Asian properties to lead global recovery

KUALA LUMPUR: Vincent Lo, the billionaire chairman and chief executive officer of Hong Kong-based Shui On Group which developed Shanghai’s popular tourist landmark, Xindianti, believes Asia’s property market will take the lead in recovering from the shocks inflicted by the global financial crisis.

“Things are looking up again for the region and we are as busy as ever in China,” Lo told StarBiz.

After his last visit to the city more than 10 years ago, Lo was back last week to attend the three-day Forbes Global CEO Conference 2009.

“I am very impressed with how much Kuala Lumpur has developed and by what Prime Minister Datuk Seri Najib Razak is doing to further raise the country’s competitiveness. I certainly look forward to coming back again and this time to look at the possibility of venturing here if opportunities arise,” Lo said.

He said if Shui On decided to venture to Malaysia, the first thing he needed to do was to look for the right local partner. “The property business is a highly-localised business and a good local partner who knows the local conditions will be one of the factors for success.”

The affable Hong Kong-born Lo has built up Shui On into one of the largest real estate developers in mainland China. Today he keeps busy with his group’s many developments in prime locations of major Chinese cities, including Shanghai, Beijing, Chongging, Wuhan, Foshan and Dalian.

He sees immense growth potential in China and has made the world’s most populated country the main business focus for his group.

Lo started investing in China 25 years ago and, in recent years, he sold all his group’s investment assets in the United States and channelled them to China.

“We go where the opportunities are. There’s no place like China in terms of its strength as an economic powerhouse and growth opportunities.

“Today, more than 90% of our assets with total investments of at least 100 billion yuan are in China,” Lo added.

Shui On has a land bank of 13.2 million sq m in China. Of this, 50% will comprise residential property and the balance commercial, office and hotel property.

Lo said China would continue to chart amazing growth for many years to come.

“I am very happy to be in China right now. The Chinese leaders have proven their mettle in managing the country’s economy very well throughout the global financial crisis.

“The progress being made in the country’s real estate sector is just in the beginning stages and there are immense opportunities for more phenomenal growth.

“Each year, 16 million to 22 million Chinese are been urbanised and this translates into major needs for housing, commercial space, factories and other public facilities,” the tycoon said.

He said amid the rapid globalisation, China’s economy was being transformed very rapidly with much wealth creation and structural changes along the way.

Lo, who founded Shui On Group in 1971 after borrowing HK$100,000 from his father, the late Hong Kong property tycoon Lo Ying-shek, is today a highly-regarded figure and one of the leading entrepreneurs in China.

Shui On Group is the parent of both Shui On Land Ltd and Shui On Construction and Materials Ltd (Socam). Both are listed on the Hong Kong Stock Exchange.

Shui On Land, listed in 2006 and headquartered in Shanghai, is the group’s flagship property company undertaking large-scale re-development projects in China.

Shui On Land specialises in masterplan communities with minimum built-up space of 10 million sq ft while Socam undertakes smaller-scale developments.

Lo, who is still the controlling shareholder in Shui On Land with just under 50% of the company’s shares and 37% in Socam, believes that the Chinese government will soon open up the Shanghai Stock Exchange for listing by companies established outside China.

By The Star (by Angie Ng)

Property development to be Tradewinds top revenue earner

TRADEWINDS Corp Bhd expects property development to start contributing significantly to its revenue sometime between 2011 and 2012, its top official said.

The group undertook a restructuring exercise in 2008 to focus on hotel and property development.

The contributions are expected to come in once projects which are now on the drawing board are launched from 2010 onwards.

In 2008, Tradewinds' property division, including rental income from Komplex Antarabangsa and Menara Tun Razak, made RM24.51 million representing 5.2 per cent of total revenue.
"We expect to launch projects in 2010 that will see revenue coming in in 2011 or 2012," TCB's chief executive officer Shaharul Farez Hassan said.

"And we expect property development to overtake hotel contributions (in terms of revenue) in four to five years' time," he added.

Hotel operations now contribute 70 per cent of total group revenue.

In a recent interview with Business Times, Shaharul said given that it was only beginning to establish itself as a property developer it will take sometime for the segment to mature and make a mark.

TCB now has 365ha of land in Nusajaya in Johor for development. TCB plans to form tie-ups with established property developers to launch its housing projects.

It has already entered into a 49-51 per cent joint venture agreement with United Malayan Land Bhd (UM Land) holding the majority share, to develop land in Nusajaya.

At the same time, it is also looking for land within the Klang Valley and Penang to buy or enter into joint-venture pacts for property development projects.

Previously, TCB's venture into property development has been by roping in a developer to develop land that it owns.

These projects include Bandar Baru Pulai in Johor and Bandar Jaya Putra in Mount Austin, Johor.

In the half year ended June 30 2008, property division contributed RM13.6 million in revenue.

TCB in 2008 split its plantation and sugar refining business from the group to focus on its hotel and property operations.

By Business Times

Tradewinds sets sights on hotel acquisitions abroad

Hotelier and property developer Tradewinds Corp Bhd (TCB) is setting its eyes on hotel acquisitions abroad, as this provides better and speedier returns on investments.

It has been looking at several proposals which it has received from around the region.

"We have been approached by various parties, but we are not actively pursuing any of these at the moment, neither are we saying no to these proposals," chief executive officer Shaharul Farez Hassan told Business Times.

He added that he sees Southeast Asia as a suitable location for its foreign venture.
"Hotels in other countries fare better in terms of room rates," he said.

