Joint effort needed to make KL a world-class city

BUILDING Kuala Lumpur into a world-class liveable city will need clear, cohesive and holistic efforts and plans by all stakeholders and the authorities involved.

It is a huge exercise where all issues and challenges should be duly looked into and addressed. Kuala Lumpur has the potential to join the league of other leading global cities if all the relevant stakeholders put on their thinking caps and get their act together.

Doing an honest audit on what are its strengths and weaknesses will be a good start to find out where it stands compared with other cities around the globe. We can expect a long “to do” list that has to be executed cohesively to get the desired results.

A holistic master plan with the necessary strategies and plans can then be drawn up and it should leverage on the city’s key strengths and steps taken to address its weaknesses.

Among some of the key assets that Kuala Lumpur command are its friendly and culturally diverse people and their way of life, a wide array of culinary cuisine offerings and relatively lower cost of living.

For the shopaholics, it is also a shopping haven with nice shopping malls featuring world renowned brands and wide array of merchandise.

Instead of just focusing on the hardware side of things and jumping into more physical projects to trump up its global city status, due attention must also be given to its software.

While Kuala Lumpur can trumpet about having good infrastructure hardware such as one of the world’s best airports and buildings, the software that include the values and integrity of the people and the government, corporate governance and transparency standards, and consistency in government policies also need sprucing up.

Government policies should be long-term and consistent at all levels, especially at both the federal and state levels, as inconsistent and flip flop policies have long been frowned upon and are still bones of contention for foreign investors.

Other important “software” issues that need immediate attention include the level of security and safety in the city, the people’s general well being and their quality of life.

If we look around housing estates today, whether in Kuala Lumpur or the Klang Valley, the once “open and carefree” neighbourhoods have been replaced by fenced up and barricaded estates that are guarded around the clock.

This shows a general sense of insecurity and haplessness among the people.

Shoring up the safety and security index in in the country has been made one of the National Key Results Areas under the Government’s national priority areas of focus for a national transformation. It is now time to turn it into reality rather than just a target.

Another key area of focus is to put in place an efficient, reliable and well integrated public transport system for Kuala Lumpur and the other satellite towns.

Having the ability to move easily and comfortably around our cities will save resources and boost productivity for the country as less time is wasted on the roads when there is less congestion and traffic jams.

It will also attract more high net worth visitors and investors to the country.

The Government’s initiative to build a mass rapid transit system is a much awaited project that will certainly raise the liveability bar for Kuala Lumpur.

Most global cities are also renowned for their other software such as their rich culture and performing arts, well maintained parks and green lungs, and facilities for other wholesome leisure activities.

To alleviate the congestion in the city area, it will be appropriate for the authorities to restrict high density developments in already overcrowded areas, and be proactive in providing more public areas and parks for recreation and leisure activities.

For a better liveable environment, projects should be rated according to their scale of sustainability and how they can add value to the people and the environment.

Deputy news editor Angie Ng believes the challenge for Kuala Lumpur is to ensure the city’s old and new co-exist and blend seamlessly with each other.

By The Star (by Angie Ng)

Public transport poised for change

It may be an old issue but public transport is hogging the limelight again.

A new regulator has been tasked with the ambitious plan of drawing up a well-researched masterplan for public transport in the Klang Valley and the rest of the country. At the same time, two well-known construction companies have taken the initiative to draw up a plan for a much-awaited mass transit system (MRT), which no one disputes will propel the state of public transport in the Klang Valley to new heights, if executed well.

The public are excited that for once in their lives, there could be real connectivity from home to work. But there are also concerns if such a mega project will be well planned and whether it will be too much of a strain on the Government’s resources.

Moaz Yusuf Ahmad, who runs The Association For The Improvement Of Mass Transit (Transit), a consumer association championing better public transport, says existing systems need to be made better first.

“Before we can build more light rail transit (LRT) or MRT lines, we have to solve the existing problems in the industry, such as public transport workers’ salaries and benefits, flouting of rules, dismal safety record, and above all, the ineffective and costly ‘entrepreneurial’ model for public transport, which has done little for the industry beyond enriching permit owners,” he says.

