Property transactions may hit RM100bil

KUALA LUMPUR: A total of 342,179 property transactions worth RM96.77bil were recorded between January and November last year, which means the full year's transactions could reach the RM100bil mark, said Knight Frank Malaysia managing director Eric Ooi.

Ooi was commenting on figures provided by the Valuation & Property Services Department director general Datuk Abdullah Thalith Md Thani at the Property Market Outlook for 2011 yesterday.

“This is the first time transactions value has reached this figure,” said Ooi at the event organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia.


Eric Ooi ... ‘This is the first time transactions value has reached this figure

In light of this, and considering Malaysians penchant for property investments, Ooi said it was unlikely that property values would fall. It may not rise as much as it did last year, but the uptrend is there.

Ooi, together with Henry Butcher chief operating officer Tang Chee Meng, said property value rose between 30% and 40% last year.

“This is the first time property went up so much,” Tang said, adding that he had never seen such record growth for the property market in 30 years.

“The condominium market saw a price rise of between 60% and 100% between 2003 and 2008. This pales in comparison to the rise in value of landed units which rose as high as 40% in just one year. If one were to average out the rise in condominium prices, it is about 20% a year,” Tang said.

Earlier, in his overview of the Malaysian economy and the Malaysian property market, director general of Valuation & Property Services Department Abdullah Thalith said it was very significant that the transaction volume between the 11-month period increased 12.2% year-on-year, but the value of transactions increased at a higher rate of 35% from RM71.67bil to RM96.77bil.

“The recovery of the Malaysian economy has reinvigorated the overall property market,” he said.

In terms of lending in the broad property sector, the purchase of residential property took up the lion share of bank loan, at 58.8% compared with the purchase of non-residential property, at 22.1%. Construction took up 9.6%.

“Credit expansion for the broad property sector in the banking system increased from RM342.09bil as at the end of September 2009 to RM391.25bil as at end-September 2010,” he said.

“This means the residential property sub-sector remained the main mover of the property market,” he said. In this residential market, transactions in Kuala Lumpur recorded a growth of 8.2%, Selangor 7.2%, Johor 3.6% and Penang (island) 9.7%.

Terraced houses continued to dominate the market, especially in Selangor with 27,165 transactions, Johor with 12,555 transactions and Penang 4,358 transactions.

The city of Kuala Lumpur recorded more condominiums changing hands, 10,333 units versus terraced housing at 3,756 units.

By The Star

Property deals this year to breach RM100b

However, the growth of Malaysia property sector may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties

PROPERTY transactions will surpass RM100 billion this year but the sector will not enjoy 35 per cent growth as it did last year, said a government official.

Growth may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties resulting from government initiatives under the 2011 Budget.

Datuk Abdullah Thalith Md Thani, director-general of the Valuation and Property Services Department in the Ministry of Finance, said the volume of properties transacted will, however, grow by double digits to more than 350,000.

Between January and November 2010, there were a total of 342,179 properties transacted, worth RM96.78 billion.

Abdullah Thalith thinks there will be more than RM100 million in sales recorded in December, breaching RM100 billion for the whole year.

The RM100 billion mark, a record high for Malaysian properties, would be 35 per cent more than 2009.

In 1998, the value of properties transacted was about RM60 billion, with 5 to 10 per cent growth per annum.

Abdullah Thalith told reporters yesterday in Kuala Lumpur at the 2011 property market outlook summit that the positive economic outlook and the Economic Transformation Programme will drive growth this year.

He said the prime movers will be the redevelopment of the Sungai Besi land, Batu Cantonment army base, Rubber Research Institute land in Sungai Buloh, Matrade project by Naza Group, the 100-storey tower by Permodalan Nasional Bhd and the Mass Rapid Transit project.

"If all these projects can start this year, it will uplift the market. We expect more people to buy low to medium-end properties. We also expect movements in the luxury segment, commercial and industrial," he said.

By Business Times

TILB focuses on mainland Penang projects

KUALA LUMPUR: Newly-listed Tambun Indah Land Bhd (TILB) expects to complete the first of its seven ongoing property projects on mainland Penang in the first quarter of this year.

The company will complete the second phase of its RM79mil Juru Heights bungalow project by March, according to managing director Teh Kiak Seng.

“We have seven projects ongoing this year with a GDV (gross development value) of RM530mil. They include medium-cost apartments and mid-range housing developments,” he said after the listing ceremony of TILB on the Main Market of Bursa Malaysia yesterday.

