JTC Corp to sell properties to Mapletree

JTC Corporation has announced that it will be divesting a selected portfolio of high-rise ready-built properties to Mapletree Investments Pte Ltd worth a total of S$1.71 billion

“This divestment option was part of Mapletree’s proposal to JTC, when Mapletree was appointed by JTC as the real estate investment trust (REIT) manager for the selected portfolio in February this year,” said JTC in a statement yesterday.

The company said the divestment of properties to Mapletree was part of its overall divestment exercise to promote competitiveness and vibrancy in the industrial property market.

“It will also enable JTC to focus on being a strategic infrastructure provider to support Singapore’s economic growth and position Singapore as the choice investment location,” it said.

JTC and Mapletree also announced that based on the advice of the REIT financial advisers, they will not be proceeding with the proposed listing of the portfolio of properties via REIT at the present time.

“This is in light of the current volatile market conditions which are not conducive for a REIT initial public offering. Instead, JTC will divest the portfolio of properties to a private trust sponsored by Mapletree,” they said.

The transfer of properties to Mapletree is expected to be completed by July this year.

By Bernama

Melewar submits RM2.2b monorail plan

On Track: An artist's impression of Melewar's RM2.2 billion monorail system for George Town

MELEWAR Industrial Group (MIG) Bhd has presented to the Penang state government a proposal for a RM2.2 billion monorail system for George Town.

The proposed ultra-light loop monorail system covering a 52km track is set to operate on a single line and run on three different loops from locations like Gelugor, Farlim in Air Itam and Gurney Drive into the city.

“The focus of the main link will be the centre of George Town and we strongly believe that the federal government and state government will work together in bringing a monorail system to Penang,” Melewar Industrial Group’s managing director and chief executive officer Tunku Datuk Yaacob Tunku Abdullah told reporters after presenting the proposal to Chief Minister Lim Guan Eng and members of the state executive council yesterday at Lim’s office.

He said the proposed system, which is aimed at moving people from point-to-point into the city, will boast a 12-car train of monorail and can move 17,600 passengers per hour.

Tunku Yaacob said the company can take 28 months to complete the system which would feature steel structures.

“Land acquisition can also be kept to a minimum because the monorail will be running on road dividers,” he added.

When asked to comment on concerns from Penangites that a monorail would mar the charm of George Town’s historic inner city which is vying for a listing on the World Heritage List, Tunku Yaacob said:

“We will not bring the monorail to heritage buildings ... we will not run it in front of the buildings but behind them.”

However, an artist’s impression of the proposed monorail system for Penang provided by Melewar showed the system running alongside historic structures in the city.

On postings in blogs that Penang should bring back its tram system instead of introducing a monorail, he described the tram concept as an interesting one but pointed out that the trams had not been successful.

Last November, Melewar Industrial Group Bhd unit Melewar Metro Sdn Bhd (MMSB), which is vying for the estimated RM1.2 billion monorail project in Penang, announced that it had formed a consortium with Putera Capital Bhd to cooperate to jointly secure the project.

Melewar Group had said in a statement that the consortium was formalised with the signing of a memorandum of understanding between MMSB’s wholly-owned subsidiary Melewar Metro (Penang) Sdn Bhd (MMP) and Putera Capital. MMSB made the proposal for the monorail project to the government via its subsidiary.

Melewar is one of several parties which participated in a tender exercise for the development of a monorail system for Penang on November 14 last year which was called by Syarikat Prasarana Negara Berhad (SPNB).

In January this year, SPNB awarded a letter of intent for the project to Malaysian Resources Corporation Bhd (MRCB), which has formed a consortium with Penang Port Sdn Bhd and Scomi Engineering Bhd.

By New Straits Times (by Marina Emmanuel)

Damansara Realty to pare down losses

DAMANSARA Realty Bhd (DBHD) has proposed to use RM656.6 million arising from its proposed capital reduction exercise to reduce the accumulated losses of the company and put it on a firmer footing.

In a filing to Bursa Malaysia yesterday, DBHD said the exercise entailed the cancellation of 84 sen of the par value of each of the existing 781,689,857 ordinary shares of RM1 each.

“Upon completion of the exercise, the issued and paid-up capital of the company will be reduced to RM125,070,377 comprising 781,689,857 ordinary shares of 16 sen each,” it said.

DBHD also proposed one-for-two rights issue of up to 125,070,377 shares.

It said based on the issued price of 50 sen per rights issue, the gross proceeds to be raised under the minimum subscription level and maximum subscription level would amount to RM30 million and RM62.5 million, espectively.

“The proceeds will be used for the working capital requirement and to defray expenses relating to the proposed restructuring scheme of about RM2.5 million,” it said.

The company also has proposed to acquire some assets from Johor Corp Group of Companies to improve revenue generation capabilities of the DBHD.

