Piling starts on Johor's biggest condo project

Construction has started on the RM650 million Iskandar and Oakwood Residences in Danga Bay, touted as Johor's biggest condominium development.

The contract for piling works was awarded to Econpile (M) Sdn Bhd, a specialist piling contractor, which is expected to finish the job by October.

Actual building of the three-tower project, comprising about 750 luxurious units, will begin soon. Completion is scheduled for 2012.

The condominium project, taking up 2.5ha, is being developed by Global Corporate Development Sdn Bhd, a joint venture between Iskandar Waterfront Development Sdn Bhd (IWD) and Danga Bay Sdn Bhd (DBSB).

IWD is majority owned by Iskandar Investment Bhd, in which Khazanah Nasional Bhd holds a 60 per cent stake; the Employees Provident Fund, 20 per cent; and Kumpulan Prasarana Rakyat Johor, a state government-linked company, 20 per cent.

Johor Menteri Besar Datuk Abdul Ghani Othman, who is also Iskandar Regional Development Authority (Irda) co-chairman with the Prime Minister, visited the site last Saturday.

Present were IWD chairman Arlida Ariff and chief executive officer Datuk Lim Kang Hoo.

The 28-storey Oakwood Residence, with 230 units, is the southern region's first high-end serviced apartments to be managed by Oakwood Asia Pacific Pte Ltd.

The other two 38-storey towers, called Iskandar Residences, will have 523 residential units.

The podium block will offer a wide range of shopping, food and beverage facilities. Also available will be some 150,000 sq ft of corporate suites for local and multinational corporations keen to set up office in Iskandar Malaysia.

Several other signature waterfront developments in Danga Bay will be announced soon, including at least three hotel properties, an international convention and exhibition centre, office towers, and a wet and dry theme park.

By Business Times (by Sim Bak Heng)

UEM Land in talks with 3 foreign parties for tie-up

KUALA LUMPUR: UEM Land Bhd, the master developer of Nusajaya, is in talks with three foreign parties on possible strategic partnerships for its Puteri Harbour project.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim said the company hoped to conclude the deals this year.

“We hope to seek greater foreign participation besides our existing two Middle Eastern partners,” he said in an interview.

Spanning over 688 acres, the Puteri Harbour waterfront development consists of high-end residential, commercial and retail properties, resorts, hotels and a convention centre.

Wan Abdullah said the group would proceed with all its development plans regardless of the weakening economy.

“We have no choice but to continue with our projects because our company is still growing as a property developer.”

Unlike more established property developers, UEM Land could not afford to defer its projects as this would have a severe impact on its medium-term growth, he said.

“However, we believe the biggest challenge for us this year is to manage our cash flow well in order to meet our business targets,” he added.

On its new project line-up this year, Wan Abdullah said preparation was currently under way for the launch of Phase 2 of its East Ledang project with an estimated gross development value (GDV) of RM195mil.

East Ledang would be developed in seven phases with a total GDV of RM2.4bil. It is a gated high-end, low-density, resort-style residential development that covers 275 acres comprising 861 units.

Phase 1, launched in February last year comprising 139 units, has a take-up rate of 80%.

Wan Abdullah said the group was also expected to launch next to East Ledang soon the Ujana, comprising a 23-storey residential tower with 172 executive apartments and four penthouses.

The company had identified a gap in the market and planned to launch residences comprising medium-cost housing with a GDV of RM630mil by the fourth quarter, he said.

“We will move into more medium-cost housing projects as this is what the market needs right now. More affordable housing, priced from RM140,000, will be built in the next few years at our schemes,” he added.

The medium-cost precinct will cover 261 acres along the Pontian Link that has not kicked off yet.

By The Star (by Shannen Wong)

YNH’s serviced residences to be managed by Fraser & Neave

GEORGE TOWN: YNH Property Bhd rebranded a month ago its RM350mil 163 Seviced Suites project as the five-star Fraser Place Kuala Lumpur to be managed by Frasers Hospitality Pte Ltd, the hospitality arm of the Fraser & Neave Group.

Fraser Hospitality manages four and five-star serviced residences equipped with hotel facilties worldwide under its prestigious Fraser Place, Fraser Residence, Fraser Suites, and Fraser Resort brand names.

Fraser Place Kuala Lumpur is scheduled to commence operations and grand opening in November 2009.

“We brought in Fraser Hospitality to manage because this will enhance returns and add value to our investors from the rentals of the serviced suites,’’ YNH corporate services head Daniel Chan told StarBiz.

“We estimated that for the location – Jalan Perak – where the project is located, which is five minutes from the KLCC shopping complex, the yield generated from rental is between 6% and 10% per year based on the purchase price of the units.

“Fraser Place Kuala Lumpur will be one of the higher-yield generating properties based on the purchase price of the units, which ranges from RM600,000 to RM2mil,” he said.

Chan said Fraser Place Kuala Lumpur was sold out, leaving only about RM80mil in unbilled sales to be recognised.

YNH started selling the project back in late 2005, and completed the sales only recently.

“The investors, both local and foreign, have agreed to lease their properties back to us, as they realised that they could generate higher returns through Fraser Hospitality management,” he said.

Fraser Place KL offers 217 rooms, comprising studios with one and two bedrooms and luxurious penthouses, with built-up areas ranging from 450 to 4,000 sq ft.

