Property prices may rise 5% to 10%

KUALA LUMPUR: Property prices in Malaysia are forecast to increase by 5% to 10% this year against last year in line with the recovering economy.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong said the market did not expect a big jump in property prices this year as the economy was not fully recovered yet.

The economic recovery will largely influence the property market performance and Malaysia’s gross domestic product (GDP) growth rate this year is forecast at 2% to 3% from the estimated contraction of 3% last year.

“Condominiums and apartments are currently selling well and landed property prices, which had held through the economic crisis last year, are expected to grow this year,” Wong said after the opening of the Malaysian Property Summit 2010 yesterday.

Citing examples, Wong said the St Mary’s serviced apartments were 80% taken up within five days of their launch, Sky Residences recorded a 70% take-up rate and the 50-unit Verticas Residensi in Bukit Ceylon achieved a 60% take-up rate during soft launch.

“This shows that condos and apartments are not short of buyers. And developers that postponed property launches last year are not expected to do so this year,” he said, adding that property prices last year were estimated to have dropped by 5%.

However, Wong raised some concerns about tenancy of condominiums and apartments.

“A lot of new developments are facing a hard time in getting tenants,” he said.

Another area of concern would be the office market that saw the supply of four billion sq ft of space last year, according to Wong.

“Thus, there is a slight concern on the take-up rate, especially for tenants that will occupy huge space of 20,000 sq ft and above as well as the effect of the new supply on rental rates,” he said.

Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani said this would be a good year for the property sector as key economic indicators that related to the growth of the industry were expected to perform better than last year.

The expected recovery in the GDP of Malaysia’s main trading partners – the United States, Japan and Singapore – and improved prices for crude oil, crude palm oil and rubber would augur well for the country, he said.

In fact, the property market, which had slumped in the first half of last year, had improved since the second half-year, he added.

By The Star

Malaysian property market tipped to improve in 2010

The Malaysian property market, estimated to have registered transactions worth RM75.42 billion last year, is expected to improve further in 2010 in line with the economic recovery.

The transactions involved 337,990 properties as compared with the 340,240 valued at RM88.34 billion in 2008, said the director general of Valuation and Property Services Department, Finance Ministry, Datuk Abdullah Thalith Md Thani.

He said the challenging economic and financial environment had affected the performance of the Malaysian property market last year.

"This year will be a good year for all. The property market for this year will improve as the number of transactions involving new housing and construction activities, increases," Abdullah Thalith told reporters at the Third Malaysian Property Summit 2010, in Kuala Lumpur yesterday.
He pointed out that Malaysia is expected to steer towards a recovery path this year, driven primarily by domestic demand, with commodity prices for rubber, crude oil and palm oil also improving.

These, he said, will help to increase the confidence level among consumers and provide a positive impact for the property sector.

"The demand for properties is returning," he added.

Abdullah Thalith said the government would continue to implement appropriate measures to restore confidence and market sentiment.

He said the liberalisation of Foreign Investment Committee (FIC) guidelines, would lift the competitiveness of Malaysia, as an investment destination.

Furthermore, Abdullah Thalith said, acquiring properties in Malaysia would be even more attractive, as the FIC approval is no longer required.

He said the review of the Real Property Gains Tax would augur well for the property industry.

By Bernama

Property market to remain fairly stable

The world's biggest commercial property consultant, CB Richard Ellis (CBRE) expects Malaysia's property market to be fairly stable in terms of rental and capital value with increased foreign investments flowing into the property sector.

"We don't anticipate a major crash or upturn this year as we are not overbuild.

"Foreign funds drifted away with the financial crisis and now it's picking up slowly with the liberalisation measures creating new opportunities for investors," said the Executive Chairman of CBRE (M) Sdn Bhd Christopher Boyd at a press conference in Kuala Lumpur today.

He also said developers should trade cautiously for the next six to eight months as there is still no end to the problems in the West.
Boyd also said Malaysia's property market was transparent and this would be the key driver in attracting foreign investors.

"Besides, the healthy financial environment will also augur well in luring investors," he added.

Currently, he said good investments are hard to come by and investors are looking particularly at newly completed buildings in established areas of Klang Valley, Johor and Penang.

Boyd said CBRE expects at least 30 major transactions in commercial properties to take place this year, primarily in the Klang Valley.

