Sunrise prefers markets with fewer home players

KUALA LUMPUR: Sunrise Bhd wants to expand into markets where there aren’t many Malaysian developers, said executive chairman Datuk Tong Kooi Ong.

“Every Tom, Dick and Harry has gone to Vietnam. There are (other) countries that have a lot of potential ... where there aren’t many Malaysian players,” he said at an analyst briefing yesterday when asked about the potential of venturing into Vietnam.

Tong said countries such as Singapore and China were potential markets. “We’re looking at China but so far there is nothing yet. Singapore is a possibility. The pricing there is fantastic. However, we haven’t had good opportunities but we’re looking,” he said.

Tong said while the Mont’Kiara area in Kuala Lumpur would continue to be a growth focus for the company, he noted the importance of having a presence in more than one location.

“It’s difficult to grow in just one location. You need to move beyond your (key) geographical location if you want to double-up (your earnings).”

Sunrise has an on-going project in Vancouver, Canada which it hopes to launch in the second half of 2010, subject to market conditions.

The condominium project with a gross development value of RM1.13bil, would be launched in two phases three years apart, said Tong.

He also said it was premature to disclose if there would be future tie-ups with Sime Darby Bhd to develop other projects.

“Neither party has contemplated another joint venture (JV) outside of Bukit Jelutong. But we’re both hoping there will be other JVs that can benefit each other,” Tong said.

Earlier this week, Sunrise and Sime Darby announced they would jointly develop a RM1bil integrated commercial property project in Bukit Jelutong, Selangor.

Tong said there was a need to have a commercial development within the area to give it “more life.” “It (the project) will accelerate development for Sime Darby and expand our reach there,” he said.

Tong also said the company was targeting to reduce its gearing to zero within the next four years.

He said potential cashflow from unbilled sales of existing and future projects would help reduce its gearing going forward. The company’s unbilled sales stood at RM714mil as at Dec 31, 2009.

Sunrise’s net debt declined to RM377mil in December from RM445.7mil six months earlier. Net gearing also improved to 35.7% in December from 45.7% in June.

“Barring major land acquisitions, we will continue to work towards reducing gearing, but near-term gearing may increase due to construction funding for our 28 Mont’Kiara (MK28) and Canada projects,” said Tong.

He added that Sunrise would also be “stingy” with dividends to achieve its zero-gearing target.

Sunrise has received 150 bookings for its MK28 high-rise residential development since it was soft launched in December. The project comprises 460 units with a GDV of RM990mil. “The success of MK28 is the most critical factor for the company in the next six months. Further ahead, the success of the launch of Solaris Towers is also critical,” said Tong.

Sunrise will be launching the Solaris Towers project in Jalan Sultan Ismail in the first half of the year.

Meanwhile, Sunrise’s net profit for the second quarter ended Dec 31 dipped 34% to RM34.52mil due to unbilled sales and a delay in property launches. Revenue also dropped 22% to RM158.32mil. The company did not declare any dividends for the quarter.

By The Star

Sunrise current income sustainable: Analysts

Property analysts are optimistic Sunrise Bhd will sustain its current earnings level into the financial year ending June 31, 2011, given the number of projects in the pipeline.

OSK Investment Research said the company's near-term earnings would receive a boost from its current unbilled sales of RM714.1 million and from the sale of the RM990 million 28 Mont' Kiara (MK28) condominium project.

The gross development value of Solaris Tower, to be launched in March or April, was estimated at RM528 million.

"Other mid-term projects include its 50:50 joint venture with Sime Darby on the RM1.0 billion Bukit Jelutong development project which is likely to kick-in by FY11 and the Canadian build-then-sell project by mid-FY11, both of which we have yet to account into our forecasts.

"Tweaking some assumptions on completion rates, particularly for 11 Mont' Kiara condominums, we are lowering our financial year ending June 31, 2010 by some five per cent while FY11 is revised upward by some 25 per cent," it said today.

Sunrise registered a 13 per cent drop in net profit to RM71.79 million for the first-half ended Dec 31, 2009 from RM82.58 million posted in the same period of 2008.

