Changing the face of Petaling Jaya

A New generation of office buildings have mushroomed in several parts of Petaling Jaya over the past few years in tandem with growing demand for better office space outside the city centre.

However, as the economy faces tough challenges in view of the current global financial crisis, the local property market has also experienced a general slowdown. The consensus among property developers is that times would be “bad” next year, although few would admit it openly.

Some developers who joined the office market craze in Petaling Jaya in the past few years may be lucky as they have managed to complete their projects and sold or tenanted out most of their office and retail spaces.


At Jaya One, residents have more choices in terms of dining and shopping.

These are the new generation strata office developments where some of them have retail components. They are mainly found along the Federal Highway (mostly purpose-built integrated offices like PJ City, PJ8) and in Section 13, 14 and 19 like Jaya 33, Jaya One, The Quill 9 and 3 Two Square.

Affluent townships like Bandar Utama and Taman Tun Dr Ismail (TTDI) are also seeing several new office projects (Menara Surian next to Ikano Power Centre and three in Bandar Utama City Centre viz Plaza IBM, KPMG Tower and 1, First Avenue. With Bandar Utama being awarded the MSC Cybercentre status in October, it would enhance the value of properties there).

Ken Group is also planning to build an office block in TTDI.

Coming up in the Kampung Kayu Area is 10 Boulevard and nearby, just after the Damansara toll plaza is the new Merchant Square.

There are many more being planned or under construction.

Those that have just been launched or just completed may face an uncertain future. This may be partly due to a softening market that is expected to get worse next year.

Although oil prices have dipped recently, there are still fears that it might jump next year, causing another round of fears and uncertainty. The global financial “tsunami” may hit our shores hard next year.

Meanwhile, a rough poll shows that generally the office market in Petaling Jaya, especially for the new developments, are holding up fairly well.

Businesses today want to be seen as progressive and not holed up in some old shop houses. They do not mind paying a premium to own or rent offices that are well located and have lots of amenities.


Chan: PJ people can now work in PJ and this has helped to reduce traffic jams.

S K Brothers Realty Sdn Bhd general manager Chan Ai Cheng points out that employees are also choosy in not only who they are working for, but also where they work, as in location.

“An interesting thing while marketing 3 Two Square is that we noticed that businesses were moving out of the older shop offices and shop houses to new developments as their former image had made it difficult for them to hire staff, much less retain them. Young graduates today are looking at working in fine offices, and places with a nice address plus extra perks. It reflects the changing times,” she says, adding that many companies who had their roots in Petaling Jaya were also reluctant to relocate elsewhere.

SK Brothers, she says, is one such company that had bought office space in 3 Two Square which is very near its former office in Paramount Garden that it had been operating since 1979.

“When we bought our office space in 3 Two Square, prices were around RM260 psf to RM280 psf but it has since gone up. We transacted a unit at 3 Two Square early this year for RM315 psf. Recently, we transacted another office space just above our unit at RM380 psf. Office rental rates there are in the region of RM2.30 to RM2.70 psf,” says the daughter of SK Brothers founder Charlie Chan.

Chan says she has a friend who bought a unit at 3 Two Square a few months before completion and managed to almost immediately rent out her unit to a pharmaceutical company; for a year now, she has been enjoying rental returns of close to 10% per annum.

Chan says her company’s decision to buy a unit in 3 Two Square was based on factors such as accessibility, matured neighbourhood, track record of the developer, ample car park bays and unique features including its wide frontage lots with a minimum of 28ft for high advertising exposures.

She said Quill 9 at Jalan Semangat which is due for completion soon has BMW as its ground floor tenant. Developed by the Quill Group, it has big floor plates of 20,000 sq ft to 50,000 sq ft with rentals from RM4.30 psf.

“All these new developments are a welcoming change for residents of Petaling Jaya. I have lived in PJ all my life and in the early days there was only Jaya Supermarket and the Right Angle in Section 14,” she adds.

“Today with Jaya One, Jaya 33 and others, residents have more choices in terms of dining and shopping, As more companies relocate their offices here, it has also enabled PJ residents to find jobs nearer their homes. PJ people can now work in PJ and this has helped to reduce traffic jams and improve people’s life,” she adds.

Instead of developing traditional type shop houses, developers have differentiated themselves with new products and concepts.

For example, Jaya 33 has a hyper office concept, VSQ (pronounced as V Square) has corporate offices with serviced apartments, 3 Two Square is marketed as hybrid shop offices while Jaya One in Section 13 (along Jalan Universiti) has a mix of stand alone office block, and restaurants designed in courtyard styles.

The new projects along the Federal Highway include the newly completed PJ8, PJ City and fairly new Menara LYL.

A 6-storey office block with two basement car parks is under construction two lots from Menara LYL. These, along with Menara Axis, Crystal Plaza and the row of motor showrooms (Mercedes-Benz, Chevrolet, Mazda, Ssyangyong, VW, Naza World, Subaru and Ford on the opposite of the highway) are transforming this part of Petaling Jaya into a vibrant office cum retail hub.

By The Star (Stories by S.C.Cheah)

I-BHD Building a legacy

I-BHD executive chairman Datuk Lim Kim Hong thinks he is building an intelligent city. He is doing that and more. He is building a legacy.


Lim likens i-City to Hong Kong’s Cyberport.

Lim likens i-City to Hong Kong’s Cyberport and to Dubai’s Internet City and Media, but on a very much smaller scale. His two boys, Boon Siong, 35, and Ricky, 31, are deputy CEO and chief innovation officer respectively, are helping him.

Lim, 58, has reached a stage in his life where financial returns are no longer the main driving force. He wants to make a contribution to society. The other force driving him is his interest in technology and innovation.

