Origin of the place

KAMPUNG Baru took shape in the late 19th century on 227 acres next to the Klang River just outside Kuala Lumpur. It was one of the projects by the British administration.

The main objective, says historian and academician Tan Sri Prof Khoo Kay Kim, was to provide a place near the town centre where the Malays could live quite cheaply.

By Jan 12, 1900, the Selangor Resident gazetted the area as Malay Agricultural Settlement. Rules were drawn up by the Resident under the Land Enactment 1887 to manage the area and to keep the settlement entirely Malay.


The Rukun Tetangga building just outside Masjid Jamek Kampung Baru in a picture taken in 1982.

The British thought that by building a village setting, they would be able to induce them to come to cultivate paddy. But the ones who came were not the ones who wanted to cultivate the land. They were mainly traders. And because they did not want to leave their village environment, they did not work in the mines or estates.

The land was said to be “partly high flat land and partly swamp” which accounts for the presence of crocodiles. It was also prone to floods. In the early days, each occupant held about quarter of a hectare. Among the first to take advantage of the place were the peons and messengers employed in government offices. The bullock cart drivers, mainly from Malacca, also arrived, followed subsequently by Javanese and Sumatrans.

At that time, transport was crucial. Already, the Malays were rowing the sampans up and down the Klang River to transport goods to take to the interiors for the miners, who were predominantly Chinese.

Gradually, that mode of transport died when the railway arrived in 1886. By 1912, buses and lorries came. The first car came at about 1900.

Although the settlement grew in terms of population, there were problems with sanitation and other issues.

The population grew by a third in five years from 2,600 in 1928 to about 3,500 in 1933. Along with this growth, land ownership became increasingly fragmented. From the initial 196 holdings in 1904, there are today 1,792 lots comprising both Malay Agricultural Settlement and the Non-Malay Agricultural Settlement land like the Dang Wangi and Chow Kit area. From a purely agricultural settlement where land is accounted for in terms of lots, there are today strata titles because low-rise and high-rise exist together with traditional Malay houses.

By The Star

Coming up with a fair and equitable solution is not easy

Talk of developing Kampung Baru is not new. Different prime ministers since Tun Dr Mahathir Mohamad have talked about it. These have remained mere words. This time around, things seem to be moving more definitely.

The daunting challenges faced by past administrations when it comes to developing Kampung Baru remain unresolved until today.

A walk around the community and conversations with the residents reveal the challenges facing the Najib administration if his plans for development are to go ahead. The first is that the holdings are small, averaging about 10,000 sq ft. Development is not possible unless pieces of land are combined together.

The second problem is multiple ownership. One 16,000 sq ft of land belongs to 12 owners. Several years ago, UDA Holdings Bhd, which were doing studies on the area, found that a quarter acre has 72 owners. On average, there are between four and 10 owners for a housing plot.

A third problem is the uniqueness of Malay Reserve Land. As the name implies, only Malays can live and own it. The difference between Kampung Baru and other tracts of Malay Reserve Land like Datuk Keramat and Sg Pencala area is Kampung Baru was specifically built by the British to house the Malays in Malaya’s pre-Merdeka Days. This means that in order for non-Malays to live or buy properties there, laws must be changed.

While these are the three main challenges that may scupper the government ambitions for enclave, there are other underlying issues at stake.

While Kampung Baru is largely tenanted today, there are those who have lived there for three to four generations. Although many of them have sold their properties during the 1980s, many have held on to their properties for rental income while they seek another lifestyle in more contemporary surroundings.

Because the land size averages about 10,000 sq ft, this enables landowners to built concrete houses large enough to accommodate between four and six families. These “new” properties are referred to as “rumah yang ada empat atau enam pintu” (a house with four or six doors), which essentially means a house with four to six households, each family taking two rooms and sharing the common space like kitchen, living area and possibly washrooms. While there are still many elevated Malay-styled houses on stilts which are typical out of a kampung scene, there are also a number of these multiple tenanted concrete housing.

The compensation is considered as a one-off windfall, while rental is a recurring source of income for them. Their ownership also remains intact.

Unless the Government is able to give them satisfactory compensation using some acceptable and transparent formula, coupled with a recurring source of income, as well as first right of purchase of properties at a price they consider as “reasonable”, they may not part with their inheritance. Even if 90% agrees to sell, it would still scupper whatever plans the Government may have, unless that 10% is located at the peripheral.

Although money is a strong incentive, because these are family homes for generations, these personal sentiments do not come with a price tag. They want development, but they also want their land rights to remain intact.

The Government has announced its intention to develop various pieces of land in and around Kuala Lumpur, some of which post far fewer challenges than does the Kampung Baru project.

The other issue is compensation. Landowners do not understand why their land is valued at between RM200 and RM300 per sq ft just because it is Malay Reserve Land when it is located smack in the city. They benchmark their land against the vicinity of Jalan Kia Peng, Kuala Lumpur, which is about RM1,000 per sq ft and the Kuala Lumpur City Centre, which is about RM2,000 per sq ft.

