Mah Sing encouraged by good sales of Southbay property

An artist’s impression of the bungalow unit to be launched by Mah Sing in Batu Maung.

GEORGE TOWN: Mah Sing Group Bhd is bringing forward to the next two to three months the launch of its bungalows for the RM1.35bil Southbay Penang mixed development project in Batu Maung.

The 76 bungalows, with an estimated gross sales value of RM200mil, were originally targeted for launch at year-end, chief operating officer Ng Heng Phai told StarBizWeek.

However, having sold 150 or about 75% of the first batch of 200 three-storey link houses in the first week of launch last month, Mah Sing decided to introduce the bungalows earlier, he said.

The units are priced from RM795,000 and sales have since reached 85% for the phase which has an estimated gross sales value of RM200mil.

“We expect the value of the link houses to appreciate by 15% before year-end,” Ng said.

With built-up areas ranging between 5,000 and 8,000 sq ft, the bungalows will be priced around RM3mil each.

“The bungalow project, known as Legenda, is a guarded and gated scheme on a 27.8-acre site,” Ng said.

Ng said the group was preparing to launch the RM900mil commercial component, Southbay City, on a 34.5-acre site at year-end.

“We plan to develop sea-fronting retail outlets. The commercial component will increase the value of the residential properties in the project,” he said.

Ng said the group was working with agents to market Southbay Penang overseas.

To be developed over five to seven years, Southbay Penang is Mah Sing’s biggest project to date.

“Our projects in the country have a gross sales value of about RM3.8bil, of which RM1.35bil will come from the Southbay Penang project,” Ng said.

“The projects in the Klang Valley and Johor Baru will contribute about RM1.6bil and RM800mil respectively,” he added.

“The bulk of Southbay Penang’s contribution should come in when we launch Southbay City,” he said.

By The Star

E&O gearing up for next economic upturn

A handout image of Seri Tanjung Pinang project. E&O will be launching two new projects this year.

Eastern & Oriental Bhd (E&O) group is positioning itself to capitalise on opportunities in the next economic upturn including holding back launches to time for the upturn as well as raising capital that could be used to make opportunistic acquisitions.

The group’s RM200mil proposed 1-for-2 rights of irredeemable convertible secured loan stocks (ICSLS) 2009/2019 in late May is part of a two-pronged strategy to raise a total of RM500mil.

Executive director Eric Chan told StarBizWeek in an interview that the RM500mil would strengthen the company’s balance sheet in the next two to three years “by increasing cashflow and lowering gearing.”

The money will be used to fund developments, opportunistic acquisitions such as strategic acquisitions of landbank, and general working capital and repayment of financial obligations, etc.

The suddenness of the economic downturn in 2008 and 2009 had impacted E&O’s business and strategies Chan said.

Under current weaker conditions, the premium niche property developer is focused on “managing the balance sheet rather than being only profit and loss-driven”.

In addition to the RM200mil from the rights issue expected to be completed by August, RM300mil will be raised from the disposal of non-strategic landbanks and cash generated from new launches.

To date, it has also raised just under RM100mil from the disposal of what it considers to be non-strategic landbanks including a property in the Semantan area of Kuala Lumpur from the unwinding of a joint venture with Selangor Properties.

As part of its “value preservation” strategy, E&O has been holding off launches and will only put these developments worth RM4bil in gross development value (GDV) into the market when the economy and demand for high-end property recover.

In fact, the company had not launched aggressively in 2007 and 2008, which had shown in its 2009 financial results, given that there was an average two-year lag for the value of launches to be manifested in earnings, said Chan.

The group has announced an unaudited RM37.7mil net loss for the financial year ended March 31, 2009 (FY09) compared with a net profit of RM128.9mil for FY08.

“But the value of the developments are intact. They are deferred but not cancelled,” Chan said referring to the RM4bil GDV of held-back projects.

The RM4bil appears to be readily realisable when the market recovers.

“These are ready-to-market projects. We have acquired all the approvals,” he said, adding that approvals for property development launches could take about a year.

But the upturn may be sooner than expected.

The company expects to take two to three years to reduce the high gearing it has built up during the downturn. Meanwhile, it is launching two projects this year.

