Putrajaya Holdings optimistic

Putrajaya Holdings Sdn Bhd, the master developer of the country's federal administrative centre, is confident of the continued appeal of any new property launches it may have in the pipeline, despite the global economic slowdown.

"We believe genuine buyers with the capacity to buy will still buy," its chief executive officer Azlan Abdul Karim said.



"Speculators may have reservations about buying new units, but genuine buyers keen to live in Putrajaya will buy ... and here, people who have bought their units are genuine buyers," he said in Putrajaya yesterday.

According to Azlan, all of Putrajaya Holdings' residential and commercial units launched last year have been sold, including 500 residential units, 200 shop-lots and 37 light industrial units.

Next year, 23 semi-detached residential units will be launched, with prices starting from RM1.7 million per unit.

"We have not advertised, but based on registrations the response has been good."

"Uniquely designed" apartment units will also be launched next year, he said.

Replying to a question, he said that prices of properties in Putrajaya rose last year in line with the increase in prices of raw materials.

"But now, with the (raw material) prices going down, we may lower our prices.

Earlier, Azlan attended the groundbreaking ceremony for the new Election Commission (EC) headquarters in Precint 2, officiated by outgoing EC chairman Tan Sri Ab Rashid Ab Rahman.



He said that tenders for the 10-storey building will open in one to two months.

The building, estimated to cost between RM70 million and RM80 million, will have a total gross floor area of about 22,400 sq m. It is expected to be completed by mid-2011.

By Business Times (by Roziana Hamsawi)

HICOM Properties buying Benua Kurnia and Neraca Prisma for RM722mil

KUALA LUMPUR: HICOM Properties Sdn Bhd will acquire the entire equity interest in both Benua Kurnia Sdn Bhd and Neraca Prisma Sdn Bhd for a total purchase consideration of RM722.463mil.

In a filing to Bursa Malaysia, DRB-HICOM said its wholly-owned subsidiary signed an agreement with vendors Datuk Ahmad Abdullah and Mohd Nazree Abu Kassim to acquire the stakes.

Benua Kurnia and Neraca Prisma own three parcels of freehold land spanning 606.8ha in Johor Baru.

DRB-HICOM said it would dispose five pieces of its plantation land at RM341.74mil to the vendors and the issuance of bank guarantee facility amounting to RM238.95mil to satisfy the purchase consideration.

The balance of RM141.77mil would be paid by cash, it added.

The proposed acquisition of the development land would enable the group to immediately replenish the diminishing landbank for its future business growth and sustainable earnings, DRB-HICOM said.

The land had good development potential, being located in a prime location surrounded by matured potential development, the group said.

In addition, the land is located within the Economic Zone E Senai-Skudai of Iskandar Malaysia.

The proposed acquisition was in line with the group’s core business competencies and is a significant step towards ensuring future sustainable growth for its property development division, DRB-HICOM said.

It is expected to be completed after the financial year ending March 31, 2009.

By Bernama

KC eyes abandoned projects outside Sabah

LABUAN: KC Project Management Services Sdn Bhd that has been rehabilitating abandoned housing projects in Sabah wants to use its expertise to help resolve similar “problems” in other states.

“It would be a pity if the experience and knowledge gained by KC is not fully made use of and extended to peninsular Malaysia and Sarawak,” chief executive Dr Robert K.C. Chin said in an interview.

Chin said his company had been appointed by Sabah’s Minister of Local Government and Housing to manage, assume control and complete abandoned housing projects in the state since 1987.

He said KC had been instrumental in setting up a special-purpose vehicle to rehabilitate and complete all abandoned housing projects in Sabah.

To help revive such projects, Chin said the Sabah government had also set up KKTP Sdn Bhd to provide funding and register and transfer land titles to genuine house buyers.

By Bernama

YTL awaits to launch second big REIT

YTL Corp Bhd , which has said it is buying into a Macquarie-led real estate investment trust (REIT) listed in Singapore, intends to launch a second REIT in Malaysia with assets worth more than RM1 billion when the market improves.

The proposed REIT, which is still in the early stages of planning, will be a collection of luxury hotels and resorts under the YTL stable, executive director Datuk Mark Yeoh Seok Kah said.

"We are looking at a hospitality REIT. The equity market now is going through a shake-up. We are studying the proposal and opportunities. We will consolidate our properties before planning the REIT," he told Business Times in an interview in Kuala Lumpur.

Yeoh did not indicate when the REIT might be launched, but ruled out next year.

The REIT, to comprise more than three assets, will be bigger than the Starhill REIT, launched in 2005 and the biggest of its kind in the country then.
Starhill REIT comprises the Starhill Gallery, Lot 10 Shopping Centre and JW Marriot Kuala Lumpur in the prime Bukit Bintang area. It raised RM523.4 million from the listing exercise.

The country's biggest builder, through its hospitality arm YTL Hotels & Properties (YTLHP) Sdn Bhd, is involved in both ownership and management of properties that are a stellar collection of internationally renowned, award-winning resorts, hotels and spas.

