Aussie concept for Amverton Park

Did you know that a nice Australian-inspired residential development is coming up in Shah Alam?

Called Amverton Park, this 30-acre freehold development by A & M Realty Bhd, is within the established neighbourhoods of Bukit Rimau, Kota Kemuning, Kemuning Utama and Berjaya Park.

As this project is part of the company's 150-acre Bukit Kemuning Golf & Country Resort, residents have a “green lung” in the form of an 18-hole golf course next door.

The developer AMJ Properties Sdn Bhd, a subsidiary of A & M Realty, will build190 bungalows (with individual titles) over five phases. It has built three show bungalows and two more are constructed at the site.

Purchasers can choose from five designs for Phase 1- Alfresco, Grandieur, Maestro, Pavillion and Vista with features like big window panes, 20 feet front lawn, alfresco terrace, double volume ceiling in the living area, sliding glass doors, 8ft-high doors, attached bathrooms and walk-in wardrobes in the bedrooms.

The price? Only RM1.5mil to RM2.8mil for a dream home of 4,100 sq ft to 7,000 sq ft built-up and land size of 5,400 sq ft to 15,000 sq ft. About 80% of the 36 bungalows launched under Phase 1 had been sold, some to its golf club members.

Although the facade has the contemporary modern look, many aspects of the interior layout are reminiscent of Australian homes. There are features like a spacious dry kitchen that opens out to the dining area and which in turn, opens into a large alfresco terrace, reflecting the Aussie love for the outdoors.

“Once the foldable doors to the terrace are opened, you extend your dining area outdoors, and have a barbecue party,” said Steven Ng, A & M Realty Bhd executive director.

Steven Ng

Ng, who is the third son of the company's founder and executive chairman Datuk Ng Thiam Hock, spent nine years studying in Perth (he graduated at the age of 19 in 1999 with a Bachelor of Commerce degree, majoring in finance and marketing from the University of Western Australia).

He is eager to introduce Australian lifestyle into home designs.

Ng said buyers would get a complimentary A & M Lifestyle membership card entitling them to enjoy golf, clubhouse, hotel and dining privileges.

Like Australian homes, there will be no fences or walls to separate the houses in the gated community, but there will be a small gate towards the rear garden for privacy. It also has the Australian “Green Street” concept where utility cables and drains are underground.

Amverton Park will have a gross development value (GDV) of RM330mil.

Senior marketing manager Thang Ah Hong said 20 more bungalows under Phase 2 would be launched in September.

It's Amverton brand is also extended to a high-end two-tower condominium called Amverton Kiara in Kuala Lumpur that might be launched in the third quarter this year. The 2,500 sq ft to 4,000 sq ft unit would be priced around RM750 psf to RM800 psf. One tower will have penthouses at the top while the other will have a sky lounge with swimming pool and entertainment area.

Each floor will have a mix of unit sizes so that one can buy say a 4,000 sq ft unit and a 2,500 sq ft adjoining unit and create a door between them. “Buyers can have one large unit of about 7,000 sq ft, a mansion in the sky,” said Ng, adding that the project with RM500mil GDV, is 160 metres above sea level overlooking Mont' Kiara.

The company with interests in property development, hotels, plantations and investments, plans to develop a 27-hole golf course on its 2,000-acre land on Carey Island.

By The Star

Singapore property boom cooling: Analysts

SINGAPORE: Singapore's booming residential property sector is finally showing signs of cooling but projects including two casino developments should underpin long-term prices, analysts say.

The market was described by real estate giant Jones Lang LaSalle as the world's hottest in 2007, when the city-state's property prices surged 31 per cent overall.

But this year the sector has not escaped wider concerns over a US-led global economic slowdown and inflationary pressures.

Private home prices rose 0.4 per cent in the second quarter, the slowest increase in four years, the government's preliminary figures showed last week.

The second-quarter rise was also much slower than the 3.7 per cent increase recorded in the previous three months but prospective buyers waiting for huge bargains may be disappointed.

Property analysts say prices are likely to fall further in the third quarter but experts rule out massive declines because of the multiplier effect from two multi-billion-dollar gaming resorts now under construction.

Housing demand is expected to pick up when the first of the two casinos opens next year, employing thousands, said Chua Yang Liang, head of Southeast Asia research with Jones Lang LaSalle.

Some of the workforce for the resorts will likely come from foreign countries, creating possible demand for housing, he said.

"To staff these people, you need housing so there will be a potential effect," Chua said.

Foreigners currently make up more than 20 per cent of Singapore's 4.6 million population.

The Marina Bay Financial Centre, a new financial district under construction which will also feature luxury apartments, should also underpin the market in the longer term, analysts said.

Tan Huey Ying, director for research with Colliers International real estate consultants, said prices are not about to spiral downwards even though second quarter figures indicate the residential property market may have peaked.

