Glomac posts RM21.9m net profit in Q3

HEALTHY GROWTH MOMENTUM: Firm well on track to achieve target sales of RM500m for full year

GLOMAC Bhd registered a net profit of RM21.9 million in its third quarter ended January 31 2012, up 32.7 per cent compared to RM16.5 million in the previous corresponding quarter.

In a statement, the property group said its net profit attributable to shareholders for the first nine months of its financial year rose 32.2 per cent to RM63.5 million from RM48 million achieved in the previous corresponding nine-month period.

This surpassed the company's full-year net profit attributable to owners of the company of RM63 million in its previous financial year ended April 30 2011.

Consequently, Glomac's earnings per share for the nine-month period jumped 34 per cent to 11 sen from 8.2 sen previously, it added.

Glomac has proposed an interim dividend of 2.75 sen per share less 25 per cent tax for the current financial year ending April 30 2012, higher than the 2.25 sen interim dividend paid in the previous financial year.

"We are riding on a healthy growth momentum. Not only have our results continued to excel, we chalked up property sales of RM343 million in this nine-month period, well on track to achieve our target sales of RM500 million for the whole financial year," said Glomac Group executive chairman Tan Sri F.D. Mansor said.

He added that the group's townships are thriving with launches in both Bandar Saujana Utama and Saujana Rawang enjoying good take-up rates.

F.D. Mansor also said that the company's current projects, namely Glomac Cyberjaya 2 and Glomac Centro have also been well received.

Glomac Cyberjaya 2, which has total gross development value (GDV) of RM130 million, was launched in November last year.

Glomac Centro, meanwhile, which will be launched later this month, will have a GDV of RM370 million.

"We are also looking forward to the upcoming launch of our 39-storey Reflection Residences, a freehold serviced apartments project with a GDV of RM270 million in Mutiara Damansara," he said.

F.D. Mansor said Glomac has built up a substantial "war chest", which will allow it to acquire new landbank.

Glomac's balance sheet, as at January 31 2012 stood at RM353.5 million in cash and cash equivalents.

The company recently required two parcels of leasehold land totalling 80ha for RM44 million, adjacent to Bandar Saujana Utama. This would raise its total estimated GDV of current and future projects to RM6 billion.

Meanwhile Bernama reports that Glomac Bhd's sales are expected to pick up in the fourth quarter of the 2012 financial year, with RM640 million worth of new launches by end-March, said Maybank Investment Bank.

In a research note yesterday, it mentioned the launches of Reflection Residences and Glomac Centro shop offices and serviced apartments, both in the Klang Valley.

"We believe projects in good locations such as Reflection Residences will continue to attract buying interest," it said.

Maybank Investment said Glomac has locked in RM343 million worth of property sales in the nine months of financial year 2012 (FY12), meeting only 69 per cent of its FY12 target.

It said Glomac's 2012-14 earnings would be driven by RM418 million in property sales achieved in FY11 and new launches worth RM1.4 billion this financial year.

Maybank Investment has maintained its 'buy' call on Glomac with a target price of 96 sen.

By Business Times

Glomac posts higher profit on property sales

PETALING JAYA: Glomac Bhd posted a higher net profit of RM21.9mil for its third quarter ended Jan 31, 2012, up 32.7% from RM16.5mil recorded in the previous corresponding quarter.

Revenue decreased to RM145.2mil from RM176.5mil previously.

For its nine-months ended Jan 31, 2012, the company achieved a net profit of RM63.5mil, a 32.2% increase, compared with RM48mil previously. Revenue dropped to RM407.9mil from RM443.7mil.

In a statement, Tan Sri Datuk FD Mansor said the company was riding on a healthy growth momentum. Not only have our results continued to excel, we chalked up property sales of RM343mil in this nine-month period.

“We're well on track to achieve our target sales of RM500mil for the whole financial year,” he said.

The group is also preparing for the upcoming launch of its 39-storey Reflection Residences, a freehold serviced apartments project with a gross development value of RM270mil in Mutiara Damansara.

“We have also built up a substantial war chest,' allowing us to seek out opportunities for new landbank acquisition to maintain the growth strategy in our development business.” he said.

The company recently acquired two parcels of leasehold land totaling 80.94ha for RM44mil, which is adjacent to Bandar Saujana Utama.

