Mah Sing has RM3b projects in the pipeline

Mah Sing's group MD says there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing Group Bhd, Malaysia's fifth largest property developer by revenue, is ready to roll out RM3 billion worth of new launches this year on positive domestic economic outlook.

Group chief executive and managing director Tan Sri Leong Hoy Kum said he was bullish on sales moving fast paced as ripple effects from recent government initiatives will bring more to buy properties.

Speaking to Business Times, Leong said initiatives under the Economic Transformation Programme and 10th Malaysia Plan should boost property demand with expected increase in job creation, urbanisation, the standards of living and income level.

He expects wealth creation from the local stock market to also have an impact on the property sector as gains are invested in physical properties.
"The property market has done well in 2010 and we are confident that the momentum is sustainable into 2011 as the current buying pattern is backed by fundamentals of the economy and purchasers," Leong said.

Leong feels there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing's new launches will comprise a mix of landed residential, niche size serviced residences, shop offices, retail units, small office/home office and industrial.

Leong said projects featuring lifestyle elements and community living with facilities like a clubhouse and pool will continue to do well.

To meet the demand in this segment, Mah Sing will offer Garden Residence in Cyberjaya, Kinrara Residence in Puchong, One Legenda and Hijauan Residence in Cheras, and Legenda@Southbay on Penang island.

These projects will feature superlink homes, semi-detached homes and bungalows.

Mah Sing will also offer smaller units for serviced residences and condominiums in the second half of this year to provide easier entry for investors, leading to higher take-up rates. Here, it will roll out M-City@Jalan Ampang, Leong said.

The company will also launch Icon Residence and Ferringhi Residence in Penang, and Austin Suites in Johor Baru, Johor.

For commercial projects, Mah Sing intends to launch Star Avenue in Damansara, and Icon City in Petaling Jaya in the first half of this year.

Meanwhile, the third industrial project under the iParc series, iParc3@Bukit Jelutong, will be launched by mid-year.

Leong said in line with the company's strategy of a fast turnaround, it will preview these new projects soon, while scouting for prime land.

"Although our landbank is enough to sustain us for the next seven years, we are looking for sizeable pieces of land and we have the balance sheet to fund the acquisition," he said.

Mah Sing, which has a cash pile of RM233 million, made 10 land transactions involving 118ha for RM756 million last year.

By Business Times

Mah Sing upbeat on achieving RM2.5b sales

Mah Sing Group Bhd is expected to be one of the best performers this year, with a bullish sales target of RM2.5 billion.

The target is 70 per cent more than 2010 and the highest on record.

Group chief executive and managing director Tan Sri Leong Hoy Kum told Business Times he was confident of Mah Sing meeting the sales target considering it has 33 ongoing projects valued at over RM9 billion and RM3 billion worth of new launches planned for this year.

Leong said the confluence of strong fundamentals and its branding, locations, concepts and products will make 2011 another good year for Mah Sing.

The company is one of the fastest growing property development companies in Malaysia and the most diversified property player as it offers products in various segments.
Its products offering are mainly commercial projects, mixed development and medium-to-high end residential properties with focus on the Klang Valley and Penang. Mah Sing also has township projects in Johor, and all these offer stable earnings stream.

The company's revenue and net profit, over the past five years, has grown at a compounded annual growth rate of 8.2 per cent and 14.3 per cent respectively.

The growth was achievable because of Mah Sing's quick turnaround strategy in developing smaller parcels of prime landbank that offer quicker turnaround timeframe.

The strategy had enabled the company to unlock land value in shorter timeframes and free up cashflow.

MIDF Research opined that Mah Sing's 2010 financial results, to be released by end-February, is expected to exceed 2009's top and bottom lines by 37 per cent and 20.9 per cent respectively (base on consensus forecast).

For fiscal 2009, Mah Sing posted a net profit of RM94.3 million on revenue of RM701.6 million.

On the company's stock movement, MIDF said investor's confidence in Mah Sing has improved after undergoing transformation with consistent growth of revenue and earnings as well as maintaining a healthy balance sheet over the past five years.

By Business Times

Encouraging sales in second half of 2010 likely to continue, says Johor Rehda

A view of the clubhouse in Horizon Hills in Nusajaya. Nusajaya has become a property hotspot in Iskandar Malaysia.

JOHOR BARU: Property developers in Johor can look forward to a better year ahead as the industry in the state is beginning to show signs of recovery.

The chairman of the Johor chapter of the Real Estate and Housing Developers Association (Rehda) Simon Heng said a majority of its members reported encouraging sales in the second half of 2010.

“Our members are upbeat that the momentum is likely to continue this year and probably until the first quarter of 2012, provided there are no unforeseen circumstances in the economy,'' he told StarBiz.

Heng noted that in the last Malaysia Property Expo (Mapex) held here in November, the 33 developers which took part in the four-day event raked in RM300mil in sales over a one-month period compared with RM140mil recorded in April.

He said the 30-day period starting from the first day of Mapex was the benchmark used by Rehda to determine the value of sales by participating developers.

Heng said the RM300mil was the highest figure recorded in the history of Mapex Johor in many years and attributed the jump in sales to factors such as the improvement in the regional economy after the 2008-2009 global recession, and an increase in the number of first time buyers and “upgraders” in the local property market.