Its 100 per cent-owned properties are the Cameron Highlands Resort; JW Marriot; Spa Village Resort Tembok Bali in Indonesia; Villa Tassana in Phuket, Thailand; and Bray House, Berkshire in the UK.

YTLHP has stakes in the Majestic Malacca; The Chedi in Phuket; Vistana Hotel in Kuala Lumpur, Penang and Kuantan; Tanjong Jara Resort in Terengganu; and Eastern and Oriental Express luxury train.

"Most of our hotels and resorts have been paid off, or are in the process of being paid off. They have been refurbished, so we have a total portfolio of new hotels and resorts which are good to be REIT-ed.

"We will continue to build YTL," Yeoh said.

YTL is planning to acquire hotels and resorts from next year, which it may include in the REIT, he added.

In October, YTL announced that it was buying a 26 per cent stake in the Singapore-listed Macquarie Prime REIT (MP REIT) and 50 per cent of Prime REIT Management Holdings Pte Ltd from Macquarie Bank Ltd for S$285 million (RM686 million).

MP REIT, which will be rebranded as Starhill Global REIT when the acquisition is completed early next year, has a market capitalisation of S$516 million (RM1.2 billion) and owns more than RM5.2 billion worth of prime retail and office properties in Singapore, Japan and China.

By Business Times (by Sharen Kaur)

Two YTL Corp resorts, hotel set for launch

YTL Corp Bhd is set to launch two resorts off the coast of Sabah, and a hotel in the Klang Valley for RM200 million by early next year.

"We will launch from February next year, pending local authorities' approval," executive director Datuk Mark Yeoh Seok Kah said.

While the hotel will be called Majestic Kuala Lumpur, the names of the resorts have yet to be finalised, he said.

Yeoh said the resorts are exquisite as each will be located on Pulau Gaya, which is the largest island in Tunku Abdul Rahman Marine Park and the closest to downtown Kota Kinabalu, and Pulau Tiga, which has been dubbed Survivor Island due to the popular television show.
"Despite the current financial turmoil, we are optimistic the properties will perform well. We launched Spa Village Resort Tembok Bali in 2007 and Majestic Malacca this year. And, both have done well," Yeoh told Business Times in an interview.

Yeoh said the idea to launch the properties is to grow the sales and assets of its hospitality arm, YTL Hotels & Properties (YTLHP) Sdn Bhd.

He said the three new properties will be parked under YTLHP, which wholly owns five properties in Malaysia, Bali, Phuket and the UK.

YTLHP has also stakes in seven other properties, a bulk of which are located on Malaysian land.

The company manages all the 12 properties, including Pangkor Laut Resort in Perak and The Ritz-Carlton KL, which are majority-owned by the Yeoh family.

Last year, YTLHP made RM150 million in sales.

It expects revenue to be flat this year due to the effects from a global financial meltdown, said Yeoh, who is also YTLHP executive director.

"Earnings were affected but we had a positive effect from what took place in Mumbai, and in Thailand. The pick-up has been strong but next year is a very difficult year to predict. The booking pattern has shifted to last-minute confirmation," he said.

Yeoh said YTLHP's net profit and revenue have been growing steadily by 20 per cent year-on-year and it will aim for growth again next year.

"We are anticipating some downturn in 2009 but if flights and accessibility can increase, there will be a chance for us to grow our fair share. Whatever happens next year, YTLHP will not lower room rates as it will take time to bring the rates back upwards," he said.

Yeoh said the company will do some yield management and cost enhancement to improve profitability. The biggest cost in the last two years, he said, had been energy and fuel.

YTLHP, which employs over 2,000 people, will not be hiring next year.

By Business Times

Year of reckoning for luxury condos

There is recent evidence that higher-end landed properties in well-established locations could potentially outperform the overall property cycle in times of adversity, says OSK Research.

“This 'hedging' opportunity, stems from the hypothesis that the fast-rising 'baby boomers' of the 50s, who tend to be more affluent but risk-averse, are likely to hedge their wealth in mid- to high-end landed properties during uncertain times,” the research house said in its daily report today.

“Given that households are still flush with liquidity, this age group is unlikely to plough all the wealth back into the banking system given the low deposit rates amid the high inflationary environment,” it added.

Nonetheless, as all the market players are still trying to assess the severity of the potential collateral damage from the global financial crisis on Malaysia’s real economy, it said most home buyers are likely to stay on the sidelines for a while and may not return until the second half of next year.
OSK Research said 2009 will be a year of reckoning for luxury condos.

It has estimated that more than 5,000 units of luxury condos priced more than RM400 per square feet would come on stream in the Klang Valley by late 2008 and another wave of more than 5,000 units is expected to hit the market in 2009 before easing slightly to more than 2,000 units in 2010.

“Notwithstanding the risk of diminishing demand, these waves of incoming supply at about the same time, will severely depress rental yield by late 2008 and going into 2009/2010,” it explained.