Chan said the group had also engaged Fraser Hospitality to manage its 446-unit serviced residence development to be known as Fraser Residence Kuala Lumpur, off Jalan Sultan Ismail, next to Renaissance Hotel.

The RM550mil project, comprising two 30-storey towers with one and two-bedroom serviced apartments, features a sky gymnasium, infinity lap pool, whirlpool and sauna.

“It is scheduled for completion in four years,” Chan said.

On the group’s 95-acre land in Genting Highlands, he said YNH planned to develop residential cum commercial projects with an estimated gross sales value of RM2bil.

On the group’s other projects, Chan said YNH had recently achieved sales of RM300mil for Menara YNH’s retail podium, which measures 180,000 sq ft.

“The offer from Kuwait Finance House to take up 50% of the office space in Menara YNH is expected to be finalised this year,” he said.

On the Kiara 163 project, located next to Plaza Mont Kiara, Chan said the group had achieved sales of RM200mil for the commercial component measuring 480,000 sq ft.

“We will launch the residential component, comprising serviced apartments, soon as there are a lot of enquiries from the local and overseas market,” he added.

By The Star (by David Tan)

Three-star Hotel Sentral targets budget travellers

HOTEL Sentral (KL) Sdn Bhd, a privately-held company controlled by the Ta family, has opened the RM80 million Hotel Sentral, a three-star property in Brickfields, Kuala Lumpur, aimed at budget travellers.

The 192-room 16-storey hotel is located behind the monorail station, which is opposite the Kuala Lumpur Sentral development.

The company's managing director and founder May Ta said she has no qualms about opening the hotel now eventhough city hotels are suffering from low occupancy due to poor market sentiments.

Ta told Business Times that the company is branding the property as a value-for-money destination.

"While we are a three-star property, we are providing in-room safe, an LCD flat screen television in each room, and WIFI services. The hotel is located within walking distance to KL Sentral and public transporation," Ta said.

Walk-in room rates start from as low as RM138 nett for a standard room, to RM345 nett for an executive suite.

Ta added that Hotel Sentral is expected to achieve 60 per cent occupancy at an average room rate of RM110 by December 31 2009.

"We have been operating for just a month and are running at more than 60 per cent currently. We are enjoying from AirAsia's night flights. The first place travellers want to go to upon reaching KL Sentral is to the nearest hotel. This will contribute to growth for the property," Ta said.

Since its opening, Hotel Sentral has received guests from New Zealand, Australia, Japan and India.

Ta said she is optimistic the company will be able to recoup its investments in the hotel over the next 8-10 years.

"Brickfields will be the future Little India and this will encourage more travellers to come towards this part of Kuala Lumpur. We will be investing a lot over the next one year to position the hotel," she said, adding that the rich heritage of Brickfields will bring customers to the hotel's doorstep.

The hotel was officially opened by former Tourism Minister Datuk Tengku Adnan Tengku Mansor on Saturday, witnessed by ex-Inspector General of Police Malaysia Tan Sri Norian Mai, and Datuk Ruslin Hasan, former mayor of Kuala Lumpur.

Ta's father, Tan Sri Ta Kin Yan was also present.

By Business Times (by Sharen Kaur)

Hotel Sentral plans to go regional in 3 to 4 years

The Ta family has been involved in operating hotels and resorts in Malaysia for over 15 years and is planning to branch out to Southeast Asia in three to four years.

Hotel Sentral (KL) Sdn Bhd managing director and founder May Ta said the family wants to continue its legacy to provide value-for-money destinations for all groups of people internationally and not restricted to Malaysians.

"We feel operating budget hotels and three-star properties is the best business to be in whether in Malaysia or overseas. There are many budget travellers looking for the best deals," she told Business Times.

The hotel is headed by Ta, a 25-year-old with a degree in international business from Perth, Australia.

Ta is not new to the hotel business. She has been involved in the hotel business since 12, following her family's footstep, especially her father, Tan Sri Ta Kin Yan, on his business rounds.

"I have always liked the hospitality industry. I like to interact with people. It is very challenging that way. My grandfather used to run Hotel Lido in Brickfields but sold his stake several years ago. I learnt a lot from him," she said.

The Ta family owns among others, the three-star Olympic Hotel and New Winner Hotel in Brickfields, Puduraya Hotel in Kuala Lumpur, Pulau Redang Resort in Terengganu, and Wenchang Golf Club in Hainan Island, China.

Ta said the properties are 60-70 per cent occupied currently despite the slowdown in the economy.

"We have always been involved in running budget hotels and three-star properties. We plan to move up a notch and venture into four-star hotels and resorts soon. We are targeting Malaysia, China and Thailand, but much will depend on opportunities," Ta said.

By Business Times

Reconsider height limit on hotel projects, Penang council urged

The Real Estate and Housing Developers' Association Malaysia (Rehda) has called on the Penang Island Municipal Council to reconsider the restriction made to limit Penang's inner city hotel projects to 18m height or five-storey.

"We respect the decision made by the Penang state authorities to preserve George Town as a world heritage site, but the restriction is unfair to the industry," Rehda president Datuk Ng Seing Liong said in a statement.

The association said it is concerned that the state planning department is now applying the 18m height blanket restriction despite having given approval for the four projects initially.