Going forward, Teh said TILB would continue to develop projects on mainland Penang (as opposed to the island) as properties there were more affordable.


Teh Kiak Seng (second from left) and Tambun Indah Land directors monitoring the company’s share price on Tuesday.

“We are getting more purchasers coming to the mainland because they can't afford prices on the island,” he said, adding that it would be more viable for TILB to tap the mainland property market.

“The Penang state population is about 1.6 million. The island has 700,000 people. There are more people staying on the mainland and it is also attracting a lot of FDI (foreign direct investments),” Teh said.

He cited, as an example, Japan-based printed circuit board maker Ibiden Co Ltd, which has invested in a RM1bil plant at Penang Science Park. He also mentioned Nasdaq-listed Rubicon Technology Inc, a leading global light-emitting diode (LED) manufacturer, as well as US-based Honeywell Aerospace, a leading provider of avionics and electronics, which have also invested substantially in the mainland.

“Connectivity (in Penang) is also being improved with the construction of the second Penang bridge,” Teh said, adding that the Federal Government had big plans to develop Butterworth.

“Expansion at Butterworth Port has just been completed. The main railway station is also in Butterworth. All of this will create opportunities such as new jobs and attract more people, who will need to buy houses to be closer to the job market.”

Teh also said the Penang mainland property market was more active and had better growth prospects.

“During the recession in 2009, the Penang island property market grew by 0.3%, but mainland Penang grew by 9.3%,” he said.

“Also, from 2002 to 2010, the island housing market grew by 4%, but mainland grew by 5.4%.”

According to Teh, TILB has a land bank of close to 300 acres, all located on the mainland.

“We have an option of another hundred acres. We move very fast, we buy land and develop. We don't buy land to keep as it's too costly. This has been our business model since the beginning.”

TILB was negotiating with land owners in Penang to acquire land for projects in 2012 and “actively seeking” land in the Klang Valley, he said, adding: “We've seen some land in the Klang Valley but we haven't bought any. We're still looking but the project must be viable.”

On another note, Teh said the company had set a dividend payout policy of 40% to 60% of its annual net profit.

TILB recorded a net profit of RM25.37mil for its financial year 2010.

The company opened at 80 sen and closed at 80.5 sen, a 10.5 sen premium over its issue price of 70 sen. A total of 41.5 million shares were traded, making it the second most active counter of the day.

By The Star

Bolton eyeing 44ha site in Penang

PROPERTY developer Bolton Bhd is looking to expand its landbank in Penang with a potential acquisition in Teluk Kumbar this year.

Bolton executive chairman Datuk Azman Yahya yesterday said it was hopeful to conclude the proposed acquisition of the 44ha site within two to three months.

The land on the south-western end of Penang island is estimated to cost Bolton RM150 million, Azman added.

"Our maiden project in Penang - Surin, has been encouraging and we are now looking at expanding our landbank on the island via acquisitions and joint ventures," he told reporters after a topping out ceremony for the Surin Tower B project located in Tanjung Bungah.
Surin is a two-block 28-storey luxury condominium project which is built on a freehold parcel of elevated land and carries a development value of RM199 million.

Of the project's 390 units, about 77 per cent had already been sold out and about 30 per cent to 35 per cent of the buyers were foreign, Azman said.

The units, which were sold at prices ranging from RM345,998 to RM1.2 million, offer amenities such as an infinity pool, rooftop garden, two covered carpark bays per unit, three tier security, a barbeque area and sky decks.

On the planned purchase of the Teluk Kumbar land, Azman said Bolton was looking at building landed property units, along with apartments in a gated community.

"Our target investors for this proposed project would be locals," he added, saying that Bolton remains on the lookout to buy land in Tanjung Bungah.

"We remain convinced of Penang's vibrancy and growth prospects and we are actively looking for development opportunities.

"The residential market remains buoyant and this is a segment which we want to focus on," Azman said.

In the Klang Valley, he said the company will soon unveil a block of luxury serviced residences at Jalan Bukit Ceylon, an exclusive gated community in Ukay Perdana, and the 51 Gurney development.

The latter project is touted as Malaysia's first and only super luxurious condominium which comes complete with spacious driveway on every floor and a car park within every unit.

By Business Times

Bina Puri wins RM62.8m Thai project

Bina Puri Holdings Bhd''s associate, Bina Puri (Thailand) Ltd (BPTL), has secured a 626 million baht (approximately RM62.76 million) project to undertake structural and architectural works for phase one of Phahonyothin Park condominium in Bangkok, Thailand.