By Bernama

Malaysian property mart resilient enough

The Malaysian property market, which is expected to enter the down cycle next year, will still be resilient enough to survive the onslaught of a softening global economy.

The government's RM7 billion stimulus package, including the reduction of Employees Provident Fund contributions from 11 to eight per cent, coupled with lower interest rate and inflation, will provide the bright spark to the market.

The market still has ample liquidity as banks continue to give out financing despite worries about an increasing credit crunch in the US.

Association of Valuers and Property Consultants in Private Practice Malaysia president, James Wong Kwong Onn, said although the property market was expected to see a slowdown in the take-up rate, there would not be a major correction as there was still room to grow.
He said Malaysia was in a better position compared to Singapore, Hong Kong and Thailand which were more exposed to the US sub-prime crisis.

Wong, however, said the association did not expect the market to burst as there would be a moderate reduction in property prices.

He said the property market, especially for residential and commercial, has been 'red hot' for three years up to the third quarter of this year but the softening economy has put a pressure on it.

According to Real Estate and Housing Developers' Association president, Datuk Ng Seing Liong, the property market would see a slowdown of between five and 15 per cent in 2009.

He attributed the economic slowdown as a dampener to the enthusiasm of buyers.

Ng said sales generally would be ongoing but in small volumes as most purchasers adopted a wait-and-see attitude while most developers downsized their new property launches for next year.

An analyst from Aseambankers Malaysia Bhd said buyers were holding back their investments until the economic environment was stable. He anticipates home buyers to return to the market in the second half of 2009.

By Bernama

Nomad seeks stronger foothold in Philipines

KUALA LUMPUR: The Nomad Group Bhd, the largest serviced office provider in Kuala Lumpur, plans to open its latest office in the Philippines by the first quarter of next year.

Chief executive officer Hew Thin Chay said the group had already shortlisted two buildings in the central business district of Manila to set up its office.

“There is good demand for serviced offices in Manila but we are still waiting for the (rental) rates to improve,” he told StarBiz.

The company would be investing about RM4mil in the office, he said, adding that he expected a return on investment in the second year of operations.

The offices, he said, were targeted at travelling entrepreneurs and enterprises.

“The typical serviced office business generally takes about a year to mature. After that period, and once people know where you are located, that is when you start seeing stable returns.

“We always tell our shareholders that this is a long-term business, that the first year of operating a serviced office is not the time when we see business growth,” he said.

The office in Manila is part of the group’s strategy to establish a firm presence in the Asean region. It currently operates offices in Singapore, Indonesia, Vietnam and, most recently, Thailand.

Hew said the group would also be opening a second office in Indonesia, and it had also considered Cambodia and Laos but nothing had been finalised yet.

“We are comfortable with our presence in Asean currently and want to venture further into Asia.”

He also said the group was planning to make in-roads into Hong Kong and Taiwan next year. “We are certain about (opening an office in) Hong Kong next year. In Taiwan, we are still waiting for the political situation to stabilise,” he said.

By having an office in either Hong Kong or Taiwan, Hew said the group would be able to fast track its business into China.

On the local front, the group operates six serviced offices. Hew said the offices offered fully furnished and unfurnished office suites, virtual office, meeting rooms, business lounge and video conferencing facilities, in addition to office-support services.

He said Nomad was looking at setting up an office in Penang but had yet to find “good office space.”

By The Star (by Eugene Mahalingam)

Malaysian property mart still resilient

The Malaysian property market, which is expected to enter the down cycle next year, will still be resilient enough to survive the onslaught of a softening global economy.

The government’s RM7 billion stimulus package, including the reduction of Employees’ Provident Fund contributions from 11 to 8.0 percent coupled with lower interest rate and inflation, would provide the bright spark to the market.

The market still has ample liquidity as banks continue to give out financing despite worries about an increasing credit crunch in the US.

Association of Valuers and Property Consultants in Private Practice Malaysia (PEPS) president, James Wong Kwong Onn, said although the property market was expected to see a slowdown in the take-up rate there would not be a major correction as there was still room to grow.
He said Malaysia was in a better position compared to Singapore, Hong Kong and Thailand which were more exposed to the US sub-prime crisis.

“Prices in these three countries have shot up tremendously by 50-100 per cent but in Malaysia, the increase was gradual,” he said.

Wong, however, said the association did not expect the market to burst as there would be a moderate reduction in property prices.

He said the property market, especially for residential and commercial, has been ’red hot’ for three years up to the third quarter of this year but the softening economy has put a pressure on it.

According to Real Estate and Housing Developers’ Association president, Datuk Ng Seing Liong, the property market would see a slowdown of between 5 and 15 per cent in 2009.

He attributed the economic slowdown as a dampener to the enthusiasm of buyers.

Ng said sales generally would be ongoing but in small volume as most purchasers adopted a wait-and-see attitude while most developers downsized their new property launches for next year.

“Prices are likely to moderate by 5-10 per cent from the first quarter 2009,” he said.