“Many first-time house buyers and upgraders bought their properties in the second half of 2010, as they anticipated that prices of properties were going to increase further this year,'' Heng said, adding that prices of residential properties in Johor had increased by 10% in the second half of last year, and would increase further between 5% and 10% within the next six months.

Heng said commercial properties and industrial buildings had recorded even higher price increases of between 20% and 30% as demand for these properties increased in the recent years.

Driving factor

Higher prices of buildings materials as well as labour woes, especially a shortage of Indonesian workers, who form much of the workforce in the construction industry, have also contributed to rising property prices, according to Heng.

“Iskandar Malaysia will continue to be the driving factor in boosting demand for properties in the southern-most part of Johor, especially the high end residential properties,'' he said.

SP Setia Bhd executive vice president Datuk Chang Khim Wah said property buyers had accepted that an increase in the prices of properties in Johor was inevitable, as the same was happening in other parts of the country.

Despite that, buyers were coming back to the market, especially first-time house buyers and upgraders, on anticipation that propety prices would continue to rise, he noted.

Chang said there was an equal division between first timers and upgraders in its four ongoing projects in Johor namely Bukit Indah, Setia Tropika, Setia Indah and Setia Eco Gardens.

He said the completion of several major ongoing road projects in Iskandar Malaysia such as the New Coastal Highway, Eastern Dispersal Link Expressway and Senai-Pasir Gudang Desaru Expressway in the next one to two years would improve connectivity in the southern-most part of Johor.

“We also see the demand for strata-title properties in the Johor Baru market going up in the recent years and we are going to tap on this growing segment,'' said Chang.

He said buyers for the strata-title properties were mostly young professionals, newly married couples, expatriates working in Iskandar and Malaysian professionals working in Singapopre.

Chang said prospective buyers in the Johor Baru property market were now becoming more selective and demanding and wanted more than just roofs above their heads unlike 10 to 15 years ago.

He said they were willing to pay more for their properties and had high expectations, including better designs, layout, amenities, nice landscaping and safety and security features.

Country View Bhd marketing manager Andrew Tan said 2010 was generally a bullish year for developers in Johor compared with 2008 and 2009, which was considered “slow years ” for many developers due to the global economic recession.

Tan said landed properties remained the most sought after in the Johor Baru property market but strata-title properties were also gaining popularity, especially among young people.

He said strata-title properties, especially those located nearer to the Johor Baru city centre and the Customs, Immigration and Quarantine complex in Bukit Chagar, were popular because of the close proximity to Singapore.

Tan said the 9,712.45ha Nusajaya area was currently the property hotspot in Iskandar, overtaking the Tebrau area which has established housing schemes.

The completed projects in Nusajaya are the phase one of the Johor State New Administrative Centre, Kota Iskandar Complex and Puteri Harbour, while the ongoing projects include Asia's first Legoland Theme Park, Newcastle University Medical Malaysia, New Coastal Highway and Indoor Theme Park @ Puteri Harbour.

Country View is currently developing the 121.4ha Nusa Sentral project in Nusajaya which will keep the company busy for eight years.

It is also building 12 bungalow units priced between RM3.6mil and RM6.5mil each at Johor Baru's most sought after address Jalan Straits View.

“Demand for properties in Nusajaya is set to rise in the future,'' said Tan.

By The Star

APM sees brisk sale of The Arc@Cyberjaya

Datuk Vincent Tiew with a model of The Arc@Cyberjaya project.

ANDAMAN Property Management Sdn Bhd (APM), which is currently undertaking its largest property project by far The Arc@Cyberjaya in Cyberjaya with a gross development value of RM700mil expects to sell all of its 1,000 units by year-end.

APM was incorporated in 2009 as a property management and property-related services company by a few individuals of the previous management of the Andaman Group, an established property developer.

APM executive director and head of sales and marketing Datuk Vincent Tiew says since the company's formation, it now has ten property projects in hand with a total gross development value of RM2bil.

“We have been operating for only three years and I believe we have come far to anchor ourselves as a respectable property management company; our clients are mainly property developers and landowners,” he tells StarBizWeek in a recent interview.

Tiew says The Arc@Cyberjaya, the company's single largest freehold property project is expected to be launched in March.

“We have several phases to the project. The first phase will comprise 250 units priced at an average of RM350,000 per unit.

The Arc@Cyberjaya should be fully occupied by 2015,” he says, adding that the property project would be an iconic landmark in Cyberjaya once the apartments and 15 badminton courts with five office/campus tower blocks are completed.

Tiew is confident of full occupancy for the project as the company has provided “strong incentives” for home-buyers.

Homebuyers of The Arc@Cyberjaya can expect an 8% gross rental guarantee per annum for up to 25 years based on the company's four-year + four-year lease-back-option for six times plus an additional year.

“We can afford to guarantee the gross rental rate because we have a contract with the Multimedia University to provide hostel like accommodation for first and final year students,” Tiew points out.

The owner of The Arc@Cyberjaya is developer Maju Puncakbumi Sdn Bhd.

It is APM's strategy to price their property units at “affordable” levels for the mass market. “We generally build homes for the mass market and price them to allow for favourable upside in capital gain in the medium term with secured rental-yield return,” he elaborates.

He points out that some of the company's other property projects also have a gross rental guarantee of 8% per annum, but the tenure was shorter. They include the Cova Villa at Kota Damansara comprising 346 units at an average of RM300,000 per unit with three years and another three years lease-back-option.

