Relative returns by asset class - Outlook of REITs market in 2008

The spectacular performance by REITs from 2000-2006 was largely due to the property boom in the US. The property boom was largely ignited by the “invention” of REITs itself. The availability of REIT allowed many commercial property owners to unlock cash from their long-term hold type asset.

(Refer to table) The table clearly depicts the shifts in performance of different asset class. It is a very useful table to decipher the macro developments and how capital is being allocated to chase after various asset classes.

The unlocking of cash also helped charge up the rise and rise of private equity and hedge funds (where most of these excess cash went to). This is the absolute rate of returns year by year for REITs – 2000-31%; 2001-12%; 2002-3.6%; 2003-36%; 2004-33%; 2005-14%; 2006-36% and 2007-17%. Needless to say and it continues to unravel even now, the sub prime mess and the beginning of the property correction in the US contributed to the negative 17% returns for 2007.

Safe to say that there may be quite some distance to go for the excesses to be unwound from the US property market after such a prolonged run. With that, 2008 is expected to post negative returns as well.

Run on commodities

Commodities had a wonderful run with the exception in 2001. The continued weakening of the USD coupled with the new middle class emerging in BRIC (Brazil, Russia, India and China) countries will ensure a more sustained run for commodities. The bull cycle does not appear to be over by any means.

Emerging markets (including Malaysia) were still reeling from the liquidity contraction and correction from the excesses of the 90s from 2000 to 2002 (2000: -32%; 2001: -4.7%; 2002: -8%). However, the last four years were boom time Charlie days for emerging markets (2003: 51%; 2004: 22%; 2005: 30%; 2006: 29%; 2007: 36%). Naturally, if a single emerging market were to post those kinds of returns, we will be looking at a ridiculous compounded growth rate. Though the returns were explosive for emerging markets, there were a lot more rotational plays among them.

Malaysia only got into the groove in 2005-2007 after being largely ignored in 2003-2004. Colombia, China and India were the stars for the last 4 years.

Going forward, we may see investors drifting to Vietnam and some smaller African markets. What is important to note is that despite the massive rotational plays, most emerging markets managed to keep most of their gains even when they were not among the top performers year in year out.

Foreign (non-US) developed markets stocks also shared a similar pattern with emerging markets, in that they posted negative returns from 2000-2003 (2000: -14%; 2001: -21%; 2003: -16%). They posted above average returns from 2004-2007 as they basically obtained great impetus from the enlarged outsourcing into BRIC countries, which helped establish companies to save enormous costs: at the same time the rise of BRIC inhabitants as a new consumption middle class provided plenty of opportunities for all concerned.

It created a wonderful win-win situation and a real positive from the globalisation perspective. It also brought about a high correlation between developed and emerging markets. Save to say, the trend is likely to continue into 2008. Owing to higher volatility, the emerging markets as an asset class usually outperform the developed markets during bullish phases.

Investing paradigm shift

US stocks have largely underperformed the foreign developed markets from 2003-2007 (Foreign/US 2003: 38%/31%; 2004: 20%/12%; 2005: 13%/6%; 2006: 26%/15%; 2007: 11%/5%). This can be explained by the complete shift in investing paradigm and global economics.

One can say that while the US may still be retaining global business leadership, it has had to share out a lot more “equity/economic power” to other developed markets and emerging markets over the last 5 years.

The various bonds asset class' performance over the last 5 years was largely due to the shifts in global currencies realignment. Non-US bonds outperformed US bonds significantly. Can we use the relative returns table to predict 2008 and beyond? Maybe with some confidence for 2008, but beyond that would be difficult as there are too many uncertainties to make any calls with assurance. Emerging markets posted strong returns of 29% and 36% for 2006 and 2007 respectively.

While the economic structure has changed sufficiently to provide a stronger framework for emerging markets going forward, it is unlikely to reap similar returns in 2008. It will be a lot tougher for emerging markets as a whole to end the year on a positive note, not least due to the inflation factor, the weakness in US and the commodities price outlook.

Whither 2008?

REITs is an easy call. As an asset class, it would probably record negative returns in 2008. Of course foreign REITs may experience better returns owing to better fundamentals. However, the sheer size of US REITs is likely to skew the curve.

US stocks will continue to under perform foreign developed markets in 2008 as its returns are now weighted as a significant percentage of foreign markets vibrancy. Owing to the uncertain domestic economy, the US stock markets is likely to stand in the shadows of foreign developed markets in 2008 and even 2009, but that may not be a bad thing.

The best performing asset class for 2008, based on the demand and supply factor, is likely to be commodities (it is not easy to simply increase supply by ramping up production).

The time lag is still in favour of sellers. For example, oil. World consumption will rise to 87.8 million barrels a day this year, 2.1 million more than last year, or about the amount that Nigeria supplies. Demand from China alone will rise 5.7% to 8 million barrels a day as imports expand to support an economy that is likely to grow 10.5% in 2008.

Oil suppliers are straining to increase production. Brazil's Tupi field, the second largest find of the past 20 years, is more than eight kilometres below the ocean surface and will take at least five years to develop. Mexico's state oil monopoly, Petroleos Mexicanos, suffered a three-year 40% decline at its Cantarell field, the world's third largest. Since December 2005, fighting in Nigeria has reduced production 11% to 2.18 million barrels a day.

It's the same for agriculture products. According to Bloomberg, agriculture products were among the best performing commodities for the past 13 months where palm oil has gained 56%, soybean 75% and soybean oil 62%.

Of reality and fairy tale

Once upon a time, the world was an island with a million inhabitants and resources to feed and supply a million people. Suddenly, 300,000 new inhabitants came to the island from nowhere, who were willing to work for a lot less and produce at a higher rate. The 1 million inhabitants enjoyed cost savings and a better life style. Suppliers ramped up production for everything to meet the new demand that arose from the additional 300,000 consumers. Prices rose to rebalance the equation. The council of advisors decided to print more money into the system bringing about simmering inflationary pressures.

The present economic reality is akin to the fairy tale. The commodities upcycle this time may not be all hot air or even just cyclical in nature. Demographics and consumption patterns have changed, owing to globalisation. But how sure are we that this shift will result in a fairy tale outcome a few years down the yellow brick road?

The scourge of inflation

The one big danger which could rein in equity returns in 2008 is inflation. Food prices are 18% higher in China from a year ago, and Beijing fears that runaway inflation could ignite social unrest.