An analyst from Aseambankers Malaysia Bhd said buyers were holding back their investments until the economic environment was stable.

He, however, anticipated home buyers to return to the market in the second half of 2009.

“The ’hot’ property items, especially luxury condominiums in the prime locations, such as in the Kuala Lumpur city centre and Month Kiara, would continue to be a focus as demand remains positive.

“Iskandar Malaysia is in the limelight. The most prominent developments are in Nusajaya and Danga Bay, which have attracted buyers from all over the world,” he said.

An analyst from OSK Research, who also shared his view, said given a huge supply expected to hit the market, especially in the high-end condominiums segment commencing late this year, 2009 would prove to be a year of reckoning for the Klang Valley’s luxury condos.

“As the market having to digest the massive supply of high-end condos that will flood the market to at least 2010, this supports the belief that the next property boom cycle will potentially be led by high-end landed properties,” he said.

He said the next phase of the property upcycle could only commence in early 2010 or 2011.

By Bernama

Legoland will turnJohor into tourist hotspot

The establishment of a Legoland Malaysia theme park in Iskandar Malaysia by 2013 will help transform Johor into an international tourist hotspot, local tourism officials and authorities say.

"Having the presence of such a well-established brand name like Legoland sets us in the right direction in turning Iskandar Malaysia into an international holiday hotspot," Johor State Tourism and Environmental Committee chairman Hoo Seong Chang said in a statement yesterday.



"This, along with Iskandar Investment Bhd's (IIB) broader master plan to develop a fully integrated tourist hub more than complements our state's tourism objectives and efforts in driving larger inbound tourist traffic from around Asia," he added.

An agreement was signed between IIB and Merlin Entertainments on December 13, witnessed by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Kathyrn Lee, chairman of the Johor chapter of the Malaysian Association of Tour and Travel Agents said the strategy will enhance the travel sector's potential and boost the depth and breadth of the travel agency business.

Universiti Teknologi Malaysia Faculty of Built Environment and the head of its Tourism Planning Research Group Professor Amran Hamzah said the theme park will be a strong pull factor especially for tourists entering via Singapore.

IIB managing director Arlida Ariff said the company chose a theme park that caters to a growing segment of the Asian tourist market - families with young children.

"Legoland Malaysia is merely the first of three international theme parks planned for the southern state, under the umbrella of key catalytic projects that will be driven by IIB in its tourism master plan for Iskandar Malaysia," Arlida said.

By Business Times

Developer’s big plans for Pulau Indah

KLANG: Central Spectrum (M) Sdn Bhd, a property developer in Pulau Indah, plans to launch more projects on the island next year as sales have been encouraging.

The company, which is developing a 2129.6ha in Pulau Indah into integrated township, has to date developed and sold 1,000ha worth a gross development value (GDV) of RM1.1bil.

The township comprises industrial (61%), residential (35%) and commercial (4%) properties.

“The Phase 1 of Selangor Halal Hub, consisting of 120ha, was sold to ten investors. The investment value, including land, buildings and machineries, will be about RM840mil,” said general manager Roslan Ahmad.

“The Phase 2, which is now open for registration, comprises 160ha with a GDV of RM250mil.”

Roslan said a further “two factories with investment of RM200mil will be operational next year and another two in the final planning stage,” adding that Central Spectrum’s projects on Pulau Indah were slated to last until 2014.

Central Spectrum is 76.7% owned by Kumpulan Hartanah Selangor Bhd and 23.3% by AMDB Bhd.

Pulau Indah has also attracted a Belgium-based oleo chemical group, which is set to commission its RM72mil plant, covering 3.0ha, by March 2009.

“This is our group first venture outside Europe. We chose Malaysia because it provides good access into China and US markets, as well as benefits from the currency exchange rate,” said managing director James de Caluwe. “Malaysia Development Industrial Authority has also approved a 10-year pioneer (tax incentive) status to our company,” he added.

Meanwhile, the Selangor government has called on the Federal Government to speed up infrastructure works and public services facilities in Pulau Indah.

“We hope that it could provide a police station, a fire station and a medical centre in Pulau Indah, as it currently does not have any, Selangor State Investment Centre’s (SSIC) chief executive officer Datuk Mohd Jabar Ahmad Kembali said

“Make sure the construction of a second access to the island, the South Klang Valley Expressway, to be completed on schedule in 2012, as it is important to reduce road congestion and attract more investors into the island,” he said after a briefing by Central Spectrum.

By The Star (by K.C Law)

Singapore buys US property interests in Japan, China

SINGAPORE: The Singapore government said it has acquired the property interests of a US-based firm in China and Japan for US$1.3 billion.

Government investment firm GIC said in a statement late yesterday it will pay cash to acquire the property operations of US-based ProLogis in the two Asian countries. The transaction is due to be completed next month, it said.

“The acquisition consolidates control over our existing portfolio in Japan and provides a platform to expand our logistics property business in China,” said Seek Ngee Huat, president of the firm’s property arm, GIC Real Estate.