Cova Villa at Kota Damansara, which was completed in 2009, says Tiew mainly caters to the students of Segi College.

Yet another property project of APM Casa Residenza at Kota Damansara, which has a GDV of RM126mil comprising 357 units at average price of about RM380,000 per unit was launched last year and was sold off within two days.

The property project also has a three-year + three-year lease-back-option at 8% gross rental guarantee per annum.

Its recently-launched 44 units of commercial shops at Kota Damansara was also sold out within two days for the total sales value of RM135mil. Construction is in full steam now and completion with Certificate of Fitness is anticipated within 18 months from sales and purchase date.

Other upcoming projects include the Selangor Science Park 2 in Cyberjaya (GDV RM180mil), The Academia@South City Plaza in Seri Kembangan (GDV RM65mil) and four and five-storey shop offices that include a mall at Bangi with a GDV of RM500mil.

APM markets its property projects via its five sales galleries located in Bangi, USJ, Kota Damansara, Ipoh and Johor Baru and it has a strong 2,000 odd loyal existing customers/buyers for the various projects in the pipeline.

According to Tiew, the company plans to brand itself as a premier property management company that provides developers and landowners the option to leave the job to APM to fully build and manage their properties.

“APM has the expertise to customise a building for a developer/owner and to run the day-to-day property-service related activities including rental and tenancy management, security, billing/credit control, carpark management, and food and beverage,” he says.

“We have scalability and can source for building materials at very competitive prices because we constantly have ongoing property projects,” he adds.

By The Star

Is it more viable to buy or rent a house?

In today's environment of rising home prices, is it more advantageous to buy a house or rent a house?

While most people unanimously agree that owning a home is better, the financial situation of the individual is important in assessing whether he or she can afford the home.


James Wong ... ‘It’s better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out.’

VPC Alliance (KL) Sdn Bhd managing director James Wong says it is always better to own a home. But one's financial ability will play a big part in the choice of a house, he adds.

“Of course, it's better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out,” says the boss of the property consultant firm.

Young people are advised to look into their finances and ensure their existing debt ratios are not too high before buying a house. They also need to consider the stability of their jobs to ensure they will be able to make the monthly loan instalments, Wong says.

“If a person's debt ratio in relation to his salary is already close to 50%, chances are banks will not qualify the loan. If a person's salary is too low, meaning that the mortgage amount to be paid is more than 50% of a person's salary, the bank may also hesitate and require more documentation to approve the loan.

“These days, with the easy payment packages by banks and the ability to withdraw from one's Employees Provident Fund (EPF) savings, owning a house has become more affordable,” says Wong.

Certainly, potential house buyers can now tap on their EPF account 2 to purchase a property. First-time house buyers can still qualify for loans of up to 90%

During Budget 2011, the Government said it will introduce Skim Rumah Pertamaku through Cagamas Bhd, which will provide a guarantee on the downpayment of 10% for houses below RM220,000.

This scheme is for first-time house buyers with household income of less than RM3,000 per month. In other words, the buyers will obtain a 100% loan without having to pay the 10% downpayment.

First-time house buyers will also be given a stamp duty exemption of 50% on instruments of transfer on house prices not exceeding RM350,000. The Government also proposed that a stamp duty exemption of 50% be given on loan agreement instruments to finance such first-time purchase of houses.

“If you rent a home, especially in today's environment of rising prices, you will never benefit from the increase of the property value. Furthermore, even if the value of the home does not increase over time, the mortgage balance decreases and equity builds,” says another property consultant.

“With the problem of inflation creeping up, the more you delay buying a house, the more expensive it becomes over time. Buying property is one way to fight inflation,” he adds.

In terms of disadvantages in owning a house, there are many variable costs involved, for example the house assessment, service or maintenance fees and fire insurance among others.

“Selling the house may also not be as quick as, say, selling your investments in shares. The whole process of selling, along with documentation by lawyers can take up to a year, depending on the location of the home. If there is already a potential house buyer, the process can be sped up to 3 months,” says the property consultant.

Khong & Jaafar managing director Elvin Fernandez gives a quantitative example between buying and renting a property.

If a typical middle class 2-storey terrace house in Kuala Lumpur is RM400,000 and the rent is RM1,500 a month, the nett yield is RM3.8%.

“This is a reasonable return from such a landed property,” he says.

Assuming that the household income is about RM7,000 a month, this means that the ratio of the household income per annum to the house price is 4.76 times.

“To buy this house based on 90% financing at a fixed interest loan for 30 years, you would have to pay a 5% interest, which means a monthly expense of about RM1,900 a month. At this point of the exercise, it is clearly better to rent than buy,” he elaborates.

Still, he adds: “This analysis is based on what I consider the typical housing unit. Different considerations may apply for different types of housing units in different areas.”

Another powerful motivation in favour of buying rather than renting is the social imperative to own a home.

“Owning a house also allows you to raise credit as and when it is needed, for family expenses and for business purposes, and this is a powerful motivation for ownership,” says Fernandez.

By The Star

Build-then-sell concept likely to favour big boys

PETALING JAYA: The proposed implementation of the build-then-sell (BTS) concept as a mandatory system is likely to sit well with financially sound, established developers but would be a burden on smaller, less resourceful players.

“This system means that developers have to complete the project first before they can start selling and earning profits,” said an industry observer

“This may be alright with the large players that are financially sound. But for the small ones (developers), they may not have the resources to finance the entire project and have no choice but to start selling as soon as they can,” he added.