"In the second-half of last year, 28 major transactions took place with a total value in excess of RM3.5 billion despite the global financial crisis. This year we expect perhaps 28 to 30 (transactions) or more.

"With the rules on foreign ownership becoming very clear, it has augured well for foreign interest as well as place Malaysia's commercial investment market on par with most countries in the region," he explained.

Speaking on rental rates, Boyd said: "There is quite a healthy supply of space coming on to the market. About 2.8 million to 3 million square feet will be available in the next three years as there isn't going to be a squeeze on rental," he said.

Elaborating further, he said office rentals in Kuala Lumpur are expected to stabilise in the first-half of 2010, barring any major economic setbacks.

"The combination of modern infrastructure, quality facilities and comparatively cheap rentals makes KL a highly attractive location for any prospective multinational considering a move," he added.

CBRE expects continued broad-based demand across a wide range of sectors including Islamic finance, the oil and gas industry, agribusiness and commodities.

Meanwhile, Boyd said the trend of stepped-up rate of completion of office development for the next three years was set to continue.

The company expects a further 2.40 million square feet of office space to be added this year, to existing supply, 2.82 million square feet next year and 3.93 million square feet in 2012.

He added despite weakening rentals and slightly higher yield expectations, office capital values were expected to remain steady throughout 2010 generally ranging between RM800 and RM1,200 per square feet.

Looking ahead, he said demand for green buildings in Malaysia would continue to rise as environmental awareness grows.

Multinationals would remain at the forefront of the trend, increasingly adopting a commitment to lease green office space, wherever possible.

By Bernama

Sime Darby Property, Sunrise in RM1bil JV

PETALING JAYA: Two major property groups, Sunrise Bhd and Sime Darby Property Bhd, have teamed up to jointly develop a RM1bil integrated commercial property project in Bukit Jelutong, Selangor.

Datuk Tunku Putra Badlishah (left) and Sunrise Bhd executive chairman Datuk Tong Kooi Ong looking at a model of the Bukit Jelutong township following the JV signing ceremony on Tuesday.

“The proposed development will be launched and developed in five phases from 2011 onwards,” Sunrise said yesterday in a statement to Bursa Malaysia.

The project will be undertaken via a joint venture (JV) vehicle – Baywood Avenue Sdn Bhd – with each party holding 50% stake.

Baywood has entered into sale and purchase agreements to acquire three parcels of freehold land totalling 20.95 acres from Sime Darby Bhd’s wholly owned subsidiaries Highland & Lowlands Bhd and Augsburg (M) Sdn Bhd for RM114mil. Sunrise’s share of the purchase price amounts to RM57mil.

“Through this strategic partnership, we are able to unlock the value of its landbank and create a commercial hub within the township of Bukit Jelutong,” Sime Darby Property managing director Datuk Tunku Putra Badlishah said in a separate joint statement.

“This will further enhance the value of properties in the area.”

The overall project was expected to be completed in seven years from the first launch.

“It is expected that the JV will also pave the way for future collaboration between Sunrise and Sime Darby Property,” Sunrise said.

The commercial development will have a built-up area of 2.7 million sq ft, consisting of retail, shop offices, office suites and service apartments.

“The proposed development will provide shopping convenience and easy access to services for the 25,000 residents and working population in Bukit Jelutong, which has good access to a series of highways,” Sunrise said.

By The Star

Sime Darby, Sunrise to develop RM1b project

The tie-up to develop a RM1 billion integrated commercial project in the Bukit Jelutong township means that both companies can take advantage of each other's strengths

Sime Darby Property Bhd (Sime Property) is partnering Sunrise Bhd to develop a RM1 billion integrated commercial project in the Bukit Jelutong township in Selangor next year.

It is the first tie-up between Sime Property and Sunrise. Sime Property is known for its landed properties, while Sunrise is well known for its high-end projects in Mont'Kiara, Kuala Lumpur.

The deal means that both companies can take advantage of each other's strengths, Sime Property managing director Datuk Tunku Putra Badlishah Tunku Annuar said.

"We are always looking at ways to accelerate the land development with reputable and like-minded developers like Sunrise. This partnership will further enhance the value of properties at the township," he said after signing the joint-venture agreement in Bukit Jelutong, Shah Alam, yesterday. Sime Property has 14,800ha in Greater Klang Valley.
The two firms will have equal stakes in the joint-venture company, Baywood Avenue Sdn Bhd. They plan to build retail, shop-offices, office-suites and serviced apartments on some 8.4ha.

