See Hoy Chan looks beyond Malaysia's shores

PETALING JAYA: See Hoy Chan Holdings, the developer of Bandar Utama township, is planning to venture abroad to widen its revenue base.

Director Datuk Teo Chiang Kok said going abroad is a natural progression for the group, especially since conditions for developers in Malaysia are getting tougher.

Teo, in a recent interview with Business Times said countries under its radar include Indonesia, Vietnam, India and secondary cities in China.

"It could be an entire township or just an office building ... we are still exploring. It is a natural progression to look beyond our borders," Teo said.

According to him, the property development environment in Malaysia makes it difficult to obtain sizeable landbank.

Its Bandar Utama land, for example, covers 405ha.

Teo added that the requirement for allocating low cost housing, cross subsidies for utility companies, Bumiputera quotas and discounts add to the cost of housing and reduces yield.

"We will go where opportunities are better and where things can be developed more efficiently. In India and China, return on investment is faster and better," he said.

SHC is also interested in participating in the 1Malaysia Mall projects proposed under the Economic Transformation Plan, that aims to take Malaysian retailers and mall operators abroad.

Besides houses, the Bandar Utama development also houses commercial properties, which includes the 1Utama Shopping Centre, Plaza IBM, KPMG Tower, the five-star One World Hotel and the 1 First Avenue office.

The next development on the cards is for a four-star 450-room hotel and a convention centre with some 18,000 sq m space.

"We will submit the proposal for approval by year-end and it should be ready within three years," Teo said.

The convention centre will be built in such a way that it will be connected to the new hotel as well as to two more office towers, each 30-storey high.

Beyond that, the plan for Bandar Utama includes the establishment of a hospital for which a 3ha site has been set aside. And next to the hospital are plans for the setting up of a retirement village.

Meanwhile, Teo, who had previously not been keen on floating its shares on the stock exchange, is now open to the possibility of listing a real estate investment trust (REIT).

"We have been approached to look at REITS. (The setting up of) REIT looks interesting, but in terms of timing, we are not there yet ... we need our commercial properties to mature a little more and reach critical mass," he said.

He added that the properties could take another three to five years to mature and the company needs a few more buildings, within or outside Bandar Utama.

By Business Times

UOA Development posts RM130m net profit in 1Q

KUALA LUMPUR: UOA Development Bhd, which will be listed on Wednesday, June 8, posted net profit of RM130 million in the first quarter ended March 31, 2011.

It said on Monday, June 6 that its revenue was RM145.7 million and profit before tax of RM155.7 million. The current period profit after tax was arrived at after expensing RM21.9 million for administrative and general expenses and RM22.1 million for tax expense.

“Total expenditure for the quarter under review of RM21.9 million comprises marketing expenses of RM10.2 million, property maintenance expenses of RM1.7 million, finance costs of RM0.7 million and administrative and operating expenses of RM9.3 million,” it said.

UOA Development said the group’s profit and revenue were mainly derived from progressive recognition from on-going development projects which include The Horizon Phase II, Kepong Business Park and Binjai 8, and sales of inventories.

“During the quarter, the Group also recognised fair value gains amounting to RM92.3 million due to the completion of Blocks 3 and 4 of The Horizon Phase II which are held as investment properties,” it said.

UOA Development also said the group planned to launch two other projects -- the Ceylon Hotel Suites located within the Kuala Lumpur Golden Triangle and Kiara IV in Segambut.

It said together, the two development projects would have an estimated gross development value of about RM400 million.

By The EDGE Malaysia

N2N Connect buys officer tower in Bangsar South for RM36m

KUALA LUMPUR: N2N CONNECT BHD is acquiring an 11-storey office building in Bangsar South for RM36 million cash to be partly used as its office space, and to be let out to third party tenants.

In a filing Monday, June 6, N2N said it had entered into sale and purchase agreement with Bangga Istimewa Sdn Bhd to acquire the building known as Block 6 (Type G) as the The Horizon, Phase 1 in Bangsar South.

N2N said it planned to occupy four storeys of the property for its own use and rent out the remaining floor space to third party tenants.

“Based on conservative management estimates of current office rental rates in the vicinity of the property of RM5 per sq ft per month, it is estimated that the rental income to be generated is approximately RM1.76 million per annum, assuming the leasing out of the entire seven storeys of the property to third party tenants,” it said.

N2N said it would finance 75% or RM27 million of the purchase price via borrowings, while the remaining RM9 million would be through funded internally.

The company said the The Horizon, Phase 1, was a commercial development comprising 14 blocks of 11-storey stratified office buildings erected on a three-level basement car park.

The entire blocks of The Horizon, Phase 1, are MSC-compliant and completely broadband enabled, it said.

“The Horizon, Phase 1, forms part of the ongoing integrated township development known as Bangsar South.

“When fully-developed, Bangsar South will consist of Grade-A offices, retail avenues, boutique condominiums, service suites, a clubhouse and a boulevard,” it said.

N2N said that acquisition would provide it savings on its current rental expenses; a hedge against future increase in rental expenses; potential capital gains arising from the expected appreciation in value of the property; and secure sufficient office space to cater for the future expansion of N2N to be housed all under the same roof as the property is designated as a MSC Malaysia Cybercentre.

“It is a conducive environment to promote growth of N2N as a MSC Malaysia status company,” it said.

By The EDGE Malaysia

Noor Arfa keen to set foot in property sector

KUALA LUMPUR: Noor Arfa Holdings Sdn Bhd, a pioneer in the batik industry in Malaysia, is planning to venture into property development and hotel management in the near future.



Its founder, Wan Mohamed Ariffin Wan Long, said that the move is necessary as its core business - manufacturing batik and selling handicrafts - has seen a sharp fall in recent years due to the shortfall in tourist arrivals.

"We are looking for a suitable investor or developers to join us to build a three-star hotel and several chalets around the area at our main showroom in Chendering, Kuala Terengganu," he told Business Times in an interview recently.

