Build-then-sell concept likely to favour big boys

PETALING JAYA: The proposed implementation of the build-then-sell (BTS) concept as a mandatory system is likely to sit well with financially sound, established developers but would be a burden on smaller, less resourceful players.

“This system means that developers have to complete the project first before they can start selling and earning profits,” said an industry observer

“This may be alright with the large players that are financially sound. But for the small ones (developers), they may not have the resources to finance the entire project and have no choice but to start selling as soon as they can,” he added.

An analyst with a local bank-backed brokerage concurred, saying that a mandatory BTS could mean smaller developers would go out of business.

“The BTS will end up burdening the developer financially and this could result in higher selling prices, as the cost of development would be more as they (developers) have to rely on full financing throughout.”

“In the worst-case scenario, housing prices could spike and bankers may not want to risk issuing loans under a concept where houses are only sold once they are completed and have been issued the certificate of fitness for occupation.”

He said one of the arguments against the BTS system was that its implementation could result in the escalation of abandoned projects. “Developers that can't finance the full project will end up abandoning it.”

However, another analyst argued otherwise, stating that projects still got abandoned even under the current “sell-then build” (STB) system.

“The BTS system will probably mean that only the fittest will survive. This means that projects will be undertaken by sound, reputable developers rather than fly-by-night ones. At the end of the day, it's the consumer that gains.”

Yesterday, a local news report claimed that the BTS mode of house ownership is expected to be made mandatory by 2015.

Citing sources, it said that the drafting of the amendments to the Housing Developers Act would include a clause calling for the gradual implementation of the BTS system.

In 2006, then-Deputy Prime Minister Datuk Seri Najib Tun Razak introduced the BTS system as a trial run alongside the STB concept but there was poor take-up among developers despite a host of incentives to make it more attractive for them.

One industry observer said the BTS system usually sat well with potential home-buyers because they would be able to see the final products that they intended to purchase.

“Potential buyers will be more confident to spend their money on something tangible than on a product that's not there,” he said, adding that the BTS system, if implemented, should be done gradually so that the small players could adapt.

“Perhaps the BTS system could be imposed on bigger companies and a more flexible concept implemented for the smaller players,” he added.

By The Star

AmanahRaya REIT pre-tax profit up RM4.3m

AmanahRaya Real Estate Investment Trust (REIT) has chalked up a higher pre-tax profit of RM10.1 million for the fourth quarter ended Dec 31, 2010 from RM8.2 million in the corresponding period 2009.

Revenue increased to RM16.3 million from RM12 million.

In a filing to Bursa Malaysia today, it said the increase in revenue was due to the upward revision in rental rates for several investment properties and additional rental income received from two new investment properties.

"The increase in property expenses is mainly due to a higher provision allocated for repair and maintenance for Wisma Amanah Raya Bhd, Jalan Semantan, in financial year of 2010.

"On the other hand, the increase of the non-property expenses in the current quarter was mainly due to the increase in term loan interest and corporate exercise expenses after the drawdown of the additional new borrowing of RM111 million in the previous second quarter ended June 30, 2010," it said.

By Bernama

Astral units plan mixed property development

ASTRAL Asia Bhd's units, Syarikat Ladang LKPP Sdn Bhd and Tasja Development Sdn Bhd, had signed a joint venture agreement to develop land in Pahang into a mixed property development.

In a filing to Bursa Malaysia yesterday, Astral said the 599.41ha leasehold project would comprise a commercial centre, an industrial centre, a mixed residential designs, public amenities and infrastructure.

Astral said the project incorporated a high-tech park to be named - Kuantan Hi-Tech Park.

It said upon the implementation of the proposed joint venture, the business of Astral would be diversified to include property development.
Astral is principally engaged in the cultivation of oil palm, civil engineering and construction works and property development.

By Bernama

Axis-REIT to offer reinvestment option

AXIS-REAL Estate Investment Trust Managers Bhd (Axis-REIT) has become the third listed company and the first real estate investment trust (REIT) to offer the option of new units in the REIT as dividend payment.



In an announcement to Bursa Malaysia yesterday, the company said it will seek unitholders' approval to offer a reinvestment plan, giving unitholders the option of a cash payout, new units or a combination of cash and new units (electable portion).

It proposes to issue new units of up to 20 per cent of the current fund size of Axis-REIT of 375.9 million units.

This comes after Malayan Banking Bhd and AMMB Holdings Bhd announced similar plans last year.
Maybank's reinvestment plan was dubbed a success, enticing some 80 per cent of shareholders to reinvest in the financial institution, while AMMB's plan is yet to be issued.

Axis-REIT shares fell 0.01 sen yesterday to close at RM2.40.

Bloomberg Consensus shows that eight of research firms have a "buy" call on the stock, while four recommend a "hold". Its average target price is RM2.60.

"Placements are restricted to a pool of investors, and we don't do rights issues because it's dilutive in nature, so the reinvestment plan seems (to be) a very fair way of distributing units to our investors," Axis-REIT Managers Bhd chief executive officer Stewart LaBrooy told Business Times yesterday.