These projects are the 440-unit St Mary service apartments in Kuala Lumpur near the Weld next month and 1,000 units of Seri Tanjung Pinang condos in September. The company expects these projects to bring RM600mil into the company’s coffers.

The estimated RM200mil from the rights issue, by E&O’s calculations, will bring down the company’s gearing from 0.8 times to 0.46 times, while the RM300mil from landbank disposal and new launches will bring gearing down to a negligible 0.16 times.

HwangDBS Vickers which maintains a “hold” call on the counter in its latest report says of the two expected launches, “We expect the takeup to be slow due to high incoming supply of high-end condos especially around KLCC over the next two to three years.

“However, St Mary’s initial launch will likely be priced at an attractive RM800 per sq ft versus the KLCC secondary market price of RM800 to RM950 per sq ft, along with a 10/90 financing scheme.”

But at the same time, the research house has raised its FY10 and FY11 earnings forecasts of the company by 6% to 18% after factoring in stronger takeups with property sales showing signs of bottoming out on anecdotal evidence.

On the rights issue last month, HwangDBS says that E&O will have more working capital to resume launches in the second half of 2009 from the estimated RM2.4bil GDV, which should help to replenish dwindling unbilled sales at RM150mil currently.

The research house also opines that concerns about the company’s high gearing “will abate” and calculates that gearing will improve to 0.53 times from 0.83 times at present.

“The funds raised will also ease pressure to sell assets at distressed prices – E&O still hopes to raise RM300mil from the disposal of non-strategic landbank,” it says.

By The Star (by LOONG TSE MIN)

Banks on why loan rates lag cut in key interest rate

FOLLOWING the reduction in the overnight policy rate (OPR) by 75 basis points to 2.5%, which subsequently went to down to 2%, banks have adjusted their mortgage rates to competitive levels that are below their base lending rates (BLRs).

A few aggressive ones had initiated the reduction in mortgage rates to as low as 3.2%–3.3% while others took some time to catch up. This led to questions on why some banks were not reducing their mortgage rates fast enough.

Banks surveyed by StarBizWeek say changes to loan rates were usually not done immediately after every revision of the OPR, as they had to complete several internal processes to consider the impact of any change.

Most banks, nonetheless, would revise their financing rates within a week after the central bank announced the changes to OPR which has been kept unchanged at 2% since February.

OCBC Bank (M) Bhd director and CEO Jeffrey Chew said while banks tried to respond as quickly as possible, they needed to balance all the factors involved in the pricing equation.

“We need to evaluate our overall strategy for running the business, cost of funds, marketing strategy for attracting new customers while retaining the existing ones, as well as sales and administration costs,” he says.

Alliance Bank Malaysia Bhd group CEO Datuk Bridget Lai says factors determining the pricing structure included the customer’s risk profile, collateral, loan tenure and market competition.

Ultimately, the bank’s goals are to protect the quality of its asset portfolio while driving up productivity, efficiency and service levels, she says.

RHB Bank head of retail banking Renzo Viegas says that upon an announcement of a cut in the OPR, the bank’s central treasury together with related business segments in the group would immediately carry out their analysis, following which the new rates would be keyed into the system.

“Changes are overnight with all the loans that have rates pegged to the BLR revised. Concurrently, the website and all point-of-sale interactions within the bank are also updated,” he adds.

While floating rates pegged to the BLR are easy to revise, given that adjustment is automatic, he says the fixed rate module is tougher due to profitability issues, as these fixed rates are already built into the pricing structure.

Both RHB’s conventional and Islamic banks revised their respective lending rates within a week after Bank Negara’s monetary policy change.

According to RHB Islamic Bank head of asset based finance group Zulkhairi Zabiri, property developers’ discounts, coupled with banks’ cheap financing, were attracting individuals to buy properties.

“We do see an upward trend in demand for this segment and we observe a similar trend for commercial properties,” he says.

Chew of OCBC concurs. He says companies are less sensitive to changes in the cost of funds as their need for loans depended more on demand for their products and services.

“If there’s strong demand, businesses tend not to mind slight increases in interest costs. The factors include credit availability, turnaround time and service delivery,” he says.

This was evident last year when most banks recorded significant loans growth despite the BLR being at a higher rate of 6.5%, as the business environment was conducive with individuals spending and companies investing.