Among others, it has proposed to acquire a leasehold industrial land for RM178 million, 100 per cent equity interest in TPM Technopark Sdn Bhd for RM41.3 million and 53.2 per cent equity interest in TMR Urusharta (M) Sdn Bhd.

It has also proposed to dispose of 99.99 per cent equity interest in Tanjung Tuan Hotel Sdn Bhd for RM37.6 million.

By Bernama

AmFirst REIT moves to shed old perception

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, is working hard to shed a past perception when it comes to performance.

Previously known as the AmFirst Property Trust, the fund was the first to go public on the local bourse 18 years ago as part of the government's plan to kick-start the industry. Performance of the sector was generally viewed as lacklustre as proper legislation was lacking before to spur growth.

"It is not that the market perception on AmFirst was bad. To put it in perspective, it was listed back then to answer to the government's call to set up property trusts. The fund was started to include AmBank's own buildings," AmMerchant Bank Bhd's executive director Pushpa Rajadurai said in an interview with Business Times.


PUSHPA: Since ARA came in, our asset size has increased

Since then, there was no change in the regulations that govern property trust, until 2005. And AmFirst had almost immediately taken steps to look at revamping the old property trust according to the new REIT guidelines. It remains the only one of three old property trusts that have been rebranded and re-listed on Bursa Malaysia.

"We know that in REIT, it is good to bring in an independent property manager. ARA Management has the expertise in this area and that's why we've tied up with them," Pushpa pointed out.

Singapore-based ARA Asset Management Ltd, an affiliate of Hong Kong's real estate giant Cheung Kong Group, was roped in to own a 12.5 per cent share of AmFirst REIT. It also owns 30 per cent of the trust manager, Am ARA REIT Managers Sdn Bhd.

"The change has already been reflected in our strategy. Since ARA came in, our asset size has increased and the dividends per unit were boosted," she said.

AmFirst's asset size has swelled to RM835 million recently after it bought all the unsold units of The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

The purchase boosted its dividends by two sen per unit for the financial year to March 2009, bringing the total forecast distributions to 9.3 sen gross per unit.

Michael Lim, a director of ARA Management, said AmFirst will spend at least RM6.5 million this year to upgrade three buildings - Menara Ambank, Menara Merais, and AmBank Group Leadership Centre.

By New Straits Times (by Chong Pooi)

PNB sees bigger foreign investments by 2010

STATE-owned fund manager Permodalan Nasional Bhd (PNB) aims to see overseas investment representing 10 per cent of its investment portfolio by 2010, an effort to further enhance its returns.

Chief executive officer Tan Sri Hamad Kama Piah Che Othman said this is part of plans to restructure its current investment portfolio, which will also see them focusing on other potential sectors such as property and hospitality.

Despite interest to expand abroad, he said the group will continue to be focused on its local investments.

"We would first focus on our base here. We will try to go to countries where we can get good returns," he told reporters after the launch of the PNB International Lectures by Deputy Prime Minister Datuk Seri Najib Razak in Kuala Lumpur yesterday.

Hamad Kama Piah said PNB also plans to introduce new investment products, particularly those offering higher returns but at higher risk level, into the market.

In line with this, he said PNB plans to organise more programmes to help educate the public on investment strategies.

"Our investors are always looking for low-risk investments that offer very high returns. In reality, low-risk investment brings low return. That is why we are organising various programmes such as the Minggu Amanah Saham, to educate the public so that they would have a better understanding on the concept of 'risk and return' as well as the need to plan their wealth," he added.

PNB manages some RM120 billion worth of funds or 12.6 per cent of Bursa Malaysia's market value.

Since 1981, it has distributed returns of RM60 billion and set aside RM5 billion each year in investment returns. It has a 58.4 per cent share of the total net asset value in the country's unit trust industry.

By New Straits Times (by Anna Maria Samsudin)

High cost derails KL-S'pore bullet train project

The cost factor was the main reason the government decided not to go ahead with the high-speed bullet train link between Kuala Lumpur and Singapore proposed by YTL Corp Bhd.

“The letters on the decision were sent to parties such as YTL and the relevant agencies in early April,” said Economic Planning Unit (EPU) director-general, Datuk Seri Dr Sulaiman Mahbob, said yesterday.

He said the government would have to bear a significant cost based on the financial model that was submitted by YTL.

“Based on the financial model submitted by YTL, the government has decided not to go ahead with the bullet train (project),” he said, without elaborating on the amount the government has to bear.

YTL has proposed the RM8 billion project which would take 90 minutes to travel between the two capitals from about seven-and-a-half hours now.

It was earlier reported that the government has allowed YTL to do a feasibility study and it (YTL) came back to say the project was feasible.

The plan for a high-speed train between the two cities, spanning about 300km, was proposed in late 1990s, but garnered strong interest last year after the government invited companies to come up with ideas for privately-funded projects.

