Bertam Alliance inks deal for RM400m mixed development project

KUALA LUMPUR: BERTAM ALLIANCE BHD’s unit has inked a joint development agreement for a mixed development project of residential and commercial shoplots in Johor with a gross development value (GDV) estimated at no less than RM400 million.

In a statement Monday, May 9, Bertam said its wholly owned unit UH Capital Sdn Bhd had entered into an agreement with GJH Development Sdn Bhd for the joint development of 270 acres of land at Mukim Seroh in the district of Ledang in Johor.

UH Capital owns the land, and GJH is the developer.

Bertam said the land would be developed in two phases and the planned joint development was expected to commence upon receiving approval from the relevant authorities, with completion expected within six years.

It said all the costs and expenses to be incurred in relation to the proposed joint development would be borne and paid by the developer.

Bertam said that under the agreement, the developer guaranteed that the GDV for the two phases shall be not less than RM200 million each, and that the landowner’s entitlement would be no less than RM40 million for each phase.

On the rationale for the agreement, Bertam said the proposed joint development would allow it, through UH Capital, to unlock the value of the land without having to fund the development cost of the project.

“Furthermore, there will be general cost savings arising from the interest savings from bridging loans, which would have been required if UH Capital were to develop the lands on their own,” it said.

As for the funding of the project, Bertam said UH Capital was not required to finance the development and that GJH shall be solely responsible to meet and defray the development costs in the implementation of the project.

By The EDGE Malaysia

RM50m facelift for Hilton PJ

PETALING JAYA: Hilton Petaling Jaya will undergo its first major renovation in more than a decade, beginning this month.

The makeover, which will involve all its guest rooms, meeting rooms and the ballroom, is expected to involve some RM50 million.

General manager Chris Ehmann said that the renovation will be done in stages and it is expected to be completed in August 2012.

Hilton, which has been managing the property for the past 27 years, has been signed on to manage the hotel until December 31 2025. The hotel is owned by Tradewinds Corp Bhd.

"We will start with six floors on May 9," Ehmann told Business Times in an interview recently.

The hotel has 553 rooms, 17 meeting rooms and a ballroom that can accommodate 600 people.

"The investment will involve all infrastructure such as hot water, new televisions, telephone lines and the back of house," he said.

Ehmann said that its most recent makeover was in 2005/2006 which involved all its food and beverage outlets, main lobby and the public area.

Once completed, Ehmann expects both occupancy and average room rates to increase in line with its new product offerings.

"We pride ourselves on our service and we are excited about the products that will match our service," he said.

When asked about the surrounding competition, he said "It is the people who make the difference."

About 75 per cent of its guests are business guests as the hotel is focused on corporate travellers.

The hotel is essentially divided into three parts: the Main Block (10 storeys), the East Wing and the West Wing, each with 21 storeys.

The hotel, which started as Jaya Puri, came under the Hilton management in 1982. It closed for two years, underwent a RM40 million renovation, added a tower and reopened as Petaling Jaya Hilton.

In 1992, another tower block was added at a cost of RM75 million. Later, the hotel was renamed Hilton Petaling Jaya.

Ehmann said that Petaling Jaya residents will be particularly happy with the refurbished product as it is an iconic building in the area and most people have fond memories of the place. "We are putting Hilton Petaling Jaya back to her glory days," he said.

By Business Times

AmFIRST REIT posts lower profit of RM45m

AmFIRST Real Estate Investment Trust recorded a lower pre-tax profit of RM45.362 million for the financial year ended March 31, 2011, compared with RM54.057 million recorded last year.

In a filing to Bursa Malaysia, the company said revenue decreased to RM88.539 million, for the period under review, from RM98.188 million registered previously.

Meanwhile, Am ARA REIT Managers Sdn Bhd, the manager for AmFIRST, declared a final income distribution per unit of 4.94 sen for the six-months ended March 31, 2011.

Taking into account the interim distribution payout of 4.81 sen, the total dividend was maintained at 9.75 sen, similar to the previous year.

By Bernama

Putrajaya to become model green city with new development

Inspired by ships: Syed Farouk briefing the media on the Maritime Residences.

Driving into Putrajaya is like entering a magical kingdom consisting of buildings with various architectural styles, including from India, the Middle East and Europe.

One of the early buildings is the Perbadanan Putrajaya complex, a landmark in Persiaran Perdana, Precinct 3.

The building is a contemporary interpretation of traditional Islamic architecture. The main feature is the gerbang (gateway) with a public

viewing deck on the top level where one can take in the city skyline including the Palace of Justice and the Grand Mosque. The gateway also providing a vantage point during parades.

The 10-year-old administrative capital has some designs that are marine-inspired with structures resembling ships.

Over the years Putrajaya has been a popular spot for wedding photography as it is a melting pot of natural and man-made beauty.

The development of Putrajaya is carefully planned to maximise the beauty of the various architectural styles and the city also attracts movie-makers.

Among the top 10 structures are the Putra Bridge, Seri Saujana Bridge, Putrajaya Lake, PICC, Putrajaya Botanical Garden, Putra Mosque, Millennium Monument, Putrajaya Corporation Complex, Seri Gemilang Bridge and the Putrajaya Landmark.

Putrajaya Holdings Property (PjH) services division head Syed Farouk Azlan Syed Abdul Aziz said the development plans and the international hub in Precinct 8 which are part of the Putrajaya Master Plan 2011-2016, would attract foreign investments and the expatriate community.

He said the Central Business District on the core island where more futuristic buildings were planned, include office towers, business suites, retail complexes, hotels, institutions of higher learning, recreation and entertainment centres.

“All PjH projects carry the master developer’s signature and developed in line with the Government’s aim to develop Putrajaya as a model green city,” he said during a briefing on the futuristic buildings under construction.

He added that some of the buildings which started construction in 2007 were completed last year and designed with green open spaces.

Syed Farouk said one building that would have visitors talking about in the future is the Maritime Residences, a main residential complex conceived like a fleet of boats floating in the lagoon.

The Waterfront Complex once completed would blend well with the Seri Wawasan Bridge, a cable-stayed bridge.

“This is the iconic building of Putrajaya. One need not go to Dubai to see modern and futuristic buildings. They are all here in Putrajaya,” said Syed Farouk.

He added that a modern waterfront commercial centre — Promenade @ 8, facing the Alaf Baru monument, which is now under construction would be the business and commercial hub of Putrajaya.

Syed Farouk said the landscape of Putrajaya was changing fast and hopefully some of the new building designs would steer the city forward.