Lim is not the regular entrepreneur. In the 1970s, his corporate vehicle Sumurwang introduced Dreamland brand of mattresses. Dreamland Holdings Bhd subsquently diversified into the stainless steel industry in the early 1990s and was renamed Kanzen Bhd.

Sumurwang later divested Kanzen, took an interest in Sanyo Industries Malaysia Bhd, renamed it I-Bhd and brought out a plethora of “i” brand of digital products. In 2006, I-Bhd went into the property development sector. On the unrelated nature of his past ventures, Lim says the formula remains the same.

“The word today is ‘innovation’ and because we have gone into property development, I want innovation to play a bigger role in what we put up,” he says.

When he steered the company into property development several years ago, the plan was to ultimately have two revenue streams - property development and technology - independent of each other.

Says its director Eu Hong Chew: “In about five years, property development may contribute between 60% and 70% to the group and technology the rest. One of the ways would be to offer our IT services to other developers. This will provide us with an independent IT revenue stream. The idea is to take their IT services out of i-City into other projects.

Eu says as the economy becomes more challenging, companies will look towards technology, especially IT, to help control and manage their business. “Despite the current global slowdown, our broad business direction remains relatively unchanged,” says Eu.

Like KLCC, Sentral, Mid Valley City, Bandar Utama city centre, Lim is delighted that i-City has already been given MSC Cybercentre status. Phase one, comprising about 300,000 sq ft of office space, is officially open for leasing.

Phase two with 200,000 sq ft of office space in three and five-storey units will be ready in the third quarter of next year. This will be another en bloc sale. They are in talks with investors from the Middle East, Japan, S Korea and Singapore.

“When the customer moves in, all the network, telephone infrastructure will be ready,” he says.

The entire 72 acres will take be ready in 2015 and comprises a mall with cinema facilities, several office towers and a lake of about 40 acres and park, a hotel and a small number of residential development.

Work on the mall is expected to begin in the first quarter of next year and will take three years go complete.

Eu says when i-City was planned three to four years ago, they asked themselves: What does knowledge-based office workers want? Broadband, events hall, concierge, parks and supporting amenities like food and beverage, malls and retail and a well-managed entity came into mind.

With their joint-venture partners - Sydney-based ServCorp and US-based networking equipment supplier Cisco Systems Inc among two of them - Eu and his team began to package the space accordingly.

“We are not doing a regular office commercial project, we are targeting a category of clients who like the nice perks and facilities that come with space, greenery and conveniences,” he says.

A central data centre will house the computers instead of individual companies having their own server rooms. This will be ready in the first quarter of next year. ServCorp will manage the place and Cisco, its broadband element.

There have been a lot of behind-the-scene negotiations to get the local authorities approvals for entertainment, tourism and technology elements. Incidentally, there are no cinemas, pubs or other forms of entertainment in Shah Alam due to state restrictions so i-City will certainly transform the township.

Notwithstanding the global crunch, the office environment is moving towards a greater need for conveniences, which is why ServCop and Cisco have been brought in, says Eu. When the project was first launched three years ago, the gross development value was RM1.5bil. It is estimated to exceed RM2bil today.

I-Bhd will keep between 30% and 40% of the development for recurring income and sell the rest to institutional investors. The mall, all the car parks and office towers will be kept for recurring income.

“In order to comply with MSC requirements, we have to manage the place and as such, we might as well deal with as few authorities as possible, hence, the en bloc sale. That was how it all evolved two to three years ago.

“I-City will be on a very much smaller scale compared to the international intelligent cities in Dubai and Hong Kong. As for the MSC Cybercentres in Bandar Utama, Sentral and Mid Valley, these are developments which are about 10 years old. It was only subsequently that they were given MSC status. Unlike them, we are building I-City from ground zero,” says Eu.

By The Star

Rates still attractive

Real estate agent Daniel Goh of CBD Properties is a busy man these days.

Despite all the gloom and doom about the global financial crisis and general softening market, he still sees the Petaling Jaya (PJ) office market rental rates and values holding well.

Goh is confident that more businesses will relocate to Petaling Jaya as it is more affordable than Kuala Lumpur.

“Companies are moving from the city centre to PJ, Shah Alam and Klang where the rentals are lower and also nearer to their employees’ homes,” he says, adding that during a downturn, larger companies might downsize their operations and go for smaller but modern offices; PJ has many new ones to offer.

“I just closed a deal to rent out a 6,000 sq ft office space in Jaya One in Section 13 for about RM2.50 psf inclusive of maintenance fees,” he says, adding that he had also recently done a deal to rent out a 6,400 sq ft office space in Brem Tower in Kelana Jaya for RM3 psf.

Goh has also found several tenants for Menara LYL at Jalan 51A/223 which is ideal for companies looking for bigger spaces from as low as 7,500 sq ft to an entire floor of 30,000 sq ft.

Despite the asking rent of RM4.50 psf, which is higher than the RM2.50 psf to RM3 psf in other areas, this new, modern building is almost fully occupied with tenants like Jaya Palace, McCannWorldgroup, Red Oven, Jobhunt and Standard Chartered Bank.

Office workers from Menara LYL and its adjacent Menara Axis, Crystal Plaza and some older buildings can walk to an LRT station in front of their offices.

In the 1970s, there were only a few buildings at the intersection between Jalan Utara/Jalan Barat and the Federal Highway. They include the former Jaya Puri Hotel (now called PJ Hilton) and the Asia Jaya shopping mall. Later came the Armada Hotel.

Today, this area is a hive of activities. Coming up is Malton’s VSQ office cum serviced apartment project next to the Tun Hussein Onn Hospital.

