Singapore's Kwek in talks to sell KL land

The parcel of land in Jalan Bukit Bintang could fetch more than RM3,000 per sq ft, possibly a record price for a land deal in Malaysia's history.

Singapore's property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal in this country's history.

It is understood that the selling price for the land, owned by Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 per sq ft.

To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.

CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.

The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.

Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.

Sources told Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.

A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.

In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.

However, replying to a follow-up question from Business Times last week, the spokesperson said: "There are no details on the Millennium Residences available at this point."

When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: "We have no comment at this stage."

Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).

Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.

YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.

By Business Times

CapitaMalls may seek venture in Vietnam

CapitaMalls Asia Ltd, the retail property unit of Southeast Asia’s biggest developer, may seek shopping-center ventures in Vietnam after expanding in markets including China and India.

Singapore-based CapitaMalls may collaborate with its parent company CapitaLand Ltd to explore "interesting opportunities" in Vietnam, Chief Executive Officer Lim Beng Chee said.

CapitaLand, which is building homes in the nation, said this year it expects properties in Vietnam to make up 10 per cent of its assets in three to five years from about 1.5 per cent now.

“If they come across something interesting that we could look at for a shopping mall, we can tap on their expertise to go into the market,” Lim said in an interview in Singapore late yesterday.

CapitaMalls is seeking retail projects in Vietnam as the economy expanded 6.4 per cent in the three months through June, compared with 5.8 per cent in the first quarter. The company also plans to invest S$800 million (US$592 million) to S$1 billion in the second half in Singapore, Malaysia and China, it said yesterday.

The retail property operator will also open three more malls in China by the end of the year in addition to the four properties it recently acquired, Lim said.

"There is definitely a positive outlook on retail in the region," said Ong Choon Fah, head of research at DTZ Debenham Tie Leung in Singapore, a real-estate consulting group. Lifestyle changes in the region "will support retail, but it’s very competitive. There will be some that do exceedingly well, and there will be some that fall to the wayside."

CapitaMalls said yesterday its second-quarter profit fell 24 per cent to S$113.1 million as it booked a smaller gain from the increase in value of its properties. Without the one-time changes, earnings would have increased six times, it said.

In Singapore, CapitaMalls plans to eventually offer its ION mall development along the Orchard Road shopping belt to CapitaMall Trust, the island state’s biggest real-estate investment trust, which it manages. The sale will only be considered when the property is "stabilized," Lim said.

By Bloomberg

Sime aims to double revenue from healthcare

Sime Darby Bhd, the country's largest conglomerate, wants to double its healthcare revenue in three years, looking for land outside the Klang Valley as well as Sabah and Sarawak to build its hospital portfolio.

The healthcare division currently contributes less than 5 per cent to group revenue.

Last year, Sime Darby posted a net profit of RM2.3 billion on a revenue of RM31.01 billion.

Sime Darby Property Bhd managing director Tunku Datuk Badlishah Tunku Annuar said the group may buy land to build its own hospitals or co-develop with others.

Tunku Badlishah said it may also consider buying existing hospitals and refurbishing the properties.
"It can be costly to set up a hospital. Returns on investment can take a while. The best thing is to form smart partnerships like what we did with Perdana ParkCity (Sdn Bhd)," he said.

Perdana ParkCity, a unit of the timber-based Samling group, is building a RM143 million hospital on a design, build and lease concept in the Desa ParkCity township in Bukit Menjalara, Kuala Lumpur.

The 300-bed hospital, called Sime Darby Medical Desa Park City, will operate by first quarter of 2013.

Sime Darby Healthcare has an agreement with Perdana ParkCity to lease the hospital for 15 years.

"We are bullish on the hospital, which is dedicated to women and children's healthcare. It will have good catchment," he said after the ground breaking ceremony at the project site yesterday.

It was officiated by City Hall director general Datuk Salleh Yusup. Also present were Sime Darby Medical Centre Subang Jaya chairman Tengku Datuk Ahmad Shah Sultan Salahuddin Abdul Aziz Shah, Perdana ParckCity chairman Yaw Chee Siew and chief executive officer Lee Liam Chye.

The hospital will comprise a three-storey podium block featuring full service outpatient clinics, advanced diagnostics services, six operating theatres, a 20-bed critical care unit, and a six-storey ward.

It will be the fourth full-fledged hospital operated by Sime Darby Group.

It now owns and operates the 393-bed Sime Darby Medical Centre (previously known as the Subang Jaya Medical Centre) in Subang Jaya and the Sime Darby Specialist Centre Megah in Petaling Jaya.

The group recently acquired a 220-bed Sime Darby Medical Centre Ara Damansara, which is under refurbishment and will open by 2011.