An analyst with a local bank-backed brokerage concurred, saying that a mandatory BTS could mean smaller developers would go out of business.

“The BTS will end up burdening the developer financially and this could result in higher selling prices, as the cost of development would be more as they (developers) have to rely on full financing throughout.”

“In the worst-case scenario, housing prices could spike and bankers may not want to risk issuing loans under a concept where houses are only sold once they are completed and have been issued the certificate of fitness for occupation.”

He said one of the arguments against the BTS system was that its implementation could result in the escalation of abandoned projects. “Developers that can't finance the full project will end up abandoning it.”

However, another analyst argued otherwise, stating that projects still got abandoned even under the current “sell-then build” (STB) system.

“The BTS system will probably mean that only the fittest will survive. This means that projects will be undertaken by sound, reputable developers rather than fly-by-night ones. At the end of the day, it's the consumer that gains.”

Yesterday, a local news report claimed that the BTS mode of house ownership is expected to be made mandatory by 2015.

Citing sources, it said that the drafting of the amendments to the Housing Developers Act would include a clause calling for the gradual implementation of the BTS system.

In 2006, then-Deputy Prime Minister Datuk Seri Najib Tun Razak introduced the BTS system as a trial run alongside the STB concept but there was poor take-up among developers despite a host of incentives to make it more attractive for them.

One industry observer said the BTS system usually sat well with potential home-buyers because they would be able to see the final products that they intended to purchase.

“Potential buyers will be more confident to spend their money on something tangible than on a product that's not there,” he said, adding that the BTS system, if implemented, should be done gradually so that the small players could adapt.

“Perhaps the BTS system could be imposed on bigger companies and a more flexible concept implemented for the smaller players,” he added.

By The Star

AmanahRaya REIT pre-tax profit up RM4.3m

AmanahRaya Real Estate Investment Trust (REIT) has chalked up a higher pre-tax profit of RM10.1 million for the fourth quarter ended Dec 31, 2010 from RM8.2 million in the corresponding period 2009.

Revenue increased to RM16.3 million from RM12 million.

In a filing to Bursa Malaysia today, it said the increase in revenue was due to the upward revision in rental rates for several investment properties and additional rental income received from two new investment properties.

"The increase in property expenses is mainly due to a higher provision allocated for repair and maintenance for Wisma Amanah Raya Bhd, Jalan Semantan, in financial year of 2010.

"On the other hand, the increase of the non-property expenses in the current quarter was mainly due to the increase in term loan interest and corporate exercise expenses after the drawdown of the additional new borrowing of RM111 million in the previous second quarter ended June 30, 2010," it said.

By Bernama

Astral units plan mixed property development

ASTRAL Asia Bhd's units, Syarikat Ladang LKPP Sdn Bhd and Tasja Development Sdn Bhd, had signed a joint venture agreement to develop land in Pahang into a mixed property development.

In a filing to Bursa Malaysia yesterday, Astral said the 599.41ha leasehold project would comprise a commercial centre, an industrial centre, a mixed residential designs, public amenities and infrastructure.

Astral said the project incorporated a high-tech park to be named - Kuantan Hi-Tech Park.

It said upon the implementation of the proposed joint venture, the business of Astral would be diversified to include property development.
Astral is principally engaged in the cultivation of oil palm, civil engineering and construction works and property development.

By Bernama

Axis-REIT to offer reinvestment option

AXIS-REAL Estate Investment Trust Managers Bhd (Axis-REIT) has become the third listed company and the first real estate investment trust (REIT) to offer the option of new units in the REIT as dividend payment.



In an announcement to Bursa Malaysia yesterday, the company said it will seek unitholders' approval to offer a reinvestment plan, giving unitholders the option of a cash payout, new units or a combination of cash and new units (electable portion).

It proposes to issue new units of up to 20 per cent of the current fund size of Axis-REIT of 375.9 million units.

This comes after Malayan Banking Bhd and AMMB Holdings Bhd announced similar plans last year.
Maybank's reinvestment plan was dubbed a success, enticing some 80 per cent of shareholders to reinvest in the financial institution, while AMMB's plan is yet to be issued.

Axis-REIT shares fell 0.01 sen yesterday to close at RM2.40.

Bloomberg Consensus shows that eight of research firms have a "buy" call on the stock, while four recommend a "hold". Its average target price is RM2.60.

"Placements are restricted to a pool of investors, and we don't do rights issues because it's dilutive in nature, so the reinvestment plan seems (to be) a very fair way of distributing units to our investors," Axis-REIT Managers Bhd chief executive officer Stewart LaBrooy told Business Times yesterday.

The cash secured from the reinvestment plan will help bolster the REIT's borrowings-to-total assets ratio, which could breach 35 per cent, in view of future acquisition plans.

While there is no rule to specify it, syariah-compliant REITs' debt-to-asset ratio has generally hovered between 30 and 35 per cent.

The total amount of income distribution to be declared, the size of the electable portion and consequently, the maximum number of new units to be issued under the proposed income distribution reinvestment plan would depend on the financial performance and cash flow position of Axis-REIT, and prevailing economic conditions.

"It's a much easier, nicely well- managed way to manage our debt- to-asset ratio," LaBrooy said.

The exercise will also help make the stock more tradeable.