The price of pork, which forms the core of most Chinese diets, was up a staggering 56%. China has become a victim of its own phenomenal success. China's economy expanded at a blistering 11.5% last year, but was plagued with a 7% inflation rate, largely linked to the country's voracious appetite for global commodities. Even with a more subdued growth rate in 2008 of around 10%, the inflationary pressures will take a lot longer to work off.

In the US, producer prices were 7.7% higher in November from a year ago, the highest in 34 years. Consumer prices rose at an annual rate of 4.2% through the first 11-months of 2007, the highest in 17 years due to soaring food and energy prices. The same scene can be replayed in almost all countries, especially in emerging markets.

Having said that, such factors serve to fuel the commodities upcycle.

The sub prime fallout has started a more widespread correction in real estate, and may crimp consumption in the US. In Britain, a similar pattern, albeit less severe, is being played out. The danger is clear as many emerging markets still rely on the US for their exports. A pullback will keep most emerging markets' run up in check in 2008.

The pendulum

The pendulum has swung. Now, emerging markets will have to contend with strong local currency, enlarged capacities, inflationary pressures, higher prices, demanding valuations plus a weakening US economy. The US economy have settled for low growth, some inflation, weak USD (to make their assets more attractive): thus shielding themselves somewhat from excessive money supply growth repercussions, now unwinding right before our very eyes.

The US still have to contend with sliding house prices, a decline in consumer spending, rising credit costs, and a significant slowdown; lowering interest rates may not provide that big a help.

In other words, it’s going to be a difficult 2008.

S Dali is a pseudonym. He is an ex- analyst/fund manager and active blogger. (malaysiafinance.blogspot.com) who says he is too young, too old, too sarcastic, too dark, too funny, too charismatic, too poor, too Cantonese, too Malaysian, too frank, ... too bad.

For perspective, this piece was written on Sunday prior to the correction across most major markets over the week

Investment Scents post by The Star - (by S.Dali)

Glomac buys land in Cyberjaya Flagship Zone

KUALA LUMPUR: Glomac Bhd subsidiary Glomac Jaya Sdn Bhd is buying a 3.29-hectare parcel of freehold land, which forms part of Cyberjaya Flagship Zone, in Sepang for RM21.24 million.

In a statement yesterday, Glomac said Glomac Jaya had signed a sale and purchase agreement on Jan 18 with the land owner, Cyberview Sdn Bhd, and the developer, Setia Haruman Sdn Bhd, for the proposed acquisition.

Glomac said it would finance the acquisition via internal funds and bank borrowings. It said the lot had immediate development potential due to its strategic location in the Cyberjaya Enterprise Zone.

“Fronting the main road, the lot shares its neighbourhood with other prestigious buildings such as HSBC, IBM, DHL, BMW, Ericsson, NTT, Fujitsu and MDeC HQ.

“It is situated within a stone’s throw away from the Multimedia University and is adjacent to Putrajaya. The surrounding area is a popular address for international IT companies and local MSC status companies,” it said.

By The EDGE MALAYSIA

6th quarterly distribution for ING Global Real Estate

KUALA LUMPUR: ING Funds Bhd (ING Funds) has declared another 0.5 sen income distribution for its ING Global Real Estate fund for the quarter ended December, 2007, the sixth quarterly income distribution.

In a statement yesterday, ING Funds said the distribution represented a yield of 1% based on the par value of 50 sen.
The fund has given out a total of 3.5 sen since its launch in July 2006, representing a 7% yield.

ING Funds chief executive officer Steve Ong said: “Although banks and mortgage companies in the global financial sector have cut their dividends, we continue to deliver our annual target of 4-5% distribution yield for the fund.”

Registered unitholders as at Jan 21, 2008 are entitled to the distribution. Those who opted for reinvestment of distribution had their units credited into their account yesterday.

By The EDGE MALAYSIA

Yeoh Tiong Lay conferred award by Emperor of Japan

KUALA LUMPUR: Prominent business and corporate figure Tan Sri Dr Yeoh Tiong Lay has been bestowed with the Order of the Rising Sun, Goldrays with Neck Ribbon by the Emperor of Japan in recognition for its efforts in promoting economic cooperation between Malaysia and Japan.

Yeoh is a well-known business figure and prominent leader in the Malaysian and regional construction industry, said Japan’s Ambassador to Malaysia Masahiko Horie at a ceremony to bestow the award last Friday.

Masahiko Horie presenting the award to Tan Sri Dr Yeoh Tiong Lay. - Bernama

He also described Yeoh as a very humble and generous philanthropist, tireless in his effort to contribute to the good causes of society.

Yeoh is the founder of YTL group, which was the first Malaysian company to be listed in the Tokyo Stock Market in 1996, thus inviting Japanese investors not only to YTL, but indirectly exposing them to other Malaysian companies listed on Bursa Malaysia.

Yeoh is also an active member of the Malaysia Japan Economic Association.

By Bernama

TTDI selling tower to Felda

KUALA LUMPUR: TTDI Development Sdn Bhd (a member of the Naza group) will sell a 50-storey office tower to the Federal Land Development Authority (Felda) for RM640.7mil.

The proposed tower to be called Menara Felda is the tallest of seven iconic towers in TTDI Development’s RM3.5bil Platinum Park, a world-class high-end integrated residential and commercial development in the prestigious Kuala Lumpur City Centre (KLCC).

Deputy Prime Minister Datuk Seri Najib Tun Razak, who will perform the ground-breaking ceremony at the project site at the corner of Jalan Stonor and Jalan Kuda today, will also witness the signing of an agreement between TTDI Development and Felda on Menara Felda.

From left: Datuk Johan Ariffin, Naza group chairman and CEO Tan Sri S.M. Nasimuddin S. M Amin and Hud Abu Bakar, the project's architect and principal of RSP Akitek

Menara Felda will have a nett lettable area of 689,000 sq ft and a floor plate of 15,000 sq ft. It will have, among others, a large banquet hall that can seat 1,500 people at the basement level.

Platinum Park, sited on a 3.68ha freehold land, is surrounded by new high-end condominiums like The Avare, Binjai, Stonor Park and Suria Stonor.

It will be the biggest luxury development to be undertaken by a bumiputra company in the vicinity of the Petronas Twin Towers and Suria KLCC shopping centre.

Platinum Park comprises three high-end condos with a total of 287 units, three Grade A office towers and a five-star serviced apartment tower.

Set within a lush landscaped “haven with a city” concept around a RM20mil, private 1.5-acre park, the project offers residents a chance to live, work and play within an exclusive domain.

A “necklace” of niche lifestyle retail offerings will complement this one-of-its kind development in the capital. The outlets will feature products and services of international appeal never before seen in Kuala Lumpur.

