Developer’s latest property overlooks city skyline

Proud: Teh with the scale model of G Residence during the media event.

G RESIDENCE is one of Tan and Tan Devlopments Berhad’s latest properties in the heart of metropolitan Kuala Lumpur.

Designed to complement contemporary lifestyles, this property is developed by Opt Ventures Sdn Bhd, a joint venture company between Tan and Tan (an IGB company) and Sin Heap Lee Sdn Bhd.

Positioned as leasehold on commercial title, this two-tower, 23-storey residential apartments is strategically located along Jalan Desa Pandan on a 1.46ha site with the prime units overlooking the city’s skyline.

IGB head of property development, Teh Boon Ghee said G Residence overlooks Lingkungan U-Thant, backs the Polo Club and neighbours the Royal Selangor Golf Club.

“G Residence is affordably priced at an average of RM650 per sq ft with an expected maintenance fee of 30sen per sq ft, which includes the sinking fund. The prices range between RM610,000 to RM1mil per unit.

“It is surrounded by a mature township of shopoffi ces and apartments. So far, 80% of G Residence have been sold out since the property was officially opened for sales on Dec 8 last year,” said Teh, who is the executive director for IGB. He added that those who wish to buy G Residence units for investment can expect a rental yield of about 5.5%.

The apartments consist of three specifi cations, namely Types A, B and C, with Type C being the largest at 1,545sq ft followed by Type A 1,400sq ft and Type B 1087sq ft.

Type B would be an ideal choice for singles, who intend to start living on their own, while Types A and C would fit families with school-going children.

Every unit offers breathtaking views and high ceilings, which offers a spacious outlook.

Spacious: Showroom featuring a living room in a Type A unit of G Residence located at Jalan Desa Pandan, Kuala Lumpur.

This is further enhanced with a non-column layout.

One need not incur additional costs for an expensive kitchen cabinet as each unit comes with a built-in kitchen and Electrolux cooker hob and hood.

If you love entertaining friends with your culinary expertise, you can opt for Types A and C units as it is equipped with a dry and wet kitchen for your convenience.

Meanwhile, the master bedrooms have an attached bathroom fully equipped with modern fixtures.

G Residence is equipped with facilities such as a multi-purpose hall, a 2,300sq ft gym with skylight, 30m swimming pool, wading pool, playground and a common garden.

With 26 commercial units available at the ground and fi rst fl oor, residents can expect life at G Residence to be lively. To cater to this concept, the developer has ensured that ample carpark space will be provided for retail alone. The carpark entrance to retail outlets will be separate to ensure better security.

The commercial units and apartments are only accessible via an access card. The property is scheduled to be completed in February 2015.

Established in 1971, Tan & Tan Developments Berhad is one of Malaysia’s most innovative and visionary developer.

The company has been the recipient of The Edge’s Top Property Developers Award for eight consecutive years and has been awarded the prestigious FIABCI Award of Distinction for Residential Development in 2002.

In 2002, Tan & Tan and IGB Corporation Berhad merged, making Tan & Tan a wholly owned subsidiary of IGB, which is listed on the main board of Bursa Malaysia.

The company is famous for high-end condominium living with its Hampshire Place, Cendana and U-Thant Residence. Its success story continues with the joint development of Sierramas, an exclusive guarded residential estate with KL-Kepong Property Holdings Sdn Bhd. Tan & Tan is now redefining luxury with its newly unveiled Garden Manor.

By The Star

RM22bil plan to turn Mersing into the likes of Bali and Hawaii

Ambitious plan: Ungku Safian (left) briefing Ghani on the Mersing Laguna project.

JOHOR BARU: Radiant Starfish Development Bhd plans to position Mersing town into an international tourist destination on par with Gold Coast, Bali, Caribbean and Hawaii.

Chief executive officer Ungku Safian Abdullah said the town had all the ingredients to become a tourist hotspot and its potential had yet to be exploited.

“I can guarantee you that Mersing town will no longer look like what it is seven years from now,'' he said at a press conference yesterday.

Ungku Safian said Mersing, which was located on the north east of Johor, was sandwiched between 40 unspoiled islands and the 200-million-year old Endau-Rompin National Park.

He was speaking after the signing of memorandum of agreements with YPJ Holdings Sdn Bhd, Sinohydro Corp (M) Sdn Bhd, Shengrong International Group Co Ltd and CIMB Insurance Brokers Sdn Bhd witnessed by Johor Mentri Besar Datuk Abdul Ghani Othman.

The agreements entail the development of the RM22bil Mersing Laguna, which involves the building of hotels and villas, land reclamation, a water theme park and provide insurance coverage for the project.

Ungku Safian said the reclamation works and related infrastructure would cost RM4.2bil and RM1bil respectively, adding that some RM17bil was required for develop the rest of project which would take seven years to complete.

The components of the project will consists 22 blocks of five-storey boutique hotels with 3,000 rooms, 4,000 villas and service apartments, marina facilities and commercial development

“Mersing Laguna is aimed at attracting tourists with high spending power and travellers who would love nature and eco-tourism,'' he said.

Mersing Laguna is one of the nine projects announced by Prime Minister Datuk Seri Najib Tun Razak in Putrajaya on Feb 28 under the East Coast Economic Region.

By The Star

SP Setia eyes govt land redevelopment jobs

SP Setia Bhd is eyeing government land redevelopment projects as well as Permodalan Nasional Bhd's (PNB) prime landbank in the Klang Valley and Johor.

