Sunway REIT IPO may be fully covered

The institutional segment of the initial public offering of Malaysia’s largest real estate investment trust, Sunway REIT, has been “fully covered" at above 90 sen per unit, two sources with direct knowledge of the matter said.

But Sunway REIT may have to price its IPO at the lower end of its indicated range because of deteriorating market conditions, the sources told Reuters on Thursday.

“The book is fully covered. It’s oversubscribed by about 1.2 times now. It’s quite an achievement given the current market conditions,” said one of the sources, who asked not to be named because he is not authorised to speak to the media.

The company last week set the indicative price range for the sale of 1.6 billion units of the REIT at between 90 sen and 98 sen per unit.
This means the IPO could raise between RM1.44 billion to RM1.57 billion.

By Reuters

REIT an option for TA, says CEO

KUALA LUMPUR: TA Enterprise Bhd (TAE) is open to the idea of injecting some of its property assets into a real estate investment trust (REIT), according to managing director and chief executive officer Datin Alicia Tiah.

“I wouldn’t say no (about considering a REIT), but it is something we would consider. It’s an option opening to us,” she said after the joint AGM and EGM of both TAE and subsidiary TA Global Bhd yesterday.

She said the company was looking at prospects of expanding its property division overseas, particularly in China.

“At the AGM, our chairman announced that the company is looking at possibilities of expanding into China. However, nothing is concrete so far,” she said.

Tiah said the group was currently developing a mixed-development project in Richmond, Vancouver.

“The area we are developing is the preferred place to stay for Asian immigrants. The project will be developed on a 22-acre site but only 10.5 acres can be developed. The remaining acreage is for landscape purposes.”

Tiah said the project would be spread over the next five to seven years.

Going forward, Tiah said, the group’s property development division was expected to contribute significantly to its earnings as it had several projects in the pipeline.

According to its annual report, the group has mixed commercial developments in Sri Damansara, Bukit Bintang and the KLCC area.

It also has a boutique residential development at Jalan U-Thant in Kuala Lumpur and a condominium development at Dutamas, Mont’Kiara.

Meanwhile, shareholders yesterday approved the sale of TAE’s entire stake in Quayside Gem Ltd (QGL) to TA Global for RM651.8mil, to be satisfied via issuance of consideration shares and assumption of a loan facility.

QGL is the owner of the Swissotel Merchant Court in Singapore.

TAE said in a statement that the proposed acquisition was expected to bring synergistic benefits to it as it would further enhance the group’s hospitality operations in major cities around the world.

By The Star

PNB to study plan for redevelopment of KL's Kampung Baru

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will conduct a study on the Government’s plan to redevelop Kampung Baru.

President and chief executive officer Tan Sri Hamad Kama Piah Che Othman said the study was to determine whether the redevelopment would yield competitive returns to PNB following the Government’s proposal to appoint PNB to undertake the redevelopment.

Two other Government-linked entities – Pilgrims Fund Board (Tabung Haji) and Pemodalan Hartanah Bhd – were also offered the job.

On Feb 6, Prime Minister Datuk Seri Najib Tun Razak announced the 122.93ha Kampung Baru would be redeveloped under a concept that would not require relocation of the residents and landowners.

He said the residents and landowners would have the right to determine the form of development to suit their requirements.

Najib had said Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Raja Zainal Abidin had been asked to prepare a Cabinet paper on the redevelopment.

The Government also proposed to set up a special body to be run by government trustees without private sector participation to ensure Kampung Baru residents were assured of the redevelopment for their interests.

By Bernama

iProperty.com in pact with Lelong.com

Malaysian Property website, iProperty.com Malaysia has formed a partnership with Lelong.com to power its property listings channel, according to a statement.

Visitors to Lelong.com can now view properties for sale and rent at iProperty.com''s store on the classifieds website.

All live property listings found on iProperty.com come complete with details, pictures, transport accessibility descriptions and property specifications.

According Richard Tan, Managing Director of Lelong.com, he was pleased to have iProperty.com on board as a partner.
"Forming partnerships with a clear market leader such as iProperty.com Malaysia, helps fuel content, that is not only relevant but of quality to our visitors," he said.

To date, iProperty.com has partnered with local and international giants like MSN Malaysia, Malaysiakini, mySimplifieds.com and Lowyat.net to power its property channel, with more additions in the pipeline.

By Bernama

Multi-Purpose’s RM3b project to be its biggest

The Malaysian government wants it to be an iconic development in Golden Triangle in Kuala Lumpur, says Multi-Purpose's managing director

Multi-Purpose Holdings Bhd (MPHB) will launch a RM3 billion project in Kuala Lumpur by the middle of next year which will complement the government's proposed international financial district and Pasar Rakyat redevelopment in Imbi.