By The Star (by Yeow Pooi Ling and Laalitha Hunt)

Going back to basics a better option

Although the rapid pace of expansion and the sheer size of companies have been idolised by many western economies, the latest global financial debacle that brought down many industry giants in the financial, automobile and manufacturing sectors, shows that being big does not necessarily mean greater efficiency and profitability.

On the contrary, many of the companies that are still staying afloat and have strong financial standing are the ones that have not gone on an overzealous expansion spree to flex their muscles around the various continents.

Instead of diversifying into various business sectors to prove their mettle, these companies have remained steadfast in what they do best and stayed focused on their areas of competencies.

By keeping to what they know best and not being caught up by the “borrowing and expanding game” that decapacitated most of the felled giants, it goes to show that companies should not expand just for the sake of expanding, or in the name of globalisation.

It looks like globalisation will have to take a back seat for a while as many of these “once huge” companies and conglomerates are still struggling for their survival.

The latest shake-up of the global economic and financial systems should be taken as a lesson for Malaysian corporations to avoid the temptation of growing too big, too fast – the path travelled by their western brethrens and one of the major contributors to the current financial quagmire.

Luckily for Malaysia, many of its companies, including property developers, have not gone overboard to expand into unknown territories overseas. Those who have done so have limited their exposure to markets that they are familiar with and only after due market intelligence studies are conducted.

Of course, there are some companies that have been “caught” after paying premium prices to take over some local companies for their offshore expansion. There have also been instances of property companies which went on a huge expansion binge by leveraging on bank borrowings to acquire huge landbanks and got caught when they bet on the wrong growth corridors.

These companies are still paying heavily for their mistakes after investors deserted their stocks.

Turning the table on these quick-fix expansion model and going back to the organic growth model that values prudence, manageability and efficiency looks like a better option these days.

Nurturing a company by focusing on its core competitive advantages and growing organically by harnessing its human resource expertise will be much healthier than blindly expanding into new areas without the right market knowledge.

Good property companies should be trendsetters in terms of product quality, innovative designs, pricing and service excellence.

Having a strong brand name and proven business model will certainly add value to a property company and raise its attractiveness in the eyes of buyers and investors, if the company is listed.

Property buyers are increasingly savvy these days and are more careful of which developers they buy from to ensure good quality products and timely delivery of their property.

Developers that are reputable and well regarded for their product quality and timely delivery usually have a strong following of loyal buyers.

Moreover, projects that are offered by these developers usually command a higher price premium over projects by other developers.

Although much effort and hard work are needed to build a strong reputation, all will be worthwhile at the end of the day when these efforts are translated into loyal buyers and good product take-up rate.

Those who have made it will be the ones to survive any bad glitches thrown their way, like the latest one that is brought about by the global financial meltdown.

Athough the market is likely to remain lacklustre over the next few months before it bottoms out later this year, industry players should harness their skills and competitiveness to prepare for the market upturn.

● Deputy news editor Angie Ng believes much can still be done by property players to lift the industry standards further and for them to vie for a bigger share of the global real estate market.

By The Star (by Angie Ng)

Builders press for stamp duty exemption

CONSTRUCTION players want the government to immediately exempt imposition of the new stamp duty as the sector is grappling with escalating cost.

"We cannot wait any longer. The matter has become very serious now," Master Builders Association of Malaysia (MBAM) president Ng Kee Leen told newsmen in Kuala Lumpur yesterday.

MBAM said the exemption should be for all service agreements including construction contracts of all types including consultancy contracts, operations and maintenance contracts, maintenance contract projects, and facilities management services contracts.

MBAM feels that construction contracts are not service agreements and therefore do not fall within the scope of "services" under Item 22 of the First Schedule of the Stamp Duty Act 1949.
On Wednesday, Ng told Business Times that the amendment to the Stamp Duty Act, which came into effect on January 1 2009, has resulted in construction cost rising up by 1-2 per cent.

As a result, ordinary service agreements are slapped with 0.5 per cent stamp duty of the total contract value, whereas previously the stamp duty on an ordinary service agreement was fixed at only RM10.

MBAM along with other construction players including architects and consultants hope to voice their grievance during their annual dialogue with the Ministry of Finance on June 11 2009.

