Times Avenue units 70pc snapped up before Nov launch

TIMES Avenue, a RM160 million office and retail project on Jalan Imbi, Kuala Lumpur, has been 70 per cent sold, one month ahead of its launch in November.

The space was bought mainly by a Hong Kong private equity group, said Datuk Lennon Tan, founder and chairman of developer Takashimaya Construction & Development Sdn Bhd.

Times Avenue is located next to Berjaya Times Square. The 15-storey building has nine levels of executive office suites, three floors of retail lots, two levels of penthouse offices and a sky lounge. Construction will start in December and is due for completion by end-2013.

Tan plans to sell the remaining space to local investors.

"I am bullish on the market for office space and expect the whole project to be sold by the end of this year," Tan said yesterday in Kuala Lumpur, after unveiling the project.

Times Avenue is the first commercial building to feature a high-tech multi-level automated valet car parking system. This is its selling point.

The RM10 million system uses technology from South Korea and is widely used in Europe.

It allows customers to initiate their vehicle retrieval simply by scanning their bar coded valet parking ticket at the built-in reader. Their vehicle is automatically stacked vertically alongside the building, saving them time to look for parking.

"We hope to set a new benchmark in office space where security and safety is concerned. We hope land owners and developers will look into the system, which is a high selling point for their projects," Tan said.

Takashimaya was set up in 2004 by Tan and Fanny Foo Youe Moi, an entrepreneur.

Tan said Takashimaya has no links to Berjaya Group, or its founder Tan Sri Vincent Tan.

By Business Times

Cagamas may issue another sukuk worth up to RM2b

NATIONAL mortgage company Cagamas Bhd will issue another landmark sukuk, with size estimated to be between RM500 million and RM2 billion.

Chief executive officer Steven Choy said the size of the Islamic debt paper will depend on the home loans that banks sell to Cagamas.



"If they sell us big loans, it will be bigger, if small loans, it will be small," Choy told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

On the significance of the latest debt paper, Choy said: "We haven't worked out yet on the assets that are coming in, so it is not the right time to talk about it."

It is understood that the sukuk will be launched by the year-end.

Sources told Business Times that the latest Cagamas sukuk will be based on Ar Rahnu concept, or pledging.

"It is termed as covered sukuk (an Islamic version of covered bond)," one of the sources said.

Covered sukuk is an Islamic version of covered bonds, which are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset-backed securities created in securitisation, but covered bond assets remain on the issuer's consolidated balance sheet.

Business Times had earlier reported that the new Cagamas sukuk will not incorporate "doubtful" principles, just like its previous benchmark Sukuk Al-Amanah Li Al-Istithmar (Sukuk ALIm), launched in mid-July.

While Sukuk ALIm was designed to meet the requirements of broader investors especially from the Middle East, Cagamas' new sukuk is expected to attract local institutional investors.

Last year, the country's biggest buyer of home loans sold RM11.3 billion worth of bonds, down by more than half from the record RM25 billion in 1999. About 40 per cent, or RM4.3 billion, were sukuk.

Cagamas issues bonds or debt securities to finance the purchase of housing loans from banks, freeing up lenders to give out more loans.

It is the second biggest issuer of debt papers after the government and carries the highest credit rating of "AAA" from local rating agencies. This means that its paper is highly sought after by investors because the probability of a default is very low.

By Business Times

KLIB unit to sell land for RM58mil

PETALING JAYA: Equine Capital Bhd’s wholly-owned subsidiary Kuala Lumpur Industries Bhd (KLIB) has proposed the disposal of four parcels of land together with Wisma KLIH for up to RM58mil cash to Wonderful Vantage Sdn Bhd.

In a filing with Bursa Malaysia, Equine said the land was with a 14-storey purpose built office building known as Wisma KLIH located at Jalan Bukit Bintang, Kuala Lumpur.

It said the disposal consideration comprises RM48mil for the disposal of the property and RM10mil for renovation and refurbishment of the property, subject to the terms of the renovation and refurbishment option.

By The Star

Commercial property sales rebound in 3Q

NEW YORK: Two of the world's largest commercial real estate services companies reported sharply improved earnings on Tuesday, Oct 26, fueled chiefly by a pickup in building sales and leasing, particularly in the United States.

After more than a year of nearly no activity, US property sales have begun to pick up as buyers and sellers agreed on prices. That helped Jones Lang LaSalle Inc and CB Richard Ellis Group Inc record strong earnings growth in the third quarter.

Boston Properties, which has been on a buying spree over the past couple of months, reported better-than-expected results.

Luxury mall owner Taubman Centers Inc reported earnings that were hurt by an unexpected drop in lease cancellation fees. But the company raised its full-year forecast after sales at its malls rose 13% per square foot.

The slow rebirth of the US commercial mortgage backed securities market (CMBS) and loosening of lending by banks have greatly improved US commercial real estate sales this year. Real Estate research firm Real Capital Analytics expects sales to top US$100 billion (RM310 billion) in 2010, nearly double the US$54.4 billion in 2009.

US companies also have begun to lease more space as they become more confident about the economy.

Sales and leasing transactions are the bread and butter of real estate services companies, providing higher margins than property management or corporate services.

"We've seen sales and leasing improve all year," JMP analyst Will Marks said. "Third-quarter results really picked up from 2009 levels, but they're still nowhere near the levels at the peak."