"It is premature for the state to pre-empt Unesco's decision on the status of the four projects. This is because Unesco has yet to decide how the 18m height restriction would affect the four approved projects in the state's heritage and buffer zones," Ng said, referring to the RM400 million The Pier Hub @Weld Quay project, the RM140 million Boustead Royale Bintang Hotel in Lebuh Downing, the E&O Hotel's extension project and a 23-storey hotel in Jalan Sultan Ahmad Shah.

He stressed that the state should protect the concerned projects, if it believes in the benefits to be generated by the projects.

Ng said it is important to know Unesco's view on the shortcomings of the heritage listing application with regard to the 18m height restriction.

"The state authorities should seriously review and study the need for such restriction. There shouldn't be any assumption that Penang will lose its world heritage status if the projects are carried out," he said.

By Business Times

PHBB in talks to buy prime KL land for RM250m

The deal to acquire the Railway Asset Corp-owned commercial land by Pelaburan Hartanah Bumiputera Bhd has yet to be done despite news about it three years ago.

Pelaburan Hartanah Bumiputera Bhd (PHBB) is in talks to buy a piece of prime land in Bangsar, Kuala Lumpur, for an estimated RM250 million, a deal that has yet to be done despite news about it three years ago.

The 3.6-hectare commercial land is owned by Railway Asset Corp (RAC), a body set up by the Ministry of Transport to help the government, Keretapi Tanah Melayu Bhd and other railway firms develop railway infrastructure.

An official from RAC told Business Times that RAC had been approached by several developers but it was not ready to sell. The official declined to be named because he is not authorised to speak to the media.

PHBB, which was set up with RM1 billion in hand, is meant to help raise the Bumiputera share of the commercial property market.

While it has made some progress buying prime properties in Kuala Lumpur from private companies, deals with government agencies have been slow.

It was back in 2006 that former prime minister Tun Abdullah Ahmad Badawi said PHBB was in the process of buying several prime land in Kuala Lumpur to be developed as commercial buildings and offices.

The list included the KTM land in Jalan Bangsar, Dataran Perdana in Jalan Davis and the Rubber Research Institute land in Jalan Ampang.

PHBB, a unit of Permodalan Nasional Bhd, has bought the Menara Bumiputra-Commerce in Kuala Lumpur from CIMB Group for RM460 million in 2007.

It is also buying CP Tower, an office building in Section 16, Petaling Jaya, from CIMB-Mapletree Management Sdn Bhd for RM200 million.

Sources said PHBB wants to build properties that are almost similar to the thriving Mid Valley City, which comprises malls, apartments, hotels and office buildings, on the KTM land in Bangsar.

It is unclear if PHBB will develop the project on its own or in a joint venture with RAC. It may well ask builder Malaysian Resources Corp Bhd (MRCB) to help since both are partners in existing projects, the source said.

Together, they are developing a retail complex at Kuala Lumpur Sentral in Brickfields.

They are also developing the RM2 billion Penang Sentral transportation project. PHBB officials were not available for comment.

By Business Times (by Sharen Kaur)

Pavilion KL – meeting needs and demands

Pavilion KL has been earmarked by the Tourism Ministry as a tourism asset, testimony to the value it brings to the Golden Triangle and its surrounding areas.

AS the first employee of Kuala Lumpur Pavilion Sdn Bhd when she became its leasing and marketing director nine years ago, chief executive officer for retail, Joyce Yap, certainly knows what it takes to turn a shopping centre into an award-winning destination.

Joyce Yap... The aim is to build the best retail landmark for the city

She was involved in the project planning and designing of the integrated Pavilion KL development from day one.

Yap came on board Kuala Lumpur Pavilion in 2000 and was involved with the project planning and designing team to conceptualise the layout and positioning plans for the shopping centre.

“Right from the project’s conception, we abide by the principle of ‘form follow function’ which needs an indepth understanding of how a retail centre should function and be operated to cater to the needs and demands of all the stakeholders.

“There are many moving targets involved and we are still improving on our hardwares and softwares that include the building facility, environment, customer service, retail mix and merchandise,” she relates in a recent interview.

Yap says the bosses’ priority then was to put together a strong and high calibre team to translate their plans and vision for Pavilion KL into reality.

“The aim is to build the best retail landmark for the city of Kuala Lumpur. We have taken pains to ensure that all our planning, designs and construction are of world-class standards, comparable with the best in the world,” she adds.

The shopping centre opened its doors in October 2007 and a year later, it took home the FIABCI Malaysia Property Award 2008 under the retail category, which qualified it to enter the world-level FIABCI Prix d’Excellence.

On May 29, it brought home the industry’s Oscar – the FIABCI Prix d’Excellence Award 2009, also under the retail category. China’s Shanghai Wanda Plaza in Shanghai emerged as the second best winner.

With the award, Pavilion Kuala Lumpur is now on the map of world-class shopping centres. Other past winners from Malaysia include 1-Utama and Suria KLCC.

The prestigious award recognises projects that excel in the areas of architecture and design, development and construction, community benefits and environmental impact, and financial and marketing.

Yap says Pavilion KL is the first retail centre in Kuala Lumpur to feature sleek and ultra-modern street front duplex stores and home to flagship stores of international designer brands.

