Budget 2012 boost to property and construction sectors

Abdul Rahim Rahman expects Budget 2012 to boost the property and construction sectors.

The RM232.8bil budget tabled by Prime Minister Datuk Seri Najib Tun Razak on Oct 7 was formulated with the theme National Transformation Policy: Welfare for the rakyat; well-being of the nation”.

It aims to implement development plans such as projects and programmes under the Second Rolling Plan (RP2), National Key Economic Areas (NKEA), National Key Result Areas (NKRA) and Strategic Reform Initiatives (SRIs) focusing on the well-being of the general population and aiming at stimulating the domestic economy.

The Government is targeting GDP growth of between 5.5% and 6.0% for 2012. However, our external environment has become increasingly challenging with the economic slowdown in the United States, Europe and Japan, inflationary pressures due to rising commodity prices, and the European debt crisis.

The International Monetary Fund revised its projected world economic growth to 4% and world trade to 5.8%. The Malaysian Institute of Economic Research (Mier) has revised the country's gross domestic product (GDP) growth to 4.6% this year compared with an earlier forecast of 5.2% due to slowing exports and weaker domestic demand stemming from a volatile global outlook.

Next year's GDP has also been revised to 5% from 5.5%. In view of these challenges, it is critical that the Government implement measures to stimulate the domestic economy, both public and private investments.

The momentum for the construction industry is expected to accelerate with various projects to be implemented under Budget 2012. While contribution of the construction industry to GDP has always been small, it is projected to grow by 7% in 2012, the highest growth compared with all other sectors.

Its multiplier effect has always been large, involving 146 sub-sectors. Therefore, we expect the special stimulus package worth RM6bil for the construction industry to have positive effects on the economy. The construction projects announced by the Government will benefit not only big players but also the entire value chain including small players.

The RM40bil MRT project is expected to stimulate property development along the MRT line with some developers trying to take this advantage by building affordable homes in the suburbs near the MRT line. It was announced recently that Mah Sing has entered into a share sale agreement to acquire the entire stake in Semai Meranti Sdn Bhd, which is the beneficial owner of a piece of freehold development land (with development order) in Rawang, measuring 225.7 acres, at a total purchase consideration of RM92mil.

The land will be developed into a self-contained township named M Residence@Rawang, offering entry level homes priced from RM390,000. SP Setia has also recently announced its second land deal in the Semenyih-Kajang corridor buyinga 269.3ha site for RM381.26mil in Ulu Langat to be developed into a township with an estimated gross development value (GDV) of RM4bil.

The land is adjacent to its current development, the Beranang Land with an estimated RM3.5bil GDV. The site is about 13km south of Kajang town and homebuyers are expected to benefit from the proposed MRT station in Kajang. SP Setia plans to build affordable homes to cater to first time home buyers.

The Federal Government's proposal to liberalise 17 services sub-sectors in phases next year has also received positive reactions from investors. This liberalisation will benefit private hospital services, medical and dental specialist services, engineering, accounting and taxation, and legal services. Looking at the real estate side, we expect more new township developers will include private hospitals and other medical services as part of their development components in their effort to create self-contained townships.

The implementation of main projects under RP2 such as Gemas-Johor Bahru double track rail project, Lebuhraya Pantai Timur Jabor-Kuala Terengganu, Lebuhraya Pantai Barat Banting-Taiping, Lebuhraya Segamat-Tangkak and Lebuhraya Central Spine as well as the construction of Kota Marudu-Ranau road will create greater accessibility to less developed areas in Malaysia, which will then spur development in these areas.

The RM978mil allocated to implement projects such as Johor Bahru-Nusa Jaya coastal highway in Iskandar, Johor, heritage tourism development in Taiping in the Northern Corridor, agropolitan scheme in Besut in the East Coast Economic Region, palm oil industrial cluster project in Lahad Datu in Sabah Development Corridor and Samalaju water supply in the Sarawak Corridor of Renewable Energy is expected to accelerate development in the five regional corridors and this will help the Government to achieve its development objective of creating more balanced regional development in the country.

Incentives offered to KLIFD-status companies not only emphasise the Government's effort to turn Kuala Lumpur into a global financial centre but also attract more investors to participate in the development of the project.

The project is aimed at enabling Malaysia to capitalise on its international Islamic financial products and and this is further strengthened with measures proposed in the budget to stimulate the sukuk market and provide the seed money for shariah-compliant exchange traded funds (ETFs).

The incentives are a 100% income tax exemption for a period of 10 years and stamp duty exemption on loan and service agreements for KLIFD-status companies, an industrial building allowance and accelerated capital allowance for KLIFD Marquee Status Companies; and income tax exemption of 70% for a period of five years for property developers in KLIFD. It is hoped that with these incentives, KLIFD will be able to compete with other financial centres in Asia.

The real property gains tax (RPGT) is also proposed to be revised as one of the measures to cool the property market. In Budget 2012, it was proposed that the RPGT on properties held and disposed of within two years be raised from 5% to 10%, 5% tax to be maintained for properties disposed after three to five years and no tax for properties disposed after the fifth year.

From a macro-economy perspective, a higher RPGT will reduce speculative buying, which will then stabilise property prices and this will avoid “property bubbles” from bursting. This step is necessary as property prices, especially in prime areas such as in Klang Valley, Penang and Johor have increased over the last two years between 30% and 50%, depending on location and type of property. This measure is considered “mild” compared with more stringent measures imposed by other countries such as Singapore, which imposes a lower loan-to-value ratio (60%) for borrowers with more than one outstanding loan and higher seller's stamp duty.

