BRDB denies rumours it has called off disposal of prime assets

PETALING JAYA: Bandar Raya Developments Bhd (BRDB) is still deliberating the sale of its prime assets and denied that it had called off the deal, the company said in an emailed reply to StarBiz.

BRDB was asked by StarBiz to comment on rumours that it was going to call off the sale. “The matter is still being deliberated by our board of directors. We will make an appropriate announcement once details have been confirmed,” a company official said in the email.

Industry players have also said that no appointment had been made yet by BRDB of any independent international property valuation firm to manage the tender for the sale, something that the company said it would do. BRDB didn't reply to a previous question on this issue.

BRDB had first said in September that it had accepted an offer (subject to shareholders' approval) by major shareholder Ambang Sehati Sdn Bhd to buy its main assets, comprising the Bangsar Shopping Centre (BSC), Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for RM914mil.

Following the proposed disposal, the board had intended to pay a special dividend of 80 sen net per share, or RM390mil. The deal would have seen BRDB netting RM430mil in cash and the repayment of RM430mil in borrowings and dividends from BR Property to BRDB.

Ambang Sehati, which owns 18.8% in BRDB, is a private vehicle of Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, who is chairman of the property firm.

However, since then, there had been calls for BRDB to dispose of the assets via a tender to get a better price and appease disgruntled shareholders, to which the property firm had agreed.

The Minority Shareholder Watchdog Group has commented that the open tender and appointment of an independent international property valuation firm would “allow time and independence as well as professionalism to this exercise, which is positive in terms of governance.”

An analyst said it would bode well for BRDB if it were to call off the sale as its assets had growth potential.

“The Bangsar Shopping Centre has stood the test of time and continues to generate stable recurring income. It is also situated in a strategic location and is popular among expatriates and discerning shoppers,” he said.

AmResearch, in its report after the announcement of the sale, estimated the four properties will contribute between 20% and 25% to BRDB's earnings before interest and tax in 2012 and 2013.

On a separate note, an industry source said BRDB is bidding for the proposed development of 20 acres of prime land in Bangsar that used to house Lever Brothers' soap and margarine manufacturing plant.

The land had been left unoccupied since Unilever Malaysia moved out in 2003.

By The Star

RM460mil KL Eco City project to be funded by three Islamic financial institutions

Sustainable city living: (From left) Liew, Ahmad Fuad, Raja Nong Chik and SP Setia deputy president and COO Datuk Voon Tin Yow taking a look at the scaled down model of the mixed development project.

PROPERTY developer SP Setia Berhad, officially launched its KL Eco City project recently with a signing ceremony for a RM460mil syndicated Islamic financing facility provided by three Islamic financial institutions, namely HSBC Amanah Malaysia Berhad, Hong Leong Islamic Bank Berhad and Bank Muamalat Malaysia Berhad.

The syndicated financing facility marks the next step for the developer in realising its vision for KL Eco City which is a joint venture project between SP Setia and Kuala Lumpur City Hall (DBKL). The privatisation agreement with DBKL was inked on Oct 24.

President and chief executive officer of SP Setia Tan Sri Liew Kee Sin said with all the required funding in place, KL Eco City was ready to take off and targeted to become the new iconic landmark exemplifying sustainable city living in Kuala Lumpur.

KL Eco City is an integrated mixed development comprising commercial and residential components situated on a 24-acre site along Jalan Bangsar just opposite Mid Valley City.

Liew said KL Eco City would transform the former Kampung Haji Abdullah Hukum site into an inner city haven comprising residential towers, serviced apartments, offices and a retail podium which will embody the group’s core development philosophy of — Live Learn Work Play in an urban setting.

The project is expected to take 10 years to complete and aims to be the country’s first integrated Green development targeting both the Malaysian Green Building Index (GBI) and US-based Leadership in Energy and Environmental Design (LEED) certifications.

Connectivity wise, the group is investing over RM150mil to link KL Eco City to all major highways. There will also be a pedestrian link bridge across Sungai Klang to connect the development to Mid Valley City.

Liew also shared that a new KTM Komuter station would be built and integrated with the existing Abdullah Hukum LRT station. The developer has also made provisions for an underground station for the proposed MRT line. “This will make KL Eco City a unique 3-in-1 public rail transport hub and the first of its kind in the city,” Liew added.

He said the group’s hard work and perseverance over more than a decade to secure this prime redevelopment site had truly paid off.

Phase 1 of the project comprising strata and boutique offices has been tremendously well received with most units taken-up even before its official launch.

Liew expressed his sincere appreciation to both KL Eco City’s customers for their faith in the project and also to the banks for extending the syndicated financing by saying: “We are thankful for your confidence in the group and look forward to your continued support.”

HSBC Amanah was represented by its chief executive officer Rafe Haneef while Hong Leong Bank Berhad was represented by its Group Business Banking chief operating officer Peter Chow. Representing Bank Muamalat was its deputy chief executive officer Musa Abdul Malik.

The guest of honour at the event was Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Datuk Raja Zainal Abidin, who was accompanied by Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail.