The Government will have to come up with a fair and equitable solution, which is easier said than done. It is a project with far larger implications than just benefiting the land owners and residents.

Assistant new editor Thean Lee Cheng thinks the stake for developing Kampung Baru is very high.

By The Star

Bolton aims to increase sales by 50pc

Property developer, Bolton Bhd, aims to increase its sales by 50 per cent for its current financial year with the launch of more development projects compared with last year.

Its executive chairman, Mohamed Azman Yahya, said with a robust property market outlook, demand was expected to be good. For the financial year ended March 31, 2010, it recorded a pre-tax profit of RM50.7 million on revenue of RM257.473 million.

"Our target this year is to increase sales, by 50 per cent compare with last year -- close to half a billion ringgit in sales this year.

"A lot of developers held back last year. I think we are getting almost five to six projects out this year and the bulk of the earnings from the projects probably will come the year after," he told reporters after unveiling 'The Wharf' commercial hub in Puchong today.

Azman said the 138-hectare project at the Taman Tasik Prima, spread over six hectares of leasehold land, comprised boutique showroom offices (to be launched on Sunday), serviced apartments (Feb 2011 launch), terraced suites and a retail mall (early 2013 completion).

"With a total gross development value (GDV) of RM450 million, the one-stop neighbourhood lifestyle development will be well-received by people," he said.

He said to-date, more than 1,500 units of properties had been sold while some 90 per cent of these units had been completed and handed over.

"With eight hectares left for development at Taman Tasik Prima, Bolton''s development plans include about 3,000 units of terraced houses, serviced apartments, shops and a retail mall.

"These properties will provide the company with a GDV and gross development profit of about RM650 million and RM150 million respectively, over the next seven years," he said.

Azman said the property market was pretty robust and would probably hold. "Bank Negara Malaysia's policy is quite accommodating. The people still prefer real estate and there is a surge in demand from overseas buyers," he said.

Bolton has a landbank of 260ha, of which 70 per cent are in the Klang Valley.

By Bernama

SunCity records impressive results

Sunway City Bhd's (SunCity) profit after tax and minority interest (PATMI) grew by 442 per cent to RM295 million for the period January-June 2010 from RM54 million in the same period last year.

Revenue rose to RM546 million from RM493 million previously.

In a statement today, SunCity said the positive performance was attributed to contributions by both the property development and property investment divisions.

"For the property development division in Malaysia, the major profit contributions were from Villa Manja in Sunway SPK Damansara, Sunway Giza in Sunway Damansara, Sunway Palazzio in Sri Hartamas and Sunway SPK 3 Harmoni in Sunway SPK Damansara.

"As a result of improved economic conditions and strong interest in the property market, all the group’s latest launches have recorded strong sales," it said.

SunCity said todate, it has successfully launched projects with a gross development value of RM966 million during the first half of 2010.

"The group’s first-half sales amounted to RM424 million and have surpassed the budgeted first-half sales of RM411 million.

"With strong sales for all new launches, the group is confident it will achieve the 2010 sales target," it said.

It said the group planned to expand to China to grow the international division.

For the hospitality division, the flagship hotel, Sunway Resort Hotel & Spa continued to enjoy high occupancy due to positive market sentiment which led to increased leisure and business travelling frequency, it said.

It said the leisure segment performed well for this period.
"Sunway Lagoon saw a significant increase in its visitors during the first half of 2010," it said.

Sunway Pyramid Shopping Mall, the crown jewel of its property investment division continued to generate the highest revenue for the group through stable rental income growth, it said.

By Bernama

Ibraco plans to exit PN17 via mixed property project

KUCHING: Ibraco Bhd has announced a proposed regularisation plan to exit the PN17 status that involves embarking on its biggest ever single mixed property development project here.

The project, called Tabuan Tranquility and covering 66ha, has a gross development value of RM512mil.

Located along the Kuching-Kota Samarahan Expressway, the project will comprise 640 double-storey terrace houses, 86 double-storey semi-detached houses, 60 townhouses, 76 four-storey shophouses, 72 semi-detached industrial buildings, 47 residential detached lots and one office block.


Chew Chiaw Han ... 'Earthwork for the project completed'

Ibraco signed a conditional joint development agreement on the project with its wholly-owned unit Ibraco LCDA Sdn Bhd and landowner Wee Song Ching on Wednesday.

The 66ha land is jointly owned by Ibraco, Ibraco LCDA and Wee.

Ibraco will buy the 2.62ha owned by Wee for RM16mil via the issuance of 16 million Ibraco shares.

Ibraco chief executive officer Chew Chiaw Han said earthworks for the project had been completed and infrastructure work was under way.

Chew said the 76 shophouses would be built first, adding that 80% of the units had been sold since the launch more than two weeks ago. The shop houses are priced between RM1.07mil and RM1.8mil each.

