MK Land returns to the black

MK Land Holdings Bhd returned to the black with a net profit of RM18.3 million in its full year to June 30 2009, and it expects to do even better this year, driven by higher property sales.

The developer, which suffered a loss of RM60 million in 2008, said its turnaround was due to strong property and land sales.

"The strategies which we put in place during the recession has paid off and we are optimistic of seeing continuous growth in the current financial year," said its executive chairman Tan Sri Mustapha Kamal Abu Bakar.

He said the company is seeing robust growth in sales despite the economic slowdown due to its properties' strategic location and also a more stable property market.
"Another contributing factor is the success of our turnaround plan or renaissance which took place early July 2008," Mustapha Kamal told reporters at a media briefing in Petaling Jaya, Selangor, yesterday.

MK Land's revenue for 2009 stood at RM246.5 million as against RM137 million previously.

In the 12-month period, the group recorded sales worth RM136 million compared with only RM93 million previously.

Mustapha Kamal is confident the property market will continue its recovery over the next 12 to 18 months.

"With a total landbank of 2,833.6ha, we have enough landbank to last us for the next five years," he said, noting that in the first three months alone until August, the group already achieved sales worth RM271 million.

The group has a total gross development value of RM19.8 billion.

By Business Times (by Azlan Abu Bakar)

Sunway Damansara to open new retail centre

COME December, Sunway Damansara Sdn Bhd, a property development company, will open a RM141 million lifestyle retail centre in Kota Damansara.

Sunway Group of Shopping Malls' Chief Executive Officer H.C. Chan said Sunway Giza, the first lifestyle retail centre of its kind, would serve as a convenient shopping and dining area for the residents in the vicinity.

Saying that retail space was already 85 per cent taken up, he added that Sunway Giza would be managed by the same management team of Sunway Pyramid shopping mall.

Sunway Giza will consist of 48 units of shop offices, a three-storey lifestyle shopping mall and basement parking with 800 bays.
"We are assured of the retail centre's success as the area has a population catchment of 700,000 people from Subang Jaya, Bangsar, Kelana Jaya and Mont Kiara, all within a nine kilometres radius", he said in a statement today.

Sunway Damansara is a joint-venture between Sunway City Bhd and Perbadanan Kemajuan Negeri Selangor.

By Bernama

PJ Dev registers lower Q4 pre-tax profit

PJ Development Holdings Bhd has recorded a lower pre-tax profit of RM18.264 million for its fourth quarter ended June 30, 2009, compared to RM22.887 million in the same period last year.

Its revenue rose to RM168.208 million from RM164.845 million previously.

Basic earnings per share stood at 2.45 sen from 3.78 sen previously.

For the financial year, the group's pre-tax profit dropped to RM37.450 million from RM122.566 million in the previous year.
Its revenue declined to RM628.731 million from RM680.029 million previously.

By Bernama

China plans to let funds, brokers launch REITs

SHANGHAI: China plans to allow fund houses and brokerages to launch real estate investment trusts, or REITs, that would be publicly traded on the Shanghai and Shenzhen stock exchanges, two people with direct knowledge of the proposal said.

REITs should be launched in the form of closed-end funds via special asset management firms, in which property developers can also own a stake, according to draft rules issued by The China Securities Regulatory Commission (CSRC) for consultation, the people said.

The draft rules are subject to changes and it is not clear when they will be officially published.

China's bourses are competing with the country's interbank market in launching China's first REITs as soon as this year, as Beijing accelerates financial reforms to support a slowing economy and the property market.
"REITs are liquid investment instruments that would enable individuals to invest in properties even with only a few thousand yuan," said Alex Wang, real estate lawyer at Paul, Hastings, Janofsky & Walker LLP.

He added that REITs would mean a new source of funding for developers and may create a new exit channel for foreign property investors in China such as Morgan Stanley.

A REITs market in China would also generate new revenue streams for fund companies and brokerages, such as Haitong Securities Co and Harvest Fund Management Co.

But analysts noted that a shortage of qualified properties, uncertainty over tax treatment and fears of irrational price swings all threaten to delay the launch of REITs in China.

REITs, which invest mainly in commercial and industrial properties and pay most of their rent as dividends, have been long-established in the US and Australia but only caught on across Asia over the last five years.

China's stock exchanges appear to be lagging the interbank market in the race to pioneer the REITs market.

The People's Bank of China plans to submit a proposal to the State Council, or Cabinet in September, seeking approval for the launch ofREITs in the interbank market by the end of this year, the Caijing magazine reported on Monday.

Developers including Shanghai Zhangjiang Hi-Tech Park, Shanghai Jinqiao Export Processing Zone Development Co Ltd, Shanghai Lujiazui (Group) Ltd and Shanghai Waigaoqiao (Group) Co Ltd are likely to raise money via REITs in a pilot programme, Caijing reported.