The super condominiums will be priced from about RM2,000 to RM2,500 per sq ft with sizes ranging from 2,200 to 5,500 sq ft and penthouses of 8,000 to 13,000 sq ft. There will be a 30-storey condominium tower with 123 units and two 42-storey condominium towers with a total 164 units. The first condominium block would be launched later this year or early next year.

Platinum Park will be developed in five phases over the next eight years.

TTDI Development group managing director Datuk Johan Ariffin said that besides its prime location, Platinum Park’s other unique selling points were its size and concept.

Apart from KLCC, there were no other developments either within or on the fringes of the KLCC with the size of Platinum Park, he said at the project's media preview yesterday.

“This size (3.68ha) gives us the opportunity to create something iconic. We were able to put together 10 bungalow lots over the past four to five years and create a seamlessly integrated development of seven towers.

”Current condominium developments in the KLCC area all comprise either one or two blocks. Ours is the only one that has an integrated concept.

”What Hyde Park is to London park-front apartments and Central Park is to New York condominiums, so it shall be with our Platinum Park properties. The potential is tremendous,” Johan said.

By The Star (by S.C. Cheah)

SDB set to make its mark on Batu Ferringi

PETALING JAYA: In its maiden venture into Penang, Selangor Dredging Bhd (SDB) is looking to develop boutique serviced apartments along the tourist belt of Batu Ferringi, Penang said SDB
managing director Teh Lip Kim (pix).

“We may look into boutique serviced apartments and villas complimented by hotel and resort facilities, but this depends on what we find is best suited for the land. This is the last parcel of land on this stretch that has Batu Feringgi beach frontage, thus it has excellent potential,” said Teh.

Teh added that Batu Feringgi is popular with locals and foreigners and the purchase matches the company’s strategy of obtaining land in locations that will add value for future developments.

SDB, through its wholly-owned subsidiary Crescent Consortium Sdn Bhd had recently entered into a sale and purchase agreement with Alpine Accord Sdn Bhd to acquire three freehold parcels of land measuring a total of 4.7-acres for RM24.5 million or about RM120 psf.

The three parcels are situated on Batu Feringgi, with Jalan Batu Feringgi on one side and the Batu Feringgi beach on the other. It is also between two hotels — the Grand Plaza Parkroyal Penang and Bayview Beach Resort. Work on the land is slated to commence mid-2009 onwards.

On the purchase price, Henry Butcher Malaysia (Penang) chief executive officer Lim Ewe Tatt said it was a fair one. “SDB would have to build a highend development on the site to be able to recover the purchase cost. A highquality product with the right concept, preferably landed, would fare well.

However, supply for upmarket properties has been constant in that area, so there might be a need to look abroad for purchasers,” Lim told theSun.

ED Bid Properties Sdn Bhd executive director Edward Eow agreed, saying that the land was acquired at a reasonable price as a nearby plot of 32,000 sq ft was sold at RM150 psf. “SDB’s land is in a prime location with beach and mainroad frontage. It would be suitable for something tourism-related,” Eow said.

SDB started off as a tin mining company and is now focused on property activities such as property management and leasing, hotel and property development.

By theSun (by Allison Lee)

First Residence planned for Kepong Baru

SPECIALIST contractor-turned-developer TSI Holdings Sdn Bhd is planning to launch a mixed development called First Residence in Kepong Baru by the middle of this year.

Located along the 6th mile, the shop-cum-apartment project sits on a 10-acre leasehold site that was formerly gazetted as an industrial site. According to the developer, the site has since been converted for the relevant use by the landowner. TSI purchased it in 2000.

Its group managing director Lim Seng Kok, told PropertyPlus that First Residence will be developed over two phases. In all the project will offer 1,098 apartments, 58 shops and150,000 sq ft of commercial space.

An artist's impression of First Residence

Phase one will comprise 474 apartments and 58 shops, with a gross development value of M130 million.

Of the apartments in phase one, the developer plans to launch 237 units housed within one block first. A standard 3-bedroom, 2-bathroom unit has a built-up of 1,000 sq ft and the average price is planned to be from RM190 psf.

Each unit will come with at least one parking bay while additional bays will be sold. The maintenance fee, inclusive of contribution to the sinking fund, is expected to be between 15 and 18 sen psf.

Targeting young families with a monthly household income of between RM5,000 and RM6,000, Lim admitted that its price point is on the premium end for its medium high end target market.

Lim: We also have reputable property management companies to manage them

“Apart from offering high-quality finishes as well as facilities in our projects, we also have reputable property management companies to manage them,” he said, adding that the project will be under the purview of the Housing Development (Control and Licensing) Act.

The developer will also be constructing a 66ft road that will link its project, Segambut and Jinjang directly to Petaling Jaya via the LDP highway.

Meanwhile, the project also offers a total of 58 shops that are located on the first two levels of the twin 16-storey project. These were launched last year and are 50% sold.

With 29 units of shops on each level, those on the ground floor, with a standard lot size of 1,400 sq ft, are priced from RM680,000, or an average of RM450 psf. The 980 sq ft units on the first floor are priced from RM260,000 or an average of RM250 psf.

There is also the option to purchase the shops on an enbloc basis, said Lim, adding that all the walk-up shops front the main road.

The construction of the first phase, which will take three years, will begin in the first half of this year and the developer will be putting up a show unit. There will be more than 800 parking bays and amenities include a multipurpose hall, pools and landscaped areas.

Expressing his confidence in First Residence, Lim felt that there is demand for such an offering in Kepong Baru.

“Based on our past experience with D’Alamanda in Cheras, we launched it in October 2004 and received an overwhelming response through our purchasers’ word-ofmouth advertising. Many of them are also repeat buyers despite our premium prices,” he said.

Located on a 4.4-acre leasehold site in Cheras’ 2nd mile, the first phase of the RM180 million D’Alamanda comprises a 22-storey serviced condominium with 50 shops and 390 residences, which were handed over last September.

The second phase, to be completed by mid next year, was launched in October 2006 and comprises 67 shops and 320 condominiums.

On the second phase of First Residence, Lim said, “The launch of phase two units will depend largely on the sales of the first phase… we will launch phase two units at a pace that the market can absorb. We also want our early purchasers to benefit so that they can enjoy some capital appreciation.”

By theSun (by Loo Pik Kwan)

Spectacular Twins set to rise in Damansara Heights

An artist's impression of the Twins at Damansara Heights

PETALING JAYA: The luxury high-rise residences of Twins at Damansara Heights have chalked-up an additional take-up rate of 20% since its launch earlier this month, bringing the project’s overall sales to 70%, said Eric Ooi, managing director of Knight Frank Malaysia, the development’s exclusive marketing agent.