By Bernama

Putrajaya Perdana confident of big jobs

Putrajaya Perdana has the experience in building zero-energy office for Malaysia Energy Centre and now working on similar concept for Malaysian Energy Commission headquarter in Putrajaya.

KUALA LUMPUR: Putrajaya Perdana Bhd is confident of securing this year at least 20% of the total RM2bil projects it has tendered for.

Chief executive officer Wie Hock Kiong said the amount represented only Malaysia-based construction projects that comprised retail offices and condominiums for the Government and private sector.

“Later this year, supported by our new major shareholder Swan Symphony Sdn Bhd, we are looking forward to bidding for projects in Iskandar Malaysia and Abu Dhabi,” he said after the company AGM yesterday.

Swan Symphony, which holds 49.13% in Putrajaya Perdana, will open the door for the construction company to expand its wings to lucrative Middle East and Iskandar Malaysia markets.

This is because Swan Symphony is a 51%-owned subsidiary of Abu Dhabi Kuwait Malaysia Investment Corp.

Wie said the company was in the midst of setting up a branch office in Abu Dhabi that would be ready by the next quarter.

Some of the projects Putrajaya Perdana can bid for in the Middle East are the US$27bil Saadiyat Island Development and the “zero carbon, zero-waste and car-free” city being planned by the Abu Dhabi government.

The company, with assistance from Swan Symphony, has signed a memorandum of understanding with Abu Dhabi-based Aldar Properties PJSC to undertake the construction, design and consultancy works of node 1 of Iskandar Malaysia.

Additionally, Putrajaya Perdana will continue to focus on the construction of energy-efficient building.

Currently, Putrajaya Perdana's order book stands at RM2.2bil, of which half has been completed.

The outstanding RM1.1bil will last the company more than 18 months.

On the rising raw materials costs, Wie said the company was trying its best to mitigate the impact through hedging and securing flexible contracts for its future projects.

“The prices of steel bars and cement have moved up significantly and going forward, we are proposing a sharing of the fluctuating raw materials costs with customers for our new tenders,” he said.

For the nine months ended Dec 31, 2007, Putrajaya Perdana reported a pre-tax profit of RM37.9mil on revenue of RM336.1mil.

Last year, the company changed its financial year-end to Dec 31 from March 31 previously.

By The Star

Putrajaya Perdana sees UAE as springboard

CONSTRUCTION company Putrajaya Perdana Bhd (PPB) is hopeful that its branch in Abu Dhabi in the United Arab Emirates (UAE) will open soon, after which plans to go big in the Gulf state can easily take off, its chief said yesterday.

Chief executive officer Wie Hock Kiong said PPB will make UAE its first overseas venture, taking advantage of the company being controlled by shareholders from Abu Dhabi.

According to PPB's latest annual report, the firm is "prospecting some potential projects in Abu Dhabi" such as the US$27 billion (RM85 billion) mixed commercial, residential and leisure Saadiyat Island development.

It is also eyeing an environment-friendly city known as Masdar City, and said "the securing of work" in the city will put the group on the global stage of energy-efficient technology.

Locally, PPB is already one of the few players in the construction of energy-efficient buildings. Wie said it will continue to play a significant role in this area.

"Naturally, we want to have a big presence in Abu Dhabi and we expect our few major projects this year will come from Abu Dhabi and Iskandar Malaysia (Iskandar)," he told reporters in Kuala Lumpur after PPB's annual general meeting yesterday.

Meanwhile, chairman Krishnan Menon said PPB has tendered for some RM2 billion of local projects, excluding the ones in Iskandar, and it hopes to have an order book of RM3 billion this year.


MENON: Putrajaya Perdana has tendered for some RM2 billion of local projects

"We currently have an order book of RM2.2 billion and the outstanding projects are worth RM1.1 billion," he said.

Menon said despite PPB's optimism of its business this year, it is still cautious of the uncertainty in the raw material prices, especially steel bars and cement.

PPB for the nine-month period ended December 2007 registered a net profit of RM30 million against a revenue of RM336.1 million. (The group changed its financial year from March to December last year).

By New Straits Times (by Roziana Hamsawi)

Mah Sing sees RM2.5b GDV from four projects

Developments to keep company busy for three to five years

MASAI: Mah Sing Group Bhd expects to generate about RM2.45bil in gross development value (GDV) from its property development projects in Johor and Penang.

Mah Sing Properties Sdn Bhd chief operating officer Ng Heng Phai said RM1.15bil would come from three projects in Johor and RM1.3bil from one project in Penang.

The Johor projects are Sierra Perdana (RM500mil), Sri Pulai Perdana I (RM500mil) and Sri Pulai Perdana II (RM157mil) in Johor while the Penang project is Southbay (RM1.3bil).

The company also has another ongoing project in Johor – Austin Perdana – but Ng did not provide its GDV.

“The Johor and Penang projects will keep us busy for the next three to five years,” Ng said at the Treasure Blitz grand draw ceremony recently.