The residential population of Putrajaya stands at 80,000 and the working population at 120,000.

PjH hopes for a four-fold increase in the residential population in the near future.

By The Star

Iskandar Malaysia projects a boon for Johoreans, says Ghani

Project boom: The Johor Baru city which is located within Iskandar Malaysia economic growth corridor will benefit from the influx of local and foreign investments.

JOHOR BARU: The roll out of infrastructure projects in Iskandar Malaysia is fuelling demand for houses, land and properties in the economic zone, resulting in price appreciation.

This trend causing a spurt in economic activities was a boon for the people as evidenced by higher wages, improved business opportunities and better living standards, said Menteri Besar Datuk Abdul Ghani Othman.

He said this clearly proved that the development of Iskandar Malaysia not only benefited big contractors and businessmen but also the ordinary people in Johor.

“Ordinary people are beginning to enjoy the fruits of Iskandar Malaysia projects and the massive injection of Federal funds of RM6.8 billion under the Ninth Malaysia Plan to boost infrastructure facilities,” he said in giving a briefing on the progress of Iskandar Malaysia.

The event was organised by Danga Bay Sdn Bhd, the custodian of a privatisation contract awarded by the Johor State Government in early 2000 to develop 1,800 acres of waterfront land along Johor’s Lido Beach.

Ghani said the focus on fiscal priority for Johor will be continued under the 10th Malaysia Plan (2011-2015) with an additional budget of RM1.39 billion.

The Johor state government has also been in the forefront of the development drive with RM313.33 million set aside under its 2010 Budget for a host of other infrastructure projects.

Ghani said almost all the planned Iskandar Malaysia projects had economic elements designed to boost productivity and efficiency, impact the local economy and improve the quality of life of Johoreans.

“The highway projects, for instance, will significantly improve accessibility and connectivity and help open new business hubs, while creating more jobs and contribute in wealth distribution.

Ghani noted that several private sector projects were derailed by the global financial crisis, especially the property market. However, most of these projects are now starting to come on-stream, particularly the residential segment.

The massive infrastructure development in Iskandar Malaysia has resulted a big boost not only in terms of interest but also the commitment from many local property companies either from local or overseas.

Among the players are UEM Land, Australia’s Walker Corporation, Dijaya Corporation, SP Setia Bhd, UDA Holdings, Bandar Raya Developments Bhd, Mah Sing Group, IOI Properties Bhd, Asiatic Development Bhd and Hua Yang Bhd.

Ghani said property players are bullish on the prospects of Iskandar Malaysia and this has created demand for land for their projects, which in turn will for Johoreans.

He said Johoreans will benefit from property value appreciation or land and huge employment opportunities, adding that the challenge for the state government now is to produce skilled workers to meet the future demand.

To ensure the lower and middle income group also benefited from the development of Iskandar Malaysia, Ghani said there are also properties for these category and also rehousing and relocation for the Orang Asli.

Meanwhile, KGV-Lambert Smith Hampton (Johor) Sdn Bhd executive director Samuel Tan said development in Iskandar Malaysia has resulted in appreciation in property and land value.

“Property value for residential, commercial, industrial and land for development have increased substantially. Developers continued land banking in Johor because they are bullish on Iskandar Malaysia,” he said.

Tan said commercial land in Danga Bay has appreciated 181 per cent from RM220 per sq ft to RM400 per sq ft, adding that it has resulted in capital and rental appreciation.

He said the suburbs in Johor will grow due to improved infrastructure and commercial decentralisation, while rural areas will be opened for development due to cost factor.

By Bernama

Prices surge in Iskandar

Setia Tropika, a mixed property development project by SP Setia Bhd Group in Kempas, Johor Baru.

PROPERTY prices in certain areas within Iskandar Malaysia rose dramatically last year, after nearly a decade of lacklustre demand, according to property consultants interviewed by StarBizWeek.

The soaring property prices mainly involves new commercial, industrial and high-end residential units around Johor Baru, the Tebrau corridor and Nusajaya, all within the economic growth corridor in Johor.

KGV-Lambert Smith Hampton (Johor) Sdn Bhd executive director Samuel Tan says that property prices have appreciated by between 45% and 160%, depending on the type of property and location, compared with prices five years ago.


V. Sivadas ... ‘The residential sector around Johor Baru is split into two different worlds.’

“A Danga View Apartment unit that was valued at RM240,000 five years ago can be sold at RM350,000 today,” says Tan.

A similar trend in property prices is noted in double-storey terrace houses in Taman Bukit Indah, Johor Baru, which Tan says are fetching RM380,000 (compared with RM250,000 in 2006). A vacant land in the Southern Industrial Logistics Cluster (SILC) in Nusajaya is now being valued at RM37 per sq ft (compared with RM21 per sq ft previously) and a piece of commercial land around Jalan Datuk Abdullah Tahir, is fetching RM320 per sq ft (compared with RM150 per sq ft in 2006).

Rahim & Co (Johor) Sdn Bhd executive director Loo Kung Hoe says the property boom has resulted in “peak excitement” at auctions.

“In the past, people were careful and there was little interest in auctions. Nowadays, they bid as high as they can for both residential and commercial properties,” says Loo.

Factors behind rise

According to Tan, the strong demand for property is being fuelled by fears of inflation, real needs for housing and the purchasing power of Malaysians working in Singapore.

“There are an estimated 300,000 Malaysians working in the republic and property buyers are impressed by the rapidly developing infrastructure and road networks they see in Iskandar Malaysia.”

Tan notes that the housing and commercial landscape in Iskandar Malaysia has transformed with the entry of property developers such as UEM Land Holdings Bhd, SP Setia Bhd, UDA Holding Bhd, Bandar Raya Developments Bhd, Mah Sing Group Bhd and IOI Properties Bhd.

“In the past, buyers were satisfied with basic one-storey houses. Today, buyers look at factors such as prestige, security and the developer's track record. In another five years, when new residential and commercial areas mature in Iskandar Malaysia, prices will be even higher,” says Tan.

He opines that there is still a lot of upside for the property market in Iskandar Malaysia, especially around the Johor Baru city centre, compared with the Klang Valley.

“The year 2012 will be the tipping point, when projects such as Johor Premium Outlet in Indahpura and Legoland Theme Park in Nusajaya are up and running,” says Tan.

CB Richard Ellis (Johor) Sdn Bhd director Wee Soon Chit adds that the buying euphoria in Johor is also being fuelled by speculation from Klang Valley investors.

Wee says investors' confidence in the region is also boosted by recent reports of a joint venture between Khazanah Nasional Bhd and Temasek Holdings for a “Wellness City” development in Danga Bay.