In a note today, HwangDBS Vickers Research Sdn Bhd said with PNB's backing, SP Setia could enhance bids for government land and large overseas projects.

It said SP Setia may also consider expanding in Vietnam, Australia and London.

"SP Setia has room to landbank further with a net cash of RM83 million and RM2.8 billion record unbilled sales," it said.

HwangDBS Vickers said given the improved clarity on management continuity and strong growth potential, it would maintain its "hold" call on SP Setia at a target price of RM4.50.

By Bernama

Naim Indah says no new plans for more projects

PETALING JAYA: Naim Indah Corp Bhd (Nicorp) denies there are plans for new development projects except for what had been agreed upon with Generasi Cipta Sdn Bhd last month.

The property and timber company was responding to a report on Monday in a Chinese daily saying that Nicorp's new chief executive was expected to bring in a new development plan worth RM500mil.

“The directors and major shareholder of Nicorp wish to clarify that there is no proposal from Datuk Raymond Chan to bring a new development plan into the company as at to date, apart from the heads of agreement (HoA) entered into with Generasi Cipta Sdn Bhd which was announced on Feb 10, 2012,” it said in the announcement on Bursa Malaysia.

On the sharp increase in its share price on Wednesday, it said that the company was not aware of any reason for the movement except for the update regarding the Generasi Cipta HoA.

Nicorp announced on March 7 that it had received authorisation from Generasi Cipta “to initiate, negotiate and finalise other investment opportunities in the best interest of Nicorp except on property investments and property development business”.

The counter gained 26% on Wednesday to close at 65.5 sen from 52 sen a day before. Yesterday, the counter dipped 3.8% to 63 sen.

On Feb 10, Nicorp announced that it entered into a HoA with Generasi Cipta to buy 60% of Sagajuta for RM240mil.

Following that, Nicorp also intends to buy the remaining 40% stake in Sagajuta that is not owned by Generasi Cipta on similar terms as agreed between Nicorp and Generasi Cipta.

Nicorp added that the parties involved did not intend to undertake a mandatory general offer, seeking an exemption from the Securities Commission from it.

Chan is one of the directors of Generasi Cipta and also the managing director of Sagajuta Group and 1Green Enviro Sdn Bhd.

He was appointed Nicorp chief executive on Feb 29. On the same day, Sagajuta's former executive director Tan Tiang Lai was appointed Nicorp executive director.

Early in February, Chan bought a 12.11% stake in Nicorp from the then largest stakeholder Crest Energy Sdn Bhd. With the Sagajuta acquisition, he and several others stand to own up to 33% stake in Nicorp via a reverse takeover from his private company Sagajuta (Sabah) Sdn Bhd.

By The Star

PNB buys two London properties for RM2.6bil

PETALING JAYA: Permodalan Nasional Bhd (PNB) has joined the ranks of global investors to buy into prime London commercial offices with its latest purchase of two properties, 90 High Holborn and One Exchange Square, bringing to four its portfolio of properties in the international financial centre.

The two buildings, which come with single tenancies, were bought from German fund manager KanAm for £550mil (RM2.6bil), offering PNB an annual yield of 5.25%, a source said.

One Exchange Square is tenanted by the European Bank for Reconstruction and Development, a quasi public organisation, while 90 High Holborn is the headquarters of law firm Olswang.

The deals are the latest in a series of purchases by PNB since late last year. A local Malay daily reported group president and chief executive officer Tan Sri Hamad Kama Piah Che Othman as saying PNB needs to diversify its investments, instead of solely relying on the equities market.

In December, PNB bought a 12-storey office space in Milton & Shire House on 1 Silk Street for £350mil from US investor Beacon Capital.

In January, it bought Woolgate Exchange, on 25 Basinghall Street, a nine-storey commercial office with a basement floor for £270mil from Irish development and investment company D2, a source said. Woolgate Exchange offers an annual yield of 5.7% compared with the average annual yield of 5.25%.

PNB's first foreign foray was in Australia where it bought Santos Place in Brisbane for A$290mil in August 2010 from Nilson Properties.

The Employees' Provident Fund is the other fund that is buying into London. Prior to PNB's entry into foreign property investment, the EPF has been the most aggressive among Malaysia-based funds, with most, if not all, its overseas investments in Britain. In 2010, EPF said it was putting aside £1bil (RM4.85bil) for its British property investments. EPF has so far spend more than £600mil (RM3.1bil) in London purchases, with most of the properties offering a yield exceeding 5% a year.

Besides PNB and EPF, Tabung Haji may be the other fund seeking investments abroad. Its overseas property assets are located in the Middle East. In the case of Tabung Haji, whatever it purchases must be syariah-compliant, which means the building must be used for halal activities.

PNB manages a fund size of over RM190bil while Tabung Haji manages funds totalling about RM30bil.

London has been considered a “safe haven” with investors from Europe, mainland China, Middle East and Russian investors buying into its commercial office space sector of late.

By The Star

Private investors to develop Sabah resort

PETALING JAYA: Three private investors from Sabah and Peninsular Malaysia have grouped together to develop Sabah's first over-water resort development comprising 88 villas and a restaurant 12 metres underwater located off the coast of Semporna.

Known as Alorie Lepa Lepa, the villas, ranging from 2,200 sq ft to 5,500sq ft, are being sold for between RM2.8mil and RM5.5mil each with a minimum 7% annual returns for the first five years.