Managing director Datuk Lau Kim Khoon @ Surin Upatkoon said the mixed development will be the group's biggest project.

It will comprise a one million sq ft full-fledge retail podium on 2.4ha, 50-storey luxury condominium, 35-storey four-star hotel and 30-storey office tower.

At a later stage, MPHB will build one more office tower and a residence complex. The whole project will be carried out over seven years, Lau said.

"We are fine-tuning the master plan and design. The government wants it to be an iconic development in Golden Triangle. This will be one of the biggest projects in town," Lau said after MPHB's shareholder meeting in Kuala Lumpur yesterday.

Lau said the initial stages of the project will be financed with MPHB's internally generated funds.

The cash-rich MPHB has RM1 billion reserves. Its shareholders' fund is RM2.1 billion.

"There is no need to raise funds at this stage as we are reasonably liquid in terms of cash. The project will be exciting for us to work on. We are confident property development will become a major contributor to our profit and loss account," Lau said.

Currently, 80 per cent of the group's revenue comes from the gaming business through its 51 per cent stake in Magnum Holdings Sdn Bhd. The rest is from property, insurance, stockbroking and treasury management.

In the fiscal year ended March 31 2010, MPHB made net profit of RM327 million on revenue of RM3.3 billion.

MPHB has some 2,200ha worth RM1 billion in Kuala Lumpur; Rawang and Mimaland in Selangor; and Penang. It also owns 1,840ha of agriculture land in south Johor.

"We are still acquiring land in prime areas in Kuala Lumpur to carry out more projects," Lau said.

At present, MPHB has three projects worth some RM300 million: two residential developments in Penang and one in Pudu, Kuala Lumpur. The project in Pudu is to turn an office block into a three-star hotel operated under the Flamingo chain.

By Business Times

Singapore's Marina Bay Sands opens

SINGAPORE: Singapore's second integrated resort, the Marina Bay Sands (MBS) formally opened Wednesday, with its owner Sheldon G. Adelson, Chairman of Las Vegas Sands Corp saying it would become the benchmark for future tourism development elsewhere.

"The MBS is not a casino-centric development project as in the old days," Adelson said.

He explained that his company's latest US$5.5 billion Singapore resort is a multi-amenities integrated facility which caters to all categories of visitors.

"It is like the bicycle spokes. Previously, the spokes led to the hub, where the casino was, but now lead to all amenities," he told a media crowd of about 1,100 journalists and television crew from over 60 countries, specially brought in for the resorts opening celebrations.
Adelson highlighted that among Las Vegas Sands Corp's integrated resorts, the MBS is the fourth, with the casino only occupying less than 10 per cent of its amenities.

He said for countries serious about boosting tourism and creating new jobs, the integrated resort model was unmatched.

"The MBS will now be the reference point by which all new tourism projects will be judged," he added.

He also said Singapore was already benefitting from the MBS with its tourist arrival figures on the rise since its soft opening on April 27.

The resort has been receiving about 125,000 visitors daily and about 500,000 people entered the casino this month.

Adelson said the casino expected its visitors to come from three market segments.

The primary segment he explained, comprised Singapore, Malaysia and Indonesia with the second being Thailand and the Indo-Chinese countries while the third has Hong Kong, Australia, New Zealand, China, Korea, Japan, India and the Philippines.

According to Adleson, he planned to open similar integrated resorts in the Mediterranean region, either in Spain, Greece or Italy, and in Seoul or Inchon in Korea, if local laws are in tune with his company's policy.

As part of the opening celebration, the rest of the hotel's 2,560 rooms and suites were thrown open for guests, along with additional shops, restaurants and facilities at Asia's largest expo and convention centre at the MBS.

Tomorrow, the much-anticipated 340-metre long rooftop strip, Sands SkyPark, will open. It is shaped like a floating ship in the sky and sits 60 stories high on three hotel towers like cricket-stumps and features swimming pools and gardens.

The MBS will continue to open additional features including theaters, a museum and crystal pavilions next year.

By Bernama

Several parties offer to buy 1 Mont’Kiara from Aseana

PETALING JAYA: London-listed Aseana Properties Ltd has been approached by several parties to purchase 1 Mont’Kiara (1MK) development, a retail cum office space development, but no decision has been made so far, a statement from Aseana Properties said.

“As this asset is situated in a prime location in Kuala Lumpur, it is inevitable that we continue to receive offers from interested parties. Any confirmation of a transaction will be announced to the relevant regulatory authorities,” a statement from Ireka Development Management Sdn Bhd said.