Right at the highway intersection is the newly completed RM250mil PJ8, an iconic landmark. Located on the former 3.8-acre leasehold, Cycle & Carriage showroom site opposite PJ Hilton, this L-shaped development comprises three office blocks (12, 13, 17 stories) and a 38-storey tower (tallest in PJ) with 310 serviced suites. It has 1,100 parking bays.

Developed by land owner Mega First Corp Bhd and IJM Corp Bhd, the development is set to be the latest “happening” place with a 23,000 sq ft plaza, elevated six metres above ground.

IJM Land Bhd managing director Datuk Soam Heng Choon says all three stratified office blocks had been sold (one sold en bloc) while more than 85% of the serviced apartments had also been sold, leaving only the bigger units. Mega First had also occupied substantial office space there.

He says the early batch of office suites had already appreciated in value and were now worth RM560 psf.

Contrary to talks that it might be difficult to rent out the office suites at RM4 psf to RM4.50 psf, Soam says owners had rented out many of their units, and there had been many enquiries for 20,000 sq ft to 30,000 sq ft space.

Soam says office rentals in the city were more expensive. For example, KL Sentral offices were being rented out for between RM7 psf to RM8 psf.

Kim Realty Sdn Bhd chief executive officer Vincent Ng says the new strata titled offices with security features and retail components were attracting certain companies especially small foreign firms who were image conscious.


Ng: Strata titled offices attracting small foreign firms who are image conscious.

On the office market in the Damansara area, Ng says rentals and values in Damansara Jaya were generally lower than those in SS2 and Damansara Utama commercial areas.

He says rentals for the first floor office space in Damansara Jaya was about RM1,500 to RM1,800 a month while the ground floor rentals were as low as RM3,000 to RM5,000.

The ground floor rental of SS2 ground floor shops could be as high as RM10,000 a month and the price of a shop house there were in the region of RM3.5mil to RM3.6mil.

By The Star

Downturn in Asia property marts to accelerate in 2009

HONG KONG: Asia's property markets are about to be hit by the global economic downturn with apartment prices and office rents in Hong Kong and Singapore set to skid more than 20 per cent by the end of 2009, a Reuters poll on showed yesterday.

Tokyo residential prices are forecast to fall 10 per cent by the end of next year while Grade A office rents and capital values are seen slipping by up to five per cent, according to the poll of financial institutions and property consultants.

Hong Kong residential property prices, already down 15 per cent from a peak earlier this year, are set to drop 20 per cent.

"They are heading back to levels seen during the SARs outbreak in 2003," said Leland Sun, founder of Hong Kong-based Pan Asian Mortgage Co Ltd.
"Although mortgage rates are low, at around three per cent, banks are reluctant to give 70 per cent mortgages because of declining economic conditions."

In Singapore, home prices fell 2.4 per cent in the third quarter of 2008 - marking the end of a four-year housing boom - and will drop another 21 per cent by the end of 2009.

The downturn in Asian property lags the end of the property boom in the US and Europe but will be felt more keenly next year. In comparison, Reuters polls forecast a 6.4 per cent drop in US house prices in 2009.

Hong Kong, Singapore and Japan are all now officially in recession. In Japan, more than 400 small and medium-sized developers and real estate firms have gone out of business in the past year as the residential market has turned down and as tighter credit has made it harder to finance property deals.

Office supply in Tokyo is relatively tight but rents at new buildings have started falling for the first time in six years.

Hong Kong, Asia's biggest international financial centre, will probably be most exposed to retrenchment in the financial sector. HSBC said this week it would lay off 500 staff in the city although redundancies by banks in Asia will be less than in New York or London.

As finance companies are locked into long leases, falling demand will filter through slowly, meaning further downside for office rents and prices in 2010 and possibly 2011, analysts said.

Capital values of Grade A office space in Hong Kong are poised to slump 30 per cent between while office rents are expected to tumble 26 per cent, according to the poll.

Office rents in Singapore have quadrupled in the past five years as companies expanded amid limited supply. As supply now looks to overshoot just as companies are cutting back, Grade A rents are set to drop 21 per cent by the end of 2009 and prime office capital values will slide 25 per cent.

By Reuters

TA Enterprise aims to list property arm in Q1

PETALING JAYA: TA Enterprise Bhd expects to list its property arm TA Global Bhd on the main board in the first quarter of next year following the Securities Commission’s approval recently.

Managing director and chief executive officer Datin Alicia Tiah said the group was arranging with the underwriters on the portion of shares to be allocated to bumiputras.

“Initial public offerings (IPOs) in recent times were not fully subscribed.

“I think we would need to see how we are going to allocate the bumiputra portion following the Government’s relaxation of the rules,” she said.

The Government recently announced that it was relaxing the minimum 30% bumiputra equity requirement for public-listed firms. TA Enterprise had earlier targeted to list TA Global by next month.

TA Global’s listing exercise involves a proposed rights issue of 860 million new shares and a public issue of 350 million new shares at 50 sen per share.

TA Enterprise had earlier proposed to sell 875 million TA Global shares to bumiputra investors. It also proposed a capital distribution to shareholders via a share capital reduction from RM1 per share to 50 sen.

The proceeds from the proposals would total RM437.5mil. TA Enterprise is expected to recognise a capital gain of RM924.9mil.

Although the group is cash-rich, Tiah said, it would still want to raise more funds through an IPO because it needed more cash to buy assets at this time as the prices of properties were easing.

As of July 31, the group’s net cash and cash equivalents totalled RM451mil.

“We would still need more cash if we were to buy assets overseas.