By The Star

GuocoLand expects 18% yield from PJ City, PJ Corp acquisitions

KUALA LUMPUR: GuocoLand Malaysia Bhd expects a firm yield of 18% from the recent related party transaction to purchase PJ City Development Sdn Bhd and PJ Corporate Park Sdn Bhd from Guoline Asset Sdn Bhd and MPI Holdings Sdn Bhd respectively.

GuocoLand’s shareholders yesterday approved the resolution at an extraordinary general meeting held at Wisma Hong Leong because of the good prospects of these developments given their locations, its senior public relations manager, Leslie Lim, said.

“The company (GuocoLand) expects per annum returns of 18% from these developments and of course this will be dependent on the economic situation as well,” Lim told StarBiz, citing some research documents.

After the approvals, GuocoLand will proceed and buy PJ City for RM29.79mil from Guoline Asset; and will then purchase PJ Corp from MPI Holdings for RM258,000.

These companies house developments which are mainly parked under PJ City, including commercial land of 3 acres which already has existing buildings on them as well as an industrial land of 7.75 acres fronting Jalan 225, PJ.

GuocoLand said it would develop the industrial land for factories after tenancy agreements for the open air carpark and the cement batching plant expires on March 31, 2012.

The purchases of PJ City and PJ Corp would be funded entirely from borrowings which would increase its gearing ratio basing on its shareholders’ funds from 1.13 to 1.20, the shareholder statement said.

The purchase of PJ City also took into consideration the unaudited net tangible assets (UNTA) of PJ City of RM8.77mil as at Oct 31, 2011 and after adjusting for the total market value of the land at RM72.5mil, it said.

“Guoline Asset is a wholly-owned subsidiary of Hong Leong (Co) Malaysia Bhd (HLC) and its original cost of investment in PJ City was RM5mil,” it added.

The purchase of PJ Corp also took into consideration of the UNTA at RM258,375 as at Oct 31, 2011 while there was no valuation had been undertaken on the two units of low-cost houses owned by PJ Corp.

MPI’s original cost of investment in PJ Corp was RM265,000 which was made on May 4, 2011.

By The Star

Perak Corp unit enters joint venture

PETALING JAYA: Perak Corp Bhd subsidiary PCB Development Sdn Bhd has entered into a heads of agreement with Sanderson Project Development (Malaysia) Sdn Bhd (SPDM) for a joint venture to develop and operate an international standard animation theme park, resort hotel and serviced apartments in Ipoh. The project has a gross development value of RM506.7mil.

Perak Corp told Bursa Malaysia yesterday that the intended equity participation in the joint venture shall be 20% to be held by PCB Development and the balance 80% by SPDM.

“SPDM will negotiate with third parties in relation to raising funds for the JV to develop the project,” it said.

PCB Development is the land owner and developer of BioD City at Bandar Meru Raya, Ipoh. BioD City is a master-planned development comprising residential, commercial, retail and leisure precincts.

SPDM is a special-purpose vehicle set up particularly for the project by Sanderson Group Pty Ltd group of companies, which is engaged in the design, construction and operation of international tourist and leisure destinations around the world.

“The rationale of the project is to fulfil the BioD initiative development as well as to complement the developments of BioD City and BioD Eco-Tourism undertaken by the PCB Group to facilitate the national strategic policies providing various conducive environments for optimal economic growth,” Perak Corp said.

The heads of agreement will enable the contracting parties to negotiate on an exclusive basis the formation of the joint venture for the purpose of developing and operating the project.

The joint venture will enter into a turnkey construction contract with SPDM, or a company under the Sanderson Group, to provide turnkey construction services to develop the project which will include the design, fabrication, construction, project management and operations establishment of the project.

By The Star

PCB, Sanderson to cooperate on RM507m project

IPOH: Perak Corp Bhd (PCB) says its unit, PCB Development Sdn Bhd, has teamed up with Sanderson Project Development (Malaysia) Sdn Bhd to develop an animation theme park, resort hotel and serviced apartment here with a gross development value of RM506.7 million.

In a filing to Bursa Malaysia, PCB said a joint venture would be formed between the two partners, with PCBholding a 20 per cent stake and Sanderson Project the balance.