He said a memorandum was forwarded to the Ministry of Finance in April but no action has been taken so far.

Ng said the combined effect of stamping all agreements at 0.5 per cent of a contract value is exponential since the nature of the construction industry has multiple levels of subcontrac-ting works.

"MBAM believes that the imposition of the additional stamp duty on construction contracts is inconsistent and counter productive to the policy and objectives set out in the stimulus package plan to help drive the economy out of the turbulent financial crisis by boosting the construction industry which is recognised as an important growth engine in the economy," Ng said.

He said many construction contracts to be executed were negotiated or awarded prior to the amendment where the project costing did not include the additional stamp duty.

"Imposing such much heavier stamp duty may cause serious cash flow constraints and reduced margins for the contractors and consultants in an already highly competitive market and therefore impact the viability of projects committed," Ng added.

By Business Times (by Rupinder Singh)

SP Setia’s maiden China project

From left: Tan Sri Liew Kee Sin, Datuk Seri Najib Razak, Hangzhou Ju Shen Construction Engineering Ltd legal representative Hu Baifu and International Trade and Industry Minister Datuk Mustapa Mohamed at the agreement signing ceremony in Beijing

PETALING JAYA: SP Setia Bhd has marked its first foray into China’s property market by inking a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd in Beijing, the company said in a statement.

The event was witnessed by Prime Minister Datuk Seri Najib Razak yesterday, who is in China on an official visit.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said the agreement would lead to the setting up of a joint-venture company to carry out a mixed property development project on a 25-acre site.

The land is located in the growth corridor of XiaoShan, Hangzhou in the Zhejiang province.

“The venture follows our first overseas foray into Vietnam in mid-2007 and is in line with our expansion to be an international property player,” Liew said in the statement.

By The Star

SP Setia enters China

The developer will build a mixed property development on a 10ha site in Hangzhou with a Chinese company

Property developer SP Setia Bhd has embarked on its maiden venture in China, teaming up with a local company for a mixed development in Hangzhou in Zhejiang province.

In a statement yesterday, SP Setia said it will develop the 10ha site together with Hangzhou Ju Shen Construction Engineering Ltd.

The joint-venture pact was sealed yesterday, witnessed by Prime Minister Datuk Seri Najib Razak, who is on an official visit to China.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said that the project will be its third overseas, after the EcoLakes and EcoXanh developments in Vietnam.
"This venture is in line with the group's expansion plans to be an international property player," he said in the statement.

Liew added that it was still premature to disclose details of the joint venture, such as the shareholding structure and development cost.

Hangzhou, about 180km southwest of Shanghai, is the capital of Zhejiang province and a key tourist and historic cultural city with a population of 6.78 million.

By Business Times

SP Setia, DutaLand trade higher

PROPERTY development companies, SP Setia Bhd and DutaLand Bhd, both traded higher today following their announcement on joint development ventures in China.

As at 10.35 am, SP Setia increased eight sen to RM4.18 while DutaLand rose five sen to 55 sen.

Yesterday, SP Setia announced that it had entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd for a 25-acre mixed property development in the province of Zhejiang.

The cooperation marks the start of the company's foray into China, and its third venture overseas after Vietnam, where it is developing the Eco-Lakes project at MyPhuoc Industrial.
Meanwhile, DutaLand sealed a memorandum of understanding (MoU) with the China-Boda Group to jointly develop two pieces of land in Hebei province, as well as in the Iskandar Regional Development (IRD) Malaysia.

DutaLand said the project in China would be developed over two phases.The the first would involve approximately 51.5 hectares and 100 hectares in the second phase.

The company said phase one comprised a mixed development project with a total estimated gross development value (GDV) of RM3.1 billion.

By Bernama

Qatar developer to sell some assets

DOHA: Ezdan Real Estate Co, Qatar's largest developer by market value, said yesterday it planned to sell some of its real estate portfolio as it seeks to raise funds for billion-dollar projects in the next five years.

Ezdan's deputy chief executive officer, Samer Wahbeh, said the company, which complies with Islamic law, would build schools, hotels, residential units and hospitals in Qatar, the world's biggest exporter of liquefied natural gas.

"We are still quite bullish about the market and have an aggressive expansion plan and we need to fuel this growth for the company," Wahbeh said in an interview.