Raja Nong Chik said KL Eco City was a great milestone for both SP Setia and DBKL as it was a strategic and synergistic public-private sector partnership to realise the government’s mission to transform Kuala Lumpur into a great modern city, as stipulated in the Greater Kuala Lumpur/Klang Valley roadmap.

By The Star

Shortlisted Bangsar developers to be revealed next month

PETALING JAYA: The names of developers shortlisted to undertake the development of the 20 acres of prime land in Bangsar are expected to be revealed next month.

Permodalan Hartanah Bumiputera (PHB), which owns the land, is believed to be still in the process of shortlisting the candidates based on their project submissions.

Six to eight developers are said to have submitted bids to tender for the development earlier this year.

The candidates have so far made two rounds of presentation on their proposed development plans to the PHB board and independent consultants.

The criteria will be based on potential yields, project concept and design and traffic dispersal system, among others.

The land, formerly a famous landmark housing Lever Brothers' soap and margarine manufacturing plant, has been left unoccupied since Unilever Malaysia moved out in 2003.

Lever Brothers started operations there in 1947 and it was reputed to be the largest factory in the country then; providing jobs for hundreds of Malaysians.

Lever Brothers changed its name to Unilever Holdings Sdn Bhd in 1994. Since moving out, it has been operating at Menara TM in Jalan Pantai Baru, Kuala Lumpur. It also has a food factory in Rawang producing dressings, spreads, seasonings and sauces.

Since it was vacated, a number of developers had expressed interest in the land and were negotiating for a fair value for it.

Industry observers said the land's location was very strategic and would be ideal for an integrated commercial cum residential development.

The land previously belonged to the Railway Asset Corp and came under the ownership of PHB earlier this year.

It is understood that 30% to 40% of the development ratio would comprise residential units, and the rest would be office blocks, a hotel, shopping mall, and shop lots.

The plot ratio will be between six and eight times, and the project is expected to generate a gross development value of RM4bil-RM5bil.

A property valuer said the land could fetch between RM250 and RM300 per sq ft and should be worth between RM250mil and RM300mil.

By The Star

Special policy to assist people to own homes

SELANGOR is setting up a special policy for land development in order to assist residents to own a home.

In a reply to a question by Dr Shafie Abu Bakar (PAS-Bangi) who asked how the state was assisting residents to own a home and the areas identified for such homes, housing, building management and squatters committee chairman Iskandar Abdul Samad said those with land development of over 4.046ha in the Klang Valley would be subjected to 20% of low- cost houses, 20% medium-low cost houses and 10% medium-cost houses.

He added that development on less than 4.046ha of land would be subjected to build 30% medium cost houses.

Over and above this, Iskandar added that the maximum selling price of an affordable home (rumah mampu milik) would also be fixed accordingly.

For instance, low-cost houses within the local council area in the Klang Valley will be priced at RM42,000 while those within the local district area will be priced at RM60,000 and those on the outskirts are priced at RM30,000.

“The state has also introduced the ‘Selangor Affordable Homes New Concept’ programme which allows those with low income to own a comfortable home,” he said.

From 2005 to 2010 Selangor projected that it needs to have at least 435,775 homes in various types to accommodate some 7.3 million residents back then.

In line with the new scheme — targetted at low-income earners — the state is expected to build at least 10,000 homes through PKNS.

Five areas have been selected for the project next year — Bandar Baru Bangi in Hulu Langat, Antara Gapi in Hulu Selangor, Kota Puteri in Kuala Selangor, Kampung Seri Temenggong in Gombak and Taman Sains Selangor 2 in Sepang — which will see a total of 1,452 homes built.

By The Star

PKNS told to address concerns and resubmit application

The Petaling Jaya City Council (MBPJ) wants PKNS to prove that its plan to redevelop the sports complex in SS7, Petaling Jaya, is sensitive to its surrounding and residents before the council can consider their application.

“The application has not been tabled at the OSC (One-Stop Centre). The public hearing was held last week and they will need to prove that the residents’ concerns raised during the session have been addressed when they re-submit their application,” said mayor Datuk Mohamad Roslan Sakiman.

He said the developer would need to show that all issues arising from traffic, land use and high density had been considered and rectified.

MBPJ councillor Derek Fernandez said they applied for a plot ratio of six which is legally impossible to give because the maximum allowable plot ratio for that area under optimum conditions was four, according to the gazetted local plan.

“Besides, they are applying for apartments when the land title is commercial. They should apply for service apartments instead.

Derek said if PKNS resubmitted their application, a public hearing would be called again to allow the residents to make comments especially in relation to the major issue of traffic congestion and lower quality of life.

SS7 neighbourhood action committee chairman, Datuk Zul Mukhshar Md Shaari said he doubted that PKNS would withdraw their application as Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim had mentioned that the land’s high value could earn PKNS a profit to be invested into other social projects like building affordable homes.

Selangor MCA Public Complaints Bureau chief Datuk Theng Book said the state government must ensure that the project would benefit the people, especially the middle income group.

“The developer may be asked to reduce the density but we still want the project to benefit the middle- income group that struggles to have their own house, or keep the area green.”

Seri Setia assemblyman Nik Nazmi Nik Ahmad said if the plan to redevelop the sport complex stayed, PKNS should start over with a clean slate.