“For investments in Australia, the weakening Australian dollar vis-a-vis the ringgit would enable TA Global to buy more properties there,” she said.

It currently owns Radisson Plaza Hotel in Sydney that had an average occupancy rate of 82% in July and a market value of A$120mil.

“Everything is at a discount now and I would say there’s about 25% discount from currency gains due to the strengthening of the ringgit (against the Australian dollar),” she said.

Furthermore, Tiah said, it was a good time to buy properties now because many prime properties held by hedge funds are available following a massive redemption by hedge funds.

“That is why this IPO is very important to us. If we are successful in raising the money, this would create an opportunity for the group to buy good assets with highly discounted prices,” she said.

Meanwhile, deputy chief executive officer Tiah Joo Kim told StarBiz that TA Global would launch an international brand for the newly acquired RM107mil Coast Whistler hotel by the first half of next year.

He said the group would develop hotels that carried its own brand, complete with different concepts and themes.

“We want to study the market segments and create different themes and concepts to suit the different market segments,” he said, adding that the acquisition of Coast Whistler would be completed by next month.

Joo Kim said TA Global would also develop a mixed development project worth some RM1.27bil on 3.3 acres at the corner of Jalan Imbi and Jalan Bukit Bintang, Kuala Lumpur.

By The Star (by Shannen Wong)

YTL Corp hunts for acquisitions

KUALA LUMPUR: YTL Corp Bhd says it has a “war chest” of RM12bil and is hunting for acquisitions as asset values decline.

“We have an army of people combing through deals,” managing director Tan Sri Francis Yeoh said in an interview with Bloomberg Television yesterday. “Valuations are going down by the day. I’ve been waiting for this moment for a long time.”

The global recession has sent every major benchmark stock index worldwide tumbling at least 30% this year after the collapse of banks and insurers from the US to Japan. YTL could borrow six or seven times more than its cash for larger deals, Yeoh said, suggesting valuations might be near their bottom.

“It’s the best time to buy assets which are at distressed levels,” said Jason Chong, who helps oversee US$1.6bil of securities, including YTL shares, as chief investment officer at UOB-OSK Asset Management.

“In times like this, cash-rich companies like YTL can afford to cherry-pick.” he said.

While the company would maintain a “steady dividend flow,” YTL investors shouldn’t be surprised if dividend growth eased to allow the company to make acquisitions, Yeoh said.

YTL, the owner of resorts across Malaysia and the Ritz-Carlton and JW Marriott hotels in Kuala Lumpur, was assessing businesses in the property, power-generation and water industries, Yeoh said. He wouldn’t name specific targets.

It is particularly looking for deals in Singapore, where rents are falling, and in Britain and Australia, where the domestic currencies have weakened. The ringgit is up 17% against the pound sterling and 32% versus the Australian dollar in the past six months.

“If you buy a pound asset today, you can’t go that wrong,’’ Yeoh said. “Every time there is a currency implosion, you are at an advantage. A lot of deals are beginning to be quite salivating.’’

In south Australia, where YTL owns 33.5% of ElectraNet Pty, a power generator with a 200-year licence, YTL was looking at power and transport infrastructure assets to buy, Yeoh said, adding that sellers needing cash had approached YTL.

YTL in October agreed to pay S$285mil for control of Macquarie Prime Real Estate Investment Trust, owner of stakes in two Singapore shopping malls. YTL last year bought an apartment building in Singapore for a then-record S$435mil.

YTL favoured assets that already generated cash and were regulated, such as Britain’s Wessex Water, rather than those needing investment, he said.

By Bloomberg

TH Properties to provide healthcare at Bandar Enstek

KUALA LUMPUR: Lembaga Tabung Haji’s property arm TH Properties Sdn Bhd and Primanora Sdn Bhd, will provide healthcare services in its flagship project at Bandar Enstek in Negri Sembilan for the aged and elderly.

“Besides healthcare services, the first phase of the development, Resort Living@enstek, will also offer various social, cultural and educational activities for residents,” TH Properties’ chief executive Zaharuddin Saidon told reporters after signing a memorandum of understanding here yesterday.

He added that the development would be on a 12ha land in Bandar Enstek, with a gross development value (GDV) of RM30 million. Construction will start in June 2009 and is scheduled for completion within two years. Bandar Enstek is a RM9.2 billion township which will spread over 2,000ha when fully completed in 2025.

“There will be about 60 units of bungalows in the area, which cost RM500,000 to RM1 million per unit. We are targeting the elderly of 60 years old and above,” Zaharuddin said, adding that it was also looking to provide similar services to the elderly in Ipoh and Penang.

Besides the Resort Living@enstek, the property developer is also eyeing suitable locations in Bandar Enstek and Kuala Lumpur to develop its second healthcare project — Women & Children’s Hospital — with a GDV of RM150 million.

“The demand for the hospital will be in Kuala Lumpur and a decision will be made in the next couple of months,” he said.

By The EDGE Malaysia

TH Properties to build township for the elderly

TH Properties Sdn Bhd has teamed up with PrimaNora Sdn Bhd to develop a RM30 million resort-style township in Bandar Enstek for the aged and elderly.

TH Properties chief executive officer, Zaharuddin Saidon, said the 12-hectare development was expected to commerce in June next year and would be completed two years later.

“The township, called Resort Living@enstek, is targeted at those 60 years and above.

“It will comprise 60 bungalows priced between RM500,000 and RM1 million each,” he said after signing the memorandum of understanding (MOU) with PrimaNora in Kuala Lumpur yesterday.
Zaharuddin said under the MOU both companies would also collaborate to develop a women and children’s hospital, medical wellness centre, specialist healthcare facilities and comprehensive health Hajj programme, focusing on providing comprehensive and holistic healthcare.

