UEM Land to buy Sunrise for RM1.4b

Sources say the all-share offer values Sunrise at RM2.80 a share, 11 per cent higher than Tuesday's closing price of RM2.52

UEM Land Holdings Bhd plans to take over rival Sunrise Bhd in a deal valued at some RM1.4 billion to expand and develop the expertise to build and market luxury properties.

Sources said the all-share offer values Sunrise at RM2.80 a share. This is 11 per cent higher than its last closing price of RM2.52 on Tuesday.

Three major shareholders, including Datuk Tong Kooi Ong, who hold more than 40 per cent of Sunrise, have agreed to the deal, which is structured as a voluntary general offer.

"UEM Land needs the expertise in luxury development. They don't have the marketing capabilities," said one of the sources.
Sunrise, valued at RM1.25 billion currently, is well known for its high-end development at Mont'Kiara. Although its market value is half that of UEM Land, its net profit is bigger at RM134 million in the financial year to June 30 2010.

UEM Land is valued at RM2.45 billion and its net profit in the financial year to December 31 2009 was RM115 million.

Shares of both UEM Land and Sunrise have been suspended from yesterday until 5pm today. UEM Land is due to hold a press conference today to announce a mega corporate exercise.

The deal means that shareholders of Sunrise will still be able to profit from the potential future earnings of the combined group.

UEM Land is the developer of Nusajaya in Johor.

The company has 3,400ha of undeveloped land in Nusajaya, targeted to be developed by 2025.

It is also learnt that Tong will become a director of UEM Land and he will also chair the development committee of the group.

By Business Times

UEM Land buying stake in Sunrise?

KUALA LUMPUR: UEM Land Holdings Bhd is believed to be acquiring a substantial stake in Sunrise Bhd following requests for a trading suspension of their shares today pending an announcement.

According to filings with Bursa Malaysia, UEM Land and Sunrise have requested for the trading suspension that started at 9am yesterday to end at 5pm today.

In separate statements, the companies each said it would announce a “corporate exercise”.


Datuk Wan Abdullah Wan Ibrahim is expected to give details today.

In its statements to the stock exchange, UEM Land said it had requested for a trading suspension pending a “material announcement on a potential corporate exercise”.

Attempts to get UEM Land to comment were unsuccessful while a Sunrise representative said the company was not able to disclose details of its material announcement.

Market talk has it that the acquisition by UEM Land would be made via a share swap. According to analysts, there could be share swap between the companies which eventually could result in UEM Land becoming a substantial shareholder in Sunrise.

Another analyst said there were lots of speculation in the market currently. He said the acquisition could result in UEM Land privatising Sunrise. “If so, I’d imagine that UEM Land will issue shares to buy into all of Sunrise. Whether it’ll be fair to minorities depends on the mechanices of the swap.”

However, it is not certain whether the deal will be a straight share swap or share swap with cash option to Sunrise shareholders.

It is unclear what price UEM Land will pay for Sunrise, whose share price has been on an uptrend since Oct 27.

According to Sunrise’s latest annual report, Casa Unggul Sdn Bhd is its single largest shareholder with a 24.41% stake. Casa Unggul is a company controlled by executive chairman Datuk Tong Kooi Ong. The Employees Provident Fund Board has 12.61% voting shares in Sunrise.

Analysts said Tong did not address the potential corporate exercise with UEM Land at Sunrise’s analysts briefing yesterday to announce its quarterly results.

In a media advisory yesterday, UEM Land said it was “set to embark on a mega corporate exercise” with details to be announced today by managing director/chief executive officer Datuk Wan Abdullah Wan Ibrahim.

UEM Group Bhd group managing director/chief executive officer Datuk Izzaddin Idris is also expected to be present at the briefing.

Sunrise closed at RM2.52, its highest in 12 months, prior to its suspension yesterday. The counter has gained more than 22% year-to-date.

UEM Land has appreciated more than 84% year-to-date. It closed at RM2.26 ahead of the suspension.

Meanwhile, Sunrise is upbeat on its prospects for the current financial year ending June 30, due to its substantial unrecognised revenue of RM863.8mil as at Sept 30.

“The profits from these projects will be recognised over the current and subsequent financial years. The group is planning to launch new residential and commercial projects in the near future in order to sustain longer term profits,” Sunrise said in the notes accompanying its results

Sunrise posted a slightly lower net profit of RM36.7mil for the three months ended Sept 30 compared with RM37.3mil a year ago.

In a filing with Bursa, Sunrise said its pre-tax profit surged to RM52.2mil from RM50.2mil and earnings per share fell to 7.41 sen from 7.52 sen before. It also announced an interim dividend of 26.67 sen per share less 25% taxation amounting to RM99mil or 20 sen per share.