“I hope the state government and PKNS will hold a townhall meeting with the residents before they resubmit the plan,” he said.

The 30-year-old PKNS sports complex which has a field, six tennis courts and a clubhouse was planned to be redeveloped into a mixed-development project comprising seven 35-storey apartment blocks and two 10-storey office blocks and a 15-storey business block.

The development on the 7.6ha site, a joint venture between Melati Ehsan Holdings Bhd and PKNS, is expected to cost more than RM1bil.

PKNS stands to pocket some RM384mil, or 70% of the total projected gross profits from the actual sales value of the development over a period of eight years ending December 2019. The developer, Melati Ehsan, will also pocket a profit from the sales of whatever it builds on the site.

By The Star

Protest a last resort for low-cost house buyers

About 50 buyers of the stalled low-cost flat project in Petaling Jaya Selatan (PJS) staged a protest outside the Selangor state secretariat building recently demanding a solution to their problem.

The group, led by action committee chairman Sugumaran S. Muniandy and Parti Sosialis Malaysia national treasurer A. Sivarajan, insisted on handing over a memorandum to Mentri Besar Tan Sri Abdul Khalid Ibrahim.

They held placards that read, Mana rumah kami (Where are our houses), Tan Sri kami harapkan jawapan kepada masalah kita (Tan Sri, we are hoping for a solution to our problem) and Tunaikan tuntutan kami (Fulfil our demands).

Sugumaran said 276 people bought the Block E low-cost flats in 2003 but the development never materialised.

Some of them paid 10% down payment of either RM3,500 or RM4,200 while the rest took a 100% loan from banks.

The latter had to pay about RM30 per month as loan interests.

“Some of the buyers lived in squatter areas previously. They are now staying in PPR units in Lembah Subang, longhouses in PJS 1 or renting houses on their own.

“Those living in the longhouses suffer from floods which occur three times within five months. The drains in the area are clogged too but the Petaling Jaya City Council didn’t help us to solve the problems,” he said.

A buyer, Paisah Deraman @ Abdul Rahman was served a bank notice in October last year, urging her to pay a sum of about RM15,000 for the loan she took.

“The developer didn’t build the project and yet we have to settle the loan,” she said.

Another buyer, Zainab Mat Yaman, 40, said they just wanted their own house.

S. Kumaran, 36, was worried about applying for loan should the project revived later.

“My wife, who was eligible to apply for loan back then, has stopped working now. How are we going to apply for loan?

“The condition of PPR Lembah Subang isn’t perfect. Only one out of the three lifts are working. It is especially troublesome for us since we live on the 13th floor,” he said.

Sugumaran said the buyers had a meeting with Khalid on June 16 and he promised to settle the problem within four days after discussing with the developer.

“However, five months later and we still haven’t received any news from Khalid.

“We followed up with letters on Aug 19, Sept 26 and Nov 8 but to no avail. In our last letter, we told him we would be here if we still didn’t hear from him,” he said.

He added that Khalid also verbally promised to let the affected buyers purchase the 800 sq ft affordable homes costing RM35,000.

State Housing, Building Maintenance and Squatters Committee chairman Iskandar Abdul Samad came out of the state assembly to meet them at 11.15am but the buyers insisted that Khalid should be the one receiving the memorandum.

Iskandar then told them he would relay their message to the Mentri Besar, and the committee made up of 12 buyers would be allowed inside the building later to see Khalid.

At about 1pm, the buyers were still outside the gate of the state secretariat building, chanting, Turun, turun, MB turun. (Come down, come down, MB come down).

Finally, they were let in at about 2pm and Khalid, who received the memorandum, promised to come out with a solution within a week.

By The Star

SP Setia to kick-start RM6b project early 2012

SP Setia Bhd will kick-start the first phase of the RM6 billion KL Eco City project by as early as next year.

The first involves the building of RM2 billion worth of high-rise residential units.

The company's plan for the project received a boost after it managed to secure RM460 million financing facilities.

"We have started works. We are doing soil testing, piling works and so forth," SP Setia president and chief executive officer Tan Sri Liew Kee Sin said.

The project, which has a total gross development value of RM6 billion, is expected to take 10 years to complete. The first phase will take about three to four years.

It is a joint-venture project between SP Setia and Kuala Lumpur City Hall.

"The KL Eco City will be our biggest property project in Kuala Lumpur," Liew said at a media briefing after the signing ceremony for the syndicated Islamic financing facility and launch of KL Eco City yesterday.

Also present at the launch was the Minister of Federal Territories & Urban Wellbeing Datuk Raja Nong Chik Raja Zainal Abidin.

The facility is provided by three Islamic financial institutions, namely HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Muamalat Malaysia Bhd.

Although the development of the property may raise concerns of oversupply of high-rise residential properties, analysts remain optimistic that the project will have a good start.

"There will be demand for the property ... the location is very strategic. I believe the only concern buyers may have is traffic congestion on that area, even that, I believe works are being done to address it," said Mercury Securities head of research Edmund Tham.

SP Setia will be investing more than RM150 million to build dedicated interchanges to directly link KL Eco City to all major expressways coupled with an internal two-tier road system.