“We are currently studying the strategic location for the hospital (for women and children). It might be within the Bandar Enstek or somewhere else in Kuala Lumpur,” he said.

He said the companies also planned to develop the same type of township in Penang and Ipoh.

“We have identified a few locations. We will duplicate Resort Living@enstek and build the township, maybe in Penang and Ipoh,” he said.

Asked if this was the right time to introduce new development due to the current global crisis, he said: “The health industry is recession-proof. People still get old. They have to prepare themselves.”

Zaharuddin said the company was fortunate not to rely on one product.

“For other developers who rely on one product, especially the high-end, investors might hesitate because of the current financial crisis. So they will be affected.

“But for us we have different products. So if the high-end have problems, we will go for other products such as middle- and lower-end.

“People still need houses. So we will identify the products the market wants,” he said.

By Bernama

Urusharta draws foreign buyers

KUALA LUMPUR: Urusharta Cemerlang Sdn Bhd believes properties in the country are still attractive especially among foreigners, says chairman Tan Sri Zainol Mahmood.

“With strategic location and high quality of materials used, there should be no reason why foreigners don’t want to buy properties in Malaysia,” he said yesterday after the topping-up ceremony for Pavilion Residences.

He added that foreigners from about 18 countries made up half of the buyers for the 368-unit high-end condominium project, which was sold out last month.

The units were priced from RM1.8mil to RM8mil.

Despite the current global economic slowdown, the international community seemed aware of the future of Malaysia and were still confident on investing in the country, said Zainol.

Comprising two towers, the project is located at Pavilion Kuala Lumpur in the Golden Triangle.

Zainol said although the property sector was facing a slowdown, developers shouldn’t just stand still but must think positively on how to generate business activities in the country.

He believed the company’s decision to complete the development of Pavilion Residences would help the industry and the country by creating jobs.

“If we stop the development, it would mean no jobs for people. Doing so would just help create a recession,” he said.

Pavilion Residences is scheduled for completion early next year with gross development value of RM610mil.

By The Star

YTL Corp hunting for acquisitions

YTL Corp, Malaysia’s biggest builder, said it’s got a “war chest” of about RM12 billion (US$3 billion) and is looking for acquisitions as asset values worldwide fall.

“We have an army of people combing through deals,” managing director Tan Sri Francis Yeoh said in an interview with Bloomberg Television today. “There are very interesting assets globally that are ready.”

“It’s the best time to buy assets which are at distressed levels,” said Jason Chong, who helps oversee US$1.6 billion of securities, including YTL shares, as chief investment officer at UOB-OSK Asset Management in Kuala Lumpur. “In times like this, cash-rich companies like YTL can afford to cherry-pick.”

YTL, based in Kuala Lumpur, has expanded its cement, power and water businesses by buying businesses in China, Indonesia, Australia and the UK, where the Malaysian company owns Wessex Water.
Yeoh said today YTL could borrow six or seven times more than the company’s available cash for larger takeover.

YTL is assessing businesses in the property, power-generation and water industries, Yeoh said. Still, the company will maintain a “steady dividend flow,” he said.

Profit at YTL in the year ended June 2008 rose 9.8 per cent to RM769.8 million from a year earlier, helped by higher earnings at the utility and cement divisions.

By Bloomberg

UEM Land to spend bulk of loan on Nusajaya

UEM Land Holdings Bhd, which was listed on the stock market yesterday, plans to use the bulk of a bank loan, or RM500 million, to develop its Nusajaya township in Johor next year, officials said.

The property developer is in talks with a group of five local banks for a RM850 million Islamic loan, managing director Wan Abdullah Wan Ibrahim said.

It hopes to close the deal by the end of the first quarter of 2009.

This would double UEM Land's total debt over equity ratio to 60 per cent, which is on par with the industry, he said.

UEM Land also plans to raise another RM400 million from a share sale later, when markets improve.
The company, which was listed on the main board in place of its parent UEM World following a group restructuring, made a commendable debut despite the overall weak market yesterday.

It opened five sen lower than its reference price of 55 sen, before moving to make gains

It ended the day 2.5 sen higher to 57.5 sen, off an intra-day peak of 80 sen. It was the day's most actively traded counter, with 47.8 million shares changing hands.

"We were prepared for (an opening) of below 50 sen this morning," chairman Tan Sri Ahmad Tajuddin Ali remarked after the opening bell. "This shows people want to get hold of UEM shares," he added.

Research house Hwang-DBS Vickers Research had earlier pegged the company's fair value at 45 sen.

UEM Land is 77.1 per cent owned by the UEM Group and 22.9 per cent by the public.

Wan Abdullah said the company had managed to get a time extension by the stock market regulator to meet the required public shareholding spread of 25 per cent.

Based on its reference price, it had a market capitalisation of RM1.3 billion, making it the country's fifth largest listed property developer, according to HwangDBS.

By Business Times (by Adeline Paul Raj)

Sands: We have enough money for casino project

LAS VEGAS: Las Vegas Sands Corp has enough money to finish Singapore's first casino without help from the city-state's government or billionaire Kwek Leng Beng after the company raised US$2.1 billion (US$1 = RM3.60), president William Weidner said.

Parts of Marina Bay Sands will open later than the end of 2009, as originally scheduled, on construction snags and an "unprecedented" shortage of raw materials that is now "opening up," he said. "We have all the money required to be able to complete the project."

Las Vegas Sands, controlled by billionaire Sheldon Adelson, halted developments in Macau and Las Vegas to focus on finishing the Singapore project and the casino part of its Bethlehem, Pennsylvania, site. It raised US$2.1 billion last week selling stock and warrants, prompting auditor PricewaterhouseCoopers LLC to yesterday remove a warning that there was "substantial doubt" the company could survive.