PCB is the developer of BioD city at Bandar Meru Raya here, a key development comprising residential, commercial, retail and leisure precincts. Sanderson Project is a special purpose vehicle set up particularly for the Perak venture by Sanderson Group Pty Ltd.

By Business Times

PNB projected to get more than 5.5% yield from latest London office

PETALING JAYA: Permodalan Nasional Bhd's (PNB) latest and fourth purchase of a London office building is expected to have a yield exceeding 5.5%, a source familiar with the deal said.

PNB is expected to seal the purchase of Woolgate Exchange at 25, Basinghall Street in London by the end of this month, bringing its total investment in UK properties to more than £1bil in a span of four months.

On Thursday, group president and chief executive officer Hamad Kama Piah Che Othman told Bernama that “PNB has changed”.

“In the past, it was shares but now we are looking at real estate which would bring in stable returns,” he said.

Inclusive of its purchase of Santos' Place, in Brisbane, Australia, PNB has spent RM4.9bil on both continents. PNB bought Santos' Place for A$290mil in August 2010. Since then, it seems to have shifted its focus to the prime London.

According to several websites, the principal tenant in Woolgate Exchange is German bank West LB. The lease is until 2020. The next rent review is in three years, in 2015.

According to two London-based websites, the selling price for Woolgate Exchange was set at £290mil (RM1.4bil). The 350,000-sq-ft office building was constructed in 2000 and has an annual rent of more than £7mil.

In 2006, the same property was purchased by Irish property investment group D2 Private for £325mil when British property prices were on an uptrend.

The nine-storey building, which comes with a basement floor, is located within 150 metres of the Bank of England, a salient feature of the property considering that London is famed for its financial centre status.

PNB has attracted the interest of the British property fraternity when it bought a 12-storey office space in Milton & Shire House on 1 Silk Street for £350mil in December.

Earlier this month, it acquired two other properties, 90 High Holborn and One Exchange Square, from German fund manager KanAm for £500mil.

By The Star

Naza TTDI expects RM315m sales at property carnival

SHAH ALAM: Naza TTDI Sdn Bhd, the property development arm of Naza Group of companies, expects to sell RM315 million worth of properties at its first ever property carnival this weekend.

The developer of the RM15 billion KL Metropolis project in Kuala Lumpur will offer buyers several incentives for some of its signature developments in the Klang Valley.

The incentives include attractive rebates and low down payments, in addition to fast loan approval.

Some of the prized properties that will be on offer during the carnival include residential units at TTDI Alam Impian in Shah Alam, TTDI Grove in Kajang and The Valley in Ampang.

For TTDI Alam Impian, Naza TTDI is offering two- and three-storey linked residences in Zircona, linked and super-linked residences in Aquina and linked residences in Sephira.

At TTDI Grove, units available include two-storey link homes in Dhania, Ellenia and Azalia.

The Valley will introduce three-storey linked homes and exclusive villas.

There will also be commercial units for its projects like TTDI Adina in Shah Alam, the second phase of the TTDI Dualis Business Centre in Equine Park, Seri Kembangan, and TTDI Grove Square 1.

Combined, 276 residential and commercial units will be available for sale during the two-day carnival.

The property carnival will be held from March 24 to March 25 at the TTDI Adina Sales Gallery in Section 13, Shah Alam.

By Business Times (by Sharen Kaur)

PNB to buy fourth London property

PERMODALAN Nasional Bhd (PNB) is poised to seal its fourth major property acquisition in London, which will put its overseas spending spree in recent times to well over RM5 billion.

According to its president and group chief executive Tan Sri Hamad Kama Piah Che Othman, the country’s largest fund owner and manager was expected to conclude the deal by the end of the month, “We can’t reveal too much at the moment as it is yet to be completed,” Hamad Kama Piah said after announcing the income distribution of four of PNB’s funds here yesterday.

He said more overseas acquisitions were imminent as PNB looked for “worthy” properties that could yield sustainable income.

“We focused more on equity before this but we are now looking at investing in the property market,” he said, adding that London properties were not only cheap but also offered good prospects.

“The tenants of these office buildings have signed 10-year to 15-year leases. They will notsimply exit,” he said.

Early this month, PNB bought the major London landmark One Exchange Square in the financial district and 90 High Holborn for
?550 million (RM2.67 billion).