Turnover declined to RM348.59 million, for the period reviewed, from RM401.35 million previously.

OSK said Sunrise's first-half annualised net profit was 18 per cent below its full-year expectation and 7.3 per cent below consensus estimate.

Sharing the same view, ECM Libra Investment Research, in a separate statement, said the property developer's first-half results came within house but were below market expectation.

It said Sunrise's net profit achieved 47 per cent and 44 per cent of house and consensus estimates respectively.

" We tweak our earnings for FY10-FY12 by 0.8 per cent to 2.9 per cent to account for better than expected sales of MK28 as well as higher selling price," it added.

By Bernama

Sunrise H1 profit falls 13pc to RM72m

Property developer Sunrise Bhd saw its net profit fall 13 per cent to RM71.8 million for the half-year ended December 31 2009.

Its executive chairman Tong Kooi Ong said the reason for its net profit decline was because the previous corresponding period had included a one-off gain from the sale of office space in Plaza Mont' Kiara and an Australian asset.

"Excluding these one-off gains, the company's underlying net profit for the current period would have risen 14 per cent year-on-year," he said during a briefing on company results in Kuala Lumpur yesterday.

Tong expects Sunrise to sustain its performance for the second half of its present fiscal year.

"Honestly, I don't think we will do a lot better but we will definitely not do any worse," he said.
Tong added that interest rates are likely to remain low, while loan approvals for mortgages will remain strong and building material prices to stay stable.

The company will continue to reduce its gearing, which has improved to 35.7 per cent in December 31 2009, from 45.7 per cent in June 30 2009.

For the July-December 2009 period, Sunrise's revenue declined 13 per cent to RM348.59 million due to the completion of its Meridin, Mon't Kiara 10 and part of Solaris Dutamas properties.

Its unbilled sales as at December 31 2009 was RM714 million.

By Business Times

Development of i-City enters 2nd phase this year

The second phase of I-Berhad's integrated commercial development in Shah Alam, Selangor, is expected to kick off later this year, its top executive said.

Chief executive officer Eu Hong Chew said the phase covering 3.64ha has a gross development value (GDV) of over RM150 million.

It will offer between 300,000 sq ft and 400,000 sq ft of office space. The construction cost will be between RM30 million and RM40 million and completion is due in 2013.

"The idea behind phase two will be to support (a) technopreneur campus concept," Eu told reporters after a visit by former Prime Minister Tun Dr Mahathir Mohamad to i-City yesterday.

i-City is a 29ha RM2 billion project that boasts broadband speed of 20Mbps, with fibre optics network and a back-up power supply.
The first phase, comprising 6.1ha of land with 500,000 sq ft of office space, is now 60 per cent occupied.

I-Bhd plans to complete the Cybercentre office suites, also known as CityWalk South, during the second phase.

It plans to build office towers and a one million sq ft shopping mall in future phases as well.

According to Eu, i-City aims to attract Silicon Valley based companies that are looking to expand overseas.

Apart from i-City having a technologically advanced state-of-the-art infrastructure, the Selangor state government also will focus on other elements of the Silicon Valley-like ecosystem.

This includes developing the entrepreneurial talent pool, organising programmes to connect entrepreneurs with venture capital partners and getting universities to play a higher level of support for industries.

"They have the business model and technology but may not be relevant in this market. So, they are looking for joint venture partners to localise for them so that when they go for an initial public offering their value will be higher," he said.



By Business Times

Malaysia property market to ride on new wave of interest

CB RICHARD Ellis (Malaysia) Sdn Bhd (CBRE), a real estate services company, expects the number of property transactions in the country to improve this year, thanks to a new wave of interest from local and foreign institutional funds.

Executive chairman Christopher Boyd said there is strong buying interest from Singaporean, Hong Kong, Korean and Arab investors, looking for new office buildings in the Klang Valley and Penang.

"Interest comes from as far as Ireland. They (investors) are core funds looking for completed and well-tenanted buildings in recognised locations. This augurs well for the rental market," Boyd said after a ceremony to mark the change of name of Regroup Associates to CBRE in Kuala Lumpur yesterday.