"Singapore's positive mid-term prospects on the back of the completion of the two integrated resorts and the Marina Bay Financial Centre will help to prop prices up," said Tan.

Values may hold, or decline by no more than three percent, in the third quarter but overall for 2008 home prices could still rise four to eight per cent, said Tan.

Analysts from DTZ real estate consultancy said buyers are still interested in project launches.

By AFP

Foreigners still find good values in M’sia

FOREIGNERS still see good valuations in Malaysian properties and other assets despite the current political uncertainties.

When the ruling coalition Barisan National lost its two-thirds majority in Parliament in March, there was initial fear that foreign investors would reduce their investments in the country.

But this has been proven wrong given the high level of foreign interest and investments since the election results.

In fact, many sectors are benefiting from foreign investments and the number has grown steadily over the years.

According to the Malaysian Industrial Development Authority (Mida), the country's foreign direct investment (FDI) inflows this year is expected to surpass last year's RM33.4bil.

Outgoing Mida director-general Datuk R. Karunakaran was quoted as saying that the first four months of 2008 saw RM23.9bil investments approved, of which RM16.6bil was FDIs.

He said the amount (RM23.9bil) did not include newly announced projects by Ibiden Co Ltd, Q-Cell, SunPower Corp and Honeywell International Inc.

The combined investment by the three foreign companies is expected to hit RM9bil, bringing total FDIs to over RM20bil.

Sectors benefiting from foreign investment

Foreign investments are flowing into a host of sectors from high-end manufacturing, property development, information technology, banking and biotechnology, among others.

Japanese printed circuit-board maker Ibiden said it would invest RM1.2bil in the first phase of its printed wiring board plant at Penang Science Park.

Germany’s Q-Cells AG, the world's largest independent solar cell manufacturer had picked Malaysia to be its first manufacturing plant in Asia for photovoltaic products with an investment of over RM1bil for Phase 1.

US-based company SunPower plans to build an RM2.2bil solar cell fabrication plant in Malaysia in two phases, with the first phase comprising 14 solar cell production lines.

While another US-based company Honeywell International Corp, via its business group Honeywell Aerospace plans to invest RM115.2mil in a 220,000 sq ft avionics manufacturing plant in Penang.

Biotechnology

Malacca Chief Minister Datuk Seri Ali Rustam said the state had secured foreign investments worth RM6.5bil this year, which is about half the amount received over the last seven years.

Ali said Malacca had attracted foreign biotechnology and manufacturing companies.

“From 2000 to 2007, we attracted RM15.6bil of foreign direct investment,” he said, adding that Malacca's yearly foreign investment target was RM3bil.

Vivo Bio Malaysia Sdn Bhd, a subsidiary of India's Vivo Bio Tech Ltd, plans to invest RM450mil by year-end to build a research and manufacturing plant in Malacca for treatment of diseases.

Property development and banking sectors

Meanwhile, the Prime Minister's Department senator Tan Sri Amirsham A. Aziz said current total investment projects recorded in Iskandar Malaysia was about RM33bil, representing 70% of total targeted investment of RM47bil.

He said so far, the total number of investors for Iskandar was 160, Sabah Development Corridor (34) and Sarawak Corridor of Renewable Energy (31) respectively.

The number of investors for the Northern Corridor Economic Region and East Coast Economic Region is yet unclear.

Malaysia also attracted a fair number of foreign investors from the Gulf Cooperation Council (GCC) countries comprising Saudi Arabia, Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates.

Currently, six foreign companies from UAE, Kuwait, Saudi Arabia and Lebanon have invested in Iskandar Malaysia, while some had ventured into Islamic banking and properties.

They are Kuwait Finance House, Aldar Properties PJSC, Mubadala Development Company, Millennium Development Company, Damac and Limitless Dubai.

Kuwait Finance House (M) Bhd, (KFH) a wholly-owned subsidiary of Kuwait Finance House, GCC's second-largest Islamic lender by market value, plans to expand its capital base here by another US$100mil (RM325.48mil) this year.

KFH Malaysia managing director Datuk K. Salman Younis said the bank would still commit to invest in Malaysia despite the tougher operating conditions and political uncertainty.

Other GCC companies such as Middle East lender Al Rajhi Bank Malaysia is waiting for its international Islamic banking licence, while Abu Dhabi Commercial Bank (ADCB) recently acquired a 25% stake in RHB Capital Bhd.

The acquisition was to enable ADCB to use RHB Cap as a springboard into Asean countries such as Thailand, Brunei and Vietnam for its Islamic banking operations, while RHB Cap could capture ADCB's network for sukuk issuance in Abu Dhabi.

It is interesting to note that in a recently released Global Competitiveness Report 2007-2008, Malaysia's competitiveness had moved up to 19th position from 23rd in 2007.

Also, Kearney's 2007 Global Services Location Index (GLSI) indicated that Malaysia was among the top three best destinations in the world for outsourcing activities.