Aseana Properties owns 1MK while Ireka Development Management, a wholly-owned subsidiary of Ireka Corp Bhd, is managing the property. 1MK is developed by Ireka Corp Bhd.

It was reported on June 11 that a real estate fund management company affiliated with Hong Kong’s Cheung Kong Group has made a bid for it. Property tycoon and the world’s 14th richest man Li Ka-shing controls Cheung Kong Group.

1MK is the newest retail centre and is scheduled to be completed by the third quarter of this year. It is situated at the entrance to Mont’Kiara and is located directly opposite Plaza Mont’Kiara.

The project is located on 3.4 acres and comprises several components: a 34-storey office tower which is already 92% sold, a 20-storey office suite tower which will be put on lease and a five-storey retail block. The residential components which consist of Ireka @ Kiara 1 and Ireka @ Kiara 2 have already been completed. The different components are interconnected.

The bids were for the 20-storey office suite tower which has a net floor area of 185,000 sq ft while the retail block has a net lettable area of 250,000 sq ft, which is about half the size of The Gardens at Mid Valley Mega Mall.

To give an indicative price of the 20-storey block, the first phase which comprises the 34-storey office tower block was sold in 2007 at an average price of RM550 per sq ft. The asking price in the secondary market is about RM700 per sq ft today while the unsold units from the developer in hovering between RM680 and RM700 per sq ft. At RM680 per sq ft, the 20-storey office suite tower market value would be RM126mil while the retail block, with a mark-up value of a conservative 20% more than the office space market value would be RM204mil. That would total up to RM330mil. It was reported that Cheung Kong Group made a bid for this 20-storey office suite tower and five-storey retail block for RM300mil.

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng said other than Plaza Mont’Plaza, there is nothing to compare with 1MK.

Solaris@Dutamas and Solaris@Mont’Kiara are commercial areas, but they are four-storey high and do not have office tower blocks, nor the residential or retail elements enjoyed by 1MK, according to Chan.

1 Mont’Kiara was developed as a joint venture with Singapore-based CapitaLand, one of Southeast Asia’s largest property developer.

CapitaLand Commercial (M) Sdn Bhd in a statement said CapitaLand’s interest in 1MK is through the Malaysia Commercial Development Fund (MCDF), a real estate private equity fund.

“The MCDF, which owns 14.9% of 1 Mont’ Kiara, has an active portfolio management strategy where the fund will seek to divest its properties at the appropriate time. As 1 Mont’ Kiara enjoys a prime location, there has been continuing interest by other parties to purchase the development,” the statement from CapitaLand Commercial said.

CapitaLand owns an effective 21% stake in MCDF, a private equity fund which is managed by its wholly-owned financial services business unit, CapitaLand Financial Ltd.

By The Star

Dijaya eyes land in Penang, Johor

KUALA LUMPUR: DIJAYA CORPORATION BHD, known for its flagship Tropicana Golf and Country Resort developments, is eyeing more land parcels as it seeks to grow its current land bank of about 460 acres, said its managing director Datuk Tong Kien Onn.

The group was keen on purchasing land in Penang and Johor and was always on the lookout for land parcels, he told reporters after its AGM on Wednesday, June 23.

“We are looking all kinds of sizes. Smaller parcels from 10 acres to 20 acres, bigger parcels over 100 acres wide, also possible,” he said.

Tong said its net debt to equity ratio stood at 0.25, enabling it to make the bank borrowings necessary to supplement the purchase of new land parcels.

Dijaya currently has RM287.94 million in cash and cash equivalents as at its financial year ended Dec 31, 2009 (FYE2009), according to its 2009 annual report.

By The EDGE Malaysia

Bolton unit seeks damages

BOLTON LYL Sdn Bhd, an indirect wholly-owned subsidiary of Bolton Bhd, is filing for liquidated damages from Intrapuri Sdn Bhd for terminating the sales and purchase agreement signed between both parties on the acquisition of a 2.2ha land in KL for RM39 million.

“Pursuant to the above letter of termination, Intrapuri is in breach of and has defaulted under the terms and conditions of the agreement.

As such, Bolton LYL has vide their letter dated June 21 2010 informed Intrapuri that Bolton LYL shall exercise its rights to terminate the agreement and demand for liquidated damages under Clause 16 of the agreement,” the company said in a statement to Bursa Malaysia.

By Business Times

Sunway REIT shares at 97 sen for individuals

Sunway Real Estate Investment Trust, controlled by property and hotel group Sunway City Bhd, plans to offer shares for its initial public offering at 97 sen each to individual investors, according to a prospectus published on Malaysian newspapers today.

Individual investors will get a refund if the final IPO price for institutional investors is lower than the retail price, according to the sale document.