To help finance new real estate projects, Wahbeh is in talks to sell about 4 per cent of its portfolio, worth about 600 million riyals, to a real estate investment trust based in Malaysia, Wahbeh said.

He did not rule out pursuing real estate projects outside Qatar.

By Reuters

Plenitude to increase land bank via proposed acquisition

KUALA LUMPUR: Plenitude Bhd unit Plenitude Permai Sdn Bhd (PPSB) has entered into a share sale agreement to acquire the entire equity interest in Intisari Sanjung (M) Sdn Bhd (Intisari) for RM24.5 million cash.

In a statement June 5, Plenitude said Intisari was the registered proprietor and beneficial owner of 327 separate parcels of leasehold land situated in Mukim Dengkil, Daerah Sepang, Negeri Selangor.

The land, Intisari's core asset, are adjacent to PPSB's existing ongoing mix development project at Taman Putra Prima, it said.

The company said the proposed acquisition would provide the Plenitude group synergy in its property development activities where Intisari was expected to contribute positively to its revenue and profit in the future years.

Plenitude executive chairman Chua Elsie said the proposed acquisition was in tandem with Plenitude's corporate vision of increasing land banks required for its property development business.

"As often-mentioned, we are always on the lookout for a good piece of land. We seize the opportunity when we see one and our healthy balance sheet and cash flow position are able to support us in such prospects," she said.

Chua said the land would be considered for future development of residential and commercial properties.

"It will not only provide our group with a new sustainable source of income but it will also enhance our position in the property development sector," she said.

By The EDGE Malaysia (by Surin Murugiah)

Naza TTDI to launch two new projects

SM Faliq SM Nasimuddin posing with a replica project of The Valley TTDI.

SHAH ALAM: Property developer Naza TTDI Sdn Bhd’s current unbilled sales of RM1.5bil will sustain the company for the next three to four years.

Group managing director SM Faliq SM Nasimuddin said that besides the launch of The Valley TTDI, the company would be launching two new projects in Kajang and Shah Alam this year.

The Valley TTDI in Ampang is an upmarket, exclusive residential development targeted at middle and upper end buyers seeking a premium green address in Ampang.

With a gross development value (GDV) of RM393mil, the project comprises double-storey linked villas and bungalows with prices starting from RM2.5mil.

“We managed to sell about 50% of the units during our recent soft launch. I believe if you continue to have a good track record and reputation, buyers will buy as they feel confident with the company and the products offered,” he said, adding that last year the company managed to chalk up sales of RM239mil.

Faliq said most of the buyers were locals and the company showcased the project in Singapore last month and would be going to Beijing later this month to attract more foreign buyers.

The TTDI Kajang will have a GDV of RM339mil while the GDV for TTDI Alam Impian is RM1bil. Both TTDI Kajang and TTDI Alam Impian targeted the middle-income group, he said.

Other ongoing property projects by Naza TTDI include Laman Seri Business Park (GDV of RM131mil), Laman Seri Business Suites (RM51mil) and Jayamas II (RM25mil) in Shah Alam, the 38-storey Platinum Park (RM466mil) and Menara Felda (RM640mil).

“We also have about 480 acres across the Klang Valley for our future developments. Though the size may be small, the locations of our land are quite strategic,” Faliq said.

To woo more buyers, Faliq said the company was teaming up with banks to provide more attractive loan packages such as having schemes like the 5:95 promotion, where buyers need only pay 5% for the downpayment and would only continue to pay the rest once the house was ready.

Naza TTDI, acquired from Danaharta in 2004, is the property arm of the Naza group. Established in 1973, the company’s first major property development was Taman Tun Dr Ismail in Kuala Lumpur.

By The Star (by EDY SARIF)

SP Setia enters China property arena

SP Setia Bhd has entered into a cooperation agreement with Hangzhou Ju Shen Construction Engineering Ltd for a 25-acre mixed property development project in China.

The signing was witnessed by Malaysia's Prime Minister Datuk Seri Najib Tun Razak who is on his first official visit to China, the company said in a statement today.

"This cooperation marks the start of the group’s foray into China and this will be our third venture overseas after Vietnam," said SP Setia's president and chief executive officer Tan Sri Liew Kee Sin.

