1Malaysia Development picks project partners

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB), the agency tasked to develop most of the government land, is identifying partners to draw up a masterplan for its Bandar Malaysia and Kuala Lumpur International Financial District (KLIFD) projects in the city.


Shahrol Halmi ... ‘Those selected should have credible track records, be transparent and bring international experience.’

Among the international architects and designers being considered are Forsters & Partners as well Skidmore, Owings & Merrill LLP (SOM).

“We have been talking to them for the past few months,’’ 1MDB CEO Shahrol Halmi told StarBiz. “Those selected, including project directors and engineers, should have credible track records, be transparent and bring their international experience to enhance our local expectations.’’

The masterplan for both projects will be based on the same approach especially in terms of financial modelling, parcelling and tenders.

Complementing each other will be the Islamic financial hub on 80 acres at the Dataran Imbi area and the mixed development on 460 acres at the Sg Besi old airport.

“We target to unroll the vision and plan for the two projects in a year’s time,’’ he said, adding that momentum of work was essential to keep the young team on their toes while the public would also want to see some progress.

“Construction in phases will probably commence in three to four years,’’ he said. “It is going to be a long journey and we have to get it right, for example, by making sure that we do not flood the market with retail space.’’

Its potential partners, which may also bring in equity, include the Qatar Investment Authority (which has proposed to invest US$5bil in Malaysia) as well as parties from Abu Dhabi and China.

Reports have indicated that the Abu Dhabi Future Energy Co (Masdar), which is a wholly-owned subsidiary of Abu Dhabi’s Mubadala Development Co, may be an interested party while 1MDB is in contact with the CITIC group of China.

Among 1MDB’s board of advisors are Khaldoon Khalifa Al Mubarak, chairman of Abu Dhabi Executive Affairs Authority, CEO & MD of the Mubadala Development Co and Chang Zhenming, vice-chairman and president of the CITIC group.

“We are in a fortunate position where we have interesting projects for foreigners and locals to take part in,’’ he said.

The two developments at Imbi and Sg Besi will be connected via public transportation and feature a balanced approach where the gross development value will make commercial sense as well as ensure future sustainability.

“It should be attractive to investors and tenants while at the same time, offer affordable housing especially to the younger people as in the way that Singapore has provided apartments that are accessible via public transportation.

“Young people should be attracted to live in the city, infuse it with vibrancy and revive it to the next level,’’ he said.

The KLIFD that will promote Islamic finance, will likely comprise a cluster of financial services related groups such as banks, legal firms, IT consultancies and others. The idea is for a hub where there are world-class facilities for working, dining and relaxing in a safe environment.

“We are in discussion with the authorities,’’ said Shahrol. “It needs a concerted approach from eight to nine parties to make it happen. There are energetic and passionate people in the civil service.’’

Among other things, removal of redtape, provision of incentives and tax breaks, salary structures and types of businesses are being looked into, with a view to attracting talent back into the country.

For 1MDB, the plan for Bandar Malaysia represents a new opportunity for a green and energy efficient development. “A big park of 80 acres, in the likes of Hyde Park in London, will differentiate this part of Kuala Lumpur from some neighbouring cities. It will make people feel they can breathe and that they are part of the society that cares about nature,’’ he said.

There may be a place for big events and people’s forums, a university for the leading edge in technology in partnership with world-class firms, a library where there are also shows, book signing and activities for the young and old. “Besides the construction costs, we have to factor in the cost for long-term sustainable maintenance,’’ he said.

By The Star

REIT managers seek cut in withholding tax

MANAGERS of real estate investment trusts (REITs) are hoping for a reduction in withholding tax for REIT investors in next year's budget, to spur the industry growth and make it more competitive.



To keep the industry in line with international practice, REIT managers are also proposing for relaxation on fund-raising exercises.

These issues will be brought up by the Malaysian REIT Managers Association (MRMA) during the pre-budget dialogue.

MRMA pro-tem vice-chairman Lim Yoon Peng said the incentives are needed to grow the local REIT industry, which is still in an infancy stage.

"REITs are a new asset class, which are fairly attractive, defensive, low beta, not volatile, pay regular dividend and tax-efficient.

"But not everybody in the country is familiar with REIT, especially among retail investors," he said in an interview with Business Times in Kuala Lumpur recently.

MRMA, which was formed last year, comprises the managers of 11 Malaysian REITs.

They are AmFirst REIT, AmanahRaya REIT, Atrium REIT, Axis-REIT, Al-Hadharah Boustead REIT, Al-Aqar KPJ REIT, Hektar REIT, UOA REIT, Quill Capita Trust, Tower REIT and Starhill REIT.

The REITs are all listed under the new Securities Commission (SC) Guidelines for the Real Estate Investment Trusts introduced in January 2005.

Lim, who is also chief executive officer of Am ARA REIT Managers Sdn Bhd, the manager of AmFIRST REIT, said the proposed reduction in the withholding tax for REIT investors and relaxation of fund-raising exercises requires amendments to the SC guidelines.

Currently, the SC guidelines state that REITs can only place out new units of up to 20 per cent and it can be done only once in every 12 months.

Lim said REITs need to raise funds more frequently in order to acquire more properties to expand the trust.

He also said that in Singapore, individuals do not pay withholding tax on REIT investments.

Both local and foreign retail investors in Malaysia now have to pay a 10 per cent withholding tax.

Lim said as REITs pay off almost 100 per cent of their income, they are an attractive asset investment class.

He said REITs are not as volatile as equities. They also have low correlation, where, for instance during the recent euro crisis, some shares dropped by 5 to 8 per cent but REIT shares did not fall that low.

"As REITs pay regular and stable income, they are a good investment portfolio for insurance and pension funds.

"Retail investors' awareness on REITs is very low and REIT managers have been organising roadshows to familiarise them with the benefits of investing in REITs," he said.

Lim said generally, promoters and sponsors take up between 40 and 50 per cent of a REIT's initial fund size, and allocate a further 40 per cent to institutional investors. This leaves only a tiny portion for retail investors.

The current market capitalisation of REITs in Malaysia is some RM6 billion and, together with Sunway REIT and CapitaMalls Trust coming onstream by the middle of this month, the total market capitalisation will exceed the RM10 billion mark.