The project is being developed by four established property players, Malaysia’s Lion group, the real estate investment arm of American International Group Inc, Singapore-based Koh Maju, and Heeton Holdings Ltd through a joint-venture company known as Panareno Sdn Bhd.

The 2.17-acre, freehold Twins at Damansara Heights fronts Jalan Damanlela and is adjacent to Jalan Johar in the Damansara Heights area. The development offers 318 units of residential suites housed in twin 36-storey blocks with a gross development value of approximately RM420 million.

There are seven unit types, with sizes for standard units from 766 to 2,078 sq ft and the penthouse suites from 2,171 to 5,261 sq ft. Prices are at an average of RM860 psf.

Facilities include two sky gymnasiums, an exercise studio, swimming pool, landscaped gardens and home security systems.

“The unique selling feature for this project is the sky gymnasiums located on the rooftop. Although this type of space is expensive, the developer chose to offer buyers this feature as they knew that gymnasiums are fast becoming the favourite facility in developments,” said Ooi.

Buyers can expect quality finishes of teak timber strips for the bedrooms, imported marble for the living, dining areas and master bathrooms and as well as a modern kitchen complete with builtin cabinets, fittings, and selected electrical appliances.

The project’s façade is a fusion of glass and metal from the concept architect — Singapore’s Axis Architects Planners.

The local architect is Veritas Architects. Clouston Design, whose projects include Sierramas Resorts Homes, Suria Stonor and Putrajaya Waterfront, has been appointed as the landscape architect.

Twins at Damansara Heights is slated for completion end-2010. It is accessible via Jalan Damansara, Jalan Maarof, Jalan Semantan and the Sprint Highway. For details, call Knight Frank at 03-20951199.

By theSun (by Allison Lee)

More projects in the pipeline

Bandar Raya Development Bhd's high-end project, The Troika in the KLCC area

The Malaysian property market fared well last year with many new developments reporting good take-up rates despite the looming shadow of further spikes in crude oil prices.

As usual, the centre of activities was in the Klang Valley where developers are grabbing a piece of the action in the very hot KLCC area, where prices have spiralled beyond RM2,000 per sq ft.

This “KLCC fever” appears to be buoyed by rising foreign interest in our high-end condominiums which are cheaper than similar properties in Hong Kong, China, Singapore, Japan and even Vietnam.

As the momentum to build more condominiums and serviced apartments in the KLCC area picks up, prices have ballooned to unbelievable levels.

The main perception, especially by foreigners, is that the KLCC address is the most prestigious in Malaysia; and if any price record is to be broken, this is the place.

Developers are still upbeat on the prospects of the high-end property market this year, and this can be seen by the many new launches at the end of last year and this year.

Recently there have been several pieces of good news to welcome in the New Year.

One of them was the en bloc sale of Bandar Raya Developments Bhd’s (BRDB) Office Tower 2 at its CapSquare development in Kuala Lumpur to Union Investment Real Estate Aktiengesellschaft (UIRE) for RM439.3mil.

Barely a week later, it was reported that YNH Property Bhd was finalising the sale of the proposed 45-storey iconic Menara YNH at Jalan Sultan Ismail in Kuala Lumpur for RM1.5bil.

It is understood that investors from Australia, Singapore and a Middle Eastern country might form a consortium to purchase the building that is scheduled for completion in 2012.

Menara YNH, located on three acres next to the Shangri-La Hotel, will have an office block and a retail centre.

According to industry sources, several more such en bloc acquisitions are on the cards. In fact, a major en bloc sale of a yet-to-be-built 50-storey office tower in the KLCC area will be announced tomorrow.

This high confidence level in the Malaysian economy and the property market will encourage our developers to launch more developments this year.

Meanwhile, the recent news report of work commencing on the RM2.7bil Lido Boulevard waterfront project within the Iskandar Development Region (IDR) after the Chinese New Year has provided fresh impetus for investors and local developers to zoom into the IDR.

Good sales continue to spill over to this year.

For example, YTL Land & Development Bhd’s latest edition of boutique offices, d6, achieved a remarkable 90% sale in just one day of weekend preview recently.

YTL Land executive director Datuk Yeoh Seok Kian said businesses these days realised that of equal importance to having a reputable address was being associated with a new genre of offices that have their own unique offerings.

What about talks of a possible economic downturn as a result of high oil prices and recession in the United States?

I have observed a few things that may serve as a “shield” as far as our property market is concerned.

Our property developers are more careful and savvy these days compared to before the 1997 crash.

They no longer buy huge parcels of land and do not borrow heavily.

Most of them develop niche products that have real demand and are high in value but more manageable. The days of single mega developments undertaken by single developers are almost extinct.

Yes, there is a RM4bil integrated mega development to be launched soon in Kuala Lumpur, but it is in a very prime location and being undertaken by a very reputable developer, unlike far-flung mega projects in secondary locations a decade ago.

Even if there is a major economic slowdown, most developers have the holding power to ride out the storm and re-launch their projects.

In addition, more and more developers are going abroad to seek out new projects partly as an alternative income stream but also as a hedge against any downturn.

Of course, if there is widespread unemployment, high inflation (especially an increase in the prices of building materials) and slackening demand, everyone will be hurt one way or another.

However, the impact may not be as acute as before.

As one CEO told me, with China and India as the emerging economic powerhouse and the weakening US dollar, there will be less impact from any fallout in the US economy.

By The Star (by S.C.Cheah)

Foreigners more interested in REITs

Local investors are slow to invest in Malaysian REITs, unlike some foreign institutional investors who are grabbing selective stocks that they deem are undervalued.

SINCE the listing of the first real estate investment trust (REIT), Axis REIT, in August 2005, Malaysian REITs have grown steadily. An increasing number of REITs of different asset classes are being listed on Bursa Malaysia each year.

Foreign institutional investors who have not seriously considered Malaysia as a preferred investment destination for REITs are now taking a second look at this option.

The sudden attraction may stem from Malaysia's robust economy and a strong interest in properties from local and foreign buyers, with several en bloc sales of residential and commercial properties over the past two years.

Greater foreign interest in Malaysian REITs is buoyed by the strong infrastructure development occurring in major cities across the country, especially in the Klang Valley and the Iskandar Development Region in Johor.

Their interest would be further stoked by the acceleration of the Ninth Malaysia Plan projects across the nation. Foreign institutional investors also view Malaysian REITs as undervalued.