Wan Mohamed said the company has over two acres of empty land, which would be ideal for such development. However, it is having a tough time finding the right developer to partake in the project.

"We plan to jointly develop the area with the developer, and the breakdown on how we plan to do this will be finalised once we find the right developer to work on this project," he said, adding that a RM20 million investment would suffice for a start.

Although there are many three- and four-star hotels around the area where Wan Mohamed plans to build his own hotel, he is confident that it would be a hit because of the tourism activities that his place has to offer.

"My place is right next to a river bank (which leads to the South China Sea), there is a nice restaurant here where tourists can do all sort of activities like weaving songket, chanting batik and also shopping for handicrafts (at the showroom). The other hotels don't have that sort of facilities," he said.

Wan Mohamed said his son had approached the Tune Group for a joint venture only to be turned down by the latter as they only set up hotels next to airports.

Wan Mohamed, who started Noor Arfa along with his wife Noor Hijerah Hanafiah in the 1980s, said a lot has changed since the yesteryears as today, not many Malaysians put on the importance of donning the batik. This, he said, is slowly eating into his profits.

"These days, even the civil servants are not following the Thursday rule of wearing batik to work like they once used to," he lamented.

He said the lack of tourism activities or big events like "Visit Year" in Terengganu and the country is also affecting the sales of his batik goods.

"Even the East Coast Economic Region has failed to bring in any sort of development or tourism activities in this area," he said.

Wan Mohamed has two showrooms located in Kuala Terengganu and Malacca, and few other stand-alone shops in Kuala Lumpur.

"Now, many travel agents fly the tourists to the islands and completely bypass Kuala Terengganu. This was not the practice before," he said, adding that Singaporean tourists used to be the biggest spenders back in the good old days.

Asked whether his company plans to be listed on the local bourse, he said that there are many things that need to be ironed out internally before such a plan could take place.

"We did plan to go for listing in year 2000 but at that time, our sales were clocking in at RM16 million a year. Last year, we only made RM10 million in sales and the year before that (2009), it was around RM12 million. I am afraid that this year will be even worse that last year's performance," he said.

By Business Times

Complex to be completed in 2012

Mohd Ali showing the construction of the complex in Malacca during a visit recently.

MALACCA: Construction of the state’s recently revived Customs Immigration and Quarantine (CIQ) complex is expected to be fully completed by March next year.

Chief Minister Datuk Seri Mohd Ali Rustam said the government had strived hard to ensure the project was restored after the initial construction hit a snag due to technical hitches on the part of its previous contractor.

“We have commissioned a second contractor and up to now 38% of the project is completed and if all goes well, we could anticipate the RM73mil complex to be operational by mid-2012,” he said at a site tour recently.

Once completed, Mohd Ali added the complex could accommodate 15,000 visitors arriving from neighbouring countries on a monthly basis.

“This will certainly be a boost for Malacca in terms of the tourists arrivals,” he said.

The CIQ will complement the Batu Berendam International airport as a major gateway to the state and also to expedite the entry process for foreign tourists.

Mohd Ali said once the CIQ was completed, the state could also attract tourist boats from Singapore and Batam to enter the local waterway.

He added that frequency of the current ferry services from Bengkalis and Dumai in Indonesia could also be doubled with the new facility.

The increase, could turn the Malacca port as an optional hub for ferry services from neighbouring countries.

On another matter, Mohd Ali said the government hoped to introduce a tram car to ferry city folks to several selected destinations.

He said the tram service would help alleviate traffic congestions at the city-center while the monorail service was also expected to resume soon and would serve several populated areas here.

By The Star

Bertam Alliance: Property development outlook 'exciting'

PETALING JAYA: Bertam Alliance Bhd is confident of growth this year helped by a favourable outlook from the local property development industry.

Its managing director Tan Ai Tong however did not provide a forecast on the firms's growth numbers for this year.

Last year, the firm's net profit stood at RM15.2 million against RM4.2 million in 2009. Its revenue increased to RM60.2 million last year. from RM39.7 million in 2009

"The outlook for the local property development industry is exciting considering the favourable demographics (65 per cent of the population under 35 years old) and high population growth rate, particularly in the Klang Valley. With the new economic initiatives being driven by the government, both the GDP growth and the property development industry are expected to remain strong.

"We are confident that our 2010 results are sustainable, with the new strategies being adopted," he told reporters after the company's annual general meeting here, yesterday.

Tan said the group is planning a development soon in Cheras which is within walking distance to a proposed MRT station site.

He said the company is also collaborating with a prominent developer, which he refused to name, in the southern region to develop a 270 acre land in Muar, Johor into a mixed development.

"This project will contribute positively to the group's earnings over the next 6 years," he said.

By Business Times

Bigger homes may not be happier homes

The phrase “old is gold” certainly holds true for many things such as family relations and friendships, but it does not seem to apply to consumer items, especially trendy ones. Barely months old gadgets are being replaced by new and trendier ones these days.

This underscores the strong consumerism movement and how it is promoting buying frenzy among the young and old alike.

The list of “must haves” is growing longer and it is not surprising that many of the items are actually status symbols.

One of the most easily replaceable items include mobile phones and other tacky communication devices. The big rush for Apple's new iPad 2 is a good example of how much headway these tacky gadgets are having a hold on the people.

Even though it has been more than a month since its release, there is still a long waiting list for this latest tablet computer. Just try to place a booking for one with an authorised distributor in Kuala Lumpur and you'll know what I mean.

When the economy is doing better, there is a tendency for people to splurge a bit more on themselves and their loved ones.

The property market is certainly one of the biggest beneficiaries of this stronger consumer confidence. Many developers are turning in one of their best sales ever.

From just a handful previously, there are now more developers who have surpassed the RM1bil annual sales mark.

The housing market is riding on this wave and there is a rush for a variety of property, especially well located landed housing projects.