The project, located opposite Sime Darby Pavilion, will be developed in five phases over seven years, beginning next year.

The joint venture will buy the land from a subsidiary of Sime Property for RM118.1 million, or RM125 per sq ft.

Sunrise executive chairman Datuk Tong Kooi Ong said the vision is to develop sustainable, or green, properties that will appreciate in value.

Sime Property and Sunrise may even do more projects together.

"We have completed the first part of the marriage today. This means, going forward, things will be easier for us as we have already built a base here. If the project goes well and the chemistry is there, the joint venture could be extended," Tunku Putra Badlishah said.

It is learnt that Sunrise may want to partner Sime Property to develop pockets of land along the Guthrie Corridor Expressway.

Tunku Putra Badlishah also said that the project will be the first of many joint ventures Sime Property will be forming with reputable developers. It is already in talks with several other developers and may ink a second deal soon.

By Business Times

Sunrise to replicate success in Bkt Jelutong

The joint venture (JV) between Sime Darby and the Sunrise Group for an integrated commercial development on a 21-acre site in Bukit Jelutong is expected to be positive.

This is because it allows Sunrise to replicate its success in developing Mont Kiara in another prime location, says ECMLibra Investment.

"We believe there is a captive market for the product offerings proposed by the JV," said ECMLibra Investment in its research note today.

The research house also expects earnings contribution for the Sunrise Group from the project, slated to begin in 2014.
Sunrise announced yesterday that it had entered into a 50:50 JV with Sime Darby to develop the land in Bukit Jelutong.

The JV will acquire the land from Sime Darby for RM114.1 million cash.

Based on the initial GDV and assumed net margin of 18 per cent, the share of net earnings for Sunrise will be RM90 million over the development period, ECMLibra Investment noted.

It added that, although the initial estimate GDV is RM1 billion, the figure is believed to be conservative.

Meanwhile OSK Research Sdn Bhd, in commenting on the JV, said it would likely be a significant driver for the earnings of Sunrise, going forward.

By Bernama

'Sunrise JV little financial impact on Sime'

The financial impact on Sime Darby's joint venture (JV) with the Sunrise Group is negligible, says ECMLibra Investment Research.

ECMLibra Investment also indicated that the JV was most certainly in line with the Sime Property segment's aspirations, said the research house in a statement today.

Sime Darby Property Bhd and Sunrise Bhd announced yesterday that both had entered into a JV to develop three lots of freehold commercial land in the Bukit Jelutong Township.

The project has an estimated gross development value (GDV) of RM1.0 billion. Both companies have also formed a 50:50 joint-venture company to develop it.
"We believe the move falls into the Group’s master plan for the Sime Darby Vision Valley (SDVV),of which they expect to announce more details soon," said ECMLibra Investment.

Bukit Jelutong is part of the SDVV called the Selangor Vision City which consists of Bukit Jelutong (90 per cent completed), Denai Alam (30 per cent completed) and the Elmina and Lagong Logistics Hub.

By Bernama

Sunway City hires bankers for REIT IPO

PROPERTY developer Sunway City has hired RHB Investment Bank and Credit Suisse as the main coordinators for the planned listing of its real estate investment trust (REIT) in Malaysia, sources with knowledge of the deal said on Wednesday.

The listing of the REIT, the biggest ever in the Southeast Asian country, is likely to happen in the first half of 2010 and the company may raise about RM1 billion in its public offering, one of the sources told Reuters.

“The REIT will have a market capitalisation of more than RM3 billion,” said one source.

Credit Suisse will act as the international global coordinator, while RHB will handle all domestic issues.
Sunway City was not immediately available for comment, while RHB and Credit Suisse declined to comment.

Sunway City, valued at US$440 million, told Reuters last year that it may revive the plan to float its property assets in 2010 depending on the recovery in markets.

Sunway City said earlier this month the REIT will group at least four properties in the capital Kuala Lumpur and one in northern Penang state.

Shares of the property developer ended up 0.6 percent at RM3.20, outperforming the broader market

By REUTERS

MK Land denies dispute

PETALING JAYA: MK Land Holdings Bhd has denied that there is a dispute in the internal management of the company and a vacuum exists in the management.

General manager of its legal department, Preetie Boler, said in a statement that contrary to the StarBiz report yesterday, MK Land shares probably dipped because of the overall market downturn and not due to a management dispute.

