Paramount to expand landbank

Property developer Paramount Corp Bhd said part of the proceeds from its 20 per cent stake sale in Jerneh Insurance Bhd will be used to buy land in the Klang Valley.



"Landbank is an important part of our strategic plan. We just bought 20ha in Cyberjaya, Selangor because of the location. We buy where there is success," managing director and chief executive officer Ong Keng Siew said.

Ong said it is selling its stake in Jerneh to focus on property development and education, which will continue to contribute 70:30 to its bottom line.

"It is very glamorous to diversify but to play the diversification game is not very attractive in the eyes of investors. We have a few options for the proceeds from the stake sale and it may include giving special dividends to shareholders," Ong said.
Paramount, with three ongoing projects, has RM207 million cash in hand and 390ha.

The company is planning to launch some RM2 billion worth of properties this year and next, Ong said after the company's shareholders meeting in Subang Jaya, Selangor yesterday.

Paramount plans to launch a 200ha mixed development project, dubbed "Banyan Hills" in Sg Petani, Kedah by the fourth quarter of this year.

Next year, it plans to start building the new KDU College campus and a mixed development on 8.7ha in Glenmarie, Shah Alam.

"We are relocating our branch campus in Section 13, Petaling Jaya to Glenmarie. We will redevelop the 2.1ha site into a high-end residential and commercial project in the near future," Ong said.

As for the land in Cyberjaya, Paramount plans to build mid-to high-end residential properties worth RM530 million, in two phases, starting next year.

Ong also said the company will hive off its loss-making English language centre in China.

It is talking to a buyer and expects to conclude the deal by the end of this year. Ong did not say how much it is selling the centre for.

"There is a lot to do in Malaysia in education. While the sector is tough as there are many players, we position ourselves as a quality education provider.

"We plan to build more campuses and international schools and are looking at the Iskandar Development Region in Johor. We want to increase our existing 8,000 student population," he said.

By Business Times

MRCB to buy more land in Klang Valley

KUALA LUMPUR: Malaysian Resources Corp Bhd’s (MRCB) chief executive officer Mohamed Razeek Hussain said the group will use part of the cash raised from recent share sale exercise to buy small pieces of prime land around Klang Valley, while keeping an eye for opportunities to participate in upcoming government projects.

These includes a massive Government development plan in Sungai Buloh on a joint- venture with the main shareholder the Employees Provident Fund (EPF).


From left: MRCB executive director Datuk Ahmad Zaki Zahid, Mohamed Razeek Hussain and MRCB chief financial officer, Chong Chin Ann after the AGM

“We will be looking to participate (in the Sungai Buloh project), but there’s still no award from EPF to MRCB,” Razeek told reporters after the group’s AGM yesterday.

MRCB’s chairman Tan Sri Azlan Zainol, who is also EPF’s chief, however, did not attend the post-AGM press conference.

The pension fund had been buying shares in MRCB from the open market after its takeover offer at RM1.50 a piece was rejected by minority shareholders in late March.

Latest filing with Bursa Malaysia showed EPF as the single largest shareholder in MRCB with a 40.9% stake.

Shares in MRCB had risen to as high as RM1.69 on April 2 on high hopes it would benefit from the Government’s intention to unlock the values of its landbank around Klang Valley. The stock was up 2 sen to close at RM1.50 yesterday.

At the press conference yesterday, Razeek said the group’s might look beyond local shores in building up its business.

“We are always on the lookout for new opportunities, locally or abroad, but we will only go into our areas of core competency,” he said.

The group is building an apartment block in Melbourne with gross development value of A$57mil.

Razeek said MRCB was currently bidding for projects estimated to total RM600mil at home to replenish its engineering and construction order book of RM3bil.

“We have to go with some degree of optimism,” he said, adding that the amount tendered excludes in-house projects at KL Sentral.

This excludes upcoming projects such as the Light Rail Transit (LRT) expansion, where MRCB is one of the contractors already pre-qualified for the project.

On his outlook for the current year ending Dec 31, 2010 (FY10), Razeek said the group expected revenue to top RM1bil for the first time this year, with “reasonable growth” in profits from last year.

In FY09, MRCB return to the black with a net profit of RM34.6mil on sales of RM922mil.

By The Star

MRCB upbeat on winning contracts worth RM250m

MALAYSIAN Resources Corp Bhd (MRCB) hopes to win some RM250 million worth of contracts this year from RM600 million worth of projects it tendered for in Malaysia.