“The entire Tabuan Tranquility project is expected to be carried out in phases for completion in 2015.

“We will open sales for the residential properties within three months,” he told StarBiz yesterday.

The project, to be financed by internal funds and bank borrowings, is expected to generate an estimated gross profit of RM82mil.

AmInvestment Bank Group, in announcing Ibraco’s proposed regulatisation plan, said the Tabuan Tranquility project was expected to give the Ibraco group a steady stream of income for the next five years, and that it would contribute positively to the group’s future earnings.

Ibraco was classified a PN17 company after its revenue for the financial year ended Dec 31, 2009 fell below 5% of its paid-up capital.

The plan is expected to be completed by the first quarter of next year, paving a way for the lifting of Ibraco from the PN17 status. On completion of the plan, Wee’s stake in Ibraco would balloon to 17.32%, from 4.03%, and he would emerge as the second largest shareholder.

Sharifah Deborah Sophia Ibrahim, the current single largest shareholder, would see her equity interest diluted to 21.7% from RM25.07%.

Sharifah is the daughter of Ibraco founder, the late Wan Alwi Ibrahim, whose family once held more than 60% stake in the company.

Singaporean Ng Cheng Chuan and Hiap Ghee Seng Sdn Bhd, controlled by Chew, would end up with stakes of 16.61% and 11.08% respectively.

Ibraco has developed more than 404ha in Tabuan and Stutong areas and built over 10,000 properties over the years.

By The Star

Goldis builds profit hopes on GTower

GOLDIS Bhd, an investment company, is optimistic of being back in the black for the rest of the year, helped by rental income from its GTower commercial building in the heart of Kuala Lumpur.



Goldis' first quarter net profit fell 49 per cent, partly caused by the delayed opening of GTower.

To date, the building has 60 per cent tenancy. Goldis aims to raise it to 75 per cent by January next year.

GTower Sdn Bhd executive director Colin Ng expressed confidence that revenue from the building would boost the group's earnings.

Ng was speaking to reporters after the launch of MSC Malaysia status for GTower in Kuala Lumpur yesterday.

Goldis invested RM5 million in the building's fibre optic connectivity and 150,000 sq ft of net lettable area has been allocated for MSC Malaysia-status companies.

GTower is the first fully-certified green commercial building in the country, with grade A++, Green Mark GOLD and MSC Malaysia status.

Meanwhile, Multimedia Development Corp chief executive officer Datuk Badlisham Ghazali said it was planning to open two more MSC Malaysia buildings in the Klang Valley by the year-end.

"We are continuously evaluating more buildings," he said, noting that there are 19 MSC Malaysia cybercities and cybercentres in operation nationwide.

In his speech earlier, Badlisham said the government was committed to the rollout of cybercities and cybercentres to ensure that the development and benefits of MSC Malaysia were extended to the business communities.

By Business Times

PKNS plans more projects

SELANGOR State Development Corp (PKNS) hopes to achieve at least 85 per cent of the RM750 million sales targeted by the year-end.

To date, PKNS has made RM360 million sales. Last year, its sales amounted to RM390 million.

"We are optimistic of achieving at least 85 per cent of the sales target based on the number of projects we have launched this year," PKNS deputy general manager (administration and development) Md Nasir Md Arshad said in Shah Alam, Selangor.

There are more than 50 housing projects being developed by PKNS currently. It has launched 38 so far this year.

The agency plans to launch at least two more after the festive season in Alam Nusantara in Setia Alam and Puncak Tropika in Section 9 Shah Alam.

PKNS is one of the key sponsors for the Selangor Lifestyle and Property Expo 2010 (Selpex 2010), which will be held at the SACC Convention Centre on October 29-31.

The inaugural expo is expected to attract some 30,000 visitors.

More than 100 exhibitors are expected for the three-day expo comprising property developers, financial institutions and interior designers as well as those in the business of home decor items, landscaping, and travel and holiday packages.

Md Nasir said PKNS hopes to generate some RM7 million sales during the expo, with the help of several incentives.

"Due to the overwhelming response we received when we offered incentives at other showcases, we decided to continue with the offerings during Selpex 2010, and will continue to offer them until the year-end," he added.

The incentives include waivers of stamp duty and legal fees, rebates of up to RM10,000, 24 months defect liability period and easy installment schedule for the 10 per cent downpayment.

By Business Times

Kwong Hing buys Menara Pan Global

Property developer and manager Kwong Hing Group pays an estimated RM160 million for the 38-storey building in Jalan Puncak, off Jalan P. Ramlee

Property developer and manager Kwong Hing Group has bought Menara Pan Global, located within the Golden Triangle, for an estimated RM160 million from PanGlobal Bhd, sources say.

Menara Pan Global, a 38-storey building in Jalan Puncak, off Jalan P. Ramlee, houses 18 levels of office space with a total built-up of 400,000 sq ft.

The 18-year-old building also houses nine levels of hotel suites operated by Pacific Regency, while another eight levels have a total of 420 parking bays.

