70% loan for third and subsequent houses?

PETALING JAYA: There is speculation that the loan-to-value ratio for the third and subsequent house purchases could be further reduced to as low as 70% from the assumed rate of 80%.

According to sources, talk of a loan-to-value ratio of 70% has surfaced but nothing has been decided yet and discussions are still ongoing.

To recap, Prime Minister Datuk Seri Najib Tun Razak had said on Tuesday that Bank Negara might impose a limit on financing for subsequent purchases after the second property while first-time buyers can borrow up to 90%.

It is reported that there were plans to lower the loan-to-value ratio for the third and subsequent house purchases to 80% from 90%.

The move is aimed at curbing speculative property transactions in a bid to contain escalating property prices.


"The (property) market will have to adjust itself and find a new level", SK BROTHERS REALTY SDN BHD GM CHAN AI CHENG

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng said a reduction in the margin of financing to 70% would affect property sales for investments initially.

“There will be an impact on the property market. The more aggressive and gung-ho property investors may think twice about investing in properties if they have to cough up more money.

“For example, a buyer who will have to pay RM50,000 deposit for a half a million ringgit property will now have to come up with RM150,000,” she said.

That said, Chan admits that most investors would have surplus cash and not overgear themselves by taking a maximum loan when buying a property.

“As with any new ruling, the market will have to adjust itself and find a new level,” she said.

She suggested that the central bank should look at a lower loan-to-value ratio for properties that were more prone to speculation and not impose the rule across the board.



An analyst with Affin Investment Bank said the loan-to-value ratio curb may not be imposed on the entire property industry, hence it should not affect the demand and sales of properties except perhaps in selective locations/projects with a higher rental market.

“However, the guidelines do not appear specific at the moment.

“There are also ways a purchaser can play around them.

“We may not see a sharp pullback in terms of property sales and banks’ mortgage growth to be impacted badly,” she said.

The analyst said more stringent measures, such as regulating the discount on base lending rates (which is currently at 1.8% to 2.2% in the market), barring interest-only payments or the absorption of interest cost by developers during the construction period would have a more drastic impact on property sales and loans.

Other measures include increasing stamp duties or real property gains tax rather than imposing a cap on the loan-to-value ratio or even lowering the cap to 70%.

According to AmResearch’s sensitivity analysis, bank earnings are not so sensitive to changes in loan growth.

“We estimate that every 1 percentage point downgrade to our loan growth assumptions will lead to less than 1% downgrade in net earnings,” it said in a note yesterday. Thus, potential moves to reduce the loan-to-value of property related loans would not lead to any major downgrades to net earnings, AmResearch said.

A bank official who declined to be named said most of the bank’s mortgage borrowers were buying residential property for their own stay and the proportion of borrowers who were buying such property for speculative purposes were small.

“Hence I don’t see the loan-to-value curb significantly hurting our business. We also check the credit profile of our borrowers before deciding on the loan amount so if a customer’s credit rating is not so good we will reduce the loan amount accordingly,” he said.

According to Bank Negara statistics, outstanding loans growth for the banking sector grew 11.9% to RM841.74bil in July year-on-year.

Mortgages make up the largest portion with some 26.8% of the total loans outstanding as at end July.

The National House Buyers Association honourary secretary general Chang Kim Loong said a lower loan-to-value ratio for the third and subsequent house purchases was welcomed.

He said property speculators have caused property prices to escalate throughout the years.

“I would like to suggest that the loan-to-value ratio should be even lower, at say maybe 50%, so that those without upfront cash will not speculate on properties and deprive the genuine buyers from buying a decent house,” he said.

By The Star

Sunway unit in JV to develop Sri Lanka project for RM250mil

PETALING JAYA: Sunway Holdings Bhd, via its unit SunwayMas Sdn Bhd, is tying up with Sri Lanka-based Dasa Tourist Complex Pte Ltd to undertake a mixed development project there with an estimated gross development value of RM250mil.

Sunway told Bursa today that the project in Colombo will involve the construction of residential and commercial units.

The joint venture will see SunwayMas and Dasa Tourist having a 65% and 35% stake respectively.

Sunway said the mixed development will comprise of at least 318,000 sq ft of net saleable areas of residential units and 60,000 sq ft of net saleable areas of commercial units in Colombo city.