"Thailand remains one of our key markets overseas. To date, we have secured projects exceeding RM1.5 billion in Thailand," said Group Managing Director Tan Sri Tee Hock Seng in a statement today.

He said the awarding of the project proved the company's project and management capabilities in delivering results and its continued acceptance in this region.

"We will continue to strengthen our reputation in Thailand and are confident of clinching more projects there," he added.

The project is a joint venture between BPTL and Dimara (Thailand) Ltd and is expected to be completed in 15 months.

The company said the project would contribute positively to group earnings for the financial year ending Dec 31, 2011.

Inclusive of this project, Bina Puri's outstanding orderbook stands at RM2.5 billion, which will sustain the company's earnings for the next two years.

By Bernama

AmResearch maintains buy on SP Setia

KUALA LUMPUR: AmResearch maintains its BUY rating on SP Setia and raises its fair value from RM6.80 per share to RM7.10 per share based on an unchanged 5% discount to its revised fully diluted (FD) net asset value (NAV) of RM7.46.

“We lifted our FD NAV from RM7.15 to RM7.46 to account for the estimated accretion to assets value from its landbanking deal with the Ministry of Health (MOH). SP Setia has been given the right to develop 40 acres of prime land in Bangsar in return for a new health and research complex on a 55-acre site in Bandar Setia Alam,” said AmResearch

Based on AmResearch's conservative estimated plot ratio of 5 times (x) and an efficiency factor of 70%, the net saleable area is about 6.1msf. Assuming an average selling price of RM1,000psf, the gross development value is about RM6.1bil.

Compared to status quo, AmResearch said this land swap is accretive because the Bangsar site has high development potential and ready end-user demand. And, the relocation of the new research complex would accelerate the maturity of Setia City, the commercial precinct in Setia Alam.

“But the deal fell short of consensus expectations. SP Setia would only have a 50% stake. The joint venture company would also have to distribute 20% of its profits to the MOH,” “SP Setia also spooked the market by announcing a surprise placement of up to 15% (153mil) of its paid-up capital to raise funds for its existing projects and future' expansion,” said AmResearch.

AmResearch said the market would need to digest the immediate dilution risk from the proposed placement and the back-ended accretion to assets value from the land swap. After the sell down yesterday, this trade-off is already being priced-in.

Hence, the risk reward profile is turning more favourable starting from a lower entry point because the fundamental story is intact, we believe. For a start, it is poised to deliver at least RM3bil in sales this year, given maiden contributions from the prolific KL Eco City.

Given a recapitalised balance sheet (post the proposed share placement), SP Setia must again demonstrate its uncanny ability to grow acquisitions.

The litmus test though is how prolific and significant its next land deal is going to drive NAV growth, considering its share capital would have expanded by 15% post the share placement.

By The Star

Axis-REIT records RM16m profit in Q4

AXIS REIT Managers Bhd has reaped RM16.16 million profit in its fourth quarter ended December 2010 and plans to distribute 5.25 sen a unit to investors.

"Last year, we saw the highest gain in fair value of investment properties for a single year since the listing of the trust," said chief executive officer Stewart Labrooy. He said the company revalued 14 of its stable properties.

"It has led to an increase in the net asset value of the trust to close at RM2.009 a unit compared with RM1.842, a year ago," he told reporters at a briefing in Kuala Lumpur yesterday.

In the fourth quarter of 2010, Axis-REIT bought three more properties, namely Tesco Hypermarket, Axis PDI Centre and Axis Technology Centre. It also concluded the purchase of two IDS warehouses in Seberang Prai, Penang.

Following these acquisitions, Axis-REIT now owns 26 properties. Its net asset value rose to RM1.18 billion in 2010 from RM884.96 million in 2009.

Two days ago, Axis-REIT said it will sell an industrial complex in Port Klang for RM14.5 million by June 2011.

"We need to maintain growth by culling smaller assets where the returns have stagnated. We will bring in assets that have capital gain potentials," said Labrooy.

"We'll gain RM764,000 from the sale of industrial complex in Port Klang and this will be chanelled back to unitholders," he added.

On outlook for 2011, he said Axis-REIT is looking to buy five more warehouses in Johor and the Klang Valley and two more office blocks in Cyberjaya. So far, the company has set aside RM365 million for these acquisitions.

By Business Times

Jetson Development buys land in Penang

KUMPULAN Jetson Bhd’s 51 per cent-owned subsidiary, Jetson Development Sdn Bhd, is buying three plots of first grade freehold land in Penang from Malaysia Building Society Bhd for RM14 million.