There would be a 10% compounded interest every five years, which meant that from the sixth to the 10th year, the owner would receive a 7.7% annual return, its managing director Louise Lang said.

The gross development value is RM280mil.

On how the private investors were able to form a company and to build on the sea off Mabul Island, Lang said the company had “acquired the submerged land title from the Sabah state government to build on the site.

“The buyers will receive master titles to the villas,” she added.

By The Star

Second Festival City mall on the way

FESTIVAL City Sdn Bhd, a Lion Group company which aims to be a major mall owner and operator in Malaysia, is finalising a deal for a second shopping complex.

Festival City, a unit of Parkson Holdings Bhd, was set up to diversify into mall management to derive a new source of income.

The Lion group is no stranger to mall operations as it previously managed a chain of shopping complexes which carried the Parade brand. It also used to own and operate the Xtra hypermarket chain.

"We are finalising a second mall," senior general manager Gui Cheng Hock said in a recent interview. The mall, to be located in Malacca, is likely to be ready within three years.

The group has since 2005 voiced its plans to diversify into shopping complex management. The plans finally materialised in October 2011, when it opened its first mall called KL Festival City along Jalan Genting-Kelang.

The mall measures 1.1 million sq ft with a total net lettable area of 500,000 sq ft . The second mall, Gui said, will have a larger net lettable area than the first one.

He explained that at KL Festival City, it was not able to cater to retailers who had wanted more space.

As such, it hopes that by having a bigger mall it will not have to disappoint tenants.

Asked if it plans to diversify into shopping complex management in countries where it has already established Parkson stores, Gui said it wanted to establish itself first in Malaysia.

The idea is to have a successful mall that will also see its tenants flourish. Once this relationship is established, it will be easier for the mall operator to take its tenants with it when it expands.

"Once the tenants are confident with our mall, we can form a core group of tenants who will come with us where ever we expand," he said.

Gui sees potential for its shopping complexes in Kuala Lumpur, Johor Bahru and Penang.

Does it prefer to build its own mall or to will it buy existing malls?

"The direction is to look for land and to build from scratch...but we are open to all opportunities," Gui said.

By Business Times

Shoppers, there's a new mall in town

KUALA LUMPUR: KL Festival City, the new mall under the Lion Group, expects tenants within the mall to rake in between RM300 million and RM400 million in the first year of operations.

The mall, located along Jalan Genting-Klang, will achieve this by October 31 2012. The mall will be officially launched today.

The group's Parkson department store is the anchor tenant occupying a total 122,000 sq ft of retail space.

Mini anchors include MBO Cinemas with seven screens, Econsave supermarket, Superstar Karaoke and TBM Electrical.

Thirty per cent of the mall tenants are in the food and beverage including Nando's, Kenny Rogers , Bumbu Desa and Papa Johns.

"The mall sees a monthly foot count of between 400,000 and 500,000," Festival City Sdn Bhd senior general manager Gui Cheng Hock told Business Times in an interview.

The mall's catchment within a 15 minute drive is around 600,000 households deriving an average monthly income of RM4,200.

The mall has gross area of 1.1 million sq ft and a net lettable area of 500,000 sq ft.

The mall derives between nine per cent and 10 per cent yield, which Gui says is better than the yields derived by most real estate investment trusts of around six per cent and seven per cent.

By Business Times

E&O rebuts report

PETALING JAYA: Eastern & Oriental Berhad (E&O) has issued a statement over an article which appeared in The Star Online on March 7, 2012, entitled "Malaysia's Naim Holdings lags on analyst revisions".

The statement from E&O group corporate strategy director Lyn Chai follows:

"Eastern & Oriental Berhad (E&O) would like to take this opportunity to share with your readers the true performance of the company to provide a more balanced and accurate report that can be substantiated by fund managers and analysts.

* Local and foreign analysts who cover our stock, including some who have followed us for several years, reaffirm that the company's estimated earnings per share (EPS) for the financial year ending March 31 2012 remains between RM0.08 and RM0.11.

* E&O recently announced a 300% year-on-year increase in net profit to RM83.6mil for the third quarter ended Dec 31 2011.

* Following the strong third-quarter results announcement the analysts who covered E&O raised their target price: CIMB - RM1.77; Kenanga - RM1.49; and Hwang-DBS - RM1.80

* In terms of earnings sustainability, E&O as at Jan 31 2012 has achieved unbilled sales (completed property sale transactions and bookings that are yet to be recognised in the books) amounting to nearly RM950mil which will be recognised within the next two to three years.

* E&O continues with its property launches with the most recent being the first tower of the RM1.2bil Andaman at Quayside condominiums in Penang. In the heart of Kuala Lumpur's central business district, E&O's highly-successful St Mary's Residences will be completed this year and riding on this success, new launches are being planned. Down south, the company will be launching its first product within the 210-acre RM3bil masterplanned Medini Integrated Wellness Capital in the next 12 months.

* E&O also has a renowned hospitality and lifestyle arm that is expanding and contributes consistently to the group's earnings, and is the foundation on which E&O's brand for exclusivity is derived.

Based on these facts and figures, it is more than evident that E&O is in a robust earnings sustainability position. Most significantly, E&O is on an upward momentum to further strengthen its foothold as Malaysia's leading luxury lifestyle property development group."

