMalls after Singapore and China. CapitaMalls also operates in India and Japan.

Since its entry into Malaysia in end-2007, it has seen an improvement in net lettable area of 4.5 per cent to 1.87 million sq ft while retail rates have inched up 18.5 per cent.

The occupancy at all three malls are virtually full compared with the national average occupancy of Malaysian malls of some 75 per cent.

By Business Times

Major firms keen to redevelop Pusat Bandar Damansara

Big names such as Sime Darby Bhd is said to be among the companies interested in the redevelopment of Pusat Bandar Damansara in Kuala Lumpur.

Johor Corp (JCorp) chief executive officer Tan Sri Muhammad Ali Hashim said several companies have shown interest in the project.

"A number of companies including Sime Darby and Malton Bhd are said to be among the interested parties, but who gets it depends on who gives the best price," he said, noting that no decision has been made.

Johor state investment arm JCorp, through its 27.7 per cent stake in Damansara Realty Bhd, owns nine of the commercial blocks that make up Pusat Bandar Damansara.

Built in 1981, Pusat Bandar Damansara - also known as the Damansara Town Centre - plays host to a handful of corporate headquarters as well as government organisations, including the Ministry of Housing and Local Government and the Department of Immigration Malaysia.
"It is obvious that something needs to be done on the property and unlock its true value," Muhammad Ali told Business Times in Bangi, Selangor, yesterday.

He earlier gave a talk titled "Today's Business World" at the National Conference - CEO's Mind: Today's Talk for Tomorrow's Walk.

He said JCorp will either sell its property to a third party or develop it on its own to create wealth for the group.

A recent news report quoting sources said Malton would refurbish parts of the 28-year-old complex owned by JCorp.

The job, said to be valued at RM700 million, could also involve demolishing certain portions of the old structure to make way for a new development.

Additionally, the project which is expected to be undertaken over the next five years may require Malton to develop a plot of land adjacent to the complex.

By Business Times

IGB urged not to include The Gardens Mall in REIT plan

PETALING JAYA: IGB Corp Bhd, which has in the past two to three years expressed an interest in restructuring the company’s assets into a real estate investment trust (REIT), may find it more worthwhile not to inject The Gardens Mall into the trust.

An analyst with a foreign investment bank said The Gardens Mall lacked the financial track record for a listing as it had only been operational for about three years.

“The Gardens Mall with the lack of a track record will lower the valuation of the REIT,” the analyst said.

He said management might be more interested in a REIT listing now compared with three years ago as it could have come to terms with the valuation of the properties under IGB. “Three years ago it was not very happy with the valuation but I suppose it has come to accept the market’s valuation so it’s more willing to list now,” he added.

On Monday, KrisAssets Holdings Bhd group managing director Robert Tan said following the company’s AGM that the company, which owns Mid Valley Megamall and is in turn about 75%-owned by IGB, was looking to list its properties in the 50-acre Mid Valley City into a REIT.

However, he said, The Gardens Mall was still not ready to be injected into KrisAssets although the mall was doing well since its opening in 2007.

Meanwhile, Standard & Poor’s Malaysia Sdn Bhd senior analyst Alexander Chia said in an email reply that the delay in restructuring IGB’s assets into a REIT was due to a drastic drop in market value of REITs in 2008 and early 2009 with poor market sentiment for REIT listing another obstacle.

He said the impending listing of Sunway REIT with an estimated asset value of RM3.7bil would make a difference to the staid REIT market, which had often been viewed as unexciting.

Chia added that the large and diversified portfolio of property investments of the Sunway REIT would help to attract more institutional investors’ interest and enhance liquidity of the REIT market.

By The Star

IGB to expand hospitality division

Property developer IGB Corporation Bhd is looking to aggressively expand its hospitality brand locally and abroad this year.

Group Managing Director Robert Tan Chung Meng also said the group has changed its focus from property development to property investment, due to the strong recurring income.

"We are reviewing several proposals and are in discussions for possible hotel projects in countries such as Japan, China, as well as the Indochina market," he told reporters after the company's annual general meeting on Wednesday.

Tan said, the company would be opening its three-star, St Giles Hotel Makati in Manila, in three weeks time. The hotel has more than 500 rooms.
He highlighted that the cost of the project was more than US$30 million.

With several hotel properties coming on-stream this year,the overall rooms inventory will increase to 5,900, with 4,400 under its management.