“Sunway is constantly on the lookout for new investments. The Group has been in India for more than 10 years and the opening of the Sri Lanka economy to foreign investment and expertise allows expansion of Sunway’s geographical footprint to Sri Lanka which has a higher foreign currency rating as compared to India.

“The proposed JV is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the current financial year ending Dec 31, 2010 but is expected to contribute positively to the future earnings of Sunway Group,” it said.

By The Star

Sunway plans RM250m Sri Lanka project

The RM250 million flagship commercial and residential project in Colombo will be the company's sixth overseas project

Sunway Holdings Bhd will launch its RM250 million flagship commercial and residential project in Colombo, Sri Lanka, by the second quarter of next year.

It will be the company's sixth overseas project. Sunway has four ongoing projects in Singapore and one in China.

Sunway managing director Yau Kok Seng said it expects to get the approvals for the development, comprising a 34-storey tower with 70 commercial units and 180 high-end residences, in four months.

Construction will start immediately and the project is targeted to be completed by mid-2014, he told reporters after the signing of a joint-venture agreement with Sri Lanka's Dasa Group in Bandar Sunway, Selangor, yesterday.
Sunway is developing the project through wholly-owned unit, SunwayMas Sdn Bhd, in a 65:35 joint venture with Dasa Group, which is involved in real estate, tourism and fabrics.

SunwayMas will undertake the development on 0.5ha of freehold land owned by Dasa Group.

Yau said that Sunway was targeting more than 20 per cent net profit for the project.

On the home front, Sunway's profit margin ranges from 15 to 30 per cent, while that from its projects in Singapore is 12 per cent on average.

Yau said the residences in its Colombo project will be sold at more than US$200 (RM620) per sq ft, while the commercial units will be priced from US$350 (RM1,085) per sq ft.

"We are targeting locals and foreigners. We hope to sell up to 80 per cent of the project within the first year of its launch," he said.

Yau added that Sunway will look at further collaboration with Dasa Group as well as other developers in Sri Lanka as it embarks on being a long-term player.

The Sri Lankan government is giving incentives, such as a five-year tax holiday, use of duty-free imported and locally sourced building materials, and repatriation of funds invested, to woo foreign developers.

Yau said the project will also act as a springboard for Sunway's other businesses, including civil engineering and construction, building materials, trading and manufacturing, and quarrying.

"There are a lot of projects to build ports, bridges, roads and highways, and airport expansion in Sri Lanka. We are testing the market now through this project and will slowly tap other areas," he said.

By Business Times

SP Setia Q3 earnings up on ongoing projects

PETALING JAYA: SP Setia Bhd net profit increased 104% to RM87.3mil for the third quarter ended July 31 from RM42.7mil achieved in the same period last year.

The net profit includes gain from the disposal of its investment property, Tesco Hypermarket in Setia Alam.



SP Setia said told Bursa Malaysia its revenue rose 13.5% to RM414.9mil in the third quarter, compared with RM365.6mil in the same period last year.

For the first nine months, it posted a net profit of RM176.7mil from a revenue of RM1.2bil, representing an increase of 54% and 17% respectively over the previous year.

“The group’s profit and revenue were mainly derived from property development activities in the Klang Valley, Johor Bahru and Penang,” it said, adding that construction and wood-based manufacturing activities also contributed to earnings.

SP Setia registered sales of RM1.95bil as at August 31, therefore essentially achieving its full financial year sales target of RM2bil with two months to spare before the period ends on Oct 31.

“The 10-month sales value has exceeded by 18% the group’s highest ever sales value over one financial year of RM1.65bil recorded in FY09,” it said.

President and CEO Tan Sri Liew Kee Sin said the group’s proactive moves last year to capture market share in the luxury high-rise and integrated commercial sector, while further consolidating its lead in landed residential segment, had borne much fruit.

“Despite the financial turbulence at the time, we continue to invest substantially to improve both infrastructure and amenities in all our developments,” Liew said.

By The Star

SPB Q3 net profit plunges 77%

KUALA LUMPUR: Selangor Properties Bhd’s (SPB) net profit plunged 77% to RM7.5mil for the third quarter ended July 31 against RM33.3mil a year ago when it posted higher unrealised foreign exchange gain and better profit from property development.