By The Star

Tenants’ market as KL sees addition of 6.9mil sq ft of office space

PETALING JAYA: Kuala Lumpur's (KL) office market is expected to remain competitive this year with a substantial amount of over 6.9 million sq ft of office space scheduled to come on stream this year, which will put further pressure on rental rates.

Property consultancy, Knight Frank in its Second Half 2011 Real Estate Highlights report said competition for tenants was anticipated to intensify and it would remain a tenants' market.

Buildings due for completion this year include Menara Worldwide, Menara Petronas 3 Phase II, Menara Binjai, Menara FELDA, Integra Tower at The Intermark, Menara Darussalam (Grand Hyatt) and The Crest @ Jalan Sultan Ismail.

The report said the completions would see an additional 2.8 million sq ft of office space, bringing the projected cumulative supply in the city to 49 million sq ft.

In the city's fringe, an estimated 4.2 million sq ft of office space is expected to come on-stream. They include Dua Sentral, Lot A KL Sentral CIMB HQ, Lot E KL Sentral Park, The Horizon Bangsar South (Phase 3), Menara LGB, 348 Sentral and Lot G KL Sentral.

DTZ Research's Property Times Kuala Lumpur Q4 2011 report said the overall office sector forecast pointed to a weakening market as an oversupply was expected due to major completions scheduled in the next two years in the midst of a weakening economy.

“By 2014, an additional 13.4 million sq ft of office space will enter the market. Of this, about 11 million sq ft is accounted by 16 buildings located within the city's golden triangle, compared with the previous peak in 1998 which saw a total office space of 4.8 million sq ft,” the report added.

Meanwhile, transaction of new office buildings had been fairly active with both local and foreign investors looking around for good buys.

Property Times said investment transactions in the last quarter of 2011 saw a jump of 3.6 times in value totalling RM4.8bil against RM1.35bil in the third quarter of last year.

This was mainly contributed by the listing of the Pavilion REIT with an asset value of RM3.54bil.

It said going forward, given the projected slower economic growth, and a weakening property market across most segments, there would be more caution, and as a result deals would probably become more challenging due to a widening gap between buyers' and sellers' expectations.

“With the forthcoming general election expected to be called in early 2012, an element of political uncertainty will arise and may deter investors, especially foreign entities which would like to see a clearer political landscape settling in after the election before embarking on major purchases,” the DTZ report added.

The Knight Frank report said although there was a substantial amount of supply coming on stream, it had yet to translate to a decline in occupancy.

“In KL city, average occupancy during the second half of 2011 was recorded at 84.8% while in KL city fringe, it was 87.5%. Grade A offices in both the KL city and KL city fringe achieved higher occupancy rates at 87.0% and 89.8% respectively attributed to limited existing supply of good grade office space.”

It pointed out that the leasing market remained active and was driven mainly by the oil and gas and financial sectors. Major leasing transactions such as Weatherford and Transocean took up about 31,000 sq ft each in GTower while Citigroup committed to approximately 100,000 sq ft in Cap Square Office Tower II.

The review period also saw Petronas committing to some 30,000 sq ft in Vista Tower while Technip and Shell took up approximately 77,300 sq ft in total in the newly completed Dijaya Plaza.

The report said well-located quality and good grade office space with MSC status and green features might command higher rental rates due to limited existing supply of such prime space.

“The situation has led to more developers aiming to provide office space with both MSC status and Green Building Index (GBI) accreditation,” it added.

By The Star

Hua Yang plans RM80mil project in Perak township

PETALING JAYA: Hua Yang Bhd has unveiled plans worth RM80mil in gross development value (GDV), which includes a pedestrian mall and three types of homes at the 838-acre Bandar Universiti Seri Iskandar (BUSI) township in Perak.

“We will launch three types of affordable homes, ranging from RM130,000 to RM180,000 for a single-storey to a double-storey linked house,” said Hua Yang Perak branch manager Tony Ng.

The Seri Idaman and Seri Andaman series will consist of 909 units of single-storey terrace houses measuring 800 sq ft and priced from RM130,000 onwards.

While the double-storey linked houses, named Tropika and Casa series, will be priced from RM180,000 onwards and are due to be completed by the second quarter 2014 and the first quarter 2015 respectively.

Developed since 2002, the township is Hua Yang’s biggest township project nationwide.

The remaining land bank of 490 acres will generate up to RM 872mil in GDV.

“We’ve recorded excellent sales results for BUSI, with 81% of our launches fully sold. This translates to RM56.3mil in GDV based on our nine-month results announcement for financial year 2012.

He said the company would be previewing the Pedestrian Mall at its sales launch on March 10, aimed to further enhance the facilities offered at OneBU@Seri Iskandar, the lifestyle and business hub of the township.

To date, up to RM800,000 had been invested in upgrading works of BUSI, which included the construction of a new stone wall at the entrance, artistic banner with key wordings of the development, landscaping works, resurfacing of the roads, and increased roads signages.

“As for financial year 2013, we aim to launch RM80mil worth of projects at the township,” said chief financial officer May Chan.

By The Star

OSK unit buying land for RM45.4mil

KUALA LUMPUR: OSK Property Holdings Bhd, via its wholly-owned subsidiary, Potensi Rajawali Sdn Bhd, has proposed to buy two parcels of industrial land totalling 13.73 acres from Perniagaan Sri Mujur Maju Sdn Bhd for RM45.4mil.

According to the company's filing with Bursa Malaysia yesterday, the Shah Alam land was in an established industrial area occupied by large warehouses and factories known as Taman Perindustrian Subang Utama.