A source told Business Times that Kwong Hing paid a deposit for the purchase last week.

The group, whose prized assets includes Wisma Hamzah Kwong Hing in Lebuh Ampang, now has assets valued at RM600 million.

An official from Kwong Hing declined to comment when contacted.

It is understood that Kwong Hing may invest further to upgrade both the office space and suites to better compete with offices in the Golden Triangle.

The office lots are said to have 70 per cent tenancy.

Similarly, Kwong Hing will do some work on the 153-suite Pacific Regency, famous for its rooftop Luna bar, to improve its average room rate.

This purchase will see the group venturing for the first time into the hospitality sector.

A source said that the management team and the staff of Pacific Regency will be maintained where possible.

However, the name of the building could change.

It is understood that the sale forms part of PanGlobal's restructuring exercise. The company was delisted from Bursa Malaysia in July last year.

The Kwong Hing group's properties include Wisma KH in Jalan Sultan Ismail, Plaza Pengkalan in Jalan Ipoh and Wisma Fui Chui in Jalan Cheng Lok.

It also owns shopping centres along Jalan Tuanku Abdul Rahman and Jalan Petaling and Bangunan HSBC in Medan Tuanku.

By Business Times

Majuperak in tie-up to develop Perak land

KUALA LUMPUR: Majuperak Holdings Bhd announced that its wholly-owned subsidiary, Syarikat Majuperak Bhd, will jointly develop 184ha in Batu Gajah, Perak, with Xtreme New Sdn Bhd.

A memorandum of understanding to facilitate the joint development was executed on Aug 18 and both parties had agreed that a joint-venture agreement would be signed in three months, it told Bursa Malaysia.

By Bernama

Hua Yang to raise up to RM100mil

KUALA LUMPUR: Property developer Hua Yang Bhd is to undertake a fundraising exercise next year to raise between RM50mil and RM100mil which will be used for land acquisition.

“We are exploring a few options such as a bond or rights issuance,” chief operating officer Ho Wen Yan said after its AGM yesterday. (Ho Wen Yan succeeds his uncle Ho Mook Leong as CEO today, according to an announcement to Bursa.)

At present, Hua Yang’s gearing level was 0.3 times and its financial position remained comfortable.

By Bernama

High-end houses by Seri Alam soon

PASIR GUDANG: Seri Alam Properties Sdn Bhd, a wholly-owned subsidiary of UMLand Bhd, will launch its high-end residential properties at Bandar Seri Alam starting next year.

General manager Mohd Noor Abdul Salam said the company would allocate 202.34ha at the ongoing township project for the high-end homes.

He said the properties would include double-storey cluster and semi-detached houses and bungalows priced from RM450,000.

“The demand for high-end properties in Johor Baru is on the uptrend, especially with Iskandar Malaysia progressing well,’’ he said.


Tan Cher Puk (left) and Mohd Noor Abdul Salam at the showhouse of Bluebell @ Garden Residency in Bandar Seri Alam

Noor was speaking to StarBiz at the launch of the company’s double-storey link houses, Bluebell @ Garden Residency, by Johor Jaya state assemblyman Tan Cher Puk recently.

Pasir Gudang is one of the five flagship development zones under the Eastern Gate Development of Iskandar. Other zones are Johor Baru City Centre, Nusajaya, Western Gate Development and Senai-Skudai.

Noor said the entry-level prices for high-end properties in Pasir Gudang were still much lower compared with those in Nusajaya.

“There are many ongoing and planned infrastructure projects for Pasir Gudang and this will help improve connectivity,’’ he said.

The ongoing projects include Coastal Highway linking Pasir Gudang via Permas Jaya second bridge and phase two Senai-Pasir Gudang-Desaru Expressway.

In the pipeline are the integrated transport system which will consist of light rail transit lines from Pasir Gudang to Johor Baru and Nusajaya and the extension of mass rapid transit line from Singapore to Pasir Gudang.

Noor said the “City of Knowledge” status given by Iskandar Regional Development Authority to Bandar Seri Alam would boost the township’s image.

Masterskill University College of Health Sciences Universiti Kuala Lumpur and Universiti Teknologi Mara would set up branch campuses in the township. This is expected to create a student population of 40,000.

Bandar Seri Alam covers 1,347.60ha, of which 60% has been developed into 10,000 mixed properties. The remaining 540ha will keep the company busy for the next 10 to 15 years.

By The Star

DNP to expand outlets, existing brands

DNP Holdings Bhd, which has 56 retail outlets carrying high-street labels like Dorothy Perkins and Top Man, plans to add another 20 to 30 similar outlets over the next three years.

General manager Lee Kong Beng said the company is likely to stick to the Klang Valley, Penang and Johor for the expansion.

"The plan is to expand our existing brands and we may bring in one or two new brands next year," he told Business Times.