Beelines are once again making their appearance at project launches, and more people are snapping up property either for their own occupancy or for investment purposes. There are also those who are buying to upgrade to bigger houses or move to better neighbourhoods.

It is undeniable that one's residential address has become a status symbol and many can't wait to move to more prestigious neighbourhoods.

Although it is uplifting to have a more prestigious address or move into a better community, one should also think about the consequences of uprooting one's family when moving to a new area.

It will mean new schools, new friends and neighbours, and grown up children, especially teenagers, often don't take to such changes easily. Having built up their bond with their schoolmates, teachers and neighbours over the years, they will need time to adjust to their new environment.

Another issue that needs to be considered thoroughly pertains to how much space the family really needs and how much loan one should commit to.

A bigger house may sound like something to look forward to but it can be a dampener to family bonding, unless efforts are expended to ensure the family find time to gather together in some common areas, like the study and computer rooms, and of course the dining room.

When there are too many floors (more than two storeys), sections and rooms in the house, it may mean the family members may not “bump” into each other often enough, and communication may suffer.

With many families having both parents working and their grown up children driving themselves around, the communication gap may grow wider.

Buying a new property may also mean more borrowings from the financiers unless the buyer has the means to make higher cash downpayment.

Banks have become very innovative these days and a number of them are promoting housing packages where the repayment can be stretched up to the next generation.

The question is whether it is wise to commit to such high loans to the extent of involving one's children in the loan repayment.

I believe one should not over commit in their borrowings, and it is advisable to be prudent and leverage up to one's own ability to repay.

Instead of buying, it can even make better economic sense to rent a house. This way, one gets to enjoy the choice of address, and do not have to fork out any downpayment, or be bothered with the high maintenance and renovation costs to upkeep a property.

Deputy news editor Angie Ng subscribes to the maxim that while everything is in a state of flux and change, sound values should be upheld at all times.

By The Star (by Angie Ng)

Housing dream come true?

PROPERTY players are eagerly waiting for clear guidelines from the Government on how the recently launched My First Home (MFH) scheme is supposed to work. Social housing generally does not provide good returns, developers and consultants point out, and without concrete details, it is even harder to expect the private sector to be actively involved. As always, land is a central issue.

First announced last October in Budget 2011 and officially launched in March by Prime Minister Datuk Seri Najib Tun Razak, the scheme is aimed at helping young professionals between 18 and 35 to own a home priced between RM100,000 and RM220,000. At the launch, Najib expressed his hope that the private sector would view participation in the scheme as a corporate social responsibility (CSR) activity, and not as a venture to profit from.


Ghazali: ‘There are still a lot of existing affordable homes in locations such as Nilai, Rawang and Sepang.’

In other words, the developers are expected to shoulder the costs of MFH projects as part of being dutiful corporate citizens. Nevertheless, it has been reported that the Government was considering providing land at very low cost or for free, even in the Klang Valley, in joint ventures with the private sector. If this indeed happens, says Real Estate and Housing Developers' Association (Rehda) president Datuk Seri Michael Yam, it will help developers to lower costs.

Still, there is this next question on the minds of developers: If the land comes free or cheaper, where will it be? If the sites are far from the city centre or in areas that lack public amenities, will there be enough buyers? As it is, many low-cost housing projects built by the private sector are in areas such as Nilai, Rawang and Sepang, which cannot boast of high demand. If the scheme's objective is to meet demand for homes, allocating land in such locations would be self-defeating.

Lightening the developers' load

Yam says land generally constitutes a fifth of the total gross development cost of stratified properties. “For most parts of the Klang Valley and Penang, the likehood is that housing units below RM220,000 would be stratified apartments with relatively small built-up areas, despite land being free,” he adds.

Elsewhere in Malaysia, it may still be possible to deliver landed properties with smaller built-up areas in less prime areas, if access to completed roads and infrastructure is available, and certain conditions and cross-subsidy requirements are waived.

He points out that the expenditure in developing a property project covers land, manpower, construction materials, consultancy fees, utility contribution, bank interest, cross subsidy for low-cost homes and discounts to meet national aspirations. “If all the stakeholders can review their cost, provide subsidised materials and reduce utility contributions, the final delivery cost can be lowered,” he says. He also suggests that the Government consider providing upfront infrastructure and utilities to further reduce the burden on developers.

Hua Yang Bhd chief executive officer Ho Wen Yan believes that it is possible for developers to offer better homes if the Government supplies the land.

He argues: “With cheaper land cost, better homes with larger living area and better amenities can be provided. With good transportation infrastructure such as integrated highways, the MRT (Mass Rapid Transit), KTM Komuter and other forms of public transport, it is possible to live further away and work in the city. This is a proven model in developed cities all over the world.”

At present, says Ho, urban density in Kuala Lumpur is increasing rapidly. To reduce social and economic pressures, there is a need to look at alternatives beyond the city centre.

He points out that while property developers may not be looking to earn sizeable margins from the MFH scheme, some profit is still needed to make participation viable for them. “Balancing all the factors of cost, land allocation and earnings will be critical towards the long-term sustainability of the scheme. Financial incentives such as tax breaks, rebates and other forms of support will be welcomed by the private sector,” he says.

What buyers want

While the developers focus on costs, the buyers are primarily concerned about three things location, location, location. This has been a perennial point of contention with social housing, be it low-cost or affordable housing. Or any form of housing, for that matter. Because land within or close to the city is expensive, developers tend to build social housing in less-than-prime areas, which explains the poor demand.

Normlly, low-cost housing costs about RM42,000 a unit with a build-up of 650sq ft. Affordable housing, such as those that come under the MFH, is priced between RM100,000 and RM220,000 a unit. Size for units under the scheme has not been determined so far.

With land cost escalating, property consultancy Rahim & Co executive chairman Datuk Abdul Rahim Rahman reckons that developers should be allowed to build premium units in tandem with MFH homes so as to give them a chance to make a profit.

