Hot grabs outside Klang Valley

PETALING JAYA: Major property developers have been snapping up large plots of land worth well over a billion ringgit, even as the global economic scene turned more cloudy. And it is interesting to note that these acquisitions are mainly located outside the country’s largest property market, the Klang Valley.

Mah Sing Group Bhd, Hua Yang Bhd, S P Setia Bhd, Dijaya Corp Bhd, Berjaya Land Bhd and Eksons Corp Bhd are among the noted property developers that have this month announced acquisitions of land for future development projects. According to tabulations of a selection of notable deals by The Edge Financial Daily, five major developers alone have spent some RM1.07 billion to buy 1,502 acres (600.8ha) of land in the past few months (see table on Page 8).

Factors such as scarcity of land in mature markets like Kuala Lumpur and Petaling Jaya, which has led to high asking prices, as well as future economic developments in other regions may have prompted the buying spree. Johor appears to be the new property hot spot now, judging by the rush of developers there.

Analysts said the change of perception towards the southern state was triggered by the rejuvenation of Iskandar Malaysia. They noted that since UEM Land Holdings Bhd’s acquisition of Sunrise Bhd, there has been a more proactive development committee team spearheading the development of Iskandar. Sentiment has also been boosted by warming bilateral ties between Malaysia and Singapore, and maiden investments by Temasek Holdings is seen coming to Iskandar.

In Johor, Mah Sing acquired 83ha (205.7 acres) of prime freehold land in Tanjung Kupang for RM54.7 million in April, or RM6.10 psf, while Hua Yang purchased two prime parcels of land in Johor Bahru measuring 0.8ha for RM10.7 million, or RM117 psf.

Mah Sing’s land is located within the Iskandar Development Region, some 1 km from the Port of Tanjung Pelepas and 23 km to Jurong Industrial Estate in Singapore. It is proposing to develop the land into an integrated industrial and business park named Mah Sing i-Parc, with an estimated gross development value (GDV) of RM610 million.

Last week, Dijaya acquired 92ha of freehold land in Plentong for RM220 million, or RM22.25 psf, in its bid to strengthen its presence in the Iskandar Malaysia development region. The company is building a mixed development named Tropicana Danga Cove with a GDV of RM2.8 billion. Construction of the project will start this year, together with another project called Tropicana Danga Bay, a high-end integrated property development with a GDV of RM3.8 billion.

According to group CEO Tan Sri Danny Tan Chee Sing, Dijaya will be launching more quality properties in the region to ride on its proximity to Singapore. He said Iskandar Malaysia will drive up demand for properties in the region as more investments will be pouring in, especially from neighbouring Singapore. The rising cost of doing business in the island republic has prompted many of its small- and medium-sized enterprises to relocate to Johor due to its proximity to home and lower costs, according to a recent research.

Hua Yang said its Johor Bahru acquisition is in line with its business expansion plan to make the southern region a key revenue contributor to the group. The move is also in line with its vision to become a nationwide community developer providing affordable homes throughout the country.

The land parcels that it recently acquired are located in Jalan Abdul Samad in the Johor Bahru city centre and only 3.5 km from the new Customs, Inspection and Quarantine Complex. The land will be developed into a residential project comprising serviced apartments to cater for professionals working in Johor Bahru and Singapore, with an estimated GDV of RM120 million.

So will the property markets in prime areas such as Kuala Lumpur, Petaling Jaya and Penang island disappear from the property developers’ radar?

Not quite, but with limited large tracts of prime land, developers have been focusing on niche, higher-end projects.

In the heart of downtown Kuala Lumpur, Mah Sing will develop a 1.7ha parcel at the former Tunku Abdul Rahman flats, better known as the Pekeliling Flats, in Jalan Tun Razak, in a joint venture with privately-held Asie Sdn Bhd and Usaha Nusantara Sdn Bhd. The project, tentatively called M Sentral, is estimated to have a GDV of RM9 billion. Mah Sing acquired the land for RM600 psf, and will look to jointly develop the rest of the former Pekeliling Flats land, which measures 58 acres.

Hua Yang also has several projects in the pipeline in Kuala Lumpur, especially those under its RM840 million ‘One South’ integrated development located in Sungei Besi, south to the city centre. The project spreads over 16.7 acres and is currently enjoying high take-up rates, with its Phase 1 comprising retail and office units more than 80% sold.

The group has also acquired 1.55 acres of leasehold commercial land in Desa Pandan, which is located near Jalan Tun Razak and the proposed Kuala Lumpur International Financial District (KLIFD). The land was purchased for RM32 million and the group plans to develop it into affordable serviced apartments with pricing in the range of not more than RM400,000, and a GDV of RM160 million.

With limited prime land left in the urban centres, property developers would have to look much further out to build new townships. And that’s where SP Setia went to Hulu Langat, where it hopes to recreate another “Setia Alam” — its successful transformation of a backwater palm oil estate to a thriving township in less than a decade.

SP Setia acquired 409ha of freehold land in Beranang, Hulu Langat, for RM330.1 million, or RM7.50 psf. The oil palm land will be converted into a mixed residential township with an estimated GDV of RM3.5 billion.

Maybank Investment Bank Research said in a report that the property developer is spearheading a new relatively untapped trend of affordable housing development which will provide steady bread-and-butter sales to the group and support its long-term growth. The research house noted that the land could turn out to be another highly successful “Setia Alam” given SP Setia’s track record and expertise in developing townships.

Up north, Penang continues to draw attention.

Confidence in the state was summed up by Berjaya Group tycoon Tan Sri Vincent Tan. He said he was impressed with the level of cleanliness in Penang; the state has done very well economically over the past few years, having attained the highest level of investments in the country last year with RM12.2 billion.

Berjaya Land Bhd acquired 23ha of land in the famed Penang Turf Club area for RM459 million cash, or RM184 psf for a high-end residential property development.

The group said the project, with an estimated GDV of RM1.52 billion, will be a low-density, exclusive gated housing development comprising bungalows, semi-detached units and low-rise condominiums. The development will take five years to complete.

Not only is the Penang island property market red hot now, the same could also be said about the property market on the mainland, Seberang Prai.

Other than Tambun Indah Land Bhd, which has firmly positioned itself on mainland Penang property market after successfully building several notable townships such as Taman Tambun Indah, Juru Heights, Pearl Garden and Pearl Villas, Hua Yang is also making its foray into the market.

According to the group’s chief executive officer Ho Wen Yan, the group is currently scouting for landbanks on mainland Penang as well as in Kota Kinabalu, Sabah. He said that the group is going to raise RM100 million to fund land bank acquisitions in these two key markets.

“Penang is one of the high growth states in terms of economy and population. It is a target market for us to build affordable housing in the state. In Kota Kinabalu, we will look at building high-rise affordable residential property in the urban centres, whereas if it is outside the urban centre, it would be viable for us to build more landed properties,” he said during a press conference after the company’s annual general meeting last Friday.

However, there are concerns over the various property projects in the more mature markets of Kuala Lumpur and Penang island , giving rise to fears that there will be an oversupply of housing.

Penang, for example, has seen a surge in planned projects over the next ten to 15 years worth RM29.6 billion, according to news reports. At the current level of property purchasing in Penang, which is an all time high, it will take 10 to 11 years for the market to absorb such a large number of projects.