Its chief executive officer Mohamed Razeek Hussain said the bids, for its construction division, are for jobs in the Iskandar region in Johor, Sabah, Kuantan and in Gombak, Kuala Lumpur.

Razeek, who was speaking to reporters following the company's annual general meeting in Kuala Lumpur yesterday, expects a decision on the award within the next three months.

"We have been shortlisted and we stand a good chance (to win) for a hospital project in Sabah," he said, declining to reveal the amount.

On participation in the 1,214ha land project in Sungai Buloh which is being developed by MRCB's controlling shareholder the Employees Provident Fund (EPF) and the government, Razeek said that no tender have been called yet.

Similarly, he said that no tender had been called for the RM7 billion extension of the light rail transit line in the Klang Valley. MRCB Engineering has been prequalified as main contractors for facilities work and subcontractor for fabrication and delivery of segmental box girder.

In the current financial year ending December 31 2010, MRCB expects to cross the RM1 billion revenue mark and make a significant improvement in its profitability this year, as all business segments grow.

In 2009, it made RM921.61 million in revenue and a net profit of RM37.48 million.

Its current construction order book stands at RM3 billion while its prized KL Sentral development project is expected to last until 2016.

"Most of our projects are ending in 2011 and 2012," he said.

One such project where it will enjoy recurring income is the 8.1km RM1 billion Eastern Dispersal Link (EDL) that will link the Sultan Iskandar Customs, Immigration and Quarantine (CIQ) to the PLUS highway. The link will be ready in September 2011 and toll collection will start in 2012.

The Duta-Ulu Kelang Expressway (DUKE) will start to contribute positively in the next three to four years.

By Business Times

MRCB: Prime land deals in pipeline

MALAYSIAN Resources Corp Bhd (MRCB) plans to buy its first piece of land in the Kuala Lumpur City Centre and it could pay as much as RM170 million for the asset.

If the deal happens, MRCB would start its maiden project in the city centre.

Chief executive officer Mohamed Razeek Hussain said it has identified a piece of land measuring 0.45ha to 0.9ha, located a stone's throw away from the Petronas twin towers.

"We have identified the land near KLCC ... we can get a good price below what's in the market," he said. The going market rate for land in the area is around RM2,000 to RM2,500 per sq ft.
"It is work in progress, we are talking to the landowners and we hope to conclude it as soon as possible," Mohamed said.

While he did not say where the land is, sources say it is located on Jalan Kia Peng and is slated for development of high-end residences.

MRCB also plans to buy an 8ha plot in the Klang Valley, outside the KLCC.

By Business Times

Sunway REIT to be Bursa’s largest

PETALING JAYA: Sunway Real Estate Investment Trust (REIT), which is slated for listing on July 8 on the main board of Bursa Malaysia, is set to become the largest REIT on the local stock exchange with a fund size of 2.78 billion units.

However, according to a report by OSK Research, Sunway REIT’s initial public offering (IPO) would be at a premium to other Malaysia REITs.

“Based on the Sunway REIT’s net asset value per unit (NAV/unit) of 97 sen upon listing, its price over NAV (P/NAV) was estimated to be at about 1x (based on the assumed IPO price of RM1/unit for the institutional offering).

“This is about what the other REITs are currently trading at on average,” said the report.

The REITs’ dividend yield was only expected at about 6.7% (based on forecast dividend per unit (DPU) of 6.7 sen), which was below the average 8.5% for other REITs, it added.


It said this could imply that Sunway City (SunCity) would be selling the properties to the REIT at a high valuation benchmark.

“Having said that, the low yield offered by Sunway REIT and the premium to be paid for those properties could be justifiable given that the trust will be the largest in Malaysia, with the largest free float of about RM1.6bil vis-à-vis any given REITs, and the unique prospects of those properties, which offer a relatively more defensive investment and yet potentially attractive long-term growth,” the report noted.

It added that Sunway REIT might potentially attract certain classes of investors with a defensive investment strategy, such as pension and insurance funds. “This has been proven by the fact that Sunway REIT very recently secured four large cornerstone investors (at 98 sen/unit) which collectively hold about 14% stake in the trust,” it said.

The investors are a Singapore sovereign wealth fund, the Employees Provident Fund, Permodalan Nasional Bhd and Great Eastern.

The report said a trading buy opportunity in SunCity with an adjusted price target of RM4.52 would be the biggest beneficiary of the deal if the properties were to be disposed off at such valuations.