“The land has been approved with development order for 16 units of semi-detached factories with land sizes and built up ranging from 17,900 sq ft to 50,800 sq ft and 14,896 sq ft to 60,076 sq ft respectively. Based on preliminary plans and subject to approval from the relevant authorities, OSK Property proposes to revise and enhance the development plan by offering smaller industrial units to increase affordability and saleability,” it said.

By The Star

CEO to park 73 of his privately-owned properties worth RM1.1bil into Dijaya

Tan (left) shaking hands with RHB investment Bank officer-incharge Mike Chan. RHB and AmInvestment are joint advisers for the amalgamation exercise. With them are AmInvestment MD for corporate and institutional banking Pushpa Rajadurai and Dijaya deputy MD Dickson Tan Yong Loong. – Starpix/KAMARUL ARIFFIN

PETALING JAYA: Tan Sri Danny Tan Chee Sing, the substantial shareholder and group chief executive officer of Dijaya Corp Bhd, will inject 73 of his privately-held properties with a market value of RM1.1bil for approximately RM948.7mil into Dijaya Corp, making it one of the largest related party transactions in Malaysia.

In a press conference yesterday, Dijaya officials said that the proposed amalgamation exercise would be satisfied by RM250mil cash and the balance via the issuance of a 10-year 2% coupon Redeemable Convertible Unsecured Loan Stocks (RCULS), with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

There would also be a renounceable rights issue of up to 491.3 million new shares of RM1 each, which Tan has committed to take up at least RM250mil, which is also the minimum scenario of the proposed exercise.

This effectively means that Tan would be injecting cash of RM250mil back into the company.

The chances of Tan triggering a general offer threshold is remote as there are clauses which limit the quantity of RCULS to be converted depending on profits made by Dijaya over the next 10 years.

Dijaya's renounceable rights issue of up to 491.3 million new shares of RM1.00 each is priced at an issue price of RM1.20 per rights share, together with a bonus issue of up to 122.83 million new shares of RM1 each in Dijaya.

Shareholders are entitled to four rights shares for every five existing Dijaya shares held and one bonus share for every four rights shares subscribed.

“These proposed acquisitions and corporate exercises will need to be approved by shareholders of Dijaya and the Securities Commission. An independent adviser with the purpose of protecting minorities, would be appointed,” said Astramina Advisory managing director Wong Muh Rong, who is also Dijaya's joint adviser for the exercise.

Presently, Tan directly owns 30.5% of Dijaya, and indirectly owns 17.86% through Impeccable Ace Sdn Bhd and 18.26% through Golden Diversity Sdn Bhd.

Under a maximum scenario, Tan's shareholding in the company would remain at 30.5%. Under a minimum scenario, his shareholding will increase to 42.67%.

Wong said that chances of a mandatory general offer was remote, as offer letters to underwrite Dijaya's shares under a minimum scenario had already been received from RHB Bank Bhd and AmInvestment Bank Bhd.

Meanwhile, the properties to be injected are a mixture of land and property investments in the Klang Valley, Penang, Johor and Sabah which would see Dijaya's landbank increase to 870 acres from 802 acres, and its total lettable area increase from 550,000 sq ft to 1.4 million sq ft. “Some of these landbank are in prime locations such as Jalan Bukit Bintang, Jalan Conlay and SS2 in the Klang Valley, and Macalister Road in Penang,” Dijaya managing director Datuk Tong Kien Onn told a press conference here.

The investment properties are already tenanted out offering average yields of 8%.

The injection of new assets would see Dijaya's gross development value (GDV) increase to RM37bil from RM30bil.

Wong added that Tan had been acquiring these parcels of land and investment properties for the last 20 years.

The indicative market value of the land held for development is RM720mil while the land held as investment properties are valued at RM384mil, as appraised by independent professional valuers, CH William, Knight Frank, CBRE and Rahim & Co.

“As this stock was previously never on the radar screen of investors, I would say that this deal is more positive than negative. Firstly, it improves the market capitalisation and liquidity of the company. A GDV of RM37bil puts it right up there with some of the biggest property players in the country,” said a property analyst

“While its true that not all of the assets purchased are earnings accretive apart from the investment properties, the new landbank makes them a lot bigger and streamlines the whole group. Size-wise, Dijaya has grown quite significantly,” said the analyst.

Meanwhile, for long-term capital requirements of the group, Dijaya proposed a debt funding via the issuance of up to RM500mil guaranteed commercial paper/medium term notes programme (CP/MTN) with an option to issue detachable warrants.

RHB Bank Bhd and AmBank Bhd are the guarantor banks and RHB Investment Bank Bhd and AmInvestment Bank Bhd are the appointed joint lead arrangers and joint lead managers for the proposed CP/MTN programme.

Astramina Advisory is the appointed financial adviser for the proposed CP/MTN programme.

Dijaya would abort its proposed private placement that was previously announced on Aug 18 2011.

According to Dijaya's announcement to Bursa, the proposed acquisitions are aimed at amalgamating the group's assets with those held by the major shareholders which would ultimately mitigate potential conflict of business interests between Dijaya and its major shareholders whilst at the same time help transform it into a single real estate flagship with greater access to larger landbank for future developments and long-term real estate investments as well as greater economies-of-scale.

“The introduction of additional long-term real estate investments will provide the group with a more stable and sustainable income streams arising from rental income,” said Dijaya in its announcement.