Datuk Jerry Chan Fook Sing, the Real Estate and Housing Developers’ Association (Rehda) Penang chairman, had said property launches should be perfectly timed to suit demand so the many projects would not lead to an oversupply in the island’s property market which will dampen prices/yields.

According to Affin Investment Bank property analyst Isaac Chow, there will always be demand in the medium- and low-cost property markets but the high-end residential property market will see slower demand, as buyers have become more selective and prices will be quite “shaky”, especially for high-rise developments.

“The right property in the right location will see an increase in demand and hence price, whereas the wrong property in the wrong location will see lower demand and the price will decrease,” he told The Edge Financial Daily.

He maintained that property prices in Malaysia are still generally affordable as only about 20% to 25% of a buyer’s monthly disposable income is spent on rent or mortgage payments as opposed to buyers in other countries who would have to spend almost 30% of their monthly disposable income on mortgages.

With the recent turbulence in the global financial markets, amid fears of a recession in the US and Europe, developers are still confident in the property market.

“Development is an industry that cannot slow down. Every 10 to 15 years, we have a downturn but we have to weather it and keep going. For us, it will be business as usual,” Dijaya managing director Datuk Tong Kien Onn told The Edge Financial Daily.

By The EDGE Malaysia (Written by Kamarul Azhar)

Opportunities in Indian property sector

KUALA LUMPUR: Malaysians should invest in India's property sector as prices are expected to increase five or six folds in the next five years, said Deputy Minister in the Prime Minister's Department Datuk S.K. Devamany.

“The prices of properties and land in India are reasonable and can't be manipulated. Malaysians should grab this opportunity,” he said when launching the India Property Investment Fair here on Saturday. The two-day event showcases products of various property firms in India.

Devamany said relations between Malaysia and India had grown stronger with the signing of the Comprehensive Economic Cooperation Agreement (CECA) between the two countries. The CECA envisages liberalisation of trade in goods and services, investments and other areas of economic cooperation.

He added that the sister city agreement between Kuala Lumpur and Chennai, and the Little India in Brickfields had also helped strengthen the relations between the two countries.

The pact presents an ideal platform for the two cities to come together in the fields of art, culture, tourism and economy. “This fair will further strengthen the relations between India and Malaysia,” he added.

By Bernama

Hua Yang set to maintain double-digit growth

The One South serviced residences in Seri Kembangan, Selangor.

PROPERTY developer Hua Yang Bhd is on track to complete another remarkable financial year, says its chief executive officer Ho Wen Yan.

“We are on track to achieve our sales target of RM350mil (13% year-on-year increase) for the current financial year. Based on the first quarter results, we should hit more than RM200mil in revenue,” Ho says in an interview.


Ho: We do not buy land that is deemed to be expensive.

For its recently concluded first quarter ended June 30, the group achieved sales of RM164mil.

For its first quarter, Hua Yang posted a 135% year-on-year jump in net profit to RM11.5mil while revenue rose 66% to RM61.8mil due mainly to better sales performance, steady construction progress recognition and the completed sale of a 215,186 sq ft plot to Tesco Stores (Malaysia) Sdn Bhd for RM3.23mil at the group's Bandar Universiti Seri Iskandar township development in Perak.

Hua Yang, which is known for developing residential properties in the affordable segment, posted a 117% year-on-year increase in net profit to RM25.1mil while revenue rose 82% to RM188.9mil for the financial year ended March 31 (FY2011).

It was a record-breaking full year financial performance, which was attributed to better sales achieved, since Hua Yang's listing on the Main Board of Bursa Malaysia on Nov 29, 2002.

For FY2011, the group's earnings per share stood at 23.29 sen (117% higher compared with the last financial year) while sales achieved grew by 123% year-on-year (from RM139.3mil to RM310.2mil).

Affordable properties

Founded in 1978 by Ho's late father Ho Mok Heng, Hua Yang's first project was eight units of four-storey shophouses in Ipoh, Perak valued at RM2.4mil.

To date, the group has completed over 10,000 residential, commercial and industrial properties with a gross development value (GDV) of RM1.2bil in the Klang Valley, Johor, Perak and Negri Sembilan.

In the last five financial years, the group has enjoyed compounded annual growth rate (CAGR) in profit after tax of 24%, revenue CAGR of 24% and earnings per share CAGR of 20.6%.

The group aims to be a leading developer in the affordable property segment with an annual revenue of RM500mil within the next five to seven years.

Ho says the group's growth will be driven by demand from young Malaysians in a country with a rapidly growing population.

He points out that the 2010 Population and Housing Census report showed Malaysia's population totalled 28.3 million (23.3 million in 2000).

“So on average, half a million Malaysians are added to the population each year. Another factor is urbanisation more than 70% of Malaysians live in urban areas. Demographics will drive our business of providing affordable housing.”

The group's data shows that most of its customers are first-time property buyers who are owner-occupiers aged from 25 to 40 years old.

Ho says there are good margins to be made in the affordable property segment where current prices are generally RM400,000 and below.

“Last year, our net profit margin was about 13% at group level. This year, we are targetting a higher net profit margin of 15% from greater economies of scale.”

According to him, the group has been able to stick to its affordable property tagline over the years, despite rising land and construction costs, due to prudent acquisition, building design and management policies.

“We do not buy land that is deemed to be expensive. Our land cost is below 20% of the entire GDV of the project. Also, we always try to spot the up-and-coming areas (where property will have strong demand).”

Among the toughest challenges ever faced by the group was rapidly rising building material prices in the period before the global financial crisis hit in 2008.

“It was tough. Our margins were squeezed and contract prices for materials changed every day. That was when we decided to re-engineer some of our building designs to be more efficient in terms of cost. The next step we took was to go direct to the suppliers and negotiate bulk purchases for materials such as cement and steel bars. We locked in the prices and paid directly to the suppliers, who then supply to our contractors. So, this takes away risk from the contractors who can feel more secure in carrying out their jobs.”

Ongoing projects

Presently, the group has an undeveloped landbank of 320ha with a potential GDV of RM2.4bil.

The bulk of its remaining landbank is in Perak (62%, 198ha) and Johor (26%, 84ha).

The group's biggest ongoing project is the 314ha Bandar Universiti Seri Iskandar township in Perak.

Bandar Universiti Seri Iskandar, which started in 2001, is slated to have 6,053 residential and commercial units.

About 63% or 198ha of Bandar Universiti Seri Iskandar remains to be developed, with a potential GDV of RM872mil.

Another major township project is the 193ha Taman Pulai Indah, which is located 28km from Johor Baru.

Development for Taman Pulai Indah also started in 2001, and the township will eventually have 4,942 residential and commercial units.

Another 29ha in Taman Pulai Indah remains to be developed, with a potential GDV of RM157mil. Hua Yang is also developing the 11ha Senawang Link, consisting of 85 units of commercial and industrial lots, located along Jalan Tampin, Seremban and adjacent to the Sungai Gadut KTM train station.

The estimated GDV of Senawang Link is RM45mil, and its first phase of 52 units of one-and-a-half storey terrace factories launched in March last year has a take-up of 23%.