“These investments are in markets that we believe have good long-term fundamentals.”
The Government of Singapore Investment Corporation (GIC) is one of two investment vehicles of the Singapore government and manages the country’s foreign reserves of more than US$100 billion through various investments.

Its property arm, which currently ranks among the world’s top 10 real estate investment firms, has made over 200 investments in more than 30 countries.

ProLogis, headquartered in Denver, is the world’s largest owner, manager and developer of distribution facilities with US$40 billion worth of real estate under its management, according to the company website.

By AFP (posted on 25 December 2008)

Builders expect new projects to start flowing in H1 2009

PETALING JAYA: Contractors expect new jobs to start flowing in following the Government’s efforts to pump prime the economy in the first half of next year.

Master Builders Association Malaysia president Ng Kee Leen said it usually took three to six months for tenders to be called after an official announcement.

Last month, the Government announced a RM7bil stimulus package to prevent the economy from contracting amid the global slowdown.

Ng told StarBiz that about RM4bil of the RM7bil was for the construction sector, which often had a spillover effect on other segments.

“The new jobs are likely to be small contracts like low-cost housing and schools,” he said, adding that more stimulus packages were anticipated next year.

Despite the weaker economic conditions, contractors are still busy with projects that were offered in late 2007 and the beginning of this year.

“Contractors are not doing so bad. We may not be making much money but there are still jobs to be done. We hope the RM7bil package will be quickly disseminated to contractors to bid for the projects. This will enable the benefits of the stimulus to be felt and help contractors survive in this tough times,” Ng added.

A research house, in a report, said the Government’s pump-priming efforts were likely to gain momentum next year as the stimulus would ensure the 2009 growth forecast of 3.5% was met and the country did not slip into a recession.

“With just two years to go before the end of the 9MP (Ninth Malaysia Plan) and more than half of the allocation of RM230bil not spent, we think the construction sector can certainly look forward to more aggressive project flows,” it said.

On Monday, it was reported that the Government was likely to open tenders in the first quarter of next year for the extension of the light rail transport (LRT) system involving the Kelana Jaya and Ampang lines.

The contracts offered are worth over RM1bil in total, which is part of the RM10bil upgrade of Klang Valley’s LRT system that was announced during the Budget 2009 presentation in August.

Meanwhile, Syarikat Prasarana Negara Bhd, owner of the LRT assets, said on its website the tender for architectural consultancy services for the upgrade of 24 Ampang line station was now open.

By The Star (by Yeow Pooi Ling)

Sunrise property pact latest to be called off

PETALING JAYA: The termination of Sunrise Bhd’s put and call option agreement involving RM767mil worth of properties is the latest major cancellation to hit the property sector.

The proposed agreement signed with Malaysia Commercial Development Fund Pte Ltd (MCDF) gives MCDF the right to buy Sunrise’s MK20, a mixed development project in Mon’t Kiara, for RM767mil during the option period.

MCDF paid RM36.9mil as option deposit to the developer, which would now be refunded given the deal’s cancellation.

According to Aseambankers, Sunrise’s proposed deal was supposedly a build-then-sell concept with profit recognition upon completion in 2013.

It said the deal could be called off due to rejection by the relevant authorities, or the two parties failed to secure the funds needed for the project.

Given Sunrise’s net gearing level of 52% as of end-June, the deal’s termination would provide the developer some breathing space until ongoing projects with unbilled sales of RM1.3bil were delivered by financial year 2010, it said.

“The termination of the en bloc sale of MK20, however, has lowered earnings visibility beyond financial year 2011 as it could have raked in more than 25% in profit before tax margin amid falling construction costs,” Aseambankers noted.

Last month two deals were aborted: Dutaland Bhd’s proposed joint-venture agreement with Stonehage Westcity Property Fund Ltd and Merrill Lynch (Asia Pacific) Ltd involving properties worth RM1.8bil, and the proposed sale of Menara Citibank to IOI Corp Bhd for RM734mil.

Six property-related deals, including the above, have been cancelled since August, indicating the cautious outlook for the sector, according to one research house.

It said there was a likelihood of further cancellations, especially by investors from countries badly affected by the global economic crisis such the United States, Europe, Hong Kong and Singapore, and those from countries whose currencies had depreciated sharply.

“We maintain a cautious view on Malaysian property. We prefer property investment asset owners over developers due to their more defensive earnings,” the research house added.

By The Star

Perak defends decision to give freehold titles

Cordial greetings: Najib shaking hands with Perak Mentri Besar Datuk Seri Mohd Nizar Jamaluddin after he chaired the 64th National Land Committee Meeting in Putrajaya yesterday.

IPOH: The Perak Government has defended its decision to offer freehold titles to new and planned villages.

State senior executive councillor Datuk Ngeh Koo Ham said the power related to land rested on the state government.

“The National Land Code is a governing code for administrative purposes only,” he told a press conference yesterday.

He said the state had discussed special circumstances in awarding freehold titles such as public or government projects and projects that were of public interest.