Creating a domestic REITs market was part of a financial reform package unveiled by the government last December to aid the rapidly slowing economy and help developers, which at that time suffered from stagnant sales, tight credit and a frozen IPO market.

The real estate market has rebounded sharply this year after China unveiled a massive stimulus plan and boosted lending, making developers less willing to sell high-yielding properties.

"One major problem is that there's a shortage of qualified properties to be bundled into REITs," said one person familiar with the situation.

He added that for REITs to be attractive enough to investors, the underlying assets must generate an annual rental yield of 7 to 8 per cent.

It is a challenge especially at a time when the global economic downturn saps demand for lodging and office space in China, with prime office rentals in major cities falling in the first six months, real estate consultancy CB Richard Ellis said.

By Reuters

Penang raises density for property development

GEORGE TOWN: The state government has raised the density for property development in Penang, which will bring down land cost and stabilise property prices, said Hunza Properties Bhd executive chairman Datuk Khor Teng Tong.

Datuk Khor Teng Tong says it will help arrest the escalation of property prices.

“The state government recently decided to increase the density to 280,000 sq ft in built-up area from 90,000 sq ft per 100,000 sq ft of land.The decision to increase density will allow developers to build more, hence giving consumers more choices.

“It will also help arrest the escalation of property prices over the next few years,” he said at a company briefing for the media, analysts and bankers.

On the group’s projects on the island, Khor said Hunza would finalise the design plans for a “green” apartment building project on a 4ha site soon.

The apartments would have built-up areas ranging between 1,300 and 1,800 sq ft

The project was expected to contribute strongly to the bottom line of the group for the financial years ending 2011 and 2012, Khor said.

On the Gurney Paragon project, Khor said the designs and plans for the shopping mall had been finalised and submitted to the relevant authorities for approval.

“We hope to start work by early 2010,” he said.

The seven-storey shopping mall will have a gross built-up area of 1 million sq ft, of which 650,000 to 700,000 sq ft would be lettable.

On the property market in Penang, Khor said property was currently in short supply.

“The shortage of supply is mainly due to a slowdown by developers. Not many new housing projects have started in the past one year.

“Furthermore, work on projects in the state has to stop at 6pm, which will delay the delivery of units, resulting in lower supply and the increase of property prices,” he said, adding that the local authorities needed to speed up approvals for new housing projects to meet market demand.

For the fiscal year ended June 30 (FY09), the group posted RM27.6mil net profit on revenue of RM91.8mil compared with RM48.4mil and RM245mil respectively in FY08.

By The Star

UM Land ties up with Tradewinds Johor

PETALING JAYA: United Malayan Land Bhd (UM Land) has proposed a joint venture with Tradewinds Johor Sdn Bhd to govern Extreme Consolidated Sdn Bhd (ECSB), and to participate in a property development project in Kulai, Johor.

Tradewinds Johor is an indirect wholly-owned subsidiary of Tradewinds Corp Bhd.

In a filing with Bursa Malaysia yesterday, UM Land proposed to purchase the remaining 49% of the total issued and paid-up share capital of ECSB in a call option agreement with Tradewinds Johor.

And UM Land – through wholly-owned subsidiary ECSB – has proposed to acquire a piece of freehold 629.25-acre land in Kulai from Ambang Budi Sdn Bhd and Hartaplus Realty Sdn Bhd for RM233mil cash upon the terms and conditions in the sale and purchase agreement dated Feb 12.

UM Land will hold an EGM in respect of the proposed joint venture and acquisition on Sept 10 in Kuala Lumpur.

By The Star

Malaysia's Renexus proposes to build houses in Pakistan

Local construction firm, Renexus, has submitted a formal proposal to the Pakistan government for the construction of 20,000 low-cost houses in each of its eight major towns.

Pakistan High Commissioner to Malaysia Lt-Gen (Rtd) Tahir Mahmud Qazi said the state land in major towns - Lahore, Rawalpindi, Multan, Bahawalpur, Faisalabad, Sargodha, Gujaranwala and Sialkot - would be used to build quality houses through private sector participation and financial institutions.

Describing Renexus' proposal as the beginning of a mutually beneficial cooperation between the two countries in the housing sector, Tahir is inviting other Malaysian companies to take full advantage of the Pakistan government's vision to provide decent housing to its low-and middle-income families.

"The supply and demand gap in the housing sector will be met by public and private partnerships and the government will serve as enabler, regulator and facilitator," he said in a statement recently.
For major investments, Tahir said it would be tapped from the private sector, both local and foreign and financial institutions.

Commercial Counsellor at the Pakistan High Commission, Waijullah Kundi, said the proposal titled "Green Township for the Future" envisages each satellite township complete with commercial, educational, institutional recreation, spiritual, healthcare, and infrastructure services.

Waijullah said the development would incorporate Renexus' latest state-of-the-art smart building system and other industrialised building methods to ensure good quality workmanship and speedier construction time.