While the issue price of the new units has a 10 per cent discount cap to the average market price prior to the price-fixing date, Axis-REIT has traditionally accorded discounts of between 4 and 5 per cent.

By Business Times

MRCB Q4 profit rises on better margin

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) registered a net profit of RM41.5mil for the fourth quarter (Q4) ended Dec 31, 2010, more than tripling its RM12.4mil net profit posted in the same period last year.

It told Bursa Malaysia that the higher profit was due to improved margin coupled with advanced stage of activities of its engineering and construction works and property development projects at Kuala Lumpur Sentral.

“Higher operational margin was achieved on the back of crystallisation of its ongoing value engineering and efficient project supervision and cost-saving initiatives,” it said.

Its revenue for Q4 stood at RM433.1mil, 53.8% higher than RM281.7mil previously.

MRCB has recommended 1.5% or 1.5 sen per share first and final dividend for the financial year ended Dec 31, 2010 (FY10) less 25% income tax, amounting to about RM15.6mil.

For FY10, MRCB posted a net profit of RM67.3mil, a 94.3% more than RM34.6mil in the FY09. Its revenue rose from RM921.6mil to RM1.07bil.

By The Star

PJD plans RM1.7b projects by Q3

PJ Development Holdings Bhd (PJD) aims to ride on the positive economic data by launching four projects worth about RM1.7 billion by third quarter of this year.

Chief operating officer Lim Lian Seng said the projects are located in Sri Hartamas and Cheras in Kuala Lumpur, Butterworth in Penang, and Kuantan in Pahang.

"There is a surge in demand for new residential, commercial and retail properties in those areas. We expect the products to sell fast under the current market conditions," Lim told Business Times.

This would be the first round of major projects it is launching since 2009, he added.

PJD had spent the last two years working on new plans after the economic crisis in 2008.
"We incorporated new designs and elements as well as reduced the sizes for certain products in some of our approved projects to make them more affordable and appealing to buyers," he said.

In the high-profile locale of Sri Hartamas, PJD will launch Duta Kingsbury, near the high-end commercial hubs of Mont'Kiara Solaris and Dutamas Solaris.

Duta Kingsbury is one of few projects which PJD deferred after the crisis. The project was previously to feature some 200 condominiums of more than 3,000 sq ft and villas.

Lim said it will now comprise more than 300 units of condominiums, ranging from 1,400 sq ft and priced above RM700,000. The villas have been scrapped.

In Cheras, PJD will launch a mixed-integrated development consisting of three blocks of serviced apartments, two shop-office towers with entertainment areas, retail complexes and restaurants.

Lim expects the project to be the new iconic landmark for Cheras.

In Butterworth, PJD will launch phase four of its Harbour Place project, comprising over 300 units of serviced apartments with priced from RM300,000.

In Sungai Karang, Kuantan, the company will launch over 200 units of seaside serviced apartments, close to the Swiss-Garden Resort & Spa Kuantan. Each unit will be priced from RM200,000.

By Business Times

Astral units plan mixed development

Astral Asia Bhd's units, Syarikat Ladang LKPP Sdn Bhd and Tasja Development Sdn Bhd, had signed a joint venture agreement to develop land in Pahang into a mixed property development.

In a filing to Bursa Malaysia today, Astral said the 599.41-hectare leasehold project would comprise a commercial centre, an industrial centre, a mixed residential designs, public amenities and infrastructure.

It said the proposed development was subjected to the shareholders' approval at an extraordinary general meeting to be convened.

Astral said the project incorporated a high-tech park to be named -- Kuantan Hi-Tech Park.

It said upon the implementation of the proposed joint venture, the business of Astral would be diversified to include property development.

"The proposed joint venture and proposed diversification are expected to contribute positively to the earnings of Astral in the future financial years," it said.

Astral is principally engaged in the cultivation of oil palm, civil engineering and construction works and property development.

By Bernama

UOA to list development arm

UOA unit UOA Development Bhd is the developer of mega projects such as the estimated RM6 billion Bangsar South in Kampung Kerinchi.

KUALA LUMPUR: The board of United Overseas Australia Ltd (UOA), which is listed primarily on the Australian Stock Exchange (ASX), has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the local bourse’s main market.

The Edge Financial Daily understands that UOA, which has a dual-listing on the Singapore Stock Exchange (SGX), is expecting to hear back from the local regulators soon and hopes to have its development arm listed on Bursa by June 2011.

UOA Development Bhd, the developer of mega projects such as the estimated RM6 billion Bangsar South development in Kampung Kerinchi, is 100%-owned by UOA Holdings Sdn Bhd, which is in turn a wholly- owned subsidiary of UOA.

It is worth noting that the UOA group listed UOA Real Estate Investment Trust (UOA REIT) on Bursa in 2005.

In its recent filings with the ASX, UOA said it had on Jan 31, 2011 lodged a prospectus exposure draft with the Securities Commission of Malaysia for the latter’s “comment, approval for registration and distribution”.

Earlier, the group in November 2010 made an announcement to both the ASX and SGX stating its intention to list its property development division on Bursa and in fact had undertaken a feasibility study to facilitate the listing.

UOA’ shareholders have not met to weigh in on the proposed listing, although this would happen if and when the Malaysian capital market authorities give their approval, said a company official.

According to filings with the ASX and SGX, UOA intended to maintain a majority stake in the listed entity with the initial public offering of at least 25% of the issued and paid-up capital of the development division.