Revenue for the period was lower at RM171.3mil from RM190.3mil a year ago.

“Despite lower turnover, higher pre-tax profits were achieved on the back of higher margins and lower operating costs for the quarter under review,” Sunrise said.

The main contributors to the group’s financial performance for the quarter were its ongoing residential and commercial developments.

ECM Libra head of research Bernard Ching said on an annualised basis, the first quarter results came in within market expectations but below the research house’s full year estimates as it expected subsequent quarters to report strong numbers.

He said this was backed by the unrecognised revenue of RM863.8mil as at Sept 30 and including the strong sales from its maiden project in Canada, Quintet, the unrecognised revenue would swell to RM1.22bil as at Oct 31.

“The net interim dividend of 20 sen came as a surprise but we believe this is non-recurring. Nonetheless, we believe the company may reinstate its previous dividend payout guidance of 35% which has been scrapped over the last three financial years in order to conserve cash amid the uncertain economic outlook then.

“As the net debt/equity ratio of the company has been reduced from 0.52 times in FY08 to 0.34 times in FY10, we expect the company to have greater financial capability to reward its shareholders going forward,” Ching said.

Another local analyst said Sunrise’s results were OK and there was no major surprise. However, he concurred with Ching that Sunrise’s project in Canada did exceptionally well and almost fully taken up.

“The dividend was indeed a surprise. We were only expecting FY11 dividiend to be 5.5 sen,” he said.

By The Star

ECM keeps 'buy' call on Sunrise

ECM Libra Investment Research has maintained its "buy" call on Sunrise Bhd with the target price unchanged at RM3.58.

In a research note today, it said the target price was unchanged, pending the widely expected announcement of a corporate exercise today involving UEM Land Holdings Bhd.

ECM Libra reduced its numbers for the financial year 2011 to 2013 taking into account, retention of some units from future launches, for the operation of serviced apartments.

"But this will be offset by recognition of Quintet - residential project in Richmond, Canada - earnings on percentage completion basis at group level instead of at unit level.

"Despite our above consensus numbers, we still expect Sunrise to post record earnings in financial year 2011, backed by strong sales and unrecognised revenue," ECM Libra said.

Sunrise launched the phase one of Quintet with a gross development value (GDV) of RM374 million on Sept 28 and the project is sold-out as of to date.

Phase two with a GDV of RM825 million will be launched in the first quarter next year.

Meanwhile, Menara Solaris with a GDV of RM480 million is expected to be launched within the next three weeks.

During the first quarter financial year 2011, property sales of about RM100 million was achieved, but this does not include RM351 million sales from Quintet achieved in Oct 2010.

Unrecognised revenue remains flattish quarter-on-quarter at RM864 million but would swell to RM1.2 billion in Oct 2010, ECM Libra said.

OSK Research, meanwhile, said it is maintaining a "buy" call on Sunrise but downgraded the target price to RM4.33 from RM4.62 previously.

This was due to the unexpected interim dividend surprise of 26.67 sen as well as some changes to its forecast assumptions on the Quintet.

OSK Research is upgrading Sunrise's financial year 2011 and 2012 earnings upwards by 5.6 per cent and 12.1 per cent respectively.
The management has been guided that earnings from the Quintet, including phase two, would be recognised on a progress billing basis.

Although Sunrise's first quarter financial year 2011 turnover fell by 10 per cent year-on-year, net profit dipped by a mere two per cent as progress billings from its recently launched high-margin projects, such as 11 Mont Kiara and 28 Mont Kiara, picked up momentum.

On the other hand, quarter-on-quarter turnover surged 32 per cent but net profit dropped five per cent on higher expenses incurred on commencement of its Canadian project.

Sunrise's latest unbilled sales totaled RM1.22 billion amounting to 2.1 times of financial year 2010 total turnover.

By Bernama

New rule to cool property speculation

Bank Negara Malaysia has put in place a rule that allows banks to lend only up to 70 per cent of the house value.

The new mortgage lending rule, which applies only to borrowers taking up a third housing loan, is meant to curb excessive investment and speculative activity in urban areas.

"While Malaysia is not experiencing a general property price bubble, targeted pre-emptive measures are appropriate to moderate the increases in property prices that are evident in select locations, arising from purchases that are speculative in nature.

"This measure is expected to moderate excessive investment and speculative activity in the residential property market and to ensure affordability of homes for genuine house buyers," Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said in her keynote address at the Financial Industry Conference in Kuala Lumpur yesterday.

She gave the assurance that financing facilities for the purchase of first and second homes would not be affected and that borrowers would still be able to obtain financing for these at the current loan-to-value ratio (LVR) applied by individual banks, based on their internal credit policies.

