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Saturday, July 2, 2011

How Sungei Buloh became the horticultural hub of Malaysia

GARDENERS all over Malaysia know of Sungei Buloh as the hub of horticulture in Malaysia. Centred on the grounds of the old leprosy hospital and settlement, Sg Buloh has, in the past 50 years, become the place to see what is new and available in garden plants.

In the early years of the 20th century, lepers were sent into exile to islands such as Pangkor Laut and Pulau Jerejak. In 1930, the hospital and settlement in Sg Buloh were established by the government of British Malaya to serve as a central facility to treat and house leprosy patients and the island settlements were gradually closed.

The patients lived in simple one-room duplex houses with a bit of land around each house on which they could grow vegetable and keep chickens. The patients and their families had practically no prospects of getting out and re-integrating with society at large.

By the 1950s the doctors were confident that leprosy had been beaten medically, but social acceptance of cured patients posed a huge problem. Then John Wyatt-Smith of the Forest Research Institute at Kepong a few miles down the road decided to do something about it. He arranged for about 30 able-bodied men from the settlement to be employed at the institute (now Forest Reserve Institute of Malaysia or FRIM). This was no small undertaking.

No other organisation was willing to offer employment. FRIM was able to take the lead because John Wyatt-Smith was such a respected and towering figure at the institute and the forest department.

When I joined FRIM in 1964, Wyatt-Smith had just retired, but the men from Sg Buloh had become indispensable. They did all the toughest jobs, moving heavy loads, felling trees, clearing land, and looking after the plant nursery.

In the process they earned the respect of their co-workers. Those not employed by the institute were encouraged by the hospital to take up the growing of ornamental plants, to sell by the roadside in front of their houses.

Slowly overcoming their fears, people in KL began to go to Sg Buloh to buy plants, because such plants were cheap compared with elsewhere. In the 1970s, the hospital organised a garden show, in which Lam Peng Sam and I were the judges.

My nurseryman at FRIM was Mat Isa bin Bulat. He died a few months ago, by then a highly successful businessman and living in a big bungalow in Sg Buloh. As a youth in Langkawi, Mat Isa's world crashed when he was diagnosed with leprosy. Sent to Sg Buloh for treatment, he was one of those selected to work in FRIM. I was at that time making an encyclopaedic survey of fruits, seeds and seedlings of forest trees.

This work would eventually be published in two thick volumes and become the reference textbook for those in the business of raising forest trees. At that time no such business existed.

Mat Isa looked after the hundreds of species of forest trees that I was raising, learning to recognise all the plants and their names. He learnt not only their Malay names but also their scientific names (Greek and Latin to most people) from the labels I attached to the plants. Then one day, he shocked everybody by announcing his resignation to go into business.

Kuala Lumpur was taking up urban greening in a big way and there was a willingness to try new species of trees from the forests. Mat Isa saw his opportunity. He could recognise and name hundreds of species of forest trees by their local as well as their scientific names. He rented land from his neighbours to set up nurseries in Sg Buloh, and was able to supply the growing demand.

I did not know how he was progressing until some years later when he overtook me on the on road to FRIM and waved cheerily. He was driving a Mercedes while was I driving my Datsun.

On another day, while having a drink with him in a kopitiam he told me how he had just lost a large sum of money. It was stolen from his car when he had stopped for lunch after withdrawing the money to pay salaries. It was something like RM 20,000. Did you report to the police?' He merely shrugged and said “what's the point”. I guess when one has been through what Mat Isa has been through, the loss of RM 20,000 is not such a big disaster.

Over the years, Sg Buloh has become the centre of a highly innovative network of self-made men and women engaged in the horticultural business in Malaysia. This network keeps thousands of people employed, not only in Sg Buloh but also in feeder nurseries outside KL, and as far as Cameron Highlands and Muar. New flower varieties are usually first offered in Sg Buloh before they appear elsewhere.

From its original hub at the hospital area, flower nurseries have been established in the surrounding area. Sg Buloh provides a good example of how the best commercial or industrial hubs come into existence organically' through time. It requires the interaction of many individuals, in unique ways, in some unique place.

Such a hub can be easily destroyed but not easily duplicated elsewhere. As an example of how planned hubs can fall short, we have the so-called green lane' on the road from the Sg Buloh junction to the Rubber Research Institute. All along one side of the road, the land has been divided and let out to nurseries, but such nurseries are strung out for several miles, and the road has become a noisy, busy highway.

It is unpleasant to walk from one nursery to the next and dangerous to park and re-park on the roadside. It is also impossible to turn back. At the historic hospital hub, one can visit a large number of different nurseries within a small area, in peace and quiet. Now that leprosy and been beaten and its hospital relegated to history, the horticultural hub and its historical buildings, especially the one-room duplex houses, survives as a reminder of a huge human tragedy overcome by human determination. The Malaysian horticulture industry will suffer a serious setback if its Sg Buloh hub is lost.