Tan Pia Choo, a retired teacher from Meru in Selangor, won an RM88,000 office suite in Austin Perdana.

The grand prize of the upcoming premier event is a RM800,000 bungalow in Kemuning Residence, Shah Alam.

Ng said that over the period of a few months, the company had given away prizes worth RM900,000.

Including the bungalow, it would have spent RM2mil for the campaign, which is open to buyers of its 14 projects nationwide.

Ng said Mah Sing would launch Sri Pulai Perdana II before the end of the year.

Southbay, developed on a 33.18ha site, was soft-launched recently. It would have 288 link houses priced above RM755,000, three- and four-storey bungalows going for more than RM2.5mil each, retail shops, three to five-star hotels, serviced apartments and a retail mall.

Ng said Mah Sing was optimistic on the Johor property market as all its ongoing projects were located within Iskandar Malaysia.

He said the group had a total landbank of 323.73ha nationwide, adding that it would look for more land in Johor, particularly in Iskandar Malaysia.

By The Star (by Zazali Musa)

Skyscraper in Kota Baru

31-Storey twin towers taking shape

KOTA BARU: The first phase completion of a RM300mil mixed development project in Jalan Raja Dewa here in 36 months will transform the skyline of the state capital.

The Dataran Raja Dewa project was hailed as an iconic real estate boost for Kelantan with the building of a twin towers of 31 storeys, said developer Petraz Holdings Sdn Bhd managing director Datuk Dr Stanley Chew.

Datuk Dr Stanley Chew (right) exchanging documents with Kelantan State Secretary General Datuk Mohd Aiseri Alias after the signing ceremony. With them is Deputy Mentri Besar Datuk Ahmad Yaakob.

Sited on 6.3ha, the project would showcase Islamic architecture, he said after signing a memorandum of understanding between the Kuala Lumpur-based Petraz and the Kelantan government last Wednesday.

Dr Chew said Petraz had 23 years' experience in the property market with its niche in the warehousing industry in Klang, Selangor.

On Petraz’s foray into Kelantan, he said real estate was reaching saturation levels in other states while Kelantan was an emerging market.

“There is potential here so we have come to seek the opportunities while bringing about modern development to the town,” Dr Chew said.

He said the developer was discussing with potential anchor tenants including five-star hotel operators, hypermarket operators and shopping mall operators about the commercial aspect.

The shophouses would likely be leased by state government departments and local merchants, he said, adding that the first phase would be ready in 36 months and the second by 2014.

Besides bringing in new commercial enterprises and investments, the project is set to become a new landmark for Kota Baru.

The project comprises 40 units of three-storey shophouses, four blocks of five-storey office lots, twin 31-floor office lots, an eight-storey building which can house trade exhibitions and a three-storey car park.

There are also two 12-storey service apartments and 126 town houses in the project.

By The Star (by Ian Mcintyre)

Hunza spending RM10m to restore heritage building

PENANG: A heritage building in Hunza Properties Bhd's Gurney Paragon mixed development project will be modelled after the famous CHIJMES in Singapore.

Executive chairman Datuk Khor Teng Tong told a press conference recently the group had allocated RM10mil to restore the St Joseph’s Novitiate built by the Christian De La Salle Brothers in 1916.

Assoc Prof A. Ghafar Ahmad (left) and Datuk Khor Teng Tong with the report.

Also present was the company's conservation consultant, Assoc Prof A. Ghafar Ahmad from Universiti Sains Malaysia’s school of housing, building, and planning.

“This is the first time a developer in Penang is restoring and incorporating heritage structures into a mixed development project.

“We are trying to model the three-storey, 32,000 sq ft St Joseph Noviate building after Singapore's Convent of the Holy Infant Jesus, a school converted into an enclave of fine dining and retail boutiques,” Khor said.

He said one of the aims of restoring the building and opening it to the public was to educate visitors on the history of St Joseph Novitiate.

The company's restoration efforts were endorsed by the state tourism action council last year.

Khor said the conservation of the building in the Gurney Paragon project, with an estimated gross sales value of over RM1.2bil, would help raise the value of properties near it.

Ghafar said another heritage structure in the Gurney Paragon project, the 430 sq ft National Shrine of the Boy Jesus, would be dismantled, salvaged and reconstructed at a new site.

By The Star (by David Tan)

MDeC plans more cyber centres nationwide

CYBERJAYA: Multimedia Development Corp (MDeC) has received many proposals, including from state governments, to set up MSC Malaysia cyber centres, said chief executive officer Datuk Badlisham Ghazali.

MDeC had also received proposals from the private sector in several unserved areas, particularly in the Klang Valley, he said in an interview.

He said MDeC would continue to open more cyber centres, now numbering 11, in the country.

MDeC was in discussions with state governments like Sabah, Kelantan, Pahang and Perlis on the possible rollout of cyber centres, according to Badlisham.