The group's pre-tax profit for the financial year ended March 31, 2010 rose to RM58.3 million from RM54.01 million in the same period last year.

However, revenue decreased to RM156.13 million from RM165.5 million previously.

By Bernama

Builders see healthy year for construction industry

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60 billion second stimulus package, Master Builders Association Malaysia (MBAM) said yesterday.

Among projects under the country's stimulus packages include the RM2 billion new low-cost carrier terminal (LCCT) and the RM3 billion LRT extension (two lines) in the Klang Valley.

"These projects will support the construction industry for the next two quarters. After that, we will see how the 10th Malaysia Plan (is working) as the effects will be seen by year end and next year," MBAM president Datuk Ng Kee Leen said.

The construction sector saw a growth of 8.5 per cent in the first quarter of this year.
Ng was speaking to reporters after the launch of MBAM Annual Safety Conference 2010, in Kuala Lumpur yesterday. The event was officiated by Deputy Minister of Human Resources Senator Datuk Maznah Mazlan.

On the expectations of the 10th Malaysia Plan, which is set to be launched on June 10, Ng said it should be positive with many projects planned to be rolled out especially with the government's focus on public private investment.

"These partnerships will work well and the results will be encouraging," he said.

Ng said MBAM also had a dialogue with the Public Private Partnership Unit (3PU) to work out incentives that would encourage local and foreign investments in the construction sector.

The unit, which comes under the Prime Minister's Department, is the core agency responsible for coordinating the privatisation and public-private partnership (PPP) projects, and which can be given injection from the facilitation fund.

Ng said MBAM has also suggested many measures to the government in order to improve the efficiency and sustainability of the construction industry.

Among them are upgrading workers' skills, importing skilled foreign workers, as well as mechanisation of the construction industry by relooking at building new heavy machinery equipment.

"Although there has been some improvements in the import of machineries and equipment, the duty is still high and it is hoped that the Ministry of International Trade and Industry will relook the duty rates," Ng said.

He said it was important to relook the duty rates in order to encourage more players to use new equipment which are efficient, environment-friendly and with better productivity and more safety features.

By Bernama

IGB may spin off assets into 3 REITs

IGB Corp Bhd is mulling over spinning off its assets into three separate real estate investment trusts (REITs) comprising its retail, hotel and commercial components, its top executive said.

Group managing director Robert Tan Chung Meng said that should this plan take off, this could "potentially be the biggest REIT in Malaysia".

Currently, the planned REIT by the Sunway City Bhd at an estimated RM3 billion to RM4 billion is said to be the largest in Malaysia.

Should IGB's plans take off, it could also create history by being the first group to spin off three REITs.
Tan said that it was considering a REIT proposal given that the tax regime has become more favourable.

"Before, we were not too keen to do a REIT. Recently, they changed the tax rules ... now we are seriously contemplating it. We want to unlock the value," he told reporters at a press conference after KrisAssets Holdings Bhd's AGM.

"We prefer to be more focused," Tan said, adding that it could spin off three separate REITs for retail, hotel and commercial/ office space instead of putting several different components into a single REIT instrument.

"If we spin off all three, it's going to be huge," he said.

Tan said that timing of the REIT would depend on market conditions as Malaysia's REIT sector is still considered to be in its infancy.

IGB also owns several hotel properties, including the Cititel hotel chain, Micasa All Suites, The Gardens Hotel, The Boulevard Hotel and the Pangkor Island Beach Resort.

By Business Times

Sunway woos REIT cornerstone investors

KUALA LUMPUR: Malaysia's Sunway City may place out about a fifth of its planned initial public offering (IPO) of a real estate investment trust (REIT) to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said.

The country's sixth biggest property company by market value is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around $500 million, the sources said.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia's largest when it is listed in the third quarter of this year.

Sunway's planned REIT offering has received positive response from investors so far due to its size, steady income source and good growth prospects, a source said.

“This is something significant that investors would not want to miss. The interest is definitely there, the question is pricing,” said the source.

The Sunway REIT will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said earlier this month.

“They are talking to seven funds, which consist of insurance funds, unit trust funds, governmentlinked investment companies, and a few pension funds,” said a second source.

Sunway is looking to place out about one fifth of the offering to cornerstone investors, one of the sources said.

Cornerstone investors normally commit to buy shares before a public listing and promise to hold them until a later date.

Sunway City declined to comment.

The issue price of the Sunway REIT will be determined in a bookbuilding process.