The Punjab province, with a population of 82 million, is facing a shortage of five million houses.

It has an incremental demand for 700,000 units a year against the annual construction of 150,000 units, leaving a huge gap and as a result creating immense opportunities for construction firms.

By Business Times (by Rupinder Singh)

World housing market showing signs of recovery

KUALA LUMPUR: The world's housing markets are showing signs of recovery, with seven countries having emerged from the house price slump, according to Global Property Guide.

After experiencing declines in 2008, house prices in China, Portugal, Australia, New Zealand, France, Sweden and Hong Kong rebounded during the latest reported quarter, 2Q 2009.

In its survey of world-wide house price indices, issued on Aug 26, it said however, most countries suffered sharp house price falls during the year to end-Q2 2009, hence the general situation remains negative.

The Global Property Guide uses price-changes after inflation, giving a more realistic picture than the (more upbeat) nominal figures usually preferred by real estate agents.

In Shanghai, China, house prices rose 1.96% during the year to end-2Q09, with most of these gains entirely during 2Q when Shanghai's house prices rose 2.09%.

China's house prices started falling in 2Q08, but a strong increase in government spending revived the housing market and the economy. This saw the country recording a 7.1% growth in GDP in 1H09. Chinese property prices are widely expected to increase further.

Average house prices in the Algarve, Portugal, at €1,429 per square metre, were up by 2% in 2Q09. House prices in Portugal as a whole rose 1.01% in 2Q and were down only 0.43% on the year to end-2Q09, compared to minus 7.24% during the year to end-2Q08. New CONSTRUCTION [] orders in Portugal increased 12.3% in 2Q09.

Global Property Guide said in Australia and New Zealand saw house price increases of 3.73% and 3.31% respectively in 2Q09. All regional capital cities in Australia registered quarterly house price increases, ranging from 2% to 5%. However, over the year to Q2 2009, there was a price decline of 2.80% in Australia.

In New Zealand, the annual change was still negative at minus 3.07% in the year to end-2Q09. But in July 2009, New Zealand had the first yearly house price increase since 2008.

After falling for the last five quarters, house prices in France were up by 3.31% during Q2 2009, thanks to government subsidies. In Sweden, house prices were up by 3.16% during Q2 2009. Hong Kong's house prices increased by an average of 8.9% during Q2 2009.

As for the US housing market, it was stronger, as reflected in the Case-Shiller house price index, which rose 0.35% in 2Q09, from a decline 6.46% in 1Q09.

Year-to-date in 2Q, house prices were down 13.96%, an improvement from 18.51% decline on-year to 1Q09.

The FHFA's purchase-only index was however down by 1.74% during 2Q09, somewhat worse than the 0.04% drop in 1Q09, so the signals in the US are mixed.

Year-to-date in 2Q, seasonally-adjusted prices fell 5.03%.This was a lesser fall than in the year to end-Q1 (down 9.16%) and than in the year to end 4Q08 (down 9.69%) (all figures inflation-adjusted).

However, the Global Property Guide said some countries avoided the crunch.

Israel's housing market has continued to sail through the global recession. The average price of houses rose 8.40% on-year to end-2Q09. But the quarterly increase in 2Q09 was down to 1.02%, a drop from 5.52% in 1Q09.

Switzerland saw an increase of 4.90% over the year to end-2Q09. However, house prices barely increased during 2Q09.

A key indicator of improvement is the market's momentum, that is the number of countries that did better this year, than during the previous year.

Nine countries improved their on-year performance to end 2Q09, compared with a year ago. In contrast during the year to end-1Q09, only six countries did better than the previous year.

But many countries are still suffering. The house price index for Dubai, UAE, fell 49.9% during the year to end-2Q09. But quarterly data indicates Dubai's downward house price spiral is moderating.

House prices fell 8.92% in Q2 2009, much less than the 42% drop in 1Q09.

Double digit year-on-year declines were also experienced in Bulgaria, Singapore, Iceland, UK, Japan, Denmark and South Africa. Most recent quarter declines in these countries range from 2% to 10%.

By The EDGE Malaysia (by Joseph Chin)

IJM expects to keep orderbook above RM4b

Malaysia's second biggest construction firm aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia

IJM Corp Bhd, the country's second biggest construction company, expects to maintain an order book of more than RM4 billion as it bids for sizeable government contracts locally and abroad.

It aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia. Governments around the world are spending more money to pull their economies out of recession.

"We would replenish the order book so that we maintain about RM4 billion plus at any one time. Since our chewing rate is about RM200 million a month, we have to (replenish) about RM2 billion plus a year," said IJM Corp managing director and chief executive officer Datuk Krishnan Tan Boon Seng.