According to her, executive chairman Tan Sri Mustapha Kamal Abu Bakar is still leading the company.

Boler said it was untrue that Lau Shu Chuan was appointed together with the three senior executives – R. Balasundram, Fatimah Wahab and Yusof Abu Othman – in November 2008. “Lau has in fact served the company since March 7, 2000 and appointed chief operating office in September 2004,” she said.

She said the company was “intensely moving ahead” with its three-pronged approach – sales of properties, cost-control measures and a corporate exercise – to strengthen its position as unanimously approved by its board of directors.

“The company has even appointed Hong Leong Investment Bank Bhd to undertake the exercise and an announcement was made by Hong Leong Investment Bank to Bursa Malaysia on Jan 14.

“Meanwhile, the company has gone ahead to appoint professionals such as advisors, valuers and lawyers to implement the corporate exercise,” she said.

Boler said it was normal for every company to have a succession plan, and internal management changes or reshuffling were an ongoing process for the betterment of the company.

By The Star

Resorts World Sentosa hotels fully booked

PETALING JAYA: Resorts World Sentosa’s (RWS) four newly opened hotels are booked solid till end of next month, according to the Singapore Business Times (SBT).

The SBT report said the republic’s first integrated resort (IR) revealed on its Facebook fan page last Friday that the four hotels “have reached maximum capacity” until the end of April. In an update post on Saturday, however, it said that it had “managed to free up some rooms” in March and April.

Occupancy rates at RWS’ four hotels soared to over 90% during this past weekend, assistant director for communications Robin Goh was quoted as saying. Both the Festive Hotel and the Hard Rock Hotel Singapore recorded full houses.

SBT said RWS expected to operate at full or near-full capacity during the weekends for the foreseeable future.

“Already, every room during the nine-day period spanning the upcoming Chinese New Year holiday from Feb 13 to 21 has been snapped up by both Singaporeans and overseas guests eager to be among the first in the world to stay at the IR,” the report said.

Collectively, the four hotels – Festive Hotel, Hard Rock Hotel Singapore, Hotel Michael and Crockfords Tower – offer 1,350 rooms and 10 restaurants.

Two other hotels, Equariyus Hotel and Spa Villas, will be launched later this year and add 500 rooms. SBT reported that when the IR’s call centre first opened its hotline on Jan 11, the first three days alone saw some 5,000 room nights booked.

By The Star

Sime Darby Property seeks partners to develop landbank

SIME Darby Property Bhd (SDPB), the property arm of Sime Darby Bhd, will form joint ventures with both local and foreign property developers to help develop its 14,800ha of landbank in the country.

"One of the strategies we have adopted is to accelerate the development of our landbank through joint ventures. We are now talking to a few parties," SDPB managing director Datuk Tunku Badlishah Tunku Annuar told Business Times in an interview.

He declined to name the potential parties.

According to sources, SDPB has chosen Sunrise Bhd and IOI Properties Bhd as its joint venture partners to begin with.
Tunku Badlishah also said SDPB will launch RM2 billion worth of properties this year, amid prospects of an economic recovery gaining strength.

It will launch properties ranging from affordable to high-end homes and landed to high-rise within its 10 existing townships in the Klang Valley.

The townships include Subang Jaya, Bukit Jelutong, USJ Heights, Bandar Bukit Raja, Ara Damansara, Denai Alam, Melawati, Nilai Impian, Planters' Haven and Putra Heights.

Tunku Badlishah said SDPB is cautiously optimistic that the property market will do better this year as there is strong interest among buyers.

He cited the developer's recent sale of houses in Denai Alam and USJ Heights, where each home was priced between RM500,000 and RM1.5 million and were fully taken up.

Sime launched Mandara in USJ Heights over the weekend and sold 54 per cent of the 98 units of two-and-half-storey terraced houses available for sale.

Two weeks ago, it launched Clover Park in Denai Alam, comprising 81 units of double-storey link houses. It sold 75 per cent of the homes in just two days.

Last November, Kayangan Puteri in USJ Heights was launched. It consists of 125 units of double-storey superlink homes, of which 14 per cent of the units are remaining.

"I was pleasantly surprised by our sales achievement. The success of these launches is testimony to the recovery of the property market. In times of uncertainty, people would buy from a reputable developer and we have the edge over this," Tunku Badlishah said.