Meanwhile, its first major residential project in the Klang Valley was Symphony Heights in Selayang, Selangor.

The first phase was launched in June 2008, and facilities include a swimming pool, squash courts, a community hall, cafeteria, children's playground and a gymnasium.

Symphony Heights consists of three blocks of 946 service apartments on a 1.2ha leasehold plot with a GDV of RM206mil.

Sized from 863 sq ft to 1,246 sq ft, the units were retailed at prices ranging from RM135,200 to RM306,500.

To date, Symphony Heights has a 94% take-up.

One South

One South is Hua Yang's biggest project in the Klang Valley, with a GDV of RM840mil, consisting of shop offices, service apartments, SOHO (small office/home office) units and office towers on a 6.8ha plot in Seri Kembangan, Selangor.

The response to One South has been strong, with a high take-up for the three phases launched within the past one year.

Last month, the group launched 377 units of Gardenz service apartments, sized from 1,020 to 1,220 sq ft and priced from RM380,000 onwards in One South.

According to Ho, one block of Gardenz units have been fully sold while another block has seen high demand.

The Gardenz serviced apartments feature nine units per floor, served by three lifts, and each unit comes with two covered car park bays.

Facilities will include an infinity edge lap pool, wading pool, jacuzzi, sauna/steam room, gymnasium, a jogging track, two squash courts, a basketball court, indoor badminton courts and a snooker room.

One South is served by the Kuala Lumpur-Seremban and Besraya highways, with landmarks in the area including Palace of the Golden Horses, South City Plaza and The Mines Shopping Mall.

The Gardenz serviced apartments, with a GDV of RM160mil, is the third phase to be launched in One South after retail and office units in Phase 1 and 418 units of Parc service apartments in Phase 2.

The retail units and Parc service apartments have been fully sold while the office units have seen a 73% take-up rate.

The retail and office units are sized from 479 to 2,100 sq ft, and were launched at prices starting from RM750 and RM350 per sq ft respectively.

Phase 4, consisting of SOHO units is due to be launched in mid-2012 while phase 5 featuring two blocks of office towers in 2013.

One South is due to be completed by 2018.

Growth strategies

Ho says Hua Yang's double-digit annual growth strategy was planned about five years ago with major forays into the Klang Valley as a key step.

“Previously, our operations were mainly in Perak and Johor which gave us around RM100mil in annual revenue. Our plan is for the Klang Valley to contribute RM200mil to RM300mil or 50% of group revenue in the coming years.”

This year, Hua Yang aims to launch RM525mil worth of properties.

“Including RM190mil of properties that were launched but not sold last year, this means we have RM715mil worth of properties to sell this year,” he says.

Upcoming launches include 294 single and double-storey terrace houses with a GDV of RM63mil in Taman Pulai Indah, Johor in September 2011.

Also in the works are 147 double-storey houses with a GDV of RM33mil in Taman Pulau Hijauan and 31 semi-detached houses in Polo Park in the fourth quarter of this year. Both projects, with a combined GDV of RM63mil, are located in Johor Baru.

The group has also acquired more land in the Klang Valley this year, with the purchase of a 0.63ha plot in Desa Pandan, Kuala Lumpur for RM32mil and a 1.5ha leasehold site for RM13mil in Section 13, Shah Alam.

Both sites are slated for mixed commercial and residential projects, with estimated GDVs of RM160mil and RM175mil for the Desa Pandan and Shah Alam projects respectively.

He says SOHO units sized between 700 and 900 sq ft are planned for the Desa Pandan project while residential apartments sitting on a podium with retail elements are in the pipeline for the Shah Alam development.

The Desa Pandan and Shah Alam projects are due for launching in 2012 and early 2013 respectively.

“Our developments in the Klang Valley are all high rise, with fast turnaround periods. Due to land costs, it is very difficult to acquire land to build townships in the Klang Valley.”

The group is also looking at acquiring land in Sabah and Penang.

“Regarding these new land, we should have something to announce by the end of this financial year.”

A recent note issued by Inter-Pacific Research says that as at June 30, Hua Yang had total borrowings of RM73.4mil and cash of RM6.2mil, translating to net gearing of 29%.

“Our net gearing is low, and this allows us to acquire land when the time is right,” he adds.

At the moment, Hua Yang plans to remain in the affordable property segment.

“Once we achieve an annual revenue of RM500mil, we will reassess our situation and strategies, and decide on further areas of growth.”

On Tuesday, Hua Yang announced that it had acquired two parcels of land, sized at 2.1 acres in total, in Johor Baru for RM10.7mil.The land parcels, adjoined to each other, are along Jalan Abdul Samad in Johor Baru, and located only 3.5km from the Sultan Iskandar Customs, Immigration and Quarantine (CIQ) complex.

The land parcels are slated for a residential development consisting of serviced apartments, catering for young professionals and families working in Johor Baru or Singapore.

with a tentative selling price range of RM150,000 for a studio apartment and up to RM400,000 for a three-bedroom unit, the estimated GDV of the project is RM120mil.

The business successor

By the end of this month, the 37-year-old Ho would have spent a year helming the group after succeeding his uncle Ho Mook Leong as Hua Yang's chief executive officer in August 2010.

However, the British-trained architect says he cannot claim credit for the group's impressive financial performance in recent times.

“At Hua Yang, we work as a team. Since taking over as the chief executive officer, I only made sure we carried out what was planned earlier and meet our targets.”

Wen Yan, who also holds a Masters of Science (construction economics and management) from University College London, says his career in the group was not planned.

Before joining Hua Yang in October 2003 as a project co-ordinator at the group's Johor operations, he had spent about three years working in London.

“I had an independent career in London. However, after my father passed away in 2002, some family decisions were made and I joined the group,” says Wen Yan.

Later, he became general manager in April 2006 and moved to Kuala Lumpur to help grow the group's Klang Valley operations.

The following year, he was promoted to chief operating officer and executive director.

Ho says his experiences as an architect have helped in giving Hua Yang's properties more contemporary designs.

“I think our product designs are quite up-to-date and modern.”

By The Star

Properties that make sound investment

PROPERTIES, by and large, feature significantly in our lives. A large number of us spend the better part of our lives working to pay off a mortgage.

But the need for a place to live in is no longer the main driving force behind our desire to own a property. In fact, many people now invest in properties for a slew of other reasons.

To meet changing expectations from home purchasers and investors, developers and even financiers have to become more innovative. New ideas, concepts and designs are being introduced regularly to attract the potential buyer.

Apart from making their properties more attractive to potential buyers, developers, in collaboration with financiers, are also making it easier to buy a property.

What then, are the factors that induce the average person to make that commitment to part with a large portion of his future earnings just so he can own a piece of property? What makes him think that this is an investment that is worth making?

The first, for both the home purchaser and the investor, is the hope that the value of the property will rise significantly so it can be sold eventually for a tidy profit. This, I believe, is very clearly reflected in the vibrant property market in Malaysia. Browsing the classifieds pages of the daily newspapers, you will have an idea of how much buying and selling there is in the property market.

There is not very much a developer has to do to convince a potential buyer that the value of his property will be much higher on some future date. Buyers of properties in newly launched projects can even re-sell fairly quickly and in the process make a substantial profit.