By Business Times

Dijaya, IWSB in Danga Bay venture

Property developers Dijaya Corp Bhd and Iskandar Water Front Sdn Bhd (IWSB) will jointly develop two parcels of prime waterfront land at Danga Bay, Johor Baru, into a mixed development project that carries a gross value of RM3.8 billion over the next 12 years.

Goldhill Quest Sdn Bhd - a 60:40 joint-venture between Nagasari Cerdas Sdn Bhd (a wholly-owned subsidiary of Dijaya Corp) and Global Corporate Development Bhd, which is wholly-owned by IWSB - yesterday sealed the deal to purchase the land for the project from Danga Bay Sdn Bhd for RM308 million or RM190 per sq ft.

Johor Menteri Besar Datuk Abdul Ghani Othman witnessed the signing of the sale and purchase agreements for the two parcels of land totalling 14.8ha in Johor Baru.

It is one of the biggest private land deals since the inception of Iskandar Malaysia in 2006, where it is located.

Dijaya was represented at the signing ceremony by its chairman Datuk Rohana Mahmood and managing director Datuk Tong Kien Onn, and IWSB by its chairman Johar Salim Yahya and chief executive officer Datuk Lim Kang Hoo.

Also present was Dijaya group chief executive officer Tan Sri Danny Tan Chee Sing.

Dijaya is planning an integrated development in Danga Bay, featuring prestigious commercial, residential and leisure properties.

The group is known for its flagship Tropicana Golf and Country Resort development in Petaling Jaya.

Abdul Ghani said the initiation of the project is a milestone in the development of Iskandar Malaysia as it represents the first major interest among local investors in the development corridor.

"It's an interesting investment trend as we at Iskandar Malaysia had started with those from the Middle East and Europe and countries such as South Korea.

"Now there seems to be a flurry of investment enquiries among the local companies. We are now looking at a potentially good mix of foreign and local investments in Iskandar Malaysia."

Abdul Ghani attributed the growing interest among local investors towards the development corridor to the level of commitment by the government and agencies tasked with making it a success, as well as the practicality of the area as the best choice of investment in the region.

By Business Times

Dijaya banking on Iskandar’s attraction

Tan Sri Danny Tan Chee Seng (left) and Iskandar Waterfront Sdn Bhd chairman Johar Salim Yahaya at the signing of agreements between their companies yesterday

JOHOR BARU: Dijaya Corp Bhd is banking on the long-term sustainable development of Iskandar Malaysia as the main attraction for its Danga Bay project here.

Group chief executive officer Tan Sri Danny Tan Chee Sing said apart from the project’s location on the prime waterfront land, Johor’s close proximity to Singapore would also be another selling point.

“The time is right for us to come to Iskandar in view of the good progress in the economic growth corridor since its launch,” he said at a press conference at the signing of the sales and purchase agreements for two parcels of land, totalling about 14.97ha in Danga Bay, for RM308mil.

The land is being acquired by Goldhill Quest Sdn Bhd – a 60:40 joint-venture between Nagasari Cerdas Sdn Bhd (a wholly-owned subsidiary of Dijaya Corp) and Global Corporate Development Sdn Bhd, which is 100% owned by Iskandar Waterfront Sdn Bhd.

Tan said Goldhill Quest would develop the project, which has a total gross development value of RM3.8bil, over the next 12 years.

Components of the integrated waterfront development project would include a stand-alone retail mall, four- and five-star hotel towers and serviced apartments blocks, he said.

“The project is likely to be known as Tropicana @ Danga Bay, after our flagship Tropicana Golf & Country Resort in Petaling Jaya,” Tan said.

Meanwhile, Johor Mentri Besar Datuk Abdul Ghani Othman said demand for high-end properties in Iskandar was on the upward trend and Singaporeans would be the major buyers for these properties.

He also said Khazanah Nasional Bhd and Temasek Holdings Ltd’s proposed joint-venture iconic wellness township project in Danga Bay augured well for Iskandar.

By The Star

KYM, Vale agree to extend deadline for property sale

PETALING JAYA: KYM Holdings Bhd has mutually agreed with Harta Makmur Sdn Bhd and Vale Malaysia Manufacturing Sdn Bhd to extend the cut-off date for a sale and purchase agreement (SPA) involving 13 parcels of leasehold properties to Aug 31.

In a filing with Bursa Malaysia yesterday, KYM said the parties had signed a conditional SPA on March 31 pursuant to Vale exercising its option to purchase the properties, totalling 305.94ha, from KYM’s 54%-owned unit Harta Makmur for RM93.76mil cash.

Harta Makmur last year sold 485.6ha of leasehold land in Teluk Rubiah to Vale for RM195.7mil.year.