To be sure, there are already plans afoot to enhance the existing public transport systems. The recently-formed Land Public Transport Commission or SPAD has been tasked with carrying out the initiatives for the National Key Result Area (NKRA) for urban public transport under the Government Transformation Programme.

These include re-routing buses through less congested highways and even having more specialised lanes for buses. There are also plans to increase the number of trains on the existing LRT and KTM Bhd Komuter and the monorail. In addition, there are two major extensions planned for the LRT.

However, there is a view that buses and the existing rail infrastructure alone will not cater to the growing needs of public transport in the Klang Valley.

Data compiled by SPAD indicates that Klang Valley’s rail coverage still lags behind most major cities in the world, in terms of km per million population. Even if the LRT extentions are included, the Klang Valley’s rail km per million population would stand at 32 versus an average of 34 for the cities of London, New York, Singapore, Hong Kong and Tokyo.

But data extracted from the recent proposal by Gamuda Bhd and MMC Corp Bhd for an MRT project in the Klang Valley shows that the gap is much wider, with Kuala Lumpur’s rail network being only 15km per one million population versus most other cities with over 40km per one million people.

No wonder then that the 10th Malaysia Plan (10MP) specifically mentions that the public would get to enjoy an MRT system 156km long and covering a 20km radius around the Kuala Lumpur city centre, carrying two million passenger trips per day when completed.

The 10MP does not, however, state the deadline for constructing the MRT system to overcome traffic congestion and transform the “Livability of Greater Kuala Lumpur” into a global city.

Property play

Gamuda group managing director Datuk Lin Yun Ling feels that merely relying on buses will not solve the solution in the long run. “You don’t want a situation where the traffic is transferred from one road to another as that leads to more congestion somewhere else. Highway development cannot keep up with the increasing volume of cars,” he says, adding that “the country should have started this (MRT) a long time ago.”

Another key aspect of the Gamuda-MMC proposal is that it stands to unlock land values, especially so as it connects major planned property development projects. These include major land privatisation projects in the Klang Valley.

The planned MRT route reaches the Matrade redevelopment area by the Naza Group, the proposed Sungai Besi redevelopment and the planned Kuala Lumpur International Financial District on 85 acres popularly known as Dataran Perdana.

“It is a no-brainer. The MRT will bring about a positive impact on values of real estate located within walking distance of the MRT stations,” says property consultant and map-maker Ho Chin Soon.

On the flipside, there is the concern of over-development and a property glut. “What you don’t want to see is all this massive investment goes into creating new pockets of development with MRT stations nicely built up to access these places, but they end up not being used due to a possible glut of such properties,” cautions Elvin Fernandez, managing director of property valuer and consultancy firm Khong & Jaafar Sdn Bhd.

Who’s going to pay for MRT?

Another major issue with regard to the planned MRT will be funding. Reports have indicated that the Gamuda-MMC MRT project could cost RM36bil. If land acquisition, rolling stock and the redevelopment of underground commercial space are included, the figure could top RM43bil.

The question is, who will fund this?

Thus far, the 10MP has been silent on how the MRT will be funded. The Gamuda-MMC proposal, based on those familiar with it, assumes that the Government will foot the bill on the basis that the economic returns from the project are very high. To be noted is that public funding for MRTs is typically absorbed by the government, like in Singapore and London.

It is also worth noting that the two LRT operators had to transfer the rail lines to the government-owned Syarikat Prasarana Negara Bhd in 2002, while the monorail was transferred in 2007. The operators had found themselves in financial distress after failing to make sufficient returns on the operations to finance debts incurred during the construction as well as other operational requirements.

Still, aside from the economic benefits, there are other multiplier effects that a project like the MRT will bring about. Construction and building materials will benefit, and jobs will be created for engineers, designers, architects and the likes.

Hence it is understood that some quarters are expecting the Government to fund the MRT from the savings from reducing fuel subsidies.

But that may not be so easy, points out Yeonzon Yeow, head of research at Kenanga Investment Bank. “The idea that the Government will finance it (MRT) with savings from eliminating fuel subsidies is theoretical at best. Remember that fuel subsidies affect everyone in the country. There would be questions if you used that savings just to enhance the transport system in the Klang Valley,” Yeow says.

