IJM's RM4.3bil development project

An artist’s impression of the RM4.3bil The Light Waterfront project phase two

GEORGE TOWN: A performing arts centre, a green shopping mall, marina, convention centre, and an IT hub to accommodtae MSC-status offices are among the key components of IJM Land Bhd’s RM4.3bil The Light Waterfront phase 2 project, located next to the Penang Bridge.

IJM Land managing director Datuk Soam Heng Choon said this at a recent press conference to unveil the components of The Light Waterfront phase 2 project.

The project’s construction work would start in 2012 when the ongoing exercise to reclaim 210 acres was completed, he added.

So far, IJM Land has reclaimed 42 acres for phase 1 of The Light Waterfront scheme, comprising 1,177 condominium units and gated-landed residential properties, which has an estimated gross development value of RM1.2bil.

“Out of the 210 acres, 152 acres are for the first, second and third phases of the project.

“The remaining 58 acres are reserved for the group’s future projects.

“It will take about 10 years to complete the second phase project from 2012,” he said.

Soam said the performing arts centre would be housed in an iconic building, equipped with seating for 2,000 people.

“There is a sea-fronting amphitheatre next to the performing arts centre.

“The marina that we are planning will have about 250 berths for yachts to park.

“There will be two four-star hotels, catering to the family and business markets, and a five-star business class hotel linked to a convention centre.

“There will also be a 40-storey IT building to house MSC-status companies. The green mall, which will have about one million sq ft of lettable area, provides street shopping facilities and a green environment,” he said.

The entire Light Waterfront project has an estimated gross development value of RM5.5bil, comprising three phases.

“The final and third phase is a seven-acre seafronting park,” he added.

Soam said the group has sold over 60% of the 416 condominium units launched so far under phase 1.

These properties were sold for between RM650,000 and RM1.8mil each, added Soam.

“We will be launching more residential properties for The Light Waterfront phase 1 towards the end of the year and early 2011,” he said.

By The Star

China housing prices to start dropping in 4Q

BEIJING: Chinese property developers are facing strained cash flows and will be forced to cut prices beginning in the fourth quarter, a state newspaper reported on Tuesday, Aug 24, citing several bankers.

Beijing has strictly controlled financing to real estate developers by limiting their lending from banks and fund raising from capital markets, part of its efforts to cool speculative purchases and prevent prices from rising too fast.

"As far as we know, property developers are feeling very strained cash flows now and many of them have made preparations to tighten their belts," the official Shanghai Securities News quoted an unnamed executive at the Shanghai branch of China Everbright Bank as saying.

Property developers purchased a large amount of land lots in 2009 when the market was booming. Under current regulations, they are not allowed to hold land for a long period of time without developing it and have to speed up construction. That will likely increase the supply of housing in the coming quarters, the newspaper said.

"Housing prices will probably show an evident drop as early as from the fourth quarter (4Q)," the newspaper quoted another unnamed banker at Shenzhen Development Bank as saying.

Earlier this month, the National Bureau of Statistics reported that housing prices in 70 major cities were unchanged in July from June.

But the National Development and Reform Commission said property prices in 36 key cities actually rose 1.6% in July from June.

By Reuters

Can Penang ride its property boom wave?

The success of Penang's bid to woo new investors will hinge on how its government handles the needs of existing investors who are in mega property-related projects.

In the face of an anticipated property boom in Penang, with the prices in upmarket areas likely to cost more due to land scarcity and a hike in building materials and labour costs, the state government's move to request for proposals (RFP) for the development of selected pockets of land is timely.

The good times, which the property players are looking forward to, is also expected to serve as a challenge for the state authorities over the next two years. This is inevitable as all eyes will be trained on the island state, where major reclamation projects by the private sector are due to pick up speed.

As the state government looks at unlocking the value of land that it owns in areas like Bayan Mutiara in the southwestern corner of the island, the manner in which it handles the needs of other property players who are also engaged in land-reclamation developments will be scrutinised over the next two to three years.

The Penang authorities have issued an RFP to develop over 40ha of land at Bayan Mutiara, where the Penang Development Corp's property arm - PDC Properties - has already built and sold high-end properties which make up the first and second phase of its D'Residence development.

In June 2007, PDC sold a 0.82ha plot of land at Bayan Mutiara to the Inland Revenue Board to build a 16-storey corporate tower there.

The Marine Police department had also reportedly invested in about 4ha of land within the development.

The RFP, which invites local and foreign parties to develop 24.8ha of Bayan Mutiara, which is located south of the Penang Bridge, with the potential of developing an additional 14ha via reclamation in future after the development of the initial 24.8ha.

A stone's throw from the Bayan Mutiara development is an iconic waterfront project taking shape, called "The Light" carried out by property giant IJM Corp Bhd.

IJM's subsidiary, Jelutong Development Sdn Bhd (JDSB), was awarded the privatised construction of the Jelutong Highway by the Penang state government in 1997. As part of the privatisation agreement for the construction of the expressway, JDSB was granted the right to reclaim 130ha of land for development. No deadline has been set on when the company will need to complete the entire reclamation.

On the other side of the island closer to the city centre of George Town, high-end property developer Eastern and Oriental Bhd (E&O) has embarked and completed many facets of the first phase of its masterplan waterfront development project, Seri Tanjung Pinang (STP).

The development project is set on reclaimed area at Tanjung Tokong, located to the immediate north of the seafront promenade Gurney Drive.

E&O has an exclusive right (via a concession agreement with the Penang state government) to reclaim, sell and develop 392ha in the area.

E&O has yet to embark on the second phase of STP's development, covering 296ha, which is expected to arise from the seabed, in the form of multi-linked islands just off the coast.

Unlike IJM, E&O has a deadline to meet in completing the entire reclamation exercise for its landmark project.

It is constrained by a 2017 dateline or when the reclamation concession expires, and since it takes an average of three to four years to complete reclamation in deep waters, reclamation ought to commence in about four to five years from now.

In the face of the state government's move to ask for proposals to develop landmark projects in Penang, it is interesting to watch how the authorities are going to manage this exercise in a competent, accountable and transparent manner.