With the exception of Langkawi, Malaysian hotels in general rake in lower average room rates compared to their counterparts elsewhere.

TCB's previous foreign hotel initiatives were in Vietnam and Sarajevo, Bosnia Herzegovina. It sold its partially completed hotel in Hanoi, The InterContinental Westlake hotel, two years ago for US$75 million (RM261 million). This gave TCB a one time net gain of RM148.5 million.

Tradewinds had also previously won a bid for a hotel in Sarajevo, but pulled out after due diligence was conducted.

Meanwhile, Shaharul expects its hotel division revenue to dip by between 10 per cent and 13 per cent in the year ending December 31 2009, as the global economic crisis and the H1N1 flu sees people travelling far less.

Last year, the division chalked up RM332.74 million, which accounted for 70 per cent of its total revenue of RM475.46 million.

In the first half ended June 30 2009, TCB made a net profit of RM13.12 million on the back of RM223.63 million. Sixty four per cent of the revenue was from its hotel division.

This year, its worst hit hotel has been Hotel Istana Kuala Lumpur. Business is down by about 10 per cent compared to last year. Nevertheless, all hotels are profitable.

The best performing hotel in terms of room rates is the five star Meritus Pelangi Beach Resort & Spa, Langkawi which it owns but is operated by Singapore Meritus International Hotels Pte Ltd.

Other hotels owned and operated by the group include Mutiara Taman Negara, Pahang and Mutiara Johor Baru.

Hotels owned by TCB but operated by an international chain include Crowne Plaza Mutiara Kuala Lumpur, Hilton Batang Ai Longhouse Resort, Sarawak, Hilton Kuching and Hilton Petaling Jaya.

TCB also manages the Mutiara Burau Bay Beach Resort, Langkawi for the Langkawi Development Authority.

By Business Times (by Vasantha Ganesan)

BLand may start work on S. Korean project next year

BERJAYA Land Bhd (BLand) is expected to start construction of its maiden US$3 billion (RM10.4 billion) mixed development township project in South Korea in the second half of next year.

"We are at the design stage now. We target to complete that and start construction next year," Berjaya Hotels & Resorts chief executive officer Joseph Won said in an interview with Business Times in Kuala Lumpur recently.

Won said he is bullish about the project, given that Jeju province is popular among people from Japan, South Korea and China.

BLand entered into a joint venture with Jeju Free International City Development Center (JDC) in 2008 to become master developer for the project in Jeju.

The resort-type township will be built within eight and 10 years on 74.4ha of land and feature 600 mid-rise apartments, 200 villas, a five-star hotel with 250 rooms and a casino hotel with 500 rooms, a casino, a shopping complex and a medical centre.

BLand, which acquired the 74.4ha land from JDC to undertake the project, has a 81 per cent interest in the development. JDC holds the balance.

Berjaya Hotels & Resorts, the leisure unit of BLand, is looking for properties to operate in Asia Pacific to build up its existing portfolio.

Future growth plans in the Asia-Pacific region will include Japan and Maldives, including South Korea.

"We are eyeing to set up city hotels in Tokyo and Yokohama in the longer term. Japan would definitely be on our radar," Won said.

BLand has a joint venture, also, in Maldives to build 90 to 100 chalets under the Ritz brand for US$125 million (RM433.7 million).

Its partners in the venture are Ritz Carlton and Far East Consortium International Ltd, holding 33 per cent and 10 per cent interest, respectively.

Berjaya Hotels & Resorts may operate the properties for BLand and its partners.

By Business Times (by Sharen Kaur)

LCL to bid for more jobs in Abu Dhabi

DUBAI: LCL Corp Bhd will shift its focus to bid for more interior fit-out (IFO) contracts in cash-rich Abu Dhabi, after the completion of IFO jobs in major projects like Atlantis The Palm Hotel, Dubai Metro System, Dubai Mall and Dubai Marina Hotel in Dubai, said group managing director Datuk Low Chin Meng.

Given the current slowdown in the construction sector in Dubai, he said: “LCL does not want to miss out on the opportunities in Abu Dhabi’s bustling construction sector.”

“LCL will aggressively bid for IFO projects in Abu Dhabi particularly in government-funded projects such as hospitals, universities and clinics,” Low told a group of Malaysian journalists visiting LCL’s existing projects in Dubai and potential projects in Abu Dhabi as well as some top Malaysian government officials based in the United Arab Emirates (UAE).

The group will also be looking at setting up strategic partnerships with Malaysian construction and property companies as well as Middle Eastern groups with investments in UAE and other countries in the Gulf region.

Unlike the tight liquidity situation in Dubai following the global economic downturn, Abu Dhabi is actively forging ahead with mega projects such as commercial and residential buildings, roads, airport and rail systems estimated to be worth a whopping US$208bil.

The top 10 construction projects in Abu Dhabi include the US$40bil Khalifa City, which is similar to Malaysia’s Putrajaya, the US$39bil Yas Island tourist development, Burooj Properties’ US$24bil real estate community project and Saadiyat Island’s offshore development worth US$28bil.

There is also the US$22bil Masdar City, the world’s first zero-carbon, zero-waste city, the US$18.5bil mixed hospitality development Al-Raha Beach Complex, the US$7.5bil Al Reem Island mixed development and US$3bil Abu Dhabi Light Rail Project and a MGM Grand Hotel.

On the status of LCL’s IFO projects in Dubai, Low said: “We hope to complete most of our existing projects before year-end and are also in the process of recovering our claims and entitlements from property developers in Dubai estimated at not less than RM200mil.