Judging by some of the foreign investments, Malaysia remained a favoured destination to do business but of course, the number can be improved and the sky is the limit.

By The Star (by Danny Yap)

Resorts World picks China firm for Universal project

SINGAPORE: China Jingye Engineering Corporation Ltd (Singapore branch) has been chosen to build the Universal Studios Singapore theme park in Singapore by Resorts World at Sentosa (RWS).

The project is worth S$705 million to China Jingye, a wholly-owned subsidiary of one of China's biggest construction conglomerates, the Metallurgical Corporation of China(MCC) Group.

The Universal Studios Singapore is part of the attractions at the S$6 billion RWS development.

RWS, in a statement said, China Jingye would undertake the general building works of the theme park. This includes structural buildings, facades, walkways and an amphitheatre.

“Universal Studios Singapore's 24 attractions, designed and pre-fabricated by renowned theme-park ride manufacturers worldwide, would also be installed under the coordination of China Jingye,” RWS added.

The Chinese government-linked MCC Group is one of the country’s top five construction-engineering companies.

The MCC has been involved in the structural design, project management and consultation of some of Chinas biggest landmark projects. These include, the Beijing Olympics “bird nest main stadium, the new Beijing Opera House and the China Central Television (CCTV) headquarters.

Last September, the MCC won a S$60 million contract to supply, fabricate and deliver 23,000 tonnes of structural steel for the RWS venture.

RWS, Asia's leading family holiday destination, is on track for a soft opening in early 2010.

RWS, has to date, awarded building contracts totalling S$2.7 billion.

By Bernama

Fewer project launches in Penang

GEORGE TOWN: There will be fewer property projects launched this year in Penang due to the rising cost of fuel and building materials.

“This is reflected in the new launches lined up for exhibition at the upcoming Malaysian Property Exhibition (MAPEX) 2008 scheduled to be held on the island from July 11 to July 13.

There are only three new launches this year for MAPEX 2008, with a gross sales value (GSV) of RM44.5mil, compared to seven last year, which had a GSV of RM300mil,” Real Estate Housing & Developers' Association (Rehda) Penang chairman Datuk Jerry Chan said at a press conference.

The three launches would see 207 housing units launched on the island and mainland.

Chan said the majority of the units launched would be priced below RM250,000 a unit but the new houses were 30% more costlier than those available in the market.

There were currently 6,571 units of houses being constructed on the island and mainland with an estimated GSV of RM1.7bil, added Chan.

Chan said in view of soaring energy and building prices, there would be no new developments of low cost and low medium cost houses, which were currently priced at RM42,000 and RM75,000 respectively.

“We are appealing to the state government to revise these prices. Otherwise developers would resort to building only expensive homes comprising less than 150 units per scheme, which does not require them to build affordable housing,'' he said.

“We are also appealing to the state government to allow developers to have higher density and larger built-up areas for projects in the city.”

Chan said Malaysia was the only country where developers had to undertake the building of low and low-medium cost units.

“Worldwide, this responsibility is shouldered by governments as is the case with healthcare and education,” he added.

By The Star (by David Tan)

80 building items may enjoy price adjustment

The Works Ministry has identified 80 items related to the construction sector which need price adjustment.

Works Minister Datuk Mohd Zin Mohamed said the items, including those directly and indirectly related to the construction industry, have been identified to be listed under the variation of price (VOP) list.

There are currently 16 items in the list.

The new items will be put forward to the Finance Ministry before they are included in the list.

"With the VOP, contractors will be able to make price adjustments on the items," Zin told a press conference yesterday after meeting contractors of Works Department (JKR) projects to discuss the rising cost of building materials.

The ministry has also met with contractor associations and come up with several proposals to help the contractors manage their projects, he added.

The proposals include having a stockpile of steel and cement to help meet supply and stabilise prices in the market.

Others include paying contractors' claims within 14 days, renegotiating government projects and imposing a windfall tax on cement and steel producers.

Zin also said it was proposed that the 10 per cent cement import tax be abolished and that contractors who have delayed projects be given extra time to finish their work instead of having action taken against them.

By New Straits Times (by Suganthi Suparmaniam)

Cagamas HKMC launches mortgage guarantee scheme

CAGAMAS HKMC Bhd has launched the country's first mortgage guarantee programme (MGP), a scheme that helps banks free up their capital so that they can give out more loans.

This is the first product rolled out by the company, an equal venture between national mortgage firm Cagamas Bhd and The Hong Kong Mortgage Corp Ltd.

The tie-up is part of Cagamas' plans to expand abroad. Cagamas HKMC plans to offer its services to markets in the Asean and Middle Eastern region after it gauges the reception in Malaysia.

"The launch of the MGP should help banks expand mortgage lending business without compromising their prudent underwriting standards," Cagamas HKMC executive director James H. Lau said.