“Based on conservative estimates, this will add a further 69.8 sen/share (or a maximum 99 sen, depending on the response to the book-building process for the institutional offering) to SunCity’s net asset, bringing it to about RM5.32/share,” it said.

It further added that pegging this against 0.85x to 0.90x (P/NTA), which is the average that its peers were currently trading at, the reseach house estimated that SunCity might likely trade in the range of RM4.52 to RM4.79 as the listing of Sunway REIT got closer to realisation.

HwangDBS Vickers Research said in a report that Sunway REIT’s yield looked “rich” at 6.9% versus the sector’s 8.5%, while rising interest rate environment could force yields higher.

However, the report said, the REIT should help SunCity unlock its investment properties’ value and lead to more efficient allocation of resources to boost return on average asset.

The report maintained a “buy” call on SunCity and target price of RM4.70, assuming no discount for property investment and 30% discount for property development.

By The Star

Axis-REIT to inject more assets

KUALA LUMPUR: Axis Real Estate Investment Trust (Axis-REIT) will acquire a parcel of leasehold land, and industrial buildings, in Kuala Langat, Selangor, from Corporate Landmarks Sdn Bhd for RM85mil.

It will also purchase leasehold land with buildings in Petaling Jaya from Dazzling Township Sdn Bhd for RM49mil.

Axis-REIT also plans to undertake a proposed placement of up to 68.820 million new units, representing about 22.4% of the existing units in circulation, at a price to be determined later.

It also proposes to increase its approved fund size to a maximum of 375.901 million units from 307.081 million, currently.

By Bernama

Developers: Foreign labour cut could lead to delays and higher property prices

KUALA LUMPUR: Developers are concerned that the Government’s move to reduce the number of foreign workers in the country will result in project delays, leading to possible price increases in property.

Almost 100% of construction workers in the country are foreigners, according to International Real Estate Federation (FIABCI) Malaysia president Datuk Richard Fong.


Datuk Richard Fong ... ‘We will have the same problem again.’

“We have already seen the effect of tightening labour market five years ago when workers were sent home on an amnesty programme. We will have the same problem again,” he said at a press conference here after a talk by FIABCI World president (2010/2011) Enrico Campagnoli entitled Fiabci in front of Financial Crisis.

He said this resulted in delays in completion of projects which allowed buyers to claim penalties from developers for late delivery.

“When the workers finally returned, we had to retrain them because they were unskilled. So, it is a cycle which keeps repeating itself. The workers return but the issue that cropped up was quality, which in turn led to high rates of defects in the properties,” Fong, who is also Glomac Bhd group executive vice-chairman, said.

FIABCI World President Datuk Alan Tong said “with reference to reducing foreign workers, before the authorities come up with new rules, it would be prudent for more dialogue between the Government and the private sector to facilitate a better understanding of the sector, which today, depends almost 100% on foreign labour.”

“If the authorities want to reduce the number of foreign workers in the country, they must first think of the alternatives. Notwithstanding that, we laud the Government’s proposed plan to wean the country off subsidies,” added Tong, who is also Bukit Kiara Properties (BKP) group chairman.

Tong’s views are shared by See Hoy Chan Holdings group director Datuk Teo Chiang Kok, the developer for Bandar Utama township. Teo, who is also the first vice-chairman of the FIABCI Asia-Pacific Secretariat, said there must be safety nets for the lower income groups with the removal of subsidies.

“Do not look at subsidies as purely a setback suffered by consumers because flour and sugar prices are going to go up. The removal of subsidies also involves water, electricity and petrol which will impact the housing sector in no small way. We have to look at the bigger picture,” Teo said. Earlier, Campagnoli said the debt situation in the euro zone would affect the property sector in different ways because the countries have different economic strengths.

By The Star

Sunway REIT set for July 8 listing

Malaysia's largest real estate investment trust, Sunway REIT, will finally be listed on July 8 2010, some five-and-a-half years after the plan was first announced.

With properties valued at RM2.6 billion to be injected into it, Sunway REIT has secured four cornerstone investors who will together buy 14 per cent of the 2.78 billion units to be listed.

They include Singapore's investment firm GIC, the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB) and Great Eastern Life Assurance (Malaysia) Bhd.

Cornerstone investors usually participate in large initial public offerings (IPOs) and unlike institutional investors, they have a confirmed allocation.

Cornerstone investors are said to be more common in Hong Kong and Singapore. It is understood that cornerstone investors emerged during the Maxis Bhd IPO.
"Cornerstone investors have become a trend. I don't think Sunway REIT needs the cornerstone investors but it adds good gloss over the whole transaction," a banker said.