The main contributors to net profit for the quarter under review were property development, investment properties and education, it said.

Revenue was almost 40% down to RM42.5mil from RM70.6mil while earnings per share tumbled to 2.19 sen against 9.69 sen previously.

By The Star

Mixed reaction to possible increase in property downpayment

PETALING JAYA: The possible move to raise downpayment from 10% to 20% for the third and subsequent house purchases drew mixed reaction from housing professionals and a research house.


Datuk Michael Yam ... ‘The property market is still lukewarm.’

Real Estate and Housing Developers’ Association (Rehda) president Datuk Michael Yam said the capping of loans to 80% for the third and subsequent purchase would probably not discourage the wealthy from speculating because they could afford the 20% deposit.

“Investors would pull back on purchases after the third unit because of the higher deposit requirement. The impact of this is probably 10%-20% of the upmarket segment. Overall, the effect of the cap is minimal as the presence of speculators is small,” he said.

Prime Minister Datuk Seri Najib Tun Razak said on Tuesday that Bank Negara might impose a limit on financing for subsequent purchases after the second property while first time buyers can borrow up to 90%.

The property market has come under speculative pressure the past 12 months with double-digit rise in prices in some locations. Despite concerns that a bubble may be forming, Yam said “the property market is still lukewarm.” The number of launches by developers has also increased compared with last year, with developers offering 10/90 schemes or variants of it.

Yam, who is also managing director of property consultancy Impetus Partnership, said investors may purchase that third property, but nothing additional due to the deposit. “Those who buy for the next generation would buy it sooner if they see a capital upside as well.” Yam said the 20/80 move would have little impact on the secondary market.

“There are usually lower margins for secondary housing,” he said. He said the move needed to be further studied and evaluated in order not to dampen the activities of serious investors.

“At the moment, the property market is still lukewarm due to lower rental yields and capital appreciation compared to neighbouring countries. Placing such a restriction may take Malaysian property off the radar of foreign investors. As it is, the Government has already re-implemented real property gains tax (RPGT) and raised interest rates. Further restrictions may not bode well for Malaysian property.”

He said loan capping and other measures introduced in Singapore had not really slowed the property transactions in Singapore. This proved that it was ultimately market forces that decided what was best, he added.

Managing director of The Metro Kajang Group, Datuk Eddy Chen, said the move would have little effect on landed units. “It is fine to have a pool of properties for rental income. I don’t think there are many people who are buying to flip (to resell when the project is completed). There is always the 5% RPGT as a deterrent,” he said.

He said the 20/80 move would not affect landed units. The company launched 260 double-storey terrace and semi-detached houses last week in Semenyih, Selangor.

Mah Sing’s group managing director cum group chief executive Tan Sri Leong Hoy Kum said the proposal should not affect market sentiment.

“Property has long been viewed as a preferred vehicle to hedge against long-term inflationary pressure,” Leong said.

“The banks have in place stringent processes as well as check and balance in their loan approval process. These should be good enough to ensure the quality of loans in the market and market forces should be allowed to prevail.”

A source from a housing developer has a different view.He said that nine out of 10 buyers opt for the 10/90 scheme whether they were buying to stay or investing.

“If there is a 20% downpayment requirement for non-first time buyers, at least 30% of sales will be affected,” he said.

Should this move be implemented, he said Malaysia would be joining the ranks of Hong Kong and Singapore to curb property speculation.

Hong Kong requires buyers to have a downpayment of between 50% to 60%.

Singapore requires 70% to 80%.

Property consultancy Rahim & Co said government intervention was only warranted if there was overwhelming evidence of excessive speculative activity.

“Otherwise these actions may backfire and hinder recovery in one of the most important economic components. Interest rates have already been increased – it may be too early to slap more deterrents to investment at this fragile stage of the economy’s recovery,” a Rahim & Co statement said.

“It should be best left to the banks to decide on their own desired level of exposure, although it might be prudent for Bank Negara to direct the banks to cut back on their margin of lending to parties that are clearly speculators, no matter how good their credit.”

The statement said 10/90 was a happy medium.

Research house HwangDBS said the 20/80 move was “less onerous than expected as there was initial concern that the loan-to-value ratio at 80% cap may be imposed across the board.”