“They should be okay for the next 12 months,” said Billy Ng, a Hong-Kong based casino analyst at JPMorgan & Chase Co.

By Bloomberg

Hektar REIT sees steady rentals next year

PETALING JAYA: Hektar Real Estate Investment Trust (Hektar REIT) is expecting stable rental incomes next year due to the high occupancy rate of its retail properties as well as a positive trend in its rentals.

The REIT also sees less impact from the economic slowdown as its portfolio consists of the more resilient neigbourhood shopping malls.

Hektar Asset Management Sdn Bhd, the manager of Hektar REIT, said as of the third quarter of this year, the occupancy rate of its retail properties was a solid 96.8%.

“With the majority of our income secured by multi-year leases (three to four years), we will have stable income in 2009,” Hektar Asset executive director and chief financial officer Zalila Mohd Toon told StarBiz.

Zalila said Hektar REIT, which currently owns a property portfolio valued at around RM700mil, remained positive on rental rates.

As at end September, rental rates for 30 new or renewed tenancies in its portfolio had increased by an average of 6%.

Hektar REIT’s retail properties are mainly suburban and neighbourhood malls, which are smaller than regional or city malls.

Its portfolio consists of Subang Parade in Subang, Mahkota Parade in Malacca and Wetex Parade in Muar, Johor.

Hektar REIT now owns more than one million sq ft of space and has over 300 retailers in its portfolio.

The size of neighbourhood malls averages around 500,000 sq ft, or about half the size of so-called regional malls like Suria KLCC.

Zalila said a neighbourhood mall, like Subang Parade, was focused in two ways.

Firstly, it was geared toward serving the surrounding communities living within 15 minutes’ driving distance.

Secondly, the tenant mix was concentrated on basic goods and necessities, and other lifestyle elements, but not luxury items.

“Therefore, we think neighbourhood malls have a more resilient business model than the larger regional malls in difficult times (recession),” Zalila said.

Hektar REIT has also kept track of their retailers’ performance.

“More than 90% of our retailers in Subang and Mahkota Parade so far reported that their sales figures remained intact,” Zalila said.

On the flip side, she said when the economy was booming, the regional malls could do better as they could charge higher rental rates.

“The challenging financial market and stock market, in general, has not affected the operating environment for Hektar REIT’s retail assets at this time,” she said.

Going forward, Zalila said Hektar REIT would continue to focus on completed or nearly completed retail assets, and it would grow its asset base via acquisitions.

According to the Malaysian Valuation and Property Services Department, there is close to 90 million sq ft of shopping centre net lettable area, or space for rent, in Malaysia.

“That means we have a market share of just over 1%,” Zalila said. “We see big opportunities for growth and development, particularly outside of the Klang Valley as almost a quarter of Malaysia’s shopping centre space is in Kuala Lumpur.”

On the impact of the global credit crunch, Zalila said in terms of securing financing in Malaysia, the REIT had long-term relationships with major financiers.

For the financial year ended Sept 30, Hektar REIT generated a total revenue of RM61.98mil, of which RM61.83mil was from rentals.

It also declared a dividend of 2.4 sen per unit.

By The Star (by Rachael Kam)

YTL Corp bullish on Sandy Island project

An artist's impression of YTL Corp's Sandy Island waterfront villas

PETALING JAYA: YTL Corp Bhd is upbeat on its high-end Sandy Island property project at Sentosa Cove in Singapore as response has been encouraging despite the global financial crisis, said YTL Singapore Pte Ltd international real estate director Kemmy Tan.

Tan said the YTL group was positive about the outlook of the property market in Asia.

“We believe there will be continued growth in interest for Asian properties as the economic downturn will also bring about opportunities for investors,” she told StarBiz in an e-mail interview.

A subsidiary of YTL Corp, YTL Singapore manages all YTL group’s projects in Singapore.

Apart from Sandy Island, YTL Corp has two other projects in Singapore – the Lakefront on Sentosa Island and the Westwood Apartments on Orchard Boulevard.

To date, YTL has sold three of the 18 luxurious waterfront villas on Sandy Island.

“We have received interest from local and regional buyers as well as those from as far as the US and Europe,” Tan said, noting that the current buyers were Singaporeans and other nationalities.

So far, there were no takers from Malaysia but “we will definitely be prospecting buyers from Malaysia,” she said.

The 99-year leasehold properties at Sentosa Cove have built-up areas ranging from 7,500 to 9,200 sq ft, with a starting price of S$13.9mil.

Tan said the growing base of the affluent in Singapore motivated the YTL group to venture into the luxury property market there.

“Singapore is well positioned as the regional financial hub and its competitive economy has made it an ideal place for investments,” she said.

“It is also becoming a regional base for multinational corporations and the increase in foreign talent has boosted the demand for luxury property.”

She added that the exclusiveness of the Sentosa Cove area made it particularly appealing to potential buyers.

“Only 2,500 homes can be developed there, of which 400 are landed. It is an exclusive marina community and is the only place in Singapore that allows foreigners to own landed property,” she said.

The Sandy Island villas, each with its unique design, come with a large living area and master bedroom, private pool, boat berth by the waterway, garden and private lift.

By The Star (by Eugene Mahalingan)

IGB investing RM2b in China

GEORGETOWN: IGB Corp Bhd, which operates the “Cititel” hotel chain, plans to invest RM2bil over the next five years to develop “tourist-class” hotels in China under a new brand name.

The group, which considers 3- to 4-star hotels as tourist-class, also has plans for such hotels in other regional cities, from Bangkok to Sydney.