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

Malaysia-Singapore joint venture a win-win enterprise

The involvement of the Malaysian and Singaporean governments in the development of real estate in Johor and Singapore is significant in more ways than one. It is not only a move that harnesses the benefits to be reaped from real estate development in both countries; there is also the political side of it, besides the social aspect.

The following may not be the best analogy, but it does sum up the relationship between the two countries. Imagine two lads from different countries, with no political, historical and economic baggage, coming together to build sand castles on the beach. It could be a beach in Singapore or Johor.

There is healthy competition and both lads benefit from their time together. You watch how I build, and I watch how you embellish your sand castles. Who will build the most impressive sand castles? Who gets to use the spade and pail first, if there is only one spade and one pail? These are little things, but sometimes little things can blow up to big ones and friendships are lost in the process.

Iskandar Malaysia, Marina South and Ophir-Rochor are the beach. Iskandar, by itself, already has a lot of superlatives. It is the first of several economic zones being promoted by the Government and so far, it has been the most successful, although it did not have an effervescent start in 2006. At 2,217 sq km, it is three times the size of Singapore. It is Khazanah Nasional's largest property investment.

This joint venture (JV) between the two governments will make this RM30bil real estate development one of the biggest in Malaysian real estate. Khazanah, incorporated in 1993, has investments in banking, steel, power, infrastructure, real estate, telecommunicaitons, healthcare and port development. The guardians of Iskandar Malaysia could not be more illustrious. The Prime Minister and the Johor Mentri Besar are co-chairmen, and they are advised by the Iskandar Development Regional Authority (Irda).

Established in 2007, Irda is the agency that regulates, plans, promotes and strategises Iskandar Malaysia's growth. The corporate motor that drives it is Khazanah, whose managing director, Tan Sri Azman Mokhtar, sits on the Irda board. There are two other GLCs involved in Iskandar, Iskandar Investment Bhd (IIB) and Danga Bay Sdn Bhd.

Let's go across the causeway. The personalities behind Temasek is no other than Ho Ching, who is executive director and CEO. She is also the wife of Singapore premier Lee Hsien Loong. At one time, Ho Ching was ranked third among the world's 100 most powerful women. Incorporated in 1974, Temasek Holdings is an Asia investment company headquartered in Singapore. Temasek owns a diversified S$186bil portfolio as at March 31, 2010, concentrated principally in Singapore and the emerging economies.

Temasek's investment covers a broad spectrum of industries: financial services, telecommunications, media and technology, transportation and industrials, life sciences, consumer and real estate, and energy and resources. Personalities aside, Singapore is one of the most vibrant economies in South-East Asia and our closest neighbour geographically. Our political and social ties go back a long way. In terms of infrastructure, financial services, logistics, the city state is far ahead.

In terms of real estate, its properties command a higher value than Malaysia's on a per sq ft basis. Residential developments in district 9 and 10, considered as prime areas around Orchard, are priced between S$2,000 and S$3,000 per sq ft. In less prime areas, it is about S$1,200 per sq ft. Our KLCC condominium prices have not come up close to that range; it is instead very project specific, from RM1,000 to RM1,800 per sq ft. Average prices for high-end condminium development in Johor Baru is about RM500 per sq ft.

In the rental market, while the occupation cost (gross rental rate) for prime office space in KL City Centre range between RM6 and RM8 per sq ft (psf), the cost in Singapore range between RM25 and RM30 psf.

In Johor Baru, where most of the buildings are more than 10 years old, the current rental rate range from RM1.40 psf to RM3 psf. The low rental market in Johor Baru is hardly surprising as it is mainly domestic-demand driven.

Valuers are indignant when asked to compare Johor Baru prices with the city state. It is not possible to compare the two. With property prices having escalated so much in Singapore, Iskandar offers an alternative.

When the Iskandar idea was first mooted, the target audience were Singaporean investors. The city state's presence, in the form of Temasek and its portfolio companies like CapitaLand and Mapletree will lend credence and confidence to Singaporean investors, both large and small.

Assistant news editor Thean Lee Cheng hopes this JV will be another oppportunity to cement ties.

By The Star (by Thean Lee Cheng)

Magna Prima plans project in Australia

KUALA LUMPUR: Magna Prima Bhd will embark on its maiden overseas venture in Melbourne, Australia, with a proposed A$210mil development, Dynasty Living.

The company said in a statement the 25-storey, single-tower apartment project would be built on a 2,700 sq m site. It will feature 320 units, inclusive of one to three-bedroom apartments, and a two-storey penthouse.

Construction is expected to commence in the fourth quarter and the development is expected to be completed in 2013.