"Sunway REIT have these cornerstone investors to kick off the momentum that the big blue-chip investors are keen in this REIT and this also adds credibility to the REIT," he said.

The four cornerstone investors will buy a total of 376 million units. They will pay the lower of the institutional price and 98 sen.

In total, there will be some 1.65 billion units for public subscription, of which 134 million are for retail investors and 1.52 billion for institutional investors.

Based on the indicative retail price of 97 sen, the total market capitalisation of Sunway REIT upon listing is estimated at RM2.6 billion.

Properties that will form part of the REIT include the Sunway Pyramid Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel and Sunway Hotel Seberang Jaya.

Its office properties will include Menara Sunway and Sunway Tower.

By Business Times

EPF, PNB among Sunway REIT cornerstone investors

KUALA LUMPUR: Malaysian property developer Sunway City Bhd has secured four cornerstone investors who will buy 14% of the roughly US$500mil (RM1.65bil) initial public offering of its real estate investment trust (REIT).

The cornerstone investors are the Employees Provident Fund, state investment company Permodalan Nasional Bhd, the Government of Singapore Investment Corp Pte Ltd and insurer Great Eastern Life Assurance (M) Bhd, the company said in its draft prospectus.

The cornerstone investors will take up 376 million units at a price which is the lower of the institutional price and 98 sen each. The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia’s largest REIT when it is listed in the third quarter of this year.

It will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said in May.

The issue price of the Sunway REIT will be determined after a book-building process which is expected to close on June 24, according to the prospectus.

RHB Investment Bank and Credit Suisse are the joint global coordinators. The banks, along with Maybank Investment Bank, HSBC, JP Morgan and CIMB, are joint bookrunners.

Sunway City said last month it would receive RM2.7bil in cash and about 1 billion units in the REIT for the eight properties it will inject into Sunway REIT.

The properties, which comprise of shopping malls, office towers and hotels, have a combined market value of about RM3.7bil. The listing is targetted for July 8.

By Reuters

Hong Leong plans more Guoman Hotels in China

SHANGHAI: Hong Leong Group (HLG) hopes to open more of its signature Guoman Hotels in China after launching its flagship here.

Guocoland China group managing director Violet Lee said it was eyeing to have five Guoman Hotels in China in the next five years.

Guocoland is Hong Leong Group’s property development and investment arm in China.

“Our hope is to have five – in Shanghai, Beijing which is expected to be ready by next year, Nanjing, Tianjin and Chengdu.

“We are still on the lookout for opportunities to develop more Guoman Hotels in Beijing and Shanghai as the huge population in these two cities are capable of supporting more than one in each city,” she told reporters here on Sunday.

The launch of the first Guoman Hotel in China on Saturday was witnessed by the group’s executive chairman Tan Sri Quek Leng Chan. The 442-room hotel cost around USD80mil.

The renowned hotel brand from Britain already has four establishments in central London – the Royal Horseguards, the Cumberland, the Tower and Charing Cross.

Both the Guoman Hotels in Beijing and Shanghai are located within a mixed development measuring some 600,000 and 500,000 square metres respectively.

Besides the hotels, the development – termed Guoson Centre – also comprises shopping malls, a transportation hub, residences, office blocks and SOHO buildings.

The entire Guoson development in the northwestern Putuo district Shanghai cost some USD600mil.

Lee said the group was confident that Guoman Hotel would find its place among the crowded marketplace in both Beijing and Shanghai.

“The hotels there are located within or near transportation hubs,” she said, adding that Guoman hoped to capture the niche market for businessmen and diplomats who were frequent travellers.

She said the launch was also opportune in view of the city hosting the World Expo, which would run from May until end of September.

The expo was expected to bring in 70 million visitors to Shanghai, she said, adding that Guoman Hotel Shanghai projected a 70% occupancy rate during these period.

By The Star

Paramount unit buys land for mixed project

PARAMOUNT Corp Bhd’s subsidiary Omni Assets Sdn Bhd, is buying a 20ha plot of freehold land in Cyberjaya, Selangor, for RM78.4 million, from Cyberview Sdn Bhd.

Paramount group is proposing to undertake a mixed and exclusive mid-upper to high-class secured and guarded residential landed development and high-rise condominium on the land with a gross development value of about RM530 million.

The proposed development is expected to start in 2011, and span six to eight years.

By Business Times

Loh & Loh bids for jobs worth RM2b

Loh & Loh Corporation Bhd is bidding for a RM2 billion worth of construction projects, including water-related ones, in the country.