“If the Government provides a 100-acre plot for the scheme for free, or at very low cost, conditions should be imposed whereby the private developer must allocate fixed portions of the project for low-cost and affordable housing. Perhaps 30% of the project can be low-cost housing and 20% for affordable housing. The remainder can generate profits for the developer,” he says.

Generally, Rahim adds, location, demand and transportation are issues that the Government needs to consider. “Old apartments sized at less than 1,000 sq ft can be found for less than RM220,000 in the Gombak area. However, for double-storey houses in Gombak and Cheras, the prices are upwards of RM350,000 and RM450,000 respectively. If they stay in Rawang or Klang, and work in Kuala Lumpur, the cost of daily transport to work is prohibitive.”

Boustead Holdings Bhd director (property) Datuk Ghazali Mohd Ali says if an MFH project is located in the Klang Valley, the developer should be allowed to build affordable homes in place of low-cost units. For similar projects outside the Klang Valley, he says, developers can opt to build low-cost homes instead, as buyer income tend to be lower in such locations and demand may not be as strong given that there is abundant land in these areas.

Ghazali says the MFH affordable homes need to be built in locations where demand is strong as they are meant for young working professionals. “There are still a lot of existing affordable homes in locations such as Nilai, Rawang and Sepang. So it would defeat the purpose of the scheme to build more of such homes in these areas. The Klang Valley remains the top draw for young adults looking for job opportunities. It will continue to be the location of choice for young adult home buyers, unless there is an efficient transportation system serving Nilai, Rawang and Sepang,” he adds.

“Poor response to these units will mean higher holding and opportunity costs for developers.”

The provision of social housing is not something new to developers. Developers of projects of a certain size are required to carve out a portion of their land for low-cost housing. There is also Syarikat Perumahan Negara Bhd (SPNB), a unit of the Minister of Finance Inc, which was set up in 1997 to provide affordable housing.

But for whatever reasons, public response to affordable homes built by SPNB has not been encouraging. Recent reports highlighted the lack of response to 11,400 low and medium-cost housing units completed by the company.

SPNB chairman Datuk Idris Haron says this could be due to the lack of publicity about the homes. With the launch of this MFH scheme, SPNB will act as a one-stop centre for applications and access to financing for homes. National mortgage company Cagamas Bhd will guarantee 10% of the financing for the home purchases. A total of 25 banks have agreed to give out home purchase loans under the scheme.

So far, about 4,516 housing units with retail prices that are categorised under the MFH scheme, have been completed in 12 projects by SPNB. Another 8,991 units in 16 projects are under construction. As of April 30, 772 people had applied for loans under the scheme, while 143 applications have been approved, amounting to RM21.3mil in loans, with an average value of RM149,365 per loan.

By The Star

Fine-tuning necessary for housing scheme

BESIDES the possibility of the Government providing land for free or at low cost, another issue surrounding the My First Home (MFH) scheme is the general consensus that it is unrealistic to have the same limit on monthly income and property price across the country. To date, it has been announced that houses under the scheme are priced from RM100,000 to RM220,000 per unit, and to qualify, buyers must have a monthly salary of not more than RM3,000.

Developers are of the view that the higher land values in the Klang Valley and major cities should be reflected in the MFH scheme.


Leong: ‘The scheme should reflect the higher land values.’

“The scheme should reflect the higher land values, living costs and incomes in the Klang Valley and major cities to ensure there is no mismatch between demand and supply,” says Mah Sing Group Bhd group chief executive and managing director Tan Sri Leong Hoy Kum.

Leong and other developers say a price limit of RM350,000 is more realistic in Greater KL and Penang, and the monthly income limit should be raised to RM5,000.

Real Estate and Housing Developers' Association (Rehda) president Datuk Seri Michael Yam says the present threshold household income for the purchase of low-cost houses is RM2,500, which is just RM500 less than the RM3,000 income limit for MFH buyers.

The minimum property value of RM100,000 should be set aside so that those who are not entitled to the RM42,000 low-cost homes be given a chance to own a property, says Yam.


Chang calls for home buyers to be given preferential interest rate.

Loan financing is another issue linked to the MFH scheme. National House Buyers Association (HBA) secretary-general Chang Kim Loong says buyers with a monthly income of RM3,000 may have problems with mortgage payments, despite the 100% financing provided under the scheme.

Chang explains that based on the previous BLR (base lending rate) of 6.3% and a “market rate” of BLR less 1.8%, the effective interest charged to a house buyer is about 4.5% per annum. Generally, banks practise a rule of thumb whereby any single loan repayment should not exceed one-third of the borrower's gross pay.

“For a RM220,000 housing loan with a tenure of 30 years and 100% financing, a buyer with a monthly salary of RM3,000 would be paying monthly repayment of RM1,115, which is 37% of his gross monthly salary. These borrowers would not have much savings and could default on their loan obligations in the event of personal emergency expenses. Also, it would be impossible for these house buyers to take up additional loans to buy cars.”

Chang calls for home buyers under the scheme to be given a preferential interest rate of 3% fixed throughout the loan tenure. He also says the Government must make it compulsory for MFH projects to be based on the 10:90 BTS (build-then-sell) concept to give maximum protection to home buyers and to shield the Government from potential liabilities as such projects are easier to revive in the event they are not completed.

Under the BTS concept, a buyer only pays 10% of the price on signing the sale and purchase agreement, with the balance to be settled only after completion of the house.

Yam of Rehda concurs with Chang and calls on banks to allocate a block of loans at preferential interest rates with longer loan tenures and with the provision of having joint multiple borrowers.

By The Star

SP Setia plans RM2.8bil projects

PUTRAJAYA: Property developer SP Setia Bhd will redevelop the Sri Johor, Sri Pulau Pinang and Sri Melaka low-cost apartments and the Taman Ikan Emas low cost homes in Bandar Tun Razak, Cheras at a total development value of RM2.8bil.

SP Setia's deputy president and chief operating officer Datuk Voon Tin Yow said the first phase of the project would take off next month.