The company, via its retail arm DNP Clothing Sdn Bhd, also holds the Malaysian franchise for other well-known clothing labels like Warehouse, Karen Millen, Pumpkin Patch, Diva and Canali.

It is set to open its first "Uniqlo" outlet in Malaysia in November at the Farenheit 88, formerly known as KL Plaza in Kuala Lumpur.

DNP's parent, Wing Tai Asia Group, also has other franchises and it may capitalise on that to bring new fashion labels to Malaysia, Lee said.

On its property division, DNP's Impiana Commercial Hub in Bukit Mertajam on mainland Penang is set to be launched in September or October.

Sprawled over 20 hectares, the commercial development is set to house a Tesco hypermarket, food and beverage outlets, a medical centre, a budget hotel and a dedicated area for electrical and electronics shopping.

DNP reported a net profit of RM53.2 million for the year to June 30 2010, which is almost four times what it made in 2009, as it made more money from its property and trading businesses.

Its revenue jumped by more than a third to RM354.3 million.

By Business Times

US wants new housing finance framework

WASHINGTON: The US government’s role in housing finance should undergo “fundamental change,” but it should still provide some guarantees in the mortgage market, said Treasury Secretary Timothy Geithner.

Setting the stage for what promises to be a long debate about fixing Fannie Mae and Freddie Mac, Geithner convened a conference of housing industry leaders and heard a range of ideas about reforms for the US$10.7 trillion mortgage market.

Almost two years after the government seized Fannie and Freddie to save them from collapse, there is a widely held view that reform is needed, but the agreement ends there.

“It’s safe to say there’s no clear consensus yet on how best to design a new system. But this administration will side with those who want fundamental change,” Geithner said.


Timothy Geithner … ‘This administration will side with those who want fundamental change.’ — AFP

Fannie and Freddie – recipients of US$150bil in taxpayer bailout money since being taken over by the Bush administration in 2008 – pose a vexing policy challenge to the Obama administration as November elections approach.

The firms’ pursuit of growth and profits helped precipitate the financial crisis of 2007 to 2009, but their vast resources also helped minimise its impact.

And since their takeover, the two have only become more prominent in the market.

Together, the two companies and the Federal Housing Administration now back 90% of new US home mortgages.

“We will not support returning Fannie and Freddie to the role they played before conservatorship, where they took market share from private competitors while enjoying the perception of government support,” Geithner said. “We will not support a return to the system where private gains are subsidised by taxpayer losses.”

But Geithner backed some government guarantee for mortgages and US support for housing more broadly, setting early limits on the reform discussion.

“There is a strong case to be made for a carefully designed guarantee,” he said. “The challenge is to make sure that any government guarantee is priced to cover the risk of losses, and structured to minimise taxpayer exposure.”

As the administration worked to draft a housing overhaul by January, the key question, Geithner said, would not be whether government has a role to play in supporting the mortgage market and the “American dream” of home ownership.

In Geithner’s view, government has a key role since private markets, as shown in the 2007 to 2009 credit crunch, “left to their own devices, find it hard to resolve financial crises.”

The conference, including some of the mortgage sector’s top lenders and investors, was billed as a “listening session” to help the administration develop its overhaul plan. It comes amid signs of persistent weakness in housing markets – an issue that could weigh on voters headed to the polls in November, especially in Florida and California.

Housing starts nationwide rose in July from a downwardly revised level in June, but the pace of new construction was much weaker than forecast and permits for future building fell to their lowest level in more than a year, according to a US Commerce Department report on Tuesday.

A Deutsche Bank study looked at mortgage delinquency rates in the country’s 435 congressional districts, all of which are up for grabs in November.

More than 15% of mortgages were delinquent by 90 days or more in 60 of those districts, with Florida and California accounting for 44 of them.

The average US congressional district had more than 9% of its mortgages delinquent by 90 days or more – over two and a half times the delinquency rate on Election Day in 2008.

Bill Gross, co-founder of Pacific Investment Management Co, which operates the world’s biggest bond fund, told the conference the administration should move quickly on a new refinancing programme for current mortgages backed by Fannie and Freddie. — Reuters

The US economy was approaching a “cul-de-sac” unless a positive fiscal stimulus came soon, he said.

By Reuters

Penang property mart set to boom

The Penang property market is expected to enter a boom cycle as there are signs of a gradual price rise due to land scarcity in prime areas.

Hunza Properties Bhd (HPB) executive chairman Datuk Khor Teng Tong yesterday said land scarcity, teamed with a hike in building material prices and labour costs, have contributed to this trend.

"Going forward, the shortfall in supply of properties cannot be addressed and overcome in the short-term.

"This will lead to a situation where supply is unable to meet demand and further contribute to the increasing trend in property prices," he told an analyst briefing in Penang when announcing the company's 2010 fiscal results.

For its financial year ended June 30, HPB recorded revenues of RM258.7 million and profit after tax of RM50.9 million.

The figures reflect an increase of 172 per cent on revenues and 84 per cent on profit after tax respectively compared with the preceding financial year.