The cash secured from the reinvestment plan will help bolster the REIT's borrowings-to-total assets ratio, which could breach 35 per cent, in view of future acquisition plans.

While there is no rule to specify it, syariah-compliant REITs' debt-to-asset ratio has generally hovered between 30 and 35 per cent.

The total amount of income distribution to be declared, the size of the electable portion and consequently, the maximum number of new units to be issued under the proposed income distribution reinvestment plan would depend on the financial performance and cash flow position of Axis-REIT, and prevailing economic conditions.

"It's a much easier, nicely well- managed way to manage our debt- to-asset ratio," LaBrooy said.

The exercise will also help make the stock more tradeable.

While the issue price of the new units has a 10 per cent discount cap to the average market price prior to the price-fixing date, Axis-REIT has traditionally accorded discounts of between 4 and 5 per cent.

By Business Times

MRCB Q4 profit rises on better margin

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) registered a net profit of RM41.5mil for the fourth quarter (Q4) ended Dec 31, 2010, more than tripling its RM12.4mil net profit posted in the same period last year.

It told Bursa Malaysia that the higher profit was due to improved margin coupled with advanced stage of activities of its engineering and construction works and property development projects at Kuala Lumpur Sentral.

“Higher operational margin was achieved on the back of crystallisation of its ongoing value engineering and efficient project supervision and cost-saving initiatives,” it said.

Its revenue for Q4 stood at RM433.1mil, 53.8% higher than RM281.7mil previously.

MRCB has recommended 1.5% or 1.5 sen per share first and final dividend for the financial year ended Dec 31, 2010 (FY10) less 25% income tax, amounting to about RM15.6mil.

For FY10, MRCB posted a net profit of RM67.3mil, a 94.3% more than RM34.6mil in the FY09. Its revenue rose from RM921.6mil to RM1.07bil.

By The Star

PJD plans RM1.7b projects by Q3

PJ Development Holdings Bhd (PJD) aims to ride on the positive economic data by launching four projects worth about RM1.7 billion by third quarter of this year.

Chief operating officer Lim Lian Seng said the projects are located in Sri Hartamas and Cheras in Kuala Lumpur, Butterworth in Penang, and Kuantan in Pahang.

"There is a surge in demand for new residential, commercial and retail properties in those areas. We expect the products to sell fast under the current market conditions," Lim told Business Times.

This would be the first round of major projects it is launching since 2009, he added.

PJD had spent the last two years working on new plans after the economic crisis in 2008.
"We incorporated new designs and elements as well as reduced the sizes for certain products in some of our approved projects to make them more affordable and appealing to buyers," he said.

In the high-profile locale of Sri Hartamas, PJD will launch Duta Kingsbury, near the high-end commercial hubs of Mont'Kiara Solaris and Dutamas Solaris.

Duta Kingsbury is one of few projects which PJD deferred after the crisis. The project was previously to feature some 200 condominiums of more than 3,000 sq ft and villas.

Lim said it will now comprise more than 300 units of condominiums, ranging from 1,400 sq ft and priced above RM700,000. The villas have been scrapped.

In Cheras, PJD will launch a mixed-integrated development consisting of three blocks of serviced apartments, two shop-office towers with entertainment areas, retail complexes and restaurants.

Lim expects the project to be the new iconic landmark for Cheras.

In Butterworth, PJD will launch phase four of its Harbour Place project, comprising over 300 units of serviced apartments with priced from RM300,000.

In Sungai Karang, Kuantan, the company will launch over 200 units of seaside serviced apartments, close to the Swiss-Garden Resort & Spa Kuantan. Each unit will be priced from RM200,000.

By Business Times

Astral units plan mixed development

Astral Asia Bhd's units, Syarikat Ladang LKPP Sdn Bhd and Tasja Development Sdn Bhd, had signed a joint venture agreement to develop land in Pahang into a mixed property development.

In a filing to Bursa Malaysia today, Astral said the 599.41-hectare leasehold project would comprise a commercial centre, an industrial centre, a mixed residential designs, public amenities and infrastructure.

It said the proposed development was subjected to the shareholders' approval at an extraordinary general meeting to be convened.

Astral said the project incorporated a high-tech park to be named -- Kuantan Hi-Tech Park.

It said upon the implementation of the proposed joint venture, the business of Astral would be diversified to include property development.

"The proposed joint venture and proposed diversification are expected to contribute positively to the earnings of Astral in the future financial years," it said.

Astral is principally engaged in the cultivation of oil palm, civil engineering and construction works and property development.

By Bernama

UOA to list development arm

UOA unit UOA Development Bhd is the developer of mega projects such as the estimated RM6 billion Bangsar South in Kampung Kerinchi.

KUALA LUMPUR: The board of United Overseas Australia Ltd (UOA), which is listed primarily on the Australian Stock Exchange (ASX), has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the local bourse’s main market.