Astramina Advisory, RHB Investment Bank and AmInvestment Bank have been appointed as the joint advisers for Dijaya for the amalgamation exercise.

By The Star

2nd-time buyers get a better shot at buying executive condos in Singapore

Better chances: From 5% previously, 30% of executive condominium units will now be set aside for second-time buyers in Singapore. – AFP

SINGAPORE: When the news broke last Friday that second-time buyers of public housing units would be given more chances to purchase executive condominium (EC) units, Eddie Luo, 37, was elated.

The engineer and his wife were seeking to move their two children and his father from their five-room flat in Sengkang, and had failed to get a unit at Twin Waterfalls in Punggol on their first try. They are happy now that they have landed themselves a unit.

Luo was among the many who thronged the Punggol showroom on Sunday, following the announcement of a revised quota of flats for second-timers namely those who have previously enjoyed a housing subsidy from the government.

From 5% previously, 30% of units in ECs will now be set aside for this class of house hunters. ECs are sold by private developers with condominium-like facilities, but come with conditions set by the Housing Board, such as a five-year minimum occupancy period.

All 182 units of Twin Waterfalls set aside by developer Frasers Centrepoint for second-timers were snapped up in two hours.

Its spokesman, Elson Poo, said the strong demand was a testament to the attractive pricing of the project, which is going for S$698 per sq ft (psf).

In all, 460 of the 728 units have been sold.

The response for the 670 units in the other executive condominium project being marketed, the Tampines Trilliant, was more muted.

A Sim Lian group spokesman said that of the 168 units released for second-timers on Saturday, about 110 units were sold within the day.

About 300 units, which go for S$766 psf, have been sold.

Ultimately, the demand boiled down to price as well as the quota, said SLP International's head of research Nicholas Mak.

“The higher the price goes, the more skewed towards second-timers the number will be, because first-timers may not be able to afford the more expensive developments,” he said.

“Going forward, you might see more ECs being dependent on second-timers or HDB upgraders rather than first-timers, given the glut of affordable Build-To-Order (BTO) flats coming onstream.”

The government has promised to build about 25,000 new flats this year.

Based on Mak's data, the psf prices of ECs when they were launched in 1996 was about S$400; EC units now go from about S$700 to S$750 psf.

Nearby private condominium units are fetching S$820 to S$950 psf for comparable flat types.

On the other end of the scale, a larger BTO flat will cost S$250 to S$350 psf, and a resale flat, S$380 to S$550 psf.

“If second-timers continue to go for ECs, it may be feasible to revise the quota even further,” said Mak.

Poo agreed. Based on the sales at Twin Waterfalls, the 30% allocated to second-timers have already been taken up. Of the 70% reserved for first-timers, slightly less than half have been taken up.

“The government has responded to ground sentiment. But it could still be frustrating for the second-time buyer, who may have a stronger financial base but do not have the chance to buy EC units,” he said.

Colin Tan, the research head at Chesterton Suntec International, said such demand might continue, since second-timers felt they had a real chance at getting a choice unit now.

As a rule, the ratio of first- and second-timers are observed only within the first month of a project's launch.

After that, any eligible house hunter may buy, although the less-desirable units may be left by then.

Tan said he did not expect the quota to make a big impact on the market due to the small quantities, unless the government sold more land for ECs.

By ANN/The Straits Times

KL City Hall needs RM135mil to compenstate proposed project in Bukit Gasing

The Kuala Lumpur City Hall (DBKL) will have to fork out RM135mil to acquire the land if it did not want the proposed development in Bukit Gasing.

Mayor Tan Sri Ahmad Fuad Ismail said according to Federal Territory (Planning) Act 1982 (Act 267) Section 25, the developer could claim compensation if DBKL cancelled the approval for the development.

He said this in response to the gathering by about 100 people on Sunday who were concerned about the development on the Kuala Lumpur side of the hill.

The residents had applied for a judicial review in the High Court in 2008 challenging DBKL’s approval of the development.

The High Court had made its decision on Sept 6, 2010 and the residents were denied the right to be heard.

The residents appealed against the decision in the Court of Appeal yesterday but it was unsuccessful.

“Even before the inception of Federal Territory of Kuala Lumpur, the land had already been zoned for housing by the Selangor town and country planning department. “Therefore, there is no issue about land usage when we received the proposal for development.

“On the other side, there is already a high-density condominium project while the proposed one in Kuala Lumpur only has 71 bungalows.

“The earthwork being carried out at the site is being monitored by the Public Works Institute of Malaysia (Ikram).

“DBKL has 52.6ha of green lung compared with only 36.42ha for Selangor and we have added another 6ha more, so how can they question our commitment?” he asked.

He added that the application for the green lung to be gazetted had already been submitted to the land office.

“The land use and zoning are also in our structure plan. The Lembah Pantai MP Nurul Izzah has been informed about the proposed development and discussions had been held with the residents.

“There wasn’t any public hearing because the land title was not changed and our approval was based on the compliance of the terms for development,” he said.

By The Star

Alternative sites for studio apartments for elderly not feasible

SINGAPORE: The Housing Board has decided to go ahead with its original plans to build 130 units of studio apartments for the elderly at the junction between Toh Yi Drive and Toh Yi Road.

This decision comes a month after residents there submitted a petition to their Member of Parliament, Sim Ann, in a bid to oppose plans. The Housing Board said that the site was the only one available in the estate suitable to build the studio apartments.