CB Richard Ellis, based in Los Angeles, posted third-quarter earnings, excluding charges, of US$62.4 million, or 20 US cents per diluted share up from US$21.6 million, or eight US cents a share in the year-earlier quarter.

Analysts on average expected 17 US cents per share, according Thomson Reuters I/B/E/S.

Revenue rose 24% to US$1.3 billion. That was driven in part by a 26% revenue increase from the Americas region, with property sales up 69% and leasing revenue up 36%.

Jones Lang LaSalle posted third-quarter adjusted earnings of US$38 million, or 86 US cents per share, compared with US$27 million or 61 US cents per share in the year-earlier quarter.

Analysts on average expected 95 US cents per share.

Chicago-based Jones Lang LaSalle said its revenue rose 20% to US$708 million. In the Americas, revenue rose 29%, with leasing revenue up 38%, and sales and hotels up 127%.

Taubman reported third-quarter adjusted funds from operations of US$33 million or 59 US cents per square foot compared with a loss of US$67 million, or US$1.26 per share in the year ago period.

Analysts had expected third-quarter FFO of 67 US cents per share. FFO is a real estate investment trust performance metric, which removes the profit-reducing effect of depreciation from earnings.

The company, based in Bloomfield Hills, Michigan raised it 2010 FFO forecast to a range to US$2.77 per share to US$2.82 per share from US$2.65 per share to US$2.75 per share based on improving rents and higher lease cancellation and recoveries.

Boston Properties reported FFO of US$150.8 million, or US$1.07 per share diluted compared with US$158.5 million, or US$1.13 per share.

Analysts expected FFO of US$1.03 per share.

Boston Properties said it expects to report fourth quarter FFO of US$1.09 per share to US$1.12 per share.

The companies reported after the close of the New York Stock Exchange on Tuesday. Jones Lang LaSalle shares closed down 0.7% at US$85.37. CB Richard Ellis shares closed up 0.2% at US$18.90 and were at US$19.06 after hours. Taubman shares closed down 1.1% at US$48.30, and were at US$48.76 in after-hours trade. Boston Properties shares closed down 1% at US$89.87.

By Reuters

SP Setia to launch four residential projects worth RM546mil

The Show Village of Setia Pearl Island

GEORGE TOWN: SP Setia Bhd plans to launch four new residential projects with an estimated gross sales value RM546mil on the island beginning this December and next year.

SP Setia property (North) general manager S. Rajoo told StarBiz that the projects comprised the RM175mil Setia Greens, RM60.5mil Brook Residences, RM170mil Setia V Residences, and the RM139mil Pearl Villas in the Setia Pearl Island scheme.

Setia Greens, comprising 149 three-storey terraces and 18 semi-detached houses with dual frontage in Sungai Ara, would be launched in December.

“The selling price starts from RM918,000 onwards for terraced units with built-up areas ranging from 2,400sq ft and 3,200sq ft.

“The selling price for the semi-detached units, with built-up areas of around 3,300sq ft, is around RM1.6mil onwards,” he said.

Subsequently the group would launch Brook Residences in February 2011 and the Pearl Villas in April, and Setia V Residences in the second half of next year, Rajoo said.

“The Brook Residences in Brook Road, a prime residential area near Jesselton Road, comprises 11 luxurious bungalows priced from RM5.8mil onwards, while the Pearl Villas comprise 35 bungalows priced from RM2.8mil onwards.

“The Setia V Residences project in Kelawei near Gurney Drive, comprising 67 luxurious condominiums, tentatively priced from RM2.8mil onwards,” he said.

Rajoo said Setia Greens would be the northern region’s first Green Building Index-rated project.

“What makes the project unique are the environmental features such as solar water heater, rain-water harvesting system, water efficient fittings, and cool roof system for each unit.

“We are using a special low-volatile organic compound paint for the project,” he said.

Rajoo said these new projects were targeted at the executives working in the south-west district of the island as well as investors.

For the nine months of SP Setia’s fiscal year ended July 31, 2010, the group’s projects from Penang contributed close to RM150mil or about 10% of the RM1.95bil revenue posted for the nine month period.

“We are confident that the contribution from Penang this fiscal year closing Oct 31, 2010 will hit over 10% of the targeted RM2bil revenue of the group.

“Setia Vista, Reflections condominium, and the new semi-detached launches in Setia Pearl Island contributed significantly from Penang,” he said.

Rajoo said Penang would continue to play an important revenue generating role in the group’s property development business.

“We will continue to look for land in prime locations either to develop on our own or on a joint-venture basis,” he added.

Meanwhile, Henry Butcher (Malaysia) Penang director Dr Teoh Poh Huat said high-end properties were still sustainable in Penang, as there were now overseas Malaysians investing in the island’s property market.

“These are overseas Malaysians earning pounds and US dollars, who are buying high-end properties with the view to come home to stay one day.

“This segment is playing an increasingly important role in the Penang high-end property market developed by branded developers,” he said.

By The Star

Naza's Dualis snapped up at launch

NAZA TTDI's Dualis Business Centre units in Seri Kembangan were snapped up barely two hours after its launch over the weekend.

The 32 units of two and two-and-a-half storey semi-detached shop offices are located within the prime residential and commercial area of Equine Park.