By Bernama

Last-minute bid blocks SunREIT from Putra Place


Kuala Lumpur: An eleventh hour court ruling yesterday barred Sunway Real Estate Investment Trust Bhd (SunREIT) from taking possession of the Putra Place located opposite Putra World Trade Centre.

The Court of Appeal yesterday granted a stay of execution on an order made by the High Court on June 28 2011 which declared SunREIT as the true owner of Putra Place. SunREIT was to move into the premises and take possession and control within 72 hours or at noon yesterday.

OSK Trustees Bhd, acting on behalf of SunREIT, had on March 30 2011 bid and won the building that had been put up for auction.

The Putra Place, which houses The Mall, an office complex, and the Legend Hotel, was auctioned off by Commerce International Merchant Bankers Bhd to recover loans given to property owner Metroplex Holdings Sdn Bhd.

Metroplex is claiming that SunREIT is not the registered owner and wants to nullify the public auction.

Following the High Court decision in favour of SunREIT, the previous owner filed a notice of appeal.

SunREIT, as the registered owner, moved into the mall and set up a management office in a vacant lot.

But it could not move into the hotel until it obtained a licence to operate the hotel. Its hotel licence was effective from yesterday.

Yesterday morning, Metroplex went to the Court of Appeal to seek a stay of the execution order granted by the lower court pending its appeal to the Court of Appeal and a July 7th date was fixed for hearing. But shortly after, SunREIT solicitors were told the matter would be heard at 4pm.

Meanwhile, SunREIT was allowed to enforce the order with the assistance of the police in case Metroplex failed to hand over the control and management of the property. Some 30-odd police personnel were at Putra Place yesterday.

At around 11.40am, some 15 Sunway management team were briefed on what the next course of action would be, including the process of entering into the hotel premises.

At around 12.20pm, reporters were informed that Metroplex's request for a stay would be heard at 4pm. Pending the decision, the management decided not to take possession of the building.

A Sunway Hotel van carrying support staff for the hotel were told to turn back. They returned later in the evening and were identified as operations personnel. This group was briefed and was on standby should there be any hotel employees (under the Legend hotel management) walking out.

The hotel had to run smoothly to avoid disruption to guests staying at the hotel. SunREIT solicitors will try and expedite the hearing of the appeal at the Court of Appeal.

By Business Times

Friday, July 1, 2011

Mah Sing banking on govt to hit RM5b target

KUALA LUMPUR: Property developer Mah Sing Group Bhd is eyeing government-related projects to help achieve its aim of RM5 billion in market capitalisation in five years.

With its track record and healthy financial standing, the company is optimistic of being able to work with the government especially in the 1,200 hectares of Rubber Research Institute Malaysia land in Sungai Buloh and the old Sungai Besi airport land, which is slated to be transformed into Bandar Malaysia.



Mah Sing's current market value stands at RM2.2 billion, having expanded tenfold from just RM189 million in 2005.

"Being a healthy company with a good track record and strong financial position, we believe the group definitely stands a good chance in these projects," managing director Tan Sri Leong Hoy Kum said after its annual general meeting yesterday.

"Mah Sing is very keen to participate in these projects via joint venture or land acquisition," he added.

To date, the group has 34 ongoing projects in the Klang Valley, Penang and Johor Baru, which yield a combined remaining gross development value and unbilled sales of RM14 billion between five and seven years.

Halfway into year 2011, the group has already achieved close to 60 per cent of this year's sales target of RM1.15 billion.

Mah Sing reported a higher net profit at RM41.2 million from RM28 million before for the first quarter ended March 31 2011. Revenue was 31 per cent higher at RM311.8 million.

Its shares closed 1 sen higher yesterday to RM2.61 with a volume of 393,700 shares.

Research firm Macquarie Equities Research has forecast that Mah Sing's earnings will grow at a compounded annual rate of 54 per cent for the financial years 2011 until 2013.

Meanwhile, Leong expects the positive sentiment in the property market to continue, riding on the favourable employment conditions and stable economic growth.

"It is a good time to buy properties now in view of the rising construction cost environment as buyers can lock in current property prices and enjoy borrowing rates, which are still very reasonable," he said.

Other factors that will help to drive the property sector include high impact projects like the MRT (mass rapid transit), young population base, high saving rates and affordable homes.

By Business Times

Mah Sing continues expanding

KUALA LUMPUR: Mah Sing Group Bhd will continue to acquire prime land and enter into joint ventures in future, to further boost its expansion strategy.

Managing director Tan Sri Leong Hoy Kum said the group was keen on both privately held and government land that could be developed as it had the track record, experience, branding and financial capacity to unlock and enhance the value.

“This year should be another good year, particularly for developers with a knack for creative product development and market strategies, among others.