“The new and planned villages come under special circumstances,” he added.

Explaining the reason behind

the awarding of freehold titles to new and planned villages, Ngeh said the Pakatan Rakyat government wanted to rectify the past injustices done to those living in these villages.

“They did not go into the villages voluntarily but were forced to move into them and they were not given basic amenities.”

“They suffered a lot,” he added.

Meanwhile, the Penang government said it will meet and discuss whether to continue with its plan to allow owners of low and medium-cost flats to convert their leasehold titles to freehold without paying a land premium.

Chief Minister Lim Guan Eng was commenting on Deputy Prime Minister Datuk Seri Najib Tun Razak’s statement that state governments could only issue freehold titles for land intended for federal and public use.

Lim said an announcement on the matter would probably be made today.

“We need to consider carefully whether we are going to implement the policies or re-propose them at the next National Land Council meeting,” he said, noting that the state took the matter “very seriously”.

By The Star (by Sylvia Looi and Christina Chin)

Malaysia Pacific in talks to sell Wisma MPL stake

MALAYSIA Pacific Corp Bhd (MPC), a property developer, expects to conclude talks with at least two investors for the part sale of its RM250 million Wisma MPL in Kuala Lumpur early next year.

Its chief executive officer Datuk Bill C.P Ch'ng said the company still wants to own part of the building rather than sell it outright.



"Even with the current financial crisis, there are still people talking to us," he told reporters after the company's annual general meeting in Kuala Lumpur yesterday.

He declined to disclose the two parties but said one is a local and the other a foreign investor.
Wisma MPL is MPC's commercial property in Jalan Raja Chulan, in the Golden Triangle commercial district of Kuala Lumpur.

The slowing economy is also a good time to speed up a project to build a trading and exhibition centre in Johor to spur business among Asian nations, Ch'ng said.

The Asia Pacific Trade and Exhibition Centre (APTEC) in Iskandar Malaysia, Johor, forms part of MPC's LakeHill Resort City project.

"Asian countries should use APTEC to source and distribute their products to Asian markets," he said.

MPC also plans to launch the first phase of the project, Taman Nusa Damai, which comprises mostly residential units, by February next year.

"We should complete this first phase project within the next two years," he said.

In its 2008 annual report, MPC said the new partners in LakeHill Development Sdn Bhd, LakeHill Resort's developer, plan to list the company in three to four years.

Amanah Raya Bhd had bought 22 per cent of LakeHill Development. The rest is held by MPC.

By Business Times (by Kamarul Yunus)

Housing market deemed resilient

SP Setia Bhd group managing director and chief executive officer Tan Sri Liew Kee Sin says the company will focus next year on cash-generative and cash-accretive projects that will further strengthen its balance sheet. It plans to take advantage of opportunities which may arise during the current financial crisis.

WHAT is your outlook for the local property market in the coming 12 months?

The global economic slowdown will be a challenging time for all developers. Securing sales as well as maintaining profit margins will not be easy. However, we should not talk ourselves into a recession. There is still ample liquidity in the market and the country is in a strong position this time around compared to many other Asian countries.

The reduction of EPF contributions from 11% to 8% has also provided support in increasing the nation’s disposable income. On the assumption that the slowdown in developed countries does not last beyond 2009, the country should be able to weather this storm relatively well.

Where SP Setia is concerned, we are in a solid position because of the width and depth of our market. Most of our properties are catered towards landed residential homes within townships. On top of that, prices of our products start from as low as RM200,000.

Although there are predictions that the mass housing market segment will be the worst hit by the current external environment, our view and experience with the mass housing market is that it is in fact a very resilient market segment supported by strong demographics and a fundamental demand for homes.

The sub-urbanisation trend – where households move away from the congestion of the KL city centre into more spacious and modern suburban dwellings – is also unlikely to be reversed, given the scarcity of affordable homes closer to the city centre which offer the kind of lifestyle amenities sought by the current generation of housebuyers.

Townships that are connected along the main highway arteries should see robust and sustained demand for commercial properties over the mid- to long-term. By this reasoning, high-end residential properties in more central locations should also do well by virtue of the fact that it is likely to be in short supply given the expected increase in demand from people working in the city centre.

In your opinion, how has the global financial meltdown impacted the performance of the local property market (in terms of project launches, take-up rate and unit price)?

Developers are taking a more cautious approach in business given the economic outlook. Launches are slowing down but that does not mean that we should stop building. The mass housing sector has proven to be a resilient market in the past. In fact, it was this sector that contributed to SP Setia’s success and growth during the 1998 crisis. From one brand called Setia, we now have five brands which are Setia, Duta, Sky Residences, Eco and Commercial. I believe if you have the right product mix, there will be sales.

Has the market slowdown affected SP Setia’s project launches and product pricing?

Not really. As a company, we are coping very well. Our financial position is strong and we will finish off 2008 with a record sales performance of RM1.4bil. Our main focus for 2009 is on cash-generative and cash-accretive projects which will further strengthen our balance sheet to enable us to take advantage of any good opportunities which may arise during the current financial crisis.