They are part of an 8.7 acre mixed development which will also include other components that will be announced and launched at a later date.

Naza TTDI's group managing director, SM Faliq SM Nasimuddin who was present at the launch said, he was encouraged by the response for the shop offices and assured purchasers that apart from living to the company's tagline of delivering the project ahead of schedule, quality will not be compromised.

He said TTDI Dualis Business Centre will be a new lifestyle hub in the area with its modern architecture concept and open space.

The development is an ideal location for offices, banks, showrooms and F&B outlets, he added.

Faliq expects the launch on Saturday to attract a lot interest from buyers with the project's well-planned layout, strategic location and alluring design.

The two-storey shop office built-up starts from 3,472 sq ft with the land area from 2,866 sq ft with prices starting from RM1.5 million.

For the two and half storey shop offices, built-up starts from 4,733 sq ft with land area from 3,587 sq ft. Price for the two and a half storey shop offices starts from RM2 million. The project is expected to be completed in October 2013.

By Business Times

Glomac acquires Suria Stonor condo units

GLOMAC Bhd is buying 18 units of apartment in Suria Stonor Condominium for RM38.41 million as an investment.

It views the property as one with a potential for a quick turnaround, Glomac said.

The purchase is at a discount of 35 per cent to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

By Business Times

Hong Leong arm, GuocoLand, invests RM9.3bil in China

It is hungry for more land bank in China and GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank

SHANGHAI: GuocoLand Ltd, which is a Singapore-listed property investment arm of Malaysian conglomerate Hong Leong Group, will hunt for other land in China after its setback in acquiring a plot in Shanghai.

GuocoLand China Ltd group managing director Violet Lee said the company had allocated about 6.6 billion yuan (RM3.1bil) to increase its land bank but it only managed to secure one of the two plots it bidded in Shanghai.

The successful bid is for a 47,647 sq m site in the Changfeng Ecological Business District in the Putuo district which was sold at the price of 3.04 billion yuan (RM1.4bil).

“There will be leftover of funds and we will use them and continue to bid for other land,” she said after a signing ceremony in Beijing last week which saw the entry of the five-star Poly International Cinema into Beijing Guoson Mall.


Violet Lee and Liu Debin at the signing ceremony in Beijing on Oct 20.

To date, GuocoLand China has invested an estimated US$3bil (RM9.3bil) in China with an ever-growing land bank of two million square metres in Beijing, Shanghai, Nanjing and Tianjin.

Beijing Guoson Mall, spanning 160,000 sq m, is located in GuocoLand China’s flagship project Guoson Centre which has a total area of 600,000 sq m. The mixed development project is smacked within Dongzhimen, which is regarded as Asia’s largest transportation hub with three subway and light rail lines, dozens bus routes and a daily traffic flow of 800,000 commuters.

The similar development has been emulated in the Guoson Centre in Changfeng, Shanghai. The 500,000 sq m is located at the crossroads of the business zones of Zhongshan Park, Gubei and Hongqiao and only 10-minute drive from the Hongqiao transportation hub.

It will also include a Guoson Mall, a Guoman Hotel and office and residential buildings.

The newly-acquired land is situated in the same area as the Guoson Centre in Changfeng and will be used for residential development.

In 1998, GuocoLand China developed its first commercial building called Corporate Square in Beijing’s Financial Street. Only in the last few years, the company entered Shanghai, Tianjin and Nanjing in a big way by building upscale condominiums.

The company is considered a late bloomer in China’s real estate industry and is now up against heavyweights like CapitaLand, Keppel Land, Cheung Kong Holdings, Kerry Properties and Sun Hung Kai from Singapore and Hong Kong.

However, GuocoLand China builds its name as the transportation hub specialist.

“We had come to China many years ago but we were very low profile unlike others who used to boast about their presence,” Lee said.

“This is the right time to come here as China is flourishing into the world’s second biggest economy and we want to participate in its rapid development in this period.”

She said there were many successful approaches that the company could emulate from its projects in Singapore and Malaysia for China but it would prefer to build homes and commercial properties suited for the local market.

“We have built many green buildings in many places. We want to showcase this in China and are proud to say that we have done quite a lot to green the Guoson Centre,” she said.

“I believe it’s hard to find a 40,000 sq m rooftop garden on the complexes in Guoson Centre.”

With the signing of tenancy agreement between GuocoLand China and Poly Film Investment Ltd, Guoson Mall in Beijing will house one of the most advanced cineplexes in China. The cineplex will meet international standards of high-end and eco-friendly cineplex and occupy 7,000 sq m with nine screens and over 1,500 seats.

Poly Film general manager Liu Debin said the Guoson Mall’s brand positioning and vision was in line with Poly Group’s aim of providing the best service.

“Through its strategic location and well-built business atmosphere, we see enormous commercial value and potential. We are sure that our cooperation will lead to a win-win result,” he said.

Lee said GuocoLand and Poly would establish a long-term partnership and look into further cooperation in other projects in China, especially the Guoson Centre Shanghai.

She said being strategic partners would bring benefits to both companies as they could market themselves even better.

“It’s a rare opportunity to develop such a huge project in this strategic location. We will do our best to fulfil our promise to bring our best development to Dongcheng district (where Guoson Centre Beijing is located) and do our part to improve the people’s lifestyle,” she said.