As one of the NKEAs, the tourism industry will also receive a shot in the arm. For example, RM420mil will be allocated to launch the Langkawi Five Year Tourism Development Master Plan. Among the initiatives to be undertaken are the restructuring of the Langkawi Development Authority, setting up a park rangers unit, upgrading museums, beaches and small businesses as well as providing a more efficient transportation system.

In my view, to create a more supportive environment for the tourism industry, it is of high importance for the Government to also re-look at current restrictions on buying and investing in properties in Langkawi. The island has great potential; however, more needs to be done to attract hotel operators as well as investment in tourist-related activities as the current regulations are considered as “unfriendly” to foreign buyers or investors.

In an effort to attract high-spending tourists and to encourage investment in hotels at par with international standard, the Government also proposed that 4- star and 5-star hotel operators in Peninsular Malaysia be given pioneer status with income tax exemption of 70% or investment tax allowance of 60% for 5 years.

This incentive is expected to encourage more hotel development, which many hesitate to venture into because the payback period is normally as long as 10 to 15 years.

Overall, I would conclude that Budget 2012 is very comprehensive and the Government has focused on every aspect that will stimulate the country's economy considering the many external challenges that we are facing now.

Senator Datuk Abdul Rahim Rahman is the executive chairman of Rahim & Co group of companies.

By The Star (by Datuk Abdul Rahim Rahman)

Klang Valley’s impending transformation

It is undeniable that Klang Valley's built environment is on the threshold of some major changes with ongoing plans to improve the infrastructure network, such as the My Rapid Transit (MRT) project and the planned redevelopment of some of the Government's land.

The days of the present property landscape may be numbered as old and dilapidated buildings may be demolished to make way for other new projects and buildings. In this regard, it is imperative to ensure that historical buildings should be spared and property owners of buildings that need to make way for this development process, will be duly consulted and compensated.

While the pursuit of new development projects is well and good in the name of growth and development, we must ensure that at the end of the day the projects will offer more greater good to the larger populace.

The gauge on how successful the project will turn out should not be just based on its quantum of material or monetary benefit, but what is equally important is that it must offer a greater net benefit after weighing both the economic and monetary, as well as non-monetary components.

Ultimately the success of a development project should be measured by the accrued benefits to the people and how it will help towards adding value to their overall well-being.

As such, when assessing the viability of projects, instead of just considering the monetary costs and benefits, it is equally important to give due consideration to the non-monetary and social benefits and costs.

Project planners should ensure that the total accrued benefits will at least equal or outweigh the total cost. In this regard, it is important to bring to bear all the components of the costs and benefits in their assessment.

One good example is the need for a workable national public housing programme. If the project's viability is just measured based on the total monetary benefits against the costs, it won't be surprising to see that the cost-to-benefit study will turn up negative to show that the cost outweighs the benefit.

Given that these housing units have to be priced affordably at a certain price threshold, it may fail on the benefits side of the equation if it is just based on the monetary benefits. But adding up all the social benefits of a well run public housing programme will show that it is a highly desirable and beneficial project to the public.

This is because as far as the benefits are concerned, it is not just about the total income or profit to the developer, but it is also about how a wholesome, safe and well built environment will benefit and help the average Malaysians and their families to thrive and make good in life.

If these public housing projects are well designed with reasonably sized built-up to fit at least three rooms, have space for community and sports activities, and are safe and well managed, the benefits will come in manifold. These include thriving, happy and closer knit families; more responsible adults and parents; less divorce cases; better behaved and high performing children; and less cases of truancy, dropouts and other social menaces.

I always believe that the foundation for a thriving and healthy society starts with the family unit. As long as we continue to keep our family unit functional and thriving, many of the ills facing our society today will be nipped in the bud.

Given the wide ranging benefits of having a well planned social housing programme, it should be accorded top priority and more resources should be allocated to ensure its success. Likewise, there are also many non-monetary benefits from a well integrated and efficient public transport system that warrant it being placed on the priority list as well. These include less hassle and stressful city living; higher productivity if the people can move around with ease which means spending less time on the road; and hopefully they can also save up money for rainy days (by not having to own and maintain a car).

To ensure its success, the whole array of public transport network should be integrated and be complementary to each other, instead of competing with each other for business. It can be likened to the chicken or egg situation. Once the infrastructure is in place and running efficiently, I believe many Klang Valley folks will voluntarily resort to using public transport.

Come to think of it, the construction of the new MRT stations and tunnelling works will no doubt cause massive traffic jams and congestion when the time comes.

This is not something Klang Valley folks are looking forward to, and it is imperative that advance arrangements are made to redirect traffic flow and ensure the construction work will not be disruptive to road users. As it is, many roads in the capital city are already heavily choked by the heavy vehicle traffic especially during rush hours. The current wet spell only serves to worsen the situation.

Deputy news editor Angie Ng looks forward to a holistic, wholesome and sustainable living environment that will be functional and relevant for many years to come.

By The Star (by Angie Ng)

Jaya One to expand

An artist’s impression of the new phase of Jaya One in Section 13, PJ.