He added that SDPB's "Buy Now" promotion had also helped to bolster sales. It offers buyers a "Guaranteed Buy Back" scheme, coupled with innovative financing packages.

"We will launch a loyalty or premier club programme in March, which will further strengthen our position in the market place. Under this plan, the more properties one buys from us, the more benefits they stand to get.

"We are talking to all the divisions within the Sime Darby Group such as automotive to see what they can offer for our customers. We hope to put in place everything by March."

By Business Times (by Sharen Kaur)

Sime Darby, Sunrise to develop RM1b project

SIME Darby Property Bhd and Sunrise Bhd will jointly develop three lots of freehold commercial land measuring 8.38 hectares in the Bukit Jelutong Township in Shah Alam.

The project, located opposite the Sime Darby Pavilion, has an estimated gross development value (GDV) of RM1.0 billion.

Both companies formed a 50:50 joint venture (JV) company today to develop the project. The company will be known as, Sime Darby Sunrise Development Sdn Bhd.

Speaking to reporters after the JV signing ceremony today, Sime Darby Property Managing Director Datuk Tunku Putra Badlishah Tunku Annuar said the project, would have a gross built-up area of approximately 2.7 million square feet.
It will comprise retail outlets, shop-offices, office-suites and serviced apartments.

He said the project would be launched and developed in five phases from 2011 onwards and is expected to be completed in seven years.

According to Tunku Putra Badlishah, Sime Darby Property is looking to accelerate the development of its landbank through strategic partnerships, with like-minded property developers.

The company is also in talks at the moment with a few developers on strategic partnerships.

At present, Sime Darby Property's total landbank stands at 14,800 hectares.

By Bernama

Malaysian property market to improve further this year

KUALA LUMPUR: The Malaysian property market, estimated to have registered transactions worth RM75.42 billion last year, is expected to improve further in 2010 in line with the economic recovery.

The transactions involved 337,990 properties as compared with the 340,240 valued at RM88.34 billion in 2008, said the director general of Valuation and Property Services Department, Finance Ministry, Datuk Abdullah Thalith Md Thani.

He said the challenging economic and financial environment had affected the overall performance of the Malaysian property market last year. "2010 will be a good year for all.

"The property market for this year will improve as the number of transactions involving new housing and construction activities, increases," Abdullah Thalith told reporters at the Third Malaysian Property Summit 2010, here Tuesday.

He pointed out that Malaysia is expected to steer towards a recovery path this year, driven primarily by domestic demand, with commodity prices for rubber, crude oil and palm oil also improving.

These, he said would increase the confidence level among consumers and provide a positive impact for the property sector.

"The demand for properties is returning," he added.

Abdullah Thalith said the government would continue to implement appropriate measures to restore confidence and market sentiment.

He said the liberalisation of Foreign Investment Committee (FIC) guidelines, would increase the competitiveness of Malaysia, as a preferred investment destination.

Furthermore, Abdullah Thalith said acquiring properties in Malaysia would be more attractive, as FIC approval is no longer required.

He said the review of the Real Property Gains Tax (RPGT) would also augur well for the property industry.

By Bernama

MK Land shares dip on news of internal dispute

PETALING JAYA: Shares in MK Land Holdings Bhd continued to fall yesterday, shedding another 0.5 sen to 38.5 sen on volume of 1.39 million shares, on news that three of its chief operating officers (COOs) would be leaving the company because of a management dispute.

Since hitting a six-month high of 45.5 sen on Jan 6, the stock has been facing selling pressure due to rumours of a management fallout.

The three COOs are R. Balasundram, Fatimah Wahab and Yusof Abu Othman, who together with Lau Shu Chuan, were appointed COOs in November 2008.

Sources close to MK Land said Fatimah tendered her resignation yesterday via email.

Fatimah is said to be unhappy as MK Land executive chairman Tan Sri Mustapha Kamal Abu Bakar had earlier promised to make her chief of MK Land.

However, when he recently appointed his eldest daughter executive director, Fatimah was said to be disheartened.

One source said that Balasundram was no longer going to office, while Yusuf would leave at the end of the month. MK Land officials declined comment on the issue.

On Saturday, it was reported that plans to rejuvenate MK Land Holdings Bhd had hit a snag as three of its four COOs, who were roped in to turn around the property development company, would be leaving.