Guoson Mall is scheduled to open early next year. The Guoson Centre project won the Asia Pacific International Property Awards (APIPA) 2010 for the Best Mixed Use Development in April.

This is the first time a Chinese development won the prestigious award.

By The Star

Environmental preservation wins top marks

KUALA LUMPUR: Since organising the inaugural Malaysia Property Award (MPA) in 1992, the International Real Estate Federation (FIABCI) has been striving to raise the standard of the local property sector through this annual event.

Tougher qualifying rules and transparent judging processes over the years have ensured that many local property players keep with the times and also on par with the world’s top class developers.


Yeow ... ‘MPA award has set benchmark on how today’s local developers embark on their projects.’

The awards, which is today considered the “Oscars” of the local property industry, had set the benchmark on how today’s local developers embarked on their projects, said FIABCI-Malaysia president Yeow Thit Sang.

“Local developers know the kind of awareness winning this award brings. Many of them are tailoring their designs to these (FIABCI) standards. They look at our guidelines on how to improve their projects.”

Over the years, FIABCI Malaysia has placed increasing emphasis on environmental awareness and preservation. Initially, the impact of a development on the environment used to account for 10% of the judging criteria for the MPA. This year, it’s 25%.

“Environmental awareness is a global concern and it’s everyone’s responsibility to ensure everything they do has a minimal impact (on the environment),” said Yeow.

He said many local developers today were cautious with the way their projects impacted the surrounding landscape.

Yeow cited Mulpha International Bhd’s Pinggiran Bayou Village Homes, the winner in the best residential development (low-rise) category at the 2007 MPA.

He said prior to construction, the company took great pains to ensure minimal impact on the surrounding ecosystem.

Apart from preserving the environment, Yeow said many developers also designed their projects so that the surrounding elements actually became the highlight of the projects.

“Today, houses built are no longer just boxes on pieces of land. They’re a lifestyle masterpiece.”


Yu ... ‘Environmental awareness will account for more than 25% of the judging criteria at next year’s MPA.’

FIABCI Asia Pacific executive director Yu Kee Su said environmental awareness would account for more than 25% of the judging criteria at next year’s MPA.

For the first time this year, the judging process comprised a three-tier system as part of the organiser’s efforts to raise the bar of the participants, he said. In previous years, the judging process comprised only two levels.

“We evaluate the judging process every year. We get feedback and try to improve ourselves,” he said.

The first tier consists of site visits by evaluators who are senior personnel from the real estate industry. The second tier comprises a jury of senior representatives from various organisations within the property industry while the third tier comprises independent judges from various sectors.

FIABCI Malaysia will be organising the 2010 MPA on Nov 11 in Kuala Lumpur with Malayan Banking Bhd as the official sponsor.

The categories to be contested are: Property Man of The Year, Master Plan, Hotel Development, Office Development, Public Sector, Residential Development (low rise and high rise), Resort Development, Retail Development and Special Award for National Contribution.

Winners of the MPA in their relevant categories will represent Malaysia the following year at the International Prix d’Excellence, an annual competition that honours the world’s best property projects.

By The Star

EPF to call for open bid in 2011

The Employees Provident Fund (EPF) is expected to call for an open tender to develop the 1,214ha of federal land in Sungai Buloh, Selangor, in the second half of next year.

It is learnt that the EPF has initiated a master plan for the land development, which is expected to take six months to a year to complete.

The land, dubbed the "new hub" for the Klang Valley and owned by the Rubber Board of Malaysia, will be split into several parcels to attract local and foreign private property companies.

"The land will not be offered to just one developer. We will be fair and offer land parcels to several companies through an open tender system," a government source said.

Speculation was rife that the EPF would likely appoint Malaysian Resources Corp Bhd (MRCB) as the project's master planner and lead developer since it owns 41.5 per cent of the company.

However, the pension fund said that Kwasa Land Sdn Bhd - its joint venture with the government - would tender individual parcels of land through a transparent process.

The EPF also said that it had requested several developers and property consultants to advise it on the development and feasibility of the land.

The project is expected to have affordable and high-end housing - both landed and high-rise - office towers, shop-offices, retail, hospital, shopping mall, hypermarket, schools and parks.

Prime Minister Datuk Seri Najib Razak has said that the whole project would generate gross development value of RM10 billion.

Some potential participating developers said they would leave it to the EPF to decide how much land to allocate to them and the components to build.

Among them are Glomac Bhd, Gadang Holdings Bhd, IJM Land Bhd, Mah Sing Group Bhd, UEM Land Bhd, Bolton Bhd and MRCB.

A source said the companies could buy small parcels of land to carry out their own projects or develop the land in a joint venture with the EPF on a profit-sharing basis.

"We believe that EPF is likely to parcel out to various developers so that each can introduce new concepts. This will expedite the development as several parcels will be developed concurrently," Mah Sing group chief executive officer Tan Sri Leong Hoy Kum told Business Times.

The project, approved on May 12, will be funded by the EPF over 15 years.

It is understood that the project site will be connected to the Kelana Jaya light rail transit.

By Business Times

Glomac unit buys 18 Suria Stonor apartments for RM38.41m

KUALA LUMPUR: GLOMAC BHD is acquiring 18 units of apartments at the Suria Stonor Condominium project, which was developed by its unit Glomac Regal Sdn Bhd in July 2008, for RM38.41 million.