Kurnia Insurans Bhd chief investment officer Pankaj Kumar, who manages funds of about US$460mil, said foreign institutions were generally keener than locals to invest in Malaysian REITs, despite its infancy and the asset size of local REITS.

Pankaj Kumar

“Malaysian REITs may be small compared with REITs in mature economies that are worth billions, but foreign investors are still willing to invest. One of the reasons is that they are more familiar and knowledgeable about REITs,” he told StarBiz.

A local broker said Malaysian investors were generally not interested in REITs because they had a short-term investment strategy.

“The REIT industry is defensive by nature and the stocks under trusts generally rise slowly in value over time. If managed well, they provide steady returns,” he said.

He added that REITs were never tailored to aggressive investors or high-risk takers.

The broker said many of the pension funds from developed economies were parked in REITs, with investors taking a medium to long-term view to investment.

Stewart LaBrooy

“These investors are not out to sell their shares (when the prices are high) but rather to get regular and steady investment returns by way of capital gain or dividend,” he noted.

Pankaj said foreign institutional investors generally had a better understanding of REITs, especially the difference asset classes and their potential investment returns.

“While the REIT industry is still in its infancy in Malaysia, foreign investors can see the potential for growth of local REITs over time,” he said.

He added that Kurnia invested in various classes of REITs.

Pankaj sees other issues about Malaysian REITs that need to be highlighted.

“While foreign investors are gaining greater interest in Malaysian REITs, they feel that the local REIT industry could develop faster if more incentives were given.

“While there were some liberalisation of foreign ownership rules in the property sector, the last Budget did not provide much for Malaysian REITs,” he said.

Chan Say Yeong

Another issue was the lack of detailed coverage by analysts on Malaysian REITs, Pankaj added.

A Singapore-based fund manager concurs about the lack of incentives.

She said the tax regime for Malaysian REITs should be more investor-friendly to attract more local and foreign investors into the industry.

“Currently, individuals pay a flat 15% tax while foreign investors pay 20%, which is higher than in Hong Kong and Singapore (where the withholding tax for foreign investors is 10%),” said the fund manager.

She said basically the problem with Malaysian REITs was that they were too small (in asset size) to attract foreign funds.

“One way to fast-track the growth of the asset size is to allow REITs to be invested in development projects, subject to a cap in their fund size.

“Another incentive is to increase the statutory gearing limit to about 60% (currently 50%) of the REIT's asset size and shorten the property transaction period.

“Such incentives would expand the breadth and depth of assets that can be invested in REITs. Moreover, it will also benefit the property sector as there will be more room for developers to partner with REITs to develop and sell their projects,” she said.

The fund manager said it would be difficult for local REITs to grow their asset size quickly unless they had a ready pipeline of properties to be injected.

In the case of Axis REIT, the REIT's managers had a portfolio of properties that were ready to be injected into the REIT.

Axis REIT chief operating officer and executive director Stewart LaBrooy said: “We have been very aggressive in acquiring properties over the past 2½ years before injecting them into the REIT. We hope to grow the property trust to RM1bil by end-2008.”

Another local REIT that has a steady pipeline of properties is Quill Capita Trust, which is managed by Quill Capita Management Sdn Bhd (QCM).

QCM chief executive officer Chan Say Yeong said Malaysian REITs offered better yields compared with those in mature Asian economies such as Hong Kong and Singapore.

“The yields for Malaysian REITs generally range from 5.5% to 7% while those in Singapore range from 2% to 3%, which makes local REITs very competitive,” he said.

Chan said QCT was 50%-owned by foreign institutional investors.

“Foreign investors view Malaysian REITs as very affordable with good yield potential,” he said.

A foreign fund manager said REITs were defensive stocks that were suited for investors who were adverse to high risk.

He advised Malaysian investors to have a diversified investment portfolio that included REITs, which provide stable dividends and capital gains over the medium to long term.

“Malaysian REITs offer an attractive proposition because of their good yields and lower valuations,” he said.

The foreign fund manager said that with Thailand and Vietnam' commercial properties not as ready or as attractive to be injected into trusts and Singapore and Hong Kong's REIT markets being fairly mature, Malaysian commercial properties offered an attractive value proposition.

By The Star (by Danny Yap and Fintan Ng)

Allstones in regional expansion mode

Allstones Group, which holds a major stake in Bluestone Group Malaysia, will team up with foreign real estate funds to venture into property development in fast growing cities in the region, including Kuala Lumpur.

Allstones chairman K. H. Sim said a group of local and foreign investors were keen to undertake projects in Malaysia, Thailand, Singapore and Vietnam.

K.H. Sim posing with a model of the Taragon Puteri KL

“We are working with some property funds in Thailand and Vietnam and are looking at a few possible deals,” he told StarBiz in an interview.

Allstones was set up in late 2002 to specialise in real estate development and investment in the South-East Asian region. Its stakeholders comprise both international and local investors.

He said foreign property funds were more adventurous to venture into more risky projects, including new developments.

“Malaysia still does not have any robust property funds that are willing to invest in uncompleted projects.

“The various real estate investment trusts only invest in completed properties, as they are not ready to take any construction risk of uncompleted projects.

“If we have our own funds that are willing to get involved in new projects, AllStones will be more than willing to work with them to minimise the volatile currency risk when we venture into foreign territories,” Sim added.

In Kuala Lumpur, the company is in negotiations to acquire some parcels of land in the vicinity of the Kuala Lumpur City Centre (KLCC).

“There are still very good opportunities for developing quality residential projects in Kuala Lumpur, especially with the growing foreign interest in Malaysian real estate.

“The exemption of real property gains tax (RPGT) has raised the competitiveness of the local property market, and an increasing number of foreigners are keen to invest here.

“Compared with other cities in the region such as Singapore, Bangkok, Jakarta and Hanoi, property prices in Kuala Lumpur are still one of the lowest with good potential for price upsides,” he said.

According to Sim, although land prices in the vicinity of KLCC and in the inner city have appreciated substantially, they are still considered cheap to the foreign players.

“There are still quality pieces of land available and we are confident of making some good purchase if the pricing is right.”

Sim said the outlook for commercial properties, especially shop houses, retail complexes and office buildings, in the city's Golden Triangle was also positive.

There was also scope for the purchase of old office buildings for refurbishment to be leased out for rental income, he added.

Sim also sees good opportunities in Penang, especially with its status as a choice destination for participants of the Malaysia My Second Home programme (MM2H).

“Penang is attracting many MM2H participants and we foresee demand for real estate there growing rapidly.

“We are looking for suitable land of one to five acres for high-rise condominium development there,” he said.