He said this at a press conference yesterday after a meeting the Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin on the proposal to rebuild the housing area.

Raja Nong Chik said the first phase of the project would involve the development of affordable, quality homes totalling 1,255 units. They would be completed in three years.

He said SP Setia would also undertake an apartment housing project in the area for young executives with each unit to cost not more than RM300,000 and with a built-up area of at least 800 sq ft.

The decision to build quality, affordable homes in the area was made in view of the housing area which has been rundown. The area will be modernised with well appointed homes as well as public facilities and improved landscaping.

Under the second phase, Raja Nong Chik said the housing developer would also develop a commercial and residential centre which will take 14-15 years on the 53.4ha.

By Bernama

Beating traffic congestion

Driving in Kuala Lumpur during rush hour, when people are going to office or going home, one cannot help noticing that the number of cars heading in one direction is matched by the number of cars heading in the opposite direction. People seem to live at one end of the city and work at the other end. The amount of petrol consumed and the number of hours wasted must be phenomenal. How does this come about? Is there a solution?

Improvement of public transportation could reduce the number of cars on the road but the new cars registered every year seem to cancel out the reduction. Restriction of cars from certain parts of the city by imposing a fee for entry during peak hours has been considered and abandoned. These solutions do not seem to work in Kuala Lumpur. Taking taxis is not a pleasant experience because taxis are often old and dirty and the drivers seem to be a grumpy and choosy lot. They avoid certain destinations at certain times of the day, which are usually the very destinations that you need to get to in a hurry.

Actually somebody, whom I will call CK, has found an interesting solution to the problem. CK was a manager in a large foreign manufacturing company and the division under him was famous for the loyalty of its staff. The staff turnover rate in his division was the lowest in the company. There was no need to keep retraining new staff and there were hardly any disruption due to staff quitting.

What was his secret? It was not something you will find in any management book. When he recruited, he selected only people who lived in other towns, not in KL. When they came to KL to work, they would be in a totally new environment and would have to look for accommodation. Naturally they would look for accommodation close to their place of employment, preferably within walking distance. In time, they would get married and buy a house in the same area. Then their children would go to school in the same area. They would be less likely to change jobs and move away.

If your enterprise is located in Cheras and you hire somebody from Kepong, at the opposite end of town, you will create an unhappy commuter who has reason to quit upon getting the first alternative offer.

I saw a somewhat similar principle applied in Singapore when I visited the Marina Bay Sands project while it was still under development. This was a megaproject employing thousands of foreign workers, who would have caused great social disruption in Singapore had they been obliged to find accommodation all over the city. The employers were obliged to house all the workers in quarters nearby so they could walk to work. Food was provided in large comfortable canteens within the project areas. I was told this was the norm in all big projects in Singapore. In this way there is minimal human congestion caused by megaprojects.

Another innovative way to reduce traffic congestion has been tried out in Santiago, Chile and Beijing, China. This was to allow cars with odd-numbered plates and those with even-numbered plates to drive on alternate days. In theory, this should halve the number of cars on the road. But in Santiago, everybody began to keep two cars, one with odd-numbered plate and the other with even-numbered plate. The car population doubled and congestion got worse. The same idea was applied in Beijing during the period of the Olympic Games, and it worked better. The time period was too short for people to consider getting two cars.

In Bangkok, they have motorbike taxis and it has become a common sight for executives in coats and ties to ride pillion in order to get to their meetings on time.

In the Philippines in the 1970s, they gave up getting to meetings on time. The first time I attended a seminar in Los Banos, which is an hour's drive from Manila, I turned up early and thought I had made a mistake about the date and time. Then a few locals turned up. Slowly, the hall filled up. Students came first, then junior academics and junior civil servants, then professors and senior civil servants. Finally, the minister who was to perform the opening ceremony arrived, two hours late. He started his speech with a joking apology, blaming the traffic in Manila for the delay. However, the participants seemed to have timed their arrival very accurately according to their social rank. It looked like a well-practiced pecking-order display, in which everybody knew when to arrive except the foreign participants.

That display, involving about 200 people, would have wasted 600 man-hours. If every minister and provincial governor repeated this every working day, the effect on national productivity would have been calamitous. This was during the early days of Asean, when President Fidel Marcos ruled by decree and the Philippines prided itself as the most advanced country in Southeast Asia. Makati district in Manila had the most modern shopping malls in the region. The streets were filled with big American limousines.

Unknown to us, the country was already beginning its decline to the bottom. The proliferation of time-wasting habits may have been a major cause.

Botanist and researcher Francis Ng is the former deputy director-general of the Forest Research Institute of Malaysia. He is now the botanical consultant to Bandar Utama City Centre Sdn Bhd and the Sarawak Biodiversity Centre.

By The Star (by Francis Ng)

N. Korea launches city facelift to mark anniversary

North Korea said Friday it had launched a construction project to change the showcase capital "beyond recognition" in the run-up to the centenary of its founder's birth next year.

The massive construction will centre on the Mansudae area of Pyongyang where the giant statue of late president Kim Il-Sung stands, the official Korean Central News Agency said.It will include a "monumental edifice", high-rise apartment blocks, public buildings and cultural and leisure facilities including a round people's theatre facing the existing Mansudae Assembly Hall where parliament meets.A restaurant will also be built to face Pyongyang's famous Okryu Restaurant, along with a park.

The new construction will match existing monumental edifices dedicated to the memory of the founder and his Juche (self-reliance) ideology, the agency said."This will change the appearance of the capital city beyond recognition," it added.

The North in 2009 announced plans to build 100,000 new high-rise apartments in three districts of the capital to mark the 2012 anniversary.The latest project has been announced despite chronic food shortages in the impoverished communist state.

UN agencies say six million people, a quarter of the population, urgently need aid.The North has vowed to become a "great, powerful and prosperous nation" by next year, the 100th anniversary of the birth of its founder who died in 1994.The country fosters an all-pervasive personality cult built around the late Kim and his son and current leader Kim Jong-Il.Kim Jong-Il is now grooming his own son Jong-Un as heir apparent.