In a filing to Bursa Malaysia on Monday, Oct 25, Glomac said its wholly-owned subsidiary Berapit Pertiwi Sdn Bhd had entered into sale and purchase agreements with Dekad Darat Sdn Bhd and Progressive Berg Sdn Bhd for the proposed acquisition.

It said the acquisition of the apartment units represented an excellent investment opportunity with strong potential for quick turnaround.

"As the transaction is a bulk purchase, the acquisition is priced at a approximate discount of 35% to the last transacted price of RM1,000 per sq ft for comparable properties at Suria Stonor.

"As the developer of the project, Glomac is familiar with the product and believes strongly in the saleability of the condominiums in the secondary market at prevailing market prices," it said.

By The EDGE Malaysia

SP Setia upgraded to 'buy' at Kenanga

SP Setia Bhd, Malaysia’s largest property developer, had its stock rating upgraded at Kenanga Investment Bank Bhd to reflect the company’s earnings growth prospects.

The company was raised to “buy” from “trading buy” and its fair value increased to RM5.50 from RM4.78, Yeow Yeonzon, an analyst, said in a report today.

By Bloomberg

Puncakdana plans RM1.5b Ara Damansara project

Property developer Puncakdana Group plans to build 11 corporate buildings worth some RM1.5 billion in Ara Damansara, Selangor, as it is bullish on demand for office space.



The 11-storey buildings, with about one million sq ft of net lettable area, will enter the market over the next five years, said founder and managing director, Mah Siew Sian.

"We expect that many companies will be moving out of the city centre because of traffic congestion. Some are targeting Ara Damansara, which is a new area and a well-planned township.

"We believe there will be a market for our properties. People want a comprehensive environment which is why there is a success story for Mid Valley City," Mah said.

The group is finalising designs and expects to launch the first two blocks by the third quarter of next year. The buildings will be sold en bloc.

It is already in talks to sell one block to information technology group Formis Bhd for around RM150 million. Several multinational companies in the oil and gas and consumer business are also keen.

The towers will be complemented by the group's new RM280 million retail mall, dubbed CITTA, which will open next January.

Half of CITTA, an open air design three-level mall with 130 retail outlets, have been taken up. Some of the big retailers include Harvey Norman, MBO cinemas and Julia Gabriel and Chiltern House.

By Business Times

State firms should stick with affordable housing

Under Budget 2011, the Government’s proposal to help first time home buyers and those earning less than RM3,000 will benefit those living outside the Klang Valley.

The 10% down-payment guarantee by the Government is limited to houses priced below RM220,000 while the 50% stamp duty exemption on instruments of transfer are for houses not more than RM350,000.

While the move is much lauded and applauded, there are not many landed units priced at RM350,000 and below in the Klang Valley today. Which means those who want to go for this scheme will have to buy a condominium or an apartment.

And if one wants to take advantage of the 10% downpayment, one has to buy a property that is RM220,000 and below. There are, of course, properties further away in the Klang or Shah Alam in this price range. One will be hard pressed to find something within this bracket in Petaling Jaya unless one opts for some densely populated condominium enclave.

With the number of young people migrating to the city in search for work, most of them will have to rent before they eventually buy their own homes.

About 50 years or so ago, the Selangor State Development Corp (PKNS) were building single-storey affordable housing that cost less than RM20,000 in Petaling Jaya. Much of Petaling Jaya then – and today – are leasehold land because they are state land.

Twenty-thousand ringgit may seem a paltry sum today but for folks back then, many had to pawn their jewellery and with the help of relatives, pool money together to have a roof over their heads. Young people from the lower ranks of the civil service benefited from PKNS housing. There was another developer whose mission was to provide civil service in the higher categories with more up-market properties in Damansara Heights, Kuala Lumpur.

Today, things are very different. While PKNS continues to build houses in the urban centres, they seem to be concentrating on building condominiums. A clear example is Kota Damansara, Petaling Jaya where PKNS teamed up with developers in joint-venture developments to build high-rise properties. They do build single-storey houses but these are outside city centres in locations such as Bernam Jaya and Antara Gapi. In Klang, PKNS is building some low-cost flats.

In the aftermath of the financial crisis in 1997/98, affordable housing were those capped at RM250,000 and many private developers went into this segment post crisis. There was a huge demand for them. Several years later, to get better profits, developers went on to build “lifestyles” homes where double-storey houses cost closer to RM600,000.

Because it is becoming increasingly impossible to find houses around the RM350,000 price range in the Klang Valley, perhaps PKNS can think about entering into joint ventures with private developers to build houses which may not be all that affordable.

The government agency is offering a broad spectrum, from low-cost flats in Klang to semi-detached and bungalows in Shah Alam. There is also something to be said about low-cost housing across the board. Simply because they are low cost, developers cut them rather small, at about 600 sq ft of four- or five-storey walk-ups with no management services. These projects have the potential – and some of them do – to become urban slums.

After several years, the place becomes really deplorable because there is no sinking fund and unkempt, because there is no management fees. Eventually, social problems arise. Many of these units are also rented out to foreigners and become crime-infested until the locals living there themselves decide to leave.