Strong demand

Loo says there is a strong demand for high-end residential properties such as Leisure Farm Resort in Gelang Patah (developed by Mulpha International Bhd), as well as East Ledang (developed by UEM Land Holdings Bhd) and Horizon Hills (a joint venture between UEM Land and Gamuda Land Sdn Bhd) in Nusajaya.

Another “hot” growth area in Johor Baru is the Tebrau corridor which encompasses the Setia Indah township, Taman Desa Tebrau, Taman Pelangi Indah, and Sunway College in Taman Mount Austin, according to Wee.

However, PA International Property Consultants Sdn Bhd executive director V. Sivadas, who is based in Johor Baru, says the strong demand for high-end properties has not translated into higher prices in the secondary market for older single and double-storey houses in Johor Baru. “The residential sector around Johor Baru is split into two different worlds,” he says.

“New housing units feature the latest designs and many are in gated and guarded developments. A premium is attached to such units, due to security concerns. Within this housing segment, prices have been strong with upward movements of between 10% and 30% over the last two years. These areas include Austin Heights, Taman Sutera Utama, Adda Heights and Horizon Hills.

“Double-storey terrace or cluster units in these schemes are now averaging between RM380,000 and RM500,000. Larger units such as semi-detached houses continue to attract a steady demand, in both the developer and sub-sale markets. Prices here are in the RM500,000 to RM1 mil range.”

However, demand for new double-storey terrace houses which are not located in gated and guarded developments, in the secondary market is very weak.

“There is little price appreciation upon building completion. In most instances, we note a reduction in sub-sale transaction prices,” says Sivadas.

A recent PA International report also points out that there is little demand for old landed housing units around Johor Baru, with some units even priced at pre-1997 rates.

“We do not expect price escalations here due to these being older schemes, as well as due to the continuous offerings of new landed housing units in the market. However, older schemes in the city area such as Kim Teng Park, Serene Park and Taman Pelangi are an exception to this pricing.”

In the condominium sector, the report says that demand remains strong in Johor Baru, due to limited supply in the market.

Prices for high-end condominiums such as that of Petrie Condominium, Johor Baru and the Straits View in Bandar Baru Permas Jaya have exceeded RM350 per sq ft.

The Straits View condominiums which had transacted sales in the region of RM250 to RM300 per sq ft in 2008, are fetching between RM300 to RM350 per sq ft at present.

Service apartments like Ujana in Nusajaya are sold out, while D'Esplanade Residence @ KSL City in Century Gardens, Johor Baru is expected to “do well” as it nears completion, says the report.

However, the PA International report paints a depressing picture for low- and medium-priced apartments.

Apartments in the RM150,000 price range over the last few years, have dipped to below RM100,000 in the secondary market in most areas.

“The number of units put up for sale by public auction companies continues to be be high. This is happening in areas such as Masai, Pasir Gudang, Plentong and Kulai,” says the report.

Boom time

Sivadas says double- and 3-storey shop offices in newer housing estates such as in Taman Nusa Bestari in Nusajaya and in Taman Sutera Utama and Taman Molek in Johor Baru have appreciated in prices over the last two years.

“In most instances, units facing busy main roads and those in established commercial areas, have appreciated by 50%. New 3-storey units offered by developers are at substantially higher prices. All riding on the wave of this euphoria,” says Sivadas.

The PA International report notes that, 3-storey shop offices in Taman Molek that were launched at RM800,000 (intermediate unit) in mid 2000, have an asking price of RM1.3 million today.

In Taman Desa Tebrau, Johor Baru, a 3-storey shop office launched at RM768,000 three years ago, is hovering between RM900,000 and RM1mil today.

The report also notes that rentals for 3-storey shop offices are in the region RM5,000 to RM8,000 per month (intermediate unit), and RM15,000 to RM25,000 per month (corner unit).

Sivadas adds that gross yields for such properties are lower. They have dropped from 6% to 7% two years ago, to about 5% per annum for intermediate units as rental levels are generally unchanged.

Loo points out that some transactions did not seem to be sensible like the shoplots that were launched last year in Taman Sutera Utama, Johor Bahru at RM2.08mil (intermediate unit) and RM2.3 to RM2.6 million (corner unit).

“Currently, the monthly rental is about RM7,500 (intermediate unit) and could go up to RM13,000 (corner unit). So, the yield is between 4.3% and 6% per annum if rentals remain at the current levels when the new shoplots are completed. Perhaps buyers are expecting higher rental yields in the near future.”

He adds that the existing intermediate shoplots in Taman Sutera Utama, launched in mid 2000 were sold at between RM700,000 and RM750,000 per unit and were presently priced at between RM1.5mil and RM1.7mil per unit in the sub-sale market.

Sivadas says that generally, the office space market has fared poorly since the Asian financial crisis of 1997 and 1998.

“Rentals within office towers in and around the city centre continue to hover at RM1.50 to RM2.50 per sq ft per month, inclusive of service charges, thus making this sector a less attractive investment option.”

Also, the retail sector within the city centre have been stagnant over the past year in terms of pricing and rental levels.

Sivadas places part of the blame on the relocation of the Customs, Immigration and Quarantine (CIQ) to Bukit Cagar in December 2008, which he says has diverted traffic and pedestrians away from the city centre.

He also says that there are abandoned retail complexes in Johor Baru, such as Pacific Mall, Kemayan City in Tampoi, and Lot 1 Waterfront City.

There is also ample supply of commercial complexes, such as Aero Mall at Senai, Tesco at Bukit Indah and Giant at Nusa Bestari.

“With massive commercial projects being planned in Danga Bay and Nusajaya, we expect office rentals in the city centre to remain stagnant for the next year.”

Positive near-term outlook

Areas such as Tampoi, Kempas, Seelong, Senai and Nusajaya have seen a gradual increase in the values of industrial land.

The PA International report says converted industrial lands in Tampoi were sold at between RM30 and RM40 per sq ft within the last two years (compared with between RM20 and RM25 per sq ft in mid-2000).

Prices of converted industrial land in Seelong, Kulaijaya and along Jalan Kempas Lama have doubled or more than doubled within the last two years (compared with mid-2000 prices).

“Nusajaya is also a hotspot. Prices in the Nusa Cemerlang Industrial Park, developed by Crescendo Corp Bhd is up by 50% when compared with 2008,” says Wee.

Sivadas says that while the immediate outlook for Iskandar Malaysia is positive, with various projects in the region expected to have a multitude of effects resulting in more job opportunities and higher incomes, it remains to be seen whether the property boom for new developments can be sustained in the long term.