HPB benefited from stronger sales in fiscal 2010.

"Construction works on the two residential towers of our Gurney Paragon project in Pulau Tikus have also been progressing well, thus contributing to higher revenue and attributable profit on percentage of work done," he added.

On the construction progress of the sea-fronting RM450 million Gurney Paragon project, which comprises a residential development, an office block and shopping mall, Khor said:

"It has sped up with its superstructure completed up to its top, the 43rd-storey, and this makes Gurney Paragon the tallest condominium in Penang.

"As the demand for high-end property in Penang remains high, we expect a further increase in property price, thus making the outlook for the property market very positive.

"Due to these reasons, HPB expects a stronger performance for the 2011 financial year," he added.

Gurney Paragon has attracted both local and foreign interest, its developers say, with condominium buyers from 20 countries so far.

Of the total 220 units launched, Khor said 130 units with a sales value of RM242 million have been sold as of June 30. The shopping mall is due to start operations in early 2012.

By Business Times

Mapletree plans US$928mil Japan property fund

TOKYO: Mapletree Investments, a real estate firm wholly-owned by Singapore state investor Temasek Holdings, plans to launch a Japan property fund of around 80 billion yen (US$928mil) this year in a bid to expand in the country’s property sector ahead of its rivals.

The new fund, with 30 billion yen of equity, will invest in business-related properties such as data centres, research and development facilities, and office buildings just outside central Tokyo and other big cities, Terence Heng, general manager of Mapletree Investments Japan, told Reuters in an interview.

“We need to get ideal properties now. It’s likely to become difficult to see those attractive deals if we miss the chance now ... The opportunity window is open for a year or two, or even shorter period than that,” he said.

Mapletree, which opened its Japan office in 2007, has been ramping up its investment in Japanese logistics facilities mainly for its Mapletree Logistic Trust, which owns warehouses and other industrial properties across Asia.

In Japan, the Singaporean company manages 12 properties, mostly logistics assets, worth 60 billion yen. But it aims to more than triple this to 200 billion yen in the next two to three years before competition heats up in the market, Heng said.

”We should proactively buy properties if they are good,” he said.

By Reuters

PNB primed for KL Golden buys

Permodalan National is looking at acquiring B grade (commercial buildings) with potential and sell them to PNB's real estate investment trust, Amanah Harta Tanah PNB.

Permodalan National Bhd's (PNB) asset management unit is in talks to buy commercial buildings in the heart of Kuala Lumpur as it seeks to provide assets for its property trust.

PNB Commercial Sdn Bhd, which has RM1 billion of assets, plans to buy properties in the Golden Triangle area, improve their performance and sell them to PNB's real estate investment trust (REIT), Amanah Harta Tanah PNB.

"We have identified a few buildings within the Golden Triangle. We are looking at the feasibility and evaluating the target assets," PNB Commercial chief executive officer Datuk Mohamed Marzuk Basir said.

However, there is no set allocation or fund for these acquisitions.

When the study is completed, it will be presented to the board to decide on the acquisitions.

"We are looking at B grade (commercial building) with potential," Mohamed told Business Times in an interview.

"We will take an underperforming asset and then nurture it to a respectable yield level within three to five years," he said.

These buildings typically have about 100,000 sq ft to 150,000 sq ft nett lettable area.

PNB Commercial currently manages 19 assets. Out of this, 11 are owned and managed by PNB Commercial, while the remaining eight are managed for PNB.

Apart from office buildings, assets under its management include retail and hospitality properties.

For the time being, it is not looking at expanding its retail or hospitality portfolio but only enhancing its existing assets.

By Business Times

Dijaya to launch Danga Bay project by Dec

DIJAYA Corp Bhd will launch phase one of Tropicana City@ Danga Bay, its RM3.8 billion integrated waterfront flagship project in Johor by December this year, its chief said.

Phase one will feature some 700 units of upper middle serviced apartments in three blocks, worth RM600 million or more than RM600 per sq ft each, managing director Datuk Tong Kien Onn said.

"We hope to start construction by December and realise the units block by block. Piling works have been completed. We are confident of the project," Tong said in an interview with Business Times in Kuala Lumpur recently.

Dijaya is developing 14.8ha of prime waterfront land at Danga Bay in Johor Baru over the next 10-12 years with Iskandar Water Front Sdn Bhd (IWSB).
Goldhill Quest Sdn Bhd - a 60:40 joint-venture between Nagasari Cerdas Sdn Bhd (a Dijaya unit), and Global Corp Development Bhd (owned by IWSB) - bought the land from Danga Bay Sdn Bhd for RM308 million or RM190 per sq ft.

It is one of the biggest private land deals since the inception of Iskandar Malaysia in 2006, where it is located.

Goldhill plans to build a retail street mall, office towers and residences, SoHo (small office/home office) and a four- or five-star hotel.