"It's also part of our commitment to solve the traffic problems first, so that by the time phase one is ready, traffic problem of that area will be resolved already," said Liew.

Meanwhile, Liew said SP Setia is waiting for the offer documents from Permodalan Nasional Bhd (PNB) for its shareholders to decide whether to sell their shares to the country's biggest fund manager.

He ruled out the possibility that SP Setia would convene an extraordinary general meeting to discuss the PNB takeover bid as reported in a newspaper.

"There will be no such meeting. It's all lies. It's in the shareholders' hands whether to sell or not to sell (their shares)," he added.

By Business Times

SP Setia looking forward to PNB’s offer

KUALA LUMPUR: SP Setia Bhd Group is awaiting offer documents from Permodalan Nasional Bhd (PNB) for its shareholders to decide whether to sell their shares to the country's biggest fund manager.

President and chief executive officer Tan Sri Liew Kee Sin said sentiments aside, his company was still positive on the bid to increase PNB's stake in SP Setia.

“On the positive side, the company was very proud that a national and the largest fund manager is prepared to increase its interests in SP Setia and also boost the company's value.

“If SP Setia is not good, an entity such as PNB will not come forward to invest more.“Whatever it is, we must still wait for the official offer documents to come out,” he told reporters after the launching of KL Eco City project by Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Raja Zainal Abidin yesterday.

Liew said the acquisition process was long and complicated, but the official offer documents should come soon, maybe by year-end, subject to PNB's convenience.

Asked whether he would helm the management after PNB held majority shares in SP Setia, Liew said he would if asked to.

“However, until this moment, our (SP Setia and PNB) relationship is very good,” he said.

Liew also ruled out SP Setia would convene an extraordinary general meeting to discuss the PNB takeover bid as reported in a newspaper.

“There will be no such meeting. It's all lies. It's in the shareholders' hands whether to sell or not to sell (their shares),” he added.

By Bernama

IJM brings RM5bil iconic waterfront project to Hong Kong

HONG KONG: IJM Land Bhd's RM5 billion iconic waterfront project in Penang, known as "The Light," is up for grabs at the ongoing MIPIM Asia 2011, the world's premier real estate exhibition and conference, at the Hong Kong Convention and Exhibition Centre.

Located just off the Penang Bridge on the island's eastern coastline, The Light is an integrated project comprising commercial and residential components.

Its chief executive officer and managing director Datuk Soam Heng Choon said: "We are bringing it up to Hong Kong (at MIPIM Asia) where there are more international investors who are looking at it.

"The residential component is on 16.8ha (42 acres) reclaimed land which we launched in 2009. Currently, we've launched four parcels of the residential projects.

"We already commenced reclamation for the commercial projects. We are now ready to go into the market to look for investors," he told BERNAMA on the sidelines of MIPIM Asia 2011, here.

MIPIM Asia 2011, which began yesterday, was opened by Hong Kong's secretary for development, Carrie Lam Cheng Yuet-ngor.

The three-day event will end tomorrow.

In the commercial component, Soam said the total land hectarage was about 42 hectares (105acres) comprising hotels, a business park, convention centre, shopping complex and a performing arts and cultural centre.

He said the first phase of the residential component was under construction.

"We've launched (the residential component) and was mostly sold to Penangites.

"This project will take 10 years (to complete). This, however, depends on how fast we can go. If we can get investors to come in to partner us in some of the commercial projects, this can go very fast, may be in the next five to eight years, it will be completed, he said.

Soam said IJM Land was not desperately looking for investors, however,"we are just looking for people who may be interested because we've already got a lot of interest and investors who are already there but there may be additional people who are also interested as well."

Back home, he said: "We've our local and also Singaporean funds looking at investing in this place as well."

"We came here to specifically network and showcase The Light project. So, we need to be more focused and today we are here to focus on The Light," he added.

IJM Land, with projects in Penang, Klang Valley, Johor, Sabah (in Kota Kinabalu and Sandakan) and Sarawak (Kuching), is among the Malaysian participants at MIPIM Asia 2011 being held at the Malaysian Pavilion.

The Malaysian Pavilion was initiated by Malaysia Property Inc, a Malaysian government initiative that acts as a "bridge" between institutions and corporate and private investors to real estate investment opportunities in Malaysia.

By Bernama

Ibraco buys prime land in Kuching

KUCHING: Ibraco Bhd is to aggressively expand its property development with the purchase of 49.5ha of prime land along Kuching-Kota Samarahan Expressway for RM41.6mil in cash.

Managing director Chew Chiaw Han said the land acquisition was a strategic move in line with the group's expansion and development plans.

“The said land is a strategic investment which will help to enhance the group's future earning potential,” he told StarBiz.

Ibraco, which has built more than 10,000 units of properties mostly in the Tabuan Jaya area here, expects the acquisition to be completed within 60 days.

The purchase will be funded by internally generated fund and bank borrowings.

Chew said the acquisition had boosted Ibraco group landbank to more than 404ha in Kuching.

Ibraco said the vacant land was strategically located in the greater Tabuan Jaya with good existing infrastructure and easy accessibility to public amenities.