“The key factors now are sustaining demand, and ensuring that supply does not go out of hand,” says Sivadas.

By The Star

Is the 5/95 housing loan scheme a better option?

When Lehman Brothers fell in September 2008, the Malaysian property market entered a challenging period. There were few takers and developers were at a loss as house buyers were few. In the first quarter of 2009, one of Malaysia's largest property developer, SP Setia group coined what was soon to become popularly known as the 5/95 scheme.

Soon after, other established property developers such as Glomac Bhd, Mah Sing Group Bhd, Malton Bhd and Sunrise Bhd followed suit with their 5/95 home loan schemeswith different degrees of success. Some of these schemes could be 10/90, where a buyer paid a 10% downpayment.

Essentially, the 5/95 scheme was meant to help boost property sales which was then being threatened by a slowing economy. Under the scheme, house buyers need to pay 5% of the downpayment while the rest will be financed through a loan. Servicing of the loan starts only when the property is up and ready.

Are these schemes beneficial to house buyers? Or is it another marketing tool of developers?

In the short term, it may seem attractive. After all, one only has to pay 5% or 10% of the price of the house and the next payment is only when one takes delivery of the house. The developer will also bear other entry costs such as legal fees, stamp duty on the sale and purchase agreement and loan agreement as well as memorandum of transfer for purchases under the campaign.

A mortgage loan officer who has done his rounds being on the panel of bankers for various developers says the conventional loans and not the interest-bearing ones, are better options in the long run.

He says that no developer will bear legal fees, interests or stamp duty for free. All these are in fact factored into the price of the house. He says that 5/95 schemes are popular particularly among entrants to the job market because they have problems forking out the downpayment, which is usually the biggest challenge when purchasing big ticket items such as a property.

Because they are young, time is on their side. Such schemes are also popular among speculators because their intention is to sell the house the minute they take delivery of it.

While it is understandable that developers need to sell, what may be prudent for buyers is to ask for an option, to either enter into a 5/95 or to go for the conventional mortgage. And if a conventional loan is possible, whether the developer will reduce the price of the house. However small that percentage may be, it will add up.

A developer of a high-rise condominium project in Petaling Jaya gave buyers an option of a 5/95 scheme or pay more for the downpayment. If a buyer were to opt for the conventional scheme, the price of the house is reduced.

Given the sharp rise in property prices last year, it may appear that most of these house buyers could be sitting on potential profits.

While house prices in the Klang Valley grew by an average of 10% a year in the last two years, selected areas saw astounding growth of 25% annually.

As most of those who bought houses under this scheme, particularly in the Klang Valley, likely comprise those from the middle to upper income bracket as well as speculators, chances of them facing difficulties servicing their loans may be low.

“These days, one can stretch the repayment period from 35 to 40 years, especially if one is in his or her late 20s or early 30s. Thus, the 5/95 scheme, together with the long repayment period, is very helpful for first time buyers,” says a banking analyst. “People like 5/95 because the initial capital outlay is low, hence it doesn't hurt so much. One reason why property prices remain high could possibly be because the hidden cost of 5/95 is already imputed in the price. High as it may be, people continue to buy anyway,” said KGV-Lambert Smith Hampton Sdn Bhd director Anthony Chua.

Another property consultant added that 5/95 was popular because of the affordability factor.

“Many people can't afford the down payment for the 10/90 scheme and are digging into their Employees Provident Fund. So even if 5/95 may be perceived to be more expensive, it will still remain popular, ” said the property consultant.

Chua added that with 5/95, the buyer might be paying more but he wont feel the pinch as the loan period was over a longer period.

“Furthermore, with the real property gains tax at 5%, coupled with our inflationarry environment, it also keeps the risk of buying homes under the 5/95 scheme even lower, as the house price is more likely to increase in tandem with inflation,” said the property consultant.

A banking and property analyst says the difference between 5/95 and 20/80 schemes is merely in the interest portion paid.

“When you pay interest on a 95% down payment versus interest on 80% down payment, of course the interest payment on the 80% is lower.”

She adds that there is a perception of savings under the 5/95 scheme and the buyers' salary could increase after three years, hence reducing the stress on their balance sheet.

Zerin Properties founder and chief executive officer Previndran Singhe adds that when purchasing properties, it is all about the purchasers' cashflow abilities. The buyer will decide based on his monthly income and his ability to service his monthly commitments.

“At the end of the day, it is only an interest issue. Everyone claims that the interest fees and other costs are built into the 5/95 scheme,” he says adding that if a property product is good and developed by a reputable property developer and in a good location, he would encourage the buyer to purchase the property via the 5/95 scheme, especially if the interest rate was low.

“What is more important is to look at the interest rate at the time, not whether it's 5/95 or 20/80,” he says.

With interest rates going up today, the bigger question is this: Will those who buy properties under the 5/95 or 10/90 be committed to their mortgage payments, or will they take the opportunity to cash out?

By The Star

TA plans RM596mil projects this year

Radisson Blu Plaza Hotel in Sydney is owned by TA Global Bhd.

TA Global Bhd is building up its presence as a more robust property player with developments and investment assets in both the local and foreign markets.

The reorganisation of its parent, TA Enterprise Bhd, in 2009 that involved the disposal of TA Enterprise's property assets to TA Global and the listing of TA Global in the Bursa Malaysia Main Market, has paved the way for the group to flex its muscles in the property arena.


Datin Alicia Tiah

TA Global is now a 74%-owned subsidiary of financial services group TA Enterprise.

According to TA Enterprise managing director cum chief executive officer Datin Alicia Tiah, contribution from TA Enterprise's property subsidiary is set to grow with the higher number of project launches these one to two years.

In property development, projects worth RM596mil in the Klang Valley, Australia and Canada, are among the projects scheduled for launch this year. Last year, only RM180mil worth of projects were launched.

The latest launch is that of Azelia Residence @ Damansara Avenue in Sri Damansara, Kuala Lumpur, comprising 250 condominium units with estimated gross development value of RM210mil. The launch today is only limited to 43 low-rise residences and 58 high-rise units worth some RM120mil.

Tiah says Damansara Avenue is a 48 acre master planned development with a balanced mix of signature office suites, lifestyle retail and alfresco styled F&B outlets, corporate office towers, a business class hotel and lifestyle retail mall.

Launch last August, it is targeted for completion in 10 years.

Located within the growth corridor of Desa Park City, Mutiara Damansara and Sungei Buloh, she says some RM100mil will be expended to build dedicated infrastructure accesses for the development.