The MGP, which covers conventional and Islamic loans, will enable financial institutions to pass on a portion of the credit risk associated with mortgage loans to Cagamas HKMC for a fee.

Banks must keep a certain amount of capital against its loans. Passing on this risk frees its money that could be used for new loans.

Cagamas Bhd's president and chief executive officer Steven Choy said the facility is especially relevant with the advent of the Basel II framework, an international standard created to promote better risk management in banks.

Basel II standards require banks to hold an equal amount of capital for the amount of risk it is exposed to, to safeguard its solvency and overall economic stability.

By New Straits Times (by Presenna Nambiar)

Bolton eyes more land in Penang

GEORGE TOWN: Bolton Bhd plans to spend RM200mil to acquire by March suitable sites in the north-east of Penang island for new residential projects, said executive chairman Datuk Azman Yahya.


Datuk Azman Yahya with a model of the Surin condominium

“We plan to launch high-end residential properties with gross development value (GDV) of between RM600mil and RM800mil.

“The properties will comprise high-rise condominiums and landed residential homes,” he said after launching the company’s RM200mil Surin condominium project in Tanjung Bungah.

“In view of soaring energy and building material prices, Bolton will price its future properties 20% to 30% higher,” he added.

Construction work on the condo project is expected to start this month and scheduled for completion in three years.

Azman said about 65% of the 198 units in the first tower were sold during the soft launch.

Another 192 units in the second tower will open for sale tomorrow, he said.

“The key features of Surin include 850 parking bays in a multi-storey car park.

“Other facilities are a gymnasium, four high-speed lifts and closed-circuit television connected to the guard post,” he added.

The units have built-up areas of between 1,307 and 2,827 sq ft and are priced from RM364,988 to RM1.2mil.

“The units have higher floor-to-ceiling height and bigger balcony space,” Azman said.

He said Bolton was lining up a new range of residential properties with an estimated GDV of RM1.5bil.

These projects will be launched in the next 12 months.

The bulk of them were in the Klang Valley, including the RM1bil Mayang scheme, Tijani 2 North, Condo 3, Bolton Court and The Piazza in Puchong, Azman added.

By The Star (by David Tan)

Bolton eyes bigger Penang land bank

High-End Residence: Azman taking a closer look at the model of the Surin Condominium project

PROPERTY developer Bolton Bhd expects to spend RM200 million to increase the size of its land bank on Penang Island, giving a boost to its newly-launched maiden project, featuring a RM130 million condominium development, in the island-state.

Bolton said it is satisfied with its initial investment in Penang and is on the lookout for additional land bank for acquisition as well as opportunities to jointly develop with landowners to bring Bolton's brand and property products to the state.

"We are currently evaluating acquisition opportunities in Penang and have seen three or four proposals," its executive chairman Datuk Azman Yahaya told reporters at the launch of the "Surin" luxury condominium project in Tanjung Bungah yesterday.

"We feel Penang would be ideally suited to serve as a hub for our planned growth in the northern region, thus our commitment of another RM200 million investment," he added.

Azman said with the RM200 million, Bolton is looking at developing residential properties with a gross development value ranging between RM600 million and RM800 million.

He said the projects in Penang will comprise high-end landed properties in gated communities as well as high-rise developments.

"We hope to complete our acquisition during this financial year," he said, adding that one of the parcels of land being eyed is in George Town.

Azman also said that Bolton has no intention of slowing down, rather "in higher-end developments where margins are high, we will be able to absorb the increase in building materials cost".

With a development value of RM200 million, the Surin project sits on 1.4ha of land and offers 390 luxury condominium units tagged from RM364,988 to RM1.2 million per unit.

The project is scheduled for completion by 2011.

Bolton's executive director Chan Wong Kwong said 65 per cent of the 198 units in the first tower have been sold prior to the official launch.

"About 30 per cent of these buyers are foreigners from Hong Kong and Singapore," Chan said.

By New Straits Times (by Marina Emmanuel)

Servcorp investing RM96mil in i-City project

SYDNEY: Australia’s Servcorp Ltd, the world’s second largest serviced office operator, is investing US$30mil over five years into state-of-the-art concierge services for I-Bhd's RM2bil i-City project.

The 72-acre integrated commercial development in Section 7, Shah Alam, would be equipped with seamless wireless access, integrated information and communications technology and building networks, as well as multimedia and collaborative tools.

“This concierge services concept will make i-City the first real estate project in Asia where all the services are connected via one network,” said Servcorp chief information officer Marcus Moufarrige.

He was speaking to reporters yesterday prior to signing an agreement with I-Bhd, who was represented by deputy chief executive officer Lim Boon Siong.

The concierge services are divided into two areas – the human services element provided by Servcorp and the innovative technology element provided by i-Office2 Sdn Bhd.

i-Office2 is a joint venture with I-Bhd in which Servcorp’s subsidiary Office Squared would hold 65% equity interest.

