EPF ready to snap up bargains

An Economic downturn is bad news for a lot of people but for the Employees Provident Fund (EPF), it is music to its ears.

The pension fund, which has more than RM330 billion of assets, is eager to snap up bargains, be it in the stock market or the property market.

"Patience is the name of the game, there's nothing clever about it. For long-term fund like us, this is the time that we have waited for," Johari Abdul Muid, deputy chief executive officer of investment, told Business Times and Berita Harian in an interview recently.



As the stock market had fallen some 40 per cent in 2008, the EPF had been buying more shares in companies like SP Setia Bhd, a developer, Petronas Gas Bhd, and Public Bank Bhd, Bursa Malaysia filings show.

Although the weak stock market could make it tough for the EPF to maintain its dividend payout for 2008, buying stocks at low prices now could also mean a windfall when the market recovers.

Earlier last month, the EPF said its third quarter investment income fell 60 per cent from the second quarter as it set aside more money to cover the lower value of its stock market investments.

The EPF has 23.4 per cent of its funds in stocks in the third quarter, the third-biggest asset class after government bonds, loans and corporate bonds.

"Everyone's expecting recovery in 2010. You should see some recovery maybe middle of next year (2009), end of next year (2009)," he said.

The EPF also wants to buy more properties, a segment of which its investment is far short of what has been recommended by consultants. It can invest up to three per cent of its total but has spent only one per cent.

"There's quite a number of buildings that will probably be up for sale soon. Things are tough and cash is tight. I expect more sellers than buyers," Johari added.

Johari said he has been sending out his staff to find "good properties" for the last two months. Surprisingly, the fund has not been approached by potential sellers despite it being a natural candidate as it is flush with cash.

"Maybe they don't see us as a property player," he said.

The EPF has bought several choice assets in recent years, notably Wisma KFC and the Sogo shopping mall in Kuala Lumpur. These have been delivering good rental returns while other properties offer the chance for redevelopment.

An example is the training academy for Malaysia Airlines in Kelana Jaya which it bought for RM145 million in 2007.

"We see the potential of that piece of land. It is perfect land for redevelopment," he said.

By Business Times (by Shahriman Johari)

EPF may bid for Menara Citibank

The Employees Provident Fund (EPF) may bid for Menara Citibank, a prominent building in the heart of Kuala Lumpur, as it feels that now is the time to increase its property collection.



"We are enquiring ... I can consider (bidding)," Johari Abdul Muid, deputy chief executive officer of investment, told Business Times and Berita Harian in an interview recently.

Menara Citibank, a 50-storey building that is almost fully occupied, is up for sale again after IOI Corp Bhd called off its purchase that was priced at RM586.73 million.

IOI backed out of the deal in November, forfeiting its RM73.36 million deposit paid to Inverfin Sdn Bhd, citing concern over the economy.

Inverfin is 50 per cent owned by Menara Citi Holding Co Sdn Bhd, a unit of US bank Citigroup. Singapore's CapitaLand Ltd holds another 30 per cent, while Amsteel Corp Bhd owns the rest.
"When it comes to buildings, we have a clear-cut policy to deal with more prominent ones," Johari said.

In May, the pension fund bought the 26 Boulevard building in Precinct 3, Putrajaya, from Putrajaya Holdings Sdn Bhd. More than 90 per cent of the office and retail space in the building has been taken up by government departments and companies.

EPF invested RM1.78 billion in real estate in 2007, or just 0.6 per cent of its total investments. Its portfolio includes properties such as the Sogo shopping mall, Wisma KFC and a building in KL Sentral.

Menara Citibank has a net lettable area of 733,626 sq ft and 99 per cent occupancy rate.

The net book value of the building as of December 31 2007 is RM458 million and the gross rental revenue is RM43.3 million (excluding revenue from the car park of RM3.3 million).

By Business Times (by Shahriman Johari)

EPF eyes prime govt land in Klang Valley

The Employees Provident Fund (EPF) plans to bid for the government's prime land in the Klang Valley as it seeks to boost its property investment and improve returns to its members, a senior official said.

The pension fund, which manages some RM332.4 billion currently, has invested only one per cent of its total in properties so far and it is keen for more.

"Of course we'll be interested. We are in a position to consider big tracts of land," Johari Abdul Muid, the deputy chief executive officer for investment, told Business Times and Berita Harian in an interview recently.

On November 4 2008, Deputy Prime Minister Datuk Seri Najib Razak said that companies will be allowed to develop government land under an open tender system.
It is part of the government's plan to raise funds and boost a slowing economy.

The centrepiece asset is the 1,600ha owned by the Rubber Research Institute Malaysia in Sungai Buloh, Selangor. The land is located next to the thriving Kota Damansara area.

Other possible areas for development include land in Jalan Cochrane and Jalan Ampang Hilir, which is also strategic as it is close to the Petronas Twin Towers.