To recap, Mustapha had returned to helm MK Land in June 2008, after earlier stepping down to focus on his private companies.

MK Land had posted losses in 2007 due to additional costs incurred to complete projects. He had great hopes of embarking on a turnaround plan in 2008 to be implemented in three phases.

Phase 1 involved strengthening the senior management team with the introduction of new COOs, adopting focus products to improve sales and the divestment of vacant plots of land to increase cash levels in the group.

This was when the four COOs were appointed. Since then, MK Land has been able to make profit and boost sales. It posted a net profit of RM18.3mil in 2008 versus a net loss of RM61mil in 2007.

For the first quarter ended Sept 30, 2009, revenue was up over 5% to RM80.81mil but net profit fell 75.5%to RM1.2mil.

Under the leadership of the four COOs, it was reported that MK Land was recording average sales of RM30mil per month, three times more than prior to their appointments.

The purported resignations of the COOs may put a stop to the second and third phases of MK Land’s turnaround plan.

Phase 2 is aimed at higher profitability with plans to move into a more high-end residential market in Damansara Perdana together with the development of purpose-built office buildings in Cyberjaya and Damansara Damai.

Phase 3 is where MK Land plans for longer term profitability and growth by exporting its expertise in quality affordable housing to other countries.

MK Land is the 16th biggest property developer in Malaysia with market a capitalisation of RM464mil.

By The Star

MK Land still focused on turnaround plan

MK Land Holdings Bhd said yesterday that its turnaround efforts were going smoothly as planned and that management remained solid.

It was responding to a report in this newspaper last Saturday, which had said that its turnaround plan might have hit a bump as several senior officials were leaving.

MK Land said it was "intensely moving ahead with its three-pronged approach", which entailed sales of properties, cost-control measures and a corporate exercise to strengthen its position.

The company said it had appointed Hong Leong Investment Bank Bhd to undertake the corporate exercise and was going ahead with the appointment of professionals to implement the plan.

It added that there was no dispute within the MK Land management and that Tan Sri Mustapha Kamal Abu Bakar was still leading its team of executives.

It pointed out that a succession plan was normal in every company and that the appointment of Felina Mustapha Kamal as executive director was approved by the board on August 1 last year as part of the company's succession plan.

By Business Times

MRCB set to buy strategic land

PETALING JAYA: The completion of Malaysian Resources Corp Bhd’s (MRCB) rights issue by the middle of next month will pave the way for the company to acquire some parcels of strategic land owned by the Federal Government in the Klang Valley, according to industry observers.

“It is a prelude to strategic land deals, which involve substantial amounts of money,” an analyst said. “And if the deals (go) through, it will be a boost to MRCB’s plan to be an integrated property developer.”

It is understood that MRCB’s management recently reiterated its intention to acquire several plots of such land in the Klang Valley, including a 60-ha parcel in Jalan Cochrane and 8-12ha at Ampang Hilir.

But analysts believe there are more to it than that, specifically highlighting the much sought-after 1,360-ha plot belonging to the Rubber Research Institute of Malaysia in Sungai Buloh as well as some pockets of land within the KL Sentral and Brickfields area.

At the company EGM last month, chief executive officer Mohamed Razeek Hussain said the company’s one-for-two rights issue at RM1.12 per share, was to raise funds for business expansion in line with the global economic recovery.

He said the bulk of the proceeds raised, which could total between RM508mil and RM541mil, would be used to increase its landbank, particularly in the Klang Valley, for commercial and residential developments.

Industry observers believe the award of the Federal land deals will only be finalised in June during the tabling of the 10th Malaysia Plan.

The Government is said to be very tight-lipped about the land deals, with MRCB quoted as saying that it was up to it to decide on which company to award those land deals to.

It is believed that several government-linked corporations have also been contending for those land deals.

Nevertheless, analysts believe MRCB stands a good chance of clinching most of the significant land deals that it has bid, simply because the company has strong backing from the Employees Provident Fund (EPF), which is its largest shareholder with a 30.6% stake.

MRCB chief financial officer Chong Chin Ann confirmed last month that EPF had taken up its 130 million rights shares for more than RM150mil.

This has further reinforced market belief that MRCB remains the front-runner in the Federal land deals because industry observers believe those potential land deals are important to EPF, which is an active property player and financier.