The new rule takes effect immediately. Banks were previously not subjected to any curbs on mortgage lending.

The Association of Banks in Malaysia (ABM), whose members comprise the country's 23 commercial banks, supported Bank Negara's move, saying that it was "timely and pre-emptive".

"While the banking sector is wholly in support of house ownership, we agree that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble," its chairman Datuk Seri Abdul Wahid Omar said in a statement yesterday.

Abdul Wahid, who is also the chief executive officer of top lender Malayan Banking Bhd (Maybank), said the move was not expected to dampen or have an adverse impact on the growth of residential property development, nor on the banks' house financing business.

The ABM and its member banks had engaged with Bank Negara on the matter prior to the latter coming out with the ruling.

A banking analyst from a foreign brokerage noted that most banks, particularly the bigger ones, already adopt strict LVR on borrowers taking up a second, and especially third, housing loan, with location also being an important factor.

As such, the analyst agreed with Abdul Wahid that the new rule was not likely to have a big impact on the banks' mortgage business.

"On a third loan, it's already quite hard to get an 80 per cent LVR now," she remarked. For a first loan, banks usually lend up to 90 per cent of the house value, or even up to 100 per cent in some cases.

The country's biggest mortgage players by market share are Public Bank Bhd, CIMB Bank Bhd and Maybank.

Property developer Mah Sing Group Bhd also does not see the new rule hurting overall sentiment of the market significantly as it comprises mainly first-time buyers and upgraders.

Neither does its group managing director Tan Sri Leong Hoy Kum see a property bubble building up as the price increases have been largely those of properties with good concepts by well-known developers and in good locations.

Zeti, in her speech, noted that residential property prices in the country had increased steadily in tandem with economic development and rising household income.

"In the more recent period, however, certain specific locations, particularly in the urban centres, have experienced faster growth, both in house prices and the number of transactions. Supporting this trend has been the increase in financing for multiple-unit purchases by a single borrower. This suggests investment activity that is of a speculative nature," she said.

Property prices in Malaysia rose 5.6 per cent in the first quarter of this year and 4.2 per cent in the second quarter, according to Bank Negara.

By Business Times

New mortgage rule 'positive' move: Citi

Malaysia’s move to tighten mortgage rules is “positive” for the nation’s banks as it will help prevent a property bubble and limit the risk of household non-performing loans, Citigroup Inc analyst Fiona Leong said in a report yesterday.

The central bank yesterday placed a limit on the loan-to-value ratio for people taking out third mortgages to buy homes in a bid to moderate “excessive” investment and speculation in urban areas.

Banks with bigger exposure to home mortgages are Hong Leong Bank Bhd and Alliance Financial Group Bhd, Leong said.

By Bloomberg

Support for Bank Negara’s housing LVR cap move

PETALING JAYA: Bank Negara’s imposition of a maximum loan-to-value ratio (LVR) of 70% for a third and subsequent housing financing facility taken by a borrower is seen as a timely pre-emptive measure to avert unhealthy speculative activities and a potential property bubble, industry players concurred.

With the latest measure that takes immediate effect, people buying their third and subsequent house would be required to pay a higher down-payment than the current standard minimum of 10% of the value of a house.

In a statement yesterday, the central bank said financing facilities for purchase of first and second homes would not be affected and borrowers would continue to be able to obtain financing for these purchases at the present prevailing LVR level applied by individual banks based on their internal credit policies.

Real Estate and Housing Developers Association president Datuk Michael Yam said the association supported the measure as it would ensure a healthier and orderly housing market.

“There are some hot spots in the housing market where prices have appreciated higher than the average price increases in other locations. As financing for the first and second housing properties will not be affected by the ruling, the move is not expected to dampen the performance and growth of the housing property sector.

“Meanwhile. the LVR cap on those buying their third and subsequent house should stem speculative buying and ensure a more sustainable housing market,” Yam added.

Mah Sing Group Bhd group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move was not surprising as Bank Negara had given earlier indications of such a move.

“The move should not significantly affect the overall sentiments of the market which comprises mainly first-time buyers and upgraders.”

Leong said there was no property bubble as price increases were only for properties with good concepts in good locations.

“As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to our strong employment market, low interest environment and good liquidity in our financial system,” he added.

National House Buyers Association honorary secretary-general Chang Kim Loong said the measure would help curb speculative buying in the local housing market.

“Prices of landed residential properties have increased substantially over the last five years.

“We are glad that the Government has heeded HBA’s call with regards to the LVR. We will next seek to make housing more affordable for middle-income households and have pricing control for this group of buyers.

“HBA has urged the Government to set up a Special Task Force with such an objective and aspiration,” he said.