By Bloomberg

AmFIRST to build up assets

AmFIRST Real Estate Investment Trust aims to acquire a few assets in the Klang Valley to increase its asset size of more than RM1 billion

AmFIRST Real Estate Investment Trust (AmFIRST REIT), Malaysia's second biggest property trust by assets, is out to increase its asset size of more than RM1 billion and expects a deal to be done in the current financial year.

Its performance will also be driven by the expansion of major tenant AmBank Group and progressive upgrading of existing buildings to attract new tenants.

Am ARA REIT Managers Sdn Bhd chief executive officer Lim Yoon Peng said the trust manager also aimed to acquire a few assets in the Klang Valley.

"For every asset we acquire, we look at its returns or yield and potential capital appreciation," he said in an interview with Business Times in Kuala Lumpur.
The new acquisitions will be funded with cash after which AmFIRST REIT will issue new units to raise funds and cut its borrowings.

In Malaysia, REITs are allowed to borrow up to half of total assets.

Am ARA is fully owned by Am ARA REIT Holdings Sdn Bhd, which in turn is 70 per cent owned by AmInvestment Group Bhd and 30 per cent by ARA Asset Management (M) Ltd. ARA Asset Management is fully owned by the Singapore-based ARA AmFIRST (Singapore) Pte Ltd.

Lim said ARA Asset Management was actively looking at property acquisitions in Malaysia via its private real estate funds.

"Should the fund dispose of these assets in future and the yields are attractive, AmFIRST REIT has the option to acquire them.

"This will serve as a pipeline of properties to boost AmFIRST REIT's investment portfolio."

As of March 31 this year, AmFIRST REIT is the second largest REIT in the country, after Starhill REIT, in terms of assets under management of RM1.008 billion. Its portfolio comprises office (63 per cent), hotel (13 per cent) and retail (24 per cent) assets.

Bursa Malaysia-listed AmFIRST REIT has six properties: Bangunan AmBank Group, Menara AmBank Group and AmBank Group Leadership Centre in Kuala Lumpur; Menara Merais in Petaling Jaya, Kelana Brem Tower in Kelana Jaya and The Summit Subang USJ in Subang Jaya, Selangor.

AmFIRST REIT fully owns the properties, except for The Summit, a mixed development. AmFIRST REIT owns the Summit Hotel, nearly 70 per cent of retail space in the mall, and 12 out of 13 floors of the office tower.

AmFIRST REIT is repositioning the Summit mall and intends to buy retail lots that fit into its plans.

The upgrading works will cost about RM25 million, of which AmFIRST REIT's share will be 70 per cent based on its ownership of the stratified retail mall.

"This will be carried out in stages until the end of 2011," Lim said.

It will also spend RM3 million to refurbish the Summit Hotel, which will generate additional annual rental of RM200,000.

In the financial year to March 31 2010, AmFIRST REIT reported after-tax realised income of RM41.9 million, up 12 per cent from the previous year's. The increase was attributed to new lettings and higher rentals upon renewals.

During that period, rental revenue increased 5.5 per cent to RM98.2 million.

The property trust has declared an income distribution of 9.75 sen per unit, up 11.4 per cent from the previous year's.

Its unit price increased to RM1.10 from 85 sen, a dividend yield of 8.86 per cent.

AmFIRST REIT expects to maintain its performance for the financial year ending March 31 2011.

"We hope that we can fill up the buildings that have low occupancy. Secondly, as we reposition the buildings, we hope to get more tenants."

Lim said the outlook for commercial buildings had become more challenging with the greater supply of new offices in the central business district (CBD).

Commercial office rentals may soften when supply outstrips demand given that about 4.2 million sq ft of new office space will be available in future. The annual take-up is around 2.5 million sq ft.

However, it is unlikely to hurt AmFIRST REIT as three of its buildings in the CBD are tenanted mainly by AmBank Group, which occupies 78 per cent of the total net lettable area.

The buildings - Bangunan Ambank Group, AmBank Group Leadership Centre and Menara Ambank - also represent 34.6 per cent of AmFIRST REIT's portfolio.

"The average occupancy of these three buildings is 98.2 per cent and, with AmBank Group looking to expand, we should be looking at 100 per cent occupancy soon," Lim said.

As at March 31 this year, AmFIRST REIT's borrowing was RM413 million, which is 39.6 per cent of its total assets.

AmFIRST REIT, listed on Bursa Malaysia on December 21 2006, has an approved fund size of 429 million units. Its market capitalisation is RM471.9 million based on RM1.10 per unit as at March 31 this year.