“The mid to high-end residential segment in well-established locations should continue to thrive together with the mass housing market, echoing the Government's call to provide affordable housing,” he told reporters after Mah Sing's AGM here yesterday.

To date, the group has a total of 34 projects, all in Greater KL (Kuala Lumpur and Klang Valley), Penang and Johor Bharu, which yield a combined remaining gross development value (GDV) and unbilled sales of approximately RM14bil to last for five to seven years.

Leong also expected the positive sentiment for the property market to continue, riding on the favourable employment conditions and stable economic growth.

“It is a good time to buy properties now in view of the rising construction cost environment as buyers can lock in current property prices and enjoy borrowing rates, which are still very reasonable.

“Buyers should consider the developer's track record in terms of product delivery, quality, service and potential upside of the property,” he said.

He added that the group would maintain its focus on the local property market for its expansion plan.

For the first quarter ended March 31, Mah Sing reported a net profit and revenue of RM41.2mil and RM311.8mil respectively.

“We surpassed our shareholders' expectations last year and are working hard on achieving another good year in 2011 with more launches coming up in the second half,” Leong said.

Macquarie Equities Research, the latest research firm to have initiated coverage of the group, had forecast Mah Sing' earnings to grow at a compound annual growth rate of 54% over financial years 2011-2013.

In order to provide continuous value enhancement to shareholders, the group was aiming for a RM5bil market capitalisation within five years, from its present RM2.2bil.

By Bernama

Aussie apartment boost


The Australian apartment market is bucking a softening trend of the overall housing market, especially in Sydney.

Tighter Asian property rules lifting aparment market, especially Sydney

SYDNEY: Tighter government regulations introduced by some Asian countries to cool sizzling house prices are contributing to higher demand for new apartments in Australia, property services firm CB Richard Ellis said.

The Australian apartment market is bucking a softening trend of the overall housing market, especially in Sydney.

Capital growth for Sydney apartment units rose 3% in the year to May, while houses eked out only a 0.1% gain, according to research firm PRData-Rismark.

“The government tightening measures broadly across Asia are increasing the amount of interest in Australian properties,” Darien Bradshaw, executive director for CBRE's international project marketing in Asia, told Reuters yesterday.

Last year, Singapore introduced a new rule to cool property prices under which owners of Housing and Development Board (HDB) flats, or government-subsidised apartments, must stay in the property for five years before they can buy a second property.

The Chinese government has also introduced a series of new regulations including a home ownership tax to deter real estate speculation.

“There are limited options for the Chinese with money to invest other than keeping it in cash,” Bradshaw said. “So one of the options is obviously in the current climate is to look more and more overseas.”

He also said young couples who plan to raise more than one child are keen to own houses overseas, adding the targeted price range for Australian assets for Asian investors is anywhere between A$400,000 (US$430,000) and A$1,000,000.

“They've always got on the back of their mind ... where the second child may reside and live and be educated,” he said.

To capture the growing appetite for overseas assets among Asian investors, CBRE is casting wide.

Its sales teams in Hong Kong, Singapore, Kuala Lumpur and Shanghai, conducted a synchronised launch over a series of weekends to market a high-rise residential project in Chatswood, Sydney, called Metro Residences.

The efforts paid off with all 292 units offered in the first phase sold out in the first weekend in March.

Some Australian developers are positioning themselves for the Asian market.

Private property developer Meriton Group, headed by Australian billionaire Harry Triguboff, said it would develop in excess of 1,500 apartments in the next 12 months, compared with 1,000 units in the last year as demand from Chinese investors keeps growing.

“Chinese mainland residents have shown strong interest in our residential apartments with demand increasing every week,” James Sialepis, Meriton's national sales and marketing manager, said via an email.

He said 15% of Meriton's weekly sales were made to overseas Chinese, although the percentage was much higher if they include local Chinese buyers.

“Locations within a 15 km radius of the CBD that are serviced by good transport and educational facilities are in most demand,” he said.

By Reuters

SunREIT to double value of Putra Place

PETALING JAYA: Sunway Real Estate Investment Trust Bhd (SunREIT) expects to almost double the value of The Putra Place following an asset enhancement.

The Putra Place, to be renamed Sunway Putra Place, was bought via auction by OSK Trustee Bhd for RM513.95 million.

Sunway Reit Management Sdn Bhd's chief executive officer Datuk Jeffrey Ng said the value of the property could be RM1 billion as a result of a capital expenditure of between RM100 million to RM200 million to enhance the property.

"There will be additional retail space. After enhancement, the rental and occupancy rates will be more, in line with the market," Ng said.

Knight Frank had valued the property at RM576 million.

The Legend Hotel, that will be renamed Sunway Putra Hotel, enjoys an average occupancy of 60 per cent. The Mall, which will carry the name Sunway Putra Mall, has an occupancy rate of 80 per cent.