“We are currently operating at 100% occupancy with a total 450 tenants. Plans are afoot to expand the retail space by another 30,000 sq ft through the exercise of space planning.

“New stores scheduled to open in the shopping centre in the coming months include international brands like TUMI, Van Laack Swarovski, and Austin Chase Coffee,” she adds.

Yap says international shoppers should not forget Kuala Lumpur as a value-for-money shopping destination that offers a great variety of brands and shopping experience.

“In terms of retail infrastructure, Kuala Lumpur is already at par with other cities like London, Tokyo, Singapore and Hong Kong.

“Malaysia offers the cheapest branded cameras and watches although for certain branded fashion products, our prices are about 5% to 10% higher than the Hong Kong Price Index. The country also has some of the finest airports, roads, hospitals, golf courses and international schools.”

Yap stresses that to give a boost to the country’s retail potential, private retail players and the Government should work closely to package all the resources and promote them to the world.

By The Star (by Angie NG)

Redeveloping and conserving Penang’s heritage

It is long overdue for Penang to come out with holistic and well thought out plans and programmes for the redevelopment and rejuvenation of George Town’s inner city.

Proactive and concerted efforts by the state government, the private sector and Penang folks should be initiated soon for a workable blueprint in order for the state to regain its glory as the “Pearl of the Orient”.

In the drawing up of a blueprint for the redevelopment, it is important that all stakeholders, especially property owners and those living, working, and operating their businesses around the inner city perimeters, be consulted and their concerns duly addressed.

Many Penangites, especially those who are illiterate or don’t have the time to read up on current issues, are still in the dark over Penang’s world heritage status and what it means to them.

George Town was declared a World Heritage Site by the United Nations Educational, Scientific and Cultural Organisation (Unesco) on July 7, 2008.

It will do the people good if those involved in the planning of George Town’s growth and development take the initiative to organise roadshows and public education programmes to highlight the salient points and issues to the people, and at the same time get their feedback for the blueprint.

The state government should come out with a referendum and consult all the stakeholders, business guilds, clans, associations, and non-governmental organisations (NGOs) that are working towards conserving Penang’s heritage while ensuring it stays relevant in these modern times.

Although it is important to conserve Penang’s old world charm, rich heritage and culture in keeping with its status as a Unesco World Heritage Site, there should be avenues for the new and modern side of Penang to co-exist with the old to ensure the people’s changing lifestyle and livelihood will not be jeopardised.

As a Penang girl, I am certainly proud of the state’s rich Straits Settlement cum Baba Nyonya heritage and culture that dates back to so many generations of the early settlers from China, India, Indonesia and the Arab continents, among others.

Many Penangites who are now residing in other parts of the country (me included) and overseas always have pangs of nostalgia when recalling their younger days in good old Penang.

Besides the lure of the good Penang cuisines, there are many beautiful historical buildings that were built many centuries ago that are still around in various parts of the island, including the inner city, today.

But there are also many pre-war buildings that are left in very dilapidated conditions after their tenants left those buildings when rentals soared after the repeal of the Rent Control Act in 2000.

Many of these buildings have become hazardous and are unfit for occupancy after their owners failed to upkeep and maintain them.

The introduction of clear and transparent guidelines on what can and cannot be done in the redevelopment of these ageing buildings will revitalise and bring back life to the inner city.

Penang can take a leaf from many cities around the world including London, Sydney and Singapore that have successfully rejuvenated and redeveloped old parts of their cities while maintaining the rich heritage and history for the present and future generations to enjoy.

While many of the historical buildings should be conserved in their current original form such as the restoration of the Cheong Fatt Tze Mansion and Khoo Kongsi buildings, those that are too dilapidated should be redeveloped.

Retaining the original facades of these old buildings while allowing new extension annexes within the permissible heights to be built is one practical way of adding value to these buildings.

Buildings that are too old to be restored should make way for new ones that incorporate the elements of Penang’s “old world charm” in the building’s architecture and facade and are within the permissible heights to blend in with the whole environment.

Making known these practical solutions and guidelines that allow room for value adding and reasonable return on investment will encourage the private sector to partake in the inner city’s rejuvenation and inject a new glow and versatility into George Town.

Currently, some interested parties, including NGOs, are taking a very ad-hoc view of how to go about restoring buildings without looking at the big picture of rejuvenating George Town’s inner city.

Instead of opposing every proposed plans, they should offer value added and constructive ideas that are practical and workable.

It is heartening to note that even Unesco has expressed its empathy for Penang folks and has directed its two representatives, David Logan and Giovanni Boccardi, to appraise the situation on how the 18m height restriction for the four hotel projects approved for George Town’s inner city will affect the stakeholders and the people’s livelihood.

Boccardi, who is Paris-based World Heritage Centre chief of unit for East Asia and the Pacific, and Logan, International Council on Monuments and Sites member, were in Penang from April 26 to 30 to meet representatives of the developers of the hotel projects in the Unesco-listed heritage zone.

Their findings are set to be deliberated at the upcoming Unesco World Heritage Committee meeting in Seville, Spain, from June 22 to 30.

The four developers – Asian Global Business Group, Boustead Group, the Low Yat Group and Eastern & Oriental Group have been granted approvals from the Penang Island Municipal Council to build hotels in the heritage zone before it was placed on the Unesco World Heritage List.