“We have a strong case to make these claims and expect these claims to materialise in the next eight to 10 months. This will lead to a substantial reduction in our high borrowings currently.”

LCL has seen three consecutive quarters of losses.

For the second quarter ended June 30, it posted a net loss of RM18.1mil on revenue of RM105.6mil.

Low believes LCL will be looking at a better second half and hopefully a stronger fourth quarter to stay in the black this fiscal year.

Although LCL is consolidating its business in Dubai, he is confident that recovery in the emirate’s construction sector will likely take place next year.

According to the latest data by Dubai-based Real Estate Regulatory Agency, almost three-quarter of property development in Dubai have made construction progress despite the slowdown.

Of 552 projects, more than 72% showed some construction progress, while 17% were “stalled” and 11% “delayed.”

Jones Lang LaSalle, the world’s leading real estate investment and advisory firm, late last month said Dubai and Abu Dhabi were among the best positioned to attract long-term investment to their real estate markets over the next two to three years, noting that Dubai had made “considerable progress” towards recovery since last year.

The positive views on Dubai and Abu Dhabi are shared by Malaysian Ambassador to UAE Datuk Yahaya Abdul Jabar, Dubai-based Matrade senior trade commissioner Dzulkifli Mahmud and Export-Import Bank of Malaysia Bhd (Exim Bank) managing director Mohd Fauzi Rahmat.

Dzulkifli said UAE was Malaysia’s largest export market in the Middle East with exports worth RM12.4bil posted in 2009 from RM2.93bil in 2008.

Malaysia’s major exports to UAE include jewellery, electronic and electrical products and palm oil.

“Malaysian companies are well regarded in Dubai as having good reputation in terms of their on-track delivery and good quality products,” he said.

Fauzi said Exim Bank had been assisting Malaysian companies seeking facilities to undertake investments in the Middle East and African countries.

“To date, 10% of Exim Bank’s business is in the Middle East. So far, the bank has approved some RM365mil facility for this market,” he said.

Yahaya commended LCL’s performance in Dubai amid the tight credit situation there.

He said the company had set the benchmark for Malaysian companies operating in Dubai.

By The Star (by Hanim Adnan)

Affordable home policy mulled

PENANG: The Penang Government is looking into the implementation of a new housing policy that will mark the end of the construction of low-cost flats in the state.

Deputy Chief Minister I Mansor Othman said current trends were leaning toward affordable homes.

“We are not thinking anymore of low-cost flats, we are thinking about affordable homes now,” he told reporters when attending a housing forum organised by the Bukit Gelugor Residents’ Welfare Association in George Town yesterday.

Mansor said the affordable houses would still be in the price range of the lower income group — be it the urban and semi-urban or the rural areas.

“There is a demand for affordable homes and I think that those from the low-income group, who are the target (of this new policy), can afford homes from RM60,000 to RM100,000.

“We have to add more of these houses and the state needs to create more affordable houses in every district,” he said, adding the houses should be at least 850 sq ft.

Mansor said the state executive council was currently trying to resolve issues pertaining to squatter and strata title issues in the state and this should be concluded by the end of the month.

“We are thinking about a new (housing) policy and are currently discussing it at the state executive council meeting.

“There are 160,000 unresolved strata title cases in Penang and after we finish looking into that, we hope to come up with some kind of policy suggestion for housing.

“Come November, we can begin discussions and by January, I think we can kick off the policy,” he said.

Speaking to reporters at the same function, state PKR chairman Datuk Seri Zahrain Mohamed Hashim described some of the current low-cost flats as “unliveable” and urged the state to look into improving houses for the lower-income group.

“Houses that are between 550 sq ft and 600 sq ft are not livable and should not be encouraged,” he said, adding that houses should be a minimum of 900 sq ft for comfortable living.

On the state’s plan to raise the density in certain places in Penang, Zahrain said he supported the decision.

“I totally agree. Land is scarce in Penang and sticking to 20-year-old policies are not relevant anymore.

“But we don’t want the creation of slums. If the density is too high, there will be social problems,” he said.

By The Star

China seeks more bilateral trade

KUALA LUMPUR: Malaysia and other developing countries need to know the right approach to woo China to secure more business opportunities, says China chief representative of the Economist Group and Directory of Advisory for Economist Intelligence Unit Steven Xu Sitao.

“China is still looking for more bilateral trade with other developing countries such as Malaysia for various businesses in real estate and as a source of natural resources for the country (China) ...,” Xu said on Saturday at the International Real Estate Federation (Fiabci) Malaysia Global Summit 2009.

Xu who presented a paper on “From Boom to Bubble – Impact of Growth in China’s Real Estate Sector” said the stimulus package by China recently had shown some result that the property market had escaped the downturn and Chinese consumers continued to buy houses.

He said financial liberalisation was the key to China’s sustainable development and this need to be done in a fast pace.

“By strengthening the financial liberalisation, more small and medium enterprise companies will have the opportunities to get more capital from the banks as compared with the current situation where lending is tight because banks are under government’s control,” Xu said.

He added less political influences by the Government to banks would attract more foreign investors to do business in the country.

During a panel discussion, Fiabci Asia Pacific Regional Secretariat chairman/ Fiabci World President 2005 - 2006 Datuk Alan Tong Kok Mau said total cooperation between public and private sector was crucial to gain sustainable business during the current uncertainty.