The office, that will be renamed Sunway Putra Tower is fully occupied.

Founder and chairman of Sunway Group Tan Sri Dr Jeffrey Cheah said it plans to bring back the glory that the property once had by upgrading the place to the standards associated with Bandar Sunway.

It could take anything between six months to a year to plan the upgrade and rebranding of the building.

Cheah was speaking at a briefing yesterday to clarify and explain the status of ownership of the Putra Place.

The Putra Place, which houses The Mall, an office complex, and the Legend Hotel, was auctioned off by Commerce International Merchant Bankers Bhd (CIMB) to recover loans given to property owner Metroplex Holdings Sdn Bhd.

OSK Trustees won the bid at the fourth auction held since April 2008.

Since then, there have been several parties including Metroplex which have initiated legal proceedings to block the sale.

However, on Tuesday, the High Court ruled in favour of SunREIT, stating that it is the true owner of the property and gave Metroplex 72 hours to deliver possession and control of the asset.

This means, that by noon today, SunREIT will move in as the new owner.

Nevertheless, it is understood that Metroplex has filed a notice of appeal.

Meanwhile, Cheah said he does not know the ex-owners of the building and it is merely a commercial deal. He doesn't have a personal agenda.

By Business Times

Thursday, June 30, 2011

Mah Sing to continue land acquisitions, JVs

Property developer, Mah Sing Group Bhd, will continue to acquire prime land and enter into joint ventures in future, to further boost its expansion strategy.

Managing Director, Tan Sri Leong Hoy Kum said the group is keen on both privately held and government land, that could be developed, as it had the track record, experience, branding and financial capacity to unlock and enhance the value.

"This year should be another good year, particularly for developers, with a knack for creative product development and market strategies, among others.

"The mid to high-end residential segment in well established locations should continue to thrive together with the mass housing market, echoing the government's call to provide affordable housing," he told reporters after Mah Sing's Annual General Meeting here, today.

To date, the group has a total of 34 projects in Greater KL (Kuala Lumpur and Klang Valley), Penang and Johor Bharu, which yield a combined remaining gross development value (GDV) and unbilled sales of approximately RM14 billion to last for five to seven years.

Leong also expects the positive sentiment for the property market to continue, riding on the favorable employment conditions and stable economic growth.

"It is a good time to buy properties now, in view of the rising construction cost environment as buyers can lock in current property prices and enjoy borrowing rates, which are still very reasonable.

"Buyers should consider the developer’s track record, in terms of product delivery, quality, service and potential upside of the property," he said, adding, the group will maintain its focus on the local property market for its expansion plan.

For the first quarter ended March 31, 2011, Mah Sing reported a net profit and revenue of RM41.2 million and RM311.8 million respectively.

"We surpassed our shareholders' expectations last year and are working hard on achieving another good year in 2011 with more launches coming up in the second half," Leong said.

Macquarie Equities Research, the latest research firm to have initiated coverage of the group, has forecast Mah Sing' earnings to grow at a compound annual growth rate (CAGR) of 54 per cent over financial years 2011-2013.

In order to provide continuous value enhancement to shareholders, the group is aiming for a RM5 billion market capitalisation within five years, from its present RM2.2 billion.

By Bernama

Merge Housing to go private

PETALING JAYA: Property developer Merge Housing Bhd's chief and his two brothers are looking to take the company private, by offering to buy up all remaining shares not owned by them, or some 69.2 million shares, for RM45mil.



In a Bursa Malaysia announcement yesterday, Merge Housing's managing director Lee Kuang Chong and his two brothers, Lee Fatt Chong and Lee Heng Choong, proposed to undertake a conditional take-over offer to buy all the remaining shares of RM1 each in Merge Housing (net of treasury shares) not owned by them for 65 sen per share.

The brothers collectively hold 75.83 million shares in the company, or representing 52.37% of the issued and paid-up capital of Merge Housing (excluding 5.21 million treasury shares). Lee Kuang Chong holds a direct equity interest of 30.11%, Lee Fatt Chong has a 17.36% stake and Lee Heng Choong's holding is 4.9% in Merge Housing.

The offer price represented a premium of 5.5 sen or 9.24% above the closing price of Merge Housing shares on Tuesday of 59.5 sen, being the last trading day prior to the date of this notice.

The announcement said that the offer price was arrived at after taking into consideration a premium of 9.8 sen or 17.75% above the five-day volume weighted average market share price (VWAP) of Merge Housing shares up to and including June 28, of 55.2 sen and a premium of 10.4 sen or 19.05% above the one-month VWAP up to and including June 28 of 54.6 sen.

The consideration for the offer will be satisfied in cash and should the company declare or pay any dividend and/or other distributions on or after the date of the announcement but prior to the close of the offer, shareholders were entitled to retain the dividend and/or distributions.