The success of Penang's bid in wooing new investors to the state will hinge on how its government handles the needs of existing investors who are in mega property-related projects.

In the event that existing property players are given a tough time of obtaining the necessary approvals for their projects, it is left to be seen if Penang will truly be able to ride the wave of the anticipated property boom.

By Business Times

UEM Land plans to expand overseas after 2012

India looks promising and there is massive need for housing, says UEM Land's managing director and chief executive officer

UEM Land Holdings Bhd, a global community builder, will be ready to expand overseas after 2012 when it has a certain number of projects to market.

"That is one of my key performance indicators (KPI). India looks promising. There is massive need for housing," managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said in an interview recently.

UEM Land's current projects include development of state administration complexes at Kota Iskandar, Puteri Harbour waterfront, Southern Industrial and Logistics Clusters, Alfiat Healthpark and residences, all in Nusajaya in Johor.

The company has 3,400ha of undeveloped land in Nusajaya, targeted to be developed by 2025.
Wan Abdullah said UEM Land is looking at various means of expansion and diversification of location to boost earnings.

It is in various stages of negotiations to secure land at several identified areas in Kuala Lumpur, Selangor, Penang and Sabah.

The company is also looking at township development and niche projects and expects to announce several of these deals by the end of this year, Wan Abdullah said.

"My current price-to-earnings ratio is 80 times. It is not matching my market capitalisation. That is why we need to embark on identifying new projects elsewhere," he said.

UEM Land recently branched out to Cyberjaya, Selangor, to develop Symphony Hills, a RM1.1 billion high-end housing project.

"With Symphony Hills and its 'Connected Intelligent Community' value proposition, we believe that we are heading in the right direction," he said.

UEM Land has RM250 million to spend after it exercised its rights issue in April, which saw RM970 million being raised. Part of the proceeds was used to repay debt and for working capital.

Wan Abdullah said UEM Land will not raise funds for the next three years. It will borrow from banks for new projects.

The group is still working on its headline KPI to achieve 36 per cent revenue growth year-on-year and 6 per cent return on equity.

For its financial year ended December 31 2009, UEM Land posted a 54 per cent jump in net profit to RM115.6 million on RM403.1 million revenue.

By Business Times

Pros and cons of suburban malls

With so much shopping mall space already taken up in the Klang Valley, developers are turning toward building suburban malls in residential areas.

One such example is the new 470,000 sq ft SSTwo Mall along Jalan SS2/75, set to open in the fourth quarter of this year.

The imminent opening of the new RM180mil mall is causing some uncertainty among residents in that area.

Says a resident: “The development of this mall will cause traffic jams along the main roads. Also, parents picking up children studying in Sekolah Kebangsaan Taman Sea will add to the traffic. Security may become an issue if cars resort to parking in our housing area.”

She says the close proximity of Tropicana City Mall makes it difficult to understand the objective behind the development of SSTwo Mall.

Indeed, there are questions that should be asked about this new mall. For instance, Tropicana City Mall is located a stone’s throw away – why build another mall so close to it?

Both malls appear to be targeting a similar income group (the middle to upper household income bracket) and will attract customers from the same area, so surely SSTwo Mall will suffer from a lack of tenants or shoppers?

Henry Butcher Retail managing director Tan Hai Hsin rejects this notion. “At the moment, there is no large shopping centre in Petaling Jaya that offers one-stop retail facilities. SSTwo Mall could replace Jaya Shopping Complex as the retail icon of PJ,” says Tan.

What about the increasing number of shopping centres in the Klang Valley?

“Market saturation is irrelevant to this shopping complex. The challenges that SSTwo Mall faces are more localised, such as its ability to offer products and services different or better than its competitors, while staying relevant with its target customers,” he says.

This is also a view shared by Asian Retail Mall Fund II (ARMF II), the developer of SSTwo Mall. ARMF II is managed by Pramerica Real Estate Investors in Singapore.

“Malls are built to cater to segments of the population with varying needs and demands. For SSTwo Mall, we aim to become a community-centric establishment for the SS2 community, providing the residents with a comfortable venue to dine or shop with their families,” says a spokesman from ARMF II.

He says that the mall was designed with the surrounding residents and families in mind.

The residents living in the apartments directly along Jalan SS2/75 are the ones who will benefit the most from the new mall.

There are easily over 2,000 units of apartments along the same road and many of the residents are optimistic about the new mall.

“The opening of SSTwo Mall will be good for the community. It will be convenient for me to dine and buy groceries from the mall, especially if there is a new hypermarket. I will not have to go very far to get the things I need,” a resident from Five Stones tells StarBizWeek.

She says she understands the concerns of residents living in the houses nearby, and urges them to lodge their complaints over difficulties indirectly caused by the mall through the local council – a view shared by the developer.

The story of a mall in an area with different resident views is not a new one.

Malaysian Association for Shopping and Highrise Complex Management member Richard Chan tells of how the development of Atria Shopping Centre in Damansara Jaya had to contend with complaints from residents in 1990.

“Before Paramount Corp Bhd took over what was then known as DJ Centre, the shopping mall was in a mess. The mall was not fully occupied, it was facing competition from neighbouring retail outlets and worst of all, the mall did not meet the needs and wants of the residents, who were worried about the impact of the mall on the community,” says Chan.

“When we took over, we formed a resident association to allow residents to voice their complaints as well as promote discussion. It turned out that residents were worried about the impact of the shopping centre on the location of the night market or pasar malam. So we helped resolve their concern, while convincing the neighbouring shops that we were not a threat,” says Chan.

Paramount Corp’s assurance to the residents that the area would benefit from Atria Shopping Centre won them over, something the developers of SSTwo Mall will do well to follow. With a net lettable area almost 100,000 sq ft larger than Tropicana City Mall, and almost 2½ times larger than Centrepoint, it is fair to say that SSTwo Mall will definitely have an impact on the area immediately around it.

Whether the benefits of this new mall will outweigh its cost is yet to be seen. But the obvious conclusion is that there is a price to pay for development.

By The Star

Bolton's Puchong project to be fully developed by mid-2011

BOLTON Bhd's Taman Tasik Prima township in Puchong, Selangor, will be fully developed once the final phase is launched by mid-2011, comprising commercial and residential units worth RM650 million.