“Impact to the property sector should be insignificant as we believe there are not many buyers with more than two houses. Banks have been generally stringent on mortgage applicants with multiple properties and high monthly commitment, the report said.

“We are positive on the Malaysian property sector and expect demand to continue to be supported by positive macro factors like young population, urbanisation, shrinking household size, rising income, inflation hedging and infrastructure improvements,” HwangDBS said.

By The Star

More funds invest in offshore properties

PETALING JAYA: More Malaysian institutional funds, including Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF), are looking to raise their exposure in offshore property investments such as in Australia and the UK.

Last month PNB acquired its first property in Australia with the purchase of Santos Place in Brisbane for A$287mil (RM838.19mil). The 36-storey Premium A grade office tower with 34,338 sq m is said to be the largest six-star environmentally rated building in Australia.


Christopher Boyd ... ‘They are entering markets that offer higher income assets.’

Following on the heels of PNB’s foreign venture, the EPF had at the end of August announced that it would be investing £1bil (RM4.88bil) in European property markets, focusing on the UK.

The fund had said that the investments would be for the long term with expected annual yields of 6% to 7%.

Industry observers said another potential candidate for offshore property investment was Kumpulan Wang Persaraan (KWAP).

According to the fund in its recently upgraded portal, the objective of its property investment initiatives is to invest in strategic properties for steady income with growth potential on rents and capital values in order to achieve commendable returns that contribute well to KWAP’s overall goals.

“Prospective investments in property can be domestic or foreign based with a preference for locations in central business district and urban areas. Acquisition of the strategic assets can be via direct acquisition or partnership.

“The risk exposure of property investments should not exceed 30% of KWAP’s Strategic Asset Allocation. Moreover, the property portfolio itself shall be well diversified based on locations, types, sectors and sizes,” KWAP said in the website.

PNB’s acquisition of Santos Place is said to be the largest commercial property transaction in Queensland since the global financial crisis. It was brokered by CB Richard Ellis and Jones Lang La Salle.

According to CB Richard Ellis Malaysia executive chairman Christopher Boyd, who was one of the agents for the PNB deal, Malaysian funds are venturing offshore to diversify their risks and to go to markets where returns and capital values are higher.

“They are entering markets that offer higher income assets as they have a commitment to pay out dividend yields of 5% to 7% per annum,” he told StarBiz.

Santos Place is fully tenanted and more than 40% of the office space is leased to Australian oil and gas exploration and production group, Santos Ltd. Petronas is also one of the tenants.

“The vendor, Nielson Properties, has given a guarantee of an annual yield of just under 8% for the building. The yield is quite attractive considering that Malaysian properties are offering yields of only 6% to 6.5% a year,” Boyd said.

He added that the performance of office buildings in general “is a proxy for the country’s economy and how it fares is as good as the tenants that occupy them.”

“This is a good time for the funds to snap up good quality property for long-term investment. Investing in offshore property market is a cyclical play and it is important to get the timing right when the market is on the verge of an upturn,” Boyd added.

Most of the traditional buyers of investment property in Australia are institutional funds such as mutual and pension funds and REITs, but they are quite cash strapped now and are not active in the market.

He said the domestic buyers were expected to only start getting back to the market within the next 12 months and the valuation of the property assets was still quite attractive.

“Given that there is still room for capital appreciation for good quality investment property Down Under, it is a good time to leverage on the market. The quality of the tenants there is also highly rated and they usually sign up for long-term tenures of 10 to 15 years. The rental rates will be reviewed every three to five years,” he added.

Besides office buildings, investors Down Under are also keen on good retail centres as well as industrial and logistics buildings.

CB Richard Ellis executive director Paul Khong said there were also strong interests from Malaysian developers in Australian development projects especially in Sydney and Melbourne.

“They are looking at redevelopment of commercial and residential sites and also joint venture opportunities. Some have already set up shop there.”

Khong said Malaysians generally ranked very high on the investment list for Australia and UK properties as a majority of individual investors would have one of their children studying there or would be going abroad to pursue their studies soon.

“This is a natural push for our local investments to head this way. The investors will be looking at yields of 6% to 8.5% (initial yield) depending on property type, size of investment, location and country. Many projects have seen good or even double-digit capital appreciation over the last five years,” Khong added.