"We are still working out the components. The project will be similar to the Mid Valley development. But our mall will be different as it will focus on food and entertainment," Tong said.

Tong said Dijaya is targeting homeowners, expatriates and investors from Asia Pacific and Europe.

He said there will be spillover from Singapore with the opening of Resorts World Sentosa and The Marina Sands resort, where each have said they will employ more than 35,000 people when the projects are fully completed.

"We expect many of the staff to be relocated to Johor. Singapore expects 10 million additional tourists a year and we hope to ride on that with the opening of a four- or five-star hotel within our development.

"We may look at international operators like Starwood or Ritz Carlton Group to run the hotel. Nothing is on the cards yet as the hotel will be developed at a later stage," Tong said.

Dijaya, known for its flagship Tropicana Golf and Country Resort development in Petaling Jaya, has RM290 million cash in hand which it will partly use to start the development, Tong said.

"We will look at bank loans but we are expecting the project to be self-financing later," he said.

By Business Times

Dijaya banks on Iskandar factor

JOHOR BARU: Dijaya Corp Bhd is banking on the long term development of Iskandar Malaysia as the main draw in attracting interest to its Danga Bay project here.

Group chief executive officer Tan Sri Danny Tan Chee Sing said apart from the project’s location on prime waterfront land, Johor’s proximity to Singapore would be another selling point.

“The timing is right for us to come to Iskandar in view of the good progress taking place in the economic growth corridor since its launch,’’ he said on Aug 10 at the signing of a sale and purchase agreement for two parcels of land totalling almost 15 ha in Danga Bay worth RM308mil.

The plots of land were acquired by Goldhill Quest Sdn Bhd - a 60:40 joint venture between Nagasari Cerdas Sdn Bhd (a wholly-owned subsidiary of Dijaya Corp) and Global Corporate Development Sdn Bhd, which is 100% owned by Iskandar Waterfront Sdn Bhd (IWSB).

Tan represented Dijaya at the event while IWSB was represented by its chairman Johar Salim Yahaya.

The signing ceremony was witnessed by Johor Mentri Besar Datuk Abdul Ghani Othman.

The joint venture company will develop the land which has a gross development value of RM3.8bil over the next 12 years.

Tan said the components of the integrated waterfront development project would include a stand-alone retail mall, four and five-star hotel towers and serviced apartments blocks.

“The project is likely to be known as Tropicana @ Danga Bay, after our flagship Tropicana Golf and Country Resort in Petaling Jaya,’’ he said.

By The Star

There’s a price to pay for convenience

Rising house prices show that residential properties have become the “hottest” pick for investors who are flushed with cash and believe investing in a tangible asset is a good investment choice.

Although it may seem that the property market is on a “wholesale revaluation exercise” with prices climbing across-the-board, it is actually not so.

A check in the newspapers’ classified pages under the “houses for sale” column show that the price hikes are location centric. There is always a price to pay for convenience and living close to mature neighbourhoods with good basic amenities and infrastructure.

If one cares to check around, there are still many affordably priced (RM300,000 to RM400,000) new or second-hand houses out there, but one must be prepared to stay further away from the “conveniences”.

I believe there are various reasons why people invest in property over other investment instruments. The property market’s tenacity in withstanding the global financial crisis must have converted many sceptics to build up their investment portfolio with property assets.

Malaysians’ penchant to save has translated into lots of liquidity available for investment. Savvy investors will invest their money in instruments that will offer good returns over cost and risk.

The prevailing low savings interest rate and the under performing equity market are some of the “push” factors that are promoting property investment.

While these financial instruments are still affected by the external uncertainties in the US and Europe, property investments are very much locally-driven and has proven to be a reliable asset class.

The value of Malaysian properties, both houses and shop lots in good locations, have sustained very well so far and there have been more upsides than downsides.

The quick rebound of the property market in Singapore and Hong Kong may also have contributed to a resurgence in property buying here.

There is also pent-up demand for properties as some people who have procrastinated on signing on the dotted line previously have decided to do so now after seeing the market’s ability to withstand the tough times.

Supply has been slow to catch up after widespread project deferments by developers in 2008. New project launches have just resumed towards the later part of last year.

The high demand over supply has naturally resulted in housing prices escalating in various parts of Kuala Lumpur and the Klang Valley. Penang is also another hot property market where prices have come close to Kuala Lumpur levels and still climbing.

This is a good opportunity for less well known developers with reasonably sized land bank to build affordably priced homes to woo buyers.

One way developers can do this is to come up with products that allow buyers the flexibility to decide their own house built-up and layout plan, just like in the “Sims” computer game.

Instead of the “one-size-fits-all” model that is the norm now, it will be a value added service to buyers if there are various sizes and layout plans to choose from.

Some families have elderly folks and it would be more practical to have at least one or two bedrooms downstairs for a double-storey house.

I have heard mothers of teenage children staying in 2½-storey to three-storey houses complaining that they are “cut off” from what their children are up to these days. They yearn for “the closeness” of their single-storey or double-storey houses.