For instance, a multi-storey apartment block in a mature part of Petaling Jaya was selling at RM280 to RM290 per sq ft when it was launched in 2007. Just three to four years later, the apartments were already in the secondary market for RM420 to RM490 per sq ft.

To hype up the potential gains, some developers even highlight the quantum of returns an investor can expect to make from their properties.

However, the desire for financial gains is not the only requirement developers have to satisfy if they want to attract more buyers.

Developers have to incorporate new and innovative ideas into the concept and design of their projects to promote a desirable lifestyle associated with their properties.

By incorporating such concepts and designs, developers are differentiating their projects from others. For the purchaser, it is an investment that will eventually offer him the reality of an exclusive lifestyle.

This new lifestyle no longer revolves around (just) an expensive apartment in a posh area in the city, with the requisite swimming pool, gym and private lift. For many high-rise projects, such facilities are now standard.

For some, the apartment must be a sanctuary from the hustle and bustle of city life, never mind that it is located in the city centre. Or it must be designed to evoke a lifestyle from another era.

But even as developers manage to meet all the desires of a potential purchaser, some may still hesitate to take out the chequebook. It is, after all, a huge investment and a commitment that will span many years.

To make it easy for potential buyers to make that commitment, there now are many easy payment schemes that give buyers an extended period of time to pay the first 10% or 20% down-payment. All they need to do is to pay an affordable amount to affirm their desire to purchase the property.

However, there is a downside to this arrangement. People can very quickly commit themselves to several pieces of property and soon find that they cannot actually meet all the long-term financial obligations.

That, too, is not the only way financial institutions have made it easier for people to purchase property. Some banks also offer loans with significantly longer repayment schedules, even stretching over two generations.

This concept is based on the understanding that many parents fear that property could be priced beyond the means of their children in the future. To beat the price increase, parents opt to purchase property now for their children's use when they grow up.

Loans are given on terms that enable the parents to begin the monthly instalment payments until such time when the children start to earn an income so they can take over the responsibility until the loan is fully paid up.

However, there is a risk to this arrangement. It is impossible to foresee how well the children will do in their adult life, whether or not they will find a job that will earn them enough money to take over the commitment. In fact, a child may not even want that property, never mind that it had been purchased at a much lower price.

Easy payment schemes and exclusive lifestyles aside, there are many other issues that matter to home purchasers. Security is one of them. A safe neighbourhood is no longer enough.

Gated and guarded communities have sprung up, taking the lead from high-rises where 24-hour security surveillance was first introduced years ago.

The list of such demands from home purchasers and investors will only get longer. And every new addition or innovation will likely come at a cost. The challenge for developers is to meet these demands without adding too much to the cost.

In the end, if the customer is satisfied, it would have been a sound investment, not just for the homebuyer but the developer as well.

Teh Lip Kim is the MD of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcomed. Send by email to md@sdb.com.my.

By The Star (by Teh Lip Kim)

Glomac eyes KLIFD deals with UAE partner

Kuala Lumpur: Glomac Bhd says it may bid for contracts to develop the Kuala Lumpur International Financial District (KLIFD) with its partner, the Al Batha Group.

Glomac and Al Batha, one of the largest private business concerns in the United Arab Emirates, currently have a 51:49 joint venture to develop Glomac Tower in Kuala Lumpur.

Group managing director cum chief executive officer Datuk FD Iskandar FD Mansor said Glomac is also keen to work on Bandar Malaysia, a KLIFD twin development in Sungai Besi, and the 1,335-hectare rubber research institute land in Sungai Buloh.

"We have not submitted any proposals for these projects but would be interested if we are invited," Iskandar said in an interview with Business Times recently.

Meanwhile, Glomac will launch its own projects worth about RM3.8 billion over the next few years, mostly in the Klang Valley.

The company will launch RM1.2 billion worth of projects in its current financial year ending April 30 2012. It has launched half the projects so far.

Iskandar said he is upbeat on the industry outlook, which he anticipates will strengthen with government spending and population increase.

He said the RM52 billion to be spent on the mass rapid system will stimulate the economy.

"The degree of confidence in Malaysia has dropped a little compared with last year but people have money and are spending. The banks are also flush with money.

"Launches in the last two months have been stronger, especially for landed properties. So we are confident of our projects, which mostly are landed residential units in the Klang Valley," he said.

Next month, the company will launch the second phase of its RM450 million Glomac Cyberjaya project.

By early next year it will launch the first phase of its RM400 million project in Bandar Utama, called Glomac Utama, and serviced apartments in Mutiara Damansara, worth RM250 million.

At its ongoing townships in Sungai Buloh and Rawang, Glomac has RM380 million and RM500 million worth of properties to launch respectively, over the next several years.

By Business Times

EPF confirms buying London office block for RM740m

Another investment: D2 Private sold the office block in St James’s Square to the EFP for £150mil.

PETALING JAYA: The Employees' Provident Fund (EPF) has confirmed that it has purchased an office block in St James's Square, London, where one of the tenants has one of London's highest rents.

The EPF told StarBizWeek that it bought 12 St James's Squares for 150mil (about RM740mil) from D2 Private, the leading Dublin-based Irish property investment company. The deal was completed on Aug 11.

This marks the EPF's fourth property investment in London since announcing an allocation of 1bil for British property purchases about a year ago. Including this latest purchase, it has spent 634mil.

The latest purchase is centrally located in one of London's most elegant West End squares. The seller D2 bought the building in 2006 for 60mil and refurbished the classic 81,500 sq ft Georgian building for another 20mil.

Eighteen months after buying it, D2 rented the top two floors to hedge fund Permal Investment Management Services at what was then considered the world's highest rental ever at between 140 and 130 per sq ft.

The West End market has failed to reach rents of that level since. Only earlier this year did they pass 100 per sq ft.

D2 is founded by Deirdre Foley, and David Arnold. Foley was previously a director of the Quinlan Partnership and is D2's managing director while Arnold is a well-known Irish property developer and investor.

The EPF last year handed ING Real Estate Investment Management and RREEF the mandate to invest 500mil each in central London on its behalf.

So far the fund has invested outside the core West End in a bid to find investments that yield more than 5%.

The EPF's three other property assets include commercial building Whitefriars in central London which it bought from Union Investment for 148mil in March. Whitefriars has a annual yield of 5.75%. Property consultancy Savills brokered that deal.

Prior to Whitefriars, the EPF bought One Sheldon Square in Paddington Central for 156mil, and 40 Portman Square near Oxford Street for 180mil. The two properties have yields of 5.75% and 5.55% respectively.

Properties in the city of London was among the first to start recovering from the financial crisis, rising in the second half of 2009 after two years of declines erased 50% of its value from city-centre office values.

The pound sterling's 22% drop since September 2007 had helped make property more attractive to foreign buyers, according to a report by Bloomberg.

Since 2009, when prices of London assets begin its uptrend, spending in London's prime real estate shows no sign of abating, a deep contrast to the overall state of the UK property market which has been soft until today.

In the city, investors are turning to more affordable markets or riskier properties because of the shortage of prime real estate for sale and the high prices it commands.

For the first half of this year, about $12.3 billion has been spent on prime offices, shops and homes in London, the most of any city, Real Capital Analytics's research shows.