By Business Times

Why REITs should be the choice of investment

KUALA LUMPUR: Real estate investment trusts (REITs) offer many advantages to investors who are keen to invest in the property market.

Axis REIT Managers Bhd chief executive officer Stewart LaBrooy said what was important now to REIT players was to educate them on the benefits on investing in REITs.

“We need to educate them as most of them are not really aware of the advantages, such as having a higher yield compared with some other investments,” he said yesterday at the Investor Insights into Malaysian REITs in 2010.

As a result of the lack of awareness on REITs, he said, the participation from Malaysians in REITs was still small compared with other countries.

“We have 13 REITs now listed on Bursa Malaysia that cover all types of industries. With a high dividend yield of about 7% annually, low entry cost and support with higher corporate governance, REITs should be the choice of investment,” he said, adding that the size of assets of Malaysian REITs was now about RM16bil.

In REITs, a pool of money from investors is invested in properties such as office buildings or shopping malls and the investment is managed by REIT managers.

LaBrooy said another advantage of investing in REITs was the tax efficiency where investors were taxed only once.

“Apart from that, it is easy to invest in REITs as you can buy it today and sell the unit tomorrow, similar to equity stocks. Plus, REITs are a hedge against inflation,” he said, adding that they were low risks and a passive type of investment.

He said the way REITs did its business was to make sure about 90% to 100% of its retained earnings before tax were given back to investors.

“Last year, despite facing a global economic crisis, Malaysian REITs were still giving back about 70% to 80% of its retain earnings to investors,” he said.

Meanwhile, touching on the outlook of residential and office market in Malaysia, CB Richard Ellis (M) Sdn Bhd executive chairman Christopher Boyd said overall, both markets were still stable.

“For the residential market, we are still in the safe net as in Malaysia, developers are still using the method of sell-first-before-build. If you build first then sell like what is done by some other countries, then you will risk yourself of not getting buyers if suddenly problems arise, such as the economic downturn, ” he said.

By The Star

KLCC Property a 'hold': HwangDBS

HwangDBS has recommended a "hold" stock rating for KLCC Property with a target price of RM3.70.

The securities firm noted that KLCC Property's 2010 earnings (ex-fair value gains) grew by 4 per cent to RM233 million.

Revenue rose 2 per cent, driven by office and retail segments’ +3 per cent and +8 per cent respectively, which helped to mitigate the 13 per cent dip in hotel operations.

While retail turnover at Suria has returned to pre-crisis’ RM2 billion and footfalls remained a high RM42 million, Mandarin Oriental saw lower occupancy rate of 55 per cent (FY09: 65 per cent) albeit stable ARR of RM636.

KLCCP has no intention to cut ARR but rather focus on product differentiation, value add promotions and cost control. Long term locked-in rental income from blue-chip tenants should continue to sustain future earnings.

By Business Times

SunCity eyes foreign investors

Bay Rocks, which c onsists of 77 units of 2 and 2 1/2 storey l uxury bungal ows, signals SunCity’s for ay into the luxury market.

A cooler, calmer sanctuary. This is what Sunway City Bhd (SunCity) will be offering residents of its new condominium development – A’marine – located in Sunway South Quay, Bandar Sunway.

There are elements of comfort, style, and convenience that when put together showcase the height of exclusive lakeside metropolis living.

Sunway South Quay is the company’s new 178-acre residential development that consists of about 4,000 units of condominiums (A’marine and Nautica) and bungalow villas (BayRocks).

SunCity is targeting foreign investors for their latest development.

“We are trying to promote Sunway South Quay to international residents. We have already sold Nautica to a South Korean company, CI Korea,” managing director of property development in Malaysia, Ho Hon Sang tells StarBizWeek.

Nautica was sold for RM171mil, or about RM400 per sq ft. About 70% of A’marine’s 242 units have been sold since its soft launch in May. The units are priced at RM550 per sq ft. A’marine has a gross development value (GDV) of about RM200mil. The project is slated for completion by June 2013.


Ho Han Sang ... ‘As a property de veloper, you always look to better the last project.’

BayRocks, which consists of 77 units of 2 and 2½ storey luxury bungalows, signals the group’s foray into the luxury market. The development has a GDV of about RM367.7mil.

The bungalows are spacious, modern and well furnished. They also come complete with a hydraulic elevator.

Says Ho: “We have kept a low-key profile when marketing BayRocks because it is an expensive product. The price of about RM4mil-RM5mil per unit emphasises that fact. As a result, we have limited the amount of units built. In the first phase, we managed to sell about 95% of the 30 units made available.”

“In line with the Government’s Malaysia My Second Home programme, we are also hoping to attract certain high net worth individuals to come and stay in Malaysia,” he says.

This is not the first time SunCity has done business with foreigners. The development of Bandar Sunway as an integrated city has relied on educational institutions to attract foreign funding in the past.

“Bandar Sunway is an education hub. Taylor’s University College, Monash University and Sunway University College are located in this area. We have about 16,000 students living here, of which 30% are foreigners,” says Ho.

Sunway South Quay is strategically located nearby amenities that includes Sunway Medical Centre, Sunway Pyramid Shopping Mall, Sunway Lagoon Theme Park and an abundance of food and beverage outlets.

Despite what looks to be a rosy future ahead for SunCity, Ho insists that the company will not be resting on their laurels.

“As a property developer, you always look to better the last project. If there is demand for commercial property we will build them, and the same goes for residential property as well,” he says.

By The Star

Penang gears up for more property launches

The Tudor-style houses under the Botanica.CT’s phase one in Balik Pulau, Penang.

HOUSING prices in Penang are expected to rise further over the next 18 months, as local and Kuala Lumpur-based developers plan to launch 2,696 units of residential properties with an estimated gross sales value of over RM2.1bil on the island and the mainland.

Some 1,676 units of these properties, with an estimated of RM1.84bil, are located on the island.

The other 1,020 units of these developments, with an estimated gross sales value of RM300mil, are located on the mainland.

IJM Land Bhd, S.P. Setia Bhd, Asas Dunia Bhd, MTT Properties & Development Sdn Bhd, and Ideal Property Group are among the local and Kuala-Lumpur developers that have drawn up plans for new launches from now till the second quarter of 2011. Real Estate Housing Developers’ Association (Rehda, Penang) chairman Datuk Jerry Chan told StarBizWeek that property prices in Penang were expected to rise between 5% and 10% over the next 18 months.