With the changes in the economy, global and local, which many have never seen in our life time, housing will only become more crucial in the urban centres. State agencies should consider if they need to narrow down their offering to provide for the less-well-to-do with proper and decent housing that are manageable financially and physically so that they at least maintain their value.

State economic developments corporations like the PKNS and their counterparts can form part of the government machinery to help first time house buyers. In Singapore, there is the National Housing Board to meet this aim. Which is why more than 90% of Singaporeans have their own homes. They do not need to rent. The same goes for Hong Kong. Both Singapore and Hong Kong are relatively more manageable because they are small. But we in Malaysia have various state economic development corporations and providing affordable housing is part of the game plan. So, if it is affordable housing, why go into building bungalows and semi-detached units? Stick with affordable housing.

Assistant news editor Lee Cheng thinks there is a need for state agencies to look into providing affordable housing in urban centres.

By The Star

Warisan Merdeka – a beacon to PNB’s future

The 100-storey 5-star green building is set to attract more interest to the whole development.

BACK in 2000 when Permodalan Nasional Bhd (PNB) was presented the opportunity to buy the 14.5ha where Stadium Merdeka and Stadium Negara are located, it had decided to retain the heritage value of this priceless asset while looking for opportunities to develop the surrounding area.

A decade later, PNB is doing precisely that.

PNB paid RM310mil or RM220 per sq ft to buy the land from Pengurusan Danaharta Nasional Bhd. The market value of the land has since appreciated to RM800 per sq ft today.


From left: PNB deputy president for corporate and international Jamiah Abdul Hamid, Tan Sri Hamad Kama Piah Che Othman, PNB Merdeka Ventures CEO Tengku Abdul Aziz Tengku Mahmud and PNB senior-vice president, head of property division Ibrahim Awang at the briefing.

At a special briefing for media editors on Wednesday, PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman disclosed that the heritage aspect has been fulfilled through conservation works to restore the heritage characteristics of Stadium Merdeka and Stadium Negara. The two stadiums are now being managed by a heritage trust.

Both the stadiums are occupying 6.8ha, which have been identified as a national heritage site.

Hamad says the overall Warisan Merdeka development on the remaining 7.7ha will complement and blend with the heritage theme. He is optimistic that together with the restored stadiums, the site will be another major landmark in Kuala Lumpur.

“We are looking at ways on how to integrate the building aspects of the stadiums with the planning of the overall development of Warisan Merdeka. The heritage part will not be sacrificed and will actually serve as the enhancement factor to the commercial aspects of the building. The heritage preservation of the stadiums will be undertaken by the heritage trust,” he explains.

Construction work on the 100-storey Warisan Merdeka tower will kick off next year.

Touted to be the country’s tallest when it is completed in 2015, the building will cost RM2.5bil to RM3bil. It will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space.

Hamad says the five-star green building will be the “beacon” to create more excitement and attract more interest to the whole development.

This will be followed by two subsequent phases comprising a shopping complex and condominiums. The whole development, to be undertaken over a 10 year period, will cost RM5bil.

On the rationale for mooting the project, Hamad says: “Since the plan to develop the land was approved by the PNB board in 2004, we were waiting for the right time to proceed with the project.



“The concept of 100-storey building, its retail portion and the condominium was mooted in early 2004 taking into account the need for enhancement of value and effective utilisation of the 19-acre land adjacent to Stadium Merdeka and Stadium Negara. In 2005, the master plan was approved by the municipal authorities followed by final titles being issued in 2008. The principle concept of PNB Iconic Building was then approved in 2009.”

He says that having held the land for so long, “we feel it is now the right time to go ahead. The Government is also promoting this type of development.”

Hamad stresses that most importantly, by initiating the Warisan Merdeka project, PNB is taking the lead to preserve the historical value of Stadium Merdeka as the site for the country’s declaration of independence back in 1957.

Emphasising that PNB is not looking to compete with anybody when it decided to put up a 100-storey tower as part of the Warisan Merdeka development, he says it will make more economic sense to build the high-rise tower than lower rise buildings.

He says as a state investment agency, PNB’s main concern is to maximise return for its stakeholders. “Each year, PNB declares income distribution of 6% to 7% to unitholders. The project with expected yields of between 8% and 10% will be able to meet our responsibility as an investment agency.”

Meanwhile, the new tower will be able to meet PNB’s need for new office space in line with its strategic positioning for the future.

Hamad says PNB will be moving out from its present headquarters, Menara PNB, which will be 30 years old when the tower project is completed, to the Warisan Merdeka tower upon its completion.

PNB has set up wholly-owned unit, PNB Merdeka Ventures Sdn Bhd to undertake the project. Helming it since early this year is Tengku Abdul Aziz Tengku Mahmud who was formerly from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd.

So, will Warisan Merdeka be an iconic project and will there be foreign expertise involved such as the like of world renowned architect Cesar Pelli who designed the Petronas Twin Towers?

Hamad says the project design plans are still in the drawing board.

“We are in talks with several parties comprising experts from the relevant fields. We are exploring the possibilities of creating a strong architectural and engineering team for the project,” he adds.

With its latest venture, PNB is certainly thrusting ahead with its plans to build up its presence in the local property scene.

By The Star

Towering message to deliver

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the 100-storey project were adequately addressed.