Even in current conditions, we are making investments in projects which have long-term growth or yield enhancing potential such as the Setia City Mall in our Setia Alam township. We will also continue to brand-build – our experience from the last crisis has proven that an economic downturn can sometimes be the best time to grow a brand.

What are some of the company’s strategic plans to ride out the challenging market, including plans for its Vietnam project?

The group’s strategy is to maintain a diversified range of properties in different geographical locations and across all income brackets so that we can attract a wide spectrum of customers. Currently, SP Setia has projects in three different states in the country – the Klang Valley, Johor and Penang.

We have to continue to reinvent ourselves, setting new benchmarks and pushing the envelope to deliver the best to customers. We strongly believe in continuously differentiating ourselves to stay on top of the game. There is always a continuous flow of marketing-driven activities and customer appreciation events to keep buyers and prospective buyers in the loop as the best form of advertising is through word-of-mouth. About 60% of our customers are actually through referrals.

Despite the current macroeconomic instabilities coupled with the suburban living trend being a relatively new concept in Vietnam, we are confident that the idea will take off. Our show village should be ready in the first quarter of next year and this should help give a better visualisation to potential purchasers of what SP Setia is capable of.

We feel that the sub-urbanisation of housing and offices is inevitable given the congestion, inadequate infrastructure, cramped living quarters and expensive office space in central cities like Ho Chi Minh City and Hanoi. In this sense, we feel that SP Setia has a distinct advantage in Vietnam as building suburban townships is our forte.

What will be the main growth drivers for SP Setia for the coming one to two years?

The current uncertainty surrounding the global economy will undoubtedly have an impact on the business environments and domestic economies of countries around the world, and Malaysia is unlikely to be spared. In this context, it is more prudent in the short to medium term to adopt a more flexible business model that is centered on projects that are cash-accretive and cash-generative.

In short, we will refocus on our forte, which is building townships which offers stable earnings growth by targeting the resilient middle-income segment of the property market. In the light of the positive demographics, high household savings rate and relative job security of this particular income segment, the fundamental demand for township properties is likely to be sustainable, particularly in townships where significant investments in infrastructure and amenities have been made upfront.

A good example here is our Setia Alam township in Shah Alam. Apart from the RM150mil interchange that we built to connect the township from the NKVE expressway two years ago, today, we have a Tesco hypermarket that opened in October and the Tenby Private and International School which opened in neighbouring Setia Eco Park in September.

By The Star

Ekovest to thicken order book

Ekovest Bhd, a property and infrastructure developer, is bidding for seven to eight projects worth up to RM5 billion in total, as it hopes to pile up its order book for rainy days.

"Most of the tenders are for government-related projects. They involve both buildings and infrastructure," said executive vice-chairman Datuk Lim Kang Hoo after the company's annual general meeting in Kuala Lumpur yesterday.

The company's earnings growth over the near term is highly dependent on its order book valued at about RM600 million, mainly derived from two projects. The bulk of the orders is expected to keep the company busy over the next two to three years.

"Barring unforeseen circumstances, we are hopeful that we can sustain our earnings growth this year," Lim said.

However, the company stressed that any cancellation or post-ponement of the major jobs in hand, such as the new phase of Universiti Malaysia Sabah and two contracts with Universiti Teknologi Tun Hussein Onn Malaysia, could hurt its ear-nings significantly.
"There is always a possibility that projects are put on hold. We have been through it and experienced it in the past.

"Nevertheless, we are prepared. If the worst happens, we may have to scale down and cut costs. Of course, we may not have to go through that. We'll just have to see how it goes next year," Lim explained.

The company posted a 55 per cent decline in net profit during the first quarter ended September 30 2008.

Besides banking on winning more local jobs, the company, which took part in a highway project in India three years ago, has set its eyes on more overseas projects. Initial talks have begun and feasibility studies are ongoing.

"We are looking at places close by, such as Indonesia and Vietnam. We think this is the right time to look into it, especially when prices are falling," Lim said.

The company is also looking at how it can participate in the Danga Bay Waterfront City Development, which has been aborted due to the unfavourable equity market conditions.

"We are looking at measures on how to participate in it ... and considering a joint venture with other parties or through direct investment. A decision should be made by the middle of next year," Lim said.

By Business Times (by Goh Thean Eu)

Vantage Lifestyle stamps mark

Yuri Ong (right) and another company director James Keet with a model of The Serai

A NEW property development company, Vantage Lifestyle Sdn Bhd, is going all-out to stamp its mark in the competitive Segambut high-end residential market with its maiden project, The Serai.

Not only is its pricing about half that of similar upmarket homes in neighbouring Mont’ Kiara and Segambut, it is offering The Serai to be assessed by the Building and Construction Authority of Singapore under its stringent Construction Quality Assessment System (Conquas).

As Vantage Lifestyle (a member of 3i Properties Sdn Bhd) director Yuri Ong Wei Meng said it was better for a professional third party to judge The Serai’s quality than “blowing our own trumpet.”