This was only a very conservative estimate, Chan said after the Star Property Fair 2010 Round-Table Dialogue held at the Star Northern Hub in Bayan Lepas, Penang, on July 9. The dialogue, moderated by The Star’s regional editor (north) Choi Tuck Wo, is a prelude to the Star Property Fair 2010 that will be held from July 23 to 25 at G Hotel and Gurney Plaza.

“The higher pricing reflects the rising land, construction and material costs, and the higher quality, more spacious and better design products from developers,” says Chan.

“Other factors include the influx of money from regional investors and Malaysians abroad, and the positive forecast from the government that the country’s GDP will be over 6% this year,” Chan says.

He says it is time for the state government to brand Penang’s products and services because of the island’s liveability and uniqueness and the fact that its property prices are one-quarter that of Singapore’s.

He calls for a directory to list comprehensively Penang’s hospitality services, products, facilities, and manufacturing services.

He says current efforts to promote Penang such as road shows have not been effective.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat is also in agreement that property prices would rise between 5% to 10% from now till next year.

According to the Valuations & Property Services Department from the finance ministry, the residential property pricing in Penang had soared above that of Kuala Lumpur in 2009 by over 2.5%, Teoh says.

The housing price index of Penang was 145 in 2009, compared with that of Kuala Lumpur and the national average, which was 142 and 130, Teoh says.

“Among the drivers of residential property prices in Penang include foreign investments from China because the Chinese government have started to implement policies to curb property speculation,” Teoh says.

The largest development projects on the island are by IJM Land, which has lined up over RM1bil worth of residential properties to be launched for the second half of 2010 and 2011.

IJM Land Bhd managing director Datuk Soam Heng Choon says these properties include the RM830mil Light Collection projects, comprising 585 units of condominiums, bungalows, and town-houses next to Penang Bridge, the RM113mil The Address in Bayan Baru, comprising 148 units of condominiums cum town-house scheme, and the RM70mil Permatang Sanctuary project, comprising 170 units of semi-detached and bungalow houses, in Bukit Mertajam.

The Light Collection properties, to be launched in October 2010 and in the second and third quarters of 2011, are priced between RM700 to RM800 psf, while the pricing for The Address, to be launched in December 2011, starts from RM625,000 to over RM1mil.

The landed properties in Permatang Sanctuary, to be launched in January 2011, are priced between RM400,000 and RM700,000.

SP Setia is launching condominiums, terraced houses, and bungalows with a gross sales value of about RM425mil in the south-west and north-east districts of the island.

SP Setia (north) general manager S. Rajoo says the RM180mil high-rise project in Setia Pearl Island, Sungai Ara, comprising 300 condominiums would be launched in the second quarter of 2011, while the RM180mil Setia Eco Greens project in Sungai Ara, comprising 167 terraced and semi-detached properties, and the RM65mil Brookes Residence projects in Taman Jesselton, comprising 11 bungalow houses, have been targeted for launch in the first quarter of next year.

Prices for the condominium scheme starts from RM400,000, while the bungalow houses are priced from RM898,880 onwards, and Brookes Residence bungalows from RM5.8mil onwards.

Ideal Property Group will also be launching RM370mil worth of landed residential properties comprising 436 units of terraced, super-linked, and semi-detached houses for its One Residence project in Bayan Lepas, the southwest district of the island.

Ideal Property managing director Datuk Alex Ooi says in September the group would launch 316 units, and in the second quarter 2011, another 120 units.

Prices range between RM650,000 and RM1.4mil, he adds.

MTT Properties & Development Sdn Bhd general manager Jason Tan says the group plans to launch at end of the year in Balik Pulau, 29 units of three-storey hillside villas for its Botanica.CT project, overlooking the Andaman Sea, with a gross sales value of RM100mil. The properties, with a built-up area of 8,000sq ft, will be priced from RM2.5mil onwards.

On the mainland, Asas Dunia plans to launch RM230mil worth of residential properties comprising 500 single storey semi-detached houses, and 350 double-storey terraced, double-storey semi-detached, and light industrial houses in Bukit Mertajam, Simpang Ampat, Nibong Tebal, Sungai Bakap, and Permatang Tinggi from late July till the second quarter of 2011.

Chan, who is also Asas Dunia managing director, says the single-storey semi-detached unit, with built-up and land areas of 1,200sq ft and 2,660sq ft respectively, was priced between RM150,000 and RM290,000.

The double-storey semi-detached unit, with built-up and land areas of 2,557sq ft and 2,724sq ft, is priced from RM358,888 onwards.

“These properties will be launched in phases starting end of July. Their prices are already about 5% higher than the previous launches,” Chan says.

By The Star

Property investments rising in popularity

An iProperty.com consumer trends survey for the first half of this year showed more Malaysians looking to property for investment.

The online survey conducted on the iProperty.com Malaysia website had the participation of 500 respondents and was aimed at getting key insights into Asian property buyers, including motivations for purchasing property and budgets.

In a statement yesterday, the property website said of the 500 respondents, 47 per cent were looking to purchase a home while 31 per cent were investors seeking to expand their financial portfolio with real estate.

The survey showed motivation to invest for rental income dropped in 2010 whereas property investments for capital appreciation was on the rise.

It also said this increased preference to profit from resale could be attributed to rising property prices, as the Malaysian property market continues to improve.

A total of 43 per cent of the respondents were in the market for high-end properties valued between RM400,000 to RM5,000,000. This represents a whopping 16 per cent increase in demand for high-end properties with the RM500,000 to RM1,000,000 segment alone increasing by 10 per cent.

The survey pointed out that rising property prices, better rental returns and high resale profits could be some of the reasons for an increased demand in high-end properties.

"As confidence in the property market grows, we are seeing more home buyers and investors turning to high-end properties as a means to profit from capital appreciation and expand their financial portfolios," said iProperty.com Malaysia Country Manager Ken Tsurumaru.

By Bernama

Creating a real estate investment destination

The Star’s regional editor (north) Choi Tuck Wo met up with Kuala Lumpur-based and Penang developers on what needs to be done further to promote Penang as a real estate investment destination.