The buildings are currently home to the European Bank for
Reconstruction and Development and law firm Olswang Solicitors, respectively.

Earlier this year, PNB snapped up Milton and Shire House in Silk Street for ?350 million (RM1.7 billion).

Hamad Kama Piah said including its property in Brisbane, Australia, PNB had spent about RM4.9 billion on property deals abroad so far.

The property in Brisbane, an upmarket office block called Santos Place, was bought in 2010 for more than A$290 million (RM926
million).

Asked if PNB was eyeing the Europe and United States property markets, he said: “Yes and no. We will reveal when we have something concrete.”

On whether PNB would be buying properties in countries it had offices in, Hamad Kama Piah said that would be a wise decision.

PNB currently has offices in London, Singapore and Tokyo.

By Business Times

PNB, Liew now collectively own 78.9pc stake in SP Setia

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) and Tan Sri Liew Kee Sin now collectively own 78.95 per cent of SP Setia Bhd.

This is after the mandatory general offer (MGO) for SP Setia by PNB and Liew, as joint offerors, closed on March 19 this year.

Therefore, SP Setia will request to Bursa Malaysia for an acceptance of a lower public shareholding spread, PNB and Liew said in a joint statement yesterday.

The aggregate shareholding of PNB and the unit trust funds under its management increased from 32.99 per cent in September 2011 to 70.71 per cent as at March 19, while Liew maintains his 8.24 per cent direct stake in SP Setia.

The MGO was triggered in September last year when PNB and parties acting in concert with it raised their collective stakes to 33.17 per cent, slightly above the 33 per cent threshold for triggering MGOs.

PNB and Liew yesterday reaffirmed their commitment to maintaining SP Setia's listing and stature as the premier property developer on Bursa Malaysia.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman and Liew said they will also work with advisers and SP Setia to explore all possible options to restore its public shareholding spread.

"We are happy that this exercise concluded satisfactorily. We believe that SP Setia will continue to perform well, and be a significant contributor to the investment portfolio of PNB and the unit trust funds under its management, which will benefit our 10.7 million account holders," Hamad Kama said in the statement.

Liew, meanwhile, said that the joint offerers look forward to continuing building on the strong success of SP Setia by strengthening its property sales. "We are confident we will be able to see sustained growth in the remaining quarters of this financial year," he added.

By Business Times

SP Setia posts record-breaking first quarter

SHAH ALAM: SP Setia Bhd yesterday announced a record-breaking quarter with sales at RM933 million for its first quarter ended 31 January.

This was the group's highest ever sales in a single quarter and a 27 per cent increase from its first quarter FY2011 sales.

As at February 29 this year, SP Setia's sales for the first four months of the financial year totalled RM1.23 billion, another new record, and a 29 per cent increase from the corresponding period last year.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said the strong performance indicates that the group is well on target to achieve and deliver its FY2012 sales target of RM4 billion.

By Business Times

Condo buyers want stalled project to be revived

Sad state: The Platinum Damansara Condominium which was left uncompleted.

Frustrated by the delay in reviving the Platinum Damansara Condominium project, about 30 buyers held a protest in Ara Damansara last Tuesday to voice their grievances.

The project, consisting of four blocks of service apartments and a commercial building, stalled in 2007 and the buyers are having a tough time finding interested parties to revive it.

It was once promoted as a high-end service apartment in Damansara but today it is in ruins with squatters taking over the development, posing health and security risks for the surrounding township.

Abandoned Platinum Damansara Condominium Purchasers Association committee member Noel Vong said there were many court cases that delayed the project even further.

“However, last year we managed to get an interested party to revive the project.

“We hired a consultant and scheme manager to draw up a scheme of arrangement with the developer,” he said.

The move was supported by 410 buyers out of 422 who attended a meeting on June 14 last year.

There are a total of 680 buyers.

Vong said the scheme had the support of the bank which provided the finance as well.

“On June 17 last year, the Shah Alam High Court approved the scheme but almost immediately after the decision, several parties filed claims to set aside the scheme.

“After several court hearings a decision was made by the High Court on Nov 30 to set aside the scheme and we were back to square one,” added Vong.

The buyers in turn filed an appeal and the case will be heard on April 5.