In a separate statement, KYM said its wholly-owned unit KYM Built Sdn Bhd had on July 29 accepted a contract from Vale Malaysia for the refurbishment of a building for the use as a site office and upgrading of the main entrance at Teluk Rubiah, Perak for RM300,265.

“The contract is expected to commence next week and will be completed within a month.

“None of the directors or major shareholders or persons connected to the directors or major shareholders of KYM has any direct or indirect interest in the award of contract,” it said.

By The Star

HK property prices set to rise another 15pc

HONG KONG: Hong Kong home prices will rise another 15 per cent in the next 12 months as limited supply forces buyers to pay more for property that’s already expensive, CLSA Ltd’s Nicole Wong said.

Prices will increase because the city’s promising job market and growing wealth will help drive demand for real estate while supply doesn’t increase much, Wong, the regional head of property research for CLSA, said at a media briefing yesterday .

“Is Hong Kong real estate too expensive? Definitely,” Wong said.

By Bloomberg

UEM Land expects brisk Symphony Hills sales

UEM Land Holdings Bhd, the real estate investment and property development arm of UEM Group Bhd, believes its first phase of landed properties launched in Cyberjaya will be snapped up within weeks as homebuyers see value in the properties.



"When one sells, one must sell value," said managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim in Cyberjaya last Saturday.

Its new development, dubbed Symphony Hills, was unveiled to special invited guests on Saturday.

Wan Abdullah said the response has been "very good" so far as there were interested buyers keen to book the properties prior to the official launch.

Based on its opening weekend alone, it has sold more than 40 units valued at about RM60 million.
He said these landed properties are sold for about RM320 per sq ft, which is competitive against its other landed property developers within the vicinity.

However, he believes Symphony Hills offers greater value to its peers because it is based on the "Connected Intelligent Community" platform. It will also have a clubhouse.

"It's like buying a condominium, only that it is a landed property. So, at about RM320 per sq ft, homebuyers should be able to see the value and potential of it," he said.

The company's residential property development project in Cyberjaya will comprise of 450 units of terrace and semi-detached houses, as well as over 500 units of low-rise apartments.

For the first phase, it will only unveil 122 units of landed properties.

Symphony Hills is also the company's maiden project in Cyberjaya.

There will be four designs of houses under the first phase, namely Beethoven, Mozart, Schumann and Schubert.

The Mozart and Schubert units are terrace houses, while the Schumann units are townhouses, and Beethoven units are semi-detached houses which the company calls it as twin villas.

Mozart and Schubert terrace houses come in various sizes, ranging from 3137 sq ft to 3703 sq ft.

The Schumann townhouse comes in studio and duplex units, while the Beethoven twin villas comes in two types: the three-storey Twin Villa with a total built-up area of 5,661 sq ft and the two-storey version (4,620 sq ft).

Wan Abdullah said more and more people are considering living in Cyberjaya these days, as it is now "more convenient" for people to travel to Cyberjaya.

By Business Times

Dijaya plans RM3.8b Danga Bay project

Property developer Dijaya Corporation Bhd has bought two parcels of prime land totalling 37 acres in Danga Bay, Iskandar Malaysia, for RM308 million.

The land is being acquired by Goldhill Quest Sdn Bhd, a joint venture between Nagasari Cerdas Sdn Bhd (a wholly-owned subsidiary of Dijaya Corp) and Global Corporate Development Sdn Bhd, owned by Iskandar Waterfront Sdn Bhd.

Johor Menteri Besar Datuk Abdul Ghani Othman, who witnessed the signing of the sales and purchase and joint venture agreements, said the expected gross development value of the land is RM3.8 billion, spanning 12 years.

"The RM3.8 billion investment of Dijaya Corp in Danga Bay is yet another milestone in our continuing efforts to promote and position Iskandar Malaysia as a premier economic zone," he said in Johir Bahru today.

According to him, the sizeable investment by Dijaya and Iskandar Waterfront will have a massive impact on the local economy.

"Local supliers, contractors, professionals and even the man-in-the-street stand to benefit from the investment, which in turn will spur the Johor economy significantly," he said.

Abdul Ghani said more good news were expected as several other prospective investors were now eyeing major property developments in Iskandar Malaysia and Danga Bay.

"In the case of Danga Bay specifically, I'm told several interested parties are now literally knocking on Danga Bay's door, wanting a slice of the action here. This speaks volume about investor confidence and the prospect for world-class developments coming up here," he said.

Abdul Ghani said that investor confidence on Iskandar Malaysia was on the rise.

As at July 2010, the total cumulative investment for Iskandar Malaysia is RM62.32 billion, of which RM25.44 bilion or 40 per cent has been actualised, he said.