He was speaking to reporters after the group's annual and extraordinary general meetings in Subang Jaya yesterday.
Some projects IJM Corp is eyeing include the new permanent low-cost carrier terminal in Sepang and the light rail transit (LRT) extension works in Kuala Lumpur.

"We do a broad range of work from civil engineering works to building. You will see us participating where there are sizeable jobs," said Tan, adding that the company was bidding for works here and abroad.

Tan said tenders for both the LCCT and LRT projects have yet to be called.

"For the LCCT, the pre-qualification process has been called and we have also submitted. We will look to bid for the sizeable packages (once the tender is open)," he said.

Tan also said that there will be other tenders from the Pahang-Selangor Water Transfer project, including the dams, intakes, ancillary infrastructure and the treatment plant.

On IJM Corp's property division, Tan said there are strong property sales yet to be billed and expects the division to perform decently given the wide range of products - retail, industrial, medium- and high-cost developments - in high density locations.

Meanwhile, the group saw its first quarter net profit decline 22.5 per cent to RM70.8 million while revenue slipped 5 per cent to RM1.16 billion.

In a Bursa Malaysia announcement, it said the lower earnings for the three-month period to June 30 2009 was due to lower contributions from its plantation division as crude palm oil prices fell.

Also, the construction division suffered lower margins from old contracts affected by higher costs in the previous year and higher financing costs incurred in India.

The plantation division earnings dipped as the group expedited its fertiliser application and repair cost for infrastructure due to heavy rainfall and floods.

"We don't think that the first quarter is reflective of the following quarters," said Tan. He added that the current fiscal year ending March 31 2010 would be similar to 2007, where the first quarter was lower but later quarters showed improvements.

By Business Times (by Jeeva Arulampalam)

Sunway bidding for deals worth US$5.7b

Sunway Holdings is bidding for foreign and local contracts worth about US$5.7 billion (RM20 billion) as big spending plans by governments boost construction activity globally.

"Including what we are going to bid, it's about RM20 billion," managing director Yau Kok Seng said on Monday.

"Our past track record (for successful bids) is about 10 per cent, which means over the next six to 12 months, we should be able to win at least RM2 billion (worth of jobs)," Yau said in an interview.

Sunway has submitted bids for construction jobs worth about RM1 billion in India. The company, the seventh-largest builder in the country with market value of US$224 million (RM785 million), is also confident of obtaining repeat jobs within the US$25 billion (RM87.75 billion) Arzanah Development in Abu Dhabi.
"We have been shortlisted to tender for Phase 2 which will be launched in the near future," said Yau.

In May, Sunway said 75 per cent-owned Sunway Construction has been awarded a RM326 million contract for the Arzanah Development.

In Malaysia, the company is bidding for jobs under a multi-billion ringgit low-cost carrier terminal project, said Yau.

Construction stocks are the best performers on the local bourse so far this year, as investors bet that massive government pump-priming will boost builders' earnings.

Malaysia has one of Asia's largest stimulus plans, worth RM67 billion.

The government is expected to launch later this year major infrastructure projects including a light rail line extension and the RM2 billion low-cost carrier terminal project.

Shares in Sunway have more than doubled so far this year, outpacing its larger rivals such as Gamuda and WCT. The Kuala Lumpur Construction Index, made up of 42 stocks, has risen 36 per cent.

Sunway, which also has interests in property development and quarrying, is one of three bidders for German cement maker HeidelbergCement's Malaysian assets.

HeidelbergCement is looking to sell the Malaysian assets, which have also drawn interest from private equity firms, for at least US$250 million (RM877 million), two sources said in June.

"They have not officially informed us yet, but we should know soon," said Yau. The potential acquisition is not expected to stretch Sunway's balance sheet as it seeks to further reduce debts by selling off non-core assets, he said.

"The way we structure the acquisition, there is a minimum capital requirement," he said.

Sunway wants to cut its gearing ratio to 0.5 times over the next two years from about 0.8 times currently, said Yau.

"Although it's our vision to regain our pole position (in the quarry business), we are not keen to compete with someone who's prepared to pay (a) ridiculous price," said Yau when asked if he was confident of securing the assets.

By Reuters

IJM Land to launch properties worth RM1bil

PETALING JAYA: IJM Land Bhd, the listed subsidiary of construction firm IJM Corp Bhd, plans to launch over RM1bil worth of properties in the financial year ending March 31, 2010 (FY10).

So far, according to managing director Datuk Soam Heng Choon, major launches include The Light Linear in Penang with a gross development value (GDV) of RM200mil, Nusa Duta in Johor with a GDV of RM78mil and existing phases of Seremban 2 with a GDV of RM32mil.

He said the company would launch more than 20 projects in FY10. Last year the company launched RM600mil worth of properties.

Datuk Krishnan Tan ... ‘Over time, IJM Land will take over projects now under the IJM Corp umbrella.’