The venture was in line with the group’s expansion plans to be an international property player, he said.
Liew said it was still too early to reveal more details of the joint venture including the proposed investment, shareholding of the parties involved and project cost.

The project, he said, is located in the growth corridor of XiaoShan and Hangzhou in the province of Zhejiang.

By Bernama

SP Setia makes first foray into China

Najib witnessed the signing of agreement between SP Setia Bhd and Hangzhou Ju Shen Construction Engineering Ltd. (picture source from The EDGE Malaysia website)

BEIJING: SP Setia Bhd has entered into a co-operation agreement with Hangzhou Ju Shen Construction Engineering Ltd to set up a joint-venture company to carry out a mixed real property development project on 25 acres of land in the growth corridor of XiaoShan, Hangzhou in the province of Zhejiang, China.

Prime Minister Datuk Seri Najib Razak, who is on his first official visit to China, witnessed the signing of the agreement today.

SP Setia was represented by its president and chief executive officer Tan Sri Liew Kee Sin while Hangzhou Ju Shen Construction Engineering Ltd was represented by its legal representative, Hu Baifu.

In a statement today, Liew said the co-operation agreement marked the group's foray into China.

This will be the company's third venture overseas after Vietnam where the company is developing EcoLakes at MyPhuoc Industrial Park, 42 kilometres north of Ho Chi Minh City and EcoXanh at Saigon Hi-Tech Park in District 9 of Ho Chi Minh City.

"This venture is in line with the group's expansion plans to be an international property player," Liew added.

However, Liew said it was still too premature to reveal more details of the joint venture, proposed investment and shareholding of the parties or the development with regards to costs, commencement as well as completion.

Hangzhou, located 180km southwest of Shanghai, is the capital of Zhejiang province as well as a key tourist and historic cultural city with a population of about 6.78 million.

With a population of about 1.16 million, Xiaoshan is the biggest district in Hangzhou and is located at its southern gate.

By The EDGE Malaysia (by Surin Murugiah)

Glomac plans property campaign

PROPERTY developer Glomac Bhd is organising a property campaign for both its residential and commercial development from June 6-July 31.

The campaign, Glomac 21st Anniversary Property Campaign, offers three residential township developments in Bandar Saujana Utama, Sungai Buloh, Saujana Rawang in Rawang and Sri Saujana in Johor, the company said in a statement today.

Also included in the campaign are commercial developments, including Glomac Galleria in Sri Hartamas, Plaza Kelana Jaya, Plaza Glomac(Kelana Jaya) and Glomac Damansara (Kuala Lumpur), Glomac said.

The company said its newly launched Glomac Cyberjaya is also open for registration.
The campaign will also feature high-end, exclusive full-featured freehold condominiums, located in the Kuala Lumpur City Centre area known as Suria Stonor, double storey terrace house called Seri Bangi in Bangi and exclusive semi-D’s and bungalows in Suria Residen, Cheras.

Several incentives are available to purchasers, such as a 100 per cent financing loan, zero per cent interest during construction, free sales and purchase agreement and loan documentation, early bird discount and RM500 for successful introducers.

By Bernama

DutaLand in MoU to jointly develop land in China, Iskandar region

KUALA LUMPUR: DutaLand Bhd has entered into a memorandum of understanding (MoU) with China-Boda Group to jointly develop two separate pieces of land in Hebei Province, China and in the Iskandar Development Region.

In a filing to Bursa Malaysia on June 4, DutaLand said the development of the 151.5ha piece of land in China would be developed over two phases.

"Phase 1 consists of a mixed development project with a total estimated gross development value of 6 billion yuan (RM3.1 billion)," it said.

The land in the Iskandar Region is located at Mukim Plentong, Johor Baharu and measures 15.25ha, it said.

DutaLand said the proposed joint venture would be carried out through the formation of two JV companies incorporated in China and Malaysia, respectively.

It said the company incorporated in China would have a proposed paid-up capital of 100 million yuan on an equity basis of 30:70 between DutaLand and Boda Group respectively.

The Malaysian company shall have a proposed paid-up capital of RM50 million with an equity participation of 70:30 between DutaLand and Boda Group, it said.

DutaLand and Boda Group are expected to sign a formal joint venture agreement within six months from the date of the MoU, it said.