However, it said that it had addressed the residents' concerns of losing the estate's main recreational facility by incorporating a children's playground, elderly fitness corner and community garden.

The Housing Board also explained that the other alternative sites suggested by the residents were not feasible.

By ANN/The Straits Times

The fear factor in property purchases

PETALING JAYA: Property developers and consultants from Penang to Johor are generally bullish about the residential property market and do not think there is a bubble.

They are of the view that there are two types of buyers, one who is buying out of need and the other out of fear that prices would go up further. The speculative element which was evident a few years ago has dissipated.

Real Estate and Housing Developers' Association (Rehda, Penang) chairman Datuk Jerry Chan said: “Buyers have money which they would like to park somewhere.

“Sales this year have been better than last year, driven by fear rather than the speculative element,” said Chan who is also group managing director for Penang-based Asas Dunia Bhd.

Chan was commenting on a report Debunking the property bubble myth by CIMB which said that talk of a property bubble was overstated as the sharp rise in residential property prices over the past few years was confined to selected areas.

“Affordability is near its all-time high and prices have to surge 50% to 100% before affordability falls to pre-Asian financial crisis levels,” the report said.

The report said it was surprising that residential prices had not risen at a faster pace as new supply had fallen significantly over the past few years.

Chan said tourism was also very big in Penang and if China and Indian nationals were to buy in Penang, it would “turn the market upside down.”

“So I foresee Penang prices would continue to rise because of inadequate supply of land, not because of inadequate developments,” he said.

In the Klang Valley, Reapfield Properties Sdn Bhd chief executive officer Gerard Kho said domestic demand for residentials was expected to be strong until the middle of this year.

Managing director for the Khong & Jaffar group of companies Elvin Fernandez said “it is not a question of whether there is a bubble or not but whether prices in certain areas are tied in to fundamentals or not.

“And we know in certain hot spots, they are not,” Fernandez said.

In Johor, KGV International Property Consultants Samuel Tan said the state was undergoing a transition because of the Iskandar Malaysia factor.

“New houses entering the market are priced a lot higher than three years ago but the market is accepting it,” he said.

By The Star

Ivory expects nod for RM10b Penang project this week

GEORGE TOWN: Ivory Properties Group Bhd is expecting approval from the Penang Development Corporation (PDC) this week for its proposed RM10 billion “Penang World City” project at Bayan Mutiara.

Executive director Murly Manokharan said yesterday the development was expected to incorporate, among others, medical facilities, Grade-A offices and both high-end and affordable housing units.

“We are open to working with strategic partners for certain components of the development, such as a shopping mall and a medical centre, as opposed to seeking investors for an outright sale of chunks of the land,” he told Business Times after the company’s extraordinary general meeting (EGM).

Present was Ivory’s deputy chairman and executive director Datuk Seri Nazir Ariff Mushir Ariff.
During the EGM, which lasted 40 minutes and saw a shareholder turnout of 62 per cent, the company received unanimous approval from those present for its plan to purchase and develop a 41.02ha site in Bayan Mutiara on Penang island, from the PDC and Chief Minister of Penang (Incorporated).

The land was sold for RM1.07 billion, or RM240 per sq ft, to be paid over five years.
Shareholders also gave their nod for a joint-venture between Ivory and Dijaya Corporation Bhd to develop the land, which is located near the Penang Bridge.

After the execution of the Builder Agreement, Tropicana Ivory Sdn Bhd – which is 55-per cent owned by Dijaya and 45 per cent by Ivory – will develop the RM10-billion Penang World City development. The development will be a mixed-use residential and commercial project.

Murly said the master-planned development, which has been crafted by international firm Design 103 International Ltd, would adhere to any height restrictions imposed by the Department of Civil Aviation, owing to the project’s proximity to the Penang International Airport at Bayan Lepas. Any project sited within 15km from the airport is deemed by the DCA to be in the flight path.

Penang World City, he noted, was expected to be completed in eight years, with work on the first phase commencing at the end of this year.

“Now that we have obtained shareholder approval to enter into the joint-venture with Dijaya and also for the proposed rights issue, we are looking at a RM500 million capitalisation and are in a better financial position to carry out the project,” Murly said.

As the principal builder of the project and turnkey contractor, Ivory will manage and develop the entire project, for which it will be entitled for 48 per cent of the gross development value.

“We are currently engaging with both local and foreign investors who may been keen to partner us in certain phases of the proposed development.

“However, our first obligation is to honour whatever outstanding payments which are being owed and we are looking at settling the RM80 million being owed to the PDC by April 10,” Murly added.

PDC and Chief Minister Inc sealed a deal on November 11 last year to sell the land to Penang-based Ivory Properties Group Bhd for RM1.07 billion, or RM240 per sq ft, to be paid up in five years.

Ivory’s chairman and group chief executive officer Datuk Low Eng Hock was quoted last month saying that the company has paid a RM22.1 million deposit for the land and that the remainder will be paid according to the scheduled progress payment after shareholder approval was obtained at the EGM.

By Business Times

Takaful Malaysia to invest in London properties

KUALA LUMPUR: Takaful Malaysia Bhd is looking at diversifying its investment portfolio by acquiring properties in London this year.

Group managing director Datuk Hassan Kamil said the Islamic insurer has RM200 million in its war chest.

"We are scouting for commercial buildings or offices within a 30km radius of central London," Hassan told Business Times recently.

It is learnt that the company has appointed an adviser to search for properties by the end of this month.