Meanwhile, IJM Land chairman Datuk Krishnan Tan said recent launches especially in Penang had been very well received by the market. “We’re looking forward to better times in line with market sentiments,” he told reporters after the company AGM yesterday.

However, Tan cautioned that these launches, which would involve the company’s existing and new projects throughout the country, would very much depend on economic conditions. “The realistic approach is to see how fast you can run in the time given and at the same time have a clear view of the horizon,” he said on how the company would weather another economic contraction.

Tan said the major obstacle was if consumer sentiment fell should the jobless rate in the country rise on a less rosy economic outlook. “Let’s hope there’s no double dip,” he said referring to the country’s economic performance.

Tan said conditions going forward were bright with ample liquidity and lower interest rates while expectations of increasing property costs brought on by higher building material and land prices would also spur the market.

On overseas projects, he said IJM Land would spearhead future projects of the group. Tan, who is also chief executive officer and managing director of IJM Corp, said over time IJM Land will take over projects now under the IJM Corp umbrella.

He said there were plans to revive Talam Corp Bhd’s Changchun, China mixed development project, in which IJM Land has a 50% interest, with a launch slated for next year. The project is located in China’s automotive city and has an estimated GDV of RM500mil.

IJM Corp has a 25% stake in Kumpulan Europlus Bhd, the holding company of Talam. Tan said IJM Land was still scouting suitable sites for a project in Vietnam with Ho Chi Minh City as the most viable location.

He said the company had an undeveloped landbank of 5,300 acres with a potential GDV of RM18bil over a 15-year period.

By The Star

IJM Land to unveil RM1b worth of properties

SUBANG JAYA: IJM Land Bhd plans to launch some RM1 billion worth of properties across Malaysia in its current financial year ending March 31, 2010 (FY10) capitalising on improving sentiments in the local real estate market.

The value of the developer’s FY10 launches is two thirds more than the estimated RM600 million unveiled a year earlier.

The RM1 billion worth of launches would comprise about 20 projects, of which more than RM300 million had been introduced to buyers so far, IJM Land managing director Datuk Soam Heng Chun.

These include about RM200 million worth of properties at its “LIGHT Waterfront Penang” mixed development, RM78 million at its niche medium-high to high-end residential project “Nusa Duta” in Johor, and RM32 million worth of shops in Seremban.

“We need to deliver these units to the buyers in two to three years,” Soam told reporters after the company’s shareholders’ meeting here yesterday.

Its parent company IJM Corp Bhd’s chief executive officer and managing director Datuk Krishnan Tan Boon Seng said: “We are looking forward to better times with the improving sentiments in the property market.”

IJM Corp now owns 62% of IJM Land, down from some 75% in September 2008, following share placement exercises in the latter.

The share placements in IJM Land were intended to boost the liquidity of the stock, and increase the number of institutional shareholders in the firm which was conceived following the union between RB Land Holdings Bhd and IJM Properties Sdn Bhd.

Abroad, the firm is undertaking its maiden overseas project — a RM500 million upmarket residential and retail initiative in Changchun, the capital city of Jilin province in northeast China. Shares of IJM Land added five sen or 2.6% to RM2 yesterday.

By The EDGE Malaysia (by Chong Jin Hun)

Mayland property projects reflect its Midas touch

All projects developed by Malaysia Land Properties have appreciated in value and in some cases risen by threefold

Property developer Malaysia Land Properties Sdn Bhd (Mayland) seems to have the "Midas touch" as all projects developed by it have appreciated in value and in some cases, by threefold.

Mayland, whose projects include the integrated Plaza Damas development in Sri Hartamas, Kuala Lumpur, is confident that this trend will continue for the remaining projects planned at the site.

The entire Plaza Damas project, which started in 1998, is located on a 5.95ha site with Phase 1 and Phase 2 taking up 3.54ha.

Mayland is now developing its RM800 million Plaza Damas 3 that will include serviced apartments and possibly a hotel.
"Our track record has spoken for itself. We do not know of anyone who has bought from Mayland and did not make money. We want our customers to make money," its director Winnie Chiu told Business Times in an interview.

She quoted the examples of its Parklane block of shop offices where 91 units were sold from RM880,000 each in 1998 and today their value has appreciated to RM2.5 million.

Its Waldorf and Windsor apartments in Phase 1, which were sold in December 2007 have appreciated in value to RM240,000 from RM141,000 for the 480 sq ft unit, in less than two years.

Chiu expects the same kind of results for its new launches.

In fact, Mayland's projects are so popular, they are snapped up even before they are advertised. And 50 per cent of its purchasers are repeat customers.

"We sold our 72 units of shop offices in Phase 3 within half a day. It was even before we sent out our advertisement for print," she said, adding that each unit costs RM2.3 million.

According to Chiu, Mayland saw a dip in sales in November 2008, which continued until March this year. However, she is no longer worried as she believes that confidence in the market has returned.