With so much at stake, Unesco’s impending decision will put to rest the anxiety of these developers and hopefully, it will be a well thought out and win-win one for all stakeholders.

Meanwhile, instead of directing the four developers to confine the height of their hotels to 18m or five-storeys, the state government should also wait out for the final Unesco decision on the projects.

After all, commercial projects that are viable will generate huge spin-offs to Penang’s economy and create employment for its people.

·Deputy news editor Angie Ng believes that for George Town to thrive as a vibrant heritage city, it is imperative that quality commercial developments that are within the guidelines of its world heritage status and that add value to the city, be encouraged.

By The Star (by Angie Ng)

Spotlight on IDR draws interest in UEM Land

An aerial view of the Johor Administration Centre in Nusajaya.

EARLIER in the week, UEM Group Bhd took the spotlight when news of a lawsuit to the tune of RM840mil by the Qatar government over a dispute regarding a highway project in Qatar came to light.

It appears that UEM Group received a set of legal documents from the state of Qatar on April 27.

The plaintiff, which is Qatar, claimed that the defendants – Parsons International Ltd, UEM Group and Qatar Insurance Co – failed to fulfil contractual obligations in relation to the construction of the Salwa Road in Doha.

They are being sued for 876.32 million riyal (about RM840.98mil).

Sources said Datuk Izzaddin Idris, the newly-appointed managing director and chief executive offcer of UEM Group (effective July 1), was told of the ongoing issue when he was hired, and as such, was “made aware” of the situation.

Izzaddin will be succeeding Datuk Ahmad Pardas Senin, who is retiring, on July 1.

Industry observers believe that Izzaddin has been tasked to troubleshoot certain issues plaguing the group currently.

UEM Land Bhd’s group chairman Tan Sri Ahmad Tajuddin Ali had told reporters after its annual general meeting, that UEM Group would be able to manage the lawsuit.

Afterall, it was merely the contractor for the project, and the second defendant in the lawsuit.

However, as far as UEM Land is concerned, there is no real impact.

Meanwhile, interest in UEM Land has intensified in recent weeks.

Greater bilateral ties with Singapore, and the possibility of a third bridge from Changi to the eastern part of Johor have all but brought the spotlight back to the Iskandar Development Region (IDR) over the last two months.

Naturally, the key beneficiary would be the largest landowner and master developer of Iskandar Malaysia – UEM Land.

It owns 40% or 9,564 acres of the entire land in IDR.

The appeal behind the UEM Land growth story has always been on its appreciating land prices, favourable domestic policies as well as Khazanah Nasional Bhd’s presence to mitigate execution risk.

As it is, land value in Nusajaya have already risen from an average of RM5 to RM8 per square feet (psf) to RM12psf since Iskandar Malaysia was launched in 2006.

Every 10% increase in current land prices raises UEM Land’s revised net asset value by 11%.

There are huge potential revaluation gains for UEM Land from its low land carrying cost of RM4.40psf.

To date, the IDR has attracted RM42bil of development pledges; with actual cumulative investments reaching RM12.9bil.

It has sold approximately 2,476 acres of undeveloped land parcels in Nusajaya to developers, investors and strategic partners.

This is key for initiating a population base for Nusajaya and accelerating the overall pace of its development.

Some of the prominent development projects include Acerinox’s RM5bil steel manufacturing plant, the Johor Administration Centre and the RM650mil Legoland.

“With the Johor Administration Centre launched in April, the development concept of Nusajaya becomes a reality.

We should see increased business activity and a growth in population moving forward,” says a fund manager.

Certainly, while no major developments are expected to be completed in 2010, but by 2011, the IDR should feature a fully operational Nusajaya, which will boast of the New Castle medical school, a partially operational Puteri Harbour, Danga Bay villas, and the Coastal Highway.

The Khazanah-spearheaded Legoland is expected to be operational only in 2012.

An initial optimism for the IDR was when UEM Land successfully attracted international developers such as Limitless LLC and Damac Holdings to participate as strategic partners in Nusajaya.

Limitless and Damac are two of the bigger investors in Nusajaya, with agreements to develop residential and commercial property at Puteri Harbour, the 688-acre crown jewel of the development.

Both have international reputation and solid financial backing.

Herein lies the catalyst.

For the uninitiated, Dubai-based Damac Holdings, is one of the world’s leading luxury waterfront developers.

It plans to build commercial and residential properties and a private marina with a projected gross development value (GDV) of about RM3.8bil in Puteri Harbour, Nusajaya.

Spanning 44 acres, Damac has commited to invest an initial RM397mil for this project to be undertaken over eight to 10 years.

It will be handled by Damac Properties (M) Sdn Bhd, a subsidiary of Damac Properties LLC, the real estate development unit of Damac.

Meanwhile, UEM Land’s joint venture with Limitless is through its development vehicle Haute Properties Sdn Bhd, where it owns a 40% stake.

It was reported that earlier this year, Limitless has already submitted the layout for the 100-acre residential project in Puteri Harbour .

Haute Properties will develop the 111 acres of the precinct with an initial investment of RM241.8mil.

The development was expected to commence in 2008 and will be completed by 2013 with an estimated GDV in excess of RM1.5bil.

While so far there has been indications of both companies retreating on their agreements, observers close to the company says that no fresh funds have poured in for its Nusajaya development in Iskandar Malaysia.