The concierge services would also be supported by a gigaspeed fibre optics network that would allow for complete connectivity and mobility while its “last-mile fibre optics to the units” network would have a capacity of up to 10Mbps.

Additionally, the network would also have super broadband redundancy and the components for Web 2.0, a second-generation Internet development.

Servcorp has had a presence in Malaysia since 1988 when it provided office services to Menara Haw Par. The company currently extends these services to Menara Standard Chartered and Menara Citibank.

Moufarrige said businesses locating to i-City would have a choice of whether to take up the services offered by Servcorp and the joint-venture company.

“The average fee charged to our clients in Australia is about A$140 per seat per month (per Internet connection) but it really depends on what level of service the clients want,” he said.

He added that the services would be charged on a different scale in Malaysia.

When completed in 2012, i-City would comprise a shopping mall, corporate towers, corporate suites, shop offices, serviced apartments, data centres, a hotel and an innovation centre.

By The Star (by Fintan Ng)

KSL to launch largest mall in Johor

SEGAMAT: KSL Holdings Bhd will launch in two months the biggest commercial complex in Johor, known as the KSL City.

The RM500mil project is located within Century Gardens, opposite Holiday Plaza shopping complex near Jalan Datuk Suleiman.

The project comprises a four-storey retail complex, two 26-storey hotel towers with 950 rooms and two 33-storey apartment towers.

“This is the first development in Johor combining retail, hospitality and high-rise residential living,” group managing director Khoo Cheng Hai told StarBiz after the company AGM recently.

He said the retail complex would offer 500,000 sq ft floor area and house retail outlets, a department store, cineplexes and car park.

He said the five-star KSL Resorts Hotel would be managed by a local hospitality management company.

He said the retail complex and the hotel towers would be completed towards the end of next year and the apartment blocks in mid-2010.

Khoo said the apartment towers would have separate entrances and car parks from the hotel towers.

He said KSL was confident that the hotel would do well as most hotels within the Johor Baru Central Business District currently recorded almost 90% occupancy rate.

“We are also expecting that Johor will benefit from the spillover effects when the two integrated resort projects in Singapore are completed in two years,” said executive director Ku Hwa Seng.

He said the Singapore Tourism Board was projecting some 17 million tourists to visit the republic next year.

Ku said Malaysians planning to visit the resorts would likely stay in Johor Baru as hotel rates in the republic were too costly for average Malaysian tourists.

He said the location of KSL City in the heart of Iskandar Malaysia augured well for the company due to the influx of local and foreign investors, tourists and new residents to south Johor.

Ku said KSL did not discount that the new project would be a stepping-stone for it to further venture into the retail and hospitality segments in other parts of Malaysia.

For the financial year ended Dec 31 (FY07), KSL posted pre-tax profit of RM138.3mil on revenue of RM277.4mil compared with RM94.1mil and RM266.2mil respectively in FY06.

By The Star (by Zazali Musa)

Sime Darby sells RM220m homes in nine days

PETALING JAYA: Sime Darby Property Bhd has sold over 425 properties worth RM220mil in nine days through its “Parade of Homes” showcase.

The event, which was launched on June 20 and ended last weekend, saw 15,000 buyers flocking to nine townships and more than 40 show houses in Shah Alam, Subang Jaya, Klang, Ampang and Nilai.

The company said in a statement that properties within the Putra Heights, Bukit Raja and Bukit Jelutong developments attracted the most interest.

Executive vice-president for property development and strategic investments, Datuk Tunku Putra Badlishah Tunku Annuar said the response had exceeded the company's expectations.

By The Star

Meeting to discuss Low Yat’s hotel plan

GEORGE TOWN: The Low Yat group’s proposed hotel project on the famous millionaire’s row, Jalan Sultan Ahmad Shah, will be discussed next week at a Penang Island Municipal Council (MPPP) meeting.

Sources told StarBiz the meeting, scheduled for July 10, would consider the plans submitted for a 23-storey hotel with 399 rooms on a 5,759 sq m site.

So far no approval has been given for the project.

“If there are no objections from the council approving body, the plans for the hotel would be approved. Construction work can begin as soon as approval is received,” the sources said.

The group is reviving the hotel because it believes the present state government has adopted a pro-active business stance.

However, it has not yet decided on the subsidiary to undertake the hotel development. The Low Yat group’s building plan for a three-storey commercial property scheme in Batu Ferringhi was approved last month.

“The project comprises nine shop-lots and 18 office units,” the sources said.

The group's plans for a residential project comprising 101 bungalows, 121 apartments and 18 villas in Batu Ferringhi, however, it have yet to be approved.

In 2005, executive chairman Tan Sri Low Yow Chuan had criticised the then state government for taking a long time to approve projects and for not being business-friendly.

The group is responsible for the development of the country’s first five-star hotel, Federal Hotel, in the 1950s.