"We are seeing a huge pick-up in sales," she said.

Mayland still has available some 5 per cent of 185 units of serviced apartments in Carlton@Sri Hartamas and 30 per cent of its 230-unit Chelsea@Sri Hartamas for sale.

The pricing for a fully furnished unit starts from about RM820 psf for units measuring 500 sq ft to 955 sq ft.

As part of its plan to make Plaza Damas an integrated development, it is also looking at the possibility of having a hotel in Plaza Damas 3.

Plaza Damas 3 will then be linked by an overhead bridge to Hartamas Shopping Centre and Plaza Damas 1 and 2 within two years.

By Business Times (by Vasantha Ganesan)

Aussie firm seeks Malaysian partner for waterfront jobs

AUSTRALIA's Niecon Development Pty Ltd plans to partner Malaysian developers, including government-linked companies to develop waterfront projects here.

Niecon, set up in 1969 in Australia, is a private company with projects mainly in Queensland.

Its head of international sales and marketing Jo Pavlovich said Niecon is in talks with a few developers but declined to name them .

Pavlovich told Business Times in an interview in Kuala Lumpur recently that Niecon is keen to develop waterfront projects in Sabah, Sarawak and Port Klang to replicate what it has done in Australia.
"We want to develop properties in Malaysia so Australians could buy here. There are great opportunities for Australians to own properties under the Malaysia My Second Home initiative," Pavlovich said.

"Malaysia is one of the strongest country in Asia. There is a good working relationship between Malaysia and Australia and we find it easy to do business here," she added.

Pavlovich said Niecon may form a project-related vehicle with interested developers or landowners to undertake developments jointly, or come in as an equity partner.

She said Niecon is open to options and its role in the developments would be in design, project management and marketing.

Pavlovich said Niecon is also interested to develop luxury residences and office towers in Kuala Lumpur.

The company is currently developing two prestigious projects in Queensland, namely The Oracle in Gold Coast and Nirvana, each worth A$850 million (RM2.51 billion) and A$70 million (RM206.5 million).

Pavlovich said the projects are not designed for first time house buyers but purchasers who buy homes as lock-ups or as a holiday destination.

By Business Times (by Sharen Kaur)

TA buying stake in Singapore hotel for RM635mil

PETALING JAYA: TA Enterprise Bhd has proposed to acquire a 30.65% stake in Singapore-based Quayside Gem Ltd, a company incorporated in Mauritius, for S$260.04mil (RM635.8mil) cash from LaSalle Asia Opportunity II SARL.

Quayside Gem owns Swissotel Merchant Court Singapore, a four-star hotel.

In a filing with Bursa Malaysia, TA Enterprise said the proposed acquisition would be funded from internally generated funds and external borrowings.

“The acquisition is expected to bring synergistic benefits to the group as it will further enhance TA Enterprise’s hospitality operations in major cities around the world and increase its existing portfolio of hospitality properties,” it said.

TA Enterprise recently concluded the acquisition of the 262-room The Westin Melbourne at a cost of A$160mil.

Its earlier venture into Australia was via the purchase of the 362-room Radisson Plaza Hotel in Sydney in the late 1990s for A$115.5mil It acquired its first hotel property in Canada, the 190-room Aava Whistler Hotel, for C$33 million (RM10mil) last December.

Back in Malaysia, TA Enterprise is also building a six-star hotel and a five-star hotel, located directly opposite the Petronas Twin Towers and at the Jalan Bukit Bintang/Jalan Imbi junction in Kuala Lumpur, respectively.

By The Star

VXL Group planning RM25b resort in China

PETALING JAYA: The VXL Group is planning a resort project with a gross development value (GDV) of RM25 billion in China on 100 sq km located about 250km from Beijing.

The project, to be named “Beijing’s Secret Garden” will comprise a mix of tourist-cum- holiday home development is in planning stages now and will begin major construction works next year.

Expected launch for Southeast Asian buyers would be in 2011, founder and president of VXL Group, Datuk Lim Chee Wah said.

The VXL Group, which was originally founded to realise the Malaysian government’s initiatives for technology transfer in the development of information and communication services in the country, is the parent group of a Hong Kong-listed developer VXL Capital Ltd.

Bursa-listed ICT solutions and services provider Dataprep Holdings Bhd is 39.1%-owned by VXL Holdings Sdn Bhd.

Speaking to reporters after Dataprep’s AGM and EGM yesterday, Lim said the project was still in the early stages, with the developer still gauging consumer needs on amenities as well as composition of units at the project.

To be built over the next 10 to 12 years, depending on demand and economic conditions, the resort would incorporate ski, golf and nature resort elements and possibly traditional Chinese medicine facilities.

Lim said the site is near an existing ski resort and that the group would “hook up” with it.

Infrastructure work has already begun on the project but major construction work would only begin next year as winter would soon be approaching this year.