He viewed that a depreciated currency and a devalued market were making London properties a worthy investment.

"It is a good time for investments, both for potential capital gains as well as reaping good yields," he said.

Hassan believed that yields of between 5.5 per cent and 8.5 per cent could be achieved in London's main office and financial district, where demand was hit hard due to the credit crunch.

He said if successful, Takaful Malaysia would be the first fully-owned Malaysian insurer or takaful player to own properties overseas.

Bank Negara Malaysia limits local insurers to invest up to only five per cent of their total assets overseas.

This means that Takaful Malaysia will have about RM250 million for property investment overseas from the total RM4.9 billion investment assets.

Hassan hoped that any potential London investments would be the beginning of its plans to broaden income through properties.

The investment portfolios of takaful operators are similar to their conventional counterparts' and include equity, cash and bonds.

More than 50 per cent of Takaful Malaysia's asset allocation is in sukuk and equity while Government Investment Issue (GII) and properties are its other main assets.

Properties investment currently makes up about five per cent of the company's investment portfolio.

Its largest investment is its headquarters - Dataran Kewangan Darul Takaful building, which it bought in 2005 for RM117.7 million.

By Business Times

SP Setia sees southern Johor driving its growth in the next 10 to 15 years

Top draw: SP Setia’s show houses in Bukit Indah, seen here, were a big hit among buyers.

JOHOR BARU: SP Setia Bhd sees southern Johor as the company's fixed deposit in view of the development and progress taking place in Iskandar Malaysia.

President and chief executive officer Tan Sri Liew Kee Sin said the economic growth corridor was moving in the right direction and would drive growth of the property market in Johor.

“We made the right decision to come to Johor Baru in 1997 although at that time it was not on the radar of many Klang Valley-based developers,'' he told StarBiz in an interview recently.

Liew: Iskandar Malaysia is moving in the right direction and will drive growth in Johor’s property market.

Liew, who was born and bred in Johor, said he had a vision that the state would be the next growth centre in the country after Klang Valley and he was right.

He said Johor was now the company's main revenue earner, contributing about RM1bil in sales for three consecutive years 2009, 2010 and 2011.

“We are confident of repeating the same figure this year as the take-up rate for our properties here has been good since day one,'' said Liew.

The company was fortunate as all of its projects in southern Johor were strategically located within the flagship development zones of Iskandar Malaysia.

Liew said Johor's close proximity with Singapore was another added advantage as Johor Baru was always the first choice among Singaporeans and expatriates working in the republic looking for residential properties as their second or weekend homes.

Its on-going projects in southern Johor are Bukit Indah with only 5% land left for development, Setia Eco Gardens and Setia Business Park (383.64ha and 50% still available for future development).

Others are new developments - Setia Business Park II (107.24ha), Setia Tropika (299.46ha and 40%), Setia Indah (359.36ha and 10%) and Setia Eco Cascadia (110.07ha and 70%).

“The remaining landbank will keep us busy in Iskandar Malaysia in the next 10 to 15 years with a gross development value of RM8bil,'' he said.

Liew said the company would continue looking for more land in Iskandar Malaysia and outside Johor Baru, adding that there were still large tracts of land available in Johor for township development.

Almost a decade after the company set foot in Johor Baru, the Government under the then Prime Minister Tun Abdullah Ahmad Badawi launched Iskandar Malaysia on Nov 4, 2006.

SP Setia was the first developer to start a housing scheme in Nusajaya at that time Bukit Indah - long before Nusajaya was declared as one of the five flagship development zones in Iskandar Malaysia.

Other flagship development zones in the 2,217 sq km Iskandar Malaysia are the JB City Centre, Eastern Gate Development Zone, Western Gate Development Zone and Senai-Kulai.

“The company's early years in Johor Baru were the toughest time because Malaysia in 1997 and 1998 was not spared from the Asian financial crisis,'' said Liew.

At one time, Liew even pondered about whether the company had made the right decision expanding to Johor but he was determined to stay put.

Liew said unlike house buyers in the Klang Valley, those in Johor were quite sceptical at that time and a majority of them would only buy houses from Johor-based developers.

Initially it was hard to convince potential buyers in Johor Baru as for many years until the 1990s, most of them only knew three reputable Johor-based developers.

“These three developers have been around long before those from outside Johor started coming in and have a long list of loyal customers,'' said Liew.

However, through perseverance, never-give-up attitude and an innovative selling campaign, SP Setia had been able to win them over with its maiden project called Bukit Indah.

“Despite the 1997-98 recession, Bukit Indah was selling well and it was a launching pad for more of our projects in Johor Baru,'' he added.

Liew said apart from offering competitive prices for its Bukit Indah houses at that time, the company set itself apart from the other Johor Baru-based developers.

He said instead of building a few units of show houses at a certain precinct of development as was usually done by other developers here, the company decided to build a show village in Bukit Indah showcasing several types of houses.

The idea was a big hit among buyers as they had a better idea of what were being offered at the different precincts in the housing estate.

“We were also the first developer to build a central town park in Johor Baru at our Bukit Indah project and it has set a precedent not only in Johor but in the country too,'' said Liew.

Since then, the state government has decided that developers in Johor were required to provide a central green lung area or park for house buyers in their projects.

SP Setia has allocated 8.09ha from the 610.67ha of Bukit Indah for use as a park. The park which was opened 16 years ago is undergoing a RM15mil upgrading work.

By The Star