The Edge Financial Daily understands that UOA, which has a dual-listing on the Singapore Stock Exchange (SGX), is expecting to hear back from the local regulators soon and hopes to have its development arm listed on Bursa by June 2011.

UOA Development Bhd, the developer of mega projects such as the estimated RM6 billion Bangsar South development in Kampung Kerinchi, is 100%-owned by UOA Holdings Sdn Bhd, which is in turn a wholly- owned subsidiary of UOA.

It is worth noting that the UOA group listed UOA Real Estate Investment Trust (UOA REIT) on Bursa in 2005.

In its recent filings with the ASX, UOA said it had on Jan 31, 2011 lodged a prospectus exposure draft with the Securities Commission of Malaysia for the latter’s “comment, approval for registration and distribution”.

Earlier, the group in November 2010 made an announcement to both the ASX and SGX stating its intention to list its property development division on Bursa and in fact had undertaken a feasibility study to facilitate the listing.

UOA’ shareholders have not met to weigh in on the proposed listing, although this would happen if and when the Malaysian capital market authorities give their approval, said a company official.

According to filings with the ASX and SGX, UOA intended to maintain a majority stake in the listed entity with the initial public offering of at least 25% of the issued and paid-up capital of the development division.

CIMB Investment Bank Bhd is the principal advisor for the proposed listing.

UOA’s market capitalisation on the ASX was A$338.1 million (RM1.04 billion) as at Feb 8, that on the SGX was S$439.5 million (RM1.45 billion respectively.

The share price of UOA on both exchanges are presently trading close to their 52-week highs of A$0.35 on Feb 4, 2011 and S$0.46 on Feb 8, 2011.

For the financial year ended Dec 31, 2009, UOA posted a net profit of A$111.95 million on the back of revenue of A$152.18 million.

According to UOA’s 2009 annual report, its single largest shareholder was Griyajaya Sdn Bhd with 276.36 million shares, representing a 30.05% stake, followed by Dream Legacy Sdn Bhd with a 12.17% stake and Metrowana Development Sdn Bhd with an 8.4% stake.

UOA was incorporated in Western Australia in 1987 and was listed on the ASX in 1988.

UOA’s associate company UOA REIT is listed in the Main Market of Bursa Malaysia, with assets valued at RM1.05 billion comprising six commercial properties in Kuala Lumpur with a total estimated lettable area of 1.5 million sq ft.

By The EDGE Malaysia

Property players see price rise in Penang

A general uptrend in Penang property prices is expected this year as property developers offer better quality products to more discerning buyers.

Penang-based property players interviewed by Business Times have cited construction material prices and inflation as reasons for them to price their units higher this year.

They, however, gave no indication on the quantum of the price increase.

"Despite the risk of price increases in raw materials, the outlook for the property market remains positive this year," SP Setia Bhd general manager S. Rajoo said.

"As the population increases, the demand for properties will increase as well," he added.

Rajoo said available property units in the state have been decreasing tremendously over the past 10 years due to strong demand for selected property types.

"We anticipate demand for landed properties to remain strong, due to the scarcity of land in Penang."

Eastern and Oriental Bhd said the prices of its properties are determined closer to their launch dates and hinge on prevailing market conditions, raw material prices and market sentiment.

E&O owns and develops Seri Tanjung Pinang masterplan township on Penang island that offers a range of properties including landed homes and high-rise residences by the sea.

"Consumers are highly discerning nowadays and they desire a complete package which includes built-in wardrobes and cabinets, quality fittings along with fine finishing and appliances, said its executive direc-tor Eric Chan Kok Leong.

"This in turn affects the eventual pricing of properties," Chan added.

Hunza Properties Bhd group executive chairman Datuk Khor Teng Tong concurred, saying that the rising trend in property prices tend to reflect an upgrading of quality for the said units.

"As buyers demand for better and higher quality, the price of building materials and land contribute to this rising trend," he said, adding that demand for properties in Penang continues to be strong for residential units in the face of a supply shortage.

For Ivory Properties Group Bhd, better finishings and amenities, teamed with larger liveable spaces are expected to result in a higher range of property offerings.

"With impending inflation, increase in prices of construction materials and factors such as all government-driven economic programmes like the Economic Transformation Programme, National Key Economic Area and the economic corridors which are due to drive the economy towards a higher per capita income, we foresee mid- to high-end properties continuing to be in demand," said its deputy chairman Datuk Seri Nazir Ariff Mushir Ariff.

Ivory's ongoing and upcoming projects in the first half of the year, he noted, will comprise commercial, landed residential and high-rise residences in Penang.

IJM Land Bhd, whose flagship "The Light" development is set to keep the company busy for the next 12-15 years, is looking at a slight price increase for its offerings.

IJM Land general manager Toh Chin Leong cited construction materials and inflation as reasons for the revision of prices.

With a gross development value of RM5.5 billion, The Light is a 60.8ha freehold waterfront development which will be built over the next 11 to 15 years.

"We had a good year in 2010 and we foresee the market to be stable and consistent and look forward to another good year ahead," Toh said.