CIMB Investment Bank Bhd is the principal advisor for the proposed listing.

UOA’s market capitalisation on the ASX was A$338.1 million (RM1.04 billion) as at Feb 8, that on the SGX was S$439.5 million (RM1.45 billion respectively.

The share price of UOA on both exchanges are presently trading close to their 52-week highs of A$0.35 on Feb 4, 2011 and S$0.46 on Feb 8, 2011.

For the financial year ended Dec 31, 2009, UOA posted a net profit of A$111.95 million on the back of revenue of A$152.18 million.

According to UOA’s 2009 annual report, its single largest shareholder was Griyajaya Sdn Bhd with 276.36 million shares, representing a 30.05% stake, followed by Dream Legacy Sdn Bhd with a 12.17% stake and Metrowana Development Sdn Bhd with an 8.4% stake.

UOA was incorporated in Western Australia in 1987 and was listed on the ASX in 1988.

UOA’s associate company UOA REIT is listed in the Main Market of Bursa Malaysia, with assets valued at RM1.05 billion comprising six commercial properties in Kuala Lumpur with a total estimated lettable area of 1.5 million sq ft.

By The EDGE Malaysia

Property players see price rise in Penang

A general uptrend in Penang property prices is expected this year as property developers offer better quality products to more discerning buyers.

Penang-based property players interviewed by Business Times have cited construction material prices and inflation as reasons for them to price their units higher this year.

They, however, gave no indication on the quantum of the price increase.

"Despite the risk of price increases in raw materials, the outlook for the property market remains positive this year," SP Setia Bhd general manager S. Rajoo said.

"As the population increases, the demand for properties will increase as well," he added.

Rajoo said available property units in the state have been decreasing tremendously over the past 10 years due to strong demand for selected property types.

"We anticipate demand for landed properties to remain strong, due to the scarcity of land in Penang."

Eastern and Oriental Bhd said the prices of its properties are determined closer to their launch dates and hinge on prevailing market conditions, raw material prices and market sentiment.

E&O owns and develops Seri Tanjung Pinang masterplan township on Penang island that offers a range of properties including landed homes and high-rise residences by the sea.

"Consumers are highly discerning nowadays and they desire a complete package which includes built-in wardrobes and cabinets, quality fittings along with fine finishing and appliances, said its executive direc-tor Eric Chan Kok Leong.

"This in turn affects the eventual pricing of properties," Chan added.

Hunza Properties Bhd group executive chairman Datuk Khor Teng Tong concurred, saying that the rising trend in property prices tend to reflect an upgrading of quality for the said units.

"As buyers demand for better and higher quality, the price of building materials and land contribute to this rising trend," he said, adding that demand for properties in Penang continues to be strong for residential units in the face of a supply shortage.

For Ivory Properties Group Bhd, better finishings and amenities, teamed with larger liveable spaces are expected to result in a higher range of property offerings.

"With impending inflation, increase in prices of construction materials and factors such as all government-driven economic programmes like the Economic Transformation Programme, National Key Economic Area and the economic corridors which are due to drive the economy towards a higher per capita income, we foresee mid- to high-end properties continuing to be in demand," said its deputy chairman Datuk Seri Nazir Ariff Mushir Ariff.

Ivory's ongoing and upcoming projects in the first half of the year, he noted, will comprise commercial, landed residential and high-rise residences in Penang.

IJM Land Bhd, whose flagship "The Light" development is set to keep the company busy for the next 12-15 years, is looking at a slight price increase for its offerings.

IJM Land general manager Toh Chin Leong cited construction materials and inflation as reasons for the revision of prices.

With a gross development value of RM5.5 billion, The Light is a 60.8ha freehold waterfront development which will be built over the next 11 to 15 years.

"We had a good year in 2010 and we foresee the market to be stable and consistent and look forward to another good year ahead," Toh said.

By Business Times

Firm aims for top spot in property management

SUBANG: Andaman Property Management Sdn Bhd (APM), which is currently building and managing 10 ongoing property projects locally, aims to be the country's leading property management and property related services company.

Its executive director (sales and marketing) Datuk Vincent Tiew said from Jan 2011 onwards, the company would be launching and managing at least 10 properties worth RM2bil simultaneously.

Tiew said of 10 projects it currently managed, four belongs to the Andaman group.

“And we anticipate more developers and landowners to request for our services this year,” Tiew told StarBiz, adding that APM's business model was to develop and manage properties while generating high yield and fast turnaround for developers and landowners.

APM was formed in 2009 by some of the management members of the Andaman Group, an established property developer.

“After honing their skills in property development and managing properties of the Andaman Group, they decided to form an independent company, which is how APM was incorporated,” Tiew noted.

On its business model, Tiew said: “We want to be a leader in the industry in the country and build a strong track record of developing, maintaining and adding value to the properties that we manage in terms of yield, occupancy rates and capital gain for our clients, including property buyers.”

He said when APM was given the go-ahead to develop and manage a property project, it would first be looking to fulfill the developers expectation of the property project in terms of commercial reality, yield, bottom line.

“And our work starts from the onset of planning, authority management, construction and building maintenance to units selling, project administration and securing of strata-title. We also provide developers and landowners advice on how to best position the property development in terms of architectural design and other value-added services in line with developers/landowners expectations,” Tiew said.