A buyer, Paul Adaikalam, said many purchasers had been declared bankrupt as they were are unable to pay the bank loans.

“Each buyer pays an average of RM50 per day in interest and there are so many stories of civil servants losing their jobs, businessmen being blacklisted and pensioners who invested now left without a home,” he added.

Vong said the revival cost had also increased, forcing buyers to fork out an extra 25% for work to be completed.

“It was stated that the project was 80% complete when it stalled but today due to vandalism, the building looks only 30% complete,” he added.

By The Star

IGB retail REIT plans RM700mil IPO

KUALA LUMPUR: IGB Corp Bhd retail real estate investment trust (REIT) aims to raise up to RM700mil from a planned September listing, according to a source, banking on its flagship shopping malls to draw in investors in volatile market conditions.

The initial public offering (IPO) of IGB’s retail REIT will be the fourth largest in the country this year after the planned listings of Felda Global Venture Holdings Bhd, Integrated Healthcare Holdings Bhd and Gas Malaysia Bhd.

“The listing will raise about RM600mil to RM700mil,” the source, who had direct knowledge of the deal, told Reuters.

The source, who did not want to be identified as the details of IPO are not public yet, said the book-building process would start in August or September.

The source added that prime assets such as Mid Valley Megamall and The Gardens Mall would be part of the retail REIT.

The investment arm of Malaysia’s No. 2 lender CIMB Group Holdings Bhd is the lead banker for the deal.

By Reuters

PNB invests RM4.9bil to buy properties in Australia, UK

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) has spent RM4.9 billion to buy properties in Australia and London, said president and chief executive, Tan Sri Hamad Kama Piah Che Othman.

The fund management company owns Santos Place in Brisbane, Australia and three office buildings Milton and Shire House, One Exchange Square and 90 High Holborn in London.

He said PNB was currently in talks to buy another building in London. These talks, he said, were expected to be completed by the end of the month.

Last year, PNB was reported to have said it expected the real estate sector to be one of its core sectors, other than securities, and eyed opportunities to invest in properties not only locally but overseas.

“PNB has changed. In the past it was shares but now we are looking at real estate which would bring in stable returns,” he said at the announcement of the dividend for Amanah Saham Malaysia for financial year ending March 31, 2012 here today.

Hamad Kama Piah said PNB, when it considered buying properties overseas, would look at whether the property would yield sustainable income in the long term.

By Bernama

SP Setia set to launch Fulton Lane’s second tower

KUALA LUMPUR: SP Setia Bhd will soon launch Tower Two of its Fulton Lane development in the heart of Melbourne city's central business district.

In a statement today, the developer said Tower One that was premiered first in Kuala Lumpur in June last year saw strong demand from local buyers and had recorded steady sales with 80 percent of 291 apartment units taken up.

“The new launch of Tower Two offers investors 487 units housed in a 45-storey block,” it said.

Fulton Lane's Tower Two launch takes place at Level 2, Intercontinental Hotel Kuala Lumpur on March 24 and 25.

By Bernama

Abandoned housing project to be sold for RM150m

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) expects to sell an abandoned project it financed in Johor for about RM150 million this year.

"I can't reveal the exact location of the project as we are hoping to hold a tender for it," MBSB president and chief executive officer Datuk Ahmad Zaini Othman told reporters after its signing ceremony with property developer NCT United Development Sdn Bhd yesterday.

MBSB and NCT sealed a RM215 million financing facility to revive the country's largest abandoned housing project.

Ahmad Zaini said the company had received the necessary approval to go ahead with its plans.

When dealing with non-performing loans related to abandoned housing projects, MBSB has the option to either put in more money into the project to revive it, sell off the project to an interested party or go into a joint venture with a developer to develop the property.

MBSB's signing agreement with NCT is an example of extending more money into a project in the hope of recovering some of its initially bad loans.

It is also working on a solution for another one or two of its other abandoned housing projects.

MBSB hopes to reduce its non-performing loans (NPLs) by two to three per cent, closing at between 6.5 and 5.5 per cent this year. The company's net NPLs reduced from 18.9 per cent in 2009 to 8.5 in 2011.

Ahmad Zaini said the lower NPLs will be achieved through MBSB's ongoing loan recovery efforts and its increased focus in turning around loans related to abandoned housing projects.