Earlier this month, Sunway City said it would receive RM2.7bil ringgit in cash and about 1.0 billion units in the REIT for the eight properties it will inject into the unit.

The properties, comprise of shopping malls, office towers, and hotels, have a combined market value of about RM3.7bil.

Sunway City Group, controlled by businessman Tan Sri Jeffery Cheah, will own about 38% of Sunway REIT after the listing, which the company said might be completed in mid-July.

By Reuters

Iskandar allots 200ha for wellness township

SINGAPORE: Iskandar Malaysia will parcel out about 200 hectares (500 acres) of land for the proposed joint iconic wellness township project between Malaysia and Singapore.

Malaysia’s Khazanah Nasional Bhd and Singapore’s Temasek Holding Ltd will form a 50-50 joint venture company to undertake the development of the project with the participation of private sectors from both countries.

This was announced by Prime Minister Datuk Seri Najib Tun Razak after meeting Singapore Prime Minister Lee Hsien Loong during a leaders’ retreat at Shangri-La Hotel here today.

Today’s announcement is the latest tangible development after the idea for the project was mooted during Najib’s official visit to Singapore following his appointment as prime minister early last year.
In their joint press conference, both Najib and Lee reiterated their support for the “live work play” wellness township concept proposed by the Joint Ministerial Committee on Iskandar Malaysia (JMC) which would offer holistic wellness services and facilities.

Both leaders hoped to launch the project within a year.
The township will be designed to be vibrant, culturally distinctive, yet socially harmonious and environmentally friendly.

A unique feature of the project will be the encapsulation of “wellness” within activities throughout the township, alongside the integration of traditional healing methods, complementary alternative medicine and modern treatments.

By Bernama

Talam hopes to get out of PN17

PETALING JAYA: Talam Corp Bhd is hopeful of getting out of the Practice Note 17 (PN17) list if auditors give it a clean bill of health.

Bursa Malaysia has requested for more information after the company made a submission to be uplifted from the PN17 list on April 30.

Talam and its adviser, RHB Investment Bank Bhd, are still collating the necessary documents. This will include the audited accounts for financial year ended Jan 31, 2010, which is expected to be out this week.

The company, which has been on the PN17 list since Sept 1, 2006, has taken longer than expected to exit from the troubled companies list because of prolonged negotiations on assets disposal. It plans to dispose land and buildings to pay off its outstanding loans.

Once the country’s largest builder of low- and low-medium cost houses, Talam slipped into the PN17 list after its auditors failed to provide an opinion on its results for financial year ended Jan 31, 2006. The company had also defaulted on term loans and bond obligations.

Its debt restructuring exercise involves three parts – a capital reduction and a share split, the issuance of new convertible instruments to address certain defaulted debts, and a proposed asset divestment programme.

As at Jan 31, 2009, Talam’s debts stood at some RM666.57mil, of which 78%, or RM522.46mil, are sukuk, Al Bai’ Bithaman Ajil Islamic debt securities and bridging loans.

Talam has about 2,400 ha of landbank, which is mostly located in Selangor. It is understood that the company plans to dispose about 1,214 ha, which is about half of its total landbank. The largest tract of land to be disposed would be the company’s Bandar Bukit Beruntung development.

To date, Talam has divested more than RM800mil of its properties, mainly land, including about RM670mil that was committed to be sold to Menteri Besar Selangor Inc to settle debts totalling RM392mil. The balance would be used to repay debts due to financial institutions.

Most of the debts stemmed from joint ventures on land belonging to state agencies, such as subsidiaries of Kumpulan Hartanah Selangor Bhd, Permodalan Negeri Selangor Bhd and Pendidikan YS Sdn Bhd.

Talam partially completed its debt restructuring in July last year and returned to the black in financial year ended Jan 31, 2009.

Even if the company settles all its debts and is uplifted from PN17 status, it still has to redeem its image following stalled projects that have caused many house buyers to be disgruntled.

The company has 8,000 properties in various stages of completion and has roped in IJM Construction Sdn Bhd as the principal contractor for its stalled projects.

The projects are Kinrara Section 3, Ukay Perdana, Lagoon Perdana, Putra Perdana, Lestari Puchong, Saujana Puchong, Saujana Putra, Lestari Permasi and Jalil Heights.

A Talam official said 5,000 units would be handed over with vacant possession to the buyers in the next two months. IJM has completed the Taman Puncak Jalil project with over 3,000 houses delivered. While IJM does not have a direct stake in Talam, it owns 25% of Kumpulan Europlus Bhd (KEuro), which in turn has a 24% stake in Talam.