He adds that if the funding is raised though bonds guaranteed by the Government, it (the Government) may ultimately have to bear the burden if the project is not able to cough up sufficient cash flows from ticket sales. “Will that fit in with the Government’s austerity drive to bring the budget deficit to below 2.8% by 2015,” he asks.

The only mega rail-based private-sector driven public transport system that had not needed a major bailout is the Express Rail Link Sdn Bhd (ERL), which operates the KLIA Ekspres and and KLIA Transit train services. Its executive chairman, Datuk Mohd Nadzmi Mohd Salleh, who is also a major player in the public bus sector through his Konsortium Transnational Bhd (KTB), agrees that the MRT is a step in the right direction but that careful planning will be key.

“The structure of public transport should be better planned so that there should not be any more bailouts like in the past. Instead of spending a large sum of money on mega projects, the government should have short-term, medium-term and longer-term plans, to alleviate the congestion in the city,” he says.

At the same time, he adds, private sector involvement in the running of public transport is important. “The private players are actually best suited to bring about the necessary efficiencies and new revenue streams like exploiting advertising opportunities on the vehicles.

He says the Government cannot afford to go on subsidising public transport. “It has to be efficiently run and at the same time, it has to be attractively priced. It can be well planned so that it can get sufficient numbers using it and then the returns from ticket sales can go a long way into subsidising both the operational and capital expenditure of the new systems,” he argues.

He cautions though that before the MRT is agreed upon, more detailed study of the needs of public transport should be done. “The methodology of public transport planning should be given a lot of thought and effort. At the moment, we don’t have this data. We don’t know where the real needs of public transport are,” he says.

Will SPAD get it right?

And that’s where SPAD comes in. Its officials have said they will study the MRT proposals (the one from Gamuda-MMC and any other ones that goes to the Government) and incorporate all of that if possible into its own public transport masterplan for the Klang Valley.

SPAD in fact is being tasked with revamping the entire public transport system. Besides the Klang Valley masterplan, which will be due in six months time at the earliest, SPAD will also be given the mandate to take over all licence issuing authorities, reorganise the bus network in the Klang Valley, integrate smart ticketing and monitor the overall standard performance of all public transport services, to name a few.

SPAD chairman Tan Sri Syed Hamid Albar told a news conference on Thursday that it aimed to more than double travel on public transport to 25% by end-2012 from 12% currently. “Yes, it is ambitious, but achievable. This is the first time we have a specific body to deal with the various land public transport issues,” he added.

But it is going to be an uphill task. Policy setting, operations, regulation and enforcement of public transport has been spread throughout a multitude of Government departments, agencies, including state bodies. SPAD has to not only communicate and extract data and expertise from these bodies, it also plans to usurp most of their powers. “This is going to be SPAD’s single biggest challenge, especially when it comes to the issuance of lucrative licences. Will SPAD be able to reorganise that?” questions a government official who declines to be quoted.

On a positive note, SPAD has been placed under the Prime Minister’s Office and that should give it the necessary clout to do its job well.

Overhauling the state of public transport in the Klang Valley is “not rocket science” says KTB’s Nadzmi. Adds Transit’s Moaz, “If we truly want to see public transport change over the next five years, we need a real vision for service-based public transport that puts people first, and focuses on performance. Other countries have done that, so Malaysia should be able to do it too.”




By The Star

Aero Mall to liven up Senai airport

Developments at the Senai International Airport in Johor are expected to accelerate following the set-up of the Aero Mall, a stand-alone and external airport mall.

"There are now RM2.5 billion worth of ongoing projects at the airport area," Senai Airport Terminal Services Sdn Bhd (SATS) chief executive officer Datuk Mohd Sidik Shaik Osman told Business Times in an interview.

They include the RM2 billion Senai High Tech Park and the Free Zone Logistics and Aerospace Industrial Park.

Sidik said the Aero Mall, which will open on July 1, will set a new wave of development for SATS, which has 1,120ha surrounding the Senai airport.

The RM80 million, 173,338 sq ft mall is an integrated lifestyle complex adjoining the airport. It has 29 retail outlets and 30,000 sq ft piazza area. Some 70 per cent of the lots have been taken up for shopping, entertainment and dining facilities.
Sidik said that there are also plans for a cineplex and a digital complex.