Its chief executive officer Jason Loh said the company has about RM1.5 billion worth of ongoing projects in the construction and property sectors.

"Currently, property comprises 20 to 25 per cent of our turnover. We are aiming for a higher contribution from the property division," he told reporters after the company''s annual general meeting.

By Business Times

Nod for Starhill REIT disposals

STARHILL Real Estate Investment Trust (Starhill REIT) unitholders yesterday gave the nod to dispose of Starhill Gallery and Lot 10 shopping centres in Kuala Lumpur for RM1.03 billion.

Pintar Projek Sdn Bhd, the manager of Starhill REIT, said the disposal of the two properties to Ara Bintang Sdn Bhd is part of a rationalisation exercise to reposition Starhill REIT as a hospitality REIT, the first of its kind in Malaysia.

The disposal will provide a platform to enable Starhill REIT to focus on a single and dedicated class of assets.

"We are happy that unitholders approved the sale. Now we can proceed with what we have intended to do," Pintar Projek chief executive officer Tan Sri Francis Yeoh said in Kuala Lumpur yesterday.
Starhill Gallery is being sold to Ara Bintang for RM629 million and Lot 10 at RM401 million.

The sales exercise, to be completed by the third quarter of 2010, will be satisfied by both RM625 million cash and Singapore dollar denominated convertible preference units in Starhill Global REIT worth RM405 million.

The disposal will unlock the value of Starhill Gallery and Lot 10 as Starhill REIT is expected to realise an estimated distributable income of RM204.18 million for the financial year ending June 30 2011.

By Business Times

SunCity and GIC sign agreement on REIT purchase

PETALING JAYA: Sunway City Bhd (SunCity) has entered into a conditional cornerstone agreement with the Government of Singapore Investment Corp Pte Ltd (GIC) whereby GIC has agreed to subscribe about 5% stake (134 million units) of SunCity’s Real Estate Investment Trust (REIT).

SunCity told Bursa Malaysia yesterday that the group, Sunway REIT Management Sdn Bhd, and Credit Suisse (Singapore) Ltd had last Thursday entered into a conditional cornerstone agreement with the GIC where it would acquire the units to be listed at the lower of the institutional price and 98 sen per unit.

It added that SunCity had also entered into an underwriting agreement with Sunway REIT Management (the manager), OSK Trustees Bhd (on behalf of Sunway REIT), RHB Investment Bank (the coordinator) and RHB Investment Bank, CIMB Investment Bank Bhd and Maybank Investment Bank Bhd (as joint underwriters), to severally but not jointly underwrite the offering of 134 million units, subject to clawback and reallocation, to the Malaysian public.

An analyst said the deal showed that GIC was still confident with the assets of SunCity as currently, it had about 21% stake in that group.

Another analyst said that despite GIC showing confidence towards the REIT and other investors would follow suit, SunCity needed to offer a much better yield.

“Generally, the market’s yield for REIT in Malaysia is about 8.5% and GIC has to offer no less than that or higher in order to attract more investors,” he said.

Earlier reports stated that SunCity might place out about a fifth of its planned initial public offering of the REIT to cornerstone investors who had greater holding power for the shares.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia’s largest when it is listed in the third quarter this year.

The issue price of the Sunway REIT will be determined in a book-building process. The properties, comprising shopping malls, office towers and hotels, have a combined market value of about RM3.7bil.

By The Star

'Include development projects in subsidy cuts'

The Malaysian chapter of the International Real Estate Federation (Fiabci) has called on the government to look into widening the scope of subsidy cuts to include development projects and not focus on consumer items alone.

Fiabci former president Datuk Teo Chiang Kok said property developers now spend a large sum of money to provide infrastructures like roads, power sub-stations, water supply pipes and water storage tanks.

"We subsidise a lot to provide these infrastructure," he told reporters after the federation's morning talk with its global president Enrico Campaglani in Kuala Lumpur yesterday.

Teo, who is also See Hoy Chan Holdings group director, said by giving subsidy cuts to developers especially for projects that involve infrastructural work, it will enable them to offer houses at a more affordable price.
"It will give a big impact on prices of houses and better influence buyers when deciding to buy a property," Teo said.

Teo said the subsidy reduction must be done in small steps to enable industry players to adjust their operation costs and pricing of properties.

"There will definitely be changes in the pricing system for big items such as houses if the government reduces subsidy on non-consumer items," he said.