The company said the purchase fits into its strategy to implement boutique developments in Penang, which will appeal to the niche local and foreign property buyers, who demand luxury and secluded prestigious address.

By Business Times

Sycal Ventures unit signs property JV

Sycal Ventures Bhd's wholly-owned unit, Sycal Properties Sdn Bhd, has signed a joint venture agreement with Global Net Communication Sdn Bhd.

In a filing to Bursa Malaysia today, Sycal said the companies aimed to jointly develop three plots of land in Kuala Lumpur into a high-end residential villas with estimated gross development value of RM70 million.

It said the development would contribute positively to the construction order book of Sycal Group.

By Bernama

SP Setia to develop govt complex

PETALING JAYA: SP Setia Bhd's 50% owned associate Sentosa Jitra Sdn Bhd has received the Government's approval-in-principle to negotiate over terms to develop a new integrated health and research complex for the Health Ministry in Setia Alam, Selangor.

In a filing with Bursa Malaysia yesterday, SP Setia said the approval-in-principle was subject to terms and conditions to be agreed between Sentosa, the Public Private Partnership Unit (UKAS) in the Prime Minister's Department and the Health Ministry.

The proposed complex, to be known as the 1National Institute of Health (1NIH) Complex, is expected to be developed on 55.33 acres owned by SP Setia's wholly-owned unit, Bandar Setia Alam Sdn Bhd, in Setia Alam.

The complex will house the various national health institutes and relevant supporting offices and research centres under the ministry's purview which are currently situated on 40.22 acres along Jalan Bangsar and other parts of Kuala Lumpur.

In exchange, SP Setia will get the 40.22-acre Government land which it will redevelop into an integrated mixed residential and commercial project.

It will provide the Health Ministry and the Government with a 20% share of the net profits from the redevelopment.

“The land swap nature of the deal means that the ministry and the Government will not have to fund any part of the cost for the construction of the new 1NIH Complex,” the company said.

SP Setia was responding to a report over the weekend that it would build the complex at a cost of RM600mil to RM700mil.

The statement to Bursa did not mention the estimated cost of the complex or the estimated value of the proposed development in Bangsar.

In a separate statement, SP Setia announced a proposed placement of new shares of 75 sen in the company, representing up to 15% of its paid-up capital and a proposed 1-for-2 bonus issue.

The proposed placement would enable the company to raise funds to finance some existing projects, for future expansion plans as well as for general working capital requirements.

By The Star

SP Setia plans project, in talks with govt on KL site

SP Setia Bhd plans to undertake a mixed residential and commercial project in Bangsar, Kuala Lumpur, giving the government a 20 per cent share of its net profit from it.

The 16.3ha of prime land along Jalan Bangsar, where it proposes to undertake the project, is owned by the government.

SP Setia is currently in talks with the government to be given that land in exchange for building an integrated health and research complex for the Ministry of Health (MoH) on 22.4ha of land it owns in Setia Alam, Shah Alam.

It told the stock exchange yesterday that its unit, Sentosa Jitra Sdn Bhd (SJSB), has the government's in-principle approval for the land swap proposal.

The proposal was mooted by SJSB to the government along the lines of the public-private partnership concept.
The land in Bangsar currently houses five National Institute of Health agencies under the MoH's purview, which will be relocated to Setia Alam.

SP Setia said SJSB had finalised its design and costing for the new complex, to be known as the 1National Institute of Health (1NIH), and is now ready to commence negotiations with the MoH and the Public-Private Partnership Unit in the Prime Minister's Department.

The proposed new 1NIH will serve as a hub and centre of excellence for health research, training and consultation at both the local and global level.

"The land swap nature of the deal means that the MoH/government will not have to fund any part of the cost for the construction of the new 1NIH complex."

This, it said, will be paid for by the difference between the current market values of the Bangsar and the land in Setia Alam.

SP Setia told the stock exchange in a separate filing later that it plans to place out up to 15 per cent of its issued and paid-up capital. The issue price will be determined by way of book-building.

By Business Times

Property transactions to top RM100b in 2011

Property transactions are expected to exceed RM100 billion in worth this year from RM96.77 billion in the first 11 months of last year, said Director General of Valuation and Property Services Department, Datuk Abdullah Thalith Md Thani.

He also said the recovery of the economy has reinvigorated the overall property market with the residential property sub-sector remaining the main mover of the property market.