A KEuro spokesman said the company intends to retain majority interest in Talam eventhough KEuro had pared down its stake in Talam from more than 40% about a year ago.

Talam’s management plans to turn around the company and move on with its project development plans. It is targeting to achieve at least 90% completion rate this year for its stalled projects.

It will concentrate on its joint-venture projects such as Sierra Ukay, Sierra Selayang and Ukay Perdana, as well as disposing its converted industrial and commercial land. These projects have a combined gross development value of more than RM1.4bil.

By The Star

Robust outlook for Sungai Besi

Sungai Besi is well connected and easily accessible via numerous highways

Sungai Besi is looking to be the next property development “hotspot” for local developers, and to a certain extent, foreign investors, according to industry players and experts.

According to YTL Land & Development Bhd project director Safian Ibrahim, the Sungai Besi area holds much potential as the next “new thriving address” in Kuala Lumpur due to its strategic location.

He notes that it is very well connected and easily accessible via numerous highways as well as railways.

“What this means is that Sungai Besi has already answered three of the main criteria of homeowners - location, location, location. The only other question that remains is what type of property they can invest in and its subsequent potential returns.

“More people are realising how much the area has to offer and we expect its future to be exceptionally bright,” Safian says.


Ho Wen Yan ... 'Sungai Besi will become a hotspot, akin to a golden triangle.'

Hua Yang Bhd chief operating officer Ho Wen Yan also believes the area is rapidly developing into an ideal location for property development.

“We foresee that within five years, Sungai Besi will become a hotspot, akin to a golden triangle location with its multiple accessibility channels and convenient public amenities. Because of escalating property prices, Sungai Besi and Seri Kembangan are becoming suitable locations, as it is well connected via major highways,” he says.

Property developer Hua Yang will be launching its One South mixed development project in Sungai Besi this year. The RM750mil project features residential, commercial and retail components.

The development will be carried out in five phases. The first phase will consist of retail outlets and offices. Phases two, three and four will consist of serviced apartments while the fifth phase will consist of offices.

For its One South development, Ho says the company is targeting small and medium-scale enterprises and office tenants that were looking to upgrade to a newer working environment and lifestyle.

He also says the company has been looking for a suitable piece of land to develop in the past three years and has identified Sungai Besi as a suitable location.

Ho says more people are choosing to live outside the KL city and Petaling Jaya area due to escalating property prices and congestion, making Sungai Besi and Seri Kembangan ideal.

“To make property purchases more accessible, more developments choices need to be given to the surrounding and existing residents in that area, as they look to upgrade their lifestyle.

“Waiting for the Government to upgrade infrastructure such as roads and public transport may take time and private sector-led projects (need to) strive to provide what the market needs.

Safian meanwhile says the biggest challenge in developing projects in Sungai Besi is to find a way to bring value to the area while meeting the needs of homeowners.”

YTL Land has been present there since 2005, when it launched its Lake Fields project, a joint venture with Employees Provident Fund, comprising a 70ha residential development that fronts a 6ha lake.

“The project was initially earmarked for high-rise condominiums, but from our market research, we noticed that the majority of homes in the area were already made up of condominiums like in Desa Petaling and Seri Kembangan, and matured neighbourhoods like Kuchai Lama and OUG.

“So we decided to fill this gap in the market with landed homes set in a modern, landscaped environment. Coupled with the advantages of having a strategic location, public transportation and surrounding amenities, we decided that the concept for Lake Fields is all about spacious, convenient, modern living.

According to Safian, the first phase of homes, Meadows & Glades, which was launched in February 2005, was a tremendous success.

“All 514 units of the three-storey link homes were snapped up overnight demonstrating homeowners' need for spacious homes,” he says.

The development of the Sg Besi Royal Malaysian Air Force (RMAF) air base is another positive factor.

The Government is redeveloping that 162ha into an integrated commercial hub.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong believes this would present an opportunity for property development in that location.

“The Government has the avenue to make Sungai Besi a destination for property investment,” he says.


Richard Chan says he is hopeful it will be developed with an environmental emphasis.

Malaysian Association for Shopping and Highrise Complex Management advisor Richard Chan is hopeful that the area will be developed with an environmental emphasis.

“There is simply a lack of green within the Klang Valley area. It's so congested and concrete-looking, it doesn't look nice!” He says part of the land could be turned into a recreational or fruit park.

