Getting back to basics

The real estate market across the region, including Malaysia, is still in the limelight and has shown it has the ability to change the course of things for the economy. Whether we like it or not, property can wield quite a lot of power in the way a country’s economy moves.

How the economy turns out – for better or worse – depends on whether market players, property buyers and the relevant authorities have acted responsibly and watched over its welfare.

The latest concern is that the property market in the region is heating up. China, Hong Kong and Singapore have implemented policy measures to cool their overheating property markets.

Malaysia may follow suit if the rise in property prices widens from the landed housing sector in the Klang Valley and Penang to the other parts of the country.

Undoubtedly, a healthy and sustainable property market will benefit the whole economy as it promotes stronger property values, higher employment and tax revenue, and substantial spill over benefits to the other economic sectors. As such, it is important to ensure the local property market continues to grow and be a productive contributor to the country’s economy.

To achieve that, it is important that the right practices and measures are in place. Getting the basics right is important. And all stakeholders – whether they are property buyers, developers, the regulatory authorities – has a responsibility to ensure the market behaves in a balanced and sustainable manner.

As long as we need a roof over our heads and need to buy or sell property, we are all stakeholders in the property market. Usually a laissez-faire or free market economy is a function of demand and supply. Keeping the market balanced is the best way to go but there are various factors that will affect its balance.

The important attributes for a healthy property market include quality product offerings; ensuring supply matches demand and there is no mismatch in product types; constant flow of products to meet demand; and a healthy financing market. At the fundamental level, the basic tenet for a balanced market is that supply should equal demand.

As the rise in property demand and prices is most visible in Kuala Lumpur and some other parts of the Klang Valley and Penang, the supply line for these markets should keep up with the strong demand. Developers with projects in the pipeline should look into “fast track” development models to churn out more timely products for the market.

Meanwhile, quality should also be emphasised as buyers are more selective these days and do not mind paying more for well-designed projects. In fact, the less hassle for them the better.

That explains why more higher priced projects are in hot demand because buyers don’t mind paying for products that use high quality materials and are renovation-free.

After all, well-designed and wholesome housing estates is one of the basic foundations for healthy families and societies to develop.

In keeping with that, sustainable development should be given more emphasis. If possible uniform standards should be introduced to ensure industry practitioners and the public will more readily embrace green and sustainable development practices and way of life.

Although there is a growing number of property buyers who may be opting for higher priced properties these days, not everybody is able to keep up with the rising prices.

Pro-active measures should be taken to promote home ownership among these people. I believe one of the most effective measures is to have a dedicated national housing board to plan and develop good public housing estates in various parts of the country that have different designs, built-up and price range to cater to the different affordable levels and needs of these buyers. With rising prices of many goods and services, many Malaysians are finding it hard to make ends meet.

They are not just the labourers and bottom ranking workers but include fresh graduates, newly married couples, and middle ranking executives. Instead of building high-density low-cost housing projects, it is better to plan for more medium-priced housing of between RM100,000 to less than RM300,000.

The projects should be in reasonably good and decent locations that have good basic amenities, accessibility and infrastructures. These projects should be given priority and open to all eligible Malaysians who are first time home buyers.

First-time house buyers should be allowed to continue to borrow up to 90% of the property value or even 100% depending on the situation. Ensuring accessibility to loan financing to those who really need them to own their dream home will be a boon to the home ownership campaign. Under Budget 2011, the Government’s proposal to introduce a First Home Scheme with Cagamas Bhd providing a guarantee on the 10% down-payment for houses priced below RM220,000 is a step in the right direction. The scheme will allow first-time house buyers with monthly household income of less than RM3,000 to obtain a 100% loan.

Deputy news editor Angie Ng hopes all stakeholders, including developers, property buyers and the authorities, will give more importance to the sustainable cause.

By The Star (by Angie Ng)

Govt to spend RM100m on Karambunai resort

Developer and resort operator Karambunai Corp Bhd will build an integrated eco-tourism resort (IR) in Kota Kinabalu, Sabah, for over RM3 billion.

In unveiling the 2011 Budget yesterday, Prime Minister Datuk Seri Najib Tun Razak said the government will allocate RM100 million to part-finance the development.

Najib said the project will start next year.

The IR project is now under planning and it will take about five years to complete.

It is learnt that the project, which may look like Singapore's Marina Bay Sands, will be developed over 200ha of land in the Karambunai peninsula.