Dijaya Corp's group chief executive Tan Sri Danny Tan said the development in Danga Bay will include prestigious commercial, residential and leisure projects.

"This will include office and commercial properties, hotel, shopping complex, condominiums and a full range of world-class waterfront lifestyle projects," he said.

By Bernama

Property market to stay vibrant

Malaysia's property market is due to stay vibrant in 2010 due to low borrowing costs, easier foreign ownership rules and a new home purchase scheme by the nation's biggest pension fund.

Last year, there was a 0.7 per cent drop in the total number of property transactions but the number of unsold properties fell by 13 per cent for residential units.

"This shows that the property market in Malaysia is more resilient and stable, especially in demand locations such as in the Klang Valley," said Housing and Local Government Minister Datuk Wira Chor Chee Heung.

He spoke at the opening of a three-day property fair organised by iProperty.com in Kuala Lumpur yesterday.

The total number of property transactions dropped 0.7 per cent to 337,859 in 2009 from 340,240 in 2008. The bulk of it came from the housing market, making up 63 per cent of the total deals and 52 per cent in terms of value.

"The total number of launches reduced only slightly from 48,830 units to 45,909 units in 2009, possibly due to some cautiousness among some developers. Selangor and Johor remains the leading states with 8,430 units and 7,099 units respectively," he said.

Speaking to reporters later, Chor lauded the Employees Provident Fund's (EPF) latest move, which would boost the local housing industry.

From August 1, EPF will launch a flexible withdrawal scheme for higher-end houses.

The scheme is open to contributors who have not made withdrawals under the existing scheme to buy a house or reduce their housing loans.

According to the EPF, the main difference of the new scheme is that it is designed to give qualifying members, who initially were not eligible for a higher loan, a better chance to boost their loan eligibility.

By Business Times

Empire mall sets RM350m revenue goal

MAMMOTH Empire Holdings Sdn Bhd expects to rake in RM350 million revenue a year from its newly opened Empire Shopping Gallery (ESG) in Subang Jaya, Selangor.

The five-storey lifestyle and contemporary mall features 180 retail stores, with anchor tenants like Tangs, Fitness First Platinum and Jaya Grocer.

ESG is part of the freehold Empire Subang commercial development, which includes the 10-storey, 210-unit Empire SoHo (small office/home office); 12-storey Empire Tower; and 13-storey, 199-room Empire Suites Hotel, a boutique hotel.

The RM450 million development is located next to the KTM station.



Datuk Sean Ng, managing director of Mammoth Empire, said that 90 per cent of the mall has been leased at between RM10 and RM25 a sq ft.

"We expect to lease the balance 10 per cent within the next two to three months. We are selective on the tenant mix as we want to maintain a certain quality," Ng told reporters after the official mall opening yesterday.

Mammoth Empire group executive director Danny J.Y. Cheah said it was looking to build its hotel business.



The Empire Suites Hotel is the first property to be managed and operated by the group.

The group is also developing Empire Damansara in Damansara Perdana, Petaling Jaya, which will feature residential units, SoHo, retail shops, offices and a hotel.

According to Cheah, Mammoth Empire is planning to launch an integrated development and a medium- to high-end gated residential project in Damansara Perdana by the year-end.

The integrated development will comprise SoHo, an office and residential tower, and a third hotel for the group.

Cheah said the master plan and value of the two projects are still being finalised.

"We believe there is a good growth story in Damansara Perdana for hotel, commercial and retail (developments). Early this year, we launched Empire Damansara and it was fully sold in two months," he said.

Cheah added that the group was talking to international operators to manage its hotels in Damansara Perdana.

By Business Times

Redeveloping Kampung Kerinchi

David Khor says Bangsar South City is changing the landscape of the area.

The rapid development of Bangsar South City in Kampung Kerinchi by UOA Group is now changing the landscape of the area that used to be a slum with squatters.

UOA Holdings Sdn Bhd general manager David Khor says the group is braving itself with the challenges and is optimistic of successfully developing the project within a few years.

“We are trying to lift the image of Kampung Kerinchi and along the way, contribute back to the people here by providing new amenities, jobs and upgrading the access roads,” Khor tells StarBizWeek in an interview recently.

The group, he says, is lucky in the sense that when it bought the land in 2005, the squatters had already been assisted by the Kuala Lumpur City Hall (DBKL) to be relocated to the nearby flats.

“Our task that time was to help DBKL to revive the delayed flats and complete them within three months and we did,” he says.

Spanning 60 acres with gross development value of RM4.5bil, the development of Bangsar South is set to be fully completed in the next five to seven years.