"When we took over the airport in 2003, it was just a building to service passengers flying to Kuala Lumpur. We have expanded service to include flights to Penang, Kota Kinabalu and Kuching, and other facilities.

"Malaysia Airlines and AirAsia operate some 220 flights a week (out of the airport) and we hope that will be increased as we work to grow air traffic and passenger volume," Sidik said.

"Passenger traffic at the airport is now more than two million, including meeters and greeters. We expect this to double in the next three years."

Sidik expects new developments in Iskandar Malaysia in the state to contribute to the airport's growth.

Ongoing projects at Iskandar Malaysia include Legoland, premium factory outlets, universities and hospitals, targeted to be ready by 2012.

"Iskandar is expecting some four million visitors a year. We think this will increase air traffic and passenger volume. The airport can handle up to 4.5 million passengers a year before it requires any expansion."

On the Senai High Tech Park and the Free Zone Logistics, Sidik said that SATS might undertake a fund-raising exercise, in the form of internal funds and loans, to get the projects moving.

He is ambitious about both projects and is confident that they will attract investors.

The high-tech park has drawn interest from investors in the US, Europe and China who are in various sectors, including semiconductor and solar energy.

There are confirmed investments from China's EQ Solar Technology International Sdn Bhd, which will invest US$500 million (RM1.6 billion) to produce solar modules, and leading industrial gas provider MOX-Linde Gases Sdn Bhd, which plans to set up an industrial gas separation plant.

"We have incentives to attract investors. Those who come into the Iskandar region will enjoy low income tax, among other things," Sidik said.

Still, SATS may face stiff competion from Singapore, the KL International Airport and the Port Klang Free Zone, which are also aggressively attracting investors through various incentives.

By Business Times

Sunway REIT IPO well received

PETALING JAYA: Sunway Real Estate Investment Trust (Sunway REIT) initial public offering of 1.52bil units was well received and the order book was fully covered despite a cautious sentiment and volatility in the equity markets.

In a statement yesterday, Sunway REIT Management Bhd (the manager) said the deal, which was signed yesterday, was set to raise RM1.49bil, mainly from key domestic as well as international institutional and high networth investors.

It said the institutional offering was priced at 90sen per offer unit and the retail offering was priced at 88sen per offer unit.

The implied market capitalisation of Sunway REIT upon listing, based on the institutional price and 2.68bil issued units, would be approximately RM2.41bil, positioning Sunway REIT as the largest Bursa Malaysia-listed REIT.

It added that upon listing, Sunway REIT property portfolio would include eight of Sunway City Bhd’s existing prime properties situated in Penang, Perak, Selangor and Kuala Lumpur.

By The Star

Mah Sing plans 'Icon City'

Mah Sing Group Bhd, the country's fifth largest property developer by revenue, plans to launch the "Icon City" in Selangor, its biggest commercial development thus far, which has a gross development value of over RM1.5 billion.

The project, which will be developed in phases, is located on 7.93ha site in SS8, Sungei Way, a site formerly occupied by Matsushita Group of Co.

Mah Sing had bought the land from Panasonic HA Air-Conditioning (M) Sdn Bhd for RM89 million or RM104.23 per sq ft. The deal was completed in March this year.

The land is situated at the crossroads of the Lebuhraya Damansara-Puchong and Federal Highway, making it strategic for development.

Initial plans for the land were to build three 17-storey serviced apartment buildings, a 16-storey hotel, five blocks of 25- to 31-storey office towers, a 20-storey small office home office block, 18 units of three-and-a-half-storey showrooms and 80 units of four-and-a-half-storey shop lots.

However, Mah Sing chief operating officer for commercial projects, Andy Chua, said the development plan for the five-year project is being modified to enhance its appeal.

"We are adding some unique and interesting concepts. We expect Icon City to be a new landmark for Petaling Jaya," Chua told Business Times.

He said Icon City will be a one-of-its-kind green and eco-friendly development with smart features and it will further enhance Malaysia as a property investment destination.

Chua added that the office towers will be tailor-made and sold en bloc while the apartments and shoplots will be kept for retail investors.

"We are bullish on the project as there is a pent-up demand for commercial properties in Petaling Jaya. Although the market may not be ready, but if the project is unique and special and people see the value of the properties, people will invest.