JAYA One, one of several developments in Petaling Jaya's Section 13, will be increasing its footprint with a new phase of commercial development to complement the current five commercial office buildings located at the junction of Jalan 13/6 and Jalan Universiti.

Construction of the new phase has already started and will comprise 400 retail, residential and office units on an additional four acres of land, says Tetap Tiara Sdn Bhd executive director (Jaya One) Charles Wong.


Wong: ‘When we launched the first phase of Jaya One in 2004, it took a bit of convincing the market then that office properties would sell.’

“When we launched the first phase of Jaya One in 2004, it took a bit of convincing the market that office properties would sell. We did not do residential because we knew that it would not work. Now that we have completed the first phase, we are ready to launch residential units in the form of serviced apartments,” he says.

The new phase will comprise 30 units of retail and 130 office units. There will also be 240 units of serviced apartments spread over two blocks. The new phase will consist of a gross built-up area of about 993,000 sq ft, bringing the gross area up to about 1.7 million sq ft.

Prior to the development of Jaya One, the 11-acre site was occupied by a factory.

The retail portion is priced between RM850 and RM1,300 per sq ft. Sizes range from 1,200 to 3,500sq ft. The office portion is priced at RM580 per sq ft. The first residential tower of 13 storeys is priced at RM600 to RM650 per sq ft while the four-storey, second residential block is priced at RM600 per sq ft.

“Section 13 will be a dynamic market as the local authorities have put many new requirements in place. There are several serviced apartment projects coming up. Among the new requirements is the need for developments to be inter-connected with one another. The most practical way will be the provision of bridges to link the projects together. We will be building connecting bridges to neighbouring developments to allow easy access and movement among the buildings within Section 13,” says Wong.

He says there will be greater setbacks between neighbouring lots and internal roads are being planned to avoid adding pressure to the current three roads that service the area. Currently, the three roads are Jalan Universiti, Jalan Kemajuan and Jalan Semangat. Internally, Section 13 is served by Jalan 13/6.

Wong says the authorities are trying to get land owners to amalgamate pieces of land to avoid ad hoc development.

The gross development value for the new phase is RM360mil for the portion of the development the company is selling. The company will retain a certain portion for recurring income as it did with Palm Square, which comprises mainly food and beverage outlets in the first phase of the project.

Wong says thus far, most of the buyers are investors with about 20% buying for their own use. The first phase is currently fully occupied with offices being rented out between RM2.50 and RM2.80 per sq ft, retail outlets at RM6.50 and RM7 per sq ft and Palm Square RM8.50 and RM10 per sq ft.

Wong says a large number of those who bought into the new phase had previously bought into the first phase. Besides Tetap Tiara's serviced apartment blocks, there are currently two other serviced apartment projects being planned for Section 13.

By The Star

Smart City-Smart Village to contribute RM95bil to economy by 2020

KUALA LUMPUR: Smart City-Smart Village, the second high-impact project to be implemented through Global Science and Innovation Academy Council (GSIAC), is expected to contribute RM95bil to the national economy by 2020.

It was also expected to increase opportunities in the service industry and create employment across the value chain for 420,000 people, GSIAC said in a statement.

“The Smart City-Smart Village project aims at balancing development in the urban and rural areas, focusing on the use of green technology and information and communications technology (ICT).

“The goal of the initiative is to improve everything from energy use to healthcare, education, traffic and shopping by doing it ‘smart’ with the help of ICT and green technology,” it added.

GSIAC yesterday hosted a Smart Communities Workshop together with the Malaysia Industry-Government Group for High Technology (MIGHT) and New York Academy Of Sciences to gather inputs for the implementation of the Smart City-Smart Village projects in Malaysia with other key stakeholders.

MIGHT president and chief executive officer Mohd Yusoff Sulaiman said “green field” and “brown field” projects had been identified for the Smart City programme.

“In a green field project we find there’ll be a very good opportunity to develop new cities like the Iskandar region and cities near the Greater Kuala Lumpur area.

“In a brown field project such as the present city of Kuala Lumpur, we see a need to also see beyond the elements of infrastructure such as social development, culture and the value we can add to the existing city development to raise the quality of life,” he added.

By Bernama

Lau: Fee for land status transfer up to developer and residents’ lawyers

The Selangor state government has no power to fix a flat rate or offer discounts for residents of the Sri Aman low-cost flats in Section 22, Petaling Jaya, who are having difficulty paying for their transfer of land status to strata title.

Kampung Tunku assemblyman Lau Weng San, in rebuking a statement made by Selangor MCA Public Services and Complaints Department deputy chairman Kelvin Chong Seng Foo, said the state government was not involved in matters pertaining to payments to obtain the strata titles by the residents.

Two weeks ago, Chong, who is Kampung Tunku co-ordinator, urged the state government to fix a flat rate and “to be fair to all low-cost unit owners” as they all have different rates to pay for the transfer of strata title.

Lau rebutted by saying that this was an issue between the residents, the Sri Aman low-cost flat developer and their respective lawyers who are handling the transfer of land status.

“It is incorrect for Chong to say that the state government is charging a high fee for the residents for the transfer of land status to strata titles.

“However, I have made a request to the state government to extend the Oct 15, 2011 deadline for the residents to settle the fees for the strata title allocation.

“In this matter, we do have the power to make the time extension under Section 40A (2) of the Strata Titles Act 1985,” explained Lau after meeting with the residents of Sri Aman low-cost flats.