“Another thing going for MRCB is that the (parcels of) land are somewhat viewed as the company’s territory,” an analyst said, particularly referring to the KL Sentral area, where MRCB is one of the major developers of the integrated township.

By The Star

Borneo Resources in RM40mil swiflet eco-park JV

KUCHING: Sarawak State Economic Development Corp (SSEDC) and Peninsular Malaysia-based Borneo Resources Synergy Sdn Bhd (BRS) have agreed to jointly develop a RM40mil swiftlet eco-park in Balingian, Mukah Division within the Sarawak Corridor for Renewable Energy.

BRS, a wholly-owned subsidiary of property development and investment firm Masmeyer Holdings Sdn Bhd, has a 80% stake in the joint venture. SSEDC holds the balance 20%.

Sited in a rural setting along the Mukah-Balingian coastal highway, the project will involve the development of 40 three-storey units and 15 three-storey bungalow units.

“The project is targeted to be completed not later than 2012. Ideally, it is to be ready this year,” BRS director Choo Beng Kai said after the joint venture agreement signing ceremony. Golden Swift Resources Sdn Bhd, a swiftlet farming expert, has been engaged to provide technical expertise to the project.

SSEDC was tasked by the state government to spearhead the development of swiftlet farming on a well-planned, sustainable and eco-friendly manner.

The state authorities recently took action against hundreds of unlicensed swiftlet operators who used shophouses in town for swiftlet farming. The proposed park will provide an alternative venue for swiftlet farmers asked by the state government to shift their operations to approved sites.

Newly appointed Sarawak Assistant Tourism Minister Datuk Talib Zulpilip, who witnessed the ceremony, said the development of the proposed park was to ensure an orderly development of the lucrative swiftlet farming industry.

Talib, who was former SSEDC chairman, said SSEDC planned to develop similar swiftlet eco-parks in other parts of the state.

“We (SSEDC) are looking to bring in more joint venture partners in similar projects.” He said SSEDC-BRS would process and market the bird’s nests the joint-venture company produced. A kg of unprocessed bird’s nest now fetches about RM4,250.

Talib said Sarawak was well-known for its high quality bird’s nest, adding that this was evident as the early traders from China had come to Sarawak to buy bird’s nests.

By The Star

Kuwait Finance eyes more high-end KL properties

Kuwait Finance House (Malaysia) Bhd (KFHMB) is looking to buy Grade A commercial buildings and residential towers in Kuala Lumpur.

"KFHMB prefer properties in the KLCC area. There are a few going below market value. Any transactions by KFHMB will be done outside of the bank's balance sheet," a source said.

He said KFHMB will set up a special real estate fund or entity to invest here, similar to what it did when it bought Glomac Tower and The Pearl @ KLCC.

KFHMB has a proprietary equity interest in KFH Reetaj Sdn Bhd, the holding company of Prestige Scale Sdn Bhd, which bought Glomac Tower in late 2007 from Glomac Bhd, for RM577 million.

Reetaj is 81 per cent and 19 per cent held by its parent KFH and KFHMB, respectively.
The Pearl, a 41-storey condominium, was bought by Flora Bliss Development Sdn Bhd, a consortium led by KFHMB for RM550 million in 2008, from Ceramic Home Tiles Sdn Bhd, linked to Malton Bhd.

On KFHMB's move to not proceed with the purchase of half of YNH Tower on Jalan Sultan Ismail for RM920 million, the source said the plan was aborted as the parameters had changed along the way.

"From day one that we looked into the deal until now, there were a lot of variation. There were certain conditions that we stipulated, which were not met within the transaction," he said.

The source said KFHMB intends to continue to participate in property development in Malaysia through various means.

KFHMB may buy shares in the property development company, or provide financing for the construction of the project. It may also provide Mudharabah and Musyarakah, akin to the underwriting of sale, or buy the building like it did for Glomac Tower and be a master lessor.

Besides Glomac Tower and The Pearl, KFHMB has invested in Pavilion KL, Avare and The Oval in Kuala Lumpur, Sunway South Quay in Bandar Sunway and The Sanctuary Penang.

KFHMB had entered into a Musyarakah agreement with a fund to underwrite/purchase two residential blocks at Pavilion KL.

The developer, Kuala Lumpur Pavilion Sdn Bhd, a unit of Malton Bhd, was paid according to the progress of the project during construction. The condominiums were later sold for capital gains.