“We believe we are the only small developer that will be assessed under Conquas,” he said during a tour of the semi-detached showhouse in Segambut recently.

The Serai (lemon grass), a gated and guarded freehold development, comprises two units of three-storey bungalows priced from RM3.2mil, and 28 units of three-storey semi-detached houses priced from RM1.65mil each. The bungalows, on land sizes from 7,912 to 7,632 sq ft , have about 6,000 sq ft of built-up area with their own pool.

The semi-detached houses have land sizes of about 3,200 sq ft and a built-up area of 4,632 sq ft. Monthly maintenance charge is RM350.

The luxuriously furnished showhouse is available for sale at RM2.65mil after a 3% discount.

The double-volume living area enhances the perception of grandeur with the right furnishing and curtains. There are also a lot of thoughtful details, some of them too small to notice.

For example, external metal louvres on the upper portion of the tall tinted glass panels cuts off excessive sunlight. Double-section sliding doors are used with tiny slots to drain off any rain water collected in its tracks.

Top marks go to the huge master bedroom and ensuite master bath with shower area, deep long bath and double basins that occupy 840 sq ft of the top floor. This does not include two timber deck areas and balcony.

There are three spacious bedrooms on the first floor and two more on the ground floor, including a maid’s room. In all, there are five bathrooms and a powder room.

Besides the current 3% discount and about RM60,000 in interest savings from a 10:90 payment plan, buyers also get extra features worth over RM100,000, including three-phase power supply, pneumatic booster pump, automatic gate system, plaster ceiling, hot water system, Astro points to the living room, family hall, master bedroom and master bath (where you can watch TV in your long bath), and tempered glass shower screen in all the bathrooms.

These homes are ideal for people in their 40s and 50s with two or three children. The guest room on the ground floor can be used for the elderly or as a study.

About 60% of the 30 homes have been sold since the project was soft launched on Oct 18 with most of the buyers being upgraders from around the area.

Although it may not have the prestigious Mont’ Kiara or Sri Hartamas names, it is actually quite accessible to these areas via Jalan Segambut and a proposed link to Mont’ Kiara via Persiaran Prima Pelangi.

Several new developments have been completed, under construction as well as being planned in the vicinity of The Serai. Across the road from The Serai are some newly completed terrace houses and further away are the newly completed Anjung Tiara semi-detached homes on a hillside, some shophouses and the freehold Bukit Seri Bintang (nearing completion) project by Ipoh-based Total Resources Sdn Bhd.

Bukit Seri Bintang comprises 26 units of 2½-storey terrace houses priced from RM638,000 to RM988,000 and six semi-detached houses priced from RM928,000 to RM1.4mil.

The upmarket Desa Parkcity, on the other side of a hill, forms the backdrop for The Serai.

“Since we bought our land, the land cost have shot up by 40%. The price of land is now about RM100 psf,” said Ong, who plans to do similar developments in the Klang Valley. His two other partners are brothers Bernard and James Keet.

Looks like the trio have done their homework well which is based on what Ong described as building for a target market.

By The Star (by S.C. Cheah)

Malaysian malls seen growing income further

MALAYSIAN malls are expected to grow their income further in 2009 with more visitors despite the anticipated slower economy.

President of the Malaysian Association for Shopping and Highrise Complex Management (PPK) Joyce Yap said a higher traffic would cushion the decline in spending.



"However, the extent at which they grow would depend on their tenant mix such as whether they are in fashion, food or if they retail home products," she told Business Times in an interview.

According to Yap, even during the 1997/1998 financial crisis, many shopping complexes had in fact recorded an increase in traffic.

This is because during a downturn, consumers tend to look for places to relax, Yap said.

"During the 1997/1998 crisis, business at food and beverage outlets (within malls) shot up. Visitorship continued on an uptrend in malls, although spend per person had declined," she said.

There is usually a shift in priority of what consumers spend on, but they hardly cut down on food.

Malls that tend to perform better are those that are well designed, offer variety and are well managed.

Shopping complexes that aggressively promote and have retailers who offer more than just discounts also do well. These include providing gifts with purchases, free services or have tie-ups with bank cards to offer additional value.

In the current environment, it is also best not to cut promotional budget. Rather, one should look at improving services and having cross promotions within shopping zones.

"Malls within Mutiara Damansara, or within Bandar Utama and those shopping complexes in the Golden Triangle can do cross-promotions," she said.

General manager for marketing at Pavilion KL Kung Suan Ai said she believes the Pavilion will do well in 2009 as it is always working on making the mall attractive.

"In 2009, we will improve our concierge service. We are working on retailers providing delivery services to hotels for purchases made by tourists," she said.

With all these in place and its recent Malaysia Property Award 2008 for Retail Development, given by the Malaysian Chapter of Fiabci, Pavilion hopes to increase the patronage level to 2.4 million a month in 2009 from 2.2 million a month this year.

By Business Times