He also urged the residents to settle their outstanding debts to the Sri Aman Joint Management Body (JMB) to expedite the process of obtaining their respective strata titles.

“Some of them have yet to pay up their maintenance fees which includes the sinking fund and water bill.

“This will only slow down the process of getting the strata titles. It is not possible for the state government to help the residents pay for their outstanding arrears because it will be unfair to other low cost unit owners who have settled their debts,” added Lau.

In October last year, all 342 households of Sri Aman flats received notices from the developer requesting them to pay the processing fees to exercise the transfer of land status to strata titles.

The residents were given a year to settle the processing fees which range from RM500 to RM2,000.

By The Star

Vietnam property seen rising again in two years

Cool market: Four years after a real estate boom that saw investors camp in the streets to pay cash for unbuilt apartments, Vietnam’s once hot market is in a chill. — AFP

FOREIGN property developers should take a serious look at Vietnam despite the country's macro-economic challenges amid a struggle to subdue double-digit inflation without dampening growth, according to commercial real estate firm Colliers International research director Naim Khan-Turk.

While noting that the property market in Vietnam is currently in a downturn, Naim is expecting the situation to improve in two years.

Naim's expectations are not without foundation as a few years ago, Vietnam was seen as a fast-growing “Asian tiger” with an emerging market of about 86 million people and a low-cost labour force.

Today, Vietnam is grappling with rising consumer prices, a weakening currency and a tight credit policy while trying to revive optimism concerning its economic growth.

Naim, who has been based in Ho Chi Minh City for more than seven years, recalls that from 2005 to 2009, it was a boom time for the development and growth of the real estate market in Vietnam.

“A few years ago, at the peak of the cycle in the real estate market, there was plenty of money swimming around for developers to use. At that time, we had every fund in the world coming into Vietnam wanting to do this and that. Now, the situation has gone the other way, and developers cannot get their hands on money to finance their projects,” says Naim, who spoke to StarBizWeek on the sidelines of the two-day Mixed-Use Development 2011 conference, organised by Trueventus Sdn Bhd in Kuala Lumpur, which gathered experts in property development in the Asia-Pacific region.

In October, inflation in Vietnam accelerated to 21.59% from a year earlier.

The high consumer price index (CPI) for October meant that inflation had slowed for a second month, after climbing to a high of 23% in August.

This month, in order to subdue Asia's highest rate of inflation, Vietnam's central bank also raised its refinancing rate to 15% from 14% previously, while maintaining its base interest rate at 9%.

“What this means is that the credit crunch in Vietnam has resulted in the real estate market becoming very compressed, and a lot of property developments are slowing down or not starting. Certain projects are still moving along but things have been put on hold to a certain degree,” says Naim.

Naim also reiterates that property development in Vietnam is a long-term process for investors.

“In the past, many foreign investors did not realise how things in Vietnam work. Things do not happen quickly - planning, purchase of land, construction permits and licensing - it could be over two years in some cases before you get to the ground.”

He cites examples of companies such as CapitaLand Ltd. “They have been in Vietnam for five years now, and had to spend their time getting the projects through.”

Naim says foreign property developers in Vietnam need to allocate time to build their networks, establish contacts and secure land.

“What you can obtain is a 50-year lease term on the land. In some cases, it can be up to 70 years. That allows you to develop.”

According to Naim, the process of obtaining an investment license in Vietnam has been made easier nowadays.

“It used to take up to a year. Now, as long as your paperwork is in order, getting an investment license should take between three and six months.”

He points out that Vietnam is an emerging market offering many opportunities.

“It is a question of whether you are willing to overcome the hurdles or not. It is not for the faint-hearted or those with the mentality that they can just walk in there and do something; then they are going to come unstuck.”

Naim says foreign companies that have been successful in Vietnam are the ones that took the long-term view, and cites Malaysian examples such as SP Setia Bhd, Berjaya Corp Bhd, Gamuda Bhd, WCT Bhd and Ireka Corp Bhd.

“Although the real estate market does not look very rosy now, this is the right time to come in because of the time scale it takes to get projects going in Vietnam. Land can be acquired at much cheaper prices compared with a few years ago.”

According to Naim, margins can be 23% to 25% for a typical property development in Vietnam.

Also, he says there is strong demand for office space. “At the moment, occupancy is around 85% across all grades of office space. Following the global downturn in 2008, Grade A office rentals are now around US$35 (RM109.40) per sq metre.”

He recalls that office rentals in Ho Chi Minh City peaked at US$70 (RM218.80) per sq metre before the global financial crisis in 2008.

“One of the things that made Vietnam so attractive was that a few years back, office rents were one of the highest in the world, in Ho Chi Minh City and also Hanoi.”

Naim notes that new commercial buildings are steadily growing taller and with more modern designs.

“The 68-storey Bitexco Financial Tower in Ho Chi Minh City is Vietnam's tallest building (opened late last year). There will be a taller 72-storey structure in Hanoi soon.”

By The Star

Home is where the Arte is

Designed to promote uniqueness: An artist’s impression of Arte@Kuchai Lama project.

WOULDN’T you like to own a home that is futuristic in its architecture as well as unique in art form? Property developer Nusmetro Group is launching its latest development — Arte@Kuchai Lama, this weekend to promote its new Art Series brand of homes.