Karambunai Corp has 600ha of land in the Karambunai peninsula. It has since 1997 used about 130ha to build the five-star Nexus Resort Karambunai, Nexus Golf Resort Karambunai and 200-odd units of luxury beachfront villas.

Company sources said the IR project will have four- and five-star hotels and resorts, waterfront properties and an entertainment centre.

It may also include a museum, cultural villages, a cable car and a theme park similar to the famed Disneyland.

"We have the support of the state-government, which is very pro-active in eco-tourism projects in Sabah. International experts will be roped in for the IR project to ensure that it attracts locals and foreigners, targeting a boost in tourism," one source said.

Sabah-based Karambunai Corp is linked to NagaCorp Ltd, which is listed in Hong Kong and operates a casino in Cambodia.

The two companies' common shareholder is Tan Sri Dr Chen Lip Keong, who founded NagaCorp and serves as its chief executive officer. Chen is president of Karambunai Corp.

By Business Times

RM850m for infrastructure support

The Government will allocate RM850 million for infrastructure support to accelerate corridor and regional development in the country.

Prime Minister Datuk Seri Najib Razak, in his Budget 2011 speech, said the focus will be on several clusters with specialisation and geographical advantages.

Iskandar Malaysia will get RM339 million for the construction of highways, development of housing areas as well as providing and improving public transportation services.

Najib said the amount of investment committed by the private sector in the southern Johor region was RM62 billion as at June 2010, surpassing the targeted RM47 billion. Total actual investment in the same period was RM25 billion.

The Northern Corridor Economic Region will get RM133 million, which includes the development of an agricultural products processing centre, tourism infrastructure and a biotechnology incubator centre.

For the East Coast Economic Region, RM178 million is set aside for projects including industrial parks, water treatment plants, development of tourist areas as well as redevelopment of former Pahang Tenggara Development Authority and Jengka Region Development Authority areas.

Sarawak Corridor of Renewable Energy will receive RM93 million for facilities including telecommunication, water supplies, airport and roads as well as halal food industrial parks.

For the Sabah Development Corridor, a sum of RM110 million is allocated, among others, for palm oil industry cluster projects, agro-industrial precinct and integrated farming centre.

By Business Times

Mixed reaction to PNB's tower plan

Pemodalan Nasional Bhd plans to build a 100-storey tower which is due to be completed in 2015; the Petronas Twin Towers is 88-storey high.

Pemodalan Nasional Bhd's plan to build Malaysia's tallest tower on a 7.2ha area in the vicinity of Stadium Merdeka and Stadium Negara was met with mixed reaction from property experts.

Prime Minister Datuk Seri Najib Razak yesterday announced in his budget speech of PNB's plans to spend RM5 billion on an integrated development by 2020.

The development includes a 100-storey tower which is due to be completed in 2015. The Petronas Twin Towers is 88-storey high.

One property consultant, who declined to be named, said the developer of the tower will have to be very resourceful in order to secure tenants for the space. It is understood that the tower alone will have 3.5 million square feet of space.

He also said that the RM5 billion price tag justified the amount of infrastructure work that would have to go into the development of the area, which includes roads and tunnels.

Zerin Properties chief executive officer Previndran Singhe, as a proponent of iconic structures, is all for the project.

"I've always maintained that an iconic structure doesn't have to be a tall one, but we need iconic structures to give the country a sense of identity.

"Just like how when you think Paris, you think Eiffel Tower," he said.

Previndran said with the government's various initiatives like Kuala Lumpur International Financial District and announcement of three brokerage licences, there was a high probability that there would be a need for the space come 2015.

"Also, we don't know what the composition would be like. It could be 80 per cent office space and 20 per cent hotel space, it's all subject to demand and supply," he said.

A 100-storey building on average would cost 50 per cent more per square foot than a normal high-rise building, depending on the actual design.

By Business Times

Multi-billion projects in the pipeline

PETALING JAYA: The Government has earmarked several multi-billion projects that will see the construction of several highways, a mass rapid transit (MRT) system, and the Kuala Lumpur International Financial District (KLIFD) amongst others, to be kicked off next year.

Generally, the planned development is well-received by the construction sector.

Prime Minister Datuk Seri Najib Tun Razak yesterday said in the Budget 2011 speech that under the public-private partnership (PPP) initiatives, several projects under the 10th Malaysia Plan would be implemented next year through private investment of RM12.5bil.