The panellists of the roundtable included investPenang executive committee chairman Datuk Lee Kah Choon, Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat, Real Estate Housing Developers Association (Rehda, Penang) chairman Datuk Jerry Chan, IJM Land Bhd managing director Datuk Soam Heng Choon, Belleview Group managing director Datuk Sonny Ho, Ivory Properties Group chief operating officer Datuk Ooi Chin Loo, Iskandar & Associates chairman Dr Iskandar Ismail, Nusmetro Group director Thomas Chan, SP Setia (north) general manager S. Rajoo and KPMG partner Ooi Kok Seng.

The following are excerpts of the discussion:

StarBizWeek: What kind of impact will the effort to cool off property speculation in China have on property demand and property prices in Malaysia?

Iskandar: The overseas demand for Malaysian properties is actually overstated. Our foreign direct investment last year grew only by 1%, compared to 9% in Singapore. I have not seen any real evidence that people from Singapore are moving to Malaysia because the property is cheaper.

Soam: There are a lot of high net-worth investors from China to whom we can sell Penang, especially in Inner Mongolia, where there are states with high GDP.

In light of pending subsidies removal, will property prices in Penang reach a point that is beyond the affordability of Penangites? According to a Socio-Economic Research Institute report, property prices on the island is 14 times higher than annual household income.

Soam: Landed properties priced at RM250,000 are still available on the other side. The mainland is not out of reach from the island, just a bit further.

The main thing is still transportation. People do not mind if there is a good public transport system.

Thomas Chan: The removal of subsidies will have minimal impact on property prices.

How can the south-west district of the island be further developed to attract more foreign investments?

Rajoo: We can improve by having more roads and amenities in the south-west district. This corridor is grossly lacking in the infrastructure.

Soam: There is a lot of potential in the south-west district, as the second bridge is coming up and the airport expansion is starting to move.

How can Penang better utilise its heritage properties to attract investments, taking into consideration the 18m height constraint imposed by the local authorities?

Lee: Heritage by itself is a different sort of investment. Generally, my feeling is why do you want to build a property that is more than 18m in the heritage area? There are so many areas that you can build on. All the other houses in the heritage area are one or two stories high and suddenly you have a skyscraper rising from nowhere.

How can developers in Penang improve on their products to meet investors’ expectations?

Sonny Ho: The Japanese are used to staying in small houses. For them, 2,000sq ft is very big. It is not the case for the Europeans and Australians.

Jerry Chan: Rehda has proposed to the state to allow variable unit sizes and layouts within apartments or condo blocks for multi-general use.

What is the feedback from the recent overseas roadshows to promote Penang as an investment destination?

Soam: At a recent luxury property exhibition in China for the rich and famous, the first thing they asked was “Hey, where is Penang?” Most of the people know about KL City Centre, but they are not aware of Penang. We have to give Penang more exposure and branding.

Ho: Malaysia as a whole is a country that is friendly to foreign investors and Penang should do a big marketing and communication job to attract them.

By The Star

Ivory Properties sees right time for listing

Penang-based Ivory Properties Group Bhd, which will soon be listed on the Main Market of Bursa Malaysia, believes the timing is right to go for the listing as the economy, especially the property sector, has picked up following economic stimulus measures by the Government in the past two years.


Datuk Low Eng Hock (left) and AmInvestment Bank Bhd MD T.C. Kok at the group’s prospectus launch early this week.

Chairman/group chief executive officer Datuk Low Eng Hock tells StarBizWeek that Ivory sees strong demand from home owners and investors in land-scarce Penang as well as discerning buyers with an eye for exclusive resort living, high capital appreciation and a prime location.

“We also noticed that in recent months, there have been quite a number of land acquisitions in Penang by big developers,” he says in an email reply. The group has so far undertaken a multitude of projects with a gross development value (GDV) of RM1.51bil.

“The GDV for completed property development projects accounted for about RM675.62mil while the GDV for ongoing property development projects is about RM834.09mil. The projects are scheduled for completion within the next few years,” he says, adding that the listing of Ivory will further enhance the group’s ability to complete property development projects and beef up its financial muscle to undertake bigger projects, both locally and abroad.

Ivory will be the first property development company to be listed on the Main Market this year.

The group launched its prospectus early this week where the balloting of the public issue shares is fixed on July 21 while its listing is scheduled for July 28.

July 19 will be the closing date for application of the public issue.

AmInvestment Bank Bhd has been appointed as the adviser, managing underwriter, underwriter and sole placement agent for the initial public offering (IPO).

Ivory’s IPO entails a public issue of 44.9 million new ordinary shares of 50sen each at an issue price of RM1 per share, comprising of 9.3 million new shares for application by the Malaysian public; 1million new shares by eligible directors, employees and business associates of Ivory and its subsidiaries; 34 million new shares for private placement to selected investors; and 570,000 new shares for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).

An additional 16.2 million shares at an offer price of RM1 per share will be offered to Bumiputera investors approved by MITI.

Of the gross proceeds, expected to be RM44.9mil, RM10mil will be used to repay bank borrowings, RM31.5mil for working capital and RM3.4mil for estimated share issue expenses.

“I am confident we should do well. Let’s see on July 28,” he says.

On the group’s property business in Penang, Low says being an island, Penang’s property prices will remain stable and this scarcity of land has somewhat shielded the property sector there from adverse effects of an economic slowdown, as had happened before.

“Our properties have appreciated over 40% within a few years and most of our upcoming projects are located in prime locations. We are overwhelmed with enquiries and have accepted registrations from prospective buyers for all the upcoming projects. We are also in the middle of acquiring new landbank in line with our expansion plan after the public listing,” he says, adding that the properties are priced between RM300 per sq ft and RM500 per sq ft.

The Ivory group is a fast emerging developer with a humble beginning. It was established in 1999 to undertake medium to high end property development projects.

It had completed property development projects such as The View Twin Towers (condominiums) in Batu Uban; Tanjung Park (condominium and townhouse) and Seri Taman Tanjung (apartments) in Tanjung Tokong; Plaza Ivory (condominiums, commercial shop lots and retail) and Palace Hill (bungalows and semi-detached houses) in Bukit Gambir; and Penang Times Square’s Phase 1, Birch The Plaza (condominiums and shopping complex) in George Town (Dato’ Keramat).