“We are fortunate that the current economic slowdown is not as bad as in 1997 financial crisis where lot of developers were out of business,” Tong said.

By The Star (by Edy Sarif)

CapitaLand to list retail unit in Singapore

CapitaLand Ltd, Southeast Asia’s largest developer, plans to list its CapitaLand Retail Ltd subsidiary in Singapore to tap growth in Asia’s shopping mall industry.

CapitaLand Retail will be renamed CapitaMalls Asia Ltd. and will have stakes in and manage malls valued at S$20.3 billion (US$14.4 billion) as of June 30, the company said in a statement to the Singapore stock exchange today. The unit will take control of CapitaLand’s retail real estate fund and property trust management business.

“The proposed listing of CapitaMalls Asia is consistent with CapitaLand Group’s approach of optimizing business growth with prudent capital management,” chairman Richard Hu said in the statement. “This transaction is also a logical evolution of CapitaLand’s business model and will allow us to accelerate our next phase of growth.”

Chief executive officer Liew Mun Leong has said CapitaLand wants to expand its real-estate services business along with the main property development operations. The listing of the unit follows offerings in other units including CapitaMall Trust and CapitaCommercial Trust in Singapore since 2002.

CapitaMalls Asia’s portfolio includes 59 completed malls in China, Malaysia, Japan, India and Singapore, including the Ion Orchard development on the city-state’s Orchard Road shopping strip. Another 27 properties are currently being developed.

CapitaMalls Asia will also take a 15 per cent stake in Raffles City China Fund, which has stakes in four Raffles City- branded developments in the nation, according to the statement.

By Bloomberg

Bina Puri working hard to fatten up its order book

BINA Puri Holdings Bhd, one of Malaysia's largest construction groups with RM4.2 billion jobs in hand, will continue to aggressively tender for new projects to sustain growth in earnings and bring the group to a higher level.

It has ongoing projects in Malaysia, Pakistan, Thailand, Brunei and Abu Dhabi, but is aiming for more work in the existing markets to keep its business in the local and overseas sectors moving, group managing director Tan Sri Tee Hock Seng said.

Tee said in an interview with Business Times recently that it will submit bids for construction projects worth more than RM2 billion a year.

Bina Puri, involved in construction, property, highway concession, quarry and manufacturing, is targeting public and private sector projects.
Locally, it is looking to bid for jobs from the new permanent low-cost carrier terminal (LCCT) in Sepang, the light rail transit (LRT) extension works, road and highway projects, housing and building construction.

"There are a lot more projects to award under the Ninth Malaysia Plan. Many have not been executed as a lot of time is spent negotiating and finalising details of the contracts with the relevant ministries, before the letters of award are issued," Tee said.

Tee said as the company will be finishing some of its projects in Pakistan, Abu Dhabi and Thailand over the next three to eight months, it is working hard to replenish its order book.

Tee added that Bina Puri should be able to secure more than 30 per cent of the bids as its proposals are usually more competitive and it has strong networking.

He said the group has letters of intent for four projects now, worth RM410 million, and it is working to convert them into letters of award soon.

This year alone it has won projects in Malaysia, Brunei and Pakistan to the tune of RM1.15 billion. Its biggest win was a RM693 million job to build 2,000 houses in Brunei.

In 2006 and 2007, Bina Puri secured projects worth RM1.6 billion and RM1.42 billion respectively.

By Business Times (by Sharen Kaur)

Bina Puri sees 20pc growth in net profit, revenue

BINA Puri Holdings Bhd expects net profit and revenue to grow by as much as 20 per cent in the current year, helped by some RM1.15 billion of new jobs it has won this year, and also from contributions of existing works.

It has RM2.4 billion worth of projects in hand, which have yet to be booked into its accounts, group managing director Tan Sri Tee Hock Seng said.

For fiscal 2008, Bina Puri posted a net profit of RM4.3 million on revenue of RM676 million.

Bina Puri has been profitable since its establishment in 1975 and its revenue has been growing steadily by 10 to 15 per cent, especially after listing in 1995.
Its net profit has always been single-digit, but Bina Puri is now aiming for double- digit earnings.

"This year would definitely be better for Bina Puri. The price of raw materials have stabilised and the projects in hand are starting to contribute significantly to our earnings. A lot of our projects are fast track," Tee told Business Times.

He said the most significant contribution in the future will be from its Kuala Lumpur-Kuala Selangor Expressway (KSE) project, which it expects to complete by mid-2011.

The company holds the design-and-build contract, worth almost RM1 billion, for the KSE Package 1 and 2 and it will start to contribute to earnings from 2015.

Bina Puri was founded by Dr Tony Tan Cheng Kiat, who is related to Tee, and his partner. Tee was roped into Bina Puri in 1983.

Both Tan and Tee hold 37 per cent of Bina Puri while Bumimaju Mawar Sdn Bhd, controlled by Tan Sri Tong Yoke Kim and son Datuk Andrew Tong So Han, holds 19.27 per cent stake.

Bina Puri started with a small building contract for the police station and staff quarters in Kepong for the Public Works Department.

It evolved from a class "BX" licence contractor to class "A" industry leader in September 1985.

The company expanded its business activities in 1995 to include property development, highway concessionaire, quarry operations, manufacturing of construction materials and polyurethane system house.

Its first overseas venture was in 1999 and it has since completed many highway and housing projects in India, China, Nepal and Thailand.

By Business Times

Promotions galore

The Valley TTDI in Ampang: A residential development by Naza TTDI.