However, the consideration for each offer share shall be reduced by the quantum of the net dividend and/or distribution per Merger Housing share.

No rationale was provided for the privatisation exercise.

Based on the company's annual report 2010, a net profit of RM1.13mil was posted against a revenue of RM92.6mil for the financial year ended May 31 2010. Meanwhile, it made a net loss of RM24.6mil against a revenue of RM83.6mil for the financial year ended May 31 2009.

According to the group's website, its major land bank is located in Subang 2, Mon't Kiara, Puchong/Old Klang Road as well as Bukit Jelutong. Although it initially catered to the mass low to medium cost market, the group has now shifted into landed properties and higher end properties.

By The Star

Keep politics off affordable housing schemes

It would appear that demand for super high-end homes is showing absolutely no sign of abating. YTL Land & Development issued a press release that its Grove at Lake Fields project in Sungai Besi, from a starting price of RM1.8mil, has been snapped up by eager buyers ahead of its launch.

Maybe its the name of the developer that led to a such a reception towards its project.

YTL has certainly created a reputation for itself in the property market with buyers appreciating the quality of the houses it builds.

But its that kind of mismatch that has created somewhat an imbalance in the supply of property especially in the major markets natiowide like Kuala Lumpur.

With economic activity chugging away and jobs still being created, more so when economic programmes by the Government start to see more investment and employment being created throughout the country, demand for housing in the hot markets will be on the rise.

Unfortunately, most of the homes being launched are beyond the reach of many Malaysians, especially those who are early in their careers, and the gap is set to widen as a larger percentage of Malaysians enter the age of employment year after year.

Given the penchant for developers to reap as much profit from their landbank, the vast majority of Malaysians will be priced out and just cannot afford to shell out that kind of money to buy a house, regardless of how big or how good the developer is, and at the same time keep up with the escalating cost of living.

It therefore comes to no one's surprise that the Government is now looking to step in and fulfil that demand gap by coming up with two affordable housing schemes ranging between RM100,000 and RM300,000 for Malaysians who do not yet own a home.

Both those schemes which will cater for households earning under RM3,000 a month and RM6,000 a month, which together would form the bulk of Malaysians today.

It was revealed that a portion of the redevelopment of the old Sungai Besi airport development which is called Bandar Malaysia would be carved out to build affordable homes for Malaysians.

Similar projects are being hatched in other areas where the Government owns land and eventually, such schemes would require the support of all parties including state governments as more projects are built throughout the country.

But the building of affordable home should not be subject to partisan politics. The last thing people would want is politicians trying to gain mileage at the expense of people's welfare.

It is also worth watching the impact of new public affordable housing on the price of comparably priced houses currently in the secondary market, which is there but not in the choice locations.

Deputy news editor Jagdev Singh Sidhu misses eating tasty food that is bad for your body.

By The Star (by Jagdev Singh Sidhu)

Wednesday, June 29, 2011

UEM Land to leverage on Sunrise expertise and S’pore infrastructure


Good linkage: The future development’s proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible. — AFP

PETALING JAYA: The coming together of Khazanah Nasional Bhd and Temasek Holdings to develop RM30bil worth of real estate projects in Singapore and Iskandar Malaysia will help UEM Land Holdings Bhd make a great leap forward, both financially and in terms of branding, say analysts.

The tie-up also puts into focus why UEM Land launched an RM1.4bil takeover of property developer Sunrise Bhd, which was completed early this year.

“We believe UEM Land will be able to leverage on Sunrise's expertise in lifestyle integrated developments to take on the proposed developments. As such, Sunrise will be taking the lead on behalf of UEM Land in undertaking these development projects,” said an OSK Research report.

UEM is among the top landowners in Iskandar Malaysia, with 1,300 acres of development land in the southern economic corridor. Among the several economic corridors spearheaded by the Government, Iskandar Malaysia remains the most upbeat and vibrant. In many ways, according to analysts, the alliance of the two government investment holding companies is expected to be a win-win proposition for both sides.

As a result of the Khazanah-Temasek joint venture (JV), UEM Land, together with Mapletree Investments Pte Ltd, have been appointed to oversee the marketing and development of four parcels of land at Marina South in Singapore.

UEM Land is the property arm of Khazanah, while Mapletree Investments is one of Temasek's two real estate portfolio companies. The other Temasek property company is CapitaLand group.

The planned mixed-use development on the 2.62ha white site at Marina South would comprise two office towers with ancillary retail and two blocks of residential towers with a combined gross floor area (GFA) of 341,000 sq m, a statement from the Mapletree website said.

Located on adjoining sites behind the Marina Bay Financial Centre in the new financial and business cluster of Downtown Marina Bay, the development will be positioned between the proposed linear park and a major public open space above the Marina Bay MRT station. Its proximity to the Marina Bay and future Downtown MRT stations will ensure that it is well served and easily accessible.