The EPF can invest up to three per cent of its funds, or some RM10 billion, in properties like buildings or even land. It has invested about RM3.3 billion or one per cent, so far, Johari said.

"We have, in our normal presentation of investment (to the government), said that we are a bit short from the property perspective," he said, adding that the EPF will follow the government's decision. This means that if the land is auctioned, it will bid for them.

He explained that the EPF can buy the land on its own and then develop it in partnership with property companies.

Details of the government's plans with the land are being finalised by the Economic Planning Unit.

By Business Times

Mutiara Goodyear seeks to expand landbank

Mutiara Goodyear Development Bhd is consolidating itself and realigning its focus and resources so it can seize opportunities when the property market recovers, says chief executive officer Kee Cheng Teik.


Kee Cheng Teik

What is your outlook for the property market?

The Malaysian economy has been resilient in the first half of 2008, but is increasingly being affected by the global downturn. Consumer demand for properties has slowed down from the third quarter of 2008 due to the market uncertainties and we expect this to continue in 2009.

But we are happy with the measures introduced by the Government to spur the local property market. Incentives such as the abolishment of the real property gain tax and the elimination of Foreign Investment Committee approval for foreign purchases of residential properties above RM250,000 are among positive signs that will spur the primary and secondary property market in the short to medium term.

Furthermore, we applaud the Government’s move to allow savings in the Employees Provident Fund to be used for monthly repayments of housing loans as this will stimulate consumer spending and house ownership, besides easing the burden of paying monthly loan instalment by home owners.

In addition, the Government just recently announced a stimulus package worth RM7bil, a large chunk of which will be allocated to the housing and construction sector. The Government has removed import duties for cement and long iron and steel products, and also abolished approved permits for long iron and steel products, making these building materials more competitively priced.

While these incentives are very much welcomed, markets may remain volatile for some time — more so because the present crisis is of global proportions. So even with the stimulus package, it may take a while before the measures kick in and the market pick up again.

We view property based on its long-term prospects as a property development cycle encompasses at least three years; from the initial study phase to completion. Hence, even though the property market’s short-term prospects are uncertain; we are bullish over its long term prospects.

The success of a property development is based on location and a well-managed cost structure. In times of uncertainty, optimum cashflow management takes precedence in a development to ensure an increase in asset value.

Going forward, at least in the medium term, the Malaysian property market will still be largely led by high end residential properties but it will naturally spill over to medium range properties as well.

What are the challenges ahead for the company, especially in a slowing economy?

Our challenge for the coming years is to enhance the value of our assets, manage cashflow, and put all our development plans in order so that we can take advantage of the market when the timing is right to launch.

We are still seeking to increase our landbank in key markets either via joint ventures or strategic partnerships. We will take this opportunity to consolidate ourselves and to realign our focus and resources. We believe when the market recovers, the opportunity will arise and we want to be in a position to ride on the opportunity.

What are the new launches the company plans to undertake in the Klang Valley and Seberang Perai?

We are planning to launch a few projects, the timing of which depends on market conditions. These projects include:

• High-end mixed development project located at the exclusive Melawati Hills. The first phase of which shall comprise of 142 units of high-end bungalows;

• A mixed residential and commercial development in Kajang;

• Mixed residential projects in Seberang Perai and Penang Island;

• A commercial development in Sunway Commercial centre.

These projects are expected to carry an overall gross development value (GDV) of more than RM2.5bil.

How have the recent launches fared?

Mutiara recently launched a 1.38ha commercial development project, Prima Avenue in Dataran Prima, Kelana Jaya. This modern contemporary development incorporates two blocks of 15-and 16-storey freehold commercial office tower with a retail podium called The Tube.

We have received overwhelming response for the duplex units at The Tube while interest in the office suites has been very encouraging. As of to date, more than 70% of the first block launched in September has been fully taken up.

What is your current landbank?

Mutiara has a total of about 356.4ha of landbank in Penang and the Klang Valley with an estimated total GDV of RM4.1bil when fully developed.

By Business Times

Parkson Haiphong to buy Viet property for US$24.15mil

KUALA LUMPUR: Parkson Haiphong Co Ltd has signed a sale and purchase agreement with Thuy Duong Investment Joint Stock Co to acquire a property in Vietnam for US$24.15mil. Parkson Haiphong is a wholly-owned subsidiary of Parkson Holdings Bhd.

In a filing to Bursa Malaysia, Parkson Holdings said the proposed acquisition was to enhance the earnings of the group and was also in line with the company’s objective of owning key operating outlets.

It said the proposed acquisition would result in net incremental savings in terms of rental otherwise payable and additional income from the entertainment centre.

“The property is situated in a strategic and high growth development area which augurs well for future expansion and the Parkson Holdings group will be able to benefit from any capital appreciation in connection with the property,” it said.

Parkson Holdings said the funding for the proposed acquisition would be sourced from internally-generated funds and/or from bank borrowings.

“The proposed acquisition is expected to be completed by the first quarter of 2009,” it said.

By Bernama

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)