Even with the economy showing signs of mending, property developers are continuing to woo buyers with special housing packages/promotions to boost sales.

Some of these come in special loan packages, others through lucky draws and freebies like housing appliances such as air-conditioners and wardrobes. And evidently, they are working.

MK Land Holdings Bhd is one of them. Properties under the group such as Metropolitan service apartments block D, Metropolitan block D (retail and office), Metropolitan block C (residential units), Armanee Terrace block B (duplex condominium), Rafflesia phase 1 (3-storey semi-D bungalows) and Rafflesia phase 2 (3-storey semi-D bungalows) are offering freebies to buyers until end of this month.

Chief operating officer Fatimah Wahab says response has been encouraging since the offers for the properties kicked off on Sept 1.

“We are giving 7% discount to bumiputra buyers, early bird discount up to 5%, free kitchen cabinets with hob and hood, free air-conditioner units in the living hall and all rooms, free wardrobe for the master bedroom and free legal fees to buyers of our Metropolitan block C residential units,” he says.

Since the launch of Metropolitan block C last month, she says, about 30% of the units have been sold. As for the Metropolitan service apartments block D, there is a discount of up to 10%, free legal fees, waiver for legal fee for sales and purchase agreement (SPA) and a booking fee of only RM1,000. In addition, under its “buyer get buyer scheme”, if an existing purchaser recommends someone else to buy a property from the company, the introducer will get an incentive of up to a maximum of RM10,000, depending on the purchase.

Naza TTDI Sdn Bhd meanwhile is offering special housing packages and freebies for its luxury development, The Valley TTDI in Ampang.

Senior general manager for marketing and sales Myrzela Sabtu says among the incentives offered to buyers are free stamp duty and legal fees, zero interest during construction, financing up to 95% and free solar heater.

“The promotion, which runs from Sept 1 till Nov 1, has so far received encouraging response from buyers. We’ve manage to achieve slightly more than 50% sales to-date aided by this promotion,” she says.

Another property developer, LBS Bina Group Bhd, is offering a lucky draw contest dubbed “I Love MyHome” to buyers apart from its LBS Hassle Free Home Ownership Programme. The contest is open to all buyers of LBS’ properties from February 2009 to February 2010.

“The total prizes for this lucky draw is RM200,000. The grand prize is a Perodua Viva car while the first prize is a Kriss 120 Sports motorcycle. There are other attractive prizes to be won too,” says a LBS spokesperson, adding that the company also offers other incentives such as free furniture and fittings and 12 months security fee waiver for buyers of its Town Villa at Taman Tasik Puchong.

“The incentives under our LBS Hassle Free Home Ownership Programme includes free SPA legal fees and free SPA disbursement fees. Buyers need only to pay RM1,000 for down payment,” he adds. LBS is the developer of Bandar Saujana Putra in Kuala Langat and Bandar Putera Indah in Batu Pahat. It also has projects in Cameron Highlands.

TH Properties Sdn Bhd, which is developing Bandar Enstek near Sepang, is offering special packages for buyers of its De’siran (2-storey terrace) and Matahari C & D (2-storey bungalow) homes.

In an email reply to StarBizWeek, chief executive officer Zaharuddin Saidon says the company is offering free SPA legal fees for both developments.

“Apart from that, the company is offering free 12 months Streamyx subscription and free home alarm security system for those who buy our De’siran and Matahari C & D units,” he says, adding that the promotions are ongoing until all units are sold.

Is this enough to get buyers to come out in droves to buy their properties? Maybe not but it certainly adds to the pull factor.

Potential house buyer Wan Harris Amir Wan Mohamed Nor, who is an engineer, says freebies are not a priority for him. “They serve as a complement but as a first time house buyer, the most important thing for me is the financial package offered by the developers,” he says.

As for Md Ridzuan Hanafiah, who is looking for a house currently, while he lauds the move by developers to woo customers, his main wish is that developers do not compromise the quality of their offerings given the soft property market. “That is most important,” he says.

By The Star (by Edy Sarif)

E&O bullish on second phase of St Mary Residences

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is optimistic about the take-up for its St Mary Residences Phase 2 serviced apartments, says executive director Eric Chan.

“Interest has been good. We feel it is timely for investors to enter the Malaysian market in view of the recent (property) rally in Singapore and Hong Kong,” he told StarBizWeek yesterday.

Chan said the company had been promoting the project, launched on Thursday, in several countries, namely Singapore, Hong Kong and China, and was targeting to sell 30% of Phase 2 (or Tower A) by tomorrow.

“We hope to attract buyers from Singapore and Hong Kong who ‘missed the boat’ during the property rallies in their respective countries,” he said.

St Mary Residences is located at the heart of Kuala Lumpur’s central business district along Jalan Sultan Ismail, Jalan P. Ramlee and Jalan Tengah. Tower A will comprise 288 luxury condominiums.

The units are smaller than most serviced residences within the KL city centre, with its one-bedroom units starting at 1,100 sq ft.

“Since the global financial crisis, rental budgets for expatriates have been slashed. St Mary Residences offers smaller but luxurious units at lower rentals, yet the units have a spacious feel,” said Chan. The one-bedroom units are priced from RM1.1mil.

Phase 1 (Tower C) was targeted at mostly local buyers and E&O achieved a 75% take-up rate in just 10 days when it was launched in June, Chan said, adding that he did not expect a similar rally for Phase 2.