By Business Times

Firm aims for top spot in property management

SUBANG: Andaman Property Management Sdn Bhd (APM), which is currently building and managing 10 ongoing property projects locally, aims to be the country's leading property management and property related services company.

Its executive director (sales and marketing) Datuk Vincent Tiew said from Jan 2011 onwards, the company would be launching and managing at least 10 properties worth RM2bil simultaneously.

Tiew said of 10 projects it currently managed, four belongs to the Andaman group.

“And we anticipate more developers and landowners to request for our services this year,” Tiew told StarBiz, adding that APM's business model was to develop and manage properties while generating high yield and fast turnaround for developers and landowners.

APM was formed in 2009 by some of the management members of the Andaman Group, an established property developer.

“After honing their skills in property development and managing properties of the Andaman Group, they decided to form an independent company, which is how APM was incorporated,” Tiew noted.

On its business model, Tiew said: “We want to be a leader in the industry in the country and build a strong track record of developing, maintaining and adding value to the properties that we manage in terms of yield, occupancy rates and capital gain for our clients, including property buyers.”

He said when APM was given the go-ahead to develop and manage a property project, it would first be looking to fulfill the developers expectation of the property project in terms of commercial reality, yield, bottom line.

“And our work starts from the onset of planning, authority management, construction and building maintenance to units selling, project administration and securing of strata-title. We also provide developers and landowners advice on how to best position the property development in terms of architectural design and other value-added services in line with developers/landowners expectations,” Tiew said.

On pricing he said: “We built shop lots and residential developments with per unit prices ranging from RM2mil to RM10mil and RM350,000 to RM1mil respectively.”

APM targeted its properties at the mass market to ensure that they remain in demand, even during the downturn, Tiew said, adding that for certain properties, buyers were guaranteed with return on investment.

APM's current property projects for the Andaman Group include Kota D'Sara with gross development value (GDV) of RM125mil, and Casa Residenza (GDV: RM180mil), both located in Kota Damansara. APM plans to launch the The Academia@South City Plaza in Seri Kembangan and the RM700mil The Arc@Cyberjaya in Cyberjaya.

By The Star

Lanson Place to operate Bukit Ceylon Residences in 2012

LANSON Place Hospitality Management Ltd will operate a RM207 million property known as Lanson Place Bukit Ceylon Residences in Kuala Lumpur in 2012.

This will be Lanson Place's third property in Malaysia and form part of the Verticas Residenci development in Bukit Ceylon by Wing Tai Malaysia Bhd. The tower, to be managed by Lanson Place, is owned by Wing Tai Malaysia and Lanson Place's parent company, Wing Tai Properties Ltd. Wing Tai Properties is listed on the Hong Kong Stock Exchange.

The management company's senior vice-president Graeme Laird described the upcoming accommodation as "comfortable and chic" and said that it would have 150 keys with one- to three-bedroom units.

The property has set new standards in the serviced apartments as it has very large units, with a one- bedroom unit measuring 1,100 sq ft and larger ones reaching 2,000 sq ft.

When asked about return on investment for this property, Laird said: " We did not calculate the payback period. The expected gross rental yield in a stabilised year could reach more than 10 per cent. So this would be from year three of operation."

The Bukit Ceylon property hopes to garner an average of RM500 per night when it opens.

Meanwhile, its four-star Lanson Place Ambassador Row with 221 keys closed last year with an average room rate of RM207 and an occupancy of 72 per cent.

This year, it hopes to garner RM250 and fill 70 per cent of its room inventory.

It also operates 132 units in Lanson Place Kondominium No 8, which consists of purely residential apartments.

Where next in Malaysia for Lanson Place? Laird said it could be keen on Penang and Kota Kinabalu in Sabah if the right properties become available and the destinations can support high-end serviced apartments.

But its more immediate priority is to upgrade Lanson Place Ambassador Row in 2013 to lift the product and position it further up- market.

By Business Times

Lanson going places

GUESTS of Lanson Place serviced apartments, who are used to the level of service by the group, will be pleased to know that it plans to triple the number of properties within the next three to five years.

Lanson Place Hospitality Management Ltd, a Wing Tai Asia Group company, is also looking at representations in several new destinations like Vietnam, Indonesia, Taiwan, South Korea, Japan and Australia.

This expansion will also see the number of rooms triple.

"Within the next three- to five- year period, our internal goal is to have 20 properties and 3,000 keys (apartment units)," the management company's senior vice president Graeme Laird said.

"It is ambitious and will all depend on having the right human resources in place", he added.

Lanson Place has a presence in Malaysia, Singapore, Hong Kong and China. In Malaysia, the properties are owned by Wing Tai Malaysia Bhd, which was previously known as DNP Holdings Bhd.

Laird, during a recent visit to Kuala Lumpur from Hong Kong, told Business Times that the expansion could be pure management contracts for its group properties or for others or those where it takes equity.

Lanson Place now has seven properties with a total of 1000 keys. Six of the properties are serviced apartments, while its sole property in Hong Kong is a hotel.