The group’s ongoing property development projects are the exclusive Moonlight Bay comprising villas and condo-villas in Batu Feringgi with a GDV of about RM189.96mil; Penang Times Square’s Phase 2, Birch Regency comprising condominiums and shopping complex at Jalan Dato’ Keramat with a GDV of approximately RM307.41mil; Zen @ The View comprising bungalows at Batu Uban with a GDV of approximately RM15.32mil; Island Resort’s Phase 2 and Phase 3 comprising condominiums, resort villas and bungalows at Batu Feringgi with GDV of about RM259.03mil and Aston Villa’s Phase 2 and Phase 4 comprising landed residential and shop lot in Bukit Mertajam with a GDV of approximately RM62.36mil.

Future property development projects of Ivory in Penang are Penang Times Square’s Phase 3 and Phase 4 with a GDV of approximately RM624.88mil; Mount Erskine Development comprising The Peak Residences with a GDV of approximately RM221.89mil, Taman Bukit Erskine with a GDV of approximately RM42.30mil, The Latitude with a GDV of approximately RM117.46mil, commercial lots with a GDV of approximately RM34.86mil at Mount Erskine; City Mall with a GDV of approximately RM269.61mil at Jalan Tanjung Tokong; Island Resort’s Phase 4 with a GDV of approximately RM121.15mil; and Aston Villa’s Phase 1 and Phase 3 with a GDV of approximately RM47.66 mil.

Ivory’s project in Tanjung Malim, Perak comprises Ivory Eco Park @ Tanjung Malim with a GDV of approximately RM420mil. On the outlook of the property market this year, Low says he is very optimistic, not only on the Penang market but Malaysia in general.

“With many positive and investor-friendly policies by the Government and healthy growth in our domestic economy, I believe we are on the uptrend. We at Ivory are all gearing up to take up every opportunity in this optimistic property market,” he says.

On plans to venture into the Klang Valley property market, Low says Ivory is studying several parcels of land in the Klang Valley and is looking at joint development with a local partner in the Klang Valley.

Ivory had recorded historical proforma consolidated profit after taxation (PAT) of about RM10mil, RM22.5mil, RM26.5mil, RM26.87 mil and RM17.17mil for its financial years ended Dec 31 (FY) 2005, FY 2006, FY2007, FY2008 and FY2009 respectively.

The company is forecasting a proforma consolidated PAT of approximately RM33.86mil for the financial year ending Dec 31, 2010.

By The Star

Developing townships with the right attributes

The environment theme has become a unique selling proposition for many new property projects as developers hope to leverage on the people’s greater awareness of the environment to boost sales.

It is easy to understand why there is great interest in the environment by both ends of the market. For the buyers, it is not just about the “environmental friendly” way of life but the overall environment of a neighbourhood, including security, safety, facilities and amenities, accessibility and other considerations.

These are important factors that will affect the value of the property in the secondary market when one decides to sell the property.

Many landed residential properties in such neighbourhoods have escalated in prices and even intermediate units are being sold at more than RM800,000 to close to RM1mil a unit.

A check in the classified pages of The Star shows only limited units of landed residences up for sale around the Klang Valley. Most of the “for sale” units are high-rise apartments or condominiums.

As for developers, it pays to plan their townships or projects based on a well balanced and sustainable environment for living, working and playing or recreation.

Instead of maximising the built-up space, developers should strive to achieve the optimum and balanced ratio between the built and “free” or undeveloped space in their projects.

By freeing up land to provide for more pedestrian walkways that link the different neighbourhoods, green lungs and other community facilities including playgrounds, residents will be able to walk more and drive less – thus lowering their carbon footprint.

Besides lowering the cost of living, such facilities will also promote a stronger community camaraderie and kinship among the residents.

These could be the reasons why Desa ParkCity homes are fetching one of the highest price premium in Kuala Lumpur, and possibly the country today.

Since the 473 acre-township took off in 2002, houses in Desa ParkCity have registered a compounded price appreciation of between 50% and 150%, or about 10% to 25% a year, in the secondary market.

From about RM470,000, or about RM235 per sq ft for a terrace house of 2,000 sq ft in 2002, the price has escalated to RM563 per sq ft last month. At a balloting on June 26, all the 137 terraced houses of 3,100 sq ft priced at RM1.75mil were snapped up. More than 800 buyers turned up for the balloting.

Desa ParkCity is a thriving “walkable” township with nine foot walkways connecting all the neighbourhoods.

Its tree-lined streets, a 43-acre central park and well-landscaped neighbourhood parks are among its main attractions.

The success of Desa ParkCity shows that developers should not just exploit the environment catchphrase as a marketing tool, but to go the extra mile to ensure that the townships or projects being built have all the right attributes that promote a holistic, wholesome and secure environment.

Developments with community, park-like environment, walkable streets and top-notch security will be a welcome change from the usual barrack-style layout of most housing estates that are still being built today.

Bad road congestion seems like a “perpetual” occurence in many of our townships. To alleviate the problem, developers should not overbuild and have better traffic planning, including more entrances and exits to make driving within the townships more pleasant.

Likewise, while the Government is making plans to redevelop some of the federal assets and land in Kuala Lumpur and the Klang Valley, the planning authorities should set aside land for the environment cause.

Our cities certainly need more central parks to allow city folk some natural avenues to unwind and relax.

Deputy news editor Angie Ng believes developers that adopt the noble objective of building wholesome environments for the people will be held in high regard for their nobility.

By The Star

CapitaMalls Asia has RM2b to invest in Malaysia

SINGAPORE'S CapitaMalls Asia Ltd (CMA) is looking at investing up to RM2 billion to build and buy malls in Malaysia.

Once the asset starts to generate income, it may then be sold to the CapitaMalls Malaysia Trust (CMMT). CMMT, Malaysia's second largest property trust was listed on Bursa Malaysia yesterday.

CapitaMalls chief executive officer Lim Beng Chee, said that all the money raised from the initial public offering will be reinvested into the Malaysian market.

"We have close to RM800 million from the listing. We have intention to continue investing in Malaysia as we see opportunities in Malaysia.

"So, while CMMT can go on to acquire income producing assets which is yield accretive, there could be projects that are not accretive from day one and need to add value.

"We will be setting up a fund to undertake some development assets to build a pipeline for CMMT to grow over time," Lim said at a press conference following the listing of CMMT.