By Business Times

'China, HK real estate retains long-term allure'

HONG KONG: Real estate in mainland China and Hong Kong retains a strong long-term allure despite current fears of a damaging bubble, according to an influential player in the regional market.

Alastair Hughes, Asia-Pacific chief executive of Jones Lang LaSalle, a dominant presence in the Chinese property markets, sees plenty of reasons for optimism.

"For every expat who whinges about pollution, there are 20 people in London who'd like to be here," he said, gesturing out across Hong Kong's famed skyline on a rare clear day in the city.

"I don't think you'd find many people who've made money betting against Hong Kong," Hughes added.
The market for luxury property in Shanghai and Beijing is seen as "a little bit frothy" because of wealthy individuals indulging in speculation, he said.

"On the other hand, you've got everywhere else in China," he said, pointing to the annual migration of 50 million people from the Chinese countryside to cities in search of work and better housing.

As other parts of the world struggle out of recession, property markets in China and Hong Kong have been charging ahead, so much so that Beijing has taken increasingly aggressive steps to rein in the mainland market.

Nonetheless, Hughes says that not only is market "frothiness" confined to the swankiest neighbourhoods, but that the commercial and office sector, where cooler heads prevail, is largely unaffected.

Hong Kong regularly takes a bashing for its polluted air and fares poorly in some international rankings of cities for "liveability", such as those by the Economist Intelligence Unit.

But boosters of Hong Hong real estate point to the sale this May of an elite property on the Peak, known for its majestic views over the South China Sea - weather permitting - for a cool US$233 million (US$1 = RM3.25), to a local tycoon.

For Jones Lang LaSalle, Asia and particularly China look set to remain key growth areas.

By AFP

HLG to create luxury hotel chain in China

SHANGHAI: Malaysian conglomerate Hong Leong Group(HLG) is to create a luxury hotel chain in China, with at least ten Guoman Hotels over the next five years.

Violet Lee, Group Managing Director of Guocoland China, HLG's property investment arm here, told reporters at a special interview, the company would bring the unique English hospitality to the market long dominated by hotel chains from the United States.

"With Guoman's 30 year history in hospitality management and its uniqueness in services, I am confident of the group's future in the China market," she said.

Lee was in Shanghai to witness the official launch of the Guoman Hotel Shanghai, last Saturday.

The US$80 million Guoman Hotel Shanghai is the Hong Leong Group's first five-star hotel investment in China, with another equally spectacularly-designed Guoman Hotel Beijing, to be launched in the middle next year.

"All future Guoman Hotels in China will be part of our Guoson Centres to be build in Tianjin, Nanjing, Chengdu and others major cities in China," she disclosed.

However, she did not rule out the possibility of building, stand alone Guoman Hotels, in specific locations and there could be more than one in big cities like Shanghai and Beijing.

The Guoman Hotel Shanghai's opening was officiated by the Executive Chairman of the Hong Leong Group, Tan Sri Quek Leng Chan and officials from the Shanghai government.

The Guoman Hotel Shanghai is located within the Group's US$600 million mixed-use project, the Guoson Centre, Shanghai, Changfeng, in the business-hub of the Putuo district.

The hotel is also located beside greenery, lakes surrounding the Changfeng Park in the east and the Suzhou Rivers in the south.

The 26-storey Guoman Hotel Shanghai has 442 bedrooms, including 127 suites and 315 deluxe rooms.

Other hotel facilities include a leisure centre, a 500 capacity ballroom, a western restaurant and bar, all day dining, a Chinese restaurant and lobby on the first two floors.

According to Lee, the Guoman Hotel Shanghai's service staff will be trained by British Guoman specialists.

"We want to create a 'home away from home' experience for our customers, especially those from the United Kingdom and Europe.

"I think the Guoman Hotel Shanghai has a competitive edge over other five-star hotels in the busy central business district of Shanghai," she explained.

She also said the hotel is connected to the Guoson Mall which has a direct metro connection to the HongQiao International Transportation Hub with multiple transportation modes, including an intercity express rail, subway, magnetic suspension train and intercity buses.

"We are expecting a 70 per cent or more occupancy rate in the first six months of operation," she added.

By Business Times

Adiva project wins Fiabci award

The Adiva is the third precinct to be developed in Desa ParkCity after Safa and Nadia

BALI: Adiva, a precinct within Desa ParkCity in Kepong, Kuala Lumpur, has been named the world’s best residential (low rise) category at the 61st World Congress of the International Real Estate Federation (Fiabci) here last Thursday.