RAM Ratings head of financial institution ratings Promod Dass said: “Given this LTV measure only applies to the third home loan onwards, there should still be ample opportunities for banks to focus on first-time home buyers and perhaps to finance the purchase of a second home for lifestyle upgrading purposes.”

“All said, the level of prevailing interest rates would be an important factor too for the health of home loans, given that the bulk of outstanding home loans are based on floating interest rates,” he said in an e-mail interview.

The Association of Banks in Malaysia (ABM) chairman Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownership, ABM agreed that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Abdul Wahid, who is also Malayan Banking Bhd president and CEO, said: “In my view, the application of the measure is clear and specific and the LTV ratio itself, optimal.

Given that financing for first and second housing properties will not be affected by the ruling, the move is not expected to dampen or have an adverse impact on the growth of residential property development sector as well as the banks’ house financing business.

“Affordability of homes for genuine buyers will be preserved as banks continue to lend prudently under their respective risk management framework.”

On the Financial Capability Programme, he said it underscored the view shared by ABM that education was paramount in the promotion of sound financial and debt management.

Details of the implementation of the programme would be announced next month.

By The Star

JP Morgan: Buying opportunity in property share price weakness

KUALA LUMPUR: JP Morgan Asia Pacific Equity Research said any weakness in share prices from the Bank Negara Malaysia announcement on the imposition of a 70% loan-to-value cap (LVR) on mortgages for third properties as “a buying opportunity”.

In a research note issued on Thursday, Nov 4 it said the new ruling was clearly targeted at speculative buyers. Genuine first and even second time home buyers would not be affected, and would still be able to obtain financing of up to 90%.

“This is in line with guidance and not a surprise to the market. The government has already provided hints on this possibility over the past couple of months. Note however that even prior to this, banks have generally been stringent with the previous 90% ceiling LVR already not a common practice as much depends on the credit profile of each customer,” it said.

JP Morgan said on balance, it remains positive. In the short term, developers with higher exposure to the more speculative condo/high rise market (namely in the KLCC and Mont Kiara area, Klang Valley) and even for high-end landed properties in certain limited hot spot locations in Klang Valley (i.e. Desa Park City, Mutiara Damansara) and in Penang, could see some softening in demand.

“Overall however, we believe the move is positive for the long term sustainability and health of the sector,” it said.

It maintained its overweight on IJM Land and SP Setia, but preferred the former on valuation. The more speculative condominium market accounts for no more than 20% of sales for SP Setia and 35%-40% for IJM Land.

“For IJM Land, its strong branding, attractive product portfolio at the 'Light' project, and shortage of land in Penang island, also means that it should continue to fare better than most other condo developers, in our view,” it said.

JP Morgan said both companies could also benefit from upside to earnings from new projects i.e. from the commercial KL Eco City project for SP Setia to be launched by year-end, and from the Canal City residential project for IJM Land to be likely launched in 2011.

“We see any weakness in share prices from this announcement as a buying opportunity,” it said.

It said IJM Land was currently trading at a 30% discount to its RNAV of RM3.80/share, while SP Setia is already trading close to its RNAV of RM5.20/share.

During periods of strong liquidity and foreign inflows back in 2007 coupled with healthy sector fundamentals, SP Setia traded up to a 20% premium to RNAV.

By The EDGE Malaysia

Mah Sing buys land worth RM167m

PROPERTY group Mah Sing Group Bhd is buying two pieces of land in Ampang and Cyberjaya for a combined RM167 million and plans to build properties with a total gross development value (GDV) of RM1.2 billion.

The 1.9-hectare freehold land along Jalan Ampang, Kuala Lumpur, is being bought for RM114.9 million or about RM560.63 per sq ft. The development, which will be known as M City, is about 1.26km from the group's recently launched serviced residence project, M Suites.

M City will be a niche project comprising serviced residences, SoHo (small office, home office) and retail outlets with an estimated GDV of RM920 million to be developed over five years.

Preliminary plans for M City include flexible-sized serviced residences and SoHo with built-ups from about 500 sq ft with indicative pricing from RM398,800 a unit.
"We are toying with the idea of vertical green lungs in M City. It will be a new concept for the area," group managing director and group chief executive Tan Sri Leong Hoy Kum said in a statement.

The group is also buying 14.11ha land adjacent to its Garden Residence township in Cyberjaya for RM51.6 million.

It intends to develop two- and three-storey semi-detached homes with a built-up area of about 3,076 sq ft. Indicative pricing is around RM1.28 million for the two-storey semi-detached unit and RM1.44 million for the three-storey semi-detached unit.

To date, Mah Sing has acquired new projects with a combined gross development value of RM3.1 billion.