It is sited near to Ibraco's most ambitious flagship development Tabuan Tranquility, a massive commercial, industrial and residential project on 66ha which had registered high take-up rates since it was launched last year.

The 49.5ha land has been approved by the Sarawak Land and Survey Department for mixed development.

“We are in the midst of drawing up a development masterplan for the vacant land.

“First phase development is expected to kick off in the first half of 2012,” he added.

The land is expected to be developed in phases, and would probably comprise commercial, office and residential properties.

As of Sept 30, Ibraco has sold all 76 units of four-storey shophouses under Tabuan Tranquility phase 1 and 81% of residential properties (204 units of terrace houses and 38 units of semi-detached houses) under phase 5.

Tabuan Tranquility will have 640 units of double-storey terraced houses, 108 units of semi-detached houses, 60 units of three-storey townhouses, 76 units of shophouses, 72 units of semi-detached industrial buildings, one office block and a petrol service station when fully developed in five phases by 2015.

The mixed development has a gross development value of RM517mil.

Two months ago, Ibraco launched a new residential scheme in Tabuan Stutong Jaya, which comprises 77 units of single-storey terraced houses and semi-detached houses.

It is also building a block of eight three-storey shophouse in Stutong.

“The group continues to post strong sales momentum for all projects,” Ibraco said in notes accompanying its third quarter (Q3) results.

Ibraco posted a group pre-tax profit of RM3.2mil on turnover of nearly RM27mil for the quarter ended Sept 30, 2011 against a group pre-tax loss of RM2.14mil on turnover of merely RM72,000 in the Q3 of 2010 when it was still categorised as a Practice Note 17 company.

For the first nine months this year, the group registered pre-tax profit of RM10.8mil on revenue of RM74.9mil.

By The Star

Details of loans can widen reach to help distressed US homeowners

WASHINGTON: The reach of a government effort to help distressed homeowners refinance their mortgages could be largely determined by details on lender liability that will be announced.

The regulator for government-controlled mortgage finance firms, Fannie Mae and Freddie Mac, said last month that it was widening a programme to help borrowers with little or no equity in their homes refinance.

The initiative, known as the Home Affordable Refinance Programme, or HARP, hinges on lenders voluntarily writing new loans for borrowers hard-hit by declining home prices.

But many lenders have been worried that they could be forced to buy back refinanced loans if defects with the initial mortgage are found, a concern that has undercut the programme's effectiveness.

The regulator, the Federal Housing Finance Agency (FHFA), said it would relax the representations and warranties participating lenders had to abide by as part of its revamp of the programme.

Lenders would have learnt yesterday to what extent those contracts, which determine their liability for bad loans, will be waived.

“For those originating the new loans, they will look at how these waivers are going to structured,” said Bose George, an analyst with Keefe, Bruyette & Woods Inc in New York. “If they provide enough of a comfort zone, these changes to the representations and warranties could bring meaningful participation.”

HARP is open to borrowers who have little or no equity in the homes as long as they are making timely payments and their loans are guaranteed by Fannie Mae and Freddie Mac, which currently back about half of all US residential loans.

As part of the revamp announced in October, FHFA said it would scrap a cap that prevented borrowers whose mortgages exceeded 125% of the value of their homes from participating in the programme.

Analysts at Barclays Capital estimate up to 3.1 million loans are eligible for the programme. So far, about 894,000 borrowers have used HARP to refinance.

FHFA said the changes could double that number, although that would still fall far short of the five million homeowners the Obama administration had hoped to reach when the programme was unveiled in 2009.

While borrowers may move through the refinancing process at a faster rate under the retooled initiative, the breadth of the waivers on representations and warranties will largely determine the degree to which lenders and mortgage servicers are willing to make these riskier loans.

Those originating the loans have been skittish about refinancing higher-risk borrowers with the possibility a loan's government guarantee could be stripped if it sours or it is deemed defective.

Edward DeMarco, acting director of FHFA, said during a conference call with reporters last month the plan would wind up producing “substantial relief” from the representations and warranties.

But George cautioned that Fannie Mae and Freddie Mac might try to offset the waivers with an additional fee to cover the potential costs of being stuck with bad loans.

The companies have been successful at getting lenders to buy back defective loans, which has helped them bring in revenue.

By Reuters

SP Setia launches KL Eco City project

SP Setia Bhd Group today officially launched the KL Eco City Project, an integrated mixed development project that may become a new iconic landmark of Kuala Lumpur.

President and Chief Executive Officer Tan Sri Liew Kee Sin said that with all the required funding secured, the 9.6-ha project was set to take off and be completed in 10 years.

"The project aims to be the country's first integrated green development, targeting both the Malaysian Green Building Index and US-based Leadership in Energy and Environmental (LEED) certifications.

"We are developing this project in line with the government's aim for the private sector to rejuvanate the squatter lands in Kuala Lumpur," he said at the launch ceremony officiated by Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin here.

Liew said the main priority for the development now would be to solve the traffic congestion problem in the area by the completion of its first out of four phases in three to four years.

"We expect 30,000 occupants in the city, comprising both commercial and residential," he said.