Last week's disorder and looting in London has not diminished the appeal of investing in the city, according to Jeremy Helsby, chief executive officer of Savills Plc.

“There's no evidence of an unwillingness to invest in London,” Helsby says after the property broker reported a 52% increase in first-half profit.

“I can't think of any set of circumstances of London not retaining its status as a destination for international capital,” he told Bloomberg.

By The Star

JAKS unit buys land in PJ

JAKS Resources Bhd’s subsidiary JAKS Island Circle is acquiring a land in Petaling Jaya from Star Publications (M) Bhd for RM135 million.

Located next to Jaya One commercial centre, the land has been planned to be turned into a mixed development consisting of residential, commercial, office and recreational areas.

By Business Times

More affordable homes from Hua Yang

KUALA LUMPUR: Builder Hua Yang Bhd, with a niche in affordable housing, currently has about a dozen projects throughout the country with a gross development value (GDV) of RM650 million.

Chief executive officer Ho Wen Yan said for the current year ending March 31 2012, the company will be launching projects with a total GDV of RM525 million.

About a third of the GDV or RM154 million has been fully booked, which is the 418-unit serviced apartment at One South (Phase 2).

"Of the seven projects to be launched in the current year, 70 per cent of the GDV or RM370 will be in Selangor, 24 per cent or RM126 million in Johor and the remaining RM29 million in Perak," he said in an interview with Business Times.

Besides serviced apartments, other components that will be launched within its One South project in Sungai Besi this year include 156 units of offices and two blocks of serviced apartments (Phase 4). Others are landed residential properties in Bandar Universiti Seri Iskandar in Ipoh, and Taman Pulai Jaya, Taman Pulau Hijauan and Polo Park in Johor.

Ho said One South is the company's largest project in Klang Valley, with a GDV of RM840 million. The project, to be developed in five phases on a 6.68ha land, is expected to be completed in 2018.

One South - an integrated development comprising residential, offices and retail - is Hua Yang's flagship project.

"We will not target this project based on consumers' income level but rather on the requirements, such as first-time homebuyers, new families, newly married and young families," he said.

He said Hua Yang has a total of 314.8ha undeveloped landbank in Peninsular Malaysia, with an estimated GDV of RM2.2 billion.

The company plans to acquire more land to replenish its landbank.

"We are talking to landowners throughout the country. The focus is key urban centres and towns with huge working population as our strategy is to go where there is demand for affordable houses," he said.

The company has also acquired a piece of prime land measuring about 0.62ha in the middle of Desa Pandan commercial centre for RM32 million. It plans to develop a mixed serviced apartment and commercial centre with an estimated GDV of RM160 million.

By Business Times

Hua Yang plans to expand into Sabah, Sarawak

MAIN Market-listed Hua Yang Bhd plans to introduce its affordable housing to Sabah and Sarawak.

The company is currently talking to landowners to acquire land near city centres there.

"Sabah and Sarawak are our next market. We've done a lot of study and we believe the population and economic growth there will generate strong demand for our houses," chief executive officer Ho Wen Yan said.

Currently, Hua Yang's property projects are concentrated namely in Klang Valley, Johor and Perak.

The company, which was incorporated some 33 years ago in Ipoh, has no plans for now to go abroad.

Ho said the market is still big in Malaysia and the company wants to grow its market share here.

However, he said Hua Yang may bring its affordable housing model abroad, probably into Asian market in the next three to five years' time.

Merger and acquisition (M&A) is also not the company's way of expanding.

"We want to build a sustainable business over the long term ... We don't want to overborrow and we want to grow organically so that we can handle the growth," he said.

By Business Times

Pact gives new lease of life to Penang Turf Club land

When a media advisory arrived that Berjaya Land Bhd (BLand) was inking a deal with the Penang Turf Club (PNTC) in George Town this week, most reporters were spooked and wondered if the "ghost" of the Penang Global Centre (PGCC) was back to haunt them.

The PGCC was a proposed project to be located at the PTC grounds, carrying a gross development value of RM25 billion and to be built over a span of 15 years by its developer Abad Naluri Sdn Bhd, an associate company of Equine Capital Bhd.

Abad Naluri bought the land for RM488 million from the club in 2002 and had, among others, planned to include two five-star hotels, a performing arts centre, retail complex, monorail transportation and a world-class convention centre.

Following public opposition to the development, which was considered misleading and lacking in transparency with issues such as land rezoning and traffic congestion, along with a host of other concerns, the proposed project was officially declared "dead" after the Penang Island Municipal Council in 2008 rejected it on the basis of the developer's failure to submit the layout plans on time and comply with the council requirements.



On Tuesday, Berjaya Corp Bhd founder and chairman Tan Sri Vincent Tan was in Penang to ink a sale-and-purchase agreement between Berjaya Land Development Sdn Bhd (BLand) and Penang Turf Club (PNTC).

BLand is buying 22.8ha of freehold prime land within PNTC for RM459 million cash, and is proposing to develop a low-density, exclusive, guarded and gated housing development comprising bungalows, semi-detached homes and low-rise condominiums with an abundance of landscape and garden areas to complement the serenity and exclusivity of the surrounding areas.

The company, unlike other property developers which have entered Penang in recent times, is set to meet the requirement of building affordable housing units within the same site, although these homes will be located away from the high-end residential units.

Tan made it clear to reporters when he was asked if there would be any controversy on the project, that he was not expecting any from those living in the neighbourhood of the PNTC.

This he said is because there is no retail component to the proposed development, and the condominium would only include two low-rise blocks.

As concerns about traffic congestion owing to an incremental impact of new residents to the area are likely to surface in due time, it would be prudent for BLand to take proactive measures and devise a traffic dispersal system.

On its part, the PNTC has to contend with decreasing horse-racing revenues, while doling out large sums in quit rent and assessment in recent times.

This is because the present site of the PNTC was originally given by the government for a nominal sum and zoned as an "Open Space". However, this was changed in 2007 to a "Mixed Development" zone, to facilitate the PGCC project.

The club is now saddled with paying revised rates and has been making efforts to increase its revenue base.

In 2009, PNTC said it was planning to embark on a RM30 million development project to build 25 bungalow units on the fringes of the club, which can be rented out to generate income.

Plans for this development is still on the cards, the club's officials said, and it is currently awaiting the necessary approvals to proceed with the project.

While BLand has made it clear that Penang has become much more attractive as an investment destination in recent times and the company is on the lookout for other opportunities, there should be no major issues or opposition arising from its planned development on the PNTC grounds.

At the end of the day, it is simply a property transaction between two parties, with hopefully no "ghosts" lurking in the shadows.

By Business Times

11 named to oversee KLIFD project

PETALING JAYA: The RM26bil Kuala Lumpur International Financial District (KLIFD) will be overseen by 11 local and foreign consultants appointed by 1Malaysia Development Bhd (1MBD) to push forth the development of the project.

1MDB said in a statement yesterday that the consulting companies were appointed based on their experience and track record in their fields such as sustainability, infrastructure, engineering, landscape planning and traffic management.

In March, 1MDB carried out a pre-qualification and request for proposal process through its subsidiary 1MDB Real Estate Sdn Bhd.


Azmar: ‘We also seek people who share our vision.’