The Government had allocated RM1bil from the facilitation fund.

Among the PPP projects mentioned are the construction of several highways and 300-megawatt combined-cycle gas power plant in Kimanis, Sabah.

Others are the International Islamic University Malaysia Teaching Hospital, the Women and Children’s Hospital, Integrated Health Research Institute Complex in Kuala Lumpur and Academic Medical Centre.

Additionally, high-impact strategic developments were also identified.

The first is RM26bil KLIFD where the Government is prepared to consider special incentive packages to attract investors to the KLIFD.

Next, is the MRT in Greater KL with an estimated private investment of RM40bil which is expected to be completed by 2020.

Also, the mixed-development of the Malaysian Rubber Board (MRB) land in Sungai Buloh to be undertaken by the Employees Provident Fund (EPF).

This is to be completed by 2025 and the development is estimated at RM10bil.

Finally is the development of another landmark building, a RM5bil 100-storey tower, Warisan Merdeka to be developed by Permodalan Nasional to be completed by 2020.

Master Builders Association of Malaysia (MBAM) was appreciative that the Government would focus on many construction projects under Budget 2011.

Its president Kwan Foh Kwai hoped the Government would ensure the speedy award and efficient implementation of high impact projects.

“Any delay in implementation, will mean additional costs to the project,” he said in a statement yesterday.

Additionally, StarBizWeek also contacted Kwan to ask on possible shortage of construction capacity such as professional and labour workforce as well as raw materials due to the implementation of the mega-size projects.

“Because most of the projects are spanned across 10 years on average, we do not expect to experience any shortage on professionals such as engineers and architects as well as raw materials.

“The current demand of raw materials are also within the capacity of suppliers,” he said. But, Kwan was a little bit concern on labour workforce as the industry now was over-reliant on foreign workers.

“That is why MBAM supports the initiative to reshape the economy through a focus on intensifying human capital development, vocational training and improving lifelong education that will help improve the labour force in Malaysia,” he said.

Meanwhile, EPF chief economist Norashikin Abdul Hamid said the development of MRB land by EPF was expected to boost the economy and the construction sector in particular.

“The Government’s decision in selecting EPF to enter into a joint-venture with the Federal Government to develop the land has been weighed and deliberated carefully, given EPF’s strong financial position,” she said.

UEM Land Bhd director of finance, corporate affairs and investment Mohd Zakir Omar supported the PPP concept and the company had been pursuing to the Government a number of projects in the past few years involving property development.

By The Star

Budget 2010/2011: Major infrastructure boost

KUALA LUMPUR: The government made good its commitment to forge ahead with major infrastructure, construction, and oil and gas-related projects under the Tenth Malaysia Plan when the Budget 2011 proposals were unveiled on Friday, Oct 15.

Among them are the Mass Rapid Transit (MRT) in Greater KL; a 100-storey skyscraper in the heart of Kuala Lumpur and a regasification project in Malacca.

These projects would be a boon to infrastructure and construction players, as well as those providing oil and gas support services, fabricators and those specialising in pipe-coating services.

For the MRT project to be implemented next year, the estimated private sector investment is to the tune of RM40 billion. The project is envisaged to be completed by the year 2020 and is expected to increase utilisation of public transportation by at least 40%.

Permodalan Nasional Bhd will undertake development of the integrated Warisan Merdeka, including a 100-storey skyscraper that would be the tallest building in the country, at a cost of RM5 billion. The tower will be completed in 2015, and the project would retain the Merdeka Stadium and Stadium Negara as national heritage sites.

Another mammoth project is the RM10 billion Sungai Buloh project at the current Malaysian Rubber Board land covering an area of 2,680 acres. The Employees Provident Fund will develop this project.

As the oil and gas, and energy sectors remain among the major contributors towards the national economy, the government has pledged RM146 million to support the sector and expand downstream activities.

Towards this, the government proposed an oilfield services and equipment centre in Johor that will be built at a cost of RM6 billion via private investment.

Also, Petroliam Nasional Bhd would undertake a proposed RM3 billion regasification project in Malacca, to be operational by 2012.

By The EDGE Malaysia

Cyberjaya green office a milestone for Emkay

The Emkay Group, owned and controlled by Tan Sri Mustapha Kamal Abu Bakar, is set to become one of the country's top "green" property developers with the launch of its first and very own green office building in Cyberjaya.