By The Star

Announcement on loan-to-value ratio for properties very soon

KUALA LUMPUR: BANK Negara is expected to make an announcement on the loan-to-value ratio for mortgages very soon, according to a source.

“Genuine home buyers need not worry as it will most likely be implemented on buyers making their third and subsequent house purchases, and be confined to specific locations and prices.

“These are only pre-emptive measures as currently there is no property bubble,” said the source, adding that genuine house ownership would still be encouraged.

By The Star

Three-day property seminar begin tomorrow

The National House Buyers Association is having three seminars from tomorrow to Saturday at the Mid Valley Exhibition Centre in Kuala Lumpur.

The sessions are ideal for house buyers, property investors, developers, financiers, architects, engineers, surveyors, valuers, contractors, real estate agents, lawyers, accountants, stakeholders, insurance professionals and interested parties.

The topic for the first seminar tomorrow is Pemudah Focus Group on Registering Property.

There will be presentations by the Inland Revenue Board stamp duty division director Teoh Ai Suan, Valuation and Property Services Department director Huan Cheng Kee and Federal Territories Land and Mines Office director Hasim Ismail.

On Saturday, the focus will be on Tribunal for Consumer or Housing — Claims, Jurisdiction and Award Enforcement.

The session will explain in layman’s terms the workings of the respective tribunals, common cases and enforcement and prosecution of non-compliance of tribunal awards.

The speakers will be Consumer Claims Tribunal chairman Pretam Singh, Homebuyers Claims Tribunal chairman Bhupinder Singh and National Housing Department deputy enforcement director Gunasegaran Naidu.

On Sunday, the issues that will be explored include Built-Then-Sell and Sell-Then-Build concepts, legal requirements on JMB and MC, strata titles, flaws in the Building and Common Property Act and absence of regulations, and more.

In conjunction with the 53rd National Day celebration, the session will also feature a short speech by former Perak police chief Datuk Seri Yuen Yuet Leng on Merdeka: My Experience and Yesteryears.

Participation fee for each session is RM80 or RM200 for all three sessions. An extra RM20 will be charged for registration after Sept 20.

A book titled Buying Property from Developers (What you need to know and do) by Robert Tan will be given free to participants who opt for the three-seminar package.

For details, call 012-3345 676 or email klchang@hba.org.my.

By The Star

SP Setia 3Q net profit jumps 104% to RM87.25m

KUALA LUMPUR: SP SETIA BHD posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.

It said on Thursday, Sept 23 revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.

SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.

“The 10-months sales value has already exceeded the group’s highest ever sales value over one financial year of RM1.65 billion recorded in FY2009 by 18%,” it said.

SP Setia said sales had remained strong since the start of the year, with RM590 million achieved in the third quarter and cumulative nine-months sales of RM1.8 billion.

Projects that contributed to these numbers include Setia Alam and Setia Eco-Park at Shah Alam, SetiaWalk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

SP Setia president and CEO Tan Sri Liew Kee Sin said the group’s proactive moves in 2009, aimed at capturing market share in the luxury high rise and integrated commercial sector, whilst further consolidating its lead in the landed residential segment, had borne much fruit.

By The EDGE Malaysia

Al-Aqar to buy Aussie properties for RM135m

KUALA LUMPUR: Al-Aqar KPJ Reit will acquire properties from Jeta Gardens Waterford Trust in Australia for RM134.91mil as part of plans to diversify its income sources and tenant base.

The acquisition would be satisfied with RM67.45mil in cash and the rest via the issuance of new units in Al-Aqar, said the real estate investment trust company in a filing with Bursa Malaysia yesterday.

The properties consist of an integrated gated premium residential estate for older people including an aged care complex with care facilities, 23 units of independent living villas and 32 units of independent living apartments as well as portions of undeveloped land.

By Bernama

Eksons plans new property project in Klang Valley

TIMBER outfit Eksons Corp Bhd is planning its next property project in the Klang Valley to drive up earnings, its director Tang Seng Fatt said.

Currently, contribution from property projects to the group is less than 5 per cent and it expects this to hit 20 per cent next year, Tang said.