Other project launches coming up in the third or fourth quarter this year will be condominium projects in Dutamas and Cheras in Kuala Lumpur.

The Dutamas project will feature residences of between 1,500 sq ft and 1,700 sq ft while the project in Taman Permata, Cheras, will be smaller residences of 500 sq ft to 1300 sq ft.

TA Global is also planning to launch its two overseas projects in Canada and Australia this year.

The C$170mil Gardens project in Richmond, British Columbia in Canada featuring 470 apartments and about 70,000 sq ft of retail cum office space, is earmarked for launch around June or July.

The Little Bay project in Sydney comprising townhouses and courtyard homes with estimated GDV of A$600mil, is for launch in the fourth quarter this year.

Tiah, who is also a non-independent non-executive director of TA Global, says the property group is also enlarging its base in the property investment and hospitality arena.

A number of its upcoming projects in Kuala Lumpur will comprise mixed commercial projects.

Its pipeline of new projects include the TA3 and TA4 development which will feature twin 50-storey blocks of mixed development comprising a hotel tower and a residential tower with retail podium.

Located on 2.47 acres in Jalan P. Ramlee, Kuala Lumpur, the project, targeted for launch in 2013, will have an estimated GDV of RM1.38bil.

Another commercial project in the drawing board is the Nova Square development on 3.075 acres at the corner of Jalan Imbi and Jalan Bukit Bintang, Kuala Lumpur.

The project, scheduled for launch in 2014, will comprise three office and residential towers and have GDV of RM1.35bil.

In the hospitality sector, TA Global has made a number of hotel acquisitions in recent years.

Tiah says the hotel assets were acquired during the bad economic times and the group managed to get quite good deals for them.

Radisson Blu Plaza Hotel in Sydney was bought in 1997 for A$120mil; the deal for Aava Whistler Hotel in Vancouver, Canada, was concluded in 2008 for C$35mil; Swissotel Merchant Court in Singapore was purchased in 2009 for S$260mil; and Westin Melbourne was also bought in 2009 for A$160mil.

Its latest hotel acquisition was concluded on April 6. It paid US$60.75mil for Swissotel Kunshan, a five-star hotel in the city centre of Kunshan in Jiansu province, China.

Tiah says TA Global is mulling plans to set up a hospitality real estate investment trust to unlock the value of its five hotel assets that have a combined asset value of more than RM2bil.

She adds that the plan is still preliminary and will only materialise when the timing is right. TA Global's property investment assets include two office buildings the 37-storey Menara TA One in the vicinity of Kuala Lumpur City Centre, and Wisma TA in Petaling Jaya. It also owns the 24-storey Fortis BC Centre located in the central business district of Vancouver, Canada.

By The Star

St Regis KL aims to be rates leader

KUALA LUMPUR: Luxury hotel St Regis Kuala Lumpur may very well be the rate leader in Kuala Lumpur when it opens its doors in 2014.

"We expect to see St Regis as a market leader from a rate stand point ... although not necessarily from an occupancy stand point," Starwood's regional vice-president Southeast Asia Chuck Abbott said.



"It would be great to see rates in KL reach RM1,000 (per night), which would be in line with other destinations for luxury hotels like St Regis," he told Business Times in an interview.

The St Regis here is expected to open in 2014. Currently, rate leaders in Kuala Lumpur rake in an average room rate (ARR) of between RM550 and RM650.

St Regis competitive set in countries across the region includes the Four Seasons, Ritz Carlton, Mandarin Oriental, Park Hyatt, The Peninsula and The Raffles.

According to Abbott, who is also responsible for Singapore and Indonesia, the St Regis in Singapore and Bali are both leaders in their competitive set.

The St Regis here, located in KL Sentral, is a RM1.2 billion development that will include a 208-room hotel and 160 units of apartments. The lower floors of the 48-storey building would be the hotel portion.

St Regis hotel rooms are expected to be a minimum of 60 sq m and its largest suite will measure 300 sq m.

The residences, meanwhile, which is yet to be launched, will have one bedroom up to four bedroom units. There will also be two penthouses.

Starwood has a management contract with the owner One IFC Sdn Bhd. The shareholders of One IFC are CMY Capital (60 per cent), Malaysian Resources Corp Bhd (30 per cent) and Jitra Kerkasa Sdn Bhd (10 per cent).

Meanwhile, when asked about Starwood's performance in Malaysia, Abbott said that year to date Malaysia continues to show solid growth in occupancy and a double-digit growth in revenue per available room (revpar).

Revpar multiplies the hotel's average daily rate with its occupancy.

Earlier this month, Starwood announced that it has signed up with Dijaya Corp Bhd to manage a W hotel in Jalan Ampang, KL.

The W Hotel will have 150 rooms and will be part of the 50-storey hotel-cum-residential block being built where the Bok House used to sit. It will open in 2016.

With this addition, Starwood will operate a total of 13 hotels in Malaysia in the next five years.

Starwood hotels in Kuala Lumpur now include Westin, Le Meridien and Sheraton Imperial. Starwood also has a 49 per cent stake in Sheraton Imperial.

In Langkawi, it operates the Sheraton Langkawi, The Westin Langkawi Resort & Spa, The Andaman Langkawi and a Luxury Collection. The Four Points by Sheraton Langkawi Resort is scheduled to open end-October 2011.

In East Malaysia, it has the Le Meridien Kota Kinabalu and Four Points by Sheraton Kuching, and will be opening later this year the Four Points by Sheraton Sandakan.

By Business Times

Property expo sale in state

JOHOR BARU: Prospective property buyers have some 8,000 units of residential, high-rise homes and commercial developments to choose at the Malaysian Property Exposition (MAPEX) sale here.

The four-day fair at City Square, which will end tomorrow, is aimed at attract Johoreans to buy these properties under the ‘My First Home Scheme’, which was launched by Prime Minister Datuk Seri Najib Tun Razak.

MAPEX organising chairman Wong Kuen Kong said the total properties put up for sales were valued at RM4.1bil.

“I believe the scheme will prompt first time buyers to look into buying residential properties such as semi-detached houses, terrace houses, condominiums, apartments and flats.”

Wong said with the demand for high-end properties, the industry can expect a boost in their sales this year.

He said there is a trend among Johoreans to look for semi-detached houses and bungalows to own.

Real Estate and Housing Developers’ Association Malaysia (REHDA) Johor branch deputy chairman Koh Moo Hing said the local property market is going to benefit following improvement in the bilateral ties between Malaysia and Singapore.