The value of transactions in the residential sector between January and November last year rose 7.6 per cent to RM222.29 billion taking up 60.2 per cent share of the volume of property transactions, he said during a press conference here today on the upcoming 4th Malaysian Property Summit 2011.

The transactions of commercial properties rose 21.3 per cent while that of industrial properties went up 25.6 per cent, agriculture 17.9 per cent and development land 24 per cent.

In the residential property sub-market, the major states recorded positive growth with the city of Pulau Pinang recording the highest rate of 9.7 per cent followed by Kuala Lumpur at 8.2 per cent and the state of Selangor with 7.2 per cent growth.

By Bernama

S P Setia back in the limelight

KUALA LUMPUR: S P Setia Bhd has bounced back strongly after taking a backseat in recent months when mega-property mergers took the spotlight. The property developer has confirmed securing 40 acres of prime land along Jalan Bangsar.

It also announced a fund-raising exercise via a proposed placement of 15% of new shares to be done via book-building that could easily raise RM1.14 billion. The fund raising comes in tandem with a one-for-two bonus issue.

In an announcement confirming a report in The Edge, S P Setia said it had received an approval-in-principle from the Prime Minister’s Department to talk over terms for the proposed development of a new integrated health and research complex for the Ministry of Health (MOH) in Setia Alam.

In return, S P Setia’s 50% subsidiary Sentosa Jitra Sdn Bhd gets a piece of prime land along Jalan Bangsar where the present facilities belonging to the health ministry are located.

“The company said that it had received a letter on Sept 24, 2010 by Unit Kerjasama Awam Swasta (UKAS) of the approval-in-principle granted by the Federal government for Sentosa Jitra to enter into negotiations with UKAS and the MOH over terms for the proposed development of a new integrated health and research complex on a 55.33-acre land in Setia Alam by way of land swap for the government land located along Jalan Bangsar,” the company stated.

In the last two months, S P Setia’s position as the industry leader among property developers was jolted following the mergers between UEM Land and Sunrise Bhd, and the proposed tie-up between Malaysian Resources Corp Bhd (MRCB) and IJM Land Bhd. The MRCB-IJM Land deal did not take off but the UEM Land-Sunrise merger had created a large property company overtaking S P Setia as an industry leader.

However, S P Setia’s president and CEO Tan Sri Liew Kee Sin last month had told analysts and reporters that the developer would bounce back and was looking at aggressively expanding its landbank in the Klang Valley.

This, he appeared to have delivered as the piece of land along Jalan Bangsar is one of the few sizeable parcels remaining in that location.

The proceeds from S P Setia’s fund-raising exercise are partly for the MOH development in Setia Alam that is expected to cost RM600 million to RM700 million. The funds are also to finance its existing projects, general working capital requirements, future expansion plans as well as to defray related expenses.

“The funds to be raised are timely especially for the MOH deal and will help expedite the development of Setia City to complement the presence of the 1NIH Complex,” Liew said in a statement yesterday.

S P Setia’s other development projects are also expected to benefit from the corporate exercise, including its KL Eco City (KLEC) project opposite Mid Valley, and the Fulton Lane project in Melbourne, Australia. The KLEC is a joint venture with City Hall.

S P Setia has plans to redevelop the land in Bangsar into an integrated mixed residential and commercial project where the MOH will have a 20% share of the net profits from the redevelopment under the proposal.

“We are tremendously excited about the project given the site’s excellent location which provides a rare opportunity for the group to further showcase our skills in developing luxury residential and integrated commercial products within the affluent Bangsar and Federal Hill areas,” Liew added.

Analysts are positive on this development. According to CIMB Research, the 40 acres could be worth RM523 million to RM871 million, based on the price of RM300 to RM500 psf for residential bungalow land in Bangsar.

“If the land has a plot ratio of four times or higher with commercial title, it could be worth several times more,” the research house said.

CIMB said that assuming a plot ratio of four to five times and an average selling price of RM1,200 psf, the gross development value of the Bangsar land would amount to RM8 billion to RM10 billion.

Additionally, CIMB expects margins for the project to be higher than KLEC’s as infrastructure requirements are likely to be considerably lower than the RM400 million expected to be spent on KLEC.

CIMB also assumes that S P Setia has a 50% to 60% stake in the project, which is similar to its effective 60% stake in KLEC, the surplus value from the land at a net cost of RM700 million for the 1NIH Complex alone would be around RM550 million or 48 sen per share, boosting the revised net asset value (RNAV) to RM6.21.