The potential growth is attributed to its on going joint venture project, The Atmosphere, a RM850 million mixed commercial development in Seri Kembangan, Selangor.

"The project is being developed in phases, so we will have RM40 million to RM50 million coming in every year," Tang told Business Times at a media briefing on the project in Kuala Lumpur yesterday.
For the year ended March 31 2010, Eksons posted a net profit of RM28 million on revenue of RM279.1 million.

The Atmosphere is the first commercial development in South Klang Valley to be certified with the coveted BCA Green Mark Certification (provisional).

The 21ha leasehold project is being developed in three phases and it is expected to be completed within 5 to 8 years.

Eksons' stake in the project, launched in August last year is 60 per cent. Tempo Properties Sdn Bhd holds 40 per cent.

"We will continue to work with Tempo as joint venture partners and project managers. We are looking for land in the Klang Valley and will ink a deal soon," Tang said.

Tempo, though not part of Eksons, is deemed a related party to the group, given certain common shareholdings between both companies.



Tempo chief executive officer Khoo Boo Hian said it is eyeing land in Ampang and Mont Kiara.

He also said the company expects a return on investment of up to 25 per cent over the next three to four years from The Atmosphere.

Upcoming properties at The Atmosphere include retail and small office/home office (SOHO) units. They are due for launch by early next year.

By end-2011 or early 2012, works on a five-star hotel, serviced apartments, office suites and an entertainment hub will commence.

Khoo said the joint venture will invest an additional RM2 million or more in green technology to value-add the development.

By Business Times

Malaysia to monitor property speculation

The government will not introduce measures to make it difficult for first and second time house buyers but will monitor signs of speculative buyings in the property market.

Prime Minister Datuk Seri Najib Razak said after discussing with Bank Negara Malaysia, the government found no reason why it should limit end-financing across the board for residential properties.

Speaking to reporters at Bank Negara yesterday, Najib said the central bank may impose a limit on financing for subsequent purchases after the second property.

"For the bona fide buyers, there will be no review of the limit. So, they can borrow up to 90 per cent," he added.

Reports surfaced recently that Bank Negara was talking to banks about possible measures to check excessive speculation on property prices.

One of the measures brought to the table include capping end-financing to just 80 per cent of the value of property from 90 per cent that is given out by banks now.

Analysts have said they were watching property prices closely for signs of bubble building up in the sector amid talks of excessive speculative buyings.

Developers, however, dismissed the bubble threat, with many saying banks themselves were closely monitoring the situation, including the creditworthiness of borrowers before app-roving loans.

By Business Times

Glomac Q1 net profit rises to RM15.5m

GLOMAC Bhd’s first quarter net profit jumped 86.5 per cent to RM15.5 million for the period ended July 31 2010, backed by strong sales of its development projects.

The company told Bursa Malaysia yesterday that profit contributions mainly came from on-going developments namely Glomac Tower, Glomac Damansara and Glomac Cyberjaya.

Stronger sales in Bandar Saujana Utama projects had also contributed to the increase in the group’s profit.

Group revenue surged 114 per cent to RM126.3 million, it added.

By Business Times

Glomac still a ‘buy’: ECM Libra

ECM Libra Investment Research has maintained its ''buy'' recommendation on property developer, Glomac Bhd.

In a research note here today, ECM Libra said the call was premised on Glomac's three-year earnings compound annual growth rate of 19.4 per cent.

ECM Libra said it has raised Glomc's estimates for financial years 2011 and 2012 by 24 per cent and 19 per cent respectively after imputting higher margins.

"Our earning upgrade has led us to revised the target price from RM1.87 to RM1.93," it said.

It said Glomac's results for first quarter of 2011 (Q1FY11) financial year were above house and market expectations as the net profit of RM15.6 million already made up 33 per cent and 35 per cent of house and consensus full-year estimates respectively.

"Its Q1FY11 revenue of RM126.3 was 114.1 per cent higher year-on-year as the Glomac Tower project is now full swing and we expect this to continue given the slew of commercial projects in the pipeline," it said.

ECM Libra said Glomac achieved decent property sales of RM80 million in Q1FY11. Unbilled sales of RM585 million would provide earnings visibility over the next two-three years.