According to Laird, the group is working on introducing two accommodation categories - a premier model that is likely to be called Lanson Place Residences and one which is a rung below, called the Lanson Place Apartments.

The former will typically have 100 to 150 keys while the latter between 150 and 250 keys. Keys refer to the main door as serviced apartments can be a one-, two- or three-bedroom unit.

Currently, Lanson's two top performing properties are located one each in Beijing and Shanghai in China.

The first Lanson Place property commenced operations in 1998 in Singapore. Immediately thereafter, Lanson Place Kondominium No 8, a residential development, and Lanson Place Ambassador Row in Kuala Lumpur opened in the same year.

When asked about competition, especially in Kuala Lumpur where there has been a mushrooming of serviced residences, Laird said: "Our product is different from our competitors. Our style and finishing is of high quality. And so is our standard of service."

"You just have to arrive with a suitcase and be at home immediately," he said.

It positions itself to go beyond expectations in service standards.

If you are a guest from Lanson Place having dinner at a restaurant outside and it starts to pour, don't be surprised if a Lanson Place staff shows up at the restaurant's door just so he can hand over an umbrella to you.

By Business Times

Bina Puri upbeat on cracking RM1b mark

The company expects 2011 to be one of its better years since its listing in 1995, says Bina Puri's group managing director

BINA Puri Holdings Bhd, which is expanding its business, is bullish that revenue will surpass RM1 billion this year, its chief said.



"This year is all about execution of projects and finishing existing jobs. We expect 2011 to be one of our better years since our listing in 1995," group managing director Tan Sri Tee Hock Seng told Business Times.

In 2010, Bina Puri secured projects worth RM2.5 billion. Among the contracts it won were the Ampang light rail transit line extension, the low-cost carrier terminal in Sepang, the Kuala Lumpur-Kuala Selangor Expressway privatisation project and building ramps and a main line bridge for the Eastern Dispersal Link in Johor.

The company hopes to maintain the rate of new contracts this year by securing RM2.5 billion worth of work.
It has bid for building and infrastructure projects worth over RM2 billion, in Malaysia, Thailand, Brunei and the Middle East.

For the nine months ended September 30 2010, Bina Puri posted a net profit of RM8.13 million on revenue of RM861 million. In 2009, Bina Puri made RM6.4 million on revenue of RM780.1 million.

Tee said the company's order book of RM3.3 billion will help improve its earnings for the next two to three years.

Meanwhile, Tee said Bina Puri is on a drive to expand its property division, which contributes less than 10 per cent to its revenue and net profit.

Bina Puri ventured into property development in the 1980sas a boutique developer.

Some of its prime projects include Bukit Idaman township in Selayang and Jesselton Condominium in Kota Kinabalu, Sabah.

Tee expects contribution from the division this year to be in the region of 15 per cent with RM900 million worth of housing projects in Klang Valley, Johor and Sabah.

"We want to expand the division because of the higher margins that can be made from property development. We don't want to be too dependent on construction, which is harder to take on," Tee said.

By Business Times

Malaysia woos luxury hotel brands

Bulgari, Armani and Versace may no longer be just luxury retail brands found in Malaysian malls, as property developers think about bringing in their hotel brands too.

With brands like Grand Hyatt, Mandarin Oriental and Four Seasons already here while St Regis and Raffles have confirmed openings, developers are eyeing fresh and popular hotel brands.

"Developers are now beginning to look at Waldorf Astoria and also various designer-linked brands like Bulgari Hotels & Resorts, Palazzo Versace, Armani Hotels & Resorts," vice president of the Malaysian Association of Hotels (MAH) Ivo Nekvapil told Business Times in an interview recently.



If these brands make their way to our shores, they are likely to be located either in Kuala Lumpur or on Langkawi island.

Nevertheless, Nekvapil feels that sub-brands or brands that come under their more familiar parent company name should be considered as they have potential in Malaysia.

These would include brands like All Seasons and Ibis which are Accor brand hotels and Hilton Garden Inn, a Hilton group brand.

He explained that these brands have international recognition and as such Malaysia too needs these brands to give the country world recognition.

Meanwhile, when asked about the hotel scene in Klang Valley this year, Nekvapil said that there could be an addition of some 2,000 rooms in the four- and five-star hotel/serviced residence category.

Additional rooms this year will come from the opening of Somerset Ampang Kuala Lumpur, Best Western KL Sentral, Park Regis Kuala Lumpur and Pullman Kuala Lumpur Bangsar.

On occupancy and rates in the Klang Valley, Nekvapil said that 2011 could end with an average room rate (ARR) of RM360 for lower end five-star hotels and about RM500 for higher end five-star category hotels. Occupancy this year could finish at about 68 per cent.

Mandarin Oriental still leads the pack, and is now drawing an ARR of around RM700.

Last year, occupancy ended at around 65 per cent and ARR of between RM200 to RM320 per night.

Malaysia had its highest occupancy of over 70 per cent in 2007.