Afterall, both companies have been grappling with their own problems back home, as the global financial crisis burst the bubble of the Middle Eastern property market.

There have been reports of Damac laying off staff at its headquarters in Tecom, Dubai.

According to Khaleej Times, a Dubai-based newspaper, Damac laid off between 45 and 50 employees in February.

The company axed 200 workers in October last year as the global credit crisis has slowly begun to leave its impact on the property sector.

Earlier in the year, there were reports of employees fired by Damac, that were not paid their full settlement.

According t o an analyst, construction work on Damac’s site has yet to begin.

Damac Properties has some US$30bil worth of projects in the Middle East and North Africa region.

On the other hand, Limitless has nine global projects with a total GDV of US$100bil across UAE, Saudi Arabia, Jordan, Vietnam, Malaysia, Russia and India.

“I heard that Damac may want to scale back on its development in Nusajaya, as they have bigger problems in their other developments elsewhere,” says one analyst who used to track UEM World Bhd.

By The Star (by Tee Lin Say)

LBI Capital to launch RM190m projects

PROPERTY developer LBI Capital Bhd plans to launch three projects in the Klang Valley with a total gross development value (GDV) of RM190 million this year.

Its executive director, Kong Sau Kian, said the projects comprised bungalows in Petaling Jaya at RM60 million, industrial lots in Puchong at RM100 million and service apartments in Subang Jaya at RM30 million.

"We are in the midst of getting the necessary approvals from the authorities," he told reporters after the company's annual general meeting in Shah Alam today.

Kong said LBI Capital would continue looking for other projects to maintain a healthy revenue amid the weak economic environment.

"This is expected to be challenging year as the sharp increase in the cost of building materials last year will continue to affect profit margin," he said, adding that other major component costs such as steel remained high and continued to affect the property business.

However, the favourable low interest rate and incentives offered by the government will help the industry to mitigate the adverse impact of the current downturn, according to him.

LBI Capital posted a lower pre-tax of profit RM1.767 million in its first quarter ended March 31, 2009, compared with RM2.064 million in the same quarter last year. Its revenue declined to RM19.017 million from RM19.613 million previously.

The company is now developing four residential projects, with three of them scheduled to be completed by year-end.

On the company's rubber manufacturing division, Kong said the business remained tough as margins continued to be pressured by the rising cost of raw materials and intense price competition.

The division is contributing about five per cent of the company's revenue, he said.

By Bernama

Magna Prima to launch RM700m projects in 2nd half

PROPERTY developer Magna Prima Bhd will launch three projects worth over RM700 million in the second half of 2009 to boost its income.

Its new chief executive officer Loo Kent Choong said it will launch One Jalil, a gated development in Bukit Jalil featuring 109 units of superlink homes worth RM85 million, in the third quarter.

By December, it will launch Magna Prima City, a RM600 million gated residential project along Jalan Kuching in Kuala Lumpur.

"Magna Prima is well poised given that it has potential landbank in prime areas in the Klang Valley.

"We hope to maintain our 2008 net profit and revenue this year. Sales from our on-going projects have been good," he said after the company's shareholders meeting in Selayang yesterday.

For the year to December 31 2008, Magna Prima posted a net profit of 27.28 million on revenue of RM344 million.

Its on-going projects are Magna Ville in Selayang, U1 Shah Alam and Dataran Otomobil.

An accountant, Loo said he joined Magna Prima as there was tremendous potential for it to grow. Magna Prima was in the limelight recently for various reasons.

Its CEO Lim Ching Choy and group managing director Datuk Steven Lee Kian Seng resigned in May. Lim is now the group managing director of Ho Hup Construction Co Bhd.

In March, Magna Prima announced a deal to buy 1.05ha of prime land in Jalan Ampang, Kuala Lumpur, from the Lai Meng Girls School Association for RM148 million.

The school association has confirmed that it would move to a site in Bukit Jalil, Loo said.

Magna Prima plans to build a 50-storey Class A office building, a 38-storey serviced apartment tower, and a two-level retail podium, worth RM1.3 billion on the existing school site.

It aims to start work in 2012.

By Business Times (by Sharen Kaur)

Gamuda rises on rating upgrades

Gamuda Bhd, Malaysia’s second-biggest builder, rose to a 10-month high after Macquarie Group Ltd and Maybank Investment Bank Bhd upgraded the company’s stock rating, saying it will benefit from the government’s stimulus package.

The stock rose 1.8 per cent to RM2.83, at 12.30pm, headed for the highest close since Aug 15. Gamuda shares have jumped 50 per cent this year.

There is an “urgency on the part of the government to accelerate the rollout of infrastructure projects,” Macquarie said in a report today. Gamuda is a “potential beneficiary.”

Prime Minister Najib Razak has announced two stimulus plans totaling RM67 billion (US$19 billion) to help resuscitate economic growth as the nation nears its first recession in a decade. Gamuda has an outstanding order book of RM8 billion that should support construction earnings, Maybank Investment said in a report.

The company is expected to bid for “major” contracts such as the Sepang budget airport terminal, the Pahang-Selangor water transfer project and the Klang Valley railway-line extension, Maybank said. It will also bid for mid-sized jobs, or contracts valued at less than RM1 billion, to speed up its order book replenishment, Maybank said.