The development fund, to be ready within a year, will have RM1 billion and can be geared up to RM2 billion.

While the preference is for the fund to build retail properties, Lim said that it may also collaborate with its parent CapitalLand Ltd for funding to build an integrated development which includes a retail component. It can also purchase assets and enhance them.

Similarly, the fund can buy integrated properties provided that at least 65 per cent of the gross floor area, asset value or rental income is the retail portion. If the retail portion is less than 65 per cent, it could opt to do a joint venture with CapitaLand Ltd.

Also, if necessary, the retail portion of an integrated property can be split from the remaining component and offered to CMMT.

Meanwhile, Sharon Lim, chief executive officer of CapitaMalls Malaysia Reit Management said that it has allocated RM40 million and RM60 million for capital expenditure and asset enhancement for 2010 and 2011 respectively.

The CMMT, now has a portfolio of three malls - Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. Together these properties with some 1.88 million sq ft in net lettable area is valued at RM2.13 billion.

CMMT's initial public offering raised RM785.2 million from local and foreign institutional investors. The price for institutional and cornerstone investors was fixed at RM1 per unit and at 98 sen for retail investors.

Retail investors are expected to get a distribution yield of 7.3 per cent in 2010 and 7.6 per cent in 2011.

Yesterday, CMMT's units closed at 98 sen, a 2 sen discount from its reference price of RM1. A total of 11.98 million units were traded.

By Business Times

Lower debut for CMMT

KUALA LUMPUR: Shares of CapitaMalls Malaysia Trust (CMMT), the largest “ pure-play” shopping mall real estate investment trust (REIT) in Malaysia, closed lower yesterday on its trading debut on Bursa Malaysia’s main market at 98 sen, 2 sen lower than its institutional price of RM1 but at par with its retail price.

The stock opened at 98.5 sen, its high for the day, and had a low of 97.5 sen before closing the day with 11.987 million shares changing hands.

CMMT’s initial public offering comprised 786.5 million units, of which 67.5 million were for retail investors and the rest for institutional investors.


Lim Beng Chee and Sharon Lim at the press conference after the listing.

CapitaMall Asia Ltd chief executive officer Lim Beng Chee said he was happy with the opening price as retail investors managed to gain a premium of 0.5 sen.

“Despite the small premium, the most important thing is that the market recognised the value and assets class hidden,” he told reporters yesterday after the listing ceremony.

Lim said CapitaMalls Asia planned to set up a RM1bil fund within a year to build and prepare a pipeline of assets for the Malaysian property trust. “We are looking for maybe another three or four malls to add to our existing assets here in Malaysia,” he said.

CMMT is managed by CapitaMalls Malaysia REIT Management Sdn Bhd, a joint venture between CapitaMalls Asia, which is one of Asia’s largest shopping malls developers, and Malaysian Industrial Development Finance Bhd.

Its portfolio in Malaysia comprises three assets, namely Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor.

CapitaMalls Asia is part of CapitaLand Ltd, South-East Asia’s biggest developer, which owns shopping malls in China, India and Singapore.

Meanwhile, CMMT – which is also the country’s second biggest property trust – expects to distribute its yield of 7.3% for the forecast period of 2010 and 7.6% for forecast year 2011 to retail investors based on the unit price of 98 sen.

CapitaMalls Malaysia REIT Management chief executive officer Sharon Lim said the yield distribution was really attractive compared with some other investment yields in the market.

“This is much more attractive than Malaysian bonds, which offer about 4% yield, as well as fixed deposit rates of about 3%,” she told reporters yesterday.

OSK Research Sdn Bhd in its latest report stated that the dividend yield of 7.5% was “well below” the average 8.5% of other Malaysian REITs.

It said CMMT was likely to offer very limited upside to its unit holders, at least in the medium term.

Having said that, it added that the “premium” might be justified given that the trust would be the second largest in Malaysia, and with the largest free float of 58.3%.

Given its defensive nature and longer-term organic growth catalyst it potentially offered, CMMT was likely to appeal to certain classes of investors only, especially those with a defensive investment strategy, it said.

By The Star

UEM-Bina Puri venture wins RM997m LCCT deal

UEM Construction-Bina Puri joint venture will be the main contractor for the construction of the new LCCT at KLIA in Sepang.

UEM Construction Sdn Bhd (UEMC) has won a RM997.23 million contract with Bina Puri Holdings Bhd to build a much-anticipated permanent low-cost carrier terminal (LCCT) at the KL International Airport (KLIA) in Sepang for airport operator Malaysia Airports Holdings Bhd (MAHB).



MAHB told Bursa Malaysia yesterday that it had appointed the UEMC-Bina Puri joint venture (JV), a 60:40 JV that was established in February, as the main contractor for the construction of the new LCCT.

In a separate filing to the stock exchange, Bina Puri group managing director Tan Sri Tee Hock Seng said the company accepted the letter of award yesterday in the name of UEMC-Bina Puri JV to undertake the design, construction and maintenance of the new LCCT's main terminal building, satellite building, sky bridge and piers.

This works package is expected to be completed within 20 months.

The contract is expected to contribute positively to Bina Puri's earnings for the financial year ending December 31 2010.

"With the award, the group's current book order stands at RM2.7 billion. The total value of contracts secured this year is RM1.51 billion," Bina Puri said.

Its share price gained 31 sen to RM1.42 yesterday on news of the award.

Meanwhile, UEM Group managing director and chief executive officer Datuk Izzaddin Idris said in a statement that the group was privileged to have clinched the mega project, helping its construction order book grow to RM3.7 billion.

UEMC is a wholly-owned subsidiary of UEM Group.

"Based on our track record in building the KLIA in Sepang and other infrastructure assets, we strongly believe that we will deliver an LCCT complex that is of global standing," said Izzaddin.

MAHB managing director Tan Sri Bashir Ahmad recently told reporters that the new LCCT that will be ready by March 2012 will be bigger than previously planned.

However, details of the revised cost, size and capacity of the new LCCT have yet to be announced. The project was originally supposed to cost RM2 billion and cater for 30 million passenger per year, with potential capacity for 45 million passengers per year.