It will offer 3,000 units of terraced houses, serviced apartments, shops and a 250,000-sq-ft retail mall on a 8.1ha site, Bolton executive chairman Datuk Mohamed Azman Yahya said.

"It is in planning stage. The final phase will be exciting," Azman said yesterday after briefing the media on The Wharf, a prime commercial project worth RM450 million located within the township.

Bolton expects gross development profit of RM150 million from the final phase over seven years.
The Wharf has 32 blocks of three-storey boutique showroom stratified offices known as BizWalk, 1,002 units of serviced apartments in three blocks, 64 terraced residences and a 302,739-sq-ft retail mall.

Bolton will launch BizWalk this weekend. The showroom offices come in lot sizes of 25ft by 75ft and 39ft by 75ft, each priced from RM2.2 million.

Azman is bullish on sales. "We expect it to be very well received. The market is currently robust. I think it will probably hold for a while," he said.

The mall, worth RM100 million, is expected to be completed by early 2013.

Azman said it is considering to sell it to a retail operator.

He also said that he is confident that the company's sales in current fiscal year will touch RM500 million, helped by new projects.

"We see that for investment opportunities, people still prefer to invest in properties. We see a lot of buying interest from Japan, Singapore and China.

"This year we are getting five to six projects up. A bulk of the earnings will come in a year later, so going forward, earnings would be better," he said.

In the year ended March 31 2009, Bolton posted a net profit of RM18.3 million on revenue of RM292 million.

Its new projects, due to be launched in Kuala Lumpur this year, include SixCeylon at Bukit Ceylon, Arata at Kenny Hills and 51 Gurney at Persiaran Gurney.

Bolton has 240ha of land in Kuala Lumpur, Penang, Kedah and Negri Sembilan, with expected gross development value exceeding RM2 billion.

By Business Times

City’s newest hotel enters the landscape

KUALA Lumpur’s newest hotel, Doubletree by Hilton, opened its doors just before the dawn of Ramadan to welcome guests to a casual and relaxed evening of food, drinks and music.

The excitement of its opening was seen on faces of staff, who worked tirelessly to prepare Hilton Worldwide’s latest hotel to fit into the city’s landscape of international hotel chains.

The landmark location at the busy junction of Jalan Tun Razak and Jalan Ampang welcomed hundreds of guests including officials from embassies, business leaders, company executives and the media to its opening at the grand ballroom.

Hotel general manager Ian Barrow said the first Doubletree property in South-East Asia started off as a dream but its opening signalled the reality of being able to offer Doubletree’s services to guests.


Dive in: Tosca overlooks the pool on the 10th floor of the hotel.

Barrow thanked his team for their effort in readying the hotel for the event and also spoke of the famous chocolate chip cookies that was served hot to check-in guests at the front office.

Doubletree by Hilton Hotels global head Rob Palleschi said Doubletree’s opening was an important milestone for their collection of more than 230 hotels and resorts.

“This hotel in the heart of one of South-East Asia’s most important cities truly demonstrates the refreshing sense of contemporary style and personalised service Doubletree by Hilton continues to pursue and present to the world’s travellers, wherever they stay with us.

“With five hotels now open in important business centres and attractive leisure destinations across Asia and many more deals under negotiation, the Doubletree by Hilton brand continues to gain momentum as a lucrative branding opportunity for owners and developers, which is both flexible for new-build and conversion purposes in the upscale, full-service hotel segment,” he said, adding that the property was the 235th Doubletree property in the world.

Following the short speeches, diners were feted to an array of sumptuous food from Makan Kitchen, Tosca, Cellar Door, Axis Lounge and The Food Store.


Sweet find: Treats of desserts for the guests.

Easily identifiable as the hotel’s pride among the restaurants, Makan Kitchen has a seating capacity of 350 and promises a true Malaysian dining experience.

This dining venue has three live interactive kitchens, featuring Malay, Chinese, Indian, Ibanese, Nyonya and Kristang cuisines.

Besides the food, the exciting change in landscapes from an authentic Iban longhouse setting to the traditional Peranakan style was a feast for the eyes.

Near the pool, one will appreciate Tosca for its roomy elegance, open-door concept and home- style Italian cuisine.

Cellar Door gives diners the luxury of selecting their preferred wines while Axis Lounge at the ground floor is the place to relax for drinks.

The Food Store on the other hand offers the option of having a light meal.

Guests were also taken on guided tours to view the hotel’s facilities.

While Lewis Pragasam and Asia Beat provided the laid-back music, ‘treemen’ were spotted dressed in camouflage as they went about in pairs and obliged for photographs to be taken.

The 34-storey property which rises high in the city’s skyline has 540-guest room.

Managed by Hilton Worldwide, the hotel is owned by MGPA Asia Fund II and is part of a world-class integrated property called The Intermark.

Besides the hotel, The Intermark also has on site a Retail Podium, and a grade A office tower. Another project, an office building, is scheduled for completion in 2012.

By The Star

Redeveloping Kampung Baru

After a number of false starts, there are some signs that the plan to redevelop the 110-year-old Kampung Baru could finally come to fruition.

For one, a bill in parliament that seeks to create a new body aimed at overseeing the development of Kampung Baru, the oldest Malay settlement in Kuala Lumpur.

There is also indication that sometime this year parliament would also consider amending laws that prohibit non-Malays from leasing or occupying land in Kampung Baru.

But it is far from a done deal and the issue of Kampung Baru remains an emotive and tricky one. Numerous challenges therefore remain.

Kampung Baru is made up of 378.93 acres, the bulk of which is under Malay reserve land. It is estimated that there are 4,300 lot owners in Kampung Baru, spread across seven villages.

It has a long illustrious history as part of the Government’s effort to promote Malay settlement in the capital city. Set aside as a Malay Agriculture Settlement reserve on Jan 12, 1900, it is one of the last remaining neighbourhoods in the city with a distinctive Malay traditional houses and way of life.

Located in the shadows of the Petronas Twin Towers, it is an anomaly of a traditional and largely undeveloped residential enclave surrounded by gleaming high-rise office and residential buildings.