Maybank raised the stock rating on Gamuda to “buy” from “hold” and increased the target price to RM3.35 from RM2.50.

The outlook on Gamuda’s construction business has turned “more positive” and the stock will “re-rate on the back of positive newsflow,” Macquarie said. It upgraded the stock to “outperform” from “neutral” and the target price increased to RM3.35 from RM2.30.

By Bloomberg

Malaysia to relook stamp duty rate

WORKS Minister Datuk Shaziman Mansor said the government needs to relook the stamp duty of 0.5 per cent on service contracts, as it is having a negative impact on the construction sector.

The new stamp duty rate, proposed under Budget 2009, makes a RM10 million construction contract attract an ad valorem duty of RM50,000.

The combined effect of stamping all agreements including sub-contracting and outsourcing at 0.5 per cent of the contract value is exponential and will be passed on to consumers, regardless of whether they are government or private contracts.

Master Builders Association Malaysia president Ng Kee Leen last week urged the government to revert to the previous practice of a RM10 flat fee on construction services agreements that do not require collateral.

"I support the contractors' call to relook into this stamp duty rate change," Shaziman told reporters after officiating at the Construction Industry Integrity Seminar organised by Construction Industry Development Board (CIDB) in Kuala Lumpur yesterday.

Asked if he specifically supported a complete waiver of stamp duty on construction contracts or to revert to the RM10 flat fee, he replied: "I support a revision. The decision lies with the Cabinet."

On the recent collapse of Jaya Supermarket in Petaling Jaya and the roof of Stadium Sultan Mizan Zainal Abidin in Terengganu, the minister said investigations are still ongoing and he hopes to receive the reports soon.

Shaziman said in the mean time, CIDB will continue to weed out contractors who are incompetent and not credible from its register.

"We don't want part-time contractors. We'll strike out the dormant ones," he said.

Currently, there are 63,000 contractors of varying grades registered with CIDB.

By Business Times (by Ooi Tee Ching)

SunCity prefers Malaysia for listing

PETALING JAYA: Malaysia has become the preferred listing destination for Sunway City Bhd’s (SunCity) proposed real estate investment trust (REIT) although it is not ruling out other proposals for reverse takeovers in Singapore and Australia.

“The authorities in Malaysia are very proactive and doing their level best to get the more established companies to list in Malaysia,” SunCity executive director Datuk Jeffrey Ng told StarBiz yesterday.

Industry sources added that companies also had a more positive view following the revamp of main and second boards into a unified board, further improvement in processes and procedures as well as liberalisation of the 30% bumiputra quota in 27 service sub-sectors.

“Malaysia is definitely a preferred destination,” said Ng. “But we are not closing our doors to other opportunities.

If something very firm comes up, we will study it in the best interests of shareholders, one of which is GIC (Government of Singapore Investment Corp).’’ Early last year, SunCity was reported to be more keen on listing in Singapore where the tax regime is more attractive to REIT investors in relation to withholding tax.


However, the global financial crisis, which erupted in the later part of last year, has changed the scenario and investors turned risk averse.

In terms of mandate, this represents a fresh opportunity to select possibly new parties that can give the best terms. Under the old mandate, the global investment banks were Goldman Sachs and UBS while the local investment banks were CIMB Investment Bank and RHB Investment Bank.

“There could be new parties involving global and local investment banks,” said Ng. “Such a major fund-raising exercise will have to go into the global markets. At the end of the day, we will study what the most aggressive investment bankers have to offer.”

In the wake of early market recovery, SunCity is monitoring the indicators and will make every effort to get into the market as fast as possible. “We don’t want to miss out or be considered slow. We are watching the markets closely,” he said. “If there is a window of opportunity that fits our criteria, we will definitely implement (the listing).”

Among the factors involved are market timing and the need to balance yields in the REIT market and bond yields, which represent the cost of funds and is an indicator used in the calculation of REIT pricing. Investors would also weigh their options in the REIT and bond markets.

StarBiz recently reported that backed by assets valued at RM3.7bil, the proposed REIT listing is possibly the largest in the country. According to the report, about 75% of SunCity’s operating profit of RM175mil for the first half ended Dec 31, 2008, was from its property investment assets and SunCity was expected to receive total rental income of RM285mil this calendar year of which 70% would be from Sunway Pyramid Shopping Mall.

AmResearch managing director/regional head Benny Chew suggested that SunCity list its REIT at a point when property stocks were trading close to their net asset value.

“It will then be seen as a good alternative investment,’’ said Chew, who also expressed concern over the inclusion of diversified assets into the REIT as he considered suburban retail to be the main growth driver. “In general, they have to convince investors on their strategies to grow the fee income.’’

However, other analysts pointed out that SunCity’s proposed REIT would have assets with synergistic benefits in the integrated resort city, education, medical and office, retail, hotel and leisure theme park.

“Next year should be more exciting for the listing,” said a senior analyst with a foreign research house. “It will be cheaper as currently REIT yields are high on worries that rentals might weaken.”

ECM Libra Research acting research head Ching Weng Jin agreed it was time to dust the proposals previously kept on the shelf as market sentiment had changed compared with six months ago. “The properties are well-managed and rental yields are good. It is also more encouraging to list here in view of liberalisation of rules.”