Among the selected local companies are traffic management consultant Perunding Trafik Klasik Sdn Bhd, quantity surveyor Perunding NFL Sdn Bhd, landscape architect Akitek Jururancang Malaysian Sdn Bhd and land surveyors Jurukur Perpaduan Sdn Bhd and Jurukur ESA Sdn Bhd.

The infrastructure engineering consultants are EDP Consulting Group Sdn Bhd and Buro Happold Consulting Engineers, a UK and US consultant which also acts as KLIFD's sustainability consultant.

Others include security and risk engineers ARUP Jururunding Sdn Bhd (from Malaysia) and ARUP Group International, a Hong Kong-based company. A consultant from Qatar, KEO International Consultants, was selected as programme management adviser.

The appointments are in addition to the two master planners named recently, Akitek Jururancang Malaysia Sdn Bhd and Machado Silvetti & Associates, selected from an international design competition.

1MDB Real Estate chief operating officer Datuk Azmar Talib said that the appointments were based on global practices and that the committee was “thorough and transparent in the selection process”.

“Given the scale of the development and its impact on national growth, we seek not just capability and capacity but people who also share our vision for a sustainable and holistic KLIFD and our passion to deliver a Greater Kuala Lumpur,” he was quoted.

1MDB owns the 30.35ha on which the KLIFD will be developed. As one of the entry-point projects under the Economic Transformation Programme, the KLIFD aims to attract financial institutions and global companies to complement other financial centres in the region.

The entire financial district is slated to be completed in two decades, with its first phase operational by 2016. Azmar has expressed hopes to integrate the development of the KLIFD with the country's mass rapid transit system which is slated to commence operations in the same year.

Azmar added that the selection of consultants for Bandar Malaysia, a KLIFD twin development in Sungai Besi will also undergo the same rigorous process.

By The Star

Mah Sing jumps on 48pc H1 earnings rise

Mah Sing Group Bhd, a Malaysian developer, rose in Kuala Lumpur trading after OSK Research Sdn Bhd said its first-half earnings beat estimates.

The stock climbed 1.6 per cent to RM2.49 at 9:26 a.m. local time after the company yesterday announced a 48 per cent increase in second-quarter profit to RM43.1 million.

OSK said in a report today that it raised its full-year 2011 earnings forecast by 13.2 per cent.

By Bloomberg

1MDB award jobs to local and foreign companies

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has announced the appointments of several local and foreign companies to develop the Kuala Lumpur International Financial District (KLIFD).

Eleven companies covering various fields including sustainability, infrastructure engineering, landscape planning and traffic management were appointed based on their experience and track record, 1MDB said in a statement yesterday.

1MDB Real Estate Sdn Bhd chief operating officer Datuk Azmar Talib said the selection process has been a thorough and transparent one.

"In addition, we engaged potential vendors in continuous dialogues to ensure seamless synergy with the team," he said.

The successful consultants are EDP Consulting Group Sdn Bhd, and Buro Happold Consulting Engineers (UK & USA) as consulting engineers, Perunding Trafik Klasik Sdn Bhd as traffic management consultant and Perunding NFL Sdn Bhd as quantity surveyor consultant.

The others are Akitek Jururancang Malaysia Sdn Bhd and Grant Associates (UK) as landscape architect consultant, and for the land surveyor part, Jurukur Perpaduan Sdn Bhd and Jurukur ESA Sdn Bhd have been appointed.

Also appointed were ARUP Jururunding Sdn Bhd and ARUP Group International (Hong Kong) as consultants in the security and risks engineering area, Buro Happold Consulting Engineers (US & USA) as sustainability consultant and KEO International Consultants (Qatar) as the programme management advisor.

Azmar added that the selection of consultants for Bandar Malaysia, a KLIFD twin development in Sungai Besi, will undergo the same rigorous process.

KLIFD is currently at the master planning phase and is on track to start construction beginning of next year.

The 30-ha development in the Imbi area fronting Jalan Tun Razak aims to bring together leading financial institutions and top global companies to create a catalytic pool of world-class players.

It will leverage on Malaysia’s existing strength in Islamic finance and play on its strategic location to complement other financial centres within the region.

By Business Times

Oversupply of new launches?

An artist’s impression of the Southbay City development in Batu Maung by Mah Sing Group.

There are concerns that Penang island cannot absorb the high number of projects

The planned development of RM29.6bil worth of properties on Penang island in the next 10 to 15 years has raised concerns over the capacity of the market to absorb them.

The properties are planned for 1,121.56 acres which include reclaimed land and strategic locations on the island.

Eastern & Oriental Bhd is reclaiming 740 acres for the second phase of the Seri Tanjung Pinang project in Tanjung Tokong to develop two islands for mixed development projects, which will have an estimated gross development value (GDV) of RM12bil.

E&O is expected to reclaim the land in 2012 and the group has until 2019 to complete reclamation before the concession expired.

“It should take two years from the start of the land reclamation before the first project launch can be embarked upon.

“Phase two will be a mixed integrated development comprising two islands of approximately 740 acres.


Chan: ‘E&O is expected to fully develop the land for Seri Tanjung Pinang in 10 to 15 years.’

“At three times the size of phase one, phase two is expected to generate RM12bil in gross development value,” E&O deputy managing director Eric Chan said in a report.

Chan said upon completion of the reclamation for Seri Tanjung Pinang Phase Two, it would take at least 10 to 15 more years to fully develop the land.

“Within that time, with Penang continuing on its present growth path, the demand for better residential properties and lifestyle amenities is expected to be generated.

“E&O will be poised to fulfil this demand with the realisation of Seri Tanjung Pinang Phase Two,” Chan said.

Ivory Properties Bhd is reclaiming 35 acres to add to its recent acquisition of the 67.56 acres of Bayan Mutiara land in Bayan Baru for a mixed development scheme, which will have an approximate GDV of RM10bil, according to a recent AmBank report.

IJM Land Bhd is reclaiming 103 acres for the development of an RM5bil mixed development project, which will be completed in 2021.

IJM Land is expected to complete the reclamation of the 103 acre site next year-end.

Mah Sing Group Bhd is developing properties on various prime locations on about 95 acres on the island, with an estimated GDV of RM1.6bil.

From 2012 to 2017, Sunway City Bhd will be launching the Sunway Hill Residence on an 81-acre site in Sungai Ara around 600 units of landed properties and condominiums with RM1bil in GDV.

There are also other smaller projects with combined multi-billion ringgit GDV such as the reclamation of a 100-acre site in front of Queensbay Mall by Boustead Holdings Bhd; new residential projects on the island planned by the other developers from Kuala Lumpur and Penang, and the proposed project by Penang Turf Club (PTC) on 50 acres on the PTC site.

It is estimated that about 70% of the RM29.6bil in new developments will comprise residential properties.

Last year, the purchase of new residential properties on the island was estimated to value around RM1.8bil to RM2bil, which was among the highest in recent years.

If the purchases of new properties on the island were to be maintained at the 2010 level of around RM1.8bil to RM2bil, industry observers said it would take 10 to 11 years to complete the take-up of the properties.


Jerry Chan: ‘A RM21bil GDV is a lot for the market to absorb even if the uptake were to be extended to 15 years.’