Nusmetro, with its philosophy of Branding Homes, will be using Arte as its platform to launch its Art Series brand.

“As the name suggests, Arte will have strong elements of artistic living and art architecture. The Art Series brand is the new addition to the existing category of Signature Homes and Contemporary Homes,” said Nusmetro managing director Thomas Chan.

What makes Arte unique is its strong product differentiation, be it from artistic architecture to unique interior design of its lobby to the egg shape pavilion lounge.

“Sculptures from renowned names like Sculptura, Frank Woo and designer lighting names like Artemide and Tom Dixon are fitted into the lobby and lounges of Arte to give the project a distinctive identity.”

This development is the first of its kind in terms of architecture. Functionality of space was also given much thought as every unit, in two blocks of 23 and 25 storeys, comes with a private lift lobby and most units adopt a wide angle layout concept with a 7.62m-wide balcony which promotes spaciousness of space.

“Arte, with its low density of only 250 units and 15 different types of layout, is designed to promote uniqueness and strong capital appreciation as there are limited units within each type of layout,” added Chan.

Why art? “I travel quite a bit so wherever I visit, I always bring back some ideas to include in our developments,” he said.

The price for each unit starts at RM380 per square feet.

“The pricing for our Arte series is competitive and the 50% release to its registered buyers have been fully sold prior to this weekend launch,” said Chan.

Arte@Kuchai Lama is due to be completed in the third quarter of 2014.

“We are instrumental in creating unique and specialised units so as to not make them identical like what you would find in other condominiums. It is an expensive move to incorporate into the development but we think it will increase capital appreciation,” said Chan.

With a track record of completed properties exceeding 5,000 units valued over RM1.5bil, Nusmetro’s philosophy of Branding Homes is poised to carve its name in the local property scene.

The launching this weekend will be at the Nusmetro sales office in Unit 105 & 106, Block E, Phileo Damansara 1, Jalan 16/11, off Jalan Damansara, Petaling Jaya, from 9am to 6pm (Saturday and Sunday).

By The Star

New commercial project in Cyberjaya

Property developer, Glomac Berhad is launching a freehold commercial project in Cyberjaya at the end of this month.

The site for Glomac Cyberjaya 2 was acquired shortly after the highly successful launch in its maiden project in Cyberjaya.

“To further capitalise the momentum and success of Glomac Cyberjaya Phase 1 & 2 and to continue to develop more shop offices, we acquired the adjacent second plot of land due to its successful take-up rate,” said Glomac group managing director/CEO Datuk FD Iskandar.

Glomac Cyberjaya Phase 1 & 2, which sits on part of the 3.64ha tract, features 63 units of three-storey shop offices is fully sold. It is due to be completed by end of this year.

Glomac Cyberjaya 2 will consist of 55 units of three-storey, three- and-a-half and four-and-half-storey of shop offices and a 24-storey office tower, each with a sophisticated modern facade that more than match its illustrious surrounding neighbours.

The built area is from 3,300sq ft onwards and the range of price starts from RM1.29mil onwards.

This development will present a wider range of investment opportunities that are ideally suited for small to medium-sized businesses seeking a stylish business address in the heart of Cyberjaya.

The entire development of Glomac Cyberjaya is strategically located along Persiaran Apec.

This ideal development is within the address of technological excellence, Cyberjaya, with HSBC, Ericsson, IBM and DHL as its surrounding neighbours.

For more information, call 03-7801 9000.

By The Star

Garden-themed M City sold out

Mah Sing Group has garnered RM412mil sales from its garden-themed mixed development, M City Jalan Ampang which is located less than 5km from KLCC.

First previewed in June this year, all 401 units of designer SoHo (small office, home office) suites worth RM295mil have been taken up.

Response to the 24 retail units worth RM117mil launched a few weeks ago has also been overwhelming, with the 15 units of three-storey boutique retail, four units of single level retail, four kiosks and supermarket fully sold.

The 39,000sq ft supermarket was acquired by gourmet supermarket chain Village Grocer.

“The location and concept of M City dovetail with the business strategy for our gourmet supermarkets,” said Village Grocer managing director Ong Kim Too.

“We operate in prime developments as anchor retailer/tenant, at sites with a concentration of our target customers,” he added.

A mixed development comprising designer SoHo suites, residential suites, sky villas and boutique retail, M City Jalan Ampang which sits on a 2.02ha freehold site has an estimated gross development value of RM1.4bil.

Located along the famed Embassy Row, M City is a stone’s throw away from Ampang Point which has a proposed MRT station, and is less than 2km away from Gleneagles Hospital, Great Eastern Mall and M Suites. With such an attractive location, there is a catchment of more than 500,000 from the surrounding matured developments.

Mah Sing group managing director Tan Sri Leong Hoy Kum said, “M City is Kuala Lumpur city’s one and only garden city community, and the first ever to boast multi-level thematic hanging gardens in Malaysia.

“We have various thematic hanging gardens spanning over 1.61ha for every sixth floor, with concepts such as sky garden, tropical sanctuary, spring park, bamboo groove and lagoon park which has become the talk of the town and a key selling point. A four-tier clubhouse houses a gymnasium and an infinity pool with an excellent city and lake view has been planned for the enjoyment of residents. The project is also designed to achieve the Green Building Index (GBI) Gold standard by increasing the efficiency of resource usage.”