The group has projects with remaining GDV and unbilled sales of about RM8.64 billion.

Mah Sing's land are in the Klang Valley, Kuala Lumpur, Penang and Johor Baru. They should last the group between five and seven years.

By Business Times

Mah Sing buys land in Ampang, Cyberjaya

KUALA LUMPUR: Mah Sing Group Bhd has acquired two parcels of freehold land for RM166.5mil which are expected to generate a combined gross development value (GDV) of RM1.2bil.

The 1.88ha in Jalan Ampang, named M City Jalan Ampang, will be a niche project comprising serviced residence and retail outlets with an estimated GDV of RM920mil to be developed in five years.

“The land is flat and vacant and ready for immediate development. Furthermore, conversion premium to commercial development has been paid for part of the land and it comes with a sub-structure for two levels of basement car parks,” group managing director and group chief executive Tan Sri Leong Hoy Kum said in a statement yesterday.

Mah Sing has also acquired a 13.94ha freehold land next to its Garden Residence township in Cyberjaya which will add RM280mil to Garden Residence’s GDV and expand the township size to 60ha.

“Together with this latest acquisition, Garden Residence is a sizable project which will take between three and five years to complete.

“It is certainly an opportune time to replenish our land bank in order to meet the strong demand and we intend to create an exclusive enclave of semi-detached homes on the new land,” Leong said.

To date, the group had acquired new projects with a combined GDV of RM3.1bil. – Bernama

Meanwhile, it currently has projects with remaining GDV and unbilled sales of RM8.64bil.

By Bernama

'80pc SetiaWalk occupancy by Q1 2012'

SP Setia Bhd expects the occupancy rate at its boutique lifestyle development project, SetiaWalk, to increase to 80 per cent from 60 per cent when it opens its doors by the first quarter of 2012.

Spanning 8.32 hectares of prime land fronting Jalan Puchong, SetiaWalk offers an eclectic mix of retail offices, serviced apartments, dining delights, a boutique hotel and entertainment centre.

SetiaWalk, with a gross development value of RM1 billion, has a gross floor area of 2.3 million sq ft and a net lettable area of 2.4 million sq ft.

"There will be more exciting things to look forward to at SetiaWalk, one of them being the proposed light rail transit station opposite our project," said its divisional general manager, Wong Tuck Wai, at the ceremony to welcome three anchor retailers of its entertainment centre.

"We welcome TGV Cinemas, Celebrity Fitness and Superstar Karaoke as our business partners," he said.

Wong said the last anchor tenant would be the Chinese restaurant chain and the name was expected to be revealed soon.

SetiaWalk targets its retail offices to open for business in April next year with the entertainment centre operational by December 2011.

Meanwhile, the company said as part of its continuing efforts to ensure the success and vibrancy of SetiaWalk, it would provide pre-leasing services to match owners of the retail offices with the right tenants.

"A dedicated pre-leasing team has identified a list of potential suitors and matched with the buyers to ensure an exciting tenancy mix and add value to the entire development," it said.

Superstar Karaoke's consultant-cum-operations manager, Richard Law, said the outlet at SetiaWalk would be its fourth nationwide and it would occupy about 12,000 sq ft and offer a touch screen song-selection system.

TGV Cinemas chief operating officer, Kenny Wong, said the cinema would have nine cineplexes with 1,900 seats.

Celebrity Fitness would occupy two levels of 22,000 sq ft in total, said its managing director of Malaysia Kwangho Choi.

SetiaWalk, which can be access via Lebuhraya Damansara-Puchong and Persiaran Wawasan, has also managed to attract retailers such as Starbucks, BMS Organics, STADT German Cuisine, Ponytail Salon, Hock Hua Tonic, Bata and La Primavera.

By Bernama

PjH plans RM1.3b projects to make Putrajaya more vibrant

PUTRAJAYA Holdings (PjH) Sdn Bhd said its next phase of development at the administrative capital will comprise commercial and residential properties worth more than RM1.3 billion.



Director and chief executive officer Datuk Azlan Abdul Karim said the properties which will be built in five years, will make Putrajaya a liveable city.

"The perception is that Putrajaya is for government buildings. Our next focus is to build office towers, retail, an entertainment strip and medium- to high-end housing to create vibrancy for Putrajaya.

"We will have several mixed developments and waterfront projects to attract expatriates, too," he told the media in Putrajaya yesterday.

Putrajaya, which started in 1995, comprise 20 precincts sprawled over 4,931ha. By 2020 it will have 3.8 million sq m of government offices, 3.4 million sqm of commercial space, and 65,000 residential units with a working population of 500,000.

PjH, the master developer for Putrajaya will call for tenders for the new projects by early 2011. Some of the projects are in design stage now, Azlan said.