Real Estate & Housing Developers' Association (Rehda) Penang chairman Datuk Jerry Chan Fook Sing said even if the uptake was consistently estimated at RM2bil per annum, the 10 to 11 years period would still be a long time.

“This is assuming that the Penang property market can consistently absorb around RM2bil worth of properties per annum.

“A RM21bil GDV is a lot for the market to absorb even if the period of uptake were to be extended to 15 years.

“The planning and the launch of the projects must be timed to suit demand, although the demand of properties would be higher in certain areas of the island.

“But of course if the economy continues to be good and there is consistent or increasing demand, there should be no problem for the new launches to be absorbed in a shorter period of time.

“If Penang can continue to re-invent itself in the economic sphere, then it can draw people from other states to Penang to work.

“This migration could serve as the source of demand for the future property launches and create a higher population as opposed to normal birth rates,” Fook Sing said.


Lim: ‘When the holding power is gone, the speculators will have to release the properties into the market.’

Registered and chartered valuer C.A. Lim & Co proprietor Lim Chien Aun said there could be downward pressure on property prices on the island due to the oversupply of new launches.

“As it is, the bulk of properties purchased over the past five years were for speculation purposes.

“When the holding power is gone, the speculators will have to release the properties into the market. Add that to the supply of new launches, there will be an oversupply situation.

“Developers must identify where their markets are coming from carefully and release the new launches according to demand,” Lim said.

Lim said for the past five years, the return on investment (ROI) for properties on the island had dropped by 50%, while the value had increased by about 100%.

“This is something that had gone unnoticed.

“The ROI is worsened by the fact that Penang properties generate very low rentals.

“If the ROI keeps decreasing, as property values increases correspondingly, then no one would buy property in Penang for investment purposes.

“The property market in Penang would then become purely speculative in nature,” Lim said.

Lim added that there was also the affordability factor.

“To purchase a high-rise property priced above RM300,000 on the island, the buyer's monthly household income would need to be between RM8,000 and RM10,000.

“The bulk of wage earners in Penang do not fall into this income bracket.

“Where would the demand for future property launches come from?” he said.

Sunway City general manager Tan Hun Beng said the volume of properties planned for launch raised the question whether developers had done enough research and analysis on market demand.

“I think developers should make the necessary studies before making their launch projections: is the present positive response to the property market a good sign or is it an early signal of an approaching storm?” Tan said.

Chartered valuer and property consultant Azmi & Co (Penang) Sdn Bhd managing director Chandra Mohan Krishnan said the RM21bil GDV of residential properties was a lot to absorb over a 10 to 15 years period.

“If there is no demand, there may be downward pressure on property prices. However, the value of landed properties on the island should be able to hold on, as they are becoming scarce,” he said.

IJM Land (north) general manager Toh Chin Leong said it was important for developers to build a balance mix of residential and commercial properties.

“Commercial projects are important to attract the movement of labour to Penang, which will provide demand for housing.

“This is why a large portion of our second phase on 103 acres comprises commercial projects such as hotels, corporate offices, and retail outlets.”

Penang Master Builders and Building Material Dealers Association immediate past president Datuk Finn Choong said the reclamation works would generate demand for workers and jobs for local contractors.

“We can see positive benefits for Penang even before the launch of the new properties.

“The reclamation activities would bring in foreign labour to Penang which would generate economic spill-over effects for the state, as the workers would have to spend money on rentals and food. On paper the number of new projects seems a lot.

“However, if the Penang government can continue inspiring confidence in investors and manages well the expectation of Penangites, the state can draw migration from different income groups into the state that can support the new properties planned,” Choong said.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat said Malaysia's population stood at 28.3 million with an average annual growth rate of 2%.

“Being a young population, 67% are between 15 and 64. Nearly everyone will be making decisions about where to live, work, shop and play, with real estate as the major key component for the next 20 years.

“It is important to know a great deal about where they reside, educational backgrounds, family composition, incomes, and whether or not they work.

“Consequently future real estate needs can be anticipated,” Teoh said.

On the infrastructure supporting future development, Penang Chief Minister Lim Guan Eng said international contractors from several countries have indicated that they are interested to build four major road projects in Penang.

Lim said the contractors were from China, Singapore, Hong Kong, Japan and South Korea.

He said the state government would invite those interested to bid for the projects via request for proposals (RFP) by the end of the year.

“The RFP will be out at the end of the year. It will take another six months before the contracts can be awarded to the successful bidders,” Lim said in an interview recently.

The proposed projects are the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu bypass, the 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass, the 6.5km Penang-Butterworth Tunnel, and a 12km proposed road connecting Tanjung Bungah and Teluk Bahang.

By The Star

No immediate impact seen

High end property: The view from the promenade of the marina enclave at the Straits Quay in Tanjung Tokong in Penang.

Property players have mixed views on effects of US and European crises.

LOCAL real estate valuers, property consultants and the Real Estate Housing & Developers' Association (Rehda) have mixed views over the impact of the economic crises in the United States and Europe on the local property market.

Property consultant PPC International Sdn Bhd managing director Mark Saw says the softening of the equity market due to the economic crisis in the United States and Europe will impact on property prices in Penang.

“Property prices in Penang cannot continue on an upward trend forever. The weakened condition of the equity market will influence the capacity of investors to inject funds into the property market,” he says.

Chartered valuer and property consultant Azmi & Co (Penang) Sdn Bhd managing director Chandra Mohan Krishnan says there will be some minor corrections in local property prices due to the crisis in the United States and its impact on the local equity market.


Tan: ‘If the crisis is resolved within six months, then the impact will be minimal’.

“But I believe that the impact would be short-term. The longer-term impact on local property prices would be political events such as the next general election,” he says.

Sunway City general manager Tan Hun Beng says should the crises in the United States and Europe last for more than six months, there will be an impact on the local property market.

“If the crisis is resolved within six months, then the impact will be minimal,” he says

However, registered and chartered valuer C.A. Lim & Co proprietor Lim Chien Aun says the weakening of the equity market may prompt buyers to invest in property as a hedge against inflation.

“The conditions are ripe for another round of investment to move into properties.

“But whether the investments actually come into the local property market will depend on the political stability of the country,” Lim says.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat concurs that the softened equity market will generate positive sentiments and interests in the local property market, as it had proven to be a reliable hedge against inflation.

“I don't think the US crisis will have a big impact on property prices here. Property prices in Penang, in particular the landed houses, will perform better than the high-rise properties,” he says.

Rehda Penang chairman Datuk Jerry Chan Fook Sing says the crisis will not likely lead to distress selling in the local property market.

“There was no distress selling in 2008 when the country was impacted by the sub-prime crisis in the United States. We don't think there will be one now either. It all depends on how well the developers can hold on to their projects,” he says.

By The Star

SP Setia buys 409ha plot for RM330m

SP SETIA Bhd, Malaysia's most valuable property company, has bought over 409ha of freehold land in Beranang, Ulu Langat, in Selangor for over RM330.1 million cash or RM7.50 per sq ft from Ban Guan Hin Realty Sdn Bhd.

In a statement yesterday, SP Setia said it intends to develop a mixed residential township development project on the land with an estimated gross deve-lopment value of RM3.5 billion.