Sim said AllStones was committed to bringing value to its customers through strict risk management practices and innovative ideas and by recognising the opportunities available in the local and regional markets.

By The Star (by Angie Ng)

Bluestone sought after to revive distressed projects

K.H. SIM, dubbed the good Samaritan for abandoned projects in Kuala Lumpur, sees his outfit, Bluestone Group Malaysia, continuing to play a role to revive distressed projects.


K.H. Sim

Having taken three such projects under its wings since the company was established in 2003, Bluestone is still very much sought after by financial institutions, developers and property buyers to revive projects that have been abandoned.

A show unit of the Taragon Puteri Cheras

However, Sim is careful on what he brings to the company, and thorough studies would be undertaken to ascertain any legal encumbrances and the potential rate of success of a project.

He explained that the process was very tedious as it involved a big group of stakeholders – the existing developer, buyers, creditors, contractors, material suppliers and the authorities.

“There could be many issues, some unsurmountable, unless much research is done. They have to be sorted out to ensure that any project we select is good for revival. In order for a higher success rate, the various parties should be willing to give and take. This includes the creditors taking a haircut.

“While we are happy to help house buyers fulfil their dreams of owning their homes, at the end of the day all the projects must meet our internal rate of return (IRR) and our partners’ IRR, too,” Sim said.

Bluestone also works with financial institutions to “rescue” non-performing loans (NPLs) of property purchasers.

The three projects that are under Bluestone – Taragon Yap Kwan Seng, Taragon Puteri Cheras and Taragon Puteri KL – are on their way to being resuscitated.

The former Menara Li Foong in Jalan Pudu which is being resurrected as Taragon Puteri KL.

Taragon Puteri Yap Kwan Seng, which was bought for about RM5mil in 2005 from a financial institution after the developer failed to service its loan, has been completed recently.

The 12½ -storey low-density project with 40 spacious apartments is positioned as a home within the city and is a stone’s throw away from the Kuala Lumpur City Centre.

Each floor consists of up to four corner units and is serviced by two lifts.

The standard unit sizes range from 1,767 to 1,895 sq ft while the sub-penthouses and penthouses are between 2,241 and 3,210 sq ft.

The residences that are priced from RM438 per sq ft will be handed over to buyers next month.

Meanwhile, the 3.3-acre project site where Taragon Puteri Cheras is located was originally meant for 300 apartments by the Li-Foong Group.

Since Bluestone took over the project, the development concept has been reviewed and it now comprises 141 private town villas and duplex units in three – and four-storey blocks within a gated community.

The houses, with built-up areas from 923 sq ft, are priced from RM155,000 to RM338,000. The project will be completed by March.

Artist's impression of Taragon Puteri KL when completed.

Taragon Puteri KL was formerly Menara Li Foong, which had been left uncompleted for more than a decade.

Located at Jalan Changkat Thambi Dollah, off Jalan Pudu, the project is being developed into a RM280mil integrated commercial development with a four-star hotel, service residences and retail space.

The project was taken over last year, and Taragon Puteri KL is on track for completion next year.

Taragon Puteri KL is being undertaken on a joint venture basis with Allco Funds Management (Singapore) Ltd (Allco FMSL), a 100% owned subsidiary of Australia’s Allco Finance Group Ltd which specialises in asset-based structured finance.

The project targets top executives and travelling businessmen who opt for luxury inner city living.

Sim said Taragon Puteri KL featured a unique 3-in-1 concept combining hospitality, retail and residences in one development.

One of the two adjoining blocks is dedicated for an international all-suites hotel and the other is a luxury service residences block. There are also limited retail units to serve the needs of hotel guests and residents.

The hotel block is leased by a four-star international hotel chain, Rendezvous Hotel International, which is a subsidiary of Straits Trading Company Ltd of Singapore.

The 371-suite hotel comes complete with a range of facilities, including conference and banquet, swimming pool and a fully equipped gym.

Meanwhile, the residential block comprising 152 service residences has generated sales of more than RM80mil.

By The Star

Sunrise zooms in on quality

SUNRISE Bhd's property projects are best known for their good location, product quality, potential for capital appreciation and on-time delivery.

The premium developer is well known for its high-end residential properties such as Mont'Kiara Aman, Mont'Kiara Damai, 10Mont'Kiara and 11Mont'Kiara nestled in the prestigious Mont'Kiara enclave.

Sanitary ware by the Villeroy and Boch group

To date, Sunrise properties have consistently outperformed others with capital appreciation of about 60% and rental yields of between 8% and 12%.

While location continues to be the ultimate factor among property investors and purchasers, many are placing emphasis on high quality products in their property offerings.

For ongoing residential and commercial projects like Mont'Kiara Meridin and Solaris Dutamas, Sunrise promises to deliver the same sterling performance to its potential investors and purchasers.

Late last year, Sunrise and its supplier, GC Building Technologies (M) Sdn Bhd (GCBT), took six valued purchasers and the media on a tour of the Donbracht as well as Villeroy & Boch (V&B) plants in Germany to get an insight on the manufacture of high quality faucet fittings and sanitary ware used in Sunrise's high-end condominiums since 2000.

According to Sunrise chief marketing officer Lee Meng Tuck, a total of 9,065 V&B sanitary ware worth RM68.2mil and 11,423 Dornbracht sanitary fittings estimated at RM93.2mil have been used or proposed in selected high-end condominium projects.

“We hope to strengthen the partnership with our reliable supplier, GCBT, as well as employ other external international consultants to further augment our internal development team to meet the standards in design and construction,” he pointed out.

The focus on quality is paramount so that every item that carries our logo meets the highest standards« ANDREAS DONBRACHT

Aloys F. Donbracht GmbH & Co director Andreas Donbracht said in his presentation at the Donbracht factory in Iserlohn while many companies were seen setting up manufacturing outfits abroad, Donbracht products are 100% made in Germany.

“The focus on quality is paramount so that every item that carries our logo meets the highest standards,” he said.

Donbracht is one of the world's leading brands in faucets and accessories for bathrooms and kitchens with a turnover of about 193 million euros (RM930mil). It has captured about one-third of the total global market.

“Our goal is to hit 300 million euros in the foreseeable future,” he said.

Among Donbracht's products are the signature Tara and Meta fittings seen in many of the world's major five and six-stars hotels worldwide, including the famous Burj Dubai Hotel.

Andreas pointed out that the bathroom was evolving into being an island of retreat for personal rituals, contemplation and beauty care.

“More (bathrooms) will be inspired by nature like our RainSky E system shower, which has a cascading rainfall effect,” he added.