“The plan is to have an equal 50:50 ratio of commercial and residential component. About 20% of the development is already completed,” he says.

The development is called Bangsar South City because it shares the same postcode with Bangsar even though the location is in Kampung Kerinchi, says Khor.

Khor says the group is now working together with Kampung Kerinchi residents, with the help from non-governmental organisations, to aid single mothers in need of assistance and provide tuition classes for children as part of its corporate social responsibility.

“We want to uplift the image of Kampung Kerinchi to become the place of choice to live,” he says.

In fact, Khor says this is why the name of Jalan Kerinchi is still used as the address of Bangsar South City.

Before starting the development, Khor admitted that when the project was fully completed, traffic problems might arise as more people come to live and work.

“The result showed that the access roads are still sustainable to handle traffic. However, we do have plans to build new access roads when the time comes,” he says.

Touching on the outlook of property market last year and this year and its impact to the development, Khor says, despite the property market been affected by the economic crisis, the progress of Bangsar South City development has not been impacted at all and there are no delays.

“We believe this year, the outlook will be more positive and promising. Our sales are doing well based on the responds we received for our residential and commercial properties,” he says.

UOA is building grade A offices, retail avenues, boutique condominiums, service suites and a clubhouse. Two blocks of condominium called Acacia and Begonia which are now completed and enjoying 80% sales and in two months, the group will launch the service suites.

On the commercial side, its boutique offices have attracted some of the prominent local and international companies.

“The selling and rental rates for our residential and commercial properties are still competitive as compared to our neighbour, Bangsar, where the price for residential is around RM450 to RM500 per sq ft while the rental rate for our commercial side is around RM5.50 psf,” he says.

Khor says most of the buyers for the residences are local, with many of them being UOA followers over the past 20 years.

In January, Bangsar South City was awarded the MSC Malaysia Cybercentre status by the Government.

The group is now able to attract more MSC-status companies and by 2013, they expect to host some 200 information and communications technology (ICT) companies.

“Our focus is to become an important node in the local telehealth segment in collaboration with key figures in the health ICT industry,” Khor says.

The group has established a 24/7 Cybercentre management office and a one stop centre on its journey to help create, nurture and grow a vigorous ICT in tandem with the MSC Malaysia agenda.

Bangsar South City’s close proximity to Universiti Malaya also ensures availability of qualified graduates to man the demand of Bangsar South’s ICT tenants.

Elaborating further, Khor says the group has set up The Advanced Informatics and Management Centre (AIMaC), aiming to pioneer and become a regional hub for growing eHealth industry, spurring concurrent local development and attracting/fostering local talents.

“At the same time, we are supporting the green technology initiated by the Government by building more environmental friendly buildings that use less energy and planting more trees for a greener landscape,” he says.

For the future plans for the group, Khor says they are looking to buy strategic lands with focus location in the Klang Valley to add up to their existing 100 acres of land banks.

By The Star

Upbeat Crescendo lines up industrial property launches

CRESCENDO Corp Bhd, a property developer based in Johor, plans to launch RM230 million of industrial properties over the next 18 months as improved economy and growing ties with Singapore help boost demand for its industrial properties.

The company is also optimistic on its growth prospects over the next few years.

"We believe this year will be better than last year," said managing director Gooi Seong Lim after Crescendo's annual general meeting in Petaling Jaya, Selangor, yesterday.

The company, whose net profit grew for two consecutive years previously, saw its net profit declining 43 per cent for the year ended January 31 2010.

Its industrial properties, under the Nusa Cemerlang Industrial Park (NCIP) project, were launched about two years ago. To date, it has launched 157 units of industrial properties with a gross development value of RM460 million.

"So far, the response for our properties has been overwhelming. We have sold all the industrial properties that we built," Gooi said.

The NCIP is still at the early stages of development.

"So far, less than 100 acres of the 520 acres have been developed. We are still at Phase 1 of the development. I'm not sure when the NCIP will be fully developed as it is based on demand. But our past experience tells us it will likely take about 10 years for it to be fully developed," he said.

The company is also planning to launch its Bandar Cemerlang township by the end of next year.

Gooi said the decision to launch Bandar Cemerlang, a 1,390-acre mixed-development township, was mainly driven by two factors.

One is the availability of key infrastructure such as an interchange that connects the township as well as the expansion of a highway there from two lanes to four. They are expected to be ready in the second half of 2011.

The other factor relates to the supply issue, which Crescendo expects to taper off sometimes next year.

Gooi said the company will remain focused on developing properties in Johor in the near term.

"We have a landbank of more than 3,000 acres that should keep us busy for sometime," he said.

By Business Times

Building homes for different budgets

The rising cost of living, especially for city dwellers, mean they now have lower disposable income and may need to watch their spending even more closely.