He said there is a possibility that the value of property transactions in the Klang Valley will exceed RM4 billion this year as it expects more than 30 major deals.
There were 28 major transactions worth some RM3.5 billion in the second half of 2009, involving purchase of land, office buildings and residential towers.

A bulk of the buyers were local funds, including the Employees Provident Fund and Permodalan Nasional Bhd, and developers eyeing expansion.

"We have a few investors from overseas who are looking at some property deals. They are international funds with huge capital to spend," Boyd said.

Boyd also warned property developers to be cautious over the next six to nine months of over-launching their commercial projects as there is a strong possibility of a double dip in the West in the second half of 2010, which may impact the Southeast Asian market.

"Developers will be tempted to think it's all over but it's too soon to think that. While we don't anticipate a crash, we are also not expecting any major upturn. But overall, we expect the market here to be stable in terms of capital value and rental value," Boyd said.

He added that said average rental rates of commercial space in Kuala Lumpur remains stable at RM6 to RM6.50 per sq ft, although it is 15 per cent lower from a year ago. Rentals for Grade A offices stood at RM7 per sq ft as at the end of 2009.

Office capital values are expected to remain steady throughout 2010 at between RM800 and RM1,200 per sq ft.

Earlier, Regroup changed its name to CBRE after signing an affiliate agreement last December with CB Richard Ellis Group Inc, a US-based real estate corporation.

By Business Times

Mah Sing eyes RM1b in 2010 property sales

Malaysia’s Mah Sing Group Bhd aims for property sales to climb 39 per cent to RM1 billion (US$292 million) this year as an economic recovery spurs home purchases in the Southeast Asian nation.

The nation’s fifth-largest property developer sold RM720 million worth of properties last year, beating a target of RM453 million, managing director Leong Hoy Kum said in an interview in Kuala Lumpur yesterday. The impact of a possible increase in interest rates on property transaction will likely be minimal, he said.

“This year will be a good year; our engine is going to ramp up again,” Leong said.

Loans approved for Malaysian home purchases rose to RM7.3 billion in November, the highest recorded in 2009, central bank data shows. Malaysia’s central bank said on Jan. 26 borrowing costs can’t be kept “too low” for too long as growth strengthens, signaling it may raise interest rates sooner than some economists forecast.
“The tone of the central bank has raised concern there will be a slowdown in demand for loans,” said Ang Kok Heng, who oversees US$150 million of investments as chief investment officer at Phillip Capital Management Sdn Bhd. He said he doesn’t expect an increase in rates this year and property demand will probably rise.

Mah Sing spent RM323 million buying 184 acres of land last year to take advantage of “reasonable” asset prices when the Southeast Asian nation slipped into its first recession in a decade. The company is betting that an economic recovery spurred by RM67 billion in government stimulus measures will increase demand for new homes and offices.

‘Good Year’

Mah Sing’s total revenue surged almost fivefold in the past six years to a record RM1.2 billion in 2008. Third-quarter profit rose 42 per cent to RM23.5 million from a year earlier.

Shares of the Kuala Lumpur-based company climbed 15 per cent last year, falling short of the 45 per cent in the benchmark FTSE Bursa Malaysia KLCI Index.

The company will this year begin selling nine property projects with a gross development value of RM3.4 billion, Leong said.

The company aims to expand in markets including Vietnam, Australia and Singapore. Mah Sing in December agreed to form a venture with Danlong Realty (Beijing) Ltd. to develop a property on 87.31 acres in the city of Changzhou in China’s Jiangsu province, which will cost about US$620 million.

The estimated sales value of the project, of which Mah Sing owns 51 per cent, is more than RM3 billion, Leong said.

“As long as you are targeting the real market demand and you don’t go to areas like Beijing or Shanghai” the market is not in a bubble, he said.

The company is seeking land acquisitions and is preparing a RM1 billion “war-chest” for purchases in Malaysia and overseas, he said.

Leong said he wants to boost Mah Sing’s market value of about RM1.3 billion to RM5 billion within a couple of years. That would exceed the current worth of SP Setia Bhd, the country’s biggest developer by value.