Fiabci is a French acronym for the Paris-based federation founded in 1948 to highlight real estate specialities and activities.

The 11-acre Adiva precinct won the Fiabci Prix d’Excellence Award under the residential (low rise) category.

The project comprises 160 triple, double-storey and walk-up apartments set against meandering linear parks within the masterplanned development of Desa ParkCity.

Desa ParkCity is a project by Perdana ParkCity Sdn Bhd, a subsidiary of Sarawak-based Samling group.

About 10 precincts are already occupied around a commercial area and work is in progress for the rest of the 500-acre development.

Adiva was the third precinct to be developed after Safa and Nadia. The developer has a vision to turn what used to be a quarry into one of the city’s most beautiful landscaped residential community.

The runner-up in the same category is Jakarta Garden City, a joint-venture development between Singapore’s Keppel Land and Indonesia’s PT Modernland Tbk.

The Fiabci Prix d’Excellence Awards received 54 entrants from 11 countries vying for 14 categories.

Perdana ParkCity group CEO Lee Liam Chye, who has been with the project from its birth, said: “We bought this land of about 500 acres for RM10 per sq ft in June 2000. It was a wilderness with rocks, granite and lots of trees and was part of what is today Country Heights Damansara.

“It was a hillock with ravines and ridges – a hot potato that no one wants – and we carved out the different parcels.

“People may say we paid RM10 per sq ft for this land, but we also spent RM250mil to blast the rocks and prepare it for development. It was a tremendous challenge but amid all that wilderness, I saw the potential.”

Lee said he and his team worked with the local authorities because legislations and town-planning controls had to be amended to legitimise and validate this new housing concept.

Adiva, with its ideals and ideas, played a large part in convincing the authorities to respond favourabley in facilitating the changes.

“I was educated in Britain and when I go there (Europe), especially to Paris, these places are so absorbing. I asked myself, ‘What is it about these places that provoke such emotions within me?’

“I asked myself many times. Today, I have the answer. The emphasis is on authenticity, the embodiment of history and culture. When I set out to plan and build this place, I wanted to create that sense of place and space. It’s exactly 10 years now and I have learned so much,” said Lee.

“When you see a duck swimming in the water, you only see the serenity and gentleness of the scene, but you do not see the furious paddling under the water. The same goes for the development of Desa ParkCity.”

Sime Darby group will operate a hospital there. A contract to build it will be awarded in about two weeks and the hospital is expected to be operational by the third quarter of 2012.

Another contract to build an international school was awarded two weeks ago. This will be completed by the middle of next year.

By The Star

IGB set for bigger challenges

PETALING JAYA: IGB Corp Bhd is ready to take on bigger challenges after having built a substantial portfolio of properties in the retail, hospitality and high-end residential sectors.


»Our Mid Valley Megamall that is parked under KrisAssets Holdings Bhd is doing very well« ROBERT TAN CHUNG MENG

With the stronger ringgit and the company’s low gearing and healthy cash reserves, it was high time to expand aggressively in retail sector abroad, said group managing director Robert Tan Chung Meng.

“Our Mid Valley Megamall that is parked under KrisAssets Holdings Bhd is doing very well.

“We are now aggressively looking to acquire one or two malls in the United States and Europe,” Tan said recently.

For the first quarter ended March 31, its 75%-owned KrisAssets posted a net profit of RM27mil against RM25.4mil in the same period last year.

IGB’s net profit rose 4.1% to RM35.32mil in the quarter from RM33.9mil a year earlier.

Tan said the company, which has a cash reserve of RM180mil, would have no problem raising funds. The company expects the expansion abroad to cost RM1bil to RM2bil.

Its hotel division, which contributes 50% to group profit, is also slated for expansion locally and overseas.

“We are targeting Japan, China and Indochina where we will either buy existing hotels or develop new ones,” Tan said.

In Malaysia, IGB owns Garden Hotel, Boulevard Hotel, Pangkor Island Beach Resort, Garden Residences, the Cititel chain of hotels and the Micasa all-suites hotel.

The company is submitting a proposal to develop the final phase of Mid Valley City comprising office blocks on a 500,000-sq-ft site.

Tan hoped to get the approval for the RM500mil office project by the year-end.

IGB is focusing on expanding businesses which offer recurring income, especially in hospitality and property investment and management.

It is now leasing offices at the Gardens north and south towers within Mid Valley City.

However, “small (property) launches’’ by IGB lately have been a cause of concern, with AmResearch Sdn Bhd describing them as a “disappointment”.