By Business Times

Perdana ParkCity eyes regional marts

Perdana ParkCity Sdn Bhd, a subsidiary of the timber-based Samling group, hopes to replicate its successful Desa ParkCity township model abroad, targeting Southeast Asia.

The company is looking for landbank of more than 120ha in Jakarta, its group chief executive officer Lee Liam Chye said.



"We will form joint ventures with landowners and developers. We think Asia is on an upstream and we are at the beginning of a recovery after a recession.

"For me, the sooner we get into actualising our vision to be a regional player the better it would be for the company," Lee said in an interview with Business Times in Kuala Lumpur recently.
Perdana ParkCity is now busy with its multi-billion ringgit Desa ParkCity project, which is expected to be completed by 2015.

It has a similar project in Hanoi worth more than RM6 billion, which will take eight years to develop.

Lee said township development will be the driving force for the company to grow into a regional player.

"There are reasonable margins to be made in township development. This year, we are expecting sales of RM650 million from our Desa ParkCity project and the money will be rolled over," he said.

Lee ruled out listing to raise funds for expansion.

"As a listed company, you are compelled to fix things short term and that does not go well with township developments. In township, we always fix things on long-term consideration," he said.

Lee said the company's recent win at the Fiabci World Congress in Bali, where it bagged the Fiabci Prix d'Excellence Awards 2010 for the Residential (Low Rise) Category, will put the company on good footing.

Fiabci is the acronym for the Paris-based International Real Estate Federation.

"We have a brand and taking that overseas will be easy for us. The Fiabci award comes at a time when we are looking to expand overseas," Lee said.

The award was for Perdana ParkCity's Adiva Parkhomes, one of 13 neighbourhoods at Desa ParkCity.

The 4.5-acre gated-and-guarded freehold strata-titled Adiva comprises 78 units of Parkhomes, 66 courtyard terraces and 16 courtyard apartments.

They were launched in July 2003 and completed and handed over in April 2006.

By Business Times

Perdana Parckcity project in Hanoi delayed

Perdana ParkCity Sdn Bhd has rescheduled its launching of a billion ringgit township project in Hanoi to the fourth quarter of this year.

"We are excited about the project but we pulled the breaks as there is uncertainty in the market place, affecting buying sentiments.

"If you want to go to a place like Vietnam, you have to be prepared and the market has to be ready," group chief executive officer Lee Liam Chye said.

The 78ha housing project, dubbed ParkCity Hanoi, is valued at more than RM6 billion and was scheduled for July launch.
"We are ready to launch but we will wait and see how the market reacts over the next few months," Lee said in an interview in Kuala Lumpur recently.

ParkCity Hanoi comprises townvillas, townhouses, semi-detached homes, bungalows, condominiums as well as apartments. It is a replica of the company's ongoing Desa ParkCity township project in Bukit Menjalara, Kuala Lumpur.

The township will be developed in 15 phases and include a commercial belt, a community clubhouse, a central park and international schools.

It will be developed by The Vietnam International Township Development JSC, in which Perdana ParkCity has a 59 per cent stake.

Vietnam's Vinaconex-Hoang Thanh Urban Development and Investment JSC holds another 40 per cent in the joint venture, while the remaining 1 per cent is owned by a local Vietnamese businessman.

Lee said Perdana ParkCity expects to launch phase one and two of the project by December, comprising 1,200 units of three-storey terraced houses and apartments.

The 2,200 sq ft terraced houses are priced from RM1.4 million each and the apartments at around RM750 per sq ft, with sizes ranging from 950 sq ft to RM1,600 sq ft.

"We expect brisk sales when we launch as the Vietnam market is underserved in areas including offices, houses, retail, hotel and industrial. We will be targeting affluent Vietnamese," he said.

Lee said the company has taken possession of the land and completed earthworks.

By Business Times

Development of Pudu Jail site to begin 1Q2011

KUALA LUMPUR: UDA Holdings Bhd would commence construction to redevelop the Pudu Jail site by the first quarter of 2011 (1Q2011) with the project to be built in stages over 10 years, Deputy Finance Minister Datuk Awang Adek Hussin told the Dewan Rakyat.

In a reply to Fong Kui Loon (Bukit Bintang - DAP), Awang Adek said on Monday, June 21 the mixed development on Jalan Pudu in the city centre had been divided into six phases and will be developed over 10 years.

Awang Adek added that the decision to stagger construction of the development, earlier named Bukit Bintang Commercial Centre, was made after considering current and projected property market positions as well as economic projections for the next ten years.

According to Awang Adek, about 40% of the development would be residential properties while the remainder would be commercial spaces, which would be owned by UDA Holdings to be rented out.