By Bloomberg

Sime Darby Prop eyes more tie-ups

PETALING JAYA: Sime Darby Property Bhd is in discussions with a few potential partners for possible joint ventures (JV) to develop its vast land bank in the country.

The company has a land bank of 37,000 acres, of which 8,000 acres are in the Guthrie Corridor, according to managing director Datuk Tunku Badlishah Tunku Annuar.

“It is the company’s strategy to team up with strategic partners to develop the land bank.

“Besides the advantage of sharing the expertise and knowledge, it will also allow us to realise the value of our land in a shorter time,” Tunku Badlishah told StarBiz yesterday.

He said the company’s first JV was with the Brunsfield group.

The 60:40 JV, with Sime Darby Property holding 60%, was established in 2006.

It has undertaken three projects to date – the RM250mil Subang Avenue, the RM550mil Oasis Damansara and the redevelopment of Oyster Cove, one of the most exclusive waterfront resorts on Australia’s Gold Coast.

On Tuesday, Sime Darby Property signed a 50:50 JV agreement with Sunrise Bhd to undertake a RM1bil integrated commercial property project in Bukit Jelutong, Selangor.

To be launched and developed in five phases from 2011, the commercial development on 21 acres will have a total built-up area of 2.7 million sq ft, consisting of retail lots, shop offices, office suites and serviced apartments.

On the latest JV, Tunku Badlishah said the partnership would pave the way for the sharing of expertise and know-how between Sunrise and Sime Darby Property.

“We see a strong synergistic alliance with Sunrise. While we have successfully build the residential component, Bukit Jelutong still lacks in its commercial offering.

“Sunrise’s expertise in commercial development will come in handy to further add value to the whole project,” he added.

Launched in 1996, Bukit Jelutong is an upscale residential enclave in Shah Alam which is home to 25,000 residents now.

ECM Libra property analyst Bernard Ching noted that while the existing township consisted mainly of terrace, semi-detached and bungalows, there was no significant high-rise residential and commercial development.

“As such, we believe there is a captive market for the product offerings proposed by the JV.

“Sunrise’s expertise in commercial development and high-rise residential projects is a good fit to bring in. It is very likely that the Bukit Jelutong project will be lifestyle-oriented, which is still largely absent in Shah Alam,” Ching said.

“With this tie-up, Sunrise will have the opportunity to replicate its success in developing Mont Kiara in another prime location,” he added.

Hwang DBS Vickers Research property analyst Yee Mei Hui said the JV would be a win-win situation for both partners as they could tap on each other’s strength and expertise.

“If it turns out well, this may be the start of more partnerships between Sime Darby Property and other property players,” she added.

By The Star

CBRE sees office rentals in Malaysia stabilising in H1

KUALA LUMPUR: CB Richard Ellis Malaysia Sdn Bhd (CBRE) expects office rentals in Malaysia to stabilise in the first half of 2010, barring any major economic setbacks.

“Office rentals in Kuala Lumpur peaked at the end of the fourth quarter of 2008 and softened by about 15% as at the end of the fourth quarter of 2009.

“Rentals for Grade A offices stood at RM7 per sq ft at the end of 2009, similar to the first quarter of 2009 level,” according to a special report by CBRE Research.

Vacancies and rentals began to level out in the fourth quarter of 2009 as was witnessed in comparable cities around Asia as the market downcycle approached its end and leasing activity gradually picked up across the region.

Despite the addition of 4.76 million sq ft of new supply from 14 office buildings completed in 2009, vacancy rates stabilised at 13% by year-end as the bulk of this new supply was non-speculative and had been significantly pre-let prior to completion.

New supply set to come on stream over the next three years will continue to make for a highly competitive leasing environment and further improve the city’s appeal as a location in which to do business.

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

Executive chairman Chris Boyd said the combination of modern infrastructure, quality facilities and comparatively cheap rentals made Kuala Lumpur a highly attractive location for any prospective multinational considering a move.

“Kuala Lumpur offers a consistent cost advantage which is not a flash in the pan, as growth in the supply of new buildings serves to smooth any potential fluctuations in rental levels,” he said.