Cititel Hotel Management Sdn Bhd managing director Datuk Eric Lim told StarBiz the group planned to build about 20,000 tourist-class hotel rooms in the third and fourth-tier cities in China.



“These tourist-class hotels would be called Cititel Super-Express Hotel, a new brand name which we are developing,” he said. “There would be at least 1,000 rooms for each of the Cititel Super-Express Hotel to be developed in China.”

Lim said the move would “enable us to tap into the tourist-class market segment in China,” and that the group had “already identified some of the sites for the hotels.”

Over the next three to four years, the IGB group will also draw up plans for similar hotels to be developed in Bangkok, Jakarta, Vietnam, and Sydney.

“In Sydney, the plan is to develop a four-star hotel under the St Giles hotel brand name.

“In Makati, Manila, we are now building the RM150mil St Giles hotel, which should be ready by March 2010,” Lim said.

In Malaysia, the group plans to develop Cititel Express Hotels in Kuching, Kota Kinabalu, Penang, and Ipoh over the next three to four years as well.

“The RM55mil Cititel Express in Kota Kinabalu should be ready in July 2009, while the Cititel Express in Penang is scheduled to be completed by the end of 2010,” Lim said.

The Kota Kinabalu Cititel Express hotel would have 275 rooms and Penang Cititel 550 rooms, he said.

By The Star (by David Tan)

Malaysian builders plan RM11b China development

HUGE DEAL: Tee(left) and Sui showing the documents of agreement while Zaini(second from left) and Gu look on.

A group of Malaysian builders plans to build commercial and residential properties with development value of up to RM11 billion in Shenyang, China.

The consortium signed a memorandum of understanding with the Shenyang Province authorities in Kuala Lumpur yesterday.

A special purpose vehicle, known as Shenyang-Malaysia Development Sdn Bhd (ShenMas), has been formed to undertake the conceptual planning, land acquisition, funding issues and feasibility studies.

The project will take place in the Shenyang Finance and Trade Development Zone (SYFTD).

The proposed development, themed "Modern Islamic Lifestyle", is expected to be completed within five years.

ShenMas executive director Datuk Lim Kim Wah said a definitive agreement was expected to be signed in June next year.

"The project is expected to start by the end of next year. We will form a consortium and Bina Puri will be one of the companies," he told a news conference after the signing between ShenMas and the Administrative Committee of Shenyang Province.

At the signing, ShenMas was represented by its chairman, Senator Tan Sri Tee Hock Seng, and the Shenyang authority, by vice-director of SYFTD administrative committee, Sui Zhong Qing.

The signing was witnessed by the Economic Planning Unit's head of special unit for overseas project, Tan Sri Zaini Omar, and the Chinese embassy's head of mission, Gu Jing Qi.

The project will be developed on a 17.96ha site in one of the most centralised Muslim community living areas in China.

Shenyang is the capital city of Liaoning Province. The province is located south of northeast China, which has about 100,000 Muslims.

Lim, who is the former group chief executive officer (CEO) of Bandar Raya Development Bhd and Magnum Corp Bhd, said that about 30 per cent of the commercial properties will be sold to foreigners and the rest to locals when the development is completed.

Meanwhile, Islamic Banking and Finance Institute Malaysia (IBFIM) managing director and CEO Datuk Dr Adnan Alias said he did not expect any problems in financing the project.

He said the project will use syariah-compliant financing. To date, AmInvestment Bank Group and CIMB Islamic Bank Bhd have issued letters of support for the project.

IBFIM is the syariah adviser to the proposed development.

The project was made possible because of the close rapport between the Kuala Lumpur Chinese Assembly Hall (KLCAH) and the Shenhe district authority in Shenyang.

In August this year, the KLCAH organised a trip to Shenyang, which was led by Adnan.

The Shenhe authority said it chose the Malaysian group instead of groups from Singapore and Hong Kong which had approached the authority to develop the land because of Malaysia's leadership in the international Islamic finance sector.

By Business Times (by Hamisah Hamid)

UEM Land to raise RM850m

UEM Land Holdings Bhd Chairman, Tan Sri Dr Ahmad Tajuddin Ali(left)strikes the gong during the company's listing. Looking on are Managing Director, Wan Abdullah Wan Ibrahim (right)and Director, Md Ali Md Dewal(far left).-AZMAN GHANI / The Star

KUALA LUMPUR: UEM Land Bhd plans to raise RM850mil in bank loans and this would be finalised by March next year.

UEM Land Managing director Wan Abdullah Wan Ibrahim said on Tuesday the RM850mil would be which would be used as working capital to develop Nusajaya.

Speaking to reporters after the listing of the company on the Main Board, he said the company was also looking to undertake a corporate exercise to raise RM400mil.

He expected the borrowings to increase its total debt over equity ratio from 30% now to 60%, which was at par with the industry.

Wan Abdullah added UEM Land was also looking for strategic partners to develop Nusajaya.

UEM Land is the largest landowner in Iskandar Malaysia and it owns 9,564 acres of land in Nusajaya. UEM Land took over the listing status of UEM World Bhd.

By The Star (by KC Lau)

Shenmas to develop RM11b project

KUALA LUMPUR: Shenyang Malaysia Development Sdn Bhd (Shenmas) yesterday signed a memorandum of understanding (MoU) with the Administrative Committee of the Shenyang Finance Development Zone to develop a Muslim community centre cum regional finance centre in Shenyang City, China.

The project, with a gross development value of RM11bil, will start by end 2009 and is expected to be completed within the next five years.

The proposed project is on a mixed basis, comprising both commercial and residential development.