He said the development of Iskandar Malaysia would be another pulling factor to attract Singaporean buyers.

“Local properties are still comparatively cheaper compared to those in Singapore with the strong Singapore currency,” he said.

The fair opens from 10am and 10pm.

By The Star

Simple basics to sustainability

It is true that words like “going green” and “sustainable” carry much weight these days and many times they have been exploited by various quarters as tools for some personal agenda or to promote product sales.

Marketers from various “walks” of industries have benefited substantially from the green and sustainable pitches, and no wonder we have been bombarded with these words everywhere we go.

To be green or sustainable compliant does not just mean that some special methods or ingredients are used in the making of a product. It goes deeper than that.

I personally believe that it actually applies to every facets of our believe system, as well as the way we live and do things.

Simply put, it means the human race must re-learn to survive as minimalist and accept that the most basic way of life one without exploiting Mother Nature is the most natural, green and sustainable way.

The ongoing climatic and environmental changes are hot topics these days, not because it is trendy but because people are being affected one way or another. Most of us must have noticed that the once benign morning sun is scotching hot even way before the clock strikes noon and thunderstorms are happening more regularly and are louder.

While some parts of the world are facing severe drought, flooding has become a regular occurrence in some countries.

Cyclones, hurricanes and earthquakes are also striking more regularly causing lost of lives and major damages to property.

Doing our bit to arrest further decadence in our environment should be made everyone's duty and not merely a lip service. Among the top priorities in the list of “to dos” include cutting back on the usage of electricity, water, paper and food consumption.

As weather conditions deteriorate further and temperature rises, these items will become rare commodities, and it pays to preserve them by minimising their usage.

Although we have to pay tribute to inventors like Thomas Edison for inventing the light bulb which revolutionise the way people live, we should not succumb to the mental siege of “can't do without electricity or electronic devices”.

Instead of clamouring for the bright lights, we should instead promote the habit of seeking out more “light out” opportunities with just the stars in the sky for company.

Many of us who are from the “Baby Boomers” generation, should remember our school camping trips and those treasured moments of sleeping out under the glittering stars a rare opportunity worth savouring by all ages.

Reminiscing those simple luxuries reminds me of an article which I have read in the National Geographic that stressed on the side effects of over-exposure to too much bright lights in buildings and “dazzling, almost blinding” electronic screens and billboards.

It has been found that these light can be detrimental to our health and affect the concentration of road users, including pedestrians and drivers.

Those who live near brightly-lit buildings have been found to be sleep deprived and affected by sleep disorders. So, don't be too distraught if there is suddenly a blackout in your neighbourhood as it could be a blessing in disguise to catch up with one's sleep.

Of course, the way our houses and work places are designed and built will be a major factor when it comes to rating how environment friendly and sustainable they will be. To qualify as green and sustainable, buildings should be able to function no matter what.

Why do we need to depend on air conditioning to cool the building whereas natural ventilation, big open windows and double volume ceilings should be able to do the trick?

As for lowering the water bill, remember those times when our elders collected rain water in buckets during heavy downpours to be used for watering plants later? Likewise, water used to wash rice grains is believed to be natural fertilisers and was collected for plant watering.

If more “out of the box” designs and features are drawn up for our property schemes, they should fare better in the green and environment index.

Another sustainable issue I believe is the one concerning the over dependence on maids by Malaysian families these days.

The “can't do without a maid” syndrome will turn out to be unsustainable in the near future. This is already happening with maids from some countries as demand outstrips supply, leading to higher agency fees and wages.

The sustainable solution will be to draw up a duty roster and get every member of the family to put in their fair share for the upkeep of the household.

Deputy news editor Angie Ng's food for thought to promote sustainable and functioning families avoid favouritism and promote more spontaneous two-way interaction and communication between parents and children.

By The Star

TA Global mulls setting up REIT for hotels

Datin Alicia Tiah with a model of Azelia@Damansara Avenue

KUALA LUMPUR: TA Global Bhd may consider setting up a hospitality real estate investment trust (REIT) to unlock the value of its hotel assets that are located in China, Singapore, Australia and Canada which have a combined asset value of more than RM2bil.

Besides the hospitality business, TA Global, a 74%-owned subsidiary of financial services group TA Enterprise Bhd, is also involved in property development and investment.

According to TA Enterprise managing director cum chief executive officer Datin Alicia Tiah, the plan for a REIT was still preliminary.

“We may consider the REIT as part of the group's strategic plans going forward and are still studying the various options. It is important to get the timing right before proceeding to reit' our hotel assets,” Tiah told StarBiz in an interview yesterday.

TA Global's latest hotel acquisition was concluded on April 6. It paid US$60.75mil for Swissotel Kunshan, a five-star hotel in the city centre of Kunshan in Jiansu province, China.

The vendor was Dubai-based Kingdom Hotel Investments, a subsidiary of diversified Saudi conglomerate Kingdom Holding Co.

Its other hotel assets include Swissotel Merchant Court in Singapore that was purchased in 2009 for S$260mil while Westin Melbourne was purchased in April 2009 for A$160mil, Radisson Blu Plaza Hotel in Sydney was bought in 1997 for A$120mil, and the 193-room Aava Whistler Hotel in Vancouver, Canada, was purchased in 2008 for C$35mil.

Tiah, who is also a non-independent non-executive director of TA Global, said TA Global's hospitality business accounted for 63% of the group's revenue of RM410.03mil for the financial year ended Jan 31, 2011, while property development made up 22% and property investment 13%. Pre-tax profit for the period was RM125.34 mil of which hotels made up 41%, property development 31% and property investments 15%.

The group is also looking to launch more property projects both in the country and abroad later this year.

Projects worth some RM596mil are among the pipeline projects, a big jump from RM180mil that were launched last year.

Azelia Residence @ Damansara Avenue in Sri Damansara comprising 250 condominium units with estimated gross development value of RM210mil, will be launched this Saturday.

The initial launch will comprise 43 low-rise residences and 58 high-rise units worth some RM120mil.

Launches coming up in the third or fourth quarter this year will be condominium projects in Dutamas and Cheras in Kuala Lumpur.

The Dutamas project will feature residences of between 1500 sq ft and 1700 sq ft while the project in Taman Permata, Cheras, will be smaller residences of 500 sq ft to 1300 sq ft.

TA Global is also planning to launch its two overseas projects in Canada and Australia this year.

The Gardens project in Richmond, British Columbia in Canada will comprise 470 residential apartments and about 70,000 sq ft of retail cum office space.

The project earmarked for launch around June or July will have an estimated GDV of C$170mil.