To be opened in December, the Emkay Group through its associate company Joyful Gateway Sdn Bhd, will set another benchmark in the country and Cyberjaya's green building development.

The RM150 million office tower, which will be occupied by a multinational oil giant for the next 10 years, is set to be accredited as the country's first LEED gold certified building by April next year.

The LEED or Leadership in Energy and Environment Design rating and certification standard is a green rating given by the internationally recognised USA Green Building Council.

LEED rating has four levels of certification, including platinum, gold and silver certification. They promote design and construction practises that increase profitability, reduce negative environmental impact of buildings and improve occupants' health and well being.

The LEED rating system is based on six green design categories which are sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality and design innovation.

The office tower project was awarded to the Emkay group in October 2009 via an open tender and is expected to be launched by Prime Minister Datuk Seri Najib Razak.

Emkay representative Balasundram R. said this will be a proud and important milestone for the group and recognition to its ability as one of the country's top property developers

"The experience accumulated by the group over the years has enabled us to build this green building," said Balasundram.

The green building is 100 per cent developed by Emkay group via Joyful Gateway and is the first building in Cyberjaya to be pre-certified with the prestigious internationally recognised LEED gold certification.

The tower will house five levels of office space and three levels of sub-basement for car-parking.

It is designed to conserve energy and natural resources and provide for a healthier and safer environment designed to improve the quality of human life and increase the productivity of operations.

The form of the building capitalises on the natural terrain of the land, which slopes down towards the back.

This allows for the sub-basement carpark levels to be naturally ventilated and minimise energy usage.

Other green features include the use materials with higher recyclable content and energy-efficient equipment, the enforcement of water efficiency strategy, the control and management of the environment during construction and also the strive to improve the quality of the indoor environment.

By Business Times

UniFi for 19 projects in Johor

JOHOR BARU: Telekom Malaysia Bhd (TM) will next year sign service agreements with 19 property developers in Johor to provide high-speed broadband (HSBB UniFi) services in their projects.

TM Johor general manager Mohd Roslan Mohd Rashidi said all 19 projects were located within Iskandar Malaysia in greenfield areas where it would be easier to lay the HSBB infrastructure instead of brownfield areas or places that were already developed.

“Presently, 2,000 premises within Iskandar have access to HSBB UniFi and the figure is expected to increase to 120,000 by 2013,” he told a press conference after an agreement signing between TM and UMLand Bhd subsidiary Dynasty View Sdn Bhd for the provision of HSBB UniFi services in Taman Seri Austin.

All 316 double-storey link houses in the gated and guarded precinct under phase three of the project will receive free HSBB UniFi services for up to two years.

Taman Mount Austin is the second housing scheme in Iskandar to have HSBB UniFi connectivity. TM had in August signed a similar agreement with Mudra Tropika Sdn Bhd for its Nong Chik Heights project.

Roslan said TM would also extend the HSBB service to Pasir Gudang and Seri Alam in a few months. Areas in Iskandar that currently enjoy the service are Nusajaya, Permas Jaya and Senai.

“The Johor Baru city centre transformation plan also includes HSBB UniFi connectivity,” he said.

By The Star

Plans for national REIT body and withholding tax removal likely

PETALING JAYA: The Malaysian real estate investment trust (REIT) sector is likely to get a boost soon, with firmer plans for a national REIT company and a reduction or removal of the withholding tax for REIT investors, sources said.

The national REIT will likely include a number of assets belonging to the Government and government-linked companies (GLCs).

“There is a huge potential for “REITing” these government properties in a similar way Singapore did,” said a source.

In the 10th Malaysia Plan (10MP), there was a proposal for Pelaburan Hartanah Bhd to set up REITs to facilitate bumiputra investment in commercial and industrial properties and benefit from property appreciation.

It is likely that Pelaburan Hartanah would be used to set up the national REIT, drawing from the experience of Singapore.

There the government had made available a vast array of properties to be put into REITs such as those run by CapitaLand.

“The Singapore government wanted to turn Singapore into a REITs hub and has achieved much success with attracting capital to its market,” explained a REIT expert.

The expert added that in Malaysia, there were a vast array of properties still being held primarily by GLCs which could be put into a REIT.

There are 14 listed REITs on Bursa Malaysia with a total market capitalisation of slightly over RM10bil. In comparison, Singapore’s REITs’ market capitalisation is more than RM60bil while Japan’s stands at around RM100bil.