Connectivity-wise, Liew said the group would invest more than RM150 million to link KL Eco City to all major highways.

KL Eco City, a joint venture project between SP Setia through KL Eco City Sdn Bhd and Kuala Lumpur City Hall (DBKL), is situated along Jalan Bangsar, opposite the Mid Valley City.

At the same event, SP Setia inked a RM460 million syndicated Islamic financing facility provided by three Islamic financial institutions for the KL Eco City project.

The funding, Liew said, would be utilised mainly for the infrastructure purpose, namely the proposed transportation hub in the project itself.

The banks were HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Mualamat Malaysia Bhd.

By Bernama

Dijaya, Ivory rise on Penang property tie-up

PETALING JAYA: Dijaya Corp Bhd and Ivory Properties Group Bhd shares were up after the companies announced a tie-up for a mixed-property project with a gross development value of RM10bil in Bayan Mutiara, Penang.

Dijaya rose 3.6%, or 5 sen, to RM1.44 while its warrants advanced 6.5%, or 3 sen, to 49 sen. Ivory Properties added 7%, or 7 sen, to RM1.07.

Dubbed Penang World City, the project will be undertaken by joint-venture vehicle Tropicana Ivory Sdn Bhd (TISB), which is 49% owned by Dijaya and 51% by Ivory Properties. TISB was set up on Oct 14.

Penang World City will be built on a 102.56 acre site, of which 35 acres is to be reclaimed. It will comprise residential units, a shopping mall, office suites, office towers, a hotel, retail spaces and an open mall with a boulevard.

The land is being bought for RM1.08bil from state-owned Penang Development Corp.

Bayan Mutiara is a new development hub in the eastern part of the Tun Dr Lim Chong Eu Expressway and is in the vicinity of Sungai Nibong.

Ivory Properties has proposed to finance the project via a renounceable rights issue of 186,000,000 new ordinary shares of 50 sen each as well as 186,000,000 new free detachable warrants.

Dijaya, meanwhile, will extend financial assistance to TISB in the form of shareholder advances, guarantee, indemnity or collateral of up to RM525.4mil, or 49% of the total consideration of the development land.

Analysts contacted by StarBiz have a positive view of the project, citing its prime location as a major plus factor.

“Land in Penang is scarce and the outlook for housing in the Bayan Mutiara area is booming,” an analyst said.

“It is not easy to get land in Penang for that price. Property developers prefer Johor Baru because land is much cheaper there.”

Another local bank-backed analyst said although he liked the land, he considered it pricey. At RM240 per sq ft, it was comparably higher than IJM Land Bhd's land further north of the island that was purchased at RM50 per sq ft. IJM Land has a 150.24-acre mixed-development called Light Waterfront Penang.

The analyst also said the upside for Ivory Properties' stock would be capped at around 30% as its share base would be diluted by two to three times following the rights issue.

He added that the choice of office towers in the development mix was surprising as the demand for office space in Penang was tepid.

Nonetheless, he said the project was still at its early stage and was subject to change.





“We haven't seen a detailed breakdown of the development components yet but the residential portion is likely to be larger,” he said.

Penang World City is scheduled to be completed in eight years. Work on the first phase is scheduled to begin at the end of next year.

By The Star

Pavilion looking to expand

Launched: (from left) Maybank Investment CEO Tengku Datuk Zafrul Tengku Abdul Aziz, CIMB Group corporate & investment banking deputy CEO Datuk Charon Wardini Mokhzani, Pavilion REIT Management executive directors Datuk Lee Tuck Fook and Datin Cindy Lim, and Ho at the prospectus launch.

KUALA LUMPUR: Pavilion Real Estate Investment Trust (REIT), en route to a listing on Bursa Malaysia, aims to add more assets to its portfolio and wants to continue its “shopping spree” to acquire at least three more retail properties within the next three years, depending on the economic situation.

Chief executive officer Philip Ho told StarBiz recently that the company, which will see its post-listing loan-to-value (LTV) ratio at 20%, could either finance these additional property injections by going back to its shareholders or through bank borrowings, although the latter was the preferred option for now.

“The proceeds of close to RM700mil is being utilised to pay down the debt. At 20% LTV ratio, I reckon this is a comfortable gearing ratio and will allow us to finance these acquisitions either through shareholders or with bank borrowings. We can acquire up to a billion ringgit without going back to shareholders,” Ho said.

“Under Securities Commission rulings we are allowed to gear up to 50% LTV ratio. We don't intend to gear up until that high though. I think the right formula is somewhere between 25% and 30% as most of our peers would. Our balance sheet is very strong, we can still borrow money,” he added.

The current Pavilion shopping complex, which has been fully occupied for two years with a potential-retailer waiting list of 200 and rental yields of about RM16 per sq ft, will begin extension works by the first half of next year. Ho said Pavilion REIT had “obtained all development approvals” for the extension.

“This is an extension of about 300,000 sq ft of retail space, and will be built by Pavilion REIT's sponsors (original shareholders Urusharta Cemerlang Sdn Bhd) on the former carpark of Millenium Hotel. They (the sponsors) will also build an apartment on top of the new retail space,” Ho said.