By AFP

Greenhill bullish on Setia City Mall revenue

SHAH ALAM: Greenhill Resources Sdn Bhd, a unit of the country's largest developer SP Setia Bhd, is bullish that its latest project, Setia City Mall, will generate big revenue.

Part of the optimism is based on the high take-up rate for the mall's retail space.



The estimated RM450 million Setia City Mall is due to open its doors for business in May next year.

Those that have confirmed tenancy include big names like Padini Concept Store, Golden Screen Cinemas, Urbanfresh, Harvey Norman, Fitness First, Courts and Wangsa Bowl.

Greenhill development director Robert Spinks said out of the 250 retailers expected 160 have confirmed their slots in Setia City Mall.

The mall consists of 740,000 sq ft of lettable space spread over four levels of zoned shopping space. Its biggest tenant will be Parkson, which is taking a total of 120,000 sq ft.

Setia City Mall is jointly developed with Asian Retail Investment Fund, a fund managed by the investment arm of global property developer Lend Lease.

"We are confident the opening of Setia City Mall will help boost Greenhill's revenue," Spinks said at a media briefing yesterday.

He did not reveal any sales forecast.

Spinks said construction work on the mall was started in 2009.

"Gross development cost for the Setia City Mall is about RM450 million," he said, adding that the project would be a good and profitable venture for those involved.

Rental varies from RM5,000 to RM30,000, depending on size and lots.

Spinks said Setia City Mall would offer much more than the typical retail destination.

"It will provide a fun and affordable family experience - encompassing shopping, dining and entertainment," he said.

Meanwhile, SP Setia executive vice-president Khor Chap Jen said there will be a convention centre and a 250-room hotel located opposite the northern entrance of the mall.

"The construction of the convention centre, which is large enough to host a 200-table banquet, will commence next month," he said.

The company also plans to launch three blocks of SoHo (small office home office) apartments next to the hotel by the end of this year.

By Business Times

Mah Sing rewards loyal customers

KUALA LUMPUR: Mah Sing Group Bhd yesterday introduced a loyalty rewards programme called "M Club" designed to keep its custo-mers returning to the developer and buy more properties in Johor Baru, Penang and Klang Valley.



The enhanced loyalty programme offers its 10,000 members the chance to enjoy privileges and discounts of up to 30 lifestyle brands.

"We hope in the future our customers will view their M Club as indispensable as their identification card. In fact, in the pipeline is a new-generation Mah Sing Community website complemented by Facebook and Twitter accounts and a community-centric blog," Mah Sing chairman and independent non-executive director Tan Sri Yaacob Mat Zain said in his speech.

He added that M Club members or better known as the Mah Sing community, will appreciate select bene-fits being brought direct to their doorsteps with the simple act of flashing either their classic, gold or platinum M Club card at the merchants, with services ranging from home and living, beauty and health to wellness and personal development.

Among the 30 lifestyle merchant partners are KL Lifestyle Art Space, IHeal Medical Centre, Lightcraft and Times Bookstores.

By Business Times

Encorp Strand bags another property award

KUALA LUMPUR: Encorp Strand, the flagship development of Encorp Bhd, has added another feather to its cap when it clinched the Highly Commended Award (Mixed-Used Development category for Malaysia) of the Asia Pacific Property Awards 2011.

Encorp executive chairman and group chief executive officer Senator Datuk Seri Effendi Norwawi said the award represents the hard work and commitment that have gone into the group's flagship development.

"Encorp Strand is a testament of our relentless pursuit of innovation and providing unbeatable quality, standard, value and services to all our customers, and the award certainly confirms this project's stature," he said in a statement.

Effendi received the award on behalf of the company at the high-profile presentation ceremony at Longemont Hotel in Shanghai, China, on Tuesday.

Encorp Strand was previously a winner of the inaugural The Edge-PEPS Value Creation Award 2010, an accolade for properties with the greatest value creation in terms of capital appreciation as well as sustaining value.

Encorp Strand comprises the fully completed and sold Business Suites, the iconic Red Carpet Boulevard, Garden Offices, The Mall and Residences. Collectively, these components offer a complete living, working, shopping, dining and entertainment experience.

Effendi said Encorp Strand is essentially a product of the group's commitment to innovation and quality for its customers.

"This is the Encorp experience, an experience that is anything but ordinary," he said.

Encorp Strand is easily accessible from Kuala Lumpur City Centre and the rest of Klang Valley via the DUKE highway, Damansara-Puchong Highway, the New Klang Valley Expressway, Middle Ring Road II and Penchala Link of the Sprint Expressway. It is about a 20-minute drive from the city centre.

By Business Times

New project in Iskandar Malaysia set to boost sales

Done deal: Frankie (second right) exchanging the documents with Fujimora (second left) while Tan (right), Takahiro (left) and Ahmad Zahri (thrid right) and Pee look on.

JOHOR BARU: Iskandar Malaysia is set to attract more foreign property buyers who want to make the city as their second home or to invest in properties.

Johor Baru’s proximity to Singapore is one of the strong selling points and many of them are also attracted to the prices of the residential properties which are relatively cheaper compared to theirs home countries.

“Iskandar Malaysia is progressing well since its launch with many infrastructure projects and major developments taking shape within the next one to two years,’’ said Seri Alam Properties Sdn Bhd general manager Frankie Tan Kiat How.

He said this after the signing of Memorandum of Understanding (MoU) between the company and Global Asia Assets (M) Sdn Bhd (GAAM) at the Wealth of Iskandar Malaysia Conference.

Seri Alam Properties was represented by Tan and assistant general manager (Finance) Tan Siew Peng while GAAM by its chief executive officer Fujimora Masanori and general manager Sakanoue Takahiro.