The RM5 billion mixed development on the former prison's site will include a transit centre, serviced apartments, a hotel, office spaces, recreation areas and commercial spaces, Awang Adek added.

By The EDGE Malaysia

Asian Pac increases on its property investments

Calvin Low (left) and Datuk Mustapha Buang viewing the model of KK Times Square 2. The project is set to be launched next month.

Asian Pac Holdings Bhd is building up its property investment portfolio in new growth areas to widen its income streams.

According to managing director Datuk Mustapha Buang, the company will consider land that is ready for development in the Klang Valley, Penang and Johor.

“By raising our property investment portfolio, we expect to raise our annual income from investment property of about RM1.5mil now to more than RM40mil in the next three to four years. The existing income is mainly derived from car parking fees,” Mustapha says.

Currently, Asian Pac operates 1,300 car park bays in Kota Kinabalu and another 2,300 bays will be ready in the next three to four years. It also has a 6.3 acre site in Kepong Entrepreneurs’ Park that is being leased to Carrefour.

Mustapha points out that most of Asian Pac’s projects are in Kuala Lumpur now and the company has experienced some delay in the approval application process pending the Kuala Lumpur City Draft Plan 2020.

“It is also getting more challenging as land cost in the city has appreciated by 20% to 30%. Building up another source of regular income flow will ensure we are able to diversify our income streams,” he adds.

Currently 40% of Asian Pac’s sales come from commercial projects and the balance from residential projects.

For the financial year ended March 31, 2010 (FY10), the company recorded sales of RM101.6mil against RM83mil in FY09.

The company has in the pipeline four mixed developments with a total gross development value (GDV) of more than RM1.8bil for launch in one to two years.

The first will be KK Times Square phase two in Kota Kinabalu; Dataran Wangsa in Wangsa Melawati, Kuala Lumpur; Kepong Entrepreneurs’ Park parcel B4 in Kepong and Dataran Larkin in Johor Baru.

A residential project for launch early next year will be Bijan at Country Heights comprising 12 terraced bungalows and semi-detached houses with GDV of RM20mil.

KK Times Square 2 will be launched next month, Dataran Larkin by November, Dataran Wangsa by December and the Kepong Entrepreneurs’ Park project will be early next year.

Mustapha sees opportunity to further expand the company’s presence in Kota Kinabalu,

Its wholly owned unit, Syarikat Kapasi Sdn Bhd has built up a good track record in Kota Kinabalu through its KK Times Square 1 comprising 5-, 6- and 8-storey shop offices and Karamunsing Capital’s 55 units of two- and three-storey shops.

“We want to leverage on this presence and are on the look out for strategic land for development in Kota Kinabalu. We are also exploring possible joint ventures with Government-linked companies.

“With climbing palm oil prices, the Sabah Development Corridor and increasing tourist arrivals, we see good potential for Kota Kinabalu’s property market,” he adds.

Syarikat Kapasi, which owns the 23.45 acres that KK Times Square is located on, was acquired in 1997.

The land is strategically located at the coastal area of Kota Kinabalu, close to Sutera Harbour.

Located about 10 minutes from the airport, KK Times Square comprises shop offices, a shopping mall of about 670,000 sq ft in net lettable area, 41 exterior shops and 498 serviced apartments.

Asian Pac chief operating officer Calvin Low says the project with a total GDV of close to RM1.4bil, is slated for completion in 2013.

“The 670,000 sq ft of net lettable area to be completed in the later part of 2013 will be able to churn out rental income of RM40mil a year. The five blocks of serviced apartments and shoplots with a GDV of RM460mil are for sale,” Low adds. To raise funds for the KK Times Square 2 project, Sykt Kapasi would issue RM200mil nominal value of up to 5-year guaranteed commercial papers or medium-term notes to be guaranteed by Danajamin Nasional Bhd.

Danajamin is guaranteeing the bonds based on the viability of the project as the fund will be raised specifically to finance the project.

Mustapha says Danajamin’s guarantee has provided the company the opportunity to raise longer term borrowings at a reasonable cost within a shorter time.

He says this form of fund raising would be popular, especially in projects where there are no sales during the construction period.

“Despite being a mid-sized developer, we are now able to raise bonds for project financing.

“Bonds wrapped by Danajamin will automatically be upgraded to AAA rating, which gives investors an assurance of the quality of the paper,” Mustapha adds.

By The Star

Bristeel to buy land at POIC

BRISTEEL Properties Sdn Bhd plans to buy up to 16 hectares of land at the Palm Oil Industrial Cluster (POIC) in Lahad Datu to develop industrial shoplots intended for small and medium enterprises (SME).