By Business Times

Tycoon Ng buys another property in Australia

PETALING JAYA: Malaysian tycoon Ming Ng, well known for his investment foray into Australian properties, is believed to be on another buying spree.

This time, Ng, via his family-controlled company Dradgin of Singapore, is said to have purchased a landmark commercial property, 502 Hay Street, in the suburb of Subiaco, the central business district (CBD) of Perth, at an undisclosed price.

The Australian Financial Review reported on Tuesday that Ng had acquired the building from beleaguered Perth-based developer Luke Saraceni, who had to offload the property because of mounting debts.

Dradgin was unavailable for comment at press time.

Ng and his family is said to own several other prime properties in Western Australia, including 168 St George's Terrace in the CBD.

It has been a trend of sort for Malaysia companies to purchase land, develop or acquire prime properties down under.

This include Mulpha International Bhd, which owns Sanctuary Cove, a 474-ha residential and lifestyle property development in Queensland Gold Coast.

Other Malaysian tycoons chose to venture into Britain and they include YTL Corp Bhd, which carries out its utilities activities via subsidiary YTL Power International Bhd.

YTL Power wholly-owns Wessex Water, one of the most efficient water and sewerage operators in Britain.

This acquisition represents YTL's first major foray into Europe and marks the beginning of another exciting chapter in the growth and development of the YTL Group.

However, Ng's property purchase is an interesting one the acquisition was done when the Aussie dollar was almost at its all-time high against the ringgit (A$1: RM3.084).

Ideally, acquisitions are best done when the exchange rate is in favour of the buyer.

A local property analyst said the “right” price to buy could lead to an opportunity gain.

He said this might well be the case with Ng's recent acquisition of 502 Hay Street.

“The acquisition may be a situation of striking or buying when an opportunity arises, despite the high price of the asset, because of future earnings potential,” he said.

However, the analyst said the situation remained speculative as it was difficult to assess the reason for Ming' purchase, especially with so little information provided by the company.

He said it was generally uncommon for local tycoons to acquire prime property, especially in the developed world, when the exchange rate was not to their favour.

The analyst said it was also a risky decision as the stronger currency might suddenly fall.

“There must be a catch somewhere to compensate for buying a property against a stronger exchange,” he noted.

By The Star

New landmark for Kuching

An artist's impression of the Batu Lintang project that will change the skyline of Kuching.

KUCHING: Kuching skyline is set to change with the construction of a 36-storey office tower in the prime area of Batu Lintang.

The proposed tower will beat the city's tallest building, the 22-storey Wisma Bapa Malaysia in Petra Jaya which now houses the Chief Minister's office, several ministries and the state secretariat.

The tower is part of Sarawak's biggest mixed-development project jointly undertaken by Naim Holdings Bhd with Lembaga Amanah Kebajikan Masjid Negeri Sarawak (LAKMNS) and Tabung Baitulmal Sarawak (TBS), both state charitable trusts.

Naim has a 70% stake in the joint venture while LAKMNS and TBS each holds a 15% equity interest. A memorandum of understanding (MoU) on the project was signed recently.

Naim managing director Datuk Hasmi Hasnan said other components of the 13.6ha project were a 27-storey apartment, 18-storey condominium, a second office-tower block, hotel tower, a four-storey shopping mall, a 17,000-sq-ft showroom and multi-storey car parks.

'We will incorporate a water theme park, roof garden and plenty of green areas to make the development environment friendly and one that the local population can enjoy,'' he added.

The project site was previously occupied by government quarters. The land has been cleared and earth-filling works was completed recently.

Hasmi said the project would be carried out in phases over 20 years, with the apartments to be built first. The apartment block will have 115 units and the condominium 216 units.

“For each phase, we will do in-depth study on market demand and supply to take cognition of any changes in the economic climate to ensure the project's success,'' he said.

Hasmi said the development was expected to create 2,000 jobs and would provide business opportunities to retailers and wholesalers.

By The Star

GAIM seeks to invest more in Iskandar

Berinda Group chief executive officer and Tanjung Bintang group managing director Frank Goon Swee Kheong (right) briefing Johor Baru mayor Jaafar Awang (centre) and Charlie Taka on the Molek Pine 3 Tower.

The Macau firm has just acquired two condo blocks there for RM200mil

JOHOR BARU: Global Asia Investment (Macau) Ltd (GAIM) is looking to invest in more property projects in Iskandar Malaysia following its initial foray into Johor Baru market.

Chief executive officer Charlie Taka said the prospects in Iskandar Malaysia were good and the company wanted to benefit from long-term growth of Malaysia's first economic growth corridor.

Headquartered in Macau, GAIM is an asset-building consulting company with 10,000 members. It assists its clients, who are mostly Japanese, in investing overseas.

“Iskandar's close proximity to Singapore and its strategic location in the region is the major selling point to attract investors from all over the world,'' Taka told StarBiz at the ground-breaking ceremony of Molek Pine Tower 3 project here recently.

He said like Chinas' Shenzhen, which benefitted from the economic spillover of Hong Kong and Macau, Iskandar would benefit from Singapore's position as an international trade and financial centre.