On setting up the cyber centres, he said: “Obviously, it is not a property development activity.

“First, we look at where opportunity should expand based on the existing ICT companies.

“Second, we would like to see green field development where people from the start put up the necessary infrastructure.”

The proposed area should have 99.9% availability of power and telecommunications, such as broadband facilities, he said.

By Bernama

Moves to buy IGB's MiCasa

IGB Corp Bhd has been approached by several parties to buy all or part of the MiCasa All Suite Hotel in Kuala Lumpur.

Sources told Business Times that several parties, including listed property entities, had approached IGB to buy into the 242-suite hotel.

"IGB is exploring various options. They are looking to either sell the entire property or a stake to a strategic partner that can elevate the property to a higher level comparable to hotels like Four Seasons and Hyatt, which is opening in the area," a source said.

The property in Jalan Tun Razak could go for as much as RM230 million, the source added.

IGB officials could not be reached for confirmation.

Business Times reported in January that IGB was closing its doors to undergo a RM50 million renovation and refurbishment, and that it would consider selling the MiCasa for at least RM175 million.

The renovation was expected to take some 18 months, and the hotel would likely reopen in the middle of next year.

The 20-year-old building is undergoing an extensive upgrade of all its rooms, pool deck and public areas. It will be revitalised as a five-star luxury all-suite hotel.

IGB has a stable of hotels in various cities, including the St Giles Hotel in London in the UK; MiCasa All Suite Hotel in Yangon, Myanmar; and New World Hotel in Ho Chi Minh City, Vietnam.

The group also runs the Cititel hotel chain in Penang and Kuala Lumpur as well as the Boulevard and Cititel Express hotels.

New openings include the five-star The Gardens Hotel and Serviced Apartments at Mid Valley City in Kuala Lumpur and the St Giles in Manila in the Philippines.

By New Straits Times (by Vasantha Ganesan)

2nd Penang bridge delayed due to rising costs

PRIME Minister Datuk Seri Abdullah Ahmad Badawi said the construction of the Second Penang Bridge will be delayed following problems getting the allocated land, the best design and increasing building costs.

“Several matters have delayed its construction. Firstly in getting the land that had been allocated for building the bridge.

“Secondly, there is a need to ensure that the given design is the most suited and also the issue of cost where there may be changes due to increased prices,” he told reporters after officiating the Asia-Europe Culture Ministers Meeting in Kuala Lumpur today.

Abdullah said this when asked on why the building of the bridge was being reviewed under the Ninth Malaysia Plan (9MP).

He also said several other projects under the 9MP are being reviewed as well.

The building of the 24-km bridge linking Batu Kawan in Seberang Perai south and Batu Maung on the island has been receiving criticisms from various parties for its delay.

The original agreement between UEM Group Bhd and its consortium partner China Harbour Engineering Company (CHEC) has been extended for nine months to provide more negotiation time for them to reach an agreement that will be same with the original deal.

Earlier, UEM had given the guarantee that the building of the Second Penang Bridge will be smooth and completed as scheduled in 2011.

The bridge will be the longest in Malaysia and South East Asia once it is completed.

Last year, Malaysia and China signed a loan facility worth RM2.7 billion for the building of the bridge. The parties involved were the Government of Malaysia, Exim Bank from China and Bank Pembangunan (Malaysia) Bhd.

By Bernama

QCM Q1 net profit jumps 95% to RM7.1mil

Revenue increases 84% to RM11.38mil

PETALING JAYA: Quill Capita Management Sdn Bhd (QCM) reported a 95.5% rise in net profit to RM7.1mil for the first quarter ended March 31 and has forecast full-year net profit at RM27.33mil.

QCM, which manages the real estate investment trust, Quill Capita Trust (QCT), said revenue rose 84% to RM11.38mil for the first quarter. In the first quarter for 2007, net profit and revenue were RM3.63mil and RM6.2mil respectively.

“The increased revenue and profit were driven by QCT’s active acquisition strategy which saw the value of its portfolio grow by 134% from RM275mil at the initial public offer (IPO) stage to RM645mil currently via five new property purchases,” it said in a statement yesterday.

The acquisitions of Wisma Technip and the commercial units and car parks of Plaza Mont’Kiara for RM215mil were completed in September 2007, it added.

The acquisitions of Quill Building 5-IBM, Quill Building 8-DHL and Quill Building 10-HSBC (Section 13) were completed last month for RM94.5mil.

QCM chief executive officer Chan Say Yeong said the higher revenue included the full rental income of Wisma Technip and the commercial units of Plaza Mont’Kiara for the quarter.

“In the subsequent quarters, we will begin to fully account for rental income from Quill Building 5-IBM, Quill Building 8-DHL and Quill Building 10-HSBC, and this will further raise our revenue and profit,” he said. With the current portfolio, QCM projected the 2008 distribution per unit to rise to 7.01 sen compared with six sen stated in the IPO forecast.