In another effort to boost the REIT sector and to move it on par with markets like Singapore, the Government is likely to reduce or remove entirely the withholding tax for REIT investors. This is something that REIT players had been lobbying the Goverment for the last few years to no avail.

“The aim is to bring it in line with markets like Singapore and Hong Kong where individuals and institutional investors do not pay withholding tax on REIT investments,” said a party familiar with the situation. Both local and foreign retail and institutional investors in Malaysia now have to pay a 10% withholding tax, which had already been reduced from the 25% tax rate previously. The withholding tax rate in Malaysia has not been adjusted since 2008.

ECM Libra head of research Bernard Ching said a reduction of withholding tax for REIT investors would be a major boost for the sector “as the effective dividend yield to shareholders would rise, which would translate into higher capital values for the REITs.”

Analysts have said that REITs in Malaysia had traded at a discount to those in Singapore and Japan in terms of yields and their price to net asset values.

The analysts have said that while factors such as asset and liquidity played an important role in determining valuations, the tax regime and REIT guidelines imposed by governments and authorities in individual countries also affected the attractiveness of all REITs.

Another analyst, however, said the Government may be hard-pressed to reduce the withholding tax, considering that it just postponed the implementation of the planned goods and services tax.

But it is understood that the REIT withholding tax waiver would not seriously dent the Government’s coffers in terms of the total amount of lost tax revenues from this sector. Furthermore, the last tax waiver proposal is believed to be only for a three-year period.

It is understood that these proposals may appear in the soon-to-be- announced Budget 2011.

By The Star

Call to curb loans for third home buyers

GEORGE TOWN: The Penang Master Builders’ and Building Materials Dealers’ Association (PMBBMDA) urges the Government to impose a cap on the margin of advance for housing loans for third home buyers.

The move was necessary to curb speculation, reduce gearing of purchasers, and maintain the sustainability of housing prices and the property market, PMBBMDA president Vincent Ong told StarBiz.

“The first and second home buyers should continue to get borrowing up to 90% of the property value to ensure that the demand for properties is sustained, creating spill-over effects for the contractors and building materials suppliers,” he said.

He also added that the federal and state governments should also implement more government projects in Penang, as there were so far only 28 projects, with a total value of RM172mil, awarded by the government sector for Penang for the period January to June 2010.

“Even though the number of government projects has increased from 10 in the first quarter to 18 in the second quarter, the value of government contracts is still very low and only makes up about 13% of the total value of projects awarded to the Penang state of RM1.35bil,” Ong said.

Meanwhile, PMBBMDA immediate past president Finn Choong said the Government should quickly draw up a national policy on green building.

Choong said so far the guidelines for green or environmentally friendly buildings and policy were being implemented on a piecemeal basis at the state level.

“A standard national policy on sustainable buildings would not only further spur the adoption of green lighting components such as light-emitting diodes (LEDs), and environmentally friendly materials but also commit the country towards a sustainable culture as we make the transition towards a developed nation,” Choong added.

On another matter, the PMBBMDA urged the federal government to consider deferring or revoking altogether the imposition of ad-valorem stamp duty for all service agreements in 2011.

By The Star

LBI Capital buys land in Genting

PROPERTY developer LBI Capital Bhd is buying a leasehold land measuring 2.166ha located near Gohtong Jaya, Genting Highlands, for RM5 million, to build resorts and hotel suites.

The acquisition is to enhance its property development activities given the completion of most of its projects, LBI said in a filing to Bursa Malaysia yesterday.

By Business Times

Amcorp Prop buys UK property

PETALING JAYA: Amcorp Properties Bhd is enhancing its presence in London by buying a freehold commercial property along Baker Street from British Land Offices (Non-City) Ltd for £16.25mil in cash.

It told Bursa Malaysia yesterday that British Land would convert part of the building into residential units, with work on the residential scheme scheduled to start in early 2011 and completed in 12 to 18 months.

By The Star

Rehda to hold 3-day property expo

The Real Estate and Housing Developers' Association (REHDA) will showcase a wide selection of properties at Malaysia’s Property Exposition 2010 (MAPEX 2010) from Oct 22 to 24, 2010.

In a statement today, REHDA said MAPEX 2010, with the theme '1Malaysia, 1Home', aimed to connect homebuyers to their dream home by providing a comfortable and convenient avenue for information seeking and exchange through interaction with 38 property developers.