On pricing he said: “We built shop lots and residential developments with per unit prices ranging from RM2mil to RM10mil and RM350,000 to RM1mil respectively.”

APM targeted its properties at the mass market to ensure that they remain in demand, even during the downturn, Tiew said, adding that for certain properties, buyers were guaranteed with return on investment.

APM's current property projects for the Andaman Group include Kota D'Sara with gross development value (GDV) of RM125mil, and Casa Residenza (GDV: RM180mil), both located in Kota Damansara. APM plans to launch the The Academia@South City Plaza in Seri Kembangan and the RM700mil The Arc@Cyberjaya in Cyberjaya.

By The Star

Lanson Place to operate Bukit Ceylon Residences in 2012

LANSON Place Hospitality Management Ltd will operate a RM207 million property known as Lanson Place Bukit Ceylon Residences in Kuala Lumpur in 2012.

This will be Lanson Place's third property in Malaysia and form part of the Verticas Residenci development in Bukit Ceylon by Wing Tai Malaysia Bhd. The tower, to be managed by Lanson Place, is owned by Wing Tai Malaysia and Lanson Place's parent company, Wing Tai Properties Ltd. Wing Tai Properties is listed on the Hong Kong Stock Exchange.

The management company's senior vice-president Graeme Laird described the upcoming accommodation as "comfortable and chic" and said that it would have 150 keys with one- to three-bedroom units.

The property has set new standards in the serviced apartments as it has very large units, with a one- bedroom unit measuring 1,100 sq ft and larger ones reaching 2,000 sq ft.

When asked about return on investment for this property, Laird said: " We did not calculate the payback period. The expected gross rental yield in a stabilised year could reach more than 10 per cent. So this would be from year three of operation."

The Bukit Ceylon property hopes to garner an average of RM500 per night when it opens.

Meanwhile, its four-star Lanson Place Ambassador Row with 221 keys closed last year with an average room rate of RM207 and an occupancy of 72 per cent.

This year, it hopes to garner RM250 and fill 70 per cent of its room inventory.

It also operates 132 units in Lanson Place Kondominium No 8, which consists of purely residential apartments.

Where next in Malaysia for Lanson Place? Laird said it could be keen on Penang and Kota Kinabalu in Sabah if the right properties become available and the destinations can support high-end serviced apartments.

But its more immediate priority is to upgrade Lanson Place Ambassador Row in 2013 to lift the product and position it further up- market.

By Business Times

Lanson going places

GUESTS of Lanson Place serviced apartments, who are used to the level of service by the group, will be pleased to know that it plans to triple the number of properties within the next three to five years.

Lanson Place Hospitality Management Ltd, a Wing Tai Asia Group company, is also looking at representations in several new destinations like Vietnam, Indonesia, Taiwan, South Korea, Japan and Australia.

This expansion will also see the number of rooms triple.

"Within the next three- to five- year period, our internal goal is to have 20 properties and 3,000 keys (apartment units)," the management company's senior vice president Graeme Laird said.

"It is ambitious and will all depend on having the right human resources in place", he added.

Lanson Place has a presence in Malaysia, Singapore, Hong Kong and China. In Malaysia, the properties are owned by Wing Tai Malaysia Bhd, which was previously known as DNP Holdings Bhd.

Laird, during a recent visit to Kuala Lumpur from Hong Kong, told Business Times that the expansion could be pure management contracts for its group properties or for others or those where it takes equity.

Lanson Place now has seven properties with a total of 1000 keys. Six of the properties are serviced apartments, while its sole property in Hong Kong is a hotel.

According to Laird, the group is working on introducing two accommodation categories - a premier model that is likely to be called Lanson Place Residences and one which is a rung below, called the Lanson Place Apartments.

The former will typically have 100 to 150 keys while the latter between 150 and 250 keys. Keys refer to the main door as serviced apartments can be a one-, two- or three-bedroom unit.

Currently, Lanson's two top performing properties are located one each in Beijing and Shanghai in China.

The first Lanson Place property commenced operations in 1998 in Singapore. Immediately thereafter, Lanson Place Kondominium No 8, a residential development, and Lanson Place Ambassador Row in Kuala Lumpur opened in the same year.

When asked about competition, especially in Kuala Lumpur where there has been a mushrooming of serviced residences, Laird said: "Our product is different from our competitors. Our style and finishing is of high quality. And so is our standard of service."

"You just have to arrive with a suitcase and be at home immediately," he said.

It positions itself to go beyond expectations in service standards.

If you are a guest from Lanson Place having dinner at a restaurant outside and it starts to pour, don't be surprised if a Lanson Place staff shows up at the restaurant's door just so he can hand over an umbrella to you.

By Business Times

Bina Puri upbeat on cracking RM1b mark

The company expects 2011 to be one of its better years since its listing in 1995, says Bina Puri's group managing director

BINA Puri Holdings Bhd, which is expanding its business, is bullish that revenue will surpass RM1 billion this year, its chief said.



"This year is all about execution of projects and finishing existing jobs. We expect 2011 to be one of our better years since our listing in 1995," group managing director Tan Sri Tee Hock Seng told Business Times.

In 2010, Bina Puri secured projects worth RM2.5 billion. Among the contracts it won were the Ampang light rail transit line extension, the low-cost carrier terminal in Sepang, the Kuala Lumpur-Kuala Selangor Expressway privatisation project and building ramps and a main line bridge for the Eastern Dispersal Link in Johor.