He expects Iskandar to be fully developed in 10 years although Iskandar Regional Development Authority, under its Comprehensive Development Plan, has set a target for the economic corridor to become an international metropolis in 2025.

Meanwhile, GAIM has purchased the two condominium blocks at Molek Pine Tower 3 from Tanjung Bintang Sdn Bhd for RM200mil. The blocks would be used for its “Malaysia My Second Home” programme for its Japanese clients.

The project comprises a 28-storey tower block with 212 units and a six-storey block with 36 units on a 2.42ha site in Taman Molek.

The units will have built-up areas of 1,300 to 2,300 sq ft. The condo, with selling price from RM500,000, is expected to be completed in two years.

It is being developed by Tanjung Bintang, a unit of the Berinda Group, which in turn is a property development arm of the Kuok Group. Taman Molek was launched in 1990 and now has about 5,000 residential and commercial units.

“With European and the US economies still have a long way to recover and Japan's economy not in a good shape either, we are focusing on China and Asean countries for investments,'' said Taka.

He said GAIM would look at several options when investing in Iskandar including joint ventures with local partners, buying properties en bloc and acquiring stakes in companies.

Taka said apart from Iskandar, the company also had property investments in Kuala Lumpur and Penang.

GAIM, which has a revolving fund of RM500mil, has similar investments in Canada, China, Cambodia, Europe, Hong Kong, Japan, Macau, Thailand, the United States and the Philippines.

By The Star

Abu Dhabi's Tasweek buys Superboom stake

Abu Dhabi-based Tasweek Real Estate Marketing and Development is buying a minority interest in property developer Superboom Projects Sdn Bhd.

Superboom is developing the RM250 million high-end condominium project named The Haven Lakeside Residences in Ipoh, Perak.

The deal was signed last weekend. Superboom chief executive officer Peter Chan declined to specify the stake size nor the amount paid by Tasweek.

"This is a strategic alliance between us and Tasweek to take on more projects in Malaysia. They were very impressed with our development and have decided to invest in Malaysia," said Chan.

He added that the group will provide funds for the project and market the units in the Middle East.

The deal comes just a week after Superboom appointed Best Western International Inc, one of the world's largest hotel chains, to manage, market and lease the units internationally.

Set for completion in 2013, The Haven will see its three 26-storey towers with 165 units each becoming the tallest buildings in Perak.

China's Beijing Construction & Engineering and Bina Puri Holdings Bhd have been given a contract worth RM109 million to construct the buildings.

According to Chan, 85 per cent of Block A and 60 per cent of Block C have been sold to property investors in Malaysia, Singapore, Hong Kong, India, Europe and the Middle East in the last nine months.

Block B was launched last weekend and he expects half of the building to be sold within three to six months.

Buyers are attracted to The Haven as it overlooks a 1.6ha private natural lake with running water, a 14-storey high monolithic limestone rock formation, and the existing 280 million-year-old limestone hills.

The Haven is aimed to be among the first developments to embark on all feasible avenues of harvesting nature's renewable and sustainable resources such as wind, water, bio-gas and pro-active mechanical resources to power and maintain common areas.

By Business Times

Sunway REIT targets RM7bil asset value

PETALING JAYA: Sunway REIT Management Sdn Bhd, the manager for Sunway REIT, is looking to make some sizeable and meaningful asset acquisitions in the medium term and widen the REIT's presence in the country.


Datuk Jeffrey Ng says one of the acquisitions involved a shopping mall from a third party vendor. However, he expects more competition for good assets, especially with the emergence of more well capitalised REITs in the country.

Chief executive officer Datuk Jeffrey Ng said one of the acquisitions involved a shopping mall from a third party vendor.

Ng said one of the growth plans for Sunway REIT was to expand its asset value to RM7bil in the next five to seven years.

However, he expected more competition for good assets, especially with the emergence of more well capitalised REITs in the country.

“Besides shopping for good assets from third parties, Sunway REIT also has the first right of refusal for Sunway City Bhd's (SunCity) assets which guarantees a ready pipeline of assets for injection into the trust,” he told StarBiz.

Among the new commercial projects underway by SunCity include a number of office towers and office cum retail projects in the Klang Valley.

A new commercial project, Sunway Velocity in Cheras will feature office suites, service apartments, and a shopping mall.

“Sunway REIT will remain as a a retail-focused REIT with an asset portfolio that comprises 60% of retail assets and the balance will be a mix of hospitality, office buildings and other commercial assets,” Ng added.

The trust's eight assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.

Sunway REIT was listed on Bursa Malaysia on July 8 last year.

For the second quarter ended Dec 31, 2010, Sunway REIT recorded gross revenue of RM85.3mil compared with RM72.4mil in the previous quarter. Net property income rose to RM62.8mil from RM55.2mil previously.

The trust would be paying 1.75 sen per unit to its unitholders, a 15.9% increase over the payout in the first quarter.