QCM expected asset value to reach its RM750mil target in the financial year ending Dec 31 (FY08). With a low gearing of 25%, it said it was well positioned to raise debts to make yield-accretive acquisitions when opportunities arose.

For FY08, QCM projected net profit at RM27.33mil on revenue of RM49.32mil.

It said the projections were based on higher income from rentals and car park in accordance with the existing lease and tenancy agreement. It also assumed that leases would be renewed.

For FY09, QCM projected net profit of RM29.38mil on revenue of RM53.84mil, based on higher rental income for three new properties.

By The Star

Quill Q1 net soars, thanks to acquisition strategy

QUILL Capita Management Sdn Bhd's (QCM) first-quarter net profit ended March 31 2008 jumped 95.5 per cent, driven by its active acquisition strategy.

The manager of Quill Capita Trust (QCT), a real estate investment trust, saw its profit surge to RM7.1 million from RM3.63 million of the same period previously.

Its revenue also increased by 84 per cent to RM11.38 million from RM6.2 million in 2007.

QCM chief executive officer Chan Say Yeong said QCT's active acquisition strategy saw the value of its portfolio grow by 134 per cent from RM276 million at the initial public offering (IPO) stage to RM645.5 million currently via five new property purchases.

Chan: Sees continuing demand for quality assets

The acquisitions include Wisma Technip and the commercial units and car parks of Plaza Mont'Kiara for a total consideration of RM215 million, which were completed in September 2007.

Others are Quill Building 5-IBM, Quill Building 8-DHL (XPJ) and Quill Building 10-HSBC (Section 13), completed last month for a total purchase price of RM94.5 million.

"The higher revenue includes full rental income of Wisma Technip and the commercial units of Plaza Mont'Kiara for the quarter," Chan said in a statement yesterday.

He said in subsequent quarters, the firm will begin to fully account for rental income from the Quill Building series, thus further raising its revenue and profit.

Chan said with the current portfolio, the 2008 distribution per unit is projected to rise to 7.01 sen against six sen stated in the IPO forecast.

"We expect QCT's asset value to reach its target of RM750 million within the current financial year. With a low gearing of about 25 per cent, it is well-positioned to raise debts to make yield-accretive acquisitions when opportunities arise."

Chan added that strong demand for quality commercial assets, such as in the Klang Valley, Penang and Johor is expected to continue.

By New Straits Times

Big show by Johor builders at Singapore expo

An artist’s impression of the Asia Pacific Trade and Exhibition City

The Cityscape Asia 2008 held at the Suntec City convention centre in Singapore saw the “big boys” in Johor making their presence felt at the international property investment and development exhibition from April 15 to 17.

They included the 1,840-acre Danga Bay integrated waterfront project, Mulpha's 1,765-acre Leisure Farm Resort, Bandar Raya Developments Bhd's 1,400-acre Permas Jaya, Country View Group's 1,100-acre Taman Universiti and UEM Land's Bandar Nusajaya, the key driver of Iskandar Malaysia.

SP Setia, with several successful projects in Johor, was also there to exhibit among others, its latest project, the Setia EcoCity, the premier commercial and business hub in Bandar Nusajaya, the gateway into Iskandar Malaysia.

They all took up large booths.

However, a new development that stole the show was Malaysia Pacific Corp Bhd's (MPC) Lakehill Resort City near Pasir Gudang in Iskandar Malaysia.

Many curious visitors, including foreigners, were seen crowding around the large model of Lakehill Resort City.

MPC staff had their hands full briefing the visitors on this 484-acre resort township, which is part of MPC's 905-acre freehold Nusa Damai, at the eastern zone of Iskandar Malaysia – a 2,217 sq km special economic zone covering the logistic triangle of Senai Airport (north), Tanjung Pelepas Port (south west) and Johor Port in Pasir Gudang (south east).

Developed by Lakehill Resort Development Sdn Bhd, an MPC subsidiary, it will take about eight years to complete and will have a gross development value of about RM6bil.

What sets this project apart from the rest is that instead of merely selling houses, MPC is trying to make Lakehill Resort City a trading, distribution, entertainment, shopping and tourism hub that would bring in lots of investors to Iskandar Malaysia and boost trade and economic activities for Johor and the country.

The centrepiece is the Asia Pacific Trade & Expo City (APTEC) where MPC will help manage, among other things, the sourcing and distribution of goods from around the region, particularly from China, India and Asean countries.

Critics may view it as putting too many “goodies” on a single plate, but MPC chief executive officer Bill Ch'ng, with his vast experience as a “turnaround wizard”, political and business contacts in China and Hong Kong, is confident that his vision of creating another “Shenzhen-Hong Kong” economic miracle in Malaysia would be a reality.