The apparently growing opposition to plans by Permodalan Nasional Bhd (PNB) to build a 100-storey skyscraper as part of the Warisan Merdeka integrated project is a classic example of what can go wrong when information is either badly presented or poorly received.

Prime Minister and Finance Minister Datuk Seri Najib Razak, when announcing the project in his 2011 Budget speech on October 15, said the landmark, which will be developed by PNB, is to be completed by 2020.

The project would comprise a 100-storey tower, the tallest in Malaysia, and would retain Stadium Merdeka and Stadium Negara as national heritage. The total project cost is RM5 billion, with the tower to be completed by 2015.

Within minutes after the speech, the Opposition picked on the mega project, calling it a waste of funds. Put the money to better use by building more schools, improving rural infrastructure, and helping the needy, they said. It would affect returns from PNB unit trusts, others echoed.

Suddenly, in their eyes, Warisan Merdeka became a government-funded project. It wasn't. It was PNB's, and PNB is not in the business of building schools or upgrading roads and electricity supply.

Similarly, a facebook group - 1M Malaysians Reject 100-storey Mega Tower - was set up (it is not immediately clear by whom) and has more than 92,000 fans as at 5pm yesterday. The project is also a hot topic on blogs and Internet forums.

PNB had a press conference on October 20, five days after the budget, where we came to know that the project would also have a shopping complex and condominiums, and that the tower itself would cost RM2.5 billion to RM3 billion. The RM5 billion figure included other components of the development, and also factored in improving infrastructure in the area.

Its president and group chief executive Tan Sri Hamad Kama Piah Che Othman is confident that Warisan Merdeka will create spillover benefits. For starters, it will generate about 5,000 jobs in the development stage, and boost property prices in the area.

He said PNB has the capability to finance the project through internally-generated funds, and as an investment house, would seek to optimise returns from the development. It expected to yield returns of 8-10 per cent.

This has been PNB's policy with all its investments over the years, and its track record speaks for itself.

We also learnt that PNB had been planning to develop the land since 2004, conducted annual reviews, and decided that now was the right time to do it. Clearly, this wasn't a flight of fancy hatched up one night just to boast as some people perceive it to be.

While it's obvious some people got ahead of themselves in shooting down the plan, it is also fair to say that not all questions raised about the project were immediately and adequately addressed.

In the days to come, there could well be legitimate concerns about Warisan Merdeka and PNB's role in it, particularly on the part of its more than nine million unitholders, and Malaysians in general. The government, too, needs to clear up remaining confusion and scepticism about the project's benefits.

Let's hope the message gets across better next time.

By Business Times

MBSB sets RM1bil target for new mortgage plan

PETALING JAYA: Malaysia Building Society Bhd (MBSB) is optimistic of hitting, within the next 12 months, its RM1bil loans target for its newly launched home mortgage programme called MBSB Ultimate, given its attractive features and financing, says chief executive officer Datuk Ahmad Zaini Othman.

“We are confident of achieving the RM1bil target as this tailor-made programme offers among others, loan tenure up to 70 years of age. We also have sales personnel from our 33 branches to promote this programme,” he told reporters yesterday after the launch of the programme.

MBSB Ultimate is targeted at properties priced from RM500,000.

Ahmad Zaini said MBSB’s outstanding home mortgage portfolio currently stood at about RM5bil.

He also said MBSB planned next year to come out with three or four new product packages for home mortgage and retail financing.

Chairman Tan Sri Abdul Halim Ali said MBSB Ultimate was the expression of MBSB’s inspiration in developing a home mortgage programme that would be the most definitive in the market.

“With the current drive and momentum set by the MBSB team coupled with new strategies, I am confident that MBSB will be able to re-establish its position as a significant player in the home financing market,” he said.

Meanwhile, commenting on the group’s third quarter results that were announced on Thursday, Ahmad Zaini said overall, its nine-month revenue performance had surpassed its full-year results in 2009 by more than 50%.

“We expect in the next three months our performance will continue to be strong, given the good numbers that we are having now,” he said.

MBSB’s third-quarter net profit fell 23% to RM40.5mil due to loan loss allowances made for impaired loans. Its revenue almost doubled to RM317.66mil for the three months ended Sept 30.

For the nine months ended Sept 30, MBSB reported net profit of RM133.2mil on revenue of RM890.8mil. It recorded net profit of RM57.2mil and revenue of RM538mil for 2009.

By The Star

Housing developer gets creative

NUSAJAYA: Property developers in Johor are becoming more creative and innovative in promoting their projects to potential buyers.

Apart from putting up nicely decorated show homes, developers are also bringing celebrities in for their project launches in hopes to attract crowds.

Weekends and public holidays are the favourite times for developers to launch new projects with a carnival-like atmosphere.

However, Country View Bhd has taken one step further by setting up an art gallery at its sales office at the Nusa Sentral housing project here.

“It showcases 11 modern contemporary art pieces collected by the company over the years,” said Country View marketing manager Andrew Tan.

The project on a 121.40ha site is located along Jalan Gelang Patah-Ulu Choh and will keep the company busy for the next eight years.

He said the art gallery would give an opportunity for customers to appreciate the art work and give them ideas to decorate their houses too.

Tan said although it was still a long way for ordinary Malaysians to show interest and deep appreciation for contemporary art pieces, the company believed someone has to take the initiative to start it.

He said interested customers can also purchase the paintings.