Pavilion REIT will also develop another shopping mall in UEP Subang Jaya, following the compact mall concept with an apartment block on top of it.

“This will be our first foray into the suburbs and we believe this concept will work. This compact mall which will be developed by Usurharta Cemerlang will have another brand name that will be managed by the Pavilion Group,” Ho said.

“We believe in our branding and good location which will enable this shopping mall to withstand the troughs of any economic crisis,” Ho said responding to qualms of the possible downward price pressure on rental yields due to oversupply.

Pavilion REIT Management Sdn Bhd, the manager of Pavilion REIT yesterday launched the prospectus in conjunction with its proposed listing on the Main Market of Bursa Malaysia on Dec 7.

Pursuant to the initial public offering (IPO), 755 million units would be offered to Malaysian and foreign institutional investors and selected investors at the institutional price (other than cornerstone investors) which would be determined by way of book building.

A total 265 million units has been earmarked for allocation to six identified cornerstone investors at an offer price of 90 sen per unit or the institutional price, whichever is lower.

The six cornerstone investors are Permodalan Nasional Bhd, Employees Provident Fund, Kumpulan Wang Persaraan, Great Eastern Life Assurance (M) Bhd, American International Assurance Bhd and HwangDBS Investment Management Bhd.

“About 35 million units will be offered to the general public in Malaysia, eligible tenants of Pavilion Kuala Lumpur Mall and Pavilion Tower, directors of the manager and the eligible employees of the manager, Urusharta Cemerlang Sdn Bhd, Capital Flagship Sdn Bhd and Kuala Lumpur Pavilion Sdn Bhd at the indicative retail price of 88 sen per unit,” Ho said at the event.

At an indicative retail price of 88 sen, the manager expected Pavilion REIT to provide a distribution yield of 6.41% and 6.51% for the one-month forecast period ending Dec 31, 2011 and the 12-month forecast period ending Dec 31, 2012 respectively.

Ho said the total appraised value of Pavilion REIT's initial property portfolio was about RM3.5bil. With the inclusion of Pavilion Kuala Lumpur Mall, which forms 96.4% of the total appraised value of Pavilion REIT's initial property portfolio, Pavilion REIT would become one of Malaysia's largest listed REITs with the largest exposure to the retail sector of any listed Malaysian REIT by appraised value.

“Based on an indicative retail price of 88 sen, Pavilion REIT is expected to achieve a market capitalisation of RM2.6bil upon listing,” he said, adding that Pavilion REIT remained an attractive option for investors looking for liquid investments in Malaysia's retail and corporate property sector.

On a pro forma basis, he said Pavilion Kuala Lumpur Mall and Pavilion Tower, collectively, achieved revenue of RM291mil and net property income of RM203mil for the financial year ended Dec 31, 2010.

By The Star

DKLS to buy Melbourne property for A$13.3m

KUALA LUMPUR DKLS Industries Bhd has proposed to participate in the acquisition of a property in Melbourne for A$13.3 million (RM42.96 million).

In a filing to Bursa Malaysia yesterday, the company said the property in Bourke Street, Melbourne, comprises an existing building erected on a piece of land measuring 1,162 sq m.

The existing building was completed in 1931 and was utilised as Barristers Chambers.

It comprises five levels plus basement, mezzanine and a rooftop caretakers unit.

There are also two prime Bourke Street shops and six on site car parks.

The gross building area of the existing building is measuring approximately 5,228 sq m in area.

The existing building is currently vacant except for the two Bourke Street shops which have been leased to two separate retail tenancies.

The company said the existing building was ideal for a range of uses such as commercial owner-occupation, strata subdivision, investment or hotel conversion.

"DKLS proposes to refurbish, re-lease and hold the existing building as a central CBD (central business district) office investment. It is also ideally suited to strata subdivision and selling down to barristers, lawyers and other professionals.

"The cost of refurbishment of the existing building is estima-ted at A$3 million (RM9.69 million)."

By Business Times

DKLS buying Aussie property

KUALA LUMPUR: DKLS Industries Bhd has proposed to take part in the acquisition of a property in Melbourne for A$13.3mil (RM43.04mil).

The company told Bursa Malaysia the property in Bourke Street, Melbourne, comprised an existing building on 1,162 sq m.

The existing building was completed in 1931 and was utilised as Barristers Chambers. It comprises five levels plus basement, mezzanine and a rooftop caretakers unit. There are also two prime Bourke Street shops and six on-site car parks.

The gross building area of the existing building measures about 5,228 sq m.

The existing building is now vacant except for the two Bourke Street shops which have been leased to two separate retail tenancies.

DKSL said the existing building was ideal for a range of uses such as commercial owner-occupation, strata subdivision, investment or hotel conversion.

By Bernama

Showcase of Negri properties

Properties worth about RM940mil will be up for grabs at the three-day Negri Sembilan Mapex to be held in Seremban beginning Nov 18.

The event, to be held at Seremban Parade, will be the biggest held to-date and will showcase dwellings priced as low as RM36,000 to a cool RM1.6mil.