Project costs for the first phase from 2009 to 2012, consisting of golf course, ski resort, single-family and multiple-family residential units is one billion yuan (RM513.86 million).

The VXL Group will call for open tender for contractors in China within this year.

VXL Group vice-president for investment Chang Yee Er said that the developer was looking more for China-based contractors who were familiar with the country.

She said the Chinese government required projects above a certain value to call for open tender.

By The EDGE Malaysia (by Loong Tse Min)

Glomac to sell off block B at Kelana Business Centre

Property developer Glomac Bhd wants to sell off block B of its building at the Kelana Business Centre in Selangor for RM30 million.

This year alone, Glomac has sold two buildings for RM72.6 million, namely the 13-storey Wisma Glomac 3 in Kelana Centre Point and a building at Wisma Glomac.

Glomac is also in the later stages of finalising by the end of the month, a sale of a 25-storey building at its Glomac Damansara project to a government agency for RM200 million.

"We are selling the buildings so we can use the money and develop bigger projects. The proceeds from the sale of the properties will form part of our war chest," executive vice-chairman Datuk Richard Fong Loong Tuck told Business Times.
Glomac slashed its gearing from 0.5 to 0.12 times since a year ago via the sale of assets, he said.

Glomac Tower, located near the Petronas Twin Towers was sold to a Bumiputera firm for RM577 million in December 2007 and proceeds from the sale are being recognised now as construction progresses, Fong said.

Elsewhere, Glomac Galleria in Sri Hartamas featuring 20 units of four-and-a-half-storey shop offices was sold en bloc last year for RM100 million.

On the fresh asset sale, Fong said that despite block B of the building being put up for sale in the market recently, the company has received numerous offers.

Fong said Glomac will do better this year, with net profit and revenue increasing by 10-20 per cent.

For the fiscal year ended April 2009, it posted a net profit of RM32.3 million on a revenue of RM351 million.

"We have had better sales this year, thanks to financial packages that we had launched earlier in the year. We are also getting income from Glomac Tower and Glomac Galleria, and from our Seri Bangi project," Fong said.

Seri Bangi comprises double-storey terraced houses and shoplots worth RM121 million, and half of the residential properties were launched in April and August this year.

"We launched 94 units and 76 units of double-storey terraced houses in April and August respectively and almost 70 per cent were sold within two weeks after the launch. We were caught by surprise.

"We are going to launch the final 88 units early next year, each priced from RM360,000. We are expecting a similar take up," Fong said.

By Business Times (by Sharen Kaur)

Dijaya Tropicana development almost at tail end

DIJAYA Corp Bhd's development at the 250ha Tropicana Golf & Country Resort in Petaling Jaya, Selangor, is almost reaching the tail end, with the scheduled December launch of the RM745 million Tropicana Grande and Tropicana Avenue project.

The two are are among the final three or four developments left in Tropicana.

According to managing director Datuk Tong Kien Onn, there is only 3 per cent or 7.5ha of land to develop in Tropicana. Tropicana Grande and Tropicana Avenue will use 2.08ha and 2.3ha each.

The remaining land will be used to construct purpose-built office towers for investors, Tong told Business Times in an interview in Petaling Jaya.
Tong said Tropicana Grande is the last residential development in Tropicana and he is expecting brisk sales at the launch as it has ready buyers.

Tropicana Grande will featuring four crystalline blocks. It will offer 300 units, priced from RM600 per sq ft, Tong said.

"We are optimistic of sales. The market is improving and there is demand for properties overlooking a golf course. Our pricing is less than half of what is being offered at the KLCC area," Tong said.

Dijaya is targeting existing Tropicana home buyers, and investors from Singapore, Dubai, Hong Kong, South Korea and Japan.

To accelerate sales from foreigner property buyers, Dijaya will launch Tropicana Grande in Singapore in December, Tong said.

Tropicana Avenue, a lifestyle commercial development, will comprise three blocks of nine and 11 storey offices, worth RM205 million.

There will be 359 shop offices and 38 loft offices parked in seven to nine floors, that will seat on top of 50 retail lots in two floors.

"At the moment, we are looking to lease the retail units to control the mix so we can create a lifestyle for our buyers. We will be selling the office suites at RM350 per sq ft," Tong said.

Tong said he expects Dijaya to surpass its 2009 revenue target of RM260 million this year, attributed by sales from the new properties.

Over the past seven months, Dijaya has achieved RM215 million in sales, or 70 per cent of its target.

For the financial year ended December 31 2008, Dijaya posted RM244 million in sales.

By Business Times (by Sharen Kaur)

MRB plans to cash in some land bank assets

KUALA LUMPUR: The Malaysian Rubber Board (MRB) plans to monetise some of its existing land bank assets, especially those in the Klang Valley, to support the increasingly high operating costs in terms of research and development, patents and information on manufactured rubber goods.