Construction works are expected to commence in June 2012 with completion estimated in mid-2016.

At the same time, UEM Land will work with CapitaLand to oversee the Ophir-Rochor project in Singapore, located between the Kampong Glam Historic District and the Beach Road Conservation Area, in a new growth area envisioned to become a 24/7 mixed-use cluster. Like the Marina South parcels, the Ophir-Rochor parcels also have excellent connectivity.

By virtue of having Khazanah as an ultimate controlling shareholder, UEM Land (as with both Mapletree and CapitaLand in relation to Temasek) will be playing a huge role in this JV.

Sunrise, with its expertise and tangible portfolio of high-rise and high-end condominium in Mont'Kiara, will also have a huge role to play.

Hong Leong Research said: “UEM Land's business model is primarily a two-pronged strategy of developing townships and niche projects townships for stable income, complemented by niche projects to achieve enchanced growth and market branding. The bulk of its land is in Johor.”

With Khazanah's JV, UEM Land's opportunities have now broadened to include Singapore, where real estate is hot.

A UEM source said the success of Iskandar Malaysia is due to its proximity with the city state and its tremendous infrastructure, both economically and physically. Besides being a service and financial hub, it has an integrated transport system and other infrastructures like no other in South-East Asia.

“We are leveraging on Singapore's tremendous connectivity. When we sell Iskandar, potential investors always ask how many flights do we have in Iskandar Malaysia out to London? We ask them in return how many flights do you want?

“The issue is not how many flights our domestic airport in Johor has, but how many flights does Changi Airport have? That is how close geographically we are to Singapore. Multiply that with the whole range of services that Singapore offers and you have the big picture. When we sell Iskandar, we are not just selling Johor; we are selling Johor and Singapore,” said the source.

By The Star

'Sunrise buy a boost for Nusajaya township'

UEM Land Holdings Bhd's acquisition of Sunrise Bhd will further enhance the success of its flagship Nusajaya township, HwangDBS Vickers Research says.

In its Company Focus today, the research house said the recent acquisition would allow UEM Land to leverage on Sunrise's strong brandname and track record in high-end high-density residential and commercial developments.

"Sunrise will provide UEM Land with near-term earnings from more mature Klang Valley area to complement greenfield Nusajaya's long-term growth potential, and diversify its earnings base," it said.

It said UEM Land was currently trading at a 25 per cent discount to its realisable net asset value (RNAV) compared with big-capitalised developers' average of 18 per cent.

This discount should narrow down with improved earnings visibility and lower execution risk following the Sunrise acquisition and the company's possible inclusion in the KLCI FBM-30, it said.

"We applied a conservative 10 per cent discount to RNAV to derive a RM3.45 target price for UEM Land compared with five per cent premium to RNAV for sector leader SP Setia Bhd," HwangDBS said.

By Bernama

E&O in joint venture to develop wellness township in Johor

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is partnering the state investment arms of Malaysia and Singapore to develop an 84ha mixed development dubbed as a wellness township in Nusajaya, Johor.

E&O'sunit Galaxy Prestige Sdn Bhd has set up an equal joint venture company, known as Nuri Merdu Sdn Bhd, with Pulau Indah Ventures Sdn Bhd.

Pulau Indah is a 50:50 venture between Khazanah Nasional Bhd and Temasek Holdings.

Nuri Merdu will build, amongst others, terrace and semi-detached houses, bungalows, serviced apartments and condominiums, wellness centre(s), and retail and commercial properties, E&O said in a statement yesterday.

The project is E&O's first project in Johor. The land is located 15 minutes from the Tuas Second Link to Singapore.

It is also located in Medini, one of five flagship zones in Iskandar Malaysia. Medini would have office buildings, malls, hotels and residential units.

However, the project is subject to a revised master development plan. "The proposal is in line with E&O Group's continuous effort in sourcing new landbank and property development opportunities to boost and sustain its earnings growth," it said.

By Business Times

E&O and Pulau Indah in JV to build Nusajaya township

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has entered into a shareholders' agreement with Pulau Indah Ventures Sdn Bhd to develop a wellness township Nusajaya.

Nusajaya is a flagship zone of Iskandar Malaysia.

E&O (via wholly-owned subsidiary Galaxy Prestige Sdn Bhd) and Pulau Indah have agreed to establish a 50:50 joint venture (JV) company named Nuri Merdu Sdn Bhd.

Pulau Indah is a 50:50 JV between Khazanah Nasional Bhd and Temasek Holdings.

This will be E&O's maiden foray into Johor.

The 210-acre freehold land for the proposed development is 15 minutes away from the Tuas Second Link to Singapore, and is owned by Iskandar Investment Bhd, a 60% subsidiary of Khazanah.