According to KFHMB director for real estate advisory, Siti Mariam Mohd Desa, there are no plans to sell Glomac Tower.

"We are going to lease the building to multinational companies. We want a good range of tenants but it will all depend on the market," she told Business Times in a telephone interview.

On talks that Glomac Tower will be renamed Kuwait Finance Tower, she said it has not been decided.

By Business Times (by Sharen Kaur)

Institute plans more courses for realtors

Datuk Seri Ahmad Husni Mohamad Hanadzlah hitting the gong to mark the opening of MAREC. With him are Loke Fu Wah (left) and Julie Wong.

KUALA LUMPUR: The Malaysian Institute of Estate Agents (MIEA) wants to introduce more education and development courses to enhance the standard of real estate agents in the country, said president Julie Wong.

“We plan to bring in more management courses like the CIPS (Certified International Property Specialist) to enhance the knowledge of our real estate agents,” she said after the opening of the Malaysian Annual Real Estate Convention (MAREC) on Saturday.

She said the MIEA also had plans to bring in renowned speakers from around the globe for future MAREC or realtor conventions.

An agreement was signed on Saturday between the MIEA and US-based National Association of Realtors (NAR) for the provision of a Certified Residential Specialist (CRS) course for Malaysian realtors.

“The NAR has other relevant courses as well but we are going to concentrate first on the CRS. There will be other education development courses in the pipeline and we will introduce them stage by stage,” said Wong.

MAREC organising chairman Loke Fu Wah said the local property sector was showing promising signs of recovery.

“The market reached its bottom last year and is picking up,” he said.

Wong said the property market was moving and buyers were slowly coming back.

“Last year, people held back their purchasers and adopted a wait-and-see approach,” she said, adding that the residential sub-sector would be the biggest driver of growth for the property market this year.

Wong also said the Government’s recent amendment of the (5%) real property gains tax (RPGT), which would now only apply to properties sold within five years from their date of purchase, was a good call.

The Government had previously wanted to impose the RPGT across the board, irrespective of the number of years of ownership, as announced in Budget 2010.

The two-day MAREC was officiated by Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah. Themed The Millionaire Real Estate Agent, it featured 20 speakers from the United States, Singapore and Malaysia, with The Star being one of the sponsors.

In his keynote address, Ahmad Husni said he was optimistic about the outlook for the local property sector as the affordability of local residential properties was at an “all-time best”.

“Affordability has never been better. Our banks have continued to support the market with very attractive mortgage rates at a base lending rate of around minus 2% and in some cases, below 2.4%.

“This translates to the fact that interest rates that are being charged are only marginally over 3%, not much higher than the current fixed deposit rates of 2% to 2.5%.”

Ahmad Husni also said the property market was one of the most reliable barometers of the health of any economy.

He is confident Malaysia will achieve its target of a 5% gross domestic product growth for 2010.

By The Star

Espio to invest RM60m in Sibu project

A leading property development company in Miri, Sarawak, Espio Enterprise Sdn Bhd, will invest an initial RM60 million to develop phase one of a mixed development project in Sibu, Sarawak.

Managing director Datuk David Goh Kieng Ping said the Swan City project, to be developed on a 7ha site, will comprise over 100 residential units and commercial buildings to be completed within three years.

"However, its biggest component will be the construction of the state's first and biggest purpose built hypermall for the Giant International Retail Group which will have a built-up area of 1.2ha.

The hypermall is expected to be ready and operational by end of next year.
"This is going to cost us RM30 million," he told reporters in Sibu after the ground-breaking ceremony for the project by Sarawak Environment and Public Health Minister Datuk Seri Wong Soon Koh and Deputy Transport Minister Datuk Robert Lau Hoi Chew.

The marketing director for Giant Supermarket Ho Mun Hao, said there are currently four Giant supermarkets in the state which were a big boost to local farmers as it helps them to sell their produce.

Meanwhile, Goh said the company is now entering the state central region because of its huge potential, given the location of the Sarawak Corridor of Renewal Energy.

"Sibu is going to be the next city in the state after Kuching and Miri, probably in about 15 years or less from now.

"We want to contribute to its development. This Sun City project is one initiative to Sibu's physical and human resource development," he said.

Goh said due to its central location, Sibu, with a population of one million people, will become the centre for shopping.

The group is also undertaking the multi-million ringgit Taman Tunku Housing project in Miri.

By Bernama