GCBT is Donbracht's sole supplier in Malaysia.

GCBT managing director Andrew Sia said: “We plan to bring in more products of international design given the increasing number of projects related to resorts, hospitality and property development in Malaysia.”

Meanwhile, during a presentation at the V&B Mettlach factory, its spokeswoman said V&B focused on the highest quality both in its products and designs.

With 22 manufacturing facilities in 12 European countries and one in Mexico, V&B is a European lifestyle brand with market presence in 125 countries.

The group has three main divisions: bathroom and wellness, tableware and tiles.

In 2006, the bathroom and wellness division posted 489 million euros in revenue, tableware 325 million euros and tiles 149 million euros.

Despite its focus on Europe, she said V&B was consistently pursuing its globalisation strategy.

“There is high growth potential in emerging markets like China and India as well as the United Arab Emirates,” she said.

V&B former chairman Lultwin Gisbert von Boch-Gauthau, who made a special appearance during dinner at V&B's Saareck Castle guesthouse, said the group had innovative strength, strong customer orientation and strategic alignment to successfully venture into the international markets.

By The Star

Johor property prices nowhere near KL levels: Developers

Property developers and consultants say Johor property prices are unlikely to rival those in Kuala Lumpur in the near future given their current growth rate.

While prices of properties in the Kuala Lumpur City Centre area are hitting new highs, with talk of a high-end condominium fetching RM2,000 per sq ft, Johor can only command a quarter of that price.

Prices in the Klang Valley are higher because it is more cosmopolitan and has a bigger population, Mah Sing Group Bhd group managing director and group chief executive Datuk Leong Hoy Kum said.


LEONG: Klang Valley is more cosmopolitan, has more people

SP Setia Bhd group managing director and chief executive officer Tan Sri Liew Kee Sin said the increase in property prices was largely a function of demand, supply and affordability.


LIEW: Property market in the state remains highly competitive

"In order for prices to rise, demand has to outstrip supply, which can only happen when buyers increase or existing residents experience a real increase in their net disposable income," he said.

He added that Johor's property market remains highly competitive as more developers jump on the bandwagon, resulting in a crowded buyers' market.

SP Setia has four projects in the Iskandar Development Region, with a gross development value (GDV) of RM8.9 billion.

Property experts said a quick way to boost demand would be to attract foreigners, especially with property prices in Singapore rising to stratospheric levels and the island republic becoming crowded.

"The potential spillover effect for Johor Baru is immense, but this can only be realised with free movement of human and vehicular traffic between the two neighbours, minimal regulatory approvals on foreign purchase of properties in Johor and improvement of physical infrastructure and linkages," said Liew.

In addition, security concerns need addressing to convince foreigners to relocate.

While there has been renewed interest from regional investors, including Singapore, the Middle East, South Korea and Japan, the prime mover for Iskandar remains industrial land, said Samuel Tan, executive director of property consultancy KGV-Lambert Smith Hampton (Johor) Sdn Bhd.

He noted that gross rental yield for factories is now nine to 10 per cent a year compared with seven per cent previously.

"The higher yield is due to more quality tenants (multinational companies) in the industrial sites, who are willing to pay for better services and quality," he said.

Tan added that landed property targeting the masses will remain a challenge. "Due to the previous overhang, it will take time to clear the properties priced at RM200,000 and below," he said.

Previndran Singhe, chief executive officer of real estate firm Zerin Properties, said industrial and residential prices had shot up by 15 to 20 per cent in good locations, driven largely by Iskandar.

"The property market in Johor is not robust like Kuala Lumpur's, but vibrant. In the next two years, some serious action is expected to take place in Johor Baru, Pasir Gudang, Nusajaya and Port of Tanjung Pelepas," Previndran said.

By New Straits Times

More developers eye Johor land

More property developers are buying land in Johor as they bet that the Iskandar Development Region (IDR) will spur higher prices.

Prices are rising, albeit marginally at present, due in part to demand as well as costly building materials, industry executives said.

At the current rate, it will take some time before they rival prices in Kuala Lumpur, they said.

Mah Sing Group Bhd chief Datuk Leong Hoy Kum said its three existing projects in Johor have enjoyed brisk sales since Iskandar's launch.

Prices of properties in prime locations in Johor Baru have risen by about five to 10 per cent, he said.

Mah Sing recently bought 24ha in Johor Baru for RM21 million to develop a new township, called Sri Pulai Perdana 2.

"We expect the prices of properties in Sri Pulai Perdana 2 to rise slightly by five to 10 per cent," Leong said in reply to questions from Business Times.

Another company which is betting on Johor is Tradewinds Corp Bhd, owned by Tan Sri Syed Mokhtar Al-Bukhary.

Tradewinds is buying 363ha in Bandar Nusajaya for RM145 million.

Naza Group's property unit, TTDI Development Sdn Bhd, is also looking to buy land in the state.

According to Datuk Yap Suan Chee, who controls the Melati Ehsan Group, real estate sales have picked up by more than 20 per cent.

Yap told Business Times that Melati Ehsan plans to buy more land in Iskandar.

It also wants to develop properties together with landowners.

The group is now developing its maiden venture in Johor, Taman Ehsan Jaya, located within Iskandar, in a partnership with landowner TPPT Sdn Bhd, a unit of Bank Negara Malaysia.

The project comprises 5,000 shoplots, medium-cost houses and low-cost apartments built over 122ha, and is worth around RM850 million.

"We have completed half the project for RM400 million.

"We expect the take-up rate for the remaining units to improve, and we hope to complete the job ahead of schedule due to demand," Yap said.

"We have raised our sale price slightly in the last two years, but this was also to incorporate higher building material costs," he added.

By New Straits Times - (Business Times)

MK Land targets RM200m en bloc sales

MK LAND Holdings Bhd, a developer, plans to raise up to RM200 million from en bloc sales of its residential properties, a deal that could kick-start its turnaround.

The company, which has a large piece of prime land in Damansara Perdana, Petaling Jaya, is losing money due to slow sales, but its management has plans to return to profit.

"Our problem is that we are asset-rich. We are working on several initiatives. I think we can pull it through," chief executive officer Datuk P. Kasi told Business Times in an interview.

MK Land is in talks with a few foreign parties, including from the Middle East, and local ones on the en bloc sales in Damansara Perdana. He declined to name them.

In addition, MK Land is working on a 9.2ha commercial project modelled along the likes of the Mid Valley Megamall or the Pavilion. It is talking to potential partners on the project.

There is also a new share sale that has been approved.