Most Malaysians are trying their best to make ends meet. It is not uncommon these days to find folks juggling multiple jobs to feed their family.

But despite the trying times, more houses and other consumer products are being sold. Strong domestic consumption is a good thing as it can contribute towards a more resilient economy.

Prices of homes have escalated in the past one to 1½ years, and many people who have yet to buy their dream home are now in a quandary as they have to cough up at least 15% to 20% more due to the rise in house prices.

Serious home buyers say it is becoming increasingly difficult to buy landed property in a relatively decent location that is priced between RM300,000 and RM500,000 – which is what the average buyer can afford.

Buyers are somewhat bewildered that property prices have “gone through the roof” within such a relatively short time after the world’s worst financial crisis.

Comments like the following are common, “Unless it is in a really secluded area, nothing is less than RM500,000 these days, even for a double-storey terrace house of just about 20 ft by 70 ft.” Even projects in the suburban and “further away” areas have shot up in prices.

Good landed residential products, especially in mature neighbourhoods with readily available amenities and facilities, are hard to come by these days.

Instead of building more high-rise residences that are already facing an over supply situation, developers should tweak their products wherever possible and offer more landed housing projects.

This will be a good time for developers with sizeable land bank to move forward their project launches. Having the right product type is important as there are various needs to cater to.

Instead of just offering houses that are of one standard size, developers should consider offering a wider range of built-up space to meet the different affordability levels of buyers.

Inflationary pressure could be one of the reasons for the rise in property prices. Of course, market forces play an important role and the latest price hike shows that demand far surpasses supply.

The appetite for house purchases can be attributed to growing confidence among buyers and investors that property is a tangible investment instrument that has proven to be more reliable than other forms of investments.

The relatively sluggish equity market and low bank savings interest rates have also made property investment one of the more viable investment alternatives for Malaysians.

While there are rich Malaysians who will not even bat their eyes over a RM1mil or higher price tag for a typical intermediate terrace house, more than half of the Malaysian population are not “in that league” yet.

They have to turn to bank loans to finance their purchases and have to be prudent about their financial commitments.

After all, buying a property is a big ticket item, more so with the appreciated prices.

While it may sound good to belong to an exclusive residential community, such as a gated and guarded project in a sought after address, buyers have to be prudent and ensure they do not over commit themselves.

The norm is to keep the maximum monthly loan repayment to about a third of one’s take home pay.

Deputy news editor Angie Ng hopes developers will offer more “tailor made” housing products instead of the typical barrack-style houses that are being offered today.

By The Star (by Angie Ng)

K-Euro banks on income from Talam projects

KUMPULAN Europlus Bhd (K-Euro) is banking on residential construction jobs from its associate Talam Corp Bhd for income while waiting for its two major projects - the Canal City and the West Coast Expressway (WEC) - to take off.

The debt-laden firm hopes that its 26.51 per cent unit Talam, would be able to complete its stalled housing projects this year to be able to start selling houses in 2011.

"This financial year we won't lose money," said the company's president and chief executive officer Tan Sri Chan Ah Chye.

He said Talam has another 3,000 units of the total 13,000 units of stalled houses to finish by the end of this year.

Talam which is undergoing a restructuring exercise plans to launch properties as much as RM1 billion by the second half of next year.

"If there are no activities we are going to run at a loss again. So we are going to have activities," Chan told pressmen after the company's annual general meeting in Kuala Lumpur yesterday.

Last year, K-Euro posted a net loss of RM33.1 million. In the first quarter ended April 30 2010, its net loss was RM3.4 million.

Both the RM10 billion Canal City project and the RM3.5 billion West Coast Expressway has been snagged with delays.

K-Euro is hoping to pen a supplementary agreement with the Selangor State Government soon to commence the Canal City project located near Kota Kemuning and Putra Heights in Selangor.

K-Euro is still in negotiations with the the federal government to extend the WEC concession agreement and for changes to be made to the terms and conditions to ensure the project is fundable.

By Business Times

Ibraco to acquire land in Kuching

IBRACO Bhd, a property group, has signed a conditional deal to buy 2.63ha of land in Kuching, Sarawak, from Datuk Wee Song Ching for RM16 million in shares.

Wee, who now holds 4 per cent of Ibraco, will end up with 17.32 per cent of the group after completing the deal.

Ibraco plans to build a shopping mall on the land for RM28 million and construction will start in August this year and finish in July 2011.

It has a letter of intent from GCH (Malaysia) Sdn Bhd, operator of Giant Hypermarket, to become an anchor tenant for up to 30 years.