"We believe that over the next 10 years, POIC in Lahad Datu would have grown into a major integrated industrial complex anchored by oil palm-related downstream industries," said company spokesman William Chee.

The company yesterday signed a deal to buy an initial four hectares.

The Bristeel Group, which owns the patented BriSteel Roof Truss System, has been in business for more than 10 years.
Bristeel Properties has an option to purchase another 12 hectares of adjoining land for future development in anticipation of rapid economic growth in Lahad Datu.

Starting in 2005 with an initial 460 ha area, POIC Lahad Datu is being developed by state-owned POIC Sabah Sdn Bhd.

Some 25 companies have already bought land for a variety of palm oil-based and supporting industries in the area. A further 1,200 ha have been set aside for a new phase.

"We are confident in the future of not only POIC Lahad Datu, but the greater Lahad Datu and its surrounding areas," Chee said.

Its project, dubbed Port City@POIC, will provide premises of modern and functional designs for SMEs.

The initial phase will offer 33 units of detached and semi-detached warehouse-type buildings.

By Business Times

New launches and better connectivity

The local property market is abuzz with new launches once again with reports of good take-up for quite a number of recently launched residential projects especially those in well sought after locations.

Things are looking up for the market, especially in the landed residential sector although the condominium market is still quite soft.

The overall sentiment has certainly improved and developers are reporting much stronger sales compared with the last two years.

In fact, residential property prices have appreciated quite substantially with prices even doubling in some areas.

Property buyers are taking advantage of the prevailing low entry cost and cost of financing to “catch the rising tide”.

Although interest rates have increased slightly, the hike is quite gradual and minimal, and have not impacted sales much.

Mortgage loans easily make up close to 30% to 40% of the total loans disbursed and this shows the importance of the property market to the overall economy.

Although the market has been quite resilient, it is important to ensure it will not be over-geared as too much borrowings could be a prelude to over-speculation and price bubbles.

While more launches mean more choices for buyers, the question is whether the flurry of new project launches is good or bad for the market.

This depends on various factors including the percentage of buyers who are buying for their own occupancy, the holding power of those who buy for investment, the strength of the local economy and market sentiment going forward.

More buyers buying for their own occupancy is a good sign as it shows the market is fundamentally stable and well supported. This seems to be the case for the landed residential market so far.

Those who purchase for investment but do not have the holding power may need to liquidate their positions to cut their losses in the event of a market correction. They are actually speculators and many of them usually resort to bank loans to finance their purchase.

If the market gets too speculative, it is unhealthy as the risk of artificially driven prices and overheating will be higher.

While things still seem to be going well, industry players should plan and build according to what the market actually needs and should not over-price their projects. Affordable housing projects that have good accessibility and infrastructure facilities are still in short supply.

Meanwhile, the commercial property sector is still facing a glut and there should be better planning to space out the developments.

While new project launches take care of the supply side of the equation, the demand side is also important and should be given due attention.

One of the factors driving demand for a project is its accessibility.

News that the Government is looking at a mass rapid transit (MRT) system to improve Kuala Lumpur’s public transportation network will give a boost to buying sentiment, especially for areas that will be serviced by the MRT.

It should be accorded top priority as it is a project that will improve the people’s quality of life.

Having a highly efficient and well integrated public transport system that is dependable upon will take the load off our heavily congested roads.

There are many ways to raise the quality of life for Malaysians and one of the fast tracked ways is to put in place a world-class public transport system right where it is needed most.

Much has been said about how disenchanted Malaysians are with the state of the existing public transport system as the various modes of transport and facilities are not integrated with nor complementary to each other.

Hopefully the latest initiative will look into all the important areas and will be implemented holistically with other ancillary facilities and services to ensure the whole public transportation network is totally integrated and complements each other.

Hopefully it will ply most of the heavily populated neighbourhoods and commercial centres not just in the city but also in other parts of the Klang Valley like Petaling Jaya and the suburbs. Besides the cost savings, it will also be a greener option and ensure a more oxygenated environment for city folks.

·Deputy news editor Angie Ng looks forward to leaving her car at home and enjoying the simple luxury of a cheap and safe mode of travelling around the Klang Valley in public transportation.

By The Star (by Angie Ng)

LBI Capital to launch 3 projects in Johor, Klang Valley

LBI Capital Bhd, a small property developer, plans to launch three projects in Johor and the Klang Valley with a total gross development value (GDV) of RM210 million.

LBI Capital, which diversified into property development in 2004, embarked on its first project in Ara Damansara.

The company used to supply air-conditioners to Proton Holdings Bhd but exited the business due to stiff competition.

"Property development now contributes more than 95 per cent to our earnings while the manufacturing of rubber mats and outer shoe soles make up the rest," said managing director Datuk Ng Chin Heng.