Housing and Local Government Minister, Datuk Chor Chee Heung, will officiate at the launch of the expo on Oct 23.

Chairman of MAPEX committee, Datuk Ng Seing Liong, said in the spirit of 1Malaysia, REHDA wished to set up this platform to help the rakyat of all races own a home.

"At MAPEX, everyone can talk to the developers, pick up brochures and gather as much information as possible to make informed choices," he said.

Other participants include financial institutions, Tribunal for Homebuyers Claims, Treasury Housing Loan Division, Malaysia My Second Home, Employees Provident Fund, Malaysia External Trade Development Corp and the National Housing Department.

The event will be held at Midvalley Exhibition Centre.

By Bernama

Tighter BNM rules on property sector likely

Malaysia is expected to adopt tighter regulations in the 2011 Budget to curb potential dangerous run-up in consumer credit card spending and speculation in the property market.

“We believe Bank Negara Malaysia (BNM) is focusing on tackling household debt in 2011 to promote healthy credit card spending,” said Kenanga Research.

In its 2011 “Wish List”, Kenanga said the central bank should consider imposing tighter borrowing limit for the property sector to avert potential over-leveraging on the household segment and speculations.

It said bank loans should be lowered to between 70 and 80 per cent value ratio for third mortgage, it said.

Bank Negara should also consider capping maximum of two mortgages for each borrower, it said, adding that such a rule would slow down housing price appreciation rate, going forward.

Should tighter borrowing rules be enforced in 2011, it would not have any impact on loan growth this year as borrowings are anticipated to remain strong till year-end, it said.

“But we are cautiously optimistic on business loans as businesses in the next six months may be negatively impacted by global economic turmoil and Malaysia''s economy is not immuned from moderating global growth,” it said.

The research house said it was cautious for the second half of this year due to healthy loan growth but increasing risk on slower growth in the business segment, namely manufacturing and exports.

"Profit margin squeeze is directly triggered by the wave of intensely- competitive pricing, moderate growth expectation and possibility of a slowdown on mortgages if 70 per cent to 80 per cent loan-to-value ratio (LVR) is implemented.

“We see the implementation of a blanket 70 per cent to 80 per cent LVR cap as a real challenge to the industry's loan growth next year and could put pressure on retail banks,” it said.

However, strong asset quality suggested lower credit charge-off, going forward, compensating net profit for the lower top line growth, it said.

As for credit cards, Kenanga said new measures should see tougher limits on the number of cards a person could hold and lower credit limit on each card.

Bank Negara should restrict a consumer to own only two credit cards from two banks of their choice and allow people with an annual income of above RM24,000 to own a credit card from the current minimum requirement of RM18,000.

The central bank should also reduce spending limit by 1.5 times their monthly salary (currently 2.5-3.0 times), set at the bank’s discretion for first-time applicants.

“In our view, stricter credit card rules are prudent and limit the risk of rising household non-performing loans. It will curb spending-spree cultures that have surfaced in certain segments of the population recently,” it added.

By Bernama

LBI to buy land in Pahang for RM5.5m

Triple Equity Sdn Bhd (TESB), a wholly-owned subsidiary of LBI Capital Bhd, has signed a conditional sale and purchase agreement (SPA) with Space Passage Sdn Bhd (SPSB) for 2.16-hectare leasehold land in Pahang for RM5.5 million.

In a filing with Bursa Malaysia, LBI Capital said the purchase consideration would be satisfied by way of cash from internal funds and banks borrowings.

It said TESB, a property development company, planned to develop the land, located near Gohtong Jaya, Genting Highland, into a resort and hotel suites.

LBI Capital said the acquisition would increase the development land of the group and contribute higher earning in the future.

By Bernama

HK luxury property market rosy, say experts

HONG KONG: The latest government land auction, a site in the Kowloon Tong district in Hong Kong, has fetched a higher-than-expected price at US$210 million.

Analysts said the price reflected optimism about luxury property prices in Hong Kong and expected that the government would not be raising curbs on property speculation.

Two developers had earlier bid for the site: Robert Kuok's listed Kerry Properties, which owned an adjacent site and unlisted ChinaChem Group, the property empire of the late Nina Wang.

ChinaChem eventually won with a bid of US$210 million - 55 per cent higher than the opening price, and exceeding expectations.