“Many of the purchasers for Phase 1 comprised repeat customers who knew our products and brand well, so the speed of the acquisitions was quicker. Because Phase 2 is being targeted at the regional market, take-up will probably take longer.”

He said the local property was still a favourable investment for foreigners despite the current economic downturn.

“Malaysia has a sound financial system, stable economy, low cost of living and a favourable exchange rate. What’s more, properties here are among the cheapest in the region.

“With the recent economic stimulus and liberalisation policies, we expect a lot of foreign direct investment for Malaysian residential properties,” he said.

E&O will also be offering attractive packages (for Phase 2), such as a 10:90 financing scheme, zero interest during construction, free stamp duty upon transfer and free loan legal fee.

Tower A would be fully furnished, Chan said. “This makes it hassle free for our customers.”

There will also be 34,000 sq ft of retail space that will be annexed into Tower A.

“We are looking at setting up a spa, laundry and food and beverage centres – outlets that would add to the convenience of our residents,” he said, adding that Towers A and C would have a combined gross development value of RM750mil, and construction was expected to be completed by 2012.

By The Star (by Eugene Mahalingam)

Timely reminder to builders on safety features

Malaysians can count ourselves lucky as the country is sheltered from major natural disasters such as typhoons and earthquakes and we have relatively safe abodes and buildings that do not easily collapse when there are tremors.

We are also not near the Pacific Rim of Fire that is notorious for huge earthquakes and tsunamis although we could still feel tremors during Wednesday’s earthquakes in Samoa and Indonesia.

Earthquakes measuring 7.6 on the Richter scale in Sumatra and 8.3 in Samao resulted in many fatalities and extensive damage to buildings.

With the increasing frequency of such natural disasters, it is important for local property industry players to look for ways to reinforce their projects and incorporate more safety measures to ensure the property they design and build, especially high-rise buildings, are able to withstand tremors and earthquakes.

Facilities to accommodate mass evacuation of occupants of high-rise buildings should also be a top priority of building designers.

As big earthquakes are usually followed by tsunamis and high waves, property should not be built too near the shorelines and there should be high reinforced walls as a first line of defence to shelter these property should another tsunami like the one in 2004 strike.

Otherwise, generally the country has quite a conducive environment for the people to enjoy a good standard of living, at a relatively affordable cost.

Although there is still room for improvement in the country’s infrastructure system, we should be thankful for the clean water, regular electricity supply, and good roads and highways, among other things. We will appreciate what we have better by visiting other “less privileged” countries.

As far as housing is concerned, the people have a wide choice of residential property to choose from. They can either opt for high-rise living or stay in landed residences in the many housing schemes.

Hopefully, prices of goods and services will not skyrocket once the economic downturn caused by the global financial crisis is reigned in and the economy returns to growth.

We should learn from the experiences of other countries whose economies have suffered badly due to excesses which included over-priced and over-speculative property markets.

The massive loans taken out for property purchases and the resulting sub-prime loans would not have happened in the US if the banks there had been more vigilant in ensuring only those who have stable income streams and ability to repay their loans are approved for loans.

So, our well regulated banking system that required a lender to be employed or has a business with a minimum level of monthly income, has at least one guarantor and collateral to support their loan application, could have saved our financial system from a systemic failure this time around.

Prudence is the key word and should not be compromised for high business turnover.

As far as property prices are concerned, the global crisis would not have resulted in such major losses in the property value like those seen in some major European cities had real estate prices remained anchored to fundamentals.

Property prices are a function of demand and supply and a host of other factors including the people’s purchasing power and their affordability, prospects for growth of an area and standard of infrastructure facilities.

So far, property prices in the country have been reflective of actual market situations and have not hit the roof like those in some countries.

Both buyers and developers have important roles to play to ensure the market stays balanced and does not move into either extremes of a spiralling downward or upward trend.

Whether the global economy manages to pull off a V-shaped recovery or has to contend with a double V (double dip or W) will only be known in the coming months or possibly years.

With such uncertainties, there will still be caution in the market and the people will continue to watch their expenditure.

Developers should always strive to raise the standards and quality of their property products to ensure they are saleable as buyers today have many choices to choose from.

Needless to say, industry players that continue to innovate and are trendsetters in the various market sectors – from the lower priced to medium and higher-priced projects – will stand out from the rest to attract buyers.

Deputy news editor Angie Ng is appreciative of her landed residence and will not be moving to a high-rise dwelling any time soon.

By The Star (by Angie Ng)

Surging Singapore home prices lead to bubble fears

SINGAPORE: Singapore pri-vate home prices surged 15.9 per cent in the third quarter from the previous quarter, the biggest jump this decade, government data showed yesterday, highlighting fears about a property market bubble.

Worries about dangerously inflated house prices in Asia being fanned by record low interest rates have led to speculation that countries including South Korea and Australia could move to tighten monetary policy.

Singapore last month acted to cool the property market by releasing more land and making it harder for home buyers to defer payments, but analysts said policymakers were likely to hold off on further steps for fear of derailing a still patchy economic recovery.

Singapore home prices started rising in Q2, analysts say, contrary to a 4.7 per cent decline for that quarter shown in the Urban Redevelopment Authority's index, which is not seasonally adjusted.
Huge crowds have been snapping up units at new residential launches in Singapore, with reports of buyers queuing for hours and leaving blank cheques with agents to secure properties.

"The numbers are backing up the anecdotal evidence we've seen - if anything they are understating it," said Vishnu Varathan, an economist at 4CAST in Singapore. "Policymakers will be acutely aware of the risks of tightening too fast... At this point I think they will wait and see."