By The EDGE Malaysia (by Surin Murugiah)

Sime Darby Property rakes in RM800m from 'parade'

The property arm of Sime Darby has earlier sold RM450 million worth of properties for the first two instalments of Parade of Homes

SIME Darby Property Bhd, the property arm of Sime Darby Bhd, said its ongoing Parade of Homes promotion has sold more than RM800 million worth of properties, which is by far its most successful Parade of Home instalment.

During the first two instalments, the company sold RM450 million worth of properties combined.

"Sales have been very good, given the current economic situation," said its managing director Datuk Tunku Putra Badlishah Annuar in Kuala Lumpur yesterday.

The promotion ends in the middle of this month.
Badlishah was speaking to reporters after the launch of Sime Darby's "Switch!" campaign, an energy-efficiency initiative targeted at more than 10,000 households in townships developed by the company in Shah Alam, Petaling Jaya, Subang Jaya and Klang.

In the first phase, Sime Darby is offering 100,000 energy-savings bulbs at a heavily discounted price.

Each household in Sime Darby townships like UEP Subang Jaya/ USJ Heights, Bandar Bukit Raja, Ara Damansara, Denai Alam, Bukit Jelutong and Putra Heights can purchase a box of eight energy-saving light bulbs at RM50 (retail price: about RM160).

"We want to help Malaysians become conscious of the energy choices they make. If we can switch people to the many small differences they can make at home every day, the cumulative savings will be dramatic - both to their own energy bills and the planet as a whole," he said.

Those who want to take part in the programme are required to register at www.simedarby.com/switch.

By Business Times

Sime's latest campaign attracts RM850mil home sales

Datuk Tunku Putra Badlishah (left) and Puvan Selvanathan at the launch.

KUALA LUMPUR: Sime Darby Property Bhd’s latest Parade of Homes campaign launched in early March has attracted sales worth RM850mil so far, surpassing the combined sales of RM450mil from its previous two home campaigns last year.

“Of the 955 new units offered, nearly 70% or 645 units (have been) snapped up by savvy home buyers as of last week,” said managing director Datuk Tunku Putra Badlishah Tunku Annuar.

This reflected that home ownership was still a priority despite the current economic slowdown, he told reporters after the launch of Sime Darby’s Switch!, an energy saving initiative yesterday.

The latest Parade of Homes campaign, which offers the largest display of properties under Sime Darby’s nine townships, will end on June 15.

Tunku Putra said the Switch! energy initiative was targeted at over 10,000 households in townships developed by the property group in Shah Alam, Petaling Jaya, Subang Jaya and Klang whereby each household was encouraged to exchange their old incandescent light bulbs (ordinary light bulbs) for energy-saving (ES) light bulbs.

Under phase one, Sime Darby will offer 100,000 ES light bulbs for exchange to its township residents where they could purchase a box of eight ES light bulbs at RM150 from the usual retail price of about RM160.

Tunku Putra said the Switch! programme was part of Sime Darby’s corporate social responsibility programme to promote and practise energy efficiency throughout its business operations.

“When our residents exchange 100,000 ES bulbs, they are helping to reduce carbon dioxide emissions by 65,000 tonnes,” said Puvan Selvanathan, Sime Darby Property’s chief sustainability officer.

By The Star

Builders: Stamp duty change stings

An amendment to the Stamp Duty Act has resulted in construction cost going up by between 1 per cent and 2 per cent, say builders

It was meant to make things easier. But a change in the law resulted in those in the construction sector having to pay more for the necessary paperwork.

"This sweeping change has resulted in construction cost going up by between 1 per cent and 2 per cent," Master Builders Association of Malaysia president Ng Kee Leen told Business Times in an interview recently.

Under Budget 2009, the government said it wanted to simplify stamp duty assessment. Industry players, who said they were not consulted, did not object because they thought it would be positive for the sector.

However, they found out that under the Stamp Duty Act amendment, there is a 0.5 per cent duty on construction services agreements that don't require collateral.

This covers consultancy contracts, operation and maintenance contracts, maintenance contracts and facilities services contracts.

The enforcement of the amendment to the Stamp Duty Act 1949 took effect on January 1 2009 by virtue of the Finance Act 2009.