Ch'ng is a visionary and he is going to bring much excitement to the Johor property market with his innovative concepts and designs. For example, he is creating a kind of timeshared living by having a four-villa cluster sharing a swimming pool in the centre. It would be ideal for extended/large families, each owning a villa or for company use.

The man-made beach at the proposed RM6bil Lakehill Resort City

Besides APTEC, the resort township will also have the following components:

Heritage and Cultural Village: It will be a one-stop tourism hub, where 13 pavilions will exhibit the unique arts, crafts and various types of cuisines offered in each state in Malaysia. There will be alfresco international dining along the waterfront restaurants, bistros and cafes. Diners will be treated to weekly musical fountain shows at the Emerald Lake. A special attraction will be 13 traditionally handcrafted Malaysian-styled gondolas, each representing the 13 states' cultures.

Lakehill Regency Lake: This enclave will have the 6-star Lakehill All-Suites Resort & Convention Hotel, Lakehill Medical & Healthcare Specialist Centre, Lakehill Platinum Residences, Lakehill Power Resort Club and Lakehill Golf Village.

The resort club's membership will be open to buyers of Lakehill Resort City homes and by invitation only. It will have a fine dining club with a large spa and rejuvenation centre.

The Platinum Residences will be a luxury retirement home with 24-hour room service and nursing care upon request and will be manned by a team of doctors and nurses.

There will be some putting greens and driving range for private practice. It will complement the existing 54-hole Tanjung Puteri Golf Course and the 18-hole Octville Golf & Country Club, just 20 minutes away.

Nusa Paradis: This will be the lifestyle entertainment centre showcasing international restaurants, amusement park, dance clubs, karaoke and quaint shopping outlets. It is designed to be a vehicle free zone and hand-drawn rickshaws and trishaw rides will be offered to visitors. The theme is comparable to Universal Studios.

Factory Outlet: Visitors can view thematic buildings in this “cowboy town” and drop in at the sheriff's office and enjoy stagecoach rides. It will be a shoppers' “paradise” as branded goods will be sold at discounted price. Off-season fashion products and electronics goods from APTEC will also be sold here.

Real Rock Cafe: This is another “happening place” where the young as well as young at heart can meet over a cup of cappuccino while enjoying the view below from a five-storey, three-acre rock formation. Visitors can take a bubble lift or climb a rocky pathway passing by a man-made waterfall.

Lakehill Commercial Training Centre: It will be the first of its kind in Malaysia where specialised courses in tourism, hotel management, food and beverage services, business management, retail, health and beauty therapy and other vocational training will be conducted and serve as a source for special skilled workforce for the Lakehill Resort City's staffing needs.

By The Star (by S.C.Cheah)

Call for review of office space freeze in KL

Most quality buildings in Kuala Lumpur are recording tenancy in excess of 90% while rental rates have climbed to between RM6 and RM9 per sq ft

The decade old “freeze” on high-rise office buildings in Kuala Lumpur's inner city needs to be reviewed to allow for the development of more quality office buildings to keep up with the growing demand, property consultants said.

They concurred that a review was timely as there was a lack of Grade A office buildings in the city with most quality buildings recording tenancy in excess of 90% while rental rates have also climbed to between RM6 and RM9 per sq ft.

The KL City Hall (DBKL) had introduced a freeze of new office buildings of more than 20 stories in the Golden Triangle following a huge surplus of office space after the regional financial crisis hit the country's shores in 1997.

By around 2001, about 28% of the available inventory, or about 13.5 million sq ft of office space, was left unoccupied.

According to Regroup Associates executive chairman Christopher Boyd, the situation had changed in the past 12 months and a company wanting a Golden Triangle location in a Grade A building would have difficulty finding space.

“Major corporations which might otherwise have located in KL city appear to have been squeezed out by a combination of planning restrictions and traffic congestion.

“In many cases, KL's loss has been Petaling Jaya's gain, and this does not seem consistent with DBKL's stated objective to enhance KL's position as an international commercial and financial centre,” Boyd said.

Regroup's latest survey revealed that Grade A office buildings in KL were now 94.5% occupied with very little space available to accommodate large companies.

“Rental rates are also approaching record levels with the better buildings commanding over RM7 per sq ft.

“New office supply may not meet demand over the next three years and rents are likely to continue to rise. If this scenario does not improve, Malaysia is in danger of losing its competitive edge to other regional cities,” he cautioned.

Boyd urged the City Hall to review the current position and issue clear and unequivocal guidelines on new office building approvals which allow for moderate growth.

“The service sector is growing at 9.7% a year, and 200,000 new graduates emerge annually to find employment. It would be ironic if Malaysia lost out in attracting multinational regional operations simply through having insufficient quality office space,” he added.

Zerin Properties head of investments Francis Quah said the freeze should be reviewed in view of the shortage of quality office space in the city.

“The City Hall has not imposed a complete ban on new office buildings but is reviewing new project applications on a case-by-case basis. There are still new projects underway.