Total income for distribution amounted to RM46.9mil from realised net profit of RM44.7mil, which is equivalent to a 105% payout ratio.

Ng said the strong second quarter performance was mainly due to a 17.1% increase in the rental renewal rates for the next three years in Sunway Pyramid Shopping Mall.

“The vibrancy of and business synergy within Sunway Integrated Resort City (previously Bandar Sunway) is a key driver to the double-digit rental growth recorded for the retail space at Sunway Pyramid,” he said.

Ng said the rental reversion of Sunway REIT's portfolio of 16% was stronger than other REITs in the country and the improved performance starting this quarter would flow through to unitholders over the coming years.

An analyst with a local brokerage said it was important for Sunway REIT to pursue a consistent asset acquisition strategy to enhance its yield accretive potential.

“It must buy assets that offer potential for higher net lettable area and spruce up the properties to improve the rental rates. Sunway REIT is pretty much a yield play and unitholders mostly invest in the REIT for its dividend yield of 7% to 8% a year,” the analyst added.

By The Star

Glomac rides on niche projects

Some of the completed units at Suria Residen, a low-density, gated housing developed by Glomac in Cheras.

PETALING JAYA: Glomac Bhd, a medium-sized property outfit, is on an exciting growth path as it undertakes more niche developments with fast turnaround time in Greater Kuala Lumpur.

The company has a broad range of affordable to higher-end projects. Its 13 ongoing projects include townships in Sungai Buloh and Rawang in Selangor and in Kota Tinggi, Johor, as well as some niche residential and commercial projects in Greater Kuala Lumpur.

For the six months ended Oct 31, 2010, its revenue surged 98.5% to RM267.2mil while pre-tax profit rose 87.5% to RM61.5mil. Net profit attributable to shareholders grew 78.4% to RM31.4mil.

In a recent note, ECM Libra Research said Glomac was on the brink of higher earnings and land bank.

An analyst with a local brokerage concurred, saying the company could look forward to strong double-digit growth of at least 30% over the next three years.

As at end-October 2010, Glomac has unbilled sales of RM572mil, which will be one of its key earnings growth drivers, going forward.

For the financial year ending April 30, 2011, Glomac has set a sales target of about RM500mil.

Going forward, the company can look forward to growing contribution from some of its key ongoing projects like Glomac Tower, Glomac Damansara, Glomac Cyberjaya and Bandar Saujana Utama.

Glomac Damansara Residences, a 2-tower serviced apartment project with an estimated GDV of RM240mil, is set for soft launch in the middle of next month.

Other projects earmarked for launch over the next 12 months will have a combined GDV in excess of RM1bil.

These include a boutique mall in Glomac Damansara with an estimated GDV of RM145mil, Glomac Al Batha Mutiara serviced apartments (RM250mil) and Glomac Utama, a mixed development within the vicinity of Bandar Utama (RM400mil).

One of Glomac's core strategies is to acquire land bank that offers potential for prime and sizeable greenfield developments in Greater KL.

Its recent acquisitions include a 200-acre parcel in Puchong and seven acres in Cyberjaya.

The Puchong land, purchased at RM8.84 per sq ft, has a potential GDV of RM800mil. Glomac will start developing it in about 12 months and the project will comprise terrace and semi-detached houses as well as villa apartments.

The seven acres of commercial land in Cyberjaya were purchased at RM90 per sq ft.

The mixed commercial project planned for this year will have an estimated GDV of RM250mil. It will be an extension of the ongoing Glomac Cyberjaya project launched about two years ago.

Glomac was founded in 1988 by two entrepreneurs, Tan Sri FD Mansor and Datuk Richard Fong.

The company was listed on Bursa Malaysia main board on June 13, 2000. In 2003, it received ISO 9001:2000 certification.

Glomac has completed about 15,000 residential and commercial units with sales totalling RM4bil. It has also completed 5.4 million sq ft of commercial space.

The completed high-end residential developments include gated-and-guarded communities of Aman Suria Damansara in Petaling Jaya, Lakeside Residences in Puchong and Suria Residen, Cheras.


Suria Stonor being developed by Glomac in Kuala Lumpur.

Suria Stonor, a luxury condominium in the vicinity of Kuala Lumpur City Centre, is Glomac's jewel in the crown.

In late 2007, Glomac acquired a 1.3-acre site opposite Petronas Twin Towers and developed it into Glomac Tower, the company's first commercial high-rise project in Kuala Lumpur.


Artist’s impressions of Glomac Tower.

Glomac Tower, a grade A commercial building, has been sold en-bloc at a record price of RM1,120 per sq ft. The project will be completed in the middle of this year.

In 2006, Glomac made two overseas investments. They comprised an office building with car parking lots in Melbourne and a “built-to-suit” warehouse in Bangkok. Both are contributing steady rental yields to the group.

Glomac is now helmed by Datuk FD Iskandar, who is group managing director-cum-chief excutive officer.

The group comprises about 40 subsidiaries involved in every facet of real estate business including property development, property investment, construction, property management and car park management.

By The Star