The ceremony was witnessed by Johor committee chairman for Local Government and Housing Datuk Ahmad Zahri Jamil and UMLand Bhd chief executive officer Pee Tong Lim.

The company will develop 110 bungalows, each with a swimming pool with a land area of 4,500 sq ft each and a club house under the Japanese Holiday Homes in Bandar Seri Alam township in Pasir Gudang for Japanese buyers on a 8.09ha site overlooking a lake.

“We believe the project will be a good platform to attract more foreigners to come and buy properties in Iskandar Malaysia,’’ said Tan.

The collaboration, he added, would increase the number of Japanese community within the township which already has from the existing Japanese International School there.

By The Star

S’pore plans more HDB flats

SINGAPORE: Aspiring home owners can expect to see more build-to-order (BTO) Housing Development Board (HDB) projects launched in mature estates next year, promised National Development Minister Khaw Boon Wan on Monday.


Khaw ... ‘I have asked HDB to look into more mature estates as possibilities.’

Announcing this latest policy shift in another blog post, he said: “I have asked HDB to look into more mature estates as possibilities.

“It is too late to prepare suitable sites for this year, but we should be able to put up some for next year's BTO.”

He said that his ministry had been “rather reluctant” to launch BTO in mature estates as it was worried that such popular launches would attract high subscription rates, “further alarming the market”.

“While this is a valid concern, I believe Singaporeans will understand that mature estates will always attract very high subscription,” he said.

“We should not be daunted by such a prospect, but should instead try to meet the aspirations of many young couples wanting to set up nests near their parents. Our response should be to put up more sites in mature estates, even as we ramp up BTO launches elsewhere.”

Khaw added that it would be inevitable that some of these new sites would be near existing residential blocks, and he hoped residents would bear with the construction while works were under way.

The blog, titled Making a Calculated Move, was his third since last Thursday. Like the other two as well as his recent comments it showed the determination of the new National Development Minister to address areas in housing which are causing unhappiness to various segments of Singaporeans.

Last Friday, he spoke of speeding up the construction of new flats and raising the number of BTO units from 22,000 to 25,000 this year. At a forum with youth on Sunday, he said that more rental flats must be built for lower-income families.

Under the BTO system launched in 2002, the HDB builds flats in response to demand for them.

In his latest post, Khaw noted that the current BTO launch for 4,000 new units in four towns was under way. So far, there have been about 8,000 applications, and this was within the ministry's expectation.

Not surprisingly, he said, projects in the mature estate of Tampines are the most popular, with many applying for four and five-room flats.

He acknowledged that new flats in mature estates are more attractive since many couples living there would like to continue to live close to their parents.

This is a move which the government supports, and so it has doubled the chances of such couples under the Married Child Priority Scheme.

The current BTO launch in Tampines was also the first one there in recent years, he noted.

He said that young couples eagerly looking for new homes should calculate their chances.

“My advice to them is to opt for non-mature estates,” he said.

“You improve considerably your chance of securing one in the new towns, instead of competing with many others for the popular projects in the mature estates,” he said, adding “good luck friends, and congratulations on your recent or upcoming wedding”.

For years, the Ministry of National Development's (MND) position has been to focus on launching new flats in non-mature estates such as Punggol and Sengkang.

Last year, former national development minister Mah Bow Tan said that land in mature estates was limited and the mainstay of BTO supply would still be in outlying estates.

Launches in mature estates have proven to be wildly popular.

In 2009, 1,718 BTO flats in Queenstown SkyVille@Dawson and SkyTerrace@Dawson received over 10,000 subscriptions, or 12 buyers for some units in the estate.

In 2007, 400 flats in Telok Blangah Towers were oversubscribed nearly 20 times, with 7,970 applications.

Mature estates usually have more established infrastructure such as recreational and educational facilities and well-connected transport links.

In such areas, land for building new flats is limited and flats built are generally snapped up quickly.

Dennis Wee Group director Chris Koh said that these projects were also likely to be smaller in size, given the limited land.

He added that flats could be built at the perimeter of mature estates.

Colin Tan, research and consultancy director at real estate firm Chesterton Suntec International, said HDB could overcome such size limitations by building taller blocks and increasing the population density.

Khaw's latest announcement gives hope to buyers like human resources executive Teo Yingying, 25, who has applied for a BTO flat with her boyfriend five times with no success. She is hoping for a BTO launch in Tanjong Pagar where she now lives with her parents.

“I want to be near my parents. If we ever have children, my parents can help me take care of them when we're working,” she said.

MND said that it was studying suitable sites and more information would be released later this year.

By Asia News Network/ST

Survey: England, Wales house prices fall sharply in May

LONDON: House prices in England and Wales dropped at their fastest annual pace in over 1 years in May as demand fell for the first time since January, a survey showed.

Property research company Hometrack said prices were 3.7% lower in May compared with a year ago, the biggest decline since October 2009. On the month, prices nudged 0.1% lower after April's unchanged reading.

Hometrack blamed the decline on flagging consumer morale, public holidays and people taking Easter breaks that ran on into May.

“The late Easter break and May bank holidays reduced the volume of traffic through agents' offices,” said Hometrack research director Richard Donnell. “But of greater significance is the growing evidence of weakening consumer confidence.”

Economists expect high inflation, weak wage growth, tax rises and public spending cuts to weigh on consumer spending and house prices this year, despite record low interest rates.

One survey released on May 27 suggested consumer morale may not be as bad as many feared.

The GfK NOP measure showed its biggest rise in almost 20 years in May, although analysts said it might have received a temporary boost from unusually fine weather, the royal wedding and a run of public holidays.

The Hometrack survey showed that the number of new buyers registered with estate agents fell by 0.5% in May, the first decline since January.

The number of sales agreed rose by 1.6% in May, lower than the 8% jump seen in April and March's 12.6% rise.

London continued to buck the national trend, with prices up by 0.2% on the month.

Hometrack said it expected lower demand to keep pressure on national house prices over the rest of the year.