Prior to yesterday's main contractor award, MAHB had given out two other contracts for the new LCCT project. The first, worth RM362 million, was given to WCT Bhd last December for site preparation, earthworks and main drainage. In January, a RM291 million contract was awarded to Gadang Bhd to carry out earthworks for the runway and taxiways.

By Business Times

CapitaMalls debuts at 1.5sen discount

CapitaMalls Malaysia Trust (CMMT), the country's largest shopping mall real estate investment trust (REIT), makes its debut today on the Main Market of Bursa Malaysia at 98.5 sen, a 1.5-sen discount over its institutional offer price of RM1 per unit.

Chief executive officer of CapitaMall Asia Ltd Lim Beng Chee said he was happy with the opening price because the retail investors were getting it at 98 sen while the opening price was 98.5 sen.

"This is just the day one pricing and they (CapitaMall Asia) has actually proven themselves to deliver with their active asset management," he told reporters after the listing ceremony today.

Lim said the company would start its RM2 billion asset development project within one year, based on the market situation.

He said retail investors were expected to get distribution yields of 7.2 per cent for the forecast period of 2010 and 7.6 per cent for 2011.

CMMT's initial public offering comprises 786.522 million units, of which 67.5 million were for retail investors (at 98 sen per unit) and the rest for institutional investors (at RM1 per unit).

CMMT is managed by CapitaMalls Malaysia REIT Management Sdn Bhd, a joint-venture between CapitaMalls Asia, which is one of Asia's largest shopping malls developers, and Malaysian Industrial Development Finance Bhd.

By Bernama

More Malaysians buying properties: iProperty

A iProperty.com consumer trends survey for the first half of this year showed more Malaysians looking to property for investment.

The online survey conducted on the iProperty.com Malaysia website, had the participation of 500 respondents and was aimed at getting key insights into Asian property buyers, including motivations for purchasing property and budgets.

In a statement today, the property website said of the 500 respondents, 47 per cent were looking to purchase a home whilst 31 per cent were investors seeking to expand their financial portfolio with real estate.

The survey showed motivation to invest for rental income dropped in 2010 whereas property investments for capital appreciation was on the rise.

It also said this increased preference to profit from resale could be attributed to rising property prices, as the Malaysian property market continues to improve.

A total of 43 per cent of the respondents were in the market for high-end properties valued between RM400,000 to RM5,000,000.

This represents a whopping 16 per cent increase in demand for high end properties with the RM500,000 to RM1,000,000 segment alone increasing by 10 per cent.

The survey pointed out that rising property prices, better rental returns and ultimately healthier resale profits, could be some of the reasons for an increased demand in high-end properties.

"As confidence in the property market grows, we are seeing more home buyers and investors turning to high-end properties as a means to profit from capital appreciation and expand their financial portfolios," said iProperty.com Malaysia, Country Manager, Ken Tsurumaru.

To meet this increasing demand for luxury properties, he said the incoming iProperty.com Export Luxury Collection Property Exhibition will be the biggest of its kind in Malaysia, showcasing luxury developments from across the globe.

By Bernama

RHG no longer part of Taragon Puteri project?

The opening of Rendezvous Hospitality Group (RHG)'s new 445-room business hotel within the Taragon Puteri Kuala Lumpur integrated development remains uncertain.

The reason is that Singapore-based RHG will no longer be involved in the project.

RHG chief executive officer Iqbal Jumabhoy when contacted by Business Times said: "The management contract for Rendezvous Hotel Kuala Lumpur has not been activated because conditions for the lease and operations have not been met."

The hotel was scheduled to open this month.

"As a consequence, we have closed the hotel pre-opening office in Kuala Lumpur and have ceased marketing activities at this stage," Jumabhoy said via e-mail.

A question on the likelihood that Rendezvous could return to Taragon, located on Changkat Thambi Dollah off Jalan Pudu, was unanswered.

A check on RHG's official website still stated that "under the brands of Rendezvous Hotels and The Marque Hotels, the group comprises 15 hotels with 3,350 rooms across Singapore, Australia, New Zealand and China, including a hotel under development in Malaysia".

A press release dated March 1 2010 on the appointment of Freddy Sim as the general manager for the hotel, is also available on the website.

Meanwhile, a spokesperson for Taragon when asked about these developments said: "Work on the site is on schedule and the hotel will open by January 2011."

In an interview with Business Times in March this year, Sim had said that Rendezvous was leasing the hotel portion and will also manage it. The duration for the lease was for 12 years plus six option years.

This leasing agreement in itself is unique in the Malaysian market, as most hotel operators here either own and manage or solely manage hotels.

RHG, a subsidiary of Straits Trading Co Ltd, is a relatively new but growing Singapore hotel brand. It plans to have 12,000 rooms by 2020.

RHG manages hotels under the Rendezvous and Marque brand through Rendezvous Hotels & Resorts International.

Asked about future openings for RHG in Malaysia, Jumabhoy said: "While we have no definite plans for Malaysia at this point in time, we are always on the lookout for any opportunity in the Asia-Pacific region."

By Business Times

KLCC Property wants single tenant for Lot C office building

KLCC Property Holdings Bhd is looking to secure a single tenant for its 840,000 net lettable sq ft Prime A office space at the Lot C development, located next to the Suria KLCC shopping centre.

"We are in discussions with a party," KLCC Property director Datuk Manharlal Ratilal told reporters after its annual general meeting in Kuala Lumpur yesterday.

He declined to elaborate.

Lot C's office building is due for completion by October 2011.
Its retail podium, which is expected to add another 140,000 sq ft of retail space to Suria KLCC, should be ready by the year-end, with the tenants moving in 2011.

"The retail podium will be contiguous of Suria KLCC. It will complement the retailers there (Suria KLCC) and allow Suria KLCC traffic to flow into it," KLCC Property chief executive officer Hashim Wahir said.

For the past three years, Suria KLCC has been registering more than 40 million footfalls (or the number of people who visit the mall) a year. Of this, 20 per cent are foreigners.

Lot C has a development cost of close to RM1 billion.

Another project planned for this year is the re-development of Kompleks Dayabumi.

"We are conducting feasibility studies into it and hope to start work this year," Hashim said.

No investment figure was given.

"This is part of our ongoing effort to improve performance. Kompleks Dayabumi has a lot of room for improvement considering its location," Hashim said.