Azlan said PjH will either lease the office towers or sell them if there is demand.

He said PjH has been approached by several government agencies and corporate companies.

"We aim to also attract multi-national companies. We will be talking to some big names," he said.

All the buildings will meet the Green Building Index standards, Azlan said.

On the residential side, he said PjH will build affordable homes starting from RM150,000, terraced houses priced from RM450,000, and waterfront villas, which it expects to sell from RM2 million.

"We will cater to all segments of the market. I am bullish on the outlook for Putrajaya. There is pent-up demand for new houses here," he said.

Azlan said on average, its housing projects are snapped up within one month after launch.

"When we build commercial or residential properties, we will make sure there is demand. We are not going to be like Dubai where they kept on building regardless or not there was demand," he said.

By Business Times

Property bubble unlikely to occur: Mah Sing

A property bubble is not likely to occur following Bank Negara Malaysia's move to increase the loan-to-value (LTV) ratio to 70 per cent for third house financing facilities and onwards, says Mah Sing Group Bhd.

Group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move should not affect the overall sentiment of the property market significantly which comprised mainly first time buyers and upgraders.

"As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to the strong employment market, low interest environment and good liquidity in the financial system," he said in a statement today.

Meanwhile, the Association of Banks in Malaysia viewed the move as timely and pre-emptive in nature.

Its president cum chief executive officer Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownerships, the association agreed that the appropriate measure should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Bank Negara Malaysia today announced the implementation of a maximum LTV ratio of 70 per cent, applicable to third house financing taken out by a borrower, which is effective immediately.

The measure aimed to support a stable and sustainable property market and promote the continued affordability of houses for the general public.

By Bernama

Mah Sing in RM167m land buy pact

Mah Sing Group Bhd, a Malaysian property developer, said it agreed to buy land in Kuala Lumpur and Cyberjaya for a total of RM167 million.

The 4.7 acre land in Kuala Lumpur will be used to develop serviced residences and retail outlets with a total estimated gross development value of RM920 million, it said in a statement today.

The second plot, measuring 34.9 acres in Cyberjaya, is worth RM280 million in gross development value, it said.

By Bloomberg

Cyberview sees 10% investment growth in Cyberjaya

CYBERJAYA: Cyberview Sdn Bhd, the landowner of Cyberjaya, is optimistic of achieving a further 10% growth in investment in Cyberjaya by year-end from the current RM3.19bil.


(From left) Setia Haruman COO C.K. Lao, Hafidz Hashim, Multimedia Development Corp GM Wee Huay Neo and Sepang Municipal Council president Mohd Sayuthi Bakar at the media briefing yesterday.

“Giving the rapid growth of development in Cyberjaya, we are confident to achieve that growth through land sales for enterprise, commercial, institutional and residential space,” managing director Hafidz Hashim said yesterday after Cyberjaya’s annual media briefing.

Hafidz said the RM3.19bil represented more than a third of Cyberjaya’s total investment value of RM9.1bil since its inception over 10 years ago.

In 2009, Cyberjaya received investment worth RM1.29bil.

Hafidz said the company was also optimistic of surpassing this year’s investment figure for 2011, as it had secured projects worth RM1.48bil to start next year.

“Cyberjaya intends to support the Government’s aspiration to become a developed and high income nation as had been tabled in Budget 2011.

“We are poised to bring development-centric initiatives to fruition in line with what had being announced during the recent budget,” he said.

He added that to date, more than 500 companies, including global multinationals such as HP, Dell, Fujitsu and Motorola, had set up regional and global centres in Cyberjaya.

“Cyberview aspires to strengthen the key government initiatives by driving inward local and foreign investments, developing skilled workers and talents, and nurturing creative economies in Malaysia via its thriving content creation and multimedia industries,” he said.

On the other hand, Hafidz said Cyberview had in place initiatives from Budget 2011 that called for creative content development as a key contributor to the national economy with Cyberjaya-TV.com, which went on air earlier this year.

“As a whole, Cyberview’s vision and direction for Cyberjaya closely echoes the four major thrusts identified by the National Economic Advisory Council for the implementation of the New Economic Model, which are talent development, the creation of research and development ecosystem, provide growth infrastructure and institutional development,” he said.

On the current population living in Cyberjaya, he said there are 12,000 residents at the moment and the figure was expected to reach 35,000 in 2014.

The annual media briefing brought together Cyberjaya stakeholders such as Multimedia Development Corp, Setia Haruman Sdn Bhd and the Sepang Municipal Council.