A drive around the settlement shows mostly traditional Malay houses and low-rise shop houses and apartments. The roads are narrow and many of the houses are built close to each other.

Strong political will

Prime Minister Datuk Seri Najib Tun Razak announced in early February that Kampung Baru will be redeveloped under a concept that will not require relocation of the residents and landowners. He said the residents and landowners will have the right to determine the form of development to suit their requirements.


Datuk Nur Jazlan Mohamed ... ‘There must be a mix in the new Kampung Baru.’

A bill on the setting up of Kampung Baru Development Corp (KBDC) is to be tabled at the next parliament seating. It is now at the drafting stage.

The main role of KBDC is to be the development agency to monitor, coordinate, supervise and act as a mediator between the developers, landowners and shareholders.


Despite the Government’s commitment, not all the 4,300 lot owners are lending their support.

Some object to the very idea of letting non-Malays lease property in Kampung Baru. Others are asking for very high prices for their land. In the past, they have asked for RM1,000 to RM2,000 per sq ft (psf) .

According to some valuers, development land in Kampung Baru is fetching between RM200 and RM350 psf now, with a very small number of sales hitting above RM500 psf, according to property valuers.

In fact, previous attempts to revamp the Malay reserve settlement have failed due to difficulties in getting consent from the owners and beneficiaries. The situation is compounded by Muslim inheritance laws that split the parcels into smaller plots.

The key ‘must haves’

What will it take for the Kampung Baru redevelopment plan to work out this time?

According to property consultants and valuers, one of the foremost pre-requisites is a strong political will from the Government and its implementation must be government-driven. There must also be a review or change existing laws that prohibit non-Malays from leasing or occupying land in Kampung Baru. There must also be a comprehensive master plan, experts say.

One person who has been keeping a close tab on what is going on at Kampung Baru is Datuk Abdul Rahim Rahman, executive chairman of real estate consultancy Rahim & Co.

The senator, who has recently made a presentation on Kampung Baru to the senate, stresses the need to establish the KBDC and removal of restrictions for non-Malays to lease or occupy the properties.

“As the development agency, KBDC should spearhead the development (but should not have approving power),” he tells StarBizWeek.

The change to the law on land ownership restriction in Kampung Baru to allow non-Malays rent or occupy properties there is expected to be raised in parliament by the end of this year, he adds.

Abdul Rahim explains that the restricted Malay title of the land and properties in Kampung Baru means it can only be sold to Malays and this has made Kampung Baru hard to develop as the market is restricted.

“The law not only restricts the sale of properties to non-Malays but also disallows them from renting or occupying the premises there.”

UDA Holdings Bhd chairman Datuk Nur Jazlan Tan Sri Mohamed echoes Abdul Rahim’s views.

He says if the bumiputra label is not removed, “the quality of whatever being built will be lower and it will immeditely draw a discount and in the long term, the potential for it to increase will be limited.”

“So there must be a mix in the new Kampung Baru. There must be a mix of races so that value may be added to it. There must be a combination of buyers with different purchasing power and a combination of forces with different objectives to give it some commercial attraction. Unless this takes place, the value of Kampung Baru land will be limited,” he emphasises.

James Wong of VPC Alliance, a property valuation firm, concurs that the full market potential of Kampung Baru will not be realised as long as land in Kampong Baru remain as a Malay reserve.

“There must be a balance between maximising the market value of the land and retaining its Malay identity. If condominiums cannot be built and sold to foreigners and high net worth individuals, condominium prices in Kampong Baru will never match those around the KLCC or even Mont’Kiara. This same argument is applicable to office blocks, shopping malls and all other investment grade properties,” he says.

Development model

Abdul Rahim says the master plan for Kampung Baru must be at par or better than that for Kuala Lumpur’s golden triangle area.

“The aim should be to make Kampung Baru into one of the main commercial areas in the city centre. One of the key considerations in the master plan is to determine the land value to clear any confusion among the landowners, how the land owners should participate in the redevelopment, and participation of government-linked companies.”

The right redevelopment model will be to turn Kampung Baru into an international commercial hub with Malay architectural features to retain the Malay history and heritage, Abdul Rahim adds.

Abdul Rahim says that to “kickstart” the development, it is necessary to identify a central core area of 10 to 15 acres to be developed into office buildings to house government entities, and other supporting facilities like retail complexes, hotels and shops.

‘’Instead of developing the whole area concurrently involving more than 4,000 landowners, it will be more viable and manageable to start with a core area.

‘’Once the core area is successfully developed, it will encourage other landowners to participate in the development of the surrounding areas,’’ he adds.

Wong, who is the past president of Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, also stresses the need for a comprehensive master layout plan with clearly defined plot ratios, approved land uses and building heights.

He says it is also necessary to amalgamate the existing small land plots into economic parcels for redevelopment but foresees that it will not be an easy task as the majority of the land in Kampung Baru are fragmented and in multiple ownerships.

“If all else fail, the Government may have to wield the Land Acquisition Act (1960) to compel the land owners to sell their land,” Wong points out.

CB Richard Ellis executive director Paul Khong says the Government may need to implement new redevelopment laws like in Singapore whereby the same concept of consensus from 80% of the residents to a redevelopment proposal will compel the 20% who are not in agreement to accede to the majority.

“But until this is legally in place, the only mechanism available now is the Land Acquisition Act. Under Section 3 of the Act, the land administrator can acquire any land for either public purposes or by any person or corporation for any purpose which in the opinion of the state authority is beneficial to the country’s economic development or to the public generally. Under this provision, the government can legally approach the redevelopment exercise,” Khong explains.

Meanwhile, a property developer says that all plans with regard to the redevelopment of Kampung Baru should be communicated well to the residents there. “The government must tell the people their plans, and how the landowners will benefit from these plans. The people must know that they are not being taken advantage of,” he says.

He adds that the land ownes should be offered a premium for their land as well as the first right to buy into an apartment or office building that is being planned there.

By The Star

What Kampung Baru land is worth

Although land and property values in Kampung Baru have been “locked up” for a very long time and lagged far behind those in Kuala Lumpur’s inner city, property valuers concur that the redevelopment of the oldest Malay settlement in the city should augur well for the landowners.