"The proposed acquisition offers SP Setia a good opportunity to tap into strong demand for attractively priced homes by first time owners and other home buyers in the Semenyih-Kajang corridor," it said.

It also allows the group to further reinforce and expand its core business by replicating its proven township development model in an emerging growth corridor that is not presently served by its more matured projects in the Klang Valley.

SP Setia said it is currently too preliminary to ascertain the exact product mix, total development cost, expected completion date or expected profits to be derived.

However, its management is confident the proposed development will be well received and is expected to contribute positively to the future earnings and cash flow of SP Setia.

The land deal is expected to be completed during the first half of financial year ending October 2012.

Ban Guan Hin Realty's principal activities involve the working of an estate, as well as producing and selling of rubber and oil palm fresh fruit bunches.

The terrain of the land is generally undulating and is zoned for mixed housing development, and is situated midway between the towns of Semenyih, Bangi Old Town and Beranang.

By Business Times

SP Setia plans mixed township in Ulu Langat, GDV RM3.5b

KUALA LUMPUR: SP SETIA BHD plans to undertake a mixed residential township development project in Ulu Langat with an estimated gross development value of RM3.5 billion.

The company said on Friday, Aug 12, the project would be carried out on 1,010.5 acres of freehold land which it is purchasing from Ban Guan Hin Realty Sdn Bhd for RM330.13 million or RM7.50 per square foot.

“The proposed acquisition which will be satisfied entirely in cash will not have any effect on the share capital and major shareholders of SP Setia,” it said.

SP Setia said the proposed acquisition offered “a good opportunity to tap into strong demand for attractively priced homes by first time owners and other home buyers in the Semenyih-Kajang corridor”.

It said the proposed acquisition would enable it to further reinforce and expand its core business by replicating its proven township development model in an emerging growth corridor presently not served by the group’s more matured projects in the Klang Valley.

SP Setia said it had established a solid reputation for delivering quality homes within its projects.

It cited its flagship Setia Alam township project in the Shah Alam-Klang corridor has seen the starting price for a standard 20 ft by 70 ft double-storey terrace house more than triple from RM218,000 to RM668,000 in just over seven years.

It pointed out the significant price increase achieved in Setia Alam was underpinned by the substantial investments and enhancements to the infrastructure, connectivity, amenities and overall livability of the township.

On the proposed land which it was acquiring, SP Setia said the terrain of the land is generally undulating and is zoned for mixed housing development.

It said the land was midway between Semenyih, Bangi old town and Beranang. It is 12km south of Kajang town and 25 km south of Kuala Lumpur city centre.

By The EDGE Malaysia

MRCB profit boosted by property

PETALING JAYA: Malaysian Resources Corporation Berhad (MRCB) posted a 55.4% year-on-year jump in net profit to RM19mil for the second quarter ended June 30, 2011.

In a Bursa Malaysia filing yesterday, MRCB said the higher profit for the quarter under review was mainly contributed by recognition of progress profit from the ongoing property development projects at Kuala Lumpur Sentral, including the recent sales launch of its Q Sentral strata office.

Profit was also boosted by its construction activities in Johor, such as the Permai Hospital, Eastern Dispersal Link Expressway and Marlborough College.

The group's revenue increased 25% year-on-year to RM456mil.

In a statement yesterday, MRCB chief executive officer Datuk Mohamed Razeek Hussain said more than 50% of the Q Sentral office block had been sold at record prices averaging RM1,200 per sq ft.

“Also, Kuala Lumpur Sentral, known as KL Sentral Park, which is due to be completed in the second half of the year, continues to attract strong rental interest with occupancy reaching 80%. A condominium development within Kuala Lumpur Sentral, known as The Sentral Residences, is due to be launched within the immediate month.”

MRCB said with the strong demand momentum for the group's property projects, and the active progressive works from its construction and engineering activities, it was on track to achieve the targeted revenue recognition of RM1.3bil for the current financial year.

By The Star

Govt to acquire 600 lots of land for MRT project

KUALA LUMPUR: The Government will be acquiring between 500 to 600 lots of private land for the My Rapid Transit (MRT), which is about 20% of the total land area needed.

Of these, 250 lots will be in Kuala Lumpur. The private lots would comprise residential, commercial and vacant land, a source familiar with the project said.

“The balance 70% to 80% of land required is government land,” he said at a public hearing held at Syarikat Prasarana Negara Bhd office in Bangsar. Yesterday's session was for land owners along Jalan Sultan, Kuala Lumpur, which is part of the popular Chinatown area. Their properties will located above part of the 9.5km underground stretch of the MRT which runs from Jalan Duta to Maluri, Cheras.

The Sg Buloh-Kajang line will run 51km. The multi-billion ringgit project is touted to be the largest, and potentially the most expensive, civil infrastructure project undertaken by the Government as part of the Economic Transformation Programme (ETP). It will have 27 elevated stations and seven underground stations from KL Sentral to Maluri stretch.

About 80 people attended the jam-packed meeting at Prasarana's office to voice their grouses and submit a letter of protest against stretches of the underground portion of the MRT that will come under the Land Acquisition Act 1960.

Under the Act, if the Government tunnels under a certain tract of land, it must acquire the properties above, thus compelling owners to vacate their premises.

The impending acquisition has raised concerns as it involves heritage buildings, some as old as 100 years. About 20 to 30 buildings will be torn down, a few of them being Kuala Lumpur landmarks such as Yook Woo Hin restaurant, Lok Ann Hotel, and Yan Keng Benevolent Dramatic Association building. Other larger buildings to be acquired include the old Klang bus station, formerly known as Foch Avenue, Plaza Warisan and UDA Ocean.

Prasarana project director Zulkifli Yusoff, who chaired the hearing, said land acquisition was unavoidable, adding that it was part of the Government's urban renewal plan.

“You cannot stop the acquisition,” he told the land owners.

The acquisition cost for the private land is not yet known as the prices have to assessed by the Valuation Department of the Ministry of Finance. Several meetings on valuation and compensation would be held with the private land owners beginning the middle of this month, sources say.

At the hearing, Yusoff said the Government was not destroying Chinatown but merely renewing some lots. He said Prasarana would conduct dilapidation surveys on the affected buildings before, during and after the construction process as mandated by law.

The initial ground works to prepare for the underground tunnelling has already started in three locations, Sg Buloh, Jalan Duta and Cochrane area.

Sources said tenders for the actual underground construction works would be called at the end of the year.

The tunnels will be 20 to 30 m underground, or 40 m if it has to go under the SMART tunnel. Tunnelling works should be completed by 2015 as the entire MRT has a 2016 deadline for completion.

By The Star

Daiman unit wins bid to buy land

PETALING JAYA: Daiman Development Bhd's unit Daiman Properties Sdn Bhd has succeeded in its bid to buy the Menara Landmark in Johor for RM55mil.

It told Bursa Malaysia yesterday that Daiman Properties had put in the bid to acquire the property in a public auction at a reserve price of RM55mil. The acquisition would be financed from its own funds.

The group said the building had 171,097 sq ft of retail complex, 163,339 sq ft of office tower, a car park area for 673 cars and 471 bays for motorcycles (estimated built-up area of 290,170 sq ft).

By The Star