Large central parks would be another huge selling point as residents would like to unwind and relax in the open environment.

At the end of the day, all stakeholders must do their part to ensure the property market continues to be sustainable.

Developers should be more pro-active and ensure they take the necessary steps to “tune in” to their customers’ needs and ensure more timely launches to meet rising demand.

Buyers also have the responsibility to be prudent and not to over-commit themselves or default on their loans.

Deputy news editor Angie Ng thinks it is a good idea for relatives or friends, who want to stay close to each other, to pool their resources to buy a nice piece of land and turn it into a nice housing enclave.

By The Star (by Angie Ng)

CapitaLand’s Malaysian success

Last month, Prime Minister Datuk Seri Najib Tun Razak told Johor Umno branch leaders not to be emotional or parochial about Singapore investments.

For years, there has been this unhappiness about Singapore’s presence in the state, from the day tourists to corporate investors.

The fact remains that Johor – and the country – need the dollars, be it US or Singapore dollars, or any other foreign currency, for that matter.

Singapore’s business involvement in Malaysia can best be seen in the sprawling interest of CapitaLand Ltd, Southeast Asia’s largest property developer.

The company is also part of Temasek Holdings, the investment arm of the Singapore government. While CapitaLand is most bullish about its investments in China, it also upbeat about the region.

CapitaLand’s presence in Malaysia has been significant over the last 10 years.

In this relatively short time, CapitaLand has successfully branded itself in the Malaysia property scene.

Among its first condominium projects in Malaysia was Suasana Sentral, a 400-unit project built in partnership with Malaysian Resources Corp Bhd in 2001, when the Malaysian government was promoting Brickfields as a transport hub.

Since then, there have been various other projects. Says property consultancy Knight Frank MD Eric Ooi: “It was between 2002 and 2007 that the group became very aggressive in the Malaysian property scene. Its foray into the vicinity of the Petronas Twin Towers started with Marc Residences in 2002. It was already working on its branding then.”

Marc Residences was the third project to be launched after Stonor Park and Dua.

“They entered the high-end condominium segment because they saw pent-up demand for these condominiums. From their experience in Singapore, they saw the potential of that location and the demand for such high-end modern living, which Kuala Lumpur had never seen before,” says Ooi.

CapitaLand has since gone into quite a number of residential developments.

Among them Hamsphire Residences (with Zelan Bhd), Kiaraville and Tiffany by i-Zen (Ireka Corp Bhd) and Zehn Bukit Pantai (a joint venture with the landowners), to name a few. All of them are high-rise residentials. Its latest project is Seni Mont’Kiara (also with Ireka).

Successful branding

CapitaLand also has interest in UM Land Bhd, which is involved in township development in Johor.

Says Paul Khong, executive director of Richard Ellis Sdn Bhd: “CapitaLand has successfully branded itself in Malaysia, which is why other developers are keen to co-brand with them today.

“The name CapitaLand comes with a premium, and many Malaysians understand that,” says Khong.

CapitaLand’s presence in the commercial sector in Malaysia is through Quill Capita Trust (QCT), a real estate investment trust listed on the Main Market of Bursa Malaysia.

Currently, QCT has assets totalling about RM788.4mil, comprising 10 commercial properties in Cyberjaya, Kuala Lumpur, Shah Alam, Petaling Jaya and Penang.

CapitaLand is also involved in serviced residences through The Ascott Ltd, one of the world’s largest international serviced residence owner-operator, with more than 26,000 serviced residence units in key cities of Asia-Pacific, Europe and the Gulf region.

The company operates three brands – Ascott, Somerset and Citadines, and its portfolio spans 71 cities in over 20 countries.

In Malaysia, Ascott is the largest international serviced residence owner-operator, with nine properties offering close to 1,200 units.

Ascott manages seven properties in Kuala Lumpur – Ascott Kuala Lumpur, Ascott Sentral Kuala Lumpur (opening in 2013), Somerset Seri Bukit Ceylon, Somerset Ampang (opening in 2010) and three properties for corporate leasing.

In Kuching, Ascott operates Somerset Gateway and Citadines Kuching Uplands (opening 2012).

Says a CapitaLand spokesman: “CapitaLand has the experience and expertise along the entire real estate value chain. Exporting real estate expertise overseas has been CapitaLand’s forte. The group is an investor, developer, operator and manager, and provides financial solutions across sectors and geographies.

“Today, the group has nine listed entities, the latest being CapitaMalls Malaysia Trust, with a total market capitalisation of about S$40bil. It manages about S$50bil worth of real estate assets in more than 110 cities in over 20 countries.”

CapitaLand has no choice but to go overseas. With Singapore being just 700 sq km, it does not have much of an option other than to go offshore in search of opportunities.

After all, the whole of Singapore can only absorb 15,000 apartments a year, but in Shanghai alone, the same number of units can be sold within a week.

By The Star