Datuk Dr Kamarul Baharain Basir says MRB’s major research achievement is in tissue culture and genetic transformation.

Its director-general Datuk Dr Kamarul Baharain Basir said MRB currently had an estimated RM1bil of land bank assets nationwide.

“The Government has strongly urged MRB to follow in the footsteps of major corporations and government-linked companies, which have either sold or leased their holdings like buildings or land bank, to monetise their non-core assets,” he told StarBiz.

Kamarul said MRB was now working closely with its property cooperative to look at how best to monetise its land bank assets in prime locations like Sungei Buloh and Jalan Ampang.

“We are keen to develop part of our 1,700ha Rubber Research Institute in Sungei Buloh into commercial centres.

“However, our development (in Sungei Buloh) must not duplicate the nearby Selangor Vision City development,” he said.

Having said that, MRB also does not want to see too much depletion in its assets as it strives to generate regular income to support its operations.

Under the Ninth Malaysia Plan, the Government has allocated RM113mil for MRB, which is the statutory authority for the management of the country’s rubber industry.

“We plan to seek a higher allocation of about RM300mil under the 10th Malaysia Plan but we don’t know how much we will get this time,” he said.

According to Kamarul, MRB is the world’s most “referred” rubber organisation among international rubber set-ups seeking information on the upstream, midstream and downstream activities in the industry.

“Our core activities are in research and innovation in both upstream and downstream, crop management, improvement and protection as well as in biotechnology,” he said, adding that MRB’s major research achievement was in tissue culture and genetic transformation.

“We were able to create a transgenic rubber tree that can enhance crop productivity, production of valuable protein in the latex and has bigger girth tree trunk for timber production as well as high resistance to diseases,” he said.

MRB recently launched its latest high-yield rubber clone, the RRIM 3001, which can boost latex production to over 2,000kg per hectare a year compared with the average yield of 1,430kg in 2008. When mature, the RRIM 3001 tree could also be a good “rubber timber” source for the local furniture industry.

“Currently, rubber timber represents 80% of the raw material used in the local furniture industry,” he said.

On another note, Kamarul said the price of natural rubber was tracking well with crude oil and that demand from China was encouraging. China takes up about 35% of Malaysia’s total natural rubber production.

He said tyre grade SMR 20, currently trading above RM6 per kg, boded well for rubber planters, as the cost of production was about RM3 per kg.

By The Star (by Hanim Adnan)

Nomad strengthens regional foothold

The office space provider is now negotiating to buy an 80-room serviced apartment in Bangkok and is also eyeing Singapore for a suitable property there

The Nomad Group Bhd, an office space provider, has allocated some RM100 million to expand its serviced apartment portfolio and is eyeing properties in Thailand and Singapore.

The group is now negotiating to buy an 80-room serviced apartment in Bangkok, Thailand, for up to RM60 million. Chief executive officer Hew Thin Chay said the deal could be completed as early as next year.

The average occupancy at this property is now only 40 per cent while its average room rate (ARR) is around RM200, providing ample room for improvement.

In an interview with Business Times, Hew said The Nomad was also eyeing Singapore but has yet to find a suitable property there.

In Malaysia, The Nomad was not keen to buy more hotels or serviced apartments but it was open to managing them instead.

It has been approached to convert a 200-unit condominium on Jalan Tun Razak into a serviced residence and manage it.

In other countries, it is looking at the possibility of operating serviced apartments in Chennai, India, and may consider Indonesia in the future.

Meanwhile, Hew said he expects the group to return to the black this year, as it sees the money coming in from the various investments it made last year.

For the financial year ended December 31 2008, The Nomad incurred a net loss of RM7.63 million on the back of RM25.85 million in revenue as a result of start-up costs.

"We have had eight openings, six of which are offices. It takes start-up businesses about 12 months to mature," Hew said.

Its investment last year include The Nomad Offices at Etiqa Twins, The Gardens Mid Valley and Pavilion Kuala Lumpur.

Together with its space in Menara Hap Seng (which opened in December 2007), it has 80,000 sq ft space, making it the largest serviced office provider in the capital.

The Nomad has ventured into the Gemadept Tower in Ho Chi Minh City, Vietnam, and Interchange 21 in Bangkok, Thailand. It also bought the iOffice and Menteng Office Park in Jakarta, Indonesia.

"In the first half of 2009, we will incur a loss but post positive earnings before interest, taxes, depreciation and amortisation. But I think, by end of the year, we should make profits," he said.

In the first quarter to March 31 2009, it posted revenue of RM7.44 million and net loss of RM235,000.

Its cash cow is the Raffles Place in Singapore, which provides it with RM1.6 million a year in operating profit. The group makes 60 per cent of its revenue from foreign markets.

It is eyeing Hong Kong, South Korea and Taiwan for the serviced office business.

By Business Times (by Vasantha Ganesan)