By Business Times (by Presenna Nambiar)

Biggest abandoned housing project in M'sia to be revived

Ahmad Zaini: ‘This is a big step for us. Hopefully it will be a win-win situation for all.’

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) will finance the builder and buyers of Malaysia’s biggest abandoned housing project, located in Bandar Baru Salak Tinggi, Sepang as part of its efforts to resolve its corporate legacy accounts issue.

MBSB, which is 65.5%-owned by the Employees Provident Fund (EPF), will provide term and bridging finance facilities of up to RM215mil to builder NCT United Development Sdn Bhd (NCT), and an additional RM243mil to the buyers, said MBSB CEO Datuk Ahmad Zaini Othman.

“When the new management (of MBSB) came in in 2009, we wanted to find a way on how we can resolve these legacy problems.

“And one of the ways is to support this project through NCT to revive the project.

“This project have been unresolved for more than 10 years,” Ahmad Zaini said.

“We foresee they’re (the buyers) are going to face problems to secure financing from the banks.

“So we are also putting up another package which is the end financing package to support purchasers.

“We are shifting the corporate risk from NCT to the purchasers,” he added.

Buyers will pay an interest rate of base financing rate minus 0.5%, which is slightly more expensive compared with conventional loans because these borrowers are mostly in their 50s, according to MBSB.

MBSB is also classified as an ‘exempt finance company’ and is thus not bounded by any financial regulators in Malaysia.

“It is only fair and just to do so as they (these borrowers) have honoured their initial obligations but failed to receive their end of the bargain,” Ahmad Zaini said.

After discussions with the purchasers, an agreement was reached to divide them into two classes.

According to NCT, one class of buyers who wish to continue with the purchase will have to top up another 30% to the original purchase price of either RM140,000 (for 20X70) or RM97,000 (for 18x60) units.

These units have seen a price appreciation of about 80% since it was abandoned.

The second group of buyers can get a full refund for their units as construction of their units was minimum.

“This is a big step for us.

“Hopefully it will be a win-win situation for all,” Ahmad Zaini said at the signing ceremony here yesterday, adding that there were two more such abandoned legacy projects that were scheduled to be revived.

“NPL (non performing loans) will not go away unless and until you revive the project,” he said, adding that MBSB’s net NPL stood at 8.5% as at December 2011.

The project, named Taman Kenanga, was abandoned in 1999.

The developer, Kumpulan Sepang Utama Sdn Bhd (KSUSB), is currently in liquidation.

The signing ceremony of the agreement yesteday involved three parties - MBSB, NCT and KSUSB’s liquidators, GTC Corporate Advisory Sdn Bhd.

According to MBSB, the housing project was abandoned due to cost overruns coupled with the “unfavourable economic situation then”.

It will be renamed Sepang Perdana and is expected to be completed within two years, said NCT CEO Zulfikri Saidin.

The project was initially earmarked to have 2,536 units of commercial, linked houses and low cost houses on 110 acres.

By The Star

Retail sector faces rising costs and prudent spending by consumers

PETALING JAYA: The local retail sector is expected to face challenging times this year as consumers continue to be prudent in their spending while retailers have to face rising cost of goods and operation.

DTZ Research's Property Times on Kuala Lumpur's fourth quarter 2011 report said the situation would affect rental rates, occupancy and future rental growth.

Another property consultancy, Knight Frank in its Second Half 2011 Real Estate Highlights report, said with the abundant supply of new suburban retail stock coming on stream in the medium term, “there is a note of caution that this high impending supply may have a detrimental impact on overall occupancy levels.”

Despite a marginal decline in the occupancy rate, Property Times said major developers were still optimistic and went ahead with a number of new retail projects.

The report revealed that new retail projects expected to be completed in the Klang Valley this year included Nu Sentral, Kuala Lumpur, with net lettable area of 700,000 sq ft; The Paradigm, Kelana Jaya (500,000 sq ft), Setia Alam Mall, Shah Alam (700,000 sq ft); and KL International Airport 2 (350,000 sq ft).

Those slated for completion in 2013 include IOI City Mall Putrajaya, Putrajaya (1.3 million sq ft); Sunway Velocity, Kuala Lumpur (800,000 sq ft); and The Strand Mall, Kota Damansara (300,000 sq ft).