It is a 35:65 joint venture between Townline Gardens and TA Development One Canada.

Of the 22.78 acres of land, the development area will take up 10.5 acres while the balance 12.28 acres will be used for a park.

Meanwhile, the project Down Under, the Little Bay project in Sydney, is targeted for launch in the fourth quarter this year.

Located on 33.6 acres, the low-rise residential development comprises townhouses and courtyard homes with estimated GDV of A$600mil.

The project is a 50:50 development sponsorship with Charter Hall Group of Australia.

By The Star

Mutiara buys stake in Tambun unit

PETALING JAYA: Property developer Mutiara Goodyear Development Bhd is acquiring 40% stake in Palmington Sdn Bhd, a unit of Tambun Indah Land Bhd, for RM2.34mil cash in a move to jointly develop 527 acres in Seberang Perai.

In a filing to Bursa Malaysia yesterday, Mutiara Goodyear said it was selling the 527 acres to Palmington for RM233.2mil cash.

Mutiara Goodyear has agreed to provide funding in proportion to its shareholding in Palmington to part-finance the purchase of the land, amounting to RM98.8mil.

In a separate press release, Tambun Indah would finance its portion of the land purchase amounting to RM139.9mil via internally-generated funds and bank borrowings.

Mutiara Goodyear executive chairman Hamidon Abdullah said, “I am very confident with the prospect of this development due to its proximity to the Penang Second Bridge.”

By The Star

Mulpha Land proposes RM101m rights offer

Mulpha Land Bhd, a Malaysian property developer, proposed a rights offer to raise about RM100.5 million (US$34 million) to help finance its business expansion, according to a company statement late yesterday.

The indicative price for the rights issue, which comes with free warrants, is 22 sen a share, the company said.

By Bloomberg

Residential property boom in Johor Baru

Johor Baru: The prices of residential properties have risen by an average of 40 per cent since 2006, in a city which used to suffer from an overhang of properties.

For example, Casa Almyra, a project by Danga Sdn Bhd, has seen prices go up to RM800,000 from RM450,000 in 2006.

KGV-Lambert Smith Hampton (Johor) Sdn Bhd executive director Samuel Tan said while transaction volume has not been very exciting, value of transactions have grown by leaps and bounds in the Iskandar region.

He said property owners and buyers can expect property prices in Johor Baru to rise by a further 10-20 per cent by end of 2011, on increased costs alone.

The price of commercial land in areas like Jalan Datuk Abdullah Tahir, Danga Bay and Tebrau area have also more than doubled since 2006.

More than half of these buyers are now locals.

"People are land-banking in Johor Baru because they see something in Iskandar Malaysia," Tan said.

Property developers seem to be subscribing to this theory, considering the influx of property developers to Johor Baru.

Established players like SP Setia Bhd have no less than four simultaneous projects in Iskandar, while Bandar Raya Developments Bhd and IOI Properties have also launched major developments.

Some RM28.26 billion property development projects have been approved since 2006.

"If we used to count the number of property developers who are here, now its easier to count those who are not here," Danga Bay Sdn Bhd chief executive officer Datuk Lim Kang Hoo said, adding that the heightened interest has helped revive some 90 per cent of stalled commercial and residential projects in Johor Baru.

Menteri Besar Datuk Abdul Ghani Othman said the spurt in economic activity is a boon for the man in the street, as evidenced by higher wages, improved business opportunities and better living standards.

By Business Times

'Wellness City' likely to miss launch deadline

JOHOR BARU: Khazanah Nasional Bhd and Temasek Holdings's joint venture "Wellness City" development in Johor Baru is likely to miss its May launch deadline, as bilateral discussions continue between Singapore and Malaysia.



Johor Menteri Besar Datuk Abdul Ghani Othman said the joint venture has been included in Points Of Agreement (POA)++ discussions between the two countries, which are only expected to be concluded by the end of the year.

"Its' been referred to as a "Wellness City", what constitutes as "Wellness", that has to be sorted out by the two joint venture partners.... but at least to some extent there has been some commitment. The site has been agreed upon.., it's somewhere where we are now," he told reporters at Danga Bay Sdn Bhd's sales office in Johor Baru last Saturday.

Danga Bay Sdn Bhd was awarded a privatisation by the Johor State Government in early 2000 to develop 720ha of waterfront land along Johor Baru's Lido Beach.

In a joint statement on the "Wellness City" project issued in May 2010, both countries' leaders had said they looked forward to a launch by May 2011.

The POA++ includes talks on an Rapid Transit System (RTS) to improve accessibility between Singapore and Johor Baru.

"The issue is where to connect (between Singapore and Johor Baru) and what kind of RTS we are talking about. Now its just a general term, RTS," Abdul Ghani said.

Some 60,000 to 70,000 motorcyclists cross the causeway to Singapore on a daily basis.

"JB Sentral hasn't got the space for it where as Kempas has about 80ha of land. The chances are we will link the RTS to Kempas Baru Railway station," Abdul Ghani said.

By Business Times

UK April house price fall biggest in 18 months

LONDON: House prices in England and Wales fell in April at their fastest annual pace in 18 months and are likely to slip further this year on fears about the economic outlook, Hometrack said yesterday.

The property data firm's monthly survey showed prices were 3.3% down in April compared with a year ago, the biggest decline since October 2009, when Britain was emerging from recession.

Stronger demand left prices unchanged on the month, ending a nine-month run of falls.

However, Hometrack said the pick-up in demand was likely to fade during the rest of the year as public spending cuts, tax rises and waning consumer confidence take their toll.

“The second half of 2011 is likely to emerge as a new phase where rising supply will constrain any further improvement in pricing levels,” said Hometrack research director Richard Donnell. “Weaker consumer confidence could result in a slowdown in demand which would exacerbate the pressure on prices.”

The proportion of the asking price that sellers received in April fell to 92.6% from 92.7%, in what could be an early sign of buyers' increasing power, he added.

The number of new properties listed for sale rose in April by 5.5%, compared with 5.2% in March.

New buyers registered with estate agents rose by 2.8% in April, down from March's 4.2% increase.

London continued to buck the national trend, with a 0.3% month-on-month price rise in April. Reuters

Prices fell in every other region, led by the northeast's 0.4% decline.

The British Bankers' Association said last week that UK mortgage approvals fell by 10% in March compared with a year earlier.

By Reuters

Record year for property transactions seen

PETALING JAYA: Malaysia is likely to see a record year for property transactions and home price appreciation could accelerate, said CIMB Investment Bank Bhd.