“The redevelopment will unlock the value of the land and it will be a windfall for them,” VPC Alliance (KL) Sdn Bhd managing director James Wong says.

Wong says it will be difficult to determine a fair long-term value for the Kampung Baru land at this stage as a large percentage of the land will have to be set aside for infrastructures and other services, which will affect the weighted average land value of the land and property.

“The transaction value of development land in Kampung Baru land is in the range of RM200 to RM350 per sq ft. The quantum of appreciation for the land will depend on the implementation policies of the Kampung Baru Development Corp and legislations on how non-Malays and foreigners can participate in the development as well as occupy or buy the completed properties there,” he explains.

Rahim & Co Chartered Surveyors Sdn Bhd executive chairman Datuk Abdul Rahim Rahman stresses the importance of determining the land value to clear any confusion among the landowners.

He says steps are now being taken to value the land and properties in Kampung Baru by both the Government and private valuers.

“With the redevelopment, the land and property value may go up by 100% or more,” he adds.

Abdul Rahim says it will be better to develop Kampung Baru parcel by parcel based on the appropriate land use zoning instead of by lots, adding that local developers can act as development partners to the GLCs.

Wong says that to unlock the value of the land, the Malay Enactment Act needs to be amended to allow long-term leases to be created for non-Malay developers to jointly develop the land with the landowners or the designated government-linked companies.

The Act, which governs Malay reserve land in the respective states, says that the land can only be developed by and sold to Malays.

“It will be necessary to attract non-Malay developers to jointly develop Kampung Baru as they will be able to lend their resources and expertise and share out the costs and risks.

“As demand catches up with supply in the future, the potential new supply at Kampong Baru will be good for the continued growth and development of Kuala Lumpur as a whole,” Wong adds.

CB Richard Ellis executive director Paul Khong says if the Government decides to acquire the Kampung Baru land, there must be a huge budget allocated to finance the entire acquisition exercise first before even redeveloping the land.

“The compensation payable will be very substantial based on development land in the locality being transacted at between RM200 and RM350 per sq ft, and a small number of sales (closer to Sultan Ismail) hitting above RM500 per sq ft. A rough indication of compensation (based on RM500) will be RM500 (per sq ft) x 375 (acres) x 43,560 (sq ft) = RM8.2bil,” Khong says.

He adds that under the Land Acquisition Act 1960, Section 2A of the First Schedule on Determination of Compensation states that in assessing the market value for a Malay reserve land, the fact that it is a Malay reserve land shall not be taken into account except where the scheduled land is to be devoted, after the acquisition, solely for a purpose for the benefit of the persons who are eligible to hold the land under such written law.

“This basically means the acquiring party will have to pay full market value for the land now via the Act, which is over and above what is being transacted in the local market,“ he explains.

Khong says a classic example of such exercise involved the acquisition of Penchala Link for the Sprint Highway where the authorities had to pay full market value (RM70 to RM100 per sq ft) for the Malay reserve land which was actually worth half the value at that point of acquisition in the open market.

He points out that the acquisition party may be faced with a mammoth task to deal with the huge number of landowners.

“One land title could easily have 30 to 100 co-owners now if it has been handed down the generations following the Muslim Inheritance Laws, and given the large area involved, of more than 300 acres, it is quite a Herculean task.”

Also, some of the landowners may not agree to the quantum of compensation payable and may drag the matter to court, says Khong.

“If the values then get out of hand and the compensation payable is too huge, the project may then be no longer economical to proceed.

“Ultimately, the project financial must be viable and, in real commercial terms, it has to also work. Market forces will prevail at the end of the day,” he adds.

By The Star

What the landowners, residents say

Separated by a highway, Kampung Baru is isolated from the progress and modern niceties of the city.

The Government’s decision to redevelop Kampung Baru, a Malay reserve enclave in the heart of Kuala Lumpur, has met with mixed reaction from the landowners and residents who have lived there for many generations.

Based on a valuation done on a 55ha site in March 2007, the land was valued at between RM270 and RM300 per sq ft for housing and RM500 and RM600 per sq ft for commercial lots.


Dr Yusof Ismail ... ‘We support the Government’s decision but we want to know what type of mechanisms it will implement.’

As the land is now worth billions of ringgit, it has caused a lot of concern among the Kampung Baru folks about their future.

“We want to know about our future and what the benefits will be for the landowners if this proposed redevelopment by the Government materialises,” says Kampung Baru Development Association president Dr Mohd Yusof Ismail.

Meeting him recently at the Kampung Baru mosque during the normal busy afternoon during Ramadhan where traders are busy selling food for breaking-fast, the Cornell University PhD scholar talks passionately about the current situation and the feelings of Kampung Baru folks to StarBizWeek.

“I was appointed as president of the association about a month ago and my main task now is to be the voice on behalf of the landowners of Kampong Baru. We support the Government’s decision to redevelop Kampung Baru but we want to know what type of mechanisms the Government will implement,” he says.

Mohd Yusof says meetings among associations, landowners, residents and the Government have been held a few times since the draft of the Kuala Lumpur City Plan 2020 was unveiled in 2008.

“The draft is the starting point of the seriousness by the Government to focus on the redevelopment of Kampung Baru. What the landowners of Kampung Baru want to know is how much they will get from the value of their land and what is going to happen to their land rights,” he says.

At one of the meetings, a proposal to have 60:40 land ratio for Malays and non-Malays was brought up and Mohd Yusof says he was the first person to object.

“However, we agree that properties can be leased or rented out to non-Malays, but there should not be any transfer of titles or ownership. Kampung Baru represents a symbolic presence of the Malays in the capital city. Therefore, it belongs to all Malays in the country and that interest should be safeguarded at all cost,’’ he says.

He says that matter has already been solved when the Government retracted the proposal.

There were three components to the redevelopment plan; one of it is that the Cabinet has agreed that Kampung Baru will be developed comprehensively.

Secondly, that a Kampung Baru development corp will be formed and a bill tabled in parliament to allow for the setting up of the corporation by the end of the year and finally, only a government-linked company will be involved in the project.

It is understood that Permodalan Nasional Bhd has been selected to be the lead developer for Kampung Baru and reports say international real estate valuer Rahim & Co will be appointed to revalue the land.