This resulted in ordinary service agreement being slapped with 0.5 per cent stamp duty of the total contract value. Prior to this, the stamp duty on an ordinary service agreement was fixed at RM10.

"Now, the stamp duty office says the new rate of 0.5 per cent applies to second- and third-tier agreements too. This change of such drastic magnitude is causing serious cashflow constraints on contractors, consultant engineers, quantity surveyors and architects," Ng said.

A lot of construction-related contracts that will be carried out this year were negotiated before the law was changed. This means that the extra costs with the new duty rate were not taken into account.

The accumulative result of stamping all agreements (including sub-contracts and outsourcing) at 0.5 per cent of contract value is exorbitant.

Eventually, these extra but unnecessary costs will be passed on to the government and the public because all construction contracts are either government jobs or packages awarded by property developers in the private sector.

Malaysia's contractors have appealed to the government.

"We've forwarded a memorandum to Finance Ministry in April and the officials promised to look into the matter. So far, there has yet to be any positive action. Our members cannot afford to wait any longer. Time is running out and we face penalties for late completion of projects," Ng said.

Malaysian Institute of Architects president Lee Chor Wah concurred with Ng. "The amendment was supposed to simplify stamp duty assessment but it had increased cost of doing business instead," he said.

Already, more than half of its member architects had to take job cuts and pay cuts due to the tough economic climate.

By Business Times (by Ooi Tee Ching)

ING arm launches second property fund in China

SHANGHAI: Dutch financial group ING’s real estate arm has launched a second property fund in China and is targeting to raise US$500 million (US$1 = RM3.48) to US$750 million.

The fund will make nine to 10 investments with average deal sizes of US$50 million to US$75 million, Richard van den Berg, China head of ING Real Estate, said.

The fund is expected to return 20 per cent or more, he said.

The fund will include mainly residential development projects in first- and second-tier Chinese cities, but will also be on the lookout for acquisition opportunities in first-tier cities.

By Reuters

First Hard Rock Hotel in Malaysia to open in September

Solid: An artist's impression of the facade of the Hard Rock Hotel Penang.

HARD Rock Hotel Penang is offering fabulous packages to celebrate its opening come Sept 19.

Take a break and soak in the sun during the day, and watch live band performances and party during the night as Hard Rock Hotel Penang promises the ultimate fun-filled vacation for holidaymakers by infusing elements of Rock ’n’ Roll music and entertainment.

Featuring a modern structural design with a rockin’ edge and memorabilia from rock stars around the world, the hotel – the first Hard Rock Hotel in Malaysia – is offering an Opening Special Package that starts at RM368++ for Hillview Deluxe and RM418++ for Seaview Deluxe, valid from Sept 19 until Dec 18, 2009.

These packages include accommodation for one night, breakfast for two adults and two children (below 12 years old) and a Limited Edition Platinum Record Souvenir.

“To celebrate the opening of this hotel, we are offering the Opening Special to allow everyone to walk this journey of entertainment, fun and music with us. It’s more than just a vacation at Hard Rock Hotel Penang,” said Hard Rock Hotel Penang general manager John Primmer.

Located at the famous Batu Ferringhi in Penang, Hard Rock Hotel Penang boasts 249 chic rooms and suites with unprecedented view of the hill and sea.

All rooms are fully equipped with DVD/CD players, a 32-inch LCD TV, iPod Docking station, Wi-Fi connectivity, IDD telephone, in-room safe, mini bar, hairdryer, coffee- and tea-making facilities and iron and ironing board.

For an exceptional dining experience, the hotel features five food & beverage outlets, including the famous Hard Rock Cafe serving authentic American food; Starz Diner, an all-day dining restaurant featuring Asian and International Cuisine; and the Pizzeria by the poolside. To enjoy a chill-out session, relax at The Shack pool bar or at the Lobby Lounge.

A wide selection of facilities are also available at the hotel, including the Rock Spa, Lil’ Rock Kids Club, Teens Club, a fully equipped gym, Hard Rock merchandise stores and a 2,416 sq m (26,000 sq ft) free-form swimming pool – the largest swimming pool in Penang.

So get ready to rock! For reservations, book online at www.hardrockhotels.net/penang or call the hotel’s toll-free line at 1800-88-ROCK (7625) and request for the Opening Special Package.

By The Star