“While the freeze has resulted in a shortage of quality office space in Kuala Lumpur, it also has its good points. The close watch on new developments allows for regulation and planning,” he said.

Quah said there was a lot of excitement in the market with a growing foreign and local interest in the local office market.

“We see a lot of growth potential and look forward to seeing our market grow and mature to the likes of the other neighbouring cities,” he added.

Echoing Quah's views, Knight Frank Ooi & Zaharin Sdn Bhd managing director Eric Ooi said the so-called freeze had indeed left a good impact in the industry “as it helps to monitor the market where only feasible projects are approved”.

The driving forces for the office market include the country's strong economic growth of 6.3% last year, robust growth of the services sector and a growing demand for prime office space by companies in the oil and gas sector, financial institutions and information technology companies.

“Kuala Lumpur's office market will continue to see good potential in view of its skilled workforce, lower cost of living and modern infrastructure,” Ooi said.

The City Hall head of urban planning department Mahadi Ngah said the City Hall had since 2005 relaxed the ruling that the development of new office building would only be allowed if it was meant for own occupancy and now allow up to 50% of the space to be sold or leased out to other parties.

“There is no blanket freeze on new office buildings now but we look at the application on a case by case basis. Quality projects that are located in areas zoned for office buildings and have pent up demand will be allowed.”

He said the KL Draft Local Plan, which is to be released next month, would spell out the guidelines on the type of office buildings and location allowed, and other considerations, including the plot ratio and density.

By The Star (by Angie Ng)

Growing assets

AmFirst REIT eyes large properties to boost fund size


SIZEABLE PLAN: Pushpa (left) and Ooi is upbeat about the company’s growth prospects

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, wants to buy bigger assets of at least RM50 million to expand, its manager said.

Anthony Ooi, the acting chief executive officer of Am ARA REIT Managers Sdn Bhd, which manages the fund, said it is negotiating to buy two office buildings within Kuala Lumpur's Golden Triangle.

It is also looking at an out-of-town retail mall in Selangor, he said.

"Timing of the purchase depends on the talks and the due diligence. But there will be no small purchase, unlike some others which may buy properties in the RM7 million-RM8 million range," he told Business Times.

AmFirst REIT is the second largest in Malaysia after Starhill REIT, and it will be a drain on resources for a sizeable fund to study small assets, he said.

The size of AmFirst REIT swelled 45 per cent to RM835 million recently after it completed the purchase of all unsold units at The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

It had only RM490 million assets when it was restructured and re-listed under the REIT guideline in December 2006. These assets are due for revaluation next year, which will likely reflect the higher asset prices in the city.

AmMerchant Bank Bhd's executive director Pushpa Rajadurai, who is also an alternate director of the REIT's manager, said the trust will continue to grow and meet its own target of RM1 billion asset size in 18 months, and RM2 billion by fiscal year 2010.

"Malaysia still has sufficient good buildings to be acquired for property trusts. We will look abroad when the opportunities come but we don't need to actively seek for overseas acquisitions," Pushpa said.

Outside KL, it is looking at Penang and Sabah for future purchases. It will also not rule out other smaller states, Ooi added.

While office space remains the core asset of AmFirst REIT, Ooi said it plans to add more retail malls, especially from suburban areas like Petaling Jaya and Subang, with good catchment areas. It will also consider suburban office space, he added.

By New Straits Times (by Chong Pooi Koon)

KLCCP earnings likely to beat market estimates

KLCC Property Holdings Bhd’s (KLCCP) full-year earnings for year ending March 31(FY08) is likely to beat market estimates on higher average rental rates at its flaghip mall Suria KLCC and an upward appraisal of its property worth.

At last Friday’s closing price of RM2.89, the stock is also trading at a huge discount to its assets value.

The stock had tumbled 20% over the past three months, prompting some analysts to say that the sharp decline was overdone.

Currently, KLCCP market value stands at RM2.7bil, which is half of its net book value of RM5.4bil as at end of March last year.

Citi Investment Research, in a recent update on the stock, said KLCCP should be valued at par to its assets worth given the prime locations of its commercial properties.

According to Citi, the revised net asset value (RNAV) estimate for Petronas’ commercial property and investment arm is RM6.1bil, or RM4.72 per share.

“We consider RNAV a better reflection of KLCCP’s valuation, as we expect property values and rental rates to increase 10% per annum in the KLCC area,” Citi said.

KLCCP had in February completed the revaluation of Petronas Twin Towers, Suria KLCC, Menara Exxonmobile and Menara Dayabumi, which resulted in a revaluation surplus of RM427mil.

The surplus was estimated to increase KLCCP’s net asset value by about 33 sen per share.

Meanwhile, KLCCP is scheduled to release its full year results by the end of next month.

Citi said the company’s full year earnings would probably exceed market expectation.

By The Star (by Izwan Idris)