By Bernama

Al-'Aqar KPJ REIT to acquire Aussie property for RM134.9m

KUALA LUMPUR: The Al-'Aqar KPJ REIT has proposed to acquire properties in Queensland, Australia from Jeta Garden Waterford Gardens Trust for RM134.91 million.

Damansara REIT Managers Sdn Bhd, which is the manager of Al-`Aqar, said on Wednesday, Sept 22 the properties covered 14.753 hectares including a complex, villas and apartments.

The properties consisted of an integrated gated residential estate for older people which includes an aged care complex with care facilities known as Jeta Gardens Aged Care Facility, 23 villas and 32 apartments known as Jeta Gardens Retirement Village, and an undeveloped portion of the land.

Jeta Gardens Aged Care Facility includes 108 aged care bed places with all ancillary improvements, dining areas, kitchen, bathrooms, nurses stations, lounge area.

The undeveloped portion of the land is proposed to be developed to extend the Jeta Garden Retirement Village to include an additional 43 villas as well as to extend the Jeta Garden Aged Care Facility to include an additional 42 places.

Damansara REIT Managers said the properties are sited on several pieces of land with a fully integrated road system, landscaping and lake gardens.

The total purchase consideration of RM134.91 million would be satisfied by RM67,454,750 in cash and the remaining RM67.45 million via the issuance of new units in Al-`Aqar.

By The EDGE Malaysia

Pulai Springs upbeat on record net profit

Pulai Springs Bhd expects to achieve a record net profit in the current financial year ending December 31 2010 and is even more positive about its outlook in 2011, its top official says.

Executive director Nick Mah Siew Chean, who emerged as the new major shareholder in the company three years ago, said things are looking brighter after a difficult run in 2008 and 2009.

Excluding an extraordinary gain from the sale of the Novotel in Kuala Lumpur, the hospitality-cum-property developer would have posted a net loss in the financial year ended December 31 2009.

"The years 2008 and 2009 were tough for us. We expect to return to the black this year. Operationally we are positive," Mah told Business Times in an interview.
In the first half ended June 30 2010, the resort operator posted a net profit of RM221,000 and revenue of RM25.15 million.

"We expect to achieve the best year in terms of bottom line this year, since the takeover from the previous owners in 2007," Mah said.

The expected better performance this year and next will be attributed by sales of the remaining 85 units of Cinta Ayu All Suites. A total of 300 units were built within Pulai Springs Resort.

The company has made some RM80 million from the sale of the units and expects the remaining units will be sold by end-2011 and fetch RM50 million in sales.

Pulai Springs also plans to launch some niche developments within the resort. It has 3.2ha of land available for development. It is now conducting a feasibility study to decide on the type of property units it should build. The units are likely to be launched at end-2011.

In 2007, Mah took over Pulai Springs from one of its founders, Datuk Chua Jui Leng, and emerged as a major shareholder.

Meanwhile, Mah dismissed talks in the market that the company was up for sale. "We are here for the long term," he said, adding that the units within the resort were the ones that are available for sale.

On foreign ventures, Mah said Pulai Springs will look for opportunities for both hotel operations and property development in China. These projects can be via acquisition of existing assets or be built from scratch.

"We understand the China market and are confident about China," he said, when asked if Pulai Springs is looking at other countries within the region.

This is because his family business already operates a 18-room hotel in Kunming, China.

Although a joint-venture agreement to jointly bid for a development project in Kunming was withdrawn in July following unsuccessful negotiations, Mah said the company will continue to pursue for other projects in the republic.

By Business Times

Suria Bistari expects RM80m GDV for Johor Baru project

SURIA Bistari Development Sdn Bhd, a wholly-owned subsidiary of IJM Land Bhd, expects to record RM80 million in gross development value (GDV) for its two blocks of SuriaMas suites project in Larkin, Johor Baru.

General manager (Southern region) Tham Huen Cheong on Saturday launched the 16-storey SuriaMas Block C comprising 152 units.

Tham said 70 per cent of the units, pegged from RM220,000 to RM320,000 had been snapped up even before the launch.

Tham said he expects the take-up rate to hit 90 per cent by year-end and the GDV for Block C is expected to be RM35 million.

The company is set to launch the 13-storey Block D which will have 119 units by the end of the year, with GDV targetted at RM40 million.