“If Rahim & Co is appointed for the valuation, they will do it on behalf of the Government. What will happen to us then is we also need to do the valuation from our side so that it will be fair. We may appoint an international valuer.

Mohd Yusof also reveals information he has gathered for the fair basis price of each sq ft in Kampung Baru compared to surrounding areas such Kuala Lumpur City Centre, Jalan Yap Kwan Seng and Jalan Tun Razak.

He believes the price of the land shall be about RM1,000 per sq ft and above.

“To say the price of the land to be only RM350 per sq ft is something unacceptable, whereas the land around Kampung Baru is worth more than that,” he says.

He, however, admits the re-development of Kampung Baru is going to be a long process.

On the measures the Government may undertake, based on the current law, he says the better option to the landowners is either to sell entirely or a portion of the land to the Kampung Baru development corp.

“This, however, needs to come with an attractive price for the landowners to agree,” Mohd Yusof says.

The proposed setting up of Kampung Baru Development Corp by the Government is to protect the interest of the owners and their heirs.

It will also responsible to ensure the owners and heirs receive the fairest deal possible no matter the type of development.

Despite the support from Mohd Yusof and Kampung Baru Development Association on the proposed redevelopment of Kampung Baru by the Government, there is still some reluctance among landowners to agree with the redevelopment.

A landowner let off some steam when asked on his opinion on the proposed redevelopment of Kampung Baru.

“Do you think RM1mil or RM2mil is really worth it. What will happen to our next generation? You think you can bring the money with you when you die?” he says.

By The Star

Origin of the place

KAMPUNG Baru took shape in the late 19th century on 227 acres next to the Klang River just outside Kuala Lumpur. It was one of the projects by the British administration.

The main objective, says historian and academician Tan Sri Prof Khoo Kay Kim, was to provide a place near the town centre where the Malays could live quite cheaply.

By Jan 12, 1900, the Selangor Resident gazetted the area as Malay Agricultural Settlement. Rules were drawn up by the Resident under the Land Enactment 1887 to manage the area and to keep the settlement entirely Malay.


The Rukun Tetangga building just outside Masjid Jamek Kampung Baru in a picture taken in 1982.

The British thought that by building a village setting, they would be able to induce them to come to cultivate paddy. But the ones who came were not the ones who wanted to cultivate the land. They were mainly traders. And because they did not want to leave their village environment, they did not work in the mines or estates.

The land was said to be “partly high flat land and partly swamp” which accounts for the presence of crocodiles. It was also prone to floods. In the early days, each occupant held about quarter of a hectare. Among the first to take advantage of the place were the peons and messengers employed in government offices. The bullock cart drivers, mainly from Malacca, also arrived, followed subsequently by Javanese and Sumatrans.

At that time, transport was crucial. Already, the Malays were rowing the sampans up and down the Klang River to transport goods to take to the interiors for the miners, who were predominantly Chinese.

Gradually, that mode of transport died when the railway arrived in 1886. By 1912, buses and lorries came. The first car came at about 1900.

Although the settlement grew in terms of population, there were problems with sanitation and other issues.

The population grew by a third in five years from 2,600 in 1928 to about 3,500 in 1933. Along with this growth, land ownership became increasingly fragmented. From the initial 196 holdings in 1904, there are today 1,792 lots comprising both Malay Agricultural Settlement and the Non-Malay Agricultural Settlement land like the Dang Wangi and Chow Kit area. From a purely agricultural settlement where land is accounted for in terms of lots, there are today strata titles because low-rise and high-rise exist together with traditional Malay houses.

By The Star

Coming up with a fair and equitable solution is not easy

Talk of developing Kampung Baru is not new. Different prime ministers since Tun Dr Mahathir Mohamad have talked about it. These have remained mere words. This time around, things seem to be moving more definitely.

The daunting challenges faced by past administrations when it comes to developing Kampung Baru remain unresolved until today.

A walk around the community and conversations with the residents reveal the challenges facing the Najib administration if his plans for development are to go ahead. The first is that the holdings are small, averaging about 10,000 sq ft. Development is not possible unless pieces of land are combined together.

The second problem is multiple ownership. One 16,000 sq ft of land belongs to 12 owners. Several years ago, UDA Holdings Bhd, which were doing studies on the area, found that a quarter acre has 72 owners. On average, there are between four and 10 owners for a housing plot.

A third problem is the uniqueness of Malay Reserve Land. As the name implies, only Malays can live and own it. The difference between Kampung Baru and other tracts of Malay Reserve Land like Datuk Keramat and Sg Pencala area is Kampung Baru was specifically built by the British to house the Malays in Malaya’s pre-Merdeka Days. This means that in order for non-Malays to live or buy properties there, laws must be changed.

While these are the three main challenges that may scupper the government ambitions for enclave, there are other underlying issues at stake.

While Kampung Baru is largely tenanted today, there are those who have lived there for three to four generations. Although many of them have sold their properties during the 1980s, many have held on to their properties for rental income while they seek another lifestyle in more contemporary surroundings.

Because the land size averages about 10,000 sq ft, this enables landowners to built concrete houses large enough to accommodate between four and six families. These “new” properties are referred to as “rumah yang ada empat atau enam pintu” (a house with four or six doors), which essentially means a house with four to six households, each family taking two rooms and sharing the common space like kitchen, living area and possibly washrooms. While there are still many elevated Malay-styled houses on stilts which are typical out of a kampung scene, there are also a number of these multiple tenanted concrete housing.

The compensation is considered as a one-off windfall, while rental is a recurring source of income for them. Their ownership also remains intact.

Unless the Government is able to give them satisfactory compensation using some acceptable and transparent formula, coupled with a recurring source of income, as well as first right of purchase of properties at a price they consider as “reasonable”, they may not part with their inheritance. Even if 90% agrees to sell, it would still scupper whatever plans the Government may have, unless that 10% is located at the peripheral.

Although money is a strong incentive, because these are family homes for generations, these personal sentiments do not come with a price tag. They want development, but they also want their land rights to remain intact.

The Government has announced its intention to develop various pieces of land in and around Kuala Lumpur, some of which post far fewer challenges than does the Kampung Baru project.