The research house kept its target price at RM7.45 but noted that there was a possibility of raising it to around RM8 based on the surplus value of the Bangsar land.

“There could be further upside to the RNAV as the shift of several thousands of ministry staff to Bandar Setia Alam would make S P Setia’s flagship township and the RM5 billion 158-acre Setia City commercial centre even more attractive,” it said.

Potential re-rating catalysts include positive news on the Bangsar land, continued robust sales, newsflow on other landbank and strong earnings growth. S P Setia remains the property sector bellwether and CIMB’s top pick for the sector.

The counter closed unchanged at RM6.70, with its market capitalisation at RM6.81 billion. S P Setia’s share price has risen some 50% since late September, thanks to the impending launch of KLEC.

By The EDGE Malaysia

China property prices climb in December

SHANGHAI: Property prices in China’s major cities posted a fourth straight month-on-month rise in December and sales picked up pace, data showed yesterday, despite efforts to cool the market.

Prices in 70 major cities were up 0.3 per cent last month from November and were 6.4 per cent higher than a year ago.

The month-on- month gain in November was 0.3 per cent.

The annualised surge peaked in April, when prices soared 12.8 per cent, but growth has slowed since then.

By AFP

Sunrise shares to be delisted on Jan 21

SUNRISE Bhd’s shares will be removed from the Main Market of Bursa Malaysia with effect from 9am on January 21.

Sunrise, which develops high-rise residences and commercial properties locally and abroad, has been taken over by UEM Land Holdings Bhd.

By Business Times

Axis-REIT to sell Port Klang complex

AXIS Real Estate Investment Trust (REIT) hopes to complete the sale of an industrial complex in Port Klang for RM14.5 million by the end of June this year.

Axis will make a net gain (after real property gains tax) of RM764,000 from the sale to freight services firm Freight Management Sdn Bhd.

It told Bursa Malaysia yesterday that the amount would be distributed to its unitholders this year at 20 sen a unit and also be used to reduce its gearing.

It was the right time to dispose of the property as it offered limited upside for future rental growth, Axis added.

By Business Times

M’sia-S’pore deal leads to property openings

The station site at Tanjong Pagar has the greatest redevelopment potential

PETALING JAYA: The recent historic agreement between Malaysia and Singapore to settle the long-standing railway land issue which runs through Singapore to Malaysia will open up property development opportunities in Singapore and Iskandar Malaysia not envisaged before, a property consultant said.

According to DTZ Research in its latest report, the warmer bilateral relations, and smoother and cheaper transport system arising from the agreement will give a boost across all property sectors in Iskandar Malaysia.

“With a proposed mass rapid transit (MRT) line linking Johor Baru city centre to Nusajaya, there will be a tendency for a shift in value towards Nusajaya as more newer physical developments take place and the cost of using the Second Link becomes more competitive,” the report added.

For Singapore, judicious land allocation has always been an integral part of real estate planning and development given its limited land size. The reversion of the railway land will thus enable the authorities to amalgamate the track land with adjacent sites and bring about more optimal use of the land.


Brian Koh says the railway agreement has unfolded a new chapter for Malaysia and Singapore.

DTZ Malaysia executive director Brian Koh said the railway agreement had unfolded a new chapter for Malaysia and Singapore and both countries can co-build a new growth story that resembles the Hong Kong-Shenzhen Metropolis model.

However, unlike Hong Kong and Shenzhen which are both under one country, a lot more co-operation and government involvement is needed between Singapore and Malaysia to overcome two distinct economic and legal systems and build trust and co-operation, while pursuing their respective national and economic objectives.

“The degree of success of Iskandar Malaysia will be partially determined by political co-operation with neighbouring Singapore as well as by economic factors,” Koh said.

More skilled and semi-skilled migrants from other parts of Malaysia may be attracted to reside in Iskandar Malaysia to take advantage of the employment opportunities in Singapore through daily commute without having to pay for the high residential cost of living across the causeway.

“Demand for homes from foreign buyers, particularly Singaporeans, is envisaged to improve due to the higher confidence level in Iskandar Malaysia from the warming bilateral ties,” he added.

In the office sector, there is potential for a shift of low-end commercial service activities, namely back office processes, from Singapore into the Johor Baru central business district to take advantage of cost arbitration, given the widespread use of the English language and the general availability of mid-level executives in Johor.

The retail and hotel sectors will also benefit from the higher tourist flow into Johor, while more industrial and logistics investments can also be expected from Singapore.