Varathan and most economists expect the Monetary Authority of Singapore to keep policy neutral when it releases its half-year policy statement later this month. Singapore forecasts its economy will contract 4-6 per cent this year and sees a subdued recovery likely continuing in 2010.

Prices of government-built apartments, which house about 85 per cent of Singaporeans, rose 3.2 per cent in the third quarter from April-June, faster than the 1.4 per cent gain in the second quarter, raising the floor for private home prices.

Some analysts think rising house prices in Singapore, Hong Kong and China are yet to peak, given a preference for property among investors and a faster-than-expected economic recovery.

By Reuters

UM Land gets nod for land acquisition

Seri Austin, a residential development of UM Land in Johor.

KUALA LUMPUR: Shareholders of United Malayan Land Bhd (UM Land), at its EGM, have approved the purchase of 629.25 acres in Bandar Pulai Jaya, Johor, for RM233mil cash.

As per earlier reports, the company said in a statement yesterday that the land would be for a proposed mixed development.

It will comprise industrial and technology parks, commercial, logistics and transportation hubs as well as supporting residential components.

Shareholders also approved UM Land’s proposal to jointly develop the land with Tradewinds Johor Sdn Bhd (via a 51:41 joint-venture company, Extreme Consolidated Sdn Bhd, held by UM Land and Tradewinds respectively).

The proposed development is estimated to take five years from completion of the proposed acquisition with a gross development value of RM718mil.

A local property analyst contacted by StarBiz said the venture was a good move, despite the sluggish residential property market in Johor.

“The project will take a few years to be developed and the residential property market would have bounced back by then,” he said, adding that he expected a turnaround by the middle of next year.

“Furthermore, UM Land has the holding power to not launch any projects at the moment,” the analyst said.

Payment for the land acquisition would be made under a deferred arrangement over a two-year period.

By The Star (by Eugene Mahalingam)

UMLand andTradewinds Johor team up

Property developer United Malayan Land Bhd (UMLand) has teamed up with Tradewinds Johor Sdn Bhd to jointly develop a RM718 million mix-used development in Bandar Pulai Jaya, Johor.

Under the deal, UMLand will hold a 51 per cent stake in the joint-venture company called Extreme Consolidated Sdn Bhd, while Tradewinds Johor will take the rest.

UMLand yesterday received shareholders' nod to buy the 254.5ha land for RM233 million cash.

The proposed mix development will feature industrial and technology parks, commercial, logistics and transportation hubs and supporting residential components. It is estimated to take five years to complete.
This planned development is expected to generate profits of about RM262 million over a period of five years.

By Business Times

Berjaya Land lines up slew of new launches next year

Property developer Berjaya Land Bhd (BLand) has lined up a slew of new launches this year and next as it sees signs of recovery in the local property market.

It has 10 projects in hand worth some RM1.2 billion.

"Based on the sales of properties at our ongoing developments, we believe the market is heading back to normal. Next year will be more exciting for us as we will introduce new product launches," BLand senior general manager of properties and marketing, Mah Siew Wan, told Business Times in an interview.

The company plans to launch a RM150 million residential project called "Covillea" in November, within its 160ha Bukit Jalil development in Kuala Lumpur.
Covillea comprises two blocks of apartments totalling 308 units, priced from RM400,000 per unit.

"We will launch five or six more projects in phases at our Bukit Jalil development over the next few years. Bukit Jalil is a mature township. It has a golf course and is located 15-20 minutes away from the city and we are confident of the take-up rate," Mah said.

BLand is one of the earliest developers in Bukit Jalil. It bought the 160ha land before the Sukom 98 games.

To date, it has used 64ha for an 18-hole golf course and a clubhouse to spearhead developments in the area.

BLand has been active in opening up new projects to sell, despite the slow market sentiments and economic uncertainties.

It had opened for sale five projects in the Klang Valley since the first quarter of this year.

They are Savanna 2 @ Bukit Jalil, comprising four blocks of condominium villas worth RM32.5 million, The Peak @ Taman Tar featuring 88 bungalow lots worth RM354.4 million, and Vasana 25 @ Seputeh Heights, consisting of three bungalows and 22 link villas worth RM150 million.

The other two projects are Hazel 2 @ Shah Alam, comprising 87 units of terraced houses worth RM32 million, and 1 Petaling @ Sg Besi, featuring a 21-storey building with 250 units of condominiums and 32 units of shoplots, worth RM73 million.

BLand has achieved 20-25 per cent sales from the properties, but for 1 Petaling, 50 per cent of the units have been sold, Mah said.

She believes that sales will improve, given that people are starting to look for new homes.

BLand has other projects like The Link @ Bukit Jalil, featuring three and four storey shop offices, Kinrara Mas Shop Apartment in Puchong, Seputeh Heights with 103 bungalow lots, and Kuantan Perdana, comprising 37 units of shopoffices.

The properties are worth around RM350 million and 80-95 per cent have been sold.

BLand, a Berjaya Corp Bhd unit, posted net loss of RM102.15 million last year, compared with net profit of RM1.11 billion a year ago due to the absence of exceptional gains.

Revenue, however, jumped nearly threefold to RM4.2 billion, mainly due to higher contribution from the gaming business arising from the full year consolidation effect of Berjaya Sports Toto Bhd.

By Business Times (by Sharen Kaur)

Glomac goes for commercial, high-end residential projects

Property developer Glomac Bhd will focus on developing commercial and high-end residential developments such as the Suria Stonor in Kuala Lumpur City Centre as they offer better margins, its top official said.