“We have good weather with an abundance of sunshine and rain. Fruit trees will thrive, so why not?”

Ho believes the re-development of RMAF base will be the catalyst for the growth of the southern part of the Klang Valley.

“A commercial centre is ideal as the site is surrounded by mature residential areas such as Cheras, Bukit Jalil, Serdang and Seri Kembangan. Furthermore, all the major infrastructure is in place, such as highways and public transport.

“There will be a definite spillover effect. We expect aggressive growth in that area,” he says.

Safian believes it would raise the profile of Sungai Besi significantly.

“Sungai Besi has been under the radar of property investors, when in fact, it has so much to offer as the next future address of the city.”

By The Star

Need to be wary of brewing asset bubble

These days a mere few months will make a lot of difference and this is obvious even in the property market.

The stronger economic rebound in the region is once again threatening asset bubbles in various Asian cities.

One of the obvious reasons for the jump in residential property prices is the big movement of people around the globe these days. Foreigners are making up a big group of the buyers in major Asian cities from Shanghai to Singapore.

It will be just a matter of time before the trend catches up in the other cities, including Kuala Lumpur.

Penang's popularity as the choice for foreign participants of Malaysia, My Second Home programme is already seeing a big jump in foreign buying interest in its property market.

The high savings rate among Asians and their yearn for property as an investment asset is also another factor.

The under-performing equity markets and low bank savings rates are also not providing people with spare cash to invest with other better viable choice.

To the layman, creeping property prices mean more expensive homes and higher costs of living. The lower-income group will be the most hard hit by fly-away property prices.

To curb overheating, China and Singapore have already imposed higher downpayment requirements for mortgages.

There is a high correlation between property prices and liquidity, and to avoid excess liquidity in the system, their governments have no choice but to tighten credit lending and raise interest rates.

These measures will also aid in stabilising inflation.

China has recently raised downpayment for first-time homebuyers to 30% (from 20% previously), while second-home borrowers have to pay a 50% downpayment. To curb speculative activities, it has also re-imposed the 5.5% transaction tax for properties held for less than five years.

Malaysia also has to be wary of the possibility of an asset bubble brewing although the Government had also acted by imposing a 5% real properties gains tax.

Given the strong surge in property demand in the last six months or so, this has not acted as a big deterrent to curb buying and selling activities.

As developers are still continuing with their housing packages and allowing low downpayment of between 5% and 10%, entry cost is still very low for property buyers.

Moreover, they will only have to start servicing their loan only upon vacant possession of the property.

While those who have built up a comfortable portfolio of property assets will benefit from the value appreciation of their assets, many Malaysians are finding it hard to buy reasonably-priced landed property these days.

Kuala Lumpur and Klang Valley folks are certainly among those feeling the pinch.

Penangites have also seen one of the more pronounced property price increases as land on the island is really getting scarce and the number of landed housing projects is getting fewer.

New condominiums there are averaging RM600 to RM700 per sq ft, semi-detached houses and even terraced houses with some land are priced at more than RM1mil while bungalows are from RM3.5mil to RM4mil.

No wonder many island folks have no choice but to opt for medium-cost apartments.

The liberalisation of the local property market has opened up a bigger catchment customer base and created more opportunities for industry players.

In the process, there have been many new developments and project launches that are mostly targeted at the high-end market.

There are fewer affordably-priced properties unless one is prepared to travel as they are mostly located in places further away from the city centres.

To assist those who find private housing way beyond their means, the Government should work towards a holistic and concerted plan to appoint a dedicated agency to undertake the overall planning on the actual need for affordable public housing in the country and have them built in easily-accessible places.

The Singapore model, where all the public housing projects with good community facilities are within a stone's throw from the mass rail transit stations, is a sure winner.

It will overcome the problem faced in the country where many low-cost housing projects are not occupied because they are located in very far-away places that do not have convenient public transport link.

Deputy news editor Angie Ng believes all Malaysians deserve to live in secure, well planned and managed housing estates, whether they are private or public housing.

By The Star

Attractive investments on display at expo

Property hunters and investors can expect another round of exciting properties to be showcased at the upcoming iProperty.com EXPO at the Mid Valley Exhibition Centre until tomorrow.

Organised by iProperty.com Malaysia, the exhibition brings together the hottest local and international properties from India, the Pacific Islands, Bali, the UK and more.