DTZ head of South-East Asia Research Chua Chor Hoon said that among the returned railway land in Singapore, the railway station site at Tanjong Pagar had the greatest redevelopment potential given its size and the government's plans for this district.

While the rest of the returned land are unlikely to be developed anytime soon, one area that is likely to see some earlier new developments will be at Bukit Panjang where a MRT station would be ready in 2015, providing some impetus to develop the vacant land around it.

The once sleepy Tanjong Pagar area is perking up with newly completed and pipeline offices, hotels and apartments. Higher rents and prices are being achieved and more investors are becoming interested in the area.

“The Spottiswoode area just north of the railway station may be totally rejuvenated as the old existing residential developments are prime candidates for redevelopment,” Chua said.

By The Star

SP Setia wins Penang convention centre deal

SP Setia Bhd, the country's largest developer by sales has won a RM300 million project to build and operate the Penang International Convention and Exhibition Centre (sPICE), Bloomberg reported, citing an email statement from the Penang Chief Minister Lim Guan Eng.

Last Thursday, Business Times reported that the property developer was the front runner and on the verge of winning the job.

Securing the project should bode well for SP Setia, which posted sales of RM1.74 billion and a net profit of RM251.81 million in the year ended October 31 2010.

The project aims to create a "Penang People's Park" that includes the country's first subterranean sPICE, a 2.83 hectares public park on the rooftop, a refurbished and upgraded Penang International Sports Arena (Pisa), a refurbished and upgraded Aquatic Centre and a four-star hotel with retail outlets and a spacious parking lot.

The project will be developed through a public-private partnership agreement between the Penang Municipal Council (MPPP) and developer SP Setia Bhd's unit Eco Meridean Sdn Bhd.
On September 3 2010, SP Setia had bought 2 ordinary shares of RM1.00 each in Eco Meridian Sdn Bhd, resulting in the private company becoming a wholly owned unit of SP Setia.

Financing for the Penang project will see MPPP injecting some RM50 million, through a combination of land and cash, while Eco Meridean will finance the rest.

The proposed sPICE, which initially came with a RM50 million priceline, has been mired in controversy ever since Lim proposed it.

One of the concerns raised was that the project would incur huge expenditure, which could result in the council becoming insolvent.

Lim, however, claimed the council could save some RM25 million from the refurbishment, repairs and upgrading work on Pisa and the Aquatic Centre and that Eco Meridean will pay RM13.5 million for land to build a four-star hotel to complement sPICE.

This means that the net sum of MPPP's investment in the project would be RM11.5 million.

Work on the project is expected to start within three to six months' time and will be completed in three years.

By Business Times

SP Setia: New MoH complex design ready

KUALA LUMPUR: SP SETIA BHD has finalised the design and costing for the proposed development of a new integrated health and research complex for the Ministry of Health (MoH) in Setia Alam, Selangor.

The company said on Monday, Jan 17 that its associate Sentosa Jitra Sdn Bhd (SJSB) had finalised its design and costing for the new complex based on the MoH’s brief of requirements.

It added SJSB is now ready to commence negotiations with the Public Private Partnership Unit in the Prime Minister’s Department (Unit Kerjasama Awam Swasta) and the MoH “based on the proposal submitted to the government”.

SP Setia said a UKAS had issued a letter on Sept 24, 2010 informing it about the approval-in-principle granted by the government to SJSB to enter into negotiations with UKAS and the MoH over terms for the proposed complex to be located on approximately 55.33 acres of land at Setia Alam via a land swap for the government land measuring 40.22 acres along Jalan Bangsar, Kuala Lumpur (“Proposal”).

It said the government’s approval-in-principle to SJSB’s proposal, subject to terms and conditions to be agreed. It added SJSB has finalided its design and costing for the new complex.

SP Setia said the proposal would enables the MoH to reap the value of matured government land to obtain a fully integrated and modern new 1NIH Complex capable of housing all the relevant national health and research institutes and support functions in a single location within the vibrant, fast-growing and highly accessible township of Setia Alam.

“The MoH/government will also have the opportunity to participate in the redevelopment of the MOH Land through its share of 20% of the net profits from the development,” it said.

In terms of benefits, SP Setia said SJSB had started the master plan to redevelop the MoH Land.

“Its superb location provides a rare opportunity for S P Setia to further showcase its skills in developing luxury residential and integrated commercial products within the affluent Bangsar and Federal Hill areas,” it said.