"My view is, all three will happen. I'm hoping all three will happen this year. Our view is that we must be ready," Kasi said.

The spotlight was on the company for the wrong reasons recently when Malaysian Rating Corp Bhd cut the rating on its debt. It also raised questions about whether the company could meet a RM60 million bond repayment due on August 29 this year.

Kasi brushed off the bond downgrade, saying that MK Land would be able to meet its obligations.

"The issue here is only a temporary thing because of a slowdown in sales," he said.

MK Land stock now trades at around 62 sen, well below the placement price of RM1. The low share price means that the placement will be difficult to pull off.

However, Kasi is optimistic. He believes that one good news will lead to another and MK Land's fortunes will change when that happens.

"There is sufficient time (to meet the bond payment)," he said. If MK Land clinches the en bloc sales or gets a partner, "people may look at the company differently", Kasi argued.

By New Straits Times (by Shahriman Johari)

When the going gets tough, MK Land turns to Kasi

About five years ago, the staff of MK Land Holdings Bhd bought a Rolex watch for their boss, Datuk P. Kasi, as a birthday present.

"He kept it in the drawer," said one employee with a chuckle. Instead, he kept to his favourite, a black digital Casio watch that is almost impossible not to notice.


KASI: We're cutting down on volume

The co-founder of MK Land, a property developer, is a simple man, his staff say.

But he now faces a not so simple situation. MK Land is in a hot sector, owning one of the last big pieces of prime land in the Klang Valley.

And yet, its accounts paint a different picture. It is making money but profits have fallen every year since 2003, its annual report showed.

The company disappointed investors further recently when it swung to a loss in its first quarter for fiscal 2008. Revenue tumbled 59 per cent.

CIMB, an investment bank, cut its recommendation on the stock to "neutral" after the results announcement.

Malaysian Rating Corp Bhd piled on the pressure when it pointed out that the quality of its credit will depend on its ability to secure new funding.

"Every year we've always met the bond obligation. It was RM300 million, the original bond. We only have RM90 million left," Kasi said.

MK Land used to be driven by volume, he explained. But the market has changed and the firm must also change.

"We are cutting down on volume. It's about smaller number of units and higher price," he said.

The company is an asset-rich company. It has land worth almost RM700 million and properties valued at more than RM300 million, its accounts showed.

Its prized asset is Damansara Perdana, an area next to the bustling Kota Damansara township, Bandar Utama and Taman Tun Dr Ismail, areas with a large population that have heavy spending power.

However, its stock does not reflect the value of its assets. At around 62 sen, it is 28 per cent below its net assets per share of 86 sen, as at September 30 2007.

In a November 2007 report, CIMB calculated that the value of MK Land's assets minus all liabilities is worth more than RM2 a share.

This is probably why its third biggest shareholder, US-based Liberty Square Asset Management, decided to buy more shares. It added five million shares on January 11, bringing its stake to 6.64 per cent. It had 6.02 per cent as at October 16 last year.

By New Straits Times

Three-year target to rejuvenate MK Land

AN ARCHITECT by training, Datuk P. Kasi is a soft-spoken man who took over the reins of MK Land Holdings Bhd in April 2007.

He is giving himself three years to rejuvenate the company. The father of three loves reading, though he said there's less time to do that now.

He likes to read a wide range of books, from management leadership, motivation, to religion. Does he read books by famous property tycoons like Donald Trump?

"I've read some books by him," he said.

Is his current task bigger than what he used to face when starting the business?

"I'm an entrepreneur. Life as an entrepreneur is always facing challenges. The assets are bigger, the issues are bigger (now), that's about it."

By New Straits Times

Big plans for land around KLIA

The proposed 1,100ha property development earmarked for the area surrounding Kuala Lumpur International Airport (KLIA) would see the full utilisation of about 15 per cent of land allocated for KLIA's non-aviation development.

The project is huge and would comprise hotels and office blocks, said Malaysia Airports Holdings Bhd (MAHB) managing director Datuk Seri Bashir Ahmad.


BASHIR: We are not totally dependent on commercial revenue... but we need it to remain profitable

He said details of the project are being finalised and will be announced in two to three months' time.

The location of the project is very near to the Formula One race track, he said when met in Sepang last week.

The KLIA land measured some 9,800ha and of the 33 per cent meant for aviation-related development, about 35 per cent has been developed to date.

The remaining will cater for future demand of the aviation industry, said Bashir after delivering his welcome speech to 80 participants of the 2008 Global Airport Expansion Asia Congress.

He said in today's fast changing world, one of the challenges faced is to ensure that airports continue to generate commercial revenue and MAHB currently derives about 45 per cent of its revenue from commercial activities.

Bashir is confident that in the years to come, the figure will further increase.

"We are not totally dependent on commercial revenue ... but we need this revenue to remain profitable," he said, adding that the group spends a substantial amount of money to achieve this target.

He said running the KLIA, the group has the advantage of having ample land and to develop it for aviation related activities to gain additional revenue.

"And it is just not only at KLIA we do this but at all the other 38 airports that we manage, as we want to be in the forefront in airport development," said Bashir.

MAHB has targeted to achieve RM580 million in commercial revenue in 2008 and grow this to 50 per cent of the total revenue by 2010.

For the year ended December 31 2006, commercial services generated revenue of RM439 million for the company.

By New Straits Times (by Roziana Hamsawi)

Mideast investor keen on project

D’Rapport Condominium project

Negotiations are under way with a Middle Eastern investor for the en bloc sale of the two remaining blocks of the upmarket D’Rapport Condominium project along Jalan Ampang here, said Acmar International group chairman Datuk Abdul Samad Maharuddin.

Datuk Abdul Samad Maharuddin (2nd from left) exchanging documents with Sabah Development Bank Bhd chairman Peter Siau after the signing ceremony. On the left is Acmar International managing director Datuk Steven Tee

The project, jointly undertaken by Permodalan Negeri Selangor Bhd and Perspektif Masa Sdn Bhd, a member of Acmar International, comprises five blocks offering a total of 1,099 units.

Sales had been very encouraging since the first three blocks (A, C and E), comprising 689 units, were soft-launched last month, Abdul Samad said.

“We expect to sell 40% of these units by end of this month,” he said at the signing of an agreement of RM125mil credit facilities between Perspektif Masa and Sabah Development Bank Bhd last Friday.

The current selling price for D’Rapport averages RM700 per sq ft, and the units are priced from RM700,000 each.

D’Rapport, located within the vicinity of several embassies, international schools and hospitals, is just a few minutes' drive to the city’s business district and landmarks like the Petronas Twin Towers.

By The Star