For the current financial year, KLCC Property has managed to increase its office rental rate for Kompleks Dayabumi in Kuala Lumpur by RM1, from RM4 per sq ft to RM5 per sq ft through internal upgrades.

On the performance of its sole hotel, Mandarin Oriental Kuala Lumpur, Hashim said, occupancy levels for the initial part of the year were back to levels seen in 2009.

Last year, Mandarin Oriental's occupancy rate dipped by 10 per cent to 57 per cent.

By Business Times

LBS Bina to launch RM5b China project next year

Property developer LBS Bina Group Bhd will launch its fourth project, worth over RM5 billion, in Zhuhai, China, in the second half of next year.



The 60:40 joint venture of LBS and Jiuzhou Group, a Chinese government-linked company, has been delayed by three years because of the uncertain economic conditions.

LBS managing director Datuk Lim Hock San said the master plan for the 76ha project comprising high-end residential properties was under way.

He said that its launch had been delayed because of the global economic crisis.

"We took the opportunity to fine-tune the development with new products. We estimate that the project's gross development value (GDV) will exceed RM5 billion," Lim said.
The concept will be similar to the Tropicana Golf & Country Resort in Petaling Jaya, Selangor, which features a golf course, bungalow lots, high-end condominums and some commercial elements, among other things.

Lim was speaking to reporters in Petaling Jaya yesterday after signing an agreement with MIMB Investment Bank Bhd, a unit of EON Bank Bhd, to act as the principal adviser and lead arranger for a RM135 million sukuk (Islamic bond) programme to finance LBS' projects.

The signing was witnessed by Housing and Local Government Minister Datuk Wira Chor Chee Heung.

The sukuk programme will be the first Islamic private debt securities issuance in the country to be guaranteed by Danajamin Nasional Bhd.

Lim said that proceeds from LBS' fund-raising exercise would go towards its new projects in the country, such as Bandar Putera Indah in Batu Pahat, Johor; D'Puchong in Puchong, Selangor; and Taman Royal Lily in Cameron Highlands, Pahang.

The projects, with a total GDV of RM600 million, are slated to be launched in the second half of this year.

Lim also said that LBS was expected to be back in the black this year. It posted a net loss of RM16.8 million last year.

"From January up until now, we have achieved RM180 million in sales. We expect more income in the second half of the year from our new launches.

"The sukuk issuance will enable us to do property development on a whole new level. We are moving to medium- to high-end property development."

LBS' landbank comprises 920ha in the Klang Valley, Batu Pahat, Cameron Highlands, Ipoh and China, which will keep it busy for the next 10 to 15 years.

By Business Times

KLCCP gets strong interest for Lot C project

PETALING JAYA: Despite the uncertainty in the global economy, interest in KLCC Property Holdings Bhd’s (KLCCP) Lot C project is strong.

Lot C will add 140,000 sq ft to the current one million sq ft of retail and office space in Suria KLCC.

Director Datuk Manharlal Ratilal said the RM1bil development would be seamlessly connected to Suria KLCC.

“The project will complement Suria KLCC which has attracted about four million visitors annually for the past three years,” he said.

Of the 4.1 million visitors to Suria KLCC last year, 20% were foreign tourists.

Manharlal said KLCCP was in discussions with some companies keen to rent units at Lot C.

“Global uncertainties come and go and when we are managing a property complex as important as this, it is our objective to maintain a position of strength.

“We will not be too aggressive, (we will) think long term, make sure the project is good and not rush into things. For a complex such as this, we need time to plan,” he added.

KLCCP is also managing the Petronas Twin Towers and Menara ExxonMobil, both of which are fully tenanted.

It is planning to upgrade Menara Dayabumi.

The company also owns Mandarin Oriental Hotel, which is 57% occupied now due to the global economic slowdown.

By The Star

China says no change to property measures

SHANGHAI: China has denied it is easing restrictions aimed at cooling its red-hot real estate market, rattling Asia's major bourses on yesterday after reports that credit controls would be relaxed.

Dealers said the official comments led share prices in Shanghai to close 1.62 per cent lower, with a knock-on effect on Tokyo and Sydney's markets, which also closed lower.

Authorities in China have issued a slew of measures in recent months aimed at preventing the property market from overheating and causing a bubble that could derail the world's third-largest economy.

The Ministry of Housing and Urban-Rural Development has urged local governments to strictly comply with lending policies designed to curb speculative investment in property, according to a statement dated Monday.

The ministry said "positive changes had emerged in the property market" as a result of the measures and repeated it would increase the supply of affordable homes.

Chinese property prices in June fell 0.1 per cent from the previous month, their first monthly fall since the first quarter of 2009, according to official data.

The China Banking Regulatory Commission said in a separate statement that there had been no policy changes or revisions to mortgage requirements for second and subsequent home purchases.

"Commercial banks must strictly implement these rules unwaveringly," it said.

The remarks came after media reports said banks in first-tier cities including Beijing, Shanghai and the booming southern town of Shenzhen had resumed lending to buyers of third homes.

The reports pushed Chinese markets up 0.80 per cent on Monday.

The State Council in April said the down-payment for purchases of second homes must be at least 50 per cent and mortgage rates must be at least 1.1 times the benchmark rates.

The down-payment requirement and mortgage rates for purchases of third or subsequent homes must be "raised significantly" in line with banks' risk management policies, the cabinet said at the time.

Experts were mixed on how well the measures were working so far.

Zhang Gang, an analyst at Central China Securities, told Dow Jones Newswires: "It's too early to expect property tightening measures to turn around as the property prices didn't significantly decline." But Alastair Chan, an economist for Moody's Analytics, said there were signs that government policies were having an effect.

"China's residential property market is showing further evidence that the government's tightening measures are working, and the extent of the slowdown is likely to prompt a policy reversal in coming months," he wrote in a note.

Tokyo and Sydney's stock markets were both down yesterday partly on the decline in Shanghai, traders said, reflecting increasing linkages between the countries' economies.

In Chinese markets, property developers were hit yesterday shedding some of the gains from the previous session.

China Vanke, the nation's largest property developer by market share, fell 2.4 per cent to 7.46 yuan, after having risen 5.5 per cent in the previous session.

Poly Real Estate was down 4.3 per cent to 11.33 yuan after gaining 3.7 per cent the day before.

By AFP