It also developed the City Square shopping mall and Crown Princess Hotel, both in Kuala Lumpur.

By The Star - StarBiz - (by David Tan)

Govt urged to stabilise building material prices

A TRADE association has warned that the building material crisis could threaten the entire economy if it is not solved quickly.

Master Builders Association of Malaysia (MBAM) president Ng Kee Leen said that prices of building materials, especially steel bars, were rising too fast.

"If the government does not take immediate action to stabilise the prices, a negative chain of events can, and will, happen," he told reporters at a press conference in Kuala Lumpur yesterday.

He said the government should cover the ground and see why many contractors were not taking or bidding for jobs, and why contractors were giving up jobs after clinching them.

"If there is no remedial action now, this crisis in the construction sector can cascade into the banking sector and pull the whole economy down."

Ng said that many small contractors, who had taken up jobs at last year's pricing, were now forced to either wind up or give up the jobs.

This means that developers will suffer because they cannot hand over the partially completed houses to buyers, who in turn will lose out because they have to pay their housing loans without actually taking possession of the properties.

Building material suppliers, too, will suffer because the contractors may not be able to pay them, Ng added.

Asked about the government's decision to incorporate a price-fluctuation clause in contracts from May 12 this year, Ng said: "It doesn't solve problems for jobs undertaken before that date.

"The solution is to stabilise steel bar prices because contractors are also unsure about taking on jobs offered by property developers.

"Given the present scenario, we definitely cannot meet the 5.5 per cent growth forecast for the construction sector."

Ng said that banks will be hit as well if they have to grapple with mounting non-performing loans when the contractors cannot pay up, and this could threaten the entire economy.

He recommended that the government set aside at least RM1 billion for a three-month stockpile of steel bars.

"Should the steel bar price jump higher than the current RM4,300 per tonne, the government can then release this stock for local consumption, at least for some of the government projects, so that contractors are not forced to abandon the jobs halfway due to a lack of funds."

Also present at the press conference was Chartered Institute of Building Malaysia (CIOB) president Isaac Sunder Rajan.

The CIOB and MBAM will jointly organise the International Construction Conference 2008 from August 27 to 29.

The three-day conference in Kuala Lumpur will focus on project management of mega-sized projects and contractual claims.

By New Straits Times (by Ooi Tee Ching)

Revise construction industry growth forecast, Govt told

KUALA LUMPUR: Growth of the construction industry as forecast in the mid-term review of the Ninth Malaysia Plan (9MP) should be revised in view of rising raw material prices, said Master Builders Association Malaysia (MBAM) president Ng Kee Leen.

“We feel that growth within the construction sector should be revised a bit lower, consistent with Bank Negara's revised gross domestic product growth forecast,” Ng told a press conference yesterday.

According to the mid-term review report, the construction sector is expected to grow at 5.8% per annum, underpinned by activities within the civil engineering, residential and commercial property sub-sectors.

The construction sector grew 4.6% last year compared with 0.5% in 2006. It contracted by 1.6% in 2005 and 1.9% in 2004.

Ng believes the construction sector would record positive growth in 2008.

However, the hike in prices, especially for steel and cement, was hampering the industry's growth, he said.

“Since the oil price hike, many construction projects have slowed down,” he said, adding that the deferment of Penang's outer ring road and monorail projects would definitely affect growth.

MBAM executive director Chan Fook Cheong said the slowdown was imminent despite the Government's decision to pump in RM30bil for development expenditure under the 9MP due to the rise in construction material costs.

“We welcome the move by the Government, but we feel it is more important for the Government to address the uncontrolled increase in prices of building materials,” he said.

Chan noted that if the Government did not look into the matter soon, many construction projects would come to a standstill.

“We have approached the Government (to address the issue) but the reaction has not been encouraging,” he said.

On another note, MBAM, the Chartered Institute of Building Malaysia and Universiti Teknologi Mara will jointly organise the International Construction Conference 2008 at the Kuala Lumpur Convention Centre from Aug 27 to 29.

Ng said the conference would bring together construction players from around the world to address issues affecting the industry and discuss good management practices.

By The Star

SP Setia beefs up commercial assets

LIEW: SP Setia has been achieving monthly sales of up to RM120 million from its mature townships

SP SETIA Bhd, Malaysia's most valuable property developer, plans to build its first retail mall for RM750 million as part of plans to have more commercial assets.

Almost all of the group's income now comes from residential property but it wants to change that strategy.

"We are planning to increase our commercial content from three per cent now to some 20 to 30 per cent in two to three years. We want to move into commercial as the properties will give us higher value," group managing director Tan Sri Liew Kee Sin told reporters at a briefing in Shah Alam yesterday.

The four-level mall will be built within Setia City, the commercial hub of its flagship township, Setia Alam, in Shah Alam, Selangor. It will have almost as much space as the popular Mid Valley Megamall, with a gross floor area of 1.23 million sq ft.