The other issue is compensation. Landowners do not understand why their land is valued at between RM200 and RM300 per sq ft just because it is Malay Reserve Land when it is located smack in the city. They benchmark their land against the vicinity of Jalan Kia Peng, Kuala Lumpur, which is about RM1,000 per sq ft and the Kuala Lumpur City Centre, which is about RM2,000 per sq ft.

The Government will have to come up with a fair and equitable solution, which is easier said than done. It is a project with far larger implications than just benefiting the land owners and residents.

Assistant new editor Thean Lee Cheng thinks the stake for developing Kampung Baru is very high.

By The Star

Bolton aims to increase sales by 50pc

Property developer, Bolton Bhd, aims to increase its sales by 50 per cent for its current financial year with the launch of more development projects compared with last year.

Its executive chairman, Mohamed Azman Yahya, said with a robust property market outlook, demand was expected to be good. For the financial year ended March 31, 2010, it recorded a pre-tax profit of RM50.7 million on revenue of RM257.473 million.

"Our target this year is to increase sales, by 50 per cent compare with last year -- close to half a billion ringgit in sales this year.

"A lot of developers held back last year. I think we are getting almost five to six projects out this year and the bulk of the earnings from the projects probably will come the year after," he told reporters after unveiling 'The Wharf' commercial hub in Puchong today.

Azman said the 138-hectare project at the Taman Tasik Prima, spread over six hectares of leasehold land, comprised boutique showroom offices (to be launched on Sunday), serviced apartments (Feb 2011 launch), terraced suites and a retail mall (early 2013 completion).

"With a total gross development value (GDV) of RM450 million, the one-stop neighbourhood lifestyle development will be well-received by people," he said.

He said to-date, more than 1,500 units of properties had been sold while some 90 per cent of these units had been completed and handed over.

"With eight hectares left for development at Taman Tasik Prima, Bolton''s development plans include about 3,000 units of terraced houses, serviced apartments, shops and a retail mall.

"These properties will provide the company with a GDV and gross development profit of about RM650 million and RM150 million respectively, over the next seven years," he said.

Azman said the property market was pretty robust and would probably hold. "Bank Negara Malaysia's policy is quite accommodating. The people still prefer real estate and there is a surge in demand from overseas buyers," he said.

Bolton has a landbank of 260ha, of which 70 per cent are in the Klang Valley.

By Bernama

SunCity records impressive results

Sunway City Bhd's (SunCity) profit after tax and minority interest (PATMI) grew by 442 per cent to RM295 million for the period January-June 2010 from RM54 million in the same period last year.

Revenue rose to RM546 million from RM493 million previously.

In a statement today, SunCity said the positive performance was attributed to contributions by both the property development and property investment divisions.

"For the property development division in Malaysia, the major profit contributions were from Villa Manja in Sunway SPK Damansara, Sunway Giza in Sunway Damansara, Sunway Palazzio in Sri Hartamas and Sunway SPK 3 Harmoni in Sunway SPK Damansara.

"As a result of improved economic conditions and strong interest in the property market, all the group’s latest launches have recorded strong sales," it said.

SunCity said todate, it has successfully launched projects with a gross development value of RM966 million during the first half of 2010.

"The group’s first-half sales amounted to RM424 million and have surpassed the budgeted first-half sales of RM411 million.

"With strong sales for all new launches, the group is confident it will achieve the 2010 sales target," it said.

It said the group planned to expand to China to grow the international division.

For the hospitality division, the flagship hotel, Sunway Resort Hotel & Spa continued to enjoy high occupancy due to positive market sentiment which led to increased leisure and business travelling frequency, it said.

It said the leisure segment performed well for this period.
"Sunway Lagoon saw a significant increase in its visitors during the first half of 2010," it said.

Sunway Pyramid Shopping Mall, the crown jewel of its property investment division continued to generate the highest revenue for the group through stable rental income growth, it said.

By Bernama

Ibraco plans to exit PN17 via mixed property project

KUCHING: Ibraco Bhd has announced a proposed regularisation plan to exit the PN17 status that involves embarking on its biggest ever single mixed property development project here.

The project, called Tabuan Tranquility and covering 66ha, has a gross development value of RM512mil.

Located along the Kuching-Kota Samarahan Expressway, the project will comprise 640 double-storey terrace houses, 86 double-storey semi-detached houses, 60 townhouses, 76 four-storey shophouses, 72 semi-detached industrial buildings, 47 residential detached lots and one office block.


Chew Chiaw Han ... 'Earthwork for the project completed'

Ibraco signed a conditional joint development agreement on the project with its wholly-owned unit Ibraco LCDA Sdn Bhd and landowner Wee Song Ching on Wednesday.

The 66ha land is jointly owned by Ibraco, Ibraco LCDA and Wee.

Ibraco will buy the 2.62ha owned by Wee for RM16mil via the issuance of 16 million Ibraco shares.

Ibraco chief executive officer Chew Chiaw Han said earthworks for the project had been completed and infrastructure work was under way.

Chew said the 76 shophouses would be built first, adding that 80% of the units had been sold since the launch more than two weeks ago. The shop houses are priced between RM1.07mil and RM1.8mil each.

“The entire Tabuan Tranquility project is expected to be carried out in phases for completion in 2015.

“We will open sales for the residential properties within three months,” he told StarBiz yesterday.

The project, to be financed by internal funds and bank borrowings, is expected to generate an estimated gross profit of RM82mil.

AmInvestment Bank Group, in announcing Ibraco’s proposed regulatisation plan, said the Tabuan Tranquility project was expected to give the Ibraco group a steady stream of income for the next five years, and that it would contribute positively to the group’s future earnings.

Ibraco was classified a PN17 company after its revenue for the financial year ended Dec 31, 2009 fell below 5% of its paid-up capital.

The plan is expected to be completed by the first quarter of next year, paving a way for the lifting of Ibraco from the PN17 status. On completion of the plan, Wee’s stake in Ibraco would balloon to 17.32%, from 4.03%, and he would emerge as the second largest shareholder.

Sharifah Deborah Sophia Ibrahim, the current single largest shareholder, would see her equity interest diluted to 21.7% from RM25.07%.