"We expect to launch projects at the end of the year as consumer confidence picks up," he told reporters after the company's annual general meeting in Shah Alam, Selangor, yesterday. Also present were chairman Tan Sri Arshad Ayub and executive director Kong Sau Kian.

LBI Capital is banking on three property projects with a total GDV of RM210 million - two in the Klang Valley and one in Tampoi, Johor - to drive profits for the group until 2012.

The group plans to build 11 units of three-storey bungalows in Section 14, Petaling Jaya. The 0.85ha site is located opposite the Aman recreational park and near the Sri Aman secondary school.

In Puchong, LBI Capital will step up sales of industrial lots on a 14.4ha site in Puchong, Selangor, a project with a potential GDV of up to RM90 million. The industrial area will cater for the needs of various industries especially those from the small- and medium-sized sector.

"We see high demand for corporate office and warehousing in industrial lots due to the growing number of SMEs. Each lot measures 10,000 sq ft," he said.

Over in Tampoi, Johor, LBI Capital is building 21 units of shop lots worth RM14 million. The shop lots are located along the Skudai Highway in Taman Mewah.

On the outlook, Kong said the group will continue to look for opportunities to partner landowners in the Klang Valley to develop mid-to-high-end properties.

By Business Times

Putrajaya Perdana gets RM143m job

CONSTRUCTION and property development group Putrajaya Perdana Bhd has won a RM142.8 million contract to build a 300-bed private hospital in Desa ParkCity, Kuala Lumpur.

The project was awarded by Trekker Avenue Sdn Bhd, a subsidiary of Perdana ParkCity Sdn Bhd, to Putra Perdana Construction Sdn Bhd.

The project, which will include a six-storey elevated car park, will be completed in April 2012.

Perdana ParkCity is the developer of the 473-acre Desa ParkCity township.

By Business Times

Mulpha eyes HK listing for unit

Property developer Mulpha International Bhd aims to list unit Manta Holdings Co Ltd on the main board of the Stock Exchange of Hong Kong (SEHK) by next month.

Mulpha chief executive officer Chung Tze Hien said it expects to hear from the listing committee in Hong Kong in the next few days.

"We still have to secure shareholders' approval. I'm waiting to hear from the listing committee in Hong Kong whether our proposed listing is successful within the coming two days.

"I met up with them yesterday (Thursday), but they may need to ask more questions or requirements. If they had approved (the proposal), the listing would have been done by the middle of July. I'm waiting for some outcome," Chung told reporters after Mulpha's annual and extraordinary general meetings in Kuala Lumpur yesterday.

In April, Mulpha applied to Stock Exchange of Hong Kong Ltd to list its subsidiaries involved in the sale, rental and servicing of construction equipment on the SEHK.
Chung said the listing will enable Manta to raise money from the capital market to fund the group's business activities and expansion plans.

"Being accorded listing status will allow the Manta group, which comprises four companies, to have greater financial flexibility in pursuing its growth plans."

The listing of Manta will involve Manta Engineering and Equipment Co Ltd, Manta Equipment Rental Co Ltd, Manta Equipment Services Ltd and Manta Equipment (S) Pte Ltd.

According to Chung, Mulpha owns 88 per cent of Manta. Pan Ocean International Ltd, which holds the remaining 12 per cent via Ku Sze King, will sell its stake to Mulpha prior to the listing.

As part of the listing exercise, Mulpha will undertake internal restructuring and reorganisation, after which it will issue 50 million new Manta shares representing 25 per cent of the enlarged issued and paid-up capital of the company. The new shares will comprise five million issue shares available to the public in Hong Kong and 45 million shares by way of placement to professional, institutional and other investors.

None of the directors in Mulpha and Manta will be offered shares in Manta pursuant to the proposed listing.

"We hope to raise about HK$50 million, or about RM25 million, from the proposed public issue," Chung said.

He added that the proceeds will be used to buy tower cranes and construction equipment for rental purpose, general working capital, expansion and improvement of storge facilities, service and maintenance workshops.

"Singapore is booming. Market price in Singapore is shooting up. So is the situation in Hong Kong and China. Construction of high-rise buildings needs a lot of cranes. This augurs well for our business."

Chung expressed confidence that Mulpha's financial performance will improve further this year in tandem with economic recovery here and in countries where it operates.

"Last year was a bad year. We are now going out of the 2008 and 2009 crisis. Last year also, we had impairment, but not this year. As we move on, things will be better. In fact, our first quarter results look pretty good. We are on the road to recovery," he said, adding that Mulpha registered a net profit of RM48 million in the first quarter ended March 31 2010.

By Business Times