“Given the robust consumer sentiment, we had earlier expected IGB to launch more residential projects such as 6 Stonor with a gross development value (GDV) of RM300mil and projects at Sierramas in Sungai Buloh,” the brokerage said.

Tan said IGB’s two new launches were doing well. “Most of the units at Seri Ampang Hilir Residence and Garden Manor have been sold.” Both projects had a combined gross development value (GDV) of RM150mil.

Founded in the early 1960s by two brothers – the late Datuk Tan Kim Yeow and Datuk Tan Chin Nam – and named after its maiden project in Ipoh, IGB has turned from being a mere developer into a mega asset-based company that is worth RM4.5bil at the end of 2009.

IGB, which was listed in 1981, and Tan & Tan Developments Bhd, another property unit formed by the Tan brothers and listed in 1993, announced a massive merger and rationalisation exercise in the year 2000.

That resulted in IGB assuming the property assets of parent Tan & Tan, which then transferred its listing status to a new vehicle, Gold IS Bhd, another entity controlled by the two Tan families.

The group is now looking at injecting its properties into a real estate investment trust (REIT), which will probably be the country’s largest.

To do that, analysts said the group must inject properties with good financial track records and these include Gardens Mall developed by Mid Valley City Gardens Sdn Bhd, a subsidiary IGB.

However, the proposed REIT was probably delayed due to the drastic drop in market value of such trusts in 2008 and early 2009 and the poor sentiment for REIT listings.

By The Star

China, HK property retains allure despite wobbles

Real estate in mainland China and Hong Kong retains a strong long-term allure despite current fears of a damaging bubble, according to an influential player in the regional market.Alastair Hughes, Asia-Pacific chief executive of Jones Lang LaSalle, a dominant presence in the Chinese property markets, sees plenty of reasons for optimism.

"For every expat who whinges about pollution, there are 20 people in London who'd like to be here," he told AFP in an interview, gesturing out across Hong Kong's famed skyline on a rare clear day in the city.

"I don't think you'd find many people who've made money betting against Hong Kong," Hughes added.The market for luxury property in Shanghai and Beijing is seen as "a little bit frothy" because of wealthy individuals indulging in speculation, he said.

"On the other hand, you've got everywhere else in China," he said, pointing to the annual migration of 50 million people from the Chinese countryside to cities in search of work and better housing.

As other parts of the world struggle out of recession, property markets in China and Hong Kong have been charging ahead, so much so that Beijing has taken increasingly aggressive steps to rein in the mainland market.

The government has restricted lending and made it harder for people to own second or third homes, or to buy outside their home towns.

Largely in response, Shanghai's stock market has fallen about 15 percent in two months.

One analyst, Carol Wu of DBS Vickers Securities, predicts a 20-30 percent fall in prices for top-tier mainland housing and a 10-15 percent drop in the "second tier".

Nonetheless, Hughes says that not only is market "frothiness" confined to the swankiest neighbourhoods, but that the commercial and office sector, where cooler heads prevail, is largely unaffected.

"It's really important to separate commercial from residential. The drivers for residential property are very much individually driven and there's more sentiment and emotion," he said.

"On the commercial property side it's a very professional market. People don't do things on a whim."The International Monetary Fund appears to agree.

In April it said that concerns about Asian property bubbles were "limited to some urban areas in China and high-end luxury segments in Hong Kong and Singapore," although it warned policymakers against complacency.

That said, mainland China's market for commercial and office space doesn't always obey market forces.

Beijing office rents continue to rise despite high vacancy rates. Elsewhere, Shanghai office rents jumped 4.9 percent just in the first quarter, according to Jones Lang LaSalle.

Growth ranges widely, from Shenzhen in the southeast, where Goldman Sachs recently took up grade-A office space, to more modest rises deep in the interior, such as the southwestern city of Chengdu.

As for Hong Kong, the former British colony regularly takes a bashing for its polluted air and fares poorly in some international rankings of cities for "liveability", such as those by the Economist Intelligence Unit.

But boosters of Hong Hong real estate point to the sale this May of an elite property on the Peak, known for its majestic views over the South China Sea -- weather permitting -- for a cool 233 million US dollars, to a local tycoon.

For Jones Lang LaSalle, which traces its origins to a funeral and house-clearance business in London two centuries ago, Asia and particularly China look set to remain key growth areas.

The company employs 4,000 people on the mainland, virtually all of them Chinese nationals, and another 4,000 in India.

By AFP