"That is our forte ... our strength in actively putting out niche projects. For commercial properties, we see that the appetite is back," group managing director Datuk Fateh Iskandar Mansor said after the company's shareholders meeting in Kelana Jaya, Selangor, yesterday.

Glomac, which has 13 projects in hand worth RM3 billion, has lined up new launches for the current year, worth almost RM500 million.

"With the government stimulus packages, we see some improvements in the economy. I think the worst has past and things are stabilising," Fateh Iskandar said.
Glomac has in the pipeline projects worth more than RM2.5 billion to launch from 2010.

Fateh Iskandar said Glomac got off to a good start in the current year as it sold Wisma Glomac 3 and Block B of Glomac Business Centre for RM72.6 million.

The company is also seeing significant contributions from Glomac Tower, a Grade A commercial building in Kuala Lumpur which was sold to a Bumiputera firm for RM577 million in December 2007.

"We have received payments of RM290 million from the sale of the property. Glomac Tower would contribute to our earnings until 2012, but we have Glomac Damansara and Glomac Cyberjaya to anchor us," Fateh Iskandar said.

Meanwhile, Glomac group executive vice-chairman Datuk Richard Fong said the government is not doing enough to promote the sale of Malaysian properties to foreign buyers.

He said if the government can improve the Malaysia My Second Home programme, it would help stimulate the economy and drive property sales.

By Business Times (by Sharen Kaur)

Glomac sees 15% rise in earnings

PETALING JAYA: Property developer Glomac Bhd hopes to achieve at least 15% increase in earnings when its financial year ends on April 30 (FY10), supported by projects in hand it has now.

For FY09, it reported a 8.12% decline in net profit to RM32.3mil on revenue of RM351.57mil.

From left: Glomac group executive vice-chairman Datuk Fong Loong Tuck, group executive chairman Tan Sri Mohamed Mansor Fateh Din and Datuk FD Iskandar Mohamed Mansor after the AGM

Group managing director/chief executive officer Datuk FD Iskandar Mohamed Mansor said the group currently had in the pipeline property projects with an estimated gross development value of about RM3bil that would last for another five years.

“The five-year period is based on our average launch of about RM600mil in projects a year. We are optimistic of achieving the target figure as we know what our current unbilled sales are now.

“Apart from that, we managed to lower our gearing level to 0.12 times now from 0.35 times and this will certainly help our cashflow to be more positive,” he said after the company AGM yesterday.

On the group’s existing landbank, Iskandar said Glomac had about 400ha for future development and was looking for niche parcels of land to acquire in the Klang Valley.

“We are not looking for bigger (plots of) land. Instead, we are looking for niche land in the Klang Valley as the most important thing is the location. We plan to develop commercial and residential projects if we manage to buy the land,” he said.

He believed the property sector had not fully recovered yet though there was already some pick-up in certain locations.

“Confidence level among the buyers/investors seems to be improving now but only for certain locations. We hope by the second half of next year, the property sector in general will be fully recovered,” he said.

He added that commercial properties were currently picking up based on the recent launch of the group’s commercial projects.

“Our Glomac Damansara and Glomac Cyberjaya for example, received very positive take-up when launched just recently,” he said.

Iskandar also said the group was looking for potential business ventures in the region after setting foot in Thailand and Australia.

For the first quarter ended July 31, Glomac recorded net profit of RM8.3mil on revenue of RM59mil compared with RM7.8mil and RM79.5mil in the previous corresponding period.

By The Star

Iskandar Invt to award RM2b jobs next year

Iskandar Investment Bhd, a government company tasked to build catalytic projects in Iskandar Malaysia in Johor, will give out RM2 billion worth of contracts next year.

The contracts include jobs to build hotels and a shopping mall surrounding the Legoland theme park, president and chief executive officer Arlida Ariff said.

She said the company has awarded over RM1 billion worth of construction jobs before this and it is stepping up the development pace at Iskandar Malaysia. WCT Bhd, an infrastructure firm, had in July won contracts valued at RM767 million to build roads and sewerage there. Property and construction firm Mitrajaya Holdings Bhd has also won jobs from Iskandar Investment.

"We've spent the last few years planning and firming up deals, now it is time to convert those investments into activities that will stimulate more works on the ground," Arlida told a media briefing in Kuala Lumpur yesterday.

Next year's contracts are mainly for the construction of buildings that include a medical school and student residences, residential units within the Medini cluster, and amenities around Legoland.
The completion date for Legoland has been brought forward by about a year and it is now scheduled to be ready by April 2012, Arlida said. At least one hotel in that area and a shopping mall, will be ready by the time the theme park opens its doors, she said.

There will be a four-star business hotel and another resort hotel around Legoland, she added.

Arlida said Iskandar will bring in partners, both local and foreign, to work on some of the projects.

"Towards this year-end and into next year, we hope to announce at least three more partners and bring in three more universities into Educity (within Iskandar Malaysia)," she said.

"The next two months are very busy for me. I'll be travelling to five countries to finalise deals." She will be travelling to Dubai, the UK, Australia and India in the next two months.

"It's time to expand beyond the current markets and partners that we have now. There's still a lot of room for growth," she said.

Iskandar Investment's reputation and credibility is more solid now that it has awarded a big sum in contracts, she remarked. "We have given out over RM1 billion contracts. This is an affirmation that the project is for real."

By Business Times (by Chong Pooi Koon)