"A lot of companies are also moving to Petaling Jaya as an alternative to having an office in the Kuala Lumpur city centre. The rental yields are good here," he said.

Chua said Mah Sing aims to submit its final development plan to the local authorities by the third quarter of this year and start construction immediately.

It has started to demolish the Matsushita building and will complete the works by September, he said.

By Business Times (by Sharen Kaur)

Institutional tranche of Sunway REIT IPO 'fully covered'

The institutional segment of the initial public offering (IPO) of Malaysia's largest real estate investment trust (REIT), Sunway REIT, has been "fully covered" at above RM0.90 a unit, two sources with direct knowledge of the deal said.

The roughly US$500 million (RM1,610) IPO, Malaysia's largest so far this year, comes amid a faltering market for new offerings as investors fret about further financial troubles in Europe and its impact on the global economic recovery.

The IPO also comes ahead of a host of offerings by national oil corporation Petronas and shipping firm MISC scheduled for the second half of 2010.

"The book is fully covered. It's oversubscribed by about 1.2 times now," said one of the sources, who asked not to be named because he is not authorised to speak to the media.
"All the local funds are in and we're still getting international orders. It's quite an achievement given the current market conditions," the source said.

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

The company last week set the indicative price range for the sale of 1.6 billion units of the REIT at between RM0.90 and RM0.98 per unit.

This means the IPO could raise between RM1.44 billion to RM1.57 billion.

The global market for IPOs, which had shown signs of a resurgence early in the year, faces a spate of delays and downsizings, underscoring difficulties for mega deals such as Agricultural Bank of China's IPO.

Sunway said earlier this month it had secured four cornerstone investors who will take 14 per cent of the IPO.

Sunway REIT will have a market capitalisation of RM2.4 billion to RM2.6 billion when it is listed on July 8.

By Reuters

Sunway REIT to sell shares at 90 sen each

SUNWAY Real Estate Investment Trust, controlled by Malaysian property and hotel group Sunway City Bhd, is selling shares at 90 sen each to institutional investors in an initial public offering, according to four people with knowledge of the matter.

The price is at the low end of the 90 sen to 98 sen range marketed to investors, said the people who declined to be identified as the details are private. The sale is being managed by a group of banks led by Credit Suisse Group AG and RHB Capital Bhd.

The IPO is set to top Masterskill Education Group Bhd’s RM771.4 million sale in May, and underscores rising investor appetite for stocks in the Southeast Asian nation amid an economic rebound from last year’s recession. Sunway REIT will begin trading next month and join 12 other REITs listed on the Kuala Lumpur stock exchange.

“Sunway REIT is a defensive REIT that will offer unit-holders a longer term growth catalyst,” Mervin Chow Yan Hoong, an analyst at OSK Research Sdn Bhd, said in a report June 22. “Malaysians are great shoppers and the recent global recession may have only slightly curbed this tendency.”

The Malaysian property trust includes shopping malls and hotels valued at RM3.7 billion, making it the biggest REIT in the country by asset value. Its Sunway Pyramid Shopping Mall is the biggest in Malaysia by net lettable area, according to OSK. More than 70 per cent of Sunway REIT’s income is derived from its retail properties.

By Bloomberg

Sunway REIT IPO well covered

KUALA LUMPUR: The institutional segment of the initial public offering (IPO) of Malaysia’s largest real estate investment trust, Sunway REIT, had been “fully covered” at above 90 sen a unit, two sources with direct knowledge of the deal said.

The roughly US$500mil IPO, Malaysia’s largest so far this year, comes amid a faltering market for new offerings as investors fret about further financial troubles in Europe and its impact on the global economic recovery.

The IPO also comes ahead of a host of offerings by Petroliam Nasional Bhd and MISC Bhd, scheduled for the second half of this year.

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

“All the local funds are in and we’re still getting international orders. It’s quite an achievement, given the current market conditions,” the source said.

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

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 RM1.44bil to RM1.57bil.

The global market for IPOs, which had shown signs of a resurgence early in the year, faces a spate of delays and downsizings, underscoring difficulties for mega deals such as Agricultural Bank of China’s IPO.

Sunway said earlier this month it had secured four cornerstone investors who would take 14% of the IPO.