“We also welcome local painters to come to our gallery and promote their works to potential house buyers,” said Tan.

Couple Haw Yew Hock and Chow Yit Sin from Lima Kedai who planned to buy a house said this was the first time that a property developer had set up an art gallery at its sales gallery.

“It is something different and probably we can also pick up the ideas by putting up a painting or two in our new house too,” said Haw.

By The Star

Take up long-term housing loans, buyers told

PETALING JAYA: Home buyers are encouraged to take up two-generation loans and financial institutions should support the move.

“The most important thing is for the individual to own a house for his family to live in.

“If loan repayment is extended to the second generation, that means the family will remain intact,” Housing and Local Government Minister Datuk Chor Chee Heung told a press conference here yesterday.

He had earlier launched the MBSB Ultimate mortgage programme by Malaysia Building Society Bhd, which offers loans for customers up to the age of 70 years.

Chor said Budget 2011 encouraged the two-generation loan term, refuting suggestions that stretching the loans that far would be a burden to the younger family members.

“I don’t think it is a burden for the next generation because the repayment is spread over a long time,” he said, adding that the younger generation is financially strong and can even afford to buy another house.

MBSB chief executive officer Datuk Ahmad Zaini Ithman said the idea of offering longer-term housing loans was to preserve the value of assets or investments.

“Ownership in the past meant buying for investment. But now, a house is a place for the family to stay.

“I think more financial institutions should pursue this ap proach,” he said.

By The Star

Tough job for PNB

PERMODALAN Nasional Bhd (PNB) has studied market trends before deciding to embark on the Warisan Merdeka development, its president and group chief executive Tan Sri Hamad Kama Piah Che Othman says. The 100-storey tower will be a five-star green building which is still uncommon in Kuala Lumpur.

“We believe it will be able to meet the market’s growing need for such office space,” he explained when asked about the rationale for the tower project.

At a time when the world economy is still uncertain and amid rising prices, many Malaysians have questioned the necessity for the RM2.5bil to RM3bil tower project after Prime Minister Datuk Seri Najib Tun Razak announced the project in his budget speech last Friday.

Responding to questions on the project recently, Najib stressed the Government did not instruct PNB to construct Warisan Merdeka and that it was the investment agency’s board of directors that had wanted to embark on the project.

He said the area would be a business centre for both the bumiputra and non-bumiputra, and could be one of the country’s attractions that will generate profit.

Developers and property consultants have urged PNB to undertake extensive and in-depth feasibility and market studies to weigh the cost-benefit and potential impact of the tower on the property market.

The public also wants an environmental impact assessment study to be done on the project to look at the impact to the social system, the traffic situation and suitability of the site.

Most of the concerns are on whether the high-impact commercial development will cause an over supply of office space in the capital city, and the impact of the skyscraper to the worsening of the heavy traffic jams in the area.

There are also a number of schools in the vicinity and the expected heavier flow of the traffic have worried students, parents and the school authorities.

Hamad says PNB is looking to have the mass rapid transit (MRT) plying the Warisan Merdeka route.

“We are aware of the public’s concerns that the traffic jam in the area will worsen with the tower project, and will be working with the relevant authorities to look at ways to improve the infrastucture and traffic flow in the area,” he adds.

Hamad also allays fears that funds from unit trust investors or the Government will be used to finance the project.

He says PNB has enough funds to finance the whole development if need be but he does not rule out borrowings if interest rates are reasonable.

On the project’s positioning, Hamad stresses that the heritage elements of Merdeka Stadium will be one of the central themes and highlights of the project.

If that is the case, industry observers have asked whether PNB will look at introducing a full-fledged culture village around the historical site that can also double up as function destinations to ensure the the project will remain functional.

To avoid the project becoming a “white elephant” like many observers fear will happen, the culture village should be kept alive with interesting cultural performances and events on a daily basis.

Perhaps, the National Museum should be moved there as its historical ambience is the most appropriate to showcase important things and events of the country’s past.

On the rationale for the 100-storey tower instead of vying to be the world’s tallest, Hamad explains: ”We are not competing with anybody in the world in terms of the height of the building. Currently, there are already three buildings being planned at 1000m heights, surpassing Burj Khalifa’s 828m. There will be no end to this sort of competition. So making it the world’s tallest is a non-issue and we would not go into this.”

Hamad stresses that the building is not being designed to outshine any particular organisation, including the Petronas Twin Towers which have been and will continue to be Malaysia’s icon.

“We want the building to look architecturally good and acceptable whilst incorporating the green features. These are market expectations in the near future. With this, we can get a reasonable return on our investment on this building.”

Besides being the country’s most famous landmark, the 88-storey Petronas Twin Towers are the world’s tallest twin buildings today. Completed in 1998 at a cost of US$1.2bil, they were the tallest buildings in the world until they were “dethroned” by Taipei 101 which was completed in 2004.

The twin towers also have world renowned Argentine-American architect César Pelli, to thank for its unique and timeless design. The towers were constructed largely of reinforced concrete, with a steel and glass facade which have given them the magical and glittering effect.

On the cost difference between the two projects, Hamad says: “We are comparing relative costs, in terms of the timing of these two developments. Material prices have gone up quite a fair bit. The real yardstick is the return on investment, using current market prices and costs for the building materials and other related costs.”

By The Star