“With concern over household finances and the wider economic outlook, demand for housing is likely to continue to post further modest declines over the summer,” Donnell said.

By Reuters

Mixed views on two offers

PETALING JAYA: Reactions of analysts are mixed about whether minority shareholders of Asia Pacific Land Bhd (AP Land) and OSK Property Holdings Bhd should accept takeover offers for the property developers.

Some opine that shareholders should ask for a higher price for the takeovers, considering that both offer prices are at significant discounts to the book values of the two companies.

On Friday, OSK Property’s major shareholders offered to buy up the remaining of the company they do not own for RM120mil or 87 sen per share.

The stock closed at 79.5 sen just a day before the offer was made. This means that the offer price by OSK Property’s major shareholders was at a mere 9% premium over the last traded market price.

Against OSK Property’s latest net assets per share of RM1.74, the offer price is a 50% discount.

For the financial year ended Dec 31, 2010 (FY10), the company posted revenue of RM144.9mil against RM125.8mil a year ago. Net profit for FY10 was RM11.9mil against RM5.1mil in FY09.

As at the end of FY10, OSK Property’s cash and cash equivalents stood at RM53.2mil.

The company currently trades at 11.25 times price/earnings ratio and has a market capitalisation of RM163.02mil.

Interestingly, the offerors did not provide any rationale for making the offer to take over OSK Property.

Considering the offerors for OSK Property – led by Ong Leong Huat – is making a general offer for the shares of the former, they would need to secure up to 90% acceptances before they can take the company private. This would mean that shareholders have ample room to reject the offer on the table if it is not up to expectations, explained an analyst.

In the case of AP Land, the offer was at 45 sen per share, which is a 9.8% premium over AP Land’s last traded price of 41 sen before the announcement was made, but only 7.7% over yesterday’s closing price of 41 sen.

AP Land’s net asset value per share has stayed above RM1 since 2005.

Under the new takeover rules, offerors will need at least 75% of non-interested shareholders to accept an offer before it can go through.

“This puts more power into the hands of minority shareholders, who can insist of a higher price for the assets of their company,” said one analyst.

On the other hand, the takeover offers do provide an exit opportunity for minority shareholders in companies whose share prices have not performed.

Analysts said that in general, the rationale for these exercises was that both companies had failed to attract market attention and therefore the value of their shares did not reflect the companies’ underlying strengths.

AP Land’s offeror is its parent company, the Low Yat group, which stated the following as the rationale for its exercise: “The liquidity of the trading of AP Land shares has been relatively low, with a trading volume of approximately 349,429 AP Land shares per day during the past one year.

“Therefore, it may not be easy for the shareholders of AP Land to be able to realise their investments in AP Land on the open market.

“The proposals will accord an opportunity for all AP Land shareholders to realise their investment in the company in the short to medium term at a reasonable premium above the historical market prices of AP Land shares ...”

AP Land’s major property projects include Bandar Tasek Puteri in Rawang and a residential development comprising luxury apartments in the Niseko region of Hokkaido, Japan.

Properties under OSK Property’s stable include luxury homes, townships and The Atria Shopping Complex in Damansara Jaya.

By The Star

Analysts have mixed views on Genting’s land purchase in Florida

PETALING JAYA: Genting Malaysia Bhd's land acquisition in Miami, Florida for US$236mil received mixed reactions from analysts while the move is seen as the way to diversify its earnings base and spur growth going forward.

ECMLibra Investment Research viewed the move positively given the choice location of the waterfront property, adding that Florida attracted up to 82.3 million visitors in 2010, of which 87% were local visitors.

“The announcement has made no mention of casino operations but we view that the announcement will be in due course as licences would be required from the Miami-Dade County,” it said in a report yesterday.

Reported in the South Florida Business Journal, Resort World Miami (RWM) president Mike Speller said Genting Malaysia would fund the US$2bil development cost of the project without stating the funding details.


Kok Thay ... ‘Downtown Miami has experienced dramatic residential and commercial growth in recent years.’

CIMB Research is neutral on Genting Malaysia's acquisition and the research house thinks that the deal positions Genting Malaysia to capitalise on the potential liberalisation of “resort-style” gaming in Florida.

It pointed out that there was a question mark over whether the Florida state government would liberalise such gaming in the state.

“This purchase, however, is sizeable, indicating the group's confidence in the success of the mixed development project, in our opinion,” it said.

CIMB left its earnings projections unchanged, pending more details on the acquisition.

“Assuming bank borrowings of US$200mil (85% of total price), we estimate that its net cash will fall by about 33% to RM1.5bil. The total price accounts for less than 1% of the group's shareholders' equity,” it said.

HwangDBS Vickers Research said: “While it is still early to assess earnings impact for RWM, we do not expect any meaningful contribution over the next two to three years. Genting Malaysia's foray into the United States, if successful, will help diversify earnings base and spur growth.”

Genting Malaysia announced last Friday that its subsidiary Bayfront 2011 Property LLC had purchased 13.9 acres in Miami for US$236mil, with plans to build a mixed-use development.

The land includes the building currently housing The Miami Herald Media Company and an adjacent parking lot.

It said in a press release that it was working towards developing a comprehensive master plan for RWM, as the development would be called, which would include hotel, convention, entertainment, restaurant, retail, residential and commercial facilities.

The project aims to capitalise on Miami's standing as one of the world's leading tourism hubs.

Its chairman and chief executive Tan Sri Lim Kok Thay said: “Downtown Miami has experienced dramatic residential and commercial growth in recent years, and we believe the addition of a large-scale mixed-use and entertainment complex will be a welcomed addition, further elevating the area's status as a global destination.”

The acquisition is an integral step for Genting Malaysia as it seeks to expand internationally in the leisure, hospitality and entertainment industry.

The envisioned RWM represents Genting Malaysia's second venture into the United States, after Resorts World New York at the historic Aqueduct Racetrack in the city of New York.

By The Star