By The Star (by Yap Leng Kuen)

Belleview launching projects worth RM500mil on Penang island

GEORGE TOWN: Belleview Group is launching residental and commercial properties on the island with an estimated gross development value (GDV) of more than RM500mil this year.

Group managing director Datuk Sunny Ho told a press briefing that the projects comprised 227 houses for Palmyra Residences in Balik Pulau, 1,300 condominiums at three high-rise schemes in Air Itam, 62 terraced and semi-detached properties in Bukit Dumbar, and the 1st Avenue shopping mall complex in George Town.

“We are launching now because of the lower raw materials prices. Steel, for example, is now about RM2,000 per tonne from about RM4,000 earlier this year.

“The prices of other materials have dropped by about 30% compared with earlier this year,” he said.

Banks were also offering attractive housing loans at an all-time low interest rate of 2.2% per annum, he said, adding that Belleview also believed the global economy was on its way to recovery.

The Palmyra Residences comprises double-storey terraced and semi-detached houses priced from RM373,000. The properties have built-up areas ranging between 1,625 and 1,976 sq ft.

In Air Itam, the condominium units under Melody Homes, All Seasons Park and All Seasons Place will be built on a 20-acre site, which will also house a 250,000 sq ft commercial complex.

In the third quarter, Belleview will launch 1st Avenue, a shopping mall with an estimated gross commercial area of 600,000 sq ft, next to Komtar.

By The Star (by David Tan)

Terang Jaya to run RM5b Segari project

CHINA, Abu Dhabi (UAE) and Saudi Arabia are expected to invest RM5 billion to develop a 354-hectare township based on tourism and Islamic concept, at Segari, near Lumut.

The three countries have appointed a local company, Terang Jaya Kayangan (M) Sdn Bhd to manage the project.

Terang Jaya Kayangan (M) Sdn Bhd, Chief Executive Officer Datuk Zainal Abidin Hamid said the new township would comprise a theme park, floating shops, shopping mall, hotel, education centres, hospital and a five star resort.

"The township will also comprise low cost, medium cost and exclusive homes plus government buildings.

"The site for the development is strategic as it is situated near the sea and surrounded by hills. It will certainly attract foreign investors, especially those from the middle-east countries, to buy their second homes here," he told reporters in Lumut today.

Zainal Abidin said the project was expected to start by June next year and completed in 2020.

He added that when completed, the new township would offer 40,000 job opportunities for professionals and non-professionals.

By Bernama

UEM Land in talks to get RM350mil

KUALA LUMPUR: UEM Land Holdings Bhd is in talks with two local banks for RM350mil in funds to finance its projects in Nusajaya.

Chairman Tan Sri Dr Ahmad Tajuddin Ali said the amount was scaled down from RM850mil it had sought earlier as banks were tightening their credit facilities in view of the current economic slowdown.

Tan Sri Dr Ahmad Tajuddin Ali (left) and Wan Abdullah Wan Ibrahim looking at the UEM Land Holdings Bhd 2008 annual report on Wednesday.

“The funds are for the second phase development of Puteri Harbour and also for East Ledang development,” he said after the group’s AGM yesterday.

Tajuddin said the group was projecting a 20% growth in revenue this year over the RM511.6mil revenue it chalked up last year, focusing on projects in Nusajaya in Iskandar Malaysia and also in Cyberjaya.

He said the group was also targeting for 6% return on equity this year, almost the same as last year, given the challenges it had to face as a result of the economic downturn.

“We admit that the group is facing difficulties now as the market is not doing well. However, we will try to achieve the target by implementing strategic and different marketing approaches,” he said, adding that the group might defer launching some of its projects to a later date depending on the market situation.

Tajuddin said currently, the group still had about 9,000 acres in Nusajaya for development and would proceed with the plans, design and approval process for future projects as it wanted to be ready once the market improved.

“Apart from Nusajaya and Cyberjaya, we are evaluating certain land in the Klang Valley for acquisition and will announce it once the sale and purchase process is done,” he said.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim added that the group was still looking for other new bankable projects and might seek more funds.

“Our current gearing is also low at 0.35 times for our property section. If we find other new bankable projects, we will apply for more loans, even going back to the same banks,” he said.

He also said although the market was challenging, the group still managed to get buyers, especially international buyers, for its property projects in Nusajaya.

By The Star

Sunway sells two foreign firms

KUALA LUMPUR: Sunway Holdings Bhd units Sunway Holdings (Vietnam) Sdn Bhd and Sunway Property (China) Ltd have agreed to dispose of Hochimex Nominee Co Ltd and its subsidiary for US$17mil (RM59.33mil) cash to Mega Methods Sdn Bhd.

Mega Methods is a wholly-owned unit of Sunway City Bhd.

Hochimex owns Sunway Hotel Hanoi Liability Ltd Co, which operates the Sunway Hotel Hanoi.

By The Star

Starwood to build two luxury hotels in Vietnam

HANOI: US developer Starwood Hotels plans to build two luxury hotels in Vietnam, including a 5-star resort on the central coast, the government said yesterday.

Starwood Hotels & Resorts Inc plans to build a 330-room Le Meridien hotel on China Beach, where US troops once went to relax on leave during the Vietnam War.

The stretch of coastline has become a magnet for tourism and five-star hotels. In addition, Hyatt and Marriott resorts are also planned.

By AP