Other future projects comprise the extension project of Suria KLCC by KLCC Property Holdings Bhd comprising a new 300,000 sq ft retail mall that will be integrated to the mall. Suria KLCC recently saw an extension of 140,000 sq ft in net lettable area.

The Naza group will also be developing two retail centres with over two million sq ft of retail space which will be part of its RM15bil KL Metropolis development at Jalan Duta.

Meanwhile, Pavilion REIT plans to add another 300,000 sq ft to its existing Pavilion shopping mall in Kuala Lumpur.

Property Times said one of the latest retail mall opening was that of KL Festival City Mall with approximately 450,000 sq ft of retail space that was completed in the fourth quarter of last year.

“With the completion of the mall and six others in the previous quarters, the retail stock in Kuala Lumpur now stands at 23.7 million sq ft, an increase of 7.4% from the preceding year,” the report said.

“Outside of Kuala Lumpur, the total stock in the rest of the Klang Valley stands at 22.5 million sq ft, a 3.7% increase from the previous year.”

It said during the period under review, retail centres in Kuala Lumpur recorded a slight decrease in average occupancy rate by 0.3 percentage point on a quarter-on-quarter basis and 1.3 percentage points to 90.7% on year-on-year basis.

Meanwhile, retail centres outside of Kuala Lumpur saw a decline of 1.1 percentage points quarter-on-quarter and 0.1 percentage point year-on-year in occupancy rate to 86.9%.

The decline was largely due to slow leasing rate in the newly-completed centres, it added.

The Knight Frank report said the three new shopping centres expected to open during the first half of this year Setia Walk in Puchong; Setia City Mall in Shah Alam; and Paradigm Mall in Petaling Jaya would add another 1.7 million sq ft to the existing retail stock in the Klang Valley.

During the second half year of 2011, there were eight retail property completions that added a total of 2.88 million sq ft of space to the market.

“The total cumulative figure for existing supply of retail space in the Klang Valley now stands at approximately 43 million sq ft,” the report added.

The new completions were that of Publika Mall @ Solaris Dutamas, 1 Shamelin, Kenanga Wholesale City, Southgate, Mines 2, KL Festival City, First Subang and Space U8.

There was one closure recorded during the period, namely Atria Shopping Centre, in Damansara Jaya. The 29-year-old mall, owned by OSK Property Holdings Bhd, will be redeveloped over four years into a new 450,000 sq ft mall and two 16-storey towers of SoFo Suites.

By The Star

Deadline for BRDB move

BRDB said in November last year that it was postponing the tender exercise for the Bangsar Shopping Centre and three other properties.

PETALING JAYA: Bandar Raya Developments Bhd (BRDB) has until the end of the month to say whether it is going ahead with the proposed sale of four of its properties or risk a query from the stock exchange, according to sources.

The Klang Valley-based developer had said in an announcement to Bursa Malaysia on Nov 22, 2011 that it was postponing the tender exercise for the properties Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall to the first quarter of this year.

Since no subsequent announcements were made about the tender, the company has to provide an update to investors by end-March, as per its own deadline.

In the November filing, BRDB had also stated that Ambang Sehati Sdn Bhd, its second largest shareholder, could raise its stake in the company, an exercise that may or may not result in a general offer.

Ambang Sehati, which has a 18.9% stake in BRDB, was the party that first proposed to acquire the four assets in a related-party transaction for RM914mil, before stiff opposition from minority shareholders forced the BRDB board to opt for an open tender instead.

Ambang Sehati is the private investment vehicle of Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, BRDB's chairman.

However, what may be of more interest is the identity of the owner or owners behind a 23.6% block of shares in BRDB held in an omnibus account by Credit Suisse.

The ownership of this stake is crucial, the Minority Shareholder Watchdog Group has pointed out, as it could be the deciding factor in whether the proposed sale gets the green light from shareholders.

This is on the basis that the 23.6% block amounts to 30% of total disinterested shareholders of BRDB, and in turn may comprise 50% of the votes of shareholders who actually turn up to vote on the matter. The sale would only require a simple majority to be passed.