State Real Estate and Housing Developers’ Association chairman S. Sivanyanam said 22 developers would be taking part in the event with 2,330 units ranging from single-storey terraces to bungalow lots up for sale.

“We had had to turn away several other developers due to space constraints. Despite this, we are confident that the Mapex will receive an even greater response from buyers this time around,” he told reporters.

Also up for sale at the event themed “Affordable, Accessible, Quality Living” are parcels of commercial land worth between RM729,000 and RM19.1mil, shop offices (RM180,000-RM1.28mil), bungalow lots (RM53,980-RM200,395) and single and double-storey semi-D units (RM260,000-RM1mil).

Among the 2,330 units, 469 are double-storey units, single-strorey terrace (436), double-storey semi-D (269), commercial units (260), shop offices (233), and low and medium-cost apartments (271).

Sivanyanam expressed confidence that more buyers from outside Seremban, particularly the Klang Valley will make a beeline to buy properties in Negri Sembilan during the event due to the much lower land prices.

“Some of the developers will also be offering incentives such as legal and disbursement fee waiver and stamp duty exemption and this will mean substantial savings for the buyers,” he said.

There would also be guaranteed rental returns, cash rebates and discounts, free feng shui consultation amd zero interest during construction of the said property.

Sivanyanam said at the state-level Mapex held from May 20 to 22 this year, 84 units of properties worth RM20.6mil were sold. Then, 1,630 properties worth about RM460mil were showcased.

This time around, a lucky draw of five 32-inch Samsung LED television sets will also be held on Nov 20 for all housebuyers.

All housebuyers who sign the sales and purchase agreement during the three-day Mapex will be entitled to a Touch&Go card worth RM110.

By The Star

Tiger Synergy gains on condo project

Tiger Synergy Bhd, a Malaysian developer, rose to a five-month high in Kuala Lumpur trading after saying it expects to make a RM68 million profit from a condominium project.

Its shares gained 7.4 percent to 14.5 sen at 9:05 a.m. local time, set for their highest close since June 2.

By Bloomberg

Malton to acquire Ulu Kelang land

KUALA LUMPUR: Malton Bhd is acquiring 56.05 acres in Ulu Kelang for RM105mil for a residential project with an estimated gross development value of RM500mil.

The company said in a filing with Bursa Malaysia that its wholly owned subsidiary, Gapadu Harta Sdn Bhd, had entered into a sale and purchase agreement with Ukay Spring Development Sdn Bhd to acquire the land.

The acquisition would be financed by internal funds and/or bank borrowings, said Malton.

By The Star

Pavilion REIT to acquire 3 malls

KUALA LUMPUR: En route to a listing, Pavilion Real Estate Investment Trust (REIT) plans to buy three shopping malls, namely the Fahrenheit88, the extension to Pavilion Kuala Lumpur Mall (Pavilion Mall) and a soon-to-be-developed mall in USJ Subang Jaya, within the next two years.

Pavilion REIT Management Sdn Bhd chief executive officer Philip Ho said this is part of Pavilion's growth strategy as outlined in its prospectus.

"We believe our listing will serve to enhance the growth of our retail and corporate property business. We hope to provide a platform for investors to invest in a REIT that provides a stable distribution income, capital appreciation as well as opportunities to benefit from its future acquisitions of yield-enhancing assets," he said at the launch of Pavilion REIT's prospectus here yesterday.

Speaking to reporters later, Ho said Pavilion plans to acquire Fahrenheit88 by 2013, Pavilion Mall's extension by 2014 and a retail mall in USJ Subang Jaya by 2015.

Currently, Pavilion has secured the right of first refusal (ROFR) for the acquisitions of Fahrenheit88, and the Pavilion Mall extension, both of which are close proximity to Pavilion Mall.

It has also obtained the ROFR for a six-storey retail mall to be developed in Subang Jaya.

With an appraised value of RM3.54 billion, Pavilion REIT is currently made up of two assets - Pavilion Mall and Pavilion Tower.

The mall, which contributes 96.4 per cent to the appraised value, has 1.3 million sq ft of net lettable area, with about 450 retail tenants, making it the largest premium retail fashion mall in Malaysia.

The award-winning mall, which was completed in 2007, is strategically located in Bukit Bintang, Kuala Lumpur.

Meanwhile, Ho said, the Pavilion Tower offers a premium corporate and business address and spans over a net leaseable area of about 167,000 sq ft.

Based on the indicative initial public offering (IPO) price of 88 sen per unit, Pavilion REIT expects to raise some RM695 million, making it one of Malaysia's biggest IPOs for the year.

With an appraised value of RM3.4 billion for Pavilion Mall, Pavilion REIT will also bear the distinction of being the Malaysian REIT with the largest portfolio of retail assets upon listing, slated for December 7.

For its IPO, Pavilion is offering 790 million shares, of which 755 million units will be offered to Malaysian and foreign institutional investors and selected investors at the institutional price, while 265 million units have been earmarked for allocation to six identified investors at an offer price of 90 sen per unit or the institutional price, whichever is lower.

The balance 35 million units will be offered to the general Malaysian public and eligible tenants of Pavilion Mall and Pavilion Tower, among others.

By Business Times