In its latest report for the Malaysian property sector, the research house said it remained particularly bullish on residential properties as house prices were likely to trend higher and volumes would scale new highs.

“Developers benefited from the increase in transaction values and rising house prices in 2010 and will continue to do so in 2011,” it said.

According to the 2010 Property Market Report (PMR) published by C H Williams Talhar & Wong, property transactions last year rebounded from 2009's slump at 11% to 376,583, with transaction values rising 33% to a record RM107.44bil. Residential prices in all states also rose, gaining an average 6.7%, the quickest pace since the 1997/8 Asian Financial Crisis at 6.7%.

“While the authorities may fret about property bubbles and take measures to cool down the sector, history shows that such actions do not burst bubbles and merely slowed down the ascent of property prices and resulted in short term profit-taking on property stocks,” CIMB said, adding that it did not expect any major negative policies to be introduced for the property sector until after the general elections, widely expected to be held later this year or early next year. While CIMB maintained a bullish stance on residential property sector, it said prospects for commercial properties in the country did not look promising due to the significant new supply coming onstream.

In that regard, it said, “property investment companies would continue to be weighed down by soft rental rates stemming from relatively high vacancy rates and substantial new supply.”

The PMR showed weak demand and rising supply were already weighing down occupancy rates for commercial properties, particularly office spaces in the Klang Valley, last year.

By The Star

A green look at property value

A growing number of developers and building owners in Malaysia are recognizing the value of going “Green”. The term sustainable development has interchangeably been used to reflect “green features” in the development.

In some countries, sustainable development has a deeper meaning than simply applying “green features” as it is used to tackle a number of global issues such as poverty, inequality, hunger and environmental degradation.

But, in the context of property development in Malaysia, it can generally be referred to as practices that can lead to more environmentally friendly and ecologically responsible decisions and lifestyles, which can help protect the environment and sustain its natural resources for current and future generations. Earth Summit in Rio, Brazil in 1992 was one of the major international efforts to bring sustainable development to the mainstream.

In Malaysia, while some developers have taken their own initiatives to achieve international green certification such as LEED, and BCA Green Mark, the establishment of a green rating tool known as Green Building Index (GBI) by Greenbuildingindex Sdn Bhd, a group of architects and engineers in February 2009 has marked another level of achievement in our effort to preserve and save the environment. Developed to promote green design, construction, reconstruction and operation of buildings, GBI focuses on six green criteria, such as energy efficiency, indoor environmental quality, sustainable site planning and management, materials and resources, water efficiency and innovation.

It was reported that currently there are 21 GBI-certified buildings; some of them are Sunway SPK 3 Harmoni, 311 House, Ken Bangsar Serviced Residences, Pusat Tenaga Malaysia, 1 First Avenue and Menara Worldwide.

In March this year, GBI Township Rating Tool was launched to further mark a green effort to transform our communities. The six assessment criteria are climate, energy and water; ecology and environment; community planning and design; transportation and connectivity: building and resources as well as business and innovation. Five pilot projects that were reported to have registered with the GBI are TTDI Alam Impian, Boga Valley, Ken Rimba, Elmina East, and Karambunai Intergrated Resort City.

With the growing interest in green development, critical questions have been raised by property buyers and investors - whether there is an enhancement to the market value of green-rated properties or is it an over-enhancement? Will these green properties be more marketable and attractive for investment purpose? In Malaysia, a comprehensive study on this subject has yet to be conducted. However, at this stage, we can also learn from experience in countries that are more advanced in the green initiatives.

A survey conducted by New York Times in 2006 concluded “when faced with the choice of renting or buying two similar apartments, consumers increasingly will opt for the one with Green features, even if it comes at a higher price.” In a study on the need for Green features in buildings conducted by Harvard Business Review in the same year, it recommended that building owners of “standard” buildings needed to adopt Green features, otherwise their buildings would face massive obsolescence.

In Germany, which is more advanced in its environmental movement, sustainability has become a key factor, where building owners would have difficulty leasing the properties if environmental measures were not taken into consideration.

Jamestown Properties, a German commercial real estate investment company, has recently announced that it will invest its entire US$4bil portfolio of buildings in the United States in “green” buildings. Other prominent investment funds that are incorporating green buildings and energy-efficient buildings and other principles of sustainability into their property selections and portfolios are Investa Commercial Property Fund based in Australia and Rose Smart Growth Investment Fund 1 in New York.

In terms of rental rate, a study led by Professor John M. Quigley of University of California in Berkeley concluded that rents for green offices were about 2% higher than rents for comparable buildings within the same area. However, in terms of appreciation, the result has yet to be seen because most of these green-rated buildings have been around only for the last few years and only a few, if any, have been re-sold.

And the profile of prospective buyers might also influence the value placed on the properties. For example, a buyer or tenant who places high value on green efforts as part of their Corporate Social Responsibility might be willing to pay higher prices or rental. In the case of Jamestown Properties, some of the properties will be held between seven and 10 years to benefit from reduced operating costs.

Back home, the asking rental rate at Menara Worldwide, a newly completed GBI-certified office building at Jalan Bukit Bintang is RM6 psf, which is comparable to the average rental rate of standard prime buildings in the city centre. Rental rates of existing prime office buildings within this area range from RM5.80 psf to RM7 psf. On the other hand, the asking rental rate of another GBI-certified office building, G Tower, which was completed in 2009 and also a MSC-status building, is RM6.80 psf, about 13% higher than the average rate of RM6 psf.

Rental rates of existing prime office buildings within this area range from RM5.50 psf to RM9 psf. In 2009, Shell People signed a 15-year lease at rental rate of RM8.50 psf for office space at 348 Sentral, which is expected to be completed in 2012 consisting of 33-storey office tower and 21-storey serviced residence to be certified by LEED Gold standards. Current rental rates of existing prime office buildings within this area range from RM6 psf to RM7 psf.

It can be concluded that at present, the difference in rental rates between green and non-green buildings is not so much due to the green features, but more of supply and demand factors within the specific location. With proper method of valuation being used to take into account green features, I believe there would be more recognition of the actual benefits of green buildings in the future.

Senator Datuk Abdul Rahim Rahman is the executive chairman of Rahim & Co group of companies.

By The Star

Mah Sing completes purchase of land

Mah Sing Group Bhd has completed the purchase of a 141,084 sq m prime freehold residential land in Cyberjaya from Cyberview Sdn Bhd and Setia Haruman Sdn Bhd for RM51.63 million.

The purchase of the land was made through the company’s wholly-owned subsidiary Myvilla Development Sdn Bhd.

By Business Times