The launch of Block D will mark the last of its four blocks of SuriaMas suites in Larkin.

Block A and Block B, comprising a total of 600 units, were fully sold out since last year.

"Johor Baru's economy is always linked to Singapore. A majority of the flat dwellers are locals working in Singapore. Security is one of the reasons why buyers are snapping up the apartments," Tham said.

Meanwhile, the company is set to launch the third phase of its cluster homes in Taman Nusa Duta soon.

The third phase consists of 128 units of two-storey cluster homes priced from RM518 and above.

Since its inaugural launch in July, the company has chalked up over RM65 million in sales turnover for its homes in Taman Nusa Duta

"With the new coastal highway here coming up and the cheaper toll rates at the 2nd Link since August, we expect a surge in sales of properties in the area.

"Taman Nusa Duta and the neighbouring areas are also poised to be like a duplication of Taman Molek with the sprouting of banks and other amenities in the vicinity," he said.

By Business Times

Tempo Properties targets up to 25pc ROI

Tempo Properties Sdn Bhd, the developer of "The Atmosphere", a mixed commercial development project, is targeting a return on investment (ROI) of up to 25 per cent over the next three to four years.

Chief Executive Officer Khoo Boo Hian said the gross development value (GDV) of the second and third phases of the project in Sri Kembangan is estimated at about RM850 million.

The entire project will be complete by 2012. It is also the first commercial development project in the South Klang Valley to be awarded the coveted BCA Green Mark Certification (provisional).

The certification recognises the best practices in environmentally-friendly buildings design and performance.

The first phase of the project has been sold to Giant Hypermarket for RM24 million.

"We are now constructing the second phase and expect to launch its phase 2E in early 2011," he told a media briefing in Kuala Lumpur today.

He said 90 per cent of phase two (excluding 2E), was sold out, while the construction of phase three would start next year.

"We are planning to build service apartments, a five-star hotel, retail and commercial centres under the third phase.

"Although 90 per cent of the development has been sold, we have decided to spend an additional RM2 million on green features, to be enjoyed by business owners," said Khoo.

He also disclosed that Tempo is eying properties in the Ampang and Mont Kiara areas for residential development.

He also stated that Tempo's future developments would continue to incorporate green elements into the design.

By Bernama

Mah a controlling shareholder of Pulai Springs since 2007

Not many are aware that Nick Mah Siew Chean has been the controlling shareholder of hospitality and property developer Pulai Springs Bhd since 2007.

Mah emerged as the shareholder of the company with a 32.9 per cent stake when he acquired 32 million shares then held by Datuk Chua Jui Leng.

Mah took over the reign of Pulai Springs at the age of 30. His move into the company came after the sale of Novotel Hydro Hotel in Kuala Lumpur, and the suitor then was Pulai Springs Bhd.

In an interview with Business Times, Mah said following the sale of Novotel, he was so taken aback by the beauty and splendour of Pulai Springs Resort that he negotiated and subsequently bought the company from Chua.
"We decided to take over the company as we were attracted by the potential it had," he said.

Mah's experience in the hospitality business can be traced back to his father, Mah King Hock, a lawyer by profession, who decided to venture into property development. From property development, there was a natural transition into the hotel business.

"My father went into this business 15 years ago when my sister started studying hospitality in Australia," the junior Mah said, adding that the hotel was somewhat a training ground for them.

His father bought an 86-room historic Hotel in Blue Mountains Australia called Hydro Majestic Blue Mountain. This became a venue where the Mah siblings started their journey in the hospitality industry.

The hotel has since been sold.

Today, the family owns two hotels in Australia - the Airport Sydney International Inn and Metro Hotel Sydney. Both hotels are ranked three-star and have about 120-odd rooms.

In 2005, the family bought the Novotel Hydro Majestic in Kuala Lumpur, which now belongs to The Nomad Group Bhd.

A year later, it bought the Ferringhi Beach Hotel in Penang and renamed it Hydro Hotel Penang.

The family also owns a 180-room hotel in Kunming called the Hydro Hotel Kunming, which is being managed by Mah's brother.

Together with the listed company's hotel business, the Mah family operates over 1,000 rooms.

Although Mah sits on the board of the family business, he is solely involved in the operation of the listed entity.

By Business Times