SP Setia's unit, Bandar Setia Alam Sdn Bhd (BSA), will build it with Lend Lease Asian Retail Investment Fund 2 Ltd (ARIF) via an equally owned joint venture firm, Greenhill Resources Sdn Bhd.

ARIF is a real estate fund advised by Lend Lease Investment Management Pte Ltd, which is part of Lend Lease Corp Ltd, an Australian property group.

The mall is the fund's first retail project in Malaysia.

The mall, which may include a hypermarket, is expected to be opened by the end of 2011 as construction starts in the next six months.

At the signing of the joint venture agreement in Kuala Lumpur yesterday, Liew said Greenhill will buy 12.2ha from BSA for RM119.57 million.

There is also a hospital and university campus project in the pipeline at the 63.2ha Setia City, he said.

"We expect profits from the retail mall to flow through after 2011," he added.

Liew did not rule out building more commercial properties with ARIF, adding that it would sell more land to the Australian fund if it wants.

Meanwhile, Liew said SP Setia is on track to meet its RM1.5 billion sales target this year as it has been achieving monthly sales of up to RM120 million from its mature townships.

It has 16 ongoing projects worth RM30 billion.

The firm made a net profit of RM260 million for the 12 months to October 31 last year. Its revenue was RM1.15 billion.

Liew said SP Setia will continue to launch new projects despite weak market sentiments globally. It is also on track to launch its RM2.5 billion EcoLakes project in Vietnam by October.

By New Straits Times (by Sharen Kaur)

SP Setia to build RM750m retail mall

KUALA LUMPUR: SP Setia Bhd will build a RM750mil retail mall in Setia City, a commercial hub at flagship township Setia Alam in Shah Alam.

The developer, via subsidiary Bandar Setia Alam Sdn Bhd, yesterday entered into a 50:50 joint venture with Lend Lease Asian Retail Investment Fund 2 Ltd (ARIF) to develop the mall. ARIF is part of Lend Lease Corp Ltd, a multinational property development group.

The joint-venture company, called Greenhill Resources Sdn Bhd, will acquire 30.5 acres of freehold land in Precinct 1 from Bandar Setia Alam for RM119.57mil.

The proposed mall has a gross floor area of about 1.23 million sq ft. Greenhill has also appointed US-based design architect The Jerde Partnership to create an iconic landmark.

SP Setia group managing director Tan Sri Liew Kee Sin said the project was expected to contribute to the group after its completion at end-2011.

Tan Sri Liew Kee Sin (left) explaining the retail mall concept to Selangor state executive councillor Teresa Kok.

“We expect to start building the mall within six months. We are currently waiting for approval from the Selangor government,” he said after the agreement signing yesterday.

To a question, Liew said the higher building material prices had already been factored in the gross development value of the mall.

“The mall will help us achieve our 20% target of building commercial products in the next two to three years from 2% currently,” Liew said, adding that the mall was expected to attract customers from the larger Klang Valley population as well as Setia Alam and Setia Eco Park townships.

He said there were about 350,000 households within 30-minute driving radius of the mall.

“We have also reserved land around the mall area should the Federal Government decide to extend the light rail transit system to that part of Selangor,” he said.

On its financial performance, Liew said the group was confident of achieving total sales of RM1.5bil for the current financial year ending Oct 31. He expected the group to post better fourth-quarter results following improved sales.

“We have been recording sales of RM100mil to RM120mil monthly,” Liew said, adding that the group registered RM50mil revenue over the weekend.

Commenting on SP Setia’s project in Vietnam, he said the group would continue with its launch plan despite the slowdown in the country’s economy. He said the launch would be held in October when its showhouses were ready.

“What is happening in Vietnam is similar to what we experienced in the 1997/98 financial crisis. Its interest rate is about 20% while ours now is about 6%.”

The project would benefit SP Setia in the long run, especially when Vietnam turned around, Liew said, adding that going forward, the group would be buying more land there.

By The Star

Bolton to invest RM200m more in Penang property

BOLTON Bhd will invest another RM200 million in property development in Penang, following a successful pioneering effort with Surin, a 28-storey freehold luxury condominium project.

Bolton’s executive chairman Datuk Azman Yahya said there were three to four proposals for residential projects being contemplated in the central Georgetown area of Penang.

“We will focus on residential projects, both high-rise and landed properties,” Azman told reporters after launching the RM130 million twin-tower Surin venture in Penang today.

Azman said the main reason for Bolton to invest in Penang was that property value has remained stable despite increases in fuel prices and the uncertain economic scenario in Malaysia.

“About 65 per cent of the 198 units in the first block of Surin were snapped up at the launch. Thirty per cent of the buyers were from Hong Kong and Singapore. This is an indication of how warmly, development projects such as Surin, are received in Penang

“I believe Penang will be a good hub for Bolton’s planned growth in the northern region and thus the commitment of another RM200 million in investment,” Azman added.