By The Star

E&O jumps on township project in Johor

Eastern & Oriental Bhd, a Malaysian property group, rose the most in two weeks after forming a joint venture with Khazanah Nasional Bhd and Temasek Holdings Pte LTd to develop a “wellness” township project in the southern Johor state.

The stock climbed 3.9 per cent to RM1.62 at 9:07 a.m. local time in Kuala Lumpur trading, set for its biggest gain since June 15.

By Bloomberg

The new wave tipping point for Iskandar?

KUALA LUMPUR: It was the most obvious missing piece in the jigsaw puzzle for Iskandar Malaysia.

For about five years, the country's biggest special economic zone was waiting for its closest neighbour to come as an investor. This was only logical since Iskandar is right next door to the island-republic and it was also touted as a cheaper alternative for Singapore companies.

But only Raffles Education Corp Ltd produced Singapore's biggest investment, with plans to build the RM200 million Raffles University Iskandar.

This is set to change. Analysts think the tipping point is the tie-up between Khazanah Nasional Bhd and Temasek Holdings Pte Ltd.

They plan to build RM3 billion worth of properties in Iskandar through their partnership called Pulau Indah Ventures Sdn Bhd.

The project shows the confidence from Singapore, which would lead to more investments from the country and other global investors, said HwangDBS Vickers Research analyst Yee Mei Hui.

"Temasek is very selective with investments. Their interest in Iskandar Malaysia indicates their confidence in the development so we can expect a new wave of investments, boosting land and property prices in the region," she told Business Times.

The two sovereign wealth funds on Monday said they will jointly develop houses, retail space and wellness-related offerings in Iskandar Malaysia.

They will also build hotels, apartments, offices and shops worth RM27 billion in downtown Singapore.

"Iskandar Malaysia may attract major property developers such as CapitaLand and Wing Tai Holdings Ltd," said an analyst with OSK Research.

Three times the size of Singapore, Iskandar Malaysia spans 2,217 sq km and is a mixed-use development planned for completion in 2025.

Launched in 2006, the expected investment of US$110 billion (RM375 billion) is split between an initial start-up of US$13 billion from 2006-2010 and US$97 billion (RM331 billion) from 2011-2025.

Although neighbouring Singapore, the bulk of investments into the region has come from Europe, the Middle East and Japan with focus on manufacturing, property and tourism projects.

The biggest investments are from Acerinox SA of Spain and Japan's Nisshin Steel, which have committed RM5 billion in investments to build a stainless steel plant.

From the Middle East, Mubadala, Millenium, Kuwait Finance House and Aldar have committed US$1.2 billion (RM4.27 billion) to develop properties in Medini in Nusajaya.

Ongoing projects in Medini include the development of Legoland Malaysia by Merlin Entertainment for US$200 million (RM726 million).

The UK's Newcastle University of Medicine is setting up a branch campus for US$100 million (RM363 million) in EduCity.

So far, the Khazanah-Temasek tie-up has produced one quick win.

Yesterday, Eastern & Oriental Bhd announced plans to partner Pulau Indah and develop a wellness township over a 84ha site.

By Business Times

GSB, Projects Start to build commercial lot

GSB Group Bhd today announced that its wholly-owned subsidiary, GSB Summit Development Sdn Bhd had entered into a joint venture agreement with Projects Start Sdn Bhd to develop commercial properties on freehold land in the Kelana Jaya township.

The joint venture project is expected to be completed within four years," the company said in a filing to Bursa Malaysia today.

The proposed joint venture is in line with one of GSB’s principal activities in the business of property development and will enable the company to develop a prime parcel of land in Kelana Jaya.

By Bernama

40 Talam housing projects categorised 'sick'

The National Housing Department has categorised 40 housing projects under Talam Corp Bhd and the Ukay Bistari project by Intelbest Corp Sdn Bhd as "sick projects".

In a statement today, the Housing and Local Government Ministry said the projects had been identified having problems since 2006.

To date, some projects under Talam and Intelbest Corp still failed to be completed although the date for completion in the sale and purchase agreement had passed, it said.

It said that based on reports and investigations carried out, the delay to complete the projects were due to management and financial problems faced by the developers.

"The ministry, through the National Housing Department, will constantly monitor licensed development projects in line with the Housing Development (Control and Licensing) Act 1966," it said.

By Bernama

TSR arm buys land in PD

TSR Capital Bhd’s unit TSR Ocean Park Sdn Bhd has entered into three sale and purchase agreements with Best Reap Sdn Bhd to buy 19.2 ha of land in Port Dickson, Negri Sembilan for RM36.8 million and develop a mixed development project.

In a filing to Bursa Malaysia yesterday, TSR said the proposed acquisition is in line with its expansion plans in Negri Sembilan and to increase its land bank to generate long-term sustainable income.

By Business Times