Sunway REIT will have a market capitalisation of RM2.4bil to RM2.6bil when it is listed on July 8.

The IPO, comprising an institutional tranche of 1.5 billion units, more than 90% of the total, and a retail portion of 134 million units, is expected to be priced on Friday.

The REIT will house eight properties, comprising shopping malls, office towers, and hotels with a combined market value of about RM3.7bil.

Credit Suisse and RHB Investment Bank are the joint global coordinators of the deal. The banks, along with CIMB, HSBC, JPMorgan and the investment banking arm of Maybank are joint bookrunners.

By Reuters

Collaborate to develop halal parks, states told

STATE governments are encouraged to share knowledge, experience and expertise among themselves to develop halal parks in their respective states.

There are eight halal parks in the country that are doing well, having collectively attracted RM4.8 billion in investment so far. They include Selangor, Negri Sembilan and Malacca.

In facilitating the orderly development of halal parks, Halal Development Corp (HDC), an agency under the Minister of International Trade and Industry (Miti) which is responsible to spearhead the development of the local halal industry, has published a HDC Designated Halal Parks guideline.

To date, a total of 97 companies have either purchased factory sites, started factory construction or are operating at the various halal parks.
"Halal park is a new initiative that has a lot of processes. I won't say the parks that are less developed are failures, they are just relatively new," said Minister Datuk Seri Mustapa Mohamed at the Third World Halal Research Summit 2010 in Kuala Lumpur yesterday.

"There should be a correlation between state governments to promote halal parks as well as support each other in the supply chain," he said.

Earlier, in his speech, Mustapa said Malaysia has developed the concept of halal parks which are dedicated economic zones with the infrastructure, incentives and support services readily available for potential investors.

"We also have the Global Halal Support Centre (GHSC) under HDC, which was established to be a world leader and global reference centre in halal knowledge and halal related services for both investors and consumers. GHSC hopes to be the one-stop centre for companies and service providers in halal-related sectors," he said.

Themed "Inspiring Innovation Through Halal Research", this year's summit focuses on encouraging innovation within halal research findings worldwide. It brings together the world's halal players to explore and discuss updates on research findings, emerging technologies, trends, issues and challenges within the halal industry.

While other countries are focusing on a certain halal products like halal food, halal meat or poultry, the government aims to develop a halal eco-system in the country.

The halal eco-system constitutes the components for a holistic halal supply chain incorporating production, research and development, banking and finance, logistics, tourism and other support services.

By Business Times

Prasarana given approval to build LRT lines

Work on the LRT extension from the Kelana Jaya line to USJ 20 in Subang Jaya and the Ampang line from Sri Petaling to Taman Puchong Prima will start soon.

Syarikat Prasarana Negara Berhad (Prasarana) has been given the approval for both lines from the Department of Railways.

There will be 13 stations for each of the two lines.

Prasarana group managing director Datuk Idrose Mohamed said they had their public hearing for three months beginning Sept 15 last year.

“The proposed lines were displayed at various locations of the local authorities,” Idrose told reporters at his office in Bangsar yesterday.

“We received a lot of feedback from the public and stakeholders while meetings were also held with residents on their objections raised.

“Both the federal and state governments ordered us to study the objections raised and how we can overcome the issues. We gave solutions and approval was granted,” he said.

On the remaining “unapproved” sections, Idrose said discussions were being held with the state and federal governments and hoped to obtain approval soon after all issues and residents’ concerns were sorted out.

For the Kelana Jaya line, the first phase of construction work covering 9.2km will be from the Kelana Jaya station to USJ near the Kesas highway.

For the Ampang line, the first phase is from the Sri Petaling station to Kinrara 3 covering 7.4km.

Work to relocate telecommunication cables, TNB underground cables and high voltage transmission lines, water mains, sewerage and gas pipes is expected to start in mid-July.

Idrose said work on both the lines would start simultaneously and was expected to be completed in three years.

He said the exact time frame would be clearer once approval for the remaining sections was obtained and tender called in September.

He added that there would be 800 to 1,500 parking bays depending on the location of the stations and the ridership.

Some stations are being integrated and some with just drop-off bays without the park-and-ride facility.

By The Star

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