Under Section 69(0)(8) of the Companies Act, Bursa Malaysia and the Securities Commission (SC) have the power to direct companies to disclose the identity of the beneficial owners of substantial blocks of shares in the company.

The act also empowers the affected issuer itself, in this case BRDB, to request for details on the beneficial owners from a trustee, in this case Credit Suisse.

Be that as it may, sources told StarBiz that BRDB might have hit a wall in trying to determine the owner of the block of shares.

One of the sources, who requested anonymity because of the sensitivity of the matter, said this was because the block was held in offshore accounts by Credit Suisse's Singaporean and Swiss associates, whose banking secrecy laws prevented the disclosure of information on account holders.

A BRDB spokesman also confirmed in an email to StarBiz that the company had done its part to ascertain the owner of the block of shares but cannot probe further due to the legal limitations.

Nonetheless, there would be no need to complete the task if the proposed sale falls through, which is the likely scenario, a source added.

BRDB had also said last year it would appoint an independent valuer to evaluate its assets for the proposed sale, but it has yet to make another announcement regarding this.

Ambang Sehati had originally proposed to acquire the four assets to enable BRDB to “monetise these assets and achieve a more efficient utilisation of its capital", adding that the latter's shares have been trading at a significant discount to its net asset value.

BRDB shares closed four sen higher last Friday at RM2.34, which was a 36.4% discount to its net assets per share of RM3.68 as at Dec 31, 2011.

For its financial year ended Dec 31, 2011, the developer achieved a 20.8% increase in revenue to RM191.66mil from RM158.63mil in the previous corresponding period, and RM38.6mil in net profit, up 50.2% from RM25.71mil previously.

By The Star

PKNS to inject some assets into REIT

SHAH ALAM: The Selangor State Development Corp (PKNS), a diversified group, will be injecting some of its existing assets worth around RM900 million into a private real estate company (PREC).

The private real estate company is being set up by PKNS to acquire new and existing assets of the corporation, in a bid to streamline its operations, reduce cost and improve the performance.

PKNS general manager Othman Omar said the first round of asset injection will involve its existing properties in Kuala Lumpur and Selangor, which will be carried out in phases.

The properties are Menara Worldwide and Wisma Yakin in Kuala Lumpur; Menara PKNS in Petaling Jaya; Kompleks PKNS in Shah Alam, Bangi and Kuala Selangor; De Palma Hotels in Ampang, Shah Alam, Kuala Selangor and Sepang; as well as SACC Mall and the Shah Alam Convention Centre.

"PREC will upgrade and transform these properties into better yielding assets for higher recurring income.

We may inject some of the new and existing properties into a real estate investment trust (REIT) in the next few years to benefit from the REIT tax incentives.

"There is no real pressure for us to go into a REIT yet. We will weigh the benefits before embarking on a REIT," Othman told Business Times.

Business Times first reported that PKNS planned to launch a REIT in 2010. It had identified 16 high-profile projects worth RM10 billion for injection into its REIT.

Othman said PREC will also acquire the retail, office and hotel components within PKNS' new development projects.

By Business Times (by Sharen Kaur)

Sale of Seremban Parade not done deal

SEREMBAN: THE Seremban Parade has not been sold.

Last June, tycoon Li Ka-Shing's Cheung Kong Group had emerged as the winning bidder of the three shopping complexes put up for sale by TMW Asia Property Fund.

The sale of the other two shopping complexes - Klang Parade in Selangor and Ipoh Parade in Perak - have been completed.

Together, all three malls were reported to have been sold for an estimated RM450 million.

According to sources, the sale of the Seremban Parade to ARA Asia Dragon Fund, an affiliate of Cheung Kong, was not completed as certain conditions were not met.

It is unclear what the price tag is for Seremban Parade, which is reported to have a net lettable area of 316,847 sq ft sitting on 1.97ha land.

The German-based TMW had acquired the three assets in 2005 from the Lion Group for RM340 million.

TMW is managed by Pramerica, the real estate investment management business of Prudential Inc from the United States.

It would be safe to assume that as a fund, TMW would want to make money from the investment it made seven years ago.

Pramerica's other retail properties in Malaysia include Kinta City Shopping Centre in Perak, Island Plaza and 1Avenue in Penang and SSTwo Mall in Selangor.

By Business Times (by Vasantha Ganesan)