By The EDGE Malaysia

MRT may cost over RM36.6bil

PETALING JAYA: The cost of building the mass rapid transit (MRT) transport system, which is scheduled to begin construction in six months, may swell beyond the projected RM36.6bil as developers and residents have begun lobbying on the proposed locations and types of stations.

Business leaders want the MRT stations to be located close to the centre of commercial activity, in some cases where they have projects or plan to build one, but residents living near or adjacent to the proposed lines have voiced objection against the MRT tracks being built above ground and want the lines and stations to be underground so as to avoid congestion and noise pollution issues.

At the heart of the matter is the alignment of the MRT line, particularly where it should go, where it should stop, and lobbying have begun to have more than 9.5km of the first phase of the 60km Sg Buloh-Kajang line constructed underground.

The entire MRT line is estimated to run a total of 150km at a cost of RM36.6bil. Other lines will be added later. All these lines, together with the existing Star, LRT and Komuter rail will form part of the country's Urban Transport master plan.

At the session with business communities, developers who own shopping malls and commercial developments were lobbying for the line and station to be located at, or as close to their commercial properties as possible.

“We are willing to adopt' a station,” said a source from Uptown's See Hoy Chan Sdn Bhd over the telephone. The company is a different entity from See Hoy Chan Holdings Group which built Bandar Utama and the highly-popular 1 Utama mall. The owners of both companies are cousins.

Uptown's See Hoy Chan is planning to develop the second phase of what is already a densely populated commercial area in Damansara Utama popularly known as Damansara Uptown.

The company plans to build several blocks of offices and serviced apartments on 12 acres. That site is currently being used as a car park.

Damansara Uptown has a working population of about 30,000. Once the 12-acre commercial project is completed, the number will swell by 20,000 to 50,000.

Over in Kuala Lumpur, the Low Yat group is lobbying for the line to be located close to its commercial properties in downtown shopping area Bukit Bintang, in the heart of the Golden Triangle of Kuala Lumpur.

But not all business communities share a common stance. Some fear commuters would use existing parking space at commercial and shopping complexes for using the MRT instead of going shopping.

See Hoy Chan Holdings would like to get in touch with resident associations in the PJ North area to lobby for the line to go underground from Kota Damansara to Bandar Utama station.

“The station can be located below Central Park in Bandar Utama if the line is constructed underground. That location can be turned into a transport hub to serve the vicinity,” said See Hoy Chan Holdings director Datuk Teo Chiang Kok.

“Most of the lines and stations in countries with MRT are located underground. The communities in Kota Damansara, along Persiaran Surian, Bandar Utama and neighbouring residential areas are already there. To build elevated lines over what is already a densely populated area would bring about negative impact on the entire area,” he said.

At the same dialogue, Sunway Damansara resident association representative Ngian Siew Siong appealed to Land Public Transport Commission (LPTC) to have the line go underground in the Kota Damansara area. LPTC is planning for a station to be located at Dataran Sunway, a highly congested area during peak hours. Ngian is also Sunway City Bhd managing director (property development).

Contrary to LPTC's views that the MRT system will boost property values, Ngian said that “the visual impact and the noise level over Persiaran Surian and the vicinity will affect property value there.”

“The MRT line is massive and noisy.”

“The various communities are already in existent. Where will the park and ride facilities be located? Do not look at just the alignment, consider having the line underground and having integrated connectivity,” Ngian said. Under the proposed Sg Buloh-Kajang line, 20% of the 9.5km will be underground.

LPTC CEO Mohd Nur Ismal Kamal said the cost would be five to 10 times higher on a per km basis if the line were to go underground, depending on geological conditions.

See Hoy Chan's Teo Chiang Kok said the area comprised laterite and building an underground line will only cost three to four times more.

Earlier, explaining the Government's rationale to build the system, LPTC general manager Amiruddin Maaris said the MRT would have 50% more carrying capacity than the LRT line and will also be 50% wider. One car train carrying capacity is equivalent to three buses, or that of 177 cars.

“It will ease congestion,” he said.

The MRT system is expected to create 130,000 jobs and bring about a huge multiplier effect from its construction and operation. But the vision to bring out the flavour of KL metropolis, which to many, remains dormant because of the lack of public transport and connectivity, Amiruddin said.

Although tendering is expected to begin in April, the alignment can still be tweaked to accommodate the views of the public.

“This is just the proposed line. We will have other sessions to hear the public's views,” said Mohd Nur.

Said a public transport specialist: “Let us learn from the mistakes of the Light Rail Transit and the Star line.”

By The Star