By The Star

Cyberview will take heed of advice in report

PETALING JAYA: Cyberview Sdn Bhd, the landowner of Cyberjaya, acknowledges the recommendations in the Auditor General’s Audit Report 2009 for tighter management and coordination of efforts in developing Cyberjaya.

The company was responding to the recent report which highlighted some weaknesses in Cyberview in handling issues related to the development of Cyberjaya.

Managing director Hafidz Hashim said via e-mail that scheduled reporting and tighter monitoring measures as recommended by the report were in the process of being put into place as Cyberview’s role expanded from that of a landowner to the entity spearheading and masterminding the development of Cyberjaya.

“With the rapid changes taking place in the cybercity, the role as development mastermind brings challenges and Cyberview’s role is continuously evolving with the growth of Cyberjaya and we constantly strive to improve processes for the betterment of the cybercity,” he told StarBiz.

The audit report for the company was done between July and November 2009 and highlighted some weaknesses such as management of the land, records on land status that were not properly maintained, dissatisfaction with the transport service and some financial management.

However, it said, Cyberview’s financial performance from 2006 to 2008 was satisfactory as the company was profitable all those years despite some decline in profit in 2008.

It said the objective to form Cyberview was to ensure the development of Cyberjaya was in tandem with the Government’s aspiration to create an information technology city (cybercity).

“The complete development of a cybercity could not happen if Cyberview could not monitor the development of the city efficiently,” it said.

The report said the Finance Ministry, the main shareholder in Cyberview, needed to ensure the company was focused in monitoring Cyberjaya’s development.

It also suggested that Cyberview fully monitor the buildings’ rent collection and take action on those who failed to pay their outstanding rent.

By The Star

BNM: Maximum loan-to-value (LTV) ratio of 70% for 3rd home loan

KUALA LUMPUR: Bank Negara Malaysia is imposing with immediate effect the maximum loan-to-value (LTV) ratio of 70% for the third house financing facility taken by a borrower as it seeks to curb "excessive investment and speculative activity in the residential property market".

The central bank said on Wednesday, Nov 3 the move was expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations.

“This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers," it said.

Bank Negara said the financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies.

“The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public,” it said.

Below is the entire statement issued by Bank Negara:

Measures in Promoting a Stable and Sustainable Property Market and Sound Financial and Debt Management of Households

Bank Negara Malaysia wishes to announce with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower. Financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies. The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public.

At the national level, residential property prices have increased steadily in tandem with economic development and the rise in income levels. This aggregate growth trend remains largely manageable and has not deviated from the long term trend in residential property prices. In the more recent period, however, specific locations, particularly in and around urban centres, have experienced faster growth, both in the number of transactions and in house prices. This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature.

The targeted implementation of the LTV ratio is expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations. This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers. This measure therefore remains supportive of the objective of encouraging home ownership among Malaysians which continues to be an important national agenda.

Introduction of the Financial Capability Programme

As part of the continuous efforts to raise the level of financial literacy and to promote sound financial and debt management by Malaysians, Bank Negara Malaysia also wishes to announce the introduction of the Financial Capability Programme. This Programme will be offered by Agensi Kaunseling dan Pengurusan Kredit (AKPK) through its establishments nationwide and will commence from January 2011. The Programme is aimed at equipping individuals with important knowledge for responsible financial decisions by gaining practical understanding and skills in money and debt management. This in turn will contribute towards preserving the sound financial positions of households and ensure that debt accumulation is commensurate with household affordability, including their ability to absorb interest rate adjustments and potential volatility to income and expense levels. Individuals particularly new prospective borrowers and young adults are strongly encouraged to participate in this specially designed programme. The details of the implementation of the Financial Capability Programme will be announced later in December this year.

Bank Negara Malaysia

3 November 2010

By The EDGE Malaysia (by Joseph Chin)

Sunrise Q1 pre-tax profit up 4pc

Sunrise Bhd's pre-tax profit for the first-quarter ended Sept 30, 2010, increased four per cent to RM52.214 million from RM50.244 million registered in the same quarter last year.

However, revenue fell 9.98 per cent to RM171.272 million against RM190.261 million chalked up previously, it said in a statement.

It attributed the higher profits to lower operating costs while the lower revenue was due to the fact that its projects, Mont'Kiara Meridin, 10 Mont’Kiara and most of Solaris Dutamas were completed in the previous corresponding period.

Sunrise said it has locked in substantial unrecognised revenue of RM863.8 million, as at Sept 30, 2010, with another RM351 million sales recorded in October, mainly from its Quintet project in Richmond, Canada.

The substantial lock-in sales would help sustain the group's earnings until 2013, it added.

The group has several residential and commercial projects in the pipeline with the immediate one being Menara Solaris in Kuala Lumpur, it said.