By AFP

PJD to launch projects worth RM2b next year

PJ Development Holdings Bhd (PJD) is set to unveil three new projects worth over RM2 billion next year as it is bullish that market will perform better on pent-up demand for high-end properties.

Managing director Wong Ah Chiew said he is confident that the new projects, located in hot spots like Sri Hartamas, Cheras and Kuantan, Pahang, will do well.

This year, PJD did not launch any new projects except for sub-phases in existing developments because of uncertainties in the market.

The company has five on-going projects, lasting it for the next five years. They are Swiss-Garden Residences at Jalan Pudu, Kuala Lumpur, Taman Putri Kulai and Mont' Callista in Johor, Taman Bukit Istana in Kuantan, and Ocean View in Butterworth, Penang.
"These projects have been selling well. For instance, Ocean View, a condominium development, is 80 per cent sold. We have a number of enquiries for new projects and that is why we are launching," Wong said.

In Sri Hartamas, PJD will launch Dutamas Kingsbury, located near Solaris, the bustling commercial centre of Mont' Kiara, by early next year.

Dutamas Kingsbury boasts over 200 condominium units, each with built-up of more than 2,000 sq ft, priced from RM650 per sq ft, and some 60 units of three-storey super link homes, with over 3,000 sq ft in built-up area, selling from RM3 million.

"Demand and choice are there and availability of land is scarce in the Mont' Kiara area. So we hope there will be good take-up," Wong said after the company's extraordinary general meeting in Kuala Lumpur yesterday.

In Cheras, PJD plans to launch an integrated development featuring retail lots, shopoffices, a mall and high-rise serviced apartments, by mid-2011.

Wong said the best project will be the resort-style development at Sg Karang in Kuantan, located close to Swiss-Garden Resort & Spa Kuantan.

The project, which is targeted for launch in the second half of next year, will comprise seafront condominiums, and a four- or five-star hotel.

"We expect that from 2011, when all these projects take off, our turnover from property development will increase. We have several other new projects in the planning stage," Wong said.

For fiscal year ended June 30 2010, PJD posted a net profit of RM52.8 million on revenue of RM666 million, whereby 40-odd per cent was contributed by property development.

PJD also runs a profitable power cable manufacturing business and owns the Swiss Garden chain of hotels.

"We will definitely perform better in the current year," he said.

By Business Times

Subang - best choice for city airport

ONE idea that should have been given more prominence in the Economic Transformation Programme (ETP), in the context of “Greater KL”, is the creation of a city airport.

Specifically, turning the already existing Subang airport into a city airport, with more aircraft plying it, including (albeit, in a limited way), commercial jet aircraft.

City airports are a feature of many major cities the world over and they seem to nicely complement their major airports.

What sets this idea apart from other transport-related ones in the ETP is that it requires so little to get it started. That’s because we already have a city airport in form. What is needed is a mere tweaking of policies. At present, the Sultan Abdul Aziz Shah Airport in Subang only allows the operations of propeller aircraft (for commercial passenger flights).

Turning the Subang airport into a full-fledged city airport does not require the heaps of investments other transport-related plans mentioned in the ETP.

Furthermore, it requires very little changes to an already choking city. One just has to imagine the major construction works that will be carried out to build the mass rapid transit system over the next few years. And, the astronomical ball park figure of RM50bil to get that project up and running. Until today, it is unclear who exactly is going to fork that money out.

To turn Subang airport into a city airport however, will require a decent dose of political will and careful explanation to interested parties why this is a good idea now.

To be sure, this idea is not new. Everyone following the aviation industry will know of that one very entrepreneurial airline industry individual who had lobbied long and hard for his budget airline to use Subang as its base. The idea even then, made perfect sense but it was never to see the light of day, for one reason or another.

One of those reasons was a determination by the Government to make KL International Airport (KLIA) a success.

Hence the question is, will a move to have a city airport be detrimental to KLIA? From the standpoint of airport operator, Malaysia Airports Holdings Bhd (MAHB), the concern will surely be that its earnings from KLIA could be cannibalised from giving Subang more flights.

Well, that’s one way of looking at it. Another way to see it is that Subang can play a complimentary role to KLIA, just like how most city airports in bigger cities around the world do. In London, Chicago, New York, Tokyo and Shanghai, the city airports have posed no major threats to the main airports in those cities, as the city airports play a sort of niche and complimentary role. Furthermore, it is very likely that having a city airport would create new revenue streams for MAHB.