More than 2,500 parking bays have been allocated for residents, tenants and visitors of M City, with separated residential and commercial parking lots and parking entry points.

He added, “We have carefully planned the project and most of the units are smaller sizes to meet current market need. With such good response to our SoHo and retail units, we intend to launch our residential suites in our sales gallery in Icon Jalan Tun Razak soon.”

The new launch are residential suites priced from RM550,000.

Buyers shall be spoilt for choice with the numerous configurations available, from studio units (506sqft) priced from RM550,000, 1 bedroom (674sqft), 2 bedroom (886sqft) and 3 bedroom units (1,653sqft). All these options are also available as duplex units to ensure that discerning buyers can get exactly what they need.

These units are semi-furnished and amongst the furnishings and electrical appliances to be provided by Mah Sing include bedroom wardrobe and vanity cabinet with mirror, kitchen cabinets, air conditioners, refrigerator, washer cum dryer, microwave oven, built in hood and hob as well as water heaters. Mah Sing shall also absorb the legal fees for sales and purchase agreement.

By The Star

Axis REIT to buy property from DHL for RM48.5m

Axis Real Estate Investment Trust has proposed to buy a three-storey office and warehouse in Penang from DHL Properties (Malaysia) Sdn Bhd for RM48.5 million to expand its business.

At the same time, Axis will lease the property back to DHL for five years. It will have an option to renew the lease for another five years.

"The acquisition is accretive with an unleveraged triple net yield of 8 per cent which will have a long term benefit to the Fund.

"Furthermore the lease has annual built in rental growth which will enhance earnings," Stewart LaBrooy, chief executive officer of Axis REIT Managers Bhd, said in a statement.

The property, located in Bayan Lepas, has a gross built up of some 231,940 sq ft and comes with a 60 year leasehold title which will expire in 2062.

Axis-REIT will use existing bank loans to fund the deal. This will raise its gearing level to 40 per cent.

The latest purchase will boost the fund's asset under management to over RM1.39 billion, upon completion by December 31, 2011.

By Business Times

Kosmopolito to launch five hotels

Expansion plan: Kosmopolito inte nds to develop service apartments on a site near the Dorsett Regency Kuala Lumpur.

KUALA LUMPUR: Kosmopolito Hotels International Ltd (KHI), which has 17 hotels primarily in Asia, has at least five ongoing projects in Malaysia that it plans to launch within the next 12 to 24 months.

KHI vice-chairman Datin Jasmine Abdullah Heng said the company was also looking for land in Malaysia to set up either hotels or serviced apartments.

“We would have more (than five projects) in the pipeline if we can secure the land,” she told StarBiz during a donation ceremony and visit to the National Heart Institute (IJN) on Tuesday.

Its ongoing Malaysian projects include the renovation of Phoenix Plaza in Cheras and the renovation of the Sri Jati serviced apartments in Kuala Lumpur into a hotel cum service apartments.

Jasmine also said KHI intended to develop service apartments on a site near the Dorsett Regency Kuala Lumpur.

“We also plan to launch service apartments within the Grand Dorsett Subang area by year-end and (also) have an on-going project in Sri Hartamas (in Kuala Lumpur),” she said.

“We are also looking at potential projects in Kota Kinabalu (Sabah), Penang, Langkawi, Kuantan (Pahang) and Malacca. We're aggressive on our expansion plans,” she added.

KHI, a subsidiary of Far East Consortium International Ltd (FEC), was set up in January 2007 and listed on the Hong Kong Stock Exchange in October 2010.

The company owns and manages four key hotel brands in different market segments Boutique Series by Kosmopolito, Grand Dorsett, Dorsett Regency Hotels & Resorts, and Silka Hotels, which can be found in Hong Kong, Shanghai, Chengdu, Wuhan, Singapore, Malaysia and London.

On the local front, KHI's properties are the Grand Dorsett Subang, Dorsett Regency Kuala Lumpur, Grand Dorsett Labuan, Silka Hotel Johor Bahru, Maytower Hotel & Serviced Residences Kuala Lumpur and Damas Suites & Residences Kuala Lumpur.

Jasmine declined to comment on an old report that FEC was planning on a real estate investment trust (REIT) listing that would include the Malaysian properties.

Meanwhile, KHI on Tuesday donated RM6,000 to IJN as part of the former's corporate social responsibility initiative. Earlier this year, the National Heart Institute received a donation amounting RM30,000 from KHI.


Chiu will be elected president of the company effective Nov 1

KHI executive director Winnie Chiu, who will be elected president of the company effective Nov 1, said: “We are committed to this good cause. We're supportive of this and will continue to support (IJN) going forward.”

By The Star

KL Metropolis expected to woo RM3.5b foreign investments

Foreign companies may invest that amount to build properties, either on their own or in partnership with Naza TTDI

KUALA LUMPUR: The Naza Group's KL Metropolis project is expected to lure foreign investments of some RM3.5 billion over its 15-year development period.

Foreign companies may invest that amount to build properties, either on their own or in partnership with Naza TTDI Sdn Bhd, the property arm of Naza Group.

"While we can build the structures on our own, we want to give opportunities to others for transfer of technology and expertise," Naza TTDI group managing director SM Faliq SM Nasimuddin said af-ter the project's launch on Tuesday.