As a luxury condominium project, Surin is located amid the hills and the sea in Tanjong Bungah. The units in Surin range from 1,307sq ft to 2,827sq ft in size and are priced between RM364,988 and RM1.2 million each.

By Bernama

Builders face 20pc rise in costs

MALAYSIAN builders face a record 20 per cent increase in costs this year, which may prompt some of them to scrap projects, the nation’s largest surveyor said.

Average building costs rose 11 per cent in the first six months, with steel making up bulk of the increase, Loo Ming Chee, director of Davis Langdon & Seah (M) Sdn Bhd, said in an interview in Kuala Lumpur yesterday. Costs rose 12 per cent last year.

The increase is “unprecedented,” Loo said. “I’ve never seen anything like it in my 20 to 25 years of experience.”

Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi in the past two months scrapped price controls on steel and cement and raised gasoline and power prices as record crude oil costs forced the government to cut subsidies. Tenders submitted this year show contractors expect steel prices to jump by as much as 50 per cent to RM4,800 (US$1,470) a ton from RM3,200, Loo said.

The government last month shelved at least US$1.1 billion in public works projects as soaring commodity prices forced it to spend more on food security.

UEM Group, the main contractor of a second bridge to the Malaysian island of Penang, said its costs may climb to more than RM5 billion (US$1.5 billion) from an estimated RM3.36 billion on higher raw material prices, Business Times reported today, citing the UEM managing director Ahmad Pardas Senin.

Slowing Growth

Malaysia’s central bank Governor Tan Sri Dr Zeti Akhtar Aziz said on June 29 soaring food and energy prices may hurt household spending and damp economic growth, slowing expansion in 2008 to below its March forecast.

The economy may grow between 4.5 per cent and 5 per cent this year, she said, citing “preliminary” estimates. The central bank in March forecast expansion of 5 per cent to 6 per cent.

The measures put many building contractors with no cost escalation clauses in their tender contracts in a bind, forcing them to pull out from projects, he said.

“Contractors are not taking the risk anymore” and would rather forfeit their 5 per cent performance bond in their contracts, said Loo. “Everyone has to face the reality” of higher costs.

Developers will also have little room to pass on the higher costs to consumers because rising food cost and inflationary pressures are eroding their incomes, Lee said.

Developers are “facing an economy with tightening disposable income and the possibility of an economic slump,” Davis Langdon said in its July quarterly newsletter. The “sector is now stuck in a proverbial no-man’s land.”

By Bloomberg

2nd Penang bridge's cost may breach RM5b

UEM Group Bhd, the main contractor of the second Penang bridge, says the total cost of the project is now RM4.59 billion, but it can even breach RM5 billion if prices of raw materials rise further.

"The costs of these items can only be determined as and when we procure them," managing director Datuk Ahmad Pardas Senin told reporters during a site visit at Batu Kawan on mainland Penang.

The bulk of the cost, or RM3.32 billion, is for the portion of the bridge over water, followed by RM997 million for the portion over land. Another RM285 million is for the design, concept and preliminary works that was agreed with the government.

However, UEM can pass on additional costs if the price of materials like steel, is higher.

"I believe that without the fluctuation clause (in an agreement signed between UEM and the government), no organisation will be willing to start any construction because you will definitely be running at a loss," said Ahmad Pardas.

"I would also like to clarify that the original costing for the whole project is RM3.6 billion and not RM2.7 billion as reported by some media previously.

"The RM2.7 billion was actually referred to the cost of building the 17km-bridge span over water. As the construction of a bridge would also include those built on land, another RM900 million should also be included in the original costing as it was allocated to build expressways, interchange and toll plazas," Ahmad Pardas added.

The 24km second Penang bridge (of which 17km will be on water) will link Penang Island and Seberang Prai.

UEM Construction Sdn Bhd, a subsidiary of UEM Builders Bhd, has named port builder and bridge construction firm China Harbour Engineering Co Ltd as its main contractor.

UEM Group now holds the concession for the first Penang bridge. Under that agreement, UEM could seek compensation if a second bridge was built.

However, Ahmad Pardas declined to say what UEM is planning to do, saying there are many ways to deal with the issue.

UEM Group also yesterday indicated its intention to tender for the concession rights of the second bridge.

"The company has the experience and knowledge as its is currently managing two important crossings which are the Penang Bridge and the Malaysia-Singapore Second Link.

"All these will definitely help justify why UEM Group should be the most suitable party ...," Ahmad Pardas said.

Meanwhile, UEM is set to buy 112ha of land in Batu Kawan and Batu Maung for the project. It is expected to pay a total of RM57 million in compensation to affected parties which include private land owners and Penang Development Corp.

By New Straits Times (by Marina Emmanuel)