By Business Times

Fortunes diverge for UK house prices and economy

LONDON: After marching to the same tune for the past decade, Britain’s property market and its economy are going separate ways, and further house price falls look likely into 2011 even if the recovery broadens.

In the three months to June, Britain’s economy grew by 1.1%, its biggest quarterly bounce in four years.

Yet UK house prices, which had become a major economic driver in the boom years, fell in every single month of that quarter according to the Halifax index.

Whilst the economy is expected to continue growing, albeit modestly, the outlook for house prices is grim.

Bank of England data on Thursday showed mortgage approvals slipped in June while lending recorded one of its weakest outturns in the series’ history.

Historically, house prices and GDP growth have had a tight correlation because factors such as credit availability, wage growth and consumer confidence have tended to pull in the same direction.

During the credit boom of the Noughties, that correlation was intensified by home owners borrowing and spending against the rising value of their homes.

But things got out of whack in the spring of 2009 when recession prompted the Bank of England to unleash a wave of monetary stimulus and slash interest rates to 0.5%.

The consequence was that mortgage affordability for those already on the property ladder rose to its highest in a generation, allowing prices to rise even though price/earnings ratios - the traditional valuation yardstick - were at uncomfortably high levels.

While property prices and economic growth are likely to synchronise over the longer term, the divergence could persist over the next few years, particularly if interest rates rise.

“My biggest worry for house prices is in the medium term, when the Bank of England raises interest rates,” said Ray Boulger at mortgage broker John Charcol. “The more people get used to low interest rates, the more of a shock it will be.”

House prices in Britain began their rebound in the spring of 2009, when the country was mired in recession, and rose to within 10% of their late 2007 peak earlier this year.

It is likely, however, that low interest rates have just have postponed an inevitable fall to more affordable levels.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said the ending of the emergency stimulus measures posed a big risk for the property market.

“The stronger the economy, the more likely it is that interest rates will rise and that transitional arrangements after the ending of liquidity support measures won’t be put in place,” he said.

British banks need to refinance almost 800 billion pounds of short term funds by the end of 2012.

This will sap their willingness to lend to homebuyers, particularly when prices are falling and capital buffers need to be rebuilt.

At just over 166,000 pounds, the average price of a home is nearly seven times the average annual UK salary, well above the long term average multiple of 3.7.

Record low interest rates have pushed the cost of servicing mortgage payments to its lowest in 35 years, according to the Council of Mortgage Lenders, but that is little comfort for first-time buyers unable to raise the chunky deposit lenders now require.

Economists, almost all of whom were wrongfooted by the pace of the rebound last year, are growing increasingly bold in forecasting house price falls.

Howard Archer at IHS Global Insight reckons prices will fall 3% to 5% in the second half of this year, with a further drop of 5% to 10% in 2011.

By Reuters

UEM Land to launch Symphony Hills Phase 1

UEM Land Holdings Bhd is launching phase one of Symphony Hills, a RM1 billion five-year residential project in Cyberjaya, and is confident demand will be strong.

In fact, it expects to sell all 122 superlink houses, townhouses and town villas that will be launched this weekend. Prices range from RM1 million to as much as RM2.3 million per unit.

Managing director Datuk Wan Abdullah Wan Ibrahim is optimistic of strong sales judging from the demand shown by both locals and expatriates in the Klang Valley, especially in Cyberjaya.

"We feel Symphony Hills is hitting the market at the right time. There is Maju Expressway improving connectivity between Cyberjaya and Kuala Lumpur.

"Cyberjaya has announced several new international firms coming on board. These include Fortune 500 companies, which will spur demand for new housing. Cyberjaya is going to fly," he said.

Symphony Hills will feature 450 houses. The project will showcase the connected intelligent community (CIC) concept of state-of-the-art technology and high-speed fibre optic infrastructure.

UEM Land is partnering Mesiniaga Bhd and Cisco Malaysia to develop Symphony Hills, which is the first residential development for the company outside of Nusajaya in Johor.

Each house at the 98ha Symphony Hills will have strata landed status, allowing residents to maintain certain aspects of the project from landscaping to security.

The project, which will be certified green, will also have a floating clubhouse incorporating green technology for rainwater harvesting.

"Although the prices are steep, our margins are very mediocre. We won't get 30 per cent to 40 per cent margin, but the satisfaction will come from being the first developer here to offer such a community.

"A lot of budget is being planned on the ICT (information and communications technology) component. We believe in value. We will make decent margins in the next few phases once we have delivered the first batch of houses," he said.

UEM Land wants to buy more land in Cyberjaya, Kuala Lumpur, Penang and Kota Kinabalu to expand.