CBRE feels that the market has not yet experienced the full impact of the last budget announcements which further liberalised the acquisition of property investments by foreigners.

“With no requirements for local equity, we expect to see an increasing number of overseas institutions seeking investment grade property in Malaysia in 2010 and beyond,” said executive director Paul Khong.

“Kuala Lumpur offers a wide choice of buildings and locations at rentals which are going to remain extremely competitive in the foreseeable future,” added managing director Allan Soo.

By The Star

Ivory seeks investor for planned hotel

A 352-room hotel, an exhibition and convention centre along with commercial lots will form the third and fourth phases of the RM1.1 billion Penang Times Square development in Penang.

The project, which is being carried out by Ivory Properties Group, will also feature a cineplex and luxury condominiums, its executive director Datuk Seri Nazir Ariff Mushir Ariff said.

"We are talking to several parties and hope to sign up with an investor for the hotel by the end of the year," he told a media briefing in Penang yesterday.

Nazir said it will either get the investor to buy up the 325-room hotel, or get a long-term operator to manage it. "The proposed four- or five-star hotel will occupy 0.96ha of land and we intend for it to house resort and spa facilities and services."

The property developer, which is awaiting final approval from the Securities Commission for an initial public offering, will launch the shopping mall portion of Penang Times Square on February 6 under the first phase.

On the proposed exhibition and convention centre which comes under the third phase of the project and set to break ground by 2012, Nazir said: "Our plans are for it to occupy 80,000 sq ft, but if necessary we can expand it up to 150,000 sq ft and this will give us a pillarless convention hall.

"We also hope that the hotel operator will be able to run the convention centre in order to ensure that high standards are maintained."

Penang Times Square sits on 5.2ha site where one of the country's oldest smelting operations - Escoy Smelting Sdn Bhd - once stood.

About 0.8ha has been earmarked by Ivory Properties for an urban open space and heritage museum.

On the shopping mall, Nazir said that after Chinese New Year, the retail outlet should be 65 per cent occupied.

Its anchor tenant is Sunshine City, which belongs to the Sui Wah group of firms.

"Apart from Maybank, which is moving in to the mall, new tenants include a travel agency and an amusement centre," Nazir added.

By Business Times

Sunrise upbeat on prospects with locked-in unbilled sales

KUALA LUMPUR: SUNRISE BHD posted net profit of RM34.52 million for the second quarter (2Q) ended Dec 31, 2009 and is upbeat for the remaining second half due to the locked-in unbilled sales of RM714.1 million as at Dec 31, 2009.

It said the board was confident of the company's prospects in the current financial year ending June 30, 2010 due to these unbilled sales while it also had in the pipeline other projects ready to be launched.

"Profits from these future billings would be recognized substantially over the current and the following financial year," it said on Thursday, Jan 28, when announcing its results. Revenue was RM158.32 million in 2Q while earnings per share were 6.97 sen.

It added the company recently soft?launched 28 Mont'Kiara, a luxury condominium development in Mont'Kiara. It said response was positive with bookings received for about 200 units.

"The company has a pipeline of other projects ready to be launched, including a commercial development in Kuala Lumpur, depending on market conditions. Sales from 28 Mont'Kiara and the new planned projects will sustain the company's longer?term profits," it said.

For the first half ended Dec 31, 2009, net profit was RM71.78 million, which was 13% lower than the RM82.48 million a year ago which had included a one-off gain of RM19.4 million from the sale of office space in Plaza Mont'Kiara and an Australian asset.

"Excluding these one?off gains, the company's underlying net profit for the current period would have risen 14% year-on-year," it said. Revenue was RM348.58 million compared with RM401.35 million a year ago.

Sunrise said its earnings were sustained by progress billings for its ongoing developments, namely 10 Mont'Kiara, 11 Mont'Kiara and Solaris Dutamas, as well as strong sales of the completed Mont'Kiara Residence bungalows.

By The EDGE Malaysia

Sunway City said to have hired coordinators for REIT listing

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 yesterday.

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 (US$1 = RM3., said last year that it may revive the plan to float its property assets in 2010 depending on the recovery in markets.

By Reuters

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