The RM15 billion project is located next to the existing Matrade building off Jalan Duta and is touted as a new business district.

It will feature 22 office and residential towers, which include a 100-storey building and three hotels, as well as the new one million sq ft Matrade centre and two retail centres with more than two million sq ft of space on 30 hectares.

Launched by Datuk Seri Mustapa Mohamed, the Minister of International Trade and Industry (Miti), the project will be developed in three phases.

Phase 1 will comprise the exhibition centre, two residential towers, two hotels, two office towers and a retail centre, worth a combined RM6 billion.

Faliq said tenders to cons-truct the buildings will be called next month. It has appointed a local contractor to do the piling work.

Naza TTDI will borrow from banks and use internal funds for the initial stages of development, after which it may raise more money from a bond sale. The company is expected to invest RM500 million on infrastructure alone.

"We aim to complete Phase 1 by 2014/2015," he said.

Naza TTDI is already in talks with several foreign investors to build the retail and com-mercial properties in a joint venture.

It is also in discussions with a few five-star international hotels and mall operators to manage some of its properties.

"We are seeking five-star hotel operators and good retail partners for the project. We want to make this a world-class business and tourist destination," Faliq said.

Naza TTDI will announce several deals before the end of this year or early next year.

Faliq said Phase 2, which will start in 2015, will have five residential towers, three office blocks, a boutique hotel, a healthcare centre and the 100-storey building, worth RM4 billion.

Phase 3, worth RM5 billion, will start in 2019, consisting of three residential towers, three office buildings and a retail centre, he added.

“We have attracted a lot of local and foreign interest for this project, repositioning Malaysia on the world map. We expect several en bloc deals coming in,” Faliq said.

KL Metropolis is designed to Malaysia’s Green Building Index requirement and is also the first registered LEED for Neighbourhood project in Malaysia.

The LEED certification is an internationally-recognised green rating system that incorporates the principles of smart growth, urbanism and green building.

By Business Times

Naza TTDI's next step is to get listed

KUALA LUMPUR: After launching its biggest property project so far, Naza Group is aiming to list its property unit on the local stock market in about three years.

Naza TTDI Sdn Bhd's initial public offering (IPO) is also expected to be among the largest property IPOs on Bursa Malaysia, joint group executive chairman SM Nasarudin SM Nasimuddin told Business Times.

"Now that we have launched KL Metropolis, the next step is to take Naza TTDI to new heights and to do that, we will need the IPO," he said on Tuesday after the launch of the project by Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.

Business Times first reported that Naza TTDI wanted to list in 2008 but this was postponed due to weak market conditions and also because it wanted to build its asset base.

It had hired CIMB Investment Bank Bhd to arrange the IPO and planned to raise more than RM1 billion.

"With the KL Metropolis development, Naza TTDI is a step closer to becoming a sizeable property group," Nasarudin said.

Naza Group, founded by the late Tan Sri Nasimuddin Amin in 1974, is well-known as an automotive player. It ventured into property development by acquiring Naza TTDI more than five years ago.

Meanwhile, Naza TTDI is well-known for the development of Taman Tun Dr Ismail in Kuala Lumpur.

KL Metropolis is currently the single biggest integrated mixed development in Kuala Lumpur for Naza TTDI and piling work has started.

The RM15 billion development is almost four times bigger than Naza TTDI's ongoing Platinum Park project in the Kuala Lumpur city centre, which is worth RM4 billion.

KL Metropolis will have 18 40-storey office and residential towers, a 100-storey building and three hotels, as well as the new one-million-sq-ft Matrade centre and two retail centres with more than two million sq ft of space.

By Business Times

Axis REIT to buy RM48.5m assets

KUALA LUMPUR: Axis Real Estate Investment Trust (REIT) has proposed an acquisition and leaseback of a three-storey office block and a logistic warehouse complex for RM48.5mil cash from DHL Properties (M) Sdn Bhd.

The agreement was entered into by OSK Trustee Bhd, the trustee for Axis REIT.

The 3.083ha land is located in Barat Daya district, Penang, Axis REIT said in a statement on Tuesday.

“The proposed acquisition and leaseback of the properties is consistent with the investment objective and strategy of Axis REIT and it will be accretive to Axis REIT's distributable income.

“It will also diversify and enlarge Axis REIT's portfolio of properties and is expected to benefit in the long term from economies of scale,” it said.

By Bernama

Kuala Terengganu City Centre to give real estate a boost

KUALA LUMPUR : The Kuala Terengganu City Centre (KTCC) project by the East Coast Economic Region Development Council (ECERDC) will have a significant long-term impact on Terengganu’s property market.

The region will be able to attract more local and foreign investments into Terengganu’s real estate sector via this landmark development which has a gross development value of RM5 billion.

Foo Gee Jen, managing director of CH Williams Talhar & Wong, a renowned property consultancy, said KTCC’s trickle-down effect on the local property sector was already seen in Kuala Terengganu where the prices of land and homes had increased significantly.

By Bernama

KL Eco City to get off the ground early 2012

Kuala Lumpur: After more than a decade of delay, property developer SP Setia Bhd expects to start working on the RM6 billion KL Eco City, opposite Mid Valley Megamall in Kuala Lumpur, by early next year.

The land, where the development is to take place over 12 years, has been cleared and is currently vacant.

SP Setia first announced its intention to develop the land almost a decade ago, but had faced problems with squatters in the area, among other things.