Publika, the retail gallery at Solaris Dutamas is expected to open mid-2011 offering 320,000 sq ft of net lettable space with 4,000 car park bays, it said.

The construction of 11 Mont’Kiara and 28 Mont'Kiara are on schedule, slated for completion in 2011 and 2013, respectively.

Sunrise is also venturing into the hospitality sector to operate service residences which would be a boon to existing home owners in generating yield occupancy for their properties through medium to long-term leasing, it said.

By Bernama

Exciting decorating ideas to inspire home owners

HOMEDEC, an exhibition for homeowners, will be held at the Penang International Sports Arena (PISA) in Relau from Friday to Sunday.

It is open to the public from 11am to 9pm daily.

HOMEDEC will be a source of inspiration for those who plan to renovate, refurbish or redecorate their homes.

It features new designs, the latest products and innovations for the home.

The highlight of the event is ‘Kids Living’ where there are ideas and settings to show off designs and solutions for a child’s room.

Celebrity designer Eric Leong will provide home tips while feng shui expert Henry Fong will be available to point homeowners in the right direction to maximise qi within their homes.

Tips on choosing the right wall paints will also be provided.

Visitors who spend a minimum of RM100 in a single receipt at the exhibition will be eligible to join a contest to win the grand prize of Cuisinart, KitchenAid and Omega Juicer products worth RM15,000 and also RM5,000 in cash.

A demonstration on making healthy juices will also be held.

Other prizes worth more than RM40,000 are up for grabs.

Visitors who spend a minimum of RM500 in a single receipt will also stand to win a RM20,000 cash reward.

For details on HOMEDEC, call 03-79824668 or 010-2528622 or visit www.homedec.com.my.

By The Star

Property laggards take centre stage

KUALA LUMPUR: Property counters climbed in active trade on Wednesday, spurred by news of impending “material” corporate exercises to be announced by UEM Land Holdings Bhd and Sunrise Bhd.

The two property firms - UEM Land and Sunrise - were suspended at the opening bell following separate requests made to the exchange. No other details were made available as at 5pm.

At the close, the FTSE Bursa Malaysia KL Composite Index inched up 1.03 points, or 0.07% to 1,507.60 points.

Market breadth was positive, with 503 gainers leading 280 decliners, while 307 counters were unchanged. Volume was 1.325 billion shares billion shares worth RM1.436bil.

Smaller property laggard were in the limelight. UM Land Bhd advanced 22 sen, or 13% to RM1.89, Glomac up 8 sen, or 4.9% to RM1.71, while MK Land added 1.5 sen, or 4% to 39.5 sen.

Shares companies linked to Perak state government - Maju Perak Bhd and Perak Corp Bhd - were up sharply in heavy volume.

Maju Perak soared 19.5 sen, or 45% higher at 63 sen on volume of 18.3 million shares, while Perak Corp surged 42 sen, or 36% to RM1.58 on volume of 6.59 million shares.

Shares in Pasdec and Mentiga, both linked to Pahang state government also had a good run. Pasdec jumped 12 sen, or 30% to 52.5 sen, while Mentiga climbed 13.5 sen, or 20% to 82 sen.

In overseas markets, Hong Kong’s Hang Seng rose 2% to 24,144 points, Korea’s main index was up 0.9% to 1,935 points, while in Singapore the Straits Times rose 0.7% to 3,227 points.

By The Star

Contractors renew appeals for stamp duty waiver

CONTRACTORS have renewed their appeals to the government to waive stamp duties on construction-related contracts.

Two years ago, the government said it wanted to simplify stamp duty assessment by revising the rate on all construction services agreements that do not require collateral to 0.5 per cent of contract value.

This covered consulting contracts, operation and maintenance contracts and facilities services contracts. Therefore, a RM10 million construction contract would attract a total stamp duty of RM50,000.

After appeals from trade bodies the Finance Ministry gave a temporary relief by revising the stamp duty to a flat RM50 fee. But this ends at the end of the year.

"The reversion ... will inflate construction costs," Master Builders Association of Malaysia (MBAM) president Kwan Foh Kwai told reporters after Works Minister Datuk Shaziman Mansor launched the third Malaysian Construction Summit in Kuala Lumpur yesterday.

Eventually, these extra but unnecessary costs will be passed on to the government and the public because all construction contracts are either government jobs or packages awarded by property developers in the private sector.

MBAM also appealed to the government to table the Construction Industry Payment and Adjudication Bill for enactment at Parliament. The draft Bill, which was given to the Attorney General's Chambers in early 2007, has yet to make its way to Parliament.

This proposed new law is meant to minimise payment defaults in the construction industry via timely and cost-efficient recourse to adjudication.

By Business Times