“Shenmas has been given 128 days to undertake a feasibility study with the signing of the MoU.

“I think by June next year everything should be finalised,” said the head of the special unit for overseas projects, Economic Planning Unit of the Prime Minister’s Department, Tan Sri Zaini Omar.

The land is situated within the Shenyang Finance and Trade Development Zone, in Shennhe District, Shenyang City. It will be divided into two parcels, with the first measuring about 64,319 sq m and the second, about 117,488 sq m.

Meanwhile, Islamic Banking and Financing Institute of Malaysia (IBFIM) managing director/chief executive officer Datuk Dr Adnan Alias said it would discuss with potential financiers, the structure of financing for the project.

So far, IBFIM, the financial advisers for the project, had received letters of support from AmInvestment and CIMB Islamic.

Asked whether there would be any problem securing financing due to the current credit crunch, Adnan said: “We don’t foresee much difficulty in raising the needed finance.”

By Bernama

Singapore mulls requests to open casinos in stages

SINGAPORE: Singapore is "carefully considering" proposals by Las Vegas Sands Corp and Genting International plc to open their casino resorts in the city state in "progressive" stages.

Each of the multibillion-dollar projects must still open as an "integrated resort" rather than a "standalone casino", S. Iswaran, senior minister of state for the Trade Ministry, said in Parliament yesterday.

Las Vegas Sands, battling to avoid bankruptcy, suspended construction of casinos in Macau this month to focus on its Singapore project, Marina Bay Sands, scheduled to open at the end of 2009. The company raised US$2.1 billion last week by selling preferred stock and warrants to help finance development projects.

"The Singapore Tourism Board remains in dialogue with Marina Bay Sands and continues to work with them to facilitate the project's completion," Iswaran said. "It would be fair to say that due to the global financial crisis and the slowdown already evident in our tourism sector, there may be some impact on the integrated resorts' business when they open."

By Bloomberg

YTL sets example for developers

The Waterville Home at Lake Edge

YTL Land and Development Bhd (YTL Land)’s sweep of both the low and high-rise Residential Development Awards in this year’s International Real Estate Federation (FIABCI) Malaysia Property Award is significant in several ways.

Its winning entries are the low-rise Lake Edge in Puchong, Petaling Jaya and the high-rise, The Maple at Sentul West in Kuala Lumpur.

This is the first time that the same developer has won both the coveted awards since the Residential Development Award was divided into low and high-rise categories in 2006.

Second, this is the third time in three years that YTL Land has won the Residential Development Award. Its Andalucia at Pantai Hillpark, a Spanish-style gated development in Kuala Lumpur won under the high-rise category in 2006.

No other developer has achieved this before. Thus YTL Land has solidly stamped its mark as an innovative developer of high-end, lifestyle residential developments.

Third, YTL Land’s wins will encourage developers to be more daring, creative and innovative in their approach particularly in housing design and concept. This is pertinent as house buyers are very discerning and constantly demanding better products.

The latest achievements bring the total awards that the YTL Group had won in the FIABCI Malaysia Property Award to six. The other four being the Special Award for National Contribution (for Kuala Lumpur Performing Arts Centre or KLPac won in 2007), Master Plan cateogry (Sentul West and Sentul East Master Plan in 2007), Residential Development for high-rise category (Andalucia at Pantai Hillpark in 2006) and Property Man of the Year 2003 won by YTL Group executive chairman Tan Sri Yeoh Tiong Lay.

(Incidentally the Hap Seng Group also won two awards this year. They are for its Hap Seng Star Mercedes-Benz Autohaus, Kuala Lumpur under the Specialised Project Award and its Hap Seng Mercedes-Benz Autohaus Service Centre in Kinrara, Selangor under the Industrial Development Category).

YTL Corp Bhd deputy managing director Datuk Yeoh Seok Kian, who received the two trophies from the Yang di-Pertuan Agong on Wednesday at the FIABCI awards ceremony, said he was “overwhelmed and honoured” to receive the awards.

Both winning developments share a common goal envisioned by YTL Group managing director Tan Sri Francis Yeoh, which is “to focus on developing luxury homes, hotels, marinas, and other real estate, architecturally designed and crafted to a world-class standard of excellence and that blends ecologically with their natural surroundings to preserve the environmental value of the areas.”

YTL Land has engineered urban renewal and enhanced the value of an established neighbourhood that improves people’s quality of life. Like other industry leaders, it shares a common trait: ability to innovate, creating demand, and taking challenges as an opportunity to do better.

So what is so innovative and special about Lake Edge and The Maple?

YTL Land created a niche in a competitive market in Puchong. Instead of building a traditional township, it developed Lake Edge as Puchong’s first gated community featuring lakeside living and fenceless homes where 45% of the land has lovely landscaped features. It boosted Puchong’s image.

Many of its 420 upmarket homes overlook a 12-acre disused mining lake. Density is only 5.5 units per acre or 28 people living on each acre as compared to industry standard of 8 units per acre.

The homes are larger than the usual modern tropical courtyard houses and have unique features. For example the 37 units of 100-ft long Pavilion Terraces each has a reflective pond separating the pavilion from the main section of the house.

The Garden Terraces with extra 20ft length has an outdoor jacuzzi overlooking a 20ft private garden where one can enjoy a private space in one’s own garden. The latest design, 50 Waterville terraced homes has a private pool each.

As for The Maple at Sentul West, (the only residential development in Kuala Lumpur with a 35-acre private park), YTL Land again stressed on having lots of green spaces with 60% of The Maple’s site dedicated to landscaping.

It is a delight strolling in the park that was converted from the former 9-hole Sentul Golf Course.

By The Star