Sharifah is the daughter of Ibraco founder, the late Wan Alwi Ibrahim, whose family once held more than 60% stake in the company.

Singaporean Ng Cheng Chuan and Hiap Ghee Seng Sdn Bhd, controlled by Chew, would end up with stakes of 16.61% and 11.08% respectively.

Ibraco has developed more than 404ha in Tabuan and Stutong areas and built over 10,000 properties over the years.

By The Star

Goldis builds profit hopes on GTower

GOLDIS Bhd, an investment company, is optimistic of being back in the black for the rest of the year, helped by rental income from its GTower commercial building in the heart of Kuala Lumpur.



Goldis' first quarter net profit fell 49 per cent, partly caused by the delayed opening of GTower.

To date, the building has 60 per cent tenancy. Goldis aims to raise it to 75 per cent by January next year.

GTower Sdn Bhd executive director Colin Ng expressed confidence that revenue from the building would boost the group's earnings.

Ng was speaking to reporters after the launch of MSC Malaysia status for GTower in Kuala Lumpur yesterday.

Goldis invested RM5 million in the building's fibre optic connectivity and 150,000 sq ft of net lettable area has been allocated for MSC Malaysia-status companies.

GTower is the first fully-certified green commercial building in the country, with grade A++, Green Mark GOLD and MSC Malaysia status.

Meanwhile, Multimedia Development Corp chief executive officer Datuk Badlisham Ghazali said it was planning to open two more MSC Malaysia buildings in the Klang Valley by the year-end.

"We are continuously evaluating more buildings," he said, noting that there are 19 MSC Malaysia cybercities and cybercentres in operation nationwide.

In his speech earlier, Badlisham said the government was committed to the rollout of cybercities and cybercentres to ensure that the development and benefits of MSC Malaysia were extended to the business communities.

By Business Times

PKNS plans more projects

SELANGOR State Development Corp (PKNS) hopes to achieve at least 85 per cent of the RM750 million sales targeted by the year-end.

To date, PKNS has made RM360 million sales. Last year, its sales amounted to RM390 million.

"We are optimistic of achieving at least 85 per cent of the sales target based on the number of projects we have launched this year," PKNS deputy general manager (administration and development) Md Nasir Md Arshad said in Shah Alam, Selangor.

There are more than 50 housing projects being developed by PKNS currently. It has launched 38 so far this year.

The agency plans to launch at least two more after the festive season in Alam Nusantara in Setia Alam and Puncak Tropika in Section 9 Shah Alam.

PKNS is one of the key sponsors for the Selangor Lifestyle and Property Expo 2010 (Selpex 2010), which will be held at the SACC Convention Centre on October 29-31.

The inaugural expo is expected to attract some 30,000 visitors.

More than 100 exhibitors are expected for the three-day expo comprising property developers, financial institutions and interior designers as well as those in the business of home decor items, landscaping, and travel and holiday packages.

Md Nasir said PKNS hopes to generate some RM7 million sales during the expo, with the help of several incentives.

"Due to the overwhelming response we received when we offered incentives at other showcases, we decided to continue with the offerings during Selpex 2010, and will continue to offer them until the year-end," he added.

The incentives include waivers of stamp duty and legal fees, rebates of up to RM10,000, 24 months defect liability period and easy installment schedule for the 10 per cent downpayment.

By Business Times

Kwong Hing buys Menara Pan Global

Property developer and manager Kwong Hing Group pays an estimated RM160 million for the 38-storey building in Jalan Puncak, off Jalan P. Ramlee

Property developer and manager Kwong Hing Group has bought Menara Pan Global, located within the Golden Triangle, for an estimated RM160 million from PanGlobal Bhd, sources say.

Menara Pan Global, a 38-storey building in Jalan Puncak, off Jalan P. Ramlee, houses 18 levels of office space with a total built-up of 400,000 sq ft.

The 18-year-old building also houses nine levels of hotel suites operated by Pacific Regency, while another eight levels have a total of 420 parking bays.

A source told Business Times that Kwong Hing paid a deposit for the purchase last week.

The group, whose prized assets includes Wisma Hamzah Kwong Hing in Lebuh Ampang, now has assets valued at RM600 million.

An official from Kwong Hing declined to comment when contacted.

It is understood that Kwong Hing may invest further to upgrade both the office space and suites to better compete with offices in the Golden Triangle.

The office lots are said to have 70 per cent tenancy.

Similarly, Kwong Hing will do some work on the 153-suite Pacific Regency, famous for its rooftop Luna bar, to improve its average room rate.

This purchase will see the group venturing for the first time into the hospitality sector.

A source said that the management team and the staff of Pacific Regency will be maintained where possible.

However, the name of the building could change.

It is understood that the sale forms part of PanGlobal's restructuring exercise. The company was delisted from Bursa Malaysia in July last year.

The Kwong Hing group's properties include Wisma KH in Jalan Sultan Ismail, Plaza Pengkalan in Jalan Ipoh and Wisma Fui Chui in Jalan Cheng Lok.

It also owns shopping centres along Jalan Tuanku Abdul Rahman and Jalan Petaling and Bangunan HSBC in Medan Tuanku.

By Business Times

Majuperak in tie-up to develop Perak land

KUALA LUMPUR: Majuperak Holdings Bhd announced that its wholly-owned subsidiary, Syarikat Majuperak Bhd, will jointly develop 184ha in Batu Gajah, Perak, with Xtreme New Sdn Bhd.

A memorandum of understanding to facilitate the joint development was executed on Aug 18 and both parties had agreed that a joint-venture agreement would be signed in three months, it told Bursa Malaysia.

By Bernama

Hua Yang to raise up to RM100mil

KUALA LUMPUR: Property developer Hua Yang Bhd is to undertake a fundraising exercise next year to raise between RM50mil and RM100mil which will be used for land acquisition.

“We are exploring a few options such as a bond or rights issuance,” chief operating officer Ho Wen Yan said after its AGM yesterday. (Ho Wen Yan succeeds his uncle Ho Mook Leong as CEO today, according to an announcement to Bursa.)

At present, Hua Yang’s gearing level was 0.3 times and its financial position remained comfortable.

By Bernama