The company hopes to maintain the rate of new contracts this year by securing RM2.5 billion worth of work.
It has bid for building and infrastructure projects worth over RM2 billion, in Malaysia, Thailand, Brunei and the Middle East.

For the nine months ended September 30 2010, Bina Puri posted a net profit of RM8.13 million on revenue of RM861 million. In 2009, Bina Puri made RM6.4 million on revenue of RM780.1 million.

Tee said the company's order book of RM3.3 billion will help improve its earnings for the next two to three years.

Meanwhile, Tee said Bina Puri is on a drive to expand its property division, which contributes less than 10 per cent to its revenue and net profit.

Bina Puri ventured into property development in the 1980sas a boutique developer.

Some of its prime projects include Bukit Idaman township in Selayang and Jesselton Condominium in Kota Kinabalu, Sabah.

Tee expects contribution from the division this year to be in the region of 15 per cent with RM900 million worth of housing projects in Klang Valley, Johor and Sabah.

"We want to expand the division because of the higher margins that can be made from property development. We don't want to be too dependent on construction, which is harder to take on," Tee said.

By Business Times

Malaysia woos luxury hotel brands

Bulgari, Armani and Versace may no longer be just luxury retail brands found in Malaysian malls, as property developers think about bringing in their hotel brands too.

With brands like Grand Hyatt, Mandarin Oriental and Four Seasons already here while St Regis and Raffles have confirmed openings, developers are eyeing fresh and popular hotel brands.

"Developers are now beginning to look at Waldorf Astoria and also various designer-linked brands like Bulgari Hotels & Resorts, Palazzo Versace, Armani Hotels & Resorts," vice president of the Malaysian Association of Hotels (MAH) Ivo Nekvapil told Business Times in an interview recently.



If these brands make their way to our shores, they are likely to be located either in Kuala Lumpur or on Langkawi island.

Nevertheless, Nekvapil feels that sub-brands or brands that come under their more familiar parent company name should be considered as they have potential in Malaysia.

These would include brands like All Seasons and Ibis which are Accor brand hotels and Hilton Garden Inn, a Hilton group brand.

He explained that these brands have international recognition and as such Malaysia too needs these brands to give the country world recognition.

Meanwhile, when asked about the hotel scene in Klang Valley this year, Nekvapil said that there could be an addition of some 2,000 rooms in the four- and five-star hotel/serviced residence category.

Additional rooms this year will come from the opening of Somerset Ampang Kuala Lumpur, Best Western KL Sentral, Park Regis Kuala Lumpur and Pullman Kuala Lumpur Bangsar.

On occupancy and rates in the Klang Valley, Nekvapil said that 2011 could end with an average room rate (ARR) of RM360 for lower end five-star hotels and about RM500 for higher end five-star category hotels. Occupancy this year could finish at about 68 per cent.

Mandarin Oriental still leads the pack, and is now drawing an ARR of around RM700.

Last year, occupancy ended at around 65 per cent and ARR of between RM200 to RM320 per night.

Malaysia had its highest occupancy of over 70 per cent in 2007.

By Business Times

Tycoon Ng buys another property in Australia

PETALING JAYA: Malaysian tycoon Ming Ng, well known for his investment foray into Australian properties, is believed to be on another buying spree.

This time, Ng, via his family-controlled company Dradgin of Singapore, is said to have purchased a landmark commercial property, 502 Hay Street, in the suburb of Subiaco, the central business district (CBD) of Perth, at an undisclosed price.

The Australian Financial Review reported on Tuesday that Ng had acquired the building from beleaguered Perth-based developer Luke Saraceni, who had to offload the property because of mounting debts.

Dradgin was unavailable for comment at press time.

Ng and his family is said to own several other prime properties in Western Australia, including 168 St George's Terrace in the CBD.

It has been a trend of sort for Malaysia companies to purchase land, develop or acquire prime properties down under.

This include Mulpha International Bhd, which owns Sanctuary Cove, a 474-ha residential and lifestyle property development in Queensland Gold Coast.

Other Malaysian tycoons chose to venture into Britain and they include YTL Corp Bhd, which carries out its utilities activities via subsidiary YTL Power International Bhd.

YTL Power wholly-owns Wessex Water, one of the most efficient water and sewerage operators in Britain.

This acquisition represents YTL's first major foray into Europe and marks the beginning of another exciting chapter in the growth and development of the YTL Group.

However, Ng's property purchase is an interesting one the acquisition was done when the Aussie dollar was almost at its all-time high against the ringgit (A$1: RM3.084).

Ideally, acquisitions are best done when the exchange rate is in favour of the buyer.

A local property analyst said the “right” price to buy could lead to an opportunity gain.

He said this might well be the case with Ng's recent acquisition of 502 Hay Street.

“The acquisition may be a situation of striking or buying when an opportunity arises, despite the high price of the asset, because of future earnings potential,” he said.

However, the analyst said the situation remained speculative as it was difficult to assess the reason for Ming' purchase, especially with so little information provided by the company.

He said it was generally uncommon for local tycoons to acquire prime property, especially in the developed world, when the exchange rate was not to their favour.

The analyst said it was also a risky decision as the stronger currency might suddenly fall.

“There must be a catch somewhere to compensate for buying a property against a stronger exchange,” he noted.

By The Star