In its filing to the stock exchange yesterday, SP Setia said Kuala Lumpur City Hall or Dewan Bandaraya Kuala Lumpur (DBKL) had finally formalised the privatisation of the 10ha cluster of land parcels in the Kampung Haji Abdullah Hukum area.

The land is being alienated to KL Eco City Sdn Bhd (KLEC), which is owned by SP Setia and Yayasan Gerakbakti Kebangsaan on a 60:40 basis.

With net saleable area of 5.7 million square feet, SP Setia proposes to build a retail podium, three boutique office blocks, strata-titled office suites, three office towers, three residential towers and a serviced apartment tower.

The proposed development will also include a new KTM Komuter train station that will be integrated with the existing Abdullah Hukum LRT station.

Railway Asset Corp (RAC) has mandated SP Setia to deposit RM42.09 million in land bond to ensure construction of the train station.

Under the privatisation agreement, SP Setia must pay DBKL RM105.92 million, less the premium already paid, over 36 months.

As soon as SP Setia starts construction, it has to deposit RM10.55 million as performance bond with DBKL.

It also has to cough up a minimum guaranteed profit of RM191.96 million for the proposed development.

These are in addition to the initial agreement that DBKL be taking 20 per cent of the project's net profits.

The privatisation is conditional upon SP Setia paying DBKL RM11.4 million, being the difference between the actual construction cost of the low medium cost Apartment Abdullah Hukum 1 and the purchase price offered to the squatter families on the DBKL land.

The deal also requires SP Setia to pay RM10.59 million, being 10 per cent of the residual land value and RM1.62 million, being the land value for Plot F of the DBKL cluster of land.

SP Setia said these payments to DBKL will not have a material effect on its gearing for the year ending October 2011.

SP Setia estimates the KL Eco City's gross development cost to total RM5 billion.

By Business Times

Naza seeks investors for RM15b project

Naza Group, Malaysia’s biggest luxury vehicle importer, is seeking to draw local and foreign investors for a proposed RM15 billion property project in Kuala Lumpur.

Naza is in talks with local and international investors who are “serious” in taking part in the project, which may include a 100-floor tower, Naza Group Joint Executive Chairman SM Nasarudin SM Nasimuddin told reporters in Kuala Lumpur today.

Naza won land rights in 2009 from the government in return for building an exhibition center. The company will develop the land in three phases over 15 years, it said in a statement.

By Bloomberg

SP Setia unit in development deal with KL mayor

PETALING JAYA: SP Setia Bhd's subsidiary KL Eco City Sdn Bhd (KLEC) has entered into a privatisation agreement with Datuk Bandar Kuala Lumpur for the development of about 24.88 acres in Kampung Haji Abdullah Hukum in Kuala Lumpur.

In a statement, SP Setia said the privatisation agreement was done in pursuant to a memorandum of understanding dated Aug 21, 2007 between the Datuk Bandar and KLEC, then known as Pelita Dunia Sdn Bhd.

SP Setia group owned 4.38 acres of the piece of land in Kampung Haji Abdullah Hukum, while Datuk Bandar owned the remaining 20.5 acres. KLEC has proposed to develop an integrated commercial and residential development with a net saleable area of about 5.7 million sq ft on the said land.

The proposed development, worth a gross development value of RM6bil and a gross development cost of RM5bil, would comprise a retail podium; three boutique office blocks; strata-titled office suites; three office towers; three residential towers and a service apartment tower.

By The Star

HK office space still costliest

HONG KONG: Hong Kong continues to be the most expensive place in the world to rent office space, according to research from a property brokerage.

And despite an expected slowdown over the next 12 months, Hong Kong would likely retain its world-leading position, Colliers International said yesterday.

Hong Kong again topped the rankings for the world’s most expensive cities to rent office space, ahead of London’s West End, Paris, Tokyo and the City of London, according to Colliers.

By Reuters

More Malaysians buy properties in London

KUALA LUMPUR: There has been an influx of Malaysian buyers for properties in central London in the last two years, driven by the favourable exchange rate and long-term investment appeal, says Savills Inc director James Talbot.

Talbot said more Malaysians are buying properties in London to spread their investment risk.

"There is also the feel-good factor of owning a property in central London, being an international financial district," he said in an interview recently.

Talbot said property prices in central London have appreciated by 13 per cent over the last three years and are forecasted by Savills Research to grow by 6 per cent per year over the next five years.

Rental yields have also increased from 3 per cent five years ago to about 5 per cent, he said.

"London is a good and safe place to put your money. If you compare with Australia, it is easier to buy and sell a property in London.

"For Australia, as a foreigner, you can only buy properties that are under construction and sell to an Australian and pay tax on profits. There is no such ruling in the UK," Talbot said.

Savills, a global real estate service provider with over 200 offices and associates around the world, is introducing a new project in central London called Caro Point to Malaysian investors.

Caro Point offers 84 apartment units, priced between STG355,000 (RM1.7 million) and STG11 million (RM55 million).

Talbot said 26 units have been sold to investors in the UK and nine in Southeast Asia.

The STG100 million Caro Point is part of the Grosvenor Waterside development in central London.

Talbot said Savills will continue to introduce new projects in London to Malaysian investors despite the global uncertainties. The group has introduced some 20 projects in Malaysia in the last five years.

By Business Times