By Business Times

UEM Land cashing in on Cyberjaya revival

Datuk Wan Abdullah Wan Ibrahim strikes a pose in front of a showhouse at Symphony Hills, UEM Land’s maiden project in Cyberjaya.

CYBERJAYA: UEM Land Holdings Bhd, which will launch its maiden property project in the Klang Valley this weekend, expects “mediocre margins” from the 122 landed strata homes offered under the first phase of its high-end residential development, known as Symphony Hills, in Cyberjaya.

Managing director and chief executive Datuk Wan Abdullah Wan Ibrahim said he was confident buyers would be willing to pay more for future launches at the site once the main components of the development were completed.

“I managed to convince the board of directors that our margins will improve to a ‘decent’ level in upcoming launches after they (buyers) can see what we have delivered,” he told a media preview at the site yesterday.

A number of UEM Land’s projects in Johor have won international acclaim and the company is setting a high target for Symphony Hills.

Going forward, UEM Land will continue to expand its presence outside Johor.

“We have a little war chest that we will use to acquire good landbank in several hotspots,’’ said Wan Abdullah. He identified these so-called hotspots as the Klang Valley, Selangor, Penang and Kota Kinabalu in Sabah.

He said the group would only consider expanding overseas after 2012.

Symphony Hills is located on a 98-acre site near Multimedia University. UEM Land plans to build 2,865 residential and commercial units with a gross development value of RM1bil over the next five to eight years.

Only 410 landed homes are planned for this project, billed as the country’s first “connected intelligent community” development.

“Symphony Hills was conceptualised under a strategic and intelligent masterplan that reinforces aspects of planning, design and technology.

The concept combines the elements of comfort, convenience, community and security,’’ Wan Abdullah said.

The first of the “intelligent” houses will sell for RM1mil to RM2.3mil each, or RM300 to more than RM400 per sq ft, depending on design, size and location.

Wan Abdullah said a “floating pavillion” clubhouse within the development would be ready by the time the first batch of homeowners received their keys.

To ensure the project would live up to its wired and connected billings, UEM Land has roped in network system provider Cisco and Mesiniaga Bhd as partners.

UEM Land is the master developer of Nusajaya, Iskandar Malaysia in Johor, where it has 9,564 acres under various stage of development. The company is also a 25% shareholder in Setia Haruman Sdn Bhd, the master developer of Cyberjaya.

Wan Abdullah credited the Maju Expressway, which significantly cut travel time between Cyberjaya and Kuala Lumpur city centre, as the key to Cyberjaya’s recent revival.

“I believe we are hitting the market at the right time,” he said.

By The Star

Property industry still 'very active' despite FDI slowdown

The local property sector has not been affected much by the slowing foreign direct investment (FDI) last year and can cope with the pressure, Housing and Local Government Minister Datuk Wira Chor Chee Heung said.



"All I can say is that the development of the housing industry in the country is very active. Although there is a reduction in FDI, we can still withstand (the pressure)," Chor told reporters on the sidelines of the 13th National Housing and Property Summit in Petaling Jaya, Selangor, yesterday.

He was asked to comment on the United Nations Conference on Trade and Development report which said that FDI in Malaysia had plunged more than 80 per cent last year.

Chor said that units offered at property launches in the Klang Valley, in particular, were quick to be taken up by buyers.

"This is probably because Malaysians have high saving rates that enable them to buy these properties.

"Added to this, the prices of properties in the country are still relatively low compared to neighbouring countries."

Chor said foreign investors were still keen to participate in the property industry here as they were optimistic of opportunities to make profits.

He said there were no worries at the moment that rising prices could lead to a property bubble, adding that the government had no plans to control prices.

"There is no property bubble in the country as demand and supply is matched properly. There is no fear of a property bubble here.

"We have not reached the stage yet and the mechanisms are right in place. It is still manageable," he said.

Chor, who is also MCA vicepresident, criticised the DAP for publicly calling for the removal of the 5 per cent discount for Bumiputeras to buy luxury homes.

"The MCA had discussed the idea of slashing Bumiputera discounts for luxury homes even before it was raised by DAP's PJ (Petaling Jaya) Utara MP (member of Parliament), Tony Pua, last week.

"But we did not bring it up in public until a proper study and consultation is made. Unlike them, we just don't simply say anything that crosses our mind."

Chor was responding to Pua's suggestion to the Selangor state government to remove Bumiputera discounts for luxury homes and commercial properties in the state to boost competitiveness and restore investor confidence.

"We have to look at the statistics and discuss the matter thoroughly, including getting feedback from the Bumiputeras themselves," he said.

Chor, however, said the MCA felt that it would be better if the rich Bumiputeras did not take the 5 per cent discount, but channelled that instead to help the poor Bumiputeras.

By Business Times