City airports tend to cater to shorter flights and appeal largely to businessmen and professionals making short flights to attend meetings.

A well-located city airport (like the one in Subang) will help reduce regional business travel time significantly, which in turn could enhance productivity levels of Malaysian professionals and businessmen.

Subang airport’s transformation into a city airport has other advantages. Since 2008, work had begun to transform it into a modern day airport by its operator Subang Skypark Sdn Bhd, with much success, judging by the growing number of passengers travelling through it. The area is also the home of the Malaysian International Aerospace Centre.

It is located not too far away from the KTM Komuter station in Subang Jaya. This poses the possibility, again without a massive amount of capital expenditure, to link the airport up with the city via KL Sentral. Imagine the connectivity and time-savings for a business traveller flying in from say, Bangkok or Singapore for a meeting in Shangri-La hotel in downtown Kuala Lumpur. Hence more little more needs to be done other than a change in government policies, to give this facility a chance to become a full-fledged city airport.

Jet aircraft plying Subang however, had been contentious in the past for another reason – some residents of Subang didn’t quite like it, and understandably so. But smaller narrow-bodied jet aircraft should be less offensive to the residents.

Also, to be noted is that Subang airport already has jet aircraft flying into it, in the form of private jets and Transmile Group Bhd’s cargo planes. Furthermore, if indeed, Subang airport is made the city airport, the township of Subang should see a multiplier effect as the connectivity would bring in more travellers needing services such as eateries and hotels. Property prices in Subang will also likely to benefit. All that may be needed is careful planning and proper communication and the chances are, there would be more people supporting the idea of making Subang airport, Greater KL’s much needed city airport.

Deputy news editor Risen Jayaseelan, who lives less than 20km from the Subang airport and who loves to travel into the region, openly declares that his arguments for more flights out of Subang Airport is partly driven by personal interests.

By The Star (by Risen Jayaseelan)

Property tax likely to be launched soon

BEIJING: China will soon start to levy a property tax on a trial basis to curb speculation and contain housing inflation, an industry group said yesterday.

Talk about a property tax has swirled in China for many years and has weighed on the domestic stock market this year amid signs that the government was about ready to implement such a levy.

“It will be launched within months, not in years,” Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum.

The central government said at the end of September that it would accelerate efforts to launch a property tax trial, though it gave no details.

He Ken, deputy head of the economic committee of the National People’s Congress, China’s largely ceremonial parliament, told the same forum that the tax rate would be higher on bigger homes and that homes below a certain size would receive exemptions.

“Imposing a property tax is a major way to curb speculation,” Mr He said. “All other measures are unable to help China fundamentally solve the housing problem.”

The municipalities of Shanghai and Chongqing have already submitted proposals to the central government for how to design a property tax. Nie said China would experiment with multiple alternatives in the trial stage.

China unveiled a battery of policies to cool its real estate market earlier this year and reinforced them at the end of September with a move to raise downpayments on some home purchases.

There had been signs of a pick-up in property transactions and prices in recent weeks but the latest steps appear to have taken the wind out of the market’s sails.

“A rebound in housing prices is unlikely this year,” Nie said.

By Reuters

Mah Sing: Keep tax relief on housing loans

Mah Sing Group has called on the government to maintain the tax relief on interest up to RM10,000 per year incurred on housing loans.

This was initially announced for sale and purchase agreements executed between March 2009 and December 2010.

"In fact, it would be good if the tax relief is extended to all interest incurred on end financing for the first home," said Mah Sing's chief executive officer Tan Sri Leong Hoy Kum in a statement today.

In line with government's initiative to promote affordable home ownership, he said the government could also consider providing grants for first-time house owners.

On the proposal for the loan to value ratio to be reduced to 70 or 80 per cent for third and fourth property, Leong said any implementation should take into consideration the industry feedback and current market consideration.

"We are confident that banks are very selective and have their own set of strict guidelines when giving out loans to ensure high quality of loans," he said.

Leong said for Malaysia to become a high-income economy, the mandatory delivery of a given percentage of low-cost houses by developers should be reviewed.

"In selected locations with high land cost, this can be replaced by the delivery of low-medium cost houses so that it will be more equitable for developers," he said.

He also hoped that the government will further ease policies to encourage foreigners to buy properties in Malaysia as this can be significant source of foreign direct investment.

By Bernama