Some 50,000 home buyers and property agents are expected to visit the three-day exhibition that also features property seminars by renowned industry experts.

Whether one is looking for properties in the heart of the city, by the sea or amidst lush greenery, the expo has it all.

Over 100 property developments across Penang, Ipoh, Seremban, Johor and Klang Valley by well known developers such as Gamuda, SP Setia, Mah Sing Group, Mutiara Good Year, Mayland Group, MK Land Group, Dijaya, AP Land and many more will be on display.


Also in the lineup are top developers from Penang like Ivory Properties and Belleview Group while famed UEM Land will be showcasing properties in Johor.

Experts Michael Tan, Juanita Chin, Dr Peter Yee and Milan Doshi are among the speakers who will be presenting talks during the expo.

There will also be topics catering to real estate agents. Tips on selling to investors, closing sales and personal real estate success stories are guaranteed to catch the attention of rookies and veteran agents alike.

“The expo is the perfect opportunity for property hunters to view the latest properties in the market,” iProperty.com Malaysia country manager Ken Tsurumaru said.

The next expo will be held from July 30 to Aug 1 at the Kuala Lumpur Convention Centre (KLCC) and Oct 23 to 24 at Marina Bay Sands in Singapore.

By The Star

AR-REIT in early talks to buy 3 or 4 properties

The manager of AmanahRaya Real Estate Investment Trust (AR-REIT), which plans to increase its asset size to RM1.5 billion within the next two years, is in early talks to buy three to four commercial properties.

The properties, which comprise office buildings and shopping centres, are mainly in the Klang Valley.

"Talks (with the vendor) are at a very preliminary stage. We're hoping to complete the purchase by the middle of next year," said Adenan Md Yusof, chief operating officer of AmanahRaya-Reit Managers Sdn Bhd (ARRM).

AR-REIT has an asset size of about RM1 billion, making it the country's second largest property trust after Starhill REIT.
The property trust yesterday agreed to lease a warehouse complex in Port Klang to Kontena Nasional Bhd, the national container haulier and logistics services provider, for nine years.

The lease will contribute an annual rental of RM2.15 million for the first three years, which is about 3.5 per cent of the total income received by AR-REIT.

"There will be a five per cent step-up rental (after the first three years)," Adenan told reporters after the signing ceremony.

The warehouse is one of the 15 properties managed by ARRM and one of the five industrial properties in the AR-REIT portfolio.

"Kontena has now increased its storage capacity and expanded its services without having to raise funds for construction of new facilities," Kontena's chief executive officer Hood Osman said.

It plans to designate the complex as Kontena Nasional Distribution Centre 11, housing 12 units of single-storey warehouses, offices, cold room and open yard facilities.

Kontena will continue to offer tenancy to the existing tenants at the warehouse complex in the hope that it will also be able to provide to them its logistics services.

The tenants there now include Gudang Damansara, Ikano, Rafsanjan Pistachio Producers, Milawa and Taskar Shipping & Forwarding.

By Business Times

Mah Sing wins at 2010 Cityscape Asia Real Estate Awards

Southbay City, Penang

Mah Sing Group Berhad (Mah Sing) won the prestigious award for Best Developer – Waterfront Development (Future) for its Southbay project in Penang Island at the 2010 Cityscape Asia Real Estate Awards Ceremony in Singapore on May 18.

Southbay is an iconic township located at Batu Maung, Penang Island. The elite township development comprises residential homes and serviced residences, retail and commercial strips, recreational and tourism attractions, hotels and malls, and world-class lifestyle entertainment, shopping and dining districts. The first phase of Southbay City has more than 1,500 registrants thus far.

Mah Sing Group managing director Tan Sri Leong Hoy Kum said, “We are very pleased with this award as it recognises the Group’s firm commitment to excellence. This award marks the Group’s seventh award for the year - the Group was named the Best Brand in the Property Category in The Brand Laureate 2009-2010 Awards; our projects in Klang Valley and Penang Island won four awards at the Asia Pacific International Property Awards 2010; and our plastics division had garnered the 8th Asia Pacific International Honesty Enterprise – Keris Award 2009.

“It is indeed an honour to be recognised for what we do but more importantly it is testament to the talent and passion of our entire organisation, which is committed to delivering innovative concepts, high quality and exceptional service. These awards have not only given us the recognition but also the boost for us to perform better.”

The Cityscape Awards for Real Estate in Asia recognises and rewards excellence and outstanding performance in architecture and design for projects in the region.

By The Star